Document:

Employment Agreement Dated November 3, 2004

 EXHIBIT 10.3 
  
 EMPLOYMENT AGREEMENT 
  
 THIS AGREEMENT, made and entered into as of November 3, 2004 (the “Signing Date”), by and among A. Jay Meyerson (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 Executive Officer of the Parent Company. 

  

	(b)	During the Agreement Term, while the Executive is employed by the Employer, the Board of Directors of the Parent Company (the “Board”) shall use its best efforts to cause
the Executive to be elected as a member of the Board. 

  

	(c)	During the Agreement Term, while the Executive is employed by the Employer, his main office shall be at the Parent Company’s headquarters in Los Angeles County, California.
However, if the Parent Company relocates its headquarters to Orange County, California, the parties agree that the Executive’s main office will be relocated to such headquarters in Orange County, California. 

  

	(d)	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
Executive Officer of the Employer and of the Parent Corporation. 

  

	(e)	The Executive agrees that he shall perform his duties faithfully and efficiently subject to the directions of the Board. The Executive’s duties may include providing services
for the Parent Company and the Subsidiaries (as defined below), as determined by the Board; provided that the Executive shall not, without his consent, be assigned tasks that would be inconsistent with those of President and Chief Executive Officer
of the Parent Company. The Executive shall report to the Board 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. 

  

 1 

	(f)	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. 

  

	(g)	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 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. 

  

	(h)	The Agreement shall become effective on the “Effective Date,” which shall be the date of the closing of the initial public offering of the common stock of the Parent
Company (the “Public Offering Date”), if the Executive is employed by the Employer on that date. However, if the Executive is not employed by the Employer on the Public Offering Date, this Agreement will be void. 

 

	(i)	The “Agreement Term” shall be the period beginning on the Effective Date and ending on the three year anniversary of the Effective Date. Thereafter, as of the date the
Agreement Term (as it may be extended from time to time under this paragraph) would otherwise end, the Agreement Term will be automatically extended for 12 months, unless one party to this Agreement provides notice of non-renewal to each of the
others at least 90 days before the day that would be the last day of the Agreement Term in the absence of such renewal. A Notice of Termination shall be deemed to constitute a notice of non-renewal under this paragraph (i) to be effective as of the
earliest date permitted under this paragraph (i). 

  

	(j)	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 

 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 $425,000 (the “Salary”). The Executive’s Salary rate shall be reviewed annually 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 $650,000 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)	Options and Restricted Stock. As of the Effective Date: 

  

	 	(i)	The Executive shall be granted shares of restricted stock subject to the vesting schedule at the rate of 25% per year, if the Executive is then employed by the Employer, subject to
terms of this Agreement. The Executive will receive 32% of the initial restricted stock grant. 

  

	 	(ii)	In exchange for surrender and cancellation of Executive’s options to purchase 3,850,000 shares of Aames Financial Corporation common stock granted on October 25, 1999, August
4, 2000, December 29, 2000 and February 7, 2002, the Executive shall be granted restricted stock units of the Parent Company. With respect to each option, the total number of units so granted will equal (A) the amount by which the per share
consideration that would have been received by Aames Financial common shareholders had the holders of Aames Financial Series B convertible preferred stock and Series C convertible preferred stock received 

  

 3 

 the stated value of such shares in the merger (“Stated Value Adjustment”), exceeds the option
exercise price, multiplied by (B) the number of shares covered by the option, divided by (C) the initial public offering price of common stock of the Parent Company. Schedule A provides a summary of restricted stock units and value based on minimum,
middle and maximum valuation based upon the stated Value Adjustment. Schedule A is attached to and forms a part of this agreement. 
  

	(d)	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.
Notwithstanding the above, in lieu of providing additional life insurance for the Executive, the Employer shall pay the annual premiums in an amount not to exceed $25,000 annually, on Executive’s life insurance policies in amounts not to exceed
$1,000,000.00. However, neither the Parent Company nor the Employer shall be required to provide a benefit under this paragraph (d) if such benefit would duplicate (or otherwise be of the same type as) a benefit specifically required to be provided
under another provision of this Agreement. The Executive shall complete all forms and physical examinations, and otherwise take all other similar actions to secure coverage and benefits described in this paragraph 2, to the extent determined to be
necessary or appropriate by the Employer. 

  

	(e)	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. 

  

	(f)	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 (and any predecessor company to the Parent Company and the Subsidiaries), or the Executive’s service as an officer or member of the Board of Directors
of the Parent Company or any Subsidiary (or any predecessor company), 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 

  

 4 

 determined by the Board), and the Executive shall be covered under such insurance to the same extent as
other senior officers and directors 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 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 

  

 5 

 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) the assignment to the Executive of any duties materially inferior to those of the Executive’s position and status as set forth in paragraph 1, any material reduction in the authority or responsibility
of the Executive or other substantial reduction in the terms and conditions of the Executive’s employment, a change in Executive’s reporting relationship from the reporting relationship required in accordance with paragraph 1, or the
failure of the Executive to be elected or reelected to the Board; (ii) 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; (iii) 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); (iv) 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. Notwithstanding the provisions of
paragraph 1(a), the Board may elect an individual other than the Executive as the President of the Parent Company, which shall not be a breach of this Agreement, and shall not constitute Good Reason under this paragraph 3(d); provided that the
election of the President is approved by the Executive and the President reports to the Executive. 
  

