EXHIBIT 10.3

 

EMPLOYMENT AGREEMENT

 

THIS EMPLOYMENT AGREEMENT is made as of April 1, 2003, by and between Impac
Funding Corporation, a California corporation (“Employer”), and Richard J.
Johnson, an individual (“Employee”); provided that the Incentive Compensation
that may be paid pursuant to this Agreement is subject to approval by a majority
of the shareholders of Impac Mortgage Holdings, Inc., a Maryland corporation
(“IMH”), and if such shareholder approval is not obtained on or before the
earlier of (i) the date of the next annual meeting of the shareholders of IMH
and (ii) August 31, 2003, then this Agreement shall terminate as of the earlier
of such dates and be of no further force or effect.

 

R E C I T A L S

 

WHEREAS, Employee is knowledgeable of and skillful in the business of Employer
and IMH, which includes acquiring for investment and sale non-conforming
residential mortgage loans and mortgage backed securities and performing
mortgage operations for affiliates or related entities of Employer (the
“Business”);

 

WHEREAS, Employer believes that Employee is an integral part of its management
and currently is and will become more knowledgeable of and be in part
responsible for developing the Business;

 

WHEREAS, Employee possesses extensive management experience and knowledge
regarding the Business, including confidential information concerning service
marketing plans and strategy, business plans and projections and the formulas
and models pertaining thereto, customer needs and peculiarities, finances,
operations, billing methods and customer lists;

 

WHEREAS, Employer desires that Employee continue his employment as Executive
Vice President and Chief Financial Officer of Employer; and

 

WHEREAS, Employee is willing to be employed by Employer and provide services to
Employer and any affiliates or related entities of Employer (as more fully
described in Exhibit A attached hereto) under the terms and conditions herein
stated.

 

A G R E E M E N T

 

NOW, THEREFORE, in consideration of the mutual covenants and agreements
hereinafter contained, and for other good and valuable consideration, it is
hereby agreed by and between the parties hereto as follows:

 

1. Employment, Services and Duties.

 

1.1 Employer hereby employs Employee and Employee hereby accepts such employment
full-time (subject to those exceptions, if any, set forth below) as Executive
Vice President and Chief Financial Officer of Employer to perform the duties and
functions set forth in Exhibit A attached hereto and, Subject to Section 2.2(i),
to perform such other duties or functions as are reasonably required or as may
be prescribed from time to time or as otherwise

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agreed. Employee shall render his services by and subject to the instructions
and under the direction of Employer’s Chief Executive Officer to whom Employee
shall directly report.

 

1.2 Employee acknowledges and agrees that Employee may be required by Employer
to devote a portion of his working time to perform functions for Employer’s
affiliates or related entities (as set forth in Exhibit A attached hereto) and
that such services are to be performed pursuant to and consistent with
Employee’s duties and obligations under this Agreement.

 

1.3 Employee will at all times faithfully, industriously and to the best of his
ability, experience and talents perform all of the duties required of and from
him pursuant to the terms of this Agreement. Employee will devote his full
business energies and abilities and all of his business time to the performance
of his duties hereunder and will not, without Employer’s, prior written consent,
render to others any service of any kind (whether or not for compensation) that
would interfere with the full performance of Employee’s duties hereunder, and in
no event will engage in any activities that compete with the Business or that
could create a reasonably foreseeable conflict of interest or the appearance of
a reasonably foreseeable conflict of interest; provided that nothing contained
in this Section 1.3 shall preclude Employee from engaging in or managing
Employee’s outside investments.

 

2. Term and Termination.

 

2.1 The term of this Agreement shall be through December 31, 2007, unless
extended by the mutual written agreement of Employer and Employee.

 

2.2 Employee’s employment shall terminate prior to the expiration of the term
set forth in Section 2.1 upon the happening of any of the following events:

 

(a) Voluntary termination by Employee other than for Good Reason (as defined
below); provided that Employee shall be required to provide Employer with at
least 30 days prior written notice of such voluntary termination;

 

(b) Death of Employee;

 

(c) Employer may terminate Employee under this Agreement for “cause” if any of
the following occurs (any determination of “cause” as used in this Agreement
shall be made only by an affirmative majority vote of the Board of Directors
(not including Employee in the deliberations or vote on the same, if a director)
of Employer):

 

(i) Employee is convicted of (or pleads nolo contendere to) (A) a crime of
dishonesty or breach of trust, including such a crime involving either the
property of Employer IMH (or any affiliate or related entity of Employer or IMH)
or the property entrusted to Employer or IMH (or any affiliate or related entity
of Employer or IMH) by its clients, including fraud, or embezzlement or other
misappropriation of funds belonging to Employer or IMH (or any affiliate or
related entity of Employer or IMH) or any of their respective

 

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clients, or (B) a felony leading to incarceration of more than 90 days or the
payment of a penalty or fine of $100,000 or more;

 

(ii) Employee materially and substantially fails to perform Employee’s job
duties properly assigned to Employee after being provided 30 days prior written
notification by the Board of Directors of Employer setting forth those duties
that are not being performed by Employee; provided that Employee shall have a
reasonable time to correct any such failures to the extent that such failures
are correctable and Employer may not terminate Employee for “cause” on the basis
on any such failure that is cured within a reasonable time.

 

(iii) Employee has engaged in willful misconduct or gross negligence in
connection with his service to Employer or IMH (or any affiliate or related
entity of Employer or IMH) that has caused or is causing material harm to
Employer or IMH (or any affiliate or related entity of Employer or IMH); or

 

(iv) Employee’s material breach of any of the terms of this Agreement or any
other obligation that Employee owes to Employer or IMH (or any affiliate or
related entity of Employer or IMH), including a material breach of trust or
fiduciary duty or a material breach of any proprietary rights and inventions or
confidentiality agreement between Employer and Employee or between IMH and
Employee, (or between Employee and any affiliate or related entity of Employer
or IMH)(as such agreements may be adopted or amended from time to time by
Employer and Employee).

 

(d) By mutual agreement between Employer and Employee;

 

(e) The date when Employee is declared legally incompetent under the laws of the
State of California, or if Employee has a mental or physical condition that can
reasonably be expected to prevent Employee from carrying out his essential
duties and obligations under this Agreement for a period of greater than six
months (any such condition an “Incapacitating Condition”), notwithstanding
Employer’s reasonable accommodations (to the extent required by law);

 

(f) Employer may terminate Employee under this Agreement at will (and without
cause) upon written notice at any time. Unless otherwise provided in such
notice, such termination shall be effective immediately upon providing written
notice to Employee; or

 

(g) Employee may terminate his employment under this Agreement for Good Reason
upon providing Employer at least 30 days prior written notice of such
termination stating the basis on which Employee has determined that he has Good
Reason to terminate his employment; provided that Employer shall have a
reasonable time after receiving such notice to cure any event that would
constitute Good Reason for Employee to terminate his employment (provided such
event is curable) and Employee may not terminate his employment for Good Reason
on the basis of any such event that is cured within a reasonable time.
Notwithstanding the foregoing portion of this Section

 

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2.02(g), the aforementioned 30-day notice and reasonable cure period shall not
apply to Section 2.02(g)(iv). “Good Reason” shall mean:

 

(i) the assignment to Employee of duties materially inconsistent with, or a
substantial reduction or alteration in, the authority, duties or
responsibilities of Employee as set forth in this Agreement, without Employee’s
prior written consent;

 

(ii) the principal place of the performance of Employee’s responsibilities and
duties is changed to a location more than 65 miles from the location of such
place as of the date of this Agreement, without Employee’s prior written
consent;

 

(iii) a material breach by Employer of this Agreement, including a reduction by
Employer of Employee’s Base Salary, without Employee’s prior written consent; or

 

(iv) a failure by Employer to obtain from any acquirer of Employer, before any
Acquisition (as defined below) takes place, an agreement to assume and perform
this Agreement.

