Exhibit 10.1
Execution Copy
AMENDMENT NO. 1
TO
BRIDGE LOAN AGREEMENT
Dated as of
August 2, 1999
Among
CREDITRUST SPV99-2, LLC
as Borrower
CRDT SPV99-2 CAPITAL, INC.
as Guarantor
CREDITRUST CORPORATION,
as Parent Guarantor
THE LENDERS named therein
and
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION,
as Administrative Agent
Dated as of April 11, 2000
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AMENDMENT NO. 1 TO BRIDGE LOAN AGREEMENT
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This Amendment No. 1 to Bridge Loan Agreement, dated as of April 11, 2000
and effective as of March 1, 2000 (this "Amendment") is executed by and among
Creditrust SPV99-2, LLC, as borrower (the "Borrower"), CRDT SPV99-2 Capital,
Inc., as guarantor (the "Guarantor"), Creditrust Corporation, as parent
guarantor (the "Parent Guarantor"), the lenders named therein (the "Lenders"),
and Norwest Bank Minnesota, National Association, as administrative agent (in
such capacity, the "Agent").
RECITALS
WHEREAS, the parties hereto have executed and delivered a Bridge Loan
Agreement dated as of August 2, 1999, by and among the Borrower, the Guarantor,
the Parent Guarantor, the Lenders and the Agent (the "Existing Agreement"); and
WHEREAS, the parties desire to agree to certain changes in the Existing
Agreement as set forth herein; and
WHEREAS, the parties hereto have obtained the unanimous consent (the
"Consent") of the Lenders to make these changes;
NOW, THEREFORE, in consideration of the mutual agreements herein contained,
each party agrees as follows for the benefit of the other parties and the
Lenders to the extent provided herein:
ARTICLE I
DEFINITIONS; AMENDMENTS
SECTION 1.1. Definitions. Any capitalized term used herein but not
defined herein shall have the meaning ascribed to it in the Existing Agreement.
SECTION 1.2. Amendments to Definitions.
(a) The definition of "Available Funds Payment Date"
in the Existing Agreement is hereby amended to
delete the reference to "15th" in the third lien
thereof and substitute therefor a reference to
"12th."
(b) The definition of "Conversion Date" in the
Existing Agreement is hereby amended to delete the
reference to "May 2, 2000" and substitute therefor
a reference to "March 1, 2000."
(c) The definition of "Conversion Default" in the
Existing Agreement is amended to delete the clause
"(iii) the Conversion Fee shall not have been
paid" and substitute
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therefor the following:
"(iii) payment of the Conversion Fee shall
not have been provided for in the Amended
Servicing Agreement."
(d) The definition of "Conversion Fee" in the Existing
Agreement is hereby amended in its entirety to
read as follows:
"Conversion Fee" means the conversion fee payable
for the benefit of the Lenders on the Conversion
Date equal to $2,787,063 and payable to the
Lenders as provided in Section 4.04 of the Amended
Servicing Agreement.
(e) A definition of "Excluded Proceeds" is added to
read in its entirety as follows:
"Excluded Proceeds" means (i) Net Cash Proceeds of
Indebtedness or equity securities of the Parent
Guarantor in a maximum amount of $20,000,000
(measured on a cumulative basis from the
Conversion Date) used for its working capital
purposes and not to purchase accounts receivable
and identified by the Borrower and the Parent
Guarantor in one or more officers' certificates
delivered to the Administrative Agent; and (ii)
Capital Lease Obligations of the Parent Guarantor
in the maximum amount of $5,000,000 during each
calendar year. Excluded Proceeds shall be over and
above the Revolving Facility.
(f) The definition of "Maturity Date" in the Existing
Agreement is hereby amended to delete the
reference to "May 2, 2000' and substitute therefor
a reference to "March 1, 2000."
(g) The definition of "Revolving Facility" is amended
to read in its entirety as follows:
"Revolving Facility" means any revolving credit or
similar facility reflected on the Parent
Guarantor's balance sheet for the fiscal quarter
ending immediately prior to the date of this
Agreement, as such facility may from time to time
be amended; provided, that in no event shall the
aggregate principal amount of Indebtedness
thereunder exceed $20.0 million at any time
outstanding.
(h) The definition of "Servicing Agreement" is amended
to read in its entirety as Follows:
"Servicing Agreement" means the Amended and
Restated Servicing Agreement, dated as of March 1,
2000, among the
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Borrower, the Parent Guarantor and Norwest Bank
Minnesota, National Association, pursuant to which
the Parent Guarantor will service the Consumer
Receivables owned by the Borrower in accordance
with Section 4.25.