	(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

  

 6 

 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 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 is a member of the Board of Directors of the Parent Company, or any of the Subsidiaries, or 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. 

  

	 	(ii)	Payment for unused vacation days, as determined in accordance with Employer policy as in effect from time to time. 

  

	 	(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. 

  

 7 

	 	(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. 

  

	 	(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 or member of
the Board of Directors 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. 

  
 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 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 $650,000 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 thirty-six (36) month period (the “Severance Period”), the Salary amount described in paragraph 2(a),

  

 8 

 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. 
  

	 	(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 $650,000 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. 

  

	 	(iii)	For the 36-month period following the Executive’s Date of Termination, the Employer shall pay the annual premiums, in an amount not to exceed $25,000 annually, on the
Executive’s life insurance policies in amounts not to exceed $1,000,000.00. 

  

	(e)	Options and Restricted Stock. If the Executive’s Date of Termination occurs during the Agreement Term under circumstances described paragraph 3(d) (relating to
Constructive Discharge) or paragraph 3(f) (relating to termination by the Employer without Cause): 

  

	 	(i)	Any outstanding restricted stock and restricted stock units granted to the Executive prior to the Date of Termination shall vest as of the Date of Termination.

  

	 	(ii)	The exercise restrictions with respect to stock options granted to the Executive shall lapse, and the options shall become vested and exercisable as of the Date of Termination. The
portion of any stock option granted to the Executive that is exercisable immediately prior to the Date of Termination, as well as the portion of any stock option that becomes exercisable by reason of this paragraph (ii) shall remain exercisable for
180 days after the Date of Termination, but in no event later than the date fixed for expiration of the option (determined without regard to Executive’s termination of employment). 

  
 Nothing in this Agreement shall be construed to permit the Executive to
purchase or sell securities of the Parent Company in violation of securities rules or other applicable rules. 
  

	(f)	Supplemental Payments. If (i) the Executive’s Date of Termination occurs at or after the end of the Agreement Term; (ii) during the Executive’s period of employment
he devoted reasonable efforts to implementation of a program for succession of leadership of the Parent Company after his Date of Termination and, pursuant to such succession program, the Executive made best efforts to present one or more qualified
candidates to the Board for such leadership positions(s), with Executive’s performance to be reasonably evaluated by the Board based on evaluation of process taken to identify and present qualified successor; (iii) the Executive agrees to
provide reasonable consultation services to the Parent Company and/or the Employer (not to exceed 200 hours per year) for three years after his Date of Termination; and (iv) the Executive is not entitled to benefits under paragraph (d) above; then:

  

 9 

	 	(i)	Beginning with the calendar month following the month in which the Executive’s Date of Termination occurs, the Executive will receive equal monthly Supplemental Payments from
the Employer for a period of 36 months at the rate of $350,000 per year. For purposes of this paragraph (i), services rendered as a member of the Board shall be counted toward the hours of service required of the Executive, and compensation set
forth in the preceding sentence shall, in part, constitute compensation for services as a director and shall be in lieu of any separate directors fees for performing services as a director (although the Executive shall be entitled to reimbursement
of out of pocket expenses as a director to the same extent as other directors). In the event of the Executive’s death during the Severance Period, the Employer shall continue to make the Supplemental Payments under this paragraph (f) to the
Executive’s estate. 

  

	 	(ii)	For purposes of determining the vesting of outstanding restricted stock and restricted stock units granted to the Executive that are not vested on the Date of Termination, the
Executive be treated as though he continues to be employed by the Employer after the Date of Termination until such restricted stock and restricted stock units vest, provided that for purposes of determining such vesting, the Executive’s
employment will be deemed to terminate at the time the Executive ceases to provide services in accordance with this paragraph (f) if such cessation is by reason of death, disability, or voluntary resignation, and further provided that the Executive
will become fully vested in all restricted stock and restricted stock units at the time he ceases to perform services in accordance with this paragraph (f) if such cessation occurs either at or after the end of the 36-month period following the Date
of Termination or by reason of termination by the Employer for any reason. 

  

	 	(iii)	For purposes of determining the vesting of outstanding stock options granted to the Executive that are not vested and exercisable on the Date of Termination, the Executive be
treated as though he continues to be employed by the Employer after the Date of Termination until such options vest and become exercisable, provided that for purposes of determining such vesting and exercisability, the Executive’s employment
will be deemed to terminate at the time the Executive ceases to provide services in accordance with this paragraph (f) if such cessation is by reason of death, disability, or voluntary resignation, and further provided that all such options will
become fully vested and exercisable at the time he ceases to perform services in accordance with this paragraph (f) if such cessation occurs either at or after the end of the 36-month period following the Date of Termination or by reason of
termination by the Employer for any reason. The portion of each such option shall remain exercisable for 180 days after that portion becomes vested. 

  

	 	(iv)	For the 36-month period following the Executive’s Date of Termination, the Employer shall pay the annual premiums, in an amount not to exceed $25,000 annually, on the
Executive’s life insurance policies in amounts not to exceed $1,000,000.00. 