 

Good Reason does not include the expiration of the term of this Agreement on
December 31, 2007.

 

2.3 Except as set forth in Section 4, in the event that Employee’s employment is
terminated pursuant to Section 2.2(8), 2.2(b), 2.2(c), 2.2(d) or 2.2(e) herein,
neither Employer nor Employee shall have any remaining duties or obligations
under this Agreement, except that Employer shall pay to Employee, or his legal
representatives, on the date of termination of employment (the “Termination
Date”) or, with respect to any Incentive Compensation payments or reimbursement
for expenses, as promptly as practical after the Termination Date, the
following:

 

(a) Such compensation as is due pursuant to Sections 3.1 (a) and 3.1(b),
prorated through the Termination Date;

 

(b) Any expense reimbursements due and owing to Employee for reasonable and
necessary business and entertainment expenses of Employer incurred by Employee
prior to the Termination Date; and

 

(c) The dollar value of all accrued and unused paid time off that Employee is
entitled to through the Termination Date.

 

2.4 Except as set forth in Section 4, in the event that Employee’s employment is
terminated pursuant to Section 2.2(f) or 2.2(g), neither Employer nor Employee
shall have any remaining duties or obligations under this Agreement, except that
Employer shall pay to Employee, or his representatives, the amounts set forth in
Section 2.3 at the times set forth in Section 2.3 and the following (provided
that payments for health insurance coverage shall be made to an insurance
provider):

 

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(a) An additional 30 month’s worth of Base Salary to be paid as follows:

 

(i) 12 month’s worth of Base Salary paid eight days after Employee signs and
delivers to Employer the Waiver and Release Agreement required pursuant to
Section 2.5; and

 

(ii) 18 month’s worth of Base Salary paid over the 18-month period succeeding
the Termination Date (paid at the times set forth in Section 3.1(a)).

 

(b) Premiums for continuation of Employee’s health insurance benefits under
Employer’s group health insurance plan, pursuant to COBRA, for the 30 month
period succeeding the Termination Date (with such health insurance coverage to
be at a level and quality equivalent to the health insurance coverage provided
by Employer to Employee immediately prior to the Termination Date, “Equivalent
Coverage”); provided that Employer shall pay such premiums only so long as
(during said 30 month period) Employee remains eligible for such Equivalent
Coverage under COBRA;

 

(c) Incentive Compensation to be determined and paid as follows:

 

(i) On the Termination Date, Employee will be paid an amount, if any, equal to
the total Incentive Compensation paid to Employee for the three quarters
immediately prior to the Termination Date for which Incentive Compensation had
already been paid to Employee;

 

(ii) Within 30 days after the end of the quarter in which the Termination Date
occurs, Employee’s Incentive Compensation for that quarter will be calculated
and Employee will be paid an amount equal to the Incentive Compensation that
Employee otherwise would have been paid (as if Employee was still employed by
Employer) for that quarter pursuant to Section 3.1(b); and

 

(iii) For the six quarters after the quarter in which the Termination Date
occurs, Employee shall be paid the Incentive Compensation that Employee
otherwise would have been paid (as if Employee was still employed by Employer)
for those quarters pursuant to Section 3.1(b) (with such Incentive Compensation
payments to be paid at the times they would have been paid had Employee’s
employment not terminated); provided that each quarterly Incentive Compensation
payment during this six quarter period shall not be less than 50% nor more than
100% of the average of the four quarterly Incentive Compensation amounts paid to
Employee for the four quarters immediately preceding the Termination Date.

 

(d) The payments set forth in Sections 2.4(a), (b) and (c) above are referred to
herein collectively as the “Severance Payments” and each as a “Severance
Payment.”

 

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2.5 As a condition precedent of Employee or his estate receiving any Severance
Payment from Employer, whether in a lump sum payment or a string of payments or
in the form of payment of benefits, Employee or his estate shall, in
consideration for payment of such amount or benefit, sign and deliver to
Employer (against the execution and delivery of the same by the other parties
thereto) the form of Waiver and Release Agreement attached hereto as Exhibit B.
Such Waiver and Release Agreement will not be construed to include any release
of any indemnification rights Employee may have against Employer pursuant to
Employer’s Articles of Incorporation or bylaws, any indemnification agreement or
California Labor Code Section 2800.

 

2.6 This Agreement shall not be terminated by Employer merging with or otherwise
being acquired by another entity, whether or not Employer is the surviving
entity, or by Employer transferring of all or substantially all of its assets
(any such event, an “Acquisition”).

 

2.7 In the event of any Acquisition, the surviving entity or transferee, as the
case may be, shall be bound by and shall have the benefits of this Agreement,
and Employer shall not enter into any Acquisition unless the surviving entity or
transferee, as the case may be, agrees to be bound by the provisions of this
Agreement.

 

3. Compensation.

 

3.1 As the total consideration for Employee’s services rendered hereunder,
Employee shall be entitled to the following during the period that Employee is
employed hereunder:

 

(a) A base salary of $250,000 per year (“Base Salary”), payable in equal
installments bi-weekly on those days when Employer normally pays its employees;

 

(b) “Incentive Compensation” in an amount equal to 3.0% of IMH’s Excess Income
(as “Excess Income” is defined in Exhibit C attached hereto). Within 20 days
after the end of each quarter for which Incentive Compensation for Employee is
to be determined, IMH’s Chief Financial Officer (the “CFO”) will prepare and
present a report (the “Incentive Compensation Report”) to the Chairman of IMH’s
Compensation Committee (the “Compensation Committee”) containing the calculation
of Employee’s Incentive Compensation for such quarter and information supporting
such calculation in reasonable detail. IMH will instruct its independent
auditors (the “Auditors”) to examine the Incentive Compensation Report and
advise the Chairman of the Compensation Committee on whether it agrees with the
calculations and conclusions set forth in that report and to provide its report
within 25 days after the end of each quarter for which Incentive Compensation
for Employee is to be determined. Within 30 days after the end of each quarter
for which Incentive Compensation for Employee is to be determined provided that
the Incentive Compensation Report for that quarter has been timely presented to
the Compensation Committee, the Compensation Committee will review the Incentive
Compensation Report and determine any Incentive Compensation to be paid to
Employee for that quarter and will direct the Employer to pay such amount.
Within 7 days after Employee’s Incentive Compensation for a particular quarter
is determined,

 

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Employer will pay such Incentive Compensation to Employee in cash. Incentive
Compensation and Excess Income shall be calculated by the CFO of IMH and
otherwise determined hereunder in accordance with Exhibit C attached hereto. If
the Incentive Compensation Report or the Auditor’s agreement with that report is
not timely delivered to the Chairman of the Compensation Committee, then for
each day that such report or agreement is delayed, the payment of the Incentive
Compensation to Employee shall be delayed by one day;

 

(c) Employee shall accrue paid time off during the period he is employed
hereunder at the rate of five weeks per calendar year, subject to any vacation
benefit accrual cap established by Employer (i.e., once the cap has been
reached, further accrual shall cease until Employee uses some or all of his
accrued time to fall below the accrual cap). The timing of Employee’s vacation
shall be governed by Employer’s usual policies applicable to all employees;

 

(d) Employee is entitled to participate in any policies or plans regarding
benefits of employment, including pension, profit sharing, group health,
disability insurance and other employee welfare benefit plans now existing or
hereafter established to the extent that Employee is eligible under the terms of
such plans. Despite the foregoing, Employee is entitled to participate in any
such plan or program only if the executive officers of Employer generally are
eligible to participate in such plan or program. Employer may, in its sole
discretion and from time to time, establish additional senior management benefit
programs as it deems them appropriate. Employee understands that any such plans
may be modified or eliminated in Employer’s sole discretion in accordance with
applicable law; and

 

(e) Such other benefits as the Board of Directors of Employer, in its sole
discretion, may from time to time provide.

