Document:

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                                                                EXHIBIT 10.13(c)
                                PLEDGE AGREEMENT

                  PLEDGE AGREEMENT ("AGREEMENT"), dated as of October 1, 1999,
made by Neil Notkin, an individual residing at [XXXADDRESS DELETED FOR
PRIVACYXXX] (the "PLEDGOR"), to Aames Financial Corporation, a Delaware
corporation ("AAMES").

                  WHEREAS, on the date hereof, the Pledgor is purchasing shares
of Aames' Series C Convertible Preferred Stock, par value $0.001 per share
("SERIES C PREFERRED STOCK"), pursuant to a Management Investment Agreement,
dated the date hereof, between Pledgor and Aames (the "MANAGEMENT INVESTMENT
AGREEMENT"); and

                  WHEREAS, as part of the transactions contemplated by the
Management Investment Agreement, the Pledgor is executing and delivering to
Aames a Secured Promissory Note dated as of the date hereof in favor of Aames
(the "AAMES NOTE") as part of the purchase price for the Series C Preferred
Stock, and in accordance with the terms and conditions set forth herein,
pledging the Series C Preferred Stock, together with any shares of Aames' common
stock, par value $0.001 per share that may be acquired upon conversion of the
Series C Preferred Stock (the "UNDERLYING COMMON SHARES, and, together with the
shares of Series C Preferred Stock, the "PLEDGED SHARES").

                  NOW, THEREFORE, in consideration of the premises and the
mutual covenants contained in this Agreement, and in order to induce Aames to
accept the Aames Note, the Pledgor hereby agrees as follows:

                  SECTION 1. PLEDGE. The Pledgor hereby pledges to Aames, and
grants to Aames a security interest in, the following (the "PLEDGED
COLLATERAL"):

                  (i) the Pledged Shares and the certificates representing the
Pledged Shares, and all dividends, cash, instruments and other property of any
character whatsoever (including, without limitation, shares of Common Stock)
from time to time received, receivable or otherwise distributed or distributable
in respect of or in exchange for any or all of the Pledged Shares; and

                  (ii) all proceeds of any and all of the foregoing collateral
(including, without limitation, proceeds that constitute property of the types
described above).

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                  SECTION 2. SECURITY FOR OBLIGATIONS. This Agreement secures
the payment of all obligations, whether for principal, interest, fees, expenses
or otherwise, now or hereafter existing, of the Pledgor under the Aames Note and
under this Agreement (all such obligations of the Pledgor being the
"OBLIGATIONS"). Without limiting the generality of the foregoing, this Agreement
secures the payment of all amounts which constitute part of the Obligations and
would be owed by the Pledgor to Aames under the Aames Note or this Agreement but
for the fact that they are unenforceable or not allowable due to the existence
of a bankruptcy, reorganization or similar proceeding involving the Pledgor.

                  SECTION 3. DELIVERY OF PLEDGED COLLATERAL. All certificates or
instruments representing or evidencing the Pledged Collateral shall be delivered
to and held by or on behalf of Aames pursuant hereto and shall be in suitable
form for transfer by delivery, or shall be accompanied by duly executed
instruments of transfer or assignment in blank, all in form and substance
satisfactory to Aames. Aames shall have the right, at any time in its discretion
and without notice to the Pledgor, to transfer to or to have registered in the
name of Aames or any of its nominees any or all of the Pledged Collateral,
subject only to the revocable rights specified in Section 6(a). For the better
perfection of Aames's rights in and to the Pledged Collateral, the Pledgor shall
forthwith, upon the pledge of any Pledged Collateral hereunder, cause such
Pledged Collateral to be registered in the name of Aames or such nominee or
nominees of Aames as Aames shall direct, subject only to the revocable rights
specified in Section 6(a). In addition, Aames shall have the right at any time
to exchange certificates or instruments representing or evidencing Pledged
Collateral for certificates or instruments of smaller or larger denominations.

                  SECTION 4. REPRESENTATIONS AND WARRANTIES. The Pledgor
represents and warrants as follows:

                  (a) Neither the execution nor the delivery by the Pledgor of
         this Agreement nor the consummation by the Pledgor of the transactions
         contemplated hereby, nor compliance with nor fulfillment by the Pledgor
         of the terms and provisions hereof, will conflict with or result in a
         breach of the terms, conditions or provisions of or constitute a
         default under any lease, contract, instrument, mortgage, deed of trust,
         trust deed or deed to secure debt evidencing or securing indebtedness
         for borrowed money, financing lease, law, rule, regulation, judgment,
         order,

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         award, decree or other restriction of any kind to which the Pledgor is
         a party or by which he is bound.

