Exhibit
10.1


EMPLOYMENT
AGREEMENT


THIS EMPLOYMENT AGREEMENT is effective as of June 1,
2006 (“Effective Date”), by and between Impac Funding Corporation, a California
corporation (“Employer”), and Ronald Morrison, an individual (“Employee”).


R E C I T A L S


WHEREAS, Employee is knowledgeable of the business of
Employer;


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


WHEREAS, Employer proposes to employ Employee in the
Executive Vice President, General Counsel (“General Counsel”) position;


WHEREAS, Employee possesses extensive confidential
information concerning the Business, including confidential attorney-client
communications; 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) in his role as General Counsel for the consolidated entities 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, General
Counsel (“General Counsel”) of Employer to perform the duties and functions set
forth in Exhibit A attached hereto and to perform such other duties or
functions as are reasonably required or as may be prescribed from time to time
or as otherwise agreed. Employee shall render his services by and subject to
the instructions and under the direction of the Employer’s Board of Directors
and to such persons as the Board may designate, including the Chief Executive
Officer “(CEO”) of Employer, to whom Employee shall directly report, with
additional reporting to the President as may be directed.


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) in his role as General
Counsel for the consolidated entities 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 May 31, 2009, 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 or Employer’s
parent corporation, Impac Mortgage Holdings, Inc. (“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 clients, (B) a felony leading to incarceration of more than
90 days or the payment of a penalty or fine of $100,000 or more; or (C) is
disbarred from practicing law, voluntarily surrenders his license to practice
law, or has his license suspended for a period in excess of thirty (30), as a
result of any complaint of professional misconduct.


(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



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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 2.02(g), the aforementioned 30-day notice and reasonable cure period
shall not apply to Section 2.2(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;



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(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 June 1, 2009.


2.3           Except as set forth in
Section 5, in the event that Employee’s employment is terminated pursuant to
Section 2.2(a), 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 Bonus 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 5, 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):


(a)           An additional 18 month’s
worth of Base Salary to be paid proportionally over the 18 month period of time
after Employee signs and delivers to Employer the Waiver and Release Agreement
required pursuant to Section 2.5; and


(b)           Premiums for
continuation of Employee’s health insurance benefit; under Employer’s group
health insurance plan, for the 18 month period succeeding the Termination Date
(with such health insurance coverage to be at a level and quality



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equivalent to the health insurance coverage provided
by Employer to Employee immediately prior to the Termination Date, “Equivalent
Coverage”).  Employer agrees to transmit
following the Termination Date a request (and to join in such request) from
Employee to Employer’s then group health insurance carrier seeking approval to
maintain Employee’s coverage for such period under Employer’s group plan as
though Employee were still employed and without reference to COBRA; provided
that i) Employer makes no representation concerning any future health insurance
carrier’s willingness to consent to such additional coverage; ii) Employer
undertakes no obligation to secure such consent.  In the event that such consent is not
forthcoming, then Employee’s continuation coverage shall be subject to
COBRA.  Employer shall pay such premiums
only so long as (during said 18 month period) Employee remains eligible for
such Equivalent Coverage;


(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.”


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
$385,000 per year (“Base Salary”), payable in equal installments on those days
when Employer normally pays its salaried employees;


(b)           Bonus Incentive
Compensation consisting of a discretionary bonus up to 50% of Employee’s base
salary paid during the fiscal year, retroactive to June 1,



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2006, in accordance with this agreement. The Bonus
Incentive Compensation will be based upon annual Individual Management
Objectives which shall be established at the beginning of each year by the
Company in its sole discretion.  Payment
of the Bonus Incentive Compensation shall be made to Employee within 30 days
following the end of the fiscal year for which such Bonus is paid;


(c)           Annual Dividend
Equivalent Rights (DERs) in an amount equivalent to 20,000 shares (in addition
to the 100,000 DER’s that employee was previously granted), to be paid and
distributed as any other DER or dividend of common stock of IMH..  For the first year of the Agreement, DERs
shall not exceed one (1) dollar per share.


(d)           Employee shall accrue
vacation time during the period he is employed hereunder at the rate of four
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;


(e)           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


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


(g)           Employee will receive
an automobile allowance of $500.00 per month, in lieu of reimbursement for mileage,
gasoline, insurance, or maintenance expenses incurred by Employee in the
performance of his duties..


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           Employee may elect to
defer any portion of his Base Salary or Bonus Incentive Compensation into an
approved, Employer sponsored deferred compensation plan if available; provided
that Employer has no obligation to provide such a deferred compensation plan.
All Base Salary and Bonus Incentive Compensation, whether or not deferred,
shall be



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deemed to be earned and immediately vested upon
distribution to Employee 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
Employee under this Agreement.


