Exhibit 10.18



EMPLOYMENT AGREEMENT



THIS AGREEMENT, made and entered into as of July 18, 2005 (the Effective Date), by and among John A. Vella (the Executive), Aames
Investment Corporation (the Parent Company), and Aames Financial Corporation (the Employer);



WITNESSETH THAT:



WHEREAS, the parties desire to enter into this Agreement pertaining to the employment of the Executive by the Employer;



NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth below, it is hereby covenanted and agreed by the Executive, the Parent
Company, and the Employer as follows:



1. Performance of
Services. The Executives employment with the Employer shall be subject to the following:



(a) Subject to the terms of this Agreement, the Employer hereby agrees to employ the Executive during the Agreement Term (as defined below). During the
Agreement Term, the Executive shall serve as the President and Chief Operating Officer of the Parent Company.



(b) During the Agreement Term, while the Executive is employed by the Employer, his main office shall be at the Parent Companys office in Orange
County, California.



(c) During the Agreement Term, while the
Executive is employed by the Employer, the Executive shall devote his full time, energies and talents to serving as President and Chief Operating Officer of the Employer and of the Parent Corporation.



(d) The Executive agrees that he shall perform his duties faithfully and
efficiently subject to the directions of the Chief Executive Officer or the Board of Directors of the Parent Corporation (the Board). The Executives duties may include providing services for the Parent Company and the Subsidiaries
(as defined below), as determined by the Chief Executive Officer or the Board. The Executive shall report to the Chief Executive Officer and shall have such authority, power, responsibilities and duties as are inherent in his positions (and the
undertakings applicable to his positions) and necessary to carry out his responsibilities and the duties required of him hereunder.



(e) Notwithstanding the foregoing provisions of this paragraph 1, during the Agreement Term, the Executive may devote reasonable time to activities other
than those required under this Agreement, including the supervision of his personal investments, and activities involving professional, charitable, community, educational, religious and similar types of organizations, speaking engagements,
membership on the boards of directors of other organizations, and similar types of activities, to the extent that, in the judgment of the Board, such other activities do not inhibit or prohibit the performance of the Executives duties under
this Agreement, or conflict in any material way with the business of the Parent Company or any Subsidiary; provided, however, that the Executive shall not serve on the board of any business, hold any other position with any business, or otherwise
engage in any business activity, without the consent of the Board.



(f) Subject to the terms of this Agreement, the Executive shall not be required to perform services under this Agreement during any period that he is Disabled. The Executive shall be considered Disabled during any period in
which he has a physical or mental disability which renders him



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incapable, after reasonable accommodation, of performing his duties under this Agreement. In the event of a dispute as to whether the Executive is Disabled
or Permanently Disabled, the Board may refer the same to a licensed practicing physician of the Boards choice, and reasonably acceptable to the Executive, and the Executive agrees to submit to such tests and examinations as such physician
shall deem appropriate. During the period in which the Executive is Disabled, the Board may appoint a temporary replacement to assume the Executives responsibilities.



(g) The Agreement Term shall be the period beginning on the Effective Date and ending on the two year
anniversary of the Effective Date.



(h) For purposes of this
Agreement, the term Subsidiary shall mean any corporation, partnership, joint venture or other entity during any period in which at least a fifty percent interest in such entity is owned, directly or indirectly, by the Parent Company (or
a successor to the Parent Company), including the Employer.



2.
Compensation. Subject to the terms of this Agreement, during the Agreement Term, while the Executive is employed by the Employer, the Employer shall compensate him for his services as follows:



(a) Salary. The Executive shall receive, for each 12-consecutive month
period beginning on the Effective Date and each anniversary thereof, in substantially equal monthly or more frequent installments, an annual base salary of not less than $350,000 (the Salary). The Executives Salary rate shall be
reviewed by the Compensation Committee of the Board at the same time as such review is performed for other senior officers of the Parent Company, while the Executive is employed by the Employer, to determine whether an increase in the amount of
Salary is appropriate. In no event shall the Salary of the Executive be reduced to an amount that is less than the amount specified in this paragraph (a), or to an amount that is less than the amount that he was previously receiving.



