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Prepared by MERRILL CORPORATION

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Exhibit 10.3    
  

 
 

CHANGE OF CONTROL AGREEMENT    
  

    THIS
CHANGE IN CONTROL AGREEMENT (the "Agreement") is between Aames Financial Corporation, a Delaware corporation (the  "Company"), and Ronald J. Nicolas, Jr.
(the "Executive"). This Agreement shall become effective (the  "Effective Date") as of the 23rd day of April, 2001. 

    In
consideration of the mutual agreements set forth below, the parties agree as follows: 

AGREEMENT

    I.  Definitions. For the purpose of this Agreement only: 

    A.  "Base
Salary" shall mean the annual salary at the time of termination of Executive's employment which is paid by the Company to the Executive in installments twice
each calendar month. 

    B.  "Cause"
shall mean a finding by the Company that the Executive: (1) shall have been determined by a court of law to have committed any felony;
(2) shall have been arrested or indicted for violation of any criminal statute constituting a felony, provided the Board of Directors of the Company 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 Company or its affiliates (subsequent references to the "Company" in this Agreement
shall be deemed to refer to the Company or its affiliates); (3) shall have engaged in an act of fraud, theft, embezzlement, or misappropriation against the Company; (4) shall have
committed one or more acts of gross negligence or willful misconduct, either within or outside the scope of his employment that materially impair the goodwill or business of the Company or cause
material damage to its property, goodwill, or business, or would, if known, subject the Company to public ridicule; (5) shall have refused or failed to a material degree to perform his duties
hereunder (continuing without cure for ten (10) days after receipt of written notice of need to
cure); or (6) shall have violated any material written Company policy provided to the Executive during or prior to his employment and that has caused material harm to the Company;  provided, however, that any finding made pursuant to clauses (3) through (6) above shall be made by the Board of Directors of the Company
and any such finding shall be made in good faith and, further provided, that no termination of Executive's employment for Cause shall be deemed to have
occurred unless Executive is given notice of the reason therefore including the allegations which may constitute reason for such termination. 

    C.  "Change
in Control" shall mean a Change in Control of the Company as that term is defined in Article XI(b) of the Company's Amended and Restated 1999 Stock
Option Plan. 

    II.  Payments Upon Termination Following Change In Control. The Company shall continue to pay the Base Salary to the
Executive for a period of twelve (12) months following the date of termination of Executive's employment in the event that the Executive's employment is terminated (a) by the Company or
its successor(s) in interest for any reason other than for Cause within one (1) year following a Change in Control of the Company, or (b) by Executive for any reason within six
(6) months following a Change in Control of the Company. 

    IN
WITNESS WHEREOF, the parties have executed this Agreement as of the date and year first set forth below. 

DATED: 

	 	 	AAMES FINANCIAL CORPORATION
	

 	
 	

By:	
 	

	

 	
 	

Its:	
 	

	

 	
 	

 	
 	

 
	 	 	EXECUTIVE
	

 	
 	

By:	
 	

 (Signature)

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Exhibit 10.3

CHANGE OF CONTROL AGREEMENTPrepared by MERRILL CORPORATION

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Exhibit 10.31(g)    
  

 
 

SIXTH AMENDMENT TO THE MASTER LOAN AND SECURITY AGREEMENT    
  

    Sixth
Amendment, dated as of June 21, 2001 (this "Amendment"), to the Master Loan and Security Agreement, dated as of
October 29, 1999 (as previously amended, supplemented or otherwise modified, the "Existing Loan Agreement", and as amended hereby, the
"Loan Agreement"), between AAMES CAPITAL CORPORATION (the "Borrower"), and MORGAN STANLEY DEAN WITTER
MORTGAGE CAPITAL INC., formerly MORGAN STANLEY MORTGAGE CAPITAL INC., (the "Lender"). 

RECITALS  

    The
Borrower and the Lender are parties to the Existing Loan Agreement. Capitalized terms used but not otherwise defined herein shall have the meanings given to them in the Existing
Loan Agreement. 

    The
Borrower and the Lender have agreed, subject to the terms and conditions of this Amendment, that the Existing Loan Agreement be amended as set forth herein. 

    Accordingly,
the Borrower and the Lender hereby agree, in consideration of the mutual premises and mutual obligations set forth herein, that the Existing Loan Agreement is hereby
amended as follows: 

    SECTION 1.  Amendments. 

