<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 2)*
------------------
Aames Financial Corporation
--------------------------------------------------------------
(Name of Issuer)
Common Shares, par value $0.001
--------------------------------------------------------------
(Title of Class of Securities)
00253A 2
--------------------------------------------------------------
(CUSIP Number of Class of Securities)
Capital Z Management, LLC
54 Thompson Street
New York, NY 10012
Attention: Mr. David A. Spuria
Tel. No. (212) 965-0800
Copy to:
Thomas M. Cerabino, Esq.
Willkie Farr & Gallagher
787 Seventh Avenue
New York, New York 10019
(212) 728-8000
--------------------------------------------------------------
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
August 3, 1999
--------------------------------------------------------------
(Date of Event which Requires
Filing of this Schedule)
If the filing person has previously filed a statement on
Schedule 13G to report the acquisition which is the subject of
this Schedule 13D, and is filing this schedule because of Rule
13d-1(b)(3) or (4), check the following: [ ]
Page 1 of 17
<PAGE>
SCHEDULE 13D
- --------------------- ---------------------
CUSIP No. 00253A 2 Page 2 of 17 Pages
- --------------------- ---------------------
- ----------- -------------------------------------------------------------------
1 NAME OF REPORT PERSONS
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Specialty Finance Partners
- ----------- -------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ]
(b) [X]
- ----------- -------------------------------------------------------------------
3 SEC USE ONLY
- ----------- -------------------------------------------------------------------
4 SOURCE OF FUNDS*
Not Applicable
- ----------- -------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) [ ]
- ----------- -------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Bermuda
- --------------------- --------- -----------------------------------------------
7 SOLE VOTING POWER
-0-
--------- -----------------------------------------------
NUMBER OF 8 SHARED VOTING POWER
SHARES
BENEFICIALLY 4,570,519
OWNED BY --------- -----------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING
PERSON WITH -0-
--------- -----------------------------------------------
10 SHARED DISPOSITIVE POWER
-0-
- -------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH PERSON
4,570,519
- ----------- -------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* [ ]
- ----------- -------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
14.2%
- ----------- -------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
PN
- ----------- -------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO
ITEMS 1-7 (INCLUDING EXHIBITS) OF THE
SCHEDULE, AND THE SIGNATURE ATTESTATION.
<PAGE>
SCHEDULE 13D
- --------------------- ---------------------
CUSIP No. 00253A 2 Page 3 of 17 Pages
- --------------------- ---------------------
- ----------- -------------------------------------------------------------------
1 NAME OF REPORT PERSONS
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Capital Z Financial Services Fund II, L.P.
- ----------- -------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ]
(b) [X]
- ----------- -------------------------------------------------------------------
3 SEC USE ONLY
- ----------- -------------------------------------------------------------------
4 SOURCE OF FUNDS*
Not Applicable
- ----------- -------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) [ ]
- ----------- -------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Bermuda
- --------------------- --------- -----------------------------------------------
7 SOLE VOTING POWER
-0-
--------- -----------------------------------------------
NUMBER OF 8 SHARED VOTING POWER
SHARES
BENEFICIALLY 4,570,519(1)
OWNED BY --------- -----------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING
PERSON WITH -0-
--------- -----------------------------------------------
10 SHARED DISPOSITIVE POWER
-0-
- -------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH PERSON
4,570,519
- ----------- -------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* [ ]
- ----------- -------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
14.2%
- ----------- -------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
PN
- ----------- -------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO
ITEMS 1-7 (INCLUDING EXHIBITS) OF THE
SCHEDULE, AND THE SIGNATURE ATTESTATION.
(1) Solely in its capacity as a general partner of Specialty
Finance Partners.
<PAGE>
SCHEDULE 13D
- --------------------- ---------------------
CUSIP No. 00253A 2 Page 4 of 17 Pages
- --------------------- ---------------------
- ----------- -------------------------------------------------------------------
1 NAME OF REPORT PERSONS
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Capital Z Financial Services Private Fund II, L.P.
- ----------- -------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ]
(b) [X]
- ----------- -------------------------------------------------------------------
3 SEC USE ONLY
- ----------- -------------------------------------------------------------------
4 SOURCE OF FUNDS*
Not Applicable
- ----------- -------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) [ ]
- ----------- -------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Bermuda
- --------------------- --------- -----------------------------------------------
7 SOLE VOTING POWER
-0-
--------- -----------------------------------------------
NUMBER OF 8 SHARED VOTING POWER
SHARES
BENEFICIALLY 4,570,519(2)
OWNED BY --------- -----------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING
PERSON WITH -0-
--------- -----------------------------------------------
10 SHARED DISPOSITIVE POWER
-0-
- -------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH PERSON
4,570,519
- ----------- -------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* [ ]
- ----------- -------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
14.2%
- ----------- -------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
PN
- ----------- -------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO
ITEMS 1-7 (INCLUDING EXHIBITS) OF THE
SCHEDULE, AND THE SIGNATURE ATTESTATION.
(2) Solely in its capacity as a general partner of Specialty
Finance Partners.
<PAGE>
SCHEDULE 13D
- --------------------- ---------------------
CUSIP No. 00253A 2 Page 5 of 17 Pages
- --------------------- ---------------------
- ----------- -------------------------------------------------------------------
1 NAME OF REPORT PERSONS
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Equifin Capital Partners, Ltd.
- ----------- -------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ]
(b) [X]
- ----------- -------------------------------------------------------------------
3 SEC USE ONLY
- ----------- -------------------------------------------------------------------
4 SOURCE OF FUNDS*
Not Applicable
- ----------- -------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) [ ]
- ----------- -------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Cayman Islands
- --------------------- --------- -----------------------------------------------
7 SOLE VOTING POWER
-0-
--------- -----------------------------------------------
NUMBER OF 8 SHARED VOTING POWER
SHARES
BENEFICIALLY 4,570,519(3)
OWNED BY --------- -----------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING
PERSON WITH -0-
--------- -----------------------------------------------
10 SHARED DISPOSITIVE POWER
-0-
- -------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH PERSON
4,570,519
- ----------- -------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* [ ]
- ----------- -------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
14.2%
- ----------- -------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
CO
- ----------- -------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO
ITEMS 1-7 (INCLUDING EXHIBITS) OF THE
SCHEDULE, AND THE SIGNATURE ATTESTATION.
(3) Solely in its capacity as a general partner of Specialty
Finance Partners.
<PAGE>
SCHEDULE 13D
- --------------------- ---------------------
CUSIP No. 00253A 2 Page 6 of 17 Pages
- --------------------- ---------------------
- ----------- -------------------------------------------------------------------
1 NAME OF REPORT PERSONS
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Capital Z Partners, L.P.
- ----------- -------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ]
(b) [X]
- ----------- -------------------------------------------------------------------
3 SEC USE ONLY
- ----------- -------------------------------------------------------------------
4 SOURCE OF FUNDS*
Not Applicable
- ----------- -------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) [ ]
- ----------- -------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Bermuda
- --------------------- --------- -----------------------------------------------
7 SOLE VOTING POWER
-0-
--------- -----------------------------------------------
NUMBER OF 8 SHARED VOTING POWER
SHARES
BENEFICIALLY 4,570,519(4)
OWNED BY --------- -----------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING
PERSON WITH -0-
--------- -----------------------------------------------
10 SHARED DISPOSITIVE POWER
-0-
- -------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH PERSON
4,570,519
- ----------- -------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* [ ]
- ----------- -------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
14.2%
- ----------- -------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
PN
- ----------- -------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO
ITEMS 1-7 (INCLUDING EXHIBITS) OF THE
SCHEDULE, AND THE SIGNATURE ATTESTATION.
(4) Solely in its capacity as the sole general partner of
Capital Z Financial Services Fund II, L.P. and Capital Z
Financial Services Private Fund II, L.P.
<PAGE>
SCHEDULE 13D
- --------------------- ---------------------
CUSIP No. 00253A 2 Page 7 of 17 Pages
- --------------------- ---------------------
- ----------- -------------------------------------------------------------------
1 NAME OF REPORT PERSONS
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Capital Z Partners, Ltd.
- ----------- -------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ]
(b) [X]
- ----------- -------------------------------------------------------------------
3 SEC USE ONLY
- ----------- -------------------------------------------------------------------
4 SOURCE OF FUNDS*
Not Applicable
- ----------- -------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) [ ]
- ----------- -------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Bermuda
- --------------------- --------- -----------------------------------------------
7 SOLE VOTING POWER
-0-
--------- -----------------------------------------------
NUMBER OF 8 SHARED VOTING POWER
SHARES
BENEFICIALLY 4,570,519(5)
OWNED BY --------- -----------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING
PERSON WITH -0-
--------- -----------------------------------------------
10 SHARED DISPOSITIVE POWER
-0-
- -------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH PERSON
4,570,519
- ----------- -------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* [ ]
- ----------- -------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
14.2%
- ----------- -------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
CO
- ----------- -------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO
ITEMS 1-7 (INCLUDING EXHIBITS) OF THE
SCHEDULE, AND THE SIGNATURE ATTESTATION.
(5) Solely in its capacity as the sole general partner of
Capital Z Partners, L.P., which is the sole general
partner of Capital Z Financial Services Fund II, L.P.
and Capital Z Financial Services Private Fund II, L.P.
<PAGE>
SCHEDULE 13D
- --------------------- ---------------------
CUSIP No. 00253A 2 Page 8 of 17 Pages
- --------------------- ---------------------
- ----------- -------------------------------------------------------------------
1 NAME OF REPORT PERSONS
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Capital Z Management, LLC
- ----------- -------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ]
(b) [X]
- ----------- -------------------------------------------------------------------
3 SEC USE ONLY
- ----------- -------------------------------------------------------------------
4 SOURCE OF FUNDS*
Not Applicable
- ----------- -------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) [ ]
- ----------- -------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
- --------------------- --------- -----------------------------------------------
7 SOLE VOTING POWER
1,250,000
--------- -----------------------------------------------
NUMBER OF 8 SHARED VOTING POWER
SHARES
BENEFICIALLY -0-
OWNED BY --------- -----------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING
PERSON WITH 1,250,000
--------- -----------------------------------------------
10 SHARED DISPOSITIVE POWER
-0-
- -------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH PERSON
1,250,000
- ----------- -------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* [ ]
- ----------- -------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
3.9%
- ----------- -------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
00
- ----------- -------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO
ITEMS 1-7 (INCLUDING EXHIBITS) OF THE
SCHEDULE, AND THE SIGNATURE ATTESTATION.
<PAGE>
This Amendment No. 2 to Schedule 13D with respect to Aames Financial
Corporation is being filed by Capital Z Financial Services Fund II, L.P.,
Capital Z Partners, L.P., Capital Z Partners, Ltd., Capital Z Management, LLC,
Specialty Finance Partners ("SFP"), Capital Z Financial Services Private Fund
II, L.P. ("Capital Z Private Fund"), and Equifin Capital Partners, Ltd.
("Equifin") (collectively, the "Reporting Persons") to amend the Schedule 13D
(the "Schedule 13D") originally filed by certain of the Reporting Persons on
December 23, 1998, as amended February 19, 1999. Capitalized terms used but not
defined herein have the meanings assigned to such terms in the Schedule 13D.
Item 2. Identity and Background.
Item 2(a) of Schedule 13D is hereby amended and restated to read as
follows:
(a) This Statement is hereby filed by Capital Z Financial Services Fund II,
L.P., a Bermuda limited partnership ("Capital Z"), Capital Z Partners, Ltd., a
Bermuda corporation ("Cap Z Ltd."), Capital Z Management, LLC, a Delaware
limited liability company, as successor to Capital Z Management, Inc. ("Cap Z
Management"), Specialty Finance Partners, a Bermuda general partnership ("SFP"),
Capital Z Financial Services Private Fund II, L.P., a Bermuda limited
partnership ("Capital Z Private Fund"), and Equifin Capital Partners, Ltd., a
Cayman Islands corporation ("Equifin"). Capital Z, Cap Z L.P., Cap Z Ltd., Cap Z
Management, SFP, Capital Z Private Fund and Equifin are sometimes hereinafter
collectively referred to as the "Reporting Persons." Each of Steven
Page 9 Of 17
<PAGE>
M. Gluckstern and Robert A. Spass is a member of the Investment Committees of
Cap Z Ltd. and Cap Z Management and, in such capacities, has the authority to
approve the disposition of investments of Capital Z and Capital Z Private Fund.
