Document:

Exhibit 10.13

 

November 14,
2007

 

Prospect Acquisition Corp.

695 East Main Street

Stamford, Connecticut  06901

 

Re: Initial Public Offering of Prospect
Acquisition Corp.

 

Ladies and Gentlemen:

 

This letter is being delivered
to you in accordance with the Underwriting Agreement (the “Underwriting
Agreement”) entered into by and between Prospect Acquisition
Corp., a Delaware corporation (the “Company”),
and Citigroup Global Markets Inc., as representative of the underwriters named
therein (the “Underwriters”), relating to
an underwritten initial public offering (the “IPO”)
of the Company’s units (the “Units”),
each Unit composed of one share of the Company’s common stock, par value
$0.0001 per share (the “Common Stock”),
and one warrant, which is exercisable for one share of Common Stock (the “Warrants”). Certain capitalized
terms used herein are defined in paragraph 3 hereof.

 

In order to induce the Company
and the Underwriters to enter into the Underwriting Agreement and to proceed
with the IPO and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the undersigned hereby agree with
the Company as follows:

 

1.        The undersigned agree that from the
effective date of the Registration Statement on Form S-1 filed by the Company
in connection with the IPO until the earlier of (i) the consummation of an
Initial Business Combination or (ii) 24 months from the date of the final
prospectus relating to the IPO, the Company shall have the right of first
review (the “Right of First Review”) with
respect to business combination opportunities of the undersigned, and companies
or other entities which the undersigned manage or control, in the financial
services sector or a related business with an enterprise value of $195 million
or more. The undersigned will first offer, and will cause such companies or
other entities under their management or control to first offer, any such
business combination opportunity to the Company. The undersigned will not, and
will cause each company or other entity under their management or control not
to, pursue such business combination opportunity unless and until a majority of
the Company’s disinterested directors has determined for any reason that the
Company will not pursue such opportunity.

 

2.        Each of the undersigned has the full
right and power, without violating any agreement by which he or it is bound, to
enter into this letter agreement.

 

3.        As used herein, (i) “Initial
Business Combination” shall mean the acquisition through a merger, capital
stock exchange, asset acquisition, stock purchase, reorganization or other
similar business combination, of one or more businesses or assets in connection
with which the Company will require that (a) a majority of the shares of
Common Stock voted by the Public Stockholders are voted in favor of such
acquisition, (b) holders of a majority of the outstanding 

 

 

shares of Common Stock approve
an amendment to the Company’s certificate of incorporation to provide for the
Company’s perpetual existence and (c) Public Stockholders owning no more
than 30% (minus one share) of the IPO Shares exercise their conversion rights; (ii) “IPO
Shares” shall mean the shares of Common Stock underlying the Units issued in
the IPO; and (iii) “Public Stockholders” shall mean purchasers of Common
Stock in the IPO or in the secondary market, including any of the Company’s
officers or directors or their affiliates, including the undersigned, to the
extent that they purchase or acquire Common Stock in the IPO or the secondary
market.

 

4.        Each of the undersigned acknowledges and
understands that the Company and the Underwriters will rely upon the
agreements, representations and warranties set forth herein in proceeding with
the IPO. Nothing contained herein shall be deemed to render the Underwriters a
representative of, or a fiduciary with respect to, the Company, its
stockholders, or any creditor or vendor of the Company with respect to the
subject matter hereof.

 

5.        This letter agreement shall be binding
on the undersigned and their successors and assigns. This letter agreement
shall terminate on the earlier of (i) the consummation of an Initial
Business Combination and (ii) 24 months from the date of the final
prospectus relating to the IPO; provided that
such termination shall not relieve the undersigned from liability for any
breach of this letter agreement prior to its termination.

 

6.        This letter agreement shall be governed
by and interpreted and construed in accordance with the laws of the State of
New York applicable to contracts formed and to be performed entirely within the
State of New York, without regard to the conflicts of law provisions thereof to
the extent such principles or rules would require or permit the application
of the laws of another jurisdiction.

 

7.        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 party against whom such
amendment, change, waiver, alteration or modification is to be enforced.

 

[Signature
Page Follows]

 

2

 

IN WITNESS WHEREOF, the parties
hereto have executed this agreement as of the date first set forth above.

