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Proc-Type: 2001,MIC-CLEAR
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<SEC-DOCUMENT>0000950124-03-000098.txt : 20030117
<SEC-HEADER>0000950124-03-000098.hdr.sgml : 20030117
<ACCEPTANCE-DATETIME>20030117142037
ACCESSION NUMBER:		0000950124-03-000098
CONFORMED SUBMISSION TYPE:	N-2/A
PUBLIC DOCUMENT COUNT:		3
FILED AS OF DATE:		20030117

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			NAIC GROWTH FUND INC
		CENTRAL INDEX KEY:			0000850027
		IRS NUMBER:				311274796
		STATE OF INCORPORATION:			MD
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		N-2/A
		SEC ACT:		1940 Act
		SEC FILE NUMBER:	811-05807
		FILM NUMBER:		03517566

	BUSINESS ADDRESS:	
		STREET 1:		711 WEST THIRTEEN MILE RD
		CITY:			MADISON HEIGHTS
		STATE:			MI
		ZIP:			48071
		BUSINESS PHONE:		8105836242

	MAIL ADDRESS:	
		STREET 1:		711 WEST THIRTEEN MILE RD
		CITY:			MADISON HEIGHTS
		STATE:			MI
		ZIP:			48071

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	BETTER INVESTING FUND INC
		DATE OF NAME CHANGE:	19890716

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			NAIC GROWTH FUND INC
		CENTRAL INDEX KEY:			0000850027
		IRS NUMBER:				311274796
		STATE OF INCORPORATION:			MD
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		N-2/A
		SEC ACT:		1933 Act
		SEC FILE NUMBER:	333-99689
		FILM NUMBER:		03517567

	BUSINESS ADDRESS:	
		STREET 1:		711 WEST THIRTEEN MILE RD
		CITY:			MADISON HEIGHTS
		STATE:			MI
		ZIP:			48071
		BUSINESS PHONE:		8105836242

	MAIL ADDRESS:	
		STREET 1:		711 WEST THIRTEEN MILE RD
		CITY:			MADISON HEIGHTS
		STATE:			MI
		ZIP:			48071

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	BETTER INVESTING FUND INC
		DATE OF NAME CHANGE:	19890716
</SEC-HEADER>
<DOCUMENT>
<TYPE>N-2/A
<SEQUENCE>1
<FILENAME>k74079a1nv2za.txt
<DESCRIPTION>AMENDMENT NO 10 TO FORM N-2
<TEXT>
<PAGE>

        As filed with the Securities and Exchange Commission on January 17, 2003

                                       Securities Act Registration No. 333-99689
                                       Investment Company Act File No. 811-05807
- --------------------------------------------------------------------------------

                     U.S. SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM N-2
                        (Check appropriate box or boxes)

|X|      REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

|X|      Pre-Effective Amendment No. 1

|_|      Post-Effective Amendment No. ___
                                     and/or
|X|      REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940

|X|      Amendment No. 10


                             NAIC GROWTH FUND, INC.
- -------------------------------------------------------------------------------
Exact Name of Registrant as Specified in Charter

          711 West Thirteen Mile Road, Madison Heights, Michigan 48071
- --------------------------------------------------------------------------------
Address of Principal Executive Offices (Number, Street, City, State, Zip Code)

                                 (248) 583-6242
- --------------------------------------------------------------------------------
Registrant's Telephone Number, including Area Code

                    Kenneth S. Janke, NAIC Growth Fund, Inc.
          711 West Thirteen Mile Road, Madison Heights, Michigan 48071
- --------------------------------------------------------------------------------
Name and Address (Number, Street, City, State, Zip Code) of Agent for Service

                                 With Copies to:

    Barbara A. Bowman, Esq.                     Steven J. Dickinson, Esq.
    Bodman, Longley & Dahling LLP               Dorsey & Whitney LLP
    34th Floor, 100 Renaissance Center          801 Grand, Suite 3900
    Detroit, Michigan 48243                     Des Moines, Iowa 50309


   As soon as practicable after this registration statement becomes effective.
- --------------------------------------------------------------------------------
                  Approximate Date of Proposed Public Offering

If any securities being registered on this form will be offered on a delayed or
continuous basis in reliance on Rule 415 under the Securities Act of 1933, other
than securities offered in connection with a dividend reinvestment plan, check
the following box. |X|

It is proposed that this filing will become effective (check appropriate box)
        |_| when declared effective pursuant to section 8(c)

If appropriate, check the following box:

        |_| this post-effective amendment designates a new effective date for a
        previously filed post-effective amendment.

        |_| this form is filed to register additional securities for an offering
        pursuant to Rule 462(b) under the





<PAGE>

        Securities Act and the Securities Act registration statement number of
        the earlier effective registration statement for the same
        offering is-___.


        CALCULATION OF REGISTRATION FEE UNDER THE SECURITIES ACT OF 1933
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------
                                                        Proposed                Proposed
                                                         Maximum                 Maximum
  Title of Securities         Amount Being         Offering Price Per           Aggregate               Amount of
   Being Registered            Registered                 Unit               Offering Price          Registration Fee
- -----------------------------------------------------------------------------------------------------------------------
<S>                           <C>                  <C>                      <C>                     <C>
Common stock                    5,000,000               $9.98(1)             $49,900,000 (1)            $4,591 (1)
 par value $0.001
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>


(1) Estimated solely for the purpose of calculating the registration fee in
accordance with Rule 457(d) under the Securities Act of 1933, as amended, and
based on the net asset value per share of $ 9.98 on September 5, 2002.

The registrant hereby amends this registration statement on such date or dates
as may be necessary to delay its effective date until the registrant shall file
further amendment which specifically states that this registration statement
shall thereafter become effective in accordance with section 8(a) of the
Securities Act of 1933 or until the registration statement shall become
effective on such date as the Commission, acting pursuant to said section 8(a),
may determine.






<PAGE>

                              CROSS-REFERENCE SHEET

<TABLE>
<CAPTION>

   PART A ITEM
     NUMBER                               CAPTION                                             PROSPECTUS CAPTION
     ------                               -------                                             ------------------
<S>               <C>                                                     <C>
        1         Outside Front Cover                                     Outside Front Cover
        2         Inside Front and Outside Back Cover Page                Outside Front Cover
        3         Fee Table and Synopsis                                  Fee Table; Prospectus Summary
        4         Financial Highlights                                    Financial Highlights
        5         Plan of Distribution                                    Underwriting; How to Invest
        6         Selling Shareholders                                    Not Applicable
        7         Use of Proceeds                                         Use of Proceeds
        8         General Description of the Registrant                   Risk Factors; The Fund; Investment Objective and
                                                                          Policies; Determination of Net Asset Value; Reports to
                                                                          Shareholders
        9         Management                                              The Fund; The Investment Adviser; Risk Factors
       10         Capital Stock, Long-Term Debt and Other                 Description of Shares; Taxation; Distribution Policy;
                  Securities                                              Dividend Reinvestment and Cash Purchase Plan
       11         Defaults and Arrears on Senior Securities               Not Applicable
       12         Legal Proceedings                                       The Fund
       13         Table of Contents of the Statement of Additional        Statement of Additional Information
                  Information
<CAPTION>

   PART B ITEM                                                                          STATEMENT OF ADDITIONAL
     NUMBER                               CAPTION                                         INFORMATION CAPTION
     ------                               -------                                         -------------------
<S>               <C>                                                     <C>
       14         Cover Page                                              Cover Page
       15         Table of Contents                                       Table of Contents
       16         General Information and History                         The Fund
       17         Investment Objective and Policies                       Investment Guidelines
       18         Management                                              Directors, Officers and Principal Shareholders
       19         Control Persons and Principal Holders of Securities     Directors, Officers and Principal Shareholders
       20         Investment Advisory and Other Services                  Investment Adviser and Investment Advisory Agreement;
                                                                          Custodian, Transfer Agent and Dividend Disbursing Agent
       21         Brokerage Allocation and Other Practices                Portfolio Transactions and Brokerage
       22         Tax Status                                              Taxation
       23         Financial Statements                                    Financial Statements
</TABLE>





<PAGE>

 THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY
   NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER
    TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE
       SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.


                  SUBJECT TO COMPLETION, DATED JANUARY __, 2003


                               PART A - PROSPECTUS

                                   PROSPECTUS

                             NAIC GROWTH FUND, INC.
                          5,000,000 SHARES COMMON STOCK
                           PAR VALUE $0.001 PER SHARE

         The information in this prospectus is not complete and may be changed.
We may not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an offer
to sell these securities and it is not soliciting an offer to buy these
securities in any state where the offer or sale is not permitted.


         NAIC Growth Fund, Inc. is a diversified, closed-end management
investment company. The Fund's investment objective is long-term growth. The
Fund utilizes the concept of "total return" for selecting investments. "Total
return" means the total of all income derived from, and the capital appreciation
value of, a particular investment. The Fund tries to achieve total return by
investing in those equity securities with growth potential and that also may be
expected to increase cash dividends on a regular basis. While the Fund does not
attempt to purchase equity securities that have a high yield, relative to the
popular stock averages, a record of increased cash dividends is one of the
factors taken into consideration when selecting equity securities for the Fund's
portfolio. The Fund seeks to achieve its investment objective by investing in a
diversified portfolio of equity securities. The Fund's investments are selected
by the Fund's investment adviser, Growth Fund Advisor, Inc., an indirect
subsidiary of the National Association of Investment Clubs Trust.


         The address of the Fund is 711 West Thirteen Mile Road, Madison
Heights, Michigan 48071, and its telephone number is (877) 275-6242.


         This prospectus relates to 5,000,000 shares of the Fund's common stock,
par value $0.001, which are being offered on a "best efforts" basis by Broker
Dealer Financial Services Corp. and, in BDFSC's sole discretion, by other
broker-dealers that enter into selected dealer agreements with BDFSC. See
"Underwriting." The Fund will sell shares each week to investors at a price
equal to the Fund's current net asset value per share, which will fluctuate
during this continuous offering and generally will be determined as of the close
of business each Thursday, plus the applicable sales charge set forth below
payable from the subscription payments. The sales price may be determined by the
following formula: net asset value divided by (1 minus the applicable sales
charge), rounded to the nearest penny. Subscription payments will be released
from escrow by the Fund weekly in this manner upon acceptance of subscriptions
and determination of the Fund's current net asset value. Subscriptions are
irrevocable by the investor once received by the Fund. There will be a sales
charge payable by investors to BDFSC for any shares sold pursuant to this
prospectus, as follows:


         -        3.5% of the gross sales price per share sold before any
                  broker-dealer enters into a selected dealer agreement with
                  BDFSC; and
         -        5% of the gross sales price per share sold after any
                  broker-dealer enters into a selected dealer agreement with
                  BDFSC.


All offering expenses other than sales charges will be paid directly by the
Fund. The minimum investment (inclusive of sales charges) in this offering by
any investor is $500. There is no minimum number of shares that must be sold in
the offering. The offering will continue until all of the shares are sold or
until either the Fund or BDFSC terminate the offering on 30 days' notice to the
other party.

<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
             PRICE TO PUBLIC(1)                      SALES CHARGE(1)(2)               PROCEEDS TO REGISTRANT(1)(3)
- -------------------------------------------------------------------------------------------------------------------
<S>                        <C>                       <C>                              <C>
Per Share                      $9.81                        $0.49                                 $9.32
- -------------------------------------------------------------------------------------------------------------------
Total Maximum               $49,050,000                  $2,450,000                            $46,600,000
- -------------------------------------------------------------------------------------------------------------------
</TABLE>

(1)  Estimated based on the net asset value per share of $9.32 on
January 9, 2003.
(2) Estimated based on the maximum sales charge of 5% per share. The sales
charge will be 3.5% of the gross sales price per share sold before any
broker-dealer enters into a selected dealer agreement with BDFSC; and 5% of the
gross sales price per share sold




<PAGE>


after any broker-dealer enters into a selected dealer agreement with BDFSC.
(3) The Fund estimates that the total offering expenses payable by the Fund,
assuming that the offering continues for a period of two years, are $167,081.


         The Fund's common stock is listed on the Chicago Stock Exchange under
the market symbol "GRF."

         AN INVESTMENT IN THE FUND INVOLVES RISKS. YOU SHOULD CONSIDER THE
INFORMATION UNDER "RISK FACTORS" BEGINNING ON PAGE __ BEFORE DECIDING WHETHER TO
PURCHASE THE SHARES.

         THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED
THESE SECURITIES OR PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.


         This prospectus sets forth important information about the Fund that
you ought to know before making a further investment. Please read this
prospectus carefully and retain it for future reference. A Statement of
Additional Information containing additional information about the Fund has been
filed with the Securities and Exchange Commission. The Statement of Additional
Information is dated_________ _, 2003 and is incorporated by reference in this
prospectus. You may obtain a copy of the Statement of Additional Information
without charge on written or oral request to NAIC Growth Fund, Inc., 711 West
Thirteen Mile Road, Madison Heights, Michigan 48071, attention Statement of
Additional Information, telephone (877) 275-6242, extension 331, or from the
SEC's website at www.sec.gov. The table of contents of the Statement of
Additional Information appears on page __ of this prospectus.



                                  [BDFSC LOGO]

                         The date of this prospectus is:

                            ___________________, 2003





<PAGE>



WE HAVE NOT AUTHORIZED ANY DEALER, SALESMAN OR OTHER PERSON TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATION OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS. YOU MUST NOT RELY UPON ANY INFORMATION OR REPRESENTATION NOT
CONTAINED IN THIS PROSPECTUS AS IF WE HAD AUTHORIZED IT. THIS PROSPECTUS DOES
NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY
SECURITY OTHER THAN THE REGISTERED SECURITIES TO WHICH IT RELATES, NOR DOES IT
CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY SECURITIES
IN ANY JURISDICTION TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH AN OFFER
OR SOLICITATION IN SUCH JURISDICTION. THE INFORMATION CONTAINED IN THIS
PROSPECTUS IS ACCURATE AS OF THE DATE ON ITS COVER.

                                TABLE OF CONTENTS

                                      PAGE


Fund Expenses...............................................................

Prospectus Summary..........................................................

Financial Highlights........................................................


Risk Factors................................................................


The Fund....................................................................
Investment Objective and Policies...........................................
The Investment Adviser......................................................
Use of Proceeds.............................................................
Distribution Policy.........................................................
Dividend Reinvestment and Cash Purchase Plan................................
Taxation....................................................................
Description of Shares.......................................................
Determination of Net Asset Value............................................
The Offering................................................................
How to Invest...............................................................
Underwriting................................................................
Legal Matters...............................................................
Reports to Shareholders.....................................................
Independent Public Accountants..............................................
Financial Statements........................................................

Important Notice Concerning Arthur Andersen LLP.............................

Statement of Additional Information.........................................
Further Information.........................................................

Exhibit 1 - Form of Subscription Agreement



                                       iii

<PAGE>

                                  FUND EXPENSES

         The following table illustrates all expenses and fees that you will
incur as a shareholder of the Fund.

SHAREHOLDER TRANSACTION EXPENSES

<TABLE>
<S>                                                                            <C>
         Sales Load (as a percentage of offering price)(1) .....................3.5% or 5.0%
         Dividend Reinvestment and Cash Purchase Plan Fees (2) .................0.0%
</TABLE>


ANNUAL EXPENSES (AS A PERCENTAGE OF NET ASSETS ATTRIBUTABLE TO COMMON SHARES)

<TABLE>
        <S>                                                   <C>
         Management Fees .....................................0.75%
         Other Expenses(3) .................................. 0.82%
                                                             ------
         Total Annual Expenses .............................. 1.57%
</TABLE>



         (1) BDFSC will be paid commissions at a rate of 3.5% of the gross sales
         price per share sold until BDFSC uses any selected dealers. If BDFSC
         uses any selected dealer, then the commission rate will increase to 5%
         of the gross sales price per share for the duration of the offering.
         All other offering expenses will be paid by the Fund.

         (2) You will pay no special fees or charges if you choose to
         participate in the Dividend Reinvestment and Cash Purchase Plan other
         than reasonable transaction fees and a termination fee of $15 plus 10
         cents per share. For purposes of this table, brokerage commissions are
         not included as Dividend Reinvestment and Cash Purchase Plan fees.

         (3) "Other Expenses" are based on estimated amounts for the current
         fiscal year.


The purpose of the foregoing table is to assist you in understanding the various
costs and expenses associated with investing in the Fund. For a more complete
description of the Dividend Reinvestment and Cash Purchase Plan fees and the
management fees, see "Dividend Reinvestment and Cash Purchase Plan" and "The
Investment Adviser," respectively.

<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------
                     Example                      1 Year       3 Years      5 Years      10 Years
- --------------------------------------------------------------------------------------------------
<S>                                              <C>           <C>          <C>          <C>
You would pay the following expenses on a
$1,000 investment, assuming a 5% return:            $16          $51          $88         $192
- --------------------------------------------------------------------------------------------------
</TABLE>


THIS EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF FUTURE EXPENSES OR
PERFORMANCE. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN. Federal
securities regulations require the example to assume an annual return of 5%, but
the Fund's actual return may be more or less than 5%; the assumed 5% annual
return is not a prediction of, and does not represent, the projected or actual
performance of the Fund's shares. For purposes of this example, it has been
assumed that the rates listed above under "Annual Expenses" remain the same each
year, and that all dividends and distributions have been reinvested at net asset
value.





                               PROSPECTUS SUMMARY

         The following is a summary and does not contain all the information
that may be important to you. You should read the entire prospectus before
deciding to invest.


The Fund and Its Invest-
ment Objective.........    The Fund is a diversified closed-end management
                           investment company. Its shares are traded on the
                           Chicago Stock Exchange under the symbol "GRF." The
                           Fund's investment objective is long-term growth.
                           The Fund utilizes the concept of "total return" for
                           selecting investments. "Total return" means the total
                           of all income derived from, and the capital
                           appreciation in value of, a particular investment.
                           The Fund tries to achieve total return by investing
                           in those equity securities with growth potential and
                           that also may be expected  to increase cash dividends
                           on a regular basis.

Principal Investment
Strategies.............    The Fund seeks to achieve its investment objective
                           primarily through investment in a portfolio of equity
                           securities that is diversified, both by industry and
                           company size. The Fund typically invests in
                           securities of "growth companies" that have
                           price/earnings and debt/equity ratios that are equal
                           to or lower than the





                                       1
<PAGE>


                           average of companies in the same industry. Other
                           important factors are the price of the stock in
                           relation to the underlying assets of the company and
                           the growth potential of the company. The Fund invests
                           in securities according to the perceived potential,
                           whether those securities have large or small market
                           capitalization. The majority of holdings are in large
                           market capitalization stocks, but the Fund tries to
                           have a balance in large, medium and small companies
                           (as measured by sales or revenues). Foreign
                           securities may be purchased, but special attention is
                           given to the risks associated with such securities.
                           The Fund seeks to achieve long-term growth in value,
                           with little regard to short-term market fluctuations.
                           In addition, the Fund invests in companies that the
                           Investment Adviser determines possess "special
                           situation" characteristics. In general, a company
                           possesses "special situation" characteristics if its
                           securities are expected to appreciate solely by
                           reason of a development particularly or uniquely
                           applicable to that company. There can be no assurance
                           that the Fund can continue to meet its investment
                           objectives.

The Offering...........    The Fund's authorized capital stock consists of
                           50,000,000 shares of common stock, $0.001 par value.
                           As of December 31, 2002, the Fund had 2,264,097
                           shares of common stock outstanding. The Fund is
                           offering 5,000,000 shares of its common stock to
                           investors on a continuous "best efforts" basis
                           through Broker Dealer Financial Services Corp.
                           ("BDFSC") and, in BDFSC's sole discretion, by other
                           selected broker- dealers. See "Underwriting." The
                           Fund will sell shares each week to investors at a
                           price equal to the Fund's current net asset value per
                           share, which generally will be determined as of the
                           close of business each Thursday, plus the applicable
                           sales charge. The sales price may be determined by
                           the following formula: net asset value divided by (1
                           minus the applicable sales charge), rounded to the
                           nearest penny. Subscription payments will be
                           deposited into an escrow account and used by the Fund
                           each week to purchase shares upon acceptance of
                           subscriptions, determination of the Fund's net asset
                           value and receipt of collected funds for the
                           subscription. Subscriptions are irrevocable by the
                           subscriber once received by the Fund. The Fund's net
                           asset value per share as of January 9, 2003, was
                           $9.32. The minimum investment (inclusive of sales
                           charges) by an investor in the this offering is $500.
                           There is no minimum number of shares that must be
                           sold in the offering. All costs of the offering,
                           other than sales commissions to BDFSC, will be paid
                           directly by the Fund. Unless otherwise directed by
                           the investor, shares purchased by each investor will
                           be held by the Fund's transfer agent in
                           noncertificated form in the name of the investor.

Investment Adviser.....    The Fund's investment adviser is Growth Fund Advisor,
                           Inc., a Michigan corporation ("Investment Adviser").
                           Its parent organization, National Association of
                           Investment Clubs Trust, has been engaged in providing
                           investment education and advisory services since
                           1951. The Fund's initial investment adviser was
                           National Association of Investors Corporation
                           ("NAIC"), an affiliate of the Investment Adviser. As
                           part of a corporate reorganization, the Trust formed
                           the Investment Adviser, which succeeded NAIC as
                           investment adviser to the Fund in 1999. The
                           Investment Adviser follows the following four
                           investment principles developed by NAIC:

                             -   Invest regularly
                             -   Reinvest earnings
                             -   Invest in "growth"
                             -   Diversify


Advisory Fee...........    Under the Advisory Agreement, the Fund pays the
                           Investment Adviser an annual fee equal to 0.75% of
                           the Fund's average weekly net asset value. The Fund's
                           predecessor investment adviser, NAIC, waived the
                           entire fee from the Fund's inception in 1990 through
                           1997. NAIC and the Investment Adviser, as applicable,
                           collected 25% of the fee in 1998, 50% of the fee in
                           1999, and 75% of the fee in 2000. The Investment
                           Adviser did not waive any of its fee during 2001 and
                           has advised the Fund it does not intend to waive any
                           fees in the future.

Risk Factors...........    An investment in the Fund involves certain risks,
                           including:

                           -     Investing for long-term appreciation with
                                 little regard to short-term market
                                 fluctuations. Price fluctuations over the short
                                 term can have an effect on the Fund's net asset
                                 value; stocks may have significant fluctuations
                                 in price.
                           -     Investing in "growth companies" that may be
                                 more subject to business operating risks,
                                 economic conditions or market trends and
                                 volatility than other companies.
                           -     Investing in "special situation" companies that
                                 are expected to have developments (e.g., a
                                 possible takeover, new product, etc.) uniquely
                                 applicable to that company. If the anticipated
                                 development





                                       2
<PAGE>


                                 does not occur, shares of "special situation"
                                 companies may not appreciate in value or may
                                 decrease in value.
                           -     Reliance on key personnel of the Investment
                                 Adviser.
                           -     Characteristics of closed-end investment
                                 companies, like the Fund, such as the shares
                                 trading at a discount to the Fund's net asset
                                 value and fluctuations in the market price of
                                 the Fund's shares.
                           -     Securities of small and medium sized companies
                                 may involve greater risk than investing in
                                 larger companies.
                           -     Foreign investments may be subject to
                                 heightened political and economic risks,
                                 particularly in countries with unstable
                                 governments, immature economic structures,
                                 different legal systems, economies based on few
                                 industries, and national policies restricting
                                 investments by foreigners.


Distribution Policy....    The Fund distributes to shareholders at least
                           annually substantially all net long-term and
                           short-term capital gains, dividends and other income
                           of the Fund, after payment of Fund expenses.

Dividend Reinvestment
and Cash Purchase
Plan...................    You may elect to have all dividends and distributions
                           which accrue to you as a shareholder in the Fund
                           automatically reinvested pursuant to the Fund's
                           Dividend Reinvestment and Cash Purchase Plan.
                           Depending upon market price per share compared to the
                           then current net asset value per share of the Fund,
                           the Plan Agent will either (a) receive shares from
                           the Fund or (b) purchase shares on the open market on
                           behalf of the participants in the Plan. If you elect
                           to participate in the Dividend Reinvestment and Cash
                           Purchase Plan, you may also elect to make additional
                           cash payments for investment by the Plan Agent in
                           additional Fund shares.





                                        3

<PAGE>




                             FINANCIAL HIGHLIGHTS(A)
                              --------------------

         The financial highlights present a per share analysis of how the Fund's
net asset value has changed during the periods presented. You should read this
information in conjunction with the Fund's audited financial statements and
notes incorporated by reference in the Statement of Additional Information. The
financial highlights for each of the ten years ended December 31 were derived
from the Fund's audited financial statements that have been audited by Arthur
Andersen LLP, independent certified public accountants. Plante & Moran, LLP
replaced Arthur Andersen LLP as the Fund's independent certified public
accountants effective May 9, 2002.

<TABLE>
<CAPTION>

                                                                   Year Ended December 31,
                         Six                              ----------------------------------------
                      Months
                       Ended     2001       2000       1999       1998       1997      1996      1995      1994      1993      1992
                    June 30,
                        2002
                 (unaudited)
- ------------------------------------------------------------------------------------------------------------------------------------
<S>              <C>           <C>       <C>         <C>        <C>       <C>       <C>       <C>       <C>        <C>      <C>
NET ASSET VALUE
AT BEGINNING OF       $11.08    $11.96     $11.22     $10.86      $9.56      $7.89    $6.61      $5.00     $4.89     $4.71     $4.37
PERIOD
- ------------------------------------------------------------------------------------------------------------------------------------
NET INVESTMENT
INCOME                   .01       .04        .09        .08        .12        .09      .09        .07       .04       .03       .05

NET REALIZED
AND UNREALIZED
GAIN ON
INVESTMENTS              .39     (.25)       2.18        .76       1.68       1.99     1.52       1.66       .11       .18       .37
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL FROM
INVESTMENT
OPERATIONS               .38     (.21)       2.27        .84       1.80       2.08     1.61       1.73       .15       .21       .42

DISTRIBUTIONS
FROM:
   NET
INVESTMENT
  INCOME                  --     (.04)      (.09)      (.09)      (.11)      (.09)    (.09)      (.07)     (.04)     (.02)     (.04)
   REALIZED GAINS         --     (.64)     (1.44)      (.39)      (.39)      (.32)    (.24)      (.05)         0     (.01)     (.04)
- ------------------------------------------------------------------------------------------------------------------------------------
  TOTAL                   --     (.67)     (1.53)      (.48)      (.50)      (.41)    (.33)      (.12)     (.04)     (.03)     (.08)
DISTRIBUTIONS

NET ASSET VALUE
AT END OF
PERIOD                $10.70    $11.08     $11.96     $11.22     $10.86      $9.56    $7.89      $6.61     $5.00     $4.89     $4.71
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>




                                       4
<PAGE>


<TABLE>
<CAPTION>

                                                                   Year Ended December 31,
                         Six                              ----------------------------------------
                      Months
                       Ended     2001       2000       1999       1998       1997     1996       1995      1994      1993      1992
                    June 30,
                        2002
                 (unaudited)
- ------------------------------------------------------------------------------------------------------------------------------------
<S>              <C>           <C>       <C>         <C>        <C>       <C>       <C>       <C>       <C>        <C>      <C>
PER SHARE
MARKET VALUE,
END OF  PERIOD

         ASK          $11.05     10.75     $11.00     $10.25     $10.75     $15.25   $ 9.75      $7.13    $ 4.75     $5.63     $6.00

         BID          $10.55     10.25     $10.50     $10.00     $10.25     $14.50   $ 9.44      $6.88    $ 4.69    $ 4.75    $ 4.75

TOTAL
INVESTMENT
RETURN:

BASED ON
MARKET VALUE
     1 YEAR            5.94%     3.70%     30.90%      2.85%   (25.42%)     58.50%   42.94%     49.70%   (0.54%)     0.83%     1.72%
     FROM
INCEPTION             11.42%    11.66%     12.57%     10.28%     11.30%     17.84%   12.59%      7.85%     0.27%     0.50%     0.37%

BASED ON NET
ASSET VALUE
     1 YEAR          (6.74%)   (1.59%)     27.27%      7.75%     18.84%     26.43%   24.46%     34.60%     3.12%     4.65%     9.51%
     FROM
INCEPTION             11.55%    12.42%     13.81%     13.15%     13.79%     13.69%   11.92%      9.78%     4.92%     5.45%     5.77%

NET ASSETS, END
OF PERIOD (000's)  $24,047.6 $23,902.2  $23,927.8  $22,351.7  $20,701.2  $17,335.3  $13,487  $10,989.1  $8,316.6  $8,081.8  $7,432.3
</TABLE>

(A) All per share data for 2000, 1999, 1998, and 1997 has been restated to
reflect the effect of a 15% stock dividend which was declared on August 18, 2000
and paid on September 29, 2000 to shareholders of record on September 18, 2000,
and a 100% stock dividend which was declared on August 22, 1997 and paid October
1, 1997 to shareholders of record on September 12, 1997.


