EXHIBIT 1.02
AGREEMENT TO ACT AS "QUALIFIED INDEPENDENT UNDERWRITER"
SUMMIT SECURITIES, INC.
VARIABLE RATE CUMULATIVE PREFERRED STOCK, SERIES S-3
This agreement (the "Agreement") is made as of the 16th day of April, 2003,
among Summit Securities, Inc., an Idaho corporation ("Summit"), Metropolitan
Investment Securities, Inc., a Washington corporation ("MIS"), and Xxxx Capital
Partners, LLC, a California limited liability company ("Xxxx").
WITNESSETH:
WHEREAS, Summit intends to offer up to 2,000,000 shares of its Preferred
Stock, designated as "Variable Rate Cumulative Preferred Stock, Series S-3"
(hereinafter referred to as "Preferred Stock"), which will be offered in
reliance on a registration statement filed on Form S-2 with the Securities and
Exchange Commission; and
WHEREAS, MIS, a broker/dealer and a subsidiary of Summit and a member of
the National Association of Securities Dealers ("NASD"), will be engaged as the
sole managing agent for Summit; and
WHEREAS, pursuant to subparagraph (c) of Rule 2720 of the NASD Conduct
Rules, MIS, as an NASD member, may participate in such offering only if the
yield at which the Preferred Stock offered to the public is no lower than the
yield recommended by a "Qualified Independent Underwriter" as that term is
defined in Rule 2720, subparagraph (b)(15), of the NASD Conduct Rules, and who
participates in the preparation of the registration statement and prospectus
relating to the offering and exercises customary standards of due diligence,
with respect thereto; and
WHEREAS, this agreement (the "Agreement") describes the terms on which
Summit is retaining Xxxx to serve as such a "Qualified Independent Underwriter"
in connection with this offering of Preferred Stock.
NOW, THEREFORE, in consideration of the recitations set forth above, and
the terms, promises, conditions, and covenants herein contained, the parties
hereby contract and agree as follows:
DEFINITIONS
As hereinafter used, except as the context may otherwise require, the term
"Registration Statement" means the registration statement on Form S-2 (including
the related preliminary prospectus, financial statements, exhibits and all other
documents to be filed as a part thereof or incorporated therein) for the
registration of the offer and sale of the Preferred Stock under the Securities
Act of 1933, as amended, and the rules and regulations thereunder (the "Act")
filed with the Securities and Exchange Commission (the "Commission"), and any
amendment thereto, and the term "Prospectus" means the prospectus including any
preliminary or final prospectus and any materials incorporated by reference into
and attached to the Prospectus (including the form of prospectus to be filed
with the Commission pursuant to Rule 424(b) under the Act) and any amendment or
supplement thereto, to be used in connection with the offering.
SECTION 1. RULE 2720 REQUIREMENT. Xxxx hereby confirms its agreement as set
forth in subparagraph (b)(15)(F) of Rule 2720 of the NASD Conduct Rules and
represents that, as appropriate, Xxxx satisfies or at the times designated in
such subparagraph (15) will satisfy the other requirements set forth therein or
will receive an exemption from such requirements from the NASD.
SECTION 2. CONSENT. Xxxx hereby consents to being named in the Registration
Statement and Prospectus as having acted as a "Qualified Independent
Underwriter" solely for the purposes of Rule 2720 referenced herein. Except as
permitted by the immediately preceding sentence or to the extent required by
law, all references to Xxxx in the Registration Statement or Prospectus or in
any other filing, report, document, release or other communication prepared,
issued or transmitted in connection with the offering by Summit or any
corporation controlling, controlled by or under common control with Summit, or
by any director, officer, employee, representative or agent of any thereof,
shall be subject to Xxxx'x prior written consent with respect to form and
substance.
SECTION 3. PRICING FORMULA AND RECOMMENDATION LETTER. Xxxx agrees to render
a written letter of recommendation as to the price above which Summit's
Preferred Stock may not be offered (the "Pricing Recommendation Letter"). It is
understood and agreed by Xxxx that the securities to which this Agreement
relates will be offered on a continuous, best efforts basis, with conditions, by
MIS, as the managing agent, pursuant to the Selling Agreement in effect between
MIS and Summit which is filed as an exhibit to the Registration Statement
referred to above. Summit, through MIS, will continue to offer the securities
according to the terms and conditions of said agreement, including, without
limitation, Schedules "A" and "B," copies of which are attached hereto, and
incorporated herein by reference, in accordance with this Agreement. Xxxx
reserves the right to review and amend its Pricing Recommendation Letter upon
the filing of any post-effective amendment to the Registration Statement or upon
occurrence of any material event which may or may not require such an amendment
to be filed, or at such time as the offering under this registration shall
terminate or otherwise lapse under operation of law.