    (a) Section 7.16
of the Existing Loan Agreement is hereby amended, which amendment shall be effective as of March 30, 2001, by deleting such Section in
its entirety and substituting in lieu thereof the following new Section 7.16: 

    "7.16  Maintenance of Profitability. The Borrower shall not permit, for any period of two consecutive fiscal quarters
(each such period, a "Test Period"), commencing with the two consecutive fiscal quarters ending September 30, 2001, Net Income for such Test
Period, before income taxes for such Test Period and distributions made during such Test Period, to be less than $1.00." 

    (b) Section 7
of the Existing Loan Agreement is hereby amended by adding the following new Section 7.22: 

    "7.22  June Quarter Maintenance of Profitability. The Borrower shall not permit, for the fiscal quarter ending
June 30, 2001, Net Income for such quarter, before income taxes for such quarter and distributions made during such quarter, to be less than $1.00." 

    (c) Section 8
of the Existing Loan Agreement is hereby amended by adding the new clause (o): 

    "(o)  the
Borrower shall fail to deliver to the Lender by June 29, 2001, evidence, satisfactory to the Lender in its sole discretion, that the Borrower has
obtained waivers or amendments from each of Lehman Brothers Bank, FSB and Greenwich Capital Financial Products, Inc. with respect to any maintenance of profitability requirement set forth in
their respective loan agreements." 

    SECTION 2.  Conditions Precedent. This Amendment shall become effective
on the date (the "Amendment Effective Date") on which the following conditions precedent shall have been satisfied: 

1

 

    2.1  Delivered Documents. On the Amendment Effective Date, the Lender shall have received the following documents, each
of which shall be satisfactory to the Lender in form and substance: 

    (a) Amendment. This Amendment, executed and delivered by a duly authorized officer of the Borrower and the Lender; and 

    (b) Other Documents. Such other documents as the Lender or counsel to the Lender may reasonably request. 

    2.2  No Default. On the Amendment Effective Date, (i) the Borrower shall be in compliance with all the terms and
provisions set forth in the Existing Loan Agreement on its part to be observed or performed, (ii) the representations and warranties made and restated by the Borrower pursuant to
Section 3 of this Amendment shall be true and complete on and as of such date with the same force and effect as if made on and as of such date and (iii) no Default shall have occurred
and be continuing on such date. 

    SECTION 3.  Representations and Warranties. The Borrower hereby
represents and warrants to the Lender that it is in compliance with all the terms and provisions set forth in the Loan Documents on its part to be observed or performed, and that no Default has
occurred or is continuing, and hereby confirms and reaffirms the representations and warranties contained in Section 6 of the Loan Agreement. 

    SECTION 4.  Limited Effect. Except as expressly amended and modified by
this Amendment, the Existing Loan Agreement shall continue to be, and shall remain, in full force and effect in accordance with its terms; provided,
however, that reference therein and herein to the "Loan Documents" shall be deemed to include, in any event, (i) the Existing Loan Agreement, (ii) this Amendment,
(iii) the Note and (iv) the Custodial Agreement. Each reference to the Loan Agreement in any of the Loan Documents shall be deemed to be a reference to the Loan Agreement as amended
hereby. 

    SECTION 5.  Counterparts. This Amendment may be executed by each of the
parties hereto on any number of separate counterparts, each of which shall be an original and all of which taken together shall constitute one and the same instrument. 

    SECTION 6.  GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE
OF NEW YORK WITHOUT REFERENCE TO THE CHOICE OF LAW PROVISIONS THEREOF. 

(REMAINDER OF PAGE INTENTIONALLY LEFT BLANK)  

2

 

    IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed and delivered as of the day and year first above written. 

	
 	
 	
BORROWER
	

 	
 	
AAMES CAPITAL CORPORATION
	

 	
 	
By:	
 	

	 	 	 	 	Name:	 	 
	 	 	 	 	Title:	 	 
	
 	
 	
LENDER
	

 	
 	
MORGAN STANLEY DEAN WITTER

MORTGAGE CAPITAL INC. (formerly

MORGAN STANLEY MORTGAGE CAPITAL INC.)
	

