PREFERRED STOCK PURCHASE AGREEMENT
This STOCK PURCHASE AGREEMENT (this "AGREEMENT") dated as of May 19, 2000,
between Aames Financial Corporation, a Delaware corporation (the "COMPANY") and
Specialty Finance Partners, a Bermuda general partnership (the "PURCHASER").
WHEREAS, each of the Company and the Purchaser has determined to enter into
this Agreement, pursuant to which the Purchaser has agreed to purchase from the
Company, and the Company has agreed to issue and sell to the Purchaser on the
Initial Closing Date and the Additional Closing Date (each as hereinafter
defined), shares of the Company's Series C Convertible Preferred Stock, par
value $0.001 per share (the "SERIES C PREFERRED STOCK"), having the rights,
preferences, privileges and restrictions set forth in the Company's Certificate
of Incorporation, as attached hereto as EXHIBIT A (the "CERTIFICATE OF
INCORPORATION"), the aggregate number of which shares to be sold and purchased
pursuant to this Agreement is to be determined in accordance with Section 1 of
this Agreement;
WHEREAS, on the Initial Closing (as hereinafter defined) the Company will
issue to Purchaser a warrant (the "WARRANT") to purchase five million
(5,000,000) shares of Series C Preferred Stock at an exercise price equal to the
Purchase Price (as defined below), such Warrant to be in the form attached
hereto as EXHIBIT B.
WHEREAS, the Company and the Purchaser desire to make certain
representations, warranties, covenants and agreements in connection with the
transactions contemplated herein.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained in this Agreement, the parties agree as follows:
SECTION 1. INITIAL ISSUANCE, SALE AND DELIVERY.
(a) Upon the terms and subject to the conditions set forth herein, and
in reliance upon the representations and warranties hereinafter set forth,
the Company shall issue, sell and deliver to the Purchaser, the number of
shares of Series C Preferred Stock (such shares of Series C Preferred Stock
are referred to collectively herein as the "SHARES")equal to the quotient
obtained by dividing (i) 50,000,000 by (ii) the lower of (x) $0.90 per
share or (y) the average closing price of the Company's Common Stock, par
value $0.001 per share (the "COMMON STOCK") on the New York Stock Exchange
(the "NYSE") for the five (5) days prior to the Initial Closing Date (as
defined below) (the "PURCHASE PRICE").
(b) The total aggregate purchase price for the Shares to be issued at
the Initial Closing and the Additional Closing (as hereinafter defined) and
the Warrant shall be Fifty Million Dollars ($50,000,000).
(c) The purchase and sale of 40 million of the Shares (the "INITIAL
Shares")shall occur at a time and place mutually agreed upon by the parties
for such closing, which shall be the first date on which the closing
conditions described in Sections 7 and 8 have been satisfied (the "INITIAL
CLOSING DATE"), and at the closing of such purchase and sale of Shares (the
"INITIAL CLOSING"):
(i) the Company shall deliver to the Purchaser certificates
representing the Initial Shares (the "INITIAL CERTIFICATES"), duly
endorsed for transfer, transferring to the Purchaser good and
marketable title to such Initial Shares, free and clear of all liens
and encumbrances; and
(ii) the Initial Certificates shall be stamped or otherwise
imprinted with the legend as set forth in Section 3(c); and
(iii) the Company will issue to the Purchaser the Warrant; and
(iv) each of the Company and Purchaser shall deliver such other
documents as necessary to comply with the provisions of Sections 7 and
8 of this Agreement.
SECTION 1.1. ADDITIONAL ISSUANCES, SALE AND DELIVERY
(a) Upon the terms and subject to the conditions set forth herein, and
in reliance upon the representations and warranties hereinafter set forth,
on the Additional Closing Date (as defined below) the Company shall issue,
sell and deliver to the Purchaser the number of shares of Series C
Preferred Stock equal to (i) the total number of Shares as determined in
Section 1(a) above, minus (ii) the Initial Shares (the "ADDITIONAL
SHARES").
(b) Such sales and purchases shall occur at a time and place mutually
agreed upon by the parties for such closing, if the following conditions
have been met (the "ADDITIONAL CLOSING DATE"):
(i) The Initial Closing Date shall have occurred; and
(ii) The closing conditions in Sections 7 and 8 shall have been
satisfied with respect to the Additional Shares; and
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(iii) the Company shall deliver to the Purchaser certificates
representing the Additional Shares (the "ADDITIONAL CERTIFICATES"),
duly endorsed for transfer, transferring to the Purchaser good and
marketable title to such Additional Shares, free and clear of all
liens and encumbrances; and
(iv) the Additional Certificates shall be stamped or otherwise
imprinted with the legend as set forth in Section 3(c); and
(v) each of the Company and Purchaser shall deliver such other
documents as necessary to comply with the provisions of Sections 7 and
8 of this Agreement.
SECTION 2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
represents and warrants to Purchaser as follows:
(a) The Company is a corporation duly organized and validly existing
under, and by virtue of, the laws of the State of Delaware and is in good
standing under such laws. The Company has requisite corporate power and
authority to own and operate its properties and assets, and to carry on its
business as presently conducted. The Company is duly qualified to do
business as a foreign corporation in each jurisdiction in which the failure
to be so qualified would have a material adverse affect on the Company's
business.
(b) The Company has all requisite legal and corporate power and
authority to execute and deliver this Agreement, to sell and issue the
Shares and to issue the Warrant, the shares of Series C Preferred Stock
issuable upon the exercise of the Warrant (the "WARRANT SHARES") and to
issue the Company's Common Stock, par value $0.001 per share (the "COMMON
STOCK") which underlies the conversion of the Shares and the Warrant Shares
(the "CONVERSION STOCK"), and to carry out and perform its obligations
under the terms of this Agreement and the Warrant.
(c) As of May 18, 2000, there were 400,000,000 shares of Common Stock
authorized of which 6,212,713 shares were issued and outstanding and
29,840,133 are reserved for issuance (i) upon conversion of currently
outstanding Series B Convertible Preferred Stock, par value $0.001 per
share (the "SERIES B PREFERRED STOCK") and Series C Preferred Stock, and
(ii) under existing stock option plans, warrants and convertible debt.
(d) As of May 18, 2000, there were 200,000,000 shares of preferred
stock authorized, of which (i) 500,000 have been designated as Series A
Preferred Stock, par value $0.001 per share (of which there are no shares
currently
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issued or outstanding); (ii) 29,704,000 have been designated as Series B
Preferred Stock (26,704,000 of which are issued and outstanding; none of
which have been otherwise reserved for issuance); (iii) 107,122,664 have
been designated as Series C Preferred Stock (20,166,600 of which are issued
and outstanding; none of which have been otherwise reserved for issuance).
None of shares of any of the classes of preferred stock described in this
Section 2(d)are, as of the date hereof, listed on any trading exchange.
(e) All corporate action on the part of the Company, its officers,
directors and stockholders necessary for the authorization, execution,
delivery and performance of this Agreement, the authorization, sale,
issuance and delivery of the Shares, the Warrant, the Warrant Shares and
the Conversion Stock, and the performance of all of the Company's
obligations under this Agreement and the Warrant has been taken or will be
taken prior to the Initial Closing or the Additional Closing, as
applicable. This Agreement and the Warrant, when executed and delivered by
the Company, shall constitute valid and binding obligations of the Company,
enforceable in accordance with their terms, subject to laws of general
application relating to bankruptcy, insolvency and the relief of debtors
and rules of law governing specific performance, injunctive relief or other
equitable remedies. The Shares, when issued in compliance with the
provisions of this Agreement will be validly issued, fully paid and
nonassessable, and will have the rights, preferences and privileges
described in the Certificate of Incorporation. The Conversion Stock has
been duly and validly reserved and, when issued in compliance with the
provisions of this Agreement, the Warrant and the Certificate of
Incorporation, will be validly issued, fully paid and nonassessable. The
Warrant Shares shall be duly and validly reserved as of the Additional
Closing Date and, when issued shall be in compliance with the provisions of
this Agreement, the Warrant and the Certificate of Incorporation, and will
be validly issued, fully paid and nonassessable. The Shares, the Warrant
Shares and the Conversion Stock will be free of any liens or encumbrances,
assuming the Purchaser takes the shares with no notice thereof, other than
any liens or encumbrances created by or imposed upon the holders; PROVIDED,
HOWEVER, that the Shares, the Warrant Shares and the Conversion Stock are
subject to restrictions on transfer under state and/or federal securities
laws.
(f) The Company is not in violation or default of any term or
provision of the Certificate of Incorporation or the Company's Bylaws, as
amended (the "BYLAWS"), or in any material respect of any term or provision
of any indebtedness, indenture, material agreement, material instrument,
judgment, order or decree by which it is bound, and to its knowledge is not
in violation of any statute,
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rule or regulation applicable to the Company where such violation would
materially and adversely affect the Company. The execution and performance
of the transactions contemplated by this Agreement and the Warrant and
compliance with their provisions by the Company, and the issuance of the
Shares, the Warrant Shares and the Conversion Stock, will not violate any
applicable federal or state law, rule or regulation where such violation
would materially and adversely affect the Company, and will not, in any
material respect, conflict with, result in any breach of any of the terms
or provisions of, or constitute a default under or require a consent or
waiver under the Certificate of Incorporation or Bylaws or any
indebtedness, indenture, material agreement, material instrument, judgment,
order or decree by which the Company is bound.
(g) No consent, approval or authorization of or designation,
declaration or filing with any governmental authority on the part of the
Company is required in connection with the valid execution and delivery of
this Agreement, the Warrant, or the offer, sale or issuance of the Shares,
the Warrant Shares and the Conversion Stock, or the consummation of any
other transaction contemplated hereby, except: (i) the filing of a
definitive Information Statement with the Securities and Exchange
Commission (the "SEC") and subsequent mailing of such Information Statement
at least twenty (20) calendar days prior to the Initial Closing Date
pursuant to Section 14(c) of the Securities Exchange Act of 1934 (the
"EXCHANGE ACT"), (ii) the approval of the NYSE prior to the Initial Closing
Date, or (iii) the filing of a definitive Information Statement with the
SEC and subsequent mailing of such Information Statement at least twenty
(20) calendar days prior to the Additional Closing Date pursuant to Section
14(c) of the Exchange Act.
(h) Subject to the accuracy of the Purchaser's representations in
Section 3 hereof, the offer, sale and issuance of the Shares, the Warrant
Shares and the Conversion Stock to be issued in conformity with the terms
of this Agreement or the Warrant constitute transactions exempt from the
registration requirements of Section 5 of the Securities Act of 1933 (the
"SECURITIES ACT") and is in compliance with applicable state securities
laws.
(i) Neither this Agreement nor the Warrant nor any information in any
Exhibit attached hereto or otherwise furnished to Purchaser, when taken as
a whole, contains any untrue statement of a material fact or omits to state
a material fact necessary in order to make the statement contained herein
and therein not misleading in light of the circumstance under which they
were made. The Company has provided Purchaser with all the information such
Purchaser has requested.
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(j) As of the respective dates all documents filed by the Company
pursuant to the Exchange Act or Securities Act prior to the date hereof and
including the Company's Quarterly Report on Form 10-Q for the quarter ended
March 31, 2000 to be filed on or before May 22, 2000 (the "SEC DOCUMENTS"),
or, in the case of registration statements as of their respective effective
dates, complied in all material respects with the requirements of the
Exchange Act or the Securities Act, as applicable. None of the SEC
Documents, as of their respective dates, contained any untrue statement of
a material fact or omits to state any material fact required to be stated
therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading.
(k) The transactions contemplated by this Agreement have been approved
by at least a majority of those members of the Board of Directors who are
not affiliated with the Purchaser.
(l) The Conversion Stock, when issued, shall have rights issued
pursuant to the Rights Agreement (as defined below) on a Common Stock
equivalent basis.
SECTION 3. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER. The Purchaser
hereby represents and warrants to the Company as follows:
(a) The Shares, the Warrant Shares and the Conversion Stock to be
purchased by such Purchaser will be acquired for investment for the
Purchaser's own account and not with a view to the resale or distribution
of any part thereof, except in compliance with the provisions of the
Securities Act, or an exemption therefrom, and in compliance with the terms
of this Agreement. The Purchaser is an Accredited Investor as defined under
Rule 501(a) under the Securities Act.
(b) The Purchaser understands that the Shares, the Warrant Shares and
the Conversion Stock are characterized as "restricted securities" under the
federal securities laws inasmuch as they are being acquired from the
Company in a transaction not involving a public offering and that under
such laws and applicable regulations such Shares, Warrant Shares and the
Conversion Stock may be resold without registration under the Securities
Act only in certain limited circumstances.
(c) The Purchaser further agrees that each certificate representing
the Shares, Warrant Shares and the Conversion Stock shall be stamped or
otherwise imprinted with a legend substantially in the following form:
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"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE "ACT") AND MAY NOT BE
TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS SUCH SECURITIES HAVE BEEN
REGISTERED UNDER THE ACT OR AN EXEMPTION FROM REGISTRATION IS
AVAILABLE."
(d) The Purchaser is a general partnership duly organized and validly
existing under, and by virtue of, the laws of Bermuda and is in good
standing under such laws. The Purchaser has requisite corporate power and
authority to own and operate its properties and assets, and to carry on its
business as presently conducted.
(e) The Purchaser has all requisite legal and other power and
authority to execute and deliver this Agreement and receive issuance of the
Warrant, to purchase the Shares and the Warrant Shares and to carry out and
perform its obligations under the terms of this Agreement and the Warrant.
(f) All action on the part of the Purchaser, its officers, managers
and members necessary for the authorization, execution, delivery and
performance of this Agreement and the Warrant, purchase and receipt of the
Shares, the Warrant Shares and the Conversion Stock, and the performance of
all of the Purchaser's obligations under this Agreement and the Warrant
have been taken or will be taken prior to the Initial Closing Date or the
Additional Closing Date. This Agreement and the Warrant, when executed and
delivered by the Company, shall constitute valid and binding obligations of
the Purchaser, enforceable in accordance with their terms, subject to laws
of general application relating to bankruptcy, insolvency and the relief of
debtors and rules of law governing specific performance, injunctive relief
or other equitable remedies.
(g) No consent, approval or authorization of or designation,
declaration or filing with any governmental authority on the part of the
Purchaser is required in connection with the valid execution and delivery
of this Agreement or the Warrant, or the purchase of the Shares, the
Warrant Shares or the Conversion Stock, or the consummation of any other
transaction contemplated hereby.
SECTION 4. [Reserved]
SECTION 5. PUBLIC FILINGS. The Purchaser hereby acknowledges receipt of the
Company's filings with the Securities and Exchange Commission pursuant to the
Securities Act of 1933 and the Securities Exchange Act.
SECTION 6. FURTHER ASSURANCES. The Purchaser shall, upon request of the
Company, execute and deliver any additional
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documents and take such further actions as may reasonably be deemed by the
Company to be necessary or desirable to carry out the provisions hereof.
SECTION 7. CONDITIONS TO CLOSING OBLIGATION OF PURCHASER. Purchaser's
obligation to purchase the Shares and the Warrant on the Initial Closing Date or
the Additional Closing Date, as applicable is, at the option of Purchaser,
subject to the fulfillment of the following conditions:
(a) The representations and warranties made by the Company in Section
2 hereof shall be true and correct when made, and shall be true and correct
as of the Initial Closing Date or the Additional Closing Date, as
applicable.
(b) All covenants, agreements and conditions contained in this
Agreement to be performed by the Company on or prior to the Initial Closing
Date or the Additional Closing Date, as applicable, shall have been
performed or complied with in all material respects.
(c) The Company shall have obtained all necessary Blue Sky law permits
and qualifications, or have the availability of exemptions therefrom,
required by any state for the offer and sale of the Shares and the issuance
of the Warrant.
(d) All necessary filings specifying the rights and privileges of the
Shares and the Warrant Shares shall have been filed with the Delaware
Secretary of State and other relevant government entitled.
(e) Since the date of this Agreement, there shall not have occurred
(i) a Material Adverse Change or (ii) any change or event which is
reasonably likely to have a Material Adverse Change, PROVIDED, however,
that in determining whether a Material Adverse Change has occurred, there
shall be excluded any matters disclosed by the Company in any SEC Document
filed prior to the date hereof. For the purpose of this Agreement, a
"Material Adverse Change" shall mean (i) a material adverse change in or
effect with respect to the business, operations, assets, properties,
financial condition, results of operations, regulatory condition or
prospects of the Company and any wholly-owned subsidiary of the Company
taken as a whole; or (ii) any impairment in any material respect of the
Company's ability to perform any of its obligations or agreements hereunder
to which it is a party or consummate the transactions contemplated hereby.
(f) All necessary approvals or waivers have been received by the
Company from the NYSE.
(g) The Company has complied with Section 14(c) of the Exchange Act as
described in Section 2(g) of this Agreement and all applicable waiting
periods have elapsed prior to the
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Initial Closing Date or Additional Closing Date, as applicable.
(h) The Company shall have taken all necessary action to amend the
Rights Agreement, dated as of June 21, 1996, between the Company and Xxxxx
Fargo Bank (the "RIGHTS AGREEMENT"), pursuant to which agreement the
Company issued preferred stock purchase rights to its stockholders on July
12, 1996 ("EXISTING RIGHTS"), each of which Existing Rights, when
exercisable, entitles the holder to purchase from the Company one
one-hundredth of a share of Series A Preferred Stock at a price of $100.00
(subject to anti-dilution adjustment) so as to prevent the Existing Rights
from becoming exercisable upon the consummation of the transactions
contemplated hereby.
(i) The Company shall have delivered to the Purchaser any required
consent, amendment, waiver or extension, in a form acceptable to Purchaser,
from any material provision in any material debt or securitization document
to which the Company (or any of its subsidiaries) is a party and which
material provision the Company has breached, or that the Company would
breach, on or before the Initial Closing.
(j) The Company shall have received an opinion from a nationally
recognized investment banking firm that the transactions contemplated in
this Agreement are fair, from a financial standpoint, to the Company and
its subsidiaries.
SECTION 8. CONDITIONS TO CLOSING OBLIGATION OF THE COMPANY. The Company's
obligation to sell the Shares and issue the Warrant to the Purchaser on the
Initial Closing Date or the Additional Closing Date, as applicable is, at the
option of the Company, subject to the fulfillment of the following conditions:
(a) The representations and warranties made by the Purchaser in
Section 3 hereof shall be true and correct when made, and shall be true and
correct as of the Initial Closing Date or the Additional Closing Date, as
applicable.
(b) All covenants, agreements and conditions contained in this
Agreement and the Warrant to be performed by the Purchaser on or prior to
the Initial Closing Date or the Additional Closing Date shall have been
performed or complied with in all material respects.
SECTION 9. NOTICES. All notices, requests, claims, demands and other
communications under this Agreement shall be in writing and sufficiently given
if delivered personally or sent by registered or certified mail, postage
prepaid, or overnight air courier service, or telecopy or facsimile transmission
(with hard copy to follow) to the parties at the following addresses (or at such
other address for a party as shall be specified by like notice): (i) if to the
Company, to Aames Financial Corporation,
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2 California Plaza, 000 Xxxxx Xxxxx Xxxxxx, Xxx Xxxxxxx, Xxxxxxxxxx 00000,
Attention: General Counsel, telecopy number (000) 000-0000; and (ii) if to the
Purchaser, care of Capital Z Partners, 00 Xxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000 or by telecopy to (000) 000-0000 with a copy to Xxxxxx Xxxxxxxx, Esq.,
Xxxxxxx Xxxx & Xxxxxxxxx, 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000-0000,
telecopy number (000) 000-0000.
SECTION 10. HEADINGS. The headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
SECTION 11. COUNTERPARTS; EFFECTIVENESS. This Agreement may be executed in
two or more counterparts, all of which shall be considered one and the same
agreement and shall become effective when one or more counterparts have been
signed by each of the Company and the Purchaser and delivered to the Company and
the Purchaser.
SECTION 12. ENTIRE AGREEMENT. This Agreement (including the documents and
instruments referred to herein) constitutes the entire agreement, and supersedes
all prior agreements and understandings, both written and oral, among the
parties with respect to the subject matter hereof.
SECTION 13. GOVERNING LAW. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware, without regard
to any applicable conflicts of law principles of such State.
SECTION 14. SUCCESSORS AND ASSIGNS. Except as otherwise provided herein,
the provisions hereof shall inure to the benefit of, and be binding upon, the
successors, permitted assigns and administrators of the parties hereto, neither
this Agreement nor any of the rights, interests or obligations under this
Agreement shall be assigned, in whole or in part, by operation of law or
otherwise, by any of the parties without the prior written consent of the other
parties. Any assignment in violation of the foregoing shall be void.
SECTION 15. ENFORCEMENT. Each party agrees that irreparable damage would
occur and that the other party hereto would not have any adequate remedy at law
in the event that any of the provisions of this Agreement were not performed in
accordance with their specific terms or were otherwise breached. It is
accordingly agreed that each party shall be entitled to an injunction or
injunctions to prevent breaches by the other party hereto of this Agreement and
to enforce specifically the terms and provisions of this Agreement in any court
of the United States located in the State of Delaware or in Delaware State
court, this being in addition to any other remedy to which they are entitled at
law or in equity. In addition, each of the parties hereto (i) consents to submit
such party to the personal jurisdiction of any Federal court located in the
State of
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Delaware or any Delaware State court in the event any dispute arises out of this
Agreement or any of the transactions contemplated hereby, (ii) agrees that such
party will not attempt to deny or defeat such personal jurisdiction by motion or
other request for leave from any such court and (iii) agrees that such party
will not bring any action relating to this Agreement or any of the transactions
contemplated hereby in any court other than a Federal court sitting in the State
of Delaware of in Delaware State court.
SECTION 16. SEVERABILITY. If any term or provision hereof, or the
application thereof to any circumstance, shall, to any extent, be held by a
court of competent jurisdiction to be invalid or unenforceable with respect to
such jurisdiction, and the remainder of the terms and provisions hereof, and the
application thereof to any other circumstance, shall remain in full force and
effect, shall not in any way be affected, impaired or invalidated, and shall be
enforced to the fullest extent permitted by law, and the parties hereto shall
reasonably negotiate in good faith a substitute term or provision that comes as
close as possible to the invalidated or unenforceable term or provision, and
that puts each party in a position as nearly comparable as possible to the
position each such party would have been in but for the finding of invalidity or
unenforceability, while remaining valid and enforceable.
SECTION 17. AMENDMENT; MODIFICATION; WAIVER. No amendment, modification or
waiver in respect of this Agreement shall be effective against any party unless
it shall be in writing and signed by such party.
SECTION 18. EXPENSES. The Company hereby agrees to pay or reimburse the
Purchaser and its affiliates for all reasonable out-of-pocket expenses
(including the reasonable fees and disbursements of legal counsel and investment
and other advisors and consultants and expenses) incurred in connection with the
transactions contemplated by this Agreement, whether incurred before or after
the date hereof and whether or not such transactions contemplated hereby are
made or effected. Any such amounts shall be paid or reimbursed promptly after
invoicing thereof by the Purchaser which invoicing shall be accompanied by
supporting detail evidencing such expenses.
SECTION 19. SURVIVAL. The representations, warranties, covenants and
agreements made herein by all parties hereto shall survive the closing of the
transactions contemplated hereby.
SECTION 20. WAIVERS. No delay or omission to exercise any right, power or
remedy accruing to any party hereto upon any breach or default of the other
party under this Agreement shall impair any such right, power or remedy, nor
shall it be construed to be a waiver of any such breach or default or
acquiescense therein; nor shall any waiver of any such breach or default be
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deemed a waiver of any other breach or default theretofore or thereunder
ocurring. Any waiver, permit, consent or approval of any kind or character on
the part of either party of any breach or default under this Agreement, or any
waiver of any part or any provision or conditions of this Agreement, must be in
writing and shall be effective only to the extent specifically set forth in such
writing.
[SIGNATURE PAGE TO FOLLOW]
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IN WITNESS WHEREOF, the Company, the Purchaser have caused this Agreement
to be duly executed and delivered as of the date first written above.
AAMES FINANCIAL CORPORATION
By: /s/ A. Xxx Xxxxxxxx
------------------------------
Name: A. Xxx Xxxxxxxx
Title: Chief Executive Officer
SPECIALTY FINANCE PARTNERS
By its General Partner
CAPITAL Z FINANCIAL SERVICES
FUND II, L.P.,
By its General Partner
CAPITAL Z PARTNERS, L.P.,
By its General Partner
CAPITAL Z PARTNERS, LTD.
By: /s/ Xxxx X. Xxxxx
------------------------------
Name: Xxxx X. Xxxxx
Title: Partner
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EXHIBIT A
CERTIFICATE OF INCORPORATION
OF
AAMES FINANCIAL CORPORATION
FIRST: The name of this corporation is Aames Financial Corporation (the
"Corporation").
SECOND: The address of the registered office of the Corporation in the
State of Delaware is 0000 Xxxxxx Xxxxxx, Xxxx xx Xxxxxxxxxx, Xxxxxx of New
Castle. The name of its registered agent at that address is The Corporation
Trust Company.
THIRD: The purpose of the Corporation is to engage in any lawful act or
activity for which a corporation may now or hereafter be organized under the
General Corporation Law of the State of Delaware as set forth in Title 8 to the
Delaware Code (the "GCL").
FOURTH: The total number of shares which the Corporation shall have
authority to issue is 8,000,000 consisting of 7,000,000 shares of common stock,
par value $0.001 per share (the "Common Stock"), and 1,000,000 shares of
preferred stock, par value $0.001 per share (the "Preferred Stock").
Shares of the Preferred Stock of the Corporation may be issued from time to
time in one or more classes or series, each of which class or series shall have
such distinctive designation or title as shall be fixed by the Board of
Directors of the Corporation (the "Board of Directors") prior to the issuance of
any shares thereof. Each such class or series of Preferred Stock shall have such
voting powers, full or limited, or no voting powers, and such preferences and
relative, participating, optional or other special rights and such
qualifications, limitations or restrictions thereof, as shall be stated in such
resolution or resolutions providing for the issue of such class or series of
Preferred Stock as may be adopted from time to time by the Board of Directors
prior to the issuance of any shares thereof pursuant to the authority hereby
expressly vested in it, all in accordance with the laws of the State of
Delaware.
FIFTH: All rights to vote and all voting power shall be vested in the
Common Stock and the holders thereof shall be entitled at all elections of
directors to one (1) vote per share. Special meetings of the stockholders for
any purpose or purposes may be called at any time only by the Board of
Directors, the Chairman of the Board or by the Chief Executive Officer or
President of the Corporation.
SIXTH: The directors of the Corporation shall be divided into three
classes, designated Class I, Class II and Class III. The term of the initial
Class I directors shall terminate on the date of the 1994 annual meeting of
stockholders; the term of the initial Class II directors shall terminate on the
date of the 1993 annual meeting of stockholders and the term of the initial
Class III directors shall terminate on the date of the 1992 annual meeting of
stockholders. At each annual
meeting of stockholders beginning in 1992, successors to the class of directors
whose term expires at that annual meeting shall be elected for a three-year
term. If the number of directors is changed, any increase or decrease shall be
apportioned among the classes so as to maintain the number of directors in each
class as nearly equal as reasonably possible, and any additional directors of
any class elected to fill a vacancy resulting from an increase in such class
shall hold office for a term that shall coincide with the remaining term of that
class, but in no case will a decrease in the number of directors shorten the
term of any incumbent directors. A director shall hold office until the annual
meeting for the year in which his term expires and until his successor shall be
elected and shall qualify, subject, however, to prior death, resignation,
retirement, disqualification or removal from office. Any vacancy on the Board of
Directors, howsoever resulting, shall be filled only by a majority of the
directors then in office, even if less than a quorum, or by a sole remaining
director and not by the stockholders. Any director elected to fill a vacancy
shall hold office for a term that shall coincide with the terms of the class to
which such director shall have been elected.
