Document:

Exhibit 10.6

AETHER HOLDINGS
INC.

1999 ACQUISITION INCENTIVE PLAN

RESTRICTED STOCK GRANT AGREEMENT

May 5, 2006

David Reymann:

Aether Holdings Inc. (“Aether”)
hereby grants you (the “Grant”) under its 1999 Acquisition Incentive Plan (the “Plan”)
50,000 shares of Aether common stock (the “New Shares”), subject to certain
restrictions specified below. While subject to the restrictions, this Agreement
refers to the New Shares as “Restricted Stock.”

The Grant is subject in
all respects to the applicable provisions of the Plan. This Agreement does not
cover all of the rules that apply to the Grant under the Plan, and the
Plan defines any terms in this Agreement that the Agreement does not define.

In addition to the terms
and restrictions in the Plan, the following terms and restrictions apply to the
Grant:

	
  RESTRICTIONS AND FORFEITURE

  	
  You may not sell, assign, pledge, encumber or
  otherwise transfer any interest in the Restricted Stock until the date set
  forth in the Vesting Schedule in Exhibit A (at which point the Restricted
  Stock will be referred to as “Vested”).

  Unless the Administrator determines otherwise at any
  time or Exhibit A provides otherwise, if your service with Aether (or
  its subsidiaries) terminates for any reason before all of your shares of
  Restricted Stock are Vested, then you will forfeit those shares that are
  unvested to the extent that they do not otherwise vest as a result of the
  termination. In addition, any shares that are not Vested as of the date that
  is seven (7) years from the Grant Date (as set forth in Exhibit A)
  shall be forfeited by Executive.
  Any forfeited unvested shares will revert immediately to Aether. You
  will receive no payment for the shares that you forfeit. 

  
	
   

  	
   

  
	
  VESTING SCHEDULE

  	
  Assuming you remain an employee of Aether, all restrictions
  under RESTRICTIONS AND FORFEITURES will lapse on the Restricted Stock upon
  the date of a Trigger Event. The term “Trigger Event” means the date on which
  the Company consummates a Qualifying Acquisition. The term “Qualifying
  Acquisition” shall mean an acquisition by the Company (or a wholly owned
  subsidiary of the Company) of a business (whether in a single transaction or
  a series of related transactions), whether by the purchase of stock or assets
  

  

 

 

 

	
   

  	
  (including by means of a merger), that the Board of
  Directors determines (a) has an appropriate level of historical
  profitability, or strong prospects for appropriate profitability in the near
  term, evaluated in light of the Company’s business objectives and (b) provides
  the Company with a viable platform for the development of a profitable new
  line of business or a new business segment. On the date of the Trigger Event,
  each share of the Restricted Stock will become Vested.

  Notwithstanding anything in this Restricted Stock
  Agreement to the contrary, the Restricted Shares shall become Vested
  immediately (i) upon a Change of Control, as defined in the Plan, or (ii) if
  you are terminated without Cause (as defined in your Employment Agreement,
  dated June 6, 2001, as amended by Amendment No. 1, dated May 5,
  2006 (the “Employment Agreement”), because of Disability (as defined in the
  Employment Agreement), or because of your death or if you terminate your
  employment with Good Reason (as defined in the Employment Agreement).

  You agree and covenant that you will not dispose of
  such Vested New Shares in any manner that is violative of the Company’s
  bylaws, articles, and policies, including but not limited to the Company’s
  insider trading policy, violative of any applicable law, including but not
  limited to applicable state and federal securities laws, and, in any event,
  until the date that any and all information regarding the Trigger Event
  required to be filed with the appropriate governmental agency and made
  publicly available according to federal and state securities laws, NASD rules and
  regulations or any other applicable governing agency or entity is so filed
  and disclosed in the appropriate manner.

  
	
   

  	
   

  
	
  LIMITED STATUS

  	
  You understand and agree that Aether will not
  consider you a stockholder for any purpose with respect to shares of
  Restricted Stock, unless and until such shares have become Vested.

  
	
   

  	
   

  
	
  VOTING

  	
  You may not vote the Restricted Shares unless and
  until such shares become Vested.

  
	
   

  	
   

  
	
  POSSESSION

  	
  While unvested, the Restricted Stock will be held by
  an agent or service provider designated by Aether. After the shares become
  Vested, Aether will direct the transfer of the New Shares to you in book
  entry form (either directly or to a brokerage firm).

