EXHIBIT 1.2
AGREEMENT TO ACT AS "QUALIFIED INDEPENDENT UNDERWRITER"
WESTERN UNITED LIFE ASSURANCE COMPANY
VARIABLE RATE CUMULATIVE PREFERRED STOCK, SERIES B
This agreement (the "Agreement") made as of the 15th day of October,
2001, among Western United Life Assurance Company, a Washington corporation
("Western United"), Metropolitan Investment Securities, Inc., a Washington
corporation ("MIS"), and Xxxx Capital Partners, LLC, a California limited
liability company ("Xxxx").
WITNESSETH:
WHEREAS, Western United intends to offer up to 2,000,000 shares of its
Preferred Stock, designated as "Variable Rate Cumulative Preferred Stock, Series
B" (hereinafter referred to as "Preferred Stock"), which will be offered in
reliance on a registration statement filed on Form S-1 with the Securities and
Exchange Commission; and
WHEREAS, MIS, a broker/dealer and affiliate of Western United and a
member of the National Association of Securities Dealers ("NASD"), will be
engaged as the sole managing agent for Western United; and
WHEREAS, pursuant to subparagraph (c) of Rule 2720 of the NASD Conduct
Rules, MIS, as an NASD member, may participate in such offering only if the
yield at which the Preferred Stock offered to the public is no lower than the
yield recommended by a "Qualified Independent Underwriter" as that term is
defined in Rule 2720, subparagraph (b)(15), of the NASD Conduct Rules, and who
participates in the preparation of the registration statement and prospectus
relating to the offering and exercises customary standards of due diligence,
with respect thereto; and
WHEREAS, this agreement (the "Agreement") describes the terms on which
Western United is retaining Xxxx to serve as such a "Qualified Independent
Underwriter" in connection with this offering of Preferred Stock.
NOW, THEREFORE, in consideration of the recitations set forth above,
and the terms, promises, conditions, and covenants herein contained, the parties
hereby contract and agree as follows:
DEFINITIONS
As hereinafter used, except as the context may otherwise require, the
term "Registration Statement" means the registration statement on Form S-1
(including the related preliminary prospectus, financial statements, exhibits
and all other documents to be filed as a part thereof or incorporated therein)
for the registration of the offer and sale of the Preferred Stock under the
Securities Act of 1933, as amended, and the rules and regulations thereunder
(the "Act") filed with the Securities and Exchange Commission (the
"Commission"), and any amendment thereto, and the term "Prospectus" means the
prospectus including any preliminary or final prospectus and any materials
incorporated by reference into and attached to the Prospectus (including the
form of prospectus to be filed with the Commission pursuant to Rule 424(b) under
the Act) and any amendment or supplement thereto, to be used in connection with
the offering.
SECTION 1. RULE 2720 REQUIREMENT. Xxxx hereby confirms its agreement as
set forth in subparagraph (b)(15)(F) of Rule 2720 of the NASD Conduct Rules and
represents that, as appropriate, Xxxx satisfies or at the times designated in
such subparagraph (l5) will satisfy the other requirements set forth therein or
will receive an exemption from such requirements from the NASD.
SECTION 2. CONSENT. Xxxx hereby consents to being named in the
Registration Statement and Prospectus as having acted as a "Qualified
Independent Underwriter" solely for the purposes of Rule 2720 referenced herein.
Except as permitted by the immediately preceding sentence or to the extent
required by law, all references to Xxxx in the Registration Statement or
Prospectus or in any other filing, report, document, release or other
communication prepared, issued or transmitted in connection with the offering by
Western United or any corporation controlling, controlled by or under common
control with Western United, or by any director, officer, employee,
representative or agent of any thereof, shall be subject to Xxxx'x prior written
consent with respect to form and substance.
SECTION 3. PRICING FORMULA AND RECOMMENDATION LETTER. Xxxx agrees to
render a written letter of recommendation as to the price above which Western
United's Preferred Stock may not be offered based on the computation of
dividends to be declared on those shares that is set forth in Schedules "A" and
"B," copies of which are attached hereto, and incorporated herein by reference
(the "Pricing Recommendation Letter"). It is understood and agreed by Xxxx that
the securities to which this Agreement relates will be offered on a continuous,
best efforts basis, with conditions, by MIS, as the managing agent, pursuant to
the Selling Agreement in effect between MIS and Western United which is filed as
an exhibit to the Registration Statement referred to above. Western United,
through MIS, will continue to offer the securities according to the terms and
conditions of said agreement, including, without limitation, Schedules "A" and
"B" in accordance with this Agreement. Xxxx reserves the right to review and
amend its Pricing Recommendation Letter upon the filing of any post-effective
amendment to the Registration Statement or upon occurrence of any material event
which may or may not require such an amendment to be filed, or at such time as
the offering under this registration shall terminate or otherwise lapse under
operation of law.
