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As Filed with the Securities and Exchange Commission on June 12, 1998
Registration Nos. 33-72424
811-8194
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 / /
Pre-Effective Amendment No. / /
Post-Effective Amendment No. 10 /X/
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT
COMPANY ACT OF 1940 / /
AMENDMENT NO. 12
(Check appropriate box or boxes) /X/
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Financial Investors Trust
(Exact Name of Registrant as Specified in Charter)
370 Seventeenth Street, Suite 3100
Denver, Colorado 80202
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including Area Code: (303) 623-2577
W. Robert Alexander
370 Seventeenth Street, Suite 3100
Denver, Colorado 80202
(Name and Address of Agent for Service)
Copy to:
Steven R. Howard, Esq.
Baker & McKenzie
805 Third Avenue
New York, New York 10022
It is proposed that this filing will become effective (check appropriate box):
X immediately upon filing pursuant to paragraph (b)
---
on (date) pursuant to paragraph (b)
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60 days after filing pursuant to paragraph (a)
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75 days after filing pursuant to paragraph (a)(2)
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on (date) pursuant to paragraph (a) of Rule 485
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Registrant has elected to register an indefinite number of shares of
beneficial interest pursuant to Rule 24f-2 under the Investment Company Act
of 1940 and filed the Notice required by Rule 24f-2 for the fiscal year ended
April 30, 1997 on June 25, 1997.
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Total Pages:
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FINANCIAL INVESTORS TRUST
Registration Statement on Form N-1A
CROSS REFERENCE SHEET
Pursuant to Rule 495(a)
under the Securities Act of 1933
PRIME MONEY MARKET FUND-CLASS I
PART A PROSPECTUS CAPTION
Item 1. Cover Page . . . . . . . . . . . . . . Cover Page
Item 2. Synopsis . . . . . . . . . . . . . . . Expense Summary
Item 3. Condensed Financial Information. . . . Not Applicable
Item 4. General Description of
Registrant. . . . . . . . . . . . . . Fund Operations; Suitability;
Investment Instruments,
Transactions and Risks
Item 5. Management of the Fund . . . . . . . . Management of the Fund
Item 6. Capital Stock and Other
Securities. . . . . . . . . . . . . . Fund Operations; Taxes; Other
Information
Item 7. Purchase of Securities
Being Offered . . . . . . . . . . . . Fund Operations; How to Invest
in the Fund; Shareholder
Services
Item 8. Redemption or Repurchase . . . . . . . How to Redeem Shares;
Shareholder Services
Item 9. Pending Legal Proceedings. . . . . . . Not Applicable
PRIME MONEY MARKET FUND - CLASS II
PART A PROSPECTUS CAPTION
Item 1. Cover Page . . . . . . . . . . . . . . Cover Page
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<PAGE>
Item 2. Synopsis . . . . . . . . . . . . . . . Expense Summary
Item 3. Condensed Financial Information. . . . Not Applicable
Item 4. General Description of
Registrant. . . . . . . . . . . . . . Fund Operations; Suitability;
Investment Instruments,
Transactions and Risks
Item 5. Management of the Fund . . . . . . . . Management of the Fund
Item 6. Capital Stock and Other
Securities. . . . . . . . . . . . . . Fund Operations; Taxes; Other
Information
Item 7. Purchase of Securities
Being Offered . . . . . . . . . . . . Fund Operations; How to Invest
in the Fund; Shareholder
Services
Item 8. Redemption or Repurchase . . . . . . . How to Redeem Shares;
Shareholder Services
Item 9. Legal Proceedings. . . . . . . . . . . Not Applicable
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U.S. TREASURY MONEY MARKET FUND
U.S. GOVERNMENT MONEY MARKET FUND
PRIME MONEY MARKET FUND - CLASSES I AND II
PART B . . . . . . . . . . . . . . . . . . . . STATEMENT OF ADDITIONAL
INFORMATION CAPTION
Item 10. Cover Page . . . . . . . . . . . . . . . Cover Page
Item 11. Table of Contents. . . . . . . . . . . . Table of Contents
Item 12. General Information and
History . . . . . . . . . . . . . . . . Not Applicable
Item 13. Investment Objective and
Policies. . . . . . . . . . . . . . . . Investment Restrictions;
Investment Instruments
Item 14. Management of the
Registrant. . . . . . . . . . . . . . . Management
Item 15. Control Persons and Principal
Holders of Securities . . . . . . . . . Management; Shares of
Beneficial Interest
Item 16. Investment Advisory and
Other Services. . . . . . . . . . . . . Management; Custodian and
Sub-Custodian Experts
Item 17. Brokerage Allocation and Other Practices Portfolio Transactions
Item 18. Capital Stock and Other
Securities. . . . . . . . . . . . . . . Shares of Beneficial
Interest
Item 19. Purchase, Redemption and
Pricing of Securities
Being Offered . . . . . . . . . . . . . How to Invest in the Fund
(Part A); Redemptions; How
to Redeem Shares (Part A);
Determination of Net Asset
Value; Exchange Privilege
Item 20. Tax Status . . . . . . . . . . . . . . . Fund Operations; Federal
Income Taxes
Item 21. Underwriters . . . . . . . . . . . . . . Management
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<PAGE>
Item 22. Calculation of Performance
Data. . . . . . . . . . . . . . . . . . Calculation of Yields and
Performance Information
Item 23. Financial Statements . . . . . . . . . . Financial Statements
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EXPLANATORY NOTE
This amendment to the Registration Statement of Financial Investors Trust
contains the following:
1. One Prospectus for the new Prime Money Market Fund - Class I
2. One Prospectus for the new Prime Money Market Fund - Class II
3. One Statement of Additional Information for the U.S. Government
Money Market Fund, U.S. Treasury Money Market Fund and Prime
Money Market Fund - Classes I and II
4. One Part C of the Registration Statement.
This amendment does not amend the following portions of the Registration
Statement:
1. Prospectuses for the Aristata Colorado Quality Tax Exempt Fund,
Aristata Quality Bond Fund, and Aristata Equity Fund ("Aristata
Portfolios");
2. Statement of Additional Information for the Aristata Portfolios.
<PAGE>
FINANCIAL INVESTORS TRUST June 12, 1998
370 Seventeenth Street
Suite 3100
Denver, Colorado 80202-5627
For additional information, call (800) 298-3442
PRIME MONEY MARKET FUND - CLASS I
This Prospectus describes the Prime Money Market Fund (the "Fund"), a
diversified money market fund. The Fund seeks to provide investors with as
high a level of current income as is consistent with the preservation of
capital and liquidity by investing in a defined group of short-term, U.S.
dollar denominated money market instruments. The Fund is required to maintain a
dollar-weighted average portfolio maturity of 90 days or less and seeks to
maintain its net asset value per share at $1.00 for purposes of purchases and
redemptions.
This Prospectus offers exclusively Class I shares of the Fund. Class I
shares of the Fund are sold generally to municipal investors, including
municipalities, counties and state agencies, as well as other institutional
investors such as broker/dealers, corporations, investment advisers, credit
unions, banks, insurance companies and other financial institutions and high
net worth individuals that meet the $1,000,000 minimum investment threshold for
this class of shares. The Fund also offers Class II shares - see "Other
Information - Capitalization."
The Fund is sponsored and distributed by ALPS Mutual Funds Services, Inc.
("ALPS" or the "Administrator" or "Distributor") and is advised by GE
Investment Management Incorporated ("GEIM" or the "Adviser").
SHARES IN THE FUND ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR
ENDORSED BY, ANY BANK, AND ARE NOT INSURED BY THE FDIC, THE FEDERAL RESERVE
BOARD, OR ANY OTHER AGENCY OR INSURER AND THEY MAY INVOLVE INVESTMENT RISKS
INCLUDING THE POSSIBLE LOSS OF PRINCIPAL.
This Prospectus sets forth concisely the information you should consider
before investing in the Fund. Please read this Prospectus and keep it for
future reference. Additional information about the Fund is contained in a
Statement of Additional Information (the "Statement of Additional Information")
which has been filed with the Securities and Exchange Commission ("SEC") and is
available upon request without charge by writing to or calling the Trust at the
address and telephone number listed above. The Statement of Additional
Information bears the same date as this Prospectus and is incorporated herein
by reference.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE. AN INVESTMENT IN THE FUND IS NEITHER INSURED NOR
GUARANTEED BY THE U.S. GOVERNMENT AND THERE CAN BE NO ASSURANCE THAT THE FUND
WILL BE ABLE TO MAINTAIN A STABLE NET ASSET VALUE OF $1.00 PER SHARE.
1
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TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
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<S> <C>
EXPENSE SUMMARY ............................................................3
FUND OPERATIONS ............................................................4
SUITABILITY ................................................................6
MANAGEMENT OF THE FUND .....................................................7
HOW TO INVEST IN THE FUND ..................................................8
HOW TO REDEEM SHARES .......................................................9
SHAREHOLDER SERVICES ......................................................10
TAXES .....................................................................10
INVESTMENT INSTRUMENTS, TRANSACTIONS AND STRATEGIES .......................11
OTHER INFORMATION .........................................................14
</TABLE>
2
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EXPENSE SUMMARY
The summary below shows shareholder transaction expenses imposed by the Fund
and annual Fund operating expenses based on anticipated operating expenses of
the Fund. A hypothetical example based on the summary is also shown.
"Shareholder Transaction Expenses" are charges you pay when buying or selling
shares of the Fund whereas "Annual Fund Operating Expenses" are paid out of the
Fund's assets and include fees for portfolio management, fund administration
and other services.
SHAREHOLDER TRANSACTION EXPENSES
<TABLE>
<S> <C>
Maximum Sales Load on Purchases
of Fund Shares None
Deferred Sales Load None
Redemption Fees None
Exchange Fee None
</TABLE>
ANNUAL FUND OPERATING EXPENSES (AS A PERCENTAGE OF AVERAGE NET ASSETS)
The Management Fees described in the table below are based upon the
anticipated operating expenses of the Fund. Management Fees may be higher to
the extent the Fund's average net assets exceed $500 million. Please read the
following Annual Fund Operating Expenses summary and accompanying footnotes
carefully before investing.
<TABLE>
<S> <C>
Management Fees(1) 0.04%
12b-1 Fees None
All Other Expenses(2)
(Net of Fee Waivers and Reimbursements) 0.16%
Total Fund Operating Expenses
(Net of Fee Waivers and Reimbursements)(2) 0.20%
</TABLE>
(1) The Fund is obligated to pay management fees to GEIM at the maximum
annual rate of 0.18% of the Fund's average net assets. Under its Investment
Advisory Agreement with the Fund, GEIM is entitled to receive management fees
of 0.04% on the first $500 million of average net assets of the Fund, 0.06%
on the next $500 million and 0.08% on average net assets in excess of $1
billion.
(2) The amount for "All Other Expenses" includes administration fees
payable to the Administrator calculated daily and payable monthly, at an
annual rate of the greater of $360,000 or 0.16% of average daily net assets
of the Fund up to $500 million, 0.14% of average daily net assets of the Fund
in excess of $500 million up to $1 billion and 0.12% of average daily net
assets of the Fund in excess of $1 billion. The Administrator has stated that
it will voluntarily waive a portion of the administration fees otherwise
payable by the Fund, as well as voluntarily assume a portion of the Fund
expenses, to the extent necessary for Class I of the Fund to maintain a total
expense ratio of not more than 0.20% of average net assets. Without this
voluntary fee waiver and assumption of expenses, and assuming payment of the
maximum management and administration fees, All Other Expenses and Total Fund
Operating Expenses would be 0.81% and 0.85%, respectively, of the average net
assets of Class I of the Fund. The Administrator reserves the right to modify
or terminate the fee waiver and assumption of expenses at any time.
THE FOLLOWING EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF FUTURE
EXPENSES. THE EXPENSES SET FORTH ABOVE AND THE EXAMPLE SET FORTH BELOW REFLECT
THE NON-IMPOSITION OF CERTAIN FEES AND EXPENSES. ACTUAL EXPENSES MAY BE GREATER
OR LESS THAN THOSE SHOWN.
EXAMPLE:
Based upon the above summary of expenses and assuming a 5% annual return,
redemption at the end of each time period and the reinvestment of all dividends
and distributions, you would pay the following expenses on a $1,000,000
investment in Class I of the Fund:
<TABLE>
<S> <C>
1 YEAR $2,050
3 YEARS $6,450
</TABLE>
3
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OTHER INFORMATION:
The Expense Summary and Example are intended to help you understand the
expenses you would bear either directly (as with the Shareholder Transaction
Expenses) or indirectly (as with the Annual Fund Operating Expenses) as a Fund
shareholder. As stated above, the Fund does not impose any sales-related
charges in connection with purchases of its shares, although certain service
institutions may charge their clients fees in connection with purchases and
sales for the accounts of their clients. These fees are in addition to the
expenses shown in the Expense Summary and Example. For a more complete
description of the Fund's operating expenses, see "Management of the Fund" in
this Prospectus and the Statement of Additional Information.
FUND OPERATIONS
INVESTMENT OBJECTIVE
The Adviser will use its best efforts to achieve the investment objective
of the Fund as described below, although the achievement of the investment
objective, of course, cannot be assured. You should not consider the Fund, by
itself, to be a complete investment program. The Fund is a diversified, open-
end management investment company.
The investment objective of the Fund is to seek as high a level of
current income as is consistent with the preservation of capital and
liquidity. In seeking its objective, the Fund's investments include, but are
not limited to, the following U.S. dollar denominated, short-term money
market instruments: (1) securities issued or guaranteed by the U.S.
Government, its agencies and instrumentalities ("Government Securities"); (2)
debt obligations of corporations, banks, savings and loan institutions,
insurance companies and mortgage bankers; (3) commercial paper and notes,
including those with floating or variable rates of interest; (4) debt
obligations of U.S. branches of foreign banks; (5) repurchase agreements; (6)
asset-backed or mortgage-related securities; (7) stripped Government
Securities; and (8) zero coupon bonds.
The Fund limits its portfolio investments to securities that the Trust's
Board of Trustees determines present minimal credit risk and that are "Eligible
Securities" at the time of acquisition by the Fund. "Eligible Securities" as
used in this Prospectus means securities rated by the requisite "nationally
recognized statistical rating organization" ("NRSRO") in one of the two highest
short-term rating categories, consisting of issuers that have received these
ratings with respect to other short-term debt securities and comparable unrated
securities. "Requisite NRSROs" means (1) any two NRSROs that have issued
ratings with respect to a security or class of debt obligations of an issuer or
(2) one NRSRO, if only one NRSRO has issued such a rating at the time that the
Fund acquires the security. Currently, six organizations are NRSROs: S&P,
Moody's, Fitch Investors Service, Inc., Duff and Phelps, Inc., IBCA Limited and
its affiliate, IBCA, Inc., and Thomson BankWatch, Inc. A discussion of the
ratings categories is contained in the Appendix to the Statement of Additional
Information. By limiting its investments to Eligible Securities, the Fund may
not achieve as high a level of current income as a fund investing in lower-
rated securities.
The Fund may not invest more than 5% of its total assets in the securities
of any one issuer, except for Government Securities and except to the extent
permitted under rules adopted by the SEC under the Investment Company Act of
1940, as amended ("1940 Act"). In addition, the Fund may not invest more than
5% of its total assets in Eligible Securities that have not received the
highest rating from the Requisite NRSROs and comparable unrated securities
("Second Tier Securities"), and may not invest more than the greater of
$1,000,000 or 1% of its total assets in the Second Tier Securities of any one
issuer. The Fund may invest more than 5% (but not more than 25%) of the then-
current value of the Fund's total assets in the securities of a single issuer
for a period of up to three business days, so long as (1) the securities either
are rated by the Requisite NRSROs in the highest short-term rating category or
are securities of issuers that have received such ratings with respect to other
short-term debt securities or are comparable unrated securities and (2) the
Fund does not make more than one such investment at any one time.
Determinations of comparable quality for purchases of unrated securities are
made by GEIM in accordance with procedures established by the Board of
Trustees. The Fund invests only in instruments that have (or, pursuant to
regulations adopted by the SEC, are deemed to have) remaining maturities of 13
months or less at the date of purchase (except securities subject to repurchase
agreements), determined in accordance with a rule promulgated by the SEC. The
Fund will maintain a dollar-weighted average portfolio maturity of 90 days or
less. The assets of the Fund are valued on the basis of amortized cost, as
described below under "Determination of Net Asset Value."
4
<PAGE>
The Fund, in addition to investing as described above, may hold Rule 144A
Securities. In addition, the Fund may engage in the following types of
investment techniques and strategies: entering into reverse repurchase
agreements, entering into securities transactions on a when-issued or delayed-
delivery basis and lending portfolio securities. These other instruments,
investment techniques and strategies have risks and special considerations
associated with them that are described below under "Investment Instruments,
Transactions, Strategies and Risks."
INVESTMENT RESTRICTIONS
The Fund is subject to a number of investment restrictions which reflect
self-imposed standards as well as federal regulatory limitations. These
limitations are designed to minimize certain risks associated with investing in
specified types of securities or engaging in certain transactions. These
investment restrictions and those identified as fundamental in the Statement of
Additional Information may be changed only by a vote of a majority of the
Fund's outstanding shares.
The Fund may not:
1) Borrow money, except that the Fund may enter into reverse
repurchase agreements, and except that the Fund may borrow from banks for
temporary or emergency (not leveraging) purposes, including the meeting of
redemption requests and cash payments of dividends and distributions that
might otherwise require the untimely disposition of securities, in an amount
not to exceed 33-1/3% of the value of the Fund's total assets (including the
amount borrowed) valued at market less liabilities (not including the amount
borrowed) at the time the borrowing is made. Whenever borrowings, including
reverse repurchase agreements, of 5% or more of the Fund's total assets are
outstanding, the Fund will not make any additional investments.
2) Lend its assets or money to other persons, except through (a)
purchasing debt obligations, (b) lending portfolio securities in an amount not
to exceed 30% of the Fund's assets taken at market value, (c) entering into
repurchase agreements, and (d) entering into variable rate demand notes.
3) Purchase securities (other than Government Securities) of any
issuer if, as a result of the purchase, more than 5% of the Fund's total assets
would be invested in the securities of the issuer. All securities of a foreign
government and its agencies will be treated as a single issuer for purposes of
this restriction.
4) Purchase more than 10% of the voting securities of any one issuer,
or more than 10% of the outstanding securities of any class of issuer, except
that this limitation is not applicable to the Fund's investments in Government
Securities. All securities of a foreign government and its agencies will be
treated as a single issuer for purposes of this restriction.
5) Invest more than 25% of the value of its total assets in
securities of issuers in any one industry, except that the Fund may invest
more than 25% of the value of its total assets in securities issued by
domestic banks. For purposes of this restriction, the term "industry" will
be deemed to include (a) the government of any country other than the U.S.,
but not the U.S. Government and (b) all supranational organizations.
If a percentage limitation on investments by the Fund stated above or in
the Statement of Additional Information is adhered to at the time of an
investment, a later increase or decrease in percentage resulting from changes
in asset values will not be deemed to violate the limitation except in the case
of the limitations on borrowing and illiquid investments. The Fund is not
required to sell a security if its rating is reduced or discontinued after
purchase, but the Fund may consider doing so.
It is the intention of the Fund, unless otherwise indicated, that with
respect to the Fund's policies that are the result of the application of law,
the Fund will take advantage of the flexibility provided by rules or
interpretations of the SEC currently in existence or promulgated in the future
or changes to such laws.
DETERMINATION OF NET ASSET VALUE
The value of the Fund's shares is referred to as "net asset value". Net
asset value per share of each Class for purposes of pricing purchases and
redemptions is calculated by adding the value of each Class' proportionate
share of all securities and other assets, subtracting its proportionate share
of liabilities, and dividing the result by the number of outstanding shares of
each Class. Within each Class, the expenses are allocated proportionately
based on the net assets of each Class, except class-specific expenses which are
allocated directly to the respective Class. Net asset value is determined as
of 5:00 p.m. Eastern Time on each day the New York Federal Reserve and the New
York Stock Exchange are open for business and as of 12:00 noon Eastern Time on
any day the Public Securities Association ("PSA")
5
<PAGE>
recommends an early close (each such day referred to as a "Half Day").
Currently, either the New York Federal Reserve or the New York Stock Exchange
is closed on New Years Day, Martin Luther King Jr. Day, Presidents' Day, Good
Friday, Memorial Day, Independence Day, Labor Day, Columbus Day, Veterans'
Day, Thanksgiving Day and Christmas Day. An early close is currently
recommended by the PSA on the Business Day before each day that either the
New York Federal Reserve or the New York Stock Exchange observes a holiday,
except for Good Friday. Additionally, the PSA recommends an early close on
the Business Day following Independence Day and Thanksgiving Day. A "Business
Day" is any day on which the New York Federal Reserve and the New York Stock
Exchange are open for business.
The Board of Trustees has established procedures designed to maintain a
stable net asset value of $1.00 per share, to the extent reasonably possible.
The Board of Trustees has approved and adopted procedures under Rule 2a-7 under
the Investment Company Act of 1940, as amended, which was enacted by the SEC
with the intent of stabilizing money market funds at $1.00 per share. Under the
guidelines of Rule 2a-7, the Fund uses the amortized cost method to value its
portfolio securities. The amortized cost method involves valuing a security at
its cost and amortizing any discount or premium over the period of maturity,
regardless of the impact of fluctuating interest rates on the market value of
the security. Rule 2a-7 also provides that the Fund must also do a "mark-to-
market" analysis, where it is determined the degree to which any variations may
exist between the amortized pricing method and the actual market price of the
securities in the Fund. In the event the Board determines that a deviation
exists which may result in material dilution or other unfair results to
investors or existing shareholders, the Board will take such corrective action
as it regards as necessary and appropriate, including the sale of portfolio
instruments prior to maturity to realize capital gains or losses or to shorten
average portfolio maturity.
Rule 2a-7 also requires the Fund to maintain a dollar weighted average
portfolio maturity of 90 days or less, purchase securities having remaining
maturities of 13 months or less and invest only in securities determined by the
Trust's Board of Trustees to be "eligible securities" and that present minimal
credit risks. The Board of Trustees or its delegate reviews the portfolio
securities monthly and at regularly scheduled quarterly Board of Trustees
meetings. There can be no assurance that at all times the $1.00 price per share
can be maintained. See the Statement of Additional Information for more
details.
DIVIDENDS AND DISTRIBUTIONS
The Fund's net income is declared daily as a dividend at the close of
business on the day of declaration. Your shares begin earning dividends on the
day you purchase them, and continue to earn dividends through and including the
day before you redeem them. See "How to Invest in the Fund". The Fund pays
dividends not later than five business days after the end of each month in the
form of additional shares of the Fund, unless you elect prior to the date of
distribution to receive payment in cash. Reinvested dividends and distributions
receive the same tax treatment as those paid in cash. If you redeem all of your
shares in the Fund, the Fund will pay your dividends in cash not later than
five business days after the redemption.
SUITABILITY
The Fund is designed as an economical and convenient professionally
managed investment vehicle for institutional investors and high net worth
individuals with cash balances or cash reserves who seek as high a level of
current income as is consistent with the preservation of capital and liquidity.
The Fund is designed to meet the specific cash management needs of
institutional investors such as Municipal Investors, broker/dealers,
corporations, investments advisers, credit unions, banks, insurance companies
and other institutional investors. "Municipal Investors" include any State,
county, municipality, school district, special district or political
subdivision in the United States. The Fund may also be suitable for
institutions seeking an investment vehicle for daily cash sweep or liquidity
purposes on behalf of their clients.
Legislation in each state sets forth guidelines and limitations with
respect to investments by Municipal Investors located within the state. In
addition, Municipal Investors may be subject to local laws or have their own
guidelines and policies prescribing acceptable investments for cash management
purposes. Each Municipal Investor planning to invest in the Fund must
independently verify that the Fund meets all of the criteria of investment
policies and guidelines applicable to such Municipal Investor.
Future statutory or regulatory changes, as well as future judicial or
administrative decisions and interpretations of present and future statutes and
regulations could prevent a Municipal Investor from continuing its investment
in the Fund. Each Municipal Investor should therefore remain aware of any
changes in the applicable regulation of permitted investments.
6
<PAGE>
The Fund offers the advantages of purchasing power efficiencies and
diversification of risk. Generally, in purchasing debt instruments from
dealers, the percentage difference between the bid and asked price tends to
decrease as the size of the transaction increases. The Fund also offers
investors the opportunity to participate in a portfolio of money market
instruments which is more diversified in terms of issues and maturities than a
portfolio a single investor may otherwise be able to invest in.
Investment in the Fund relieves the investor of money management and
administrative burdens usually associated with the direct purchase and sale of
money market instruments. These include the selection of the portfolio
investments; surveying the market for the best terms at which to buy and sell;
scheduling and monitoring maturities and reinvestments; receipt, delivery and
safekeeping of securities; and portfolio recordkeeping.
MANAGEMENT OF THE FUND
INVESTMENT ADVISER
The Adviser, GEIM, is a wholly-owned subsidiary of General Electric
Company ("GE"). The principal address of the Adviser is 3003 Summer Street,
Stamford, CT 06905.
Through GEIM and General Electric Investment Corporation ("GEIC"), an
affiliated company of GEIM, wholly owned by GE, and their predecessors, GE
has more than 70 years of investment management experience. GEIM and GEIC
collectively provide investment management services to various institutional
accounts with total assets as of March 31, 1998 in excess of $75.5 billion,
of which more than $14.9 billion was invested in mutual funds.
Pursuant to the Investment Advisory Agreement, the Adviser has agreed to
provide a continuous investment program for the Fund, including investment
research and management with respect to the assets of the Fund. GEIM is
entitled to receive management fees of 0.04% on the first $500 million of
average net assets of the Fund, 0.06% on the next $500 million and 0.08% on
average net assets in excess of $1 billion.
ADMINISTRATOR, TRANSFER AGENT, BOOKKEEPING AND PRICING AGENT
ALPS serves as the Fund's Administrator. As Administrator, ALPS has
agreed to: assist in maintaining the Fund's office; furnish the Fund with
clerical and certain other services; compile data for and prepare notices and
semi-annual reports to the Securities and Exchange Commission; prepare
filings with state securities commissions; coordinate Federal and state tax
returns; monitor the Fund's expense accruals; monitor compliance with the
Fund's investment policies and limitations; and generally assist in the
Fund's operations. ALPS is entitled to receive a fee from the Fund for its
administrative services computed daily and payable monthly, at the annual
rate of the greater of $360,000 or 0.16% of average daily net assets of the
Fund up to $500 million, 0.14% of average daily net assets of the Fund in
excess of $500 million up to $1 billion and 0.12% of average daily net assets
of the Fund in excess of $1 billion. ALPS has stated that it will voluntarily
waive a portion of the administration fees otherwise payable by the Fund, as
well as voluntarily assume a portion of the Fund expenses, to the extent
necessary for Class I of the Fund to maintain a total expense ratio of not
more than 0.20% of the average net assets of the Fund. ALPS reserves the
right to modify or terminate the fee waiver and assumption of expenses at any
time. ALPS and GEIM may also pay third parties from time to time for
rendering services to the Fund and/or shareholders.
In addition to its role as Administrator, ALPS serves as the Fund's
Transfer Agent. ALPS also serves as the Fund's Bookkeeping and Pricing Agent.
In this capacity, ALPS has agreed to maintain the financial accounts and
records of the Fund and to compute the net asset value and certain other
financial information relating to the Fund.
CUSTODIAN
State Street Bank and Trust Company of Connecticut, N.A., located at 750
Main Street, Suite 1114, Hartford, Connecticut 06103, serves as Custodian for
the Fund.
SUB-CUSTODIAN
State Street Bank and Trust Company, located at P.O. Box 1978, Boston,
Massachusetts 02015, serves as Sub-Custodian for the Fund.
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HOW TO INVEST IN THE FUND
Shares in the Fund are distributed on a continuous basis by ALPS, the
Fund's Sponsor and Distributor. ALPS has its principal office at 370
Seventeenth Street, Suite 3100, Denver, Colorado 80202 and may be reached at
(800) 298-3442.
GENERAL PROCEDURES
You may purchase Fund shares through ALPS, the Fund's Transfer Agent.
Investors shall pay for their purchase of Fund shares by using the Federal
Reserve Wire System. Shares of the Fund may be purchased at the net asset value
next determined after an order is received and accepted. The Fund does not
impose any sales-related charges in connection with purchases of shares. The
Fund may discontinue offering its shares in any state without notice to
shareholders.
An initial investment in the Fund must be preceded or accompanied by a
completed, signed application. The application should be forwarded to:
Financial Investors Trust
370 17th Street, Suite 3100
Denver, Colorado 80202
Purchases by telephone or facsimile can be made after an account has been
established by the Transfer Agent as described below. The Trust reserves the
right to reject any purchase order. Third-party checks will not be accepted.
Check payments must be in U.S. dollars. Please include Fund name and account
number on all checks.
PURCHASE PRICE
Your purchase of Fund shares will be effected at the net asset value next
determined after the Fund receives your purchase order in proper form and
payment in the form of Federal Funds. If your order is accompanied by Federal
Funds, or is converted into Federal Funds by 5:00 p.m. Eastern Time on a
Business Day or 12:00 noon Eastern Time on a Half Day, it will be executed on
that day. If the Fund receives your order and payment in the form of Federal
Funds after 5:00 p.m. Eastern Time on a Business Day or after 12:00 noon
Eastern Time on a Half Day, your order will be processed the next Business Day.
TELEPHONE AND FACSIMILE PURCHASES
You can purchase Fund shares by telephone or facsimile once you have
established your account with the Fund and selected facsimile and/or telephone
privileges on your Account Application. In order to qualify for dividends on
the day of purchase, telephone or facsimile orders must be placed and Federal
Funds must be in the Fund's custody account by 5:00 p.m. Eastern Time on
Business Days. In order to qualify for dividends on the day of purchase on Half
Days, telephone or facsimile orders must be placed and Federal Funds must be in
the Fund's custody account by 12:00 noon that day. If Federal Funds arrive in
the Fund's custody account after the stated deadlines for both Business Days
and Half Days, THE ACCOUNT will be credited the next Business Day.
MINIMUM INVESTMENT AND ACCOUNT BALANCES
The minimum initial investment for Class I is $1,000,000 and additional
investments may be made in any amount. The minimum purchase requirements do not
apply to reinvested dividends. If an account balance in Class I falls below
$200,000 due to redemptions or exchanges, the account may be closed and the
proceeds wired to the bank account of record, or a check will be issued and
sent to the party of record. An investor will be given 30 days notice that the
account will be closed unless an additional investment is made to increase the
account balance to the $200,000 minimum.
STATEMENTS AND REPORTS
The Trust will send you a statement of your account after every
transaction that affects your share balance or your account registration. A
statement with tax information and an annual statement will be mailed to you by
January 31 of each year, and also will be filed with the IRS. At least twice a
year, you will receive financial statements in the form of Annual and Semi-
Annual Reports of the Fund.
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HOW TO REDEEM SHARES
GENERAL PROCEDURES
Shareholders may redeem all or any part of the value of their account(s)
on any Business Day. You may redeem by mail, telephone or facsimile if you have
established that capability with the Fund. Redemption orders are processed at
the net asset value per share next determined after the Fund receives your
order. If the Fund receives your redemption order before 1:00 p.m. Eastern
Time, on a Business Day other than a Half Day, or by 11:00 a.m. Eastern Time on
a Half Day, the Fund will generally pay for your redeemed shares on that day.
Otherwise, the Fund will generally pay for your redeemed shares on the next
Business Day. The Fund reserves the right to pay for redeemed shares within
seven days after receiving your redemption order if, in the judgment of the
Adviser, an earlier payment could adversely affect the Fund.
REGULAR REDEMPTION
You may redeem shares by sending a written request to Financial Investors
Trust, P.O. Box 1978, Boston, Massachusetts 02015. You must sign a redemption
request. (All individuals with authority on the account must co-sign.) Your
written redemption request must:
(i) state the number of shares to be redeemed;
(ii) identify your shareholder account number; and
(iii) provide your tax identification number.
Each signature must be guaranteed by either a bank that is a member of the
FDIC, a trust company or a member firm of a national securities exchange or
other eligible guarantor institution. The Fund will not accept guarantees from
notaries public. Guarantees must be signed by an authorized person at the
guarantor institution, and the words "Signature Guaranteed" must appear with
the signature. A redemption request will not be deemed to be properly received
until the Fund receives all required documents in proper form.
When the Fund wires your redemption proceeds, the wire must be paid to the
same bank and account as designated on the Fund's Account Application or in
your written instructions to the Fund. If your bank is not a member of the
Federal Reserve System, your redemption proceeds will be wired to a
correspondent bank. Immediate notification by the correspondent bank to your
bank will be necessary to avoid a delay in crediting the funds to your bank
account.
TELEPHONE AND FACSIMILE REDEMPTION
You may redeem shares by telephone or facsimile. Shareholders must check
the appropriate box on the Account Application to activate facsimile and/or
telephone redemption privileges. Shares may be redeemed by telephoning the Fund
at (800) 298-3442 (or sending a facsimile transmission to the Fund at (617) 985-
9626) and giving the account name, account number, Personal Identification
Number (PIN#), name of Fund and amount of redemption. Proceeds from redemptions
will be wired directly to your account at a commercial bank within the United
States.
In order to arrange for facsimile and/or telephone redemptions after you
have opened your account, or to change the bank account or address designated
to receive redemption proceeds, send a written request to the Fund at the
address listed under "Regular Redemption". The request must be signed by you
and each other shareholder of the account involved, with the signatures
guaranteed as described above. The Trust may modify or terminate procedures for
redeeming shares by telephone but will not materially change or terminate it
without giving shareholders 60 days' written notice.
During periods of substantial economic or market change, telephone or
facsimile redemptions may be difficult to complete. If you are unable to
contact the Fund by telephone or facsimile, you may redeem your shares by mail
as described above under "Regular Redemption".
By electing the facsimile and/or telephone redemption option, you may be
giving up a measure of security which you might have had if you were to redeem
in writing. The Trust will employ reasonable procedures to confirm that
instructions communicated by telephone or facsimile are genuine, such as
recording telephone calls, providing written confirmation of transactions, or
requiring a form of personal identification prior to acting on instructions
received by telephone or facsimile. To the extent the Trust does not employ
reasonable procedures, it and/or its service
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<PAGE>
contractors may be liable for any losses due to unauthorized or fraudulent
instructions. Neither the Trust nor ALPS will be liable for following
instructions communicated by telephone or facsimile that are reasonably
believed to be genuine. Accordingly, you, as a result of this policy, may
bear the risk of fraudulent telephone or facsimile redemption transactions.
GENERAL REDEMPTION INFORMATION
Except for the presence of certain exceptional circumstances as described
in the Investment Company Act of 1940, the Fund will pay for redeemed shares by
mail within seven days after the Fund receives your order and supporting
documents in proper form (except as provided by the rules of the Securities and
Exchange Commission). Where payment is to be made by wire via the Federal
Reserve Wire System, the Fund will wire redemption proceeds on the same day
after receiving your redemption order, provided it is made before 1:00 P.M.
Eastern Time on Business Days and 11:00 a.m. Eastern Time on Half Days.
There is no charge for share redemptions. The Fund may redeem an account
that has a balance of less than the minimum account balance (see "Minimum
Investment and Account Balances" above) if the shareholder does not increase
the amount of the account to at least the minimum account balance upon 30 days'
notice.
Please direct questions concerning the proper form for redemption requests
to the Fund at (800) 298-3442.
SHAREHOLDER SERVICES
EXCHANGE PRIVILEGE
You may sell your Fund shares and buy shares of the U.S. Treasury Money
Market Fund or the U.S. Government Money Market Fund, additional investment
portfolios of the Trust, in exchange by written request. There are no fees or
commissions for exchanging Fund shares. If you have established the privilege
on your Account Application, you may also initiate exchanges by telephone or
facsimile. Exchange requests should be directed to the Fund at (800) 298-3442.
Exchange transactions must be for amounts of $1,000 or more. Exchanges may
have tax consequences, so you should consult your tax adviser for further
information. The investment portfolio must be registered for sale in your state
and must meet the investment criteria for your institution and the investor
must meet the minimum investment requirements. See "Suitability" in that Fund's
prospectus. Prior to requesting an exchange of Fund shares you should call the
Fund at (800) 298-3442. You should read the current prospectus before
investing. Each Fund has its own minimum balance requirements which must be
adhered to.
During periods of significant economic or market change, telephone or
facsimile exchanges may be difficult to complete. If you are unable to contact
the Fund by telephone or facsimile, you may also mail the exchange request to
the Fund at the address listed under "Regular Redemption". Neither the Trust
nor ALPS will be responsible for the authenticity of exchange instructions
received by telephone or facsimile except as set forth under "How to Redeem
Shares - Telephone and Facsimile Redemption".
The Trust can provide you with information concerning certain limitations
on the exchange privilege, including those related to frequency. The Trust may
modify or terminate the exchange privilege but will not materially change or
terminate it without giving shareholders 60 days' written notice.
TAXES
While municipal investors are generally exempt from Federal income taxes,
each investor should independently ascertain its tax status. With respect to
investors who are not exempt from Federal income taxes, dividends derived from
net investment income and short term capital gains are taxable as ordinary
income distributions and are taxable when paid, whether investors receive
distributions in cash or reinvest them in additional shares, except that
distributions declared in December and paid in January are taxable as if paid
on December 31. The Fund will send to non-exempt investors an IRS Form 1099-DIV
showing their taxable distributions for the past calendar year.
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The Fund intends to qualify as a "regulated investment company" under
the Internal Revenue Code of 1986, as amended (the "Code"). This qualification
will relieve the Fund of liability for Federal income taxes to the extent its
earnings are distributed in accordance with the Code and it meets other
requirements for qualification as set forth in the Code.
The information above is only a summary of some of the federal tax
consequences generally affecting the Fund and its shareholders, and no attempt
has been made to discuss individual tax consequences. In addition to Federal
taxes, investors may be subject to state or local taxes on their investment.
Investors should consult their tax advisor to determine whether the Fund is
suitable to their particular tax situation.
When investors sign their account application, they will be asked to
certify that their social security or taxpayer identification number is correct
and that they are not subject to 31% backup withholding for failing to report
income to the IRS. If investors violate IRS regulations, the IRS can require
the Fund to withhold 31% of taxable distributions and redemptions.
The Fund declares dividends from net investment income daily and pays such
dividends monthly. The Fund intends to distribute substantially all of its net
investment income and capital gains, if any, to shareholders within each
calendar year as well as on a fiscal year basis.
Since all of the Fund's net investment income is expected to be derived
from earned interest, it is anticipated that all dividends paid by the Fund
will be taxable as ordinary income to those shareholders who are not exempt
from Federal income taxes, and that no part of any distribution will be
eligible for the dividends received deduction for corporations.
INVESTMENT INSTRUMENTS, TRANSACTIONS AND RISKS
The following paragraphs provide a brief description of the securities in
which the Fund may invest and the transactions the Fund may make. The Fund is
not limited by this discussion, however, and may purchase other types of
securities and may enter into other types of transactions if they are
consistent with the Fund's investment objective and policies.
BANKERS' ACCEPTANCES purchased by the Fund are negotiable obligations of a
bank to pay a draft which has been drawn on it by a customer. These
obligations are backed by large banks and also usually are backed by goods in
international trade.
CERTIFICATES OF DEPOSIT purchased by the Fund are negotiable certificates
that represent a commercial bank's obligations to repay funds deposited with it
and earn rates of interest over given periods.
COMMERCIAL PAPER purchased by the Fund are short-term obligations issued
by banks, broker-dealers, corporations and other entities for purposes such as
financing their current operations.
CORPORATE OBLIGATIONS purchased by the Fund are bonds and notes issued by
corporations and other business organizations to finance their credit needs.
DELAYED-DELIVERY TRANSACTIONS. The Fund may buy and sell obligations on a
when-issued or delayed-delivery basis, with payment and delivery taking place
at a future date. The market value of obligations purchased in this way
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<PAGE>
may change before the delivery date, which could affect the market value of
the Fund's assets. Ordinarily, the Fund will not earn interest on
obligations until they are delivered.
FOREIGN BANK OBLIGATIONS. The Fund limits its investments in foreign
bank obligations to United States dollar denominated obligations of United
States branches of foreign banks which at the time of investment (i) have
more than $10 Billion, or the equivalent in other currencies, in total
assets; and (ii) in the opinion of the Fund's investment adviser, are of an
investment quality comparable to obligations of United States banks which may
be purchased by the Fund and present minimal credit risk.
ILLIQUID INVESTMENTS. It is the policy of the Fund that illiquid
securities (including repurchase agreements of more than seven days' duration
and variable and floating rate demand and master demand notes not requiring
receipt of the principal note amount within seven days' notice) may not
constitute, at the time of purchase or at any time, more than 10% of the value
of the total net assets of the Fund. Illiquid securities include (a)
securities that are illiquid by virtue of legal or contractual restrictions on
resale or the absence of a readily available market, (b) participation
interests in loans that are not subject to puts and (c) repurchase agreements
not terminable within seven days. See "Repurchase and Reverse Repurchase
Agreements" below.
Securities that have legal or contractual restrictions on resale but have
a readily available market are not deemed illiquid for purposes of this
limitation. Consequently, investments in restricted securities eligible for
resale pursuant to Rule 144A of the Securities Act of 1933 which have been
determined to be liquid by the Fund's Board of Trustees based upon the trading
markets for the securities will not be included for purposes of this
limitation. Rule 144A permits certain qualified institutional buyers, such as
the Funds, to trade in privately placed securities even though such securities
are not registered under the 1933 Act. The Adviser, under the supervision of
the Board of Trustees, will consider whether securities purchased under Rule
144A are illiquid and thus subject to each Fund's restriction of investing no
more than 10% of its assets in illiquid securities. A determination of whether
a Rule 144A security is liquid or not is a question of fact. In making this
determination the Adviser will consider the trading markets for the specific
security taking into account the unregistered nature of a Rule 144A security.
In addition, the Adviser could consider the (1) frequency of trades and quotes,
(2) number of dealers and potential purchasers, (3) dealer undertakings to make
a market, and (4) the nature of the security and of marketplace trades (e.g.,
the time needed to dispose of the security, the method of soliciting offers and
the mechanics of transfer). The liquidity of Rule 144A securities would be
monitored and, if as a result of changed conditions, it is determined that a
Rule 144A security is no longer liquid, a Fund's holdings of illiquid
securities would be reviewed to determine what, if any, steps are required to
assure that the Fund does not invest more than 10% of its assets in illiquid
securities. Investing in 144A securities could have the effect of increasing
the amount of a Fund's assets invested in illiquid securities if qualified
institutional buyers are unwilling to purchase such securities.
MONEY MARKET refers to the marketplace where short-term, high grade debt
obligations are traded, including U.S. government obligations, commercial
paper, certificates of deposit, bankers' acceptances, time deposits and short-
term corporate obligations. Money market instruments may carry fixed rates of
return or have variable or floating interest rates.
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REPURCHASE AND REVERSE REPURCHASE AGREEMENTS. Under the terms of a
typical repurchase agreement, which is deemed a loan for purposes of the 1940
Act, the Fund would acquire an underlying obligation for a relatively short
period (usually from one to seven days) subject to an obligation of the seller
to repurchase, and the Fund to resell, the obligation at an agreed-upon price
and time, thereby determining the yield during the Fund's holding period. This
arrangement results in a fixed rate of return that is not subject to market
fluctuations during the Fund's holding period.
