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EXHIBIT 4.2
_________________________________________________________________
FREMONT FUNDING INC.,
Transferor,
FREMONT FINANCIAL CORPORATION,
Servicer,
and
LASALLE NATIONAL BANK,
Trustee
on behalf of the Certificateholders
____________________________
SERIES D SUPPLEMENT
Dated as of April 1, 1997
to
FREMONT SMALL BUSINESS LOAN MASTER TRUST
AMENDED AND RESTATED POOLING AND SERVICING AGREEMENT
Dated as of April 1, 1997
VARIABLE RATE ASSET BACKED CERTIFICATES, SERIES D
$100,000,000 CLASS A CERTIFICATES
$9,260,000 CLASS B CERTIFICATES
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SERIES D SUPPLEMENT, dated as of April 1, 1997 (this "Supplement")
among FREMONT FUNDING INC., a Delaware corporation, as transferor (the
"Transferor"), FREMONT FINANCIAL CORPORATION, a California corporation, as
servicer (the "Servicer"), and LASALLE NATIONAL BANK, a national banking
association, as trustee (together with its successors in trust thereunder as
provided in the Amended and Restated Pooling and Servicing Agreement referred
to below, the "Trustee"), under the Amended and Restated Pooling and Servicing
Agreement, dated as of April 1, 1997 (as amended and supplemented from time to
time, the "Agreement"), among the Transferor, the Servicer and the Trustee.
PRELIMINARY STATEMENT
Section 6.09 of the Agreement provides, among other things, that the
Transferor and the Trustee may at any time and from time to time enter into a
supplement to the Agreement for the purpose of authorizing the issuance of one
or more Series of Certificates. The Transferor has delivered the Issuance
Notice required by Section 6.09 of the Agreement and hereby enters into this
Supplement with the Servicer and the Trustee as required by Section 6.09(b) of
the Agreement to provide for the issuance, authentication and delivery of the
Class A and Class B Series D Certificates. In the event that any term or
provision contained herein shall conflict with or be inconsistent with any term
or provision contained in the Agreement, the terms and provisions of this
Supplement shall govern to the extent of such conflict.
All capitalized terms not otherwise defined herein shall have the
meanings given in the Agreement. All Article, Section or Subsection references
herein shall mean Article, Section or Subsections of the Agreement, except as
otherwise provided herein.
Any reference to the Amortization Period or the Non-Amortization
Period in this Supplement shall refer only to such periods as they relate to
the Series D Certificates, unless otherwise specified. References in this
Supplement to any "Class" or "Classes" shall refer only to the Class A Series D
Certificates and/or the Class B Series D Certificates, as appropriate.
SECTION 1. Designations.
(a) The Series D Certificates shall be designated
generally as the "Variable Rate Asset Backed Certificates, Series D"
or the "Series D Certificates" and shall be issued in two Classes, the
"Class A Certificates" and the "Class B Certificates."
(b) The Series D Certificates shall be pari pasu with
each other Senior Series issued by the Trust; however neither the
Class A Certificates nor the Class B Certificates shall be a "Senior
Series" with respect to the Series 1995-1 Certificates.
SECTION 2. Initial Invested Amounts.
The Initial Series D Invested Amount shall be $109,260,000. The
Initial Class A Invested Amount shall be $100,000,000 and the Initial Class B
Invested Amount shall be $9,260,000.
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SECTION 3. Certificate Rates.
The interest rate for the Class A Certificates ("Class A Certificate
Rate") shall initially be equal to a per annum rate equal to LIBOR, determined
as of April 10, 1997, plus 0.23% and thereafter the Class A Certificate Rate
shall be a variable per annum rate equal to the lesser of (i) LIBOR plus 0.23%
or (ii) the Weighted Average Coupon. Interest on the Class A Certificates
shall be calculated monthly on the basis of a rate equal to the Class A
Certificate Rate multiplied by a fraction, the numerator of which is equal to
actual number of days in the related Interest Accrual Period and the
denominator of which is equal to 360 (the "Class A Monthly Certificate Rate").
The interest rate for the Class B Certificates ("Class B Certificate
Rate") shall initially be equal to a per annum rate equal to LIBOR, determined
as of April 10, 1997, plus 0.75% and thereafter the Class B Certificate Rate
shall be a variable per annum rate equal to the lesser of (i) LIBOR plus 0.75%
or (ii) the Weighted Average Coupon. Interest on the Class B Certificates
shall be calculated monthly on the basis of a rate equal to the Class B
Certificate Rate multiplied by a fraction, the numerator of which is equal to
actual number of days in the related Interest Accrual Period and the
denominator of which is equal to 360 (the "Class B Monthly Certificate Rate").