  

 10 

	(g)	Medical Benefits. If the Executive’s Date of Termination occurs during the Agreement Term under circumstances described in paragraph 3(a) (relating to Executive’s
death), paragraph 3(b) (relating to Executive’s being Permanently Disabled), paragraph 3(d) (relating to Constructive Discharge), or paragraph 3(f) (relating to termination by the Employer without Cause), or if the Executive’s Date of
Termination occurs after the three-year anniversary of the Effective Date (regardless of the reason for such termination), then for the period beginning on the Date of Termination, and ending on the Executive’s 65th birthday (with respect to
the Executive) and ending on the 65th birthday of the Executive’s wife as of the Signing Date (with respect to the Executive’s wife), the Employer shall continue health and dental insurance benefits to the Executive and/or the
Executive’s wife (determined as of the Signing Date, and regardless of whether both survive after that date) which are concurrently being provided to active senior officers (and their spouses) of the Parent Company during that period, and the
Employer shall pay all premiums for such coverage. 

  

	(h)	Other Plans. Except as may be otherwise specifically provided in an amendment of this paragraph (h) adopted in accordance with paragraph 12, the Executive’s rights under
this paragraph 4 shall be in lieu of any benefits that may be otherwise payable to or on behalf of the Executive pursuant to the terms of any severance pay arrangement of the Parent Company or any Subsidiary including any agreement with Aames
Financial Corporation or any other, similar arrangement of the Parent Company or any Subsidiary providing benefits upon involuntary termination of employment including any agreement with Aames Financial Corporation. This paragraph (h) shall not be
construed to adversely affect the Executive’s rights under the terms of any option on stock of the Parent Company or any other award based on the stock of the Parent Company. 

  
 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 (including, without limitation, his duties as a member of the Board of Directors of the Parent Company or any Subsidiary) 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. 
  
 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 any amounts earned by the Executive in 
  

 11 

 other employment after termination of his employment with the Employer, or any amounts which might have been earned by
the Executive in other employment had he sought such other employment. This Agreement is personal to the Executive and may not be assigned by the Executive without the written consent of the Employer. Except as otherwise provided in this paragraph,
the interests of the Executive under this Agreement are not subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, attachment, or garnishment by creditors of the Executive or the Executive’s
beneficiary. However, to the extent that rights or benefits under this Agreement otherwise survive the Executive’s death, the Executive’s heirs and estate shall succeed to such rights and benefits pursuant to the Executive’s will or
the laws of descent and distribution; provided that the Executive shall have the right at any time and from time to time, by notice delivered to the Employer, to designate or to change the beneficiary or beneficiaries with respect to such benefits.

  
 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 

  

 12 

 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. 

  
 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 
  

 13 

 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 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 
  

 14 

 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; 

  
 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: 
  

 15 

 A. Jay Meyerson 
 121 Northstar Mall 
 Marina Del Rey, CA 90292 
  
 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/ A. Jay Meyerson
	 

  

	
	Aames Investment Corporation
	
	/s/ Pat Gonyea
	 

  

	
	Aames Financial Corporation
	
	/s/ Pat Gonyea
	 

  

 16Form of Aames Investment Corporation Indemnification Agreement

 EXHIBIT 10.4 
  
 FORM OF 
  
 INDEMNIFICATION AGREEMENT 
  
 THIS INDEMNIFICATION AGREEMENT is made and entered into this
                     day of
                            , 2005 (“Agreement”), by and between Aames Investment
Corporation, a Maryland 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 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. 
  
 AGREEMENT 
  
 The Company and Indemnitee hereby agree as follows: 
  
 1. Definitions. For purposes of this Agreement: 
  
 1.1 “Change in Control” means a change in control of the Company that occurs after the Effective Date, that must be reported under Item 6(e) of
Schedule 14A of Regulation 14A under the Securities Exchange Act of 1934, as amended (the “Act”), or in response to any similar item on any similar schedule or form, whether or not the Company is then subject to such reporting requirement.
A Change in Control will be deemed to have occurred if after the Effective Date any of the following events occur: 
  
 A. any “person” (as such term is used in Sections 13(d) and 14(d) of the Act) is or becomes the “beneficial owner” (as defined in
Rule 13d-3 under the Act), directly or indirectly, of the Company’s securities representing 25% or more of the combined voting power of the Company’s then outstanding securities without the prior approval of at least two thirds of the
members of the Board of Directors in office immediately prior to such person attaining such percentage interest; 
  

 B. a proxy contest occurs, or the Company is a party to a merger, consolidation, sale of assets, plan of
liquidation or other reorganization not approved by at least two-thirds of the members of the Board of Directors then in office, as a consequence of which members of the Board of Directors in office immediately prior to such transaction or event
constitute less than a majority of the Board of Directors thereafter; or 
  
 C. during any consecutive two-year period, other than as a result of an event described in Section 1.1(B), individuals who at the beginning of such period constituted the Board of Directors (including for this
purpose any new director whose election or nomination for election by the Company’s stockholders was approved by a vote of at least two-thirds of the directors then still in office who were directors at the beginning of such period) cease for
any reason to constitute at least a majority of the Board of Directors. 
  
 1.2 “Corporate Status” means with respect to the Indemnitee the status of such person as a director, trustee, officer, employee or agent of the Company or of any other corporation, partnership, joint venture, trust, employee
benefit plan or other enterprise for which such person is or was serving at the request of the Company. 
  
