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SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 / /
Pre-Effective Amendment No. / /
--------
Post-Effective Amendment No. 4 /X/
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and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT / /
OF 1940
Amendment No. 5 /X/
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(Check appropriate box or boxes.)
THE JHAVERI TRUST - File Nos. 33-89288 and 811-8974
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18820 High Parkway, Cleveland, Ohio 44116
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(Address of Principal Executive Offices) Zip Code
Registrant's Telephone Number, including Area Code: (216) 356-1565
---------------
Ramesh C. Jhaveri, 18820 High Parkway, Cleveland, Ohio 44116
- - --------------------------------------------------------------------
(Name and Address of Agent for Service)
With copy to:
Donald S. Mendelsohn, Brown, Cummins & Brown Co., L.P.A.
3500 Carew Tower, Cincinnati, Ohio 45202
Release Date: August 12, 1998
It is proposed that this filing will become effective:
/x/ immediately upon filing pursuant to paragraph (b)
/ / on (date) pursuant to paragraph (b)
/ / 60 days after filing pursuant to paragraph (a)
/ / on (date) pursuant to paragraph (a)(1)
/ / 75 days after filing pursuant to paragraph (a)(2)
/ / on (date) pursuant to paragraph (a)(2) of Rule 485.
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:
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Omit from the facing sheet reference to the other Act if the Registration
Statement or amendment is filed under only one of the Acts. Include the
"Approximate Date of Proposed Public Offering" and "Title of Securities Being
Registered" only where securities are being registered under the Securities Act
of 1933.
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THE JHAVERI TRUST
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CROSS REFERENCE SHEET
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FORM N-1A
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ITEM SECTION IN EACH PROSPECTUS
- - ---- --------------------------
1.............................. Cover Page
2.............................. Summary of Fund Expenses
3.............................. Supplement to Prospectus,
Performance Information
4.............................. The Fund, Investment Objective and
Strategies, Operation of the Fund,
Investment Policies and Techniques and Risk
Considerations, General Information
5.............................. Operation of the Fund, Investment Objective
and Strategies, Supplement to Prospectus
5A............................. None
6.............................. Cover Page, Dividends and Distributions,
Taxes, Operation of the Fund and General
Information, Supplement to Prospectus
7.............................. Cover Page, How to Invest in the Fund, Share
Price Calculation, Operation of the Fund,
Supplement to Prospectus
8.............................. How to Redeem Shares, Supplement to
Prospectus
9.............................. None
14.............................. Trustees and Officers
15.............................. General Information
SECTION IN STATEMENT OF
-----------------------
ITEM ADDITIONAL INFORMATION
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10.............................. Cover Page
11.............................. Table of Contents
12.............................. None
13.............................. Additional Information About Fund
Investments and Risk Considerations,
Investment Limitations
14.............................. Trustee Compensation
15.............................. Description of the Trust
16.............................. The Investment Adviser, Custodian, Transfer
Agent, Accountants
17.............................. Portfolio Transactions and Brokerage
18.............................. Description of the Trust
19.............................. Determination of Share Price
20.............................. None
21.............................. Distributor
22.............................. Investment Performance
23.............................. Report of Independent Public Accountants,
Financial Statements
<PAGE>
SUPPLEMENT DATED AUGUST 1, 1998
TO PROSPECTUS DATED AUGUST 1, 1997
JHAVERI VALUE FUND
The following condensed supplementary financial information for the
fiscal year ended March 31, 1998, is derived from the audited financial
statements of the Trust and has been audited by McCurdy & Associates CPA's,
Inc., the independent public accountants for the Trust. The financial statements
of the Trust and related auditor's report are included in the Statement of
Additional Information. Additional performance information is included in the
Trust's annual report dated March 31, 1998, and is available upon request
without charge.
FINANCIAL HIGHLIGHTS
For a share outstanding throughout the period
<TABLE>
<S> <C> <C> <C>
For the year For the year For the period
ended ended 5/1/95* through
3/31/98 3/31/97 3/31/96
Net asset value - beginning of period $12.64 $12.38 $12.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) (.09) (.11) .00
Net gain on investments both realized and unrealized 3.97 1.27 .79
---- ---- ---
Total from investment operations 3.88 1.16 .79
LESS DISTRIBUTIONS
Dividends from net investment income - - (.04)
Dividends from capital gains (2.45) (.90) (.37)
------ ----- -----
Net asset value - end of period $14.07 $12.64 $12.38
------ ------ ------
Total Return 33.74% 9.23% 7.45%**
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in 000's) 16,174 11,104 9,124
Ratio of expenses to average net assets 2.50% 2.50% 2.50%**
Ratio of net investment income (loss) to average net assets (.70)% (.87)% (.02)%**
Portfolio turnover rate 58.92% 54.48% 45.23%
Average commission rate paid .0425 .0363 -
</TABLE>
*Commencement of Operations
**Annualized
The following should be read in conjunction with the section entitled
"General Information" on page 13 of the Prospectus.
As of July 31, 1998, the Triad-Erisa Partnership, Ramesh C.
Jhaveri and Nalini R. Jhaveri, M.D. may be deemed to control
the Fund as a result of their respective beneficial ownership
of the shares of the Fund.
The address for Maxus Information Systems, Inc. and Maxus
Securities Corp. has changed to: The Tower at Erieview, 36th
Floor, 1301 East Ninth Steet, Cleveland, Ohio 44114.
<PAGE> 3
JHAVERI VALUE FUND
PROSPECTUS AUGUST 1, 1997
P.O. Box 16188
Cleveland, Ohio 44116
For questions about investing in the Fund or
For Information, Shareholder Services and Requests:
(216) 356-1565
Jhaveri Value Fund is a mutual fund whose investment objective is to
provide long term capital appreciation. The Fund seeks to achieve its objective
by investing primarily in a broad range of common stocks believed by its
Adviser, Investments Technology, Inc., to have above average prospects for
appreciation, based on a proprietary investment model developed by the Adviser.
The Fund is "no-load," which means there are no sales charges or
commissions. In addition, there are no 12b-1 fees, distribution expenses or
deferred sales charges which are borne by the shareholders. The Fund is a series
of The Jhaveri Trust, an open-end management investment company.
SHARES OF THE FUND ARE NOT DEPOSITS OR OBLIGATIONS OF ANY BANK, ARE NOT
ENDORSED OR GUARANTEED BY ANY BANK, AND ARE NOT INSURED BY THE FEDERAL DEPOSIT
INSURANCE CORPORATION (FDIC), THE FEDERAL RESERVE BOARD OR ANY OTHER GOVERNMENT
AGENCY, ENTITY, OR PERSON. THE PURCHASE OF FUND SHARES INVOLVES INVESTMENT
RISKS, INCLUDING THE POSSIBLE LOSS OF PRINCIPAL.
This Prospectus sets forth the information a prospective investor ought
to know before investing and should be retained for future reference. A
Statement of Additional Information has been filed with the Securities and
Exchange Commission dated August 1, 1997, which is incorporated herein by
reference and can be obtained without charge by calling the Fund at one of the
phone numbers listed above.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
<PAGE> 4
SUMMARY OF FUND EXPENSES
The tables below are provided to assist an investor in understanding
the direct and indirect expenses that an investor may incur as a shareholder in
the Fund. The expense information is based on operating expenses incurred during
the most recent fiscal year. The expenses are expressed as a percentage of
average net assets. The Example should not be considered a representation of
future Fund performance or expenses, both of which may vary.
Shareholders should be aware that the Fund is a no-load fund and,
accordingly, a shareholder does not pay any sales charge or commission upon
purchase or redemption of shares of the Fund. In addition, the Fund does not
have a 12b-1 Plan. Unlike most other mutual funds, the Fund does not pay
directly for transfer agency, pricing, custodial, auditing or legal services,
nor does it pay directly any general administrative or other operating expenses.
The Adviser pays all of the expenses of the Fund except brokerage, taxes,
interest and extraordinary expenses.
SHAREHOLDER TRANSACTION EXPENSES
Sales Load Imposed on Purchases........................................NONE
Sales Load Imposed on Reinvested Dividends.............................NONE
Deferred Sales Load....................................................NONE
Redemption Fees........................................................NONE
Exchange Fees..........................................................NONE
ANNUAL FUND OPERATING EXPENSES (as a percentage of average net assets)(1)
Management Fees........................................................2.50%
12b-1 Charges..........................................................NONE
Total Fund Operating Expenses..........................................2.50%
1 The Fund's total operating expenses are equal to the management fee
paid to the Adviser because the Adviser pays all of the Fund's
operating expenses.
Example
- - -------
You would pay the following expenses on a $1,000 investment, assuming (1) 5%
annual return and (2) redemption at the end of each time period:
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
$25 $78 $133 $284
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FINANCIAL HIGHLIGHTS
The following condensed supplementary financial information for the
period ended May 1, 1995 (commencement of operations) through March 31, 1997, is
derived from the audited financial statements of the Trust and has been audited
by McCurdy & Associates CPA's, Inc., the independent public accountants for the
Trust. The financial statements of the Trust and related auditor's report are
included in the Trust's Annual Report dated March 31, 1997. Additional
performance information is included in the Annual Report, which is available
upon request without charge.
JHAVERI VALUE FUND
FINANCIAL HIGHLIGHTS
For a share outstanding throughout the period
<TABLE>
<CAPTION>
For the period
For the year 5/1/95 *
ended through
3/31/97 3/31/96
------------ -------------
<S> <C> <C>
Net asset value - beginning of period $12.38 $12.00
Income from investment operations
Net investment income (loss) (.11) .00
Net gain on investments both
realized and unrealized 1.27 .79
--------- ---------
Total from investment operations 1.16 12.79
Less distributions
Dividends from net investment income - .04
Dividends from capital gains .90 .37
--------- ---------
Net asset value - end of period $12.64 $12.38
========= =========
Total Return 9.23% 7.45%**
Ratios/supplemental data
Net assets, end of period (in 000's) 11,014 9,124
Ratio of expenses to average net assets 2.50% 2.50%**
Ratio of net investment income (loss)
to average net assets (.87)% (.02)%**
Portfolio turnover rate 54.48% 45.23%
Average commission rate paid .0363 -
<FN>
* Commencement of Operations
**Annualized
</FN>
</TABLE>
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THE FUND
Jhaveri Value Fund (the "Fund") was organized as a series of The
Jhaveri Trust (the "Trust") on January 18, 1995, and commenced operations on May
1, 1995. The investment adviser to the Fund is Investments Technology, Inc. (the
"Adviser").
INVESTMENT OBJECTIVE AND STRATEGIES
The investment objective of the Fund is to provide long term capital
appreciation. The Fund seeks to achieve this objective by investing primarily in
a broad range of common stocks which the Adviser believes have above average
prospects for appreciation, based on a proprietary investment model developed by
the Adviser. However, the Fund will also invest in dividend paying stocks, and
it is expected that the Fund will generate a combination of current income and
long term capital appreciation.
The Fund is intended for investors with a long term wealthbuilding
horizon. The Adviser seeks to limit investment risk by diversifying the Fund's
investments across a broad range of industries and companies. While the Fund
ordinarily will invest in common stocks of U.S. companies, it may invest in
foreign companies through the purchase of American Depository Receipts.
The Adviser's investment model applies historical, fundamental and
technical analyses to a data base of more than 1,500 companies to determine
optimum buy and sell ranges for the common stock of each of the companies in the
data base. The Adviser uses its investment model to screen the companies in the
data base, then selects stocks to provide industry and company diversification.
The Adviser generally intends to stay fully invested (subject to
liquidity requirements and defensive purposes) in common stock regardless of the
movement of stock prices. The Fund normally will invest primarily in common
stocks of established companies whose securities, in the opinion of the Adviser,
enjoy a fair degree of marketability. Most equity securities in the Fund's
portfolio are listed on the New York Stock Exchange, the American Stock Exchange
or the NASDAQ over-the-counter market.
For temporary defensive purposes under abnormal market or economic
conditions, the Fund may hold all or a portion of its assets in money market
instruments (high quality fixed income securities with maturities of less than
one year), securities of money market funds or repurchase agreements fully
collateralized by U.S. government obligations. The Fund may also invest in such
instruments at any time to maintain liquidity or pending selection of
investments in accordance with its policies. If the Fund acquires securities of
money market funds, the shareholders of the Fund will be subject to duplicative
management fees.
As all investment securities are subject to inherent market risks and
fluctuations in value due to earnings, economic and political conditions and
other factors, the Fund cannot give any
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assurance that its investment objective will be achieved. Rates of total return
quoted by the Fund may be higher or lower than past quotations, and there can be
no assurance that any rate of total return will be maintained. See "Investment
Policies and Techniques and Risk Considerations" for a more detailed discussion
of the Fund's investment practices.
HOW TO INVEST IN THE FUND
Subject to a minimum initial investment of $10,000 ($2,000 for
retirement accounts) and minimum subsequent investments of $1,000, you may
invest any amount you choose, as often as you want, in the Fund.
INITIAL PURCHASE
BY MAIL - You may purchase shares of the Fund by completing and signing
the investment application form which accompanies this Prospectus and mailing
it, in proper form, together with a check (subject to the above minimum amounts)
made payable to Jhaveri Value Fund, and sent to the P.O. Box listed below. If
you prefer overnight delivery, use the overnight address listed below.
U.S. mail: Jhaveri Value Fund Overnight: Jhaveri Value Fund
P.O. Box 640994 c/o Star Bank, N.A.
Cincinnati, Ohio 45264-0994 Mutual Fund Custody Dept.
425 Walnut St. M.L. 6118
Cincinnati, Ohio 45202
Your purchase of shares of the Fund will be effected at the next share price
calculated after receipt of your investment.
BY WIRE - You may also purchase shares of the Fund by wiring federal
funds from your bank, which may charge you a fee for doing so. If money is to be
wired, you must call the Fund at 216-356-1565 to set up your account and obtain
an account number. You should be prepared to provide the information on the
application to the Fund. Then, you should provide your bank with the following
information for purposes of wiring your investment:
Star Bank, N.A. Cinti/Trust
ABA #0420-0001-3
Attn: Jhaveri Value Fund
D.D.A. # 48360-9483
Account Name _________________ (write in shareholder name)
For the Account # ______________ (write in account number)
You are required to mail a signed application to the Custodian at the
above address in order to complete your initial wire purchase. Wire orders will
be accepted only on a day on which the Fund, the Custodian and Maxus Information
Systems, Inc., the Fund's transfer agent (the "Transfer Agent") are open for
business. A wire purchase will not be considered made until the wired money is
received and the purchase is accepted by the Fund. Any delays which may occur in
wiring money, including delays which may occur in processing by the banks, are
not the
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responsibility of the Fund or the Transfer Agent. There is presently no fee for
the receipt of wired funds, but the right to charge shareholders for this
service is reserved by the Fund.
ADDITIONAL INVESTMENTS
You may purchase additional shares of the Fund at any time (minimum of
$1,000) by mail or wire. Each additional mail purchase request must contain your
name, the name of your account(s), your account number(s), and the name of the
Fund. Checks should be made payable to Jhaveri Value Fund and should be sent to
the Custodian's address. A bank wire should be sent as outlined above.
TAX SHELTERED RETIREMENT PLANS
Since the Fund is oriented to longer term investments, shares of the
Fund may be an appropriate investment medium for tax sheltered retirement plans,
including: individual retirement plans (IRAs); simplified employee pensions
(SEPs); 401(k) plans; qualified corporate pension and profit sharing plans (for
employees); tax deferred investment plans (for employees of public school
systems and certain types of charitable organizations); and other qualified
retirement plans. You should contact the Fund for the procedure to open an IRA
or SEP plan, as well as more specific information regarding these retirement
plan options. Consultation with an attorney or tax adviser regarding these plans
is advisable. Custodial fees for an IRA will be paid by the shareholder by
redemption of sufficient shares of the Fund from the IRA unless the fees are
paid directly to the IRA custodian. You can obtain information about the IRA
custodial fees from the Fund.
OTHER PURCHASE INFORMATION
You may exchange securities that you own for shares of the Fund,
provided the securities meet the Fund's investment criteria and the Adviser
deems them to be a desirable investment for the Fund. Any exchange will be a
taxable event and you may incur certain transaction costs relating to the
exchange. Contact the Fund for additional information.
Dividends begin to accrue after you become a shareholder. The Fund does
not issue share certificates. All shares are held in non-certificate form
registered on the books of the Fund and the Fund's Transfer Agent for the
account of the shareholder. The rights to limit the amount of purchases and to
refuse to sell to any person are reserved by the Fund. If your check or wire
does not clear, you will be responsible for any loss incurred. If you are
already a shareholder, the Fund can redeem shares from any identically
registered account in the Fund as reimbursement for any loss incurred. You may
be prohibited or restricted from making future purchases in the Fund.
HOW TO REDEEM SHARES
You may redeem any part of your account in the Fund at no charge by
mail. All redemptions will be made at the net asset value determined after the
redemption request has been received by the Transfer Agent in proper order. The
proceeds of the redemption may be more or
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<PAGE> 9
less than the purchase price of your shares, depending on the market value of
the Fund's securities at the time of your redemption. Your request should be
addressed to:
Jhaveri Value Fund
c/o Maxus Information Systems, Inc.
28601 Chagrin Blvd., Suite 500
Cleveland, Ohio 44122
"Proper order" means your request for a redemption must include your
letter of instruction, including the Fund name, account number, account name(s),
the address and the dollar amount or number of shares you wish to redeem. This
request must be signed by all registered share owner(s) in the exact name(s) and
any special capacity in which they are registered. For all redemptions, the Fund
requires that signatures be guaranteed by a bank or member firm of a national
securities exchange. Signature guarantees are for the protection of
shareholders. At the discretion of the Fund or the Transfer Agent, a
shareholder, prior to redemption, may be required to furnish additional legal
documents to insure proper authorization.
ADDITIONAL INFORMATION - If you are not certain of the requirements for
a redemption please call the Fund at (216) 356-1565. Redemptions specifying a
certain date or share price cannot be accepted and will be returned. We will
mail you the proceeds on or before the fifth business day following the
redemption. However, payment for redemption made against shares purchased by
check will be made only after the check has been collected, which normally may
take up to fifteen days. Also, when the New York Stock Exchange is closed (or
when trading is restricted) for any reason other than its customary weekend or
holiday closing or under any emergency circumstances, as determined by the
Securities and Exchange Commission, we may suspend redemptions or postpone
payment dates.
Because the Fund incurs certain fixed costs in maintaining shareholder
accounts, the Fund reserves the right to require any shareholder to redeem all
of his or her shares in the Fund on 30 days' written notice if the value of his
or her shares in the Fund is less than $5,000 due to redemption, or such other
minimum amount as the Fund may determine from time to time. An involuntary
redemption constitutes a sale. You should consult your tax adviser concerning
the tax consequences of involuntary redemptions. A shareholder may increase the
value of his or her shares in the Fund to the minimum amount within the 30 day
period. Each share of the Fund is subject to redemption at any time if the Board
of Trustees determines in its sole discretion that failure to so redeem may have
materially adverse consequences to all or any of the shareholders of the Fund.
SHARE PRICE CALCULATION
The value of an individual share in the Fund (the net asset value) is
calculated by dividing the total value of the Fund's investments and other
assets (including accrued income), less any liabilities (including estimated
accrued expenses), by the number of shares outstanding, rounded to the nearest
cent. Net asset value per share is determined as of the close of the New York
Stock Exchange (4:00 p.m., Eastern time) on each day that the exchange is open
for business, and on any
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<PAGE> 10
other day on which there is sufficient trading in the Fund's securities to
materially affect the net asset value. The net asset value per share of the Fund
will fluctuate.
Securities which are traded on any exchange or on the NASDAQ
over-the-counter market are valued at the last quoted sale price. Lacking a last
sale price, a security is valued at its last bid price except when, in the
Adviser's opinion, the last bid price does not accurately reflect the current
value of the security. All other securities for which over-the-counter market
quotations are readily available are valued at their last bid price. When market
quotations are not readily available, when the Adviser determines the last bid
price does not accurately reflect the current value or when restricted
securities are being valued, such securities are valued as determined in good
faith by the Adviser, in conformity with guidelines adopted by and subject to
review of the Board of Trustees of the Trust.
Fixed income securities generally are valued by using market
quotations, but may be valued on the basis of prices furnished by a pricing
service when the Adviser believes such prices accurately reflect the fair market
value of such securities. A pricing service utilizes electronic data processing
techniques based on yield spreads relating to securities with similar
characteristics to determine prices for normal institutional-size trading units
of debt securities without regard to sale or bid prices. When prices are not
readily available from a pricing service, or when restricted or illiquid
securities are being valued, securities are valued at fair value as determined
in good faith by the Adviser, subject to review of the Board of Trustees. Short
term investments in fixed income securities with maturities of less than 60 days
when acquired, or which subsequently are within 60 days of maturity, are valued
by using the amortized cost method of valuation, which the Board has determined
will represent fair value.
DIVIDENDS AND DISTRIBUTIONS
The Fund intends to distribute substantially all of its net investment
income as dividends to its shareholders on an annual basis, and intends to
distribute its net long term capital gains at least once a year and its net
short term capital gains at least once a year.
