** **

**Exhibit 10.1**

 

**CONSULTINGAGREEMENT**

** **

This Consulting Agreement (“Consulting Agreement”) ismade and entered into with an effective date of December 3, 2007, (“EffectiveDate”), by and between Impac Funding Corporation, a California corporation (“Company”or “Impac”), and Impac’s guarantor, Impac Mortgage Holdings, Inc., aMaryland corporation (“Guarantor”) and Gretchen Verdugo (“Consultant” or “Verdugo”)(collectively “the parties”) with reference to the following facts andintentions.

 

**RECITALS**

 

A.            Consultantand Company are parties to an Employment Agreement entered into and madeeffective May 1, 2006 (“Employment Agreement”), whereby Verdugo wasemployed as the Executive Vice President, Chief Financial Officer (“CFO”) forImpac.

 

B.            Theabove-referenced Employment Agreement has now been terminated and the partiesagree that there are no further, other or outstanding obligations remainingwith respect to the Employment Agreement, other than certain Consultant’sobligations pursuant to the Proprietary Rights and Inventions Agreement thatwas entered into as part of the Employment Agreement, as relate topost-termination obligations as set forth in the Separation Agreement amongImpac and Verdugo (“the Separation Agreement”). Additionally, Impac remains bound by all rights to Indemnification toVerdugo as set forth in the Separation Agreement, as well as the Guarantycontained in the Employment Agreement, which shall apply to Impac’s obligationto make payments as provided for in this Consulting Agreement.  Consultant and Company now desire aconsulting relationship to be established pursuant to the terms specifiedherein.

 

            NOW THEREFORE, inconsideration of the foregoing and mutual covenants and conditions hereinafterset forth, Consultant and Company agree as follows:

 

**AGREEMENT**

 

1.             Retention ofServices.  The parties agree to enterinto a consulting relationship whereby the Company has engaged the Consultantto assist the Company with respect to any litigation against the Company ofwhich Consultant has any knowledge or in which she may be a witness.  This consulting relationship will commence onDecember 3, 2007 and will continue until such time as any such litigationis complete.

 

2.             Compensation.  During the term of the consultingrelationship, Consultant will be paid a total of $200,000.00, made payable inequal, bi-monthly payments over the course of the initial six months of theconsulting relationship.  The firstpayment shall be delivered upon execution of this agreement. Payment will bemade jointly to Gretchen Verdugo and the law firm of Allred Maroko &Goldberg without withholding or offset. These payments are compensation to which Consultant would not otherwisebe entitled and constitute good and valuable consideration for the provision ofher consulting services and other obligations identified herein.  These payments are also subject to theGuaranty that was entered with Verdugo in conjunction with her EmploymentAgreement with Impac, dated May 1, 2006, a true and correct copy of whichis attached hereto and incorporated herein as Exhibit A.  All of the Guarantor’s obligations 

 

 

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set forth in theEmployment Agreement and its attachment shall apply equally to the obligationsto make the payments called for herein.

 

3.             Reimbursement ofBusiness Expenses.  During the periodthat Consultant performs consulting services hereunder, the Company shallreimburse Consultant for reasonable and necessary business expenses, includingreasonable travel expenses, incurred by Consultant on behalf of the Company inconnection with the performance of Consultant’s duties hereunder.

 

4.             Provision ofHealth Care and other Benefits. Consultant will receive continuing health care benefits from the Companythrough and until May 31, 2008. Consultant will receive continuing lifeinsurance, short term disability and long term disability benefits through anduntil May 31, 2008 as provided under the Employment Agreement that wasterminated.  After May 31, 2008,Consultant will be eligible for COBRA benefits with respect to health carebenefits.

 

5.             Consultant Freeto Obtain Other Employment. Consultant is free to seek and accept other consulting assignmentsand/or part-time or full time employment during the term of this ConsultingAgreement.  Consultant’s relationshipwith the Company, including payment of the above-referenced compensation, aswell as reimbursement of business expenses and provision of health carebenefits, will continue regardless of whether Consultant obtains otherconsulting positions or part-time or full-time employment elsewhere. When Impacdesires the consulting services of Verdugo, it will refrain from interfering inVerdugo’s other employment or income producing activity, or her pursuit ofsame.

