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").
WITNESSETH:
WHEREAS, Summit proposes to issue and sell 150,000 shares of Variable
Rate Cumulative Preferred Stock, Series S-3 (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.
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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 does not presently 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:
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(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.
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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, of even date hereof 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 ______________________________________________
C. Xxxx Xxxxxxxx, President
