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As filed with the Securities and Exchange Commission on February 14, 2000
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1933 Act Registration No. 33-72424
1940 Act Registration No. 811-8194
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [x]
Pre-Effective Amendment No. ___ [ ]
Post-Effective Amendment No. 15 [x]
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [x]
Amendment No. 17 [x]
(Check appropriate box or boxes.)
FINANCIAL INVESTORS TRUST
-------------------------
(Exact name of Registrant as Specified in Charter)
370 17th Street, Suite 3100
Denver, CO 80202
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(Address of principal executive offices) (Zip Code)
Registrant's Telephone Number, including Area Code: (303) 623-2577
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Russell C. Burk, Secretary
Financial Investors Trust
370 17th Street, Suite 3100
Denver, CO 80202
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(Name and Address of Agent of Service)
Copy to:
Lester Woodward, Esq.
Davis, Graham & Stubbs LLP
370 17th Street, Suite 4700
Denver, CO 80202
Approximate Date of Proposed Public Offering: As soon as practicable after the
effective date of this Amendment
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)
[ ] 60 days after filing pursuant to paragraph (a) (1)
[ ] on ____________, pursuant to paragraph (a) (1)
[ ] 75 days after filing pursuant to paragraph (a) (2)
[ ] on (date) pursuant to paragraph (a) (2)
If appropriate, check the following box:
[ ] This post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
Title of Securities Being Registered: Shares of Beneficial Interest
Registrant registered an indefinite number of shares pursuant to regulation
24f-2 under the Investment Company Act of 1940 on July 21, 1999.
<PAGE> 2
UNITED ASSOCIATION
S&P 500 INDEX FUND
AS WITH OTHER MUTUAL FUNDS, THE SECURITIES AND EXCHANGE COMMISSION HAS NOT
APPROVED OR DISAPPROVED THIS FUND'S SHARES OR DETERMINED WHETHER THE
INFORMATION IN THIS PROSPECTUS IS ACCURATE OR COMPLETE. ANYONE WHO
TELLS YOU OTHERWISE IS COMMITTING A CRIME.
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<TABLE>
<S> <C>
Table of Contents
PAGE
Prospectus Summary.........................................................................2
Principal Strategies and Risks.............................................................3
Performance................................................................................4
Fees and Expenses of the Fund..............................................................4
More Information About Risk................................................................5
Investment Adviser.........................................................................6
How Do I Invest in the Fund?...............................................................7
Distribution Plan.........................................................................13
Financial Highlights......................................................................13
</TABLE>
No person has been authorized to give any information or to make any
representation that is not contained in this Prospectus, or in the Statement of
Additional Information that is 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. Also, this Prospectus
does not constitute an offering by the Trust or its Distributor in any
jurisdiction where such an offering would not be lawful.
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PROSPECTUS SUMMARY
THE UNITED ASSOCIATION S&P 500 INDEX FUND -- In this prospectus, we provide you
with information on: the principal investment strategies of the United
Association S&P 500 Index Fund (the "Fund"); the risks associated with investing
in the Fund; management and services provided to the Fund; how to invest in the
Fund; and other information.
"Standard & Poor's(R)", "S&P(R)", "S&P 500(R)", "Standard & Poor's 500",
and "500" are trademarks of The McGraw-Hill Companies, Inc. and have been
licensed for use by Financial Investors Trust. The Fund is not sponsored,
endorsed, sold or promoted by Standard & Poor's and Standard & Poor's makes no
representation regarding the advisability of investing in the Fund.
The Fund is distributed primarily to the United Association of Journeymen and
Apprentices of the Plumbing and Pipe Fitting Industry of the United States and
Canada (the "UA") either through direct investment by UA members, or through
investment by UA pension funds. Because the Fund is distributed primarily to the
UA, the Trustees will consider the UA's policy and position on certain issues
when establishing procedures for voting proxies of the underlying portfolio
securities. This will be accomplished using a proxy service approved by the UA.
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PRINCIPAL STRATEGIES AND RISKS
PRINCIPAL INVESTMENT STRATEGIES -- The Fund's investment objective is to provide
investment results that, before Fund expenses, approximate the aggregate price
and dividend performance of the securities included in the Standard & Poor's 500
Composite Stock Price Index (the "S&P 500 Index") by investing in securities
comprising the S&P 500 Index. The S&P 500 Index is made up of common stocks of
500 large, publicly traded companies. The Fund buys and holds all stocks
included in the S&P 500 Index in exactly the same proportion as those stocks are
held in the Index. Stocks are eliminated from the Fund when removed from the S&P
500 Index. The Adviser makes no attempt to "manage" the Fund in the traditional
sense (i.e., by using economic, financial or market analyses).
Due to its investment strategy, the Fund may buy and sell securities frequently.
This may result in higher transaction costs and additional capital gains tax
liabilities, which will lower fund performance.
PRINCIPAL RISKS OF INVESTING -- Since it purchases equity securities, the Fund
is subject to the risk that stock prices will fall over short or extended
periods of time. Historically, the equity markets have moved in cycles, and the
value of the Fund's equity securities may fluctuate from day-to-day. Individual
companies may report poor results or be negatively affected by industry and/or
economic trends and developments. The prices of securities issued by such
companies may decline in response. These factors contribute to price volatility,
which is the principal risk of investing in the Fund.
The Fund is also subject to the risk that its market segment, the S&P 500 Index
of common stocks, may underperform other equity market segments or the equity
market as a whole.
The Fund's ability to duplicate the performance of the S&P 500 Index will depend
to some extent on the size and timing of cash flows into and out of the Fund, as
well as on the level of the Fund's expenses. For additional information about
risks, see "More Information About Risk."
No matter how good a job the investment manager does, you could lose money on
your investment in the Fund.
FUND SUMMARY
INVESTMENT GOAL:
To approximate, before fund expenses, the investment results of the S&P 500
Index.
INVESTMENT FOCUS:
Common stocks of larger issuers
SHARE PRICE VOLATILITY:
(RELATIVE TO MUTUAL FUNDS GENERALLY)
High
PRINCIPAL INVESTMENT STRATEGY:
Investing in stocks that comprise the S&P 500 Index
INVESTOR PROFILE
Investors seeking returns similar to the S&P 500 Index, who are willing to
accept the risk of investing in equity securities.
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An investment in the Fund is not a bank deposit and it is not insured or
guaranteed by the Federal Deposit Insurance Corporation (FDIC) or any government
agency.
SHOULD I INVEST IN THE UNITED ASSOCIATION S&P 500 INDEX FUND?
The Fund may be appropriate for you if:
O You are seeking an investment that aims to provide capital appreciation over
the long term.
O You can tolerate price fluctuations and volatility that are inherent in
investing in a broad-based stock mutual fund.
O You wish to add a common stock fund to your existing investment portfolio.
PERFORMANCE
There is no performance information for the Fund because it has not completed a
full calendar year of operations.
FEES AND EXPENSES OF THE FUND
The information in this section describes the fees and expenses that you may pay
if you buy and hold shares of the Fund. The Fund's fees and expenses are based
upon estimates of the operating expenses for the Fund's initial year of
operation.
<TABLE>
<CAPTION>
SHAREHOLDER FEES
(fees paid directly from your investment) Class I Class II
<S> <C> <C>
Maximum Sales Load None None
Maximum Deferred Sales Charge None None
Redemption None None
Exchange None None
Account Maintenance Fee (for accounts under $10,000) None $10/year
</TABLE>
<TABLE>
<CAPTION>
ANNUAL FUND OPERATING EXPENSES
(expenses that are deducted from Fund Assets) Class I Class II
<S> <C> <C>
Management Fees 0.01% 0.01%
Distribution (12b-1) Fees None 0.10%*
Other Expenses 0.13% 0.13%
Total Annual Fund Operating Expenses 0.14% 0.24%
Fee Waiver N (0.07)%*
Net Annual Fund Operating Expenses 0.14% 0.17%
</TABLE>
*ALPS Mutual Funds Services, Inc. ("ALPS") has contractually agreed to waive the
distribution (12b-1) fees that it is entitled to receive from Class II to .035%
for the first year of operation.
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EXAMPLE -- The following example is intended to help you compare the cost of
investing in the Fund with the cost of investing in other mutual funds. The
example assumes that you invest $10,000 in the Fund for the time periods
indicated and that annual operating expenses set forth above are incurred. The
example also assumes a 5% return each year and that the Fund's operating
expenses will remain the same. However, after one year, the example does not
take into consideration ALPS' agreement to waive fees. Although your actual
costs may be higher or lower, based on these assumptions your costs would be:
<TABLE>
<CAPTION>
ONE YEAR THREE YEARS
<S> <C> <C>
CLASS I $14 $45
CLASS II $17 $70
</TABLE>
MORE INFORMATION ABOUT RISK
EQUITY RISK -- Equity securities include public and privately issued equity
securities, common and preferred stocks, warrants, rights to subscribe to common
stock and convertible securities, as well as instruments that attempt to track
the price movement of equity indices. Investments in equity securities and
equity derivatives in general are subject to market risks that may cause their
prices to fluctuate over time. The value of securities convertible into equity
securities, such as warrants or convertible debt, is also affected by prevailing
interest rates, the credit quality of the issuer and any call provision.
Fluctuations in the value of equity securities in which the Fund invests will
cause the Fund's net asset value to fluctuate. An investment in a portfolio of
equity securities may be more suitable for long-term investors who can bear the
risk of these share price fluctuations.
In addition, the Fund may also be subject to other risks, including:
DERIVATIVES RISK -- The Fund uses derivatives to attempt to achieve its
investment objectives, while at the same time maintaining liquidity. To
collateralize (or cover) these derivatives transactions, the Fund holds cash or
U.S. Government securities.
FUTURES RISK -- Futures contracts and options on futures contracts provide for
the future sale by one party and purchase by another party of a specified amount
of a specific security at a specified future time and at a specified price. An
option on a futures contract gives the purchaser the right, in exchange for a
premium, to assume a position in a futures contract at a specified exercise
price during the term of the option. Index futures are futures contracts for
various indices that are traded on registered securities exchanges.
The Fund may use futures contracts and related options for bona fide hedging
purposes to offset changes in the value of securities held or expected to be
acquired. They may
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also be used to gain exposure to a particular market or instrument, to create a
synthetic money market position, and for certain other tax-related purposes. The
Fund will only enter into futures contracts traded on a national futures
exchange or board of trade.
TRACKING ERROR RISK -- Factors such as fund expenses, imperfect correlation
between the Fund's investments and those of its benchmark, rounding of share
prices, changes to the benchmark, regulatory policies, and leverage, may affect
the Fund's ability to achieve perfect correlation. The magnitude of any tracking
error may be affected by a higher portfolio turnover rate. Because an index is
just a composite of the prices of the securities it represents rather than an
actual portfolio of those securities, an index will have no expenses.
OTHER INVESTMENTS
In addition to the investments and strategies described in this prospectus, the
Fund may also invest in other securities, use other strategies and engage in
other investment practices. These investments and strategies, as well as those
described in this prospectus, are described in detail in the Statement of
Additional Information ("SAI"). Of course, the Fund cannot guarantee it will
achieve its investment goal.
The investments and strategies described in this prospectus are those that the
Adviser uses under normal conditions. During unusual economic, market, political
or other conditions, or for temporary defensive or liquidity purposes, the Fund
may invest up to 100% of its assets in short-term high quality debt instruments
that would not ordinarily be consistent with the Fund's principal investment
strategies. The Fund will do so only if the Adviser believes that the risk of
loss outweighs the opportunity for achieving the Fund's investment objective.
INVESTMENT ADVISER
The Investment Adviser makes investment decisions for the Fund and continuously
reviews, supervises and administers the Fund's investment program. The Board of
Trustees of the Trust supervises the Adviser and establishes policies that the
Adviser must follow in its management activities.
National City Investment Management Company ("IMC"), with its principal offices
at 1900 East Ninth Street, Cleveland, Ohio 44114, serves as Adviser to the Fund.
The Fund pays an advisory fee to IMC of .01% of the Fund's average net assets up
to $2.5 billion, and .05% of the Fund's average net assets in excess of $2.5
billion. On June 30, 1999, IMC had approximately $25.4 billion in assets under
management.
IMC utilizes a team approach for management of the Fund. No one person is
primarily responsible for making investment recommendations to the team.
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HOW DO I INVEST IN THE FUND?
INSTITUTIONAL SHARES -- The Fund offers Institutional Shares ("Class I" shares)
that are designed to give organizations, pension funds and other entities
(non-natural persons) or financial institutions acting in a fiduciary or agency
capacity for such entities, a convenient means of accumulating an interest in
the Fund. Class I shares are not designed for individuals and have a minimum
initial investment requirement of $500,000.
RETAIL SHARES -- The Fund also offers retail shares ("Class II" shares). Class
II shares are designed for individuals and other investors who seek mutual fund
investment convenience plus a lower investment minimum. Class II shares have a
$1,000 minimum initial investment requirement and offer additional services for
the individual investor. Class II shares also incur distribution fees and
account maintenance fees (for accounts under $10,000).
<TABLE>
<CAPTION>
MINIMUM INITIAL INVESTMENT CLASS I CLASS II
<S> <C> <C>
New Account $500,000 $1,000
IRA Account n/a $1,000
Systematic Investment Program n/a $100
Systematic Withdrawal Program n/a $10,000
</TABLE>
HOW ARE INVESTMENTS MADE?
As described below, you may purchase shares of the Fund directly from the Fund,
or through an authorized broker or investment adviser. Your orders for the
purchase of shares will be executed at the net asset value per share next
determined after an order has been received in good form. Your payment will be
invested in full and fractional shares of the Fund. Orders transmitted to the
Fund in proper form prior to the close of business (normally 4:00 p.m. Eastern
Time) will be executed that day. You will not receive certificates for shares
that you purchase. ALPS Mutual Funds Services, Inc. ("ALPS") serves as the
Fund's Transfer Agent and maintains records of each shareholder's holdings of
fund shares. Your initial investment in the Fund must be preceded or accompanied
by a completed, signed application. The Fund reserves the right to reject any
purchase.
INVESTING DIRECTLY WITH THE FUND
You can invest in the Fund directly by using any of the methods described below:
BY MAIL. Make your check payable to the UA S&P 500 INDEX FUND and mail it, along
with the Account Application (if your purchase is an initial investment). Third
party and foreign checks will not be accepted. For existing accounts please
include the Fund name and your account number on all checks. The check should be
mailed to:
UA S&P 500 Index Fund
PMB 606
303 16th Street, Suite #016
Denver, CO 80202-5657
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BY WIRE. You may purchase shares by wire transfer from your bank account to your
UA~S&P 500 Index Fund account. There is a $1,000 minimum for purchases by wire.
To place a purchase by wire, please call 1-888-766-8043 to speak with a
representative. To initiate your wire transaction, contact your depository
institution and instruct them to wire Federal Funds (monies transferred from one
bank to another through the Federal Reserve System with same-day availability)
to:
State Street Bank & Trust Co.
ABA# 011000028
UA S&P 500 Index Fund
Credit DDA# 69642965
(Account Registration)
(Account Number)
The Fund may at its discretion discontinue, suspend or change the practice of
accepting orders by any of the methods described above. The Fund reserves the
right to suspend the sale of shares, or to reject any purchase order, including
orders in connection with exchanges, for any reason.
INVESTING THROUGH YOUR BROKER OR INVESTMENT ADVISER
Topurchase shares through authorized brokers and investment advisers, simply
complete an Account Application and contact your broker or investment adviser
with instructions as to the amount you wish to invest. Your broker will then
contact the Fund to place the order on your behalf. Authorized brokers and
investment advisers may impose additional requirements and charges for the
services rendered.
Your orders received by the Fund prior to the close of business (normally 4:00
p.m. Eastern Time) will be executed that day. Brokers who receive your orders
are obligated to transmit them promptly. You will receive written confirmation
of your order within a few days of receipt of instructions from your broker.
HOW DO I REDEEM FUND SHARES?
Shareholders may redeem their shares, in whole or in part, on each day the Fund
is valued (see the section entitled "HOW ARE FUND SHARES VALUED?" later in this
Prospectus). Shares will be redeemed at the net asset value next determined
after a proper redemption request has been received by the Fund in good form.
A redemption is a tax reportable transaction and any gain or loss is a taxable
event. See the section entitled "WHAT IS THE EFFECT OF FEDERAL INCOME TAX ON
THIS INVESTMENT?" later in this Prospectus for more information.
Where the shares to be redeemed have been purchased by check or by ACH through
the Automatic Investment Program, the payment of redemption proceeds may be
delayed until the purchase has cleared. Shareholders may avoid this delay by
investing through wire transfers of Federal Funds. During the period prior to
the time the shares are redeemed, dividends on the shares will continue to
accrue and be payable and the
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shareholder will be entitled to exercise all other beneficial rights of
ownership.
Once the shares are redeemed, the Fund will ordinarily send the proceeds by
check to the shareholder at the address of record on the next business day. The
Fund may, however, take up to seven days to make payment. Also, if the New York
Stock Exchange is closed (or when trading is restricted) for any reason other
than customary weekend or holiday closings, or if an emergency condition, as
determined by the SEC, merits such action, the Fund may suspend redemptions or
postpone payment dates beyond the normal seven day redemption period.
To ensure acceptance of your redemption request, it is important to follow the
procedures described below. Although the Fund has no present intention to do so,
the Fund reserves the right to refuse or to limit the frequency of any
telephone, wire or bank transfer redemptions. It may be difficult to make
contact by telephone during periods of severe market or economic change.
Shareholders should consider alternative methods of communications during such
times.
The Fund may modify or terminate certain redemption services and provisions at
any time. If the Fund terminates any particular service, it will do so only
after giving written notice to shareholders. Redemption by mail will always be
available to shareholders.
You can redeem your shares using any of the methods described below:
REDEEMING YOUR SHARES DIRECTLY FROM THE FUND
BY MAIL. You may redeem your shares by sending a letter directly to the Fund. To
be accepted, a letter requesting redemption must include:
o the Fund name and account registration from which you are redeeming
shares;
o your account number;
o the amount to be redeemed; and
o an authorized signature along with a signature guarantee
(if required).
A signature guarantee is designed to protect you, the Fund, and its agents from
fraud. Your written request requires a signature guarantee if the check is being
mailed to an address that has been changed within the last 30 days, if the check
is not being mailed to the address on your account, or if the check is not being
made out to the account owner. The following institutions should be able to
provide you with a signature guarantee: banks, broker-dealers, credit unions (if
authorized under state law), securities exchanges and associations, clearing
agencies, and savings associations. A signature guarantee may not be provided by
a notary public.
BY TELEPHONE. If you have established the telephone redemption privilege on your
Purchase Application, you may redeem your shares by calling the Fund at
1-888-766-8043. You should be prepared to give the telephone representative the
following information:
o your account number, social security number and account registration;
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o the Fund name from which you are redeeming shares;
o the amount to be redeemed; and
o PIN numbers (Class I only).
The telephone conversation may be recorded to protect you and the Fund. The Fund
employs reasonable procedures to confirm that instructions communicated to its
representatives by telephone are genuine. If the Fund fails to employ such
reasonable procedures, it may be liable for any loss, damage or expense arising
out of any telephone transactions purporting to be on a shareholder's behalf.
However, if the Fund acts on instructions it reasonably believes to be genuine,
you will bear the loss.
You cannot redeem shares held in IRAs via the telephone.
REDEEMING YOUR SHARES USING AN AUTHORIZED BROKER OR INVESTMENT ADVISER
You may redeem your shares by contacting your authorized broker or investment
adviser and instructing them to redeem your shares. They will then contact ALPS
and place a redemption order on your behalf.
METHODS OF REDEMPTION PAYMENTS
BY CHECK. Unless otherwise instructed, a check will be issued to the address of
record on your account. For your protection, telephone redemptions by check will
be suspended for a period of 30 days following an address change given over the
telephone.
BY WIRE. You may instruct the Fund to send your redemption proceeds via Federal
wire ($1,000 minimum per transaction) to your personal bank.
Wire redemptions can be made only if the privilege has been established on your
Account Application and you have attached a copy of a voided check. You may
change the bank account designated to receive an amount redeemed at any time by
sending a letter of instruction with a signature guarantee to the Transfer
Agent. Your bank may charge you a fee for receiving a wire payment on your
behalf.
LARGE REDEMPTIONS
It is important that you call the Fund before you redeem a large dollar amount.
The Fund must consider the interests of all fund shareholders and so reserves
the right to delay delivery of your redemption proceeds--up to seven days--if
the amount will disrupt the Fund's operations or performance. If you redeem more
than $250,000 worth of Fund shares within any 90-day period, the Fund reserves
the right to pay part or all of the redemption proceeds above $250,000 in-kind,
i.e., in securities, rather than in cash. If payment is made in-kind, you may
incur brokerage commissions if you elect to sell the securities for cash.
INVOLUNTARY SALES OF YOUR SHARES
If your Class II account balance drops below $500 because of redemptions, you
may be
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required to sell your shares. But, you will always be given at least 60 days
written notice to give you time to add to your account and avoid the sale of
your shares.
WHAT ADDITIONAL SERVICES ARE OFFERED BY CLASS II?
AUTOMATIC INVESTMENT PROGRAM. The Automatic Investment Program offers a simple
way to establish and maintain a consistent investment program. You may arrange
automatic transfers (minimum $50 per transaction) from your bank account to your
Fund account on a periodic basis by simply completing the Automatic Investment
Plan section of your Account Application. When you participate in this program,
the minimum initial investment in the Fund is $100. You may change the amount of
your automatic investment, skip an investment, or stop the Automatic Investment
Program by calling the Fund at 1-888-766-8043 at least three business days prior
to your next scheduled investment date.