The Fund may also engage in reverse repurchase agreements, subject to its
investment restrictions. A reverse repurchase agreement, which is considered a
borrowing by the Fund, involves a sale by the Fund of securities that it holds
concurrently with an agreement by the Fund to repurchase the same securities at
an agreed upon price and date. The Fund will use the proceeds of reverse
repurchase agreements to provide liquidity to meet redemption requests and cash
payments of dividends and distributions when the sale of the Fund's securities
is considered to be disadvantageous. Cash, Government Securities or other
liquid assets equal in value to the Fund's obligations with respect to reverse
repurchase agreements are segregated and maintained with the Fund's custodian
or designated sub-custodian.
SECURITIES LENDING. The Fund is authorized to lend its portfolio
securities to well-known and recognized U.S. and foreign brokers, dealers and
banks. These loans, if and when made, may not exceed 30% of the Fund's
total assets (including the market value of the collateral received). The
Fund's loans of securities will be at least 100% collateralized by cash,
letters of credit or Government Securities. The Fund will retain the right to
all interest and dividends payable with respect to the loaned securities. When
the Fund lends portfolio securities it charges interest at reasonable rates and
retains the ability to terminate the loan at any time. Cash or instruments
collateralizing the Fund's loans of securities are segregated and maintained at
all times with the Fund's custodian or designated sub-custodian in an amount at
least equal to the current market value of the loaned securities. In lending
securities, the Fund is subject to risks, which, like those associated with
other extensions of credit, include possible loss of rights in the collateral
should the borrower fail financially.
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TIME DEPOSITS purchased by the Fund are non-negotiable deposits in a
banking institution earning a specified interest rate over a given period of
time. Fixed time deposits may be withdrawn on demand by the investor, but
may be subject to early withdrawal penalties which vary depending upon market
conditions and the remaining maturity of the obligation.
U.S. GOVERNMENT OBLIGATIONS are debt obligations issued or guaranteed by
the U.S. Treasury of by an agency or instrumentality of the U.S. government.
Not all U.S. government obligations are backed by the full faith and credit of
the United States. For example, obligations issued by the Federal Farm Credit
Bank or by the Federal National Mortgage Association are supported by the
agency's right to borrow money from the U.S. Treasury under certain
circumstances. Obligations issued by the Federal Home Loan Bank are supported
only by the credit of the agency. There is no guarantee that the government
will support these types of obligations, and therefore they involve more risk
than other government obligations.
U.S. TREASURY OBLIGATIONS are obligations issued by the United States and
backed by its full faith and credit.
VARIABLE AND FLOATING RATE INSTRUMENTS that the Fund will invest in
include notes purchased directly from issuers, bear variable or floating
interest rates and may carry rights that permit holders to demand full payment
from the issuers or certain financial intermediaries. Floating rate securities
have interest rates that change whenever there is a change in a designated
market-based interest rate, while variable rate instruments provide for a
specified periodic adjustment in the interest rate. These formulas are
designed to result in a market value for the instrument that approximate its
par value. When determining the maturity of a variable or floating rate
instrument, the Fund may look to the date the demand feature can be exercised,
or to the date the interest rate is readjusted, rather than to the final
maturity of the instrument.
OTHER INFORMATION
CAPITALIZATION
The Trust was organized as a Delaware Business Trust on November 30,
1993 and consists of six separate portfolios or series, one of which is
offered in this Prospectus. The Board of Trustees may establish additional
series in the future. The capitalization of the Trust consists solely of an
unlimited number of shares of beneficial interest with a par value of $0.001
each. This Prospectus offers exclusively Class I shares of the Fund. Class
I shares of the Fund are sold generally to municipal investors, including
municipalities, counties and state agencies, as well as other institutional
investors such as broker/dealers, corporations, investment advisers, credit
unions, banks, insurance companies and other financial institutions and high
net worth individuals that meet the $1,000,000 minimum investment threshold
for this class of shares. When issued, shares of the Trust are fully paid
and non-assessable.
Class II shares are designed for individuals and other investors who seek
mutual fund investment convenience plus a lower investment minimum. Class I
and Class II are identical in all respects with the exception that Class
I shares have a higher investment minimum and do not impose any 12b-1 fees.
Under Delaware law, shareholders could, under certain circumstances, be
held personally liable for the obligations of a series of the Trust but only to
the extent of the shareholder's investment in such series. However, the Trust
Instrument disclaims liability of the shareholders, Trustees or Officers of the
Trust for acts or obligations of the Trust, which are binding only on the
assets and property of each series of the Trust and requires that notice of the
disclaimer be given in each contract or obligations entered into or executed by
the Trust or the Trustees. The risk of a shareholder incurring financial loss
on account of shareholder liability is limited to circumstances in which the
Trust itself would be unable to meet its obligations and should be considered
remote and is limited to the amount of the shareholder's investment in the
Fund.
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VOTING
Shareholders have the right to vote in the election of Trustees and on any
and all matters on which, by law or under the provisions of the Trust
Instrument, they may be entitled to vote. All shares of the Trust have equal
voting rights and will be voted in the aggregate and not by class or series,
except where voting by class or series is required by law or where the matter
involved affects only one class or series. The Trust is not required to hold
regular annual meetings of the Fund's shareholders and does not intend to do
so. Shareholders of the Fund may vote separately on items which affect only the
Fund.
The Trust Instrument provides that the holders of not less than two-thirds
of the outstanding shares of the Trust may remove a person serving as Trustee
either by declaration in writing or at a meeting called for such purpose. The
Trustees are required to call a meeting of shareholders for the purpose of
considering the removal of a person serving as Trustee if requested in writing
to do so by the holders of not less than 10% of the outstanding shares of the
Trust or the Fund.
Shares entitle their holders to one vote per share (with proportionate
voting for fractional shares). As used in this Prospectus, the phrase "vote of
a majority of the outstanding shares" of the Fund (or the Trust) means the vote
of the lesser of: (1) 67% of the shares of the Fund (or the Trust) present at a
meeting if the holders of more than 50% of the outstanding shares are present
in person or by proxy: or (2) more than 50% of the outstanding shares of the
Fund.
PERFORMANCE INFORMATION
From time to time, each class of the Fund may quote its "yield" and "total
return" in advertisements or in communications to shareholders. BOTH
PERFORMANCE FIGURES ARE BASED ON HISTORICAL EARNINGS AND ARE NOT INTENDED TO
INDICATE FUTURE PERFORMANCE. The "yield" quoted in advertisements refers to the
income generated by an investment in the Fund over a specified seven-day
period. This income is then "annualized". That is, the amount of income
generated by the investment during that week is assumed to be generated each
week over a 52-week period and is shown as a percentage of the investment. The
"effective yield" is calculated similarly but, when annualized, the income
earned by an investment in the Fund is assumed to be reinvested. The "effective
yield" will be slightly higher than the "yield" because of the compounding
effect of the assumed reinvestment.
Quotations of average annual total return for each class of the Fund, if
and when quoted, will be expressed in terms of the average annual compounded
rate of return of a hypothetical investment in the Fund over periods of 1, 5
and 10 years (up to the life of that Fund), reflect the deduction of a
proportional share of Fund expenses (on an annual basis), and assume that all
dividends and distributions are reinvested when paid.
The yield and total return of each class of the Fund are calculated
separately due to separate expense structures as indicated in the "Expense
Summary"; the yield and total return of Class II will be lower than that of
Class I because of the additional 12b-1 fees to which Class II shareholders are
subject.
Additionally, the performance of each class of the Fund may be compared in
advertisements or in reports to shareholders to those of other mutual funds
with similar investment objectives and to other relevant indices or to rankings
prepared by independent services or other financial or industry publications
that monitor the performance of mutual funds. For example, the Funds' yields
may be compared to the IBC/DONOGHUE'S MONEY FUND AVERAGE, which is an average
compiled by IBC/DONOGHUE'S MONEY FUND REPORT. In addition, yields may be
compared to the average yields reported by the BANK RATE MONITOR for money
market deposit accounts offered by the 50 leading banks and thrift institutions
in the top five standard metropolitan statistical areas.
Yield data as reported in national financial publications, including MONEY
MAGAZINE, FORBES, BARRON'S, THE WALL STREET JOURNAL and THE NEW YORK TIMES, or
in publications of a local or regional nature, may also be used in comparing
the yields of the Fund.
Since yields fluctuate, you cannot necessarily use yield data to compare
an investment in the Funds' shares with bank deposits, savings accounts and
similar investment alternatives which often provide an agreed or guaranteed
fixed yield for a stated period of time. Yield is generally a function of the
kind and quality of the instruments held in a portfolio, portfolio maturity,
operating expenses and market conditions. Any fees charged by service
institutions directly to their customer accounts in connection with investments
in shares of the Fund will not be included in the Fund's calculations of yield
or total return.
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INQUIRIES
Please write or call the Trust at the address or telephone number listed
on the cover of this Prospectus with any inquiries you may have regarding the
Fund or any other investment portfolios of the Trust that are not offered by
this Prospectus.
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NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS, OR IN THE FUND'S STATEMENT OF
ADDITIONAL INFORMATION INCORPORATED HEREIN BY REFERENCE, IN CONNECTION WITH THE
OFFERING MADE BY THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE TRUST
OR ITS DISTRIBUTOR. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFERING BY THE
TRUST OR BY THE DISTRIBUTOR IN ANY JURISDICTION IN WHICH SUCH OFFERING MAY NOT
LAWFULLY BE MADE.
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FINANCIAL INVESTORS TRUST June 12, 1998
370 Seventeenth Street
Suite 3100
Denver, Colorado 80202-5627
For additional information, call (800) 298-3442
PRIME MONEY MARKET FUND - CLASS II
This Prospectus describes the Prime Money Market Fund (the "Fund"), a
diversified money market fund. The Fund seeks to provide investors with as
high a level of current income as is consistent with the preservation of capital
and liquidity by investing in a defined group of short-term, U.S. dollar
denominated money market instruments. The Fund is required to maintain a
dollar-weighted average portfolio maturity of 90 days or less and seeks to
maintain its net asset value per share at $1.00 for purposes of purchases and
redemptions.
This Prospectus offers exclusively Class II shares of the Fund. Class II
shares are designed for individuals and other investors who seek mutual fund
investment convenience. The Fund also offers Class I shares - see "Other
Information - Capitalization."
The Fund is sponsored and distributed by ALPS Mutual Funds Services, Inc.
("ALPS" or the "Administrator" or "Distributor") and is advised by GE Investment
Management Incorporated ("GEIM" or the "Adviser").
SHARES IN THE FUND ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR
ENDORSED BY, ANY BANK, AND ARE NOT INSURED BY THE FDIC, THE FEDERAL RESERVE
BOARD, OR ANY OTHER AGENCY OR INSURER AND THEY MAY INVOLVE INVESTMENT RISKS
INCLUDING THE POSSIBLE LOSS OF PRINCIPAL.
This Prospectus sets forth concisely the information you should consider
before investing in the Fund. Please read this Prospectus and keep it for future
reference. Additional information about the Fund is contained in a Statement of
Additional Information (the "Statement of Additional Information") which has
been filed with the Securities and Exchange Commission ("SEC") and is available
upon request without charge by writing to or calling the Trust at the address
and telephone number listed above. The Statement of Additional Information bears
the same date as this Prospectus and is incorporated herein by reference.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE. AN INVESTMENT IN THE FUND IS NEITHER INSURED
NOR GUARANTEED BY THE U.S. GOVERNMENT AND THERE CAN BE NO ASSURANCE THAT THE
FUND WILL BE ABLE TO MAINTAIN A STABLE NET ASSET VALUE OF $1.00 PER SHARE.
1
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
EXPENSE SUMMARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3
FUND OPERATIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4
SUITABILITY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6
MANAGEMENT OF THE FUND . . . . . . . . . . . . . . . . . . . . . . . . . . .7
HOW TO INVEST IN THE FUND. . . . . . . . . . . . . . . . . . . . . . . . . .8
HOW TO REDEEM SHARES . . . . . . . . . . . . . . . . . . . . . . . . . . . .9
SHAREHOLDER SERVICES . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
TAXES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
INVESTMENT INSTRUMENTS, TRANSACTIONS AND STRATEGIES . . . . . . . . . . . 11
OTHER INFORMATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
</TABLE>
2
<PAGE>
EXPENSE SUMMARY
The summary below shows shareholder transaction expenses imposed by the
Fund and annual Fund operating expenses based on anticipated operating
expenses of the Fund. A hypothetical example based on the summary is also
shown. "Shareholder Transaction Expenses" are charges you pay when buying or
selling shares of the Fund whereas "Annual Fund Operating Expenses" are paid
out of the Fund's assets and include fees for portfolio management, fund
administration and other services.
SHAREHOLDER TRANSACTION EXPENSES
<TABLE>
<S> <C>
Maximum Sales Load on Purchases
of Fund Shares None
Deferred Sales Load None
Redemption Fees None
Exchange Fee None
</TABLE>
ANNUAL FUND OPERATING EXPENSES (AS A PERCENTAGE OF AVERAGE NET ASSETS)
The Management Fees described in the table below are based upon the
anticipated operating expenses of the Fund. Management Fees may be higher to the
extent the Fund's average net assets exceed $500 million. Please read the
following Annual Fund Operating Expenses summary and accompanying footnotes
carefully before investing.
<TABLE>
<S> <C>
Management Fees (1) 0.04%
12b-1 Fees (2) 0.30%
All Other Expenses(3)
(Net of Fee Waivers and Reimbursements) 0.16%
Total Fund Operating Expenses
(Net of Fee Waivers and Reimbursements)(2) 0.50%
</TABLE>
(1) The Fund is obligated to pay management fees to GEIM at the maximum
annual rate of 0.08% of the Fund's average net assets. Under its Investment
Advisory Agreement with the Fund, GEIM is entitled to receive management fees
of 0.04% on the first $500 million of average net assets of the Fund, 0.06%
on the next $500 million and 0.08% on average net assets in excess of $1
billion.
(2) 12b-1 fees are paid by Class II of the Fund to ALPS for services and
expenses in connection with distribution. Long-term shareholders of Class II
may pay more than the economic equivalent of the maximum 8.50% front-end charge
permitted by the National Association of Securities Dealers, Inc. ("NASD") due
to 12b-1 fees applicable to Class II shares.
(3) The amount for "All Other Expenses" includes administration fees
payable to the Administrator calculated daily and payable monthly, at an
annual rate of the greater of $360,000 or 0.16% of average daily net assets
of the Fund up to $500 million, 0.14% of average daily net assets of the Fund
in excess of $500 million up to $1 billion and 0.12% of average daily net
assets of the Fund in excess of $1 billion. The Administrator has stated that
it will voluntarily waive a portion of the administration fees otherwise
payable by the Fund, as well as voluntarily assume a portion of the Fund
expenses, to the extent necessary for Class II of the Fund to maintain a
total expense ratio of not more than 0.50% of average net assets. Without
this voluntary fee waiver and assumption of expenses, and assuming payment of
the maximum management and administration fees, All Other Expenses and Total
Fund Operating Expenses would be 0.81% and 1.15%, respectively, of the
average net assets of Class II of the Fund. The Administrator reserves the
right to modify or terminate the fee waiver and assumption of expenses at any
time.
THE FOLLOWING EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF FUTURE
EXPENSES. THE EXPENSES SET FORTH ABOVE AND THE EXAMPLE SET FORTH BELOW REFLECT
THE NON-IMPOSITION OF CERTAIN FEES AND EXPENSES. ACTUAL EXPENSES MAY BE GREATER
OR LESS THAN THOSE SHOWN.
3
<PAGE>
EXAMPLE:
Based upon the above summary of expenses and assuming a 5% annual return,
redemption at the end of each time period and the reinvestment of all dividends
and distributions, you would pay the following expenses on a $25,000 investment
in Class II of the Fund:
<TABLE>
<S> <C>
1 YEAR $128
3 YEARS $402
</TABLE>
OTHER INFORMATION:
The Expense Summary and Example are intended to help you understand the
expenses you would bear either directly (as with the Shareholder Transaction
Expenses) or indirectly (as with the Annual Fund Operating Expenses) as a Fund
shareholder. As stated above, the Fund does not impose any sales-related
charges in connection with purchases of its shares, although certain service
institutions may charge their clients fees in connection with purchases and
sales for the accounts of their clients. These fees are in addition to the
expenses shown in the Expense Summary and Example. For a more complete
description of the Fund's operating expenses, see "Management of the Fund" in
this Prospectus and the Statement of Additional Information.
FUND OPERATIONS
INVESTMENT OBJECTIVE
The Adviser will use its best efforts to achieve the investment objective
of the Fund as described below, although the achievement of the investment
objective, of course, cannot be assured. You should not consider the Fund, by
itself, to be a complete investment program. The Fund is a diversified, open-end
management investment company.
The investment objective of the Fund is to seek as high a level of
current income as is consistent with the preservation of capital and
liquidity. In seeking its objective, the Fund's investments include, but are
not limited to, the following U.S. dollar denominated, short-term money
market instruments: (1) securities issued or guaranteed by the U.S.
Government, its agencies and instrumentalities ("Government Securities"); (2)
debt obligations of corporations, banks, savings and loan institutions,
insurance companies and mortgage bankers; (3) commercial paper and notes,
including those with floating or variable rates of interest; (4) debt
obligations of U.S. branches of foreign banks; (5) repurchase agreements; (6)
asset-backed or mortgage-related securities; (7) stripped Government
Securities; and (8) zero coupon bonds.
The Fund limits its portfolio investments to securities that the Trust's
Board of Trustees determines present minimal credit risk and that are "Eligible
Securities" at the time of acquisition by the Fund. "Eligible Securities" as
used in this Prospectus means securities rated by the requisite "nationally
recognized statistical rating organization" ("NRSRO") in one of the two highest
short-term rating categories, consisting of issuers that have received these
ratings with respect to other short-term debt securities and comparable unrated
securities. "Requisite NRSROs" means (1) any two NRSROs that have issued
ratings with respect to a security or class of debt obligations of an issuer or
(2) one NRSRO, if only one NRSRO has issued such a rating at the time that the
Fund acquires the security. Currently, six organizations are NRSROs: S&P,
Moody's, Fitch Investors Service, Inc., Duff and Phelps, Inc., IBCA Limited and
its affiliate, IBCA, Inc., and Thomson BankWatch, Inc. A discussion of the
ratings categories is contained in the Appendix to the Statement of Additional
Information. By limiting its investments to Eligible Securities, the Fund may
not achieve as high a level of current income as a fund investing in lower-rated
securities.
The Fund may not invest more than 5% of its total assets in the securities
of any one issuer, except for Government Securities and except to the extent
permitted under rules adopted by the SEC under the Investment Company Act of
1940, as amended ("1940 Act"). In addition, the Fund may not invest more than
5% of its total assets in Eligible Securities that have not received the highest
rating from the Requisite NRSROs and comparable unrated securities ("Second Tier
Securities"), and may not invest more than the greater of $1,000,000 or 1% of
its total assets in the Second Tier Securities of any one issuer. The Fund may
invest more than 5% (but not more than 25%) of the then-current value of the
Fund's total assets in the securities of a single issuer for a period of up to
three business days, so long as (1) the securities either are rated by the
Requisite NRSROs in the highest short-term rating category or are
4
<PAGE>
securities of issuers that have received such ratings with respect to other
short-term debt securities or are comparable unrated securities and (2) the
Fund does not make more than one such investment at any one time.
Determinations of comparable quality for purchases of unrated securities are
made by GEIM in accordance with procedures established by the Board of
Trustees. The Fund invests only in instruments that have (or, pursuant to
regulations adopted by the SEC, are deemed to have) remaining maturities of
13 months or less at the date of purchase (except securities subject to
repurchase agreements), determined in accordance with a rule promulgated by
the SEC. The Fund will maintain a dollar-weighted average portfolio maturity
of 90 days or less. The assets of the Fund are valued on the basis of
amortized cost, as described below under "Determination of Net Asset Value."
The Fund, in addition to investing as described above, may hold Rule 144A
Securities. In addition, the Fund may engage in the following types of
investment techniques and strategies: entering into reverse repurchase
agreements, entering into securities transactions on a when-issued or
delayed-delivery basis and lending portfolio securities. These other
instruments, investment techniques and strategies have risks and special
considerations associated with them that are described below under "Investment
Instruments, Transactions, Strategies and Risks."
INVESTMENT RESTRICTIONS
The Fund is subject to a number of investment restrictions which reflect
self-imposed standards as well as federal regulatory limitations. These
limitations are designed to minimize certain risks associated with investing in
specified types of securities or engaging in certain transactions. These
investment restrictions and those identified as fundamental in the Statement of
Additional Information may be changed only by a vote of a majority of the Fund's
outstanding shares.
The Fund may not:
1) Borrow money, except that the Fund may enter into reverse
repurchase agreements, and except that the Fund may borrow from banks for
temporary or emergency (not leveraging) purposes, including the meeting of
redemption requests and cash payments of dividends and distributions that
might otherwise require the untimely disposition of securities, in an amount
not to exceed 33-1/3% of the value of the Fund's total assets (including the
amount borrowed) valued at market less liabilities (not including the
amount borrowed) at the time the borrowing is made. Whenever borrowings,
including reverse repurchase agreements, of 5% or more of the Fund's total
assets are outstanding, the Fund will not make any additional investments.
2) Lend its assets or money to other persons, except through (a)
purchasing debt obligations, (b) lending portfolio securities in an amount not
to exceed 30% of the Fund's assets taken at market value, (c) entering into
repurchase agreements, and (d) entering into variable rate demand notes.
3) Purchase securities (other than Government Securities) of any issuer
if, as a result of the purchase, more than 5% of the Fund's total assets would
be invested in the securities of the issuer. All securities of a foreign
government and its agencies will be treated as a single issuer for purposes of
this restriction.
4) Purchase more than 10% of the voting securities of any one issuer,
or more than 10% of the outstanding securities of any class of issuer, except
that this limitation is not applicable to the Fund's investments in Government
Securities. All securities of a foreign government and its agencies will be
treated as a single issuer for purposes of this restriction.
5) Invest more than 25% of the value of its total assets in
securities of issuers in any one industry, except that the Fund may invest
more than 25% of the value of its total assets in securities issued by
domestic banks. For purposes of this restriction, the term "industry" will
be deemed to include (a) the government of any country other than the U.S.,
but not the U.S. Government and (b) all supranational organizations.
If a percentage limitation on investments by the Fund stated above or in
the Statement of Additional Information is adhered to at the time of an
investment, a later increase or decrease in percentage resulting from changes in
asset values will not be deemed to violate the limitation except in the case of
the limitations on borrowing and illiquid investments. The Fund is not required
to sell a security if its rating is reduced or discontinued after purchase, but
the Fund may consider doing so.
It is the intention of the Fund, unless otherwise indicated, that with
respect to the Fund's policies that are the result of the application of law,
the Fund will take advantage of the flexibility provided by rules or
interpretations of the SEC currently in existence or promulgated in the future
or changes to such laws.
5
<PAGE>
DETERMINATION OF NET ASSET VALUE
The value of the Fund's shares is referred to as "net asset value". Net
asset value per share of each Class for purposes of pricing purchases and
redemptions is calculated by adding the value of each Class' proportionate share
of all securities and other assets , subtracting its proportionate share of
liabilities, and dividing the result by the number of outstanding shares of each
Class. Within each Class, the expenses are allocated proportionately based on
the net assets of each Class, except class-specific expenses which are allocated
directly to the respective Class. Net asset value is determined as of 5:00 p.m.
Eastern Time on each day the New York Federal Reserve and the New York Stock
Exchange are open for business and as of 12:00 noon Eastern Time on any day the
Public Securities Association ("PSA") recommends an early close (each such day
referred to as a "Half Day"). Currently, either the New York Federal Reserve
or the New York Stock Exchange is closed on New Years Day, Martin Luther King
Jr. Day, Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor
Day, Columbus Day, Veterans' Day, Thanksgiving Day and Christmas Day. An early
close is currently recommended by the PSA on the Business Day before each day
that either the New York Federal Reserve or the New York Stock Exchange observes
a holiday, except for Good Friday. Additionally, the PSA recommends an early
close on the Business Day following Independence Day and Thanksgiving Day. A
"Business Day" is any day on which the New York Federal Reserve and the New York
Stock Exchange are open for business.
The Board of Trustees has established procedures designed to maintain a
stable net asset value of $1.00 per share, to the extent reasonably possible.
The Board of Trustees has approved and adopted procedures under Rule 2a-7 under
the Investment Company Act of 1940, as amended, which was enacted by the SEC
with the intent of stabilizing money market funds at $1.00 per share. Under the
guidelines of Rule 2a-7, the Fund uses the amortized cost method to value its
portfolio securities. The amortized cost method involves valuing a security at
its cost and amortizing any discount or premium over the period of maturity,
regardless of the impact of fluctuating interest rates on the market value of
the security. Rule 2a-7 also provides that the Fund must also do a
"mark-to-market" analysis, where it is determined the degree to which any
variations may exist between the amortized pricing method and the actual market
price of the securities in the Fund. In the event the Board determines that a
deviation exists which may result in material dilution or other unfair results
to investors or existing shareholders, the Board will take such corrective
action as it regards as necessary and appropriate, including the sale of
portfolio instruments prior to maturity to realize capital gains or losses or to
shorten average portfolio maturity.
Rule 2a-7 also requires the Fund to maintain a dollar weighted average
portfolio maturity of 90 days or less, purchase securities having remaining
maturities of 13 months or less and invest only in securities determined by the
Trust's Board of Trustees to be "eligible securities" and that present minimal
credit risks. The Board of Trustees or its delegate reviews the portfolio
securities monthly and at regularly scheduled quarterly Board of Trustees
meetings. There can be no assurance that at all times the $1.00 price per share
can be maintained. See the Statement of Additional Information for more
details.
DIVIDENDS AND DISTRIBUTIONS
The Fund's net income is declared daily as a dividend at the close of
business on the day of declaration. Your shares begin earning dividends on the
day you purchase them, and continue to earn dividends through and including the
day before you redeem them. See "How to Invest in the Fund". The Fund pays
dividends not later than five business days after the end of each month in the
form of additional shares of the Fund, unless you elect prior to the date of
distribution to receive payment in cash. Reinvested dividends and distributions
receive the same tax treatment as those paid in cash. If you redeem all of your
shares in the Fund, the Fund will pay your dividends in cash not later than five
business days after the redemption.
SUITABILITY
The Fund is designed as an economical and convenient professionally managed
investment vehicle for institutional investors and individuals with cash
balances or cash reserves who seek as high a level of current income as is
consistent with the preservation of capital and liquidity. The Fund is designed
to meet the specific cash management needs of individual investors and
institutional investors such as Municipal Investors, broker/dealers,
corporations, investments advisers, credit unions, banks, insurance companies
and other institutional investors. "Municipal Investors" include any State,
county, municipality, school district, special district or political subdivision
in the United States. The Fund may also be suitable for institutions seeking an
investment vehicle for daily cash sweep or liquidity purposes on behalf of their
clients.
6
<PAGE>
Legislation in each state sets forth guidelines and limitations with
respect to investments by Municipal Investors located within the state. In
addition, Municipal Investors may be subject to local laws or have their own
guidelines and policies prescribing acceptable investments for cash management
purposes. Each Municipal Investor planning to invest in the Fund must
independently verify that the Fund meets all of the criteria of investment
policies and guidelines applicable to such Municipal Investor.
Future statutory or regulatory changes, as well as future judicial or
administrative decisions and interpretations of present and future statutes and
regulations could prevent a Municipal Investor from continuing its investment in
the Fund. Each Municipal Investor should therefore remain aware of any changes
in the applicable regulation of permitted investments.
The Fund offers the advantages of purchasing power efficiencies and
diversification of risk. Generally, in purchasing debt instruments from dealers,
the percentage difference between the bid and asked price tends to decrease as
the size of the transaction increases. The Fund also offers investors the
opportunity to participate in a portfolio of money market instruments which is
more diversified in terms of issues and maturities than a portfolio a single
investor may otherwise be able to invest in.
Investment in the Fund relieves the investor of money management and
administrative burdens usually associated with the direct purchase and sale of
money market instruments. These include the selection of the portfolio
investments; surveying the market for the best terms at which to buy and sell;
scheduling and monitoring maturities and reinvestments; receipt, delivery and
safekeeping of securities; and portfolio recordkeeping.
MANAGEMENT OF THE FUND
INVESTMENT ADVISER
The Adviser, GEIM, is a wholly-owned subsidiary of General Electric Company
("GE"). The principal address of the Adviser is 3003 Summer Street, Stamford, CT
06905.
Through GEIM and General Electric Investment Corporation ("GEIC"), an
affiliated company of GEIM, wholly owned by GE, and their predecessors, GE
has more than 70 years of investment management experience. GEIM and GEIC
collectively provide investment management services to various institutional
accounts with total assets as of March 31, 1998 in excess of $75.5 billion,
of which more than $14.9 billion was invested in mutual funds.
Pursuant to the Investment Advisory Agreement, the Adviser has agreed to
provide a continuous investment program for the Fund, including investment
research and management with respect to the assets of the Fund. GEIM is
entitled to receive management fees of 0.04% on the first $500 million of
average net assets of the Fund, 0.06% on the next $500 million and 0.08% on
average net assets in excess of $1 billion.
ADMINISTRATOR, TRANSFER AGENT, BOOKKEEPING AND PRICING AGENT
ALPS serves as the Fund's Administrator. As Administrator, ALPS has
agreed to: assist in maintaining the Fund's office; furnish the Fund with
clerical and certain other services; compile data for and prepare notices and
semi-annual reports to the Securities and Exchange Commission; prepare
filings with state securities commissions; coordinate Federal and state tax
returns; monitor the Fund's expense accruals; monitor compliance with the
Fund's investment policies and limitations; and generally assist in the
Fund's operations. ALPS is entitled to receive a fee from the Fund for its
administrative services computed daily and payable monthly, at the annual
rate of the greater of $360,000 or 0.16% of average daily net assets of the
Fund up to $500 million, 0.14% of average daily net assets of the Fund in
excess of $500 million up to $1 billion and 0.12% of average daily net assets
of the Fund in excess of $1 billion. ALPS has stated that it will voluntarily
waive a portion of the administration fees otherwise payable by the Fund, as
well as voluntarily assume a portion of the Fund expenses, to the extent
necessary for Class II of the Fund to maintain a total expense ratio of not
more than 0.50% of the average net assets of the Fund. ALPS reserves the
right to modify or terminate the fee waiver and assumption of expenses at any
time. ALPS and GEIM may also pay third parties from time to time for
rendering services to the Fund and/or shareholders.
In addition to its role as Administrator, ALPS serves as the Fund's
Transfer Agent. ALPS also serves as the Fund's Bookkeeping and Pricing Agent.
In this capacity, ALPS has agreed to maintain the financial accounts and records
of the Fund and to compute the net asset value and certain other financial
information relating to the Fund.
7
<PAGE>
CUSTODIAN
State Street Bank and Trust Company of Connecticut, N.A., located at 750
Main Street, Suite 1114, Hartford, Connecticut 06103, serves as Custodian for
the Fund.
SUB-CUSTODIAN
State Street Bank and Trust Company, located at P.O. Box 1978, Boston,
Massachusetts 02015, serves as Sub-Custodian for the Fund.
HOW TO INVEST IN THE FUND
Shares in the Fund are distributed on a continuous basis by ALPS, the
Fund's Sponsor and Distributor. ALPS has its principal office at 370 Seventeenth
Street, Suite 3100, Denver, Colorado 80202 and may be reached at (800) 298-3442.
GENERAL PROCEDURES
You may purchase Fund shares through ALPS, the Fund's Transfer Agent.
Investors shall pay for their purchase of Fund shares by using the Federal
Reserve Wire System. Shares of the Fund may be purchased at the net asset value
next determined after an order is received and accepted. The Fund does not
impose any sales-related charges in connection with purchases of shares. The
Fund may discontinue offering its shares in any state without notice to
shareholders.
An initial investment in the Fund must be preceded or accompanied by a
completed, signed application. The application should be forwarded to:
Financial Investors Trust
370 17th Street, Suite 3100
Denver, Colorado 80202
Purchases by telephone or facsimile can be made after an account has been
established by the Transfer Agent as described below. The Trust reserves the
right to reject any purchase order. Third-party checks will not be accepted.
Check payments must be in U.S. dollars. Please include Fund name and account
number on all checks.
PURCHASE PRICE
Your purchase of Fund shares will be effected at the net asset value next
determined after the Fund receives your purchase order in proper form and
payment in the form of Federal Funds. If your order is accompanied by Federal
Funds, or is converted into Federal Funds by 5:00 p.m. Eastern Time on a
Business Day or 12:00 noon Eastern Time on a Half Day, it will be executed on
that day. If the Fund receives your order and payment in the form of Federal
Funds after 5:00 p.m. Eastern Time on a Business Day or after 12:00 noon Eastern
Time on a Half Day, your order will be processed the next Business Day.
TELEPHONE AND FACSIMILE PURCHASES
You can purchase Fund shares by telephone or facsimile once you have
established your account with the Fund and selected facsimile and/or telephone
privileges on your Account Application. In order to qualify for dividends on the
day of purchase, telephone or facsimile orders must be placed and Federal Funds
must be in the Fund's custody account by 5:00 p.m. Eastern Time on Business
Days. In order to qualify for dividends on the day of purchase on Half Days,
telephone or facsimile orders must be placed and Federal Funds must be in the
Fund's custody account by 12:00 noon that day. If Federal Funds arrive in the
Fund's custody account after the stated deadlines for both Business Days and
Half Days, the account will be credited the next Business Day.
8
<PAGE>
MINIMUM INVESTMENT AND ACCOUNT BALANCES
The minimum initial investment for Class II is $25,000 and additional
investments may be made in any amount. The minimum purchase requirements do not
apply to reinvested dividends. If an account balance in Class II falls below
$5,000 due to redemptions or exchanges, the account may be closed and the
proceeds wired to the bank account of record, or a check will be issued and sent
to the party of record. An investor will be given 30 days notice that the
account will be closed unless an additional investment is made to increase the
account balance to the $5,000 minimum.
STATEMENTS AND REPORTS
The Trust will send you a statement of your account after every transaction
that affects your share balance or your account registration. A statement with
tax information and an annual statement will be mailed to you by January 31 of
each year, and also will be filed with the IRS. At least twice a year, you will
receive financial statements in the form of Annual and Semi-Annual Reports of
the Fund.
HOW TO REDEEM SHARES
GENERAL PROCEDURES
Shareholders may redeem all or any part of the value of their account(s) on
any Business Day. You may redeem by mail, telephone or facsimile if you have
established that capability with the Fund. Redemption orders are processed at
the net asset value per share next determined after the Fund receives your
order. If the Fund receives your redemption order before 1:00 p.m. Eastern Time,
on a Business Day other than a Half Day, or by 11:00 a.m. Eastern Time on a Half
Day, the Fund will generally pay for your redeemed shares on that day.
Otherwise, the Fund will generally pay for your redeemed shares on the next
Business Day. The Fund reserves the right to pay for redeemed shares within
seven days after receiving your redemption order if, in the judgment of the
Adviser, an earlier payment could adversely affect the Fund.
REGULAR REDEMPTION
You may redeem shares by sending a written request to Financial Investors
Trust, P.O. Box 1978, Boston, Massachusetts 02015. You must sign a redemption
request. (All individuals with authority on the account must co-sign.) Your
written redemption request must:
(i) state the number of shares to be redeemed;
(ii) identify your shareholder account number; and
(iii) provide your tax identification number.
Each signature must be guaranteed by either a bank that is a member of the
FDIC, a trust company or a member firm of a national securities exchange or
other eligible guarantor institution. The Fund will not accept guarantees from
notaries public. Guarantees must be signed by an authorized person at the
guarantor institution, and the words "Signature Guaranteed" must appear with the
signature. A redemption request will not be deemed to be properly received until
the Fund receives all required documents in proper form.
When the Fund wires your redemption proceeds, the wire must be paid to the
same bank and account as designated on the Fund's Account Application or in your
written instructions to the Fund. If your bank is not a member of the Federal
Reserve System, your redemption proceeds will be wired to a correspondent bank.
Immediate notification by the correspondent bank to your bank will be necessary
to avoid a delay in crediting the funds to your bank account.
TELEPHONE AND FACSIMILE REDEMPTION
You may redeem shares by telephone or facsimile. Shareholders must check
the appropriate box on the Account Application to activate facsimile and/or
telephone redemption privileges. Shares may be redeemed by telephoning the Fund
at (800) 298-3442 (or sending a facsimile transmission to the Fund at (617)
985-9626) and giving the account name, account number, Personal Identification
Number (PIN#), name of Fund and amount of redemption. Proceeds from redemptions
will be wired directly to your account at a commercial bank within the United
States.
9
<PAGE>
In order to arrange for facsimile and/or telephone redemptions after you
have opened your account, or to change the bank account or address designated to
receive redemption proceeds, send a written request to the Fund at the address
listed under "Regular Redemption". The request must be signed by you and each
other shareholder of the account involved, with the signatures guaranteed as
described above. The Trust may modify or terminate procedures for redeeming
shares by telephone but will not materially change or terminate it without
giving shareholders 60 days' written notice.
During periods of substantial economic or market change, telephone or
facsimile redemptions may be difficult to complete. If you are unable to contact
the Fund by telephone or facsimile, you may redeem your shares by mail as
described above under "Regular Redemption".
By electing the facsimile and/or telephone redemption option, you may be
giving up a measure of security which you might have had if you were to redeem
in writing. The Trust will employ reasonable procedures to confirm that
instructions communicated by telephone or facsimile are genuine, such as
recording telephone calls, providing written confirmation of transactions, or
requiring a form of personal identification prior to acting on instructions
received by telephone or facsimile. To the extent the Trust does not employ
reasonable procedures, it and/or its service contractors may be liable for any
losses due to unauthorized or fraudulent instructions. Neither the Trust nor
ALPS will be liable for following instructions communicated by telephone or
facsimile that are reasonably believed to be genuine. Accordingly, you, as a
result of this policy, may bear the risk of fraudulent telephone or facsimile
redemption transactions.
GENERAL REDEMPTION INFORMATION
Except for the presence of certain exceptional circumstances as described
in the Investment Company Act of 1940, the Fund will pay for redeemed shares by
mail within seven days after the Fund receives your order and supporting
documents in proper form (except as provided by the rules of the Securities and
Exchange Commission). Where payment is to be made by wire via the Federal
Reserve Wire System, the Fund will wire redemption proceeds on the same day
after receiving your redemption order, provided it is made before 1:00 P.M.
Eastern Time on Business Days and 11:00 a.m. Eastern Time on Half Days.
There is no charge for share redemptions. The Fund may redeem an account
that has a balance of less than the minimum account balance (see "Minimum
Investment and Account Balances" above) if the shareholder does not increase the
amount of the account to at least the minimum account balance upon 30 days'
notice.
Please direct questions concerning the proper form for redemption requests
to the Fund at (800) 298-3442.
SHAREHOLDER SERVICES
EXCHANGE PRIVILEGE
You may sell your Fund shares and buy shares of the U.S. Treasury Money
Market Fund or the U.S. Government Money Market Fund, additional investment
portfolios of the Trust, in exchange by written request. There are no fees or
commissions for exchanging Fund shares. If you have established the privilege on
your Account Application, you may also initiate exchanges by telephone or
facsimile. Exchange requests should be directed to the Fund at (800) 298-3442.
Exchange transactions must be for amounts of $1,000 or more. Exchanges may
have tax consequences, so you should consult your tax adviser for further
information. The investment portfolio must be registered for sale in your state
and must meet the investment criteria for your institution and the investor must
meet the minimum investment requirements. See "Suitability" in that Fund's
prospectus. Prior to requesting an exchange of Fund shares you should call the
Fund at (800) 298-3442. You should read the current prospectus before investing.
Each Fund has its own minimum balance requirements which must be adhered to.
During periods of significant economic or market change, telephone or
facsimile exchanges may be difficult to complete. If you are unable to contact
the Fund by telephone or facsimile, you may also mail the exchange request to
the Fund at the address listed under "Regular Redemption". Neither the Trust
nor ALPS will be responsible for the authenticity of exchange instructions
received by telephone or facsimile except as set forth under "How to Redeem
Shares - Telephone and Facsimile Redemption".
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The Trust can provide you with information concerning certain limitations
on the exchange privilege, including those related to frequency. The Trust may
modify or terminate the exchange privilege but will not materially change or
terminate it without giving shareholders 60 days' written notice.
TAXES
While municipal investors are generally exempt from Federal income taxes,
each investor should independently ascertain its tax status. With respect to
investors who are not exempt from Federal income taxes, dividends derived from
net investment income and short term capital gains are taxable as ordinary
income distributions and are taxable when paid, whether investors receive
distributions in cash or reinvest them in additional shares, except that
distributions declared in December and paid in January are taxable as if paid on
December 31. The Fund will send to non-exempt investors an IRS Form 1099-DIV
showing their taxable distributions for the past calendar year.
The Fund intends to qualify as a "regulated investment company" under the
Internal Revenue Code of 1986, as amended (the "Code"). This qualification will
relieve the Fund of liability for Federal income taxes to the extent its
earnings are distributed in accordance with the Code and it meets other
requirements for qualification as set forth in the Code.
The information above is only a summary of some of the federal tax
consequences generally affecting the Fund and its shareholders, and no attempt
has been made to discuss individual tax consequences. In addition to Federal
taxes, investors may be subject to state or local taxes on their investment.
Investors should consult their tax advisor to determine whether the Fund is
suitable to their particular tax situation.
When investors sign their account application, they will be asked to
certify that their social security or taxpayer identification number is correct
and that they are not subject to 31% backup withholding for failing to report
income to the IRS. If investors violate IRS regulations, the IRS can require the
Fund to withhold 31% of taxable distributions and redemptions.
The Fund declares dividends from net investment income daily and pays such
dividends monthly. The Fund intends to distribute substantially all of its net
investment income and capital gains, if any, to shareholders within each
calendar year as well as on a fiscal year basis.
Since all of the Fund's net investment income is expected to be derived
from earned interest, it is anticipated that all dividends paid by the Fund will
be taxable as ordinary income to those shareholders who are not exempt from
Federal income taxes, and that no part of any distribution will be eligible for
the dividends received deduction for corporations.
INVESTMENT INSTRUMENTS, TRANSACTIONS AND RISKS
The following paragraphs provide a brief description of the securities in
which the Fund may invest and the transactions the Fund may make. The Fund is
not limited by this discussion, however, and may purchase other types of
securities and may enter into other types of transactions if they are consistent
with the Fund's investment objective and policies.
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BANKERS' ACCEPTANCES purchased by the Fund are negotiable obligations of a
bank to pay a draft which has been drawn on it by a customer. These obligations
are backed by large banks and also usually are backed by goods in international
trade.
CERTIFICATES OF DEPOSIT purchased by the Fund are negotiable certificates
that represent a commercial bank's obligations to repay funds deposited with it
and earn rates of interest over given periods.
COMMERCIAL PAPER purchased by the Fund are short-term obligations issued by
banks, broker-dealers, corporations and other entities for purposes such as
financing their current operations.
