FIRST AMENDMENT AND CONSENT
FIRST AMENDMENT (this "Amendment"), dated as of October 21,
1997, among FREMONT FINANCIAL CORPORATION (the "Borrower"), the lending
institutions party to the Credit Agreement referred to below (the "Banks"),
XXXXX FARGO BANK, N.A. and FLEET BANK, NATIONAL ASSOCIATION, as Co-Agents (the
"Co-Agents"), and THE CHASE MANHATTAN BANK, as Agent (the "Agent") for the
Banks. All capitalized terms used herein and not otherwise defined shall have
the respective meanings provided such terms in the Credit Agreement.
W I T N E S S E T H :
WHEREAS, the Borrower, the Banks, the Co-Agents and the Agent
are parties to a Second Amended and Restated Agreement, dated as of June 23,
1997 (as in effect on the date hereof, the "Credit Agreement");
WHEREAS, in connection with the Credit Agreement, Fremont
Premium Finance Corporation ("FPFC") and The Chase Manhattan Bank, as Agent,
entered into a Subsidiary Guaranty, dated as of June 23, 1997 (as in effect on
the date hereof, the "FPFC Subsidiary Guaranty");
WHEREAS, in connection with the Credit Agreement, Fremont
Premium Finance Company of Delaware ("FPFC Delaware") and The Chase Manhattan
Bank, as Agent, entered into a Subsidiary Guaranty, dated as of June 23, 1997
(as in effect on the date hereof, the "FPFC Delaware Subsidiary Guaranty");
WHEREAS, the Borrower, FPFC and FPFC Delaware have requested
that the Banks consent to the termination of each of the FPFC Subsidiary
Guaranty and the FPFC Delaware Subsidiary Guaranty (the "Guaranty
Terminations"); and
WHEREAS, the parties hereto wish to amend the Credit
Agreement, and the Banks wish to consent to the Guaranty Terminations, in each
case as herein provided;
NOW, THEREFORE, it is agreed:
I. AMENDMENTS AND CONSENT.
1. Section 4.04(ii) of the Credit Agreement is hereby amended
by deleting the text "FPFC and FPFC Delaware," appearing therein.
2. Section 4.05(a) of the Credit Agreement is hereby amended
by deleting the text "Borrower, FGC, FPFC and FPFC Delaware" appearing therein
and inserting in lieu thereof the text "Borrower and FGC".
3. Section 4.10 of the Credit Agreement is hereby amended by
deleting the text appearing therein in its entirety and inserting in lieu
thereof the text "[Intentionally Left Blank.]".
4. Section 4.16 of the Credit Agreement is hereby amended by:
(x) deleting the text "Section 11.08, (b)" appearing in clause (a) of said
Section and inserting in lieu thereof the text "Section 11.08 and (b)"; and (y)
deleting clauses (c) and (d) of said Section in their entirety.
5. Section 5.02 of the Credit Agreement is hereby amended by
deleting the text "Borrower, FGC, FPFC and FPFC Delaware" appearing therein and
inserting in lieu thereof the text "Borrower and FGC".
6. Section 5.03 of the Credit Agreement is hereby amended by
deleting the text "Borrower, FGC, FPFC or FPFC Delaware" appearing therein and
inserting in lieu thereof the text "Borrower or FGC".
7. Section 5.06 of the Credit Agreement is hereby amended by
(x) deleting the text "Borrower, FGC, FPFC or FPFC Delaware" appearing therein
and inserting in lieu thereof the text "Borrower or FGC" and (y) deleting the
text "Borrower, FPFC, FPFC Delaware or FGC" in each instance it appears in said
Section and inserting in lieu thereof in each such instance the text "Borrower
or FGC".
8. Section 5.07 of the Credit Agreement is hereby amended by
(x) deleting the text "Borrower, FGC, FPFC and FPFC Delaware" appearing therein
and inserting in lieu thereof the text "Borrower and FGC" and (y) deleting the
text "Borrower, FPFC, FPFC Delaware or FGC" appearing therein and inserting in
lieu thereof the text "Borrower or FGC".
9. Section 5.09 of the Credit Agreement is hereby amended by
deleting the text ", FPFC or FPFC Delaware" and the text ", FPFC, FPFC Delaware"
appearing in said Section.
10. Section 5.13 of the Credit Agreement is hereby amended by
deleting the following text appearing therein:
"The principal business of FPFC is the financing of commercial
insurance premiums. The principal business of FPFC Delaware is
the financing of commercial insurance premiums in states other
than California."