Interest on each Class of Series D Certificates shall accrue at the
initial Class A Certificate Rate or the Class B Certificate Rate, as
applicable, during the initial Interest Accrual Period (the period starting the
Closing Date and ending on May 14, 1997) and shall accrue at the applicable
Certificate Rate as determined for each Class on the related LIBOR
Determination Date (or, with respect to the determination of the Weighted
Average Coupon, the related Determination Date) for each succeeding Interest
Accrual Period.
"LIBOR" for each Interest Accrual Period shall be established by the
Trustee as follows:
(i) On each LIBOR Determination Date, the Trustee shall
determine LIBOR for the next succeeding Interest Accrual Period which
shall be equal to the rate for deposits in U.S. Dollars for a period
of one month which appears on Telerate Page 3750 as of 11:00 a.m.,
London Time, on such LIBOR Determination Date. If such rate does not
appear on Telerate Page 3750, the rate for that day will be determined
on the basis of the rates at which deposits in U.S. Dollars are
offered by the Reference Banks at approximately 11:00 a.m., London
Time, on the LIBOR Determination Date to prime banks in the London
interbank market for a period of one month commencing on the first day
of such Interest Accrual Period. The Trustee will request the
principal London office of each of the Reference Banks to provide a
quotation of its rate. If at least two such quotations are provided,
the rate for that day will be the arithmetic mean of the quotations.
If fewer than two quotations are provided as requested, the rate for
that day will be the arithmetic mean of the rates quoted by major
banks in New York City, selected by the Servicer, at approximately
11:00 a.m., New York City time, on that date for loans in U.S.
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Dollars to leading European banks for a period of one month commencing
on the first day of such Interest Accrual Period.
(ii) If necessary, on each LIBOR Determination Date, the
Servicer shall designate the banks that shall act as the Reference
Banks for the succeeding Interest Accrual Period and shall notify the
Trustee on such LIBOR Determination Date. The Trustee may
conclusively rely and shall be protected in relying upon the offered
quotations (whether electronic, written or oral) of the selected
Reference Banks.
(iii) If the banks in New York City selected by the
Servicer in accordance with the last sentence of clause (i) above are
not providing the necessary quotations, LIBOR for such LIBOR
Determination Date will be LIBOR as determined on the previous LIBOR
Determination Date.
The Trustee will determine the Weighted Average Coupon for any
Settlement Period by the Determination Date for such Settlement Period.
The establishment of LIBOR or Weighted Average Coupon, as applicable,
and the subsequent calculation of the interest rate for each Interest Accrual
Period by the Trustee, in the absence of manifest error, will be final and
binding. With respect to the calculation of LIBOR, any calculation of an
arithmetic mean shall be rounded up as necessary to the nearest multiple of
0.0625% per annum. The Trustee shall make the interest rates applicable to the
then current and the immediately preceding Interest Accrual Periods available
by telephone at its Corporate Trust Office.
SECTION 4. Deposits to and Withdrawals From Collection Account; Payments
to Series D Certificateholders.
(a) Deposits. (i) During the Non-Amortization Period,
deposits shall be made to the Collection Account and allocated to the
Series D Certificates in accordance with Section 4.03(b)(I) of the
Agreement, except that there shall be no payment to or on behalf of
any Enhancement or Enhancement Provider for the Series D Certificates
under Section 4.03(b)(I)(iv).
(ii) During the Amortization Period, deposits shall
be made to the Collection Account (x) in accordance with
Section 4.03(b)(I) of the Agreement to be allocated with
respect to interest payments for the Series D Certificates,
Servicing Fee payments and to the Cash Collateral Account
until the balance in such account is at least equal to the
Cash Collateral Maintenance Amount, and (y) in accordance with
Section 4.03(b)(II) of the Agreement to be allocated for the
repayment of the Series D Certificates.
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(b) Withdrawals. Withdrawals from the Collection Account
shall be made on a daily basis in accordance with Section 4.03(c) of
the Agreement.
(c) Payments. In accordance with Section 4.04(b) of the
Agreement, on each Payment Date payments shall be made in the
following amounts and priorities.
