UNDERWRITING AGREEMENT
This Agreement, dated as of the 16th day of December, 1997, made
by and between Spirit of America Investment Fund, Inc. (the "Fund"),
a corporation duly organized under the laws of the state
of Maryland and operating as a registered investment company under
the Investment Company Act of 1940, as amended (the "Act"); and SSH
Securities, Inc. ("SSH"), a registered broker-dealer existing
as a corporation duly organized and existing under the laws of New
York (together, the "Parties").
WITNESSETH THAT:
WHEREAS, the Fund is authorized by its Articles of Incorporation
to issue separate series of shares representing interests in separate
investment portfolios (the "Series"), which Series are identified on
Schedule "A" attached hereto, and which Schedule "A"may be amended from
time to time by mutual agreement among the Parties; and
WHEREAS, SSH is a broker-dealer registered with the U.S.
Securities and Exchange Commission and a member in good standing of the
National Association of Securities Dealers, Inc.(the "NASD"); and
WHEREAS, the Parties are desirous of entering into an agreement
providing for the distribution by SSH of the shares of the Fund (the "Shares");
NOW, THEREFORE, in consideration of the promises and agreementsof the
Parties contained herein and in exchange of good and valuable
consideration, the receipt and sufficiency of which is hereby
acknowledged, the Parties agree as follows:
1. Appointment.
The Fund hereby appoints SSH as its exclusive agent for the
distribution of the Shares in such of the fifty United States of America,
the District of Columbia and Puerto Rico, as SSH deems appropriate and SSH
hereby accepts such appointment under the terms of this Agreement. The Fund
agrees that it will not sell any shares to any person except to fill orders
for the shares received through SSH; provided, however, that the foregoing
exclusive right shall not apply:
(a) to shares issued or sold in connection with the merger or
consolidation of any other investment company with the Fund or the acquisition
by purchase or otherwise of all or substantially all of the assets of any
investment company or substantially all of the outstanding shares of any
such company by the Fund;
(b) to shares which may be offered by the Fund to its stockholders for
reinvestment of cash distributed from capital gains or net investment income
of the Fund; or
(c) shares that may be purchased from the Fund's transfer agent in the
manner set forth in the Registration Statement;
(d) to shares which may be issued to shareholders of other funds who
exercise any exchangeprivilege set forth in the Fund's
Prospectus. Notwithstanding any other provision hereof, the Fund may
terminate, suspend, or withdraw the offering of the Shares whenever in
its sole discretion, it deems such action to be desirable.
2. Sale and Repurchase of Shares.
(a) SSH is hereby granted the right as agent for the Fund, to
sell Shares to the public against orders therefor at the public offering
price (as defined in sub-paragraph 2.(c) below).
(b) SSH will also have the right to take, as agent for the
Fund, all actions which, in SSH's judgment, are necessary to carry into
effect the distribution of the Shares.
(c) The public offering price shall be the net asset value of
the Shares then in effect plus any applicable sales charge.
(d) The net asset value of the Shares shall be determined in
the manner provided in the then current prospectus and statement of
additional information relating to the Shares and when determined
shall be applicable to all transactions as provided in the prospectus.
The netasset value of the Shares shall be calculated by the Fund or by
another entity on behalf of the Fund. SSH shall have no duty to inquire
into or liability for the accuracy of the net asset value per Share as
calculated.
(e) On every sale, the Fund shall receive the applicable net
asset value of the Shares promptly.
(f) Upon receipt of purchase instructions, SSH will transmit
such instructions to the Fund or its transfer agent for registration of the
Shares purchased.
(g) Nothing in this Agreement shall prevent SSH or any
affiliated person (as defined in the Act) of SSH from acting as underwriter
or distributor for any other person, firm or corporation (including other
investment companies) or in any way limit or restrict SSH or such affiliated
person from buying, selling or trading any securities for its or their own
account or for the accounts of others for whom it or they may be acting;
provided, however, that SSH expressly agrees that it
will not for its own account purchase any shares of the
Fund except for investment purposes and that it will not for its own
account sell any such shares except by redemption of such shares by the Fund,
and that it will not undertake in any activities which, in its judgment, will
adversely affect the performance of its obligations to the Fund under this
Agreement.
(h) SSH may, but is not required to, repurchase Shares at such
prices and upon such terms and conditions as shall be specified in the
Prospectus.
3. Rules of Sale of Shares.
SSH does not agree to sell any specific number of Shares. SSH,
as Underwriter for the Fund,undertakes to sell Shares on a best efforts
basis and only against orders received therefor.