SECTION 1.3. Amendments to Sections 2 and 4.
(a) Section 2.2 is amended to delete the reference to
"the fourth anniversary of the original Maturity
Date" on the seventh line thereof and the
reference to "such fourth anniversary date" on the
eighth line thereof and substitute therefor a
reference to "September 30, 2002."
(b) Section 2.5(a) is amended to add the following at
the end of the first sentence thereof: ";
provided, however, that no such prepayment shall
be required pursuant to this Section 2.5(a) from
Excluded Proceeds."
(c) Section 2.9(e) is deleted in its entirety and the
following provision is added:
(e) Allocation. Any money paid to, received by, or collected by the
Administrative Agent or any Lender pursuant to this Agreement or any other
Loan Document, shall be applied in the manner set forth in Section 4.04(b)
of the Servicing Agreement.
(d) Section 4.20 is amended to delete the proviso at
the end thereof and to capitalize the word
"Dispose" on the second line thereof.
SECTION 1.4. Additional Borrower Covenants.
(a) A new Section 4.32 is added to read in its entirety as follows:
4.32. Changes to Borrower's LLC Operating Agreement or Servicing
Agreement; Borrower's Separate Legal Existence. Neither the Borrower nor
the Parent Guarantor shall permit or suffer to be made any amendment to the
Limited Liability Company Operating Agreement of the Borrower or the
Servicing Agreement without the approval of the Majority Lenders. Borrower
shall take, or cause to be taken, all steps required to maintain the
Borrower's status as a separate legal entity.
(b) A new section 4.33 is added to read in its entirety as follows:
4.33. Access Rights. Borrower shall cause Parent Guarantor to
provide Lenders reasonable access to the Parent Guarantor's financial
advisors who are assisting on capital raising and merger and acquisition
activities, subject to the confidentiality requirements of Section 11.18
hereof.
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SECTION 1.5. Amendment to Miscellaneous Provisions.
(a) Section 11.18 is deleted in its entirety and the
following provision is added:
11.18 Confidentiality. Each of the Administrative Agent and the
Lenders agrees to keep confidential all non-public information provided to
it by the Parent Guarantor, any of its Subsidiaries, or any of its
financial advisers pursuant to this Agreement that is designated by the
Parent Guarantor or the financial adviser as confidential; provided that
nothing herein shall prevent the Administrative Agent or any Lender from
disclosing any such information (a) to the Administrative Agent, any other
Lender or any affiliate of any thereof, (b) to any Transferee or
prospective Transferee that agrees to comply with the provisions of this
Section 11.18, (c) to any of its employees, directors, agents, attorneys,
accountants and other professional advisors, (d) upon the request or demand
of any Governmental Authority having jurisdiction over it, (e) in response
to any order of any court or other Governmental Authority or as may
otherwise be required pursuant to any Requirement of Law, (f) if requested
or required to do so in connection with any litigation or similar
proceeding, (g) that has been publicly disclosed other than in breach of
this Section 11.18, (h) to the National Association of Insurance
Commissioners or any similar organization or any nationally recognized
rating agency that requires access to information about a Lender's
investment portfolio in connection with ratings issued with respect to such
Lender or (i) in connection with the exercise of any remedy hereunder or
under any other Loan Document.
SECTION 1.6. Amendment to Other Agreements.
(a) Warrants and Warrant Agreement.
(i) Clause (x) of the definition of the exercise
price in each of the Warrants and the Warrant
Agreement is hereby amended in its entirety to
read as follows: "$4.875".
(ii) Section 5 of the Warrant Agreement is hereby
amended to delete the reference to "May 2, 2000"
on the third line thereof and substitute therefor
a reference to "March 31, 2000".
(iii) The first sentence of the second paragraph
on the reverse of each of the Warrants is hereby
amended to delete the reference to "May 2, 2000"
and substitute therefor a reference to "March 31,
2000".
(b) Equity Registration Rights Agreement.
(i) Section 2.1(a) of the Equity Registration
Rights Agreement is hereby amended to delete the
reference to "May 2, 2000" on
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the second line thereof and substitute therefor a
reference to "March 31, 2000".