  
	
   

  	
   

  
	
  ADDITIONAL CONDITIONS TO RECEIPT

  	
  Aether may postpone issuing and delivering any New
  Shares for so long as Aether determines to be advisable to satisfy the
  following:

  ·      Its completing or amending any
  securities registration or 

  

 

 2
 

 

 

	
   

  	
  qualification
  of the New Shares or its or your satisfying any exemption from registration
  under any federal or state law, rule or regulation;

  ·      Its receiving proof it considers
  satisfactory that a person seeking to receive the New Shares upon your death
  is entitled to do so;

  ·      Your complying with any requests for
  representations under the Plan; and

  ·      Your complying with any federal, state
  or local tax withholding obligations.

  
	
   

  	
   

  
	
  ADDITIONAL REPRESENTATIONS FROM YOU

  	
  If you receive the New Shares at a time when Aether
  does not have a current registration statement under the Securities Act of
  1933, as amended (the “Act”), that covers the issuance of the New Shares to
  you, you must, before Aether will release the New Shares to you:

  ·      represent to Aether, in a manner
  satisfactory to Aether’s counsel, that you are acquiring the New Shares for
  your own account and not with a view to reselling or distributing the New
  Shares, and

  ·      agree that you will not sell, transfer
  or otherwise dispose of the New Shares unless (i) a registration
  statement under the Act is effective at the time of disposition with respect
  to the New Shares you propose to sell, transfer or otherwise dispose of or
  (ii) Aether has received an opinion of counsel or other information and
  representations it considers satisfactory to the effect that, because of
  Rule 144 promulgated under the Act or otherwise, no registration under
  the Act is required.

  
	
   

  	
   

  
	
  ADDITIONAL RESTRICTION

  	
  You will not receive the New Shares if issuing the
  New Shares would violate any applicable federal or state securities laws or
  other applicable laws or regulations.

  
	
   

  	
   

  
	
  NO EFFECT ON EMPLOYMENT OR OTHER RELATIONSHIP

  	
  Nothing in this Restricted Stock Agreement restricts
  Aether’s rights or those of any of its affiliates to terminate your
  employment or other relationship with the Company at any time, with or without
  cause. The termination of employment or other relationship, whether by Aether
  or any of its affiliates or otherwise, and regardless of the reason for such
  termination, has the consequences provided for under the Plan and any
  applicable employment or severance agreement or plan.

  

 

 3
 

 

 

	
  GOVERNING LAW

  	
   

  	
  The laws of the State of Delaware will govern all
  matters relating to this Restricted Stock Agreement, without regard to the
  principles of conflicts of laws thereof.

  
	
   

  	
   

  	
   

  
	
  NOTICES

  	
   

  	
  Notice must be given in writing by personal
  delivery, by certified mail, return receipt requested, by facsimile or by
  overnight delivery. You must send your notice to the Secretary of the Company
  at the address of the Company’s headquarters. The Company will send or
  deliver any notice to be given to you to the address set forth on
  Exhibit A hereto. Both parties hereto may change their respective
  addresses for notice by given the other party appropriate notice hereunder.

  
	
   

  	
   

  	
   

  
	
  PLAN GOVERNS

  	
   

  	
  Wherever a conflict may arise between the terms of
  the Plan and this Restricted Stock Agreement, the terms of the Plan will
  control.

  

 

	
  

  	
   

  	
  COMPANY:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  AETHER HOLDINGS INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /s/ David Oros

  
	
   

  	
   

  	
  David Oros,
  Chairman and Chief Executive Officer

  

 4
 

 

EXHIBIT
A

Recipient Information:

	
  Name:

  	
   

  	
  David Reymann

  
	
   

  	
   

  	
   

  
	
  SSN:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Address:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  

 

Grant Information:

	
  Restricted Shares:

  	
  50,000

  
	
   

  	
   

  
	
  Date of Grant:

  	
  05/05/06

  
	
   

  	
   

  
	
  Vesting Schedule:

  	
  50,000 upon the date of a Trigger Event, subject to
  earlier vesting in accordance with the other terms of the Restricted Stock
  Agreement.

  
	
   

  	
   

  
	
  Grant Expiration Rules:

  	
  You will forfeit any unvested portion of this Grant
  immediately upon the first to occur of (i) the date you cease to be
  employed by the Company, unless such termination is without Cause, because of
  your death or Disability, or with Good Reason, all as described in the
  Restricted Stock Agreement, and (ii) 05/05/13.

