Document:

FORM OF NON-PLAN NON-QUALIFIED STOCK OPTION AGREEMENT

 EXHIBIT 10.24 
  
 INTERPORE CROSS INTERNATIONAL 
  

FORM OF 
 NON-QUALIFIED
STOCK OPTION AGREEMENT 
  
 THIS AGREEMENT is made by and
between Interpore International, Inc., a Delaware corporation (the “Company”), and the consultant of the Company or Subsidiary of the Company whose name and signature appears on the Signature Page hereof (the “Optionee”) as of
the date thereon: 
  
 WHEREAS, the Company wishes to afford the
Optionee the opportunity to purchase shares of its Common Stock; and 
  
 WHEREAS, the Committee appointed to administer the Company’s stock option plans has determined that it would be to the advantage and best interest of the Company and its stockholders to grant the Non-Qualified Stock Option provided for
herein to the Optionee as an inducement to enter into or remain in the service of the Company or its Subsidiaries and as an incentive for increased efforts during such service, and has advised the Company thereof and instructed the undersigned
officers to issue said Option; 
  
 NOW, THEREFORE, in
consideration of the mutual covenants herein contained and other good and valuable consideration, receipt of which is hereby acknowledged, the parties hereto do hereby agree as follows: 
  
 ARTICLE I.  
  
 DEFINITIONS 
  
 Whenever the following terms are used in this Agreement, they shall have the meaning specified below unless the context clearly indicates to the contrary.
The masculine pronoun shall include the feminine and neuter, and the singular the plural, where the context so indicates. 
  
 Section 1.1 - Board 
  
 “Board” shall mean the Board of Directors of the Company. 
  
 Section 1.2 - Committee 
  
 “Committee” shall mean the Stock Option and Compensation Committee of the Board. 
  
 Section 1.3 - Company 
  
 “Company” shall mean Interpore International, Inc., a Delaware corporation, or any successor corporation. 
  
 Section 1.4 - Exchange Act 
  
 “Exchange Act” shall mean the Securities Exchange Act of 1934, as
amended. 
  
 Section 1.5 - Option 
  
 “Option” shall mean the non-qualified option to purchase Common
Stock of the Company granted under this Agreement. 

 Section 1.6 - Rule 16b-3 
  

“Rule 16b-3” shall mean that certain Rule 16b-3 under the Exchange Act, as such Rule may be amended from time to time. 
  
 Section 1.7 - Secretary 
  
 “Secretary” shall mean the Secretary of the Company. 
  
 Section 1.8 - Securities Act 
  
 “Securities Act” shall mean the Securities Act of 1933, as amended. 
  
 Section 1.9 - Subsidiary 
  
 “Subsidiary” shall mean any corporation in an unbroken chain of corporations beginning with the Company if each of the corporations other than
the last corporation in the unbroken chain then owns stock possessing fifty percent (50%) or more of the total combined voting power of all classes of stock in one (1) of the other corporations in such chain. 
  
 Section 1.10 - Termination of Consultancy 
  
 “Termination of Consultancy” shall mean the time when the
engagement of an Optionee as a consultant to the Company or a Subsidiary is terminated for any reason, with or without cause, including, but not by way of limitation, a termination by resignation, discharge, death or retirement; but excluding a
termination where there is a simultaneous commencement of engagement of the Optionee as a consultant to or employment with the Company or any Subsidiary. The Committee, in its sole discretion, shall determine the effect of all matters and questions
relating to Termination of Consultancy, including, but not by way of limitation, all questions of whether a particular leave of absence constitutes a Termination of Consultancy. Notwithstanding any other provision of this Agreement, except as set
forth in a separate written agreement between the Company (or a Subsidiary) and the Optionee, the Company (or such Subsidiary) has an absolute and unrestricted right to terminate a consultant’s service at any time for any reason whatsoever.

  
 ARTICLE II. 
  
 GRANT OF OPTION 
  
 Section 2.1 - Grant of Option 
  
 For good and valuable consideration, on the date set forth on the Signature
Page hereof, the Company irrevocably grants to the Optionee the option to purchase any part or all of the aggregate number of shares of its Common Stock (the “Option Shares”) set forth on the Signature Page hereof, all upon the terms and
conditions set forth in this Agreement. 
  
