**Exhibit 10.1**

**AMENDMENTNO. 2 TO EMPLOYMENT AGREEMENT**

This AMENDMENT NO.2 TO EMPLOYMENT AGREEMENT (the “Amendment”), is made as of May 1, 2006, by andbetween Impac Funding Corporation, a California Corporation (“Employer”), andWilliam S. Ashmore, an individual (“Employee”). Capitalized terms used herein and not defined shall have the meaningsgiven to them in the Employment Agreement, as amended (the “EmploymentAgreement”), dated as of April 1, 2003, between Employer and Employee.

Intendingto be legally bound hereby, the parties hereto agree to amend the EmploymentAgreement as follows:

1.             Section 1.1 of the Employment Agreement is herebyamended and restated in its entirety as follows:

“1.1  Employer hereby employsEmployee and Employee hereby accepts such employment full-time (subject tothose exceptions, if any, set forth below) as President to perform the dutiesset forth in Exhibit A2, attached hereto and, subject to Section 2.2(i),to perform such other duties or functions as are reasonably required or may beprescribed from time to time or as otherwise agreed.  Employee shall render his services by andsubject to the instructions and under the direction of Employer’s ChiefExecutive Officer to whom Employee shall directly report.”

2.             Exhibit A is hereby amended and replaced in itsentirety with Exhibit A2 attached hereto.

IN WITNESSWHEREOF, this Amendment No. 2 to Employment Agreement is executed as of the dayand year first above written.
|        |   | “EMPLOYER”  IMPAC FUNDING CORPORATION,  a California corporation |
|--------|--------|----------------------------------------------------------------------------|
|   |   | By:                                                                        | /s/ Ron Morrison |
|   |   | Name:                                                                      | Ron Morrison |
|   |   | Title:                                                                     | Executive Vice President and General Counsel |
|   |   | “EMPLOYEE”                                                       |
|   |   | By:                                                                        | /s/ William S. Ashmore |
|   |   |                                                                       | William S. Ashmore |

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**ExhibitA2**

**JOBDESCRIPTION AND RELATED ENTITIES**

Oversee the day today operations of the Organization in support of policies, goals and objectivesestablished by the Chief Executive Officer and the Board of Directors ofEmployer.  Serve on the ExecutiveCommittee and the Asset Liability Committee of Impac Mortgage Holdings,Inc.  For purposes of this Exhibit A,“Organization” means Employer and any affiliates or related entities ofEmployer for whom Employee is requested to provide services pursuant toEmployment Agreement, as amended, by and between Employer and Employee dated asof April 1, 2003 (the “Agreement”). Manage and supervise the Organizations’ senior management in thefollowing areas: credit, sales, finance, secondary marketing, asset liability,and operations and to perform such other duties and functions as are normallyconsistent with this position.

Employeeacknowledges, understands and agrees that Employee will be requested byEmployer to devote some or all of Employee’s time and effort during the term ofemployment pursuant to the Agreement (and consistent with the above jobdescription) to the business of Employer’s affiliates or related entitiespursuant to certain agreements and relationships between and among Employer andsuch 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, ImpacSecured Assets Corp., Impac Mortgage Acceptance Corp., Impac Commercial CapitalCorporation, and Impac Foundation.

Employee furtherunderstands and acknowledges that, pursuant to the Agreement, Employee may bedirected by Employer to provide services consistent with the above jobdescriptions to additional real estate investment trusts or other entitieswhich Employer establishes or with which Employer affiliates or becomes relatedand for which there exists an agreement with Employer or any of the aboveentities to provide such services.

Employeeunderstands and acknowledges that Employee’s obligations under the Agreement,including Employee’s duties under Section 4 thereof, and the Proprietary Rightsand Inventions Agreement entered into pursuant to Section 6 thereof, shallapply and extend to Employee’s knowledge of the business of Employer’saffiliates or related entities and any trade secret or other confidential orproprietary information relating to same.

 

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