Subject to the rights, if any, of the holders of shares of Preferred Stock
then outstanding, any or all of the directors of the Corporation may be removed
from office at any time, for cause only, by the affirmative vote of the holders
of a majority of the outstanding shares of the Corporation then entitled to vote
generally in the election of directors, considered for purposes of this Article
SIXTH as one class.
Notwithstanding the foregoing, whenever the holders of any one or more
classes or series of Preferred Stock issued by the Corporation shall have the
right, voting separately by class or series, to elect directors at an annual or
special meeting of stockholders, the election, term of office, filling of
vacancies and other features of such directorships shall be governed by the
terms of this Certificate of Incorporation or the resolution or resolutions
adopted by the Board of Directors pursuant to the second paragraph of Article
FOURTH applicable thereto, and such directors so elected shall not be divided
into classes pursuant to this Article SIXTH unless expressly provided by such
terms.
SEVENTH: Elections of directors at an annual or special meeting of
stockholders need not be by written ballot unless the Bylaws of the Corporation
shall otherwise provide.
Any action required or permitted to be taken at any annual or special
meeting of stockholders may be taken only upon the vote of the stockholders at
an annual or special meeting duly noticed and called, as provided in the Bylaws
of the Corporation, and may not be taken by written consent of the stockholders
pursuant to the GCL.
EIGHTH: The officers of the Corporation shall be chosen in such a manner,
shall hold their offices for such terms and shall carry out such duties as are
determined solely by the Board of Directors, subject to the right of the Board
of Directors to remove any officer or officers at any time with or without
cause.
NINTH: (A) The Corporation shall indemnify to the full extent authorized or
permitted by law (as now or hereafter in effect) any person made, or threatened
to be made, a defendant or witness to any action, suit or proceeding (whether
civil or criminal or otherwise) by reason of the fact that he, his testator or
intestate, is or was a director or officer of the Corporation or by reason of
the fact that such director or officer, at the request of the Corporation, is or
was serving any other corporation, partnership, joint venture, trust, employee
benefit plan or enterprise, in any capacity. Nothing contained herein shall
affect any rights to indemnification to which employees other than directors and
officers may be entitled by law. No amendment or repeal of this Section A of
Article NINTH shall apply to or have any effect on any right to indemnification
provided hereunder with respect to any acts or omissions occurring prior to such
amendment or repeal.
(B) No director of the Corporation shall be personally liable to the
Corporation or its stockholders for monetary damages for any breach of fiduciary
duty by such a director as a director. Notwithstanding the foregoing sentence, a
director shall be liable to the extent provided by applicable law (i) for any
breach of the Director's duty of loyalty to the Corporation or its stockholders,
(ii) for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law, (iii) pursuant to Section 174 of the
GCL, or (iv) for any transaction from which such director derived an improper
personal benefit. No amendment to or repeal of this Section B of Article NINTH
shall apply to or have any effect on the liability or alleged liability of any
director of the Corporation for or with respect to any acts or omissions of such
director occurring prior to such amendment or repeal.
(C) In furtherance and not in limitation of the powers conferred by
statute:
(i) the Corporation may purchase and maintain insurance on behalf of any
person who is or was a director, officer, employee or agent of the Corporation,
or is serving at the request of the Corporation as a director, officer, employee
or agent of another corporation, partnership, joint venture, trust, employee
benefit plan or other enterprise against any liability asserted against him and
incurred by him in any such capacity, or arising out of his status as such,
whether or not the Corporation would have the power to indemnify against such
liability under the provisions of law; and
(ii) the Corporation may create a trust fund, grant a security interest
and/or use other means (including, without limitation, letters of credit, surety
bonds and/or other similar arrangements), as well as enter into contracts
providing indemnification to the full extent authorized or permitted by law and
including as part thereof provisions with respect to any or all of the foregoing
to ensure the payment of such amounts as may become necessary to effect
indemnification as provided therein, or elsewhere.
TENTH: In furtherance and not in limitation of the powers conferred by
statute, the Board of Directors is expressly authorized to adopt, repeal, alter,
amend or rescind the Bylaws of the Corporation.
ELEVENTH: The Corporation reserves the right to repeal, alter, amend or
rescind any provision contained in this Certificate of Incorporation, in the
manner now or hereafter prescribed by statute, and all rights conferred on
stockholders herein are granted subject to this reservation.
TWELFTH: The name and mailing address for the Incorporator of the
Corporation is as follows: Xxxxxxx X. Xxxxxx, 00000 Xxxxxxxx Xxxxxxxxx, Xxxxx
000, Xxx Xxxxxxx, Xxxxxxxxxx 00000-0000.
IN WITNESS WHEREOF, the undersigned has executed the Certificate of
Incorporation this 2nd day of October, 1991.
/s/ Xxxxxxx X. Xxxxxx
------------------------------
Xxxxxxx X. Xxxxxx
Incorporator
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
AAMES FINANCIAL CORPORATION, a corporation organized and existing under the
General Corporation Law of the State of Delaware,
DOES HEREBY CERTIFY:
FIRST: That a meeting of the Board of Directors of Aames Financial
Corporation (the "Corporation"), resolutions were duly adopted setting forth a
proposed amendment of the Certificate of Incorporation of the Corporation,
declaring the amendment to be advisable and calling a meeting of the
stockholders of the Corporation for consideration thereof. The resolution
setting forth the proposed amendment is as follows:
RESOLVED, that the Certificate of Incorporation of the Corporation be
amended by changing Article FOURTH to provide that the authorized number of
shares shall be 11,000,000, consisting of 10,000,000 shares of common
stock, par value $0.001 per shares, and 1,000,000 shares of preferred
stock, par value $0.001 per share.
SECOND: That thereafter, pursuant to resolution of its Board of Directors,
the annual meeting of the stockholders of the Corporation was duly called and
held, upon notice in accordance with Section 222 of the General Corporation Law
of the State of Delaware at which meeting the necessary number of shares as
required by statute were voted in favor of the amendment.
THIRD: That the amendment was duly adopted in accordance with the
provisions of Section 242 of the General Corporate law of the State of Delaware.
IN WITNESS WHEREOF, the Corporation has caused this certificate to be
signed by Xxxx X. Xxxxx, its Chief Executive Officer, and Xxxxxx X. Xxxxxxxxx,
its Secretary, this 25 day of April, 1994.
By: /s/ Xxxx X. Xxxxx
------------------------------
Chief Executive Officer
ATTEST: /s/ Xxxxxx X. Xxxxxxxxx
------------------------------
Secretary
CERTIFICATE OF AMENDMENT
TO THE
CERTIFICATE OF INCORPORATION
OF
AAMES FINANCIAL CORPORATION
(A DELAWARE CORPORATION)
The undersigned XXXX XXXXX and XXXXXX XXXXXXXXX, the President and
Secretary, respectively, of Aames Financial Corporation (the "Corporation"), a
corporation organized and existing under and by virtue of the General
Corporation Law of the State of Delaware (the "DGCL"), do hereby certify
pursuant to Section 103 of the DGCL:
The text of Article FOURTH of the Certificate of Incorporation of the
Corporation is hereby amended and restated to read in full as follows:
FOURTH: The total number of shares which the Corporation shall have
authority to issue is 51,000,000, consisting of 50,000,000 shares of common
stock, par value $0.001 per share (the "Common Stock") and 1,000,000 shares
of preferred stock, par value $0.001 per share (the "Preferred Stock").
IN WITNESS WHEREOF, the undersigned have executed this Certificate of
Amendment to the Certificate of Incorporation of the Corporation as of this 17th
day of January, 1996.
By: /s/ Xxxx X. Xxxxx
------------------------------
Xxxx X. Xxxxx, President
Secretary Attest: /s/ Xxxxxx X. Xxxxxxxxx, Secretary
----------------------------------
Xxxxxx X. Xxxxxxxxx, Secretary
CERTIFICATE OF DESIGNATION OF
RIGHTS, PREFERENCES AND PRIVILEGES OF
SERIES A PREFERRED STOCK
OF
AAMES FINANCIAL CORPORATION
Pursuant to Section 151 of the Delaware General Corporation law:
The undersigned hereby certifies that the following resolution has been
adopted by the Board of Directors of Aames Financial Corporation, a Delaware
corporation (the "Corporation") as required by Section 151 of the Delaware
General Corporation Law by unanimous written consent on June 21, 1996;
RESOLVED, that pursuant to the authority granted to and vested in the Board
of Directors of this Corporation (hereinafter called the "Board of
Directors") in accordance with the provisions of the Certificate of
Incorporation of the Corporation, the Board of Directors hereby creates a
new series of the previously authorized Preferred Stock, par value $0.001
per share (the "Preferred Stock") of the Corporation, and hereby states the
designation and number of shares, and fixes the, relative rights,
preferences and limitations thereof (in addition to any provision set forth
in the Certificate of Incorporation of the Corporation which are applicable
to the Preferred Stock of all classes and series) as follows:
Series A Preferred Stock:
Section 1. Designation and Amount. The shares of such series shall be
designated as "Series A Preferred Stock" (the "Series A Preferred Stock") and
the number of shares constituting the Series A Preferred Stock shall be 500,000
shares of Series A Preferred Stock, having a par value of $0.001 per share. Such
number of shares may be increased or decreased by resolution of the Board of
Directors; provided, that no decrease shall reduce the number of shares of
Series A Preferred Stock to a number less than the number of shares then
outstanding plus the number of shares reserved for issuance upon the exercise of
outstanding options, rights or warrants or upon the conversion of any
outstanding securities issued by the Corporation convertible into Series A
Preferred Stock.
Section 2. Dividends and Distributions
(a) Subject to the rights of the holders of any shares of any series of
Preferred Stock (or any similar stock) ranking prior and superior to the Series
A Preferred Stock with respect to dividends, the holders of shares of Series A
Preferred Stock, in preference to the holders of Common Stock, par value $0.001
per share (the "Common Stock"), of the Corporation, and of any other junior
stock, shall be entitled to receive, when, as and if declared by the Board of
Directors out of funds legally available for the purpose, (i) cash dividends in
an amount per whole share (rounded to the nearest cent) equal to the Formula
Number (as defined below) then in effect, times the aggregate per share amount
of all cash dividends declared or paid on the Common Stock, and (ii) a
preferential cash dividend (a "Preferential Dividend"), if any, on the first day
of July, October, January and April in each year (each such date being referred
to herein as a "Quarterly Dividend Payment Date"), commencing on the first
Quarterly Dividend Payment Date after the first issuance of a share or fraction
of a share of Series A Preferred Stock, in an amount per share (rounded to the
nearest cent) equal to $1.00 per share of Series A Preferred Stock less the per
share amount of all cash dividends declared on the Series A Preferred Stock
pursuant to clause (i) of this sentence since the immediately preceding
Quarterly Dividend Payment Date or, with respect to the first Quarterly Dividend
Payment Date, since the first issuance of any share or fraction of a share of
Series A Preferred Stock. In addition, if the Corporation shall pay any dividend
or make any distribution on the Common Stock payable in assets, securities or
other forms of noncash consideration (other than dividends or distributions
solely in shares of Common Stock), then, in each such case, the Corporation
shall simultaneously pay or make on each whole outstanding share of Series A
Preferred Stock, a dividend or distribution in like kind equal to the Formula
Number then in effect times such dividend or distribution on each share of the
Common Stock. The dividends and distributions on the Series A Preferred Stock to
which holders thereof are entitled pursuant to clause (i) of the first sentence
of this paragraph and the second sentence of this paragraph are hereinafter
referred to as "Participating Dividends." As used herein, the "Formula Number"
shall be 100; provided, however, that if at any time after June 21, 1996, the
Corporation shall (i) declare or pay any dividend or make any distribution on
the Common Stock, payable in shares of Common Stock, (ii) subdivide (by a stock
split or otherwise), the outstanding shares of Common Stock into a larger number
of shares of Common Stock, or (iii) combine (by a reverse stock split or
otherwise) the outstanding shares of Common Stock into a smaller number of
shares of Common Stock, then in each such case the Formula Number in effect
immediately prior to such event shall be adjusted to a number determined by
multiplying the Formula Number then in effect by a fraction, the numerator of
which is the number of shares of Common Stock outstanding immediately after such
event and the denominator of which is the number of shares of Common Stock that
were outstanding immediately prior to such event (and rounding the result to the
nearest whole number); and provided further, that, if at any time after June 21,
1996, the Corporation shall issue any shares of its capital stock in a merger,
reclassification, or change of the outstanding shares of Common Stock, then in
each such event the Formula Number shall be appropriately adjusted to reflect
such merger, reclassification, or change so that each share of Series A
Preferred Stock continues to be the economic equivalent of a Formula Number of
shares of Common Stock prior to such merger, reclassification or change.
(b) The Corporation shall declare each Participating Dividend immediately
prior to or at the same time it declares any cash or non-cash dividend or
distribution on the Common Stock in respect of which a Participating Dividend is
required to be paid. No cash or non-cash dividend or distribution on the Common
Stock in respect of which a Participating Dividend is required shall be paid or
set aside for payment on the Common Stock unless a Participating Dividend in
respect of such dividend shall have been paid.
(c) Dividends shall begin to accrue and be cumulative on outstanding shares
of Series A Preferred Stock from the Quarterly Dividend Payment Date next
preceding the date of issue of such shares, unless the date of issue of such
shares is prior to the record date for the first Quarterly Dividend Payment
Date, in which case dividends on such shares shall begin to accrue from the date
of issue of such shares, or unless the date of issue is a Quarterly Dividend
Payment Date or is a date after the record date for the determination of holders
of shares of Series A Preferred Stock entitled to receive a quarterly dividend
and before such Quarterly Dividend Payment Date, in either of which events such
dividends shall begin to accrue and be cumulative from such Quarterly Dividend
Payment Date. Accrued but unpaid dividends shall not bear interest. Dividends
paid on the shares of Series A Preferred Stock in an amount less than the total
amount of such dividends at the time accrued and payable on such shares shall be
allocated pro rata on a share-by-share basis among all such shares at the time
outstanding. The Board of Directors may fix a record date for the determination
of holders of shares of Series A Preferred Stock entitled to receive payment of
a dividend or distribution declared thereon, which record date shall be not more
than 60 days prior to the date fixed for the payment thereof.
Section 3. Voting Rights. The holders of shares of Series A Preferred Stock
shall have the following voting rights:
(a) Each holder of Series A Preferred Stock shall be entitled to a number
of votes equal to the Formula Number then in effect, for each share of Series A
Preferred Stock held of record on each matter on which holders of the Common
Stock or stockholders generally are entitled to vote, multiplied by the maximum
number of votes per share which any holder of the Common Stock or stockholders
generally then have with respect to such matter (assuming any holding period or
other requirement to vote a greater number of shares is satisfied).
(b) Except as otherwise provided herein, in any other Certificate of
Amendment creating a series of Preferred Stock or any similar stock, or by law,
the holders of shares of Series A Preferred Stock and the holders of shares of
Common Stock and any other capital stock of the Corporation having general
voting rights shall vote together as one class on all matters submitted to a
vote of stockholders of the Corporation.
(c) Except as set forth herein, or as otherwise provided by law, holders of
Series A Preferred Stock shall have no special voting rights and their consent
shall not be required (except
to the extent they are entitled to vote with holders of Common Stock as set
forth herein) for taking any corporate action.
Section 4. Certain Restrictions.
(a) Whenever Preferential Dividends or Participating Dividends are in
arrears or the Corporation shall be in default in payment thereof, thereafter
and until all accrued and unpaid Participating Dividends and Preferential
Dividends, whether or not declared, on shares of Series A Preferred Stock
outstanding shall have been paid or set aside for payment in full, the
Corporation shall not:
(i) declare or pay dividends, or make any other distributions on or redeem
or purchase or otherwise acquire for consideration any shares of stock ranking
junior (either as to dividends or upon liquidation, dissolution or winding up)
to the Series A Preferred Stock;
(ii) declare or pay dividends, or make any other distributions, on the
shares of stock ranking on a parity (either as to dividends or upon liquidation,
dissolution or winding up) with the Series A Preferred Stock, except dividends
paid ratably on the Series A Preferred Stock and all such parity stock on which
dividends are payable or in arrears in proportion to the total amounts to which
the holders of all such shares are then entitled;
(iii) redeem or purchase or otherwise acquire for consideration shares of
any stock ranking junior or on a parity (either as to dividends or upon
liquidation, dissolution or winding up) to or with the Series A Preferred Stock,
provided that the Corporation may at any time redeem, purchase or otherwise
acquire shares of any such junior or parity stock in exchange for shares of any
stock of the Corporation ranking junior (either as to dividends or upon
dissolution, liquidation or winding up) to the Series A Preferred Stock; or
(iv) redeem or purchase or otherwise acquire for consideration shares of
Series A Preferred Stock, or any shares of stock ranking on a parity with the
Series A Preferred Stock, except in accordance with a purchase offer made in
writing or by publication (as determined by the Board of Directors) to all
holders of such shares upon such terms as the Board of Directors, after
consideration of the respective annual dividend rates and other relative rights
and preferences of the respective series and classes, shall determine in good
faith will result in fair and equitable treatment among the respective series or
classes.
(b) The Corporation shall not permit any subsidiary of the Corporation to
purchase or otherwise acquire for consideration any shares of stock of the
Corporation unless the Corporation could, under paragraph (a) of this Section 4,
purchase or otherwise acquire such shares at such time and in such manner.
Section 5. Reacquired Shares. Any shares of Series A Preferred Stock
purchased or otherwise acquired by the Corporation in any manner whatsoever
shall be retired and canceled promptly after the acquisition thereof. All such
shares shall upon their cancellation become authorized but unissued shares of
Preferred Stock and may be reissued as part of a new series of Preferred Stock
subject to the conditions and restrictions on issuance set forth herein, in the
Certificate of Incorporation, or in any other Certificate of Amendment or
Certificate of Designation creating a series of Preferred Stock or any similar
stock or as otherwise required by law.
Section 6. Liquidation, Dissolution or Winding Up. Upon any voluntary or
involuntary liquidation, dissolution or winding up of the Corporation, no
distribution shall be made (a) to the holders of shares of stock ranking junior
(either as to dividends or upon liquidation, dissolution or winding up) to the
Series A Preferred Stock unless, prior thereto, the holders of shares of Series
A Preferred Stock shall have received an amount equal to the accrued and unpaid
dividends and distributions thereon, whether or not declared, to the date of
such payment, plus an amount equal to the greater of (i) $0.01 per whole share,
or (ii) an aggregate amount per share equal to the Formula Number then in effect
times the aggregate amount to be distributed per share to holders of Common
Stock, or (b) to the holders of shares of stock ranking on a parity (either as
to dividends or upon liquidation, dissolution or winding up) with the Series A
Preferred Stock, unless simultaneously therewith distributions are made ratably
on the Series A Preferred Stock and all such parity stock in proportion to the
total amounts to which the holders of Series A Preferred Stock shares are
entitled under clause (a)(i) of this sentence and to which the holders of such
parity shares are entitled in each case upon such liquidation, dissolution or
winding up.
Section 7. Consolidation, Merger, etc. If the Corporation shall enter into
any consolidation, merger, combination or other transaction in which the shares
of Common Stock are exchanged for or changed into other stock or securities,
cash and/or any other property, then in any such case each share of Series A
Preferred Stock shall at the same time be similarly exchanged or changed into an
amount per share equal to the Formula Number then in effect times the aggregate
amount of stock, securities, cash and/or any other property (payable in kind),
as the case may be, into which or for which each share of Common Stock is
changed or exchanged. In the event that both this Section 7 and Section 2 appear
to apply to a transaction, this Section 7 shall control.
Section 8. Effective Time of Adjustments.
(a) Adjustments to the Series A Preferred Stock required by the provisions
hereof shall be effective as of the time at which the event requiring such
adjustments occurs.
(b) The Corporation shall give prompt written notice to each holder of a
share of Series A Preferred Stock of the effect on any such shares of any
adjustment to the dividend rights or rights upon liquidation, dissolution or
winding up of the Corporation required by the provisions hereof. Notwithstanding
the foregoing sentence, the failure of the Corporation to give such notice shall
not affect the validity of or the force or effect of or the requirement for such
adjustment.
Section 9. No Redemption. The shares of Series A Preferred Stock shall not
be redeemable.
Section 10. Rank. Unless otherwise provided in the Certificate of
Incorporation or a Certificate of Designation relating to a subsequent series of
Preferred Stock of the Corporation, the Series A Preferred Stock shall rank,
with respect to the payment of dividends and the distribution of assets, junior
to all series of any other class of the Corporation's Preferred Stock.
Section 11. Fractional Shares. The Series A Preferred Stock shall be
issuable upon exercise of the Rights issued pursuant to the Rights Agreement in
whole shares or in any fraction of a share that is one one-hundredth (1/100th)
of a share or any integral multiple of such fraction which shall entitle the
holder, in proportion to such holder's fractional shares, to receive dividends,
exercise voting rights, participate in distributions and to have the benefit of
all other rights of holders of Series A Preferred Stock. In lieu of fractional
shares, the Corporation, prior to the first issuance of a share or a fraction of
a share of Series A Preferred Stock, may elect (1) to make a cash payment as
provided in the Rights Agreement for fractions of a share other than one
one-hundredth (1/100th) of a share or any integral multiple thereof, or (2) to
issue depository receipts evidencing such authorized fraction of a share of
Series A Preferred Stock pursuant to an appropriate agreement between the
Corporation and a depository selected by the Corporation; provided that such
agreement shall provide that the holders of such depository receipts shall have
the rights, privileges and preferences to which they are entitled as holders of
the Series A Preferred Stock.
Section 12. Amendment. The Certificate of Incorporation of the Corporation
shall not be amended in any manner which would materially alter or change the
powers, preferences or special rights of the Series A Preferred Stock so as to
affect them adversely without the affirmative vote of the holders of at least
two-thirds of the outstanding shares of Series A Preferred Stock, voting
together as a single class.
IN WITNESS WHEREOF, AAMES FINANCIAL CORPORATION has caused this Certificate
to be signed and attested this 21st day of June, 1996.
/s/ Xxxx X. Xxxxx
------------------------------
Xxxx X. Xxxxx,
Chief Executive Officer
Attest:
/s/ Xxxxx Xxxxxxxxx
------------------------------
Xxxxx Xxxxxxxxx, Secretary
CERTIFICATE OF CORRECTION
FILED TO CORRECT A CERTAIN ERROR IN THE
CERTIFICATE OF AMENDMENT OF
AAMES FINANCIAL CORPORATION
Aames Financial Corporation, a corporation organized and existing under and
by virtue of the General Corporation Law of the State of Delaware, does hereby
certify:
1. The name of the corporation is Aames Financial Corporation.
2. That a Certificate of Amendment was filed by the Secretary of State of
Delaware on January 19, 1996 and that said Certificate requires correction as
permitted by Section 103 of the General Corporation Law of the State of
Delaware.
3. The inaccuracy or defect of said Certificate to be corrected is as
follows: the second paragraph of Article FOURTH was inadvertently deleted.
4. Article FOURTH of said Certificate is corrected to read in its entirety
as follows:
FOURTH: The total number of shares which the Corporation shall have
authority to issue is 51,000,000, consisting of 50,000,000 shares of common
stock, par value $0.001 per share (the "Common Stock") and 1,000,000 shares
of preferred stock, par value $0.001 per share (the "Preferred Stock").
Shares of the Preferred Stock of the Corporation may be issued from time to
time in one or more classes or series, each of which class or series shall
have such distinctive designation or title as shall be fixed by the Board
of Directors of the Corporation (the "Board of Directors") prior to the
issuance of any shares thereof. Each such class or series of Preferred
Stock shall have such voting powers, full or limited, or no voting powers,
and such preferences and relative, participating, optional or other special
rights and such qualifications, limitations or restrictions thereof, as
shall be stated in such resolution or resolutions providing for the issue
of such class or series of Preferred Stock as may be adopted from time to
time by the Board of Directors prior to the issuance of any shares thereof
pursuant to the authority hereby expressly vested in it, all in accordance
with the laws of the State of Delaware.
Aames Financial Corporation has caused this Certificate of Correction to be
signed by Xxxxxxx X. Xxxxxx, its authorized officer, this 26th day of August,
1997.
By: /s/ Xxxxxxx X. Xxxxxx
------------------------------
Xxxxxxx X. Xxxxxx
Executive Vice President,
General Counsel and Secretary
--------------------------------------------------------------------------------
CERTIFICATE OF THE VOTING POWERS, DESIGNATIONS,
PREFERENCES AND RELATIVE, PARTICIPATING, OPTIONAL
OR OTHER SPECIAL RIGHTS, AND QUALIFICATIONS,
LIMITATIONS OR RESTRICTIONS THEREOF, OF
SERIES B CONVERTIBLE PREFERRED STOCK OF
AAMES FINANCIAL CORPORATION
--------------------------------------------------------------------------------
AAMES FINANCIAL CORPORATION, a corporation organized and existing under the
General Corporation Law of the State of Delaware (the "Corporation"), hereby
certifies that the following resolutions were adopted by the Board of Directors
of the Corporation (the "Board of Directors") pursuant to authority of the Board
of Directors as required by Section 151 of the Delaware General Corporation Law:
RESOLVED, that pursuant to the authority granted to and vested in the Board
of Directors in accordance with the provisions of the Certificate of
Incorporation of the Corporation, as amended (the "Certificate of
Incorporation"), the Board of Directors hereby creates a series of the
Corporation's previously authorized preferred stock, par value $0.001 per share
(the "Preferred Stock"), and hereby states the designation and number thereof,
and fixes the voting powers, preferences and relative, participating, optional
and other special rights, and the qualifications, limitations and restrictions
thereof, as follows:
SERIES B CONVERTIBLE PREFERRED STOCK:
I. DESIGNATION AND AMOUNT
The designation of this series of shares shall be "Series B Convertible
Preferred Stock" (the "Series B Preferred Stock") par value $0.001 per share;
the initial stated value per share shall be $1,000.00 (the "Initial Stated
Value"); and the number of shares constituting such series shall be 100,000. The
number of shares of the Series B Preferred Stock may be decreased from time to
time by a resolution or resolutions of the Board of Directors; provided,
however, that such number shall not be decreased below the aggregate number of
shares of the Series B Preferred Stock then outstanding.
II. RANK
A. With respect to dividends, the Series B Preferred Stock shall rank (i)
senior to each other class or series of Preferred Stock, except for the Series C
Convertible Preferred Stock, par value $0.001 per share, of the Corporation (the
"Series C Preferred Stock"); (ii) on a parity with the Series C Preferred Stock;
and (iii) senior to the Corporation's Common Stock, par value $.001 per share
(the "Common Stock"), and, except as specified above, all other classes and
series of capital stock of the Corporation hereafter issued by the Corporation.
With respect to dividends, all equity securities of the Corporation to which the
Series B Preferred Stock ranks senior, including the Common Stock, are
collectively referred to herein as the
"Junior Dividend Securities"; all equity securities of the Corporation with
which the Series B Preferred Stock ranks on a parity, including the Series C
Preferred Stock, are collectively referred to herein as the "Parity Dividend
Securities"; and all equity securities of the Corporation (other than
convertible debt securities) to which the Series B Preferred Stock ranks junior,
with respect to dividends, are collectively referred to herein as the "Senior
Dividend Securities."