 

3.2 During the period that Employee is employed hereunder, Employer shall
reimburse Employee for reasonable and necessary business and entertainment
expenses incurred by Employee on behalf of Employer in connection with the
performance of Employee’s duties hereunder.

 

3.3 IMH shall instruct the CFO, any other employees of IMH who assist in
preparing any Incentive Compensation Report (or any information on which any
Incentive Compensation Report is based) and the Auditors that if any such party
at any time determines that one or more Incentive Compensation Reports was
inaccurate in any way, then any and all such parties who make such a
determination shall promptly notify the Compensation Committee of any and all
such inaccuracies and the reasons supporting such determination. If the
Compensation Committee at any time prior to the end of the 12 month period after
the filing of the annual tax return for IMH (or any consolidated annual tax
return including IMH) covering the period for which the Incentive Compensation
payment in question relates (said 12 month period, the “Determination Period”)
determines that the Incentive Compensation payment in question was calculated
incorrectly and underpaid, its shall immediately so notify the Employer and
Employer shall, within 15 days after such determination by the Compensation
Committee, pay the amount owed to Employee due to such underpayment. If the
Compensation Committee

 

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at any time during the Determination Period determines that the Incentive
Compensation payment in question was calculated incorrectly and overpaid, it
shall so notify the Employer and Employer shall offset such overpayment against
the next Incentive Compensation payment(s) to Employee until any and all such
overpayments are offset in their entirety; provided that (a) if no Incentive
Compensation payments are paid to Employee within 180 days after the
Compensation Committee determined that any such overpayment was made, then
Employer may, in its discretion, require Employee to repay (and in which case
Employee shall repay) the overpayment to Employer at any repayment schedule and
rate determined by Employer and (b) if the Compensation Committee makes such an
overpayment determination after Employee’s employment is terminated, then
Employee shall repay any and all such overpayments to Employer at any repayment
schedule and rate determined by Employer. Notwithstanding the foregoing, the
Compensation Committee shall have no obligation to independently investigate the
accuracy of any Incentive Compensation Report or any calculation or conclusion
contained in any such report.

 

3.4 Employee may elect to defer any portion of his Base Salary or Incentive
Compensation into an approved, Employer sponsored deferred compensation plan;
provided that Employer has no obligation to provide such a deferred compensation
plan. All Base Salary and Incentive Compensation, whether or not deferred, shall
be deemed to be earned and immediately vested upon distribution to Employee or
deferral into a deferred compensation plan.

 

3.5 There shall be no inflation or any other automatic adjustments to any of the
compensation paid to Employee under this Agreement.

 

3.6 Employer shall have the right to deduct from the compensation due to
Employee hereunder any and all sums required for social security and withholding
taxes and for any other federal, state, or local tax or charge which may be in
effect or hereafter enacted or required as a charge on the compensation of
Employee.

 

3.7 During the period that Employee is employed hereunder, Employer shall pay to
Employee an automobile allowance in the amount of $500 per month (prorated for
any partial month during the employment period).

 

4. Non-Competition.

 

4.1 At all times during Employee’s employment hereunder, and, if Employee’s
employment is terminated pursuant to Section 2.2(f) or 2.2(g), during the 30
month period of time after such termination (the “Post-Termination Payment
Period”) and in consideration for any and all payments and benefits provided to
Employee pursuant to this Agreement, during the Post-Termination Payment Period,
Employee shall not, directly or indirectly, engage or participate in, prepare or
set up, assist or have any interest in any person, partnership, corporation,
limited liability company, firm, association, or other business organization,
entity or enterprise (whether as an employee, officer, director, member, agent,
security holder, creditor, consultant or otherwise) that engages in any activity
in those geographic areas where Employer conducts the Business, which activity
is the same as, similar to, or competitive with any activity now engaged in by
Employer or its affiliates or related entities or in any way relating to the
Business. Notwithstanding the foregoing, Employee may

 

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elect at any point during the Post-Termination Payment Period to forego any
future remaining payments or benefits payable under Section 2.4, in which case
the limitations set forth in this Section 4.1 shall terminate at the time of
such election.

 

4.2 Nothing contained in Section 4.1 shall be deemed to preclude Employee from
purchasing or owning, directly or beneficially, as a passive investment, less
than five percent of any class of publicly traded securities of any entity so
long as Employee does not actively participate in or control, directly or
indirectly, any investment or other decisions with respect to such entity.

 

5. No Compensation from Related Entities. Without prior written approval from
Employer’s Board of Directors, Employee shall not directly or indirectly receive
compensation from any company with whom Employer or any of its affiliates (as
“affiliate” is defined in Rule 405 promulgated under the Securities Act of 1933)
has any financial, business or affiliated relationship.

 

6. Confidentiality; Non-Solicitation and Proprietary Rights. Concurrently with
signing this Agreement, Employee and Employer will sign a Proprietary Rights and
Inventions Agreement in the form attached hereto as Exhibit D (the “Proprietary
Rights and Inventions Agreement”).

 

7. Copies of Agreement. Employee authorizes Employer to send a copy of the
Proprietary Rights and Inventions Agreement to any and all future employers
which Employee may have, and to any and all persons, firms, and corporations,
with whom Employee may become affiliated in a business or commercial enterprise,
and to inform any and all such employers, persons, firms or corporations that
Employer intends to exercise its legal rights should Employee breach the terms
of the Proprietary Rights and Inventions Agreement or should another party
induce a breach of that agreement on Employee’s part.

 

8. Severable Provisions. The provisions of this Agreement are severable and if
any one or more provisions is determined to be illegal or otherwise
unenforceable, in whole or in part, the remaining provisions, and any partially
unenforceable provisions to the extent enforceable, shall nevertheless be
binding and enforceable.

