SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
[ X ] Annual Report Under Section 13 or 15(d)
of the Securities Exchange Act of 1934.
For the Fiscal Year Ended December 31, 1996
[ ] Transition Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934.
For the Transition Period from ________________ to ________________
Commission file number 33-73508
Fremont Funding Inc.
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(Originator of the Trust described herein)
Fremont Small Business Loan Master Trust
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(Exact name of registrant as specified in its charter)
Delaware 95-4398057
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(State or other jurisdiction of (I.R.S.Employer
incorporation or organization) Identification No.)
2020 Santa Monica Boulevard, Suite 500
Santa Monica, CA 90404-2023
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(Address of principal executive offices)
(310) 315-3988
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(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act: NONE
Securities registered pursuant to Section 12(g) of the Act: NONE
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant is required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes [ X ] No [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]
State the aggregate market value of the voting stock held by non-affiliates
of the registrant. The aggregate market value shall be computed by reference to
the price at which the stock was sold, or the average bid and asked prices of
such stock, as of a specified date within 60 days prior to the date of filing.
(See definition of affiliate in Rule 405.) Not applicable.
<PAGE>
PART I.
This report is filed on behalf of the Fremont Small Business Loan Master
Trust (the "Trust") established pursuant to the Pooling and Servicing Agreement
dated as of March 1, 1993, as supplemented by the Series A Supplement dated as
of March 1, 1993, the Series B Supplement dated as of November 1, 1993, the
Series 1995-1 Supplement dated as of March 1, 1995, and the Series C Supplement
dated as of February 1, 1996, Amendment No. 1 to the Pooling and Servicing
Agreement dated as of November 9, 1993, Amendment No. 2 to the Pooling and
Servicing Agreement dated as of March 1, 1995, Amendment No. 3 to the Pooling
and Servicing Agreement dated as of February 1, 1996, the Amended and Restated
Variable Funding Supplement dated as of November 30, 1995 (together, the
"Pooling and Servicing Agreement") by and among Fremont Funding Inc., as
transferor ("Fremont Funding"), Fremont Financial Corporation, as servicer
("Fremont Financial"), and LaSalle National Bank, as trustee (the "Trustee").
All defined terms used herein and not otherwise defined shall have the meaning
set forth in the Pooling and Servicing Agreement.
The Trust has issued its $100,000,000 Variable Rate Asset Backed
Certificates, Series B (the "Series B Certificates") and $135,000,000 Variable
Rate Asset Backed Certificates, Series C (the "Series C Certificates"). The
Trust has also issued a Variable Funding Certificate (the "Variable Funding
Certificate"), the amount of which fluctuates, and in 1995 issued its
$30,000,000 Subordinated Variable Rate Asset Backed Certificates, Series 1995-1
(the "Series 1995-1 Certificates"). In 1993 the Trust issued its $200,000,000
Variable Rate Asset Backed Certificates, Series A (the "Series A Certificates")
which were repurchased on February 15, 1996. The Series B Certificates, Series C
Certificates, Series 1995-1 Certificates and the Variable Funding Certificate
represent fractional undivided interests in the Trust and are referred to
collectively herein as the "Certificates."
ITEM 1. BUSINESS.
Not applicable.
ITEM 2. PROPERTIES.
The Trust has no material physical properties. The assets of the Trust
include the following: (i) rights to repayment of loan advances (such rights,
the "Advances") generated from time to time in portfolios of revolving
commercial finance loans ("Contracts") and all monies due or to become due in
payment of the Advances; (ii) the rights, but not the obligations, under each of
the related Contracts; (iii) all liens, security interests and collateral for
the Advances (including, but not limited to, any guarantees, agreements,
documents and filings related thereto); and (iv) all proceeds of the foregoing.
See also the Annual Servicer's Certificate, dated February 28, 1997 included
under Item 8 and filed as Exhibit 99.1 under Item 14 hereof.
ITEM 3. LEGAL PROCEEDINGS.
(a) The Registrant knows of no material pending legal proceedings with
respect to and involving the property of the Trust, the Trustee, any custodian,
The Company, the transferor or Fremont Financial, the servicer.
(b) Not applicable.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
No matter was submitted during the fiscal year covered by this report to a
vote of the holders of the Certificates.
<PAGE>
PART II.
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY STOCK AND RELATED STOCKHOLDER
MATTERS.
(a) To the best of the Registrant's knowledge, there is no established
public trading market for the Certificates.
To the best of the Registrant's knowledge, as of March 26, 1997, there were
six (6) holders of record of the Series B Certificates and seven (7) holders of
record of the Series C Certificates.
(b) Not applicable.
ITEM 6. SELECTED FINANCIAL DATA.
