Document:

Exhibit
10.1

EMPLOYMENT
AGREEMENT

THIS EMPLOYMENT AGREEMENT
is effective as of November 13, 2006 (“Effective Date”), by and between Impac
Mortgage Holdings, Inc., a Maryland corporation (“Employer”), and Andrew
McCormick, an individual (“Employee”).

RECITALS

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 of employer and any
affiliates or related entities of Employer;

WHEREAS, Employer
proposes to employ Employee as the Executive Vice President, Chief Investment
Officer (“CIO”), Impac Mortgage Holdings, Inc.;

WHEREAS, Employee may
possess 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 his role as CIO for the consolidated entities under
the terms and conditions herein stated.

AGREEMENT

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 Investment Officer (“CIO”) 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 his services by
and subject to the instructions and under the direction of the Employer’s Board
of Directors and to the President (“President”) and/or such persons as the
Board may reasonably designate.

1.2 Employee acknowledges
and agrees that Employee may be required by Employer to devote a portion of his
working time to perform functions for Employer’s affiliates, subsidiaries or
related 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 his ability, experience and
talents perform all of the duties required of him pursuant to the terms of

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this Agreement. Employee
will devote his full business energies and abilities and all of his business
time to the performance of his 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 December 31, 2008, 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), “Cause” shall mean:

(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 any affiliate or related
entity of Employer) or the property entrusted to Employer (or any affiliate or
related entity of Employer) by its clients, including fraud, or embezzlement or
other misappropriation of funds belonging to Employer (or any affiliate or
related entity of Employer) 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 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.

(iii) Employee has engaged in willful misconduct or
gross negligence in connection with his service to Employer (or any affiliate
or related

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entity of Employer) that has caused or is causing
material harm to Employer (or any affiliate or related entity of Employer); or

(iv) Employee’s material breach of any of the terms of
this Agreement or any other obligation that Employee owes to Employer (or any
affiliate or related entity of Employer), 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 Employee
and any affiliate or related entity of Employer)(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 his 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 his 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 he has Good Reason to terminate his 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 his
employment (provided such event is curable) and Employee may not terminate his
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 or
Exhibit A, without Employee’s prior written consent;

(ii) the principal place of the performance of
Employee’s responsibilities and duties is changed to a location outside of the
Washington D.C. metropolitan area, 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;

Good Reason does not include the expiration of the term of this
Agreement on December 31, 2008.

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2.3 Except as set forth
in Section 4, 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 his legal representatives, on
the date of termination of employment (the “Termination Date”) or, with respect
to reimbursement for expenses, as promptly as practical after the Termination
Date, the following:

(a) Such compensation as is due pursuant to Section
3.1 (a) 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, including vacation time, that Employee is entitled to through the
Termination Date

2.4 Except as set forth
in Section 4, 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 his representatives, (i) the amounts set forth in
Section 2.3 at the times set forth in Section 2.3 and (ii) the following
(provided that payments for health insurance coverage shall be made to an
insurance provider), subject to Employee signing and delivering to Employer the
Waiver and Release Agreement required pursuant to Section 2.6:

(a) An additional 12 month’s worth of Base Salary to
be paid proportionally over the 12 month period of time after Employee signs
and delivers to Employer the Waiver and Release Agreement required pursuant to
Section 2.6; and

(b) If Employee is terminated pursuant to Section
2.2(f) or 2.2(g) prior to December 31, 2007, fifty percent (50%) of the Annual Incentive Bonus or $500,000 will be
paid to the Employee as follows: One/twelfth (1/12 of $500,000, or $41,666.66)
will accrue to Employee each month beginning in January, 2007, and all accrued
amounts for any month or partial month before the Termination Date will be paid
to Employee in a lump sum on the Termination Date. The balance of the monthly
payments will be paid to Employee in monthly installments over the remaining
months after Employee signs and delivers to Employer the Waiver and Release
Agreement required pursuant to Section 2.6. As an illustration: If Employee is
terminated pursuant to Section 2.2(f) or 2.2(g) on August 10, 2007, he will be
paid $333,333.28 (8/12 of $500,000) on the Termination Date. The remaining
balance of the $500,000 (or $166,666,72) will be paid as it accrues (i.e.,
assuming he has signed and delivered the Waiver and Release Agreement,
$41,666.68 in September, 2007, $41,666.68 in October, 2007, $41,666.68 in
November, 2007 and $41,666.68 in December, 2007.)