 

9. Arbitration. To the fullest extent allowed by law, any controversy, claim or
dispute between Employee and Employer (or any of its stockholders, directors,
officers, employees, affiliates, agents, successors or assigns) relating to or
arising out of Employee’s employment or the cessation of that employment will be
submitted to final and binding arbitration in Orange County, California for
determination in accordance with the American Arbitration Association’s (“AAA”)
National Rules for the Resolution of Employment Disputes, as the exclusive
remedy for such controversy, claim or dispute. In any such arbitration; the
parties may conduct discovery to the same extent as would be permitted in a
court of law. The arbitrator shall issue a written decision, and shall have full
authority to award all remedies which would be available in court. The
arbitrator shall be required to determine all issues in accordance with existing
case law and the statutory laws of the State of California. Employer shall pay
the arbitrator’s fees and any AAA administrative expenses. In the event Employee
files a claim to collect unpaid payments or benefits payable under Section 2.4,
the prevailing party

 

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shall be awarded reasonable attorneys fees and costs. Any judgment upon the
award rendered by the arbitrator(s) may be entered in any court having
jurisdiction thereof. Possible disputes covered by the above include unpaid
wages, breach of contract, torts, violation of public policy, discrimination,
harassment, or any other employment-related claims under laws including Title
VII of the Civil Rights Act of 1964, the Americans With Disabilities Act, the
Age Discrimination in Employment Act, the California Fair Employment and Housing
Act, the California Labor Code, and any other federal or state constitutional
provisions, statutes or laws relating to an employee’s relationship with his
employer. However, claims for workers’ compensation benefits and unemployment
insurance (or any other claims where mandatory arbitration is prohibited by law)
are not covered by this arbitration agreement, and such claims may be presented
to the appropriate court or government agency. BY AGREEING TO THIS MUTUAL AND
BINDING ARBITRATION PROVISION, BOTH EMPLOYEE AND EMPLOYER GIVE UP ALL RIGHTS TO
TRIAL BY JURY. This arbitration policy is to be construed as broadly as is
permissible under relevant law. EMPLOYER AND EMPLOYEE HAVE READ THIS SECTION 9
AND IRREVOCABLY AGREE TO ARBITRATE ANY DISPUTE IDENTIFIED ABOVE.

 

/s/ RM

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/s/ RJJ

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Employer’s Initials

        Employee’s Initials

 

10. Injunctive Relief. The parties hereto agree that any breach or threatened
breach of Section 4 of this Agreement or the Proprietary Rights and Inventions
Agreement will cause substantial and irreparable damage to Employer in an amount
and of a character difficult to ascertain. Accordingly, to prevent any such
breach or threatened breach, and in addition to any other relief to which
Employer may otherwise be entitled, Employer will be entitled to immediate
temporary, preliminary and permanent injunctive relief through appropriate legal
proceedings in any arbitration, without proof of actual damages that have been
incurred or may be incurred by Employer with respect to such breach or
threatened breach. Employee expressly agrees that Employer will not be required
to post any bond or other security as a condition to obtaining any injunctive
relief pursuant to this Section 10, and Employee expressly waives any right to
the contrary. Employee agrees that this Section 10 is without prejudice to the
rights of the parties to compel arbitration pursuant to Section 9.

 

11. Entire Agreement. This Agreement and the Exhibits attached hereto contain
the entire agreement of the parties relating to the subject matter hereof, and
the parties hereto have made no agreements, representations or warranties
relating to the subject matter of this Agreement that are not set forth
otherwise herein or the Exhibits attached hereto. This Agreement supersedes any
and all prior agreements, written or oral, with Employer relating to Employees
employment with Employer and any other subject matter of this Agreement. Any
such prior agreements are hereby terminated and of no further effect and
Employee, by the execution hereof, agrees that any compensation provided for
under any such prior agreement is specifically superseded and replaced by the
provision of this Agreement; subject to the following: (i) any and all
compensation previously deferred under any pre-existing deferred compensation
plan shall immediately be paid to Employee without condition or limitation; and
(ii) this Agreement is not intended to supercede, cancel or replace any stock
option or dividend equivalent right payments that Employee may have or otherwise
be entitled to receive. The

 

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parties hereto agree that in no event shall an oral modification of this
Agreement be enforceable or valid.

 

12. Governing Law. This Agreement is and shall be governed and construed in
accordance with the laws of the State of California, regardless of any laws on
choice of law or conflicts of law of any jurisdiction.

 

13. Notice. All notices hereunder must be in writing and shall be sufficiently
given for all purposes hereunder if properly addressed and delivered personally
by documented overnight delivery service, by certified or registered mail,
return receipt requested, or by facsimile or other electronic transmission
service at the address or facsimile number, as the case may be, set forth below.
Any notice given personally or by documented overnight delivery service is
effective upon receipt. Any notice given by registered mail is effective upon
receipt, to the extent such receipt is confirmed by return receipt. Any notice
given by facsimile transmission is effective upon receipt, to the extent that
receipt is confirmed, either verbally or in writing by the recipient. Any notice
which is refused, unclaimed or undeliverable because of an act or omission of
the party to be notified, if such notice was correctly addressed to the party to
be notified, shall be deemed communicated as of the first date that said notice
was refused, unclaimed or deemed undeliverable by the postal authorities, or
overnight delivery service.

 

If to Employer:

 

Impac Funding Corporation

1401 Dove Street

Newport Beach, California 92660

Telephone: (949) 475-3600

Facsimile: (949) 475-3969

Attention: Ronald Morrison, Esq.

General Counsel

 

With a copy to:

 

Greg T. Williams, Esq.

Allen Matkins Leck Gamble & Mallory LLP

1900 Main Street, Fifth Floor

Irvine, California 92614

Telephone: (949) 553-1313

Facsimile: (949) 553-8354

 

If to Employee:

 

Richard J. Johnson

4 South View

Coto de Caza, California 92679

 

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With a copy to:

 

Ernest W. Klatte, III, Esq.

Rutan & Tucker, L.L.P.

611 Anton Blvd., 14th Floor

Costa Mesa, California 92626

Telephone: (714) 641-5100

Facsimile: (714) 546-9035

 

14. Amendments And Waivers. This Agreement may not be amended, modified,
superseded, canceled, or any terms waived, except by written instrument signed
by both parties, or in the case of waiver, by the party to be charged.

 

15. Successor and Assigns. This Agreement is not assignable by Employee, nor by
Employer except to an affiliated or successor entity. This Agreement is binding
on the parties’ heirs, executors, administrators, other legal representatives,
successors, and, to the extent assignable, their assigns.

 

16. Representations. The person executing this Agreement on behalf of Employer
hereby represents and warrants on behalf of himself and Employer that he is
authorized to represent and bind Employer. Employee specifically represents and
warrants to Employer that he is not now under any contractual or
quasi-contractual obligations that is inconsistent or in conflict with this
Agreement or that would prevent, limit or impair Employee’s performance of his
obligations under this Agreement, (b) he has had the opportunity to be
represented by legal counsel of his choosing in preparing, negotiating,
executing and delivering this Agreement; and (c) fully understands the terms and
provisions of this Agreement.

 

17. Counterparts; Facsimile Signatures. This Agreement may be executed in any
number of counterparts, each of which shall be deemed an original for all
purposes. This Agreement may be executed by a party’s signature transmitted by
facsimile (“fax”), and copies of this Agreement executed and delivered by means
of faxed signatures shall have the same force and effect as copies hereof
executed and delivered with original signatures. All parties hereto may rely
upon faxed signatures as if such signatures were originals. Any party executing
and delivering this Agreement by fax shall promptly thereafter deliver a
counterpart signature page of this Agreement containing said party’s original
signature. All parties hereto agree that a faxed signature page may be
introduced into evidence in any proceeding arising out of or related to this
Agreement as if it were an original signature page.