B. With respect to the distribution of assets upon liquidation, dissolution
or winding up of the Corporation, whether voluntary or involuntary, the Series B
Preferred Stock shall rank (i) senior to each other class or series of Preferred
Stock of the Corporation, except for the Series C Preferred Stock; (ii) on a
parity with the Series C Preferred Stock; and (iii) senior to the Common Stock,
and, except as specified above, all other classes and series of capital stock of
the Corporation hereafter issued by the Corporation. With respect to the
distribution of assets upon liquidation, dissolution or winding up of the
Corporation, whether voluntary or involuntary, all equity securities of the
Corporation to which the Series B Preferred Stock ranks senior, including the
Common Stock, are collectively referred to herein as "Junior Liquidation
Securities"; all equity securities of the Corporation (other than convertible
debt securities) to which the Series B Preferred Stock ranks on parity,
including the Series C Preferred Stock, are collectively referred to herein as
"Parity Liquidation Securities"; and all equity securities of the Corporation to
which the Series B Preferred Stock ranks junior are collectively referred to
herein as "Senior Liquidation Securities."
C. The Series B Preferred Stock shall be subject to the creation of Junior
Dividend Securities and Junior Liquidation Securities (collectively, "Junior
Securities"), but no Parity Dividend Securities or Parity Liquidation Securities
(collectively, "Parity Securities") (other than the Series C Preferred Stock) or
Senior Dividend Securities or Senior Liquidation Securities (collectively,
"Senior Securities") shall be created except in accordance with the terms
hereof.
III. DIVIDENDS
A. DIVIDENDS. Subject to the terms of paragraph D below, shares of Series B
Preferred Stock shall accumulate dividends at a rate of 6.5% per annum (the
"Dividend Rate"), which dividends shall be paid quarterly in cash, in four equal
quarterly installments on the last day of March, June, September and December of
each year, or if any such date is not a Business Day, the Business Day next
preceding such day (each such date, regardless of whether any dividends have
been paid or declared and set aside for payment on such date, a "Dividend
Payment Date"), to holders of record (the "Registered Holders") as they appear
on the stock record books of the Corporation on the fifteenth day prior to the
relevant Dividend Payment Date; provided, however, that during the Accrual
Period (as defined in Article IX hereof) the Corporation shall have the option
to accrue such dividends, which dividends, to the extent so accrued, shall
compound quarterly. Prior to the consummation of the Recapitalization, dividends
shall accrue and accumulate on the Initial Stated Value of each share of Series
B Preferred Stock. Following the consummation of the Recapitalization, dividends
shall accrue and accumulate on the Post-Recapitalization Stated Value of each
share of Series B Preferred Stock. Dividends shall be paid only when, as and if
declared by the Board of Directors out of funds at the time
legally available for the payment of dividends. Dividends shall begin to
accumulate on outstanding shares of Series B Preferred Stock from the date of
issuance and shall be deemed to accumulate from day to day whether or not earned
or declared until paid. Dividends shall accumulate on the basis of a 360-day
year consisting of twelve 30-day months (four 90-day quarters) and the actual
number of days elapsed in the period for which payable.
B. ACCUMULATION. Dividends on the Series B Preferred Stock shall be
cumulative, and from and after (i) any Dividend Payment Date on which any
dividend that has accumulated or been deemed to have accumulated through such
date has not been paid in full (other than by reason of the election of the
Corporation to accrue dividends during the Accrual Period); or (ii) any payment
date set for a redemption on which such redemption payment has not been paid in
full, additional dividends shall accumulate in respect of the amount of such
unpaid dividends or unpaid redemption payment (the "Arrearage") at 125% of the
stated dividend rate (or such lesser rate as may be the maximum rate that is
then permitted by applicable law). Such additional dividends in respect of any
Arrearage shall be deemed to accumulate from day to day whether or not earned or
declared until the Arrearage is paid, shall be calculated as of such successive
Dividend Payment Date, and shall constitute an additional Arrearage from and
after any Dividend Payment Date to the extent not paid on such Dividend Payment
Date. References in any Article herein to dividends that have accumulated or
that have been deemed to have accumulated with respect to the Series B Preferred
Stock shall include the amount, if any, of any Arrearage together with any
dividends accumulated or deemed to have accumulated on such Arrearage pursuant
to the immediately preceding two sentences. Additional dividends in respect of
any Arrearage may be declared and paid at any time, in whole or in part, without
reference to any regular Dividend Payment Date, to Registered Holders as they
appear on the stock record books of the Corporation on such record date as may
be fixed by the Board of Directors (which record date shall be no less than 10
days prior to the corresponding payment date). Dividends in respect of any
Arrearage shall be paid in cash.
C. METHOD OF PAYMENT. Dividends paid on the shares of Series B Preferred
Stock in an amount less than the total amount of such dividends at the time
accumulated and payable on all outstanding shares of Series B Preferred Stock
shall be allocated pro rata on a share-by-share basis among all such shares then
outstanding. After the Second Anniversary Date, dividends that are declared and
paid in an amount less than the full amount of dividends accumulated on the
Series B Preferred Stock (and on any Arrearage) shall be applied first to the
earliest dividend which has not theretofore been paid. All cash payments of
dividends on the shares of Series B Preferred Stock shall be made in such coin
or currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts.
D. SPECIAL DIVIDEND RIGHTS.
1. In addition to the dividend rights set forth in paragraph A above, prior
to the consummation of the Recapitalization, the holders of shares of Series B
Preferred Stock shall be entitled to receive, when, as and if declared by the
Board of Directors out of funds legally available for such purpose, cash
dividends in an amount per whole share (rounded to the nearest cent) equal to
the Formula Number then in effect times the aggregate per share amount of all
cash dividends declared or paid on the Common Stock. If, prior to the
consummation of the Recapitalization, the Corporation shall pay any dividend or
make any distribution on the Common Stock payable in assets, securities or other
forms of non-cash consideration, then, in each such case, the Corporation shall
simultaneously pay or make on each whole outstanding share of the Series B
Preferred Stock a dividend or distribution in like kind equal to the Formula
Number then in effect times such dividend or distribution on each share of the
Common Stock. The dividends and distributions on the Series B Preferred Stock
pursuant to this paragraph are hereinafter referred to as "Participating
Dividends." The Corporation shall declare each Participating Dividend
immediately prior to or at the same time it declares any cash or non-cash
dividend or distribution on the Common Stock in respect of which a Participating
Dividend is required to be paid. No cash or non-cash dividend or distribution on
the Common Stock in respect of which a Participating Dividend is required shall
be paid or set aside for payment on the Common Stock unless a Participation
Dividend in respect of such dividend shall be have been paid. Nothing contained
in this paragraph D shall obligate the Company to declare or pay any dividend or
other distribution on the Common Stock or (except pursuant to paragraph A of
this Article III or in connection with a dividend or distribution on the Common
Stock as provided in this paragraph D) the Series B Preferred Stock.
2. If the Recapitalization is not consummated prior to June 30, 1999, the
Dividend Rate shall be deemed to be 15% per annum during the period commencing
on such date and ending on the date the Recapitalization is consummated.
IV. LIQUIDATION PREFERENCE
A. PRIOR TO THE RECAPITALIZATION. In the event of a liquidation,
dissolution or winding up of the Corporation, whether voluntary or involuntary,
occurring prior to the consummation of the Recapitalization, the holders of
then-outstanding shares of Series B Preferred Stock shall be entitled to receive
out of the assets of the Corporation, whether such assets are capital or surplus
of any nature, an amount per share equal to the sum of (i) the dividends, if
any, accumulated or deemed to have accumulated thereon, to the date of final
distribution to such holders, whether or not such dividends are declared; and
(ii) the Initial Stated Value thereof, before any payment shall be made or any
assets distributed to the holders of any Junior Liquidation Securities (the
"Initial Preferred Distribution"). After the Initial Preferred Distribution has
been made, the holders of Series B Preferred Stock shall be entitled to share
pro rata with the holders of Common Stock in the distribution of any remaining
assets of the Corporation on the basis of each whole outstanding share of the
Series B Preferred Stock receiving an amount equal to the Formula Number then in
effect times such distribution on each share of the Common Stock. The
distributions on the Series B Preferred Stock pursuant to the immediately
preceding sentence of this paragraph A are hereinafter referred to as
"Participating Liquidation Distributions." No distribution on the Common Stock
in respect of which a Participating Liquidation Distribution is required shall
be paid or set aside for payment on the Common Stock unless a Participating
Liquidation Distribution in respect of such distribution is concurrently paid.
B. AFTER THE RECAPITALIZATION. Subsequent to the consummation of the
Recapitalization, the holders of the outstanding shares of Series B Preferred
Stock shall be entitled to receive out of the assets of the Corporation, whether
such assets are capital or surplus of any nature, an amount per share equal to
the sum of (i) the dividends, if any, accumulated or deemed to have accumulated
thereon to the date of final distribution to such holders, whether or not such
dividends are declared; and (ii) the Post-Recapitalization Stated Value thereof,
before any payment shall be made or any assets distributed to the holders of any
Junior Liquidation Securities. After any such payment in full after the
consummation of the Recapitalization, the holders of Series B Preferred Stock
shall not, as such, be entitled to any further participation in any distribution
of assets of the Corporation.
C. PARITY SECURITIES. All the assets of the Corporation available for
distribution to stockholders after the liquidation preferences of any Senior
Liquidation Securities shall be distributed ratably (in proportion to the full
distributable amounts to which holders of Series B Preferred Stock and Parity
Liquidation Securities, if any, are respectively entitled upon such dissolution,
liquidation or winding up) among the holders of the then-outstanding shares of
Series B Preferred Stock and Parity Liquidation Securities, if any, when such
assets are not sufficient to pay in full the aggregate amounts payable thereon.
D. MERGER NOT A LIQUIDATION. Neither a consolidation or merger of the
Corporation with or into any other Person or Persons, nor a sale, conveyance,
lease, exchange or transfer of all or part of the Corporation's assets for cash,
securities or other property to a Person or Persons shall be deemed to be a
liquidation, dissolution or winding up of the Corporation for purposes of this
Article IV, but the holders of shares of Series B Preferred Stock shall
nevertheless be entitled from and after any such consolidation, merger or sale,
conveyance, lease, exchange or transfer of all or part of the Corporation's
assets to the rights provided by this Article IV following any such transaction.
Notice of any voluntary or involuntary liquidation, dissolution or winding up of
the Corporation, stating the payment date or dates when, and the place or places
where, the amounts distributable to each holder of shares of Series B Preferred
Stock in such circumstances shall be payable, shall be given by first-class
mail, postage prepaid, mailed not less than 30 days prior to any payment date
stated therein, to holders of record as they appear on the stock record books of
the Corporation as of the date such notices are first mailed.
V. REDEMPTION
A. INTENTIONALLY OMITTED
B. OPTIONAL REDEMPTION. Commencing on the earlier to occur of (x) the tenth
anniversary of the Issue Date and (y) the date on which fewer than 25% of the
shares of Series B Preferred Stock issued on the Issue Date remain outstanding,
and at all times thereafter, the Corporation may, at its option, redeem all (but
not less than all) outstanding shares of Series B Preferred Stock on a date
specified by the Corporation (the "Optional Redemption Date") by paying the
Redemption Price therefor in cash out of funds legally available for such
purpose.
C. NOTICE AND REDEMPTION PROCEDURES. Notice of the redemption of shares of
Series B Preferred Stock pursuant to paragraph B of this Article V (a "Notice of
Redemption")
shall be sent to the holders of record of the shares of Series B Preferred Stock
to be redeemed by first class mail, postage prepaid, at each such holder's
address as it appears on the stock record books of the Corporation not more than
120 nor fewer than 90 days prior to the Optional Redemption Date, which date
shall be set forth in such notice (the "Redemption Date"); provided that failure
to give such Notice of Redemption to any holder, or any defect in such Notice of
Redemption to any holder shall not affect the validity of the proceedings for
the redemption of any shares of Series B Preferred Stock held by any other
holder. In order to facilitate the redemption of shares of Series B Preferred
Stock, the Board of Directors may fix a record date for the determination of the
holders of shares of Series B Preferred Stock to be redeemed not more than 30
days prior to the date the Notice of Redemption is mailed. On or after the
Optional Redemption Date, each holder of the shares called for redemption shall
surrender the certificate evidencing such shares to the Corporation at the place
designated in such notice and shall thereupon be entitled to receive payment of
the Redemption Price for such shares. From and after the Optional Redemption
Date, all dividends on shares of Series B Preferred Stock shall cease to
accumulate and all rights of the holders thereof as holders of Series B
Preferred Stock shall cease and terminate, except to the extent the Corporation
shall default in payment thereof on the Optional Redemption Date.
D. DEPOSIT OF FUNDS. The Corporation shall, on or prior to the Optional
Redemption Date, pursuant to paragraph C of this Article V, deposit with its
transfer agent or other redemption agent in the Borough of Manhattan, The City
of New York having a capital and surplus of at least $500,000,000 selected by
the Board of Directors, as a trust fund for the benefit of the holders of the
shares of Series B Preferred Stock to be redeemed, cash that is sufficient in
amount to redeem the shares to be redeemed in accordance with the Notice of
Redemption, with irrevocable instructions and authority to such transfer agent
or other redemption agent to pay to the respective holders of such shares, as
evidenced by a list of such holders certified by an officer of the Corporation,
the Redemption Price for such shares upon surrender of their respective share
certificates. Such deposit shall be deemed to constitute full payment of the
Redemption Price for such shares to the holders, and from and after the date of
such deposit, all rights of the holders of the shares of Series B Preferred
Stock that are to be redeemed as stockholders of the Corporation with respect to
such shares, except the right to receive the Redemption Price upon the surrender
of their respective certificates, shall cease and terminate. No dividends shall
accumulate on any shares of Series B Preferred Stock after the Optional
Redemption Date for such shares (unless the Corporation shall fail to deposit
cash sufficient to redeem all such shares). In case holders of any shares of
Series B Preferred Stock called for redemption shall not, within two years after
such deposit, claim the cash deposited for redemption thereof, such transfer
agent or other redemption agent shall, upon demand, pay over to the Corporation
the balance so deposited. Thereupon, such transfer agent or other redemption
agent shall be relieved of all responsibility to the holders thereof and the
sole right of such holders, with respect to shares to be redeemed, shall be to
receive the Redemption Price as general creditors of the Corporation. Any
interest accrued on any funds so deposited shall belong to the Corporation, and
shall be paid to it from time to time on demand.
VI. RESTRICTIONS ON DIVIDENDS
So long as any shares of the Series B Preferred Stock are outstanding, the
Board of Directors shall not declare, and the Corporation shall not pay or set
apart for payment any dividend on any Junior Securities or make any payment on
account of, or set apart for payment money for a sinking or other similar fund
for, the repurchase, redemption or other retirement of, any Junior Securities or
Parity Securities or any warrants, rights or options exercisable for or
convertible into any Junior Securities or Parity Securities (other than the
repurchase, redemption or other retirement of debentures or other debt
securities that are convertible or exchangeable into any Junior Securities or
Parity Securities), or make any distribution in respect of the Junior
Securities, either directly or indirectly, and whether in cash, obligations or
shares of the Corporation or other property (other than distributions or
dividends in Junior Securities to the holders of Junior Securities), and shall
not permit any corporation or other entity directly or indirectly controlled by
the Corporation to purchase or redeem any Junior Securities or Parity Securities
or any warrants, rights, calls or options exercisable for or convertible into
any Junior Securities or Parity Securities (other than the repurchase,
redemption or other retirement of debentures or other debt securities that are
convertible or exchangeable into any Junior Securities or Parity Securities or
the repurchase, redemption or other retirement of Junior Securities or Parity
Securities in exchange for Junior Securities or Parity Securities) unless prior
to or concurrently with such declaration, payment, setting apart for payment,
repurchase, redemption or other retirement or distribution, as the case may be,
all accumulated and unpaid dividends on shares of the Series B Preferred Stock
not paid on the dates provided for in paragraph A of Article III hereof
(including Arrearages and accumulated dividends thereon) shall have been paid,
except that when dividends are not paid in full as aforesaid upon the shares of
Series B Preferred Stock, all dividends declared on the Series B Preferred Stock
and any series of Parity Dividend Securities shall be declared and paid pro rata
so that the amount of dividends so declared and paid on Series B Preferred Stock
and such series of Parity Dividend Securities shall in all cases bear to each
other the same ratio that accumulated dividends (including interest accrued on
or additional dividends accumulated in respect of such accumulated dividends) on
the shares of Series B Preferred Stock and such Parity Dividend Securities bear
to each other.
VII. VOTING RIGHTS
A. On or prior to the consummation of the Recapitalization, the holders of
Series B Preferred Stock shall be entitled to one thousand (1,000) votes per
share of Series B Preferred Stock at each meeting of stockholders of the
Corporation with respect to any and all matters presented to the stockholders of
the Corporation for their action and consideration. After the consummation of
the Recapitalization, the holders of Series B Preferred Stock shall be entitled
to the number of votes per share of Series B Preferred Stock equal to the number
of shares of Common Stock for which such share of Series B Preferred Stock is
then convertible pursuant to Article VIII at each meeting of stockholders of the
Corporation with respect to any and all matters presented to the stockholders of
the Corporation for their action and consideration.
B. So long as any shares of the Series B Preferred Stock are outstanding,
(i) each share of Series B Preferred Stock shall entitle the holder thereof to
vote on all matters voted on by holders of Common Stock; and (ii) the shares of
Series B Preferred Stock shall vote together with shares of Common Stock (and
any shares of Series C Preferred Stock entitled to vote) as a single class.
C. At each annual meeting of the stockholders of the Corporation, the
holders of Series B Preferred Stock, voting as a separate class, shall have the
right to elect, by the written consent (if action by written consent is
permitted) or affirmative vote of the holders of a majority of the outstanding
shares of Series B Preferred Stock, four members of a separate class of
directors, each of whom shall serve until the next annual meeting of the
stockholders of the Corporation or until his or her successor is elected and
qualified. Such vote or consent shall be taken in accordance with the procedures
specified in paragraph F below. The initial directors shall be Xxxxxx X.
Xxxxxxxxxx, Xxxx X. Xxxxx, Xxxx Xxxxxxx and Xxxxx Xxxxxx.
D. Without the written consent (if action by written consent is permitted)
or affirmative vote of the holders of a majority of the outstanding shares of
Series B Preferred Stock and Series C Preferred Stock, voting together as a
single class, the Corporation shall not (i) authorize, create or issue, or
increase the authorized amount of, (x) any Senior Securities or Parity
Securities or (y) any class or series of capital stock or any security
convertible into or exercisable for any class or series of capital stock,
redeemable mandatorily or redeemable at the option of the holder thereof or (ii)
enter into any Transaction (as defined in paragraph H of Article VIII). Such
vote or consent shall be taken in accordance with the procedures specified in
paragraph F below.
E. Without the written consent (if action by written consent is permitted)
or affirmative vote of the holders of at least a majority of the outstanding
shares of Series B Preferred Stock and Series C Preferred Stock, voting together
as a single class, the Corporation shall not (i) amend, alter or repeal any
provision of the Certificate of Incorporation or the Bylaws, if the amendment,
alteration or repeal alters or changes the powers, preferences or special rights
of the Series B Preferred Stock so as to affect them materially and adversely or
(ii) authorize or take any other action if such action alters or changes any of
the rights of the Series B Preferred Stock in any respect or otherwise would be
inconsistent with the provisions of this Certificate of Designations and the
holders of any class or series of the capital stock of the Corporation is
entitled to vote thereon. Such vote or consent shall be taken in accordance with
the procedures specified in paragraph F below.
F. The foregoing rights of holders of shares of Series B Preferred Stock to
take any actions as provided in this Article VII may be exercised at any annual
meeting of stockholders or at a special meeting of stockholders held for such
purpose as hereinafter provided or at any adjournment thereof, or by the written
consent, delivered to the Secretary of the Corporation, of the holders of the
minimum number of shares required to take such action, if action by written
consent of stockholders of the Corporation is then permitted.
The Chairman of the Board of the Corporation may call, and upon written request
of holders of record of 35% of the outstanding shares of Series B Preferred
Stock, if the holders of Series B Preferred Stock are to vote separately as a
single class, or the holders of record of 35% of the outstanding shares of
Series B Preferred Stock and Series C Preferred Stock, if the holders of shares
of Series B Preferred Stock are to vote as a class with the holders of shares of
any Series C Preferred Stock, addressed to the Secretary of the Corporation at
the principal office of the Corporation shall call, a special meeting of the
holders of shares entitled to vote as provided herein. Such meeting shall be
held within 30 days after delivery of such request to the Secretary, at the
place and upon the notice provided by law and in the By-laws of the Corporation
for the holding of meetings of stockholders.
At each meeting of stockholders at which the holders of shares of Series B
Preferred Stock shall have the right, voting separately as a single class or as
a class with the holders of shares of any Series C Preferred Stock, to elect
directors of the Corporation as provided in paragraph C above or to take any
action, the presence in person or by proxy of the holders of record of one-third
of the total number of shares of Series B Preferred Stock, if the holders of
shares of Series B Preferred Stock are to vote separately as a single class, or
the holders of record of one-third of the total number of shares of Series B
Preferred Stock and Series C Preferred Stock, if the holder of shares of Series
B Preferred Stock are to vote as a class with the holders of shares of Series C
Preferred Stock, then outstanding and entitled to vote on the matter shall be
necessary and sufficient to constitute a quorum. At any such meeting or at any
adjournment thereof:
(A) the absence of a quorum of the holders of shares of Series B Preferred
Stock, if the holders of Series B Preferred Stock are to vote separately as
a single class, shall not prevent the election of directors other than
those to be elected by the holders of shares of Series B Preferred Stock,
and the absence of a quorum of the holders of shares of any other class or
series of capital stock shall not prevent the election of directors to be
elected by the holders of shares of Series B Preferred Stock or the taking
of any action as provided in this Article VII; and
(B) in the absence of a quorum of the holders of shares of Series B
Preferred Stock, if the holders of Series B Preferred Stock are to vote
separately as a single class, or the holders of shares of Series B
Preferred Stock and Series C Preferred Stock, if the holders of Series B
Preferred Stock are to vote as a class with the holders of shares of Series
C Preferred Stock, a majority of the holders of such shares present in
person or by proxy shall have the power to adjourn the meeting as to the
actions to be taken by the holders of shares of Series B Preferred Stock or
the holders of Series B Preferred Stock and Series C Preferred Stock, as
the case may be, from time to time and place to place without notice other
than announcement at the meeting until a quorum shall be present.
For taking of any action as provided in this Article VII by the holders of
shares of Series B Preferred Stock voting separately as a single class or
together with the holders of shares of Series B Preferred Stock and Series C
Preferred Stock as a single class, as the case may be, each such holder shall
have one vote for each share of such stock standing in his name on the
transfer books of the Corporation as of any record dated fixed for such purpose
or, if no such date be fixed, at the close of business on the Business Day next
preceding the day on which notice is given, or if notice if waived, at the close
of business on the Business Day next preceding the day on which the meeting is
held.
In case any vacancy shall occur among the directors elected by the holders
of shares of Series B Preferred Stock, as provided in paragraph C above, such
vacancy may be filled for the unexpired portion of the term by vote of the
remaining directors theretofore elected by such holders (if there is a remaining
director), or the last remaining director's successor in office. If any such
vacancy is not so filled within 20 days after the creation thereof or if all
directors so elected by the holders of Series B Preferred Stock shall cease to
serve as directors before their terms shall expire, the holders of the Series B
Preferred Stock then outstanding and entitled to vote for such directors may, by
written consent as herein provided (if action by written consent is permitted),
or at a special meeting of such holders called as provided herein, elect
successors to hold office for the unexpired terms of the directors whose places
shall be vacant.
Any director elected by the holders of shares of Series B
Preferred Stock voting separately as a single class may be removed from office
with or without cause by the vote or written consent (if action by written
consent is permitted) of the holders of at least a majority of the outstanding
shares of Series B Preferred Stock. A special meeting of the holders of shares
of Series B Preferred Stock may be called in accordance with the procedures set
forth in this paragraph F.
G. The Corporation shall not enter into any agreement or issue any security
that prohibits, conflicts or is inconsistent with, or would be breached by, the
Corporation's performance of its obligations hereunder.
VIII. CONVERSION
The holders of the Series B Preferred Stock shall have conversion rights as
follows:
A. Each share of Series B Preferred Stock shall be convertible at the
direction of, and by notice to the Corporation from, the holders of a
majority of the outstanding shares of Series B Preferred Stock, at any
time, at the office of the Corporation or any transfer agent for such
Series, into one thousand (1,000) fully paid and nonassessable shares
of Common Stock subject (x) to adjustment from time to time as
provided below (as so adjusted, the "conversion ratio") and (y) (prior
to the consummation of the Recapitalization) to limitations resulting
from the available number of shares of Common Stock which may be
reserved for issuance upon such conversion, provided ,that any
conversion pursuant to this paragraph A of less than all of the
outstanding shares of Series B Preferred Stock shall be on a pro rata
basis amongst all holders of Series B Preferred Stock. After
consummation of the Recapitalization, the number "1,000" in this
paragraph shall be "1", subject to adjustment as provided in paragraph
VIII.G.
B. If the holders of a majority of the outstanding shares of Series B
Preferred Stock give notice of conversion under paragraph A above, the
Corporation shall notify all other record holders of Series B
Preferred Stock (a "Conversion Notice"). Following receipt of a
Conversion Notice, the holders of Series B Preferred Stock shall
surrender the certificate or certificates therefor duly endorsed, at
the office of the Corporation or of any transfer agent for such
Series, and shall state therein the name or names in which the
certificate or certificates for shares of Common Stock are to be
issued. The Corporation shall, as soon as practicable thereafter,
issue and deliver at such office to such holder, or to the nominee or
nominees of such holder, a certificate or certificates for the number
of shares of Common Stock to which such holder shall be entitled as
aforesaid. Such conversion shall be deemed to have been made
immediately prior to the close of business on the date of such
Conversion Notice and the person or persons entitled to receive the
shares of Common Stock issuable upon such conversion shall be treated
for all purposes as the recordholder or holders of such shares of
Common Stock as of such date. The issuance of certificates or shares
of Common Stock upon conversion of shares of Series B Preferred Stock
shall be made without charge for any issue, stamp or other similar tax
in respect of such issuance.
C. No fractional shares shall be issued upon conversion of any shares of
Series B Preferred Stock and the number of shares of Common Stock to
be issued shall be rounded down to the nearest whole share, and the
holder of Series B Preferred Stock shall be paid in cash for any
fractional share.
D. In case at any time or from time to time the Corporation shall pay any
dividend or make any other distribution to the holders of its Common
Stock or other class of securities, or shall offer for subscription
pro rata to the holders of its Common Stock or other class of
securities any additional shares of stock of any class or any other
right, or there shall be any capital reorganization or
reclassification of the Common Stock of the Corporation or
consolidation or merger of the Corporation with or into another
corporation, or any sale or conveyance to another corporation of the
property of the Corporation as an entirety or substantially as an
entirety, or there shall be a voluntary or involuntary dissolution,
liquidation or winding up of the Corporation, then, in any one or more
of said cases the Corporation shall give at least 20 days' prior
written notice (the time of mailing of such notice shall be deemed to
be the time of giving thereof) to the registered holders of the Series
B Preferred Stock at the addresses of each as shown on the books of
the Corporation maintained by the Transfer Agent thereof of the date
on which (i) the books of the Corporation shall close or a record
shall be taken for such stock dividend,
distribution or subscription rights or (ii) such reorganization,
reclassification, consolidation, merger, sale or conveyance,
dissolution, liquidation or winding up shall take place, as the case
may be, provided that in the case of any Transaction to which
paragraph H applies the Corporation shall give at least 30 days' prior
written notice as aforesaid. Such notice shall also specify the date
as of which the holders of the Common Stock of record shall
participate in said dividend, distribution or subscription rights or
shall be entitled to exchange their Common Stock for securities or
other property deliverable upon such reorganization, reclassification,
consolidation, merger, sale or conveyance or participate in such
dissolution, liquidation or winding up, as the case may be. Failure to
give such notice shall not invalidate any action so taken.