(i) During the Non-Amortization Period:
(A) to the Class A Certificateholders,
interest in an amount equal to the product of the
Class A Monthly Certificate Rate and the Class A
Invested Amount as of the immediately preceding
Payment Date (or, with respect to the initial Payment
Date, the Initial Class A Invested Amount);
(B) to the Class B Certificateholders,
interest in an amount equal to the product of the
Class B Monthly Certificate Rate and the Class B
Invested Amount as of the immediately preceding
Payment Date (or, with respect to the initial Payment
Date, the Initial Class B Invested Amount);
(C) to the Servicer, the Servicing Fee
for the related Settlement Period; and
(D) upon the occurrence of a Partial
Amortization Event, the amounts on deposit in the
Excess Funding Account and allocated to the Series D
Certificates in accordance with Section 4.03(d) of
the Agreement will be paid as principal to the Series
D Certificateholders first to the Class A
Certificateholders until the Class A Invested Amount
has been reduced to zero, and second to the Class B
Certificateholders (up to the Class B Invested
Amount).
(ii) On each Payment Date during the Amortization
Period, after and in addition to the amounts set forth in
subsection (c)(i) hereof, the Trustee shall distribute to the
Series D Certificateholders principal in an amount equal to
the Series D Invested Percentage of Gross Collections
deposited to the Collection Account pursuant to Section
4.03(b)(II) of the Agreement (other than amounts representing
interest on the Series D Certificates pursuant to clauses
(c)(i)(A) and (B) hereof, amounts representing the Servicing
Fee pursuant to clause (c)(i)(C) hereof, and amounts allocated
to the Cash Collateral Account pursuant to clause (a)(ii)
hereof). Payments of principal distributable to the Series D
Certificateholders shall be made first to the Class A
Certificateholders until the Class A Invested Amount has been
reduced to zero and then second to the Class B
Certificateholders (up to the Class B Invested Amount).
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In accordance with Section 4.04(b) of the Agreement,
in addition to amounts available in the Collection Account for
distribution as interest to the Series D Certificateholders,
the Trustee shall make available any amounts in the Cash
Collateral Account to pay interest pursuant to clauses
(c)(i)(A) and (B) hereof and the Servicing Fee pursuant to
clause (c)(i)(C) hereof, to the extent that there are
insufficient funds in the Collection Account allocated to the
Series D Certificates.
SECTION 5. Subordination; Allocation of Charge-Off Amounts.
(a) Notwithstanding Section 5.01 of the Agreement,
payments of interest on the Class B Certificates are subordinated in
right of payment to payments of interest then due and owing with
respect to the Class A Certificates. Payments of principal of the
Class B Certificates are subordinated in right of payment to payments
of principal then due and owing with respect to the Class A
Certificates and no payments of principal will be made with respect to
the Class B Certificates unless all payments then required to be made
with respect to the Class A Certificates have been made.
(b) Charge-Off Amounts that are allocated to the Series D
Certificates pursuant to Section 4.05(b)(i) of the Agreement shall be
allocated first to reduce the Series D Subordinated Transferor Amount
until such amount is reduced to zero, second to reduce the Class B
Invested Amount until such amount is reduced to zero, and third to
reduce the Class A Invested Amount. The Subordinated Amount shall be
reduced by any amounts allocated to reduce the Series D Subordinated
Transferor Amount or the Class B Invested Amount, without duplication
of such amounts.
(c) Excess Finance Charge Collections that are allocated
to the Series D Certificates pursuant to Section 4.05(c)(i) or (ii) of
the Agreement shall be allocated first to reinstate the Class A
Invested Amount (only to the extent that the Class A Invested Amount
has been reduced on a prior Determination Date due to the allocation
of Charge-off Amounts and has not been previously reinstated), then to
reinstate the Class B Invested Amount (only to the extent that the
Class B Invested Amount has been reduced on a prior Determination Date
due to the allocation of Charge-off Amounts and has not been
previously reinstated) and then to reinstate the Series D Subordinated
Transferor Amount. The Subordinated Amount shall be increased by any
amounts allocated to increase the Series D Subordinated Transferor
Amount or the Class B Invested Amount, without duplication of such
amounts.
(d) Notwithstanding Section 2.09 of the Agreement, the
Trustee shall not cancel any Class B Certificates delivered by the
Transferor unless the Transferor delivers an Officer's Certificate to
the effect that after giving effect to the cancellation of such Class
B Certificate, the sum of the Series D Subordinated Transferor Amount
and the remaining Class B Invested Amount equals or exceeds the
Subordinated Minimum Amount.
