Exhibit B
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WARRANT AGREEMENT
Dated as of March 19, 1998
-By and Between-
AAMES FINANCIAL CORPORATION
and
[PURCHASER]
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The securities represented by the Warrants referred to herein have not been
registered under the Securities Act of 1933, as amended. The transferability of
such securities and of any securities which may be issued upon the exercise of
such securities is subject to the provisions of this Warrant Agreement.
TABLE OF CONTENTS
Page
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Section 1. Issuance of Warrants; Exercise Price.............................1
Section 2. Form of Warrant Certificates.....................................2
Section 3. Execution of Warrant Certificates................................2
Section 4. Registration; Transfers and Exchanges............................3
Section 5. Mutilated or Missing Warrant Certificates........................3
Section 6. Duration and Exercise of Warrants................................3
Section 7. Payment of Taxes; Transfer and Exchange Fees.....................7
Section 8. Adjustments; Notices.............................................8
Section 9. Fractional Warrants and Fractional Shares.......................16
Section 10. No Rights as Stockholders.......................................17
Section 11. Representations, Warranties and Covenants of
the Company.....................................................17
Section 12. Inspection of Warrant Agreement.................................20
Section 13. Issuance of New Warrant Certificates............................20
Section 14. Notices.........................................................20
Section 15. Supplements and Amendments......................................21
Section 16. Successors......................................................22
Section 17. Governing Law...................................................22
Section 18. Jurisdiction and Venue..........................................23
Section 19. Benefits of this Agreement......................................23
Section 20. Severability....................................................23
Section 21. Specific Performance............................................24
Section 22. Integration.....................................................24
Section 23. Further Assurances..............................................24
Section 24. Headings and Table of Contents..................................24
Section 25. Counterparts....................................................25
Section 26. Legends.........................................................25
Section 27. Opinion on Transfer of Warrant Shares
After Exercise................................................25
EXHIBIT A. FORM OF WARRANT CERTIFICATE
EXHIBIT B. FORM OF ASSIGNMENT
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WARRANT AGREEMENT (this "Agreement"), dated as of March 19, 1998, by
and among Aames Financial Corporation, a Delaware corporation (the "Company")
and , a (the "Purchaser").
WHEREAS, the Company and the Purchaser have entered into a Stock
Purchase Agreement, dated as of the date hereof (the "Stock Purchase
Agreement"); and
WHEREAS, pursuant to the Stock Purchase Agreement, as consideration for
the purchase of shares of Common Stock ("Common Stock"), par value
$.001 per share, of the Company (the "Purchase Shares"), the Company will issue
to the Purchaser at the Closing (as defined in the Stock Purchase Agreement)
warrants to purchase shares of Common Stock (each a
"Warrant" and collectively, "Warrants"), at an exercise price of $17.2031 per
share, subject to adjustment as provided herein; and
WHEREAS, the Company and the Purchaser have entered into a Registration
Rights Agreement, dated as of the date hereof, providing for certain matters
relating to the registration of the Purchase Shares and the Common Stock
issuable upon exercise of the Warrants under the Securities Act of 1933, as
amended (the "Securities Act");
WHEREAS, the Company and (the "Other Purchaser") have
entered into a stock purchase agreement, dated the date hereof (the "Other Stock
Purchase Agreement"), providing for, among other things, the sale by the Company
and the purchase by the Other Purchaser of an aggregate of shares of
Common Stock and warrants to purchase shares of Common Stock at an
initial exercise price of $17.2031 per share, a warrant agreement, dated the
date hereof, relating to such warrants (the "Other Warrant Agreement");
NOW THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereto agree as follows:
Section 1. Issuance of Warrants; Exercise Price. Pursuant to the Stock
Purchase Agreement, the Company shall issue and deliver to the Purchaser one or
more warrant certificates (each a "Warrant Certificate") representing an
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aggregate of Warrants. Each Warrant shall initially provide the
Purchaser, or such other registered holder of such Warrant to whom transfer is
authorized in accordance with the terms of this Agreement (the Purchaser and
such other registered holder(s) are hereinafter referred to individually as the
"Registered Holder" and collectively as the "Registered Holders"), with the
right to purchase initially one fully paid and nonassessable share of Common
Stock (a "Share" and, collectively, the "Shares") in consideration of the
payment by the Registered Holder of the exercise price (the "Exercise Price") at
the time in effect hereunder. The Exercise Price shall initially be $17.2031 per
Warrant. The Exercise Price and the number of Shares issuable upon exercise of a
Warrant (the "Warrant Exercise Rate") shall be subject to adjustment as provided
in Section 8.
Section 2. Form of Warrant Certificates. The Warrant Certificates
representing the Warrants and the Forms of Exercise and Assignment attached
thereto shall be substantially in the forms set forth in Exhibits A and B
attached hereto. The Warrant Certificates shall be typewritten, printed,
lithographed or engraved and may have such letters, numbers or other marks of
identification and such legends or endorsements as may be required to comply
with any applicable law, rule or regulation or with the rules of any securities
exchange or as may, consistent with the provisions of this Agreement, be
determined by the officers executing any such Warrant Certificate, as evidenced
by their execution of the Warrant Certificate. Each Warrant Certificate shall
contain a legend substantially as set forth in the Form of Warrant Certificate
attached hereto as Exhibit A.
Section 3. Execution of Warrant Certificates. The President or any Vice
President of the Company shall execute the Warrant Certificates on behalf of the
Company, and the official seal of the Company (which may be in facsimile form)
shall be reproduced on the Warrant Certificates and attested by the Secretary or
any Assistant Secretary of the Company. The signatures of the President or any
Vice President and of the Secretary or any Assistant Secretary on any Warrant
Certificate may be manual or facsimile. Warrant Certificates may bear the manual
or facsimile signatures of individuals who were at the time of execution of such
Warrant Certificates the proper officers
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of the Company notwithstanding that such individuals, or any of them, ceased to
be such officers prior to the delivery of such Warrant Certificate or were not
such officers at the date of this Agreement.
Section 4. Registration; Transfers and Exchanges. The Company shall
maintain at its executive offices a register reflecting the ownership of the
Warrant Certificates and any transfers thereof from time to time (the "Warrant
Register").
The Company may deem and treat the Registered Holder of each Warrant
Certificate as indicated in the Warrant Register as the absolute owner thereof
(notwith standing any notation of ownership or other writing thereon made by
anyone) for the purpose of any exercise thereof, any distribution to the
Registered Holder thereof and for all other purposes, and the Company shall not
be affected in any way by any notice to the contrary.
Upon execution and delivery of a written notice in the form of Exhibit
B to the Company by the Registered Holder and its transferee of a transfer of
any Warrant Certificate, the Company shall reflect such transfer in the Warrant
Register.
