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EXHIBIT 10.32(c)    
  

 
 

THIRD AMENDMENT TO MASTER REPURCHASE AGREEMENT
  GOVERNING PURCHASES AND SALES OF MORTGAGE LOANS    
  

        This
Amendment, dated as of July 31, 2002 (the "Amendment"), to the Master Repurchase Agreement Governing Purchases and Sales of
Mortgage Loans, dated as of December 1, 2000, as amended by each of the First Amendment and the Second Amendment to the Master Repurchase Agreement Governing Purchases and Sales of Mortgage
Loans, dated as of June 21, 2001 (as amended, the "Agreement"), is made by and between LEHMAN BROTHERS BANK, FSB
("Buyer") and AAMES CAPITAL CORPORATION ("Seller" and, together with the Buyer, the
"Parties"). 

RECITALS 

        WHEREAS,
the Seller and the Buyer are parties to the Agreement, pursuant to which the Buyer has agreed, subject to the terms and conditions set forth in the Agreement, to purchase
certain Mortgage Loans owned by the Seller, including, without limitation, all rights of Seller to service and administer such Mortgage Loans. Terms used but not defined herein shall have the
respective meanings ascribed to such terms in the Agreement, as amended hereby. 

        WHEREAS,
the Parties wish to amend the Agreement to modify certain of the terms and conditions governing the purchase and sale of the Mortgage Loans. 

        NOW,
THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereto agree as follows: 

        Section 1.    Amendment.    

        1.1  In
connection with the Agreement, the Parties agree that the Agreement shall not terminate on July 31, 2002 and shall be extended until July 30, 2003 as
provided below; provided that all provisions hereof (other than such extension of the term) shall not be effective until on and after July 2, 2002. 

        1.2  The
definitions of "Final Repurchase Date", "Pricing Spread" and
"Purchase Price" in Section 2 of the Agreement are hereby deleted in their entirety and replaced with the following: 

"Final Repurchase Date" means July 30, 2003 or such earlier date on which all Purchased Mortgage Loans are required to be immediately repurchased
pursuant to Section 14(a). 

"Pricing Spread" means the rate specified in the Confirmation, which shall be equal to (i) on each date prior to the delivery to the Custodian of
the complete Mortgage Files with respect to the related Purchased Mortgage Loans, 1.50% and (ii) on each date on and after the delivery to the Custodian of such Mortgage Files, 1.00%. 

"Purchase Price" means on each Purchase Date, the price at which Purchased Mortgage Loans are transferred by Seller to Buyer or its designee (including
the Custodian) which shall be equal to, with respect to each Purchased Mortgage Loan that is not a Wet Ink Mortgage Loan, the lowest of (x) 95.5% of the Market Value of such Purchased Mortgage
Loan as determined by the Buyer in its sole discretion, (y) 97.0% of the Securitization Value of such Purchased Mortgage Loan as determined by the Buyer in its sole discretion and
(z) 98.5% (or, with respect to any Purchased Loan which is a Wet Ink Mortgage Loan, 97.0%) of the outstanding principal amount of such Purchased Mortgage Loan. 

        1.3  In
Section 3(f) of the Agreement, the reference in the third line to "$200,000,000" is hereby deleted and replaced with "$300,000,000". 

 

        1.4  In
Section 13(a) of the Agreement, clauses (xiii), (xix), (xx) and (xxi) are hereby deleted in their entirety and replaced with the following: 

        (xiii)Tangible
Net Worth of the Seller shall be less than $315,000,000; 

        (xix) the
aggregate amount of the Seller's cash, Cash Equivalents and available borrowing capacity on unencumbered assets that could be drawn against (taking into account
required haircuts) under committed warehouse facilities, on a consolidated basis and on any given day, shall be less than $5,000,000 at any time; 

        (xx) Seller
and its Affiliates shall at any time cease or fail to have warehouse facilities with other lenders or buyers (other than the Buyer pursuant to the Agreement) in
an amount equal to or greater than $600,000,000; or 

        (xxi) for
any two consecutive fiscal quarters of Guarantor after the date of this Agreement, Guarantor and its subsidiaries shall incur a loss on a consolidated basis in
accordance with GAAP. 

