<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 26, 1999
REGISTRATION NO. 333-
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- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
FREMONT GENERAL CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C> <C>
NEVADA 6331 95-2815260
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NUMBER)
</TABLE>
2020 SANTA MONICA BOULEVARD
SANTA MONICA, CALIFORNIA 90404
(310) 315-5500
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
LOUIS J. RAMPINO
PRESIDENT AND CHIEF OPERATING OFFICER
FREMONT GENERAL CORPORATION
2020 SANTA MONICA BOULEVARD
SANTA MONICA, CALIFORNIA 90404
(310) 315-5500
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
COPIES TO:
ELIZABETH R. FLINT
JAMES C. CREIGH
WILSON SONSINI GOODRICH & ROSATI
PROFESSIONAL CORPORATION
650 PAGE MILL ROAD
PALO ALTO, CALIFORNIA 94304
(650) 493-9300
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 in
connection with the formation of a holding company and there is compliance with
General Instruction G, 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, 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. [ ]
CALCULATION OF REGISTRATION FEE
<TABLE>
<S> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------
TITLE OF EACH CLASS OF PROPOSED MAXIMUM PROPOSED MAXIMUM
SECURITIES TO AMOUNT TO BE OFFERING PRICE AGGREGATE OFFERING AMOUNT OF
BE REGISTERED REGISTERED PER NOTE(1) PRICE REGISTRATION FEE(2)
- -------------------------------------------------------------------------------------------------------------------------
Series B 7.70% Senior Notes
due 2004.................. $200,000,000 100% $200,000,000 $55,600
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Series B 7.875% Senior Notes
due 2009.................. $225,000,000 100% $225,000,000 $62,550
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Total............. $425,000,000 $425,000,000 $118,150
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</TABLE>
(1) Estimated solely for purpose of computing the registration fee in accordance
with Rule 457(f)(2) under the Securities Act.
(2) Calculated pursuant to Rule 457(f)(2) under the Securities Act.
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.
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<PAGE> 2
PROSPECTUS
[FREMONT LOGO]
FREMONT GENERAL CORPORATION
OFFER TO EXCHANGE
<TABLE>
<S> <C>
$200,000,000 SERIES B $225,000,000 SERIES B
7.70% SENIOR NOTES DUE 2004 7.875% SENIOR NOTES DUE 2009
FOR FOR
$200,000,000 $225,000,000
7.70% SENIOR NOTES DUE 2004 7.875% SENIOR NOTES DUE 2009
</TABLE>
THE EXCHANGE NOTES
The terms of the new Series B 7.70% Senior Notes due 2004 and Series B
7.875% Senior Notes due 2009 that we are offering in this prospectus are
substantially identical to the terms of our already outstanding 7.70% Senior
Notes due 2004 and 7.875% Senior Notes due 2009. The difference between them is
that the exchange notes will be freely transferable and will not have any
covenants regarding registration rights or additional interest.
MATERIAL TERMS OF THE EXCHANGE OFFER
- - Expires 5 p.m., New York City time, on , 1999, unless extended.
- - Subject to customary conditions, including the condition that the exchange
offer not violate applicable law or any applicable interpretation of the SEC
staff.
- - Tenders of initial notes may be withdrawn at any time prior to the expiration
of the exchange offer.
- - All initial notes that are validly tendered and not withdrawn will be
exchanged for exchange notes.
- - We will not receive any proceeds from the exchange offer.
- - All broker-dealers must comply with the registration and prospectus delivery
requirements of the Securities Act.
- - We do not intend to apply for listing of the exchange notes on any securities
exchange or to arrange for them to be quoted on any quotation system.
WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND US A PROXY.
-------------------------
INVESTING IN THE EXCHANGE NOTES INVOLVES RISKS.
SEE "RISK FACTORS" BEGINNING ON PAGE 8.
-------------------------
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THE EXCHANGE NOTES OR DETERMINED IF
THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
-------------------------
The date of this Prospectus is , 1999
<PAGE> 3
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and current reports, proxy statements and other
information with the SEC. You may read and copy any document we file at the
SEC's public reference room at 450 Fifth Street, N.W., Washington, DC 20549.
Please call the SEC at 1-800-SEC-0330 for further information on the public
reference room. Our SEC filings are also available from the SEC's Website at
"http://www.sec.gov."
The SEC allows us to "incorporate by reference" the information we file
with them, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
considered to be part of this prospectus, and information that we file later
with the SEC will automatically update and supersede this information. We
incorporate by reference our annual report on Form 10-K for the fiscal year
ended December 31, 1998 and any future filings we will make with the SEC under
Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934.
We will provide you with a copy of these filings, at no cost, if you write
or telephone our Corporate Secretary at the following address:
Fremont General Corporation
2020 Santa Monica Boulevard
Santa Monica, California 90404
(310) 315-5500
YOU SHOULD RELY ONLY ON THE INFORMATION OR REPRESENTATIONS PROVIDED IN THIS
PROSPECTUS. WE HAVE AUTHORIZED NO ONE TO PROVIDE YOU WITH DIFFERENT INFORMATION.
WE ARE NOT MAKING AN OFFER OF THESE SECURITIES IN ANY STATE WHERE THE OFFER IS
NOT PERMITTED. YOU SHOULD NOT ASSUME THAT THE INFORMATION IN THIS PROSPECTUS IS
ACCURATE AS OF ANY DATE OTHER THAN THE DATE ON THE FRONT OF THE DOCUMENT.
i
<PAGE> 4
SUMMARY
You should read the following summary together with the more detailed
information regarding our company and the exchange notes being offered in this
offering and our financial statements and notes thereto which are incorporated
by reference in this prospectus.
Unless otherwise indicated, all references in this prospectus to "the
Company," "Fremont General Corporation," "we," "us" and "our" are to Fremont
General Corporation and its subsidiaries, and all references to "Fremont
General" are to Fremont General Corporation as a stand-alone entity.
THE COMPANY
Fremont General Corporation is an insurance and financial services holding
company operating select businesses nationally in niche markets. Our reported
assets were $7.4 billion and $6.1 billion as of December 31, 1998 and 1997,
respectively. Our pre-tax earnings for 1998, 1997 and 1996 were $197 million,
$159 million and $128 million, respectively. Our business strategy includes
achieving income balance and geographic diversity among our business units in
order to limit our exposure to industry, market and regional concentrations. Our
business strategy also includes growing our business through new business
development and acquisitions. Our common stock is traded on the New York Stock
Exchange under the symbol "FMT."
Our workers' compensation operation currently has major market positions in
California, Illinois, Arizona, Idaho, Alaska, Indiana, Montana, Utah and
Wisconsin. As of December 31, 1998, we had premiums inforce in thirty-nine
states and the District of Columbia. We would have ranked as the seventh largest
writer, in direct premiums, of workers' compensation insurance in the United
States for the year ended December 31, 1997, according to A.M. Best, if the
results of our September 1, 1998 acquisition of UNICARE Specialty Services, Inc.
were included. For the years ended December 31, 1998, 1997 and 1996, we had
workers' compensation insurance net premiums earned of $551 million, $571
million and $457 million, respectively. Over the last four years, we have
focused on creating a broad national platform upon which to build our business,
while providing geographic diversity to mitigate potential fluctuations in
earnings from cyclical downturns in various regional economies. A.M. Best rates
our workers' compensation insurance subsidiaries on a consolidated basis as "A-"
(Excellent); this rating was reaffirmed on October 21, 1998. An "A-" rating is
A.M. Best's fourth highest rating category out of fifteen rating categories
ranging from "A++" (Superior) to "F" (In Liquidation).
Our financial services operation originates loans on a national basis and
provides commercial and residential real estate lending, commercial working
capital lines of credit and insurance premium financing. In addition, we make
investments in larger commercial loans originated and serviced by other
financial institutions. We also purchase pools of loans from time to time that
meet our new loan origination underwriting guidelines. Our lending is done
primarily on a senior and secured basis and we seek to minimize our credit
exposure through conservative loan underwriting and a comprehensive system of
collateral monitoring. We continue to focus on loan origination by broadening
our existing distribution channels and creating new distribution channels. The
outstanding loan portfolio of our financial services operation has grown from
$1.5 billion at December 31, 1994 to $3.0 billion at December 31, 1998.
1
<PAGE> 5
Our principal executive offices are located at 2020 Santa Monica Boulevard,
Santa Monica, California, 90404. Our telephone number at this location is (310)
315-5500.
SUMMARY DESCRIPTION OF THE EXCHANGE NOTES
The exchange notes consist of $200,000,000 Series B 7.70% Senior Notes due
2004 and $225,000,000 Series B 7.875% Senior Notes Due 2009. The form and terms
of the exchange notes are substantially identical to the form and terms of the
initial notes, except that the exchange notes will be registered under the
Securities Act and, therefore, will not bear legends restricting their transfer
and will not be entitled to registration under the Securities Act. The exchange
notes will evidence the same debt as the initial notes and both the initial
notes and the exchange notes are governed by the same indenture.
Securities Offered........... $200,000,000 aggregate principal amount of
Series B 7.70% Senior Notes due March 17, 2004
and $225,000,000 aggregate principal amount of
Series B 7.875% Senior Notes due March 17, 2009.
Maturity Dates............... March 17, 2004 for the notes Due 2004 and March
17, 2009 for the notes Due 2009.
Interest Payment Dates....... Each March 17 and September 17, commencing
September 17, 1999.
Form and Denominations of
Securities................. The exchange notes will be issued in
denominations of $1,000 and integral multiples
thereof. The exchange notes will be in book
entry form and will be represented by one or
more global notes (the "global notes") deposited
with, or on behalf of, The Depository Trust
Company. Interests in the global notes will be
shown on, and transfers will be effected only
though, records maintained by DTC and its
participants. See "Description of the
Notes -- General" and "-- Form, Denomination and
Registration."
Optional Redemption.......... We may redeem the notes, in whole or in part, at
our option at any time at a redemption price
equal to the greater of (i) 100% of the
principal amount of such notes or (ii) the sum
of the present values of the remaining scheduled
payments of principal and interest on the notes
discounted to the redemption date on a
semiannual basis (assuming a 360-day year
consisting of twelve 30-day months) at the
Adjusted Treasury Rate, plus, in each case,
accrued interest thereon to the date of
redemption. See "Description of the Notes --
Optional Redemption."
Sinking Fund................. None.
Covenants.................... The notes will be subject to certain restrictive
covenants including limitations on liens,
limitations of dividend and other payment
restrictions affecting Significant Insur-
2
<PAGE> 6
ance Subsidiaries and limitation on issuance and
sale of Capital Stock of Significant Insurance
Subsidiaries. See "Description of the
Notes -- Certain Covenants."
Ranking...................... The notes will be unsecured senior indebtedness
of Fremont General ranking equally with Fremont
General's existing and future unsubordinated
unsecured indebtedness and senior in right of
payment to all subordinated indebtedness of
Fremont General. The notes will be effectively
subordinated to all secured indebtedness of
Fremont General with respect to assets securing
such indebtedness and will be effectively
subordinated to all liabilities of Fremont
General's subsidiaries, including trade
payables. See "Risk Factors -- Our Operational
and Debt Structure Affects the Priority of the
Notes" and "Description of the Notes -- Ranking
and Holding Company Structure."
Trustee...................... The First National Bank of Chicago is the
trustee under the indenture pursuant to which
the initial notes and the exchange notes were
issued.
Absence of Market for the
Notes...................... The exchange notes will be a new issue of
securities for which there currently is no
market. We cannot assure you that a trading
market will develop for the exchange notes. We
do not intend to apply for listing of the
exchange notes on any securities exchange or for
quotation through the Nasdaq Stock Market.
Risk Factors................. See Risk Factors beginning on page 8 for a
discussion of certain risks relating to an
investment in the notes.
SUMMARY OF THE EXCHANGE OFFER
Registration Rights
Agreement.................... We issued the initial notes on March 17, 1999 to
Merrill Lynch, Pierce, Fenner & Smith
Incorporated, Credit Suisse First Boston
Corporation, Goldman, Sachs & Co. and Warburg
Dillon Read LLC. These initial purchasers
subsequently resold the notes to institutional
investors in transactions exempt from the
registration requirements of the Securities Act
and applicable state securities laws. In
connection with this private placement, we
entered into the registration rights agreement
that provides for the exchange offer.
The Exchange Offer........... We are offering exchange notes in exchange for
an equal principal amount of initial notes. As
of this date, there are $425,000,000 aggregate
principal amount of initial notes outstanding.
Initial notes may be tendered only in integral
multiples of $1,000.
3
<PAGE> 7
Resale of Exchange Notes..... We believe that the exchange notes issued in the
exchange offer may be resold by you without
compliance with the registration and prospectus
delivery provisions of the Securities Act,
provided that:
- you are acquiring the exchange notes in the
ordinary course of your business
- you have no arrangements or understandings
with any person to participate in the exchange
offer for the purpose of distributing the
exchange notes
- you are not an "affiliate" of ours.
If any of the statements above are not true and
you transfer any exchange note without
delivering a prospectus meeting the requirements
of the Securities Act or without an exemption
from registration of your exchange notes from
such requirements, you may incur liability under
the Securities Act. We will not assume or
indemnify you against such liability.
Each broker-dealer that receives exchange notes
for its own account in exchange for initial
notes which were acquired by such broker-dealer
as a result of market making or other trading
activities may be a statutory underwriter and
must acknowledge that it will deliver a
prospectus meeting the requirements of the
Securities Act upon a resale of the exchange
notes. A broker-dealer may use this prospectus
for an offer to resell, resale or other
retransfer of the exchange notes. For more
information, see "Plan of Distribution." We will
take steps to ensure that the issuance of the
exchange notes will comply with state securities
or "blue sky" laws.
Consequences If You Do Not
Exchange Initial Notes..... If you do not exchange your initial notes for
exchange notes, you will no longer be able to
force us to register the initial notes under the
Securities Act. In addition, you will not be
able to offer or sell the initial notes unless
they are registered under the Securities Act and
we will have no obligation to register them,
except for some limited exceptions. This
instruction does not apply if you offer or sell
them under an exemption from the requirements of
the Securities Act.
Expiration Date.............. The exchange offer will expire at 5:00 p.m., New
York City Time, on 1999, unless
we decide to extend the expiration date.
Interest On the Exchange
Notes...................... The exchange notes will accrue interest at 7.70%
per year with respect to the notes due 2004 and
7.875% per year with respect to the notes due
2009, from either the
4
<PAGE> 8
last date we paid interest on the initial notes
you exchanged or, if you surrendered your
initial notes for exchange after the applicable
record date, the date we paid interest on such
initial notes. We will pay interest on the
exchange notes on March 17 and September 17 of
each year.
Conditions To The Exchange
Offer...................... The exchange offer is subject to customary
conditions, including that:
- the exchange offer does not violate any
applicable law or applicable interpretation of
law of the SEC staff;
- no litigation materially impairs our ability
to proceed with the exchange offer; and
Procedures For Tendering
Initial Notes.............. If you wish to accept the exchange offer, you
must complete, sign and date the letter of
transmittal and transmit it together with all
other documents required by the letter of
transmittal (including the initial notes to be
exchanged) to First Chicago Trust Company of New
York, as exchange agent, at the address
specified on the cover page of the letter of
transmittal. Alternatively, you can tender your
initial notes by following the procedures for
book-entry transfer, as described in this
document.
Guaranteed Delivery
Procedures................... If you wish to tender your initial notes and you
cannot get your required documents to the
exchange agent by the expiration date, you may
tender your initial notes according to the
guaranteed delivery procedures described under
the heading "The Exchange Offer -- Guaranteed
Delivery Procedures."
Withdrawal Rights............ You may withdraw the tender of your initial
notes at any time prior to 5:00 p.m., New York
City time, on the expiration date. To withdraw,
you must send a written or facsimile
transmission notice of withdrawal to the
exchange agent at its address specified in the
section, "The Exchange Offer -- Exchange Agent"
by 5:00 p.m., New York City time, on the
expiration date.
Acceptance Of Initial Notes
And Delivery of Exchange
Notes...................... We will accept any and all initial notes that
are properly tendered in the exchange offer
prior to 5:00 p.m., New York City time, on the
expiration date as long as all of the conditions
are met. We will deliver the exchange notes
promptly after the expiration date.
Tax Considerations........... We believe that the exchange of initial notes
for exchange notes should not be a taxable
exchange for
5
<PAGE> 9
federal income tax purposes, but you should
consult your tax adviser about the tax
consequences of this exchange.
Exchange Agent............... First Chicago Trust Company of New York is
serving as exchange agent for the exchange
offer.
Fees And Expenses............ We will bear all expenses related to
consummating the exchange offer and complying
with the registration rights agreement, other
than underwriting discounts and commissions and
transfer taxes.
Use Of Proceeds.............. We will not receive any cash proceeds from the
issuance of the exchange notes. We used the
proceeds from the sale of the initial notes to
repay all indebtedness outstanding under Fremont
General's bank line of credit and for general
corporate purposes, including working capital.
6
<PAGE> 10
SUMMARY FINANCIAL AND OPERATING DATA
The following table sets forth our summary financial and other operating
data. The summary income statement data, balance sheet data and senior debt
ratios in the table are derived from our consolidated financial statements,
which have been audited by Ernst & Young LLP, our independent auditors. The
following summary financial data should be read in conjunction with our
consolidated financial statements, related notes thereto, and other financial
information incorporated by reference into this prospectus.
SUMMARY CONSOLIDATED FINANCIAL AND OPERATING DATA
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
--------------------------------------------------------------
1998(1) 1997(2) 1996 1995(3) 1994
---------- ---------- ---------- ---------- ----------
(IN THOUSANDS, EXCEPT PERCENTAGES)
<S> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Property and casualty premiums earned........ $ 552,078 $ 601,183 $ 486,860 $ 606,917 $ 433,584
Loan interest................................ 234,828 194,412 163,765 162,992 113,382
Net investment income........................ 192,815 149,729 123,531 119,523 76,821
Realized investment gains (losses)........... (605) (1,964) (1,658) 1 (315)
Other revenues............................... 58,481 30,935 23,306 34,381 29,676
---------- ---------- ---------- ---------- ----------
Total revenues............................... $1,037,597 $ 974,295 $ 795,804 $ 923,814 $ 653,148
========== ========== ========== ========== ==========
Property and casualty income................. $ 169,235 $ 144,667 $ 117,593 $ 83,092 $ 61,265
Financial services income.................... 55,506 42,286 36,589 35,737 28,014
Other interest and corporate expense......... (28,029) (28,060) (25,873) (18,502) (7,708)
---------- ---------- ---------- ---------- ----------
Income before taxes.......................... 196,712 158,893 128,309 100,327 81,571
Income tax expense........................... (63,748) (50,601) (41,021) (32,305) (25,759)
---------- ---------- ---------- ---------- ----------
Net Income................................... $ 132,964 $ 108,292 $ 87,288 $ 68,022 $ 55,812
========== ========== ========== ========== ==========
GAAP RATIOS FOR PROPERTY AND CASUALTY
SUBSIDIARIES:
Loss ratio................................... 60.8% 64.7% 68.9% 76.0% 63.1%
Expense ratio................................ 34.5% 27.5% 25.9% 24.5% 23.4%
Policyholder dividends ratio................. 0.9% 0.8% -- -- 11.5%
---------- ---------- ---------- ---------- ----------
Combined ratio............................... 96.2% 93.0% 94.8% 100.5% 98.0%
========== ========== ========== ========== ==========
RATIO OF SENIOR DEBT TO TOTAL CAPITALIZATION:
(4)
Including FASB 115(5)........................ 22.4% 20.7% 2.7% 12.4% 5.0%
Excluding FASB 115(5)........................ 23.1% 21.7% 2.7% 12.7% 4.4%
BALANCE SHEET DATA:
Total assets................................. $7,369,612 $6,090,627 $4,307,512 $4,477,399 $3,134,390
Fixed income and other investments........... 2,386,757 2,442,813 1,484,310 1,937,890 888,918
Loans receivable............................. 2,958,176 1,983,687 1,688,040 1,499,043 1,440,774
Claims and policy liabilities................ 2,571,027 2,460,550 1,579,325 1,971,719 1,012,704
Short-term debt.............................. 165,702 26,290 16,896 72,191 176,325
Long-term debt............................... 913,006 691,068 636,456 693,276 468,390
Trust Originated Preferred
Securities(SM)(6).......................... 100,000 100,000 100,000 -- --
Stockholders' equity
Including FASB 115(5)...................... 950,912 832,815 559,117 498,090 351,013
Excluding FASB 115(5)...................... 912,010 779,906 556,488 476,491 416,378
</TABLE>
- -------------------------
(1) The Company acquired UNICARE Specialty Services, Inc. on September 1, 1998.
(2) The Company acquired Industrial Indemnity Holdings, Inc. on August 1, 1997.
(3) The Company acquired Casualty Insurance Company on February 22, 1995.
(4) The ratio of debt of Fremont General, on a nonconsolidated basis, that ranks
equally with or senior to the notes, to the sum of (a) stockholders' equity
of Fremont General; (b) debt of Fremont General, on a nonconsolidated basis,
that ranks equally with or senior to the notes; (c) debt of Fremont General,
on a nonconsolidated basis, that is subordinated to the notes by its terms;
and (d) the 9% Junior Subordinated Debentures due March 31, 2026 of Fremont
General issued in connection with the mandatorily redeemable preferred
securities of the subsidiary trust (the "TOPrS Trust") holding solely
Fremont General junior subordinated debentures or any other similar
securities issued from time to time in the future.
(5) Effective January 1994, FASB 115 changed the accounting treatment afforded
the Company's investment portfolio wherein unrealized gains and losses on
securities designated by the Company as available for sale are included net
of deferred taxes, as a component of stockholders' equity.
(6) Fremont General-obligated mandatorily redeemable preferred securities of the
TOPrS Trust.
7
<PAGE> 11
RISK FACTORS
You should carefully consider the risks described below before making an
investment decision. The risks and uncertainties described below are not the
only ones that we may face. There may be additional risks and uncertainties not
presently known to us or that we currently do not believe are material that may
also impair our business operations.
If any of the following risks actually occur, our business, financial
condition or results of operations could be materially adversely affected. In
such case, the trading price of the exchange notes could decline and you may
lose all or part of your investment.
This prospectus contains forward-looking statements that involve risks and
uncertainties. Our actual results could differ materially from those anticipated
in these forward looking statements as a result of certain factors, including
the risks described below and elsewhere in this prospectus.
FAILURE TO PARTICIPATE IN THE EXCHANGE OFFER WILL HAVE ADVERSE CONSEQUENCES
We issued the initial notes in a private offering exempt from the
registration requirements of the Securities Act. Accordingly, you may not offer,
sell or otherwise transfer your initial notes except in compliance with the
registration requirements of the Securities Act and applicable state securities
laws or pursuant to exemptions from such registration requirements. If you do
not exchange your initial notes for exchange notes in this exchange offer, your
initial notes will continue to be subject to these transfer restrictions after
the completion of this exchange offer.
After completion of this exchange offer, if you do not tender your initial
notes in this exchange offer, you will no longer be entitled to any registration
rights under the registration rights agreement, except under limited
circumstances.
To the extent initial notes are tendered and accepted in the exchange
offer, the liquidity of the trading market, if any, for the initial notes could
be adversely affected.
OUR OPERATING RESULTS AND FINANCIAL CONDITION MAY VARY
Our profitability can be affected significantly by many factors including
competition, the severity and frequency of claims, interest rates, legislation
and regulations, court decisions, the judicial climate and general economic
conditions and trends, all of which are outside of our control. In addition, our
results may be affected by our ability to assess and integrate successfully the
operations of companies we acquire. Any of these factors could contribute to
significant variation in our results of operations within the different aspects
of our business, or businesses taken as a whole, from quarter to quarter and
from year to year.
With respect to our workers' compensation insurance business, changes in
economic conditions can lead to reduced premium levels due to lower payrolls as
well as increased claims due to the tendency of workers who are laid off to
submit workers' compensation claims. Changes in market interest rates can affect
the amount of interest income that we earn on our investment portfolio, as well
as the amount of realized and unrealized gains or losses on specific holdings
within our investment portfolio. Legislative and regulatory changes can also
cause the operating results of our workers' compensation insurance businesses to
vary.
During periods when economic conditions are unfavorable, our financial
services businesses may not be able to originate new loan products or maintain
credit quality at
8
<PAGE> 12
previously attained levels. This may negatively affect our net finance income
and levels of non-performing assets and net charge-offs. Changes in market
interest rates, or in the relationships between various interest rates, could
cause our interest margins to vary and may result in significant changes in the
prepayment patterns of our finance receivables, which could adversely affect our
results of operations and financial condition.
OUR LOSS RESERVES MAY PROVE TO BE INADEQUATE
Our property and casualty insurance subsidiaries are required to maintain
reserves to cover their ultimate liability for losses and loss adjustment
expense ("LAE") with respect to reported and unreported claims incurred as of
the end of each accounting period. These reserves do not represent an exact
calculation of liabilities, but instead are estimates involving actuarial
projections at a given time of what we expect the ultimate settlement and
administration of claims will cost. These projections are based on facts and
circumstances then known, predictions of future events, estimates of future
trends in claims frequency and severity, and judicial theories of liability, as
well as other factors. Establishment of appropriate reserves is an inherently
uncertain process and we cannot assure you that our currently established
reserves will prove to be adequate in light of subsequent actual experience. Our
future loss development could require us to increase loss reserves from prior
periods, which would adversely affect our earnings in future periods.
Our financial services businesses maintain reserves for credit losses on
their portfolio of finance receivables in amounts that we believe are sufficient
to provide adequate protection against potential losses. We attempt to minimize
the impact that adverse economic developments could have on our finance
receivables portfolio by concentrating primarily on lending on a senior and
secured basis and by carefully monitoring the underlying collateral that secures
these loans. Although we believe that our consolidated level of reserves is
sufficient to cover potential credit losses, our reserves could prove to be
inadequate due to unanticipated adverse changes in economic conditions or
discrete events that adversely affect specific borrowers, industries or markets.
Any of these changes could impair our ability to realize the expected value of
the collateral securing certain of our finance receivables.
COMPETITION MAY ADVERSELY AFFECT OUR MARKET SHARE AND OPERATING RESULTS
Our insurance services business competes in a market characterized by
competition on the basis of price and service. In addition, state regulatory
changes could affect competition in the states where we transact business.
Although we are one of the largest writers of workers' compensation insurance in
the nation, certain of our competitors are larger and have greater resources
than we do. We cannot assure you that we will continue to maintain our market
share in the future.
Our financial services businesses compete in markets that are highly
competitive and are characterized by factors that vary based upon product and
geographic region. The markets in which we compete are typically characterized
by a large number of competitors who compete based primarily upon price, terms
and loan structure. We primarily compete with banks and mortgage and finance
companies, many of which are larger and have greater financial resources than we
do. The competitive forces of these markets could adversely affect our net
finance income, loan origination volume or net credit losses.