Section 5. Mutilated or Missing Warrant Certificates. If any Warrant
Certificate at any time becomes mutilated, lost, stolen or destroyed, the
Company will issue in exchange and substitution for and upon cancellation of the
mutilated Warrant Certificate, or in lieu of and in substitution for the Warrant
Certificate lost, stolen or destroyed, a new Warrant Certificate of like tenor
and representing an equivalent right or interest, but only upon receipt of
evidence satisfactory to the Company of such loss, theft or destruction of such
Warrant Certificate and indemnity reasonably satisfactory to the Company.
Section 6. Duration and Exercise of Warrants.
(a) The Warrants shall expire on April 19, 2001 (the "Expiration
Date"), notwithstanding any change in the capitalization of the Company as
a result of any stock split, stock dividend, stock combination or
otherwise. Each Warrant may be exercised by the Registered Holder thereof
only upon the occurrence of a
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Purchase Event (as defined below) of the Company. Thereafter, Warrants may
be exercised on any business day beginning on the date of the Purchase
Event and prior to the close of business on the Expiration Date. Each
Warrant not exercised at or before the close of business on the Expiration
Date shall become void and of no value, and all rights of the Registered
Holder under the Warrant Certificate and under this Agreement shall cease.
(b) For purposes of this Section 6, the following terms shall have the
meanings ascribed to them:
"Purchase Event" shall mean any of the following events or transactions
occurring after the date hereof:
(i) The Company or any of its subsidiaries shall have entered into
an agreement to engage in an Acquisition Transaction (as defined below)
with any Person (the term "Person" for purposes of this Agreement
having the meaning assigned thereto in Sections 3(a)(9) and 13(d)(3) of
the Securities Exchange Act of 1934 (the "Exchange Act"), and the rules
and regulations thereunder) other than ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇.
▇▇▇▇ or any of their respective affiliates which is not a Person with
equity securities listed on a national securities exchange or quoted on
the Nasdaq National Market (each, a "Non-Public Purchaser Affiliate")
or the Board of Directors of the Company shall have recommended that
the shareholders of the Company approve or accept any Acquisition
Transaction with any Person other than a Non-Public Purchaser
Affiliate. For purposes of this Section 6, "Acquisition Transaction"
shall mean (x) a merger or consolidation, or any similar transaction,
involving the Company or any of its significant subsidiaries, (y) a
purchase, lease or other acquisition of all or substantially all of the
assets of the Company or any significant subsidiary or (z) a purchase
or other acquisition (including by way of merger, consolidation, share
exchange or otherwise) of securities representing 50% or more of the
voting power of the Company or any of its significant subsidiaries,
provided that the term "Acquisition Transaction" does not
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include any internal merger, consolidation, or similar transaction
involving solely the Company and one or more of its subsidiaries or a
merger, consolidation or similar transaction as to which the holders of
the Company's common stock immediately prior thereto own in the
aggregate at least 50% of the common stock of the publicly held
surviving or successor corporation or any publicly held ultimate parent
company thereof immediately after giving effect thereto.
(ii) Any Person (other than a Non-Public Purchaser Affiliate or
any subsidiary of the Company acting in a fiduciary capacity in the
ordinary course of business) shall have acquired Beneficial Ownership
of shares of Common Stock (the term "Beneficial Ownership" for purposes
of this Section 6, having the meaning assigned thereto in Section 13(d)
of the Exchange Act, and the rules and regulations thereunder) such
that, upon the consummation of such acquisition, such Person would have
Beneficial Ownership, in the aggregate, of 50% or more of the then
outstanding shares of Common Stock;
(iii) Any Person other than any Non-Public Purchaser Affiliate
shall have made a bona fide proposal to the Company or its
shareholders, by public announcement or written communication that is
or becomes the subject of public disclosure, to engage in an
Acquisition Transaction (including, without limitation, any situation
in which any Person other than a Non-Public Purchaser Affiliate shall
have commenced (as such term is defined in Rule 14d-2 under the
Exchange Act) or shall have filed a registration statement under the
Securi ties Act, with respect to, a tender offer or exchange offer to
purchase any shares of Common Stock such that, upon consummation of
such offer, such Person would own or control 50% or more of the then
outstanding shares of Common Stock; and
(iv) The first day on which a majority of the members of the Board
of Directors of the Company are not "Continuing Directors" (defined as
members of the Board of Directors of the Company
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who (A) were members of such Board on the date hereof or (B) were
nominated for election or elected to such Board pursuant to the Stock
Purchase Agreement, the Other Stock Purchase Agreement, or with the
approval of a majority of the Continuing Directors who where members of
such Board at the time of such nomination or election).
"Business day" means each Monday, Tuesday, Wednesday, Thursday and
Friday which is not a day on which banking institutions in Los Angeles,
California are authorized or obligated by law or executive order to close.
(c) The Company shall notify the Purchaser promptly in writing of the
occurrence of any Purchase Event (other than by a Non-Public Purchaser
Affiliate).
(d) Subject to the provisions of this Agreement, the Registered Holder
of a Warrant Certificate shall have the right to exercise the Warrant or
Warrants evidenced by such Warrant Certificate by delivering the Warrant
Certificate, along with the Form of Exercise attached thereto duly filled
in and executed by the Registered Holder or his duly authorized agent, and,
upon such exercise, to purchase from the Company at a purchase price equal
to the Exercise Price then in effect multiplied by the number of Warrants
so exercised (such product, the "Aggregate Exercise Price") the number of
Shares at the time purchasable upon exercise of such Warrant or Warrants,
including any shares of any class or series of stock into which such Shares
may hereafter be changed upon surrender to the Company of the Warrant
Certificate evidencing such Warrant or Warrants, upon payment of the
Aggregate Exercise Price in lawful money of the United States of America in
cash, by cashier's check payable to the order of the Company or by wire
transfer to the Company's account of immediately available funds. The
number of Shares, and the amount and type of securities or other property,
purchasable upon exercise of a Warrant shall be subject to adjustment as
provided in Section 8.
(e) Subject to Section 7, (i) upon such surrender of a Warrant
Certificate and payment of the Aggregate
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Exercise Price with respect to the Warrant or Warrants being exercised on
or prior to the Expiration Date, the Company shall deliver or cause to be
delivered to the Registered Holder surrendering such Warrant Certificate
certificates for the Shares, certificates or other appropriate instruments
for any other securities, and such other property issuable upon the
exercise of such Warrant or Warrants evidenced by such Warrant Certificate
being exercised, in such name or names as the Registered Holder of such
Warrant Certificate shall designate on the Form of Exercise attached
thereto and bearing such restrictive legends concerning transferability as
the Company deems necessary; and (ii) such Shares, securities and other
property shall be deemed to have been issued, and any person so designated
therein shall be deemed to have become the holder of record of such Shares,
securities or property as of the date of the surrender of such Warrant
Certificate and payment of the Aggregate Exercise Price.