 1.3 “Disinterested Director” means a director of the Company who is not and was not a party to the Proceeding for which indemnification is
sought by Indemnitee 
  
 1.4 “Effective Date” means the
date of this Agreement. 
  
 1.5 “Expenses” includes all
reasonable attorneys’ fees, retainers, court costs, transcript costs, fees of experts, witness fees, travel expenses, duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees, and all other disbursements
or expenses of the types customarily incurred, and actually incurred, in connection with prosecuting, defending, preparing to prosecute or defend, investigating, or being or preparing to be a witness in a Proceeding. 
  
 1.6 “Independent Counsel” means a law firm, or a member of a law
firm, that is experienced in matters of corporation law and has not, nor in the past five years has been, retained to represent the Company or Indemnitee in any matter material to either such party, or any other party to or witness in the Proceeding
giving rise to a claim for indemnification under this Agreement. “Independent Counsel” does 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. If a Change of Control has not occurred, the Board of Directors will select the Independent Counsel, with the approval of
Indemnitee, which approval will not be unreasonably withheld. If a Change of Control has occurred, the Indemnitee will select the Independent Counsel, with the approval of the Board of Directors, which approval will not be unreasonably withheld.

  
 1.7 “Proceeding” includes any threatened, pending or
completed action, suit, arbitration, alternate dispute resolution mechanism, investigation, administrative hearing or any 
  

 2 

 other proceeding, whether civil, criminal, administrative or investigative (including on appeal), including any such
proceeding (i) pending or completed on or before the Effective Date, or (ii) with respect to any act or omission of the Company or any members of the Company’s board of directors committed prior to the Effective Date, unless otherwise
specifically agreed in writing by the Company and Indemnitee. 
  
 2. Services by Indemnitee. Indemnitee will serve as a director and/or officer of the Company. However, this Agreement does not impose any obligation on Indemnitee or the Company to continue Indemnitee’s service to the Company
beyond any period otherwise required by law or by other agreements or commitments of the parties, if any. 
  
 3. Indemnification - General. The Company will indemnify, and advance Expenses to, Indemnitee as provided in this Agreement and otherwise to the
maximum extent permitted by Maryland law in effect on the Effective Date and as amended from time to time. However, no change in Maryland law will have the effect of reducing the benefits available to Indemnitee based on Maryland law as in effect on
the Effective Date. The rights of Indemnitee provided in this Section 3 include, without limitation, the rights set forth in the other sections of this Agreement, including any additional indemnification permitted by Section 2-418(g) of the
Maryland General Corporation Law (the “MGCL”). 
  
 4.
Third Party Proceedings. Indemnitee is entitled to the rights of indemnification provided in this Section 4 if, by reason of his Corporate Status, he is, or is threatened to be, made a party to or a witness in any threatened, pending,
or completed Proceeding, other than a Proceeding by or in the right of the Company. Under this Section 4, Indemnitee will be indemnified against all judgments, penalties, fines and amounts paid in settlement and all Expenses actually and
reasonably incurred by him or on his behalf in connection with a Proceeding by reason of his Corporate Status unless one of the following is established: 
  
 A. The act or omission of Indemnitee was material to the matter giving rise to the Proceeding, and 
  
 1. was committed in bad faith, or 
  
 2. was the result of active and deliberate dishonesty; 
  
 B. Indemnitee actually received an improper personal benefit in money,
property or services; or 
  
 C. In the case of any criminal
Proceeding, Indemnitee had reasonable cause to believe that his conduct was unlawful. 
  
 5. Proceedings by or in the Right of the Company. Indemnitee is entitled to the rights of indemnification provided in this Section 5 if, by reason of his Corporate Status, he is, or is threatened to be,
made a party to or a witness in any threatened, pending or completed Proceeding brought by or in the right of the Company to procure a judgment in its favor. Under this Section 5, Indemnitee will be indemnified against all amounts paid in
settlement and all Expenses actually and reasonably incurred by him or on his behalf in connection with such Proceeding, unless one of the following is established: 
  

 3 

 A. The act or omission of Indemnitee was material to the matter giving rise to such a Proceeding, and

  
 (1) was committed in bad faith, or 
  
 (2) was the result of active and deliberate dishonesty; or 
  
 B. Indemnitee actually received an improper personal benefit in money,
property or services. 
  
 6. Court-Ordered Indemnification.
Notwithstanding any other provision of this Agreement, a court of appropriate jurisdiction, upon application of Indemnitee and such notice as the court requires, may order indemnification in certain circumstances. However, indemnification for any
Proceeding by or in the right of the Company, or in which liability has been adjudged in the circumstances described in Section 2-418(c) of the MGCL, will be limited to Expenses actually and reasonably incurred by Indemnitee or on his behalf in
connection with a Proceeding. The circumstances under which a court may order such indemnification as it deems proper are: 
  
 6.1 If it determines that Indemnitee is entitled to reimbursement under Section 2-418(d)(1) of the MGCL, the court will order indemnification, in which
case Indemnitee will be entitled to recover the expenses of securing such reimbursement; or 
  
 6.2 If it determines that Indemnitee is fairly and reasonably entitled to indemnification in view of all the relevant circumstances, whether or not Indemnitee has: 
  
