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EXHIBIT (h)(3)
ADMINISTRATION AGREEMENT
October ___, 2000
ALPS Mutual Funds Services, Inc.
370 Seventeenth Street
Suite 3100
Denver, Colorado 80202
Dear Sirs:
Financial Investors Variable Insurance Trust, a Delaware business trust
(the "Trust"), herewith confirms its agreement with ALPS Mutual Funds Services,
Inc. ("ALPS") as follows:
WHEREAS, the Trust desires to employ the capital of its First Horizon Capital
Appreciation Portfolio and First Horizon Growth & Income Portfolio and any other
portfolio to be offered by the Trust designated by the parties hereto and made
subject to this Agreement (each, a "Portfolio" and collectively, the
"Portfolios") by investing and reinvesting the same in investments of the type
and in accordance with the limitations specified within each Portfolio's
Prospectus and Statement of Additional Information as from time to time in
effect, copies of which have been or will be submitted to ALPS, and resolutions
of the Trust's Board of Trustees;
WHEREAS, the Trust desires to employ ALPS as its administrator for the Funds;
NOW THEREFORE, in consideration of the mutual covenants set forth herein, the
parties hereto agree as follows:
1. Services as Administrator
Subject to the direction and control of the Board of Trustees of the
Trust, ALPS will: (a) assist in maintaining office facilities (which may be in
the offices of ALPS or a corporate affiliate but shall be in such location as
the Trust and ALPS shall reasonably determine); (b) furnish clerical services
and stationery and office supplies; (c) compile data for and prepare with
respect to the Funds timely Notices to the Securities and Exchange Commission
required pursuant to Rule 24f-2 under the Investment Company Act of 1940 (the
"1940 Act") and Semi-Annual Reports on Form N-SAR; (d) prepare compliance
filings pursuant to state securities laws with the advice of the Trust's
counsel; (e) assist to the extent requested by the Portfolios with the
preparation of Annual and Semi-Annual Reports to the Portfolios' shareholders
and Registration Statements for the Portfolios (on Form N-1A or any replacement
therefor); (f) monitor the Portfolios' expense accruals and pay all expenses on
proper authorization from the Portfolios; (g) monitor the Portfolios' status as
a regulated investment company under Subchapter M of the Internal Revenue Code
of 1986, as amended from time to time; (h) maintain the Trust's fidelity bonds
as required by the 1940 Act; (i) on a monthly basis, monitor compliance with the
policies and limitations of each Portfolio as set forth in the Prospectus,
Statement of Additional Information, Code of Regulations and Declaration
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of Trust; and (j) generally assist in the Portfolio's operations; (k) perform
fund accounting and pricing as set out in the "Bookkeeping and Pricing
Agreement"; (l) perform Transfer Agency as set out in the "Transfer Agency
Agreement" and 800-line servicing; (m) coordinate the external audit and tax
work performed by an independent accounting firm determined by ALPS; (n)
coordinate the printing of the Prospectus, Semi-Annual Report, Annual Report,
and the Statement of Additional Information for existing shareholders; and (o)
act as principal underwriter and distributor of the Portfolios' securities
pursuant to a Distribution Agreement.
In compliance with the requirements of Rule 31a-3 under the 1940 Act,
ALPS hereby agrees that all records which it maintains for each Portfolio are
the property of the Trust and further agrees to surrender promptly to the Trust
any of such records upon the Trust's request. ALPS further agrees to preserve
for the periods prescribed by Rule 31a-2 under the 1940 Act the records required
to be maintained by Rule 31a-1 under the 1940 Act.
2. Fees; Delegation; Expenses
In consideration of services rendered pursuant to this Agreement, the
Bookkeeping and Pricing Agreement, the Transfer Agency Agreement and all other
services described herein, each Portfolio will pay ALPS a fee, computed daily
and payable monthly, at the annual rate of .20% of average daily net assets of
each Portfolio.
The fee for the period from the day of the month of this Agreement is
entered into until the end of that month shall be pro-rated according to the
proportion which such period bears to the full monthly period and shall be
payable upon the date of termination of this Agreement.
ALPS will from time to time employ or associate itself with such person
or persons or organizations as ALPS may believe to be desirable in the
performance of its duties. Such person or persons may be officers and employees
who are employed by both ALPS and the Trust. The compensation of such person or
persons or organizations shall be paid by ALPS and no obligation shall be
incurred on behalf of a Portfolio in such respect.
ALPS will bear all expenses in connection with the performance of its
services under this Agreement and all related agreements, except as otherwise
provided herein. Other expenses to be incurred in the operation of the
Portfolios, including organizational expenses, taxes, interest, brokerage fees
and commissions, state Blue Sky qualification fees, advisory fees, custody fees,
audit and tax fees, insurance premiums, fidelity bond, Trust and Advisory
related legal expenses, and costs of maintenance of corporate existence shall be
borne by the Trust.