 

18. Rules of Construction. This Agreement has been negotiated by the parties and
is to be interpreted according to its fair meaning as if the parties had
prepared it together and not strictly for or against any party. References in
this Agreement to “Sections” refer to Sections of this Agreement, unless the
context expressly indicates otherwise. References to “provisions” of this
Agreement refer to the terms, conditions, restrictions and promises contained in
this Agreement. References in this Agreement to laws and regulations refer to
such laws and regulations as in effect on this date and to the corresponding
provisions, if any, of any successor law or regulation. At each place in this
Agreement where the context so requires, the masculine, feminine or neuter
gender includes the others and the singular or plural number includes the

 

12

--------------------------------------------------------------------------------

other. Forms of the verb “including” mean “including without limitation” unless
the context expressly indicates otherwise. “Or” is inclusive and includes “and”
unless the context expressly indicates otherwise. The introductory headings at
the beginning of Sections of this Agreement are solely for the convenience of
the parties and do not affect any provision of this Agreement.

 

[SIGNATURE PAGE FOLLOWS THIS PAGE]

 

13

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IN WITNESS WHEREOF, this Agreement is executed as of the day and year first
above written.

 

“EMPLOYER”

IMPAC FUNDING CORPORATION,

a California corporation

By:

 

/s/    RONALD MORRISON        

--------------------------------------------------------------------------------

   

Name: Ronald Morrison

Title: General Counsel

 

“EMPLOYEE”

By:

 

/s/    RICHARD J. JOHNSON        

--------------------------------------------------------------------------------

   

Richard J. Johnson

 

14

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EXHIBIT A

 

JOB DESCRIPTION AND RELATED ENTITIES

 

Responsible for planning, coordinating and directing the financial affairs of
the Organization, including the accounting, treasury, financial planning,
reporting, compliance, analysis, and tax functions. For purposes of this Exhibit
A, “Organization” means Employer and any affiliates or related entities of
Employer for whom Employee is requested to provide services pursuant to the
Employment Agreement by and between Employer and Employee dated as of April 1,
2003 (the “Agreement”). Provide management and the Board of Directors of
Employer and all of the entities within the Organization with meaningful and
timely information regarding the Organization’s financial performance. Monitor
compliance with all applicable laws, rules, and regulations related to financial
information and financial performance of the Organization, including tax
compliance, and implement and oversee programs designed to ensure such
compliance. Serve on the Asset Liability Committee of Impac Mortgage Holdings,
Inc. (“IMH”) and administer and oversee its interest rate risk management of
IMH’s balance sheet. Implement and maintain programs designed to ensure proper
management of the Organization’s liquidity position and that proper cost
effective funding is available to meet the Organization’s objectives. Recommend
and implement asset/liability and tax strategies to improve financial
performance. Direct a financial planning process for both next year budgeting
and strategic planning purposes. Provide appropriate financial analysis of
investment, merger and acquisition alternatives and capital raising efforts and
alternatives. Act as liaison with the internal and external auditors. Manage the
staff of exempt and non-exempt employees. Perform supervisory duties to include:
hiring, corrective action, performance appraisals, salary reviews, counseling,
work scheduling, training, and budgeting. Oversee and manage the Organization’s
warehouse lending operations. Review and approve credit applications and
extensions of additional credit. Oversee and manage the Organization’s
information technology (“IT”) department. Oversee and approve IT projects and
allocation of resources and approval of all IT related capital expenditures.
Oversee and manage the master servicing and default administration of the
Organization’s investment portfolio, and master servicing portfolio. Review and
approve default administration policies.

 

Employee acknowledges, understands and agrees that Employee will be requested by
Employer to devote some or all of Employee’s time and effort during the term of
employment pursuant to the Agreement (and consistent with the above job
descriptions) to the businesses of Employer’s affiliates or related entities
pursuant to certain agreements between and among Employer and such affiliates or
related entities. Such affiliates and related entities include, but are not
limited to, the following: Impac Mortgage Holdings, Inc., Impac Mortgage Capital
Corp., Impac Warehouse Lending Group, IMH Assets Corp., Novelle Financial
Services, Inc., Impac Lending Group, Impac Secured Assets Corp., Impac Mortgage
Acceptance Corp., Impac Multifamily Capital Corp. and Impac Foundation.

 

Employee further understands and acknowledges that, pursuant to the Agreement,
Employee may be directed by Employer to provide services consistent with the
above job descriptions to additional real estate investment trusts or other
entities which Employer establishes or with which Employer affiliates or becomes
related and for which there exists an agreement with Employer or any of the
above entities to provide such services.

 

EXHIBIT A

1

--------------------------------------------------------------------------------

Employee understands and acknowledges that Employee’s obligations under the
Agreement, including Employee’s duties under Section 4 thereof and the
Proprietary Rights and Inventions Agreement entered into pursuant to Section 6
thereof, shall apply and extend to Employee’s knowledge of the business of
Employer’s affiliates or related entities and any trade secret or other
confidential or proprietary information relating to same.

 

EXHIBIT A

2

--------------------------------------------------------------------------------

EXHIBIT B

 

WAIVER AND RELEASE AGREEMENT

 

For full and valuable consideration, including, but not limited to, severance
payments made and to be made by Impac Funding Corporation and any affiliate or
related entity of Impac Funding Corporation (collectively, “Employer”) to
Richard J. Johnson (“Employee”) and guaranteed by Impac Mortgage Holdings, Inc.
(“Guarantor”) pursuant to the .Employment Agreement between Employer and
Employee dated as of April 1, 2003 (the “Employment Agreement”), Employee, on
the one part, and Employer and Guarantor on the other part, hereby enter into
this Waiver and Release Agreement (“Waiver”), and each agrees to waive and
release the other and, as the case may be, the other’s stockholders, directors,
officers, employees, affiliates, agents, successors and assigns, if any, from
all known and unknown claims, agreements or complaints related to or arising
under Employee’s employment with Employer, including, but not limited to, any
claim arising out of Employee’s termination, any express or implied agreement
between Employee and Employer (other than each party’s respective rights and
obligations under Sections 2.3, 2.4 and 4.1 of the Employment Agreement, the
Guaranty and the Proprietary Rights and Inventions Agreement), and any other
federal or state constitutional provisions, statutes or laws relating to an
employee’s relationship with his employer, including, but not limited to, Title
VII of the Civil Rights Act of 1964, the Employee Retirement Income Security
Act, the Age Discrimination in Employment Act, the Americans With Disabilities
Act, the California Fair Employment and Housing Act, and the California Labor
Code.

 

This Waiver shall not include a waiver of any of the following: (i) any right to
defense and/or indemnification that Employee may have under California Labor
Code section 2802, or under any defense and indemnification policy or agreement;
(ii) any claim for breach of any pension, 401k, deferred compensation or stock
option plan of Employer; or (iii) any claim that Employee may have against any
officer, director, employee, or agent of Employer or Guarantor for defamation or
intentional interference with prospective employment or business advantage.

 

This Waiver includes a waiver of any rights the parties may have under Section
1542 of the California Civil Code, which states:

 

“A general release does not extend to claims which the creditor does not know or
suspect to exist in his favor at the time of executing the release, which if
known by him must have materially affected his settlement with the debtor.”

