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EXHIBIT 10.27
MANAGEMENT VOTING AGREEMENT
MANAGEMENT VOTING AGREEMENT dated as of December 23, 1998, among
Capital Z Financial Services Fund II, L.P., a Bermuda limited partnership
("Capital Z"), and Xxxx Xxxxxxxx and Xxxx Xxxxxxxxx (collectively, the
"Shareholders").
WHEREAS, the Shareholders desire that the Aames Financial
Corporation, a Delaware corporation (the "Company"), and Capital Z enter into a
Preferred Stock Purchase Agreement dated as of the date hereof (as the same may
be amended from time to time, the "Purchase Agreement"), which provides, among
other things, that Capital Z, together with certain Capital Z affiliates and
co-investors as provided therein, will purchase shares of the Company's Series B
Convertible Preferred Stock, par value $0.001 per share ("Series B Preferred
Stock") and Series C Convertible Preferred Stock, par value $0.001 per share
("Series C Preferred Stock," and, together with the Series B Preferred Stock,
"Senior Preferred Stock"), in the amounts and subject to the conditions set
forth in the Purchase Agreement; and
WHEREAS, the Shareholders are executing this Agreement as an
inducement to the Company and Capital Z to execute and deliver the Purchase
Agreement.
NOW THEREFORE, in consideration of the execution and delivery by
the Company and Capital Z of the Purchase Agreement and the mutual covenants,
conditions and agreements contained therein and herein, the parties hereto agree
as follows:
SECTION 1. Representations and Warranties. Each of the
Shareholders severally and not jointly represents and warrants to the Company
and Capital Z as to himself (and not as to any other Shareholder) as follows:
(a) Such Shareholder is the record and beneficial owner of the
number of shares of the Company's common stock, par value $0.001 per share
("Common Stock") (together with any shares of Common Stock or other voting
securities of the Company, including, without limitation, Senior Preferred
Stock, with respect to which the Shareholder obtains voting power after the
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date hereof, the "Shares"), as set forth on Exhibit A hereto (which Exhibit
shall be amended after the date hereof to include any voting securities of the
Company with respect to which the Shareholder obtains voting power after the
date hereof). Except for such number of Shares and except for Shares, if any,
(i) issuable in connection with options outstanding as of the date hereof or
(ii) which such Shareholder has agreed to purchase in connection with the
transactions contemplated by the Purchase Agreement, such Shareholder is not the
record or beneficial owner of any shares of Common Stock.
(b) Such Shareholder has the authority to execute, deliver and
perform this Agreement without the necessity of obtaining any third party
consent, approval, authorization or waiver, or giving of any notice or
otherwise, except for such consents as have been obtained, are unconditional and
are in full force and effect.
(c) This Agreement has been duly executed and delivered by such
Shareholder and, assuming due execution and delivery thereof by the Company and
Capital Z, constitutes the legal, valid, and binding obligation of such
Shareholder enforceable against the Shareholder 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).
(d) The execution, delivery, and performance of this Agreement by
such Shareholder will not (i) result in the breach of or constitute a default
under any contract to which such Shareholder is subject, (ii) constitute a
violation of any Law applicable or relating to such Shareholder or (iii) result
in the creation of any Lien.
(e) Except for this Agreement, there are no voting trusts or
other agreements or understandings, including, without limitation, any proxies,
in effect governing the voting of the Shares.
(f) Such Shareholder does not hold, and has not issued, any
proxies, or securities convertible into or exchangeable for or any options,
warrants, or other rights to purchase or subscribe for any shares of Common
Stock.
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(g) The Shares and the certificates representing such Shares are
now and until the earlier to occur of June 30, 1999 and consummation of the
Recapitalization will be held by such Shareholder, or by a nominee or custodian
for the benefit of such Shareholder, free and clear of all Liens, proxies,
voting trusts or agreements, understandings or arrangements or any other
encumbrances whatsoever other than as created by this Agreement.
(h) Such Shareholder understands and acknowledges that the
Company and Capital Z are entering into the Purchase Agreement in reliance upon
such Shareholder's execution and delivery of this Agreement.
(i) There are no undertakings, agreements, arrangements or
understandings of the type required to be disclosed by the Company pursuant to
Item 404 of Regulation S-K under the Securities Act in filings by the Company
with the Securities and Exchange Commission in effect between such Shareholder,
or any of his or her affiliates, on the one hand, and the Company or any of its
subsidiaries, on the other hand, which have not been fully and completely
disclosed, in writing, to Capital Z.
