UNDERWRITING AND DISTRIBUTION AGREEMENT
THIS AGREEMENT, made this 7th day of December 1995, by and between Fortis
Growth Fund, Inc. (formerly AMEV Growth Fund, Inc.), a Minnesota corporation
(the "Fund"), for and on behalf of each class of the Fund's shares (each such
class is referred to hereinafter as a "Class") and Fortis Investors, Inc.
(formerly AMEV Investors, Inc.), a Minnesota corporation ("Investors"),
WITNESSETH:
1. UNDERWRITING SERVICES.
The Fund on behalf of each Class hereby engages Investors, and Investors
hereby agrees to act, as principal underwriter for each Class in connection with
the sale and distribution of the shares of each Class of the Fund to the public,
either through dealers or otherwise. Investors agrees to offer such shares for
sale at all times when such shares are available for sale and may lawfully be
offered for sale and sold.
As used herein, "Classes" of the Fund is defined as Class A, Class B, Class
C, Class H and Class Z shares of the Fund and any other classes which may
hereinafter be created by the Fund's Board of Directors.
2. SALE OF FUND SHARES.
The shares of each Class are to be sold only on the following terms:
(a) All subscriptions, offers or sales shall be subject to
acceptance or rejection by the Fund. Any offer or sale shall be conclusively
presumed to have been accepted by the Fund if the Fund shall fail to notify
Investors of the rejection of such offer or sale prior to the computation of
the net asset value of the applicable Class's shares next following receipt
by the Fund
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of notice of such offer or sale.
(b) No share of a Class shall be sold by Investors (i) for any amount
less than the net asset value of such share, computed as provided in the Bylaws
of the Fund, or (ii) for any consideration other than cash, or, pursuant to any
exchange privilege provided for by such Class's currently effective Prospectus
or Statement of Additional Information, shares of the corresponding Class of
shares of any other investment company for which Investors acts as an
underwriter. In addition, except as provided below or in the Class's currently
effective Prospectus or Statement of Additional Information, all shares of the
Fund that are sold by Investors shall be sold at the applicable public offering
price, as hereinafter defined, provided that, in the case of sales of such
shares to or through bona fide dealers in securities, Investors may allow, or
sell at, a discount from said public offering price to such dealers, which
discount shall be no greater than the "sales load" hereinafter referred to.
(c) The public offering price of the shares of the Fund shall be the
current net asset value thereof (computed as provided in the Bylaws of the Fund)
plus the applicable "sales load" or loading charge, if any, which shall be such
percentage of the public offering price, computed to the nearest cent, as may be
agreed upon by the Fund and Investors and specifically approved by the Board of
Directors of the Fund, provided that no schedule of sales loads shall be
effective until set forth in a prospectus of the Fund meeting the requirements
of the Securities Act of 1933. Said sales loads may be graduated on a scale
based on the dollar amount of shares sold.
(d) In connection with certain sales of shares, a contingent deferred
sales charge will be imposed in the event of a redemption transaction occurring
within a certain period of time following such a purchase, as described in each
Class's currently effective Prospectus and Statement of Additional Information.
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(e) The front-end sales charge, if any, for any Class may, at the
discretion of the Fund and Investors, be increased, reduced or eliminated as
permitted by the Investment Company Act of 1940, and the rules and regulations
thereunder, as they may be amended from time to time, or as set forth elsewhere
in this Agreement, provided that, if necessary, such increase, reduction or
elimination shall be set forth in the Prospectus for such Class, and provided
that the Fund shall in no event receive for any shares sold an amount less than
the net asset value thereof. In addition, any contingent deferred sales charge
for any Class may, at the discretion of the Fund and Investors, be increased,
reduced or eliminated in accordance with the terms of an exemptive order
received from, or any applicable rule or rules promulgated by, the Securities
and Exchange Commission by the Fund, provided such increase, reduction or
elimination shall be set forth in the Prospectus for such Class.
(f) Investors may decline to offer for sale or sell shares of the
Fund in an amount the cumulative public offering price of which is less than
$500.00 or such smaller amount as it may from time to time fix.
