X0203 3 2011-04-13 0 0001313918 Deerfield Capital Corp. DFR 0001517708 DFR Holdings, LLC C/O RENOVA U.S. MANAGEMENT LLC 900 THIRD AVENUE, 19TH FLOOR NEW YORK NY 10022 0 0 1 0 Common Stock 4545455 D Senior Subordinated Convertible Notes due 2017 6.05 2010-06-09 2017-12-08 Common Stock 4312231 D Short Put Option (Obligations to Purchase Convertible Notes) 6.05 2017-12-08 Common Stock D The Senior Subordinated Convertible Notes due 2017 (the "Convertible Notes") of CIFC Deerfield Corp. (the "Issuer") are convertible by DFR Holdings, LLC ("DFR Holdings") into shares of Common Stock until 5:00 PM New York City time on December 8, 2017, which is the end of the business day immediately prior to the date that the Convertible Notes mature unless the Issuer elects to redeem all or any portion of the Convertible Notes early on or after June 9, 2012. The values set forth in these fields are based upon the stated conversion rate of 165.29 shares per $1,000 principal amount of Convertible Notes or approximately $6.05 per share. Following certain corporate events that occur prior to maturity, including, without limitation, distributions of stock, stock splits or stock combinations, cash dividends, payments in tender or exchange offers, issuances of equity-linked securities and spin-off transactions, the conversion rate for a holder who elects to convert its Convertible Notes in connection with such corporate event will be adjusted. DFR Holdings is in a short ownership position with respect to a put option owned by the Issuer. The Issuer may, in its sole discretion, pay up to 50% of the interest due on the Convertible Notes in "pay-in-kind" interest (the "PIK Interest") by issuing additional Convertible Notes to DFR Holdings on each quarterly interest payment date so long as the payment of PIK Interest would not be prohibited by, or constitute a default under, any other indebtedness or preferred stock of the Issuer or any of its subsidiaries. (continued on the next footnote...) (continued from the last footnote...) To the extent that the Issuer has elected to pay any interest in PIK Interest, then the Issuer will pay interest at a per annum rate of (i) 10% during the period from June 9, 2010 to June 8, 2012, (ii) 11% during the period from June 9, 2012 to June 8, 2013 and (iii) 12% during the period from June 9, 2013 to December 9, 2017, unless the Issuer elects to redeem all or any portion of the Convertible Notes on or after June 9, 2012. Assuming that the Issuer pays the maximum amount of PIK Interest allowed, DFR Holdings may be deemed to beneficially own an additional $6.514 million in aggregate principal amount of Convertible Notes, which will be convertible into approximately 1,076,637 shares of Common Stock based upon the stated conversion rate of 165.29 shares per $1,000 principal amount of Convertible Notes, or approximately $6.05 per share of Common Stock, which is subject to adjustment as discussed in Footnote (2). The Issuer may exercise its right to issue PIK Interest on any quarterly interest payment date under the Convertible Notes until the maturity date thereof as discussed in Footnote (1). Pursuant to the Assignment and Contribution Agreement, dated April 13, 2011, Bounty Investments, LLC ("Bounty"), assigned and contributed its shares of Common Stock and the $25 million in aggregate principal amount of the Convertible Notes, and all rights and obligations thereto, to DFR Holdings. The securities reported on this Form 3 report are directly held by DFR Holdings. Bounty owns 99% of the equity interests of DFR Holdings. Santa Maria Overseas Ltd., a Bahamanian company ("Santa Maria"), owns 80% of the equity interests of Bounty. Mayflower Trust, a Cayman Islands trust ("Mayflower") owns 100% of the equity interests of Santa Maria. TZ Columbus Services Limited, a British Virgin Islands corporation, is the trustee of Mayflower. DFR Holdings, LLC /s/ Andrew Intrater Name: Andrew Inrater Title: Manager 2011-04-15