EXHIBIT 99.13
PURCHASE AGREEMENT
This PURCHASE AGREEMENT is made and entered into as of April 26, 2002
(the "Agreement") by and among Blue River, LLC, JMG Convertible Investments,
L.P., JMG Trition Offshore Fund Ltd., Camden Asset Management L.P.
(collectively, the "Holders"), Specialty Finance Partners ("SFP") and Capital Z
Financial Services Fund II, L.P., solely in its capacity as guarantor under
Section 4 hereof (the "Guarantor").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, Aames Financial Corporation, a Delaware corporation ("Aames"),
has issued and outstanding $113,900,000 aggregate principal amount of its 5.5%
Convertible Subordinated Debentures due 2006 (the "Existing Debentures")
pursuant to that certain indenture dated as of February 26, 1996 (the
"Indenture") between Aames and The Chase Manhattan Bank, N.A. as trustee;
WHEREAS, each Holder is the beneficial owner of the aggregate principal
amount of outstanding Existing Debentures set forth opposite its name on Exhibit
A hereto;
WHEREAS, SFP is the principal stockholder of Aames;
WHEREAS, SFP has informed each Holder, and each Holder understands and
acknowledges, that Aames has indicated to SFP that it intends to offer to
exchange (the "Exchange Offer") all outstanding Existing Debentures pursuant to
the exemption from registration provided by Section 3(a)(9) of the Securities
Act of 1933, as amended (the "Securities Act"), for 4% Convertible Subordinated
Debentures due 2012 (the "New Debentures") substantially on the terms and
conditions set forth in Exhibit B;
WHEREAS, notwithstanding Aames' intention to commence the Exchange
Offer, each Holder desires to sell to SFP, and SFP desires to purchase from each
Holder, all of the Existing Debentures set forth opposite such Holder's name on
Exhibit A for the purchase price and upon the terms and conditions hereinafter
set forth; and
WHEREAS, the Guarantor, a general partner of SFP, has agreed to
guarantee the due and punctual performance by SFP of its duties and obligations
hereunder.
NOW, THEREFORE, in consideration of the premises and mutual covenants
and agreements set forth herein, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties hereto
hereby agree as follows:
NY2:\1148007\07\_LT307!.DOC\10118.0003
Section 1. Sale and Purchase of Existing Debentures. Upon the terms and
subject to the conditions contained herein, on the Closing Date (as hereinafter
defined), each Holder hereby agrees to sell to SFP, and SFP hereby agrees to
purchase from each Holder, all of the Existing Debentures set forth opposite
such Holder's name on Exhibit A hereto at a purchase price of $260 for each
$1,000 principal amount of such Existing Debentures (the "Purchase Price").
Section 2. Closing. The closing of the transactions contemplated by
Section 1 hereof (collectively, the "Closing") shall take place as soon as
practicable from time to time after the date hereof, but no earlier than 10:00
a.m., New York City time, on May 1, 2002 and no later than such time on May 14,
2002 (the "Closing Date") at the offices of Weil, Gotshal & Xxxxxx LLP, 000
Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, unless another date, time or place is
agreed to in writing by the Holders and SFP. At the Closing, the Purchase Price
shall be paid by SFP to the applicable Holder in cash, in immediately available
funds by wire transfer to an account to be designated by such Holder, against
delivery of the Existing Debentures. Delivery of the Existing Debentures may be
made by delivery of certificates therefor and/or through the facilities of The
Depository Trust Company.
Section 3. Representations and Warranties.
(a) Each of the parties, severally and not jointly, represents and
warrants to each of the other parties that the following statements are true,
correct and complete as of the date hereof:
(1) Power and Authority. It has all requisite power and authority to
enter into this Agreement and to carry out the transactions contemplated by, and
perform its respective obligations under, this Agreement.
(2) Authorization. The execution and delivery of this Agreement and the
performance of its obligations hereunder have been duly authorized by all
necessary action on its part.