3. INVESTMENT OF DIVIDEND AND DISTRIBUTIONS.
The Fund may extend to its shareholders the right to purchase shares issued
by each Class of the Fund at the net asset value thereof with the proceeds of
any dividend or capital gain distribution paid or payable by the Fund (or any
other fund for which Investors serves as underwriter) to its shareholders.
4. REGISTRATION OF SHARES.
The Fund agrees to make prompt and reasonable efforts to effect and keep in
effect, at its own expense, the registration or qualification of each Class's
shares for sale in such jurisdictions as the Fund may designate.
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5. INFORMATION TO BE FURNISHED INVESTORS.
The Fund agrees that it will furnish Investors with such information with
respect to the affairs and accounts of the Fund (and each Class thereof) as
Investors may from time to time reasonably require, and further agrees that
Investors, at all reasonable times, shall be permitted to inspect the books and
records of the Fund.
6. ALLOCATION OF EXPENSES.
During the period of this contract, the Fund shall pay or cause to be paid
all expenses, costs and fees incurred by the Fund which are not assumed by
Investors or Fortis Advisers, Inc. ("Advisers"). Investors agrees to provide,
and shall pay costs which it incurs in connection with providing personal,
continuing services to shareholders (such costs are referred to as "Shareholder
Servicing Costs"). Shareholder Servicing Costs include all expenses of
Investors incurred in connection with providing administrative or accounting
services to shareholders of each Class, including, but not limited to, an
allocation of Investor's overhead and payments made to persons, including
employees of Investors, who respond to inquiries of shareholders regarding their
ownership of Class shares, or who provide other administrative or accounting
services not otherwise required to be provided by the applicable Funds'
investment adviser or transfer agent. Notwithstanding the foregoing, if the
National Association of Securities Dealers, Inc. ("NASD") adopts a definition of
"service fee" for purposes of Section 26(d) of the NASD Rules of Fair Practice
that differs from a definition of Shareholder Servicing Costs in this paragraph,
or if the NASD adopts a related definition intended to define the same concept,
the definition of Shareholder Servicing Costs in this paragraph shall be
automatically amended, without further action of the parties, to conform to such
NASD definition. Investors shall also pay all costs of distributing the shares
of each Class ("Distribution Expenses"). Distribution expenses include, but are
not limited to, initial and ongoing sales
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compensation (in addition to sales loads) paid to registered representatives of
Investors and to other broker-dealers and participating financial institutions;
expenses incurred in the printing of prospectuses, statements of additional
information and reports used for sales purposes; expenses of preparation and
distribution of sales literature; expenses of advertising of any type; an
allocation of Investors' overhead; payments to and expenses of persons who
provide support services in connection with the distribution of Fund shares; and
other distribution-related expenses. Advisers, rather than Investors, may bear
the expenses referred to in this paragraph, but Investors shall be primarily
liable for such expenses until paid.
7. COMPENSATION TO INVESTORS.
As compensation for all of its services provided and its costs assumed
under this contract, Investors shall receive the following forms of and amounts
of compensation:
(a) Investors shall be entitled to receive and retain the
front-end sales charge (if any) imposed in connection with sales of each
Class, as set forth in the applicable Class's current Prospectus. Up to the
entire amount of the front-end sales charge (if any) with respect to each
applicable Class may be reallowed by Investors to broker-dealers and
participating financial institutions in connection with their sale of Fund
shares. The amount of the front-end sales charge (if any) may be retained or
deducted by Investors from any sums received by it in payment for shares so
sold. If such amount is not deducted by Investors from such payments, such
amount shall be paid to Investors by the Fund not later than five business
days after the close of any month during which any such sales were made by
Investors and payment therefor received by the Fund.
(b) Investors shall be entitled to receive any contingent deferred
sales charge imposed
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in connection with any redemption of applicable Class shares, as set forth in
each applicable Class's current Prospectus.
(c) Investors shall be entitled to receive the following 12b-1 fees,
payable under the Plan of Distribution adopted by each Class in accordance with
Rule 12b-1 under the Investment Company Act of 1940 (the "Plan"):
(i) CLASS A SHARES: Class A shares of the Fund are obligated to
pay Investors, the principal underwriter of the Fund's shares, a total fee in
connection with distribution-related services provided with respect to Class A
and in connection with the servicing of shareholder accounts of said Class A.