Income dividends and capital gain distributions are automatically
reinvested in additional shares at the net asset value per share on the
distribution date. Shareholders will receive a confirmation statement reflecting
the payment and reinvestment of dividends and summarizing all other
transactions. If you withdraw your entire account, all dividends accrued to the
time of withdrawal, including the day of withdrawal, will be paid at that time.
TAXES
The Fund intends to qualify each year as a "regulated investment
company" under the Internal Revenue Code of 1986, as amended. By so qualifying,
the Fund will not be subject to federal income taxes to the extent that it
distributes substantially all of its net investment income and any realized
capital gains.
For federal income tax purposes, dividends paid by the Fund from
ordinary income are taxable to shareholders as ordinary income, but may be
eligible in part for the dividends received
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<PAGE> 11
deduction for corporations. Pursuant to the Tax Reform Act of 1986 (the "Tax
Reform Act"), all distributions of net capital gains to individuals are taxed at
the same rate as ordinary income. All distributions of net capital gains to
corporations are taxed at regular corporate rates. Any distributions designated
as being made from net realized long term capital gains are taxable to
shareholders as long term capital gains regardless of the holding period of the
shareholder.
The Fund will mail to each shareholder after the close of the calendar
year a statement setting forth the federal income tax status of distributions
made during the year. Dividends and capital gains distributions may also be
subject to state and local taxes. Shareholders are urged to consult their own
tax advisers regarding specific questions as to federal, state or local taxes
and the tax effect of distributions and withdrawals from the Fund.
Unless a shareholder of the Fund furnishes his or her certified
taxpayer identification number (social security number for individuals) and
certifies that he is not subject to backup withholding, the Fund will be
required to withhold and remit to the U.S. Treasury 31% of the dividends,
distributions and redemption proceeds payable to the shareholder. Shareholders
should be aware that, under regulations promulgated by the Internal Revenue
Service, the Fund may be fined $50 annually for each account for which a
certified taxpayer identification number is not provided. In the event that such
a fine is imposed with respect to a specific account in any year, the Fund will
make a corresponding charge against the account.
TRUSTEES AND OFFICERS
The names of the Trustees and executive officers of the Trust are shown
below. Each Trustee who is an "interested person" of the Trust, as defined in
the Investment Company Act of 1940, is indicated by an asterisk.
<TABLE>
<CAPTION>
Name Position
---- --------
<S> <C>
*Ramesh C. Jhaveri Chairman of the Board, Chief Executive Officer
and Trustee
*Saumil R. Jhaveri President, Treasurer, Secretary and Trustee
Mukul M. Mehta Trustee
James F. Mueller Trustee
David R. Zavagno Trustee
</TABLE>
The principal occupations of the executive officers and Trustees of the
Trust during the past five years are set forth below:
Ramesh C. Jhaveri, P.O. Box 16188, Cleveland, Ohio 44116, is the
president of Investments Technology, Inc., an investment counseling firm which
he founded in 1983. He is licensed at Financial America Securities, Inc., an
NASD broker-dealer, as an account executive, options principal and general
securities principal.
Saumil R. Jhaveri, P.O. Box 16188, Cleveland, Ohio 44116, is the vice
president of Investments Technology, Inc., where he has been working full time
since 1991. He received his
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<PAGE> 12
Bachelor of Science degree in Finance from Ohio State University in 1991. He is
the son of Ramesh C. Jhaveri.
Mukul M. Mehta, 11000 Cedar Avenue, Cleveland, Ohio 44106, is the
founder and president of Quality Sciences, Inc., a consulting and software
development firm assisting chemical industry clientele including Fortune 500
companies. Prior to May, 1992, he was an employee of BF Goodrich Company, where
he managed a consulting group using computer applications for solving technical
and business problems.
James F. Mueller, P.O. Box 280, Amherst, Ohio 44001, is advertising
director for Ed Mullinax Ford, a car dealer, and is a television sportscaster
for the Cleveland Browns.
David R. Zavagno, 30325 Bainbridge Road, Solon, Ohio 44139, is the
founder and president of Universal Medical Systems, Inc., a company specializing
in diagnostic imaging equipment design, sales and installation.
OPERATION OF THE FUND
The Fund is a diversified series of The Jhaveri Trust, an open-end
management investment company organized as an Ohio business trust on January 18,
1995. The Board of Trustees supervises the business activities of the Trust.
Like other mutual funds, the Trust retains various organizations to perform
specialized services. It retains Investments Technology, Inc., P.O. Box 16188,
Cleveland, Ohio 44116 (the "Adviser") to manage the Trust's investments and its
business affairs. The Adviser is an Ohio-based company of which Ramesh C.
Jhaveri is the controlling shareholder. Mr. Jhaveri and Saumil R. Jhaveri are
primarily responsible for the day-to-day management of the portfolio of the
Fund. Ramesh C. Jhaveri is the Chairman of the Board, Chief Executive Officer,
and a Trustee of the Trust, and the President, Treasurer, and a Director of the
Adviser. Saumil R. Jhaveri is the President, Treasurer, Secretary and a Trustee
of the Trust and the Vice President, Secretary, and a Director of the Adviser.
Both are responsible for the development and refinement of the Adviser's
proprietary investment model, which they use in the management of investments
for individuals, corporations, pension plans, trusts, retirement plans and
charitable and endowment accounts.
The Fund is authorized to pay the Adviser a fee equal to an annual
average rate of 2.50% of its average daily net assets. The Adviser pays all of
the operating expenses of the Fund except brokerage, taxes, interest and
extraordinary expenses. In this regard, it should be noted that most investment
companies pay their own operating expenses directly, while the Fund's expenses
except those specified above are paid by the Adviser.
Consistent with the Rules of Fair Practice of the National Association
of Securities Dealers, Inc., and subject to its obligation of seeking best
qualitative execution, the Adviser may give consideration to sales of shares of
the Trust as a factor in the selection of brokers and dealers to execute
portfolio transactions. Financial America Securities, Inc., a registered
broker-dealer of which Mr. Ramesh Jhaveri is an account executive, receives
brokerage commissions from the Fund. Mr. Jhaveri receives no compensation from
Financial America Securities, Inc. as a result of those commissions. The Adviser
(not the Fund) may pay fees to certain fund consultants based on
-11-
<PAGE> 13
investments made and maintained by investors such consultants have referred to
the Fund. The Trust retains Maxus Information Systems, Inc. to serve as transfer
agent, dividend paying agent and shareholder service agent. The Trust retains
Maxus Securities Corp., 28601 Chagrin Blvd., Suite 500, Cleveland, Ohio 44122 to
act as the distributor of the Fund's shares in certain states.
INVESTMENT POLICIES AND TECHNIQUES AND RISK CONSIDERATIONS
This section contains general information about various types of
securities and investment techniques.
EQUITY SECURITIES
The Fund may invest in common stocks and closed-end investment
companies which invest primarily in common stocks. The Fund may hold warrants
and rights issued in conjunction with common stock, but in general will sell any
such warrants or rights as soon as practicable after they are received. Warrants
are options to purchase equity securities at a specified price valid for a
specific time period. Rights are similar to warrants, but normally have a short
duration and are distributed by the issuer to its shareholders.
Equity securities include common stocks of domestic real estate
investment trusts and other companies which operate as real estate corporations
or which have a significant portion of their assets in real estate. The Fund
will not acquire any direct ownership of real estate.
The Fund may invest in foreign equity securities through the purchase
of American Depository Receipts. American Depository Receipts are certificates
of ownership issued by a U.S. bank as a convenience to the investors in lieu of
the underlying shares which it holds in custody. To the extent that the Fund
does invest in foreign securities, such investments may be subject to special
risks, such as changes in restrictions on foreign currency transactions and
rates of exchange, and changes in the administrations or economic and monetary
policies of foreign governments.
Equity securities are subject to price fluctuations depending on a
variety of factors, including market, business and economic conditions.
Investment in common stocks can involve special risks. In seeking long term
capital appreciation, the Fund may often purchase common stock of small and
medium size companies which may fluctuate in price more than common stocks of
larger, more mature companies, such as many of those included in the Dow Jones
Industrial Average. Therefore, an investor should expect that the share price of
the Fund will often be more volatile, in both "up" and "down" markets, than most
of the popular stock averages.
INVESTMENT TECHNIQUES
-12-
<PAGE> 14
The Fund may borrow money in an amount not exceeding 5% of the
Fund's net assets at the time the borrowing is made. The Fund may invest up to
5% of its net assets in repurchase agreements fully collateralized by U.S.
Government obligations. The Fund also is permitted to invest in money market
funds to maintain liquidity or pending selection of investments in accordance
with its policies.
GENERAL INFORMATION
FUNDAMENTAL POLICIES. The investment limitations set forth in the
Statement of Additional Information as fundamental policies may not be changed
without the affirmative vote of the majority of the outstanding shares of the
Fund. The investment objective of the Fund may be changed without the
affirmative vote of a majority of the outstanding shares of the Fund. Any such
change may result in the Fund having an investment objective different from the
objective which the shareholders considered appropriate at the time of
investment in the Fund.
PORTFOLIO TURNOVER. The Fund does not intend to purchase or sell
securities for short term trading purposes. The Fund will, however, sell any
portfolio security (without regard to the length of time it has been held) when
the Adviser believes that market conditions, creditworthiness factors or general
economic conditions warrant such action. It is anticipated that the Fund will
have a portfolio turnover rate of less than 100%.
SHAREHOLDER RIGHTS. Any Trustee of the Trust may be removed by vote of
the shareholders holding not less than two-thirds of the outstanding shares of
the Trust. The Trust does not hold an annual meeting of shareholders. When
matters are submitted to shareholders for a vote, each shareholder is entitled
to one vote for each whole share he owns and fractional votes for fractional
shares he owns. All shares of the Fund have equal voting rights and liquidation
rights. As of May 6, 1997, the Triad-Erisa Partnership, Ramesh C. Jhaveri and
Nalini R. Jhaveri, M.D. may be deemed to control the Fund as a result of their
respective beneficial ownership of the shares of the Fund.
PERFORMANCE INFORMATION
The Fund may periodically advertise "average annual total return." The
"average annual total return" of the Fund refers to the average annual
compounded rate of return over the stated period that would equate an initial
amount invested at the beginning of a stated period to the ending redeemable
value of the investment. The calculation of "average annual total return"
assumes the reinvestment of all dividends and distributions.
The Fund may also periodically advertise its total return over various
periods in addition to the value of a $10,000 investment (made on the date of
the initial public offering of the Fund's shares) as of the end of a specified
period. The "total return" for the Fund refers to the percentage change in the
value of an account between the beginning and end of the stated period, assuming
no activity in the account other than reinvestment of dividends and capital
gains distributions.
The Fund may also include in advertisements data comparing performance
with other mutual funds as reported in non-related investment media, published
editorial comments and
-13-
<PAGE> 15
performance rankings compiled by independent organizations and publications that
monitor the performance of mutual funds (such as Lipper Analytical Services,
Inc., Morningstar, Inc., Fortune or Barron's). Performance information may be
quoted numerically or may be presented in a table, graph or other illustration.
In addition, Fund performance may be compared to well-known indices of market
performance including the Standard & Poor's (S&P) 500 Index or the Dow Jones
Industrial Average.
THE ADVERTISED PERFORMANCE DATA OF THE FUND IS BASED ON HISTORICAL
PERFORMANCE AND IS NOT INTENDED TO INDICATE FUTURE PERFORMANCE. RATES OF TOTAL
RETURN QUOTED BY THE FUND MAY BE HIGHER OR LOWER THAN PAST QUOTATIONS, AND THERE
CAN BE NO ASSURANCE THAT ANY RATE OF TOTAL RETURN WILL BE MAINTAINED. THE
PRINCIPAL VALUE OF AN INVESTMENT IN THE FUND WILL FLUCTUATE SO THAT A
SHAREHOLDER'S SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THE
SHAREHOLDER'S ORIGINAL INVESTMENT.
INVESTMENT ADVISER
Investments Technology, Inc.
P.O. Box 16188
Cleveland, Ohio 44116
CUSTODIAN (ALL INITIAL AND SUBSEQUENT PURCHASES)
Star Bank, N.A.
P.O. Box 640994
Cincinnati, Ohio 45264-0994
TRANSFER AGENT (ALL REDEMPTION REQUESTS)
Maxus Information Systems, Inc.
28601 Chagrin Blvd., Suite 500
Cleveland, Ohio 44122
AUDITORS
McCurdy & Associates CPA's, Inc.
27955 Clemens Road
Westlake, Ohio 44145
No person has been authorized to give any information or to make any
representations, other than those contained in this Prospectus, in connection
with the offering contained in this Prospectus, and if given or made, such
information or representations must not be relied upon as being authorized by
the Fund. This Prospectus does not constitute an offer by the Fund to sell its
shares in any state to any person to whom it is unlawful to make such offer in
such state.
-14-
<PAGE> 16
<TABLE>
<CAPTION>
TABLE OF CONTENTS
PAGE
<S> <C>
SUMMARY OF FUND EXPENSES..................................................... 2
Shareholder Transaction Expenses.................................... 2
Annual Fund Operating Expenses...................................... 2
THE FUND..................................................................... 3
INVESTMENT OBJECTIVE AND STRATEGIES.......................................... 3
HOW TO INVEST IN THE FUND.................................................... 4
Initial Purchase.................................................... 4
By Mail............................................................. 4
By Wire............................................................. 4
Additional Investments.............................................. 5
Tax Sheltered Retirement Plans...................................... 5
Other Purchase Information.......................................... 5
HOW TO REDEEM SHARES......................................................... 6
Additional Information.............................................. 6
SHARE PRICE CALCULATION...................................................... 7
DIVIDENDS AND DISTRIBUTIONS.................................................. 7
TAXES........................................................................ 8
TRUSTEES AND OFFICERS........................................................ 8
OPERATION OF THE FUND......................................................... 9
INVESTMENT POLICIES AND TECHNIQUES AND RISK CONSIDERATIONS................... 10
Equity Securities................................................... 10
Investment Techniques............................................... 11
GENERAL INFORMATION.......................................................... 11
Fundamental Policies................................................ 11
Portfolio Turnover.................................................. 11
Shareholder Rights.................................................. 11
PERFORMANCE INFORMATION...................................................... 11
</TABLE>
<PAGE> 17
JHAVERI VALUE FUND
STATEMENT OF ADDITIONAL INFORMATION
August 1, 1998
This Statement of Additional Information is not a prospectus. It should
be read in conjunction with the Prospectus of Jhaveri Value Fund dated August 1,
1998. A copy of the Prospectus can be obtained by writing the Transfer Agent at
The Tower at Erieview, 36th Floor, 1301 East Ninth Street, Cleveland, Ohio 44114
or by calling 216-356-1565.
<PAGE> 18
STATEMENT OF ADDITIONAL INFORMATION
-----------------------------------
TABLE OF CONTENTS
-----------------
PAGE
----
DESCRIPTION OF THE TRUST................................................ 1
ADDITIONAL INFORMATION ABOUT FUND INVESTMENTS
AND RISK CONSIDERATIONS................................................. 2
INVESTMENT LIMITATIONS.................................................. 3
THE INVESTMENT ADVISER.................................................. 5
TRUSTEE COMPENSATION.................................................... 6
PORTFOLIO TRANSACTIONS AND BROKERAGE.................................... 6
DETERMINATION OF SHARE PRICE............................................ 8
INVESTMENT PERFORMANCE.................................................. 8
CUSTODIAN............................................................... 9
TRANSFER AGENT.......................................................... 9
ACCOUNTANTS............................................................. 10
FINANCIAL STATEMENTS.................................................... 10
- i -
<PAGE> 19
DESCRIPTION OF THE TRUST
The Jhaveri Trust (the "Trust") is an open-end investment company
established under the laws of Ohio by an Agreement and Declaration of Trust
dated January 18, 1995 (the "Trust Agreement"). The Trust Agreement permits the
Trustees to issue an unlimited number of shares of beneficial interest of
separate series without par value. Shares of one series have been authorized,
which shares constitute the interests in Jhaveri Value Fund (the "Fund").
Each share of a series represents an equal proportionate interest in
the assets and liabilities belonging to that series with each other share of
that series and is entitled to such dividends and distributions out of income
belonging to the series as are declared by the Trustees. The shares do not have
cumulative voting rights or any preemptive or conversion rights, and the
Trustees have the authority from time to time to divide or combine the shares of
any series into a greater or lesser number of shares of that series so long as
the proportionate beneficial interest in the assets belonging to that series and
the rights of shares of any other series are in no way affected. In case of any
liquidation of a series, the holders of shares of the series being liquidated
will be entitled to receive as a class a distribution out of the assets, net of
the liabilities, belonging to that series. Expenses attributable to any series
are borne by that series. Any general expenses of the Trust not readily
identifiable as belonging to a particular series are allocated by or under the
direction of the Trustees in such manner as the Trustees determine to be fair
and equitable. No shareholder is liable to further calls or to assessment by the
Trust without his or her express consent.
Upon sixty days prior written notice to shareholders, the Fund may make
redemption payments in whole or in part in securities or other property if the
Trustees determine that existing conditions make cash payments undesirable. For
other information concerning the purchase and redemption of shares of the Fund,
see "How to Invest in the Fund" and "How to Redeem Shares" in the Prospectus.
For a description of the methods used to determine the share price and value of
the Fund's assets, see "Share Price Calculation" in the Prospectus.
As of July 31, 1998, the following persons may be deemed to beneficially
own five percent (5%) or more of the Fund: Ramesh C. Jhaveri and Nalini R.
Jhaveri, M.D. (including the shares owned by Triad-Erisa Partnership) 18820 High
Pkwy., Rocky River, Ohio 44116 -- 31.44% Margaret A. Weekley, 1420 W. Bagley
Road, Berea, Ohio 44017 -- 7.64%; Ramesh J. Brahmbhatt, M.D., 24224 Lake Road,
Bay Village, Ohio 44140 -- 5.27%; Chonilal K. Lalwani and Vidya C. Lalwani,
M.D., 4410 Valley Forge Drive, Fairview Park, Ohio 44126 -- 7.95%; Shah
Investments Limited Partnership, 1726 East Knox Road, Tempe, AZ 85284 -- 5.02%.
As of July 31, 1998, the Triad-Erisa Partnership (a partnership
controlled by Ramesh C. Jhaveri), Ramesh C. Jhaveri and Nalini R. Jhaveri, M.D.
(the wife of Ramesh C. Jhaveri) may be deemed to control the Fund as a result of
their respective beneficial ownership of the shares of the Fund. As of July 31,
1998, the officers and trustees as a group may be deemed to beneficially own
34.20% of the Fund.
- 1 -
<PAGE> 20
ADDITIONAL INFORMATION ABOUT FUND INVESTMENTS AND RISK CONSIDERATIONS
This section contains a more detailed discussion of some of the
investments the Fund may make and some of the techniques it may use, as
described in the Prospectus (see "Investment Objectives and Strategies" and
"Investment Policies and Techniques and Risk Considerations").
A. REPURCHASE AGREEMENTS. A repurchase agreement is a short-term
investment in which the purchaser (I.E., the Fund) acquires ownership of a U.S.
Government obligation (which may be of any maturity) and the seller agrees to
repurchase the obligation at a future time at a set price, thereby determining
the yield during the purchaser's holding period (usually not more than seven
days from the date of purchase). Any repurchase transaction in which the Fund
engages will require full collateralization of the seller's obligation during
the entire term of the repurchase agreement. In the event of a bankruptcy or
other default of the seller, the Fund could experience both delays in
liquidating the underlying security and losses in value. However, the Fund
intends to enter into repurchase agreements only with the Custodian, other banks
with assets of $1 billion or more and registered securities dealers determined
by the Adviser (subject to review by the Board of Trustees) to be creditworthy.
The Adviser monitors the creditworthiness of the banks and securities dealers
with which the Fund engages in repurchase transactions, and the Fund will not
invest more than 5% of its net assets in repurchase agreements.
B. LOANS OF PORTFOLIO SECURITIES. The Fund may make short and long term
loans of its portfolio securities. Under the lending policy authorized by the
Board of Trustees and implemented by the Adviser in response to requests of
broker-dealers or institutional investors which the Adviser deems qualified, the
borrower must agree to maintain collateral, in the form of cash or U.S.
government obligations, with the Fund on a daily mark-to-market basis in an
amount at least equal to 100% of the value of the loaned securities. The Fund
will continue to receive dividends or interest on the loaned securities and may
terminate such loans at any time or reacquire such securities in time to vote on
any matter which the Board of Trustees determines to be serious. With respect to
loans of securities, there is the risk that the borrower may fail to return the
loaned securities or that the borrower may not be able to provide additional
collateral.
C. ILLIQUID SECURITIES. The portfolio of the Fund may contain illiquid
securities. Illiquid securities generally include securities which cannot be
disposed of promptly and in the ordinary course of business without taking a
reduced price. Securities may be illiquid due to contractual or legal
restrictions on resale or lack of a ready market. The following securities are
considered to be illiquid: repurchase agreements maturing in more than seven
days, nonpublicly offered securities and restricted securities. The Fund will
not invest more than 5% of its net assets in illiquid securities.