CORPORATE OBLIGATIONS purchased by the Fund are bonds and notes issued by
corporations and other business organizations to finance their credit needs.
DELAYED-DELIVERY TRANSACTIONS. The Fund may buy and sell obligations on a
when-issued or delayed-delivery basis, with payment and delivery taking place at
a future date. The market value of obligations purchased in this way may change
before the delivery date, which could affect the market value of the Fund's
assets. Ordinarily, the Fund will not earn interest on obligations until they
are delivered.
FOREIGN BANK OBLIGATIONS. The Fund limits its investments in foreign
bank obligations to United States dollar denominated obligations of United
States branches of foreign banks which at the time of investment (i) have
more than $10 Billion, or the equivalent in other currencies, in total
assets; and (ii) in the opinion of the Fund's investment adviser, are of an
investment quality comparable to obligations of United States banks which may
be purchased by the Fund and present minimal credit risk.
ILLIQUID INVESTMENTS. It is the policy of the Fund that illiquid
securities (including repurchase agreements of more than seven days' duration
and variable and floating rate demand and master demand notes not requiring
receipt of the principal note amount within seven days' notice) may not
constitute, at the time of purchase or at any time, more than 10% of the value
of the total net assets of the Fund. Illiquid securities include (a) securities
that are illiquid by virtue of legal or contractual restrictions on resale or
the absence of a readily available market, (b) participation interests in loans
that are not subject to puts and (c) repurchase agreements not terminable within
seven days. See "Repurchase and Reverse Repurchase Agreements" below.
Securities that have legal or contractual restrictions on resale but have a
readily available market are not deemed illiquid for purposes of this
limitation. Consequently, investments in restricted securities eligible for
resale pursuant to Rule 144A of the Securities Act of 1933 which have been
determined to be liquid by the Fund's Board of Trustees based upon the trading
markets for the securities will not be included for purposes of this limitation.
Rule 144A permits certain qualified institutional buyers, such as the Funds, to
trade in privately placed securities even though such securities are not
registered under the 1933 Act. The Adviser, under the supervision of the Board
of Trustees, will consider whether securities purchased under Rule 144A are
illiquid and thus subject to each Fund's restriction of investing no more than
10% of its assets in illiquid securities. A determination of whether a Rule
144A security is liquid or not is a question of fact. In making this
determination the Adviser will consider the trading markets for the specific
security taking into account the unregistered nature of a Rule 144A security.
In addition, the Adviser could consider the (1) frequency of trades and quotes,
(2) number of dealers and potential purchasers, (3) dealer undertakings to make
a market, and (4) the nature of the security and of marketplace trades(e.g., the
time needed to dispose of the security, the method of soliciting offers and the
mechanics of transfer). The liquidity of Rule 144A securities would be
monitored
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and, if as a result of changed conditions, it is determined that a Rule 144A
security is no longer liquid, a Fund's holdings of illiquid securities would
be reviewed to determine what, if any, steps are required to assure that the
Fund does not invest more than 10% of its assets in illiquid securities.
Investing in 144A securities could have the effect of increasing the amount
of a Fund's assets invested in illiquid securities if qualified institutional
buyers are unwilling to purchase such securities.
MONEY MARKET refers to the marketplace where short-term, high grade debt
obligations are traded, including U.S. government obligations, commercial paper,
certificates of deposit, bankers' acceptances, time deposits and short-term
corporate obligations. Money market instruments may carry fixed rates of return
or have variable or floating interest rates.
REPURCHASE AND REVERSE REPURCHASE AGREEMENTS. Under the terms of a
typical repurchase agreement, which is deemed a loan for purposes of the 1940
Act, the Fund would acquire an underlying obligation for a relatively short
period (usually from one to seven days) subject to an obligation of the seller
to repurchase, and the Fund to resell, the obligation at an agreed-upon price
and time, thereby determining the yield during the Fund's holding period. This
arrangement results in a fixed rate of return that is not subject to market
fluctuations during the Fund's holding period.
The Fund may also engage in reverse repurchase agreements, subject to its
investment restrictions. A reverse repurchase agreement, which is considered a
borrowing by the Fund, involves a sale by the Fund of securities that it holds
concurrently with an agreement by the Fund to repurchase the same securities at
an agreed upon price and date. The Fund will use the proceeds of reverse
repurchase agreements to provide liquidity to meet redemption requests and cash
payments of dividends and distributions when the sale of the Fund's securities
is considered to be disadvantageous. Cash, Government Securities or other
liquid assets equal in value to the Fund's obligations with respect to reverse
repurchase agreements are segregated and maintained with the Fund's custodian or
designated sub-custodian.
SECURITIES LENDING. The Fund is authorized to lend its portfolio
securities to well-known and recognized U.S. and foreign brokers, dealers and
banks. These loans, if and when made, may not exceed 30% of the Fund's total
assets (including the market value of the collateral received). The Fund's
loans of securities will be at least 100% collateralized by cash, letters of
credit or Government Securities. The Fund will retain the right to all
interest and dividends payable with respect to the loaned securities. When
the Fund lends portfolio securities it charges interest at reasonable rates
and retains the ability to terminate the loan at any time. Cash or
instruments collateralizing the Fund's loans of securities are segregated and
maintained at all times with the Fund's custodian or designated sub-custodian
in an amount at least equal to the current market value of the loaned
securities. In lending securities, the Fund is subject to risks, which, like
those associated with other extensions of credit, include possible loss of
rights in the collateral should the borrower fail financially.
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TIME DEPOSITS purchased by the Fund are non-negotiable deposits in a
banking institution earning a specified interest rate over a given period of
time. Fixed time deposits may be withdrawn on demand by the investor, but
may be subject to early withdrawal penalties which vary depending upon market
conditions and the remaining maturity of the obligation.
U.S. GOVERNMENT OBLIGATIONS are debt obligations issued or guaranteed by
the U.S. Treasury of by an agency or instrumentality of the U.S. government.
Not all U.S. government obligations are backed by the full faith and credit of
the United States. For example, obligations issued by the Federal Farm Credit
Bank or by the Federal National Mortgage Association are supported by the
agency's right to borrow money from the U.S. Treasury under certain
circumstances. Obligations issued by the Federal Home Loan Bank are supported
only by the credit of the agency. There is no guarantee that the government
will support these types of obligations, and therefore they involve more risk
than other government obligations.
U.S. TREASURY OBLIGATIONS are obligations issued by the United States and
backed by its full faith and credit.
VARIABLE AND FLOATING RATE INSTRUMENTS that the Fund will invest in include
notes purchased directly from issuers, bear variable or floating interest rates
and may carry rights that permit holders to demand full payment from the issuers
or certain financial intermediaries. Floating rate securities have interest
rates that change whenever there is a change in a designated market-based
interest rate, while variable rate instruments provide for a specified periodic
adjustment in the interest rate. These formulas are designed to result in a
market value for the instrument that approximate its par value. When
determining the maturity of a variable or floating rate instrument, the Fund may
look to the date the demand feature can be exercised, or to the date the
interest rate is readjusted, rather than to the final maturity of the
instrument.
OTHER INFORMATION
DISTRIBUTION PLAN
The Trustees have adopted a Distribution Plan on behalf of Class II of the
Fund pursuant to Rule 12b-1 (the "Rule") under the 1940 Act. The Distribution
Plan provides for payment of a fee to ALPS at the annual rate of up to .30% of
the average net assets of Class II for distribution-related services. These
services include, but are not limited to the following: formulation and
implementation of marketing and promotional activities, such as mail promotions
and television, radio, newspaper, magazine and other mass media advertising;
preparation, printing and distribution of sales literature; preparation,
printing and distribution of prospectuses of the Prime Fund and reports to
recipients other than existing shareholders of the Prime Fund; obtaining such
information, analyses and reports with respect to marketing and promotional
activities as ALPS may, from time to time, deem advisable; making payments to
securities dealers and
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<PAGE>
others engaged in the sales of Class II Shares of the Prime Fund; and
providing training, marketing and support to such dealers and others with
respect to the sale of Class II Shares of the Prime Fund. The Distribution
Fee is an expense of Class II in addition to the Management Fee, and
Administration Fee, and will reduce the net income and total return of that
Class.
CAPITALIZATION
The Trust was organized as a Delaware Business Trust on November 30, 1993
and consists of six separate portfolios or series, one of which is offered in
this Prospectus. The Board of Trustees may establish additional series in the
future. The capitalization of the Trust consists solely of an unlimited number
of shares of beneficial interest with a par value of $0.001 each. This
Prospectus offers exclusively Class II shares of the Fund. Class II shares are
designed for individuals and other investors who seek mutual fund investment
convenience. When issued, shares of the Trust are fully paid and
non-assessable.
Class I shares of the Fund are sold generally to municipal investors,
including municipalities, counties and state agencies, as well as other
institutional investors such as broker/dealers, corporations, investment
advisers, credit unions, banks, insurance companies and other financial
institutions and high net worth individuals that meet the $1,000,000 minimum
investment threshold for this class of shares. Class I and Class II are
identical in all respects with the exception that Class I shares have a higher
investment minimum and do not impose any 12b-1 fees.
Under Delaware law, shareholders could, under certain circumstances, be
held personally liable for the obligations of a series of the Trust but only to
the extent of the shareholder's investment in such series. However, the Trust
Instrument disclaims liability of the shareholders, Trustees or Officers of the
Trust for acts or obligations of the Trust, which are binding only on the assets
and property of each series of the Trust and requires that notice of the
disclaimer be given in each contract or obligations entered into or executed by
the Trust or the Trustees. The risk of a shareholder incurring financial loss on
account of shareholder liability is limited to circumstances in which the Trust
itself would be unable to meet its obligations and should be considered remote
and is limited to the amount of the shareholder's investment in the Fund.
VOTING
Shareholders have the right to vote in the election of Trustees and on any
and all matters on which, by law or under the provisions of the Trust
Instrument, they may be entitled to vote. All shares of the Trust have equal
voting rights and will be voted in the aggregate and not by class or series,
except where voting by class or series is required by law or where the matter
involved affects only one class or series. The Trust is not required to hold
regular annual meetings of the Fund's shareholders and does not intend to do so.
Shareholders of the Fund may vote separately on items which affect only the
Fund.
The Trust Instrument provides that the holders of not less than two-thirds
of the outstanding shares of the Trust may remove a person serving as Trustee
either by declaration in writing or at a meeting called for such purpose. The
Trustees are required to call a meeting of shareholders for the purpose of
considering the removal of a person serving as Trustee if requested in writing
to do so by the holders of not less than 10% of the outstanding shares of the
Trust or the Fund.
Shares entitle their holders to one vote per share (with proportionate
voting for fractional shares). As used in this Prospectus, the phrase "vote of a
majority of the outstanding shares" of the Fund (or the Trust) means the vote of
the lesser of: (1) 67% of the shares of the Fund (or the Trust) present at a
meeting if the holders of more than 50% of the outstanding shares are present in
person or by proxy: or (2) more than 50% of the outstanding shares of the Fund.
PERFORMANCE INFORMATION
From time to time, each class of the Fund may quote its "yield" and "total
return" in advertisements or in communications to shareholders. BOTH PERFORMANCE
FIGURES ARE BASED ON HISTORICAL EARNINGS AND ARE NOT INTENDED TO INDICATE FUTURE
PERFORMANCE. The "yield" quoted in advertisements refers to the income generated
by an investment in the Fund over a specified seven-day period. This income is
then "annualized". That is, the amount of income generated by the investment
during that week is assumed to be generated each week over a 52-week period and
is shown as a percentage of the investment. The "effective yield" is calculated
similarly but, when annualized, the income earned by an investment in the Fund
is assumed to be reinvested. The "effective yield" will be slightly higher than
the "yield" because of the compounding effect of the assumed reinvestment.
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<PAGE>
Quotations of average annual total return for each class of the Fund, if
and when quoted, will be expressed in terms of the average annual compounded
rate of return of a hypothetical investment in the Fund over periods of 1, 5 and
10 years (up to the life of that Fund), reflect the deduction of a proportional
share of Fund expenses (on an annual basis), and assume that all dividends and
distributions are reinvested when paid.
The yield and total return of each class of the Fund are calculated
separately due to separate expense structures as indicated in the "Expense
Summary"; the yield and total return of Class II will be lower than that of
Class I because of 12b-1 fees to which Class II shareholders are subject.
Additionally, the performance of each class of the Fund may be compared in
advertisements or in reports to shareholders to those of other mutual funds with
similar investment objectives and to other relevant indices or to rankings
prepared by independent services or other financial or industry publications
that monitor the performance of mutual funds. For example, the Funds' yields may
be compared to the IBC/DONOGHUE'S MONEY FUND AVERAGE, which is an average
compiled by IBC/DONOGHUE'S MONEY FUND REPORT. In addition, yields may be
compared to the average yields reported by the BANK RATE MONITOR for money
market deposit accounts offered by the 50 leading banks and thrift institutions
in the top five standard metropolitan statistical areas.
Yield data as reported in national financial publications, including MONEY
MAGAZINE, FORBES, BARRON'S, THE WALL STREET JOURNAL and THE NEW YORK TIMES, or
in publications of a local or regional nature, may also be used in comparing the
yields of the Fund.
Since yields fluctuate, you cannot necessarily use yield data to compare an
investment in the Funds' shares with bank deposits, savings accounts and similar
investment alternatives which often provide an agreed or guaranteed fixed yield
for a stated period of time. Yield is generally a function of the kind and
quality of the instruments held in a portfolio, portfolio maturity, operating
expenses and market conditions. Any fees charged by service institutions
directly to their customer accounts in connection with investments in shares of
the Fund will not be included in the Fund's calculations of yield or total
return.
INQUIRIES
Please write or call the Trust at the address or telephone number listed on
the cover of this Prospectus with any inquiries you may have regarding the Fund
or any other investment portfolios of the Trust that are not offered by this
Prospectus.
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NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS, OR IN THE FUND'S STATEMENT OF
ADDITIONAL INFORMATION INCORPORATED HEREIN BY REFERENCE, IN CONNECTION WITH THE
OFFERING MADE BY THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE TRUST
OR ITS DISTRIBUTOR. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFERING BY THE
TRUST OR BY THE DISTRIBUTOR IN ANY JURISDICTION IN WHICH SUCH OFFERING MAY NOT
LAWFULLY BE MADE.
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FINANCIAL INVESTORS TRUST
U.S. TREASURY MONEY MARKET FUND
U.S. GOVERNMENT MONEY MARKET FUND
PRIME MONEY MARKET FUND (CLASSES I AND II)
370 Seventeenth Street, Suite 3100
Denver, Colorado 80202
June 12, 1998
General Information: (800) 298-3442
STATEMENT OF ADDITIONAL INFORMATION
Financial Investors Trust (the "Trust") is an open-end, diversified
management investment company with multiple investment portfolios, including the
U.S. Treasury Money Market Fund (the "Treasury Fund"), the U.S. Government Money
Market Fund (the "Government Fund"), the Prime Money Market Fund (the "Prime
Fund"), the Aristata Equity Fund, the Aristata Quality Bond Fund, and the
Aristata Colorado Quality Tax-Exempt Fund (collectively, the "Funds"). This
Statement of Additional Information ("SAI") describes the shares of three Funds
managed by GE Investment Management Incorporated.
THE TREASURY FUND seeks to provide investors with as high a level of
current income as is consistent with preservation of capital and liquidity by
investing exclusively in U.S. Treasury bills, notes and other direct obligations
of the U.S. Treasury and repurchase agreements fully collateralized by direct
U.S. Treasury obligations. The Fund is required to maintain a dollar-weighted
average portfolio maturity of 90 days or less and seeks to maintain its net
asset value per share at $1.00 for purposes of purchases and redemptions.
THE GOVERNMENT FUND seeks to provide investors with as high a level of
current income as is consistent with the preservation of capital and liquidity
by investing exclusively in obligations of the U.S. Government, its agencies and
instrumentalities and repurchase agreements fully collateralized by such
obligations. The Fund is required to maintain a dollar-weighted average
portfolio maturity of 90 days or less and seeks to maintain its net asset value
per share at $1.00 for purposes of purchases and redemptions.
THE PRIME FUND seeks to provide investors with as high a level of current
income as is consistent with the preservation of capital and liquidity by
investing in a defined group of short-term, U.S. dollar denominated money market
instruments. The Fund is required to maintain a dollar-weighted average
portfolio maturity of 90 days or less and seeks to maintain its net asset value
per share at $1.00 for purposes of purchases and redemptions.
Shares of the Funds are offered for sale by ALPS Mutual Funds Services,
Inc., the Sponsor and Distributor, as an investment vehicle for institutional
and high net worth investors.
This Statement of Additional Information is not a prospectus and is only
authorized for distribution when preceded or accompanied by the Funds'
Prospectuses dated August 28, 1997 (Treasury Fund and Government Fund) and
June 12, 1998 (Prime Fund). This Statement of Additional Information
contains additional and more detailed information than that set forth in each
Prospectus and should be read in conjunction with the Prospectuses,
additional copies of which may be obtained without charge from the Trust.
1
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TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE NO.
<S> <C>
Investment Restrictions . . . . . . . . . . . . . . . . . . . . . . . . . 3
Investment Instruments . . . . . . . . . . . . . . . . . . . . . . . . . 4
Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Calculation of Yields and Performance Information . . . . . . . . . . . . 11
Determination of Net Asset Value . . . . . . . . . . . . . . . . . . . . 13
Portfolio Transactions . . . . . . . . . . . . . . . . . . . . . . . . . 14
Exchange Privilege . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Redemptions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Federal Income Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Shares of Beneficial Interest . . . . . . . . . . . . . . . . . . . . . . 16
Distribution Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Other Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Custodian and Sub-Custodian . . . . . . . . . . . . . . . . . . . . . . . 19
Experts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . 19
</TABLE>
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INVESTMENT RESTRICTIONS
The Funds observe the following fundamental investment restrictions which
can be changed only when permitted by law and approved by a majority of a Fund's
outstanding voting securities. A "majority of a Fund's outstanding voting
securities" means the lesser of (i) 67% of the shares represented at a meeting
at which more than 50% of the outstanding shares are represented in person or by
proxies or (ii) more than 50% of the outstanding shares.
The Funds may not:
(1) purchase securities on margin or purchase real estate or interests
therein, commodities or commodity contracts, or make loans, and except that the
Funds may purchase or hold short-term debt securities and enter into repurchase
agreements with respect to its portfolio securities as described in the
Prospectus. For this purpose, repurchase agreements are considered loans;
(2) invest more than 5% of the current value of the total assets of a
Fund in the securities of any one issuer, other than obligations of the United
States Government or its agencies or instrumentalities, and repurchase
agreements fully collateralized by direct obligations of the U.S. Government;
(3) purchase the securities of issuers conducting their principal
business activity in the same industry if, immediately after the purchase and as
a result thereof, the value of the investments of a Fund in that industry would
exceed 25% of the current value of the total assets of the Fund, except that
there is no limitation with respect to investments in obligations of the United
States Government, its agencies or instrumentalities and that the Prime Fund may
invest more than 25% of the value of its total assets in securities issued by
domestic banks;
(4) engage in the underwriting of securities of other issuers, except
to the extent that a Fund may be deemed to be an underwriter in selling, as part
of an offering registered under the Securities Act of 1933, as amended,
securities which it has acquired; or participate on a joint or joint-and-several
basis in any securities trading account. The "bunching" of orders with other
accounts under the management of the Adviser to save commissions or to average
prices among them is not deemed to result in a securities trading account;
(5) effect a short sale of any security, or issue senior securities
except as permitted in paragraph (6). For purpose of this restriction, the
purchase and sale of financial futures contracts and related options does not
constitute the issuance of a senior security;
(6) issue senior securities or otherwise borrow money, except that each
Fund may borrow from banks as a temporary measure for emergency purposes where
such borrowings would not exceed 10% (33 1/3% for the Prime Money Market Fund)
of a Fund's total assets (including the amount borrowed) taken at market value;
or pledge, mortgage or hypothecate its assets, except to secure indebtedness
permitted by this paragraph and then only if such pledging, mortgaging or
hypothecating does not exceed 10% (33 1/3% for the Prime Money Market Fund) of
the Fund's total assets taken at market value;
(7) invest more than 10% of the total assets of a Fund in the
securities of other investment companies, subject to the limitations of Section
12(d)(1) of the 1940 Act;
(8) invest in any security, including repurchase agreements maturing in
over seven days without a liquidation feature or other illiquid investments
which are subject to legal or contractual delays on resale or which are not
readily marketable, if as a result more than 10% of the market value of a Fund's
assets would be so invested;
(9) purchase interests in oil, gas, or other mineral exploration
programs of real estate and real estate mortgage loans except as provided in the
Prospectus;
(10) have dealings on behalf of a Fund with Officers and Trustees of the
Fund, except for the purchase or sale of securities on an agency or commission
basis, or make loans to any officers, directors or employees of the Fund; and
(11) purchase equity securities or other securities convertible into
equity securities.
3
<PAGE>
There will be no violation of any investment restriction if that
restriction is complied with at the time the relevant action is taken
notwithstanding a later change in the market value of an investment, in the net
or total assets of a Fund, in the securities rating of the investment, or any
other later change.
INVESTMENT INSTRUMENTS
The following information supplements the discussion of the investment
objectives and policies of the Funds in each Fund's Prospectus.
U.S. TREASURY OBLIGATIONS. Each Fund may invest, and the Treasury Fund
invests exclusively, in direct obligations of the United States Treasury which
have remaining maturities of 13 months or less and related repurchase
agreements. The United States Treasury issues various types of marketable
securities consisting of bills, notes, bonds and other debt securities. They
are direct obligations of the United States Government and differ primarily in
the length of their maturity. Treasury bills, the most frequently issued
marketable United States Government security, have a maturity of up to one year
and are issued on a discount basis.
U.S. GOVERNMENT AGENCIES. (Government Fund and Prime Fund). The
Government Fund and the Prime Fund may invest in obligations issued or
guaranteed by the United States Government or its agencies or
instrumentalities which have remaining maturities not exceeding thirteen
months. Agencies and instrumentalities which issue or guarantee debt
securities and which have been established or sponsored by the United States
Government include the Banks for Cooperatives, the Export-Import Bank, the
Federal Farm Credit System, the Federal Home Loan Banks, the Federal Home
Loan Mortgage Corporation, the Federal Intermediate Credit Banks, the Federal
Land Banks, the Federal National Mortgage Association and the Student Loan
Marketing Association. United States Government agency and instrumentality
obligations include master notes issued by these entities but do not include
obligations of the World Bank, The Inter-American Development Bank or the
Asian Development Bank.
ASSET-BACKED SECURITIES (Prime Fund). Asset-backed securities
purchased by the Fund may include pools of mortgages, loans, receivables or
other assets. Payment of principal and interest may be largely dependent
upon the cash flows generated by the assets backing the securities.
Asset-backed securities involve certain risks that are not posed by
mortgage-related securities, resulting mainly from the fact that asset-backed
securities do not usually contain the complete benefit of a security interest
in the related collateral. For example, credit card receivables generally
are unsecured and the debtors are entitled to the protection of a number of
state and Federal consumer credit laws, some of which may reduce the ability
to obtain full payment. In the case of automobile receivables, due to
various legal and economic factors, proceeds from repossessed collateral may
not always be sufficient to support payments on these securities. The risks
associated with asset-backed securities are often reduced by the addition of
credit enhancements such as a letter of credit from a bank, excess collateral
or a third-party guarantee. However, the extent of the credit enhancement
may differ amongst securities and generally only applies to a fraction of the
securities' value. With respect to asset-backed securities arising from
secured debt (such as automobile receivables), there is a risk that parties
other than the originator and servicer of the loan may acquire a security
interest superior to that of the securities holders.
BANK OBLIGATIONS (Prime Fund). These obligations include negotiable
certificates of deposit, bankers' acceptances and fixed time deposits and other
obligations issued or supported by banks. The Funds' policy on concentration in
bank obligations and a description of the banks the obligations of which the
Fund may purchase are set forth in the Fund's prospectus. A certificate of
deposit is a short-term, interest-bearing negotiable certificate issued by a
commercial bank against funds deposited in the bank. A bankers' acceptance is a
short-term draft drawn on a commercial bank by a borrower, usually in connection
with an international commercial transaction. The borrower is liable for
payment as is the bank, which unconditionally guarantees to pay the draft at its
face amount on the maturity date. Fixed time deposits are obligations of
foreign branches of United States banks or foreign banks which are payable on a
stated maturity date and bear a fixed rate of interest. Although fixed time
deposits do not have a market, there are no contractual restrictions on the
right to transfer a beneficial interest in the deposit to a third party.
COMMERCIAL PAPER (Prime Fund). Commercial paper includes short-term
unsecured promissory notes, variable rate demand notes and variable rate master
demand notes issued by domestic and foreign bank holding companies,
corporations, financial institutions and government agencies and
instrumentalities (but only in the case of taxable securities). All commercial
paper purchased by the Fund is, at the time of investment, required to be rated
(or issued by an issuer with a similar security rated) in the highest short-term
rating category by two or more Nationally Recognized Statistical Ratings
Organizations ("NRSROs"), or the only NRSRO rating the security, or if unrated,
determined to be of comparable credit quality by the Adviser. Because variable
rate master demand notes are direct lending arrangements between the lender and
the borrower, it is not generally contemplated that they will be traded. There
is no secondary market for variable rate master demand notes, although they are
redeemable, and thus immediately repayable by the borrower, at principal amount,
plus accrued interest, at any time.
4
<PAGE>
CORPORATE DEBT SECURITIES (Prime Fund). Investments in these securities
are limited to non-convertible corporate debt securities such as bonds and
debentures which have thirteen months or less remaining to maturity and which
are rated "A" or better by Standard & Poor's and "A" or better by Moody's and of
comparable high quality ratings by other NRSROs that have rated such securities.
The rating "P-1" is the highest commercial paper rating assigned by Moody's
and the ratings "A-1" and "A-1+" are the highest commercial paper ratings
assigned by Standard & Poor's. Debt securities rated"Aa" or better by Moody's
or "AA" or better by Standard & Poor's are generally regarded as high-grade
obligations. Those rated "Aaa" by Moody's or "AAA" by Standard & Poor's are
judged to be of the highest quality and exhibit an extremely strong ability to
pay interest and repay principal. Those rated "Aa" by Moody's or "AA" by
Standard & Poor's are judged to be of high quality by all standards and differ
from higher rated issues only in a small degree with respect to their ability to
pay interest and repay principal. Those rated "A" by Moody's and Standard
&Poor's possess many favorable attributes and are to be considered as upper
medium grade obligations, although they may be more susceptible to the adverse
effects of changes in circumstances and economic conditions than debt in higher
rated categories.
After purchase by the Fund, a security may cease to be rated or its rating
may be reduced below the minimum required for purchase by the Fund. Neither
event will require a sale of such security by the Fund. However, if the
security is downgraded to a level below that permitted for money market funds
under Rule 2a-7 of the Investment Company Act of 1940, as amended (the "1940
Act"), the Fund's adviser must report such event to the Board of Trustees as
soon as possible to permit the Board to reassess the security promptly to
determine whether it may be retained as an eligible investment for the Fund. To
the extent the ratings given by a NRSRO may change as a result of changes in
such organizations or their rating systems, the Fund will attempt to use
comparable ratings as standards for investments in accordance with the
investment policies contained in the Fund's Prospectus and in this SAI.
LOANS OF PORTFOLIO SECURITIES (Prime Fund). The Fund may lend its
portfolio securities to brokers, dealers and financial institutions, provided:
(1) the loan is secured continuously by collateral consisting of U.S. Government
securities or cash or letters of credit maintained on a daily mark-to-market
basis in an amount at least equal to the current market value of the securities
loaned; (2) the Fund may at any time call the loan and obtain the return of the
securities loaned within five business days; (3) the Fund will receive any
interest or dividends paid on the loaned securities; and (4) the aggregate
market value of securities loaned will not at any time exceed 30% of the total
assets of the Fund.
The Fund will earn income for lending its securities because cash
collateral pursuant to these loans will be invested in short-term money market
instruments. In connection with lending securities, the Fund may pay reasonable
finders, administrative and custodial fees. Loans of securities involve a risk
that the borrower may fail to return the securities or may fail to provide
additional collateral.
MORTGAGE-RELATED SECURITIES. (Government Fund and Prime Fund). The
Government Fund and the Prime Fund may, consistent with their respective
investment objective and policies, invest in mortgage-related securities
issued or guaranteed by the U.S. Government or its agencies or
instrumentalities.
Mortgage-related securities, for purposes of the Fund's Prospectus and this
SAI, represent pools of mortgage loans assembled for sale to investors by
various governmental agencies such as the Government National Mortgage
Association and government-related organizations such as the Federal National
Mortgage Association and the Federal Home Loan Mortgage Corporation, as well as
by nongovernmental issuers such as commercial banks, savings and loan
institutions, mortgage bankers, and private mortgage insurance companies.
Although certain mortgage-related securities are guaranteed by a third party or
otherwise similarly secured, the market value of the security, which may
fluctuate, is not so secured. If the Fund purchases a mortgage-related security
at a premium, that portion may be lost if there is a decline in the market value
of the security whether resulting from changes in interest rates or prepayments
in the underlying mortgage collateral. To an even greater extent than other
interest-bearing securities, the prices of such securities may be extremely
sensitive to, and inversely affected by, changes in interest rates. However,
though the value of a mortgage-related security may decline when interest rates
rise, the converse is not necessarily true since in periods of declining
interest rates the mortgages underlying the securities are prone to prepayment.
For this and other reasons, a mortgage-related security's stated maturity may be
shortened by unscheduled prepayments on the underlying mortgages and, therefore,
it is not possible to predict accurately the security's return to the Fund.
Lower than estimated prepayments from an increase in interest rates might alter
the expected average life of such securities and increase volatility. In
addition, regular payments received in respect of mortgage-related securities
include both interest and principal. No assurance can be given as to the return
a Fund will receive when these amounts are reinvested.
5
<PAGE>
There are a number of important differences among the agencies and
instrumentalities of the U.S. Government that issue mortgage-related securities
and among the securities that they issue. Mortgage-related securities created
by the Government National Mortgage Association ("GNMA") include GNMA Mortgage
Pass-Through Certificates (also known as "Ginnie Maes") which are guaranteed as
to the timely payment of principal and interest and such guarantee is backed by
the full faith and credit of the United States. GNMA is a wholly-owned U.S.
Government corporation within the Department of Housing and Urban Development.
GNMA certificates also are supported by the authority of GNMA to borrow funds
from the U.S. Government to make payments under its guarantee. Mortgage-related
securities issued by the Federal National Mortgage Association ("FNMA") include
FNMA Guaranteed Mortgage Pass-Through Certificates (also known as "Fannie Maes")
which are solely the obligations of the FNMA and are not backed by or entitled
to the full faith and credit of the United States. The FNMA is a
government-sponsored organization owned entirely by private stock-holders.
Fannie Maes are guaranteed as to timely payment of the principal and interest by
FNMA. Mortgage-related securities issued by the Federal Home Loan Mortgage
Corporation ("FHLMC") include FHLMC Mortgage Participation Certificates (also
known as ("Freddie Macs" or "PCs"). The FHLMC is a corporate instrumentality of
the United States, created pursuant to an Act of Congress, which is owned
entirely by Federal Home Loan Banks. Freddie Macs are not guaranteed by the
United States or by any Federal Home Loan Banks and do not constitute a debt or
obligation of the United States or of any Federal Home Loan Bank. Freddie Macs
entitle the holder to timely payment of interest, which is guaranteed by the
FHLMC. The FHLMC currently guarantees timely payment of interest and either
timely payment of principal or eventual payment of principal, depending upon the
date of issue. When the FHLMC does not guarantee timely payment of principal,
FHLMC may remit the amount due on account of its guarantee of ultimate payment
of principal at any time after default on an underlying mortgage, but in no
event later than one year after it becomes payable.
REPURCHASE AGREEMENTS. Each Fund may invest in securities pursuant to
repurchase agreements, whereby the seller agrees to repurchase such securities
at the Fund's cost plus interest within a specified time (generally one day).
The securities underlying the repurchase agreements will consist exclusively of
U.S. Government obligations in which the Funds are otherwise permitted to
invest. While repurchase agreements involve certain risks not associated with
direct investments in the underlying securities, the Funds will follow
procedures designed to minimize such risks. These procedures include effecting
repurchase transactions only with large, well-capitalized banks and registered
broker-dealers having creditworthiness determined by the Adviser to be
substantially equivalent to that of issuers of debt securities rated investment
grade. In addition, the Funds' repurchase agreements will provide that the
value of the collateral underlying the repurchase agreement will always be at
least equal to the repurchase price, including any accrued interest earned on
the repurchase agreement, and that the Funds' custodian will take possession of
such collateral. In the event of a default or bankruptcy by the seller, the
Funds will seek to liquidate such collateral. However, the exercise of the
Funds' right to liquidate such collateral could involve certain costs or delays
and, to the extent that proceeds from any sale upon a default of the obligation
to repurchase were less than the repurchase price, a Fund could suffer a loss.
Repurchase agreements are considered to be loans by an investment company under
the Investment Company Act of 1940 (the "1940 Act"). There is no limit on the
amount of the Funds' net assets that may be subject to repurchase agreements
having a maturity of, or a liquidation feature permitting termination within a
period of, seven days or less. The Funds do not presently intend to enter into
repurchase agreements which will cause more than 10% of a Fund's net assets to
be subject to repurchase agreements having a maturity beyond seven days.
REVERSE REPURCHASE AGREEMENTS (Prime Fund). The Fund may borrow funds by
selling portfolio securities to financial institutions such as banks and
broker/dealers and agreeing to repurchase them at a mutually specified date and
price ("reverse repurchase agreements"). Reverse repurchase agreements involve
the risk that the market value of the securities sold by the Fund may decline
below the repurchase price. The Fund will pay interest on amounts obtained
pursuant to a reverse repurchase agreement. While reverse repurchase agreements
are outstanding, the Fund will maintain in a segregated account cash, or other
liquid assets (as determined by the Board) of an amount at least equal to the
market value of the securities, plus accrued interest, subject to the agreement.
STRIPPED GOVERNMENT SECURITIES. (Prime Fund). Stripped securities are
created by separating the income and principal components of a debt
instrument and selling them separately. The Fund may purchase U.S. Treasury
STRIPS (Separate Trading of Registered Interest and Principal of Securities)
that are created when the coupon payments and the principal payment are
stripped from an outstanding Treasury bond by the Federal Reserve Bank.
Bonds issued by the Resolution Funding Corporation (REFCORP) can also be
stripped in this fashion. REFCORP STRIPS are eligible investments for the
Fund.
The Fund may also purchase privately stripped government securities, which
are created when a dealer deposits a Treasury security or federal agency
security with a custodian for safekeeping and then sells the coupon payments and
principal payments that will be generated by this security. Proprietary
receipts, such as Certificates of Accrual on Treasury Securities (CATS),
Treasury Investment Growth Receipts (TIGRs), and generic Treasury Receipts
(TRs), are stripped U.S. Treasury securities that are separated into their
component parts through trusts created by their broker sponsors. Bonds issued
by the Financing Corporation (FICO) can also be stripped in this fashion.
Because of the SEC's views on privately stripped government securities, the
Fund must evaluate them as it would non-government securities pursuant to
regulatory guidelines applicable to all money market funds. Accordingly, the
Fund currently intends to purchase only those privately stripped government
securities that have either received the highest rating from two NRSROs (or one,
if only one has rated the security), or, if unrated, been judged to be of
equivalent quality by GEIM.
VARIABLE AND FLOATING RATE DEMAND OBLIGATIONS (VRDOS/FRDOS) (Government
Fund and Prime Fund). are obligations that bear variable or floating
interest rates and carry rights that permit holders to demand payment of the
unpaid principal balance plus accrued interest from the issuers or certain
financial intermediaries. Floating rate securities have interest rates that
change whenever there is a change in a designated base rate while variable
rate instruments provide for a specified periodic adjustment in the interest
rate. These formulas are designed to result in a market value for the VRDO
or FRDO that approximates its par value.
A demand instrument with a conditional demand feature must have received
both a short-term and a long-term high quality rating, or, if unrated, have been
determined to be of comparable quality pursuant to procedures adopted by the
Trustees. A demand instrument with an unconditional demand feature may be
acquired solely in reliance upon a
6
<PAGE>
short-term high quality rating or, if unrated, upon a finding of comparable
short-term quality pursuant to procedures to be adopted by the Trustees.
The Prime Fund may invest in fixed-rate bonds that are subject to third
party puts and in participation interests in such bonds held by a bank in trust
or otherwise. These bonds and participation interests have tender options or
demand features that permit the Fund to tender (or put) its bonds to an
institution at periodic intervals and to receive the principal amount thereof.
The Fund considers variable rate instruments structured in this way
(Participating VRDOs) to be essentially equivalent to other VRDOs it purchases.
The Prime Fund may invest in variable or floating rate instruments that
ultimately mature in more than 397 days, if the Fund acquires a right to sell
the instruments that meets certain requirements set forth in Rule 2a-7. A
variable rate instrument (including instruments subject to a demand feature)
that matures in 397 days or less may be deemed to have a maturity equal to the
earlier of the period remaining until the next readjustment of the interest rate
or the date on which principal can be recovered on demand. A variable rate
instrument that matures in greater than 397 days but that is subject to a demand
feature that is 397 days or less may be deemed to have a maturity equal to the
longer of the period remaining until the next readjustment of the interest rate
or the period remaining until the principal amount can be recovered through
demand. A floating rate instrument that matures in more than 397 days but that
is subject to a demand feature may be deemed to have a maturity equal to the
period remaining until the principal amount may be recovered through demand. A
floating rate instrument that matures in 397 days or less shall be deemed to
have a maturity of one day.
The Government Fund and the Prime Fund may invest in variable and floating
rate instruments of the U.S. Government, and its agencies and instrumentalities,
with remaining maturities of 397 days or more provided that they are deemed to
have a maturity of less than 397 days as defined in accordance with the rules of
the SEC. A variable rate instrument that matures in 397 days or more may be
deemed to have a maturity equal to the period remaining until the next
readjustment of the interest rate.
WHEN-ISSUED AND DELAYED-DELIVERY SECURITIES (Prime Fund). The Fund may
purchase securities on a when-issued or delayed-delivery basis. For example,
delivery of and payment for these securities can take place a month or more
after the date of the transaction. The securities so purchased are subject to
market fluctuation during this period and no income accrues to the Fund until
settlement takes place. To facilitate such acquisitions, the Fund will maintain
with the custodian a separate account with a segregated portfolio of liquid
securities in an amount at least equal to such commitments. On the delivery
dates for such transactions, the Fund will meet its obligations from maturities
or sales of the securities held in the separate account and/or from cash flow.
While the Fund normally enters into these transactions with the intention of
actually receiving or delivering the securities, it may sell these securities
before the settlement date or enter into new commitments to extend the delivery
date into the future, if the Adviser considers such action advisable as a matter
of invesment strategy. Such securities have the effect of leverage on a Fund
and may contribute to volatility of the Fund's net asset value.
ZERO COUPON SECURITIES. The Funds may invest in zero coupon securities.
ZERO COUPON BONDS purchased by the Fund do not make regular interest
payments; instead they are sold at a deep discount from their face value and
are redeemed at face value when they mature. Because zero coupon bonds do
not pay current income, their prices can be very volatile when interest rates
change. In calculating its daily dividend, the Fund takes into account as
income a portion of the difference between a zero coupon bond's purchase
price and its face value. The market prices of zero coupon securities
generally are more volatile than the market prices of securities that pay
interest periodically and are more sensitive to changes in interest rates
than non-zero coupon securities having similar maturities and credit
qualities.
MANAGEMENT
TRUSTEES AND OFFICERS
The principal occupations for the past five years of the Trustees and
executive officers of the Trust are listed below. The address of each, unless
otherwise indicated, is 370 Seventeenth Street, Suite 3100, Denver, Colorado
80202. Trustees deemed to be "interested persons" of the Trust for purposes of
the Investment Company Act of 1940, as amended, are indicated by an asterisk.
All of the Trustees were elected at a Special Meeting of shareholders held March
21, 1997.
7
<PAGE>
NAME (AGE) PRINCIPAL OCCUPATION**
- ------------------------------------------------------------------------------
W. Robert Alexander* (69) Mr. Alexander, a member of the Board of
Trustee, Chairman and Trustees since December 1993, is the
President Chief Executive Officer of ALPS Mutual Funds
Services, Inc. which provides administration
and distribution services for proprietary
mutual fund complexes. Prior to co-founding
ALPS, Mr. Alexander was Vice Chairman of
First Interstate Bank of Denver, responsible
for Trust, Private Banking, Retail Banking,
Cash Management Services and Marketing. Mr.
Alexander is currently a member of the Board
of Trustees of the Colorado Trust, Colorado's
largest foundation as well as a Trustee of
the Hunter and Hughes Trusts. Because of his
affiliation with ALPS, Mr. Alexander is
considered an "interested" Trustee of
Financial Investors Trust.
Mary K. Anstine (56) President/Chief Executive Officer, HealthONE,
Trustee Denver, CO; Former Executive Vice President,
First Interstate Bank of Denver. Ms. Anstine
is currently a Director of the Trust Bank of
Colorado, Trustee of the Denver Area Council
of the Boy Scouts of America, a Director of
the Junior Achievement Board and the
Colorado Uplift Board, and a member of the
Advisory Boards for the Girl Scouts Mile Hi
Council and the Hospice of Metro Denver.
Formerly, Ms. Anstine served as a Director
of ALPS from October 1995 to December 1996;
Director of HealthONE; a member of the
American Bankers Association Trust Executive
Committee; and Director of the Center for
Dispute Resolution.
Edwin B. Crowder (66) Mr. Crowder currently operates a marketing
Trustee concern with operations in the U.S. and Latin
America. He has previously engaged in
business pursuits in the restaurant, oil and
gas drilling, and real estate development
industries. Mr. Crowder is a former Director
of Athletics and head football coach at the
University of Colorado.
John R. Moran, Jr. (67) Mr. Moran is President of The Colorado Trust,
Trustee a private foundation serving the
health and hospital community in the State of
Colorado. An attorney, Mr. Moran was formerly
a partner with the firm of Kutak Rock &
Campbell in Denver, Colorado and a member of
the Colorado House of Representatives.
Currently, Mr. Moran is a member of the Board
of Directors and Treasurer of Grantmakers in
Health; a Director of the Conference of
Southwest Foundations; a member of the
Treasurer's Office Investment Advisory
Committee for the University of Colorado; a
Trustee of the Robert J. Kutak Foundation;
Director of the Colorado Wildlife Heritage
Foundation; and a member of the Alumni
Council of the University of Denver College
of Law.
- --------------------------
** Except as otherwise indicated, each individual has held the office shown or
other offices in the same company for the Last five years.
The following table contains relevant information concerning the executive
officers of the Trust.
<TABLE>
<CAPTION>
NAME PRINCIPAL OCCUPATION** SINCE
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C>
William Paston, Product Development Manager of ALPS February 1994
Vice President and Mutual Funds Services, Inc. Prior to joining
Treasurer (41) ALPS, Mr. Paston was an associate with Lipper
Analytical Services, coordinating that firm's
marketing effort in the banking industry.