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SECTION 6. Servicing Fee.
The Monthly Servicing Fee will be equal to the product of the
Servicing Fee Percentage and the Series D Invested Amount outstanding as of the
first day of the related Settlement Period, multiplied by a fraction, the
numerator of which is equal to the total number of days in the related
Settlement Period and the denominator of which is 360.
SECTION 7. Transferor Certificate.
During the Amortization Period for the Series D Certificates, the
portion, if any, of the Transferor Amount in excess of the Aggregate
Subordinated Minimum Transferor Amount shall become subordinated to the Series
D Certificates and distributions with respect to the Transferor Certificate
shall be prohibited until the Series D Certificates are paid in full.
SECTION 8. Series Termination Date; Events of Termination.
(a) The Series Termination Date for the Series D
Certificates shall be the April 2004 Payment Date. In the event that
the Series D Invested Amount is greater than zero on such Series D
Termination Date, the Trustee shall declare an Event of Termination to
have occurred and sell, or shall cause the Servicer to sell, all or a
portion of the Advances and other Trust Assets in an amount sufficient
to repay the Series D Certificates and each other outstanding Series
of Certificates that are pari pasu with the Series D Certificates and
the Variable Funding Certificate on a pro rata basis. Upon such sale,
the proceeds shall be used to pay the outstanding principal and
accrued and unpaid interest to the related Payment Date on the Series
D Certificates and each other outstanding Series of Certificates that
are pari pasu with the Series D Certificates and the Variable Funding
Certificate on a pro rata basis, and any excess shall be allocated in
accordance with the Agreement for the benefit of any other Series or
the Transferor Certificate. Proceeds allocated for the payment of
principal and accrued interest on the Series D Certificates shall be
distributed between the Class A Certificates and the Class B
Certificates in accordance with the Section 4(c)(ii) hereof.
(b) In addition to the Events of Termination set forth in
Section 9.01 of the Agreement, if any of the following events shall
occur at any time when there is at least one outstanding Series D
Certificate:
(i) as of any Determination Date, the Series D
Subordinated Amount is equal to or less than an amount equal
to 20.48% of the then outstanding Class A Invested Amount as
of the end of the related Settlement Period; or
(ii) the Series D Subordinated Amount is less than
the Series D Subordinated Minimum Amount for any three
consecutive Settlement Periods; or
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(iii) as of any Determination Date, the Series D
Subordinated Transferor Amount is equal to or less than an
amount equal to 10.50% of the then outstanding Series D
Invested Amount as of the end of the related Settlement
Period; or
(iv) the Series D Subordinated Transferor Amount is
less than the Series D Subordinated Transferor Minimum Amount
for any three consecutive Settlement Periods; or
(v) the Class A Certificate Rate or the Class B
Certificate Rate equals or exceeds the Weighted Average Coupon
for more than three consecutive Interest Accrual Periods; or
(vi) the three month rolling average of the Accounts
Receivable Percentage is equal to or less than 40%;
then, an Event of Termination shall occur without any notice or other
action on the part of the Trustee or any Certificateholder immediately
upon the occurrence of such event.
(c) In the event that the average amount on deposit in
the Excess Funding Account (calculated on a daily basis) for a period
of three consecutive Settlement Periods, exceeds an amount equal to
30% of the Eligible Assets for the same periods, a "Partial
Amortization Event" shall occur without any notice or other action on
the part of the Trustee or any Certificateholder immediately upon the
occurrence of such event. Upon the occurrence of a Partial
Amortization Event, the Trustee shall cause the amounts on deposit in
the Excess Funding Account to be distributed on the next succeeding
Payment Date to the Series D Certificates and each other outstanding
Series of Certificates in accordance with Section 4.03(d) of the
Agreement.
SECTION 9. Repurchase Terms.
On any Payment Date occurring on or after the April 2001 Payment Date,
the Servicer may in accordance with Section 12.02 of the Agreement, direct the
Transferor to redeem the Series D Certificates provided that the Transferor
deposits into the Collection Account an amount equal to the Invested Amount of
the Class A and Class B Series D Certificates plus accrued interest thereon at
the applicable Certificate Rate for the related Interest Accrual Period.
SECTION 10. Delivery and Payment for the Series D Certificates.
The Trustee shall deliver the Class A and Class B Certificates to the
Transferor when authenticated upon the written direction of the Transferor.