3.5           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.


3.6           Employer shall maintain
Directors and Officers insurance, and such coverage shall be substantially
similar to coverage provided by Employer’s affiliates and related entities.


4.             Certain Tax
Matters.


To the extent that this Agreement provides for a
deferral of compensation within the meaning of Section 409A of the Code, the
parties intend that the provisions of this Agreement meet the applicable
requirement of Code Sections 409A(a)(2), (3) and (4) and agree that, to the
extent such applicable requirements are not met, this Agreement shall be
reformed to the extent practicable consistent with its original terms, to avoid
the potential for the imposition of interest or tax under Section 409A.  The Company and Eemployee each agrees to
execute and deliver any reasonable change to this Agreement (other than this
Section) as the Company or Employee requests, after consultation with
respective counsel, to comply with Section 409A of the Code; provided that no
change that increases or reduces the then net economic position of the payments
due to Employee pursuant to this Agreement shall be deemed to be reasonable.


5.             Non-Competition.


5.1           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 18 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 engaged in by Employer (REIT, mortgage banking
and wholesale lending operations for sub prime and Alt-A residential loans or
such other business as Employer may engage in). Notwithstanding the foregoing,
Employee may 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 5.1 shall terminate at the
time of such election.



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5.2           Nothing contained in
Section 5 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.


6.             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.


7.             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 C (the “Proprietary Rights and Inventions
Agreement”).


8.             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.


9.             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.


10.          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



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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 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.


	
  

  	
   

  	
   

  
	
  Employer’s Initials

  	
   

  	
  Employee’s Initials

  



 


11.          Injunctive Relief.


The parties hereto agree that any breach or threatened
breach of Section 5 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 11, and Employee expressly waives any right to
the contrary. Employee agrees that this Section 11 is without prejudice to the
rights of the parties to compel arbitration pursuant to Section 10.


12.          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 



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replaced by the provision of this Agreement; subject
to the following (i) 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 parties hereto agree that in
no event shall an oral modification of this Agreement be enforceable or valid.


13.          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.


14.          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: Sheralee Urbano, Vice-President, Human
  Resources

  
	
   

  	
   

  	
   

  
	
  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

  
	
   

  	
   

  	
   

  
	
  If to Employee:

  	
   

  	
  Ronald Morrison

  40 Silhouette

  Irvine, CA  92603

  



 



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15.          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.


16.          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.


17.          Representations.


The person executing this Agreement on behalf of
Employer hereby represents and warrants on behalf of herself 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.


18.          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.


19.          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



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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.


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


	
  

  	
  “EMPLOYER”

  
	
   

  	
   

  
	
   

  	
  Impac Funding Corp., a California corporation 

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/Joseph R. Tomkinson 

  	
   

  
	
   

  	
   

  	
   Name: Joseph R. Tomkinson 

  
	
   

  	
   

  	
   Title: Chief Executive Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  “EMPLOYEE” 

  
	
   

  	
   

  
	
   

  	
  /s/Ronald Morrison

  	
   

  
	
   

  	
  RONALD MORRISON

  
					



 



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EXHIBIT
A


JOB
DESCRIPTION AND RELATED ENTITIES


Executive Vice President, General Counsel (“General Counsel”),
Impac Funding Corporation


Responsible for
overseeing the Company’s legal issues, including compliance.  For purposes of this Exhibit A, “organization”
means Employer and any affiliates or related entities of Employer for whom
Employer is requested to provide services pursuant to the Employment Agreement
by and between Employer and Employer dated as of June 1, 2006 (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 legal obligations.  Monitor compliance with all applicable laws,
rules, and regulations.  Manage the staff
of exempt and non-exempt employees. 
Perform supervisory duties to include: hiring, cor5rective action,
performance appraisals, salary reviews, counseling, work scheduling, training,
and budgeting.  Oversee Human Resources,
Training, and Client Administration.


Employee
acknowledges, understands and agrees that Employee will be requested by
Employee 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 limit to, the following: Impac Mortgage
Holdings, Inc., Impac Commercial Capital Corp., Impac Warehouse Lending Group,
IMH Assets Corp., Impac Lending Group, Impac Secured Assets Corp., Impac
Mortgage Acceptance 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



 1














 


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 Ronald Morrison (“Employee”) pursuant to the
Employment Agreement between Employer and Employee dated as of June 1, 2006
(the “Employment Agreement”), Employee, on the one part, and Employer 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, 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 or her favor at the time of
executing the release, which if known by him or her must have materially
affected his or her 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. In the event that Employer
materially breaches its severance obligations under the Employment Agreement,
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 breached it obligations.