James V. Hyatt Mr. Hyatt is General Counsel of ALPS April 1998
Secretary (47) Mutual Funds Services, Inc., the Administrator
and Distributor, and a member of the Board of
Directors of The Dairy, a non-profit community
arts center. Prior to joining ALPS, Mr. Hyatt
served as Senior Legal Counsel for FMR Corp. and
Counsel to Fidelity Management Trust Company.
8
<PAGE>
Jeremy O. May Mr. May is a Fund Controller at ALPS October 1997
Assistant Treasurer (28) Mutual Funds Services, Inc., the Administrator and
Distributor. Prior to joining ALPS, Mr. May was an
auditor with Deloitte & Touche LLP in their Denver
office.
</TABLE>
- --------------------------
** Except as otherwise indicated, each individual has held the office shown or
other offices in the same company for the last five years.
Non-interested Trustees of the Trust receive from the Trust an annual
fee in the amount of $4,000 and $500 for attending each Board or committee
meeting and are reimbursed for all reasonable out-of-pocket expenses relating
to attendance at meetings.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------
Pension or Aggregate
Retirement Estimated Compensation
Aggregate Benefits Annual From The Trust
Compensation Accrued As Benefits and Fund
From the Part of Fund Upon Complex Paid
Trust Expenses Retirement to Trustees
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Mary K. Anstine,
Trustee $1,500(1)(2) $0 $0 $1,000
- --------------------------------------------------------------------------------------------------------
Edwin B. Crowder,
Trustee $1,500(1)(2) $0 $0 $1,000
- --------------------------------------------------------------------------------------------------------
John R. Moran, Jr.,
Trustee $1,500(1)(2) $0 $0 $1,000
- --------------------------------------------------------------------------------------------------------
</TABLE>
(1) Amount does not reflect a full year of compensation as the Trustee was
elected on March 21, 1997. If the Trustee had served for an entire year and
attended all regularly scheduled meetings, total Trustee compensation would be
$4,500.
(2) Member of the Audit Committee.
As of the date of this Statement of Additional Information the Trustees and
officers of the Trust as a group owned less than 1% of the outstanding shares of
the Trust.
INVESTMENT ADVISER. The Trust retains GE Investment Management
Incorporated (the "Adviser") as investment adviser for each Fund.
Each Advisory Contract provides that the Adviser will manage the portfolio
of each Fund and will furnish to each Fund investment guidance and policy
direction in connection therewith. The Adviser has agreed to provide to the
Trust, among other things, information relating to money market portfolio
composition, credit conditions and average maturity of the portfolio of each
Fund. Pursuant to each Advisory Contract, the Adviser also furnishes to the
Trust's Board of Trustees periodic reports on the investment performance of the
Funds.
SPONSOR AND DISTRIBUTOR. Shares of the Funds are offered on a continuous
basis through ALPS Mutual Funds Services, Inc., ("ALPS"), the Distributor,
pursuant to the Distribution Contract. The Distributor is not obligated to sell
any specific amount of shares.
9
<PAGE>
ADMINISTRATOR. Pursuant to the Administrative Services Contract, ALPS: (i)
provides administrative services reasonably necessary for the operation of the
Funds (other than those services which are provided by the adviser pursuant to
each advisory contract); (ii) provides the Funds with office space and office
facilities reasonably necessary for the operation of the funds; and (iii)
employs or associates with itself such persons as it believes appropriate to
assist it in performing its obligations under the Administrative Services
Contract.
FEES AND EXPENSES
As compensation for advisory, management and administrative services, the
Adviser and ALPS ("the Administrator") are paid a monthly fee at the following
annual rates:
TREASURY FUND:
<TABLE>
<CAPTION>
PORTION OF AVERAGE DAILY VALUE
OF NET ASSETS OF THE FUND ADVISORY ADMINISTRATIVE(1) TOTAL
<S> <C> <C> <C>
Not exceeding $500 million 0.05% 0.26% 0.31%
In excess of $500 million but
not exceeding $1 billion 0.075% 0.24% 0.315%
In excess of $1 billion but not
exceeding $1.5 billion 0.10% 0.22% 0.32%
In excess of %1.5 billion 0.15% 0.22% 0.37%
GOVERNMENT AND PRIME FUNDS:
PORTION OF AVERAGE DAILY VALUE
OF NET ASSETS OF THE FUND ADVISORY ADMINISTRATIVE(1) TOTAL
Not exceeding $500 million 0.04% 0.16% 0.20%
In excess of $500 million but
not exceeding $1 billion 0.06% 0.14% 0.20%
In excess of $1 billion 0.08% 0.12% 0.20%
</TABLE>
(1) Subject to a minimum monthly fee of $50,000 for the Treasury Fund and
$30,000 for the Government and Prime Funds.
From the inception of each fund through March 23, 1997, FGIC Advisors, Inc.
served as the Investment Adviser to the Treasury and Government Funds. During
this period, Investment Advisory Fees earned by FGIC Advisors, Inc. were as
follows (the Prime Fund had not commenced operations as of March 23, 1997):
<TABLE>
<CAPTION>
Period Ended Year Ended Period Ended
March 23, 1997 April 30, 1996 April 30, 1995(1)
-------------- -------------- -----------------
<S> <C> <C> <C>
U.S. Treasury Money Market Fund
Advisory fees earned 739,988 742,238 264,224
Advisory fees waived (739,988) (742,238) (264,224)
U.S. Government Money Market Fund
Advisory fees earned 110,066 136,073 215,432
Advisory fees waived (110,066) (85,725) (109,039)
</TABLE>
(1) The Treasury Fund and the Government Funds commenced operations on
May 25, 1994 and June 7, 1994, respectively.
At a meeting held on January 20, 1997, the Trustees approved new Advisory
Contracts with the Adviser on behalf of the Treasury and Government Funds. The
new Advisory Contracts were submitted to shareholders of each respective Fund
for their consideration pursuant to a Proxy Statement dated March 3, 1997 and
subsequently approved by a majority of the shareholders of each respective Fund
at a Special Meeting held on March 21, 1997. Effective March 24, 1997, the
Adviser assumed the role of Adviser to each Fund. During the period from March
24, 1997 through April 30, 1997, the Adviser earned $8,799 and $3,542 in
advisory fees from the Treasury and Government Funds, respectively.
10
<PAGE>
The Administrative fees earned by the Administrator under the
Administrative Services Agreement for the last three fiscal periods were as
follows (the Prime Fund had not commenced operations as of April 30, 1997):
<TABLE>
<CAPTION>
Fiscal Period Ended April 30,
1997 1996 1995(1)
---- ---- -------
<S> <C> <C> <C>
U.S. Treasury Money Market Fund
Administrative fees earned 750,000 750,000 687,761
Administrative fees waived (75,890) (190,288) 0
U.S. Government Money Market Fund
Administrative fees earned 92,781 76,135 68,092
Administrative fees waived (3,949) 0 0
</TABLE>
(1) The Treasury Fund and the Government Fund commenced operations on
May 25, 1994 and June 7, 1994, respectively.
The Administrator has stated that it will voluntarily waive a portion of
the administrative fees otherwise payable by each fund, as well as voluntarily
assume a portion of each fund's expenses, to the extent necessary to maintain a
total expense ratio of not more than .33%, .20% and .20% of the average net
assets of the treasury, government and prime funds, respectively. The
Administrator reserves the right to modify or terminate the fee waiver and
assumption of expenses at any time.
Except for the expenses paid by the Adviser under the Advisory Contract and
the Administrator under the Administrative Services Contract, each Fund bears
all costs of its operations. Expenses attributable to the Funds are charged
against the assets of each Fund, respectively.
The Advisory Contract, Distribution Contract and Administrative Services
Contract will continue in effect with respect to each Fund from year to year
provided such continuance is approved annually (i) by the holders of a majority
of the outstanding voting securities of a Fund or by the Trust's Trustees; and
(ii) by a majority of the Trustees who are not parties to such contracts or
"interested persons" (as defined under the 1940 Act) of any such party. Each
contract may be terminated with respect to a Fund at any time, without payment
of any penalty, by a vote of a majority of the outstanding voting securities of
the Fund (as defined in the Investment Company Act of 1940) or by a vote of a
majority of the Trustees. The Advisory Contract, Administrative Services
Contract and the Distribution Contract shall terminate automatically in the
event of their assignment (as defined in the 1940 Act).
The Board of Trustees of the Trust approved the continuance of the
Distribution Contract and Administrative Services Contract for the Treasury and
Government Funds at a meeting of the Board of Trustees on April 15, 1997. As
stated above, the Advisory Contracts for the Treasury and Government Funds were
approved by the Board of Trustees on January 20, 1997 and by the shareholders of
each Fund on March 21, 1997. The Distribution Contract, Administrative Services
Contract and the Advisory Contract for the Prime Fund were approved by the Board
of Trustees on April 21, 1998.
The Trust incurs administration expenses based on the terms of the
Administrative Services Agreement. In the absence of certain fee waivers and
reimbursements, administration fees borne by the Funds might not be in
proportion to relative Fund assets.
CALCULATION OF YIELDS AND PERFORMANCE INFORMATION
Each Fund may, from time to time, include its yield and effective yield in
advertisements or reports to shareholders or prospective investors. Current
yield (or "SEC Seven Day Yield") for each Fund will be based on the change in
the value of a hypothetical investment (exclusive of capital changes) over a
particular 7-day period, less a pro-rata share of a Fund's expenses accrued over
that period (the "base period"), and stated as a percentage of the investment at
the start of the base period (the "base period return"). The base period return
is then annualized by multiplying by 365/7, with the resulting yield figure
carried to at least the nearest hundredth of one percent. "Effective yield" for
the Funds assumes that all dividends received during an annual period have been
reinvested. Calculation of "effective yield" begins with the same "base period
return" used in the calculation of yield, which is then annualized to reflect
weekly compounding pursuant to the following formula: Effective Yield - [(Base
Period Return) + 1) 365/7] - 1.
11
<PAGE>
As of April 30, 1997, the Seven Day Effective Yield and the SEC Seven Day
Yield for the Treasury Fund was 5.31% and 5.17%, respectively. As of April 30,
1997, the Seven Day Effective Yield and the SEC Seven Day Yield for the
Government Fund was 5.43% and 5.29%, respectively. The Prime Fund had not
commenced operations as of April 30, 1997.
Each Fund may, from time to time, include its average annual total returns
in advertisements or reports to shareholders or prospective investors.
Quotations of average annual total return will be expressed in terms of the
average annual compounded rate of return of a hypothetical investment in the
Fund over periods of 1, 5 and 10 years (up to the life of the Fund), calculated
pursuant to the following formulas:
n
P (1 + T) = ERV
(where P = a hypothetical initial payment of
OR $1,000, T = the average annual total return,
n = the number of years, and ERV = the ending
1/n redeemable value of a hypothetical $1,000
T = [C (ERV) - 1] payment made at the beginning of the period).
P
All total return figures will reflect a proportional share of Fund expenses
(net of certain reimbursed expenses) on an annual basis, and will assume that
all dividends and distributions are reinvested when paid. Quotations of total
return will reflect only the performance of a hypothetical investment in the
Funds during the particular time period shown. Total return for the Fund will
vary based on changes in the market conditions and the level of a Fund's
expenses, and no reported performance figure should be considered an indication
of performance, which may be expected in the future.
The yield and total return for each Class of the Prime Fund are calculated
separately due to separate expense structures. The yield and total return of
Class II will be lower than that of Class I.
In connection with communicating its total return to current or prospective
shareholders, each Fund also may compare these figures to the performance of
other mutual funds tracked by mutual fund rating or ranking services or to other
unmanaged indices which may assume reinvestment of dividends but generally do
not reflect deductions for administrative and management costs.
From time to time, in marketing pieces and other Fund literature, the
Funds' total performance may be compared to the performance of broad groups of
comparable funds or unmanaged indices of comparable securities. Evaluations of
Fund performance made by independent sources may also be used in advertisements
concerning the Funds. Sources for Fund performance information may include, but
are not limited to, the following:
Barron's, a Dow Jones and Company, Inc. business and financial weekly
that periodically reviews mutual fund performance data.
Business Week, a national business weekly that periodically reports the
performance rankings and ratings of a variety of mutual funds investing
abroad.
Changing Times, The Kiplinger Magazine, a monthly investment advisory
publication that periodically features the performance of a variety of
securities.
Donoghue's Money Fund Report, a weekly publication of the Donoghue
Organization, Inc., of Holliston, Massachusetts, reporting on the
performance of the nation's money market funds, summarizing money market
fund activity, and including certain averages as performance benchmarks,
specifically "Donoghue's Money Fund Average," and "Donoghue's Government
Money Fund Average."
Financial Times, Europe's business newspaper, which features from time
to time articles on international or country-specific funds.
Forbes, a national business publication that from time to time reports
the performance of specific investment companies in the mutual fund
industry.
12
<PAGE>
Fortune, a national business publication that periodically rates the
performance of a variety of mutual funds. Global Investor, a European
publication that periodically reviews the performance of U.S. Mutual
funds investing internationally.
Lipper Analytical Services, Inc.'s Mutual Fund Performance Analysis, a
weekly publication of industry-wide mutual fund averages by type of fund.
Money, a monthly magazine that from time to time features both specific
funds and the mutual fund industry as a whole.
New York Times, a nationally distributed newspaper which regularly
covers financial news.
Personal Investor, a monthly investment advisory publication that
includes a "Mutual Funds Outlook" section reporting on mutual fund
performance measures, yields, indices and portfolio holdings.
Sylvia Porter's Personal Finance, a monthly magazine focusing on
personal money management that periodically rates and ranks mutual
funds by performance.
Wall Street Journal, a Dow Jones and Company, Inc. newspaper which
regularly covers financial news.
Wiesenberger Investment Companies Services, an annual compendium of
information about mutual funds and other investment companies, including
comparative data on funds' backgrounds, management policies, salient
features, management results, income and dividend records, and price
ranges.
FUND RATINGS. Although it is not an investment objective of the Funds,
consistent with the Funds' investment objectives and restrictions, each Fund may
seek and receive the highest rating from certain nationally recognized
statistical rating organizations (NRSROs), for example, "AAAm" from Standard &
Poor's Ratings Group, a Division of McGraw Hill, Inc., or "AAA/V-1+" from Fitch
Investor Services, Inc. An NRSRO rating is subject to change and neither
insures nor guarantees that the Fund will pay interest or repay principal.
NRSRO ratings represent the opinion of the NRSRO based on the investment
adviser, quality of the Fund's portfolio holdings, and other criteria. If an
NRSRO rating is obtained, the Fund may use the information in advertising or
reports to shareholders or prospective investors.
DETERMINATION OF NET ASSET VALUE
The Funds' net asset value per share is determined by dividing the total
current market value of the assets of a Fund, less liabilities, by the total
number of shares outstanding at the time of determination. All expenses,
including the advisory and administrative fees, are accrued daily and taken into
account for the purpose of determining the net asset value.
As indicated under "Determination of Net Asset Value" in the Funds'
Prospectuses, the Funds use the amortized cost method to determine the value of
their portfolio securities pursuant to Rule 2a-7 under the Investment Company
Act of 1940. The amortized cost method involves valuing a security at its cost
and amortizing any discount or premium over the period until maturity,
regardless of the impact of fluctuating interest rates on the market value of
the security. While this method provides certainty in valuation, it may result
in periods during which the value, as determined by amortized cost, is higher or
lower than the price which the Fund would receive if the security were sold.
During these periods the yield to a shareholder may differ somewhat from that
which could be obtained from a similar fund which utilizes a method of valuation
based upon market prices. Thus, during periods of declining interest rates, if
the use of the amortized cost method resulted in a lower value of the Fund's
portfolio on a particular day, a prospective investor in the Fund would be able
to obtain a somewhat higher yield than would result from an investment in a fund
utilizing solely market values, and existing Fund shareholders would receive
correspondingly less income. The converse would apply during periods of rising
interest rates.
Rule 2a-7 provides that in order to value its portfolio using the amortized
cost method, the Funds must maintain a dollar-weighted average portfolio
maturity of 90 days or less, purchase securities having remaining maturities of
thirteen months or less and invest only in securities determined by the Trust's
Board of Trustees to be "eligible securities" as defined by Rule 2a-7 and to
present minimal credit risks. Pursuant to Rule 2a-7, the Board is required to
establish procedures designed to stabilize, to the extent reasonably possible,
the price per share of the Funds, as computed for the purpose of sales and
redemptions, at $1.00. Such procedures include review of the Funds' portfolio
holdings by the Board of Trustees, at such intervals as it may deem appropriate,
to determine whether the net asset
13
<PAGE>
value of the Fund calculated by using available market quotations deviates
from $1.00 per share based on amortized cost. The extent of any deviation
will be examined by the Board of Trustees. If such deviation exceeds 1/2 of
1%, the Board will promptly consider what action, if any, will be initiated.
In the event the Board determines that a deviation exists which may result in
material dilution or other unfair results to investors or existing
shareholders, the Board will take such corrective action as it regards as
necessary and appropriate, including the sale of portfolio instruments prior
to maturity to realize capital gains or losses or to shorten average
portfolio maturity, withholding dividends or establishing a net asset value
per share by using available market quotations.
Each Fund will compute its net asset value once daily as of 5:00 p.m. (New
York City time), on each day the New York Stock Exchange is open for business
which excludes New Year's Day, Presidents' Day, Good Friday, Memorial Day,
Independence Day, Labor Day, Thanksgiving Day and Christmas.
PORTFOLIO TRANSACTIONS
The Trust has no obligation to deal with any dealer or group of dealers in
the execution of transactions in portfolio securities. Subject to policy
established by the Trustees, the Adviser is primarily responsible for portfolio
decisions and the placing of portfolio transactions. In placing orders, it is
the policy of the Fund to obtain the best results taking into account the
dealer's general execution and operational facilities, the type of transaction
involved and other factors such as the dealer's risk in positioning the
securities involved. While the Adviser generally seeks reasonably competitive
spreads or commissions, the Funds will not necessarily be paying the lowest
spread or commission available.
Purchases and sales of securities will often be principal transactions in
the case of debt securities traded otherwise than on an exchange. Debt
securities normally will be purchased or sold from or to issuers directly or to
dealers serving as market makers for the securities at a net price. Generally,
money market securities are traded on a net basis and do not involve brokerage
commissions. Under the 1940 Act, persons affiliated with the Adviser, the Funds
or the Distributor are prohibited from dealing with the Funds as a principal in
the purchase and sale of securities except in accordance with regulations
adopted by the Securities and Exchange Commission. Under the 1940 Act, persons
affiliated with the Adviser, the Funds or the Distributor may act as a broker
for the Funds. In order for such persons to effect any portfolio transactions
for the Funds, the commissions, fees or other remuneration received by such
persons must be reasonable and fair compared to the commissions, fees or other
remunerations paid to other brokers in connection with comparable transactions
involving similar securities being purchased or sold on an exchange during a
comparable period of time. This standard would allow the affiliate to receive
no more than the remuneration which would be expected to be received by an
unaffiliated broker in a commensurate arms-length transaction. The Trustees of
the Trust will regularly review the commissions paid by the Funds to affiliated
brokers.
The Adviser may, in circumstances in which two or more dealers are in a
position to offer comparable results, give preference to a dealer which has
provided statistical or other research services to the Adviser. By allocating
transactions in this manner, the Adviser is able to supplement its research and
analysis with the views and information of securities firms.
EXCHANGE PRIVILEGE
Shareholders who have held all or part of their shares in one of the Funds
for at least seven days may exchange those shares for shares of the other Fund
if such Fund is available for sale in their state and meets the investment
criteria of the investor.
Before effecting an exchange, shareholders should review the Prospectus of
the other Fund. Exercise of the exchange privilege is treated as a redemption
for income tax purposes and, depending on the circumstances, a gain or loss may
be recognized.
The exchange privilege may be modified or terminated upon sixty (60) days'
written notice to shareholders. Although initially there will be no limit on
the number of times a shareholder may exercise the exchange privilege, the funds
reserve the right to impose such a limitation. Call or write the funds for
further details.
14
<PAGE>
REDEMPTIONS
In the event that a Fund does not maintain a constant net asset value per
share, the proceeds of a redemption may be more or less than the amount invested
and, therefore, a redemption may result in a gain or loss for Federal and state
and local income tax purposes. Any loss realized on the redemption of Fund
shares held, or treated as held, for six months or less will be treated as a
long-term capital loss to the extent of any long-term capital gain dividends
received on the redeemed shares.
A shareholder's account with the Funds remains open for at least one year
following complete redemption and all costs during the period will be borne by
the Funds. This permits an investor to resume investments in the Fund during
the period in an amount of $25,000 or more.
To be in a position to eliminate excessive shareholder expense burdens, the
Funds reserve the right to adopt a policy pursuant to which a Fund may redeem,
upon not less than 30 days' notice, shares of the Fund in an account which has a
value below the designated amount set forth in each Fund's prospectus. However,
any shareholder affected by the exercise of this right will be allowed to make
additional investments prior to the date fixed for redemption to avoid
liquidation of the account. Shareholder accounts which have a value below the
designated amount due to changes in the market value in portfolio securities
will not be redeemed.
The Funds may suspend the right of redemption during any period when (i)
trading on the New York Stock Exchange is restricted or that Exchange is closed,
other than customary weekend and holiday closings, (ii) the Securities and
Exchange Commission has by order permitted such suspension or (iii) an emergency
exists making disposal of portfolio securities or determination of the value of
the net assets of the Fund not reasonably practicable.
Although it would not normally do so, the Trust has the right to pay the
redemption price in whole or in part in securities of a Fund's portfolio as
prescribed by the Trustees. When a shareholder sells portfolio securities
received in this fashion he would incur a brokerage charge. The Trust has,
however, elected to be governed by Rule 18f-1 under the 1940 Act, as amended.
Under that rule, the Trust must redeem its shares for cash except to the extent
that the redemption payments to any shareholder during any 90-day period would
exceed the lesser of $250,000 or 1% of a Fund's net asset value at the beginning
of such period.
FEDERAL INCOME TAXES
The Treasury Fund and the Government Fund have each elected to be
treated as a regulated investment company and qualified as such in 1997. The
Prime Fund will elect to be treated as a regulated investment company and
intends to qualify as such. The Funds intend to continue to so qualify by
complying with the provisions of the Internal Revenue Code of 1986, as
amended (the "Code") applicable to regulated investment companies so that the
Funds will not be liable for Federal income tax with respect to amounts
distributed to shareholders in accordance with the timing requirements of the
Code.
In order to qualify as a regulated investment company for a taxable year,
each Fund must, among other things, (a) derive at least 90% of its gross income
from dividends, interest, payments with respect to securities loans and gains
from the sale or other disposition of stock or securities or foreign currency
gains related to investments in stock or securities or other income (including
but not limited to gains from options, futures or forward contracts) derived
with respect to its business of investing in stock, securities or currency; (b)
diversify its holdings so that, at the end of each quarter of its taxable year,
(i) at least 50% of the market value of the Fund's assets is represented by
cash, cash items, U.S. Government securities, securities of other regulated
investment companies and certain other securities in respect of any one issuer
to an amount not greater in value than 5% of its assets and 10% of the
outstanding voting securities of the issuer, and (ii) not more than 25% of the
value of its total assets is invested in the securities of any one issuer (other
than U.S. Government securities or securities of other regulated investment
companies). As such, and by complying with the applicable provisions of the
Code, the Funds will not be subject to Federal income tax on taxable income
(including realized capital gains) which is distributed to shareholders in
accordance with the timing requirements of the Code.
The amount of capital gains, if any, realized in any given year will result
from sales of securities made with a view to the maintenance of a portfolio
believed by Fund management to be most likely to attain a Fund's investment
objective. Such sales and any resulting gains or losses, may therefore vary
considerably from year to year. Since at the time of an investor's purchase of
shares, a portion of the per share net asset value by which the purchase price
is determined may be represented by realized or unrealized appreciation in a
Fund's portfolio or undistributed income of the Fund, subsequent distributions
(or portions thereof) on such shares may be taxable to such investor even if the
net asset value of his shares is, as a result of the distributions, reduced
below his cost for such shares and the distributions (or portions thereof)
represent a return of a portion of his investment.
15
<PAGE>
The Funds are required to report to the Internal Revenue Service (the
"IRS") all distributions of taxable dividends and of capital gains, as well as
the gross proceeds of share redemptions. The Funds may be required to withhold
Federal income tax at a rate of 31% ("backup withholding") from taxable
dividends (including capital gain dividends) and the proceeds of redemptions of
shares paid to non-corporate shareholders who have not furnished the Fund with a
correct taxpayer identification number and made certain required certifications
or who have been notified by the IRS that they are subject to backup
withholding. The Funds may also be required to withhold Federal income tax at a
rate of 31% if they are notified by the IRS or a broker that the taxpayer
identification number is incorrect or that backup withholding applies because of
underreporting of interest or dividend income.
Distributions of taxable net investment income and net realized capital
gains will be taxable whether made in shares or in cash. In determining
amounts of net realized capital gains to be distributed, any capital loss
carryovers from prior years will be applied against realized capital gains.
Shareholders receiving distributions in the form of additional shares will
have a cost basis for Federal income tax purposes in each share so received
equal to the net asset value of a share of the Fund on the reinvestment date.
Fund distributions will also be included in individual and corporate
shareholders' income on which the alternative minimum tax may be imposed.
Any loss realized upon the redemption of shares held (or treated as held)
for six months or less will be treated as a long-term capital loss to the extent
of any long-term capital gain dividend received on the redeemed shares. Any
loss realized upon the redemption of shares within six months after receipt of
an exempt-interest dividend will be disallowed. All or a portion of a loss
realized upon the redemption of shares may be disallowed to the extent shares
are purchased (including shares acquired by means of reinvested dividends)
within 30 days before or after such redemption. Exchanges are treated as
redemptions for Federal tax purposes.
Different tax treatment is accorded to accounts maintained as IRAs,
including a penalty on early distributions. Shareholders should consult their
tax advisers for more information.
Each Fund will be separate for investment and accounting purposes and will
be treated as a separate taxable entity for Federal income tax purposes.
Each Fund is subject to a 4% nondeductible excise tax to the extent that it
fails to distribute to its shareholders during each calendar year an amount
equal to (a) at least 98% of its ordinary income (excluding any capital gain or
losses) for the calendar year; plus (b) at least 98% of the excess of its
capital gains over capital losses (adjusted for ordinary losses) for the one
year period ending on October 31 of such calendar year; plus (c) any ordinary
income or capital gain net income (adjusted for certain ordinary losses) from
the preceding calendar years which was neither distributed to shareholders nor
taxed to the Fund during such year. The Funds intend to distribute to
shareholders each year an amount sufficient to avoid the imposition of such
excise tax.
It is important to note that for tax years beginning after August 5,
1997, the Taxpayer Relief Act of 1997 repealed Section 851(b)(3) which
required that a RIC must derive less than 30 percent of its gross income from
the sales or disposition of stocks or securities held for less than three
months.
SHARES OF BENEFICIAL INTEREST
The Trust consists of multiple separate portfolios or Funds. When certain
matters affect one Fund but not another, the shareholders would vote as a Fund
regarding such matters. Subject to the foregoing, on any matter submitted to a
vote of shareholders, all shares then entitled to vote will be voted separately
by the Fund unless otherwise required by the 1940 Act, in which case all shares
will be voted in the aggregate. For example, a change in a Fund's fundamental
investment policies would be voted upon only by shareholders of the Fund.
Additionally, approval of the Advisory Contract is a matter to be determined
separately by each Fund. Approval by the shareholders of one Fund is effective
as to that Fund whether or not sufficient votes are received from the
shareholders of the other Fund to approve the proposal as to that Fund. As used
in the Prospectuses and in this Statement of Additional Information, the term
"majority," when referring to approvals to be obtained from shareholders of a
Fund means the vote of the lesser of (i) 67% of the shares of the fund or class
represented at a meeting if the holder of more than 50% of the outstanding
shares of the fund or class are present in person or by proxy, or (ii) more than
50% of the outstanding shares of the fund. The term "majority", when referring
to the approvals to be obtained from shareholders of the trust as a whole means
the vote of the lesser of (i) 67% of the trust's shares represented at a meeting
if the holders of more than 50% of the trust's outstanding shares are present in
person or proxy, or (ii) more than 50% of the trust's outstanding shares.
Shareholders are entitled to one vote for each full share held and fractional
votes for fractional shares held.
16
<PAGE>
The Trust may dispense with annual meetings of shareholders in any year in
which it is not required to elect trustees under the 1940 Act. However, the
Trust undertakes to hold a special meeting of its shareholders if the purpose of
voting on the question of removal of a director or trustees is requested in
writing by the holders of at least 10% of the Trust's outstanding voting
securities, and to assist in communicating with other shareholders as required
by Section 16(c) of the 1940 Act.
Each share of a Fund represents an equal proportional interest in the Fund
with each other share and is entitled to such dividends and distributions out of
the income earned on the assets belonging to the Fund as are declared in the
discretion of the Trustees. In the event of the liquidation or dissolution of
the Trust, shareholders of each Fund are entitled to receive the assets
attributable to such Fund that are available for distribution, and a
distribution of any general assets of the Trust not attributable to a particular
Fund that are available for distribution in such manner and on such basis as the
Trustees in their sole discretion may determine.
Shareholders are not entitled to any preemptive rights. All shares, when
issued, will be fully paid and non-assessable by the Trust.
As of May 31, 1998, the following shareholders owned 5% or more of the
outstanding shares of the Funds as listed below:
<TABLE>
<CAPTION>
FUND PERCENTAGE INTEREST
- -------------------------------------------------------------------------------
<S> <C>
U.S. TREASURY MONEY MARKET FUND
Lake County Collector 15%
18 N. County St.
Waukegan, IL 60085
City of Bridgeport 10%
Attn: Sharon D. Lemdon
45 Lyons Terrace
Bridgeport, CT 06604
Union Labor Life Insurance Co. 8%
111 Massachusetts Ave NW
Washington, DC 20001
Metropolitan District 7%
555 Main Street, Po. Box 800
Hartford, CT 06142-0800
Town of Methuen 5%
P.O. Box 397
Methuen, MA 01844
U.S. GOVERNMENT MONEY MARKET FUND
City of Hartford 13%
City Treasurer's Office
Denise Nappier
550 Main Street
Hartford, CT 06103
District School Board of Pasco 6%
7227 Land O'Lakes Blvd.
Land O Lakes, FL 34639
City of Quincy 11%
1305 Hancock St.
Quincy, MA 02169
17
<PAGE>
County of Rock Island 11%
1504 Third Avenue
Rock Island, IL 61201-8684
First Union National Bank of Florida 16%
Trustee for Orange County Expressway Authority
P.O. Box 44204
Jax, FL 32202
Town of Methuen 7%
P.O. Box 397
Methuen, MA 01844
</TABLE>
DISTRIBUTION PLAN
The Trustees of the Trust have adopted a Distribution Plan on behalf of
Class II of the Prime Fund (the "Plan") pursuant to Rule 12b-1 (the "Rule")
under the 1940 Act. The Rule provides in substance that a mutual fund may
not engage directly or indirectly in financing any activity that is intended
primarily to result in the sale of shares of the fund except pursuant to a
plan adopted by the fund under the Rule. The Trustees have adopted the Plan
to allow the Prime Fund and ALPS to incur distribution expenses. The Plan
provides for payment of a distribution fee (12b-1 fee) of up to 0.30% of the
average net assets of Class II of the Prime Fund (these fees are in addition
to the fees paid to ALPS under the Administration Agreement). The Trust or
ALPS, on behalf of Class II of the Prime Fund, may enter into servicing
agreements (Service Agreements) with banks, broker/dealers or other
institutions (Agency Institutions). The Plan provides that ALPS may use its
fees and other resources to make payments to Agency Institutions for
performance of distribution-related services, including those enumerated
below. The Service Agreements further provide for compensation to
broker/dealers for their efforts to sell Class II shares of the Prime Fund.
The distribution-related services include, but are not limited to, the
following: formulation and implementation of marketing and promotional
activities, such as mail promotions and television, radio, newspaper,
magazine and other mass media advertising; preparation, printing and
distribution of sales literature; preparation, printing and distribution of
prospectuses of the Prime Fund and reports to recipients other than existing
shareholders of the Prime Fund; obtaining such information, analyses and
reports with respect to marketing and promotional activities as ALPS may,
from time to time, deem advisable; making payments to securities dealers and
others engaged in the sales of Class II Shares of the Prime Fund; and
providing training, marketing and support to such dealers and others with
respect to the sale of Class II Shares of the Prime Fund. The Plan
recognizes ALPS may use its fees and other resources to pay expenses
associated with the promotion and administration of activities primarily
intended to result in the sale of shares.
The Plan has been approved by the Trustees, including the majority of
disinterested Trustees. As required by the Rule, the Trustees carefully
considered all pertinent factors relating to the implementation of the Plan
prior to its approval, and have determined that there is a reasonable likelihood
that the Plan will benefit the Prime Fund and its shareholders. To the extent
that the Plan gives ALPS greater flexibility in connection with the distribution
of shares of the class, additional sales of shares may result.
The Plan could be construed as compensation because ALPS is paid a fixed
fee and is given discretion concerning what expenses are payable under the Plan.
ALPS may spend more for marketing and distribution than it receives in fees and
reimbursements from the Prime Fund. However, to the extent fees received exceed
expenses, including indirect expenses such as overhead, ALPS could be said to
have received a profit. For example, if ALPS pays $1 for distribution-related
expenses for Class II of the Prime Fund and receives $2 under the Plan, the $1
difference could be said to be a profit for ALPS. (Because ALPS is reimbursed
for its out-of-pocket direct promotional expenses, the Plan also could be
construed as a reimbursement plan. Until the issue is resolved by the SEC,
unreimbursed expenses
18
<PAGE>
incurred in one year will not be carried over to a subsequent year.) If
after payment by ALPS for marketing and distribution there are any remaining
fees attributable to the Plan, these may be used as ALPS may elect. Since
the amount payable under the Plan will be commingled with ALPS' general
funds, including the revenues it receives in the conduct of its business, it
is possible that certain of ALPS' overhead expenses will be paid out of Plan
fees and that these expenses may include items such as the costs of leases,
depreciation, communications, salaries, training and supplies. The Prime
Fund believes that such expenses, if paid, will be paid only indirectly out
of the fees being paid under the Plan.
OTHER INFORMATION
The Trust's Registration Statement, including the Prospectuses, the
Statement of Additional Information and the exhibits filed therewith, may be
examined at the office of the SEC in Washington, D.C. Statements contained in
the Prospectuses or the Statement of Additional Information as to the contents
of any contract or other document referred to herein or in the Prospectuses are
not necessarily complete, and, in each instance, reference is made to the copy
of such contract or other document filed as an exhibit to the Registration
Statement, each such statement being qualified in all respects by such
reference.
CUSTODIAN AND SUB-CUSTODIAN
State Street Bank & Trust Company of Connecticut, N.A. acts as Custodian
for the Trust. The Custodian, among other things, maintains a custody account
or accounts in the name of the Funds; receives and delivers all assets for the
Funds upon purchase and upon sale or maturity; collects and receives all income
and other payments and distributions on account of the assets of the Funds and
pays all expenses of the Funds. For its services as Custodian, State Street
receives an asset-based fee and transaction charges. State Street Bank and
Trust Company serves as Sub-Custodian for the Trust. The Administrative
Services Agreement between ALPS Mutual Fund Services and the Trust currently
provides that the asset-based fee and transaction costs of the Trust's Custodian
and Sub-Custodian be paid by ALPS Mutual Fund Services. The Sub-Custodian was
paid $79,942, $83,234 and $76,684, for the years ended April 30, 1997, and April
30, 1996 and for the period ended April 30, 1995, respectively for custody
services.
EXPERTS
The financial statements and the related financial statement schedules
incorporated in this prospectus by reference from the April 30, 1997 Annual
Report of Financial Investors Trust have been audited by Deloitte & Touche,
independent auditors, as stated in their report, which is incorporated herein
by reference, and have been so incorporated in reliance upon the report of such
firm given upon their authority as experts in accounting and auditing.
FINANCIAL STATEMENTS
The Treasury and Government Funds' financial statements and financial
highlights for the fiscal year ended April 30, 1997 are included in the Trust's
Annual Report which is a separate report supplied independent of this Statement
of Additional Information. The Prime Fund had not commenced operations as of
April 30, 1997. The Treasury and Government Funds' financial statements and
financial highlights are incorporated herein by reference.
19
<PAGE>
PART C. OTHER INFORMATION
Item 24. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements for the fiscal year ended April 30, 1997 with
respect to the U.S. Government Money Market Fund and the U.S.
Treasury Money Market Fund are incorporated by reference to Item
24(a) of Post Effective Amendment No. 7 to the Trust's Registration
Statement filed August 28, 1997.
(b) EXHIBITS
* (1)(a) Trust Instrument.
* (1)(b) Revised Trust Instrument.
* (2)(a) By-Laws of Registrant.
* (2)(b) Revised By-Laws of Registrant.
(3) None.
(4) None.
* (5)(a) Investment Advisory Contract between Registrant and GE
Investment Management, Incorporated with respect to the
U.S. Treasury Money Market Fund.
* (5)(b) Investment Advisory Contract between Registrant and GE
Investment Management, Incorporated with respect to the
U.S. Government Money Market Fund.
** (5)(c) Investment Advisory Contract between Registrant and
Tempest, Isenhart, Chafee, Lansdowne & Associates, Inc.
with respect to the Aristata Equity Fund.
** (5)(d) Investment Advisory Contract between Registrant and
Tempest, Isenhart, Chafee, Lansdowne & Associates, Inc.
with respect to the Aristata Quality Bond Fund.
** (5)(e) Investment Advisory Contract between Registrant and
Tempest, Isenhart, Chafee, Lansdowne & Associates, Inc.
<PAGE>
with respect to the Aristata Colorado Quality Tax
Exempt Fund.
** (5)(f) Investment Advisory Contract between Registrant and
GE Investment Management, Incorporated with respect to
the Prime Money Market Fund.
** (6)(a) Distribution Agreement between Registrant and
ALPS Mutual Funds Services, Inc.
** (6)(b) Amended and restated Administration Agreement between
Registrant and ALPS Mutual Funds Services, Inc.
(7) None.
* (8)(a) Custodian Contract between Registrant and State Street
Bank and Trust Company.
** (8)(b) Custodian Contract between Registrant and Fifth
Third Bank.
** (9)(a) Transfer Agency and Service Agreement between
Registrant and ALPS Mutual Funds Services, Inc.
** (9)(c) Bookkeeping and Pricing Agreement between Registrant
and ALPS Mutual Funds Services, Inc.
(12) None.
*** (13) Subscription Agreement.
(14) None.
(15) None.
* (16) Schedule of Computation of Performance Calculation.
* (17) Financial Data Schedule
(18) None
** (99.B10) Consent of Davis, Graham & Stubbe LLP, counsel to
Registrant
** (99.B11) Consent of Independent Public Accountants.
(a) OTHER EXHIBITS
* (a) Power of Attorney dated April 15, 1997.
* Filed with Post-Effective Amendment No. 7 to Registrant's Registration
Statement on August 28, 1997.
<PAGE>
** Filed herewith.
*** Filed with Post-Effective Amendment No. 5 to Registrant's Registration
Statement on August 28, 1996.
Item 25. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT.
None.
Item 26. NUMBER OF HOLDERS OF SECURITIES.
As of April 30, 1998:
U.S. Treasury Money Market Fund 304
Government Money Market Fund 80
Aristata Equity Fund 8
Aristata Quality Bond Fund 5
Aristata Colorado Quality Tax-Exempt Fund 7
Item 27. INDEMNIFICATION.
As permitted by Section 17(h) and (i) of the Investment Company Act
of 1940 (the "1940 Act") and pursuant to Article X of the Registrant's Trust
Instrument (Exhibit 1 to the Registration Statement), Section 7 of each
Investment Advisory Agreement (Exhibits 5(a), 5(b), 5(c), 5(d) and 5(e) to this
Registration Statement) and Sections 1.9 and 1.10 of the Distribution Agreement
(Exhibit 6(a) to this Registration Statement), officers, trustees, employees and
agents of the Registrant will not be liable to the Registrant, any shareholder,
officer, trustee, employee, agent or other person for any action or failure to
act, except for bad faith, willful misfeasance, gross negligence or reckless
disregard of duties, and those individuals may be indemnified against
liabilities in connection with the Registrant, subject to the same exceptions.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 (the "Securities Act") may be permitted to trustees,
officers and controlling persons of the Registrant pursuant to the foregoing
provisions, or otherwise, the Registrant understands that in the opinion of the
Securities and Exchange 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 trustee, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such trustee, 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 of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
<PAGE>
The Registrant has purchased an insurance policy insuring its officers
and trustees against liabilities, and certain costs of defending claims
against such officers and trustees, to the extent such officers and trustees
are not found to have committed conduct constituting willful misfeasance, bad
faith, gross negligence or reckless disregard in the performance of their
duties. The insurance policy also insures the Registrant against the cost of
indemnification payments to officers under certain circumstances.
Section 7 of each Investment Advisory Contract and Section 1.9 of the
Distribution Contract limit the liability of GE Investment Management, Inc.,
Tempest, Isenhart, Chafee, Lansdowne & Associates, Inc. and ALPS Mutual Funds
Services, Inc., respectively, to liabilities arising from willful misfeasance,
bad faith or gross negligence in the performance of their respective duties or
from reckless disregard by them of their respective obligations and duties under
the agreements.
The Registrant hereby undertakes that it will apply the indemnification
provisions of its Declaration of Trust, By-Laws, Investment Advisory Contracts
and Distribution Contract in a manner consistent with Release No. 11330 of the
Securities and Exchange Commission under the 1940 Act so long as the
interpretations of Section 17(h) and 17(i) of such Act remain in effect and are
consistently applied.
Item 28. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISERS
With respect to the U.S. Government Money Market Fund, the U.S.
Treasury Money Market Fund, the Prime Money Market Fund, the Aristata
Colorado Quality Tax Exempt Fund, the Aristata Quality Bond Fund and the
Aristata Equity Fund, reference is made to "Management of the Fund" in the
Prospectus for each such Fund forming Part A and "Management" in the
Statement of Additional Information for such Funds forming Part B of this
Registration Statement.
The list required by this Item 28 of officers and directors of GEIM,
together with information as to any other business, profession, vocation or
employment of a substantial nature engaged in by those officers and directors
during the past two years, is incorporated by reference to Schedules A and D of
Form ADV filed by GEIM pursuant to the Investment Advisers Act of 1940, as
amended (SEC File No. 801-31947).
The list required by this Item 28 of officers and directors of Tempest,
Isenhart, Chafee, Lansdowne & Assocs., together with information as to any other
business, profession, vocation or employment of a substantial nature engaged in
by those officers and directors during the past two years, is incorporated by
reference to Schedules A and D of Form ADV filed by Tempest pursuant to the
Investment Advisers Act of 1940, as amended (SEC File No. 801-11809-3).
Item 29. PRINCIPAL UNDERWRITER
(a) ALPS Mutual Funds Services, Inc. acts as
Distributor/Underwriter for various other unrelated
registered investment companies.
