_______________, 2007
Western United Financial Corporation
c/o Western United Management, LLC
00 Xxxxx Xxxx Xxxxxx, Xxxxx 000
Xxxxxxxx, Xxxxxxxxxx 00000
Re: INITIAL PUBLIC OFFERING
Ladies and Gentlemen:
This letter is being delivered to you in accordance with the
Underwriting Agreement (the "UNDERWRITING AGREEMENT") entered into by and
between Western United Financial Corporation, a Delaware corporation (the
"COMPANY"), and Sandler X'Xxxxx & Partners, L.P. (the "UNDERWRITER"), relating
to an underwritten initial public offering (the "IPO") of the Company's units
(the "UNITS"), each Unit comprised of one share of the Company's Common Stock,
par value $0.01 per share (the "COMMON STOCK"), and one warrant, which is
exercisable for one share of Common Stock. Certain capitalized terms used herein
are defined in paragraph 10 hereof.
In order to induce the Company and the Underwriter to enter into the
Underwriting Agreement and to proceed with the IPO, and in recognition of the
benefit that such IPO will confer upon the undersigned as a stockholder of the
Company, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the undersigned hereby agrees with
the Company and the Underwriter as follows:
1. If the Company solicits approval of its stockholders of a Business
Combination, the undersigned will vote all Insider Shares owned by the
undersigned in accordance with the majority of the votes cast by the holders of
the IPO Shares.
2. In the event that the Company fails to consummate a Business Combination
within twenty-four (24) months from the effective date of the Registration
Statement (the "EFFECTIVE DATE"), the undersigned will take all reasonable
actions within the undersigned's power to (i) cause the Trust Account to be
liquidated and distributed to the holders of IPO Shares in accordance with that
Investment Management Trust Agreement to be entered into by and among the
Company, the Underwriter and Xxxxx Fargo Bank, National Association ("Xxxxx
Fargo"), as Trustee; (ii) cause the Company to liquidate as soon as reasonably
practicable; and (iii) be liable to (A) pay the costs of dissolution and
liquidation to the extent such expenses exceed the Company's assets outside of
the Trust Account and (B) ensure that the proceeds in the Trust Account are not
reduced by the claims of vendors for services rendered or products sold to the
Company, as well as claims of prospective target acquisitions for fees and
expenses of third parties that the Company has agreed in writing to pay in the
event that the Business Combination is not consummated with such target
acquisition. The undersigned hereby waives any and all right, title, interest or
claim (each a "CLAIM") of any kind in or to (x) any distribution of the Trust
Account with respect to shares of Common Stock held by the undersigned, other
than IPO Shares
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purchased by the undersigned, and (y) any remaining net assets
of the Company after such liquidation.
3. Except as disclosed in the Registration Statement, none of the undersigned
nor any Affiliate of the undersigned will be entitled to receive and will not
accept any compensation for services rendered to the Company prior to or in
connection with the consummation of the Business Combination; provided, that the
undersigned shall be entitled to reimbursement from the Company for the
undersigned's reasonable out-of-pocket expenses incurred in connection with
seeking and consummating a Business Combination.
4. None of the undersigned nor any Affiliate of the undersigned will be entitled
to receive or accept from the Company a finder's fee or any other compensation
in the event the undersigned or any Affiliate of the undersigned originates a
Business Combination.
5. The undersigned shall escrow the undersigned's Insider Shares until ninety
(90) days after the consummation of the Business Combination, subject to the
terms of a Securities Escrow Agreement which the Company will enter into with
the undersigned and Xxxxx Fargo, as escrow agent, in form and substance
acceptable to the Company.
