METROPOLITAN MORTGAGE & SECURITIES CO., INC.
AND
METROPOLITAN INVESTMENT SECURITIES, INC.
SELLING AGREEMENT
This agreement (the "Agreement") is made as of the 31st day of January
2001, by and between METROPOLITAN MORTGAGE & SECURITIES CO., INC., a Washington
corporation ("Metropolitan") and METROPOLITAN INVESTMENT SECURITIES, INC., a
Washington corporation (the "Selling Agent").
WITNESSETH:
WHEREAS, Metropolitan proposes to issue and sell up to a number of
shares as may be designated from time to time (the "Offering"), of its Variable
Rate Cumulative Preferred Stock, Series G and its Variable Rate Cumulative
Preferred Stock, Series H (collectively, the "Preferred Stock") pursuant to a
Registration Statement on Form S-2 (the "Registration Statement") to be filed
with the U.S. Securities and Exchange Commission (the "SEC") and a Prospectus
(the "Prospectus") which is a part of the Registration Statement, all filed
under the Securities Act of 1933, as amended; and
WHEREAS, the Selling Agent, for good and valuable consideration, the
receipt of which is hereby acknowledged, desires to assist in the sale of the
Preferred Stock upon the terms and in reliance upon the representations,
warranties and agreements set forth herein;
NOW, THEREFORE, the parties hereto agree as follows:
SECTION 1. APPOINTMENT OF SELLING AGENT. Metropolitan hereby appoints
the Selling Agent as its managing agent to offer and sell the Preferred Stock at
the price and in the manner described in the Registration Statement and the
Prospectus and in compliance with the terms and conditions thereof. Metropolitan
agrees to provide the Selling Agent with such number of Registration Statements
and Prospectuses as it reasonably requests to enable it to offer the Preferred
Stock and authorizes the Selling Agent to distribute the Registration Statements
and Prospectuses.
SECTION 2. UNDERTAKING OF SELLING AGENT. The Selling Agent agrees to
use its best efforts to sell the Preferred Stock on the terms stated herein and
in the Registration Statement and Prospectus and to notify Metropolitan of the
number of shares of Preferred Stock with respect to which subscription
agreements have been executed by subscribers. It is understood that the Selling
Agent has no commitment to sell the Preferred Stock other than to use its best
efforts. The Selling Agent will deliver, by noon of the next business day after
receipt, all cash and checks received from the subscribers to Metropolitan.
The Selling Agent will not maintain discretionary customer accounts and
undertakes that it will not, in any event make discretionary purchases of the
Preferred Stock for the accounts of customers.
SECTION 3. AMENDMENT OF THE REGISTRATION STATEMENT AND PROSPECTUS.
Metropolitan agrees, at its expense, to amend or supplement the Registration
Statement or the Prospectus and to provide the Selling Agent with sufficient
copies thereof for distribution as contemplated in the Registration Statement or
the Prospectus or otherwise for purposes contemplated by federal and state
securities laws, if (i) the Selling Agent advises Metropolitan that in its
opinion and that of its counsel, such amendment or supplement is necessary or
advisable, or (ii) such amendment or supplement is necessary to comply with
federal or state securities laws or the rules or regulations promulgated
thereunder or is necessary to correct any untrue statement therein or eliminate
any material omissions therein or any omissions therein which make any of the
statements therein misleading. The representations, warranties and obligations
to indemnify all parties hereto contained herein relating to the Registration
Statement or the Prospectus shall attach to any such amendment or supplement.
SECTION 4. UNDERTAKINGS OF METROPOLITAN. Metropolitan will promptly
notify the Selling Agent in the event of the issuance by the SEC of any stop
order or other order suspending the registration of the Preferred Stock, or in
the event of the institution or intended institution of any action or proceeding
for that purpose. In the event that the SEC shall enter a stop order suspending
or otherwise suspend the registration of the Preferred Stock, Metropolitan will
make every reasonable effort to obtain as promptly as possible the entry of an
appropriate order setting aside such stop order or otherwise reinstating the
registration of the Preferred Stock.
SECTION 5. REPRESENTATIONS AND WARRANTIES. Metropolitan represents and
warrants to the Selling Agent that:
(a) The Registration Statement and the Prospectus comply as to
form in all material respects with the Securities Act of 1933 and the
rules and regulations of the SEC thereunder, accurately describe the
operations of Metropolitan and do not contain any misleading or untrue
statements of a material fact or omit to state a material fact which is
necessary to prevent the statements therein from being misleading.
(b) Metropolitan is a corporation duly organized and validly
existing under the laws of the State of Washington with full corporate
power to perform its obligations as described in the Registration
Statement and the Prospectus.
(c) The Preferred Stock, when issued and sold pursuant to the
terms hereof and of the Registration Statement, Prospectus and
subscription agreements, will be legally issued, fully paid and
non-assessable.
(d) This Agreement has been duly and validly authorized,
executed and delivered on behalf of Metropolitan and is a valid and
binding agreement in accordance with its terms.
SECTION 6. INDEMNIFICATION. Metropolitan and the Selling Agent each (a)
agree to indemnify and hold harmless the other (and each person, if any, who
controls the other) against any loss, claim, damage, charge or liability to
which the other (or such controlling persons) may become subject, insofar as
such loss, claim, damage, charge or liability (or actions in respect thereof)
(i) arises out of or is based upon any misrepresentation or breach of warranty
of such
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party herein or any untrue statement or alleged untrue statement of any
material fact contained in the Registration Statement or the Prospectus (or
any amendment or supplement thereto) which relates to or was supplied by such
party, or (ii) arises out of or is based upon the omission or alleged
omission to state therein a material fact relating to such party required to
be stated therein or necessary to make the statements therein not misleading,
including liabilities under the Securities Act of 1933, as amended, and the
Securities Exchange Act of 1934, as amended, and (b) agree to reimburse such
other party (and any controlling persons) for any legal or other fees or
expenses reasonably incurred in connection with investigating or defending
any action or claim arising out of or based upon any of the foregoing.
SECTION 7. FEES AND EXPENSES. Metropolitan will pay all expenses
incurred in connection with the Offering and sale of the Preferred Stock,
including without limitation, fees and expenses of counsel, blue sky fees and
expenses (including legal fees), printing expenses, exchange listing fees, and
accounting fees and expenses. In the event of termination of the Offering, the
Selling Agent will be reimbursed only for its actual accountable out-of-pocket
expenses, and no commissions will be paid. The commission payable upon sale of
the Preferred Stock shall be a maximum of 6.00% of the investment amount.
SECTION 8. GOVERNING LAW. This Agreement shall be deemed to be made
under and governed by the laws of the State of Washington.
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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.
METROPOLITAN MORTGAGE & SECURITIES CO., INC.
By /s/ C. ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇.
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C. ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇., President
METROPOLITAN INVESTMENT SECURITIES, INC.
By:/s/ ▇▇▇▇ ▇▇▇▇▇▇
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Name: ▇▇▇▇ ▇▇▇▇▇▇
Title: General Manager / VP
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