 Section 2.2 - Purchase Price

  
 The purchase price of the shares of Common Stock covered by
the Option shall be the amount per share set forth on the Signature Page hereof and shall be without commission or other charge. 
  
 Section 2.3 - Consideration to Company 
  
 In consideration of the granting of this Option by the Company, the Optionee agrees to render faithful and efficient services to the Company or a
Subsidiary as a consultant to the Company for a period of at least one (1) year from the date this Option is granted. Nothing in this Agreement shall confer upon the Optionee any right to continue as a consultant of the Company or any Subsidiary or
shall interfere with or restrict in 

 any way the rights of the Company and its Subsidiaries, which are hereby expressly reserved, except to the extent set
forth in a separate written agreement between the Company (or a Subsidiary) and the Optionee, to discharge the Optionee at any time for any reason whatsoever, with or without cause. The Company and the Optionee acknowledge that the services provided
to the Company by the Optionee are bonafide services and not in connection with the offer or sale of securities in any capital-raising transaction. 
  
 Section 2.4 - Adjustments in Option 
  
 (a) In the event that the outstanding shares of the stock subject to the Option are changed into or exchanged for a different number or kind of shares of
the Company or other securities of the Company, or of another corporation, by reason of reorganization, merger, consolidation, recapitalization, reclassification, stock splitup, stock dividend or combination of shares, the Committee may, in its sole
discretion, make an adjustment in the number and kind of shares as to which the Option, or portions thereof then unexercised, shall be exercisable, to the end that after such event the Optionee’s proportionate interest shall be maintained as
before the occurrence of such event. Such adjustment in the Option may include any necessary corresponding adjustment in the Option price per share, but shall be made without change in the total price applicable to the unexercised portion of the
Option (except for any change in the aggregate price resulting from rounding-off of share quantities or prices). Any such adjustment made by the Committee shall be final and binding upon the Optionee, the Company and all other interested persons.

  
 ARTICLE III. 
  
 PERIOD OF EXERCISABILITY 
  
 Section 3.1 - Commencement and Duration of Exercisability 
  
 (a) The Option shall become exercisable as set forth under the caption
“Commencement of Exercisability” on the Signature Page hereto. 
  
 (b) No portion of the Option which is unexercisable at Termination of Consultancy shall thereafter become exercisable. 
  
 (c) The installments provided for in Section 3.1(a) are cumulative. Each such installment which becomes exercisable pursuant to Section 3.1(a) shall
remain exercisable until it becomes unexercisable under 
  
 Section 3.2 -
Expiration of Option 
  
 The Option may not be exercised to
any extent by anyone after the first to occur of the following events: 

 (a) The Expiration Date set forth on the Signature Page hereto; or 
  
 (b) The expiration of three (3) months from the date of the Optionee’s
Termination of Consultancy; or 
  
 (c) Except to the extent of
Committee or Board action as authorized by Section 3.3 or otherwise, the effective date of either the merger or consolidation of the Company with or into another corporation, the exchange of all or substantially all of the assets of the Company for
the securities of another corporation, or the acquisition by another corporation or person of all or substantially all of the Company’s assets or eighty percent (80%) or more of the Company’s then outstanding voting stock, or the
liquidation or dissolution of the Company, unless the Committee waives this provision in connection with such transaction. At least fifteen (15) days prior to the effective date of such merger, consolidation, exchange, acquisition, liquidation or
dissolution, the Committee shall give the Optionee notice of such termination. 
  
 Section 3.3 - Acceleration of Exercisability 
  
 In the event of the merger or consolidation of the Company with or into another corporation, the exchange of all or substantially all of the assets of the Company for the securities of another corporation, the acquisition by another
corporation or person of all or substantially all of the Company’s assets or eighty percent (80%) or more of the Company’s then outstanding voting stock, or the liquidation or dissolution of the Company, the Committee may, in its absolute
discretion and upon such terms and conditions as it deems appropriate, provide by resolution, adopted prior to such event, that as of some time prior to the effective date of such event this Option shall be exercisable as to all the shares covered
hereby, notwithstanding that this Option may not yet have become fully exercisable under Section 3.1; provided, however, that this acceleration of exercisability shall not take place if: 
  
 (a) Option becomes unexercisable under Section 3.2 prior to said effective date; or 
  
 (b) In connection with such event, provision is made, with the consent of the
Committee, for an assumption of this Option or a substitution therefor of a new option by a successor corporation or a parent or subsidiary of such corporation. 
  