SECTION 4. FEES AND EXPENSE. It is agreed that Xxxx shall be paid a fee in
the amount of $85,000.00 payable upon delivery of the Pricing Recommendation
Letter referred to in paragraph 3 above. Xxxx shall also be reimbursed for
actual expenses incurred in connection with its duties hereunder in an amount
not to exceed $15,000.
SECTION 5. MATERIAL FACTS. Summit represents and warrants to Xxxx that at
the time the Registration Statement is declared effective and, at the time the
Prospectus is filed with the Commission (including any preliminary prospectus
and the form of prospectus filed with the Commission pursuant to Rule 424(b))
and at all times subsequent thereto, to and including the date on which payment
for, and delivery of, the Preferred Stock to be sold in the Offering is made by
the underwriter or underwriters, as the case may be, participating in the
Offering and by Summit (such date being referred to herein as the "Closing
Date"), the Prospectus (as amended or supplemented if it shall have been so
amended or supplemented) will contain all material statements which are required
to be stated therein in accordance with the Act and will conform to all other
requirements of the federal securities laws, and will not, on such date, include
any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading and that all contracts and documents required by the Act to be filed
or required as exhibits to the Registration Statement have been filed. Summit
further represents and warrants that any further filing, report, document,
release or communication which in any way refers to Xxxx or to the services to
be performed by Xxxx pursuant to this Agreement will not contain any untrue or
misleading statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading.
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Summit further warrants and represents that:
(a) All leases, contracts and agreements referred to in or filed as
exhibits to the Registration Statement to which Summit or its subsidiaries
is a party or by which it is bound are in full force and effect, except as
may otherwise be disclosed in the Registration Statement.
(b) Summit has good and marketable title, except as otherwise
indicated in the Registration Statement and Prospectus, to all of its
assets and properties described therein as being owned by it, free and
clear of all liens, encumbrances and defects except such encumbrances and
defects which do not, in the aggregate, materially affect or interfere with
the use made and proposed to be made of such properties as described in the
Registration Statement and Prospectus; and Summit has no material leased
properties except as disclosed in the Prospectus.
(c) Summit is duly organized under the laws of the State of Idaho and,
as of the effective date of the Registration Statement and at the Closing
Date Summit will be validly existing and in good standing under the laws of
the State of Idaho with full corporate power and authority to own its
properties and conduct its business to the extent described in the
Registration Statement and Prospectus; Summit is duly qualified to do
business as a foreign corporation and is in good standing in all
jurisdictions in which the nature of the business transacted by it or its
ownership of properties or assets makes qualification necessary; the
authorized and outstanding capitalization of Summit is as set forth in the
Prospectus and the description in the Prospectus of the capital stock of
Summit conforms with and accurately describes the rights set forth in the
instruments defining the same.
(d) Summit is not in violation of its Certificate of Incorporation or
Bylaws or in default in the performance or observance of any material
obligation, agreement, covenant or condition contained in any bond,
debenture, note, or other evidence of indebtedness, contract or lease or in
any indenture or loan agreement to which it is a party or by which it is
bound.
(e) The execution, delivery and performance of this Agreement has been
duly authorized by all necessary corporate action on the part of Summit and
MIS and performance of the foregoing agreement and the consummation of the
transactions contemplated thereby, will not conflict with or result in a
breach of any of the terms or constitute a violation of the respective
Certificates of Incorporation or Bylaws of Summit or MIS, or any deed of
trust, lease, sublease, indenture, mortgage, or other agreement or
instrument to which Summit or MIS is a party or by which either of them or
their property is bound, or any applicable law, rule, regulation, judgment,
order or decree of any government, governmental instrumentality or court,
domestic or foreign, having jurisdiction over Summit or MIS or their
properties or obligations; and no consent, approval, authorization or order
of any court or governmental agency or body is required for the
consummation of the transactions contemplated herein and in the other
agreements previously referred to in this paragraph except as may be
required under the Act or under any state securities laws.
