Document:

Employment Agmt. by and between Szyptek and ECC Capital Corp.

 Exhibit 10.46 
  
 EMPLOYMENT AGREEMENT 
  
 THIS EMPLOYMENT AGREEMENT (“Agreement”) is made and entered into as of
                    , 2005 (the “Effective Date”) by and between ECC Capital Corporation (the “Company” or
“Encore”) and Steven Szyptek (“Executive”). 
  
 WHEREAS, Executive is currently employed by Encore Credit Corp.; 
  
 WHEREAS, the Company intends to effect a transaction in which a wholly-owned subsidiary of the Company. (“Merger Sub”), a wholly-owned subsidiary of Encore Credit Corp., will merge with and into Encore
Credit Corp., with Encore Credit Corp. as the surviving entity (the “Transaction”). Following the merger between Encore Credit Corporation and Merger Sub, Encore Credit Corp. will become a wholly-owned subsidiary of ECC Capital
Corporation; 
  
 WHEREAS, the Company and Executive (the
“Parties”) wish to ensure the Company’s access to Executive’s continued services, and the terms on which those services will be provided; 
  
 THEREFORE, the Parties agree as follows: 
  

	1.	EMPLOYMENT 

  
 The Company hereby employs Executive and Executive hereby accepts employment upon the terms and conditions set forth below. 
  

	2.	TERM 

  
 2.1 Term. The term of this Agreement shall commence on                     
    , 2005 the (“Effective Date”), and shall continue on the terms and conditions set forth below, until Executive’s employment is terminated as provided in Section 5 (the “Term”). 
  

	3.	COMPENSATION 

  
 3.1 Base Compensation. Executive shall be paid a salary at the annual rate of
$                     (the “Base Compensation”). The Base Compensation shall be reviewed at least annually, and may be increased,
but not decreased. In the event that the Base Compensation is increased, the new salary shall be the Base Compensation for purposes of this Agreement thereafter. 
  
 3.2 Bonus Compensation. The Compensation Committee of the Board of Directors of the Company (the “Compensation
Committee”), or its designee, shall review Executive’s performance on an annual basis and cause the Company to award Executive a cash bonus in an amount which the Compensation Committee or its designee determines in its sole and absolute
discretion.  
  

 3.3 Benefits. The Executive shall be entitled to participate in all pension, 401(k) and other
employee plans and benefits in accordance with the terms of such plans or policies as may be in effect from time to time. 
  
 3.4 Automobile Allowance. The Company shall provide Executive with an automobile allowance of $__________ per month during the term of
Executive’s employment hereunder. 
  
 3.5 Method of
Payment. The monetary compensation payable and any benefits due to Executive hereunder may be paid or provided in whole or in part, from time to time, by the Company and/or its respective parents, subsidiaries and affiliates, but shall at all
times remain the responsibility of the Company. 
  

	4.	POSITION AND DUTIES 

  
 4.1 Position or Duties. Executive shall hold such position and have such duties as assigned to him/her by the Company from time to time.

  
 4.2 Devotion of Time and Effort. Executive shall use
Executive’s good faith best efforts and judgment in performing Executive’s duties as required hereunder and to act in the best interests of the Company. Executive shall devote all of his business time, attention and energies to the
business of the Company. 
  
 4.3 Other Activities.
Executive may engage in other activities for Executive’s own account while employed hereunder, including without limitation, charitable, community and other business activities, provided that in the judgment of the Board of Directors of the
Company (the “Board”) such other activities do not materially interfere with the performance of Executive’s duties hereunder, and do not violate Sections 6 and 7. 
  
 4.4 Vacation. Executive shall be entitled to
             (    ) weeks paid vacation annually. Such vacation shall be subject to the Company’s policies concerning accrual, use and scheduling of
vacation, as such policies may be in effect from time to time. 
  
 4.5 Business Expenses. Executive shall be entitled to reimbursement of reasonable business expenses in accordance with Company policies, as they may be in effect from time to time. 
  

	5.	TERMINATION 

  
 5.1 Due to Death. Executive’s employment shall terminate as of the date of his/her death. 
  
 5.2 Due to Disability. The Company may terminate Executive’s
employment if he/she becomes “disabled”, as defined below, upon written notice to Executive. For purposes of this Agreement, the term “Disability” shall mean a physical or mental incapacity as a result of which Executive becomes
unable to continue to perform the essential functions of the job with or without accommodation hereunder for six consecutive calendar months or for shorter periods 

  

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aggregating 180 business days in any 12 month period, or, if this provision is inconsistent with any applicable law, to the extent not prohibited by law.

  
 5.3 By the Company Without “Cause”. The
Company may terminate Executive’s employment without “Cause” as defined in Section 5.5 below at any time following the Effective Date, upon written notice to Executive. 
  
 5.4 By Executive Without “Good Reason”. Executive may terminate his/her employment hereunder without Good
Reason, as defined in Section 5.6 below, at any time upon written notice to the Company. 
  
 5.5 By The Company For Cause. The Company may terminate Executive’s employment for “Cause” at any time, upon written notice to Executive. For purposes of this Agreement, “Cause” shall
mean: 
  
 (a) Executive’s conviction of or
plea of nolo contender to a felony or any crime involving moral turpitude; 
  
 (b) Executive’s commission of any act of theft, embezzlement or misappropriation against the Company; 
  
 (c) Executive’s failure to substantially perform Executive’s duties hereunder (other than such failure resulting from
Executive’s incapacity due to physical or mental illness), which failure is not remedied within thirty (30) days after written demand for substantial performance is delivered by the Company which specifically identifies the manner in which the
Company believes that Executive has not substantially performed Executive’s duties; or 
  
 (d) Executive’s material breach of his obligations under this Agreement, which breach is not remedied within thirty (30) days after
written notice is delivered by the Company which specifically identifies the breach that the Company believes has occurred. 
  
 5.6 By Executive For Good Reason. Executive may terminate his employment for good reason upon at least thirty (30) days prior written notice to the
Company. For purposes of this Agreement, “Good Reason” shall mean the Company’s material breach of the salary and benefit obligations hereunder and either such breach is incurable or, if curable, has not been cured within fifteen (15)
days following receipt of written notice by Executive to the Company of such breach by the Company. Executive shall be deemed to have waived Executive’s right to terminate for “good reason” with respect to a breach if Executive does
not notify the Company in writing of such breach within fifteen (15) days of such breach, or, if such breach is not immediately known to him, and could not reasonably be expected to be know by him, within fifteen (15) days of his discovery of such
breach. Following a Change in Control, as defined below, “Good Reason” shall also mean: (a) a material reduction in the authority of Executive; (b) Executive’s assignment to a position other than an officer position with the Company
and any of its subsidiaries; or (c) a relocation of Executive’s primary office location outside of Orange County, California, without Executive’s prior written consent. The fact that the Company becomes a subsidiary of another entity, or
that the Company’s status changes from publicly-traded to privately-held, as a result of the Change in Control, shall not, by itself, constitute a material reduction in the authority of Executive. In addition, provided that Executive remains

  

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employed by the Company for ninety (90) days following a Change in Control, during the thirty (30) days following the ninety (90) day period after the Change
in Control, if Executive elects to terminate his employment with the Company for any reason or no reason, he shall be deemed to have “Good Reason”. 
  
 5.7 Severance Payment. In the event Executive’s employment terminates pursuant to Sections 5.1 (Death), 5.4 (Without Good Reason), or 5.5 (For
Cause), Executive (or Executive’s estate, as applicable) shall have the right to receive Executive’s compensation as otherwise provided under this Agreement through the effective date of termination. Executive shall have no further right
to receive compensation, benefits or other consideration from the Company, and Executive shall not be entitled to any severance payments or benefits, except as required by applicable law. In the event that Executive’s employment is terminated
pursuant to Section 5.2 (Due to Disability), Section 5.3 (Without Cause), or Section 5.6 (For Good Reason), Executive shall continue to render services to the Company pursuant to this Agreement until the date of termination and shall continue to
receive compensation, as provided in this Agreement, through the termination date. Thereafter, Executive shall be entitled to severance pay and benefits as set forth in subparagraph (a) through (c) below, provided that Executive executes and
delivers (and does not revoke, if a revocation period is required by law) a general release of claims in a form acceptable to the Company in its sole and absolute discretion, and is not in material breach of any of the provisions of this Agreement.

