**EXHIBIT 10.45**

9 May 2007

Todd Simpson

Dear Todd:

Inorder for Ditech to support its current and prospective customers, you haveagreed to an 18 month assignment as part of your role at Ditech Networks, Inc,as Vice President, Marketing, which includes responsibility for all currentfunctions within the Marketing Organization including Product Management,Product Marketing and Marketing Communications.  In fulfilling this rolewe have all agreed that you will transfer, on a temporary basis, from theCalgary, Canada office to our Mountain View, California Headquarters.

Beloware the particulars of the assignment and transfer.

·                  The assignment duration is 1 June 2007through 30 November 2008.

·                  You will continue to report to the Presidentand CEO.

·                  Your base salary will remain C$19187.50* permonth, annualized to C$230, 250. This amount will continue to be paid to youthrough our Canadian Company.

·                  FY 2008 Executive Bonus Program: Subject toapproval by the Compensation Committee of the Board of Directors, you will beeligible to participate in Ditech’s FY 2008 Executive Bonus Program.  For FY 2008, your bonus has a target of 45%of your base salary (amount paid if all aspects of the plan are achieved).  The actual bonus payout will be determined bycorporate performance against revenue and profit targets, as well as individualand corporate achievement against specific established goals.  The actual bonus payout will be determined atthe end of the fiscal year (and also require approval from the CompensationCommittee of the Board of Directors). This program is reviewed annually and may be modified or cancelled atany time at the discretion of the CEO & President and/or the Board ofDirectors.

·                  As part of the transfer, we welcome you tomove your immediate family (spouse and two children) to the Mountain View areafor the 13 month period of July 2007 through July 2008.  When your family is not in residence(relocated to Mountain View), Ditech will supply you with lodging.  It is also understood that you will bebringing your personal vehicles from Canada (travel reimbursement subject tolimits shown below).

·                  In addition to your benefits provided as anemployee of our Canadian company, your benefit package in the United Stateswill include private health, dental and vision insurance coverage beginningJuly 1, 2007 or sooner as your family relocation dictates.

·                  Relocation Assistance – For so long as youare employed by Ditech Networks, Inc, we will pay for the following inconnection with the above 13 month relocation, to assist with the move fromCalgary, Canada to the Mountain View area in California.  Ditech will provide you with coverage forexpenses for the July 2007 through July 2008 time period (13 months), bycategory up to the limits as shown:
| · | Monthly housing  allowance $8,000/month     |   | $      | 104,000 |   |
|--------|---------------------------------------------|--------|--------|---------|--------|
| · | Monthly family travel  (ongoing) $500/month |   | 6,500  |    |
| · | Shipment of goods  (round trip)             |   | 16,000 |    |

 

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| · | Relocation travel for  four (round trip) |   | 3,000  |   |
|--------|------------------------------------------|--------|--------|--------|
| · | Vehicle smog upgrade  & registration |   | 6,000  |   |
| · | US tax returns                           |   | 5,000  |   |
| · | Tax cost for  equalization               |   | 47,000 |   |
| · | Miscellaneous Expenses                   |   | 10,000 |   |

 

·                  In accepting the housing allowance and relocationof goods payments you agree to provide insurance coverage sufficient to coverall replacement costs, as well as liability coverage appropriate for thecircumstance.

·                  Thechanges and transfer shall commence as mutually agreed once your US work and residencevisas are approved.

Youfurther agree that employment with Ditech is at-will. Employment at-will meansthat either Ditech or the employee can terminate the employment relationship atany time for any or no reason.

If,however, the reason for termination is due to your conduct that was knowinglyfraudulent or deliberately dishonest or that constituted willful misconduct, or2) on account of conduct that constituted a breach of your duty of loyalty toDitech or resulted in any personal profit or advantage to which you were notlegally entitled, then, all payments and benefits outlined in this agreementwill cease immediately, as will all other Ditech Inc. plans and benefits.

Shouldyour employment with Ditech Inc. be terminated at Ditech’s convenience (not forcause) we agree: 1) To the extent allowed under US immigration law, to continueto pay you and your monthly housing expenses, as shown above, until yourchildren have completed their school year here, 2) Your relocation benefits toallow you to relocate back to your home in Canada will be paid in accordancewith the agreement as shown above, 3) And to provide tax assistance in the formof US Tax returns and tax equalization for the period of time you worked in theUS.

Theother terms and conditions of your employment remain the same.
| Sincerely,                    |   | Accepted by:              |             |                                           |
|-------------------------------|--------|---------------------------|------------------|------------------------------------------------|
|                          |   |                      |             |                                           |
|                          |   |                      |             |                                           |
| /s/ Lowell  Trangsrud         |   |                      | /s/ Todd Simpson |                                           |   |        June 4,  2007    |
| Lowell Trangsrud              |   | Todd Simpson              |             |        Date |
| Executive Vice  President and |   | Vice President, Marketing |             |                                           |
| Chief Operating  Officer      |   |                      |             |                                           |
|                               |        |                           |                  |                                                |  |  |

 

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* This amount may bechanged through the usual and customary salary review process and approved bythe Board of Directors of the Company.

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