Items 2(b) and 2(c) of Schedule 13D are hereby amended as follows:
The principal business address of Capital Z, Capital Z L.P., Capital Z
Ltd., Capital Z Management and each director and executive officer of Capital Z
Management is 54 Thompson Street, New York, New York 10012. The directors and
executive officers of Capital Z Management, Inc. became the executive officers
and directors of Capital Z Management. Information required by Schedule 13D with
respect to such individuals is included in the original Schedule 13D. Capital Z
Management is a Delaware limited liability company.
SFP
SFP is a Bermuda general partnership formed to hold certain investments by
Capital Z, including Capital Z's interest in the Company. The principal business
address of SFP, which also serves as its principal office, is 54 Thompson
Street, New York, NY 10012. The sole general partners of SFP are Capital Z,
Capital Z Private Fund and Equifin. Pursuant to Instruction C to Schedule 13D of
the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
information with respect to Capital Z Private Fund and Equifin are set forth
below.
Page 10 OF 17
<PAGE>
CAPITAL Z PRIVATE FUND
Capital Z Private Fund is a Bermuda limited partnership, the principal
business of which is to invest in securities of financial services entities. The
principal address of Capital Z Private Fund, which also serves as its principal
office, is 54 Thompson Street, New York, New York 10012.
EQUIFIN
Equifin is a Cayman Islands corporation, the principal business of which is
to invest in securities of financial services entities. The principal address of
Equifin, which also serves as its principal office, is 54 Thompson Street, New
York, New York 10012. The names, residence or business address, and present
principal occupation or employment of each director and executive officer of
Equifin are as follows:
PRINCIPAL OCCUPATION OR
NAME BUSINESS ADDRESS EMPLOYMENT
- ---------------- ------------------- -------------------------------
Mani A. Sadeghi 54 Thompson Street, President, Chief Executive
New York, NY 10012 Officer and Director of
Equifin
Daniel C. Lieber 54 Thompson Street Vice President and Director
New York, NY 10012 of Equifin
Joseph R. Tomei 54 Thompson Street Treasurer, Vice President and
New York, NY 10012 Director of Equifin
Mani A Sadeghi is the controlling shareholder of Equifin.
Item 4. Purpose of Transaction.
Item 4 of Schedule 13D is hereby amended by adding before the last
paragraph thereof the following:
In connection with the purchase of the Series B and Series C Preferred
Stock on February 10, 1999, SFP became the successor in
Page 11 of 17
<PAGE>
interest to Capital Z under the Preferred Stock Purchase Agreement. On August 3,
1999, SFP purchased an additional 25,000 shares of Series C Convertible
Preferred Stock of the Company for a purchase price of $1.00 per share, in
accordance with the terms of Amendment No. 3 to the Preferred Stock Purchase
Agreement. In addition, in connection with such purchase, the Company issued to
certain designees of SFP warrants to purchase up to 1.25 million shares of
Common Stock at an exercise price of $1.00 per share (the "Additional
Warrants"). Exercise of the Additional Warrants is subject to the future
availability of authorized and unissued Common Stock.
The foregoing descriptions are qualified in their entirety by reference to
Amendment No. 3 to the Preferred Stock Purchase Agreement and the Additional
Warrants, forms of which are attached hereto as exhibits and are incorporated
herein by reference.
Item 5. Interest in Securities of the Issuer.
Item 5 of Schedule 13D is hereby amended by adding the following:
SFP
As a result of the execution of the Voting Agreement, SFP may, pursuant to
Rule 13d-3 of the Exchange Act, be deemed to be the beneficial owner of
4,570,519 shares of Common Stock, which, based on calculations made in
accordance with Rule 13d-3(d) of the Exchange Act and there being 32,266,964
shares of Common Stock outstanding (as represented by the Company to the
Reporting Persons plus the 1,250,000 shares relating to the
Page 12 of 17
<PAGE>
Warrant), represents approximately 14.2% of the outstanding shares of Common
Stock.*
CAPITAL Z PRIVATE FUND
In its capacity as general partner of SFP, Capital Z Private Fund may,
pursuant to Rule 13d-3 of the Exchange Act, be deemed to be the beneficial owner
of 4,570,519 shares of Common Stock, which, based on calculations made in
accordance with Rule 13d-3(d) of the Exchange Act and there being 32,266,964
shares of Common Stock outstanding (as represented by the Company to the
Reporting Persons plus the 1,250,000 shares relating to the Warrant), represents
approximately 14.2% of the outstanding shares of Common Stock.*
EQUIFIN
In its capacity as a general partner of SFP, Equifin may, pursuant to Rule
13d-3 of the Exchange Act, be deemed to be the beneficial owner of 4,570,519
shares of Common Stock, which, based on calculations made in accordance with
Rule 13d-3(d) of the Exchange Act and there being 32,266,964 shares of Common
Stock outstanding as represented by the Company to the Reporting Persons plus
the 1,250,000 shares relating to the Warrant), represents approximately 14.2% of
the outstanding shares of Common Stock).*
* The Reporting Persons disclaims any beneficial ownership of the shares
of Common Stock reported herein.
Page 13 of 17
<PAGE>
Item 7. Material to be Filed as Exhibits.
1. Amendment No. 2 to Preferred Stock Purchase Agreement, dated as of June 7,
1999, by and between Aames Financial Corporation and Specialty Finance
Partners.
2. Amendment No. 3 to Preferred Stock Purchase Agreement, effective as of July
16, 1999, by and between Aames Financial Corporation and Specialty Finance
Partners.
3. Form of Additional Warrant.
4. Joint Filing Agreement dated August 11, 1999, by and among the Reporting
Persons.
Page 14 of 17
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of its knowledge and belief,
the undersigned certifies that the information set forth in this statement is
true, complete and correct.
Dated: August 11, 1999
CAPITAL Z FINANCIAL SERVICES
FUND II, L.P., a Bermuda limited partnership
By: Capital Z Partners, L.P., its General Partner
By: Capital Z Partners, Ltd., its General Partner
By: /s/ David A. Spuria
-----------------------------
Name: David A. Spuria
Title: General Counsel
CAPITAL Z PARTNERS, L.P.,
a Bermuda limited partnership
By: Capital Z Partners, Ltd., its General Partner
By: /s/ David A. Spuria
-----------------------------
Name: David A. Spuria
Title: General Counsel
CAPITAL Z PARTNERS, LTD.,
a Bermuda corporation
By: /s/ David A. Spuria
-----------------------------
Name: David A. Spuria
Title: General Counsel
CAPITAL Z MANAGEMENT, LLC,
a Delaware limited liability company
By: /s/ David A. Spuria
-----------------------------
Name: David A. Spuria
Title: General Counsel
Page 15 of 17
<PAGE>
SPECIALTY FINANCE PARTNERS,
a Bermuda general partnership
By: Capital Z Financial Services Fund II,
L.P., its General Partner
By: Capital Z Partners, L.P., its General Partner
By: Capital Z Partners, Ltd., its General Partner
By: /s/ David A. Spuria
-----------------------------
Name: David A. Spuria
Title: General Counsel
CAPITAL Z FINANCIAL SERVICES PRIVATE FUND II,
L.P., a Bermuda limited partnership
By: Capital Z Partners, L.P., its General Partner
By: Capital Z Partners, Ltd., its General Partner
By: /s/ David A. Spuria
-----------------------------
Name: David A. Spuria
Title: General Counsel
EQUIFIN CAPITAL PARTNERS, LTD., a Cayman
Islands corporation
By: /s/ Mani A. Sadeghi
-----------------------------
Name: Mani A. Sadeghi
Title: President, Chief Executive
Officer and
Director
Page 16 of 17
<PAGE>
EXHIBIT INDEX
Exhibit No. Title
- ----------- -----
99.3 Amendment No. 2 to Preferred Stock Purchase Agreement, dated
June 7, 1999 by and between Aames Financial Corporation and
Specialty Finance Partners.
99.4 Amendment No. 3 to Preferred Stock Purchase Agreement, effective
as of July 16, 1999 by and between Aames Financial Corporation and
Specialty Finance Partners.
99.5 Form of Additional Warrant.
99.6 Joint Filing Agreement dated August 11, 1999 by and among the
Reporting Persons.
Page 17 of 17
<PAGE>
AMENDMENT NO. 2
TO
PREFERRED STOCK PURCHASE AGREEMENT
This AMENDMENT NO. 2, dated as of June 9, 1999 (this "Amendment"), to that
certain Preferred Stock Purchase Agreement dated as of December 23, 1998, is
made and entered into between Aames Financial Corporation, a Delaware
corporation and Specialty Finance Partners (as successor to Capital Z Financial
Services Fund II, L.P., a Bermuda limited partnership).
RECITALS
WHEREAS, the parties hereto have entered into a Preferred Stock Purchase
Agreement dated as of December 23, 1998 and Amendment No. 1 to Preferred Stock
Purchase Agreement (as amended, the "Stock Purchase Agreement"); and
WHEREAS, such parties desire to amend the Stock Purchase Agreement as set
forth herein.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
ARTICLE I.
DEFINITIONS
Section 1.1. Definitions. Capitalized terms used herein that are defined in
the Stock Purchase Agreement are used herein as so defined.
ARTICLE II.
AMENDMENTS
The Stock Purchase Agreement is hereby amended as follows:
(a) Section 4.12 is amended by deleting the last two sentences thereof and
replacing such sentences with the following:
"Following the election or appointment of the Series B Designees and the
Capital Z Nominee pursuant to this Section 4.12 and prior to the earlier to
occur of (i) September 30, 1999, (ii) the Supplemental Closing, and (iii)
the date of a meeting of the stockholders of the Company at which any
proposal necessary to consummate the Recapitalization is defeated, any
amendment or waiver by the Company of any term or condition of this
Agreement, any Ancillary Agreement or
<PAGE>
the Certificate of Incorporation or the By-Laws, any termination by the
Company of this Agreement or any Ancillary Agreement, any extension by the
Company of the time for the performance of any of the obligations or other
acts of the Purchaser or waiver or assertion of any of the Company's rights
hereunder, or any other consents or actions by the Board of Directors with
respect to this Agreement or any Ancillary Agreement, will require, and
will require only (with respect to such action on behalf of the Company),
the concurrence of a majority of the Continuing Directors, except to the
extent that applicable law requires that such action by acted upon by the
full Board or Directors, in which case such action will require the
concurrence of a majority of the Directors, which majority shall include
each of the Continuing Directors, and no other action by the Company shall
be required for purposes of this Agreement. After the date of this
Agreement until the earlier to occur of the consummation of the
Supplemental Closing, September 30, 1999, and the date of a meeting of the
stockholders of the Company at which any proposal necessary to consummate
the Recapitalization is defeated, or the earlier termination of this
Agreement, the Purchaser will not exercise any rights it may have as a
stockholder of the Company to effect a change in the composition of the
Board of Directors of the Company, except as provided for in this Section
4.12."
(b) Section 5.1 is amended in its entirety by replacing such section with
the following:
"Section 5.1. Conditions to Obligation of Purchaser. The obligation of
the Purchaser to purchase the Senior Preferred Stock at the Initial Closing
Date and at the Supplemental Closing Date shall be subject to the
satisfaction or waiver of the following conditions (provided, that, with
respect to the Supplemental Closing, such obligation shall only be subject
to the consummation of the Initial Closing and the consummation of the
Recapitalization prior to September 30, 1999) on or before the applicable
Closing Date."
ARTICLE III.