SYSTEMATIC WITHDRAWAL PLAN. If your Fund account balance is $10,000 or more, you
may elect to have periodic redemptions made from your account on a monthly,
quarterly, semi-annual or annual basis by completing the Systematic Withdrawal
Plan section of the Account Application. The minimum periodic withdrawal is $100
and the transaction normally will be executed on the fifth or twentieth day of
the selected month(s). You may request that these payments be sent to a
predesignated bank account or other designated party. Depending on the size of
the payment requested and fluctuation in the net asset value of the shares
redeemed, redemptions for the purpose of making such payments may reduce or even
exhaust your account. If a shareholder participates in the Systematic Withdrawal
Plan, all dividends are automatically reinvested unless the shareholder directs
otherwise.
INDIVIDUAL RETIREMENT ACCOUNTS. The Fund may be used as a funding medium for
traditional and Roth IRAs. In addition, a traditional or Roth IRA may be
established through a custodial account with the Fund. Completion of a special
application is required in order to create such an account, and the minimum
initial investment for an IRA is $1,000. Contributions to IRAs are subject to
the limits and conditions established by the Internal Revenue Service. For more
information, call the Fund at 1-888-766-8043 or your tax adviser. Additional
account level fees are imposed for IRA accounts.
WHAT STATEMENT AND REPORTS DO I RECEIVE FROM THE FUND?
You will receive a quarterly statement and a confirmation after every
transaction that affects your share balance or account registration. A statement
with tax information will be mailed to you by January 31 of each tax year and
also will be filed with the IRS. At least twice a year, you will receive the
Fund's financial statements. Please write to the Fund at PMB 606, 303 16th
Street, Suite 016, Denver, Colorado 80202-5657 or call the Fund at
1-888-766-8043 to request additional copies of these reports.
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How are Fund Shares Valued?
The price at which you buy, sell or exchange fund shares is the share price or
net asset value (NAV). The NAV for each Class of shares in the Fund is
determined by adding the value of each Class' proportional share of the Fund's
investments, cash and other assets, deducting each Class' proportional share of
liabilities, and then dividing that value by the total number of the shares
outstanding in that Class. The Fund's NAV is calculated at the close of the
regular trading session of the New York Stock Exchange (normally 4:00 p.m.
Eastern Time) each day that the Exchange is open.
When the Fund calculates the NAV for the Fund shares, it values the securities
it holds at market value. Sometimes market quotes for some securities are not
available or are not representative of market value. Examples would be when
events occur that materially affect the value of a security at a time when the
security is not trading or when the securities are illiquid. In that case,
securities may be valued in good faith at fair value, using consistently applied
procedures decided on by the Trustees of the Fund.
For more information please refer to the SAI.
WHAT IS THE EFFECT OF FEDERAL INCOME TAX ON THIS INVESTMENT?
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. Any net capital gains realized are normally distributed
in December. Income dividends for the Fund, if any, are declared and paid
quarterly.
FEDERAL TAXES. Distributions of gains from the sale of assets held by the Fund
for more than one year generally are taxable to shareholders at the applicable
capital gains rate, regardless of how long they have owned their fund shares.
Distributions from other sources generally are taxed as ordinary income. A
portion of the Fund's dividends may qualify for the dividends-received deduction
for corporations. Distributions are taxable when they are paid, whether taken in
cash or reinvested in additional shares, except that distributions declared in
October, November or December and paid in January are taxable as if paid on
December 31. The Fund will send each shareholder an IRS Form 1099-DIV by
January 31.
"BUYING A DIVIDEND." When shares are purchased just before a distribution
("buying a dividend"), the share price will reflect the amount of the upcoming
distribution. Consequently, a portion of the share price will be received back
as a taxable distribution.
OTHER TAX INFORMATION. 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 generally
affecting the Fund and its shareholders. In addition to Federal tax,
distributions may be subject to state or local taxes. Shareholders should
consult their tax advisers for details and up-to-date information on the tax
laws in your state to determine whether the Fund is suitable given your
particular tax situation.
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When you sign your Account Application, you will be asked to certify that your
taxpayer identification number is correct and that you are not subject to backup
withholding for failing to report income to the IRS. If you do not comply with
IRS regulations, the IRS can require the Fund to withhold 31% of taxable
distributions from your account.
DISTRIBUTION PLAN
The Trustees have adopted a plan of distribution pursuant to Rule 12b-1 under
the Investment Company Act of 1940, as amended, for Class II shares of the Fund
(the "Distribution Plan"). The Distribution Plan permits the use of portfolio
assets to compensate ALPS for its services and costs in distributing Class II
shares and servicing shareholder accounts.
Under the Distribution Plan, ALPS receives an amount up to .10% of the average
net assets of the Fund that are attributable to Class II shares. During the
first year of operations, ALPS has agreed to waive the fee payable to ALPS under
the Distribution Plan to .035% of the average net assets of the Fund that are
attributable to Class II. All or a portion of the fees paid to ALPS under the
Distribution Plan may, in turn, be paid to certain broker-dealers, investment
advisers, and other third parties as compensation for selling Class II shares
and for providing ongoing sales support services.
Because the fees paid under the Distribution Plan are paid out of portfolio
assets on an on-going basis, over time these fees will increase the cost of your
investment and may cost you more than other types of sales charges.
FINANCIAL HIGHLIGHTS
There are no Financial Highlights for the Fund because it has not completed a
fiscal year of operations.
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ADDITIONAL INFORMATION ABOUT THE FUND
If you would like more information about the Fund, the following additional
information is available free upon request:
STATEMENT OF ADDITIONAL INFORMATION
The SAI contains additional information about all aspects of the Fund. A current
SAI has been filed with the Securities and Exchange Commission (the "SEC") and
is incorporated herein by reference. For a copy of the SAI, write or call the
Fund at the address or phone number listed below.
Information about the Fund (including the SAI) also may be reviewed and copied,
upon payment of a duplicating fee, at the SEC's Public Reference Room in
Washington, D.C. You also can obtain this information, upon payment of a
duplicating fee, by writing to the Public Reference Section of the SEC,
Washington, D.C. 20549-6009.
The SEC also maintains a Web site located at http://www.sec.gov that contains
the SAI, material incorporated herein by reference, and other information
regarding the Fund. For more information about the operation of the Public
Reference Room, please call the SEC at 1-800-SEC-0330.
ADMINISTRATOR & DISTRIBUTOR
ALPS Mutual Funds Services, Inc.
370 Seventeenth Street
Suite 3100
Denver, CO 80202
TO OBTAIN THE SAI FOR THE FUND FREE OF CHARGE, OR TO OBTAIN OTHER
INFORMATION ABOUT THE FUND AND TO MAKE SHAREHOLDER INQUIRIES,
YOU MAY WRITE TO ALPS MUTUAL FUNDS SERVICES AT 370 17TH STREET,
SUITE 3100, DENVER, COLORADO 80202 OR CALL ALPS AT
1-888-766-8043
ALPS LOGO
Sponsor and Distributor
Member NASD Investment Company Act File No. 811-08194
<PAGE> 17
UNITED ASSOCIATION S&P 500 INDEX FUND
370 17th Street, Suite 3100
Denver, Colorado 80202
February 14, 2000
General & Account Information: (888) 766-8043
STATEMENT OF ADDITIONAL INFORMATION
This Statement of Additional Information ("SAI") is not a prospectus and is only
authorized for distribution when preceded or accompanied by the prospectus for
shares of the United Association 500 Index Fund (the "Fund") dated February 14,
2000 (the "prospectus"). This SAI contains additional and more detailed
information than that set forth in the prospectus and should be read in
conjunction with the prospectus. The prospectus may be obtained without charge
by writing or calling the Fund at the address and information number printed
above.
"Standard & Poor's(R)", "S&P(R)", "S&P 500(R)", "Standard & Poor's 500", and
"500" are trademarks of The McGraw-Hill Companies, Inc. and have been licensed
for use by Financial Investors Trust. The Product is not sponsored, endorsed,
sold or promoted by Standard & Poor's and Standard & Poor's makes no
representation regarding the advisability of investing in the Product.
The Product is not sponsored, endorsed, sold or promoted by Standard & Poor's, a
division of The McGraw-Hill Companies, Inc. ("S&P"). S&P makes no representation
or warranty, express or implied, to the owners of the Product or any member of
the public regarding the advisability of investing in securities generally or in
the Product particularly or the ability of the S&P 500 Index to track general
stock market performance. S&P's only relationship to the Licensee is the
licensing of certain trademarks and trade names of S&P and of the S&P 500 Index
which is determined, composed and calculated by S&P without regard to the
Licensee or the Product. S&P has no obligation to take the needs of the Licensee
or the owners of the Product into consideration in determining, composing or
calculating the S&P 500 Index. S&P is not responsible for and has not
participated in the determination of the prices and amount of the Product or the
timing of the issuance or sale of the Product or in the determination or
calculation of the equation by which the Product is to be converted into cash.
S&P has no obligation or liability in connection with the administration,
marketing or trading of the Product.
S&P does not guarantee the accuracy and/or the completeness of the S&P 500 Index
or any data included therein and S&P shall have no liability for any errors,
omissions, or interruptions therein. S&P makes no warranty, express or implied,
as to results to be obtained by licensee, owners of the product, or any other
person or entity from the use of the S&P 500 Index or any data included therein.
S&P makes no express or implied warranties, and expressly disclaims all
warranties of merchantability or fitness for a particular purpose or use with
respect to the S&P 500 Index or any data included therein. Without limiting any
of the foregoing, in no event shall S&P have any liability for any special,
punitive, indirect, or consequential damages (including lost profits), even if
notified of the possibility of such damages.
<PAGE> 18
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
- -----------------------------------------------------------------------------------
<S> <C>
ADDITIONAL INFORMATION ABOUT THE UA S&P 500 INDEX FUND 1
Indexing Approach 2
INVESTMENT POLICIES AND RISKS 2
Repurchase Agreements 2
Reverse Repurchase Agreements 3
Lending of Portfolio Securities 3
Illiquid Securities 4
Futures and Related Options 4
Risk Factors Associated with Futures and Related Options 7
Short-Term Obligations 8
Derivative Investments 8
Securities of Other Investment Companies 11
INVESTMENT RESTRICTIONS 11
MANAGEMENT 13
Trustees and Officers 13
Investment Adviser 17
Distribution of Fund Shares 18
Administrator, Transfer Agent, Bookkeeping and Pricing Agent 18
Fees and Expenses 19
DETERMINATION OF NET ASSET VALUE 19
ADDITIONAL PURCHASE AND REDEMPTION INFORMATION 20
PORTFOLIO TRANSACTIONS 21
TAXATION 22
OTHER INFORMATION 23
Description of the Trust 23
Voting Rights 23
Custodian 24
Performance Information 24
Independent Accountants 25
Registration Statement 25
</TABLE>
<PAGE> 19
ADDITIONAL INFORMATION ABOUT THE UA S&P 500 INDEX FUND
The Standard & Poor's 500 Composite Stock Price Index (the "S&P 500
Index") is composed of approximately 500 common stocks, most of which are listed
on the NYSE. S&P selects the stocks for the S&P 500 Index on a statistical
basis. As of May 31, 1999, the stocks in the S&P 500 Index had an average market
capitalization of 94.1 billion and the total market capitalization of all U.S.
common stocks was 10.7 trillion. "Market capitalization" of a company is the
market price per share of stock multiplied by the number of shares outstanding.
The Fund will normally invest substantially all of its total assets in
the stocks that comprise the S&P 500 Index in approximately the same percentages
as the stocks represented in the index. The Fund may also acquire derivative
instruments designed to replicate the performance of the S&P 500 Index, such as
S&P 500 Index stock index futures contracts or Standard & Poor's Depository
Receipts. The Fund may invest in all the approximately 500 stocks comprising the
S&P 500 Index, or it may use a statistical sampling technique by selecting
approximately 90% of the stocks listed in the index. The Fund will only purchase
a security that is included in the S&P 500 Index at the time of such purchase.
The Fund may, however, temporarily continue to hold a security that has been
deleted from the S&P 500 Index pending the rebalancing of the Fund's portfolio.
The Fund is not required to buy or sell securities solely because the percentage
of its assets invested in index stocks changes when the market value of its
holdings increases or decreases. With respect to the remaining portion of its
net assets, the Fund may hold temporary cash balances which may be invested in
U.S. government obligations and money market instruments. In extraordinary
circumstances, the Fund may exclude a stock listed on the index from its
holdings or include a similar stock in its place if it believes that doing so
will help achieve its investment objective. The Fund also may enter into
repurchase agreements, reverse repurchase agreements, and lend its portfolio
securities.
While there can be no guarantee that the Fund's investment results will
precisely match the results of the S&P 500 Index, the Adviser believes that,
before deduction of operating expenses, there will be a very high correlation
between the returns generated by the Fund and the S&P 500 Index. The Fund will
attempt to achieve a correlation between the performance of its asset portfolio
and that of the S&P 500 Index of at least 95% before deduction of operating
expenses. A correlation of 100% would indicate perfect correlation, which would
be achieved when the Fund's net asset value, including the value of its dividend
and capital gains distributions, increases or decreases in exact proportion to
changes in the index. The Fund's ability to correlate its performance with the
S&P 500 Index, however, may be affected by, among other things, changes in
securities markets, the manner in which S&P calculates its index, and the timing
of purchases and redemptions. The Adviser monitors the correlation of the
performance of the Fund in relation to the index under the supervision of the
Board of Trustees. The Fund intends to actively rebalance its portfolio to
achieve high correlation of performance with the S&P 500 Index. To reduce
transaction costs and minimize shareholders' current capital gains liability,
the Fund's investment portfolio will not be automatically rebalanced to reflect
changes in the S&P 500 Index. In the unlikely event that a high correlation is
not achieved, the Board of Trustees will take appropriate steps based on the
reasons for the lower than expected correlation.
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<PAGE> 20
THE INDEXING APPROACH
The Fund is not managed in a traditional sense, that is, by making
discretionary judgments based on analysis of economic, financial and market
conditions. Under ordinary circumstances, stocks will only be eliminated from or
added to the Fund to reflect additions to or deletions from the S&P 500 Index
(including mergers or changes in the composition of the index), to raise cash to
meet withdrawals, or to invest cash contributions. Accordingly, sales may result
in losses that may not have been realized if the Fund were actively managed and
purchases may be made that would not have been made if the Fund were actively
managed. The Fund will remain substantially fully invested in common stocks and
equity derivative instruments whether stock prices are rising or falling.
The Adviser believes that the indexing approach should involve less
portfolio turnover, notwithstanding periodic additions to and deletions from the
S&P 500 Index, and thus lower brokerage costs, transfer taxes and operating
expenses, than in more traditionally managed funds, although there is no
assurance that this will be the case. The costs and other expenses incurred in
securities transactions, apart from any difference between the investment
results of the Fund and those of the S&P 500 Index, may cause the return of the
Fund to be lower than the return of the index.
The inclusion of a security in the S&P 500 Index in no way implies an
opinion by S&P as to its attractiveness as an investment. S&P is not a sponsor
of, or in any way affiliated with, the Fund.
The common stock of National City Corporation, the parent company of
National City Investment Management Company ("IMC"), the Adviser, is included in
the S&P 500 Index. Like the other stocks in the S&P 500 Index, the Fund will
invest in the common stock of National City Corporation in approximately the
same proportion as the percentage National City Corporation common stock
represents in the S&P 500 Index. As of May 31, 1999, National City Corporation
common stock represented 1.7% of the index.
INVESTMENT POLICIES AND RISKS
The prospectus discusses the investment objective of the Fund
and the policies to be employed to achieve that objective. This section contains
supplemental information concerning certain types of securities and other
instruments in which the Fund may invest, the investment policies and portfolio
strategies that the Fund may utilize, and certain risks attendant to such
investments, policies and strategies.
REPURCHASE AGREEMENTS
Securities held by the Fund may be subject to repurchase agreements.
Under the terms of a repurchase agreement, the Fund purchases securities from
financial institutions such as banks and broker-
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<PAGE> 21
dealers which the Fund's Adviser deems creditworthy under guidelines approved by
the Board of Trustees, subject to the seller's agreement to repurchase such
securities at a mutually agreed-upon date and price. The repurchase price
generally equals the price paid by the Fund plus interest negotiated on the
basis of current short term rates, which may be more or less than the rate on
the underlying portfolio securities.
The seller under a repurchase agreement will be required to maintain
the value of collateral held pursuant to the agreement at not less than the
repurchase price (including accrued interest). If the seller were to default on
its repurchase obligation or become insolvent, the Fund would suffer a loss to
the extent that the proceeds from a sale of the underlying portfolio securities
were less than the repurchase price under the agreement, or to the extent that
the disposition of such securities by the Fund were delayed pending court
action. Although there is no controlling legal precedent confirming that the
Fund would be entitled, as against a claim by such seller or its receiver or
trustee in bankruptcy, to retain the underlying securities, the Board of
Trustees of the Trust believes that, under the regular procedures normally in
effect for custody of the Fund's securities subject to repurchase agreements and
under federal laws, a court of competent jurisdiction would rule in favor of the
Fund if presented with the question. Securities subject to repurchase agreements
will be held by the Fund's custodian or another qualified custodian or in the
Federal Reserve/Treasury book-entry system. Repurchase agreements are considered
to be loans by the Fund under the Investment Company Act of 1940, as amended
(the "1940 Act").
REVERSE REPURCHASE AGREEMENTS
The Fund may enter into reverse repurchase agreements in accordance
with its investment restrictions. Pursuant to such agreements, the Fund would
sell portfolio securities to financial institutions such as banks and
broker-dealers, and agree to repurchase them at a mutually agreed-upon date and
price. The Fund intends to enter into reverse repurchase agreements only to
avoid otherwise selling securities during unfavorable market conditions to meet
redemptions. At the time the Fund enters into a reverse repurchase agreement, it
will place in a segregated custodial account assets such as U.S. Government
securities or other liquid, high grade debt securities consistent with the
Fund's investment restrictions having a value at least equal to the repurchase
price (including accrued interest), and will subsequently monitor the account to
ensure that such equivalent value is maintained. Reverse repurchase agreements
involve the risk that the market value of the securities sold by the Fund may
decline below the price at which it is obligated to repurchase the securities.
Reverse repurchase agreements are considered to be borrowings by the Fund under
the 1940 Act.
LENDING OF PORTFOLIO SECURITIES
The Fund may lend securities to broker-dealers, banks or other
institutional borrowers pursuant to agreements requiring that the loans be
continuously secured by cash, securities of the U.S. government or its agencies,
or any combination of cash and such securities, as collateral equal to 100% of
the market value at all times of the securities lent. Such loans will not be
made if, as a result, the aggregate amount of all outstanding securities loans
for the Fund exceed one-third of the value of its total assets taken at fair
market value. Collateral must be valued daily by the Fund's Adviser and the
borrower will be required to
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<PAGE> 22
provide additional collateral should the market value of the loaned securities
increase. During the time portfolio securities are on loan, the borrower pays
the Fund any dividends or interest paid on such securities. Loans are subject to
termination by the Fund or the borrower at any time. While the Fund does not
have the right to vote securities on loan, it intends to terminate the loan and
regain the right to vote if this is considered important with respect to the
investment. The Fund will only enter into loan arrangements with broker-dealers,
banks or other institutions which its Adviser has determined are creditworthy
under guidelines established by the Trust's Board of Trustees.
The Fund will continue to receive interest on the securities lent
while simultaneously earning interest on the investment of the cash collateral
in U.S. government securities. However, the Fund will normally pay lending fees
to such broker-dealers and related expenses from the interest earned on invested
collateral. There may be risks of delay in receiving additional collateral or
risks of delay in recovery of the securities or even loss of rights in the
collateral should the borrower of the securities fail financially. However,
loans are made only to borrowers deemed by the Adviser to be of good standing
and when, in the judgment of the Adviser, the consideration which can be earned
currently from such securities loans justifies the attendant risk. Either party
upon reasonable notice to the other party may terminate any loan.
ILLIQUID SECURITIES
The Fund will not invest more than 15% of its net assets in securities
that are illiquid. Illiquid securities would generally include repurchase
agreements and GICs with notice/termination dates in excess of seven days and
certain securities which are subject to trading restrictions because they are
not registered under the Securities Act of 1933, as amended (the "1933 Act").
The Fund may purchase securities which are not registered under the
1933 Act but which can be sold to "qualified institutional buyers" in accordance
with Rule 144A under the 1933 Act. Any such security will not be considered
illiquid so long as it is determined by the Board of Trustees or the Fund's
Adviser, acting under guidelines approved and monitored by the Board, that an
adequate trading market exists for that security. This investment practice could
have the effect of increasing the level of illiquidity in the Fund during any
period that qualified institutional buyers become uninterested in purchasing
these restricted securities.
FUTURES AND RELATED OPTIONS
The Fund may invest in stock index futures contracts and options of
futures contracts in attempting to hedge against changes in the value of
securities that it holds or intends to purchase. The Fund may invest in stock
index futures contracts in attempting to hedge against changes in the value of
securities that it holds or intends to purchase or to maintain liquidity. The
Fund might sell a futures contract in order to offset an expected decrease in
the value of its portfolio that might otherwise result from a market decline.
The Fund may invest in the instruments described either to hedge the value of
their respective portfolio securities as a whole, or to protect against declines
occurring prior to sales of securities in the value of the securities to be
sold. Conversely, the Fund may purchase a futures contract in anticipation of
purchases of
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<PAGE> 23
securities. In addition, the Fund may utilize futures contracts in anticipation
of changes in the composition of its holdings for hedging purposes or to
maintain liquidity.