 

Employee’s Waiver is conditioned upon Employer and Guarantor’s performance of
all of their severance obligations pursuant to Sections 2.3 and 2.4 of the
Employment Agreement and pursuant the Guaranty. In the event that either
Employer or Guarantor materially breaches its severance obligations under the
Employment Agreement or Guaranty, then Employee shall be entitled to pursue any
claims as though this Waiver did not exist, and the statute of limitations for
any such claims shall be deemed to have been tolled during the period from the
date of Employee’s termination through the date Employer or Guarantor breached
it obligations.

 

Employer’s Waiver is conditioned upon Employee’s performance of all of his
obligations pursuant to Section 4.1 of the Employment Agreement. In the event
that Employee materially

 

EXHIBIT B

1

--------------------------------------------------------------------------------

breaches his noncompete obligations under the Employment Agreement, then
Employer and Guarantor shall be entitled to pursue any claims as though this
Waiver did not exist, and the statute of limitations for any such claims shall
be deemed to have been tolled during the period from the date of Employee’s
termination through the date Employee breached his obligations. The parties to
this Waiver each acknowledge that each may hereafter discover facts different
from or in addition to those now known or believed to be true with respect to
the claims, suits, rights, actions, complaints, agreements, contracts, causes of
action, and liabilities of any nature whatsoever that are the subject of the
above release, and the parties expressly agree that this Waiver shall be and
remain effective in all respects regardless of such additional or different
facts.

 

Employee is advised as follows: (i) Employee should consult an attorney
regarding this Waiver before executing it; (ii) Employee has 21 days in which to
consider this Waiver and whether Employee will enter into it; (iii) this Waiver
does not waive rights or claims that may arise after it is executed; and (iv) at
anytime within seven days after executing this Waiver, Employee may revoke this
Waiver. This Waiver shall not become effective or enforceable until the seven
day revocation period set forth herein has passed.

 

Capitalized terms not otherwise defined herein shall have the meanings set forth
in the Employment Agreement.

 

Dated:                                     
                                                           

 

                                                                               
                         

RICHARD J. JOHNSON

 

 

IMPAC FUNDING CORPORATION

 

   

By:                                      
                                                           

   

Print Name:                                       
                                         

   

Title:                                     
                                                        

 

IMPAC MORTGAGE HOLDINGS, INC.

         

By:                                      
                                                           

   

Print Name:                                       
                                         

   

Title:                                     
                                                        

 

EXHIBIT B

2

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EXHIBIT C

 

INCENTIVE COMPENSATION

 

Excess Income: Excess Income equals the greater of zero or Net Income minus the
product of ((the Ten Year U.S. Treasury Rate plus 200 basis points) x ((Average
Net Worth x number of days in quarter) divided by 365)).

 

Net Income: The definition for “Net Income” is at any date of determination, the
net income of IMH determined in accordance with then current tax law before the
total Incentive Compensation paid to Joseph R. Tomkinson, William Ashmore and
Richard Johnson (collectively, the “Executives”) pursuant to their respective
employment agreements, the deduction for dividends paid and any net operating
loss deductions arising from losses in prior periods. Upon filing IMH’s actual
tax return, any variance from prior period estimates shall be an adjustment to
the then current period Incentive Compensation calculation.

 

Average Net Worth: The definition of “Average Net Worth” for any quarter is
IMH’s accumulated net worth of $514,795,766 at December 31, 2002 plus subsequent
to December 31, 2002, the weighted average daily sum of the gross proceeds from
any sale of IMH’s equity securities, before deducting any underwriting discounts
and commissions and other expenses; plus the average balance quarter-to-date on
IMH’s General Ledger of the retained earnings for the quarter (general ledger
account number 317500); less the weighted average daily sum of the gross
proceeds used to repurchase IMH’s stock; less the average balance
quarter-to-date on IMH’s General Ledger of the cumulative dividends declared
(general ledger account number 317510); plus an amount equal to Prior Period
Losses. Prior Period Losses equal the lower of (a) zero, or (b) the sum of any
losses incurred by IMH after December 31, 2003 and prior to the quarter of the
determination of Incentive Compensation less any Net Income for quarters
subsequent to the quarter of the loss plus any losses incurred for quarters
subsequent to the quarter of the loss.

 

Ten Year U.S. Treasury Rate: The definition for “Ten Year U.S. Treasury Rate”
for a quarterly period is the arithmetic average of the weekly per annum Ten
Year Average Yields published by the Federal Reserve Board during such quarter.
In the event that the Federal Reserve Board does not publish a weekly per annum
Ten Year Average Yield during any week in a quarter, then the Ten Year U.S.
Treasury Rate for such week shall be the weekly per annum Ten Year Average
Yields published by any Federal Reserve Bank or by any U.S. Government
department or agency selected by Employer for such week. In the event that
Employer determines in good faith that for any reason Employer cannot determine
the Ten Year U.S. Treasury Rate for any quarter as provided above, then the Ten
Year U.S. Treasury Rate for such quarter shall be the arithmetic average of the
per annum average yields to maturity based upon the daily closing bids during
such quarter for each of the issues of actively traded marketable U.S. Treasury
fixed interest rate securities (other than securities which can, at the option
of the holder, be surrendered at face value in payment of any federal estate
tax) with the final maturity date not less than eight nor more than twelve years
from the date of each such quotation, for each business day in New York City (or
less frequently if daily quotations shall not be generally available) in each
such quarterly period as chosen by at least three recognized dealers in U.S.
Government securities selected by Employer.

 

EXHIBIT C

1

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EXHIBIT D

 

PROPRIETARY RIGHTS AND INVENTIONS AGREEMENT

 

In consideration of my employment by Impac Funding Corporation, a California
corporation (the “Company”), and the compensation I receive from the Company, I
agree to certain restrictions placed by the Company on my use and development of
information and technology, as more fully set out below.

 

1. Proprietary Information. I understand that the Company possesses and will
possess Proprietary Information which is important to its business. For purposes
of this Agreement, “Proprietary Information” is information that was or will be
developed, created, or discovered by or on behalf of the Company or any of its
affiliates or related entities, or which became or will become known by, or was
or is conveyed to the Company, which has commercial value in the Company’s
business or the business of any of the Company’s affiliates or related entities,
unless (i) the information is or becomes publicly known through lawful means;
(ii) the information was rightfully in my possession or part of my general
knowledge prior to my employment by the Company as specifically identified and
disclosed by me in Exhibit A attached hereto; or (iii) the information is
disclosed to me without confidential or proprietary restriction by a third party
who rightfully possesses the information (without confidential or proprietary
restriction) and who did not learn of it directly from the Company or any of its
affiliates or related entities.

 

Proprietary Information includes information (whether conveyed orally or in
writing) relating to (i) client/customer lists, vendor lists or other lists or
compilations containing client, customer or vendor information; (ii) information
about investment techniques or strategies, investment research or analysis,
business techniques or strategies, processes, costs, profits, markets, marketing
plans, forecasts, sales or commissions; (iii) plans for new investment
techniques and strategies; (iv) the compensation, performance and terms of
employment of other employees; (v) all other information that has been or will
be given to me in confidence by the Company (or any affiliate or related entity
of the Company); (vi) software in various stages of development, and any
designs, drawings, schematics, specifications, techniques, models, data, source
code, algorithms, object code, documentation, diagrams, flow charts, research
development, processes and procedures relating to any software; (vii) any
documents, books, papers, drawings, schematics, models, sketches, computer
programs, databases or other data, including electronic data recorded or
retrieved by any means, that contain any Proprietary Information; and (viii) any
information described above which the Company or any of its affiliates or
related entities obtains from another party and which the Company or any of its
affiliates or related entities treats as proprietary or designates as
Proprietary Information.