 A. met the standards of conduct set forth in Section 2-418(b) of the MGCL;
or 
  
 B. been adjudged liable for receipt of an improper
personal benefit under Section 2-418(c) of the MGCL. 
  
 7.
Indemnification for Expenses of a Party Who is Wholly or Partly Successful. Notwithstanding any other provision of this Agreement, and without limiting any such provision, to the extent that Indemnitee is, by reason of his Corporate Status,
made a party to and is successful, on the merits or otherwise, in the defense of any Proceeding, he will be indemnified for all Expenses actually and reasonably incurred by him or on his behalf 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 will indemnify Indemnitee under this Section 7 for all Expenses
actually and reasonably incurred by him or on his behalf in connection with each successfully resolved claim, issue or matter, allocated on a reasonable and proportionate basis. For purposes of this Section 7 and without limitation, the
termination of any claim, issue or matter in such a Proceeding by dismissal, with or without prejudice, will be deemed to be a successful result as to such claim, issue or matter. 
  
 8. Advance of Expenses. The Company will advance all reasonable Expenses actually and reasonably incurred by or on
behalf of Indemnitee in connection with any 
  

 4 

 Proceeding (other than a Proceeding brought to enforce indemnification under this Agreement, applicable law, the Charter
or Bylaws of the Company, any agreement or a resolution of the stockholders entitled to vote generally in the election of directors or of the Board of Directors), to which Indemnitee is, or is threatened to be, made a party or a witness, within 10
days after the receipt by the Company of a statement or statements from Indemnitee requesting such advance or advances from time to time, whether prior to or after final disposition of such Proceeding. Such statement or statements must reasonably
evidence the Expenses incurred by Indemnitee. The statement or statements must include a written affirmation by Indemnitee of Indemnitee’s good faith belief that the standard of conduct necessary for indemnification by the Company, as
authorized by law and by this Agreement, has been met. The statement or statements must also include a written undertaking by or on behalf of Indemnitee, in substantially the form attached hereto as Exhibit A, or in such form as may be
required under applicable law as in effect at the time the undertaking is signed. The undertaking requires Indemnitee to reimburse the portion of any Expenses advanced to him relating to claims, issues or matters in the Proceeding for which it is
ultimately established that the standard of conduct was not met and which have not been successfully resolved as described in Section 7. To the extent that Expenses advanced to Indemnitee do not relate to a specific claim, issue or matter in
the Proceeding, such Expenses will be allocated on a reasonable and proportionate basis. The undertaking required by this Section 8 will be an unlimited general obligation by or on behalf of Indemnitee and will be accepted without reference
to Indemnitee’s financial ability to repay such advanced Expenses and without any requirement to post security therefor. 
  
 9. Procedure for Determination of Entitlement to Indemnification. 
  
 9.1 To obtain indemnification under this Agreement, Indemnitee must submit to the Company a written request, including such
documentation and information as is reasonably available to Indemnitee and is reasonably necessary to determine whether and to what extent Indemnitee is entitled to indemnification. The Secretary of the Company will, promptly upon receipt of such a
request for indemnification, advise the Board of Directors in writing that Indemnitee has requested indemnification. 
  
 9.2 Upon proper written request for indemnification by Indemnitee, a determination, if required by applicable law, with respect to Indemnitee’s
entitlement to indemnification will promptly be made in the following manner: 
  
 A. If a Change in Control has occurred, by Independent Counsel in a written opinion to the Board of Directors, a copy of which will be delivered to Indemnitee; or 
  
 B. If a Change of Control has not occurred, 
  
 (1) by the Board of Directors (or a duly authorized committee thereof) by a
majority vote of a quorum consisting of Disinterested Directors, or 
  
 (2) if a quorum of the Board of Directors consisting of Disinterested Directors is not obtainable or, even if obtainable, such quorum of Disinterested Directors so directs, by Independent Counsel in a written opinion to the Board of
Directors, a copy of which will be delivered to Indemnitee, or 
  

 5 

 (3) if so directed by a majority of the members of the Board of Directors, by the stockholders of the
Company. 
  
 9.3 If it is determined that Indemnitee is entitled
to indemnification, payment to Indemnitee will be made within 10 days after such determination. Indemnitee will cooperate with the person, persons or entity making such determination with respect to Indemnitee’s entitlement to indemnification,
including providing to such person, persons or entity, upon reasonable advance request, any documentation or information that is not privileged or otherwise protected from disclosure, and that is reasonably available to Indemnitee and reasonably
necessary to such determination in the discretion of the Board of Directors or Independent Counsel if retained pursuant to Section 9.2(B). Any Expenses actually and reasonably incurred by Indemnitee in cooperating with the person, persons or
entity making such determination will be borne by the Company (irrespective of the determination as to Indemnitee’s entitlement to indemnification) and the Company will indemnify and hold Indemnitee harmless therefrom. 
  