SECTION 4. FEES AND EXPENSE. It is agreed that Xxxx shall be paid a fee
in the amount of $60,000.00 payable upon delivery of the Pricing Recommendation
Letter referred to in paragraph 3 above. Xxxx shall also be reimbursed for
actual expenses incurred in connection with its duties hereunder in an amount
not to exceed $10,000.
SECTION 5. MATERIAL FACTS. Western United represents and warrants to
Xxxx that at the time the Registration Statement is declared effective and, at
the time the Prospectus is filed with the Commission (including any preliminary
prospectus and the form of prospectus filed with the Commission pursuant to Rule
424(b)) and at all times subsequent thereto, to and including the date on which
payment for, and delivery of, the Preferred Stock to be sold in the Offering is
made by the underwriter or underwriters, as the case may be, participating in
the Offering and by Western United (such date being referred to herein as the
"Closing Date"), the Prospectus (as amended or supplemented if it shall have
been so amended or supplemented) will contain all material statements which are
required to be stated therein in accordance with the Act and will conform to all
other requirements of the federal securities laws, and will not, on such date
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include any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading and that all contracts and documents required by the Act to be filed
or required as exhibits to the Registration Statement have been filed. Western
United further represents and warrants that any further filing, report,
document, release or communication which in any way refers to Xxxx or to the
services to be performed by Xxxx pursuant to this Agreement will not contain any
untrue or misleading statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading.
Western United further warrants and represents that:
(a) All leases, contracts and agreements referred to in or
filed as exhibits to the Registration Statement to which Western United
or its subsidiaries is a party or by which it is bound are in full
force and effect, except as may otherwise be disclosed in the
Registration Statement.
(b) Western United has good and marketable title, except as
otherwise indicated in the Registration Statement and Prospectus, to
all of its assets and properties described therein as being owned by
it, free and clear of all liens, encumbrances and defects except such
encumbrances and defects which do not, in the aggregate, materially
affect or interfere with the use made and proposed to be made of such
properties as described in the Registration Statement and Prospectus;
and Western United has no material leased properties except as
disclosed in the Prospectus.
(c) Western United is duly organized under the laws of the
State of Washington and, as of the effective date of the Registration
Statement and at the Closing Date Western United will be validly
existing and in good standing under the laws of the State of Washington
with full corporate power and authority to own its properties and
conduct its business to the extent described in the Registration
Statement and Prospectus; Western United is duly qualified to do
business as a foreign corporation and is in good standing in all
jurisdictions in which the nature of the business transacted by it or
its ownership of properties or assets makes qualification necessary;
the authorized and outstanding capitalization of Western United is as
set forth in the Prospectus and the description in the Prospectus of
the capital stock of Western United conforms with and accurately
describes the rights set forth in the instruments defining the same.
(d) Western United is not in violation of its Certificate of
Incorporation or Bylaws or in default in the performance or observance
of any material obligation, agreement, covenant or condition contained
in any bond, debenture, note, or other evidence of indebtedness,
contract or lease or in any indenture or loan agreement to which it is
a party or by which it is bound.
(e) The execution, delivery and performance of this Agreement
has been duly authorized by all necessary corporate action on the part
of Western United and MIS and performance of the foregoing agreement
and the consummation of the transactions contemplated thereby, will not
conflict with or result in a breach of any of the terms or constitute a
violation of the respective Certificates of Incorporation or Bylaws of
Western
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United or MIS, or any deed of trust, lease, sublease, indenture,
mortgage, or other agreement or instrument to which Western United or
MIS is a party or by which either of them or their property is bound,
or any applicable law, rule, regulation, judgment, order or decree of
any government, governmental instrumentality or court, domestic or
foreign, having jurisdiction over Western United or MIS or their
properties or obligations; and no consent, approval, authorization or
order of any court or governmental agency or body is required for the
consummation of the transactions contemplated herein and in the other
agreements previously referred to in this paragraph except as may be
required under the Act or under any state securities laws.
(f) Any certificate signed by an officer of Western United and
delivered to Xxxx pursuant to this Agreement shall be deemed a
representation and warranty by Western United to Xxxx, to have the same
force and effect as stated herein, as to the matters covered thereby.