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<PAGE> 13
REGULATORY DEVELOPMENTS COULD ADVERSELY AFFECT OUR OPERATIONS AND ABILITY TO
MAKE PAYMENTS ON THE NOTES
Our workers' compensation insurance operations are concentrated in
California and Illinois, with additional writings in 37 other states and the
District of Columbia. Insurance companies are subject to supervision and
regulation by the state insurance authority in each state in which they transact
business. Such supervision and regulation relate to the numerous aspects of an
insurance company's business and financial condition. The primary purpose of
such supervision and regulation is the protection of policyholders rather than
investors or stockholders of an issuer. Our multistate insurance operations
require, and will continue to require, us to devote significant resources to
comply with the regulations of each state in which we transact business.
Illinois began operating under an open rating system in 1982 and California
began operating under such a system effective January 1, 1995. In an open rating
system, workers' compensation companies are provided with advisory rates
(expected losses and expenses) or loss costs (expected losses only) which vary
by job classification. Each insurance company determines its own rates based in
part upon its particular loss experience and operating costs. Insurance
companies generally set their premium rates below such advisory premium rates.
Before January 1, 1995, California operated under a minimum rate law, whereby
premium rates established by the California Department of Insurance were the
minimum rates which could be charged by an insurance carrier. The repeal of the
minimum rate law has resulted in lower premiums and profitability on our
California workers' compensation policies due to increased price competition.
Our financial services businesses include a Federal Deposit Insurance
Corporation ("FDIC") insured thrift and loan subject to supervision and
regulation by the California Department of Financial Institutions and the FDIC.
Federal and state regulations prescribe certain minimum capital requirements
and, while our thrift and loan is currently in compliance with such
requirements, in the future we could be required to make additional
contributions to our thrift and loan in order to maintain compliance with such
requirements. Federal and state regulatory authorities have the power to
prohibit or limit the payment of dividends by our thrift and loan. Future
changes in government regulation and policy could adversely affect the thrift
and loan industry, including our thrift and loan.
The payment of stockholder dividends and the advancement of loans to
Fremont General by our subsidiaries are, and may continue to be, subject to
certain statutory and regulatory restrictions and are contingent upon the
earnings and surplus of those subsidiaries.
OUR OPERATIONAL AND DEBT STRUCTURE AFFECTS THE PRIORITY OF THE NOTES
Our assets consist primarily of investments in our subsidiaries. Our
operations are currently conducted through our subsidiaries. Accordingly, our
cash flow and consequent ability to service our debt, including the notes, is
primarily dependent upon the earnings of our subsidiaries and the distribution
of those earnings to us or upon loans or other payments of funds by those
subsidiaries to us. Our subsidiaries are separate and distinct legal entities
and have no obligation, contingent or otherwise, to pay any amounts due pursuant
to the notes, whether by dividends, loans or other payments. In addition, the
payment of dividends and the making of loan advances to us by our subsidiaries
are and may continue to be subject to certain statutory and regulatory
restrictions and various agreements, principally loan agreements, of our
subsidiaries that restrict the ability of the respective subsidiaries to pay
cash dividends or advance loans and other payments to us.
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<PAGE> 14
Furthermore, our rights, and the rights of our creditors to participate in the
distribution of assets of any subsidiary upon such subsidiary's liquidation or
reorganization will be effectively subordinated to all existing and future
liabilities, including any subordinated debt and trade payables, of our
subsidiaries, except to the extent that Fremont General is itself recognized as
a creditor of such subsidiary, in which case the claims of Fremont General would
still be subordinate to any secured claims in the assets of such subsidiary and
any indebtedness of such subsidiary senior to that held by Fremont General.
The notes will constitute unsecured senior indebtedness of Fremont General
and will rank pari passu (equally) with all of our other existing and future
unsubordinated unsecured senior indebtedness for borrowed money. The notes will
be effectively subordinated to all of our secured indebtedness with respect to
the assets securing such indebtedness, and the notes will be effectively
subordinated to all liabilities of our subsidiaries, including trade payables.
See "Description of the Notes -- Ranking and Holding Company Structure."
THERE IS NO PUBLIC MARKET FOR THE SECURITIES
The exchange notes will be a new issue of securities for which there
currently is no market. We cannot assure you that a trading market will develop
for any of the exchange notes. The exchange notes may trade at a discount from
the initial offering price of the initial notes, depending upon prevailing
interest rates, the market for similar securities, our financial condition and
other factors beyond our control, including general economic conditions. We do
not intend to apply for listing of the exchange notes on any securities exchange
or for quotation through The Nasdaq Stock Market.
IF OUR CRITICAL COMPUTER SYSTEMS ARE NOT YEAR 2000 COMPLIANT, OUR FINANCIAL
RESULTS COULD BE ADVERSELY AFFECTED
Many existing computer programs use only two digits to identify a specific
year and therefore may not accurately recognize the upcoming change in the
century. If not corrected, many computer applications could fail or create
erroneous results by or at the year 2000. Due to the dependence of our insurance
services and financial services businesses on computer technology to operate
their businesses, and the dependence of the insurance and financial services
industries on computer technology, the nature and impact of Year 2000 processing
failures on our business could be material. We are currently modifying our
computer systems in order to enable our systems to process data and transactions
incorporating Year 2000 dates without material errors or interruptions. We
cannot assure you that our Year 2000 compliance efforts will be completed in a
timely manner or that our Year 2000 compliance efforts will be successful even
if they are completed in a timely manner.
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<PAGE> 15
USE OF PROCEEDS
We will not receive any cash proceeds from the exchange offer. In
consideration for issuing the exchange notes as contemplated in this prospectus,
we will receive the initial notes in like principal amount. The initial notes
surrendered in exchange for the exchange notes will be retired and canceled and
cannot be reissued. The issuance of the exchange notes will not result in any
increase in our indebtedness.
Our net proceeds from the offering were $420,236,500, after deducting the
selling discounts and commissions but before deducting estimated offering
expenses. We used the net proceeds of the offering to repay all indebtedness
outstanding under the Fremont General's bank line of credit and for general
corporate purposes, including working capital. Fremont General may reborrow
under its bank line of credit, subject to certain conditions and limitations,
including as set forth under "Description of the Notes -- Certain Covenants." At
December 31, 1998, Fremont General had $300 million outstanding under its bank
line of credit, bearing interest at a weighted average rate of 5.76% per annum.
This line of credit matures on August 1, 2002.
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth our ratio of earnings to fixed charges for
the periods indicated:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
--------------------------------
1998 1997 1996 1995 1994
---- ---- ---- ---- ----
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Ratio of earnings to fixed charges(1).............. 2.17 2.07 2.07 1.94 2.29
</TABLE>
- -------------------------
(1) For purposes of computing the ratio of earnings to fixed charges, "earnings"
consists of net income plus fixed charges and income taxes. "Fixed charges"
consists of interest on indebtedness (including interest on thrift
deposits), the representative interest portion of operating leases (deemed
to be one-third of all rental expense) and the amortization of debt issuance
costs. Included in "interest on indebtedness" are the distributions on the
Fremont General-obligated mandatorily redeemable preferred securities of the
TOPrS Trust.
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<PAGE> 16
THE EXCHANGE OFFER
The following summary of certain provisions of the registration rights
agreement does not purport to be complete. The following discussion is qualified
in its entirety by reference to the registration rights agreement, which has
been filed as an exhibit to the registration statement.
PURPOSE OF THE EXCHANGE OFFER
Upon the issuance of the initial notes under the purchase agreement, the
initial purchasers and their respective assignees became entitled to the
benefits of the registration rights agreement. Under the registration rights
agreement, we are required to:
- use reasonable best efforts to cause the registration statement to
declared effective no later than 150 days after the date the initial
notes were issued,
- keep the exchange offer open for not less than 30 days (or longer if
required by applicable law) after we notify holders of the notes of the
exchange offer, and
- use reasonable best efforts to complete the exchange offer as soon as
practicable, but no later than 180 days after the date on which we issued
the initial notes.
The exchange offer being made by this prospectus is intended to satisfy our
obligations under the registration rights agreement. If we fail to fulfill such
obligations, you, as a holder of outstanding initial notes, are entitled to
receive "Additional Interest" until we have fulfilled such obligations, at the
rate of 0.25%, which rate will increase by an additional 0.25% at the beginning
of each 90-day period that we must pay Additional Interest, provided that any
such increase in the interest rate may not exceed 1.0%. All amounts of accrued
Additional Interest will be payable in cash on the same interest payment dates
as the notes.
EFFECT OF THE EXCHANGE OFFER
Based on interpretations by the SEC staff contained in no-action letters
issued to third parties, we believe that you may offer for resale, resell and
otherwise transfer the exchange notes issued to you under the exchange offer
without compliance with the registration and prospectus delivery provisions of
the Securities Act, provided that you can represent that:
- you are acquiring the exchange notes in the ordinary course of your
business;
- you have no arrangements or understandings with any person to participate
in the exchange offer for the purpose of distributing the exchange notes;
and
- you are not an "affiliate" (as defined in Rule 405 of the Securities Act)
of ours.
If you are not able to make these representations, you are a "Restricted
Holder." As a Restricted Holder, you will not be able to participate in the
exchange offer, may not rely on the SEC staff positions set forth in the Exxon
Capital Holdings Corporation no-action letter and similar no-action letters and
may only sell your initial notes as part of a registration statement containing
the selling security holder information required by Item 507 of SEC Regulation
S-K, or under an exemption from the registration requirement of the Securities
Act.
In addition, each broker-dealer (other than a Restricted Holder) that
receives exchange notes for its own account in exchange for initial notes which
were acquired by such broker-dealer as a result of market-making or other
trading activities (a "Participating Broker-Dealer") may be a statutory
underwriter and must acknowledge in the letter of transmittal that it will
deliver a prospectus meeting the requirements of the Securities Act upon any
resale of such exchange notes. The letter of transmittal states that by so
acknowledging and by delivering a prospectus, a broker-dealer will not be deemed
to admit
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<PAGE> 17
that it is an "underwriter" within the meaning of the Securities Act. Based upon
interpretations by the SEC staff, we believe that a Participating Broker-Dealer
may offer for resale, resell and otherwise transfer exchange notes issued under
the exchange offer upon compliance with the prospectus delivery requirements,
but without compliance with the registration requirements, of the Securities
Act. This prospectus, as it may be amended or supplemented from time to time,
may be used by a Participating Broker-Dealer as part of their resales. We have
agreed that, for a period of 90 days after the completion of the exchange offer,
we will make this prospectus available to any broker-dealer for use by the
broker-dealer in any resale. By acceptance of this exchange offer, each
broker-dealer that receives exchange notes under the exchange offer agrees to
notify us prior to using this prospectus in a sale or transfer of exchange
notes. See "Plan of Distribution."
To the extent initial notes are tendered and accepted in the exchange
offer, the principal amount of outstanding initial notes will decrease with a
resulting decrease in the liquidity in the market for the initial notes. Initial
notes that are still outstanding following the completion of the exchange offer
will continue to be subject to transfer restrictions.
TERMS OF THE EXCHANGE OFFER
Upon the terms and subject to the conditions contained in this prospectus
and in the letter of transmittal, we will accept any and all initial notes
validly tendered and not withdrawn prior to 5:00 p.m., New York City time, on
the expiration date. As of the date of this prospectus, an aggregate of $425
million principal amount of the initial notes is outstanding. We will issue
$1,000 principal amount at maturity of exchange notes in exchange for each
$1,000 principal amount at maturity of outstanding initial notes accepted in the
exchange offer. Holders may tender some or all of their initial notes under the
exchange offer. However, initial notes may be tendered only in integral
multiples of $1,000.
The form and terms of the exchange notes will be substantially identical to
the form and terms of the initial notes, except that:
- the offering of the exchange notes has been registered under the Act;
- the exchange notes will not be subject to transfer restrictions;
- the exchange notes will be issued free of any covenants regarding
registration rights and free of any provision for Additional Interest;
and
- the exchange notes will evidence the same debt as the initial notes and
will be entitled to the benefits of the indenture under which initial
notes were, and the exchange notes will be, issued.
You do not have any appraisal or dissenters rights under law or the
indenture in the exchange offer. We intend to conduct the exchange offer in
accordance with the applicable requirements of the Exchange Act.
We will be deemed to have accepted validly tendered initial notes when, as
and if we have given oral notice, promptly confirmed in writing, or written
notice of the acceptance to the exchange agent. The exchange agent will act as
agent for the tendering holders for the purpose of receiving the exchange notes
from us.
If we do not accept for exchange any tendered initial notes because of an
invalid tender, the occurrence of other events described in this prospectus or
otherwise, certificates for any such unaccepted initial notes will be returned
to you, without expense, as promptly as practicable after the expiration date.
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<PAGE> 18
If you tender initial notes in the exchange offer, you will not be required
to pay brokerage commissions or fees or, subject to the instructions in the
letter of transmittal, transfer taxes relating to the exchange of initial notes
under the exchange offer. We will pay all charges and expenses, other than
underwriting discounts and commissions and transfer taxes, as part of the
exchange offer. See "-- Fees and Expenses."
EXPIRATION DATE; EXTENSIONS; AMENDMENTS
The term "expiration date" means 5:00 p.m., New York City time, on
1999, unless we, in our sole discretion, extend the exchange
offer, in which case the term "expiration date" shall mean the latest date and
time to which the exchange offer is extended.
In order to extend the exchange offer, we will notify the exchange agent of
any extension by oral notice (promptly confirmed in writing) or written notice
and will make a public announcement thereof, each prior to 9:00 a.m., New York
City time, on the next business day after the previously scheduled expiration
date unless otherwise required by applicable law or regulation.
We have the right, in our reasonable discretion, (1) to delay accepting any
initial notes, to extend the exchange offer or, if any of the conditions set
forth below under "Conditions" shall not have been satisfied, to terminate the
exchange offer, by giving oral or written notice of such delay, extension or
termination to the exchange agent, or (2) to amend the terms of the exchange
offer in any manner. Any such delay in acceptance, extension, termination or
amendment will be followed as promptly as practicable by a public announcement.
If we believe that we have made a material amendment of the terms of the
exchange offer, we will promptly disclose such amendment in a manner reasonably
calculated to inform the holders of the notes of such amendment and we will
extend the exchange offer to the extent required by law.
Without limiting the manner in which we may choose to make public
announcement of any delay, extension, termination or amendment of the exchange
offer, we shall have no obligation to publish, advertise or otherwise
communicate any such public announcement, other than by making a timely release
to the Dow Jones News Service.
PROCEDURES FOR TENDERING
Only a holder of initial notes may tender the initial notes in the exchange
offer. To tender in the exchange offer, a holder must complete, sign and date
the letter of transmittal, have the signatures thereon guaranteed if required by
the letter of transmittal, and mail or otherwise deliver such letter of
transmittal, together with the initial notes (or a confirmation of an
appropriate book-entry transfer into the exchange agent's account at The
Depository Trust Company ("DTC" or the "Depositary")) and any other required
documents, to the exchange agent prior to 5:00 p.m., New York City time, on the
expiration date. To be tendered effectively, the initial notes (or a timely
confirmation of a book-entry transfer of such initial notes into the exchange
agent's account at DTC as described below), letter of transmittal and other
required documents must be received by the exchange agent at the address listed
below under "Exchange Agent" prior to 5:00 p.m., New York City time, on the
expiration date.
The tender by a holder will constitute an agreement between such holder and
us in accordance with the terms and subject to the conditions described in this
prospectus and in the letter of transmittal.
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<PAGE> 19
Any financial institution which is a participant in DTC may make book-entry
delivery of the initial notes by causing DTC to transfer the initial notes into
the exchange agent's account and to deliver an Agent's Message (as defined
below) on or prior to the expiration date in accordance with DTC's procedure for
such transfer.
Although delivery of initial notes may be effected through book-entry
transfer into the exchange agent's account at DTC, the letter of transmittal,
with any required signature guarantees and any other required documents, must in
any case be transmitted to and received by the exchange agent prior to 5:00
p.m., New York City time, on the expiration date at one of its addresses listed
below under "Exchange Agent," or the guaranteed delivery procedure described
below must be complied with. DELIVERY OF DOCUMENTS TO DTC IN ACCORDANCE WITH ITS
PROCEDURES DOES NOT CONSTITUTE DELIVERY TO THE EXCHANGE AGENT. All references in
this prospectus to deposit or delivery of initial notes shall be deemed to
include DTC's book-entry delivery method.
The method of delivery of initial notes and the letter of transmittal and
all other required documents to the exchange agent, including delivery through
DTC, is at the election and risk of the holder. Instead of delivery by mail, we
recommend that holders use an overnight or hand delivery service. If initial
notes are sent by mail, registered mail with return receipt requested, properly
insured, is recommended. In all cases, sufficient time should be allowed to
assure delivery to the exchange agent before the expiration date. No letter of
transmittal or initial notes should be sent to us.
Holders may request their respective brokers, dealers, commercial banks,
trust companies or nominees to effect the above transactions for such holders.
Any beneficial owner whose initial notes are registered in the name of a
dealer, commercial bank, trust company or other nominee and who wishes to tender
initial notes should contact the registered holder promptly and instruct such
registered holder to tender on such beneficial owner's behalf. If such
beneficial owner wishes to tender on such owner's own behalf, such owner must,
prior to completing and executing the letter of transmittal and delivering such
owner's initial notes, either make appropriate arrangements to register
ownership of the initial notes in such owner's name or obtain a properly
completed bond power from the registered holder. The transfer of registered
ownership may take considerable time.
Signatures on a letter of transmittal or a notice of withdrawal, as the
case may be, must be guaranteed by an Eligible Institution (as defined below)
unless the initial notes are tendered (1) by a registered holder who has not
completed the box entitled "Special Issuance Instructions" or "Special Delivery
Instructions" on the letter of transmittal or (2) for the account of an Eligible
Institution. In the event that signatures on a letter of transmittal or a notice
of withdrawal, as the case may be, are required to be guaranteed, such guarantee
must be by a member firm of a registered national securities exchange or of the
National Association of Securities Dealers, Inc., a commercial bank or trust
company having an office or correspondent in the United States or an "eligible
guarantor institution" within the meaning of Rule 17Ad-15 under the Exchange Act
(an "Eligible Institution").
If the letter of transmittal or any initial notes or bond powers are signed
by trustees, executors, administrators, guardians, attorneys-in-fact, officers
of corporations or others acting in a fiduciary or representative capacity, such
persons should so indicate when
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<PAGE> 20
signing, and unless waived by us, proper evidence satisfactory to us of their
authority to so act must be submitted with the letter of transmittal.
All questions as to the validity, form, eligibility (including time of
receipt), acceptance and withdrawal of tendered initial notes will be determined
by us in our sole discretion, which determination will be final and binding. We
reserve the absolute right to reject any and all initial notes not properly
tendered or any initial notes our acceptance of which would, in the opinion of
our counsel, be unlawful. We also reserve the right to waive any defects,
irregularities or conditions of tender as to particular initial notes. Our
interpretation of the terms and conditions of the exchange offer (including the
instructions in the letter of transmittal) will be final and binding on all
parties. Unless waived, any defects or irregularities in connection with tenders
of initial notes must be cured within such time as we shall determine. Although
we intend to notify holders of defects or irregularities with respect to tenders
of initial notes, neither we nor the exchange agent nor any other person shall
incur any liability for failure to give such notification. Tenders of initial
notes will not be deemed to have been made until such defects or irregularities
have been cured or waived. Any initial notes received by the exchange agent that
are not properly tendered and as to which the defects or irregularities have not
been cured or waived will be returned by the exchange agent to the tendering
holders (or, in the case of initial notes delivered by book-entry transfer
within DTC, will be credited to the account maintained within DTC by the
participant in DTC which delivered such initial notes), unless otherwise
provided in the letter of transmittal, as soon as practicable following the
expiration date.
In addition, we reserve the right in our sole discretion (a) to purchase or
make offers for any initial notes that remain outstanding subsequent to the
expiration date, (b) as set forth below under "Conditions," to terminate the
exchange offer and (c) to the extent permitted by applicable law, purchase
initial notes in the open market, in privately negotiated transactions or
otherwise. The terms of any such purchases or offers could differ from the terms
of the exchange offer.
By tendering, each holder will represent to us that, among other things,
such holder is not a Restricted Holder. In addition, each Participating
Broker-Dealer must acknowledge that it will deliver a prospectus as part of any
resale of exchange notes.
BOOK-ENTRY TRANSFER
The exchange agent will establish a new account or utilize an existing
account with respect to the initial notes at DTC promptly after the date of this
prospectus, and any financial institution that is a participant in DTC and whose
name appears on a security position listing as the owner of initial notes may
make a book-entry tender of initial notes by causing DTC to transfer such
initial notes into the exchange agent's account in accordance with DTC's
procedures for such transfer. However, although tender of initial notes may be
effected through book-entry transfer at DTC, the letter of transmittal, properly
completed and validly executed, with any required signature guarantees, or an
Agent's Message in lieu of the letter of transmittal, and any other required
documents, must, in any case, be received by the exchange agent at its address
listed below under the caption "Exchange Agent" on or prior to the expiration
date, or the guaranteed delivery procedures described below must be complied
with. The confirmation of book-entry transfer of initial notes into the exchange
agent's account at DTC as described above is referred to in this prospectus as a
"Book-Entry Confirmation." Delivery of documents to
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<PAGE> 21
DTC in accordance with DTC's procedures does not constitute delivery to the
exchange agent.
The term "Agent's Message" means a message transmitted by DTC to, and
received by, the exchange agent and forming a part of a Book-Entry Confirmation,
which states that DTC has received an express acknowledgment from the
participant in DTC tendering initial notes stating (1) the aggregate principal
amount of initial notes which have been tendered by such participant, (2) that
such participant has received and agrees to be bound by the terms of the letter
of transmittal and (3) that we may enforce such agreement against the
participant.
GUARANTEED DELIVERY PROCEDURES
Holders who wish to tender their initial notes and (1) whose initial notes
are not immediately available or (2) who cannot deliver their initial notes (or
a confirmation of book-entry transfer of initial notes into the exchange agent's
account at DTC), the letter of transmittal or any other required documents to
the exchange agent prior to the expiration date or (3) who cannot complete the
procedure for book-entry transfer on a timely basis, may effect a tender if:
- the tender is made by or through an Eligible Institution;
- prior to the expiration date, the exchange agent receives from such
Eligible Institution a properly completed and duly executed Notice of
Guaranteed Delivery (by facsimile transmission, mail or hand delivery)
listing the name and address of the holder of the initial notes and the
principal amount of initial notes tendered, stating that the tender is
being made thereby and guaranteeing that, within three New York Stock
Exchange, Inc. trading days after the expiration date, a duly executed
letter of transmittal together with the initial notes (or a confirmation
of book-entry transfer of such initial notes into the exchange agent's
account at DTC), and any other documents required by the letter of
transmittal and the instructions thereto, will be deposited by such
Eligible Institution with the exchange agent; and
- the properly completed and executed letter of transmittal, and all
tendered initial notes in proper form for transfer (or a confirmation of
book-entry transfer of such initial notes into the exchange agent's
account at DTC) and all other documents required by the letter of
transmittal are received by the exchange agent within three New York
Stock Exchange, Inc. trading days after the expiration date.
Upon request to the exchange agent, a Notice of Guaranteed Delivery will be
sent to holders who wish to tender their initial notes according to the
guaranteed delivery procedures described above.
WITHDRAWAL OF TENDERS
Except as otherwise provided herein, tenders of initial notes may be
withdrawn at any time prior to 5:00 p.m., New York City time, on the expiration
date.
To withdraw a tender of initial notes in the exchange offer, a written or
facsimile transmission notice of withdrawal must be received by the exchange
agent at its address listed in this prospectus prior to 5:00 p.m., New York City
time, on the expiration date. Any notice of withdrawal must: (1) specify the
name of the person having deposited the initial notes to be withdrawn (the
"Depositor"), (2) identify the initial notes to be withdrawn (including the
certificate number or numbers and principal amount of such initial notes), (3)
be signed by the holder in the same manner as the original signature on
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<PAGE> 22
the letter of transmittal by which the initial notes were tendered (including
any required signature guarantees) or be accompanied by documents of transfer
sufficient to have the trustee with respect to the initial notes register the
transfer of the initial notes into the name of the person withdrawing the tender
and (4) specify the name in which any initial notes are to be registered if
different from that of the Depositor. If the initial notes have been delivered
under the book-entry procedure set forth above under "-- Procedures for
Tendering," any notice of withdrawal must specify the name and number of the
participant's account at DTC to be credited with the withdrawn initial notes.
All questions as to the validity, form and eligibility (including time of
receipt) of such notices will be determined by us in our sole discretion, which
determination shall be final and binding on all parties. Any initial notes so
withdrawn will be deemed not to have been validly tendered for purposes of the
exchange offer and no exchange notes will be issued with respect thereto unless
the initial notes so withdrawn are validly retendered. Properly withdrawn
initial notes may be retendered by following one of the procedures described
above under "-- Procedures for Tendering" at any time prior to the expiration
date.
Any initial notes that are tendered but not accepted due to withdrawal,
rejection of tender or termination of the exchange offer will be returned as
soon as practicable to the holder without cost to the holder (or, in the case of
initial notes tendered by book-entry transfer into the exchange agent's account
at the book-entry transfer facility under the book-entry transfer procedures
described above, these initial notes will be credited to an account maintained
with such book-entry transfer facility for the initial notes).
CONDITIONS
Notwithstanding any other term of the exchange offer, we are not required
to accept for exchange any initial notes, and may terminate the exchange offer
as provided in this prospectus before the acceptance of any initial notes, if:
- the exchange offer will violate applicable law or any applicable
interpretation of the SEC Staff; or
- the initial notes or not tendered in accordance with the exchange offer;
or
- you do not represent that you are acquiring the exchange notes in the
ordinary course of your business, and that you have no arrangement or
understanding with any person to participate in a distribution of the
exchange notes; or
- any action or proceeding is instituted or threatened in any court or by
before any governmental agency with respect to the exchange offer which,
in our judgment, would reasonably be expected to impair our ability to
proceed with the exchange offer.
These conditions are for our sole benefit and may be asserted by us
regardless of the circumstances giving rise to any such condition or may be
waived by us in whole or in part at any time and from time to time in our
reasonable discretion. Our failure at any time to exercise any of the foregoing
rights shall not be deemed a waiver of the right and each right shall be deemed
an ongoing right which may be asserted at any time and from time to time.
