EXHIBIT 1.1
WESTERN UNITED HOLDING COMPANY
AND
METROPOLITAN INVESTMENT SECURITIES, INC.
SELLING AGREEMENT
This agreement (the "Agreement") made as of the 21st day of June, 2002,
by and between WESTERN UNITED HOLDING COMPANY, a Washington corporation
("Western United") and METROPOLITAN INVESTMENT SECURITIES, INC., a Washington
corporation (the "Selling Agent").
WITNESSETH:
WHEREAS, Western United 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 A (the "Preferred Stock") pursuant to a
Registration Statement on Form S-1 (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, an affiliate of Western United, 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:
1. APPOINTMENT OF SELLING AGENT. Western United 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. Western
United 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.
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 Western United 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 U.S. Bank Trust National
Association, as escrow agent ("U.S. Bank"), in accordance with the Escrow
Agreement (the "Escrow Agreement") among Western United, Selling Agent and U.S.
Bank. Upon the sale of at least the Minimum Securities (as defined in the Escrow
Agreement) and termination of the escrow account, the Selling Agent will
deliver, by noon of the next business day after receipt, all cash and checks
received from the subscribers directly to Western United.
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.
The Selling Agent undertakes to comply with all applicable NASD Rules and
Regulations, including the "Papilsky Rules," in performing its obligations
hereunder.
3. AMENDMENT OF THE REGISTRATION STATEMENT AND PROSPECTUS. Western United
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 Western United 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 WESTERN UNITED. Western United 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, Western United 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.
5. REPRESENTATIONS AND WARRANTIES. Western United 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 Western United 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) Western United 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.
2
(iii) 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 and fully
paid.
(iv) This Agreement has been duly and validly authorized, executed
and delivered on behalf of Western United and is a valid and
binding agreement in accordance with its terms.
6. INDEMNIFICATION. Western United 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 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. Western United 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, and accounting fees and expenses. In the event
of termination of the Offering, Selling Agent will be reimbursed only for its
actual accountable out-of-pocket expenses, and commissions will be paid only on
Preferred Stock actually sold. The commission payable upon sale of the Preferred
Stock shall be a maximum of 6.00% of the investment amount actually sold. No
commissions will be paid if the Offering is terminated before the Minimum
Securities are sold.
8. GOVERNING LAW. This Agreement shall be deemed to be made under and
governed by the laws of the State of Washington.
3
IN WITNESS WHEREOF, this Agreement has been executed by the parties
hereto as of the day and year first above mentioned.
WESTERN UNITED HOLDING COMPANY
By
---------------------------------
C. Xxxx Xxxxxxxx, Xx., President
METROPOLITAN INVESTMENT SECURITIES,
INC.
By
---------------------------------
Xxxxx Xxxxxxx, Secretary
4
