| Item 1.01 | Entry into a Material Definitive Agreement |
As previously announced,
Impac Mortgage Holdings, Inc. (the “Company”) has entered into voting agreements (the “Existing Voting Agreements”)
with certain holders of outstanding shares of its 9.375% Series B Cumulative Redeemable Preferred Stock, par value $0.01 per share (“Series
B Preferred Stock”), certain holders of its outstanding shares of its 9.125% Series C Cumulative Redeemable Preferred Stock,
par value $0.01 per share (the “Series C Preferred Stock”), and certain holders of outstanding shares of its common
stock, par value $0.01 per share (the “Common Stock”), to vote in favor of proposed amendments by consent solicitation
to the provisions of the Company’s charter setting forth the terms of the Series B Preferred Stock and Series C Preferred Stock
(the “Proposed Amendments”) to (1) permit closing of a proposed exchange offer, described below (the “Exchange
Offer”), without payment of any accrued or accumulated dividends on any outstanding shares of Series B Preferred Stock or Series
C Preferred Stock, and (2) provide that, following the effectiveness of the Proposed Amendments and the Exchange Offer, the remaining
outstanding shares of Series B Preferred Stock and Series C Preferred Stock would be subject to redemption at the election of the Company
or the holders of any outstanding shares of Series B Preferred Stock or Series C Preferred Stock, as the case may be, for certain redemption
consideration which included cash.
In order to avoid any
legal or contractual restriction on the payment of cash in exchange for, or upon redemption of, shares of Series B Preferred Stock and
shares of Series C Preferred Stock, including provisions of Maryland law which sets forth certain requirements for the payment of cash
upon the repurchase or redemption of stock, the Company has entered into amendments (“Amendment
No. 1 to Voting Agreement”) to the Existing Voting Agreements as of June 21, 2022 with holders of 59.5% of its Series B
Preferred Stock, 53.4% of its Series C Preferred Stock and 40.2% of its Common Stock, all of whom previously executed the Existing Voting
Agreements, which provide for the potential payment of redemption consideration in shares of a new series of preferred stock (the “Redeemable
Preferred Security”) in lieu of the previously-agreed amount of cash. As a result of such amendments, the consideration
payable upon redemption of shares of Series B Preferred Stock and Series C Preferred Stock that remain outstanding after completion of
the Exchange Offer pursuant to the Proposed Amendments will be as follows: (i) for each outstanding share of Series B Preferred Stock,
subject to potential escrow or reduction to reflect the payment of any attorneys’ fees or costs that are the subject of any petition
therefor filed by any attorneys representing holders of Series B Preferred Stock or any order entered by a court in respect of any such
petition, (a) cash in the amount of $5.00 or fifty (50) shares of Redeemable Preferred Security, whichever is received by holders of
Series B Preferred Stock in the Exchange Offer; and (b) twenty (20) shares of Common Stock; and (ii) for each outstanding share of Series
C Preferred Stock, (a) cash in the amount of $0.10 or one (1) share of Redeemable Preferred Security, whichever is received by the holders
of Series C Preferred Stock in the Exchange Offer; (b) 1.25 shares of Common Stock and (c) a warrant to purchase 1.5 shares of Common
Stock at a purchase price of $5.00 per share of Common Stock.
The Redeemable Preferred
Security would (w) be senior to the Series B Preferred Stock and Series C Preferred Stock as to dividends and upon liquidation, (x) be
entitled to non-participating, cumulative cash dividends from and including the original issue date at a fixed rate equal to 8.25% per
annum; (y) bear a liquidation preference of $0.10 per share and (z) be mandatorily redeemable by the Company on (A) the 60th day, or such
earlier date as may be fixed by the Company, after the date of any public announcement by the Company of annual or quarterly financial
statements that indicate that payment of the redemption price would not cause the Company to violate the restrictions on payment of distributions
to stockholders under Section 2-311 of the Maryland General Corporation Law unless, prior to such redemption date, the Company’s
Board of Directors determines in good faith that the payment by the Company of the redemption price for the Redeemable Preferred Security
as of the applicable redemption date would cause (collectively, the “Redemption Restrictions”): (I) the Company to
violate the restrictions on payment of distributions to stockholders under Section 2-311 of the Maryland General Corporation Law, (II)
any material breach of or default under the terms and conditions of any obligation of the Company, including any agreement relating to
its indebtedness, or (III) the Company to violate any restriction or prohibition of any law rule or regulation applicable to the Company
or of any order, judgment or decree of any court or administrative agency, or (B) any date fixed by the Company not more than 60 days
after any determination by the Company’s Board of Directors (which the Board, or a committee thereof, is obligated to undertake
after the release of annual and quarterly financial statements and upon any capital raise) in good faith that the payment by the Company
of the redemption price for the Redeemable Preferred Security as of such redemption date would not cause the Company to violate the Redemption
Restrictions. To the extent the Company determines that action is reasonably necessary to accommodate the requirements of any petition
for attorneys’ fees or order with respect to attorneys’ fees of class counsel to the holders of Series B Preferred Stock,
the Company may modify the terms of the Redeemable Preferred Security or create two separate classes of preferred stock (such that the
holders of Series B Preferred Stock and Series C Preferred Stock receive separate series of preferred stock) to permit the payment of
such attorneys’ fees solely by the holders of Series B Preferred Stock.
In addition to the amendment
of certain Existing Voting Agreements as described above, the Company intends to seek to amend other Existing Voting Agreements with
all other parties to Existing Voting Agreements. The Company also intends to seek to enter into additional voting agreements (“Additional
Voting Agreement” and together with the Existing Voting Agreements and Amendment No. to Voting Agreement, the “Voting
Agreements”) with holders of its Series B Preferred Stock, Series C Preferred Stock and Common Stock on the terms and conditions
set forth in the Existing Voting Agreements, as amended.