 9.4 Indemnitee will select the Independent Counsel. The Company may, within
10 days after written notice of such selection, deliver to Indemnitee a written objection to such selection, but such objection may be asserted only on the grounds that the selected Independent Counsel does not meet the requirements of
“Independent Counsel” as defined in this Agreement. Absent a proper and timely objection, the person so selected will act as Independent Counsel. If written objection is made and substantiated, the selected Independent Counsel may not
serve unless and until the objection is withdrawn or a court determines that the objection is without merit. If no Independent Counsel has been selected and not objected to within 20 days after the later of submission by Indemnitee of a written
request for indemnification and the final disposition of the Proceeding, Indemnitee may petition a court of competent jurisdiction for resolution of any objection that has been made by the Company to the selection of Independent Counsel, or for the
appointment as Independent Counsel of a person selected by the court or by such other person that the court may designate. The person with respect to whom all objections are so resolved or the person so appointed will act as Independent Counsel.
Upon the due commencement of any judicial proceeding or arbitration under Section 11.1, Independent Counsel will be discharged and relieved of any further responsibility in such capacity – subject to the then-prevailing applicable
standards of professional conduct. 
  
 10. Presumptions and
Effect of Certain Proceedings. 
  
 10.1 In making a
determination with respect to entitlement to indemnification hereunder, the person or persons or entity making such determination must presume that Indemnitee is entitled to indemnification under this Agreement if Indemnitee has submitted a request
for indemnification in accordance with Section 9.1. The Company will have the burden of proof to overcome that presumption in connection with the making of any determination contrary to that presumption. 
  
 10.2 The termination of any Proceeding by judgment, order, settlement,
conviction, a plea of nolo contendere or its equivalent, or an entry of an order of probation prior to judgment, does not create a presumption that Indemnitee did not meet the requisite standard of conduct described herein for
indemnification. 
  

 6 

 11. Remedies of Indemnitee. 
  
 11.1 Indemnitee will be entitled to an adjudication in an appropriate court
located in the State of Maryland, or in any other court of competent jurisdiction, of his entitlement to such indemnification or advance of Expenses if any of the following occur: 
  
 A. A determination is made pursuant to Section 9 of this Agreement that Indemnitee is not entitled to
indemnification under this Agreement; 
  
 B. Advance of Expenses
is not timely made pursuant to Section 8 of this Agreement; 
  
 C. No determination of entitlement to indemnification has been made pursuant to Section 9.2 of this Agreement within 60 days after receipt by the Company of the request for indemnification; 
  
 D. Payment of indemnification is not made pursuant to Section 7 of
this Agreement within 10 days after receipt by the Company of a written request therefor; or 
  
 E. Payment of indemnification is not made within 10 days after a determination has been made that Indemnitee is entitled to indemnification. 
  
 11.2 As an alternative to the remedy described in Section 11.1, 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 must commence such proceeding for adjudication or an award in arbitration within 180 days following
the date on which Indemnitee first has the right to commence such proceeding under Section 11.1. However, the remedies under Section 11.1 and Section 11.2 do not apply to a proceeding brought by Indemnitee to enforce his rights
under Section 7. 
  
 11.3 In any judicial proceeding or
arbitration commenced pursuant to this Section 11 the Company has the burden of proving that Indemnitee is not entitled to indemnification or advance of Expenses, as the case may be. 
  
 11.4 If a determination has been made under Section 9.2 of this
Agreement that Indemnitee is entitled to indemnification, the Company will be bound by such determination in any judicial proceeding or arbitration commenced pursuant to this Section 11, unless Indemnitee makes a misstatement of a material
fact, or omits a material fact necessary to make Indemnitee’s statement not materially misleading, in connection with the request for indemnification. 
  
 11.5 If Indemnitee seeks a judicial adjudication of or an award in arbitration to enforce his rights under, or to recover damages for breach of, this
Agreement, under this Section 11, then Indemnitee will be entitled to recover from the Company, and will be indemnified by the Company for, any and all Expenses actually and reasonably incurred by him in such judicial 
  

 7 

 adjudication or arbitration. If it is determined in such judicial adjudication or arbitration that Indemnitee is entitled
to receive part but not all of the indemnification or advance of Expenses sought, the Expenses incurred by Indemnitee in connection with such judicial adjudication or arbitration will be appropriately prorated. 
  
 12. Defense of the Underlying Proceeding. 
  
 12.1 Indemnitee must notify the Company promptly upon being served with or
receiving any summons, citation, subpoena, complaint, indictment, information, notice, request or other document relating to any Proceeding that may result in the right to indemnification or the advance of Expenses hereunder. However, the failure to
give any such notice will not disqualify Indemnitee from the right, or otherwise affect in any manner any right of Indemnitee, to indemnification or the advance of Expenses under this Agreement unless the Company’s ability to defend in such
Proceeding or to obtain proceeds under any insurance policy is materially and adversely prejudiced thereby, and then only to the extent the Company is actually so prejudiced. 
  
 12.2 Subject to the provisions of the last sentence of this Section 12.2 and of Section 12.3, the Company will
have the right to defend Indemnitee in any Proceeding that may give rise to indemnification hereunder. However, the Company must notify Indemnitee of any such decision to defend within 15 calendar days following receipt of notice of any such
Proceeding under Section 12.1. The Company may not, without the prior written consent of Indemnitee, consent to the entry of any judgment against Indemnitee, or enter into any settlement or compromise that (A) includes an admission of
Indemnitee’s fault or (B) does not include, as an unconditional term, the full release of Indemnitee from all liability in respect of such Proceeding. Such release must be in form and substance reasonably satisfactory to Indemnitee. This
Section 12.2 does not apply to a Proceeding brought by Indemnitee under Section 11 or Section 18. 
  