MISCELLANEOUS PROVISIONS
Section 3.1. Counterparts. For the convenience of the parties, any number
of counterparts of this Amendment may be executed by any one or more of the
parties hereto, and each such executed counterpart shall be, and shall be deemed
to be, an original, but all of which together shall constitute one and the same
instrument.
Section 3.2. Ratification. The Stock Purchase Agreement, as amended hereby,
is hereby ratified and confirmed.
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<PAGE>
Section 3.3. Governing Law. This Amendment shall be governed by and
construed in accordance with the laws of the State of Delaware, without giving
effect to conflicts of law principles thereof.
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed to be effective as of the 9th day of June, 1999.
AAMES FINANCIAL CORPORATION
By: /s/ David A. Sklar
------------------------------
Name: David A. Sklar
Title: Executive Vice President,
Chief Financial Officer
SPECIALTY FINANCE PARTNERS
By its General Partner
CAPITAL Z FINANCIAL SERVICES FUND II, L.P.,
By its General Partner
CAPITAL Z PARTNERS, L.P.,
By its General Partner
CAPITAL Z PARTNERS, LTD.
By: /s/ Steven M. Gluckstern
------------------------------
Name: Steven M. Gluckstern
Title: Chairman of the Board
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<PAGE>
AMENDMENT NO. 3
TO
PREFERRED STOCK PURCHASE AGREEMENT
This AMENDMENT NO. 3, effective as of July 16, 1999 (this "Amendment"), to
that certain Preferred Stock Purchase Agreement dated as of December 23, 1998,
as amended on February 10, 1999 and on June 9, 1999 (the "Stock Purchase
Agreement"), is made and entered into between Aames Financial Corporation, a
Delaware corporation (the "Company") and Specialty Finance Partners, as
successor to Capital Z Financial Services Fund II, L.P., a Bermuda limited
partnership ("Purchaser").
RECITALS
WHEREAS, the parties hereto have entered into the Stock Purchase Agreement
pursuant to which the Purchaser purchased from the Company, and the Company sold
to the Purchaser, on the Initial Closing Date, (i) 26,704 shares of the
Company's Series B Convertible Preferred Stock, par value $0.001 per share (the
"Series B Preferred Stock"), having the rights, preferences, privileges and
restrictions set forth in the Certificate of Designations as filed with the
Secretary of State of the State of Delaware (the "Series B Certificate of
Designations"), and (ii) 48,296 shares of the Company's Series C Convertible
Preferred Stock, par value $0.001 per share (the "Series C Preferred Stock," and
together with the Series B Preferred Stock, the "Senior Preferred Stock"),
having the rights, preferences, privileges and restrictions set forth in the
Certificate of Designations as filed with the Secretary of State of the State of
Delaware (the "Series C Certificate of Designations," and together with the
Series B Certificate of Designations, the "Certificates of Designations"); and
WHEREAS, pursuant to the Stock Purchase Agreement, the Company agreed to,
as promptly as practicable after the date thereof call a meeting of its
stockholders, at which the Company will submit to its stockholders proposals to
(among other things), (i) amend the certificate of incorporation of the Company
to increase the authorized number of shares of the Company's common stock, par
value $0.001 per share ("Common Stock"), and the Company's preferred stock, par
value $0.001 per share (the "Preferred Stock") as contemplated by the
Certificate of Designations; and (ii) cause the outstanding shares of Senior
Preferred Stock to be split on the basis of one thousand-for-one (the foregoing
increase in authorized shares and split of Senior Preferred Stock are referred
to collectively herein as the "Recapitalization"); and
WHEREAS, pursuant to the Stock Purchase Agreement, the Company agreed to
offer, subject to the completion of the Recapitalization, to the existing
holders of Common Stock non-transferable rights to purchase an aggregate of $25
million in stated value of Series C Preferred Stock and the Purchaser
agreed
<PAGE>
to purchase on the Supplemental Closing Date an amount equal to the entire
unsubscribed portion of the Rights Offering (the "Standby Commitment"); and
WHEREAS, the parties desire to amend the Stock Purchase Agreement to
provide for the purchase by the Purchaser from the Company, and the sale by the
Company to the Purchaser, on the Additional Closing Date, 25,000 shares of
Series C Preferred Stock (the "Additional Investment"); and
WHEREAS, the parties desire to amend the Stock Purchase Agreement to
provide for an increase in the aggregate number of shares of Series C Preferred
Stock offered to existing holders of Common Stock pursuant to the Rights
Offering from $25 million in stated value to a number of shares equal to the
total number of shares of Common Stock outstanding as of the applicable record
date relating to the Rights Offering; and
WHEREAS, on the Additional Closing Date, the Company will issue to the
Purchaser (or its designee), as a fee for the Additional Investment, a warrant
(the "Additional Warrant") to purchase 1,250,000 shares of Common Stock, subject
to the availability of authorized Common Stock, at an exercise price of $1.00
per share, such Warrant to be in the form attached hereto as Exhibit A; and
WHEREAS, the Continuing Directors of the Board of Directors have approved
this Amendment; and
WHEREAS, the Company has obtained an opinion from Donaldson Lufkin &
Jenrette as to the fairness, from a financial point of view, of the Additional
Purchase Price to be paid for the Additional Preferred Stock pursuant to this
Agreement. A copy of such fairness opinion has been provided to Purchaser prior
to the execution of this Amendment.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
ARTICLE I.
DEFINITIONS
Section 1.1. Definitions. Capitalized terms used herein that are defined in
the Stock Purchase Agreement are used herein as so defined. Section 1.1 of the
Stock Purchase Agreement is hereby amended to include the following definitions:
"Additional Closing" means the closing of the sale and purchase of the
Additional Preferred Stock pursuant to Section 2.3.1 hereof.
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<PAGE>
"Additional Closing Date" shall have the meaning set forth in Section
2.3.2.
"Additional Investment" shall have the meaning set forth in the Recitals of
Amendment No. 3 to Stock Purchase Agreement.
"Additional Preferred Stock" has the meaning set forth in Section 2.3.1.
"Additional Purchase Price" has the meaning set forth in Section 2.3.1.
"Additional Warrant" shall have the meaning set forth in the Recitals of
Amendment No. 3 to the Stock Purchase Agreement.
"Amendment No. 3 to Stock Purchase Agreement" shall mean that certain
Amendment No. 3 to Stock Purchase Agreement by and between the Company and the
Purchaser.
ARTICLE II.
AMENDMENTS
The Stock Purchase Agreement is hereby amended as follows:
(a) Article II is amended by adding the following Sections:
"Section 2.3.1. Issuance, Sale and Purchase of the Additional
Preferred Stock. Upon the terms and subject to the conditions set
forth in this Agreement, on the Additional Closing Date, the Company
will issue, sell and deliver to the Purchaser (including such
Affiliates of Purchaser as Purchaser may designate in writing to the
Company prior to the Additional Closing Date), and the Purchaser will
purchase from the Company on the Additional Closing Date, twenty-five
thousand (25,000) shares of Series C Preferred Stock (the "Additional
Preferred Stock"). The purchase price of the Additional Preferred
Stock shall be one thousand dollars ($1,000.00) per share (the
"Additional Purchase Price").
Section 2.3.2. Additional Closing. (a) The Additional Closing
shall take place at the offices of the Company, 350 South Grand
Avenue, 52nd Floor, Los Angeles, California 90071 at 10:00 a.m., Los
Angeles time, as soon as practicable, or at such other time and place
as the parties may agree but not later than on the tenth Business Day,
following the execution of Amendment No. 3 to Stock Purchase
Agreement, or (the date on which the Additional Closing occurs, the
"Additional Closing Date").
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<PAGE>
(b) At the Additional Closing, (i) the Company will deliver to
the Purchaser certificates representing the Additional Preferred Stock
to be purchased by, and sold to, the Purchaser pursuant to Section
2.3.1 hereof (registered in the name or names and in the denominations
designated by Purchaser at least two Business Days prior to the
Additional Closing Date), (ii) the Purchaser, in full payment for the
Additional Preferred Stock to be purchased by, and sold to, the
Purchaser pursuant to Section 2.3.1 hereof, will deliver to the
Company an amount per share equal to the Additional Purchase Price, in
immediately available funds by wire transfer to the account specified
by the Company to Purchaser, at least two Business Days prior to the
Additional Closing Date, or by such other means as may be agreed upon
by the parties hereto, and (iii) the Company will issue the Additional
Warrant to a designee of the Purchaser."
(b) Section 2.4 is deleted in its entirety and replaced by the following:
"Section 2.4. Issuance, Sale and Purchase of Series C Preferred
Stock Pursuant to the Standby Commitment. Upon the terms and subject
to the conditions set forth in this Agreement, including, without
limitation, the consummation of the Recapitalization, and in reliance
upon the representations and warranties hereinafter set forth, at the
Supplemental Closing, the Company will issue, sell and deliver to the
Purchaser (including such Affiliates of Capital Z as Capital Z may
designate in writing to the Company prior to the Supplemental Closing
Date and any Designated Purchasers), and the Purchaser will purchase
from the Company on the Supplemental Closing Date, any shares of
Series C Preferred Stock which were offered in, and which remain
unsubscribed after consummation of, the Rights Offering up to a
maximum of $25 million in stated value of Series C Preferred Stock.
The purchase price per share for the Series C Preferred Stock
purchased pursuant to the Standby Commitment shall be the amount
obtained by dividing (x) Purchase Price by (y) 1,000 (the "Standby
Purchase Price"). In the event that the Initial Closing occurs, and
the Supplemental Closing does not occur as result of a material breach
by the Purchaser of its obligation to consummate the purchase of the
Series C Preferred Stock to be purchased by the Purchaser at the
Supplemental Closing (and not any other breach or alleged breach by
the Purchaser hereunder), then Capital Z shall cause its designee
which received the Warrant to return the Warrant to the Company for
cancellation. The provisions of the immediately preceding sentence
shall be of no force or effect if this Agreement terminates for any
reason prior to the Initial Closing Date."
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<PAGE>
(c) Section 4.9 is deleted in its entirety and replaced by the following:
"Section 4.9. As promptly as possible after obtaining the
Shareholder Approval, the Company shall take all necessary action to
effectuate and complete the Recapitalization, including, but not
limited to, (i) making all necessary filings with the NYSE (including
having the NYSE approve for listing on the NYSE the shares of Common
Stock into which the Senior Preferred Stock may be converted) and (ii)
filing an amended Certificate of Incorporation with the Secretary of
State of the State of Delaware. Following the completion of the
Recapitalization, the Company will offer to its existing holders of
Common Stock non-transferrable rights ("Purchase Rights") to purchase
one share of Series C Preferred Stock for each share of Common Stock
held by stockholders as of the applicable record date for the Standby
Purchase Price (the "Rights Offering"), which Purchase Rights shall
expire thirty (30) days after issuance. The Rights Offering shall be
subject to the conditions set forth on Exhibit K attached hereto. The
Purchaser shall be provided with copies of all documents relating to
the Recapitalization and the Rights Offering, and all such documents
shall be subject to the comments and prior approval of the Purchaser.
Without limiting any rights of the Purchaser hereunder or under the
Certificate of Designations, if the Shareholder Approval is not
obtained, the Company shall take all actions reasonably requested by
the Purchaser and consistent with the DGCL to effect the increase in
the authorized shares of capital stock of the Company contemplated by
the Recapitalization."
(d) Article III is hereby amended by adding the following Sections:
"Section 3.3. Representations and Warranties of the Company with
Respect to the Additional Investment. As of the date of Amendment No.
3 to Stock Purchase Agreement, the Company represents and warrants to
the Purchaser as follows:
Section 3.3.1. Organization. Each of the Company and its
Subsidiaries is a corporation duly organized, validly existing and in
good standing under the laws of its jurisdiction of organization, and
has all requisite corporate or other organizational power and
authority under such laws to own or lease and operate its properties
and to carry on its business as now conducted. Each of the Company and
its Subsidiaries is duly qualified or licensed to do business as a
foreign corporation, in good standing in each jurisdiction in which
the nature of the business transacted by it or the character of the
properties owned or leased by it requires it to so qualify or be
licensed, except where the failure to be so licensed or qualified
would not, singly
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<PAGE>
or in the aggregate, be reasonably likely to have a Material Adverse
Effect.
