<PAGE>
As filed with the Securities and Exchange Commission on March 18, 1999
Registration No. 333-70845
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------
AMENDMENT NO. 3
TO
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
--------------
Creditrust Corporation
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C> <C>
Maryland 7389 52-1754916
(State of (Primary Standard Industrial (I.R.S. Employer
incorporation) Classification Code Number) Identification No.)
</TABLE>
7000 Security Boulevard
Baltimore, Maryland 21244-2543
(410) 594-7000
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
--------------
Joseph K. Rensin
Chairman and Chief Executive Officer
Creditrust Corporation
7000 Security Boulevard
Baltimore, Maryland 21244
(410) 594-7000
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
--------------
Copies of all communications, including all communications sent to the agent
for service, should be sent to:
Henry D. Kahn, Esquire Todd H. Baker, Esquire
Piper & Marbury L.L.P. Gibson, Dunn & Crutcher LLP
36 South Charles Street One Montgomery Street
Baltimore, Maryland 21201 San Francisco, California 94104
410-539-2530 415-393-8200
--------------
Approximate date of commencement of proposed sale to the public: As soon as
practicable after the effective date of this Registration Statement. If any of
the securities being registered on this Form are to be offered on a delayed or
continuous basis pursuant to Rule 415 under the Securities Act of 1933, other
than securities offered in connection with dividend or interest reinvestment
plans, check the following box: [_]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering: [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering: [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering: [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box: [_]
--------------
The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 13. Other Expenses of Issuance and Distribution.
The following table sets forth estimated expenses in connection with the
offering described in this Registration Statement, all of which are to be borne
by the Registrant. All amounts are estimates, except for the Securities and
Exchange Commission registration fee, the NASD filing fee and the Nasdaq
National Market listing fee.
<TABLE>
<S> <C>
Securities and Exchange Commission registration fee................ $ 22,242
NASD filing fee.................................................... 8,501
Nasdaq National Market listing fee................................. 17,500
Printing and engraving expenses.................................... 100,000
Legal fees and expenses............................................ 150,000
Accounting fees and expenses....................................... 125,000
Transfer agent and registrar's fees................................ 5,000
Miscellaneous expenses............................................. 21,757
--------
Total............................................................ $450,000
========
</TABLE>
Item 14. Indemnification of Directors and Officers.
The Charter of the Company provides that, to the fullest extent permitted by
the Maryland General Corporation Law (the "MGCL"), the Company shall indemnify
current and former directors and officers of the Company against any and all
liabilities and expenses in connection with their services to the Company in
such capacities. The Charter further mandates that the Company shall advance
expenses to its directors and officers to the full extent permitted by the
MGCL. The Charter also permits the Company, by action of its Board of
Directors, to indemnify its employees and agents with the same scope and effect
as the foregoing indemnification of directors and officers.
The Company's Charter provides that, to the fullest extent that limitations
on the liability of directors. And officers are permitted by the MGCL, no
director or officer of the Company shall have any liability to the Company or
its stockholders for monetary damages. The MGCL provides that a corporation's
charter may include a provision which restricts or limits the liability of its
directors or officers to the corporation or its stockholders for money damages
except: (i) to the extent that it is proved that the person actually received
an improper benefit or profit in money, property or services, for the amount of
the benefit or profit in money, property or services actually received, or (ii)
to the extent that a judgment or other final adjudication adverse to the person
is entered in a proceeding based on a finding in the proceeding that the
person's action, or failure to act, was the result of active and deliberate
dishonesty and was material to the cause of action adjudicated in the
proceeding. This provision does not limit the ability of the Company or its
stockholders to obtain other relief, such as an injunction or recission.
The Charter of the Company authorizes the Company to purchase liability
insurance for its officers and directors, and the Company currently maintains
such insurance coverage on behalf of its officers and directors.
Item 15. Recent Sales of Unregistered Securities.
The following information relates to unregistered securities issued or sold
by the Company within the last three years:
On April 2, 1998, the Registrant issued $5,000,000 principal amount of
Senior Subordinated Notes, Series 1998 and Warrants to purchase 450,000 shares
of common stock in a transaction exempt from the registration requirements of
the Securities Act of 1933, as amended (the "Act"), pursuant to Rule 506 under
the Act. The
II-1
<PAGE>
Placement Agents were Ferris, Baker Watts, Incorporated and Boenning &
Scattergood, Inc. The net proceeds were used to purchase defaulted consumer
receivables and for general corporate purposes. Neither the Registrant nor any
person acting on its behalf offered or sold the Senior Subordinated Notes or
Warrants by any form of general solicitation or general advertising. The
Registrant reasonably believes that the Senior Subordinated Notes and Warrants
were sold only to accredited investors, and the Registrant provided all
material information available to the investors. Further, the Registrant
exercised reasonable care to assure that the investors were not underwriters,
as such term is defined in Section 2 (11) of the Act.
Item 16. Exhibits and Financial Statement Schedules.