(b) Bonus. The Executive shall participate in an annual bonus program.
The bonus program shall provide for an annual bonus payment of $437,500 (prorated for 2005) if target level of performance is achieved (target bonus), adjusted based upon actual performance pursuant to the Parent Companys Executive
Bonus Plan. Subject to the preceding sentence, the amount of the bonus may be less if the actual level of performance is less than the target level of performance, and subject to the preceding sentence, may be more (but not less) if the actual level
of performance is greater than the target level. The performance goals for the year shall be established by the Compensation Committee in its sole discretion after consultation with the Executive. The level of performance achievement by the
Executive for each year shall be reviewed by the Compensation Committee of the Board as set forth under the Parent Companys Executive Bonus Plan. The target bonus shall be reviewed by the Compensation Committee of the Board at the same time as
such review is performed for other senior officers of the Parent Company, while the Executive is employed by the Employer, to determine whether an increase in the target bonus is appropriate. In no event shall the target bonus of the Executive be
reduced to an amount that is less than the amount specified in this paragraph (b).



(c) Other Fringe Benefits. Except as otherwise specifically provided to the contrary in this Agreement, the Executive shall be provided with the welfare benefits and other fringe benefits to the same extent and
on the same terms as those benefits are provided by the Parent Company or the Employer from time to time to the Parent Companys other senior officers; provided, however, that if any such benefits are adjusted to reflect an officers
position, the Executives benefits shall be adjusted in a manner commensurate with his position. The Executive shall also be entitled to the perquisites that are customarily provided in connection with his position.



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(d) Expenses. The Executive is authorized to incur reasonable expenses for entertainment,
traveling, meals, lodging and similar items in promoting the business of the Parent Company or the Subsidiaries. The Employer will reimburse the Executive for all reasonable expenses so incurred, provided that such expenses are incurred and
accounted for in accordance with the reasonable policies and procedures established by the Employer, and further provided that such expenses are subject to review by the Audit Committee of the Board.



(e) Indemnification and Insurance. The Parent Company and the Employer
will, to the maximum extent permitted by law, defend, indemnify and hold harmless the Executive and the Executives heirs, estate, executors and administrators against any costs, losses, claims, suits, proceedings, damages or liabilities to
which the Executive may become subject which arise out of, are based upon or relate to the Executives employment by the Employer and services provided to the Parent Company and its Subsidiaries, or the Executives service as an officer of
the Parent Company or any Subsidiary including without limitation reimbursement for any legal or other expenses reasonably incurred by the Executive in connection with investigation and defending against any such costs, losses, claims, suits,
proceedings, damages or liabilities. The Parent Company and/or the Employer shall maintain directors and officers liability insurance in commercially reasonable amounts (as reasonably determined by the Board), and the Executive shall be covered
under such insurance to the same extent as other senior officers of the Parent Company; provided, however, that neither the Parent Company nor the Employer shall be required to maintain such insurance coverage unless the Board determines that it is
obtainable at reasonable cost.



3. Termination. The
Executives employment with the Employer during the Agreement Term may be terminated by the Employer or the Executive without any breach of this Agreement only under the circumstances described in paragraphs 3(a) through 3(f):



(a) Death. The Executives employment hereunder will terminate
upon his death.



(b) Permanent Disability. The Employer
may terminate the Executives employment during any period in which he is Permanently Disabled. The Executive shall be considered Permanently Disabled during any period in which he is Disabled; provided, however, that the Executive
shall not be considered to be Permanently Disabled unless the Executive has a physical or mental disability which renders the Executive incapable, after reasonable accommodation, of performing any substantial portion of the
Executives duties under this Agreement on a permanent, full-time basis, and such disability is reasonably expected by the Board to continue for at least 120 days.



