PERFORMANCE UNIT PLAN

a)

AWARD means a payment made pursuant to the Plan at the end of a Plan Cycle.

b)

BOARD means the Board of Directors of Irwin Home Equity Corporation.

c)

CODE means the Internal Revenue Code of 1986, as amended.

d)

COMMITTEE means the committee appointed by the Board to administer the Plan, which shall consist solely of the Chairman until such time as the Plan is amended in accordance with Section 7(a) hereof.

e)

COMPANY means the Irwin Home Equity Corporation.

f)

COVERED OFFICER means any individual who, on the last day of the taxable year of IFC, is the chief executive officer of IFC and any other officer of the Company who is, for such taxable year, determined to be among IFC’s four “highest compensated officers (other than the chief executive officer of IFC) as defined under Code Section 162(m)(3).

g)

DISABILITY means the participant is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, or is, by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, receiving income replacement benefits for a period of not less than 3 months under an accident and health plan covering the Company’s employees.

h)

EXCHANGE ACT means the Securities Exchange Act of 1934, as amended.

i)

IFC COMMITTEE means the committee appointed by the board of directors of IFC to administer such long-term incentive plans as may be adopted by such board from time to time or, in the absence of such a committee, the standing compensation committee of IFC’s board of directors as constituted from time to time; provided, that any such IFC Committee shall be comprised solely of at least two members of the IFC board of directors who qualify as an “outside director” under Code Section 162(m) and the regulations promulgated thereunder and as a “non-employee director” within the meaning of Rule 16b-3(b)(3) (or any successor rule) under the Exchange Act.

j)

PERFORMANCE UNIT means a component used to represent the incremental cash value of the Company that is awarded to participants in the Plan at the beginning of each Plan Cycle.

k)

PLAN means the Irwin Home Equity Corporation Performance Unit Plan.

l)

PLAN CYCLE means the three-year period in which the Plan will run.

m)

P/E means a valuation ratio of the current share price compared to a per-share earnings unit.

n)

ROE means return on equity.

a)

Plan Cycles . Each Plan Cycle is three years in length with the first cycle starting January 1st, 2006 and ending December 31st, 2008. All subsequent Plan Cycles will start January 1 ^st and end December 31 ^st three years later. A new Plan Cycle will start at the beginning of each calendar year.

b)

Plan Operation . Participants are awarded Performance Units at the beginning of each Plan Cycle. Performance Units vest in accordance with Section 6(f) below. At the end of each Plan Cycle, the vested Performance Units are cashed out based on the value of the Performance Units at the end of the Plan Cycle to the extent the participant is employed by the Company at the end of the Plan Cycle.

c)

Performance Units . Performance Units are components used to represent the incremental cash value of the Company. The beginning value of the Company is divided by the number of units in order to make the beginning value for a Performance Unit in the first Plan Cycle equal to $100. Subsequent valuations will use the calculated number of units in order to determine the per unit value.

d)

Valuation . Valuations are done by an outside appraiser in conformity with the Uniform Standards of Professional Appraisal Practice. Valuations are performed annually unless the Board determines that significant volatility suggests the need for more frequent valuations. The standard value is fair market value. The outside appraiser will recommend a valuation approach or approaches, such as the combination of a market approach, income approach and net asset approach. The valuation should be adjusted for any capital contributions.

e)

Award Opportunities . Award opportunities are based on a median competitive expected value divided by the starting value of a Performance Unit for each Plan Cycle.

f)

Vesting . Performance Units will cliff vest based on continued employment over the Plan Cycle and average ROE performance, as follows:

g)

Rights Upon Separation from Service . In the event of separation from service, as such phrase is defined in Section 409A of the Code, for reasons other than death, Disability, retirement, transfer pursuant to Section 6(h) below, or company-initiated Separation from Service unrelated to job performance, the Participant forfeits all Performance Units in effect on the date of separation. In the event of separation from service by reason of death, Disability (as such term is defined in Section 409A of the Code) retirement,

transfer pursuant to Section 6(h) below, or Company-initiated Separation from Service unrelated to the participant’s job performance, a pro-rated portion of the Performance Units for each Plan Cycle in effect will be paid at the same time as set forth in Section 6(i) based on full months completed in the Plan at the date of termination, provided that the performance goals and performance criteria were met during the applicable Plan Cycle.

h)

Transfer to Non-eligibl