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(f) Any certificate signed by an officer of Summit and delivered to
Xxxx pursuant to this Agreement shall be deemed a representation and
warranty by Summit to Xxxx, to have the same force and effect as stated
herein, as to the matters covered thereby.
(g) If any event relating to or affecting Summit shall occur as a
result of which it is necessary, in Xxxx'x opinion, to amend or supplement
the Prospectus in order to make the Prospectus not misleading in the light
of the circumstances existing at the time it is delivered to a purchaser,
Summit undertakes to inform Xxxx of such events within a reasonable time
thereafter, and will forthwith prepare and furnish to Xxxx, without expense
to them, a reasonable number of copies of an amendment or amendments or a
supplement or supplements to the Prospectus (in form and substance
satisfactory to Xxxx) which will amend or supplement the Prospectus so that
as amended or supplemented it will not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the
statements therein in light of the circumstances existing at the time the
Prospectus is delivered to a purchaser, not misleading.
(h) Summit hereby warrants and represents that it will offer the
Preferred Stock in accordance with the pricing formula that is set forth in
Schedules "A" and "B" which are incorporated by reference herein.
(i) All representations, warranties and agreements contained in this
Agreement, or contained in certificates of officers of Summit submitted
pursuant hereto, shall remain operative and in full force and effect,
surviving the date of this Agreement.
SECTION 6. AVAILABILITY OF INFORMATION. Summit hereby agrees to provide
Xxxx, at its expense, with all information and documentation with respect to its
business, financial condition and other matters as Xxxx may deem relevant based
on the standards of reasonableness and good faith and shall request in
connection with Xxxx'x performance under this Agreement, including, without
limitation, copies of all correspondence with the Commission, certificates of
its officers, opinions of its counsel and comfort letters from its auditors. The
above-mentioned certificates, opinions of counsel and comfort letters shall be
provided to Xxxx as Xxxx may request on the effective date of the Registration
Statement and on the Closing Date. Summit will make reasonably available to
Xxxx, its auditors, counsel, and officers and directors to discuss with Xxxx any
aspect of Summit which Xxxx may deem relevant. In addition, Summit, at Xxxx'x
request, will cause to be delivered to Xxxx copies of all certificates,
opinions, letters and reports to be delivered to the underwriter or
underwriters, as the case may be, pursuant to any underwriting agreement
executed in connection with the Offering or otherwise, and shall cause the
person issuing such certificate, opinion, letter or report to authorize Xxxx to
rely thereon to the same extent as if addressed directly to Xxxx. Summit
represents and warrants to Xxxx that all such information and documentation
provided pursuant to this paragraph 6 will not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the statement
therein not misleading. In addition, Summit will promptly advise Xxxx of all
telephone conversations with the Commission which relate to or may affect the
Offering.
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SECTION 7. INDEMNIFICATION.
(a) Subject to the conditions set forth below, and in addition to any
rights of indemnification and contribution to which Xxxx may be entitled
pursuant to any agreement among underwriters, underwriting agreement or
otherwise, and to the extent allowed by law, Summit and MIS hereby agree
that they will indemnify and hold Xxxx, its employees and each person
controlling, controlled by or under common control with Xxxx within the
meaning of Section 15 of the Act or Section 20 of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), or the rules and regulations
thereunder (individually, a "Xxxx Indemnified Person") harmless from and
against any and all loss, claim, damage, liability, cost or expense
whatsoever to which such Xxxx Indemnified Person may become subject under
the Act, the Exchange Act, or other federal or state statutory law or
regulation, at common law or otherwise, arising out of, based upon, or in
any way related or attributed to (i) this Agreement, (ii) any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement or Prospectus or any other filing, report, document,
release or communication, whether oral or written, referred to in paragraph
5 hereof or the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements
therein not misleading, (iii) any application or other document executed by
Summit or MIS or based upon written information furnished by Summit or MIS
filed in any jurisdiction in order to qualify the Preferred Stock under the
securities or Blue Sky laws thereof, or the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, or (iv) the breach of any
representation or warranty made by Summit or MIS in this Agreement. Summit
and MIS further agree that upon demand by a Xxxx Indemnified Person at any
time or from time to time, they will promptly reimburse such Xxxx
Indemnified Person for, or pay, any loss, claim, damage, liability, cost or
expense as to which Summit and MIS have indemnified such person pursuant
hereto. Notwithstanding the foregoing provisions of this paragraph 7, any
such payment or reimbursement by Summit and MIS of fees, expenses or
disbursement incurred by a Xxxx Indemnified Person in any proceeding in
which a final judgment by a court of competent jurisdiction (after all
appeals or the expiration of time to appeal) is entered against such Xxxx
Indemnified Person as a direct result of such person's negligence, bad
faith or willful misfeasance will be promptly repaid to Summit and MIS. In
addition, anything in this paragraph 7 to the contrary notwithstanding,
neither Summit or MIS shall be liable for any settlement of any action or
proceeding effected without their written consent.