  
	
   

  	
   

  
	
  Tax Withholding:

  	
  The Administrator has determined that, as
  contemplated by the terms of the Plan, you may satisfy all or any portion of
  any tax withholding obligation that may arise as a result of the Vesting of
  New Shares by directing the Company to retain shares from the Vested New
  Shares. In such event, the Company shall remit to the applicable taxing
  authorities, on your behalf (as a withheld amount) an amount equal to the
  number of Vested New Shares retained by the Company, multiplied by the fair
  market value of such Vested New Shares on the date of their retention by the
  Company (which shall be the date of vesting of such New Shares). 

  

 

I acknowledge that I
received a copy of the Plan. I represent that I have read and am familiar with
the Plan’s terms. By executing where indicated below, I accept the Grant
subject to all of the terms and provisions of this Restricted Stock Agreement
and of the Plan under which the Grant is made, as the Plan may be amended from
time to time in accordance with its terms. I 

 5
 

 

agree to accept as binding, conclusive and final all
decisions or interpretations of the Administrator concerning any questions
arising under the Plan with respect to the Grant.

	
  

  	
   

  	
  /s/ David Reymann

  
	
   

  	
   

  	
  David Reymann

  
	
   

  	
   

  	
   

  

 

 6Exhibit 10.1

 

EMPLOYMENT AGREEMENT

 

THIS EMPLOYMENT AGREEMENT
is effective as of May 1, 2006 (“Effective Date”), by and between Impac Funding
Corporation, a California corporation (“Employer”), and Gretchen Verdugo, 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, Chief Financial
Officer (“CFO”) 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 her role as CFO 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, Chief Financial Officer (“CFO”) 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 her 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
President and Chief Executive Officer “(CEO”) of Employer, to whom Employee
shall directly report.

 

1.2           Employee
acknowledges and agrees that Employee may be required by Employer to devote a
portion of her working time to perform functions for Employer’s affiliates or
related entities (as set forth in Exhibit A attached hereto) in her role
as CFO 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 her ability,
experience and talents perform all of the duties required of and from her
pursuant to the terms of this Agreement. Employee will devote her full business
energies and abilities and all of her business time to the performance of her
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 April 30, 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, or (B) a felony leading to
incarceration of more than 90 days or the payment of a penalty or fine of
$100,000 or more;

 

(ii)           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 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.

 

2

 

(iii)          Employee
has engaged in willful misconduct or gross negligence in connection with her
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 her 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 her 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 she has Good Reason to
terminate her 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 her employment (provided such event is curable) and
Employee may not terminate her employment for Good Reason on the basis of any
such event that is cured within a reasonable time. “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;

 

3

 

(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 IMH or 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 May 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 her 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), 3.1(b), and 3.1(c)
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 her 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 equivalent to
the health insurance coverage provided by Employer to Employee immediately
prior to the Termination Date, “Equivalent Coverage”).  Employer agrees to

 

4

 

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)           Stock
Grants to be determined and paid as follows:

 

For a period of 18 months
after the month in which the Termination Date occurs, Employee shall remain as
employee and will continue to vest in her stock option, restricted stock grants
or any other form of equity compensations that was previously granted but not vested
at the Termination Date but will not be eligible to receive any new grants or
options after the Termination Date. However, upon Employee notifying the
Company of her election to compete or the Company notifying the Employee of her
violation of section 5.1 of this agreement, then Employee shall no longer be an
Employee of the Company and will no longer continue to vest in the stock
options or other forms of stock grants.

 

(d)           For
a period of 18 months after the Termination Date occurs, Employee shall be paid
a monthly amount equal to the average Bonus Incentive Compensation under
Sections 3.1(b) of this Agreement or similar Bonus Incentive Compensation under
prior Employment Agreements that Employee received during the 18 month period
that preceded the Termination Date.

 

(e)           The
payments set forth in Sections 2.4(a), (b) (c) and (d) 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 her 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 her 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.

 

5

 

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 $450,000 per year (“Base Salary”), payable in equal installments
bi-weekly on those days when Employer normally pays its employees;

 

(b)           Bonus
Incentive Compensation consisting of a discretionary bonus up to 75% of
Employee’s base salary paid during the fiscal year 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.  Bonus Incentive
Compensation) shall be determined each fiscal year by the Company in its sole
discretion by multiplying (i) $337,500 (the maximum attainable Bonus Incentive
Compensation x (ii) the Bonus Factor based on percentage completion of
Individual Management Objectives as follows:

 

	
  %
  Completion of Individual

  Management Objectives

  	
   

  	
  Bonus Factor

  	
   

  
	
  Less than 50%

  	
   

  	
  0

  	
  %

  
	
  50 to 75%

  	
   

  	
  50

  	
  %

  
	
  75.01% to 99.99%

  	
   

