REGISTRATION RIGHTS AGREEMENT
Dated as of March 19, 1998
By and Between
AAMES FINANCIAL CORPORATION
and
THIRTY-FIVE EAST INVESTMENTS LLC
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TABLE OF CONTENTS
Section 1. Certain Definitions...............................................1 Section 2. Registration Under the Securities Act.............................5 Section 3. Registration Procedures...........................................8 Section 4. Registration Expenses............................................18 Section 5. Representations and Warranties...................................19 Section 6. Indemnification..................................................22 Section 7. Underwritten Offerings...........................................27 Section 8. Rule 144.........................................................27 Section 9. Miscellaneous....................................................28
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REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT (this "Agreement"), dated as of March 19, 1998, by and among Aames Financial Corporation, a Delaware corporation (the "Company"), and Thirty-Five East Investments LLC, a Delaware limited liability company (the "Purchaser").
RECITALS
WHEREAS, the Company and the Purchaser have entered into a Stock Purchase Agreement, dated the date hereof (the "Stock Purchase Agreement"), providing for, among other things, the sale by the Company and the purchase by the Purchaser of an aggregate of 2,225,865 shares (the "Shares") of Common Stock of the Company, par value $.001 per share (the "Common Stock") and warrants (each a "Warrant" and collectively, the "Warrants") to purchase 2,225,865 shares of Common Stock at an initial exercise price of $17.2031 per share (the "Warrant Shares");
WHEREAS, the Company and Turtle Creek Revocable Trust (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 556,446 shares (the "Other Shares") of Common Stock and warrants (the "Other Warrants") to purchase 556,466 shares of Common Stock at an initial exercise price of $17.2031 per share (the "Other Warrant Shares");
WHEREAS, the Company and the Purchaser have entered into a Warrant Agreement, dated as of the date hereof (the "Warrant Agreement"), providing for, among other things, the terms and conditions of the Warrants; and
NOW, THEREFORE, in consideration of the mutual covenants and conditions as hereinafter set forth, the parties hereto agree as follows:
Section 1. Certain Definitions.
As used in this Agreement, the following terms shall have the following respective meanings:
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"Affiliate" means a person that directly, or indirectly through one or more intermediaries, controls or is controlled by, or is under common control with, the person specified.
"Closing Date" shall be the same date as the closing of the Stock Purchase Agreement and the Other Stock Purchase Agreement.
"Commission" shall mean the Securities and Exchange Commission, or any other federal agency at the time administering the Exchange Act or the Securities Act, whichever is the relevant statute for the particular purpose.
"Common Stock" shall have the meaning assigned to such term in the preamble to this Agreement.
"Exchange Act" shall mean the Securities Exchange Act of 1934, or any successor thereto, as the same shall be amended from time to time.
"Holder" shall mean the Purchaser, the Other Purchaser and each of their successive successors and assigns who acquire Registrable Securities, directly or indirectly, from either such persons or from any successive successor or assign of either such persons.
"Other Purchaser" shall have the meaning assigned to such term in the preamble to this Agreement.
"Other Registration Rights Agreement" shall mean the Registration Rights Agreement, dated the date hereof, between the Company and the Other Purchaser, with terms and provisions substantially similar to this Agreement.
"Other Shares" shall have the meaning assigned to such term in the preamble to this Agreement.
"Other Stock Purchase Agreement" shall have the meaning assigned to such term in the preamble to this Agreement.
"Other Warrants" shall have the meaning assigned to such term in the preamble to this Agreement.
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"Other Warrant Shares" shall have the meaning assigned to such term in the preamble to this Agreement.