SECTION 11. Issuance of Additional Series D Certificates.
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(a) The Trustee shall authenticate and deliver additional
Series D Certificates to the Transferor upon delivery to the Trustee
of (i) an Officer's Certificate of the Transferor requesting the
authentication of additional amounts of Series D Certificates, stating
the date upon which such additional Certificates are to be delivered
and certifying that the conditions set forth in clause (b) of this
Section have been met, (ii) an Opinion of Counsel to the effect that
for federal, California and Illinois income and franchise tax
purposes, (1) such additional Series D Certificates will either (x) be
treated as indebtedness or (y) not cause the Trust to be taxed as a
corporation and (2) such issuance will not adversely affect the
federal and state tax characterization of the Trust, any outstanding
Investor Certificates of any Series or the Variable Funding
Certificate and will not cause a taxable event to holders of any such
Investor Certificates or the Variable Funding Certificate, (iii)
written confirmation from each Rating Agency that the issuance of the
additional Series D Certificates will not result in that Rating Agency
reducing or withdrawing its rating on (x) either Class of the Series D
Certificates, (y) any then outstanding Series rated by it, or (z) the
Variable Funding Certificate, and (iv) such other information and
documents required or requested by the Trustee, Rating Agencies or
counsel.
(b) In addition to the documents delivered pursuant to clause
(a) of this Section, the following conditions must be satisfied prior
to the issuance of additional Series D Certificates: (i) after giving
effect to the proposed issuance, the Series D Subordinated Transferor
Amount shall be at least equal to the Series D Subordinated Minimum
Transferor Amount and the Subordinated Amount shall be at least equal
to the Subordinated Minimum Amount; (ii) the Transferor shall have
delivered to the Trustee a certificate of an authorized officer, dated
the date upon which the issuance is to occur, to the effect that the
Transferor reasonably believes that such issuance will not at the time
of its occurrence or at a future date have a material adverse effect
on the Trust or any Series of Investor Certificates or the Variable
Funding Certificate; (iii) as of the date of the proposed issuance,
all amounts due and owing to the holders of Investor Certificates
shall have been paid; and (iv) the excess of the principal amount of
each Class of the additional Series D Certificates over their issue
price shall not exceed the maximum amount permitted under the Code
without the creation of original issue discount.
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SECTION 12. Restrictions on Class B Certificates.
The following restrictions will apply to the Class B Certificates at
all times while any of such Class B Certificates are outstanding:
(i) The minimum authorized denomination for each Class B
Certificate shall be an initial amount equal to $250,000;
(ii) All Class B Certificates shall be sold pursuant to
the Private Placement Exemption; and
(iii) The Trustee shall not register, or otherwise permit,
participate in, or facilitate the registration of, any Class B
Certificate for trading on a established securities market. If,
despite the restriction in the preceding sentence, any Class B
Certificate becomes traded on an established securities market, the
Trustee shall not recognize transfers made on that market. For this
purpose, an established securities market shall include (A) a national
securities exchange registered under Section 6 of the Securities
Exchange Act of 1934, as amended, (B) a national securities exchange
exempt from registration under Section 6 of the Securities Exchange
Act of 1934, as amended, because of the limited volume of
transactions, (C) a foreign securities exchange that, under the law of
the jurisdiction where it is organized, satisfies regulatory
requirements that are analogous to the regulatory requirements under
the Securities Exchange Act of 1934, as amended, (D) a regional or
local exchange, or (E) an interdealer quotation system that regularly
disseminates firm buy or sell quotations by identified brokers or
dealers by electronic means or otherwise.
The Trustee shall not waive any of the foregoing restrictions unless
it has received an opinion of nationally recognized tax counsel that such
waiver will not cause the Trust to become subject to federal income tax or
otherwise subject the Trust or any Certificateholder to adverse federal income
tax consequences.
SECTION 13. Definitions.
For the purposes of the Agreement and this Supplement, the following
capitalized terms shall be defined as follows and shall supersede, with respect
to the Series D Certificates, any definitions stated in Article I of the
Agreement or Annex X thereto:
"Additional Trust Information" means the information satisfying the
requirements of subsection (d)(4)(i) of Rule 144A under the Securities Act.
"Amortization Period Commencement Date" means the April 2002 Payment
Date.