  
 (a) Amount. The Company shall pay
Executive an amount equal to 200 percent of Executive’s Base Compensation (collectively, the “Severance Amount”). The Severance Amount shall be subject to withholding under applicable law. The Severance Amount will be paid as follows:
no later than the tenth (10th) business day after Executive delivers a signed general release in the form acceptable
to the Company and returns all company property as required in Section 9.9, twenty-five (25) percent of the Severance Amount shall be paid to Executive; the remaining seventy-five (75) percent of the Severance Amount shall be paid in substantially
equal sums over the following twelve (12) months, in accordance with the Company’s regular payroll practices (the “Severance Payments”). Notwithstanding the foregoing, the Severance Payments shall be delayed to the extent necessary to
comply with Section 409A of the Internal Revenue Code. 
  
 (b) Vesting. In addition to the Severance Payments, any unvested stock options or restricted stock held by Executive shall vest as follows: 1/12th of the unvested stock options and/or restricted stock held by Executive as of the termination date shall vest at the end of each one-month period following the date of termination for the twelve-month
period following the date of termination (the “Vesting”). Any stock option or restricted stock vested in accordance with this Section 5.7(b) shall be exercisable within ninety (90) days following the twelve-month vesting period.

  
 (c) Benefits. In addition to the
Severance Payments and the Vesting, provided that Executive is eligible for and timely elects COBRA healthcare coverage continuation, the Company shall pay the portion of the COBRA premium equal to the difference between the COBRA premium and
Executive’s monthly contribution towards health care benefits immediately prior to the data of termination, for Executive to continue his (and, if applicable, his family’s) health care coverage, which was in effect as of the date of
termination 

  

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for up to eighteen (18) months from the date of termination, provided that Executive (and, if applicable, his family) remains eligible for such coverage (the
“Severance Benefits”). Notwithstanding the foregoing, the Company’s payment of portions of the COBRA premium shall be delayed to the extent necessary to comply with Section 409A of the Internal Revenue Code. 
  
 5.8 Change in Control. 
  
 For purposes of this Agreement, a “Change in Control” shall mean
the occurrence of any of the following events: 
  
 (a) within twenty-four (24) months of the Effective Date, the individuals constituting the Board as of the Effective Date (the “Incumbent Board”) cease for any reason to constitute at least two-thirds (2/3rds) of the Board;
provided, however, that if the election, or nomination for election by the Company’s stockholders, of any new director was approved by a vote of at least two-thirds (2/3rds) of the Incumbent Board, such new director shall be considered a member
of the Incumbent Board; or 
  
 (b) an acquisition
of any voting securities of the Company (the “Voting Securities”) by any “person” (as the term “person” is used for purposes of Section 13(d) or Section 14(d) of the Securities Exchange Act of 1934, as amended (the
“1934 Act”)) immediately after which such person has “beneficial ownership” (within the meaning of Rule 13d-3 promulgated under the 1934 Act) (“Beneficial Ownership”) of 35% or more of the combined voting power of the
Company’s then outstanding Voting Securities; or 
  
 (c) approval by the stockholders of the Company of: 
  
 (i) a merger, consolidation, share exchange or reorganization involving the Company, unless 
  
 (A) the stockholders of the Company, immediately before such merger, consolidation, share exchange or reorganization, own, directly or
indirectly immediately following such merger, consolidation, share exchange or reorganization, at least 80% of the combined voting power of the outstanding voting securities of the corporation that is the successor in such merger, consolidation,
share exchange or reorganization (the “Surviving Company”) in substantially the same proportion as their ownership of the Voting Securities immediately before such merger, consolidation, share exchange or reorganization; provided, however,
that a merger, consolidation, share exchange or reorganization of the Company shall not constitute a “change in control” if such merger, consolidation, share exchange or reorganization of the Company is approved by the Board and is
recommended by Executive to the Board for its approval; and 
  
 (B) the individuals who were members of the Incumbent Board immediately prior to the execution of the agreement providing for such merger, consolidation, share exchange or reorganization constitute at least two-thirds
(2/3rds) of the members of the board of directors of the Surviving Company; or 
  

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 (ii) a complete liquidation or dissolution of the Company; or 
  
 (iii) an agreement for the sale or other disposition of all
or substantially all of the assets of the Company. 
  
 The
Transaction shall not constitute a Change in Control for purposes of this Agreement. 
  
 5.9 Certain Additional Payments. 
  
 (a) Anything in this Agreement to the contrary notwithstanding and except as set forth below, in the event it shall be determined that any Payment would be subject to the Excise Tax, then the Executive shall be entitled to receive an
additional payment (a “Gross-Up Payment”) in an amount equal to the Excise Tax imposed upon the Payments, but not any Excise Tax resulting from the receipt of any Gross-Up Payment. 
  
 (b) Subject to the provisions of Section 5.9(c), all determinations required
to be made under this Section 5.9, including whether and when a Gross-Up Payment is required and the amount of such Gross-Up Payment and the assumptions to be utilized in arriving at such determination, shall be made by the nationally recognized
certified public accounting firm used by the Company immediately prior to the Change in Control or, if such firm declines to serve, such other nationally recognized certified public accounting firm as may be designated by the Executive (the
“Accounting Firm”) which shall provide detailed supporting calculations both to the Company and the Executive within 15 business days of the receipt of notice from the Executive that there has been a Payment, or such earlier time as is
requested by the Company. All fees and expenses of the Accounting Firm shall be borne solely by the Company. Subject to Section 5.9(e) below, any Gross-Up Payment, as determined pursuant to this Section 5.9, shall be paid by the Company to the
Executive within five days of the receipt of the Accounting Firm’s determination. Any determination by the Accounting Firm shall be binding upon the Company and the Executive. For purposes of making the calculations required by this Section
5.9, the Accounting Firm may make reasonable assumptions and approximations concerning applicable taxes and may rely on reasonable, good-faith interpretations concerning the application of Sections 280G and 4999 of the Internal Revenue Code (the
“Code”). As a result of the uncertainty in the application of Section 4999 of the Code at the time of the initial determination by the Accounting Firm hereunder, it is possible that Gross-Up Payments which will not have been made by the
Company should have been made (“Underpayment”), consistent with the calculations required to be made hereunder. In the event that the Company exhausts its remedies pursuant to Section 5.9(c) and the Executive thereafter is required to make
a payment of any Excise Tax, the Accounting Firm shall determine the amount of the Underpayment that has occurred and any such Underpayment shall be promptly paid by the Company to or for the benefit of the Executive. 
  
 (c) The Executive shall notify the Company in writing of any claim by the
Internal Revenue Service that, if successful, would require the payment by the Company of the Gross-Up Payment. Such notification shall be given as soon as practicable but no later than ten business days after the Executive is informed in writing of
such claim and shall apprise the Company of the nature of such claim and the date on which such claim is requested to be paid. The Executive shall not pay such claim prior to the expiration of the 30-day period following the 

  

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date on which it gives such notice to the Company (or such shorter period ending on the date that any payment of taxes with respect to such claim is due). If
the Company notifies the Executive in writing prior to the expiration of such period that it desires to contest such claim, the Executive shall: 
  
 (i) give the Company any information reasonably requested by the Company relating to such claim, 
  
 (ii) take such action in connection with contesting such
claim as the Company shall reasonably request in writing from time to time, including, without limitation, accepting legal representation with respect to such claim by an attorney reasonably selected by the Company, 
  
 (iii) cooperate with the Company in good faith in order
effectively to contest such claim, and 
  
 (iv)
permit the Company to participate in any proceedings relating to such claim; 
  
 provided, however, that the Company shall bear and pay directly all costs and expenses (including additional interest and penalties) incurred in connection with such contest and shall indemnify and hold the Executive harmless, on an
after-tax basis, for any Excise Tax or income tax (including interest and penalties with respect thereto) imposed as a result of such representation and payment of costs and expenses. Without limitation on the foregoing provisions of this Section
5.9(c), the Company shall control all proceedings taken in connection with such contest and, at its sole option, may pursue or forgo any and all administrative appeals, proceedings, hearings and conferences with the taxing authority in respect of
such claim and may, at its sole option, either direct the Executive to pay the tax claimed and sue for a refund or contest the claim in any permissible manner, and the Executive agrees to prosecute such contest to a determination before any
administrative tribunal, in a court of initial jurisdiction and in one or more appellate courts, as the Company shall determine; provided, however, that if the Company directs the Executive to pay such claim and sue for a refund, the Company shall
advance the amount of such payment to the Executive, on an interest-free basis and shall indemnify and hold the Executive harmless, on an after-tax basis, from any Excise Tax or income tax (including interest or penalties with respect thereto)
imposed with respect to such advance or with respect to any imputed income with respect to such advance; and further provided that any extension of the statute of limitations relating to payment of taxes for the taxable year of the Executive with
respect to which such contested amount is claimed to be due is limited solely to such contested amount. Furthermore, the Company’s control of the contest shall be limited to issues with respect to which a Gross-Up Payment would be payable
hereunder and the Executive shall be entitled to settle or contest, as the case may be, any other issue raised by the Internal Revenue Service or any other taxing authority. 
  