D. OTHER INVESTMENT COMPANIES. The Fund is permitted to invest in other
investment companies at any time. The Fund will not purchase more than 3% of the
outstanding voting stock of any investment company. If the Fund acquires
securities of another investment company, the shareholders of the Fund may be
subject to duplicative management fees.
- 2 -
<PAGE> 21
INVESTMENT LIMITATIONS
FUNDAMENTAL. The investment limitations described below have been
adopted by the Trust with respect to the Fund and are fundamental
("Fundamental"), I.E., they may not be changed without the affirmative vote of a
majority of the outstanding shares of the Fund. As used in the Prospectus and
the Statement of Additional Information, the term "majority" of the outstanding
shares of the Fund means the lesser of (1) 67% or more of the outstanding shares
of the Fund present at a meeting, if the holders of more than 50% of the
outstanding shares of the Fund are present or represented at such meeting; or
(2) more than 50% of the outstanding shares of the Fund. Other investment
practices which may be changed by the Board of Trustees without the approval of
shareholders to the extent permitted by applicable law, regulation or regulatory
policy are considered non-fundamental ("Non-Fundamental").
1. BORROWING MONEY. The Fund will not borrow money, except (a) from a
bank, provided that immediately after such borrowing there is an asset coverage
of 300% for all borrowings of the Fund; or (b) from a bank or other persons for
temporary purposes only, provided that such temporary borrowings are in an
amount not exceeding 5% of the Fund's total assets at the time when the
borrowing is made. This limitation does not preclude the Fund from entering into
reverse repurchase transactions, provided that the Fund has an asset coverage of
300% for all borrowings and repurchase commitments of the Fund pursuant to
reverse repurchase transactions.
2. SENIOR SECURITIES. The Fund will not issue senior securities. This
limitation is not applicable to activities that may be deemed to involve the
issuance or sale of a senior security by the Fund, provided that the Fund's
engagement in such activities is (a) consistent with or permitted by the
Investment Company Act of 1940, as amended, the rules and regulations
promulgated thereunder or interpretations of the Securities and Exchange
Commission or its staff and (b) as described in the Prospectus and the
Statement of Additional Information.
3. UNDERWRITING. The Fund will not act as underwriter of securities
issued by other persons. This limitation is not applicable to the extent that,
in connection with the disposition of portfolio securities (including restricted
securities), the Fund may be deemed an underwriter under certain federal
securities laws.
4. REAL ESTATE. The Fund will not purchase or sell real estate. This
limitation is not applicable to investments in marketable securities which are
secured by or represent interests in real estate. This limitation does not
preclude the Fund from investing in mortgage-related securities or investing in
companies engaged in the real estate business or have a significant portion of
their assets in real estate (including real estate investment trusts).
5. COMMODITIES. The Fund will not purchase or sell commodities unless
acquired as a result of ownership of securities or other investments. This
limitation does not preclude the Fund from purchasing or selling options or
futures contracts, from investing in securities or other instruments backed by
commodities or from investing in companies which are engaged in a commodities
business or have a significant portion of their assets in commodities.
6. LOANS. The Fund will not make loans to other persons, except (a) by
loaning portfolio securities, (b) by engaging in repurchase agreements, or (c)
by purchasing nonpublicly
- 3 -
<PAGE> 22
offered debt securities. For purposes of this limitation, the term "loans" shall
not include the purchase of a portion of an issue of publicly distributed bonds,
debentures or other securities.
7. CONCENTRATION. The Fund will not invest 25% or more of its total
assets in a particular industry. This limitation is not applicable to
investments in obligations issued or guaranteed by the U.S. government, its
agencies and instrumentalities or repurchase agreements with respect thereto.
With respect to the percentages adopted by the Trust as maximum
limitations on its investment policies and limitations, an excess above the
fixed percentage will not be a violation of the policy or limitation unless the
excess results immediately and directly from the acquisition of any security or
the action taken. This paragraph does not apply to the borrowing policy set
forth in paragraph 1 above.
Notwithstanding any of the foregoing limitations, any investment
company, whether organized as a trust, association or corporation, or a personal
holding company, may be merged or consolidated with or acquired by the Trust,
provided that if such merger, consolidation or acquisition results in an
investment in the securities of any issuer prohibited by said paragraphs, the
Trust shall, within ninety days after the consummation of such merger,
consolidation or acquisition, dispose of all of the securities of such issuer so
acquired or such portion thereof as shall bring the total investment therein
within the limitations imposed by said paragraphs above as of the date of
consummation.
NON-FUNDAMENTAL. The following limitations have been adopted by the
Trust with respect to the Fund and are Non-Fundamental (see "Investment
Restrictions" above).
i. PLEDGING. The Fund will not mortgage, pledge, hypothecate or in any
manner transfer, as security for indebtedness, any assets of the Fund except as
may be necessary in connection with borrowings described in limitation (1)
above. Margin deposits, security interests, liens and collateral arrangements
with respect to transactions involving options, futures contracts, short sales
and other permitted investments and techniques are not deemed to be a mortgage,
pledge or hypothecation of assets for purposes of this limitation.
ii. BORROWING. The Fund will not purchase any security while borrowings
(including reverse repurchase agreements) representing more than 5% of its total
assets are outstanding. The Fund will not enter into reverse repurchase
agreements.
iii. MARGIN PURCHASES. The Fund will not purchase securities or
evidences of interest thereon on "margin." This limitation is not applicable to
short term credit obtained by the Fund for the clearance of purchases and sales
or redemption of securities, or to arrangements with respect to transactions
involving options, futures contracts, short sales and other permitted
investments and techniques.
iv. SHORT SALES. The Fund will not effect short sales of securities
unless it owns or has the right to obtain securities equivalent in kind and
amount to the securities sold short.
v. OPTIONS. The Fund will not purchase or sell puts, calls, options or
straddles.
- 4 -
<PAGE> 23
vi. REPURCHASE AGREEMENTS. The Fund will not invest more than 5% of its
net assets in repurchase agreements.
vii. LOANS OF PORTFOLIO SECURITIES. The Fund will not make a loan of
portfolio securities which would cause the value of all such loans outstanding
to exceed 5% of the Fund's net assets.
viii. ILLIQUID INVESTMENTS. The Fund will not invest more than 5% of
its net assets in securities for which there are legal or contractual
restrictions on resale and other illiquid securities.
THE INVESTMENT ADVISER
The Trust's investment adviser is Investments Technology, Inc., P.O.
Box 16118, Cleveland, Ohio 44116. Ramesh C. Jhaveri and Saumil R. Jhaveri may be
deemed to be controlling persons and affiliates of the Adviser due to their
ownership of its shares and their positions as officers and directors of the
Adviser. They, because of such affiliation, may receive benefits from the
management fees paid to the Adviser.
Under the terms of the management agreement (the "Agreement"), the
Adviser manages the Fund's investments subject to approval of the Board of
Trustees and pays all of the expenses of the Fund except brokerage, taxes,
interest and extraordinary expenses. As compensation for its management services
and agreement to pay the Fund's expenses, the Fund is obligated to pay the
Adviser a fee computed and accrued daily and paid monthly at an annual rate of
2.50% of the average daily net assets of the Fund. The Adviser may waive all or
part of its fee, at any time, and at its sole discretion, but such action shall
not obligate the Adviser to waive any fees in the future. For the fiscal years
ended March 31, 1998 and March 31, 1997, and for the period from May 1, 1995
(the Fund's inception) through March 31, 1996, the Fund paid fees to the Adviser
of $344,408, $261,501 and $181,243, respectively.
The Adviser retains the right to use the name "Jhaveri" in connection
with another investment company or business enterprise with which the Adviser is
or may become associated.
-5-
<PAGE> 24
The Trust's right to use the name "Jhaveri" automatically ceases ninety days
after termination of the Agreement and may be withdrawn by the Adviser on ninety
days written notice.
The Adviser may make payments to banks or other financial institutions
that provide shareholder services and administer shareholder accounts. The
Glass-Steagall Act prohibits banks from engaging in the business of
underwriting, selling or distributing securities. Although the scope of this
prohibition under the Glass-Steagall Act has not been clearly defined by the
courts or appropriate regulatory agencies, management of the Fund believes that
the Glass-Steagall Act should not preclude a bank from providing such services.
However, state securities laws on this issue may differ from the interpretations
of federal law expressed herein and banks and financial institutions may be
required to register as dealers pursuant to state law. If a bank were prohibited
from continuing to perform all or a part of such services, management of the
Fund believes that there would be no material impact on the Fund or its
shareholders. Banks may charge their customers fees for offering these services
to the extent permitted by applicable regulatory authorities, and the overall
return to those shareholders availing themselves of the bank services will be
lower than to those shareholders who do not. The Fund may from time to time
purchase securities issued by banks which provide such services; however, in
selecting investments for the Fund, no preference will be shown for such
securities.
TRUSTEE COMPENSATION
The compensation paid to the Trustees of the Trust for the fiscal year
ended March 31, 1998 is set forth in the following table:
<TABLE>
<CAPTION>
===============================================================================
TOTAL COMPENSATION FROM TRUST (THE
NAME AGE TRUST IS NOT IN A FUND COMPLEX)1
- --------------------------------------------------------------------------------
<S> <C> <C>
Ramesh C. Jhaveri 61 0
- --------------------------------------------------------------------------------
Saumil R. Jhaveri 29 0
- --------------------------------------------------------------------------------
Mukul M. Mehta 52 800
- --------------------------------------------------------------------------------
James F. Mueller 55 800
- --------------------------------------------------------------------------------
David R. Zavagno 43 800
================================================================================
<FN>
1 Trustee fees are Trust expenses. However, because the management agreement
obligates the Adviser to pay all of the operating expenses of the Trust (with
limited exceptions), the Adviser makes the actual payment.
</FN>
</TABLE>
- 6 -
<PAGE> 25
PORTFOLIO TRANSACTIONS AND BROKERAGE
Subject to policies established by the Board of Trustees of the Trust,
the Adviser is responsible for the Fund's portfolio decisions and the placing of
the Fund's portfolio transactions. In placing portfolio transactions, the
Adviser seeks the best qualitative execution for the Fund, taking into account
such factors as price (including the applicable brokerage commission or dealer
spread), the execution capability, financial responsibility and responsiveness
of the broker or dealer and the brokerage and research services provided by the
broker or dealer. The Adviser generally seeks favorable prices and commission
rates that are reasonable in relation to the benefits received.
The Adviser is specifically authorized to select brokers or dealers who
also provide brokerage and research services to the Fund and/or the other
accounts over which the Adviser exercises investment discretion and to pay such
brokers or dealers a commission in excess of the commission another broker or
dealer would charge if the Adviser determines in good faith that the commission
is reasonable in relation to the value of the brokerage and research services
provided. The determination may be viewed in terms of a particular transaction
or the Adviser's overall responsibilities with respect to the Trust and to other
accounts over which it exercises investment discretion.
Research services include supplemental research, securities and
economic analyses, statistical services and information with respect to the
availability of securities or purchasers or sellers of securities and analyses
of reports concerning performance of accounts. The research services and other
information furnished by brokers through whom the Fund effects securities
transactions may also be used by the Adviser in servicing all of its accounts.
Similarly, research and information provided by brokers or dealers serving other
clients may be useful to the Adviser in connection with its services to the
Fund. Although research services and other information are useful to the Fund
and the Adviser, it is not possible to place a dollar value on the research and
other information received. It is the opinion of the Board of Trustees and the
Adviser that the review and study of the research and other information will not
reduce the overall cost to the Adviser of performing its duties to the Fund
under the Agreement.
While The Fund does not deem it practicable and in its best interests
to solicit competitive bids for commission rates on each transaction,
consideration is regularly given to posted commission rates as well as other
information concerning the level of commissions charged on comparable
transactions by qualified brokers.
The Fund has no obligation to deal with any broker or dealer in the
execution of its transactions. However, it is contemplated that Financial
America Securities, Inc., in its capacity as a registered broker-dealer, will
effect substantially all securities transactions which are executed on a
national securities exchange and over-the-counter transactions conducted on an
agency basis. Such transactions will be executed at competitive commission rates
through RPR Clearing Services, Inc., a division of Rauscher Pierce Refsnes, Inc.
Over-the-counter transactions will be placed either directly with
principal market makers or with broker-dealers, if the same or a better price,
including commissions and executions, is available. Purchases made directly
through a market maker may include the spread between the bid and asked prices.
- 7 -
<PAGE> 26
Under the Investment Company Act of 1940, persons affiliated with an
affiliate of the Adviser (such as Financial America Securities, Inc.) may be
prohibited from dealing with the Fund as a principal in the purchase and sale of
securities. Therefore, Financial America Securities, Inc. will not serve as the
Fund's dealer in connection with over-the-counter transactions. However,
Financial America Securities, Inc. may serve as the Fund's broker in
over-the-counter transactions conducted on an agency basis and will receive
brokerage commissions in connection with such transactions. Such agency
transactions will be executed through RPR Clearing Services, Inc., a division of
Rauscher, Pierce Refsnes, Inc.
The Fund will not effect any brokerage transactions in its portfolio
securities with Financial America Securities, Inc. if such transactions would be
unfair or unreasonable to Fund shareholders, and the commissions will be paid
solely for the execution of trades and not for any other services. The Agreement
provides that affiliates of affiliates of the Adviser may receive brokerage
commissions in connection with effecting such transactions for the Fund. In
determining the commissions to be paid to Financial America Securities, Inc., it
is the policy of the Fund that such commissions will, in the judgment of the
Trust's Board of Trustees, be (a) at least as favorable to the Fund as those
which would be charged by other qualified brokers having comparable execution
capability and (b) at least as favorable to the Fund as commissions
contemporaneously charged by Financial America Securities, Inc. on comparable
transactions for its most favored unaffiliated customers, except for customers
of Financial America Securities, Inc. considered by a majority of the Trust's
disinterested Trustees not to be comparable to the Fund. The disinterested
Trustees from time to time review, among other things, information relating to
the commissions charged by Financial America Securities, Inc. to the Fund and
its other customers, and rates and other information concerning the commissions
charged by other qualified brokers.
The Agreement does not provide for a reduction of the Adviser's fee by
the amount of any profits earned by Financial America Securities, Inc. or Mr.
Ramesh C. Jhaveri from brokerage commissions generated from portfolio
transactions of the Fund.
While the Fund contemplates no ongoing arrangements with any other
brokerage firms, brokerage business may be given from time to time to other
firms. Financial America Securities, Inc. will not receive reciprocal brokerage
business as a result of the brokerage business placed by the Fund with others.
To the extent that the Trust and another of the Adviser's clients seek
to acquire the same security at about the same time, the Trust may not be able
to acquire as large a position in such security as it desires or it may have to
pay a higher price for the security. Similarly, the Trust may not be able to
obtain as large an execution of an order to sell or as high a price for any
particular portfolio security if the other client desires to sell the same
portfolio security at the same time. On the other hand, if the same securities
are bought or sold at the same time by more than one client, the resulting
participation in volume transactions could produce better executions for the
Trust. In the event that more than one client wants to purchase or sell the same
security on a given date, the purchases and sales will normally be made by
random client selection.
For the fiscal years ended March 31, 1998 and March 31, 1997, and for
the period from May 1, 1995 (the Fund's inception) through March 31, 1996, the
Fund paid brokerage commissions of $44,602, 32,296 and $56,565, respectively, to
- 8 -
<PAGE> 27
Financial America Securities, Inc. for effecting 100% of the Fund's commission
transactions.
DETERMINATION OF SHARE PRICE
The price (net asset value) of the shares of the Fund is determined as
of 4:00 p.m., Eastern time on each day the Trust is open for business and on any
other day on which there is sufficient trading in the Fund's securities to
materially affect the net asset value. The Trust is open for business on every
day except Saturdays, Sundays and the following holidays: New Year's Day, Martin
Luther King, Jr. Day, President's Day, Good Friday, Memorial Day, Independence
Day, Labor Day, Thanksgiving and Christmas. For a description of the methods
used to determine the net asset value (share price), see "Share Price
Calculation" in the Prospectus.
INVESTMENT PERFORMANCE
"Average annual total return," as defined by the Securities and
Exchange Commission, is computed by finding the average annual compounded rates
of return (over the one and five year periods and the period from initial public
offering through the end of the Fund's most recent fiscal year) that would
equate the initial amount invested to the ending redeemable value, according to
the following formula:
P(1+T)n=ERV
Where: P = a hypothetical $1,000 initial investment
T = average annual total return
n = number of years
ERV = ending redeemable value at the end of the
applicable period of the hypothetical $1,000
investment made at the beginning of the
applicable period.
The computation assumes that all dividends and distributions are reinvested at
the net asset value on the reinvestment dates and that a complete redemption
occurs at the end of the applicable period.
The Fund's investment performance will vary depending upon market
conditions, the composition of the Fund's portfolio and operating expenses of
the Fund. These factors and possible differences in the methods and time periods
used in calculating non-standardized investment performance should be considered
when comparing the Fund's performance to those of other investment companies or
investment vehicles. The risks associated with the Fund's investment objective,
policies and techniques should also be considered. At any time in the future,
investment performance may be higher or lower than past performance, and there
can be no assurance that any performance will continue.
From time to time, in advertisements, sales literature and information
furnished to present or prospective shareholders, the performance of the Fund
may be compared to indices of broad groups of unmanaged securities considered to
be representative of or similar to the portfolio holdings of the Fund or
considered to be representative of the stock market in general. The Fund may use
the Standard & Poor's 500 Stock Index or the Dow Jones Industrial Average.
- 9 -
<PAGE> 28
In addition, the performance of the Fund may be compared to other
groups of mutual funds tracked by any widely used independent research firm
which ranks mutual funds by overall performance, investment objectives and
assets, such as Lipper Analytical Services, Inc. or Morningstar, Inc. The
objectives, policies, limitations and expenses of other mutual funds in a group
may not be the same as those of the Fund. Performance rankings and ratings
reported periodically in national financial publications such as Barron's and
Fortune also may be used.
The average annual total return for the Fund for the fiscal years ended
March 31, 1998 and March 31, 1997 and for the period from May 1, 1996 (the
Fund's inception) through March 31, 1996 were 33.74%, 9.23% and 7.45%
(annualized), respectively.
CUSTODIAN
Star Bank, N.A., 425 Walnut Street, Cincinnati, Ohio 45202, is
Custodian of the Fund's investments. The Custodian acts as the Fund's
depository, safekeeps its portfolio securities, collects all income and other
payments with respect thereto, disburses funds at the Fund's request and
maintains records in connection with its duties.
TRANSFER AGENT
MAXUS Information Systems, Inc., 1301 East Ninth Street, Suite 3600
Cleveland, Ohio 44114 ("MAXUS") acts as the Fund's transfer agent and, in such
capacity, maintains the records of each shareholder's account, answers
shareholders' inquiries concerning their accounts, processes purchases and
redemptions of the Fund's shares, acts as dividend and distribution disbursing
agent and performs other accounting and shareholder service functions. In
addition, MAXUS acts as the Fund's administrator, providing the Fund with
certain monthly reports, record-keeping and other management- related services,
and the fund accountant. For the fiscal year ended March 31, 1998, MAXUS
received $45,600 for its services as transfer agent, administrator and fund
accountant. Prior to April 1, 1997, American Data Services ("ADS") acted as fund
administrator. For the year ended March 31, 1997, and for the period from May 1,
1995 (the Fund's inception) through March 31, 1996, ADS received $16,931 and
$14,300, respectively, for its services as administrator.
ACCOUNTANTS
The firm of McCurdy & Associates, CPA's, 27955 Clemens Road, Westlake,
Ohio 44145, has been selected as independent public accountants for the Trust
for the fiscal year ending March 31, 1999. McCurdy & Associates performs an
annual audit of the Fund's financial statements and provides financial, tax and
accounting consulting services as requested.
DISTRIBUTOR
Maxus Securities Corp., 1301 East Ninth Street, Suite 3600, Cleveland,
Ohio 44114, is an agent for distribution of shares of the Fund in certain
states. The distributor is obligated to sell the shares of the Fund on a best
- 10 -
<PAGE> 29
efforts basis only against purchase orders for the shares. Shares of the Fund
are offered to the public on a continuous basis.
FINANCIAL STATEMENTS
The financial statements and independent auditors' report required to
be included in this Statement of Additional Information are incorporated herein
by reference to the Trust's Annual Report to Shareholders for the fiscal year
ended March 31, 1998. The Funds will provide the Annual Report without charge at
written request or request by telephone.
-11-
<PAGE> 30
<TABLE>
<CAPTION>
THE JHAVERI TRUST
PART C. OTHER INFORMATION
Item 24. Financial Statements and Exhibits
- -------- ---------------------------------
<S> <C> <C>
(a) Financial Statements
Included in Part A: Financial Highlights for the
period from May 1, 1995 (Commencement of Operations)
through March 31, 1998.
Included in Part B: The following documents are
incorporated by reference to The Jhaveri Trust 1998
Annual Report to Shareholders.
(1) Report of Independent Public Accountants.
