Document:

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                                                                   Exhibit 10.18

                           STOCK REDEMPTION AGREEMENT

     This Stock Redemption Agreement (the "Agreement") is made and entered into
as of the 1st day of August, 1999 (the "Effective Date"), by and among
Accredited Home Lenders, Inc., a California corporation (the "Company"),
James A. Konrath, the Chief Executive Officer, a director and the Chairman of
the Board of the Company, and Ray W. McKewon, a director and the Executive
Vice President and Secretary of the Company (Messrs. Konrath and McKewon are
referred to herein individually as "Shareholder" and collectively as
"Shareholders").

                                    RECITALS
                                    --------

     A. Each Shareholder is the owner of over 2,000,000 shares of the common
stock of the Company (the "Shares").

     B. Shareholders acknowledge the importance of attracting and retaining
key employees such as the Company's President and Chief Operations Officer,
Joseph J. Lydon, in order to enhance the value of the Shareholders' Shares.

     C. As part of a compensation package designed to retain the services of
Mr. Lydon, the Company has agreed to grant to Mr. Lydon incentive stock options
(each, an "Option") to acquire 375,000 Shares at an exercise price of $1.50 per
Share and otherwise on similar terms and conditions as all other incentive
stock options previously granted by the Company (the "375,000 Grant"); provided
that Shareholders enter into this Agreement with the Company setting forth the
terms and conditions by which Shares owned by Shareholders shall be redeemed by
the Company upon Mr. Lydon's exercise of options granted pursuant to the 375,000
Grant.

                                    AGREEMENT
                                    ---------

     1. Mandatory Redemption of Stock. On the terms and subject to the
conditions contained in this Agreement, Shareholders and the Company agree that
the Company shall redeem from Shareholders a number of the Shares equal to the
number of Shares of the Company for which Options have been validly exercised
and certificates issued pursuant to the 375,000 Grant, provided that the
aggregate number of shares redeemed by the Company from Shareholders shall not
exceed 200,000.

     2. Date of Redemptions. The term of the Company's right and obligation to
redeem Shares owned by Shareholders under this Agreement shall be concurrent
with the term of the 375,000 Grant, and this Agreement shall terminate and be of
no further force and effect at such time when no Incentive Stock Options under
the 375,000 Grant are outstanding or exercisable or the 375,000 Grant has
expired or been terminated. On any date that Mr. Lydon exercises one or more
Options to purchase Shares under the terms of the 375,000 Grant, the Company
shall be obligated to purchase the same number of

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Shares from Shareholders as hereafter provided, and Shareholders shall be
obligated to sell such Shares to the Company.

     3. Exercise. The Company shall exercise its right and obligation to redeem
the Shares owned by Shareholders by providing written notice to Shareholders
(the "Redemption Notice") which includes the following: (1) the number of Shares
subject to the 375,000 Grant for which Mr. Lydon exercised one or more Options,
and (2) the exercise price therefor paid by Mr. Lydon to the Company.

     4. Redemption. The number of Shares of each Shareholder which shall be
redeemed at any time pursuant to this Agreement shall be one-half (1/2) the
number of Shares issued to Mr. Lydon upon the exercise of Options pursuant to
the 375,000 Grant, up to a maximum of 100,000 shares per Shareholder.

     5. Closing. The closing ("Closing") of any Share redemption shall take
place at the offices of the Company no later than five (5) days after the
Redemption Notice is sent to Shareholders. At any Closing, each Shareholder
shall endorse and deliver to the Company one-half (1/2) of the Shares specified
in the Redemption Notice. The certificates representing such Shares shall be
canceled by the Company, and a new certificate shall be issued to each
Shareholder representing the balance of Shares owned.

     6. Redemption Price. In consideration of the sale and delivery of the
Shares to the Company at any Closing, the Company shall pay to each Shareholder
the product of the number of Shares redeemed from Shareholder multiplied by the
exercise price of the Shares purchased by Mr. Lydon. Except as provided in
Section 9, the redemption price shall be paid in cash or immediately available
funds at each Closing.