  	
  75

  	
  %

  
	
  100% or more

  	
   

  	
  100

  	
  %

  

 

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;

 

6

 

(c)           An
Annual Restricted Stock Grant will be awarded to Employee in the amount of
$300,000 worth of IMH common stock.  The
issuance price of the restricted stock grant will be determined as of the
closing stock price of IMH common stock, as reported on the NYSE, on the date
of such grant. The number of shares granted will be calculated by dividing
$300,000 by the closing stock price for the date of the grant. For example, if
the closing stock price on the date of grant is $10.00, the Employee would
receive 30,000 shares of restricted IMH common stock. Each such restricted
stock grant will vest equally over a three year period. However, during the
vesting period, Employee will be entitled to any and all dividends paid on the
vested and unvested restricted stock grants. The Annual Restricted Stock Grant
will be done each year at the same time that others in the organization are
awarded stock options or restricted stock. Currently, stock awards are done
each year in July. However, in no event shall the first such award per this
agreement be later than December 31, 2006.

 

(d)           Employee
shall accrue vacation time during the period she 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 her 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.

 

(h)           It
is not intended that the Employee will be eligible to participate in other
types of stock option grants of the Employers stock option plan as the Employee
is contractually being awarded Restricted Stock Grants as per this Employment
Agreement.

 

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.

 

7

 

3.3           Employee
may elect to defer any portion of her 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 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.             Continuing
Education.

 

Employee is eligible for
tuition reimbursement for up to $67,000 for the costs associated with obtaining
her MBA degree. The reimbursement will be made after completion of each
semester and is contingent upon Employee obtaining a grade of “B” or better. If
Employee is terminated pursuant to Section 2.2(a), 2.2(c), Employee must
reimburse all amounts paid by the Company on her behalf for Tuition obtaining
her MBA degree. Upon completing and obtaining her degree and if Employee is
still employed by the Company or upon termination based upon 2.2 (f) and (g),
Employee will have no obligation to pay back any monies paid by the Company on
behalf of her obtaining her MBA degree.

 

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 (mortgage REIT, mortgage banking and wholesale lending operations for
sub prime and Alt-A residential loans, commercial or multifamily lending,  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.

 

8

 

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

 

9

 

to the same extent
as would be permitted in a court of law. The arbitrator shall issue a written
decision, and shall have full authority to award all remedies which would be
available in court. The arbitrator shall be required to determine all issues in
accordance with existing case law and the statutory laws of the State of
California. Employer shall pay the arbitrator’s fees and any AAA administrative
expenses. In the event 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 her 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.

 

 

	
  /s/ RJJ

  	
   

  	
  /s/ GV

  
	
  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

 

10

 

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 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: Ronald Morrison, Esq., General Counsel

  
	
   

  	
   

  	
   

  
	
  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

  

 

11

 

	
  If to Employee:

  	
   

  	
  Gretchen Verdugo

  
	
   

  	
   

  	
   

  
	
  With a copy to:

  	
   

  	
  Patricio T.D. Barrera, Esq.

  
	
   

  	
   

  	
  Marcin Barrera LLP

  
	
   

  	
   

  	
  1901 Avenue of the Stars

  
	
   

  	
   

  	
  Suite 1900

  
	
   

  	
   

  	
  Los Angeles, Ca. 90067

  
	
   

  	
   

  	
  Telephone: (310)286-1050

  
	
   

  	
   

  	
  Facsimile: (310)286-1070

  

 

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 she is authorized to represent and bind
Employer.  Employee specifically
represents and warrants to Employer that she 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 her
obligations under this Agreement, (b) she has had the opportunity to be
represented by legal counsel of her 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.

 

12

 

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 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/ Richard J. Johnson

  	
   

  
	
   

  	
   

  	
   

  	
   Name:

  	
  Richard J. Johnson

  	
   

  
	
   

  	
   

  	
   

  	
   Title:

  	
  Chief Operating Officer

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  “EMPLOYEE”  

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /s/ Gretchen Verdugo

  
	
   

  	
   

  	
  GRETCHEN VERDUGO

  
								

 

13

 

EXHIBIT A

 

JOB DESCRIPTION AND RELATED
ENTITIES

 

Executive
Vice President, Chief Financial Officer (“CFO”), Impac Funding Corporation

 