SECTION 2. Voting Agreement. Each Shareholder agrees with, and
covenants to, Capital Z as follows:
(a) At the Shareholders' Meeting or at any adjournment thereof or
in any other circumstances upon which a vote, consent or other approval will be
held or solicited with respect to the increase of the authorized capital stock
of the Company as contemplated by the Purchase Agreement (the "Charter
Amendment"), such Shareholder shall vote (or cause to be voted) or shall
consent, execute a consent or cause to be executed a consent in respect of the
Shares in favor of the Charter Amendment and the Stock Split.
(b) At any meeting of shareholders of the Company or at any
adjournment thereof or in any other circumstances upon which their vote, consent
or other approval is sought while the Purchase Agreement remains in effect, such
Shareholder shall vote (or cause to be voted) the Shares against (i) any
Alternative Transaction or any action which is a component of any Alternative
Transaction or would be a component of an Alternative Transaction if it were
contained in a proposal, or (ii) any other matter submitted to the shareholders
of the Company, including, without
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limitation, any amendment of the Company's Certificate of Incorporation or
By-Laws, which matter would in any manner partially or wholly prevent or
materially impede, interfere with or delay any of the transactions contemplated
by the Purchase Agreement, as determined in good faith by Purchaser and with
respect to which Purchaser provides written notice to the Shareholder.
(c) In the event that the Recapitalization (as defined in the
Purchase Agreement) is not consummated prior to June 30, 1999, each Shareholder
agrees to vote all Shares for which he has or shares the power to vote, or grant
a consent for approval in respect of such Shares in any manner permitted by the
DGCL, as such Shareholder is directed by the board of directors of the Company,
on any matters submitted to the shareholders of the Company, other than the
election of directors. The foregoing agreement shall terminate automatically
upon the termination of this Agreement with respect to any Shares owned by such
person upon transfer of such Shares pursuant to Section 7. The Company shall be
a third party beneficiary of this Agreement for the purposes of this Section
2(c).
(d) Each Shareholder represents and warrants to the Company and
Capital Z that any proxies heretofore given in respect of the Shares are not
irrevocable, and that any such proxies are hereby revoked, to the extent in
conflict with Section 2(c) hereof.
(e) Each Shareholder hereby affirms that the irrevocable proxy
set forth in this Section 2 is given in connection with the execution of the
Purchase Agreement, and that such irrevocable proxy is given to secure the
performance of the duties of such Shareholder under this Agreement. Each
Shareholder hereby further affirms that the irrevocable proxy is coupled with an
interest and may under no circumstances be revoked. Each Shareholder hereby
ratifies and confirms all that such irrevocable proxy may lawfully do or cause
to be done by virtue hereof. Such irrevocable proxy is executed and intended to
be irrevocable in accordance with the provisions of Section 212(e) of the DGCL.
SECTION 3. Covenants of the Shareholder. Each Shareholder agrees
with, and covenants to, Capital Z that such Shareholder shall not on or prior to
the earlier to occur of June 30, 1999 or the consummation of the
Recapitalization, (i)
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transfer (which term shall include, without limitation, for the purposes of this
Agreement, any sale, gift, pledge, encumbrance (other than an unforeclosed
pledge or encumbrance for financing purposes where the Shareholder retains sole
voting power with respect to all pledged securities), or other disposition), or
consent to any transfer of, any or all the Shares or any interest therein,
unless the transferee(s) of such Shares agrees in writing to be bound by the
provisions of this Agreement applicable to such Shareholder, (ii) grant any
proxy, power-of-attorney or other authorization in or with respect to such
Shares, except under or in accordance or not in conflict with this Agreement, or
(iii) deposit such Shares into a voting trust, enter into a voting agreement or
arrangement with respect to such Shares or otherwise limit such Shareholder's
power to vote his or her Shares in a manner that conflicts with this Agreement.
SECTION 4. Certain Events. In the event of any stock split, stock
dividend, merger, reorganization, recapitalization or other change in the
capital structure of the Company affecting the Common Stock, or the acquisition
of additional shares of Common Stock or other voting securities of the Company
by such Shareholder, the number of Shares set forth in Section 1(a) hereof shall
be adjusted appropriately and this Agreement and the obligations hereunder shall
attach to any additional shares of Common Stock or other voting securities of
the Company issued to or acquired by such Shareholder.
SECTION 5. Shareholder Capacity. No person executing this
Agreement who is or becomes a director of the Company makes any agreement or
understanding herein in his or her capacity as such director. Each Shareholder
signs solely in such Shareholder's capacity as the record and beneficial owner
of the Shares.
SECTION 6. Further Assurances. Each Shareholder shall, upon
request of Capital Z, execute and deliver any additional documents and take such
further actions as may reasonably be deemed by Capital Z to be necessary or
desirable to carry out the provisions hereof.