E. From and after the Recapitalization, the Corporation shall at all
times reserve and keep available out of its authorized but unissued
shares of Common Stock, solely for the purpose of effecting the
conversion of the shares of Series B Preferred Stock, such number of
its shares of Common Stock as shall from time to time be sufficient to
effect the conversion of all outstanding shares of Series B Preferred
Stock, and if at any time the number of authorized but unissued shares
of Common Stock shall not be sufficient to effect the conversion of
all then outstanding shares of Series B Preferred Stock, then in
addition to such other remedies as shall be available to the holder of
Series B Preferred Stock, the Corporation will take such corporate
action as may, in the opinion of its counsel, be necessary to increase
its authorized but unissued shares of Common Stock to such number of
shares as shall be sufficient for such purposes.
F. Any notice required by the provisions of paragraph D to be given the
holders of shares of Series B Preferred Stock shall be deemed given if
sent by facsimile transmission, by telex, or if deposited in the
United States mail, postage prepaid, and addressed to each holder of
record at his, her or its address appearing on the books of the
Corporation.
G. The conversion ratio shall be subject to adjustment from time to time
as follows:
(i) In case the Corporation shall at any time or from time to
time after the Issue Date (A) pay a dividend or make a distribution,
on the outstanding shares of Common Stock in shares of Common Stock,
(B) subdivide the outstanding shares of Common Stock into a larger
number of shares of Common Stock, (C) combine the outstanding shares
of Common Stock into a smaller number of shares or (D) issue by
reclassification of the shares of Common Stock any shares of capital
stock of the Corporation, then, and in each such case, the conversion
ratio in effect immediately prior to such event or the record date
therefor, whichever is earlier, shall be adjusted so that the holder
of any shares of Series B Preferred Stock thereafter surrendered for
conversion shall be entitled to receive the number of shares of Common
Stock or other securities of the Corporation which such holder would
have owned or have been entitled to receive after the happening of any
of the events described above, had such shares of Series B Preferred
Stock been surrendered for conversion immediately prior to the
happening of such event or the record date therefor, whichever is
earlier. An adjustment made pursuant to this clause (i) shall become
effective (x) in the case of any such dividend or distribution,
immediately after the close of business on the record date for the
determination of holders of shares of Common Stock
entitled to receive such dividend or distribution, or (y) in the
case of any such subdivision, reclassification or combination, at
the close of business on the day upon which such corporate action
becomes effective.
(ii) In the case the Corporation shall, after the Issue
Date, issue shares of Common Stock at a price per share, or
securities convertible into or exchangeable for shares of Common
Stock ("Convertible Securities") having a "Conversion Price" (as
defined below) less than the Current Market Price (for a period
of 15 consecutive trading days prior to such date), then, and in
each such case, the conversion ratio shall be adjusted so that
the holder of each share of Series B Preferred Stock shall be
entitled to receive, upon the conversion thereof, the number of
shares of Common Stock determined by multiplying (A) the
applicable conversion ratio on the day immediately prior to such
date by (B) a fraction, the numerator of which shall be the sum
of (1) the number of shares of Common Stock outstanding on the
date on which such shares or Convertible Securities are issued
and (2) the number of additional shares of Common Stock issued,
or into which the Convertible Securities may convert, and the
denominator of which shall be the sum of (x) the number of shares
of Common Stock outstanding on such date and (y) the number of
shares of Common Stock which the aggregate consideration
receivable by the Corporation for the total number of 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 Market price
on such date. An adjustment made pursuant to this clause (ii)
shall be made on the next Business Day following the date on
which any such issuance is made and shall be effective
retroactively immediately after the close of business on such
date. For purposes of this clause (ii), the aggregate
consideration receivable by the Corporation in connection with
the issuance of any securities shall be deemed to be the sum of
the aggregate offering price to the public (before deduction of
underwriting discounts or commissions and expenses payable to
third parties), and the "Conversion Price" of any Convertible
Securities is the total amount received or receivable by the
Corporation as consideration for the issue or sale of such
Convertible Securities (before deduction of underwriting
discounts or commissions and expenses payable to third parties)
plus the minimum aggregate amount of additional consideration, if
any, payable to the Corporation upon the conversion, exchange or
exercise of any such Convertible Securities. Neither (A) the
issuance of any shares of Common Stock (whether treasury shares
or newly issued shares) pursuant to a dividend or distribution
on, or subdivision, combination or reclassification of, the
outstanding shares of Common Stock requiring an adjustment in the
conversion ratio pursuant to clause (i) of this paragraph G, or
pursuant to any employee benefit plan or program of the
Corporation or pursuant to any option, warrant, right, or
Convertible Security outstanding as of the date hereof
(including, but not limited to, the Rights, the Series B
Preferred Stock, the Series C Preferred Stock and the Warrants)
nor (B) the issuance of shares of Common Stock pursuant thereto
shall be deemed to
constitute an issuance of Common Stock or Convertible Securities
by the Corporation to which this clause (ii) applies. Upon
expiration of any Convertible Securities which shall not have
been exercised or converted and for which an adjustment shall
have been made pursuant to this clause (ii), the Conversion Price
computed upon the original issue thereof shall upon expiration be
recomputed as if the only additional shares of Common Stock
issued were such shares of Common Stock (if any) actually issued
upon exercise or conversion of such Convertible Securities and
the consideration received therefor was the consideration
actually received by the Corporation for the issue of such
Convertible Securities (whether or not exercised or converted)
plus the consideration actually received by the Corporation upon
such exercise of conversion.
(iii) In case the Corporation shall at any time or from time
to time after the Issue Date declare, order, pay or make a
dividend or other distribution (including, without limitation,
any distribution of stock or other securities or property or
rights or warrants to subscribe for securities of the Corporation
or any of its Subsidiaries by way of dividend or spin-off), on
its Common Stock, other than (A) regular quarterly dividends
payable in cash in an aggregate amount not to exceed 15% of net
income from continuing operations before extraordinary items of
the Corporation, determined in accordance with generally accepted
accounting principles, during the period (treated as one
accounting period) commencing on July 1, 1998, and ending on the
date such dividend is paid or (B) dividends or distributions of
shares of Common Stock which are referred to in clause (i) of
this paragraph G, then, and in each such case, the conversion
ratio shall be adjusted so that the holder of each share of
Series B Preferred Stock shall be entitled to receive, upon the
conversion thereof, the number of shares of Common Stock
determined by multiplying (1) the applicable conversion ratio on
the day immediately prior to the record date fixed for the
determination of stockholders entitled to receive such dividend
or distribution by (2) a fraction, the numerator of which shall
be the then Current Market Price per share of Common Stock for
the period of 20 Trading Days preceding such record date, and the
denominator of which shall be such Current Market Price per share
of Common Stock for the period of 20 Trading Days preceding such
record date, less the Fair Market Value (as defined in Article
IX) per share of Common Stock (as determined in good faith by the
Board of Directors of the Corporation, a certified resolution
with respect to which shall be mailed to each holder of shares of
Series B Preferred Stock) of such dividend or distribution;
provided, however, that in the event of a distribution of shares
of capital stock of a Subsidiary of the Corporation (a
"Spin-Off") made to holders of shares of Common Stock, the
numerator of such fraction shall be the sum of the Current Market
Price per share of Common Stock for the period of 20 Trading Days
preceding the 35th Trading Day after the effective date of such
Spin-Off and the Current Market Price of the number of shares (or
the fraction of a share) of capital stock of the Subsidiary which
is
distributed in such Spin-Off in respect of one share of Common
Stock for the period of 20 Trading Days preceding such 35th
Trading Day and the denominator of which shall be the current
market price per share of the Common Stock for the period of 20
Trading Days proceeding such 35th Trading Day. An adjustment made
pursuant to this clause (iii) shall be made upon the opening of
business on the next Business Day following the date on which any
such dividend or distribution is made and shall be effective
retroactively immediately after the close of business on the
record date fixed for the determination of stockholders entitled
to receive such dividend or distribution; provided, however, if
the proviso to the preceding sentence applies, then such
adjustment shall be made and be effective as of such 35th Trading
Day after the effective date of such Spin-Off.
(iv) For purposes of this paragraph G, the number of shares
of Common Stock at any time outstanding shall not include any
shares of Common Stock then owned or held by or for the account
of the Corporation.
(v) The term "dividend", as used in this paragraph G shall
mean a dividend or other distribution upon stock of the
Corporation except pursuant to the Rights Agreement (as defined
in Article IX). Notwithstanding anything in this Article VIII to
the contrary, the conversion ratio shall not be adjusted as a
result of any dividend, distribution or issuance of securities of
the Corporation pursuant to the Rights Agreement.
(vi) Anything in this paragraph G to the contrary
notwithstanding, the Corporation shall not be required to give
effect to any adjustment in the conversion ratio unless and until
the net effect of one or more adjustments (each of which shall be
carried forward), determined as above provided, shall have
resulted in a change of the conversion ratio by at least
one-hundredth of one share of Common Stock, and when the
cumulative net effect of more than one adjustment so determined
shall be to change the conversion ratio by at least one-hundredth
of one share of Common Stock, such change in conversion ratio
shall thereupon be given effect.
(vii) The certificate of any firm of independent public
accountants of recognized standing selected by the Board of
Directors of the Corporation (which may be the firm of
independent public accountants regularly employed by the
Corporation) shall be presumptively correct for any computation
made under this paragraph G.
(viii) If the Corporation shall take a record of the holders
of its Common Stock for the purpose of entitling them to receive
a dividend or other distribution, and shall thereafter and before
the distribution to stockholders thereof legally abandon its plan
to pay or deliver such dividend or distribution, then thereafter
no adjustment in the number of shares of Common Stock issuable
upon exercise of
the right of conversion granted by this paragraph G or in the
conversion ratio then in effect shall be required by reason of
the taking of such record.
(ix) There shall be no adjustment of the conversion ratio in
case of the issuance of any stock of the Corporation in a merger,
reorganization, acquisition or other similar transaction except
as set forth in paragraph G(i), G(ii) and H of this Article VIII.
H. In case of any reorganization or reclassification of outstanding
shares of Common Stock (other than a reclassification covered by
paragraph G(i) of this Article VIII, or in case of any consolidation
or merger of the Corporation with or into another corporation, or in
the case of any sale or conveyance to another corporation of the
property of the Corporation as an entirety or substantially as an
entirety (each of the foregoing being referred to as a "Transaction"),
each share of Series B Preferred Stock then outstanding shall
thereafter be convertible into, in lieu of the Common Stock issuable
upon such conversion prior to consummation of such Transaction, the
kind and amount of shares of stock and other securities and property
receivable (including cash) upon the consummation of such Transaction
by a holder of that number of shares of Common Stock into which one
share of Series B Preferred Stock was convertible immediately prior to
such Transaction (including, on a pro rata basis, the cash, securities
or property received by holders of Common Stock in any tender or
exchange offer that is a step in such Transaction). In case securities
or property other than Common Stock shall be issuable or deliverable
upon conversion as aforesaid, then all reference in this paragraph H
shall be deemed to apply, so far as appropriate and as nearly as may
be, to such other securities or property.
I. Upon any adjustment of the conversion ratio then in effect and any
increase or decrease in the number of shares of Common Stock issuable
upon the operation of the conversion set forth in Article VIII, then,
and in each such case, the Corporation shall promptly deliver to the
registered holders of the Series B Preferred and Common Stock, a
certificate signed by the President or a Vice President and by the
Treasurer or an Assistant Treasurer or the Secretary or an Assistant
Secretary of the Corporation setting forth in reasonable detail the
event requiring the adjustment and the method by which such adjustment
was calculated and specifying the conversion ratio then in effect
following such adjustment and the increased or decreased number of
shares issuable upon the conversion set forth in this Article VIII.
IX. ADDITIONAL DEFINITIONS
For the purposes of this Certificate of Designations of Series B Preferred
Stock, the following terms shall have the meanings indicated:
"Accrual Period" means the end of the first quarterly period following the
Second Anniversary Date.
"Beneficially Own" with respect to any securities means having "beneficial
ownership" of such securities (as determined pursuant to Rule 13d-3 under the
Exchange Act as in effect on the date hereof, except that a Person shall be
deemed to Beneficially Own all such securities that such Person has the right to
acquire whether such right is exercisable immediately or after the passage of
time). The terms "Beneficial Ownership" and "Beneficial Owner" have correlative
meanings.
"Business Day" means any day, other than a Saturday, Sunday or a day on
which banking institutions in the State of New York are authorized or obligated
by law or executive order to close.
"Bylaws" means the Bylaws of the Corporation, as amended.
"Current Market Price", when used with reference to shares of Common Stock
or other securities on any date, shall mean the closing price per share of
Common Stock or such other securities on such date and, when used with reference
to shares of Common Stock or other securities for any period shall mean the
average of the daily closing prices per share of Common Stock or such other
securities for such period. The closing price for each day shall be the last
sale price, regular way, or, in case no such sale takes place on such day, the
average of the closing bid and asked prices, regular way, in either case as
reported in the principal consolidated transaction reporting system with respect
to securities listed or admitted to trading on the New York Stock Exchange or,
if the Common Stock or such other securities are not listed or admitted to
trading on the New York Stock Exchange, as reported in the principal
consolidated transaction reporting system with respect to securities listed on
the principal national securities exchange on which the Common Stock or such
other securities are listed or admitted to trading or, if the Common Stock is
not listed or admitted to trading on any national securities exchange, the last
quoted sale price or, if not so quoted, the average of the high bid and low
asked prices in the over-the-counter market, as reported by the National
Association of Securities Dealers, Inc. National Market System or such other
securities are not quoted by any such organization, the average of the closing
bid and asked prices as furnished by a professional market maker making a market
in the Common Stock or such other securities selected by the Board of Directors
of the Corporation. If the Common Stock or such other securities are not
publicly held or so listed or publicly traded, "Current Market Price" shall mean
the Fair Market Value per share of Common Stock or of such other securities as
determined in good faith by the Board of Directors of the Corporation based on
an opinion of an independent investment banking firm with an established
national reputation as a valuer of securities, which opinion may be based on
such assumption as such firm shall deem to be necessary and appropriate.
"Equity Securities" of any Person means any and all common stock, preferred
stock and any other class of capital stock of, and any partnership or limited
liability company interests of such Person or any other similar interests of any
Person that is not a corporation, partnership or limited liability company.
"Exchange Act" means the U.S. Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder, from time to time.
"Fair Market Value" shall mean the amount which a willing buyer would pay a
willing seller in an arm's-length transaction.
"Formula Number" shall mean one thousand (1,000) prior to consummation of
the Recapitalization, provided, however, that if at any time prior to the
consummation of the Recapitalization, the Corporation shall (i) declare or pay
any dividend or make any distribution on the Common Stock, payable in shares of
Common Stock; (ii) subdivide (by a stock split or otherwise) the outstanding
shares of Common Stock into a larger number of shares of Common Stock; or (iii)
combine (by a reverse stock split or otherwise) the outstanding shares of Common
Stock into a smaller number of shares of Common Stock, then in each such case
the Formula Number in effect immediately prior to such event shall be adjusted
to a number determined by multiplying the Formula Number then in effect by a
fraction, the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is the
number of shares of Common Stock that were outstanding immediately prior to such
event (and rounding the result to the nearest whole number); and provided
further, that, if prior to the consummation of the Recapitalization the
Corporation shall issue any shares of its capital stock in a merger,
reclassification, or change of the outstanding shares of Common Stock, then in
each such event the Formula Number shall be appropriately adjusted to reflect
such merger, reclassification, or change so that each share of Series B
Preferred Stock continues to be the economic equivalent of a Formula Number of
shares of Common Stock immediately prior to such merger, reclassification, or
change.
"Group" has the meaning set forth in Rule 13d-5 under the Exchange Act.
"Issue Date" shall mean the first date on which shares of Series B
Preferred Stock are issued.
"Person" means any individual, corporation, company, association,
partnership, joint venture, trust or unincorporated organization, or a
government or any agency or political subdivision thereof.
"Post-Recapitalization Stated Value" shall be equal to $1.00.
"Recapitalization" means the amendment of the Corporation's Certificate of
Incorporation to increase the authorized shares of Common Stock from 50,000,000
to 400,000,000, and the authorized shares of Preferred Stock from 1,000,000 to
200,000,000, and the subsequent one thousand-for-one split of Series B Preferred
Stock and Series C Preferred Stock.
"Redemption Price" of a share of Class B Preferred Stock shall mean the sum
of (a) the dividends, if any, accumulated or deemed to have accumulated thereon
to the Optional Redemption Date, whether or not such dividends are declared plus
(b) either (i) the Initial Stated Value thereof (if the Recapitalization has not
been consummated prior to June 30, 1999) or (ii) the Post-Recapitalization
Stated Value thereof (if the Recapitalization has been consummated prior to June
30, 1999), in each case subject to adjustment for splits, reclassifications,
recombinations or other similar events.
"Rights" shall mean any rights to purchase securities of the Corporation
issued pursuant to any Rights Agreement.
"Rights Agreement" shall mean the Rights Agreement, dated as of June 21,
1996, between the Company and Xxxxx Fargo Bank as rights agent, and all
amendments, supplements and replacements thereof.
"Second Anniversary Date" means the second anniversary of the Issue Date.
"Subsidiary" means, as to any Person, any other Person of which more than
50% of the shares of the Voting Securities or other voting interests are owned
or controlled, or the ability to select or elect 50% or more of the directors or
similar managers is held, directly or indirectly, by such first Person and one
or more of its Subsidiaries.
"Trading Day" means a day on which the principal national securities
exchange on which the Common Stock is listed or admitted to trading is open for
the transaction of business or, if the Common Stock is not listed or admitted to
trading on any national securities exchange a Business Day.
"Voting Securities" means, (i) with respect to the Company, the Equity
Securities of the Company entitled to vote generally for the election of
directors of the Company, and (ii) with respect to any other Person, any
securities of or interests in such Person entitled to vote generally for the
election of directors or any similar managing person of such Person.
X. MISCELLANEOUS
A. NOTICES. Any notice referred to herein shall be in writing and, unless
first-class mail shall be specifically permitted for such notices under the
terms hereof, shall be deemed to have been given upon personal delivery thereof,
upon transmittal of such notice by telecopy (with confirmation of receipt by
telecopy or telex) or five days after transmittal by registered or certified
mail, postage prepaid, addressed as follows:
(i) if to the Corporation, to its office at 2 California Plaza, 000 Xxxxx
Xxxxx Xxxxxx, Xxx Xxxxxxx, Xxxxxxxxxx 00000 (Attention: General
Counsel) or to the transfer agent for the Series B Preferred Stock;
(ii) if to a holder of the Series B Preferred Stock, to such holder at the
address of such holder as listed in the stock record books of the
Corporation (which may include the records of any transfer agent for
the Series B Preferred Stock); or
(iii) to such other address as the Corporation or such holder, as the case
may be, shall have designated by notice similarly given.
B. REACQUIRED SHARES. Any shares of Series B Preferred Stock redeemed,
purchased or otherwise acquired by the Corporation, directly or indirectly, in
any manner whatsoever shall be retired and canceled promptly after the
acquisition thereof (and shall not be deemed to be outstanding for any purpose)
and, if necessary to provide for the lawful redemption or purchase of such
shares, the capital represented by such shares shall be reduced in accordance
with the Delaware General Corporation Law. All such shares of Series B Preferred
Stock shall upon their cancellation and upon the filing of an appropriate
certificate with the Secretary of State of the State of Delaware, become
authorized but unissued shares of Preferred Stock, par value $0.001 per share,
of the Corporation and may be reissued as part of another series of Preferred
Stock, par value $0.001 per share, of the Corporation subject to the conditions
or restrictions on issuance set forth herein.
C. ENFORCEMENT. Any registered holder of shares of Series B Preferred Stock
may proceed to protect and enforce its rights and the rights of such holders by
any available remedy by proceeding at law or in equity to protect and enforce
any such rights, whether for the specific enforcement of any provision in this
Certificate of Designations or in aid of the exercise of any power granted
herein, or to enforce any other proper remedy.
D. TRANSFER TAXES. Except as otherwise agreed upon pursuant to the terms of
this Certificate of Designations, the Corporation shall pay any and all
documentary, stamp or similar issue or transfer taxes and other governmental
charges that may be imposed under the laws of the United States of America or
any political subdivision or taxing authority thereof or therein in respect of
any issue or delivery of Common Stock on conversion of, or other securities or
property issued on account of, shares of Series B Preferred Stock pursuant
hereto or certificates representing such shares or securities. The Corporation
shall not, however, be required to pay any such tax or other charge that may be
imposed in connection with any transfer involved in the issue or transfer and
delivery of any certificate for Common Stock or other securities or property in
a name other than that in which the shares of Series B Preferred Stock so
exchanged, or on account of which such securities were issued, were registered
and no such issue or delivery shall be made unless and until the Person
requesting such issue has paid to the Corporation the amount of any such tax or
has established to the satisfaction of the Corporation that such tax has been
paid or is not payable.
E. TRANSFER AGENT. The Corporation may appoint, and from time to time
discharge and change, a transfer agent for the Series B Preferred Stock. Upon
any such appointment or discharge of a transfer agent, the Corporation shall
send notice thereof by first-class mail, postage prepaid, to each holder of
record of shares of Series B Preferred Stock.
F. RECORD DATES. In the event that the Series B Preferred Stock shall be
registered under either the Securities Act of 1933, as amended, or the Exchange
Act, the Corporation shall establish appropriate record dates with respect to
payments and other actions to be made with respect to the Series B Preferred
Stock.
IN WITNESS WHEREOF, this Certificate of Designations is executed on behalf
of the Corporation by its Executive vice President, General Counsel and
Secretary and attested by its Assistant Secretary, this 10th day of February ,
1999.
AAMES FINANCIAL CORPORATION
By: /s/ Xxxxxxx X. Xxxxxx
------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Executive Vice President, General
Counsel and Secretary
[Corporate Seal]
ATTEST:
/s/ Xxxx X. Xxxxxx, Xx.
------------------------------
Xxxx X. Xxxxxx Xx.
Assistant Secretary
--------------------------------------------------------------------------------
CERTIFICATE OF THE VOTING POWERS, DESIGNATIONS,
PREFERENCES AND RELATIVE, PARTICIPATING, OPTIONAL
OR OTHER SPECIAL RIGHTS, AND QUALIFICATIONS,
LIMITATIONS OR RESTRICTIONS THEREOF, OF
SERIES C CONVERTIBLE PREFERRED STOCK OF
AAMES FINANCIAL CORPORATION
--------------------------------------------------------------------------------
AAMES FINANCIAL CORPORATION, a corporation organized and existing under the
General Corporation Law of the State of Delaware (the "Corporation"), hereby
certifies that the following resolutions were adopted by the Board of Directors
of the Corporation (the "Board of Directors") pursuant to authority of the Board
of Directors as required by Section 151 of the Delaware General Corporation Law:
RESOLVED, that pursuant to the authority granted to and vested in the Board
of Directors in accordance with the provisions of the Certificate of
Incorporation of the Corporation, as amended (the "Certificate of
Incorporation"), the Board of Directors hereby creates a series of the
Corporation's previously authorized preferred stock, par value $0.001 per share
(the "Preferred Stock"), and hereby states the designation and number thereof,
and fixes the voting powers, preferences and relative, participating, optional
and other special rights, and the qualifications, limitations and restrictions
thereof, as follows:
SERIES C CONVERTIBLE PREFERRED STOCK:
I. DESIGNATION AND AMOUNT
The designation of this series of shares shall be "Series C Convertible
Preferred Stock" (the "Series C Preferred Stock") par value $0.001 per share;
the initial stated value per share shall be $1,000.00 (the "Initial Stated
Value"); and the number of shares constituting such series shall be 100,000. The
number of shares of the Series C Preferred Stock may be decreased from time to
time by a resolution or resolutions of the Board of Directors; provided,
however, that such number shall not be decreased below the aggregate number of
shares of the Series C Preferred Stock then outstanding.
II. RANK
A. With respect to dividends, the Series C Preferred Stock shall rank (i)
senior to each other class or series of Preferred Stock, except for the Series B
Convertible Preferred Stock, par value $0.001 per share, of the Corporation (the
"Series B Preferred Stock"); (ii) on a parity with the Series B Preferred Stock;
and (iii) senior to the Corporation's Common Stock, par value $.001 per share
(the "Common Stock"), and, except as specified above, all other classes and
series of capital stock of the Corporation hereafter issued by the Corporation.
With respect to dividends, all equity securities of the Corporation to which the
Series C Preferred Stock ranks senior, including the Common Stock, are
collectively referred to herein as the
"Junior Dividend Securities"; all equity securities of the Corporation with
which the Series C Preferred Stock ranks on a parity, including the Series B
Preferred Stock, are collectively referred to herein as the "Parity Dividend
Securities"; and all equity securities of the Corporation (other than
convertible debt securities) to which the Series C Preferred Stock ranks junior,
with respect to dividends, are collectively referred to herein as the "Senior
Dividend Securities."
B. With respect to the distribution of assets upon liquidation, dissolution
or winding up of the Corporation, whether voluntary or involuntary, the Series C
Preferred Stock shall rank (i) senior to each other class or series of Preferred
Stock, except for the Series B Preferred Stock; (ii) on a parity with the Series
B Preferred Stock; and (iii) senior to the Common Stock, and, except as
specified above, all other classes and series of capital stock of the
Corporation hereafter issued by the Corporation. With respect to the
distribution of assets upon liquidation, dissolution or winding up of the
Corporation, whether voluntary or involuntary, all equity securities of the
Corporation to which the Series C Preferred Stock ranks senior, including the
Common Stock, are collectively referred to herein as "Junior Liquidation
Securities"; all equity securities of the Corporation (other than convertible
debt securities) to which the Series C Preferred Stock ranks on parity,
including the Series B Preferred Stock, are collectively referred to herein as
"Parity Liquidation Securities"; and all equity securities of the Corporation to
which the Series C Preferred Stock ranks junior are collectively referred to
herein as "Senior Liquidation Securities."
C. The Series C Preferred Stock shall be subject to the creation of Junior
Dividend Securities and Junior Liquidation Securities (collectively, "Junior
Securities"), but no Parity Dividend Securities or Parity Liquidation Securities
(collectively, "Parity Securities") (other than the Series B Preferred Stock) or
Senior Dividend Securities or Senior Liquidation Securities (collectively,
"Senior Securities") shall be created except in accordance with the terms
hereof.