Employer’s Waiver is conditioned upon Employee’s
performance of all of his obligations pursuant to Section 5.1 of the Employment
Agreement. In the event that Employee materially



 1
 






 



breaches his non-compete obligations under the
Employment Agreement, then Employer 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:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  RONALD MORRISON

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  IMPAC FUNDING CORPORATION 

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Print Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
							



 



 2














 


EXHIBIT
C


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



 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 nonpatentable 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 his rights in an
invention to his or his employer shall not apply to an invention that the
employee developed entirely on his or his own time without using the employer’s
equipment, supplies, facilities, or trade secret information except for those
inventions that either:



 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). 1
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



 3
 






 



extent the following is allowed by the laws in 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 1 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 eighteen 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



 4
 






 



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.


I HAVE READ THIS AGREEMENT CAREFULLY AND I UNDERSTAND AND ACCEPT THE
OBLIGATIONS WHICH IT IMPOSES UPON ME WITHOUT



 5
 






 



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 1 TO THIS AGREEMENT ANY PROPRIETARY INFORMATION AND
INVENTIONS THAT I DESIRE TO EXCLUDE FROM THIS AGREEMENT.


	
  Dated as of: June 1, 2006

  	
   

  	
   

  
	
   

  	
   

  	
  RONALD MORRISON

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Accepted and
  Agreed to:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  IMPAC FUNDING
  CORPORATION, a

  California corporation 

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  	
   

  
					



 



 6














 


EXHIBIT
1


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.


None


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

  
	
   

  	
   

  	
   

  
	
  o

  	
   

  	
  See below:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  o

  	
   

  	
  Additional sheets attached

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  RONALD MORRISON

  



 


TO PROPRIETARY RIGHTS AND
INVENTIONS AGREEMENT



 1














 


EXHIBIT D


IMPAC
MORTGAGE HOLDINGS, INC.


GUARANTY


This Guaranty, dated as of June 1, 2006, is executed
by Impac Mortgage Holdings, Inc., a Maryland corporation (“Guarantor”),
in favor of Ronald Morrison (“Executive”).


A.            Impac Funding Corporation,
a California corporation (“Obligor”), concurrently herewith has entered
into an Employment Agreement with Obligor dated even date herewith (the “Contract”).
Guarantor is the parent corporation of Obligor and will receive direct and
indirect benefits from the performance of the Contract.


B.            Executive’s
willingness to enter into the Contract is subject to receipt by it of this
Guaranty duly executed by Guarantor.


For good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, and intending to be legally bound,
Guarantor hereby agrees with Executive as follows:


1.            Guaranty.


(a)           Guarantor
unconditionally guarantees and promises to pay to Executive, or order, at
Executive’s address set forth in Section 4(a) hereof, on demand after the
default by Obligor, in lawful money of the United States, any and all
Obligations (as hereinafter defined) consisting of payments due to Executive.
For purposes of this Guaranty the term “Obligations” shall mean and
include all payments owed by Obligor to Executive of every kind and
description, direct or indirect, absolute or contingent, due or to become due,
now existing or hereafter arising pursuant to the terms of Sections 2 and 3 of
the Contract (as such Obligations may become due subject to the provisions of
the Contract, including all notice requirements and cure provisions), including
all interest, late fees, charges, expenses, attorneys’ fees and other
professionals’ fees chargeable to Obligor or payable by Obligor there under and
any costs of collection hereunder, including attorneys’ and other professionals’
fees.


(b)           This Guaranty is
absolute, unconditional, continuing and irrevocable and constitutes an
independent guaranty of payment and not of collect ability (provided that it is
subject to Obligor defaulting on any of the Obligations), and is in no way
conditioned on or contingent upon any attempt to enforce in whole or in part
any of Obligor’s Obligations to Executive, the existence or continuance of
Obligor as a legal entity, the consolidation or merger of Obligor with or into
any other entity, the sale, lease or disposition by Obligor of all or
substantially all of its assets to any other entity, or the bankruptcy or
insolvency of Obligor, the admission by Obligor of its inability to pay its
debts as they mature, or the making by Obligor of a general assignment for the
benefit of, or entering into a composition or arrangement with,


INCENTIVE PAY PLAN



 1














 


creditors. If Obligor or
any permitted assignee or successor of Obligor shall fail to pay or perform any
Obligations to Executive which are subject to this Guaranty as and when they
are due, Guarantor shall forthwith pay to Executive all such liabilities or
obligations in immediately available funds. Each failure by Obligor to pay or
perform any such liabilities or obligations shall give rise to a separate cause
of action, and separate suits may be brought hereunder as each cause of action
arises.