                  (b) This Agreement has been duly executed and delivered by the
         Pledgor and is the legal, valid and binding obligation of the Pledgor,
         enforceable against the Pledgor in accordance with its terms.

                  (c) There is no action, lawsuit, claim, counterclaim,
         proceeding, or investigation (or group of related actions, lawsuits,
         claims, proceedings or investigations) pending or, to the knowledge of
         the Pledgor, threatened, relating to or challenging the Pledgor's
         obligations under this Agreement or the pledge of the Pledged
         Collateral hereunder.

                  (d) The Pledgor is the legal and beneficial owner of the
         Pledged Collateral free and clear of any lien, security interest,
         option or other charge or encumbrance except for the security interest
         created by this Agreement.

                  (e) The pledge of the Pledged Shares pursuant to this
         Agreement creates a valid and perfected first priority security
         interest in the Pledged Collateral, securing the payment of the
         Obligations.

                  (f) No consent of any other person or entity and no
         authorization, approval, or other action by, and no notice to or filing
         with, any governmental authority or regulatory body is required (i) for
         the pledge by the Pledgor of the Pledged Collateral pursuant to this
         Agreement or for the execution, delivery or performance of this
         Agreement by the Pledgor, (ii) for the perfection or maintenance of the
         security interest created hereby (including the first priority nature
         of such security interest) or (iii) for the exercise by Aames of the
         voting or other rights provided for in this Agreement or the remedies
         in respect of the Pledged Collateral pursuant to this Agreement (except
         as may be required in connection with any disposition of any portion of
         the Pledged Collateral by laws affecting the offering and sale of
         securities generally).

                  (g) There are no conditions precedent to the effectiveness of
         the Pledgor's obligations under this Agreement that have not been
         satisfied or waived.

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                  SECTION 5. FURTHER ASSURANCES. (a) The Pledgor agrees that at
any time and from time to time, at the expense of the Pledgor, the Pledgor will
promptly execute and deliver all further instruments and documents, and take all
further action, that may be necessary or desirable, or that Aames may reasonably
request, in order to perfect and protect any security interest granted or
purported to be granted hereby or to enable Aames to exercise and enforce its
rights and remedies hereunder with respect to any Pledged Collateral.

                  (b) The Pledgor hereby authorizes Aames to file one or more
financing or continuation statements, and amendments thereto, relating to all or
any part of the Pledged Collateral without the signature of the Pledgor where
permitted by law. A photocopy or other reproduction of this Agreement or any
financing statement covering the Pledged Collateral or any part thereof shall be
sufficient as a financing statement where permitted by law.

                  SECTION 6. VOTING RIGHTS; DIVIDENDS, ETC. (a) so long as no
Event of Default (as defined in the Aames Note) or event which, with the giving
of notice or the lapse of time, or both, would become such an Event of Default
shall have occurred and be continuing:

                  (i) The Pledgor shall be entitled to exercise or refrain from
         exercising any and all voting and other consensual rights pertaining to
         the Pledged Collateral or any part thereof for any purpose not
         inconsistent with the terms of this Agreement or the Aames Note;
         PROVIDED, HOWEVER, that the Pledgor shall not exercise or refrain from
         exercising any such right if, in Aames's judgment, such action would
         have a material adverse effect on the value of the Pledged Collateral
         or any part thereof.

                  (ii) The Pledgor shall be entitled to any and all dividends
         paid in respect of the Pledged Collateral; PROVIDED, HOWEVER, that any
         and all dividends paid or payable other than in cash in respect of, and
         instruments and other property received, receivable or otherwise
         distributed in respect of or in exchange for, any Pledged Collateral,
         shall be, and shall be forthwith delivered to Aames to hold as, Pledged
         Collateral and shall, if received by the Pledgor, be received in trust
         for the benefit of Aames, be segregated from the other property or
         funds of the Pledgor, and be forthwith delivered to Aames as Pledged
         Collateral in the same form as so received (with any

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         necessary endorsement or assignment); and PROVIDED, FURTHER, that
         the after tax amount of any cash dividends, proceeds, or other
         distributions paid in respect of the Pledged Collateral shall be
         applied as an immediate prepayment in respect of the Aames Note,
         with such prepayments to be applied first to the payment of all
         interest accrued on, and then to the payment of unpaid principal of,
         the Aames Note.