11. Section 5.18 of the Credit Agreement is hereby amended by
deleting the text "Borrower, FGC, FPFC and FPFC Delaware" appearing therein and
inserting in lieu thereof the text "Borrower and FGC".
12. Section 6.01(a) of the Credit Agreement is hereby amended
by deleting the text ", (ii) a consolidated balance sheet of FPFC and its
Subsidiaries as of the end of such fiscal quarter and a consolidated and
consolidating statement of income of FPFC and its Subsidiaries for such fiscal
quarter, all of which shall be certified by the chief financial officer of the
Borrower and (iii)" appearing therein and inserting in lieu thereof the text
"and (ii)".
13. Section 6.01(b) of the Credit Agreement is hereby amended
by (x) deleting the comma appearing immediately prior to clause (ii) of said
Section, (y) deleting clause (ii) of said Section in its entirety and (z)
deleting the text "and (iii)" appearing therein and inserting in lieu thereof
"and (ii)".
14. Section 6.01(f) of the Credit Agreement is hereby amended
by: (x) deleting the text "prospects of FPFC, FPFC Delaware or the Borrower"
appearing in said Section and inserting in lieu thereof the text "prospects of
the Borrower", and (y) deleting the text "ability of the Borrower, FPFC, FPFC
Delaware or FGC" appearing in said Section and inserting in lieu thereof the
following text "ability of the Borrower or FGC".
15. Section 7.02(g) of the Credit Agreement is hereby amended
by deleting the text appearing therein in its entirety and inserting in lieu
thereof the following text "[Intentionally Left Blank.]".
16. Section 7.02(j) of the Credit Agreement is hereby amended
by deleting the two parentheticals appearing therein.
17. Section 7.04 of the Credit Agreement is hereby amended by
(x) deleting the word "and" appearing at the end of clause (e) thereof, (y)
deleting the period appearing at the end of clause (f) thereof and inserting ";
and" in lieu thereof, and (z) inserting the following new clause (g) at the end
thereof:
"(g) the Borrower and its Subsidiaries may sell, transfer or
dispose of Fremont Premium Finance Corporation and Fremont
Premium Finance Company of Delaware."
18. Section 7.06(g) of the Credit Agreement is hereby amended
by deleting the text "Fremont Funding Inc., FPFC and FVFCFC" appearing
immediately at the end thereof and inserting in lieu thereof "Fremont Funding
Inc. and FVFCFC".
19. Section 7.06(h) of the Credit Agreement is hereby amended
by deleting the text appearing therein in its entirety and inserting in lieu
thereof the text "[Intentionally Left Blank.]".
20. Section 7.06(i) of the Credit Agreement is hereby amended
by deleting the two parentheticals appearing therein.
21. Section 7.06(j) of the Credit Agreement is hereby amended
by deleting the text appearing therein in its entirety and inserting in lieu
thereof the text "[Intentionally Left Blank.]".
22. Section 7.08(c) of the Credit Agreement is hereby amended
by deleting the text "(other than FPFC, FPFC Delaware, Fremont Funding Inc. and
FVFCFC)" appearing therein and inserting in lieu thereof the text "(other than
Fremont Funding Inc. and FVFCFC)".
23. Section 7.12(b) of the Credit Agreement is hereby amended
by deleting the text appearing therein in its entirety and inserting in lieu
thereof the text "[Intentionally Left Blank.]".
24. Section 8.02 of the Credit Agreement is hereby amended by
deleting the text "made by FGC, FPFC, FPFC Delaware, the Borrower or any of its
Subsidiaries" appearing therein and inserting in lieu thereof the text "made by
FGC, the Borrower or any of its Subsidiaries".
25. Section 8.04 of the Credit Agreement is hereby amended by
deleting the text "FGC, FPFC, FPFC Delaware or the Borrower" appearing therein
and inserting in lieu thereof the text "FGC or the Borrower".
26. Section 8.06(a) of the Credit Agreement is hereby amended
by deleting the text "FGC, FPFC, FPFC Delaware, the Borrower or any Subsidiary
of the Borrower" and inserting in lieu thereof the text "FGC, the Borrower or
any Subsidiary of the Borrower".
27. Section 8.07 of the Credit Agreement is hereby amended by
deleting the text "FPFC, FPFC Delaware," in each instance it appears in said
Section.
28. Section 8.10 of the Credit Agreement is hereby amended by
deleting the text appearing therein in its entirety and inserting in lieu
thereof the text "[Intentionally Left Blank.]".
29. Section 8.11 of the Credit Agreement is hereby amended by
deleting the text "FPFC, FPFC Delaware," in each instance it appears.