This fee shall be calculated and payable monthly at an annual rate of .25% of
the value of the Class's average daily net assets. All or a portion of such
total fee may be payable as a Distribution Fee, and all or any portion of such
total fee may be payable as a Shareholder Servicing Fee, as determined from time
to time by the Fund's Board of Directors. Until further action by the Board of
Directors, all of such fee shall be designated and payable as a Distribution
Fee.
(ii) CLASS B, CLASS C AND CLASS H SHARES: Class B, Class C and
Class H shares of the Fund are each obligated to pay Investors a total fee in
connection with the distribution-related services and servicing of shareholder
accounts provided for their respective Class. The total fee paid by each Class
shall be calculated and payable monthly, at an annual rate of 1.00% of the value
of the respective Class's average daily net assets. All or any portion of such
total fee may be payable as a Distribution Fee, and all or any portion of such
total fee may be payable as a Shareholder Servicing Fee, as determined from time
to time by the Fund's Board of Directors. Until further action by the Board,
75% of such fee (.75 of 1.00%) shall be designated and payable as a Distribution
Fee and 25% of such fee (.25 of 1.00%) shall be designated and payable as a
Shareholder Servicing Fee.
(iii) CLASS Z SHARES: Class Z shares of the Fund are not
covered by the Plan
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and thus are not obligated under the Plan to pay Investors any fee in connection
with distribution-related services provided with respect to Class Z or in
connection with the servicing of shareholder accounts of said Class Z.
(iv) FUTURE CLASSES: Upon the creation of any new classes of
shares for the Fund, the respective levels of sales charges and 12b-1 fees shall
be determined by the Board of Directors of the Fund, subject to any necessary
shareholder approval and only in accordance with any applicable rule or rules
promulgated by the Securities and Exchange Commission and/or the National
Association of Securities Dealers, Inc. All or any portion of the 12b-1 fees
referred to in this paragraph may be payable as a Distribution Fee, and all or
any portion of such 12b-1 fees may be payable as a Shareholder Servicing Fee, as
determined from time to time by the Fund's Board of Directors.
(v) OTHER INFORMATION: Average daily net assets shall be
computed in accordance with the Prospectus of each applicable Class. Amounts
payable to Investors under the Plan may exceed or be less than Investor's actual
distribution expenses and shareholder servicing costs. In the event such
distribution expenses and/or shareholder servicing expenses exceed amounts
payable to Investors under the Plan, Investors shall not be entitled to
reimbursement from the Fund.
(d) In each year during which this contract remains in effect,
Investors will prepare and furnish to the Board of Directors of the Fund, and
the Board will review, on a quarterly basis written reports complying with the
requirements of Rule 12b-1 under the Investment Company Act of 1940 (the "1940
Act") that set forth the amounts expended under this contract and the Plan and
the purposes for which those expenditures were made.
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8. LIMITATION OF INVESTORS' AUTHORITY.
Investors shall be deemed to be an independent contractor and, except as
specifically provided or authorized herein, shall have no authority to act for
or represent the Fund. In connection with its role as underwriter of Fund
shares, Investors shall at all times be deemed an agent of the Fund and shall
sell Fund shares to purchasers thereof as agent and not as principal.
9. SUBSCRIPTION FOR SHARES-REFUND FOR CANCELED ORDERS
Investors shall effect the subscription of Fund shares as agent for the
Fund. In the event that an order for the purchase of shares of the Fund is
placed with Investors by a customer or dealer and subsequently canceled,
Investors, on behalf of such customer or dealer, shall forthwith cancel the
subscription for such shares entered on the books of the Fund, and, if Investors
has paid the Fund for such shares, shall be entitled to receive from the Fund in
refund of such payment the lesser of:
(a) the consideration received by the Fund for said shares; or
(b) the net asset value of such shares at the time of cancellation by
Investors.