Section 3.3.2. Authorization; Enforceability. (a) (i) the Company
has all requisite corporate power and authority to perform, execute
and deliver its obligations necessary to consummate the Additional
Investment and issue the Additional Warrant; and (ii) all corporate
action on the part of the Company, its officers, directors and
stockholders necessary for the authorization, execution and delivery
of Amendment No. 3 to Stock Purchase Agreement and the Additional
Warrant, and the performance of all obligations of the Company
hereunder and thereunder, and the authorization, issuance, sale and
delivery of the Additional Preferred Stock, has been taken.
(b) Amendment No. 3 to Stock Purchase Agreement and the
Additional Warrant have been duly authorized, executed and delivered
by the Company and constitute the valid and legally binding
obligations of the Company, enforceable against the Company in
accordance with their respective terms, except as enforceability may
be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting the enforcement of creditors'
rights generally and by general principles of equity (whether
enforcement is sought by proceedings in equity or at law).
Section 3.3.3. Consents; No Conflict. (a) Except (i) required
blue sky filings, if any, which will be effected in accordance with
applicable blue sky laws; (ii) filings required under the Securities
Act in connection with the Registration Rights Agreement, and (iii) as
would not be reasonably likely, individually or in the aggregate, to
have a Material Adverse Effect, no consent, approval, order or
authorization of, or registration, qualification, designation,
declaration or filing with, any Governmental Authority or any other
Person on the part of the Company is required in connection with the
consummation of the Additional Investment and the issuance of the
Additional Warrant.
(b) The execution and delivery by the Company of Amendment No. 3
to Stock Purchase Agreement and the Additional Warrant, and the
performance by the Company of its obligations thereunder, will not (i)
violate any provision of the Certificate of Incorporation or Bylaws;
(ii) violate any provision of any law or any order of any court or
Governmental Authority; (iii) conflict with, result in a breach of or
constitute (with notice or lapse of time or both) a default under, or
allow any other party thereto a right to terminate or seek a payment
from the Company or any Subsidiary under the terms of, any indenture,
agreement or other instrument by which the Company or any of its
subsidiaries or any of their properties or assets is bound;
-6-
<PAGE>
or (iv) result in the creation or imposition of any Lien upon any of
the properties or assets of the Company or any of its Subsidiaries,
other than, in the case of clauses (ii), (iii) and (iv), as would not
be reasonably likely to have a Material Adverse Effect.
Section 3.3.4. Valid Issuance of Securities. (a) The Additional
Preferred Stock, the Additional Warrant and the Common Stock
underlying the Additional Preferred Stock and the Additional Warrant,
when issued, sold and delivered in accordance with the terms hereof
for the consideration expressed herein, will be duly authorized,
validly issued, fully paid and nonassessable.
(b) The outstanding shares of Common Stock are duly authorized,
validly issued, fully paid and nonassessable.
(c) The issuance, sale and delivery of the Additional Preferred
Stock, the Additional Warrant and the Common Stock underlying the
Additional Preferred Stock and the Additional Warrant are not subject
to any preemptive right of stockholders of the Company arising under
law or the Certificate of Incorporation or Bylaws or to any
contractual right of first refusal or other contractual right in favor
of any Person.
Section 3.4. Representations and Warranties of the Purchaser with
Respect to the Additional Investment. As of the date of Amendment No.
3 to Stock Purchase Agreement, the Purchaser represents and warrants
to the Company as follows:
Section 3.4.1. Organization. The Purchaser is a limited
partnership duly organized and validly existing under the laws of
Bermuda.
Section 3.4.2. Authorization. The Purchaser has full power and
authority to enter into Amendment No. 3 to Stock Purchase Agreement.
Amendment No. 3 to Stock Purchase Agreement to which the Purchaser is
a party has been duly authorized, executed and delivered by the
Purchaser and constitutes the valid and legally binding obligation of
the Purchaser, enforceable against the Purchaser in accordance with
its terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforcement of creditors' rights generally and by
general principles of equity (whether enforcement is sought by
proceedings in equity or at law).
Section 3.4.3. Purchase for Investment. The Purchaser is an
accredited investor as defined under Rule 501(a) of the Securities
Act. The Additional Preferred Stock and the Additional Warrant will be
acquired for investment for the Purchaser's (or its Affiliates' or a
Designated Purchaser's)
-7-
<PAGE>
own account and not with a view to the resale or distribution of any
part thereof, except in compliance with the provisions of the
Securities Act or an exemption therefrom.
Section 3.4.4. Restricted Securities. The Purchaser understands
that the Additional Preferred Stock and the Additional Warrant are
characterized as "restricted securities" under the federal securities
laws inasmuch as they are being acquired from the Company in a
transaction not involving a public offering and that under such laws
and applicable regulations such Additional Preferred Stock and
Additional Warrant may be resold without registration under the
Securities Act only in certain limited circumstances.
The Purchaser further agrees that each certificate representing
the Additional Preferred Stock or the Additional Warrant shall be
stamped or otherwise imprinted with a legend substantially in the
following form:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 AND MAY NOT BE
TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS SUCH SECURITIES HAVE
BEEN REGISTERED UNDER THAT ACT OR AN EXEMPTION FROM REGISTRATION
IS AVAILABLE."
A certificate shall not bear such legend if the Purchaser shall have
delivered to the Company an opinion of counsel reasonably satisfactory
to the Company to the effect that the securities being sold may be
publicly sold without registration under the Securities Act. The
foregoing shall not be deemed to affect the obligations of the Company
under the Registration Rights Agreement.
Section 3.4.5. Consents; No Conflict. (a) No consent, approval,
order or authorization of, or registration, qualification,
designation, declaration or filing with, any governmental authority,
agency or body or any other person on the part of the Purchaser is
required in connection with the consummation of the Additional
Investment, except for (i) filings required under the Securities Act
or the Exchange Act; or (ii) such consents, approvals, orders,
authorizations, registrations, qualifications, designations,
declarations or filings, which if not obtained or made, as the case
may be, are not reasonably likely to impair in any material respect
the ability of the Purchaser to perform any of its obligations or
agreements or consummate the Additional Investment.
(b) Neither the execution and delivery of Amendment No. 3 to
Stock Purchase Agreement by Purchaser, nor the consummation of the
transactions contemplated hereby, nor the fulfillment of the terms and
compliance with the provisions hereof will conflict with or result in
a material
-8-
<PAGE>
breach of or a material default (or in an occurrence which with the
lapse of time or action by a third party, or both, could result in a
material default) with respect to any of the terms, conditions or
provisions of any applicable order, writ or decree of any court or of
any Governmental Authority, applicable to Purchaser, or of the
governing documents of Purchaser, or of any indenture, contract,
agreement, lease, or other instrument to which Purchaser is a party or
subject or by which Purchaser or any of its properties or assets are
bound, or of any applicable statute, rule, or regulation to which
Purchaser or its businesses is subject.
Section 3.4.6. Financing. The Purchaser has or will have at the
Additional Closing sufficient funds available to it to consummate the
purchase of the Additional Preferred Stock at the Additional Closing
as contemplated hereby."
(e) Article V is hereby amended by adding the following sections:
"Section 5.3. Conditions to Obligations of Purchaser with Respect
to the Additional Investment. The obligation of the Purchaser to
purchase the Additional Preferred Stock at the Additional Closing
shall be subject to the satisfaction or waiver of the following
conditions on or before the Additional Closing Date:
Section 5.3.1. Compliance with this Agreement. The Company shall
have executed and delivered the Additional Preferred Stock, the
Additional Warrant, documents and instruments required to be executed
and delivered on the Additional Closing Date and shall have performed
and complied in all material respects with all agreements and
covenants contained herein which are required to be performed or
complied with by it on or before the Additional Closing Date.
Section 5.3.2. Representations and Warranties Complete and
Correct. The representations and warranties of the Company contained
in Section 3.3 hereof which are qualified as to materiality or a
Material Adverse Effect shall have been true and correct when made and
shall be true and correct at and as of the Additional Closing Date, as
if made on and as of such date (except for representations and
warranties which speak as of a specific time or date, which shall be
true and correct as of such time and date). The representations and
warranties of the Company contained in Section 3.3 hereof which are
not qualified as to materiality or a Material Adverse Effect shall
have been true and correct in all material respects when made and
shall be true and correct in all material respects at and as of the
Additional Closing Date, as if made on and as of such date (except for
representations and warranties which speak as of
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<PAGE>
a specific time or date, which shall be true and correct in all
material respects as of such time and date).
Section 5.3.3. Illegality, Etc. No statute, rule or regulation,
or order, decree or injunction enacted, entered, promulgated or
enforced by any Governmental Authority shall be in effect which
prohibits or restricts the consummation of the Additional Investment.
Section 5.4. Conditions to Obligations of the Company with
Respect to the Additional Investment. The Company's obligation to sell
the Additional Preferred Stock on the Additional Closing Date shall be
subject to the satisfaction or waiver by it of the following
conditions on or before the Additional Closing Date.
Section 5.4.1. Compliance with this Agreement. The Purchaser
shall have executed and delivered all documents required to be
executed and delivered on the Additional Closing Date and shall have
performed and complied in all material respects with all agreements
and covenants contained herein which are required to be performed or
complied with by it on or before the Additional Closing Date.
Section 5.4.2. Purchaser's Representations and Warranties
Complete and Correct. The Purchaser's representations and warranties
contained in Section 3.4 of this Agreement shall be true and correct
in all material respects when made and shall be true and correct in
all material respects at and as of the Additional Closing Date, as if
made on and as of such date.
Section 5.4.3. Illegality, Etc. No statute, rule or regulation,
or order, decree or injunction enacted, entered, promulgated or
enforced by any Governmental Authority shall be in effect which
prohibits or restricts the consummation of the transactions
contemplated hereby."
(f) Section 7.2 is deleted in its entirety and replaced by the following:
"Section 7.2. Survival of Representations and Warranties. The
representations and warranties (i) of the Company set forth in
Sections 3.1.1 through 3.1.7, inclusive, Sections 3.1.19, 3.1.21,
3.1.22 and Section 3.3.1 through 3.3.4, inclusive, hereof and (ii) of
the Purchaser set forth in Sections 3.2.1 through 3.2.7, inclusive,
and Sections 3.4.1 through 3.4.5, inclusive, shall survive the
Closing, indefinitely. None of the other representations or warranties
made in Article III of this Agreement shall survive the Initial
Closing Date."
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<PAGE>
ARTICLE III.
MISCELLANEOUS PROVISIONS
Section 3.1. Counterparts. For the convenience of the parties, any number
of counterparts of this Amendment may be executed by any one or more of the
parties hereto, and each such executed counterpart shall be, and shall be deemed
to be, an original, but all of which together shall constitute one and the same
instrument.
Section 3.2. Ratification. The Stock Purchase Agreement, as amended hereby,
is hereby ratified and confirmed.
Section 3.3. Governing Law. This Amendment shall be governed by and
construed in accordance with the laws of the State of Delaware, without giving
effect to conflicts of law principles thereof.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
effective as of July 16, 1999 and executed on the 3rd day of August, 1999.
AAMES FINANCIAL CORPORATION
By: /s/ Barbara Polsky
------------------------------
Name: Barbara Polsky
Title: Executive Vice President,
General Counsel and Secretary
SPECIALTY FINANCE PARTNERS
By its General Partner
CAPITAL Z FINANCIAL SERVICES FUND II, L.P.,
By its General Partner
CAPITAL Z PARTNERS, L.P.,
By its General Partner
CAPITAL Z PARTNERS, LTD.