(c) Cause. The Employer may terminate the Executives employment hereunder at any time for Cause. For purposes
of this Agreement, the term Cause exists when the Executive shall have (i) been determined by a court of law to have committed any felony including, but not limited to, a felony involving fraud, theft, misappropriation, dishonesty,
embezzlement, or any other crime involving moral turpitude, or if the Executive shall have been arrested or indicted for violation of any criminal statute constituting a felony, provided the Board reasonably determines that the continuation of the
Executives employment after such event would have an adverse impact on the operation or reputation of the Parent Company or its affiliates; (ii) committed one or more acts of gross negligence or willful misconduct, either within or outside the
scope of his employment that, in the good faith opinion of the Board, materially impair the goodwill or business of the Parent Company or cause material damage to its property, goodwill, or business, or would, if known, subject the Parent Company to
public ridicule; (iii) refused or failed to a material degree to perform his duties; (iv) violated any material written Company policy generally applicable to senior officers of the Parent Company that is provided to the Executive during or prior to
the term of employment; or (v) the continued failure by the Executive to substantially perform his duties with the Parent Company (other than any such failure resulting from the Executives



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being Disabled), within a reasonable period of time after a written demand for substantial performance is delivered to the Executive by the Board, which
demand specifically identifies the manner in which the Board believes that the Executive has not substantially performed his duties.



(d) Constructive Discharge. If (I) the Executive provides written notice to the Parent Company of the occurrence of Good Reason (as defined below)
within a reasonable time (not to exceed 60 days) after the Executive has knowledge of the circumstances constituting Good Reason, which notice specifically identifies the circumstances which the Executive believes constitute Good Reason; (II) the
Parent Company fails to notify the Executive of the Parent Companys intended method of correction within a reasonable period of time (not to exceed 60 days) after the Parent Company receives the notice, or the Parent Company fails to correct
the circumstances within a reasonable period of time (not to exceed 60 days) after such notice; and (III) the Executive resigns within a reasonable time (not to exceed 60 days) after receiving the Parent Companys response, if such notice does
not indicate an intention to correct such circumstances, or within a reasonable time (not to exceed 60 days) after the Parent Company fails to correct such circumstances; then the Executive shall be considered to have been subject to a Constructive
Discharge by the Parent Company. Notwithstanding the foregoing provisions of this paragraph (d), the Executive shall not be deemed to have been subject to a Constructive Discharge unless the Executive remains in the employ of the
Employer (at the location where he was employed immediately prior to the occurrence of the events constituting Good Reason) for the period requested by the Employer (not to exceed 90 days after the Executive provides written notice in accordance
with clause (I) above). Good Reason means the occurrence of: (i) a reduction by the Employer in the Executives annual base salary or any material adverse change in the terms or conditions of Executives aggregate annual bonus
from that in effect on the date thereof, if any, which change is not pursuant to a program applicable to all comparably situated officers of the Parent Company; (ii) the relocation of the Executives principal place of employment to a location
outside of Orange County or Los Angeles County, California (which location is more than fifty (50) miles from the Executives principal residence); (iii) the failure of the Employer or the Parent Company, as applicable, to obtain a satisfactory
agreement from any successor to assume and agree to perform this Agreement; or (v) any material breach of this Agreement by the Parent Company or the Employer not described in clauses (i) through (iv) next above.



(e) Termination by Executive. The Executive may terminate his
employment hereunder at any time for any reason by giving the Parent Company prior written Notice of Termination, which Notice of Termination shall be effective not less than 60 days after it is given to the Parent Company, provided that nothing in
this Agreement shall require the Executive to specify a reason for any such termination. However, to the extent that the procedures specified in paragraph 3(d) are required, the procedures of this paragraph (e) may not be used in lieu of the
procedures required under paragraph 3(d).



(f) Termination
by Employer. The Employer may terminate the Executives employment hereunder at any time for any reason, by giving the Executive prior written Notice of Termination, which Notice of Termination shall be effective immediately, or such later
time as is specified in such notice. The Employer shall not be required to specify a reason for the termination under this paragraph (f), provided that termination of the Executives employment by the Employer shall be deemed to have occurred
under this paragraph (f) only if it is not for reasons described in paragraph 3(b), 3(c), 3(d), or 3(e).



(g) Notice of Termination. Any termination of the Executives employment by the Employer or the Executive (other than a termination pursuant
to paragraph 3(a)) must be communicated by a written Notice of Termination to the other party hereto (if by the Executive, to the Employer or the Parent Company, as provided above). For purposes of this Agreement, a Notice of Termination
means a dated notice which indicates the Date of Termination (not earlier than the date on which the notice is provided), and which indicates the specific termination provision in this Agreement relied on and which sets forth in



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reasonable detail the facts and circumstances, if any, claimed to provide a basis for termination of the Executives employment under the provision so
indicated.