 

 

	
   

  	
  FLAT RIDGE
  INVESTMENTS LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
    /s/
  David A. Minella

  
	
   

  	
  Name:  David
  A. Minella

  
	
   

  	
  Title:    Managing Member

  
	
   

  	
   

  	
   

  
	
   

  	
  LLM
  STRUCTURED EQUITY FUND L.P.

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
     /s/
  Patrick J. Landers

  
	
   

  	
  Name: Patrick
  J. Landers

  
	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
  LLM
  INVESTORS L.P.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
    /s/
  Patrick J. Landers

  
	
   

  	
  Name:  Patrick J. Landers

  
	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
  CAPITAL
  MANAGEMENT SYSTEMS, 

  INC.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
     /s/
  Richard A. Mitchell

  
	
   

  	
  Name: Richard
  A. Mitchell

  
	
   

  	
  Title:   V.P.

  
	
   

  	
   

  	
   

  
	
   

  	
  /s/ David A.
  Minella

  
	
   

  	
  David A.
  Minella

  
	
   

  	
   

  	
   

  
	
   

  	
  /s/ Patrick
  J. Landers

  
	
   

  	
  Patrick J.
  Landers

  
	
   

  	
   

  	
   

  
	
   

  	
  /s/ James J.
  Cahill

  
	
   

  	
  James J.
  Cahill

  
	
   

  	
   

  	
   

  
	
   

  	
  /s/ Michael
  P. Castine

  
	
   

  	
  Michael P.
  Castine

  
	
   

  	
   

  	
   

  
	
   

  	
  /s/ William Cvengros

  
	
   

  	
  William
  Cvengros

  
	
   

  	
   

  	
   

  
	
   

  	
  /s/ Michael Downey

  
	
   

  	
  Michael
  Downey

  

 

 

[Signature Page to Right of First Review Agreement]

 

 

	
   

  	
  /s/ Daniel
  Gressel

  
	
   

  	
  Daniel
  Gressel

  
	
   

  	
   

  	
   

  
	
   

  	
  /s/ William Landman

  
	
   

  	
  William
  Landman

  
	
   

  	
   

  	
   

  
	
   

  	
  /s/ John Merchant

  
	
   

  	
  John
  Merchant

  

 

 

	
  ACCEPTED AND
  AGREED:

  	
   

  
	
   

  	
   

  
	
  Prospect
  Acquisition Corp.

  	
   

  
	
   

  	
   

  
	
  By:

  	
       /s/ David A. Minella

  	
   

  
	
   

  	
  David A.
  Minella, Chief Executive Officer

  	
   

  

 

 

[Signature Page to Right of First Review Agreement (cont.)]Exhibit 4.(bb)

 

	
  

  	
  Protective Life Insurance Company
 Home Office: Nashville
  Tennessee

  

  Please send application and funds to:

  
	
   

  	
   

  	
   

  
	
  Modified Guaranteed Annuity Application

  	
  Overnight
 Annuity New Business

  2801 Highway 280 South

  Birmingham, AL 35223

  	
  Postal Mail
 Annuity New Business

  P.O. Box 10648

  Birmingham, AL 35202-0648

  

 

	
  Owner/Participant 1 Name,
  Street, City, State, ZIP

  	
  o Male

  	
      o
  Female

  
	
   

  	
   

  	
   

  
	
   

  	
  Birthdate

  	
  _ _ / _ _ / _ _ _ _ 

  
	
   

  	
   

  	
  MM DD  YYYY

  
	
   

  	
   

  	
   

  
	
   

  	
  Tax ID/SSN

  	
  _ _ _ _ _ _ _ _ _

  
	
   

  	
   

  	
   

  
	
  Owner/Participant 2 Name, Street,
  City, State, ZIP

  	
  o Male

  	
      o
  Female

  
	
  (if applicable)

  	
   

  	
   

  
	
   

  	
  Birthdate

  	
  _ _ / _ _ / _ _ _ _ 

  
	
   

  	
   

  	
  MM DD  YYYY

  
	
   

  	
   

  	
   

  
	
   

  	
  Tax ID/SSN

  	
  _ _ _ _ _ _ _ _ _

  
	