Futures contracts obligate the Fund, at maturity, to take or make
delivery of certain securities or the cash value of an index or the cash value
of a stated amount of a foreign currency. When interest rates are rising,
futures contracts can offset a decline in value of the securities held by the
Fund. When rates are falling or prices of securities are rising, these contracts
can secure higher yields for securities the Fund intends to purchase.
The Fund intends to comply with the regulations of the Commodity
Futures Trading Commission (CFTC) exempting it from registration as a "commodity
pool operator." The Fund's commodities transactions must constitute bona fide
hedging or other permissible transactions pursuant to such regulations. In
addition, the Fund may not engage in such transactions if the sum of the amount
of initial margin deposits and premiums paid for unexpired commodity options,
other than for bona fide hedging transactions, would exceed 5% of the
liquidation value of its assets, after taking into account unrealized profits
and unrealized losses on such contracts it has entered into; provided, however,
that in the case of an option that is in-the-money at the time of purchase, the
in-the-money amount may be excluded in calculating the percentage limitation. In
connection with the Fund's position in a futures contract or option thereon, it
will create a segregated account of liquid assets, such as cash, U.S. government
securities or other liquid high grade debt obligations, or will otherwise cover
its position in accordance with applicable requirements of the SEC.
The Fund may purchase and sell call and put options on futures
contracts traded on an exchange or board of trade. When the Fund purchases an
option on a futures contract, it has the right to assume a position as a
purchaser or seller of a futures contract at a specified exercise price at any
time during the option period. When the Fund sells an option on a futures
contract, it becomes obligated to purchase or sell a futures contract if the
option is exercised. In anticipation of a market advance, the Fund may purchase
call options on futures contracts as a substitute for the purchase of futures
contracts to hedge against a possible increase in the price of securities which
the Fund intends to purchase. Similarly, if the value of the Fund's securities
is expected to decline, it might purchase put options or sell call options on
futures contracts rather than sell futures contracts.
The Fund may write covered call options, buy put options, buy call
options and sell or "write" secured put options on a national securities
exchange and issued by the Options Clearing Corporation for hedging purposes.
Such transactions may be effected on a principal basis with primary reporting
dealers in U.S. government securities in an amount not exceeding 5% of the
Fund's net assets. Such options may relate to particular securities, stock or
bond indices, financial instruments or foreign currencies. Purchasing options is
a specialized investment technique which entails a substantial risk of a
complete loss of the amounts paid as premiums to the writer of the option.
A call option for a particular security gives the purchaser of the
option the right to buy, and a writer the obligation to sell, the underlying
security at the stated exercise price at any time prior to or only at the
expiration of the option, regardless of the market price of the security. The
premium paid to the writer is
5
<PAGE> 24
the consideration for undertaking the obligations under the option contract. A
put option for a particular security gives the purchaser the right to sell the
underlying security at the stated exercise price at any time prior to the
expiration date of the option, regardless of the market price of the security.
In contrast to an option on a particular security, an option on a securities
index provides the holder with the right to make or receive a cash settlement
upon exercise of the option.
The Fund may purchase and sell put options on portfolio securities at
or about the same time that it purchases the underlying security or at a later
time. By buying a put, the Fund limits its risk of loss from a decline in the
market value of the security until the put expires. Any appreciation in the
value of and yield otherwise available from the underlying security, however,
will be partially offset by the amount of the premium paid for the put option
and any related transaction costs. Call options may be purchased by the Fund in
order to acquire the underlying security at a later date at a price that avoids
any additional cost that would result from an increase in the market value of
the security. The Fund may also purchase call options to increase its return to
investors at a time when the call is expected to increase in value due to
anticipated appreciation of the underlying security. Prior to its expiration, a
purchased put or call option may be sold in a closing sale transaction (a sale
by the Fund, prior to the exercise of an option that it has purchased, of an
option of the same series), and profit or loss from the sale will depend on
whether the amount received is more or less than the premium paid for the option
plus the related transaction costs.
In addition, the Fund may write covered call and secured put options.
A covered call option means that the Fund owns or has the right to acquire the
underlying security subject to call at all times during the option period. A
secured put option means that a Fund maintains in a segregated account with its
custodian cash or U.S. government securities in an amount not less than the
exercise price of the option at all times during the option period. Such options
will be listed on a national securities exchange and issued by the Options
Clearing Corporation and may be effected on a principal basis with primary
reporting dealers in the U.S.
The aggregate value of the securities subject to options written by
the Fund will not exceed 25% of the value of its net assets. In order to close
out an option position prior to maturity, the Fund may enter into a "closing
purchase transaction" by purchasing a call or put option (depending upon the
position being closed out) on the same security with the same exercise price and
expiration date as the option which it previously wrote.
Options trading is a highly specialized activity and carries greater
than ordinary investment risk. Purchasing options may result in the complete
loss of the amounts paid as premiums to the writer of the option. In writing a
covered call option, the Fund gives up the opportunity to profit from an
increase in the market price of the underlying security above the exercise price
(except to the extent the premium represents such a profit). Moreover, it will
not be able to sell the underlying security until the covered call option
expires or is exercised or the Fund closes out the option. In writing a secured
put option, the Fund assumes the risk that the market value of the security will
decline below the exercise price of the option. The use of covered call and
secured put options will not be a primary investment technique of the Fund.
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<PAGE> 25
RISK FACTORS ASSOCIATED WITH FUTURES AND RELATED OPTIONS
In futures contracts based on indices, the risk of imperfect
correlation increases as the composition of the Fund varies from the composition
of the Index. In an effort to compensate for the imperfect correlation of
movements in the price of the securities being hedged and movements in the price
of futures contracts, the Fund may buy or sell futures contracts in a greater or
lesser dollar amount than the dollar amount of the securities being hedged if
the historical volatility of the futures contract has been less or greater than
that of the securities. Such "over hedging" or "under hedging" may adversely
affect a Fund's net investment results if market movements are not as
anticipated when the hedge is established.
Successful use of futures by the Fund also is subject to the Adviser's
ability to predict correctly movements in the direction of securities prices,
interest rates and other economic factors. For example, if the Fund has hedged
against the possibility of a decline in the market adversely affecting the value
of securities held in the Fund and prices increase instead, the Fund will lose
part or all of the benefit of the increased value of securities which it has
hedged because it will have offsetting losses in its futures positions. In
addition, in such situations, if the Fund has insufficient cash, it may have to
sell securities to meet daily variation margin requirements. Such sales of
securities may, but will not necessarily, be at increased prices which reflect
the rising market. The Fund may have to sell securities at a time when it may be
disadvantageous to do so.
Many futures exchanges and boards of trade limit the amount of
fluctuation permitted in futures contract prices during a single trading day.
Once the daily limit has been reached in a particular contract, no trades may be
made that day at a price beyond that limit or trading may be suspended for
specified periods during the trading day. Futures contract's prices could move
to the limit for several consecutive trading days with little or no trading,
thereby preventing prompt liquidation of futures positions and potentially
subjecting the Fund to substantial losses. If it is not possible, or the Fund
determines not to close a futures position in anticipation of adverse price
movements, it will be required to make daily cash payments of variation margin.
In such circumstances, an increase in the value of the portion of the Fund being
hedged, if any, may offset partially or completely losses on the futures
contract.
The primary risks associated with the use of futures contracts and
options are:
1. The imperfect correlation between the change in market value of the
securities held by the Fund and the price of the futures contract or option;
2. Possible lack of a liquid secondary market for a futures contract
and the resulting inability to close a futures contract when desired;
3. Losses greater than the amount of the principal invested as initial
margin due to unanticipated market movements which are potentially unlimited;
and
4. The Adviser's ability to predict correctly the direction of
securities prices, interest rates and other economic factors.
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<PAGE> 26
SHORT TERM OBLIGATIONS
The Fund may hold temporary cash balances which may be invested in
various short-term obligations (with maturities of 18 months or less) such as
domestic commercial paper, bankers' acceptances, certificates of deposit and
demand and time deposits of domestic and foreign branches of U.S. banks and
foreign banks, U.S. government securities, repurchase agreements, and reverse
repurchase agreements. The Fund may invest no more than 5% of its net assets in
variable and floating rate obligations. During temporary defensive periods, the
Fund may hold up to 100% of its total assets in these types of obligations.
In the case of repurchase agreements, default or bankruptcy of the
seller may expose the Fund to possible loss because of adverse market action or
delays connected with the disposition of the underlying obligations. Further, it
is uncertain whether the Fund would be entitled, as against a claim by such
seller or its receiver or trustee in bankruptcy, to retain the underlying
securities. Reverse repurchase agreements involve the risk that the market value
of the securities held by the Fund may decline below the price of the securities
it is obligated to repurchase.
Investments include commercial paper and other short-term promissory
notes issued by corporations (including variable and floating rate instruments),
which must be rated at the time of purchase "A-2" or better by S&P, "Prime-2" or
better by Moody's, "F-2" or better by Fitch, "Duff 2" or better by Duff or,
determined by the Adviser to be of comparable quality pursuant to guidelines
approved by the Trust's Board of Trustees. The Fund may also acquire zero coupon
obligations, which have greater price volatility than coupon obligations and
which will not result in the payment of interest until maturity.
Bank obligations include bankers' acceptances and negotiable
certificates of deposit, and non-negotiable demand and time deposits issued for
a definite period of time and earning a specified return by a U.S. bank which is
a member of the Federal Reserve System. Bank obligations also include U.S.
dollar denominated bankers' acceptances and certificates of deposit and time
deposits issued by foreign branches of U.S. banks or foreign banks. Investment
in bank obligations is limited to the obligations of financial institutions
having more than $1 billion in total assets at the time of purchase.
DERIVATIVE INVESTMENTS
The Fund may purchase certain "derivative" instruments. Derivative
instruments are instruments that derive value from the performance of underlying
securities, interest or currency exchange rates, or indices, and include (but
are not limited to) futures contracts, options, forward currency contracts and
structured debt obligations (including collateralized mortgage obligations
("CMOs"), various floating rate instruments and other types of securities).
Like all investments, derivative instruments involve several basic
types of risks which must be managed in order to meet investment objectives. The
specific risks presented by derivatives include, to varying degrees, market risk
in the form of underperformance of the underlying securities, exchange rates or
indices; credit risk that the dealer or other counterparty to the transaction
will fail to pay its
8
<PAGE> 27
obligations; volatility and leveraging risk that, if interest or exchange rates
change adversely, the value of the derivative instrument will decline more than
the securities, rates or indices on which it is based; liquidity risk that the
Fund will be unable to sell a derivative instrument when it wants because of
lack of market depth or market disruption; pricing risk that the value of a
derivative instrument (such as an option) will not correlate exactly to the
value of the underlying securities, rates or indices on which it is based;
extension risk that the expected duration of an instrument may increase or
decrease; and operations risk that loss will occur as a result of inadequate
systems and controls, human error or otherwise. Some derivative instruments are
more complex than others, and for those instruments that have been developed
recently, data are lacking regarding their actual performance over complete
market cycles.
The risk to the Fund due to the use of derivatives in the equity
portion of the Fund's portfolio of investments will be limited to 10% of such
investments at the time of the derivative transaction.
The Adviser has adopted the following internal policies concerning
management of the structural risk inherent in derivative instruments in the
fixed income portion of the Fund's portfolio. The risk to the Fund due to the
use of such derivatives will be limited to the principal invested in such
instruments. When the Fund engages in short sales "against the box," risk of
loss will be limited to the value of the securities "in the box." The Adviser
does NOT presently intend to invest in the following types of derivatives which
are structured instruments, such as range notes, dual index notes, leveraged or
deleveraged bonds, inverse floaters, index amortizing notes and other structured
instruments having similar cash flow characteristics.
The cash equivalent portion of the Fund's portfolio of investments is
managed with an emphasis on safety and high credit quality. This requires that
liquidity risk and market risk or interest rate risk, as well as credit risk, be
held to minimal levels. The Adviser has determined that many types of floating
rate and variable rate instruments, commonly referred to as "derivatives," are
considered to be potentially volatile. These derivative instruments are
structured in a way that may not allow them to reset to par at an interest rate
adjustment date. Accordingly, the Adviser has adopted the following policies
with respect to this portion of the Fund's assets.
The following types of derivative instruments ARE NOT permitted
investments for the cash equivalent portion of the Fund's portfolio of
investments:
- leveraged or deleveraged floaters (whose interest rate reset
provisions are based on a formula that magnifies the effect of changes in
interest rates);
- range floaters (which do not pay interest if market interest rates
move outside of a specified range);
- dual index floaters (whose interest rate reset provisions are tied to
more than one index so that a change in the relationship between these indices
may result in the value of the instrument falling below face value);
9
<PAGE> 28
- inverse floaters (which reset in the opposite direction of their
index); and
- any other structured instruments having cash flow characteristics
that can create potential market volatility similar to the instruments listed
above.
Additionally, the cash equivalent portion of the Fund's portfolio will not be
invested in instruments indexed to longer than one-year rates, or in instruments
whose interest rate reset provisions are tied to an index that materially lags
short-term interest rates, such as "COFI floaters."
At the present time, the only derivative investments that have been
determined to be suitable for the cash equivalent portion of the Fund's
portfolio are:
- securities based on short-term, fixed-rate contracts; and
- floating-rate or variable-rate securities whose interest rates reset
based on changes in standard money market rate indices such as U.S. government
Treasury bills, London Interbank Offered Rate, published commercial paper rates,
or federal funds rates.
The risk to the Fund due to the use of derivatives in the cash
equivalent portion of its assets will be limited to the principal invested in
such instruments.
The Adviser will evaluate the risks presented by the derivative
instruments purchased by the Fund, and will determine, in connection with
day-to-day management of the Fund, how they will be used in furtherance of the
Fund's investment objective.
Other derivative instruments that are suitable for investment include:
asset-backed securities such as those backed by automobile loans or credit card
receivables. All such securities, however, must conform to the structural risk
standards stated above (i.e. not present high structural risk).
The Adviser does NOT presently intend to invest in the following types
of derivatives on behalf of the Fund:
- exchange rate-related securities
- forward currency exchange contracts
- interest rate swaps
- futures contracts and related options
- structured instruments, such as range notes, dual index notes,
leveraged or deleveraged bonds, inverse floaters, index amortizing notes and
other structured instruments having similar cash flow characteristics
10
<PAGE> 29
There are no policy restrictions on specific types of derivative
instruments in which the Fund is permitted to invest. However, structural risk
is controlled by adherence to specific overall Fund parameters. The Fund is
managed in accordance with a policy goal that constrains the potential
variability of overall fund duration and total return in relation to specified
investment performance benchmarks. Fund exposure to derivative instruments
having high structural risk characteristics is targeted at a maximum of 5.0% of
the Fund's net assets with no individual position greater than 1.0% of the Fund.
Variability in total Fund duration caused by these securities is targeted not to
exceed 0.1 years in any one calendar year.
SECURITIES OF OTHER INVESTMENT COMPANIES
Subject to 1940 Act limitations and pursuant to applicable SEC
requirements, the Fund may invest in securities issued by other investment
companies which invest in high quality, short-term debt securities and which
determine their net asset value per share based on the amortized cost or
penny-rounding method. As a shareholder of another investment company, the Fund
would bear, along with other shareholders, its pro rata portion of that
company's expenses, including advisory fees. These expenses would be in addition
to the advisory and other expenses that the Fund bears directly in connection
with its own operations. Investment companies in which the Fund may invest may
also impose a sales or distribution charge in connection with the purchase or
redemption of their shares and other types of commissions or charges. Such
charges will be payable by the Fund and, therefore, will be borne indirectly by
its shareholders.
The Fund may invest in securities issued by other investment companies
as described in the Prospectus. The Fund currently intends to limit its
investments in securities issued by other investment companies so that, as
determined immediately after a purchase of such securities is made: (i) not more
than 5% of the value of the Fund's total assets will be invested in the
securities of any one investment company; (ii) not more than 10% of the value of
its total assets will be invested in the aggregate in securities of investment
companies as a group; and (iii) not more than 3% of the outstanding voting stock
of any one investment company will be owned by the Fund or by the Trust as a
whole.
INVESTMENT RESTRICTIONS
The Fund is subject to a number of investment limitations. The
following investment limitations are matters of fundamental policy and may not
be changed with respect to the Fund without the affirmative vote of the holders
of a majority of the Fund's outstanding shares.
The Fund may not:
1. Purchase any securities which would cause 25% or more of the value
of its total assets at the time of purchase to be invested in the securities of
one or more issuers conducting their principal business activities in the same
industry, provided that:
11
<PAGE> 30
(a) there is no limitation with respect to obligations
issued or guaranteed by the U.S. government, any territory or
possession of the United States, the District of Columbia or any of
their authorities, agencies, instrumentalities or political
subdivisions and repurchase agreements secured by such instruments,
and tax-free state obligations;
(b) wholly owned finance companies will be considered to be
in the industries of their parents if their activities are primarily
related to financing the activities of the parents;
(c) utilities will be divided according to their services,
for example, gas, gas transmission, electric and gas, electric, and
telephone will each be considered a separate industry;
(d) personal credit and business credit businesses will be
considered separate industries.
2. Make loans, except that the Fund may purchase and hold debt
instruments and enter into repurchase agreements in accordance with its
investment objective and policies and may lend portfolio securities in an amount
not exceeding one-third of its total assets.
3. Borrow money, issue senior securities or mortgage, pledge or
hypothecate its assets except to the extent permitted under the 1940 Act.
4. Purchase or sell real estate, except that the Fund may purchase
securities of issuers which deal in real estate and may purchase securities
which are secured by interests in real estate.
5. Invest in commodities, except that as consistent with its investment
objective and policies the Fund may: (a) purchase and sell options, forward
contracts, futures contracts, including without limitation, those relating to
indices; (b) purchase and sell options on futures contracts or indices; (c)
purchase publicly traded securities of companies engaging in whole or in part in
such activities. For purposes of this investment limitation, "Commodities"
includes Commodity Contracts.
6. Act as an underwriter of securities within the meaning of the
Securities Act of 1933 except insofar as the Fund might be deemed to be an
underwriter upon the disposition of portfolio securities acquired within the
limitation on purchases of illiquid securities and except to the extent that the
purchase of obligations directly from the issuer thereof in accordance with its
investment objective, policies and limitations may be deemed to be underwriting.
For purposes of the above investment limitations, a security is
considered to be issued by the governmental entity (or entities) whose assets
and revenues back the security, or, with respect to a private activity bond that
is backed only by the assets and revenues of a nongovernmental user, a security
is considered to be issued by such nongovernmental user.
Except for the Fund's policy on illiquid securities and borrowing, if
a percentage limitation is satisfied at the time of investment, a later increase
or decrease in such percentage resulting from a change in
12
<PAGE> 31
the value of the Fund's portfolio securities will not constitute a violation of
such limitation for purposes of the 1940 Act.
In addition, the Fund is subject to the following non-fundamental
limitations, which may be changed without the vote of shareholders:
The Fund may not:
1. Acquire any other investment company or investment company security
except in connection with a merger, consolidation, reorganization or acquisition
of assets or where otherwise permitted under the 1940 Act.
2. Write or sell put options, call options, straddles, spreads, or any
combination thereof, except as consistent with the Fund's investment objective
and policies for transactions in options on securities or indices of securities,
futures contracts and options on futures contracts and in similar investments.
3. Purchase securities on margin, make short sales of securities or
maintain a short position, except that, as consistent with the Fund's investment
objective and policies, (a) this investment limitation shall not apply to the
Fund's transactions in futures contracts and related options, options on
securities or indices of securities and similar instruments, and (b) it may
obtain short-term credit as may be necessary for the clearance of purchases and
sales of portfolio securities.
4. Purchase securities of companies for the purpose of exercising
control.
5. Invest more than 15% of its net assets in illiquid securities.
6. Purchase securities while its outstanding borrowings (including
reverse repurchase agreements) are in excess of 5% of its total assets.
Securities held in escrow or in separate accounts in connection with the Fund's
investment practices described in its Prospectus or Statement of Additional
Information are not deemed to be pledged for purposes of this limitation.
MANAGEMENT
TRUSTEES AND OFFICERS
The Fund is a separate series under Financial Investors Trust (the
"Trust"). The Trust's Board of Trustees oversees the overall management of the
Fund and elects the officers of the Trust. 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, with the exception
of Mr. Lee and Mr. Maddaloni, were elected at a special meeting of shareholders
held March 21, 1997.
13
<PAGE> 32
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------
NAME POSITION(S) HELD WITH THE PRINCIPAL OCCUPATION DURING THE PAST 5 YEARS**
TRUST
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
W. Robert Alexander (72)* Trustee, Chairman and Mr. Alexander, a member of the Board of Trustees since
President December 1993, is the 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 (58) Trustee President/Chief Executive Officer, HealthONE Alliance,
Denver, CO; Former Executive Vice President, First
Interstate Bank of Denver. Ms. Anstine is currently a
Director of the Trust 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 (68) Trustee Mr. Crowder currently operates a marketing 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.
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
14
<PAGE> 33
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------
NAME POSITION(S) HELD WITH THE PRINCIPAL OCCUPATION DURING THE PAST 5 YEARS**
TRUST
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------
Martin J. Maddaloni ( 60 ) Trustee Mr. Maddaloni is General President of the United Association
of Journeymen and Apprentices of the Plumbing and Pipe
Fitting Industry of the United States and Canada (United
Association). Mr. Maddaloni is also Chairman of the United
Association's National Pension Fund, Treasurer for the
National Coordinating Committee for Multiemployer Plans
Board of Directors, and he serves as a Member on the Labor
Advisory Board for the American Income Life Insurance
Company (AIL), and a Director of Union Labor Life Insurance
Company (ULLICO). He has served the United Association in
various positions including International Vice President
(District 2), Special Representative, and International
Representative. He is deeply involved in charity work for
the Special Olympics, Diabetes/Dad's Day, and the Miami
Project to Cure Paralysis.
