EXHIBIT 5.1
[LETTERHEAD OF KIRKPATRICK & LOCKHART LLP]
January 15, 2002
Impac Mortgage Holdings, Inc.
1401 Dove Street
Newport Beach, California 92660
Re: $300,000,000 Aggregate Offering Price of Securities of
Impac Mortgage Holdings, Inc.
Ladies and Gentlemen:
We have acted as counsel to Impac Mortgage Holdings, Inc., a Maryland
corporation (the "Company"), in connection with the registration of certain
securities (the "Securities") of the Company on its Registration Statement on
Form S-3 (the "Registration Statement") filed by the Company on the date hereof
with the Securities and Exchange Commission (the "Commission") under the
Securities Act of 1933, as amended (the "Securities Act"). The Securities
include (i) shares of common stock, $.01 par value per share (the "Common
Stock"), (ii) one or more series of shares of preferred stock, $.01 par value
per share (the "Preferred Stock"), (iii) one or more series of debt securities,
any series of which may be either senior debt securities or subordinated debt
securities (the "Debt Securities"), or (iv) warrants to purchase shares of
Common Stock or Preferred Stock (the "Warrants"), all of which may be issued
from time to time on a delayed or continuous basis pursuant to Rule 415 under
the Securities Act as an aggregated offering not to exceed $300,000,000. Any
Debt Securities and Preferred Stock may be convertible into shares of Common
Stock. Unless otherwise defined herein, capitalized terms used herein shall have
the meanings assigned to them in the Registration Statement.
This opinion is delivered in accordance with the requirements of Item
601(b)(5) of Regulation S-K under the Securities Act.
Unless otherwise provided in any Prospectus Supplement relating to a
particular Series of Debt Securities, the Debt Securities will be issued
pursuant to one or more indentures (each, an "Indenture") between the Company
and a financial institution ("Trustee") to be identified therein. The Warrants
will be issued under one or more warrant agreements to be filed as an exhibit to
the Registration Statement at or prior to such time as the Prospectus Supplement
relating to the Warrants to be offered is filed with the Commission (each, a
"Warrant Agreement"). Each Warrant Agreement
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January 15, 2002
Page 2
will be between the Company and a financial institution identified therein as
warrant agent (each, a "Warrant Agent").
For purposes of this opinion, we have examined such matters of law and
originals, or copies, certified or otherwise identified to our satisfaction, of
such documents, corporate records and other instruments as we have deemed
necessary. In our examination, we have assumed the genuineness of all
signatures, the authenticity of all documents submitted to us as originals, the
conformity to originals of all documents submitted to us as certified,
photostatic or conformed copies, and the authenticity of the originals of all
such latter documents. Except with respect to the Company, we have also assumed
the due execution and delivery of all documents where due execution and delivery
are prerequisites to the effectiveness thereof. We have relied upon certificates
of public officials and certificates of officers of the Company for the accuracy
of material, factual matters contained therein which were not independently
established.
Based on the foregoing and in reliance thereon, and subject to completion
of the corporate action required to be taken by the Company based on the type of
Security being offered (including, without limitation, the due reservation of
any Common Stock and Preferred Stock for issuance and, with respect to the
Preferred Stock, the due authorization, approval and filing of Articles
Supplementary referred to below), the effectiveness of the Registration
Statement, the due authorization, execution and delivery of the relevant
Indenture and any supplemental indenture pursuant to which any Debt Securities
or Warrants may be issued, and, with respect to the relevant Indenture,
compliance with the Trust Indenture Act of 1939, as amended, the due
authorization, execution and delivery of the relevant Warrant Agreement, and the
qualifications and limitations set forth below, we are of the opinion that:
1. The Preferred Stock and Common Stock issued separately or upon the
conversion of any Debt Securities so issued that are convertible and upon the
exercise of any Warrants so issued (as to the Preferred Stock, when issued
pursuant to Articles Supplementary pursuant to Section 2-105 of the Maryland
General Corporation Law as approved by the Board of Directors of the Company
(the "Articles Supplementary")), and the Common Stock issued upon conversion or
exchange of any such Preferred Stock so issued that are convertible or
exchangeable into Common Stock (i) will have been duly authorized and reserved
for issuance separately, upon conversion of such Debt Securities, exercise of
any such Warrants, performance of any such purchase contracts or conversion or
exchange of any such convertible Common Stock or Preferred Stock, upon the
respective issuance of each, as the case may be, and (ii) upon the issuance of
such Preferred Stock and Common Stock separately against payment in full
therefor in an amount exceeding the par value, if any, thereof or pursuant to
(x) the relevant Indenture upon valid conversion of such Debt Securities or
applicable definitive purchase, underwriting or
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January 15, 2002
Page 3
similar agreement approved by the Board upon payment of the consideration
therefor, (y) exercise of such Warrants and payment in full of the exercise
price provided for therein or (z) valid conversion of any such Preferred Stock
so issued that are convertible into Common Stock in accordance with Articles
Supplementary, as the case may be, will be validly issued, fully paid and
non-assessable.