        1.5  In
Exhibit V of the Agreement, the representations and warranties in paragraphs (o) and (zz) are hereby deleted in their entirety and replaced with the
following: 

(o)    Loan-to-Value Ratio. The Mortgage Loans subject to Transactions do not have a weighted average cumulative
Loan-to-Value Ratio in excess of 85%. If a Mortgage Loan has a Loan-to-Value Ratio greater than 90% and less than or equal to 100%, the Purchase Price
of such Mortgage Loan together with the Purchase Price of Purchased Mortgage Loans secured by a first or a second lien on the related Mortgaged Properties subject to then outstanding Transactions
having a Loan-to-Value Ratio greater than 90% and less than or equal to 100% does not, in either case, exceed the greater of (x) 3% of the aggregate Purchase Price for
all Mortgage Loans which are subject to then outstanding Transactions and (y) $10,000,000. For purposes of this paragraph, the Loan-to-Value Ratio for A-MI
loans is reduced by the amount of coverage of Mortgage Insurance. 

(zz)    Wet Ink Mortgage Loans. The Purchase Price of a Wet Ink Mortgage Loan together with the Purchase Price of Purchased Mortgage Loans
which are Wet Ink Mortgage Loans does not exceed, during the period beginning on the third from last Business Day of each calendar month, through and including the seventh Business Day of next
succeeding calendar month, $80,000,000 and, at all other times, $50,000,000; provided that such amounts referred to above in this clause (zz) shall be
reduced to $50,000,000 and $35,000,000, respectively, in the event that the Guarantor has cash, Cash Equivalents and unused borrowing capacity on unencumbered assets that could be drawn against
(taking into account required haircuts) under committed warehouse and repurchase facilities in an amount less than either (a) $20,000,000, or (b) $17,500,000 in the event that Seller has
unused committed sale capacity on
unencumbered assets that could be sold under the Capital Z Residual Sale Agreement in an amount equal to not less than $10,000,000. 

        1.6  The
following new definitions are hereby inserted in Section 2 of the Agreement in their appropriate alphabetical location: 

"Capital Z Residual Sale Agreement" shall mean that certain Residual Sale Agreement, dated August 31, 2000, between Aames Capital Corporation and
Capital Z Investments, L.P., as amended, supplemented, restated or modified from time to time. 

"Cash Equivalents" shall mean (a) securities with maturities of 90 days or less from the date of acquisition issued or fully guaranteed or
insured by the United States Government or any agency thereof, (b) certificates of deposit and eurodollar time deposits with maturities of 90 days or less from the date of acquisition
and overnight bank deposits of any commercial 

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bank having capital and surplus in excess of $500,000,000, (c) repurchase obligations of any commercial bank satisfying the requirements of clause (b) of this definition, having a term
of not more than seven days with respect to securities issued or fully guaranteed or insured by the United States Government, (d) commercial paper of a domestic issuer rated at least
A-1 or the equivalent thereof by Standard and Poor's Ratings Group ("S&P") or P-1 or the equivalent thereof by Moody's Investors
Service, Inc. ("Moody's") and in either case maturing within 90 days after the day of acquisition, (e) securities with maturities
of 90 days or less from the date of acquisition issued or fully guaranteed by any state, commonwealth or territory of the United States, by any political subdivision or taxing authority of any
such state, commonwealth or territory or by any foreign government, the securities of which state, commonwealth, territory, political subdivision, taxing authority or foreign government (as the case
may be) are rated at least A by S&P or A by Moody's, (f) securities with maturities of 90 days or less from the date of acquisition backed by standby letters of credit issued by any
commercial bank satisfying the requirements of clause (b) of this definition or (g) shares of money market mutual or similar funds which invest exclusively in assets satisfying the
requirements of clauses (a) through (f) of this definition. 

        1.7  In
Exhibit V of the Agreement, the following new representation and warranty is hereby inserted in its appropriate alphabetical location: 

	(bbb)
	Mortgage Loans Purchased Through Clean-up Calls of Affiliate Securitizations. The Purchase Price of
Mortgage Loans subject to Transactions purchased by the Seller through clean-up calls of securitizations of Affiliates of the Seller which Mortgage Loans are Delinquent for 29 or fewer
days does not exceed $20,000,000. No Mortgage Loans subject to Transactions purchased by the Seller through clean-up calls of securitizations of Affiliates of the Seller are Delinquent for
30 or more days. 