                  (iii) Aames shall execute and deliver (or cause to be executed
         and delivered) to the Pledgor all such proxies and other instruments as
         the Pledgor may reasonably request for the purpose of enabling the
         Pledgor to exercise the voting and other rights which it is entitled to
         exercise pursuant to paragraph (i) above and to receive the dividends
         which it is authorized to receive and retain pursuant to paragraph (ii)
         above.

                  (b) Upon the occurrence and during the continuance of an Event
of Default or an event which, with the giving of notice or the lapse of time, or
both, would become an Event of Default:

                  (i) All rights of the Pledgor (x) to exercise or refrain from
         exercising the voting and other consensual rights which it would
         otherwise be entitled to exercise pursuant to Section 6(a)(i) shall,
         upon notice to the Pledgor by Aames, cease and (y) to receive the
         dividends payments which it would otherwise be authorized to receive
         and retain pursuant to Section 6(a)(ii) shall automatically cease, and
         all such rights shall thereupon become vested in Aames (or its
         designee), who shall thereupon have the sole right to exercise or
         refrain from exercising such voting and other consensual rights and to
         receive and hold as Pledged Collateral such dividends.

                  (ii) All dividends which are received by the Pledgor contrary
         to the provisions of paragraph (i) of this Section 6(b) shall be
         received in trust for the benefit of Aames, shall be segregated from
         other funds of the Pledgor and shall be forthwith paid over to Aames as
         Pledged Collateral in the same form as so received (with any necessary
         endorsement).

                  SECTION 7. TRANSFERS AND OTHER LIENS. The Pledgor agrees that
it will not (i) sell, assign (by operation of law or otherwise) or otherwise
dispose of, or grant any option with respect to, any of the Pledged Collateral
or (ii) create or

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permit to exist any lien, security interest, option or other charge or
encumbrance upon or with respect to any of the Pledged Collateral, except for
the security interest under this Agreement and except for any such sale the
proceeds from which are used to repay all unpaid principal of, and accrued
interest on, the Aames Note (with such proceeds first being applied to
accrued interest and then to principal).

                  SECTION 8. APPOINTMENT OF ATTORNEY-IN-FACT. The Pledgor hereby
appoints Aames Financial Corporation the Pledgor's attorney-in-fact, with full
authority in the place and stead of the Pledgor and in the name of the Pledgor
or otherwise, from time to time in Aames's discretion to take any action and to
execute any instrument that Aames may deem necessary or advisable to accomplish
the purposes of this Agreement (subject to the rights of the Pledgor under
Section 6), including, without limitation, to receive, indorse and collect all
instruments made payable to the Pledgor representing any dividend or other
distribution in respect of the Pledged Collateral or any part thereof and to
give full discharge for the same.

                  SECTION 9. AAMES MAY PERFORM. If the Pledgor fails to perform
any agreement contained herein and does not cure such failure within 10 days
after its receipt of written notice from Aames, Aames may itself perform, or
cause performance of, such agreement, and the expenses of Aames incurred in
connection therewith shall be payable by the Pledgor under Section 12.

                  SECTION 10. AAMES' DUTIES. The powers conferred on Aames
hereunder are solely to protect its interest in the Pledged Collateral and shall
not impose any duty upon it to exercise any such powers. Except for the safe
custody of any Pledged Collateral in its possession and the accounting for
moneys actually received by it hereunder, Aames shall have no duty as to any
Pledged Collateral as to ascertaining or taking action with respect to calls,
conversions, exchanges, maturities, tenders or other matters relative to any
Pledged Collateral, whether or not Aames has or is deemed to have knowledge of
such matters, or as to the taking of any necessary steps to preserve rights
against any parties or any other rights pertaining to any Pledged Collateral.
Aames shall be deemed to have exercised reasonable care in the custody and
preservation of any Pledged Collateral in its possession if such Pledged
Collateral is accorded treatment substantially equal to that which Aames accords
its own property.