III. DIVIDENDS
A. DIVIDENDS. Subject to the terms of paragraph D below, shares of Series C
Preferred Stock shall accumulate dividends at a rate of 6.5% per annum (the
"Dividend Rate"), which dividends shall be paid quarterly in cash, in four equal
quarterly installments on the last day of March, June, September and December of
each year, or if any such date is not a Business Day, the Business Day next
preceding such day (each such date, regardless of whether any dividends have
been paid or declared and set aside for payment on such date, a "Dividend
Payment Date"), to holders of record (the "Registered Holders") as they appear
on the stock record books of the Corporation on the fifteenth day prior to the
relevant Dividend Payment Date; provided, however, that during the Accrual
Period (as defined in Article IX hereof) the Corporation shall have the option
to accrue such dividends, which dividends, to the extent so accrued, shall
compound quarterly. Prior to the consummation of the Recapitalization, dividends
shall accrue and accumulate on the Initial Stated Value of each share of Series
B Preferred Stock. Following the consummation of the Recapitalization, dividends
shall accrue and accumulate on the Post-Recapitalization Stated Value of each
share of Series B Preferred Stock. Dividends shall be paid only when, as and if
declared by the Board of Directors out of funds at the time
legally available for the payment of dividends. Dividends shall begin to
accumulate on outstanding shares of Series C Preferred Stock from the date of
issuance and shall be deemed to accumulate from day to day whether or not earned
or declared until paid. Dividends shall accumulate on the basis of a 360-day
year consisting of twelve 30-day months (four 90-day quarters) and the actual
number of days elapsed in the period for which payable.
B. ACCUMULATION. Dividends on the Series C Preferred Stock shall be
cumulative, and from and after (i) any Dividend Payment Date on which any
dividend that has accumulated or been deemed to have accumulated through such
date has not been paid in full (other than by reason of the election of the
Corporation to accrue dividends during the Accrual Period); or (ii) any payment
date set for a redemption on which such redemption payment has not been paid in
full, additional dividends shall accumulate in respect of the amount of such
unpaid dividends or unpaid redemption payment (the "Arrearage") at 125% of the
stated dividend rate (or such lesser rate as may be the maximum rate that is
then permitted by applicable law). Such additional dividends in respect of any
Arrearage shall be deemed to accumulate from day to day whether or not earned or
declared until the Arrearage is paid, shall be calculated as of such successive
Dividend Payment Date, and shall constitute an additional Arrearage from and
after any Dividend Payment Date to the extent not paid on such Dividend Payment
Date. References in any Article herein to dividends that have accumulated or
that have been deemed to have accumulated with respect to the Series C Preferred
Stock shall include the amount, if any, of any Arrearage together with any
dividends accumulated or deemed to have accumulated on such Arrearage pursuant
to the immediately preceding two sentences. Additional dividends in respect of
any Arrearage may be declared and paid at any time, in whole or in part, without
reference to any regular Dividend Payment Date, to Registered Holders as they
appear on the stock record books of the Corporation on such record date as may
be fixed by the Board of Directors (which record date shall be no less than 10
days prior to the corresponding payment date). Dividends in respect of any
Arrearage shall be paid in cash.
C. METHOD OF PAYMENT. Dividends paid on the shares of Series C Preferred
Stock in an amount less than the total amount of such dividends at the time
accumulated and payable on all outstanding shares of Series C Preferred Stock
shall be allocated pro rata on a share-by-share basis among all such shares then
outstanding. After the Second Anniversary Date, dividends that are declared and
paid in an amount less than the full amount of dividends accumulated on the
Series C Preferred Stock (and on any Arrearage) shall be applied first to the
earliest dividend which has not theretofore been paid. All cash payments of
dividends on the shares of Series C Preferred Stock shall be made in such coin
or currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts.
D. SPECIAL DIVIDEND RIGHTS.
1. In addition to the dividend rights set forth in paragraph A above, prior
to the consummation of the Recapitalization, the holders of shares of Series C
Preferred Stock shall be entitled to receive, when, as and if declared by the
Board of Directors out of funds legally available for such purpose, cash
dividends in an amount per whole share (rounded to the nearest cent) equal to
the Formula Number then in effect times the aggregate per share amount of all
cash dividends declared or paid on the Common Stock. If, prior to the
consummation of the Recapitalization, the Corporation shall pay any dividend or
make any distribution on the Common Stock payable in assets, securities or other
forms of non-cash consideration, then, in each such case, the Corporation shall
simultaneously pay or make on each whole outstanding share of the Series C
Preferred Stock a dividend or distribution in like kind equal to the Formula
Number then in effect times such dividend or distribution on each share of the
Common Stock. The dividends and distributions on the Series C Preferred Stock
pursuant to this paragraph D are hereinafter referred to as "Participating
Dividends." The Corporation shall declare each Participating Dividend
immediately prior to or at the same time it declares any cash or non-cash
dividend or distribution on the Common Stock in respect of which a Participating
Dividend is required to be paid. No cash or non-cash dividend or distribution on
the Common Stock in respect of which a Participating Dividend is required shall
be paid or set aside for payment on the Common Stock unless a Participation
Dividend in respect of such dividend shall be have been paid. Nothing contained
in this paragraph D shall obligate the Company to declare or pay any dividend or
other distribution on the Common Stock or (except pursuant to paragraph A of
this Article III or in connection with a dividend or distribution on the Common
Stock as provided in this paragraph D) the Series B Preferred Stock.
2. If the Recapitalization is not consummated prior to June 30, 1999, the
Dividend Rate shall be deemed to be 15% per annum during the period commencing
on such date and ending on the date the Recapitalization is consummated.
IV. LIQUIDATION PREFERENCE
A. PRIOR TO THE RECAPITALIZATION. In the event of a liquidation,
dissolution or winding up of the Corporation, whether voluntary or involuntary,
occurring prior to the consummation of the Recapitalization, the holders of
then-outstanding shares of Series C Preferred Stock shall be entitled to receive
out of the assets of the Corporation, whether such assets are capital or surplus
of any nature, an amount per share equal to the sum of (i) the dividends, if
any, accumulated or deemed to have accumulated thereon, to the date of final
distribution to such holders, whether or not such dividends are declared; and
(ii) the Initial Stated Value thereof, before any payment shall be made or any
assets distributed to the holders of any Junior Liquidation Securities (the
"Initial Preferred Distribution"). After the Initial Preferred Distribution has
been made, the holders of Series C Preferred Stock shall be entitled to share
pro rata with the holders of Common Stock in the distribution of any remaining
assets of the Corporation on the basis of each whole outstanding share of the
Series C Preferred Stock receiving an amount equal to the Formula Number then in
effect times such distribution on each share of the Common Stock. The
distributions on the Series C Preferred Stock pursuant to the immediately
preceding sentence of this paragraph A are hereinafter referred to as
"Participating Liquidation Distributions." No distribution on the Common Stock
in respect of which a Participating Liquidation Distribution is required shall
be paid or set aside for payment on the Common Stock unless a Participating
Liquidation Distribution in respect of such distribution is concurrently paid.
B. AFTER THE RECAPITALIZATION. Subsequent to the consummation of the
Recapitalization, the holders of the outstanding shares of Series C Preferred
Stock shall be entitled to receive out of the assets of the Corporation, whether
such assets are capital or surplus of any nature, an amount per share equal to
the sum of (i) the dividends, if any, accumulated or deemed to have accumulated
thereon to the date of final distribution to such holders, whether or not such
dividends are declared; and (ii) the Post-Recapitalization Stated Value thereof,
before any payment shall be made or any assets distributed to the holders of any
Junior Liquidation Securities. After any such payment in full after the
consummation of the Recapitalization, the holders of Series C Preferred Stock
shall not, as such, be entitled to any further participation in any distribution
of assets of the Corporation.
C. PARITY SECURITIES. All the assets of the Corporation available for
distribution to stockholders after the liquidation preferences of any Senior
Liquidation Securities shall be distributed ratably (in proportion to the full
distributable amounts to which holders of Series C Preferred Stock and Parity
Liquidation Securities, if any, are respectively entitled upon such dissolution,
liquidation or winding up) among the holders of the then-outstanding shares of
Series C Preferred Stock and Parity Liquidation Securities, if any, when such
assets are not sufficient to pay in full the aggregate amounts payable thereon.
D. MERGER NOT A LIQUIDATION. Neither a consolidation or merger of the
Corporation with or into any other Person or Persons, nor a sale, conveyance,
lease, exchange or transfer of all or part of the Corporation's assets for cash,
securities or other property to a Person or Persons shall be deemed to be a
liquidation, dissolution or winding up of the Corporation for purposes of this
Article IV, but the holders of shares of Series C Preferred Stock shall
nevertheless be entitled from and after any such consolidation, merger or sale,
conveyance, lease, exchange or transfer of all or part of the Corporation's
assets to the rights provided by this Article IV following any such transaction.
Notice of any voluntary or involuntary liquidation, dissolution or winding up of
the Corporation, stating the payment date or dates when, and the place or places
where, the amounts distributable to each holder of shares of Series C Preferred
Stock in such circumstances shall be payable, shall be given by first-class
mail, postage prepaid, mailed not less than 30 days prior to any payment date
stated therein, to holders of record as they appear on the stock record books of
the Corporation as of the date such notices are first mailed.
V. REDEMPTION
A. INTENTIONALLY OMITTED
B. OPTIONAL REDEMPTION. Commencing on the earlier to occur of (x) the tenth
anniversary of the Issue Date and (y) the date on which fewer than 25% of the
shares of Series C Preferred Stock issued on the Issue Date remain outstanding,
and at all times thereafter, the Corporation may, at its option, redeem all (but
not less than all) outstanding shares of Series C Preferred Stock on a date
specified by the Corporation (the "Optional Redemption Date") by paying the
Redemption Price therefor in cash out funds legally available for such purpose.
C. NOTICE AND REDEMPTION PROCEDURES. Notice of the redemption of shares of
Series C Preferred Stock pursuant to paragraph B of this Article V (a "Notice of
Redemption"
shall be sent to the holders of record of the shares of Series C Preferred Stock
to be redeemed by first class mail, postage prepaid, at each such holder's
address as it appears on the stock record books of the Corporation not more than
120 nor fewer than 90 days prior to the Optional Redemption Date, which date
shall be set forth in such notice (the "Redemption Date"); provided that failure
to give such Notice of Redemption to any holder, or any defect in such Notice of
Redemption to any holder shall not affect the validity of the proceedings for
the redemption of any shares of Series C Preferred Stock held by any other
holder. In order to facilitate the redemption of shares of Series C Preferred
Stock, the Board of Directors may fix a record date for the determination of the
holders of shares of Series C Preferred Stock to be redeemed not more than 30
days prior to the date the Notice of Redemption is mailed. On or after the
Optional Redemption Date, each holder of the shares called for redemption shall
surrender the certificate evidencing such shares to the Corporation at the place
designated in such notice and shall thereupon be entitled to receive payment of
the Redemption Price for such shares. From and after the Optional Redemption
Date, all dividends on shares of Series C Preferred Stock shall cease to
accumulate and all rights of the holders thereof as holders of Series C
Preferred Stock shall cease and terminate, except to the extent the Corporation
shall default in payment thereof on the Optional Redemption Date.
D. DEPOSIT OF FUNDS. The Corporation shall, on or prior to the Optional
Redemption Date, pursuant to paragraph C of this Article V, deposit with its
transfer agent or other redemption agent in the Borough of Manhattan, The City
of New York having a capital and surplus of at least $500,000,000 selected by
the Board of Directors, as a trust fund for the benefit of the holders of the
shares of Series C Preferred Stock to be redeemed, cash that is sufficient in
amount to redeem the shares to be redeemed in accordance with the Notice of
Redemption, with irrevocable instructions and authority to such transfer agent
or other redemption agent to pay to the respective holders of such shares, as
evidenced by a list of such holders certified by an officer of the Corporation,
the Redemption Price upon surrender of their respective share certificates. Such
deposit shall be deemed to constitute full payment of the Redemption Price for
such shares to the holders, and from and after the date of such deposit, all
rights of the holders of the shares of Series C Preferred Stock that are to be
redeemed as stockholders of the Corporation with respect to such shares, except
the right to receive the Redemption Price upon the surrender of their respective
certificates, shall cease and terminate. No dividends shall accumulate on any
shares of Series C Preferred Stock after the Optional Redemption Date, for such
shares (unless the Corporation shall fail to deposit cash sufficient to redeem
all such shares). In case holders of any shares of Series C Preferred Stock
called for redemption shall not, within two years after such deposit, claim the
cash deposited for redemption thereof, such transfer agent or other redemption
agent shall, upon demand, pay over to the Corporation the balance so deposited.
Thereupon, such transfer agent or other redemption agent shall be relieved of
all responsibility to the holders thereof and the sole right of such holders,
with respect to shares to be redeemed, shall be to receive the Redemption Price
as general creditors of the Corporation. Any interest accrued on any funds so
deposited shall belong to the Corporation, and shall be paid to it from time to
time on demand.
VI. RESTRICTIONS ON DIVIDENDS
So long as any shares of the Series C Preferred Stock are outstanding, the
Board of Directors shall not declare, and the Corporation shall not pay or set
apart for payment any dividend on any Junior Securities or make any payment on
account of, or set apart for payment money for a sinking or other similar fund
for, the repurchase, redemption or other retirement of, any Junior Securities or
Parity Securities or any warrants, rights or options exercisable for or
convertible into any Junior Securities or Parity Securities (other than the
repurchase, redemption or other retirement of debentures or other debt
securities that are convertible or exchangeable into any Junior Securities or
Parity Securities), or make any distribution in respect of the Junior
Securities, either directly or indirectly, and whether in cash, obligations or
shares of the Corporation or other property (other than distributions or
dividends in Junior Securities to the holders of Junior Securities), and shall
not permit any corporation or other entity directly or indirectly controlled by
the Corporation to purchase or redeem any Junior Securities or Parity Securities
or any warrants, rights, calls or options exercisable for or convertible into
any Junior Securities or Parity Securities (other than the repurchase,
redemption or other retirement of debentures or other debt securities that are
convertible or exchangeable into any Junior Securities or Parity Securities or
the repurchase, redemption or other retirement of Junior Securities or Parity
Securities in exchange for Junior Securities or Parity Securities) unless prior
to or concurrently with such declaration, payment, setting apart for payment,
repurchase, redemption or other retirement or distribution, as the case may be,
all accumulated and unpaid dividends on shares of the Series C Preferred Stock
not paid on the dates provided for in paragraph A of Article III hereof
(including Arrearages and accumulated dividends thereon) shall have been paid,
except that when dividends are not paid in full as aforesaid upon the shares of
Series C Preferred Stock, all dividends declared on the Series C Preferred Stock
and any series of Parity Dividend Securities shall be declared and paid pro rata
so that the amount of dividends so declared and paid on Series C Preferred Stock
and such series of Parity Dividend Securities shall in all cases bear to each
other the same ratio that accumulated dividends (including interest accrued on
or additional dividends accumulated in respect of such accumulated dividends) on
the shares of Series C Preferred Stock and such Parity Dividend Securities bear
to each other.
VII. VOTING RIGHTS
A. On or prior to the consummation of the Recapitalization, the holders of
Series C Preferred Stock shall be entitled to one thousand (1,000) votes per
share of Series C Preferred Stock at each meeting of stockholders of the
Corporation with respect to any and all matters presented to the stockholders of
the Corporation for their action and consideration, other than the election of
directors. After the consummation of the Recapitalization, the holders of Series
C Preferred Stock shall be entitled to the number of votes per share of Series C
Preferred Stock equal to the number of shares of Common Stock for which such
share of Series C Preferred Stock is then convertible pursuant to Article VIII
at each meeting of stockholders of the Corporation with respect to any and all
matters presented to the stockholders of the Corporation for their action and
consideration, other than the election of directors.
B. So long as any shares of the Series C Preferred Stock are outstanding,
(i) each share of Series C Preferred Stock shall entitle the holder thereof to
vote on all matters voted on by holders of Common Stock, other than the election
of directors; and (ii) the shares of Series C Preferred Stock shall vote
together with shares of Common Stock and shares of Series B Preferred Stock as a
single class.
C. Without the written consent (if action by written consent is permitted)
or affirmative vote of the holders of a majority of the outstanding shares of
Series C Preferred Stock and Series B Preferred Stock, voting together as a
single class, the Corporation shall not (i) authorize, create or issue, or
increase the authorized amount of, (x) any Senior Securities or Parity
Securities or (y) any class or series of capital stock or any security
convertible into or exercisable for any class or series of capital stock,
redeemable mandatorily or redeemable at the option of the holder thereof or (ii)
enter into any Transaction (as defined in paragraph H of Article VIII). Such
vote or consent shall be taken in accordance with the procedures specified in
paragraph E below.
D. Without the written consent (if action by written consent is permitted)
or affirmative vote of the holders of at least a majority of the outstanding
shares of Series C Preferred Stock and Series B Preferred Stock, voting together
as a single class, the Corporation shall not (i) amend, alter or repeal any
provision of the Certificate of Incorporation or the Bylaws, if the amendment,
alteration or repeal alters or changes the powers, preferences or special rights
of the Series C Preferred Stock so as to affect them materially and adversely or
(ii) authorize or take any other action if such action alters or changes any of
the rights of the Series C Preferred Stock in any respect or otherwise would be
inconsistent with the provisions of this Certificate of Designations and the
holders of any class or series of the capital stock of the Corporation is
entitled to vote thereon. Such vote or consent shall be taken in accordance with
the procedures specified in paragraph E below.
E. The foregoing rights of holders of shares of Series C Preferred Stock to
take any actions as provided in this Article VII may be exercised at any annual
meeting of stockholders or at a special meeting of stockholders held for such
purpose as hereinafter provided or at any adjournment thereof, or by the written
consent, delivered to the Secretary of the Corporation, of the holders of the
minimum number of shares required to take such action, if action by written
consent of stockholders of the Corporation is then permitted.
The Chairman of the Board of the Corporation may call, and upon written
request of holders of record of 35% of the outstanding shares of Series C
Preferred Stock and Series B Preferred Stock, addressed to the Secretary of the
Corporation at the principal office of the Corporation shall call, a special
meeting of the holders of shares entitled to vote as provided herein. Such
meeting shall be held within 30 days after delivery of such request to the
Secretary, at the place and upon the notice provided by law and in the By-laws
of the Corporation for the holding of meetings of stockholders.
At each meeting of stockholders at which the holders of shares of Series C
Preferred Stock shall have the right to take any action, the presence in person
or by proxy of the
holders of record of one-third of the total number of shares of Series C
Preferred Stock and Series B Preferred Stock then outstanding and entitled to
vote on the matter shall be necessary and sufficient to constitute a quorum. At
any such meeting or at any adjournment thereof:
(A) the absence of a quorum of the holders of shares of Series C
Preferred Stock shall not prevent the election of directors to be elected
by the holders of shares of Series B Preferred Stock or the taking of any
action as provided in this Article VII; and
(B) in the absence of a quorum of the holders of shares of Series C
Preferred Stock and Series B Preferred Stock, a majority of the holders of
such shares present in person or by proxy shall have the power to adjourn
the meeting as to the actions to be taken by the holders of shares of
Series C Preferred Stock and Series B Preferred Stock, from time to time
and place to place without notice other than announcement at the meeting
until a quorum shall be present.
For taking of any action as provided in this Article VII by the holders of
shares of Series C Preferred Stock and Series B Preferred Stock, each such
holder shall have one vote for each share of such stock standing in his name on
the transfer books of the Corporation as of any record dated fixed for such
purpose or, if no such date be fixed, at the close of business on the Business
Day next preceding the day on which notice is given, or if notice if waived, at
the close of business on the Business Day next preceding the day on which the
meeting is held.
F. The Corporation shall not enter into any agreement or issue any security
that prohibits, conflicts or is inconsistent with, or would be breached by, the
Corporation's performance of its obligations hereunder.
VIII. CONVERSION
The holders of the Series C Preferred Stock shall have conversion rights as
follows:
A. Each share of Series C Preferred Stock shall be convertible at the
direction of, and by notice to the Corporation from, (i) the holder
thereof or (ii) the holders of a majority of the outstanding shares of
Series C Preferred Stock, at any time, at the office of the
Corporation or any transfer agent for such Series, into one thousand
(1,000) fully paid and nonassessable shares of Common Stock subject
(x) to adjustment from time to time as provided below (as so adjusted,
the "conversion ratio") and (y) (prior to the consummation of the
Recapitalization) to limitations resulting from the available number
of shares of Common Stock which may be reserved for issuance upon such
conversion, provided, that any conversion pursuant to clause (ii)
above of less than all of the outstanding shares of Series C Preferred
Stock shall be on a pro rata basis amongst all holders of Series C
Preferred Stock. After consummation of the Recapitalization, the
number "1,000" in this paragraph shall be "1", subject to adjustment
as provided in paragraph VIII.G.
B. If a holder of Series C Preferred Stock gives notice (an "Optional
Conversion Notice") of conversion under paragraph A above, such holder
shall surrender with such Optional Conversion Notice the duly endorsed
certificate or certificates for the Series C Preferred Stock being
converted, at the office of the Corporation or of any transfer agent
for such Series, and shall state therein the name or names in which
the certificate or certificates for shares of Common Stock are to be
issued. If the holders of a majority of the outstanding shares of
Series C Preferred Stock give notice of conversion under paragraph A
above, the Corporation shall notify all other record holders of Series
C Preferred Stock (a "Mandatory Conversion Notice"). Following receipt
of a Mandatory Conversion Notice, the holders of Series C Preferred
Stock shall surrender the certificate or certificates therefor duly
endorsed, at the office of the Corporation or of any transfer agent
for such Series, and shall state therein the name or names in which
the certificate or certificates for shares of Common Stock are to be
issued. The Corporation shall, as soon as practicable after the
surrender of a Series C Preferred Stock certificate or certificates
pursuant to an Optional Conversion Notice or Mandatory Conversion
Notice, issue and deliver at such office to such holder, or to the
nominee or nominees of such holder, a certificate or certificates for
the number of shares of Common Stock to which such holder shall be
entitled as aforesaid. Such conversion shall be deemed to have been
made immediately prior to the close of business on the date of such
Optional Conversion Notice or Mandatory Conversion Notice, as
applicable, and the person or persons entitled to receive the shares
of Common Stock issuable upon such conversion shall be treated for all
purposes as the recordholder or holders of such shares of Common Stock
as of such date. The issuance of certificates or shares of Common
Stock upon conversion of shares of Series C Preferred Stock shall be
made without charge for any issue, stamp or other similar tax in
respect of such issuance.
C. No fractional shares shall be issued upon conversion of any shares of
Series C Preferred Stock and the number of shares of Common Stock to
be issued shall be rounded down to the nearest whole share, and the
holder of Series C Preferred Stock shall be paid in cash for any
fractional share.
D. In case at any time or from time to time the Corporation shall pay any
dividend or make any other distribution to the holders of its Common
Stock or other class of securities, or shall offer for subscription
pro rata to the holders of its Common Stock or other class of
securities any additional shares of stock of any class or any other
right, or there shall be any capital reorganization or
reclassification of the Common Stock of the Corporation or
consolidation or merger of the Corporation with or into another
corporation, or any sale or conveyance to another corporation of the
property of the Corporation as an entirety or substantially as an
entirety, or there shall be a voluntary or involuntary dissolution,
liquidation or winding up of the Corporation, then, in any one or more
of said cases the Corporation shall give at least 20 days' prior
written notice (the time of mailing of such notice shall be deemed to
be the time of giving thereof) to the registered holders of the Series
C
Preferred Stock at the addresses of each as shown on the books of the
Corporation maintained by the Transfer Agent thereof of the date on
which (i) the books of the Corporation shall close or a record shall
be taken for such stock dividend, distribution or subscription rights
or (ii) such reorganization, reclassification, consolidation, merger,
sale or conveyance, dissolution, liquidation or winding up shall take
place, as the case may be, provided that in the case of any
Transaction to which paragraph H applies the Corporation shall give at
least 30 days' prior written notice as aforesaid. Such notice shall
also specify the date as of which the holders of the Common Stock of
record shall participate in said dividend, distribution or
subscription rights or shall be entitled to exchange their Common
Stock for securities or other property deliverable upon such
reorganization, reclassification, consolidation, merger, sale or
conveyance or participate in such dissolution, liquidation or winding
up, as the case may be. Failure to give such notice shall not
invalidate any action so taken.
E. From and after the Recapitalization, the Corporation shall at all
times reserve and keep available out of its authorized but unissued
shares of Common Stock, solely for the purpose of effecting the
conversion of the shares of Series C Preferred Stock, such number of
its shares of Common Stock as shall from time to time be sufficient to
effect the conversion of all outstanding shares of Series C Preferred
Stock, and if at any time the number of authorized but unissued shares
of Common Stock shall not be sufficient to effect the conversion of
all then outstanding shares of Series C Preferred Stock, then in
addition to such other remedies as shall be available to the holder of
Series C Preferred Stock, the Corporation will take such corporate
action as may, in the opinion of its counsel, be necessary to increase
its authorized but unissued shares of Common Stock to such number of
shares as shall be sufficient for such purposes.
F. Any notice required by the provisions of paragraph D to be given the
holders of shares of Series C Preferred Stock shall be deemed given if
sent by facsimile transmission, by telex, or if deposited in the
United States mail, postage prepaid, and addressed to each holder of
record at his, her or its address appearing on the books of the
Corporation.
G. The conversion ratio shall be subject to adjustment from time to time
as follows:
(i) In case the Corporation shall at any time or from time to
time after the Issue Date (A) pay a dividend or make a distribution,
on the outstanding shares of Common Stock in shares of Common Stock,
(B) subdivide the outstanding shares of Common Stock into a larger
number of shares of Common Stock, (C) combine the outstanding shares
of Common Stock into a smaller number of shares or (D) issue by
reclassification of the shares of Common Stock any shares of capital
stock of the Corporation, then, and in each such case, the conversion
ratio in effect immediately prior to such event or the record date
therefor, whichever is earlier, shall be adjusted so that the holder
of any shares of
Series C Preferred Stock thereafter surrendered for conversion shall
be entitled to receive the number of shares of Common Stock or other
securities of the Corporation which such holder would have owned or
have been entitled to receive after the happening of any of the events
described above, had such shares of Series C Preferred Stock been
surrendered for conversion immediately prior to the happening of such
event or the record date therefor, whichever is earlier. An adjustment
made pursuant to this clause (i) shall become effective (x) in the
case of any such dividend or distribution, immediately after the close
of business on the record date for the determination of holders of
shares of Common Stock entitled to receive such dividend or
distribution, or (y) in the case of any such subdivision,
reclassification or combination, at the close of business on the day
upon which such corporate action becomes effective.
(ii) In the case the Corporation shall, after the Issue Date,
issue shares of Common Stock at a price per share, or securities
convertible into or exchangeable for shares of Common Stock
("Convertible Securities") having a "Conversion Price" (as defined
below) less than the Current Market Price (for a period of 15
consecutive trading days prior to such date), then, and in each such
case, the conversion ratio shall be adjusted so that the holder of
each share of Series C Preferred Stock shall be entitled to receive,
upon the conversion thereof, the number of shares of Common Stock
determined by multiplying (A) the applicable conversion ratio on the
day immediately prior to such date by (B) a fraction, the numerator of
which shall be the sum of (1) the number of shares of Common Stock
outstanding on the date on which such shares or Convertible Securities
are issued and (2) the number of additional shares of Common Stock
issued, or into which the Convertible Securities may convert, and the
denominator of which shall be the sum of (x) the number of shares of
Common Stock outstanding on such date and (y) the number of shares of
Common Stock which the aggregate consideration receivable by the
Corporation for the total number of 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 Market price on such date. An adjustment made
pursuant to this clause (ii) shall be made on the next Business Day
following the date on which any such issuance is made and shall be
effective retroactively immediately after the close of business on
such date. For purposes of this clause (ii), the aggregate
consideration receivable by the Corporation in connection with the
issuance of any securities shall be deemed to be the sum of the
aggregate offering price to the public (before deduction of
underwriting discounts or commissions and expenses payable to third
parties), and the "Conversion Price" of any Convertible Securities is
the total amount received or receivable by the Corporation as
consideration for the issue or sale of such Convertible Securities
(before deduction of underwriting discounts or commissions and
expenses payable to third parties) plus the minimum aggregate amount
of additional consideration, if any, payable to the Corporation upon
the conversion, exchange or exercise of any such Convertible
Securities. Neither (A)
the issuance of any shares of Common Stock (whether treasury shares or
newly issued shares) pursuant to a dividend or distribution on, or
subdivision, combination or reclassification of, the outstanding
shares of Common Stock requiring an adjustment in the conversion ratio
pursuant to clause (i) of this paragraph G, or pursuant to any
employee benefit plan or program of the Corporation or pursuant to any
option, warrant, right, or Convertible Security outstanding as of the
date hereof (including, but not limited to, the Rights, the Series B
Preferred Stock, the Series C Preferred Stock and the Warrants) nor
(B) the issuance of shares of Common Stock pursuant thereto shall be
deemed to constitute an issuance of Common Stock or Convertible
Securities by the Corporation to which this clause (ii) applies. Upon
expiration of any Convertible Securities which shall not have been
exercised or converted and for which an adjustment shall have been
made pursuant to this clause (ii), the Conversion Price computed upon
the original issue thereof shall upon such expiration be recomputed as
if the only additional shares of Common Stock issued were such shares
of Common Stock (if any) actually issued upon exercise of such
Convertible Securities and the consideration received therefor was the
consideration actually received by the Corporation for the issue of
such Convertible Securities (whether or not exercised or converted)
plus the consideration actually received by the Corporation upon such
exercise of conversion.