     7. Representations and Warranties of Shareholder. For the purposes of
inducing the Company to enter into this Agreement, each Shareholder represents
and warrants to the Company as of the Effective Date and as of each Closing,
that:

          a. Shareholder owns his Shares free and clear of all liabilities,
liens, encumbrances, pledges, trusts, options, covenants, restrictions and
reservations;

          b. So long as all Options granted pursuant to the 375,000 Grant have
not been exercised or terminated, Shareholder shall own a sufficient number of
Shares necessary to satisfy his obligations under this Agreement;

          c. Shareholder has full legal right, power and authority to enter into
this Agreement and transfer the Shares to the Company in accordance with the
terms of this Agreement;

          d. Shareholder shall cause the Company to endorse a stock certificate
evidencing 100,000 of Shareholder's Shares with the following legend:

                                       2

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               THE OWNERSHIP, TRANSFER, ENCUMBRANCE, PLEDGE, ASSIGNMENT, OR
               OTHER DISPOSITION OF THIS CERTIFICATE AND THE SHARES OF STOCK
               REPRESENTED THEREBY, ARE SUBJECT TO THE RESTRICTIONS CONTAINED IN
               A STOCK REDEMPTION AGREEMENT DATED AUGUST 1, 1999, A COPY OF
               WHICH IS ON FILE AT THE OFFICES OF THE COMPANY. TRANSFER OF SAID
               SHARES CANNOT BE MADE EXCEPT UPON COMPLIANCE WITH SUCH
               PROVISIONS, OF WHICH NOTICE IS HEREBY GIVEN. THE COMPANY WILL
               MAIL TO ANY PERSON AFFECTED BY SAID AGREEMENT A COPY THEREOF,
               WITHOUT CHARGE, WITHIN FIVE (5) DAYS AFTER RECEIPT OF WRITTEN
               REQUEST THEREFOR.

     8. Adjustment to Shares. The aggregate numbers of Shares subject to this
Agreement shall be automatically adjusted, without further action by the Company
or Shareholders, to reflect changes in the capitalization of the Company, such
as stock dividends, stock splits, reverse stock splits, subdivisions,
reorganizations or reclassification, or any similar recapitalization that
affects or modifies the number of Shares issued and outstanding at any time.

     9. Prohibition on Payment of Redemption Price. If the funds of the Company
legally available for redemption of the Shares on the relevant Closing date are
insufficient to redeem the total number of Shares to be redeemed on such date,
the Company shall use those funds which are legally available to redeem in cash
the maximum possible number of such Shares, divided equally between
Shareholders. The additional Shares of Shareholders which may not then be paid
for by the Company shall nevertheless be transferred legally and validly by
Shareholders to the Company. At any time thereafter when additional funds of the
Company are legally available for the payment of the Shares for which payment
has not been made by the Company to Shareholders, such funds will immediately be
used to pay the balance (or the maximum portion thereof which may then be
legally paid, divided equally between Shareholders) of the redemption price for
such Shares. Any unpaid redemption price hereunder shall bear interest at the
annualized rate of 10%. Such interest shall be paid on each six-month
anniversary following the first applicable Closing date that the entire
redemption price could not be paid and each subsequent six-month anniversary
date until the overdue redemption price is made in full.

     10. Entire Agreement. This Agreement constitutes the entire agreement
between the parties with respect to the subject matter of this Agreement and
supersedes all prior and contemporaneous understandings and agreements between
the parties. No claim of waiver, modification, or consent to the provisions of
this Agreement shall be made against any party, except on the basis of a written
instrument executed by and on behalf of all parties, except as set forth herein.
The waiver by one party of the performance of any covenant, condition, or
promise shall not invalidate this Agreement, nor shall it be

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considered to be a waiver of any other covenant, condition or promise. The
waiver by any or all parties of the time for performing any act shall not
constitute a waiver of the time for performing any other act or an identical act
required to be performed at a later time.

     11. Governing Law. This Agreement is to be governed by and construed in
accordance with the laws of the State of California.

     12. Attorneys' Fees. If any party employs legal counsel to enforce or bring
an action against another party by reason of the breach of any covenant,
provision or condition of this Agreement, or otherwise arising out of this
Agreement, the unsuccessful party shall pay to the prevailing party its attorney
fees in a reasonable amount, which shall be payable whether or not any action is
prosecuted to judgment.