 (d) If, after the receipt by the Executive of an amount advanced by the Company pursuant to Section 5.9(c), the Executive
becomes entitled to receive any refund with respect to such claim, the Executive shall (subject to the Company’s complying with the requirements of Section 5.9(c)) promptly pay to the Company the amount of such refund (together with any 

  

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interest paid or credited thereon after taxes applicable thereto). If, after the receipt by the Executive of an amount advanced by the Company pursuant to
Section 5.9(c), a determination is made that the Executive shall not be entitled to any refund with respect to such claim and the Company does not notify the Executive in writing of its intent to contest such denial of refund prior to the expiration
of 30 days after such determination, then such advance shall be forgiven and shall not be required to be repaid in an amount equal to the Gross-Up Payment that the Company would otherwise be required to pay, and the balance of the amount advance
shall be repaid to the Company by Executive within sixty (60) days of such determination. 
  
 (e) Notwithstanding any other provision of this Section 5.9, the Company may withhold and pay over to the Internal Revenue Service for the benefit of the Executive all or any portion of the Gross-Up Payment that it
determines in good faith that it is or may be in the future required to withhold, and the Executive hereby consents to such withholding. 
  
 (f) Notwithstanding the foregoing, if the net amount Executive would realize from any Payment and any Gross-Up Payment after payment of all income,
employment and excise taxes on such Payments and such Gross-Up Payment would be less than the net amount Executive would realize if all Payments were limited to the maximum amount that may be paid to Executive without any portion thereof being an
“excess parachute payment” under Section 280G of the Code, then Executive’s payments and benefits under the Agreement, (and under all other contracts, arrangements, and programs) shall not, in the aggregate, exceed the maximum amount
that may be paid to Executive without any portion thereof being an “excess parachute payment” under Section 280G of the Code, as determined in good faith by the Accounting Firm. The Company shall bear the expense of the Accounting
Firm’s determination. If Executive’s payments and benefits must be reduced to avoid any portion thereof being an “excess parachute payment,” Executive’s payments and benefits shall be reduced in the priority order Executive
designates or, if Executive fails promptly to designate an order, in the priority order designated by the Company. If an amount in excess of the limit set forth in this Section is paid to Executive, Executive shall repay the excess amount to the
Company upon demand, with interest at the rate provided in Section 1274(b)(2)(B) of the Code. Executive and the Company agree to cooperate with each other reasonably in connection with any administrative or judicial proceedings concerning the
existence of payments and benefits (or portions thereof) that are “excess parachute payments” and the amounts thereof. 
  
 (g) Definitions. The following terms shall have the following meanings for purposes of this Section 5.9. 
  
 (i) “Excise Tax” shall mean the excise tax imposed
by Section 4999 of the Code, together with any interest or penalties imposed with respect to such excise tax. 
  
 (ii) A “Payment” shall mean any payment or distribution in the nature of compensation (within the meaning of Section 280G(b)(2)
of the Code) to or for the benefit of the Executive, whether paid or payable pursuant to this Agreement or otherwise. 
  

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 5.10 Vesting Upon Change in Control. 
  
 Notwithstanding the provisions of any plan or agreement to the contrary, upon a Change in Control, all unvested stock
options held by Executive shall be fully vested and exercisable, and all restricted stock held by Executive shall be fully vested. Except as expressly set forth in this Section 5.10, such stock options and restricted stock shall be subject to the
terms of the plans and agreements under which they were issued. 
  

	6.	CONFIDENTIALITY 

  
 During the Term, Executive will have access to and become acquainted with various information relating to the Company’s business operations,
including customer (meaning a broker or borrower) lists, customer files, marketing data, business plans, strategies, employee lists, contracts, financial records and accounts, projections and budgets, and similar information. Executive agrees that
to the extent such information is not generally known to or available to the public and/or the industry, and gives the Company an advantage over competitors who do not know of or use such information, such information and documents constitute
“Confidential Information” of the Company. Executive further agrees that any documents relating to the business of the Company, whether they are prepared by Executive or come into Executive’s possession in any other way, are owned by
the Company, shall remain the exclusive property of the Company, and must be returned to the Company upon termination of employment. Executive shall not use any Confidential Information of the Company, directly or indirectly, for Executive’s
own benefit, or the benefit of any person or entity other than the Company, nor shall Executive disclose Confidential Information to any person or entity other than the Company and its employees, either during the Term or at any time thereafter,
except as may be appropriate for Executive to perform his duties as an employee, officer and/or director, directly or indirectly, of the Company. In the event Executive violates this provision during any period in which he is receiving severance
under Section 5.7 of this Agreement, in addition to any other remedies the Company may have, the Company may terminate the Severance Payments, Vesting and Severance Benefits under Section 5.7. 
  

	7.	NON-SOLICITATION/NON-COMPETITION 

  
 7.1 Non-Solicitation. During the Term and for the twelve-month period following the Term, Executive shall not solicit any of the Company’s
employees, agents or independent contractors to end their relationship with the Company, or solicit or otherwise induce any such person to perform services for Executive, or any other person or entity. In the event Executive violates this provision
during any period in which he is receiving severance under Section 5.7 of this Agreement, in addition to any other remedies the Company may have, the Company may terminate the Severance Payments, Vesting and Severance Benefits under Section 5.7.

  
 7.2 Non-Competition. Executive acknowledges that Encore
does business throughout the United States, and that Executive has access to Confidential Information of the Company in the course of performing his duties under this Agreement. In order to protect the legitimate business interests of the Company
and to avoid misuse of its Confidential Information, during the Term, and (i) if Executive’s employment terminates pursuant to Section 5.4 or 5.5, or (ii) if Executive’s employment terminates pursuant to Section 5.2, 5.3 or 5.6 and
Executive is receiving severance under Section 5.7 of this Agreement, for the one-year period after the Term, Executive shall not, directly or indirectly, serve as an employee, 

  

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consultant, officer, director, lender, investor, shareholder, partner, manager or member of any person or entity, or own or act as a sole proprietor of a
business that engages in subprime wholesale mortgage lending during that period in any County of the State of California or any of the States of the United States of America, other than the Company or its affiliates, or as approved in advance in
writing by the Board; provided, however, that ownership of less than one (1) percent of the publicly traded securities of any publicly traded entity shall not violate this provision. In the event Executive violates this provision during any period
in which he is receiving severance under Section 5.7 of this Agreement, in addition to any other remedies the Company may have, the Company may terminate the Severance Payments, Vesting and Severance Benefits under Section 5.7. 
  

	8.	ARBITRATION AGREEMENT 

  
 8.1 Claims Subject to Arbitration. Any controversy, dispute or claim between Executive and the Company, or its parents, subsidiaries, affiliates
and any of their officers, directors, agents or other employees, shall be resolved by binding arbitration, at the request of either party. 
  
 The arbitrability of any controversy, dispute or claim under this policy shall be determined by application of the substantive provisions of the Federal
Arbitration Act (9 U.S.C. sections 1 and 2) and by application of the procedural provisions of the California Arbitration Act, except as provided herein. Arbitration shall be the exclusive method for resolving any dispute and all remedies available
from a court of competent jurisdiction shall be available; provided, however, that either party may request provisional relief from a court of competent jurisdiction, as provided in California Code of Civil Procedure Section 1281.8, if such relief
is not available in a timely fashion through arbitration. 
  
 The
claims which are to be arbitrated include, but are not limited to any Claim arising out of or relating to this Agreement or the employment relationship between Executive and the Company, claims for wages and other compensation, claims for breach of
contract (express or implied), claims for violation of public policy, wrongful termination, tort claims, claims for unlawful discrimination and/or harassment (including, but not limited to, race, religious creed, color, national origin, ancestry,
physical disability, mental disability, gender identity or expression, medical condition, marital status, age, pregnancy, sex or sexual orientation) to the extent allowed by law, and claims for violation of any federal, state, or other government
law, statute, regulation, or ordinance, except for claims for workers’ compensation and unemployment insurance benefits. This Agreement shall not be interpreted to provide for arbitration of any dispute that does not constitute a claim
recognized under applicable law. 
  
 8.2 Selection of
Arbitrator. The Executive and the Company will select a single neutral arbitrator by mutual agreement. If the Executive and the Company are unable to agree on a neutral arbitrator within thirty (30) days of a demand for arbitration, either party
may elect to obtain a list of arbitrators from the Judicial Arbitration and Mediation Service (“AMS”) or the American Arbitration Association (“AAA”), and the arbitrator shall be selected by alternate striking of names from the
list until a single arbitrator remains. The party initiating the arbitration shall be the first to strike a name. 
  

