Exhibit 10.18
SETTLEMENT AGREEMENT
This SETTLEMENT AGREEMENT (this "Agreement"), dated as of October 30, 2009, is
by and among Impac Mortgage Holdings Inc., a Maryland corporation ("IMH"), Impac
Funding Corporation, a California corporation ("IFC"), Impac Warehouse Lending
Group, Inc., a California corporation ("IWLG" and collectively, with IMH and
IFC, "Impac") and UBS Real Estate Securities Inc., a Delaware corporation
("UBS").
RECITALS
WHEREAS, IMPAC AND UBS ARE PARTIES TO AN AMENDED AND RESTATED MASTER REPURCHASE
AGREEMENT DATED AS OF SEPTEMBER 11, 2008 (THE "ARMRA") AMONG IMH, IFC AND IWLG
AS THE SELLERS THEREUNDER, AND UBS AS THE BUYER THEREUNDER (CAPITALIZED TERMS
USED AND NOT DEFINED HEREIN HAVING THE MEANINGS ASCRIBED THERETO IN THE ARMRA);
WHEREAS, THERE EXISTS AN UNPAID AND UNSATISFIED REPURCHASE PRICE OWING TO UBS BY
IMPAC UNDER THE ARMRA AS OF THE DATE HEREOF, CONSISTING OF $139,754,978.81 IN
OUTSTANDING PURCHASE PRICE (THE "OUTSTANDING PURCHASE PRICE") TOGETHER WITH
ACCRUED AND UNPAID PRICE DIFFERENTIAL THEREON THAT AS OF THE DATE HEREOF EQUALS
AT LEAST $244,116.78 (THE "OUTSTANDING PRICE DIFFERENTIAL" AND TOGETHER WITH THE
OUTSTANDING PURCHASE PRICE, THE "OUTSTANDING REPURCHASE PRICE");
WHEREAS, THE REPURCHASE OBLIGATIONS (WHICH INCLUDE THE OUTSTANDING REPURCHASE
PRICE) AND OTHER SELLER-RELATED OBLIGATIONS UNDER THE ARMRA ARE SECURED BY THE
MORTGAGE LOANS AND OTHER PURCHASED ASSETS AND PURCHASED ITEMS PURSUANT TO
SECTION 6.02 OF THE ARMRA;
WHEREAS IN ORDER TO PROVIDE FOR A WORKOUT AND SATISFACTION OF THE REPURCHASE
OBLIGATIONS (INCLUDING THE OUTSTANDING REPURCHASE PRICE) UNDER THE ARMRA, AND
OTHER SELLER-RELATED OBLIGATIONS, IF ANY, SECURED PURSUANT TO THE ARMRA, IMPAC
AND UBS DESIRE TO ENTER INTO THIS SETTLEMENT AGREEMENT AND TO EFFECT THE VARIOUS
TRANSACTIONS, AGREEMENTS AND TRANSFERS CONTEMPLATED AND DESCRIBED HEREIN,
INCLUDING WITHOUT LIMITATION, EXECUTING AND DELIVERING, SIMULTANEOUSLY WITH THE
EXECUTION AND DELIVERY HEREOF, THE CREDIT AGREEMENT (AS DEFINED HEREIN) PURSUANT
TO WHICH IMH, IFC, IWLG AND INTEGRATED REAL ESTATE SERVICES CORPORATION (A
SUBSIDIARY OF IMH) ("IRES") JOINTLY AND SEVERALLY ARE ISSUING THE TERM NOTES (AS
DEFINED THEREIN) TO UBS, ALONG WITH IMPAC'S EFFECTING AND EVIDENCING HEREUNDER
AN IRREVOCABLE TRANSFER AND CONVEYANCE TO UBS OF ALL IMPAC'S RIGHT, TITLE AND
INTEREST IN AND TO THE MORTGAGE LOANS AND OTHER RELEASED ASSETS AS DESCRIBED IN
SECTION 1(A)(II) HEREOF.
NOW, THEREFORE, for and in consideration of the premises, and of the mutual
covenants and agreements contained herein and in the Credit Agreement, the
parties hereto agree as follows:
1.
PAYMENTS AND ACTIONS OF IMPAC.
(A)
IMPAC HEREBY AGREES THAT, SIMULTANEOUSLY
WITH THE EXECUTION AND DELIVERY OF THIS AGREEMENT BY THE PARTIES HERETO AND IN
EACH CASE AS A CONDITION TO THE EFFECTIVENESS OF UBS'S UNDERTAKINGS AND
AGREEMENTS HEREUNDER (INCLUDING THE RELEASE OF CLAIMS BY UBS DESCRIBED IN
SECTION 3 BELOW):
(I)
IT SHALL TRANSFER OR CAUSE TO BE
TRANSFERRED IN IMMEDIATELY AVAILABLE FUNDS AN AMOUNT EQUAL TO $20,000,000, FREE
OF ANY LIEN, CLAIM OR ENCUMBRANCE ("ADVERSE CLAIM"), TO A BANK ACCOUNT
DESIGNATED BY UBS (THE "DESIGNATED ACCOUNT") FOR THE EXCLUSIVE BENEFIT OF UBS;
(II)
IT SHALL RELEASE IN ITS ENTIRETY TO UBS,
AND OTHERWISE AGREE, THAT IT HAS ASSIGNED, CONVEYED