(3) No Conflicts. The execution, delivery and performance by it of this
Agreement do not and shall not (i) violate any provision of law, rule or
regulation applicable to it or any of its subsidiaries or its certificate of
incorporation or by-laws (or other organizational documents) or (ii) conflict
with, result in a breach of or constitute (with due notice or lapse of time or
both) a default under any material contractual obligation to which it or any of
its subsidiaries is a party or under its certificate of incorporation or by-laws
(or other organizational documents).
(4) Governmental Consents. The execution, delivery and performance by
it of this Agreement do not and shall not require any registration or filing
with, consent or approval of, or notice to, or other action to, with or by, any
Federal, state or other governmental authority or regulatory body.
2
(5) Binding Obligation. This Agreement is the legally valid and binding
obligation of it, enforceable against it in accordance with its terms, except as
enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium
or other similar laws relating to or limiting creditors' rights generally or by
equitable principles relating to enforceability.
(6) Brokers' Fees. It has not incurred, directly or indirectly, as a
result of any action taken by it, any liability for any brokerage or finders'
fees or agents' commissions or any solicitation or similar charges in connection
with this Agreement.
(b) Each Holder, severally and not jointly, represents and warrants to
SFP that the following statements are true, correct and complete as of the date
hereof:
(1) Ownership of Existing Debentures. Such Holder (together with its
affiliates) (i) (x) is the beneficial owner of the Existing Debentures set forth
opposite its name on Exhibit A hereto as of the date hereof, (y) has or will
have at the Closing all the incidents of ownership, including the right to
transfer, with respect to such Existing Debentures, other than with respect to
certain of such Existing Debentures, the right to vote, and/or (z) is the
investment advisor or manager for the persons having the ownership
characteristics set forth in either (x) or (y) above with respect to such
Existing Debentures, having the power to dispose of such holdings on behalf of
such persons, and is entitled (for its own account or for the account of other
persons claiming through it) to the same rights and economic benefits of such
holdings as such persons, (ii) does not own or control, directly or indirectly,
as of the date hereof, any Existing Debentures other than the Existing
Debentures set forth opposite such Holder's name on Exhibit A hereto as of the
date hereof and (iii) will convey good and marketable title to the Existing
Debentures to be delivered at the Closing, free and clear of any and all liens
or encumbrances.
(2) "Big Boy" Representation. Such Holder acknowledges it is a
sophisticated financial institution engaged in the business of assessing and
assuming investment risks with respect to securities, including securities such
as the Existing Debentures, and further acknowledges that SFP and the Guarantor
are entering into this Agreement with such Holder in reliance on this
acknowledgment and with such Holder's understanding, acknowledgment and
agreement that SFP and the Guarantor are privy to material non-public
information with respect to Aames' business, operations, pending transactions,
financial condition, results of operations and prospects (collectively, the
"Non-Public Information"), which Non-Public Information may be material to a
reasonable investor, such as such Holder, when making investment decisions,
including this decision to enter into this Agreement, and such Holder's decision
to enter into this Agreement is being made with full recognition and
acknowledgment that SFP and the Guarantor are privy to the Non-Public
Information, irrespective of whether such Non-Public Information has been
provided to such Holder. Such Holder hereby waives any claim, or potential
claim, it has or may have against SFP and the Guarantor, including, but not
3
limited to, its respective officers, directors, shareholders, partners,
successors and assigns, relating to such person's possession of Non-Public
Information.
Section 4. Guarantee. The Guarantor hereby unconditionally guarantees
the due and punctual performance of the obligations of SFP under this Agreement;
provided, however, that the Guarantor shall have the benefit of and be entitled
to assert all defenses, claims, counterclaims, set offs and offsets that SFP may
have against the Holders under this Agreement.
Section 5. Amendments. This Agreement may not be modified, amended or
supplemented except in writing signed by all of the parties to this Agreement.