- ------------------------------------------------------------------------------------------------------------------------------
John R. Moran, Jr. (69) Trustee Mr. Moran is President of The Colorado Trust, a private
foundation trust 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 . He is also a member 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.
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
15
<PAGE> 34
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------
NAME POSITION(S) HELD WITH THE PRINCIPAL OCCUPATION DURING THE PAST 5 YEARS**
TRUST
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Robert E. Lee (64) Trustee Mr. Lee has been a Director of Storage Technology
Corporation since 1989 and of Equitable of Iowa since 1981.
Mr. Lee was the Executive Director of The Denver Foundation
from 1989 to 1996, and is currently the Executive Director
of Emeritus. Mr. Lee is also a Director of Meredith Capital
Corporation and Source Capital Corporation.
- ------------------------------------------------------------------------------------------------------------------------------
H. David Lansdowne (52) Vice President President and CEO of Tempest, Isenhart, Chafee, Lansdowne
and Associates, Inc. since January, 1988. Mr. Lansdowne
joined Tempest, Isenhart as Director of Research in 1983.
- ------------------------------------------------------------------------------------------------------------------------------
Robert Alder (57) Vice President Executive Vice President of Tempest, Isenhart, Chafee,
Lansdowne and Associates, Inc. since January, 1993.
- ------------------------------------------------------------------------------------------------------------------------------
Russell C. Burk (41) Secretary Mr. Burk has been General Counsel of ALPS Mutual Funds
Services, Inc., the Administrator and Distributor, since
February 1999. Prior to joining ALPS, Mr. Burk served as
Securities Counsel for Security Life of Denver, a subsidiary
of ING Group. Prior to joining Security Life, Mr. Burk
served as General Counsel for RAF Financial Corporation,
member NASD.
- ------------------------------------------------------------------------------------------------------------------------------
Jeremy May (29) Treasurer Mr. May has been a Director of Mutual Fund Operations at
ALPS Mutual Funds Services, Inc. since October 1997. 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.
The non-interested Trustees of the Trust receive from the Trust an
annual fee in the amount of $4,000 and an additional fee of $500 for attending
each Board or committee meeting. The Trustees are reimbursed for all reasonable
out-of-pocket expenses relating to attendance at meetings.
16
<PAGE> 35
For the Trust's fiscal year ended April 30, 1999, the Trustees were
compensated as follows (Mr. Maddaloni was elected as a Trustee at the December
14, 1999 Trustees Meeting and therefore received no compensation during the
Trust's fiscal year ended April 30, 1999):
<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 $ 6,500(1) $ 0 $ 0 $ 6,500
- ----------------------------------------------------------------------------------------------------------------------
Edwin B. Crowder,
Trustee $ 6,500(1) $ 0 $ 0 $ 6,500
- ----------------------------------------------------------------------------------------------------------------------
Robert E. Lee
Trustee $ 3,000(1) $ 0 $ 0 $ 3,000
- ----------------------------------------------------------------------------------------------------------------------
John R. Moran, Jr
Trustee $ 6,500(1) $ 0 $ 0 $ 6,500
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Member of the Audit Committee.
INVESTMENT ADVISER
IMC serves as investment Adviser to the Fund under an Advisory
Agreement dated December 14, 1999. The Advisory Agreement was approved by the
Fund's sole shareholder prior to the commencement of the Fund's operations. The
Advisory Agreement provides that the Adviser shall not be liable for any error
of judgment or mistake of law or for any loss suffered by the Fund in connection
with the performance of the Advisory Agreement, except a loss resulting from a
breach of fiduciary duty with respect to the receipt of compensation for
services or a loss resulting from willful misfeasance, bad faith or gross
negligence on the part of the Adviser in the performance of its duties or from
reckless disregard by the Adviser of its duties and obligations thereunder.
Unless sooner terminated, the Advisory Agreement will continue in
effect with respect to the Fund until December 14, 2001 and from year to year
thereafter, subject to annual approval by the Fund's Board of Trustees, or by a
vote of the majority of the outstanding shares of the Fund and a majority of the
Trustees who are not parties to the Agreement or interested persons (as defined
in the 1940 Act) of any party by votes cast in person at a meeting called for
such purpose. The Advisory Agreement may be terminated by the Fund or the
Adviser on 60 days written notice, and will terminate immediately in the event
of its assignment.
AUTHORITY TO ACT AS INVESTMENT ADVISER
Banking laws and regulations, including the Glass-Steagall Act as
presently interpreted by the Board of Governors of the Federal Reserve System,
(a) prohibit a bank holding company registered under the Federal Bank Holding
Company Act of 1956 or any affiliate thereof from sponsoring, organizing or
17
<PAGE> 36
controlling a registered, open-end investment company continuously engaged in
the issuance of its shares, but (b) do not prohibit such a bank holding company
or affiliate from acting as investment adviser, transfer agent, or custodian to
such an investment company. The Adviser believes that it may perform the
services for the Fund contemplated by its Advisory Agreement with the Fund as
described in such agreement without violation of applicable banking laws or
regulations. However, there are no controlling judicial precedents and future
changes in legal requirements relating to the permissible activities of banks
and their affiliates, as well as future interpretations of present requirements,
could prevent the Adviser from continuing to perform services for the Fund. If
the Adviser were prohibited from providing services to the Fund, the Board of
Trustees would consider selecting another qualified firm. Any new investment
advisory agreement would be subject to shareholder approval.
Should future legislative, judicial or administrative action prohibit
or restrict the proposed activities of the Adviser, or its affiliated and
correspondent banks in connection with shareholder purchases of fund shares, the
Adviser and its affiliated and correspondent banks might be required to
materially alter or discontinue the services offered by them to shareholders. It
is not anticipated, however, that any resulting change in the Fund's method of
operation would affect its net asset value per share or result in financial loss
to any shareholder.
DISTRIBUTION OF FUND SHARES
Shares of the Fund are offered on a continuous basis through ALPS
Mutual Funds Services, Inc. ("ALPS"), 370 17th Street, Suite 3100, Denver, CO
80202, as Sponsor and Distributor of the Fund. ALPS also serves as administrator
and distributor of other mutual funds. As distributor, ALPS acts as the Fund's
agent to underwrite, sell and distribute shares in a continuous offering.
ADMINISTRATOR, TRANSFER AGENT, BOOKKEEPING AND PRICING AGENT
Pursuant to an Administration Contract, ALPS acts as Administrator for
the Fund. ALPS provides management and administrative services necessary for the
operation of the Fund, including, among other things, (i) preparation of
shareholder reports and communications, (ii) regulatory compliance, such as
reports to and filings with the Securities and Exchange Commission ("SEC") and
state securities commissions and (iii) general supervision of the operation of
the Fund, including coordination of the services performed by the Fund's
adviser, custodian, independent accountants, legal counsel and others. In
addition, ALPS furnishes office space and facilities required for conducting the
business of the Fund and pays the compensation of the Fund's officers, employees
and Trustees affiliated with ALPS.
The Administration Agreement for the Fund was approved by the Board of
Trustees, including a majority of the Trustees who are not parties to the
contracts or interested persons of such parties, at its meeting held on December
14, 1999. At any time, the Administration Agreement is terminable with respect
to the Fund without penalty by vote of a majority of the Trustees who are not
"interested persons" of the Fund and who have no direct or indirect financial
interest in the Administration Agreement
18
<PAGE> 37
upon not more than 60 days written notice to ALPS or by vote of the holders of a
majority of the shares of the Fund, or, upon 60 days notice by ALPS.
Under separate agreements, ALPS also serves as the transfer and
dividend disbursing agent of the Fund and the bookkeeping and pricing agent of
the Fund.
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:
<TABLE>
<CAPTION>
ADVISORY FEE ADMINISTRATIVE FEE
<S> <C> <C>
First $500 Million .01% .12%
Next $500 Million .01% .085%
Next $1.5 Billion .01% .06%
In Excess of $2.5 Billion .005% .04%
</TABLE>
DETERMINATION OF NET ASSET VALUE
As indicated under "How are Fund Shares Valued?" in the Prospectus, the
Fund's NAV is calculated at the close of the regular trading session of the New
York Stock Exchange (normally 4:00 p.m. Eastern Time) each day that the Exchange
is open. The Fund will be closed on the following holidays: New Year's Day,
Martin Luther King, Jr. Day, Presidents' Day, Good Friday, Memorial Day,
Independence Day, Labor Day, Thanksgiving Day and Christmas Day.
Securities listed on an exchange or over-the-counter are valued on the
basis of the last sale prior to the time the valuation is made. If there has
been no sale since the immediately previous valuation, then the average of the
last bid and asked prices is used. Quotations are taken from the exchange where
the security is primarily traded. Portfolio securities which are primarily
traded on foreign exchanges may be valued with the assistance of pricing
services and are generally valued at the preceding closing values of such
securities on their respective exchanges, except that when an occurrence
subsequent to the time a foreign security is valued is likely to have changed
such value, then the fair value of those securities will be determined by
consideration of other factors by or under the direction of the Board of
Trustees. Also, it is possible that events can occur that have a significant
impact on the value of foreign securities at times when shareholders are unable
to purchase or redeem shares of the Funds.
Securities for which market quotations are not readily available are
valued at fair value as determined in good faith by or at the direction of the
Board of Trustees. Notwithstanding the above, bonds and other fixed-income
securities are valued by using market quotations and may be valued on the basis
of prices provided by a pricing service approved by the Board of Trustees. All
assets and liabilities
19
<PAGE> 38
initially expressed in foreign currencies will be converted into U.S. dollars at
the mean between the bid and asked prices of such currencies against U.S.
dollars as last quoted by any major bank.
ADDITIONAL PURCHASE AND REDEMPTION INFORMATION
Payment for shares may, in the discretion of the Adviser, be made in
the form of securities that are permissible investments for the Fund as
described in the prospectus. For further information about this form of payment,
please contact ALPS. In connection with an in-kind securities payment, the Fund
will require, among other things, that the securities be valued on the day of
purchase in accordance with the pricing methods used by the Fund and that the
Fund receives satisfactory assurances that (i) it will have good and marketable
title to the securities received by it; (2) the securities are in proper form
for transfer to the Fund; and (3) adequate information will be provided
concerning the basis and other matters relating to the securities.
Under the 1940 Act, the Fund may suspend the right of redemption or
postpone the date of payment upon redemption for any period during which the New
York Stock Exchange is closed (other than customary weekend and holiday
closings), or during which trading on said exchange is restricted, or during
which (as determined by the SEC by rule or regulation) an emergency exists as a
result of which disposal or valuation of portfolio securities is not reasonably
practicable, or for such other periods as the SEC may permit. The Fund may also
suspend or postpone the recordation of the transfer of its shares upon the
occurrence of any of the foregoing conditions.
The Fund may suspend redemption rights or postpone redemption payments
(as well as suspend the recordation of the transfer of shares) for such periods
as are permitted under the 1940 Act. The Fund may also redeem shares
involuntarily or make payment for redemption in securities or other property if
it appears appropriate to do so in light of the Fund's responsibilities under
the 1940 Act.
In addition, the Fund may redeem shares involuntarily to reimburse the
Fund for any loss sustained by reason of the failure of a shareholder to make
full payment for shares purchased by the shareholder.
All redemptions of shares of the Fund will be made in cash, except that
the commitment to redeem shares in cash extends only to redemption requests made
by each shareholder of a fund during any 90-day period of up to the lesser of
$250,000 or 1% of the net asset value of the Fund at the beginning of such
period. This commitment is irrevocable without the prior approval of the SEC and
is a fundamental policy of the Fund that may not be changed without shareholder
approval. In the case of redemption requests by shareholders in excess of such
amounts, the Board of Trustees reserves the right to have the Fund make payment,
in whole or in part, in securities or other assets in case of an emergency or
any time a cash distribution would impair the liquidity of the Fund to the
detriment of its existing shareholders. In this event, the securities would be
valued in the same manner as the securities of the Fund are valued. If the
recipient were to sell such securities, he or she may incur brokerage or other
transactional charges.
20
<PAGE> 39
PORTFOLIO TRANSACTIONS
Pursuant to its Advisory Agreement with the Trust, IMC is responsible
for making decisions with respect to and placing orders for all purchases and
sales of portfolio securities for the Fund. The Adviser purchases portfolio
securities either directly from the issuer or from an underwriter or dealer
making a market in the securities involved. Purchases from an underwriter of
portfolio securities include a commission or concession paid by the issuer to
the underwriter and purchases from dealers serving as market makers may include
the spread between the bid and asked price. Transactions on stock exchanges
involve the payment of negotiated brokerage commissions. There is generally no
stated commission in the case of securities traded in the over-the-counter
market, but the price includes an undisclosed commission or mark-up.
While the Adviser generally seeks competitive spreads or commissions,
it may not necessarily allocate each transaction to the underwriter or dealer
charging the lowest spread or commission available on the transaction.
Allocation of transactions, including their frequency, to various dealers is
determined by the Adviser in its best judgment and in a manner deemed fair and
reasonable to shareholders. Under the Advisory Agreement, pursuant to Section
28(e) of the Securities Exchange Act of 1934, as amended, the Adviser is
authorized to negotiate and pay higher brokerage commissions in exchange for
research services rendered by broker-dealers. Subject to this consideration,
broker-dealers who provide supplemental investment research to the Adviser may
receive orders for transactions by the Fund. Information so received is in
addition to and not in lieu of services required to be performed by the Adviser
and does not reduce the fees payable to the Adviser by the Fund. Such
information may be useful to the Adviser in serving both the Trust and other
clients, and, similarly, supplemental information obtained by the placement of
business of other clients may be useful to the Adviser in carrying out its
obligations to the Trust.
Portfolio securities will not be purchased from or sold to the Fund's
Adviser, Distributor, or any "affiliated person" (as such term is defined under
the 1940 Act) of any of them acting as principal, except to the extent permitted
by the SEC. In addition, the Fund will not give preference to its Adviser's
correspondents with respect to such transactions, securities, savings deposits,
repurchase agreements and reverse repurchase agreements.
The adviser to the Fund has agreed to maintain a policy and practice of
conducting its investment management activities independently of the respective
commercial departments of all of the Adviser's banking affiliates. In making
recommendations for the Fund, the Adviser's personnel will not inquire or take
into consideration whether the issuers of securities proposed for purchase or
sale for the Fund's respective accounts are customers of the respective
commercial departments of the Adviser's affiliates.
Investment decisions for the Fund are made independently from those for
the other funds and for other investment companies and accounts advised or
managed by the Adviser. Such other funds, investment companies and accounts may
also invest in the same securities as the Fund. When a purchase or sale of the
same security is made at substantially the same time on behalf of the Fund and
another investment company or account, the transaction will be averaged as to
price, and available investments
21
<PAGE> 40
allocated as to amount, in a manner which the Adviser believes to be equitable
to the Fund and such other investment company or account. In some instances,
this investment procedure may adversely affect the price paid or received by the
Fund or the size of the position obtained or sold by the Fund. In connection
therewith, and to the extent permitted by law, and by the Advisory Agreement,
the Adviser may aggregate the securities to be sold or purchased for the Fund
with those to be sold or purchased for other investment companies or advisory
clients.
TAXATION
The following summarizes certain additional tax considerations
generally affecting the Fund and its shareholders that are not described in the
Prospectus. No attempt is made to present a detailed explanation of the tax
treatment of the Fund or its shareholders or possible legislative changes, and
the discussion here and in the Prospectus is not intended as a substitute for
careful tax planning. Potential investors should consult their tax advisers with
specific reference to their own tax situation.
The Fund will be treated as a separate corporate entity under the
Internal Revenue Code (the "Code") and intends to qualify as a regulated
investment company. In order to qualify for tax treatment as a regulated
investment company under the Code, the Fund must satisfy, in addition to the
distribution requirement described in the Prospectus, certain requirements with
respect to the source of its income during a taxable year. At least 90% of the
gross income of the Fund must be derived from dividends, interest, payments with
respect to securities loans, gains from the sale or other disposition of stocks,
securities or foreign currencies, and other income (including but not limited to
gains from options, futures, or forward contracts) derived with respect to the
Fund's business of investing in such stock, securities or currencies. The
Treasury Department may by regulation exclude from qualifying income foreign
currency gains which are not directly related to the Fund's principal business
of investing in stock or securities, or options and futures with respect to
stock or securities. Any income derived by the Fund from a partnership or trust
is treated as derived with respect to the Fund's business of investing stock,
securities or currencies only to the extent that such income is attributable to
items of income which would have been qualifying income if realized by the Fund
in the same manner as by the partnership or trust.
A 4% non-deductible excise tax is imposed on regulated investment
companies that fail to currently distribute an amount equal to specified
percentages of their ordinary taxable income and capital gain net income (excess
of capital gains over capital losses). The Fund intends to make sufficient
distributions or deemed distributions of its ordinary income and capital gain
net income each calendar year to avoid liability for this excise tax.
If for any taxable year the Fund does not qualify for federal tax
treatment as a regulated investment company, all of the Fund's taxable income
will be subject to federal income tax at regular corporate rates without any
deduction for distributions to its shareholders. In such event, dividend
distributions (including amounts derived from interest on Municipal Securities)
would be taxable as ordinary income to the Fund's shareholders to the extent of
the Fund's current and accumulated earnings and profits, and would be eligible
for the dividends received deduction for corporations.
22
<PAGE> 41
The Fund may be required in certain cases to withhold and remit to the
U.S. Treasury 31% of taxable dividends or gross proceeds realized upon sale paid
to shareholders who have failed to provide a correct tax identification number
in the manner required, or who are subject to withholding by the Internal
Revenue Service for failure to properly include on their return payments of
taxable interest or dividends, or who have failed to certify to the Fund that
they are not subject to backup withholding when required to do so or that they
are "exempt recipients".
The tax principles applicable to transactions in financial instruments
and futures contracts and options that may be engaged in by the Fund, and
investments in passive foreign investment companies ("PFICs"), are complex and,
in some cases, uncertain. Such transactions and investments may cause the Fund
to recognize taxable income prior to the receipt of cash, thereby requiring the
Fund to liquidate other positions, or to borrow money, so as to make sufficient
distributions to shareholders to avoid corporate-level tax. Moreover, some or
all of the taxable income recognized may be ordinary income or short-term
capital gain, so that the distributions may be taxable to shareholders as
ordinary income.
In addition, in the case of any shares of a PFIC in which the Fund
invests, the Fund may be liable for corporate-level tax on any ultimate gain or
distributions on the shares if the Fund fails to make an election to recognize
income annually during the period of its ownership of the shares.
OTHER INFORMATION
DESCRIPTION OF THE TRUST
The UA S&P 500 Index Fund is a separate series under Financial
Investors Trust (the "Trust"), an open-end management investment company
organized as a Delaware Business Trust. The Trust consists of seven funds
including the UA S&P 500 Index Fund.
The capitalization of the Fund consists solely of an unlimited number
of shares of beneficial interest with no par value. The Board of Trustees may
establish additional funds (with different investment objectives and fundamental
policies) at any time in the future. Establishment and offering of additional
funds will not alter the rights of the shareholders. When issued, shares are
fully paid, nonassessable, redeemable and freely transferable. Shares do not
have preemptive rights or subscription rights. In any liquidation of the Fund,
each shareholder is entitled to receive their pro rata share of the net assets
of the Fund.
VOTING RIGHTS
Under the Declaration of Trust, the Trust is not required to hold
annual meetings of the Trust's shareholders to elect Trustees or for other
purposes. It is not anticipated that the Trust will hold shareholders' meetings
unless required by law or the Declaration of Trust. In this regard, the Trust
will be
23
<PAGE> 42
required to hold a meeting to elect Trustees to fill any existing vacancies on
the Board if, at any time, fewer than a majority of the Trustees have been
elected by the shareholders of the Trust. In addition, the Declaration of Trust
provides that the holders of not less than two-thirds of the outstanding shares
of the Trust may remove persons serving as Trustee either by declaration in
writing or at a meeting called for such purpose. The Trustees are required to
call a meeting for the purpose of considering the removal of persons 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. To the extent required by applicable law,
the Trustees shall assist shareholders who seek to remove any person serving as
Trustee.
The Trust's shares do not have cumulative voting rights, so that the
holders of more than 50% of the outstanding shares may elect the entire Board of
Trustees, in which case the holders of the remaining shares would not be able to
elect any Trustees.
Shareholders of all of the Funds in the Trust, as well as those of any
other investment portfolio now or hereafter offered by the Trust, will vote
together in the aggregate and not separately on a fund-by-fund basis, except as
otherwise required by law or when permitted by the Board of Trustees. Rule 18f-2
(the "Rule") under the 1940 Act provides that any matter required to be
submitted to the holders of the outstanding voting securities of an investment
company such as the Fund shall not be deemed to have been effectively acted upon
unless approved by the holders of a majority of the outstanding shares of each
fund affected by the matter. A fund is not affected by a matter unless it is
clear that the interests of each fund in the matter are substantially identical
or that the matter does not affect any interest of the fund. Under the Rule, the
approval of an investment advisory agreement or any change in a fundamental
investment policy would be effectively acted upon with respect to a fund only if
approved by a majority of the outstanding shares of such fund. However, the Rule
also provides that the ratification of the appointment of independent auditors,
the approval of principal underwriting contracts and the election of trustees
may be effectively acted upon by shareholders of the funds voting together in
the aggregate without regard to a particular fund.
CUSTODIAN
National City Bank has been appointed as the Fund's custodian. Pursuant
to a Custodian Agreement, National City Bank is responsible for holding the
Fund's cash and portfolio securities.