<PAGE>
(b) Officers and Directors
<TABLE>
<CAPTION>
Name and Principal Positions and Offices with Positions and Offices with
Business Address* Registrant Underwriter
- ---------------------- -------------------------------- ---------------------------
<S> <C> <C>
W. Robert Alexander Chairman of the Board of Chairman, Chief Executive
Trustees and President Officer and Secretary
Arthur J. L. Lucey None President
Thomas A. Carter None Vice President and Chief
Financial Officer
Edmund J. Burke None Executive Vice President
James V. Hyatt Secretary General Counsel
William N. Paston Vice President and Treasurer Vice President
Rick A. Pederson None Director
Chris Woessner None Director
</TABLE>
- --------------------------
* All addresses are 370 Seventeenth Street, Suite 3100, Denver,
Colorado 80202.
(c) Not applicable.
Item 30. LOCATION OF ACCOUNTS AND RECORDS
All accounts, books and other documents required to be maintained
by Section 31(a) of the Investment Company Act of 1940 and the rules
thereunder are maintained at the offices of ALPS Mutual Funds Services, Inc.,
General Electric Investment Management Incorporated and Tempest, Isenhart,
Chafee, Lansdowne & Associates, Inc.
Item 31. MANAGEMENT SERVICES
Not applicable.
Item 32. UNDERTAKINGS.
(a) Registrant undertakes to call a meeting of shareholders for
the purpose of voting upon the removal of a trustee if
requested to do so by the holders
<PAGE>
of at least 10% of the Registrant's outstanding shares.
(b) Registrant undertakes to provide the support to shareholders
specified in Section 16(c) of the 1940 Act as though that
section applied to the Registrant.
(c) Registrant hereby undertakes to furnish each person to whom
a prospectus is delivered with a copy of Registrant's latest
annual report upon request and without a charge.
(d) With respect to the Aristata Equity Fund, Aristata Quality
Bond Fund, the Aristata Colorado Quality Tax Exempt Fund
and the Prime Money Market Fund, Registrant undertakes to
file a Post-Effective Amendment using financial statements,
which need not be certified, within four to six months
following the effective date of each such Fund.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, Registrant has duly caused this Post-Effective
Amendment No. 9 of its Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the city of Denver, and State of
Colorado, on June 12, 1998.
FINANCIAL INVESTORS TRUST
(Registrant)
By: /s/ W. ROBERT ALEXANDER
------------------------
W. Robert Alexander
Trustee and President
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 indicated.
Signature Title Date
- --------- ----- ----
/s/ W. ROBERT ALEXANDER Trustee and June 12, 1998
- ------------------------ President
W. Robert Alexander
/s/ WILLIAM PASTON Vice President and June 12, 1998
- ------------------- Treasurer (Principal
William Paston Financial Officer)
/s/ MARY K. ANSTINE* Trustee June 12, 1998
- ---------------------
Mary K. Anstine
/s/ EDWIN B. CROWDER* Trustee June 12, 1998
- ----------------------
Edwin B. Crowder
/s/ JOHN R. MORAN, JR* Trustee June 12, 1998
- -----------------------
John R. Moran, Jr.
- ------------------------------------------
* Signature affixed by James V. Hyatt pursuant to a Power of Attorney dated
April 15, 1997 and filed with Post-Effective Amendment No. 7 to Registrant's
Registration Statement on August 28, 1997.
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
- --------------------------------------------------------------------------------
EXHIBITS
to
FORM N-1A
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
AND
THE INVESTMENT COMPANY ACT OF 1940
- --------------------------------------------------------------------------------
FINANCIAL INVESTORS TRUST
<PAGE>
EXHIBIT INDEX
Exhibit
Number Document
- ------- --------
5(c) Investment Advisory Contract between the Registrant and Tempest,
Isenhart, Chafee, Lansdowne & Associates, Inc. with respect to the
Aristata Equity Fund.
5(d) Investment Advisory Contract between the Registrant and Tempest,
Isenhart, Chafee, Lansdowne & Associates, Inc. with respect to the
Aristata Quality Bond Fund.
5(e) Investment Advisory Contract between the Registrant and Tempest,
Isenhart, Chafee, Lansdowne & Associates, Inc. with respect to the
Aristata Colorado Quality Tax-Exempt Fund.
5(f) Investment Advisory Contract between the Registrant and GE
Investment Management Incorporated with respect to the Prime Money
Market Fund.
6(a) Distribution Agreement between Registrant and ALPS Mutual Funds
Services, Inc.
6(b) Amended and restated Administration Agreement between Registrant and
ALPS Mutual Funds Services, Inc.
8(b) Custodian Contract between Registrant and Fifth Third Bank.
9(a) Transfer Agency and Service Agreement between Registrant and ALPS
Mutual Funds Services, Inc.
9(c) Bookkeeping and Pricing Agreement between Registrant and ALPS
Mutual Funds Services, Inc.
99.B10 Consent of Davis, Graham & Stubbs, LLP, counsel to Registrant.
99.B11 Consent of Independent Public Accountants.
<PAGE>
INVESTMENT ADVISORY AGREEMENT
ARISTATA EQUITY FUND
(A SERIES OF FINANCIAL INVESTORS TRUST)
THIS INVESTMENT ADVISORY AGREEMENT (the "Agreement") is made this 20th day
of February, 1998, between TEMPEST, ISENHART, CHAFEE, LANSDOWNE & ASSOC., INC.,
a Colorado corporation ("Tempest Isenhart"), and FINANCIAL INVESTORS TRUST, a
Delaware business trust (the "Trust"), with respect to the ARISTATA EQUITY FUND,
a series of the Trust (the "Fund").
RECITALS
A. The Trust is registered as an open-end management investment company
under the Investment Company Act of 1940, as amended (the "1940 Act"), and has
registered its shares for public offering under the Securities Act of 1933, as
amended (the "1933 Act").
B. The Trust is authorized to create separate series of shares, each with
its own separate investment portfolio, one of such series created by the Trust
being the Fund.
C. The Trust and Tempest Isenhart deem it mutually advantageous that
Tempest Isenhart should assist the Trustees and officers of the Trust in the
management of the securities portfolio of the Fund.
AGREEMENT
For good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties agree as follows:
1. APPOINTMENT. The Trust hereby appoints Tempest Isenhart as
investment adviser and manager with respect to the Fund for the period and on
the terms set forth in this Agreement. Tempest Isenhart hereby accepts such
appointment and agrees to render the services herein set forth, for the
compensation herein provided.
2. INVESTMENT ADVISORY FUNCTIONS. In its capacity as investment
adviser to the Fund, Tempest Isenhart shall have the following duties and
responsibilities:
(a) To manage the investment operations of the Fund and the
composition of its investment portfolio, and to determine without
prior consultation with the Trust, what securities and other
assets of the Fund will be acquired, held, disposed of or loaned,
in conformity with the investment objective, policies and
restrictions and the other statements concerning the Fund in the
Trust's trust instrument, as amended from time to time (the
"Trust Instrument"), bylaws, and registration statements under
the 1940 Act and
1
<PAGE>
the 1933 Act, the Investment Advisers Act of 1940, as amended
(the "Advisers Act"), the rules thereunder, and all other
applicable federal and state laws and regulations, and the
provisions of the Internal Revenue Code of 1986, as amended,
applicable to the Fund as a regulated investment company;
(b) To cause its officers to attend meetings and furnish oral or
written reports, as the Trustees may reasonably require, in order
to keep the Trustees and appropriate officers of the Trust fully
informed as to the condition of the investment portfolio of the
Fund, the investment decisions of Tempest Isenhart, and the
investment considerations which have given rise to those
decisions;
(c) To place orders for the purchase and sale of securities for
investments of the Fund and for other related transactions; to
give instructions to the custodian (including any subcustodian)
of the Fund as to deliveries of securities to and from such
custodian and receipt and payments of cash for the account of the
Fund, and advise the Trust on the same day such instructions are
given; to submit such reports relating to the valuation of the
Fund's assets and to otherwise assist in the calculation of the
net asset value of shares of the Fund as may reasonably be
requested; on behalf of the Fund, to exercise such voting rights,
subscription rights, rights to consent to corporate action and
any other rights pertaining to the Fund's assets that may be
exercised, in accordance with any policy pertaining to the same
that may be adopted or agreed to by the Trustees of the Trust,
or, in the event that the Trust retains the right to exercise
such voting and other rights, to furnish the Trust with advice as
to the manner in which such rights should be exercised;
(d) To maintain all books and records required to be maintained by
Tempest Isenhart pursuant to the 1940 Act and the rules and
regulations promulgated thereunder, as the same may be amended
from time to time, with respect to transactions on behalf of the
Fund, and shall furnish the Trustees with such periodic and
special reports as the Trustees reasonably may request. Tempest
Isenhart agrees that all records which it maintains for the Fund
are the property of the Trust, agrees to permit the reasonable
inspection thereof by the Trust or its designees and agrees to
preserve for the periods prescribed under the 1940 Act any
records which it maintains for the Fund and which are required to
be maintained under the 1940 Act, and further agrees to surrender
promptly to the Trust or its designees any records which it
maintains for the Trust upon request by the Trust; and
2
<PAGE>
(e) At such times as shall be reasonably requested by the Trustees,
to provide the Trustees with economic, operational and investment
data and reports, including without limitation all information
and materials reasonably requested by or requested to be
delivered to the Trustees of the Trust pursuant to Section 15(c)
of the 1940 Act, and make available to the Trustees any economic,
statistical and investment services normally available to similar
investment company clients of Tempest Isenhart.
3. FURTHER OBLIGATIONS. In all matters relating to the performance of
this Agreement, Tempest Isenhart shall act in conformity with the Trust's Trust
Instrument, bylaws and currently effective registration statements under the
1940 Act and the 1933 Act and any amendments or supplements thereto (the
"Registration Statements") and with the written policies, procedures and
guidelines of the Fund, and written instructions and directions of the Trustees
of the Trust and shall comply with the requirements of the 1940 Act, the
Advisers Act, the rules thereunder, and all other applicable federal and state
laws and regulations. The Trust agrees to provide Tempest Isenhart with copies
of the Trust's Trust Instrument, bylaws, Registration Statements, written
policies, procedures and guidelines, and written instructions and directions of
the Trustees, and any amendments or supplements to any of them at, or, if
practicable, before the time such materials become effective.
4. OBLIGATIONS OF TRUST. The Trust shall fulfill or cause its agents to
fulfill the following obligations under this Agreement:
(a) To keep Tempest Isenhart continuously and fully informed as to
the composition of the investment portfolio of the Fund and the
nature of all of the Fund's assets and liabilities from time to
time;
(b) To furnish Tempest Isenhart with a certified copy of any
financial statement or report prepared for the Fund by certified
or independent public accountants and with copies of any
financial statements or reports made to the Fund's shareholders
or to any governmental body or securities exchange;
(c) To furnish Tempest Isenhart with any further materials or
information which Tempest Isenhart may reasonably request to
enable it to perform its function under this Agreement; and
(d) To compensate Tempest Isenhart for its services in accordance
with the provisions of Section 5 hereof.
3
<PAGE>
5. COMPENSATION. The Trust shall pay to Tempest Isenhart for its
services under this Agreement a fee, payable in United States dollars, at an
annual rate of 0.85% of the average daily net asset value of the Fund. This fee
shall be computed and accrued daily and payable monthly on the last day of each
month during which or part of which this Agreement is in effect. For the month
during which this Agreement becomes effective and the month during which it
terminates, however, there shall be an appropriate proration of the fee payable
for such month based on the number of calendar days of such month during which
this Agreement is effective.
6. EXPENSES.
(a) EXPENSES PAID BY THE TRUST. The Trust assumes and shall pay all
expenses incidental to its operations and business not specifically assumed or
agreed to be paid by Tempest Isenhart hereunder or otherwise, including, but not
limited to, any compensation, fees or reimbursements which the Trust pays to its
Trustees who are not interested persons of Tempest Isenhart; compensation of the
Fund's custodian, transfer agent, registrar and dividend disbursing agent and
other service providers; legal, accounting, audit and printing expenses;
administrative, clerical, record keeping and bookkeeping expenses; brokerage
commissions and all other expenses in connection with execution of portfolio
transactions; interest; all federal, state and local taxes (including stamp,
excise, income and franchise taxes); costs of stock certificates and expenses of
delivering such certificates to the purchasers thereof; expenses of local
representation in Delaware; expenses of shareholders' meetings and of preparing,
printing and distributing proxy statements, notices, and reports to
shareholders; expenses of preparing and filing reports and tax returns with
federal and state regulatory authorities; all expenses incurred in complying
with all federal and state laws and the laws of any foreign country applicable
to the issue, offer or sale of shares of the Fund, including, but not limited
to, all costs involved in preparing, printing and mailing prospectuses and
statements of additional information to shareholders of the Fund; and all fees,
dues and other expenses incurred by the Trust in connection with the membership
of the Trust in any trade association or other investment company organization.
(b) EXPENSES PAID BY TEMPEST ISENHART. Tempest Isenhart shall pay all its
own costs and expenses incurred in rendering the services required under this
Agreement. In addition to such costs and expenses, Tempest Isenhart shall incur
and pay reasonable compensation, fees and related expenses of any of the Trust's
officers or Trustees who are interested persons of Tempest Isenhart.
7. BROKERAGE COMMISSIONS. For purposes of this Agreement, brokerage
commissions paid by the Fund upon the purchase or sale of its portfolio
securities shall be considered a cost of securities of the Fund and shall be
paid by the Fund. Absent instructions from the Trust to the contrary, Tempest
Isenhart is authorized and directed to place Fund portfolio transactions only
with brokers and dealers who render satisfactory service in the execution of
orders at the
4
<PAGE>
most favorable prices and at reasonable commission rates, provided, however,
that Tempest Isenhart may pay a broker an amount of commission for effecting a
securities transaction in excess of the amount of commission another broker
would have charged for effecting that transaction if Tempest Isenhart determines
in good faith that such amount of commission was reasonable in relation to the
value of the brokerage and research services provided by such broker viewed in
terms of either that particular transaction or the overall responsibilities of
Tempest Isenhart. Tempest Isenhart is also authorized to consider sales of Fund
shares as a factor in selecting broker-dealers to execute Fund portfolio
transactions. In placing portfolio business with such broker-dealers, Tempest
Isenhart shall seek the best execution of each transaction. Notwithstanding the
foregoing, the Trustees of the Trust may establish policies or guidelines to be
followed by Tempest Isenhart in placing portfolio transactions for the Trust
pursuant to the foregoing provisions. Tempest Isenhart shall report on the
placement of portfolio transactions in the prior fiscal quarter at each
quarterly meeting of such Trustees. To the extent consistent with applicable
law, purchase or sell orders for the Fund may be aggregated with simultaneous
purchase or sell orders for other clients of Tempest Isenhart. Whenever Tempest
Isenhart simultaneously places orders to purchase or sell the same security on
behalf of the Fund and one or more other clients of Tempest Isenhart, such
orders will be allocated as to price and amount among all such clients in a
manner reasonably believed by Tempest Isenhart to be fair and equitable to each
client. The Trust recognizes that in some cases, this procedure may adversely
affect the results obtained for the Fund.
8. TERMINATION. This Agreement may be terminated at any time, without
penalty, by the Trustees of the Trust, or by the shareholders of the Fund acting
by vote of at least a majority of its outstanding voting securities, provided in
either case that sixty (60) days' advance written notice of termination be given
to Tempest Isenhart at its principal place of business. This Agreement may be
terminated by Tempest Isenhart at any time, without penalty, by giving sixty
(60) days' advance written notice of termination to the Trust, addressed to its
principal place of business. The Trust agrees that, the name "Aristata" is the
property of Tempest Isenhart, and that the Trust is using such name in the name
of the Fund with the permission of Tempest Isenhart, and that the Trust shall
cease to use the name Aristata in connection with the Fund as soon as reasonably
practicable following any termination of this Agreement if Tempest Isenhart does
not continue to provide investment advice to the Fund after such termination.
9. ASSIGNMENT. This Agreement shall terminate automatically in the event
of any assignment of this Agreement.
10. TERM. This Agreement shall continue in effect until February 19,
2000, unless sooner terminated in accordance with its terms, and shall
continue in effect from year to year thereafter only so long as such
continuance is specifically approved at least annually by the vote of a
majority of the Trustees of the Trust who are not parties hereto or
interested persons of any such party, cast in person at a meeting called for
the purpose of voting on the approval of the terms
5
<PAGE>
of such renewal, and by either the Trustees of the Trust or the affirmative vote
of a majority of the outstanding voting securities of the Fund.
11. AMENDMENTS. This Agreement may be amended by the parties only if such
amendment is specifically approved (i) by a majority of the Trustees, including
a majority of the Trustees who are not interested persons of the Fund or Tempest
Isenhart and, (ii) if required by applicable law, by the affirmative vote of a
majority of the outstanding voting securities of the Fund.
12. ALLOCATION OF EXPENSES. The Trustees shall determine the basis for
making an appropriate allocation of the Trust's expenses (other than those
directly attributable to the Fund) between the Fund and any other series of the
Trust.
13. LIMITATION ON PERSONAL LIABILITY. NOTICE IS HEREBY GIVEN that the
Trust is a business trust organized under the Delaware Business Trust Act
pursuant to a Certificate of Trust filed in the office of the Secretary of State
of the State of Delaware. All parties to this Agreement acknowledge and agree
that the Trust is a series trust and all debts, liabilities, obligations and
expenses incurred, contracted for or otherwise existing with respect to a
particular series shall be enforceable against the assets held with respect to
such series only, and not against the assets of the Trust generally or against
the assets held with respect to any other series and further that no trustee,
officer or holder of shares of beneficial interest of the Trust shall be
personally liable for any of the foregoing.
14. LIMITATION OF LIABILITY OF TEMPEST ISENHART. Tempest Isenhart shall
not be liable for any error of judgment or mistake of law or for any loss
arising out of any investment or for any act or omission taken with respect to
the Fund, 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 and except to the extent otherwise provided by law.
15. ACTIVITIES OF TEMPEST ISENHART. The services of Tempest Isenhart to
the Trust hereunder are not intended to be exclusive, and Tempest Isenhart and
its affiliates are free to render services to other parties, so long as its
services under this Agreement are not materially adversely affected or otherwise
impaired thereby. Nothing in this Agreement shall limit or restrict the right
of any director, officer or employee of Tempest Isenhart to engage in any other
business or to devote his or her time and attention in part to the management or
other aspects of any other business, whether of a similar nature or a dissimilar
nature. It is understood that trustees, officers and shareholders of the Trust
are or may become interested in Tempest Isenhart as directors, officers and
shareholders of Tempest Isenhart, that directors, officers, employees and
shareholders of Tempest Isenhart are or may become similarly interested in the
Trust, and that Tempest Isenhart may become interested in the Trust as a
shareholder or otherwise.
6
<PAGE>
16. CERTAIN DEFINITIONS. The terms "vote of a majority of the outstanding
voting securities", "assignment", "approved at least annually" and "interested
persons" when used herein, shall have the respective meanings specified in the
1940 Act, as now in effect or hereafter amended, and the rules and regulations
thereunder, subject to such orders, exemptions and interpretations as may be
issued by the Securities and Exchange Commission under said Act and as may be
then in effect. Where the effect of a requirement of the federal securities
laws reflected in any provision of this Agreement is made less restrictive by a
rule, regulation, order, interpretation or other authority of the Securities and
Exchange Commission, whether of special or general application, such provision
shall be deemed to incorporate the effect of such rule, regulation, order,
interpretation or other authority.
17. GOVERNING LAW. This Agreement shall be construed in accordance with
the laws of the State of Colorado (without giving effect to the conflicts of
laws principles thereof) and the 1940 Act. To the extent that the applicable
laws of the State of Colorado conflict with the applicable provisions of the
1940 Act, the latter shall control.
18. MISCELLANEOUS. The headings in this Agreement are included for
convenience of reference only and in no way define or limit any of the
provisions thereof or otherwise affect their construction or effect. If any
provision of this Agreement shall be held or made invalid by a court decision,
statute, rule or otherwise, the remainder of this Agreement shall not be
affected thereby. This Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective successors.
IN WITNESS WHEREOF, the parties have caused their duly authorized officers
to execute this Investment Advisory Agreement as of the date and year first
above written.
TEMPEST, ISENHART, CHAFEE, LANSDOWNE
& ASSOC., INC.
By: /s/ H. David Lansdowne
------------------------
H. David Lansdowne
President
FINANCIAL INVESTORS TRUST, with respect to
the Aristata Equity Fund
By: /s/ William Paston
------------------------
Vice President
7
<PAGE>
INVESTMENT ADVISORY AGREEMENT
ARISTATA QUALITY BOND FUND
(A SERIES OF FINANCIAL INVESTORS TRUST)
THIS INVESTMENT ADVISORY AGREEMENT (the "Agreement") is made this 20th
day of February, 1998, between TEMPEST, ISENHART, CHAFEE, LANSDOWNE & ASSOC.,
INC., a Colorado corporation ("Tempest Isenhart"), and FINANCIAL INVESTORS
TRUST, a Delaware business trust (the "Trust"), with respect to the ARISTATA
QUALITY BOND FUND, a series of the Trust (the "Fund").
RECITALS
A. The Trust is registered as an open-end management investment company
under the Investment Company Act of 1940, as amended (the "1940 Act"), and has
registered its shares for public offering under the Securities Act of 1933, as
amended (the "1933 Act").
B. The Trust is authorized to create separate series of shares, each with
its own separate investment portfolio, one of such series created by the Trust
being the Fund.
C. The Trust and Tempest Isenhart deem it mutually advantageous that
Tempest Isenhart should assist the Trustees and officers of the Trust in the
management of the securities portfolio of the Fund.
AGREEMENT
For good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties agree as follows:
1. APPOINTMENT. The Trust hereby appoints Tempest Isenhart as
investment adviser and manager with respect to the Fund for the period and on
the terms set forth in this Agreement. Tempest Isenhart hereby accepts such
appointment and agrees to render the services herein set forth, for the
compensation herein provided.
2. INVESTMENT ADVISORY FUNCTIONS. In its capacity as investment
adviser to the Fund, Tempest Isenhart shall have the following duties and
responsibilities:
(a) To manage the investment operations of the Fund and the
composition of its investment portfolio, and to determine without
prior consultation with the Trust, what securities and other
assets of the Fund will be acquired, held, disposed of or loaned,
in conformity with the investment objective, policies and
restrictions and the other statements concerning the Fund in the
Trust's trust instrument, as amended from time to time (the
"Trust Instrument"), bylaws, and registration statements under
the 1940 Act
1
<PAGE>
and the 1933 Act, the Investment Advisers Act of 1940, as
amended (the "Advisers Act"), the rules thereunder, and all
other applicable federal and state laws and regulations, and
the provisions of the Internal Revenue Code of 1986, as amended,
applicable to the Fund as a regulated investment company;
(b) To cause its officers to attend meetings and furnish oral or
written reports, as the Trustees may reasonably require, in order
to keep the Trustees and appropriate officers of the Trust fully
informed as to the condition of the investment portfolio of the
Fund, the investment decisions of Tempest Isenhart, and the
investment considerations which have given rise to those
decisions;
(c) To place orders for the purchase and sale of securities for
investments of the Fund and for other related transactions; to
give instructions to the custodian (including any subcustodian)
of the Fund as to deliveries of securities to and from such
custodian and receipt and payments of cash for the account of the
Fund, and advise the Trust on the same day such instructions are
given; to submit such reports relating to the valuation of the
Fund's assets and to otherwise assist in the calculation of the
net asset value of shares of the Fund as may reasonably be
requested; on behalf of the Fund, to exercise such voting rights,
subscription rights, rights to consent to corporate action and
any other rights pertaining to the Fund's assets that may be
exercised, in accordance with any policy pertaining to the same
that may be adopted or agreed to by the Trustees of the Trust,
or, in the event that the Trust retains the right to exercise
such voting and other rights, to furnish the Trust with advice as
to the manner in which such rights should be exercised;
(d) To maintain all books and records required to be maintained by
Tempest Isenhart pursuant to the 1940 Act and the rules and
regulations promulgated thereunder, as the same may be amended
from time to time, with respect to transactions on behalf of the
Fund, and shall furnish the Trustees with such periodic and
special reports as the Trustees reasonably may request. Tempest
Isenhart agrees that all records which it maintains for the Fund
are the property of the Trust, agrees to permit the reasonable
inspection thereof by the Trust or its designees and agrees to
preserve for the periods prescribed under the 1940 Act any
records which it maintains for the Fund and which are required to
be maintained under the 1940 Act, and further agrees to surrender
promptly to the Trust or its designees any records which it
maintains for the Trust upon request by the Trust; and
2
<PAGE>
(e) At such times as shall be reasonably requested by the Trustees,
to provide the Trustees with economic, operational and investment
data and reports, including without limitation all information
and materials reasonably requested by or requested to be
delivered to the Trustees of the Trust pursuant to Section 15(c)
of the 1940 Act, and make available to the Trustees any economic,
statistical and investment services normally available to similar
investment company clients of Tempest Isenhart.
3. FURTHER OBLIGATIONS. In all matters relating to the performance of
this Agreement, Tempest Isenhart shall act in conformity with the Trust's Trust
Instrument, bylaws and currently effective registration statements under the
1940 Act and the 1933 Act and any amendments or supplements thereto (the
"Registration Statements") and with the written policies, procedures and
guidelines of the Fund, and written instructions and directions of the Trustees
of the Trust and shall comply with the requirements of the 1940 Act, the
Advisers Act, the rules thereunder, and all other applicable federal and state
laws and regulations. The Trust agrees to provide Tempest Isenhart with copies
of the Trust's Trust Instrument, bylaws, Registration Statements, written
policies, procedures and guidelines, and written instructions and directions of
the Trustees, and any amendments or supplements to any of them at, or, if
practicable, before the time such materials become effective.
4. OBLIGATIONS OF TRUST. The Trust shall fulfill or cause its agents to
fulfill the following obligations under this Agreement:
(a) To keep Tempest Isenhart continuously and fully informed as to
the composition of the investment portfolio of the Fund and the
nature of all of the Fund's assets and liabilities from time to
time;
(b) To furnish Tempest Isenhart with a certified copy of any
financial statement or report prepared for the Fund by certified
or independent public accountants and with copies of any
financial statements or reports made to the Fund's shareholders
or to any governmental body or securities exchange;
(c) To furnish Tempest Isenhart with any further materials or
information which Tempest Isenhart may reasonably request to
enable it to perform its function under this Agreement; and
(d) To compensate Tempest Isenhart for its services in accordance
with the provisions of Section 5 hereof.
3
<PAGE>
5. COMPENSATION. The Trust shall pay to Tempest Isenhart for its
services under this Agreement a fee, payable in United States dollars, at an
annual rate of 0.50% of the average daily net asset value of the Fund. This fee
shall be computed and accrued daily and payable monthly on the last day of each
month during which or part of which this Agreement is in effect. For the month
during which this Agreement becomes effective and the month during which it
terminates, however, there shall be an appropriate proration of the fee payable
for such month based on the number of calendar days of such month during which
this Agreement is effective.
6. EXPENSES.
(a) EXPENSES PAID BY THE TRUST. The Trust assumes and shall pay all
expenses incidental to its operations and business not specifically assumed or
agreed to be paid by Tempest Isenhart hereunder or otherwise, including, but not
limited to, any compensation, fees or reimbursements which the Trust pays to its
Trustees who are not interested persons of Tempest Isenhart; compensation of the
Fund's custodian, transfer agent, registrar and dividend disbursing agent and
other service providers; legal, accounting, audit and printing expenses;
administrative, clerical, record keeping and bookkeeping expenses; brokerage
commissions and all other expenses in connection with execution of portfolio
transactions; interest; all federal, state and local taxes (including stamp,
excise, income and franchise taxes); costs of stock certificates and expenses of
delivering such certificates to the purchasers thereof; expenses of local
representation in Delaware; expenses of shareholders' meetings and of preparing,
printing and distributing proxy statements, notices, and reports to
shareholders; expenses of preparing and filing reports and tax returns with
federal and state regulatory authorities; all expenses incurred in complying
with all federal and state laws and the laws of any foreign country applicable
to the issue, offer or sale of shares of the Fund, including, but not limited
to, all costs involved in preparing, printing and mailing prospectuses and
statements of additional information to shareholders of the Fund; and all fees,
dues and other expenses incurred by the Trust in connection with the membership
of the Trust in any trade association or other investment company organization.
(b) EXPENSES PAID BY TEMPEST ISENHART. Tempest Isenhart shall pay all its
own costs and expenses incurred in rendering the services required under this
Agreement. In addition to such costs and expenses, Tempest Isenhart shall incur
and pay reasonable compensation, fees and related expenses of any of the Trust's
officers or Trustees who are interested persons of Tempest Isenhart.
7. BROKERAGE COMMISSIONS. For purposes of this Agreement, brokerage
commissions paid by the Fund upon the purchase or sale of its portfolio
securities shall be considered a cost of securities of the Fund and shall be
paid by the Fund. Absent instructions from the Trust to the contrary, Tempest
Isenhart is authorized and directed to place Fund portfolio transactions only
with brokers and dealers who render satisfactory service in the execution of
orders at the
4
<PAGE>
most favorable prices and at reasonable commission rates, provided, however,
that Tempest Isenhart may pay a broker an amount of commission for effecting
a securities transaction in excess of the amount of commission another broker
would have charged for effecting that transaction if Tempest Isenhart
determines in good faith that such amount of commission was reasonable in
relation to the value of the brokerage and research services provided by such
broker viewed in terms of either that particular transaction or the overall
responsibilities of Tempest Isenhart. Tempest Isenhart is also authorized to
consider sales of Fund shares as a factor in selecting broker-dealers to
execute Fund portfolio transactions. In placing portfolio business with such
broker-dealers, Tempest Isenhart shall seek the best execution of each
transaction. Notwithstanding the foregoing, the Trustees of the Trust may
establish policies or guidelines to be followed by Tempest Isenhart in
placing portfolio transactions for the Trust pursuant to the foregoing
provisions. Tempest Isenhart shall report on the placement of portfolio
transactions in the prior fiscal quarter at each quarterly meeting of such
Trustees. To the extent consistent with applicable law, purchase or sell
orders for the Fund may be aggregated with simultaneous purchase or sell
orders for other clients of Tempest Isenhart. Whenever Tempest Isenhart
simultaneously places orders to purchase or sell the same security on behalf
of the Fund and one or more other clients of Tempest Isenhart, such orders
will be allocated as to price and amount among all such clients in a manner
reasonably believed by Tempest Isenhart to be fair and equitable to each
client. The Trust recognizes that in some cases, this procedure may
adversely affect the results obtained for the Fund.
8. TERMINATION. This Agreement may be terminated at any time, without
penalty, by the Trustees of the Trust, or by the shareholders of the Fund acting
by vote of at least a majority of its outstanding voting securities, provided in
either case that sixty (60) days' advance written notice of termination be given
to Tempest Isenhart at its principal place of business. This Agreement may be
terminated by Tempest Isenhart at any time, without penalty, by giving sixty
(60) days' advance written notice of termination to the Trust, addressed to its
principal place of business. The Trust agrees that the name "Aristata" is the
property of Tempest Isenhart, and that the Trust is using such name in the name
of the Fund with the permission of Tempest Isenhart, and that the Trust shall
cease to use the name Aristata in connection with the Fund as soon as reasonably
practicable following any termination of this Agreement if Tempest Isenhart does
not continue to provide investment advice to the Fund after such termination.
9. ASSIGNMENT. This Agreement shall terminate automatically in the event
of any assignment of this Agreement.
10. TERM. This Agreement shall continue in effect until February 19,
2000, unless sooner terminated in accordance with its terms, and shall
continue in effect from year to year thereafter only so long as such
continuance is specifically approved at least annually by the vote of a
majority of the Trustees of the Trust who are not parties hereto or
interested persons of any such party, cast in person at a meeting called for
the purpose of voting on the approval of the terms
5
<PAGE>
of such renewal, and by either the Trustees of the Trust or the affirmative vote
of a majority of the outstanding voting securities of the Fund.
11. AMENDMENTS. This Agreement may be amended by the parties only if such
amendment is specifically approved (i) by a majority of the Trustees, including
a majority of the Trustees who are not interested persons of the Fund or Tempest
Isenhart and, (ii) if required by applicable law, by the affirmative vote of a
majority of the outstanding voting securities of the Fund.
12. ALLOCATION OF EXPENSES. The Trustees shall determine the basis for
making an appropriate allocation of the Trust's expenses (other than those
directly attributable to the Fund) between the Fund and any other series of the
Trust.
13. LIMITATION ON PERSONAL LIABILITY. NOTICE IS HEREBY GIVEN that the
Trust is a business trust organized under the Delaware Business Trust Act
pursuant to a Certificate of Trust filed in the office of the Secretary of State
of the State of Delaware. All parties to this Agreement acknowledge and agree
that the Trust is a series trust and all debts, liabilities, obligations and
expenses incurred, contracted for or otherwise existing with respect to a
particular series shall be enforceable against the assets held with respect to
such series only, and not against the assets of the Trust generally or against
the assets held with respect to any other series and further that no trustee,
officer or holder of shares of beneficial interest of the Trust shall be
personally liable for any of the foregoing.
14. LIMITATION OF LIABILITY OF TEMPEST ISENHART. Tempest Isenhart shall
not be liable for any error of judgment or mistake of law or for any loss
arising out of any investment or for any act or omission taken with respect to
the Fund, 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 and except to the extent otherwise provided by law.
15. ACTIVITIES OF TEMPEST ISENHART. The services of Tempest Isenhart to
the Trust hereunder are not intended to be exclusive, and Tempest Isenhart and
its affiliates are free to render services to other parties, so long as its
services under this Agreement are not materially adversely affected or otherwise
impaired thereby. Nothing in this Agreement shall limit or restrict the right
of any director, officer or employee of Tempest Isenhart to engage in any other
business or to devote his or her time and attention in part to the management or
other aspects of any other business, whether of a similar nature or a dissimilar
nature. It is understood that trustees, officers and shareholders of the Trust
are or may become interested in Tempest Isenhart as directors, officers and
shareholders of Tempest Isenhart, that directors, officers, employees and
shareholders of Tempest Isenhart are or may become similarly interested in the
Trust, and that Tempest Isenhart may become interested in the Trust as a
shareholder or otherwise.
6
<PAGE>
16. CERTAIN DEFINITIONS. The terms "vote of a majority of the outstanding
voting securities", "assignment", "approved at least annually" and "interested
persons" when used herein, shall have the respective meanings specified in the
1940 Act, as now in effect or hereafter amended, and the rules and regulations
thereunder, subject to such orders, exemptions and interpretations as may be
issued by the Securities and Exchange Commission under said Act and as may be
then in effect. Where the effect of a requirement of the federal securities
laws reflected in any provision of this Agreement is made less restrictive by a
rule, regulation, order, interpretation or other authority of the Securities and
Exchange Commission, whether of special or general application, such provision
shall be deemed to incorporate the effect of such rule, regulation, order,
interpretation or other authority.
17. GOVERNING LAW. This Agreement shall be construed in accordance with
the laws of the State of Colorado (without giving effect to the conflicts of
laws principles thereof) and the 1940 Act. To the extent that the applicable
laws of the State of Colorado conflict with the applicable provisions of the
1940 Act, the latter shall control.
18. MISCELLANEOUS. The headings in this Agreement are included for
convenience of reference only and in no way define or limit any of the
provisions thereof or otherwise affect their construction or effect. If any
provision of this Agreement shall be held or made invalid by a court decision,
statute, rule or otherwise, the remainder of this Agreement shall not be
affected thereby. This Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective successors.
IN WITNESS WHEREOF, the parties have caused their duly authorized officers
to execute this Investment Advisory Agreement as of the date and year first
above written.
TEMPEST, ISENHART, CHAFEE, LANSDOWNE
& ASSOC., INC.
By: /s/ H. David Lansdowne
-------------------------
H. David Lansdowne
President
FINANCIAL INVESTORS TRUST, with respect to
the Aristata Quality Bond Fund
By: /s/ William Paston
-------------------------
Vice President
7
<PAGE>
INVESTMENT ADVISORY AGREEMENT
ARISTATA COLORADO QUALITY TAX EXEMPT FUND
(A SERIES OF FINANCIAL INVESTORS TRUST)
THIS INVESTMENT ADVISORY AGREEMENT (the "Agreement") is made this 20th
day of February, 1998, between TEMPEST, ISENHART, CHAFEE, LANSDOWNE & ASSOC.,
INC., a Colorado corporation ("Tempest Isenhart"), and FINANCIAL INVESTORS
TRUST, a Delaware business trust (the "Trust"), with respect to the ARISTATA
COLORADO QUALITY TAX EXEMPT FUND, a series of the Trust (the "Fund").
RECITALS
A. The Trust is registered as an open-end management investment company
under the Investment Company Act of 1940, as amended (the "1940 Act"), and has
registered its shares for public offering under the Securities Act of 1933, as
amended (the "1933 Act").
B. The Trust is authorized to create separate series of shares, each with
its own separate investment portfolio, one of such series created by the Trust
being the Fund.
C. The Trust and Tempest Isenhart deem it mutually advantageous that
Tempest Isenhart should assist the Trustees and officers of the Trust in the
management of the securities portfolio of the Fund.
AGREEMENT
For good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties agree as follows:
1. APPOINTMENT. The Trust hereby appoints Tempest Isenhart as
investment adviser and manager with respect to the Fund for the period and on
the terms set forth in this Agreement. Tempest Isenhart hereby accepts such
appointment and agrees to render the services herein set forth, for the
compensation herein provided.
2. INVESTMENT ADVISORY FUNCTIONS. In its capacity as investment
adviser to the Fund, Tempest Isenhart shall have the following duties and
responsibilities:
(a) To manage the investment operations of the Fund and the
composition of its investment portfolio, and to determine without
prior consultation with the Trust, what securities and other
assets of the Fund will be acquired, held, disposed of or loaned,
in conformity with the investment objective, policies and
restrictions and the other statements concerning the Fund in the
Trust's trust instrument, as amended from time to time (the
"Trust Instrument"), bylaws, and registration statements under
the 1940 Act and
1
<PAGE>
the 1933 Act, the Investment Advisers Act of 1940, as amended
(the "Advisers Act"), the rules thereunder, and all other
applicable federal and state laws and regulations, and the
provisions of the Internal Revenue Code of 1986, as amended,
applicable to the Fund as a regulated investment company;
(b) To cause its officers to attend meetings and furnish oral or
written reports, as the Trustees may reasonably require, in order
to keep the Trustees and appropriate officers of the Trust fully
informed as to the condition of the investment portfolio of the
Fund, the investment decisions of Tempest Isenhart, and the
investment considerations which have given rise to those
decisions;
(c) To place orders for the purchase and sale of securities for
investments of the Fund and for other related transactions; to
give instructions to the custodian (including any subcustodian)
of the Fund as to deliveries of securities to and from such
custodian and receipt and payments of cash for the account of the
Fund, and advise the Trust on the same day such instructions are
given; to submit such reports relating to the valuation of the
Fund's assets and to otherwise assist in the calculation of the
net asset value of shares of the Fund as may reasonably be
requested; on behalf of the Fund, to exercise such voting rights,
subscription rights, rights to consent to corporate action and
any other rights pertaining to the Fund's assets that may be
exercised, in accordance with any policy pertaining to the same
that may be adopted or agreed to by the Trustees of the Trust,
or, in the event that the Trust retains the right to exercise
such voting and other rights, to furnish the Trust with advice as
to the manner in which such rights should be exercised;
(d) To maintain all books and records required to be maintained by
Tempest Isenhart pursuant to the 1940 Act and the rules and
regulations promulgated thereunder, as the same may be amended
from time to time, with respect to transactions on behalf of the
Fund, and shall furnish the Trustees with such periodic and
special reports as the Trustees reasonably may request. Tempest
Isenhart agrees that all records which it maintains for the Fund
are the property of the Trust, agrees to permit the reasonable
inspection thereof by the Trust or its designees and agrees to
preserve for the periods prescribed under the 1940 Act any
records which it maintains for the Fund and which are required to
be maintained under the 1940 Act, and further agrees to surrender
promptly to the Trust or its designees any records which it
maintains for the Trust upon request by the Trust; and
2
<PAGE>
(e) At such times as shall be reasonably requested by the Trustees,
to provide the Trustees with economic, operational and investment
data and reports, including without limitation all information
and materials reasonably requested by or requested to be
delivered to the Trustees of the Trust pursuant to Section 15(c)
of the 1940 Act, and make available to the Trustees any economic,
statistical and investment services normally available to similar
investment company clients of Tempest Isenhart.
3. FURTHER OBLIGATIONS. In all matters relating to the performance of
this Agreement, Tempest Isenhart shall act in conformity with the Trust's Trust
Instrument, bylaws and currently effective registration statements under the
1940 Act and the 1933 Act and any amendments or supplements thereto (the
"Registration Statements") and with the written policies, procedures and
guidelines of the Fund, and written instructions and directions of the Trustees
of the Trust and shall comply with the requirements of the 1940 Act, the
Advisers Act, the rules thereunder, and all other applicable federal and state
laws and regulations. The Trust agrees to provide Tempest Isenhart with copies
of the Trust's Trust Instrument, bylaws, Registration Statements, written
policies, procedures and guidelines, and written instructions and directions of
the Trustees, and any amendments or supplements to any of them at, or, if
practicable, before the time such materials become effective.
4. OBLIGATIONS OF TRUST. The Trust shall fulfill or cause its agents to
fulfill the following obligations under this Agreement:
(a) To keep Tempest Isenhart continuously and fully informed as to
the composition of the investment portfolio of the Fund and the
nature of all of the Fund's assets and liabilities from time to
time;
(b) To furnish Tempest Isenhart with a certified copy of any
financial statement or report prepared for the Fund by certified
or independent public accountants and with copies of any
financial statements or reports made to the Fund's shareholders
or to any governmental body or securities exchange;
(c) To furnish Tempest Isenhart with any further materials or
information which Tempest Isenhart may reasonably request to
enable it to perform its function under this Agreement; and
(d) To compensate Tempest Isenhart for its services in accordance
with the provisions of Section 5 hereof.
3
<PAGE>
5. COMPENSATION. The Trust shall pay to Tempest Isenhart for its
services under this Agreement a fee, payable in United States dollars, at an
annual rate of 0.50% of the average daily net asset value of the Fund. This fee
shall be computed and accrued daily and payable monthly on the last day of each
month during which or part of which this Agreement is in effect. For the month
during which this Agreement becomes effective and the month during which it
terminates, however, there shall be an appropriate proration of the fee payable
for such month based on the number of calendar days of such month during which
this Agreement is effective.
6. EXPENSES.
(a) EXPENSES PAID BY THE TRUST. The Trust assumes and shall pay all
expenses incidental to its operations and business not specifically assumed or
agreed to be paid by Tempest Isenhart hereunder or otherwise, including, but not
limited to, any compensation, fees or reimbursements which the Trust pays to its
Trustees who are not interested persons of Tempest Isenhart; compensation of the
Fund's custodian, transfer agent, registrar and dividend disbursing agent and
other service providers; legal, accounting, audit and printing expenses;
administrative, clerical, record keeping and bookkeeping expenses; brokerage
commissions and all other expenses in connection with execution of portfolio
transactions; interest; all federal, state and local taxes (including stamp,
excise, income and franchise taxes); costs of stock certificates and expenses of
delivering such certificates to the purchasers thereof; expenses of local
representation in Delaware; expenses of shareholders' meetings and of preparing,
printing and distributing proxy statements, notices, and reports to
shareholders; expenses of preparing and filing reports and tax returns with
federal and state regulatory authorities; all expenses incurred in complying
with all federal and state laws and the laws of any foreign country applicable
to the issue, offer or sale of shares of the Fund, including, but not limited
to, all costs involved in preparing, printing and mailing prospectuses and
statements of additional information to shareholders of the Fund; and all fees,
dues and other expenses incurred by the Trust in connection with the membership
of the Trust in any trade association or other investment company organization.