(a) Exhibits:
<TABLE>
<CAPTION>
Exhibit
No Description
------- -----------
<C> <S>
1.1 Form of Underwriting Agreement.*
3.1 Charter of the Company.**
3.2 By-Laws of the Company.**
4.1 Form of stock certificate.**
4.2 Form of Senior Subordinated Note, Series 1998.**
4.3 Form of Common Stock Purchase Warrant.**
Senior Subordinated Note Series and Common Stock Warrant Purchase
4.4 Agreement.**
4.5 Registration Rights Agreement.**
5 Opinion of Piper & Marbury L.L.P.*
10.1 Creditrust 1998 Stock Incentive Plan.**
10.2 Creditrust 1998 Employee Stock Purchase Plan.**
10.3 Employment Agreement between the Company and Jefferson B. Moore.**
10.4 Employment Agreement between the Company and Richard J. Palmer.**
10.5 Employment Agreement between the Company and John D. Frey.*
10.6 Employment Agreement between the Company and John L. Davis.**
Agreement dated March 13, 1997 by and between Crystal Hill Advisors
10.7 and the Company.**
10.8 Servicing Agreement, dated August 6, 1997, by and between Creditrust
Corporation and Heartland Bank.**
10.9 Loan and Security Agreement, dated September 23, 1996, by and between
Oxford Capital Corporation and Signet Bank.**
10.10 Lease Agreement, dated January 24, 1996, by and between BRIT Limited
Partnership and Oxford Capital Corporation.**
10.11 Lease Agreement, dated January 22, 1997, by and between A&E Partners
and Creditrust Corporation.**
10.12 First Amendment to Lease, dated February 27, 1997, by and between A&E
Partners and Creditrust Corporation.**
10.13(a) Indenture and Servicing Agreement, dated as of June 1, 1998, by and
among Creditrust SPV2, LLC, Norwest Bank Minnesota, National
Association, Creditrust Corporation and Asset Guaranty Insurance
Company.**
10.13(b) Amendment No. 1 to Indenture and Servicing Agreement, dated as of
February 16, 1999, by and among Creditrust SPV2, LLC, as issuer,
Norwest Bank Minnesota, National Association, as trustee, and as
backup servicer, Creditrust Corporation, as servicer, and Asset
Guaranty Insurance Company, as note insurer. +
Limited Liability Company Agreement of Creditrust SPV2, LLC, dated
10.14 June 19, 1998.**
10.15(a) Indenture and Servicing Agreement, dated as of September 1, 1998, by
and among Creditrust Funding I LLC, Norwest Bank Minnesota, National
Association, Creditrust Corporation and Asset Guaranty Insurance
Company.***
</TABLE>
II-2
<PAGE>
<TABLE>
<CAPTION>
Exhibit
No Description
------- -----------
<S> <C>
10.15(b) Amendment No. 1 to Indenture and Servicing Agreement, dated as of
February 16, 1999, by and among Creditrust Funding I LLC, as issuer,
Norwest Bank Minnesota, National Association, as trustee, and as
backup servicer, Creditrust Corporation, as servicer, and Asset
Guaranty Insurance Company, as note insurer.+
10.15(c) Amendment No. 2 to Indenture and Servicing Agreement, dated as of
March 15, 1999, by and among Creditrust Funding I LLC, as issuer,
Norwest Bank Minnesota, National Association, as trustee, and as
backup servicer, Creditrust Corporation, as servicer, and Asset
Guaranty Insurance Company, as note insurer.+
10.16(a) Credit Agreement, dated as of October 28, 1998, between Creditrust
Corporation, the Lenders party thereto and Sunrock Capital Corp.++
10.16(b) Amendment No. 1 to Credit Agreement dated as of February 1999 and
effective as of October 28, 1998, by and among Creditrust
Corporation, as Borrower, and Sunrock Capital Corp., as agent.+
10.17(a) Indenture and Servicing Agreement, dated as of December 29, 1998, by
and among Creditrust SPV98-2, LLC, Norwest Bank Minnesota, National
Association, Creditrust Corporation and Asset Guaranty Insurance
Company.*
10.17(b) Amendment No. 1 to Indenture and Servicing Agreement, dated as of
February 16, 1999, by and among Creditrust SPV98-2, LLC, as issuer,
Norwest Bank Minnesota, National Association, as trustee, and as
backup servicer, Creditrust Corporation, as servicer, and Asset
Guaranty Insurance Company, as note insurer.+
10.18 Limited Liability Company Agreement of Creditrust SPV98-2, LLC, dated
as of December 29, 1998.*
10.19 Lease, dated January 11, 1999, by and between Butera Properties, LLC,
as Landlord, and Creditrust Card Services Corporation, as Tenant.*
21.1 List of Subsidiaries.*
23.1 Consent of Grant Thornton LLP.*
Consent of Piper & Marbury L.L.P. (included in the opinion filed as
23.2 Exhibit 5).*
24 Powers of Attorney.*
</TABLE>
- --------
* Previously filed.
** Previously filed as an exhibit to the Company's Registration Statement on
Form S-1 (Reg. No. 333-50103) and incorporated herein by reference.
*** Previously filed as an exhibit to the Company's Quarterly Report on Form
10-Q for the quarterly period ended September 30, 1998 and incorporated
herein by reference.
+ Filed herewith.
++ Previously filed. A portion of this exhibit has been omitted based upon a
request for confidential treatment.
(b) Financial Statement Schedules:
None.
Item 17. Undertakings.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 (the "Securities Act") may be permitted to directors, officers and
controlling persons of the Registrant pursuant to the provisions of its Charter
or Bylaws or laws of the State of Maryland or otherwise, the Registrant has
been advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by
such director, officer or controlling person in connection with the securities
being registered, the Registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act and will be governed
by the final adjudication of such issue.
II-3
<PAGE>
The undersigned registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act,
the information omitted from the form of prospectus filed as part of this
registration in reliance upon Rule 430A and contained in a form of
prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or
497(h) under the Securities Act shall be deemed to be part of this
registration statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities
Act, each post-effective amendment that contains a form of prospectus shall
be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this amendment no. 3 to the registration statement to be signed
on its behalf by the undersigned, thereunto duly authorized, in the City of
Baltimore, State of Maryland, on March 18, 1999.
Creditrust Corporation
By: /s/ Joseph K. Rensin
-------------------------------
Joseph K. Rensin Chairman of the
Board and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this amendment
no. 3 to the registration statement has been signed by the following persons in
the capacities indicated on this 18th day of March, 1999.
Signature Title Date
/s/ Joseph K. Rensin Chairman of the
- ------------------------------------- Board and Chief March 18, 1999
Joseph K. Rensin Executive Officer
(Principal
Executive Officer)
/s/ Richard J. Palmer Vice President,
- ------------------------------------- Chief Financial March 18, 1999
Richard J. Palmer Officer and
Treasurer
(Principal
Financial and
Accounting Officer)