Responsible for planning, coordinating and directing
the financial affairs of the Organization, including the accounting, treasury,
financial planning, reporting, compliance, analysis, and tax functions.  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 May 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 financial performance.  Monitor compliance with all applicable laws,
rules, and regulations related to financial information and financial
performance of the Organization, including tax compliance, and implement and
oversee programs designed to ensure such compliance and responsible for
managing and overseeing the daily operations of the Company’s internal audit
department and their efforts to keep the Company SOX 404 compliant.  Serve on the Asset Liability Committee of
Impac Mortgage Holdings, Inc. (“IMH”) and administer and oversee its interest
rate risk management of IMH’s balance sheet. 
Implement and maintain programs designed to ensure proper management of
the Organization’s liquidity position and that proper cost effective funding is
available to meet the Organization’s objectives.  Recommend and implement asset/liability and
tax strategies to improve financial performance.  Direct a financial planning process for both
next year budgeting and strategic planning purposes.  Provide appropriate financial analysis of
investment, merger and acquisition alternatives and capital raising efforts and
alternatives.  Act as liaison with the
internal and external auditors.  Manage
the staff of exempt and non-exempt employees. 
Perform supervisory duties to include: hiring, corrective action,
performance appraisals, salary reviews, counseling, work scheduling, training,
and budgeting.

 

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
descriptions to additional real estate investment trusts or other entities
which Employer establishes or with which Employer affiliates or becomes related
and for which there exists an agreement with Employer or any of the above
entities to provide such services.

 

1

 

Employee understands and
acknowledges that Employee’s obligations under this Agreement, including
Employee’s duties under Section 5 thereof and the Proprietary Rights and
Inventions Agreement entered into pursuant to Section 7 thereof shall apply and
extend to Employee’s knowledge of the business of Employer’s affiliates or
related entities and any trade secret or other confidential or proprietary
information relating to same.

 

2

 

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 Gretchen Verdugo (“Employee”)
pursuant to the Employment Agreement between Employer and Employee dated as of
May 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 5.1 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 her 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 her favor at the time of executing the release, which if known by her must
have materially affected 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 her obligations pursuant to
Section 5.1 of the Employment Agreement. In the event that Employee materially
breaches her non-compete obligations under the Employment Agreement, then Employer
shall

 

1

 

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 her obligations unless Employer had previously agreed in writing to
waive the provisions of Section 5.1. 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:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  GRETCHEN VERDUGO

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  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 recordings and other printed, typewritten
or handwritten documents, as well as financial models and the like.

 

1

 

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 her rights in an invention to his or her employer
shall not apply to an invention that the employee developed entirely on his or
her 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 Company is entitled to communicate my
obligations under this Agreement to any future employer or potential employer
of mine.

 

4

 

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.

 

5

 

I HAVE READ THIS
AGREEMENT CAREFULLY AND I UNDERSTAND AND ACCEPT THE OBLIGATIONS WHICH IT
IMPOSES UPON ME WITHOUT 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: May 1, 2006

  	
   

  	
   

  
	
   

  	
   

  	
  GRETCHEN VERDUGO

  
	
   

  	
   

  	
   

  
	
  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.

 

 

 

2.             Except
for the complete list of Inventions set forth below, I represent that I (in
whole or in part, either alone or jointly with others) have not made,
conceived, developed or first reduced to practice any Inventions relevant to
the subject matter of my employment with the Company prior to my employment
with the Company or any of its affiliates or related entities.

 

	
   

  	
  No Inventions

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  See below:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Additional sheets attached

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  GRETCHEN VERDUGO

  
				

 

1

 

EXHIBIT D

 

IMPAC
MORTGAGE HOLDINGS, INC.

 

GUARANTY

 

This Guaranty, dated as of May 1, 2006, is executed by
Impac Mortgage Holdings, Inc., a Maryland corporation (“Guarantor”), in
favor of Gretchen Verdugo (“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 Section 2.3, 2.4, 3.1(a), 3.1(b), 3.1(c), or 3.2 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

 

1

 

a general
assignment for the benefit of, or entering into a composition or arrangement
with, 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:

  
	
   

  	
   

  	
   

  
	
   

  	
  Gretchen Verdugo

  	
   

  	
  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

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  And

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Patricio T.D. Barrera, ESQ.

  
	
   

  	
   

  	
  Marcin Barrera LLP

  
	
   

  	
   

  	
  1901 Avenue of the Stars

  
	
   

  	
   

  	
  Suite 1900

  
	
   

  	
   

  	
  Los Angeles, CA 
  90067

  
	
   

  	
   

  	
  Telephone: (310) 286-1050

  
	
   

  	
   

  	
  Facsimile: (310) 286-1070

  

 

(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:

  	
   

  	
   

  
	
   

  	
  Gretchen Verdugo

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