Exhibit 10.1(b)

 

AMENDED AND RESTATED

INDEMNIFICATION AGREEMENT

 

This Amended and Restated Indemnification Agreement (this “Agreement”), dated as
of                     , 2004, is made by and between AAMES FINANCIAL
CORPORATION, a Delaware corporation (the “Company”), and                     
(“Indemnitee”).

 

RECITALS

 

A. The Company and Indemnitee recognize the increasing difficulty in obtaining
directors’ and officers’ liability insurance, the significant increases in the
cost of such insurance and the general reductions in the coverage of such
insurance.

 

B. The Company and Indemnitee further recognize the substantial increase in
corporate litigation in general, subjecting officers and directors to expensive
litigation risk at the same time that the availability and coverage of liability
insurance has been severely limited.

 

C. Indemnitee does not regard the current protection available, in the absence
of the Initial Indemnification Agreement (as defined below) and this Agreement,
as adequate under the present circumstances, and Indemnitee and other officers
and directors of the Company may not be willing to continue to serve as officers
and directors without the protection provided by this Agreement.

 

D. The Company desires to attract and retain the services of highly qualified
individuals, such as Indemnitee, to serve as officers and directors of the
Company and to indemnify its officers and directors so as to provide them with
the maximum protection permitted by law.

 

E. In furtherance of the foregoing and in accordance with Company policy, the
Company and the Indemnitee entered into an Indemnification Agreement, dated as
of June 1, 2001 (the “Initial Indemnification Agreement”), in connection with
the Indemnitee’s service as a director of the Company.

 

F. The Company has determined that it is reasonable, prudent and necessary for
the Company to amend and restate the Initial Indemnification Agreement in order
to provide the Indemnitee with the provisions contained herein.

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AGREEMENT

 

The Company and Indemnitee hereby agree as follows:

 

1. Indemnification.

 

(a) Third Party Proceedings. The Company shall indemnify Indemnitee if
Indemnitee is or was a party or is threatened to be made a party to any
threatened, pending or completed Proceeding (as defined below) (other than an
action by or in the right of the Company) by reason of the fact that Indemnitee
is or was a director, officer, employee or agent of the Company, or any
subsidiary of the Company, including, without limitation, as a result of service
on any special committee of the Board of Directors (a “Special Committee”), by
reason of any action or inaction on the part of Indemnitee while an officer or
director or by reason of the fact that Indemnitee is or was serving at the
request of the Company as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise, against
expenses (including attorneys’ fees), judgments, fines, penalties and amounts
paid in settlement actually and reasonably incurred by Indemnitee in connection
with such Proceeding if Indemnitee acted in good faith and in a manner
Indemnitee reasonably believed to be in or not opposed to the best interests of
the Company, and, with respect to any criminal Proceeding, had no reasonable
cause to believe Indemnitee’s conduct was unlawful. The termination of any
action, suit or proceeding by judgment, order, settlement, conviction, or upon a
plea of nolo contendere or its equivalent, shall not, of itself, create a
presumption that Indemnitee did not act in good faith and in a manner which
Indemnitee reasonably believed to be in or not opposed to the best interests of
the Company, and, with respect to any criminal Proceeding, had reasonable cause
to believe that Indemnitee’s conduct was unlawful.

 

As used herein, the term “Proceeding” shall mean any threatened, pending or
completed action, suit, arbitration, alternate dispute resolution mechanism,
investigation, inquiry, administrative hearing or any other actual, threatened
or completed proceeding, whether brought in the right of the Company or
otherwise and whether of a civil, criminal, administrative or investigative
nature, in which Indemnitee was, is or will be involved as a party or otherwise
by reason of the fact that Indemnitee is or was a director of the Company
(including, without limitation, his participation as a member of a Special
Committee), by reason of any action taken by him or of any action on his part
while acting as director of the Company (including, without limitation, his
service on any Special Committee), or by reason of the fact that he is or was
serving at the request of the Company as a director, officer, employee or agent
of another corporation, partnership, joint venture, trust, employee benefit plan
or other enterprise, in each case whether or not serving in such capacity at the
time any liability or expense is incurred for which indemnification,
reimbursement, or advancement of expenses can be provided under this Agreement;
except one initiated by Indemnitee to enforce his rights under this Agreement.