3. Proprietary and Confidential Information
ALPS agrees on behalf of itself and its employees to treat
confidentially and as proprietary information of the Trust, all records and
other information relative to the Portfolios (and clients of said shareholders),
and not to use such records and information for any purpose other than
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performance of its responsibilities and duties hereunder, except after prior
notification to and approval in writing by the Trust, which approval shall not
be unreasonably withheld and may not be withheld where ALPS may be exposed to
civil or criminal contempt proceedings for failure to comply, when requested to
divulge such information by duly constituted authorities, or when so requested
by the Trust.
4. Limitation of Liability
ALPS shall not be liable for any error of judgment or mistake of law or
for any loss suffered by the Trust in connection with the matters to which this
Agreement and the other agreements referred to in paragraph two relate, except
for a loss resulting from willful misfeasance, bad faith or gross negligence on
its part in the performance of its duties or from reckless disregard by it of
its obligations and duties under this Agreement.
5. Term
This Agreement shall become effective the earlier of the commencement
of Portfolio operations or _______, 2000, and unless sooner terminated as
provided herein, shall continue until_________, 2002 (the "Initial Term").
Thereafter, this Agreement shall continue automatically with respect to the
Trust for successive annual periods ending _________ of each year, provided such
continuance is specifically approved at least annually (i) by the Trust's Board
of Trustees or (ii) by a vote of a majority of the outstanding voting securities
of the Portfolio (as defined in the 1940 Act), and provided further that in
either event such continuance is also approved by a majority of the Trust's
Trustees who are not interested person's (as defined in the 1940 Act) of any
party to this Agreement, by vote cast in person at a meeting called for the
purpose of voting on such approval. During the Initial Term, the performance of
ALPS' obligations and duties as Administrator shall be specifically reviewed at
least annually by the Trust's Board of Trustees. During the Initial Term, this
Agreement may be terminated with respect to a Portfolio, without penalty, solely
by agreement of the parties or for cause (as defined below) on not less than
ninety days written notice by the Trust's Board of Trustees or by vote of a
majority of the outstanding voting securities of such Portfolio (as defined by
the 1940 Act). After the Initial Term, this Agreement may be terminated without
cause with respect to a Portfolio and without penalty, by the Trust's Board of
Trustees, by a vote of a majority (as defined in the 1940 Act) of the
outstanding voting securities of such Portfolio, or by ALPS, on not less than
ninety days written notice to the other party.
Termination for "cause" for the Initial Term shall mean:
(i) willful misfeasance, bad faith, gross negligence, abandonment, or
reckless disregard on the part of ALPS with respect to its obligations and
duties hereunder;
(ii) Regulatory, administrative, or judicial proceedings against ALPS
which result in a determination that it has violated any rule, regulation,
order, or law and which in the reasonable
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judgement of the Trust's Board of Trustees, including a majority of the Trust's
Trustees who are not interested persons (as defined in the 1940 Act) of any
party to this Agreement, which substantially impairs the performance of ALPS'
obligations and duties hereunder;
(iii) financial difficulties on the part of ALPS which are evidenced by
the authorization or commencement of, or involvement by way of pleading, answer,
consent, or acquiescence in, a voluntary or involuntary case under title 11 of
the United States Code, as from time to time in effect, or any applicable law
other than said Title 11, of any jurisdiction relating to the liquidation or
reorganization of debtors or to the modification or alteration of the rights of
creditors;
(iv) Any other circumstance which in the reasonable judgement of the
Trust's Board of Trustees, including a majority of the Trust's Trustees who are
not interested persons (as defined in the 1940 Act) of any party to this
Agreement, substantially impairs the performance of ALPS' obligations and duties
hereunder.
6. Governing Law:
This Agreement shall be governed by, and construed and enforced in
accordance with, the laws of the State of Colorado without regard to conflicts
of law principles.
7. Other Provisions
The Trust recognizes that from time to time directors, officers and
employees of ALPS may serve as directors, officers and employees of other
corporations or business trusts (including other investment companies) and that
such other corporations and trusts may include ALPS as part of their name and
that ALPS or its affiliates may enter into administration or other agreements
with such other corporations and trusts.
The names "Financial Investors Variable Insurance Trust" and "Trustees
of Financial Investors Variable Insurance Trust" refer respectively to the Trust
created and the Trustees, as trustees but not individually or personally, acting
from time to time under a Declaration of Trust dated July 26, 2000 which is
hereby referred to and a copy of which is on file at the office of the Secretary
of State of the State of Delaware and the principal office of the Trust. The
obligations of "Financial Investors Variable Insurance Trust" entered into in
the name or on behalf thereof by any of its trustees, representatives or agents
are made not individually, but in such capacities, and are not binding upon any
of the trustees, shareholders, or representatives of the Trust personally, but
bind only the Trust property, and all persons dealing with any class of shares
of the Trust must look solely to the Trust property belonging to such class for
the enforcement of any claims against the Trust.
If the foregoing is in accordance with your understanding, will you
kindly so indicate by signing and returning to us the enclosed copy hereof.
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Very Truly Yours,
FINANCIAL INVESTORS VARIABLE INSURANCE TRUST
By:
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Name: Jeremy O. May
Title:
Accepted:
ALPS MUTUAL FUNDS SERVICES, INC.
By:
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Name: Tom Carter
Title: Chief Financial Officer
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