<TABLE>
<CAPTION>

                                                               Year Ended December 31,
                    Six                                 -----------------------------------
                  Months
                   Ended
                 June 30,     2001      2000     1999      1998       1997        1996      1995          1994      1993      1992
                   2002
               (unaudited)
- ------------------------------------------------------------------------------------------------------------------------------------
<S>            <C>           <C>       <C>      <C>       <C>       <C>        <C>         <C>         <C>        <C>       <C>
RATIOS TO
AVERAGE NET
ASSETS:

RATIO OF            1.47%     1.57%     1.25%    1.00%     0.83%      0.96%      0.96%       1.19%        1.81%     2.00%     2.00%
EXPENSES TO
AVERAGE NET
ASSETS (B)

RATIO OF NET         .16%     0.32%     0.74%    0.70%     1.13%      0.96%      1.10%       1.16%        0.77%     0.63%     0.92%
INVESTMENT
INCOME
 TO AVERAGE NET
ASSETS (B)

PORTFOLIO          11.79%     1.77%    10.61%    4.20%     5.87%      6.31%      5.93%       6.90%        6.56%     0.62%     3.50%
TURNOVER RATE

AVERAGE            $0.125    $0.125    $0.125   $0.125    $0.125     $0.125     $0.125      $0.125       $0.125    $0.125    $0.125
COMMISSION RATE
PAID PER SHARE

- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

(B) For the years ended 2000, 1999, 1998, 1997, 1996, 1995, and 1994, the
Investment Adviser voluntarily waived all or a portion of its fees. Had the
Investment Adviser not done so in 2000, 1999, 1998, 1997, 1996, 1995, and 1994
the ratio of expenses to average net assets would have been 1.44%, 1.37%, 1.39%,
1.69%, 1.68%, 1.94%, and 2.00% and the ratio of net investment income to average
net assets would have been 0.55%, 0.32%, 0.57%, 0.23%, 0.38%, 0.41%, and 0.58%
for each of these years.




                                        5
<PAGE>


                                  RISK FACTORS

         The following summarizes certain risks that you should consider before
deciding whether to invest in the Fund.

General Considerations

         You should understand that all investments have risks. Therefore, the
Fund cannot guarantee you will not realize losses from investing in the Fund. In
addition, the Fund cannot give you any assurance that the Fund's investment
policy will be successful or that the Fund will attain its investment
objectives. The Fund is not intended to serve as a complete investment program
for an investor.

Long-Term Perspective


         The Fund emphasizes investing in equity securities for long-term
capital appreciation as measured by "total return," with little regard to
short-term market fluctuations. The Fund tries to achieve total return by
investing in those equity securities with growth potential and that also may be
expected to increase cash dividends on a regular basis. While the Fund does not
attempt to purchase equity securities that have a high yield, relative to the
popular stock averages, a record of increased cash dividends is one of the
factors taken into consideration when selecting equity securities for the Fund's
portfolio. The Fund is intended for investors who understand and are willing to
accept the risks of seeking long-term appreciation.


Investment in Growth Companies


         Most of the companies in which the Fund invests are "growth companies."
A "growth company" is a company that has exhibited faster-than-average gains in
earnings over the last few years and is expected to continue to show high levels
of profitable growth. The stocks of growth companies may involve more risk. For
example, growth companies may have limited product lines, markets or financial
resources and may lack management depth. In addition, stocks of such companies
may have limited marketability and may be subject to more abrupt or erratic
changes in stock price than securities of larger, more established companies or
than overall market averages in general.


Investment in Special Situation Companies


         The Fund may also invest in companies that are determined by the
Investment Adviser to possess "special situation" characteristics by reason of
developments uniquely applicable to that company, such as possible takeovers,
new product announcements, etc. If the anticipated development does not occur,
shares of "special situation" companies may not appreciate in value or may
decrease in value.

Investment in Small and Medium Sized Companies

         Investing in securities of small and medium sized companies may involve
greater volatility than investing in larger and more established companies
because they can be subject to more abrupt or erratic share price changes than
larger, more established companies. Small companies may have limited product
lines, markets or financial resources and their management may be dependent on a
limited number of key individuals. Securities of these companies may have
limited market liquidity and their prices may be more volatile.

Investment in Foreign Companies

         Investments in securities of foreign companies involve certain inherent
risks. Foreign investments may be subject to heightened political and economic
risks, particularly in countries with unstable governments, immature economic
structures, different legal systems, economies based on few industries, and
national policies restricting investments by foreigners. There is also the risk
of unpredictable government confiscation of company assets and/or other
controls. Further, foreign issuers may not be subject to the same uniform
accounting, auditing, or financial reporting standards. The Fund's investments
in companies located in particular foreign countries could be adversely affected
by changes in the value of that country's currency.


Reliance on Key Personnel


         Kenneth S. Janke is primarily responsible for the investment decisions
made by the Investment Adviser on behalf of the Fund. Mr. Janke was also
responsible, together with Thomas E. O'Hara, for the investment decisions made
on behalf of the Fund by the Investment Adviser's predecessor, NAIC.
Accordingly, Mr. Janke has been responsible in whole or in part for the
investment decisions made on behalf of the Fund since the Fund's inception. Mr.
Janke is a Director and Chairman and Chief Executive Officer of the Adviser. Mr.
Janke's principal occupation during the past five years has been President (to
February, 2002), Chairman and Chief Executive Officer (from February, 2002 to
July, 2002), and Chairman (from July, 2002) of NAIC. There can be no assurance
that a replacement can be




                                       6
<PAGE>

found for Mr. Janke in the event he severs his employment relationship with the
Investment Adviser or is unable to fulfill his role due to death or disability.
There is no written employment contract between Mr. Janke and the Investment
Adviser. Mr. Janke is 67 years old.

Offering Price


         The shares will be sold in the offering at a price equal to the Fund's
net asset value per share as of the applicable determination date (usually, the
close of business on the Thursday immediately prior to the sale in the
offering), plus the applicable sales charge. The sales price may be determined
by the following formula: net asset value divided by (1 minus the applicable
sales charge), rounded to the nearest penny. Because the market value of the
shares is likely to be different than the net asset value per share at any given
time, the purchase price of shares in the offering may be more or less than the
prevailing market price of the shares at the time of the sale. Because shares of
closed-end funds frequently trade at market prices less than the net asset value
per share, it is likely that the offering price per share will be greater than
the market price per share at any given time.


Investment Company Shares

         As with any security, shares of the Fund may increase or decrease in
value from time to time, and these changes may or may not be related to changes
in the value of the securities held by the Fund (as reflected in its net asset
value). In addition, shares of closed-end investment companies like the Fund
frequently trade at a discount from net asset value. The possibility that shares
of the Fund will trade at a discount to net asset value is a risk which is
separate from the risk that the Fund's net asset value will decrease. The Fund
cannot predict whether its shares will trade in the future at a premium to or a
discount from net asset value or the level of any premium or discount.

Secondary Market for Fund's Shares

         The issuance of shares in the offering may have an adverse effect on
the secondary market for the Fund's shares. The increase in outstanding shares
resulting from the offering may put downward pressure on the market price for
the shares of the Fund. The Fund also issues shares through its Dividend
Reinvestment and Cash Purchase Plan. See "Dividend Reinvestment and Cash
Purchase Plan." Shares may be issued under the Dividend Reinvestment and Cash
Purchase Plan at a discount to the market price for the shares, which may also
put downward pressure on the market price for shares of the Fund.

Repurchase of Shares by the Fund

         You will not have the right to have the Fund redeem your shares.
However, the Fund is authorized to repurchase shares when they are trading at a
discount of 10% or more below net asset value. If the Fund decides to repurchase
shares, it is permitted to borrow money to finance these repurchases. Any such
borrowing will exaggerate the effect of an increase or decrease in the value of
portfolio securities on the Fund's net asset value. In addition, the Fund will
be required to pay interest and other costs (such as commitment fees or the cost
of maintaining minimum average balances) with respect to the borrowed funds, and
these expenses may exceed the benefit to the Fund from repurchasing its shares.

Anti-Takeover Provisions

         Certain provisions of the Fund's Articles of Incorporation and By-laws
are designed to prevent a takeover of the Fund. These provisions may have the
effect of depriving shareholders of an opportunity to sell their shares at a
premium. See "Description of Shares."

Regulated Investment Company

         The Fund has conducted and intends to continue to conduct its
operations so that it qualifies as a "regulated investment company" for purposes
of the Internal Revenue Code of 1986, as amended (the "Code"). This relieves the
Fund of any liability for federal income tax to the extent that its earnings are
distributed to its shareholders. If the Fund fails at any time to qualify as a
"regulated investment company," the income of the Fund for that fiscal year will
be taxed. This would result in a decrease in income for distribution to
shareholders of the Fund and a reduction in the net asset value of the Fund.



                                    THE FUND

         The Fund is a diversified, closed-end management investment company.
Its investment objective is long-term growth as measured by "total return" on
investment. "Total return" means the total of all income derived from, and the
capital appreciation in value of, a particular investment over a particular
period of time with particular emphasis on capital appreciation. The Fund tries
to achieve total return by investing in those equity securities with growth
potential and that also may be expected to increase cash dividends on a regular
basis. While the Fund does not attempt to purchase equity securities that have a
high yield, relative to the popular stock averages, a record






                                       7
<PAGE>


of increased cash dividends is one of the factors taken into consideration when
selecting equity securities for the Fund's portfolio.

         The Fund was incorporated under the laws of the State of Maryland on
April 11, 1989, and has registered under the Investment Company Act of 1940, as
amended (the "1940 Act"). The business of the Fund is managed under the
direction of its Board of Directors. The Fund's initial offering of shares of
Common Stock was completed on July 2, 1990 with 549,810 shares issued at a price
of $10 per share. A 15% stock dividend was declared on August 18, 2000 and paid
on September 29, 2000 to shareholders of record on September 18, 2000, and a
100% stock dividend was declared on August 22, 1997 and paid October 1, 1997 to
shareholders of record on September 12, 1997. As of December 31, 2002, the Fund
had 2,264,097 shares outstanding. The Fund has a total of 50,000,000 authorized
shares of common stock.


         The Fund is not a party to any material pending legal proceedings.

         The Fund's common stock is listed on the Chicago Stock Exchange (the
"Exchange") under the symbol "GRF." The following table shows, for the periods
indicated, the Fund's (1) the high and low prices per share on the Exchange, (2)
net asset value per share on the date of the high or low market price, and (3)
the high and low premium (discount) to net asset value per share on that day.



<TABLE>
<CAPTION>

                              Price Per Share         Applicable Net Asset Value            Premium/
                                                              Per Share                (Discount) to NAV
                           ---------------------      --------------------------     ----------------------
Calendar Quarters Ended
- -----------------------
                             High          Low            High          Low           High            Low
                             ----          ---            ----          ---           ----            ---
<S>                       <C>           <C>            <C>           <C>            <C>            <C>
December 31, 2002          $ 11.00       $  8.70        $  9.93       $  9.08         10.8%          (4.2)%
September 30, 2002           10.85          8.70          10.53          9.50          3.0%          (8.4)%
June 30, 2002                11.50         10.80          10.83         10.70          6.2%           0.9%
March 31,  2002              11.05         10.25          11.50         11.08         (3.9)%         (7.5)%
December 31, 2001            11.05         10.25          11.50         10.97         (3.9)%         (6.6)%
September 30, 2001           12.25         10.50          11.65         10.97          5.2%          (4.3)%
 June 30, 2001               12.00         11.00          11.70         11.14          2.6%          (1.3)%
March 31, 2001               11.63         10.75          11.69         10.59         (0.5)%         (1.5)%
December 31, 2000            12.25         10.75          13.18         12.42         (7.1)%        (13.4)%
September 30, 2000           11.26         10.41          13.07         12.75        (13.9)%        (18.3)%
June 30, 2000                10.63          9.56          12.69         12.33        (16.3)%        (22.5)%
March 31, 2000                9.93          8.61          10.86         10.79         (8.5)%        (20.2)%
December 31, 1999             9.24          8.50          11.23         10.96        (17.7)%        (22.5)%
September 30, 1999           10.20          9.14          11.27         10.49         (9.5)%        (12.9)%
June 30, 1999                 9.99          9.14          11.18         11.09        (10.7)%        (17.6)%
March 31, 1999                9.30          8.71          10.77         10.48        (13.7)%        (16.8)%
</TABLE>



         On January 9, 2003, the net asset value per share was $9.32 and the
high sale price was $10.60, which represents a premium of 13.7% from the net
asset value. Like most closed-end investment companies, since the Fund's
inception its shares have generally traded on the market for an amount less than
their net asset value. The Fund cannot predict whether its shares will trade in
the future at a premium or discount to net asset value, and if so, the level of
such premium or discount.




                                       8
<PAGE>

                        INVESTMENT OBJECTIVE AND POLICIES


         The investment objective of the Fund is long-term growth utilizing the
concept of "total return" for selecting investments. The Fund's investment
objective may only be changed by the affirmative vote of a majority of the
Fund's outstanding common stock. The Fund attempts to achieve its objective by
investing primarily in a diversified portfolio of equity securities. These
securities may include common and preferred stocks, securities convertible into
common stocks, and securities of "growth" companies and companies that possess
"special situation" characteristics. The Fund invests in securities according to
the perceived potential, whether those securities have large or small market
capitalization. The majority of holdings are in large market capitalization
stocks, but the Fund tries to have a balance in large, medium and small
companies (as measured by sales or revenues). Foreign securities may be
purchased, but special attention is given to the risks associated with such
securities. Accordingly, the Fund typically invests in the securities of
companies that have price/earnings and debt/equity ratios equal to or lower than
the average for companies in the same industry. Other important factors the
Investment Adviser takes into consideration are the price of the stock in
relation to the value of the underlying assets of the company. In addition, the
Fund does not generally invest in senior securities.

         The Fund may not issue senior securities, purchase any securities on
margin or make short sales of securities, borrow money or underwrite securities
of other issuers, except under limited circumstances permitted by the Fund's
investment guidelines. For further information concerning the Fund's investment
guidelines, including the limitations on and exceptions to such guidelines, see
the information under the caption "Investment Guidelines" in the Statement of
Additional Information.


                             THE INVESTMENT ADVISER

Background

         The Fund's investment adviser is Growth Fund Advisor, Inc. (the
"Investment Adviser"), a Michigan corporation that is registered with the
Securities and Exchange Commission under the Investment Advisers Act of 1940.
The Investment Adviser provides the Fund with investment advisory services and,
subject to the authority of the Board of Directors of the Fund, is responsible
for the overall management of the Fund. The Fund is the Investment Adviser's
only advisory client.

         The Investment Adviser assumed the role of providing investment
advisory services to the Fund on September 1, 1999 from the Fund's former
investment adviser, National Association of Investors Corporation ("NAIC"), a
Michigan nonprofit corporation. The Investment Adviser is an indirect wholly
owned subsidiary of the National Association of Investment Clubs Trust (the
"Trust"), which is also the sole shareholder of NAIC.

         The Trust was formed in 1951 by three investment clubs with the
objective of educating investors and promoting the formation of investment
clubs. NAIC was organized by the Trust in 1975 to further this objective. Both
NAIC and the Trust throughout their respective histories have been integrally
involved in educating investors and assisting and encouraging the formation and
operation of investment clubs. The Investment Adviser was organized in March
1999 to take over the investment advisory activities of NAIC, as part of a
restructuring of NAIC and its various affiliates.


         NAIC publishes Better Investing, a monthly magazine distributed to its
members and other subscribers. Better Investing provides investment and
educational services to the public. Prior to the incorporation of NAIC in 1975,
Better Investing was published by the Trust. The publication began in 1951 and
was originally known as National Association of Investment Clubs News. In 1955,
the name was changed to NAIC Bulletin and changed again in 1958 to Investment
Club Bulletin. In 1965, the publication name was changed to Better Investing. As
of December 31, 2001 Better Investing had over 375,911 subscribers, making
Better Investing one of the largest investor magazines in the United States.


         The Investment Adviser's address is 711 West Thirteen Mile Road,
Madison Heights, Michigan 48071.

Investment Principles

         Through their work with investors over several decades in connection
with providing educational services, publishing Better Investing magazine, and
assisting and promoting the formation of investment clubs, NAIC and the Trust
developed an investment philosophy based on certain investment principles. The
Trust and NAIC advocate their use in the NAIC Official Guide, Starting and
Running a Profitable Investment Club, one of the educational materials prepared
by the Trust and the NAIC. These investment principles may be summarized as
follows:

                  - Invest Regularly: Money should be invested regularly without
                  thought as to whether the stock market itself is high or low.
                  Forecasting short-term movements in the stock market is very
                  difficult but historically domestic stock prices have
                  generally moved upwards over long periods of time. Also,
                  regular purchases of stocks over a period of time without
                  regard to whether the stock market is high or low will
                  frequently result in a lower average cost per share.



                                       9
<PAGE>

                  - Reinvest Earnings: The reinvestment of earnings provides
                  funds for the purchase of securities and generally builds up
                  net worth.

                  - Invest in "Growth": Buying stocks of companies whose sales
                  and earnings are expected to grow faster than the total
                  economy and faster than their competitors is important because
                  such growth, if it is on a sound basis, is likely to result in
                  higher stock prices.

                  - Diversify: Investments should be diversified, both by the
                  type of industry and size of company.

         NAIC has also developed a stock study program designed to assist its
members in (1) studying an individual company so as to form a judgment as to its
potential investment value, (2) comparing several companies and selecting for
investment the stocks of companies that best meet their investment objectives,
and (3) keeping informed on the stocks currently owned or which they contemplate
owning in order to make informed decisions concerning further purchases or
sales.

         The Investment Adviser uses the NAIC's investment principles and the
methodology of the NAIC's stock study program in advising the Fund. However, the
investment principles and stock study program were developed by the Trust and
NAIC primarily for use by NAIC's members, and therefore they are not directly
applicable in all cases to the management of the Fund's portfolio. The
Investment Adviser may also use other investment principles or methods in
managing the Fund's investments.

Advisory Fee


         The Fund and the Investment Adviser, as successor to NAIC, are parties
to an Investment Advisory Agreement dated October 2, 1989 (the "Advisory
Agreement"). Pursuant to the Advisory Agreement the Fund pays the Investment
Adviser an annual advisory fee equal to 0.75% of the weekly net assets of the
Fund. However, if the weekly net assets of the Fund are less than $3,800,000
during any week, then no advisory fee is paid or accrued by the Fund to the
Investment Adviser for that week. The advisory fee is paid on a monthly basis.
The Investment Adviser's predecessor, NAIC, waived all of its advisory fees
since the inception of the Fund in 1990 through 1997. The Investment Adviser or
its predecessor, as applicable, collected 25% of the fee in 1998, 50% of the fee
in 1999, and 75% of the fee in 2000. The Investment Adviser collected all of its
advisory fee in 2001 and has advised the Fund it does not intend to waive any of
its fees in the future.


Payment of Expenses

         In addition to the advisory fee paid to the Investment Adviser, the
Fund pays all of the other costs and expenses of its operation. This includes,
among other things, expenses for legal and auditing services, costs of printing
proxies, stock certificates and shareholder reports, charges of the custodian
and transfer agent, SEC filing fees, fees and expenses of unaffiliated
directors, accounting and pricing costs, membership fees and trade association
dues, insurance, interest, brokerage costs, taxes, stock exchange listing fees
and expenses, expenses of qualifying the Fund's shares for sale in various
states, and other miscellaneous expenses properly payable by the Fund. The
Advisory Agreement provides that the Fund may not incur annual aggregate
expenses in excess of 2% of the first $10,000,000 of the Fund's average net
assets, 1.5% of the next $20,000,000 of average net assets, and 1% of the
remaining average net assets for any fiscal year. Any excess Fund expenses are
the responsibility of the Investment Adviser, and the pro rata portion of the
estimated annual excess expenses is offset against the Investment Adviser's
monthly advisory fee. In the event such amount exceeds the advisory fee payable
to the Investment Adviser in any month, no advisory fees are paid to the
Investment Adviser.


         The Fund will pay the expenses of this offering, other than the sales
charges which are payable by the investors, directly from the general assets of
the Fund. These costs will not be considered an expense of the Fund for purposes
of the expense limitations of the Advisory Agreement.


Portfolio Management


         Kenneth S. Janke is primarily responsible for the investment decisions
made by the Investment Adviser on behalf of the Fund. Mr. Janke was also
responsible, together with Thomas E. O'Hara, for the investment decisions made
on behalf of the Fund by the Investment Adviser's predecessor, NAIC.
Accordingly, Mr. Janke has been responsible in whole or in part for the
investment decisions made on behalf of the Fund since the Fund's inception. Mr.
Janke is a Director and Chairman and Chief Executive Officer of the Investment
Adviser. Mr. Janke's principal occupation during the past five years has been
President (to February, 2002), Chairman and Chief Executive Officer (from
February, 2002 to July, 2002), and Chairman (from July, 2002) of NAIC.


Legal Proceedings

         The Investment Adviser is not a party to any material pending legal
proceedings.



                                       10
<PAGE>

                                 USE OF PROCEEDS


         The Fund estimates the net proceeds from the sale of the shares offered
hereby will be $46,432,919, based on the Fund's net asset value of $9.32 on
January 9, 2003 and a sale price per share of $9.81, as estimated $2,450,000
sales charge, and an estimated $167,081 in expenses, assuming that the offering
continues for a two year period and all of the shares are sold in the offering.
The Investment Adviser expects to invest the net proceeds in accordance with the
Fund's investment objectives and policies. The timing of these investments will
depend on when such proceeds are received and the availability at that time of
securities meeting the Fund's investment guidelines and policies and other
relevant conditions. Pending such investment, it is anticipated that the
proceeds will be invested in short-term debt obligations or instruments.
Investments in such short-term debt obligations or investments may reduce the
Fund's yield. Because of the continuous nature of the offering, the Fund does
not expect to encounter difficulties in investing the offering proceeds, and
anticipates that the proceeds will be invested within a three- to six-month
period after receipt by the Fund.


                               DISTRIBUTION POLICY

         Dividends will be paid annually on the shares in amounts representing
substantially all the net investment income, if any, earned each year. Dividend
payments will vary in amount, depending on investment income received and
expenses of operation. Substantially all of any taxable net capital gain
realized on investments will be paid to shareholders at least annually. The net
asset value of each share that you own will be reduced by the amount of the
distributions or dividends that you receive from that share.

                  DIVIDEND REINVESTMENT AND CASH PURCHASE PLAN

         The Fund invites you to join the Dividend Reinvestment and Cash
Purchase Plan (the "Plan"), which is provided to give you easy and economical
ways of increasing your investment in the Fund's shares. IF YOU HAVE ALREADY
ELECTED TO PARTICIPATE IN THE PLAN, YOU DON'T NEED TO DO ANYTHING FURTHER TO
MAINTAIN YOUR ELECTION. Participation in the Plan is not automatic and you must
affirmatively elect to participate. American Stock Transfer & Trust Company acts
as the Plan Agent on behalf of shareholders who are participants in the Plan.

         A subscriber for shares in this offering (other than a broker or a
nominee from a financial institution) who is not currently a shareholder of the
Fund, or a person who is currently a shareholder of the Fund who has not
previously elected to participate in the Plan, or a shareholder which has
terminated its election, may elect to become a participant in the Plan by
filling in and signing a form of authorization included as part of the
subscription agreement accompanying this prospectus and mailing the form to the
Plan Agent, American Stock Transfer & Trust Company, P.O. Box 922, Wall Street
Station, New York, New York 10038. The authorization must be signed by each of
the registered shareholders of an account. Your participation in the Plan is
voluntary and may be terminated or resumed at any time upon written notice from
you received by the Plan Agent prior to the record date of the next dividend.
Additional information regarding the election may be obtained from the Fund.

         Dividend payments and other distributions made by the Fund to
participants in the Plan are made in one of two ways. They are paid to the Plan
Agent either in cash (which then are used to purchase shares in the open
market), or by the delivery of newly-issued Fund shares. The option chosen by
the Plan Agent is the one that the Plan Agent determines is the most favorable
to Plan participants, as described below.


         The Fund determines the net asset value of the Fund's shares on a date
(a "Valuation Date") which is not more than five business days prior to a date
fixed for payment of a dividend or other distribution from the Fund. The Plan
Agent then compares the determined net asset value per share with the market
price per share. For purposes of the Plan, "market price" is the highest price
bid at the close of the market by any market maker on the date which coincides
with the relevant Valuation Date, or, if no bids were made on such date, the
next preceding day on which a bid was made. The market price was $10.60 on
January 9, 2003.


         If the net asset value per share in any such comparison is lower than
the market price per share, then the Plan Agent instructs the Fund to satisfy
its obligation with respect to any such dividend or other distribution by
issuing additional shares to the participants in the Plan. The shares are issued
at a price per share equal to the greater of the determined net asset value per
share or 95% of the market price per share determined as of the close of
business on the relevant Valuation Date.

         However, if the net asset value per share (as determined above) is
higher than the market price per share, then the Plan Agent instructs the Fund
to satisfy its obligation with respect to any such dividend or other
distribution by a cash payment to the Plan Agent for the account of Plan
participants. The Plan Agent uses such cash payment to buy additional shares in
the "open market" for the account of the Plan participants. However, the Plan
Agent does not purchase shares in the open market at a price in excess of the
net asset value per share as of the relevant Valuation Date. If the Plan Agent
is unable to complete its acquisition of shares to be purchased in the open
market by the end of the first trading day following receipt of the cash payment
from the Fund, any remaining funds are used by the Plan Agent to purchase newly
issued shares of the Fund's common stock from the Fund. The shares are issued at
a price equal to the greater of





                                       11
<PAGE>

the determined net asset value per share or 95% of the market price per share as
of the date coinciding with or next preceding the date of the relevant Valuation
Date.