* Director
- ------------------------------------- March 18, 1999
Frederick W. Glassberg
* Director
- ------------------------------------- March 18, 1999
John G. Moran
* Director
- ------------------------------------- March 18, 1999
Michael S. Witlin
* By: /s/ Joseph K. Rensin
---------------------------------
Joseph K. Rensin
Attorney in fact
II-5
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
No Description Page
------- ----------- ----
<C> <S> <C>
1.1 Form of Underwriting Agreement.*
3.1 Charter of the Company.**
3.2 By-Laws of the Company.**
4.1 Form of stock certificate.**
4.2 Form of Senior Subordinated Note, Series 1998.**
4.3 Form of Common Stock Purchase Warrant.**
4.4 Senior Subordinated Note Series and Common Stock Warrant
Purchase Agreement.**
4.5 Registration Rights Agreement.**
5 Opinion of Piper & Marbury L.L.P.*
10.1 Creditrust 1998 Stock Incentive Plan.**
10.2 Creditrust 1998 Employee Stock Purchase Plan.**
10.3 Employment Agreement between the Company and Jefferson B.
Moore.**
10.4 Employment Agreement between the Company and Richard J.
Palmer.**
10.5 Employment Agreement between the Company and John D. Frey.*
10.6 Employment Agreement between the Company and John L. Davis.**
10.7 Agreement dated March 13, 1997 by and between Crystal Hill
Advisors and the Company.**
10.8 Servicing Agreement, dated August 6, 1997, by and between
Creditrust Corporation and Heartland Bank.**
10.9 Loan and Security Agreement, dated September 23, 1996, by and
between Oxford Capital Corporation and Signet Bank.**
10.10 Lease Agreement, dated January 24, 1996, by and between BRIT
Limited Partnership and Oxford Capital Corporation.**
10.11 Lease Agreement, dated January 22, 1997, by and between A&E
Partners and Creditrust Corporation.**
10.12 First Amendment to Lease, dated February 27, 1997, by and
between A&E Partners and Creditrust Corporation.**
10.13(a) Indenture and Servicing Agreement, dated as of June 1, 1998,
by and among Creditrust SPV2, LLC, Norwest Bank Minnesota,
National Association, Creditrust Corporation and Asset
Guaranty Insurance Company.**
10.13(b) Amendment No. 1 to Indenture and Servicing Agreement, dated as
of February 16, 1999, by and among Creditrust SPV2, LLC, as
issuer, Norwest Bank Minnesota, National Association, as
trustee, and as backup servicer, Creditrust Corporation, as
servicer, and Asset Guaranty Insurance Company, as note
insurer.+
10.14 Limited Liability Company Agreement of Creditrust SPV2, LLC,
dated June 19, 1998.**
10.15(a) Indenture and Servicing Agreement, dated as of September 1,
1998, by and among Creditrust Funding I LLC, Norwest Bank
Minnesota, National Association, Creditrust Corporation and
Asset Guaranty Insurance Company.***
10.15(b) Amendment No. 1 to Indenture and Servicing Agreement, dated as
of February 16, 1999, by and among Creditrust Funding I LLC,
as issuer, Norwest Bank Minnesota, National Association, as
trustee, and as backup servicer, Creditrust Corporation, as
servicer, and Asset Guaranty Insurance Company, as note
insurer.+
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Exhibit
No Description Page
------- ----------- ----
<S> <C> <C>
10.15(c) Amendment No. 2 to Indenture and Servicing Agreement, dated as
of March 15, 1999, by and among Creditrust Funding I LLC, as
issuer, Norwest Bank Minnesota, National Association, as
trustee, and as backup servicer, Creditrust Corporation, as
servicer, and Asset Guaranty Insurance Company, as note
insurer.+
10.16(a) Credit Agreement, dated as of October 28, 1998, between
Creditrust Corporation, the Lenders party thereto and Sunrock
Capital Corp.++
10.16(b) Amendment No. 1 to Credit Agreement dated as of February 1999
and effective as of October 28, 1998 by and among Creditrust
Corporation, as Borrower, and Sunrock Capital Corp., as
agent.+
10.17(a) Indenture and Servicing Agreement, dated as of December 29,
1998, by and among Creditrust SPV98-2, LLC, Norwest Bank
Minnesota, National Association, Creditrust Corporation and
Asset Guaranty Insurance Company.*
10.17(b) Amendment No. 1 to Indenture and Servicing Agreement, dated as
of February 16, 1999, by and among Creditrust SPV98-2, LLC,
as issuer, Norwest Bank Minnesota, National Association, as
trustee, and as backup servicer, Creditrust Corporation, as
servicer, and Asset Guaranty Insurance Company, as note
insurer.+
10.18 Limited Liability Company Agreement of Creditrust SPV98-2,
LLC, dated as of December 29, 1998.*
10.19 Lease, dated January 11, 1999, by and between Butera
Properties, LLC, as Landlord, and Creditrust Card Services
Corporation, as Tenant.*
21.1 List of Subsidiaries.*
23.1 Consent of Grant Thornton LLP.*
23.2 Consent of Piper & Marbury L.L.P. (included in the opinion
filed as Exhibit 5).*
24 Powers of Attorney.*
</TABLE>
- --------
* Previously filed.
** Previously filed as an exhibit to the Company's Registration Statement on
Form S-1 (Reg. No. 333-50103) and incorporated herein by reference.
*** Previously filed as an exhibit to the Company's Quarterly Report on Form
10-Q for the quarterly period ended September 30, 1998 and incorporated
herein by reference.
+ Filed herewith.
++ Previously filed. A portion of this exhibit has been omitted based upon a
request for confidential treatment.
<PAGE>
Exhibit 10.13(b)
AMENDMENT NO. 1
TO
INDENTURE AND SERVICING AGREEMENT
-------------
CREDITRUST SPV2, LLC,
as Issuer
and
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION,
as Trustee and Backup Servicer of the Receivables
and
CREDITRUST CORPORATION,
as Servicer of the Receivables
and
ASSET GUARANTY INSURANCE COMPANY
as Note Insurer
Dated as of February 16, 1999
-------------
CREDITRUST RECEIVABLES-BACKED NOTES, SERIES 1998-1
-------------------
<PAGE>
This Amendment No. 1 to Indenture and Servicing Agreement, dated as of
February 16, 1999 (this "Amendment No. 1"), is executed by and among Creditrust
SPV2, LLC, as issuer (the "Issuer"), Norwest Bank Minnesota, National
Association, as trustee (in such capacity, the "Trustee"), and as backup
servicer (in such capacity, the "Backup Servicer"), Creditrust Corporation, as
servicer (the "Servicer") and Asset Guaranty Insurance Company, as note insurer
(the "Note Insurer").
RECITALS
WHEREAS, the parties hereto have executed and delivered an Indenture and
Servicing Agreement (the "Indenture") dated as of June 1, 1998, by and among the
Issuer, the Trustee and Backup Servicer, the Servicer and the Note Insurer in
connection with the issuance and sale by the Issuer of the 6.43% Creditrust
Receivables-Backed Notes, Series 1998-1;
WHEREAS, the Servicer intends to make an underwritten public offer of
shares of its common stock, which may include certain shares of common stock of
Joseph K. Rensin, pursuant to an underwriting agreement among Servicer, Joseph
K. Rensin, and the underwriters named therein (the "1999 Offering");
WHEREAS, Section 8.01(l) of the Indenture provides, in part, that any
reduction of Mr. Rensin's personal investment in the Servicer below an amount
equal to 51% of the outstanding common stock of the Servicer constitutes a
Servicer Default, and since a Servicer Default would occur as a result of the
1999 Offering, the parties hereto have agreed to amend the Indenture; and,
WHEREAS, the parties hereto have obtained the consent (the "Consent") of
the Noteholders evidencing not less than 66 2/3% of the Voting Interests, and
the Trustee has furnished to the Rating Agency and the Placement Agent written
notification of the substance of this Amendment No. 1 and the Consent.
NOW, THEREFORE, in consideration of the mutual agreements herein contained,
each party agrees as follows for the benefit of the other parties and the
Noteholders to the extent provided herein:
ARTICLE I
DEFINITIONS; AMENDMENTS; TRUSTEE COVENANT
SECTION 1.1. Definitions. Any capitalized term used herein but not
defined herein shall have the meaning ascribed to it in the Indenture.
-1-
<PAGE>
SECTION 1.2. General Covenants of Servicer. (a) SECTION 7.07(b) of the
Indenture is hereby amended to read as follows:
"(b) Stockholders' Equity. Servicer shall not permit its
--------------------
stockholders' equity as required to be shown on its consolidated
financial statements in accordance with GAAP to be less than the
sum of (i) $20,000,000, plus (ii) 75% of the cumulative after-tax
consolidated net income of the Servicer for the period commencing
on October 1, 1998 and ending at the end of the Servicer's then
most recent fiscal quarter (treated for this purpose as a single
accounting period), plus (iii) 75% of the net proceeds received by
the Servicer from any issuance for cash of common or preferred
stock of Servicer. For purposes of this section, if net earnings
of the Servicer for any period shall be less than zero, the amount
calculated pursuant to clause (ii) above for such period shall be
zero."