If we determine in our reasonable judgment that any of the conditions are
not satisfied, we may (1) refuse to accept any initial notes and return all
tendered initial notes to the tendering holders (or, in the case of initial
notes delivered by book-entry transfer within DTC, credit any initial notes to
the account maintained within DTC by the
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participant in DTC which delivered the notes), (2) extend the exchange offer and
retain all initial notes tendered prior to the expiration of the exchange offer,
subject, however, to the rights of holders to withdraw the tenders of initial
notes (see "Withdrawal of Tenders" above) or (3) waive the unsatisfied
conditions with respect to the exchange offer and accept all properly tendered
initial notes which have not been withdrawn. If a waiver constitutes a material
change to the exchange offer, we will promptly disclose the waiver by means of a
prospectus supplement that will be distributed to the registered holders, and we
will extend the exchange offer for a period of five to ten business days,
depending upon the significance of the waiver and the manner of disclosure to
the registered holders, if the exchange offer would otherwise expire during such
five to ten business day period.
EXCHANGE AGENT
First Chicago Trust Company of New York has been appointed as exchange
agent for the exchange offer. Questions and requests for assistance and
inquiries for additional copies of this prospectus or of the letter of
transmittal should be directed to the exchange agent addressed as follows:
FIRST CHICAGO TRUST COMPANY OF NEW YORK
<TABLE>
<S> <C>
BY MAIL: BY FACSIMILE:
First Chicago Trust Company of New York (for eligible institutions only)
Corporate Actions Department (201) 222-4720
P.O. Box 2569 (201) 222-4721
Jersey City, NJ 07303 Confirm facsimile transmission by
(registered or certified mail telephone only
recommended) (201) 222-4707
BY OVERNIGHT DELIVERY: BY HAND DELIVERY:
First Chicago Trust Company of New York First Chicago Trust Company of New York
14 Wall Street c/o Securities Transfer and Reporting
8th Floor, Suite 4680 Services, Inc.
New York, NY 10005 100 William Street, Galleria
New York, NY 10038
</TABLE>
DELIVERY OF THE LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET FORTH
ABOVE OR TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE OTHER THAN AS SET FORTH
ABOVE DOES NOT CONSTITUTE A VALID DELIVERY OF SUCH LETTER OF TRANSMITTAL.
FEES AND EXPENSES
We will pay expenses of soliciting tenders. The principal solicitation is
being made by mail; however, additional solicitation may be made by facsimile,
telephone or in person by our officers and regular employees.
We have not retained any dealer-manager as part of the exchange offer and
will not make any payments to brokers, dealers or others soliciting acceptance
of the exchange offer. We will, however, pay the exchange agent reasonable and
customary fees for services and will reimburse it for its reasonable
out-of-pocket expenses under the exchange offer. We will also pay the reasonable
fees and expenses of one firm acting as counsel for the initial purchasers.
Expenses include fees and expenses of the exchange agent and trustee, accounting
and legal fees and printing costs, among others.
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TRANSFER TAXES
You must pay all transfer taxes, if any, applicable to the exchange of
initial notes under the exchange offer. If satisfactory evidence of payment of
the taxes or exemption therefrom is not submitted with the letter of
transmittal, the amount of the transfer taxes will be billed directly to you.
ACCOUNTING TREATMENT
The exchange notes will be recorded at the same carrying value as the
initial notes on the date of the exchange. Accordingly, we will recognize no
gain or loss for accounting purposes. The expenses of the exchange offer and the
unamortized expenses relating to the issuance of the initial notes will be
amortized over the term of the exchange notes.
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DESCRIPTION OF THE NOTES
The initial notes were issued under the indenture and the exchange notes
will be issued under the same indenture. The initial notes and the exchange
notes due 2004 have substantially identical terms and will constitute a single
series of debt securities under the indenture. The initial notes and the
exchange notes due 2009 also have substantially identical terms and will
constitute an additional series of debt securities under the indenture. If the
exchange offer is completed, holders of any remaining initial notes will vote
together with holders of the applicable exchange notes for all relevant purposes
under the indenture.
The following summary of certain provisions of the indenture does not
purport to be complete and is qualified in its entirety by reference to the
indenture, which is filed as an exhibit to the Registration Statement of which
this prospectus is a part. Capitalized terms used and not otherwise defined in
this prospectus shall have the meanings ascribed to such terms in the indenture.
GENERAL
The indenture does not limit the aggregate principal amount of senior debt
securities that may be issued thereunder and provides that senior debt
securities may be issued under the indenture from time to time in one or more
series. The senior debt securities that may be issued under the indenture
(including the notes) are collectively referred to in this prospectus as the
"Securities."
The notes due 2004 and the notes due 2009 constitute two series of
Securities under the indenture. The initial notes and the exchange notes are
collectively referred to in this prospectus as the "notes." If the exchange
offer is consummated, holders of initial notes who do not exchange their initial
notes for exchange notes will vote together with holders of the exchange notes
of such series as one series of Securities for all relevant purposes under the
indenture. In that regard, the indenture requires that certain actions by the
holders thereunder (including acceleration following an Event of Default) must
be taken, and certain rights must be exercised, by specified minimum percentages
of the aggregate principal amount of the outstanding debt securities of the
relevant series. In determining whether holders of the requisite percentage in
principal amount have given any notice, consent or waiver or taken any other
action permitted under the indenture, any initial notes which remain outstanding
after the exchange offer will be aggregated with the exchange notes of such
series and the holders of such initial notes and the exchange notes will vote
together as a single series for all such purposes. Accordingly, all references
in this section to specified percentages in aggregate principal amount of the
outstanding notes means, at any time after the exchange offer is consummated,
such percentages in aggregate principal amount of the initial notes and the
exchange notes of each series then outstanding.
The notes will be unsecured senior obligations of Fremont General and will
be initially limited to an aggregate principal amount of $425 million. Fremont
General may "reopen" any Note series and issue additional notes. The notes will
bear interest at the rate per annum shown on the cover of this prospectus from
the date of original issuance or from the most recent date to which interest has
been paid or duly provided for, payable semiannually on March 17 and September
17 of each year (each, an "Interest Payment Date"), commencing September 17,
1999, to the persons in whose names the notes are registered at the close of
business on the March 2 or September 2 next preceding such Interest Payment
Date. Interest payable at maturity (or upon any earlier date of redemption) will
be payable to the person to whom principal is payable on such date. Interest on
the notes will be
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<PAGE> 26
calculated on the basis of a 360-day year of twelve 30-day months. The notes Due
2004 and the notes Due 2009 will mature on March 17, 2004 and March 17, 2009,
respectively (each a "Maturity Date"). If any Interest Payment Date, redemption
date or Maturity Date would otherwise be a day that is not a business day, the
related payment of principal and interest will be made on the next succeeding
business day as if it were made on the date such payment was due, and no
interest will accrue on the amounts so payable for the period from and after
such date to the next succeeding business day. The notes are not subject to any
sinking fund.
Other than as described below under "-- Certain Covenants," the indenture
does not contain any provision that would limit the ability of Fremont General
to incur indebtedness or to substantially reduce or eliminate Fremont General's
assets or that would afford the holders of the notes protection in the event of
a decline in Fremont General's credit quality or a takeover, recapitalization or
highly leveraged or similar transaction involving Fremont General. In addition,
subject to the limitations set forth under "-- Certain Covenants," Fremont
General may, in the future, enter into certain transactions, such as the sale of
substantially all of its assets or the merger or consolidation of Fremont
General, that would increase the amount of Fremont General's indebtedness or
substantially reduce or eliminate Fremont General's assets, which may have an
adverse effect on Fremont General's ability to service its indebtedness,
including the notes.
Each Note will be issued in book-entry form (a "book-entry note") or in
fully registered form (a "certificated note") in either case in minimum
denominations of $1,000 and integral multiples thereof. Each book-entry note
will be represented by one or more global notes in fully registered form (the
"global notes") registered in the name of The Depository Trust Company ("DTC" or
the "Depositary") or its nominee. Beneficial interest in the global notes will
be shown on, and transfers thereof will be effected only through, records
maintained by DTC and its participants. See "-- Form, Denomination and
Registration." Except in the limited circumstances described herein, book-entry
notes will not be exchangeable for certificated notes.
Book-entry notes may be transferred or exchanged only through the
Depositary. See "-- Form, Denomination and Registration." Registration of
transfer or exchange of certificated notes will be made at the office or agency
maintained by the Company for such purpose in the Borough of Manhattan, The City
of New York, currently the office of the Trustee at 14 Wall Street, 8th Floor,
New York, New York 10005. No service charge will be made by Fremont General or
the Trustee for any such registration of transfer or exchange of notes, but
Fremont General may require payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed in connection therewith (other
than exchanges pursuant to the indenture not involving any transfer).
Payments of principal, and premium, if any, and interest, if any, on
book-entry notes will be made by the Company through the Trustee to the
Depositary. See "-- Form, Denomination and Registration." In the case of
certificated notes, payment of principal and premium, if any, due on the
Maturity Date will be made in immediately available funds upon presentation and
surrender thereof at the office or agency maintained by Fremont General for such
purpose at the Borough of Manhattan, The City of New York, currently the office
of the Trustee at 14 Wall Street, 8th Floor, New York, New York 10005. Payment
of interest, if any, due on the Maturity Date of a certificated note will be
made to the person to whom payment of the principal thereof and premium, if any,
thereon shall be made. Payment of interest, if any, due on a certificated note
on any Interest Payment Date other than the Maturity Date will be made by check
mailed to the
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address of the holder entitled thereto as such address shall appear in the
security register of Fremont General. Notwithstanding the foregoing, a holder of
$10 million or more in aggregate principal amount of certificated notes (whether
having identical or different terms and provisions) will be entitled to receive
interest payments, if any, on any Interest Payment Date other than the Maturity
Date by wire transfer of immediately available funds if appropriate wire
transfer instructions have been received in writing by the Trustee not less than
15 calendar days prior to such Interest Payment Date. Any such wire transfer
instructions received by the Trustee shall remain in effect until revoked by
such holder. Any interest not punctually paid or duly provided for on a
certificated note on any Interest Payment Date other than the Maturity Date will
forthwith cease to be payable to the holder thereof as of the close of business
on the related Record Date and may either be paid (i) to the person in whose
name such certificated note is registered at the close of business on a special
record date for the payment of such defaulted interest that is fixed by Fremont
General, written notice whereof shall be given to the holders of the notes not
less than 30 calendar days prior to such special record date, or (ii) at any
time in any other lawful manner.
All moneys paid by Fremont General to the Trustee or any Paying Agent for
the payment of principal of, and premium and interest on, any Note which remain
unclaimed for two years after such principal, premium or interest shall have
become due and payable may be repaid to Fremont General and thereafter the
holder of such Note shall look only to Fremont General for payment thereof.
RANKING AND HOLDING COMPANY STRUCTURE
The notes will be unsecured senior indebtedness of Fremont General ranking
equally with Fremont General's existing and future unsubordinated unsecured
indebtedness and senior in right of payment to all subordinated indebtedness of
Fremont General. The notes will be effectively subordinated to all secured
indebtedness of Fremont General with respect to the assets securing such
indebtedness and will be effectively subordinated to all liabilities of Fremont
General's subsidiaries, including trade payables. The indenture does not limit
the aggregate amount of indebtedness that may be incurred by Fremont General or
its subsidiaries. As of December 31, 1998, Fremont General had approximately
$331 million of indebtedness and other liabilities that would have been senior
or pari passu (equal) to the notes outstanding. As of the same date, there was
approximately $553 million of indebtedness and other liabilities (not including
thrift deposits, inter-company borrowings, insurance reserves or obligations or
liabilities incurred in connection with asset securitizations) of Fremont
General's subsidiaries that would be structurally senior to the notes. On a pro
forma basis, assuming that the net proceeds from the offering of the initial
notes had been applied on such date, Fremont General would have had
approximately $31 million of such indebtedness and other liabilities
outstanding, excluding the initial notes.
Fremont General's assets consist primarily of investments in its
subsidiaries. Fremont General's operations are currently conducted through its
subsidiaries. Accordingly, Fremont General's cash flow and consequent ability to
service its debt, including the notes, is primarily dependent upon the earnings
of its subsidiaries and the distribution of those earnings to Fremont General or
upon loans or other payments of funds by those subsidiaries to Fremont General.
Fremont General's subsidiaries are separate and distinct legal entities and have
no obligation, contingent or otherwise, to pay any amounts due pursuant to the
notes, whether by dividends, loans or other payments. In addition, the payment
of dividends and the making of loan advances to Fremont General by its
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subsidiaries are and may continue to be subject to certain statutory and
regulatory restrictions and various agreements, principally loan agreements, of
Fremont General's subsidiaries that restrict the ability of the respective
subsidiaries to pay cash dividends or advance loans and other payments to
Fremont General. One of Fremont General's financial services subsidiaries has a
credit facility that presently permits borrowings of up to $438 million.
Furthermore, our rights, and the rights of Fremont General's creditors to
participate in the distribution of assets of any subsidiary upon such
subsidiary's liquidation or reorganization will be effectively subordinated to
all existing and future liabilities, including any subordinated debt and trade
payables, of Fremont General's subsidiaries, except to the extent that Fremont
General is itself recognized as a creditor of such subsidiary, in which case the
claims of Fremont General would still be subordinate to any secured claims in
the assets of such subsidiary and any indebtedness of such subsidiary senior to
that held by Fremont General.
Fremont General's secured debt consists primarily of its indebtedness under
the Chase Credit Agreement (as defined below under "-- Certain Definitions").
Although the notes will rank equally in right of payment with indebtedness
outstanding under the Chase Credit Agreement, the indebtedness represented by
the Chase Credit Agreement is secured by a pledge of the stock of Fremont
General's principal insurance subsidiary. The notes are unsecured and therefore
do not have the benefit of such collateral. As described under "Use of
Proceeds," Fremont General used the net proceeds from the offering to repay all
outstanding borrowings under the Chase Credit Agreement, although Fremont
General may reborrow thereunder, subject to certain conditions and limitations,
including as set forth below under "-- Certain Covenants."
OPTIONAL REDEMPTION
Each of the notes will be redeemable at the option of Fremont General, in
whole at any time or in part from time to time, at a redemption price equal to
the greater of (i) 100% of their principal amount and (ii) the sum, as
determined by the Independent Investment Banker, of the present values of the
principal amount and the remaining scheduled payments of interest on the notes
to be redeemed, discounted from its scheduled payment dates to the redemption
date on a semiannual basis (assuming a 360-day year consisting of twelve 30-day
months) at the Adjusted Treasury Rate, plus accrued but unpaid interest thereon
to the redemption date.
NOTICE OF ANY REDEMPTION MUST BE GIVEN AT LEAST 30 DAYS BUT NOT MORE THAN
60 DAYS BEFORE THE REDEMPTION DATE TO EACH REGISTERED HOLDER OF NOTES TO BE
REDEEMED. IF MONEY SUFFICIENT TO PAY THE REDEMPTION PRICE OF AND ACCRUED
INTEREST ON ALL OF THE NOTES (OR PORTION THEREOF), TO BE REDEEMED ON THE
REDEMPTION DATE IS DEPOSITED WITH THE TRUSTEE OR A PAYING AGENT ON OR BEFORE THE
REDEMPTION DATE AND CERTAIN OTHER CONDITIONS ARE SATISFIED, THEN ON AND AFTER
SUCH DATE, INTEREST WILL CEASE TO ACCRUE ON SUCH NOTES (OR SUCH PORTION
THEREOF), CALLED FOR REDEMPTION.
"Adjusted Treasury Rate" means, with respect to any redemption date, the
rate per annum equal to the semiannual equivalent yield to maturity of the
Comparable Treasury Issue, calculated on the third business day preceding such
redemption date using a price for the Comparable Treasury Issue (expressed as a
percentage of its principal amount) equal to the Comparable Treasury Price for
such redemption date, plus 50 basis points in the case of both the notes due
2004 and notes due 2009.
"Comparable Treasury Issue" means the United States Treasury security
selected by the Independent Investment Banker as having a maturity comparable to
the remaining
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term of the notes to be redeemed that would be utilized, at the time of
selection and in accordance with customary financial practice, in pricing new
issues of corporate debt securities of comparable maturity to the remaining term
of such notes to be redeemed.
"Comparable Treasury Price" means, with respect to any redemption date, the
average of the Reference Treasury Dealer Quotations for such redemption date,
after excluding the highest and lowest such Reference Treasury Dealer
Quotations, or if the Trustee obtains fewer than four such Reference Treasury
Dealer Quotations, the average of all such Reference Treasury Dealer Quotations.
"Independent Investment Banker" means one of the Reference Treasury Dealers
appointed by the Trustee after consultation with Fremont General.
"Reference Treasury Dealers" means Merrill Lynch Government Securities
Inc., Credit Suisse First Boston Corporation, Goldman, Sachs & Co., and Warburg
Dillon Read LLC and their respective affiliates and successors and any other
primary U.S. Government securities dealers in New York City (each a "Primary
Treasury Dealer") selected by Fremont General in addition to, or in substitution
for, such firms; provided, however, that if any of the foregoing shall cease to
be a Primary Treasury Dealer, Fremont General will substitute another Primary
Treasury Dealer.
"Reference Treasury Dealer Quotations" means, with respect to each
Reference Treasury Dealer and any redemption date, the average, as determined by
the Trustee, of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) quoted in
writing to the Trustee by such Reference Treasury Dealer at 5:00 p.m., New York
City time, on the third business day preceding such redemption date.
FORM, DENOMINATION AND REGISTRATION
So long as the Depositary or its nominee is the registered owner of a
global note, the Depositary or its nominee, as the case may be, will be the sole
holder of the notes represented thereby for all purposes under the indenture.
Except as otherwise provided in this section, the beneficial owners of the
global notes representing the notes will not be entitled to receive physical
delivery of certificated notes and will not be considered the holders thereof
for any purpose under the indenture, and no global note representing the
book-entry notes shall be exchangeable or transferable. Accordingly, each
beneficial owner must rely on the procedures of the Depositary and, if such
beneficial owner is not a Participant (as hereinafter defined), then such
beneficial owner must rely on the procedures of the Participant through which
such beneficial owner owns its interest in order to exercise any rights of a
holder under such global note or the indenture. The laws of some jurisdictions
require that certain purchasers of securities take physical delivery of such
securities in certificated form. Such limits and such laws may impair the
ability to transfer beneficial interests in a global note representing the
notes.
The global notes representing the notes will be exchangeable for
certificated notes of like tenor and terms and of differing authorized
denominations aggregating a like principal amount, only if (i) the Depositary
notifies Fremont General that it is unwilling or unable to continue as
Depositary for the global notes, (ii) the Depositary ceases to be a clearing
agency registered under the Securities Exchange Act, (iii) Fremont General in
its sole discretion determines that the global notes shall be exchangeable for
certificated notes or (iv) there shall have occurred and be continuing an Event
of Default under the indenture with respect to the notes. Upon any such
exchange, the certificated notes shall be
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registered in the names of the beneficial owners of the global notes
representing the notes, which names shall be provided by the Depositary's
relevant Participants (as identified by the Depositary) to the Trustee.
The following is based on information furnished by the Depositary:
The Depositary will act as the securities depositary for the notes.
The notes will be issued as fully registered securities registered in the
name of Cede & Co. (the Depositary's partnership nominee). Fully registered
global notes will be issued for the notes, in the aggregate principal
amount of such issue, and will be deposited with the Depositary.
The Depositary is a limited-purpose trust company organized under the
New York Banking Law, a "banking organization" within the meaning of the
New York Banking Law, a member of the Federal Reserve System, a "clearing
corporation" within the meaning of the New York Uniform Commercial Code,
and a "clearing agency" registered pursuant to the provisions of Section
17A of the Exchange Act. The Depositary holds securities that its
participants ("Participants") deposit with the Depositary. The Depositary
also facilitates the settlement among Participants of securities
transactions, such as transfers and pledges, in deposited securities
through electronic computerized book-entry changes to Participants'
accounts, thereby eliminating the need for physical movement of securities
certificates. Direct Participants of the Depositary ("Direct Participants")
include securities brokers and dealers (including the Initial Purchasers),
banks, trust companies, clearing corporations and certain other
organizations. The Depositary is owned by a number of its Direct
Participants, including the Initial Purchasers and by the New York Stock
Exchange, Inc., the American Stock Exchange, Inc., and the National
Association of Securities Dealers, Inc. Access to the Depositary's system
is also available to others such as securities brokers and dealers, banks
and trust companies that clear through or maintain a custodial relationship
with a Direct Participant, either directly or indirectly ("Indirect
Participants"). The rules applicable to the Depositary and its Participants
are on file with the SEC.
Purchases of notes under the Depositary's system must be made by or
through Direct Participants, which will receive a credit for such notes on
the Depositary's record. The ownership interest of each actual purchaser of
each Note represented by a global note ("Beneficial Owner") is in turn to
be recorded on the Direct and Indirect Participants' records. Beneficial
Owners will not receive written confirmation from the Depositary of their
purchase, but Beneficial Owners are expected to receive written
confirmations providing details of the transaction, as well as periodic
statements of their holdings, from the Direct or Indirect Participants
through which such Beneficial Owner entered into the transaction. Transfers
of ownership interests in the global notes representing the notes are to be
accomplished by entries made on the books of Participants acting on behalf
of Beneficial Owners. Beneficial Owners of the global notes representing
the notes will not receive certificated notes representing their ownership
interests therein, except in the event that use of the book-entry system
for such notes is discontinued.
To facilitate subsequent transfers, all global notes representing the
notes which are deposited with, or on behalf of, the Depositary are
registered in the name of the Depositary's nominee, Cede & Co. The deposit
of global notes with, or on behalf of, the Depositary and their
registration in the name of Cede & Co. will effect no change in beneficial
ownership. The Depositary has no knowledge of the actual Beneficial
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Owners of the global notes representing the notes; the Depositary's records
reflect only the identity of the Direct Participants to whose accounts such
notes are credited, which may or may not be the Beneficial Owners. The
Participants will remain responsible for keeping account of their holdings
on behalf of their customers.
Conveyance of notices and other communications by the Depositary to
Direct Participants, by Direct Participants to Indirect Participants, and
by Direct and Indirect Participants to Beneficial Owners will be governed
by arrangements among them, subject to any statutory or regulatory
requirements as may be in effect from time to time.
Neither the Depositary nor Cede & Co. will consent or vote with
respect to the global notes representing the notes. Under its usual
procedure, the Depositary mails an Omnibus Proxy to Fremont General as soon
as possible after the applicable record date. The Omnibus Proxy assigns
Cede & Co.'s consenting or voting rights to those Direct Participants to
whose accounts the notes are credited on the applicable record date
(identified in a listing attached to the Omnibus Proxy).
Principal, premium, if any, and/or interest, if any, payments on the
global notes representing the notes will be made to the Depositary. The
Depositary's practice is to credit Direct Participants' accounts on the
applicable payment date in accordance with their respective holdings shown
on the Depositary's records unless the Depositary has reason to believe
that it will not receive payment on such date. Payments by Participants to
Beneficial Owners will be governed by standing instructions and customary
practices, as is the case with securities held for the accounts of
customers in bearer form or registered in "street name," and will be the
responsibility of such Participant and not of the Depositary, the Trustee
or Fremont General, subject to any statutory or regulatory requirements as
may be in effect from time to time. Payment of principal, premium, if any,
and/or interest, if any, to the Depositary is the responsibility of Fremont
General or the Trustee, disbursement of such payments to Direct
Participants shall be the responsibility of the Depositary, and
disbursement of such payments to the Beneficial Owners shall be the
responsibility of Direct and Indirect Participants.
The Depositary may discontinue providing its services as securities
depositary with respect to the notes at any time by giving reasonable
notice to Fremont General or the Trustee. Under such circumstances, in the
event that a successor securities depositary is not obtained, certificated
notes are required to be printed and delivered.
Fremont General may decide to discontinue use of the system of
book-entry transfers through the Depositary (or a successor securities
depositary). In that event, certificated notes will be printed and
delivered.
The information in this section concerning the Depositary and the
Depositary's system has been obtained from sources that Fremont General
believes to be reliable, but Fremont General takes no responsibility for
its accuracy.
The Depositary has further advised Fremont General that management of
the Depositary is aware that some computer applications, systems, and the
like for processing data ("Systems") that are dependent upon calendar
dates, including dates before, on, and after January 1, 2000, may encounter
"Year 2000 problems." The Depositary has informed its Participants and
other members of the financial community (the "Industry") that it has
developed and is implementing a program so that its Systems, as the same
relate to the timely payment of distributions (including
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principal and income payments) to securityholders, book-entry deliveries,
and settlement of trades within the Depositary ("Depositary Services"),
continue to function appropriately. This program includes a technical
assessment and a remediation plan, each of which is complete. Additionally,
the Depositary's plan includes a testing phase, which is expected to be
completed within appropriate time frames.
However, the Depositary's ability to perform properly its service is
also dependent upon other parties, including but not limited to issuers and
their agents, as well as the Depositary's Direct Participants and Indirect
Participants and third party vendors from whom the Depositary licenses
software and hardware, and third party vendors on whom the Depositary
relies for information or the provision of services, including
telecommunication and electrical utility service providers, among others.
The Depositary has informed the Industry that it is contacting (and will
continue to contact) third party vendors from whom the Depositary acquires
services to: (i) impress upon them the importance of such services being
Year 2000 compliance; and (ii) determine the extent of their efforts for
Year 2000 remediation (and, as appropriate, testing) of their services. In
addition, the Depositary is in the process of developing such contingency
plans as it deems appropriate.
According to the Depositary, the foregoing information with respect to the
Depositary has been provided to the Industry for informational purposes only and
is not intended to serve as a representation, warranty, or contract modification
of any kind.