        Seller
acknowledges and agrees that in determining the Market Value of any Mortgage Loans subject to Transactions which were purchased by the Seller through clean-up calls of
securitizations of Affiliates of the Seller, the Buyer may in its sole and absolute discretion determine the Market Value of such Mortgage Loans separate and apart from the Market Value of any other
Mortgage Loans. 

        1.8  The
following new affirmative covenants labeled clauses (o) and (p) are hereby inserted in Section 12 of the Agreement in their appropriate
alphabetical location: 

(o)    In
the event that the Seller or any of its Affiliates enters into a warehouse facility or other funding vehicle with any other Person (including, without limitation, a transaction
with a new counterparty or a renewal of an existing relationship) that is structured utilizing a "true sale" of mortgage loans to a bankruptcy-remote non-consolidated special purpose
entity ("SPE"), Buyer shall have the right to restructure the Agreement and replace the Agreement with a facility structured through an SPE. 

(p)    Seller
and its Affiliates shall not amend any other warehouse financing agreements (including, but not limited to, credit agreements or repurchase agreements) with other lenders or
buyers without the prior written approval of Buyer which approval shall not be unreasonably withheld, so long as the Seller provides to the Buyer the opportunity to amend this Agreement to incorporate
similar terms. 

        Section 2.    Covenants, Representations and Warranties of the
Parties.    

        2.1  Except
as expressly amended by Section 1 hereof, the Agreement remains unaltered and in full force and effect. Each of the Parties hereby reaffirms all terms and
covenants made in the Agreement as amended hereby. 

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        2.2  Each
of the Parties hereby represents and warrants to the other that (a) this Amendment constitutes the legal, valid and binding obligation of such Party,
enforceable against such Party in accordance with its terms, and (b) the execution and delivery by such Party of this Amendment has been duly authorized by all requisite corporate action on the
part of such Party and will not violate any provision of the organizational documents of such Party. 

        Section 3.    Effect upon the
Agreement.    

        3.1  Except
as specifically set forth herein, the Agreement shall remain in full force and effect and is hereby ratified and confirmed. All references to the "Agreement" in
the Master Repurchase Agreement Governing Purchases and Sales of Mortgage Loans shall mean and refer to the Master Repurchase Agreement Governing Purchases and Sales of Mortgage Loans as modified and
amended hereby. 

        3.2  The
execution, delivery and effectiveness of this Amendment shall not operate as a waiver of any right, power or remedy of any Party under the Agreement, or any other
document, instrument or agreement executed and/or delivered in connection therewith. 

        Section 4.    Governing Law.    

        THIS
AMENDMENT SHALL BE CONSTRUED, INTERPRETED AND GOVERNED BY THE LAW OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO THE CONFLICT OF LAWS PRINCIPLES THEREOF. 

        Section 5.    Counterparts.    

        This
Amendment may be executed in any number of counterparts, and all such counterparts shall together constitute the same agreement. 

        [SIGNATURE
PAGE FOLLOWS] 

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

	 	 	SELLER:
	 	 	 	 	 
	 	 	AAMES CAPITAL CORPORATION, as Seller
	 	 	 	 	 
	 	 	 	 	 
	 	 	By:	

	 	 	 	Name:	Jon Van Deuren
	 	 	 	Title:	Senior Vice President
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	BUYER:
	 	 	 	 	 
	 	 	LEHMAN BROTHERS BANK, FSB, as Buyer
	 	 	 	 	 
	 	 	 	 	 
	 	 	By:	

	 	 	 	Name:	 
	 	 	 	Title:	 

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EXHIBIT 10.32(c)

THIRD AMENDMENT TO MASTER REPURCHASE AGREEMENT GOVERNING PURCHASES AND SALES OF MORTGAGE LOANSQuickLinks
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EXHIBIT 10.32(d)    
  

 
 

GUARANTY    
  

        This GUARANTY, dated as of December 1, 2000, is made by AAMES FINANCIAL CORPORATION, a corporation organized under the laws of the State of Delaware
("Guarantor"), in favor of Lehman Brothers Bank, FSB, a corporation organized under the laws of the State of New York
("Lehman"). 