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 8.3 Demand for Arbitration. The demand for arbitration must be in writing and must be made by the
aggrieved party within the statute of limitations period provided under applicable State and/or Federal law for the particular claim(s). Failure to make a written demand within the applicable statutory period constitutes a waiver of the right to
assert that claim in any forum. 
  
 8.4 Location of
Arbitration. Arbitration proceedings will be held in Orange County, California. 
  
 8.5 Choice of Law. The arbitrator shall apply applicable State and/or Federal substantive law to determine issues of liability and damages regarding all claims to be arbitrated, and shall apply the California
Evidence Code to the proceeding. 
  
 8.6 Discovery. The
parties shall be entitled to conduct reasonable discovery and the arbitrator shall have the authority to determine what constitutes reasonable discovery. The arbitrator shall hear motions for summary judgment/adjudication as provided in the
California Code of Civil Procedure. 
  
 8.7 Written Opinion and
Award. Within thirty days following the hearing and the submission of the matter to the arbitrator, the arbitrator shall issue a written opinion and award which shall be signed and dated. The arbitrator’s award shall decide all issues
submitted by the parties, and the arbitrator may not decide any issue not submitted. The opinion and award shall include factual findings and the reasons upon which the decision is based. The arbitrator shall be permitted to award only those
remedies in law or equity which are requested by the parties and allowed by law. 
  
 8.8 Appeals. The final award may be appealed to another arbitrator who will be chosen by the parties in the same manner as the original arbitrator. All the rules governing judicial appeals of judgments from the
Superior Court of the State of California shall apply to any appeal of this award, including but not limited to the time frames, deadlines and the standards of review. 
  
 8.9 Costs of Arbitration. The cost of the arbitrator and other incidental costs of arbitration that would not be
incurred in a court proceeding shall be borne by the Company. The parties shall each bear their own costs and attorneys’ fees in any arbitration proceeding, provided, however, that the arbitrator shall have the authority to require either party
to pay the costs and attorneys’ fees of the other party to the extent permitted under applicable federal or state law, as a part of any remedy that may be ordered. 
  
 8.10 Waiver of Right to Jury. Both the Company and Executive understands that by using arbitration to resolve
disputes they are giving up any right that they may have to a judge or jury trial with regard to all issues concerning employment or otherwise covered by this Section 8. 
  

	9.	GENERAL PROVISIONS 

  
 9.1 Assignment; Binding Effect. Neither the Company nor Executive may assign, delegate or otherwise transfer this Agreement or any of their
respective rights or obligations hereunder without the prior written consent of the other party; provided, however, that the Company may assign its rights and obligations under this Agreement for ECC Capital Corp. 

  

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without the prior written consent of Executive. Any attempted prohibited assignment or delegation shall be void. This Agreement shall be binding upon and
inure to the benefit of any permitted successors or assigns of the parties and the heirs, executors, administrators and/or personal representatives of Executive. 
  
 9.2 Notices. All notices, requests, demands and other communications that are required or may be given under this
Agreement shall be in writing and shall be deemed to have been duly given when received if personally delivered; when transmitted if transmitted by telecopy, electronic or digital transmission method with electronic confirmation of receipt; the day
after it is sent, if sent for next-day delivery to a domestic address by recognized overnight delivery service (e.g., FedEx); and upon receipt, if sent by certified or registered mail, return receipt requested. In each case notice shall be
sent to: 
  

			
	If to the Company:	  	 ECC Capital Corp.
 1833 Alton Parkway
 Irvine, California 92606
 Attention: Chairman, Compensation
Committee
 Facsimile:

		
	If to Executive:	  	 Steven Szyptek
 1833 Alton Parkway
 Irvine, California 92606
 Phone: 949-856-8300
 Fax: 949-221-9523

  
 Any party may change
its address for the purpose of this Section 9.2 by giving the other party written notice of its new address in the manner set forth above. 
  
 9.3 Entire Agreement. This Agreement constitutes the entire agreement of the Parties with respect to the subject matter hereof, and supersedes all
prior agreements, including without limitation that certain Employment Agreement dated as of November 1, 2004 and that certain offer letter dated as of October 6, 2004; provided, however, that this Agreement shall supplement, not supercede, any
prior agreements concerning the Confidential Information, Trade Secrets or other intellectual property of the Company, and any conflicts or inconsistencies between such agreements shall be resolved so that the provision providing greater rights to
the Company shall prevail. 
  
 9.4 Amendments; Waivers.
This Agreement may be amended or modified, and any of the terms and covenants may be waived, only by a written instrument executed by the parties hereto, or, in the case of a waiver, by the party waiving compliance. Any waiver by any party in any
one or more instances of any term or covenant contained in this Agreement shall neither be deemed to be nor construed as a further or continuing waiver of any such term or covenant of this Agreement. 
  
 9.5 Provisions Severable. In case any one or more provisions of this
Agreement shall be invalid, illegal or unenforceable, in any respect, the validity, legality and enforceability of the remaining provisions contained herein shall not, in any way, be affected or impaired thereby. If 

  

 12 

 
any provision hereof is determined by any court of competent jurisdiction to be invalid or unenforceable by reason of such provision extending the covenants
and agreements contained herein for too great a period of time or over too great a geographical area, or being too extensive in any other respect, such provision shall be interpreted to extend only over the maximum period of time and geographical
area, and to the maximum extent in all other respects, as to which it is valid and enforceable, all as determined by such court in such action. 
  
 9.6 Attorney’s Fees. If any legal action, arbitration or other proceeding, is brought for the enforcement of this Agreement, or because of an
alleged dispute, breach or default in connection with any of the provisions of this Agreement, each of the parties hereto shall be responsible for payment of their own attorneys’ fees and other costs incurred by them in that action or
proceeding, without regard to whomever is the prevailing party in such action or proceeding with respect to such claims, except as otherwise provided in Section 8. 
  
 9.7 Governing Law. This Agreement shall be construed, performed and enforced in accordance with, and governed by the
laws of the State of California without giving effect to the principles of conflict of laws thereof. 
  
 9.8 Non-Disparagement. During his/her employment and thereafter, Executive agrees to represent the Company in a positive light and not to disparage
or in any other way communicate to any person or entity any negative information or opinion concerning the Company, its parents, subsidiaries and affiliates, or any of their partners, members, shareholders, officers, directors, employees or agents,
or any of them. This provision shall not prohibit Executive from making any statements or taking any actions required by law, or reporting any actions or inactions Executive believes to be unlawful. This provision shall not be interpreted to require
or encourage Executive to make any misrepresentations. 
  
 9.9
Return of Property. Upon termination of Executive’s employment, Executive shall return to the Company any and all company property, materials, or equipment in his or her possession, including, without limitation, Company property
described in Section 6. 
  
 9.10 Cooperation. During
Executive’s employment with the Company and thereafter, Executive agrees to cooperate with Employer and Employer’s agents, accountants and attorneys concerning any matter with which Executive was involved during his/her employment. Such
cooperation shall include, but not be limited to, providing information to, meeting with and reviewing documents provided by Employer and Employer’s agents, accountants and attorneys during normal business hours or other mutually agreeable
hours upon reasonable notice and to make himself/herself available for depositions and hearings, if necessary and upon reasonable notice. If Executive’s cooperation is required after the termination of Executive’s employment, the Company
shall reimburse Executive for any out of pocket expenses incurred in and any wages lost by Executive for time spent performing his/her obligations hereunder. 
  
 9.11 Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which shall
constitute the same instrument. 
  
 9.12 Headings. The
headings contained in this Agreement are provided solely for the Parties’ convenience and shall not be deemed to alter the meaning of the text of the Agreement. 
  

 13 

 9.13 Survival. Sections 6, 7, 8, and 9 shall survive the termination of this Agreement.

  
 IN WITNESS WHEREOF, the parties hereto have executed this
Agreement effective as of the date first written above. 
  

											
	 THE COMPANY:
	 	 	 	 
			
	 ECC Capital Corporation, a
	 	 	 	 
			
	 Maryland Corporation
	 	 	 	 
					
	By:	 	 	 	 	 	 	 	 
	 	 	 Its:
	 	 	 	 	 	 	 	 Date

			
	 EXECUTIVE:
	 	 	 	 
				
	 	 	 	 	 	 	 
	 Steven Szyptek
	 	 	 	 	 	 Date

  

 14Employment Agmt. by and between Lubushkin and ECC Capital Corp.