 

(b) Proceedings by or in the Right of the Company. The Company shall indemnify
Indemnitee if Indemnitee was or is a party or is threatened to be made a party
to any threatened, pending or completed Proceeding by or in the right of the
Company or any subsidiary of the Company to procure a judgment in its favor by
reason of the fact that Indemnitee is or was a director, officer, employee or
agent of the Company, or any subsidiary of the Company, including, without
limitation, as a result of service on any Special Committee, by reason of any
action or inaction on the part of Indemnitee while an officer or director, or by
reason of the fact that Indemnitee is or was serving at the request of the
Company as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, against expenses
(including attorneys’ fees) and, to the fullest extent permitted by law, amounts
paid in settlement, in each case to the extent actually and reasonably incurred
by Indemnitee in

 

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connection with the defense or settlement of such action or suit (i) if
Indemnitee acted in good faith and in a manner Indemnitee reasonably believed to
be in the best interests of the Company and its stockholders, except that no
indemnification shall be made in respect of any claim, issue or matter as to
which Indemnitee shall have been adjudged to be liable to the Company in the
performance of Indemnitee’s duty to the Company and its stockholders unless and
only to the extent that the court in which such action or suit is or was pending
shall determine upon application that, in view of all the circumstances of the
case, Indemnitee is fairly and reasonably entitled to indemnity for expenses and
then only to the extent that the court shall determine; (ii) if Indemnitee is a
director, to the extent that the action or contemplated action seeks monetary
damages for breach of Indemnitee’s duties to the Company and its stockholders in
circumstances under which Indemnitee’s personal liability therefor has been
eliminated as a result of the provisions of Section 102(b)(7) of the Delaware
General Corporation Law; or (iii) if Indemnitee is an agent other than a
director, to the extent that, were Indemnitee a director, Indemnitee would have
the right to be indemnified under Section l(b)(ii), above; and in the case of
Section l(b)(ii) and l(b)(iii) above, indemnification shall include, to the
extent not prohibited by law, indemnification against all judgments, fines and
amounts paid in settlement actually and reasonably incurred by Indemnitee in
connection with such Proceeding.

 

(c) Mandatory Payment of Expenses. To the extent that Indemnitee has been
successful on the merits or otherwise in defense of any Proceeding referred to
in Subsection (a) or (b) of this Section 1 or the defense of any claim, issue or
matter therein, Indemnitee shall be indemnified against expenses (including
attorneys’ fees) actually and reasonably incurred by Indemnitee in connection
therewith. If Indemnitee is not wholly successful in such Proceeding but is
successful, on the merits or otherwise, as to one or more but less than all
claims, issues or matters in such Proceeding, the Company shall indemnify
Indemnitee against (a) all expenses actually and reasonably incurred by him or
on his behalf in connection with each successfully resolved claim, issue or
matter and (b) any claim, issue or matter related to any such successfully
resolved claim, issue or matter. For purposes of this Section and without
limitation, the termination of any claim, issue or matter in such Proceeding by
dismissal, with or without prejudice, shall be deemed to be a successful result
as to such claim, issue or matter.

 

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2. Expenses; Indemnification Procedure.

 

(a) Advancement of Expenses. The Company shall advance all reasonable expenses
incurred by Indemnitee in connection with the investigation, defense, settlement
or appeal of any civil or criminal Proceeding referenced in Sections l (a) or
(b), 2(b) or 3(a) hereof. Indemnitee hereby undertakes to repay such amounts
advanced only if, and to the extent that, it shall ultimately be determined that
Indemnitee is not entitled to be indemnified by the Company as authorized
hereby. The advances to be made hereunder shall be paid by the Company to
Indemnitee within 30 days following delivery by Indemnitee to the Company, from
time to time, of a statement or statements requesting such advances (which shall
include invoices received by Indemnitee in connection with such expenses but, in
the case of invoices in connection with legal services, any references to legal
work performed or to expenditures made that would cause Indemnitee to waive any
privilege accorded by applicable law shall not be included with the invoice)
whether prior to or after final disposition of any Proceeding. Advances shall be
unsecured and interest free. Advances shall be made without regard to
Indemnitee’s ability to repay the expenses and without regard to Indemnitee’s
ultimate entitlement to indemnification under the other provisions of this
Agreement. The Indemnitee shall qualify for advances upon the execution and
delivery to the Company of this Agreement which shall constitute an undertaking
providing that the Indemnitee undertakes to the fullest extent permitted by law
to repay the advance if and to the extent that it is ultimately determined that
Indemnitee is not entitled to be indemnified by the Company.

