Exhibit 10.3


 


EXECUTIVE
EMPLOYMENT AGREEMENT


 


THIS EXECUTIVE EMPLOYMENT
AGREEMENT is made as of April 1, 2008, by and between Impac Funding
Corporation, a California corporation (“Employer”), and William S. Ashmore, an
individual (“Executive”).


 


R E C I T A L S


 


WHEREAS, Executive is
knowledgeable of and skillful in the business of Employer and IMH, which
includes but is not limited to 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 and those duties and
functions identified in Exhibit A hereto (the “Business”);


 


WHEREAS, Employer
believes that Executive 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, Executive
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 Executive continue his employment as President of Employer; and


 


WHEREAS, Executive 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 Executive and Executive hereby accepts such employment full-time
(subject to those exceptions, if any, set forth below) as President 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 agreed.  Executive


 





















 


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


 


1.2                                 Executive
acknowledges and agrees that Executive 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
Executive’s duties and obligations under this Agreement.


 


1.3                                 Executive
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. 
Executive 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 Executive’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 Executive from engaging in or managing Executive’s outside
investments.


 


2.                                      Term and Termination.


 


2.1                                 The term of
this Agreement shall be from January 1, 2008 through December 31,
2009, unless extended by the mutual written agreement of Employer and Executive
or pursuant to the terms of Paragraph 2.8 herein.


 


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


 


(b)                                 Death of
Executive;


 


(c)                                  Employer may
terminate Executive 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
Executive in the deliberations or vote on the same, if a director) of
Employer):


 


(i)                                     Executive 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


 


2





















 


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)                                  Executive materially
and substantially fails to perform Executive’s job duties properly assigned to
Executive 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 Executive; provided that Executive shall have a reasonable time to
correct any such failures to the extent that such failures are correctable and
Employer may not terminate Executive for “cause” on the basis on any such
failure that is cured within a reasonable time.


 


(iii)                               Executive
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)                              Executive’s
material breach of any of the terms of this Agreement or any other obligation
that Executive 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 Executive or between IMH and Executive (or
between Executive 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
Executive).


 


(d)                                 By mutual
agreement between Employer and Executive;


 


(e)                                  The date
when Executive is declared legally incompetent under the laws of the State of
California, or if Executive has a mental or physical condition that can
reasonably be expected to prevent Executive 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 Executive 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 Executive; or


 


(g)                                 Executive
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 Executive 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 Executive to terminate his employment (provided such event is curable) and
Executive 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 2.02(g),


 


3





















 


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 Executive of duties materially inconsistent with, or a
substantial reduction or alteration in, the authority, duties or
responsibilities of Executive as set forth in this Agreement, without Executive’s
prior written consent;


 


(ii)                                  the
principal place of the performance of Executive’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 Executive’s prior written consent;


 


(iii)                               a material
breach by Employer of this Agreement, including a reduction by Employer of
Executive’s Base Salary, without Executive’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,
2009.


 


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


 


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


 


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


 


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


 


(d)                                 If the
termination is pursuant to the terms of 2.2(b) or (e), then Executive, or
his estate or heirs,  shall also be
entitled to six (6) additional months of compensation due under 3.1(a),
which shall be paid out over the following six (6) months.


 


2.4                                 Except as
set forth in Section 4, in the event that Executive’s employment is
terminated pursuant to Section 2.2(f) or 2.2(g), neither Employer nor
Executive shall have any


 


4





















 


remaining
duties or obligations under this Agreement, except that Employer shall pay to
Executive, 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):


 


(a)                                  An
additional 18 month’s worth of Base Salary to be paid over the succeeding 18
month period after the Termination date:


 


(b)                                 Premiums for
continuation of Executive’s health insurance benefits under Employer’s group
health insurance plan, pursuant to COBRA, for the 18 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
Executive immediately prior to the Termination Date, “Equivalent Coverage”);
provided that Employer shall pay such premiums only so long as (during said 18
month period) Executive remains eligible for such Equivalent Coverage under
COBRA;


 


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


 


5





















 


2.5                                 As a
condition precedent of Executive 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, Executive 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 Executive 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.