(ii) Section 2.1(b) of the Equity Registration
Rights Agreement is hereby amended to (A) delete
the reference to "180-day" on the seventh line
thereof and substitute therefor a reference to "90-
day," and (B) add the following sentence to the
end of Section 2.1(b): "Each Holder's obligation
set forth in this Section 2.1(b) is limited to the
first Registration Statement filed by the Company
pursuant to this Section 2.1."
(iii) Section 2.1 (g) of the Equity Registration
Rights Agreement is hereby amended in its entirety
to read as follows:
(g) The Company's obligations under this Section 2.1
are limited to two occasions only, unless the Company shall
be eligible to file a registration statement on Form S-3 (or
other comparable short form) under the Securities Act, in
which event the Company's obligations under this Section 2.1
shall not be limited to any number of occasions in respect
of such short-form registration statements.
(iv) Section 3.2 of the Equity Registration
Rights Agreement is hereby amended to add the
following at the end of the first sentence
thereof: "; provided, however, that the
indemnification obligation of each Holder pursuant
to this Section 3.2 shall not exceed the net
proceeds received by such Holder in the offering."
ARTICLE II
REPRESENTATIONS AND WARRANTIES
Section 2.1. The Borrower, the Parent Guarantor and the Guarantor jointly
and severally represent and warrant to the Administrative Agent and the Lenders
as follows:
(a) No Conversion Default has occurred or is continuing or will occur upon
the effectiveness of this Amendment and all conditions set forth in
Section 2.2 of the Existing Agreement (without giving effect to the
amendments herein) have been satisfied.
(b) Each of this Amendment, the Amended and Restated Servicing Agreement
and the Borrower's Amended and Restated Limited Liability Operating
Agreement has been duly authorized, executed and delivered by each of
the Borrower, the Guarantor and the Parent Guarantor to the extent a
party thereto, and constitutes the legal, valid and binding obligation
of each of the Borrower, the Guarantor and the Parent Guarantor, to
the extent a party thereto, enforceable against each of them in
accordance with its terms.
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(c) The Existing Agreement, as amended by this Amendment, constitutes the
legal, valid and binding obligation of each of the Borrower, the
Guarantor and the Parent Guarantor, enforceable against each of them
in accordance with its terms.
(d) All contracts to purchase the Consumer Receivables have been entered
into by and between the Parent Guarantor and the originating sellers
thereof.
(e) All funds for the purchases referred to in subsection (d) above were
advanced to the originating sellers thereof by the Borrower directly,
except with respect to (x) $214,591 of Consumer Receivables, and (y) a
deposit to Commercial Financial Services in the amount of $1,705,000
in furtherance of the purchase of Consumer Receivables, in both of
which instances such payments having been advanced by the Parent
Guarantor on behalf of the Borrower and subsequently reimbursed to the
Parent Guarantor by the Borrower.
(f) The Parent Guarantor acted solely as the agent of the Borrower with
respect to the Consumer Receivables, and the Parent Guarantor
disclaims having had at any time legal title or beneficial ownership
thereof.
ARTICLE III
MISCELLANEOUS PROVISIONS
SECTION 3.1. Amendment. This Amendment shall only be amended in the same
manner as the Existing Agreement shall be amended.
SECTION 3.2. Entire Agreement; Effect. This Amendment, together with the
Existing Agreement constitutes the entire contract among the parties relating to
the subject matter hereof and supersedes any and all previous agreements among
the parties relating to the subject matter hereof. This Amendment does not
alter, amend or waive any of the terms or provisions of the Existing Agreement
except for those terms or provisions expressly amended hereby.
SECTION 3.3. Governing Law. This Amendment shall be governed by and
construed in accordance with the laws of the State of New York to the same
extent as the Existing Agreement shall be so governed.
SECTION 3.4. Counterparts. This Amendment may be executed simultaneously
in any number of counterparts, each of which shall be deemed to be an original,
and all of which shall constitute but one and the same instrument.
SECTION 3.5. Costs and Expenses. The Borrower hereby agrees to pay or
reimburse the Administrative Agent and the Lenders, as provided in the Servicing
Agreement, for all of their costs and expenses in connection with this
transaction, including, without limitation, the fees and expenses of Weil,
Gotshal & Xxxxxx LLP, counsel to Whippoorwill Associates, Inc.
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and its affiliates, incurred since January 1, 2000 in connection with their
Loans to the Borrower, and the fees and expenses of counsel to the
Administrative Agent and the other Lenders in connection herewith. The Borrower
may also pay the reasonable fees and expenses of its own counsel and counsel to
the Parent Guarantor incurred in connection with this Amendment up to an
aggregate amount of $30,000.