CERTAIN COVENANTS
Limitations on Liens
For so long as the notes and any other applicable series of Securities are
outstanding, Fremont General will not, and will not permit any Significant
Subsidiary to, create, assume, incur or suffer to exist upon any property of
Fremont General or any Significant Subsidiaries of Fremont General any Liens to
secure Debt, without making effective provision whereby the notes and any other
applicable series of Securities then outstanding shall be secured equally and
ratably with (or prior to) such other Debt, so long as such other Debt remains
secured. This limitation shall not apply to:
(1) Liens securing Debt for borrowed money, including purchase money
Debt, that is incurred to finance the acquisition, construction or
improvement of the property subject to such Lien either before or within 90
days after such acquisition, construction or improvement; provided that the
principal amount of such Debt does not exceed 100% of the fair market value
of the property subject to such Lien;
(2) Liens securing Debt on property or shares of stock of a
corporation at the time the same becomes a Subsidiary of Fremont General or
merges into or consolidates with Fremont General or a Subsidiary of Fremont
General; provided that such Liens may not be assumed or permitted to exist
if they are incurred in anticipation of such corporation becoming a
Subsidiary of Fremont General or of such merger or consolidation;
(3) Liens securing Debt on property at the time Fremont General or a
Subsidiary of Fremont General acquires such property; provided that such
Liens may not extend to any other property of Fremont General or a
Subsidiary of Fremont General at the time such Liens are assumed;
(4) Liens in favor of Fremont General or any Subsidiary of Fremont
General;
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(5) Liens directly or indirectly in favor of, or required by,
governmental authorities, including Liens securing Debt owed by any
Subsidiary of Fremont General to the Federal Home Loan Bank or other
governmental authorities, and Liens related to appeal bonds, judgments,
actions at law or in equity and similar matters;
(6) Renewals, continuations, assignments and/or extensions of Liens
described in clauses (1) through (5) above, provided however, that (a) such
renewal, continuation, assignment and/or extension shall be limited to all
or a part of the same property or shares of stock that secured the Lien,
renewal, continuation, assignment and/or extension and (b) the Debt secured
by such Lien at such time is not so increased;
(7) Liens existing on the date of the issuance of the notes or any
other applicable series of Securities issued pursuant to the indenture, and
renewals, continuations, assignments and/or extensions thereof; provided
however, that (a) such renewal, continuation, assignment and/or extension
shall be limited to all or a part of the same property or shares of stock
that secured the Lien, renewal, continuation, assignment and/or extension
and (b) the Debt secured by such Lien at such time is not so increased; and
provided further that without making effective provision whereby the notes
and any other applicable series of such Securities then outstanding shall
be secured equally and ratably with (or prior to) the Debt of Fremont
General under the Chase Credit Agreement, Fremont General shall not incur
additional Debt under the Chase Credit Agreement at any time that both (a)
the Lien securing the Debt of Fremont General under the Chase Credit
Agreement on the capital stock of Fremont Compensation Insurance Group,
Inc. remains in effect and (b) after giving effect to the incurrence of
such Debt, the ratio of Senior Debt to Total Capitalization of Fremont
General, on a nonconsolidated basis, would exceed 0.32 to 1.0; or
(8) Liens not covered by clauses (1) through (7) securing Debt of
Fremont General or any of its Significant Subsidiaries, provided that the
aggregate principal amount of such Debt immediately after giving effect to
the occurrence thereof does not exceed 10% of Consolidated Net Tangible
Assets.
Limitation of Dividend and Other Payment Restrictions Affecting Significant
Insurance Subsidiaries
For so long as the notes and any other applicable series of Securities are
outstanding, Fremont General will not, and will not permit any Subsidiary of
Fremont General to create, cause or suffer to exist any encumbrance or
restriction on the ability of any Significant Insurance Subsidiary of Fremont
General to (i) pay dividends or make other distributions on its Capital Stock
owned by Fremont General or any Insurance Subsidiary of Fremont General; (ii)
pay Debt or other obligations owed to Fremont General or any Insurance
Subsidiary of Fremont General; (iii) make loans or advances to Fremont General
or any Insurance Subsidiary of Fremont General; or (iv) transfer any of its
properties or assets to Fremont General or any Insurance Subsidiary of Fremont
General.
The foregoing provisions shall not restrict any encumbrances or
restrictions (i) existing on March 17, 1999 and in any renewals of the
agreements containing such restrictions; provided that the encumbrances and
restrictions in any such renewals are no less favorable in any material respect
to the holders of the Securities of any series; (ii) existing under or by reason
of applicable law, rule or regulation, or any agreement or understanding with
any governmental entity that has jurisdiction over Fremont General or any of its
Subsidiaries; (iii) existing with respect to any Person, property or assets
acquired, existing at the time of such acquisition and not incurred in
contemplation
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thereof; (iv) in the case of clause (iv) of the immediately preceding paragraph,
(a) that restrict in a customary manner the subletting, assignment or transfer
of any property or asset that is a lease, license, conveyance or contract or
similar property or asset, (b) existing by virtue of any transfer of any
property or assets of Fremont General or any Insurance Subsidiary of Fremont
General not otherwise prohibited by the indenture and relating solely to such
assets or (c) arising or agreed to in the ordinary course of business, not
relating to any Debt, and that do not detract from the value of property or
assets of Fremont General or any Insurance Subsidiary of Fremont General in any
manner material to Fremont General or such Insurance Subsidiary; (v) with
respect to an Insurance Subsidiary of Fremont General and imposed pursuant to an
agreement that has been entered into for the sale or disposition of all or
substantially all of the Capital Stock of, or property and assets of, such
Insurance Subsidiary; (vi) existing under customary non-assignment provisions
entered into in the ordinary course of business and consistent with past
practice; and (vii) existing under purchase money obligations for property
acquired in the ordinary course of business, so long as the incurrence of such
obligations is permitted under the indenture.
Limitation on the Issuance and Sale of Capital Stock of Significant Insurance
Subsidiaries
For so long as the notes and any other applicable series of Securities are
outstanding, Fremont General will not sell, and will not permit any Subsidiary
of Fremont General, directly or indirectly, to issue or sell any shares of
Capital Stock of a Significant Insurance Subsidiary of Fremont General except:
(i) to Fremont General or a wholly-owned subsidiary of Fremont General and (ii)
issuance of director's qualifying shares or sales to non-U.S. nationals of
shares of capital stock of non-U.S. Subsidiaries, to the extent required by
applicable law or regulatory authority.
Reporting Requirements
For so long as the notes and any other applicable series of Securities are
outstanding, the Company's audited annual consolidated financial statements and
unaudited quarterly consolidated financial statements will be furnished to the
holders of Securities or to the Trustee under the indenture for distribution to
holders. In addition, for so long as the notes and any other applicable series
of Securities are outstanding, Fremont General will make available upon request,
to any holder and any prospective purchaser of Securities, the information
required pursuant to Rule 144A(d)(4) under the Securities Act during any period
in which Fremont General is not subject to Section 13 or 15(d) of the Securities
Exchange Act.
CONSOLIDATION, MERGER AND SALE
Fremont General will not consolidate with any other corporation or accept a
merger of any other corporation into Fremont General or permit Fremont General
to be merged into any other corporation, or sell or lease all or substantially
all its assets to another corporation, or purchase all or substantially all the
assets of another corporation, unless (i) either Fremont General shall be the
continuing corporation, or the successor, transferee or lessee corporation (if
other than Fremont General) shall be organized under the laws of the United
States or any state thereof or the District of Columbia and shall expressly
assume, by indenture supplemental hereto, executed and delivered by such
corporation prior to or simultaneously with such consolidation, merger, sale or
lease, the due and punctual payment of the principal of and interest and
premium, if any, on all the
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Securities, according to their tenor, and the due and punctual performance and
observance of all the covenants and conditions of the indenture to be performed
or observed by Fremont General and (ii) immediately after such consolidation,
merger, sale, lease or purchase Fremont General or the successor, transferee or
lessee corporation (if other than Fremont General) would not be in default in
the performance of any covenant or condition of the indenture.
EVENTS OF DEFAULT
The term "Event of Default" means any one of the following events with
respect to any series of Securities, including the notes:
(1) default in the payment of any interest on any Security of such
series, or any Additional Amounts payable with respect thereto, when such
interest becomes or such Additional Amounts become due and payable, and
continuance of such default for a period of 30 days;
(2) default in the payment of the principal of or any premium on any
Security of such series, or any Additional Amounts payable with respect
thereto, when such principal or premium becomes or such Additional Amounts
become due and payable at their Maturity;
(3) default in the deposit of any sinking fund payment when and as due
by the terms of a Security of such series;
(4) default in the performance, or breach, of any covenant or warranty
of Fremont General in the indenture or the Securities (other than a
covenant or warranty a default in the performance or the breach of which is
elsewhere in the indenture specifically dealt with or which has been
expressly included in the indenture solely for the benefit of a series of
Securities other than such series), and continuance of such default or
breach for a period of 60 days after there has been given, by registered or
certified mail, to Fremont General by the Trustee or to Fremont General and
the Trustee by the holders of at least 25% in principal amount of the
Outstanding Securities of such series, a written notice specifying such
default or breach and requiring it to be remedied and stating that such
notice is a "Notice of Default";
(5) if any event of default as defined in any mortgage, indenture or
instrument under which there may be issued, or by which there may be
secured or evidenced, any Debt of Fremont General or any of its Significant
Subsidiaries, whether such Debt now exists or shall hereafter be created,
shall happen and shall result in Debt in aggregate principal amount in
excess of $25 million becoming or being declared due and payable prior to
the date on which it would otherwise become due and payable, and such
acceleration shall not be rescinded or annulled within a period of 30 days
after there shall have been given, by registered or certified mail, to
Fremont General by the Trustee or to Fremont General and the Trustee by the
holders of at least 25% in principal amount of the outstanding Securities
of such series then outstanding a written notice specifying such default or
breaches and requiring it to be remedied and stating that such notice is a
"Notice of Default" or other such notice as prescribed in the indenture;
(6) Fremont General or any of its Significant Subsidiaries shall fail
within 60 days to pay, bond or otherwise discharge any uninsured judgment
or court order for the payment of money in excess of $25 million, which is
not stayed on appeal or is not otherwise being contested in good faith;
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(7) the entry by a court having competent jurisdiction of:
(a) a decree or order for relief in respect of Fremont General or
any of its Significant Subsidiaries in an involuntary proceeding under
any applicable bankruptcy, insolvency, reorganization or other similar
law and such decree or order shall remain unstayed and in effect for a
period of 60 consecutive days;
(b) a decree or order adjudging Fremont General or any of its
Significant Subsidiaries to be insolvent, or approving a petition
seeking reorganization, arrangement, adjustment or composition of
Fremont General or any of its Significant Subsidiaries and, except in
the case of any Regulated Insurance Subsidiary such decree or order
shall remain unstayed and in effect for a period of 60 consecutive days;
or
(c) a final and non-appealable order appointing a custodian,
receiver, liquidator, assignee, trustee or other similar official of
Fremont General or any of its Significant Subsidiaries or of any
substantial part of the property of Fremont General or any of its
Significant Subsidiaries or ordering the winding up or liquidation of
the affairs of Fremont General;
(8) the commencement by Fremont General or any of its Significant
Subsidiaries of a voluntary proceeding under any applicable bankruptcy,
insolvency, reorganization or other similar law or of a voluntary
proceeding seeking to be adjudicated insolvent or the consent by Fremont
General or any of its Significant Subsidiaries to the entry of a decree or
order for relief in an involuntary proceeding under any applicable
bankruptcy, insolvency, reorganization or other similar law or to the
commencement of any insolvency proceedings against it, or the filing by
Fremont General or any of its Significant Subsidiaries of a petition or
answer or consent seeking reorganization, arrangement, adjustment or
composition of Fremont General or any of its Significant Subsidiaries, as
the case may be, or relief under any applicable law, or the consent by
Fremont General or any of its Significant Subsidiaries to the filing of
such petition or to the appointment of or taking possession by a custodian,
receiver, liquidator, assignee, trustee or similar official of Fremont
General or any of its Significant Subsidiaries, as the case may be, or any
substantial part of the property of Fremont General or any of its
Significant Subsidiaries, as the case may be, or the making by Fremont
General or any of its Significant Subsidiaries of an assignment for the
benefit of creditors, or the taking of corporate action by Fremont General
or any of its Significant Subsidiaries in furtherance of any such action;
or
(9) any other Event of Default provided in or pursuant to the
indenture with respect to Securities of such series.
If an Event of Default with respect to Securities of any series at the time
Outstanding (other than an Event of Default with respect to Fremont General
specified in clause (7) or (8) above) occurs and is continuing, then the Trustee
or the holders of not less than 25% in principal amount of the Outstanding
Securities of such series may declare the principal of all the Securities of
such series, or such lesser amount as may be provided for in the Securities of
such series, to be due and payable immediately, by a notice in writing to
Fremont General (and to the Trustee if given by the holders), and upon any such
declaration such principal or such lesser amount shall become immediately due
and payable. If an Event of Default with respect to Fremont General specified in
clause (7) or (8) above occurs, all unpaid principal of and accrued interest on
the Outstanding
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Securities of that series (or such lesser amount as may be provided for in the
Securities of such series) shall ipso facto become and be immediately due and
payable without any declaration or other act on the part of the Trustee or any
holder of any Security of that series.
At any time after a declaration of acceleration or automatic acceleration
with respect to the Securities of any series has been made and before a judgment
or decree for payment of the money due has been obtained by the Trustee, the
holders of not less than a majority in principal amount of the Outstanding
Securities of such series, by written notice to Fremont General and the Trustee,
may rescind and annul such declaration and its consequences if (a) Fremont
General has paid or deposited with the Trustee a sum of money sufficient to pay
all overdue installments of any interest on and Additional Amounts with respect
to all Securities of such series and the principal of and any premium on any
Securities of such series which have become due otherwise than by such
declaration of acceleration and interest thereon and (b) all Events of Default
with respect to Securities of such series, other than the non-payment of the
principal of, any premium and interest on, and any Additional Amounts with
respect to Securities of such series which shall have become due solely by such
acceleration, shall have been cured or waived. No such rescission shall affect
any subsequent default or impair any right consequent thereon.
CERTAIN DEFINITIONS
The term "Capital Stock" means (i) with respect to any Person organized as
a corporation, any and all shares, interests, rights to purchase, warrants,
options, participations or other equivalents of or interest in (however
designated) corporate stock, and (ii) with respect to any Person that is not
organized as a corporation, the partnership, membership or other equity
interests or participations in such Person.
The term "Chase Credit Agreement" means the $400 million Credit Agreement
dated as of August 1, 1997 among Fremont General, the lenders party thereto and
The Chase Manhattan Bank, as agent for such lenders, and any amendments,
modifications, supplements, extensions, renewals, replacements, refinancings or
refundings thereof.
The term "Consolidated Net Tangible Assets" means the total of all assets
reflected on a consolidated balance sheet of Fremont General and its
consolidated Subsidiaries, prepared in accordance with generally accepted
accounting principles, at their net book values (after deducting related
depreciation, depletion, amortization and all other valuation reserves which, in
accordance with such principles, should be set aside in connection with the
business conducted), but excluding goodwill, unamortized debt discount and all
other like intangible assets, all as determined in accordance with such
principles, less the aggregate of the current liabilities of Fremont General and
its consolidated Subsidiaries reflected on such balance sheet, all as determined
in accordance with such principles. For purposes of this definition, "current
liabilities" include all indebtedness for money borrowed, incurred, issued,
assumed or guaranteed by Fremont General and its consolidated Subsidiaries, and
other payables and accruals, in each case payable on demand or due within one
year of the date of determination of Consolidated Net Tangible Assets, but shall
exclude any portion of long-term debt maturing within one year of the date of
such determination, all as reflected on such consolidated balance sheet of
Fremont General and its consolidated Subsidiaries, prepared in accordance with
generally accepted accounting principles.
The term "Debt" means (a) any liability of Fremont General or any
Subsidiary (1) for borrowed money, or under any reimbursement obligation
relating to a letter of
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credit, or (2) evidenced by a bond, note, debenture or similar instrument, or
(3) for payment obligations arising under any conditional sale or other title
retention arrangement (including a purchase money obligation) given in
connection with the acquisition of any businesses, properties or assets of any
kind, or (4) consisting of the discounted rental stream properly classified in
accordance with generally accepted accounting principles on the balance sheet of
Fremont General or any Subsidiary, as lessee, as a capitalized lease obligation;
(b) any liability of others of a type described in the preceding clause (a) to
the extent that Fremont General or any Subsidiary has guaranteed or is otherwise
legally obligated in respect thereof; and (c) any amendment, supplement,
modification, deferral, renewal, extension or refunding of any liability of the
types referred to in clauses (a) and (b) above. "Debt" shall not be construed to
include (w) thrift deposits, (x) trade payables or credit on open account to
trade creditors incurred in the ordinary course of business, (y) obligations or
liabilities incurred in connection with the sale, transfer or other disposition
of property in connection with the securitization or other asset-based financing
thereof; provided however that any such sale, transfer or other disposition
shall be for valid consideration and shall not be to prefer directly or
indirectly any holder of any other obligation or Debt of Fremont General or any
Subsidiary of Fremont General as to any such other obligation or Debt that was
already outstanding and did not previously benefit from a Lien, or (z) any
contractual obligation, whether or not contingent, with respect to Debt of
another Person, to the extent made in the ordinary course of business in
connection with lending relationships between the Person and a Subsidiary of
Fremont General.
The term "Insurance Business" means one or more aspects of the business of
selling, issuing or underwriting insurance or reinsurance.
The term "Insurance Subsidiaries" means (i) Fremont Compensation Insurance
Group, Inc., a Delaware corporation ("FCIG"), (ii) each of FCIG's Subsidiaries
(whether currently in existence or created or acquired thereafter) and (iii)
each other Subsidiary of Fremont General created or acquired after the date of
the indenture that engages in property and casualty insurance operations,
workers' compensation insurance operations or the activities of which are
limited to holding the stock or other securities of another Subsidiary or
Subsidiaries engaged in property and casualty insurance operations and/or
workers' compensation insurance.
The term "Lien" means any lien, charge, claim, security interest, pledge,
hypothecation, right of another under any conditional sale or other title
retention agreement, or any other encumbrance affecting title to property.
Without limiting the generality of the foregoing, the sale of property used or
useful in the business of the seller with the intention of retaining the use
thereof under a lease, or other comparable arrangement commonly referred to as a
"sale and leaseback," shall be deemed to create a Lien on such property.
The term "Regulated Insurance Subsidiary" means any Subsidiary of Fremont
General, whether now owned or hereafter acquired, that is authorized or admitted
to carry on or transact Insurance Business in any jurisdiction and is regulated
by the insurance department or similar regulatory authority of such
jurisdiction.
The term "Senior Debt" means the Debt of Fremont General, on a
nonconsolidated basis, that ranks equally with or senior to the Securities.
The term "Significant Insurance Subsidiary" means any Insurance Subsidiary
that is a Significant Subsidiary.
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The term "Significant Subsidiary" has the meanings ascribed to such term in
Rule 1-02(w) of SEC Regulation S-X as in effect on the date of the indenture.
The term "Subsidiary" means any Corporation at least a majority of the
Voting Stock of which shall at the time be owned, directly or indirectly, by
Fremont General, or one or more Subsidiaries, or by Fremont General and one or
more Subsidiaries.
The term "Total Capitalization" means the sum of (a) stockholders' equity
of Fremont General; (b) Senior Debt; (c) Debt of Fremont General, on a
nonconsolidated basis, that is subordinated to the Securities by its terms, in
each case calculated in accordance with generally accepted accounting principles
applied on a consistent basis with Fremont General's financial reports; and (d)
the 9% Junior Subordinated Debentures due March 31, 2026 of Fremont General
issued in connection with the mandatorily redeemable preferred securities of the
TOPrS Trust or any other similar securities issued from time to time in the
future.
The term "Voting Stock" of any Person means stock of any class or classes
(however designated) having ordinary voting power for the election of a majority
of the members of the board of directors (or any governing body) of such Person,
other than Capital Stock having such power only by reason of the happening of a
contingency.
The term "Wholly-Owned Subsidiary" of any Person means any Subsidiary of
such Person to the extent all of the capital stock or other ownership interests
in such Subsidiary, other than directors' or nominees' qualifying shares, is
owned directly or indirectly by such Person.
MODIFICATION AND WAIVER
Modification and amendments of the indenture may be made by Fremont General
and the Trustee with the consent of the holders of not less than a majority in
aggregate principal amount of the outstanding Securities of each series affected
thereby; provided, however, that no such modification or amendment may, without
the consent of the holder of each outstanding Security affected thereby, (a)
change the Stated Maturity of the principal of, or any premium or installment of
interest on, or any Additional Amounts with respect to, any Security, (b) reduce
the principal amount of, or the rate (or modify the calculation of such rate) of
interest on, or any Additional Amounts with respect to, or any premium payable
upon the redemption of, any Security, (c) change the redemption provisions of
any Security or adversely affect the right of repayment at the option of any
holder of any Security, (d) change the place of payment or the coin or currency
in which the principal of, any premium or interest on or any Additional Amounts
with respect to any Security is payable, (e) impair the right to institute suit
for the enforcement of any payment on or after the Stated Maturity of any
Security (or, in the case of redemption, on or after the Redemption Date or, in
the case of repayment at the option of any holder, on or after the date for
repayment), (f) reduce the percentage in principal amount of the outstanding
Securities, the consent of whose holders is required in order to take certain
actions, (g) reduce the requirements for quorum or voting by holders of
Securities as provided in the indenture, (h) modify any of the provisions in the
indenture regarding the waiver of past defaults and the waiver of certain
covenants by the holders of Securities except to increase any percentage vote
required or to provide that certain other provisions of the indenture cannot be
modified or waived without the consent of the holder of each Security affected
thereby, or (i) modify any of the above provisions.
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The holders of at least a majority in aggregate principal amount of the
Securities of any series may, on behalf of the holders of all Securities of such
series, waive compliance by Fremont General with certain restrictive provisions
of the indenture. The holders of not less than a majority in aggregate principal
amount of the outstanding Securities of any series may, on behalf of the holders
of all Securities of such series, waive any past default and its consequences
under the indenture with respect to the Securities of such series, except a
default (a) in the payment of principal of (or premium, if any), or any interest
on or any Additional Amounts with respect to Securities of such series or (b) in
respect of a covenant or provision of the indenture that cannot be modified or
amended without the consent of the holder of each Security of any series.
Under the indenture, Fremont General is required to furnish the Trustee
annually a statement as to performance by Fremont General of certain of its
obligations under the indenture and as to any default in such performance.
Fremont General is also required to deliver to the Trustee, within five days
after becoming aware thereof, written notice of any Event of Default or any
event which after notice or lapse of time or both would constitute an Event of
Default.
DISCHARGE, DEFEASANCE AND COVENANT DEFEASANCE
Fremont General may discharge certain obligations to holders of any series
of Securities that have not already been delivered to the Trustee for
cancellation and that either have become due and payable or will become due and
payable within one year (or scheduled for redemption within one year) by
depositing with the Trustee, in trust, funds in U.S. dollars in an amount
sufficient to pay the entire indebtedness on such Securities with respect to
principal (and premium, if any) and interest to the date of such deposit (if
such Securities have become due and payable) or to the Maturity thereof, as the
case may be.
The indenture provides that, unless the provisions of Section 4.2 thereof
are made inapplicable to the Securities of or within any series pursuant to
Section 3.1 thereof, Fremont General may elect either (a) to defease and be
discharged from any and all obligations with respect to such Securities (except
for, among other things, the obligation to pay Additional Amounts, if any, upon
the occurrence of certain events of taxation, assessment or governmental charge
with respect to payments on such Securities and other obligations to register
the transfer or exchange of such Securities, to replace temporary or mutilated,
destroyed, lost or stolen Securities, to maintain an office or agency with
respect to such Securities and to hold moneys for payment in trust)
("defeasance") or (b) to be released from its obligations with respect to such
Securities under the covenants described under "Limitation on Liens,"
"Limitation of Dividend and Other Payment Restrictions Affecting Significant
Insurance Subsidiaries" and "Limitation on the Issuance and Sale of Capital
Stock of Significant Insurance Subsidiaries" above or, if provided pursuant to
Section 3.1 of the indenture, its obligations with respect to any other
covenant, and any omission to comply with such obligations shall not constitute
a default or an Event of Default with respect to such Securities ("covenant
defeasance"). Defeasance or covenant defeasance, as the case may be, shall be
conditioned upon the irrevocable deposit by Fremont General with the Trustee, in
trust, of an amount in U.S. dollars at Stated Maturity, or Government
Obligations (as defined below), or both, applicable to such Securities which
through the scheduled payment of principal and interest in accordance with their
terms will provide money in an amount sufficient to pay the principal of (and
premium, if any) and interest on such Securities on the scheduled due dates
therefor.
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Such a trust may only be established if, among other things, (i) the
applicable defeasance or covenant defeasance does not result in a breach or
violation of, or constitute a default under, the indenture or any other material
agreement or instrument to which Fremont General is a party or by which it is
bound, and (ii) Fremont General has delivered to the Trustee an Opinion of
Counsel (as specified in the indenture) to the effect that the holders of such
Securities will not recognize income, gain or loss for U.S. federal income tax
purposes as a result of such defeasance or covenant defeasance and will be
subject to U.S. federal income tax on the same amounts, in the same manner and
at the same times as would have been the case if such defeasance or covenant
defeasance had not occurred, and such Opinion of Counsel, in the case of
defeasance, must refer to and be based upon a letter ruling of the Internal
Revenue Service received by Fremont General, a Revenue Ruling published by the
Internal Revenue Service or a change in applicable U.S. federal income tax law
occurring after the date of the indenture.
"Government Obligations" means securities which are (i) direct obligations
of the United States of America or the government or the governments in the
confederation which issued the Foreign Currency in which the Securities of a
particular series are payable, for the payment of which its full faith and
credit is pledged or (ii) obligations of a Person controlled or supervised by
and acting as an agency or instrumentality of the United States of America, the
timely payment of which is unconditionally guaranteed as a full faith and credit
obligation by the United States of America, which, in the case of clauses (i)
and (ii), are not callable or redeemable at the option of the issuer or issuers
thereof, and shall also include a depositary receipt issued by a bank or trust
company as custodian with respect to any such Government Obligation or a
specific payment of interest on or principal of or any other amount with respect
to any such Government Obligation held by such custodian for the account of the
holder of such Depositary receipt, provided that (except as required by law)
such custodian is not authorized to make any deduction from the amount payable
to the holder of such depositary receipt from any amount received by the
custodian with respect to the Government Obligation or the specific payment of
interest on or principal of or any other amount with respect to the Government
Obligation evidenced by such depositary receipt.
In the event Fremont General effects covenant defeasance with respect to
any Securities and such Securities are declared due and payable because of the
occurrence of any Event of Default other than an Event of Default with respect
to Sections 10.5 and 10.6 of the indenture (which Sections would no longer be
applicable to such Securities after such covenant defeasance) or with respect to
any other covenant as to which there has been covenant defeasance, the amount in
such Foreign Currency in which such Securities are payable, and Government
Obligations on deposit with the Trustee, will be sufficient to pay amounts due
on such Securities at the time of the Stated Maturity but may not be sufficient
to pay amounts due on such Securities at the time of the acceleration resulting
from such Event of Default. However, Fremont General would remain liable to make
payment of such amounts due at the time of acceleration.
GOVERNING LAW
The indenture and the exchange notes will be governed by the laws of the
State of New York.
38
<PAGE> 42
REGARDING THE TRUSTEE
The Trustee is permitted to engage in other transactions with Fremont
General and its subsidiaries from time to time, provided that if the Trustee
acquires any conflicting interest it must eliminate such conflict upon the
occurrence of an Event of Default, or else resign.
UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS
The following is a summary of the material United States federal income tax
consequences to holders of initial notes who exchange their initial notes for
exchange notes in the exchange offer. This discussion is based on currently
existing provisions of the Internal Revenue Code, existing, temporary and
proposed Treasury regulations promulgated under the Internal Revenue Code, and
administrative and judicial interpretations of the Internal Revenue Code, all as
in effect or proposed on the date of this prospectus and all of which are
subject to change or different interpretations, possibly with retroactive
effect. There can be no assurance that the Internal Revenue Service will not
challenge one or more of the conclusions described herein, and the Company has
not obtained, nor does it intend to obtain, a ruling from the Internal Revenue
Service or an opinion of counsel with respect to the United States federal
income tax consequences of the exchange of initial notes for exchange notes.