         Participants in the Plan have the option of making additional cash
payments to the Plan Agent, on a monthly basis, for investment in the Fund's
shares. Such payments may be made in any amount from a minimum of $50 to a
maximum of $1,000 per month. The Fund may, in its discretion, waive the maximum
monthly limit with respect to any participant. At the end of each calendar
month, the Plan Agent determines the amount of funds accumulated. Purchases made
from the accumulation of payments during each calendar month are made on or
about the first business day of the following month ("Investment Date"). These
funds are used to purchase shares of the Fund's common stock from the Fund if
the net asset value per share is lower than the market price per share as of the
Valuation Date which occurs not more than five business days prior to the
relevant Investment Date. In such a case, the Fund issues the shares at a price
per share equal to the greater of the determined net asset value per share or
95% of the market price per share. If the net asset value per share is higher
than the market price per share, then the Plan Agent uses such cash payments to
buy additional shares in the open market for the account of the Plan
participants. However, the Plan Agent will not purchase shares in the open
market at a price in excess of the net asset value as of the relevant Valuation
Date. If the Plan Agent is unable to complete its acquisition of shares to be
purchased in the open market by the end of the Investment Date, any remaining
cash payments are used by the Plan Agent to purchase newly issued shares of the
Fund's common stock from the Fund at a price per share equal to the greater of
the determined net asset value per share or 95% of the market price per share as
of the relevant Valuation Date. All cash payments received by the Plan Agent in
connection with the Plan are held without earning interest. To avoid unnecessary
cash accumulations, and also to allow ample time for receipt and processing by
the Plan Agent, participants that wish to make voluntary cash payments should
send such payments to the Plan Agent in such a manner that assures that the Plan
Agent will receive immediately available funds by the end of the month. If a
voluntary cash payment is not received in time to purchase shares in any
calendar month, such payment will be invested on the next Investment Date. A
participant may withdraw a voluntary cash payment by written notice to the Plan
Agent if the notice is received by the Plan Agent at least 48 hours before such
payment is to be invested by the Plan Agent.


         The Plan Agent performs bookkeeping and other administrative functions,
such as maintaining all participants' accounts in the Plan and furnishing
written confirmation of all transactions in the accounts, including information
needed by shareholders for personal and tax records. Shares in the account of
each participant are held by the Plan Agent in noncertificated form in the name
of the participant, and each shareholder's proxy includes those shares purchased
pursuant to the Plan and of record as of the record date for determining those
shareholders who are entitled to vote on any matter involving the Fund. In case
of shareholders such as banks, brokers or nominees holding shares for others who
are the beneficial owners, the Plan Agent administers the Plan on the basis of
the aggregate number of shares certified from time to time by such shareholders
as held for the account of beneficial owners who have elected to participate in
the Plan.

         There are no special fees or charges to participants in the Plan other
than reasonable transaction fees and a termination fee of $15 plus 10(cent) per
share. For purchases by voluntary cash payments under the Plan, the Plan Agent
will charge a pro rata share of the brokerage commissions, if any. Brokerage
charges for purchasing small blocks of stock for individual accounts through the
Plan are expected to be less than the usual brokerage charges for such
transactions, as the Plan Agent purchases Shares for all participants in larger
blocks and prorating the lower commission rate thus applied.

         The automatic reinvestment of dividends and distributions does not
relieve participants of any associated income tax liability. See "Taxation."

         The Fund reserves the right to amend or terminate the Plan as applied
to any voluntary cash payment received and any dividend or distribution to be
paid subsequent to a date specified in a notice of the change sent to all
shareholders at least ninety days before such specified date. The Plan may also
be terminated on at least ninety days' written notice to all shareholders in the
Plan. All correspondence concerning the Plan should be directed to American
Stock Transfer & Trust Company, P.O. Box 922, Wall Street Station, New York, New
York 10038.

                                    TAXATION

         The Fund has elected to qualify, and intends to remain qualified, as a
regulated investment company under Subchapter M of the Internal Revenue Code.
The Fund will distribute substantially all of its net investment income and
gains to shareholders. Therefore, it is not expected that the Fund will be
subject to any federal income tax. These distributions are taxable as ordinary
income or capital gains. Shareholders may be proportionately liable for taxes on
income and gains of the Fund, but shareholders not subject to tax on their
income will not be required to pay tax on amounts distributed to them.

         Each January you will be sent information on the tax status of any
distribution made during the previous calendar year, including information on
the amount and nature of the income or gains.




                                       12
<PAGE>

         Because each shareholder's situation is unique, you should always
consult your tax adviser concerning the effect income taxes may have on your
individual investment.


                              DESCRIPTION OF SHARES
General

         The Fund's only authorized class of capital stock is common stock, par
value $.001 per share, of which 50,000,000 shares are authorized. The shares,
upon issuance and payment therefor in accordance with this prospectus, will be
fully paid and non-assessable. The shares have no preemptive, conversion or
subscription rights and have equal rights as to voting and liquidation.

         Shareholders' right to elect directors of the Fund is non-cumulative.
This means that the holders of a majority of the Fund's outstanding shares can
elect all of the directors nominated for election at a meeting called for that
purpose if they choose to do so. If this happens, the holders of the remaining
shares will not be able to elect any directors.

         Shares issued in accordance with this prospectus will be held by the
Fund's transfer agent in noncertificated form in the name of the investor,
unless the investor elects otherwise in the subscription agreement. Each
shareholder's proxy includes those shares purchased pursuant to the Plan and of
record as of the record date for determining those shareholders who are entitled
to vote on any matter involving the Fund. A shareholder may request the transfer
agent to issue certificates for its shares. Fractional shares will be held and
aggregated with other fractional shares and paid for by check in the event a
shareholder requests a certificate.


         The following table provides certain information about the Fund's
common stock as of December 31, 2002.

<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------
(1)                    (2)                          (3)                                  (4)
Title                  Amount Authorized            Amount Held by Fund or For its       Amount Outstanding
of Class                                            Account                              Exclusive of Amount Shown
                                                                                         under (3)
- ------------------------------------------------------------------------------------------------------------------
<S>                    <C>                         <C>                                   <C>
Common stock
$0.001 par value       50,000,000                   0                                    2,264,097 shares
- ------------------------------------------------------------------------------------------------------------------
</TABLE>

         The number of the Fund's shareholders of record, as of December 31,
2002, is 2,230. The Investment Adviser held no shares as of such date and NAIC,
the Investment Adviser's affiliate, held 29,544 shares as of such date. The
number of shares beneficially owned by all Fund officers and directors as a
group is 164,834 as of December 31, 2002, of which 7,455 are held in investment
clubs with which certain officers and directors are affiliated.


Repurchase of Shares

         The Fund's shareholders do not, and will not, have the right to have
their shares redeemed or repurchased by the Fund. The Fund may repurchase its
shares, however, from time to time as and when it is deemed advisable by the
Board of Directors of the Fund in order to attempt to reduce or eliminate a
market discount from the net asset value of the shares. Such repurchases will be
made, if at all, only when the shares are trading at a discount of ten percent
(10%) or more below the net asset value of the shares, and in accordance with
the 1940 Act which provides, in part, that the Fund must notify stockholders of
its intention to purchase shares on the open market at some time within the six
months preceding the purchase. The Fund may incur debt to finance share
repurchase transactions by borrowing from banks and others on an unsecured basis
as a temporary measure as described below ("Temporary Borrowings"). Such
Temporary Borrowings may not exceed five percent (5%) of the value of the Fund's
net assets at the time the loan is made. The Fund may pledge up to ten percent
(10%) of the lesser of the cost or value of its total assets to secure Temporary
Borrowings. The Fund will not borrow for investment purposes. Immediately after
any Temporary Borrowing, the Fund will maintain asset coverage of not less than
three hundred percent (300%) with respect to all Temporary Borrowings. The Fund
may not enter into Temporary Borrowing transactions with affiliates.


         The Fund is not required to repurchase shares. Historically, the Fund
has not repurchased any of its shares. The Board of Directors, in consultation
with the Investment Adviser, will review on a regular basis, at meetings of the
Board of Directors, the possibility of open market repurchases of the Fund's
shares. Any shares repurchased will be canceled and returned to the status of
authorized, but unissued common stock. Any repurchases of shares of the Fund
will decrease the total assets of the Fund, thereby increasing the Fund's
expense ratio.


         The shares trade in the open market, so long as any market exists, at a
price that is a function of several factors, including their net




                                       13
<PAGE>

asset value and yield. The shares of closed-end investment companies generally
sell at market prices that vary from their net asset values. If the Fund
repurchases its shares at prices below their net asset value, the net asset
value of the remaining outstanding shares may be increased, but there can be no
assurance that the market price of the remaining outstanding shares will be
affected, either positively or negatively. Further, interest on borrowings to
finance share repurchase transactions will reduce the Fund's net income. There
can be no assurance that any repurchase of the shares will result in the shares
trading at a price equal to or greater than their net asset value.

Certain Provisions of the Articles of Incorporation and By-laws

         The Fund presently has provisions in its articles of incorporation and
by-laws that could have the effect of limiting the ability of certain entities
or persons and their affiliates that beneficially own more than 5% of the
outstanding shares of the Fund (a "Principal Shareholder") to acquire control of
the Fund or to cause it to engage in certain transactions. The affirmative vote
or consent of the holders of sixty-six and two-thirds percent (66 2/3%) of the
shares of the Fund is required to authorize the conversion of the Fund from a
closed-end to an open-end investment company, and generally to authorize any of
the following transactions:

         -        Merger or consolidation of the Fund with or into any Principal
                  Shareholder;

         -        Issuance of any securities of the Fund to any Principal
                  Shareholder for cash;

         -        Sale, lease or exchange of all or any substantial part of the
                  assets of the Fund to any Principal Shareholder (except assets
                  having an aggregate fair market value of less than $500,000);
                  or

         -        Sale, lease or exchange to the Fund, in exchange for
                  securities of the Fund, of any assets of any Principal
                  Shareholder (except assets having an aggregate fair market
                  value of less than $500,000).

         However, any such vote or consent is not be required with respect to
the foregoing transactions if the Board of Directors under certain conditions
approves such transaction. Reference is made to the articles of incorporation
and by-laws of the Fund on file with the Securities and Exchange Commission for
the full text of these provisions. See "Further Information." These provisions
could have the effect of depriving shareholders of an opportunity to sell their
shares at a premium over prevailing market prices by discouraging a third party
from seeking to obtain control of the Fund in a tender offer or similar
transaction.

                        DETERMINATION OF NET ASSET VALUE


         The net asset value of the shares is computed based upon the market
value of the securities held by the Fund. Net asset value per share is
calculated by dividing the value of all of the securities held by the Fund plus
any cash or other assets minus all liabilities, including accrued expenses, by
the total number of shares outstanding at such time. It is determined as of the
close of business on Thursday of each week. If any Thursday is not a business
day, the net asset value is determined as of the close of business on the last
business day of the week preceding such Thursday. Portfolio securities are
valued at market. Securities and assets for which market quotations are not
readily available are valued at fair value by the Investment Adviser in
accordance with guidelines established by the Fund's Board of Directors and
provided to the Plan Agent. Investments with maturities of 60 days or less are
valued at amortized cost.


         Shares of closed-end investment companies frequently trade at a
discount to net asset value, but in some cases trade at a premium. The market
price of the shares is determined by factors that are beyond the control of the
Fund. These factors include trading volume of such shares, general market and
economic conditions. The Fund cannot predict whether its shares will trade at,
below or above net asset value. The Fund can, however, repurchase its own shares
if they are trading at a discount of ten percent (10%) or more of net asset
value.  See "Description of Shares."

                                  HOW TO INVEST

         To invest in the Fund, please follow the steps below. This will help
avoid any delays in processing your subscription.


                  -        Read this Prospectus carefully.

                  -        Determine how much you would like to invest. The
                           Fund's minimum investment is $500. The Fund reserves
                           the right to increase the amount of this minimum for
                           certain purchases. Sales charges payable to BDFSC
                           will be deducted from your subscription payment.


                  -        Carefully complete and sign the enclosed subscription
                           agreement, including the optional Dividend
                           Reinvestment and Cash Purchase Plan section if you
                           want to participate in the Plan. By joining the
                           Dividend Reinvestment and Cash Purchase Plan now, you
                           can avoid the delay and inconvenience of having to
                           submit an


                                       14
<PAGE>

                           additional application later.

                  -        Return the subscription agreement to NAIC Growth
                           Fund, Inc., c/o Growth Fund Advisor, Inc., P.O. Box
                           220, Royal Oak, Michigan 48068 with your check made
                           payable to "Standard Federal Bank N.A.- Escrow
                           Agent".

         All subscriptions are subject to acceptance by the Fund and approval by
BDFSC. Either the Fund or BDFSC may reject a subscription in its discretion for
any reason. Subscriptions may not be revoked by the subscriber once received by
the Fund.


         Shares sold pursuant to this Prospectus will be held by the Fund's
transfer agent in noncertificated form in the purchaser's name, unless the
purchaser elects otherwise in the Subscription Agreement. If a purchaser elects
to receive a certificate for its common shares in the Subscription Agreement,
the Fund will not issue fractional shares to the purchaser and will refund the
portion of the sales price representing the fractional share, without interest,
at the time of delivering the share certificate. Fractional shares will be
issued for shares held by the transfer agent in noncertificated form. Such
fractional shares will be aggregated with any other fractional shares held by
the transfer agent for the purchaser from time to time and will be paid for by
check, at the then-prevailing market price, if the purchaser requests a
certificate for its shares after the acceptance of the purchaser's subscription
in this offering.


                                  UNDERWRITING

         The Fund and Investment Adviser have entered into an Underwriting
Agreement with BDFSC, a form of which has been filed as an exhibit to the
Registration Statement of which this prospectus is a part. The summary of the
Underwriting Agreement contained herein is qualified by reference to the
Underwriting Agreement.

         Subject to the terms and conditions of the Underwriting Agreement,
BDFSC will offer on a "best efforts" basis up to 5,000,000 shares of the Fund's
common stock. BDFSC may also offer the shares through certain selected dealers.
BDFSC is located at 8800 N.W. 62nd Avenue, Johnston, Iowa 50131. The offering
will continue until all the shares are sold or until either the Fund or BDFSC
terminate the offering on 30 days' notice to the other party.


         Sales of shares will generally be made on a weekly basis. Subscribers
will submit Subscription Agreements and subscription payments as described under
"How to Invest." Subscriptions may not be revoked by the subscriber once
received by the Fund. The Fund's net asset value is determined as of the close
of business each Thursday or, if a Thursday is not a business day, on the
business day immediately preceding that Thursday (a "Determination Date"). On
the first business day following each Determination Date, the Fund will sell
shares at a price equal to the net asset value per share on the Determination
Date, plus the applicable sales charge, to each subscriber whose subscription
has been accepted by the Fund and approved by BDFSC on or before the
Determination Date and whose subscription payment is held by the Escrow Agent in
collected funds on or before the Determination Date. The sales price may be
determined by the following formula: net asset value divided by (1 minus the
applicable sales charge), rounded to the nearest penny.


         Funds in the escrow account will be held uninvested. Standard Federal
Bank N.A. of Detroit, Michigan will act as the Escrow Agent.


         The minimum investment (inclusive of sales charges) in this offering by
any investor is $500. The Fund reserves the right to increase the amount of this
minimum for certain purchases. There is no minimum number of shares that must be
sold in the offering.

         There will be a sales charge payable by investors to BDFSC out of their
subscription payments for any shares sold pursuant to this prospectus, as
follows:

         -        3.5% of the gross sales price per share sold before a selected
                  broker-dealer enters into a selected dealer agreement with
                  BDFSC; and

         -        5% of the gross sales price per share sold after any selected
                  broker-dealer enters into a selected dealer agreement with
                  BDFSC.

         The Fund has paid BDFSC a non-accountable expense allowance of $15,000.


         In connection with the sale of shares on behalf of the Fund, BDFSC may
be deemed to be an underwriter within the meaning of the Securities Act of 1933,
as amended, and the compensation of BDFSC may be deemed to be underwriting
commissions or discounts. BDFSC has from time to time acted, and may continue to
act while principal distributor, as broker in connection with the execution of
the Fund's portfolio transactions. See "Portfolio Transactions and Brokerage"
in the Statement of Additional Information.

         The Investment Adviser will provide administrative services to the Fund
in connection with the offering of the shares, including processing subscription
agreements. No subscription will be effective unless and until it is accepted by
the Fund and approved by BDFSC.




                                       15
<PAGE>


         The Fund and the Investment Adviser have jointly and severally agreed
to indemnify BDFSC against certain liabilities, including liabilities under the
Securities Act of 1933, as amended, or to contribute to payments that BDFSC may
be required to make in respect thereof. However, the Underwriting Agreement
provides that the Fund will not indemnify BDFSC to the extent that any loss,
claim, liability, expense or damage is found in a final judgment by a court of
competent jurisdiction to have resulted from the bad faith, willful misconduct
or negligence of BDFSCor any selected dealer which has entered into a selected
dealer agreement with BDFSC, or the breach by BDFSC or any such selected dealer
of its duties and obligations under the Underwriting Agreement.


                                  LEGAL MATTERS

         The legality of the shares offered hereby has been passed on by Bodman,
Longley & Dahling LLP, Detroit, Michigan, which serves as counsel to the Fund
and to the Investment Adviser. Lewis A. Rockwell is counsel to the law firm of
Bodman, Longley & Dahling LLP. Mr. Rockwell is also an officer and director of
the Fund and an officer and director of the Investment Adviser.

         Certain legal matters have been passed on for BDFSC by Dorsey & Whitney
LLP, Des Moines, Iowa.

                             REPORTS TO SHAREHOLDERS

         The Fund issues to its shareholders reports that include annual audited
financial statements for each year ended December 31 and unaudited financial
statements for each six month period ended June 30. The financial statements
include a list of investments held.

                         INDEPENDENT PUBLIC ACCOUNTANTS

         The audited financial statements included in and incorporated by
reference into the Statement of Additional Information have been audited by
Arthur Andersen LLP, independent public accountants, as indicated in their
report with respect thereto. Plante & Moran, LLP replaced Arthur Andersen LLP as
the Fund's independent certified public accountants effective May 9, 2002. The
address of Plante & Moran, LLP is 27400 Northwestern Highway, Southfield,
Michigan 48034.

                              FINANCIAL STATEMENTS

         The Fund's audited financial statements for the fiscal year ended
December 31, 2001 are incorporated into the Statement of Additional Information
by reference from the Fund's Annual Reports to Shareholders for the year ended
December 31, 2001 and the Fund's unaudited financial statements for the period
ended June 30, 2002 are incorporated by reference into the Statement of
Additional Information from the Fund's Semi-Annual Report to Shareholders for
the period ended June 30, 2002. The Fund will furnish without charge copies of
its annual report and semi-annual report and any subsequent annual and
semi-annual reports to prospective investors and shareholders upon request to
the Fund, 711 West Thirteen Mile Road, Madison Heights, Michigan 48071,
telephone (877) 275-6242, extension 331. These reports are also available on the
Securities and Exchange Commission's EDGAR database and may also be obtained
from the Securities and Exchange Commission. See "Further Information."


                 IMPORTANT NOTICE CONCERNING ARTHUR ANDERSEN LLP

         Section 11(a) of the Securities Act of 1933 provides that if any part
of a registration statement at the time it becomes effective contains an untrue
statement of a material fact or an omission to state a material fact required to
be stated therein or necessary to make the statements therein not misleading,
any person acquiring a security pursuant to such registration statement, unless
it is proved that at the time of such acquisition such person knew of such
untruth or omission, may sue, among others, every accountant who has consented
to be named as having prepared or certified any part of the registration
statement or as having prepared or certified any report or valuation which is
used in connection with the registration statement with respect to the statement
in such registration statement, report or valuation which purports to have been
prepared or certified by the accountant.

         The Fund's financial statements incorporated by reference in the
Statement of Additional Information were audited by the Fund's former
independent auditor, Arthur Andersen LLP. However, the Fund has not been able to
obtain, after reasonable efforts, the written consent of Arthur Andersen LLP
with respect to the inclusion of such financial statements in the Statement of
Additional Information. Under these circumstances, Rule 437a under the
Securities Act of 1933 permits the Fund to file this registration statement
without a consent of Arthur Andersen LLP. As a result, you will not be able to
sue Arthur Andersen LLP pursuant to Section 11(a) of the Securities Act and
therefore your right of recovery under that section may be limited as a result
of the lack of the written consent.


                       STATEMENT OF ADDITIONAL INFORMATION

         The Fund's Statement of Additional Information contains additional
information about the Fund which may be of interest to you. A copy of the
Statement of Additional Information is available without charge to any person to
whom this Prospectus is delivered, on





                                       16
<PAGE>

written or oral request to the Plan Administrator, NAIC Growth Fund, Inc., 711
West Thirteen Mile Road, Madison Heights, Michigan 48071, attention: Statement
of Additional Information, telephone (877) 275-6242, extension 331.

         The table of contents of the Statement of Additional Information is as
follows:

         The Fund.............................................................
         Additional Investment Guidelines.....................................
         Directors, Officers and Principal Shareholders.......................
         Investment Adviser and Investment Advisory Agreement.................
         Dividend Reinvestment and Cash Purchase Plan.........................
         Custodian, Transfer Agent and Dividend Disbursing Agent..............
         Independent Public Accountants.......................................
         Portfolio Transactions and Brokerage.................................
         Taxation.............................................................
         Financial Statements.................................................

                               FURTHER INFORMATION

         This Prospectus and the Statement of Additional Information do not
contain all of the information set forth in the Registration Statement the Fund
has filed with the Securities and Exchange Commission. The complete Registration
Statement is available on the EDGAR Database on the Securities and Exchange
Commission's Internet site at http://www.sec.gov, and may also be obtained from
the Securities and Exchange Commission upon payment of the fee prescribed by its
rules and regulations.







                                       17
<PAGE>


EXHIBIT 1
FORM OF SUBSCRIPTION AGREEMENT

















                                       18
<PAGE>
                  NAIC Growth Fund, Inc. Subscription Agreement

CHECKS PAYABLE TO: STANDARD FEDERAL BANK N.A., ESCROW AGENT

MAIL SUBSCRIPTION AGREEMENT AND CHECK TO:   NAIC Growth Fund, Inc.
                                            c/o Growth Fund Advisor, Inc.
                                            P.O. Box 220
                                            Royal Oak, MI 48068

Check enclosed for $_______________________ for full and (if applicable)
fractional shares at Net Asset Value and related sales charge ($500 minimum)

Register these shares exactly as printed below:
<TABLE>
<S><C>
Owner Name
          -------------------------------------------------------------        -----------------------------------------------------
                                                                               (Tax Identification or Social Security Number)
Co-Owner(s) (if any)
                    ---------------------------------------------------

Address
       -----------------------------------------------------------------------------------------------------------------------------

City                                                                   State                              Zip
    ----------------------------------------------------------              ---------------------            -----------------------

Telephone                                                         E-mail
         -----------------------------------------------------          --------------------------------------------

Citizen of the USA:           Yes              No                If no, which country
                                 -----           -------                             -----------------------------------------------

Presently shareholder in Fund:           Yes               No
                                            ------           -------
</TABLE>

In case of two or more co-owners, the shares will be registered "Joint Tenants
with Right of Survivorship" (and not as Tenants in Common) unless otherwise
specified. To register shares other than as joint tenants, contact your broker.

For owners other than individuals, the above owner is:

         Corporate                  HR10 or Keogh             Investment Club
- ---------                  ---------                 ---------

         IRA or SEP                 SIMPLE                    Trust
- ---------                  ---------                 ---------

         401(k)                     Other (specify)
- ---------                  ---------               -----------------------------

See the end of this form for additional required information and signatures
applicable to owners other than individuals.

I wish to reinvest dividends and capital gains distributions by participating in
the Dividend Reinvestment and Cash Purchase Plan.
Yes                 No
   -------            -------
(If you do not check either line, dividends and capital gains distributions will
be paid in cash.)

I wish to: Hold shares in noncertificated form at Transfer Agent _________
Receive stock certificate ____________ (Fractional shares will not be issued in
certificated form.) (If you do not check either of the above, shares will be
held in noncertificated form at Transfer Agent.)

I am of legal age in my state of residence, which is __________________________.

I am not myself, nor am I related to, an officer, director, or employee of
Broker Dealer Financial Services Corp., a Selected Dealer, NAIC Growth Fund,
Inc., or the Growth Fund Advisor, Inc., except as stated below:

Name of Officer, Director, or Employee
                                      ------------------------------------------

Relationship                              Position
            -----------------------               ------------------------------


<PAGE>

I authorize any instructions contained herein and certify, under penalties of
perjury:

         (1)      that the Tax Identification or Social Security Number shown
                  above is correct; and

         (2)      (check which of the following is a true statement)

                  ___________I am not subject to backup withholding because (a)
                  I am exempt from backup withholding, or (b) I have not been
                  notified by the Internal Revenue Service (IRS) that I am
                  subject to withholding as a result of a failure to report all
                  interest or dividends, or (c) the IRS has notified me that I
                  am no longer subject to withholding.

                  ___________I am subject to backup withholding because the IRS
                  has notified me.

         (3)      I am a U.S. person (including a U.S. resident alien).

I further certify that I have read and understand the Prospectus and related
Statement of Additional Information and that the purchase of the shares pursuant
to this Agreement is appropriate for me in light of my financial situation,
investment objectives and other circumstances.


X                                          X
 ---------------------------------          ------------------------------------
       (Signature of Owner)                   (Signature of Co-Owner, if any)


FOR OWNERS OTHER THAN INDIVIDUALS OR JOINT TENANTS:

If the shareholder is an IRA, SEP, SIMPLE, Keogh, or 401(k), this agreement must
be signed be the Fiduciary (Trustee or Custodian).

If the shareholder is a corporate or other non-individual entity (including
Investment Clubs), enclose a copy of the Corporate Resolution or Partnership
Authorization for this account, and a list of beneficial owners certified by
authorized officer of partner.

If the shareholder is an HR10, Keogh, SIMPLE, 401(k), or other Trust, provide a
copy of the trust agreement.

<TABLE>
<S><C>
If you have any questions, please  call, write or e-mail:               Broker Dealer Financial Services Corporation
                                                                        8800 NW 62nd Avenue, PO Box 6240, Johnston, IA 50131
                                                                        515-286-2970 or 800-352-5634
                                                                        E-mail: GRF@BDFS.com

BDFSC Use Only  AE________ SC__________________                 Selected Dealer Use Only               Transfer Agent Use Only
Date Received_____________________________________
Date Mailed to Escrow Agent_________________________
Additional Documents Required______________________
Request Date ____________ Dated Received____________
</TABLE>

<PAGE>
THE INFORMATION IN THIS STATEMENT OF ADDITIONAL INFORMATION IS NOT COMPLETE AND
MAY BE CHANGED. WE MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION
STATEMENT FILED WITH THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS
STATEMENT OF ADDITIONAL INFORMATION IS NOT AN OFFER TO SELL THESE SECURITIES AND
IT IS NOT SOLICITING AN OFFER TO BUY THESE SECURITIES IN ANY STATE WHERE THE
OFFER OR SALE IS NOT PERMITTED.