(2) Schedule of Investments - March 31, 1998.
(3) Statement of Assets and Liabilities - March
31, 1998.
(4) Statement of Operations for the year ended
March 31, 1998.
(5) Statement of Changes in Net Assets for the
years ended May 1, 1997 and 1998.
(6) Financial Highlights for the period from May
1, 1995 (Commencement of Operations) through
March 31, 1998.
(7) Notes to Financial Statements.
(b) Exhibits
(1) Copy of Registrant's Declaration of Trust,
(2) Copy of Registrant's Amended and Restated
By-Laws which was filed as an exhibit to
Registrant's Post-Effective Amendment No. 3,
is hereby incorporated by reference.
(3) Voting Trust Agreements - None.
(4) Specimen of Share Certificates - None.
(5) Copy of Registrant's Management Agreement
with its Adviser, Investments Technology,
Inc., is filed herewith.
(6) Underwriting Agreement with Maxus Securities
Corp., which was filed as an exhibit to
Registrant's Post-Effective Amendment No. 3,
is hereby incorporated by reference.
</TABLE>
<PAGE> 31
<TABLE>
<CAPTION>
<S> <C>
(7) Bonus, Profit Sharing, Pension or Similar
Contracts for the benefit of Directors or
Officers - None.
(8) Copy of Registrant's Agreement with the
Custodian, Star Bank, N.A., is filed
herewith.
(9) Other Material Contracts - None.
(10) Opinion of Brown, Cummins & Brown Co., L.P.A. is incorporated by
reference to the Form 24F-2 filed on May 30, 1997.
(11) Consent of McCurdy & Associates CPA's, Inc., is filed herewith.
(12) Financial Statements Omitted from Item 23 - None.
(13) Copy of Letter of Initial Stockholder is filed herewith.
(14) Model Plan used in Establishment of any Retirement Plan - None.
(15) 12b-1 Distribution Expense Plan - None.
(16) Schedule for Computation of Each Performance Quotation - None.
(17) Financial Data Schedule - None.
(18) Rule 18f-3 Plan - None.
(19) (i) Power of Attorney for Registrant and Certificate with respect
thereto, which were filed as an exhibit to Registrant's Post
Effective Amendment No. 3, are hereby incorporated by reference.
(ii) Powers of Attorney for Trustees and Officers which were filed
as an exhibit to Registrant's Post-Effective Amendment No. 3
are hereby incorporated by reference.
</TABLE>
Item 25. Persons Controlled by or Under Common Control with the Registrant
- -------- -----------------------------------------------------------------
Ramesh C. Jhaveri may be deemed to control both the
Registrant's Adviser, Investments Technology, Inc., (an Ohio
corporation) and the Registrant because he is the controlling
Shareholder of the Adviser and may be deemed to control the
Registrant.
Item 26. Number of Holders of Securities (as of July 31, 1998)
- -------- -----------------------------------------------------
Title of Class Number of Record Holders
-------------- ------------------------
The Jhaveri Value Fund 111
- 2 -
<PAGE> 32
Item 27. Indemnification
- - -------- ---------------
(a) Article VI of the Registrant's Declaration of Trust
provides for indemnification of officers and Trustees
as follows:
SECTION 6.4 INDEMNIFICATION OF
TRUSTEES, OFFICERS, ETC. Subject to and
except as otherwise provided in the
Securities Act of 1933, as amended, and the
1940 Act, the Trust shall indemnify each of
its Trustees and officers (including persons
who serve at the Trust's request as
directors, officers or trustees of another
organization in which the Trust has any
interest as a shareholder, creditor or
otherwise (hereinafter referred to as a
"Covered Person") against all liabilities,
including but not limited to amounts paid in
satisfaction of judgments, in compromise or
as fines and penalties, and expenses,
including reasonable accountants' and
counsel fees, incurred by any Covered Person
in connection with the defense or
disposition of any action, suit or other
proceeding, whether civil or criminal,
before any court or administrative or
legislative body, in which such Covered
Person may be or may have been involved as a
party or otherwise or with which such person
may be or may have been threatened, while in
office or thereafter, by reason of being or
having been such a Trustee or officer,
director or trustee, and except that no
Covered Person shall be indemnified against
any liability to the Trust or its
Shareholders to which such Covered Person
would otherwise be subject by reason of
willful misfeasance, bad faith, gross
negligence or reckless disregard of the
duties involved in the conduct of such
Covered Person's office.
SECTION 6.5 ADVANCES OF EXPENSES.
The Trust shall advance attorneys' fees or
other expenses incurred by a Covered Person
in defending a proceeding to the full extent
permitted by the Securities Act of 1933, as
amended, the 1940 Act, and Ohio Revised Code
Chapter 1707, as amended. In the event any
of these laws conflict with Ohio Revised
Code Section 1701.13(E), as amended, these
laws, and not Ohio Revised Code Section
1701.13(E), shall govern.
SECTION 6.6 INDEMNIFICATION NOT
EXCLUSIVE, ETC. The right of indemnification
provided by this Article VI shall not be
exclusive of or affect any other rights to
which any such Covered Person may be
entitled. As used in this Article VI,
"Covered Person" shall include such person's
heirs, executors and administrators. Nothing
contained in this article shall affect any
rights to indemnification to which personnel
of the Trust, other than Trustees and
- 3 -
<PAGE> 33
officers, and other persons may be entitled
by contract or otherwise under law, nor the
power of the Trust to purchase and maintain
liability insurance on behalf of any such
person.
The Registrant may not pay for insurance which
protects the Trustees and officers against
liabilities rising from action involving willful
misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in the conduct of
their offices.
(b) The Registrant may maintain a standard mutual fund
and investment advisory professional and directors
and officers liability policy. The policy, if
maintained, would provide coverage to the Registrant,
its Trustees and officers, and its Adviser, among
others. Coverage under the policy would include
losses by reason of any act, error, omission,
misstatement, misleading statement, neglect or breach
of duty.
(c) Insofar as indemnification for liabilities arising
under the Securities Act of 1933 may be permitted to
trustees, officers and controlling persons of the
Registrant pursuant to the provisions of Ohio law and
the Agreement and Declaration of the Registrant or
the By-Laws of the Registrant, or otherwise, the
Registrant has been advised that in the opinion of
the Securities and Exchange Commission such
indemnification is against public policy as expressed
in the 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 Trust 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 Act and will be governed by the
final adjudication of such issue.
Item 28. Business and Other Connections of Investment Adviser
- - -------- ----------------------------------------------------
A. Investments Technology, Inc. (the "Adviser") is a
registered investment adviser. It has engaged in no
other business during the past two fiscal years.
B. The following list sets forth the business and other
connections of the Directors and officers of the
Adviser during the past two years.
-4-
<PAGE> 34
(1) Ramesh C. Jhaveri
(a) President, Treasurer, and a
Director of Investments Technology,
Inc., 18820 High Parkway,
Cleveland, Ohio 44116.
(b) Chairman of the Board, Chief
Executive Officer and a Trustee of
The Jhaveri Trust, 18820 High
Parkway, Cleveland, Ohio 44116.
(c) Account Executive, Options
Principal and General Securities Principal
of Financial American Securities, Inc., 925
Euclid Avenue, Cleveland, Ohio 44115.
(2) Nalini R. Jhaveri
(a) Director of Investment Technology,
Inc., 18820 High Parkway,
Cleveland, Ohio 44116.
(b) President of Nalini R. Jhaveri,
M.D., Inc., 25125 Detroit Road,
Westlake, Ohio 44145.
(3) Saumil Jhaveri
(a) Secretary, Director and Vice
President of Investments
Technology, Inc., 18820 High
Parkway, Cleveland, Ohio 44116.
(b) President, Secretary, Treasurer and
a Trustee of The Jhaveri Trust,
18820 High Parkway, Cleveland, Ohio
44116.
Item 29. Principal Underwriters
- -------- ----------------------
(a) Maxus Securities Corp., the Registrant's underwriter,
acts as underwriter for Maxus Income Fund, Maxus Ohio
Heartland Fund, Maxus Aggressive Value Fund, Maxus
Equity Fund and Maxus Laureate Fund, The Tower at
Erieview, 36th Floor, 1301 East Ninth Street,
Cleveland, Ohio 44114, and Empirical Growth Fund,
1512 Alton Road, Suite 364, Miami Beach, Florida
33139.
(b) The following list sets forth the business address,
and positions with the Underwriter and Registrant, of
each director and officer of the Underwriter.
(1) Richard A. Barone, The Tower at
Erieview, 36th Floor, 1301 East Ninth Street,
Cleveland, Ohio 44114.
(a) President, Treasurer and a director
of Maxus Securities Corp.
(b) No positions with the Registrant.
-5-
<PAGE> 35
(2) Robert W. Curtin, The Tower at
Erieview, 36th Floor, 1301 East Ninth Street,
Cleveland, Ohio 44114.
(a) Secretary and a Director of Maxus
Securities Corp.
(b) No positions with the Registrant.
(3) Robert F. Pincus, The Tower at
Erieview, 36th Floor, 1301 East Ninth Street,
Cleveland, Ohio 44114.
(a) Vice-President and a Director of
Maxus Securities Corp.
(b) No positions with the Registrant.
Item 30. Location of Accounts and Records
- -------- --------------------------------
Accounts, books and other documents required to be maintained
by Section 31(a) of the Investment Company Act of 1940 and the
Rules promulgated thereunder will be maintained by the
Registrant at 18820 High Parkway, Cleveland, Ohio 44116 and/or
by the Registrant's Custodian, Star Bank, N.A., 425 Walnut
Street, Cincinnati, Ohio 45202, or transfer and shareholder
service agent, Maxus Information Systems, Inc., The Tower at
Erieview, 36th Floor, 1301 East Ninth Street, Cleveland, Ohio
44114.
Item 31. Management Services Not Discussed in Parts A or B
- -------- -------------------------------------------------
None.
Item 32. Undertakings
- -------- ------------
(a) Not Applicable.
(b) Not Applicable.
(c) The Registrant hereby undertakes to furnish each
person to whom a prospectus is delivered a copy of
the Registrant's latest annual report to
shareholders, upon request and without charge.
(d) The Registrant hereby undertakes that, within five
business days after receipt of a written application
by ten or more shareholders holding in the aggregate
at least 1% of the shares then outstanding or shares
then having a net asset value of $25,000, whichever
is less, each of whom shall have been a shareholder
for at least six months prior to the date of
application (hereinafter the "Petitioning
Shareholders"), requesting to communicate with other
shareholders with a view to obtaining signatures to a
request for a meeting for the purpose of voting upon
such removal of any Trustee of the Registrant, which
applicant shall be accompanied by a form of
communication and request which such Petitioning
Shareholders wish to transmit, Registrant will:
- 6 -
<PAGE> 36
(i) provide such Petitioning
Shareholders with access to a list
of the names and addresses of all
shareholders of the Registrant; or
(ii) inform such Petitioning
Shareholders of the approximate
number of shareholders and the
estimated costs of mailing such
communication, and to undertake such
mailing promptly after tender by
such Petitioning Shareholders to the
Registrant of the material to be
mailed and the reasonable expenses
of such mailing.
The Registrant also undertakes to promptly call a
meeting for the purpose of voting upon the question
of the removal of any Trustee when requested in
writing to do so by the record holders of not less
than 10% of the outstanding shares.
- 7 -
<PAGE> 37
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
requirements for effectiveness of this Post-Effective Amendment to its
Registration Statement pursuant to Rule 485 (b) under the Securities Act of 1933
and has duly caused this Registration Statement to be signed on its behalf by
the undersigned, thereunto duly authorized, in the City of Cincinnati, State of
Ohio, on the 11th day of August, 1998.
THE JHAVERI TRUST
By: /s/ Donald S. Mendelsohn
_______________________
Donald S. Mendelsohn,
Attorney-in-Fact
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.
Ramesh C. Jhaveri Chief Executive Officer,
Chairman of the Board
and Trustee
Saumil R. Jhaveri President, Treasurer and
Trustee
Mukul M. Mehta Trustee
David R. Zavagno Trustee
James F. Mueller Trustee
By: /s/ Donald S. Mendelsohn
_______________________
Donald S. Mendelsohn,
Attorney-in-Fact
August 11, 1998
-8-
<PAGE> 38
EXHIBIT INDEX
-------------
PAGE
----
1. Declaration of Trust.............................................EX-99.B1
2. Management Agreement.............................................EX-99.B5
3. Custody Agreement................................................EX-99.B8
4. Consent of McCurdy & Associates..................................EX-99.B11
5. Letter of Initial Stockholder....................................EX-99.B13
- 9 -
<PAGE>
THE JHAVERI TRUST
AGREEMENT AND DECLARATION OF TRUST
January 17, 1995
<PAGE>
THE JHAVERI TRUST
AGREEMENT AND DECLARATION OF TRUST
TABLE OF CONTENTS
ARTICLE I - NAME AND DEFINITIONS . . . . . . . . . . . . . . . . . . 1
Section 1.1 Name and Principal Office. . . . . . . . . . . . 1
Section 1.2 Definitions. . . . . . . . . . . . . . . . . . . 1
(a) The "Trust" . . . . . . . . . . . . . . . . . . . . . 1
(b) "Trustees". . . . . . . . . . . . . . . . . . . . . . 1
(c) "Shares". . . . . . . . . . . . . . . . . . . . . . . 1
(d) "Series". . . . . . . . . . . . . . . . . . . . . . . 1
(e) "Shareholder" . . . . . . . . . . . . . . . . . . . . 2
(f) The "1940 Act". . . . . . . . . . . . . . . . . . . . 2
(g) "Commission". . . . . . . . . . . . . . . . . . . . . 2
(h) "Declaration of Trust". . . . . . . . . . . . . . . . 2
(i) "By-Laws" . . . . . . . . . . . . . . . . . . . . . . 2
ARTICLE II - PURPOSE OF TRUST. . . . . . . . . . . . . . . . . . . . 2
ARTICLE III - THE TRUSTEES . . . . . . . . . . . . . . . . . . . . . 2
Section 3.1 Number, Designation, Election, Term, etc.. . . . 2
(a) Initial Trustees. . . . . . . . . . . . . . . . . . . 2
(b) Number. . . . . . . . . . . . . . . . . . . . . . . . 2
(c) Term. . . . . . . . . . . . . . . . . . . . . . . . . 2
(d) Resignation and Retirement. . . . . . . . . . . . . . 3
(e) Removal . . . . . . . . . . . . . . . . . . . . . . . 3
(f) Vacancies . . . . . . . . . . . . . . . . . . . . . . 3
(g) Effect of Death, Resignation, etc.. . . . . . . . . . 3
(h) No Accounting . . . . . . . . . . . . . . . . . . . . 3
Section 3.2 Powers of Trustees . . . . . . . . . . . . . . . 4
(a) Investments . . . . . . . . . . . . . . . . . . . . . 4
(b) Disposition of Assets . . . . . . . . . . . . . . . . 4
(c) Ownership Powers. . . . . . . . . . . . . . . . . . . 4
(d) Subscription. . . . . . . . . . . . . . . . . . . . . 5
(e) Form of Holding . . . . . . . . . . . . . . . . . . . 5
(f) Reorganization, etc.. . . . . . . . . . . . . . . . . 5
(g) Voting Trusts, etc. . . . . . . . . . . . . . . . . . 5
(h) Compromise. . . . . . . . . . . . . . . . . . . . . . 5
(i) Partnerships, etc.. . . . . . . . . . . . . . . . . . 5
(j) Borrowing and Security. . . . . . . . . . . . . . . . 5
<PAGE>
(k) Guarantees, etc.. . . . . . . . . . . . . . . . . . . 5
(l) Insurance . . . . . . . . . . . . . . . . . . . . . . 5
(m) Pensions, etc.. . . . . . . . . . . . . . . . . . . . 6
Section 3.3 Certain Contracts. . . . . . . . . . . . . . . . 6
(a) Advisory. . . . . . . . . . . . . . . . . . . . . . . 6
(b) Administration. . . . . . . . . . . . . . . . . . . . 7
(c) Distribution. . . . . . . . . . . . . . . . . . . . . 7
(d) Custodian and Depository. . . . . . . . . . . . . . . 7
(e) Transfer and Dividend Disbursing Agency . . . . . . . 7
(f) Shareholder Servicing . . . . . . . . . . . . . . . . 7
(g) Accounting. . . . . . . . . . . . . . . . . . . . . . 7
Section 3.4 Payment of Trust Expenses and Compensation of
Trustees . . . . . . . . . . . . . . . . . . . . 8
Section 3.5 Ownership of Assets of the Trust . . . . . . . . 8
ARTICLE IV - SHARES. . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 4.1 Description of Shares. . . . . . . . . . . . . . 8
Section 4.2 Establishment and Designation of Series. . . . . 10
(a) Assets Belonging to Series. . . . . . . . . . . . . . 10
(b) Liabilities Belonging to Series . . . . . . . . . . . 10
(c) Dividends . . . . . . . . . . . . . . . . . . . . . . 11
(d) Liquidation . . . . . . . . . . . . . . . . . . . . . 12
(e) Voting. . . . . . . . . . . . . . . . . . . . . . . . 12
(f) Redemption by Shareholder . . . . . . . . . . . . . . 12
(g) Redemption by Trust . . . . . . . . . . . . . . . . . 12
(h) Net Asset Value . . . . . . . . . . . . . . . . . . . 13
(i) Transfer. . . . . . . . . . . . . . . . . . . . . . . 13
(j) Equality. . . . . . . . . . . . . . . . . . . . . . . 13
(k) Fractions . . . . . . . . . . . . . . . . . . . . . . 14
(l) Conversion Rights . . . . . . . . . . . . . . . . . . 14
Section 4.3 Ownership of Shares. . . . . . . . . . . . . . . 14
Section 4.4 Investments in the Trust . . . . . . . . . . . . 14
Section 4.5 No Preemptive Rights . . . . . . . . . . . . . . 14
Section 4.6 Status of Shares and Limitation of Personal
Liability . . . . . . . . . . . . . . . . . . . 14
<PAGE>
ARTICLE V - SHAREHOLDERS' VOTING POWERS AND MEETINGS . . . . . . . . 15
Section 5.1 Voting Powers. . . . . . . . . . . . . . . . . . 15
Section 5.2 Meetings . . . . . . . . . . . . . . . . . . . . 15
Section 5.3 Record Dates . . . . . . . . . . . . . . . . . . 15
Section 5.4 Quorum and Required Vote . . . . . . . . . . . . 16
Section 5.5 Action by Written Consent. . . . . . . . . . . . 16
Section 5.6 Inspection of Records. . . . . . . . . . . . . . 16
Section 5.7 Additional Provisions. . . . . . . . . . . . . . 16
ARTICLE VI - LIMITATION OF LIABILITY; INDEMNIFICATION. . . . . . . . 16
Section 6.1 Trustees, Shareholders, etc. Not Personally
Liable; Notice . . . . . . . . . . . . . . . . 16
Section 6.2 Trustee's Good Faith Action; Expert Advice; No
Bond or Surety . . . . . . . . . . . . . . . . 17
Section 6.3 Indemnification of Shareholders. . . . . . . . . 17
Section 6.4 Indemnification of Trustees, Officers, etc.. . . 18
Section 6.5 Advances of Expenses . . . . . . . . . . . . . . 18
Section 6.6 Indemnification Not Exclusive, etc.. . . . . . . 18
Section 6.7 Liability of Third Persons Dealing with Trustees 18
ARTICLE VII - MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . 18
Section 7.1 Duration and Termination of Trust. . . . . . . . 18
Section 7.2 Reorganization . . . . . . . . . . . . . . . . . 19
Section 7.3 Amendments . . . . . . . . . . . . . . . . . . . 19
Section 7.4 Filing of Copies; References; Headings . . . . . 20
Section 7.5 Applicable Law . . . . . . . . . . . . . . . . . 20
<PAGE>
THE JHAVERI TRUST
AGREEMENT AND DECLARATION OF TRUST
AGREEMENT AND DECLARATION OF TRUST made at Cleveland this 17th day of
January, 1995, by the Trustees hereunder, and by the holders of Shares of
beneficial interest to be issued hereunder as hereinafter provided.
WITNESSETH:
WHEREAS, this Trust is being formed to carry on the business of an
investment company; and
WHEREAS, the Trustees have agreed to manage all property coming into their
hands as trustees of an Ohio business trust in accordance with the provisions
hereinafter set forth.
NOW, THEREFORE, the Trustees hereby declare that they will hold all cash,
securities and other assets which they may from time to time acquire in any
manner as Trustees hereunder IN TRUST to manage and dispose of the same upon the
following terms and conditions for the benefit of the holders from time to time
of shares of beneficial interest in this Trust as hereinafter set forth.
ARTICLE I
NAME AND DEFINITIONS
Section 1.1 Name and Principal Office. This Trust shall be known as
"The Jhaveri Trust" and the Trustees shall conduct the business of the Trust
under that name or any other name as they may from time to time determine.
