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 deliver its approval or rejection of such
waiver or amendment, as applicable, within four (4) Business Days of receipt of
such notice. If the Administrative Agent approves such waiver or amendment, as
applicable, the relevant Loan Party may approve or consent to such waiver or
amendment, as applicable.  If the
Administrative Agent rejects such waiver or amendment, as applicable, the
relevant Loan Party shall not approve or consent to such waiver or amendment,
as applicable. For the avoidance of doubt, a waiver or amendment (including, without
limitation, pursuant to a Material Modification) of the material terms of an
Eligible Loan in the Collateral that the Administrative Agent rejects and that
is consented to or approved by the lenders party to such Eligible Loan other
than a Loan Party shall not be a Forbearance Termination Event;


 


(d)           the
Loan Parties shall use commercial reasonable efforts to solicit interest in the
remaining Collateral from potential third-party purchasers and in the event
that a potential third-party purchaser expresses interest in the remaining
Collateral or any portion thereof, the Loan Parties shall use commercially
reasonable efforts to pursue a sale of the remaining Collateral or the
applicable portion thereof to such potential third-party purchaser; and


 


3

















 


(e)           the
Lenders may (but shall have no obligation to) solicit interest in the remaining
Collateral or any portion thereof from potential third-party purchasers and
upon any Loan Party receiving notice from the Administrative Agent that a
potential third-party purchaser has expressed interest in the Collateral,
without further action on the part of the Lenders or the Administrative Agent,
the Loan Parties shall use commercially reasonable efforts to pursue a sale of
the remaining Collateral or the applicable portion thereof to such potential
third-party purchaser.


 


5.             Cure.  The Loan Parties may cure any breach of Section 4(b) by
depositing cash in the Collection Account in an amount sufficient to repay the
Aggregate Unpaids in full.


 


6.             Remedies.  The Loan Parties hereby acknowledge and agree
that after the end of the Forbearance Period, notwithstanding anything to the
contrary in the Sale and Servicing Agreement or any other Transaction Document,
but subject to applicable law: (i) in compliance with Section 9-610
of the UCC, the Administrative Agent may elect to sell the Collateral by public
or private proceedings, by one or more contracts, as a unit or in parcels, and
at any time and place and on any terms and to the extent notice thereof shall
be required by law, ten (10) days’ notice to the Borrowers of the time and
place of any public sale or the time after which any private sale is to be made
shall constitute commercially reasonable notification; and (ii) in compliance
with Section 9-620 of the UCC, the Administrative Agent may alternatively
elect to accept the Collateral in full satisfaction of the Aggregate Unpaids
due and owing to the Lenders.


 


7.             Dissolution of DTRS.   The Administrative Agent and the Lenders
hereby consent to the dissolution of DTRS on or after the date hereof (the “Dissolution”)
and agree that notwithstanding any provision of the Sale and Servicing
Agreement to the contrary, the Dissolution shall not constitute a Termination
Event, provided that the Administrative Agent receives evidence to its
reasonable satisfaction of the Dissolution promptly after the occurrence
thereof.  In connection with the
foregoing, the Administrative Agent and the Lenders hereby consent to the
withdrawal of an amount not to exceed $3,000 from the Collection Account in
order to repay, on behalf of DTRS, the inter-company note payable from DTRS to
the Originator, provided that the funds withdrawn by the Servicer are
used for such purpose and such withdrawal is included in the first Servicing
Report delivered after the date of such withdrawal.  Upon the dissolution of DTRS, all references
(in any capacity) to DTRS shall be deemed deleted from the Transaction
Documents and all references to Borrowers and Loan Parties in the Transaction
Documents or this Agreement shall be deemed to not include DTRS.


 


8.             Effectiveness.  This Agreement shall be effective as of the date when the
Administrative Agent shall have received (i) executed counterparts hereof from
each party hereto and (ii) the proceeds of the Sale of Collateral in
reduction of the Advances Outstanding.


 


9.             Representations of Loan Parties.  Each of the Loan Parties represents and
warrants as follows:


 


(a)           It
has taken all necessary action to authorize the execution, delivery and
performance of this Agreement.


 


4

















 


(b)           This
Agreement has been duly executed and delivered by such Person and constitutes
such Person’s legal, valid and binding obligation, enforceable in accordance
with its terms, except as such enforceability may be subject to (i) bankruptcy,
insolvency, reorganization, fraudulent conveyance or transfer, moratorium or
similar laws affecting creditors’ rights generally and (ii) general
principles of equity (regardless of whether such enforceability is considered
in a proceeding at law or in equity).