 


2.8                                 This
Agreement shall automatically renew for an additional two (2) year period
at its conclusion with the same terms and conditions unless Employer gives
Executive written notice of their intent not to renew this Agreement.  If Employer chooses not to renew this
Agreement then Notice of such nonrenewal must be given between July 15,
2009 and August 15, 2009.  If
Employer gives such Notice, then Executive’s right to demand or seek
compensation under Paragraph 2.4 herein shall no longer be available to
Executive.


 


3.                                      Compensation.


 


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


 


(a)                                  A base
salary of $500,000 per year (“Base Salary”), payable in equal installments
bi-weekly on those days when Employer normally pays its employees;


 


(b)                                 Executive
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 Executive uses some or all of his accrued time to
fall below the accrual cap).  The timing
of Executive’s vacation shall be governed by Employer’s usual policies
applicable to all employees;


 


(c)                                  Executive 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 Executive is eligible under the terms of such
plans.  Despite the foregoing, Executive
is entitled to participate in any such plan or program only if the


 


6





















 


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. 
Executive understands that any such plans may be modified or eliminated
in Employer’s sole discretion in accordance with applicable law; and


 


(d)                                 Executive
shall be entitled to stock options at the sole discretion of the Board of
Directors in the amount and subject to the terms and conditions as is
consistent with other Executives in the Company.


 


(e)                                  Such other
benefits as the Board of Directors of Employer, in its sole discretion, may
from time to time provide which may include cash bonuses or stock grants.


 


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


 


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


 


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


 


3.5                                 Employer
shall have the right to deduct from the compensation due to Executive 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 Executive.


 


3.6                                 During the
period that Executive is employed hereunder, Employer shall pay to Executive an
automobile allowance in the amount of $1,000 per month (prorated for any
partial month during the employment period).


 


4.                                      Non-Competition.


 


4.1                                 At all times
during Executive’s employment hereunder, and in consideration for any and all
payments and benefits provided to Executive pursuant to this Agreement,
Executive 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.


 


7





















 


4.2                                 Nothing
contained in Section 4.1 shall be deemed to preclude Executive 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 Executive 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, Executive 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.  Executive and
Employer have previously signed a Proprietary Rights and Inventions Agreement
in the form attached hereto as Exhibit C (the “Proprietary Rights
and Inventions Agreement”) and it is agreed that such Agreement is true and
correct and will reain in effect during the term of this Agreement.


 


7.                                      Copies of Agreement.  Executive
authorizes Employer to send a copy of the Proprietary Rights and Inventions
Agreement to any and all future employers which Executive may have, and to any
and all persons, firms, and corporations, with whom Executive 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 Executive breach the terms of the Proprietary Rights and
Inventions Agreement or should another party induce a breach of that agreement
on Executive’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 Executive and
Employer (or any of its stockholders, directors, officers, employees,
affiliates, agents, successors or assigns) relating to or arising out of
Executive’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 Executive files a claim to
collect unpaid payments or benefits payable under Section 2.4, the
prevailing party 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,


 


8

















 


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
EXECUTIVE 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 EXECUTIVE HAVE READ THIS SECTION 9 AND IRREVOCABLY
AGREE TO ARBITRATE ANY DISPUTE IDENTIFIED ABOVE.


 




	
             /s/
  RM

  	
   

  	
                /s/
  WSA

  
	
  Employer’s Initials

  	
   

  	
  Executive’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. 
Executive 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 Executive expressly waives any right to
the contrary.  Executive 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 Executives
employment with Employer and any other subject matter of this Agreement.  Any such prior agreements are hereby
terminated and of no further effect and Executive, 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
Executive 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 Executive may have or otherwise be entitled to
receive.  The parties hereto agree that
in no event shall an oral modification of this Agreement be enforceable or
valid.


 


9

















 


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

  	
   

  	
   

  
	
  19500 Jamboree Rd.

  	
   

  	
   

  
	
  Irvine, California
  92603

  
	
  Telephone:

  	
   

  	
  (949) 475-3600

  
	
  Facsimile:

  	
   

  	
  (949) 475-3969

  
	
  Attention:

  	
   

  	
  Ronald
  Morrison, Esq.