(b) EXPENSES PAID BY TEMPEST ISENHART. Tempest Isenhart shall pay all its
own costs and expenses incurred in rendering the services required under this
Agreement. In addition to such costs and expenses, Tempest Isenhart shall incur
and pay reasonable compensation, fees and related expenses of the Trust's
officers or Trustees who are interested persons of Tempest Isenhart.
7. BROKERAGE COMMISSIONS. For purposes of this Agreement, brokerage
commissions paid by the Fund upon the purchase or sale of its portfolio
securities shall be considered a cost of securities of the Fund and shall be
paid by the Fund. Absent instructions from the Trust to the contrary, Tempest
Isenhart is authorized and directed to place Fund portfolio transactions only
with brokers and dealers who render satisfactory service in the execution of
orders at the
4
<PAGE>
most favorable prices and at reasonable commission rates, provided, however,
that Tempest Isenhart may pay a broker an amount of commission for effecting a
securities transaction in excess of the amount of commission another broker
would have charged for effecting that transaction if Tempest Isenhart determines
in good faith that such amount of commission was reasonable in relation to the
value of the brokerage and research services provided by such broker viewed in
terms of either that particular transaction or the overall responsibilities of
Tempest Isenhart. Tempest Isenhart is also authorized to consider sales of Fund
shares as a factor in selecting broker-dealers to execute Fund portfolio
transactions. In placing portfolio business with such broker-dealers, Tempest
Isenhart shall seek the best execution of each transaction. Notwithstanding the
foregoing, the Trustees of the Trust may establish policies or guidelines to be
followed by Tempest Isenhart in placing portfolio transactions for the Trust
pursuant to the foregoing provisions. Tempest Isenhart shall report on the
placement of portfolio transactions in the prior fiscal quarter at each
quarterly meeting of such Trustees. To the extent consistent with applicable
law, purchase or sell orders for the Fund may be aggregated with simultaneous
purchase or sell orders for other clients of Tempest Isenhart. Whenever Tempest
Isenhart simultaneously places orders to purchase or sell the same security on
behalf of the Fund and one or more other clients of Tempest Isenhart, such
orders will be allocated as to price and amount among all such clients in a
manner reasonably believed by Tempest Isenhart to be fair and equitable to each
client. The Trust recognizes that in some cases, this procedure may adversely
affect the results obtained for the Fund.
8. TERMINATION. This Agreement may be terminated at any time, without
penalty, by the Trustees of the Trust, or by the shareholders of the Fund acting
by vote of at least a majority of its outstanding voting securities, provided in
either case that sixty (60) days' advance written notice of termination be given
to Tempest Isenhart at its principal place of business. This Agreement may be
terminated by Tempest Isenhart at any time, without penalty, by giving sixty
(60) days' advance written notice of termination to the Trust, addressed to its
principal place of business. The Trust agrees that, the name "Aristata" is the
property of Tempest Isenhart, and that the Trust is using such name in the name
of the Fund with the permission of Tempest Isenhart, and that the Trust shall
cease to use the name Aristata in connection with the Fund as soon as reasonably
practicable following any termination of this Agreement if Tempest Isenhart does
not continue to provide investment advice to the Fund after such termination.
9. ASSIGNMENT. This Agreement shall terminate automatically in the event
of any assignment of this Agreement.
10. TERM. This Agreement shall continue in effect until February 19,
2000, unless sooner terminated in accordance with its terms, and shall
continue in effect from year to year thereafter only so long as such
continuance is specifically approved at least annually by the vote of a
majority of the Trustees of the Trust who are not parties hereto or
interested persons of any such party, cast in person at a meeting called for
the purpose of voting on the approval of the terms
5
<PAGE>
of such renewal, and by either the Trustees of the Trust or the affirmative vote
of a majority of the outstanding voting securities of the Fund.
11. AMENDMENTS. This Agreement may be amended by the parties only if such
amendment is specifically approved (i) by a majority of the Trustees, including
a majority of the Trustees who are not interested persons of the Fund or Tempest
Isenhart and, (ii) if required by applicable law, by the affirmative vote of a
majority of the outstanding voting securities of the Fund.
12. ALLOCATION OF EXPENSES. The Trustees shall determine the basis for
making an appropriate allocation of the Trust's expenses (other than those
directly attributable to the Fund) between the Fund and any other series of the
Trust.
13. LIMITATION ON PERSONAL LIABILITY. NOTICE IS HEREBY GIVEN that the
Trust is a business trust organized under the Delaware Business Trust Act
pursuant to a Certificate of Trust filed in the office of the Secretary of State
of the State of Delaware. All parties to this Agreement acknowledge and agree
that the Trust is a series trust and all debts, liabilities, obligations and
expenses incurred, contracted for or otherwise existing with respect to a
particular series shall be enforceable against the assets held with respect to
such series only, and not against the assets of the Trust generally or against
the assets held with respect to any other series and further that no trustee,
officer or holder of shares of beneficial interest of the Trust shall be
personally liable for any of the foregoing.
14. LIMITATION OF LIABILITY OF TEMPEST ISENHART. Tempest Isenhart shall
not be liable for any error of judgment or mistake of law or for any loss
arising out of any investment or for any act or omission taken with respect to
the Fund, 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 and except to the extent otherwise provided by law.
15. ACTIVITIES OF TEMPEST ISENHART. The services of Tempest Isenhart to
the Trust hereunder are not intended to be exclusive, and Tempest Isenhart and
its affiliates are free to render services to other parties, so long as its
services under this Agreement are not materially adversely affected or otherwise
impaired thereby. Nothing in this Agreement shall limit or restrict the right
of any director, officer or employee of Tempest Isenhart to engage in any other
business or to devote his or her time and attention in part to the management or
other aspects of any other business, whether of a similar nature or a dissimilar
nature. It is understood that trustees, officers and shareholders of the Trust
are or may become interested in Tempest Isenhart as directors, officers and
shareholders of Tempest Isenhart, that directors, officers, employees and
shareholders of Tempest Isenhart are or may become similarly interested in the
Trust, and that Tempest Isenhart may become interested in the Trust as a
shareholder or otherwise.
6
<PAGE>
16. CERTAIN DEFINITIONS. The terms "vote of a majority of the outstanding
voting securities", "assignment", "approved at least annually" and "interested
persons" when used herein, shall have the respective meanings specified in the
1940 Act, as now in effect or hereafter amended, and the rules and regulations
thereunder, subject to such orders, exemptions and interpretations as may be
issued by the Securities and Exchange Commission under said Act and as may be
then in effect. Where the effect of a requirement of the federal securities
laws reflected in any provision of this Agreement is made less restrictive by a
rule, regulation, order, interpretation or other authority of the Securities and
Exchange Commission, whether of special or general application, such provision
shall be deemed to incorporate the effect of such rule, regulation, order,
interpretation or other authority.
17. GOVERNING LAW. This Agreement shall be construed in accordance with
the laws of the State of Colorado (without giving effect to the conflicts of
laws principles thereof) and the 1940 Act. To the extent that the applicable
laws of the State of Colorado conflict with the applicable provisions of the
1940 Act, the latter shall control.
18. MISCELLANEOUS. The headings in this Agreement are included for
convenience of reference only and in no way define or limit any of the
provisions thereof or otherwise affect their construction or effect. If any
provision of this Agreement shall be held or made invalid by a court decision,
statute, rule or otherwise, the remainder of this Agreement shall not be
affected thereby. This Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective successors.
IN WITNESS WHEREOF, the parties have caused their duly authorized officers
to execute this Investment Advisory Agreement as of the date and year first
above written.
TEMPEST, ISENHART, CHAFEE, LANSDOWNE
& ASSOC., INC.
By: /s/ H. David Lansdowne
-------------------------
H. David Lansdowne
President
FINANCIAL INVESTORS TRUST, with respect to
the Aristata Colorado Quality Tax Exempt Fund
By: /s/ William Paston
-------------------------
Vice President
7
<PAGE>
INVESTMENT ADVISORY AGREEMENT
FINANCIAL INVESTORS TRUST
PRIME MONEY MARKET FUND
Agreement made as of __________, 1998 between GE INVESMENT MANAGEMENT
INCORPORATED ("GEIM") and FINANCIAL INVESTORS TRUST (the "Trust") on behalf of
the Prime Money Market Fund, a series of the Trust (the "Fund").
WITNESSETH:
WHEREAS, the Trust is an open-end management investment company registered under
the Investment Company Act of 1940, as amended (the " 1940 Act"); and
WHEREAS, GEIM is a Delaware corporation registered as an investment adviser
under the Investment Advisers Act of 1940, as amended (the "Advisers Act"); and
WHEREAS, the Trust wishes to retain GEIM to serve as investment adviser to the
Fund and GEIM agrees to provide such services, in the manner and on the terms
set forth herein.
NOW, THERFORE, the parties hereto agree as follows:
Section 1. SERVICES AS INVESTMENT ADVISER.
(a) The Trust hereby appoints GEIM as investment adviser with respect to
the Fund's assets for the period and on the terms set forth in this agreement.
GEIM accepts this appointment and hereby agrees to render the services herein
set forth for the compensation herein provided.
(b) The Trust anticipates that the Fund will employ its capital by
investing and reinvesting in investments of the types specified in the Trust's
Registration Statement on Form N-1A, as amended from time to time (the
"Registration Statement"), and in the manner and to the extent approved by the
Board of Trustees of the Trust. Copies of the Registration Statement have been
submitted to GEIM.
(c) Subject to the supervision and direction of the Trust's Board of
Trustees, GEIM, as the Fund's investment adviser, will manage the Fund's assets
in accordance with the investment objective and policies of the Fund as stated
in the Registration Statement, will make investment decisions for the Fund and
will place purchase and sale orders for the Fund's portfolio transactions.
<PAGE>
(d) GEIM will, at its own expense, maintain sufficient staff, and employ
or retain sufficient personnel and consult with any other persons that it
determines may be necessary or useful to the performance of its obligations
under this agreement.
(e) GEIM will keep the Trust informed of developments materially
affecting the Fund, and will, on its own initiative, furnish the Fund from time
to time with whatever information GEIM believes is appropriate for this purpose.
(f) GEIM shall provide (or arrange for its affiliates to provide)
administrative assistance which shall include compiling statistical and research
data required for the preparation of reports and statements which are
periodically distributed to the Trust's officers and Trustees. GEIM shall also
provide to the Trust and the Fund information relating to portfolio composition,
credit conditions and average maturity of the portfolio of the Fund. GEIM shall
furnish periodic reports on the investment performance of the Fund to the
Trustees of the Trust. GEIM generally shall monitor the Trust's and the Fund's
compliance with investment policies and restrictions as set forth in the
currently effective prospectus and statement of additional information relating
to the shares of the Fund under the Securities Act of 1933, as amended, and the
Investment Company Act of 1940, as amended. GEIM shall make reports to the
Trustees of the performance of its obligations hereunder and furnish advice and
recommendations with respect to such other aspects of the business and affairs
of the Trust and the Fund as it shall determine to be desirable.
Section 2. SELECTION OF INVESTMENTS ON BEHALF OF THE FUND.
Unless otherwise set forth in the Registration Statement or directed by the
Trust, GEIM will, in selecting brokers or dealers to effect transactions on
behalf of the Fund select the best overall terms available. In so doing, GEIM
may consider the breadth of the market on the investment, the price of the
security, the financial condition and execution capability of the broker or
dealer, and the reasonableness of the commission, if any, for the specific
transaction and on a continuing basis. GEIM may also consider brokerage and
research services provided to the Fund and or other accounts over which GEIM or
its affiliates exercise investment discretion. The Trust recognizes the
desirability of GEIM's having access to supplemental investment and market
research and security and economic analyses provided by brokers and that those
brokers may execute brokerage transactions at a higher cost to the Fund than
would be the case if the transactions were executed on the basis of the most
favorable price and efficient execution. The Trust, thus, authorizes GEIM, to
the extent permitted by applicable law and regulations, to pay higher brokerage
commissions for the purchase and sale of securities for the Fund to brokers who
provide supplemental investment and market research and security and economic
analyses, subject to GEIM's determining in good faith that such commissions are
reasonable in terms either of the particular transaction or of the overall
responsibility of GEIM to the Fund and its other clients and that the total
commissions paid by the Fund will be reasonable in relation to the benefits to
the Fund over the long term. The Fund understands that the services provided by
those brokers
<PAGE>
may be useful to GEIM in connection with its services to other clients. In no
instance will portfolio securities be purchased from or sold to GEIM, or any
affiliated person thereof, except in accordance with the federal securities laws
and the rules and regulations thereunder. Subject to Section 5 hereof, whenever
GEIM simultaneously places orders to purchase or sell the same security on
behalf of the Fund and one or more other accounts advised by GEIM, the orders
will be allocated as to price and amount among all such accounts in a manner
reasonably believed to be equitable by GEIM over time to each account.
Section 3. COSTS AND EXPENSES
GEIM will bear the cost of rendering the services it is obligated to
provide under this Agreement and will, at its own expense, pay the salaries of
all officers and employees who are employed by both it and the Trust. GEIM will
provide the Fund with investment officers who are authorized by the Trust's
Board of Trustees to execute purchases and sales of securities on behalf of the
Fund and will employ a professional staff of portfolio managers who draw upon a
variety of sources for research information for the Fund.
Section 4. COMPENSATION
In consideration of services rendered pursuant to this Agreement, the Trust
will pay GEIM at the beginning of each calendar month a fee for the previous
month that is accrued daily at the maximum annual rate of 0.08% of the average
daily net assets of the Portfolio, subject to the following schedule of waivers:
<TABLE>
<CAPTION>
<S> <C>
PORTION OF AVERAGE DAILY ADVISORY FEE RATE
NET ASSETS OF THE FUND
Not exceeding $500 million 0.04%
In excess of $500 million but
not exceeding $1 billion 0.06%
In excess of $1 billion 0.08%
</TABLE>
For the purpose of determining fees payable to GEIM under this Agreement,
the value of the Portfolio's net assets will be computed in the manner described
in the Registration Statement.
Section 5. SERVICES TO OTHER COMPANIES OR ACCOUNTS.
(a) The Trust understands and acknowledges, that GEIM now acts and will
continue to act as investment manager or adviser to various fiduciary or other
managed accounts ("Other Accounts") and the Trust has no objection to GEIM's so
acting, so long as that when the Fund and any Other Account served by GEIM are
prepared to invest in, or desire to dispose of the same security, available
investments or opportunities for sales will be allocated in a manner reasonably
believed by GEIM to be equitable to the Fund
<PAGE>
and the Other Account. In addition, the Trust understands and acknowledges that
GEIM may, to the extent permitted by applicable laws and regulations, aggregate
securities to be sold or purchased for the Fund with those to be sold or
purchased for the Other Accounts so long as the securities purchased or sold, as
well as the expenses incurred in the transaction, are allocated in a manner
reasonably believed by GEIM to be equitable to the Fund and the Other Accounts.
The Trust recognizes that, in some cases, these procedures may adversely affect
the price paid or received by the Fund or the size of the position obtained or
disposed of by the Fund.
(b) The Trust understands and acknowledges that the persons employed by
GEIM to assist in the performance of its duties under this Agreement will not
devote their full time to that service and agrees that nothing contained in this
Agreement will be deemed to limit or restrict the right of GEIM or any affiliate
of GEIM to engage in and devote time and attention to other businesses or to
render services of whatever kind or nature.
Section 6. CONTINUANCE AND TERMINATION OF THE AGREEMENT.
(a) This Agreement will become effective as of ___________, 1998 and
will continue for an initial two-year term and will continue thereafter so long
as the continuance is specifically approved at least annually (a) by the Board
of Trustees of the Trust or (b) by a vote of a majority of the Fund's
outstanding voting securities, as defined in the 1940 Act, provided that in
either event the continuance is also approved by a majority of the Trustees who
are not "interested persons" (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 the approval.
(b) This Agreement is terminable without penalty, by the Trust on not
more than 60 nor less than 30 days' written notice to GEIM, by vote of holders
of a majority of the Fund's outstanding voting securities, as defined in the
1940 Act, or by GEIM on not more than 60 nor less than 30 days' notice to the
Trust.
(c) This Agreement will terminate automatically in the event of its
assignment (as defined in the 1940 Act or in rules adopted under the 1940 Act).
Section 7. LIMITATION OF LIABILITY
(a) GEIM will exercise its best judgment in rendering the services
described in this Agreement, except that GEIM will not be liable for any error
of judgment or mistake of law or for any loss suffered by the Fund in connection
with the matters to which this Agreement relates, other than a loss resulting
from willful misfeasance, bad faith or gross negligence on the part of GEIM in
the performance of its duties or from reckless disregard by it of its
obligations and duties under this Agreement. Any person, even though also an
officer, director, employee or agent of GEIM, who may be or become an
<PAGE>
officer, trustee, employee or agent of the Trust, will be deemed, when rendering
services to the Trust or acting on any business of the Trust, to be rendering
services to, or acting solely for, the Trust and not as an officer, director,
employee or agent, or one under the control or direction of, GEIM even though
paid by GEIM.
Section 8. GOVERNING LAW
This Agreement shall be governed by and construed in accordance with the
laws of the State of New York and the applicable provisions of the Investment
Company Act of 1940, as amended. To the extent that the applicable laws of the
State of New York or any of the provisions herein, conflict with the applicable
provisions of the Investment Company Act, the latter shall control.
Section 9. MISCELLANEOUS.
The Trust recognizes that directors, officers and employees of GEIM and its
affiliates may from time to time serve as directors, trustees, officers and
employees of corporations, partnerships, group trusts and business trusts
(including other investment companies) and that such other entities may include
the initials "GE" or the words "General Electric" as part of their name, and
that GEIM or its affiliates may enter into distribution, investment advisory or
other agreements with such other corporations and trusts. If GEIM ceases to act
as the investment adviser to the Fund, the Trust agrees that, at GEIM's request,
any license granted to the Trust for the use of the initials "GE" will terminate
and that the Trust will cease and discontinue completely further use of such
initials.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in their names and on their behalf by and through their duly authorized
officers, as of the day and year first above written.
FINANCIAL INVESTORS TRUST
By:
--------------------------
Name: W. Robert Alexander
Title: Chairman
Accepted:
GE INVESTMENT MANAGEMENT INCORPORATED
By:
------------------------------
Name: Michael J. Cosgrove
Title: Executive Vice President
<PAGE>
DISTRIBUTION AGREEMENT
January 20, 1998
ALPS Mutual Funds Services, Inc.
370 Seventeenth Street
Suite 3100
Denver, Colorado 80202
Dear Sirs:
This is to confirm that in consideration of the agreements hereinafter
contained, the undersigned, Financial Investors Trust, a Delaware business trust
(the "Trust"), has agreed that you shall be, for the period of this Agreement,
the distributor of shares of beneficial interest (the "Shares") of the Trust's
U.S. Treasury Money Market Fund, U.S. Government Money Market Fund and any other
Funds offered by the Trust listed on Schedule A, attached hereto (the "Funds").
1. SERVICES AS DISTRIBUTOR
1.1 You will act as agent for the distribution of shares in accordance
with the instructions of the Trust's Board of Trustees and registration
statement and prospectuses then in effect with respect to the Funds under the
Securities Act of 1933, as amended, and will transmit promptly any orders
received by you for the purchase or redemption of Shares either directly to the
Trust's transfer agent for the Fund involved or to any qualified broker/dealer
for transmittal to said agent.
1.2(a) You agree to use your best efforts to solicit orders for the sale
of Shares. You, at your expense, shall finance appropriate activities which you
deem reasonable which are primarily intended to result in the sale of Shares,
including but not limited to, advertising, compensation of underwriters, dealers
and sales personnel, the printing and mailing of prospectuses to other than
current shareholders, and the printing and mailing of sales literature. In
addition, you will provide one or more persons, during normal business hours, to
respond to telephone questions with respect to the Funds.
1.2(b) All shares of the Funds offered for sale by you shall be offered
for sale to the public at a price per share (the "offering price") equal to
their net asset value (determined in the manner set forth in the Trust's
Declaration of Trust and then current prospectuses). The offering price, if not
an exact multiple of one cent, shall be adjusted to the nearest cent.
1.3 You shall act as distributor of the Shares in compliance with all
applicable laws, rules and regulations, including, without limitation, all rules
and regulations made or adopted pursuant to the Investment Company Act of 1940,
as amended, by the Securities and Exchange Commission or any securities
association registered under the Securities and Exchange Act of 1934, as
amended. YOU SHALL NOT MAKE OFFERS OF SALE OF SHARES IN ANY STATE UNLESS YOU
HAVE
<PAGE>
BEEN NOTIFIED BY THE TRUST THAT SUCH SHARES HAVE BEEN REGISTERED UNDER THE
SECURITIES LAWS OF SUCH STATE, OR THAT THERE IS AN AVAILABLE EXEMPTION FROM
REGISTRATION.
1.4 Whenever in their judgment such action is warranted by market,
economic or political conditions, or by circumstances of any kind, the Trust's
officers may decline to accept any orders for, or make any sales of, any Shares
until such time as they deem it advisable to accept such orders and to make such
sales and the Trust shall advise you promptly of such determination.
1.5 Except as otherwise provided for in the Administrative Agreement
dated as of January 20, 1998, by and between the Trust and you (the
"Administration Agreement"),the Trust agrees to pay all costs and expenses in
connection with the registration of Shares under the Securities Act of 1933, as
amended, and all expenses in connection with maintaining facilities for the
issue and transfer of Shares and for supplying information, prices and other
data to be furnished by the Trust hereunder.
1.6 The Trust agrees to execute any and all documents and to furnish
any and all information and otherwise to take all actions which may be
reasonably necessary in the discretion of the Trust's officers in connection
with the qualification of Shares for sale in such states as you may designate to
the Trust and the Trust may approve, and the Trust agrees to pay all expenses
which may be incurred in connection with such qualification. You shall pay all
expenses connected with your own qualification as a broker under State or
Federal laws and, except as otherwise specifically provided in this agreement,
all other expenses incurred by you in connection with the sale of Shares as
contemplated in this agreement.
1.7 The Trust shall furnish you from time to time, for use in
connection with the sale of Shares, such information with respect to the Trust
and the Shares as you may reasonably request, and the Trust warrants that the
statements contained in any such information, when so signed by the Trust's
officers, shall be true and correct. Subject to the provisions of the
Administration Agreement the Trust also shall furnish you upon request with:
(a) annual audited reports of the Trust's books and accounts with respect to
each of the Funds, made by independent public accountants regularly retained by
the Trust, (b) semi-annual reports with respect to each of the Funds prepared by
the Trust, and (c) from time to time such additional information regarding the
Trust's financial condition as you may reasonably request.
1.8 The Trust represents to you that all registration statements and
prospectuses filed by the Trust with the Securities and Exchange Commission
under the Securities Act of 1933, as amended, with respect to the Shares have
been prepared in conformity with the requirements of said Act and rules and
regulations of the Securities and Exchange Commission thereunder. As used in
this agreement the terms "registration statement" and "prospectus" shall mean
any registration statement and prospectus (together with the related statement
of additional information) filed with the Securities and Exchange Commission
with respect to any of the Shares and any amendments and supplements thereto
which at any time shall have been filed with said Commission. The Trust
represents and warrants to you that any registration statement
2
<PAGE>
and prospectus, when such registration statement becomes effective, will contain
all statements required to be stated therein in conformity with said Act and the
rules and regulations of said Commission; that all statements of fact contained
in any such registration statement and prospectus will be materially true and
correct when such registration statement becomes effective; and that neither any
registration statement nor any prospectus when such registration statement
becomes effective will include 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. The Trust may but shall not be obligated to
propose from time to time such amendment or amendments to any registration
statement and such supplement or supplements to any prospectus as, in the light
of future developments, may, in the opinion of the Trust's counsel, be necessary
or advisable. If the Trust shall not propose such amendment or amendments
and/or supplement or supplements within fifteen days after receipt by the Trust
of a written request from you to do so, you may, at your option, terminate this
agreement. The Trust shall not file any amendment to any registration statement
or supplement to any prospectus without giving you reasonable notice thereof in
advance; provided, however, that nothing contained into this agreement shall in
any way limit the Trust's right to file at any time such amendments to any
registration statement and/or supplements to any prospectus, of whatever
character, as the Trust may deem advisable, such right being in all respects
absolute and unconditional.
1.9 The Trust authorizes you to use any prospectus in the form
furnished to you from time to time, in connection with the sale of Shares. The
Trust agrees to indemnify, defend and hold you, your several officers and
directors, and any person who controls you within the meaning of Section 15 of
the Securities Act of 1933, as amended, (hereinafter referred to collectively as
"indemnified party") free and harmless from and against any and all claims,
demands, liabilities and expenses (including the cost of investigating or
defending such claims, demands, or liabilities and any counsel fees in
connection therewith) which you, your officers and directors, or any such
controlling person, may incur under the Securities Act of 1933, as amended, or
under common law, or otherwise, arising out of or based upon any untrue
statement, or alleged untrue statement, of a material fact contained in any
registration statement or any prospectus or arising out of or based upon any
omission, or alleged omission, to state a material fact required to be stated in
either any registration statement or any prospectus or necessary to make the
statements in either thereof not misleading; provided, however, that the Trust's
agreement to indemnify you, your officers or directors, and any such controlling
person shall not be deemed to cover any claims, demands, liabilities or expenses
arising out of or based on any omission, or alleged omission, made in any
registration statement or prospectus in reliance upon and in conformity with
information furnished to the Trust or its counsel by you and used in the
preparation thereof; and provided further that the Trust's agreement to
indemnify you and the Trust's representations and warranties herein set forth
shall not be deemed to cover any liability to the Trust or its shareholders to
which you would otherwise be subject by reason of willful misfeasance, bad faith
or gross negligence in performance of your duties, or by reason of your reckless
disregard of your obligations and duties under this agreement. The Trust's
agreement to indemnify you, your officers and directors, and any such
controlling person, as aforesaid, is expressly conditioned upon the Trust's
being notified of any action brought against you, your officers and directors,
or any such controlling person, such notification to be given by letter or by
3
<PAGE>
telegram addressed to the Trust at its principal office within ten days after
the summons or other first legal process shall have been served. The failure to
so notify the Trust of any such action shall not relieve the Trust from any
liability which the Trust may have to the person against whom such action is
brought by reason of any such untrue, or alleged untrue, statement or omission,
or alleged omission, otherwise than on account of the Trust's indemnity
agreement contained in this paragraph 1.9. The Trust will be entitled to assume
the defense of any suit brought to enforce any such claim, demand, or liability,
but, in such case, such defense shall be conducted by counsel of good standing
chosen by the Trust and approved by you. In the event the Trust elects to
assume the defense of any such suit and retain counsel of good standing chosen
by the Trust and approved by you, which approval shall not be unreasonably
withheld, the defendant or defendants in such suit shall bear the fees and
expenses of any additional counsel retained by the defense of any such suit, or
in case you do not reasonably approve of counsel chosen by the Trust, the Trust
will reimburse you, your officers and directors, or the controlling person or
persons named as defendant or defendants in such suit, for the fees and expenses
of any counsel retained by you or them. The Trust's indemnification agreement
contained in this paragraph 1.9 and the Trust's representations and warranties
in this agreement shall remain operative and in full force and effect regardless
of any investigation made by or on behalf of you, your officers and directors,
and their respective estates, and to the benefit of any controlling persons and
their successors. The Trust agrees promptly to notify you of the commencement
of any litigation or proceedings against the Trust or any of its officers or
trustees in connection with the issue and sale of any of the Shares.
1.10 You agree to indemnify, defend and hold the Trust, its several
officers and trustees, and any person who controls the Trust within the meaning
of Section 15 of the Securities Act of 1933, as amended, free and harmless from
and against any and all claims, demands, liabilities and expenses (including the
cost of investigating or defending such claims, demands, liabilities, and any
counsel fees incurred in connection therewith) which the Trust, its officers or
trustees, or any such controlling person, may incur under the Securities Act of
1933, as amended, or under common law or otherwise, but only to the extent that
such a liability or expense incurred by the Trust, its officers or trustees, or
such controlling person resulting from such claims or demands, shall arise out
of or be based upon any omission, or alleged omission, to state a material fact
in connection with such information furnished by you to the Trust, or necessary
to make such information not misleading. Your agreement to indemnify the Trust,
its officers and trustees, or any such controlling person, such notification to
be given by letter or telegram addressed to you at your principal office within
ten days after the summons or other first legal process shall have been served.
You shall have the right to control the defense of such action with counsel of
your own choosing, satisfactory to the Trust, if such action is based solely
upon such alleged misstatement or omission on your part, and in any other event
the Trust, its officers or trustees or such controlling person shall each have
the right to participate in the defense or preparation of the defense of such
action. The failure so to notify you of any such action shall not relieve you
from any liability which you may have to the Trust, its officers or trustees, or
to such controlling person by reason of any such untrue, or alleged untrue,
statement of your omission, or alleged omission, otherwise than on account of
your indemnity agreement contained in this paragraph 1.10.
4
<PAGE>
1.11 No Shares shall be offered by either you or the Trust under any of the
provisions of this agreement and no orders for the purchase or sale of such
Shares hereunder shall be accepted by the Trust if and so long as the
effectiveness of the registration statement then in effect or any necessary
amendments thereto shall be suspended under any of the provisions of the
Securities and Exchange Commission; provided, however, that nothing contained in
this paragraph 1.11 shall in any way restrict or have an application to or
bearing upon the Trust's obligation to repurchase Shares from any shareholder in
accordance with the provisions of the prospectuses or Declaration of Trust.
1.12 You and the Trust each agree to advise the other promptly in writing:
(a) of any request by the Securities and Exchange
Commission for amendments to the registration statement
or prospectuses then in effect;
(b) in the event of the issuance by the Securities
and Exchange Commission of any stop order suspending
the effectiveness of the registration statement or
prospectuses then in effect or the initiation of any
proceeding for that purpose;
(c) of the happening of any event which makes
untrue any statement of a material fact made in the
registration statement or prospectuses in order to make
the statements therein not misleading; and
(d) of all the actions of the Securities and
Exchange Commission with respect to any registration
statement or prospectus which may from time to time be
filed with the Securities and Exchange Commission.
2. TERM
2.1 This agreement shall become effective as of the date hereof and,
unless sooner terminated, shall continue until February 1, 1996, and thereafter
shall continue automatically for successive annual periods, provided such
continuance is specifically approved at least annually by (i) the Trust's Board
of Trustees or (ii) the vote of a majority (as defined in the Investment Company
Act of 1940) of the Funds' outstanding Shares, provided that in either event its
continuance also is approved by a majority of the Trust's trustees who are not
"interested persons" (as defined in said Act) of any party to this agreement, by
vote cast in person at a meeting called for the purpose of voting on such
approval. Notwithstanding anything to the contrary in this Agreement, you may
not terminate this Agreement prior to the later of: (i) the Administration
Agreement; or (ii) the effectiveness of any termination notice pursuant to the
Administration Agreement.
5
<PAGE>
3. MISCELLANEOUS
3.1 The Trust recognizes that from time to time your directors,
officers and employees may serve as directors, officers and employees of other
corporations or business trusts (including other investment companies) and that
such other corporations and trust may include the name ALPS as part of their
name, and that you or your affiliates may enter into investment advisory or
other agreements with such other corporations and trusts.
3.2 The names "Financial Investors Trust" and "Trustees of Financial
Investors 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 Feb. 23, 1994, which is hereby referred to and a copy
of which is on file at the office of the State Secretary of State of Delaware
and the principal office of the Trust. The obligations of "Financial Investors
Trust" entered into in the name of 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 belonging to such class
for the enforcement of any claims against the Trust.
3.3 No substantive amendment of this Agreement shall be effective as to
the Trust until approved by vote of a majority of the outstanding voting
securities of the Trust.
3.4 No provision of this agreement may be changed, waived, discharged
or terminated orally, but only by an instrument in writing signed by the party
against which an enforcement of the change, waiver, discharge or determination
is sought.
3.5 This agreement shall be governed by Colorado law.
3.6 This agreement shall not be assigned by a party without the prior
written consent of the other party.
6
<PAGE>
Please confirm that the foregoing is in accordance with your understanding
by indicating your acceptance hereof at the place below indicated, whereupon it
shall become a binding agreement between us.
Very truly yours,
FINANCIAL INVESTORS TRUST
By: /s/ William Paston
---------------------------
Title: Vice President
Accepted:
ALPS Mutual Funds Services, Inc.
By: /s/ Thomas Carter
---------------------------
Title: Chief Financial Officer
7
<PAGE>
FINANCIAL INVESTORS TRUST
DISTRIBUTION AGREEMENT DATED JANUARY 20, 1998
SCHEDULE A
Aristata Equity Fund
Aristata Quality Bond Fund
Aristata Colorado Quality Tax-Exempt Bond Fund
Prime Money Market Fund
Dated April 21, 1998
Financial Investors Trust
By: /s/ William Paston
---------------------------
Title: Vice President
ALPS Mutual Funds Services, Inc.
By: /s/ Thomas Carter
---------------------------
Title: Chief Financial Officer
8
<PAGE>
AMENDED AND RESTATED
ADMINISTRATION AGREEMENT
January 20, 1998
ALPS Mutual Funds Services, Inc.
370 Seventeenth Street
Suite 2700
Denver, Colorado 80202
Dear Sirs:
Financial Investors Trust, a Massachusetts 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 U.S. Treasury Money
MarketFund, U.S. Government Money Market Fund and any other fund to be offered
by the Trust designated by the parties hereto and made subject to this Agreement
(each, a "Fund" and collectively, the "Funds") by investing and reinvesting the
same in investments of the type and in accordance with the limitations specified
within each Fund'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;
AND WHEREAS, the Trust desires to employ ALPS as its administrator for the
Funds;
AND WHEREAS, the Trust and ALPS wish to amend and restate their Amended and
Restated Administration Agreement dated as of March 15, 1994 to clarify that the
calculation of fees hereunder shall be determined by computing the assets of
each Fund subject to this Agreement separately from each other Fund and deriving
the fee therefore separately for each Fund rather than on an aggregate basis;
AND WHEREAS, the Trust and ALPS wish to amend and restate their Amended and
Restated Administration Agreement dated as of April 15, 1997 to clarify and
distinguish the services to be performed by ALPS and the fees payable to ALPS
for such services with respect to the Money Market Funds set forth on Schedule
A, attached hereto and made a part hereof, and with respect to the Aristata
Group of Funds set forth on Schedule B, attached hereto and made a part hereof;
NOW THEREFORE, 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 perform the services enumerated in said Schedules A
and B with respect to the Funds set forth in each such Schedule.
<PAGE>
2. FEES; DELEGATION; EXPENSES
In consideration of services rendered pursuant to this Agreement, the
Bookkeeping and Pricing Agreement, the Transfer Agency Agreement, the Custodian
Contract, and all other services described herein, each Fund will pay ALPS a
fee, computed daily and payable monthly, at the rates set forth in such
Schedules A and B with respect to the Funds set forth in each such Schedule.
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 Funds (and clients of said shareholders), and not to
use such record and information for any purpose other than 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 relates,
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 Fund operations or March 15, 1997, and unless sooner terminated as provided
herein, shall continue until March 15, 1997 (the "Initial Term"). Thereafter,
this Agreement shall continue automatically with respect to the Trust for
successive annual periods ending August 31 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 Fund (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 Fund, without penalty, solely by
agreement of the parties or for cause (as defined below) on not less than ninety
day notice by the Trust's Board of Trustees or by vote of a majority of the
outstanding voting securities of such Fund (as defined by the 1940 Act). After
the
2
<PAGE>
Initial Term, this Agreement may be terminated without cause or respect to a
Fund 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 Fund, or by ALPS, on not less than ninety days notice.
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 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, which substantially impairs the performance of ALPS' obligations and
duties hereunder.
6. GOVERNING LAW: State of Colorado
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 Trust" and "Trustees of Financial Investors
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 February 23, 1994 which is hereby referred to and a copy of which is
on file at the office of the Secretary of State of the Commonwealth of
Massachusetts and the principal office of the Trust. The obligations of
"Financial Investors 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
3
<PAGE>
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.
Very Truly Yours,
FINANCIAL INVESTORS TRUST
By /s/ William Paston
--------------------------------
Name: William Paston
Title: Vice President and Treasurer
Accepted:
ALPS MUTUAL FUNDS SERVICES, INC.
By /s/ Thomas A. Carter
------------------------------
Name: Thomas A. Carter
Title: Chief Financial Officer
4
<PAGE>
SCHEDULE A
U.S. TREASURY MONEY MARKET FUND
U.S. GOVERNMENT MONEY MARKET FUND
PRIME MONEY MARKET FUND
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) coordinate execution and
filing by the Funds of all federal and state tax returns and required tax
filings other than those required to be made by the Funds' custodian; (e)
prepare compliance filings pursuant to state securities laws with the advice of
the Trust's counsel; (f) assist to the extent requested by the Funds with the
preparation of Annual and Semi-Annual Reports to the Funds' shareholders and
Registration Statements for the Funds (on Form N-1A or any replacement
therefor); (g) monitor the Funds' expense accruals and pay all expenses on
proper authorization from the Funds; (h) monitor the Funds' status as a
regulated investment company under Subchapter M of the Internal Revenue Code of
1986, as amended from time to time; (i) maintain the Trust's fidelity bonds as
required by the 1940 Act; (j) monitor compliance with the policies and
limitations of each fund as set forth in the Prospectus, Statement of Additional
Information, Code of Regulations and Declaration of Trust; and (k) generally
assist in the Fund's operations; (l) perform fund accounting and pricing as set
out in the "Bookkeeping and Pricing Agreement"; (m) perform Transfer Agency as
set out in the "Transfer Agency Agreement" and 800-line servicing; (n) Monitor
the costs and coordinate custodial services as performed by a bank contracted by
ALPS; (o) cover the costs of external audit and tax work performed by one of the
"big six" accounting firms determined by ALPS; (p) monitor and pay Securities
and Exchange Commission registration fees; (q) cover all costs involved with the
coordination and printing of the Prospectus, Semi-Annual Report, Annual Report,
the Statement of Additional Information and the account applications; (r)
payment of trustee fees up to a maximum amount of $36,000 per year. (Bob
Alexander will serve as trustee at no compensation. William Paston will serve
as an officer of the Trust as Vice President, also at no cost to the Fund.); (s)
coordinate and pay for fund ratings, provided by two of the major ratings
agencies; (t) provide NASD licensing and training to the Financial Investors
Trust mutual fund sales force (u) act as principal underwriter and distributor
of the Funds' securities pursuant to a Distribution Agreement. The selected
sales force is subject to review and approval by ALPS.
5
<PAGE>
In compliance with the requirements of Rule 31a-3 under the 1940 Act,
ALPS hereby agrees that all records which it maintains for each Fund 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, the Custodian
Contract, and all other services described herein, each Fund will pay ALPS a
fee, computed daily and payable monthly, at the following annual rate of average
daily net assets of each Fund::
<TABLE>
<CAPTION>
U.S. Treasury U.S. Government/Prime
Money Market Money Market
------------ ------------
<S> <C> <C>
First $500 Million .26% .16%
Next $500 Million .24% .14%
In Excess of $1 Billion .22% .12%
Minimum Fee $50,000/month $30,000/month
</TABLE>
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 Fund in such respect.
6
<PAGE>
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. ALPS will not bear any of the costs of Financial Investors
personnel, except with regard to licensing and training Financial Investors
mutual fund sales staff, as outlined above. Other expenses to be incurred in
the operation of the Funds, including organizational expenses, taxes, interest,
brokerage fees and commissions, state Blue Sky qualification fees, advisory
fees, insurance premiums, fidelity bond, Trust and Advisory related legal
expenses, costs of maintenance of corporate existence, travel and entertainment
expenses for Trustees in excess of $36,000, shall be borne by the Trust.
Dated April 21, 1998
Financial Investors Trust
By: /s/ William Paston
--------------------------------
Title: Vice President
ALPS Mutual Funds Services, Inc.
By: /s/ Thomas Carter
--------------------------------
Title: Chief Financial Officer
7
<PAGE>
SCHEDULE B
ARISTATA EQUITY FUND
ARISTATA QUALITY BOND FUND
ARISTATA COLORADO QUALITY TAX-EXEMPT BOND FUND
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) coordinate execution and
filing by the Funds of all federal and state tax returns and required tax
filings other than those required to be made by the Funds' custodian; (e)
prepare compliance filings pursuant to state securities laws with the advice of
the Trust's counsel; (f) assist to the extent requested by the Funds with the
preparation of Annual and Semi-Annual Reports to the Funds' shareholders and
Registration Statements for the Funds (on Form N-1A or any replacement
therefor); (g) monitor the Funds' expense accruals and pay all expenses on
proper authorization from the Funds; (h) monitor the Funds' status as a
regulated investment company under Subchapter M of the Internal Revenue Code of
1986, as amended from time to time; (i) maintain the Trust's fidelity bonds as
required by the 1940 Act; (j) on a monthly basis, monitor compliance with the
policies and limitations of each fund as set forth in the Prospectus, Statement
of Additional Information, Code of Regulations and Declaration of Trust; and (k)
generally assist in the Fund's operations; (l) perform fund accounting and
pricing as set out in the "Bookkeeping and Pricing Agreement"; (m) perform
Transfer Agency as set out in the "Transfer Agency Agreement" and 800-line
servicing; (n) cover the costs and coordinate custodial services as performed by
a bank contracted by ALPS; (o) cover the costs of external audit and tax work
performed by one of the "big six" accounting firms determined by ALPS; (q) cover
all costs involved with the coordination and printing of the Prospectus, Semi-
Annual Report, Annual Report, and the Statement of Additional Information for
existing shareholders, up to $10,000 per year; (r) payment of trustee fees up to
a maximum amount of $36,000 per year; (u) act as principal underwriter and
distributor of the Funds' 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 Fund 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.
8
<PAGE>
2. FEES; DELEGATION; EXPENSES
In consideration of services rendered pursuant to this Agreement, the
Bookkeeping and Pricing Agreement, the Transfer Agency Agreement, the Custodian
Contract, and all other services described herein, each Fund will pay ALPS a
fee, computed daily and payable monthly, at the annual rate of .20% of average
daily net assets of each Fund, subject to a minimum fee per month of $15,000,
$7,500 and $5,000 for the Equity, Quality Bond and Colorado Quality Tax-Exempt
Bond Funds, respectively.
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 Fund 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. ALPS will not bear any of the costs of Financial Investors
personnel, except with regard to licensing and training Financial Investors
mutual fund sales staff, as outlined above. Other expenses to be incurred in
the operation of the Funds, including organizational expenses, taxes, interest,
brokerage fees and commissions, state Blue Sky qualification fees, advisory
fees, insurance premiums, fidelity bond, Trust and Advisory related legal
expenses, costs of maintenance of corporate existence, travel and entertainment
expenses for Trustees in excess of $36,000, shall be borne by the Trust.
Dated January 20, 1998
Financial Investors Trust
By: /s/ William Paston
--------------------------------
Title: Vice President
ALPS Mutual Funds Services, Inc.