(h) Date of Termination. Date of
Termination means the last day the Executive is employed by the Employer (including any successor to the Employer as determined in accordance with paragraph 16). If the Executive becomes employed by an entity into which the Employer is merged,
or the purchaser of substantially all of the assets of the Employer, or a successor to such entity or purchaser, the Executive shall not be treated as having terminated employment for purposes of this Agreement until such time as the Executive
terminates employment with the successor (including, without limitation, the merged entity or purchaser), provided that the new employer agrees in writing to assume this Agreement and be substituted for the Employer under this Agreement.



(i) Effect of Termination. If, on the Date of Termination, the
Executive holds any other position with the Parent Company and the Subsidiaries, the Executive shall resign from all such positions as of the Date of Termination.



4. Rights Upon Termination. The Executives right to payment and benefits under this Agreement for periods after
his Date of Termination shall be determined in accordance with the following provisions of this paragraph 4:



(a) General. If the Executives Date of Termination occurs during the Agreement Term for any reason, the Employer shall pay to the Executive:



| | (i) | The Executives Salary for the period ending on the Date of Termination.
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| | (ii) | Payment for unused vacation days, as determined in accordance with Employer policy as in effect from time to time.
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| | (iii) | If the Date of Termination occurs after the end of a performance period and prior to the payment of the performance bonus (as described in paragraph 2(b)) for the period, the
Executive shall be paid such bonus amount at the regularly scheduled time.
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| | (iv) | The Executive and any of his dependents shall be eligible for COBRA continuation coverage (as described in section 4980B of the Internal Revenue Code of 1986, as amended) to the
extent required by applicable law.
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| | (v) | Any other payments or benefits to be provided to the Executive by the Parent Company or a Subsidiary pursuant to any employee benefit plans or arrangements established or adopted by
the Parent Company or a Subsidiary (including, without limitation, any rights to indemnification from the Parent Company or a Subsidiary (or from a third-party insurer for directors and officers liability coverage) with respect to any costs, losses,
claims, suits, proceedings, damages or liabilities to which the Executive may become subject which arise out of, are based upon or relate to the Executives employment by the Employer or the Executives service as an officer of the Parent
Company or any Subsidiary), to the extent such amounts are due from the Parent Company or any Subsidiary in accordance with the terms of such plans or arrangements.
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Except as may otherwise be expressly provided to the contrary in this Agreement, nothing in this Agreement shall be construed as requiring
the Executive to be treated as employed by the Parent



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Company or any Subsidiary for purposes of any employee benefit plan or arrangement following the Executives Date of Termination.



(b) Resignation and Termination for Cause. If the Executives
Date of Termination occurs during the Agreement Term under circumstances described in paragraph 3(c) (relating to the Executives termination for Cause), or paragraph 3(e) (relating to the Executives resignation), then, except as
otherwise expressly provided in this Agreement or otherwise agreed in writing by the Parent Company or the Employer, respectively, the Parent Company and the Employer shall have no obligation to make payments under the Agreement for periods after
the Executives Date of Termination.



(c) Death or
Disability. If the Executives Date of Termination occurs during the Agreement Term under circumstances described in paragraph 3(a) (relating to Executives death) or paragraph 3(b) (relating to Executives being Permanently
Disabled), then, in addition to the amounts payable in accordance with paragraph 4(a), and in lieu of payment of a bonus for the year in which the Date of Termination occurs, the Executive shall receive payment equal to his target annual bonus
subject to a pro-rata reduction for the portion of the bonus performance period following the Date of Termination, which amount shall be payable in a lump sum as soon as practicable (but not more than 15 days) after the Date of Termination.