2. The Debt Securities, upon the issuance thereof and timely payment in
full therefore in the manner described in the Registration Statement and the
Prospectus Supplement describing the terms of the Debt Securities as issued,
will be validly issued, fully paid and non-assessable and will constitute
legally valid and binding obligations of the Company, enforceable against the
Company in accordance with their terms.
3. The Indentures will be the legally valid and binding agreements of the
Company, enforceable against the Company in accordance with their terms.
4. The Warrant Agreements will constitute the legally valid and binding
agreements of the Company, enforceable against the Company in accordance with
their terms.
5. The Warrants, upon the issuance thereof and timely payment in full
therefore in the manner described in the Registration Statement and the
Prospectus Supplement describing the terms of the Debt Securities as issued will
be validly issued, fully paid and non-assessable and will constitute legally
valid and binding obligations of the Company, enforceable against the Company in
accordance with their respective terms.
The opinions set forth above are subject to the following exceptions,
limitations and qualifications:
(a) the effect of bankruptcy, insolvency, reorganization, moratorium or
other similar laws now or hereafter in effect (including without limitation,
California and federal laws relating to fraudulent transfers or conveyances) and
court decisions of general application, and other legal equitable principles of
general application relating to, limiting or affecting the enforcement of
creditors' rights, generally;
(b) the unenforceability under certain circumstances under law or court
decisions of provisions providing for the indemnification of or contribution to
a party with respect to a liability where such indemnification or contribution
is contrary to public policy;
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Page 4
(c) the discretion of any court of competent jurisdiction in awarding
equitable remedies, including but not limited to specific performance or
injunctive relief and, limitations imposed by federal or state securities laws;
(d) the net impact or result of any conflict of laws between or among laws
of competing jurisdictions and the applicability of the law of any jurisdiction
in such instance other than California and New York;
(e) the limitations imposed by a California court might not permit the
exercise or attempted exercise of any right or remedy provided in any agreement
if such exercise or attempted exercise is deemed to be in breach of the covenant
of good faith and fair dealing implied under California law to exist in all
agreements or if party seeking to exercise same fails to act in a commercially
reasonable manner;
(f) the limitations imposed by California law and court decisions relating
to the strict enforcement of certain covenants in contracts absent a showing of
damage or increased risk to the party seeking enforcement (such covenants my
include, without limitation, covenants to provide reports or notices and
covenants restricting rights of assignment);
(g) the effect of certain California court decisions, indicating that a
California court would probably refuse to give strict and literal effect to
contractual provisions if it concluded that enforcement of such provisions, on
the basis of the facts and circumstances then before such court, was not
reasonably necessary to protect the rights and interest of the party seeking
enforcement;
(h) the enforceability under certain circumstances of contractual
provisions respecting various self-help or summary remedies without notice or
opportunity for hearing or correction, especially if their operation would work
a substantial forfeiture or impose a substantial penalty upon the burdened
party;
(i) the unenforceability under certain circumstances of provisions waiving
vaguely or broadly stated rights or unknown future rights and of provisions
stating that rights or remedies are not exclusive, that every right or remedy is
cumulative and may be exercised in addition to or with any other right or
remedy, or that the election of some particular remedy or remedies does not
preclude recourse to one or more others;
(j) the effect of section 1670.5 of the California Civil Code, which
provides that if a court as a matter of law finds a contract or any clause of a
contract to have been "unconscion-
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Page 5
able" at the time it was made, the court may refuse to enforce the contract, or
the court may enforce the remainder of the contract without the "unconscionable"
clause so as to avoid an "unconscionable" result. That section also permits
parties to present evidence as to the commercial setting, purpose and effect of
any contract or clause thereof claimed to be "unconscionable" to aid the court
in making its determination; and
(k) the effect of Trident Center v. Connecticut General Life Ins. Co., 847
---------------------------------------------------
F.2d 564 (9th Cir. 1988) in which the Ninth Circuit Court of Appeal, applying
what it said was California law, held parol evidence was admissible to vary the
provisions of an unambiguous agreement. To the extent Trident accurately
expresses California law on the subject matter, our opinion assumes that -------
no party to any agreement or document referenced herein in any action seeking to
enforce it offers any parol evidence which varies the express terms of said
agreement or document.