By: /s/ Thomas Carter
--------------------------------
Title: Chief Financial Officer
9
<PAGE>
CUSTODY AGREEMENT
THIS AGREEMENT, is made as of March 2, 1998, by and between FINANCIAL
INVESTORS TRUST, a business trust organized under the laws of the State of
Delaware (the "Trust"), ALPS MUTUAL FUND SERVICES, a corporation organized under
the laws of the State of Colorado, ("Alps"), and THE FIFTH THIRD BANK, a banking
company organized under the laws of the State of Ohio (the "Custodian").
WITNESSETH:
WHEREAS, the Trust desires that the Securities and cash of each of the
investment portfolios identified in Exhibit A hereto (such investment portfolios
and individually referred to herein as a "Fund" and collectively as the
"Funds"), be held and administered by the Custodian pursuant to this Agreement;
and
WHEREAS, Alps is a provider of services to the Trust and for purposes of
this Agreement the term Trust shall be inclusive of the term Alps, unless
otherwise so noted; and
WHEREAS, the Trust is an open-end management investment company registered
under the Investment Company Act of 1940, as amended (the "1940 Act"); and
WHEREAS, the Custodian represents that it is a bank having the
qualifications prescribed in Section 26(a)(i) of the 1940 Act;
NOW, THEREFORE, in consideration of the mutual agreements herein made, the
Trust and the Custodian hereby agree as follows:
ARTICLE I
DEFINITIONS
Whenever used in this Agreement, the following words and phrases, unless
the context otherwise requires, shall have the following meanings:
1.1 "AUTHORIZED PERSON" means any Officer or other person duly authorized
by resolution of the Board of Trustees to give Oral Instructions and Written
Instructions on behalf of the Trust and named in Exhibit B hereto or in such
resolutions of the Board of Trustees, certified by an Officer, as may be
received by the Custodian from time to time.
1.2 "BOARD OF TRUSTEES" shall mean the Trustees from time to time serving
under the Trust's Agreement and Declaration of Trust, dated December 1, 1993, as
from time to time amended.
1.3 "BOOK-ENTRY SYSTEM" shall mean a federal book-entry system as provided
in Subpart O of Treasury Circular No. 300, 31 CFR 306, in Subpart B of 31 CFR
Part 350, or in such book-entry regulations of federal agencies as are
substantially in the form of such Subpart O.
1.4 "BUSINESS DAY" shall mean any day recognized as a settlement day by
The New York Stock Exchange, Inc. and any other day for which the Fund computes
the net asset value of the Fund.
1.5 "NASD" shall mean The National Association of Securities Dealers, Inc.
1.6 "OFFICER" shall mean the President, any Vice President, the Secretary,
any Assistant Secretary, the Treasurer, or any Assistant Treasurer of the Trust.
1.7 "ORAL INSTRUCTIONS" shall mean instructions orally transmitted to and
accepted by the Custodian because such instructions are reasonably believed by
the Custodian to have been given by an Authorized Person. The Trust shall cause
all Oral Instructions to be confirmed by Written Instructions. If such Written
Instructions confirming Oral Instructions are not received by the Custodian
prior to a transaction, it shall in no way affect the validity of
<PAGE>
the transaction or the authorization thereof by the Trust. If Oral Instructions
vary from the Written Instructions which purport to confirm them, the Custodian
shall notify the Trust of such variance but such Oral Instructions will govern
unless the Custodian has not yet acted.
1.8 "CUSTODY ACCOUNT" shall mean any account in the name of the Trust,
which is provided for in Section 3.2 below.
1.9 "PROPER INSTRUCTIONS" shall mean Oral Instructions or Written
Instructions. Proper Instructions may be continuing Written Instructions when
deemed appropriate by both parties.
1.10 "SECURITIES DEPOSITORY" shall mean The Participants Trust Company or
The Depository Trust Company and (provided that Custodian shall have received a
copy of a resolution of the Board of Trustees, certified by an Officer,
specifically approving the use of such clearing agency as a depository for the
Trust) any other clearing agency registered with the Securities and Exchange
Commission under Section 17A of the Securities and Exchange Act of 1934 (the
"1934 Act"), which acts as a system for the central handling of Securities where
all Securities of any particular class or series of an issuer deposited within
the system are treated as fungible and may be transferred or pledged by
bookkeeping entry without physical delivery of the Securities.
1.11 "SECURITIES" shall include, without limitation, common and preferred
stocks, bonds, call options, put options, debentures, notes, bank certificates
of deposit, bankers' acceptances, mortgage-backed securities, other money market
instruments or other obligations, and any certificates, receipts, warrants or
other instruments or documents representing rights to receive, purchase or
subscribe for the same, or evidencing or representing any other rights or
interests therein, or any similar property or assets that the Custodian has the
facilities to clear and to service.
1.12 "SHARES" shall mean the units of beneficial interest issued by the
Trust.
1.13 "WRITTEN INSTRUCTIONS" shall mean (i) written communications actually
received by the Custodian and signed by one or more persons as the Board of
Trustees shall have from time to time authorized, or (ii) communications by
facsimile or any other such system from a person or persons reasonably believed
by the Custodian to be Authorized, or (iii) communications transmitted
electronically through the Institutional Delivery System (IDS), or any other
similar electronic instruction system acceptable to Custodian and approved by
resolutions of the Board of Trustees, a copy of which, certified by an Officer,
shall have been delivered to the Custodian.
ARTICLE II
APPOINTMENT OF CUSTODIAN
2.1 APPOINTMENT. The Trust hereby constitutes and appoints the Custodian
as custodian of all Securities and cash owned by or in the possession of the
Trust at any time during the period of this Agreement, provided that such
Securities or cash at all times shall be and remain the property of the Trust.
2.2 ACCEPTANCE. The Custodian hereby accepts appointment as such
custodian and agrees to perform the duties thereof as hereinafter set forth and
in accordance with the 1940 Act as amended. Except as specifically set forth
herein, the Custodian shall have no liability and assumes no responsibly for any
non-compliance by the Trust or a Fund of any laws, rules or regulations.
ARTICLE III
CUSTODY OF CASH AND SECURITIES
3.1 SEGREGATION. All Securities and non-cash property held by the
Custodian for the account of each Fund, except Securities maintained in a
Securities Depository or Book-Entry System, shall be physically segregated from
other Securities and non-cash property in the possession of the Custodian and
shall be identified as subject to this Agreement.
2
<PAGE>
3.2 CUSTODY ACCOUNT. The Custodian shall open and maintain in its trust
department a custody account in the name of each Fund, subject only to draft or
order of the Custodian, in which the Custodian shall enter and carry all
Securities, cash and other assets of the Fund which are delivered to it.
3.3 APPOINTMENT OF AGENTS. With the Fund's consent (not unreasonably to
be withheld), the Custodian may appoint, and at any time remove, any domestic
bank or trust company, which has been approved by the Board of Trustees and is
qualified to act as a custodian under the 1940 Act, as sub-custodian to hold
Securities and cash of the Funds and to carry out such other provisions of this
Agreement as it may determine, and may also open and maintain one or more
banking accounts with such a bank or trust company (any such accounts to be in
the name of the Custodian and subject only to its draft or order), provided,
however, that the appointment of any such agent shall not relieve the Custodian
of any of its obligations or liabilities under this Agreement.
3.4 DELIVERY OF ASSETS TO CUSTODIAN. The Fund shall deliver, or cause to
be delivered, to the Custodian all of the Fund's Securities, cash and other
assets, including (a) all payments of income, payments of principal and capital
distributions received by the Fund with respect to such Securities, cash or
other assets owned by the Fund at any time during the period of this Agreement,
and (b) all cash received by the Fund for the issuance, at any time during such
period, of Shares. The Custodian shall not be responsible for such Securities,
cash or other assets until actually received by it.
3.5 SECURITIES DEPOSITORIES AND BOOK-ENTRY SYSTEMS. The Custodian may
deposit and/or maintain Securities of the Funds in a Securities Depository or in
a Book-Entry System, subject to the following provisions:
(a) Prior to a deposit of Securities of the Funds in any Securities
Depository or Book-Entry System, the Fund shall deliver to the
Custodian a resolution of the Board of Trustees, certified by an
Officer, authorizing and instructing the Custodian on an on-going
basis to deposit in such Securities Depository or Book-Entry System
all Securities eligible for deposit therein and to make use of such
Securities Depository or Book-Entry System to the extent possible and
practical in connection with its performance hereunder, including,
without limitation, in connection with settlements of purchases and
sales of Securities, loans of Securities, and deliveries and returns
of collateral consisting of Securities. So long as such Securities
Depository or Book-Entry System shall continue to be employed for the
deposit of Securities of the Funds, the Trust shall annually re-adopt
such resolution and deliver a copy thereof, certified by an Officer,
to the Custodian.
(b) Securities of the Fund kept in a Book-Entry System or Securities
Depository shall be kept in an account ("Depository Account") of the
Custodian in such Book-Entry System or Securities Depository which
includes only assets held by the Custodian as a fiduciary, custodian
or otherwise for customers.
(c) The records of the Custodian and the Custodian's account on the books
of the Book-Entry System and Securities Depository as the case may be,
with respect to Securities of a Fund maintained in a Book-Entry System
or Securities Depository shall, by book-entry, or otherwise identify
such Securities as belonging to the Fund.
(d) If Securities purchases by the Fund are to be held in a Book-Entry
System or Securities Depository, the Custodian shall pay for such
Securities upon (i) receipt of advice from the Book-Entry System or
Securities Depository that such Securities have been transferred to
the Depository Account, and (ii) the making of an entry on the records
of the Custodian to reflect such payment and transfer for the account
of the Fund. If Securities sold by the Fund are held in a Book-Entry
System or Securities Depository, the Custodian shall transfer such
Securities upon (i) receipt of advice from the Book-Entry System or
Securities depository that payment for such Securities has been
transferred to the Depository Account, and (ii) the making of an entry
on the records of the Custodian to reflect such transfer and payment
for the account of the Fund.
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(e) The Custodian shall provide the Fund with copies of any report
(obtained by the Custodian from a Book-Entry System or Securities
Depository in which Securities of the Fund is kept) on the internal
accounting controls and procedures for safeguarding Securities
deposited in such Book-Entry System or Securities Depository.
(f) Anything to the contrary in this Agreement notwithstanding, the
Custodian shall be liable to the Trust for any loss or damage to the
Trust resulting (i) from the use of a Book-Entry System or Securities
Depository by reason of any negligence or willful misconduct on the
part of Custodian or any sub-custodian appointed pursuant to Section
3.3 above or any of its or their employees, or (ii) from failure of
Custodian or any such sub-custodian to enforce effectively such rights
as it may have against a Book-Entry System or Securities Depository.
At its election, the Trust shall be subrogated to the rights of the
Custodian with respect to any claim against a Book-Entry System or
Securities Depository or any other person for any loss or damage to
the Funds arising from the use of such Book-Entry System or Securities
Depository, if and to the extent that the Trust has been made whole
for any such loss or damage.
3.6 DISBURSEMENT OF MONEYS FROM CUSTODY ACCOUNTS. Upon receipt of Proper
Instructions, the Custodian shall disburse moneys from a Fund Custody Account
but only in the following cases:
(a) For the purchase of Securities for the Fund but only upon compliance
with Section 4.1 of this Agreement and only (i) in the case of
Securities (other than options on Securities, futures contracts and
options on futures contracts), against the delivery to the Custodian
(or any sub-custodian appointed pursuant to Section 3.3 above) of such
Securities registered as provided in Section 3.9 below in proper form
for transfer, or if the purchase of such Securities is effected
through a Book-Entry System or Securities Depository, in accordance
with the conditions set forth in Section 3.5 above; (ii) in the case
of options on Securities, against delivery to the Custodian (or such
sub-custodian) of such receipts as are required by the customs
prevailing among dealers in such options; (iii) in the case of futures
contracts and options on futures contracts, against delivery to the
Custodian (or such sub-custodian) of evidence of title thereto in
favor of the Trust or any nominee referred to in Section 3.9 below;
and (iv) in the case of repurchase or reverse repurchase agreements
entered into between the Trust and a bank which is a member of the
Federal Reserve System or between the Trust and a primary dealer in
U.S. Government securities, against delivery of the purchased
Securities either in certificate form or through an entry crediting
the Custodian's account at a Book-Entry System or Securities
Depository for the account of the Fund with such Securities;
(b) In connection with the conversion, exchange or surrender, as set forth
in Section 3.7(f) below, of Securities owned by the Fund;
(c) For the payment of any dividends or capital gain distributions
declared by the Fund;
(d) In payment of the redemption price of Shares as provided in Section
5.1 below;
(e) For the payment of any expense or liability incurred by the Trust,
including but not limited to the following payments for the account of
a Fund: interest; taxes; administration, investment management,
investment advisory, accounting, auditing, transfer agent, custodian,
trustee and legal fees; and other operating expenses of a Fund; in all
cases, whether or not such expenses are to be in whole or in part
capitalized or treated as deferred expenses;
(f) For transfer in accordance with the provisions of any agreement among
the Trust, the Custodian and a broker-dealer registered under the 1934
Act and a member of the NASD, relating to compliance with rules of The
Options Clearing Corporation and of any registered national securities
exchange (or of any similar organization or organizations) regarding
escrow or other arrangements in connection with transactions by the
Trust;
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(g) For transfer in accordance with the provisions of any agreement among
the Trust, the Custodian, and a futures commission merchant registered
under the Commodity Exchange Act, relating to compliance with the
rules of the Commodity Futures Trading Commission and/or any contract
market (or any similar organization or organizations) regarding
account deposits in connection with transactions by the Trust;
(h) For the funding of any uncertificated time deposit or other
interest-bearing account with any banking institution (including the
Custodian), which deposit or account has a term of one year or less;
and
(i) For any other proper purposes, but only upon receipt, in addition to
Proper Instructions, of a copy of a resolution of the Board of
Trustees, certified by an Officer, specifying the amount and purpose
of such payment, declaring such purpose to be a proper corporate
purpose, and naming the person or persons to whom such payment is to
be made.
3.7 DELIVERY OF SECURITIES FROM FUND CUSTODY ACCOUNTS. Upon receipt of
Proper Instructions, the Custodian shall release and deliver Securities from a
Custody Account but only in the following cases:
(a) Upon the sale of Securities for the account of a Fund but only against
receipt of payment therefor in cash, by certified or cashiers check or
bank credit;
(b) In the case of a sale effected through a Book-Entry System or
Securities Depository, in accordance with the provisions of Section
3.5 above;
(c) To an Offeror's depository agent in connection with tender or other
similar offers for Securities of a Fund; provided that, in any such
case, the cash or other consideration is to be delivered to the
Custodian;
(d) To the issuer thereof or its agent (i) for transfer into the name of
the Trust, the Custodian or any sub-custodian appointed pursuant to
Section 3.3 above, or of any nominee or nominees of any of the
foregoing, or (ii) for exchange for a different number of certificates
or other evidence representing the same aggregate face amount or
number of units; provided that, in any such case, the new Securities
are to be delivered to the Custodian;
(e) To the broker selling Securities, for examination in accordance with
the "street delivery" custom;
(f) For exchange or conversion pursuant to any plan of merger,
consolidation, recapitalization, reorganization or readjustment of the
issuer of such Securities, or pursuant to provisions for conversion
contained in such Securities, or pursuant to any deposit agreement,
including surrender or receipt of underlying Securities in connection
with the issuance or cancellation of depository receipts; provided
that, in any such case, the new Securities and cash, if any, are to be
delivered to the Custodian;
(g) Upon receipt of payment therefor pursuant to any repurchase or reverse
repurchase agreement entered into by a Fund;
(h) In the case of warrants, rights or similar Securities, upon the
exercise thereof, provided that, in any such case, the new Securities
and cash, if any, are to be delivered to the Custodian;
(i) For delivery in connection with any loans of Securities of a Fund, but
only against receipt of such collateral as the Trust shall have
specified to the Custodian in Proper Instructions;
(j) For delivery as security in connection with any borrowings by the
Trust on behalf of a Fund requiring a pledge of assets by such Fund,
but only against receipt by the Custodian of the amounts borrowed;
(k) Pursuant to any authorized plan of liquidation, reorganization,
merger, consolidation or recapitalization of the Trust or a Fund;
(l) For delivery in accordance with the provisions of any agreement among
the Trust, the Custodian and a broker-dealer registered under the 1934
Act and a member of the NASD, relating to compliance with the
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rules of The Options Clearing Corporation and of any registered
national securities exchange (or of any similar organization or
organizations) regarding escrow or other arrangements in connection
with transactions by the Trust on behalf of a Fund;
(m) For delivery in accordance with the provisions of any agreement among
the Trust on behalf of a Fund, the Custodian, and a futures commission
merchant registered under the Commodity Exchange Act, relating to
compliance with the rules of the Commodity Futures Trading Commission
and/or any contract market (or any similar organization or
organizations) regarding account deposits in connection with
transactions by the Trust on behalf of a Fund; or
(n) For any other proper corporate purposes, but only upon receipt, in
addition to Proper Instructions, of a copy of a resolution of the
Board of Trustees, certified by an Officer, specifying the Securities
to be delivered, setting forth the purpose for which such delivery is
to be made, declaring such purpose to be a proper corporate purpose,
and naming the person or persons to whom delivery of such Securities
shall be made.
3.8 ACTIONS NOT REQUIRING PROPER INSTRUCTIONS. Unless otherwise
instructed by the Trust, the Custodian shall with respect to all Securities held
for a Fund;
(a) Subject to Section 7.4 below, collect on a timely basis all income and
other payments to which the Trust is entitled either by law or
pursuant to custom in the securities business;
(b) Present for payment and, subject to Section 7.4 below, collect on a
timely basis the amount payable upon all Securities which may mature
or be called, redeemed, or retired, or otherwise become payable;
(c) Endorse for collection, in the name of the Trust, checks, drafts and
other negotiable instruments;
(d) Surrender interim receipts or Securities in temporary form for
Securities in definitive form;
(e) Execute, as custodian, any necessary declarations or certificates of
ownership under the federal income tax laws or the laws or regulations
of any other taxing authority now or hereafter in effect, and prepare
and submit reports to the Internal Revenue Service ("IRS") and to the
Trust at such time, in such manner and containing such information as
is prescribed by the IRS;
(f) Hold for a Fund, either directly or, with respect to Securities held
therein, through a Book-Entry System or Securities Depository, all
rights and similar securities issued with respect to Securities of the
Fund; and
(g) In general, and except as otherwise directed in Proper Instructions,
attend to all non-discretionary details in connection with sale,
exchange, substitution, purchase, transfer and other dealings with
Securities and assets of the Fund.
3.9 REGISTRATION AND TRANSFER OF SECURITIES. All Securities held for a
Fund that are issued or issuable only in bearer form shall be held by the
Custodian in that form, provided that any such Securities shall be held in a
Book-Entry System for the account of the Trust on behalf of a Fund, if eligible
therefor. All other Securities held for a Fund may be registered in the name of
the Trust on behalf of such Fund, the Custodian, or any sub-custodian appointed
pursuant to Section 3.3 above, or in the name of any nominee of any of them, or
in the name of a Book-Entry System, Securities Depository or any nominee of
either thereof; provided, however, that such Securities are held specifically
for the account of the Trust on behalf of a Fund. The Trust shall furnish to
the Custodian appropriate instruments to enable the Custodian to hold or deliver
in proper form for transfer, or to register in the name of any of the nominees
hereinabove referred to or in the name of a Book-Entry System or Securities
Depository, any Securities registered in the name of a Fund.
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3.10 RECORDS. (a) The Custodian shall maintain, by Fund, complete and
accurate records with respect to Securities, cash or other property held for the
Trust, including (i) journals or other records of original entry containing an
itemized daily record in detail of all receipts and deliveries of Securities and
all receipts and disbursements of cash; (ii) ledgers (or other records)
reflecting (A) Securities in transfer, (B) Securities in physical possession,
(C) monies and Securities borrowed and monies and Securities loaned (together
with a record of the collateral therefor and substitutions of such collateral),
(D) dividends and interest received, and (E) dividends receivable and interest
accrued; and (iii) canceled checks and bank records related thereto. The
Custodian shall keep such other books and records of the Trust as the Trust
shall reasonably request, or as may be required by the 1940 Act, including, but
not limited to Section 3.1 and Rule 31a-1 and Rule 31a-2 promulgated thereunder.
(b) All such books and records maintained by the Custodian shall (i) be
maintained in a form acceptable to the Trust and in compliance with rules and
regulations of the Securities and Exchange Commission, (ii) be the property of
the Trust and at all times during the regular business hours of the Custodian be
made available upon request for inspection by duly authorized officers,
employees or agents of the Trust and employees or agents of the Securities and
Exchange Commission, and (iii) if required to be maintained by Rule 31a-1 under
the 1940 Act, be preserved for the periods prescribed in Rule 31a-2 under the
1940 Act.
3.11 FUND REPORTS BY CUSTODIAN. The Custodian shall furnish the Trust with
a daily activity statement by Fund and a summary of all transfers to or from the
Custody Account on the day following such transfers. At least monthly and from
time to time, the Custodian shall furnish the Trust with a detailed statement,
by Fund, of the Securities and moneys held for the Trust under this Agreement.
3.12 OTHER REPORTS BY CUSTODIAN. The Custodian shall provide the Trust
with such reports, as the Trust may reasonably request from time to time, on the
internal accounting controls and procedures for safeguarding Securities, which
are employed by the Custodian or any sub-custodian appointed pursuant to Section
3.3 above.
3.13 PROXIES AND OTHER MATERIALS. The Custodian shall cause all proxies if
any, relating to Securities which are not registered in the name of a Fund, to
be promptly executed by the registered holder of such Securities, without
indication of the manner in which such proxies are to be voted, and shall
include all other proxy materials, if any, promptly deliver to the Trust such
proxies, all proxy soliciting materials, which should include all other proxy
materials, if any, and all notices to such Securities.
3.14 INFORMATION ON CORPORATE ACTIONS. Custodian will promptly notify the
Trust of corporate actions, limited to those Securities registered in nominee
name and to those Securities held at a Depository or sub-Custodian acting as
agent for Custodian. Custodian will be responsible only if the notice of such
corporate actions is published by the Financial Daily Card Service, J.J. Kenny
Called Bond Service, DTC, or received by first class mail from the agent. For
market announcements not yet received and distributed by Custodian's services,
Trust will inform its custody representative with appropriate instructions.
Custodian will, upon receipt of Trust's response within the required deadline,
affect such action for receipt or payment for the Trust. For those responses
received after the deadline, Custodian will affect such action for receipt or
payment, subject to the limitations of the agent(s) affecting such actions.
Custodian will promptly notify Trust for put options only if the notice is
received by first class mail from the agent. The Trust will provide or cause to
be provided to Custodian with all relevant information contained in the
prospectus for any security which has unique put/option provisions and provide
Custodian with specific tender instructions at least ten business days prior to
the beginning date of the tender period.
ARTICLE IV
PURCHASE AND SALE OF INVESTMENTS OF THE FUND
4.1 PURCHASE OF SECURITIES. Promptly upon each purchase of Securities for
the Trust, Written Instructions shall be delivered to the Custodian, specifying
(a) the name of the issuer or writer of such Securities, and the title or other
description thereof, (b) the number of shares, principal amount (and accrued
interest, if any) or other units purchased, (c) the date of purchase and
settlement, (d) the purchase price per unit, (e) the total amount payable upon
such purchase, and (f) the name of the person to whom such amount is payable.
The Custodian shall upon receipt of such Securities purchased by a Fund pay out
of the moneys held for the account of such Fund the total amount specified in
such Written Instructions to the person named therein. The Custodian shall not
be under any obligation to pay out moneys to cover the cost of a purchase of
Securities for a Fund, if in the relevant Custody Account there is insufficient
cash available to the Fund for
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which such purchase was made.
4.2 LIABILITY FOR PAYMENT IN ADVANCE OF RECEIPT OF SECURITIES PURCHASED.
In any and every case where payment for the purchase of Securities for a Fund is
made by the Custodian in advance of receipt for the account of the Fund of the
Securities purchased but in the absence of specific Written or Oral Instructions
to so pay in advance, the Custodian shall be liable to the Fund for such
Securities to the same extent as if the Securities had been received by the
Custodian.
4.3 SALE OF SECURITIES. Promptly upon each sale of Securities by a Fund,
Written Instructions shall be delivered to the Custodian, specifying (a) the
name of the issuer or writer of such Securities, and the title or other
description thereof, (b) the number of shares, principal amount (and accrued
interest, if any), or other units sold, (c) the date of sale and settlement (d)
the sale price per unit, (e) the total amount payable upon such sale, and (f)
the person to whom such Securities are to be delivered. Upon receipt of the
total amount payable to the Trust as specified in such Written Instructions, the
Custodian shall deliver such Securities to the person specified in such Written
Instructions. Subject to the foregoing, the Custodian may accept payment in
such form as shall be satisfactory to it, and may deliver Securities and arrange
for payment in accordance with the customs prevailing among dealers in
Securities.
4.4 DELIVERY OF SECURITIES SOLD. Notwithstanding Section 4.3 above or any
other provision of this Agreement, the Custodian, when instructed to deliver
Securities against payment, shall be entitled, if in accordance with generally
accepted market practice for investment companies, to deliver such Securities
prior to actual receipt of final payment therefor. In any such case, the Trust
shall bear the risk that final payment for such Securities may not be made or
that such Securities may be returned or otherwise held or disposed of by or
through the person to whom they were delivered, and the Custodian shall have no
liability for any of the foregoing.
4.5 PAYMENT FOR SECURITIES SOLD, ETC. In its sole discretion and from
time to time, the Custodian may credit the relevant Custody Account, prior to
actual receipt of final payment thereof, with (i) proceeds from the sale of
Securities which it has been instructed to deliver against payment, (ii)
proceeds from the redemption of Securities or other assets of the Trust, and
(iii) income from cash, Securities or other assets of the Trust. Any such
credit shall be conditional upon actual receipt by Custodian of final payment
and may be reversed if final payment is not actually received in full. The
Custodian may, in its sole discretion and from time to time, permit the Trust to
use funds so credited to its Custody Account in anticipation of actual receipt
of final payment. Any such funds shall be repayable immediately upon demand
made by the Custodian at any time prior to the actual receipt of all final
payments in anticipation of which funds were credited to the Custody Account.
4.6 ADVANCES BY CUSTODIAN FOR SETTLEMENT. The Custodian may, in its sole
discretion and from time to time, advance funds to the Trust to facilitate the
settlement of a Trust transactions on behalf of a Fund in its Custody Account.
Any such advance shall be repayable immediately upon demand made by Custodian.
ARTICLE V
REDEMPTION OF TRUST SHARES
TRANSFER OF FUNDS. From such funds as may be available for the purpose in
the relevant Custody Account, and upon receipt of Proper Instructions specifying
that the funds are required to redeem Shares of a Fund, the Custodian shall wire
each amount specified in such Proper Instructions to or through such bank as the
Trust may designate with respect to such amount in such Proper Instructions.
Upon effecting payment or distribution in accordance with proper Instruction,
the Custodian shall not be under any obligation or have any responsibility
thereafter with respect to any such paying bank.
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ARTICLE VI
SEGREGATED ACCOUNTS
Upon receipt of Proper Instructions, the Custodian shall establish and
maintain a segregated account or accounts for and on behalf of each Fund, into
which account or accounts may be transferred cash and/or Securities, including
Securities maintained in a Depository Account,
(a) in accordance with the provisions of any agreement among the Trust,
the Custodian and a broker-dealer registered under the 1934 Act and a
member of the NASD (or any futures commission merchant registered
under the Commodity Exchange Act), relating to compliance with the
rules of The Options Clearing Corporation and of any registered
national securities exchange (or the Commodity Futures Trading
commission or any registered contract market), or of any similar
organization or organizations, regarding escrow or other arrangements
in connection with transactions by the Trust,
(b) for purposes of segregating cash or Securities in connection with
securities options purchased or written by a Fund or in connection
with financial futures contracts (or options thereon) purchased or
sold by a Fund,
(c) which constitute collateral for loans of Securities made by a Fund,
(d) for purposes of compliance by the Trust with requirements under the
1940 Act for the maintenance of segregated accounts by registered
investment companies in connection with reverse repurchase agreements
and when-issued, delayed delivery and firm commitment transactions,
and
(e) for other proper corporate purposes, but only upon receipt of, in
addition to Proper Instructions, a certified copy of a resolution of
the Board of Trustees, certified by an Officer, setting forth the
purpose or purposes of such segregated account and declaring such
purposes to be proper corporate purposes.
ARTICLE VII
CONCERNING THE CUSTODIAN
7.1 STANDARD OF CARE. The Custodian shall be held to the exercise of
reasonable care in carrying out its obligations under this Agreement, and shall
be without liability to the Trust for any loss, damage, cost, expense (including
attorneys' fees and disbursements), liability or claim unless such loss,
damages, cost, expense, liability or claim arises from negligence, bad faith or
willful misconduct on its part or on the part of any sub-custodian appointed
pursuant to Section 3.3 above. The Custodian's cumulative liability within a
calendar year shall be limited with respect to the Trust, or any party claiming
by, through or on behalf of the Trust, for the initial and all subsequent
renewal terms of this Agreement, to the actual damages sustained by the Trust
(actual damages for uninvested funds shall be the overnight Fed fund rate). The
Custodian shall be entitled to rely on and may act upon advice of counsel on all
matters, and shall be without liability for any action reasonably taken or
omitted pursuant to such advice. The Custodian shall promptly notify the Trust
of any action taken or omitted by the Custodian pursuant to advice of counsel.
The Custodian shall not be under any obligation at any time to ascertain whether
the Trust is in compliance with the 1940 Act, the regulations thereunder, the
provisions of the Trust's charter documents or by-laws, or its investment
objectives and policies as then in effect.
7.2 ACTUAL COLLECTION REQUIRED. The Custodian shall not be liable for, or
considered to be the custodian of, any cash belonging to the Trust or any money
represented by a check, draft or other instrument for the payment of money,
until the Custodian or its agents actually receive such cash or collect on such
instrument.
7.3 NO RESPONSIBILITY FOR TITLE, ETC. So long as and to the extent that
it is in the exercise of reasonable care, the Custodian shall not be responsible
for the title, validity or genuineness of any property or evidence of title
thereto received or delivered by it pursuant to this Agreement.
7.4 LIMITATION ON DUTY TO COLLECT. Custodian shall not be required to
enforce collection, by legal means or otherwise, of any money or property due
and payable with respect to Securities held for the Trust if such Securities are
in default or payment is not made after due demand or presentation and the Fund,
after notice from the Custodian, has not
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provided written instruction to proceed and ensured reimbursement of related
custodian expenses.
7.5 RELIANCE UPON DOCUMENTS AND INSTRUCTIONS. The Custodian shall be
entitled to rely upon any certificate, notice or other instrument in writing
received by it and reasonably believed by it to be genuine. The Custodian shall
be entitled to rely upon any Oral Instructions and/or any Written Instructions
actually received by it pursuant to this Agreement.
7.6 EXPRESS DUTIES ONLY. The Custodian shall have no duties or
obligations whatsoever except such duties and obligations as are specifically
set forth in this Agreement, and no covenant or obligation shall be implied in
this Agreement against the Custodian.
7.7 COOPERATION. The Custodian shall cooperate with and supply necessary
information, by the Trust, to the entity or entities appointed by the Trust to
keep the books of account of the Trust and/or compute the value of the assets of
the Trust. The Custodian shall take all such reasonable actions as the Trust
may from time to time request to enable the Trust to obtain, from year to year,
favorable opinions from the Trust's independent accountants with respect to the
Custodian's activities hereunder in connection with (a) the preparation of the
Trust's report on Form N-1A and Form N-SAR and any other reports required by the
Securities and Exchange Commission, and (b) the fulfillment by the Trust of any
other requirements of the Securities and Exchange Commission.
ARTICLE VIII
INDEMNIFICATION
8.1 INDEMNIFICATION. The Trust shall indemnify and hold harmless the
Custodian and any sub-custodian appointed pursuant to Section 3.3 above, and any
nominee of the Custodian or of such sub-custodian from and against any loss,
damage, cost, expense (including attorneys' fees and disbursements), liability
(including, without limitation, liability arising under the Securities Act of
1933, the 1934 Act, the 1940 Act, and any state or foreign securities and/or
banking laws) or claim arising directly or indirectly (a) from the fact that
Securities are registered in the name of any such nominee, or (b) from any
action or inaction by the Custodian or such sub-custodian (i) at the request or
direction of or in reliance on the advice of the Trust, or (ii) upon Proper
Instructions, or (c) generally, from the performance of its obligations under
this Agreement or any sub-custody agreement with a sub-custodian appointed
pursuant to Section 3.3 above or, in the case of any such sub-custodian, from
the performance of its obligations under such custody agreement, provided that
neither the Custodian nor any such sub-custodian shall be indemnified and held
harmless from and against any such loss, damage, cost, expense, liability or
claim arising from the Custodian's or such sub-custodian's negligence, bad faith
or willful misconduct. The Custodian shall indemnify and hold harmless the
Trust from and against any loss, damage, cost, expense (including attorneys'
fees and disbursements), liability (including, without limitation, liability
arising under the Securities Act of 1933, the 1934 Act, the 1940 Act, and any
state or foreign securities and/or banking laws) directly arising from the
Custodian's negligence, bad faith or willful misconduct.
8.2 INDEMNITY TO BE PROVIDED. If the Trust requests the Custodian to take
any action with respect to Securities, which may, in the opinion of the
custodian, result in the Custodian or its nominee becoming liable for the
payment of money or incurring liability of some other form, the Custodian shall
not be required to take such action until the Trust shall have provided
indemnity therefor to the Custodian in an amount and form satisfactory to the
Custodian.
ARTICLE IX
FORCE MAJEURE
Neither the Custodian nor the Trust shall be liable for any failure or
delay in performance of its obligations under this Agreement arising out of or
caused, directly or indirectly, by circumstances beyond its reasonable control,
including, without limitation, acts of God; earthquakes; fires; floods; wars;
civil or military disturbances; sabotage; strikes; epidemics; riots; power
failures; computer failure and any such circumstances beyond its reasonable
control as may cause interruption, loss or malfunction of utility,
transportation, computer (hardware or software) or telephone communication
service; accidents; labor disputes, acts of civil or military authority;
governmental actions; or inability to obtain labor, material,
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equipment or transportation; provided, however, that the Custodian in the event
of a failure or delay shall use its best efforts to ameliorate the effects of
any such failure or delay. Notwithstanding the foregoing, the Custodian shall
maintain sufficient disaster recovery procedures to minimize interruptions.
ARTICLE X
EFFECTIVE PERIOD; TERMINATION
10.1 EFFECTIVE PERIOD. This Agreement shall become effective as of the
date first set forth above and shall continue in full force and effect until
terminated as hereinafter provided.
10.2 TERMINATION. Either party hereto may terminate this Agreement by
giving to the other party a notice in writing specifying the date of such
termination, which shall be not less than sixty (60) days after the date of the
giving of such notice. If a successor custodian shall have been appointed by
the Board of Trustees, the Custodian shall, upon receipt of a notice of
acceptance by the successor custodian, on such specified date of termination (a)
deliver directly to the successor custodian all Securities (other than
Securities held in a Book-Entry System or Securities Depository) and cash then
owned by the Trust and held by the Custodian as custodian, and (b) transfer any
Securities held in a Book-Entry System or Securities Depository to an account of
or for the benefit of the Trust at the successor custodian, provided that the
administrator shall have paid to the Custodian all fees, expenses and other
amounts to the payment or reimbursement of which it shall then be entitled.
Upon such delivery and transfer, the Custodian shall be relieved of all
obligations under this Agreement. The Trust may at any time immediately
terminate this Agreement in the event of the appointment of a conservator or
receiver for the Custodian by regulatory authorities in the State of Ohio or
upon the happening of a like event at the direction of an appropriate regulatory
agency or court of competent jurisdiction.
10.3 FAILURE TO APPOINT SUCCESSOR CUSTODIAN. If a successor custodian is
not designated by the Trust on or before the date of termination specified
pursuant to Section 10.1 above, then the Custodian shall have the right to
deliver to a bank or trust company of its own selection, which is (a) a "Bank"
as defined in the 1940 Act, (b) has aggregate capital, surplus and undivided
profits as shown on its then most recent published report of not less than $25
million, and (c) is doing business in New York, New York, all Securities, cash
and other property held by Custodian under this Agreement and to transfer to an
account of or for the Trust at such bank or trust company all Securities of the
Trust held in a Book-Entry System or Securities Depository. Upon such delivery
and transfer, such bank or trust company shall be the successor custodian under
this Agreement and the Custodian shall be relieved of all obligations under this
Agreement. If, after reasonable inquiry, Custodian cannot find a successor
custodian as contemplated in this Section 10.3, then Custodian shall have the
right to deliver to the Trust all Securities and cash then owned by the Trust
and to transfer any Securities held in a Book-Entry System or Securities
Depository to an account of or for the Trust. Thereafter, the Trust shall be
deemed to be its own custodian with respect to the Trust and the Custodian shall
be relieved of all obligations under this Agreement.
ARTICLE XI
CONFIDENTIALITY
The Custodian and the Trust agree to keep this Agreement, the terms hereof,
and all documents and information relating hereto, or furnished pursuant to or
in connection herewith, confidential, except as may be required by law.
Notwithstanding the foregoing, nothing in this Article XI shall prohibit the
Custodian or the Trust from disclosing such confidential information to (a)
state or federal regulators, if in the Custodian's or the Trust's judgment, it
believes that such disclosure is required or advisable, (b) the outside legal,
financial or accounting advisors of the Custodian or the Trust and (c) other
parties, with the prior written consent of the Custodian or the Trust as the
case may be. This Article XI shall survive the termination of this Agreement.
ARTICLE XII
COMPENSATION OF CUSTODIAN
The Custodian shall be entitled to compensation from the Trust's
Administrator, ALPS Mutual Funds Services, Inc. ("ALPS"), as agreed upon from
time to time by the ALPS and the Custodian. The fees and other charges in
effect on the date hereof and applicable to the Funds are set forth in Exhibit B
attached hereto.
ARTICLE XIII
LIMITATION OF LIABILITY
11
<PAGE>
The Trust is a business trust organized under the laws of the State of
Delaware and under a Declaration of Trust, to which reference is hereby made a
copy of which is on file at the office of the Secretary of State of Delaware as
required by law, and to any and all amendments thereto so filed or hereafter
filed. The obligations of the Trust entered into in the name of the Trust or on
behalf thereof by any of the Trustees, officers, employees or agents are made
not individually, but in such capacities, and are not binding upon any of the
Trustees, officers, employees, agents or shareholders of the Trust or the Funds
personally, but bind only the assets of the Trust, and all persons dealing with
any of the Funds of the Trust must look solely to the assets of the Trust
belonging to such Fund for the enforcement of any claims against the Trust.
ARTICLE XIV
NOTICES
Unless otherwise specified herein, all demands, notices, instructions, and
other communications to be given hereunder shall be in writing and shall be sent
or delivered to The receipt at the address set forth after its name herein
below:
TO THE TRUST:
Financial Investors Trust:Aristata Funds
370 17th Street, Suite 3100
Denver, CO 80202
Attn: Treasurer
Telephone: (800) 644-8595
Facsimile: (303) 623-7850
TO THE CUSTODIAN:
The Fifth Third Bank
38 Fountain Square Plaza
Cincinnati, Ohio 45263
Attn: Area Manager - Trust Operations
Telephone: (513) 579-5300
Facsimile: (513) 579-4312
or at such other address as either party shall have provided to the other by
notice given in accordance with this Article XIII. Writing shall include
transmission by or through teletype, facsimile, central processing unit
connection, on-line terminal and magnetic tape.
ARTICLE XV
MISCELLANEOUS
15.1 GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Ohio.
15.2 REFERENCES TO CUSTODIAN. The Trust shall not circulate any printed
matter which contains any reference to Custodian without the prior written
approval of Custodian, excepting printed matter contained in the prospectus or
statement of additional information or its registration statement for the Trust
and such other printed matter as merely identifies Custodian as custodian for
the Trust. The Trust shall submit printed matter requiring approval to
Custodian in draft form, allowing sufficient time for review by Custodian and
its counsel prior to any deadline for printing.
15.3 NO WAIVER. No failure by either party hereto to exercise and no delay
by such party in exercising, any right hereunder shall operate as a waiver
thereof. The exercise by either party hereto of any right hereunder shall not
preclude the exercise of any other right, and the remedies provided herein are
cumulative and not exclusive of any remedies provided at law or in equity.
12
<PAGE>
15.4 AMENDMENTS. This Agreement cannot be changed orally and no amendment
to this Agreement shall be effective unless evidenced by an instrument in
writing executed by the parties hereto.
15.5 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, and by the parties hereto on separate counterparts, each of which
shall be deemed an original but all of which together shall constitute but one
and the same instrument.
15.6 SEVERABILITY. If any provision of this Agreement shall be invalid,
illegal or unenforceable in any respect under any applicable law, the validity,
legality and enforceability of the remaining provisions shall not be affected or
impaired thereby.
15.7 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
shall inure to the benefit of the parties hereto and their respective successors
and assigns; provided, however, that this Agreement shall not be assignable by
either party hereto without the written consent of the other party hereto.
15.8 HEADINGS. The headings of sections in this Agreement are for
convenience of reference only and shall not affect the meaning or construction
of any provision of this Agreement.
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to
be executed and delivered in its name and on its behalf by its representatives
thereunto duly authorized, all as of the day and year first above written.
ATTEST: FINANCIAL INVESTORS TRUST
/s/ Robert J. Sydlowski By: /s/ Jeremy May
- ------------------------------ --------------------------------
Its: Assistant Treasurer
-------------------------------
ATTEST: THE FIFTH THIRD BANK
/s/ Elizabeth Goldthwaite By: /s/ Tracie Hoffman
- ------------------------------ --------------------------------
Its: Vice President
-------------------------------
ATTEST: ALPS MUTUAL FUND SERVICES
/s/ Sean R. McLean By: /s/ Thomas A. Carter
- ------------------------------ --------------------------------
Its: Chief Financial Officer
-------------------------------
13
<PAGE>
Dated March 2, 1998
EXHIBIT A
TO THE CUSTODY AGREEMENT BETWEEN
FINANCIAL INVESTORS TRUST, ALPS MUTUAL FUND SERVICES, AND THE FIFTH THIRD BANK
MARCH 2, 1998
Name of Fund Date
------------ ----
Aristata Equity Fund March 2, 1998
Aristata Quality Bond Fund March 2, 1998
Aristata Colorado Quality Tax Exempt Fund March 2, 1998
FINANCIAL INVESTORS TRUST
By: /s/ Jeremy May
--------------------------------------
Its: Assistant Treasurer
--------------------------------------
THE FIFTH THIRD BANK
By: /s/ Tracie Hoffman
--------------------------------------
Its: Vice President
--------------------------------------
ALPS MUTUAL FUND SERVICES
By: /s/ Thomas A. Carter
--------------------------------------
Its: Chief Financial Officer
--------------------------------------
14
<PAGE>
Dated: March 2, 1998
EXHIBIT B
TO THE CUSTODY AGREEMENT BETWEEN
FINANCIAL INVESTORS TRUST, ALPS MUTUAL FUND SERVICES AND THE FIFTH THIRD BANK
MARCH 2, 1998
AUTHORIZED PERSONS
Set forth below are the names and specimen signatures of the persons
authorized by the Trust to Administer each Custody Account.