10. INDEMNIFICATION OF THE FUND.
Investors agrees to indemnify the Fund against any and all litigation and
other legal proceedings of any kind or nature and against any liability,
judgment, cost or penalty imposed as a result of such litigation or proceedings
in any way arising out of or in connection with the sale or distribution of the
shares of the Fund by Investors. In the event of the threat or institution of
any such litigation or legal proceedings against the Fund, Investors shall
defend such action on behalf of the Fund at its own expense, and shall pay any
such liability, judgment, cost or penalty resulting therefrom, whether imposed
by legal authority or agreed upon by way of compromise and settlement; provided,
however, Investors shall not be required to pay or reimburse the Fund for any
liability, judgment, cost or penalty incurred as a result of information
supplied by, or as the result of the omission to supply information
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by, the Fund to Investors, or to Investors by a director, officer, or employee
of the Fund who is not an interested person of Investors, unless the information
so supplied or omitted was available to Investors or the Fund's investment
adviser without recourse to the Fund or any such interested person of the Fund.
11. FREEDOM TO DEAL WITH THIRD PARTIES.
Investors shall be free to render to others services of a nature either
similar to or different from those rendered under this contract, except such as
may impair its performance of the services and duties to be rendered by it
hereunder.
12. EFFECTIVE DATE, DURATION AND TERMINATION OF AGREEMENT
(a) This Agreement shall be effective as to Fortis Growth Fund, Inc.
and each Class thereof on January 1, 1996. Unless sooner terminated as
hereinafter provided, this Agreement shall continue in effect only so long as
such continuance is specifically approved at least annually (a) by the Board of
Directors of the Fund, or with respect to a particular Class by the vote of the
holders of a majority of the outstanding voting securities of such Class, and
(b) by a majority of the directors who are not interested persons of Investors
or of the Fund, cast in person at a meeting called for the purpose of voting on
such approval; provided that, if a majority of the outstanding voting securities
of any of the Classes approves this Agreement, this Agreement shall continue in
effect with respect to such approving Class whether or not the shareholders of
any other Class of the Fund approve this Agreement.
(b) This Agreement may be terminated at any time without the payment
of any penalty by the vote of the Board of Directors of the Fund or by
Investors, upon sixty (60) days' written notice to the other party. This
Agreement may be terminated with respect to a particular Class at any time
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without the payment of any penalty by the vote of the holders of a majority of
the outstanding voting securities of such Class, upon sixty (60) days' written
notice to Investors.
(c) This Agreement shall automatically terminate in the event of its
"assignment" (as defined by the provisions of the 1940 Act).
(d) Wherever referred to in this Agreement, the vote or approval of
the holders of a majority of the outstanding voting securities of a Class or the
Fund shall mean the vote of 67% or more of such securities if the holders of
more than 50% of such securities are present in person or by proxy or the vote
of more than 50% of such securities, whichever is less.
13. AMENDMENTS TO AGREEMENT.
No material amendment to this Agreement shall be effective until approved
by a vote of the Board of Directors of the Fund, including a majority of the
Directors who are not interested persons of the Fund and who have no direct or
indirect financial interest in this Agreement, cast in person at a meeting
called for the purpose of voting on such amendment. Additionally, no amendment
to this Agreement that materially increases the distribution fee and/or
shareholder servicing fee payable by any Class hereunder shall be effective
until any necessary amendment to the applicable Rule 12b-1 Plan has been
approved by a vote of the holders of a majority of the outstanding voting
securities of the applicable Class and approved by the Fund's Board of Directors
as required under Rule 12b-1 under the Investment Company Act of 1940.
14. NOTICES.
Any notice under this Agreement shall be in writing, addressed, delivered
or mailed, postage prepaid to the other party at such address as such other
party may designate in writing for receipt of such notice.
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IN WITNESS WHEREOF, the Fund and Investors have caused this Agreement to be
executed by their duly authorized officers as of the day and year first above
written.
FORTIS GROWTH FUND, INC
By: _____________________________
Xxxx X. Xxxxxxxx
Its President
FORTIS INVESTORS, INC.
By: ____________________________
Xxxx X. Xxxxxxxx
Its President