SECTION 3.6. Conditions Precedent. This Amendment shall become effective
as of March 1, 2000 (the "Effective Date"), the Bridge Loans shall be deemed
converted to Term Loans as of such date and interest thereon shall be calculated
at the Conversion Rate commencing as of such date, upon the satisfaction of the
following conditions precedent:
(a) Each of the Lenders, the Borrower, the Guarantor, the Parent Guarantor
and the Administrative Agent shall have executed this Amendment;
(b) An aggregate of 1,236,138 Warrants pursuant to the Warrant Agreement
shall have been released from escrow dated as of the date of such
release for the benefit of the holders of the Term Loans pursuant to
the Escrow Agreement, which Escrow Agreement is hereby deemed amended
to delete the reference in Section 2.1(a) thereof to "May 2, 2000" and
substitute therefor the date hereof.
(c) The Amended and Restated Limited Liability Company Agreement of the
Borrower in the form of Exhibit A hereto shall have been executed and
delivered by the parties thereto with a copy delivered to the
Administrative Agent and the Lenders; and
(d) The Amended and Restated Servicing Agreement shall have been executed
and delivered by the parties thereto, with a copy delivered to the
Administrative Agent and the Lenders.
SECTION 3.7. Guarantee and Collateral Agreements. The Guarantor and the
Parent Guarantor hereby consent to this Amendment and confirm that the Guarantee
and Collateral Agreements shall remain in full force and effect after giving
effect to this Amendment.
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IN WITNESS WHEREOF, the parties have caused this Amendment No. 1 to Bridge
Loan Agreement to be duly executed by their respective officers as of the day
and year first above written.
CREDITRUST SPV99-2, LLC,
as Borrower
By: /s/Xxxxxx X. Xxxxxx
------------------------
Xxxxxx X. Xxxxxx
President
CRDT SPV99-2 CAPITAL, INC.,
as Guarantor
By: /s/Xxxxxx X. Xxxxxx
------------------------
Xxxxxx X. Xxxxxx
Chairman and
Chief Executive Officer
CREDITRUST CORPORATION,
as Parent Guarantor
By: /s/Xxxxxx X. Xxxxxx
------------------------
Xxxxxx X. Xxxxxx
Chairman and
Chief Executive Officer
NORWEST BANK MINNESOTA, NATIONAL
ASSOCIATION, not in its individual capacity,
but solely as Administrative Agent
By: _______________________________
Corporate Trust Officer
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GREYHOUND LINES, INC. AMALGAMATED COUNCIL
RETIREMENT AND DISABILITY TRUST,
By Bay Harbour Management, L.C., as Agent
By: _________________________________
Name:
Title:
10
BAY HARBOUR 90-1, LTD.,
By Bay Harbour Management, L.C., as Agent
By: _________________________________
Name:
Title:
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BAY HARBOUR PARTNERS, LTD.,
By Bay Harbour Management, L.C., as Agent
By: __________________________________
Name:
Title:
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BAY HARBOUR 98-1, LTD.,
By Bay Harbour Management, L.C., as Agent
By: _________________________________
Name:
Title:
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EVEREST CAPITAL MASTER FUND L.P.
By Everest Capital Ltd., as General Partner
By: ________________________________
Name:
Title:
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QUANTUM EMERGING GROWTH
PARTNERS, C.V.
By Everest Capital Ltd., as Investment Advisor
By: ___________________________________
Name:
Title:
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U.S. BANCORP INVESTMENTS, INC.
By: _____________________________
Name:
Title:
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PRESIDENT & FELLOWS OF HARVARD COLLEGE
By Whippoorwill Associates, Inc., as Agent
By: ________________________________
Name:
Title:
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THE ROCKEFELLER FOUNDATION
By Whippoorwill Associates, Inc., as Agent
By: _______________________________
Name:
Title:
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XXXX PARTNERS III, L.P.
By Whippoorwill Associates, Inc., as Agent
By: _______________________________
Name:
Title:
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XXXX PARTNERS IV, L.P.
By Whippoorwill Associates, Inc., as Agent
By: ________________________________
Name:
Title:
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XXXX OFFSHORE FUND LTD.
By Whippoorwill Associates, Inc., as Agent
By: _______________________________
Name:
Title:
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WHIPPOORWILL PROFIT SHARING PLAN
By Whippoorwill Associates, Inc., as Agent
By: __________________________________
Name:
Title:
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