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"Cash Collateral Maintenance Amount" means the sum of (A)
nine-twelfths of the product of (i) the then current Class A Certificate Rate
plus the Servicing Fee Percentage and (ii) the then outstanding Class A
Invested Amount, (B) nine-twelfths of the product of (i) the then current Class
B Certificate Rate plus the Servicing Fee Percentage and (ii) the then
outstanding Class B Invested Amount and (C) the Cash Collateral Maintenance
Amounts for each other Series then in its Amortization Period.
"Class A Invested Amount" means, for any day, an amount equal to the
Class A Initial Invested Amount minus (a) the aggregate amount of payments of
principal paid with respect to the Class A Certificates prior to such day
minus, (b) after the Subordinated Amount has been reduced to zero, the excess,
if any, of the aggregate Charge-off Amounts allocated to the Class A
Certificates over the Excess Finance Charge Collections which have been
allocated to the Class A Certificates.
"Class A Invested Percentage" means, with respect to the Class A
Certificates for any day, (a) when used with respect to the Class A
Certificates during its related Non-Amortization Period, the decimal equivalent
of a fraction the numerator of which is the Class A Invested Amount as of the
end of the preceding Business Day and the denominator of which is the Eligible
Assets for such preceding Business Day; and (b) when used with respect to the
Class A Certificates during its related Amortization Period, the decimal
equivalent of a fraction the numerator of which is the Class A Invested Amount
as of the opening of business on the first day of the related Amortization
Period and the denominator of which is the greater of (i) the Eligible Assets
on the last day of the prior Settlement Period and (ii) the sum of the
numerators then being used to determine the Invested Percentages for each
outstanding Series and the Issuer Percentage for the Variable Funding
Certificate.
"Class B Invested Amount" means, for any day, an amount equal to the
Class B Initial Invested Amount minus (a) the aggregate amount of payments of
principal paid with respect to the Class B Certificates prior to such day
minus, (b) after the Series D Subordinated Transferor Amount has been reduced
to zero, the excess, if any, of the aggregate Charge-off Amounts allocated to
the Class B Certificates over the Excess Finance Charge Collections which have
been allocated to the Class B Certificates.
"Class B Invested Percentage" means, with respect to the Class B
Certificates for any day, (a) when used with respect to the Class B
Certificates during its related Non-Amortization Period, the decimal equivalent
of a fraction the numerator of which is the Class B Invested Amount as of the
end of the preceding Business Day and the denominator of which is the Eligible
Assets for such preceding Business Day; and (b) when used with respect to the
Class B Certificates during its related Amortization Period, the decimal
equivalent of a fraction the numerator of which is the Class B Invested Amount
as of the opening of business on the first day of the related Amortization
Period and the denominator of which is the greater of (i) the Eligible Assets
on the last day of the prior Settlement Period and (ii) the sum of the
numerators then being used to determine the
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Invested Percentages for each outstanding Series and the Issuer Percentage for
the Variable Funding Certificate.
"Certificate Rate" means either or both of the Class A Certificate
Rate or the Class B Certificate Rate, as appropriate.
"Closing Date" means April 14, 1997.
"Daily Interest Amount" means, for the Series D Certificates as of any
Business Day an amount equal to the sum of (i) any Daily Interest Shortfall (to
the extent not paid in the current Settlement Period), plus (ii) the sum of (w)
the Class A Invested Amount as of the most recent Payment Date multiplied by
the Class A Monthly Certificate Rate as of such Payment Date, plus (x) the
Class B Invested Amount as of the most recent Payment Date multiplied by the
Class B Monthly Certificate Rate as of such Payment Date, plus (y) the
Servicing Fee for the related Interest Accrual Period, minus (z) any amounts
already deposited into the Collection Account in the related Settlement Period
with respect to the Daily Interest Amount, divided by the number of Business
Days left in the Settlement Period.
"Daily Interest Shortfall" means the amount of the Daily Interest
Amount as of the last Business Day of the immediately preceding Settlement
Period that was not paid or deposited on or for such day.
"Initial Class A Invested Amount" means the amount so described in
Section 2 hereof.
"Initial Class B Invested Amount" means the amount so described in
Section 2 hereof.
"Initial Invested Amount" means, when used with respect to the Series
D Certificates, the sum of the Initial Class A Invested Amount for the Class A
Certificates and the Initial Class B Invested Amount for the Class B
Certificates.
"Initial Series D Invested Amount" means the amount so described in
Section 2 hereof.
"Initial Series D Subordinated Transferor Amount" means $14,197,627.