This discussion is limited to holders of initial notes who hold the notes as
capital assets, within the meaning of section 1221 of the Internal Revenue Code.
Moreover, this discussion is for general information only and does not address
all of the tax consequences that may be relevant to holders of initial notes and
exchange notes in light of their personal circumstances or to some types of
holders of initial notes and exchange notes including financial institutions,
insurance companies, tax-exempt entities, dealers in securities or persons who
have hedged the risk of owning a note. In addition, this discussion does not
address any tax consequences arising under the laws of any state, locality or
foreign jurisdiction, or any estate or gift tax considerations.
The exchange of initial notes for exchange notes under the exchange offer
should not be treated as a taxable exchange for United States Federal income tax
purposes. Accordingly, a holder should have the same adjusted tax basis and
holding period in the exchange notes as it had in the initial notes immediately
before the exchange.
PLAN OF DISTRIBUTION
Each broker-dealer that receives exchange notes for its own account under
the exchange offer must acknowledge that it will deliver a prospectus as part of
any resale of the exchange notes. This prospectus, as it may be amended or
supplemented from time to time, may be used by a broker-dealer as part of
resales of exchange notes received in exchange for initial notes where the
initial notes were acquired as a result of market-making activities or other
trading activities. We have agreed that for a period of 90 days after the
expiration date, we will make this prospectus, as amended or supplemented,
available to any broker-dealer for use upon any such resale.
We will not receive any proceeds from any sale of exchange notes by
broker-dealers or any other holder of exchange notes. Exchange notes received by
broker-dealers for their own account under the exchange offer may be sold from
time to time in one or more transactions in the over-the-counter market, in
negotiated transactions, through the writing of options on the exchange notes or
a combination of these methods of resale, at market prices prevailing at the
time of resale, at prices related to the prevailing market prices or negotiated
prices. The resale may be made directly to purchasers or to or through brokers
39
<PAGE> 43
or dealers who may receive compensation in the form of commissions or
concessions from any of these broker-dealers and the purchasers of any such
exchange notes. Any broker-dealer that resells exchange notes that were received
by it for its own account in the exchange offer and any broker or dealer that
participates in a distribution of the exchange notes may be deemed to be an
"underwriter" within the meaning of the Securities Act and any profit on their
resale of exchange notes and any commissions or concessions received by them may
be deemed to be underwriting compensation under the Securities Act. The letter
of transmittal states that by acknowledging that it will deliver a prospectus
and by delivering a prospectus, a broker-dealer will not be deemed to admit that
it is an "underwriter" within the meaning of the Securities Act.
For a period of 90 days after the expiration date, we will promptly send
additional copies of this prospectus and any amendment or supplement to this
prospectus to any broker-dealer that requests these documents in the letter of
transmittal. We have agreed to pay all expenses incident to the exchange offer,
including the reasonable expenses of one counsel for the holders of the initial
notes, other than underwriting discounts and commissions and transfer taxes, if
any. In addition, we will indemnify the holders of the notes (including any
broker-dealers) against certain liabilities, including liabilities under the
Securities Act.
LEGAL MATTERS
The validity of the exchange notes will be passed upon by Wilson Sonsini
Goodrich & Rosati, P.C., Palo Alto, California.
EXPERTS
Ernst & Young LLP, independent auditors, have audited our consolidated
financial statements and schedules included in our annual report on form 10-K
for the year ended December 31, 1998, as set forth in their report, which is
incorporated by reference in this prospectus and elsewhere in the registration
statement. Our financial statements and schedules are incorporated by reference
in reliance on Ernst & Young LLP's report, given on their authority as experts
in accounting and auditing.
40
<PAGE> 44
- ------------------------------------------------------
- ------------------------------------------------------
YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN THIS PROSPECTUS WITH
REGARD TO THE EXCHANGE NOTES. WE HAVE NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH
INFORMATION THAT IS DIFFERENT FROM THAT CONTAINED IN THIS PROSPECTUS. WE ARE
OFFERING TO EXCHANGE THE EXCHANGE NOTES ONLY IN JURISDICTIONS WHERE OFFERS AND
SALES ARE PERMITTED. THE INFORMATION CONTAINED IS THIS PROSPECTUS IS ACCURATE
ONLY AS OF THE DATE OF THIS PROSPECTUS, REGARDLESS OF WHEN THIS PROSPECTUS IS
DELIVERED OR ANY NOTES ARE EXCHANGED.
-------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Where You Can Find More
Information....................... i
Summary............................. 1
Risk Factors........................ 8
Use Of Proceeds..................... 12
Ratio Of Earnings To Fixed
Charges........................... 12
The Exchange Offer.................. 13
Description Of The Notes............ 22
United States Federal Income Tax
Considerations.................... 39
Plan Of Distribution................ 39
Legal Matters....................... 40
Experts............................. 40
</TABLE>
- ------------------------------------------------------
- ------------------------------------------------------
- ------------------------------------------------------
- ------------------------------------------------------
$425,000,000
FREMONT LOGO
FREMONT GENERAL
CORPORATION
$200,000,000 SERIES B 7.70%
SENIOR NOTES DUE 2004
$225,000,000 SERIES B 7.875%
SENIOR NOTES DUE 2009
-------------------------
PROSPECTUS
-------------------------
, 1999
- ------------------------------------------------------
- ------------------------------------------------------
<PAGE> 45
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Registrant's Restated Certificate of Incorporation limits the monetary
liability of its directors to the Registrant or its stockholders for breach of
such directors' fiduciary duty to the fullest extent permitted by the law of the
State of Nevada ("Nevada Law"), as it is amended from time to time.
Under the Registrant's Bylaws, the Registrant is required, to the maximum
extent and in the manner permitted by Nevada law, to indemnify each of its
directors and officers against expenses, judgments, fines, settlements, and
other amounts actually and reasonably incurred in connection with any
proceeding, arising by reason of the fact that such person is or was an agent of
the corporation. For the purposes of the Bylaws, a "director" or "officer" of
the Registrant includes any person (i) who is or was a director or officer of
the Registrant, (ii) who is or was serving at the request of the Registrant as a
director or officer of another corporation, partnership, joint venture, trust or
other enterprise, or (iii) who was a director or officer of a corporation which
was a predecessor corporation of the Registrant or of another enterprise at the
request of such predecessor corporation.
The Registrant is also required to pay all expenses incurred in defending
any civil or criminal action or proceeding for which indemnification is required
under the Bylaws in advance of the final disposition of such action or
proceeding upon receipt of an undertaking by or on behalf of the indemnified
party to repay such amount if it shall ultimately be determined that the
indemnified party is not entitled to be indemnified as authorized in the Bylaws.
The Bylaws further provide that the Registrant shall have the power to purchase
and maintain insurance on behalf of any person who is or was a director or
officer of the Registrant against any liability asserted against or incurred by
such person in such capacity or arising out of such person's status as such,
whether or not the Registrant would have the power to indemnify such person
against such liability under the provisions of the Bylaws.
II-1
<PAGE> 46
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) Exhibits.
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<S> <C>
4.1 Indenture dated as of March 1, 1999 between the Registrant
and The First National Bank of Chicago (incorporated by
reference to exhibit 4.9 to the Registrant's Annual Report
on Form 10-K for the year ended December 31, 1998 (File No.
1-8007))
4.2 Registration Rights Agreement dated as of March 17, 1999
among the Registrant and the Initial Purchasers.
(incorporated by reference to exhibit 4.10 to the
Registrant's Annual Report on Form 10-K for the year ended
December 31, 1998 (File No. 1-8007))
4.3 Specimen Series B 7.70% Senior Note due 2004
4.4 Specimen Series B 7.875% Senior Note due 2009
5 Opinion of Wilson Sonsini Goodrich & Rosati
23.1 Consent of Ernst & Young LLP
23.2 Consent of Wilson Sonsini Goodrich & Rosati (included in
Exhibit 5)
24 Power of Attorney (see signature page)
25 Statement of Eligibility of Trustee
99.1 Form of Letter of Transmittal with respect to Exchange Offer
99.2 Form of Notice of Guaranteed Delivery
99.3 Form of Depositary Agreement
</TABLE>
(b) Financial Statement Schedules
Schedules not listed above have been omitted because the information to be
set forth therein is not applicable or is shown in the financial statements or
notes thereto.
ITEM 22. UNDERTAKINGS
(a) The Registrant hereby undertakes that, for purposes of any liability under
the Securities Act, each filing of a registrant's annual report pursuant to
Section 13(a) or 15(d) of the Exchange Act that is incorporated by reference
in the Registration Statement 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.
(b) The Registrant hereby undertakes to respond to requests for information that
is incorporated by reference into the prospectus pursuant to Item 4, 10(b),
11, or 13 of this form, within one business day of receipt of such request,
and to send the incorporated documents by first class mail or other equally
prompt means. This includes information contained in documents filed
subsequent to the effective date of the registration statement through the
date of responding to the request.
(c) The Registrant hereby undertakes to supply by means of a post-effective
amendment all information concerning a transaction, and the company being
acquired involved therein, that was not the subject of and included in the
registration statement when it became effective.
(d) Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the
II-2
<PAGE> 47
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> 48
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Santa Monica, State of
California, on this 23rd day of April, 1999.
FREMONT GENERAL CORPORATION
By: /s/ LOUIS J. RAMPINO
-----------------------------------
Louis J. Rampino
President and Chief Operating
Officer
II-4
<PAGE> 49
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints James A. McIntyre, Louis J. Rampino and
Wayne R. Bailey, jointly and severally, as his attorney-in-fact and agent, each
with full power of substitution and resubstitution, for him and in his name,
place and stead, in any and all capacities, to sign any and all amendments
(including post-effective amendments) to this Registration Statement, and to
file the same, with exhibits thereto and other documents in connection
therewith, with the Securities and Exchange Commission, granting until said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite and necessary to be done in
connection therewith, as fully and to all intents and purposes as he might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, or their or his substitute, may
lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURES TITLE DATE
---------- ----- ----
<C> <S> <C>
/s/ JAMES A. MCINTYRE Chairman of the Board, April 23, 1999
- ------------------------------------------------ Chief Executive Officer
James A. McIntyre and Director (Principal
Executive Officer)
/s/ LOUIS J. RAMPINO President, Chief April 23, 1999
- ------------------------------------------------ Operating Officer and
Louis J. Rampino Director
/s/ WAYNE R. BAILEY Executive Vice President, April 23, 1999
- ------------------------------------------------ Treasurer, Chief
Wayne R. Bailey Financial Officer
(Principal Financial
Officer) and Director
/s/ JOHN A. DONALDSON Senior Vice President, April 23, 1999
- ------------------------------------------------ Controller and Chief
John A. Donaldson Accounting Officer
(Principal Accounting
Officer)
/s/ HOUSTON I. FLOURNOY Director April 23, 1999
- ------------------------------------------------
Houston I. Flournoy
/s/ C. DOUGLAS KRANWINKLE Director April 23, 1999
- ------------------------------------------------
C. Douglas Kranwinkle
/s/ DAVID W. MORRISROE Director April 23, 1999
- ------------------------------------------------
David W. Morrisroe
/s/ DICKINSON C. ROSS Director April 23, 1999
- ------------------------------------------------
Dickinson C. Ross
</TABLE>
II-5
<PAGE> 50
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
<S> <C>
4.1 Indenture dated as of March 1, 1999 between the Registrant
and The First National Bank of Chicago (incorporated by
reference to exhibit 4.9 to the Registrant's Annual Report
on Form 10-K for the year ended December 31, 1998 (File No.
1-8007))
4.2 Registration Rights Agreement dated as of March 17, 1999
among the Registrant and the Initial Purchasers.
(incorporated by reference to exhibit 4.10 to the
Registrant's Annual Report on Form 10-K for the year ended
December 31, 1998 (File No. 1-8007))
4.3 Specimen Series B 7.70% Senior Note due 2004
4.4 Specimen Series B 7.875% Senior Note due 2009
5 Opinion of Wilson Sonsini Goodrich & Rosati
23.1 Consent of Ernst & Young LLP
23.2 Consent of Wilson Sonsini Goodrich & Rosati (included in
Exhibit 5)
24 Power of Attorney (see signature page)
25 Statement of Eligibility of Trustee
99.1 Form of Letter of Transmittal with respect to Exchange Offer
99.2 Form of Notice of Guaranteed Delivery
99.3 Form of Depositary Agreement
</TABLE>
<PAGE> 1
EXHIBIT 4.3
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITORY (AS
DEFINED IN THE INDENTURE) OR A NOMINEE THEREOF. THIS GLOBAL SECURITY IS
EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE
DEPOSITORY OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE
INDENTURE AND, UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR
SECURITIES IN DEFINITIVE FORM, THIS GLOBAL SECURITY MAY NOT BE TRANSFERRED
EXCEPT AS A WHOLE BY THE DEPOSITORY TO A NOMINEE OF THE DEPOSITORY, OR BY A
NOMINEE OF THE DEPOSITORY TO THE DEPOSITORY OR ANOTHER NOMINEE OF THE
DEPOSITORY, OR BY THE DEPOSITORY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITORY
OR A NOMINEE OF SUCH SUCCESSOR DEPOSITORY.
UNLESS THIS SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE COMPANY (AS
DEFINED BELOW) OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT,
AND ANY SECURITY ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER
NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS
MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC) ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
No. $_____________
CUSIP No.
FREMONT GENERAL CORPORATION
7.70% Senior Notes due 2004
Fremont General Corporation, a Nevada corporation (hereinafter called
the "Company", which term includes any successor corporation under the Indenture
referred to below), for value received, hereby promises to pay to Cede & Co. or
registered assigns, the principal sum of ______________________ ($___________)
on March 17, 2004, and to pay interest thereon from March 17, 1999 or from the
most recent date to which interest has been paid or duly provided for,
semiannually on March 17 and September 17 in each year (each, an "Interest
Payment Date"), commencing September 17, 1999, at the rate of 7.70% per annum,
until the principal hereof is paid or duly made available for payment. Interest
on this Note shall be calculated on the basis of a 360-day year consisting of
twelve 30-day months. The interest so payable and punctually paid or duly
provided for on any Interest Payment Date will, as provided in such Indenture,
be paid to the Person in whose name this Note (or one or more Predecessor
Securities) is registered at the close of business on the Regular Record Date
for such interest, which shall be the March 2 or September 2 (whether or not a
Business Day), as the case may be, next preceding such Interest Payment Date.
Any such interest which is payable, but is not
<PAGE> 2
punctually paid or duly provided for, on any Interest Payment Date shall
forthwith cease to be payable to the registered Holder hereof on the relevant
Regular Record Date by virtue of having been such Holder, and may be paid to the
Person in whose name this Note (or one or more Predecessor Securities) is
registered at the close of business on a Special Record Date for the payment of
such Defaulted Interest to be fixed by the Company, notice whereof shall be
given to the Holders of Notes of this series not less than 30 days prior to such
Special Record Date, or may be paid at any time in any other lawful manner not
inconsistent with the requirements of any securities exchange on which the Notes
may be listed, and upon such notice as may be required by such exchange, all as
more fully provided in such Indenture.
Payment of the principal of and the interest on this Note will be made
at the office or agency of the Company maintained for that purpose in The
Borough of Manhattan, The City of New York, in such coin or currency of the
United States of America as at the time of payment is legal tender for payment
of public and private debts; provided, however, that, at the option of the
Company, interest may be paid by check mailed to the address of the Person
entitled thereto as such address shall appear in the Security Register;
provided, further, that payment to the Depository Trust Company or any successor
depository ("DTC") may be made by wire transfer to the account designated by DTC
or such successor depository in writing.
This Note is one of a duly authorized issue of securities of the Company
(herein called the "Notes") issued and to be issued in one or more series under
an Indenture dated as of March 1, 1999 (herein called, together with all
indentures supplemental thereto, the "Indenture") between the Company and The
First National Bank of Chicago, as Trustee (herein called the "Trustee", which
term includes any successor trustee under the Indenture), to which Indenture and
all indentures supplemental thereto reference is hereby made for a statement of
the respective rights, limitations of rights, duties and immunities thereunder
of the Company, the Trustee and the Holders of the Notes, and of the terms upon
which the Notes are, and are to be, authenticated and delivered. This Note is
one of the series designated on the face hereof, limited (subject to exceptions
provided in the Indenture) to the aggregate principal amount specified in the
Officers' Certificate dated March 17, 1999 establishing the terms of the Notes
pursuant to the Indenture.
This Note is redeemable at the option of the Company, in whole at any
time or in part from time to time, at a redemption price equal to the greater of
(i) 100% of the principal amount of this Note to be redeemed and (ii) the sum,
as determined by the Independent Investment Banker (as defined below), of the
present values of the principal amount of this Note to be redeemed and the
remaining scheduled payments of interest on the principal amount of this Note to
be redeemed from the redemption date to March 17, 2004 (the "Remaining Term"),
in each case, discounted from their respective scheduled payment dates to the
redemption date on a semiannual basis (assuming a 360-day year consisting of
twelve 30-day months) at the Adjusted Treasury Rate (as defined below) plus,
accrued but unpaid interest thereon to the redemption date.
"Adjusted Treasury Rate" means, with respect to any redemption date, the
rate per annum equal to the semiannual equivalent yield to maturity of the
Comparable Treasury Issue, calculated on the third Business Day preceding such
redemption date using a price for the
-2-
<PAGE> 3
Comparable Treasury Issue (expressed as a percentage of its principal amount)
equal to the Comparable Treasury Price for such redemption date, plus 50 basis
points.
"Comparable Treasury Issue" means the United States Treasury security
selected by the Independent Investment Banker as having a maturity comparable to
the Remaining Term that would be utilized, at the time of selection and in
accordance with customary financial practice, in pricing new issues of corporate
debt securities of comparable maturity to the Remaining Term.
"Comparable Treasury Price" means, with respect to any redemption date,
the average of the Reference Treasury Dealer Quotations for such redemption
date, after excluding the highest and lowest such Reference Treasury Dealer
Quotations, or if the Trustee obtains fewer than four such Reference Treasury
Dealer Quotations, the average of all such Reference Treasury Dealer Quotations.
"Independent Investment Banker" means one of the Reference Treasury
Dealers appointed by the Trustee after consultation with the Company.
"Reference Treasury Dealer" means each of Merrill Lynch Government
Securities Inc., Credit Suisse First Boston Corporation, Goldman, Sachs & Co.
and Warburg Dillon Read LLC, their affiliates, their respective successors and
any other primary U.S. Government securities dealer in New York City (each a
"Primary Treasury Dealer") selected by the Company in addition to, or in
substitution for, such firm; provided, however, that if any of the foregoing
shall cease to be a Primary Treasury Dealer, the Company will substitute another
Primary Treasury Dealer.
"Reference Treasury Dealer Quotations" means, with respect to each
Reference Treasury Dealer and any redemption date, the average, as determined by
the Trustee, of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) quoted in
writing to the Trustee by such Reference Treasury Dealer at 5:00 p.m., New York
City time, on the third Business Day preceding such redemption date.
Notice of any redemption will be mailed at least 30 days but not more
than 60 days before the redemption date to the Holder hereof at its address as
such address shall appear in the Security Register of the Company. Unless the
Company defaults in payment of the redemption price and accrued interest on and
after the redemption date, interest will cease to accrue on the principal amount
of this Note called for redemption.
Except as provided above, this Note is not redeemable by the Company
prior to maturity and is not subject to any sinking fund.
If an Event of Default with respect to the Notes shall occur and be
continuing, the principal of the Notes may be declared due and payable in the
manner and with the effect provided in the Indenture.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities of each series issued
under the Indenture at any time by the Company and the Trustee with the consent
of the Holders of not less than a majority in aggregate principal amount of the
Securities at the time Outstanding of each series affected thereby. The
Indenture also contains provisions permitting the Holders of specified
percentages in aggregate principal
-3-
<PAGE> 4
amount of the Securities of any series at the time Outstanding, on behalf of the
Holders of all Securities of such series, to waive compliance by the Company
with certain provisions of the Indenture and certain past defaults under the
Indenture and their consequences. Any such consent or waiver by the Holder of
this Note shall be conclusive and binding upon such Holder and upon all future
Holders of this Note and of any Notes issued upon the registration of transfer
hereof or in exchange herefor or in lieu hereof, whether or not notation of such
consent or waiver is made upon this Note.
No reference herein to the Indenture and no provision of this Note or of
the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of and interest on this Note,
at the times, place and rate, and in the coin or currency, herein and in the
Indenture prescribed.
As provided in the Indenture and subject to certain limitations set
forth therein and in this Note, the transfer of this Note may be registered on
the Security Register upon surrender of this Note for registration of transfer
at the office or agency of the Company maintained for the purpose in any place
where the principal of and interest on this Note are payable, duly endorsed by,
or accompanied by a written instrument of transfer in form satisfactory to the
Company and the Security Registrar duly executed by, the Holder hereof or by his
attorney duly authorized in writing, and thereupon one or more new Notes of this
series and of like tenor, of authorized denominations and for the same aggregate
principal amount, will be issued to the designated transferee or transferees.
The Notes are issuable only in registered form without coupons in the
denominations specified in the Officers' Certificate dated March 17, 1999
establishing the terms of the Notes, all as more fully provided in the Indenture
and such Officers' Certificate. As provided in the Indenture and in such
Officers' Certificate, and subject to certain limitations set forth in the
Indenture, such Officers' Certificate and in this Note, the Notes are
exchangeable for a like aggregate principal amount of Notes of this series in
different authorized denominations, as requested by the Holders surrendering the
same.
No service charge shall be made for any such registration of transfer or
exchange, but the Company may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith, other than in
certain cases provided in the Indenture.
Prior to due presentment of this Note for registration of transfer, the
Company, the Trustee and any agent of the Company or the Trustee may treat the
Person in whose name this Note is registered as the owner hereof for all
purposes, whether or not this Note be overdue, and neither the Company, the
Trustee nor any such agent shall be affected by notice to the contrary.
The Indenture contains provisions whereby (i) the Company may be
discharged from its obligations with respect to the Notes (subject to certain
exceptions) or (ii) the Company may be released from its obligation under
specified covenants and agreements in the Indenture, in each case if the Company
irrevocably deposits with the Trustee money or U.S. Government
-4-
<PAGE> 5
Obligations sufficient to pay and discharge the entire indebtedness on all Notes
of this series, and satisfies certain other conditions, all as more fully
provided in the Indenture.
This Note shall be governed by and construed in accordance with the laws
of the State of New York.
All terms used in this Note which are defined in the Indenture shall
have the meanings assigned to them in the Indenture.
-5-
<PAGE> 6
Unless the certificate of authentication hereon has been executed by or
on behalf of the Trustee under the Indenture by the manual signature of one of
its authorized signatories, this Note shall not be entitled to any benefits
under the Indenture or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
Dated:
[Seal] FREMONT GENERAL CORPORATION
Attest: By:
Name: Name:
Title: Title:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series designated therein referred
to in the within-mentioned Indenture.
THE FIRST NATIONAL BANK OF CHICAGO
as Trustee
By:
Authorized Signatory
-6-
<PAGE> 7
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of
this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM -- as tenants in common UNIF GIFT MIN ACT -- _____ Custodian_____
TEN ENT -- as tenants by the entireties (Cust) (Minor)
JT TEN -- as joint tenants with right of survivorship
Under Uniform Gifts to Minors
and not as tenants in common Act_____________________________
(State)
Additional abbreviations may also be used though not in the above list.
FOR VALUE RECEIVED, the undersigned registered holder hereby sell(s), assign(s)
and transfer(s) unto
PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE
- ---------------------------------------------------
- ---------------------------------------------------
- --------------------------------------------------------------------------------
PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS OF ASSIGNEE
- --------------------------------------------------------------------------------
the within Note and all rights thereunder, hereby irrevocably constituting and
appointing
- --------------------------------------------------------------------------------
to transfer said Note on the books of the Company with full power of
substitution in the premises.
Dated:
Notice: The signature to this assignment must correspond with the name
as it appears upon the face of the within Note in every particular,
without alteration or enlargement or any change whatever.
-7-
<PAGE> 1
EXHIBIT 4.4
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITORY (AS
DEFINED IN THE INDENTURE) OR A NOMINEE THEREOF. THIS GLOBAL SECURITY IS
EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE
DEPOSITORY OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE
INDENTURE AND, UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR
SECURITIES IN DEFINITIVE FORM, THIS GLOBAL SECURITY MAY NOT BE TRANSFERRED
EXCEPT AS A WHOLE BY THE DEPOSITORY TO A NOMINEE OF THE DEPOSITORY, OR BY A
NOMINEE OF THE DEPOSITORY TO THE DEPOSITORY OR ANOTHER NOMINEE OF THE
DEPOSITORY, OR BY THE DEPOSITORY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITORY
OR A NOMINEE OF SUCH SUCCESSOR DEPOSITORY.
UNLESS THIS SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE COMPANY (AS
DEFINED BELOW) OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT,
AND ANY SECURITY ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER
NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS
MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC) ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
No. $_____________
CUSIP No.
FREMONT GENERAL CORPORATION
7.875% Senior Notes due 2009
Fremont General Corporation, a Nevada corporation (hereinafter called
the "Company", which term includes any successor corporation under the Indenture
referred to below), for value received, hereby promises to pay to Cede & Co. or
registered assigns, the principal sum of _______________________ ($____________)
on March 17, 2009, and to pay interest thereon from March 17, 1999 or from the
most recent date to which interest has been paid or duly provided for,
semiannually on March 17 and September 17 in each year (each, an "Interest
Payment Date"), commencing September 17, 1999, at the rate of 7.875% per annum,
until the principal hereof is paid or duly made available for payment. Interest
on this Note shall be calculated on the basis of a 360-day year consisting of
twelve 30-day months. The interest so payable and punctually paid or duly
provided for on any Interest Payment Date will, as provided in such Indenture,
be paid to the Person in whose name this Note (or one or more Predecessor
Securities) is registered at the close of business on the Regular Record Date
for such interest, which shall be the March 2 or September 2 (whether or not a
Business Day), as the case may be, next preceding such Interest Payment Date.
Any such interest which is payable, but is not
<PAGE> 2
punctually paid or duly provided for, on any Interest Payment Date shall
forthwith cease to be payable to the registered Holder hereof on the relevant
Regular Record Date by virtue of having been such Holder, and may be paid to the
Person in whose name this Note (or one or more Predecessor Securities) is
registered at the close of business on a Special Record Date for the payment of
such Defaulted Interest to be fixed by the Company, notice whereof shall be
given to the Holders of Notes of this series not less than 30 days prior to such
Special Record Date, or may be paid at any time in any other lawful manner not
inconsistent with the requirements of any securities exchange on which the Notes
may be listed, and upon such notice as may be required by such exchange, all as
more fully provided in such Indenture.