SUBJECT TO COMPLETION, DATED JANUARY      , 2003


                  PART B - STATEMENT OF ADDITIONAL INFORMATION

                             NAIC GROWTH FUND, INC.
                           711 West Thirteen Mile Road
                         Madison Heights, Michigan 48071

STATEMENT OF ADDITIONAL INFORMATION


         This Statement of Additional Information ("Statement") is not a
prospectus. It relates to a prospectus of NAIC Growth Fund, Inc. (the "Fund")
dated________ _, 2003 (the "Prospectus"), and should be read together with the
Prospectus. This Statement does not include all information that a prospective
investor should consider before purchasing shares of the Fund, and investors
should obtain and read the Prospectus prior to purchasing shares. This Statement
incorporates by reference the entire Prospectus. A copy of the Prospectus, and
any document incorporated by reference in this Statement, is available without
charge to any prospective investor or shareholder of the Fund upon written or
oral request to, NAIC Growth Fund, Inc., 711 West Thirteen Mile Road, Madison
Heights, Michigan 48071, attention: Statement of Additional Information,
telephone (877) 275-6242, extension 331.


                                TABLE OF CONTENTS
<TABLE>
<CAPTION>
                                                                                                                       Page
                                                                                                                       ----
<S>                                                                                                                    <C>
The Fund.............................................................................................

Additional Investment Guidelines.....................................................................

Directors, Officers and Principal Shareholders.......................................................

Investment Adviser and Investment Advisory Agreement.................................................

Dividend Reinvestment and Cash Purchase Plan.........................................................

Custodian, Transfer Agent and Dividend Disbursing Agent..............................................

Independent Public Accountants.......................................................................

Portfolio Transactions and Brokerage.................................................................

Taxation.............................................................................................

Financial Statements.................................................................................
</TABLE>

         The Prospectus and this Statement omit certain of the information
contained in the registration statement filed with the Securities Exchange
Commission (the "Commission"), Washington, D.C. The registration statement may
be obtained from the Commission upon payment of the fee prescribed, or inspected
at the Commission's office at no charge. The registration statement is also
available on the Commission's website (www.sec.gov).




                          This Statement of Additional
                      Information is dated _______ _, 2003




<PAGE>



                                    THE FUND


         NAIC Growth Fund, Inc. (the "Fund") is a diversified closed-end
management investment company. The Fund's investment objective is long-term
growth utilizing the concept of "total return" for selecting investments. "Total
return" for purposes of this Statement of Additional Information ("Statement")
is the total of all income derived from, and the capital appreciation in value
of, a particular investment. The Fund tries to achieve total return by investing
in those equity securities with growth potential and that also may be expected
to increase cash dividends on a regular basis. While the Fund does not attempt
to purchase equity securities that have a high yield, relative to the popular
stock averages, a record of increased cash dividends is one of the factors taken
into consideration when selecting equity securities for the Fund's portfolio.
The Fund seeks to achieve its investment objective through investment in a
diversified portfolio of equity securities. These securities may include those
that possess "special situation" characteristics. The Fund's Investment Adviser
is Growth Fund Advisor, Inc. (the "Investment Adviser"), an indirect subsidiary
of the National Association of Investment Clubs Trust.


                        ADDITIONAL INVESTMENT GUIDELINES

         The investment objective, policies and restrictions of the Fund are
described in the Prospectus under "Investment Objective and Policies." In
addition, the Fund operates under the following additional guidelines. These
guidelines constitute fundamental policies that cannot be changed without the
affirmative vote of the holders of a majority of the Fund's outstanding common
stock. All percentage limitations set forth below apply immediately after a
purchase or initial investment. Any subsequent change in any applicable
percentage resulting from market fluctuations does not require elimination of
any security from the portfolio.

The Fund may not:

         -        Issue senior securities, as defined in the Investment Company
                  Act of 1940 (the "1940 Act"), or mortgage, pledge, hypothecate
                  or in any manner transfer, as security for indebtedness, any
                  securities owned or held by the Fund except as may be
                  necessary in connection with the borrowings mentioned in
                  bullet three below. Any such mortgaging, pledging or
                  hypothecating may not exceed 10% of the Fund's total assets,
                  taken at the lesser of cost or market value.

         -        Purchase any securities on margin or make short sales of
                  securities, except as follows. The Fund may (i) obtain such
                  short-term credit as may be necessary for the clearance of
                  purchases and sales of portfolio securities, and (ii) make
                  short sales of securities so long as at all times during which
                  a short position is open, the Fund owns an equal amount of
                  such securities or, by virtue of ownership of securities, has
                  the right without payment of further consideration to obtain
                  an equal amount of the securities sold short (i.e.,
                  immediately convertible securities). No more than 15% of the
                  Fund's total assets taken at current value will be held to
                  cover such short sales at any one time.


         -        Borrow money, except that the Fund may borrow from banks and
                  others on an unsecured basis as a temporary measure to finance
                  the repurchase of its shares, or for other extraordinary or
                  emergency purposes. For further information, see the
                  Prospectus under the caption "Description of Shares -
                  Repurchase of Shares." While there is no limit on the amount
                  which the Fund may borrow, the Fund has never borrowed any
                  money.


         -        Underwrite securities of other issuers, except insofar as the
                  Fund may be deemed an underwriter under the Securities Act of
                  1933, as amended, in selling portfolio securities.

         -        With respect to 50% of its net assets, invest in securities of
                  any one issuer if immediately thereafter, as a result of such
                  investment, more than 5% of the total assets of the Fund would
                  be invested in the securities of such issuer. This restriction
                  does not apply to investments in United States government
                  securities.

         -        Purchase more than 10% of the outstanding voting securities of
                  any one issuer.

         -        Invest more than 25% of its net assets, taken at market value
                  at the time of each investment, in the securities of issuers
                  of any particular industry. This restriction does not apply to
                  investments in United States government securities.

         -        Invest in oil, gas or mineral leases.

         -        Invest in real estate or real estate limited partnerships.

         -        Invest in general and limited partnership interests.



                                       1

<PAGE>

         -        Invest in options.


         -        Invest more than fifteen percent 15% of net assets in illiquid
                  assets, including but not limited to, commodities or commodity
                  contracts, futures contracts, puts, calls, straddles, spreads,
                  foreign securities, and included within this 15% limitation no
                  more than 10% of net assets in companies with less than three
                  years of operating history, nor more than 5% of net assets in
                  restricted securities.


         -        Invest more than 5% of net assets in warrants valued at the
                  lower of cost or market of which at least 3% must be listed on
                  the NYSE or AMEX.

         -        Make loans of money or securities.

         -        Purchase securities of other investment companies, except in
                  connection with a merger, consolidation, acquisition, or
                  reorganization or during Temporary Periods, if more than 10%
                  of the market value of the Fund's total assets would be
                  invested in securities of other investment companies, more
                  than 5% of the market value of the Fund's total assets would
                  be invested in the securities of any one investment company,
                  or the Fund would own more than three percent 3% of any other
                  investment company's securities. See the information in the
                  Prospectus under the caption "Investment Objective and
                  Policies."

         -        Engage in short-term trading resulting in portfolio turnover
                  greater than 50% annually.

         -        Effect brokerage transactions in its portfolio securities with
                  any broker-dealer affiliated directly or indirectly with its
                  investment adviser, unless such transactions (including the
                  frequency thereof, the receipt of commissions payable in
                  connection therewith and the selection of the affiliated
                  broker-dealer affecting such transaction) are not unfair or
                  inequitable to the shareholders of the Fund. See "Portfolio
                  Transactions and Brokerage."

                 DIRECTORS, OFFICERS AND PRINCIPAL SHAREHOLDERS

         The business of the Fund is managed under the direction of its Board of
Directors. The directors and officers of the Fund, their principal occupations
for at least the last five years and other pertinent information are set forth
below. The address of each is the address of the Fund.

DIRECTORS WHO ARE INTERESTED PERSONS OF THE FUND AND OFFICERS


<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
    NAME,        Position(s)         Term of          Principal Occupation(s) During          Number of            Other
   ADDRESS        Held with        Office and                  Past 5 Years                 Portfolios in      Directorships
     AND            Fund            Length of                                               Fund Complex          Held by
    AGE*                           Time Served                                               Overseen by          Director
                                                                                             Director**           (PUBLIC
                                                                                                                 COMPANIES)
- ------------------------------------------------------------------------------------------------------------------------------------
<S>           <C>               <C>                <C>                                      <C>               <C>
Thomas        Chairman of       Term of office     Chairman Emeritus of the Board           One                 None.
E.            the Board and     one year.          and Trustee of the National
O'Hara        Director          Served as a        Association of Investors
Age 86                          director since     Corporation, a nonprofit
                                1989.              corporation engaged in investment
                                                   education ("NAIC") and Chairman
                                                   Emeritus and Director of Growth
                                                   Fund Advisor, Inc., the Fund's
                                                   investment adviser (the
                                                   "Investment Adviser"), from
                                                   February, 2002 to present.
                                                   Chairman and Trustee of NAIC
                                                   and Chairman and Director of the
                                                   Investment Adviser to February,
                                                   2002.

- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>


                                        2

<PAGE>


<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
    NAME,        Position(s)         Term of          Principal Occupation(s) During          Number of            Other
   ADDRESS        Held with        Office and                  Past 5 Years                 Portfolios in      Directorships
     AND            Fund            Length of                                               Fund Complex          Held by
    AGE*                           Time Served                                               Overseen by          Director
                                                                                             Director**           (PUBLIC
                                                                                                                 COMPANIES)
- ------------------------------------------------------------------------------------------------------------------------------------
<S>           <C>               <C>                <C>                                      <C>               <C>
Kenneth       Director,         Term of office     Chairman and Trustee of NAIC             One                 Director, AFLAC
S. Janke      President and     one year.          and Chairman, Chief Executive
Age 67        Treasurer         Served as a        Officer and Director of the
                                director since     Investment Adviser from July,
                                1989.              2002. Chairman, Chief Executive
                                                   Officer and Trustee of NAIC and
                                                   Chairman, Chief Executive
                                                   Officer and director of the
                                                   Investment Adviser from February,
                                                   2002 to July 2002. President and
                                                   Trustee of NAIC and President and
                                                   Director of the Investment adviser
                                                   to February, 2002.
- ------------------------------------------------------------------------------------------------------------------------------------
Lewis A.      Director and      Term of office     Counsel to the law firm of               One                 None
Rockwell      Secretary         one year.          Bodman, Longley & Dahling LLP,
Age 83                          Served as a        counsel to the Fund, NAIC and the
                                director since     Investment Adviser; Trustee and
                                1989.              Secretary of NAIC; Director and
                                                   Secretary of the Investment
                                                   Adviser.
- ------------------------------------------------------------------------------------------------------------------------------------
Peggy L.      Director          Term of office     Adult Education Teacher; Trustee         One                 None.
Schmeltz                        one year.          of NAIC; Director of Bowling
Age 74                          Served as a        Green State University Foundation
                                director since     Board; former member of NYSE
                                1989.              Advisory Committee.
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>


         *The address of each is the address of the Fund. Messrs. O'Hara, Janke
and Rockwell and Mrs. Schmeltz are interested persons of the Fund within the
meaning of Section 2(a)(19) of the Investment Company Act of 1940. Mr. O'Hara is
an interested person because he is a trustee of NAIC and a director of the
Investment Adviser. Messrs. Janke and Rockwell are interested persons because
they are trustees and officers of NAIC and directors and officers of the
Investment Adviser, as noted above. Mrs. Schmeltz is an interested person
because she is a trustee of NAIC.

         **The Fund is not part of any fund complex.



                                       3
<PAGE>



DIRECTORS WHO ARE NOT INTERESTED PERSONS OF THE FUND


<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
    NAME,        Position(s)         Term of          Principal Occupation(s) During         Number of             Other
   ADDRESS        Held with        Office and                  Past 5 Years                Portfolios in       Directorships
   AND AGE*          Fund           Length of                                                   Fund              Held by
                                   Time Served                                                Complex            Director
                                                                                            Overseen by           (Public
                                                                                             Director**         Companies)
- ------------------------------------------------------------------------------------------------------------------------------------
<S>            <C>              <C>                <C>                                     <C>              <C>
Carl A.        Director         Term of office     President and Director, Greater          One             None.
Holth                           one year.          Detroit Capital Corporation;
Age 69                          Served as a        Financial Consultant and President
                                director since     of Carl A. Holth & Associates, Inc.
                                1989.              (a private financial consulting and
                                                   business appraisal firm); Director,
                                                   Sunshine Fifty, Inc., and Harrison
                                                   Piping Supply, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
Benedict       Director         Term of office     Retired; Director and Treasurer,         One             None.
J. Smith                        one year.          Detroit Executive Service Corps;
Age 81                          Served as a        Director, Vista Maria (a nonprofit
                                director since     charitable organization); Trustee,
                                1989.              Henry Ford Health System,
                                                   Behavioral Services.
- -----------------------------------------------------------------------------------------------------------------------------------
James M.       Director         Term of office     Retired; Director, Wheaton               One             Chateau
Lane                            one year.          College, William Tyndale College,                        Communities,
Age 73                          Served as a        Baseball Chapel, Inc. and Christian                      Inc. (owner and
                                director since     Camps, Inc.                                              operator of
                                1996.                                                                       manufactured
                                                                                                            home
                                                                                                            communities)
- ------------------------------------------------------------------------------------------------------------------------------------
Luke E.        Director         Term of office     Partner in the law firm of Foley &       One             LaCrosse
Sims                            of one year.       Lardner. Director, Wilson-Hurd                           Footwear, Inc.
Age 52                          Served as a        Mfg. Co. and Notre Dame Middle                           (manufacturer
                                director since     School, Inc.                                             and marketer of
                                2002.                                                                       sporting and
                                                                                                            industrial
                                                                                                            footwear)
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>


         *The address of each is the address of the Fund.

         **The Fund is not part of any fund complex.

         No person is known by the Fund to own of record or beneficially 5% or
more of its outstanding shares of common stock.

         The Fund has no standing nominating or compensation committees of the
Board of Directors, or committees performing similar functions. The Fund has a
Management Proxy Committee comprised of Messrs. O'Hara and Janke to cast votes
represented by properly executed proxies. The Management Proxy Committee met one
time during the Fund's fiscal year ended December 31, 2001. The Fund also has an
Audit Committee comprised of Messrs. O'Hara, Holth and Smith. The Audit
Committee reviews the services provided by the Fund's independent accountants
and consults with the accountants. The Audit Committee met 1 time during the
Fund's fiscal year ended December 31, 2001.

         The following tables set forth the dollar range of the Fund's common
stock, par value $0.001 per share, which is the Fund's only equity security,
owned by each director, valued at the market price per share of $10.75 as of
December 31, 2001.

                                       4
<PAGE>



DIRECTORS WHO ARE INTERESTED PERSONS OF THE FUND

<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
             NAME OF DIRECTOR                 DOLLAR RANGE OF EQUITY SECURITIES IN         AGGREGATE DOLLAR RANGE OF EQUITY
                                                            THE FUND                      SECURITIES IN ALL FUNDS OVERSEEN OR
                                                                                             TO BE OVERSEEN BY DIRECTOR OR
                                                                                            NOMINEE IN FAMILY OF INVESTMENT
                                                                                                      COMPANIES*
- ------------------------------------------------------------------------------------------------------------------------------------
<S>                                                  <C>                                   <C>
Thomas E. O'Hara                                     $50,001 - $100,000                           $50,001 - $100,000
- ------------------------------------------------------------------------------------------------------------------------------------
Kenneth S. Janke                                     Over $100,000                                Over $100,000
- ------------------------------------------------------------------------------------------------------------------------------------
Lewis A. Rockwell                                    Over $100,000                                Over $100,000
- ------------------------------------------------------------------------------------------------------------------------------------
Peggy L. Schmeltz                                    Over $100,000                                Over $100,000
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>


         *The Fund is not part of a family of investment companies.

DIRECTORS WHO ARE NOT INTERESTED PERSONS OF THE FUND

<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
    NAME OF DIRECTOR                 DOLLAR RANGE OF EQUITY SECURITIES IN         AGGREGATE DOLLAR RANGE OF EQUITY
                                                   THE FUND                      SECURITIES IN ALL FUNDS OVERSEEN OR
                                                                                    TO BE OVERSEEN BY DIRECTOR OR
                                                                                   NOMINEE IN FAMILY OF INVESTMENT
                                                                                             COMPANIES*
- ------------------------------------------------------------------------------------------------------------------------------------
<S>                                  <C>                                         <C>
Carl A. Holth                               $10,001 - $50,000                          $10,001 - $50,000
- ------------------------------------------------------------------------------------------------------------------------------------
Benedict J. Smith                           $10,001 - $50,000                          $10,001 - $50,000
- ------------------------------------------------------------------------------------------------------------------------------------
James M. Lane                               $10,001 - $50,000                          $10,001 - $50,000
- ------------------------------------------------------------------------------------------------------------------------------------
Luke E. Sims                                Over $100,000                              Over $100,000
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>


         *The Fund is not part of a family of investment companies.

         No director, nor any of their immediate family members, owns any
securities beneficially or of record in the Fund's Investment Adviser or any of
its affiliates, or in the Fund's principal underwriter or any of its affiliates.

         The following tables set forth the aggregate compensation paid to all
directors in 2001. Directors who are affiliated with the Investment Adviser or
the Investment Adviser's affiliates do not receive any compensation for service
as a director. The Chairman and President are not compensated by the Fund,
except for reimbursement for out-of-pocket expenses relating to attendance at
meetings and other operations of the Fund. No other officer of the Fund received
compensation from the Fund in 2001 in excess of $60,000.

                                        5
<PAGE>



DIRECTORS WHO ARE INTERESTED PERSONS OF THE FUND

<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------------
    NAME OF PERSON,              Aggregate                Pension or            Estimated Annual        Total Compensation
        POSITION             Compensation from       Retirement Benefits         Benefits Upon            From Fund and
                                   Fund*              Accrued as Part of           Retirement           Fund Complex Paid
                                                        Fund Expenses                                     to Directors**
- ---------------------------------------------------------------------------------------------------------------------------------
<S>                          <C>                      <C>                       <C>                     <C>
Thomas E. O'Hara,                   None                     None                     None                     None
Chairman and
Director
- ---------------------------------------------------------------------------------------------------------------------------------
Kenneth S. Janke,                   None                     None                     None                     None
President, Treasurer
and Director
- ---------------------------------------------------------------------------------------------------------------------------------
Lewis A. Rockwell,                  None                     None                     None                     None
Secretary and
Director
- ---------------------------------------------------------------------------------------------------------------------------------
Peggy L. Schmeltz,                  $ 1900                   None                     None                     $ 1900
Director
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>

         *All amounts shown are for service as a director.

         **The Fund is not part of any fund complex.

DIRECTORS WHO ARE NOT INTERESTED PERSONS OF THE FUND

<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------------
    NAME OF PERSON,              Aggregate                Pension or            Estimated Annual     Total Compensation
        POSITION             Compensation from       Retirement Benefits         Benefits Upon       From Fund and
                                   Fund*              Accrued as Part of           Retirement        Fund Complex Paid
                                                        Fund Expenses                                to Directors**
- ---------------------------------------------------------------------------------------------------------------------------------
<S>                          <C>                     <C>                        <C>                  <C>
Cynthia P. Charles,            $ 1900                   None                     None                     $ 1900
Director ***
- ---------------------------------------------------------------------------------------------------------------------------------
Carl A. Holth,                 $ 1900                   None                     None                     $ 1900
Director
- ---------------------------------------------------------------------------------------------------------------------------------
James M. Lane,                 $ 1900                   None                     None                     $ 1900
Director
- ---------------------------------------------------------------------------------------------------------------------------------
Benedict M. Smith,             $ 1900                   None                     None                     $ 1900
Director
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>

         *All amounts shown are for service as a director.

         **The Fund is not part of any fund complex.

         ***Mrs. Charles resigned as a director on April 18, 2002.


              INVESTMENT ADVISER AND INVESTMENT ADVISORY AGREEMENT

         The Fund's Investment Adviser is Growth Fund Advisor, Inc., a Michigan
corporation (the "Investment Adviser"). The Investment Adviser is a wholly owned
subsidiary of N.A.I.C. Holding Corporation, a Michigan corporation which
conducts no business activities. The National Association of Investors
Corporation, a Michigan nonprofit corporation ("NAIC") and N.A.I.C. Holding
Corporation are each wholly owned subsidiaries of the National Association of
Investment Clubs Trust (the "Trust"). Mr. O'Hara is the Chairman Emeritus and a
Trustee of the Trust; Mr. Janke is the Chairman and a Trustee of the Trust;

                                       6

<PAGE>

and Mr. Rockwell is the Secretary and a Trustee of the Trust. The Fund is the
Investment Adviser's sole advisory client. The Trust was formed in 1951 by three
investment clubs with the objective of educating investors and promoting the
formation of investment clubs. NAIC was organized by the Trust in 1975 to
further this objective. Both NAIC and the Trust throughout their respective
histories have been integrally involved in educating investors and assisting and
encouraging the formation and operation of investment clubs. The Investment
Adviser was organized in March 1999 to take over the investment advisory
activities of NAIC, as part of a restructuring of NAIC and its various
affiliates. For further information concerning the Investment Adviser, see the
information in the Prospectus under the caption "The Investment Adviser."

Affiliated Persons

         The following persons are "affiliated persons" of the Fund who are also
"affiliated persons" with respect to the Investment Adviser, as defined by the
1940 Act:


<TABLE>
<CAPTION>
          --------------------------------------------------------------------------------------------------------
                Individual                                         Position with Investment Adviser
          --------------------------------------------------------------------------------------------------------
<S>                                                             <C>
          Thomas E. O'Hara (1)                                  Chairman Emeritus of the Board and Director
          Kenneth S. Janke (2)                                  Chairman, Chief Executive Officer and Director
          Lewis A. Rockwell (3)                                 Secretary, Director
          --------------------------------------------------------------------------------------------------------
</TABLE>

(1) Mr. O'Hara is also the Chairman of the Board of Directors of the Fund.
(2) Mr. Janke is primarily responsible for the investment decisions made on
behalf of the Fund by the Investment Adviser. Mr. Janke is also the President
and a Director of the Fund.
(3) Mr. Lewis A. Rockwell is counsel to the law firm of Bodman, Longley &
Dahling LLP, which acts as counsel for the Investment Adviser as well as the
Fund. Mr. Rockwell is also the Secretary and a Director of the Fund.

Advisory Agreement

         The Advisory Agreement between the Investment Adviser, as successor to
NAIC, and the Fund dated October 2, 1989 (the "Advisory Agreement") provides
that, subject to the direction of the board of directors of the Fund, the
Investment Adviser is responsible for the actual management of the Fund's
portfolio. The responsibility for making decisions to buy, sell or hold a
particular security rests with the Investment Adviser, subject to review by the
board of directors of the Fund.

         The Investment Adviser is not dependent on any other party in providing
the investment advisory services required in the management of the Fund. The
Investment Adviser may, however, consider analyses from other various sources,
including broker-dealers with which the Fund does business. The Investment
Adviser is also obligated to perform certain administrative and management
services for the Fund and is obligated to provide all of the office space,
facilities, equipment and personnel necessary to perform its duties under the
Advisory Agreement.

Code of Ethics

         The Fund and the Investment Adviser have adopted a Code of Ethics under
Rule 17j-1 of the Investment Company Act of 1940. This Code of Ethics permits
personnel subject to its provisions to invest in securities, including
securities that may be purchased or held by the Fund. The Code of Ethics may be
reviewed and copied at the Commission's Public Reference Room in Washington,
D.C. Information on the operation of the Public Reference Room may be obtained
by calling the Commission at 1-202-942-8090. The Code of Ethics is also
available on the EDGAR Database on the Commission's internet site at
http://www.sec.gov. Copies of the Code of Ethics may be obtained, after paying a
duplicating fee, by electronic request at: publicinfo@sec.gov or by writing the
Commission's Public Reference Section, Washington, D.C. 20549-0102.

Advisory Fee


         For the services provided by the Investment Adviser under the Advisory
Agreement, the Fund will pay to the Investment Adviser a monthly advisory fee at
an annual rate of three-quarters of one percent (0.75%) of the weekly net assets
of the Fund. However, if the weekly net assets of the Fund are below $3,800,000,
then no advisory fee is paid or accrued by the Fund to the Investment Adviser
for that month. The Investment Adviser's predecessor, NAIC, waived the advisory
fee from the Fund's inception through 1997. The Investment Adviser or its
predecessor, as applicable, collected 25% of the fee ($35,883) in 1998, 50% of
the fee ($80,336) in 1999, and 75% of the fee ($139,978) in 2000. The Investment
Adviser collected all of the fee in 2001($182,924) and has advised the Fund it
intends to collect all of the fee thereafter.



                                       7

<PAGE>



Payment of Expenses

         In addition to the advisory fee, the Fund pays all of the other costs
and expenses of its operation. These include, among other things, expenses for
legal and auditing services, costs of printing proxies, stock certificates and
shareholder reports, charges of the custodian and transfer agent, Commission
filing fees, fees and expenses of unaffiliated directors, accounting and pricing
costs, membership fees and trade association dues, insurance, interest,
brokerage costs, taxes, stock exchange listing fees and expenses, expenses of
qualifying the Fund's shares for sale in various states, and other miscellaneous
expenses properly payable by the Fund. The Advisory Agreement provides that the
Fund may not incur annual aggregate expenses in excess of 2% of the first
$10,000,000 of the Fund's net assets, 1.5% of the next $20,000,000 of the net
assets, and 1% of the remaining net assets of the Fund for any fiscal year. Any
excess expenses are the responsibility of the Investment Adviser, and the pro
rata portion of the estimated annual excess expenses is offset against the
Investment Adviser's monthly advisory fee. In the event such amount exceeds the
advisory fee payable in any month, no fees are collected by the Investment
Adviser at such time.


         The Fund will pay all expenses of this offering, other than sales
charges which are payable by the investors, directly from the general assets of
the Fund. These costs will not be considered an expense of the Fund for purposes
of the expense limitations of the Advisory Agreement.


Duration and Termination; Approval

         The Advisory Agreement became effective on July 2, 1990. It has been
approved by a vote of the majority of the Board of Directors of the Fund and by
the vote of a majority of the Directors who are not parties to the Advisory
Agreement or interested persons of any such party (as defined in the 1940 Act).
The Advisory Agreement will continue in effect only so long as such continuance
is specifically approved at least annually by the Board of Directors of the Fund
or by a vote of the majority of the outstanding voting securities of the Fund.
Under the 1940 Act, this is the vote (a) of 67% or more of the shares of the
Fund present at an annual or special meeting if the holders of more than 50% of
the outstanding shares are present or represented by proxy, or (b) of more than
50% of the outstanding shares, whichever is less. The Advisory Agreement is not
assignable. The Advisory Agreement may be terminated at any time without the
payment of any penalty by the Board of Directors of the Fund or by a vote of the
majority of the outstanding voting securities of the Fund. The Investment
Adviser may terminate the Advisory Agreement upon sixty days written notice to
the Fund.


         The continuance of the Advisory Agreement has been approved annually by
the Board of Directors of the Fund since its inception. It was last approved by
the Board of Directors of the Fund at its meeting on December 5, 2002. The Board
of Directors, in approving the continuance of the Advisory Agreement, took into
consideration that the Investment Adviser principally uses the NAIC's investment
principles and the methodology of the NAIC's stock study program in advising the
Fund, which is consistent with the Fund's investment objective. The Board of
Directors also regularly reviews the performance of the Fund in comparison to
other closed end growth funds and based upon this review, and taking into
account the amount of the advisory fee, has determined that it is in the best
interest of the Fund to continue the Advisory Agreement.