PERFORMANCE INFORMATION
The Fund may, from time to time, include its total returns in
advertisements or reports to shareholders or prospective investors.
24
<PAGE> 43
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 formula:
P(l+T)(n)=ERV
(where P = a hypothetical initial payment of $1,000, T= the average annual total
return, n = the number of years, and ERV = the ending redeemable value of a
hypothetical $1,000 payment made at the beginning of the period). 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 Fund during the particular time period shown.
Total return for the Fund will vary based on changes in the market conditions
and the level of the Fund's expenses, and no reported performance figure should
be considered an indication of performance which may be expected in the future.
In connection with communicating its total return to current or
prospective shareholders, the Fund also may compare these figures to the
performance of other mutual funds tracked by mutual fund rating services or to
other unmanaged indices which may assume reinvestment of dividends but generally
do not reflect deductions for administrative and management costs.
Performance information for the Fund may be compared, in reports and
promotional literature, to: (i) the Standard & Poor's 500 Stock Index, Dow Jones
Industrial Average, or other unmanaged indices so that investors may compare the
Fund's results with those of a group of unmanaged securities widely regarded by
investors as representative of the securities markets in general; (ii) other
groups of mutual funds tracked by Lipper Analytical Services, a widely used
independent research firm which ranks mutual funds by overall performance,
investment objectives, and assets, or tracked by other services, companies,
publications, or persons who rank mutual funds on overall performance or other
criteria, and (iii) the Consumer Price Index (measure for inflation) to assess
the real rate of return from an investment of dividends but generally do not
reflect deductions for administrative and management costs and expenses.
INDEPENDENT ACCOUNTANTS
Deloitte & Touche LLP serves as the independent accountants for the
Fund. Deloitte & Touche provides audit services, tax return preparation and
assistance and consultation in connection with review of SEC filings. Deloitte &
Touche's address is 555 Seventeenth Street, Suite 3600, Denver, Colorado 80202.
REGISTRATION STATEMENT
This SAI and the prospectus do not contain all the information included
in the Trust's Registration Statement filed with the SEC under the Securities
Act of 1933 with respect to the securities offered
25
<PAGE> 44
hereby, certain portions of which have been omitted pursuant to the rules and
regulations of the SEC. The Registration Statement, including the exhibits filed
therewith, may be examined at the office of the SEC in Washington, D.C.
Statements contained herein and in the Prospectus as to the contents of
any contract or other documents referred to are not necessarily complete, and,
in each instance, reference is made to the copy of such contract or other
documents filed as an exhibit to the Registration Statement, each such statement
being qualified in all respects by such reference.
26
<PAGE> 45
PART C. OTHER INFORMATION
Item 23. Exhibits
<TABLE>
<S> <C>
* (a) (1) Trust Instrument.
* (2) Revised Trust Instrument.
* (b) (1) By-Laws of Registrant.
* (2) Revised By-Laws of Registrant.
(c) None.
* (d) (1) Investment Advisory Contract between Registrant and GE Investment Management,
Incorporated with respect to the U.S. Treasury Money Market Fund.
* (2) Investment Advisory Contract between Registrant and GE Investment Management,
Incorporated with respect to the U.S. Government Money Market Fund.
** (3) Investment Advisory Contract between Registrant and Tempest, Isenhart, Chafee,
Lansdowne & Associates, Inc. with respect to the Aristata Equity Fund.
** (4) Investment Advisory Contract between Registrant and Tempest, Isenhart, Chafee,
Lansdowne & Associates, Inc. with respect to the Aristata Quality Bond Fund.
** (5) Investment Advisory Contract between Registrant and Tempest, Isenhart, Chafee,
Lansdowne & Associates, Inc. with respect to the Aristata Colorado Quality
Tax-Exempt Fund.
** (6) Investment Advisory Contract between Registrant and GE Investment Management,
Incorporated with respect to the Prime Money Market Fund.
(7) Investment Advisory Contract between Registrant and National City Investment
Management Company is filed electronically herewith.
</TABLE>
<PAGE> 46
<TABLE>
<S> <C>
** (e) (1) Distribution Agreement between Registrant and ALPS Mutual Funds Services, Inc.
(2) Amended Distribution Agreement between Registrant and ALPS Mutual Funds
Services, Inc. is filed electronically herewith.
(3) Amended and restated Administration Agreement between Registrant and ALPS
Mutual Funds Services, Inc. is filed electronically herewith.
(f) None.
* (g) (1) Custodian Contract between Registrant and State Street Bank and Trust Company.
* (2) Custodian Contract between Registrant and Fifth Third Bank.
(3) Custodian Contract between Registrant and National City Bank is filed
electronically herewith.
** (h) (1) Transfer Agency and Service Agreement between Registrant and ALPS Mutual Funds
Services, Inc.
(2) Amended and Restated Transfer Agency and Service Agreement between Registrant and ALPS
Mutual Funds Services, Inc. is filed electronically herewith.
** (3) Bookkeeping and Pricing Agreement between Registrant and ALPS Mutual Funds
Services, Inc.
(4) Amended Bookkeeping and Pricing Agreement between Registrant and ALPS Mutual
Funds Services, Inc. is filed electronically herewith.
*** (5) Subscription Agreement.
(i) Opinion and Consent of Davis, Graham & Stubbs LLP, counsel to Registrant is filed
electronically herewith.
</TABLE>
<PAGE> 47
<TABLE>
<S> <C>
(j) Consent of Independent Public Accountants Deloitte & Touche, LLP is filed
electronically herewith.
(k) None
(l) None
****(m) (1) Distribution Plan - Prime Money Market Fund Class II
(m) (2) Distribution Plan - United Association S & P 500 Index Fund is filed electronically
herewith.
(n) Omitted by Rule Change
****(o) Rule 18f-3 Plan
</TABLE>
* Filed with Post-Effective Amendment No. 7 to Registrant's Registration
Statement on August 28, 1997.
** Filed with Post-Effective Amendment No. 10 to Registrant's Registration
Statement on June 12, 1998
*** Filed with Post-Effective Amendment No. 5 to Registrant's Registration
Statement on August 28, 1996.
**** Filed with Post-Effective Amendment 12 to Registrant's Registration
Statement on June 29, 1999.
Item 24. Persons Controlled by or under Common Control with Registrant.
None.
Item 25. 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
<PAGE> 48
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.
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 26. Business and Other Connections of Investment Advisers
With respect to all Funds, reference is made to "Management of
the Trust" 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).
<PAGE> 49
The list required by this Item 28 of officers and directors of
Tempest, Isenhart, Chafee, Lansdowne & Assocs. ("Tempest"), 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).
The list required by this Item 28 of officers and directors of
National City Investment Management Company ("National City"), 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 National City pursuant to the Investment Advisers Act of 1940, as amended
(SEC File No. 801-446).
Item 27. Principal Underwriter
(a) ALPS Mutual Funds Services, Inc. acts as
Distributor/Underwriter for various other unrelated
registered investment companies.
(b) Officers and Directors
<TABLE>
<CAPTION>
Name and Principal Positions and Offices Positions and Offices with
Business Address* with Registrant Underwriter
- ------------------ --------------------- --------------------------
<S> <C> <C>
W. Robert Alexander Chairman of the Board of Trustees and Chairman and Chief Executive
President Officer and Secretary
Arthur J. L. Lucey None President and Director
Thomas A. Carter None Chief Financial Officer
Edmund J. Burke None Executive Vice President
and Director
Russell C. Burk Secretary General Counsel
Jeremy O. May Assistant Treasurer Vice President
Rick A. Pederson None Director
Chris Woessner None Director
John Hannon None Director
</TABLE>
<PAGE> 50
- -------------------
* All addresses are 370 Seventeenth Street, Suite 3100, Denver, Colorado 80202.
(c) Not applicable.
Item 28. 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, Inc. and Tempest, Isenhart, Chafee,
Lansdowne & Associates, Inc..
Item 29. Management Services
Not applicable.
Item 30. 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 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.
<PAGE> 51
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant certifies that it meets all the
requirements for the effectiveness of this Registration Statement pursuant to
Rule 485(b) under the Securities Act of 1933 and has duly caused this
Post-Effective Amendment No. 15 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 February 14, 2000.
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.
<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
/s/ W. ROBERT ALEXANDER Trustee and February 14, 2000
- ----------------------------------- President
W. Robert Alexander
/s/ ROBERT E. LEE Trustee February 14, 2000
- -----------------------------------
Robert E. Lee
/s/ MARY K. ANSTINE Trustee February 14, 2000
- -----------------------------------
Mary K. Anstine
/s/ EDWIN B. CROWDER Trustee February 14, 2000
- -----------------------------------
Edwin B. Crowder
/s/ MARTIN J. MADDALONI Trustee February 14, 2000
- -----------------------------------
Martin J. Maddaloni
/s/ JOHN R. MORAN, JR Trustee February 14, 2000
- -----------------------------------
John R. Moran, Jr.
</TABLE>
<PAGE> 52
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
<S> <C>
* (a) (1) Trust Instrument.
* (2) Revised Trust Instrument.
* (b) (1) By-Laws of Registrant.
* (2) Revised By-Laws of Registrant.
(c) None.
* (d) (1) Investment Advisory Contract between Registrant and GE Investment Management,
Incorporated with respect to the U.S. Treasury Money Market Fund.
* (2) Investment Advisory Contract between Registrant and GE Investment Management,
Incorporated with respect to the U.S. Government Money Market Fund.
** (3) Investment Advisory Contract between Registrant and Tempest, Isenhart, Chafee,
Lansdowne & Associates, Inc. with respect to the Aristata Equity Fund.
** (4) Investment Advisory Contract between Registrant and Tempest, Isenhart, Chafee,
Lansdowne & Associates, Inc. with respect to the Aristata Quality Bond Fund.
** (5) Investment Advisory Contract between Registrant and Tempest, Isenhart, Chafee,
Lansdowne & Associates, Inc. with respect to the Aristata Colorado Quality
Tax-Exempt Fund.
** (6) Investment Advisory Contract between Registrant and GE Investment Management,
Incorporated with respect to the Prime Money Market Fund.
(7) Investment Advisory Contract between Registrant and National City Investment
Management Company is filed electronically herewith.
</TABLE>
<PAGE> 53
<TABLE>
<S> <C>
** (e) (1) Distribution Agreement between Registrant and ALPS Mutual Funds Services, Inc.
(2) Amended Distribution Agreement between Registrant and ALPS Mutual Funds
Services, Inc. is filed electronically herewith.
(3) Amended and restated Administration Agreement between Registrant and ALPS
Mutual Funds Services, Inc. is filed electronically herewith.
(f) None.
* (g) (1) Custodian Contract between Registrant and State Street Bank and Trust Company.
* (2) Custodian Contract between Registrant and Fifth Third Bank.
(3) Custodian Contract between Registrant and National City Bank is filed
electronically herewith.
** (h) (1) Transfer Agency and Service Agreement between Registrant and ALPS Mutual Funds
Services, Inc.
(2) Amended and Restated Transfer Agency and Service Agreement between Registrant and ALPS
Mutual Funds Services, Inc. is filed electronically herewith.
** (3) Bookkeeping and Pricing Agreement between Registrant and ALPS Mutual Funds
Services, Inc.
(4) Amended Bookkeeping and Pricing Agreement between Registrant and ALPS Mutual
Funds Services, Inc. is filed electronically herewith.
*** (5) Subscription Agreement.
(i) Opinion and Consent of Davis, Graham & Stubbs LLP, counsel to Registrant is filed
electronically herewith.
(j) Consent of Independent Public Accountants Deloitte & Touche, LLP is filed
electronically herewith.
(k) None
(l) None
**** (m) (1) Distribution Plan - Prime Money Market Fund Class II
(m) (2) Distribution Plan - United Association S & P 500 Index Fund is filed electronically
herewith.
(n) Omitted by Rule Change
**** (o) Rule 18f-3 Plan
</TABLE>
* Filed with Post-Effective Amendment No. 7 to Registrant's Registration
Statement on August 28, 1997.
** Filed with Post-Effective Amendment No. 10 to Registrant's Registration
Statement on June 12, 1998
*** Filed with Post-Effective Amendment No. 5 to Registrant's Registration
Statement on August 28, 1996.
**** Filed with Post-Effective Amendment 12 to Registrant's Registration
Statement on June 29, 1999.
<PAGE> 1
EXHIBIT (d)(7)
ADVISORY AGREEMENT
This Advisory Agreement (together with each amendment, if any, thereto,
this "AGREEMENT") is made as of February XX, 2000 between __________ (the
"TRUST"), a Massachusetts business trust, and National City Investment
Management Company ("ADVISER"), a Michigan corporation registered as an
investment adviser under the Investment Advisers Act of 1940.
WHEREAS, the Trust desires to retain the Adviser as investment adviser
to the UA S&P 500 Index Fund, a portfolio of the Trust (such portfolio, the
"FUND");
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, it is agreed among the parties hereto as follows:
1. DELIVERY OF DOCUMENTS. The Trust represents and warrants to the
Adviser that the Trust has furnished the Adviser with true and complete copies
of each of the following, and that all of the following are in full force and
effect, and that none of the following have been superseded or revoked:
(a) The Trust's Declaration of Trust, as filed with the
State Secretary of the Commonwealth of Massachusetts
on __________________, 19___ and all amendments
thereto (such Declaration of Trust, as presently in
effect and as it shall from time to time be amended,
is herein called the "DECLARATION OF TRUST");
(b) The Trust's Code of Regulations, and amendments
thereto;
(c) Resolutions of the Trust's Board of Trustees
authorizing the appointment of the Adviser and
approving this Agreement;
(d) The Trust's Notification of Registration on Form N-8A
under the 1940 Act as filed with the Securities and
Exchange Commission ("SEC") on __________________,
19___ and all amendments thereto;
(e) The Trust's Registration Statement on Form N-1A under
the Securities Act of 1933, as amended (File No.
33-____) and under the Investment Company Act of
1940, as amended (the "1940 ACT") as filed with the
SEC on __________________, 199___ and all amendments
thereto; and
(f) The Trust's most recent prospectuses and statements
of additional information with respect to the Fund
(such prospectus and statement of additional
information, as presently in effect, and all
amendments and supplements thereto are hereinafter
referred to as the "PROSPECTUS").
<PAGE> 2
The Trust will furnish the Adviser from time to time with
execution copies of all amendments of or supplements to the foregoing.
2. SERVICES. The Trust hereby appoints the Adviser to act as investment
adviser to the Fund for the period and on the terms set forth in this Agreement.
In order to induce the Adviser to accept such appointment, and in consideration
of Adviser's acceptance thereof the Trust represents and warrants to the Adviser
that (a) the Trust registered as an open-end, management investment company
under the 1940 Act, (b) the Fund is classified as a diversified investment fund
under the 1940 Act, and (c) none of the assets of the Fund are or will
constitute "plan assets" as defined in Department of Labor Regulation
ss.2510.3-101 or any successor thereto.
Intending to be legally bound, the Adviser accepts such
appointment and agrees to furnish the services required herein to the Fund for
the compensation hereinafter provided.
Subject to the supervision of the Trust's Board of Trustees,
the Adviser will provide a continuous investment program for the Fund, including
investment research and management with respect to all securities and
investments and cash equivalents in the Fund. The Adviser will determine from
time to time what securities and other investments will be purchased, retained
or sold by the Fund. The Adviser will provide the services under this Agreement
in accordance with the Fund's investment objective, policies, and restrictions
as stated in the Prospectus and resolutions of the Trust's Board of Trustees.
The Trust agrees to give the Adviser, not less than ninety (90) days prior to
the effective date of any change in the Fund's investment objective, policies,
and restrictions as so stated, written notice setting forth such change.
3. SUBCONTRACTORS. It is understood that the Adviser may from time to
time employ or associate with itself such person or persons as the Adviser may
believe to be particularly fitted to assist in the performance of this
Agreement; provided, however, that the compensation of such person or persons
shall be paid by the Adviser and that the Adviser 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. Without limiting the generality of the foregoing, it is
agreed that investment advisory service to the Fund may be provided by a
subcontractor agreeable to the Adviser and approved in accordance with the
provision of the 1940 Act. Any such sub-advisers are hereinafter referred to as
the "SUB-ADVISERS." In the event that any Sub-Adviser appointed hereunder with
respect to the Fund is terminated, the Adviser may provide investment advisory
services pursuant to this Agreement to the Fund without further shareholder
approval. Notwithstanding the employment of any Sub-Adviser with respect to the
Fund, the Adviser shall in all events: (a) establish and monitor general
investment criteria and policies for the Fund; (b) review investments in the
Fund on a periodic basis for compliance with its investment objective, policies
and restrictions as stated in the Prospectus applicable to the Fund; (c) review
periodically any Sub-Adviser's policies with respect to the placement of orders
for the purchase and sale of portfolio securities; and (d) review, monitor,
analyze and report to the Board of Trustees on the performance of any
Sub-Adviser.
4. COVENANTS BY ADVISER. The Adviser agrees with respect to the
services provided to the Fund that the Adviser:
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<PAGE> 3
(a) will comply with all applicable Rules and Regulations
of the SEC and will in addition conduct its
activities under this Agreement in accordance with
other applicable law;
(b) will use the same skill and care in providing such
services as it uses in providing services to similar
fiduciary accounts for which it has investment
responsibilities;
(c) will not make loans to any person to purchase or
carry shares in the Fund, or make interest-bearing
loans to the Trust or the Fund;
(d) will maintain a policy and practice of conducting its
investment management activities independently of the
respective commercial departments of all of the
Adviser's banking affiliates. In making investment
recommendations for the Fund, the Adviser's personnel
will not inquire or take into consideration whether
the issuers of securities proposed for purchase or
sale for the Fund's respective accounts are customers
of the respective commercial departments of the
Adviser's banking affiliates;
(e) will place orders pursuant to its investment
determinations for the Fund either directly with the
issuer or with any broker or dealer. In selecting
brokers or dealers for executing portfolio
transactions, the Adviser will use reasonable efforts
to seek on behalf of the Trust and the Fund the best
overall terms available. In assessing the best
overall terms available for any transaction the
Adviser shall consider all factors it deems relevant,
including the breadth of the market in the security,
the price of the security, the financial condition
and execution capability of the broker or dealer, and
the reasonableness of the commission, if any, both
for the specific transaction and on a continuing
basis. In evaluating the best overall terms
available, and in selecting the broker or dealer to
execute a particular transaction, the Adviser may
also consider the brokerage and research services (as
those terms are defined in Section 28(e) of the
Securities Exchange Act of 1934, as amended) provided
to the Fund and/or other accounts over which the
Adviser or any affiliate of the Adviser exercises
investment discretion. Subject to the review of the
Trust's Board of Trustees from time to time with
respect to the extent and continuation of such
authority, the Adviser is authorized to negotiate and
pay to a broker or dealer who provides such brokerage
and research services a commission for executing a
portfolio transaction for the Fund which is in excess
of the amount of commission another broker or dealer
would have charged for effecting that transaction if,
but only if, the Adviser determines in good faith
that such commission was reasonable in relation to
the value of the brokerage and research services
provided by such broker or dealer viewed in terms of
that particular transaction or in terms of the
overall responsibilities of the Adviser with respect
to the accounts as to which it exercises investment
discretion. In no
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<PAGE> 4
instance will the securities of the Fund be purchased
from or sold to the Adviser, any Sub-Adviser,
______________ (the "DISTRIBUTOR") (or any other
principal underwriter to the Trust) or an affiliated
person of either the Trust, the Adviser, Sub-Adviser,
or the Distributor (or such other principal
underwriter) unless permitted by an order of the SEC
or applicable rules. In executing portfolio
transactions for the Fund, the Adviser may, but shall
not be obligated to, to the extent permitted by
applicable laws and regulations, aggregate the
securities to be sold or purchased with those of its
other clients where such aggregation is not
inconsistent with the policies set forth in the
Trust's registration statement. In such event, the
Adviser will allocate the securities so purchased or
sold, and the expenses incurred in the transaction,
in the manner it considers to be the most equitable
and consistent with its fiduciary obligations to the
Fund and such other clients;
(f) will maintain all books and records with respect to
the securities transactions for the Fund and furnish
the Trust's Board of Trustees such periodic and
special reports as the Board may reasonably request;
and
(g) will treat confidentially and as proprietary
information of the Trust all records and other
information relative to the Fund and prior, present
or potential shareholders, and will not use such
records and information for any purpose other than
performance of its responsibilities and duties
hereunder, except that subject to prompt notification
to the Trust, the Adviser shall have the right to
divulge such information by duly constituted
authorities when requested by such authorities or
when so requested by the Trust; provided, however,
that nothing contained herein shall prohibit the
Adviser from advertising or soliciting the public
generally with respect to the Adviser's services
regardless of whether or not any such advertisement
or solicitation may be directed at prior, present, or
potential shareholders of the Fund.
5. SERVICES NOT EXCLUSIVE. The services furnished by the Adviser
hereunder are deemed not to be exclusive, and the Adviser shall be free to
furnish similar services to others so long as its services under this Agreement
are not impaired thereby. It is understood that the advice given or the action
taken by the Adviser under this Agreement may differ from the advice given or
the timing or nature of action taken with respect to other clients of the
Adviser, and that a transaction in a specific security might not be accomplished
for all clients of the Adviser at the same time or at the same price.
6. BOOKS AND RECORDS. In compliance with the requirements of Rule 31a-3
under the 1940 Act, the Adviser hereby agrees that all records which it
maintains for the Trust are the property of the Trust and further agrees to
surrender promptly to the Trust any of such records upon the Trust's request.