Payment of the principal of and the interest on this Note will be made
at the office or agency of the Company maintained for that purpose in The
Borough of Manhattan, The City of New York, in such coin or currency of the
United States of America as at the time of payment is legal tender for payment
of public and private debts; provided, however, that, at the option of the
Company, interest may be paid by check mailed to the address of the Person
entitled thereto as such address shall appear in the Security Register;
provided, further, that payment to the Depository Trust Company or any successor
depository ("DTC") may be made by wire transfer to the account designated by DTC
or such successor depository in writing.
This Note is one of a duly authorized issue of securities of the Company
(herein called the "Notes") issued and to be issued in one or more series under
an Indenture dated as of March 1, 1999 (herein called, together with all
indentures supplemental thereto, the "Indenture") between the Company and The
First National Bank of Chicago, as Trustee (herein called the "Trustee", which
term includes any successor trustee under the Indenture), to which Indenture and
all indentures supplemental thereto reference is hereby made for a statement of
the respective rights, limitations of rights, duties and immunities thereunder
of the Company, the Trustee and the Holders of the Notes, and of the terms upon
which the Notes are, and are to be, authenticated and delivered. This Note is
one of the series designated on the face hereof, limited (subject to exceptions
provided in the Indenture) to the aggregate principal amount specified in the
Officers' Certificate dated March 17, 1999 establishing the terms of the Notes
pursuant to the Indenture.
This Note is redeemable at the option of the Company, in whole at any
time or in part from time to time, at a redemption price equal to the greater of
(i) 100% of the principal amount of this Note to be redeemed and (ii) the sum,
as determined by the Independent Investment Banker (as defined below), of the
present values of the principal amount of this Note to be redeemed and the
remaining scheduled payments of interest on the principal amount of this Note to
be redeemed from the redemption date to March 17, 2009 (the "Remaining Term"),
in each case, discounted from their respective scheduled payment dates to the
redemption date on a semiannual basis (assuming a 360-day year consisting of
twelve 30-day months) at the Adjusted Treasury Rate (as defined below) plus,
accrued but unpaid interest thereon to the redemption date.
"Adjusted Treasury Rate" means, with respect to any redemption date, the
rate per annum equal to the semiannual equivalent yield to maturity of the
Comparable Treasury Issue, calculated on the third Business Day preceding such
redemption date using a price for the
-2-
<PAGE> 3
Comparable Treasury Issue (expressed as a percentage of its principal amount)
equal to the Comparable Treasury Price for such redemption date, plus 50 basis
points.
"Comparable Treasury Issue" means the United States Treasury security
selected by the Independent Investment Banker as having a maturity comparable to
the Remaining Term that would be utilized, at the time of selection and in
accordance with customary financial practice, in pricing new issues of corporate
debt securities of comparable maturity to the Remaining Term.
"Comparable Treasury Price" means, with respect to any redemption date,
the average of the Reference Treasury Dealer Quotations for such redemption
date, after excluding the highest and lowest such Reference Treasury Dealer
Quotations, or if the Trustee obtains fewer than four such Reference Treasury
Dealer Quotations, the average of all such Reference Treasury Dealer Quotations.
"Independent Investment Banker" means one of the Reference Treasury
Dealers appointed by the Trustee after consultation with the Company.
"Reference Treasury Dealer" means each of Merrill Lynch Government
Securities Inc., Credit Suisse First Boston Corporation, Goldman, Sachs & Co.
and Warburg Dillon Read LLC, their affiliates, their respective successors and
any other primary U.S. Government securities dealer in New York City (each a
"Primary Treasury Dealer") selected by the Company in addition to, or in
substitution for, such firm; provided, however, that if any of the foregoing
shall cease to be a Primary Treasury Dealer, the Company will substitute another
Primary Treasury Dealer.
"Reference Treasury Dealer Quotations" means, with respect to each
Reference Treasury Dealer and any redemption date, the average, as determined by
the Trustee, of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) quoted in
writing to the Trustee by such Reference Treasury Dealer at 5:00 p.m., New York
City time, on the third Business Day preceding such redemption date.
Notice of any redemption will be mailed at least 30 days but not more
than 60 days before the redemption date to the Holder hereof at its address as
such address shall appear in the Security Register of the Company. Unless the
Company defaults in payment of the redemption price and accrued interest on and
after the redemption date, interest will cease to accrue on the principal amount
of this Note called for redemption.
Except as provided above, this Note is not redeemable by the Company
prior to maturity and is not subject to any sinking fund.
If an Event of Default with respect to the Notes shall occur and be
continuing, the principal of the Notes may be declared due and payable in the
manner and with the effect provided in the Indenture.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities of each series issued
under the Indenture at any time by the Company and the Trustee with the consent
of the Holders of not less than a majority in aggregate principal amount of the
Securities at the time Outstanding of each series affected thereby. The
Indenture also contains provisions permitting the Holders of specified
percentages in aggregate principal
-3-
<PAGE> 4
amount of the Securities of any series at the time Outstanding, on behalf of the
Holders of all Securities of such series, to waive compliance by the Company
with certain provisions of the Indenture and certain past defaults under the
Indenture and their consequences. Any such consent or waiver by the Holder of
this Note shall be conclusive and binding upon such Holder and upon all future
Holders of this Note and of any Notes issued upon the registration of transfer
hereof or in exchange herefor or in lieu hereof, whether or not notation of such
consent or waiver is made upon this Note.
No reference herein to the Indenture and no provision of this Note or of
the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of and interest on this Note,
at the times, place and rate, and in the coin or currency, herein and in the
Indenture prescribed.
As provided in the Indenture and subject to certain limitations set
forth therein and in this Note, the transfer of this Note may be registered on
the Security Register upon surrender of this Note for registration of transfer
at the office or agency of the Company maintained for the purpose in any place
where the principal of and interest on this Note are payable, duly endorsed by,
or accompanied by a written instrument of transfer in form satisfactory to the
Company and the Security Registrar duly executed by, the Holder hereof or by his
attorney duly authorized in writing, and thereupon one or more new Notes of this
series and of like tenor, of authorized denominations and for the same aggregate
principal amount, will be issued to the designated transferee or transferees.
The Notes are issuable only in registered form without coupons in the
denominations specified in the Officers' Certificate dated March 17, 1999
establishing the terms of the Notes, all as more fully provided in the Indenture
and such Officers' Certificate. As provided in the Indenture and in such
Officers' Certificate, and subject to certain limitations set forth in the
Indenture, such Officers' Certificate and in this Note, the Notes are
exchangeable for a like aggregate principal amount of Notes of this series in
different authorized denominations, as requested by the Holders surrendering the
same.
No service charge shall be made for any such registration of transfer or
exchange, but the Company may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith, other than in
certain cases provided in the Indenture.
Prior to due presentment of this Note for registration of transfer, the
Company, the Trustee and any agent of the Company or the Trustee may treat the
Person in whose name this Note is registered as the owner hereof for all
purposes, whether or not this Note be overdue, and neither the Company, the
Trustee nor any such agent shall be affected by notice to the contrary.
The Indenture contains provisions whereby (i) the Company may be
discharged from its obligations with respect to the Notes (subject to certain
exceptions) or (ii) the Company may be released from its obligation under
specified covenants and agreements in the Indenture, in each case if the Company
irrevocably deposits with the Trustee money or U.S. Government
-4-
<PAGE> 5
Obligations sufficient to pay and discharge the entire indebtedness on all Notes
of this series, and satisfies certain other conditions, all as more fully
provided in the Indenture.
This Note shall be governed by and construed in accordance with the laws
of the State of New York.
All terms used in this Note which are defined in the Indenture shall
have the meanings assigned to them in the Indenture.
-5-
<PAGE> 6
Unless the certificate of authentication hereon has been executed by or
on behalf of the Trustee under the Indenture by the manual signature of one of
its authorized signatories, this Note shall not be entitled to any benefits
under the Indenture or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
Dated:
[Seal] FREMONT GENERAL CORPORATION
Attest: By:
Name: Name:
Title: Title:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series designated therein referred
to in the within-mentioned Indenture.
THE FIRST NATIONAL BANK OF CHICAGO
as Trustee
By:
Authorized Signatory
-6-
<PAGE> 7
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of
this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM -- as tenants in common UNIF GIFT MIN ACT -- _____Custodian_______
TEN ENT -- as tenants by the entireties (Cust) (Minor)
JT TEN -- as joint tenants with right of survivorship
Under Uniform Gifts to Minors
and not as tenants in common Act_____________________________
(State)
Additional abbreviations may also be used though not in the above list.
FOR VALUE RECEIVED, the undersigned registered holder hereby sell(s), assign(s)
and transfer(s) unto
PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE
- ---------------------------------------------------
- ---------------------------------------------------
- --------------------------------------------------------------------------------
PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS OF ASSIGNEE
- --------------------------------------------------------------------------------
the within Note and all rights thereunder, hereby irrevocably constituting and
appointing
- --------------------------------------------------------------------------------
to transfer said Note on the books of the Company with full power of
substitution in the premises.
Dated:
Notice: The signature to this assignment must correspond with the name
as it appears upon the face of the within Note in every particular,
without alteration or enlargement or any change whatever.
-7-
<PAGE> 1
EXHIBIT 5
[Wilson Sonsini Goodrich & Rosati letterhead]
April 23, 1999
Fremont General Corporation
2020 Santa Monica Boulevard
Santa Monica, CA 94304
Re: Registration Statement on Form S-4
Ladies and Gentlemen:
We have acted as counsel to Fremont General Corporation, a Nevada
corporation (the "Company"), in connection with the filing by the Company with
the Securities and Exchange Commission (the "Commission") on or about April 23,
1999 of a registration statement on Form S-4 (the "Registration Statement"),
under the Securities Act of 1933, as amended (the "Securities Act"). The
Registration Statement relates to a proposed exchange offer in which the Company
will offer to exchange up to $200,000,000 principal amount of its Series B 7.70%
Senior Notes due 2004 and $225,000,000 principal amount of its Series B 7.875%
Senior Notes due 2009 (collectively, the "Exchange Notes") for up to
$200,000,000 principal amount of its 7.70% Senior Notes due 2004 and
$225,000,000 principal amount of its 7.875% Senior Notes due 2009 (collectively,
the "Initial Notes"), respectively. The Initial Notes are, and the Exchange
Notes will upon issuance be, covered by that certain indenture dated March 1,
1999 (the "Indenture") by and between the Company and The First National Bank of
Chicago, as trustee (the "Trustee"). This opinion letter is delivered in
accordance with the requirements of Item 601(b)(5) of Regulation S-K under the
Securities Act.
In connection with this opinion, we have examined originals or copies,
certified or otherwise identified to our satisfaction, of: (i) the Registration
Statement, in the form filed with the Commission; (ii) the charter documents of
the Company, as currently in effect; (iii) the Indenture; (iv) the form of the
Exchange Notes; and (v) resolutions of the Board of Directors of the Company
relating to, among other things, the issuance and exchange of the Exchange Notes
for the Initial Notes and the filing of the Registration Statement. We also have
examined such other documents as we have deemed necessary or appropriate as a
basis for the opinions set forth below.
In our examination, we have assumed the legal capacity of all natural
persons, the genuineness of all signatures, the authenticity of all documents
submitted to us as originals, the conformity to original documents of all
documents submitted to us as certified or photostatic copies, and the
authenticity of the originals of such latter documents. As to certain facts
material to this opinion, we have relied without independent verification upon
oral or written statements and representations of officers and other
representatives of the Company and others.
<PAGE> 2
Based upon the foregoing, and subject to the assumptions and limitations
set forth herein, we are of the opinion that, when (i) the Registration
Statement, as finally amended (including all necessary post-effective
amendments, if any), shall have become effective under the Securities Act and
(ii) when the Exchange Notes are duly executed, attested, issued and delivered
by duly authorized officers of the Company, and authenticated by the Trustee,
all in accordance with the terms of the Indenture and the prospectus contained
in the Registration Statement, against surrender and cancellation of a like
principal amount of Initial Notes, the Exchange Notes issued by the Company will
be legally issued, and the Exchange Notes will constitute valid and binding
obligations of the Company, enforceable against the Company, in accordance with
their terms, except to the extent that enforcement thereof may be limited by (i)
bankruptcy, insolvency, reorganization, arrangement, moratorium, fraudulent
conveyance and other laws relating to or affecting creditors' rights generally,
and (ii) general principles of equity, whether such enforcement is considered in
a proceeding in equity or at law.
To the extent relevant to the opinions set forth above, we have assumed
that the Trustee is duly organized, validly existing and in good standing under
the laws of its jurisdiction of organization; that the Trustee is duly qualified
to engage in the activities contemplated by the Indenture and is duly qualified
and eligible under the terms of the Indenture to act as trustee thereunder; that
the Indenture was duly authorized, executed and delivered by the Trustee; that
the Indenture is a valid and binding obligation of the Trustee; that the Trustee
is in compliance, generally with respect to acting as a trustee under the
Indenture, with all applicable laws and regulations; and that the Trustee has
the requisite organizational and legal power and authority to perform its
obligations under the Indenture.
This opinion is given in respect of the Indenture and the Exchange Notes
only, and we express no opinion as to the legality, validity or binding effect
of any collateral agreement or other document or any other matter beyond the
matters expressly set forth herein.
We express no opinion as to the enforceability of provisions of the
Indenture or the Exchange Notes which provide that the assertion or employment
of any right or remedy shall not prevent the concurrent assertion or employment
of any other right or remedy, or that every right and remedy shall be cumulative
and in addition to every other right and remedy, or that any delay or omission
to exercise any right or remedy shall not impair any other right or remedy or
constitute a waiver thereof.
Members of our firm are admitted to the bar of the State of California
and we do not express any opinion as to the laws of any jurisdiction other than
the laws of the State of California and the federal laws of the United States,
and we express no opinion with respect to the applicability thereto, or the
effect thereon, of the laws of any other jurisdiction. In this regard, we note
that Section 1.13 of the Indenture provides that the Indenture and the Exchange
Notes are to be governed by the law of the State of New York. The opinions
expressed herein concerning the validity, binding effect and enforceability of
the Indenture and the Exchange Notes are intended to express our views on those
matters as if the substantive law of California were applicable. Furthermore, we
render no opinion with respect to said Section 1.13 (and the corresponding
provisions of the Exchange Notes) or the appropriate choice of laws with respect
to the Indenture or the Exchange Notes. We express no
<PAGE> 3
opinion with respect to compliance with state securities laws or with respect to
any state or federal fraudulent conveyance or transfer statutes.
Moreover, we express no opinion as to the applicability to the
obligations of the Company under the Indenture or the Exchange Notes of Sections
547 and 548 of Title 11 of the United States Code or applicable state law
(including, without limitation, Article 10 of the New York Debtor & Creditor Law
and Sections 3439 et seq. of the California Civil Code) relating to fraudulent
transfers.
This opinion is rendered solely for your benefit in connection with the
transactions described above. This opinion may not be used or relied upon by any
other person and may not be disclosed, quoted, filed with a governmental agency
or otherwise referred to without our prior written consent. However, we consent
to the filing of this opinion as an exhibit to the Registration Statement and
prospectus and to the use of our name under the caption "Legal Matters" in the
Registration Statement and any amendments thereto. In giving such consent, we do
not concede that we are experts within the meaning of the Securities Act or the
rules and regulations thereunder or that this consent is required by Section 7
of the Securities Act.
Very truly yours,
/s/ WILSON SONSINI GOODRICH & ROSATI
------------------------------------
WILSON SONSINI GOODRICH & ROSATI
Professional Corporation
<PAGE> 1
Exhibit 23.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-4, No. 333-_________) and related prospectus of
Fremont General Corporation for the registration of $425 million of senior notes
and to the incorporation by reference therein of our report dated March 22,
1999, with respect to the consolidated financial statements and schedules of
Fremont General Corporation included in its Annual Report (Form 10-K) for the
year ended December 31, 1998, filed with the Securities and Exchange Commission.
/s/ ERNST & YOUNG LLP
Los Angeles, California
April 23, 1999
<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY
OF A TRUSTEE PURSUANT TO SECTION 305(b)(2)
----------------------------
THE FIRST NATIONAL BANK OF CHICAGO
(EXACT NAME OF TRUSTEE AS SPECIFIED IN ITS CHARTER)
A NATIONAL BANKING ASSOCIATION 36-0899825
(I.R.S. EMPLOYER
IDENTIFICATION NUMBER)
ONE FIRST NATIONAL PLAZA, CHICAGO, ILLINOIS 60670-0126
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
THE FIRST NATIONAL BANK OF CHICAGO
ONE FIRST NATIONAL PLAZA, SUITE 0286
CHICAGO, ILLINOIS 60670-0286
ATTN: LYNN A. GOLDSTEIN, LAW DEPARTMENT (312) 732-6919
(NAME, ADDRESS AND TELEPHONE NUMBER OF AGENT FOR SERVICE)
-----------------------
FREMONT GENERAL CORPORATION
(EXACT NAME OF OBLIGOR AS SPECIFIED IN ITS CHARTER)
NEVADA 95-2815260
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER)
2020 SANTA MONICA BOULEVARD
SANTA MONICA, CALIFORNIA 90404
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
SERIES B 7.70% SENIOR NOTES DUE 2004
SERIES B 7.875% SENIOR NOTES DUE 2009
(TITLE OF INDENTURE SECURITIES)
<PAGE> 2
ITEM 1. GENERAL INFORMATION. FURNISH THE FOLLOWING INFORMATION AS TO THE
TRUSTEE:
(a) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISING AUTHORITY TO
WHICH IT IS SUBJECT.
Comptroller of Currency, Washington, D.C.;
Federal Deposit Insurance Corporation, Washington, D.C.;
The Board of Governors of the Federal Reserve System, Washington
D.C.
(b) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS.
The trustee is authorized to exercise corporate trust powers.
ITEM 2. AFFILIATIONS WITH THE OBLIGOR. IF THE OBLIGOR IS AN AFFILIATE OF THE
TRUSTEE, DESCRIBE EACH SUCH AFFILIATION.
No such affiliation exists with the trustee.
ITEM 16. LIST OF EXHIBITS. LIST BELOW ALL EXHIBITS FILED AS A PART OF THIS
STATEMENT OF ELIGIBILITY.
1. A copy of the articles of association of the trustee now in
effect.*
2. A copy of the certificates of authority of the trustee to
commence business.*
3. A copy of the authorization of the trustee to exercise corporate
trust powers.*
4. A copy of the existing by-laws of the trustee.*
5. Not Applicable.
6. The consent of the trustee required by Section 321(b) of the
Act.
<PAGE> 3
7. A copy of the latest report of condition of the trustee
published pursuant to law or the requirements of its supervising
or examining authority.
8. Not Applicable.
9. Not Applicable.
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, The First National Bank of Chicago, a national
banking association organized and existing under the laws of the United
States of America, has duly caused this Statement of Eligibility to be
signed on its behalf by the undersigned, thereunto duly authorized, all
in the City of Chicago and State of Illinois, on the 16th day of April,
1999.
THE FIRST NATIONAL BANK OF CHICAGO,
TRUSTEE
BY /s/ SANDRA L. CARUBA
-----------------------------------
SANDRA L. CARUBA
VICE PRESIDENT
* EXHIBIT 1, 2, 3 AND 4 ARE HEREIN INCORPORATED BY REFERENCE TO EXHIBITS BEARING
IDENTICAL NUMBERS IN ITEM 16 OF THE FORM T-1 OF THE FIRST NATIONAL BANK OF
CHICAGO, FILED AS EXHIBIT 25 TO THE REGISTRATION STATEMENT ON FORM S-3 OF U S
WEST CAPITAL FUNDING, INC., FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON
MAY 6, 1998 (REGISTRATION NO. 333-51907).
<PAGE> 4
EXHIBIT 6
THE CONSENT OF THE TRUSTEE REQUIRED
BY SECTION 321(b) OF THE ACT
April 16, 1999
Securities and Exchange Commission
Washington, D.C. 20549
Ladies and Gentlemen:
In connection with the qualification of the Indenture by and between Fremont
General Corporation and The First National Bank of Chicago, as Trustee, the
undersigned, in accordance with Section 321(b) of the Trust Indenture Act of
1939, as amended, hereby consents that the reports of examinations of the
undersigned, made by Federal or State authorities authorized to make such
examinations, may be furnished by such authorities to the Securities and
Exchange Commission upon its request therefor.
Very truly yours,
THE FIRST NATIONAL BANK OF CHICAGO
BY: /s/ SANDRA L. CARUBA
----------------------------------
SANDRA L. CARUBA
VICE PRESIDENT
<PAGE> 5
EXHIBIT 7
Legal Title of Bank: The First National Bank of Chicago Call Date: 12/31/98
ST-BK: 17-1630 FFIEC 031
Address: One First National Plaza, Ste 0460 Page RC-1
City, State Zip: Chicago, IL 60670
FDIC Certificate No.: 0/3/6/1/8
CONSOLIDATED REPORT OF CONDITION FOR INSURED COMMERCIAL
AND STATE-CHARTERED SAVINGS BANKS FOR DECEMBER 31, 1998
All schedules are to be reported in thousands of dollars. Unless otherwise
indicated, report the amount outstanding of the last business day of the
quarter.
SCHEDULE RC--BALANCE SHEET
<TABLE>
<CAPTION>
DOLLAR AMOUNTS IN THOUSANDS
RCFD BIL MIL THOU C400
---- ------------ ----
<S> <C> <C> <C>
ASSETS
1. Cash and balances due from depository institutions (from Schedule
RC-A): RCFD
a. Noninterest-bearing balances and currency and coin(1) ........ 0081 5,585,982 1.a
b. Interest-bearing balances(2) ................................. 0071 4,623,842 1.b
2. Securities
a. Held-to-maturity securities(from Schedule RC-B, column A) .... 1754 0 2.a
b. Available-for-sale securities (from Schedule RC-B, column D) . 1773 11,181,405 2.b
3. Federal funds sold and securities purchased under agreements to
resell .......................................................... 1350 9,853,544 3.
4. Loans and lease financing receivables:
a. Loans and leases, net of unearned income (from Schedule RCFD
RC-C) ........................................................ 2122 31,155,998 4.a
b. LESS: Allowance for loan and lease losses .................... 3123 411,963 4.b
c. LESS: Allocated transfer risk reserve ........................ 3128 3,884 4.c
d. Loans and leases, net of unearned income, allowance, and RCFD
reserve (item 4.a minus 4.b and 4.c) ......................... 2125 30,740,151 4.d
5. Trading assets (from Schedule RD-D) ............................. 3545 7,635,778 5.
6. Premises and fixed assets (including capitalized leases) ........ 2145 739,925 6.
7. Other real estate owned (from Schedule RC-M) .................... 2150 4,827 7.
8. Investments in unconsolidated subsidiaries and associated
companies (from Schedule RC-M) .................................. 2130 202,359 8.
9. Customers' liability to this bank on acceptances outstanding .... 2155 269,516 9.
10. Intangible assets (from Schedule RC-M) .......................... 2143 291,665 10.
11. Other assets (from Schedule RC-F) ............................... 2160 3,071,912 11.
12. Total assets (sum of items 1 through 11) ........................ 2170 74,200,906 12.
</TABLE>
- ----------
(1) Includes cash items in process of collection and unposted debits.
(2) Includes time certificates of deposit not held for trading.
<PAGE> 6
Legal Title of Bank: The First National Bank of Chicago Call Date: 12/31/98
ST-BK: 17-1630 FFIEC 031
Address: One First National Plaza, Ste 0460 Page RC-2
City, State Zip: Chicago, IL 60670
FDIC Certificate No.: 0/3/6/1/8
<TABLE>
<CAPTION>
SCHEDULE RC-CONTINUED
DOLLAR AMOUNTS IN
THOUSANDS
<S> <C> <C> <C>
LIABILITIES
13. Deposits:
a. In domestic offices (sum of totals of columns A and C RCON
from Schedule RC-E, part 1) .................................. 2200 22,524,140 13.a
(1) Noninterest-bearing(1) ................................... 6631 10,141,937 13.a1
(2) Interest-bearing ......................................... 6636 12,382,203 13.a2
b. In foreign offices, Edge and Agreement subsidiaries, and RCFN
IBFs (from Schedule RC-E, part II) ........................... 2200 19,691,237 13.b
(1) Noninterest bearing ...................................... 6631 408,126 13.b1
(2) Interest-bearing ......................................... 6636 19,283,111 13.b2
14. Federal funds purchased and securities sold under agreements
to repurchase: .................................................. RCFD 2800 9,113,686 14
15. a. Demand notes issued to the U.S. Treasury ..................... RCON 2840 120,599 15.a
b. Trading Liabilities(from Sechedule RC-D) ..................... RCFD 3548 6,797,927 15.b
16. Other borrowed money: RCFD
a. With original maturity of one year or less ................... 2332 5,385,355 16.a
b. With original maturity of more than one year ................. A547 327,126 16.b
c. With original maturity of more than three years .............. A548 316,411 16.c
17. Not applicable
18. Bank's liability on acceptance executed and outstanding ......... 2920 269,516 18.
19. Subordinated notes and debentures ............................... 3200 2,400,000 19.
20. Other liabilities (from Schedule RC-G) .......................... 2930 2,137,443 20.
21. Total liabilities (sum of items 13 through 20) .................. 2948 69,083,440 21.
22. Not applicable
EQUITY CAPITAL
23. Perpetual preferred stock and related surplus ................... 3838 0 23.
24. Common stock .................................................... 3230 200,858 24.
25. Surplus (exclude all surplus related to preferred stock) ........ 3839 3,201,435 25.
26. a. Undivided profits and capital reserves ....................... 3632 1,695,446 26.a
b. Net unrealized holding gains (losses) on available-for-sale
securities ................................................... 8434 6,349 26.b
27. Cumulative foreign currency translation adjustments ............. 3284 13,378 27.
28. Total equity capital (sum of items 23 through 27) ............... 3210 5,117,466 28.
29. Total liabilities, limited-life preferred stock, and equity
capital (sum of items 21, 22, and 28) ........................... 3300 74,200,906 29.
</TABLE>
Memorandum
To be reported only with the March Report of Condition.
1. Indicate in the box at the right the number of the statement below that
best describes the most comprehensive level of auditing work performed for
the bank by independent external auditors as of any date during
1996 ........................................RCFD 6724 N/A Number
M.1.
1 = Independent audit of the bank conducted in accordance with generally
accepted auditing standards by a certified public accounting firm which
submits a report on the bank
2 = Independent audit of the bank's parent holding company conducted in
accordance with generally accepted auditing standards by a certified public
accounting firm which submits a report on the consolidated holding company
(but not on the bank separately)
3 = Directors' examination of the bank conducted in accordance with generally
accepted auditing standards by a certified public accounting firm (may be
required by state chartering authority)
4 = Directors' examination of the bank performed by other external auditors
(may be required by state chartering authority)
5 = Review of the bank's financial statements by external auditors
6 = Compilation of the bank's financial statements by external auditors
7 = Other audit procedures (excluding tax preparation work)
8 = No external audit work
- ----------
(1) Includes total demand deposits and noninterest-bearing time and savings
deposits.