 

6.             IndependentConsultant Relationship.  Consultant’srelationship with the Company after the termination of her employment will bethat of an independent Consultant, and nothing in this Consulting Agreement isintended to, nor should be construed to, create a partnership, agency, jointventure or employment relationship following the termination of the EmploymentAgreement.  Consultant will not beentitled to the benefits that the Company may make available to its employees,(with the exception of the ongoing health care and other benefits referencedabove) including, but not limited to, , profit-sharing or retirement benefits,paid vacation, holidays or sick leave. Consultant will not be authorized to make any representation, contractor commitment on behalf of the Company unless specifically requested or authorizedin writing to do so by the Company. Consultant will be solely responsible for, and will file on a timelybasis, all tax returns and payments required to be filed with, or made to, anyfederal, state or local tax authority with respect to the performance ofservices and receipt of fees under this Consulting Agreement.  No part of Consultant’s compensation will besubject to withholding by the Company for the payment of any social security,federal, state or any other employee payroll taxes.  The Company will regularly report amountspaid to Consultant by filing a Form 1099MISC with the InternalRevenue Service as required by law.

 

6.1.          Method ofPerforming Services; Results.  Inaccordance with the Company’s objectives, Consultant will determine the method,details and means of performing the services required by this ConsultingAgreement.  Company shall have no rightto, and shall not, control the manner or determine the method of performingConsultant’s services.  Consultant shallprovide the services for which Consultant is engaged to the reasonablesatisfaction of the Company.

 

 

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7.             ProprietaryRights and Inventions Agreement. During the term of her Consulting Agreement, Consultant will remain subjectto certain remaining terms and conditions of the Proprietary Rights andInventions Agreement which was previously executed by her during her employmentwith the Company.  Verdugo’s duties ofcooperation under this agreement and the Separation Agreement shall supersedethe provisions of section 3.5 of the Proprietary Rights and InventionsAgreement.  A true and correct copy ofthis Agreement is attached hereto as Exhibit B and incorporated herein.

 

8.             GeneralProvisions.

 

8.1.          Successors andAssigns.  The rights and obligationsof the Company under this Consulting Agreement shall inure to the benefit ofand shall be binding upon the successors and assigns of the Company.  This Agreement is binding on the parties’heirs, executors, administrators, other legal representatives, successors and,to the extent assignable, their assigns. Consultant may not assign her rights, subcontract or otherwise delegateher obligations under this Consulting Agreement.

 

8.2.          Indemnification.  Consultant shall be indemnified from and heldharmless from and against any and all debts, claims, demands, liabilities,expenses, losses, injuries, damages and reasonable attorneys’ fees arising outof Consultant’s services rendered hereunder. Further, Consultant shall be indemnified from and held harmless from andagainst any and all debts, claims, demands, liabilities, expenses, losses,injuries, damages and reasonable attorneys’ fees arising out of Consultant’sactions taken in the course of her previous employment with the Companypursuant to California Labor Code section 2802 or any other provision of theLabor Code, common law, the California Corporations Code, corporate by-laws,any articles of incorporation (to the extent relevant) and under any policy ofinsurance or other agreement.

 

8.3.          Notices.  Any notice required or permitted by thisConsulting Agreement shall be in writing and shall be delivered as follows,with notice deemed given as indicated:  (a) bypersonal delivery, when delivered personally; (b) by overnight courier,upon written verification of receipt; (c) by telecopy or facsimiletransmission, upon acknowledgment of receipt of electronic transmission; or (d) bycertified or registered mail, return receipt requested, upon verification ofreceipt.  Notice shall be sent to theaddresses set forth below or to such other address as either party may specifyin writing:

 
| If to Employer: |   | Impac Funding  Corporation                              |
|-----------------|--------|---------------------------------------------------------|
|            |   | 19500 Jamboree Road                                     |
|            |   | Irvine, California  92612                               |
|            |   | Telephone (949)  475-3600                               |
|            |   | Facsimile (949)  475-3969                               |
|            |   | Attention: Ronald  Morrison, Esq., General Counsel |
|            |   |                                                    |
| With a copy to: |   | Amy Wintersheimer  Findley, Esq.                   |
|            |   | Allen Matkins Leck  Gamble Mallory & Natsis    |
|            |   | 501  West Broadway, 15th Floor                          |
|            |   | San  Diego, California 92101-3541                       |
|            |   | Telephone:  (619) 233-1155                              |
|            |   | Facsimile:  (619) 233-1158                              |