(b) SECTION 7.07 of the Indenture is hereby amended by adding the following
provisions at the end of that Section:
"(n) Servicer shall not permit the ratio of the Debt of
Servicer to stockholders' equity of the Servicer as required to be
shown on its consolidated financial statements in accordance with
GAAP to be greater than 2.5 to 1, at the end of any fiscal quarter
of Servicer commencing with its fiscal quarter ending March 31, 1999.
In any measurement of Debt for purposes of this covenant, the amount
of the Debt shall be reduced by the amount of any reserves held by a
creditor, or held by a trustee or other fiduciary for the benefit of
such creditor, to secure the repayment of such Debt.
The term "Debt" as used in this Section 7.07(n), with respect to
----
Servicer means, at any date of determination and without duplication:
(i) obligations created, issued or incurred by Servicer for borrowed
money; (ii) obligations of Servicer to pay the deferred portion of
the purchase price of property or services, other than trade accounts
payable arising, and accrued expenses incurred, in the ordinary course
of business; (iii) obligations of Servicer as a lessee which are
capitalized in accordance with GAAP; and (iv) obligations of other
Persons of the type described in clauses (i), (ii) and (iii) of this
definition to the extent guaranteed by Servicer; the term "Debt"
excludes obligations created, issued or incurred by a subsidiary of
Servicer for borrowed money, whether or not such obligations are
required to be shown on the consolidated financial statements of
Servicer under GAAP, except to the extent that any such obligations
are created, issued, incurred or guaranteed by Servicer.
(o) Servicer shall not permit the ratio of Current Assets to
Current Liabilities to be less than 2 to 1, at the end of any fiscal
quarter of Servicer commencing with its fiscal quarter ending
March 31, 1999.
-2-
<PAGE>
The term "Current Assets" means the sum of the following, as
--------------
and to the extent required to be shown on the consolidated financial
statements of Servicer in accordance with GAAP: (i) all cash and
cash equivalents, plus (ii) other marketable securities valued at
fair market value.
The term "Current Liabilities" means all accounts payable and
-------------------
accrued expenses as and to the extent required to be shown on the
consolidated financial statements of Servicer in accordance with
GAAP."
SECTION 1.3. Servicer Default. SECTION 8.01(l) of the Indenture is hereby
amended to read as follows:
"(l) There occurs any reduction of Joseph K. Rensin's personal
investment in Servicer: (1) below an amount equal to 35% of the
outstanding common stock of Servicer; or (2) except for the sale of
up to 1,050,000 shares of common stock of Servicer on or before
May 15, 1999, as the result of sales of common stock of Servicer by
Joseph K. Rensin. For purposes of the preceding sentence, the
personal investment in Servicer by Joseph K. Rensin shall not be
deemed to have been reduced as the result of any transfers by
Joseph K. Rensin to family members, personal foundations, trusts,
partnerships, limited liability companies and the like for estate
planning purposes so long as Joseph K. Rensin retains the ability to
participate in decisions to vote and dispose of such common stock."
SECTION 1.4. Trustee Covenant. In accordance with Section 11.01(d) of the
Indenture, the Trustee hereby agrees and covenants to furnish, promptly after
the execution of this Amendment No. 1, written notification of the substance of
this Amendment No. 1 and the Consent to each of the Noteholders.
SECTION 1.5. Required Reserve Amount. Section 1 of the Indenture is
hereby amended by changing the definition of Required Reserve Amount to read in
its entirety as follows, effective on the date which is five (5) Business Days
after the 1999 Offering is closed. Not later than such effective date, the
Issuer will cause to be deposited with Trustee the amount necessary to increase
the amount on deposit in the Reserve Account to $1,300,000.
" 'Required Reserve Amount' means the amount required to be
------------------------
maintained on deposit in the Reserve Account for so long as the Notes
are outstanding. The amount is $1,300,000."
ARTICLE II
MISCELLANEOUS PROVISIONS
SECTION 2.1. Amendment. This Amendment No. 1 shall only be amended in the
same manner as the Indenture shall be amended.
-3-
<PAGE>
SECTION 2.2. Entire Agreement; Effect. This Amendment No.1, together with
the Transaction Documents, is intended by the parties to and does constitute the
entire agreement of the parties with respect to the transaction contemplated
hereunder. This Amendment No. 1 supersedes any and all prior understandings,
and it does not alter, amend or waive any of the terms or provisions of the
Indenture except for those terms or provisions expressly amended hereby.
SECTION 2.3. Governing Law. This Amendment No. 1 shall be governed by and
construed in accordance with the laws of the State of New York and the
obligations, rights and remedies of the parties under this Amendment No.1 shall
be determined in accordance with such laws, including Section 5-1401 of the
General Obligation Law of New York, but otherwise without regard to conflict of
laws provisions.
SECTION 2.4. Severability of Provisions; Counterparts. If any one or more
of the covenants, agreements, provisions or terms of this Amendment No. 1 shall
be for any reason whatsoever held invalid or unenforceable in any jurisdiction,
then such covenants, agreements, provisions or terms shall be deemed severable
from the remaining covenants, agreements, provisions or terms of this Amendment
No. 1 and shall in no way affect the validity or enforceability of the other
provisions of this Amendment No. 1 or the Notes, or the rights of the
Noteholders. This Amendment No. 1 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 2.5. Note Insurer. This Amendment No. 1 is not evidence of any
position by the Note Insurer, affirmative or negative, as to whether action by
the Noteholders, or any other party, is required in addition to the execution of
this Amendment No. 1 by the Note Insurer. No representation is made by the Note
Insurer as to the necessity for or the satisfaction of any additional action or
condition under the Indenture with respect to the amendment thereof. This
Amendment No. 1 does not modify the obligations of Note Insurer under the policy
as set forth therein.
SECTION 2.6. Effective Date. This Amendment No. 1 shall be of no force and
effect unless and until the 1999 Offering is closed.
-4-
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Amendment No. 1 to be duly
executed by their respective officers as of the day and year first above
written.