     13. Notices. All notices, requests, and other communications which are
required or permitted under this Agreement shall be in writing and shall be
deemed to have been given when received by a party at 15030 Avenue of Science,
Suite 100, San Diego, CA 92128, or at such other address as to which a party may
give notice pursuant to this provision.

     14. Further Assurances. Each party agrees to do all acts and things and to
deliver such written instruments that shall be reasonably necessary to carry out
the terms of this Agreement.

     15. Third Parties. This Agreement shall inure to the benefit of the Company
and Shareholders. Nothing in this Agreement, express or implied, shall be
construed as giving any person or entity other than the parties to this
Agreement any right, benefit, remedy, or claim under or in respect to this
Agreement or any provision.

     16. Successors. This Agreement shall be binding upon Shareholders and the
Company and their respective successors and assigns.

     17. Amendments. This Agreement may be amended or terminated only with the
written consent of the Company and Shareholders.

     18. Counterparts. This Agreement may be executed in any number of
counterparts. Each counterpart shall be deemed to be an original, and all such
counterparts shall constitute one and the same instrument.

                            [Signature Page Follows]

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                                   Exhibit B
                                   ---------

                 [Signature Page to Stock Redemption Agreement]

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

                                        ACCREDITED HOME LENDERS, INC.

                                        By: /s/ James A. Konrath
                                            -------------------------------
                                                James A. Konrath
                                                Chief Executive Officer

                                            /s/ James A. Konrath
                                            -------------------------------
                                                JAMES A. KONRATH

                                            /s/ Ray W. McKewon
                                            -------------------------------
                                                RAY W. McKEWON

                              CONSENTS OF SPOUSES
                              -------------------

     I am the spouse of James A. Konrath. On behalf of myself, my heirs and
legatees, I consent to the terms of the Stock Redemption Agreement signed by my
spouse and agree to the redemption of the Shares (as defined in the Stock
Redemption Agreement) registered in the name of my spouse or otherwise
registered upon the terms referenced in the Stock Redemption Agreement.

Dated as of August 1, 1999

                                            /s/ Joanne B. Konrath
                                            -------------------------------
                                                JOANNE B. KONRATH

     I am the spouse of Ray W. McKewon. On behalf of myself, my heirs and
legatees, I consent to the terms of the Stock Redemption Agreement signed by my
spouse and agree to the redemption of the Shares (as defined in the Stock
Redemption Agreement) registered in the name of my spouse or otherwise
registered upon the terms referenced in the Stock Redemption Agreement.

Dated as of August 1, 1999

                                            /s/ Suzanne McKewon
                                            -------------------------------
                                                SUZANNE McKEWON

                                       5<PAGE>

                       [LOGO OF ACCREDITED HOME LENDERS]

                                                                   EXHIBIT 10.19

August 1, 2001

Mr. Joseph J. Lyndon
Accredited Home Lenders, Inc.
15030 Avenue of Science, Suite 100
San Diego, CA 92128

Re:  Supplemental Compensation
     -------------------------

Dear Joe:

As you know, when you were originally hired by Accredited Home Lenders, Inc.
("Accredited"), it was contemplated that a portion of your compensation package
for successful performance would consist of obtaining a substantial ownership
position in Accredited at a fairly limited cost to you. As you are also aware,
the stock option grants which you have received from Accredited to achieve such
ownership position do not achieve the economic results contemplated by you and
Accredited with respect to such ownership position. In order to rectify that
situation, Accredited has agreed to pay you, during your continued employment
with Accredited, supplemental compensation payments of $238,000 each on August
1, 2002, and on each August 1 thereafter through August 1, 2005. This
supplemental compensation shall be in addition to and shall have no impact upon
the base salary and bonus to which you are already otherwise entitled, but shall
not in anyway be deemed to be a guaranty of your continued employment with
Accredited, such employment continuing to be "at will". If your employment with
Accredited should terminate before August 1, 2005, you shall be entitled, upon
such termination, to a portion of the supplemental compensation payable on the
following August 1, prorated on the basis of the number of days elapsed since
the preceding August 1. Any subsequent payments shall be forfeited.

Please let me know if you have any questions regarding the foregoing.

Sincerely,

/s/ James A. Konrath
--------------------
James A. Konrath
Chief Executive Officer

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