 Exhibit 10.47 
  
 EMPLOYMENT AGREEMENT 
  
 THIS EMPLOYMENT AGREEMENT (“Agreement”) is made and entered into as of
                    , 2005 (the “Effective Date”) by and between ECC Capital Corporation (the “Company” or
“Encore”) and Greg Lubushkin (“Executive”). 
  
 WHEREAS, Executive is currently employed by Encore Credit Corp.; 
  
 WHEREAS, the Company intends to effect a transaction in which a wholly-owned subsidiary of the Company. (“Merger Sub”), a wholly-owned subsidiary of Encore Credit Corporation, will merge with and into the
Encore Credit Corporation, with Encore Credit Corp. as the surviving entity (the “Transaction”). Following the merger between Encore Credit Corp. and Merger Sub, Encore Credit Corp. will become a wholly-owned subsidiary of ECC Capital
Corporation; 
  
 WHEREAS, the Company and Executive (the
“Parties”) wish to ensure the Company’s access to Executive’s continued services, and the terms on which those services will be provided; 
  
 THEREFORE, the Parties agree as follows: 
  

	1.	EMPLOYMENT 

  
 The Company hereby employs Executive and Executive hereby accepts employment upon the terms and conditions set forth below. 
  

	2.	TERM 

  
 2.1 Term. The term of this Agreement shall commence on                     
    , 2005 the (“Effective Date”), and shall continue on the terms and conditions set forth below, until Executive’s employment is terminated as provided in Section 5 (the “Term”). 
  

	3.	COMPENSATION 

  
 3.1 Base Compensation. Executive shall be paid a salary at the annual rate of
$                     (the “Base Compensation”). The Base Compensation shall be reviewed at least annually, and may be increased,
but not decreased. In the event that the Base Compensation is increased, the new salary shall be the Base Compensation for purposes of this Agreement thereafter. 
  
 3.2 Bonus Compensation. The Compensation Committee of the Board of Directors of the Company (the “Compensation
Committee”), or its designee, shall review Executive’s performance on an annual basis and cause the Company to award Executive a cash bonus in an amount which the Compensation Committee or its designee determines in its sole and absolute
discretion.  
  

 3.3 Benefits. The Executive shall be entitled to participate in all pension, 401(k) and other
employee plans and benefits in accordance with the terms of such plans or policies as may be in effect from time to time. 
  
 3.4 Automobile Allowance. The Company shall provide Executive with an automobile allowance of
$                     per month during the term of Executive’s employment hereunder. 
  
 3.5 Method of Payment. The monetary compensation payable and any
benefits due to Executive hereunder may be paid or provided in whole or in part, from time to time, by the Company and/or its respective parents, subsidiaries and affiliates, but shall at all times remain the responsibility of the Company.

  

	4.	POSITION AND DUTIES 

  
 4.1 Position or Duties. Executive shall hold such position and have such duties as assigned to him/her by the Company from time to time.

  
 4.2 Devotion of Time and Effort. Executive shall use
Executive’s good faith best efforts and judgment in performing Executive’s duties as required hereunder and to act in the best interests of the Company. Executive shall devote all of his business time, attention and energies to the
business of the Company. 
  
 4.3 Other Activities.
Executive may engage in other activities for Executive’s own account while employed hereunder, including without limitation, charitable, community and other business activities, provided that in the judgment of the Board of Directors of the
Company (the “Board”) such other activities do not materially interfere with the performance of Executive’s duties hereunder, and do not violate Sections 6 and 7. 
  
 4.4 Vacation. Executive shall be entitled to
             (    ) weeks paid vacation annually. Such vacation shall be subject to the Company’s policies concerning accrual, use and scheduling of
vacation, as such policies may be in effect from time to time. 
  
 4.5 Business Expenses. Executive shall be entitled to reimbursement of reasonable business expenses in accordance with Company policies, as they may be in effect from time to time. 
  

	5.	TERMINATION 

  
 5.1 Due to Death. Executive’s employment shall terminate as of the date of his/her death. 
  
 5.2 Due to Disability. The Company may terminate Executive’s
employment if he/she becomes “disabled”, as defined below, upon written notice to Executive. For purposes of this Agreement, the term “Disability” shall mean a physical or mental incapacity as a result of which Executive becomes
unable to continue to perform the essential functions of the job with or without accommodation hereunder for six consecutive calendar months or for shorter periods 

  

 2 

 
aggregating 180 business days in any 12 month period, or, if this provision is inconsistent with any applicable law, to the extent not prohibited by law.

  
 5.3 By the Company Without “Cause”. The
Company may terminate Executive’s employment without “Cause” as defined in Section 5.5 below at any time following the Effective Date, upon written notice to Executive. 
  
 5.4 By Executive Without “Good Reason”. Executive may terminate his/her employment hereunder without Good
Reason, as defined in Section 5.6 below, at any time upon written notice to the Company. 
  
 5.5 By The Company For Cause. The Company may terminate Executive’s employment for “Cause” at any time, upon written notice to Executive. For purposes of this Agreement, “Cause” shall
mean: 
  
 (a) Executive’s conviction of or
plea of nolo contender to a felony or any crime involving moral turpitude; 
  
 (b) Executive’s commission of any act of theft, embezzlement or misappropriation against the Company; 
  
 (c) Executive’s failure to substantially perform Executive’s duties hereunder (other than such failure resulting from
Executive’s incapacity due to physical or mental illness), which failure is not remedied within thirty (30) days after written demand for substantial performance is delivered by the Company which specifically identifies the manner in which the
Company believes that Executive has not substantially performed Executive’s duties; or 
  
 (d) Executive’s material breach of his obligations under this Agreement, which breach is not remedied within thirty (30) days after
written notice is delivered by the Company which specifically identifies the breach that the Company believes has occurred. 
  
 5.6 By Executive For Good Reason. Executive may terminate his employment for good reason upon at least thirty (30) days prior written notice to the
Company. For purposes of this Agreement, “Good Reason” shall mean the Company’s material breach of the salary and benefit obligations hereunder and either such breach is incurable or, if curable, has not been cured within fifteen (15)
days following receipt of written notice by Executive to the Company of such breach by the Company. Executive shall be deemed to have waived Executive’s right to terminate for “good reason” with respect to a breach if Executive does
not notify the Company in writing of such breach within fifteen (15) days of such breach, or, if such breach is not immediately known to him, and could not reasonably be expected to be know by him, within fifteen (15) days of his discovery of such
breach. Following a Change in Control, as defined below, “Good Reason” shall also mean: (a) a material reduction in the authority of Executive; (b) Executive’s assignment to a position other than an officer position with the Company
and any of its subsidiaries; or (c) a relocation of Executive’s primary office location outside of Orange County, California, without Executive’s prior written consent. The fact that the Company becomes a subsidiary of another entity, or
that the Company’s status changes from publicly-traded to privately-held, as a result of the Change in Control, shall not, by itself, constitute a material reduction in the authority of Executive. In addition, provided that Executive remains

  

 3 

 
employed by the Company for ninety (90) days following a Change in Control, during the thirty (30) days following the ninety (90) day period after the Change
in Control, if Executive elects to terminate his employment with the Company for any reason or no reason, he shall be deemed to have “Good Reason”. 
  
 5.7 Severance Payment. In the event Executive’s employment terminates pursuant to Sections 5.1 (Death), 5.4 (Without Good Reason), or 5.5 (For
Cause), Executive (or Executive’s estate, as applicable) shall have the right to receive Executive’s compensation as otherwise provided under this Agreement through the effective date of termination. Executive shall have no further right
to receive compensation, benefits or other consideration from the Company, and Executive shall not be entitled to any severance payments or benefits, except as required by applicable law. In the event that Executive’s employment is terminated
pursuant to Section 5.2 (Due to Disability), Section 5.3 (Without Cause), or Section 5.6 (For Good Reason), Executive shall continue to render services to the Company pursuant to this Agreement until the date of termination and shall continue to
receive compensation, as provided in this Agreement, through the termination date. Thereafter, Executive shall be entitled to severance pay and benefits as set forth in subparagraph (a) through (c) below, provided that Executive executes and
delivers (and does not revoke, if a revocation period is required by law) a general release of claims in a form acceptable to the Company in its sole and absolute discretion, and is not in material breach of any of the provisions of this Agreement.

