Prepared by MERRILL CORPORATION




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AMENDMENT NUMBER ONE
  to the
  Warehouse Loan and Security Agreement
  dated as of February 10, 2000,
  as Amended and Restated to and including January 24, 2001
  Among
  AAMES CAPITAL CORPORATION,

  AAMES FUNDING CORPORATION
  and
  GREENWICH CAPITAL FINANCIAL PRODUCTS, INC.    




    This
AMENDMENT NUMBER ONE (this "Amendment") is made this 1st day of May, 2001, among AAMES CAPITAL CORPORATION, AAMES FUNDING
CORPORATION (each, a "Borrower" and collectively, the "Borrowers") and GREENWICH CAPITAL FINANCIAL
PRODUCTS, INC. ("Lender") to the WAREHOUSE LOAN AND SECURITY AGREEMENT, dated as of February 10, 2000, as Amended and Restated to and
including January 24, 2001 between Lender and Borrowers (the "Loan Agreement"). 


 
 

RECITALS    
  


    WHEREAS, Borrowers have requested that Lender agree to amend the Loan Agreement to permit the financing of concurrent second lien mortgage loans originated by
the Borrowers and Lender has agreed to make such amendment as more expressly set forth below to the Loan Agreement. 


    WHEREAS,
as of the date of this Amendment, Borrowers represent to the Lender that they are in compliance with all of the representations and warranties and all of the affirmative and
negative covenants set forth in the Loan Agreement. 


    NOW
THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and of the mutual covenants herein contained, the parties hereto
hereby agree as follows: 


    SECTION
1. Effective as of May 1, 2001, Section 1 of the Loan Agreement is hereby amended to include the following definition of "Concurrent Second Lien Mortgage Loan"
to read in its entirety as follows: 



"Concurrent Second Lien Mortgage Loan" shall mean a Second Lien Mortgage Loan as to which the prior lien on such Mortgaged Property is secured by
financing which was obtained by the related Mortgagor from the related Borrower at the same time that such Second Lien Mortgage Loan was originated. 




    SECTION
2. Effective as of May 1, 2001, the definition of "Collateral Value" in Section 1 of the Loan Agreement is hereby amended by deleting the word "or" at the end of
clause (13) thereto, by amending the "." at the end of clause (14) thereto to be "; or" and by adding the following new clause (15) to read in its entirety as follows: 



(15)
if such Mortgage Loan is a Concurrent Second Lien Mortgage Loan and the Collateral Value of such Concurrent Second Lien Mortgage Loan when added to the aggregate Collateral Value of all other
Concurrent Second Lien Mortgage Loans exceeds, at any time, the lesser of (a) $3,000,000, and (b) 5% of the aggregate outstanding amount of all Advances; 




    SECTION
3. Effective as of May 1, 2001, the last sentence of representation (j) in Schedule 1 to the Loan Agreement is hereby amended to read in its entirety as
follows: 



Except
with respect to any First Lien Mortgage Loan which was originated in connection with a Concurrent Second Lien Mortgage Loan, the Mortgaged Property was not, as of the date of origination of the
Mortgage Loan, subject to a mortgage, deed of trust, deed to secure debt or other security instrument creating a lien subordinate to the lien of the Mortgage. 






 

    SECTION
4. Effective as of May 1, 2001, representation (v) in Schedule 1 to the Loan Agreement is hereby amended by adding the following sentence to the end
thereof: 



Any
Concurrent Second Lien Mortgage Loan satisfies the Aames Guidelines for the 80-20 Program which are provided pursuant to the applicable Underwriting Guidelines. 




    SECTION
5. Fees and Expenses. Borrowers agree to pay to Lender all fees and out of pocket expenses incurred by Lender in connection
with this Amendment (including all reasonable fees and out of pocket costs and expenses of the Lender's legal counsel incurred in connection with this Amendment Number One), in accordance with
Section 10.03 of the Loan Agreement 


    SECTION
6. Defined Terms. Any terms capitalized but not otherwise defined herein shall have the respective meanings set forth in the
Loan Agreement. 


    SECTION
7. Representations. In order to induce the Lender to execute and deliver this Amendment Number One, the Borrowers hereby
represent to the Lender that as of the date hereof, after giving effect to this Amendment Number One, the Borrowers are in full compliance with all of the terms and conditions of the Loan Agreement. 


    SECTION
8. Limited Effect. Except as expressly amended and modified by this Amendment, the Loan Agreement shall continue in full force
and effect in accordance with its terms. Reference to this Amendment Number One need not be made in the Loan Agreement or any other instrument or document executed in connection therewith, or in any
certificate, letter or communication issued or made pursuant to, or with respect to, the Loan Agreement, any reference in any of such items to the Loan Agreement being sufficient to refer to the Loan
Agreement as amended hereby. 


    SECTION
9. Governing Law. THIS AMENDMENT NUMBER ONE SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK AND THE
OBLIGATIONS, RIGHTS, AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS WITHOUT REGARD TO CONFLICT OF LAWS DOCTRINE APPLIED IN SUCH STATE. 


    SECTION
10. Counterparts. This Amendment Number One 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. 


[SIGNATURE
PAGE FOLLOWS] 


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    IN WITNESS WHEREOF, Borrowers and Lender have caused this amendment to be executed and delivered by their duly authorized officers as of the day and year first above written. 



	 	 	AAMES CAPITAL CORPORATION
	 	 	    Borrower
	

 	
 	

By:	

 
	 	 	 	
Name:          
Title:          

	

 	
 	
AAMES FUNDING CORPORATION
	 	 	    Borrower
	

 	
 	

By:	

 
	 	 	 	
Name:          
Title:          

	

 	
 	
GREENWICH CAPITAL FINANCIAL PRODUCTS, INC.,
	 	 	    Lender
	

 	
 	

By:	

 
	 	 	 	
Name:          
Title:          






Acknowledged and Agreed:  


AAMES FINANCIAL CORPORATION  


By:  





Name:  John
Kohler

Title:  Executive Vice President 


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AMENDMENT NUMBER ONE to the Warehouse Loan and Security Agreement dated as of February 10, 2000, as Amended and Restated to and including January 24, 2001 Among AAMES CAPITAL CORPORATION, AAMES FUNDING CORPORATION
and GREENWICH CAPITAL FINANCIAL PRODUCTS, INC.

RECITALS