Section 1.2 Definitions. Whenever used herein, unless otherwise
required by the context or specifically provided:
(a) The "Trust" refers to the Ohio business trust established by this
Agreement and Declaration of Trust, as amended from time to time;
(b) "Trustees" refers to the Trustees of the Trust named herein or
elected in accordance with Article III;
(c) "Shares" refers to the transferable units of interest into which
the beneficial interest in the Trust or any series of the Trust (as
the context may require) shall be divided from time to time;
(d) "Series" refers to Series of Shares established and designated
under or in accordance with the provisions of Article IV;
(e) "Class" refers to a class or sub-series of any Series of Shares
established and designated under and in accordance with the provisions
of Article IV;
(f) "Shareholder" means a record owner of Shares;
<PAGE>
(g) The "1940 Act" refers to the Investment Company Act of 1940 and
the Rules and Regulations thereunder, all as amended from time to
time;
(h) "Commission" shall have the meaning given it in the 1940 Act;
(i) "Declaration of Trust" shall mean this Agreement and Declaration
of Trust as amended or restated from time to time; and
(j) "By-Laws" shall mean the By-Laws of the Trust as amended from
time to time.
ARTICLE II
PURPOSE OF TRUST
The purpose of the Trust is to operate as an investment company, to offer
Shareholders one or more investment programs primarily in securities and debt
instruments and to engage in any and all lawful acts or activities for which
business trusts may be formed under Chapter 1746 of the Ohio Revised Code.
ARTICLE III
THE TRUSTEES
Section 3.1 Number, Designation, Election, Term, etc.
(a) Initial Trustees. Upon his execution of this Declaration of
Trust or a counterpart hereof or some other writing in which he
accepts such Trusteeship and agrees to the provisions hereof, Ramesh
C. Jhaveri shall become Trustee hereof.
(b) Number. The Trustees serving as such, whether named above or
hereafter becoming a Trustee, may increase or decrease the number of
Trustees to a number other than the number theretofore determined. No
decrease in the number of Trustees shall have the effect of removing
any Trustee from office prior to the expiration of his term, but the
number of Trustees may be decreased in conjunction with the removal of
a Trustee pursuant to subsection (e) of this Section 3.1.
(c) Term. Each Trustee shall serve as a Trustee during the lifetime
of the Trust and until its termination as hereinafter provided or
until such Trustee sooner dies, resigns, retires or is removed. The
Trustees may elect their own successors and may, pursuant to Section
3.1(f) hereof, appoint Trustees to fill vacancies; provided that,
immediately after filling a vacancy, at least two-thirds of the
Trustees then holding office shall have been elected to such office by
the Shareholders at an annual or special meeting. If at any time less
than a majority of the Trustees then holding office were so elected,
the Trustees shall forthwith cause to be held as promptly as possible,
and in any event within 60 days, a meeting of Shareholders for the
purpose of electing Trustees to fill any existing vacancies.
(d) Resignation and Retirement. Any Trustee may resign his trust or
retire as a Trustee, by written instrument signed by him and delivered
to the other Trustees or to any officer of the Trust, and such
resignation or retirement shall take effect upon such delivery or upon
<PAGE>
such later date as is specified in such instrument.
(e) Removal. Any Trustee may be removed with or without cause at any
time: (i) by written instrument, signed by at least two-thirds of the
number of Trustees prior to such removal, specifying the date upon
which such removal shall become effective, (ii) by vote of the
Shareholders holding not less than two-thirds of the Shares then
outstanding, cast in person or by proxy at any meeting called for the
purpose, or (iii) by a declaration in writing signed by Shareholders
holding not less than two-thirds of the Shares then outstanding and
filed with the Trust's Custodian.
(f) Vacancies. Any vacancy or anticipated vacancy resulting from any
reason, including without limitation the death, resignation,
retirement, removal or incapacity of any of the Trustees, or resulting
from an increase in the number of Trustees by the Trustees may (but so
long as there are at least three remaining Trustees, need not unless
required by the 1940 Act) be filled either by a majority of the
remaining Trustees through the appointment in writing of such other
person as such remaining Trustees in their discretion shall determine
(unless a shareholder election is required by the 1940 Act) or by the
election by the Shareholders, at a meeting called for the purpose, of
a person to fill such vacancy, and such appointment or election shall
be effective upon the written acceptance of the person named therein
to serve as a Trustee and agreement by such person to be bound by the
provisions of this Declaration of Trust, except that any such
appointment or election in anticipation of a vacancy to occur by
reason of retirement, resignation, or increase in number of Trustees
to be effective at a later date shall become effective only at or
after the effective date of said retirement, resignation, or increase
in number of Trustees. As soon as any Trustee so appointed or elected
shall have accepted such appointment or election and shall have agreed
in writing to be bound by this Declaration of Trust and the
appointment or election is effective, the Trust estate shall vest in
the new Trustee, together with the continuing Trustees, without any
further act or conveyance.
(g) Effect of Death, Resignation, etc. The death, resignation,
retirement, removal, or incapacity of the Trustees, or any one of
them, shall not operate to annul or terminate the Trust or to revoke
or terminate any existing agency or contract created or entered into
pursuant to the terms of this Declaration of Trust.
(h) No Accounting. Except to the extent required by the 1940 Act or
under circumstances which would justify his removal for cause, no
person ceasing to be a Trustee as a result of his death, resignation,
retirement, removal or incapacity (nor the estate of any such person)
shall be required to make an accounting to the Shareholders or
remaining Trustees upon such cessation.
Section 3.2 Powers of Trustees. Subject to the provisions of this
Declaration of Trust, the business of the Trust shall be managed by the
Trustees, and they shall have all powers necessary or convenient to carry out
that responsibility and the purpose of the Trust. Without limiting the
foregoing, the Trustees may adopt By-Laws not inconsistent with this Declaration
of Trust providing for the conduct of the business and affairs of the Trust and
may amend and repeal them to the extent that such By-Laws do not reserve that
right to the Shareholders; they may as they consider appropriate elect and
<PAGE>
remove officers and appoint and terminate agents and consultants and hire and
terminate employees, any one or more of the foregoing of whom may be a Trustee,
and may provide for the compensation of all of the foregoing; they may appoint
from their own number, and terminate, any one or more committees consisting of
two or more Trustees, including without implied limitation an executive
committee, which may, when the Trustees are not in session and subject to the
1940 Act, exercise some or all of the power and authority of the Trustees as the
Trustees may determine; in accordance with Section 3.3 they may employ one or
more Advisers, Administrators, Depositories and Custodians and may authorize any
Depository or Custodian to employ subcustodians or agents and to deposit all or
any part of such assets in a system or systems for the central handling of
securities and debt instruments, retain transfer, dividend, accounting or
Shareholder servicing agents or any of the foregoing, provide for the
distribution of Shares by the Trust through one or more distributors, principal
underwriters or otherwise, set record dates or times for the determination of
Shareholders or certain of them with respect to various matters; they may
compensate or provide for the compensation of the Trustees, officers, advisers,
administrators, custodians, other agents, consultants and employees of the Trust
or the Trustees on such terms as they deem appropriate; and in general they may
delegate to any officer of the Trust, to any committee of the Trustees and to
any employee, adviser, administrator, distributor, principal underwriter,
depository, custodian, transfer and dividend disbursing agent, or any other
agent or consultant of the Trust such authority, powers, functions and duties as
they consider desirable or appropriate for the conduct of the business and
affairs of the Trust, including without implied limitation the power and
authority to act in the name of the Trust and of the Trustees, to sign documents
and to act as attorney-in-fact for the Trustees.
Without limiting the foregoing and to the extent not inconsistent with the
1940 Act or other applicable law, the Trustees shall have power and authority:
(a) Investments. To invest and reinvest cash and other property, and
to hold cash or other property uninvested without in any event being
bound or limited by any present or future law or custom in regard to
investments by trustees;
(b) Disposition of Assets. To sell, exchange, lend, pledge,
mortgage, hypothecate, write options on and lease any or all of the
assets of the Trust;
(c) Ownership Powers. To vote or give assent, or exercise any rights
of ownership, with respect to stock or other securities, debt
instruments or property; and to execute and deliver proxies or powers
of attorney to such person or persons as the Trustees shall deem
proper, granting to such person or persons such power and discretion
with relation to securities, debt instruments or property as the
Trustees shall deem proper;
(d) Subscription. To exercise powers and rights of subscription or
otherwise which in any manner arise out of ownership of securities or
debt instruments;
(e) Form of Holding. To hold any security, debt instrument or
property in a form not indicating any trust, whether in bearer,
unregistered or other negotiable form, or in the name of the Trustees
or of the Trust or in the name of a custodian, subcustodian or other
depository or a nominee or nominees or otherwise;
(f) Reorganization, etc. To consent to or participate in any plan
for the reorganization, consolidation or merger of any corporation or
issuer, any security or debt instrument of which is or was held in the
Trust; to consent to any contract, lease, mortgage, purchase or sale
of property by such corporation or issuer, and to pay calls or
<PAGE>
subscriptions with respect to any security or debt instrument held in
the Trust;
(g) Voting Trusts, etc. To join with other holders of any securities
or debt instruments in acting through a committee, depository, voting
trustee or otherwise, and in that connection to deposit any security
or debt instrument with, or transfer any security or debt instrument
to, any such committee, depository or trustee, and to delegate to them
such power and authority with relation to any security or debt
instrument (whether or not so deposited or transferred) as the
Trustees shall deem proper, and to agree to pay, and to pay, such
portion of the expenses and compensation of such committee, depository
or trustee as the Trustees shall deem proper;
(h) Compromise. To compromise, arbitrate or otherwise adjust claims
in favor of or against the Trust or any matter in controversy,
including but not limited to claims for taxes;
(i) Partnerships, etc. To enter into joint ventures, general or
limited partnerships and any other combinations or associations;
(j) Borrowing and Security. To borrow funds and to mortgage and
pledge the assets of the Trust or any part thereof to secure
obligations arising in connection with such borrowing;
(k) Guarantees, etc. To endorse or guarantee the payment of any
notes or other obligations of any person; to make contracts of
guaranty or suretyship, or otherwise assume liability for payment
thereof; and to mortgage and pledge the Trust property or any part
thereof to secure any of or all such obligations;
(l) Insurance. To purchase and pay for entirely out of Trust
property such insurance as they may deem necessary or appropriate for
the conduct of the business, including, without limitation, insurance
policies insuring the assets of the Trust and payment of distributions
and principal on its portfolio investments, and insurance policies
insuring the Shareholders, Trustees, officers, employees, agents,
consultants, investment advisers, managers, administrators,
distributors, principal underwriters, or independent contractors, or
any thereof (or any person connected therewith), of the Trust
individually against all claims and liabilities of every nature
arising by reason of holding, being or having held any such office or
position, or by reason of any action alleged to have been taken or
omitted by any such person in any such capacity, including any action
taken or omitted that may be determined to constitute negligence;
provided, however, that insurance which protects the Trustees and
officers against liabilities rising from action involving willful
misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of their offices may not be purchased;
and
(m) Pensions, etc. To pay pensions for faithful service, as deemed
appropriate by the Trustees, and to adopt, establish and carry out
pension, profit-sharing, share bonus, share purchase, savings, thrift
and other retirement, incentive and benefit plans, trusts and
provisions, including the purchasing of life insurance and annuity
contracts as a means of providing such retirement and other benefits,
for any or all of the Trustees, officers, employees and agents of the
Trust.
<PAGE>
Except as otherwise provided by the 1940 Act or other applicable law, this
Declaration of Trust or the By-Laws, any action to be taken by the Trustees may
be taken by a majority of the Trustees present at a meeting of Trustees (a
quorum, consisting of at least a majority of the Trustees then in office, being
present), within or without Ohio, including any meeting held by means of a
conference telephone or other communications equipment by means of which all
persons participating in the meeting can hear each other at the same time and
participation by such means shall constitute presence in person at a meeting, or
by written consents of a majority of the Trustees then in office (or such larger
or different number as may be required by the 1940 Act or other applicable law).
Section 3.3 Certain Contracts. Subject to compliance with the
provisions of the 1940 Act, but notwithstanding any limitations of present and
future law or custom in regard to delegation of powers by trustees generally,
the Trustees may, at any time and from time to time and without limiting the
generality of their powers and authority otherwise set forth herein, enter into
one or more contracts with any one or more corporations, trusts, associations,
partnerships, limited partnerships, other type of organizations, or individuals
("Contracting Party") to provide for the performance and assumption of some or
all of the following services, duties and responsibilities to, for or of the
Trust and/or the Trustees, and to provide for the performance and assumption of
such other services, duties and responsibilities in addition to those set forth
below as the Trustees may determine appropriate:
(a) Advisory. Subject to the general supervision of the Trustees and
in conformity with the stated policy of the Trustees with respect to
the investments of the Trust or of the assets belonging to any Series
of Shares of the Trust (as that phrase is defined in subsection (a) of
Section 4.2), to manage such investments and assets, make investment
decisions with respect thereto, and to place purchase and sale orders
for portfolio transactions relating to such investments and assets;
(b) Administration. Subject to the general supervision of the
Trustees and in conformity with any policies of the Trustees with
respect to the operations of the Trust, to supervise all or any part
of the operations of the Trust, and to provide all or any part of the
administrative and clerical personnel, office space and office
equipment and services appropriate for the efficient administration
and operations of the Trust;
(c) Distribution. To distribute the Shares of the Trust, to be
principal underwriter of such Shares, and/or to act as agent of the
Trust in the sale of Shares and the acceptance or rejection of orders
for the purchase of Shares;
(d) Custodian and Depository. To act as depository for and to
maintain custody of the property of the Trust and accounting records
in connection therewith;
(e) Transfer and Dividend Disbursing Agency. To maintain records of
the ownership of outstanding Shares, the issuance and redemption and
the transfer thereof, and to disburse any dividends declared by the
Trustees and in accordance with the policies of the Trustees and/or
the instructions of any particular Shareholder to reinvest any such
dividends;
(f) Shareholder Servicing. To provide service with respect to the
relationship of the Trust and its Shareholders, records with respect
to Shareholders and their Shares, and similar matters; and
<PAGE>
(g) Accounting. To handle all or any part of the accounting
responsibilities, whether with respect to the Trust's properties,
Shareholders or otherwise.
The same person may be the Contracting Party for some or all of the services,
duties and responsibilities to, for and of the Trust and/or the Trustees, and
the contracts with respect thereto may contain such terms interpretive of or in
addition to the delineation of the services, duties and responsibilities
provided for, including provisions that are not inconsistent with the 1940 Act
relating to the standard of duty of and the rights to indemnification of the
Contracting Party and others, as the Trustees may determine. Nothing herein
shall preclude, prevent or limit the Trust or a Contracting Party from entering
into subcontractual arrangements relative to any of the matters referred to in
Sections 3.3(a) through (g) hereof.
Subject to the provisions of the 1940 Act, the fact that:
(i) any of the Shareholders, Trustees or officers of the Trust is a
shareholder, director, officer, partner, trustee, employee, manager,
adviser, principal underwriter or distributor or agent of or for any
Contracting Party, or of or for any parent or affiliate of any Contracting
Party or that the Contracting Party or any parent or affiliate thereof is a
Shareholder or has an interest in the Trust, or that
(ii) any Contracting Party may have a contract providing for the
rendering of any similar services to one or more other corporations,
trusts, associations, partnerships, limited partnerships or other
organizations, or has other business or interests,
shall not affect the validity of any contract for the performance and assumption
of services, duties and responsibilities to, for or of the Trust and/or the
Trustees or disqualify any Shareholder, Trustee or officer of the Trust from
voting upon or executing the same or create any liability or accountability to
the Trust or its Shareholders, provided that in the case of any relationship or
interest referred to in the preceding clause (i) on the part of any Trustee or
officer of the Trust either (l) the material facts as to such relationship or
interest have been disclosed to or are known by the Trustees not having any such
relationship or interest and the contract involved is approved in good faith
reasonably justified by such facts by a majority of such Trustees not having any
such relationship or interest (even though such unrelated or disinterested
Trustees are less than a quorum of all of the Trustees), (2) the material facts
as to such relationship or interest and as to the contract have been disclosed
to or are known by the Shareholders not having such relationship or interest and
who are entitled to vote thereon and the contract involved is specifically
approved in good faith by majority vote of such Shareholders, or (3) the
specific contract involved is fair to the Trust as of the time it is authorized,
approved or ratified by the Trustees or by such Shareholders.
Section 3.4 Payment of Trust Expenses and Compensation of Trustees. The
Trustees are authorized to pay or to cause to be paid out of the principal or
income of the Trust, or partly out of principal and partly out of income, and to
charge or allocate the same to, between or among such one or more of the Series
and Classes that may be established and designated pursuant to Article IV, as
the Trustees deem fair, all expenses, fees, charges, taxes and liabilities
incurred or arising in connection with the Trust, or in connection with the
management thereof, including, but not limited to, the Trustees' compensation
and such expenses and charges for the services of the Trust's officers,
employees, investment adviser, administrator, distributor, principal
<PAGE>
underwriter, auditor, counsel, depository, custodian, transfer agent, dividend
disbursing agent, accounting agent, Shareholder servicing agent, and such other
agents, consultants, and independent contractors and such other expenses and
charges as the Trustees may deem necessary or proper to incur. Without limiting
the generality of any other provision hereof, the Trustees shall be entitled to
reasonable compensation from the Trust for their services as Trustees and may
fix the amount of such compensation.
Section 3.5 Ownership of Assets of the Trust. Title to all of the
assets of the Trust shall at all times be considered as vested in the Trustees.
ARTICLE IV
SHARES
Section 4.1 Description of Shares. The beneficial interest in the Trust
shall be divided into Shares, all without par value and of one class, but the
Trustees shall have the authority from time to time to divide the class of
Shares into two or more Series of Shares (including without limitation the
Series specifically established and designated in Section 4.2), as they deem
necessary or desirable, to establish and designate such Series, and to fix and
determine the relative rights and preferences as between the different Series of
Shares as to right of redemption and the price, terms and manner of redemption,
special and relative rights as to dividends and other distributions and on
liquidation, sinking or purchase fund provisions, conversion rights, and
conditions under which the several Series shall have separate voting rights or
no voting rights. Except as aforesaid all Shares of the different Series shall
be identical.
The Shares of each Series may be issued or reissued from time to time in
one or more Sub-Series ("Sub-Series"), as determined by the Board of Trustees
pursuant to resolution. Each Sub-Series shall be appropriately designated,
prior to the issuance of any shares thereof, by some distinguishing letter,
number or title. All Shares within a Sub-Series shall be alike in every
particular. All Shares of each Series shall be of equal rank and have the same
powers, preferences and rights, and shall be subject to the same qualifications,
limitations and restrictions without distinction between the shares of different
Sub-Series thereof, except with respect to such differences among such Sub-
Series, as the Board of Trustees shall from time to time determine to be
necessary or desirable, including differences in the rate or rates of dividends
or distributions. The Board of Trustees may from time to time increase the
number of Shares allocated to any Sub-Series already created by providing that
any unissued Shares of the applicable Series shall constitute part of such Sub-
Series, or may decrease the number of Shares allocated to any Sub-Series already
created by providing that any unissued Shares previously assigned to such Sub-
Series shall no longer constitute part thereof. The Board of Trustees is hereby
empowered to classify or reclassify from time to time any unissued Shares of
each Series by fixing or altering the terms thereof and by assigning such
unissued shares to an existing or newly created Sub-Series. Notwithstanding
anything to the contrary in this paragraph the Board of Trustees is hereby
empowered (i) to redesignate any issued Shares of any Series by assigning a
distinguishing letter, number or title to such shares and (ii) to reclassify all
or any part of the issued Shares of any Series to make them part of an existing
or newly created Sub-Series.
The number of authorized Shares and the number of Shares of each Series
that may be issued is unlimited, and the Trustees may issue Shares of any Series
for such consideration and on such terms as they may determine (or for no
consideration if pursuant to a Share dividend or split-up), all without action
or approval of the Shareholders. All Shares when so issued on the terms
determined by the Trustees shall be fully paid and non-assessable (but may be
subject to mandatory contribution back to the Trust as provided in subsection
<PAGE>
(h) of Section 4.2). The Trustees may classify or reclassify any unissued
Shares or any Shares previously issued and reacquired of any Series into one or
more Series that may be established and designated from time to time. The
Trustees may hold as treasury Shares (of the same or some other Series), reissue
for such consideration and on such terms as they may determine, or cancel, at
their discretion from time to time, any Shares of any Series reacquired by the
Trust.
The Trustees may from time to time close the transfer books or establish
record dates and times for the purposes of determining the holders of Shares
entitled to be treated as such, to the extent provided or referred to in Section
5.3.
The establishment and designation of any Series of Shares in addition to
those established and designated in Section 4.2 or of any Sub-Series of Shares
shall be effective upon the execution by a majority of the then Trustees of an
instrument setting forth such establishment and designation and the relative
rights and preferences of such Series or Sub-Series, or as otherwise provided in
such instrument. At any time that there are no Shares outstanding of any
particular Series or Sub-Series previously established and designated the
Trustees may by an instrument executed by a majority of their number abolish
that Series or Sub-Series and the establishment and designation thereof. Each
instrument referred to in this paragraph shall have the status of an amendment
to this Declaration of Trust.