The Committee may make such determinations and adopt such rules and conditions as it, in its absolute discretion, deems appropriate in connection with
such acceleration of exercisability, including, but not by way of limitation, provisions to ensure that any such acceleration and resulting exercise shall be conditioned upon the consummation of the contemplated corporate transaction. 
  
 None of the foregoing discretionary terms of this Section shall be permitted
to the extent that such discretion would be inconsistent with the requirements of Rule 16b-3. 
  
 ARTICLE IV. 
  
 EXERCISE OF
OPTION 
  
 Section 4.1 - Person Eligible to Exercise 
  
 Only the Optionee (or transferee permitted by Section 5.2) may exercise the
Option or any portion thereof. 
  
 Section 4.2 - Partial Exercise

  
 Any exercisable portion of the Option or the entire Option, if
then wholly exercisable, may be exercised in whole or in part at any time prior to the time when the Option or portion thereof becomes unexercisable under Section 3.2; provided, however, that each partial exercise shall be for not less than one

 hundred (100) shares (or the minimum installment set forth in Section 3.1, if a smaller number of shares) and shall be
for whole shares only. 
  
 Section 4.3 - Manner of Exercise 
  
 The Option, or any exercisable portion thereof, may be exercised solely by
delivery to the Secretary or his office of all of the following prior to the time when the Option or such portion becomes unexercisable under Section 3.2: 
  
 (a) A written notice complying with the applicable rules established by the Committee stating that the Option, or a portion thereof, is exercised. The
notice shall be signed by the Optionee or other person then entitled to exercise the Option or such portion; and 
  
 (b) Full cash payment to the Secretary of the Company for the shares with respect to which such Option or portion is exercised; and 
  
 (c) A bona fide written representation and agreement, in a form satisfactory
to the Committee, signed by the Optionee or other person then entitled to exercise such Option or portion, stating that the shares of stock are being acquired for its own account, for investment and without any present intention of distributing or
reselling said shares or any of them except as may be permitted under the Securities Act and then applicable rules and regulations thereunder, and that the Optionee or other person then entitled to exercise such Option or portion will indemnify the
Company against and hold it free and harmless from any loss, damage, expense or liability resulting to the Company if any sale or distribution of the shares by such person is contrary to the representation and agreement referred to above. The
Committee may, in its absolute discretion, take whatever additional actions it deems appropriate to insure the observance and performance of such representation and agreement and to effect compliance with the Securities Act and any other federal or
state securities laws or regulations. Without limiting the generality of the foregoing, the Committee may require an opinion of counsel acceptable to it to the effect that any subsequent transfer of shares acquired on an Option exercise does not
violate the Securities Act, and may issue stop-transfer orders covering such shares. Share certificates evidencing stock issued on exercise of this Option shall bear an appropriate legend referring to the provisions of this subsection (c) and the
agreements herein; and 
  
 (d) Full payment to the Company (or
Subsidiary) of all amounts which, under federal, state or local tax law, it is required to withhold upon exercise of the Option; and 
  
 (e) In the event the Option or portion shall be exercised pursuant to Section 5.2 by any person or persons other than the Optionee, appropriate proof of
the right of such person or persons to exercise the Option. 
  
 Section 4.4 -
Conditions to Issuance of Stock Certificates 
  
 The shares of
stock deliverable upon the exercise of the Option, or any portion thereof, may be either previously authorized but unissued shares or issued shares which have then been reacquired by the Company. Such shares shall be fully paid and nonassessable.
The Company shall not be required to issue or deliver any certificate or certificates for shares of stock purchased upon the exercise of the Option or portion thereof prior to fulfillment of all of the following conditions: 

 (a) The admission of such shares to listing on all stock exchanges on which such class of stock is then
listed; and 
  
 (b) The completion of any registration or other
qualification of such shares under any state or federal law or under rulings or regulations of the Securities and Exchange Commission or of any other governmental regulatory body, which the Committee shall, in its absolute discretion, deem necessary
or advisable; and 
  
 (c) The obtaining of any approval or other
clearance from any state or federal governmental agency which the Committee shall, in its absolute discretion, determine to be necessary or advisable; and 
  
 (d) The receipt by the Company of full payment for such shares, including payment of all amounts which, under federal, state or local tax law, the Company
(or Subsidiary) is required to withhold upon exercise of the Option; and 
  
 (e) The lapse of such reasonable period of time following the exercise of the Option as the Committee may from time to time establish for reasons of administrative convenience. 
  