The Fund reserves the right to terminate, suspend or withdraw
the sale of its Shares for any reason deemed adequate by it and the Fund
reserves the right to refuse at any time or times to sell any of its Shares
to any person for any reason deemed adequate by it.
4. Rules of NASD.
(a) SSH will conform to the Conduct Rules of the NASD and the
securities laws of any jurisdiction in which it directly or indirectly
sells any Shares.
(b) SSH will require each dealer with whom SSH has a selling
agreement to conform to the applicable provisions of the Prospectus,
with respect to the public offering price of the Shares, and SSH shall not
cause the Fund to withhold the placing of purchase orders so as to make a
profit thereby.
(c) The Fund agrees to furnish to SSH sufficient copies of any
and all:
agreements, plans, communications with the public or other
materials which the Fund or SSH intends to use in connection with any sales
of Shares in adequate time for SSH to file and clear such materials with
the proper authorities before they are put in use. SSH and the Fund
may agree that any such material does not need to be filed subsequent to
distribution. In addition, the Fund agrees not to use any such materials
until so filed and cleared for use by appropriate authorities as well as by
SSH.
(d) SSH, at its own expense, will qualify as a dealer or
broker, or otherwise,under all applicable state or federal laws required in
order that the Shares may be sold in such states as may be mutually agreed
upon by the Parties.
(e) SSH shall remain registered with the U.S. Securities and Exchange
Commission and a member of the National Association of Securities
Dealers for the term of this Agreement.
(f) SSH shall not, in connection with any sale or solicitation of a
sale of the Shares, make or authorize any representative, Service
Organization, broker or dealer to make, any representations
concerning the Shares except those contained in the Prospectus
covering the Shares and in communications with the public or
sales materials approved by SSH as information supplemental
to such Prospectus. Copies of the Prospectus will be
supplied by the Fund to SSH in reasonable quantities upon request.
5. Records to be Supplied by the Fund.
The Fund shall furnish to SSH copies of all information, financial
statements and other papers which SSH may reasonably request for use in
connection with the distribution of the Shares including, but not limited
to, one certified copy of all financial statements prepared for the Fund by
its independent public accountants.
6. Expenses.
(a) The Fund will bear the following expenses:
(i) preparation, setting in type, and printing of sufficient
copies of the prospectuses and statements of additional information
for distribution to shareholders, and the distribution of same to the
shareholders;
(ii) preparation, printing and distribution of reports and
other communications to shareholders;
(iii) registration of the Shares under the federal
securities laws;
(iv) fees and disbursements of its counsel and independent
public accountants
(v) qualification of the Shares for sale in the
jurisdictions as directed by the Fund;
(vi) maintaining facilities for the issue and transfer of the
Shares;
(vii) supplying information, prices and other data to be
furnished by the Fund under this Agreement; and
(viii) any original issue taxes or transfer taxes
applicable to the sale or delivery of the Shares or certificates therefor.
(b) SSH will pay all other expenses incident to the sale and
distribution of the Shares sold hereunder.
7. Term.
(a) The term of this Agreement shall commence on the date on
which the Fund's registration statement is declared effective by the U.S.
Securities and Exchange Commission ("Effective Date") provided that this
Agreement shall not take effect unless such action has first been approved
by vote of a majority of the Board of Directors and by vote of a majority
of those Directors of the Fund who are not interested persons of the Fund,
and have no direct or indirect financial interest in the operation of the
Plan or in any agreements related thereto ("Independent Directors"), cast
in person at a meeting called for the purpose of voting on such action.
(b) This Agreement shall remain in effect for two (2) years from
the Effective Date.
This Agreement shall continue thereafter for periods not
exceeding one (1) year if approved at least annually (i) by a vote of a
majority of the outstanding voting securities of the Fund or by a vote of
the Board of Directors of the Fund, and (ii) by a vote of a majority of the
Independent Directors cast in person at a meeting called for the purpose of
voting on such approval.
(c) This Agreement (i) may at any time be terminated without the
payment of any penalty, either by a vote of the Directors of the Fund or by
a vote of a majority of the outstanding voting securities of the Fund, on
sixty (60) days' written notice to SSH; and (ii) may be terminated by SSH
on sixty (60) days' written notice to the Fund.
(d) This Agreement shall automatically terminate in the event of
its assignment.
8. Liability of Underwriter.
(a) SSH, its directors, officers, employees, shareholders and
agents shall not be liable for any error of judgment or mistake of law or
for any loss suffered by the Fund in connection with the performance of
this Agreement, except a loss resulting from a breach of SSH's obligation
pursuant to Section 4 of this Agreement, a breach of fiduciary duty with
respect to the receipt of compensation for services or a loss resulting
from willful misfeasance, bad faith or gross negligence on the part of SSH
in the performance of its obligations and duties or by reason of its
reckless disregard of its obligations and duties under this Agreement.