"Initial Subordinated Amount" means, when used with respect to the
Series D Certificates, $23,457,627.
"Interest Accrual Period" means the period from the Closing Date to,
and including, the day immediately preceding the initial Payment Date, and each
period from a Payment Date to, and including, the calendar day immediately
preceding the next Payment Date.
"Invested Percentage" means, when used with respect to the Series D
Certificates, the sum of the Class A Invested Percentage and the Class B
Invested Percentage.
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"LIBOR" means the London interbank offered quotations rate for
one-month U.S. dollar deposits as determined by the Trustee in accordance with
Section 3(a) hereof.
"LIBOR Determination Date" means, for any Interest Accrual Period, the
second London business day immediately preceding the first day of such Interest
Accrual Period.
"London business day" means any day on which commercial banks are open
for business (including dealings in foreign exchange and foreign currency
deposits) in London.
"Monthly Certificate Rate" means, when used with respect to the Series
D Certificates, either the Class A Monthly Certificate Rate, or the Class B
Monthly Certificate Rate, as applicable.
"Monthly Servicing Fee" means the product of the Invested Amount of
the Series D Certificates as of the first day of the related Settlement Period
and the Servicing Fee Percentage multiplied by a fraction, the numerator of
which is equal to the actual number of days in the related Settlement Period
and the denominator of which is equal to 360.
"Payment Date" means the 15th day of each month, or if such 15th day
is not a Business Day, the next succeeding Business Day. The initial Payment
Date for the Series D Certificates shall be May 15, 1997.
"Record Date" means, with respect to any Series D Certificates
evidenced by Book-Entry Certificates on any Payment Date, the 14th day of the
month in which such Payment Date occurs and with respect to any Series D
Certificates evidenced by Definitive Certificates on any Payment Date, the last
day of the month preceding the month in which such Payment Date occurs.
"Reference Banks" means the principal London office of each of the
four major banks selected by the Servicer in accordance with clause (i) of the
fourth paragraph of Section 3 hereof.
"Series D Invested Amount" means, when used with respect to the Series
D Certificates, the sum of the Class A Invested Amount and the Class B Invested
Amount.
"Series D Repurchase Price" means a price sufficient to pay the
Invested Amount of each Class of the Series D Certificates in full plus accrued
interest at the applicable Monthly Certificate Rate to but excluding the
Payment Date on which such repurchase is made.
"Series D Subordinated Amount" means an amount equal to the Initial
Subordinated Amount as of the Closing Date, as decreased due to allocations of
Charge-Offs or increased due to allocations of Excess Finance Charge
Collections, in each case, in accordance with the Agreement.
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"Series D Subordinated Minimum Amount" means (i) when used during the
Non-Amortization Period, the product of the Subordinated Percentage and the
Initial Class A Invested Amount for the Business Day preceding the date of
determination, and (ii) when used during the Amortization Period, the product
of the Subordinated Percentage and the Initial Class A Invested Amount as of
the last day of the Settlement Period immediately preceding the Amortization
Period.
"Series D Subordinated Transferor Amount" means the Initial Series D
Subordinated Transferor Amount, as decreased due to allocations of Charge-Offs
or increased due to allocations of Excess Finance Charge Collections, in each
case, in accordance with the Agreement and this Supplement.
"Series D Subordinated Transferor Minimum Amount" means (i) when used
during the Non-Amortization Period, the product of the Subordinate Enhancement
Percentage and the Initial Invested Amount for the Business Day preceding the
date of determination, and (ii) when used during the Amortization Period, the
product of the Subordinate Enhancement Percentage and the Initial Invested
Amount as of the last day of the Settlement Period immediately preceding the
Amortization Period.
"Servicing Fee Percentage" means 2% per annum.
"Subordinate Enhancement Percentage" means a fraction the numerator of
which is 11.5% and the denominator of which is 88.5%, which fraction may be
reduced by the Transferor upon confirmation from each Rating Agency that such
reduction would not result in a withdrawal or downgrading of the credit rating
of any outstanding Series of Investor Certificates or the Variable Funding
Certificate.
"Subordinated Percentage" means a fraction the numerator of which is
19% and the denominator of which is 81%.
"Telerate Page 3750" means the display page so designated by the Dow
Xxxxx Telerate Service, or any other page as may replace that page on that
service for the purpose of displaying comparable rates or prices.