CREDITRUST SPV2, LLC,
as Issuer
By: /s/ Joseph K. Rensin
--------------------------------
Joseph K. Rensin
President
CREDITRUST CORPORATION,
as Servicer
By: /s/ Joseph K. Rensin
--------------------------------
Joseph K. Rensin
Chairman and
Chief Executive Officer
NORWEST BANK MINNESOTA, NATIONAL
ASSOCIATION, not in its individual capacity,
but solely as Trustee and as Backup Servicer
By: /s/ Bruce C. Wandersee
--------------------------------
Bruce C. Wandersee
Assistant Vice President
ASSET GUARANTY INSURANCE
COMPANY
By: /s/ Scott Mangan
--------------------------------
Scott Mangan
Vice President
-5-
<PAGE>
Exhibit 10.15(b)
AMENDMENT NO. 1
TO
INDENTURE AND SERVICING AGREEMENT
-------------
CREDITRUST FUNDING I LLC,
as Issuer
and
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION,
as Trustee and Backup Servicer of the Receivables
and
CREDITRUST CORPORATION,
as Servicer of the Receivables
and
ASSET GUARANTY INSURANCE COMPANY
as Note Insurer
Dated as of February 16, 1999
--------------
CREDITRUST WAREHOUSE NOTES, SERIES 1998-A
-------------------
<PAGE>
This Amendment No. 1 to Indenture and Servicing Agreement, dated as of
February 16, 1999 (this "Amendment No. 1"), is executed by and among Creditrust
Funding I LLC, as issuer (the "Issuer"), Norwest Bank Minnesota, National
Association, as trustee (in such capacity, the "Trustee"), and as backup
servicer (in such capacity, the "Backup Servicer"), Creditrust Corporation, as
servicer (the "Servicer") and Asset Guaranty Insurance Company, as note insurer
(the "Note Insurer").
RECITALS
WHEREAS, the parties hereto have executed and delivered an Indenture and
Servicing Agreement (the "Indenture") dated as of September 1, 1998, by and
among the Issuer, the Trustee and Backup Servicer, the Servicer and the Note
Insurer, relating to the Issuer's variable rate Creditrust Warehouse Notes,
Series 1998-A;
WHEREAS, the Servicer intends to make an underwritten public offer of
shares of its common stock, which may include certain shares of common stock of
Joseph K. Rensin, pursuant to an underwriting agreement among Servicer, Joseph
K. Rensin, and the underwriters named therein (the "1999 Offering");
WHEREAS, Section 8.01(k) of the Indenture provides, in part, that any
reduction of Mr. Rensin's personal investment in the Servicer below an amount
equal to 51% of the outstanding common stock of the Servicer constitutes a
Servicer Default, and since a Servicer Default would occur as a result of the
1999 Offering, the parties hereto have agreed to amend the Indenture; and,
WHEREAS, the parties hereto have obtained the consent (the "Consent") of
the Noteholders evidencing not less than 66 2/3% of the Voting Interests, and
the Trustee has furnished to the Rating Agency and the Placement Agent written
notification of the substance of this Amendment No. 1 and the Consent.
NOW, THEREFORE, in consideration of the mutual agreements herein contained,
each party agrees as follows for the benefit of the other parties and the
Noteholders to the extent provided herein:
ARTICLE I
DEFINITIONS; AMENDMENTS; TRUSTEE COVENANT
SECTION 1.1. Definitions. Any capitalized term used herein but not
defined herein shall have the meaning ascribed to it in the Indenture.
-1-
<PAGE>
SECTION 1.2. General Covenants of Servicer. (a) SECTION 7.07(b) of the
Indenture is hereby amended to read as follows:
"(b) Stockholders' Equity. Servicer shall not permit its
--------------------
stockholders' equity as required to be shown on its consolidated
financial statements in accordance with GAAP to be less than the
sum of (i) $20,000,000, plus (ii) 75% of the cumulative after-tax
consolidated net income of the Servicer for the period commencing
on October 1, 1998 and ending at the end of the Servicer's then
most recent fiscal quarter (treated for this purpose as a single
accounting period), plus (iii) 75% of the net proceeds received
by the Servicer from any issuance for cash of common or preferred
stock of Servicer. For purposes of this section, if net earnings
of the Servicer for any period shall be less than zero, the amount
calculated pursuant to clause (ii) above for such period shall be
zero."
(b) SECTION 7.07 of the Indenture is hereby amended by adding the following
provisions at the end of that Section:
"(o) Servicer shall not permit the ratio of the Debt of
Servicer to stockholders' equity of the Servicer as required to be
shown on its consolidated financial statements in accordance with
GAAP to be greater than 2.5 to 1, at the end of any fiscal quarter
of Servicer commencing with its fiscal quarter ending March 31,
1999. In any measurement of Debt for purposes of this covenant,
the amount of the Debt shall be reduced by the amount of any
reserves held by a creditor, or held by a trustee or other
fiduciary for the benefit of such creditor, to secure the repayment
of such Debt.
The term "Debt" as used in this Section 7.07(o), with respect to
----
Servicer means, at any date of determination and without duplication:
(i) obligations created, issued or incurred by Servicer for borrowed
money; (ii) obligations of Servicer to pay the deferred portion of
the purchase price of property or services, other than trade accounts
payable arising, and accrued expenses incurred, in the ordinary
course of business; (iii) obligations of Servicer as a lessee which
are capitalized in accordance with GAAP; and (iv) obligations of
other Persons of the type described in clauses (i), (ii) and (iii)
of this definition to the extent guaranteed by Servicer; the term
"Debt" excludes obligations created, issued or incurred by a
subsidiary of Servicer for borrowed money, whether or not such
obligations are required to be shown on the consolidated financial
statements of Servicer under GAAP, except to the extent that any such
obligations are created, issued, incurred or guaranteed by Servicer.
(p) Servicer shall not permit the ratio of Current Assets to
Current Liabilities to be less than 2 to 1, at the end of any fiscal
quarter of Servicer commencing with its fiscal quarter ending
March 31, 1999.
-2-
<PAGE>
The term "Current Assets" means the sum of the following, as
--------------
and to the extent required to be shown on the consolidated financial
statements of Servicer in accordance with GAAP: (i) all cash and
cash equivalents, plus (ii) other marketable securities valued at
fair market value.
The term "Current Liabilities" means all accounts payable and
-------------------
accrued expenses as and to the extent required to be shown on the
consolidated financial statements of Servicer in accordance with
GAAP."
SECTION 1.3. Servicer Default. SECTION 8.01(k) of the Indenture is hereby
amended to read as follows:
"(k) There occurs any reduction of Joseph K. Rensin's personal
investment in Servicer below an amount equal to 35% of the outstanding
common stock of Servicer, or such lesser amount as may be acceptable
to the Controlling Party;"
SECTION 1.4. Trustee Covenant. In accordance with Section 11.01(d) of the
Indenture, the Trustee hereby agrees and covenants to furnish, promptly after
the execution of this Amendment No. 1, written notification of the substance of
this Amendment No. 1 and the Consent to each of the Noteholders.
ARTICLE II
MISCELLANEOUS PROVISIONS
SECTION 2.1. Amendment. This Amendment No. 1 shall only be amended in the
same manner as the Indenture shall be amended.
SECTION 2.2. Entire Agreement; Effect. This Amendment No.1, together with
the Transaction Documents, is intended by the parties to and does constitute the
entire agreement of the parties with respect to the transaction contemplated
hereunder. This Amendment No. 1 supersedes any and all prior understandings,
and it does not alter, amend or waive any of the terms or provisions of the
Indenture except for those terms or provisions expressly amended hereby.