 

(b) Indemnification For Expenses of a Witness. Notwithstanding any other
provision of this Agreement, to the extent that Indemnitee is, by reason of his
relationship to the Company, a witness in any Proceeding to which Indemnitee is
not a party, he shall be indemnified against all expenses actually and
reasonably incurred by him or on his behalf in connection therewith.

 

(c) Notice/Cooperation by Indemnitee. Unless the Company is also named as a
party thereto, Indemnitee shall, as a condition precedent to Indemnitee’s right
to be indemnified under this Agreement, give the Company notice in writing as
soon as practicable of any claim made against Indemnitee for which
indemnification will or could be sought under this Agreement. Notice to the
Company shall be directed to the Chief Executive Officer of the Company at the
address shown on the signature page of this Agreement (or such other address as
the Company shall designate in writing to Indemnitee). Notice shall be deemed
received three business days after the date postmarked if sent by domestic
certified or registered mail, properly addressed; otherwise notice shall be
deemed received when such notice shall actually be received by the Company. In
addition, Indemnitee shall give the Company such information and cooperation as
it may reasonably require and as shall be within Indemnitee’s power.

 

(d) Procedure.

 

(i) Any indemnification provided for in Section 1 and Section 4 shall be made no
later than 45 days after receipt of the written request of Indemnitee. If a
claim under this Agreement, under any statute, or under any provision of the
Company’s Certificate of Incorporation or Bylaws providing for indemnification
or advancement of expenses, is not paid in

 

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full by the Company within 45 days after a written request for payment thereof
has first been received by the Company, Indemnitee may, but need not, at any
time thereafter bring an action against the Company to recover the unpaid amount
of the claim and, subject to Section 12 of this Agreement, Indemnitee shall also
be entitled to be paid for the expenses (including attorneys’ fees) of bringing
such action. It shall be a defense to any such action (other than an action
brought to enforce a claim for expenses incurred in connection with any
Proceeding in advance of its final disposition) that Indemnitee has not met the
standards of conduct which make it permissible under applicable law for the
Company to indemnify Indemnitee. Indemnitee shall be entitled to receive interim
payments of expenses pursuant to Subsection 2(a) and 4(a) unless and until such
defense may be finally adjudicated by court order or judgment from which no
further right of appeal exists.

 

(ii) Upon written request by Indemnitee for indemnification, a determination, if
required by applicable law, with respect to Indemnitee’s entitlement thereto
shall be made in the specific case by Independent Counsel (as defined herein) in
a written opinion to the Board of Directors, a copy of which shall be delivered
to Indemnitee and, if it is so determined that Indemnitee is entitled to
indemnification, payment to Indemnitee shall be made within ten (10) days after
such determination. Indemnitee shall cooperate with the Independent Counsel
making such determination with respect to Indemnitee’s entitlement to
indemnification, including providing to such counsel upon reasonable advance
request any documentation or information which is not privileged or otherwise
protected from disclosure and which is reasonably available to Indemnitee and
reasonably necessary to such determination. Any costs or expenses (including
attorneys’ fees and disbursements) incurred by Indemnitee in so cooperating with
the Independent Counsel shall be borne by the Company (irrespective of the
determination as to Indemnitee’s entitlement to indemnification) and the Company
hereby indemnifies and agrees to hold Indemnitee harmless therefrom.

 

(iii) The Independent Counsel shall be selected by Indemnitee. The Company may,
within 10 days after written notice of such selection, deliver to the Indemnitee
a written objection to such selection; provided, however, that such objection
may be asserted only on the ground that the Independent Counsel so selected does
not meet the requirements of “Independent Counsel” as defined below, and the
objection shall set forth with particularity the factual basis of such
assertion. Absent a proper and timely objection, the person so selected shall
act as Independent Counsel. If such written objection is so made and
substantiated, the Independent Counsel so selected may not serve as Independent
Counsel unless and until such objection is withdrawn or a court has determined
that such objection is without merit. If, within 20 days after the later of
submission by Indemnitee of a written request for indemnification pursuant to
Section 2(d) hereof and the final disposition of the Proceeding, no Independent
Counsel shall have been selected and not objected to, the Indemnitee may
petition a court of competent jurisdiction for resolution of any objection which
shall have been made by the Company to the selection of Independent Counsel
and/or for the appointment as Independent Counsel of a person selected by the
court or by such other person as the court shall designate, and the person with
respect to whom all objections are so resolved or the person so appointed shall
act as Independent Counsel under Section 2(d)(ii) hereof. Upon the due
commencement of any judicial proceeding or arbitration pursuant to Section 3(a)
of this Agreement, Independent