  
	
   

  	
   

  	
  General Counsel

  
	
   

  	
   

  	
   

  
	
  If to Executive:

  
	
   

  	
   

  	
   

  
	
  William S. Ashmore

  
	
   

  
	
   

  
	
  Telephone:

  	
   

  	
   

  
	
  Facsimile:

  	
   

  	
   

  
	
   

  
	
  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.


 


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15.                               Successor and Assigns.  This Agreement
is not assignable by Executive, 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.  Executive 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 Executive’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 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.


 


11

















 


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:

  	
  Executive Vice
  President and General 

  
	
   

  	
   

  	
  Counsel

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  “EXECUTIVE”

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/
  William S. Ashmore

  
	
   

  	
  WILLIAM
  S. ASHMORE

  
					



 


12

















 


EXHIBIT A


 


JOB
DESCRIPTION AND RELATED ENTITIES


 


Direct, administer and coordinate the activities of
the Organization in support of policies, goals and objectives established by
the Chief Executive Officer and the Board by performing the following duties
personally or through subordinate managers. 
For purposes of this Exhibit A, “Organization” means the Employer
and any affiliates or related entities of Employer for whom Executive is
requested to provide services pursuant to the Agreement.  Guide and direct management in the
development, production, promotion and the financial aspects of the
Organization’s products and services. 
Direct the preparation of short-term and long-range plans and budgets
based on broad corporate goals and growth objectives.  Oversee executives who direct department
activities that implement the Organization’s policies.  Create the structure and processes necessary
to manage the Organization’s current activities and its projected growth.  Implement programs that meet the Organization’s
goals and objectives.  Maintain a sound
plan of corporate Organization, establishing policies to ensure adequate
management development and to provide for capable management succession.  Develop and install procedures and controls
to promote communication and adequate information flow within the Organization.  Establish operating policies consistent with
the Chief Executive Officer’s broad policies and objectives and ensure their
execution.  Evaluate the results of
overall operations regularly and systematically and reports these results to
the Chief Executive Officer and the Board. 
Define responsibilities, authorities and accountability of all direct
subordinates and manage compliance with same. 
Monitor all Organization activities and operations for compliance with
local, state and federal regulations and laws governing business operations,
and implement and oversee programs designed to ensure such compliance.  Manage a staff of employees.  Perform supervisory duties to include:
hiring, corrective action, performance appraisals, salary reviews, counseling,
work scheduling, training and budgeting.


 


Executive
acknowledges and understands that Executive may be requested by Employer to
devote some or all of Executive’s time and effort during the term of employment
pursuant to the Agreement 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., Impac Lending Group, Impac Secured
Assets Corp., Impac Mortgage Acceptance Corp., Impac Multifamily Capital Corp.,
REDC,  and Impac Foundation.


 


Executives further understands and acknowledges that,
pursuant to the Agreement, Executive may be directed by Employer to provide
services 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.


 


Executive understands and acknowledges that Executive’s
obligations under the Agreement, including Executive’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 


 


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Executive’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.


 


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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 William S. Ashmore (“Executive”)
and guaranteed by Impac Mortgage Holdings, Inc. (“Guarantor”) pursuant to
the Employment Agreement between Employer and Executive dated as of April 1,
2008 (the “Employment Agreement”), Executive, 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 Executive’s
employment with Employer, including, but not limited to, any claim arising out
of Executive’s termination, any express or implied agreement between Executive
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 Executive 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 Executive 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.”


 


Executive’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 Executive 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 Executive’s termination through the date
Employer or Guarantor breached it obligations.


 


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


 


Executive is
advised as follows:  (i) Executive
should consult an attorney regarding this Waiver before executing it; (ii) Executive
has 21 days in which to consider this Waiver and whether Executive 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, Executive 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:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  WILLIAM S. ASHMORE

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  IMPAC FUNDING
  CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Print Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  IMPAC MORTGAGE
  HOLDINGS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Print Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
							



 


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EXHIBIT
C


 


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.


 


	
  No Inventions

  
	
   

  
	
  See below:

  



 


 


 


	
  Additional
  sheets attached

  



 


 


	
   

  	
   

  
	
   

  	
  WILLIAM S.
  ASHMORE

  



 


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