 Section 4.5 - Rights as Stockholder 
  
 The holder of the Option shall not be, nor have any of the rights or
privileges of, a stockholder of the Company in respect of any shares purchasable upon the exercise of any part of the Option unless and until certificates representing such shares shall have been issued by the Company to such holder. 
  
 ARTICLE V. 
  
 OTHER PROVISIONS 
  
 Section 5.1 - Administration 
  
 The Committee shall have the power to interpret this Agreement and to adopt such rules for the administration, interpretation and application of the
Agreement as are consistent therewith and to interpret, amend or revoke any such rules. All actions taken and all interpretations and determinations made by the Committee in good faith shall be final and binding upon the Optionee, the Company and
all other interested persons. No member of the Committee shall be personally liable for any action, determination or interpretation made in good faith with respect to the Option. In its absolute discretion, the Board may at any time and from time to
time exercise any and all rights and duties of the Committee under this Agreement except with respect to matters which under Rule 16b-3 or Section 162(m) of the Code, or any regulations or rules issued thereunder, are required to be determined in
the sole discretion of the Committee. 
  
 Section 5.2 - Option Not
Transferable 
  
 Without the Consent of the Committee:

 (a) neither the Option nor any interest or right therein or part thereof shall be sold, pledged,
assigned, or transferred in any manner unless and until such Option has been exercised, or the shares underlying such Option have been issued, and all restrictions applicable to such shares have lapsed; and 
  
 (b) neither the Option nor any interest or right therein or part thereof
shall be liable for the debts, contracts or engagements of the Optionee or his successors in interest or shall be subject to disposition by transfer, alienation, anticipation, pledge, encumbrance, assignment or any other means whether such
disposition be voluntary or involuntary or by operation of law by judgment, levy, attachment, garnishment or any other legal or equitable proceedings (including bankruptcy), and any attempted disposition thereof shall be null and void and of no
effect, except to the extent that such disposition is permitted by the preceding sentence. 
  
 Section 5.3 - Confidentiality; Risk of Forfeiture 
  
 Optionee shall maintain the terms of this Agreement and the terms of the Option in strictest confidence and shall not disclose any of such terms to any other person or entity without the prior approval of the Company.
Optionee’s failure to comply with this Section 5.3 shall be harmful to the interests of the Company and may result in termination of the Option and forfeiture of any gains or other economic benefit received by Optionee in connection with the
Option or upon the receipt or resale of any Common Stock underlying the Option. 
  
 Section 5.4 - Shares to Be Reserved 
  
 The
Company shall at all times during the term of the Option reserve and keep available such number of shares of stock as will be sufficient to satisfy the requirements of this Agreement. 
  
 Section 5.5 - Sale of Option Shares 
  
 Neither this Option nor any of the Option Shares have been registered under the Act or under the securities laws of any state. Until the Option Shares
have been registered under the Act and registered and qualified under the securities laws of any state in question, the Corporation shall cause each certificate evidencing any Option Shares to bear the following legend: 
  
 THE SHARES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR UNDER THE SECURITIES LAWS OF ANY STATE. THE SHARES MAY NOT BE OFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED OR HYPOTHECATED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, AND SUCH REGISTRATION OR QUALIFICATION AS MAY BE NECESSARY UNDER THE SECURITIES LAWS OF ANY STATE, OR AN OPINION OF COUNSEL SATISFACTORY TO THE CORPORATION THAT SUCH REGISTRATION OR QUALIFICATION IS NOT
REQUIRED. 

 Section 5.6 - Notices 
  
 Any notice to be given under the terms of this Agreement to the Company shall be addressed to the Company in care of its Secretary, and any notice to be
given to the Optionee shall be addressed to him at the address given beneath his signature hereto. By a notice given pursuant to this Section 5.5, either party may hereafter designate a different address for notices to be given to him. Any notice
shall be deemed duly given when enclosed in a properly sealed envelope or wrapper addressed as aforesaid, deposited (with postage prepaid) in a post office or branch post office regularly maintained by the United States Postal Service. 