 

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Counsel shall be discharged and relieved of any further responsibility in such
capacity (subject to the applicable standards of professional conduct then
prevailing).

 

(iv) In making a determination with respect to entitlement to indemnification
hereunder, the Independent Counsel making such determination shall presume that
Indemnitee is entitled to indemnification under this Agreement if Indemnitee has
submitted a request for indemnification in accordance with Section 2(d) of this
Agreement, and the Company shall have the burden of proof to overcome that
presumption in connection with the making by the Independent Counsel of any
determination contrary to that presumption. Neither the failure of the Company
or of Independent Counsel to have made a determination prior to the commencement
of any action pursuant to this Agreement that indemnification is proper in the
circumstances because Indemnitee has met the applicable standard of conduct, nor
an actual determination by the Company or by Independent Counsel that Indemnitee
has not met such applicable standard of conduct, shall be a defense to the
action or create a presumption that Indemnitee has not met the applicable
standard of conduct.

 

(v) For purposes of any determination of good faith, Indemnitee shall be deemed
to have acted in good faith if Indemnitee’s action is based on the records or
books of account of the Company or any of subsidiary thereof, including
financial statements, or on information supplied to Indemnitee by the officers
of the Company or any subsidiary thereof in the course of their duties, or on
the advice of legal counsel for the Company or any subsidiary thereof or the
Board of Directors or counsel selected by any committee of the Board of
Directors or on information or records given or reports made to the Company or
any subsidiary thereof by an independent certified public accountant or by an
appraiser, investment banker or other expert selected with the reasonable care
by the Company or the Board of Directors or any committee of the Board of
Directors. The provisions of this Section 2(d)(v) shall not be deemed to be
exclusive or to limit in any way the other circumstances in which the Indemnitee
may be deemed to have met the applicable standard of conduct set forth in this
Agreement.

 

(vi) The knowledge and/or actions, or failure to act, of any director, officer,
agent or employee of the Company or any subsidiary thereof shall not be imputed
to Indemnitee for purposes of determining the right to indemnification under
this Agreement.

 

(vii) “Independent Counsel” means a law firm, or a partner (or, if applicable,
member) of such a law firm, that is experienced in matters of corporation law
and neither presently is, nor in the past five years has been, retained to
represent: (i) the Company or Indemnitee in any matter material to either such
party (other than with respect to matters concerning the Indemnitee under this
Agreement, or of other indemnitees under similar indemnification agreements), or
(ii) any other party to the Proceeding giving rise to a claim for
indemnification hereunder. Notwithstanding the foregoing, the term “Independent
Counsel” shall not include any person who, under the applicable standards of
professional conduct then prevailing, would have a conflict of interest in
representing either the Company or Indemnitee in an action to determine
Indemnitee’s rights under this Agreement. The Company agrees to pay the
reasonable fees and expenses of the Independent Counsel referred to above and to
fully indemnify such counsel against any and all expenses, claims, liabilities
and damages arising out of or relating to this Agreement or its engagement
pursuant hereto.

 

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(e) Notice to Insurers. If, at the time of the receipt of a notice of a claim
pursuant to Section 2(d) hereof, the Company has director and officer liability
insurance in effect, the Company shall give prompt notice of the commencement of
such Proceeding to the insurers in accordance with the procedures set forth in
the respective policies. The Company shall thereafter take all necessary or
desirable action to cause such insurers to pay, on behalf of the Indemnitee, all
amounts payable as a result of such Proceeding in accordance with the terms of
such policies.