By: /s/ Adam M. Mizel
------------------------------
Name: Adam M. Mizel
Title: Partner
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<PAGE>
THIS WARRANT AND THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY
STATE AND MAY NOT BE SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH
REGISTRATION OR AN EXEMPTION THEREFROM UNDER SUCH ACT AND UNDER ANY SUCH
APPLICABLE STATE LAWS, OR IN VIOLATION OF THE PROVISIONS OF THIS WARRANT.
FORM OF WARRANT
To Purchase Common Stock of
AAMES FINANCIAL CORPORATION
<PAGE>
TABLE OF CONTENTS
-----------------
Page
----
ARTICLE I. DEFINITIONS........................................................1
ARTICLE II. EXERCISE OF WARRANT...............................................4
Section 2.1. Manner of Exercise.............................................4
Section 2.2. Payment of Taxes...............................................6
Section 2.3. Fractional Shares..............................................6
ARTICLE III. TRANSFER, DIVISION AND COMBINATION...............................6
Section 3.1. Transfer.......................................................6
Section 3.2. Division and Combination.......................................6
Section 3.3. Expenses.......................................................7
Section 3.4. Maintenance of Books...........................................7
ARTICLE IV. ADJUSTMENTS.......................................................7
Section 4.1. Stock Dividends, Subdivisions, Combinations and
Reclassifications..............................................7
Section 4.2. Issuance of Additional Shares of Common Stock or
Convertible Securities.........................................8
Section 4.3. Certain Other Distributions....................................9
Section 4.4. Other Provisions Applicable to Adjustments Under
This Section..................................................10
Section 4.5. Reorganization, Reclassification, Merger,
Consolidation or Disposition of Assets........................12
Section 4.6. Notices to Warrantholders.....................................12
Section 4.7. Certificates..................................................13
ARTICLE V. NO IMPAIRMENT.....................................................13
ARTICLE VI. RESERVATION AND AUTHORIZATION OF COMMON STOCK,
REGISTRATION WITH OR APPROVAL OF ANY GOVERNMENTAL
AUTHORITY........................................................14
ARTICLE VII. STOCK AND WARRANT TRANSFER BOOKS................................14
ARTICLE VIII. RESTRICTIONS ON TRANSFERABILITY................................15
Section 8.1. Restrictive Legend............................................15
Section 8.2. Transfers.....................................................15
Section 8.3. Termination of Restrictions...................................16
ARTICLE IX. SUPPLYING INFORMATION............................................16
ARTICLE X. LOSS OR MUTILATION................................................17
ARTICLE XI. OFFICE OF THE COMPANY............................................17
ARTICLE XII. REGISTRATION RIGHTS.............................................17
ARTICLE XIII. LIMITATION OF LIABILITY........................................17
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ARTICLE XIV. REPRESENTATION OF HOLDER........................................18
ARTICLE XV. MISCELLANEOUS....................................................18
Section 15.1. Nonwaiver and Expenses.......................................18
Section 15.2. No Rights As Stockholder.....................................18
Section 15.3. Notice Generally.............................................18
Section 15.4. Successors and Assigns.......................................19
Section 15.5. Amendment....................................................19
Section 15.6. Severability.................................................19
Section 15.7. Headings.....................................................19
Section 15.8. Governing Law................................................19
Section 15.9. Mutual Waiver of Jury Trial.....................................19
ii
<PAGE>
THIS WARRANT AND THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY
STATE AND MAY NOT BE SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH
REGISTRATION OR AN EXEMPTION THEREFROM UNDER SUCH ACT AND UNDER ANY SUCH
APPLICABLE STATE LAWS, OR IN VIOLATION OF THE PROVISIONS OF THIS WARRANT.
WARRANT
To Purchase 1,250,000 Shares of Common Stock of
AAMES FINANCIAL CORPORATION
THIS IS TO CERTIFY THAT _____________, or his/her registered assigns, is
entitled, at any time prior to December 31, 2004 (the "Expiration Date"), to
purchase from Aames Financial Corporation, a Delaware corporation (the
"Company"), __________ shares of common stock, par value $0.001 per share, of
the Company (the "Common Stock"), subject to adjustment as provided herein, in
whole or in part, including fractional parts, at a purchase price of $1.00 per
share (the "Exercise Price"), subject to adjustment as set forth herein, all on
the terms and conditions and pursuant to the provisions hereinafter set forth.
Capitalized terms not otherwise defined herein are used as defined in the
Preferred Stock Purchase Agreement. Notwithstanding anything to the contrary set
forth in this Warrant, this Warrant shall not be exercisable by the holder
hereof for a number of shares of Common Stock in excess of the number of shares
as are authorized but not issued on reserved for issuance at the time of
exercise.
ARTICLE I.
DEFINITIONS
As used in this Warrant, the following terms have the respective meanings
set forth below:
"Additional Shares of Common Stock" shall mean all shares of Common Stock
issued by the Company after the Issue Date, other than Warrant Stock.
"Business Day" shall mean any day that is not a Saturday or Sunday or a day
on which banks are required or permitted to be closed in the State of New York.
"Capital Z" shall have the meaning set forth in the first paragraph hereof.
"Commission" shall mean the Securities and Exchange Commission.
"Common Stock" shall have the meaning set forth in the first paragraph
hereof.
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"Company" shall have the meaning set forth in the first paragraph hereof.
"Conversion Price" shall have the meaning set forth in Section 4.2 hereof.
"Convertible Securities" shall mean evidences of indebtedness, shares of
stock or other securities which are convertible into or exchangeable, with or
without payment of additional consideration in cash or property, for Additional
Shares of Common Stock, either immediately or upon the occurrence of a specified
date or a specified event, other than the Senior Preferred Stock and the
Contingent Warrant issued under the Preferred Stock Purchase Agreement.
"Current Market Price" shall mean, when used with reference to shares of
Common Stock or other securities on any date, the closing price per share of
Common Stock or such other securities on such date and, when used with reference
to shares of Common Stock or other securities for any period shall mean the
average of the daily closing prices per share of Common Stock or such other
securities for such period. The closing price for each day shall be the last
sale price, regular way, or, in case no such sale takes place on such day, the
average of the closing bid and asked prices, regular way, in either case as
reported in the principal consolidated transaction reporting system with respect
to securities listed or admitted to trading on the New York Stock Exchange or,
if the Common Stock or such other securities are not listed or admitted to
trading on the New York Stock Exchange, as reported in the principal
consolidated transaction reporting system with respect to securities listed on
the principal national securities exchange on which the Common Stock or such
other securities are listed or admitted to trading or, if the Common Stock is
not listed or admitted to trading on any national securities exchange, the last
quoted sale price or, if not so quoted, the average of the high bid and low
asked prices in the over-the-counter market, as reported by the National
Association of Securities Dealers, Inc. National Market System or such other
securities are not quoted by any such organization, the average of the closing
bid and asked prices as furnished by a professional market maker making a market
in the Common Stock or such other securities selected by the Board of Directors
of the Corporation. If the Common Stock or such other securities are not
publicly held or so listed or publicly traded, "Current Market Price" shall mean
the Fair Market Value per share of Common Stock or of such other securities as
determined in good faith by the Board of Directors of the Corporation based on
an opinion of an independent investment banking firm with an established
national reputation as a valuer of securities, which opinion may be based on
such assumption as such firm shall deem to be necessary and appropriate.
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"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended,
and the rules and regulations of the Commission thereunder.
"Exercise Price" shall have the meaning set forth in the first paragraph
hereof.
"Expiration Date" shall have the meaning set forth in the first paragraph
hereof.
"Fair Market Value" shall mean the amount which a willing buyer would pay a
willing seller in an arm's-length transaction.
"GAAP" shall mean generally accepted accounting principles in the United
States of America as from time to time in effect.
"holder" shall mean, as the context requires, the Person in whose name this
Warrant is registered on the books of the Company maintained for such purpose
and/or the Person holding any Warrant Stock.
"Issue Date" shall mean the date on which this Warrant is issued.
"Person" shall mean any individual, sole proprietorship, partnership, joint
venture, trust, corporation or other entity and shall include any successor (by
merger or otherwise) of such entity.
"Preferred Stock Purchase Agreement" shall mean the Preferred Stock
Purchase Agreement, dated as of December 23, between the Company and Capital Z,
as amended from time to time.
"Registration Rights Agreement" shall mean the Registration Rights
Agreement, dated as of the date hereof, between the Company and Capital Z.
"Restricted Common Stock" shall mean shares of Common Stock which are, or
which upon their issuance on the exercise of this Warrant would be, evidenced by
a certificate bearing the restrictive legend set forth in Section 8.1(a).
"Securities Act" shall mean the Securities Act of 1933, as amended, and the
rules and regulations of the Commission thereunder.
"Series B Preferred Stock" shall mean the Series B Convertible Preferred
Stock, par value $0.001 per share, to be issued pursuant to the Preferred Stock
Purchase Agreement.
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"Series C Preferred Stock" shall mean the Series C Convertible Preferred
Stock, par value $0.001 per share, to be issued pursuant to the Preferred Stock
Purchase Agreement.
"Subsidiary" shall mean any corporation of which an aggregate of more than
50% of the outstanding stock having ordinary voting power to elect a majority of
the board of directors of such corporation (irrespective of whether, at the
time, stock of any other class or classes of such corporation shall have or
might have voting power by reason of the happening of any contingency) is at the
time, directly or indirectly, owned legally or beneficially by the Company
and/or one or more Subsidiaries of the Company.
"Trading Day" means a day on which the principal national securities
exchange on which the Common Stock is listed or admitted to trading is open for
the transaction of business or, if the Common Stock is not listed or admitted to
trading on any national securities exchange, a Business Day.
"Transaction" shall have the meaning set forth in Section 4.5 hereof.
"transfer" shall mean any transfer, sale, encumbrance, hypothecation or
other disposition of this Warrant or any Warrant Stock or of any interest in
either thereof.
"Transfer Notice" shall have the meaning set forth in Section 8.2.
"Warrant Price" shall mean an amount equal to (i) the number of shares of
Common Stock being purchased upon exercise of this Warrant pursuant to Section
2.1, multiplied by (ii) the Exercise Price as of the date of such exercise.
"Warrant Stock" shall mean the shares of Common Stock purchased by the
holder of this Warrant upon the exercise thereof.
ARTICLE II.
EXERCISE OF WARRANT
Section 2.1. Manner of Exercise. From and after the date hereof and until
5:00 P.M., New York time, on the Expiration Date, the holder may exercise this
Warrant for all or any part of the number of shares of Common Stock purchasable
hereunder.
In order to exercise this Warrant, in whole or in part, the holder shall
deliver to the Company at its office at 2 California Plaza, 350 South Grand
Avenue, Los Angeles, California 90071, or at the office or agency designated by
the Company pursuant to Section 11, (i) a written notice of the holder's
election to exercise this Warrant, which notice shall specify the
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number of shares of Common Stock to be purchased, (ii) payment of the Warrant
Price in the manner provided below, and (iii) this Warrant. Such notice shall be
substantially in the form of the subscription form appearing at the end of this
Warrant as Exhibit A, duly executed by or on behalf of the holder. Upon receipt
thereof, the Company shall, as promptly as practicable, and in any event within
five (5) Business Days thereafter, execute or cause to be executed and deliver
or cause to be delivered to the holder a certificate or certificates
representing the aggregate number of full shares of Common Stock issuable upon
such exercise, together with cash in lieu of any fraction of a share, as
hereinafter provided. The stock certificate or certificates so delivered shall
be, to the extent possible, in such denomination or denominations as such holder
shall request in the notice and shall be registered in the name of the holder
or, subject to Section 8, such other name as shall be designated in the notice.