SECTION 2.3. Governing Law. This Amendment No. 1 shall be governed by and
construed in accordance with the laws of the State of New York and the
obligations, rights and remedies of the parties under this Amendment No.1 shall
be determined in accordance with such laws, including Section 5-1401 of the
General Obligation Law of New York, but otherwise without regard to conflict of
laws provisions.
SECTION 2.4. Severability of Provisions; Counterparts. If any one or more
of the covenants, agreements, provisions or terms of this Amendment No. 1 shall
be for any reason whatsoever held invalid or unenforceable in any jurisdiction,
then such covenants, agreements, provisions or terms shall be deemed severable
from the remaining covenants, agreements, provisions or terms of this Amendment
No. 1 and shall in no way affect the validity or enforceability of the other
provisions of this Amendment No. 1 or the Notes, or the rights of the
Noteholders. This Amendment No. 1 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.
-3-
<PAGE>
SECTION 2.5. Note Insurer. This Amendment No. 1 is not evidence of any
position by the Note Insurer, affirmative or negative, as to whether action by
the Noteholders, or any other party, is required in addition to the execution of
this Amendment No. 1 by the Note Insurer. No representation is made by the Note
Insurer as to the necessity for or the satisfaction of any additional action or
condition under the Indenture with respect to the amendment thereof. This
Amendment No. 1 does not modify the obligations of Note Insurer under the Policy
as set forth therein.
SECTION 2.6. Effective Date. This Amendment No. 1 shall be of no force and
effect unless and until the 1999 Offering is closed.
-4-
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Amendment No. 1 to be duly
executed by their respective officers as of the day and year first above
written.
CREDITRUST FUNDING I LLC,
as Issuer
By: /s/ Joseph K. Rensin
--------------------------------
Joseph K. Rensin
President
CREDITRUST CORPORATION,
as Servicer
By: /s/ Joseph K. Rensin
--------------------------------
Joseph K. Rensin
Chairman and
Chief Executive Officer
NORWEST BANK MINNESOTA, NATIONAL
ASSOCIATION, not in its individual capacity,
but solely as Trustee and as Backup Servicer
By: /s/ Bruce C. Wandersee
--------------------------------
Bruce C. Wandersee
Assistant Vice President
ASSET GUARANTY INSURANCE
COMPANY
By: /s/ Scott Mangan
--------------------------------
Scott Mangan
Vice President
-5-
<PAGE>
Exhibit 10.15(c)
AMENDMENT NO. 2
TO
INDENTURE AND SERVICING AGREEMENT
-------------
CREDITRUST FUNDING I LLC,
as Issuer
and
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION,
as Trustee and Backup Servicer of the Receivables
and
CREDITRUST CORPORATION,
as Servicer of the Receivables
and
ASSET GUARANTY INSURANCE COMPANY
as Note Insurer
Dated as of March 15, 1999
-------------
CREDITRUST WAREHOUSE NOTES, SERIES 1998-A
-------------------
<PAGE>
This Amendment No. 2 to Indenture and Servicing Agreement, dated as of
March 15, 1999 (this "Amendment No. 2"), is executed by and among Creditrust
Funding I LLC, as issuer (the "Issuer"), Norwest Bank Minnesota, National
Association, as trustee (in such capacity, the "Trustee"), and as backup
servicer (in such capacity, the "Backup Servicer"), Creditrust Corporation, as
servicer (the "Servicer") and Asset Guaranty Insurance Company, as note insurer
(the "Note Insurer").
RECITALS
WHEREAS, the parties hereto have executed and delivered an Indenture and
Servicing Agreement dated as of September 1, 1998, by and among the Issuer, the
Trustee and Backup Servicer, the Servicer and the Note Insurer, as amended by
Amendment No. 1 to Indenture and Servicing Agreement dated as of February 16,
1999, by and among the Issuer, the Trustee and Backup Servicer, the Servicer and
the Note Insurer (collectively, the "Indenture"), relating to the Issuer's
variable rate Creditrust Warehouse Notes, Series 1998-A;
WHEREAS, the Issuer desires to increase the aggregate Funding Amounts
available to it within a specified time under the Indenture, and the parties
hereto have agreed to amend the Indenture to increase such aggregate Funding
Amounts; and,
WHEREAS, the parties hereto have obtained the consent (the "Consent") of
the Noteholders evidencing not less than 66 2/3% of the Voting Interests, and
the Trustee has furnished to the Rating Agency and the Placement Agent written
notification of the substance of this Amendment No. 2 and the Consent.
NOW, THEREFORE, in consideration of the mutual agreements herein contained,
each party agrees as follows for the benefit of the other parties and the
Noteholders to the extent provided herein:
ARTICLE I
DEFINITIONS; AMENDMENT; TRUSTEE COVENANT
SECTION 1.1. Definitions. Any capitalized term used herein but not
defined herein shall have the meaning ascribed to it in the Indenture.
SECTION 1.2. Conditions Precedent to Each Funding. SECTION 5.10(c) of the
Indenture is hereby amended to read as follows:
"(c) The Funding Amount shall not be less than the Funding Date
Minimum Amount. After giving effect to such Funding, the Note Balance
shall not exceed the Maximum Facility Amount, and the aggregate Funding
Amounts loaned in the month in which the Funding Date occurs (other
than the month in which the first Funding Date occurs) shall not exceed
$10,000,000."
<PAGE>
SECTION 1.3. Trustee Covenant. In accordance with Section 11.01(d) of the
Indenture, the Trustee hereby agrees and covenants to furnish, promptly after
the execution of this Amendment No. 2, written notification of the substance of
this Amendment No. 2 and the Consent to each of the Noteholders.
ARTICLE II
MISCELLANEOUS PROVISIONS
SECTION 2.1. Amendment. This Amendment No. 2 shall only be amended in the
same manner as the Indenture shall be amended.
SECTION 2.2. Entire Agreement; Effect. This Amendment No. 2, together
with the Transaction Documents, is intended by the parties to and does
constitute the entire agreement of the parties with respect to the transaction
contemplated hereunder. This Amendment No. 2 supersedes any and all prior
understandings, and it does not alter, amend or waive any of the terms or
provisions of the Indenture except for those terms or provisions expressly
amended hereby.
SECTION 2.3. Governing Law. This Amendment No. 2 shall be governed by and
construed in accordance with the laws of the State of New York and the
obligations, rights and remedies of the parties under this Amendment No. 2 shall
be determined in accordance with such laws, including Section 5-1401 of the
General Obligation Law of New York, but otherwise without regard to conflict of
laws provisions.