(f) All or fewer than all of the Warrants evidenced by a Warrant
Certificate may be exercised on any occasion. In the event that fewer than
all of the Warrants represented by a Warrant Certificate are exercised,
upon such exercise the Company shall execute and deliver to the Registered
Holder thereof or, subject to Section 4 hereof, such person or entity as
shall be designated in the Form of Exercise attached to such Warrant
Certificate a new Warrant Certificate representing the Warrants not so
exercised.
Section 7. Payment of Taxes; Transfer and Exchange Fees. The Company
shall not be required to pay any transfer, documentary, stamp or other taxes
imposed under any federal, state or local laws on Warrant Certificates issued
pursuant to transfers or exchanges or under other circumstances covered in
Sections 4, 5 or 9 hereof.
The Company shall pay any tax or taxes or government charges of any
kind that may be payable in respect of any issuance of any stock certificates
for the Shares, any certificates or other instruments for any other securities,
or any other property purchased upon exercise of a Warrant.
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Section 8. Adjustments; Notices. The Exercise Price and the number of
Shares purchasable upon the exercise of each Warrant are subject to adjustment
from time to time as provided in this Section.
(a) In case the Company shall pay or make a dividend or other
distribution on any class of capital stock of the Company in Common Stock,
the Exercise Price in effect at the opening of business on the day
following the date fixed for the determination of stockholders entitled to
receive such dividend or other distribution shall be reduced by multiplying
such Exercise Price by a fraction of which the numerator shall be the
number of shares of Common Stock outstanding at the close of business on
the date fixed for such determination and the denominator shall be the sum
of such number of shares plus the total number of shares constituting such
dividend or other distribution, such reduction to become effective
immediately after the opening of business on the day following the date
fixed for such determination; and in the event that such dividend or other
distribution is not so made, or is made in part, the Exercise Price shall
again be adjusted to the Exercise Price which would then be in effect (i)
if such record date has not been fixed or (ii) based on the actual number
of shares actually issued, as the case may be.
(b) In case the Company shall issue shares of Common Stock at a price,
or securities convertible into, exchangeable for or exercisable for shares
of Common Stock ("Convertible Securities") having a Conversion Price (as
defined below), per share less than the current fair market value per share
(determined as provided in paragraph (f) of this Section 8) of the Common
Stock on the date such shares or Convertible Securities are issued, the
Exercise Price in effect at the opening of business on the day following
the date on which such shares or Convertible Securities are issued shall be
reduced by multiplying such Exercise Price by a fraction of which the
numerator shall be the number of shares of Common Stock outstanding at the
close of business on the date on which such shares or Convertible
Securities are issued plus the number of shares of Common Stock which the
aggregate of the offering price of the total number of
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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 such current fair market value and the
denominator shall be the number of shares of Common Stock outstanding at
the close of business on the date on which such shares or Convertible
Securities are issued plus the number of shares of Common Stock so issued
or the number of shares of Common Stock issuable upon conversion, exchange
or exercise of such Convertible Securities so issued, such reduction to
become effective immediately after the opening of business on the day
following the date on which such shares are issued.
For purposes of this Section 8(b), the total offering price of any
securities is the offering price to the public before deduction of
underwriting discounts and commissions, and "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 and commissions)
plus the minimum aggregate amount of additional consideration, if any,
payable to the Company upon the conversion, exchange or exercise thereof.
Notwithstanding the foregoing, no adjustment to the Exercise Price
shall be made (i) on the account of the issuance of any Purchase Shares or
shares of Common Stock pursuant to the Other Stock Purchase Agreement, (ii)
on the account of the grant or issuance of any option or securities either
prior to or after the date hereof pursuant to any employee benefit plans of
the Company, (iii) on the account of the grant of any Warrants or issuance
of any Shares or other securities pursuant to this Agreement, the Stock
Purchase Agreement, the Other Stock Purchase Agreement or the Other Warrant
Agreement; or (iv) on the account of the issuance of any securities upon
the conversion of the Company's outstanding 5.5% Convertible Subordinated
Debentures Due 2006.
In case part or all of the subscription or purchase price for the
Common Stock shall be in a form other than cash, the value of such
consideration shall
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be as determined in good faith by the vote of a majority of the Board of
Directors of the Company other than any director who is a Registered
Holder, the nominee of a Registered Holder or any affiliate, director,
officer, trustee, beneficiary or employee of a Registered Holder (the
"Non-Interested Directors").
(c) In case the Company shall (i) subdivide its outstanding shares of
Common Stock into a greater number of shares, (ii) combine its outstanding
shares of Common Stock into a smaller number of shares or (iii) issue by
reclassification of its shares of Common Stock (including any such
reclassification in connection with a consolidation or merger in which the
Company is the continuing corporation) any shares of capital stock (any
such subdivision, combination or reclassification a "Change of Shares"),
the Exercise Price in effect at the effective date of such Change of Shares
shall be proportionally adjusted so that the holder of any Warrants
exercised after such time shall be entitled to receive the aggregate number
and kind of shares which, if such Warrants had been converted immediately
prior to such time, paying the same aggregate consideration, he would have
owned upon such exercise and been entitled to receive upon such Change of
Shares. Such adjustment shall become effective immediately after the
effective date of such Change of Shares.
(d) In case the Company shall fix a record date for the making of a
distribution, by dividend or otherwise, to all holders of its Common Stock
evidences of its indebtedness or assets (including securities, but
excluding any rights or warrants referred to in paragraph (b) of this
Section, any dividend or distribution paid in cash out of the retained
earnings of the Company and any dividend or distribution referred to in
paragraph (a) of this Section), the Exercise Price in effect after the
record date shall be adjusted so that the same shall equal the price
determined by multiplying the Exercise Price in effect immediately prior to
the close of business on the record date by a fraction of which the
numerator shall be the current fair market value per share (determined as
provided in paragraph (f) of this Section) of the Common Stock on the date
fixed for such determination
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less the then fair market value (as determined by the vote of a majority of
the Non-Interested Directors of the Company, whose determination shall be
conclusive and described in a resolution of the Board of Directors of the
Company) of the portion of the assets or evidences of indebtedness so
distributed applicable to one share of Common Stock and the denominator
shall be such current fair market value per share of the Common Stock, such
adjustment to become effective immediately prior to the opening of business
on the day following the record date. In the event that such distribution
is not so made, the Exercise Price shall again be adjusted to the Exercise
Price which would then be in effect if such record date has not been fixed.
(e) Upon each adjustment of the Exercise Price pursuant to this
Section, each Warrant outstanding immediately prior to such adjustment
shall thereafter constitute the right to purchase, at the adjusted Exercise
Price per share, an adjusted number of Shares determined (to the nearest
one-hundredth of a Share) by multiplying the number of Shares purchasable
upon exercise of a Warrant immediately prior to such adjustment by a
fraction, the numerator of which shall be the Exercise Price in effect
immediately prior to such adjustment and the denominator of which shall be
the Exercise Price in effect immediately after such adjustment.