"Registrable Securities" shall mean the Shares, Other Shares, Warrant Shares and Other Warrant Shares, and any securities of the Company issued successively in exchange for or in respect of any of the foregoing, whether as a result of any successive stock split or reclassification of, or stock dividend on, any of the foregoing or otherwise; provided, however, that such shares of Common Stock or securities shall cease to be Registrable Securities when (i) a registration statement registering such shares of Common Stock or securities, as the case may be, under the Securities Act has been declared effective and such shares of Common Stock or securities, as the case may be, have been sold or otherwise transferred by the Holder thereof pursuant to such effective registration statement, (ii) such shares of Common Stock or securities, as the case may be, are sold pursuant to Rule 144 (or any successor provision) promulgated under the Securities Act under circumstances in which any legend borne by such shares of Common Stock or securities relating to restrictions on transferability thereof, under the Securities Act or otherwise, is removed by the Company or (iii) such shares of Common Stock or securities shall have been transferred, new securities evidencing such shares of Common Stock or securities without legends restricting further transfer shall have been delivered by the Company and subsequent public distribution of such shares of Common Stock or securities shall not require registration under the Securities Act.
"Registration Expenses" shall have the meaning assigned thereto in Section 4 of this Agreement.
"Rights" shall mean any options, warrants, securities, rights or other instruments convertible into or exchangeable or exercisable for, or otherwise giving the holder thereof the right to acquire, directly or indirectly, any Common Stock or any other such options, warrants, securities, rights or instruments, including without limitation, the Warrants, Other Warrants and any instrument the value of which is measured by reference to the value of the Common Stock.
"Securities Act" shall mean the Securities Act of 1933, or any successor thereto, as the same shall be amended from time to time.
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"Shares" shall have the meaning assigned to such term in the preamble to this Agreement.
"Share Shelf Registration Statement" shall mean any registration statement of the Company that covers the resale of any of the Shares and the Other Shares pursuant to the provisions of this Agreement and the Other Registration Rights Agreement, including any prospectus, amendments and supplements to such registration statement or prospectus, including pre- and post-effective amendments, all exhibits thereto, and all material incorporated by reference or deemed to be incorporated by reference, if any, in such registration statement.
"Shelf Registration Statements" shall mean the Share Shelf Registration Statement and the Warrant Shelf Registration Statement.
"Subsidiary" shall mean any corporation of which shares of stock having a majority of the general voting power in electing the Board of Directors are, at the time as of which any determination is being made, owned by the Company either directly or through its Subsidiaries, any partnership in which the Company or any Subsidiary is a general partner and any joint venture in which the Company or any Subsidiary is a joint venturer.
"Warrants" shall have the meaning assigned to such term in the preamble to this Agreement.
"Warrant Shelf Registration Statement" shall mean any registration statement of the Company that covers the resale of any of the Warrant Shares and the Other Warrant Shares, including any prospectus, amendments and supplements to such registration statement or prospectus, including pre-and post-effective amendments, all exhibits thereto, and all material incorporated by reference or deemed to be incorporated by reference, if any, in such registration statement.
"Warrant Shares" shall have the meaning assigned to such term in the preamble to this Agreement.
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Section 2. Registration Under the Securities Act.
(a) The Company agrees to file with the Commission as soon as practicable after the Closing Date, but in no event later than the 120th day after the Closing Date, the Share Shelf Registration Statement. The Share Shelf Registration Statement shall be on Form S-3 under the Securities Act or another appropriate form permitting registration of the Shares and the Other Shares for resale by the Holders from time to time in open market transactions (with or without the use of one or more brokers) or through an underwritten offering. The Company shall not permit any securities other than the Shares and the Other Shares to be included in the Share Shelf Registration Statement. The Company shall use its reasonable best efforts to cause the Share Shelf Registration Statement to be declared effective pursuant to the Securities Act as promptly as practicable following the filing thereof, but in no event later than 60 days following such filing date, and to keep the Share Shelf Registration Statement continuously effective under the Securities Act thereafter for a period ending the earlier of (i) three years from the Closing Date (subject to extension pursuant to Section 2(e) below), or (ii) when there ceases to be any outstanding Shares or Other Shares which are Registrable Securities (the "Purchase Shelf Effectiveness Period").