Any Trustee, officer or other agent of the Trust, and any organization in
which any such person is interested may acquire, own, hold and dispose of Shares
of any Series of the Trust to the same extent as if such person were not a
Trustee, officer or other agent of the Trust; and the Trust may issue and sell
or cause to be issued and sold and may purchase Shares of any Series from any
such person or any such organization subject only to the general limitations,
restrictions or other provisions applicable to the sale or purchase of Shares of
such Series generally.
Section 4.2 Establishment and Designation of Series. Without limiting
the authority of the Trustees set forth in Section 4.1 to establish and
designate any further Series, the Trustees hereby establish and designate one
Series of Shares: the "Jhaveri Value Fund." The Shares of these Series and any
Shares of any further Series that may from time to time be established and
designated by the Trustees shall (unless the Trustees otherwise determine with
respect to some further Series or Sub-Series at the time of establishing and
designating the same) have the following relative rights and preferences:
(a) Assets Belonging to Series. All consideration received by the
Trust for the issuance or sale of Shares of a particular Series,
together with all assets in which such consideration is invested or
reinvested, all income, earnings, profits, and proceeds thereof,
including any proceeds derived from the sale, exchange or liquidation
of such assets, and any funds or payments derived from any
reinvestment of such proceeds in whatever form the same may be, shall
irrevocably belong to that Series for all purposes, subject only to
the rights of creditors, and shall be so recorded upon the books of
account of the Trust. Such consideration, assets, income, earnings,
profits and proceeds thereof, including any proceeds derived from the
sale, exchange or liquidation of such assets, and any funds or
payments derived from any reinvestment of such proceeds, in whatever
form the same may be, together with any General Items allocated to
that Series as provided in the following sentence, are herein referred
to as "assets belonging to" that Series. In the event that there are
any assets, income, earnings, profits, and proceeds thereof, funds, or
payments which are not readily identifiable as belonging to any
particular Series (collectively "General Items"), the Trustees shall
allocate such General Items to and among any one or more of the Series
<PAGE>
established and designated from time to time in such manner and on
such basis as they, in their sole discretion, deem fair and equitable;
and any General Items so allocated to a particular Series shall belong
to that Series. Each such allocation by the Trustees shall be
conclusive and binding upon the Shareholders of all Series for all
purposes.
The Trustees shall have full discretion, to the extent not
inconsistent with the 1940 Act, to determine which items shall be
treated as income and which items as capital; and each such
determination and allocation shall be conclusive and binding upon the
Shareholders.
(b) Liabilities Belonging to Series. The assets belonging to each
particular Series and Sub-Series thereof shall be charged with the
liabilities of the Trust in respect of that Series or Sub-Series and
all expenses, costs, charges and reserves attributable to that Series
or Sub-Series, and any general liabilities, expenses, costs, charges
or reserves of the Trust which are not readily identifiable as
belonging to any particular Series or Sub-Series shall be allocated
and charged by the Trustees to and among any one or more of the Series
and Sub-Series established and designated from time to time in such
manner and on such basis as the Trustees in their sole discretion deem
fair and equitable. The liabilities, expenses, costs, charges and
reserves allocated and so charged to a Series or Sub-Series are herein
referred to as "liabilities belonging to" that Series or Sub-Series.
Each allocation of liabilities, expenses, costs, charges and reserves
by the Trustees shall be conclusive and binding upon the Shareholders
of all Series for all purposes.
(c) Dividends. Dividends and distributions on Shares of a particular
Series may be paid with such frequency as the Trustees may determine,
which may be daily or otherwise pursuant to a standing resolution or
resolutions adopted only once or with such frequency as the Trustees
may determine, to the holders of Shares of that Series, from such of
the estimated income and capital gains, accrued or realized, from the
assets belonging to that Series, as the Trustees may determine, after
providing for actual and accrued liabilities belonging to that Series.
All dividends and distributions on Shares of a particular Series shall
be distributed pro rata to the holders of that Series in proportion to
the number of Shares of that Series held by such holders at the date
and time of record established for the payment of such dividends or
distributions, except that in connection with any dividend or
distribution program or procedure the Trustees may determine that no
dividend or distribution shall be payable on Shares as to which the
Shareholder's purchase order and/or payment have not been received by
the time or times established by the Trustees under such program or
procedure, and except that if Sub-Series have been established for any
Series, the rate of dividends or distributions may vary among such Sub
Series pursuant to resolution, which may be a standing resolution, of
the Board of Trustees. Such dividends and distributions may be made
in cash or Shares or a combination thereof as determined by the
Trustees or pursuant to any program that the Trustees may have in
effect at the time for the election by each Shareholder of the mode of
the making of such dividend or distribution to that Shareholder. Any
such dividend or distribution paid in Shares will be paid at the net
asset value thereof as determined in accordance with subsection (h) of
Section 4.2.
The Trust intends to qualify each Series as a "regulated
investment company" under the Internal Revenue Code of 1954, as
amended, or any successor or comparable statute thereto, and
regulations promulgated thereunder. Inasmuch as the computation of
net income and gains for federal income tax purposes may vary from the
<PAGE>
computation thereof on the books of the Trust, the Board of Trustees
shall have the power, in its sole discretion, to distribute in any
fiscal year as dividends, including dividends designated in whole or
in part as capital gains distributions, amounts sufficient, in the
opinion of the Board of Trustees, to enable each Series to qualify as
a regulated investment company and to avoid liability of the Series
for federal income tax in respect of that year. However, nothing in
the foregoing shall limit the authority of the Board of Trustees to
make distributions greater than or less than the amount necessary to
qualify as a regulated investment company and to avoid liability of
each Series for such tax.
(d) Liquidation. In event of the liquidation or dissolution of the
Trust, the Shareholders of each Series or Sub-Series that has been
established and designated shall be entitled to receive, as a Series
or Sub-Series, when and as declared by the Trustees, the excess of the
assets belonging to that Series or Sub-Series over the liabilities
belonging to that Series or Sub-Series. The assets so distributable
to the Shareholders of any particular Series or Sub-Series shall be
distributed among such Shareholders in proportion to the number of
Shares of that Series or Sub-Series held by them and recorded on the
books of the Trust. The liquidation of any particular Series or Sub-
Series may be authorized by vote of a majority of the Trustees then in
office subject to the approval of a majority of the outstanding voting
Shares of that Series or Sub-Series, as defined in the 1940 Act.
(e) Voting. All Shares shall have "equal voting rights" as such term
is defined in the Investment Company Act of 1940 and except as
otherwise provided by that Act or rules, regulations or orders
promulgated thereunder. On each matter submitted to a vote of the
Shareholders, each Series shall vote as a separate series except as to
any matter with respect to which a vote of all Series voting as a
single series is required by the 1940 Act or rules and regulations
promulgated thereunder, or would be required under the Ohio General
Corporation Law if the Trust were an Ohio corporation. As to any
matter which does not affect the interest of a particular Series or
Sub-Series, only the holders of Shares of the one or more affected
Series or Sub-Series shall be entitled to vote.
(f) Redemption by Shareholder. Each holder of Shares of a particular
Series shall have the right at such times as may be permitted by the
Trust, but no less frequently than once each week, to require the
Trust to redeem all or any part of his Shares of that Series at a
redemption price equal to the net asset value per Share of that Series
next determined in accordance with subsection (h) of this Section 4.2
after the Shares are properly tendered for redemption. Payment of the
redemption price shall be in cash; provided, however, that if the
Trustees determine, which determination shall be conclusive, that
conditions exist which make payment wholly in cash unwise or
undesirable, the Trust may make payment wholly or partly in securities
or other assets belonging to the Series of which the Shares being
redeemed are part at the value of such securities or assets used in
such determination of net asset value.
Notwithstanding the foregoing, the Trust may postpone payment of
the redemption price and may suspend the right of the holders of
Shares of any Series to require the Trust to redeem Shares of that
Series during any period or at any time when and to the extent
permissible under the 1940 Act, and such redemption is conditioned
<PAGE>
upon the Trust having funds or property legally available therefor.
(g) Redemption by Trust. Each Share of each Series or Sub-Series
that has been established and designated is subject to redemption by
the Trust at the redemption price which would be applicable if such
Share was then being redeemed by the Shareholder pursuant to
subsection (f) of this Section 4.2:(a) at any time, if the Trustees
determine in their sole discretion that failure to so redeem may have
materially adverse consequences to all or any of the holders of the
Shares, or any Series thereof, of the Trust, or (b) upon such other
conditions as may from time to time be determined by the Trustees and
set forth in the then current Prospectus of the Trust with respect to
maintenance of Shareholder accounts of a minimum amount. Upon such
redemption the holders of the Shares so redeemed shall have no further
right with respect thereto other than to receive payment of such
redemption price.
(h) Net Asset Value. The net asset value per Share of any Series or
Sub-Series shall be the quotient obtained by dividing the value of the
net assets of that Series or Sub-Series (being the value of the assets
belonging to that Series or Sub-Series less the liabilities belonging
to that Series or Sub-Series) by the total number of Shares of that
Series or Sub-Series outstanding, all determined in accordance with
the methods and procedures, including without limitation those with
respect to rounding, established by the Trustees from time to time.
The Trustees may determine to maintain the net asset value per
Share of any Series at a designated constant dollar amount and in
connection therewith may adopt procedures not inconsistent with the
1940 Act for the continuing declarations of income attributable to
that Series as dividends payable in additional Shares of that Series
at the designated constant dollar amount and for the handling of any
losses attributable to that Series. Such procedures may provide that
in the event of any loss each Shareholder shall be deemed to have
contributed to the capital of the Trust attributable to that Series
his pro rata portion of the total number of Shares required to be
canceled in order to permit the net asset value per Share of that
Series to be maintained, after reflecting such loss, at the designated
constant dollar amount. Each Shareholder of the Trust shall be deemed
to have agreed, by his investment in any Series with respect to which
the Trustees shall have adopted any such procedure, to make the
contribution referred to in the preceding sentence in the event of any
such loss.
(i) Transfer. All Shares of each particular Series shall be
transferable, but transfers of Shares of a particular Series will be
recorded on the Share transfer records of the Trust applicable to that
Series only at such times as Shareholders shall have the right to
require the Trust to redeem Shares of that Series and at such other
times as may be permitted by the Trustees.
(j) Equality. All Shares of each particular Series shall represent
an equal proportionate interest in the assets belonging to that Series
(subject to the liabilities belonging to that Series), and each Share
of any particular Series shall be equal to each other Share of that
Series; but the provisions of this sentence shall not restrict any
distinctions permissible under this Section 4.2 that may exist with
respect to Sub-Series of the same Series. The Trustees may from time
to time divide or combine the Shares of any particular Series into a
greater or lesser number of Shares of that Series without thereby
changing the proportionate beneficial interest in the assets belonging
<PAGE>
to that Series or in any way affecting the rights of Shares of any
other Series.
(k) Fractions. Any fractional Share of any Series or Sub-Series, if
any such fractional Share is outstanding, shall carry proportionately
all the rights and obligations of a whole Share of that Series or Sub-
Series, including with respect to voting, receipt of dividends and
distributions, redemption of Shares, and liquidation of the Trust.
(l) Conversion Rights. Subject to compliance with the requirements
of the 1940 Act, the Trustees shall have the authority to provide that
holders of Shares of any Series shall have the right to convert said
Shares into Shares of one or more other Series of Shares in accordance
with such requirements and procedures as may be established by the
Trustees.
Section 4.3 Ownership of Shares. The ownership of Shares shall be
recorded on the books of the Trust or of a transfer or similar agent for the
Trust, which books shall be maintained separately for the Shares of each Series
that has been established and designated. No certificates certifying the
ownership of Shares need be issued except as the Trustees may otherwise
determine from time to time. The Trustees may make such rules as they consider
appropriate for the issuance of Share certificates, the use of facsimile
signatures, the transfer of Shares and similar matters. The record books of the
Trust as kept by the Trust or any transfer or similar agent, as the case may be,
shall be conclusive as to who are the Shareholders and as to the number of
Shares of each Series and Sub-Series held from time to time by each such
Shareholder.
Section 4.4 Investments in the Trust. The Trustees may accept
investments in the Trust from such persons and on such terms and for such
consideration, not inconsistent with the provisions of the 1940 Act, as they
from time to time authorize. The Trustees may authorize any distributor,
principal underwriter, custodian, transfer agent or other person to accept
orders for the purchase of Shares that conform to such authorized terms and to
reject any purchase orders for Shares whether or not conforming to such
authorized terms.
Section 4.5 No Preemptive Rights. Shareholders shall have no preemptive
or other right to subscribe to any additional Shares or other securities issued
by the Trust.
Section 4.6 Status of Shares and Limitation of Personal Liability.
Shares shall be deemed to be personal property giving only the rights provided
in this instrument. Every Shareholder by virtue of having become a Shareholder
shall be held to have expressly assented and agreed to the terms hereof and to
have become a party hereto. The death of a Shareholder during the continuance
of the Trust shall not operate to terminate the Trust nor entitle the
representative of any deceased Shareholder to an accounting or to take any
action in court or elsewhere against the Trust or the Trustees, but only to the
rights of said decedent under this Trust. Ownership of Shares shall not entitle
the Shareholder to any title in or to the whole or any part of the Trust
property or right to call for a partition or division of the same or for an
accounting, nor shall the ownership of Shares constitute the Shareholders
partners. Neither the Trust nor the Trustees, nor any officer, employee or
agent of the Trust shall have any power to bind personally any Shareholder, nor
except as specifically provided herein to call upon any Shareholder for the
payment of any sum of money or assessment whatsoever other than such as the
Shareholder may at any time personally agree to pay.
ARTICLE V
SHAREHOLDERS' VOTING POWERS AND MEETINGS
<PAGE>
Section 5.1 Voting Powers. The Shareholders shall have power to vote
only (i) for the election or removal of Trustees as provided in Section 3.1,
(ii) with respect to any contract with a Contracting Party as provided in
Section 3.3 as to which Shareholder approval is required by the 1940 Act, (iii)
with respect to any termination or reorganization of the Trust or any Series to
the extent and as provided in Sections 7.1 and 7.2, (iv) with respect to any
amendment of this Declaration of Trust to the extent and as provided in Section
7.3, (v) to the same extent as the stockholders of an Ohio business corporation
as to whether or not a court action, proceeding or claim should or should not be
brought or maintained derivatively or as a class action on behalf of the Trust
or the Shareholders, and (vi) with respect to such additional matters relating
to the Trust as may be required by the 1940 Act, this Declaration of Trust, the
By-Laws or any registration of the Trust with the Commission (or any successor
agency) or any state, or as the Trustees may consider necessary or desirable.
There shall be no cumulative voting in the election of any Trustee or Trustees.
Shares may be voted in person or by proxy. A proxy with respect to Shares held
in the name of two or more persons shall be valid if executed by any one of them
unless at or prior to exercise of the proxy the Trust receives a specific
written notice to the contrary from any one of them. A proxy purporting to be
executed by or on behalf of a Shareholder shall be deemed valid unless
challenged at or prior to its exercise and the burden of proving invalidity
shall rest on the challenger. Until Shares are then issued and outstanding, the
Trustees may exercise all rights of Shareholders and may take any action
required by law, this Declaration of Trust or the By-Laws to be taken by
Shareholders.
Section 5.2 Meetings. Meetings (including meetings involving only the
holders of Shares of one or more but less than all Series or Sub-Series) of
Shareholders may be called by the Trustees from time to time for the purpose of
taking action upon any matter requiring the vote or authority of the
Shareholders as herein provided or upon any other matter deemed by the Trustees
to be necessary or desirable. Written notice of any meeting of Shareholders
shall be given or caused to be given by the Trustees by mailing such notice at
least seven days before such meeting, postage prepaid, stating the time, place
and purpose of the meeting, to each Shareholder at the Shareholder's address as
it appears on the records of the Trust. If the Trustees shall fail to call or
give notice of any meeting of Shareholders (including a meeting involving only
the holders of Shares of one or more but less than all Series or Sub-Series) for
a period of 30 days after written application by Shareholders holding at least
25% of the Shares then outstanding requesting a meeting be called for any other
purpose requiring action by the Shareholders as provided herein or in the
By-Laws, then Shareholders holding at least 25% of the Shares then outstanding
may call and give notice of such meeting, and thereupon the meeting shall be
held in the manner provided for herein in case of call thereof by the Trustees.
Section 5.3 Record Dates. For the purpose of determining the
Shareholders who are entitled to vote or act at any meeting or any adjournment
thereof, or who are entitled to participate in any dividend or distribution, or
for the purpose of any other action, the Trustees may from time to time close
the transfer books for such period, not exceeding 30 days (except at or in
connection with the termination of the Trust), as the Trustees may determine; or
without closing the transfer books the Trustees may fix a date and time not more
than 60 days prior to the date of any meeting of Shareholders or other action as
the date and time of record for the determination of Shareholders entitled to
vote at such meeting or any adjournment thereof or to be treated as Shareholders
of record for purposes of such other action, and any Shareholder who was a
Shareholder at the date and time so fixed shall be entitled to vote at such
meeting or any adjournment thereof or (subject to any provisions permissible
under subsection (c) of Section 4.2 with respect to dividends or distributions
on Shares that have not been ordered and/or paid for by the time or times
established by the Trustees under the applicable dividend or distribution
<PAGE>
program or procedure then in effect) to be treated as a Shareholder of record
for purposes of such other action, even though he has since that date and time
disposed of his Shares, and no Shareholder becoming such after that date and
time shall be so entitled to vote at such meeting or any adjournment thereof or
to be treated as a Shareholder of record for purposes of such other action.
Section 5.4 Quorum and Required Vote. A majority of Shares of each
Series, or of all Series if voting as a single Series is required, which are
entitled to vote shall be a quorum for the transaction of business at a
Shareholders' meeting, but any lesser number shall be sufficient for
adjournments. Any adjourned session or sessions may be held, within a
reasonable time after the date set for the original meeting, without the
necessity of further notice. A majority of the Shares voted, at a meeting at
which a quorum is present, shall decide any questions and a plurality shall
elect a Trustee, except when a different vote is required or permitted by any
provision of the 1940 Act or other applicable law or by this Declaration of
Trust or the By-Laws.
Section 5.5 Action by Written Consent. Subject to the provisions of the
1940 Act and other applicable law, any action taken by Shareholders may be taken
without a meeting if a majority of Shareholders entitled to vote on the matter
(or such other proportion thereof as shall be required by the 1940 Act or by any
express provision of this Declaration of Trust or the By-Laws) consent to the
action in writing and such written consents are filed with the records of the
meetings of Shareholders. Such consent shall be treated for all purposes as a
vote taken at a meeting of Shareholders.
Section 5.6 Inspection of Records. The records of the Trust shall be
open to inspection by Shareholders to the same extent as is permitted
stockholders of an Ohio corporation under the Ohio General Corporation Law.
Section 5.7 Additional Provisions. The By-Laws may include further
provisions for Shareholders' votes and meetings and related matters not
inconsistent with the provisions hereof.
ARTICLE VI
LIMITATION OF LIABILITY; INDEMNIFICATION
Section 6.1 Trustees, Shareholders, etc. Not Personally Liable; Notice.
All persons extending credit to, contracting with or having any claim against
any Series of the Trust (or the Trust on behalf of any Series) shall look only
to the assets of that Series for payment under such credit, contract or claim;
and neither the Shareholders nor the Trustees, nor any of the Trust's officers,
employees or agents, whether past, present or future, shall be personally liable
therefor. Every note, bond, contract, instrument, certificate or undertaking
and every other act or thing whatsoever executed or done by or on behalf of the
Trust or the Trustees or any of them in connection with the Trust shall be
conclusively deemed to have been executed or done only by or for the Trust or
the Trustees and not personally. Nothing in this Declaration of Trust shall
protect any Trustee or officer against any liability to the Trust or the
Shareholders to which such Trustee or officer would otherwise be subject by
reason of willful misfeasance, bad faith, gross negligence or reckless disregard
of the duties involved in the conduct of the office of Trustee or of such
officer.
Every note, bond, contract, instrument, certificate or undertaking made or
issued by the Trustees or by any officers or officer shall give notice that this
Declaration of Trust is on file with the Secretary of the State of Ohio and
shall recite to the effect that the same was executed or made by or on behalf of
the Trust or by them as Trustees or Trustee or as officers or officer and not
individually and that the obligations of such instrument are not binding upon
<PAGE>
any of them or the Shareholders individually but are binding only upon the
assets and property of the Trust, but the omission thereof shall not operate to
bind any Trustees or Trustee or officers or officer or Shareholders or
Shareholder individually.
Section 6.2 Trustee's Good Faith Action; Expert Advice; No Bond or
Surety. The exercise by the Trustees of their powers and discretions hereunder
shall be binding upon everyone interested. A Trustee shall be liable for his
own willful misfeasance, bad faith, gross negligence or reckless disregard of
the duties involved in the conduct of the office of Trustee, and for nothing
else, and shall not be liable for errors of judgment or mistakes of fact or law.