 
 Section 5.7 - Titles 
  
 Titles are provided herein for convenience only and are not to serve as a basis for interpretation or construction of this
Agreement. 
  
 Section 5.8 - Construction 
  
 This Agreement shall be administered, interpreted and enforced under the
internal laws of the State of Delaware without regard to conflicts of laws thereof. 
  

 INTERPORE CROSS INTERNATIONAL 
 NON-QUALIFIED STOCK OPTION AGREEMENT 
  
 SIGNATURE PAGE 
  
 IN WITNESS WHEREOF, this Agreement has
been executed and delivered by the parties hereto. 
  

			
	 Spine and Scoliosis Center
	  	 Interpore International, Inc.

		
	 By:                                      
                                        
                     
	  	By:                                      
                                        
                
		
	                                       
                                        
                            
	  	 Richard L. Harrison

		
	 Its:                                      
                                        
                      
	  	Its:                CFO & Sr.
VP,                
	 Finance
	  	 
	                                       
                                        
                            
	  	 
	 Taxpayer Identification Number
	  	 
	 	  	 Date of
Grant:                                      
                                    

		
	                                       
                                        
                            
	  	 Expiration
Date:                                      
                                

		
	                                       
                                        
                            
	  	 Number of Option
Shares:                                     
              

	 Address
	  	 
	 	  	 Purchase Price Per
Share:                                      
              

  
 Commencement of Exercisability 
  

 Schedule of Non Plan Non-Qualified Stock Option Agreements 
  
 The following identifies the specific terms of the preceding form of non-plan
Non-Qualified Stock Option Agreement as they apply to specific options held by the Optionees identified below (defined terms refer to terms in the form of option): 
  

												
	 Optionee

	  	Date of
Grant

	  	Expiration
Date

	  	Option
Shares

	  	Purchase
Price per
Share

	  	 Exercisability

	 Spine and Scoliosis center
	  	11/01/2001	  	11/01/2004	  	10,000	  	$	8.39	  	Exercisable on first anniversary of the date of grant.
	 Innovative Spine Technologies
	  	07/10/2001	  	07/10/2006	  	60,000	  	$	5.24	  	33 1/3% of the shares shall become exercisable on each of the first three anniversary dates of the date of grant.Employment Agreement between Impac Funding Corp. and Ronald Morrison

  
 Exhibit 10.8

  
 EMPLOYMENT AGREEMENT 
  
 THIS EMPLOYMENT AGREEMENT is made effective as of this first day of
September, 2001, by and between Impac Funding Corporation, a California corporation (“Employer”), and Ronald Morrison, an individual (“Employee”), with reference to the following facts: 
  
 R E C I T A L S 
  
 WHEREAS, Employee is knowledgeable of and skillful in Employer’s
business, which includes, but is not limited to, acquiring for investment and sale non-conforming residential mortgage loans and mortgage backed securities (the “Business”); 
  
 WHEREAS, Employer believes that Employee will be an integral part of its management and is and will become more
knowledgeable of and be in part responsible for developing the Business; 
  
 WHEREAS, Employee possesses extensive management experience and knowledge regarding the Business, including confidential information concerning service marketing plans and strategy, customer needs and peculiarities,
and customer lists and detailed information (the “Trade Secrets”); 
  
 WHEREAS, Employee has agreed not to compete with Employer or use any confidential and proprietary business information regarding the Business of Employer to the detriment of Employer during the term of this Agreement
(and thereafter as is applicable) in order to induce Employer to enter into this Employment Agreement and to perform its obligations hereunder; 
  
 WHEREAS, Employer desires that Employee be employed as Executive Vice President, General Counsel of Employer; and 
  
 WHEREAS, Employee is willing to be employed by Employer as described under
the terms and conditions herein stated. 
  
 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 

  
 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, General Counsel, of Employer, with the powers and duties consistent with such position. Employee agrees to devote 100% of all working hours to rendering the services as Executive Vice President, subject to those exceptions, if any,
set forth on Exhibit “A” attached hereto. Employee shall render his services to Employer by and subject to the instructions and directions of Employer’s Board of Directors to whom Employee shall directly report. 
  