 	
 	

By:	
 	

	 	 	 	 	Name:	 	 
	 	 	 	 	Title:	 	 

3

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Exhibit 10.31(g)

SIXTH AMENDMENT TO THE MASTER LOAN AND SECURITY AGREEMENTPrepared by MERRILL CORPORATION

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Exhibit 10.31(h)    
  

 
 

SEVENTH AMENDMENT TO THE MASTER LOAN AND SECURITY AGREEMENT    
  

    Seventh
Amendment, dated as of June 21, 2001 (this "Amendment"), to the Master Loan and Security Agreement, dated as of
October 29, 1999 (as previously amended, supplemented or otherwise modified, the "Existing Loan Agreement", and as amended hereby, the
"Loan Agreement"), between AAMES CAPITAL CORPORATION (the "Borrower"), and MORGAN STANLEY DEAN WITTER
MORTGAGE CAPITAL INC., formerly MORGAN STANLEY MORTGAGE CAPITAL INC., (the "Lender"). 

RECITALS  

    The
Borrower and the Lender are parties to the Existing Loan Agreement. Capitalized terms used but not otherwise defined herein shall have the meanings given to them in the Existing
Loan Agreement. 

    The
Borrower and the Lender have agreed, subject to the terms and conditions of this Amendment, that the Existing Loan Agreement be amended as set forth herein. 

    Accordingly,
the Borrower and the Lender hereby agree, in consideration of the mutual premises and mutual obligations set forth herein, that the Existing Loan Agreement is hereby
amended as follows: 

    SECTION 1.  Amendments. 

1

 

    (a) Section 1.01
of the Existing Loan Agreement is hereby amended by deleting the definition of "Applicable Collateral
Percentage" and substituting in lieu thereof the following new definition: 

    "'Applicable Collateral Percentage' shall mean, with respect to each Eligible Mortgage Loan, the applicable collateral percentage set
forth in the chart below opposite the applicable product type: 

	Product Type
	 	Applicable Collateral

Percentage
	 
	First Lien Loan that is a Performing Loan and has been included in the Borrowing Base for 120 days or less	 	97	%
	

First Lien Loan that is a Performing Loan and has been included in the Borrowing Base for longer than 120 days but less than 270 days	
 	

85	
%
	

Second Lien Loan that is a Performing Loan and has been included in the Borrowing Base for 120 days or less	
 	

97	
%
	

Second Lien Loan that is a Performing Loan and has been included in the Borrowing Base for longer than 120 days but less than 270 days	
 	

85	
%
	

First Lien Loan or Second Lien Loan that is a Class A Defaulted Loan and has been included in the Borrowing Base for 120 days or less	
 	

80	
%
	

First Lien Loan or Second Lien Loan that is a Class B Defaulted Loan and has been included in the Borrowing Base for 120 days or less	
 	

75	
%
	

First Lien Loan or Second Lien Loan that is a Class C Defaulted Loan, prior to receipt by the Lender of a BPO for such Class C Defaulted Loan and has been included in the Borrowing Base for 364 days or less	
 	

50	
%
	

First Lien Loan or Second Lien Loan that is a Class C Defaulted Loan, after receipt by the Lender of a BPO for such Class C Defaulted Loan and has been included in the Borrowing Base for 364 days or less	
 	

65	
%

2

 

    (b) Section 1.01
of the Existing Loan Agreement is hereby amended by deleting the definition of "Applicable
Margin" and substituting in lieu thereof the following new definition: 

    "Applicable Margin' shall mean the sum of the weighted average of the applicable rates per annum for each product type of Eligible
Mortgage Loan for each day that Loans shall be secured by such Eligible Mortgage Loans, determined by multiplying (a) for each product type set forth in the table below, a fraction equal to the
Collateral Value of all Eligible Mortgage Loans of such product type divided by the Collateral Value of all Eligible Mortgage Loans, times
(b) for each product type set forth in the following table below, the percentage set forth below opposite such product type: 

	Product Type
	 	Applicable Margin
	 
	First Lien Loan that is a Performing Loan and has been included in the Borrowing Base for 120 days or less	 	0.90	%
	

First Lien Loan that is a Performing Loan and has been included in the Borrowing Base for longer than 120 days but less than 270 days	
 	

1.10	
%
	

Second Lien Loan that is a Performing Loan and has been included in the Borrowing Base for 120 days or less	
 	