 

(f) Selection of Counsel. Except for matters arising out of or relating to any
Special Committee, in the event the Company shall be obligated under Section
2(a) hereof to pay the expenses of any Proceedings against Indemnitee, the
Company, if appropriate, shall be entitled to assume the defense of such
Proceeding, with counsel approved by Indemnitee, upon the delivery to Indemnitee
of written notice of its election so to do. After delivery of such notice,
approval of such counsel by Indemnitee and the retention of such counsel by the
Company, the Company will not be liable to Indemnitee under this Agreement for
any fees of counsel subsequently incurred by Indemnitee with respect to the same
Proceeding, provided that (i) Indemnitee shall have the right to employ separate
counsel in any such Proceeding at Indemnitee’s expense; and (ii) if (A) the
employment of counsel by Indemnitee has been previously authorized by the
Company, (B) Indemnitee shall have reasonably concluded that there may be a
conflict of interest between the Company and Indemnitee in the conduct of any
such defense, or (C) the Company shall not, in fact, have employed counsel to
assume the defense of such Proceeding, then the fees and expenses of
Indemnitee’s counsel shall be at the expense of the Company.

 

3. Remedies of Indemnitee.

 

(a) Subject to Section 3(e), in the event that (i) a determination is made
pursuant to Section 2(d)(ii) and (iii) of this Agreement that Indemnitee is not
entitled to indemnification under this Agreement, (ii) advancement of expenses
is not timely made pursuant to Section 2(a) of this Agreement, (iii) no
determination of entitlement to indemnification shall have been made pursuant to
Section 2(d)(ii) of this Agreement within 90 days after receipt by the Company
of the request for indemnification, (iv) payment of indemnification is not made
pursuant to Section 1(c) or 2(b) or the last sentence of Section 2(d)(ii) of
this Agreement within ten (10) days after receipt by the Company of a written
request therefor, or (v) payment of indemnification pursuant to Section 1(a) or
(b) or 4(a) of this Agreement is not made within ten (10) days after a
determination has been made that Indemnitee is entitled to indemnification,
Indemnitee shall be entitled to an adjudication by a court of his entitlement to
such indemnification or advancement of expenses. Alternatively, Indemnitee, at
his option, may seek an award in arbitration to be conducted by a single
arbitrator pursuant to the Commercial Arbitration Rules of the American
Arbitration Association. Indemnitee shall commence such proceeding seeking an
adjudication or an award in arbitration within 180 days following the date on
which Indemnitee first has the right to commence such proceeding pursuant to
this Section 3(a); provided, however, that the foregoing clause shall not apply
in respect of a proceeding brought by Indemnitee to enforce his rights under
Section 1(c) of this Agreement. The Company shall not oppose Indemnitee’s right
to seek any such adjudication or award in arbitration.

 

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(b) In the event that a determination shall have been made pursuant to Section
2(d)(ii) of this Agreement that Indemnitee is not entitled to indemnification,
any judicial proceeding or arbitration commenced pursuant to this Section 3
shall be conducted in all respects as a de novo trial, or arbitration, on the
merits and Indemnitee shall not be prejudiced by reason of that adverse
determination. In any judicial proceeding or arbitration commenced pursuant to
this Section 3 the Company shall have the burden of proving Indemnitee is not
entitled to indemnification or advancement of expenses, as the case may be.

 

(c) If a determination shall have been made pursuant to Section 2(d)(ii) of this
Agreement that Indemnitee is entitled to indemnification, the Company shall be
bound by such determination in any judicial proceeding or arbitration commenced
pursuant to this Section 3, absent (i) a misstatement by Indemnitee of a
material fact, or an omission of a material fact necessary to make Indemnitee’s
statement not materially misleading, in connection with the request for
indemnification, or (ii) a prohibition of such indemnification under applicable
law.

 

(d) The Company shall be precluded from asserting in any judicial proceeding or
arbitration commenced pursuant to this Section 3 that the procedures and
presumptions of this Agreement are not valid, binding and enforceable and shall
stipulate in any such court or before any such arbitrator that the Company is
bound by all the provisions of this Agreement. The Company shall indemnify
Indemnitee against any and all expenses and, if requested by Indemnitee, shall
(within ten (10) days after receipt by the Company of a written request
therefore) advance, to the extent not prohibited by law, such expenses to
Indemnitee, which are incurred by Indemnitee in connection with any action
brought by Indemnitee for indemnification or advance of expenses from the
Company under this Agreement or under any directors’ and officers’ liability
insurance policies maintained by the Company, regardless of whether Indemnitee
ultimately is determined to be entitled to such indemnification, advancement of
expenses or insurance recovery, as the case may be.

