SUMMIT SECURITIES, INC.
AND
METROPOLITAN INVESTMENT SECURITIES, INC.
SELLING AGREEMENT
This agreement (the "Agreement") is made as of the 31st day of January
2001, 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 up to a number of shares as may
be designated from time to time (the "Offering"), of its Variable Rate
Cumulative Preferred Stock, Series R and its Variable Rate Cumulative Preferred
Stock, Series T (collectively, the "Preferred Stock") 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 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:
SECTION 1. APPOINTMENT OF SELLING AGENT. Summit 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. 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.
SECTION 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, by noon of the next business day after receipt, all
cash and checks received from the subscribers 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.
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 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, 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 Preferred Stock.
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 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 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 non-assessable.
(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
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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 Preferred Stock, including without
limitation, fees and expenses of counsel, blue sky fees and expenses (including
legal fees), printing expenses, exchange listing fees, and accounting fees and
expenses. 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 Preferred
Stock shall be a maximum of 6.00% of the investment amount.
SECTION 8. GOVERNING LAW. This Agreement shall be deemed to be made under
and governed by the laws of the State of Idaho.
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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/ Xxxx Xxxxxx
--------------------------------
Name: Xxxx Xxxxxx
Title: General Manager/VP
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