(g) If any event relating to or affecting Western United shall
occur as a result of which it is necessary, in Xxxx'x opinion, to amend
or supplement the Prospectus in order to make the Prospectus not
misleading in the light of the circumstances existing at the time it is
delivered to a purchaser, Western United undertakes to inform Xxxx of
such events within a reasonable time thereafter, and will forthwith
prepare and furnish to Xxxx, without expense to them, a reasonable
number of copies of an amendment or amendments or a supplement or
supplements to the Prospectus (in form and substance satisfactory to
Xxxx) which will amend or supplement the Prospectus so that as amended
or supplemented it will not contain any untrue statement of a material
fact or omit to state a material fact necessary to make the statements
therein in light of the circumstances existing at the time the
Prospectus is delivered to a purchaser, not misleading.
(h) Western United hereby warrants and represents that it will
offer the Preferred Stock in accordance with the pricing formula that
is set forth in Schedules "A" and "B" which are incorporated by
reference herein.
(i) All representations, warranties and agreements contained
in this Agreement, or contained in certificates of officers of Western
United submitted pursuant hereto, shall remain operative and in full
force and effect, surviving the date of this Agreement.
SECTION 6. AVAILABILITY OF INFORMATION. Western United hereby agrees to
provide Xxxx, at its expense, with all information and documentation with
respect to its business, financial condition and other matters as Xxxx may deem
relevant based on the standards of reasonableness and good faith and shall
request in connection with Xxxx'x performance under this Agreement, including,
without limitation, copies of all correspondence with the Commission,
certificates of its officers, opinions of its counsel and comfort letters from
its auditors. The above-mentioned certificates, opinions of counsel and comfort
letters shall be provided to Xxxx as Xxxx may request on the effective date of
the Registration Statement and on the Closing Date. Western United will make
reasonably available to Xxxx, its auditors, counsel, and officers and directors
to discuss with Xxxx any aspect of Western United which Xxxx may deem relevant.
In addition, Western United, at Xxxx'x request, will cause to be delivered to
Xxxx copies of all certificates, opinions, letters and reports to be delivered
to the underwriter or underwriters, as the case may
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be, pursuant to any underwriting agreement executed in connection with the
Offering or otherwise, and shall cause the person issuing such certificate,
opinion, letter or report to authorize Xxxx to rely thereon to the same extent
as if addressed directly to Xxxx. Western United represents and warrants to Xxxx
that all such information and documentation provided pursuant to this paragraph
6 will not contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statement therein not misleading. In
addition, Western United will promptly advise Xxxx of all telephone
conversations with the Commission which relate to or may affect the Offering.
SECTION 7. INDEMNIFICATION.
(a) Subject to the conditions set forth below, and in addition
to any rights of indemnification and contribution to which Xxxx may be
entitled pursuant to any agreement among underwriters, underwriting
agreement or otherwise, and to the extent allowed by law, Western
United and MIS hereby agree that they will indemnify and hold Xxxx and
each person controlling, controlled by or under common control with
Xxxx within the meaning of Section 15 of the Act or Section 20 of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), or
the rules and regulations thereunder (individually, a "Xxxx Indemnified
Person") harmless from and against any and all loss, claim, damage,
liability, cost or expense whatsoever to which such Xxxx Indemnified
Person may become subject under the Act, the Exchange Act, or other
federal or state statutory law or regulation, at common law or
otherwise, arising out of, based upon, or in any way related or
attributed to (i) this Agreement, (ii) any untrue statement or alleged
untrue statement of a material fact contained in the Registration
Statement or Prospectus or any other filing, report, document, release
or communication, whether oral or written, referred to in paragraph 5
hereof or the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements
therein not misleading, (iii) any application or other document
executed by Western United or MIS or based upon written information
furnished by Western United or MIS filed in any jurisdiction in order
to qualify the Preferred Stock under the securities or Blue Sky laws
thereof, or the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the
statements therein not misleading, or (iv) the breach of any
representation or warranty made by Western United or MIS in this
Agreement. Western United and MIS further agree that upon demand by a
Xxxx Indemnified Person at any time or from time to time, they will
promptly reimburse such Xxxx Indemnified Person for, or pay, any loss,
claim, damage, liability, cost or expense as to which Western United
and MIS have indemnified such person pursuant hereto. Notwithstanding
the foregoing provisions of this paragraph 7, any such payment or
reimbursement by Western United and MIS of fees, expenses or
disbursement incurred by a Xxxx Indemnified Person in any proceeding in
which a final judgment by a court of competent jurisdiction (after all
appeals or the expiration of time to appeal) is entered against such
Xxxx Indemnified Person as a direct result of such person's negligence,
bad faith or willful misfeasance will be promptly repaid to Western
United and MIS. In addition, anything in this paragraph 7 to the
contrary notwithstanding, neither Western United or MIS shall be liable
for any settlement of any action or proceeding effected without their
written consent.
