EMPLOYMENT AGREEMENT

AGREEMENT made as of the 1st day of February 2005, between People?s Choice Home Loan, Inc., a Wyoming corporation (the ?Company?), and David Zimmer (the ?Executive?).

The Company and the Executive wish to enter into an employment agreement on the terms and conditions set forth below (the ?Agreement?). Accordingly, in consideration of the premises and the respective covenants and agreements of the parties herein contained, and intending to be legally bound hereby, the parties hereto agree as follows:

1. Employment. The Company hereby agrees to employ the Executive, and the Executive hereby agrees to serve the Company, on the terms and conditions set forth herein.

2. Term. The employment of the Executive by the Company as provided in Section 1 will commence as of the date set forth above and end on January 31, 2008, unless further extended or sooner terminated as hereinafter provided. Commencing on February 1, 2006, and on each February 1 thereafter (each, an ?Anniversary Date?), the term of the Executive?s employment shall automatically be extended for one (1) additional year, unless the Company or the Executive provides 90 days? written notice to the other prior to any such Anniversary Date that it or he does not wish the Term of this Agreement to continue to be automatically extended as described above. In the event either party gives such notice, no additional automatic extensions shall take effect. For purposes of this Agreement, ?Term? shall mean the actual duration of Executive?s employment hereunder, taking into account any extensions or notices not to extend pursuant to this Section 2 or termination of employment pursuant to Section 7.

3. Position and Duties. The Executive shall serve as Executive Vice President, Asset Management, and shall have such responsibilities, duties and authority as he may have as of the date hereof and as may from time to time be assigned to the Executive by the Chief Executive Officer (?CEO?) and the Chief Financial Officer (?CFO?) that are consistent with such responsibilities, duties and authority. The Executive shall devote substantially all his working time and efforts to the business and affairs of the Company; provided, that nothing in this Agreement shall preclude Executive from serving as a director or trustee in any other firm or from pursuing personal real estate investments and other personal investments, as long as such activities do not interfere with Executive?s performance of his duties hereunder or violate Section 9 or 10 of this Agreement.

4. Service on Committees. During the Term, the Executive agrees to serve on committees specified by the CEO.

5. Place of Performance. In connection with the Executive?s employment by the Company, the Executive shall be based in Princeton, New Jersey, except for required travel on the Company?s business to the Company?s principal executive office.

6. Compensation and Related Matters.

(a) Base Salary. The Company shall pay the Executive a base salary annually (the ?Base Salary?), which shall be payable in periodic installments according to the Company?s normal payroll practices. The initial Base Salary shall be $275,000. During the Term, the Company?s board of directors (the ?Board?) or the Compensation Committee of the board of the parent company, People?s Choice Financial Corporation (the ?Compensation Committee?), shall review the Base Salary at least once a year to determine whether the Base Salary should be increased effective the following February 1. The Base Salary, including any increases, shall not be decreased during the Term. For purposes of this Agreement, the term ?Base Salary? shall mean the amount established and adjusted from time to time pursuant to this Section 6(a).

(b) Annual Cash Incentive Awards. The Executive shall be eligible to participate in the Company?s annual cash incentive bonus plan adopted by the Compensation Committee for each fiscal year during the Term of this Agreement (?Bonus Plan?), subject to the terms and conditions of the Bonus Plan, which shall establish performance criteria that are precisely defined, reasonable and the performance of which are reasonably within the Executive?s control. Provided the Executive does not terminate his employment hereunder for other than Good Reason, Executive is guaranteed a bonus of 200% of Base Salary for the first year of employment under this Agreement. In subsequent years, if the Executive or the Company, as the case may be, satisfies the performance criteria contained in such Bonus Plan for a fiscal year, he shall receive an annual cash incentive bonus (the ?Incentive Bonus?) in an amount determined by the Compensation Committee, subject to a maximum Incentive Bonus of two hundred percent (200%) of Executive?s Base Salary for such fiscal year and subject to ratification by the Board, if required. If the Executive or the Company, as the case may be, fails to satisfy the performance criteria contained in such Bonus Plan for a fiscal year, the Compensation Committee may determine whether any Incentive Bonus shall be payable to Executive for that year, subject to ratification by the Board, if required. Beginning January 1, 2005, the Bonus Plan shall contain both individual and group goals established by the Compensation Committee. The annual Incentive Bonus shall be paid to the Executive no later than thirty (30) days after the date the Compensation Committee determines whether the criteria in the Bonus Plan for such fiscal year were satisfied, but in no event later than April 15 of the following fiscal year. For purposes of this Agreement, the term ?Incentive Bonus? shall mean the amount established pursuant to this Section 6(b).

(c) Stock Based Awards. The Company has established the 2004 Equity Incentive Plan (?Equity Incentive Plan?). Subject to the terms and conditions of the Equity Incentive Plan, the Executive shall be eligible to participate in the Equity Incentive Plan, and shall be eligible to receive annual stock option and/or restricted stock awards under the Equity Incentive Plan. The Compensation Committee shall make and approve any such awards to the Executive pursuant to the Equity Incentive Plan. Executive?s initial award, to be made as of February 1, 2005, shall be a non-qualified stock option grant of 75,000 shares (?Initial Grant?) of People?s Choice Financial Corporation (?PCFC?) common stock, with an exercise price of $10 per share. In each subsequent year, the Company?s CEO shall recommend to the Compensation Committee a grant of stock options to the Executive commensurate with his performance.

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(i) 2004 Equity Incentive Plan Option Grants. Option awards under the Equity Incentive Plan subsequent to the Initial Grant described above will have an exercise price per share equal to the closing price of PCFC?s common stock on the trading day immediately preceding the date of grant, will have a term of ten (10) years and will vest and become exercisable with respect to 1/3 of the underlying shares of PCFC common stock on the first, second and third anniversaries, respectively, of the date of grant; provided, however, that the Executive will be 100% vested in all outstanding option awards, including the unvested portion of such awards, upon (i) a Change in Control (as defined herein), (ii) a termination by the Company without Cause (as defined herein), or (iii) a termination by the Executive for Good Reason (as defined herein), and that the Executive will forfeit all unvested options if he is terminated for Cause, Disability (as defined below) or death, or if he terminates his employment hereunder for other than Good Reason.

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