(c) Premiums for continuation of Employee’s health
insurance benefit; under Employer’s group health insurance plan, for the 12
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

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immediately prior to the Termination Date, “Equivalent Coverage”).
Employer agrees to 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 12 month period) Employee remains
eligible for such Equivalent Coverage;

(d) Stock Options to be determined and paid as
follows:

(i)                        For
a period of 12 months after the month in which the Termination Date occurs,
Employee shall remain as employee and will continue to vest in his 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 after the Termination Date. However, upon
Employee notifying the Company of his election to compete or the Company notifying
the Employee of his violation of section 4 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.

(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 Employee understands
and agrees that he shall be exclusively liable for the payment of all taxes
that are due, if any, as a result of his actual or constructive receipt of the
Severance Payments provided for in this Agreement, including, but not limited
to, any taxes and/or penalties resulting from a determination that any portion
of the Severance Payments are taxable as deferred compensation pursuant to
Internal Revenue Code §409A and implementing regulations. Employee agrees fully
to indemnify and hold Company harmless for payment of Employee’s tax
obligations or related penalties as may be required by any federal, state or local
taxing authority, at any time, as a result of the actual or constructive
receipt of the compensation provided for in this Agreement.

2.6 As a condition
precedent of Employee or his 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 his 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

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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.

2.7 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”).

2.8 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.

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 $350,000 per year (“Base Salary”),
payable in equal installments bi-weekly on those days when Employer normally
pays its employees.

(b) A Performance Incentive Bonus and Annual Incentive
Bonus in an amount up to $1,350,000 to be allocated as follows: (i) up to
$175,000 based upon Portfolio Earnings, Portfolio Credit Quality and
Performance Goals; as more fully defined in Section 3.1(b)(i); (ii) up to
$175,000 based upon Individual Management Objectives, as more fully defined in
Section 3.1(b)(ii); and (iii) up to $1,000,000 as an Annual Incentive, as more
fully defined in Section 3.1(b)(iii). The Performance Incentive Bonus
objectives shall be mutually agreed upon by Employee and Employer and shall be
paid within thirty (30) days of each calendar year for which the bonus has been
earned. For the period of November 13, 2006  through
December 31, 2006, the annual Performance Incentive Bonus will be prorated for
the period. The Annual Incentive Bonus will be paid, if earned, within thirty
(30) days of each calendar year end. No prorated payment will be earned for the
period of November 13, 2006 through December 31, 2006.

(i) Portfolio
Earnings, Credit Quality and Performance  Bonus. Up to $175,000 of the Performance Incentive Bonus shall
be based upon Portfolio Earnings, Credit Quality and Performance objectives
which will be mutually agreed upon year by Employee and Employer’s Board of
Directors or their designees in conjunction with the annual business plan of
Employer. The Portfolio Earnings, Credit Quality and Performance bonus shall be
calculated each year by multiplying (i) $175,000 (the maximum attainable
Portfolio Earnings, Credit Quality and Performance Bonus times (ii) the Bonus
Factor based on percentage completion of goals as follows:

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  % Completion of Goals

  	
   

  	
  Bonus Factor

  
	
   

  	
   

  	
   

  
	
  Less than 50%

  	
   

  	
  0%

  
	
  50 to 75%

  	
   

  	
  50%

  
	
  75.01% to 99.99%

  	
   

  	
  75%

  
	
  100% or more

  	
   

  	
  100%

  

(ii) Individual
Management Objectives Bonus. Up to $175,000 of the Performance
Incentive Bonus shall be based upon annual Individual Management Objectives
which will be mutually agreed upon by Employee and Employer’s Board of
Directors or their designees in conjunction with the annual business plan of
Employer. The Individual Management Objectives Bonus shall be calculated each
year by multiplying (i) $175,000 (the maximum attainable Individual Management
Objectives Bonus times (ii) the Bonus Factor based on percentage completion of
goals as follows:

 

	
  % Completion of Goals

  	
   

  	
  Bonus Factor

  
	
   

  	
   

  	
   

  
	
  Less than 50%

  	
   

  	
  0%

  
	
  50 to 75%

  	
   

  	
  50%

  
	
  75.01% to 99.99%

  	
   

  	
  75%

  
	
  100% or more

  	
   

  	
  100%

  

(iii) Annual
Incentive Bonus. Employee is eligible for an additional $1,000,000
Annual Incentive Bonus. Employee shall earn 50% of the $1,000,000 Annual
Incentive Bonus if the taxable income as reported in Employer’s annual audited
financial statements exceeds an annualized rate of $1.15 for the period of
January 1, 2007 through June 30, 2007 and $1.45 for the period of July 1, 2007
through December 31, 2007. The remaining 50% of the Annual Incentive Bonus will
be earned by Employee if he is employed by Employer in good standing (which
shall mean that he is not on written probation by Employer) as of December 31,
2007. For the year ending December 31, 2008, Employee will earn the $1,000,000
Annual Incentive Bonus if the taxable income as reported in IMH’s annual
audited financial statements exceeds for the period of January 1, 2008 through
June 30, 2008 $1.45 and $1.75 for the period of July 1, 2008 through December
31, 2008.