0.90	
%
	

Second Lien Loan that is a Performing Loan and has been included in the Borrowing Base for longer than 120 days but less than 270 days	
 	

1.10	
%
	

First Lien Loan or Second Lien Loan that is a Class A Defaulted Loan and has been included in the Borrowing Base for 120 days or less	
 	

1.20	
%
	

First Lien Loan or Second Lien Loan that is a Class B Defaulted Loan and has been included in the Borrowing Base for 120 days or less	
 	

1.20	
%
	

First Lien Loan or Second Lien Loan that is a Class C Defaulted Loan and has been included in the Borrowing Base for 364 days or less	
 	

1.50%	
"

    (c) Section 1.01
of the Existing Loan Agreement is hereby amended by deleting the definition of "Collateral
Value" and substituting in lieu thereof the following new definition: 

    "'Collateral Value' shall mean, with respect to each Eligible Mortgage Loan, the lesser of (a) the Applicable Collateral
Percentage of the Market Value of such Eligible Mortgage Loan, except in the case of any Class C Defaulted Loan prior to the receipt by the Lender of a BPO relating thereto, in which case the
Applicable Collateral Percentage of the outstanding 

3

 

principal balance of such Eligible Mortgage Loan, and (b) 100% of the outstanding principal balance of such Eligible Mortgage Loan." 

    SECTION 2.  Conditions Precedent. This Amendment shall become effective
on the date (the "Amendment Effective Date") on which the following conditions precedent shall have been satisfied: 

    2.1  Delivered Documents.  On the Amendment Effective Date, the Lender shall have received the following
documents, each of which shall be satisfactory to the Lender in form and substance: 

    (a) Amendment. This Amendment, executed and delivered by a duly authorized officer of the Borrower and the Lender; and 

    (b) Other Documents. Such other documents as the Lender or counsel to the Lender may reasonably request. 

    2.2  No Default.  On the Amendment Effective Date, (i) the Borrower shall be in compliance with
all the terms and provisions set forth in the Existing Loan Agreement on its part to be observed or performed, (ii) the representations and warranties made and restated by the Borrower pursuant
to Section 3 of this Amendment shall be true and complete on and as of such date with the same force and effect as if made on and as of such date and (iii) no Default shall have occurred
and be continuing on such date. 

    SECTION 3.  Representations and Warranties. The Borrower hereby
represents and warrants to the Lender that it is in compliance with all the terms and provisions set forth in the Loan Documents on its part to be observed or performed, and that no Default has
occurred or is continuing, and hereby confirms and reaffirms the representations and warranties contained in Section 6 of the Loan Agreement. 

    SECTION 4.  Limited Effect. Except as expressly amended and modified by
this Amendment, the Existing Loan Agreement shall continue to be, and shall remain, in full force and effect in accordance with its terms; provided,
however, that reference therein and herein to the "Loan Documents" shall be deemed to include, in any event, (i) the Existing Loan Agreement, (ii) this Amendment,
(iii) the Note and (iv) the Custodial Agreement. Each reference to the Loan Agreement in any of the Loan Documents shall be deemed to be a reference to the Loan Agreement as amended
hereby. 

    SECTION 5.  Counterparts. This Amendment may be executed by each of the
parties hereto on any number of separate counterparts, each of which shall be an original and all of which taken together shall constitute one and the same instrument. 

    SECTION 6.  GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE
OF NEW YORK WITHOUT REFERENCE TO THE CHOICE OF LAW PROVISIONS THEREOF. 

(REMAINDER OF PAGE INTENTIONALLY LEFT BLANK)  

4

 

    IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed and delivered as of the day and year first above written. 

	
 	
 	
BORROWER
	

 	
 	
AAMES CAPITAL CORPORATION
	

 	
 	
By:	
 	

	 	 	 	 	Name:	 	 
	 	 	 	 	Title:	 	 
	
 	
 	
LENDER
	

 	
 	
MORGAN STANLEY DEAN WITTER

MORTGAGE CAPITAL INC. (formerly

MORGAN STANLEY MORTGAGE CAPITAL INC.)
	

 	
 	

By:	
 	

	 	 	 	 	Name:	 	 
	 	 	 	 	Title:	 	 

5

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Exhibit 10.31(h)

SEVENTH AMENDMENT TO THE MASTER LOAN AND SECURITY AGREEMENT

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