In the proposed Exchange
Offer, the Company currently intends to offer to repurchase each outstanding share of Series B Preferred Stock and each outstanding share
of Series C Preferred Stock in exchange for the corresponding redemption consideration described above, and, with respect to the Series
B Preferred Stock after giving effect to any attorneys’ fees or costs ordered to be paid from such consideration. The Company currently
anticipates that the consideration payable per share of Series B Preferred Stock and Series C Preferred Stock in the Exchange Offer would
consist of cash, shares of Common Stock, and, in the case of the Series C Preferred Stock, warrants, in the amounts described above, unless,
at the time that the Exchange Offer closes, the payment of cash in exchange for all of the tendered shares of Series B Preferred Stock
and Series C Preferred Stock would cause the Company to violate the Redemption Restrictions, in which case, in lieu of the cash portion
of the consideration payable in the Exchange Offer (and upon the subsequent redemption of any shares of Series B Preferred Stock or Series
C Preferred Stock that remain outstanding after the completion of the Exchange Offer), each holder of Series B Preferred Stock and Series
C Preferred Stock would receive shares of Redeemable Preferred Security in the respective amounts described above. Closing of the Exchange
Offer, if effected by the Company, is expected to be contingent upon the approval of the Proposed Amendments by the stockholders of the
Company, which will require the affirmative vote of holders of at least each of 66 2/3% of the outstanding shares of Series B Preferred
Stock, 66 2/3% of the outstanding shares of Series C Preferred Stock and a majority of the outstanding shares of Common Stock, and acceptance
for record of the Proposed Amendments by the State Department of Assessments and Taxation of Maryland. The Voting Agreements also limit
transferability of the shares of Series B Preferred Stock, Series C Preferred Stock and Common Stock during the term and certain holders
of Series B Preferred Stock and Series C Preferred Stock have also agreed, as part of the Voting Agreements, to trading limitations in
connection with any Common Stock they receive in the Exchange Offer or as part of the redemption including refraining from any sales of
Common Stock for a period of six (6) months after consummation of the Exchange Offer.
The foregoing description
is qualified in its entirety by the terms of the Existing Voting Agreements, Amendment No. 1 to Voting Agreement and the Additional
Voting Agreement, the forms of which are attached hereto as Exhibit 10.1, Exhibit 10.2 and Exhibit 10.3 and incorporated herein by reference.
The Company cannot provide
any assurance that the Proposed Amendments will be approved by the stockholders of the Company or that the Exchange Offer will be successfully
completed on the terms set forth herein.
Important Additional
Information And Where To Find It
The Company, its
directors and certain of its executive officers are deemed to be participants in the solicitation of proxies from the
Company’s common stockholders in connection with the matters to be considered at the Company’s special meeting of stockholders relating to the Exchange Offer (“Special Meeting”). Information regarding the names of the Company’s
directors and executive officers and their respective interests in the Company by security holdings or otherwise can be found in the
Company’s proxy statement for its 2022 Annual Meeting of Stockholders, filed with the U.S. Securities and Exchange Commission
(the "SEC”) on April 29, 2022. The proxy statement and all other documents filed with the SEC by the Company are available
free of charge at the SEC’s website at www.sec.gov. The Company intends to file a definitive proxy statement and proxy card
with the SEC in connection with the solicitation of proxies from the Company’s stockholders in connection with the matters to
be considered at the Company’s Special Meeting. Additional information regarding the identity of participants, and their
direct or indirect interests, by security holdings or otherwise, will be set forth therein. INVESTORS AND STOCKHOLDERS ARE
STRONGLY ENCOURAGED TO READ ANY SUCH PROXY STATEMENT AND THE ACCOMPANYING PROXY CARD AND OTHER DOCUMENTS FILED BY THE COMPANY WITH
THE SEC CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE AS THEY WILL CONTAIN IMPORTANT INFORMATION. Stockholders
will be able to obtain the Proxy Statement, any amendments or supplements to the Proxy Statement, the accompanying proxy card, and
other documents filed by the Company with the SEC for no charge at the SEC’s website at www.sec.gov. Copies will also be
available at no charge at the Investor Relations section of the Company’s corporate website at www.impaccompanies.com, or by
writing to the Company’s Corporate Secretary at Impac Mortgage Holdings, Inc., 19500 Jamboree Road, Irvine, California
92612.
In connection with
the exchange offer and consent solicitation, a registration statement on Form S-4, a tender offer statement on Schedule TO, and related
documents and amendments thereto relating to the exchange offer and consent solicitation will be filed by the Company with the Securities
and Exchange Commission. The Series B Preferred Stock and Series C Preferred Stock may not be exchanged or sold nor may offers to exchange
or buy be accepted prior to the time the registration statement becomes effective. This Form 8-K shall not constitute an offer to exchange
or sell, or the solicitation of an offer to exchange or buy, nor shall there be any exchange or sale of such securities in any state in
which such offer, exchange, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of
any such state. Holders of the Series B Preferred Stock and Series C Preferred Stock are strongly advised to read the registration statement,
tender offer statement and other related documents and amendments thereto when available because these documents will contain important
information. Such holders will be able to obtain copies of the exchange offer materials from the Company or at the SEC’s website,
www.sec.gov. The Company is not making any recommendation to holders of outstanding Series B Preferred Stock and Series C Preferred Stock
as to whether they should tender their shares pursuant to the exchange offer and consent solicitation.