SECTION 2.4. Severability of Provisions; Counterparts. If any one or more
of the covenants, agreements, provisions or terms of this Amendment No. 2 shall
be for any reason whatsoever held invalid or unenforceable in any jurisdiction,
then such covenants, agreements, provisions or terms shall be deemed severable
from the remaining covenants, agreements, provisions or terms of this Amendment
No. 2 and shall in no way affect the validity or enforceability of the other
provisions of this Amendment No. 2 or the Notes, or the rights of the
Noteholders. This Amendment No. 2 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 2.5. Note Insurer. This Amendment No. 2 is not evidence of any
position by the Note Insurer, affirmative or negative, as to whether action by
the Noteholders, or any other party, is required in addition to the execution of
this Amendment No. 2 by the Note Insurer. No representation is made by the Note
Insurer as to the necessity for or the satisfaction of any additional action or
condition under the Indenture with respect to the amendment thereof. This
Amendment No. 2 does not modify the obligations of Note Insurer under the Policy
as set forth therein.
-2-
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Amendment No. 2 to be duly
executed by their respective officers as of the day and year first above
written.
CREDITRUST FUNDING I LLC,
as Issuer
By: /s/ Joseph K. Rensin
-------------------------------
Joseph K. Rensin
President
CREDITRUST CORPORATION,
as Servicer
By: /s/ Joseph K. Rensin
-------------------------------
Joseph K. Rensin
Chairman and
Chief Executive Officer
NORWEST BANK MINNESOTA, NATIONAL
ASSOCIATION, not in its individual capacity,
but solely as Trustee and as Backup Servicer
By: /s/ Bruce c. Wandersee
-------------------------------
Bruce C. Wandersee
Assistant Vice President
ASSET GUARANTY INSURANCE
COMPANY
By: /s/ Scott Mangan
-------------------------------
Scott Mangan
Vice President
-3-
<PAGE>
Exhibit 10.16(b)
AMENDMENT NO. 1
This Amendment No. 1 to Credit Agreement, dated as of February __, 1999
(this "Amendment No. 1"), is executed by and among Creditrust Corporation, as
Borrower (the "Borrower") and Sunrock Capital Corp., as agent ("Agent") and is
effective as of October 28, 1998.
RECITAL
WHEREAS, the parties hereto have executed and delivered a Credit
Agreement (the "Agreement") dated as of October 28, 1998, and desire to amend a
provision of that Agreement to be effective as of the date of the Agreement;
NOW, THEREFORE, in consideration of the mutual agreements herein
contained, each party agrees as follows:
ARTICLE 1
DEFINITIONS; AMENDMENT
SECTION 1.1. Definitions. Any capitalized term used herein but not
defined herein shall have the meaning ascribed to it in the Agreement.
SECTION 1.2. Amendment. The definition of "Debt" is hereby amended by
adding at the end of such definition the following phrase:
", and excluding any Securitized Offering of a Special Purpose
Entity."
ARTICLE II
MISCELLANEOUS PROVISIONS
SECTION 2.1. Effect. This Amendment No. 1 does not alter, amend or waive
any of the terms or provisions of the Agreement except as expressly set forth
herein.
SECTION 2.2. Governing Law. This Amendment No. 1 shall be governed by
and construed in accordance with the laws of the Commonwealth of Pennsylvania.
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Amendment No. 1 to be
duly executed by their respective officers as of the day and year first above
written to be effective as of October 28, 1998.
CREDITRUST CORPORATION,
as Borrower
By: /s/ Joseph K. Rensin
--------------------------------
Joseph K. Rensin
Chairman and
Chief Executive Officer
SUNROCK CAPITAL CORP.
By: /s/ Walter Erdmore
--------------------------------
Name: Walter Erdmore
Title: President and CEO
- 2 -
<PAGE>
Exhibit 10.17(b)
AMENDMENT NO. 1
TO
INDENTURE AND SERVICING AGREEMENT
-------------
CREDITRUST SPV98-2, LLC,
as Issuer
and
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION,
as Trustee and Backup Servicer of the Receivables
and
CREDITRUST CORPORATION,
as Servicer of the Receivables
and
ASSET GUARANTY INSURANCE COMPANY
as Note Insurer
Dated as of February 16, 1999
-------------
CREDITRUST RECEIVABLES-BACKED NOTES, SERIES 1998-2
-------------------
<PAGE>
This Amendment No. 1 to Indenture and Servicing Agreement, dated as of
February 16, 1999 (this "Amendment No. 1"), is executed by and among Creditrust
SPV98-2, LLC, as issuer (the "Issuer"), Norwest Bank Minnesota, National
Association, as trustee (in such capacity, the "Trustee"), and as backup
servicer (in such capacity, the "Backup Servicer"), Creditrust Corporation, as
servicer (the "Servicer") and Asset Guaranty Insurance Company, as note insurer
(the "Note Insurer").
RECITALS
WHEREAS, the parties hereto have executed and delivered an Indenture and
Servicing Agreement (the "Indenture") dated as of December 1, 1998, by and among
the Issuer, the Trustee and Backup Servicer, the Servicer and the Note Insurer
in connection with the issuance and sale by the Issuer of the 8.61% Creditrust
Receivables-Backed Notes, Series 1998-2;
WHEREAS, the Servicer intends to make an underwritten public offer of
shares of its common stock, which may include certain shares of common stock of
Joseph K. Rensin, pursuant to an underwriting agreement among Servicer, Joseph
K. Rensin, and the underwriters named therein (the "1999 Offering");
WHEREAS, Section 8.01(l) of the Indenture provides, in part, that any
reduction of Mr. Rensin's personal investment in the Servicer below an amount
equal to 51% of the outstanding common stock of the Servicer constitutes a
Servicer Default, and since a Servicer Default would occur as a result of the
1999 Offering, the parties hereto have agreed to amend the Indenture; and,
WHEREAS, the parties hereto have obtained the consent (the "Consent") of
the Noteholders evidencing not less than 66 2/3% of the Voting Interests, and
the Trustee has furnished to the Rating Agency and the Placement Agent written
notification of the substance of this Amendment No. 1 and the Consent.
NOW, THEREFORE, in consideration of the mutual agreements herein contained,
each party agrees as follows for the benefit of the other parties and the
Noteholders to the extent provided herein:
ARTICLE I
DEFINITIONS; AMENDMENTS; TRUSTEE COVENANT
SECTION 1.1. Definitions. Any capitalized term used herein but not
defined herein shall have the meaning ascribed to it in the Indenture.
-1-
<PAGE>
SECTION 1.2. General Covenants of Servicer. (a) SECTION 7.07(b) of the
Indenture is hereby amended to read as follows:
"(b) Stockholders' Equity. Servicer shall not permit its
--------------------
stockholders' equity as required to be shown on its consolidated
financial statements in accordance with GAAP to be less than the
sum of (i) $20,000,000, plus (ii) 75% of the cumulative after-tax
consolidated net ending at the end of the Servicer's then most
recent fiscal quarter (treated for this purpose as a single
accounting period), plus (iii) 75% of the net proceeds received
by the Servicer from any issuance for cash of common or preferred
stock of Servicer. For purposes of this section, if net earnings
of the Servicer for any period shall be less than zero, the
amount calculated pursuant to clause (ii) above for such period
shall be zero."