(b) After the occurrence of a Purchase Event (as defined in the Warrant Agreement or the Other Warrant Agreement, as the case may be), the Company agrees to file with the Commission at the request of any registered holder of Warrants, Warrant Shares, Other Warrants or Other Warrant Shares, but in no event later than the 90th day after any such registered holder makes such request, the Warrant Shelf Registration Statement. The right of the Purchaser to request registration of the Warrant Shares shall expire on the Expiration Date of the Warrants (as defined in the Warrant Agreement). The Warrant Shelf Registration Statement shall be on Form S-3 under the Securities Act or another appropriate form permitting registration of such Warrant Shares and Other Warrant Shares for resale by the Holders from time to time in open market transactions (with or without the use of one or more brokers) or through an underwritten offering. The Company shall not permit any securities other than the Warrant Shares and the Other Warrant Shares to be included in the Warrant Shelf Registration Statement. The Company shall use its
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reasonable best efforts to cause the Warrant Shelf Registration Statement to be declared effective pursuant to the Securities Act as promptly as practicable following the filing thereof, but in no event later than 60 days following such filing date, and to keep such Warrant Shelf Registration Statement continuously effective under the Securities Act thereafter for a period ending on the earlier of (i) twelve months from the date the Warrant Shelf Registration Statement becomes effective (subject to extension pursuant to Section 2(e) below), or (ii) when there ceases to be any outstanding Warrant Shares and Other Warrant Shares which are Registrable Securities (the "Warrant Shelf Effectiveness Period," and each of the Purchase Shelf Effectiveness Period and Warrant Shelf Effectiveness Period, an "Effectiveness Period").
(c) In the event that either (i) the no action relief contemplated by Section 7.7 of the Stock Purchase Agreement and Other Stock Purchase Agreement is obtained or (ii) the Company determines in its sole and absolute discretion that there has been a change in law or change in administrative interpretation by the Commission that would permit the Company to file a shelf registration statement (the "Exercise Shelf Registration Statement") under the Securities Act to register the offer and sale by the Company of the Common Stock issuable upon exercise of the Warrants and Other Warrants after the occurrence of a Purchase Event (as defined in the Warrant Agreement and Other Warrant Agreement, as the case may be) and such filing will not result in the loss of the exemption from the registration requirements under the Securities Act which was relied on by the Company for the offer and sale of any of the Shares, Other Shares, Warrants or Other Warrants, at the request of any registered holder of Warrants, Warrant Shares, Other Warrants or Other Warrant Shares, the Company shall file with the Commission the Exercise Shelf Registration Statement. The Company shall use its reasonable best efforts to cause such Exercise Shelf Registration Statement to be declared effective as promptly as practicable after the filing thereof and to keep such Exercise Shelf Registration Statement continuously effective under the Securities Act thereafter for a period ending on the earlier of (i) three years from the Closing Date (subject to extension pursuant to Section 2(e) below) or (ii) when there ceases to be any outstanding Warrants and Other Warrants which have not expired or been exercised. As soon as practicable after (a) the Exercise Shelf Registration
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Statement is declared effective under the Securities Act and (b) the Warrant Agreement, Other Warrant Agreement, Warrants and Other Warrants shall have been amended by the Company and each of the registered holders of Warrants and Other Warrants in a manner acceptable to the Company to provide for a suspension of the right of any registered holder of Warrants or Other Warrants to exercise such Warrants or Other Warrants in the event the Exercise Shelf Registration Statement shall not continue to remain effective with the Commission, the Company will amend this Agreement in a manner consistent with the other terms hereof to provide for the filing of a shelf registration statement under the Securities Act covering the resale of the Warrants and Other Warrants.
(d) If, for any reason, any of the Shelf Registration Statements loses its effectiveness during its applicable Effectiveness Period, the Company shall file with the Commission as soon as practicable, but in no event later than 60 days after the date such shelf registration statement loses its effectiveness, another registration statement covering all of the Registrable Securities which were covered by the Shelf Registration Statement which so lost its effectiveness; provided, that if the Company has notice that any Shelf Registration Statement will lose its effectiveness, the Company shall use its reasonable best efforts to file another registration statement covering the Registrable Securities which are covered by such Shelf Registration Statement for the applicable Effectiveness Period as soon as practicable after the Company receives such notice.