Section 6. Governing Law; Jurisdiction. This Agreement shall be
governed by, and construed in accordance with, the laws of the State of New
York, regardless of the laws that might otherwise govern under applicable
principles of conflict of laws of the State of New York. The parties hereto
hereby irrevocably submit to the non-exclusive jurisdiction of any federal or
state court located within the City of New York over any dispute arising out of
or relating to this Agreement or any of the transactions contemplated hereby and
each party hereby irrevocably agrees that all claims in respect of such dispute
or any suit, action proceeding related thereto may be heard and determined in
such courts. The parties hereby irrevocably waive, to the fullest extent
permitted by applicable law, any objection which they may now or hereafter have
to the laying of venue of any such dispute brought in such court or any defense
of inconvenient forum for the maintenance of such dispute. Each of the parties
hereto agrees that a judgment in any such dispute may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
Section 7. Notices. All demands, notices, requests, consents and
communications hereunder shall be in writing and shall be deemed to have been
duly given if personally delivered by courier service, messenger, telecopy, or
if duly deposited in the mails, by certified or registered mail, postage
prepaid-return receipt requested, to the following addresses, or such other
addresses as may be furnished hereafter by notice in writing, to the following
parties:
If to SFP or the Guarantor, to:
x/x Xxxxxxx X Xxxxxxxxx Xxxxxxxx Xxxx XX, X.X.
00 Xxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Facsimile No.: (000) 000-0000
Attn: Xxxxx Xxxxxx, General Counsel
4
in each case, with a copy to:
Weil, Gotshal & Xxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Facsimile No.: (000) 000-0000
Attn: Simeon Gold, Esq.
If to the Holders, or any one Holder, to the address of each such
Holder set forth on Exhibit A hereto.
Section 8. Entire Agreement. This Agreement constitutes the full and
entire understanding and agreement among the parties hereto with regard to the
subject matter hereof, and supercedes all prior agreements.
Section 9. Headings. The headings of the paragraphs and subparagraphs
of this Agreement are inserted for convenience only and shall not affect the
interpretation hereof.
Section 10. Assignment; Binding Effect. Except as otherwise provided
herein, neither this Agreement nor any of the rights, interests or obligations
under this Agreement shall be assigned, in whole or in part, by operation of law
or otherwise by any of the parties without the prior written consent of all
other parties, and any such assignment that is not consented to shall be null
and void. Subject to the preceding sentence, this Agreement will be binding
upon, insure to the benefit of and be enforceable by, the parties and their
respective successors and assigns. Notwithstanding the foregoing, SFP may assign
any of its rights and obligations under this Agreement without the consent of
the Holders, to any of its affiliates (each a "Permitted Assignee"), provided,
that (a) any such Permitted Assignee specifically agrees to be bound by the
terms and conditions of this Agreement applicable to SFP and (b) notwithstanding
any such assignment, SFP and the Guarantor shall remain liable for and shall not
be released from any of its obligations under this Agreement.
Section 11. Specific Performance. Each party hereto recognizes and
acknowledges that a breach by it of any covenants or agreements contained in
this Agreement will cause the other parties to sustain damages for which such
parties would not have an adequate remedy at law for money damages, and
therefore each party hereto agrees that in the event of any such breach the
other parties shall be entitled to the remedy of specific performance of such
covenants and agreements and injunctive and other equitable relief in addition
to any other remedy to which such parties may be entitled, at law or in equity.
Section 12. Public Disclosure. SFP hereby agrees that it shall publicly
disclose the terms of this Agreement not later than April 29, 2002. The Holders
hereby acknowledge and agree that SFP's obligation's under this Section 12 shall
be satisfied by the filing with the Securities and Exchange Commission via the
XXXXX system on April 29, 2002 an amendment to the Schedule 13D of SFP and its
5
affiliates relating to the Company, which Schedule 13D amendment shall include
as an exhibit a copy of this Agreement (including the exhibits hereto).
Section 13. No Waiver. The failure of any party hereto to exercise any
right, power or remedy provided under this Agreement or otherwise available in
respect hereof at law or in equity, or to insist upon compliance by any other
party hereto with its obligations hereunder, and any custom or practice of the
parties at variance with the terms hereof, shall not constitute a waiver by such
party of its right to exercise any such or other right, power or remedy or to
demand such compliance.