  
 (a) Amount. The Company shall pay
Executive an amount equal to 100 percent of Executive’s Base Compensation (collectively, the “Severance Amount”). The Severance Amount shall be subject to withholding under applicable law. The Severance Amount will be paid as follows:
no later than the tenth (10th) business day after Executive delivers a signed general release in the form acceptable
to the Company and returns all company property as required in Section 9.9, twenty-five (25) percent of the Severance Amount shall be paid to Executive; the remaining seventy-five (75) percent of the Severance Amount shall be paid in substantially
equal sums over the following twelve (12) months, in accordance with the Company’s regular payroll practices (the “Severance Payments”). Notwithstanding the foregoing, the Severance Payments shall be delayed to the extent necessary to
comply with Section 409A of the Internal Revenue Code. 
  
 (b) Vesting. In addition to the Severance Payments, any unvested stock options or restricted stock held by Executive shall vest as follows: 1/12th of the unvested stock options and/or restricted stock held by Executive as of the termination date shall vest at the end of each one-month period following the date of termination for the twelve-month
period following the date of termination (the “Vesting”). Any stock option or restricted stock vested in accordance with this Section 5.7(b) shall be exercisable within ninety (90) days following the twelve-month vesting period.

  
 (c) Benefits. In addition to the
Severance Payments and the Vesting, provided that Executive is eligible for and timely elects COBRA healthcare coverage continuation, the Company shall pay the portion of the COBRA premium equal to the difference between the COBRA premium and
Executive’s monthly contribution towards health care benefits immediately prior to the data of termination, for Executive to continue his (and, if applicable, his family’s) health care coverage, which was in effect as of the date of
termination 

  

 4 

 
for up to eighteen (18) months from the date of termination, provided that Executive (and, if applicable, his family) remains eligible for such coverage (the
“Severance Benefits”). Notwithstanding the foregoing, the Company’s payment of portions of the COBRA premium shall be delayed to the extent necessary to comply with Section 409A of the Internal Revenue Code. 
  
 5.8 Change in Control. 
  
 For purposes of this Agreement, a “Change in Control” shall mean
the occurrence of any of the following events: 
  
 (a) within twenty-four (24) months of the Effective Date, the individuals constituting the Board as of the Effective Date (the “Incumbent Board”) cease for any reason to constitute at least two-thirds (2/3rds) of the Board;
provided, however, that if the election, or nomination for election by the Company’s stockholders, of any new director was approved by a vote of at least two-thirds (2/3rds) of the Incumbent Board, such new director shall be considered a member
of the Incumbent Board; or 
  
 (b) an acquisition
of any voting securities of the Company (the “Voting Securities”) by any “person” (as the term “person” is used for purposes of Section 13(d) or Section 14(d) of the Securities Exchange Act of 1934, as amended (the
“1934 Act”)) immediately after which such person has “beneficial ownership” (within the meaning of Rule 13d-3 promulgated under the 1934 Act) (“Beneficial Ownership”) of 35% or more of the combined voting power of the
Company’s then outstanding Voting Securities; or 
  
 (c) approval by the stockholders of the Company of: 
  
 (i) a merger, consolidation, share exchange or reorganization involving the Company, unless 
  
 (A) the stockholders of the Company, immediately before such merger, consolidation, share exchange or reorganization, own, directly or
indirectly immediately following such merger, consolidation, share exchange or reorganization, at least 80% of the combined voting power of the outstanding voting securities of the corporation that is the successor in such merger, consolidation,
share exchange or reorganization (the “Surviving Company”) in substantially the same proportion as their ownership of the Voting Securities immediately before such merger, consolidation, share exchange or reorganization; provided, however,
that a merger, consolidation, share exchange or reorganization of the Company shall not constitute a “change in control” if such merger, consolidation, share exchange or reorganization of the Company is approved by the Board and is
recommended by Executive to the Board for its approval; and 
  
 (B) the individuals who were members of the Incumbent Board immediately prior to the execution of the agreement providing for such merger, consolidation, share exchange or reorganization constitute at least two-thirds
(2/3rds) of the members of the board of directors of the Surviving Company; or 
  

 5 

 (ii) a complete liquidation or dissolution of the Company; or 
  
 (iii) an agreement for the sale or other disposition of all
or substantially all of the assets of the Company. 
  
 The
Transaction shall not constitute a Change in Control for purposes of this Agreement. 
  
 5.9 Certain Additional Payments. 
  
 (a) Anything in this Agreement to the contrary notwithstanding and except as set forth below, in the event it shall be determined that any Payment would be subject to the Excise Tax, then the Executive shall be entitled to receive an
additional payment (a “Gross-Up Payment”) in an amount equal to the Excise Tax imposed upon the Payments, but not any Excise Tax resulting from the receipt of any Gross-Up Payment. 
  
 (b) Subject to the provisions of Section 5.9(c), all determinations required
to be made under this Section 5.9, including whether and when a Gross-Up Payment is required and the amount of such Gross-Up Payment and the assumptions to be utilized in arriving at such determination, shall be made by the nationally recognized
certified public accounting firm used by the Company immediately prior to the Change in Control or, if such firm declines to serve, such other nationally recognized certified public accounting firm as may be designated by the Executive (the
“Accounting Firm”) which shall provide detailed supporting calculations both to the Company and the Executive within 15 business days of the receipt of notice from the Executive that there has been a Payment, or such earlier time as is
requested by the Company. All fees and expenses of the Accounting Firm shall be borne solely by the Company. Subject to Section 5.9(e) below, any Gross-Up Payment, as determined pursuant to this Section 5.9, shall be paid by the Company to the
Executive within five days of the receipt of the Accounting Firm’s determination. Any determination by the Accounting Firm shall be binding upon the Company and the Executive. For purposes of making the calculations required by this Section
5.9, the Accounting Firm may make reasonable assumptions and approximations concerning applicable taxes and may rely on reasonable, good-faith interpretations concerning the application of Sections 280G and 4999 of the Internal Revenue Code (the
“Code”). As a result of the uncertainty in the application of Section 4999 of the Code at the time of the initial determination by the Accounting Firm hereunder, it is possible that Gross-Up Payments which will not have been made by the
Company should have been made (“Underpayment”), consistent with the calculations required to be made hereunder. In the event that the Company exhausts its remedies pursuant to Section 5.9(c) and the Executive thereafter is required to make
a payment of any Excise Tax, the Accounting Firm shall determine the amount of the Underpayment that has occurred and any such Underpayment shall be promptly paid by the Company to or for the benefit of the Executive. 
  
 (c) The Executive shall notify the Company in writing of any claim by the
Internal Revenue Service that, if successful, would require the payment by the Company of the Gross-Up Payment. Such notification shall be given as soon as practicable but no later than ten business days after the Executive is informed in writing of
such claim and shall apprise the Company of the nature of such claim and the date on which such claim is requested to be paid. The Executive shall not pay such claim prior to the expiration of the 30-day period following the 

  

 6 

 
date on which it gives such notice to the Company (or such shorter period ending on the date that any payment of taxes with respect to such claim is due). If
the Company notifies the Executive in writing prior to the expiration of such period that it desires to contest such claim, the Executive shall: 
  
 (i) give the Company any information reasonably requested by the Company relating to such claim, 
  
 (ii) take such action in connection with contesting such
claim as the Company shall reasonably request in writing from time to time, including, without limitation, accepting legal representation with respect to such claim by an attorney reasonably selected by the Company, 
  
 (iii) cooperate with the Company in good faith in order
effectively to contest such claim, and 
  
 (iv)
permit the Company to participate in any proceedings relating to such claim; 
  
 provided, however, that the Company shall bear and pay directly all costs and expenses (including additional interest and penalties) incurred in connection with such contest and shall indemnify and hold the Executive harmless, on an
after-tax basis, for any Excise Tax or income tax (including interest and penalties with respect thereto) imposed as a result of such representation and payment of costs and expenses. Without limitation on the foregoing provisions of this Section
5.9(c), the Company shall control all proceedings taken in connection with such contest and, at its sole option, may pursue or forgo any and all administrative appeals, proceedings, hearings and conferences with the taxing authority in respect of
such claim and may, at its sole option, either direct the Executive to pay the tax claimed and sue for a refund or contest the claim in any permissible manner, and the Executive agrees to prosecute such contest to a determination before any
administrative tribunal, in a court of initial jurisdiction and in one or more appellate courts, as the Company shall determine; provided, however, that if the Company directs the Executive to pay such claim and sue for a refund, the Company shall
advance the amount of such payment to the Executive, on an interest-free basis and shall indemnify and hold the Executive harmless, on an after-tax basis, from any Excise Tax or income tax (including interest or penalties with respect thereto)
imposed with respect to such advance or with respect to any imputed income with respect to such advance; and further provided that any extension of the statute of limitations relating to payment of taxes for the taxable year of the Executive with
respect to which such contested amount is claimed to be due is limited solely to such contested amount. Furthermore, the Company’s control of the contest shall be limited to issues with respect to which a Gross-Up Payment would be payable
hereunder and the Executive shall be entitled to settle or contest, as the case may be, any other issue raised by the Internal Revenue Service or any other taxing authority. 
  