30. Section 8.12 of the Credit Agreement is hereby amended by
(x) deleting the designation "(a)" appearing therein and (y) deleting clauses
(b) and (c) thereof in their entirety.
31. The definition of "Borrowing Base" appearing in Section 9
of the Credit Agreement is hereby amended by deleting the text appearing therein
in its entirety and inserting in lieu thereof the text "shall mean, for any date
of determination, an amount equal to the product of (i) the Advance Rate times
(ii) the Eligible Receivables of the Borrower on such date."
32. The definition of "Eligible Receivables" is hereby amended
by deleting the text appearing therein in its entirety and inserting in lieu
thereof the text "shall mean all Finance Receivables which comply with all of
the criteria set forth in Part A of Annex VI; provided that Eligible Receivables
in any event shall not include any Non-Performing Assets."
33. The definition of "Finance Receivables" is hereby amended
to read in its entirety as follows:
"Finance Receivables" shall mean (i) loans receivable
which arise from commercial loans made or acquired by the
Borrower or any of its Subsidiaries in the ordinary course of
its business, which are secured by the accounts receivable,
inventory, equipment or other property of the customers of the
Borrower or any such Subsidiary (net of any participations
sold) and (ii) participating interests purchased by the
Borrower in the ordinary course of its business in commercial
loans made by other commercial lenders (other than FVFCFC and
Fremont Funding Inc.) in the ordinary course of such other
commercial lender's business which are secured by the accounts
receivable, inventory, equipment or other property of the
customers of such commercial lender, provided that such loans
receivable and participating interests (y) are free of any
Liens and are unconditionally owed to the Borrower or such
Subsidiary without defense, offset, or counterclaim, and (z)
are items of the type included as finance receivables on the
balance sheet of the Borrower as at December 31, 1996.
34. The definition of "Non-Performing Assets" appearing in
Section 9 of the Credit Agreement is hereby amended by (x) deleting the text
"(x)" appearing immediately after the text "past due" and (y) deleting the text
"and (y) by more than 120 days in the case of Finance Receivables of each FPFC
and FPFC Delaware" appearing therein.
35. Section 9 of the Credit Agreement is hereby further
amended by deleting the definition of "FPFC" and "FPFC Delaware" in their
entirety.
36. Annex VI to the Credit Agreement is hereby amended by
deleting Part B thereof in its entirety.
37. Exhibit I to the Credit Agreement is hereby amended by (x)
deleting Section 2 thereof in its entirety and renumbering the other Sections
thereof accordingly and (y) deleting the sentence appearing at the bottom of
page 2 thereof in its entirety.
38. The Banks hereby consent to the Guaranty Terminations, and
authorize the Agent to enter into any agreements or documents reasonably
requested by the Borrower to evidence the Guaranty Terminations.
II. MISCELLANEOUS.
1. In order to induce the Banks to enter into this Amendment,
the Borrower hereby represents and warrants that:
(a) no Default or Event of Default exists as of the
First Amendment Effective Date both before and after giving effect to
this Amendment; and
(b) all of the representations and warranties
contained in the Credit Agreement or the other Credit Documents are
true and correct in all material respects on the First Amendment
Effective Date both before and after giving effect to this Amendment,
with the same effect as though such representations and warranties had
been made on and as of the First Amendment Effective Date (it being
understood that any representation or warranty made as of a specific
date shall be true and correct in all material respects as of such
specific date).
2. This Amendment is limited as specified and shall not
constitute a modification, acceptance or waiver of any other provisions of the
Credit Agreement or any other Credit Document.
3. This Amendment may be executed in any number of
counterparts and by the different parties hereto on separate counterparts, each
of which counterparts when executed and delivered shall be an original, but all
of which shall together constitute one and the same instrument. A complete set
of counterparts shall be lodged with the Borrower and the Agent.
4. THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAW
OF THE STATE OF NEW YORK.
5. This Amendment shall become effective on the date (the
"First Amendment Effective Date") when (i) each of the Borrower and the Required
Banks shall have signed a copy hereof (whether the same or different copies) and
shall have delivered (including by way of facsimile transmission) the same to
the Agent at its Notice Office and
(ii) the Borrower shall have consummated the sale, transfer or disposition of
Fremont Premium Finance Corporation and Fremont Premium Finance Company of
Delaware.
6. From and after the First Amendment Effective Date, all
references in the Credit Agreement and each of the other Credit Documents to the
Credit Agreement shall be deemed to be references to the Credit Agreement as
amended hereby.
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