Pledge Agreement

EXHIBIT 10.14(c)


PLEDGE AGREEMENT


PLEDGE AGREEMENT ("AGREEMENT"), dated as of October 1, 1999, made by Geoffrey F. Sanders, 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).


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,


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.


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 gran ...