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(c) Stock Options in Employer will be granted and may
be exercised in accordance with company guidelines. Currently, stock awards are
done each year in July.

(d) Employee shall accrue vacation time during the
period he is employed hereunder at the rate of 6.15 hours per bi-weekly pay
period beginning upon completion of 90 days of employment with Employer.
Vacation accrual shall be 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 his accrued time to fall below
the accrual cap). Employee shall be eligible to take paid vacation after six
(6) months of employment. Thereafter, 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.

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. It is understood and agreed that Employee shall be eligible
to travel first or business class airfare for all flights longer than four
hours.

3.3 There shall be no
inflation or any other automatic adjustments to any of the compensation paid to
Employee under this Agreement.

3.4 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.

3.5 Employer shall
maintain Directors and Officers insurance, and such coverage shall be
substantially similar to coverage provided by Employer’s affiliates and related
entities.

3.6 Employer shall
reimburse Employee for up to $10,000 worth of legal fees incurred in negotiating
and documenting this Agreement.

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4.        Non-Competition.

4.1 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 12 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 directly competitive with any activity engaged in
by Employer (REIT, mortgage banking and wholesale lending operations for sub
prime and Alt-A residential loans 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 4.1 shall terminate at the time of such election.

4.2 Nothing contained in
Section 4 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.

5.        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.

6.        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”).

7.        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

8.        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.

9.        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 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 his 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.

 

	
   

  	
  

  	
   

  	
  

  
	
   

  	
  Employer’s Initials

  	
   

  	
  Employee’s Initials

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  

 

10.       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

 10
 

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.

11.      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 and its attachments supersede any and all prior agreements, written
or oral, with Employer relating to Employee’s employment with 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.

12.      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.

13.      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.

 11
 

 

	
  If to Employer:

  	
   

  	
  Impac Mortgage Holdings, Inc.

  
	
   

  	
   

  	
  19500 Jamboree Road, Building 2

  
	
   

  	
   

  	
  Irvine, California 92612

  
	
   

  	
   

  	
  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

  
	
   

  	
   

  	
   

  
	
  If to Employee:

  	
   

  	
  Andrew McCormick

  
	
   

  	
   

  	
  7648 Kindler Road

  
	
   

  	
   

  	
  Laurel, Maryland 20723

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Telephone: (301) 498-3544

  
	
   

  	
   

  	
  Facsimile:

  
	
   

  	
   

  	
   

  
	
  With a copy (not 

  	
   

  	
  Williams & Connolly LLP

  
	
  constituting 

  	
   

  	
  725 Twelfth Street, N.W.

  
	
  notice) to: 

  	
   

  	
  Washing, D.C. 20005

  
	
   

  	
   

  	
  Telephone: (202) 434-5000

  
	
   

  	
   

  	
  Facsimile: (202) 434-5029

  
	
   

  	
   

  	
  Attn: Jacqueline M. Davies, Esq.

  

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.

15.      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.

16.      Representations.

The person executing this
Agreement on behalf of Employer hereby represents and warrants on behalf of
himself and Employer that he is authorized to represent and bind Employer.
Employee specifically represents and warrants to Employer that he is not now
under

 12
 

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 his
obligations under this Agreement, (b) he has had the opportunity to be
represented by legal counsel of his choosing in preparing, negotiating,
executing and delivering this Agreement; and (c) fully understands the terms
and provisions of this Agreement.

17.      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.

18.      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 Mortgage Holdings, Inc., a Maryland

  corporation

  
	
   

  	
   

  
	
   

  	
  By:

  	
  

  
	
   

  	
  Name: Richard J. Johnson

  
	
   

  	
  Title: EVP, COO

  
	
   

  	
   

  

 

 13
 

 

	
  

  	
  “EMPLOYEE”

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Andrew McCormick

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Executive Vice President, CIO

  

 

 14
 

EXHIBIT
A

JOB
DESCRIPTION AND RELATED ENTITIES

The roles and responsibilities of the CIO will be as follows:

Employee’s
responsibilities will include the directing and overseeing of all balance sheet
investment decisions, hedging policy decisions, pipeline hedging risk
management decisions, interest rate risk management and overall securitization
structuring responsibilities. More specifically, Employee will be responsible
for:

·                  Rate
sheet pricing strategies

·                  Pipeline
hedging

·                  Servicing
sales and whole loan executions

·                  Current
balance sheet

·                            Assess
current risk metrics

·                            Evaluate
and adjust hedge strategies

·                            Capital
management Strategies

·                            Development
of a bond portfolio from current securitizations and evaluate other assets that
meet our investment criteria