(iii) In case the Corporation shall at any time or from time to
time after the Issue Date declare, order, pay or make a dividend or
other distribution (including, without limitation, any distribution of
stock or other securities or property or rights or warrants to
subscribe for securities of the Corporation or any of its Subsidiaries
by way of dividend or spin-off), on its Common Stock, other than (A)
regular quarterly dividends payable in cash in an aggregate amount not
to exceed 15% of net income from continuing operations before
extraordinary items of the Corporation, determined in accordance with
generally accepted accounting principles, during the period (treated
as one accounting period) commencing on July 1, 1998, and ending on
the date such dividend is paid or (B) dividends or distributions of
shares of Common Stock which are referred to in clause (i) of this
paragraph G, then, and in each such case, the conversion ratio shall
be adjusted so that the holder of each share of Series C Preferred
Stock shall be entitled to receive, upon the conversion thereof, the
number of shares of Common Stock determined by multiplying (1) the
applicable conversion ratio on the day immediately prior to the record
date fixed for the determination of stockholders entitled to receive
such dividend or distribution by (2) a fraction, the numerator of
which shall be the then Current Market Price per share of Common Stock
for the period of 20 Trading Days preceding such record date, and the
denominator of which shall be such Current Market Price per share of
Common Stock for the period of 20 Trading Days preceding such record
date less the Fair Market Value (as defined in Article IX) per share
of Common Stock (as determined in good faith by the Board of Directors
of the Corporation, a certified resolution with
respect to which shall be mailed to each holder of shares of Series C
Preferred Stock) of such dividend or distribution; provided, however,
that in the event of a distribution of shares of capital stock of a
Subsidiary of the Corporation (a "Spin-Off") made to holders of shares
of Common Stock, the numerator of such fraction shall be the sum of
the Current Market Price per share of Common Stock for the period of
20 Trading Days preceding the 35th Trading Day after the effective
date of such Spin-Off and the Current Market Price of the number of
shares (or the fraction of a share) of capital stock of the Subsidiary
which is distributed in such Spin-Off in respect of one share of
Common Stock for the period of 20 Trading Days preceding such 35th
Trading Day and the denominator of which shall be the current market
price per share of the Common Stock for the period of 20 Trading Days
proceeding such 35th Trading Day. An adjustment made pursuant to this
clause (iii) shall be made upon the opening of business on the next
Business Day following the date on which any such dividend or
distribution is made and shall be effective retroactively immediately
after the close of business on the record date fixed for the
determination of stockholders entitled to receive such dividend or
distribution; provided, however, if the proviso to the preceding
sentence applies, then such adjustment shall be made and be effective
as of such 35th Trading Day after the effective date of such Spin-Off.
(iv) For purposes of this paragraph G, the number of shares of
Common Stock at any time outstanding shall not include any shares of
Common Stock then owned or held by or for the account of the
Corporation.
(v) The term "dividend", as used in this paragraph G shall mean a
dividend or other distribution upon stock of the Corporation except
pursuant to the Rights Agreement (as defined in Article IX).
Notwithstanding anything in this Article VIII to the contrary, the
conversion ratio shall not be adjusted as a result of any dividend,
distribution or issuance of securities of the Corporation pursuant to
the Rights Agreement.
(vi) Anything in this paragraph G to the contrary
notwithstanding, the Corporation shall not be required to give effect
to any adjustment in the conversion ratio unless and until the net
effect of one or more adjustments (each of which shall be carried
forward), determined as above provided, shall have resulted in a
change of the conversion ratio by at least one-hundredth of one share
of Common Stock, and when the cumulative net effect of more than one
adjustment so determined shall be to change the conversion ratio by at
least one-hundredth of one share of Common Stock, such change in
conversion ratio shall thereupon be given effect.
(vii) The certificate of any firm of independent public
accountants of recognized standing selected by the Board of Directors
of the Corporation (which may be the firm of independent public
accountants regularly employed by the
Corporation) shall be presumptively correct for any computation made
under this paragraph G.
(viii) If the Corporation shall take a record of the holders of
its Common Stock for the purpose of entitling them to receive a
dividend or other distribution, and shall thereafter and before the
distribution to stockholders thereof legally abandon its plan to pay
or deliver such dividend or distribution, then thereafter no
adjustment in the number of shares of Common Stock issuable upon
exercise of the right of conversion granted by this paragraph G or in
the conversion ratio then in effect shall be required by reason of the
taking of such record.
(ix) There shall be no adjustment of the conversion ratio in case
of the issuance of any stock of the Corporation in a merger,
reorganization, acquisition or other similar transaction except as set
forth in paragraph G(i), G(ii) and H of this Article VIII.
H. In case of any reorganization or reclassification of outstanding
shares of Common Stock (other than a reclassification covered by
paragraph G(i) of this Article VIII), or in case of any consolidation
or merger of the Corporation with or into another corporation, or in
the case of any sale or conveyance to another corporation of the
property of the Corporation as an entirety or substantially as an
entirety (each of the foregoing being referred to as a "Transaction"),
each share of Series C Preferred Stock then outstanding shall
thereafter be convertible into, in lieu of the Common Stock issuable
upon such conversion prior to consummation of such Transaction, the
kind and amount of shares of stock and other securities and property
receivable (including cash) upon the consummation of such Transaction
by a holder of that number of shares of Common Stock into which one
share of Series C Preferred Stock was convertible immediately prior to
such Transaction (including, on a pro rata basis, the cash, securities
or property received by holders of Common Stock in any tender or
exchange offer that is a step in such Transaction). In case securities
or property other than Common Stock shall be issuable or deliverable
upon conversion as aforesaid, then all reference in this paragraph H
shall be deemed to apply, so far as appropriate and as nearly as may
be, to such other securities or property.
I. Upon any adjustment of the conversion ratio then in effect and any
increase or decrease in the number of shares of Common Stock issuable
upon the operation of the conversion set forth in Article VIII, then,
and in each such case, the Corporation shall promptly deliver to the
registered holders of the Series C Preferred and Common Stock, a
certificate signed by the President or a Vice President and by the
Treasurer or an Assistant Treasurer or the Secretary or an Assistant
Secretary of the Corporation setting forth in reasonable detail the
event requiring the adjustment and the method by which such adjustment
was calculated and specifying the conversion ratio then in effect
following such adjustment and
the increased or decreased number of shares issuable upon the
conversion set forth in this Article VIII.
IX. ADDITIONAL DEFINITIONS
For the purposes of this Certificate of Designations of Series C Preferred
Stock, the following terms shall have the meanings indicated:
"Accrual Period" means the end of the first quarterly period following the
Second Anniversary Date.
"Beneficially Own" with respect to any securities means having "beneficial
ownership" of such securities (as determined pursuant to Rule 13d-3 under the
Exchange Act as in effect on the date hereof, except that a Person shall be
deemed to Beneficially Own all such securities that such Person has the right to
acquire whether such right is exercisable immediately or after the passage of
time). The terms "Beneficial Ownership" and "Beneficial Owner" have correlative
meanings.
"Business Day" means any day, other than a Saturday, Sunday or a day on
which banking institutions in the State of New York are authorized or obligated
by law or executive order to close.
"Bylaws" means the Bylaws of the Corporation, as amended.
"Current Market Price", when used with reference to shares of Common Stock
or other securities on any date, shall mean the closing price per share of
Common Stock or such other securities on such date and, when used with reference
to shares of Common Stock or other securities for any period shall mean the
average of the daily closing prices per share of Common Stock or such other
securities for such period. The closing price for each day shall be the last
sale price, regular way, or, in case no such sale takes place on such day, the
average of the closing bid and asked prices, regular way, in either case as
reported in the principal consolidated transaction reporting system with respect
to securities listed or admitted to trading on the New York Stock Exchange or,
if the Common Stock or such other securities are not listed or admitted to
trading on the New York Stock Exchange, as reported in the principal
consolidated transaction reporting system with respect to securities listed on
the principal national securities exchange on which the Common Stock or such
other securities are listed or admitted to trading or, if the Common Stock is
not listed or admitted to trading on any national securities exchange, the last
quoted sale price or, if not so quoted, the average of the high bid and low
asked prices in the over-the-counter market, as reported by the National
Association of Securities Dealers, Inc. National Market System or such other
securities are not quoted by any such organization, the average of the closing
bid and asked prices as furnished by a professional market maker making a market
in the Common Stock or such other securities selected by the Board of Directors
of the Corporation. If the Common Stock or such other securities are not
publicly held or so listed or publicly traded, "Current Market Price" shall mean
the Fair Market Value per share of Common Stock or of such other securities as
determined in good faith by the Board of Directors of the
Corporation based on an opinion of an independent investment banking firm with
an established national reputation as a valuer of securities, which opinion may
be based on such assumption as such firm shall deem to be necessary and
appropriate.
"Equity Securities" of any Person means any and all common stock, preferred
stock and any other class of capital stock of, and any partnership or limited
liability company interests of such Person or any other similar interests of any
Person that is not a corporation, partnership or limited liability company.
"Exchange Act" means the U.S. Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder, from time to time.
"Fair Market Value" shall mean the amount which a willing buyer would pay a
willing seller in an arm's-length transaction.
"Formula Number" shall mean one thousand (1,000) prior to consummation of
the Recapitalization; provided, however, that if at any time prior to the
consummation of the Recapitalization, the Corporation shall (i) declare or pay
any dividend or make any distribution on the Common Stock, payable in shares of
Common Stock; (ii) subdivide (by a stock split or otherwise) the outstanding
shares of Common Stock into a larger number of shares of Common Stock; or (iii)
combine (by a reverse stock split or otherwise) the outstanding shares of Common
Stock into a smaller number of shares of Common Stock, then in each such case
the Formula Number in effect immediately prior to such event shall be adjusted
to a number determined by multiplying the Formula Number then in effect by a
fraction, the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is the
number of shares of Common Stock that were outstanding immediately prior to such
event (and rounding the result to the nearest whole number); and provided
further, that, if prior to the consummation of the Recapitalization the
Corporation shall issue any shares of its capital stock in a merger,
reclassification, or change of the outstanding shares of Common Stock, then in
each such event the Formula Number shall be appropriately adjusted to reflect
such merger, reclassification, or change so that each share of Series C
Preferred Stock continues to be the economic equivalent of a Formula Number of
shares of Common Stock immediately prior to such merger, reclassification, or
change.
"Group" has the meaning set forth in Rule 13d-5 under the Exchange Act.
"Issue Date" shall mean the first date on which shares of Series C
Preferred Stock are issued. "Person" means any individual, corporation, company,
association, partnership, joint venture, trust or unincorporated organization,
or a government or any agency or political subdivision thereof.
"Post-Recapitalization Stated Value" shall be equal to $1.00.
"Recapitalization" means the amendment of the Corporation's Certificate of
Incorporation to increase the authorized shares of Common Stock from 50,000,000
to 400,000,000, and the authorized shares of Preferred Stock from 1,000,000 to
200,000,000, and the subsequent one thousand-for-one split of Series C Preferred
Stock and Series B Preferred Stock.
"Redemption Price" of a share of Series C Preferred Stock shall mean the
sum of (a) the dividends, if any, accumulated or deemed to have accumulated
thereon to the Optional Redemption Date, whether or not such dividends are
declared plus (b) either (i) the Initial Stated Value thereof (if the
Recapitalization has not been consummated prior to June 30, 1999) or (ii) the
Post-Recapitalization Stated Value thereof (if the Recapitalization has been
consummated prior to June 30, 1999), in each case subject to adjustment for
splits, reclassifications, recombinations or similar events.
"Rights" shall mean any rights to purchase securities of the Corporation
issued pursuant to any Rights Agreement.
"Rights Agreement" shall mean the Rights Agreement, dated as of June 21,
1996, between the Company and Xxxxx Fargo Bank as rights agent, and all
amendments, supplements and replacements thereof.
"Second Anniversary Date" means the second anniversary of the Issue Date.
"Subsidiary" means, as to any Person, any other Person of which more than
50% of the shares of the Voting Securities or other voting interests are owned
or controlled, or the ability to select or elect 50% or more of the directors or
similar managers is held, directly or indirectly, by such first Person and one
or more of its Subsidiaries.
"Trading Day" means a day on which the principal national securities
exchange on which the Common Stock is listed or admitted to trading is open for
the transaction of business or, if the Common Stock is not listed or admitted to
trading on any national securities exchange a Business Day.
"Voting Securities" means, (i) with respect to the Company, the Equity
Securities of the Company entitled to vote generally for the election of
directors of the Company, and (ii) with respect to any other Person, any
securities of or interests in such Person entitled to vote generally for the
election of directors or any similar managing person of such Person.
X. MISCELLANEOUS
A. NOTICES. Any notice referred to herein shall be in writing and, unless
first-class mail shall be specifically permitted for such notices under the
terms hereof, shall be deemed to have been given upon personal delivery thereof,
upon transmittal of such notice by telecopy (with confirmation of receipt by
telecopy or telex) or five days after transmittal by registered or certified
mail, postage prepaid, addressed as follows:
(i) if to the Corporation, to its office at 2 California Plaza, 000 Xxxxx
Xxxxx Xxxxxx, Xxx Xxxxxxx, Xxxxxxxxxx 00000 (Attention: General
Counsel)
or to the transfer agent for the Series C Preferred Stock;
(ii) if to a holder of the Series C Preferred Stock, to such holder at the
address of such holder as listed in the stock record books of the
Corporation (which may include the records of any transfer agent for
the Series C Preferred Stock); or
(iii) to such other address as the Corporation or such holder, as the case
may be, shall have designated by notice similarly given.
B. REACQUIRED SHARES. Any shares of Series C Preferred Stock redeemed,
purchased or otherwise acquired by the Corporation, directly or indirectly, in
any manner whatsoever shall be retired and canceled promptly after the
acquisition thereof (and shall not be deemed to be outstanding for any purpose)
and, if necessary to provide for the lawful redemption or purchase of such
shares, the capital represented by such shares shall be reduced in accordance
with the Delaware General Corporation Law. All such shares of Series C Preferred
Stock shall upon their cancellation and upon the filing of an appropriate
certificate with the Secretary of State of the State of Delaware, become
authorized but unissued shares of Preferred Stock, par value $0.001 per share,
of the Corporation and may be reissued as part of another series of Preferred
Stock, par value $0.001 per share, of the Corporation subject to the conditions
or restrictions on issuance set forth herein.
C. ENFORCEMENT. Any registered holder of shares of Series C Preferred Stock
may proceed to protect and enforce its rights and the rights of such holders by
any available remedy by proceeding at law or in equity to protect and enforce
any such rights, whether for the specific enforcement of any provision in this
Certificate of Designations or in aid of the exercise of any power granted
herein, or to enforce any other proper remedy.
D. TRANSFER TAXES. Except as otherwise agreed upon pursuant to the terms of
this Certificate of Designations, the Corporation shall pay any and all
documentary, stamp or similar issue or transfer taxes and other governmental
charges that may be imposed under the laws of the United States of America or
any political subdivision or taxing authority thereof or therein in respect of
any issue or delivery of Common Stock on conversion of, or other securities or
property issued on account of, shares of Series C Preferred Stock pursuant
hereto or certificates representing such shares or securities. The Corporation
shall not, however, be required to pay any such tax or other charge that may be
imposed in connection with any transfer involved in the issue or transfer and
delivery of any certificate for Common Stock or other securities or property in
a name other than that in which the shares of Series C Preferred Stock so
exchanged, or on account of which such securities were issued, were registered
and no such issue or delivery shall be made unless and until the Person
requesting such issue has paid to the Corporation the amount of any such tax or
has established to the satisfaction of the Corporation that such tax has been
paid or is not payable.
E. TRANSFER AGENT. The Corporation may appoint, and from time to time
discharge and change, a transfer agent for the Series C Preferred Stock. Upon
any such appointment or discharge of a transfer agent, the Corporation shall
send notice thereof by first-class mail, postage prepaid, to each holder of
record of shares of Series C Preferred Stock.
F. RECORD DATES. In the event that the Series C Preferred Stock shall be
registered under either the Securities Act of 1933, as amended, or the Exchange
Act, the Corporation shall establish appropriate record dates with respect to
payments and other actions to be made with respect to the Series C Preferred
Stock.
IN WITNESS WHEREOF, this Certificate of Designations is executed on behalf
of the Corporation by its Executive Vice President, General Counsel and
Secretary and attested by its Assistant Secretary, this 10th day of February ,
1999.
AAMES FINANCIAL CORPORATION
By: /s/ Xxxxxxx X. Xxxxxx
------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Executive Vice President, General
Counsel and Secretary
[Corporate Seal]
ATTEST:
/s/ Xxxx X. Xxxxxx, Xx.
------------------------------
Xxxx X. Xxxxxx Xx.
Assistant Secretary
CERTIFICATE OF INCREASE
OF
AUTHORIZED NUMBER OF SHARES
OF
SERIES B CONVERTIBLE PREFERRED STOCK
OF
AAMES FINANCIAL CORPORATION
(Pursuant to Section 151 of the
General Corporation Law of the State of Delaware)
Aames Financial Corporation, a corporation organized and existing under the
General Corporation Law of the State of Delaware (the "Corporation"),
DOES HEREBY CERTIFY:
That a Certificate of the Voting Powers, Designations, Preferences and
Relative, Participating, Optional or Other Special Rights, and Qualifications,
Limitations or Restrictions Thereof, of Series B Convertible Preferred Stock was
filed in the Office of the Secretary of State on February 10,1999.
That the Board of Directors of the Corporation adopted a resolution
authorizing and directing an increase in the authorized number of shares of
Series B Convertible Preferred Stock of the Corporation, from 100,000 shares to
29,704,000 shares, all in accordance with the provisions of Section 151 of The
General Corporation Law of the State of Delaware and the Certificate of
Incorporation of the Corporation.
That the effective date and time of this Certificate of Increase is
September 30, 1999 at 11:59 p.m., eastern time.
IN WITNESS WHEREOF, Aames Financial Corporation has caused this certificate
to be signed by Xxxxxxx X. Xxxxxx, its Executive Vice President, General Counsel
and Secretary, this 30th day of September, 1999.
AAMES FINANCIAL CORPORATION
By: /s/ Xxxxxxx X. Xxxxxx
------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Executive Vice President,
General Counsel and Secretary
CERTIFICATE OF INCREASE
OF
AUTHORIZED NUMBER OF SHARES
OF
SERIES C CONVERTIBLE PREFERRED STOCK
OF
AAMES FINANCIAL CORPORATION
(Pursuant to Section 151 of the
General Corporation Law of the State of Delaware)
Aames Financial Corporation, a corporation organized and existing under the
General Corporation Law of the State of Delaware (the "Corporation"),
DOES HEREBY CERTIFY:
That a Certificate of the Voting Powers, Designations, Preferences and
Relative, Participating, Optional or Other Special Rights, and Qualifications,
Limitations or Restrictions Thereof, of Series C Convertible Preferred Stock was
filed in the Office of the Secretary of State on February 10,1999.
That the Board of Directors of the Corporation adopted a resolution
authorizing and directing an increase in the authorized number of shares of
Series C Convertible Preferred Stock of the Corporation, from 100,000 shares to
107,122,664 shares, all in accordance with the provisions of Section 151 of The
General Corporation Law of the State of Delaware and the Certificate of
Incorporation of the Corporation.
That the effective date and time of this Certificate of Increase is
September 30, 1999 at 11:59 p.m., eastern time.
IN WITNESS WHEREOF, Aames Financial Corporation has caused this certificate
to be signed by Xxxxxxx X. Xxxxxx, its Executive Vice President, General Counsel
and Secretary, this 30th day of September, 1999.
AAMES FINANCIAL CORPORATION
By: /s/ Xxxxxxx X. Xxxxxx
------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Executive Vice President,
General Counsel and Secretary
CERTIFICATE OF AMENDMENT
TO THE
CERTIFICATE OF INCORPORATION
OF
AAMES FINANCIAL CORPORATION
(A DELAWARE CORPORATION)
The undersigned Xxxxxxx X. Xxxxxx the Executive Vice President, General
Counsel and Secretary, respectively, of Aames Financial Corporation (the
"Corporation"), a corporation organized and existing under and by virtue of the
General Corporation Law of the State of Delaware (the "DGCL"), do hereby certify
that the following amendments were adopted in accordance with the provisions of
Section 242 of the DGCL:
The text of the first paragraph of Article FOURTH of the Certificate of
Incorporation of the Corporation is hereby amended and restated to read in full
as follows:
FOURTH: The total number of shares which the Corporation shall have
the authority to issue is 600,000,000, consisting of 400,000,000 shares of
common stock, par value $0.001 per share (the "Common Stock") and
200,000,000 shares of preferred stock, par value $0.001 per share (the
"Preferred Stock").
Simultaneously with the effective date of this amendment (the
"EFFECTIVE DATE"), each share of the Corporation's Series B Convertible
Preferred Stock having a par value of $0.001 per share issued and
outstanding immediately prior to the Effective Date (the "PRE-SPLIT SERIES
B PREFERRED STOCK") shall automatically and without any action on the part
of the holder thereof be reclassified as and changed into one thousand
(1,000) shares of Series B Convertible Preferred Stock, par value of $0.001
per share (the "POST-SPLIT SERIES B STOCK"). Each holder of a certificate
or certificates which immediately prior to the Effective Date represented
outstanding shares of Pre-Split Series B Convertible Preferred Stock (the
"PRE-SPLIT SERIES B CERTIFICATES," whether one or more) shall be entitled
to receive upon surrender of such Pre-Split Series B Certificates to the
Corporation's Secretary for cancellation, a certificate or certificates
(the "POST-SPLIT SERIES B CERTIFICATES," whether one or more) representing
the number of whole shares of Post-Split Series B Convertible Preferred
Stock into which and for which the shares of Pre-Split Series B Convertible
Preferred Stock formerly represented by such Pre-Split Series B
Certificates so surrendered, are reclassified pursuant to the terms hereof.
From and after the Effective Date, Pre-Split Series B Certificates shall
represent only the right to receive Post-Split Series B Certificates
pursuant to the provisions hereof. If more than one Pre-Split Series B
Certificate shall be surrendered at one time for the account of the same
stockholder, the number of full shares of Post-Split Series B Convertible
Preferred Stock for which the Post-Split Series B Certificates shall be
issued shall be computed on the basis of the aggregate number of shares
represented by the Pre-Split Series B Certificates so surrendered. If any
Post-Split Series B Certificate is to be issued in a name other than that
in which the Pre-Split Series B Certificate surrendered for exchange are
issued, the Pre-Split Series B Certificates so surrendered shall be
properly endorsed and otherwise in proper form for transfer, and the person
or persons requesting such exchange shall affix any requisite stock
transfer tax stamps to the Pre-Split Series B Certificates surrendered, or
provide funds for their purchase, or establish to the satisfaction of the
Corporation's Secretary that such taxes are not payable;
Simultaneously with the Effective Date, each share of the
Corporation's Series C Convertible Preferred Stock having a par value of
$0.001 per share issued and outstanding
immediately prior to the Effective Date (the "PRE-SPLIT SERIES C PREFERRED
STOCK") shall automatically and without any action on the part of the
holder thereof be reclassified as and changed into one thousand (1,000)
shares of Series C Convertible Preferred Stock, par value of $0.001 per
share (the "POST-SPLIT SERIES C STOCK"). Each holder of a certificate or
certificates which immediately prior to the Effective Date represented
outstanding shares of Pre-Split Series C Convertible Preferred Stock (the
"PRE-SPLIT SERIES C CERTIFICATES," whether one or more) shall be entitled
to receive upon surrender of such Pre-Split Series C Certificates to the
Corporation's Secretary for cancellation, a certificate or certificates
(the "POST-SPLIT SERIES C CERTIFICATES," whether one or more) representing
the number of whole shares of Post-Split Series C Convertible
Preferred Stock into which and for which the shares of Pre-Split
Series C Convertible Preferred Stock formerly represented by such Pre-Split
Series C Certificates so surrendered, are reclassified pursuant to the
terms hereof. From and after the Effective Date, Pre-Split Series C
Certificates shall represent only the right to receive Post-Split Series C
Certificates pursuant to the provisions hereof. If more than one Pre-Split
Series C Certificate shall be surrendered at one time for the account of
the same stockholder, the number of full shares of Post-Split Series C
Convertible Preferred Stock for which the Post-Split Series C Certificates
shall be issued shall be computed on the basis of the aggregate number of
shares represented by the Pre-Split Series C Certificates so surrendered.
If any Post-Split Series C Certificate is to be issued in a name other than
that in which the Pre-Split Series C Certificate surrendered for exchange
are issued, the Pre-Split Series C Certificates so surrendered shall be
properly endorsed and otherwise in proper form for transfer, and the person
or persons requesting such exchange shall affix any requisite stock
transfer tax stamps to the Pre-Split Series C Certificates surrendered, or
provide funds for their purchase, or establish to the satisfaction of the
Corporation's Secretary that such taxes are not payable;
The Corporation's Series A Preferred Stock shall not be affected by
the filing of this Amendment.
The text of Article III, Subsection D(2) of the Series B Certificate of
Designations of the Corporation is hereby amended and restated to read in full
as follows:
2. If the Recapitalization is not consummated prior to the earlier to
occur of September 30, 1999 and the date of a meeting of the stockholders
of the Company at which any proposal necessary to consummate the
Recapitalization is defeated, the Dividend Rate shall be deemed to be 15%
per annum during the period commencing on such date and ending on the date
the Recapitalization is consummated.
The text of Article III, Subsection D(2) of the Series C Certificate of
Designations of the Corporation is hereby amended and restated to read in full
as follows:
2. If the Recapitalization is not consummated prior to the earlier to
occur of September 30, 1999 and the date of a meeting of the stockholders
of the Company at which any proposal necessary to consummate the
Recapitalization is defeated, the Dividend Rate shall be deemed to be 15%
per annum during the period commencing on such date and ending on the date
the Recapitalization is consummated."
The Effective Date of this Certificate of Amendment is September 30, 1999
at 11:59 p.m., eastern time.
IN WITNESS WHEREOF, the undersigned have executed this Certificate of
Amendment to the Certificate of Incorporation of the Corporation as of this 30th
of September, 1999.