(d) Termination without Cause and Constructive
Discharge. If the Executives Date of Termination occurs during the Agreement Term under circumstances described in paragraph 3(d) (relating to Constructive Discharge) or paragraph 3(f) (relating to termination by the Employer without
Cause), then, in addition to the amounts payable in accordance with paragraph 4(a):



| | (i) | The Executive shall receive from the Employer for the twenty-four (24) month period (the Severance Period), the Salary amount described in paragraph 2(a), as in effect
on his Date of Termination, in monthly or more frequent installments as is required under that paragraph. In the event of the Executives death during the Severance Period, the Employer shall continue to make payments under this paragraph (d)
to the Executives estate.
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| | (ii) | In lieu of payment of a bonus for the year in which the Date of Termination occurs, the Executive shall receive payment equal to his target annual bonus subject to a pro-rata
reduction for the portion of the bonus performance period following the Date of Termination, which amount shall be payable in a lump sum as soon as practicable (but not more than 15 days) after the Date of Termination.
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5. Duties on Termination. Subject to the terms and conditions of this
Agreement, during the period beginning on the date of delivery of a Notice of Termination, and ending on the Date of Termination, the Executive shall continue to perform his duties as set forth in this Agreement, and shall also perform such services
for the Parent Company and the Employer as are necessary and appropriate for a smooth transition to the Executives successor, if any. Notwithstanding the foregoing provisions of this paragraph 5, the Parent Company and the Employer may suspend
the Executive from performing his duties under this Agreement following the delivery of a Notice of Termination providing for the Executives resignation, or delivery by the Employer of a Notice of Termination providing for the Executives
termination of employment for any reason; provided, however, that during the period of suspension (which shall end on the Date of Termination), the Executive shall continue to be treated as employed by the Employer for other purposes, and his rights
to compensation or benefits shall not be reduced by reason of the suspension.



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6. Mitigation, Alienation, and Set-Off. The Executive shall not be required to mitigate the amount
of any payment provided for in this Agreement by seeking other employment or otherwise. The Employer shall be entitled to set off against amounts payable to the Executive any amounts owed to the Parent Company and the Subsidiaries by the Executive,
but neither the Parent Company, the Employer, nor the Subsidiaries shall be entitled to set off against the amounts payable to the Executive under this Agreement.



7. Confidential Information. The Executive agrees that, during the Agreement Term, and at all times thereafter:



(a) Except as may be required by the lawful order of a court
or agency of competent jurisdiction, except as necessary to carry out his duties to the Parent Company and its Subsidiaries, or except to the extent that the Executive has express authorization from the Parent Company, the Executive agrees to keep
secret and confidential indefinitely, all Confidential Information, and not to disclose the same, either directly or indirectly, to any other person, firm, or business entity, or to use it in any way. The Executive shall, during the continuance of
the Executives employment, use the Executives best endeavors to prevent the unauthorized publication or misuse of any Confidential Information.



(b) To the extent that any court or agency seeks to have the Executive disclose Confidential Information, he shall promptly inform the Parent Company, and
he shall take reasonable steps to prevent disclosure of Confidential Information until the Parent Company has been informed of such requested disclosure, and the Parent Company has an opportunity to respond to such court or agency. To the extent
that the Executive obtains information on behalf of the Parent Company or any of the Subsidiaries that may be subject to attorney-client privilege as to the Parent Companys attorneys, the Executive shall take reasonable steps to maintain the
confidentiality of such information and to preserve such privilege.



(c) Nothing in the foregoing provisions of this paragraph 7 shall be construed so as to prevent the Executive from using, in connection with his employment for himself or an employer other than the Parent Company or any of the Subsidiaries,
knowledge which was acquired by him during the course of his employment with the Employer and the Subsidiaries and its affiliates, and which is generally known to persons of his experience in other companies in the same industry.



(d) For purposes of this Agreement, the term Confidential
Information shall include all non-public information (including, without limitation, information regarding litigation and pending litigation) concerning the Parent Company and the Subsidiaries which was acquired by or disclosed to the
Executive during the course of his employment with the Employer and its affiliates, or during the course of his consultation with the Parent Company and the Employer and their affiliates prior to the commencement of his employment and following his
Date of Termination (regardless of whether consultation is pursuant to paragraph 10). For purposes of this Agreement, the term Confidential Information shall also include all non-public information concerning any other company that was
shared with the Parent Company or a Subsidiary subject to an agreement to maintain the confidentiality of such information.