(b) The Fund agrees to indemnify and hold harmless SSH against
any and all liability, loss, damages, costs or expenses (including
reasonable counsel fees) which SSH may incur or be required to pay
hereafter, in connection with any action, suit or other proceeding, whether
civil or criminal, before any court or administrative or legislative body,
in which SSH may be involved as a party or otherwise or with which SSH may
be threatened, by reason of the offer or sale of the Fund shares by
persons other than SSH or its representatives, prior to the execution of
this Agreement.
(c) Any person, even though also a director, officer, employee,
shareholder or agent of SSH, who may be or become an officer, director,
trustee, employee or agent of the Fund, shall be deemed, when rendering
services to the Fund or acting on any business of the Fund (other than
services or business in connection with SSH's duties hereunder), to be
rendering such services to or acting solely for the Fund and not as
a director, officer, employee, shareholder or agent, or one under the
control or direction of SSH even though receiving a salary from SSH.
(d) The Fund agrees to indemnify and hold harmless SSH, and each
person, who controls SSH within the meaning of Section 15 of the
Securities Act of 1933, as amended (the "Securities Act"), or Section 20
of the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
against any and all losses, claims, damages and liabilities, joint or
several (including any reasonable investigative, legal and other expenses
incurred in connection therewith) to which they, or any of them, may
become subject under the Act, the Securities Act, the Exchange Act or other
federal or state law or regulation, at common law or otherwise
insofar as such losses, claims, damages or liabilities (or actions, suits or
proceedings in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of a material fact contained in a
prospectus, statement of additional information, supplement thereto, sales
literature or other written information prepared by the Fund and furnished
by the Fund to SSH for SSH's use hereunder, disseminated by the Fund or
arise out of or are based upon any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make
the statements therein not misleading.
Such indemnity shall not, however, inure to the benefit of
SSH (or any person controlling SSH) on account of any losses, claims, damages or
liabilities (or actions, suits or proceedings in respect thereof) arising
from the sale of the shares of the Fund to any person by SSH (i) if such
untrue statement or omission or alleged untrue statement or omission was
made in the prospectus, statement of additional information, or supplement,
sales or other literature, in reliance upon and in conformity with
information furnished in writing to the Fund by SSH specifically for
use therein or (ii) if such losses, claims, damages or liabilities arise
out of or are based upon an untrue statement or omission or alleged untrue
statement or omission found in any prospectus, statement of additional
information,supplement, sales or other literature, subsequently corrected,
but, negligently distributed by SSH and a copy of the corrected prospectus
was not delivered to such person at or before the confirmation of the sale
to such person.
9. Amendments.
No provision of this Agreement may be amended or modified, in any
manner whatsoever except by a written agreement properly authorized and
executed by the Parties.
10. Section Headings.
Section and Paragraph headings are for convenience only and shall
not be construed as part of this Agreement.
11. Reports.
SSH shall prepare reports for the Board of Directors of the Fund
on a quarterly basis showing such information as from time to time shall
be reasonably requested by such Board.
12. Severability.
If any part, term or provision of this Agreement is held by any
court to be illegal, in conflict with any law or otherwise invalid, the
remaining portion or portions shall be considered severable and not
affected, and the rights and obligations of the parties shall be construed
and enforced as if the Agreement did not contain the particular part,
term or provision held to be illegal or invalid provided that the basic
agreement is not thereby substantially impaired.
13. Governing Law.
This Agreement shall be governed by the laws of New York, without
giving effect to the conflicts of law principles thereof, and in
accordance with the 1940 Act. To the extent that the applicable laws of
the State of New York conflict with the applicable provisions of the
1940 Act, the latter shall control.
14. Authority to Execute
The Parties represent and warrant that the execution and delivery
of this Agreement by the undersigned officers of the Parties has been
duly and validly authorized by resolution of the respective Boards of
Directors of each of the Parties.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
consisting of nine type written pages, together with Schedule "A" to be
signed by their duly authorized officers, as of the day and year first
above written.
Spirit of America Investment Fund, Inc.
/s/ Xxxxx Xxxxxx
Xxxxx Xxxxxx, President
SSH Securities, Inc.
/s/ Xxxxx Xxxxxx
Xxxxx Xxxxxx, President
Schedule "A"
Identification of Series
Below are listed the "Series" to which services under this Agreement
are to be performed as of the
execution date of the Agreement:
"Spirit of America Investment Fund, Inc."
This Schedule "A" may be amended from time to time by agreement of
the Parties.