By: /s/ Xxxxxxx X. Xxxxxx
------------------------------
Xxxxxxx X. Xxxxxx
Executive Vice President,
General Counsel and Secretary
CERTIFICATE OF AMENDMENT
TO THE
CERTIFICATE OF INCORPORATION
OF
AAMES FINANCIAL CORPORATION
(A DELAWARE CORPORATION)
The undersigned Xxxx X. Xxxxxx, Xx. the Secretary of Aames Financial
Corporation (the "Corporation"), a corporation organized and existing under and
by virtue of the General Corporation Law of the State of Delaware ("DGCL"), does
hereby certify that the following amendments were adopted in accordance with the
provisions of Section 242 of the DGCL:
The text of the second paragraph of Article SEVENTH of the Certificate of
Incorporation of the Corporation is hereby amended and restated to read in full
as follows:
Any action required or permitted to be taken at any annual or special
meeting of stockholders may be taken either upon the vote of the
stockholders at an annual or special meeting duly noticed and called, as
provided in the Bylaws of the Corporation, or may be taken by written
consent of the stockholders pursuant to the GCL.
IN WITNESS WHEREOF, the undersigned have executed this Certificate of
Amendment to the Certificate of Incorporation of the Corporation as of this 15th
day of March, 2000.
By: /s/ Xxxx X. Xxxxxx, Xx.
------------------------------
Xxxx X. Xxxxxx, Xx.
Secretary
CERTIFICATE OF AMENDMENT
TO THE
CERTIFICATE OF INCORPORATION
OF
AAMES FINANCIAL CORPORATION
(A DELAWARE CORPORATION)
The undersigned Xxxx X. Xxxxxx, Xx. the Secretary of Aames Financial
Corporation (the "Corporation"), a corporation organized and existing under and
by virtue of the General Corporation Law of the State of Delaware ("DGCL"), does
hereby certify that the following amendments were adopted in accordance with the
provisions of Section 242 of the DGCL:
The Certificate of the Voting Powers, Designations, Preferences and
Relative, Participating, Optional or Other Special Rights, and Qualifications,
Limitations or Restrictions thereof, of Series C Convertible Preferred Stock of
the Corporation is hereby amended as follows:
(i) the references to Series B Preferred Stock in the twelfth and
fourteenth lines of paragraph A of Section III, each of which was in
error, shall be amended to instead refer to Series C Preferred Stock;
and
(ii) the definition of "Post-Recapitalization Stated Value" shall be
amended by inserting immediately after "$1.00" and before the period
at the end of the sentence "; provided, however, that from and after
the effective date of the Reverse Series C Preferred Stock Split
approved by the stockholders of the Company at the 1999 Annual Meeting
of Stockholders (the "Reverse Series C Preferred Stock Split") the
Post-Recapitalization Stated Value shall be equal to $5.00, subject to
subsequent adjustments for splits, reclassifications, recombinations
or similar events".
IN WITNESS WHEREOF, the undersigned have executed this Certificate of
Amendment to the Certificate of Incorporation of the Corporation as of this 15th
day of March, 2000.
By: /s/ Xxxx X. Xxxxxx, Xx.
------------------------------
Xxxx X. Xxxxxx, Xx.
Secretary
CERTIFICATE OF AMENDMENT
TO THE
CERTIFICATE OF INCORPORATION
OF
AAMES FINANCIAL CORPORATION
(A DELAWARE CORPORATION)
The undersigned Xxxx X. Xxxxxx, Xx. the Secretary of Aames Financial
Corporation (the "Corporation"), a corporation organized and existing under and
by virtue of the General Corporation Law of the State of Delaware ("DGCL"), do
hereby certify that the following amendments were adopted in accordance with the
provisions of Section 242 of the DGCL:
The first paragraph of Article FOURTH of the Certificate of Incorporation
of the Corporation is amended and restated in its entirety to read in full as
follows:
FOURTH: The total number of shares which the Corporation shall have
the authority to issue is 600,000,000, consisting of 400,000,000 shares of
common stock, par value $0.001 per share (the "Common Stock") and
200,000,000 shares of preferred stock, par value $0.001 per share (the
"Preferred Stock").
The following two paragraphs are hereby added to Article FOURTH of the
Certificate of Incorporation of the Corporation after the first paragraph but
before the second paragraph:
Simultaneously with the effective date of this amendment (the
"EFFECTIVE DATE"), each share of the Corporation's common stock, par value
$0.001 per share issued and outstanding immediately prior to the Effective
Date (the "PRE-SPLIT COMMON STOCK") shall automatically and without any
action on the part of the holder thereof be reclassified as and changed
(the "Reverse Common Stock Split") into 0.2 of one share of common stock,
par value of $0.001 per share (the "POST-SPLIT COMMON STOCK"). Each holder
of a certificate or certificates which immediately prior to the Effective
Date represented outstanding shares of Pre-Split Common Stock (the
"PRE-SPLIT CERTIFICATES," whether one or more) shall be entitled to receive
upon surrender of such Pre-Split Certificates to the Corporation's
Secretary for cancellation, a certificate or certificates (the "POST-SPLIT
CERTIFICATES," whether one or more) representing the number of whole shares
of Post-Split Common Stock into which and for which the shares of Pre-Split
Common Stock formerly represented by such Pre-Split Certificates so
surrendered, are reclassified pursuant to the terms hereof. No script or
fractional shares certificates will be issued for Pre-Split Common Stock in
connection with the Reverse Common Stock Split. Each holder of shares of
Old Common Stock not divisible by five as of the effective date of the
Reverse Common Stock Split will, in lieu of receiving fractional shares,
have the option for 60 days after such effective date to either (a)
purchase from other stockholders otherwise entitled to fractional shares a
sufficient fractional share interest to 'round-up' to a full share of New
Common Stock, to the extent such fractions of shares are available from
other stockholders, at a price equal to the product of (x) the fractional
shares to which a holder would otherwise be entitled, multiplied by (y)
five times the closing sale price per share of the Old Common Stock as
listed on the New York Stock Exchange ("NYSE") on the business day prior to
the Effective Date, or (b) sell such holder's fractional share interest to
other stockholders at the same price (the "Fractional Share Program"). The
period during which stockholders will be able to make the aforementioned
election will expire 60 days after the Effective Date. Any stockholder
whose transmittal form is not received by the Exchange Agent selected by
the Corporation within
such period will be deemed to have elected to sell any fractional share
interest held by such stockholder. Any fractional share interests not
purchased by other stockholders will be aggregated and sold on the open
market by the Exchange Agent. From and after the Effective Date, Pre-Split
Certificates shall represent only the right to receive Post-Split
Certificates pursuant to the provisions hereof. If more than one Pre-Split
Certificate shall be surrendered at one time for the account of the same
stockholder, the number of full shares of Post-Split Common Stock for which
the Post-Split Certificates shall be issued shall be computed on the basis
of the aggregate number of shares represented by the Pre-Split Certificates
so surrendered. If any Post-Split Certificate is to be issued in a name
other than that in which the Pre-Split Certificate surrendered for exchange
are issued, the Pre-Split Certificates so surrendered shall be properly
endorsed and otherwise in proper form for transfer, and the person or
persons requesting such exchange shall affix any requisite stock transfer
tax stamps to the Pre-Split Certificates surrendered, or provide funds for
their purchase, or establish to the satisfaction of the Corporation's
Secretary that such taxes are not payable. From and after the Effective
Date the amount of capital represented by the shares of Post-Split Common
Stock into which and for which the shares of the Pre-Split Common Stock are
reclassified pursuant to the terms hereof shall be the same as the amount
of capital represented by the shares of Pre-Split Common Stock so
reclassified, until thereafter reduced or increased in accordance with
applicable law;
Simultaneously with the Effective Date, each share of the
Corporation's Series C Convertible Preferred Stock, par value of $0.001 per
share issued and outstanding immediately prior to the Effective Date (the
"PRE-SPLIT SERIES C PREFERRED STOCK") shall automatically and without any
action on the part of the holder thereof be reclassified as and changed
(the "REVERSE SERIES C PREFERRED STOCK SPLIT") into 0.2 of one share of
Post-Split Series C Convertible Preferred Stock, par value $0.001 per share
("POST-SPLIT SERIES C PREFERRED STOCK"). Each holder of a certificate or
certificates which immediately prior to the Effective Date represented
outstanding shares of Pre-Split Series C Preferred Stock (the "PRE-SPLIT
SERIES C PREFERRED CERTIFICATES," whether one or more) shall be entitled to
receive upon surrender of such Pre-Split Series C Preferred Certificates to
the Corporation's Secretary for cancellation, a certificate or certificates
(the "POST-SPLIT SERIES C CERTIFICATES," whether one or more) representing
the number of whole shares of Post-Split Series C Preferred Stock into
which and for which the shares of Pre-Split Series C Preferred Stock
formerly represented by such Pre-Split Series C Preferred Certificates so
surrendered, are reclassified pursuant to the terms hereof. No script or
fractional shares certificates will be issued for Pre-Split Series C
Preferred Stock in connection with the Reverse Series C Preferred Stock
Split. Each holder of shares of Old Series C Preferred Stock not divisible
by five as of the effective date of the Reverse Series C Preferred Stock
Split will, in lieu of receiving fractional shares, have the option for 60
days after such effective date to either (a) purchase from other
stockholders otherwise entitled to fractional shares a sufficient
fractional share interest to 'round-up' to a full share of New Series C
Preferred Stock, to the extent such fractions of shares are available from
other stockholders, at a price equal to the product of (x) the fractional
shares to which a holder would otherwise be entitled, multiplied by (y)
five times the closing sale price per share of the Old Common Stock as
listed on the NYSE on the business day prior to the Effective Date, or (b)
sell such holder's fractional share interest to other stockholders at the
same price (the "Fractional Share Program"). The period during which
stockholders will be able to make the aforementioned election will expire
60 days after the Effective Date. Any stockholder whose transmittal form is
not received by the Exchange Agent selected by the Corporation within such
period will be deemed to have elected to sell any fractional share interest
held by such stockholder. Any fractional share interests not purchased by
other stockholders will be aggregated and sold on the open market by the
Exchange Agent. From
and after the Effective Date, Pre-Split Series C Certificates shall
represent only the right to receive Post-Split Series C Certificates
pursuant to the provisions hereof. If more than one Pre-Split Series C
Certificate shall be surrendered at one time for the account of the same
stockholder, the number of full shares of Post-Split Series C Preferred
Stock for which the Post-Split Series C Certificates shall be issued shall
be computed on the basis of the aggregate number of shares represented by
the Pre-Split Series C Certificates so surrendered. If any Post-Split
Series C Certificate is to be issued in a name other than that in which the
Pre-Split Series C Certificate surrendered for exchange are issued, the
Pre-Split Series C Certificates so surrendered shall be properly endorsed
and otherwise in proper form for transfer, and the person or persons
requesting such exchange shall affix any requisite stock transfer tax
stamps to the Pre-Split Series C Certificates surrendered, or provide funds
for their purchase, or establish to the satisfaction of the Corporation's
Secretary that such taxes are not payable. From and after the Effective
Date the amount of capital represented by the shares of Post-Split Series C
Preferred Stock into which and for which the shares of the Pre-Split Series
C Preferred Stock are reclassified pursuant to the terms hereof shall be
the same as the amount of capital represented by the shares of Pre-Split
Series C Preferred Stock so reclassified, until thereafter reduced or
increased in accordance with applicable law;
The following paragraph is hereby added to the end of Article FOURTH of the
Certificate of Incorporation of the Corporation:
The Corporation's Series A Preferred Stock and Series B Preferred
Stock shall not be affected by the filing of this Amendment.
The Effective Date of this Certificate of Amendment is April 14, 2000 at
12:01 a.m. eastern time.
IN WITNESS WHEREOF, the undersigned have executed this Certificate of
Amendment to the Certificate of Incorporation of the Corporation as of this 13th
day of April, 2000.
By: /s/ Xxxx X. Xxxxxx, Xx.
------------------------------
Xxxx X. Xxxxxx, Xx.
Secretary
EXHIBIT B
FORM OF WARRANT
EXHIBIT B
THIS WARRANT AND THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY
STATE AND MAY NOT BE SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH
REGISTRATION OR AN EXEMPTION THEREFROM UNDER SUCH ACT AND UNDER ANY SUCH
APPLICABLE STATE LAWS, OR IN VIOLATION OF THE PROVISIONS OF THIS WARRANT.
WARRANT
To Purchase Series C Convertible Preferred Stock of
AAMES FINANCIAL CORPORATION
TABLE OF CONTENTS
Page
ARTICLE 1. DEFINITIONS.........................................................1
ARTICLE 2. EXERCISE OF WARRANT.................................................3
Section 2.1. Manner of Exercise...........................................3
Section 2.2. Payment of Taxes.............................................5
Section 2.3. Fractional Shares............................................5
ARTICLE 3. TRANSFER, DIVISION AND COMBINATION..................................5
Section 3.1. Transfer.....................................................5
Section 3.2. Division and Combination.....................................5
Section 3.3. Expenses.....................................................6
Section 3.4. Maintenance of Books.........................................6
ARTICLE 4. ADJUSTMENTS.........................................................6
Section 4.1. Stock Dividends, Subdivisions, Combinations and
Reclassifications............................................6
Section 4.2. Issuance of Additional Shares of Series C Preferred
Stock or Securities..........................................7
Section 4.3. Certain Other Distributions..................................8
Section 4.4. Other Provisions Applicable to Adjustments Under This
Section......................................................8
Section 4.5. Reorganization, Reclassification, Merger, Consolidation
or Disposition of Assets....................................10
Section 4.6. Notices.....................................................10
Section 4.7. Certificates................................................11
ARTICLE 5. NO IMPAIRMENT......................................................11
ARTICLE 6. RESERVATION AND AUTHORIZATION OF SERIES C PREFERRED STOCK;
REGISTRATION WITH OR APPROVAL OF ANY GOVERNMENTAL
AUTHORITY..........................................................12
ARTICLE 7. STOCK AND WARRANT TRANSFER BOOKS...................................12
ARTICLE 8. RESTRICTIONS ON TRANSFERABILITY....................................12
Section 8.1. Restrictive Legend..........................................12
Section 8.2. Transfers...................................................13
Section 8.3. Termination of Restrictions.................................13
ARTICLE 9. SUPPLYING INFORMATION..............................................14
ARTICLE 10. LOSS OR MUTILATION................................................14
ARTICLE 11. OFFICE OF THE COMPANY.............................................14
ARTICLE 12. REGISTRATION RIGHTS...............................................14
ARTICLE 13. LIMITATION OF LIABILITY...........................................15
ARTICLE 14. REPRESENTATION OF HOLDER..........................................15
ARTICLE 15. MISCELLANEOUS.....................................................15
Section 15.1. Nonwaiver and Expenses.....................................15
Section 15.2. No Rights As Stockholder...................................15
Section 15.3. Notice Generally...........................................15
Section 15.4. Successors and Assigns.....................................16
Section 15.5. Amendment..................................................16
Section 15.6. Severability...............................................16
Section 15.7. Headings...................................................16
Section 15.8. Governing Law..............................................16
Section 15.9. Mutual Waiver of Jury Trial................................16
THIS WARRANT AND THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY
STATE AND MAY NOT BE SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH
REGISTRATION OR AN EXEMPTION THEREFROM UNDER SUCH ACT AND UNDER ANY SUCH
APPLICABLE STATE LAWS, OR IN VIOLATION OF THE PROVISIONS OF THIS WARRANT.
WARRANT
To Purchase 5,000,000 Shares of
Series C Convertible Preferred Stock of
AAMES FINANCIAL CORPORATION
THIS IS TO CERTIFY THAT Specialty Finance Partners, a Bermuda general
partnership ("SFP") or its registered assigns, is entitled, at any time prior to
May __, 2005 (the "Expiration Date"), to purchase from Aames Financial
Corporation, a Delaware corporation (the "Company"), 5,000,000 shares of Series
C Convertible Preferred Stock, par value $0.001 per share, of the Company (the
"Series C Preferred Stock"), subject to adjustment as provided herein, in whole
or in part, including fractional parts, at a purchase price of $[_____] per
share (the "Exercise Price"), subject to adjustment as set forth herein, all on
the terms and conditions and pursuant to the provisions hereinafter set forth.
Capitalized terms not otherwise defined herein are used as defined in the
Preferred Stock Purchase Agreement.
ARTICLE 1.
DEFINITIONS
As used in this Warrant, the following terms have the respective meanings
set forth below:
"Additional Shares of Series C Preferred Stock" shall mean all shares of
Series C Preferred Stock issued by the Company after the Issue Date, other than
Warrant Stock.
"Business Day" shall mean any day that is not a Saturday or Sunday or a day
on which banks are required or permitted to be closed in the State of New York.
"SFP" shall have the meaning set forth in the first paragraph hereof.
"Commission" shall mean the Securities and Exchange Commission.
"Common Stock" shall mean the Common Stock of the Company, par value $0.001
per share.
"Company" shall have the meaning set forth in the first paragraph hereof.
"Conversion Price" shall have the meaning set forth in Section 4.2 hereof.
"Convertible Securities" shall mean evidences of indebtedness shares of
stock or other securities which are convertible into or exchangeable, with or
without payment of additional consideration in cash or property, for Additional
Shares of Series C Preferred Stock, either immediately or upon the occurrence of
a specified date or a specified event.
"Current Market Price" shall mean, when used with reference to shares of
Series C Preferred Stock, the closing price per share of Common Stock on such
date and, when used with reference to shares of Series C Preferred Stock for any
period shall mean the average of the daily closing prices per share of Common
Stock for such period. The closing price for each day shall be the last sale
price, regular way, or, in case no such sale takes place on such day, the
average of the closing bid and asked prices, regular way, in either case as
reported in the principal consolidated transaction reporting system with respect
to securities listed or admitted to trading on the New York Stock Exchange or,
if the Common Stock is not listed or admitted to trading on the New York Stock
Exchange, as reported in the principal consolidated transaction reporting system
with respect to securities listed on the principal national securities exchange
on which the Common Stock is listed or admitted to trading or, if the Common
Stock is not listed or admitted to trading on any national securities exchange,
the last quoted sale price or, if not so quoted, the average of the high bid and
low asked prices in the over-the-counter market, as reported by the National
Association of Securities Dealers, Inc. National Market System is not quoted by
any such organization, the average of the closing bid and asked prices as
furnished by a professional market maker making a market in the Common Stock
selected by the Board of Directors of the Corporation. If the Common Stock is
not publicly held or so listed or publicly traded, "Current Market Price" shall
mean the Fair Market Value per share of Common Stock or of such other securities
as determined in good faith by the Board of Directors of the Corporation based
on an opinion of an independent investment banking firm with an established
national reputation as a value of securities, which opinion may be based on such
assumption as such firm shall deem to be necessary and appropriate.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended,
and the rules and regulations of the Commission thereunder.
"Exercise Price" shall have the meaning set forth in the first paragraph
hereof.
"Expiration Date" shall have the meaning set forth in the first paragraph
hereof.
"Fair Market Value" shall mean the amount which a willing buyer would pay a
willing seller in an arm's-length transaction.
"GAAP" shall mean generally accepted accounting principles in the United
States of America as from time to time in effect.
"holder" shall mean, as the context requires, the Person in whose name this
Warrant is registered on the books of the Company maintained for such purpose
and/or the Person holding any Warrant Stock.
"Issue Date" shall mean the date on which this Warrant is issued.
"Person" shall mean any individual, sole proprietorship, partnership, joint
venture, trust, corporation or other entity and shall include any successor (by
merger or otherwise) of such entity.
"Preferred Stock Purchase Agreement" shall mean the Preferred Stock
Purchase Agreement, dated as of May __, 2000 between the Company and SFP.
"Registration Rights Agreement" shall mean the Registration Rights
Agreement, dated as of December 23, 1999, between the Company and Capital Z
Financial Services Fund II, L.P.
"Restricted Series C Preferred Stock" shall mean shares of Series C
Preferred Stock which are, or which upon their issuance on the exercise of this
Warrant would be, evidenced by a certificate bearing the restrictive legend set
forth in Section 8.1(a).
"Securities Act" shall mean the Securities Act of 1933, as amended, and the
rules and regulations of the Commission thereunder.
"Series B Preferred Stock" shall mean the Series B Convertible Preferred
Stock of the Company, par value $0.001 per share.
"Series C Preferred Stock" shall mean the Series C Convertible Preferred
Stock of the Company, par value $0.001 per share.
"Subsidiary" shall mean any corporation of which an aggregate of more than
50% of the outstanding stock having ordinary voting power to elect a majority of
the board of
directors of such corporation (irrespective of whether, at the time, stock of
any other class or classes of such corporation shall have or might have voting
power by reason of the happening of any contingency) is at the time, directly or
indirectly, owned legally or beneficially by the Company and/or one or more
Subsidiaries of the Company.
"Trading Day" means a day on which the principal national securities
exchange on which the Series C Preferred Stock is listed or admitted to trading
is open for the transaction of business or, if the Series C Preferred Stock is
not listed or admitted to trading on any national securities exchange, a
Business Day.
"Transaction" shall have the meaning set forth in Section 4.5 hereof.
"transfer" shall mean any transfer, sale, encumbrance, hypothecation or
other disposition of this Warrant or any Warrant Stock or of any interest in
either thereof.
"Transfer Notice" shall have the meaning set forth in Section 8.2.
"Warrant Price" shall mean an amount equal to (i) the number of shares of
Series C Preferred Stock being purchased upon exercise of this Warrant pursuant
to Section 2.1, multiplied by (ii) the Exercise Price as of the date of such
exercise.
"Warrant Stock" shall mean the shares of Series C Preferred Stock purchased
by the holder of this Warrant upon the exercise thereof.
ARTICLE 2.
EXERCISE OF WARRANT
Section 2.1. MANNER OF EXERCISE. From and after the date hereof and until
5:00 P.M., New York time, on the Expiration Date, the holder may exercise this
Warrant for all or any part of the number of shares of Series C Preferred Stock
purchasable hereunder.
In order to exercise this Warrant, in whole or in part, the holder shall
deliver to the Company at its office at 2 California Plaza, 000 Xxxxx Xxxxx
Xxxxxx, 00xx Xxxxx, Xxx Xxxxxxx, Xxxxxxxxxx 00000, or at the office or agency
designated by the Company pursuant to Section 11, (i) a written notice of the
holder's election to exercise this Warrant, which notice shall specify the
number of shares of Series C Preferred Stock to be purchased, (ii) payment of
the Warrant Price in the manner provided below, and (iii) this Warrant. Such
notice shall be substantially in the form of the subscription form appearing at
the end of this Warrant as Exhibit A, duly executed by or on behalf of the
holder. Upon receipt thereof, the Company shall,
as promptly as practicable, and in any event within five (5) Business Days
thereafter, execute or cause to be executed and deliver or cause to be delivered
to the holder a certificate or certificates representing the aggregate number of
full shares of Series C Preferred Stock issuable upon such exercise, together
with cash in lieu of any fraction of a share, as hereinafter provided. The stock
certificate or certificates so delivered shall be, to the extent possible, in
such denomination or denominations as such holder shall request in the notice
and shall be registered in the name of the holder or, subject to Section 8, such
other name as shall be designated in the notice. This Warrant shall be deemed to
have been exercised and such certificate or certificates shall be deemed to have
been issued, and the holder or any other Person so designated to be named
therein shall be deemed to have become a holder of record of such shares for all
purposes, as of the date the notice, together with the cash, check or checks
and/or securities, if any, and this Warrant, are received by the Company as
described above and all taxes required to be paid by the holder, if any,
pursuant to Section 2.2 prior to the issuance of such shares have been paid. If
this Warrant shall have been exercised in part, the Company shall, at the time
of delivery of the certificate or certificates representing Warrant Stock,
deliver to the holder a new Warrant evidencing the rights of the holder to
purchase the unpurchased shares of Series C Preferred Stock called for by this
Warrant, which new Warrant shall in all other respects be identical with this
Warrant, or, at the request of the holder, appropriate notation may be made on
this Warrant and the same returned to the holder.
Payment of the Warrant Price shall be made at the option of the holder by
cash, wire transfer to an account in a bank located in the United States
designated for such purpose by the Company, or certified or official bank check,
or by transfer to the Company of shares of Series B Preferred Stock or Series C
Preferred Stock, or any combination thereof. In the event of the application
shares of Series B Preferred Stock or Series C Preferred Stock to the payment of
the Warrant Price, the amount to be credited to the payment of the Warrant Price
shall be stated value per share (as described in the Company's Certificate of
Incorporation, as amended) plus an amount per share equal to all accrued and
unpaid dividends thereon, whether or not declared, to the date of such exercise,
provided that no such credit shall be made with respect to any such dividends if
the holder of such shares held such shares on the record date therefor.
Section 2.2. PAYMENT OF TAXES. The Company shall pay all expenses in
connection with, and all taxes and other governmental charges that may be
imposed with respect to, the issue or delivery of the Warrant Shares, unless
such tax or charge is imposed by law upon the holder, in which case such taxes
or charges shall be paid by the holder. The Company shall not be required,
however, to pay any tax or other charge imposed in
connection with any transfer involved in the issue of any certificate for shares
of Series C Preferred Stock issuable upon exercise of this Warrant in any name
other than that of the holder, and in such case the Company shall not be
required to issue or deliver any stock certificate until such tax or other
charge has been paid or it has been established to the satisfaction of the
Company that no such tax or other charge is due.
Section 2.3. FRACTIONAL SHARES. The Company shall not be required to issue
a fractional share of Series C Preferred Stock upon exercise of this Warrant. As
to any fraction of a share which the holder of this Warrant would otherwise be
entitled to purchase upon such exercise, the Company shall pay a cash adjustment
in respect of such final fraction in an amount equal to the same fraction of the
Current Market Price per share of Common Stock on the date of exercise.
ARTICLE 3.
TRANSFER, DIVISION AND COMBINATION
Section 3.1. TRANSFER. Subject to compliance with Section 8, transfer of
this Warrant and all rights hereunder, in whole or in part, shall be registered
on the books of the Company to be maintained for such purpose, upon surrender of
this Warrant at the principal office of the Company referred to in Section 2.1
or the office or agency designated by the Company pursuant to Section 11,
together with a written assignment of this Warrant substantially in the form of
Exhibit B hereto duly executed by the holder or its agent or attorney and funds
sufficient to pay any transfer taxes payable upon the making of such transfer.
Upon such surrender and, if required, such payment, the Company shall, subject
to Section 8, execute and deliver a new Warrant or Warrants in the name(s) of
the assignee or assignees and in the denomination(s) specified in such
instrument of assignment, and shall issue to the assignor a new Warrant
evidencing the portion of this Warrant not so assigned, and this Warrant shall
promptly be canceled. A Warrant, if properly assigned in compliance with Section
8, may be exercised by a new holder for the purchase of shares of Series C
Preferred Stock without having a new Warrant issued.
Section 3.2. DIVISION AND COMBINATION. Subject to Section 8, this Warrant
may be divided or combined with other Warrants for the purchase of Series C
Preferred Stock upon presentation hereof at the aforesaid office or agency of
the Company, together with a written notice specifying the names and
denominations in which new Warrants are to be issued, signed by the holder or
its agent or attorney. Subject to compliance with Section 3.1 and with Section
8, as to any transfer which may be involved in such division or combination, the
Company shall execute and deliver a new Warrant or Warrants in exchange for the
Warrant or Warrants to be divided or combined in accordance with such notice.
Section 3.3. EXPENSES. The Company shall prepare, issue and deliver at its
own expense (other than transfer taxes) the new Warrant or Warrants under this
Section 3.
Section 3.4. MAINTENANCE OF BOOKS. The Company agrees to maintain, at its
aforesaid office or agency, books for the registration and the registration of
transfer of the Warrants.