 


(c)           No
consent, approval, authorization or order of, or filing, registration or
qualification with, any court or governmental authority or third party is
required in connection with the execution, delivery or performance by such
Person of this Agreement.


 


(d)           The
execution and delivery of this Agreement does not (i) violate, contravene
or conflict with any provision of its organization documents or (ii) violate,
contravene or conflict with any laws applicable to it or any of its
Subsidiaries.


 


(e)           Immediately
after giving effect to this Agreement, (i) the representations and
warranties of the Loan Parties set forth in the Transaction Documents shall be
true and correct in all material respects (except that the representation as to
no existence of a Termination Event or Potential Termination Event is hereby
made subject to the Acknowledged Termination Event) and (ii) no Potential
Termination Event or Termination Event (other than the Acknowledged Termination
Event) shall have occurred or be continuing.


 


10.           Reference to and Effect on
Transaction Documents.  Except as
specifically modified herein, the Transaction Documents shall remain in full
force and effect.  The execution,
delivery and effectiveness of this Agreement shall not operate as a waiver of
any right, power or remedy of the Lenders, the Swingline Purchaser, the
Collateral Agent, the Backup Servicer, or the Administrative Agent under any of
the Transaction Documents, or constitute a waiver or amendment of any provision
of any of the Transaction Documents, except as expressly set forth herein.  Any breach of the terms of this Agreement
shall constitute a Termination Event under the Sale and Servicing Agreement, and
this Agreement shall constitute a Transaction Document.


 


11.           Further Assurances.  Each of the parties hereto agrees to execute
and deliver, or to cause to be executed and delivered, all such instruments as
may reasonably be requested to effectuate the intent and purposes, and to carry
out the terms, of this Agreement.


 


12.           GOVERNING LAW.  THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS
OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO ANY
CHOICE OF LAW PROVISIONS THEREOF (OTHER THAN SECTIONS 5-1401 AND 5-1402 OF THE
GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK).


 


13.           Release.  As a material part of the consideration for
Administrative Agent and the Lenders entering into this Agreement, the Loan
Parties agree as follows (the “Release Provision”):


 


5

















 


(a)           Release
and Discharge.  Each Loan Party
hereby releases and forever discharges the Administrative Agent and the Lenders
and their respective predecessors, successors, assigns, officers, managers,
directors, shareholders, employees, agents, attorneys, representatives, parent
corporations, subsidiaries, and affiliates (the “Lender Parties”)
jointly and severally from any and all claims, counterclaims, demands, damages,
debts, agreements, covenants, suits, contracts, obligations, liabilities,
accounts, offsets, rights, actions and causes of action of any nature
whatsoever, including, without limitation, all claims, demands, and causes of
action for contribution and indemnity, whether arising at law or in equity,
presently possessed, whether known or unknown, whether liability be direct or
indirect, liquidated or unliquidated, presently accrued, whether absolute or
contingent, foreseen or unforeseen, and whether or not heretofore asserted,
which such Loan Party may have or claim to have as of the date of this
Agreement against any Lender Party in any way related to the Transaction
Documents.


 


(b)           Covenant
Not to Sue.  Each Loan Party agrees
not to sue any Lender Party or in any way assist any other person or entity in
suing any Lender Party with respect to any claim released herein.  The Release Provision may be pleaded as a
full and complete defense to, and may be used as the basis for an injunction
against, any action, suit, or other proceeding which may be instituted,
prosecuted, or attempted in breach of the release contained herein.


 


(c)           Representations
and Warranties.  Each Loan Party
hereby acknowledges, represents and warrants to each Lender Party that:


 


(i)            Such
Loan Party has read and understands the effect of the Release Provision. Such
Loan Party has had the assistance of independent counsel of its own choice, or
has had the opportunity to retain such independent counsel, in reviewing,
discussing, and considering all the terms of the Release Provision; and if
counsel was retained, counsel for such Loan Party has read and considered the
Release Provision and advised such Loan Party to execute the same.  Before execution of this Agreement, such Loan
Party has had adequate opportunity to make whatever investigation or inquiry it
may deem necessary or desirable in connection with the subject matter of the
Release Provision.


 


(ii)           Such
Loan Party has executed this Agreement and the Release Provision thereof as its
free and voluntary act, without any duress, coercion, or undue influence
exerted by or on behalf of any person.