(b) SECTION 7.07 of the Indenture is hereby amended by adding the following
provisions at the end of that Section:
"(o) Servicer shall not permit the ratio of the Debt of
Servicer to stockholders' equity of the Servicer as required to
be shown on its consolidated financial statements in accordance
with GAAP to be greater than 2.5 to 1, at the end of any fiscal
quarter of Servicer commencing with its fiscal quarter ending
March 31, 1999. In any measurement of Debt for purposes of this
covenant, the amount of the Debt shall be reduced by the amount
of any reserves held by a creditor, or held by a trustee or other
fiduciary for the benefit of such creditor, to secure the repayment
of such Debt.
The term "Debt" as used in this Section 7.07(o), with respect
----
to Servicer means, at any date of determination and without
duplication: (i) obligations created, issued or incurred by Servicer
for borrowed money; (ii) obligations of Servicer to pay the deferred
portion of the purchase price of property or services, other than
trade accounts payable arising, and accrued expenses incurred, in
the ordinary course of business; (iii) obligations of Servicer as
a lessee which are capitalized in accordance with GAAP; and
(iv) obligations of other Persons of the type described in
clauses (i), (ii) and (iii) of this definition to the extent
guaranteed by Servicer; the term "Debt" excludes obligations created,
issued or incurred by a subsidiary of Servicer for borrowed money,
whether or not such obligations are required to be shown on the
consolidated financial statements of Servicer under GAAP, except
to the extent that any such obligations are created, issued,
incurred or guaranteed by Servicer.
(p) Servicer shall not permit the ratio of Current Assets to
Current Liabilities to be less than 2 to 1, at the end of any fiscal
quarter of Servicer commencing with its fiscal quarter ending
March 31, 1999.
-2-
<PAGE>
The term "Current Assets" means the sum of the following, as
--------------
and to the extent required to be shown on the consolidated financial
statements of Servicer in accordance with GAAP: (i) all cash and
cash equivalents, plus (ii) other marketable securities valued at
fair market value.
The term "Current Liabilities" means all accounts payable and
-------------------
accrued expenses as and to the extent required to be shown on the
consolidated financial statements of Servicer in accordance
with GAAP."
SECTION 1.3. Servicer Default. SECTION 8.01(l) of the Indenture is hereby
amended to read as follows:
"(l) There occurs any reduction of Joseph K. Rensin's personal
investment in Servicer: (1) below an amount equal to 35% of the
outstanding common stock of Servicer; or (2) except for the sale of
up to 1,050,000 shares of common stock of Servicer on or before
May 15, 1999, as the result of sales of common stock of Servicer by
Joseph K. Rensin. For purposes of the preceding sentence, the
personal investment in Servicer by Joseph K. Rensin shall not be
deemed to have been reduced as the result of any transfers by
Joseph K. Rensin to family members, personal foundations, trusts,
partnerships, limited liability companies and the like for estate
planning purposes so long as Joseph K. Rensin retains the ability to
participate in decisions to vote and dispose of such common stock."
SECTION 1.4. Trustee Covenant. In accordance with Section 11.01(d) of the
Indenture, the Trustee hereby agrees and covenants to furnish, promptly after
the execution of this Amendment No. 1, written notification of the substance of
this Amendment No. 1 and the Consent to each of the Noteholders.
SECTION 1.5. Required Reserve Amount. Section 1 of the Indenture is
hereby amended by changing the definition of Required Reserve Amount to read in
its entirety as follows, effective on the date which is five (5) Business Days
after the 1999 Offering is closed. Not later than such effective date, the
Issuer will cause to be deposited with Trustee the amount necessary to increase
the amount on deposit in the Reserve Account to $3,250,000.
" 'Required Reserve Amount' means the amount required to be
------------------------
maintained on deposit in the Reserve Account for so long as the Notes
are outstanding. The amount is $3,250,000."
ARTICLE II
MISCELLANEOUS PROVISIONS
SECTION 2.1. Amendment. This Amendment No. 1 shall only be amended in the
same manner as the Indenture shall be amended.
-3-
<PAGE>
SECTION 2.2. Entire Agreement; Effect. This Amendment No.1, together with
the Transaction Documents, is intended by the parties to and does constitute the
entire agreement of the parties with respect to the transaction contemplated
hereunder. This Amendment No. 1 supersedes any and all prior understandings,
and it does not alter, amend or waive any of the terms or provisions of the
Indenture except for those terms or provisions expressly amended hereby.
SECTION 2.3. Governing Law. This Amendment No. 1 shall be governed by and
construed in accordance with the laws of the State of New York and the
obligations, rights and remedies of the parties under this Amendment No.1 shall
be determined in accordance with such laws, including Section 5-1401 of the
General Obligation Law of New York, but otherwise without regard to conflict of
laws provisions.
SECTION 2.4. Severability of Provisions; Counterparts. If any one or more
of the covenants, agreements, provisions or terms of this Amendment No. 1 shall
be for any reason whatsoever held invalid or unenforceable in any jurisdiction,
then such covenants, agreements, provisions or terms shall be deemed severable
from the remaining covenants, agreements, provisions or terms of this Amendment
No. 1 and shall in no way affect the validity or enforceability of the other
provisions of this Amendment No. 1 or the Notes, or the rights of the
Noteholders. This Amendment No. 1 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 2.5. Note Insurer. This Amendment No. 1 is not evidence of any
position by the Note Insurer, affirmative or negative, as to whether action by
the Noteholders, or any other party, is required in addition to the execution of
this Amendment No. 1 by the Note Insurer. No representation is made by the Note
Insurer as to the necessity for or the satisfaction of any additional action or
condition under the Indenture with respect to the amendment thereof. This
Amendment No. 1 does not modify the obligations of Note Insurer under the Policy
as set forth therein.
SECTION 2.6. Effective Date. This Amendment No. 1 shall be of no force and
effect unless and until the 1999 Offering is closed.
-4-
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Amendment No. 1 to be duly
executed by their respective officers as of the day and year first above
written.
CREDITRUST SPV98-2, LLC,
as Issuer
By: /s/ Joseph K. Rensin
-------------------------------
Joseph K. Rensin
President
CREDITRUST CORPORATION,
as Servicer
By: /s/ Joseph K. Rensin
-------------------------------
Joseph K. Rensin
Chairman and
Chief Executive Officer
NORWEST BANK MINNESOTA, NATIONAL
ASSOCIATION, not in its individual capacity,
but solely as Trustee and as Backup Servicer
By: /s/ Bruce C. Wandersee
-------------------------------
Bruce C. Wandersee
Assistant Vice President
ASSET GUARANTY INSURANCE
COMPANY
By: /s/ Scott Mangan
-------------------------------
Scott Mangan
Vice President
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