The opinions set forth herein are subject to the following assumptions,
qualifications, limitations and exceptions being true and correct at or prior to
the time of the delivery of any Security:
(a) the Board of Directors of the Company shall have duly established the
terms of such Security and duly authorized and taken any other necessary
corporate action to approve the issuance and sale of such Security in conformity
with the Amended and Restated Articles of Incorporation of the Company, as
amended and supplemented, and its bylaws (subject to the further assumption that
the Amended and Restated Articles of Incorporation, as amended and supplemented,
and bylaws have not been amended from the date hereof in a manner that would
affect the validity of any of the opinions rendered herein), and such
authorization shall remain in effect and unchanged at all times during which the
Securities are offered and shall not have been modified or rescinded (subject to
the further assumption that the sale of any Security takes place in accordance
with such authorization);
(b) the Registration Statement, and any amendments thereto (including
post-effective amendments) and any additional registration statement filed under
Rule 462 under the Securities Act will have been declared effective under the
Securities Act and such effectiveness shall not have been terminated or
rescinded;
(c) all Securities will be issued and sold in compliance with applicable
federal and state securities laws and solely in the manner stated in the
Registration Statement and the appropriate Prospectus Supplement and there will
not have occurred any change in law affecting the validity of any of the
opinions rendered herein;
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January 15, 2002
Page 6
(d) in the case of an Indenture, Warrant Agreement, stock purchase
contract, Articles Supplementary, or other agreement pursuant to which any
Securities are to be issued, there shall be no additions, deletions, or
modifications of the terms or provisions contained in the forms thereof included
as exhibits to the Registration Statement which would affect the validity of any
of the opinions rendered herein;
(e) a definitive purchase, underwriting or similar agreement and any other
necessary agreement with respect to any Securities offered or issued will have
been duly authorized and validly executed and delivered by the Company and the
other parties thereto; and
(f) the final terms of any of the Securities when issued do not violate any
applicable law or result in a default under or breach of any agreement or
instrument binding upon the Company and comply with any requirement or
restriction imposed by any court or governmental body have jurisdiction over the
Company.
To the extent that the obligations of the Company under the Indentures may
be dependent upon such matters, we assume for purposes of this opinion that the
Trustees thereunder will be duly organized, validly existing and in good
standing under the laws of their respective jurisdictions of organization; that
the Trustees thereunder will be duly qualified to engage in the activities
contemplated by the applicable Indentures; that the Indentures will have been
duly authorized, executed and delivered by the respective Trustees and will
constitute the legally valid and binding obligations of the respective Trustees
enforceable against the respective Trustees in accordance with their terms; that
the Trustees will be in compliance, generally with respect to acting as a
trustee under the applicable Indentures, with all applicable laws and
regulations; that the Trustees will have the requisite organizational and legal
power and authority to perform their obligations under the respective
Indentures; the applicable Indentures will have been duly qualified under the
Trust Indenture Act of 1939, as amended; that the Trustee will have been
qualified under the Trust Indenture Act of 1939, as amended and a Form T-1 shall
have been properly filed as an exhibit to the Registration Statement; and that
such Debt Securities have been duly executed, authenticated, issued and
delivered in accordance with the provisions of the applicable Indenture.
To the extent that the obligations of the Company under each Warrant
Agreement may be dependent upon such matters, we assume for purposes of this
opinion that the Warrant Agent will be duly organized, validly existing and in
good standing under the laws of its jurisdiction of organization; that the
Warrant Agent will be duly qualified to engage in the activities contemplated by
the Warrant Agreement; that the Warrant Agreement will have been duly
authorized, executed and delivered by the Warrant Agent and constitutes the
legally valid and
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January 15, 2002
Page 7
binding obligation of the Warrant Agent enforceable against the Warrant Agent in
accordance with its terms; that the Warrant Agent will be in compliance,
generally with respect to acting as a Warrant Agent under the Warrant Agreement,
with all applicable laws and regulations; and that the Warrant Agent will have
the requisite organizational and legal power and authority to perform its
obligations under the Warrant Agreement.
The opinions expressed in this opinion letter are limited to the laws of
the State of California, applicable federal securities laws of the United States
and, as it relates to the Indentures in connection with paragraphs 2 and 3 to
the extent New York law applies, the laws of the State of New York. We are not
opining on, and we assume no responsibility for, the applicability to or effect
on any of the matters covered herein of any other laws, the laws of any other
jurisdiction, including any foreign jurisdiction, or the local laws of any
jurisdiction.
With respect to the opinions set forth above and to the extent applicable,
we have relied upon the opinion of McKee Nelson, LLP, dated the date hereof, a
copy of which has been delivered to you, as to matters of Maryland law.
We consent to the use of our name under the caption "Legal Matters," in the
Prospectus, constituting part of the Registration Statement, and to the filing
of this opinion as an exhibit to the Registration Statement. By giving you this
opinion and consent, we do not admit that we are experts with respect to any
part of the Registration Statement or Prospectus within the meaning of the term
"expert" as used in Section 11 of the Securities Act or the rules and
regulations promulgated thereunder by the SEC, nor do we admit that we are in
the category of persons whose consent is required under Section 7 of the
Securities Act.
Our opinion is based solely upon existing laws, rules and regulations, and
we undertake no obligation to advise you of any changes that may be brought to
our attention after the date hereof.
This opinion is rendered for your benefit in connection with the
transactions covered hereby.
Very truly yours,
/s/ KIRKPATRICK & LOCKHART LLP