 

2. Company Materials. I understand that the Company and its affiliates and
related entities possess or will possess “Company Materials” which are important
to their respective businesses. For purposes of this Agreement, “Company
Materials” are documents or other media or tangible items that contain or embody
Proprietary Information or any other information concerning the business,
operations or plans of the Company or any of its affiliates or related entities,
whether such documents have been prepared by me or by others. “Company
Materials” include charts, graphs, notebooks, customer lists, computer software,
media or printouts, sound

 

EXHIBIT D

1

--------------------------------------------------------------------------------

recordings and other printed, typewritten or handwritten documents, as well as
financial models and the like.

 

3. Intellectual Property.

 

3.1 All Proprietary Information and all right, title and interest in and to any
patents, patent rights, copyrights, trademark rights, mask work rights, trade
secret rights, and all other intellectual and industrial property and
proprietary rights that currently exist or may exist in the future anywhere in
the world (collectively “Rights”) in connection therewith shall be the sole
property of the Company or its affiliates or related entities, as the case may
be. I hereby assign to the Company any Rights I may have or acquire in such
Proprietary Information. At all times, both during my employment with the
Company and after its termination, I will keep in confidence and trust and will
not use or disclose any Proprietary Information or anything relating to it
without the prior written consent of an officer of the Company except as may be
necessary and appropriate in the ordinary course of performing my duties to the
Company. The disclosure restrictions of this Agreement shall not apply to any
information that I can document is generally known to the public through no
fault of mine. Nothing contained herein will prohibit me from disclosing to
anyone the amount my wages.

 

3.2 All Company Materials shall be the sole property of the Company. I agree
that during my employment with the Company, I will not remove any Company
Materials from the business premises of the Company or deliver any Company
Materials to any person or entity outside the Company, except as I am required
to do in connection with performing the duties of my employment. I further agree
that, immediately upon the termination of my employment by me or by the Company
for any reason, or for no reason, or during my employment if so requested by the
Company, I will return all Company Materials, apparatus, equipment and other
physical property, and any reproduction of such property, excepting only (i) my
personal copies of records relating to my compensation and (ii) my copy of this
Agreement.

 

3.3 I agree that all “Inventions” (which term includes patentable or
non-patentable inventions, original works of authorship, derivative works, trade
secrets, trademarks, copyrights, service marks, discoveries, patents,
technology, algorithms, computer software, application programming interfaces,
protocols, formulas, compositions, ideas, designs, processes, techniques,
know-how, data and all improvements, rights and claims related to the
foregoing), which I make, conceive, reduce to practice or develop (in whole or
in part, either alone or jointly with others) during my employment, shall be the
sole property of the Company to the maximum extent permitted by Section 2870 of
the California Labor Code. I hereby assign, without further consideration, all
such Inventions to the Company (free and clear of all liens and encumbrances),
and the Company shall be the sole owner of all Rights in connection therewith.
No assignment in this Agreement shall extend to Inventions, the assignment of
which is prohibited by Labor Code Section 2870, which states:

 

Any provision in an employment agreement which provides that an employee shall
assign, or offer to assign, any of his or her rights in an invention to his or
her employer shall not apply to an invention that the employee developed
entirely on his or her own time without using the employer’s equipment,
supplies, facilities, or trade secret information except for those inventions
that either:

 

EXHIBIT D

2

--------------------------------------------------------------------------------

  1.   Relate at the time of conception or reduction to practice of the
invention to the employer’s business, or actual or demonstrably anticipated
research or development of the employer.

 

  2.   Result from any work performed by the employee for the employer.

 

I acknowledge that all original works of authorship which are made by me (in
whole or in part, either alone or jointly with others) within the scope of my
employment and which are protectable by copyright are “works made for hire,” as
defined in the United States Copyright Act (17 USCA, Section 101). I will not
disclose Inventions covered by this Section 3.3 to any person outside the
Company, unless I am requested to do so by management personnel of the Company.

 

3.4 I agree to disclose promptly to the Company all Inventions and relevant
records, which records will remain the sole property of the Company. I further
agree that all information and records pertaining to any idea, process,
trademark, service mark, invention, technology, computer program, original work
or authorship, design, formula, discovery, patent, or copyright that I do not
believe to be an Invention, but is conceived, developed, or reduced to practice
by me (in whole or in part, either alone or jointly with others) during my
employment, shall be promptly disclosed to the Company (such disclosure to be
received in confidence). I will also disclose to the Company all Inventions
conceived, reduced to practice, used, sold, exploited or developed by me (in
whole or in part, either alone or jointly with others) within one (1) year of
the termination of my employment with the Company (“Presumed Inventions”); such
disclosures shall be received by the Company in confidence, to the extent they
are not assigned to the Company in Section 3.3, and do not extend such
assignment. Because of the difficulty of establishing when any Presumed
Invention is first conceived or developed by me, or whether it results from
access to Proprietary Information or the Company’s equipment, facilities, and
data, I agree that all Presumed Inventions and all Rights associated therewith
shall be presumed to be Inventions subject to assignment under Section 3.3. I
can rebut this presumption if I prove that a Presumed Invention is not an
Invention subject to assignment under Section 3.3.

 

3.5 I agree to perform, during and after my employment, all acts deemed
necessary or desirable by the Company to permit and assist it, at the Company’s
expense, in evidencing, perfecting, obtaining, maintaining, defending and
enforcing Rights or my assignment with respect to such Inventions in any and all
countries. Should the Company be unable to secure my signature on any document
necessary to apply for, prosecute, obtain, enforce or defend any Rights relating
to any assigned Invention, whether due to my mental or physical incapacity or
any other cause, I hereby irrevocably designate and appoint the Company and its
duly authorized officers and agents, as my agents and attorneys-in-fact, with
full power of substitution, to act for and in my behalf and instead of me, to
execute and file any documents and to do all other lawfully permitted acts to
further the above purposes with the same legal force and effect as if executed
by me.

 

3.6 Any assignment of copyright hereunder (and any ownership of a copyright as a
work made for hire) includes all rights of paternity, integrity, disclosure and
withdrawal and any other rights that may be known as or referred to as “moral
rights” (collectively “Moral Rights”). To the extent such Moral Rights cannot be
assigned under applicable law and to the

 

EXHIBIT D

3

--------------------------------------------------------------------------------

extent the following is allowed by the laws an the various countries where Moral
Rights exist, I hereby waive such Moral Rights and consent to any action of the
Company that would violate such Moral Rights in the absence of such waiver and
consent. I will confirm any such waivers and consents from time to time as
requested by the Company.

 

3.7 Attached hereto as Exhibit A is a complete list of all existing Inventions
to which I claim personal ownership of as of the date of this Agreement and that
I desire to specifically clarify are not subject to this Agreement, and I
acknowledge and agree that such list is complete. If no such list is attached to
this Agreement, I represent that I have no such Inventions at the time of
signing this Agreement.

 

3.8 I understand that nothing in this Agreement is intended to expand the scope
of protection provided me by Sections 2870 through 2872 of the California Labor
Code.