Subject to the foregoing, (a) the Trustees shall not be responsible or liable in
any event for any neglect or wrongdoing of any officer, agent, employee,
consultant, adviser, administrator, distributor or principal underwriter,
custodian or transfer, dividend disbursing, Shareholder servicing or accounting
agent of the Trust, nor shall any Trustee be responsible for the act or omission
of any other Trustee; (b) the Trustees may take advice of counsel or other
experts with respect to the meaning and operation of this Declaration of Trust
and their duties as Trustees, and shall be under no liability for any act or
omission in accordance with such advice or for failing to follow such advice;
and (c) in discharging their duties, the Trustees, when acting in good faith,
shall be entitled to rely upon the books of account of the Trust and upon
written reports made to the Trustees by any officer appointed by them, any
independent public accountant, and (with respect to the subject matter of the
contract involved) any officer, partner or responsible employee of a Contracting
Party appointed by the Trustees pursuant to Section 3.3. The Trustees as such
shall not be required to give any bond or surety or any other security for the
performance of their duties. Nothing stated herein is intended to detract from
the protection accorded to Trustees by Ohio Revised Code Sections 1746.08 and
1701.59, as amended from time to time.
Section 6.3 Indemnification of Shareholders. In case any Shareholder or
former Shareholder shall be charged or held to be personally liable for any
obligation or liability of the Trust solely by reason of being or having been a
Shareholder and not because of such Shareholder's acts or omissions or for some
other reason, the Trust (upon proper and timely request by the Shareholder)
shall assume the defense against such charge and satisfy any judgment thereon,
and the Shareholder or former Shareholder (or his heirs, executors,
administrators or other legal representatives or in the case of a corporation or
other entity, its corporate or other general successor) shall be entitled out of
the assets of the Trust estate to be held harmless from and indemnified against
all loss and expense arising from such liability.
Section 6.4 Indemnification of Trustees, Officers, etc. Subject to and
except as otherwise provided in the Securities Act of 1933, as amended, and the
1940 Act, the Trust shall indemnify each of its Trustees and officers (including
persons who serve at the Trust's request as directors, officers or trustees of
another organization in which the Trust has any interest as a shareholder,
creditor or otherwise (hereinafter referred to as a "Covered Person") against
all liabilities, including but not limited to amounts paid in satisfaction of
judgments, in compromise or as fines and penalties, and expenses, including
reasonable accountants' and counsel fees, incurred by any Covered Person in
connection with the defense or disposition of any action, suit or other
proceeding, whether civil or criminal, before any court or administrative or
legislative body, in which such Covered Person may be or may have been involved
as a party or otherwise or with which such person may be or may have been
threatened, while in office or thereafter, by reason of being or having been
such a Trustee or officer, director or trustee, and except that no Covered
Person shall be indemnified against any liability to the Trust or its
Shareholders to which such Covered Person would otherwise be subject by reason
of willful misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of such Covered Person's office.
<PAGE>
Section 6.5 Advances of Expenses. The Trust shall advance attorneys'
fees or other expenses incurred by a Covered Person in defending a proceeding to
the full extent permitted by the Securities Act of 1933, as amended, the 1940
Act, and Ohio Revised Code Chapter 1707, as amended. In the event any of these
laws conflict with Ohio Revised Code Section 1701.13(E), as amended, these laws,
and not Ohio Revised Code Section 1701.13(E), shall govern.
Section 6.6 Indemnification Not Exclusive, etc. The right of
indemnification provided by this Article VI shall not be exclusive of or affect
any other rights to which any such Covered Person may be entitled. As used in
this Article VI, "Covered Person" shall include such person's heirs, executors
and administrators. Nothing contained in this article shall affect any rights
to indemnification to which personnel of the Trust, other than Trustees and
officers, and other persons may be entitled by contract or otherwise under law,
nor the power of the Trust to purchase and maintain liability insurance on
behalf of any such person.
Section 6.7 Liability of Third Persons Dealing with Trustees. No person
dealing with the Trustees shall be bound to make any inquiry concerning the
validity of any transaction made or to be made by the Trustees or to see to the
application of any payments made or property transferred to the Trust or upon
its order.
ARTICLE VII
MISCELLANEOUS
Section 7.1 Duration and Termination of Trust. Unless terminated as
provided herein, the Trust shall continue without limitation of time. The Trust
may be terminated at any time by a majority of the Trustees then in office
subject to a favorable vote of a majority of the outstanding voting Shares, as
defined in the 1940 Act, of each Series voting separately by Series.
Upon termination, after paying or otherwise providing for all charges,
taxes, expenses and liabilities, whether due or accrued or anticipated as may be
determined by the Trustees, the Trust shall in accordance with such procedures
as the Trustees consider appropriate reduce the remaining assets to
distributable form in cash, securities or other property, or any combination
thereof, and distribute the proceeds to the Shareholders, in conformity with the
provisions of subsection (d) of Section 4.2.
Section 7.2 Reorganization. The Trustees may sell, convey and transfer
the assets of the Trust, or the assets belonging to any one or more Series, to
another trust, partnership, association or corporation organized under the laws
of any state of the United States, or to the Trust to be held as assets
belonging to another Series of the Trust, in exchange for cash, shares or other
securities (including, in the case of a transfer to another Series of the Trust,
Shares of such other Series) with such transfer being made subject to, or with
the assumption by the transferee of, the liabilities belonging to each Series
the assets of which are so transferred; provided, however, that if shareholder
approval is required by the 1940 Act, no assets belonging to any particular
Series shall be so transferred unless the terms of such transfer shall have
first been approved at a meeting called for the purpose by the affirmative vote
of the holders of a majority of the outstanding voting Shares, as defined in the
1940 Act, of that Series. Following such transfer, the Trustees shall
distribute such cash, shares or other securities (giving due effect to the
assets and liabilities belonging to and any other differences among the various
Series the assets belonging to which have so been transferred) among the
Shareholders of the Series the assets belonging to which have been so
transferred; and if all of the assets of the Trust have been so transferred, the
<PAGE>
Trust shall be terminated.
Section 7.3 Amendments. All rights granted to the Shareholders under
this Declaration of Trust are granted subject to the reservation of the right to
amend this Declaration of Trust as herein provided, except that no amendment
shall repeal the limitations on personal liability of any Shareholder or Trustee
or repeal the prohibition of assessment upon the Shareholders without the
express consent of each Shareholder or Trustee involved. Subject to the
foregoing, the provisions of this Declaration of Trust (whether or not related
to the rights of Shareholders) may be amended at any time by an instrument in
writing signed by a majority of the then Trustees (or by an officer of the Trust
pursuant to the vote of a majority of such Trustees) when authorized so to do by
the vote in accordance with subsection (e) of Section 4.2 of Shareholders
holding a majority of the Shares entitled to vote, except that amendments either
(a) establishing and designating any new Series of Shares not established and
designated in Section 4.2, or any Sub-Series or (b) having the purpose of
changing or of supplying any omission, curing any ambiguity or curing,
correcting or supplementing any provision hereof which is internally
inconsistent with any other provision hereof or which is defective or
inconsistent with the 1940 Act or with the requirements of the Internal Revenue
Code and applicable regulations for the Trust's obtaining the most favorable
treatment thereunder available to regulated investment companies, shall not
require authorization by Shareholder vote. Subject to the foregoing, any such
instrument shall be effective as provided in the instrument containing the terms
of such amendment or, if there is no provision therein with respect to
effectiveness, upon the execution of such instrument and of a certificate (which
may be part of such instrument) executed by a Trustee or officer of the Trust to
the effect that such amendment has been duly adopted.
Section 7.4 Filing of Copies; References; Headings. The original or a
copy of this instrument and of each amendment hereto shall be kept at the office
of the Trust where it may be inspected by any Shareholder. A copy of this
instrument and of each amendment hereto shall be filed by the Trust with the
Secretary of the State of Ohio, as well as any other governmental office where
such filing may from time to time be required, but the failure to make any such
filing shall not impair the effectiveness of this instrument or any such
amendment. Anyone dealing with the Trust may rely on a certificate by an
officer of the Trust as to whether or not any such amendments have been made, as
to the identities of the Trustees and officers, and as to any matters in
connection with the Trust hereunder; and, with the same effect as if it were the
original, may rely on a copy certified by an officer of the Trust to be a copy
of this instrument or of any such amendments. In this instrument and in any
such amendment, references to this instrument, and all expressions like
"herein", "hereof" and "hereunder" shall be deemed to refer to this instrument
as a whole as the same may be amended or affected by any such amendments. The
masculine gender shall include the feminine and neuter genders. Headings are
placed herein for convenience of reference only and shall not be taken as a part
hereof or control or affect the meaning, construction or effect of this
instrument. This instrument may be executed in any number of counterparts each
of which shall be deemed an original.
Section 7.5 Applicable Law. This Trust is an Ohio business trust, and
it is created under and is to be governed by and construed and administered
according to the laws of said State, including the Ohio General Corporation Law
as the same may be amended from time to time, but the reference to said
Corporation Law is not intended to give the Trust, the Trustees, the
Shareholders or any other person any right, power, authority or responsibility
available only to or in connection with an entity organized in corporate form.
The Trust shall be of the type referred to in Section 1746.01 of the Ohio
Revised Code, and without limiting the provisions hereof, the Trust may exercise
all powers which are ordinarily exercised by such a trust.
<PAGE>
IN WITNESS WHEREOF, the undersigned has hereunto set his hand for himself
and his assigns, as of the day and year first above written.
______________________________
RAMESH C. JHAVERI
<PAGE>
STATE OF __________________ )
) ss:
COUNTY OF CUYAHOGA )
Before me, a Notary Public in and for said county and state, personally
appeared the above named RAMESH C. JHAVERI, who acknowledged that he did sign
the foregoing instrument and that the same is his free act and deed.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal on this 18th day of January, 1995.
___________________________
Notary Public
My Commission Expires:____________
<PAGE>
ACCEPTANCE OF TRUST
As contemplated in Section 3.1 of the Agreement and Declaration of Trust of
The Jhaveri Trust, the undersigned accepts his designation as a Trustee of said
Trust and agrees to the provisions of said Agreement and Declaration of Trust.
IN WITNESS WHEREOF, the undersigned has set his hand on the date set
opposite his signature.
January 18th, 1995 ___________________________
RAMESH C. JHAVERI
STATE OF ______________ )
) ss:
COUNTY OF CUYAHOGA )
Before me, a Notary Public in and for said county and state, personally
appeared the above named RAMESH C. JHAVERI, who acknowledged that he did sign
the foregoing instrument and that the same is his free act and deed.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal on this _________ day of ________________, ___________.
___________________________
Notary Public
My Commission Expires:_____________
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<PAGE>
MANAGEMENT AGREEMENT
TO: Investments Technology, Inc.
18820 High Parkway
Cleveland, Ohio 44116
Dear Sirs:
The Jhaveri Trust (the "Trust") herewith confirms our agreement with you.
The Trust has been organized to engage in the business of an investment
company. The Trust currently offers one series of shares to investors: the
Jhaveri Value Fund (the "Fund"). The Trust's Board of Trustees (the "Board") is
authorized from time to time, as it deems necessary or desirable, to establish
and designate additional series of shares.
You have been selected to act as the sole investment adviser of the Fund
and to provide certain other services, as more fully set forth below, and you
are willing to act as such investment adviser and to perform such services under
the terms and conditions hereinafter set forth. Accordingly, the Trust agrees
with you as follows upon the date of the execution of this Agreement.
1. ADVISORY SERVICES
You will regularly provide the Fund with such investment advice as
you in your discretion deem advisable and will furnish a continuous investment
program for the Fund consistent with the Fund's investment objectives and
policies. You will determine the securities to be purchased for the Fund, the
portfolio securities to be held or sold by the Fund and the portion of the
Fund's assets to be held uninvested, subject always to the Fund's investment
objectives, policies and restrictions, as each of the same shall be from time to
time in effect, and subject further to such policies and instructions as the
Board of Trustees of the Trust (the "Board") may from time to time establish.
You will advise and assist the officers of the Trust in taking such steps as are
necessary or appropriate to carry out the decisions of the Board and the
appropriate committees of the Board regarding the conduct of the business of the
Fund.
2. ALLOCATION OF CHARGES AND EXPENSES
You will pay all operating expenses of the Trust, including the
compensation and expenses of any trustees, officers and employees of the Trust
and of any other persons rendering any services to the Trust; clerical and
shareholder service staff salaries; office space and other office expenses; fees
and expenses incurred by the Trust in connection with membership in investment
company organizations; legal, auditing and accounting expenses; non-
organizational expenses of registering shares under federal and state securities
laws; insurance expenses; fees and expenses of the custodian, transfer agent,
dividend disbursing agent, shareholder service agent, plan agent, administrator,
accounting and pricing services agent and underwriter of the Trust; expenses,
including clerical expenses, of issue, sale, redemption or repurchase of shares
of the Trust; the cost of preparing and distributing reports and notices to
shareholders, the cost of printing or preparing prospectuses and statements of
additional information for delivery to the Trust's current and prospective
shareholders; the cost of printing or preparing stock certificates or any other
documents, statements or reports to shareholders; expenses of shareholders'
meetings and proxy solicitations; advertising, promotion and other expenses
incurred directly or indirectly in connection with the sale or distribution of
the Trust's
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shares; and all other operating expenses not specifically assumed by the Trust.
The Trust will pay all brokerage fees and commissions, taxes,
interest, expenses incurred by the Trust in connection with the organization and
initial registration of shares of any series of the Trust and such extraordinary
or non-recurring expenses as may arise, including litigation to which the Trust
may be a party and indemnification of the Trust's trustees and officers with
respect thereto. You may obtain reimbursement from the Trust, at such time or
times as you may determine in your sole discretion, for any of the expenses
advanced by you, which the Trust is obligated to pay, and such reimbursement
shall not be considered to be part of your compensation pursuant to this
Agreement.
3. COMPENSATION OF THE ADVISER
For all of the services to be rendered and payments to be made as
provided in this Agreement, as of the last business day of each month, the
Jhaveri Value Fund will pay you a fee at the annual rate of 2.50% of the average
value of its daily net assets.
Your compensation with respect to each additional series of the
Trust established after the date of this Agreement shall be the fee described
above unless the Board of Trustees, including a majority of the Trustees who are
not interested persons as defined in the Investment Company Act of 1940 of you
or the Trust, determines otherwise. If the Board of Trustees adopts a different
fee arrangement for an additional series, the fee arrangement shall be approved
pursuant to the provisions of Section 15 of the Investment Company Act of 1940.
The average value of the daily net assets of the Fund shall be
determined pursuant to the applicable provisions of the Declaration of Trust of
the Trust or a resolution of the Board, if required. If, pursuant to such
provisions, the determination of net asset value of the Fund is suspended for
any particular business day, then for the purposes of this paragraph, the value
of the net assets of the Fund as last determined shall be deemed to be the value
of the net assets as of the close of the business day, or as of such other time
as the value of the Fund's net assets may lawfully be determined, on that day.
If the determination of the net asset value of the Fund has been suspended for a
period including such month, your compensation payable at the end of such month
shall be computed on the basis of the value of the net assets of the Fund as
last determined (whether during or prior to such month).
4. EXECUTION OF PURCHASE AND SALE ORDERS
In connection with purchases or sales of portfolio securities for
the account of the Fund, it is understood that you will arrange for the placing
of all orders for the purchase and sale of portfolio securities for the account
with brokers or dealers selected by you, subject to review of this selection by
the Board from time to time. You will be responsible for the negotiation and
the allocation of principal business and portfolio brokerage. In the selection
of such brokers or dealers and the placing of such orders, you are directed at
all times to seek for the Fund the best qualitative execution, taking into
account such factors as price (including the applicable brokerage commission or
dealer spread), the execution capability, financial responsibility and
responsiveness of the broker or dealer and the brokerage and research services
provided by the broker or dealer.
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You should generally seek favorable prices and commission rates that
are reasonable in relation to the benefits received. In seeking best
qualitative execution, you are authorized to select brokers or dealers who also
provide brokerage and research services (as those terms are defined in Section
28(e) of the Securities Exchange Act of 1934) to the Fund and/or the other
accounts over which you exercise investment discretion. You are authorized to
pay a broker or dealer who provides such brokerage and research services a
commission for executing a Fund portfolio transaction which is in excess of the
amount of commission another broker or dealer would have charged for effecting
that transaction if you determine in good faith that the amount of the
commission is reasonable in relation to the value of the brokerage and research
services provided by the executing broker or dealer. The determination may be
viewed in terms of either a particular transaction or your overall
responsibilities with respect to the Fund and to accounts over which you
exercise investment discretion. The Fund and you understand and acknowledge
that, although the information may be useful to the Fund and you, it is not
possible to place a dollar value on such information. The Board shall
periodically review the commissions paid by the Fund to determine if the
commissions paid over representative periods of time were reasonable in relation
to the benefits to the Fund.
Consistent with the Rules of Fair Practice of the National
Association of Securities Dealers, Inc., and subject to seeking best qualitative
execution as described above, you may give consideration to sales of shares of
the Fund as a factor in the selection of brokers and dealers to execute Fund
portfolio transactions.
Subject to the provisions of the Investment Company Act of 1940, as
amended, and other applicable law, you, any of your affiliates or any affiliates
of your affiliates may retain compensation in connection with effecting the
Fund's portfolio transactions, including transactions effected through others.
If any occasion should arise in which you give any advice to clients of yours
concerning the shares of the Fund, you will act solely as investment counsel for
such client and not in any way on behalf of the Fund. Your services to the Fund
pursuant to this Agreement are not to be deemed to be exclusive and it is
understood that you may render investment advice, management and other services
to others, including other registered investment companies.
5. LIMITATION OF LIABILITY OF ADVISER
You may rely on information reasonably believed by you to be
accurate and reliable. Except as may otherwise be required by the Investment
Company Act of 1940 or the rules thereunder, neither you nor your officers,
directors, employees, agents, control persons or affiliates of any thereof shall
be subject to any liability for, or any damages, expenses or losses incurred by
the Trust in connection with, any error of judgment, mistake of law, any act or
omission connected with or arising out of any services rendered under, or
payments made pursuant to, this Agreement or any other matter to which this
Agreement relates, except by reason of willful misfeasance, bad faith or gross
negligence on the part of any such persons in the performance of your duties
under this Agreement, or by reason of reckless disregard by any of such persons
of your obligations and duties under this Agreement.
Any person, even though also a director, officer, employee or agent
of you, who may be or become an officer, director, trustee, employee or agent of
<PAGE>
the Trust, shall be deemed, when rendering services to the Trust or acting on
any business of the Trust (other than services or business in connection with
your duties hereunder), to be rendering such services to or acting solely for
the Trust and not as a director, officer, employee or agent of you, or one under
your control or direction, even though paid by you.
6. DURATION AND TERMINATION OF THIS AGREEMENT
This Agreement shall take effect on the date of its execution by
you, and shall remain in force for a period of two (2) years from the date of
its execution, and from year to year thereafter, subject to annual approval by
(i) the Board or (ii) a vote of a majority (as defined in the Investment Company
Act of 1940) of the outstanding voting securities of the Fund, provided that in
either event continuance is also approved by a majority of the trustees who are
not "interested persons," as defined in the Investment Company Act of 1940, of
you or the Trust, by a vote cast in person at a meeting called for the purpose
of voting such approval.
If the shareholders of the Fund fail to approve the Agreement in the
manner set forth above, upon request of the Board, you will continue to serve
or act in such capacity for the Fund for the period of time pending required
approval of the Agreement, of a new agreement with you or a different adviser or
other definitive action; provided that the compensation to be paid by the Fund
to you for your services to and payments on behalf of the Fund will be equal to
the lesser of your actual costs incurred in furnishing such services and
payments or the amount you would have received under this Agreement for
furnishing such services and payments.
This Agreement may, on sixty days written notice, be terminated with
respect to the Fund, at any time without the payment of any penalty, by the
Board, by a vote of a majority of the outstanding voting securities of the Fund,
or by you. This Agreement shall automatically terminate in the event of its
assignment.
7. USE OF NAME
The Trust and you acknowledge that all rights to the name "Jhaveri,"
belongs to you, and that the Trust is being granted a limited license to use
such words in its Trust name or in any series name. In the event you cease to
be the adviser to the Fund, the Trust's right to the use of the name "Jhaveri"
shall automatically cease on the ninetieth day following the termination of this
Agreement. The right to the name may also be withdrawn by you during the term
of this Agreement upon ninety (90) days' written notice by you to the Trust.
Nothing contained herein shall impair or diminish in any respect, your right to
use the name "Jhaveri" in the name of, or in connection with, any other business
enterprises with which you are or may become associated. There is no charge to
the Trust for the right to use these names.
8. AMENDMENT OF THIS AGREEMENT
No provision of this Agreement may be changed, waived, discharged or
terminated orally, and no amendment of this Agreement shall be effective until
approved by the Board, including a majority of the trustees who are not
interested persons of you or of the Trust, cast in person at a meeting called
for the purpose of voting on such approval, and (if required under current
interpretations of the Act by the Securities and Exchange Commission) by vote of
the holders of a majority of the outstanding voting securities of the series to
<PAGE>
which the amendment relates.