Not applicable.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
Not applicable.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
See Annual Servicer's Certificate, dated February 28, 1997 and the Annual
Report of the Servicer's Independent Accountants, dated February 28, 1997 filed
as Exhibits 99.1 and 99.2 under Item 14 hereof.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
None.
<PAGE>
PART III.
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
Not applicable.
ITEM 11. EXECUTIVE COMPENSATION.
Not applicable.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
(a) The Certificates are represented by several certificates registered in
the name of Cede & Co., the nominee of the Depository Trust Company ("DTC"), and
a person acquiring an interest in a Certificate will not be entitled to receive
a certificate representing such person's interest unless and until the
Certificates are issued in fully registered, certificated form. Accordingly,
until such time, Cede & Co. or DTC will be the holder of record of the
Certificates, and all actions taken by, and all distributions, notice and other
communications to, persons holding interests in the Certificates will be taken
or made by DTC upon instructions from or for participants in the DTC system, who
may hold interests in the Certificates directly or for benefit of others.
Participants with which investors have accounts with respect to the Certificates
are required to make book entry transfers corresponding to transfers recorded by
DTC and receive and transmit payments and communications on behalf of such
investors.
To the best of the Registrant's knowledge, as of March 26, 1997, there were
six (6) holders of record of the Series B Certificates, seven (7) holders of
record of the Series C Certificates, and all of the Series A Certificates had
been redeemed and canceled. In addition there was one (1) holder of record of
the Series 1995-1 Certificates, one (1) holder of record of the Variable Funding
Certificate and no other securities of the Registrant were outstanding.
(b) Not applicable.
(c) Not applicable.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
Not applicable.
<PAGE>
PART IV.
ITEM 14. EXHIBITS, FINANCIAL STATEMENTS AND REPORTS ON FORM 8-K.
(a) Documents filed as part of this report:
See Item 8 and section (c) of this Item 14 below.
(b) Current reports on Form 8-K:
The Trust files a current report on Form 8-K each month with the relevant
Payment Date Statement attached.
(c) Exhibits:
Exhibit No. Description
----------- ---------------------------------------------------
1.1+++ Underwriting Agreement, dated February 8, 1996,
between Fremont Funding, Fremont Financial and the
Underwriter.
1.2+++ Pricing Agreement, dated February 8, 1996, between
Fremont Funding and the Underwriter.
1.3+++ Indemnity Agreement, dated February 8, 1996,
between Fremont General Corporation and the
Underwriter.
4.1+ Pooling and Servicing Agreement, dated as of March
1, 1993, among Fremont Funding, Fremont Financial
and the Trustee.
4.2+ Series A Supplement, dated as of March 1, 1993,
among Fremont Funding, Fremont Financial and the
Trustee.
4.3+ Variable Funding Supplement, dated as of March 1,
1993, among Fremont Funding, Fremont Financial and
the Trustee.
4.4++ Amendment No. 1 to the Pooling and Servicing
Agreement, dated as of November 9, 1993, among
Fremont Funding, Fremont Financial and the Trustee.
4.5++ Series B Supplement, dated as of November 1, 1993,
among Fremont Funding, Fremont Financial and the
Trustee.
4.6++ Amendment No. 1 to the Variable Funding Supplement,
dated as of September 1, 1993, among Fremont
Funding, Fremont Financial and the Trustee.
4.7++ Amendment No. 2 to the Variable Funding Supplement,
dated as of November 9, 1993,among Fremont Funding,
Fremont Financial and the Trustee.
4.8*** Amendment No. 2 to the Pooling and Servicing
Agreement, dated as of March 1, 1995, among Fremont
Funding, Fremont Financial and the Trustee.
4.9*** Amendment No. 3 to the Variable Funding Supplement,
dated as of March 1, 1995 among Fremont Funding,
Fremont Financial and the Trustee.
4.10*** Series 1995-1 Supplement, dated as of March 1,
1995, among Fremont Funding, Fremont Financial and
the Trustee.
4.11**** Amended and Restated Variable Funding Supplement,
dated as of November 30, 1995, by and among Fremont
Funding, Fremont Financial and the Trustee.
4.12+++ Series C Supplement, dated as of February 1, 1996,
among Fremont Funding, Fremont Financial and the
Trustee.
4.13+++ Amendment No. 3 to the Pooling and Servicing
Agreement, dated as of February 1, 1996, among
Fremont Funding, Fremont Financial and the Trustee.
4.14+++ Repurchase notification from the Trustee to the
holder of the Series A Certificates.
99.1 Annual Servicer's Certificate dated February 28,
1997.
99.2 Annual Report of the Servicer's Independent
Accountants, dated February 28, 1997.