 (d) If, after the receipt by the Executive of an amount advanced by the Company pursuant to Section 5.9(c), the Executive
becomes entitled to receive any refund with respect to such claim, the Executive shall (subject to the Company’s complying with the requirements of Section 5.9(c)) promptly pay to the Company the amount of such refund (together with any 

  

 7 

 
interest paid or credited thereon after taxes applicable thereto). If, after the receipt by the Executive of an amount advanced by the Company pursuant to
Section 5.9(c), a determination is made that the Executive shall not be entitled to any refund with respect to such claim and the Company does not notify the Executive in writing of its intent to contest such denial of refund prior to the expiration
of 30 days after such determination, then such advance shall be forgiven and shall not be required to be repaid in an amount equal to the Gross-Up Payment that the Company would otherwise be required to pay, and the balance of the amount advance
shall be repaid to the Company by Executive within sixty (60) days of such determination. 
  
 (e) Notwithstanding any other provision of this Section 5.9, the Company may withhold and pay over to the Internal Revenue Service for the benefit of the Executive all or any portion of the Gross-Up Payment that it
determines in good faith that it is or may be in the future required to withhold, and the Executive hereby consents to such withholding. 
  
 (f) Notwithstanding the foregoing, if the net amount Executive would realize from any Payment and any Gross-Up Payment after payment of all income,
employment and excise taxes on such Payments and such Gross-Up Payment would be less than the net amount Executive would realize if all Payments were limited to the maximum amount that may be paid to Executive without any portion thereof being an
“excess parachute payment” under Section 280G of the Code, then Executive’s payments and benefits under the Agreement, (and under all other contracts, arrangements, and programs) shall not, in the aggregate, exceed the maximum amount
that may be paid to Executive without any portion thereof being an “excess parachute payment” under Section 280G of the Code, as determined in good faith by the Accounting Firm. The Company shall bear the expense of the Accounting
Firm’s determination. If Executive’s payments and benefits must be reduced to avoid any portion thereof being an “excess parachute payment,” Executive’s payments and benefits shall be reduced in the priority order Executive
designates or, if Executive fails promptly to designate an order, in the priority order designated by the Company. If an amount in excess of the limit set forth in this Section is paid to Executive, Executive shall repay the excess amount to the
Company upon demand, with interest at the rate provided in Section 1274(b)(2)(B) of the Code. Executive and the Company agree to cooperate with each other reasonably in connection with any administrative or judicial proceedings concerning the
existence of payments and benefits (or portions thereof) that are “excess parachute payments” and the amounts thereof. 
  
 (g) Definitions. The following terms shall have the following meanings for purposes of this Section 5.9. 
  
 (i) “Excise Tax” shall mean the excise tax imposed
by Section 4999 of the Code, together with any interest or penalties imposed with respect to such excise tax. 
  
 (ii) A “Payment” shall mean any payment or distribution in the nature of compensation (within the meaning of Section 280G(b)(2)
of the Code) to or for the benefit of the Executive, whether paid or payable pursuant to this Agreement or otherwise. 
  

 8 

 5.10 Vesting Upon Change in Control. 
  
 Notwithstanding the provisions of any plan or agreement to the contrary, upon a Change in Control, all unvested stock
options held by Executive shall be fully vested and exercisable, and all restricted stock held by Executive shall be fully vested. Except as expressly set forth in this Section 5.10, such stock options and restricted stock shall be subject to the
terms of the plans and agreements under which they were issued. 
  

	6.	CONFIDENTIALITY 

  
 During the Term, Executive will have access to and become acquainted with various information relating to the Company’s business operations,
including customer (meaning a broker or borrower) lists, customer files, marketing data, business plans, strategies, employee lists, contracts, financial records and accounts, projections and budgets, and similar information. Executive agrees that
to the extent such information is not generally known to or available to the public and/or the industry, and gives the Company an advantage over competitors who do not know of or use such information, such information and documents constitute
“Confidential Information” of the Company. Executive further agrees that any documents relating to the business of the Company, whether they are prepared by Executive or come into Executive’s possession in any other way, are owned by
the Company, shall remain the exclusive property of the Company, and must be returned to the Company upon termination of employment. Executive shall not use any Confidential Information of the Company, directly or indirectly, for Executive’s
own benefit, or the benefit of any person or entity other than the Company, nor shall Executive disclose Confidential Information to any person or entity other than the Company and its employees, either during the Term or at any time thereafter,
except as may be appropriate for Executive to perform his duties as an employee, officer and/or director, directly or indirectly, of the Company. In the event Executive violates this provision during any period in which he is receiving severance
under Section 5.7 of this Agreement, in addition to any other remedies the Company may have, the Company may terminate the Severance Payments, Vesting and Severance Benefits under Section 5.7. 
  

	7.	NON-SOLICITATION/NON-COMPETITION 

  
 7.1 Non-Solicitation. During the Term and for the twelve-month period following the Term, Executive shall not solicit any of the Company’s
employees, agents or independent contractors to end their relationship with the Company, or solicit or otherwise induce any such person to perform services for Executive, or any other person or entity. In the event Executive violates this provision
during any period in which he is receiving severance under Section 5.7 of this Agreement, in addition to any other remedies the Company may have, the Company may terminate the Severance Payments, Vesting and Severance Benefits under Section 5.7.

  
 7.2 Non-Competition. Executive acknowledges that Encore
does business throughout the United States, and that Executive has access to Confidential Information of the Company in the course of performing his duties under this Agreement. In order to protect the legitimate business interests of the Company
and to avoid misuse of its Confidential Information, during the Term, and (i) if Executive’s employment terminates pursuant to Section 5.4 or 5.5, or (ii) if Executive’s employment terminates pursuant to Section 5.2, 5.3 or 5.6 and
Executive is receiving severance under Section 5.7 of this Agreement, for the one-year period after the Term, Executive shall not, directly or indirectly, serve as an employee, 

  

 9 

 
consultant, officer, director, lender, investor, shareholder, partner, manager or member of any person or entity, or own or act as a sole proprietor of a
business that engages in subprime wholesale mortgage lending during that period in any County of the State of California or any of the States of the United States of America, other than the Company or its affiliates, or as approved in advance in
writing by the Board; provided, however, that ownership of less than one (1) percent of the publicly traded securities of any publicly traded entity shall not violate this provision. In the event Executive violates this provision during any period
in which he is receiving severance under Section 5.7 of this Agreement, in addition to any other remedies the Company may have, the Company may terminate the Severance Payments, Vesting and Severance Benefits under Section 5.7. 
  

	8.	ARBITRATION AGREEMENT 

  
 8.1 Claims Subject to Arbitration. Any controversy, dispute or claim between Executive and the Company, or its parents, subsidiaries, affiliates
and any of their officers, directors, agents or other employees, shall be resolved by binding arbitration, at the request of either party. 
  
 The arbitrability of any controversy, dispute or claim under this policy shall be determined by application of the substantive provisions of the Federal
Arbitration Act (9 U.S.C. sections 1 and 2) and by application of the procedural provisions of the California Arbitration Act, except as provided herein. Arbitration shall be the exclusive method for resolving any dispute and all remedies available
from a court of competent jurisdiction shall be available; provided, however, that either party may request provisional relief from a court of competent jurisdiction, as provided in California Code of Civil Procedure Section 1281.8, if such relief
is not available in a timely fashion through arbitration. 
  
 The
claims which are to be arbitrated include, but are not limited to any Claim arising out of or relating to this Agreement or the employment relationship between Executive and the Company, claims for wages and other compensation, claims for breach of
contract (express or implied), claims for violation of public policy, wrongful termination, tort claims, claims for unlawful discrimination and/or harassment (including, but not limited to, race, religious creed, color, national origin, ancestry,
physical disability, mental disability, gender identity or expression, medical condition, marital status, age, pregnancy, sex or sexual orientation) to the extent allowed by law, and claims for violation of any federal, state, or other government
law, statute, regulation, or ordinance, except for claims for workers’ compensation and unemployment insurance benefits. This Agreement shall not be interpreted to provide for arbitration of any dispute that does not constitute a claim
recognized under applicable law. 
  