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(b) Promptly after receipt by a Xxxx Indemnified Person under
sub-paragraph (a) above of notice of the commencement of any action, such
Xxxx Indemnified Person will, if a claim in respect thereof is to be made
against Summit and MIS under paragraph (a), notify Summit and MIS in
writing of the commencement thereof; but the omission to so notify Summit
and MIS will not relieve Summit and MIS from any liability which they may
have to any Xxxx Indemnified Person otherwise than under this paragraph 7
if such omission shall not have materially prejudiced Summit's or MIS's
ability to investigate or to defend against such claim. In case any such
action is brought against any Xxxx Indemnified Person, and such Xxxx
Indemnified Person notifies Summit and MIS of the commencement thereof,
Summit and MIS will be entitled to participate therein and, to the extent
that it may elect by written notice delivered to the Xxxx Indemnified
Person promptly after receiving the aforesaid notice from such Xxxx
Indemnified Person, to assume the defense thereof with counsel reasonably
satisfactory to such Xxxx Indemnified Person; PROVIDED, HOWEVER, that if
the defendants in any such action include both the Xxxx Indemnified Person
and Summit or MIS or any corporation controlling, controlled by or under
common control with Summit or MIS, or any director, officer, employee,
representative or agent of any thereof, or any other "Qualified Independent
Underwriter" retained by Summit in connection with the Offering and the
Xxxx Indemnified Person shall have reasonably concluded that there may be
legal defenses available to it which are different from or additional to
those available to such other defendant, the Xxxx Indemnified Person shall
have the right to select separate counsel to represent it. Upon receipt of
notice from Summit and MIS to such Xxxx Indemnified Person of its election
so to assume the defense of such action and approval by the Xxxx
Indemnified Person of counsel, neither Summit nor MIS will be liable to
such Xxxx Indemnified Person under this paragraph 7 for any fees of counsel
subsequently incurred by such Xxxx Indemnified Person in connection with
the defense thereof (other than the reasonable costs of investigation
subsequently incurred by such Xxxx Indemnified Person) unless (i) the Xxxx
Indemnified Person shall have employed separate counsel in accordance with
the provision of the next preceding sentence (it being understood, however,
that Summit and MIS shall not be liable for the expenses of more than one
separate counsel in any one jurisdiction representing the Xxxx Indemnified
Person, which counsel shall be approved by Xxxx), (ii) Summit and MIS,
within a reasonable time after notice of commencement of the action, shall
not have employed counsel reasonably satisfactory to the Xxxx Indemnified
Person to represent the Xxxx Indemnified Person, or (iii) Summit and MIS
shall have authorized in writing the employment of counsel for the Xxxx
Indemnified Person at the expense of Summit and MIS, and except that, if
clause (i) or (iii) is applicable, such liability shall be only in respect
of the counsel referred to in such clause (i) or (iii).
(c)
(i) Subject to the conditions set forth below, and in addition to
any rights of indemnification and contribution to which Summit may be
entitled pursuant to any agreement among underwriters, underwriting
agreement or otherwise, and to the extent allowed by law, Xxxx hereby
agrees that it will indemnify and hold Summit, its employees and each
person controlling, controlled by or under common control with Summit
within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act, or the rules and regulations thereunder (individually, a
"Summit Indemnified Person") harmless from and against any and all
loss, claim, damage, liability, cost or expense whatsoever to which
such Summit Indemnified Person may become subject under the Act, the
Exchange Act, or other federal or state statutory law or regulation,
at common law or otherwise, arising out of, based upon, or in any way
related or attributed to the failure of Xxxx to be a "qualified
independent underwriter" as contemplated by this Agreement. Xxxx
further agrees that upon demand by a Summit Indemnified Person at any
time or from time to time, it will promptly reimburse such Summit
Indemnified Person for, or pay, any loss, claim, damage, liability,
cost or expense as to which Xxxx has indemnified such person pursuant
hereto. Notwithstanding the foregoing provisions of this paragraph 7,
any such payment or reimbursement by Xxxx of fees, expenses or
disbursement incurred by a Summit Indemnified Person in any proceeding
in which a final judgment by a court of competent jurisdiction (after
all appeals or the expiration of time to appeal) is entered against
such Summit Indemnified Person as a direct result of such person's
negligence, bad faith or willful misfeasance will be promptly repaid
to Xxxx. In addition, anything in this paragraph 7 to the contrary
notwithstanding, Xxxx shall not be liable for any settlement of any
action or proceeding effected without its written consent. Xxxx and
Summit agree that they shall each follow the procedures set forth in
paragraph 7(b) and (d) with respect to any claim against Xxxx
hereunder.