This Warrant shall be deemed to have been exercised and such certificate or
certificates shall be deemed to have been issued, and the holder or any other
Person so designated to be named therein shall be deemed to have become a holder
of record of such shares for all purposes, as of the date the notice, together
with the cash, check or checks and/or securities, if any, and this Warrant, are
received by the Company as described above and all taxes required to be paid by
the holder, if any, pursuant to Section 2.2 prior to the issuance of such shares
have been paid. If this Warrant shall have been exercised in part, the Company
shall, at the time of delivery of the certificate or certificates representing
Warrant Stock, deliver to the holder a new Warrant evidencing the rights of the
holder to purchase the unpurchased shares of Common Stock called for by this
Warrant, which new Warrant shall in all other respects be identical with this
Warrant, or, at the request of the holder, appropriate notation may be made on
this Warrant and the same returned to the holder.
Payment of the Warrant Price shall be made at the option of the holder by
cash, wire transfer to an account in a bank located in the United States
designated for such purpose by the Company, or certified or official bank check,
or by transfer to the Company of shares of Series B Preferred Stock or Series C
Preferred Stock, or any combination thereof. In the event of the application
shares of Series B Preferred Stock or Series C Preferred Stock to the payment of
the Warrant Price, the amount to be credited to the payment of the Warrant Price
shall be the Initial Stated Value per share, in the case of any such application
prior to the consummation of the Recapitalization, or the Post-Recapitalization
Stated Value per share, in the case of any such application after the
consummation of the Recapitalization, in each case, plus an amount per share
equal to all accrued and unpaid dividends thereon, whether or not declared, to
the date of such exercise, provided that no such credit shall be made with
respect to any such dividends if the holder of such shares held such shares on
the record date therefor.
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Section 2.2. Payment of Taxes. The Company shall pay all expenses in
connection with, and all taxes and other governmental charges that may be
imposed with respect to, the issue or delivery of the Warrant Shares, unless
such tax or charge is imposed by law upon the holder, in which case such taxes
or charges shall be paid by the holder. The Company shall not be required,
however, to pay any tax or other charge imposed in connection with any transfer
involved in the issue of any certificate for shares of Common Stock issuable
upon exercise of this Warrant in any name other than that of the holder, and in
such case the Company shall not be required to issue or deliver any stock
certificate until such tax or other charge has been paid or it has been
established to the satisfaction of the Company that no such tax or other charge
is due.
Section 2.3. Fractional Shares. The Company shall not be required to issue
a fractional share of Common Stock upon exercise of this Warrant. As to any
fraction of a share which the holder of this Warrant would otherwise be entitled
to purchase upon such exercise, the Company shall pay a cash adjustment in
respect of such final fraction in an amount equal to the same fraction of the
Current Market Price per share of Common Stock on the date of exercise.
ARTICLE III.
TRANSFER, DIVISION AND COMBINATION
Section 3.1. Transfer. Subject to compliance with Section 8, transfer of
this Warrant and all rights hereunder, in whole or in part, shall be registered
on the books of the Company to be maintained for such purpose, upon surrender of
this Warrant at the principal office of the Company referred to in Section 2.1
or the office or agency designated by the Company pursuant to Section 11,
together with a written assignment of this Warrant substantially in the form of
Exhibit B hereto duly executed by the holder or its agent or attorney and funds
sufficient to pay any transfer taxes payable upon the making of such transfer.
Upon such surrender and, if required, such payment, the Company shall, subject
to Section 8, execute and deliver a new Warrant or Warrants in the name(s) of
the assignee or assignees and in the denomination(s) specified in such
instrument of assignment, and shall issue to the assignor a new Warrant
evidencing the portion of this Warrant not so assigned, and this Warrant shall
promptly be canceled. A Warrant, if properly assigned in compliance with Section
8, may be exercised by a new holder for the purchase of shares of Common Stock
without having a new Warrant issued.
Section 3.2. Division and Combination. Subject to Section 8, this Warrant
may be divided or combined with other Warrants upon presentation hereof at the
aforesaid office or agency of the Company, together with a written notice
specifying the names and denominations in which new Warrants are to be issued,
signed by the holder or its agent or attorney. Subject
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to compliance with Section 3.1 and with Section 8, as to any transfer which may
be involved in such division or combination, the Company shall execute and
deliver a new Warrant or Warrants in exchange for the Warrant or Warrants to be
divided or combined in accordance with such notice.
Section 3.3. Expenses. The Company shall prepare, issue and deliver at its
own expense (other than transfer taxes) the new Warrant or Warrants under this
Section 3.
Section 3.4. Maintenance of Books. The Company agrees to maintain, at its
aforesaid office or agency, books for the registration and the registration of
transfer of the Warrants.
ARTICLE IV.
ADJUSTMENTS
The number of shares of Common Stock for which this Warrant is exercisable,
or the price at which such shares may be purchased upon exercise of this
Warrant, shall be subject to adjustment from time to time as set forth in this
Section 4. The Company shall give the holder notice of any event described below
which requires an adjustment pursuant to this Section 4 at the time of such
event.
Section 4.1. Stock Dividends, Subdivisions, Combinations and
Reclassifications. If the Company shall at any time or from time to time after
the Issue Date:
(a) pay a dividend or make a distribution, on the outstanding shares
of Common Stock in Additional Shares of Common Stock,
(b) subdivide its outstanding shares of Common Stock into a larger
number of shares of Common Stock,
(c) combine its outstanding shares of Common Stock into a smaller
number of shares of Common Stock, or
(d) issue by reclassification of its shares of Common Stock any shares
of capital stock of the Company,
then, and in each such case, the number of shares of Common Stock issuable upon
exercise of the Warrants evidenced hereby immediately prior to such event or the
record date therefor, whichever is earlier, shall be adjusted so that the holder
of any Warrant evidenced hereby thereafter exercised shall be entitled to
receive the number of shares of Common Stock or other securities of the Company
which such holder would have owned or have been entitled to receive after the
happening of any of the events described above, had such Warrant been exercised
immediately prior to the happening of such event or the record
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date therefor, whichever is earlier. An adjustment made pursuant to this Section
4.1 shall become effective (x) in the case of any such dividend or distribution,
immediately after the close of business on the record date for the determination
of holders of shares of Common Stock entitled to receive such dividend or
distribution, or (y) in the case of any such subdivision, reclassification or
combination, at the close of business on the day upon which such corporate
action becomes effective.
Section 4.2. Issuance of Additional Shares of Common Stock or Convertible
Securities. In the case the Corporation shall, after the Issue Date, issue or
sell:
(a) Additional Shares of Common Stock at a price per share, or
(b) Convertible Securities having a Conversion Price per share,
less than the Current Market Price (for a period of 15 consecutive Trading Days
prior to such date), then, and in each such case, the number of shares of Common
Stock issuable upon exercise of the Warrants evidenced hereby shall be adjusted
so that the holder of each Warrant evidenced hereby shall be entitled to
receive, upon the exercise thereof, the number of shares of Common Stock
determined by multiplying (A) the number of shares of Common Stock issuable upon
exercise of the Warrants evidenced hereby on the day immediately prior to such
date by (B) a fraction, the numerator of which shall be the sum of (1) the
number of shares of Common Stock outstanding on the date on which such shares or
Convertible Securities are issued and (2) the number of Additional Shares of
Common Stock issued, or into which the Convertible Securities may convert, and
the denominator of which shall be the sum of (x) the number of shares of Common
Stock outstanding on such date and (y) the number of shares of Common Stock
which the aggregate consideration receivable by the Company for the total number
of shares of Common Stock so issued, or the number of shares of Common Stock
which the aggregate of the Conversion Price of such Convertible Securities so
issued, would purchase at the Current Market Price on such date.
An adjustment made pursuant to this Section 4.2 shall be made on the next
Business Day following the date on which any such issuance is made and shall be
effective retroactively immediately after the close of business on such date.
For purposes of this Section 4.2, the aggregate consideration receivable by the
Company in connection with the issuance of any securities shall be deemed to be
the sum of the aggregate offering price to the public (before deduction of
underwriting discounts or commissions and expenses payable to third parties),
and the "Conversion Price" of any Convertible Securities is the total amount
received or receivable by the Company as consideration for the issue or sale of
such Convertible Securities (before deduction of underwriting discounts or
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commissions and expenses payable to third parties) plus the minimum aggregate
amount of additional consideration, if any, payable to the Corporation upon the
conversion, exchange or exercise of any such Convertible Securities.
Neither (A) the issuance of any shares of Common Stock (whether treasury
shares or newly issued shares) pursuant to a dividend or distribution on, or
subdivision, combination or reclassification of, the outstanding shares of
Common Stock requiring an adjustment in the number of shares of Common Stock
issuable upon exercise of the Warrants evidenced hereby pursuant to Section 4.1,
or pursuant to any employee benefit plan or program of the Company or pursuant
to any option, warrant, right, or Convertible Security outstanding as of the
date hereof (including, but not limited to, the Rights, the Series B Preferred
Stock, the Series C Preferred Stock and the Warrants) nor (B) the issuance of
shares of Common Stock pursuant thereto shall be deemed to constitute an
issuance of Common Stock or Convertible Securities by the Company to which this
Section 4.2 applies.
Upon expiration of any Convertible Securities which shall not have been
exercised or converted and for which an adjustment shall have been made pursuant
to this Section 4.2, the Conversion Price computed upon the original issue
thereof shall upon expiration be recomputed as if the only additional shares of
Common Stock issued were such shares of Common Stock (if any) actually issued
upon exercise or conversion of such Convertible Securities and the consideration
received therefor was the consideration actually received by the Corporation for
the issue of such Convertible Securities (whether or not exercised or converted)
plus the consideration actually received by the Corporation upon such exercise
of conversion.
Section 4.3. Certain Other Distributions. In case the Company shall at any
time or from time to time after the Issue Date declare, order, pay or make a
dividend or other distribution (including, without limitation, any distribution
of stock or other securities or property or rights or warrants to subscribe for
securities of the Company or any of its Subsidiaries by way of dividend or
spin-off), on its Common Stock, other than:
(a) regular quarterly dividends payable in cash in an aggregate amount
not to exceed 15% of net income from continuing operations before
extraordinary items of the Company, determined in accordance with GAAP,
during the period (treated as one accounting period) commencing on July 1,
1998, and ending on the date such dividend is paid, or
(b) dividends or distributions of shares of Common Stock which are
referred to in Section 4.1,
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then, and in each such case, the number of shares of Common Stock issuable upon
exercise of the Warrants evidenced hereby shall be adjusted so that the holder
of each share of each Warrant evidenced thereby shall be entitled to receive,
upon the exercise thereof, the number of shares of Common Stock determined by
multiplying (1) the number of shares of Common Stock issuable upon exercise of
the Warrants evidenced hereby on the day immediately prior to the record date
fixed for the determination of stockholders entitled to receive such dividend or
distribution by (2) a fraction, the numerator of which shall be the then Current
Market Price per share of Common Stock for the period of 20 Trading Days
preceding such record date, and the denominator of which shall be the Current
Market Price per share of Common Stock for the period of 20 Trading Days
preceding such record date, less the Fair Market Value per share of Common Stock
(as determined in good faith by the Board of Directors of the Company, a
certified resolution with respect to which shall be mailed to the holder of the
Warrants evidenced hereby) of such dividend or distribution; provided, however,
that in the event of a distribution of shares of capital stock of a Subsidiary
of the Company (a "Spin-Off") made to holders of shares of Common Stock, the
numerator of such fraction shall be the sum of the Current Market Price per
share of Common Stock for the period of 20 Trading Days preceding the 35th
Trading Day after the effective date of such Spin-Off and the Current Market
Price of the number of shares (or the fraction of a share) of capital stock of
the Subsidiary which is distributed in such Spin-off in respect of one share of
Common Stock for the period of 20 Trading Days preceding such 35th Trading Day
and the denominator of which shall be the Current Market Price per share of the
Common Stock for the period of 20 Trading Days proceeding such 35th Trading Day.
An adjustment made pursuant to this Section 4.3 shall be made upon the opening
of business on the next Business Day following the date on which any such
dividend or distribution is made and shall be effective retroactively
immediately after the close of business on the record date fixed for the
determination of stockholders entitled to receive such dividend or distribution;
provided, however, if the proviso to the preceding sentence applies, then such
adjustment shall be made and be effective as of such 35th Trading Day after the
effective date of such Spin-Off.