Use of Name

         The National Association of Investors Corporation ("NAIC"), the
predecessor to the Investment Adviser, has become well known through its
educational activities and publications. The Fund had no prior operating history
and therefore at the time of the initial public offering of the Fund's shares
was not well known. As a result, NAIC consented to allow the Fund to use NAIC as
part of the Fund's name. The Fund acknowledges that NAIC may withdraw from the
Fund the use of its name. However, if it does so, the Investment Adviser has
agreed to submit the question of continuing the Investment Advisory Agreement to
a vote of the Fund's shareholders at that time. Pursuant to the Advisory
Agreement NAIC may grant the use of its name in whole or in part to another
investment company or business enterprise. However, the Investment Adviser has
agreed to submit the question of continuing the Advisory Agreement to the vote
of the Fund's shareholders at that time.



                                       8

<PAGE>



                  DIVIDEND REINVESTMENT AND CASH PURCHASE PLAN

         The Fund's Dividend Reinvestment and Cash Purchase Plan (the "Plan")
allows participating shareholders to reinvest all dividends and capital gain
distributions in additional shares of the Fund. The Plan also allows
participants to make optional cash investments monthly through American Stock
Transfer & Trust Company, the Plan Agent, in amounts ranging from a minimum of
$50 to a maximum of $1,000. With the Fund's permission, participating
shareholders may also make optional cash investments in excess of the monthly
maximum. Shares purchased by Plan Participants in connection with the
reinvestment of dividends or optional cash investments may be issued by the Fund
if the Fund's shares are trading at a premium to net asset value. If the Fund's
shares are trading at a discount to net asset value, shares purchased under the
Plan will be purchased on the open market. Shares issued by the Fund under the
Plan will be issued at the greater of (i) net asset value or (ii) a discount of
5% to the market price. Shareholders in the Fund may elect to participate in the
Plan by notifying American Stock Transfer & Trust Company, P.O. Box 922, Wall
Street Station, New York, New York 10038. Additional information about the Plan
may be obtained from the Fund at (877) 275-6242, extension 331. For additional
information, See "Dividend Reinvestment and Cash Purchase Plan" in the
Prospectus.

             CUSTODIAN, TRANSFER AGENT AND DIVIDEND DISBURSING AGENT

         Standard Federal Bank N.A. ("SFB") acts as Custodian for the Fund. SFB
is a national banking association whose address is 2600 West Big Beaver Road,
Troy, Michigan 48084. American Stock Transfer & Trust Company acts as the
Transfer Agent and Dividend Disbursing Agent for the Fund. American Stock
Transfer & Trust Company's address is P.O. Box 922, Wall Street Station, New
York, New York 10038.

                         INDEPENDENT PUBLIC ACCOUNTANTS

         The annual financial statements included in and incorporated by
reference in the Prospectus and Statement have been audited by Arthur Andersen
LLP, independent public accountants, as indicated in their report with respect
thereto. Arthur Andersen LLP did not perform any other services for the Fund
during the year ending December 31, 2001. Plante & Moran, LLP replaced Arthur
Andersen LLP as the Fund's independent certified public accountants effective
May 9, 2002.

                      PORTFOLIO TRANSACTIONS AND BROKERAGE

         Subject to the policies established by the Board of Directors of the
Fund, the Investment Adviser is primarily responsible for the execution of the
Fund's portfolio transactions and the allocation of brokerage. In executing such
transactions, the Investment Adviser seeks to obtain the most favorable
execution and price taking into account such factors as price, size of order,
difficulty of execution and operation of facilities of the firm involved and the
firm's risk in positioning a block of securities.

         The Investment Adviser and the Fund have no obligations to deal with
any broker or group of brokers in executing transactions in portfolio
securities. The Investment Adviser is also authorized to consider, in selecting
brokers or dealers with which such orders may be placed, certain statistical,
research and other information or services furnished to the Investment Adviser
by brokers or dealers (the terms "statistical, research and other information or
services" include advice as to the value of securities and the responsibility of
investing in, purchasing, or selling securities; the availability of securities
or purchasers or sellers of securities; and the furnishing of analyses and
reports concerning issuers, industries, securities, economic factors and trends,
and portfolio strategy in the performance of accounts). The Investment Adviser
may pay a broker a commission in excess of that which another broker might
charge in recognition of the value of the statistical, research and other
information provided by such broker.

         The Investment Adviser also makes recommendations as to the manner in
which voting rights, rights to consent to corporate action, or other rights
pertaining to the Fund's portfolio securities will be exercised.

         A substantial portion of the securities in which the Fund invests may
be traded in the over-the-counter markets, and the Fund deals directly with the
dealers who make markets in the securities involved, except in those
circumstances where better prices and execution are available elsewhere. Under
the 1940 Act, persons affiliated with the Fund are prohibited from dealing with
the Fund as principal in the purchase and sale of securities. Since transactions
in the over-the-counter market usually involve transactions with dealers acting
as principal for their own account, the Fund does not deal with affiliated
persons in connection with such transactions. However, affiliated persons of the
Fund may serve as its broker in the over-the-counter market and other
transactions conducted on an agency basis.


                                       9

<PAGE>


         The Board of Directors of the Fund has adopted certain policies
incorporating the standards of Rule 17e-1 issued by the Commission under the
1940 Act, which require that the commissions paid to affiliates of the Fund, or
to affiliates of such persons, must be reasonable and fair compared to the
commissions, fees or other remuneration received or to be received by other
brokers in connection with comparable transactions involving similar securities
during a comparable period of time. The rule and procedures also contain review
requirements and require the Investment Adviser to furnish reports to the Board
of Directors of the Fund and to maintain records in connection with such
reviews. After consideration of all factors deemed relevant, the Board of
Directors of the Fund will consider from time to time whether the advisory fee
will be reduced by all or a portion of the brokerage commission given to brokers
that are affiliated with the Fund.

         The aggregate dollar amount of brokerage commissions paid by the Fund
during the fiscal years ending December 31, 1999, 2000, 2001 was $15,053,
$19,294 and $5,884, respectively. The lower amount of brokerage commissions paid
in 2001 was primarily due to a decrease in the Fund's portfolio turnover rate.
During the Fund's fiscal year ending December 31, 2001, 100% of the brokerage
commissions paid by the Fund were paid to Broker Dealer Financial Services Corp.
("BDFSC"), the Fund's principal underwriter, for 100% of the Fund's aggregate
dollar amount of transactions involving the payment of commissions effected
through such broker such year.

         The rate of total portfolio turnover of the Fund through its fiscal
year ending December 31, 2001 was 1.77%.

                                    TAXATION

Other Tax Consequences

         In addition to the federal income tax consequences described in the
Prospectus applicable to an investment in the Fund, the Fund may be subject to
state or local taxes in jurisdictions in which the Fund may be deemed to be
doing business. Also, there may be other federal, state, or local tax
considerations applicable to the circumstances of a particular investor.
Prospective shareholders are therefore urged to consult their tax advisers with
respect to the effects of this investment on their own tax situation.

                              FINANCIAL STATEMENTS

         The Fund's statement of assets and liabilities, including the portfolio
of investments, as of December 31, 2001, and the related statement of operations
for the year then ended, the statements of changes in net assets for each of the
two years in the period then ended, and the financial highlights for the last
five years, are hereby incorporated by reference to the Fund's Annual Report to
Shareholders for the year ended December 31, 2001.

         The Fund's statement of assets and liabilities, including the portfolio
of investments, as of June 30, 2002, and the related statement of operations for
the period then ended, the statements of changes in net assets for the period
then ended, and the financial highlights for the period then ended, are hereby
incorporated by reference to the Fund's Semi-Annual Report to Shareholders for
the period ended June 30, 2002.



                                       10
<PAGE>



                           PART C - OTHER INFORMATION

Item 24. Financial Statements and Exhibits.

         (1)      Financial Statements

                  Contained in Part A:

                  Financial Highlights for the years ended December 31, 2001,
                  2000, 1999, 1998, 1997, 1996, 1995, 1994, 1993, and 1992.

                  Contained in Part B:

                  Financial Statements are incorporated in Part B by reference
                  to the Registrant's December 31, 2001 Annual Report and
                  Semi-Annual Report for the period ended June 30, 2002.

         (2)      Exhibits

                  (a)      Articles of Incorporation, as amended (incorporated
                           by reference to Exhibit 1 to the Registrant's Form
                           N-2 Registration Statement, Securities Act
                           Registration No. 33-28506, Investment Company Act
                           File No. 811-5807, Amendment No. 1, dated July 14,
                           1990).

                  (b)      By-laws, as amended (incorporated by reference to
                           Exhibit 2(b) to the Registrant's Form N-2
                           Registration Statement, Securities Act Registration
                           No. 333-99689, Investment Company Act File No.
                           811-05807, dated September 17, 2002).

                  (c)      Not Applicable
                  (d)      Not Applicable
                  (e)      Dividend Reinvestment and Cash Purchase Plan
                           (incorporated by reference to Exhibit 1OA to the
                           Registrant's Form N-2 Registration Statement,
                           Securities Act Registration No. 33-38825, Investment
                           Company Act File No. 811-5807, Amendment No. 1, dated
                           March 29, 1991)
                  (f)      Not Applicable
                  (g)      Investment Advisory Agreement between the Fund and
                           the Investment Adviser (incorporated by reference to
                           Exhibit (g) to the Registrant's Form N-2 Registration
                           Statement, Securities Act Registration No. 33-38825,
                           Post-Effective Amendment No. 1, Investment Company
                           Act File No. 811-5807, Amendment No. 7, dated August
                           3, 1993)

                  (h)(i)   Amended Form of Underwriting Agreement by and among
                           the Fund, the Investment Adviser, NAIC and BDFSC.
                           (ii)     Form of Selected Dealer Agreement
                                    (incorporated by reference to Exhibit
                                    2(h)(ii) to the Registrant's Form N-2
                                    Registration Statement, Securities Act
                                    Registration No. 333-99689, Investment
                                    Company Act File No. 811-05807, dated
                                    September 17, 2002).

                  (i)      Not Applicable

                  (j)      Custodial Agreement between the Fund and Standard
                           Federal Bank, N.A., as successor to Michigan National
                           Bank (incorporated by reference to Exhibit 2(j) to
                           the Registrant's Form N-2 Registration Statement,
                           Securities Act Registration No. 333-99689, Investment
                           Company Act File No. 811- 05807, dated September 17,
                           2002).
                  (k)      Amended Form of Escrow Agreement.

                  (1)      Opinion of Bodman, Longley & Dahling LLP regarding
                           legality of the securities being offered and consent
                           ( to be filed by amendment).
                  (m)      Not Applicable

                  (n)      Consent of Arthur Andersen LLP (omitted in reliance
                           on Rule 437a under the Securities Act of 1933).

                  (o)      Not applicable
                  (p)      Not Applicable
                  (q)      Not Applicable

                  (r)      Code of Ethics of NAIC Growth Fund, Inc. and Growth
                           Fund Advisor, Inc. (incorporated by reference to
                           Exhibit 2(r) to the Registrant's Form N-2
                           Registration Statement, Securities Act Registration
                           No. 333-99689, Investment Company Act File No.
                           811-05807, dated September 17, 2002).



                                      C-1

<PAGE>

Item 25. Marketing Arrangements

         None.


Item 26. Other Expenses of Issuance and Distribution


         The following table sets forth the estimated expenses expected to be
incurred in connection with the offering described in this Registration
Statement. These estimates assume that the offering will continue for a period
of two years.

<TABLE>
<S>                                                            <C>
          Registration fees                                    $  4,591
          Trustees' and transfer agents' fees                  $      0
          Printing and engraving                               $ 50,000
          Fees and expenses of qualification under
          state securities laws (excluding fees
          of counsel)                                          $ 19,000
          Accounting fees and expenses                         $ 20,500
          Legal fees and expenses                              $ 50,000
          NASD filing fees                                     $  5,490
          Chicago Stock Exchange
          listing fee                                          $  7,500
          Miscellaneous                                        $ 10,000
                                                               --------

                            Total                              $167,081
                                                               ========
</TABLE>

Item 27. Persons Controlled by or Under Common Control

         Not applicable.

Item 28. Number of Holders of Securities


<TABLE>
<CAPTION>
         Title of Class                                       Number of Record Holders
         --------------                                       ------------------------
<S>                                                           <C>
         Common stock, $0.001 par value                                2,230
                                                              as of December 31, 2002
</TABLE>


Item 29. Indemnification.

         The Maryland General Corporation Law ("MGCL") of the State of Maryland
provides in general that a Maryland corporation, such as the Fund, may indemnify
any director made a party to any proceeding by reason of service as a director
unless it is established that the act or omission was material and was committed
in bad faith or was the result of active dishonesty; the director received an
improper personal benefit; or in the case of any criminal proceeding, the
director had reasonable cause to believe that the act or omission was unlawful.
Indemnification may be against judgments, penalties, fines, settlements, and
reasonable expenses actually incurred by the director in connection with the
proceeding. However, in the case of an action by or in the right of the
corporation, indemnification may not be made if the director has been adjudged
to be liable to the corporation. The MGCL also generally permits the advancement
of reasonable expenses, including payments authorized by a charter or bylaw
provision. In general, an officer of the corporation is entitled to
indemnification and advancement of expenses to the same extent as a director.

         Under Article XII of the Registrant's Articles of Incorporation and
Article XIII of the Registrant's Bylaws, any past or present director, officer,
employee or agent of the Registrant will be indemnified, and will be advanced
expenses to the fullest extent permitted by law, but not in violation of Section
17(h) of the Investment Company Act of 1940. Article VIII of the Investment
Advisory Agreement between the Registrant and the Investment Adviser provides
that the Investment Adviser shall not be liable for any error in judgment or
mistake of law or for any loss arising out of any investment or any act or
omission in the execution and management of the Registrant or its portfolio of
securities, except for willful misfeasance, bad faith or gross negligence in the
performance of its duties, or by reason of reckless disregard of its obligations
and duties hereunder.

         Insurance is maintained on a regular basis (and not specifically in
connection with this offering) against liabilities arising on the part of
directors and officers out of their performance in such capacities or arising on
the part of the Fund out of its foregoing indemnification provisions, subject to
certain exclusions and to the policy limits.


                                      C-2

<PAGE>

         The Fund and Investment Adviser have jointly and severally agreed to
indemnify Broker Dealer Financial Services Corp. against certain liabilities in
connection with the offering of shares in the Fund, including liabilities under
the Securities Act of 1933, as amended, or to contribute to payments that BDFSC
may be required to make in respect thereof.

         Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Commission, such indemnification is
against public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses incurred or
paid by a director, officer or controlling person of the Registrant in
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court or appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.

Item 30. Business and Other Connections of Investment Adviser

         Growth Fund Advisor, Inc. (the "Investment Adviser") was organized on
March 31, 1999 and has not been engaged in any business activities other than
acting as investment adviser to the Fund.

         The following is a list of each officer and director of the Investment
Adviser indicating each business, profession, vocation or employment of a
substantial nature in which each such person has been engaged since January 1,
1999, for his own account or in the capacity of a director, officer, employee,
partner or trustee.


<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
                NAME                              POSITION WITH                    OTHER SUBSTANTIAL BUSINESS, PROFESSION,
                                                 INVESTMENT ADVISER                          VOCATION OR EMPLOYMENT
- ------------------------------------------------------------------------------------------------------------------------------------
<S>                                   <C>                                        <C>
Thomas E. O'Hara                      Chairman Emeritus of the Board             Chairman Emeritus of the Board and Trustee
                                                                                 of NAIC, 711 West Thirteen Mile Road,
                                                                                 Madison Heights, Michigan 48071
- ------------------------------------------------------------------------------------------------------------------------------------
Kenneth S. Janke                      Chairman, Chief Executive Officer          Chairman and Trustee of NAIC, 711 West
                                      and Director                               Thirteen Mile Road, Madison Heights,
                                                                                 Michigan 48071
- ------------------------------------------------------------------------------------------------------------------------------------
Lewis A. Rockwell                     Secretary and Director                     Attorney and Counsel to the law firm of
                                                                                 Bodman, Longley & Dahling LLP, 100
                                                                                 Renaissance Center, 34th Floor, Detroit,
                                                                                 Michigan 48243
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>


Item 31. Location of Accounts and Records

         (a)      American Stock Transfer & Trust Company, P.O. Box 922, Wall
                  Street Station, New York, New York 10038 (records relating to
                  dividend disbursing agent and transfer agent);

         (b)      Standard Federal Bank N.A., 2600 West Big Beaver Road, Troy,
                  Michigan 48084 (records relating to custodian);

         (c)      Growth Fund Advisor, Inc., 711 West Thirteen Mile Road,
                  Madison Heights, Michigan 48071 (records relating to functions
                  as Investment Adviser); and

         (d)      Bodman, Longley & Dahling LLP, 100 Renaissance Center, 34th
                  Floor, Detroit, Michigan 48243 (Registrant's Articles of
                  Incorporation, By-Laws and Minute Books).

Item 32. Management Services

         Except as described in Part A of this Registration Statement under the
caption "Investment Advisory Agreement," the Registrant is not a party to any
management-related service contract.

Item 33. Undertakings


                                      C-3

<PAGE>

         1. The Registrant undertakes to suspend offering of its shares until it
amends its prospectus if (1) subsequent to the effective date of this
Registration Statement, the Registrant's net asset value declines more than 10
percent from its net asset value as of the effective date of the Registration
Statement or (2) the net asset value increases to an amount greater than its net
proceeds as stated in the prospectus.

         2. The Registrant undertakes:

                  a. to file, during any period in which offers or sales are
being made, a post-effective amendment to the registration statement:

                           (1) to include any prospectus required by Section
10(a)(3) of the Securities Act of 1933;

                           (2) to reflect in the prospectus any facts or events
after the effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the registration
statement; and

                           (3) to include any material information with respect
to the plan of distribution not previously disclosed in the Registration
Statement or any material change to such information in the Registration
Statement.

                  b. that, for the purpose of determining any liability under
the 1933 Act, each such post-effective amendment shall be deemed to be a new
Registration Statement relating to the securities offered therein, and the
offering of those securities at that time shall be deemed to be the initial bona
fide offering thereof; and

                  c. to remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.

         3. The Registrant undertakes to send by first class mail or other means
designed to ensure equally prompt delivery, within two business days of receipt
of a written or oral request, any Statement of Additional Information.

                                   SIGNATURES


         Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Madison Heights and State of Michigan on the 17th day
of January, 2003.


                             NAIC GROWTH FUND, INC.


                             By:       /s/Kenneth S. Janke
                                -------------------------------------
                                      Kenneth S. Janke
                             Its:     President and Treasurer



         Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed below by the following persons in the
capacities and on the dates listed.




                                                 *
                             ----------------------------------------
                             Thomas E. O'Hara, Director and Chairman
                             Date: January 17, 2003


                                       /s/ Kenneth S. Janke
                             ----------------------------------------
                             Kenneth S. Janke, Director, President and Treasurer
                             Date: January 17, 2003


<PAGE>

                                                *
                                    -------------------------------------------
                                    Lewis A. Rockwell, Director and Secretary
                                    Date: January 17, 2003


                                                *
                                    -------------------------------------------
                                    Peggy L. Schmeltz, Director
                                    Date: January 17, 2003

                                                *
                                    -------------------------------------------
                                    Luke E. Sims, Director
                                    Date: January 17, 2003



                                                *
                                    -------------------------------------------
                                    Carl A. Holth, Director
                                    Date: January 17, 2003


                                                *
                                    -------------------------------------------
                                    Benedict J. Smith, Director
                                    Date: January 17, 2003


                                                *
                                    -------------------------------------------
                                    James M. Lane, Director
                                    Date: January 17, 2003

*By his signature below, Kenneth S. Janke, pursuant to duly executed powers of
attorney filed with the Securities and Exchange Commission, has signed this
Registration Statement on Form N-2 on January 17, 2003 on behalf of the
above-listed persons designated by asterisks, in the capacities set forth by
their respective names.

                                         /s/ Kenneth S.  Janke
                                         --------------------------------------
                                         Kenneth S. Janke, Attorney-in-Fact


<PAGE>



                                POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS: That the undersigned officers and directors of
NAIC Growth Fund, Inc., a Maryland corporation (the "Fund"), do hereby
constitute and appoint Thomas E. O'Hara, Kenneth S. Janke, Lewis A. Rockwell,
and each of them, the lawful attorneys and agents or attorney and agent, with
power and authority to do any and all acts and things and to execute any and all
instruments which said attorneys and agents, and any one of them, determine may
be necessary or advisable or required to enable said corporation to comply with
the Securities Act of 1933 as amended, and the Investment Company Act of 1940,
as amended, and any rules or regulations or requirements of the Securities and
Exchange Commission in connection with a Registration Statement on Form N-2
relating to the offer and sale of 5,000,000 shares of common stock of the Fund.
Without limiting the generality of the foregoing power and authority, the powers
granted include the power and authority to sign the names of the undersigned
officers and directors in the capacities indicated below to the Registration
Statement, to any and all amendments, both pre-effective and post-effective, and
supplements to the Registration Statement, and to any and all instruments or
documents filed as part of or in conjunction with the Registration Statement or
amendments or supplements thereto, and each of the undersigned hereby ratifies
and confirms all that said attorneys and agents or any of them shall do or cause
to be done by virtue hereof. This Power of Attorney may be signed in several
counterparts.

         IN WITNESS WHEREOF, each of the undersigned has executed this Power of
Attorney as of the date indicated by his or her name.

      /s/ Thomas E. O'Hara
- ----------------------------------------------------
Thomas E. O'Hara, Director and Chairman
Date: April 18, 2002


      /s/ Kenneth S. Janke
- ----------------------------------------------------
Kenneth S. Janke, Director, President and Treasurer
Date: April 18, 2002


      /s/ Lewis A. Rockwell
- ----------------------------------------------------
Lewis A. Rockwell, Director and Secretary
Date: April 18, 2002


      /s/ Peggy L. Schmeltz
- ----------------------------------------------------
Peggy L. Schmeltz, Director
Date: April 18, 2002


      /s/ Luke E. Sims
- ----------------------------------------------------
Luke E. Sims, Director
Date: April 18, 2002


      /s/ Carl A. Holth
 ---------------------------------------------------
Carl A. Holth, Director
Date: April 18, 2002


      /s/ Benedict J. Smith
- ----------------------------------------------------
Benedict J. Smith, Director
Date: April 18, 2002


      /s/ James M. Lane
- ----------------------------------------------------
James M. Lane, Director
Date: April 18, 2002





<PAGE>


                                  EXHIBIT INDEX

(a)      Articles of Incorporation, as amended (incorporated by reference to
         Exhibit 1 to the Registrant's Form N-2 Registration Statement,
         Securities Act Registration No. 33-28506, Investment Company Act File
         No. 811-5807, Amendment No. 1, dated July 14, 1990).

(b)      By-laws, as amended (incorporated by reference to Exhibit 2(b) to the
         Registrant's Form N-2 Registration Statement, Securities Act
         Registration No. 333-99689, Investment Company Act File No. 811-05807,
         dated September 17, 2002).

(c)      Not Applicable
(d)      Not Applicable
(e)      Dividend Reinvestment and Cash Purchase Plan (incorporated by reference
         to Exhibit 1OA to the Registrant's Form N-2 Registration Statement,
         Securities Act Registration No. 33-38825, Investment Company Act File
         No. 811-5807, Amendment No. 1, dated March 29, 1991)
(f)      Not Applicable
(g)      Investment Advisory Agreement between the Fund and the Investment
         Adviser (incorporated by reference to Exhibit (g) to the Registrant's
         Form N-2 Registration Statement, Securities Act Registration No.
         33-38825, Post-Effective Amendment No. 1, Investment Company Act File
         No. 811-5807, Amendment No. 7, dated August 3, 1993)

(h)(i)   Amended Form of Underwriting Agreement by and among the Fund, the
         Investment Adviser, NAIC and BDFSC.
         (ii)     Form of Selected Dealer Agreement (incorporated by reference
                  to Exhibit 2(h)(ii) to the Registrant's Form N-2 Registration
                  Statement, Securities Act Registration No. 333-99689,
                  Investment Company Act File No. 811-05807, dated September 17,
                  2002).
(i)      Not Applicable
(j)      Custodial Agreement between the Fund and Standard Federal Bank, N.A.,
         as successor to Michigan National Bank (incorporated by reference to
         Exhibit 2(j) to the Registrant's Form N-2 Registration Statement,
         Securities Act Registration No. 333-99689, Investment Company Act File
         No. 811- 05807, dated September 17, 2002).
(k)      Amended Form of Escrow Agreement.

(1)      Opinion of Bodman, Longley & Dahling LLP regarding legality of the
         securities being offered and consent ( to be filed by amendment).
(m)      Not Applicable

(n)      Consent of Arthur Andersen LLP (omitted in reliance on Rule 437a under
         the Securities Act of 1933).

(o)      Not applicable
(p)      Not Applicable
(q)      Not Applicable

(r)      Code of Ethics of NAIC Growth Fund, Inc. and Growth Fund Advisor, Inc.
         (incorporated by reference to Exhibit 2(r) to the Registrant's Form N-2
         Registration Statement, Securities Act Registration No. 333-99689,
         Investment Company Act File No. 811-05807, dated September 17, 2002).




</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.H(I)
<SEQUENCE>3
<FILENAME>k74079a1exv99whxiy.txt
<DESCRIPTION>AMENDED FORM OF UNDERWRITING AGREEMENT
<TEXT>
<PAGE>
                                                                   EXHIBIT h (i)


                             NAIC GROWTH FUND, INC.

                                5,000,000 SHARES
                                  COMMON STOCK

                             UNDERWRITING AGREEMENT


                            __________________, 2003


Broker Dealer Financial Services Corp.
8800 NW 62nd Avenue
P.O. Box 6240
Johnston, Iowa  50131

Gentlemen:

     NAIC Growth Fund, Inc., a Maryland corporation (the "Fund") and Growth Fund
Advisor, Inc., a Michigan corporation (the "Investment Adviser"), each confirms
its agreement (the "Agreement") with Broker Dealer Financial Services Corp., an
Iowa corporation (the "Underwriter"), as follows:

     1. Description of Securities. The Fund, proposes to issue and sell through
the Underwriter up to 5,000,000 shares (the "Maximum Amount") of common stock,
par value $0.001 per share (the "Common Shares"), on the terms set forth in
Section 3 hereof.