 


(d)           Consideration.  Each Loan Party understands that the Release
Provision was a material consideration in the agreement of the Administrative
Agent and the Lenders to enter into this Agreement.


 


(e)           Broadly
Construed.  It is the express intent
of each Loan Party that the release and discharge set forth in the Release
Provision be construed as broadly as possible in favor of the Administrative
Agent and the Lenders so as to foreclose forever the assertion by such Loan
Party of any claims released hereby against the Administrative Agent and the
Lenders.


 


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14.           Miscellaneous.


 


(a)           Section headings
in this Agreement are included herein for convenience of reference only and
shall not constitute a part of this Agreement for any other purpose.


 


(b)           This
Agreement may be executed in any number of separate counterparts, each of which
shall collectively and separately constitute one agreement.  Delivery of an executed counterpart of this
Agreement by facsimile shall be effective as an original and shall constitute a
representation that an original shall be delivered to the Administrative Agent.


 


15.           Entire Agreement.  This Agreement and the other Transaction
Documents embody the entire agreement between the parties and supersede all
prior agreements and understandings, if any, relating to the subject matter
hereof.  This Agreement and the other
Transaction Documents represent the final agreement between the parties and may
not be contradicted by evidence of prior, contemporaneous or subsequent oral
agreements of the parties.


 


16.           Amended and Restated Agreement
Superseded.  This Agreement
supersedes and replaces the Amended and Restated Agreement in its entirety and
shall not be deemed to be a novation thereof.


 


[REMAINDER OF THE PAGE
INTENTIONALLY LEFT BLANK]


 


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IN
WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.


 


 


	
  BORROWER:

  	
  DWFC, LLC,

  
	
   

  	
  as a Borrower

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jonathan W. Trutter

  
	
   

  	
   

  	
  Name:

  	
  Jonathan W. Trutter

  
	
   

  	
   

  	
  Title:

  	
  Authorized Signatory

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  BORROWER:

  	
  DEERFIELD TRS (BAHAMAS)
  LTD.,

  
	
   

  	
  as a Borrower

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jonathan W. Trutter

  
	
   

  	
   

  	
  Name:

  	
  Jonathan W. Trutter

  
	
   

  	
   

  	
  Title:

  	
  Authorized Signatory

  
	
   

  	
   

  
	
   

  	
   

  
	
  ORIGINATOR:

  	
  DEERFIELD CAPITAL LLC,

  
	
   

  	
  as the Originator

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jonathan W. Trutter

  
	
   

  	
   

  	
  Name:

  	
  Jonathan W. Trutter

  
	
   

  	
   

  	
  Title:

  	
  Authorized Signatory

  
	
   

  	
   

  
	
   

  	
   

  
	
  SERVICER:

  	
  DEERFIELD CAPITAL LLC,

  
	
   

  	
  as the Servicer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jonathan W. Trutter

  
	
   

  	
   

  	
  Name:

  	
  Jonathan W. Trutter

  
	
   

  	
   

  	
  Title:

  	
  Authorized Signatory

  



 


[SIGNATURES CONTINUE ON THE FOLLOWING PAGE]


 


 


Second Amended and
Restated Forbearance Agreement


 

















 


	
  SWINGLINE PURCHASER:

  	
  WACHOVIA BANK, NATIONAL
  ASSOCIATION,  as the
  Swingline Purchaser

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Mike Romanzo

  
	
   

  	
   

  	
  Name:

  	
  Mike Romanzo

  
	
   

  	
   

  	
  Title:

  	
  Director

  
	
   

  	
   

  
	
   

  	
   

  
	
  INSTITUTIONAL PURCHASER:

  	
  WACHOVIA BANK, NATIONAL
  ASSOCIATION, as the Institutional Purchaser

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Mike Romanzo

  
	
   

  	
   

  	
  Name:

  	
  Mike Romanzo

  
	
   

  	
   

  	
  Title:

  	
  Director

  
	
   

  	
   

  
	
   

  	
   

  
	
  ADMINISTRATIVE AGENT:

  	
  WACHOVIA CAPITAL
  MARKETS, LLC,

  
	
   

  	
  as the Administrative
  Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Raj Shah

  
	
   

  	
   

  	
  Name:

  	
  Raj Shah

  
	
   

  	
   

  	
  Title:

  	
  Managing Director

  



 


 


Second Amended and
Restated Forbearance Agreement