Section 4.4. Other Provisions Applicable to Adjustments Under This Section.
The following provisions shall be applicable to the making of adjustments
provided for in this Section 4:
(a) For purposes of this Section 4, the number of shares of Common
Stock at any time outstanding shall not include any shares of Common Stock
then owned or held by or for the account of the Company.
(b) The term "dividend", as used in this Section 4 shall mean a
dividend or other distribution upon
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stock of the Company except pursuant to the Rights Agreement.
Notwithstanding anything in this Section 4 to the contrary, the number of
shares of Common Stock issuable upon exercise of the Warrants evidenced
hereby shall not be adjusted as a result of any dividend, distribution or
issuance of securities of the Company pursuant to the Rights Agreement.
(c) Notwithstanding anything in this Section 4 to the contrary, the
Company shall not be required to give effect to any adjustment in the
number of shares of Common Stock issuable upon exercise of the Warrants
evidenced hereby unless and until the net effect of one or more adjustments
(each of which shall be carried forward), determined as above provided,
shall have resulted in a change in the number of shares of Common Stock
issuable upon exercise of the Warrants evidenced hereby by at least
one-hundredth of one share of Common Stock, and when the cumulative net
effect of more than one adjustment so determined shall be to change the
number of shares of Common Stock issuable upon exercise of the Warrants
evidenced hereby by at least one-hundredth of one share of Common Stock,
such change in the number of shares of Common Stock issuable upon exercise
of the Warrants evidenced hereby shall thereupon be given effect.
(d) The certificate of any firm of independent public accountants of
recognized standing selected by the Board of Directors of the Company
(which may be the firm of independent public accountants regularly employed
by the Company) shall be presumptively correct for any computation made
under this Section 4.
(e) If the Company shall take a record of the holders of its Common
Stock for the purpose of entitling them to receive a dividend or other
distribution, and shall thereafter and before the distribution to
stockholders thereof legally abandon its plan to pay or deliver such
dividend or distribution, then, no adjustment in the number of shares of
Common Stock issuable upon exercise of the Warrants evidenced hereby shall
be required by reason of the taking of such record.
(f) There shall be no adjustment of the number of shares of Common
Stock issuable upon exercise of the Warrants evidenced hereby in case of
the issuance of any stock of the Company in a merger, reorganization,
acquisition or other similar transaction except as set forth in Sections
4.1, 4.2 and 4.5.
(g) Notwithstanding anything herein to the contrary, the Company
agrees not to enter into any transaction which, by reason of any adjustment
hereunder,
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would cause the Exercise Price to be less than the par value per share of
Common Stock.
(h) Upon each adjustment to the number of shares of Common Stock
issuable upon exercise of the Warrants pursuant to Sections 4.1, 4.2 or
4.3, the Exercise Price effective immediately prior to the making of such
adjustment shall thereafter be adjusted to be the amount obtained by (i)
multiplying (A) the applicable number of shares of Common Stock issuable
upon exercise of the Warrants immediately prior to such adjustment by (B)
the Exercise Price in effect immediately prior to such adjustment and (ii)
dividing the product so obtained by the number of shares of Common Stock
issuable upon exercise of the Warrants immediately after such adjustment.
Section 4.5. Reorganization, Reclassification, Merger, Consolidation or
Disposition of Assets. In case of any reorganization or reclassification of
outstanding shares of Common Stock (other than a reclassification covered by
Section 4.1), or in case of any consolidation or merger of the Company with or
into another corporation, or in the case of any sale or conveyance to another
corporation of the property of the Company as an entirety or substantially as an
entirety (each of the foregoing being referred to as a "Transaction"), each such
Warrant then outstanding shall thereafter be exercisable for, in lieu of the
Common Stock issuable upon such exercise prior to consummation of the
Transaction, the kind and amount of shares of stock and other securities and
property receivable (including cash) upon the consummation of the Transaction by
a holder of that number of shares of Common Stock issuable upon exercise of such
Warrant immediately prior to the Transaction (including, on a pro rata basis,
the cash, securities or property received by holders of Common Stock in any
tender or exchange offer that is a step in the Transaction).
Section 4.6. Notices to Warrantholders. In case at any time or from time to
time, prior to the Expiration Date, the Company shall pay any dividend or make
any other distribution to the holders of its Common Stock, or shall offer for
subscription pro rata to the holders of its Common Stock any additional shares
of stock of any class or any other right, or there shall be any capital
reorganization or reclassification of the Common Stock of the Company or
consolidation or merger of the Company with or into another corporation, or any
sale or conveyance to another corporation of the property of the Company as an
entirety or substantially as an entirety, or there shall be a voluntary or
involuntary dissolution, liquidation or winding up of the Company, then, in any
one or more of said cases the Company shall give at least 20 days' prior written
notice (the time of mailing of such notice shall be deemed to be the time of
giving thereof) to the registered holder of the Warrants evidenced hereby at its
address as shown on the books of the Company maintained by the Transfer Agent
thereof of the date on which (i) the books of the
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Company shall close or a record shall be taken for such stock dividend,
distribution or subscription rights or (ii) such reorganization,
reclassification, consolidation, merger, sale or conveyance, dissolution,
liquidation or winding up shall take place, as the case may be, provided that in
the case of any Transaction to which Section 4.5 applies the Company shall give
at least 30 days' prior written notice as aforesaid. Such notice shall also
specify the date as of which the holders of the Common Stock of record shall
participate in said dividend, distribution or subscription rights or shall be
entitled to exchange their Common Stock for securities or other property
deliverable upon such reorganization, reclassification, consolidation, merger,
sale or conveyance or participate in such dissolution, liquidation or winding
up, as the case may be. Failure to give such notice shall not invalidate any
action so taken.
Section 4.7. Certificates. Upon any adjustment of the number of shares of
Common Stock issuable upon exercise of the Warrants evidenced hereby or of the
Exercise Price, then, and in each such case, the Company shall promptly deliver
to the holders of the Warrants and the Common Stock, a certificate signed by the
President or a Vice President and by the Treasurer or an Assistant Treasurer or
the Secretary or an Assistant Secretary of the Company setting forth in
reasonable detail the event requiring the adjustment and the method by which
such adjustment was calculated and specifying the increased or decreased number
of shares of Common Stock issuable upon exercise of the Warrants evidenced
hereby and the Exercise Price then in effect following such adjustment.
ARTICLE V.
NO IMPAIRMENT
The Company shall not by any action including, without limitation, amending
its certificate of incorporation or through any reorganization, transfer of
assets, consolidation, merger, dissolution, issue or sale of securities or any
other voluntary action, avoid or seek to avoid the observance or performance of
any of the terms of this Warrant, but will at all times in good faith assist in
the carrying out of all such terms and in the taking of all such actions as may
be necessary or appropriate to protect the rights of the holder of the Warrant
against impairment. Without limiting the generality of the foregoing, the
Company will (a) not increase the par value of any shares of Common Stock
receivable upon the exercise of this Warrant above the Exercise Price
immediately prior to such increase in par value, (b) take all such action as may
be necessary or appropriate in order that the Company may validly and legally
issue fully paid and nonassessable shares of Common Stock, free and clear of any
liens, claims, encumbrances and restrictions (other than as provided herein)
upon the exercise of this Warrant, and (c) use its best efforts to obtain all
such authorizations, exemptions or consents from any public regulatory
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body having jurisdiction thereof as may be necessary to enable the Company to
perform its obligations under this Warrant.
Upon the request of the holder of the Warrant, the Company will at any time
during the period this Warrant is outstanding acknowledge in writing, in form
satisfactory to the holder of this Warrant, the continuing validity of this
Warrant and the obligations of the Company hereunder.
ARTICLE VI.
RESERVATION AND AUTHORIZATION OF
COMMON STOCK, REGISTRATION WITH OR
APPROVAL OF ANY GOVERNMENTAL AUTHORITY
The Company covenants and agrees that, after the Recapitalization and until
the Expiration Date, the Company shall at all times reserve and keep available
for issue upon the exercise of Warrants such number of its authorized but
unissued shares of Common Stock as will be sufficient to permit the exercise in
full of all outstanding Warrants. All shares of Common Stock which shall be so
issuable, when issued upon exercise of Warrants and payment therefor in
accordance with the terms of such Warrant, shall be duly and validly issued,
fully paid and nonassessable and free and clear of any liens, claims and
restrictions (other than as provided herein). No stockholder of the Company has
or shall have any preemptive rights to subscribe for such shares of Common
Stock.
Before taking any action which would result in an adjustment in the number
of shares of Common Stock for which this Warrant is exercisable or in the
Exercise Price, the Company shall obtain all such authorizations or exemptions
thereof, or consents thereto, as may be necessary from any public regulatory
body or bodies having jurisdiction thereof.
ARTICLE VII.
STOCK AND WARRANT TRANSFER BOOKS
The Company will not at any time, except upon dissolution, liquidation or
winding up of the Company, close its stock transfer books or Warrant transfer
books so as to result in preventing or delaying the exercise or transfer of any
Warrant.
ARTICLE VIII.
RESTRICTIONS ON TRANSFERABILITY
The Warrants and the Warrant Stock shall not be transferred before
satisfaction of the conditions specified in this Section 8, which conditions are
intended to ensure compliance with the provisions of the Securities Act and
state securities laws with respect to the Transfer of any Warrant or
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any Warrant Stock. The holder, by acceptance of this Warrant, agrees to be bound
by the provisions of this Section 8.
Section 8.1. Restrictive Legend.
(a) Except as otherwise provided in this Section 8, each certificate
for Warrant Stock initially issued upon the exercise of this Warrant, and
each certificate for Warrant Stock issued to any subsequent transferee of
any such certificate, shall be stamped or otherwise imprinted with a legend
in substantially the following form:
"The shares represented by this certificate have not been registered
under the Securities Act of 1933, as amended, or the securities laws
of any state and are subject to the conditions specified in a certain
Warrant dated January 4, 1998, originally issued by Aames Financial
Corporation. The shares represented by this certificate may not be
transferred in violation of such Act and laws, the rules and
regulations thereunder or the provisions of the Warrant. A copy of the
form of said Warrant is on file with the Secretary of Aames Financial
Corporation. The holder of this certificate, by acceptance of this
certificate, agrees to be bound by the provisions of such Warrant."
(b) Except as otherwise provided in this Section 8, each Warrant shall
be stamped or otherwise imprinted with a legend in substantially the
following form:
"This Warrant and the securities represented hereby have not been
registered under the Securities Act of 1933, as amended, or the
securities laws of any state and may not be sold or otherwise
transferred in the absence of such registration or an exemption
therefrom under such Act and under any such applicable state laws, or
in violation of the provisions of this Warrant."
Section 8.2. Transfers. Prior to any transfer or attempted transfer of any
Warrants or any shares of Restricted Common Stock, the holder of such Warrants
or Restricted Common Stock shall give notice (a "Transfer Notice") to the
Company of such holder's intention to effect such transfer, describing the
manner and circumstances of the proposed transfer, and obtain from counsel a
written opinion addressed and reasonably satisfactory to the Company that the
proposed transfer of such Warrants or such Restricted Common Stock may be
effected without registration under the Securities Act and applicable state
securities laws. After receipt of the Transfer Notice and written opinion, the
Company shall, within two Business Days
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thereof, so notify the holder of such Warrants or such Restricted Common Stock
and such holder shall thereupon be entitled to transfer such warrants or such
Restricted Common Stock, in accordance with the terms of the Transfer Notice.
Each certificate, if any, evidencing such shares of Restricted Common Stock
issued upon such transfer shall bear the restrictive legend set forth in Section
8.1(a), and each Warrant issued upon such transfer shall bear the restrictive
legend set forth in Section 8.1(b), unless in the written opinion of counsel
addressed to the Company such legend is not required in order to ensure
compliance with the Securities Act.