"Weighted Average Coupon" means, with respect to any Settlement
Period, the weighted average of the finance charges and fees that accrued on
the Advances during such Settlement Period, less the Servicing Fee Percentage.
The words "hereof," "herein," and "hereunder" and words of similar
import when used in this Supplement shall refer to this Supplement or the
Agreement as a whole and not to any particular provision of this Supplement or
the Agreement, as the case may be; and Section, Schedule and Exhibit references
contained in this Agreement or this Supplement are references to Sections,
Schedules and Exhibits in or to the Agreement or this Supplement unless
otherwise specified.
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SECTION 14. Book Entry Certificates; Accrual of Interest on the Series D
Certificates.
The Series D Certificates shall be initially issued in the form of
Book-Entry Certificates only and the Trustee shall issue, at the direction of
the Transferor, one or more Series D Certificates to the nominee of the
Depository on the Closing Date. The Trustee shall issue Definitive
Certificates only in accordance with Section 6.13 of the Agreement.
Interest shall accrue on the Series D Certificates from the Closing
Date.
SECTION 15. Payments.
The Trustee shall make distributions on the Series D Certificates in
accordance with the Agreement by wire transfer in immediately available funds
for as long as the Series D Certificates are in the form of Book-Entry
Certificates. Distributions on Series D Definitive Certificates shall be by
check mailed to the Holder of record as of the related Record Date.
SECTION 16. Contract Expiration.
Upon commencement of the Amortization Period, the Servicer, in its
sole discretion, may extend the Contract Termination Date with respect to any
Contract if in the sole judgment of the Servicer, based upon its normal credit
policies, the absence of such renewal will have a material adverse impact on
the Trust Assets, provided, however, that such Contract shall not be extended
for a period of more than thirty-six (36) months.
SECTION 17. Ratification of Agreement.
As supplemented by this Supplement, the Agreement is in all respects
ratified and confirmed and the Agreement as so supplemented by this Supplement
shall be read, taken, and construed as one and the same instrument.
SECTION 18. Additional Trust Information.
At any time when the Transferor or the Trust is not subject to Section
13 or 15(d) of the Exchange Act, the Servicer agrees to prepare, and the
Trustee agrees to furnish, the Additional Trust Information to beneficial
owners or Holders of the Class B Certificates and prospective purchasers of
Class B Certificates at the expense of the Servicer, upon request therefor.
SECTION 19. The Trustee.
The Trustee shall not be responsible in any manner whatsoever for or
in respect of the validity or sufficiency of this Supplement or for or in
respect of the Preliminary Statement contained herein, all of which recitals
are made solely by the Transferor.
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SECTION 20. Instructions in Writings.
All instructions given by the Servicer to the Trustee pursuant to this
Supplement shall be in writing, and may be included in a Daily Report or
Settlement Statement.
SECTION 21. Voting Rights.
There will be no separate Class voting. The Class A and Class B
Certificates will vote together as a single class and will be entitled to vote
pro rata based upon the then current respective Certificate Invested Amount of
each such Class for all voting, consent, direction, or similar purposes under
the Agreement, without regard to Class.
SECTION 22. Counterparts.
This Supplement may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all of such
counterparts shall together constitute but one and the same instrument.
SECTION 23. Governing Law.
THIS SUPPLEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF CALIFORNIA, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND
THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE
DETERMINED IN ACCORDANCE WITH SUCH LAWS.
SECTION 24. Forms of Certificates.
Notwithstanding Section 6.01 of the Agreement, the Class A
Certificates shall each be substantially in the form of Exhibit A-1 hereto and
the Class B Certificates shall each be substantially in the form of Exhibit A-2
hereto.
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IN WITNESS WHEREOF, Transferor, Servicer and the Trustee have caused
this Supplement to be duly executed by their respective officers thereunto duly
authorized as of the date first above written.
FREMONT FUNDING INC.,
Transferor
By /s/ XXXXXXX X. XXXX
--------------------------------
Name: Xxxxxxx X. Xxxx
Title: Chief Financial Officer/
Treasurer
FREMONT FINANCIAL CORPORATION,
Servicer
By /s/ XXXXXXX X. XXXX, XX.
--------------------------------
Name: Xxxxxxx X. Xxxx, Xx.
Title: Senior Vice President/
General Counsel
LASALLE NATIONAL BANK,
Trustee
By /s/ XXXXXXXX XXXXXX
----------------------------------
Name: Xxxxxxxx Xxxxxx
Title: First Vice President