     2. Representations and Warranties of the Fund, the Investment Adviser and
the Underwriter.

     (a) The Fund and the Investment Adviser (collectively, the "Representing
Parties") jointly and severally represent and warrant to, and agree with, the
Underwriter as of the date hereof and as of each Closing Date (as hereinafter
defined) (each such date being hereinafter referred to as the "Representation
Date") that:


                  (i) The Fund has filed with the Securities and Exchange
         Commission (the "Commission") a registration statement on Form N-2 (No.
         333-99689) and a related preliminary prospectus for the registration of
         the Common Shares under the Securities Act of 1933, as amended (the
         "1933 Act"), and the Investment Company Act of 1940, as amended (the
         "1940 Act"), and has filed such amendments to such registration
         statement on Form N-2, if any, and such amended preliminary
         prospectuses as may have been required prior to each Representation
         Date. The Fund will prepare and file such additional amendments thereto
         and such amended prospectuses as may hereafter be required. The Fund
         previously filed a notification on Form N-8A of registration of the
         Fund as an investment company under the 1940 Act and the rules and
         regulations of the Commission under the 1940 Act (together with the
         rules and regulations under the 1933 Act, the "Rules and Regulations").
         The registration statement, and the prospectus (including the statement
         of additional information) constituting a part




<PAGE>


         thereof, each as from time to time amended or supplemented pursuant to
         the 1933 Act or 1940 Act, are herein referred to as the "Registration
         Statement" and the "Prospectus," respectively, except that if any
         revised prospectus shall be provided to the Underwriter by the Fund for
         use in connection with the offer of the Common Shares (the "Offer")
         that differs from the Prospectus on file at the Commission at the time
         the Registration Statement becomes effective, the term "Prospectus"
         shall refer to each such revised prospectus, including the statement of
         additional information, from and after the time it is first provided to
         the Underwriter for such use.

                  (ii) At the time the Registration Statement becomes effective
         and at each Representation Date, the Registration Statement will comply
         in all material respects with the requirements of the 1933 Act, the
         1940 Act and the Rules and Regulations and will not contain an 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. From the time the Registration Statement becomes effective
         through the termination of this Underwriting Agreement (the
         "Termination Date"), the Prospectus (unless the term "Prospectus"
         refers to a prospectus that has been provided to the Underwriter by the
         Fund for use in connection with the Offer which differs from the
         Prospectus on file with the Commission at the time the Registration
         Statement becomes effective, in which case from the time such
         prospectus is first provided to the Underwriter for such use) will not
         contain an untrue statement of a material fact or omit to state a
         material fact necessary in order to make the statements therein, in the
         light of the circumstances under which they were made, not misleading;
         provided, however, that the representations and warranties in this
         subsection shall not apply to statements in or omissions from the
         Registration Statement or Prospectus made in reliance upon and in
         conformity with information relating to the Underwriter furnished to
         the Fund by the Underwriter in writing for use in the Registration
         Statement or Prospectus.

                  (iii) The accountants who certified the financial statements
         included in the Registration Statement were at the time of such
         certification independent public accountants as required by the 1933
         Act, the 1940 Act and the Rules and Regulations.

                  (iv) The financial statements included in the Registration
         Statement present fairly the financial position of the Fund as of the
         dates indicated and the results of its operations for the periods
         specified; such financial statements have been prepared in conformity
         with generally accepted accounting principles consistently applied; and
         the other financial and statistical information and data included in
         the Registration Statement and Prospectus is accurately presented in
         all material respects and prepared on a basis consistent with such
         financial statements and the books and records of the Fund.

                  (v) Since the respective dates as of which information is
         given in the Registration Statement and in the Prospectus, except as
         otherwise stated therein,






                                       2
<PAGE>




         (A) there has been no material adverse change in the condition,
         financial or otherwise, of the Fund, or in the earnings, business
         affairs or business prospects of the Fund, whether or not arising in
         the ordinary course of business, (B) there have been no transactions
         entered into by the Fund that are material to the Fund other than those
         in the ordinary course of business and (C) there has been no dividend
         or distribution of any kind declared, paid or made by the Fund on any
         class of its shares of capital stock, other than dividends or
         distribution made in the ordinary course of business or made for the
         purpose of maintaining the Fund's qualification as a regulated
         investment company under Subchapter M ("Subchapter M") of the Internal
         Revenue Code of 1986, as amended (the "Code").

                  (vi) The Fund has been duly organized and is validly existing
         as a corporation in good standing under the laws of the State of
         Maryland with power and authority to own its own properties and conduct
         its business as described in the Registration Statement; the Fund is
         duly qualified as a foreign corporation to transact business and is in
         good standing in each jurisdiction in which the failure to so qualify,
         either individually or in the aggregate, would have a material adverse
         effect upon the operations or financial condition of the Fund; and the
         Fund has no subsidiaries.

                  (vii) The Fund is registered with the Commission under the
         1940 Act as a closed-end, diversified management investment company,
         and no order of suspension or revocation of such registration has been
         issued or proceedings therefor initiated or, to the knowledge of the
         Representing Parties, threatened by the Commission. No person is
         serving or acting as an officer of the Fund who is ineligible to serve
         in such office under the 1940 Act, and no person is acting or serving
         as a director of the Fund except in accordance with the provisions of
         the 1940 Act.

                  (viii) The Fund owns or possesses or has obtained all material
         governmental licenses, permits, consents, orders, approvals and other
         authorizations necessary to lease or own, as the case may be, its
         properties and to carry on its businesses as contemplated in the
         Prospectus, and the Fund has not received any notice of proceedings
         relating to the revocation or modification of any such licenses,
         permits, covenants, orders, approvals or authorizations.

                  (ix) The authorized, issued and outstanding Common Shares as
         of the date hereof is as set forth in the Prospectus under the caption
         "Description of Shares", except for any Common Shares that may have
         been issued under the Fund's Dividend Reinvestment and Cash Purchase
         Plan (the "Cash Purchase Plan") or pursuant to this Agreement; the
         outstanding Common Shares have been duly authorized by all requisite
         corporate action on the part of the Fund and are validly issued and
         fully paid and non-assessable by the Fund; the Common Shares to be sold
         pursuant to this Agreement have been duly authorized by all requisite
         corporate action on the part of the Fund for issuance pursuant to the
         terms of this Agreement and, when issued and delivered by the Fund
         pursuant to the terms of this Agreement against payment of
         consideration therefor, will be validly issued





                                       3
<PAGE>


         and fully paid and non-assessable by the Fund; the Common Shares
         conform in all material respects to the description thereof set forth
         in the Prospectus under the caption "Description of Shares"; and the
         issuance of each of the Common Shares is not subject to preemptive
         rights.


                  (x) (A) The Fund is not in violation of its Articles of
         Incorporation, as amended from time to time (the "Articles"), or its
         by-laws as amended from time to time (the "By-Laws") or in default in
         the performance or observance of any material obligation, agreement,
         covenant or condition contained in any contract, indenture, mortgage,
         loan agreement, note, lease or other instrument to which it is a party
         or by which it or its properties may be bound; (B) (i) the execution
         and delivery of each of this Agreement, the Investment Advisory
         Agreement dated October 2, 1989, as amended (the "Investment Advisory
         Agreement"), between the Fund and the Investment Adviser, as successor
         to the National Association of Investors Corporation, a Michigan
         nonprofit corporation ("NAIC"), the Custodial Agreement dated May 15,
         1997 between the Fund and Standard Federal Bank N.A., as successor to
         Michigan National Bank (the "Custodian Agreement"), the Certificate of
         Appointment of American Stock Transfer & Trust Company dated November
         14, 2001 between the Fund and American Stock Transfer & Trust Company
         (the "Transfer Agency Agreement"), and the Escrow Agreement dated
         ____________, 2003 among the Fund, the Underwriter and Standard Federal
         Bank N.A. (the "Escrow Agreement") (the Investment Advisory Agreement,
         Custodian Agreement, Transfer Agency Agreement, and Escrow Agreement
         are collectively referred to herein as the "Fund Agreements") and the
         consummation of the transactions contemplated herein and therein have
         been duly authorized by all necessary corporate action of the Fund and
         will not conflict with or constitute a breach of, or, with or without
         giving notice or the lapse of time or both, a default under, or result
         in the creation or imposition of any lien, charge or encumbrance upon
         any property or assets of the Fund pursuant to any contract, indenture,
         mortgage, loan agreement, note, lease or other instrument to which the
         Fund is a party or by which it may be bound or to which any of the
         property or assets of the Fund is subject, nor will such action result
         in any violation of the provisions of the Articles or By-Laws or any
         law, administrative regulation or administrative or court decree
         applicable to the Fund, and no consent, approval, authorization or
         order of any court or governmental authority or agency is required for
         the consummation by the Fund of the transactions contemplated by this
         Agreement except such as has been obtained under the 1940 Act and the
         1933 Act or as may be required under the state securities or Blue Sky
         laws or foreign securities laws in connection with the sale of Common
         Shares pursuant to this Agreement, (ii) each of this Agreement and the
         Fund Agreements complies with all applicable provisions of the 1940
         Act, and (iii) each of this Agreement and the Fund Agreements is in
         full force and effect and constitutes a valid and binding obligation of
         the Fund, enforceable in accordance with its terms, subject, as to
         enforcement, to bankruptcy, insolvency, reorganization, or other
         similar laws relating to or affecting creditors' rights generally and
         to general principles of equity.





                                       4
<PAGE>


                  (xi) There is no action, suit or proceeding before or by any
         court or governmental agency or body, domestic or foreign, now pending,
         or, to the knowledge of the Representing Parties, threatened against or
         affecting, the Fund, which might result in any material adverse change
         in the condition, financial or otherwise, business affairs or business
         prospects of the Fund, or might materially and adversely affect the
         properties or assets of the Fund.

                  (xii) There are no contracts or documents which are required
         to be described in the Registration Statement or the Prospectus or to
         be filed as exhibits thereto which have not been so described and filed
         as required.

                  (xiii) The Fund owns or possesses adequate rights necessary to
         conduct its business as described in the Registration Statement, and
         the Fund has not received any notice of infringement of or conflict
         with asserted rights of others with respect to any trademarks, service
         marks or trade names which, singly or in the aggregate, if the subject
         of a decision, ruling or finding of infringement by the Fund, would
         materially adversely affect the conduct of the business, operations,
         financial condition or income of the Fund.

                  (xiv) Since the date of its incorporation, the Fund has
         qualified as a regulated investment company under Subchapter M of the
         Code and will continue so to qualify. In addition, the Fund will invest
         the proceeds of the Offer in such a manner as to comply with the
         requirements of Subchapter M of the Code.

                  (xv) The outstanding stock of the Fund is listed on the
         Chicago Stock Exchange ("CHX"). The Common Shares have been approved
         for listing, subject to official notice of issuance, on the CHX.

                  (xvi) The Fund has not, directly or indirectly, (i) taken any
         action designed to cause or result in, or that has constituted or might
         reasonably be expected to constitute, the stabilization or manipulation
         of the price of any security of the Fund to facilitate the sale or
         resale of the Common Shares or (ii) except for sales pursuant to the
         Cash Purchase Plan, since the filing of the Registration Statement, (A)
         sold, bid for, purchased, or paid anyone any compensation for
         soliciting purchases of, the Common Shares or (B) paid or agreed to pay
         to any person any compensation for soliciting another to purchase any
         other securities of the Fund (except for the sale of Common Shares
         under this Agreement).

                  (xvii) [Intentionally omitted.]

                  (xviii) The Fund has not distributed and, prior to the
         completion of the distribution of the Common Shares, will not
         distribute any offering material in connection with the offering and
         sale of the Common Shares other than the Registration Statement, the
         Prospectus or other materials, if any, permitted by the 1933 Act, the
         1940 Act, the Rules and Regulations or the Conduct Rules of the
         National Association of Securities Dealers, Inc. (the "NASD").





                                       5
<PAGE>


                  (xix) All advertising and other sales literature (including
         "prospectus wrappers") approved in writing by the Fund or the
         Investment Adviser or prepared by the Fund or the Investment Adviser
         for use in connection with the offering and sale of the Common Shares
         (collectively, "Sales Material") comply in all material respects with
         the applicable requirements of the 1933 Act, the 1940 Act, the Rules
         and Regulations and the rules and written interpretations of the NASD
         and no such Sales Material contained or contains an untrue statement of
         a material fact or omitted or omits to state a material fact required
         to be stated therein or necessary to make the statements therein, in
         the light of the circumstances under which they were made, not
         misleading.

                  (xx) Each of the Fund Agreements and the Fund's obligations
         under this Agreement comply, or will comply, in all material respects
         with all applicable provisions of the 1933 Act, the 1940 Act, the Rules
         and Regulations, the Investment Advisers Act of 1940, as amended (the
         "Advisers Act") and the rules and regulations of the Commission under
         the Advisers Act (the "Advisers Act Rules and Regulations").

                  (xxi) Except as disclosed in the Registration Statement and
         the Prospectus, no officer or director of the Fund is an "interested
         person" (as defined in the 1940 Act) of the Fund or the Investment
         Adviser or an "affiliated person" (as defined in the 1940 Act) of the
         Investment Adviser or the Underwriter.

                  (xxii) There are, and there will be, no material restrictions,
         limitations or regulations with respect to the ability of the Fund to
         invest its assets as described in the Prospectus other than as
         described therein.

                  (xxiii) The Fund and, to the Fund's Knowledge, its Custodian,
         Dividend Disbursement Agent and Transfer Agent maintain a system of
         internal accounting controls sufficient to provide reasonable
         assurances that (A) transactions are executed in accordance with
         general or specific authorization by the Investment Adviser or the
         Board of Directors of the Fund and with the applicable requirements of
         the 1940 Act and the Rules and Regulations thereunder and the Code; (B)
         transactions are recorded as necessary to permit preparation of
         financial statements in conformity with generally accepted accounting
         principles and to maintain accountability for assets and to maintain
         material compliance with the books and records requirements under the
         1940 Act and the Rules and Regulations thereunder; (C) access to assets
         is permitted only in accordance with general or specific authorization
         by the Investment Adviser or the Board of Directors of the Fund; and
         (iv) the recorded accounts for assets is compared with existing assets
         at reasonable intervals and appropriate action is taken with respect to
         any differences.

                  (xxiv) The Fund, subject to the Registration Statement having
         been declared effective and the filing of the Prospectus under Rule 497
         under the 1933 Act, if necessary, has taken or will take all required
         action under the 1933 Act, the







                                       6
<PAGE>


         1940 Act and the Rules and Regulations to make the offering and
         consummate the sale of the Common Shares as contemplated by this
         Agreement.

                  (xxv) The Fund will timely file the requisite copies of the
         Prospectus with the Commission pursuant to Rule 497(c) or Rule 497(h)
         under the 1933 Act, whichever is applicable, or, if applicable, will
         timely file the certification permitted by Rule 497(j) under the 1933
         Act and will advise the Underwriter of the time and manner of such
         filing.

                  (xxvi) The Fund will use its best efforts to perform all of
         the agreements required of it and discharge all conditions to closing
         as set forth in this Agreement.

     (b) The Representing Parties jointly and severally represent and warrant
to, and agree with, the Underwriter as of the date hereof and as of each
Representation Date as follows:

                  (i) The Investment Adviser has been duly organized as a
         corporation under the laws of the State of Michigan with corporate
         power and authority to conduct its business as described in the
         Prospectus; the Investment Adviser is duly qualified as a foreign
         corporation to transact business and is in good standing in each
         jurisdiction in which the failure to so qualify, either individually or
         in the aggregate, would have a material adverse effect upon the
         operations or financial condition of the Investment Adviser.

                  (ii) The Investment Adviser is duly registered as an
         investment adviser under the Advisers Act and is not prohibited by the
         Advisers Act or the 1940 Act, or the rules and regulations under such
         acts, from acting as Investment Adviser to the Fund under the terms of
         the Investment Advisory Agreement as contemplated by the Prospectus.

                  (iii) The description of the Investment Adviser in the
         Prospectus is true and correct in all material respects and does not
         contain any untrue statement of a material fact or omit to state any
         material fact required to be stated therein or necessary in order to
         make the statements therein not misleading; and there are no pending
         legal proceedings that would be required to be described under Item 12
         of Form N-2.

                  (iv) Each of this Agreement and the Investment Advisory
         Agreement has been duly authorized, executed and delivered by the
         Investment Adviser; each of this Agreement and the Investment Advisory
         Agreement is in full force and effect and constitutes a valid and
         binding obligation of the Investment Adviser, enforceable in accordance
         with its terms, subject, as to enforcement, to bankruptcy, insolvency,
         reorganization or other similar laws relating to or affecting
         creditors' rights generally and to general principles of equity; and
         neither the execution and delivery of this Agreement nor the
         performance by the Investment Adviser of its obligation hereunder or
         under the Investment Advisory Agreement will conflict with, or result
         in a breach of, any of the terms and







                                       7
<PAGE>


         provisions of, or constitute, with or without giving notice or lapse of
         time or both, a material default under any agreement or instrument to
         which the Investment Adviser is a party or by which the Investment
         Adviser is bound, or any law, order, rule or regulation applicable to
         it of any jurisdiction, court, federal or state regulatory body,
         administrative agency or other governmental body, stock exchange or
         securities association having jurisdiction over the Investment Adviser
         or its properties or operations.

                  (v) The Investment Adviser has available to it the financial,
         personnel and other resources necessary for the performance of its
         services and obligations as contemplated in the Prospectus.

                  (vi) The Investment Adviser has not, directly or indirectly,
         (i) taken any action designed to cause or result in, or that has
         constituted or might reasonably be expected to constitute, the
         stabilization or manipulation of the price of any security of the Fund
         to facilitate the sale or resale of the Common Shares or (ii) except
         for sales pursuant to the Cash Purchase Plan, since the filing of the
         Registration Statement, (A) sold, bid for, purchased, or paid anyone
         any compensation for soliciting purchases of the Common Shares or (B)
         paid or agreed to pay to any person any compensation for soliciting
         another to purchase any other securities of the Fund.

                  (vii) There is no action, suit or proceeding before or by any
         court or governmental agency or body, domestic or foreign, now pending,
         or, to the knowledge of the Representing Parties, threatened or
         contemplated against or affecting the Investment Adviser, which might
         result in any material adverse change in the condition, financial or
         otherwise, business affairs or business prospects of the Investment
         Adviser or materially and adversely affect the properties or assets of
         the Investment Adviser; and there are no material contracts or
         documents of the Investment Adviser that are required to be disclosed
         in the Registration Statement by the 1933 Act, the 1940 Act or by the
         Rules and Regulations that have not been so disclosed therein.

                  (viii) Except for the need to have the Commission declare the
         Registration Statement effective, no consent, approval, authorization,
         notification or order of, or any filing with, any court or governmental
         agency or body, whether foreign or domestic, is required for the
         consummation by the Investment Adviser of the transactions contemplated
         by this Agreement.

                  (ix) Except as disclosed in the Registration Statement and the
         Prospectus, subsequent to the respective dates as of which such
         information is given in the Registration Statement and the Prospectus,
         the Investment Adviser has not incurred any liability or obligation,
         direct or contingent, or entered into any transaction, not in the
         ordinary course of business, that is material to the Investment Adviser
         or the Fund and that is required to be disclosed in the Registration
         Statement or the Prospectus, and there has not been any material
         adverse change, or any development, either individually or in the
         aggregate,





                                       8
<PAGE>


         involving or which may reasonably be expected to have a material
         adverse effect upon the operations or financial condition of the
         Investment Adviser.

                  (x) (A) The Investment Adviser owns or possesses all material
         governmental licenses, permits, consents, orders, approvals or other
         authorizations (collectively, "Adviser Permits"), whether foreign or
         domestic, to enable the Investment Adviser to perform its obligations
         under the Investment Advisory Agreement; (B) the Investment Adviser has
         fulfilled and performed all its material obligations with respect to
         such Adviser Permits and no event has occurred which allows, or after
         notice or lapse of time would allow, revocation or termination thereof
         or would result in any other material impairment of the rights of the
         Investment Adviser under any such permit, subject in each case to such
         qualification as may be set forth in the Registration Statement and
         Prospectus; and (C) none of such Adviser Permits contains any
         restriction that is materially burdensome to the Investment Adviser,
         except where the failure of (A), (B) or (C) to be accurate would not,
         individually or in the aggregate, have a material adverse effect upon
         the operations or financial condition of the Investment Adviser or the
         Investment Adviser's performance of the Investment Advisory Agreement.

                  (xi) The information regarding the Investment Adviser in the
         Registration Statement and the Prospectus complies and will comply in
         all material respects with the requirements of Form N-2.

     (c) The Underwriter represents and warrants to, and agrees with, the Fund
and the Investment Adviser, as of the date hereof and as of each Representation
Date as follows:

                  (i) The Underwriter is registered as a broker-dealer with the
         Commission and with the Iowa Division of Insurance, Securities Bureau,
         and is registered, to the extent registration is required, with the
         appropriate governmental agency in each state in which it will offer or
         sell the Common Shares, and is a member of the National Association of
         Securities Dealers, Inc., and will use its best efforts to maintain
         such registrations and qualifications and memberships through the term
         of the Offer.

                  (ii) No action or proceeding is pending or, to the knowledge
         of the Underwriter, threatened, either in any court of competent
         jurisdiction, before the Commission or any state securities
         administrator, concerning the Underwriter's activities as a broker or
         dealer that would affect the Offer of the Common Shares.

                  (iii) The Underwriter will offer the Common Shares only in
         those states and in the quantities that are identified in the Blue Sky
         Memoranda from the Fund's counsel to the Underwriter that the offering
         of the Common Shares has been qualified for sale under the applicable
         state statutes and regulations. The Underwriter, however, may offer the
         Common Shares in other states if (i) the transaction is exempt from the
         registration requirements in that state, (ii) the Fund's counsel has
         received notice ten days prior to the proposed sale, and (iii) the
         Fund's counsel does not object within said ten day period.






                                       9
<PAGE>


                  (iv) The Underwriter is a corporation duly organized, validly
         existing and in good standing under the laws of the State of Iowa with
         all requisite power and authority to enter into this Agreement and to
         carry out its obligations hereunder.

                  (v) This Agreement has been duly authorized, executed and
         delivered by the Underwriter and is a valid agreement on the part of
         the Underwriter.

                  (vi) Neither the execution of this Agreement nor the
         consummation of the transactions contemplated hereby will result in any
         breach of any of the terms or conditions of, or constitute a default
         under, the articles of incorporation or bylaws of the Underwriter or
         any indenture, agreement or other instrument to which the Underwriter
         is a party or violate any order directed to the Underwriter of any
         court or any federal or state regulatory body or administrative agency
         having jurisdiction over the Underwriter or its affiliates.

     (d) Any certificate signed by any officer of the Fund or the Investment
Adviser and delivered to the Underwriter or counsel for the Underwriter shall be
deemed a representation and warranty by the Fund or the Investment Adviser, as
the case may be, to the Underwriter, as to the matters covered thereby.

     3. Sale and Delivery of Securities. (a) On the basis of the
representations, warranties and agreements herein contained, but subject to the
terms and conditions herein set forth, the Fund agrees to issue and sell through
the Underwriter, as exclusive underwriter for the sale of Common Shares pursuant
to this Agreement or any arrangement similar to that contemplated by this
Agreement, and the Underwriter agrees to sell, as underwriter for the Fund, on a
"best efforts" basis, up to the Maximum Amount of Common Shares during the term
of this Agreement in accordance with the 1933 Act, the 1940 Act, the Securities
Exchange Act of 1934 (the "1934 Act"), the Conduct Rules of the NASD and the
terms set forth herein; provided, however, that the Underwriter shall not be
deemed to be in violation of this sentence if such violation is caused by the
failure of the Fund or the Investment Adviser to comply with its agreements and
representations contained herein. In connection with the performance of its
obligations under this Agreement, the Underwriter may, with the approval of the
Fund, use the services of selected broker-dealers ("Selected Dealers") who are
members of the NASD. The arrangements, if any, between the Underwriter and any
Selected Dealer shall be set forth in a Selected Dealer Agreement in a form
attached hereto as Exhibit A, unless the Fund shall consent to other
arrangements.


     (b) The Fund shall calculate the Current Net Asset Value (as such term is
used in Section 23(b) of the 1940 Act) per Common Share at the close of business
on Thursday each week or if any Thursday is not a business day the business day
immediately preceding such Thursday (the "Determination Date") and shall notify
the Underwriter of the result of such calculation by 2:00 p.m., New York City
time, on the first business day following the Determination Date each week.
"Sales Price" in this Agreement means the price equal to the Current Net\ Asset
Value per Common Share as of 5:30 p.m., New York City time, on the Determination
Date of each week, divided by (1 minus the applicable sales commission), and






                                       10
<PAGE>



rounded to the nearest penny, which Sales Price shall be effective until 5:30
p.m., New York City time, on the following Determination Date.



         (c) The Underwriter, and any Selected Dealer selected by the
Underwriter, may offer Common Shares only pursuant to a properly completed and
executed Subscription Agreement in the form attached hereto as Exhibit B and in
accordance with the terms of the Prospectus. Each person desiring to purchase
Common Shares shall be required to (i) complete, manually execute and mail or
deliver a Subscription Agreement to the Fund in care of the Investment Adviser
and (ii) mail or deliver to the Fund in care of the Investment Adviser a check
payable to Standard Federal Bank N.A., as escrow agent (the "Escrow Agent")
(each, a "Subscription Payment") in an amount of at least the Minimum
Subscription, as defined in paragraph (m) below, in accordance with the terms of
the Prospectus. No later than by noon of the first business day following
receipt of a completed Subscription Agreement and a Subscription Payment, the
Investment Adviser shall (x) forward an electronic image or copy of such
Subscription Agreement to the Underwriter and (y) deposit any Subscription
Payment it receives with the Escrow Agent. The Investment Adviser will retain
all completed and executed subscription documents. No subscription shall be
effective unless and until it is (i) accepted on behalf of the Fund by the
Investment Adviser and (ii) approved by the Underwriter. The Fund and the
Underwriter reserve the right, in their sole discretion, to refrain from
accepting or approving any subscription submitted. No person subscribing shall
have the right to receive a refund of its Subscription Payment at any time after
a Subscription Agreement is received; provided that, if for any reason a
subscription is not accepted by either the Fund or the Underwriter, then the
Fund will promptly instruct the Escrow Agent to refund such Subscription Payment
without interest.


         (d) The Fund will issue and sell Common Shares, at the Sales Price, to
each person for whom (i) the Fund has received an executed Subscription
Agreement, (ii) the Subscription Agreement has been accepted on behalf of the
Fund by the Investment Adviser and approved by the Underwriter, and (iii) the
Subscription Payment is held in immediately available funds by the Escrow Agent;
provided, however, that the aggregate number of shares issued and sold under
this Agreement will not exceed the Maximum Amount. The Fund and Investment
Adviser will cooperate with the Underwriter and if applicable, the Selected
Dealers to remedy any incomplete or defective Subscription Agreements.

         (e) Sales will be made in the manner and at the times specified in the
Registration Statement and according to procedures agreed upon from time to time
by the Investment Adviser and the Underwriter. Settlement for sales of Common
Shares will occur on the first business day following the date on which such
sales are made (each a "Closing Date"). The amount of proceeds for such sales to
be delivered by the Escrow Agent to the Fund against the receipt of the Common
Shares sold shall be equal to the aggregate sales prices at which such Common
Shares were sold.

         (f) Common Shares sold in the Offer will be held by American Stock
Transfer & Trust Company or its successor as the Fund's transfer agent (the
"Transfer Agent") in noncertificated form in the purchaser's name, unless the
purchaser elects otherwise in the Subscription Agreement. If a purchaser elects
to receive a certificate for its Common Shares in the Subscription Agreement,
the Fund will not issue fractional shares to the purchaser and will refund the
portion of the Purchase Price representing the fractional share, without
interest, at the






                                       11
<PAGE>



time of delivering the share certificate. Fractional shares will be issued for
shares held by the Transfer Agent in noncertificated form. Such fractional
shares will be aggregated with any other fractional shares held by the Transfer
Agent for the purchaser from time to time and will be paid for by check, at the
then-prevailing market price, if the purchaser requests a certificate for its
shares after the acceptance of the purchaser's subscription in the Offer.