The Adviser further agrees to preserve for the periods bed by Rule 31a-2 under
the 1940 Act the records required to be maintained by Rule 31a-1 under the 1940
Act.
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<PAGE> 5
7. EXPENSES. During the term of this Agreement, the Adviser will pay
all expenses incurred by it in connection with its activities under this
Agreement other than the cost of securities (including brokerage commissions, if
any) purchased for the Fund.
8. COMPENSATION. For the services provided and the expenses assumed
pursuant to this Agreement, the Trust will pay the Adviser from the assets
belonging to the Fund and the Adviser will accept as full compensation therefor
fees, computed daily and paid monthly, at the annual rate of one/one-hundredth
of one percent (.01%) of the average daily net assets of the Fund.
9. LIMITATION OF LIABILITY. The Adviser shall not be liable for any
error of judgment or mistake of law or for any loss suffered by the Trust and
the Fund or either of them in connection with the performance of this Agreement,
except a loss resulting from a breach of fiduciary duty with respect to the
receipt of compensation for services or a loss resulting from willful
misfeasance, bad faith or gross negligence on the part of the Adviser in the
performance of its duties or from reckless disregard by it of its obligations
and duties under this Agreement.
10. DURATION AND TERMINATION. This Agreement will become effective with
respect to the Fund upon approval of this Agreement by vote of a majority of the
outstanding voting securities of the Fund, and, unless sooner terminated as
provided herein, shall continue in effect until __________________, 20___.
Thereafter, if not terminated, this Agreement shall continue in effect for
successive twelve month periods ending on _____________________, provided such
continuance is specifically approved at least annually (a) by the vote of a
majority of those members of the Trust's Board of Trustees who are not
interested persons of any party to this Agreement, cast in person at a meeting
called for the purpose of voting on such approval, and (b) by either (i) the
Trust's Board of Trustees or (ii) by the vote of a majority of the outstanding
voting securities of the Fund. Notwithstanding the foregoing, this Agreement may
be terminated at any time, without the payment of any penalty, by the Trust (by
the Trust's Board of Trustees or by vote of a majority of the outstanding voting
securities of the Fund) by the giving of (60) days' prior written notice to the
Adviser, or by the Adviser by the giving of at least 60 days' prior written
notice to the Trust. This Agreement will immediately terminate in the event of
its assignment. As used in this Agreement, the terms "majority of the
outstanding voting securities," "interested persons" and "assignment" shall have
the same meaning of such terms in the 1940 Act.
11. AMENDMENT OF THIS AGREEMENT. No provision of this Agreement may be
changed, waived, discharged or terminated orally, except by an instrument in
writing signed by the party against which enforcement of the change, waiver,
discharge or termination is sought. No amendment of this Agreement shall be
effective with respect to the Fund until approved by vote of a majority of the
outstanding voting securities of the Fund. The substitution of any investment
adviser in lieu of any entity acting as the "Adviser" hereunder shall be deemed
not to constitute an amendment of this Agreement if such substitution would not
be an assignment by reason of Rule 2a-6 under the 1940 Act or any successor to
such Rule as such Rule or successor is in effect at the time of the
substitution.
-5-
<PAGE> 6
12. MISCELLANEOUS. The captions in this Agreement are included for
convenience of reference only and in no way define or delimit any of the
provisions hereof 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 and shall be
governed by the law (excluding conflict of laws rules) of the State of Ohio.
13. NAMES. The names "__________________ FUNDS" and "Trustees of
__________________ FUNDS" 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 which is hereby referred to and a copy of
which is on file at the office of the State Secretary of the Commonwealth of
Massachusetts and the principal office of the Trust. The obligations of
"__________________ FUNDS" 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.
14. NOTICES AND OTHER COMMUNICATIONS. Each notice, demand, or other
communication to a party pursuant to this Agreement shall be in writing and
shall be deemed received by that party upon the earliest to occur of
(a) the date of that party's actual receipt thereof,
regardless of the method of delivery;
(b) the date upon which a copy of that notice, demand, or
other communication, as the case may be, shall have
been transmitted to the telecopier number set forth
opposite that party's signature below (or any other
telecopier number of which that party shall have
given notice to the other parties to this Agreement
after the execution and delivery of this Agreement),
whether or not actually received by that party; or
(c) the fifth (5th) day following the date upon which
that notice, demand, or other communication, as the
case may be, shall have been mailed by certified or
registered mail to that party at the address of that
party set forth opposite that party's signature below
(or any other address of which that party shall have
given notice to the other parties to this Agreement
after the execution and delivery of this Agreement),
whether or not actually received by that party.
-6-
<PAGE> 7
IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed by their officers designated below as of the day and year first
above written.
Address:
----------------------------------
By:
-------------------------------
Telecopier: Title:
----------------------------
Address: National City Investment Management
1900 East Ninth Street, Loc. No. 2220 Company
Cleveland, Ohio 44114
Attn: By:
Telecopier: (216) 575- -------------------------------
Title:
----------------------------
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<PAGE> 1
EXHIBIT (e)(2)
DISTRIBUTION AGREEMENT
This Agreement entered into as of this 14th day of December, 1999, by
and between Financial Investors Trust, a Delaware business trust having its
principal place of business at 370 17th Street, Suite 3100, Denver, Colorado
80202 (the "Trust") and ALPS Mutual Funds Services, Inc., a Colorado corporation
having its principal place of business at 370 17th Street, Suite 3100, Denver,
Colorado 80202 (the "Distributor").
WHEREAS, the Trust wishes to employ the services of the Distributor in
connection with the promotion and distribution of the Trust's shares of
beneficial interest of the U.S. Treasury Money Market Fund, U.S. Government
Money Market Fund and any other Funds offered by the Trust as listed on Schedule
A, attached hereto (the "Funds");
NOW, THEREFORE, in consideration of the foregoing and the mutual
promises and covenants herein contained, the parties agree as follows:
1. Services as Distributor
1.1 The Distributor 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 the Distributor 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) In consideration of these rights granted to the Distributor, the
Distributor agrees to use its best efforts, consistent with its other business,
to solicit orders for the sale of Shares. This shall not prevent the Distributor
from entering into like arrangements (including arrangements involving the
payment of underwriting commissions) with other issuers. The Distributor, at its
expense, shall finance appropriate activities which it deems 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, the
Distributor 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 the Distributor
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 and/or Statements
of Additional Information), plus a sales charge (if any) described in the
Trust's current Prospectuses and/or Statements of Additional Information. The
Trust shall in all cases receive the net asset value per share on all shares. If
a sales charge is in effect, the Distributor shall have the right, subject to
such rules or regulations of the Securities and Exchange Commission as may then
be in effect pursuant to Section 22 of the Investment Company Act of 1940, as
amended, (the "1940 Act") to pay a portion of the sales charge to dealers who
have sold
<PAGE> 2
shares of the Trust. If a fee in connection with shareholder redemptions is in
effect, the Trust shall collect the fee on behalf of the Distributor and, unless
otherwise agreed upon by the Trust and the Distributor, the Distributor shall be
entitled to receive all of such fees. The offering price, if not an exact
multiple of one cent, shall be adjusted to the nearest cent.
1.2(c) This Agreement shall apply to unissued shares of the Trust,
shares of the Trust held in its treasury in the event that in the discretion of
the Trust, treasury shares shall be sold, and shares of the Trust repurchased
for resale.
1.3 The Distributor 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. THE DISTRIBUTOR SHALL NOT MAKE OFFERS OF SALE OF SHARES IN ANY
STATE UNLESS THE DISTRIBUTOR HAS 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 December 14, 1999, by and between the Trust and the Distributor (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 the Distributor 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. the
Distributor shall pay all expenses connected with its own qualification as a
broker under State or Federal laws and, except as otherwise specifically
provided in this agreement, all other expenses incurred by the Distributor in
connection with the sale of shares as contemplated in this agreement.
1.7 The Trust shall furnish the Distributor from time to time, for use
in connection with the sale of shares, such information with respect to the
Trust and the shares as the Distributor may reasonably request, and the Trust
warrants that the statements contained in any
2
<PAGE> 3
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 the Distributor 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 the Distributor may reasonably request.
1.8 The Trust represents to the Distributor 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 the Distributor that any registration statement 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 the Distributor to do so, the Distributor may, at its
option, terminate this agreement. The Trust shall not file any amendment to any
registration statement or supplement to any prospectus without giving the
Distributor 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 the Distributor to use any prospectus in the
form furnished to the Distributor from time to time, in connection with the sale
of shares. The Trust agrees to indemnify, defend and hold the Distributor, its
several officers and directors, and any person who controls the Distributor
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)
3
<PAGE> 4
which the Distributor, its 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 the Distributor, its 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 the Distributor and used in
the preparation thereof; and provided further that the Trust's agreement to
indemnify the Distributor 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 the Distributor would otherwise be subject by reason of
willful misfeasance, bad faith or gross negligence in performance of its duties,
or by reason of its reckless disregard of its obligations and duties under this
agreement. The Trust's agreement to indemnify the Distributor, its officers and
directors, and any such controlling person, as aforesaid, is expressly
conditioned upon the Trust's being notified of any action brought against the
Distributor, its officers and directors, or any such controlling person, such
notification to be given by letter or by 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 the
Distributor. 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 the
Distributor, 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 the Distributor
does not reasonably approve of counsel chosen by the Trust, the Trust will
reimburse the Distributor, its 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 the Distributor 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
the Distributor, its officers and directors, and their respective estates, and
to the benefit of any controlling persons and their successors. The Trust agrees
promptly to notify the Distributor 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 The Distributor agrees 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,
4
<PAGE> 5
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 the Distributor to the Trust, or necessary to
make such information not misleading. the Distributor's 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 the Distributor at
its principal office within ten days after the summons or other first legal
process shall have been served. The Distributor shall have the right to control
the defense of such action with counsel of its own choosing, satisfactory to the
Trust, if such action is based solely upon such alleged misstatement or omission
on the Distributor's 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 the Distributor of any such action shall not relieve the Distributor from
any liability which the Distributor 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.
1.11 No shares shall be offered by either the Distributor 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 The Distributor 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
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<PAGE> 6
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 December 14, 2000, 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.
3. Miscellaneous
3.1 Other Work. The Trust recognizes that from time to time the
Distributor's 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 the Distributor or its affiliates may
enter into investment advisory or other agreements with such other corporations
and trusts.
3.2 Limitation of Liability of the Trustees and Shareholders. 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 Amendments. 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.
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<PAGE> 7
3.4 Modification. No provision of this agreement may be modified,
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 Governing Law. This agreement shall be governed and construed in
accordance with the laws of the State of Colorado.
3.6 Assignment. This agreement shall not be assigned by a party without
the prior written consent of the other party.
3.7 Headings. The titles and headings herein have been inserted for
convenience only and are not to be considered when interpreting the provisions
of this Agreement.
3.8 Waiver. The waiver by either party of a breach of any of the
covenants, provisions, or conditions herein contained shall not operate or be
construed as a waiver of any subsequent breach.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized representatives and to be effective as of the
date first above written.
FINANCIAL INVESTORS TRUST
By:
-------------------------
ALPS Mutual Funds Services
By:
-------------------------
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<PAGE> 8
FINANCIAL INVESTORS TRUST
DISTRIBUTION AGREEMENT DATED DECEMBER 14, 1999
SCHEDULE A
Aristata Equity Fund
Aristata Quality Bond Fund
Aristata Colorado Quality Tax-Exempt Bond Fund
Prime Money Market Fund
U.S. Treasury Money Market Fund
U.S. Government Money Market Fund
United Association S&P 500 Index Fund
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<PAGE> 1
EXHIBIT (e)(3)
AMENDED AND RESTATED
ADMINISTRATION AGREEMENT
December 14, 1999
ALPS Mutual Funds Services, Inc.
370 Seventeenth Street
Suite 3100
Denver, Colorado 80202
Dear Sirs:
Financial Investors Trust, a Delaware business trust (the "Trust"),
herewith confirms its agreement with ALPS Mutual Funds Services, Inc. ("ALPS")
as follows:
WHEREAS, the Trust desires to employ the capital of its U.S. Treasury Money
Market Fund, 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;
WHEREAS, the Trust desires to employ ALPS as its administrator for the Funds;
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;
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;
WHEREAS, the Trust and ALPS wish to amend and restate their Amended and Restated
Administration Agreement dated as of January 20, 1998 by adding the UA 500 Index
Fund to the Agreement as set forth on Schedule C, attached hereto and made a
part hereof;
NOW THEREFORE, in consideration of the mutual covenants set forth herein, the
parties hereto agree as follows:
<PAGE> 2
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 the schedules attached
hereto with respect to the Funds set forth in each such Schedule.
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 the schedules
attached hereto 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 December 14, 1999, and unless sooner terminated as
provided herein, shall continue until December 14, 2000 (the "Initial Term").
Thereafter, this Agreement shall continue automatically with respect to the
Trust for successive annual periods ending December 14 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
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<PAGE> 3
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
days written 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 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 written
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, substantially impairs the performance of ALPS' obligations and duties
hereunder.
6. Governing Law:
This Agreement shall be governed by, and construed and enforced in
accordance with, the laws of the State of Colorado without regard to conflicts
of law principles.
7. Other Provisions
The Trust recognizes that from time to time directors, officers and
employees of ALPS may serve as directors, officers and employees of other
corporations or business trusts (including other investment companies) and that
such other corporations and trusts may include ALPS as part of their name and
that ALPS or its affiliates may enter into administration or other agreements
with such other corporations and trusts.
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<PAGE> 4
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 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
---------------------------
Name: W. Robert Alexander
Title: Chairman
Accepted:
ALPS MUTUAL FUNDS SERVICES, INC.
By
---------------------------
Name: Edmund J. Burke
Title: Executive Vice President
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<PAGE> 5
SCHEDULE A
U.S. TREASURY MONEY MARKET FUND
U.S. GOVERNMENT 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 . (Bob Alexander will serve as trustee at no
compensation.); (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; and
(v) perform corporate secretarial services. The selected sales force is subject
to review and approval by ALPS.
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.
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<PAGE> 6
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
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.
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.
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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; (p) 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; (q) payment of trustee fees ;
(r) act as principal underwriter and distributor of the Funds' securities
pursuant to a Distribution Agreement; and (s) perform corporate secretarial
services.
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
7
<PAGE> 8
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.
8
<PAGE> 9
SCHEDULE C
UA S&P 500 INDEX 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 Fund's 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 Fund of all federal and state tax returns and required tax filings
other than those required to be made by the Fund's custodian; (e) prepare
compliance filings pursuant to state securities laws with the advice of the
Trust's counsel; (f) coordinate the preparation of Annual and Semi-Annual
Reports to the Fund's shareholders and Registration Statements for the Fund (on
Form N-1A or any replacement therefor); (g) monitor the Fund's expense accruals
and direct payment of all fund expenses on proper authorization from the Fund;
(h) monitor the Fund's 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 bond as required by the 1940 Act; (j) on a monthly
basis, monitor compliance with the policies and limitations of the Fund, as set
forth in the Prospectus, Statement of Additional Information, Code of
Regulations and Declaration of Trust; (k) perform fund accounting and pricing as
set out in the "Bookkeeping and Pricing Agreement"; (l) perform Transfer Agency
as set out in the "Transfer Agency Agreement" and 800-line servicing; (m) cover
the costs of external audit and tax work performed by an accounting firm
determined by ALPS; (n) monitor and cover the costs of Securities and Exchange
Commission registration fees; (o) cover all costs and coordinate printing of the
Prospectus, Semi-Annual Report, Annual Report, the Statement of Additional
Information and the account applications; (p) pay the trustee fees for the
non-interested trustees; (q) act as principal underwriter and distributor of the
Fund's securities pursuant to the Distribution Agreement; and (r) perform
corporate secretarial services.
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. Expenses of the Trust
It is understood that ALPS will pay all of the Trust's expenses other
than those expressly stated to be payable by the Trust hereunder. The expenses
payable by the Trust shall include: (i) advisory fees; (ii) custody fees; (iii)
interest and taxes; (iv) such non-recurring or extraordinary expenses as may
arise, including those relating to actions, suits or proceedings to which the
Trust is a party and the legal obligation which the Trust is a party; and (v)
fees and expenses of the Trust pursuant to a plan adopted by the Trust under
Rule 12b-1 of the 1940 Act.
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<PAGE> 10
3. Fees; Delegation; Expenses
In consideration of services rendered pursuant to this Agreement, the
Bookkeeping and Pricing Agreement, the Transfer Agency Agreement, and all other
services described herein, the Fund will pay ALPS a fee, computed daily and
payable monthly, at the following annual rate of average daily net assets of the
Fund:
<TABLE>
<CAPTION>
UA 500
Index Fund
----------
<S> <C>
First $500 Million .12%
Next $500 Million .085%
Next $1.5 Billion .06%
In Excess of $2.5 Billion .04%
</TABLE>
The fee for the period from the day of the month that the Fund begins
operations, 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.
10
<PAGE> 1
EXHIBIT (g)(3)
CUSTODIAN SERVICES AGREEMENT
This Agreement is made as of _________________________ by and between
NATIONAL CITY BANK (the "Custodian") and FINANCIAL INVESTORS TRUST, a
Massachusetts business trust (the "Fund").
The Fund is registered as an open-end management investment company
under the Investment Company Act of 1940, as amended (the "1940 Act"). The Fund
wishes to retain the Custodian to provide custodian services to one its
investment portfolios, as listed on Exhibit A attached hereto and as such
Exhibit A may be amended from time to time (the "Portfolio"), and the Custodian
wishes to furnish custodian services, either directly or though an affiliate or
affiliates, as more fully described herein.
In consideration of the promises and mutual covenants herein contained,
the parties agree as follows:
1. Definitions.
(a) "Authorized Person" shall mean any officer of the Fund and any
other person, who is duly authorized by the Fund's Board of Trustees, to give
Oral and Written Instructions on behalf of the Fund. Such persons are listed in
the Certificate attached hereto as the Authorized Persons Appendix as such
appendix may be amended in writing by the Fund's Board of Trustees from time to
time.
(b) "Book-Entry System" shall mean Federal Reserve Treasury
book-entry system for United States and federal agency securities, its successor
or successors, and its nominee or nominees and any book-entry system maintained
by an exchange registered with the SEC under the 1934 Act.
(c) "CFTC" shall mean the Commodities Futures Trading Commission.
(d) "Oral Instructions" shall mean oral instructions received by the
Custodian from an Authorized Person or from a person reasonably believed by the
Custodian to be an Authorized Person.
(e) "Custodian" shall mean National City Bank or a subsidiary or
affiliate of National City Bank.
(f) "SEC" shall mean the Securities and Exchange Commission.
(g) "Securities and Commodities Laws" shall mean the Securities Act
of 1933, as amended (the "1933 Act"), the Securities Exchange Act of 1934, as
amended
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<PAGE> 2
(the "1934 Act"), the 1940 Act, and the Commodities Exchange Act, as amended
(the "CEA").
(h) "Shares" shall mean the units of beneficial interest of the
Fund.
(i) "Property" shall mean:
(i) any and all securities and other investment items which
the Fund may from time to time deposit, or cause to be
deposited, with the Custodian or which the Custodian may
from time to time hold for any Portfolio;
(ii) all income in respect of any of such securities or other
investment items;
(iii) all proceeds of the sale of any of such securities or
investment items; and
(iv) all proceeds of the sale of securities issued by the
Fund, which are received by the Custodian from time to
time, from or on behalf of the Fund.
(j) "Written Instructions" shall mean written instructions signed by
one Authorized Person and received by the Custodian. The instructions may be
delivered by hand, mail, tested telegram, cable, telex or facsimile sending
device.
2. Appointment. The Fund hereby appoints the Custodian to provide
custodian services to the Portfolio and the Custodian accepts such appointment
and agrees to furnish such services.
3. Delivery of Documents. The Fund has provided or, where applicable,
will provide the Custodian with the following:
(a) certified or authenticated copies of the resolutions of the
Fund's Board of Trustees, approving the appointment of the
Custodian or its affiliates to provide services;
(b) a copy of the Fund's most recent effective registration
statement;
(c) a copy of the Portfolio's advisory agreement or agreements;
(d) a copy of the Portfolio's distribution agreement or
agreements;
2
<PAGE> 3
(e) a copy of the Portfolio's transfer agency agreement or
agreements;
(f) copies of any shareholder servicing agreements made in respect
of the Fund or the Portfolio; and
(g) certified or authenticated copies of any and all amendments or
supplements to the foregoing.
4. Compliance with Government Rules and Regulations. The Custodian
undertakes to comply with all applicable requirements of the 1933 Act, the 1934
Act, the 1940 Act, and the CEA, and any laws, rules and regulations of
governmental authorities having jurisdiction with respect to all duties to be
performed by the Custodian hereunder. Except as specifically set forth herein,
the Custodian assumes no responsibility for such compliance by the Fund.
5. Instructions. Unless otherwise provided in this Agreement, the
Custodian shall act only upon Oral and Written Instructions. The Custodian shall
be entitled to rely upon any Oral and Written Instructions it receives from an
Authorized Person (or from a person reasonably believed by the Custodian to be
an Authorized Person) pursuant to this Agreement. The Custodian may assume that
any Oral or Written Instructions received hereunder are not in any way
inconsistent with the provisions of organizational documents of the Fund or of
any vote, resolution or proceeding of the Fund's Board of Trustees or of the
Fund's shareholders.
The Fund agrees to forward to the Custodian Written Instructions
confirming Oral Instructions so that the Custodian receives the Written
Instructions by the close of business on the same day that such Oral
Instructions are received. The fact that such confirming Written Instructions
are not received by the Custodian shall in no way invalidate the transactions or
enforceability of the transactions authorized by the Oral Instructions.