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                  SECTION 11. REMEDIES UPON DEFAULT. If any Event of Default
shall have occurred and be continuing:

                  (a) Aames may exercise in respect of the Pledged Collateral,
         in addition to other rights and remedies provided for herein or
         otherwise available to it, all the rights and remedies of a secured
         party on default under the Uniform Commercial Code in effect in the
         State of Delaware at that time (the "Code") (whether or not the Code
         applies to the affected Collateral), and may also, without notice
         except as specified below, sell the Pledged Collateral or any part
         thereof in one or more parcels at public or private sale, at any
         exchange or broker's board or elsewhere, for cash, on credit or for
         future delivery, and upon such other terms as Aames may deem
         commercially reasonable. The Pledgor agrees that, to the extent notice
         of sale shall be required by law, at least ten days' notice to the
         Pledgor of the time and place of any public sale or the time after
         which any private sale is to be made shall constitute reasonable
         notification. Aames shall not be obligated to make any sale of Pledged
         Collateral regardless of notice of sale having been given. Aames may
         adjourn any public or private sale from time to time by announcement at
         the time and place fixed therefor, and such sale may, without further
         notice, be made at the time and place to which it was so adjourned.

                  (b) Any cash held by Aames as Pledged Collateral and all cash
         proceeds received by Aames in respect of any sale of, collection from
         or other realization upon all or any part of the Pledged Collateral
         may, in the discretion of Aames, be held by Aames as collateral for,
         and/or then or at any time thereafter be applied (after payment of any
         amounts payable to Aames pursuant to Section 12) in whole or in part by
         Aames against, all or any part of the Obligations in such order as
         Aames shall elect. Any surplus of such cash or cash proceeds held by
         Aames and remaining after payment in full of all the Obligations shall
         be paid over to the Pledgor or to whomsoever may be lawfully entitled
         to receive such surplus.

                  SECTION 12. EXPENSES. The Pledgor will upon demand pay to
Aames the amount of any and all reasonable expenses, including the reasonable
fees and expenses of its counsel and of any experts and agents, which Aames may
incur in connection with (i) the exercise or enforcement of any of the rights of
Aames

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hereunder or (ii) the failure by the Pledgor to perform or observe any of the
provisions hereof.

                  SECTION 13. SECURITY INTEREST ABSOLUTE. The obligations of the
Pledgor under this Agreement are independent of the Obligations, and a separate
action or actions may be brought and prosecuted against the Pledgor to enforce
this Agreement. All rights of Aames and security interests hereunder, and all
obligations of the Pledgor hereunder, shall be absolute and unconditional
irrespective of:

                  (i)   any lack of validity or enforceability of the Aames Note
         any other agreement or instrument relating thereto;

                  (ii)  any change in the time, manner or place of payment of,
         or in any other term of, all or any of the obligations, or any other
         amendment or waiver of or any consent to any departure from the Aames
         Note;

                  (iii) any taking, exchange, release or nonperfection of any
         other collateral, or any taking, release or amendment or waiver of or
         consent to departure from any guaranty, for all or any of the
         Obligations;

                  (iv)  any manner of application of collateral, or proceeds
         thereof, to all or any of the Obligations, or any manner of sale or
         other disposition of any collateral for all or any of the Obligations
         or any other assets of the Pledgor;

                  (v)   any other circumstance which might otherwise constitute
         a defense available to, or a discharge of, the Pledgor.

                  SECTION 14. AMENDMENTS, ETC. No amendment or waiver of any
provision of this Agreement shall in any event be effective unless the same
shall be in writing and signed by the parties hereto, and no consent to any
departure by one party herefrom, shall in any event be effective unless the same
shall be in writing and signed by the other party, and then such waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given.

                  SECTION 15. NOTICES, ETC. All notices and other communications
provided for hereunder shall be in writing (including telecopier, telegraphic or
telex communication) and

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sent by express courier, telecopied, telegraphed, telexed or hand-delivered,
if to the Pledgor, at his address first set forth above; and, if to Aames, at
its address at 2 California Plaza, 350 South Grand Avenue, Los Angeles, CA
90071, Attention: Cary Thompson; or, as to each party, at such other address
as shall be designated by such party in a written notice to the other party.
All such notices and communications shall, when sent by express courier, be
effective three days after being sent, when telecopied, telegraphed, telexed
or hand-delivered, be effective when telecopied, delivered to the telegraph
company, confirmed by telex answerback or delivered, respectively.

