FORM OF
VARIABLE RATE CUMULATIVE PREFERRED STOCK
SELLING AGREEMENT
This Agreement made as of , by and
between SUMMIT SECURITIES, INC., an Idaho corporation ("Summit") and
METROPOLITAN INVESTMENT SECURITIES, INC., a Washington corporation
(the "Selling Agent").
WHEREAS, Summit proposes to issue and sell 150,000 shares of
WITNESSETH:
Variable Rate Cumulative Preferred Stock, Series S-2 (par value $10.00
per share) ("Preferred Stock") 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 Summit, 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.
Summit hereby appoints the Selling Agent as its exclusive agent to
offer and sell the Preferred Stock at the prices and in the manner
described in the Registration Statement and the Prospectus and in
compliance with the terms and conditions thereof. Summit 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 Summit 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 all cash and checks
received from subscribers to Summit by noon of the next business day.
All checks received by the Selling Agent from subscribers shall be
made payable to Summit.
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.
3. AMENDMENT OF THE REGISTRATION STATEMENT AND PROSPECTUS.
Summit agrees, at its expense, to amend or supplement that
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, it (i) the
Selling Agent advises Summit 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 which make any of the
statement s therein misleading. The representation, warranties, and
obligations to indemnify all parties thereto contained herein relating
to the Registration Statement or the Prospectus shall attach to any
such amendment or supplement.
4. UNDERTAKINGS OR SUMMIT.
Summit 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 orders us pending the Registration of the Preferred
Stock, or in the event of the institution or intended institution of
any action or preceding for that purpose. In the event that the SEC
shall enter a stop order suspending or otherwise suspend the
Registration of the Preferred Stock, Summit will make every reasonable
effort to obtain as promptly as possible the entry of an appropriate
order setting aside such stop order or otherwise reinstate the
Registration of the Preferred Stock.
5. REPRESENTATIONS AND WARRANTIES.
Summit 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 Summit 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) Summit is a corporation duly organized and validly existing
under the Washington Business Corporation Act with full
corporate power to perform its obligations as described
int he Registration Statement and the Prospectus.
(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, fully
paid and nonassessable.
(iv) This Agreement has been duly and validly authorized,
executed, and delivered on behalf of Summit and is a valid
and binding agreement of Summit in accordance with its
terms.
6. INDEMNIFICATION.
Summit 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 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 (i) 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.
Summit 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. Provided, however, that in the event of termination of the
offering, Selling Agent will only be reimbursed for its actual,
accountable, out-of-pocket expenses.
The maximum commissions payable upon sale of the Preferred Stock
shall be 6% of the investment amount.
8. This agreement shall not in any way affect, modify or change
the terms of that certain Selling Agreement, dated
between the parties hereto which provides
for the sale of Investment Certificates.
9. 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.
SUMMIT SECURITIES, INC.
By ______________________________________________
Xxx Xxxxxx, President
METROPOLITAN INVESTMENT SECURITIES, INC.
By ______________________________________________
Xxxxx X. Xxxxxxx, Vice President