(e) This paragraph 7 shall not be construed to unreasonably restrict the Executives ability to disclose confidential information in an arbitration
proceeding or a court proceeding in connection with the assertion of, or defense against any claim of breach of this Agreement. If there is a dispute between the Parent Company or the Employer and the Executive as to whether information may be
disclosed in accordance with this paragraph (e), the matter shall be submitted to the arbitrators or the court (whichever is applicable) for decision.



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8. Non-Disparagement. The Executive agrees that, while he is employed by the Employer, and after
his Date of Termination, he shall not make any false, defamatory or disparaging statements about the Parent Company and the Subsidiaries, or the officers or directors of the Parent Company or the Subsidiaries that are reasonably likely to cause
material damage to the Parent Company or the Subsidiaries, or the officers or directors of the Parent Company or the Subsidiaries. While the Executive is employed by the Employer, and after his Date of Termination, the Parent Company agrees, on
behalf of itself and the Subsidiaries, that neither the officers nor the directors of the Parent Company or the Subsidiaries shall make any false, defamatory or disparaging statements about the Executive that are reasonably likely to cause material
damage to the Executive.



9. Restrictions on
Solicitation. For a period of twenty four (24) months after the Date of Termination, the Executive will not: (i) hire any person who was employed by the Parent Company or the Subsidiaries on such Date of Termination or at any time within six
months prior thereto or hire any agent, consultant, or independent contractor of the Parent Company or the Subsidiaries, or of any organization with respect to which the Parent Company or its Subsidiaries has agreed to a similar prohibition and of
which the Executive has knowledge, or induce or attempt to induce any such person to discontinue such employment or affiliation with the Parent Company or the Subsidiaries or such organization, as the case may be, or (ii) induce or attempt to induce
any client or customer of the Parent Company or the Subsidiaries on the date of termination to discontinue any business relationship or to refrain from entering into a new business relationship with the Parent Company or the Subsidiaries, including,
without limitation, the solicitation or interference with any borrowers or brokers who have submitted loans or loan applications to the Parent Company or the Subsidiaries.



10. Assistance with Claims. The Executive agrees that, for the period beginning on the Effective Date, and continuing
for a reasonable period after the Executives Date of Termination, the Executive will assist the Parent Company and the Subsidiaries in the defense of any claims that may be made against the Parent Company and the Subsidiaries, and will assist
the Parent Company and the Subsidiaries in the prosecution of any claims that may be made by the Parent Company or the Subsidiaries, to the extent that such claims may relate to services performed by the Executive for the Parent Company and the
Subsidiaries. The Executive agrees to promptly inform the Parent Company if he becomes aware of any lawsuits involving such claims that may be filed against the Parent Company or any Subsidiary. The Employer and the Parent Company agrees to provide
legal counsel to the Executive in connection with such assistance (to the extent legally permitted), and to reimburse the Executive for all of the Executives reasonable out-of-pocket expenses associated with such assistance, including travel
expenses. For periods after the Executives employment with the Employer terminates, the Employer agrees to provide reasonable compensation to the Executive for such assistance. The Executive also agrees to promptly inform the Parent Company if
he is asked to assist in any investigation of the Parent Company or the Subsidiaries (or their actions) that may relate to services performed by the Executive for the Parent Company or the Subsidiaries, regardless of whether a lawsuit has then been
filed against the Parent Company or the Subsidiaries with respect to such investigation.



11. Equitable Remedies. The Executive acknowledges that the Parent Company would be irreparably injured by a violation of paragraph 7, 8, or 9, and he agrees that the Parent Company, in addition to any other
remedies available to it for such breach or threatened breach, shall be entitled to a preliminary injunction, temporary restraining order, or other equivalent relief, restraining the Executive from any actual or threatened breach of paragraph 7,
paragraph 8, or paragraph 9. If a bond is required to be posted in order for the Parent Company to secure an injunction or other equitable remedy, the parties agree that said bond need not be more than a nominal sum. The Parent Company acknowledges
that the Executive would be irreparably injured by a violation of paragraph 8, and agrees that the Executive, in addition to any other remedies available to him for such breach or threatened breach, shall be entitled to a preliminary injunction,
temporary restraining order, or other equivalent relief, restraining the Parent



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Company from any actual or threatened breach of paragraph 8. If a bond is required to be posted in order for the Executive to secure an injunction or other
equitable remedy, the parties agree that said bond need not be more than a nominal sum.