	2.	Term and Termination 

  
 2.1. Unless sooner terminated pursuant to Paragraph 2.2 hereof, Employee’s employment shall commence on the date hereof and shall continue for a
period of two (2) years unless extended by the mutual agreement of Employer and Employee. 
  
 2.2. Employee’s employment shall terminate prior to the expiration of the term upon the happening of any of the following events: 
  
 (a) Voluntary termination by Employee which is not subject to Section 2.2(g) herein; 
  
 (b) Upon the death of Employee; 
  
 (c) Upon dissolution and termination of the Employer;

  
 (d) For cause by the Employer, that is to say
only: 
  
 (i) if Employee is convicted of (or
pleads nolo contendere to), or at any time prior to employment by Employer, has been convicted of (or pled nolo contendere to) a crime of dishonesty or breach of trust or crime leading to incarceration of more than ninety (90) days (including,
without limitation, embezzlement or theft from Employer) or the payment of a penalty or fine of $10,000, or more; 
  
 (ii) upon a determination by Employer that Employee’s performance is not satisfactory or that Employee has engaged in misconduct,
negligence or neglect in the performance of his duties under this Agreement; 
  
 (iii) if Employee has materially breached any of the terms of this Agreement or any other material legal obligation to Employer including, without limitation, a breach or trust or fiduciary duty involving Employer or
a material violation of policies or procedures of Employer; or 
  
 (iv) Any determination of “cause” as used in this Section 2.2 (d) shall be made only in good faith by an affirmative majority vote of the Board of Directors (not counting Employee, if a director) of the
Employer; 
  
 (e) By mutual agreement between
Employer and Employee; 
  
 (f) Upon the good
faith determination of the Board of Directors of Employer that Employee has become so physically or mental disability as to be incapable of satisfactorily performing his duties hereunder for a period of ninety (90) consecutive days, such
determination based upon a certificate as to such physical or mental disability issued by a licensed physician and/or psychiatrist (as the case may be) employed by the Employer; 
  

 2 

 (g) Without cause by Employer. Employee may elect by notice to Employer to treat the
following acts or omissions by Employer as a “termination without cause”: 
  
 (i) with respect to acts or omissions other than those specifically stated in this Paragraph (g), if Employer shall not substantially
comply with its payment obligations under this Agreement and such failure shall not be corrected within ten (10) business days after delivery of notice to Employer of the facts on which Employee bases a claim on non-compliance; or 
  
 (ii) a charge of material breach by Employer under Section
2.2(d) hereof which is determined by final judgment to be made without adequate basis in law or fact. 
  
 2.3. Except as set forth in Sections 4,5, 6 and 7 herein, in the event that Employee’s employment is terminated pursuant to Sections 2.2(a), (b),
(c), (d), (e) or (f) herein, neither Employer nor Employee shall have any remaining duties or obligations hereunder, except that Employer shall pay to Employee, or his representatives, on the date of termination of employment (“Termination
Date”), 
  
 (i) such compensation as is due
pursuant to Section 3.1 (a) herein, prorated through the Termination Date; and 
  
 (ii) expense reimbursements due and owing to Employee as of the Termination Date. 
  
 2.4. Except as set forth in Sections 4,5, 6 and 7 herein, in the event that
Employee’s employment is terminated pursuant to Section 2.2(g) herein, neither Employer nor Employee shall have any remaining duties or obligations hereunder, except that Employer shall pay to Employee, or his representatives, on the
Termination Date, 
  
 (i) all such compensation
as is due pursuant to Section 3.1 (a) for a period of one year following the Terminate Date; 
  
 (ii) whatever bonus or incentive compensation is provided by any plan for the year of termination, prorated through the Termination Date,
provided that if such bonus or incentive compensation is discretionary in amount, Employee shall receive a payment at least equal to the last previous payment made to him, if any, for the previous year prorated to the Termination Date; and

  
 (iii) expense reimbursements due and owing
to Employee as of the Termination Date. 
  
 2.5. This Agreement
shall not be terminated by any: 
  
 (a) Merger,
whether the Employer is or is not the surviving corporation; or 
  
 (b) Transfer of all or substantially all of the assets of the Employer. 
  