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(b) Promptly after receipt by a Xxxx Indemnified Person under
sub-paragraph (a) above of notice of the commencement of any action,
such Xxxx Indemnified Person will, if a claim in respect thereof is to
be made against Western United and MIS under paragraph (a), notify
Western United and MIS in writing of the commencement thereof; but the
omission to so notify Western United and MIS will not relieve Western
United and MIS from any liability which they may have to any Xxxx
Indemnified Person otherwise than under this paragraph 7 if such
omission shall not have materially prejudiced Western United's or MIS's
ability to investigate or to defend against such claim. In case any
such action is brought against any Xxxx Indemnified Person, and such
Xxxx Indemnified Person notifies Western United and MIS of the
commencement thereof, Western United and MIS will be entitled to
participate therein and, to the extent that it may elect by written
notice delivered to the Xxxx Indemnified Person promptly after
receiving the aforesaid notice from such Xxxx Indemnified Person, to
assume the defense thereof with counsel reasonably satisfactory to such
Xxxx Indemnified Person; PROVIDED, HOWEVER, that if the defendants in
any such action include both the Xxxx Indemnified Person and Western
United or MIS or any corporation controlling, controlled by or under
common control with Western United or MIS, or any director, officer,
employee, representative or agent of any thereof, or any other
"Qualified Independent Underwriter" retained by Western United in
connection with the Offering and the Xxxx Indemnified Person shall have
reasonably concluded that there may be legal defenses available to it
which are different from or additional to those available to such other
defendant, the Xxxx Indemnified Person shall have the right to select
separate counsel to represent it. Upon receipt of notice from Western
United and MIS to such Xxxx Indemnified Person of its election so to
assume the defense of such action and approval by the Xxxx Indemnified
Person of counsel, neither Western United nor MIS will be liable to
such Xxxx Indemnified Person under this paragraph 7 for any fees of
counsel subsequently incurred by such Xxxx Indemnified Person in
connection with the defense thereof (other than the reasonable costs of
investigation subsequently incurred by such Xxxx Indemnified Person)
unless (i) the Xxxx Indemnified Person shall have employed separate
counsel in accordance with the provision of the next preceding sentence
(it being understood, however, that Western United and MIS shall not be
liable for the expenses of more than one separate counsel in any one
jurisdiction representing the Xxxx Indemnified Person, which counsel
shall be approved by Xxxx), (ii) Western United and MIS, within a
reasonable time after notice of commencement of the action, shall not
have employed counsel reasonably satisfactory to the Xxxx Indemnified
Person to represent the Xxxx Indemnified Person, or (iii) Western
United and MIS shall have authorized in writing the employment of
counsel for the Xxxx Indemnified Person at the expense of Western
United and MIS, and except that, if clause (i) or (iii) is applicable,
such liability shall be only in respect of the counsel referred to in
such clause (i) or (iii).
(c)
(i) Subject to the conditions set forth below, and in
addition to any rights of indemnification and contribution to
which Western United may be entitled pursuant to any agreement
among underwriters, underwriting agreement or otherwise, and
to the extent allowed by law, Xxxx hereby agrees that it will
indemnify and hold Western United and each person controlling,
controlled by or
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under common control with Western United within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act, or
the rules and regulations thereunder (individually, a "Western
United Indemnified Person") harmless from and against any and
all loss, claim, damage, liability, cost or expense whatsoever
to which such Western United Indemnified Person may become
subject under the Act, the Exchange Act, or other federal or
state statutory law or regulation, at common law or otherwise,
arising out of, based upon, or in any way related or
attributed to the failure of Xxxx to be a "qualified
independent underwriter" as contemplated by this Agreement.
Xxxx further agrees that upon demand by a Western United
Indemnified Person at any time or from time to time, it will
promptly reimburse such Western United Indemnified Person for,
or pay, any loss, claim, damage, liability, cost or expense as
to which Xxxx has indemnified such person pursuant hereto.