   

  	
   

  	
   

  
	
  Annuitant Name,
  Street, City, State, ZIP

  	
  o Male

  	
      o
  Female

  
	
  (if different than Owner/Participant 1)

  	
   

  	
   

  
	
   

  	
  Birthdate

  	
  _ _ / _ _ / _ _ _ _ 

  
	
   

  	
   

  	
  MM DD  YYYY

  
	
   

  	
   

  	
   

  
	
   

  	
  Tax ID/SSN

  	
  _ _ _ _ _ _ _ _ _

  

 

Primary Beneficiary, if there is
no surviving Owner/Participant.

 

	
  Name

  	
   

  	
  Relationship

  	
   

  	
  %

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

Use “Special Remarks’ for additional Primary Beneficiary information.

 

Contingent Beneficiary

 

	
  Name

  	
   

  	
  Relationship

  	
   

  	
  %

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

Use “Special Remarks’ for additional Contingent Beneficiary
information.

 

Total Annuity Deposit: $                

 

Guaranteed Periods: Please
allocate at least $10,000 to each Guaranteed Period selected.

 

	
  $         3 years

  	
  $         4 years

  	
  $         5 years

  	
  $         6 years

  
	
  $         7 years

  	
  $         8 years

  	
  $         10 years

  	
  $         15 years

  

 

	
  Funding: (Choose one)

  	
  o Cash

  	
  o §1035 Exchange

  	
  o Direct Rollover

  	
  o Indirect Rollover

  	
  o Transfer

  

 

For § 1035 Exchanges, Rollovers and Transfers, only:

·                  Estimated total
amount exchanged or transferred: $                  .

·                  Rate Lock?

o            Yes, please lock the
current interest rates for 60 days.

o            No, please use the
interest rates in effect as of the date the funds are received at Protective.

 

Important
information about the Rate Lock. If you select “Yes”
and we receive the funds within 60 days of the date we received this
application, we will apply the rates in effect on the date we received the
application (regardless of the rates in effect when we receive the funds). If
you select “No”, or if we receive the funds after the 60-day Rate Lock period,
we will apply the rates in effect on the date we receive the funds.

 

	
  Plan Type: (Choose One)

  	
  o Non-Qualified

  	
  o IRA

  	
  o Roth IRA

  	
  o Other
                

  

 

If an IRA includes new contributions, please
complete: $               
for          (current tax
year); $             for          (previous
tax year)

 

	
  Replacement & Other:

  	
   

  	
   

  	
   

  	
   

  
	
  ·      Do you currently have an annuity
  contract or life insurance policy?

  	
   

  	
  o Yes

  	
   

  	
  o No

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ·      Will this annuity change or replace an
  existing annuity contract or life insurance policy?

  	
   

  	
  o Yes

  	
   

  	
  o No

  
	
  (If yes, please provide the company name
  and policy or contract number in “Special Remarks”.)

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ·      Have you purchased any other Protective
  Life annuity contracts this calendar year?

  	
   

  	
  o Yes

  	
   

  	
  o No

  

 

An annuity contract is not a deposit or
obligation of, or guaranteed by, any bank or financial institution. It is not
insured by the Federal Deposit Insurance Corporation or any other government
agency and is subject to investment risk, including the possible loss of
principal.

 

	
  IPD-2081

  	
  11/07

  

 

 

NOTICE TO RESIDENTS OF AZ: On written request
you may ask us to provide you within ten business days, or 30 calendar days if
you are 65 or older, additional factual information regarding the benefits and
provisions of this Contract. If for any reason you are not satisfied, you may
cancel the Contract within that period by returning the Contract to our office,
or the agent who sold it with a written request for cancellation. Return of
this Contract by mail is effective on receipt by us. The returned Contract will
be treated as if we had never issued it. We will promptly return your Purchase
Payment.

