**Exhibit 10.2**

**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”), andRichard J. Johnson, 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.

Intending to belegally 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 Executive Vice President andChief Operating Officer to perform the duties set forth in Exhibit A,attached hereto and, subject to Section 2.2(i), to perform such other duties orfunctions as are reasonably required or may be prescribed from time to time oras otherwise agreed.  Employee shallrender his services by and subject to the instructions and under the directionof Employer’s Chief Executive 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/ William S. Ashmore |   |
|   |   | Name:                      | William S. Ashmore |   |
|   |   | Title:                     | President |   |
|   |   | “EMPLOYEE”       |   |
|   |   | By:                        | /s/ Richard J. Johnson |   |
|   |   |                       | Richard J. Johnson |   |

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**ExhibitA2**

**JOBDESCRIPTION AND RELATED ENTITIES**

Responsible forplanning, coordinating and directing in the operational and financial affairsof the Organization,.  For purposes ofthis Exhibit A2, “Organization” means Employer and any affiliates orrelated entities of Employer for whom Employee is requested to provide servicespursuant to the Employment Agreement, as amended by and between Employer andEmployee dated as of April 1, 2003 (the “Agreement”).  Provide management and the Board of Directorsof Employer and all of the entities within the Organization with meaningful andtimely information regarding the Organization’s operations  performance. Monitor compliance with applicable laws, rules, and regulations relatedto performance of the Organization, and implement and oversee programs designedto ensure such compliance.  Serve on theAsset Liability Committee of Impac Mortgage Holdings, Inc. (“IMH”) andadminister and oversee its interest rate risk management of IMH’s balancesheet.  Recommend and implementasset/liability and tax strategies to improve financial performance.   Provide appropriate financial analysis ofinvestment, merger and acquisition alternatives. Manage the staff of exempt andnon-exempt employees.  Performsupervisory duties to include: hiring, corrective action, performanceappraisals, salary reviews, counseling, work scheduling, training, andbudgeting.  Oversee and manage theOrganization’s information technology (“IT”) department.  Oversee and approve IT projects andallocation of resources and approval of all IT related capitalexpenditures.    In addition he shall beresponsible to perform those duties and functions that are normally consistentwith this position.

In consultationand coordination with the Chief Executive Officer and the Board of Directors ofEmployer and, as the case may be, the Chief Executive Officer and the Board ofDirectors of other entities within the Organization, the COO’s responsibilitiesinclude participating in the oversight, management and administration of thefollowing areas for the Organization, either directly or through supervision ofsenior managers charged with primary responsibility for such areas: finance;personnel; organization and administration; legal compliance; development,promotion and delivery of the Organization’s products and services; planningand budgeting; policy development; evaluate and report on the Organization’sperformance.

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 Commercial 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.

 

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