<PAGE> 1
FREMONT GENERAL CORPORATION
LETTER OF TRANSMITTAL
OFFER TO EXCHANGE
<TABLE>
<S> <C>
$200,000,000 SERIES B $225,000,000 SERIES B
7.70% SENIOR NOTES DUE 2004 7.875% SENIOR NOTES DUE 2009
FOR FOR
$200,000,000 $225,000,000
7.70% SENIOR NOTES DUE 2004 7.875% SENIOR NOTES DUE 2009
</TABLE>
PURSUANT TO THE PROSPECTUS
DATED , 1999
THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M. NEW YORK
CITY TIME ON , , 1999, UNLESS EXTENDED (THE "EXPIRATION DATE")
PLEASE READ CAREFULLY THE ATTACHED INSTRUCTIONS
If you desire to accept the Exchange Offer, this Letter of Transmittal should be
completed,
signed, and submitted to the Exchange Agent:
FIRST CHICAGO TRUST COMPANY OF NEW YORK
<TABLE>
<S> <C> <C>
By Mail: By Hand Delivery: By Overnight Courier:
Corporate Actions Dept. c/o Securities Transfer and Corporate Actions Dept.
Suite 4660 Reporting Services Inc. Suite 4680
PO Box 2569 100 William Street, Galleria 14 Wall Street, 8th Flr.
Jersey City, NJ 07303-2569 New York, NY 10038 New York, NY 10005
Attn: Corporate Actions Dept.
</TABLE>
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET
FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY.
The Information Agent:
------------------------------------------------------------
------------------------------------------------------------
------------------------------------------------------------
------------------------------------------------------------
FOR ANY QUESTIONS REGARDING THIS LETTER OF TRANSMITTAL OR FOR ANY
ADDITIONAL INFORMATION YOU MAY CONTACT THE INFORMATION AGENT.
The undersigned hereby acknowledges receipt of the Prospectus dated
, 1999 (as it may be supplemented and amended from time to time, the
"Prospectus") of Fremont General Corporation, a Nevada corporation (the
"Company"), and this Letter of Transmittal (the "Letter of Transmittal") that
together constitute the Company's offer (the "Exchange Offer") to exchange up to
$200,000,000 principal amount of its Series B 7.70% Senior Notes due 2004 and up
to $225,000,000 principal amount of its Series B 7.875% Senior Notes due 2009
(collectively, the "Exchange Notes") for up to $200,000,000 principal amount of
its 7.70% Senior Notes due 2004 and up to $225,000,000 principal amount of its
7.875% Senior Notes due 2009 (collectively, the "Initial Notes"), respectively,
from the registered holders (individually, a "Holder" and collectively, the
"Holders") thereof.
Capitalized terms used but not defined herein have the meanings ascribed to
them in the Prospectus.
The undersigned hereby tenders the Initial Notes described in Box 1 herein,
upon the terms and subject to the conditions described in the Prospectus and
this Letter of Transmittal. The undersigned is the Holder of all such Initial
Notes and the undersigned represents that it has received from each beneficial
owner of the tendered Initial Notes
<PAGE> 2
("Beneficial Owners") valid instructions which authorize and instruct the
undersigned to take the action described in this Letter of Transmittal.
Subject to, and effective upon, the acceptance for exchange of the tendered
Initial Notes, the undersigned hereby exchanges, assigns and transfers to, or
upon the order of, the Company all right, title, and interest in, to and under
the tendered Initial Notes.
If Initial Notes not tendered or not exchanged are to be delivered to a
person other than to the Holder of the Initial Notes tendered or to an address
other than that of the Holder of such Initial Notes, such Holder should so
indicate in the section of this Letter of Transmittal entitled "Special Delivery
Instructions" below (see Box 2).
The undersigned hereby irrevocably constitutes and appoints the Exchange
Agent as the true and lawful agent and attorney in fact of the undersigned with
respect to the tendered Initial Notes, with full power of substitution (such
power of attorney being deemed to be an irrevocable power coupled with an
interest), to (i) deliver the tendered Initial Notes to the Company or cause
ownership of the tendered Initial Notes to be transferred to, or upon the order
of, the Company, on the books of the registrar for the Initial Notes and deliver
all accompanying evidences of transfer and authenticity to, or upon the order
of, the Company upon receipt by the Exchange Agent, as the undersigned's agent,
of the Exchange Notes to which the undersigned is entitled upon acceptance by
the Company of the tendered Initial Notes pursuant to the Exchange Offer and
(ii) receive all benefits and otherwise exercise all rights of beneficial
ownership of the tendered Initial Notes, all in accordance with the terms of the
Exchange Offer.
The undersigned understands that tenders of Initial Notes pursuant to the
procedures described under the caption "The Exchange Offer -- Procedures for
Tendering" in the Prospectus and in the instructions hereto will constitute a
binding agreement between the undersigned and the Company upon the terms and
subject to the conditions of the Exchange Offer, subject only to withdrawal of
such tenders on the terms set forth in the Prospectus under the caption "The
Exchange Offer -- Withdrawal of Tenders." All authority herein conferred or
agreed to be conferred shall survive the death or incapacity of the undersigned
and any Beneficial Owner(s), and every obligation of the undersigned or any
Beneficial Owner(s) hereunder shall be binding upon the heirs, representatives,
successors, and assigns of the undersigned and such Beneficial Owner(s).
The undersigned hereby represents and warrants that the undersigned has
full power and authority to tender, exchange, assign, and transfer the tendered
Initial Notes and that the Company will acquire good and unemcumbered title
thereto, free and clear of all liens, restrictions, charges, encumbrances and
adverse claims when the tendered Initial Notes are acquired by the Company as
contemplated herein. The undersigned and each Beneficial Owner will, upon
request, execute and deliver any additional documents reasonably requested by
the Company or the Exchange Agent as necessary or desirable to complete and give
effect to the transactions contemplated hereby.
The undersigned hereby represents and warrants that the information set
forth in Box 1 is true and correct.
Holders of Initial Notes that are tendering their Initial Notes by
book-entry transfer to the Exchange Agent's account at DTC can execute the
tender through the DTC Automated Tender Offer Program ("ATOP"), for which the
transaction will be eligible. DTC participants that are accepting the Exchange
Offer must transmit their acceptance to DTC, which will verify the acceptance
and execute a book-entry delivery to the Exchange Agent's DTC account. DTC will
then send an Agent's Message to the Exchange Agent for its acceptance. DTC
participants may also accept the Exchange Offer prior to the Expiration Date by
submitting a Notice of Guaranteed Delivery through ATOP.
BY TENDERING INITIAL NOTES AND EXECUTING THIS LETTER OF TRANSMITTAL, THE
UNDERSIGNED HEREBY REPRESENTS AND AGREES THAT (i) THE UNDERSIGNED IS NOT AN
"AFFILIATE" OF THE COMPANY, (ii) ANY EXCHANGE NOTES TO BE RECEIVED BY THE
UNDERSIGNED ARE BEING ACQUIRED IN THE ORDINARY COURSE OF ITS BUSINESS, (iii) THE
UNDERSIGNED HAS NO ARRANGEMENT OR UNDERSTANDING WITH ANY PERSON TO PARTICIPATE
IN A DISTRIBUTION (WITHIN THE MEANING OF THE SECURITIES ACT) OF EXCHANGE NOTES
TO BE RECEIVED IN THE EXCHANGE OFFER AND (iv) IF THE UNDERSIGNED IS NOT A
BROKER-DEALER, THE UNDERSIGNED IS NOT ENGAGED IN, AND DOES NOT INTEND TO ENGAGE
IN, A DISTRIBUTION (WITHIN THE MEANING OF THE SECURITIES ACT) OF SUCH EXCHANGE
NOTES. BY TENDERING INITIAL NOTES PURSUANT TO THE EXCHANGE OFFER AND EXECUTING
THIS LETTER OF TRANSMITTAL, A HOLDER OF INITIAL NOTES THAT IS A BROKER-DEALER
REPRESENTS AND AGREES, CONSISTENT WITH CERTAIN INTERPRETIVE LETTERS ISSUED BY
THE SEC STAFF TO THIRD PARTIES, THAT SUCH INITIAL NOTES WERE ACQUIRED BY SUCH
BROKER-DEALER FOR ITS OWN ACCOUNT AS A RESULT OF MARKET-MAKING ACTIVITIES OR
OTHER TRADING ACTIVITIES (SUCH BROKER-DEALER THAT IS TENDERING INITIAL NOTES IS
HEREIN REFERRED TO AS A "PARTICIPATING BROKER-DEALER" ) AND IT WILL DELIVER A
PROSPECTUS
<PAGE> 3
(AS AMENDED OR SUPPLEMENTED FROM TIME TO TIME) MEETING THE REQUIREMENTS OF THE
SECURITIES ACT IN CONNECTION WITH ANY RESALE OF SUCH EXCHANGE NOTES (PROVIDED
THAT, BY SO ACKNOWLEDGING AND BY DELIVERING A PROSPECTUS, SUCH PARTICIPATING
BROKER-DEALER WILL NOT BE DEEMED TO ADMIT THAT IT IS AN "UNDERWRITER" WITHIN THE
MEANING OF THE SECURITIES ACT).
THE COMPANY HAS AGREED THAT, SUBJECT TO THE PROVISIONS OF THE REGISTRATION
RIGHTS AGREEMENT, THE PROSPECTUS, AS IT MAY BE AMENDED OR SUPPLEMENTED FROM TIME
TO TIME, MAY BE USED BY A PARTICIPATING BROKER-DEALER IN CONNECTION WITH RESALES
OF EXCHANGE NOTES RECEIVED IN EXCHANGE FOR INITIAL NOTES, WHERE SUCH INITIAL
NOTES WERE ACQUIRED BY SUCH PARTICIPATING BROKER-DEALER FOR ITS OWN ACCOUNT AS A
RESULT OF MARKET-MAKING ACTIVITIES OR OTHER TRADING ACTIVITIES. FOR A PERIOD
ENDING 90 DAYS AFTER THE EXCHANGE OFFER HAS BEEN COMPLETED, OR EARLIER WHEN ALL
SUCH PARTICIPATING BROKER-DEALERS NO LONGER OWN ANY TRANSFER RESTRICTED
SECURITIES. IN THAT REGARD, EACH PARTICIPATING BROKER-DEALER, BY TENDERING SUCH
INITIAL NOTES AND EXECUTING THIS LETTER OF TRANSMITTAL, AGREES THAT, UPON
RECEIPT OF NOTICE FROM THE COMPANY OF THE OCCURRENCE OF ANY EVENT OR THE
DISCOVERY OF ANY FACT THAT MAKES ANY STATEMENT CONTAINED OR INCORPORATED BY
REFERENCE IN THE PROSPECTUS UNTRUE IN ANY MATERIAL RESPECT OR WHICH CAUSES THE
PROSPECTUS TO OMIT TO STATE A MATERIAL FACT NECESSARY IN ORDER TO MAKE THE
STATEMENTS CONTAINED THEREIN, IN LIGHT OF THE CIRCUMSTANCES UNDER WHICH THEY
WERE MADE, NOT MISLEADING OR OF THE OCCURRENCE OF CERTAIN OTHER EVENTS SPECIFIED
IN THE REGISTRATION RIGHTS AGREEMENT, SUCH PARTICIPATING BROKER-DEALERS WILL
SUSPEND THE SALE OF EXCHANGE NOTES PURSUANT TO THE PROSPECTUS UNTIL THE COMPANY
HAS AMENDED OR SUPPLEMENTED THE PROSPECTUS TO CORRECT SUCH MISSTATEMENT OR
OMISSION AND HAS FURNISHED COPIES OF THE AMENDED OR SUPPLEMENTED PROSPECTUS TO
THE PARTICIPATING BROKER-DEALER OR THE COMPANY HAS GIVEN NOTICE THAT THE SALE OF
THE EXCHANGE NOTES MAY BE RESUMED, AS THE CASE MAY BE.
<PAGE> 4
PLEASE READ THIS ENTIRE LETTER OF TRANSMITTAL
CAREFULLY BEFORE COMPLETING THE BOXES.
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
BOX 1
DESCRIPTION OF INITIAL NOTES TENDERED
(ATTACH ADDITIONAL SIGNED PAGES, IF NECESSARY)
- -----------------------------------------------------------------------------------------------------------------------
AGGREGATE
NAMES AND ADDRESS(ES) OF REGISTER HOLDER(S) PRINCIPAL AGGREGATE
EXACTLY AS NAME(S) APPEAR(S) ON INITIAL NOTE CERTIFICATE AMOUNT PRINCIPAL
CERTIFICATE(S) NUMBER(S) OF REPRESENTED BY AMOUNT
(PLEASE FILL IN, IF BLANK) INITIAL NOTES* CERTIFICATE(S) TENDERED**
- -----------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------
------------------------------------------------------------------------
------------------------------------------------------------------------
------------------------------------------------------------------------
------------------------------------------------------------------------
------------------------------------------------------------------------
------------------------------------------------------------------------
------------------------------------------------------------------------
------------------------------------------------------------------------
TOTAL
------------------------------------------------------------------------
- --------------------------------------------
</TABLE>
* Need not be completed by persons tendering by book-entry transfer.
** The minimum permitted tender is $1,000 in principal amount of Initial
Notes. All other tenders must be in integral multiples of $1,000 of
principal amount. Unless otherwise indicated in this column, the
principal amount of all Initial Notes identified in this Box 1 or
delivered to the Exchange Agent herewith shall be deemed tendered. See
Instruction 4.
[ ] CHECK HERE IF INITIAL NOTES ARE BEING DELIVERED PURSUANT TO A NOTICE
OF GUARANTEED DELIVERY PREVIOUSLY DELIVERED TO THE EXCHANGE AGENT AND
COMPLETE "USE OF GUARANTEED DELIVERY" BELOW (Box 3).
- --------------------------------------------------------------------------------
<PAGE> 5
- --------------------------------------------------------------------------------
BOX 2
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 5, 6 AND 7)
TO BE COMPLETED ONLY IF EXCHANGE NOTES EXCHANGED FOR INITIAL NOTES AND
UNTENDERED INITIAL NOTES ARE TO BE SENT TO SOMEONE OTHER THAN THE UNDERSIGNED,
OR TO THE UNDERSIGNED AT AN ADDRESS OTHER THAN THAT SHOWN ABOVE.
Mail: [ ] Any Initial Notes not tendered hereby to:
Name(s):
------------------------------------------------------------------------------
(please print)
Address:
------------------------------------------------------------------------------
------------------------------------------------------------------------------
------------------------------------------------------------------------------
(Include Zip Code)
------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 6
- --------------------------------------------------------------------------------
BOX 3
USE OF GUARANTEED DELIVERY
(SEE INSTRUCTION 2)
TO BE COMPLETED ONLY IF INITIAL NOTES ARE BEING TENDERED BY MEANS OF A NOTICE
OF GUARANTEED DELIVERY.
Name(s) of Holder(s):
-------------------------------------------------------------------------------
Window Ticket No. (if any):
------------------------------------------------------------------------------
Date of Execution of Notice of Guaranteed Delivery:
------------------------------------------------------------------------------
Name of Eligible Institution that Guaranteed Delivery:
------------------------------------------------------------------------------
If Delivered by Book-Entry Transfer, complete the following:
------------------------------------------------------------------------------
DTC Participant Number:
------------------------------------------------------------------------------
VOI Number:
------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
BOX 4
DTC PARTICIPANT INFORMATION
(SEE INSTRUCTION 1)
TO BE COMPLETED BY ALL HOLDERS DELIVERING INITIAL NOTES. EXCHANGE NOTES WILL
BE DELIVERED ONLY IN BOOK-ENTRY FORM.
Name of Participant:
------------------------------------------------------------------------------
DTC Participant Number:
------------------------------------------------------------------------------
Contact at DTC Participant:
------------------------------------------------------------------------------
(Name)
------------------------------------------------------------------------------
(Telephone No.)
------------------------------------------------------------------------------
<PAGE> 7
BOX 5
TENDERING HOLDER SIGNATURE
(SEE INSTRUCTIONS 1 AND 5)
IN ADDITION, COMPLETE SUBSTITUTE FORM W-9
X
- ------------------------------------------------------------------------------
X
- ------------------------------------------------------------------------------
(SIGNATURE OF HOLDER(S)) OR AUTHORIZED SIGNATORY)
Note: The above lines must be signed by the registered holder(s) of Initial
Notes as their name(s) appear(s) therein or by person(s) authorized to become
registered holder(s) (evidence of such authorization must be transmitted with
this Letter of Transmittal). If signature is by a trustee, executor,
administrator, guardian, attorney-in-fact, officer, or other person acting in a
fiduciary or representative capacity, such person must set forth his or her full
title below. See Instruction 5
Name(s):
- ------------------------------------------------------------------------------
Capacity:
- ------------------------------------------------------------------------------
Address:
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
(ZIP CODE)
Daytime Area Code and Telephone Number:
- ------------------------------------------------------------------------------
Tax Identification or Social Security Number:
- ------------------------------------------------------------------------------
Signature Guarantee
(If required by Instruction 5)
AUTHORIZED SIGNATURE
X
- ------------------------------------------------------------------------------
Name:
- ------------------------------------------------------------------------------
(PLEASE PRINT)
Title:
- ------------------------------------------------------------------------------
Name of Firm:
- ------------------------------------------------------------------------------
(MUST BE AN ELIGIBLE INSTITUTION
AS DEFINED IN INSTRUCTION 2)
Address:
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
(ZIP CODE)
Area Code and Telephone Number:
- ------------------------------------------------------------------------------
Dated:
- ------------------------------------------------------------------------------
<PAGE> 8
PAYOR'S NAME: FIRST CHICAGO TRUST COMPANY OF NEW YORK
<TABLE>
<S> <C> <C>
SUBSTITUTE NAME: (If joint names, list first and circle the name of the person or entity
FORM W-9 whose number you enter in Part 1 below. See instructions if your name has
Department of the Treasury changed.
Internal Revenue Service ------------------------------------------------------
ADDRESS: --------------------------------------------
Payer's Request for Tax Payer ------------------------------------------------------
Identification Number (TIN) CITY, STATE AND ZIP CODE:
------------------------------------------------------
LIST ACCOUNT NUMBER(S) (OPTIONAL): --------------
------------------------------------------------------
------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------
PART 1 -- PLEASE PROVIDE YOUR TAXPAYER
IDENTIFICATION NUMBER IN THE BOX AT RIGHT ---------------------------------
AND CERTIFY BY SIGNING AND DATING BELOW Social Security Number
OR
---------------------------------
Taxpayer Identification Number
- ------------------------------------------------------------------------------------------------------------------
PART 2 -- Check the box if you are NOT
subject to backup withholding under the
provisions of section 3406(a)(1)(C) of the
Internal Revenue Code because (1) you have
not been notified that you are subject to
backup withholding as a result of failure
to report all interest or dividends or (2)
the Internal Revenue Service has notified
you that you are no longer subject to
backup holding. [ ]
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
THE INTERNAL REVENUE SERVICE DOES NOT REQUIRE YOUR CONSENT TO ANY PROVISION OF
THIS DOCUMENT OTHER THAN THE CERTIFICATIONS REQUIRED TO AVOID BACKUP
WITHHOLDING.
CERTIFICATION: UNDER THE PENALTIES OF PERJURY, I CERTIFY THAT THE INFORMATION
PROVIDED ON THIS FORM IS TRUE, CORRECT AND COMPLETE.
SIGNATURE: DATE:
NAME (PLEASE PRINT):
- --------------------------------------------------------------------------------
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING
OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE EXCHANGE OFFER. PLEASE
REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER
IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX IN PART
3 OF THE SUBSTITUTE FORM W-9.
<PAGE> 9
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identification number
has not been issued to me, and either (a) I have mailed or delivered an
application to receive a taxpayer identification number to the appropriate
Internal Revenue Service Center or Social Security Administration Office or (b)
I intend to mail or deliver an application in the near future. I understand
that, if I do not provide a taxpayer identification number to the exchange
agent, 31% of all reportable payments made to me will be withheld, but will be
refunded if I provide a certified taxpayer identification number within 60 days.
- --------------------------------------------------------------------------------
(Signature) Date
- --------------------------------------------------------------------------------
Name (Please Print)
<PAGE> 10
INSTRUCTIONS TO LETTER OF TRANSMITTAL
FORMING PART OF THE TERMS AND CONDITIONS OF THE EXCHANGE OFFER
1. Delivery of this Letter of Transmittal and Initial Notes. This Letter of
Transmittal is to be completed by Holders of tendered Initial Notes if
certificates representing such tendered Initial Notes are to be forwarded
herewith pursuant to the procedures set forth in the Prospectus under "The
Exchange Offer--Procedures for Tendering," unless delivery of such certificates
is to be made by book-entry transfer to the Exchange Agent's account maintained
by DTC through ATOP. For a Holder to properly tender Initial Notes pursuant to
the Exchange Offer, a properly completed and duly executed copy of this Letter
of Transmittal, including the Substitute Form W-9, and any other documents
required by this Letter of Transmittal must be received by the Exchange Agent at
its address set forth herein, and either (i) certificates for tendered Initial
Notes must be received by the Exchange Agent at its address set forth herein, or
(ii) such tendered Initial Notes must be transferred pursuant to the procedures
for book-entry transfer described in the Prospectus under the caption "The
Exchange Offer -- Procedures for Tendering" (and a confirmation of such transfer
received by the Exchange Agent) in each case on or prior to the Expiration Date.
The method of delivery of certificates for tendered Initial Notes, this Letter
of Transmittal and all other required documents to the Exchange Agent is at the
election and risk of the tendering Holder and the delivery will be deemed made
only when actually received by the Exchange Agent. If delivery is by mail,
registered mail with return receipt requested, properly insured, is recommended.
Instead of delivery by mail, it is recommended that the Holder use an overnight
or hand delivery service. In all cases, sufficient time should be allowed to
assure timely delivery. No Letter of Transmittal or tendered Initial Notes
should be sent to the Company. Neither the Company nor the Exchange Agent is
under any obligation to notify any tendering holder of the Company's acceptance
of tendered Initial Notes prior to the closing of the Exchange Offer. EXCHANGE
NOTES WILL BE DELIVERED ONLY IN BOOK-ENTRY FORM THROUGH DTC AND ONLY TO THE DTC
ACCOUNT OF THE TENDERING HOLDER OR THE TENDERING HOLDER'S CUSTODIAN.
ACCORDINGLY, A HOLDER WHO TENDERS INITIAL NOTES MUST SPECIFY IN BOX 4 THE DTC
PARTICIPANT NAME, NUMBER AND CONTACT INFORMATION TO WHICH THE EXCHANGE NOTES
SHOULD BE DELIVERED.
2. Guaranteed Delivery Procedures. If a Holder desires to tender Initial
Notes pursuant to the Exchange Offer and (a) certificates representing such
tendered Initial Notes are not immediately available, (b) time will not permit
such Holder(s) Letter of Transmittal, certificates representing such tendered
Initial Notes and all other required documents to reach the Exchange Agent on or
prior to the Expiration Date, or (c) the procedures for book-entry transfer
cannot be completed on or prior to the Expiration Date, such Holder may tender
Initial Notes with the effect that such tender will be deemed to have been
received on or prior to the Expiration Date if the procedures set forth below
and in the Prospectus under "The Exchange Offer -- Guaranteed Delivery
Procedures" (including the completion of Box 3 above) are followed. Pursuant to
such procedures, (i) the tender must be made by or through an Eligible
Institution (as defined in the Notice of Guaranteed Delivery), (ii) a properly
completed and duly executed Notice of Guaranteed Delivery, substantially in the
form provided by the Company herewith, or an Agent's Message with respect to a
guaranteed delivery that is accepted by the Company, must be received by the
Exchange Agent on or prior to the Expiration Date, and (iii) the certificates
for the tendered Initial Notes, in proper form for transfer (or a Book-Entry
Confirmation of the transfer of such tendered Initial Notes to the Exchange
Agent's account at DTC as described in the Prospectus), together with a Letter
of Transmittal (or manually signed facsimile thereof) properly completed and
duly executed, with any required signature guarantees and any other documents
required by the Letter of Transmittal or a properly transmitted Agent's Message,
must be received by the Exchange Agent within two business days after the date
of execution of the Notice of Guaranteed Delivery. Any Holder who wishes to
tender Initial Notes pursuant to the guaranteed delivery procedures described
above must ensure that the Exchange Agent receives the Notice of Guaranteed
Delivery relating to such tendered Initial Notes on or prior to the Expiration
Date. Failure to complete the guaranteed delivery procedures outlined above will
not, of itself, affect the validity or effect a revocation of any Letter of
Transmittal form properly completed and executed by an Eligible Holder who
attempted to use the guaranteed delivery process.
3. Beneficial Owner Instructions to Holders. Only a Holder in whose name
Initial Notes are registered on the books of the registrar (or the legal
representative or attorney-in-fact of such registered holder) may execute and
deliver this Letter of Transmittal. Any Beneficial Owner of Initial Notes who is
not the Holder must arrange promptly with the Holder to execute and deliver this
Letter of Transmittal on his or her behalf.
4. Partial Tenders. Tenders of Initial Notes will be accepted only in
integral multiples of $1,000 in principal amount. If less than the entire
principal amount of Initial Notes held by the Holder is tendered, the Holder
should fill in
<PAGE> 11
the principal amount tendered in the column labeled "Aggregate Principal Amount
Tendered" of the box entitled "Description of Initial Notes Tendered" (see Box
1) above. The entire principal amount of Initial Notes delivered to the Exchange
Agent will be deemed to have been tendered unless otherwise indicated. If the
entire principal amount of all Initial Notes held by the Holder is not tendered,
then new certificates representing the Initial Notes for the principal amount of
Initial Notes not tendered and Exchange Notes issued in exchange for any Initial
Notes tendered and accepted will be sent to the Holder at its registered
address, unless a different address is provided in the box entitled "Special
Delivery Instructions" (see Box 2) on this Letter of Transmittal, as soon as
practicable following the Expiration Date.
5. Signatures on the Letter of Transmittal; Bond Powers and Endorsements;
Guarantee of Signatures. If this Letter of Transmittal is signed by the
Holder(s) of the tendered Initial Notes, the signature must correspond with the
name(s) as written on the face of the tendered Initial Notes without alteration,
enlargement or any change whatsoever.
If any of the tendered Initial Notes are owned of record by two or more
joint owners, all such owners must sign this Letter of Transmittal. If any
tendered Initial Notes are held in different names, it will be necessary to
complete, sign and submit as many separate copies of the Letter of Transmittal
as there are different names in which such tendered Initial Notes are held.