Notwithstanding the foregoing provisions of this paragraph 7,
any such payment or reimbursement by Xxxx of fees, expenses or
disbursement incurred by a Western United Indemnified Person
in any proceeding in which a final judgment by a court of
competent jurisdiction (after all appeals or the expiration of
time to appeal) is entered against such Western United
Indemnified Person as a direct result of such person's
negligence, bad faith or willful misfeasance will be promptly
repaid to Xxxx. In addition, anything in this paragraph 7 to
the contrary notwithstanding, Xxxx shall not be liable for any
settlement of any action or proceeding effected without its
written consent. Xxxx and Western United agree that they shall
each follow the procedures set forth in paragraph 7(b) and (d)
with respect to any claim against Xxxx hereunder.
(ii) Subject to the conditions set forth below, and
in addition to any rights of indemnification and contribution
to which MIS may be entitled pursuant to any agreement among
underwriters, underwriting agreement or otherwise, and to the
extent allowed by law, Xxxx hereby agrees that it will
indemnify and hold MIS and each person controlling, controlled
by or under common control with MIS within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act, or
the rules and regulations thereunder (individually, a "MIS
Indemnified Person") harmless from and against any and all
loss, claim, damage, liability, cost or expense whatsoever to
which such MIS Indemnified Person may become subject under the
Act, the Exchange Act, or other federal or state statutory law
or regulation, at common law or otherwise, arising out of,
based upon, or in any way related or attributed to the failure
of Xxxx to be a "qualified independent underwriter" as
contemplated by this Agreement. Xxxx further agrees that upon
demand by a MIS Indemnified Person at any time or from time to
time, it will promptly reimburse such MIS Indemnified Person
for, or pay, any loss, claim, damage, liability, cost or
expense as to which Xxxx has indemnified such person pursuant
hereto. Notwithstanding the foregoing provisions of this
paragraph 7, any such payment or reimbursement by Xxxx of
fees, expenses or disbursement incurred by a MIS Indemnified
Person in any proceeding in which a final judgment by a court
of competent jurisdiction (after all appeals or the expiration
of time to appeal) is entered against such MIS Indemnified
Person as a direct result of such person's negligence, bad
faith or willful misfeasance will be promptly repaid to Xxxx.
In addition, anything in this paragraph 7 to the contrary
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notwithstanding, Xxxx shall not be liable for any settlement
of any action or proceeding effected without its written
consent. Xxxx and MIS agree that they shall each follow the
procedures set forth in paragraph 7(b) and (d) with respect to
any claim against Xxxx hereunder.
(d) In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in paragraph 7
is due in accordance with its terms but is for any reason held by a
court to be unavailable from Western United and MIS to Xxxx on grounds
of policy or otherwise, Western United, MIS and Xxxx shall contribute
to the aggregate losses, claims, damages and liabilities (including
legal or other expenses reasonably incurred in connection with
investigating or defending the same) to which Western United, MIS and
Xxxx may be subject in such proportion so that Xxxx is responsible for
that portion represented by the percentage that its fee under this
Agreement bears to the public offering price appearing on the cover
page of the Prospectus and Western United and MIS are responsible for
the balance, except as Western United and MIS may otherwise agree to
reallocate a portion of such liability with respect to such balance
with any other person, including, without limitation, any other
"Qualified Independent Underwriter"; Notwithstanding anything in this
Agreement to the contrary (i) in no case shall Xxxx be responsible for
any amount in excess of the fee set forth in paragraph 4 above and (ii)
no person guilty of fraudulent misrepresentation within the meaning of
Section 11(f) of the Act shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation. For
purposes of this paragraph (d), any person controlling, controlled by
or under common control with Xxxx, or any partner, director, officer,
employee, representative or any agent of any thereof, shall have the
same rights to contribution as Xxxx and each person who controls
Western United or MIS within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act, each officer of Western United who
shall have signed the Registration Statement and each director of
Western United and MIS shall have the same rights to contribution as
Western United and MIS, subject in each case to clause (i) of this
paragraph (d). Any party entitled to contribution will, promptly after
receipt of notice of commencement of any action, suit or proceeding
against such party in respect of which a claim for contribution may be
made against the other party under this paragraph (d), notify such
party from whom contribution may be sought, but the omission to so
notify such party shall not relieve the party from whom contribution
may be sought from any other obligation it or they may have hereunder
or otherwise than under this paragraph (d). The indemnity and
contribution agreements contained in this paragraph 7 shall remain
operative and in full force and effect regardless of any investigation
made by or on behalf of any Xxxx Indemnified Person, any Western United
Indemnified Person, any MIS Indemnified Person or termination of this
Agreement.