(f) For the purpose of any computation under paragraphs (b) and (d) of
this Section, the current fair market value per share of Common Stock on
any date shall be (a) the arithmetic average of the daily last sale prices
of the Common Stock for the 15 consecutive trading days commencing 25
trading days prior to such time, as officially reported on the principal
national securities exchange on which the Common Stock is then listed (or
the NASDAQ if the Common Stock is not listed on a national securities
exchange but is designated as a national market system security by the
NASD) or (b) if the Common Stock is not then listed or quoted on the
over-the-counter market, the fair market value of the Common Stock as
determined by the Company's Board of Directors.
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(g) The Company may make such reductions in the Exercise Price, in
addition to those otherwise required by this Section, as it considers to be
advisable in order that any event treated for Federal income tax purposes
as a dividend of stock or stock rights shall not be taxable to the
recipients.
(h) No adjustment under this Section in the Exercise Price (and,
therefore, no adjustment in the number of Shares purchasable upon the
exercise of Warrants) shall be required unless such adjustment would
require an increase or decrease of at least $0.25 in such price; provided,
however, that any adjustments which by reason of this paragraph are not
required to be made shall be carried forward and taken into account in
determining any subsequent adjustment. All calculations under this Section
shall be made to the nearest one-hundredth of a cent or to the nearest
one-hundredth of a Share, as the case may be.
(i) Whenever the Exercise Price and the number of Shares purchasable
upon the exercise of a Warrant are adjusted as herein provided, the Company
shall as soon as practicable, but in no event later than 30 calendar days
thereafter:
(i) compute the adjusted Exercise Price in accordance with this
Section and shall prepare a certificate signed by the principal
accounting officer of the Company or any other appropriate officer or
official of the Company setting forth the adjusted Exercise Price and
the adjusted number of Shares purchasable upon the exercise of Warrants
and showing in reasonable detail the facts upon which such adjustments
are based; and
(ii) cause to be given notice to each of the Registered Holders at
such Registered Holder's address appearing in the Warrant Register.
Such notice shall set forth the adjusted Exercise Price and the
adjusted number of such Shares. Where appropriate, any such notice may
be given in advance and included as part of any other notice required
to be mailed under the other provisions of this Section.
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The failure to give the notice required in this paragraph or any
defect therein shall not affect the legality or validity of the event
causing the adjustment of the Exercise Price and the number of Shares
purchasable upon the exercise of the Warrant or the vote thereon or any
other action taken in connection therewith.
(j) In case:
(i) the Company shall declare a dividend (or any other
distribution) on its Common Stock payable otherwise than in cash out of
its retained earnings; or
(ii) the Company shall authorize the granting to the holders of
its Common Stock of rights or warrants to subscribe for or purchase any
shares of capital stock of any class (or securities convertible into
shares of capital stock of any class) or of any other rights or shall
issue shares of Common Stock; or
(iii) any of the following transactions occur -- any
reclassification of the capital stock of the Company (other than a
subdivision or combination of its outstanding shares of Common Stock),
any consolidation or merger to which the Company is a party and for
which approval of any stockholders of the Company is required, or any
sale or transfer of all or substantially all of the assets of the
Company; or
(iv) the Company shall be (voluntarily or involuntarily)
dissolved, liquidated or wound up;
then the Company, if notice of such event is being mailed to the holders of
the Common Stock, shall cause to be mailed to the Registered Holders, at or
prior to the time notice of such event is mailed to the holders of the
Common Stock, a copy of the notice being mailed to the holders of the
Common Stock. The failure to give the notice required in this paragraph or
any defect therein shall not affect the legality or validity of any
dividend, distribution, right, warrant, consolidation, merger, sale,
transfer, dissolution,
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liquidation or winding up or the vote thereon or any other action taken in
connection therewith.
(k) In any case in which this Section 8 shall require that any
adjustment in the Exercise Price be made effective as of a record date for
a specified event, the Company may elect to defer until the occurrence of
the event issuing to the Registered Holder of any Warrants exercised after
that record date the Shares or other capital stock of the Company, if any,
issuable upon exercise over and above the Shares or other capital stock of
the Company, if any, issuable upon the exercise on the basis of the
Exercise Price in effect prior to such adjustment; provided, however, that
the Company shall deliver to the holder a due ▇▇▇▇ or other appropriate
instrument evidencing such holder's right to receive such additional shares
upon the occurrence of the event requiring such adjustment.
(l) In case the Company shall have issued Convertible Securities and
the Exercise Price was adjusted pursuant to Section 8(b), upon the
expiration of such Convertible Securities or upon the expiration of such
securities' conversion privilege, the number of Shares purchasable upon
exercise of a Warrant and the Exercise Price, to the extent such Warrant
has not then been exercised, shall, upon such expiration, be readjusted and
shall thereafter be such as they would have been had they been originally
adjusted (or had the original adjustment not been required, as the case may
be) on the basis of (A) the fact that the only shares of Common Stock so
issued were the shares of Common Stock, if any, actually issued or sold
upon the exercise of such Convertible Securities, and (B) the fact that
such shares of Common Stock, if any, were issued or sold for the
consideration actually received by the Company upon such exercise plus the
consideration, if any, actually received by the Company for the issuance,
sale or grant of all such Convertible Securities whether or not exercised;
provided, however, that no such readjustment shall have the effect of
increasing the Exercise Price by an amount in excess of the amount of the
adjustment initially made in respect to the issuance, sale or grant of such
Convertible Securities.
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(m) In case of any consolidation of the Company with or merger of the
Company into any other person, any merger of another person into the
Company (other than a merger that does not result in any reclassification,
conversion, exchange or cancellation of outstanding shares of Common Stock
of the Company) or any sale or transfer of all or substantially all of the
assets of the Company, each Warrant then outstanding shall thereafter, at
the then Exercise Price and upon the other terms and conditions specified
in this Agreement, be exercisable for the kind and amount of securities,
cash and other property receivable upon such consolidation, merger, sale or
transfer by a holder of the number of shares of Common Stock of the Company
issuable upon exercise of such Warrant immediately prior to such
consolidation, merger, sale or transfer, assuming such holder of Common
Stock of the Company is not a person with which the Company consolidated or
into which the Company merged or which merged into the Company or to which
such sale or transfer was made, as the case may be (a "Constituent
Person"), or a person directly or indirectly controlling, controlled by, or
under common control with a Constituent Person (an "Affiliate"), and failed
to exercise its rights of election, if any, as to the kind or amount of
securities, cash and other property receivable upon such consolidation,
merger, sale or transfer (provided that if the kind or amount of
securities, cash and other property receivable upon such consolidation,
merger, sale or transfer is not the same for each share of Common Stock of
the Company held immediately prior to such consolidation, merger, sale or
transfer by others than a Constituent Person or Affiliate thereof or in
respect of which such rights of election shall not have been exercised
("Non-Electing Share"), then for the purpose of this Section the kind and
amount of securities, cash and other property receivable upon each such
consolidation, merger, sale or transfer by each Non-Electing Share shall be
deemed to be the kind and amount so receivable per share by a plurality of
the Non-Electing Shares). Prior to or simultaneously with effecting any
such consolidation, merger, sale or transfer, the person formed by such
consolidation or the successor resulting from such merger or which acquires
such assets, as the case may be, shall execute and deliver to each
Registered Holder
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a supplemental warrant agreement containing provisions to the effect set
forth in the previous sentence and providing for adjustments which, for
events subsequent to the effective date of such supplemental warrant
agreement, shall be as nearly equivalent as may be practicable to the
adjustments provided for in this Section and containing an agreement to be
bound by the provisions of this Agreement.
