**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 “LoanAgreement”), by and among AAMES CAPITAL CORPORATION (“Aames Capital”), AAMES FUNDING CORPORATION (“Aames Funding”), AAMES INVESTMENT CORPORATION (“Aames Investment”, together with AamesCapital 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 themin the Existing Loan Agreement. 

 

**RECITALS**

 

The Borrowers and the Lender have agreed, subject to the terms and conditionshereof, 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 andsufficiency 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. AamesInvestment 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 onSeptember 30, 2005.” 

 

**SECTION 2.**ConditionsPrecedent. 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 thefollowing 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 Borrowershall 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 ofsuch 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 theterms 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 inSection 6 of the Loan Agreement. 

 

**SECTION 4.**LimitedEffect. 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 referencestherein 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 asamended 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 beexecuted 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 pageto 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 OFTHE STATE OF NEW YORK. 

 

[SIGNATURES FOLLOW] 

 

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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed and delivered as ofthe 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