 

NOTICE TO RESIDENTS OF CA (AGE 60 AND OLDER):  YOU HAVE PURCHASED AN ANNUITY CONTRACT. REVIEW IT CAREFULLY
FOR LIMITATIONS. YOU MAY CANCEL THE CONTRACT WITHIN 30 DAYS OF THE DATE
YOU RECEIVE IT BY RETURNING IT TO THE INSURANCE COMPANY OR THE AGENT WHO SOLD
YOU THE CONTRACT. WE WILL REFUND YOUR PREMIUM. AFTER 30 DAYS, CANCELLATION OF
THE CONTRACT MAY RESULT IN A SUBSTANTIAL PENALTY, KNOWN AS A SURRENDER
CHARGE.

 

NOTICE TO RESIDENTS OF CO: It is unlawful to
knowingly provide false, incomplete or misleading facts or information to an
insurance company for the purpose of defrauding or attempting to defraud the
company. Penalties may include imprisonment, fines, denial of insurance and
civil damages. Any insurance company or agent of an insurance company who
knowingly provides false, incomplete or misleading facts or information to a
policy holder or claimant for the purpose of defrauding or attempting to
defraud the policy holder or claimant with regard to a settlement or award
payable from insurance proceeds shall be reported to the Colorado Division of
Insurance within the Department of Regulatory agencies.

 

NOTICE TO RESIDENTS OF FL: Any person who
knowingly and with intend to injure, defraud or deceive an insurer, files a
statement of claim or application containing any false, incomplete or
misleading information is guilty of a felony in the third degree.

 

NOTICE TO RESIDENTS OF NJ: Any person who
includes any false or misleading information on an application for an insurance
policy is subject to criminal and civil penalties.

 

NOTICE TO RESIDENTS OF AR, DC, KY, LA, ME, NM, OH, OK, PA AND TN: Any
person who knowingly and with intent to defraud any insurance company or other
person, files an application for insurance or statement of claim containing any
materially false information or conceals for the purpose of misleading,
information concerning any fact material thereto commits a fraudulent insurance
act, which is a crime and subjects such person to criminal and civil penalties.

 

SPECIAL REMARKS:

 

 

 

NOT INSURED BY ANY GOVERNMENT AGENCY · NO BANK GUARANTEE · NOT A DEPOSIT

 

I understand this application will become part of the annuity contract.
The information I provided is true and correct to the best of my knowledge and
belief. The Company deems my statements as representations and not warranties.
The Company may accept instructions from any Owner/Participant on behalf of
every Owner/Participant. If this application is declined, the Company shall
have no liability except to return the annuity deposit.

 

I understand the contract/certificate
contains a market value adjustment.

 

	
  Each of us signed this application in:

  	
   

  	
  on

  	
   

  
	
   

  	
  (City and
  State)

  	
   

  	
  (Date)

  

 

	
  Owner/Participant 1:

  	
   

  	
   

  	
  Owner/Participant 2:

  	
   

  
	
   

  	
   

  	
   

  
	
  Any Owner/Participant daytime phone #:

  	
   

  	
   

  	
  Annuitant:

  	
   

  
	
   

  	
   

  	
  (If not an Owner/Participant.)

  
							

 

Federal law requires the following notice: We
may request or obtain additional information to establish or verify your
identity.

 

Producer Report

 

	
  To the best of your knowledge and belief, does the applicant have an
  existing life insurance policy or annuity contract?

  	
  o

  	
  Yes

  	
  o

  	
  No

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  To the best of your knowledge and belief, does this annuity purchase
  change or replace any existing annuity or life insurance?

  	
  o

  	
  Yes

  	
  o

  	
  No

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  I have given a current Prospectus to the Owner/Participant named in
  this application.

  	
  o

  	
  Yes

  	
  o

  	
  No

  

 

I determined the suitability of this annuity product to the applicant’s
financial objectives and situation by inquiring into the applicant’s:

	
  o financial status

  	
  o tax status

  	
  o investment
  objectives

  	
  o other relevant
  information

  

 

* Comments:

 

Type of unexpired government-issued photo I.D used to verify the
applicant’s identity?                                      
#                             

 

I certify that I have truly and accurately recorded on this application
the information provided to me by the applicant.

 

	
  Sign Producer Name:

  	
   

  	
   

  	
  Print Producer Name:

  	
   

  
	
  Producer #:

  	
   

  	
   

  	
  Agency /Brokerage:

  	
   

  
	
  Producer Phone #:

  	
   

  	
   

  	
  FL Lic. # (if applicable)

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