(n) Upon the occurrence of any event requiring an adjustment of the
Exercise Price as described above, if the foregoing adjustments do not
result in the kind and number of shares of Common Stock to be issued upon
exercise of the Warrants having substantially equal value after such event
as the kind and number of shares of Common Stock issuable upon exercise of
the Warrants immediately prior to such event, the Company shall make such
other or additional adjustments to the Exercise Price and the Warrant
Exercise Rate as may be required to carry out the intention of the parties
that no such event shall result in any increase or decrease in the value of
such Warrants.
(o) The above adjustments shall be made, to the extent applicable,
successively whenever any event described above shall occur.
(p) Irrespective of any adjustments in the Exercise Price or the number
or kind of shares purchasable upon the exercise of the Warrants, Warrant
Certificates theretofore or thereafter issued may continue to express the
same Exercise Price per Share and number and kind of Shares as are stated
on the Warrant Certificates initially issuable pursuant to this Agreement.
Section 9. Fractional Warrants and Fractional Shares. The Company shall
not be required to exchange or transfer Warrants for fractions of Warrants. The
Company will not be required to issue any fractional Warrants representing
fractional shares of Common Stock or other distributed securities upon exercise
of the Warrants or distribute stock certificates or other instruments that
evidence fractional shares of Common Stock or other distributed securities and
the Company will not pay any cash adjustment in respect of any fractional shares
of Common
-16-
Stock or other distributed securities otherwise issuable upon the exercise of
any Warrant.
Section 10. No Rights as Stockholders. Nothing contained in this
Agreement or in any of the Warrant Certificates shall be construed as conferring
upon the Registered Holder thereof the right to vote, receive dividends or to be
deemed for any purpose the holder of Common Stock or of any other securities of
the Company that may at any time be issuable on the exercise of the Warrant
Certificates, nor shall anything contained herein or in the Warrant Certificates
be construed to confer upon the Registered Holders thereof, as such, any of the
rights of a stockholder of the Company or any right to vote on matters submitted
to stockholders at any meeting thereof, or to give or withhold consent to any
corporate action (whether upon any recapitalization, issue of stock,
reclassification of stock, change of par value, consolidation, merger,
conveyance, or, without limitation, otherwise) or to receive notice of meetings,
or to receive subscription rights or otherwise, until the Warrants evidenced by
the Warrant Certificates shall have been exercised as provided herein.
Section 11. Representations, Warranties and Covenants of the Company.
The Company represents, warrants and agrees with each Registered Holder that:
(a) The Company is a corporation duly incorporated, validly existing
and in good standing under the laws of the State of Delaware. The Company has
all requisite corporate power and authority to carry out and perform its
obligations under this Agreement.
(b) The authorized capital stock of the Company consists of 50,000,000
shares of Common Stock and 1,000,000 shares of preferred stock. At March 17,
1998, there was outstanding 27,823,317 shares of Common Stock and 0 shares of
preferred stock. At February 28, 1998, the Company had outstanding 5,037,121
options to purchase shares of Common Stock, which options were duly granted
pursuant to the 1991 Stock Incentive Plan, 1995 Stock Incentive Plan, 1996 Stock
Incentive Plan, 1997 Non-Qualified Stock Option Plan, 1997 Stock Option Plan and
outside of any such plans. Each such plan has been duly approved by the Board of
Directors and, except for the 1997 Non-Qualified Stock Option Plan, stockholders
of the Company. 5,315,505 shares of Common
-17-
Stock are reserved for issuance upon exercise of such options, 6,106,617 shares
of Common Stock are reserved for issuance upon conversion of the Company's 5.5%
Subordinated Convertible Debentures due 2006. 500,000 Shares of preferred stock
are reserved for issuance upon exercise of the Rights distributed to holders of
Common Stock pursuant to the Rights Agreement, 1,124,184 shares of Common Stock
are reserved for issuance under the Company's Dividend Reinvestment and Stock
Purchase Plan and 562,500 shares of Common Stock are reserved for issuance under
the Company's Stock Purchase Plan.
(c) This Agreement has been duly authorized, executed and delivered by
the Company and constitutes the valid and binding obligation of the Company
enforceable in accordance with its terms except as such enforceability may be
subject to any applicable bankruptcy, insolvency, reorganization, fraudulent
transfer, equitable subordination or other laws relating to or affecting
creditor's rights and general principles of equity including, without
limitation, concepts of materiality, reasonableness, good faith and fair
dealing; and neither the issuance of the Warrants nor the issuance of the shares
of Common Stock issuable upon exercise of the Warrants will result in a breach
or violation of any terms or provisions of, or constitute a default under, any
contract, indenture, mortgage, deed of trust, loan agreement or other agreement
or instrument to which the Company is currently a party or by which the Company
is currently bound, the Certificate of Incorporation or Bylaws of the Company,
or any law, order, rule, regulation or decree of any government, governmental
agency or court, domestic or foreign, currently applicable to the Company, or
result in the creation or imposition of any lien, charge or encumbrance upon any
property or assets of the Company, except for such breaches, violations or
defaults as, individually and in the aggregate, do not have a material adverse
effect on the Company and its Subsidiaries, taken as a whole, assuming that all
applicable waiting periods under the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements
Act of ▇▇▇▇ (▇▇▇ "▇▇▇ ▇▇▇") have expired or been terminated and all applicable
filings pursuant to state securities laws, the HSR Act, the Securities Act, the
Exchange Act and the rules and regulations of the New York Stock Exchange have
been made.
-18-
(d) No consent, approval, authorization or order of any court or
governmental agency or body or any third party is required to be obtained by the
Company for the sale and issuance of the Warrants or the issuance of the shares
of Common Stock issuable upon exercise of the Warrants except such consents,
approvals, authorizations, registrations or qualifications as may be required
under state securities laws, the HSR Act, the Securities Act, the Exchange Act
and the rules and regulations of the New York Stock Exchange. Upon the valid
exercise of the Warrants by a Registered Holder thereof, the shares of Common
Stock with respect to which the Warrants are exercised shall be fully paid and
nonassessable.
(e) The Company shall not, by amendment of its Certificate of
Incorporation or through any reorganization, transfer of assets, consolidation,
merger, dissolution, issue or sale of securities, or any voluntary action, avoid
or seek to avoid the observance or performance of any of the terms of this
Agreement or of the Warrants.