 In the event of any such merger, transfer of assets, dissolution, liquidation, or consolidation, the surviving corporation or transferee,
as the case may be, shall be bound by and shall have the benefits of this Agreement, and the Employer shall take all action to ensure that such corporation or transferee is bound by the provisions of this Agreement. 
  

 3 

	3.	Compensation 

  
 3.1. As the total consideration for the services which Employee agrees to render hereunder, Employee is entitled to the following: 
  
 (a) A salary of Two Hundred Ten Thousand Dollars ($210,000)
per year (“Salary”), payable in equal installments twice monthly on those days when Employer normally pays its employees. The Salary shall be subject to an annual review and upward adjustment or no adjustment in the sole discretion of
Employer. 
  
 (b) That amount set forth on
Exhibit “A” hereto. 
  
 (c)
Reimbursement for reasonable and necessary business and entertainment expenses incurred by him in connection with the performance of his duties hereunder. In the event that any Federal, state or local government agency or authority determines to
disallow any such expenses which are reimbursed to Employee, Employee agrees, to the extent that such determination involves the Employee to reimburse Employer as follows: 
  
 (i) for all costs in disputing such action, including counsel fees; and 
  
 (ii) for all taxes and penalties incurred by Employee in
connection with such action; 
  
 (d) Employee
shall be entitled to four (4) weeks vacation time each year without loss of compensation. Employee may be absent from his employment only at such times as Employer shall determine from time to time. Employee’s vacation shall be under
Employer’s usual policies applicable to all employees; 
  
 (e) Employer agrees to provide Employee with insurance coverages and other benefits available to all employees of Employer under its group plans; and 
  
 (f) Such other benefits as the Board of Directors of Employer, in its sole discretion, may from time to time
provide. 
  
 3.2. Employer shall have the right to deduct from the
compensation due to Employee hereunder and 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. 
  

	4.	Confidentiality 

  
 Employee shall keep all Trade Secrets confidential; use Trade Secrets only in the course of his duties hereunder; maintain in trust, as Employer’s
property, all documents concerning Employer’s Business, including his own work papers of any kind including telephone directories and notes, and any and all copies thereof in his possession or under his control; and transfer to Employer all
documents that belong to Employer and any and all copies that are in his possession or under his control when his Employment terminates, or at any other time upon request by Employer. 
  

 4 

	5.	Injunctive Relief 

  
 Employee hereby acknowledges and agrees that it would be difficult to fully compensate Employer for damages resulting from the breach or threatened breach
of Sections 4 herein and, accordingly, that Employer shall be entitled to temporary and injunctive relief, including temporary restraining orders, preliminary injunctions and permanent injunctions, to enforce such Sections without the necessity of
proving actual damages therewith. This provision with respect to injunctive relief shall not, however, diminish Employer’s right to claim and recover damages or enforce any other of its legal and/or equitable rights or defenses. 
  

	6.	Copies of Agreement 

  
 Employee authorizes Employer to send a copy of this Agreement to any and all future employers which he may have, and to any and all persons, firms and
corporations, with whom he 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
this Agreement or should another party induce a breach on Employee’s part. 
  

	7.	Severable Provisions 

  
 The provisions of this Agreement are severable and if any one or more provisions may be 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. 
  

	8.	Reference Provision 

  
 (a) Each controversy, dispute or claim between the parties arising out of or relating to this Agreement, which controversy, dispute or
claim is not settled in writing within controversy, dispute or claim is not settled in writing within thirty (30) days after the “Claim Date” (defined as the date on which a party subject to the Agreement gives written notice to the other
that a controversy, dispute or claim exists), will be settled by binding arbitration in Los Angeles, California in accordance with the provisions of the American Arbitration Association, which shall constitute the exclusive remedy for the settlement
of any controversy, dispute or claim, and the parties waive their rights to initiate any legal proceedings against each other in any court or jurisdiction other than the Superior Court of Los Angeles (the “Court”). Any decision rendered by
the arbitrator and such arbitration will be final, binding and conclusive and judgment shall be entered pursuant to CCP Section 644 in any court in the State of California having jurisdiction. 
  
 (b) Except as expressly set forth in this Agreement, the
arbitrator shall determine the manner in which the proceeding is conducted, including the time and place of all hearings, the order presentation of evidence, and all other questions that arise with respect to the course of the proceeding. All
proceedings and hearings conducted before the arbitrator, except for trial, shall be conducted without a court reporter, except that when any party so requests, a court reporter will be used at any hearing conducted before the arbitrator. The party
making 

  

 5 

 
such a request shall have the obligation to arrange for any pay for the court reporter. The costs of the court reporter shall be borne equally by the
parties. 
  