 12.3 Indemnitee will be entitled to representation by separate legal counsel of Indemnitee’s choice, subject to the Company’s prior approval,
which may not be unreasonably withheld, at the expense of the Company, in a Proceeding to which Indemnitee is a party by reason of Indemnitee’s Corporate Status, in the following circumstances: 
  
 A. Indemnitee reasonably concludes, based upon an opinion of counsel
approved by the Company, which approval may not be unreasonably withheld, that he may have separate defenses or counterclaims to assert with respect to any issue that may not be consistent with other defendants in such Proceeding; 
  
 B. Indemnitee reasonably concludes, based upon an opinion of counsel
approved by the Company, which approval may not be unreasonably withheld, that an actual or apparent conflict of interest or potential conflict of interest exists between Indemnitee and the Company; 
  
 C. If the Company fails to assume the defense of such Proceeding in a timely
manner; or 
  

 8 

 D. If the Company fails to comply with any of its obligations under this Agreement or the Company or any
other person takes any action to declare this Agreement void or unenforceable, or institutes any Proceeding to deny or to recover from Indemnitee the benefits intended to be provided to Indemnitee under this Agreement. 
  
 13. Non-Exclusivity; Survival of Rights; Subrogation; Insurance.

  
 13.1 The rights of indemnification and advance of Expenses
provided by this Agreement will not be deemed exclusive of any other rights to which Indemnitee may at any time be entitled under applicable law, the Charter or Bylaws of the Company, any agreement or a resolution of the stockholders entitled to
vote generally in the election of directors or of the Board of Directors, or otherwise. No amendment, alteration or repeal of this Agreement or of any provision hereof may limit or restrict any right of Indemnitee under this Agreement in respect of
any action taken or omitted by such Indemnitee in his Corporate Status prior to such amendment, alteration or repeal. 
  
 13.2 If any payment is made under this Agreement, the Company will be subrogated to the extent of such payment to all of the rights of recovery of
Indemnitee, who will execute all papers required and take all action necessary to secure such rights, including execution of such documents as are necessary to enable the Company to bring suit to enforce such rights. 
  
 13.3 The Company will not be liable under this Agreement to make any payment
of amounts otherwise indemnifiable or payable or reimbursable as Expenses hereunder if and to the extent that Indemnitee has otherwise actually received such payment under any insurance policy, contract, agreement or otherwise. 
  
 14. Insurance. The Company will use its reasonable best efforts to
acquire directors and officers liability insurance, on terms and conditions deemed appropriate by the Board of Directors of the Company, with the advice of counsel, covering Indemnitee or any claim made against Indemnitee for service as a director
or officer of the Company and covering the Company for any indemnification or advance of Expenses made by the Company to Indemnitee for any claims made against Indemnitee for service as a director or officer of the Company. Without limiting any
other obligation under this Agreement, the Company will indemnify Indemnitee for any payment by Indemnitee arising out of the amount of any deductible or retention and the amount of any excess of the aggregate of all judgments, penalties, fines,
settlements and reasonable Expenses actually and reasonably incurred by Indemnitee in connection with a Proceeding over the coverage of any insurance referred to in the previous sentence. 
  
 15. Indemnification for Expenses of a Witness. Notwithstanding any other provision of this Agreement, if Indemnitee
is or may be, by reason of his Corporate Status, a witness in any Proceeding, whether instituted by the Company or any other party, and to which Indemnitee is not a party but in which the Indemnitee receives a subpoena to testify, he will be
advanced all reasonable Expenses and indemnified against all Expenses actually and reasonably incurred by him or on his behalf in connection therewith. 
  

 9 

 16. Duration of Agreement; Binding Effect. 
  
 16.1 This Agreement will terminate 10 years after the date that
Indemnitee’s Corporate Status ceases. However, the rights of Indemnitee hereunder will continue until the final termination of any Proceeding then pending in respect of which Indemnitee is granted rights of indemnification or advance of
Expenses hereunder and of any proceeding commenced by Indemnitee pursuant to Section 11 of this Agreement relating thereto. 
  
 16.2 The indemnification and advance of Expenses provided by, or granted under, this Agreement will be binding upon and enforceable by the parties hereto
and their respective successors and assigns (including any direct or indirect successor by purchase, merger, consolidation or otherwise to all or substantially all of the business or assets of the Company). The indemnification and advance of
Expenses will continue as to an Indemnitee who has ceased to be a director, trustee, officer, employee or agent of the Company or of any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise that such person
is or was serving at the written request of the Company, and will inure to the benefit of Indemnitee and his spouse, assigns, heirs, devisees, executors and administrators and other legal representatives. 
  
 16.3 The Company will require and cause any successor to all, substantially
all or a substantial part, of the business and/or assets of the Company – whether direct or indirect by purchase, merger, consolidation or otherwise – to expressly assume and agree to perform this Agreement in the same manner and to the
same extent that the Company would be required to perform if no such succession had taken place. Such assumption by any successor must be in writing in form and substance satisfactory to Indemnitee. 
  
