FORM OF SELLING AGREEMENT
This Agreement made as of the ____ day of _______________, 19___ by and
between METROPOLITAN MORTGAGE & SECURITIES CO., INC., an Washington
corporation ("Metropolitan") and METROPOLITAN INVESTMENT SECURITIES, INC., a
Washington corporation (the "Selling Agent").
WITNESSETH:
WHEREAS, Metropolitan proposes to issue and sell $100,000,000 principal
amount of its Investment Debentures, Series III (the "Debentures") pursuant to
a Registration Statement (or Registration Statements) and a Prospectus (or
Prospectuses) filed under the Securities Act of 1933; and
WHEREAS, the Selling Agent, an affiliate of Metropolitan, for good and
valuable consideration the receipt of which is hereby acknowledged, desires to
assist in the sale of the Debentures upon the terms and in reliance upon the
representations, warranties and agreements set forth herein;
NOW, THEREFORE, the parties hereto agree as follows:
1. Appointment of Selling Agent.
Metropolitan hereby appoints the Selling Agent as its managing
agent to offer and sell the Debentures at the prices 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 Debentures and authorizes the
Selling Agent to distribute the Registration Statements and
Prospectuses.
2. Undertaking of Selling Agent.
The Selling Agent agrees to use its best efforts to sell the
Debentures on the terms stated herein and in the Registration
Statement and Prospectus and to notify Metropolitan of the number
of Debentures with respect to which subscription agreements have
been executed by
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subscribers. It is understood that the Selling Agent has no
commitment to sell the Debentures other than to use its best
efforts. The Selling Agent will deliver all cash and checks
received from the subscribers to Metropolitan by noon of the next
business day. All checks received by the Selling Agent from
subscribers shall be made payable to Metropolitan. The Selling
Agent will not maintain discretionary customer accounts and
undertakes that it will not, in any event make discretionary
purchases for the accounts of customers.
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.
4. Undertakings of Metropolitan.
Metropolitan will promptly notify the Selling Agent in the event
of the issuance by the Securities and Exchange Commission ("SEC")
of any stop order or other order suspending the Registration of
the Debentures, 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 Debentures, 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 Debentures.
5. Representations and Warranties.
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Metropolitan represents and warrants to the Selling Agent that:
(i) 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.
(ii) 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.
(iii) The Debentures, when issued and sold pursuant to the terms
hereof and of the Registration Statement, Prospectus and
subscription agreements, will constitute valid, binding and
legal outstanding obligations of Metropolitan, in
accordance with their terms.
(iv) 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.
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 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
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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.
7. Fees and Expenses.
Metropolitan will pay all expenses incurred in connection with the
offering and sale of the Debentures, including without limitation,
fees and expenses of counsel, blue sky fees and expenses
(including legal fees), printing expenses, accounting fees and
expenses, and fees and expenses of First Trust, as Trustee.
In the event of termination of the offering, Selling Agent will be
reimbursed only for its actual accountable out-of-pocket expenses.
The maximum commissions payable upon sale of the Debentures shall
be 6% of the investment amount.
8. Governing Law.
This Agreement shall be deemed to be made under and governed by
the laws of the State of Washington.
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 ___________________________________
C. Xxxx Xxxxxxxx, Xx., President
METROPOLITAN INVESTMENT SECURITIES, INC.
By _____________________________________
Xxxxx Xxxxxxx, Secretary