ARTICLE 4.
ADJUSTMENTS
The number of shares of Series C Preferred Stock for which this Warrant is
exercisable, or the price at which such shares may be purchased upon exercise of
this Warrant, shall be subject to adjustment from time to time as set forth in
this Section 4. The Company shall give the holder notice of any event described
below which requires an adjustment pursuant to this Section 4 at the time of
such event.
Section 4.1. STOCK DIVIDENDS, SUBDIVISIONS, COMBINATIONS AND
RECLASSIFICATIONS. If the Company shall at any time or from time to time after
the Issue Date:
(a) pay a dividend or make a distribution, on the outstanding shares
of Series C Preferred Stock in Additional Shares of Series C Preferred
Stock,
(b) subdivide its outstanding shares of Series C Preferred Stock into
a larger number of shares of Series C Preferred Stock,
(c) combine its outstanding shares of Series C Preferred Stock into a
smaller number of shares of Series C Preferred Stock, or
(d) issue by reclassification of its shares of Series C Preferred
Stock any shares of capital stock of the Company,
then, and in each such case, the number of shares of Series C Preferred Stock
issuable upon exercise of the Warrants evidenced hereby immediately prior to
such event or the record date therefor, whichever is earlier, shall be adjusted
so that the holder of any Warrant evidenced hereby thereafter exercised shall be
entitled to receive the number of shares of Series C Preferred Stock or other
securities of the Company which such holder would have owned or have been
entitled to receive after the happening of any of the events described above,
had such Warrant been exercised immediately prior to the happening of such event
or the record date therefor, whichever is earlier. An adjustment made pursuant
to this Section 4.1 shall become effective (x) in the case of any such dividend
or distribution, immediately after the close of business on the record date for
the determination of holders of shares of Series C Preferred Stock entitled to
receive
such dividend or distribution, or (y) in the case of any such subdivision,
reclassification or combination, at the close of business on the day upon which
such corporate action becomes effective.
Section 4.2. ISSUANCE OF ADDITIONAL SHARES OF SERIES C PREFERRED STOCK OR
CONVERTIBLE SECURITIES. In the case the Corporation shall, after the Issue Date,
issue or sell:
(a) Additional Shares of Series C Preferred Stock at a price per
share, or
(b) Convertible Securities having a Conversion Price per share,
less than the Current Market Price (for a period of 15 consecutive Trading Days
prior to such date), then, and in each such case, the number of shares of Series
C Preferred Stock issuable upon exercise of the Warrants evidenced hereby shall
be adjusted so that the holder of each Warrant evidenced hereby shall be
entitled to receive, upon the exercise thereof, the number of shares of Series C
Preferred Stock determined by multiplying (A) the number of shares of Series C
Preferred Stock issuable upon exercise of the Warrants evidenced hereby on the
day immediately prior to such date by (B) a fraction, the numerator of which
shall be the sum of (1) the number of shares of Series C Preferred Stock
outstanding on the date on which such shares or Convertible Securities are
issued and (2) the number of Additional Shares of Series C Preferred Stock
issued, or into which the Convertible Securities may convert, and the
denominator of which shall be the sum of (x) the number of shares of Series C
Preferred Stock outstanding on such date and (y) the number of shares of Series
C Preferred Stock which the aggregate consideration receivable by the Company
for the total number of shares of Series C Preferred Stock so issued, or the
number of shares of Series C Preferred Stock which the aggregate of the
Conversion Price of such Convertible Securities so issued, would purchase at the
Current Market Price on such date.
An adjustment made pursuant to this Section 4.2 shall be made on the next
Business Day following the date on which any such issuance is made and shall be
effective retroactively immediately after the close of business on such date.
For purposes of this Section 4.2, the aggregate consideration receivable by the
Company in connection with the issuance of any securities shall be deemed to be
the sum of the aggregate offering price to the public (before deduction of
underwriting discounts or commissions and expenses payable to third parties),
and the "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 or
commissions and expenses payable to third parties) plus the minimum aggregate
amount of additional consideration, if any,
payable to the Corporation upon the conversion, exchange or exercise of any such
Convertible Securities.
Neither (A) the issuance of any shares of Series C Preferred Stock (whether
treasury shares or newly issued shares) pursuant to a dividend or distribution
on, or subdivision, combination or reclassification of, the outstanding shares
of Series C Preferred Stock requiring an adjustment in the number of shares of
Series C Preferred Stock issuable upon exercise of the Warrants evidenced hereby
pursuant to Section 4.1, or pursuant to any employee benefit plan or program of
the Company or pursuant to any option, warrant, right, or Convertible Security
outstanding as of the date hereof (including, but not limited to, the Rights,
the Series B Preferred Stock, the Series C Preferred Stock and the Warrants) nor
(B) the issuance of shares of Series C Preferred Stock pursuant thereto shall be
deemed to constitute an issuance of Series C Preferred Stock or Convertible
Securities by the Company to which this Section 4.2 applies.
Upon expiration of any Convertible Securities which shall not have been
exercised or converted and for which an adjustment shall have been made pursuant
to this Section 4.2, the Conversion Price computed upon the original issue
thereof shall upon expiration be recomputed as if the only additional shares of
Series C Preferred Stock issued were such shares of Series C Preferred Stock (if
any) actually issued upon exercise or conversion of such Convertible Securities
and the consideration received therefor was the consideration actually received
by the Corporation for the issue of such Convertible Securities (whether or not
exercised or converted) plus the consideration actually received by the
Corporation upon such exercise of conversion.
Section 4.2.0.0.0.1.1. [Reserved]
Section 4.3. OTHER PROVISIONS APPLICABLE TO ADJUSTMENTS UNDER THIS SECTION.
The following provisions shall be applicable to the making of adjustments
provided for in this Section 4:
(a) For purposes of this Section 4, the number of shares of Series C
Preferred Stock at any time outstanding shall not include any shares of
Series C Preferred Stock then owned or held by or for the account of the
Company.
(b) The term "dividend", as used in this Section 4 shall mean a
dividend or other distribution upon stock of the Company except pursuant to
the Rights Agreement. Notwithstanding anything in this Section 4 to the
contrary, the number of shares of Series C Preferred Stock issuable
upon exercise of the Warrants evidenced hereby shall not be adjusted as a
result of any dividend, distribution or issuance of securities of the
Company pursuant to the Rights Agreement.
(c) Notwithstanding anything in this Section 4 to the contrary, the
Company shall not be required to give effect to any adjustment in the
number of shares of Series C Preferred Stock issuable upon exercise of the
Warrants evidenced hereby unless and until the net effect of one or more
adjustments (each of which shall be carried forward), determined as above
provided, shall have resulted in a change in the number of shares of Series
C Preferred Stock issuable upon exercise of the Warrants evidenced hereby
by at least one-hundredth of one share of Series C Preferred Stock, and
when the cumulative net effect of more than one adjustment so determined
shall be to change the number of shares of Series C Preferred Stock
issuable upon exercise of the Warrants evidenced hereby by at least
one-hundredth of one share of Series C Preferred Stock, such change in the
number of shares of Series C Preferred Stock issuable upon exercise of the
Warrants evidenced hereby shall thereupon be given effect.
(d) The certificate of any firm of independent public accountants of
recognized standing selected by the Board of Directors of the Company
(which may be the firm of independent public accountants regularly employed
by the Company) shall be presumptively correct for any computation made
under this Section 4.
(e) If the Company shall take a record of the holders of its Series C
Preferred Stock for the purpose of entitling them to receive a dividend or
other distribution, and shall thereafter and before the distribution to
stockholders thereof legally abandon its plan to pay or deliver such
dividend or distribution, then, no adjustment in the number of shares of
Series C Preferred Stock issuable upon exercise of the Warrants evidenced
hereby shall be required by reason of the taking of such record.
(f) There shall be no adjustment of the number of shares of Series C
Preferred Stock issuable upon exercise of the Warrants evidenced hereby in
case of the issuance of any stock of the Company in a merger,
reorganization, acquisition or other similar transaction except as set
forth in Sections 4.1, 4.2 and 4.5.
(g) Notwithstanding anything herein to the contrary, the Company
agrees not to enter into any transaction which, by reason of any adjustment
hereunder, would cause the Exercise Price to be less than the par value per
share of Series C Preferred Stock.
(h) Upon each adjustment to the number of shares of Series C Preferred
Stock issuable upon exercise of the Warrants pursuant to Sections 4.1, 4.2
or 4.3, the Exercise Price effective immediately prior to the making of
such adjustment shall thereafter be adjusted to be the amount obtained by
(i) multiplying (A) the applicable number of shares of Series C Preferred
Stock issuable upon exercise of the Warrants immediately prior to such
adjustment by (B) the Exercise Price in effect immediately prior to such
adjustment and (ii) dividing the product so obtained by the number of
shares of Series C Preferred Stock issuable upon exercise of the Warrants
immediately after such adjustment.
Section 4.4. REORGANIZATION, RECLASSIFICATION, MERGER, CONSOLIDATION OR
DISPOSITION OF ASSETS. In case of any reorganization or reclassification of
outstanding shares of Series C Preferred Stock (other than a reclassification
covered by Section 4.1), or in case of any consolidation or merger of the
Company with or into another corporation, or in the case of any sale or
conveyance to another corporation of the property of the Company as an entirety
or substantially as an entirety (each of the foregoing being referred to as a
"Transaction"), each such Warrant then outstanding shall thereafter be
exercisable for, in lieu of the Series C Preferred Stock issuable upon such
exercise prior to consummation of the Transaction, the kind and amount of shares
of stock and other securities and property receivable (including cash) upon the
consummation of the Transaction by a holder of that number of shares of Series C
Preferred Stock issuable upon exercise of such Warrant immediately prior to the
Transaction (including, on a pro rata basis, the cash, securities or property
received by holders of Series C Preferred Stock in any tender or exchange offer
that is a step in the Transaction).
Section 4.5. NOTICES TO WARRANTHOLDERS. In case at any time or from time to
time, prior to the Expiration Date, the Company shall pay any dividend or make
any other distribution to the holders of its Series C Preferred Stock, or shall
offer for subscription pro rata to the holders of its Series C Preferred Stock
any additional shares of stock of any class or any other right, or there shall
be any capital reorganization or reclassification of the Series C Preferred
Stock of the Company or consolidation or merger of the Company with or into
another corporation, or any sale or conveyance to another corporation of the
property of the Company as an entirety or substantially as an entirety, or there
shall be a voluntary or involuntary dissolution, liquidation or winding up of
the Company, then, in any one or more of said cases the Company shall give at
least 20 days' prior written notice (the time of mailing of such notice shall be
deemed to be the time of giving thereof) to the registered holder of the
Warrants evidenced hereby at its address as shown on the books of the Company
maintained by the Transfer Agent thereof of the date on which (i) the books of
the Company shall close or a record shall be taken for such stock dividend,
distribution or subscription rights or (ii) such reorganization,
reclassification, consolidation, merger, sale or conveyance, dissolution,
liquidation or winding up shall take place, as the case may be, provided that in
the case of any Transaction to which Section 4.5 applies the Company shall give
at least 30 days' prior written notice as aforesaid. Such notice shall also
specify the date as of which the holders of the Series C Preferred Stock of
record shall participate in said dividend, distribution or subscription rights
or shall be entitled to exchange their Series C Preferred Stock for securities
or other property deliverable upon such reorganization, reclassification,
consolidation, merger, sale or conveyance or participate in such dissolution,
liquidation or winding up, as the case may be. Failure to give such notice shall
not invalidate any action so taken.
Section 4.6. CERTIFICATES. Upon any adjustment of the number of shares of
Series C Preferred Stock issuable upon exercise of the Warrants evidenced hereby
or of the Exercise Price, then, and in each such case, the Company shall
promptly deliver to the holders of the Warrants and the Series C Preferred
Stock, a certificate signed by the President or a Vice President and by the
Treasurer or an Assistant Treasurer or the Secretary or an Assistant Secretary
of the Company setting forth in reasonable detail the event requiring the
adjustment and the method by which such adjustment was calculated and specifying
the increased or decreased number of shares of Series C Preferred Stock issuable
upon exercise of the Warrants evidenced hereby and the Exercise Price then in
effect following such adjustment.
ARTICLE 5.
NO IMPAIRMENT
The Company shall not by any action including, without limitation, amending
its certificate of incorporation or through any reorganization, transfer of
assets, consolidation, merger, dissolution, issue or sale of securities or any
other voluntary action, avoid or seek to avoid the observance or performance of
any of the terms of this Warrant, but will at all times in good faith assist in
the carrying out of all such terms and in the taking of all such actions as may
be necessary or appropriate to protect the rights of the holder of the Warrant
against impairment. Without limiting the generality of the foregoing, the
Company will (a) not increase the par value of any shares of Series C Preferred
Stock receivable upon the exercise of this Warrant above the Exercise Price
immediately prior to such increase in par value, (b) take all such action as may
be necessary or appropriate in order that the Company may validly and legally
issue fully paid and nonassessable shares of Series C Preferred Stock, free and
clear of any liens, claims, encumbrances and restrictions (other than as
provided herein) upon the exercise of this Warrant, and (c) use its best efforts
to obtain all such authorizations, exemptions or consents from any public
regulatory body having jurisdiction thereof as may be necessary to enable the
Company to perform its obligations under
this Warrant.
Upon the request of the holder of the Warrant, the Company will at any time
during the period this Warrant is outstanding acknowledge in writing, in form
satisfactory to the holder of this Warrant, the continuing validity of this
Warrant and the obligations of the Company hereunder.
ARTICLE 6.
RESERVATION AND AUTHORIZATION OF
SERIES C PREFERRED STOCK; REGISTRATION WITH OR
APPROVAL OF ANY GOVERNMENTAL AUTHORITY
The Company covenants and agrees that, until the Expiration Date, the
Company shall at all times reserve and keep available for issue upon the
exercise of Warrants such number of its authorized but unissued shares of Series
C Preferred Stock as will be sufficient to permit the exercise in full of all
outstanding Warrants. All shares of Series C Preferred Stock which shall be so
issuable, when issued upon exercise of Warrants and payment therefor in
accordance with the terms of such Warrant, shall be duly and validly issued,
fully paid and nonassessable and free and clear of any liens, claims and
restrictions (other than as provided herein). No stockholder of the Company has
or shall have any preemptive rights to subscribe for such shares of Series C
Preferred Stock.
Before taking any action which would result in an adjustment in the number
of shares of Series C Preferred Stock for which this Warrant is exercisable or
in the Exercise Price, the Company shall obtain all such authorizations or
exemptions thereof, or consents thereto, as may be necessary from any public
regulatory body or bodies having jurisdiction thereof.
ARTICLE 7.
STOCK AND WARRANT TRANSFER BOOKS
The Company will not at any time, except upon dissolution, liquidation or
winding up of the Company, close its stock transfer books or Warrant transfer
books so as to result in preventing or delaying the exercise or transfer of any
Warrant.
ARTICLE 8.
RESTRICTIONS ON TRANSFERABILITY
The Warrants and the Warrant Stock shall not be transferred before
satisfaction of the conditions specified in this Section 8, which conditions are
intended to ensure compliance with the provisions of the Securities Act and
state securities laws with respect to the Transfer of any Warrant or any Warrant
Stock. The holder, by acceptance of this Warrant, agrees to be bound by the
provisions of this Section 8.
Section 8.1. RESTRICTIVE LEGEND.
(a) Except as otherwise provided in this Section 8, each certificate
for Warrant Stock initially issued upon the exercise of this Warrant, and
each certificate for Warrant Stock issued to any subsequent transferee of
any such certificate, shall be stamped or otherwise imprinted with a legend
in substantially the following form:
"The shares represented by this certificate have not been registered
under the Securities Act of 1933, as amended, or the securities laws
of any state and are subject to the conditions specified in a certain
Warrant dated May [___] 2000, originally issued by Aames Financial
Corporation. The shares represented by this certificate may not be
transferred in violation of such Act and laws, the rules and
regulations thereunder or the provisions of the Warrant. A copy of the
form of said Warrant is on file with the Secretary of Aames Financial
Corporation. The holder of this certificate, by acceptance of this
certificate, agrees to be bound by the provisions of such Warrant."
(b) Except as otherwise provided in this Section 8, each Warrant shall
be stamped or otherwise imprinted with a legend in substantially the
following form:
"This Warrant and the securities represented hereby have not been
registered under the Securities Act of 1933, as amended, or the
securities laws of any state and may not be sold or otherwise
transferred in the absence of such registration or an exemption
therefrom under such Act and under any such applicable state laws, or
in violation of the provisions of this Warrant."
Section 8.2. TRANSFERS. Prior to any transfer or attempted transfer of any
Warrants or any shares of Restricted Series C Preferred Stock, the holder of
such Warrants or Restricted Series C Preferred Stock shall give notice (a
"Transfer Notice") to the Company of such holder's intention to effect such
transfer, describing the manner and circumstances of the proposed transfer, and
obtain from counsel a written opinion addressed and reasonably satisfactory to
the Company that the proposed transfer of such Warrants or such Restricted
Series C Preferred Stock may be effected without registration under the
Securities Act and applicable state securities laws. After receipt of the
Transfer Notice and written opinion, the Company shall, within two Business Days
thereof, so notify the holder of such Warrants or such Restricted Series C
Preferred Stock and such holder shall thereupon be entitled to transfer such
warrants or such Restricted Series C Preferred Stock, in accordance with the
terms of the Transfer Notice. Each certificate, if any, evidencing
such shares of Restricted Series C Preferred Stock issued upon such transfer
shall bear the restrictive legend set forth in Section 8.1(a), and each Warrant
issued upon such transfer shall bear the restrictive legend set forth in Section
8.1(b), unless in the written opinion of counsel addressed to the Company such
legend is not required in order to ensure compliance with the Securities Act.
Section 8.3. TERMINATION OF RESTRICTIONS. Notwithstanding the foregoing
provisions of Section 8, the restrictions imposed by this Section 8 upon the
transferability of the Warrants, the Warrant Stock and the Restricted Series C
Preferred Stock (or Series C Preferred Stock issuable upon the exercise of the
Warrants) and the legend requirements of Section 8.1 shall terminate as to any
particular Warrant or share of Warrant Stock or Restricted Series C Preferred
Stock (or Series C Preferred Stock issuable upon the exercise of the Warrants)
(i) as to the Warrant Stock and Restricted Series C Preferred Stock, when and so
long as the resale of such security shall have been effectively registered under
the Securities Act and disposed of pursuant thereto, or (ii) as to the Warrant,
Warrant Stock and Restricted Series C Preferred Stock, when the holder of the
Warrant, Warrant Stock or Restricted Series C Preferred Stock shall have
delivered to the Company the written opinion of counsel addressed and reasonably
satisfactory to the Company stating that such legend is not required in order to
ensure compliance with the Securities Act. Whenever the restrictions imposed by
this Section shall terminate as to any share of Restricted Series C Preferred
Stock, as hereinabove provided, the holder thereof shall be entitled to receive
from the Company, at the Company's expense (except for any transfer taxes), a
new certificate representing such Series C Preferred Stock not bearing the
restrictive legend set forth in Section 8.1(a).
ARTICLE 9.
SUPPLYING INFORMATION
The Company shall cooperate with the holder of the Warrant and the holder
of Restricted Series C Preferred Stock in supplying such information as may be
reasonably requested by such holder or reasonably necessary for such holder to
complete and file any information reporting forms presently or hereafter
required by the Commission as a condition to the availability of an exemption
from the Securities Act for the sale of any Warrant or Restricted Series C
Preferred Stock.
ARTICLE 10.
LOSS OR MUTILATION
Upon receipt by the Company from any holder of evidence reasonably
satisfactory to the Company of the ownership of and the loss, theft, destruction
or mutilation of this Warrant and indemnity reasonably satisfactory to it and in
case of mutilation upon surrender and cancellation hereof, the Company will
execute
and deliver in lieu hereof a new Warrant of like tenor to the holder; provided,
in the case of mutilation, no indemnity shall be required if this Warrant in
identifiable form is surrendered to the Company for cancellation.
ARTICLE 11.
OFFICE OF THE COMPANY
As long as any of the Warrants remain outstanding, the Company shall
maintain an office or agency (which may be the principal executive offices of
the Company) where the Warrants may be presented for exercise, registration of
transfer, division or combination as provided in this Warrant.
ARTICLE 12.
REGISTRATION RIGHTS
The Warrant Stock issuable upon exercise of this Warrant are entitled to
the benefits of the Registration Rights Agreement. The Company shall keep a copy
of the Registration Rights Agreement, and any amendments thereto, at the office
or agency designated by the Company pursuant to Section 11 and shall furnish
copies thereof to the holder upon request.
ARTICLE 13.
LIMITATION OF LIABILITY
No provision hereof, in the absence of affirmative action by
the holder to purchase shares of Series C Preferred Stock, and no enumeration
herein of the rights or privileges of the holder hereof, shall give rise to any
liability of the holder for the purchase price of any Series C Preferred Stock
or as a stockholder of the Company, whether such liability is asserted by the
Company or by creditors of the Company.
ARTICLE 14.
REPRESENTATION OF HOLDER
The holder represents that it is acquiring the Warrant and the Warrant
Stock for the purpose of investment and not with a view to the resale or
distribution hereof or thereof; provided, that the disposition of holder's
property shall at all times be and remain within its control.
ARTICLE 15.
MISCELLANEOUS
Section 15.1. NONWAIVER AND EXPENSES. No course of dealing or any delay or
failure to exercise any right hereunder on the part of the parties shall operate
as a waiver of such right or otherwise prejudice the parties' rights, powers or
remedies. If the Company fails to comply with any provision of this Warrant, the
Company shall pay to the holder such amounts as shall be sufficient to cover any
costs and expenses including, but not
limited to, reasonable attorneys' fees incurred by the holder in collecting any
amounts due pursuant hereto or in otherwise enforcing any of its rights, powers
or remedies hereunder.
Section 15.2. NO RIGHTS AS STOCKHOLDER. The Person in whose name this
Warrant is registered shall be deemed the owner hereof and of the Warrants
evidenced hereby for all purposes. The registered holder of this Warrant shall
not be entitled to any rights whatsoever as a stockholder of the Company except
as herein provided.
Section 15.3. NOTICE GENERALLY. Any notice, demand, request, consent,
approval, declaration, delivery or other communication hereunder to be made
pursuant to the provisions of this Warrant shall be sufficiently given or made
if in writing and either delivered in person with receipt acknowledged or sent
by registered or certified mail, return receipt requested, postage prepaid,
addressed as follows:
(a) If to the holder, at its last known address appearing on the books
of the Company maintained for such purpose.
(b) If to the Company:
Aames Financial Corporation
2 California Plaza
000 Xxxxx Xxxxx Xxxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxx Xxxxxxxx
Fax No.: (000) 000-0000
with a copy to:
Troop Xxxxxxx Pasich Reddick & Xxxxx
0000 Xxxxxxx Xxxx Xxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: C. N. Xxxxxxxx Xxxxxxx, Esq.
Fax No.: (000) 000-0000
or at such other address as may be substituted by notice given as herein
provided. The giving of any notice required hereunder may be waived in writing
by the party entitled to receive such notice. Every notice, demand, request,
consent, approval, declaration, delivery or other communication hereunder shall
be deemed to have been duly given or served on the date on which personally
delivered, with receipt acknowledged, or three (3) Business Days after the same
shall have been deposited in the United States mail.
Section 15.4. SUCCESSORS AND ASSIGNS. Subject to the provisions of Sections
3.1 and 8, (i) this Warrant and the rights evidenced hereby shall inure to the
benefit of and be binding
upon the successors of the Company and the successors and assigns of the holder,
and (ii) the provisions of this Warrant are intended to be for the benefit of
all holders from time to time of this Warrant, and shall be enforceable by any
such holders.
Section 15.5. AMENDMENT. The Warrants may be modified or amended or the
provisions thereof waived with the written consent of the Company and the
holders of the majority of the portion of this Warrant then outstanding. Section
15.6. SEVERABILITY. Wherever possible, each provision of this Warrant shall be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Warrant shall be prohibited by or invalid under
applicable law, such provision shall be ineffective to the extent of such
prohibition or invalidity, without invalidating the remainder of such provision
or the remaining provisions of this Warrant. Section 15.7. HEADINGS. The
headings used in this Warrant are for the convenience of reference only and
shall not, for any purpose, be deemed a part of this Warrant.
Section 15.8. GOVERNING LAW. This Warrant shall be governed by and
construed in accordance with the laws of the State of Delaware, without giving
effect to conflicts of law principles thereof.
Section 15.10. MUTUAL WAIVER OF JURY TRIAL. BECAUSE DISPUTES ARISING IN
CONNECTION WITH COMPLEX FINANCIAL TRANSACTIONS ARE MOST QUICKLY AND ECONOMICALLY
RESOLVED BY AN EXPERIENCED AND EXPERT PERSON AND THE PARTIES WISH APPLICABLE
STATE AND FEDERAL LAWS TO APPLY (RATHER THAN ARBITRATION RULES), THE PARTIES
DESIRE THAT THEIR DISPUTES BE RESOLVED BY A JUDGE APPLYING SUCH APPLICABLE LAWS.
THEREFORE, TO ACHIEVE THE BEST COMBINATION OF THE BENEFITS OF THE JUDICIAL
SYSTEM AND OF ARBITRATION, THE PARTIES HERETO WAIVE ALL RIGHT TO TRIAL BY JURY
IN ANY ACTION, SUIT OR PROCEEDING BROUGHT TO ENFORCE OR DEFEND ANY RIGHTS OR
REMEDIES UNDER THIS WARRANT.
IN WITNESS WHEREOF, the Company has caused this Warrant to be duly executed
by its authorized officer on May [__], 2000.
AAMES FINANCIAL CORPORATION
By:
------------------------------
Name:
Title:
EXHIBIT A
SUBSCRIPTION FORM
[To be executed only upon exercise of Warrant]
The undersigned registered owner of this Warrant irrevocably exercises this
Warrant for the purchase of _____ Shares of Series C Preferred Stock of AAMES
FINANCIAL CORPORATION and herewith makes payment therefor, all at the price and
on the terms and conditions specified in this Warrant and requests that
certificates for the shares of Series C Preferred Stock hereby purchased (and
any securities or other property issuable upon such exercise) be issued in the
name of and delivered to __________________ whose address is
____________________ and, if such shares of Series C Preferred Stock shall not
include all of the shares of Series C Preferred Stock issuable as provided in
this Warrant, that a new Warrant of like tenor and date for the balance of the
shares of Series C Preferred Stock issuable hereunder be delivered to the
undersigned.
(Name of Registered Owner)
----------------------
(Signature of Registered owner)
----------------------
(Street Address)
----------------------
(City) (State) (Zip Code)
----------------------
NOTICE: The signature on this subscription must correspond with the name as
written upon the face of the within Warrant in every particular, without
alteration or enlargement or any change whatsoever.
EXHIBIT B
ASSIGNMENT FORM
FOR VALUE RECEIVED the undersigned registered owner of this Warrant hereby
sells, assigns and transfers unto the Assignee named below all of the rights of
the undersigned under this Warrant, with respect to the number of shares of
Series C Preferred Stock set forth below:
Name and Address of Assignee No. of Shares of Series C Preferred Stock
and does hereby irrevocably constitute and appoint ____________ attorney-in-fact
to register such transfer on the books of AAMES FINANCIAL CORPORATION maintained
for the purpose, with full power of substitution in the premises.
Dated:
Name:
Signature:
Witness:
NOTICE: The signature on this assignment must correspond with the name as
written upon the face of the within Warrant in every particular, without
alteration or enlargement or any change whatsoever.