         (g) On each Closing Date, the Fund and the Investment Adviser and the
Underwriter shall each be deemed to have affirmed each representation, warranty,
covenant and other agreement contained in this Agreement. At the request of the
Fund, the Investment Adviser or the Underwriter, but not more frequently than
once each month, the Fund, the Investment Adviser and the Underwriter shall each
affirm in writing each representation, warranty, covenant and other agreement
contained in this Agreement. The obligation of the Underwriter to use its
reasonable efforts to sell the Common Shares shall be subject to the continuing
accuracy of the representations and warranties of the Representing Parties
herein, to the performance by the Fund and Investment Adviser of their
obligations hereunder and to the continuing satisfaction of the additional
conditions specified in Section 5 of this Agreement.

         (h) In connection with the sale of Common Shares under this Agreement,
the Underwriter is not authorized by the Fund to give any information or to make
any representations in connection with this Agreement other than those contained
in the Registration Statement and the Prospectus, and the Underwriter agrees not
to give any unauthorized information or to make any unauthorized representations
and to cause Selected Dealers to so agree (and use reasonable efforts to enforce
such agreement). Except as specifically provided in this Agreement, the
Underwriter is not authorized to act as an agent for the Fund, and it agrees not
to act or to purport to act as an agent for the Fund.


         (i) The Underwriter shall be paid out of the Subscription Payments a
sales commission for sales of Common Shares at a rate of 3.5% of the gross Sales
Price per share of the all Common Shares sold under this Agreement. In the event
that the Underwriter enters into a Selected Dealer Agreement with an
unaffiliated Selected Dealer, such commission rate shall be permanently
increased to a fixed commission rate 5.0% of the gross Sales Price per share of
all Common Shares sold thereafter. The compensation payable to the Underwriter
for Common Shares sold shall be paid no later than the close of business on the
first business day following each Closing Date.


         (j) The Fund has paid the Underwriter a non-accountable expense
allowance of $15,000, and the Underwriter acknowledges receipt of that amount.
Except for such non-accountable allowance and as provided in Section 4(f),
neither the Fund nor the Investment Adviser shall be responsible for payment or
reimbursement of the fees or expenses of Underwriter's counsel.

         (k) The Underwriter and each Selected Dealer shall be an independent
contractor and neither the Underwriter, any Selected Dealer nor any of their
directors, officers or employees as such, is or shall be, solely reason of this
Agreement, an employee of the Fund.

         (l) The Underwriter shall have the right, at reasonable times and on
reasonable notice, to inspect the records of the Fund, the Investment Adviser
and the Escrow Agent relating




                                       12
<PAGE>



to the Offer and to discuss such records with appropriate representatives of the
Fund, Investment Adviser and Escrow Agent.


         (m) "Minimum Subscription" means $500, inclusive of the applicable
sales commission payable to the Underwriter. The Minimum Subscription may be
increased by the Fund for certain purchases, but may not be decreased.


         4. Covenants of the Fund. The Fund covenants and agrees with the
Underwriter that:

         (a) The Fund will use its reasonable efforts (i) to cause the
Registration Statement to become effective under the 1933 Act, (ii) if required,
to cause the issuance of any orders exempting the Fund from any provisions of
the 1940 Act, in which case it will advise the Underwriter promptly as to the
time at which any such orders are issued, and (iii) to maintain during the term
of this Agreement the effectiveness of the Registration Statement under the 1933
Act and of the Fund under the 1940 Act.

         (b) The Fund will orally notify the Underwriter promptly, and confirm
the notice in writing, of the (i) effectiveness of the Registration Statement
and any amendment thereto (including any post-effective amendment), (ii) receipt
of any comments from the Commission, (iii) request by the Commission for any
amendment to the Registration Statement, any amendment or supplement to the
Prospectus or additional information, (iv) issuance by the Commission of any
stop order suspending the effectiveness of the Registration Statement or the
initiation of any proceedings for that purpose, (v) issuance by the Commission
of an order of suspension or revocation of the notification on Form N-8A of
registration of the Fund as an investment company under the 1940 Act or the
initiation of any proceeding for that purpose and (vi) suspension of the
qualification of the Common Shares for offering or sale in any jurisdiction. The
Fund will make every reasonable effort to prevent the issuance of any stop order
described in subsection (iv) hereunder or any order of suspension or revocation
described in subsection (v) or subsection (vi) hereunder and, if any such stop
order or order of suspension or revocation is issued, to obtain the lifting
thereof at the earliest possible moment.

         (c) The Fund will give the Underwriter notice of its intention to file
any amendment to the Registration Statement (including any post-effective
amendment) or any amendment or supplement to the Prospectus (including any
revised prospectus that the Fund proposes for use by the Underwriter, which
differs from the prospectus on file at the Commission at the time the
Registration Statement becomes effective), whether pursuant to the 1940 Act, the
1933 Act, or otherwise, and will furnish the Underwriter and counsel for the
Underwriter with copies of any such amendment or supplement within a reasonable
amount of time prior to such proposed filing or use, as the case may be, and
will not file any such amendment or supplement to which the Underwriter or
counsel for the Underwriter reasonably shall object.

         (d) During the period in which a prospectus relating to the Common
Shares is required to be delivered under the 1933 Act, the Fund will prepare and
file with the Commission, promptly upon the Underwriter's request, any
amendments or supplements to the Registration Statement or Prospectus that are
required in connection with the distribution of the Common Shares by the
Underwriter; and it will furnish to the Underwriter and counsel for the
Underwriter




                                       13
<PAGE>


at the time of filing thereof a copy of any document that upon filing is deemed
to be incorporated by reference in the Registration Statement or Prospectus; and
the Fund will cause each amendment or supplement to the Prospectus to be filed
with the Commission as required pursuant to the applicable paragraph of Rule 497
of the Rules and Regulations within the time period prescribed.

         (e) Within the time during which a prospectus relating to the Common
Shares is required to be delivered under the 1933 Act, the Fund will comply as
far as it is able with all requirements imposed upon it by the 1933 Act and by
the Rules and Regulations, as from time to time in force, so far as necessary to
permit the continuance of sales of or dealings in the Common Shares as
contemplated by the provisions hereof and the Prospectus. If during such period
any event occurs as a result of which the Prospectus as then amended or
supplemented would include an untrue statement of a material fact or omit to
state a material fact necessary to make the statements therein, in the light of
the circumstances then existing, not misleading, or if during such period it is
necessary to amend or supplement the Registration Statement or Prospectus to
comply with the 1933 Act, the Fund will promptly notify the Underwriter to
suspend the offering of Common Shares during such period and the Fund will amend
or supplement the Registration Statement or Prospectus so as to correct such
statement or omission or effect such compliance.

         (f) The Fund will use its reasonable efforts to qualify the Common
Shares for sale under the securities laws of such jurisdictions as the
Underwriter and the Fund mutually agree to continue such qualifications in
effect so long as required for the distribution of the Common Shares. The Fund
will pay all fees and expenses (including attorney fees) in connection with such
qualification.

         (g) The Fund will furnish to the Underwriter and its counsel (at the
expense of the Fund) copies of the Registration Statement, the Prospectus and
all amendments and supplements to the Registration Statement or Prospectus that
are filed with the Commission during the period in which a prospectus relating
to the Common Shares is required to be delivered under the 1933 Act, in each
case as soon as available and in such quantities as the Underwriter may from
time to time reasonably request.

         (h) The Fund will make generally available to its security holders as
soon as practicable, but in any event not later than 60 days after the close of
the period covered thereby, an earnings statement in form complying with the
provisions of Rule 158 of the Rules and Regulations covering a 12-month period
that satisfies the provisions of Section 11(a) of the Act and Rule 158 of the
Rules and Regulations.

         (i) The Fund, whether or not the transactions contemplated hereunder
are consummated or this Agreement is terminated, will pay all expenses incident
to the performance of its obligations hereunder, including, but not limited to,
expenses relating to (i) the printing and filing of the Registration Statement
as originally filed and of each amendment thereto, (ii) the preparation,
issuance and delivery of the Common Shares, (iii) the reasonable fees and
disbursements of the Fund's counsel and accountants, (iv) the qualification of
the Common Shares under securities laws in accordance with the provisions of
Section 4(f) of this Agreement, including filing fees and any reasonable fees or
disbursements of counsel for the Underwriter in





                                       14
<PAGE>


connection therewith, (v) the printing and delivery to the Underwriter and any
Selected Dealer of copies of the preliminary prospectus, of the Prospectus and
any amendments or supplements thereto, and of this Agreement, (vi) the fees and
expenses incurred in connection with the listing of the Common Shares on the
CHX, (vii) the filing fees of the Commission and the National Association of
Securities Dealers, Inc., and (viii) the fees and expenses of third party
marketing assistance firms if the Fund and the Underwriter agree to use such
firms.

         (j) The Fund will apply the net proceeds from the sale of the Common
Shares as set forth in the Prospectus.

         (k) The Fund will not, directly or indirectly, offer or sell any Common
Shares (other than the Common Shares offered pursuant to the provisions of this
Agreement) or securities convertible into or exchangeable for, or any rights to
purchase or acquire, Common Shares during the period from the date of this
Agreement through the final Closing Date for the sale of Shares hereunder
without (a) giving the Underwriter at least ten business days' prior written
notice specifying the nature of the proposed sale and the date of such proposed
sale and (b) suspending sales pursuant to this Agreement for such period of time
as may reasonably be determined by agreement of the Fund and the Underwriter;
provided, however, that no such notice and suspension shall be required in
connection with the Fund's issuance or sale of Common Shares in connection with
the Fund's issuance or sale of Common Shares under the terms of the Cash
Purchase Plan (as in effect on the date hereof).

         (l) The Fund will, at any time during the term of this Agreement, as
supplemented from time to time, advise the Underwriter immediately after it
shall have received notice or obtain knowledge thereof, of any information or
fact that would alter or affect any opinion, certificate, letter and other
document provided to the Underwriter pursuant to Section 5 herein.

         (m) Each time that the Registration Statement or the Prospectus shall
be amended or supplemented (other than a supplement filed pursuant to Rule
497(h) under the 1933 Act that contains solely information on number of shares
sold, sale prices and dates of sale), the Fund shall furnish or cause to be
furnished to the Underwriter forthwith a certificate dated the date of filing
with the Commission of such amendment or supplement, or the date of
effectiveness of amendment, as the case may be, in form satisfactory to the
Underwriter to the effect that the statements contained in the certificates
referred to in Section 5(f) hereof which were last furnished to the Underwriter
are true and correct at the time of such amendment, supplement, filing, as the
case may be, as though made at and as of such time (except that such statements
shall be deemed to relate to the Registration Statement and the Prospectus as
amended and supplemented to such time) or, in lieu of such certificates,
certificates of the same tenor as the certificates referred to in said Section
5(f), modified as necessary to relate to the Registration Statement and the
Prospectus as amended and supplemented to the time of delivery of such
certificate.

         (n) Each time that the Registration Statement or the Prospectus is
amended or supplemented (other than a supplement filed pursuant to Rule 497(h)
under the 1933 Act that contains solely information on number of shares sold,
sale prices and dates of sale), the Fund shall furnish or cause to be furnished
forthwith to the Underwriter and to counsel to the Underwriter a written opinion
of Bodman, Longley & Dahling LLP, counsel to the Fund ("Fund







                                       15
<PAGE>


Counsel"), or other counsel satisfactory to the Underwriter, dated the date of
filing with the Commission of such amendment, supplement or other document and
the date of effectiveness of such amendment, as the case may be, in form and
substance satisfactory to the Underwriter, of the same tenor as the opinion and
additional statement referred to in Section 5(d) hereof, but modified as
necessary to relate to the Registration Statement and the Prospectus as amended
and supplemented to the time of delivery of such opinion.

         (o) Each time that the Registration Statement or the Prospectus shall
be amended or supplemented to include additional amended financial information
or there is filed with the Commission any document incorporated by reference
into the Prospectus which contains additional amended financial information, the
Fund shall cause Plante & Moran, LLP or other independent accountants
satisfactory to the Underwriter, forthwith to furnish the Underwriter, with a
copy to counsel to the Underwriter, a letter, dated the date of effectiveness of
such amendment, or the date of filing of such supplement or other document with
the Commission, as the case may be, in form satisfactory to the Underwriter, of
the same tenor as the letter referred to in Section 5(e) hereof but modified to
relate to the Registration Statement and the Prospectus, as amended and
supplemented to the date of such letter; provided, however, that the Underwriter
acknowledges that no such letter shall be required for a supplement filed
pursuant to Rule 497(h) under the 1933 Act that contains solely information on
number of shares sold, sale prices and dates of sale.

         (p) The Fund will maintain its qualification as a regulated investment
company entitled to the benefits of Subchapter M of the Code.

         (q) The Fund and the Investment Adviser will not, directly or
indirectly, (i) take any action designed to cause or result in, or that
constitutes or might reasonably be expected to constitute, the stabilization or
manipulation of the price of any security of the Fund to facilitate the sale or
resale of the Common Shares or (ii) except for sales pursuant to the Cash
Purchase Plan, sell, bid for, purchase, or pay anyone any compensation for
soliciting purchases of the Common Shares or pay or agree to pay any person any
compensation for soliciting another to purchase any other securities of the Fund
(except for the sale of Common Shares under this Agreement).

         5. Conditions of Underwriter's Obligations. The obligations of the
Underwriter to use its reasonable efforts to sell the Common Shares as provided
herein shall be subject to the accuracy, as of the date and hereof, and as of
each Closing Date, of the representations and warranties of the Fund and the
Investment Adviser contained herein, to the performance by each of them of their
respective obligations hereunder and to the following additional conditions:

         (a) The Registration Statement shall have become effective and no stop
order suspending the effectiveness of the Registration Statement shall have been
issued and no proceeding for that purpose shall have been instituted or, to the
knowledge of the Fund, the Investment Adviser or the Underwriter, threatened by
the Commission, and any request of the Commission for additional information (to
be included in the Registration Statement or the Prospectus or otherwise) shall
have been complied with to the Underwriter's satisfaction.





                                       16
<PAGE>



     (b) The Underwriter shall not have advised the Fund that the Registration
Statement or Prospectus, or any amendment or supplement thereto, contains a
statement of fact that in the Underwriter's opinion is untrue and is material,
or omits to state a fact that in the Underwriter's opinion is material and is
required to be stated therein or is necessary to make the statements therein not
misleading.

     (c) Except as contemplated in the Prospectus, subsequent to the respective
dates as of which information is given in the Registration Statement and the
Prospectus, there shall not have been any material change in the capitalization
of the Fund (other than sales of shares pursuant to this Agreement or the Cash
Purchase Plan), or any material adverse change, or any development that may
reasonably be expected to cause a material adverse change, in the condition
(financial or other), business, prospects, net worth or results of operations of
the Fund.

     (d) The Underwriter shall have received by the first day on which sales are
permitted to be made by the Underwriter hereunder (the "Commencement Date") and
at every other date specified in Section 4(n) hereof, opinions of Fund Counsel,
which opinion may rely, in part as to matters of Maryland law, upon an opinion
from other counsel to the Fund, satisfactory to the Underwriter (and upon which
the Underwriter shall be entitled to rely to the same extent as Fund Counsel),
dated as of the Commencement Date or as of such other date, as applicable, to
the effect that:

                  (i) The Fund has been duly established and is validly existing
         as a corporation in good standing under the laws of the State of
         Maryland, the Investment Adviser has been duly incorporated and is
         validly existing as a corporation in good standing under the laws of
         the State of Michigan.

                  (ii) Each of the Fund and the Investment Adviser has the
         corporate power and authority to own, lease and operate its respective
         properties, to execute, deliver and perform this Agreement and the Fund
         Agreements to which it is a party, and to conduct its respective
         business as described in the Registration Statement and the Prospectus.

                  (iii) Each of the Fund and the Investment Adviser is duly
         qualified as a corporation to transact business and is in good standing
         in the jurisdiction of its principal place of business and is duly
         qualified to do business in each jurisdiction where such qualification
         is required, except where the failure to so qualify would not have a
         material adverse effect on the condition, financial or otherwise, or
         the earnings, business affairs or business prospects of the Fund, the
         Investment Adviser.

                  (iv) The Fund has an authorized, issued and outstanding
         capitalization as set forth in the Prospectus as of the dates specified
         therein. All of the outstanding Common Shares have been duly authorized
         by requisite corporate action on the part of the Fund and validly
         issued, are fully paid and non-assessable by the Fund and conform to
         the description thereof in the Prospectus.





                                       17
<PAGE>


                  (v) The Common Shares have been duly and validly authorized,
         and, when issued and delivered to and paid for by the purchasers
         thereof pursuant to this Agreement, will be fully paid and
         nonassessable and conform to the description thereof in the Prospectus;
         the issuance of the Common Shares is not subject to any preemptive or
         other rights to subscribe for any of the Common Shares under any
         indenture, mortgage, deed of trust, lease or other agreement or
         instrument to which the Fund is a party or by which the Fund or any of
         its properties are bound, or under the Articles of Incorporation or
         By-Laws of the Fund, or under the Maryland General Corporation Law; all
         action required to be taken for the authorization, issue and sale of
         the Common Shares have been validly and sufficiently taken; the form of
         certificate, if any, used to evidence the Common Shares is in proper
         form and complies with all applicable statutory requirements; and the
         Common Shares are the subject of an effective registration statement
         permitting their sale in the manner contemplated by this Agreement.

                  (vi) This Agreement has been duly authorized, executed and
         delivered by the Fund and the Investment Adviser, complies with all
         applicable provisions of the 1933 Act, the 1940 Act, the Advisers Act
         and the rules and regulations under such acts and constitutes a valid
         and binding agreement of the Fund, the Investment Adviser and NAIC,
         enforceable in accordance with its terms, subject, as to enforcement,
         to bankruptcy, insolvency, reorganization and other laws of general
         applicability relating to or affecting creditors' rights and to general
         equity principles.

                  (vii) Each of the Fund Agreements have been duly authorized,
         executed and delivered by the Fund and the Investment Adviser, as the
         case may be, comply as to form in all material respects with all
         applicable provisions of the 1933 Act, the 1940 Act, the Advisers Act
         and the rules and regulations under such acts and constitute the valid
         and binding obligation of each of the Fund and the Investment Adviser,
         enforceable in accordance with their terms, subject, as to enforcement,
         to bankruptcy, insolvency, reorganization and other laws of general
         applicability relating to or affecting creditors' rights and to general
         equity principles.

                  (viii) The Registration Statement has become effective under
         the 1933 Act; to the knowledge of such counsel after due inquiry, no
         stop order suspending the effectiveness of the Registration Statement
         has been issued and no proceeding for that purpose has been instituted
         or threatened by the Commission.

                  (ix) The Registration Statement, when it became effective, and
         the Prospectus and any amendment or supplement thereto, on the date of
         filing thereof with the Commission (and at each Closing Date on or
         prior to the date of the opinion), complied as to form in all material
         respects with the requirements of the 1933 Act, the 1940 Act and the
         Rules and Regulations.

                  (x) The description in the Registration Statement and
         Prospectus of statutes, legal and governmental proceedings, contracts
         and other documents are




                                       18
<PAGE>


         accurate in all material respects and fairly present the information
         required to be shown; and such counsel do not know of any statutes or
         legal or governmental proceedings required to be described in the
         Prospectus that are not described as required.

                  (xi) To the best of such counsel's knowledge and information,
         there are no contracts, indentures, mortgages, loan agreements, notes,
         leases or other instruments of the Fund or the Investment Adviser that
         are required to be described or referred to in the Registration
         Statement or to be filed as exhibits thereto other than those
         respectively described or referred to therein or filed as exhibits
         thereto, the descriptions thereof and references thereto are correct in
         all material respects, and no default exists in the due performance or
         observance of any material obligation, agreement, covenant or condition
         contained in any contract, indenture, loan agreement, note or lease so
         described, referred to or filed.

                  (xii) No consent, approval, authorization or order of any
         court or governmental authority or agency is required in connection
         with the sale of the Common Shares pursuant to this Agreement, except
         such as has been obtained under the 1933 Act, the 1940 Act or the Rules
         and Regulations or such as may be required under state securities laws;
         and the execution, delivery and performance of, and the consummation of
         the transactions contemplated by, this Agreement and the Fund
         Agreements by each of the Fund and Investment Adviser, as applicable,
         will not conflict with, or constitute or result in a breach or
         violation by the Fund or the Investment Adviser of or a default under,
         any of the terms or provisions of, (A) any contract, indenture,
         mortgage, loan agreement, note, lease or other instrument known to such
         counsel to which the Fund or the Investment Adviser is a party or by
         which any of them is bound or to which any of their property or assets
         are subject, (B) the provisions of the Articles of Incorporation or
         By-Laws of the Fund, or the articles of incorporation or by-laws of the
         Investment Adviser or (C) any statute, or any order, rule or regulation
         of any court or governmental agency or body, applicable to the Fund or
         the Investment Adviser or any of their businesses or properties.

                  (xiii) The Fund is registered with the Commission under the
         1940 Act as a closed-end diversified management investment company, and
         all required action has been taken by the Fund under the 1933 Act, the
         1940 Act and the Rules and Regulations to make and consummate the
         Offer; the provisions of the Articles of Incorporation and By-Laws of
         the Fund comply in all material respects with the requirements of the
         1940 Act and the rules and regulations thereunder; and, to the best of
         such counsel's knowledge and information, no order of suspension or
         revocation of such registration under the 1940 Act, pursuant to Section
         8(e) of the 1940 Act, has been issued or proceedings therefor initiated
         or threatened by the Commission.

                  (xiv) The information in the Prospectus (and statement of
         additional information) under the captions "The Fund", "Investment
         Objective and Policies,"






                                       19
<PAGE>


         "The Investment Adviser," "Description of Shares," "The Offering" and
         "Taxation", to the extent that it constitutes matters of law or legal
         conclusions thereunder, has been reviewed by such counsel and is
         accurate and correct in all material respects.

                  (xv) The Investment Adviser is duly registered as an
         investment adviser under the Advisers Act and is not prohibited by the
         Advisers Act or the 1940 Act, or the rules and regulations under such
         acts, from acting under the Investment Advisory Agreement for the Fund
         as contemplated by the Registration Statement and the Prospectus.

                  (xvi) The Fund is a "regulated investment company" as defined
         in Section 851 of the Code, and the Fund and its shareholders are
         subject to federal income taxation as provided in Subpart M of the
         Code.

     In addition, such counsel shall state that nothing has come to such
counsel's attention that would lead them to believe that the Registration
Statement (other than the financial statements and other financial information
included therein, as to which no belief need be stated), at the time it
(including any post-effective amendment) became effective, contained an untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not misleading or
that the Prospectus (other than the financial statements and other financial
information included therein, as to which no belief need be stated), and any
amendments or supplements thereto, on the date of filing thereof with the
Commission and at the Commencement Date and at each Closing Date on or prior to
the date of the opinion included an untrue statement of a material fact or
omitted to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.

     (e) At the Commencement Date and at such other dates specified in Section
4(o) hereof, the Underwriter shall have received a "comfort" letter from Plante
& Moran, LLP, independent public accountants for the Fund, or other independent
accountants satisfactory to the Underwriter, dated the date of delivery thereof,
with respect to procedures which have been agreed upon by the Underwriter and
the Fund, and otherwise in form and substance satisfactory to the Underwriter.

     (f) The Underwriter shall have received a certificate, or certificates,
signed by the President and Treasurer (which may be one person) or his designee
of each of the Fund and the Investment Adviser, dated as of the Commencement
Date and dated as of the first day of each month (each a "Certificate Date"), to
the effect that, to the best of their knowledge based upon reasonable
investigation:

                  (i) the representations and warranties of the Fund and the
         Investment Adviser in this Agreement are true and correct, as if made
         at and as of such Certificate Date, and the Fund and the Investment
         Adviser have each complied with all the agreements and satisfied all
         the conditions on their part respectively, to be performed or satisfied
         at or prior to the Certificate Date;





                                       20
<PAGE>

                  (ii) no stop order suspending the effectiveness of the
         Registration Statement has been issued, and no proceeding for that
         purpose has been instituted or, to the knowledge of such officer after
         due inquiry, is threatened, by the Commission;

                  (iii) the Registration Statement and the Prospectus contain
         all statements that are required to be stated therein in accordance
         with the 1933 Act, the 1940 Act and the Rules and Regulations and
         conform in all material respects to the requirements of the 1933 Act,
         1940 Act and the Rules and Regulations and the Registration Statement
         and the Prospectus do not contain any untrue statement of a material
         fact or omit to state any material fact necessary to make the
         statements therein, in the light of the circumstances under which they
         were made, not misleading, and no action suit or proceeding of law or
         in equity is pending or, threatened against the Fund or the Investment
         Adviser, that would be required to be set forth in the Registration
         Statement and the Prospectus other than as set forth therein;

                  (iv) there has not been, since the respective dates as of
         which information is given in the Registration Statement and the
         Prospectus, any material adverse change in the condition, financial or
         otherwise, of the Fund or the Investment Adviser in their earnings,
         business affairs or business prospects, whether or not arising in the
         ordinary course of business, from that set forth in the Registration
         Statement and Prospectus;

                  (v) the Investment Adviser has the financial, personnel and
         other resources available necessary for the performance of its services
         and obligations as contemplated in the Prospectus; and

                  (vi) no proceedings are pending or, to the knowledge of the
         Fund or the Investment Adviser, threatened against the Fund or the
         Investment Adviser, before or by any federal, state or other
         commission, board or administrative agency wherein an unfavorable
         decision, ruling or finding would materially and adversely affect the
         business, property, financial condition or income of either the Fund or
         the Investment Adviser, other than as set forth in the Registration
         Statement and the Prospectus.

     In addition, on each Certificate Date the certificate shall also state that
the Common Shares to be sold to that date have been duly and validly authorized
by the Fund and that all action required to be taken for the authorization,
issuance and sale of the Common Shares has been validly and sufficiently taken.

     (g) At the Commencement Date and on each Closing Date, the Fund shall have
furnished to the Underwriter such appropriate further information, certificates
and documents as the Underwriter may reasonably request.

     All such opinions, certificates, letters and other documents will be in
compliance with the provisions hereof only if they are satisfactory in form and
substance to the Underwriter. The




                                       21
<PAGE>


Fund will furnish the Underwriter with such conformed copies of such opinions,
certificates, letters and other documents as the Underwriter shall reasonably
request.

