Exhibit 10.5

 

May 11, 2009

 

Jonathan W. Trutter

c/o Deerfield Capital Management LLC
6250 North River Road, 9th Floor

Rosemont, Illinois 60018

 

Dear Jonathan:

 

As provided in your Employment Agreement with Deerfield Capital Management LLC
(the “Company”), dated June 26, 2004 (the “2004 Employment Agreement”), you are
entitled to receive a payment equal to $2,000,000 (the “Retention Bonus”) in the
event that you remain employed by the Company or an affiliate of the Company
through June 25, 2009.  Due to your valuable contribution to the Company and
your commitment to invest a minimum of $500,000 in an investment vehicle managed
by the Company, Deerfield Pegasus Loan Capital LP (“DPLC”), the Company agrees
to accelerate the vesting of a portion of the Retention Bonus.  In accordance
with the foregoing, the Company hereby agrees to the following, subject to your
acknowledgement and agreement below:

 

(A)          You shall be entitled to an acceleration of the vesting of a
portion of the Retention Bonus (the “Accelerated Amount”), which amount shall be
calculated pursuant to the following sentences and paid to you within five days
following the date of this letter agreement.  The Accelerated Amount shall be
equal to the amount required to be treated as compensation to you for income tax
purposes such that the actual payment amount to you (as determined using the
Company’s standard payroll practices) is equal to $400,000.  For avoidance of
doubt, for purposes of this letter agreement and the 2004 Employment Agreement,
upon payment of the amount required by this paragraph, the Company shall be
treated as having made a payment to you of the entire amount of the Accelerated
Amount (not only a payment of $400,000).

 

(B)           You commit to invest $400,000 of the Accelerated Amount in DPLC on
a pro rata basis with the Company or its affiliates, subject to the Company
satisfying its own capital commitment.

 

(C)           Within five days following June 25, 2009, the Company shall pay
you an amount equal to $2,000,000 less the Accelerated Amount.

 

--------------------------------------------------------------------------------

 

This letter agreement is binding upon you and the Company and its successors and
assigns.  Except as specifically amended herein, all provisions of the 2004
Employment Agreement remain in effect.

 

 

Sincerely,

 

 

 

Deerfield Capital Management LLC

 

 

 

 

 

/s/ Robert A. Contreras

 

Name: Robert A. Contreras

 

Title: General Counsel

 

 

 

 

 

Acknowledged and Agreed:

 

 

 

 

 

/s/ Jonathan W. Trutter

 

Name: Jonathan W. Trutter

 

Date: May 11, 2009

 

 

--------------------------------------------------------------------------------