 

4. Prior Actions and Knowledge. I represent and warrant that from the time of my
first contact or communication with the Company, I have held in strict
confidence all Proprietary Information and have not (i) disclosed any
Proprietary Information or delivered any Company Materials to anyone outside of
the Company or any affiliate or related entity of the Company, or (ii) used,
copied, published, or summarized any Proprietary Information or removed any
Company Materials from the business premises of the Company, except to the
extent necessary to carry out my responsibilities as an employee of the Company.

 

5. Non-Solicitation of Employees. I agree that for a period of twelve months
following the termination of my employment with the Company, I will not, on
behalf of myself or any other person or entity, solicit the services of any
person who was employed by the Company or any affiliate or related entity of the
Company on the date of my termination of employment or at any time during the
six month period prior to the termination of my employment.

 

6. No Conflict with Obligations to Third Parties. I represent that my
performance of all the terms of this Agreement will not breach any agreement to
keep in confidence proprietary or confidential information acquired by me in
confidence or in trust prior to my employment with the Company. I have not
entered into, and I agree I will not enter into, any agreement either written or
oral in conflict herewith or in conflict with my employment with the Company.

 

7. Remedies. I recognize that nothing in this Agreement is intended to limit any
remedy of the Company under the California Uniform Trade Secrets Act. I
recognize that my violation of this Agreement could cause the Company
irreparable harm, the amount of which may be extremely difficult to estimate,
making any remedy at law or in damages inadequate. Therefore, I agree that the
Company shall have the right to apply to any court of competent jurisdiction for
an order restraining any breach or threatened breach of this Agreement and for
any other relief the Company deems appropriate. This right shall be in addition
to any other remedy available to the Company.

 

8. Survival. I agree that my obligations under Sections 3.1 through 3.6, 5 and 6
shall continue in effect after termination of my employment, regardless of the
reason or reasons for termination, and whether such termination is voluntary or
involuntary on my part, and that the

 

EXHIBIT D

4

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Company is entitled to communicate my obligations under this Agreement to any
future employer or potential employer of mine.

 

9. Controlling Law. This Agreement is and shall be governed and construed in
accordance with the laws of the State of California, regardless of any laws on
choice of law or conflicts of law of any jurisdiction.

 

10. Severable Provisions. The provisions of this Agreement are severable and if
any one or more provisions is determined to be illegal or otherwise
unenforceable, in whole or in part, the remaining provisions, and any partially
unenforceable provisions to the extent enforceable, shall nevertheless be
binding and enforceable.

 

11. Successors and Assigns. This Agreement shall be effective as of the date I
execute this Agreement and shall be binding upon me, my heirs, executors,
assigns, and administrators and shall inure to the benefit of the Company, its
subsidiaries, successors and assigns.

 

12. Counterparts; Facsimile Signatures. This Agreement may be executed in any
number of counterparts, each of which shall be deemed an original for all
purposes. This Agreement may be executed by a party’s signature transmitted by
facsimile (“fax”), and copies of this Agreement executed and delivered by means
of faxed signatures shall have the same force and effect as copies hereof
executed and delivered with original signatures. All parties hereto may rely
upon faxed signatures as if such signatures were originals. Any party executing
and delivering this Agreement by fax shall promptly thereafter deliver a
counterpart signature page of this Agreement containing said party’s original
signature. All parties hereto agree that a faxed signature page may be
introduced into evidence in any proceeding arising out of or related to this
Agreement as if it were an original signature page.

 

13. Rules of Construction. This Agreement has been negotiated by the parties and
is to be interpreted according to its fair meaning as if the parties had
prepared it together and not strictly for or against any party. References in
this Agreement to “Sections” refer to Sections of this Agreement, unless the
context expressly indicates otherwise. References to “provisions” of this
Agreement refer to the terms, conditions, restrictions and promises contained in
this Agreement. References in this Agreement to laws and regulations refer to
such laws and regulations as in effect on this date and to the corresponding
provisions, if any, of any successor law or regulation. At each place in this
Agreement where the context so requires, the masculine, feminine or neuter
gender includes the others and the singular or plural number includes the other.
Forms of the verb “including” mean “including without limitation” unless the
context expressly indicates otherwise. “Or” is inclusive and includes “and”
unless the context expressly indicates otherwise. The introductory headings at
the beginning of Sections of this Agreement are solely for the convenience of
the parties and do not affect any provision of this Agreement.

 

14. Amendments and Waivers. This Agreement may not be amended, modified,
superseded, canceled, or any terms waived, except by written instrument signed
by both parties, or in the case of waiver, by the party to be charged.

 

EXHIBIT D

5

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I HAVE READ THIS AGREEMENT CAREFULLY AND I UNDERSTAND AND ACCEPT THE OBLIGATIONS
WHICH IT IMPOSES UPON ME WITHOUT RESERVATION. NO PROMISES OR REPRESENTATIONS
HAVE BEEN MADE TO ME TO INDUCE ME TO SIGN THIS AGREEMENT OTHER THAN THE PROMISES
AND REPRESENTATIONS EXPRESSLY STATED IN THIS AGREEMENT AND IN THE EMPLOYMENT
AGREEMENT ENTERED INTO BETWEEN ME AND THE COMPANY CONCURRENTLY HEREWITH. I HAVE
COMPLETELY NOTED ON EXHIBIT A TO THIS AGREEMENT ANY PROPRIETARY INFORMATION AND
INVENTIONS THAT I DESIRE TO EXCLUDE FROM THIS AGREEMENT.

 

Dated as of: April 1, 2003

 

    /s/  Richard J. Johnson  

--------------------------------------------------------------------------------

    RICHARD J. JOHNSON Accepted and Agreed to:    

IMPAC FUNDING CORPORATION,

a California corporation

    By    

  /s/  Ronald Morrison

--------------------------------------------------------------------------------

        Name: Ronald Morrison     Title: General Counsel    

 

EXHIBIT D

6

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EXHIBIT A

 

EMPLOYEE’S DISCLOSURE

 

Gentlemen:

 

1. Except for the information and ideas listed below that rightfully became part
of my general knowledge prior to my first contact or communication with the
Company or any of its affiliates or related entities, I represent that I am not
in the possession of and have no knowledge of any information that can be
considered the Proprietary Information of Impac Funding Corporation, a
California corporation (the “Company”), other than information disclosed by
Company or any of its affiliates or related entities during my employment
negotiations or my prior employment with the Company or any of its affiliates or
related entities, which I understand and agree is the Proprietary Information of
Company or its affiliates or related entities, as the case may be.

 

                                                                               
                                        
                                        
                                        
                                                           

 

                                                                               
                                        
                                        
                                        
                                                           

 

                                                                               
                                        
                                        
                                        
                                                           

 

2. Except for the complete list of Inventions set forth below, I represent that
I (in whole or in part, either alone or jointly with others) have not made,
conceived, developed or first reduced to practice any Inventions relevant to the
subject matter of my employment with the Company prior to my employment with the
Company or any of its affiliates or related entities.

 

      X          No Inventions

 

                   See below:

 

                                                                               
                                        
                                        
                                        
                                        

                                                                               
                                        
                                        
                                        
                                        

                                                                               
                                        
                                        
                                        
                                        

                                                                               
                                        
                                        
                                        
                                        

                                                                               
                                        
                                        
                                        
                                        

                  Additional   sheets attached

  /s/ Richard J. Johnson

                                                                               
                                                                  

RICHARD J. JOHNSON

 

EXHIBIT A

TO PROPRIETARY RIGHTS AND INVENTIONS AGREEMENT

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