        As
an inducement to and in consideration for Lehman to enter into the Master Repurchase Agreement Governing Purchases and Sales of Mortgage Loans dated as of the date hereof (the
"Repurchase Agreement") between Lehman and Aames Capital Corporation, a wholly-owned subsidiary of the Guarantor
("Aames"), the Guarantor hereby unconditionally and irrevocably guarantees the punctual payment and performance when due, whether at stated maturity, by
acceleration or otherwise, of all obligations of Aames now or hereafter existing under the Repurchase Agreement (such obligations being the
"Obligations"), and agree to pay any and all expenses incurred by Lehman in enforcing any rights under this Guaranty. This Guaranty is a guaranty of
payment and not of collection. Lehman shall not be required to exhaust any right to remedy or take any action against Aames, any guarantor, any other person, any collateral or any credit support. 

        The
Guarantor guarantees that the Obligations will be paid or performed strictly in accordance with their terms. The liability of the Guarantor under this Guaranty shall be absolute and
unconditional irrespective of any defense whatsoever available to Aames or a guarantor, including but not limited to the following: (a) any lack of validity or enforceability or any Obligation
or any agreement or instrument related thereto; (b) any change in the time, manner or place of payment or performance of, or in any term of, all or any of the Obligations, or any other
amendment or waiver of or any consent to the departure from any Obligation or any agreement or instrument related thereto; (c) any exchange, release or non-perfection of any
collateral, or any release or amendment or waiver of or consent to departure from any other guaranty, for all or any of the Obligations; or (d) any law, regulation or order of any jurisdiction
affecting or purporting to affect any terms of any Obligation or of any agreement or instrument relating thereto or any of Lehman's rights with respect thereto (including, without limitation, any stay
imposed by the Federal bankruptcy laws). 

        This
Guaranty is a continuing guaranty and shall remain in full force and effect until the Obligations have been paid in full. 

        The
Guarantor hereby waives promptness, diligence, notice of acceptance and any other notice with respect to any of the Obligations or this Guaranty. This Guaranty shall continue to be
effective or be reinstated, as the case may be, if any payment of any of the Obligations is rescinded or must otherwise be returned by Lehman upon the insolvency, bankruptcy or reorganization of Aames
or otherwise, all as though such payment had not been made. 

        The
Guarantor will not exercise any rights which it may acquire by way of subrogation under this Guaranty, by any payment made hereunder or otherwise, until all the Obligations shall
have been paid in full. If any amount shall be paid to the Guarantor on account of such subrogation rights at any time when all the Obligations shall not have been paid in full, such amount shall be
held in trust for the benefit of Lehman and shall forthwith be paid to Lehman to be applied to the Obligations, whether matured or unmatured, in accordance with the terms of such Obligations and any
related agreement or instrument. 

        Any
and all payments made by the Guarantor hereunder shall be made free and clear of and without deduction from any and all present and future taxes, levies, deductions, charges or
withholdings and all liabilities with respect thereof, excluding taxes imposed on Lehman's income and franchise taxes imposed on Lehman by the jurisdiction under which Lehman is organized. 

 

        All
notices hereunder shall be in writing and sent or delivered: 

if
to Lehman: 

c/o
Lehman Brothers Bank, FSB

3 World Financial Center

New York, New York 10285

Attention: Fred Madonna and Steven Becker 

if
to the Guarantor: 

350
South Grand Avenue

Los Angeles, California 90071

Attention: Chief Financial Officer/General Counsel 

or
to either party at such other address(es) as may be specified in a written notice given in accordance herewith. 

        This
Guaranty shall be binding upon the Guarantor, its successors and assigns, and shall inure to the benefit of and be enforceable by Lehman and its successors, transferees and assigns. 

        THIS GUARANTY SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS (OTHER THAN CONFLICTS LAWS) OF THE STATE OF NEW YORK.

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        IN
WITNESS WHEREOF, the Guarantor has caused this Guaranty to be duly executed and delivered by its duly authorized officers as of the date first above written. 

	 	 	AAMES FINANCIAL CORPORATION
	

 	
 	

By:	
 	

/s/  JON D. VAN DEUREN      
 Name:  Jon D. Van Deuren

Title:    Senior Vice President

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EXHIBIT 10.32(d)

GUARANTY

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