6. The information in the Registration Statement relating to the undersigned is
true and accurate in all respects and does not omit any material information
with respect to the undersigned. The undersigned represents and warrants that:
6.1 the undersigned is not subject to, or a respondent in, any legal
action for any injunction, cease-and-desist order or order or stipulation to
desist or refrain from any act or practice relating to the offering of
securities in any jurisdiction;
6.2 the undersigned has never been convicted of or pleaded guilty to
any crime (i) involving any fraud, (ii) relating to any financial transaction or
handling of funds of another person or (iii) pertaining to any dealings in any
securities, and he is not currently a defendant in any such criminal proceeding;
6.3 the undersigned has never been suspended or expelled from
membership in any securities or commodities exchange or association or had a
securities or commodities license or registration denied suspended or revoked;
6.4 a petition under any federal bankruptcy laws or any state,
territorial or provincial insolvency law was not filed by or against, nor was a
receiver fiscal agent or similar officer appointed by a court for the business
or property of the undersigned, or for any partnership in which the undersigned
was a general partner within the past two years;
6.5 the undersigned has not been subject to any order prohibiting and
is not subject to any legal proceeding seeking to prohibit the undersigned from
engaging in any type of business practice;
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6.6 the undersigned has not been found by a court of competent
jurisdiction in a civil action by the Securities and Exchange Commission or by
any other federal or state administrative or regulatory authority to have
violated any federal or state securities law;
6.7 the undersigned has not been found by a court of competent
jurisdiction in a civil action by the Commodity Futures Trading Commission or by
any other federal or state administrative or regulatory authority to have
violated any federal or state commodities law; and
6.8 the Escrow Agreement, dated as of __________, 2007, by and among
the Company, Xxxxx Fargo, the undersigned and the other stockholders of the
Company party thereto is enforceable against the undersigned (except: (i) as
such enforceability may be limited by bankruptcy, insolvency, reorganization or
similar laws affecting creditors' rights generally; (ii) as enforceability of
any indemnification or contribution provision may be limited under the federal
and state securities laws; and (iii) that the remedy of specific performance and
injunctive and other forms of equitable relief may be subject to the equitable
defenses and to the discretion of the court before which any proceeding therefor
may be brought) and will not, with or without the giving of notice or the lapse
of time or both, result in a breach of, or conflict with any of the terms and
provisions of, or constitute a default under, any agreement or instrument to
which the undersigned is a party.
7. This letter agreement shall be binding on the Company and the undersigned and
the undersigned's respective successors, heirs, personal representatives and
assigns. This letter agreement shall terminate on the earlier of (i) the date
upon which the Business Combination is consummated and (ii) the date upon which
the liquidation and distribution of the Trust Account is completed, provided
that the following Sections shall survive such termination: 3, 4, 5, 8, 9 and
11.
8. This letter agreement shall be governed by and construed and enforced in
accordance with the laws of the State of New York applicable to contracts
executed in and to be performed in that State, including, without limitation,
Sections 5-1401 and 5-1402 of the New York General Obligations Law and the New
York Civil Practice Laws and Rules 327(b). Each of the Company and the
undersigned hereby (i) agrees that any action, proceeding or claim against him
or it arising out of or relating in any way to this letter agreement shall be
brought and enforced in the courts of the State of New York or the United States
District Court for the Southern District of New York, and irrevocably submits to
such jurisdiction, which jurisdiction shall be exclusive and (ii) waives any
objection to such exclusive jurisdiction and that such courts represent an
inconvenient forum.
9. As used herein:
9.1 "AFFILIATE" shall have the meaning ascribed to it in Rule 12b-2 of
the General Rules and Regulations under the Securities Exchange Act of 1934, as
amended.
9.2. "BUSINESS COMBINATION" shall mean the Company's initial
acquisition of one or more banks, thrifts and their respective holding companies
and other financial services
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organizations through a merger, capital stock exchange, asset or stock
acquisition, exchangeable share transaction or other similar business
combination.
9.3 "INSIDERS" shall mean each of the following:
X. Xxxxxxx Xxxxxxx
Xxxxxxx Xxxxxx
Xxxxxxx X. Xxxxxxxx
Xxxxx X. Xxxxxx
Xxxxxxx X. Xxxxxxx
Xxxxxx Xxxxxx
Western United
Funding, LLC
9.4 "INSIDER SHARES" shall mean the 62,500 Units acquired by the
undersigned immediately prior to the IPO, including any Common Stock underlying
such Units, any Warrants underlying such Units and any Common Stock issuable
upon exercise of such Warrants underlying such Units.
9.5 "IPO SHARES" shall mean the shares of Common Stock comprising the
Units issued in the Company's IPO.
9.6 "REGISTRATION STATEMENT" shall mean the registration statement
filed by the Company on Form S-1 (No. 333-138263) with the Securities and
Exchange Commission on October 27, 2006, and any amendment or supplement
thereto, in connection with the IPO.
9.7 "TRUST ACCOUNT" shall mean the trust account established with
[Xxxxx Fargo], the amounts therein to be released as set forth in the Trust
Agreement.
10. No term or provision of this letter agreement may be amended, changed,
waived altered or modified except by written instrument executed and delivered
by the undersigned and the Company.
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Sincerely,
WESTERN UNITED FUNDING, LLC
By:
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Name:
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Title:
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Accepted and agreed:
WESTERN UNITED FINANCIAL CORPORATION
By:
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Name:
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Title:
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