* Previously filed with Form S-3, Registration No. 33-73508 as
filed with the Securities and Exchange Commission on December 29, 1993.
** Previously filed with Amendment No. 2 to Form S-3, Registration No.
33-73508, as filed with the Securities and Exchange Commission on June
20, 1994.
*** Previously filed with Post-Effective Amendment No. 1 to Form S-3,
Registration No. 33-73508, as filed with the Securities and Exchange
Commission on October 23, 1995.
**** Previously filed with Post-Effective Amendment No. 2 to Form S-3,
Registration No. 33-73508, as filed with the Securities and Exchange
Commission on January 24, 1996.
+ Incorporated by reference to Registrant's Current Report on Form 8-K
filed on April 18, 1993.
++ Incorporated by reference to Registrant's Current Report on Form 8-K
filed on November 16, 1993.
+++ Incorporated by reference to Registrant's Current Report on Form 8-K
filed on February 26, 1996.
(d) Not applicable.
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
FREMONT SMALL BUSINESS LOAN MASTER TRUST
By: Fremont Funding Inc.,
Originator of the Trust
By: /s/ Patrick E. Lamb
--------------------------
Patrick E. Lamb,
Chief Financial Officer
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT INDEX
Exhibit No. Description Page No.
----------- --------------------------------------------------- --------
<C> <C> <C>
1.1+++ Underwriting Agreement, dated February 8, 1996,
between Fremont Funding, Fremont Financial and the
Underwriter.
1.2+++ Pricing Agreement, dated February 8, 1996, between
Fremont Funding and the Underwriter.
1.3+++ Indemnity Agreement, dated February 8, 1996,
between Fremont General Corporation and the
Underwriter.
4.1+ Pooling and Servicing Agreement, dated as of March
1, 1993, among Fremont Funding, Fremont Financial
and the Trustee.
4.2+ Series A Supplement, dated as of March 1, 1993,
among Fremont Funding, Fremont Financial and the
Trustee.
4.3+ Variable Funding Supplement, dated as of March 1,
1993, among Fremont Funding, Fremont Financial and
the Trustee.
4.4++ Amendment No. 1 to the Pooling and Servicing
Agreement, dated as of November 9, 1993, among
Fremont Funding, Fremont Financial and the Trustee.
4.5++ Series B Supplement, dated as of November 1, 1993,
among Fremont Funding, Fremont Financial and the
Trustee.
4.6++ Amendment No. 1 to the Variable Funding Supplement,
dated as of September 1, 1993, among Fremont
Funding, Fremont Financial and the Trustee.
4.7++ Amendment No. 2 to the Variable Funding Supplement,
dated as of November 9, 1993,among Fremont Funding,
Fremont Financial and the Trustee.
4.8*** Amendment No. 2 to the Pooling and Servicing
Agreement, dated as of March 1, 1995, among Fremont
Funding, Fremont Financial and the Trustee.
4.9*** Amendment No. 3 to the Variable Funding Supplement,
dated as of March 1, 1995 among Fremont Funding,
Fremont Financial and the Trustee.
4.10*** Series 1995-1 Supplement, dated as of March 1,
1995, among Fremont Funding, Fremont Financial and
the Trustee.
4.11**** Amended and Restated Variable Funding Supplement,
dated as of November 30, 1995, by and among Fremont
Funding, Fremont Financial and the Trustee.
4.12+++ Series C Supplement, dated as of February 1, 1996,
among Fremont Funding, Fremont Financial and the
Trustee.
4.13+++ Amendment No. 3 to the Pooling and Servicing
Agreement, dated as of February 1, 1996, among
Fremont Funding, Fremont Financial and the Trustee.
4.14+++ Repurchase notification from the Trustee to the
holder of the Series A Certificates.
99.1 Annual Servicer's Certificate dated February 28,
1997.
99.2 Annual Report of the Servicer's Independent
Accountants, dated February 28, 1997.
* Previously filed with Form S-3, Registration No. 33-73508 as
filed with the Securities and Exchange Commission on December 29, 1993.
** Previously filed with Amendment No. 2 to Form S-3, Registration No.
33-73508, as filed with the Securities and Exchange Commission on June
20, 1994.
*** Previously filed with Post-Effective Amendment No. 1 to Form S-3,
Registration No. 33-73508, as filed with the Securities and Exchange
Commission on October 23, 1995.
**** Previously filed with Post-Effective Amendment No. 2 to Form S-3,
Registration No. 33-73508, as filed with the Securities and Exchange
Commission on January 24, 1996.
+ Incorporated by reference to Registrant's Current Report on Form 8-K
filed on April 18, 1993.