Name Signature
---- ---------
------------------------------ ------------------------------
------------------------------ ------------------------------
------------------------------ ------------------------------
------------------------------ ------------------------------
------------------------------ ------------------------------
------------------------------ ------------------------------
------------------------------ ------------------------------
------------------------------ ------------------------------
15
<PAGE>
SIGNATURE RESOLUTION
RESOLVED, That all of the following officers of FINANCIAL INVESTORS TRUST and
any of them, namely the Chairman, President, Vice President, Secretary and
Treasurer, are hereby authorized as signers for the conduct of business for an
on behalf of the Funds with THE FIFTH THIRD BANK:
CHAIRMAN
- ------------------- -------------------------------
PRESIDENT
- ------------------- -------------------------------
VICE PRESIDENT
- ------------------- -------------------------------
VICE PRESIDENT
- ------------------- -------------------------------
VICE PRESIDENT
- ------------------- -------------------------------
VICE PRESIDENT
- ------------------- -------------------------------
TREASURER
- ------------------- -------------------------------
SECRETARY
- ------------------- -------------------------------
In addition, the following Assistant Treasurer is authorized to sign on behalf
of the Trust, exclusive of Alps, for the purpose of effecting securities
transactions:
ASSISTANT TREASURER
- ------------------- -------------------------------
The undersigned officers of FINANCIAL INVESTORS TRUST hereby certify that the
foregoing is within the parameters of a Resolution adopted by Trustees of the
Trust in a meeting held____________________, 19______, directing and authorizing
preparation of documents and to do everything necessary to effect the Custody
Agreement between FINANCIAL INVESTORS TRUST and THE FIFTH THIRD BANK.
By:
-------------------------------------------
Its:
------------------------------------------
By:
-------------------------------------------
Its:
------------------------------------------
16
<PAGE>
EXHIBIT C
TO THE CUSTODY AGREEMENT BETWEEN
FINANCIAL INVESTORS TRUST, ALPS MUTUAL FUND SERVICES AND THE FIFTH THIRD BANK
MARCH 2, 1998
MUTUAL FUND CUSTODY FEE SCHEDULE
BASIC ACCOUNT CHARGE
FUND SIZE:
Less than $50MM $
$50MM - $99MM $
$100MM - $199MM $
$200MM - $349MM $
Greater than $350MM $
TRANSACTION FEES
DTC/FED Eligible Trades $
DTC/FED Ineligible Trades $
Amortized Security Trades $
Repurchase Agreements $
(purchase and maturity)
Third Party Repo's $
(purchase and maturity)
Physical Commercial Paper Trades $
(purchase and maturity)
Book-Entry Commercial Paper Trades $
(purchase and maturity)
Options, each transaction $
Amortized Security Receipts $
A transaction is a purchase, sale, maturity, redemption, tender, exchange,
dividend reinvestment, deposit or withdrawal of a security (with the exception
of Fifth Third Certificates of Deposit, Commercial Paper & Repo's).
MISCELLANEOUS FEES
Wire Transfers & Check Disbursements $
Depository/Transfer Agent Reject $
17
<PAGE>
TRANSFER AGENCY AND SERVICE AGREEMENT
between
FINANCIAL INVESTORS TRUST
and
ALPS MUTUAL FUNDS SERVICES, INC.
<PAGE>
TABLE OF CONTENTS
Page
----
Article 1. Terms of Appointment; Duties 2
Article 2. Fees and Expenses 6
Article 3. Representations and Warranties of ALPS 7
Article 4. Representations and Warranties of the Trust 8
Article 5. Data Access and Proprietary Information 8
Article 6. Indemnification 11
Article 7. Standard of Care 14
Article 8. Covenants of the Trust and ALPS 14
Article 9. Termination of Agreement 16
Article 10. Assignment 16
Article 11. Amendment 17
Article 12. Colorado Law to Apply 17
Article 13. Merger of Agreement 17
Article 14. Counterparts 17
Article 15. Limitation of Liability of the Trustees
and Shareholders 18
2
<PAGE>
TRANSFER AGENCY AND SERVICE AGREEMENT
AGREEMENT made as of the 15th day of March, 1994, by and between FINANCIAL
INVESTORS TRUST, a Delaware business trust, having its principal office and
place of business at 370 Seventeenth Street, Suite 3100, Denver, Colorado 80202
(the "Trust"), and ALPS MUTUAL FUNDS SERVICES, INC., a Colorado Corporation
having its principal office and place of business at the above address ("ALPS"
or the "Administrator");
WHEREAS, THE TRUST AND ALPS HAVE ENTERED INTO AN ADMINISTRATION AGREEMENT
DATED AS OF FEBRUARY 1, 1994 (THE "ADMINISTRATION AGREEMENT") PURSUANT TO WHICH
ALPS IS TO PROVIDE VARIOUS SERVICES,
WHEREAS, the Trust IN ACCORDANCE WITH THE ADMINISTRATION Agreement desires
to appoint ALPS as its transfer agent, dividend disbursing agent and agent in
connection with certain other activities, and ALPS desires to accept such
appointment;
WHEREAS, the Trust is authorized to issue shares in separate series, with
each such series representing interests in a separate portfolio of securities
and other assets; and
WHEREAS, the Trust presently offers shares in separate series, as described
in Appendix A to this Agreement;
NOW, THEREFORE, in consideration of the mutual covenants herein contained,
the parties hereto agree as follows:
Article 1. TERMS OF APPOINTMENT; DUTIES OF ALPS
1.01 Subject to the terms and conditions set forth in this Agreement,
the Trust hereby employs and appoints ALPS to act as, and ALPS agrees to act as
its transfer agent for the Trust's authorized and issued shares of beneficial
interest in the Trust or any other fund of the Trust ("Shares"), dividend
disbursing agent and agent in connection with any accumulation, open-account or
similar plans provided to the shareholders of the Trust ("Shareholders") and set
out in the currently effective
3
<PAGE>
prospectus and statement of additional information ("prospectus") of the Trust,
including without limitation any periodic investment plan or periodic withdrawal
program.
1.02 ALPS agrees that it will perform the following services in
accordance with the Trust's prospectus:
(a) In accordance with procedures established from time to time
by agreement between the Trust and ALPS, ALPS shall:
(i) Receive for acceptance, orders for the purchase of
Shares, promptly deliver payment and appropriate
documentation thereof to the Custodians of the Trust
authorized pursuant to the Declaration of Trust of
the Trust (who is referred to herein as the
"Custodian"), and make proper remittance of any
sales load received by it to the persons entitled to
the same as instructed by the Trust's Administrator;
(ii) Pursuant to purchase orders, issue the appropriate
number of Shares and hold Shares in the appropriate
Shareholder account;
(iii) In the event any check or other order for the
transfer of money is returned unpaid, take such
steps as it may deem appropriate or the Trust may
instruct to protect the Trust and ALPS from
financial loss;
(iv) Receive for acceptance redemption requests and
redemption directions and deliver the appropriate
documentation thereof to the appropriate Custodian;
(v) In respect to the transactions in items (i), (ii)
and (iv) above, ALPS shall execute transactions
directly with broker-dealers authorized by the Trust
who shall thereby be deemed to be acting on behalf
of the Trust; At the appropriate time as
4
<PAGE>
and when it receives monies paid to it by the
Custodian with respect to any redemption, pay over
or cause to be paid over in the appropriate. manner
such monies as instructed by the redeeming
Shareholders;
(vii) Effect transfers of Shares by the registered owners
thereof upon receipt of appropriate instructions;
(viii) Prepare and transmit payments (or where appropriate
credit a Shareholder account) for dividends and
distributions declared by a Fund;
(ix) Issue replacement certificates for those
certificates alleged to have been lost, stolen or
destroyed upon receipt by ALPS of indemnification
satisfactory to ALPS and protecting ALPS and the
Trust, and ALPS at its option, may issue replacement
certificates in place of mutilated stock
certificates upon presentation thereof and without
such indemnity;
(x) Maintain records of account for and advise the Trust
and its Shareholders as to the foregoing; and Record
the issuance of Shares of the Trust and maintain
pursuant to SEC Rule 17Ad-lO(e) a record of the
total number of Shares of the Trust which are
authorized, based upon data provided to it by the
Trust, and issued and outstanding. ALPS shall also
provide the Trust on a regular basis with the total
number of Shares which are authorized and issued and
outstanding and shall have no obligation, when
recording the issuance of Shares, to monitor the
issuance of such Shares or to take cognizance of any
laws relating to the issue or sale of such Shares,
which functions shall be the sole responsibility of
the Trust.
5
<PAGE>
(b) In addition to and neither in lieu nor in contravention of
the services set forth in the above paragraph (a), ALPS shall:
(i) perform the customary services of a transfer agent,
dividend disbursing agent and, as relevant, agent in
connection with accumulation, open-account or
similar plans (including without limitation any
periodic investment plan or periodic withdrawal
program), including but not limited to: maintaining
all Shareholder accounts, preparing shareholder
meeting lists, mailing proxies, mailing Shareholder
reports and prospectuses to current Shareholders,
withholding taxes on U.S. resident and non-resident
alien accounts and maintaining records with respect
to such withholding, preparing and filing U.S.
Treasury Department Forms 1099 and other appropriate
forms required with respect to dividends and
distributions by federal authorities for all
Shareholders, preparing and mailing confirmation
forms and statements of account to Shareholders for
all purchases and redemptions of Shares and other
confirmable transactions in Shareholder accounts,
responding to Shareholder telephone calls and
Shareholder correspondence, preparing and mailing
activity statements for Shareholders, and providing
Shareholder account information and (ii) provide a
system which will enable the Trust to monitor the
total number of Shares sold in each State.
(c) In addition, the Trust's outside legal counsel shall (i)
identify to ALPS in writing those transactions and assets to be treated as
exempt from blue sky reporting for each State and (ii) verify the establishment
of transactions for each State on the system prior to activation and thereafter
monitor the daily activity for each State. The responsibility of ALPS for a
Fund's blue sky State registration status is solely limited to the initial
establishment of transactions subject to blue sky compliance by such Fund and
the reporting of such transactions to the Fund as provided above.
6
<PAGE>
(d) Procedures as to who shall provide certain of these services
in Article 1 may be established from time to time by agreement between the Trust
and ALPS per the attached service responsibility schedule. ALPS may at times
perform only a portion of these services and the Trust or its agent may perform
these services on the Trust's behalf.
(e) ALPS shall provide additional services on behalf of the
Trust (i.e., escheatment services) which may be agreed upon in writing between
the Trust and ALPS.
Article 2. FEES AND EXPENSES
2.01 For the performance by ALPS pursuant to this Agreement, the Trust
agrees to pay ALPS the fees IN ACCORDANCE WITH THE TERMS OF THE ADMINISTRATION
AGREEMENT.
2.02 In addition to the fee paid under Section 2.01 above, the Trust
agree(s) to reimburse ALPS for tabulating proxies. In addition, any other
expenses incurred by ALPS at the request or with the consent of the Trust, will
be reimbursed by the Fund.
2.03 The Trust agree(s) to pay all fees and reimbursable expenses
within thirty days following the receipt of the respective billing notice.
Postage for mailing of proxies to all Shareholder accounts shall be advanced to
ALPS by the Trust at least seven (7) days prior to the mailing date of such
materials.
Article 3. REPRESENTATIONS AND WARRANTIES OF ALPS
ALPS represents and warrants to the Trust that:
3.01 It is a company duly organized and existing and in good standing
under the laws of the State of Colorado.
3.02 It is duly qualified to carry on its business in the State of
Colorado.
7
<PAGE>
3.03 It is empowered under applicable laws and by its Charter and
By-Laws to enter into and perform this Agreement.
3.04 All requisite corporate proceedings have been taken to authorize
it to enter into and perform this Agreement.
3.05 It has and will continue to have access to the necessary
facilities, equipment and personnel to perform its duties and obligations under
this Agreement.
Article 4. REPRESENTATIONS AND WARRANTIES OF THE TRUST
The Trust represents and warrants to ALPS that:
4.01 It is a business trust duly organized and existing and in good
standing under the laws of Massachusetts.
4.02 It is empowered under applicable laws and by its Declaration of
Trust and Code of Regulations to enter into and perform this Agreement.
4.03 All trust proceedings required by said Declaration of Trust and
Code of Regulations have been taken to authorize it to enter into and perform
this Agreement.
4.04 It is an open-end and diversified management investment company
registered under the Investment Company Act of 1940, as amended.
4.05 A registration statement under the Securities Act of 1933, as
amended is currently effective and will remain effective, and appropriate state
securities law filings have been made and will continue to be made, with respect
to all Shares of the Trust being offered for sale.
Article 5. DATA ACCESS AND PROPRIETARY INFORMATION
5.01 The Trust acknowledges that the data bases, computer programs,
screen formats, report formats, interactive design techniques, and documentation
manuals furnished to the Trust by ALPS as part of the Trust's ability to access
certain related data ("Customer Data") maintained
8
<PAGE>
by ALPS on data bases under the control and ownership of ALPS ("Data Access
Services") constitute copyrighted, trade secret, or other proprietary
information (collectively, "Proprietary Information") of substantial value to
ALPS. It is understood that Customer Data, which includes data provided to ALPS
by or on behalf of the Trust and records belonging to the Trust pursuant to
Section 31 of the Investment Company Act of 1940 as amended (and the Rules
thereunder), will not be deemed to be Data Access Services or Proprietary
Information. The Trust agrees to treat all Proprietary Information as
proprietary to ALPS and further agrees that it shall not divulge any Proprietary
Information to any person or organization except as may be provided hereunder.
Without limiting the foregoing, the Trust agrees for itself and its employees
and agents:
(a) to access Customer Data solely from locations as may be
designated in writing by and solely in accordance with ALPS'
applicable user documentation;
(b) to refrain from copying or duplicating in any way the Proprietary
Information;
(c) to refrain from obtaining unauthorized access to any portion of
the Proprietary Information, and if such access is inadvertently
obtained, to inform in a timely manner of such fact and dispose
of such information in accordance with ALPS' instructions;
(d) to refrain from causing or allowing third-party data acquired
hereunder from being retransmitted to any other computer facility
or other location, except with the prior written consent of ALPS;
(e) that the Trust shall have access only to those authorized
transactions agreed upon by the parties;
(f) to honor all reasonable written requests made by ALPS to protect
at ALPS' expense the rights of ALPS in Proprietary Information at
common law, under federal copyright law and under other federal
or state law.
9
<PAGE>
Each party shall take reasonable efforts to advise its employees or
independent service contractors of the obligations pursuant to this Article 5.
The obligations of this Article shall survive any earlier termination of this
Agreement.
5.02 If the Trust notifies ALPS that any of the Data Access Services
do not operate in material compliance with the most recently issued user
documentation for such services, ALPS shall endeavor in a timely manner to
correct such failure. Organizations from which ALPS may obtain certain data
included in the Data Access Services are solely responsible for the contents of
such data and the Trust agrees to make no claim against ALPS arising out of the
contents of such third-party data, including, but not limited to, the accuracy
thereof, provided that ALPS will comply with all reasonable requests for
assistance from the Trust in resolving any claim or other discrepancy the Trust
may have with such third party organizations. DATA ACCESS SERVICES AND ALL
COMPUTER PROGRAMS AND SOFTWARE SPECIFICATIONS USED IN CONNECTION THEREWITH ARE
PROVIDED ON AN AS IS, AS AVAILABLE BASIS (PROVIDED THAT ALPS SHALL CONTINUE TO
BE RESPONSIBLE FOR ANY DELAY IN OR OTHER FAILURE OF PERFORMANCE THAT ARISES AS A
RESULT OF A MATTER REASONABLY WITHIN ALPS' CONTROL). ALPS EXPRESSLY DISCLAIMS
ALL WARRANTIES EXCEPT THOSE EXPRESSLY STATED HEREIN INCLUDING, BUT NOT LIMITED
TO, THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR
PURPOSE.
5.03 If the transactions available to the Trust include the ability to
originate a customer originated electronic financial instruction to ALPS in
order to (i) effect the transfer or movement of cash or Shares or (ii) transmit
Shareholder information or other information (such transactions constituting a
"COEFI"), then in such event ALPS shall be entitled to rely on the validity and
authenticity of such instruction without undertaking any further inquiry as long
as such instruction is undertaken in conformity with reasonable security
procedures established by ALPS from time to time.
Article 6. INDEMNIFICATION
6.01 ALPS shall not be responsible for, and the Trust shall indemnify
and hold ALPS harmless from and against, any and all losses, damages, costs,
charges, counsel fees, payments, expenses and liability arising out of or
attributable to:
10
<PAGE>
(a) All actions taken or omitted to be taken by ALPS or its agent
or subcontractors required to be taken pursuant to this Agreement, provided that
such actions are taken in good faith and without negligence or willful
misconduct.
(b) The Funds lack of good faith, negligence or willful
misconduct which arise out of the breach of any representation or warranty of
the Fund hereunder.
(c) The good faith reliance on or use by ALPS or its agents or
subcontractors of written information, records and documents or services which
(i) are received or relied upon by ALPS or its agents or subcontractors and
furnished to it or performed by or on behalf of the Fund, and (ii) have been
prepared, maintained and/or performed by the Fund or any other authorized person
or firm on behalf of the Fund.
(d) The reliance on, or the carrying out by ALPS or its agents or
subcontractors of any instructions or requests of the Fund.
(e) The offer or sale of Shares in violation of any requirement
under the federal securities laws or regulations or the securities laws or
regulations of any state that such Shares be registered in such state or in
violation of any stop order or other determination or ruling by any federal
agency or any state with respect to the offer or sale of such Shares in such
state.
6.02 At any time ALPS may apply to any officer of the Trust for
instructions, and may consult with legal counsel with respect to any matter
arising in connection with the services to be performed by ALPS under this
Agreement, and ALPS and its agents or subcontractors shall not be liable and
shall be indemnified by the Trust for any action taken or omitted by it in
reliance upon such instructions or upon the opinion of such counsel (provided
such counsel is reasonably satisfactory to the Trust). ALPS, its agents and
subcontractors shall be protected and indemnified in acting upon any paper or
document furnished by or on behalf of the Trust, reasonably believed to be
genuine and to have been signed by the proper person or persons, or upon any
instruction, information, data, records or documents provided ALPS or its agents
or subcontractors by machine readable input, telex, CRT data entry or other
similar means authorized by the Trust, and
11
<PAGE>
shall not be held to have notice of any change of authority of any person, until
receipt of written notice thereof from the Fund. ALPS, its agents and
subcontractors shall also be protected and indemnified in recognizing stock
certificates which are reasonably believed to bear the proper manual or
facsimile signatures of the officer(s) of the Trust, and the proper
countersignature of any former transfer agent or former registrar, or of a
co-transfer agent or co-registrar.
6.03 In the event either party is unable to perform its obligations
under the terms of this Agreement because of acts of God, strikes, equipment or
transmission failure or damage reasonably beyond its control, or other causes
reasonably beyond its control, such party shall not be liable for damages to the
other for any damages resulting from such failure to perform or otherwise from
such causes.
6.04 In order that the indemnification provisions contained in this
Article 6 shall apply, upon the assertion of a claim for which the Trust may be
required to indemnify ALPS, ALPS shall promptly notify the Trust of such
assertion, and shall keep the Trust advised with respect to all developments
concerning such claim. The Trust shall have the option to participate with ALPS
in the defense of such claim or to defend against said claim in its own name or
in the name of ALPS. ALPS shall in no case confess any claim or make any
compromise in any case in which the Trust may be required to indemnify ALPS
except with the Trust's prior written consent.
Article 7. STANDARD OF CARE
7.01 ALPS shall at all times act in good faith and agrees to use its
best efforts within reasonable limits to insure the accuracy of all services
performed under this Agreement, but assumes no responsibility and shall not be
liable for loss of damage due to errors unless said errors are caused by its
negligence, bad faith, or willful misconduct or that of its employees.
Article 8. COVENANTS OF THE TRUST AND ALPS
8.01 The Trust shall promptly furnish to ALPS the following:
12
<PAGE>
(a) A certified copy of the resolution of the Board of Trustees
of the Trust authorizing the appointment of ALPS and the execution and delivery
of this Agreement.
(b) A copy of the Declaration of Trust and Code of Regulations of
the Trust and all amendments thereto.
(c) Copies of each vote of the Board of Trustees of the Trust
designating authorized persons to give instructions to ALPS.
8.02 ALPS hereby agrees to establish and maintain facilities and
procedures reasonably acceptable to the Trust for safekeeping of stock
certificates, check forms and facsimile signature imprinting devices, if any;
and for the preparation or use, and for keeping account of, such certificates,
forms and devices.
8.03 ALPS shall keep records relating to the services to be performed
hereunder, in the form and manner, as it may deem advisable, as required by
applicable laws, rules and regulations. To the extent required by Section 31 of
the Investment Company Act of 1940, as amended, and the Rules thereunder, ALPS
agrees that all such records prepared or maintained by ALPS relating to the
services to be performed by ALPS hereunder are the property of the Trust and
will be preserved, maintained and made available in accordance with such Section
and Rules, and will be surrendered promptly to the Trust on and in accordance
with its request. Additionally, ALPS will make reasonably available to the Trust
and its authorized representatives records maintained by ALPS pursuant to this
Agreement for reasonable inspection, use and audit, and will take all reasonable
action to assist the Trust's independent accountants in rendering their opinion.
8.04 ALPS and the Trust agree that all books, records, information and
data pertaining to the business of the other party which are exchanged or
received pursuant to the negotiation or the carrying out of this Agreement shall
remain confidential and shall not be voluntarily disclosed to any other person,
except as may be required by law.
8.05 In case of any requests or demands for the inspection of the
Shareholder records of the Trust, ALPS will endeavor to notify the Trust and to
secure instructions from an authorized officer of the Trust as to such
inspection. ALPS reserves the right, however, to exhibit the
13
<PAGE>
Shareholder records to any person whenever it is advised by its counsel that it
may be held liable for the failure to exhibit the Shareholder records to such
person.
Article 9. TERMINATION OF AGREEMENT
9.01 This Agreement may be terminated by either party upon NINETY-(90)
days written notice to the other. NOT WITHSTANDING ANYTHING TO THE CONTRARY IN
THIN AGREEMENT, ALPS MAY NOT TERMINATE THIS AGREEMENT PRIOR TO THE LATER OF: (i)
the EXPIRATION OF THE INITIAL OR ANY RENEWAL TERM OF THE ADMINISTRATION
AGREEMENT; OR (ii) THE EFFECTIVENESS OF ANY TERMINATION NOTICE PURSUANT TO THE
ADMINISTRATION AGREEMENT. THIS AGREEMENT may be terminated immediately by the
Trust should ALPS cease to be qualified to act as the Trust's transfer agent
pursuant to applicable law.
9.02 Should the Trust exercise its right to terminate, other than as a
result of a default under this Agreement by ALPS, all out-of-pocket expenses
associated with the movement of records and material will be borne by the Trust.
Additionally, ALPS reserves the right to charge for any other reasonable
expenses associated with such termination.
Article 10. ASSIGNMENT
10.01 Except as provided in Section 10.03 below, neither this
Agreement nor any rights or obligations hereunder may be assigned by either
party without the written consent of the other party.
10.02 This Agreement shall inure to the benefit of and be binding upon
the parties and their respective permitted successors and assigns.
10.03 ALPS may, without further consent on the part of the Trust,
subcontract for the performance hereof with (i) State Street Bank Trust, a duly
registered transfer agent pursuant to Section 17A(c)(l) of the Securities
Exchange Act of 1934, as amended ("Section 17A(c)(l)"); provided, however, that
ALPS shall be as fully responsible to the Trust for the acts and omissions of
any subcontractor as it is for its own acts and omissions.
14
<PAGE>
Article 11. AMENDMENT
11.01 This Agreement may be amended or modified by a written agreement
executed by both parties and authorized or approved by a resolution of the Board
of Trustees of the Trust.
Article 12. COLORADO LAW TO APPLY
12.01 This Agreement shall be construed and the provisions thereof
interpreted under and in accordance with the laws of the State of Colorado.
Article 13. MERGER OF AGREEMENT
13.01 This Agreement constitutes the entire agreement between the
parties hereto and supersedes any prior agreement with respect to the subject
matter hereof whether oral or written.
Article 14. COUNTERPARTS
14.01 This Agreement may be executed by the parties hereto on any
number of counterparts, and all of said counterparts taken together shall be
deemed to constitute one and the same instrument.
Article 15. LIMITATION OF LIABILITY OF THE TRUSTEES AND SHAREHOLDERS
15.01 The names "FGIC Public Trust" and "Trustees of FGIC Public
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 Feb. 23, 1994, which may be further amended from time to time which
i hereby referred to and a copy of which is on file at the office of the
Secretary of the State of Delaware and the principal office of the Trust. The
obligations of "FGIC Public Trust" entered into in the name or on behalf thereof
by any of the 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.
15
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed in their names and on their behalf by and through their duly
authorized officers, as of the day and year first above written.
FINANCIAL INVESTORS TRUST
BY: /s/ William Paston
------------------------------
Vice President
ATTEST:
- -----------------------------------
ALPS MUTUAL FUNDS SERVICES, INC.
BY: /s/ Thomas A. Carter
------------------------------
Chief Financial Officer
ATTEST:
- -----------------------------------
16
<PAGE>
ALPS MUTUAL FUNDS SERVICES, INC.
FUND SERVICE RESPONSIBILITIES
<TABLE>
<CAPTION>
Service Performed Responsibility
- ----------------- --------------
ALPS Trust
---- -----
<S> <C> <C>
1. Receives orders for the purchase of Shares. X
2. Issue Shares and hold Shares in Shareholder's accounts. X
3. Receive redemption requests. X
4. Effect transactions 1-3 above directly with broker-dealers. X
5. Pay over monies to redeeming Shareholders. X
6. Effect transfers of Shares. X
7. Prepare and transmit dividends and distributions. X
8. Issue replacement Certificates. X
9. Reporting of abandoned property. X
10. Maintain records of account. X
11. Maintain and keep a current and accurate control
book for each issue of securities. X
12. Mail proxies. X
13. Mail Shareholder reports. X
14. Mail prospectuses to current Shareholders. X
15. Withhold taxes on U.S. resident and non-resident
alien accounts. X
17
<PAGE>
16. Prepare and file U.S. Treasury Department forms. X
17. Prepare and mail account and confirmation
statements for Shareholders. X
18. Provide Shareholder account information. X
19. Blue sky reporting. X
</TABLE>
- - Such services are more fully described in Article 1.02 (a), (b) and (c) of
the Agreement.
FINANCIAL INVESTORS TRUST
By: /s/ William Paston
----------------------------
Vice President
ATTEST:
- --------------------------------
ALPS MUTUAL FUNDS SERVICES, INC.
By: /s/ Thomas A. Carter
----------------------------
Chief Financial Officer
ATTEST:
- --------------------------------
18
<PAGE>
APPENDIX A
Series Offered Under Financial Investors Trust:
U.S. Treasury Money Market Fund
U.S. Government Money Market Fund
Prime Money Market Fund
Aristata Equity Fund
Aristata Quality Bond Fund
Aristata Colorado Quality Tax Exempt Bond Fund
Dated April 21, 1998
Financial Investors Trust
By: /s/ William Paston
---------------------------
Title: Vice President
ALPS Mutual Funds Services, Inc.
By: /s/ Thomas Carter
---------------------------
Title: Chief Financial Officer
19
<PAGE>
BOOKKEEPING AND PRICING AGREEMENT
Between
FINANCIAL INVESTORS TRUST
and
ALPS MUTUAL FUNDS SERVICES, INC.
<PAGE>
BOOKKEEPING AND PRICING AGREEMENT
AGREEMENT made this 15th day of March, 1994 between FINANCIAL
INVESTORS Trust, a business trust established under the laws of the State of
Delaware (the "Trust") and ALPS MUTUAL FUNDS SERVICES, INC., a Colorado
corporation having its principal office at 370 Seventeenth Street, Suite 3100,
Denver, Colorado 80202 (the "Agent").
WHEREAS, the Trust is an open-end management investment company
registered under the Investment Company Act of 1940 which presently offers
shares in separate series, as described in Appendix A to this Agreement, herein
referred to individually as a "Portfolio" and collectively as the "Portfolios;"
and
WHEREAS, THE TRUST AND THE AGENT HAVE ENTERED INTO AN ADMINISTRATION
AGREEMENT, DATED AS OF FEBRUARY 1, 1994 (THE "ADMINISTRATION AGREEMENT"),
PURSUANT TO WHICH THE AGENT WILL PROVIDE CERTAIN SERVICES; AND
WHEREAS, the Trust desires to appoint the Agent as agent to perform
certain bookkeeping and pricing services for the Portfolios on behalf of the
Trust, and the Agent has indicated its willingness to so act, subject to the
terms and conditions of this Agreement.
NOW, THEREFORE, in consideration of the premises and mutual covenants
hereinafter contained, the parties hereto agree as follows:
1. AGENT APPOINTED BOOKKEEPING AND PRICING AGENT. The Trust hereby
appoints the Agent as bookkeeping and pricing agent for the Portfolios and the
Agent agrees to provide the services
2
<PAGE>
contemplated herein upon the terms and conditions hereinafter set forth.
2. DEFINITIONS. In this Agreement the terms below have the following
meanings:
(a) AUTHORIZED PERSON. Authorized Person means any of the persons
duly authorized to give Proper Instructions or otherwise act on behalf of
the Trust by appropriate resolution of the Board of Trustees of the Trust
The Trust will at all times maintain on file with the Agent certification,
in such form as may be acceptable to the Agent, of (i) the names and
signatures of the Authorized Person(s) and (ii) the names of the members of
the Board of Trustees of the Trust, it being understood that upon the
occurrence of any change in the information set forth in the most recent
certification on file (including without limitation any person named in the
most recent certification who is no longer an Authorized Person as
designated therein), the Trust will provide a new or amended certification
setting forth the change. The Agent will be entitled to rely upon any
Proper Instruction (defined below) which has been signed by person(s) named
in the most recent certification.
(b) PROPER INSTRUCTIONS. Proper Instructions means any request,
instruction or certification signed by one or more Authorized Persons. Oral
instructions will be considered Proper Instructions if the Agent reasonably
believes them to have been given by an Authorized Person and they are
confirmed in writing. Proper Instructions may include communication
effected directly between electromechanical or electronic devices as agreed
upon by the parties hereto.
3
<PAGE>
3. DUTIES OF THE AGENT. The Agent agrees to provide or to arrange to
provide at its expense the following services for the Trust:
(a) Maintain separate accounts for the Portfolios, all as directed
from time to time by Proper Instructions;
(b) Timely calculate and transmit to NASDAQ each Portfolio's daily
net asset value and public offering price (such determinations to
be made in accordance with the provisions of the Declaration of
Trust and the appropriate prospectus and statement of additional
information relating to the Portfolios, and any applicable
resolutions of the Board of Trustees of the Trust) and promptly
communicate such values and prices to the Portfolio's and the
Portfolio's transfer agent;
(c) Maintain and keep current all books and records of the Fund as
required by Section 31 and the rules thereunder under the 1940
Act ("Section 31") in connection with the Agent's duties
hereunder. The Agent shall comply with all laws, rules and
regulations applicable to the performance of its obligations
hereunder. Without limiting the generality of the foregoing, the
Agent will prepare and maintain the following records upon
receipt of information in proper form from Authorized Persons of
the Trust:
(i) Cash receipts journal
(ii) Cash disbursements journal
(iii) Dividend records
(iv) Purchase and sales - portfolio securities journals
(v) Subscription and redemption journals
(vi) Security ledgers
4
<PAGE>
(vii) Broker ledgers
(viii) General ledger
(ix) Daily expense accruals
(x) Daily income accruals
(xi) Securities and monies borrowed or loaned and
collateral therefore
(xii) Foreign currency journals
(xiii) Trial balances
(d) Provide the Trust and its investment adviser(s) with daily
portfolio values, net asset values and other statistical data for
each Portfolio as requested from time to time.
(e) Compute the net income, exempt interest income and capital gains
of the Portfolio for dividend purposes in accordance with
relevant prospectus policies and resolutions of the Board of
Trustees of the Trust.
(f) Provide the Portfolio and its investment adviser(s) with copies
of the semi-annual and annual financial statements to be
furnished to shareholders of each Portfolio and all raw financial
data necessary for the timely preparation of tax returns, Form
N-SAR, prospectus updates, Rule 24f-2 filings and proxy
statements.
(g) Provide facilities to accommodate annual audits and any audits or
examinations conducted by the Securities and Exchange Commission
or other governmental entities.
(h) Provide audited financial statements regarding the Agent on an
annual basis, as requested. Such audits shall be conducted by an
independent accounting firm mutually agreed upon by the Agent and
the Trust.
5
<PAGE>
(i) Furnish to the Trust at the end of every month, and at the close
of each quarter of the Trust's fiscal year, a list of the
portfolio securities and the aggregate amount of cash in the
Portfolios.
(j) Assist in the preparation of certain reports, audits of accounts,
and other matters of like nature, as reasonably requested from
time to time by the Trust.
The Agent shall for all purposes be deemed to be an independent
contractor and shall, unless otherwise expressly authorized, have no authority
to act for or represent the Fund in any way or otherwise be deemed an agent of
the Trust.
4. SUBCONTRACTORS. It is understood that the Agent may from time to
time at its own expense delegate the performance of all or a portion of its
obligations under this Agreement to one or more persons (hereinafter
"subcontractor(s)") as the Agent may believe to be particularly fit to assist it
in the performance of this Agreement. The Agent shall provide oversight over any
subcontractor(s) who shall in turn provide services pursuant to an agreement
with the Agent approved by a resolution of the Board of Trustees of the Trust.
5. INSTRUCTIONS TO THE AGENT. The Agent shall promptly take all
appropriate steps necessary to carry out or comply with any Proper Instructions
received from the Trust.
6. AGENT COMPENSATION. In consideration for the services to be
performed by the Agent, the Agent shall be entitled to receive from the Fund
such compensation as set forth in the Administration Agreement.
7. LIABILITY OF THE AGENT.
6
<PAGE>
(a) The Agent may rely upon the written advice of counsel for
the Trust and the Trust's independent accountants, and upon oral or written
statements of brokers and other persons reasonably believed by the Agent in good
faith to be expert in the matters upon which they are consulted and, for any
actions reasonably taken in good faith reliance upon such advice or statements
and without negligence, the Agent shall not be liable to anyone.
(b) Nothing herein contained shall be construed to protect the
Agent against any liability to the Trust or its security holders to which the
Agent would otherwise be subject by reason of willful misfeasance, bad faith or
negligence in the performance of its duties.
(c) Except as may otherwise be provided by applicable law,
neither the Agent nor its shareholders, officers, directors, employees or agents
shall be subject to, and the Trust shall indemnify and hold such persons
harmless from and against, any liability for and any damages, expenses or losses
incurred by reason of the inaccuracy of factual information furnished to the
Agent or any subcontractor(s) by an Authorized Person of the Fund.
(d) The Agent shall ensure that it or any subcontractors have
and maintain Errors and omissions Insurance for the services rendered under this
Agreement of at least $1 million (provided the Board of Trustees of the Trust
may by resolution approve some lesser amount). The Agent shall provide to the
Trust annually a certificate from the appropriate errors and omissions insurance
carrier(s) certifying that such Errors and Omissions Insurance is in full force
and effect.
8. REPORTS. Whenever, in the course of performing its duties under
this Agreement, the Agent determines, on the basis of information supplied to
the Agent by the Trust or its authorized agents, that a violation of applicable
law has occurred or that, to its knowledge, a possible violation of applicable
law may have
7
<PAGE>
occurred or, with the passage of time, would occur, the Agent shall promptly
notify the Trust and its counsel.
9. ACTIVITIES OF THE AGENT. The services of the Agent under this
Agreement are not to be deemed exclusive, and the Agent shall be free to render
similar services to others so long as its services hereunder are not impaired
thereby.
10. ACCOUNTS AND RECORDS. The accounts and records maintained by the
Agent shall be the property of the Trust, and shall be surrendered to the Trust
promptly upon receipt of Proper Instructions from the Trust in the form in which
such accounts and records have been maintained or preserved. The Agent agrees to
maintain a back-up set of accounts and records of the Trust (which back-up set
shall be updated on at least a weekly basis) at a location other than that where
the original accounts and records are stored. The Agent shall assist the Trust,
the Trust's independent auditors, or, upon approval of the Trust, any regulatory
body, in any requested review of the Trust by the Agent or its independent
accountants concerning its accounting system and internal auditing controls will
be open to such entities for audit or inspection upon reasonable request. There
shall be no additional fee for these services. The Agent shall preserve the
accounts and records, as they are required to be maintained and preserved by
Section 31 of the Investment Company Act of 1940.
11. CONFIDENTIALITY. The Agent agrees that it will, on behalf of
itself and its officers and employees, treat all transactions contemplated by
this Agreement, and all other information germane thereto, as confidential and
not to be disclosed to any person except as may be authorized by the Trust in
Proper Instructions.
12. DURATION AND TERMINATION OF THIS AGREEMENT. This Agreement shall
become effective as of the date hereof. NOTWITHSTANDING ANYTHING TO THE CONTRARY
IN THIS AGREEMENT, THE
8
<PAGE>
AGENT MAY NOT TERMINATE THIS AGREEMENT PRIOR TO THE LATER OF: (i) THE EXPIRATION
OF THE INITIAL OR ANY RENEWAL TERM OF THE ADMINISTRATION AGREEMENT; OR (ii) THE
EFFECTIVENESS OF ANY TERMINATION NOTICE PURSUANT TO THE ADMINISTRATION
AGREEMENT.
Upon termination of this Agreement, the Agent shall deliver to the
Trust or as otherwise directed in Proper Instructions (at the expense of the
Fund, unless such termination is for breach of this Agreement by the Agent) all
records and other documents made or accumulated in the performance of its duties
or the duties of any subcontractor(s) for the Trust hereunder.
13. ASSIGNMENT. This Agreement shall extend to and shall be binding
upon the parties hereto and their respective successors and assigns; provided,
however, that this Agreement shall not be assignable by the Trust without the
prior written consent of the Agent, or by the Agent without the prior written
consent of the Trust.
14. GOVERNING LAW. The provisions of this Agreement shall be construed
and interpreted in accordance with the laws of the state of Colorado and the
1940 Act and the rules thereunder. To the extent that the laws of Colorado
conflict with the 1940 Act or such rules, the latter shall control.
15. NAMES. The names "Financial Investors Trust" and "Trustees of
Financial Investors Trust" refer respectively to the Trust created and the
Trustees as trustees but not individually or personally, acting from time to
time under the Declaration of Trust dated Feb. 23, 1994 and as may be amended
from time to time which is hereby referred to and a copy of which is on file at
the office of the Secretary of the State of Delaware and the principal office of
the Trust. The obligations of "Financial Investors Trust" entered into in the
name or on behalf thereof by any of the Trustees, representatives or agents are
made not individually, but in such capacities, and are not binding upon any of
the Trustees,
9
<PAGE>
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.
16. AMENDMENTS TO THIS AGREEMENT. This Agreement may only be amended
by the parties in writing.
17. NOTICES. All notices and other communications hereunder shall be
in writing, shall be deemed to have been given when received or when sent by
telex or facsimile, and shall be given to the following addresses (or such other
addresses as to which notice is given):
TO THE AGENT:
ALPS Mutual Funds Services, Inc.
370 Seventeenth Street - Suite 3100
Denver, Colorado 80202
Attn: James V. Hyatt
TO THE FUND:
Financial Investors Trust
370 Seventeenth Street - Suite 3100
Denver, Colorado 80202
18. COUNTERPARTS. This Agreement may be executed by the parties hereto
on any number of counterparts, and all of said counterparts taken together shall
be deemed to constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
FINANCIAL INVESTORS TRUST
10
<PAGE>
BY: /s/ William Paston
------------------------------
Vice President
ATTEST:
- -----------------------------------
ALPS MUTUAL FUNDS SERVICES, INC.
BY: /s/ Thomas A. Carter
------------------------------
Chief Financial Officer
ATTEST:
- -----------------------------------
11
<PAGE>
APPENDIX A
Series Offered Under Financial Investors Trust:
U.S. Treasury Money Market Fund
U.S. Government Money Market Fund
Prime Money Market Fund
Aristata Equity Fund
Aristata Quality Bond Fund
Aristata Colorado Quality Tax Exempt Bond Fund
Dated April 21, 1998
Financial Investors Trust
By: /s/ William Paston
--------------------------------
Title: Vice President
ALPS Mutual Funds Services, Inc.
By: /s/ Thomas Carter
--------------------------------
Title: Chief Financial Officer
12
<PAGE>
DAVIS, GRAHAM & STUBBS LLP
A LIMITED LIABILITY PARTNERSHIP
ATTORNEYS AT LAW
SUITE 4700
370 SEVENTEENTH STREET
DENVER, COLORADO 80202
MAILING ADDRESS
POST OFFICE BOX 185
DENVER, COLORADO 80201-0185
TELEPHONE 303-892-9400 TELEX 413726 DGS DVR UD
FACSIMILE 303-893-1379 CABLE DAVGRAM, DENVER
June 10, 1998
Financial Investors Trust
370 17th Street, Suite 3100
Denver, Colorado 80202
Re: Prime Money Market Fund, a series of Financial Investors Trust
Gentlemen and Ms. Anstine:
We have acted as counsel to Financial Investors Trust, a Delaware business
trust (the "Trust"), and are providing this opinion in connection with the
registration by the Trust of shares of beneficial interest, no par value (the
"Shares"), of the Prime Money Market Fund, a series of the Trust, described in
Post-Effective Amendments Nos. 10 and 12 to the Registration Statement on Form
N-1A of the Trust (1933 Act File No. 33-72424; 1940 Act File No. 811-8194), as
filed with the Securities and Exchange Commission (the "Registration
Statement").
In such connection, we have examined the Trust's Trust Instrument and
Bylaws, the proceedings of its Trustees relating to the authorization, issuance
and proposed sale of the Shares, and considered such other records and documents
and such factual and legal matters as we deemed appropriate for purposes of this
opinion.
Based on the foregoing, it is our opinion that the Shares have been duly
authorized and, when sold as contemplated in the Registration Statement, will be
validly issued, fully paid and non-assessable Shares of the Trust.
We hereby consent to all references to this firm in the Registration
Statement and to the filing of this opinion as an exhibit to the Registration
Statement. This consent does not constitute a consent under Section 7 of the
Securities Act of 1933, and in consenting to the references to our firm in the
Registration Statement, we have not certified any part of the Registration
Statement and
<PAGE>
June 10, 1998
Page 2
do not otherwise come within the categories of persons whose consent is required
under Section 7 or the rules and regulations of the Securities and Exchange
Commission thereunder.
Sincerely,
/s/ Davis, Graham & Stubbs LLP
Davis, Graham & Stubbs LLP
<PAGE>
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Post-Effective Amendment
No. 10 to Registration Statement No. 33-72424 of our report dated May 22, 1997,
appearing in the April 30, 1997 Annual Report of Financial Investors Trust and
to the references to us under the caption "Experts" appearing in the Statement
of Additional Information which is included in such Registration Statement.
Deloitte & Touche LLP
Denver, Colorado
June 10, 1998