Section 14. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original and all of which shall
constitute one and the same Agreement. Delivery of an executed signature page of
this Agreement by telecopier shall be effective as delivery of a manually
executed signature page of this Agreement.
Section 15. Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof or affecting the validity or
enforceability of such provision in any other jurisdiction.
Section 16. No Third-Party Beneficiaries. Unless expressly stated
herein, this Agreement shall be solely for the benefit of the parties hereto,
and no other person or entity shall be a third party beneficiary hereof.
6
IN WITNESS WHEREOF, the parties hereto have duly executed and delivered
this Agreement as of the date first above written.
SPECIALTY FINANCE PARTNERS
By: Capital Z Financial Services Fund II,
L.P., its General Partner
By: Capital Z Partners, L.P., its sole
General Partner
By: Capital Z Partners, Ltd., its sole
General Partner
By: /s/ Xxxxx X. Xxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxx
Title: General Counsel and Vice President
CAPITAL Z FINANCIAL SERVICES FUND II, L.P.,
solely in its capacity as Guarantor under
Section 4
By: Capital Z Partners, L.P., its sole
General Partner
By: Capital Z Partners, Ltd., its sole
General Partner
By: /s/ Xxxxx X. Xxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxx
Title: General Counsel and Vice President
BLUE RIVER, LLC
By: /s/ Xxx Xxxxxxxxxx
-------------------------------------
Name: Xxx Xxxxxxxxxx
Title: Managing Member
7
JMG CONVERTIBLE INVESTMENTS, L.P.
By: /s/ Xxxxxxxx Xxxxxx
-------------------------------------
Name: Xxxxxxxx Xxxxxx
Title: General Partner
JMG TRITION OFFSHORE FUND LTD.
By: /s/ Xxxxxxxx Xxxxxx
-------------------------------------
Name: Xxxxxxxx Xxxxxx
Title: General Partner
CAMDEN ASSET MANAGEMENT L.P.
By: /s/ Xxxx X. Xxxxxx
-------------------------------------
Name: Xxxx X. Xxxxxx
Title: Managing Partner
8
EXHIBIT A
=============================================== ================================= ======================================
DEBENTUREHOLDER NOTICE INFORMATION PRINCIPAL AMOUNT OF EXISTING
DEBENTURES
=============================================== ================================= ======================================
Blue River, LLC 000 Xxxx 00xx Xx. Xxx 0X $25,341,000
Xxx Xxxx, XX 00000
Fax: 000-000-0000
----------------------------------------------- --------------------------------- --------------------------------------
JMG Convertible Investments, L.P. 1999 Avenue of the Stars $4,551,000
Xxxxx 0000
Xxx Xxxxxxx, XX 00000
Fax: 000-000-0000
----------------------------------------------- --------------------------------- --------------------------------------
JMG Trition Offshore Fund Ltd. 1999 Avenue of the Stars $4,198,000
Xxxxx 0000
Xxx Xxxxxxx, XX 00000
Fax: 000-000-0000
----------------------------------------------- --------------------------------- --------------------------------------
Camden Asset Management L.P. 10100 Santa Xxxxxx Blvd. Suite $15,910,000
7700
Xxx Xxxxxxx, XX 00000
Fax: 000-000-0000
=============================================== ================================= ======================================
TOTAL $50,000,000
=============================================== ================================= ======================================
9
EXHIBIT B
AAMES FINANCIAL CORPORATION
SUMMARY TERM SHEET
This Summary Term Sheet summarizes the material terms of
the Exchange Offer, which will be fully set forth in
the Offering Memorandum in connection with the Exchange Offer, and the Company's
4% Convertible Subordinated Debentures due 2012 to be set forth in the indenture
governing such debentures to be entered into by the Company upon consummation of
the Exchange Offer. The final terms of the Exchange Offer will be substantially
similar to those set forth below; provided, that the conditions to the Exchange
Offer may be modified to change the minimum tender condition and/or to include a
maximum tender condition. The terms of the indenture governing the New
Debentures will be substantially similar to the indenture governing the Existing
Debentures, with such changes as are necessary to reflect the new terms of the
New Debentures.