(f) The Company shall not consolidate with or merge into any other
corporation or sell, transfer or lease its properties and assets as an entirety
or substantially as an entirety to any entity, unless the entity formed by such
consolidation or into which the Company is merged or the entity which acquires
by sale or transfer, or which leases, the properties and assets of the Company
as an entirety or substantially as an entirety shall be a corporation, company,
partnership or trust, shall be organized and validly existing under the laws of
the United States of America, any State thereof or the District of Columbia and
shall expressly assume, by supplemental agreement, the due and punctual
performance and observance of each and every obligation, covenant and condition
of this Agreement to be performed or observed by the Company. Upon any such
consolidation, merger, sale, transfer or lease in accordance with the preceding
sentence, such entity shall succeed to, and be substituted for, and may exercise
every right and power of, the Company under this Agreement with the same effect
as if such successor entity had been named as the Company herein, and
thereafter, except in the case of a lease, the predecessor entity shall be
relieved of all obligations and covenants under this Agreement and the Warrants.
-19-
(g) The Company covenants to at all times keep reserved and available,
for the purpose of effecting the exercise of the Warrants, free from preemptive
rights, out of its authorized but unissued Common Stock the full number of
shares of Common Stock sufficient to provide for the exercise of all rights of
purchase represented by all outstanding Warrants.
Section 12. Inspection of Warrant Agreement. The Company shall keep
copies of this Agreement and any notices given or received hereunder available
for inspection by Registered Holders during normal business hours at its
executive offices.
Section 13. Issuance of New Warrant Certificates. Notwithstanding any
of the provisions of this Agreement or of the Warrants to the contrary, the
Company may, at its option, issue new Warrant Certificates evidencing Warrants
in such form as may be approved by its Board of Directors which reflect any
adjustment or change in the number or kind or class of shares of stock or other
securities or property purchasable under the Warrant Certificates made in
accordance with the provisions of this Agreement. The Company may, at its
option, require Registered Holders of Warrants to surrender their old Warrant
Certificates for any such new Warrant Certificates. The Company shall make no
service or other charge in connection with any such exchange or Warrant
Certificates, except for any taxes payable in connection therewith.
Section 14. Notices. All instructions, notices and other communications
to be given to any party hereto shall be in writing and shall be personally
delivered or sent by registered or certified mail, postage prepaid and return
receipt requested, and shall be deemed to be given for purposes of this
Agreement on the day when delivered to the intended party at its address
specified below:
(a) If to the Company:
Aames Financial Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-20-
With copy to:
Manatt, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ Quicksilver
or such other address as the Company may designate from time to time by written
notice to the Registered Holder.
(b) If to the Registered Holder, then at the address as set forth in
the Warrant Register or such other address as the Registered Holder may
designate from time to time by written notice to the Company.
Section 15. Supplements and Amendments. The Company and the Registered
Holders of a majority of the then outstanding Warrants may from time to time
supplement or amend this Agreement, without the approval of any other Registered
Holders, in order to cure any ambiguity or to correct or supplement any
provision contained herein that may be defective or inconsistent with any other
provision herein, or to make any other provisions in regard to matters or
questions arising hereunder that the Company and such Registered Holders may
deem necessary or desirable and that shall not adversely affect the interests of
the Registered Holders. This Agreement may be amended and the observance of any
term of this Agreement may be waived (either generally or in a particular
instance and either retroactively or prospectively) only by a written instrument
duly executed by the Company and the Registered Holders of a majority of the
then-outstanding Warrants; provided, however, that no such amendment or waiver
shall, without the consent of the Registered Holder of each outstanding Warrant
affected thereby, (a) alter the provisions of this Agreement so as to affect
adversely the Exercise Price, the number of shares of Common Stock purchasable
upon exercise of a Warrant, or the adjustment provisions of Section 8, or (b)
reduce the number of Warrants outstanding the consent of whose Registered
Holders is required for any such amendment or waiver. Each Registered Holder
shall be bound by any amendment or waiver effected pursuant to this Section 15,
whether or not any notice, writing or marking indicating such amendment or
waiver appears on the certificates for the Warrants held by such Registered
Holder or is delivered to such Registered Holder.
-21-
Section 16. Successors. This Agreement shall be binding upon and inure
to the benefit of the respective successors and permitted assigns hereunder of
the Company or any Registered Holder. In the event that any transferee of a
Registered Holder shall acquire Warrants, in any manner, whether by gift,
bequest, purchase, operation of law or otherwise, such transferee shall, upon
the execution and delivery to the Company of an assignment in the form of
Exhibit B hereto, be deemed a party hereto for all purposes and such Warrants
shall be held subject to all of the terms of this Agreement, and by taking and
holding such Warrants, such transferee shall be entitled to receive the benefits
of and be conclusively deemed to have agreed to be bound by and to perform all
of the terms and provisions of this Agreement. In addition, in connection with a
bona fide pledge of any Warrants to secure indebtedness or other obligations, a
Registered Holder may assign its rights, interests and obligations hereunder to
the beneficiary of such pledge; provided that if the beneficiary of such pledge
becomes, or through the exercise of remedies under such pledge causes another
person to become, a Registered Holder of Warrants, such Registered Holder agrees
to be bound by the terms of this Agreement by execution and delivery to the
Company of written notice in the form of Exhibit B pursuant to Section 4 or
otherwise; and provided further that unless and until the immediately preceding
proviso is applicable, the pledgor shall remain bound by the terms of this
Agreement. The Company shall not have either the right or the power to assign or
delegate any right or obligation hereunder (except by merger or other operation
of law) without the written consent of Registered Holders holding a majority of
the then outstanding Warrants.
SECTION 17. GOVERNING LAW. THIS AGREEMENT, EACH WARRANT CERTIFICATE AND
EACH WARRANT ISSUED HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT GIVING EFFECT TO CONFLICT OF
LAWS PROVISIONS THEREOF.
Section 18. Jurisdiction and Venue. Each of the parties hereto hereby
irrevocably submits in any legal action or proceeding relating to or arising out
of this Agreement or any other document relating hereto or delivered in
connection with the transactions contemplated hereby, or for recognition and
enforcement of any judgment in respect thereof, to the exclusive jurisdiction of
the United States
-▇▇-
▇▇▇▇▇▇▇▇ ▇▇▇▇▇ for the District of Delaware (or if such court does not have
jurisdiction, the courts of the State of Delaware, Newcastle County, and
appellate courts thereof. Each of the parties hereto further (a) consents that
any such action or proceeding may be brought in such court and waives any
objection that it may now or hereafter have to the venue of any such action or
proceeding in such court or that such action or proceeding was brought in an
inconvenient court and agrees not to plead or claim the same; (b) agrees that
service of process in any such action or proceeding may be effected by personal
delivery thereof to such party's registered office in the jurisdiction in which
it is incorporated, with a copy to such party at its address as provided in
Section 14; and (c) agrees that nothing herein shall affect the right to effect
service of process in any other manner permitted by law.
