Amendment No. 5 to the Master Loan & Security Agreement



 Exhibit 10.8 (e) 
  
 AMENDMENT NO. 5 
  
 AMENDMENT NO. 5, dated as of June 30, 2005 (this “Amendment”), to the Master Loan and Security Agreement, dated as of October 21, 2004
(as previously amended, supplemented or otherwise modified, the “Existing Loan Agreement”; as amended hereby and as further amended, restated, supplemented or otherwise modified and in effect from time to time, the “Loan
Agreement”), by and among AAMES CAPITAL CORPORATION (“Aames Capital”), AAMES FUNDING CORPORATION (“Aames Funding”), AAMES INVESTMENT CORPORATION (“Aames Investment”, together with Aames
Capital and Aames Funding, the “Borrowers”, each a “Borrower”) and MORGAN STANLEY BANK (the “Lender”). Capitalized terms used but not otherwise defined herein shall have the meanings given to them
in the Existing Loan Agreement. 
  
 RECITALS 
  
 The Borrowers and the Lender have agreed, subject to the terms and conditions
hereof, that the Existing Loan Agreement shall be amended to modify Section 7.14(d) of the Existing Loan Agreement. 
  
 Accordingly, the Borrowers and the Lender hereby agree, in consideration of the mutual premises and mutual obligations set forth herein, the receipt and
sufficiency of which is hereby acknowledged, that the Existing Loan Agreement is hereby amended as follows: 
  
 SECTION 1. Amendment. Section 7.14(d) of the Existing Loan Agreement is hereby amended and restated in its entirety as follows: 

 
 “(d) Maintenance of Profitability. Aames
Investment shall not permit Net Income before tax, generated over any two consecutive fiscal quarters, measured on the last day of each fiscal quarter, to be less than $1.00, commencing with respect to the two consecutive fiscal quarters ending on
September 30, 2005.” 
  
 SECTION 2. Conditions
Precedent. This Amendment and its provisions shall become effective on the first date (the “Amendment Effective Date”) on which all of the following conditions precedent shall have been satisfied: 
  
 2.1 On the Amendment Effective Date, the Lender shall have received the
following documents, each of which shall be satisfactory to the Lender in form and substance: 
  
 (a) Amendment. This Amendment, executed and delivered by a duly authorized officer of each of the Borrowers and the Lender. 
  
 (b) Other Documents. Such other documents as the Lender or counsel to the Lender may reasonably request. 

 
 2.2 No Default. On the Amendment Effective Date, (i) each Borrower
shall be in compliance with all the terms and provisions set forth in the Loan Agreement on its part to be observed or performed, (ii) the representations and warranties made and restated by the 










 
Borrowers pursuant to Section 3 of this Amendment shall be true and complete on and as of such date with the same force and effect as if made on and as of
such date, and (iii) no Default or Event of Default shall have occurred and be continuing on such date. 
  
 SECTION 3. Representations and Warranties. Each Borrower hereby represents and warrants to the Lender that it is in compliance with all the
terms and provisions set forth in the Loan Documents on its part to be observed or performed, and that no Default or Event of Default has occurred or is continuing, and hereby confirms and reaffirms the representations and warranties contained in
Section 6 of the Loan Agreement. 
  
 SECTION 4. Limited
Effect. Except as expressly amended and modified by this Amendment, the Existing Loan Agreement shall continue to be, and shall remain, in full force and effect in accordance with its terms; provided, however, that all references
therein and herein to the “Loan Documents” shall be deemed to include, in any event, this Amendment and each reference to the Loan Agreement in any of the Loan Documents shall be deemed to be a reference to the Existing Loan Agreement as
amended hereby. The execution of this Amendment by the Lender shall not operate as a waiver of any of its rights, powers or privileges under the Loan Agreement or under any of the other Loan Documents, except as expressly set forth herein.

  
 SECTION 5. Counterparts. This Amendment may be
executed by each of the parties hereto on any number of separate counterparts, each of which shall be an original and all of which taken together shall constitute one and the same instrument. Delivery of an executed counterpart of a signature page
to this Amendment in Portable Document Format (PDF) or by facsimile transmission shall be effective as delivery of a manually executed original counterpart thereof. 
  
 SECTION 6. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF NEW YORK. 
  
 [SIGNATURES FOLLOW] 
  

 -2- 








 IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed and delivered as of
the day and year first above written. 
  

			
	BORROWERS
	
	AAMES CAPITAL CORPORATION
		
	By	 	 /s/ Jon D. Van Deuren

	 	 	 Name: Jon D. Van Deuren

	 	 	 Title: Executive Vice President and Chief Financial Officer



  

			
	
	AAMES FUNDING CORPORATION
		
	By	 	 /s/ Jon D. Van Deuren

	 	 	 Name: Jon D. Van Deuren

	 	 	 Title: Executive Vice President and Chief Financial Officer



  

			
	
	AAMES INVESTMENT CORPORATION
		
	By	 	 /s/ Jon D. Van Deuren

	 	 	 Name: Jon D. Van Deuren

	 	 	 Title: Executive Vice President and Chief Financial Officer



  

 AMENDMENT NO. 5 









			
	LENDER
	
	MORGAN STANLEY BANK
		
	By	 	/s/ Paul Najarian
	 	 	 Name: Paul Najarian

	 	 	 Title: VP



  

 AMENDMENT NO. 5