 (c) The arbitrator shall be required
to be determine in all issues in accordance with existing case law and the statutory laws of the State of California. The rules of evidence applicable to proceedings at law in the state of California will be applicable to the reference proceeding.
The arbitrator shall be empowered to enter equitable as well as legal relief, to provide all temporary and/or provisional remedies and to enter equitable orders that will be binding upon the parties. The arbitrator shall issue a single judgment at
the close of the proceeding which shall dispose of all of the claims of the parties that are the subject of the proceeding. The parties hereto expressly reserve the right to contest or appeal from the final judgment or any appealable order or
appealable judgment entered by the arbitrator. The parties hereto expressly reserve the right to findings of fact, conclusions of law, a written statement of decision, and the right to move for a new trial or a different judgment, which new trial,
if granted, is also to be a proceeding governed under this provision. 
  

	9.	Binding Agreement 

  
 This Agreement shall inure to the benefit of and shall be binding upon Employer, its successors and assigns. 
  

	10.	Captions 

  
 The Section captions are inserted only as a matter of convenience and reference and in no way define, limit or describe the scope of this Agreement or the
intent of any provisions hereof. 
  

	11.	Entire Agreement 

  
 This Agreement contains the entire agreement of the parties relating to the subject matter hereof, and the parties hereto have made no agreement,
representations or warranties relating to the subject matter of this Agreement that are not set forth otherwise herein. This Agreement supersedes any and all prior agreements, written or oral, with Employer. 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(s) is specifically superseded and replaced by the provision of this Agreement. No modification of this
Agreement shall be valid unless made in writing and signed by the parties hereto and unless such writing is made by an executive officer of Employer. The parties hereto agree that in no event shall an oral modification of this Agreement be
enforceable or valid. 
  

	12.	Governing Law 

  
 This Agreement shall be governed and construed in accordance with the laws of the State of California. 
  

	13.	Notice 

  
 All notices and other communications under this Agreement shall be in writing (including, without limitation, telegraphic, telex, telecopy or cable
communication) and mailed, 

  

 6 

 
telegraphed, telexed, telecopied, cabled or delivered by hand or by a nationally recognized courier service guaranteeing overnight delivery to a party at the
following address (or to such other address as such party may have specified by notice given to the other party pursuant to this provision): 
  
 If to Employer: 
  
 Impac Funding Corporation 
 1401 Dove Street,
Suite 100 
 Newport Beach, CA 92660 
  
 If to Employee: 
  
 Ron Morrison 
 14501 Heights Drive 

Tustin, CA 92780 
  

	14.	Attorney’s Fees 

  
 In the event that any party shall bring an action or proceeding in connection with the performance, breach or interpretation hereof, then the prevailing
party in such action as determined by the court or other body having jurisdiction shall be entitled to recover from the losing party in such action, as determined by the court or other body having jurisdiction, all reasonable costs and expense of
litigation or arbitration, including reasonable attorney’s fees, court costs, costs of investigation and other costs reasonably related to such proceeding. 
  

IN WITNESS WHEREOF, this Employment Agreement is executed as of the day and year first above written. 
  

					
	“EMPLOYER”
	
	IMPAC FUNDING CORPORATION
		
	By:	 	/s/ WILLIAM S. ASHMORE        
	 	 	

	 	 	 Name:
	 	William S. Ashmore
	 	 	 Title:
	 	President/COO

  

	
	“EMPLOYEE”
	
	/s/ RON MORRISON        
	

	Ron Morrison

  

 7 

 EXHIBIT A 
  

	Employee:	    Ron Morrison 

  

	Item 1:	    Car Allowance 

  

	$500.00	    Monthly 

  

	Item 2:	    Executive Bonus Compensation 

  
 The employee will be paid a quarterly bonus equal to the aggregate dividend such person would have received from the Company on 55,000 shares of Common Stock underlying
the unexercised stock options held by the Employee which are outstanding as of the date of this contract and on the date of the payment of such bonus. This shall be effective as of 9/1/01. 
  

 8

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