THE EXCHANGE OFFER
Issuer: Aames Financial Corporation
Existing Debentures: $113.9 million aggregate principal amount of the
Company's 5.5% Convertible Subordinated Debentures
due 0000
Xxx Xxxxxxxxxx: Up to $91.12 million of the Company's 4.0%
Convertible Subordinated Debentures due 2012
Exchange Rate: For every $1,000 in principal amount of Existing
Debentures tendered in the Exchange Offer, the
holders will receive $800 principal amount of New
Debentures. Assuming all outstanding Existing
Debentures are exchanged, $91.12 million New
Debentures will be outstanding.
Conditions to the
Exchange Offer: The Exchange Offer will be conditioned upon, among
other things, there being validly tendered for
exchange and not withdrawn at least 80% in aggregate
principal amount of the outstanding Existing
Debentures.
In addition, the Exchange Offer will conditioned upon
the absence of any of the following events:
10
o a business development, lawsuit or
investigation which would likely have a
material adverse affect on the Company's
business;
o any significant change in the price of the
Existing Debentures which is adverse to the
Company;
o any general suspension of, or limitation on
prices for, trading in securities in United
States securities or financial markets;
o any significant impairment to the extension
of credit by banking institutions, or to the
regular trading of equity or debt securities
in the United States; or
o the commencement or significant worsening of
a war or armed hostilities or other national
or international calamity, including, but
not limited to, additional catastrophic
terrorist attacks against the United States
or its citizens.
The Company may waive any or all conditions to the
Exchange Offer.
Expiration Date of
the Exchange Offer: The Exchange Offer will remain open for at least 20
business days, subject to extension at the sole
discretion of the Company. The expiration date is
expected to be on or about June 15, 2002.*
------------------
* To the extent the expiration date of the Exchange Offer and, therefore, the
issuance date of the New Debentures, is extended beyond June 15, 2002, the
interest payment dates, the sinking fund payment date and the final maturity
date will be adjusted appropriately.
00
XXX XXX XXXXXXXXXX
Xxx Xxxxxxxxxx: Up to $91.12 million aggregate principal amount of
the Company's 4% Convertible Subordinated Debentures
due 2012.
Interest Rate: 4.0% per annum
Interest Payment Dates: June 15 and December 15 of each year, commencing
December 15, 2002.*
Sinking Fund Payment: On December 15, 2002*, the Company will redeem
through a scheduled sinking fund payment 30% of the
New Debentures (on a pro rata basis) at a redemption
price equal to 100% of their principal amount, plus
accrued and unpaid interest to the date of
redemption.
Final Maturity Date: The remaining 70% of the New Debentures will mature
on June 15, 2012.*
Optional Redemption: The Company will be entitled at its option to redeem
the New Debentures upon the earlier to occur of:
o a change of control; and
o the repayment in full of the Company's
9.125% Senior Notes due November 1, 2003 (at
maturity or otherwise) or the earlier
amendment of such Senior Notes to permit the
optional redemption of the New Debentures.
Any New Debentures optionally redeemed by the Company
will be redeemed at a redemption price equal to:
o 33.5% of their principal amount, if the
redemption occurs prior to the scheduled
sinking fund payment on December 15, 2002*;
or
o 5% of their principal amount, if the
redemption occurs after the scheduled
sinking fund payment is made.
Optional Conversion
by Holders: Holders may convert the New Debentures at any time
prior to maturity, unless previously redeemed or
repurchased, into shares of the Company's common
stock on the same terms and conditions as the
Existing Debentures.
Subordination: The New Debentures will be unsecured subordinated
obligations of the Company. The New Debentures will
rank junior in right of payment to all of the
12
Company's Existing and future senior indebtedness.
The New Debentures will be effectively subordinated
to all indebtedness of the Company's subsidiaries.
The New Debentures will rank pari passu with the
Company's other unsecured subordinated indebtedness,
including the Existing Debentures. Same subordination
provisions as Existing Debentures.
13