12. Amendment. This Agreement may be amended or cancelled only by mutual agreement of the parties in writing without the consent of any other person. So long as the Executive lives, no person, other than the
parties hereto, shall have any rights under or interest in this Agreement or the subject matter hereof.



13. Applicable Law. The provisions of this Agreement shall be construed in accordance with the laws of the State of California, without regard to
the conflict of law provisions of any state. All disputes shall be arbitrated or litigated (whichever is applicable) in Los Angeles, California.



14. Severability. The invalidity or unenforceability of any provision of this Agreement will not affect the validity or enforceability of any other
provision of this Agreement, and this Agreement will be construed as if such invalid or unenforceable provision were omitted (but only to the extent that such provision cannot be appropriately reformed or modified).



15. Waiver of Breach. No waiver by any party hereto of a breach of any
provision of this Agreement by any other party, or of compliance with any condition or provision of this Agreement to be performed by such other party, will operate or be construed as a waiver of any subsequent breach by such other party of any
similar or dissimilar provisions and conditions at the same or any prior or subsequent time. The failure of any party hereto to take any action by reason of such breach will not deprive such party of the right to take action at any time while such
breach continues.



16. Successors. This Agreement shall
be binding upon, and inure to the benefit of, the Parent Company and the Employer and their successors and assigns and upon any person acquiring, whether by merger, consolidation, purchase of assets or otherwise, all or substantially all of the
Parent Companys and the Employers, assets and business, respectively, and the successor shall be substituted for the Parent Company or the Employer, respectively, under this Agreement. The Parent Company and the Employer, as applicable,
will require any successor to expressly assume and agree to perform this Agreement in the same manner and to the same extent that the Parent Company and the Employer, as applicable, would be required to perform it if no such assignment or succession
had taken place. For the avoidance of doubt, it is recited that, for purposes of paragraphs 7 through 11, reference to the Parent Company and the Subsidiaries includes reference to their predecessors and successors.



17. Notices. Notices and all other communications provided for in this
Agreement shall be in writing and shall be delivered personally or sent by registered or certified mail, return receipt requested, postage prepaid, or sent by facsimile or prepaid overnight courier to the parties at the addresses set forth below (or
such other addresses as shall be specified by the parties by like notice). Such notices, demands, claims and other communications shall be deemed given:



(a) in the case of delivery by overnight service with guaranteed next day delivery, the next day or the day designated for delivery;



(b) in the case of certified or registered U.S. mail, five days after deposit
in the U.S. mail; or



(c) in the case of facsimile, the date
upon which the transmitting party received confirmation of receipt by facsimile, telephone or otherwise;



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provided, however, that in no event shall any such communications be deemed to be given later than the date they are
actually received. Communications that are to be delivered by the U.S. mail or by overnight service are to be delivered to the addresses set forth below:



to the Parent Company:



Aames Investment Corporation

350 S. Grand Avenue, 43rd Floor

Los Angeles, CA 90071



to the Employer:



Aames Financial Corporation

350 S. Grand Avenue, 43rd Floor

Los Angeles, CA 90071



or to the Executive:



All notices to the Parent Company shall be directed to the attention of General Counsel of the Parent Company, with a copy to the Secretary
of the Parent Company. Each party, by written notice furnished to the other party, may modify the applicable delivery address, except that notice of change of address shall be effective only upon receipt.



18. Survival of Agreement. Except as otherwise expressly provided in
this Agreement, the rights and obligations of the parties to this Agreement shall survive the termination of the Executives employment with the Employer.



IN WITNESS THEREOF, the Executive has hereunto set his hand, and the Parent Company and the Employer have caused these presents to be executed in their
names, all as of the Signing Date.



Executive/s/ John A. Vella




Aames Investment Corporation/s/ A. Jay MeyersonA. Jay Meyerson




Aames Financial Corporation/s/ A. Jay MeyersonA. Jay Meyerson




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