SECTION 8. AUTHORIZATION BY WESTERN UNITED. Western United represents
and warrants to Xxxx and MIS that this Agreement has been duly authorized,
executed and delivered by Western United and constitutes a valid and binding
obligation of Western United.
SECTION 9. AUTHORIZATION BY MIS. MIS represents and warrants to Xxxx
and Western United that this Agreement has been duly authorized, executed and
delivered by MIS and constitutes a valid and binding obligation of MIS.
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SECTION 10. AUTHORIZATION BY XXXX. Xxxx represents and warrants to MIS
and Western United that this Agreement has been duly authorized, executed and
delivered by Xxxx and constitutes a valid and binding obligation of Xxxx.
SECTION 11. NOTICE. Whenever notice is required to be given pursuant to
this Agreement, such notice shall be in writing and shall be mailed by first
class mail, postage prepaid, addressed (a) if to Xxxx, at 00 Xxxxxxxxx Xxxxx,
Xxxxxxx Xxxxx, XX 00000, Attention: Xxxxx Xxxxxxxx; (b) if to Western United, at
000 X. 0xx. Xxxxxx, Xxxxxxx, Xxxxxxxxxx 00000, Attention: Xxxxxxx X.
Xxxxxxxxxxx, General Counsel; and (c) if to MIS, at 000 Xxxx Xxxxx Xxxxxx,
Xxxxxxx, Xxxxxxxxxx 00000, Attention: Xxx Xxxxxxxxxx.
SECTION 12. GOVERNING LAW. This Agreement shall be construed (both as
to validity and performance) and enforced in accordance with and governed by the
laws of the State of Washington applicable to agreements made and to be
performed wholly within such jurisdiction.
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IN WITNESS WHEREOF, this Agreement has been executed by the parties
hereto as of the day and year first above mentioned.
WESTERN UNITED LIFE ASSURANCE
COMPANY
By: /s/ Xxxx Xxx Xxxxxxx
-------------------------------------
Xxxx Xxx Xxxxxxx, President
METROPOLITAN INVESTMENT SECURITIES, INC.
By: /s/ Xxxxx Xxxxxxx
-------------------------------------
Xxxxx Xxxxxxx, Secretary
XXXX CAPITAL PARTNERS, LLC
By: /s/ Xxxxx Xxxxxxxx
-------------------------------------
Xxxxx Xxxxxxxx,
Managing Director, Corporate Finance
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SCHEDULE A
WESTERN UNITED LIFE ASSURANCE COMPANY
The Pricing Recommendation Letter of Xxxx is conditioned upon Western
United's undertaking to maintain the distribution rate of the Preferred Stock in
accordance with the formula set forth below:
Notwithstanding anything to the contrary herein the Applicable Rate for
any monthly distribution period shall not, in any event, be less than 6% or
greater than 14% per annum. The Investment Committee may, however, by
resolution, authorize distributions in excess of the Applicable Rate. The
Applicable Rate for any monthly distribution period shall be the highest of the
Treasury Xxxx Rate, the Ten Year Constant Maturity Rate and the Twenty Year
Constant Maturity Rate (each as defined in the Preferred Stock Authorizing
Resolution) plus 0.10% for such dividend period. In the event that the Company
determines in good faith that for any reason one or more of such rates cannot be
determined for any distribution period, then the Applicable Rate for such period
shall be the higher of whichever of such rates can be so determined.
SCHEDULE B
WESTERN UNITED LIFE ASSURANCE COMPANY
VARIABLE RATE, CUMULATIVE PREFERRED STOCK,
SERIES B PRICING
For Distributions Payable On:
-----------------------------------
Distributions Record Date:
--------------------------------------
Applicable Effective Resultant
Date Date Average Rate Rate* Rate
3 Mo Treasury Xxxx +.10% +__%
--------------------- ------------
10 Yr Constant Rate +.10% +__%
--------------------- ------------
20 Yr Constant Rate +.10% +__%
--------------------- ------------
HIGHEST RESULTANT RATE:
------------------------------
MONTHLY DISTRIBUTION PER SHARE:
----------------------
(Highest applicable rate divided by 12)
As resolved by the Board of Directors, distribution will be deemed
declared on the 1st day of each month, payable on the 20th of each month to the
holders of record on the 5th of each month.
* Includes any distribution authorized by the Investment Committee in
excess of the Applicable Rate.
---------------------------
Authorized Signature
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