SECTION 7. Termination. This Agreement, and all rights and
obligations of the parties hereunder, shall terminate upon the date upon which
the Recapitalization has been consummated and the Shareholder Approval has been
obtained or the Purchase Agreement is earlier terminated in accordance with its
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terms, except that no Shareholder shall be relieved of any liability for breach
of this Agreement by such Shareholder prior to such termination. Further, this
Agreement shall terminate with respect to any Shares which are transferred as
permitted by Section 3 hereof.
SECTION 8. Defined Terms. Capitalized terms used and not
otherwise defined in this Agreement shall have the respective meanings assigned
to them in the Purchase Agreement.
SECTION 9. Notices. All notices, requests, claims, demands and
other communications under this Agreement shall be sufficiently given if sent by
registered or certified mail, postage prepaid, or overnight air courier service,
or telecopy or facsimile transmission (with hard copy to follow) to the parties
at the following addresses (or at such other address for a party as shall be
specified by like notice): (i) if to Capital Z, to the address set forth in
Section 7.3 of the Purchase Agreement; and (ii) if to any Shareholder, to the
address set forth opposite such Shareholder's name on Exhibit A hereto.
SECTION 10. Headings. The headings contained in this Agreement
are for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
SECTION 11. Counterparts; Effectiveness. This Agreement may be
executed in two or more counterparts, all of which shall be considered one and
the same agreement and shall become effective as to any Shareholder when one or
more counterparts have been signed by Capital Z and such Shareholder and
delivered to Capital Z and such Shareholder.
SECTION 12. Entire Agreement. This Agreement (including the
documents and instruments referred to herein) constitutes the entire agreement,
and supersedes all prior agreements and understandings, both written and oral,
among the parties with respect to the subject matter hereof.
SECTION 13. Governing Law. This Agreement shall be governed by,
and construed in accordance with, the laws of the State of Delaware, without
regard to any applicable conflicts of law principles of such State.
SECTION 14. Successors and Assigns. Neither this Agreement nor
any of the rights, interests or obligations under this Agreement shall be
assigned, in whole or in part, by
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operation of law or otherwise, by any of the parties without the prior written
consent of the other parties, except as expressly contemplated by Section 3(a),
and except that Capital Z may assign its rights under this Agreement to any
transferee of any of the Company's securities acquired by it under the Purchase
Agreement (and any such transferee may similarly assign its rights in connection
with any further transfer of such securities, in whole or in part). Any
assignment in violation of the foregoing shall be void.
SECTION 15. Enforcement. Each party agrees that irreparable
damage would occur and that the other party hereto would not have any adequate
remedy at law in the event that any of the provisions of this Agreement were not
performed in accordance with their specific terms or were otherwise breached. It
is accordingly agreed that each party shall be entitled to an injunction or
injunctions to prevent breaches by the other party hereto of this Agreement and
to enforce specifically the terms and provisions of this Agreement in any court
of the United States located in the State of Delaware or in Delaware State
court, this being in addition to any other remedy to which they are entitled at
law or in equity. In addition, each of the parties hereto (i) consents to submit
such party to the personal jurisdiction of any Federal court located in the
State of Delaware or any Delaware State court in the event any dispute arises
out of this Agreement or any of the transactions contemplated hereby, (ii)
agrees that such party will not attempt to deny or defeat such personal
jurisdiction by motion or other request for leave from any such court and (iii)
agrees that such party will not bring any action relating to this Agreement or
any of the transactions contemplated hereby in any court other than a Federal
court sitting in the State of Delaware or a Delaware State court.
SECTION 16. Severability. If any term or provision hereof, or the
application thereof to any circumstance, shall, to any extent, be held by a
court of competent jurisdiction to be invalid or unenforceable with respect to
such jurisdiction, and only to such extent, and the remainder of the terms and
provisions hereof, and the application thereof to any other circumstance, shall
remain in full force and effect, shall not in any way be affected, impaired or
invalidated, and shall be enforced to the fullest extent permitted by law, and
the parties hereto shall reasonably negotiate in good faith a substitute term or
provision that comes as close as possible to the invalidated
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or unenforceable term or provision, and that puts each party in a position as
nearly comparable as possible to the position each such party would have been in
but for the finding of invalidity or unenforceability, while remaining valid and
enforceable.
SECTION 17. Amendment; Modification; Waiver. No amendment,
modification or waiver in respect of this Agreement shall be effective against
any party unless it shall be in writing and signed by such party.
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IN WITNESS WHEREOF, Capital Z and the Shareholders have caused
this Agreement to be duly executed and delivered as of the date first written
above.
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/ Xxxx X. Xxxxx
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Name: Xxxx X. Xxxxx
Title: Partner
SHAREHOLDERS:
/s/ Xxxx X. Xxxxxxxx
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Xxxx Xxxxxxxx
/s/ Xxxx X. Xxxxxxxxx
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Xxxx Xxxxxxxxx
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