Exhibit (e)(i)
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 agreements of 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
3.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
--------------------------------------------------------------------------------
Underwriting Agreement between Spirit of America Investment Fund, Inc. and
SSH Securities, Inc.
Page 1 of 10
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 exchange privilege 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 net
asset 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,
--------------------------------------------------------------------------------
Underwriting Agreement between Spirit of America Investment Fund, Inc. and
SSH Securities, Inc.
Page 2 of 10
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
--------------------------------------------------------------------------------
Underwriting Agreement between Spirit of America Investment Fund, Inc. and
SSH Securities, Inc.
Page 3 of 10
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.
--------------------------------------------------------------------------------
Underwriting Agreement between Spirit of America Investment Fund, Inc. and
SSH Securities, Inc.
Page 4 of 10
(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
--------------------------------------------------------------------------------
Underwriting Agreement between Spirit of America Investment Fund, Inc. and
SSH Securities, Inc.
Page 5 of 10
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.
--------------------------------------------------------------------------------
Underwriting Agreement between Spirit of America Investment Fund, Inc.
and SSH Securities, Inc.
Page 6 of 10
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
--------------------------------------------------------------------------------
Underwriting Agreement between Spirit of America Investment Fund, Inc.
and SSH Securities, Inc.
Page 7 of 10
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.
--------------------------------------------------------------------------------
Underwriting Agreement between Spirit of America Investment Fund, Inc.
and SSH Securities, Inc.
Page 8 of 10
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. SSH Securities, Inc.
/s/ Xxxxx Xxxxxx /s/ Xxxxx Xxxxxx
------------------------------------ --------------------------------------
Xxxxx Xxxxxx, President Xxxxx Xxxxxx, President
--------------------------------------------------------------------------------
Underwriting Agreement between Spirit of America Investment Fund, Inc.
and SSH Securities, Inc.
Page 9 of 10
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 Real Estate Fund Class A Shares"
"Spirit of America Real Estate Fund Class B Shares"
"Spirit of America Value Fund"
This Schedule "A" may be amended from time to time by agreement of the Parties.
--------------------------------------------------------------------------------
Underwriting Agreement between Spirit of America Investment Fund, Inc.
and SSH Securities, Inc.
Schedule "A"