(e) The Company shall use its reasonable best efforts to keep the shelf registration statements continuously effective by supplementing and amending them as required by the rules, regulations or instructions applicable to the registration form used for such shelf registration statement if required by the Securities Act or reasonably requested by the Holders of a majority in aggregate principal amount of the Registrable Securities covered by such shelf registration statement; provided that the applicable Effectiveness Period shall be extended to the extent necessary to permit dealers to comply with the applicable prospectus delivery requirements of Rule 174 and as otherwise provided herein.
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Section 3. Registration Procedures.
(a) In connection with the Company's obligations with respect to any registration of Registrable Securities pursuant to Section 2 hereof, the Company shall use its reasonable best efforts to effect or cause such registration to permit the sale of the Registrable Securities by the Holders thereof in open market transactions or in one underwritten offering pursuant to Section 7 hereof. In connection therewith, the Company shall, as soon as reasonably possible:
(i) comply with the provisions of the Securities Act
applicable to issuers with respect to the disposition of all of the
Registrable Securities covered by such registration statement in
accordance with the intended methods of disposition by the Holders
thereof set forth in such registration statement;
(ii) provide (A) each Holder of the Shares and the Other
Shares, in the case of the Share Shelf Registration Statement, and the
Warrant Shares and the Other Warrant Shares, in the case of the Warrant
Shelf Registration Statement, and counsel for such Holders the
opportunity to participate in the preparation of such Shelf Registration
Statement and (B) (1) each such Holder and counsel, (2) the underwriters
(which term, for purposes of this Agreement, shall include a person
deemed to be an underwriter within the meaning of Section 2(11) of the
Securities Act), if any, in connection with the one underwritten
offering pursuant to Section 7 hereof and (3) counsel for such
underwriters, if any, the opportunity to participate in the preparation
of each prospectus included in the applicable Shelf Registration
Statement or filed with the Commission, and each amendment or supplement
thereto (and, in the case of the parties referred to in Sections
3(a)(ii)(B)(2) and 3(a)(ii)(B)(3), only with respect to each prospectus,
amendment or supplement relating to the one underwritten offering
pursuant to Section 7 hereof);
(iii) throughout the Effectiveness Period and after
receiving notice under Section 3(c) hereof until such offer and sale is
completed, make available for inspection during normal business hours by
the parties referred to in Section 3(a)(ii) above (and, in
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the case of the party referred to in Sections 3(a)(ii)(B)(2) and
3(a)(ii)(B)(3), only with respect to an offer and sale pursuant to
Section 7 hereof) such financial and other information and books and
records of the Company, and cause the officers, directors, employees,
counsel and independent certified public accountants of the Company to
respond to such inquiries, as shall be reasonably necessary, in the
judgment of the respective counsel referred to in such Section, to
conduct a reasonable investigation within the meaning of Section 11 of
the Securities Act if the recipient thereof has executed a
confidentiality agreement in a form reasonably acceptable to the Company
protecting against the misappropriation or disclosure of the Company's
confidential information;
(iv) promptly notify the Holders of the Shares and the
Other Shares, in the case of the Share Shelf Registration Statement, and
the Holders of the Warrant Shares and the Other Warrant Shares, in the
case of the Warrant Shelf Registration Statement and confirm such advice
in writing, (A) when such registration statement or the prospectus
included therein or any prospectus amendment or supplement or
post-effective amendment has been filed, and, with respect to such
registration statement or any post-effective amendment, when the same
has become effective, (B) of any comments by the Commission and by the
Blue Sky or securities commissioner or regulator of any state with
respect thereto or any request by the Commission for amendments or
supplements to such registration statement or prospectus or for
additional information, (C) of the issuance by the Commission of any
stop order suspending the effectiveness of such registration statement
or the initiation or threatening of any proceedings for that purpose,
(D) if at any time during the applicable Effectiveness Period the
representations and warranties of the Company contemplated by Section
3(a)(xiii) or Section 5 hereof cease to be true and correct in all
material respects, (E) of the receipt by the Company of any notification
with respect to the suspension of the qualification of the Registrable
Securities for sale in any jurisdiction or the initiation or threatening