                  SECTION 16. CONTINUING SECURITY INTEREST; ASSIGNMENTS UNDER
AAMES NOTE. This Agreement shall create a continuing security interest in the
Pledged Collateral and shall (i) remain in full force and effect until the
payment in full of the Obligations and all other amounts payable under this
Agreement, (ii) be binding upon the Pledgor, its successors and assigns and
(iii) inure to the benefit of, and be enforceable by, Aames and its successors,
transferees and assigns. Without limiting the generality of the foregoing clause
(iii), Aames may assign or otherwise transfer all or any portion of its rights
and obligations under the Aames Note to any other person or entity, and such
other person or entity shall thereupon become vested with all the benefits in
respect thereof granted to Aames herein or otherwise. Upon the payment in full
of the Obligations and all other amounts payable under this Agreement, the
security interest granted hereby shall terminate and all rights to the Pledged
Collateral shall revert to the Pledgor. Upon any such termination, Aames will,
at the Pledgor's expense, return to the Pledgor such of the Pledged Collateral
as shall not have been sold or otherwise applied pursuant to the terms hereof
and execute and deliver to the Pledgor such documents as the Pledgor shall
reasonably request to evidence such termination.

                  SECTION 17. GOVERNING LAW; TERMS. THIS AGREEMENT SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF DELAWARE
EXCEPT TO THE EXTENT THAT THE VALIDITY OR PERFECTION OF THE SECURITY INTEREST
HEREUNDER, OR REMEDIES HEREUNDER, IN RESPECT OF ANY PARTICULAR PLEDGED
COLLATERAL ARE GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN THE STATE OF
DELAWARE. Unless otherwise defined herein or in the Aames Note, terms defined in
Article 9 of the Code are used herein as therein defined.

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                  IN WITNESS WHEREOF, the Pledgor has caused this Agreement to
be duly executed and delivered by its officer thereunto duly authorized as of
the date first above written.

                                                  /s/ NEIL NOTKIN
                                                  ----------------------------
                                                  Pledgor

ACKNOWLEDGED AND AGREED:

AAMES FINANCIAL CORPORATION

By:       /s/ BARBARA S. POLSKY
   --------------------------------
   Name:  Barbara S. Polsky
   Title: Executive Vice President<PAGE>

                                                                EXHIBIT 10.14(a)

                         MANAGEMENT INVESTMENT AGREEMENT

                  MANAGEMENT INVESTMENT AGREEMENT (this "AGREEMENT") dated as of
October 1, 1999, between Aames Financial Corporation, a Delaware corporation
(the "COMPANY"), and Geoffrey F. Sanders, an individual residing at [XXXADDRESS
DELETED FOR PRIVACYXXX](the "MANAGEMENT INVESTOR").

                  WHEREAS, the Management Investor is a senior management
employee of the Company; and

                  WHEREAS, the Management Investor desires to purchase from the
Company, and the Company desires to sell to the Management Investor, shares of
the Company's Series C Convertible Preferred Stock, par value $0.001 per share
("SERIES C PREFERRED STOCK)," under the terms and conditions set forth in this
Agreement.

                  NOW THEREFORE, in consideration of the premises and the mutual
covenants contained in this Agreement, and other good and valuable
consideration, the sufficiency of which is hereby acknowledged, the parties
hereto agree as follows:

                  SECTION 1.  SALE AND DELIVERY.

                  (a) Upon the terms and subject to the conditions set forth
herein, and in reliance upon the representations and warranties of the
Management Investor hereinafter set forth, the Company shall issue, sell and
deliver to the Management Investor, and the Management Investor shall purchase
from the Company, 60,000 shares of Series C Preferred Stock (such shares of
Series C Preferred Stock are referred to collectively herein as the "SHARES") at
the price per share equal to $1.00.

                  (b) The purchase price for the Shares being purchased by the
Management Investor shall be paid by delivery by the Management Investor to the
Company of (i) $30,000 (the "Closing Payment") and (ii)a 6.5% recourse
promissory note having an original principal amount equal to the total purchase
price of the Shares minus the Closing Payment (the "NOTE"), which Note is
attached hereto as EXHIBIT A.