The Fund further agrees that the Custodian shall incur no liability to
the Fund or the Portfolio in acting upon Oral or Written Instructions provided
such instructions reasonably appear to have been received from an Authorized
Person.
6. Right to Receive Advice.
(a) Advice of the Fund. If the Custodian is in doubt as to any
action it should or should not take, the Custodian may request directions or
advice, including Oral or Written Instructions, from the Fund.
(b) Advice of Counsel. If the Custodian shall be in doubt as to any
questions of law pertaining to any action it should or should not take, the
Custodian may request advice at its own cost from such counsel of its own
choosing (who may be counsel for the Fund, the Fund's adviser or the Custodian,
at the option of the Custodian).
3
<PAGE> 4
(c) Conflicting Advice. In the event of a conflict between
directions, advice or Oral or Written Instructions the Custodian receives from
the Fund, and the advice it receives from counsel, the Custodian shall be
entitled to rely upon and follow the advice of counsel.
(d) Protection of the Custodian. The Custodian shall be protected in
any action it takes or does not take in reliance upon directions, advice or Oral
or Written Instructions it receives from the Fund or from counsel and which the
Custodian believes, in good faith, to be consistent with those directions,
advice or Oral or Written Instructions.
Nothing in this paragraph shall be construed so as to impose an
obligation upon the Custodian (i) to seek such directions, advice or Oral or
Written Instructions, or (ii) to act in accordance with such directions, advice
or Oral or Written Instructions unless, under the terms of other provisions of
this Agreement, the same is a condition of the Custodian's properly taking or
not taking such action.
7. Records. The books and records pertaining to the Fund and the
Portfolio, which are in the possession of the Custodian, shall be the property
of the Fund. Such books and records shall be prepared and maintained as required
by the 1940 Act and other applicable securities laws, rules and regulations. The
Fund, or the Fund's authorized representatives, shall have access to such books
and records at all times during the Custodian's normal business hours. Upon the
reasonable request of the Fund, copies of any such books and records shall be
provided by the Custodian to the Fund or to an authorized representative of the
Fund, at the Fund's expense.
8. Confidentiality. The Custodian agrees to keep confidential all
records of the Fund and the Portfolio and information relative to the Fund, the
Portfolio and the shareholders (past, present and potential), unless the release
of such records or information is otherwise consented to, in writing, by the
Fund. The Fund further agrees that, should the Custodian be required to provide
such information or records to duly constituted authorities (who may institute
civil or criminal contempt proceedings for failure to comply), the Custodian
shall not be required to seek the Fund's consent prior to disclosing such
information; provided that the Custodian gives the Fund prior written notice of
the provision of such information and records.
9. Cooperation with Accountants. The Custodian shall cooperate with the
fund's independent public accountants and shall take all reasonable action in
the performance of its obligations under this Agreement to ensure that the
necessary information is made available to such accountants for the expression
of their opinion, as required by the Fund.
10. Disaster Recovery. The Custodian shall enter into and shall
maintain in effect with appropriate parties one or more agreements making
reasonable provision for emergency use of electronic data processing equipment
to the extent appropriate equipment is available. In the event of equipment
failures, the Custodian shall, at no additional expense to
4
<PAGE> 5
the Fund, take reasonable steps to minimize service interruptions but shall have
no liability with respect thereto unless such failures result from the
Custodian's own willful misfeasance, bad faith, gross negligence, negligence or
reckless disregard of its duties and obligations under this Agreement.
11. Compensation. As compensation for custody services rendered by the
Custodian during the term of this Agreement, the Fund will pay to the Custodian
a fee or fees as may be agreed to in writing from time to time by the Fund and
the Custodian.
12. Indemnification. The Fund, on behalf of the Portfolio, agrees to
indemnify and hold harmless the Custodian and its nominees from all taxes,
charges, expenses, assessments, claims and liabilities (including, without
limitation, liabilities arising under the 1933 Act, the 1934 Act, the 1940 Act,
the CEA, and any state and foreign securities and blue sky laws, and amendments
thereto), and expenses, including (without limitation) reasonable attorneys'
fees and disbursements, arising directly or indirectly from any action which the
Custodian takes or does not take (i) at the request or on the direction of or in
reliance on the advice of the Fund or (ii) upon oral or Written Instructions.
Neither the Custodian, nor any of its nominees, shall be indemnified against any
liability to the Fund or to its shareholders (or any expenses incident to such
liability) arising out of the Custodian's or its nominees' own willful
misfeasance, bad faith, negligence or reckless disregard of its duties and
obligations under this Agreement.
In the event of any advance of cash for any purpose made by the
Custodian resulting from Oral or Written Instructions of the Fund, or in the
event that the Custodian or its nominee shall incur or be assessed any taxes,
charges, expenses, assessments, claims or liabilities in respect of the Fund or
the Portfolio in connection with the performance of this Agreement, except such
as may arise from its or its nominee's own negligent action, negligent failure
to act or willful misconduct, any Property at any time held for the account of
the Portfolio or the Fund shall be security therefor.
13. Responsibility of the Custodian. The Custodian shall be under no
duty to take any action on behalf of the Fund except as specifically set forth
herein or as may be specifically agreed to by the Custodian, in writing. The
Custodian shall be obligated to exercise care and diligence in the performance
of its duties hereunder, to act in good faith and to use its best efforts,
within reasonable limits, in performing Services provided for under this
Agreement. The Custodian shall be responsible for its own or its nominees'
(including without limitation foreign sub-custodians approved by the Fund) own
willful misfeasance, bad faith, negligence or reckless disregard of its duties
and obligations under this Agreement or the Custodian's own negligent failure to
perform its duties under this Agreement. Notwithstanding the foregoing, the
Custodian shall not be responsible for losses beyond its control, provided that
the Custodian has acted in accordance with the standard of care set forth above;
and provided further that the Custodian shall only be responsible for that
portion of losses or damages suffered by the Fund or the Portfolio attributable
to the negligence of the Custodian.
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<PAGE> 6
Without limiting the generality of the foregoing or of any other
provision of this Agreement, the Custodian, in connection with its duties under
this Agreement, shall not be under any duty or obligation to inquire into and
shall not be liable for (a) the validity or invalidity or authority or lack
thereof of any Oral or Written Instruction, notice or other instrument which
conforms to the applicable requirements of this Agreement, and which the
Custodian reasonably believes to be genuine; or (b) delays or errors or loss of
data occurring by reason of circumstances beyond the Custodian's control,
including acts of civil or military authority, national emergencies, fire, flood
or catastrophe, acts of God, insurrection, war, riots or failure of the mails,
transportation, communication or power supply, nor shall the Custodian be under
any duty or obligation to ascertain whether any Property at any time delivered
to or held by the Custodian may properly be held by or for the Fund or the
Portfolio. Notwithstanding the foregoing, the Custodian shall use its best
efforts to mitigate the effects of the events in clause (b) above, although such
efforts shall not impute any liability thereto.
14. Description of Services.
(a) Delivery of the Property. The Fund will deliver or arrange for
delivery to the Custodian, all the property it owns, including cash received as
a result of the distribution of its Shares, during the period that is set forth
in this Agreement. The Custodian will not be responsible for such property until
actual receipt.
(b) Receipt and Disbursement of Money. The Custodian, acting upon
Written Instructions, shall open and maintain a separate account in the name of
the Fund on behalf of the Portfolio using all cash received from or for the
account of the Portfolio, subject to the terms of this Agreement.
The Custodian shall make cash payments to or from the account of the
Portfolio only for:
(i) purchases of securities in the name of the Portfolio or
the Custodian or the Custodian's nominee as provided in
sub-paragraph j and for which the Custodian has received
a copy of the broker's or dealer's confirmation or
payee's invoice, as appropriate;
(ii) purchase or redemption of Shares of the Fund delivered
to the Custodian;
(iii) payment of, subject to Written Instructions, interest,
dividends, taxes, administration, accounting,
distribution, advisory, management fees or similar
expenses which are to be borne by the Fund or the
Portfolio;
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<PAGE> 7
(iv) payment to, subject to receipt of Written Instructions,
the Fund's transfer agent, as agent for the
shareholders, an amount equal to the amount of dividends
and distributions stated in the Written Instructions to
be distributed in cash by the transfer agent to
shareholders, or, in lieu of paying the Fund's transfer
agent, the Custodian may arrange for the direct payment
of cash dividends and distributions to shareholders in
accordance with procedures mutually agreed upon from
time to time by and among the Fund, the Custodian and
the Fund's transfer agent;
(v) payments, upon receipt of Written Instructions, in
connection with the conversion, exchange or surrender of
securities owned or subscribed to by the Portfolio and
held by or delivered to the Custodian;
(vi) payments of the amounts of dividends received with
respect to securities sold short;
(vii) payments made to a sub-custodian pursuant to provisions
in subparagraph c of this Paragraph 14; and
(viii) payments, upon Written Instructions made for other
proper Fund purposes.
The Custodian is hereby authorized to endorse and collect all checks,
drafts or other orders for the payment of money received as custodian for the
account of the Fund or the Portfolio.
(c) Receipt of Securities.
(i) The Custodian shall hold all securities and non cash
property received by it for the account of the Portfolio
in a separate account that physically segregates such
securities from those of any other portfolios, persons,
firms or corporations. All such securities and property
shall be held or disposed of only upon Written
Instructions of the Fund pursuant to the terms of this
Agreement. The Custodian shall have no power or
authority to withdraw, deliver, assign, hypothecate,
pledge or
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<PAGE> 8
otherwise dispose of any such securities or investment,
except upon the express terms of this Agreement and upon
Written Instructions, accompanied by a certified
resolution of the Fund's Board of Trustees, authorizing
the transaction. In no case may any member of the Fund's
Board of Trustees, or any officer, employee or agent of
the Fund withdraw any securities.
(ii) At the Custodian's own expense and for its own
convenience, the Custodian may enter into sub-custodian
agreements with other United States banks or trust
companies to perform duties described in this
sub-paragraph c. Such bank or trust company shall have
an aggregate capital, surplus and undivided profits,
according to its last published report, of at least one
million dollars ($1,000,000), if it is a subsidiary or
affiliate of the Custodian, or at least twenty million
dollars ($20,000,000) if such bank or trust company is
not a subsidiary or affiliate of the Custodian. In
addition, the Fund may authorize the Custodian to employ
one or more sub-custodians for the Fund's securities and
other assets maintained outside the United States. Any
such domestic or foreign sub-custodian must be qualified
to act as custodian and agree to comply with the
relevant provisions of the 1940 Act and applicable rules
and regulations. No such arrangement will be entered
into without prior written approval of the Fund.
(iii) The Custodian shall remain responsible for the
performance of all of its duties as described in this
Agreement and shall be liable to the Fund for, and shall
indemnify and hold the Fund and the Portfolio harmless
from, its own acts or omissions and those of any
domestic or foreign sub-custodian, under the standards
of care provided for herein.
(iv) The Fund may appoint or request the Custodian to appoint
certain sub-custodians with respect to (including but
not limited to) the facilitation of three party
repurchase agreements. In such an event, the Custodian
shall not be responsible for
8
<PAGE> 9
the performance or actions and omissions of any such
sub-custodian.
(d) Transactions Requiring Instructions. Upon receipt of Oral or
Written Instructions and not otherwise, the Custodian, directly or through the
use of the Book-Entry System, shall:
(i) deliver any securities held for the Portfolio against
the receipt of payment for the sale of such securities;
(ii) execute and deliver to such persons as may be designated
in such Oral or Written Instructions, proxies, consents,
authorizations, and any other instruments whereby the
authority of the Portfolio as owner of any securities
may be exercised;
(iii) deliver any securities to the issuer thereof, or its
agent, when such securities are called, redeemed,
retired or otherwise become payable; provided that, in
any such case, the cash or other consideration is to be
delivered to the Custodian;
(iv) deliver any securities held for the Portfolio against
receipt of other securities or cash issued or paid in
connection with the liquidation, reorganization,
refinancing, tender offer, merger, consolidation or
recapitalization of any corporation, or the exercise of
any conversion privilege;
(v) deliver any securities held for the Portfolio to any
protective committee, reorganization committee or other
person in connection with the reorganization,
refinancing, merger, consolidation, recapitalization or
sale of assets of any corporation, and receive and hold
under the terms of this Agreement such certificates of
deposit, interim receipts or other instruments or
documents as may be issued to it to evidence such
delivery;
(vi) make such transfer or exchanges of the assets of the
Fund and take such other steps as shall be stated in
said Oral or Written Instructions to be for the purpose
of effectuating a duly authorized plan of liquidation,
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<PAGE> 10
reorganization, merger, consolidation or
recapitalization of the Fund;
(vii) release securities belonging to the Portfolio to any
bank or trust company for the purpose of a pledge or
hypothecation to secure any loan incurred by the
Portfolio; provided, however, that securities shall be
released only upon payment to the Custodian of the
monies borrowed, except that in cases where additional
collateral is required to secure a borrowing already
made subject to proper prior authorization, further
securities may be released for that purpose; and repay
such loan upon redelivery to it of the securities
pledged or hypothecated therefor and upon surrender of
the note or notes evidencing the loan;
(viii) release and deliver securities owned by the Portfolio in
connection with any repurchase agreement entered into on
behalf of the Fund, but only on receipt of payment
therefor; and pay out moneys of the Portfolio in
connection with such repurchase agreements, but only
upon the delivery of the securities;
(ix) release and deliver or exchange securities owned by the
Portfolio in connection with any conversion of such
securities, pursuant to their terms, into other
securities;
(x) release and deliver securities owned by the Portfolio
for the purpose of redeeming in kind shares of the Fund
upon delivery thereof to the Custodian; and
(xi) release and deliver or exchange securities owned by the
Portfolio for other corporate purposes.
The Custodian must also receive a certified resolution
describing the nature of the corporate purpose and the
name and address of the person(s) to whom delivery shall
be made when such action is pursuant to sub-paragraph d.
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<PAGE> 11
(e) Use of Book-Entry System. The Fund shall deliver to the
Custodian certified resolutions of the Fund's Board of Trustees approving,
authorizing and instructing the Custodian on a continuous and on-going basis, to
deposit in the Book-Entry System all securities belonging to the Portfolio
eligible for deposit therein and to utilize the Book-Entry System to the extent
possible in connection with settlements of purchases and sales of securities by
the Portfolio, and deliveries and returns of securities loaned, subject to
repurchase agreements or used as collateral in connection with borrowings. The
Custodian shall continue to perform such duties until it receives Written or
Oral Instructions authorizing contrary actions(s).
To administer the Book-Entry System properly, the following provisions
shall apply:
(i) With respect to securities of the Fund which are
maintained in the Book-Entry system, established
pursuant to this sub-paragraph e hereof, the records of
the Custodian shall identify by Book-Entry or otherwise
those securities belonging to the Portfolio. The
Custodian shall furnish the Fund a detailed statement of
the Property held for the Portfolio under this Agreement
at least monthly and from time to time and upon written
request.
(ii) Securities and any cash of the Portfolio deposited in
the Book-Entry System will at all times be segregated
from any assets and cash controlled by the Custodian in
other than a fiduciary or custodian capacity but may be
commingled with other assets held in such capacities.
The Custodian and its sub-custodian, if any, will pay
out money only upon receipt of securities and will
deliver securities only upon the receipt of money.
(iii) All books and records maintained by the Custodian which
relate to the Fund's participation in the Book-Entry
System will at all times during the Custodian's regular
business hours be open to the inspection of the Fund's
duly authorized employees or agents, and the Fund will
be furnished with all information in respect of the
services rendered to it as it may require.
(iv) The Custodian will provide the Fund with copies of any
report obtained by the Custodian on
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<PAGE> 12
the system of internal accounting control of the
Book-Entry System promptly after receipt of such a
report by the Custodian.
The Custodian will also provide the Fund with such reports on its own
system of internal control as the Fund may reasonably request from time to time.
(f) Registration of Securities. All Securities held for the
Portfolio which are issued or issuable only in bearer form, except such
securities held in the Book-Entry System, shall be held by the Custodian in
bearer form; all other securities held for the Portfolio may be registered in
the name of the Fund on behalf of the Portfolio, the Custodian, the Book-Entry
System, a sub-custodian, or any duly appointed nominees of the Portfolio, the
Custodian, Book-Entry system or sub-custodian. The Fund reserves the right to
instruct the Custodian as to the method of registration and safekeeping of the
securities of the Portfolio. The Fund agrees to furnish to the Custodian
appropriate instruments to enable the Custodian to hold or deliver in proper
form for transfer, or to register its registered nominee or in the name of the
Book-Entry System, any securities which it may hold for the account of the
Portfolio and which may from time to time be registered in the name of the Fund
on behalf of the Portfolio. The Custodian shall hold all such securities which
are not held in the Book-Entry System in a separate account for the Portfolio in
the name of the Fund on behalf of the Portfolio physically segregated at all
times from those of any other person or persons.
(g) Voting and Other Action. Neither the Custodian nor its nominee
shall vote any of the securities held pursuant to this Agreement by or for the
account of the Portfolio, except in accordance with Written Instructions. The
Custodian, directly or through the use of the Book-Entry System, shall execute
in blank and promptly deliver all notice, proxies, and proxy soliciting
materials to the registered holder of such securities. If the registered holder
is not the Fund on behalf of the Portfolio, then Written or Oral Instructions
must designate the person who owns such securities.
(h) Transactions Not Requiring Instructions. In the absence of
contrary Written Instructions, the Custodian is authorized to take the following
actions:
(i) Collection of Income and Other Payments.
(A) collect and receive for the account of the
Portfolio, all income, dividends, distributions,
coupons, option premiums, other payments and
similar items, included or to be included in the
Property, and, in addition, promptly advise the
Fund of such receipt and credit such income, as
collected, to the Portfolio's custodian account;
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<PAGE> 13
(B) endorse and deposit for collection, in the name
of the Portfolio, checks, drafts, or other
orders for the payment of money;
(C) receive and hold for the accounts of the
Portfolio all securities received as a
distribution on the Portfolio's portfolio
securities as a result of a stock dividend,
share split-up or reorganization,
recapitalization, readjustment or other
rearrangement or distribution of rights or
similar securities issued with respect to any
portfolio securities belonging to the Portfolio
held by the Custodian hereunder;
(D) present for payment and collect the amount
payable upon all securities which may mature or
be called redeemed or retired, or otherwise
become payable on the date such securities
become payable; and
(E) take any action which may be necessary and
proper in connection with the collection and
receipt of such income and other payments and
the endorsement for collection of checks,
drafts, and other negotiable instruments.
(ii) Miscellaneous Transactions.
(A) The Custodian is authorized to deliver or cause
to be delivered Property against payment or
other consideration or written receipt therefor,
in the following cases:
(1) for examination by a broker or dealer
selling for the account of the Portfolio
in accordance with street delivery
custom;
(2) for the exchange of interim receipts or
temporary securities for definitive
securities; and
(3) For transfer of securities into name of
the Fund on behalf of the Portfolio or
the Custodian or nominee of either, or
for exchange of securities for a
different
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<PAGE> 14
number of bonds, certificates or other
evidence, representing the same
aggregate face amount or number of units
bearing the same interest rate, maturity
date and call provisions, if any,
provided that, in any such case, the new
securities are to be delivered to the
Custodian.
(B) Unless and until the Custodian receives Oral or
Written instructions to the contrary, the
Custodian shall:
(1) pay all income items held by it which
call for payment upon presentation and
hold the cash received by it upon such
payment for the account of the
Portfolio;
(2) collect interest and cash dividends
received, with notice to the Fund, to
the account of the Portfolio;
(3) hold for the account of the Portfolio
all stock dividends, rights and similar
securities issued with respect to any
securities held by the Custodian; and
(4) execute as agent on behalf of the Fund
all necessary ownership certificates
required by the Internal Revenue Code or
the Income Tax Regulations of the United
States Treasury Department or under the
laws of any State now or hereafter in
effect, inserting the Fund's name on
behalf of the Portfolio on such
certificate as the owner of the
securities covered thereby, to the
extent it may lawfully do so.
(i) Segregated Accounts.
(i) The Custodian shall upon receipt of
Written or Oral Instructions establish
and maintain segregated accounts on its
records for and on behalf of the
Portfolio. Such accounts may be used to
transfer cash and
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<PAGE> 15
securities, including securities in the
Book-Entry System:
(A) for the purposes of compliance by the
Fund with the procedures required by a
securities or option exchange, providing
such procedures comply with the 1940 Act
and any releases of the SEC relating to
the maintenance of segregated accounts
by registered investment companies; and
(B) Upon receipt of Written Instructions,
for other proper corporate purposes.
(ii) The Custodian may enter into separate
custodial agreements with various
futures commission merchants ("FCMs")
that the Fund uses (each an "FCM
Agreement"), pursuant to which the
Fund's margin deposits in any
transactions involving futures contracts
and options on futures contracts will be
held by the Custodian in accounts (each
an "FCM Account") subject to the
disposition by the FCM involved in such
contracts in accordance with the
customer contract between FCM and the
Fund ("FCM Contract"), SEC rules
governing such segregated accounts, CFTC
rules and the rules of the applicable
commodities exchange. Such FCM
Agreements shall only be entered into
upon receipt of Written Instructions
from the Fund which state that (i) a
customer agreement between the FCM and
the Fund has been entered into; and (ii)
the Fund is in compliance with all the
rules and regulations of the CFTC.
Transfers of initial margin shall be
made into an FCM Account only upon
Written Instructions; transfers of
premium and variation margin may be made
into an FCM Account pursuant to Oral
Instructions. Transfers of funds from an
FCM Account to the FCM for which the
Custodian holds such an account may only
occur upon certification
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<PAGE> 16
by the FCM to the Custodian that
pursuant to the FCM Agreement and the
FCM Contract, all conditions precedent
to its right to give the Custodian such
instruction have been satisfied.