Section 8.3. Termination of Restrictions. Notwithstanding the foregoing
provisions of Section 8, the restrictions imposed by this Section 8 upon the
transferability of the Warrants, the Warrant Stock and the Restricted Common
Stock (or Common Stock issuable upon the exercise of the Warrants) and the
legend requirements of Section 8.1 shall terminate as to any particular Warrant
or share of Warrant Stock or Restricted Common Stock (or Common Stock issuable
upon the exercise of the Warrants) (i) as to the Warrant Stock and Restricted
Common Stock, when and so long as the resale of such security shall have been
effectively registered under the Securities Act and disposed of pursuant
thereto, or (ii) as to the Warrant, Warrant Stock and Restricted Common Stock,
when the holder of the Warrant, Warrant Stock or Restricted Common Stock shall
have delivered to the Company the written opinion of counsel addressed and
reasonably satisfactory to the Company stating that such legend is not required
in order to ensure compliance with the Securities Act. Whenever the restrictions
imposed by this Section shall terminate as to any share of Restricted Common
Stock, as hereinabove provided, the holder thereof shall be entitled to receive
from the Company, at the Company's expense (except for any transfer taxes), a
new certificate representing such Common Stock not bearing the restrictive
legend set forth in Section 8.1(a).
ARTICLE IX.
SUPPLYING INFORMATION
The Company shall cooperate with the holder of the Warrant and the holder
of Restricted Common Stock in supplying such information as may be reasonably
requested by such holder or reasonably necessary for such holder to complete and
file any information reporting forms presently or hereafter required by the
Commission as a condition to the availability of an exemption from the
Securities Act for the sale of any Warrant or Restricted Common Stock.
16
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ARTICLE X.
LOSS OR MUTILATION
Upon receipt by the Company from any holder of evidence reasonably
satisfactory to the Company of the ownership of and the loss, theft, destruction
or mutilation of this Warrant and indemnity reasonably satisfactory to it and in
case of mutilation upon surrender and cancellation hereof, the Company will
execute and deliver in lieu hereof a new Warrant of like tenor to the holder;
provided, in the case of mutilation, no indemnity shall be required if this
Warrant in identifiable form is surrendered to the Company for cancellation.
ARTICLE XI.
OFFICE OF THE COMPANY
As long as any of the Warrants remain outstanding, the Company shall
maintain an office or agency (which may be the principal executive offices of
the Company) where the Warrants may be presented for exercise, registration of
transfer, division or combination as provided in this Warrant.
ARTICLE XII.
REGISTRATION RIGHTS
The Warrant Stock issuable upon exercise of this Warrant are entitled to
the benefits of the Registration Rights Agreement. The Company shall keep a copy
of the Registration Rights Agreement, and any amendments thereto, at the office
or agency designated by the Company pursuant to Section 11 and shall furnish
copies thereof to the holder upon request.
ARTICLE XIII.
LIMITATION OF LIABILITY
No provision hereof, in the absence of affirmative action by the holder to
purchase shares of Common Stock, and no enumeration herein of the rights or
privileges of the holder hereof, shall give rise to any liability of the holder
for the purchase price of any Common Stock or as a stockholder of the Company,
whether such liability is asserted by the Company or by creditors of the
Company.
ARTICLE XIV.
REPRESENTATION OF HOLDER
The holder represents that it is acquiring the Warrant and the Warrant
Stock for the purpose of investment and not with a view to the resale or
distribution hereof or thereof; provided,
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that the disposition of holder's property shall at all times be and remain
within its control.
ARTICLE XV.
MISCELLANEOUS
Section 15.1. Nonwaiver and Expenses. No course of dealing or any delay or
failure to exercise any right hereunder on the part of the parties shall operate
as a waiver of such right or otherwise prejudice the parties' rights, powers or
remedies. If the Company fails to comply with any provision of this Warrant, the
Company shall pay to the holder such amounts as shall be sufficient to cover any
costs and expenses including, but not limited to, reasonable attorneys' fees
incurred by the holder in collecting any amounts due pursuant hereto or in
otherwise enforcing any of its rights, powers or remedies hereunder.
Section 15.2. No Rights As Stockholder. The Person in whose name this
Warrant is registered shall be deemed the owner hereof and of the Warrants
evidenced hereby for all purposes. The registered holder of this Warrant shall
not be entitled to any rights whatsoever as a stockholder of the Company except
as herein provided.
Section 15.3. Notice Generally. Any notice, demand, request, consent,
approval, declaration, delivery or other communication hereunder to be made
pursuant to the provisions of this Warrant shall be sufficiently given or made
if in writing and either delivered in person with receipt acknowledged or sent
by registered or certified mail, return receipt requested, postage prepaid,
addressed as follows:
(a) If to the holder, at its last known address appearing on the books of
the Company maintained for such purpose.
(b) If to the Company:
Aames Financial Corporation
2 California Plaza
350 South Grand Avenue
Los Angeles, California 90071
Attention: David A. Sklar
Fax No.: (323) 210-5276
with a copy to:
Troop Steuber Pasich Reddick & Tobey
2029 Century Park East
Los Angeles, California 90067
Attention: C. N. Franklin Reddick, Esq.
Fax No.: (310) 728-2204
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or at such other address as may be substituted by notice given as herein
provided. The giving of any notice required hereunder may be waived in writing
by the party entitled to receive such notice. Every notice, demand, request,
consent, approval, declaration, delivery or other communication hereunder shall
be deemed to have been duly given or served on the date on which personally
delivered, with receipt acknowledged, or three (3) Business Days after the same
shall have been deposited in the United States mail.
Section 15.4. Successors and Assigns. Subject to the provisions of Sections
3.1 and 8, (i) this Warrant and the rights evidenced hereby shall inure to the
benefit of and be binding upon the successors of the Company and the successors
and assigns of the holder, and (ii) the provisions of this Warrant are intended
to be for the benefit of all holders from time to time of this Warrant, and
shall be enforceable by any such holders.
Section 15.5. Amendment. The Warrants may be modified or amended or the
provisions thereof waived with the written consent of the Company and the
holders of the majority of the portion of this Warrant then outstanding.
Section 15.6. Severability. Wherever possible, each provision of this
Warrant shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Warrant shall be prohibited by or
invalid under applicable law, such provision shall be ineffective to the extent
of such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Warrant.
Section 15.7. Headings. The headings used in this Warrant are for the
convenience of reference only and shall not, for any purpose, be deemed a part
of this Warrant.
Section 15.8. Governing Law. This Warrant shall be governed by and
construed in accordance with the laws of the State of Delaware, without giving
effect to conflicts of law principles thereof.
Section 15.9. Mutual Waiver of Jury Trial. BECAUSE DISPUTES ARISING IN
CONNECTION WITH COMPLEX FINANCIAL TRANSACTIONS ARE MOST QUICKLY AND ECONOMICALLY
RESOLVED BY AN EXPERIENCED AND EXPERT PERSON AND THE PARTIES WISH APPLICABLE
STATE AND FEDERAL LAWS TO APPLY (RATHER THAN ARBITRATION RULES), THE PARTIES
DESIRE THAT THEIR DISPUTES BE RESOLVED BY A JUDGE APPLYING SUCH APPLICABLE LAWS.
THEREFORE, TO ACHIEVE THE BEST COMBINATION OF THE BENEFITS OF THE JUDICIAL
SYSTEM AND OF ARBITRATION, THE PARTIES HERETO WAIVE ALL RIGHT TO TRIAL BY JURY
IN ANY ACTION, SUIT OR PROCEEDING BROUGHT TO ENFORCE OR DEFEND ANY RIGHTS OR
REMEDIES UNDER THIS WARRANT.
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IN WITNESS WHEREOF, the Company has caused this Warrant to be duly executed
by its authorized officer on August 3, 1999.
AAMES FINANCIAL CORPORATION
By: /s/ Barbara Polsky
------------------------------
Name: Barbara Polsky
Title: Executive Vice President,
General Counsel and Secretary
20
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EXHIBIT A
SUBSCRIPTION FORM
(To be executed only upon exercise of Warrant]
The undersigned registered owner of this Warrant irrevocably exercises this
Warrant for the purchase of _______ Shares of Common Stock of AAMES FINANCIAL
CORPORATION and herewith makes payment therefor, all at the price and on the
terms and conditions specified in this Warrant and requests that certificates
for the shares of Common Stock hereby purchased (and any securities or other
property issuable upon such exercise) be issued in the name of and delivered to
_______________ whose address is _________________ and, if such shares of Common
Stock shall not include all of the shares of Common Stock issuable as provided
in this Warrant, that a new Warrant of like tenor and date for the balance of
the shares of Common Stock issuable hereunder be delivered to the undersigned.
_________________________ (Name of Registered Owner)
_________________________ (Signature of Registered owner)
_________________________ (Street Address)
_________________________ (City) (State) (Zip Code)
NOTICE: The signature on this subscription must correspond with the name as
written upon the face of the within Warrant in every particular,
without alteration or enlargement or any change whatsoever.
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EXHIBIT B
ASSIGNMENT FORM
FOR VALUE RECEIVED the undersigned registered owner of this Warrant hereby
sells, assigns and transfers unto the Assignee named below all of the rights of
the undersigned under this Warrant, with respect to the number of shares of
Common Stock set forth below:
Name and Address of Assignee No. of Shares of Common Stock
and does hereby irrevocably constitute and appoint _____________
attorney-in-fact to register such transfer on the books of AAMES FINANCIAL
CORPORATION maintained for the purpose, with full power of substitution in the
premises.
Dated: _____________________________________
Name: ______________________________________
Signature: _________________________________
Witness: ___________________________________
NOTICE: The signature on this assignment must correspond with the name as
written upon the face of the within Warrant in every particular,
without alteration or enlargement or any change whatsoever.
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Joint Filing Agreement
The undersigned hereby agree that the statement on Schedule 13D with
respect to the shares of Common Stock of Aames Financial Corporation is,
and any amendment thereto signed by each of the undersigned shall be, filed
on behalf of each undersigned pursuant to and in accordance with the
provisions of the Securities Exchange Act of 1934, as amended.
Dated: August 11, 1999
CAPITAL Z FINANCIAL SERVICES
FUND II, L.P., a Bermuda limited partnership
By: Capital Z Partners, L.P., a Bermuda
limited Partnership, its General Partner
By: Capital Z Partners, Ltd., a Bermuda
corporation, its General Partner
By: /s/ David A. Spuria
---------------------------
Name: David A. Spuria
Title: General Counsel
CAPITAL Z PARTNERS, L.P.,
a Bermuda limited partnership
By: Capital Z Partners, Ltd., a Bermuda
corporation, its General Partner
By: /s/ David A. Spuria
---------------------------
Name: David A. Spuria
Title: General Counsel
CAPITAL Z PARTNERS, LTD.,
a Bermuda corporation
By: /s/ David A. Spuria
---------------------------
Name: David A. Spuria
Title: General Counsel
<PAGE>
CAPITAL Z MANAGEMENT, LLC,
a Delaware limited liability company
By: /s/ David A. Spuria
---------------------------
Name: David A. Spuria
Title: General Counsel
SPECIALTY FINANCE PARTNERS,
a Bermuda general partnership
By: Capital Z Financial Services Fund II,
L.P., its General Partner
By: Capital Z Partners, L.P.,
its General Partner
By: Capital Z Partners, Ltd.,
its General Partner
By: /s/ David A. Spuria
---------------------------
Name: David. A. Spuria
Title: General Counsel
CAPITAL Z FINANCIAL SERVICES PRIVATE FUND II,
L.P., a Bermuda general partnership
By: Capital Z Partners, L.P., a Bermuda
limited Partnership, its General Partner
By: Capital Z Partners, Ltd., a Bermuda
corporation, its General Partner
By: /s/ David A. Spuria
---------------------------
Name: David A. Spuria
Title: General Counsel
EQUIFIN CAPITAL PARTNERS, LTD., a Cayman
Islands corporation
By: /s/ Mani A. Sadeghi
---------------------------
Name: Mani A. Sadeghi
Title: President, Chief Executive
Officer and Director
2