(c)           Executive, may (subject
to the provisions of the Contract) at any time and from time to time, without
the consent of or notice to Guarantor, except such notice as may be required by
applicable statute which cannot be waived, without incurring responsibility to Guarantor,
and without impairing or releasing the obligations of Guarantor hereunder, (i)
change the manner, place and terms of payment or change or extend the time of
payment of, renew, or alter any Obligation hereby guaranteed, or in any manner
modify, amend or supplement the terms of the Contract or any documents,
instruments or agreements executed in connection therewith, (ii) exercise or
refrain from exercising any rights against Obligor or others (including
Guarantor) or otherwise act or refrain from acting, (iii) settle or compromise
any Obligations hereby guaranteed and/or any obligations and liabilities
(including any of those hereunder) incurred directly or indirectly in respect
thereof or hereof, and may subordinate the payment of all or any part thereof
to the payment of any obligations and liabilities which may be due to Executive
or others, (iv) sell, exchange, release, surrender, realize upon or otherwise
deal with in any manner or in any order any property pledged or mortgaged by
anyone to secure or in any manner securing the Obligations hereby guaranteed,
(v) take and hold security or additional security for any or all of the
obligations or liabilities covered by this Guaranty, and (vi) assign its rights
and interests under this Guaranty, in whole or in part.


(d)            This is a continuing
Guaranty for which Guarantor receives continuing consideration and all
obligations to which it applies or may apply under the terms hereof shall be
conclusively presumed to have been created in reliance hereon and this Guaranty
is therefore irrevocable without the prior written consent of Executive.


(e)             Guarantor may bring
action to enforce Executive’s obligations under the Contract if (i) any
proceeding is brought against Guarantor to seek enforcement of this Guaranty or
(ii) Guarantor makes any payment to Executive pursuant to this Guaranty.


2.            Representations and
Warranties. Guarantor represents and warrants to Executive that


(a) Guarantor is a
corporation duly organized, validly, existing and in good standing under the
laws of its jurisdiction of incorporation or formation; (b) the execution,
delivery and performance by Guarantor of this Guaranty are within the power of
Guarantor and have been duly authorized by all necessary actions on the part of
Guarantor; (c) this Guaranty has been duly executed and delivered by Guarantor
and constitutes a legal, valid and binding obligation of Guarantor, enforceable
against it in accordance with its terms, except as limited by bankruptcy,
insolvency or other laws of general application relating to or affecting the
enforcement of creditors’ rights generally.










 



3.            Waivers.


(a)            Guarantor, to the
extent permitted under applicable law, hereby waives any right to require
Executive to (i) proceed against Obligor or any other guarantor of Obligor’s
obligations under the Contract, (ii) proceed against or exhaust any security
received from Obligor or any other guarantor of Obligor’s Obligations under the
Contract, or (iii) pursue any other right or remedy in the Executive’s power
whatsoever.


(b)             Guarantor
further waives, to the extent permitted by applicable law, (i) any defense
resulting from the absence, impairment or loss of any right of reimbursement,
subrogation, contribution or other right or remedy of Guarantor against
Obligor, any other guarantor of the Obligations or any security; (ii) any
defense which results from any disability of Obligor or the lack of validity or
enforceability of the Contract; (iii) any right to exoneration of sureties
which would otherwise be applicable; (iv) any right of subrogation or
reimbursement and, if there are any other guarantors of the Obligations, any
right of contribution, and right to enforce any remedy which Executive now has
or may hereafter have against Obligor, and any benefit of, and any right to
participate in, any security now or hereafter received by Executive; (v) all
presentments, demands for performance, notices of non-performance, notices
delivered under the Contract, protests, notice of dishonor, and notices of
acceptance of this Guaranty and of the existence, creation or incurring of new
or additional Obligations and notices of any public or private foreclosure
sale; (vi) any appraisement, valuation, stay, extension, moratorium redemption
or similar law or similar rights for marshalling; and (vii) any right to be
informed by Executive of the financial condition of Obligor or any other
guarantor of the Obligations or any change therein or any other circumstances
bearing upon the risk of nonpayment or nonperformance of the Obligations. Guarantor
has the ability to and assumes the responsibility for keeping informed of the
financial condition of Obligor and any other guarantors of the Obligations and
of other circumstances affecting such nonpayment and nonperformance risks.