·                            Evaluate
current assets for retention or sale

·                            Evaluate
alternative hedging strategies for current balance sheet

·                  Mortgage
loan securitization strategies

·                            Hedging
in trust versus outside of trust

·                            CDO/CLO
opportunities

·                            Retaining
selected tranches

·                            Managing
underwriters

Employee will be
responsible for establishing and maintaining a mortgage securities portfolio
management operation in the Washington, D.C., metropolitan area, and the
Company will support Employee in this endeavor. The Employer will invest the
resources required to manage the existing portfolio and build a new portfolio
of mortgage securities, including (a) supporting the staffing levels generally
discussed by the Employee and Employer or otherwise agreed to by them (it being
understood that the personnel hired to establish the Washington, D.C.
metropolitan area operation will be recruited by and managed by the Employee) and
(b) supporting the office set-up and data systems as generally discussed by the
Employee and Employer or otherwise agreed by them.

 15
 

Employee will be the
chairperson of Asset Liability Committee and a senior member of the Executive
Committee. All current Secondary Marketing and Asset Liability personnel will
report directly to Employee, over whom Employee will have hiring/firing
authority, subject to the approval of the President. Employee will also have
hiring/firing authority over all employees in the CIO organization subject to
the approval of the President. Employee will report directly to the President
and/or such other persons as the Board of Directors may reasonably designate.

 

 16

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 Mortgage Holdings, Inc. and any affiliate or related entity of
Impac Mortgage Holdings, Inc. (collectively, “Employer”) to Andrew McCormick (“Employee”)
pursuant to the Employment Agreement between Employer and Employee dated as of
November 13, 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 4.1 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 his
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
or (iv) any rights Employee may have as a shareholder of Employer.

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 his favor at the time of executing the release,
which if known by his must have materially affected his 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.

 1
 

Employer’s Waiver is
conditioned upon Employee’s performance of all of his obligations pursuant to
Section 4.1 of the Employment Agreement. In the event that Employee materially
breaches his non-compete obligations under the Employment Agreement, then
Employer 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 Employee breached his obligations. 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:

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Andrew McCormick

  
	
   

  	
  Executive Vice President, CIO

  

 

	
  Dated:

  	
   

  	
   

  	
  IMPAC MORTGAGE HOLDINGS, INC.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Print Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
							

 

 

 2

EXHIBIT C 

PROPRIETARY
RIGHTS AND INVENTIONS AGREEMENT

In consideration of my
employment by Impac Mortgage Holdings, Inc., 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

 1
 

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

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 or as may be
required by law or legal procedure. 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; (ii) my personal copies of contact information and materials I
had before I became an employee 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 his rights in an
invention to his or his employer shall not apply to an invention that the
employee developed entirely on

 2
 

his or his own time without using the employer’s equipment, supplies,
facilities, or trade secret information except for those inventions that
either:

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
 

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 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 twelve 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.

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.

 4
 

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.

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:

  	
   

  	
  

  
	
   

  	
   

  	
  Andrew McCormick

  
	
   

  	
   

  	
   

  
	
  Accepted and
  Agreed to:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  IMPAC MORTGAGE HOLDINGS,
  INC., a 

  	
   

  	
   

  
	
  Maryland
  Corporation

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Name:

  	
  Richard J. Johnson

  	
   

  
	
   

  	
   

  	
   

  
	
  Title:

  	
  EVP, COO

  	
   

  
						

 

 

 6

EXHIBIT
I

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 Mortgage Holdings, Inc., a Maryland
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.

Broad knowledge base in
mortgages, mortgage originations, mortgage underwriting, all types of mortgage
securitizations, derivatives, credit derivatives, Collateralized Debt and/or
Loan Obligations, other fixed income securities, warehouse financing and
repurchase agreements. Knowledge of and business relationships with lenders,
investors, ratings agencies, securities dealers, and other participants in the
primary and secondary mortgage markets.

	
   

  
	
   

  

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:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Patent outstanding for the development of a scoring
  methodology for agency mortgage backed securities.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Additional sheets attached

  

 

	
  

  	
   

  	
   

  	
  

  
	
   

  	
   

  	
   

  	
  Andrew McCormick

  

 

 

 1Exhibit 10.1

First
Ottawa Bancshares Announces Dividend

Ottawa,
Ill., May 10, 2007 - The Board of Directors of First Ottawa Bancshares,
Inc. (Pink Sheets: FOTB.PK) approved the payment of a $1.00 per share semi
annual cash dividend on the Company’s common stock. The combined $1.00 per
common share cash dividend marks the eleventh consecutive year that this
semiannual payment has been declared.

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