 

(e) Notwithstanding anything in this Agreement to the contrary, no determination
as to entitlement to indemnification under this Agreement shall be required to
be made prior to the final disposition of the Proceeding.

 

4. Additional Indemnification Rights; Nonexclusivity.

 

(a) Scope. Notwithstanding any other provision of this Agreement, the Company
hereby agrees to indemnify the Indemnitee to the fullest extent permitted by
law, notwithstanding that such indemnification is not specifically authorized by
the other provisions of this Agreement, the Company’s Certificate of
Incorporation, the Company’s Bylaws or by statute. In the event of any change in
any applicable law, statute or rule which narrows the right of a Delaware
corporation to indemnify a member of its Board of Directors or an officer, such
change, to the extent not otherwise required by such law, statute or rule to be
applied to this Agreement, shall have no effect on this Agreement or the
parties’ rights and obligations hereunder.

 

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(b) Nonexclusivity. The indemnification provided by this Agreement shall not be
deemed exclusive of any rights to which Indemnitee may be entitled under the
Company’s Certificate of Incorporation, its Bylaws, any agreement, any vote of
stockholders or disinterested Directors, the Corporation Law of the State of
Delaware or otherwise, both as to action in Indemnitee’s official capacity and
as to action in another capacity while holding such office. The indemnification
provided under this Agreement shall continue as to Indemnitee for any action
taken or not taken while serving in an indemnified capacity even though
Indemnitee may have ceased to serve in such capacity at the time of any
Proceeding or other covered action.

 

5. Partial Indemnification. If Indemnitee is entitled under any provision of
this Agreement to indemnification by the Company for some or a portion of the
expenses, judgments, fines or penalties actually or reasonably incurred by
Indemnitee in the investigation, defense, appeal or settlement of any civil or
criminal Proceeding, but not, however, for the total amount thereof, the Company
shall nevertheless indemnify Indemnitee for the portion of such expenses,
judgments, fines or penalties to which Indemnitee is entitled.

 

6. Mutual Acknowledgment. Both the Company and Indemnitee acknowledge that in
certain instances, Federal law or applicable public policy may prohibit the
Company from indemnifying its directors and officers under this Agreement or
otherwise. Indemnitee understands and acknowledges that the Company has
undertaken or may be required in the future to undertake with the Securities and
Exchange Commission to submit the question of indemnification to a court in
certain circumstances for a determination of the Company’s right under public
policy to indemnify Indemnitee.

 

7. Officer and Director Liability Insurance. The Company shall, from time to
time, make the good faith determination whether or not it is practicable for the
Company to obtain and maintain a policy or policies of insurance with reputable
insurance companies providing the officers and directors of the Company with
coverage for losses from wrongful acts, or to ensure the Company’s performance
of its indemnification obligations under this Agreement. Among other
considerations, the Company will weigh the costs of obtaining such insurance
coverage against the protection afforded by such coverage. In all policies of
director and officer liability insurance, Indemnitee shall be named as an
insured in such a manner as to provide Indemnitee the same rights and benefits
as are accorded to the most favorably insured of the Company’s directors, if
Indemnitee is a director; or of the Company’s officers, if Indemnitee is not an
director of the Company but is an officer; or of the Company’s key employees, if
Indemnitee is not an officer or director but is a key employee. Notwithstanding
the foregoing, the Company shall have no obligation to obtain or maintain such
insurance if the Company determines in good faith that such insurance is not
reasonably available, if the premium costs for such insurance are
disproportionate to the amount of coverage provided, if the coverage provided by
such insurance is limited by exclusions so as to provide an insufficient
benefit, or if Indemnitee is covered by similar insurance maintained by a
subsidiary or parent of the Company. Should the Company choose to cancel the
aforementioned policy for any reason, the Company shall notify the Indemnitee
within three business days of the Company’s notification of cancellation, but in
any event before the policy’s cancellation date.