 17. Severability. If any provision or provisions of this Agreement are
held to be invalid, illegal or unenforceable for any reason whatsoever, the validity, legality and enforceability of the remaining provisions of this Agreement (including, without limitation, each portion of any section of this Agreement containing
any such provision held to be invalid, illegal or unenforceable that is not itself invalid, illegal or unenforceable) will not in any way be affected or impaired thereby. To the fullest extent possible, the provisions of this Agreement (including,
without limitation, each portion of any section of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) will be construed so as to give effect to the intent
manifested thereby. 
  
 18. Exception to Right of
Indemnification or Advance of Expenses. Notwithstanding any other provision of this Agreement, Indemnitee will not be entitled to indemnification or advance of Expenses under this Agreement with respect to any Proceeding brought by Indemnitee,
unless: 
  
 A. The Proceeding is brought to enforce
indemnification under this Agreement, and then only to the extent in accordance with and as authorized by Sections 8 and 11 of this Agreement; or 
  

B. The Company’s Bylaws, the Charter, a resolution of the stockholders entitled to vote generally in the election of directors or of the Board of
Directors or an agreement approved by the Board of Directors to which the Company is a party expressly provide otherwise. 
  

 10 

 19. Identical Counterparts. This Agreement may be executed in one or more counterparts, each of
which will be deemed to be an original but all of which together will constitute one and the same Agreement. One such counterpart signed by the party against whom enforceability is sought will be sufficient to evidence the existence of this
Agreement. 
  
 20. Headings. The headings of the paragraphs
of this Agreement are inserted for convenience only and will not be deemed to constitute part of this Agreement or to affect the construction thereof. 
  
 21. Modification and Waiver. No supplement, modification or amendment of this Agreement will be binding unless executed in writing by both of the
parties hereto. No waiver of any of the provisions of this Agreement will be deemed or constitute a waiver of any other provisions hereof (whether or not similar), nor will such waiver constitute a continuing waiver. 
  
 22. Notices. Addresses for notice to either party are as shown on the
signature pages of this Agreement, or as later modified by written notice. All notices, requests, demands and other communications hereunder must be in writing and will be deemed to have been duly given if: 
  
 A. Delivered by hand and receipted for by the party to whom said notice or
other communication has been directed; or 
  
 B. Mailed by
certified or registered mail with postage prepaid, on the third business day after the date on which it is so mailed. 
  
 23. Governing Law. The parties agree that this Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State
of Maryland, without regard to its conflicts of laws rules. 
  
 24. Miscellaneous. Use of the masculine pronoun will be deemed to include usage of the feminine pronoun where appropriate. 
  
 [SIGNATURE PAGE FOLLOWS] 
  

 11 

 IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the day and year first above
written. 
  

					
	ATTEST:	  	 AAMES INVESTMENT CORPORATION,
 a Maryland
corporation

			
	
	  	By:	 	 (SEAL)                

	 	  	Name:	 	 
	 	  	Title:	 	 
		
	WITNESS:	  	INDEMNITEE:
		
	
	  	

	 	  	Name:	 	 

  

 12 

 EXHIBIT A 
  

FORM OF UNDERTAKING TO REPAY EXPENSES ADVANCED 
  
 The Board of Directors of Aames Investment Corporation 
 Re: Undertaking to
Repay Expenses Advanced 
  
 Ladies and Gentlemen: 
  
 This undertaking is being provided pursuant to that certain Indemnification
Agreement dated the                      day of
                    , 2005, by and between Aames Investment Corporation (the “Company”) and the undersigned Indemnitee (the
“Indemnification Agreement”), pursuant to which I am entitled to advance of expenses in connection with [Description of Proceeding] (the “Proceeding”). 
  
 Terms used herein and not otherwise defined have the meanings specified in the Indemnification Agreement. 
  
 I am subject to the Proceeding by reason of my Corporate Status or by reason
of alleged actions or omissions by me in such capacity. I hereby affirm that at all times, insofar as I was involved as [a director] [an officer] of the Company, in any of the facts or events giving rise to the Proceeding, I (1) acted
in good faith and honestly, (2) did not receive any improper personal benefit in money, property or services and (3) in the case of any criminal proceeding, had no reasonable cause to believe that any act or omission by me was unlawful. 

 
 In consideration of the advance of Expenses by the Company for reasonable
attorneys’ fees and related expenses incurred by me in connection with the Proceeding (the “Advanced Expenses”), I hereby agree that if, in connection with the Proceeding, it is established that (1) an act or omission by me was
material to the matter giving rise to the Proceeding and (a) was committed in bad faith or (b) was the result of active and deliberate dishonesty or (2) I actually received an improper personal benefit in money, property or services or (3) in the
case of any criminal proceeding, I had reasonable cause to believe that the act or omission was unlawful, then I must promptly reimburse the portion of the Advanced Expenses relating to the claims, issues or matters in the Proceeding as to which the
foregoing findings have been established and which have not been successfully resolved as described in Section 7 of the Indemnification Agreement. To the extent that Advanced Expenses do not relate to a specific claim, issue or matter in the
Proceeding, I agree that such Expenses will be allocated on a reasonable and proportionate basis. 
  
 IN WITNESS WHEREOF, I have executed this Affirmation and Undertaking on this
                     day of
                                , 200    . 

 
  

			
	 WITNESS:
	 	 
	  

	 	 (SEAL)

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00082-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00082-of-00352.parquet"}]]