                  (c) The purchase and sale of Shares shall occur at the time
and place specified by the Company for such closing, which shall be not more
than 60 days after the date hereof (the "CLOSING DATE"), and at the closing of
such purchase and sale of Shares:

                  (i) the Company shall deliver to the Management Investor
         certificates representing the Shares

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         (the "Certificates"), duly endorsed for transfer, transferring to
         the Management Investor good and marketable title to such Shares,
         free and clear of all liens and encumbrances; and

                  (ii)     the Management Investor shall deliver to the Company:

                           (A) the Closing Payment;

                           (B) the Note; and

                           (C) a pledge agreement (the "PLEDGE AGREEMENT")
                  attached hereto as EXHIBIT B, pursuant to which Pledge
                  Agreement, among other things, the Management Investor's
                  obligations under the Note shall be secured by the following:
                  (i) a pledge of (a) the Shares, (b) the shares of Common Stock
                  that may be acquired upon conversion of the Shares (the
                  "UNDERLYING COMMON SHARES"), and (c) certain other collateral
                  described therein; and (ii) delivery of the Certificates.

                  SECTION 2. REPRESENTATIONS AND WARRANTIES OF THE MANAGEMENT
INVESTOR. The Management Investor hereby represents and warrants to the Company
as follows:

                  (a) The Shares (and the Underlying Common Shares) to be
purchased by such Management Investor will be acquired for investment for the
Management Investor's own account and not with a view to the resale or
distribution of any part thereof, except in compliance with the provisions of
the Securities Act of 1933, as amended (the "SECURITIES ACT"), or an exemption
therefrom, and in compliance with the terms of this Agreement. The Management
Investor is a senior management employee of the Company and is fully familiar
with the business of the Company and with the risks associated with the purchase
of the Shares pursuant to this Agreement. The Management Investor is an
accredited investor as defined under Rule 501(a) under the Securities Act.

                  (b) The Management Investor understands that the Shares and
the Underlying Common Shares are characterized as "restricted securities" under
the federal securities laws inasmuch as they are being acquired from the Company
in a transaction not involving a public offering and that under such laws and
applicable regulations such Shares (and the Underlying Common Shares) may be
resold without registration under the Securities Act only in certain limited
circumstances.

                  (c) The Management Investor further agrees that each
certificate representing the Shares (and the Underlying Common Shares) shall be
stamped or otherwise imprinted with a legend substantially in the following
form:

<PAGE>

                  "THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
                  REGISTERED UNDER THE SECURITIES ACT OF 1933 AND MAY NOT BE
                  TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS SUCH SECURITIES
                  HAVE BEEN REGISTERED UNDER ACT OR AN EXEMPTION FROM
                  REGISTRATION IS AVAILABLE.

                  THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
                  RESTRICTIONS ON TRANSFER AND TO THE OTHER TERMS SET FORTH IN
                  THAT CERTAIN MANAGEMENT INVESTMENT AGREEMENT, DATED AS OF
                  OCTOBER 1, 1999, AND BY A CERTAIN RELATED PLEDGE AGREEMENT,
                  BETWEEN THE COMPANY AND Geoffrey F. Sanders, A COPY OF WHICH
                  AGREEMENTS HAVE BEEN FILED WITH THE SECRETARY OF THE COMPANY
                  AND ARE AVAILABLE UPON REQUEST."

                  SECTION 3. RESTRICTIONS ON TRANSFER OF SHARES. For a period
commencing on the Closing Date and ending on the fifth anniversary of the
Closing Date, the Management Investor may not sell, transfer, assign, pledge,
hypothecate or otherwise dispose of (each, a "TRANSFER") any of the Shares (or
the Underlying Common Shares), without the prior express written consent of the
Company, PROVIDED, HOWEVER, that the foregoing restriction on transfer shall not
apply (i) if Capital Z Financial Services Fund II. L.P. ("CAPITAL Z")
Beneficially Owns (as defined in the Purchase Agreement referred to below) less
than (A) fifty percent (50%) of the number of shares of Senior Preferred Stock
(as defined in the Purchase Agreement referred to below) purchased by Capital Z
on the Initial Closing Date (as defined in the Purchase Agreement referred to
below) (the "ORIGINAL PREFERRED SHARES") or (B) if any Original Preferred Shares
shall thereafter have been converted into Common Stock, fifty percent (50%) of
the sum of (x) the aggregate number of shares Common Stock owned by Capital Z as
a result of such conversion(s) plus (y) the aggregate number of shares Common
Stock into which any remaining Original Preferred Shares owned by Capital Z may
be converted (determined without regard to any limitations on conversion of such
shares prior to the Recapitalization (as defined in the Purchase Agreement
referred to below)), in each case subject to adjustment for splits,
combinations, reclassifications and similar events; (ii) if the Management
Investor dies, retires, is terminated by the Company, or terminates his
employment with the Company, subject to the provisions of Section 4 hereof; or
(iii) a Change of Control (as defined in the New Option Plan (as such term is
defined in the Purchase Agreement referred to below)) has occurred, but only if
a Capital Z Realization Event (as defined in the New Option Plan) has also
occurred on or prior to such Change of Control, and PROVIDED, FURTHER, that
notwithstanding the foregoing

