SUMMIT SECURITIES, INC.
AND
METROPOLITAN INVESTMENT SECURITIES, INC.
SELLING AGREEMENT
This agreement (the "Agreement") is made as of the 25th day of May, 2000,
by and between SUMMIT SECURITIES, INC., an Idaho corporation ("Summit") and
METROPOLITAN INVESTMENT SECURITIES, INC., a Washington corporation (the "Selling
Agent").
WITNESSETH:
WHEREAS, Summit proposes to issue and sell or exchange for outstanding
investment certificates (the "Offering") up to $22,500,000 principal amount of
its __% Notes due 2005 (the "Notes") 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, a subsidiary of Summit, for good and valuable
consideration the receipt of which is hereby acknowledged, desires to assist in
the sale or exchange of the Notes 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. Summit hereby appoints the Selling
Agent as its managing agent to offer and sell the Notes or exchange the Notes
for Summit's Investment Certificates Series A and Series B (collectively the
"Certificates") at the price 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 Notes 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 Notes on the terms stated herein and in the
Registration Statement and Prospectus and to notify Summit of the number of
Notes with respect to which subscription agreements have been executed by
subscribers. It is understood that the Selling Agent has no commitment to sell
the Notes other than to use its best efforts. The Selling Agent will deposit, by
noon of the next business day after receipt, all cash and checks received from
the subscribers in a trust account (the "Trust Account"), in compliance with the
rules and regulations of the SEC applicable to a best efforts or other
contingent offering, to be held in the Trust Account until the conditions to the
Offering have been satisfied. Upon satisfaction of the conditions to the
Offering, the Selling Agent will cause the delivery of all funds in the Trust
Account to Summit by noon of the next business day. If the Offering is
terminated without having satisfied the conditions to the Offering, the Selling
Agent will cause the funds in the Trust Account to be
returned promptly to their rightful owners in compliance with the rules and
regulations of the SEC and the National Association of Securities Dealers, Inc.
All checks received by the Selling Agent from subscribers shall be made payable
to U.S. Bank Trust National Association, as escrow agent. 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.
The Selling Agent will also act as the exchange agent for the Offering. The
Selling Agent will cause all certificates and other documents, that are tendered
by a holder of Certificates, to be held in escrow until the end of the Offering.
The Selling Agent will inform Summit of the certificate number and principal
amount of each Certificate tendered, and supply copies of all documents tendered
to Summit promptly after each Certificate is tendered. If the conditions to the
Offering set forth in the Registration Statement are met, the Selling Agent and
Summit agree that Summit will decide and instruct the Selling Agent on which
Certificate certificates to accept as validly tendered for exchange, if any, and
Summit will instruct the Selling Agent on which Certificate certificates to
promptly return, or cause to be returned, to their respective holders. If the
Offering is terminated, Selling Agent will promptly return, or cause to be
returned, all Certificate certificates promptly to their respective holders.
SECTION 3. AMENDMENT OF THE REGISTRATION STATEMENT AND PROSPECTUS. Summit
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 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 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 SUMMIT. Summit 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 Notes, 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 Notes, 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 reinstating the registration of the Notes.
SECTION 5. REPRESENTATIONS AND WARRANTIES. Summit 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
Summit and do not contain any
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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) Summit is a corporation duly organized and validly existing under
the laws of the State of Idaho with full corporate power to perform its
obligations as described in the Registration Statement and the Prospectus.
(c) The Notes, 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 Summit, in
accordance with their terms.
(d) This Agreement has been duly and validly authorized, executed and
delivered on behalf of Summit and is a valid and binding agreement in
accordance with its terms.
SECTION 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 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.
SECTION 7. FEES AND EXPENSES. Summit will pay all expenses incurred in
connection with the Offering and sale of the Notes, including without
limitation, fees and expenses of counsel, blue sky fees and expenses (including
legal fees), printing expenses, exchange listing fees, accounting fees and
expenses, and fees and expenses of U.S. Bank Trust National Association, as
Trustee and as Escrow Agent. 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 Notes to an investor who is not exchanging Certificates for Notes shall be a
maximum of 7.00% of the investment amount. The commission payable upon the
exchange of Certificates for Notes shall be a maximum of 3.50% of the principal
amount exchanged. Exchange commissions will only be payable with respect to
validly tendered Certificates that are validly accepted for exchange by Summit,
on the terms described in the Registration Statement.
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.
SUMMIT SECURITIES, INC.
By /s/ Xxx Xxxxxx
---------------------------
Xxx Xxxxxx, President
METROPOLITAN INVESTMENT SECURITIES, INC.
By /s/ C. Xxxx Xxxxxxxx, Xx.
---------------------------
C. Xxxx Xxxxxxxx, Xx., President
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