of any proceeding for such purpose, or (F) in addition to such Holders,
the managing underwriter or underwriters, if any, in connection with the
one underwritten offering pursuant
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to Section 7 hereof, at any time a prospectus (in the case of such
underwriter or underwriters, only when a prospectus relating to such
underwritten offering) is required to be delivered under the Securities
Act, that such registration statement, prospectus, prospectus amendment
or supplement or post-effective amendment, or any document incorporated
by reference in any of the foregoing, may contain an untrue statement of
a material fact or omits to state any material fact required to be
stated therein or necessary to make the statements therein not
misleading in light of the circumstances then existing;
(v) use its reasonable best efforts to obtain the
withdrawal of any order suspending the effectiveness of either of the
Shelf Registration Statements or any post-effective amendment thereto at
the earliest practicable date;
(vi) if requested by any managing underwriter or
underwriters in connection with the one underwritten offering pursuant
to Section 7 hereof, or any Holder, promptly incorporate in a prospectus
supplement or post-effective amendment such information as is required
by the applicable rules and regulations of the Commission and as such
managing underwriter, underwriters or Holder specifies should be
included therein relating to the terms of the sale of such Registrable
Securities, including, without limitation, information with respect to
the number of Registrable Securities being sold by the Holders or to any
underwriters, the name and description of the Holders and underwriter,
the offering price of such Registrable Securities and any discount,
commission or other compensation payable in respect thereof, the
purchase price being paid therefor by such underwriters and with respect
to any other terms of the offering of the Registrable Securities to be
sold by the Holders or to such underwriters; and make all required
filings of such prospectus supplement or post-effective amendment
promptly after notification of the matters to be incorporated in such
prospectus supplement or post-effective amendment;
(vii) furnish (A) to each Holder of the Shares and the Other
Shares, in the case of the Share Shelf Registration Statement, and the
Warrant Shares and the
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Other Warrant Shares, in the case of the Warrant Shelf Registration
Statement, an executed copy of such registration statement, each such
amendment and supplement thereto (in each case including all exhibits
thereto and documents incorporated by reference therein), and (B) to any
Holder of Registrable Securities such number of copies of such
registration statement (excluding exhibits thereto and documents
incorporated by reference therein unless specifically so requested by
any Holder or underwriter, if any, in connection with the one
underwritten offering pursuant to Section 7 hereof) and of the
prospectus included in such registration statement (including each
preliminary prospectus and any summary prospectus), in conformity with
the requirements of the Securities Act, and such other documents, as any
such Holder and underwriter, if any, may reasonably request in order to
facilitate the offering and disposition of the Registrable Securities
owned by any such Holder or underwritten by such underwriter and to
permit each Holder and underwriter to satisfy the prospectus delivery
requirements of the Securities Act; and the Company hereby consents to
the use of such prospectus (including such preliminary and summary
prospectus) and any amendment or supplement thereto by each Holder and
by any such underwriter, in each case in the form most recently provided
to such party by the Company, in connection with the offering and sale
of the Registrable Securities covered by the prospectus (including such
preliminary and summary prospectus) or any supplement or amendment
thereto;
(viii) use its reasonable best efforts to (A) register or
qualify the Registrable Securities to be included in the applicable
Shelf Registration Statement under such securities laws or Blue Sky laws
of such jurisdictions in the United States as any Holder and
underwriter, if any, in connection with the one underwritten offering
pursuant to Section 7 hereof, thereof shall reasonably request, (B) keep
such registrations or qualifications in effect and comply with such laws
so as to permit the continuance of offers, sales and dealings therein in
such jurisdictions for so long as may be necessary to enable the Holders
or underwriters to complete its distribution of Registrable Securities
pursuant to such offering and (C) take any and all other actions as may
be reasonably necessary or advisable to enable the
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Holders and underwriters, if any, to consummate the disposition in such
jurisdictions of such Registrable Securities; provide ...
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