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(ii) Subject to the conditions set forth below, and in addition
to any rights of indemnification and contribution to which MIS may be
entitled pursuant to any agreement among underwriters, underwriting
agreement or otherwise, and to the extent allowed by law, Xxxx hereby
agrees that it will indemnify and hold MIS, its employees and each
person controlling, controlled by or under common control with MIS
within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act, or the rules and regulations thereunder (individually, a
"MIS Indemnified Person") harmless from and against any and all loss,
claim, damage, liability, cost or expense whatsoever to which such MIS
Indemnified Person may become subject under the Act, the Exchange Act,
or other federal or state statutory law or regulation, at common law
or otherwise, arising out of, based upon, or in any way related or
attributed to the failure of Xxxx to be a "qualified independent
underwriter" as contemplated by this Agreement. Xxxx further agrees
that upon demand by a MIS Indemnified Person at any time or from time
to time, it will promptly reimburse such MIS Indemnified Person for,
or pay, any loss, claim, damage, liability, cost or expense as to
which Xxxx has indemnified such person pursuant hereto.
Notwithstanding the foregoing provisions of this paragraph 7, any such
payment or reimbursement by Xxxx of fees, expenses or disbursement
incurred by a MIS Indemnified Person in any proceeding in which a
final judgment by a court of competent jurisdiction (after all appeals
or the expiration of time to appeal) is entered against such MIS
Indemnified Person as a direct result of such person's negligence, bad
faith or willful misfeasance will be promptly repaid to Xxxx. In
addition, anything in this paragraph 7 to the contrary
notwithstanding, Xxxx shall not be liable for any settlement of any
action or proceeding effected without its written consent. Xxxx and
MIS agree that they shall each follow the procedures set forth in
paragraph 7(b) and (d) with respect to any claim against Xxxx
hereunder.
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(d) In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in paragraph 7
is due in accordance with its terms but is for any reason held by a
court to be unavailable from Summit and MIS to Xxxx on grounds of
policy or otherwise, Summit, MIS and Xxxx shall contribute to the
aggregate losses, claims, damages and liabilities (including legal or
other expenses reasonably incurred in connection with investigating or
defending the same) to which Summit, MIS and Xxxx may be subject in
such proportion so that Xxxx is responsible for that portion
represented by the percentage that its fee under this Agreement bears
to the public offering price appearing on the cover page of the
Prospectus and Summit and MIS are responsible for the balance, except
as Summit and MIS may otherwise agree to reallocate a portion of such
liability with respect to such balance with any other person,
including, without limitation, any other "Qualified Independent
Underwriter"; Notwithstanding anything in this Agreement to the
contrary (i) in no case shall Xxxx be responsible for any amount in
excess of the fee set forth in paragraph 4 above and (ii) no person
guilty of fraudulent misrepresentation within the meaning of Section
11(f) of the Act shall be entitled to contribution from any person who
was not guilty of such fraudulent misrepresentation. For purposes of
this paragraph (d), any person controlling, controlled by or under
common control with Xxxx, or any partner, director, officer, employee,
representative or any agent of any thereof, shall have the same rights
to contribution as Xxxx and each person who controls Summit or MIS
within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act, each officer of Summit who shall have signed the
Registration Statement and each director of Summit and MIS shall have
the same rights to contribution as Summit and MIS, subject in each
case to clause (i) of this paragraph (d). Any party entitled to
contribution will, promptly after receipt of notice of commencement of
any action, suit or proceeding against such party in respect of which
a claim for contribution may be made against the other party under
this paragraph (d), notify such party from whom contribution may be
sought, but the omission to so notify such party shall not relieve the
party from whom contribution may be sought from any other obligation
it or they may have hereunder or otherwise than under this paragraph
(d). The indemnity and contribution agreements contained in this
paragraph 7 shall remain operative and in full force and effect
regardless of any investigation made by or on behalf of any Xxxx
Indemnified Person, any Summit Indemnified Person, any MIS Indemnified
Person or termination of this Agreement.