(j) Purchases of Securities. The Custodian shall settle purchased
securities upon receipt of Oral or Written Instructions from the Fund or its
investment adviser(s) that specify:
(i) the name of the issuer and the title of
the securities including CUSIP number if
applicable;
(ii) the number of shares or the principal
amount purchased and accrued interest,
if any;
(iii) the date of purchase and settlement;
(iv) the purchase price per unit;
(v) the total amount payable upon such
purchase;
(vi) the name of the person from whom or the
broker through whom the purchase was
made. The Custodian shall upon receipt
of securities purchased by or for the
Portfolio pay out of the moneys held for
the account of the Portfolio the total
amount payable to the person from whom
or the broker through whom the purchase
was made, provided that the same
conforms to the total amount payable as
set forth in such Oral or Written
Instructions; and
(vii) the name of the Portfolio.
(k) Sales of Securities. The Custodian shall settle sold securities
upon receipt of Oral or Written Instructions from the Fund that specify:
(i) the name of the issuer and the title of
the security, including CUSIP number if
applicable;
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<PAGE> 17
(ii) the number of shares or principal amount
sold, and accrued interest, if any;
(iii) the date-of trade and settlement and
sale;
(iv) the sale price per unit;
(v) the total amount payable to the
Portfolio upon such sale;
(vi) the name of the broker through whom or
the person to whom the sale was made;
(vii) the location to which the security must
be delivered and delivery deadline, if
any; and
(viii) the name of the Portfolio involved.
The Custodian shall deliver the securities upon receipt of the
total amount payable to the Portfolio upon such sale, provided that the total
amount payable is the same as was set forth in the Oral or 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.
(1) Reports.
(i) The Custodian shall furnish the Fund the
following reports:
(A) such periodic and special reports as the
Fund may reasonably request;
(B) a monthly statement summarizing all
transactions and entries for the account
of the Portfolio, listing the portfolio
securities belonging to the Portfolio
with the adjusted average cost of each
issue and stating the cash account of
the Portfolio including disbursements;
(C) the reports to be furnished to the Fund
pursuant to Rule 17f-4; and
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<PAGE> 18
(D) such other information as may be agreed
upon from time to time between the Fund
and the Custodian.
(ii) The Custodian shall transmit promptly to
the Fund any proxy statement, proxy
material, notice of a call or conversion
or similar communication received by it
as custodian of the Property. The
Custodian shall be under no other
obligation to inform the Fund as to such
actions or events.
(m) Collections. All collections of monies or other property in
respect, or which are to become part, of the Property (but not the safekeeping
thereof upon receipt by the Custodian) shall be at the sole risk of the Fund. If
payment is not received by the Custodian within a reasonable time after proper
demands have been made, the Custodian shall notify the Fund in writing,
including copies of all demand letters, any written responses, memoranda of all
oral responses and telephonic demands thereto, and await instructions from the
Fund. The Custodian shall not be obliged to take legal action for collection
unless and until reasonably indemnified to its satisfaction. The Custodian shall
also notify the Fund as soon as reasonably practicable whenever income due on
securities is not collected in due course and shall provide the Fund with
periodic status reports of such income uncollected after a reasonable time.
15. Duration and Termination. This Agreement shall continue until
terminated by the Fund or by the Custodian on sixty (60) days, prior written
notice to the other party. In the event this Agreement is terminated (pending
appointment of a successor to the Custodian or vote of the shareholders of the
Fund to dissolve or to function without a custodian of its cash, securities or
other property), the Custodian shall not deliver cash, securities or other
property of the Portfolios to the Fund. It may deliver them to a bank or trust
company of the Custodian's choice, having an aggregate capital, surplus and
undivided profits, as shown by its last published report, of not less than
twenty million dollars ($20,000,000), as a custodian for the Fund to be held
under terms similar to those of this Agreement. The Custodian shall not be
required to make any such delivery or payment until full payment shall have been
made to the Custodian of all of its fees, compensation, costs and expenses. The
Custodian shall have a security interest in and shall have a right of setoff
against property in the Fund's possession as security for the payment of such
fees, compensation, costs and expenses.
16. Notices. All notices and other communications, including Written
Instructions, shall be in writing or by confirming telegram, cable, telex or
facsimile sending device. Notice shall be addressed (a) if to the Custodian, at
the Custodian's address, 1900 East Ninth Street, Cleveland, Ohio 44114, marked
for the attention of the Institutional Trust Custodian Services Department (or
its successor); (b) if to the Fund, at the address of the Fund; or (c) if to
neither of the foregoing, at such other address as shall have been notified to
the
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<PAGE> 19
sender of any such Notice or other communication. If notice is sent by
confirming telegram, cable, telex or facsimile sending device, it shall be
deemed to have been given immediately. If notice is sent by first-class mail, it
shall be deemed to have been given five days after it has been mailed. If notice
is sent by messenger, it shall be deemed to have been given on the day it is
delivered.
17. Amendments. This Agreement, or any term hereof, may be changed or
waived only by a written amendment, signed by the party against whom enforcement
of such change or waiver is sought.
18. Delegation. The Custodian may assign its rights and delegate its
duties hereunder to any wholly-owned direct or indirect subsidiary of National
City Bank, or National City Corporation, provided that (i) the Custodian gives
the Fund thirty (30) days prior written notice; (ii) the delegate agrees with
the Custodian to comply with all relevant provisions of the 1940 Act and this
Agreement; and (iii) the Custodian and such delegate promptly provide such
information as the Fund may request, and respond to such questions as the Fund
may ask, relative to the delegation, including (without limitation) the
capabilities of the delegate.
19. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
20. Further Actions. Each party agrees to perform such further acts and
execute such further documents as are necessary to effectuate the purposes
hereof.
21. Miscellaneous. The Custodian acknowledges that the Fund is a
Massachusetts business trust, and that it is required by the Declaration to
limit its liability in all agreements to the assets of the Fund. Consequently,
the Custodian agrees that any claims by it against the Fund may be satisfied
only from the assets of the Fund, and no shareholders, trustees or officers of
the Fund may be held personally liable or responsible for any obligations
arising out of this Agreement. This Agreement embodies the entire agreement and
understanding between the parties and supersedes all prior agreements and
understandings relating to the subject matter hereof, provided that the parties
may embody in one more separate documents their agreement, if any, with respect
to delegated and/or Oral Instructions.
The captions in this Agreement are included for convenience of reference
only and in no way define or delimit any of the provisions hereof or otherwise
affect their construction or effect.
This Agreement shall be deemed to be a contract made in Ohio and governed
by Ohio law. 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 and shall inure
to the benefit of the parties hereto and their respective successors.
19
<PAGE> 20
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their officers designated below on the day and year first above
written.
NATIONAL CITY BANK
By:
Title:
FINANCIAL INVESTORS TRUST
By:
Title:
20
<PAGE> 21
Portfolios
This EXHIBIT A, dated is that certain Exhibit A to a Custodian
Services Agreement dated as of between the undersigned
parties. This Exhibit A supersedes all previously dated Exhibits A.
NATIONAL CITY BANK
By:
Title:
FINANCIAL INVESTORS TRUST
By:
Title:
21
<PAGE> 22
AUTHORIZED PERSONS
APPENDIX
This Appendix, dated is that certain Appendix to a Custodian
Services Agreement dated as of between Financial Investors Trust
and National City Bank.
<TABLE>
<CAPTION>
Names Signatures
- ----- ----------
<S> <C>
</TABLE>
22
<PAGE> 1
EXHIBIT (h)(2)
AMENDED AND RESTATED
TRANSFER AGENCY AND SERVICE AGREEMENT
between
FINANCIAL INVESTORS TRUST
and
ALPS MUTUAL FUNDS SERVICES, INC.
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
Article 1. Terms of Appointment; Duties 4
Article 2. Fees and Expenses 8
Article 3. Representations and Warranties of ALPS 9
Article 4. Representations and Warranties of the Trust 9
Article 5. Data Access and Proprietary Information 10
Article 6. Indemnification 13
Article 7. Standard of Care 15
Article 8. Covenants of the Trust and ALPS 15
Article 9. Termination of Agreement 17
Article 10. Assignment 17
Article 11. Amendment 18
Article 12. Colorado Law to Apply 18
Article 13. Merger of Agreement 18
Article 14. Counterparts 18
Article 15. Limitation of Liability of the Trustees
and Shareholders 18
Article 16. Year 2000 19
Article 17. Notices 19
Article 18. Waiver 20
Article 19. Severability 20
Article 20. Survival 20
Article 21. Headings 21
</TABLE>
2
<PAGE> 3
TRANSFER AGENCY AND SERVICE AGREEMENT
AGREEMENT made as of the 14th day of December, 1999, 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 370 Seventeenth
Street, Suite 3100, Denver, Colorado 80202("ALPS" or the "Administrator");
WHEREAS, the Trust and ALPS have entered into an Administration
Agreement dated as of December 14, 1999 (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:
3
<PAGE> 4
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 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;
4
<PAGE> 5
(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 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;
5
<PAGE> 6
(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-10(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.
6
<PAGE> 7
(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.
7
<PAGE> 8
(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.
(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
agrees 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.
8
<PAGE> 9
2.03 The Trust agrees 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.
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 the State of Delaware.
9
<PAGE> 10
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 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.
10
<PAGE> 11
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.
Each party shall take reasonable efforts to advise its employees or
independent service contractors of the obligations
11
<PAGE> 12
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.
12
<PAGE> 13
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:
(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.
13
<PAGE> 14
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 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
14
<PAGE> 15
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:
(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
15
<PAGE> 16
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 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.
16
<PAGE> 17
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
this 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
17
<PAGE> 18
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.
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 "Financial Investors Trust" and "Trustees of Financial
Investors Trust" refer respectively to the Trust created and the Trustees, as
trustees but not individually
18
<PAGE> 19
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 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, 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.
Article 16. Year 2000
16.01 ALPS is in the process of preparing its electronic data
processing system and programs for the arrival of the Year 2000, and will inform
the Trust of the status of such preparations upon reasonable request. ALPS will
make every reasonable effort to ensure such systems and programs utilized by
ALPS to provide services to the Trust under this Agreement will be able to
process date-related data on and after January 1, 2000 accurately.
Article 17. Notices
17.01 All notices and other communications as required or permitted
hereunder shall be in writing and delivered by certified mail, postage prepaid,
return receipt requested, addressed as follows or to such other address or
addresses of which the respective party shall have notified the other.
19
<PAGE> 20
(a) If to the Trust, to:
Financial Investors Trust
370 17th Street, Suite 3100
Denver, CO 80202-5631
Attention: Jeremy May
(b) If to Alps, to:
ALPS Mutual Funds Services, Inc.
370 17th Street, Suite 3100
Denver, CO 80202-5631
Attention: General Counsel
Article 18. Waiver.
18.01 The waiver by either party of a breach of any of the covenants,
provisions, or conditions herein contained shall not operate, or be construed,
as a waiver of any subsequent breach.
Article 19. Severability.
19.01 If any provision or provisions of this Agreement shall be held
invalid, unlawful, or unenforceable, the validity, legality, or enforceability
of the remaining provisions shall not in any way be affected or impaired.
Article 20. Survival.
20.01 All provisions regarding indemnification, warranty, liability,
and limits thereon, and confidentiality and/or protections of proprietary rights
and trade secrets shall survive the termination of this Agreement.
20
<PAGE> 21
Article 21. Headings.
21.01 The titles and headings herein have been inserted for convenience
only and are not to be considered when interpreting the provisions of this
Agreement.
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:
------------------------------
ATTEST:
- ------------------------------
ALPS MUTUAL FUNDS SERVICES, INC.
BY:
------------------------------
ATTEST:
- -------------------------------
21
<PAGE> 22
ALPS MUTUAL FUNDS SERVICES, INC.
FUND SERVICE RESPONSIBILITY
<TABLE>
<CAPTION>
Service Performed Responsibility
- ----------------- ------------------
ALPS Trust
---- -----
<S> <C> <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
</TABLE>
22
<PAGE> 23
<TABLE>
<S> <C> <C>
14. Mail prospectuses to current Shareholders. X
15. Withhold taxes on U.S. resident and non-resident
alien accounts. X
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>
o Such services are more fully described in Article 1.02 (a), (b) and (c)
of the Agreement.
FINANCIAL INVESTORS TRUST
By:
------------------------------
ATTEST:
- ---------------------------
ALPS MUTUAL FUNDS SERVICES, INC.
By:
------------------------------
ATTEST:
- ---------------------------
23
<PAGE> 24
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
United Association S&P 500 Index Fund
24
<PAGE> 1
EXHIBIT (h)(4)
AMENDED AND RESTATED
BOOKKEEPING AND PRICING AGREEMENT
Between
FINANCIAL INVESTORS TRUST
and
ALPS MUTUAL FUNDS SERVICES, INC.
<PAGE> 2
BOOKKEEPING AND PRICING AGREEMENT
AGREEMENT made this 14th day of December, 1999 between FINANCIAL
INVESTORS Trust, a Delaware business trust having its principal office at 370
Seventeenth Street, Suite 3100, Denver, Colorado 80202 (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, (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 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
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may include communication effected directly between
electromechanical or electronic devices as agreed upon by the
parties hereto.
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 if eligible 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 Portfolios and the Portfolios' transfer
agent;
(c) Maintain and keep current all books and records of the Fund as
required by Section 31 of the 1940 Act and the rules
promulgated thereunder ("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
(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.
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(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.
(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.
(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 an 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 gross 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 gross negligence
in the performance of its duties.
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(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 S1 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 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 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.
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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, 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. No change, amendment, modification or
waiver of any term of this Agreement shall be valid unless it is in
writing and signed by both parties.
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: Russell C. Burk
TO THE FUND:
Financial Investors Trust
370 Seventeenth Street - Suite 3100
Denver, Colorado 80202
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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.
19. Waiver. The waiver by either party of a breach of any provision of this
Agreement shall not operate, or be construed, as a waiver of any
subsequent breach.
20. Headings. The headings have been inserted for convenience only and are
not to be considered when interpreting the provisions of this
Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
FINANCIAL INVESTORS TRUST
By:
------------------------
ATTEST:
- ------------------------
ALPS MUTUAL FUNDS SERVICES, INC.
By:
------------------------
ATTEST:
- ------------------------
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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
United Association S&P 500 Index Fund
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EXHIBIT (i)
April 16, 1999
Financial Investors Trust
370 17th Street
Denver, Colorado 80202
Re: United Association 500 Index Fund
Ladies and Gentlemen:
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 United Association 500 Index Fund (the "Fund"), a series of
the Trust, described in Post-Effective Amendment Nos. 15 and 17 to the
Registration Statement on Form N1-A of the Trust (1933 Act File No. 33-72424;
1940 Act File No. 811-08194), as filed with the Securities and Exchange
Commission on February 14, 2000 (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,
including receipt by the Fund of full payment for the Shares and compliance with
the Securities Act of 1933, the Investment Company Act of 1940 and applicable
state law regulating the offer and sale of securities, 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 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.
Very truly yours,
DAVIS, GRAHAM & STUBBS, LLP
<PAGE> 1
EXHIBIT (j)
INDEPENDENT AUDITORS' CONSENT
We consent to the reference to us in this Post-Effective Amendment No. 15 to
Registration Statement No. 33-72424 of Financial Investors Trust on Form N-1A
under the heading "Independent Accountants" in the Statement of Additional
Information of United Association S&P 500 Index Fund, which is part of such
Registration Statement.
DELOITTE & TOUCHE LLP
Denver, Colorado
February 11, 2000
<PAGE> 1
EXHIBIT (m)
DISTRIBUTION PLAN
Financial Investors United Association S&P 500 Index Fund: Class II
This Distribution Plan (the Distribution Plan), made as of December 14, 1999, is
the plan of Financial Investors Trust (the Trust), a business trust organized
and existing under the laws of the state of Delaware, on behalf of the United
Association S&P 500 Index Fund (the Fund).
1. This Distribution Plan, when effective in accordance with its terms, shall be
the written plan contemplated by Securities and Exchange Commission Rule 12b-1
under the Investment Company Act of 1940, as amended (the 1940 Act), for shares
of beneficial interest of Class II (Class II Shares) of the Fund.
2. The Trust has entered into a General Distribution Agreement on behalf of the
Fund with ALPS Mutual Funds Services, Inc. (ALPS) under which ALPS uses all
reasonable efforts, consistent with its other business, to secure purchasers of
the Fund's shares, including Class II Shares. Such efforts may include, but
neither are required to include nor are limited to, the following:
(1) formulation and implementation of marketing and promotional
activities, such as mail promotions and television, radio,
newspaper, magazine and other mass media advertising;
(2) preparation, printing and distribution of sales literature;
(3) preparation, printing and distribution of prospectuses of the Fund
and reports to recipients other than existing shareholders of the
Fund;
(4) obtaining such information, analyses and reports with respect to
marketing and promotional activities as ALPS may from time to time,
deem advisable;
(5) making payments to securities dealers and others engaged in the
sales of Class II Shares, and
(6) providing training, marketing and support to such dealers and others
with respect to the sale of Class II Shares.
3. In consideration for the services provided and the expenses incurred by ALPS
pursuant to the General Distribution Agreement, Class II of the Fund shall pay
to ALPS a fee at the annual rate of up to (and including) .10% of such Class'
average daily net assets throughout the month, or such lesser amount as may be
established from time to time by the Trustees of the Trust by resolution, as
specified in this paragraph; provided that, for any period during which the
total of such fees and all other expenses of the Fund would exceed the gross
income of that Fund (or of Class II Shares thereof), such fee shall be reduced
by such excess. Such fee shall be computed daily and paid monthly. The
determination of daily net assets for the Fund shall be made at the close of
business each day throughout the month and computed in the manner specified in
the Fund's then current Prospectus for the determination of the net asset value
of Class II Shares of the Fund, but shall exclude assets attributable to any
other Class of the Fund. ALPS may use all or any portion of the fee received
pursuant to the Distribution Plan to compensate
<PAGE> 2
securities dealers or other persons who have engaged in the sale of Class II
Shares pursuant to agreements with ALPS, or to pay any of the expenses
associated with other activities authorized under paragraph 2 hereof.
4. This Distribution Plan became effective with respect to Class II of the Fund
as of December 14, 1999, this Distribution Plan having been approved (1) by a
vote of majority of the Trustees of the Trust, including a majority of Trustees
who are not "interested persons" of the Trust (as defined in the 1940 Act) and
who have no direct or indirect financial interest in the operation of this
Distribution Plan or in any agreement related to the Distribution Plan (the
Independent Trustees), cast in person at a meeting called for the purpose of
voting on this Distribution Plan; and (2) by a vote of a majority of the
outstanding voting securities (as such term is defined in Section 2(a)(42) of
the 1940 Act) of Class II Shares of the Fund.
5. During the existence of this Distribution Plan, the Trust will commit the
selection and nomination of those Trustees who are not interested persons of the
Trust to the discretion of such Independent Trustees.
6. This Distribution Plan shall, unless terminated as hereinafter provided,
remain in effect until December 14, 2000 and from year to year thereafter;
provided, however, that such continuance is subject to approval annually by a
vote of a majority of the Trustees of the Trust, including a majority of the
Independent Trustees, cast in person at a meeting called for the purpose of
voting on this Distribution Plan.
7. This Distribution Plan may be amended with respect to Class II Shares of the
Fund, at any time by the Board of Trustees, provided that (a) any amendment to
increase materially the maximum fee provided for in paragraph 3 hereof, must be
approved by a vote of a majority of the outstanding voting securities (as such
term is defined in Section 2(a)(42) of the 1940 Act) of Class II Shares of the
Fund, and (b) any material amendment of this Distribution Plan must be approved
in the manner provided in paragraph 4(1) above.
8. This Distribution Plan may be terminated with respect to Class II Shares of
the Fund, at any time, without the payment of any penalty, by vote of a majority
of the Independent Trustees or by a vote of a majority of the outstanding voting
securities (as such term is defined in Section 2(a)(42) of the 1940 Act) of
Class II Shares of the Fund.
9. During the existence of this Distribution Plan, the Trust shall require ALPS
to provide to the Trust, for review by the Trust's Trustees, and the Trustees
shall review, at least quarterly, a written report of the amounts expended in
connection with financing any activity primarily intended to result in the sale
of Class II Shares (making estimates of such costs where necessary or desirable)
and the purposes for which such expenditures were made.
<PAGE> 3
10. This Distribution Plan does not require ALPS to perform any specific type or
level of distribution activities or to incur any specific level of expenses for
activities primarily intended to result in the sale of shares of Class II.
11. In the event that Rule 2830 of the NASD Conduct Rules precludes the Fund (or
any NASD member) from imposing a sales charge (as defined in that Rule) or any
portion thereof, then ALPS shall not make payments hereunder from the date that
the Fund discontinues or is required to discontinue imposition of some or all of
its sales charges. If the Fund resumes imposition of some or all of its sales
charge, ALPS will receive payments hereunder.
12. Consistent with the limitation of shareholder and Trustee liability as set
forth in the Trust's Declaration of Trust, any obligations assumed by the Trust,
a Fund or Class II Shareholders thereof pursuant to this Plan and any agreements
related to this Plan shall be limited in all cases to the proportionate
ownership of Class II Shares of the Fund and its assets, and shall not
constitute obligations of any shareholder of any other Class of the Fund or
other Funds of the Trust or of any Trustee.
13. If any provision of the Distribution Plan shall be held or made invalid by a
court decision, statute, rule or otherwise, the remainder of the Distribution
Plan shall not be affected thereby.
