Exhibit 10.1
EXECUTION VERSION
SECOND AMENDED AND RESTATED
FORBEARANCE AGREEMENT
THIS SECOND AMENDED AND RESTATED
FORBEARANCE AGREEMENT, dated as of May 8, 2009 (this “
Agreement ”), is entered into among DWFC, LLC (“
DWFC ”), Deerfield TRS (Bahamas) Ltd. (“
DTRS ” and together with DWFC, the “
Borrowers ”), Deerfield Capital LLC, as Originator
(the “ Originator ”) and as Servicer (the
“ Servicer ”), each of the Conduit Purchasers,
the Institutional Purchasers (collectively, and together with the
Swingline Purchaser (as defined below), the “ Lenders
”) and the Purchaser Agents from time to time party to the
Sale and Servicing Agreement referenced below, Wachovia Bank,
National Association, as Swingline Purchaser (the “
Swingline Purchaser ”), and Wachovia Capital Markets,
LLC, as Administrative Agent (the “ Administrative
Agent ”). Capitalized terms used herein and not
otherwise defined shall have the meanings ascribed thereto in the
Sale and Servicing Agreement (as defined below).
RECITALS
WHEREAS, the Borrowers, the
Originator, the Servicer, the Lenders, the Purchaser Agents, the
Swingline Purchaser, the Administrative Agent, Lyon Financial
Services, Inc. (d/b/a/ U.S. Bank Portfolio Services), as
Backup Servicer (the “ Backup Servicer ”), U.S.
Bank National Association, as Collateral Custodian (the “
Collateral Custodian ”) and the Hedge Counterparty
have entered into that certain Sale and Servicing Agreement dated
as of March 10, 2006 (as amended prior to the date hereof, the
“ Sale and Servicing Agreement ”).
WHEREAS, as of the required
reporting date for the fiscal quarters ending as of March 31,
2008 and June 30, 2008 (pursuant to
Section 6.10(d) of the Sale and Servicing Agreement),
Deerfield Capital LLC failed to maintain stockholder’s equity
of $240,000,000 plus 90% of the proceeds raised from equity
issuers, which constitutes a Servicer Default under
Section 6.15(j) of the Sale and Servicing Agreement (and,
accordingly, a Termination Event under Section 10.1(d) of
the Sale and Servicing Agreement (the “ Acknowledged
Termination Event ”).
WHEREAS, the Borrowers, the
Originator and the Servicer (collectively, the “ Loan
Parties ”) have requested, and the Administrative Agent
and the Lenders have, pursuant to a Forbearance Agreement dated as
of May 12, 2008 (the “ Original Agreement
”), agreed to a request by the Loan Parties to
(i) forbear from exercising certain rights and remedies
arising from the Acknowledged Termination Event, (ii) forbear
from exercising any right to terminate the rights and obligations
of the Servicer arising from the Acknowledged Termination Event and
(iii) waive application of the Concentration Limits set forth
in clause (a) of the definition of “Concentration
Limits” in each case, during the Forbearance
Period.
WHEREAS, the Loan Parties, the
Administrative Agent and the Lenders amended and restated the
Original Agreement pursuant to that certain Amended and Restated
Forbearance Agreement dated as of August 11, 2008 (the “
Amended and Restated Agreement ”).
WHEREAS, the Forbearance Period (as
defined in the Amended and Restated Agreement) ended on
November 30, 2008 as a result of the Loan Parties’
failure to achieve a Leverage Ratio (as defined in the Amended and
Restated Agreement) of 25%.
WHEREAS, on or prior to the date
hereof, a portion of the Collateral is being sold to a third-party
purchaser (the “ Sale of Collateral ”) and 100%
of the proceeds of the Sale of Collateral are being used to reduce
the Advances Outstanding, in connection with which the Loan
Parties, the Administrative Agent and the Lenders have agreed to
amend the Amended and Restated Agreement pursuant to the terms set
forth herein; and
WHEREAS, the Loan Parties have
requested that the Administrative Agent and the Lenders consent to
the dissolution of DTRS.