 

 

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| If to Employee: |   | Gretchen Verdugo                          |
|-----------------|--------|-------------------------------------------|
|            |   | [address]                                 |
|            |   |                                      |
|            |   |                                      |
| With a copy to: |   | John West, Esq.                      |
|            |   | Allred,  Maroko & Goldberg       |
|            |   | 6300 Wilshire  Boulevard, Suite 1500 |
|            |   | Los Angeles, California  90048            |
|            |   | Telephone: (323)  653-6530                |
|            |   | Facsimile: (323)  653-1660                |

 

8.4.          Governing Law.  This Consulting Agreement shall be governedin all respects by the laws of the United States of America and by the laws ofthe State of California, as such laws are applied to agreements entered intoand to be performed entirely within California between Californiaresidents.  Each of the partiesirrevocably consents to the exclusive personal jurisdiction of the federal andstate courts located in California, as applicable, for any matter arising outof or relating to this Consulting Agreement, except that in actions seeking toenforce any order or any judgment of such federal or state courts located inCalifornia, such personal jurisdiction shall be nonexclusive.

 

8.5.          Severability.  If any provision of this Consulting Agreementis held by a court of law to be illegal, invalid or unenforceable, (i) thatprovision shall be deemed amended to achieve as nearly as possible the sameeconomic effect as the original provision, and (ii) the legality, validityand enforceability of the remaining provisions of this Consulting Agreementshall not be affected or impaired thereby.

 

8.6.          Waiver;Amendment; Modification.  No term orprovision hereof will be considered waived by the Company, and no breachexcused by the Company, unless such waiver or consent is in writing signed bythe Company.  The waiver by the Companyof, or consent by the Company to, a breach of any provision of this ConsultingAgreement by Consultant, shall not operate or be construed as a waiver of,consent to, or excuse of any other or subsequent breach by Consultant.  This Consulting Agreement may be amended ormodified only by mutual agreement of authorized representatives of the partiesin writing.

 

8.7.          Good Faith.  The parties agree to do all things necessaryand to execute all further documents necessary and appropriate to carry out andeffectuate the terms and purposes of this Agreement.

 

8.8.          Injunctive Relieffor Breach.  Consultant’s obligationsunder this Agreement are of a unique character that gives them particularvalue.  Consultant’s breach of any suchobligations will result in irreparable and continuing damage to the Company forwhich there will be no adequate remedy at law. Accordingly, in the event of any such breach, the parties agree that theCompany will be entitled to injunctive relief and/or a decree for specificperformance, and such other and further relief as may be proper (includingmonetary damages if appropriate).

 

8.9.          Entire Agreement.  This Consulting Agreement, along with therelevant provisions of the Employment Agreement, the Separation Agreement, theProprietary Rights and Inventions Agreement, and the Guaranty, constitute theentire agreement between the parties 

 

 

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relating to thissubject matter and supersedes all prior or contemporaneous oral or writtenagreements concerning such subject matter. The terms of this Consulting Agreement will govern all servicesundertaken by Consultant for the Company.

 

IN WITNESS WHEREOF, the parties have executed thisConsulting Agreement on the dates shown below.

 

 

 

 
| Impac Funding  Corporation,         |                                | Consultant,      |
|-------------------------------------|-------------------------------------|------------------|
| a California  corporation           |                                | Gretchen Verdugo |
|                                |                                |             |
|                                |                                |             |
|                                |                                |             |
| By:                                 | /s/ Joseph  Tomkinson               |             | By: | /s/ Gretchen  Verdugo |
|                                | Joseph  Tomkinson, Chairman and CEO |             |   | Gretchen Verdugo |
|                                |                                |             |   |   |
| Date:                               | 12-18-07                            |             | Date: |   |
|                                |                                |             |   |   |
|                                |                                |             |   |   |
|                                |                                |             |   |   |
| Impac Mortgage  Holdings, Inc. |                                |             |   |
| a Maryland  corporation             |                                |             |   |
|                                |                                |             |   |
| By:                                 | /s/ Ron Morrison                    |             |   |   |
|                                |                                |             |   |   |
| Title:                              | EVP                                 |             |   |   |
|                                |                                |             |   |   |
|                                |                                |             |   |   |
| Date:                               | 12-18-07                            |             |   |   |

 

 

 

 

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