++ Incorporated by reference to Registrant's Current Report on Form 8-K
filed on November 16, 1993.
+++ Incorporated by reference to Registrant's Current Report on Form 8-K
filed on February 26, 1996.
</TABLE>
EXHIBIT 99.1
FREMONT FINANCIAL CORPORATION
ANNUAL SERVICER'S CERTIFICATE
The undersigned, a duly authorized representative of Fremont Financial
Corporation ("FFC"), as servicer pursuant to the Pooling and Servicing
Agreement, dated as of March 1, 1993, as supplemented by the Series A Supplement
dated as of March 1, 1993, the Series B Supplement dated as of November 1, 1993,
the Series 1995-1 Supplement dated as of March 1, 1995, and the Series C
Supplement dated as of February 1, 1996, Amendment No. 1 to the Pooling and
Servicing Agreement dated as of November 9, 1993, Amendment No. 2 to the Pooling
and Servicing Agreement dated as of March 1, 1995, Amendment No. 3 to the
Pooling and Servicing Agreement dated as of February 1, 1996, the Amended and
Restated Variable Funding Supplement dated as of November 30, 1995 (together,
the "Pooling and Servicing Agreement") by and among Fremont Funding Inc., as
transferor ("Fremont Funding"), Fremont Financial Corporation, as servicer
("Fremont Financial"), and LaSalle National Bank, as trustee (the "Trustee"),
does hereby certify that:
1. FFC is Servicer under the Pooling and Servicing Agreement.
2. The undersigned is duly authorized pursuant to the Pooling and Servicing
Agreement to execute and deliver this Certificate to the Trustee.
3. This Certificate is delivered pursuant to Section 3.05 of the Pooling and
Servicing Agreement.
4. A review of the activities of FFC during the twelve month period ended
December 31, 1996 and of the performance of FFC under the Pooling and Servicing
Agreement was conducted under the supervision of the undersigned.
5. Based on such review, to the best of the knowledge of the undersigned, FFC
has fully performed all of its obligations under the Pooling and Servicing
Agreement throughout such period, and no default in the performance of such
obligations has occurred or is continuing except as set forth in paragraph 6
below.
6. The following is a description of each default in the performance of FFC's
obligations under the provisions of the Pooling and Servicing Agreement, known
to the undersigned to have been made during such period which sets forth in
detail (i) the nature of each such default, (ii) the action taken by FFC, if
any, to remedy each such default and (iii) the current status of each such
default:
None.
<PAGE>
IN WITNESS WHEREOF, the undersigned has duly executed this certificate this
28th day of February 1997.
FREMONT FINANCIAL CORPORATION,
as Servicer
By:/s/ Patrick E. Lamb
----------------------------
Name: Patrick E. Lamb
Title: Chief Financial Officer
EXHIBIT 99.2
Independent Auditor's Report on Compliance
Board of Directors
Fremont Financial Corporation
We have audited, in accordance with generally accepted auditing standards, the
consolidated balance sheet of Fremont Financial Corporation ("Servicer") as of
December 31, 1996, and the related consolidated statements of income, retained
earnings, and cash flows for the year then ended, and have issued our report
thereon dated February 28, 1997.
In connection with our audit, nothing came to our attention that caused us to
believe that the Servicer failed to comply with the terms and conditions set
forth in Sections 3.04, 3.05, 4.02, 4.03, 4.04, 4.05, and 12.01 of the Pooling
and Servicing Agreement, as amended or supplemented, between the Servicer,
Fremont Funding Inc. ("Transferor") and LaSalle National Bank ("Trustee"), dated
March 1, 1993, insofar as they relate to accounting matters. However, our audit
was not directed primarily toward obtaining knowledge of such noncompliance.
In addition, at your request, we compared the amounts and mathematical
calculations set forth in a sample of Settlement Statements (March, August, and
December 1996) forwarded by the Servicer pursuant to Section 3.04(c) of the
Pooling and Servicing Agreement during the period covered by this report with
the Servicer's monthly computer reports and Trustee bank statements which were
the source of such amounts and mathematical calculations and on the basis of
such comparison, found that such amounts and mathematical calculations are in
agreement except for an exception which, with correction, would not change
compliance conclusions. These procedures do not constitute an audit of the
Settlement Statements made in accordance with generally accepted auditing
standards and we do not express an opinion on the Settlement Statements,
however, these procedures did not give us any reason to believe the Settlement
Statements required adjustment.
This report is intended solely for the use of the Servicer, the Trustee, and the
rating agencies (Standard & Poor's Corporation and Duff & Phelps Credit Rating
Co.) and should not be used for any other purpose.
/s/ Ernst & Young LLP
February 28, 1997