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restriction on transfer, the Management Investor may transfer, during the
twelve-month period ending on the first anniversary of the Closing Date and
during each succeeding twelve-month period, up to 25% of the total number of
Underlying Common Shares (whether structured as a transfer of Shares,
Underlying Shares or a combination thereof) acquired hereunder (subject to
adjustment for splits, combinations, reclassifications and similar events),
it being further agreed that the Management Investor may request the
Company's Board of Directors to allow the Management Investor to transfer
Shares (or Underlying Common Shares) in excess of the 25% limitation
described in this proviso if extraordinary liquidity needs have arisen with
respect to the Management Investor, and, in such event, the Company (through
its Board of Directors) will consider such request in good faith and will not
unreasonably withhold its consent to a waiver of such limitation. The
"Purchase Agreement" referred to herein shall mean the Preferred Stock
Purchase Agreement by and between the Company and Capital Z, dated as of
December 23, 1998, as the same may be amended or modified.

                  SECTION 4.  COMPANY'S OPTION TO PURCHASE SHARES.

                  (a) In the event of the death or retirement from, or
termination of employment for any reason with, the Company of the Management
Investor (a "TERMINATION DATE"), the Company shall have the option, but not the
obligation, to purchase all, or any portion, of the Shares (and any Underlying
Common Shares that may have been acquired upon conversion of the Shares) then
owned by the Management Investor at the Fair Market Value (as hereinafter
defined) per Share and/or Underlying Common Share on the Business Day
immediately prior to the date on which the Company exercises its option to
purchase in accordance with the this Section 4. The Company may exercise the
foregoing option at any time within 30 days after the Termination Date, by
written notice to the Management Investor, or his legal representative in the
case of death, stating a date and time for consummation of the purchase no less
than 10 nor more than 30 days after giving of such notice. "Fair Market Value"
per Share or per Underlying Common Share, as of any particular date, shall mean
(a) in the case of a Share, the product obtained by multiplying (I) the Formula
Number (as defined in the Certificate of Designations for the Series C Preferred
Stock) in effect as of such date by (II) the Current Market Price (as defined in
the Certificate of Designations for the Series C

<PAGE>

Preferred Stock) for the period of 15 consecutive Trading Days (as defined in
the Certificate of Designations for the Series C Preferred Stock) prior to
such date, or (b) in the case of an Underlying Share, the Current Market
Price for the period of 15 consecutive Trading Days prior to such date.

                  (b) At the closing of the purchase of Shares (and any
Underlying Common Shares) by the Company pursuant to Section 4(a), the
Management Investor will deliver the Shares (and any Underlying Common Shares)
to the Company against payment by the Company to the Management Investor of the
purchase price for such Shares (and any Underlying Common Shares). Such purchase
price shall be paid in cash, PROVIDED that if any principal or accrued but
unpaid interest is then outstanding under the Note, the cash portion of the
purchase price shall be reduced by the amount of such outstanding principal and
accrued interest on the Note (with such reduction being applied first to any
accrued interest and then to principal), and, if no principal or accrued
interest is then remaining on the Note, the Note shall be canceled.

                  SECTION 5. FURTHER ASSURANCES. The Management Investor shall,
upon request of the Company, execute and deliver any additional documents and
take such further actions as may reasonably be deemed by the Company to be
necessary or desirable to carry out the provisions hereof.