If this Letter of Transmittal is signed by the Holder(s) of Initial Notes,
and Exchange Notes issued in exchange therefor are to be issued (and any
untendered principal amount of Initial Notes is to be reissued) in the name of
the Holder(s), then such Holder(s) need not and should not endorse any Initial
Notes, nor provide a separate bond power. In any other case, such Holder(s) must
either properly endorse the tendered Initial Notes or transmit a properly
completed separate bond power with this Letter of Transmittal with the
signature(s) on the endorsement or bond power guaranteed by a Medallion
Signature Guarantor (as defined below).
If this Letter of Transmittal is signed by a person other than the
Holder(s) of any tendered Initial Notes, such tendered Initial Notes must be
endorsed or accompanied by appropriate bond powers, in each case, signed as the
name(s) of the Holder(s) appear(s) on the tendered Initial Notes, with the
signature(s) on the endorsement or bond power guaranteed by a Medallion
Signature Guarantor.
If this Letter of Transmittal or any tendered Initial Notes or bond powers
are signed by trustees, executors, administrators, guardians, attorney-in-fact,
officers of corporations, others acting in a fiduciary or representative
capacity, such persons should so indicate when signing and, unless waived by the
Company, evidence satisfactory to the Company of their authority to so act must
be submitted with this Letter of Transmittal.
Signatures on this Letter of Transmittal must be guaranteed by a recognized
participant in the Securities Transfer Agents Medallion Program (a "Medallion
Signature Guarantor"), unless the Initial Notes are tendered (i) by the Holder
of the Initial Notes (or by a participant in DTC whose name appears on a
security position listing as the owner of such Initial Notes) who has not
completed Box 2 ("Special Delivery Instructions") on this Letter of Transmittal,
or (ii) for the account of a member firm of a registered national securities
exchange, a member of the National Association of Securities Dealers, Inc. or a
commercial bank or trust company having an office or correspondent in the United
States (each of the foregoing being referred to as an "Eligible Institution").
If the tendered Initial Notes are registered in the name of a person other than
the signer of the Letter of Transmittal or if Initial Notes not tendered are to
be returned to a person other than the Holder, then the signature on this Letter
of Transmittal accompanying the tendered Initial Notes must be guaranteed by a
Medallion Signature Guarantor as described above. Beneficial Owners whose
tendered Initial Notes are registered in the name of a broker, dealer,
commercial bank, trust company or other nominee must contact such broker,
dealer, commercial bank, trust company or other nominee if they desire to tender
such Initial Notes.
6. Special Delivery Instructions. Holders should indicate in Box 2
("Special Delivery Instructions") the name and address to which the Exchange
Notes and/or substitute Initial Notes for principal amounts not tendered or not
accepted for exchange are to be sent, if different from the name and address of
the person signing this Letter of Transmittal. In the case of issuance in a
different name, the taxpayer identification or social security number of the
person named must also be indicated.
7. Transfer Taxes. The Company will pay all transfer taxes, if any,
applicable to the exchange of Initial Notes pursuant to the Exchange Offer. If,
however, a transfer tax is imposed for any reason other than the transfer and
exchange of Initial Notes pursuant to the Exchange Offer, then the amount of any
such transfer taxes (whether imposed on the Holder or on any other person) will
be payable by the Holder. If satisfactory evidence of payment of such taxes or
<PAGE> 12
exemption therefrom is not submitted with this Letter of Transmittal, the amount
of such transfer taxes will be billed directly to such Holder.
It will not be necessary for transfer tax stamps to be affixed to the
tendered Initial Notes listed in this Letter or Transmittal.
8. Tax Identification Number. Federal income tax law requires that the
Holder(s) of any Initial Notes which are accepted for exchange must provide the
Exchange Agent (as payor) with its correct taxpayer identification number
("TIN"), which in the case of a Holder who is an individual, is his or her
social security number. If the Exchange Agent is not provided with the correct
TIN, the Holder may be subject to backup withholding and a $50 penalty imposed
by the Internal Revenue Service ("IRS"). (If withholding results in an
over-payment of taxes, a refund may be obtained.) Certain Holders (including,
among others, all corporations and certain foreign individuals) are not subject
to these backup withholding and reporting requirements. See the enclosed
"Guidelines for Certification of Taxpayer Identification Number on Substitute
Form W-9" for additional instructions.
To prevent backup withholding, each Holder of tendered Initial Notes must
provide such Holder's correct TIN by completing the Substitute Form W-9 set
forth herein, certifying that the TIN provided is correct (or that such Holder
if awaiting a TIN), and that (i) the Holder has not been notified by the IRS
that such Holder is subject to backup withholding as a result of failure to
report all interest or dividends or (ii) if previously so notified, the IRS has
notified the Holder that such Holder is no longer subject to backup withholding.
If the tendered Initial Notes are registered in more than one name or are not in
the name of the actual owner, consult the "Guidelines for Certification of
Taxpayer Identification Number on Substitute Form W-9" for information on which
TIN to report.
The Company reserves the right in its sole discretion to take whatever
steps are necessary to comply with the Company's obligations regarding backup
withholding.
9. Validity of Tenders. All questions as to the validity, form, eligibility
(including time of receipt), acceptance and withdrawal of tendered Initial Notes
will be determined by the Company in its sole discretion, which determination
will be final and binding. The Company reserves the right to reject any and all
Initial Notes not validly tendered or any Initial Notes the Company's acceptance
of which would, in the opinion of the Company or its counsel, be unlawful. The
Company also reserves the right to waive any conditions of the Exchange Offer or
defects or irregularities in tenders of Initial Notes as to any ineligibility of
any Holder who seeks to tender Initial Notes in the Exchange Offer. The
interpretation of the terms and conditions of the Exchange Offer (including this
Letter or Transmittal and the instructions hereto) by the Company shall be final
and binding on all parties. Unless waived, any defects or irregularities in
connection with tenders of Initial Notes must be cured within such time as the
Company shall determine. Neither the Company, the Exchange Agent nor any other
person shall be under any duty to give notification of defects or irregularities
with respect to tenders of Initial Notes, nor shall any of them incur any
liability for failure to give such notification. Tenders of Initial Notes will
not be deemed to have been made until such defects or irregularities have been
cured or waived. Any Initial Notes received by the Exchange Agent that are not
properly tendered and as to which the defects or irregularities have not been
cured or waived will be returned by the Exchange Agent to the Holders, unless
otherwise provided in this Letter of Transmittal, as soon as practicable
following the Expiration Date.
10. Waiver of Conditions. The Company reserves the absolute right to amend,
waive or modify any of the conditions in the Exchange Offer in the case of any
Initial Notes.
11. No Conditional Tender. No alternative, conditional, irregular, or
contingent tender of Initial Notes or transmittal of this Letter of Transmittal
will be accepted.
12. Mutilated, Lost, Stolen or Destroyed Notes. Any Holder whose tendered
Initial Notes have been mutilated, lost, stolen or destroyed should contact the
Trustee.
13. Requests for Assistance of Additional Copies. Questions and requests
for assistance and requests for additional copies of the Prospectus or this
Letter of Transmittal may be directed to the Information Agent at the address
and telephone number indicated on page 1. Holders may also contact their broker,
dealer, commercial bank, trust company or other nominees for assistance
concerning the Exchange Offer.
14. Acceptance of Tendered Notes and Issuances of Exchange Notes; Return of
Notes. Subject to the terms and conditions of the Exchange Offer, the Company
will accept for exchange all validity tendered Initial Notes as soon as
<PAGE> 13
practicable after the Expiration Date and will issue Exchange Notes therefor on
the fifth business day following the Expiration Date. For purposes of the
Exchange Offer, the Company shall be deemed to have accepted tendered Initial
Notes when, as and if the Company has given written or oral notice (immediately
followed in writing) thereof to the Exchange Agent. If any tendered Initial
Notes are not exchanged pursuant to the Exchange Offer for any reason, such
unexchanged Initial Notes will be returned, without expense, to the undersigned
at the address shown in Box 1 or at a different address as may be indicated
herein under "Special Delivery Instructions" (Box 2).
15. Withdrawal. Tenders may be withdrawn only pursuant to the procedures
set forth in the Prospectus under the caption "The Exchange Offer -- Withdrawal
of Tenders."
<PAGE> 1
FREMONT GENERAL CORPORATION
NOTICE OF GUARANTEED DELIVERY
OFFER TO EXCHANGE
$200,000,000 SERIES B $225,000,000 SERIES B
7.70% SENIOR NOTES DUE 2004 7.875% SENIOR NOTES DUE 2009
FOR FOR
$200,000,000 $225,000,000
7.70% SENIOR NOTES DUE 2004 7.875% SENIOR NOTES DUE 2009
PURSUANT TO THE PROSPECTUS
DATED _____, 1999
- --------------------------------------------------------------------------------
THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M. NEW YORK
CITY TIME ON ______, ______, 1999, UNLESS EXTENDED (THE "EXPIRATION DATE")
- --------------------------------------------------------------------------------
THE EXCHANGE AGENT FOR THE EXCHANGE OFFER IS:
FIRST CHICAGO TRUST COMPANY OF NEW YORK
<TABLE>
<S> <C> <C>
By Mail: By Hand Delivery: By Overnight Courier:
Corporate Actions Dept. c/o Securities Transfer and Corporate Actions Dept.
Suite 4660 Reporting Services Inc. Suite 4680
PO Box 2569 100 William Street, Galleria 14 Wall Street, 8th Flr.
Jersey City, NJ 07303-2569 New York, NY 10038 New York, NY 10005
Attn: Corporate Actions Dept.
By Facsimile Transmission:
(for eligible institutions only)
(201) 222-4720 or
(201) 222-4721
Confirm Facsimile Transmission Only by Telephone:
(201) 222-4707
</TABLE>
DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OTHER THAN
AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY.
As set forth in the Prospectus dated ______, 1999 (as it may be
supplemented and amended from time to time, the "Prospectus") of Fremont General
Corporation (the "Company") under "The Exchange Offer--Guaranteed Delivery
Procedures," and in the Instructions to the related Letter of Transmittal (the
"Letter of Transmittal"), if time will not permit the Letter of Transmittal to
reach the Exchange Agent, or the procedures for book-entry transfer cannot be
completed, on or prior to the Expiration Date, then this form, or one
substantially equivalent hereto, or an Agent's Message relating to the
guaranteed delivery procedures, must be used to accept the Company's offer (the
"Exchange Offer") to exchange up to $200,000,000 principal amount of
<PAGE> 2
its Series B 7.70% Senior Notes due 2004 and up to $225,000,000 principal amount
of its Series B 7.875% Senior Notes due 2009 (collectively, the "Exchange
Notes") for up to $200,000,000 principal amount of its 7.70% Senior Notes due
2004 and up to $225,000,000 principal amount of its 7.875% Senior Notes due 2009
(collectively, the "Initial Notes"), respectively, from the registered holders
(individually, a "Holder" and collectively, the "Holders") thereof.
This form must be delivered by an Eligible Institution (as defined
herein) by facsimile transmission, mail or hand delivery to the Exchange Agent
as set forth above. If a signature on the Letter of Transmittal is required to
be guaranteed by a Medallion Signature Guarantor under the instructions thereto,
such signature guarantee must appear in the applicable space provided in the
Letter of Transmittal. This form may not be used to guarantee signatures.
Questions and requests for additional copies of the Prospectus may be
directed to the Exchange Agent at the address above. Beneficial owners may also
contact their broker, dealer, commercial bank, trust company, or other nominee
for assistance concerning the Exchange Offer.
LADIES AND GENTLEMEN:
The undersigned hereby tender(s) to the Company, upon the terms and
subject to the conditions set forth in the Prospectus and the Letter of
Transmittal (receipt of which is hereby acknowledged), the principal amount of
the Initial Notes specified below pursuant to the guaranteed delivery procedures
set forth in the Prospectus under "The Exchange Offer--Guaranteed Delivery
Procedures" and in Instruction 2 to the Letter of Transmittal. The undersigned
hereby authorizes the Exchange Agent to deliver this Notice of Guaranteed
Delivery to the Company with respect to the Initial Notes tendered pursuant to
the Exchange Offer.
The undersigned understands that Initial Notes will be exchanged only
after timely receipt by the Exchange Agent of (i) such Initial Notes or a
Book-Entry Confirmation, and (ii) a Letter of Transmittal (or a manually signed
facsimile thereof), including by means of an Agent's Message, of the transfer of
such Initial Notes into the Exchange Agent's account at the Book-Entry Transfer
Facility with respect to such Initial Notes, properly completed and duly
executed with any signature guarantees and any other documents required by the
Letter of Transmittal within two business days after the execution hereof. The
undersigned also understands that the method of delivery of this Notice of
Guaranteed Delivery and any other required documents to the Exchange Agent is at
the election and sole risk of the Holder and the delivery will be deemed made
only when actually received by the Exchange Agent.
THE UNDERSIGNED UNDERSTANDS THAT TENDERS OF INITIAL NOTES WILL BE
ACCEPTED ONLY IN DENOMINATIONS OF $1,000 OR AN INTEGRAL MULTIPLE THEREOF. THE
UNDERSIGNED ALSO UNDERSTANDS THAT TENDERS OF INITIAL NOTES MAY BE WITHDRAWN AT
ANY TIME PRIOR TO THE EXPIRATION DATE.
All authority conferred or agreed to be conferred by this Notice of
Guaranteed Delivery shall not be affected by, and shall survive, the death or
incapacity of the undersigned and every obligation of the undersigned under this
Notice of Guaranteed Delivery and shall be binding upon the heirs, executors,
administrators, trustees in bankruptcy, personal and legal representatives,
successors and assigns of the undersigned.
All capitalized terms used herein but not defined herein shall have the
meanings ascribed to them in the Prospectus.
-2-
<PAGE> 3
PLEASE SIGN AND COMPLETE
<TABLE>
<S> <C>
- -----------------------------------------------------------------------------------------------
7.70% INITIAL NOTES DUE 2004
- -----------------------------------------------------------------------------------------------
Signature(s) of Holder(s) or Authorized Date:_______________________________________
Signatory:__________________________________
____________________________________________ Address:____________________________________
____________________________________________ ____________________________________________
Name(s) of Holder(s):_______________________ Area Code and Tel. No.:_____________________
____________________________________________ ____________________________________________
If Initial Notes will be delivered by book-entry
transfer, check book-entry transfer facility
Principal Amount of Initial Notes tendered: below:
____________________________________________ [ ] The Depository Trust Company
Certificate No.(s) of Initial Notes (if
available):
____________________________________________ DTC No.:____________________________________
Account No.:________________________________
- -----------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<S> <C>
- -----------------------------------------------------------------------------------------------
7.875% INITIAL NOTES DUE 2009
- -----------------------------------------------------------------------------------------------
Signature(s) of Holder(s) or Authorized Date:_______________________________________
Signatory:__________________________________
____________________________________________ Address:____________________________________
____________________________________________ ____________________________________________
Name(s) of Holder(s):_______________________ Area Code and Tel. No.:_____________________
____________________________________________ ____________________________________________
____________________________________________ If Initial Notes will be delivered by book-entry
transfer, check book-entry transfer facility
Principal Amount of Initial Notes tendered: below:
____________________________________________ [ ] The Depository Trust Company
Certificate No.(s) of Initial Notes (if
available):
DTC No.:____________________________________
Account No.:________________________________
- -----------------------------------------------------------------------------------------------
</TABLE>
-3-
<PAGE> 4
- --------------------------------------------------------------------------------
This Notice of Guaranteed Delivery must be signed by the Holder(s) exactly as
their name(s) appear(s) on certificates) for Initial Notes or on a security
position listing as the owner of Initial Notes, or by person(s) authorized to
become Holder(s) by endorsements and documents transmitted with this Notice of
Guaranteed Delivery without alteration, enlargement or any change whatsoever. If
signature is by a trustee, executor, administrator, guardian, attorney-in-fact,
officer or other person acting in a fiduciary or representative capacity, such
person must provide the following information.
Please print name(s) and address(es)
Name(s):________________________________________________________________________
________________________________________________________________________________
Capacity:_______________________________________________________________________
Address(es):____________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
Daytime Area Code and Telephone Number:_________________________________________
DO NOT SEND INITIAL NOTES WITH THIS FORM. INITIAL NOTES SHOULD BE SENT TO
THE EXCHANGE AGENT WITH A PROPERLY COMPLETED AND DULY EXECUTED LETTER
OF TRANSMITTAL.
- --------------------------------------------------------------------------------
-4-
<PAGE> 5
- --------------------------------------------------------------------------------
GUARANTEE
(MAY NOT BE USED FOR SIGNATURE GUARANTEE)
The undersigned, a member in good standing of the Securities Transfer
Agents Medallion Program (an "Eligible Institution"), hereby guarantees that the
Initial Notes tendered hereby are in proper form for transfer (pursuant to the
procedures set forth in the Prospectus under "The Exchange Offer--Guaranteed
Delivery Procedures"), and that the Exchange Agent will receive (a) such Initial
Notes, or a timely confirmation of a book-entry transfer of such Initial Notes
to a Book-Entry Transfer Facility and (b) a properly completed and duly executed
Letter of Transmittal or manually signed facsimile thereof (or Agent's message)
with any required signature guarantees and any other documents required by the
Letter of Transmittal within two business days after the date of execution
hereof.
The Eligible Institution that completes this form must communicate the
guarantee to the Exchange Agent and must deliver the Letter of Transmittal and
Initial Notes to the Exchange Agent within the time period shown herein. Failure
to do so could result in a financial loss to such Eligible Institution.
Name of Firm:_________________________________________________________
Authorized Signature:_________________________________________________
Title:________________________________________________________________
Address:______________________________________________________________
______________________________________________________________________
(Zip Code)
Area Code and Telephone Number:_______________________________________
Date:_________________________________________________________________
- --------------------------------------------------------------------------------
-5-
<PAGE> 1
DEPOSITARY AGREEMENT
First Chicago Trust Company of New York
525 Washington Boulevard
Suite 4660
Jersey City, NJ 07310
Ladies and Gentlemen:
Fremont General Corporation (the "Offeror"), is offering to exchange up to
$200,000,000 principal amount of its Series B 7.70% Senior Notes due 2004 and up
to $225,000,000 principal amount of its Series B 7.70% Senior Notes due 2009
(collectively, the "Exchange Notes") for up to $200,000,000 principal amount of
its 7.70% Senior Notes due 2004 and up to $225,000,000 principal amount of its
7.875% Senior Notes due 2009 (collectively, the "Initial Notes") upon the terms
and conditions set forth in the Prospectus and the Letter of Transmittal annexed
as Exhibits A and B, respectively (collectively the "Offer"). The Offeror hereby
appoints you to act as Depositary in connection with the Offer.
The Offer is being made by the Offeror to holders of the Initial Notes (the
"Holders") on or about _____, 1999. The Letter of Transmittal that will
accompany the Offer, which is addressed to you, is to be used by the Holders to
accept the Offer, and contains instructions with respect to the delivery of
certificates for Initial Notes tendered.
In carrying out your duties as Depositary, you are to act in accordance with the
following instructions:
1. The Offer shall expire at 5:00 p.m., New York City Time on _________, 1999
(the "Initial Expiration Date"), or at any subsequent time to which the
Offeror may extend the Offer. The Offeror expressly reserves the right to
extend the Offer from time-to-time and may extend the Offer by giving
written notice to you before 9 a.m., on the business day following the
scheduled expiration date. The later of the Initial Expiration Date or the
latest time and date to which the Offer may be so extended is herein
referred to as the "Expiration Date".
2. You will establish a Book Entry Account with the various Depositories for
purposes of the Offer by ______, 1999 and any financial institution that
is a participant in any of the Depositories may make book-entry delivery
of the Initial Notes by causing the Depository to transfer such Initial
Notes into the account maintained by you pursuant to this Paragraph in
accordance with procedures for such transfer.
3. You are to examine the Letters of Transmittal and Initial Notes delivered
or mailed to you to ascertain whether the Letters of Transmittal are
completed and executed in accordance with instructions set forth therein.
In each case where the Letter of Transmittal has been improperly completed
or executed or, for any other reason, is not in proper form, or some other
irregularity in connection with the acceptance of the Offer exists, you
will endeavor to take such action as may be necessary to cause such
irregularity to be corrected. With the written approval of an authorized
officer of the Offeror (the names of whom are set forth on Exhibit C), or
any party designated by the Offeror, you are authorized to waive
irregularities in connection with the acceptance of the Offer.
4. If a Holder desires to tender Initial Notes pursuant to the Offer and such
Holder's Initial Notes are not immediately available or time will not
permit all required documents to reach you on or prior to
<PAGE> 2
the Expiration Date or the procedure for book-entry tender cannot be
completed on a timely basis, such Initial Notes may nevertheless be
tendered if all the following conditions are satisfied:
(i) a properly completed and duly executed Notice of
Guaranteed Delivery is received by you as provided
below on or prior to the Expiration Date; and
(ii) all tendered Initial Notes, in proper form for
transfer (or a Book-Entry Confirmation), together
with a properly completed and duly executed Letter of
Transmittal or facsimile thereof and any other
documents required by the Letter of Transmittal are
received by you within two business days after the
date of execution of the Notice of Guaranteed
Delivery.
The Notice of Guaranteed Delivery may be delivered by hand or transmitted
by telegram, facsimile transmission or mail to you and must include a
guarantee by an Eligible Institution in the form set forth in such Notice
of Guaranteed Delivery.
Notwithstanding any other provisions hereof, exchange of Initial Notes
pursuant to the Offer will, in all cases, be made only after timely
receipt by you of such Initial Notes (or a Book-Entry Confirmation), a
properly completed and duly executed Letter of Transmittal or a facsimile
thereof and any other documents required by the Letter of Transmittal.
5. The Offeror will exchange Initial Notes duly tendered on the terms and
subject to the conditions set forth in the Offer and the Letter of
Transmittal. Exchange Notes issuable in exchange for Initial Notes
tendered shall be delivered as soon as practicable after notice of
acceptance of said Initial Notes by the Offeror is received by you.
6. Except as otherwise described in the Prospectus, tenders of Initial Notes
may be withdrawn at any time prior to 5:00 p.m., New York City time, on
the Expiration Date.
7. The Offeror shall not be required to exchange any Initial Notes tendered
if there shall occur any of the events set forth in the Prospectus under
"The Exchange Offer--Conditions".
8. If, pursuant to the Offer, the Offeror does not accept for exchange all or
part of the Initial Notes tendered, you shall promptly return the
deposited Initial Notes, with any related required documents that are in
your possession, to the persons who deposited same, together with a notice
explaining the reasons for their return.
9. Unexchanged Initial Notes and Exchange Notes shall be forwarded by (a)
first class mail under a blanket surety bond protecting you and the
Offeror from loss or liability arising out of the non-receipt or
non-delivery of such certificates for Initial Notes, or (b) by registered
mail insured separately for the replacement value of such certificates for
Initial Notes.
10. As Depository hereunder, you:
(a) shall have no duties or obligations other than those
specifically set forth herein;
(b) will be regarded as making no representations and
having no responsibilities as to the validity,
sufficiency, value or genuineness of the Initial
Notes deposited with you hereunder, and will not be
required to and will make no representation as to the
validity, value or genuineness of the Offer;
(c) shall not be obligated to take any legal action
hereunder which might, in your
<PAGE> 3
judgement, involve any expense or liability, unless
you shall have been furnished with such indemnity as
shall be reasonably satisfactory to you;
(d) may rely on and shall be protected in acting in
reliance upon any certificate, instrument, opinion,
notice, letter, telegram or other document or
security delivered to you and believed by you to be
genuine and to have been signed by the proper party
or parties;
(e) may rely on and shall be protected in acting upon
written instructions from the persons set forth on
Exhibit C, each of whom is an Officer of the Offeror;
(f) may consult counsel satisfactory to you (including
counsel for the Offeror) and the opinion of each
counsel shall be full and complete authorization and
protection in respect to any action taken, suffered
or omitted by you hereunder in good faith and in
accordance with the opinion of such counsel; and
(g) shall not be called upon at any time to advise any
person tendering hereunder as to the wisdom of making
such tender or as to the market value or decline or
appreciation in market value of any share.
11. Please prepare and send daily exchange activity reports, prior to
5:30 p.m., to the following individual:
Patrick E. Lamb
Fremont General Corporation
2020 Santa Monica Boulevard
Santa Monica, CA 90404
Tel: 310/315-5500
Fax: 310-315-5593
12. The Offeror covenants and agrees to indemnify and hold you harmless
against any loss, liability or expense incurred without negligence or bad
faith on your part arising out of or in connection with the administration
of your duties hereunder, including the reasonable cost and expenses of
defending yourself against any claim or liability in the premises.
If you are named in any action or proceeding in respect of which indemnity
may be sought against Offeror, you shall promptly notify Offeror in
writing of the commencement of such action or proceeding and Offeror shall
be permitted to participate in such action or proceeding, and, after
written notice from Offeror to you, to assume the defense of such action
or proceeding with counsel of Offeror's choice at Offeror's expense (in
which case Offeror shall not thereafter be responsible for the fees and
expenses of any separate counsel retained by you). You will cooperate with
Offeror in the defense of any claim for which indemnification is sought.
13. This agreement and appointment as Depositary shall be construed and
enforced in accordance with the laws of the State of New York applicable
to agreements made and to be performed entirely within such state, and
shall inure to the benefit of, and the obligations created hereby shall be
binding upon, the successors and assigns of the parties hereto. THIS
AGREEMENT MAY NOT BE MODIFIED ORALLY.
14. You will arrange to comply with IRS regulations with regard to due
diligence in obtaining a
<PAGE> 4
certified Tax Identification Number (TIN). We understand that you are
required to deduct 31% on payments (a) to Holders who have not supplied
their correct TIN and the required certification and (b) to Holders who
you have been instructed by the IRS to deduct. You will forward
appropriate funds to the IRS. You are further instructed that a substitute
Form W-9 must be properly completed and delivered to you prior to payment,
otherwise 31% of the gross payment must be deducted as described above.
15. You shall arrange to file any appropriate reports with the IRS (e.g. 1099,
1099B, etc.). Please provide exact IRS Form to be completed with regard to
fair market value. Fair market value must be given to you prior to IRS
filing.
16. For services rendered as Depositary hereunder, your fees are approved as
set forth in Schedule A to this Agreement. Further, payment for invoices
generated will be paid within thirty days of such invoice date.
Please acknowledge receipt of this agreement and confirm the arrangements herein
provided by signing and returning the enclosed copy.
Sincerely,
FREMONT GENERAL CORPORATION
BY: __________________________
Name:
Title:
AGREED AND ACCEPTED AS OF _______________________, 1999
FIRST CHICAGO TRUST COMPANY OF NEW YORK
BY: __________________________
Gerald O'Leary
Vice President