Section 19. Benefits of this Agreement. Except as otherwise provided
for in Section 16, nothing in this Agreement shall be construed to give to any
person or corporation other than the Company and the Registered Holders of the
Warrant Certificates any legal or equitable right, remedy or claim under this
Agreement, and this Agreement shall be for the sole and exclusive benefit of the
Company and the Registered Holders of the Warrant Certificates.
Section 20. Severability. If any one or more of the provisions
contained herein, or the application thereof in any circumstances, is held or
rendered invalid, illegal or unenforceable in any respect for any reason, the
validity, legality and enforceability of any such provision in every other
respect and of the remaining provisions contained herein shall not be in any way
affected or impaired thereby, it being intended that all of the rights and
privileges of the parties hereto shall be enforceable to the fullest extent
permitted by law.
Section 21. Specific Performance. The Company acknowledges that it
would be impossible to determine the amount of damages that would result from
any breach by it of any of the provisions of this Agreement and that the remedy
at law for any breach, or threatened breach, of any of such provisions would
likely be inadequate and, accordingly, agrees that each Holder shall, in
addition to any other rights or remedies which it may have, be entitled to seek
-23-
such equitable and injunctive relief as may be available from any court of
competent jurisdiction to compel specific performance of, or restrain the
Company from violating any of, such provisions. In connection with any action or
proceeding for injunctive relief, the Company hereby waives the claim or defense
that a remedy at law alone is adequate and agrees, to the maximum extent
permitted by law, to have each provision of this Agreement specifically enforced
against it, without the necessity of posting bond or other security against it,
and consents to the entry of injunctive relief against it enjoining or
restraining any breach or threatened breach of this Agreement.
Section 22. Integration. This Agreement and the documents referred to
herein or delivered pursuant hereto, including the exhibits hereto, contain the
entire understanding of the parties with respect to the subject matter hereof
and thereof. There are no agreements, representations, warranties, covenants or
undertakings with respect to the subject matter hereof and thereof other than
those expressly set forth herein and therein. This Agreement supersedes all
prior agreements and understandings between the parties with respect to this
subject matter.
Section 23. Further Assurances. Each of the parties hereto shall
execute and deliver such further instruments and documents and take such further
actions as may be reasonably required or desirable to carry out the provisions
hereof and the transactions contemplated hereby.
Section 24. Headings and Table of Contents. The section and subsection
headings herein and the table of contents are for convenience only and shall not
affect the construction hereof.
Section 25. Counterparts. This Agreement may be executed in any number
of counterparts and each of such counterparts shall for all purposes be deemed
to be an original, and all such counterparts shall together constitute one and
the same instrument.
Section 26. Legends. The certificates evidencing the Warrants and the
shares of Common Stock issuable upon exercise of the Warrants shall bear a
legend to the effect that such security may not be sold or transferred unless
-24-
registered under the Securities Act or if an exemption thereunder is available.
Such legend shall be removed upon registration under the Securities Act or if
the Purchaser or any transferee delivers an opinion of counsel reasonably
acceptable to the Company to the effect that such legend is no longer required
under the Securities Act. In addition, certificates evidencing the Warrants
shall bear a legend which states that such Warrants are subject to the terms of
this Agreement.
Section 27. Opinion on Transfer of Warrant Shares After Exercise.
Notwithstanding anything to the contrary stated herein, neither the Company nor
the Company's transfer agent and registrar shall be required to reflect the
transfer of the Shares or other securities issued upon exercise of the Warrants
unless such Shares or other securities have been transferred pursuant to a
registration statement which is effective under the Securities Act of the
Company or the Company's transfer agent and registrar has received an opinion of
counsel, who is reasonably acceptable to the Company, that the transfer is
exempt from registration under the Securities Act.
-25-
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
AAMES FINANCIAL CORPORATION
By:
--------------------------------
Name:
Title:
[PURCHASER]
By:
---------------------------------
Name:
Title:
-26-
EXHIBIT A
FORM OF WARRANT CERTIFICATE
---------------------------
---------------------------
THE SECURITIES REPRESENTED BY THIS CERTIFICATE AND ANY SECURITIES WHICH
MAY BE ISSUED UPON EXERCISE OF THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED AND ARE SUBJECT TO THE TERMS OF THE
WARRANT AGREEMENT, DATED AS OF MARCH 19, 1998 BY AND BETWEEN AAMES FINANCIAL
CORPORATION AND _____________ (THE "WARRANT AGREEMENT"). THESE SECURITIES AND
ANY SECURITIES WHICH MAY BE ISSUED UPON EXERCISE OF THESE SECURITIES MAY NOT BE
SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR ANY EXEMPTION
THEREFROM UNDER SAID ACT OR OTHERWISE THAN IN ACCORDANCE WITH THE WARRANT
AGREEMENT. A COPY OF THE WARRANT AGREEMENT MAY BE OBTAINED FROM AAMES FINANCIAL
CORPORATION.
---------------------------
This Warrant Certificate certifies that ,
or any registered and permitted assigns, is the Registered Holder (as
hereinafter defined) of warrants (the "Warrants"). Each Warrant
entitles the Registered Holder hereof to purchase, upon the terms and conditions
set forth herein, one fully paid and nonassessable share (the "Share") of Common
Stock, par value $.001 per share (the "Common Stock"), of Aames Financial
Corporation, a Delaware corporation (the "Company"), in consideration of the
payment by the Registered Holder of the exercise price (the "Exercise Price") at
the time in effect under the Warrant Agreement (as hereinafter defined). The
Exercise Price shall initially be $17.2031 per Warrant. The Exercise Price and
the number of shares purchasable upon exercise of a Warrant shall be subject to
adjustment as provided in Section 8 of the Warrant Agreement. Any or all of the
Warrants shall expire on April 19, 2001 (the "Expiration Date"). After the
Expiration Date, unexercised Warrants will be wholly void and of no value. The
Warrants represented hereby may be exercised by the Registered Holder on any
business day, as defined in the Warrant Agreement, beginning on the date of a
Purchase Event (as defined in the Warrant Agreement) and on or prior to the
close of business on the Expiration Date upon payment of the Exercise Price
multiplied by the number of such Warrants being exercised (the "Aggregate
Exercise Price") in cash, by cashier's check payable to the order of the Company
or by wire transfer to the Company's account of immediately available funds, and
upon proper execution of the Form of Exercise attached hereto and surrender of
this Warrant Certificate at the corporate executive offices of the Company at
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇. The Exercise
Price and the number of shares of Common Stock and the type and amount of other
securities or other property purchasable upon exercise of each Warrant may as of
the date of this Warrant Certificate have been, or may after such date be,
adjusted as a result of the occurrence of certain events, as more fully provided
in the Warrant Agreement.
