Consulting Agreement

CONSULTING AGREEMENT


THIS CONSULTING AGREEMENT, dated and effective as of May 7, 1997, is by and between Aames Financial Corporation, a Delaware corporation (the "Company"), and Gary K. Judis ("Mr. Judis").


BACKGROUND


In 1979, Mr. Judis became the President of the Company and since 1982 has served as the Company's Chairman, Chief Executive Officer and President until his resignation on May 7, 1997. The Board of Directors of the Company has determined that the continued services of Mr. Judis as a consultant to the Company would be in the best interests of the Company and its stockholders. Accordingly, the Company and Mr. Judis have agreed to enter into a consulting arrangement on the terms and conditions set forth below.


In consideration of the mutual covenants and agreements contained herein, and intending to be legally bound hereby, the parties agree as follows:


1. Engagement of Mr. Judis. The Company hereby engages Mr. Judis to serve as a consultant to the Company and its subsidiaries. The duties of Mr. Judis as a consultant, as reasonably requested by the Company and subject to Section 3 hereof, shall include the following:


(a) Attendance at retail sales meetings;


(b) Use of Mr. Judis' voice in radio and television
advertisements;


(c) Assistance in legislative efforts on behalf of the Company;


(d) Attendance at employee meetings;


(e) Attendance at trade shows and conventions; and


(f) Assistance in capital markets sales efforts.


2. Consulting Fees. In consideration of the services to be performed by Mr. Judis under this Agreement, the Company shall pay Mr. Judis a fee of $5,000 per month. Such fee shall be payable in full on the first day of each month during the term of this Agreement as set forth in Section 4 hereof. The Company will make all deductions for tax or withholdings from such consulting payments. In addition, Mr. Judis shall be paid AFTRA/SAG compensation of $5,000 per advertisement for which he provides the voice-over.


3. Time Devoted to Consulting. Mr. Judis shall devote a minimum of 10 hours per month to the performance of his duties under this Agreement (which shall be considered reasonable for purposes of Section 1 hereof), which may be performed at home or in the office. 2
4. Term. The term of this Agreement shall commence on the date hereof and shall continue for three years thereafter.


5. Non-Disclosure of Confidential Information. Mr. Judis hereby agrees that he will not disclose to any person or otherwise use or exploit, except in the course of performing services under this Agreement, any proprietary or confidential information, including, without limitation, trade secrets, processes, records of research, proposals, reports, methods, processes, techniques, computer software or programming, or budgets or other financial information, regarding the Company, its business, properties, customers or affairs (collectively, ...