 

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8. Severability. Nothing in this Agreement is intended to require or shall be
construed as requiring the Company to do or fail to do any act in violation of
applicable law. The Company’s inability, pursuant to court order, to perform its
obligations under this Agreement shall not constitute a breach of this
Agreement. The provisions of this Agreement shall be severable as provided in
this Section 8. If this Agreement or any portion hereof shall be invalidated on
any ground by any court of competent jurisdiction, then the Company shall
nevertheless indemnify Indemnitee to the full extent permitted by any applicable
portion of this Agreement that shall not have been invalidated, and the balance
of this Agreement not so invalidated shall be enforceable in accordance with its
terms.

 

9. Exceptions. Any other provision herein to the contrary notwithstanding, the
Company shall not be obligated pursuant to the terms of this Agreement:

 

(a) Claims Initiated by Indemnitee. To indemnify or advance expenses to
Indemnitee with respect to proceedings or claims initiated or brought
voluntarily by Indemnitee and not by way of defense, except with respect to
proceedings brought to establish or enforce a right to indemnification under
this Agreement or any other statute or otherwise as required under Section 145
of the Delaware General Corporation Law, but such indemnification or advancement
of expenses may be provided by the Company in specific cases if the Board of
Directors has approved the initiation or bringing of such suit; or

 

(b) Lack of Good Faith. To indemnify Indemnitee for any expenses incurred by the
Indemnitee with respect to any proceeding instituted by Indemnitee to enforce or
interpret this Agreement, if a court of competent jurisdiction determines that
each of the material assertions made by the Indemnitee in such proceeding was
not made in good faith or was frivolous; or

 

(c) Insured Claims. To indemnify Indemnitee for expenses or liabilities of any
type whatsoever (including, but not limited to, judgments, fines, ERISA excise
taxes or penalties, and amounts paid in settlement) which have been paid
directly to Indemnitee by an insurance carrier under a policy of officers’ and
directors’ liability insurance maintained by the Company; or

 

(d) Claims Under Section 16(b). To indemnify Indemnitee for expenses and the
payment of profits arising from the purchase and sale by Indemnitee of
securities in violation of Section 16(b) of the Securities Exchange Act of 1934,
as amended, or any similar successor statute.

 

10. Construction of Certain Phrases.

 

(a) For purposes of this Agreement, references to the “Company” shall include,
in addition to the resulting corporation, any constituent corporation (including
any constituent of a constituent) absorbed in a consolidation or merger which,
if its separate existence had continued, would have had power and authority to
indemnify its directors, officers, and employees or agents, so that if
Indemnitee is or was a director, officer, employee or agent of such constituent
corporation, or is or was serving at the request of such constituent corporation
as a

 

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director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, Indemnitee shall stand in the same position
under the provisions of this Agreement with respect to the resulting or
surviving corporation as Indemnitee would have with respect to such constituent
corporation if its separate existence had continued.

 

(b) For purposes of this Agreement, references to “other enterprises” shall
include employee benefit plans; references to “fines” shall include any excise
taxes assessed on Indemnitee; and references to “serving at the request of the
Company” shall include any service as a director, officer, employee or agent of
the Company or any subsidiary of the Company which imposes duties on, or
involves services by, such director, officer, employee or agent with respect to
an employee benefit plan, its participants, or beneficiaries; and if Indemnitee
acted in good faith and in a manner Indemnitee reasonably believed to be in the
interest of the participants and beneficiaries of an employee benefit plan,
Indemnitee shall be deemed to have acted in a manner “not opposed to the best
interest of the Company” as referred to in this Agreement.

 

11. Enforcement.

 

(a) The Company expressly confirms and agrees that it has entered into this
Agreement and assumed the obligations imposed on it hereby in order to induce
Indemnitee to serve as a director of the Company and the Company acknowledges
that Indemnitee is relying upon this Agreement in serving the Company in such
capacity.

 

(b) This Agreement constitutes the entire agreement between the parties hereto
with respect to the subject matter hereof and supersedes all prior agreements
and understandings, oral, written and implied, between the parties hereto with
respect to the subject matter hereof; provided, however, that this Agreement is
a supplement to and in furtherance of the Charter of the Company, the By-laws of
the Company and applicable law, and shall not be deemed a substitute therefor,
nor to diminish or abrogate any rights of Indemnitee thereunder.