 8.2 Selection of
Arbitrator. The Executive and the Company will select a single neutral arbitrator by mutual agreement. If the Executive and the Company are unable to agree on a neutral arbitrator within thirty (30) days of a demand for arbitration, either party
may elect to obtain a list of arbitrators from the Judicial Arbitration and Mediation Service (“AMS”) or the American Arbitration Association (“AAA”), and the arbitrator shall be selected by alternate striking of names from the
list until a single arbitrator remains. The party initiating the arbitration shall be the first to strike a name. 
  

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 8.3 Demand for Arbitration. The demand for arbitration must be in writing and must be made by the
aggrieved party within the statute of limitations period provided under applicable State and/or Federal law for the particular claim(s). Failure to make a written demand within the applicable statutory period constitutes a waiver of the right to
assert that claim in any forum. 
  
 8.4 Location of
Arbitration. Arbitration proceedings will be held in Orange County, California. 
  
 8.5 Choice of Law. The arbitrator shall apply applicable State and/or Federal substantive law to determine issues of liability and damages regarding all claims to be arbitrated, and shall apply the California
Evidence Code to the proceeding. 
  
 8.6 Discovery. The
parties shall be entitled to conduct reasonable discovery and the arbitrator shall have the authority to determine what constitutes reasonable discovery. The arbitrator shall hear motions for summary judgment/adjudication as provided in the
California Code of Civil Procedure. 
  
 8.7 Written Opinion and
Award. Within thirty days following the hearing and the submission of the matter to the arbitrator, the arbitrator shall issue a written opinion and award which shall be signed and dated. The arbitrator’s award shall decide all issues
submitted by the parties, and the arbitrator may not decide any issue not submitted. The opinion and award shall include factual findings and the reasons upon which the decision is based. The arbitrator shall be permitted to award only those
remedies in law or equity which are requested by the parties and allowed by law. 
  
 8.8 Appeals. The final award may be appealed to another arbitrator who will be chosen by the parties in the same manner as the original arbitrator. All the rules governing judicial appeals of judgments from the
Superior Court of the State of California shall apply to any appeal of this award, including but not limited to the time frames, deadlines and the standards of review. 
  
 8.9 Costs of Arbitration. The cost of the arbitrator and other incidental costs of arbitration that would not be
incurred in a court proceeding shall be borne by the Company. The parties shall each bear their own costs and attorneys’ fees in any arbitration proceeding, provided, however, that the arbitrator shall have the authority to require either party
to pay the costs and attorneys’ fees of the other party to the extent permitted under applicable federal or state law, as a part of any remedy that may be ordered. 
  
 8.10 Waiver of Right to Jury. Both the Company and Executive understands that by using arbitration to resolve
disputes they are giving up any right that they may have to a judge or jury trial with regard to all issues concerning employment or otherwise covered by this Section 8. 
  

	9.	GENERAL PROVISIONS 

  
 9.1 Assignment; Binding Effect. Neither the Company nor Executive may assign, delegate or otherwise transfer this Agreement or any of their
respective rights or obligations hereunder without the prior written consent of the other party; provided, however, that the Company may assign its rights and obligations under this Agreement for ECC Capital Corp. 

  

 11 

 
without the prior written consent of Executive. Any attempted prohibited assignment or delegation shall be void. This Agreement shall be binding upon and
inure to the benefit of any permitted successors or assigns of the parties and the heirs, executors, administrators and/or personal representatives of Executive. 
  
 9.2 Notices. All notices, requests, demands and other communications that are required or may be given under this
Agreement shall be in writing and shall be deemed to have been duly given when received if personally delivered; when transmitted if transmitted by telecopy, electronic or digital transmission method with electronic confirmation of receipt; the day
after it is sent, if sent for next-day delivery to a domestic address by recognized overnight delivery service (e.g., FedEx); and upon receipt, if sent by certified or registered mail, return receipt requested. In each case notice shall be
sent to: 
  

			
	If to the Company:	  	 ECC Capital Corp.
 1833 Alton Parkway
 Irvine, California 92606
 Attention: Chairman, Compensation
Committee
 Facsimile:

		
	If to Executive:	  	 Greg Lubushkin
 1833 Alton Parkway
 Irvine, California 92606
 Phone: 949-856-8300
 Fax: 949-221-9523

  
 Any party may change
its address for the purpose of this Section 9.2 by giving the other party written notice of its new address in the manner set forth above. 
  
 9.3 Entire Agreement. This Agreement constitutes the entire agreement of the Parties with respect to the subject matter hereof, and supersedes all
prior agreements, including without limitation that certain Employment Agreement dated as of November 1, 2004 and that certain offer letter dated as of October 6, 2004; provided, however, that this Agreement shall supplement, not supercede, any
prior agreements concerning the Confidential Information, Trade Secrets or other intellectual property of the Company, and any conflicts or inconsistencies between such agreements shall be resolved so that the provision providing greater rights to
the Company shall prevail. 
  
 9.4 Amendments; Waivers.
This Agreement may be amended or modified, and any of the terms and covenants may be waived, only by a written instrument executed by the parties hereto, or, in the case of a waiver, by the party waiving compliance. Any waiver by any party in any
one or more instances of any term or covenant contained in this Agreement shall neither be deemed to be nor construed as a further or continuing waiver of any such term or covenant of this Agreement. 
  
 9.5 Provisions Severable. In case any one or more provisions of this
Agreement shall be invalid, illegal or unenforceable, in any respect, the validity, legality and enforceability of the remaining provisions contained herein shall not, in any way, be affected or impaired thereby. If 

  

 12 

 
any provision hereof is determined by any court of competent jurisdiction to be invalid or unenforceable by reason of such provision extending the covenants
and agreements contained herein for too great a period of time or over too great a geographical area, or being too extensive in any other respect, such provision shall be interpreted to extend only over the maximum period of time and geographical
area, and to the maximum extent in all other respects, as to which it is valid and enforceable, all as determined by such court in such action. 
  
 9.6 Attorney’s Fees. If any legal action, arbitration or other proceeding, is brought for the enforcement of this Agreement, or because of an
alleged dispute, breach or default in connection with any of the provisions of this Agreement, each of the parties hereto shall be responsible for payment of their own attorneys’ fees and other costs incurred by them in that action or
proceeding, without regard to whomever is the prevailing party in such action or proceeding with respect to such claims, except as otherwise provided in Section 8. 
  
 9.7 Governing Law. This Agreement shall be construed, performed and enforced in accordance with, and governed by the
laws of the State of California without giving effect to the principles of conflict of laws thereof. 
  
 9.8 Non-Disparagement. During his/her employment and thereafter, Executive agrees to represent the Company in a positive light and not to disparage
or in any other way communicate to any person or entity any negative information or opinion concerning the Company, its parents, subsidiaries and affiliates, or any of their partners, members, shareholders, officers, directors, employees or agents,
or any of them. This provision shall not prohibit Executive from making any statements or taking any actions required by law, or reporting any actions or inactions Executive believes to be unlawful. This provision shall not be interpreted to require
or encourage Executive to make any misrepresentations. 
  
 9.9
Return of Property. Upon termination of Executive’s employment, Executive shall return to the Company any and all company property, materials, or equipment in his or her possession, including, without limitation, Company property
described in Section 6. 
  
 9.10 Cooperation. During
Executive’s employment with the Company and thereafter, Executive agrees to cooperate with Employer and Employer’s agents, accountants and attorneys concerning any matter with which Executive was involved during his/her employment. Such
cooperation shall include, but not be limited to, providing information to, meeting with and reviewing documents provided by Employer and Employer’s agents, accountants and attorneys during normal business hours or other mutually agreeable
hours upon reasonable notice and to make himself/herself available for depositions and hearings, if necessary and upon reasonable notice. If Executive’s cooperation is required after the termination of Executive’s employment, the Company
shall reimburse Executive for any out of pocket expenses incurred in and any wages lost by Executive for time spent performing his/her obligations hereunder. 
  
 9.11 Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which shall
constitute the same instrument. 
  
 9.12 Headings. The
headings contained in this Agreement are provided solely for the Parties’ convenience and shall not be deemed to alter the meaning of the text of the Agreement. 
  

 13 

 9.13 Survival. Sections 6, 7, 8, and 9 shall survive the termination of this Agreement.

  
 IN WITNESS WHEREOF, the parties hereto have executed this
Agreement effective as of the date first written above. 
  

											
	 THE COMPANY:
	 	 	 	 
			
	 ECC Capital Corporation, a
	 	 	 	 
			
	 Maryland corporation
	 	 	 	 
					
	By:	 	 	 	 	 	 	 	 
	 	 	 Its:
	 	 	 	 	 	 	 	 Date

			
	 EXECUTIVE:
	 	 	 	 
				
	 	 	 	 	 	 	 
	 Greg Lubushkin
	 	 	 	 	 	 Date

  

 14

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