4.            Miscellaneous.


(a)           Notices. 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.










 



 


	
  Executive:

  	
   

  	
  Guarantor:

  	 

	
   

  	
   

  	
   

  	 

	
  Ronald Morrison

  	
   

  	
  Impac Mortgage Holdings, Inc.

  	 

	
   

  	
   

  	
  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:

  	
   

  	
  With a copy to:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Ernest W.
  Klatte, III, Esq.

  
	
   

  	
   

  	
  Rutan &
  Tucker, LLP

  
	
   

  	
   

  	
  611 Anton Blvd.,
  14th Floor

  
	
   

  	
   

  	
  Costa Mesa, California 92626

  
	
   

  	
   

  	
  Telephone: (714) 641-5100

  
	
   

  	
   

  	
  Facsimile: (714) 546-9035

  



 


(b)            Nonwaiver. No
failure or delay on Executive’s part in exercising any right hereunder shall
operate as a waiver thereof or of any other right nor shall any single or
partial exercise of any such right preclude any other further exercise thereof
or of any other right.


(c)            Amendments and
Waivers. This Guaranty 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.


(d)            Assignments.
This Guaranty shall be binding upon and inure to the benefit of Executive and
Guarantor and their respective successors and assigns; provided,  however,
that without the prior written consent of Executive, Guarantor may not assign
its rights and obligations hereunder.


(e)            Cumulative Rights,
etc. The rights, powers and remedies of Executive under this Guaranty shall
be in addition to all rights, powers and remedies given to Executive by virtue
of any applicable law, rule or regulation, the Contract or any other agreement,
all of which rights, powers, and remedies shall be cumulative and may be
exercised successively or concurrently without impairing Executive’s rights
hereunder.


(f)             Partial
Invalidity. The provisions of this Guaranty 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.


(g)            Governing Law.
This Guaranty 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.


(h)            Arbitration. To
the fullest extent allowed by law, any controversy, claim or dispute between
Executive and Guarantor (or any of its stockholders, directors, officers,
employees, affiliates, agents, successors or assigns) relating to or arising
out of this Guaranty 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. Guarantor 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 of the Contract, 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.  BY AGREEING TO
THIS MUTUAL AND BINDING ARBITRATION PROVISION, BOTH EXECUTIVE AND GUARANTOR
GIVE UP ALL RIGHTS TO TRIAL BY JURY. This arbitration policy is to be construed
as broadly as is permissible under relevant law. EXECUTIVE AND GUARANTOR HAVE
READ THIS SECTION 4(h) AND IRREVOCABLY AGREE TO ARBITRATE ANY DISPUTE
IDENTIFIED ABOVE.


Executive’s Initials                        Guarantor’s
Initials                       


(i)            Entire Agreement.
This Guaranty contains 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 Guaranty
that are not set forth otherwise herein. This Guaranty supersedes any and all
prior agreements, written or oral, with Guarantor relating to guaranteeing
obligations under the Contract and any other subject matter of this Guaranty.
Any such prior agreements are hereby terminated and of no further effect. The
parties hereto agree that in no event shall an oral modification of this
Agreement be enforceable or valid.


(j)            Counterparts,
Facsimile Signatures. This Guaranty may be executed in any number of counterparts,
each of which shall be deemed an original for all purposes. This Guaranty may
be executed by a party’s signature transmitted by facsimile (“fax”), and copies
of this Guaranty 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 Guaranty by
fax shall promptly thereafter deliver a counterpart signature page of










 



this Guaranty 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 Guaranty as if it were an original signature page.


(k)           Rules of
Construction. This Guaranty 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 Guaranty
to “Sections” refer to Sections of this Guaranty, unless the context expressly
indicates otherwise. References to “provisions” of this Guaranty refer to the
terms, conditions, restrictions and promises contained in this Guaranty. References
in this Guaranty 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 Guaranty 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 Guaranty are solely for the convenience of the parties and do not affect
any provision of this Guaranty.


(1)           No Employment With
Guarantor. Executive understands and agrees that he is an employee of
Obligor pursuant to the Contract. Executive further understands and agrees that
neither this Guaranty nor any obligations performed hereunder shall change any
employee status that Executive may have with Guarantor.


IN WITNESS WHEREOF,
Executive and Guarantor have executed this Guaranty as of the day and year
first above written.


	
   

  	
  GUARANTOR

  
	
   

  	
   

  
	
   

  	
  Impac Mortgage
  Holdings, Inc.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  EXECUTIVE

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Ronald Morrison