 

12. Modification and Waiver. No supplement, modification or amendment of this
Agreement shall be binding unless executed in writing by the parties thereto. No
waiver of any of the provisions of this Agreement shall be deemed or shall
constitute a waiver of any other provisions of this Agreement nor shall any
waiver constitute a continuing waiver.

 

13. Counterparts. This Agreement may be executed in one or more counterparts,
each of which shall constitute an original.

 

14. Successors and Assigns. This Agreement shall be binding upon the Company and
its successors and assigns, and shall inure to the benefit of Indemnitee and
Indemnitee’s estate, heirs, legal representatives and assigns.

 

15. Attorneys’ Fees. In the event that any action is instituted by Indemnitee
under this Agreement to enforce or interpret any of the terms hereof, Indemnitee
shall be entitled to be paid all court costs and expenses, including reasonable
attorneys’ fees, incurred by Indemnitee with respect to such action, unless as a
part of such action, the court of competent jurisdiction determines that each of
the material assertions made by Indemnitee as a basis for such action

 

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were not made in good faith or were frivolous. In the event of an action
instituted by or in the name of the Company under this Agreement to enforce or
interpret any of the terms of this Agreement, Indemnitee shall be entitled to be
paid all court costs and expenses, including attorneys’ fees, incurred by
Indemnitee in defense of such action (including with respect to Indemnitee’s
counterclaims and cross-claims made in such action), unless as a part of such
action the court determines that each of Indemnitee’s material defenses to such
action were made in bad faith or were frivolous.

 

16. Notice. All notices, requests, demands and other communications under this
Agreement shall be in writing and shall be deemed duly given (i) if delivered by
hand and receipted for by the party addressee, on the date of such receipt, or
(ii) if mailed by domestic certified or registered mail with postage prepaid, on
the third business day after the date postmarked. Addresses for notice to either
party are as shown on the signature page of this Agreement, or as subsequently
modified by written notice.

 

17. Contribution. To the fullest extent permissible under applicable law, if the
indemnification provided for in this Agreement is unavailable to Indemnitee for
any reason whatsoever, the Company, in lieu of indemnifying Indemnitee, shall
contribute to the amount incurred by Indemnitee, whether for judgments, fines,
penalties, amounts paid or to be paid in settlement and/or for expenses, in
connection with any claim relating to an indemnifiable event under this
Agreement, in such proportion as is deemed fair and reasonable in light of all
of the circumstances of such Proceeding in order to reflect (i) the relative
benefits received by the Company and Indemnitee as a result of the event(s)
and/or transaction(s) giving cause to such Proceeding; and/or (ii) the relative
fault of the Company (and its directors, officers, employees and agents) and
Indemnitee in connection with such event(s) and/or transaction(s).

 

18. Applicable Law and Consent to Jurisdiction. This Agreement and the legal
relations among the parties shall be governed by, and construed and enforced in
accordance with, the laws of the State of Delaware, without regard to its
conflict of laws rules. Except with respect to any arbitration commenced by
Indemnitee pursuant to Section 3(a) of this Agreement, the Company and
Indemnitee hereby irrevocably and unconditionally (i) agree that any action or
proceeding arising out of or in connection with this Agreement shall be brought
only in the Delaware Court of Chancery (the “Delaware Court”), and not in any
other state or federal court in the United States of America or any court in any
other country, (ii) consent to submit to the exclusive jurisdiction of the
Delaware Court for purposes of any action or proceeding arising out of or in
connection with this Agreement, (iii) appoint, to the extent such party is not
otherwise subject to service of process in the State of Delaware, The
Corporation Trust Company, Wilmington, Delaware as its agent in the State of
Delaware as such party’s agent for acceptance of legal process in connection
with any such action or proceeding against such party with the same legal force
and validity as if served upon such party personally within the State of
Delaware, (iv) waive any objection to the laying of venue of any such action or
proceeding in the Delaware Court, and (v) waive, and agree not to plead or to
make, any claim that any such action or proceeding brought in the Delaware Court
has been brought in an improper or inconvenient forum.

 

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first above written.

 

AAMES FINANCIAL CORPORATION

and its wholly-owned subsidiaries

By:    

Name:

 

A. Jay Meyerson

Title:

 

Chief Executive Officer

 

AGREED TO AND ACCEPTED:

 

INDEMNITEE:

 

(signature)

 

 

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