SECTION 8. AUTHORIZATION BY SUMMIT. Summit represents and warrants to Xxxx
and MIS that this Agreement has been duly authorized, executed and delivered by
Summit and constitutes a valid and binding obligation of Summit.
SECTION 9. AUTHORIZATION BY MIS. MIS represents and warrants to Xxxx and
Summit that this Agreement has been duly authorized, executed and delivered by
MIS and constitutes a valid and binding obligation of MIS.
SECTION 10. AUTHORIZATION BY XXXX. Xxxx represents and warrants to MIS and
Summit that this Agreement has been duly authorized, executed and delivered by
Xxxx and constitutes a valid and binding obligation of Xxxx.
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SECTION 11. NOTICE. Whenever notice is required to be given pursuant to
this Agreement, such notice shall be in writing and shall be mailed by first
class mail, postage prepaid, addressed (a) if to Xxxx, at 00 Xxxxxxxxx Xxxxx,
Xxxxxxx Xxxxx, XX 00000, Attention: Xxxx Xxxxxxx; (b) if to Summit, at 000 Xxxx
Xxxxx Xxxxxx, Xxxxxxx, Xxxxxxxxxx 00000, Attention: Xxxxxxx X. Xxxxxxxxxxx,
General Counsel; and (c) if to MIS, at 000 Xxxx Xxxxx Xxxxxx, Xxxxxxx,
Xxxxxxxxxx 00000, Attention: Xxx Xxxxxxxxxx.
SECTION 12. GOVERNING LAW. This Agreement shall be construed (both as to
validity and performance) and enforced in accordance with and governed by the
laws of the State of Idaho applicable to agreements made and to be performed
wholly within such jurisdiction.
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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/ Xxxxx Xxxxxxx
------------------------------------
Xxxxx Xxxxxxx, Secretary
XXXX CAPITAL PARTNERS, LLC
By: /s/ Xxxx Xxxxxxx
------------------------------------
Xxxx Xxxxxxx,
Managing Director, Corporate Finance
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SCHEDULE A
SUMMIT SECURITIES, INC.
The Pricing Recommendation Letter of Xxxx is conditioned upon Summit's
undertaking to maintain the distribution rate of the Preferred Stock in
accordance with the formula set forth below:
Notwithstanding anything to the contrary herein the Applicable Rate for any
monthly distribution period shall not, in any event, be less than 6% or greater
than 14% per annum. The Board of Directors may, however, by resolution,
authorize distributions in excess of the Applicable Rate. The Applicable Rate
for any monthly distribution period shall be the highest of the Treasury Xxxx
Rate, the Ten Year Constant Maturity Rate and the Twenty Year Constant Maturity
Rate (each as defined in the Preferred Stock Authorizing Resolution) plus 0.50%
for such dividend period. In the event that the Company determines in good faith
that for any reason one or more of such rates cannot be determined for any
distribution period, then the Applicable Rate for such period shall be the
higher of whichever of such rates can be so determined.
SCHEDULE B
SUMMIT SECURITIES, INC.
VARIABLE RATE, CUMULATIVE PREFERRED STOCK,
SERIES S-3 PRICING
For Distributions Payable On:
---------------------------------
Distributions Record Date:
------------------------------------
Applicable Effective Resultant
Date Date Average Rate Rate* Rate
3 Mo Treasury Xxxx +.50% + %
---- ---- ------- --- ----
10 Yr Constant Rate +.50% + %
---- ---- ------- --- ----
20 Yr Constant Rate +.50% + %
---- ---- ------- --- ----
HIGHEST RESULTANT RATE:
------------------------------------
MONTHLY DISTRIBUTION PER SHARE:
----------------------------
(Highest applicable rate divided by 12)
As resolved by the Board of Directors, distribution will be deemed declared
on the 1st day of each month, payable on the 20th of each month to the holders
of record on the 5th of each month.
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* Includes any distribution authorized by the Board of Directors in excess
of the Applicable Rate.
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Authorized Signature
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