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EXHIBIT 10.25(d)
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
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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 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 Xxxxxxxxx Xxxxxx &
Xxxxxxxx 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:
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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.
"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:
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"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, 000 Xxxxx Xxxxx Xxxxxx,
00xx Xxxxx, Xxx Xxxxxxx, Xxxxxxxxxx 00000 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").
(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
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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.
(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
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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 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
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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; 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.
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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
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Designated Purchaser's) 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.
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(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 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
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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 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."
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(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.
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.
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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/ Xxxxxxx X. Xxxxxx
-----------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: EVP & General Counsel
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/ Xxxx X. Xxxxx
--------------------------------------
Name: Xxxx X. Xxxxx
Title: Partner
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