The Warrant or Warrants evidenced by this Warrant Certificate are part
of a duly authorized issue of Warrants issued pursuant to the Stock
Purchase Agreement, dated March 19, 1998, by and among the Company and the
Purchaser and whose terms and provisions are governed by the Warrant Agreement,
which Warrant Agreement is hereby incorporated by reference in and made a part
of this instrument and is hereby referred to for the description of the rights,
limitation of rights, obligations, duties and immunities thereunder of the
Company and the Purchaser or such other registered holder of the Warrants to
whom transfer is authorized in accordance with the terms of the Warrant
Agreement (the Purchaser and such other registered holder are referred to herein
individually as the "Registered Holder" and, collectively, as the "Registered
Holders") to all of which the Registered Holder of the Warrants represented by
this Warrant Certificate, by acceptance hereof, consents. Copies of the Warrant
Agreement are on file and available for inspection and can be obtained from or
at the corporate executive offices of the Company.
Subject to the provisions of the Warrant Agree ment, (i) upon such
surrender of this Warrant Certificate and payment of the Aggregate Exercise
Price with respect to the Warrant or Warrants being exercised on or prior to the
close of business on the Expiration Date, the Company shall deliver or cause to
be delivered to the Registered Holder
A-2
surrendering this Warrant Certificate certificates for the shares of
Common Stock, certificates or other appropriate instruments for any other
securities, and such other property issuable upon the exercise of the Warrant or
Warrants evidenced by this Warrant Certificate, in such name or names as the
Registered Holder of this Warrant Certificate that are being exercised shall
designate on the Form of Exercise attached hereto; and (ii) such shares of
Common Stock, securities and other property shall be deemed to have been issued,
and any person so designated therein shall be deemed to have become, the holder
of record of such shares of Common Stock, securities or property as of the date
of the surrender of this Warrant Certificate and payment of the Aggregate
Exercise Price.
All or fewer than all of the Warrants evidenced by this Warrant
Certificate may be exercised on any occasion. In the event that fewer than all
of the Warrants represented by this Warrant Certificate are exercised, upon such
exercise the Company shall execute and deliver to the Registered Holder thereof
or, subject to Section 4 of the Warrant Agreement, such person or entity as
shall be designated in the Form of Exercise attached hereto a new Warrant
Certificate representing the Warrants not so exercised.
Transfers of the Warrant shall only be made in accordance with the
Warrant Agreement.
The Company may deem and treat the Registered Holder hereof as the
absolute owner of this Warrant Certificate (notwithstanding any notation of
ownership or other writing hereon made by anyone) for the purpose of any
exercise hereof, any distribution to the Registered Holder hereof and for all
other purposes, and the Company shall not be affected in any way by any notice
to the contrary.
This Warrant Certificate shall be governed by and construed in
accordance with the laws of the State of Delaware.
Signatures on exercises and assignments of the Warrant represented by
this Warrant Certificate must, unless waived by the Company, be guaranteed by a
bank or trust company having an office or correspondent in the United States or
by a broker or dealer that is a member of a
A-3
registered national securities exchange or the National Association of
Securities Dealers, Inc.
IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to
be duly executed under its official seal by its President or any Vice President
and attested to by its Secretary or any Assistant Secretary.
Dated: ____________, 1998
AAMES FINANCIAL CORPORATION
By:
-------------------------------
Attest:
-------------------------------
[SEAL]
A-4
FORM OF EXERCISE
(To be executed upon exercise of Warrant)
The undersigned hereby irrevocably elects to exercise Warrants
represented by this Warrant Certificate, entitling the undersigned to purchase
shares of Common Stock, par value $.001 per share (the "Common Stock"),
of Aames Financial Corporation, a Delaware corporation (the "Company"), and such
other securities or property issuable upon exercise of such Warrants in
accordance with the terms of the Warrant Agreement, dated as of March 19, 1998,
between the Company and , and herewith tenders payment for such
Warrants in the amount of $ payable in cash, by cashier's check payable
to the order of the Company or by wire transfer to the Company's account of
immediately available funds.
The undersigned requests that certificates for shares of Common Stock
and certificates or other instruments for other securities, and other property
issuable upon exercise of the Warrant be registered in the name of
whose address is
and that such certificates and other instruments and property be delivered to
whose address is
. If said number of Warrants is less than
all of the Warrants represented by this Warrant Certificate, the undersigned
requests that a new Warrant Certificate representing the remaining balance of
the Warrants be registered in the name of whose address
is and that such Warrant Certificate be
delivered to whose address is
.
[The undersigned hereby certifies that it is acquiring the shares of
Common Stock issuable upon the exercise of the Warrants for its own account and
is an "accredited investor" as defined in Rule 501 to the Securities Act of
1933, as amended (the "Securities Act"), and has no intention of distributing
the shares of Common Stock issuable upon the exercise of the Warrants in
violation of the Securities Act or applicable state securities or "blue sky"
laws.]*.
Dated:
Signature:
------------------------------
(Signature must conform in all
respects to the name of the
Registered Holder as specified on
the face of the Warrant
Certificate.)
-------------------------------
(Social Security or Other
Taxpayer Identification
Number of Registered Holder)
----------
* Required if the shares of Common Stock issuable upon exercise of the Warrants
are not registered under the Securities Act for issuance and sale by the
Company.
EXHIBIT B
[FORM OF ASSIGNMENT]
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto
--------------------------------
--------------------------------
--------------------------------
(Please print name and address of transferee)
this Warrant Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint ,
attorney to transfer this Warrant Certificate on the books of
, with full power of substitution.
[The undersigned hereby certifies that the acquisition by the
transferee of the Warrants evidenced by this Warrant Certificate was effected in
a transaction exempt from the registration provisions in Section 5 of the
Securities Act of 1933 (as amended (the "Securities Act") and was effected in a
transaction that was not a distribution, without the use of general advertising
or general solicitation, to a person or entity that the undersigned, in his best
a person or entity that the undersigned, in his best knowledge, believes to be
an "accredited investor" (as defined in Rule 501 to the Securities Act and not
an underwriter (as defined in Section 2(II) of the Securities Act.]*
Dated:
Signature:
--------------------------
(Signature must conform in all
respects to the name of the
Registered Holder as specified
on the face of the Warrant
Certificate.)
------------------------------
(Insert Social Security or
Other Identifying Number of
Assignee)
[The aforesaid assignee hereby certifies that such assignee is an
"accredited investor" as defined in Rule 501 to the Securities Act, is acquiring
the Warrants for its own account and has no intention of distributing the
Warrants or shares of Common Stock issuable upon the exercise of the Warrants in
violation of the Securities Act or applicable state securities or "blue sky"
laws.]*
By accepting this assignment, the aforesaid assignee shall be entitled to
the benefits of and hereby agrees to be bound by all of the terms and conditions
of the Warrant Agreement.
Agreed and Accepted as of :
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* Required if the Warrants are not registered under the Securities Act for
resale by registered holders.