         6. Indemnification and Contribution.

         (a) Each of the Fund and the Investment Adviser, jointly and severally,
agrees to indemnify and hold harmless the Underwriter, each Selected Dealer, the
directors, officers, employees and agents of the Underwriter and each Selected
Dealer and each person, if any, who controls the Underwriter and each Selected
Dealer within the meaning of Section 15 of the 1933 Act or Section 20 of the
Exchange Act (collectively the "Underwriter Indemnified Persons"), from and
against any and all losses, claims, liabilities, expenses and damages
(including, but not limited to, any and all investigative, legal and other
expenses reasonably incurred in connection with, and any and all amounts paid in
settlement of, any action, suit or proceeding between any of the indemnified
parties and any indemnifying parties or between any indemnified party and any
third party, or otherwise, or any claim asserted), as and when incurred, to
which the Underwriter Indemnified Persons may become subject under the 1933 Act,
the Exchange Act or other Federal or state statutory law or regulation, at
common law or otherwise, insofar as such losses, claims, liabilities, expenses
or damages arise out of or are based on (i) any untrue statement or alleged
untrue statement of a material fact contained in any preliminary prospectus, the
Registration Statement or the Prospectus or any amendment or supplement to the
Registration Statement or the Prospectus, or in any application or other
document executed by or on behalf of the Fund or the Investment Adviser or based
on written information furnished by or on behalf of the Fund or the Investment
Adviser filed in any jurisdiction in order to qualify the Common Shares under
the securities laws thereof or filed with the Commission, (ii) the omission or
alleged omission to state in any such document a material fact required to be
stated in it or necessary to make the statements in it not misleading or (iii)
any breach by any of the indemnifying parties of any of their respective
representations, warranties and agreements contained in this Agreement; provided
that this indemnity agreement shall not apply to the extent that such loss,
claim, liability, expense or damage (1) arises from the sale of the Common
Shares pursuant to this Agreement and is based on an untrue statement or
omission or alleged untrue statement or omission made in reliance on and in
conformity with information relating to the Underwriter furnished in writing to
the Fund by the Underwriter expressly for inclusion in any document described in
clause (a)(i) above, or (2) is found in a final judgment by a court of competent
jurisdiction to have resulted from the bad faith, willful misconduct or
negligence of the Underwriter or any Selected Dealer or the breach by the
Underwriter or any Selected Dealer of its duties and obligations hereunder. This
indemnity agreement will be in addition to any liability that the Fund or
Investment Adviser might otherwise have.

         (b) The Underwriter agrees to indemnify and hold harmless the Fund, the
Investment Adviser, each person, if any, who controls the Fund, or the
Investment Adviser within the meaning of Section 15 of the 1933 Act or Section
20 of the Exchange Act, each director of the Fund, and the Investment Adviser
and each officer, employee and agent to the same extent as the foregoing
indemnity from the Fund and the Investment Adviser to the Underwriter, but only
insofar as losses, claims, liabilities, expenses or damages arise out of or are
based on any untrue statement or omission or alleged untrue statement or
omission made in reliance on and in conformity with information relating to the
Underwriter furnished in writing to the Fund by the Underwriter expressly for
use in any document described in clause (a)(i) above. This indemnity






                                       22
<PAGE>


will be in addition to any liability that the Underwriter might otherwise have;
provided, however, that in no case shall the Underwriter be liable or
responsible for any amount in excess of the commissions received by the
Underwriter hereunder.

         (c) Any party that proposes to assert the right to be indemnified under
this Section 6 will, promptly after receipt of notice of commencement of any
action against such party in respect of which a claim is to be made against an
indemnifying party or parties under this Section 6, notify each such
indemnifying party of the commencement of such action, enclosing a copy of all
papers served, but the omission so to notify such indemnifying party will not
relieve it from (i) any liability that it might have to any indemnified party
otherwise than under this Section 6 and (ii) any liability that it may have to
any indemnified party under the foregoing provisions of this Section 6 unless,
and only to the extent that, such omission results in the forfeiture of
substantive rights or defenses by the indemnifying party. If any such action is
brought against any indemnified party and it notifies the indemnifying party of
such commencement, the indemnifying party will be entitled to participate in
and, to the extent that it elects by delivering written notice to the
indemnified party promptly after receiving notice of the commencement of the
action from the indemnified party, jointly with any other indemnifying party
similarly notified, to assume the defense of the action, with counsel
satisfactory to the indemnified party, and after notice from the indemnifying
party to the indemnified party of its election to assume the defense, the
indemnifying party will not be liable to the indemnified party, for any legal or
other expenses except as provided below and except for the reasonable costs of
investigation subsequently incurred by the indemnified party in connection with
the defense. The indemnified party will have the right to employ its own counsel
in any such action, but the fees, expenses and other charges of such counsel
will be at the expense of such indemnified party unless (1) the employment of
counsel by the indemnified party has been authorized in writing by the
indemnifying party, (2) the indemnified party has reasonably concluded (based on
advice of counsel) that there may be legal defenses available to it or other
indemnified parties that are different from or in addition to those available to
the indemnifying party, (3) a conflict or potential conflict exists (based on
advice of counsel to the indemnified party) between the indemnified party and
the indemnifying party (in which case the indemnifying party will not have the
right to direct the defense of such action on behalf of the indemnified party)
or (4) the indemnifying party has not in fact employed counsel to assume the
defense of such action within a reasonable time after receiving notice of the
commencement of the action, in each of which cases the reasonable fees,
disbursements and other charges of counsel will be at the expense of the
indemnifying party or parties. It is understood that the indemnifying party or
parties shall not, in connection with any proceeding or related proceedings in
the same jurisdiction, be liable for the reasonable fees, disbursements and
other charges of more than one separate firm admitted to practice in such
jurisdiction at any one time for all such indemnified party or parties. All such
fees, disbursements and other charges will be reimbursed by the indemnifying
party promptly as they are incurred. An indemnifying party will not be liable
for any settlement of any action or claim effected without its written consent
(which consent will not be unreasonably withheld). No indemnifying party shall,
without the prior written consent of each indemnified party, settle or
compromise or consent to the entry of any judgment in any pending or threatened
claim, action or proceeding relating to the matters contemplated by this Section
6 (whether or not any indemnified party is a party thereto), unless such
settlement, compromise or consent includes an unconditional release of each
indemnified party from all liability arising or that may arise out of such
claim, action or proceeding. Notwithstanding any other provision of this Section
6(c), if at

                                       23
<PAGE>





any time an indemnified party shall have requested an indemnifying party to
reimburse the indemnified party for fees and expenses of counsel, such
indemnifying party agrees that it shall be liable for any settlement effected
without its written consent if (i) such settlement is entered into more than 45
days after receipt by such indemnifying party of the aforesaid request, and (ii)
such indemnifying party shall have received notice of the terms of such
settlement at least 30 days prior to such settlement being entered into.

         (d) In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in the foregoing
paragraphs of this Section 6 is applicable in accordance with its terms but for
any reason is held to be unavailable from the Fund, the Investment Adviser or
the Underwriter (including the Underwriter Indemnified Persons), the Fund, the
Investment Adviser, and the Underwriter will contribute to the total losses,
claims, liabilities, expenses and damages (including any investigative, legal
and other expenses reasonably incurred in connection with, and any amount paid
in settlement of, any action, suit or proceeding or any claim asserted, but
after deducting any contribution received by the Fund, or the Investment Adviser
from persons other than the Underwriter, such as persons who control the Fund
within the meaning of the 1933 Act, officers of the Fund who signed the
Registration Statement and directors of the Fund, who also may be liable for
contribution, or any contribution received by the Underwriter from persons other
than the Fund or the Investment Adviser) to which the indemnified party may be
subject in such proportion as shall be appropriate to reflect the relative
benefits received by the Fund and the Investment Adviser on the one hand and the
Underwriter on the other. The relative benefits received by the Fund and the
Investment Adviser, on the one hand, and the Underwriter, on the other, shall be
deemed to be in the same proportion as the total net proceeds from the offering
(before deducting expenses) received by the Fund bear to the total commissions
received by the Underwriter from the sale of the Common Shares on behalf of the
Fund. If, but only if, the allocation provided by the foregoing sentence is not
permitted by applicable law, the allocation of contribution shall be made in
such proportion as is appropriate to reflect not only the relative benefits
referred to in the foregoing sentence but also the relative fault of the Fund
and the Investment Adviser, on the one hand, and the Underwriter, on the other,
with respect to the action, statements or omissions which resulted in such loss,
claim, liability, expense or damage, or action in respect thereof, as well as
any other relevant equitable considerations with respect to such offering. Such
relative fault shall be determined by reference to whether the untrue or alleged
untrue statement of a material fact or omission or alleged omission to state a
material fact, or other conduct giving rise to liability, relates to information
supplied by the Fund or the Underwriter, the intent of the parties and their
relative knowledge, access to information and opportunity to correct or prevent
such statement or omission, and the conduct of the parties. The Fund, the
Investment Adviser, and the Underwriter agree that it would not be just and
equitable if contributions pursuant to this Section 6(d) were to be determined
by pro rata allocation or by any other method of allocation which does not take
into account the equitable considerations referred to herein. The amount paid or
payable by an indemnified party as a result of the loss, claim, liability,
expense or damage, or action in respect thereof, referred to above in this
Section 6(d) shall be deemed to include, for purposes of this Section 6(d), any
legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 6(d), the Underwriter shall not
be required to contribute any amount in excess of the commissions received by it
under this Agreement and no person found guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the 1933 Act) will be





                                       24
<PAGE>



entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this Section 6(d), any person who controls a
party to this Agreement within the meaning of the 1933 Act, will have the same
rights to contribution as that party, each officer, director, employee or agent
of the Underwriter will have the same rights to contribution as the Underwriter,
each officer, director, employee or agent of the Investment Adviser will have
the same rights to contribution as that party and each officer, director
employee or agent of the Fund Statement will have the same rights to
contribution as the Fund, subject in each case to the provisions hereof. Any
party entitled to contribution, promptly after receipt of notice of commencement
of any action against such party in respect of which a claim for contribution
may be made under this Section 6(d), will notify any such party or parties from
whom contribution may be sought, but the omission to notify will not relieve the
party or parties from whom contribution may be sought from any other obligation
it or they may have under this Section 6(d). Except for a settlement entered
into pursuant to the last sentence of Section 6(c) hereof, no party will be
liable for contribution with respect to any action or claim settled without its
written consent (which consent will not be unreasonably withheld).

         (e) For purposes of this Agreement, the Fund and the Investment Adviser
agree that the only written information relating to the Underwriter furnished in
writing to the Fund by the Underwriter expressly for inclusion in the
preliminary prospectus, Registration Statement or Prospectus is the address of
the Underwriter set forth in the second paragraph under the caption
"Underwriting" and the identification of counsel to the Underwriter under the
caption "Legal Matters" in the preliminary prospectus and Prospectus.

         7. Representations and Agreements to Survive Delivery. The indemnity
and contribution agreements contained in Section 6 and the representations and
warranties of the Fund, the Investment Adviser and the Underwriter contained in
this Agreement shall remain operative and in full force and effect regardless of
(i) any investigation made by or on behalf of the Fund, the Investment Adviser,
or the Underwriter, as applicable, (ii) acceptance of the Common Shares and
payment therefor or (iii) any termination of this Agreement.

         8. Termination.

         (a) The Underwriter shall have the right by giving written notice as
hereinafter specified at any time to terminate this Agreement if (i) any
material adverse change, or any development that is reasonably expected to cause
material adverse change, in the business, financial condition or results of
operations of the Fund or the Investment Adviser has occurred which, in the
judgment of such Underwriter, materially impairs the investment quality of the
Common Shares, (ii) the Fund or the Investment Adviser shall have failed,
refused or been unable to perform any agreement on its part to be performed
hereunder, (iii) any other condition of the Underwriter's obligations hereunder
is not fulfilled, (iv) any suspension or limitation of trading in the Common
Shares on the CHX shall have occurred, (v) any banking moratorium shall have
been declared by Federal or New York authorities or (vi) an outbreak or material
escalation of major hostilities in which the United States is involved, a
declaration of war by Congress, any other substantial national or international
calamity or any other event or occurrence of a similar character shall have
occurred since the execution of this Agreement that, in the judgment of the
Underwriter, makes it impractical or inadvisable to proceed with the completion
of the sale of and payment for the Common Shares to be sold by the Underwriter
on





                                       25
<PAGE>



behalf of the Fund. Any such termination shall be without liability of any party
to any other party except that the provisions of Section 3(i), Section 4(i),
Section 6 and Section 7 hereof shall remain in full force and effect
notwithstanding such termination.

         (b) The Fund shall have the right, by giving thirty days advance
written notice, to terminate this Agreement in its sole discretion. The Fund
shall further have the right, by giving three days' written notice to the
Underwriter, to terminate this Agreement in the event any action or proceeding
shall be instituted or threatened against the Underwriter, either in any court
of competent jurisdiction, before the Commission, the NASD or any state
securities administrator concerning its activities as a broker or dealer that
would prevent the Underwriter from acting as such, or if a petition in
bankruptcy or insolvency or for reorganization or for the appointment of a
receiver or trustee of the Underwriter's assets is filed or if the Underwriter
makes an assignment for the benefit of its creditors. Any such termination shall
be without liability of any party to any other party except that the provisions
of Section 3(i), Section 4(i), Section 6 and Section 7 hereof shall remain in
full force and effect notwithstanding such termination.

         (c) In addition to its rights under Section 8(a), the Underwriter shall
have the right, by giving thirty days advance written notice as hereinafter
specified, to terminate this Agreement in its sole discretion. Any such
termination shall be without liability of any party to any other party except
that the provisions of Section 3(i), Section 4(i), Section 6 and Section 7
hereof shall remain in full force and effect notwithstanding such termination.

         (d) This Agreement shall remain in full force and effect unless
terminated pursuant to Sections 8(a), (b) or (c) above or otherwise by mutual
agreement of the parties; provided that any such termination by mutual agreement
shall in all cases be deemed to provide that Section 3(i), Section 4(i), Section
6 and Section 7 shall remain in full force and effect.

         (e) Any termination of this Agreement shall be effective on the date
specified in such notice of termination; provided that such termination shall
not be effective until the close of business on the date of receipt of such
notice by the Underwriter or the Fund, as the case may be.

         9. Notices. All notices or communications hereunder shall be in writing
and if sent to the Underwriter shall be mailed, delivered, telexed or telecopied
and confirmed to the Underwriter at Broker Dealer Financial Services Corp., 8800
NW 62nd Avenue, P.O. Box 6240, Johnston, Iowa 50131-6240, facsimile no. (515)
286-2972, attention: E.B. Wright, or if sent to the Fund or the Investment
Adviser, shall be mailed, delivered, telexed or telecopied and confirmed to the
Fund or the Investment Adviser at 711 West Thirteen Mile Road, Madison Heights,
MI 48071, facsimile no. (248)583-4880, attention: Kenneth S. Janke. Each party
to this Agreement may change such address for notices by sending to the parties
to this Agreement written notice of a new address for such purpose.

         10. Parties. This Agreement shall inure to the benefit of and be
binding upon the Fund, the Investment Adviser, and the Underwriter (including,
with respect to Section 6, the Underwriter Indemnified Persons) and their
respective successors and the controlling persons, officers and directors
referred to in Section 6 hereof, and no other person will have any right or
obligation hereunder.




                                       26
<PAGE>



         11. Adjustments for Stock Splits, Etc. The parties acknowledge and
agree that all share related numbers contained in this Agreement (including,
without limitation, the Maximum Amount and the Sales Price) shall be adjusted to
take into account any stock split effected or stock dividend with respect to the
Common Shares.

         12. Entire Agreement. This Agreement constitutes the entire agreement
and supersedes all other prior and contemporaneous agreements and undertakings,
both written and oral, among the parties hereto with regard to the subject
matter hereof.

         13. Applicable Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF IOWA WITHOUT REGARD TO ANY
PRINCIPLES OF CONFLICTS OF LAWS THEREOF.

         14. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

         15. Business Days. For purposes of this Agreement, a "business day"
shall refer to any day on which the Investment Adviser and the New York Stock
Exchange are open for business and the Fedwire service of the Federal Reserve
Board is operational.




                                       27
<PAGE>



         If the foregoing correctly sets forth the understanding between the
Fund, the Investment Adviser, and the Underwriter, please so indicate in the
space provided below for that purpose, whereupon this letter shall constitute a
binding agreement among the Fund, the Investment Adviser, and the Underwriter.

                                Very truly yours,


                                NAIC GROWTH FUND, INC.


                                         By:___________________________
                                         Name:_________________________
                                         Title:__________________________


                                GROWTH FUND ADVISOR, INC.


                                         By:___________________________
                                         Name:________________________
                                         Title:_________________________


ACCEPTED as of the date first above written
BROKER DEALER FINANCIAL SERVICES CORP.


         By:________________________
         Name:_____________________
         Title:______________________



                                       28
<PAGE>



                                    EXHIBIT A
                        Form of Selected Dealer Agreement



                                       29
<PAGE>



                                    EXHIBIT B
                         Form of Subscription Agreement





                                       30





</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.K
<SEQUENCE>4
<FILENAME>k74079a1exv99wk.txt
<DESCRIPTION>AMENDED FORM OF ESCROW AGREEMENT
<TEXT>
<PAGE>
                                                                       EXHIBIT k



                                ESCROW AGREEMENT


         This Escrow Agreement (the "Agreement") is entered into this ____ day
of __________, 2003, between NAIC Growth Fund, Inc., a Maryland corporation (the
"Fund"), Broker Dealer Financial Services Corp., an Iowa corporation (the
"Underwriter"), and Standard Federal Bank N.A., a national banking association
(the "Escrow Agent").



                                    RECITALS


         A. The Fund proposes to issue and sell through the Underwriter up to
5,000,000 shares of its common stock, par value $0.001 per share (the "Shares")
in accordance with the terms of an Underwriting Agreement between the Fund, the
Underwriter and Growth Fund Adviser, Inc. dated _________, 2003 (the
"Underwriting Agreement").


         B. The Fund and the Underwriter desire that the payments received from
prospective purchasers in the offering be placed in escrow until released to the
Fund pursuant to the terms of this Agreement.

         THEREFORE, it is hereby agreed as follows:


1.       Each person desiring to purchase Shares in the offering ("Purchaser")
         will be required to send the Fund a subscription agreement to subscribe
         for such Shares ("Subscription Agreement") and a check payable to the
         Escrow Agent in the amount of the purchase price, including the
         applicable sales charge, for the Shares the Purchaser desires to
         purchase (the "Subscription Payment").


2.       The Fund will deposit any Subscription Payment it receives with the
         Escrow Agent and will provide the Escrow Agent with the following
         information, with a copy to the Underwriter, with respect to each
         Subscription Agreement it receives:

         (a)      The name and address of the Purchaser,

         (b)      The date of the Subscription Agreement received by the Fund;
                  and

         (c)      The dollar amount of the Subscription Payment relating to such
                  Subscription Agreement.

3.       The Escrow Agent shall provide the Fund with a report by [time] on the
         first business day following each Determination Date (as hereafter
         defined). Each report shall be prepared as of 5:30 p.m., local time, of
         the applicable Determination Date and shall set forth the name of each
         Purchaser from whom the Escrow Agent has received previously unreported
         cleared funds and the amount of previously unreported cleared funds for
         each such Purchaser, as of such date and time. The Fund will provide
         the Underwriter with a copy of each such report. For purposes of this
         Agreement, a "business day" shall mean any day on which the Growth Fund
         Advisor, Inc. and the New York Stock Exchange are open for business and
         the Fedwire service of the Federal Reserve Board is operational,


<PAGE>


         and "Determination Date" means Thursday of each week, or if any
         Thursday is not a business day, the business day immediately preceding
         such Thursday.

4.       The Escrow Agent shall hold any Subscription Payments and related
         investment earnings which it receives in escrow, subject to the
         provisions of this Agreement. The Escrow Agent shall provide the Fund
         with a monthly statement of receipts and disbursements made pursuant to
         this Agreement. The Fund shall provide the Underwriter with a copy of
         each such statement.

5.       The Fund and the Underwriter have each reserved the right, in their
         sole discretion, to accept or to not accept a Subscription Agreement.
         If for any reason a Subscription Agreement is not accepted by either
         the Fund or the Underwriter, the Fund will instruct the Escrow Agent in
         writing, with a copy to the Underwriter, to refund the related
         Subscription Payment to the applicable Purchaser, without interest. The
         Escrow Agent shall refund such Subscription Payments within five
         business days of receiving such written instruction.


6.       Upon acceptance of a Subscription Agreement by the Fund and the
         Underwriter and sale by the Fund of the related Shares to the
         applicable Purchaser, the Fund shall notify the Escrow Agent of such
         acceptance, the settlement date for the sale of such Shares, the amount
         of the sales charge payable from the Subscription Payment to the
         Underwriter with respect to such Shares, and the net amount of the
         Subscription Payment payable to the Fund. The Fund shall provide the
         Underwriter with a copy of each such notice. The Escrow Agent shall, on
         the settlement date, deposit the net amount of the Subscription Payment
         payable to the Fund to the Fund's account no. ___________________ with
         the Escrow Agent and shall pay the amount of the related sales charge
         to the Underwriter no later than the close of business on the first
         business day following such settlement date.


7.       The duties and obligations of the Escrow Agent hereunder shall be
         determined solely by the express provisions of this Agreement. The
         Escrow Agent shall not be liable or responsible for any act done or
         step taken or omitted by it or any mistake of fact or law or for
         anything which it may do or refrain from doing, except for its gross
         negligence, willful misconduct or willful default in the performance of
         any obligation imposed upon it hereunder.

8.       The Escrow Agent shall not be liable to the Underwriter or to any other
         person for acting upon any written instruction which it receives from
         the Fund pursuant to this Agreement. The Escrow Agent is authorized to
         act in reliance upon the sufficiency, correctness, genuineness or
         validity of any instrument or document or other writing submitted to it
         hereunder and shall have no liability with respect to such matters.

9.       Any property held by the Escrow Agent under this Agreement shall be
         held uninvested.

10.      The Escrow Agent is not obligated to render any statements or notices
         of non-performance hereunder to any party to this Agreement but may in
         its discretion inform any party or its authorized representative of,
         any matters pertaining to this Agreement.


                                       2


<PAGE>


11.      The Escrow Agent's fee as set forth in the attached fee schedule shall
         be paid by the Fund. The Fund agrees to indemnify and hold harmless the
         Escrow Agent from any costs, damages, expenses or claims, including
         attorney's fees, which the Escrow Agent may incur or sustain as a
         result of or arising out of this Agreement or the Escrow Agent's duties
         relating thereto and will pay them on demand.

12.      The Escrow Agent shall be reimbursed by the Fund for all disbursements
         and expenses made or incurred hereunder and if it shall be required to
         perform extraordinary services not contemplated herein, it shall
         receive reasonable additional compensation therefor. The Escrow Agent
         shall not be required to institute or maintain litigation unless
         indemnified to its satisfaction for its counsel fees, costs,
         disbursements and all other costs, expenses and liabilities to which it
         may in its judgment be subjected in connection with such action.

13.      In the event of any disagreement or the presentation of adverse claims
         or demands in connection with the property deposited pursuant to this
         Agreement, the Escrow Agent shall, at its option, be entitled to refuse
         to comply with any such claims or demands during the continuance of
         such disagreement and may refrain from delivering any item affected
         thereby, and in so doing, the Escrow Agent shall not become liable to
         Fund or Underwriter, or either of them, or to any other person, due to
         its failure to comply with any such adverse claim or demand. The Escrow
         Agent shall be entitled to continue, without liability, to refrain and
         refuse to act:

         (a)      Until all the rights of the adverse claimants have been
                  finally adjudicated by a court having jurisdiction of the
                  parties and the items affected thereby, after which time the
                  Escrow Agent shall be entitled to act in conformity with such
                  adjudication; or

         (b)      Until all differences shall have been adjusted by agreement
                  and the Escrow Agent shall have been notified thereof and
                  shall have been directed in writing signed jointly or in
                  counterpart by Fund and Underwriter and by all persons making
                  adverse claims or demands, at which time the Escrow Agent
                  shall be protected in acting in compliance therewith.

         The parties agree that the Escrow Agent may seek adjudication of any
         adverse claim or demands in either the Circuit Court for the County of
         Oakland, Michigan, or the United States Federal District Court for the
         Eastern District of Michigan, Southern Division, agree to the
         jurisdiction of either of said Courts over their persons as well as the
         property deposited pursuant to this Agreement, waive personal service
         of any process, and agree that service of process by certified or
         registered mail, return receipt requested, to the address set forth in
         Section 16 below shall constitute adequate service.

14.      The entire agreement of the parties with respect to the subject matter
         hereof is contained herein, provided that nothing contained herein
         shall be deemed to supersede, limit or modify the Underwriting
         Agreement. Any change in terms or conditions herein may only be made in
         writing signed by all parties hereto. The Escrow Agent shall not be
         charged with knowledge of any fact, including but not limited to
         performance or non-performance


                                       3

<PAGE>


         of any condition, unless it has actually received written notice
         thereof from one of the parties pursuant to Section 16, such notice
         clearly referring to this Agreement.

15.      The Fund may designate another person to take any actions which are
         required or permitted to be taken by the Fund under this Agreement. Any
         such designation shall be in writing and shall be provided to the other
         parties to this Agreement pursuant to Section 16. Such parties may rely
         upon such designation until they receive written notice to the contrary
         from the Fund pursuant to Section 16.

16.      All notices or communications hereunder shall be in writing and shall
         be mailed, delivered, or telecopied and confirmed as follows. Each
         party to this Agreement may change such address for notices by sending
         to the parties to this Agreement written notice of a new address for
         such purpose.

         If to the Underwriter:

         Broker Dealer Financial Services Corp.
         8800 NW 62nd Avenue
         P.O. Box 6240
         Johnston, Iowa 50131-6240
         Attention: E.B. Wright
         Facsimile no. (515) 286-2972

         If to the Fund:

         NAIC Growth Fund, Inc.
         (address for mail)
         P.O. Box 220
         Royal Oak, Michigan 48068

         (address for delivery)
         711 West Thirteen Mile Road
         Madison Heights, Michigan 48071

         Attention: Kenneth S. Janke
         Facsimile no. (248) 583-4880

         If to the Escrow Agent:

         Standard Federal Bank N.A.


17.      This Agreement shall be deemed to have been made under and shall be
         governed by the laws of the State of Michigan in all respects,
         including matters of construction, validity and performance.


                                       4

<PAGE>


18.      The Escrow Agent may resign as such following the giving of thirty days
         prior written notice to the other parties hereto. Similarly, the Escrow
         Agent may be removed and replaced following the giving of thirty days
         prior written notice to the Escrow Agent by the other parties hereto.
         In either event, the duties of the Escrow Agent shall terminate thirty
         days after the date of such notice (or as of such earlier date as may
         be mutually agreeable); and the Escrow Agent shall deliver the balance
         of the property then in its possession to a successor escrow the Escrow
         Agent as shall be appointed by the other parties hereto as evidenced by
         a written notice filed with the Escrow Agent, or if no successor Escrow
         Agent has been so appointed, the then acting Escrow Agent shall deliver
         the balance of the escrow deposit then in its possession to the
         applicable Purchasers as their interests may appear.

19.      No waiver of any past agreement or condition hereunder by any party
         hereto shall operate as a continuing waiver of any agreement or
         condition under this Agreement. Each party shall have the right to
         waive and/or nullify, in writing, any condition or term of this
         Agreement which is for its or his benefit.

20.      If any provision or clause in this Agreement or application thereof to
         any person or circumstances is held invalid or unenforceable, such
         invalidity or unenforceability shall not affect other provisions or
         applications of this Agreement which can be given effect without the
         invalid or unenforceable provision or application, and to this end the
         provisions of this Agreement are declared to be severable.



                                 NAIC GROWTH FUND, INC.

                                 By: ______________________________________

                                 Its: ______________________________________


                                 BROKER DEALER FINANCIAL SERVICES CORP.

                                 By: ______________________________________

                                 Its: ______________________________________


                                 STANDARD FEDERAL BANK N.A.

                                 By: ______________________________________

                                 Its: ______________________________________


                                       5

</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
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