NOW, THEREFORE, in consideration of
the premises and the mutual covenants hereinafter contained, and
for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
AGREEMENT
1.
Estoppel, Acknowledgement and Reaffirmation . The Loan
Parties hereby acknowledge their obligations under the respective
Transaction Documents to which they are party and reaffirm that
each of the liens and security interests created and granted in or
pursuant to the Transaction Documents is valid and subsisting and
that this Agreement shall in no manner impair or otherwise
adversely affect such liens and security interests.
2.
Forbearance . Subject to the terms and conditions set
forth herein, the Administrative Agent and the Lenders agree that
they shall, during the Forbearance Period (as defined below),
(i) forbear from exercising any and all rights or remedies
available to them under the Sale and Servicing Agreement, the other
Transaction Documents and Applicable Law as a result of the
Acknowledged Termination Event or any of the Enumerated Termination
Events (as defined below), but only to the extent such rights or
remedies arise exclusively as a result of the Acknowledged
Termination Event or any of the Enumerated Termination Events, (ii)
waive the requirement to maintain stockholder’s equity in the
amount set forth in Section 6.15(j) of the Sale and
Servicing Agreement and (iii) waive application of the
Concentration Limits in computing the Borrowing Base;
provided that the Administrative Agent and the Lenders shall
be free to exercise any or all of their rights and remedies arising
on account of the Acknowledged Termination Event and the limited
waiver described in clauses (ii) and (iii)
above shall terminate and all Concentration Limits shall be
applied, at any time upon or after the end of the Forbearance
Period (as defined below).
3.
Forbearance Termination Events . Nothing set forth
herein or contemplated hereby is intended to constitute an
agreement by the Administrative Agent or the Lenders to forbear
from exercising any of the rights available to them under the Sale
and Servicing Agreement, the other Transaction Documents, or
Applicable Law (all of which rights and remedies are hereby
expressly reserved by the Administrative Agent and the Lenders)
upon or after the occurrence of the end of the Forbearance
Period. As used herein, a “ Forbearance Termination
Event ” shall mean the breach of any of the obligations
set forth in Section 4 hereof or the occurrence of any
Termination Event other than the Acknowledged Termination Event and
the Termination Events described in Section 10.1(a),
(b) (solely to the extent resulting from any failure to comply
with Section 6.10(c), (d) or (e) or
Section 6.12 of the Sale and Servicing Agreement),
(e) (to the extent related to the Originator rather than the
Borrowers), (h), (i), (j),
2
(k), (l) and (m) of the Sale and
Servicing Agreement (such Termination Events, the “
Enumerated Termination Events ”). The “
Forbearance Period ” shall be the period from, and
including, the date hereof to (but excluding) the earlier to occur
of:
(a)
July 7, 2009; and
(b)
the date on which a Forbearance Termination Event
occurs.
4.
Loan Party Obligations . During the Forbearance
Period,
(a)
the Servicer shall use commercially reasonable efforts to provide
to the Administrative Agent, upon request, all information
regarding each Eligible Loan in the Collateral (including, without
limitation, the most recent credit analysis of each Obligor with
respect to such Eligible Loan);
(b)
unless the Administrative Agent shall otherwise consent in writing,
such consent not be unreasonably withheld, none of the Loan Parties
shall effect a sale, assignment, transfer or other conveyance of
any part of the Collateral (a “ Transfer ”) that
would, after giving effect to such Transfer, fail to reduce the
Aggregate Unpaids to zero;
(c)
with respect to the waiver or amendment (including, without
limitation, pursuant to a Material Modification) of the material
terms of an Eligible Loan in the Collateral, the Loan Parties shall
provide, not later than five (5) Business Days prior to the
effective date of such waiver or amendment, written notice to the
Administrative Agent of such waiver or amendment along with the
Servicer’s recommendation for approval or rejection of such
waiver or amendment, as applicable, and the Administrative Agent
shall determine, in its reasonable judgment, if such waiver or
amendment, as applicable, is commercially reasonable and consistent
with industry practice, in each case, giving consideration to the
creditworthiness of the related Obligor and current market
conditions. The Administrative Agent shall use reasonable
efforts to deliv