                  SECTION 6. NOTICES. All notices, requests, claims, demands and
other communications under this Agreement shall be sufficiently given if sent by
registered or certified mail, postage prepaid, or overnight air courier service,
or telecopy or facsimile transmission (with hard copy to follow) to the parties
at the following addresses (or at such other address for a party as shall be
specified by like notice): (i) if to the Company, to Aames Financial
Corporation, 2 California Plaza, 350 South Grand Avenue, Los Angeles, California
90071, Attention: General Counsel, telecopy number (323) 210-5026; and (ii) if
to the Management Investor, to the address set forth for the Management Investor
in the preamble to this Agreement or by telecopy to _________________.

                  SECTION 7.  HEADINGS.  The headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement.

                  SECTION 8. COUNTERPARTS; EFFECTIVENESS. This Agreement may be
executed in two or more counterparts, all of which shall be considered one and
the same agreement and shall become effective when one or more counterparts have
been signed

<PAGE>

by each of the Company and the Management Investor and delivered to
the Company and the Management Investor.

                  SECTION 9. ENTIRE AGREEMENT. This Agreement (including the
documents and instruments referred to herein) constitutes the entire agreement,
and supersedes all prior agreements and understandings, both written and oral,
among the parties with respect to the subject matter hereof.

                  SECTION 10.  GOVERNING LAW.  This Agreement shall be governed
by, and construed in accordance with, the laws of the State of Delaware, without
regard to any applicable conflicts of law principles of such State.

                  SECTION 11. SUCCESSORS AND ASSIGNS. Neither this Agreement nor
any of the rights, interests or obligations under this Agreement shall be
assigned, in whole or in part, by operation of law or otherwise, by any of the
parties without the prior written consent of the other parties. Any assignment
in violation of the foregoing shall be void.

                  SECTION 12. ENFORCEMENT. Each party agrees that irreparable
damage would occur and that the other party hereto would not have any adequate
remedy at law in the event that any of the provisions of this Agreement were not
performed in accordance with their specific terms or were otherwise breached. It
is accordingly agreed that each party shall be entitled to an injunction or
injunctions to prevent breaches by the other party hereto of this Agreement and
to enforce specifically the terms and provisions of this Agreement in any court
of the United States located in the State of Delaware or in Delaware State
court, this being in addition to any other remedy to which they are entitled at
law or in equity. In addition, each of the parties hereto (i) consents to submit
such party to the personal jurisdiction of any Federal court located in the
State of Delaware or any Delaware State court in the event any dispute arises
out of this Agreement or any of the transactions contemplated hereby, (ii)
agrees that such party will not attempt to deny or defeat such personal
jurisdiction by motion or other request for leave from any such court and (iii)
agrees that such party will not bring any action relating to this Agreement or
any of the transactions contemplated hereby in any court other than a Federal
court sitting in the State of Delaware of in Delaware State court.

                  SECTION 13. SEVERABILITY. If any term or provision hereof, or
the application thereof to any circumstance, shall, to any extent, be held by a
court of competent jurisdiction to

<PAGE>

be invalid or unenforceable with respect to such jurisdiction, and only to
such extent, and the remainder of the terms and provisions hereof, and the
application thereof to any other circumstance, shall remain in full force and
effect, shall not in any way be affected, impaired or invalidated, and shall
be enforced to the fullest extent permitted by law, and the parties hereto
shall reasonably negotiate in good faith a substitute term or provision that
comes as close as possible to the invalidated or unenforceable term or
provision, and that puts each party in a position as nearly comparable as
possible to the position each such party would have been in but for the
finding of invalidity or unenforceability, while remaining valid and
enforceable.

                  SECTION 14. AMENDMENT; MODIFICATION; WAIVER. No amendment,
modification or waiver in respect of this Agreement shall be effective against
any party unless it shall be in writing and signed by such party.

                  SECTION 15. EXPENSES. The Company and the Management Investor
shall each bear their own legal fees and other costs and expenses with respect
to the negotiation, execution and delivery of this Agreement and consummation of
the transactions contemplated hereby.

<PAGE>

                  IN WITNESS WHEREOF, the Company and the Management Investor
have caused this Agreement to be duly executed and delivered as of the date
first written above.

                                     AAMES FINANCIAL CORPORATION

                                     By:      /S/ DAVID A. SKLAR
                                         ------------------------------------
                                     Name:  David A. Sklar
                                     Title: Executive Vice President

                                     MANAGEMENT INVESTOR:

                                     /S/ GEOFFREY SANDERS
                                     ----------------------------------------

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