9. LIMITATION OF LIABILITY TO TRUST PROPERTY
The term "The Jhaveri Trust" means and refers to the Trustees from
time to time serving under the Trust's Declaration of Trust as the same may
subsequently thereto have been, or subsequently hereto be, amended. It is
expressly agreed that the obligations of the Trust hereunder shall not be
binding upon any of the trustees, shareholders, nominees, officers, agents or
employees of the Trust personally, but bind only the trust property of the
Trust, as provided in the Declaration of Trust of the Trust. The execution and
delivery of this Agreement have been authorized by the trustees and shareholders
of the Trust and signed by officers of the Trust, acting as such, and neither
such authorization by such trustees and shareholders nor such execution and
delivery by such officers shall be deemed to have been made by any of them
individually or to impose any liability on any of them personally, but shall
bind only the trust property of the Trust as provided in its Declaration of
Trust. A copy of the Agreement and Declaration of Trust of the Trust is on file
with the Secretary of the State of Ohio.
10. SEVERABILITY
In the event any provision of this Agreement is determined to be
void or unenforceable, such determination shall not affect the remainder of this
Agreement, which shall continue to be in force.
11. QUESTIONS OF INTERPRETATION
(a) This Agreement shall be governed by the laws of the State of
Ohio.
(b) Any question of interpretation of any term or provision of this
Agreement having a counterpart in or otherwise derived from a term or provision
of the Investment Company Act of 1940, as amended (the "Act") shall be resolved
by reference to such term or provision of the Act and to interpretation thereof,
if any, by the United States courts or in the absence of any controlling
decision of any such court, by rules, regulations or orders of the Securities
and Exchange Commission issued pursuant to said Act. In addition, where the
effect of a requirement of the Act, reflected in any provision of this Agreement
is revised by rule, regulation or order of the Securities and Exchange
Commission, such provision shall be deemed to incorporate the effect of such
rule, regulation or order.
12. NOTICES
Any notices under this Agreement shall be in writing, addressed and
delivered or mailed postage paid to the other party at such address as such
other party may designate for the receipt of such notice. Until further notice
to the other party, it is agreed that the address of the Trust the address of
the Trust and your address for this purpose shall be 18820 High Parkway,
Cleveland, Ohio 44116.
13. COUNTERPARTS
This Agreement may be executed in one or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
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14. BINDING EFFECT
Each of the undersigned expressly warrants and represents that he
has the full power and authority to sign this Agreement on behalf of the party
indicated, and that his signature will operate to bind the party indicated to
the foregoing terms.
15. CAPTIONS
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 you are in agreement with the foregoing, please sign the form of
acceptance on the accompanying counterpart of this letter and return such
counterpart to the Trust, whereupon this letter shall become a binding contract
upon the date thereof.
Yours very truly,
ATTEST: THE JHAVERI TRUST
_____________________________ By____________________________
Saumil Jhaveri, Secretary Ramesh C. Jhaveri, President
Dated: April 12, 1995
ACCEPTANCE
The foregoing Agreement is hereby accepted.
ATTEST: Investments Technology, Inc.
By____________________________
Ramesh C. Jhaveri, President
Dated April 12, 1995
<PAGE>
CUSTODY AGREEMENT
BETWEEN
STAR BANK, N.A.
AND
______________________
THE JHAVERI TRUST
<PAGE>
TABLE OF CONTENTS
Definitions 1
ARTICLE II - Appointment; Acceptence; and Furnishing of
Documents
II. A. Appointment of Custodian. 5
II. B. Acceptance of Custodian. 5
II. C. Documents to be Furnished. 5
II. D. Notice of Appointment of Dividend and Transfer 5
Agent.
ARTICLE III - Receipt of Trust Assets
III. A. Delivery of Moneys. 6
III. B. Delivery of Securities. 6
III. C. Payments for Shares. 6
III. D. Duties Upon Receipt. 7
ARTICLE IV - Disbursement of Trust Assets
IV. A. Declaration of Dividends by Trust. 7
IV. B. Segregation of Redemption Proceeds. 7
IV. C. Disbursements of Custodian. 8
IV. D. Payment of Custodian Fees. 8
ARTICLE V - Custody of Trust Assets
V. A. Separate Accounts for Each Fund. 8
V. B. Segregation of Non-Cash Assets. 9
V. C. Securities in Bearer and Registered Form. 9
V. D. Duties of Custodian as to Securities. 9
V. E. Certain Actions Upon Written Instructions. 10
V. F. Custodian to Deliver Proxy Materials. 11
V. G. Custodian to Deliver Tender Offer Information. 11
V. H. Custodian to Deliver Security and Transaction 12
Information.
<PAGE>
ARTICLE VI - Purchase and Sale of Securities
VI. A. Purchase of Securities. 12
VI. B. Sale of Securities. 13
VI. C. Delivery Versus Payment for Purchases and Sales. 14
VI. D. Payment on Settlement Date. 14
VI. E. Segregated Accounts. 14
VI. F. Advances for Settlement. 16
ARTICLE VII - Trust Indebtedness
VII. A. Borrowings. 17
VII. B. Advances. 18
ARTICLE VIII - Concerning the Custodian
VIII. A. Limitations on Liability of Custodian. 18
VIII. B. Actions not Required by Custodian. 20
VIII. C. No Duty to Collect Amounts Due From Dividend 21
and Transfer Agent.
VIII. D. No Enforcement Actions. 21
VIII. E. Authority to Use Agents and Sub-Custodians. 22
VIII. F. No Duty to Supervise Investments. 22
VIII. G. All Records Confidential. 23
VIII. H. Compensation of Custodian. 23
VIII. I. Reliance Upon Instructions. 23
VIII. J. Books and Records. 24
VIII. K. Internal Accounting Control Systems. 24
VIII. L. No Management of Assets by Custodian. 24
VIII. M. Assistance to Trust. 25
ARTICLE IX - Termination
IX. A. Termination. 25
<PAGE>
IX. B. Failure to Designate Successor Trustee. 26
ARTICLE X - Force Majeure
ARTICLE XI - Miscellaneous
XI. A. Designation of Authorized Persons. 27
XI. B. Limitation of Personal Liability. 27
XI. C. Authorization By Board. 28
XI. D. Custodian's Consent to Use of Its Name. 28
XI. E. Notices to Custodian. 29
XI. F. Notices to Trust. 29
XI. G. Amendments In Writing. 29
XI. H. Successors and Assigns. 29
XI. I. Governing Law. 29
XI. J. Jurisdiction. 30
XI. K. Counterparts. 30
XI. L. Headings. 30
APPENDIX A
APPENDIX B
APPENDIX C
APPENDIX D
APPENDIX E
<PAGE>
CUSTODY AGREEMENT
This agreement (the "Agreement") is entered into as of the _____ day of
__________, 1998, by and between The Jhaveri Trust, an Ohio business trust (the
"Trust") and Star Bank, National Association, (the "Custodian"), a national
banking association having its principal office at 425 Walnut Street,
Cincinnati, Ohio, 45202.
WHEREAS, the Trust and the Custodian desire to enter into this Agreement
to provide for the custody and safekeeping of the assets of the Trust as
required by the Act (as hereafter defined).
THEREFORE, in consideration of the mutual promises hereinafter set forth,
the Trust and the Custodian agree as follows:
Definitions
The following words and phrases, when used in this Agreement, unless the
context otherwise requires, shall have the following meanings:
Act - the Investment Company Act of 1940, as amended.
1934 Act - the Securities and Exchange Act of 1934, as amended.
Authorized Person - any person, whether or not any such person is an
officer or employee of the Trust, who is duly authorized by the Board of
Trustees of the Trust to give Oral Instructions and Written Instructions on
behalf of the Trust or any Fund, and named in Appendix A attached hereto and as
amended from time to time by resolution of the Board of Trustees, certified by
an Officer, and received by the Custodian.
Board of Trustees - the Trustees from time to time serving under the
Trust's Agreement and Declaration of Trust, as from time to time amended.
Book-Entry System - a federal book-entry system as provided in Subpart O
of Treasury Circular No. 300, 31 CFR 306, in Subpart B of 31 CFT Part 350, or in
such book-entry regulations of federal agencies as are substantially in the form
of Subpart O.
<PAGE>
Business Day - any day recognized as a settlement day by The New York
Stock Exchange, Inc. and any other day for which the Trust computes the net
asset value of Shares of any fund.
Depository - The Depository Trust Company ("DTC"), a limited purpose trust
company, its successor(s) and its nominee(s). Depository shall include any
other clearing agency registered with the SEC under Section 17A of the 1934 Act
which acts as a system for the central handling of Securities where all
Securities of any particular class or series of an issuer deposited within the
system are treated as fungible and may be transferred or pledged by bookkeeping
entry without physical delivery of the Securities provided that the Custodian
shall have received a copy of a resolution of the Board of Trustees, certified
by an Officer, specifically approving the use of such clearing agency as a
depository for the Funds.
Dividend and Transfer Agent - the dividend and transfer agent appointed,
from time to time, pursuant to a written agreement between the dividend and
transfer agent and the Trust.
Foreign Securities - a) securities issued and sold primarily outside of
the United States by a foreign government, a national of any foreign country, or
a trust or other organization incorporated or organized under the laws of any
foreign country or; b) securities issued or guaranteed by the government of the
United States, by any state, by any political subdivision or agency thereof, or
by any entity organized under the laws of the United States or of any state
thereof, which have been issued and sold primarily outside of the United States.
Fund - each series of the Trust listed in Appendix B and any additional
series added pursuant to Proper Instructions. A series is individually referred
to as a "Fund" and collectively referred to as the "Funds."
Money Market Security - debt obligations issued or guaranteed as to
principal and/or interest by the government of the United States or agencies or
instrumentalities thereof, commercial paper, obligations (including certificates
<PAGE>
of deposit, bankers' acceptances, repurchase agreements and reverse repurchase
agreements with respect to the same), and time deposits of domestic banks and
thrift institutions whose deposits are insured by the Federal Deposit Insurance
Corporation, and short-term corporate obligations where the purchase and sale of
such securities normally require settlement in federal funds or their equivalent
on the same day as such purchase and sale, all of which mature in not more than
thirteen (13) months.
NASD - the National Association of Securities Dealers, Inc.
Officer - the Chairman, President, Secretary, Treasurer, any Vice
President, Assistant Secretary or Assistant Treasurer of the Trust.
Oral Instructions - instructions orally transmitted to and received by the
Custodian from an Authorized Person (or from a person that the Custodian
reasonably believes in good faith to be an Authorized Person) and confirmed by
Written Instructions in such a manner that such Written Instructions are
received by the Custodian on the Business Day immediately following receipt of
such Oral Instructions.
Proper Instructions - Oral Instructions or Written Instructions. Proper
Instructions may be continuing Written Instructions when deemed appropriate by
both parties.
Prospectus - the Trust's then currently effective prospectus and Statement
of Additional Information, as filed with and declared effective from time to
time by the Securities and Exchange Commission.
Security or Securities - Money Market Securities, common stock, preferred
stock, options, financial futures, bonds, notes, debentures, corporate debt
securities, mortgages, bank certificates of deposit, bankers' acceptances,
mortgage-backed securities or other obligations and any certificates, receipts,
warrants, or other instruments or documents representing rights to receive,
purchase, or subscribe for the same or evidencing or representing any other
rights or interest therein, or any similar property or assets, including
securities of any registered investment company, that the Custodian has the
facilities to clear and to service.
<PAGE>
SEC - the Securities and Exchange Commission of the United States of
America.
Shares - with respect to a Fund, the units of beneficial interest issued
by the Trust on account of such Fund.
Trust - the business trust organized under the laws of Ohio which is an
open-end diversified management investment company registered under the Act.
Written Instructions - communications in writing actually received by the
Custodian from an Authorized Person. A communication in writing includes a
communication by facsimile, telex or between electro-mechanical or electronic
devices (where the use of such devices have been approved by resolution of the
Board of Trustees and the resolution is certified by an Officer and delivered to
the Custodian). All written communications shall be directed to the Custodian,
attention: Mutual Fund Custody Department.
ARTICLE II
Appointment; Acceptance; and Furnishing of Documents
II. A. Appointment of Custodian. The Trust hereby constitutes and
appoints the Custodian as custodian of all Securities and cash owned by the
Trust at any time during the term of this Agreement.
II. B. Acceptance of Custodian. The Custodian hereby accepts
appointment as such custodian and agrees to perform the duties thereof as
hereinafter set forth.
II. C. Documents to be Furnished. The following documents, including
any amendments thereto, will be provided contemporaneously with the execution of
the Agreement, to the Custodian by the Trust:
1. A copy of the Declaration of Trust of the
Trust certified by the Secretary.
2. A copy of the By-Laws of the Trust certified
by the Secretary.
3. A copy of the resolution of the Board of
Trustees of the Trust appointing the Custodian, certified by
the Secretary.
4. A copy of the then current Prospectus.
5. A Certificate of the President and Secretary
of the Trust setting forth the names and signatures of all
Authorized Persons.
<PAGE>
II. D. Notice of Appointment of Dividend and Transfer Agent. The
Trust agrees to notify the Custodian in writing of the appointment,
termination or change in appointment of any Dividend and Transfer Agent.
ARTICLE III
Receipt of Trust Assets
III. A. Delivery of Moneys. During the term of this Agreement, the
Trust will deliver or cause to be delivered to the Custodian all moneys to
be held by the Custodian for the account of any Fund. The Custodian shall
be entitled to reverse any deposits made on any Fund's behalf where such
deposits have been entered and moneys are not finally collected within 30
days of the making of such entry.
III. B. Delivery of Securities. During the term of this Agreement,
the Trust will deliver or cause to be delivered to the Custodian all
Securities to be held by the Custodian for the account of any Fund. The
Custodian will not have any duties or responsibilities with respect to such
Securities until actually received by the Custodian. The Custodian is
hereby authorized by the Trust, acting on behalf of the Fund, to actually
deposit any assets of the Fund in the Book-Entry System or in a Depository,
provided, however, that the Custodian shall always be accountable to the
Trust for the assets of the Fund so deposited. Assets deposited in the
Book-Entry System or the Depository will be represented in accounts which
include only assets held by the Custodian for customers, including but not
limited to accounts in which the Custodian acts in a fiduciary or
representative capacity.
III. C. Payments for Shares. As and when received, the Custodian
shall deposit to the account(s) of a Fund any and all payments for Shares of
<PAGE>
that Fund issued or sold from time to time as they are received from the
Trust's distributor or Dividend and Transfer Agent or from the Trust itself.
III. D. Duties Upon Receipt. The Custodian shall not be responsible
for any Securities, moneys or other assets of any Fund until actually
received.
ARTICLE IV
Disbursement of Trust Assets
IV. A. Declaration of Dividends by Trust. The Trust shall furnish to
the Custodian a copy of the resolution of the Board of Trustees of the
Trust, certified by the Trust's Secretary, either (i) setting forth the date
of the declaration of any dividend or distribution in respect of Shares of
any Fund of the Trust, the date of payment thereof, the record date as of
which the Fund shareholders entitled to payment shall be determined, the
amount payable per share to Fund shareholders of record as of that date, and
the total amount to be paid by the Dividend and Transfer Agent on the
payment date, or (ii) authorizing the declaration of dividends and
distributions in respect of Shares of a Fund on a daily basis and
authorizing the Custodian to rely on Written Instructions setting forth the
date of the declaration of any such dividend or distribution, the date of
payment thereof, the record date as of which the Fund shareholders entitled
to payment shall be determined, the amount payable per share to Fund
shareholders of record as of that date, and the total amount to be paid by
the Dividend and Transfer Agent on the payment date.
On the payment date specified in the resolution or Written Instructions
described above, the Custodian shall segregate such amounts from moneys held
for the account of the Fund so that they are available for such payment.
IV. B. Segregation of Redemption Proceeds. Upon receipt of Proper
Instructions so directing it, the Custodian shall segregate amounts
<PAGE>
necessary for the payment of redemption proceeds to be made by the Dividend
and Transfer Agent from moneys held for the account of the Fund so that they
are available for such payment.
IV. C. Disbursements of Custodian. Upon receipt of a Certificate
directing payment and setting forth the name and address of the person to
whom such payment is to be made, the amount of such payment, the name of the
Fund from which payment is to be made, and the purpose for which payment is
to be made, the Custodian shall disburse amounts as and when directed from
the assets of that Fund. The Custodian is authorized to rely on such
directions and shall be under no obligation to inquire as to the propriety
of such directions.
IV. D. Payment of Custodian Fees. Upon receipt of Written
Instructions directing payment, the Custodian shall disburse moneys from the
assets of the Trust in payment of the Custodian's fees and expenses as
provided in Article VIII hereof.
ARTICLE V
Custody of Trust Assets
V. A. Separate Accounts for Each Fund. As to each Fund, the
Custodian shall open and maintain a separate bank account or accounts in the
United States in the name of the Trust coupled with the name of such Fund,
subject only to draft or order by the Custodian acting pursuant to the terms
of this Agreement, and shall hold all cash received by it from or for the
account of the Fund, other than cash maintained by the Fund in a bank
account established and used by the Fund in accordance with Rule 17f-3 under
the Act. Moneys held by the Custodian on behalf of a Fund may be deposited
by the Custodian to its credit as Custodian in the banking department of the
Custodian. Such moneys shall be deposited by the Custodian in its capacity
as such, and shall be withdrawable by the Custodian only in such capacity.
V. B. Segregation of Non-Cash Assets. All Securities and non-cash
<PAGE>
property held by the Custodian for the account of a Fund (other than
Securities maintained in a Depository or Book-entry System) shall be
physically segregated from other Securities and non-cash property in the
possession of the Custodian (including the Securities and non-cash property
of the other Funds) and shall be identified as subject to this Agreement.
V. C. Securities in Bearer and Registered Form. All Securities
held which are issued or issuable only in bearer form, shall be held by the
Custodian in that form; all other Securities held for the Fund may be
registered in the name of the Custodian, any sub-custodian appointed in
accordance with this Agreement, or the nominee of any of them. The Trust
agrees to furnish to the Custodian appropriate instruments to enable the
Custodian to hold, or deliver in proper form for transfer, any Securities
that it may hold for the account of any Fund and which may, from time to
time, be registered in the name of a Fund.
V. D. Duties of Custodian as to Securities. Unless otherwise
instructed by the Trust, with respect to all Securities held for the Trust,
the Custodian shall on a timely basis (concerning items 1 and 2 below, as
defined in the Custodian's Standards of Service Guide, as amended from time
to time, annexed hereto as Appendix D):
1.) Collect all income due and payable with
respect to such Securities;
2.) Present for payment and collect amounts
payable upon all Securities which may mature or be called,
redeemed, or retired, or otherwise become payable;
3.) Surrender interim receipts or Securities in
temporary form for Securities in definitive form; and
4.) Execute, as Custodian, any necessary
declarations or certificates of ownership under the Federal
income tax laws or the laws or regulations of any other
taxing authority, including any foreign taxing authority, now
<PAGE>
or hereafter in effect.
V. E. Certain Actions Upon Written Instructions. Upon receipt of a
Written Instructions and not otherwise, the Custodian shall:
1.) Execute and deliver to such persons as may be
designated in such Written Instructions proxies, consents,
authorizations, and any other instruments whereby the
authority of the Trust as beneficial owner of any Securities
may be exercised;
2.) Deliver any Securities in exchange for other
Securities or cash issued or paid in connection with the
liquidation, reorganization, refinancing, merger,
consolidation, or recapitalization of any corporation, or the
exercise of any conversion privilege;
3.) Deliver any Securities 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;
4.) Make such transfers or exchanges of the assets
of any Fund and take such other steps as shall be stated in
the Written Instructions to be for the purpose of
effectuating any duly authorized plan of liquidation,
reorganization, merger, consolidation or recapitalization of
the Trust; and
5.) Deliver any Securities held for any Fund to
the depository agent for tender or other similar offers.
<PAGE>
V. F. Custodian to Deliver Proxy Materials. The Custodian shall
promptly deliver to the Trust all notices, proxy material and executed but
unvoted proxies pertaining to shareholder meetings of Securities held by any
Fund. The Custodian shall not vote or authorize the voting of any
Securities or give any consent, waiver or approval with respect thereto
unless so directed by Written Instructions.
V. G. Custodian to Deliver Tender Offer Information. The Custodian
shall promptly deliver to the Trust all information received by the
Custodian and pertaining to Securities held by any Fund with respect to
tender or exchange offers, calls for redemption or purchase, or expiration
of rights as described in the Standards of Service Guide attached as
Appendix D. If the Trust desires to take action with respect to any tender
offer, exchange offer or other similar transaction, the Trust shall notify
the Custodian at least five Business Days prior to the date on which the
Custodian is to take such action. The Trust will provide or cause to be
provided to the Custodian all relevant information for any Security which
has unique put/option provisions at least five Business Days prior to the
beginning date of the tender period.
V. H. Custodian to Deliver Security and Transaction Information.
On each Business Day that the Federal Reserve Bank is open, the Custodian
shall furnish the Trust with a detailed statement of monies held for the
Fund under this Agreement and with confirmations and a summary of all
transfers to or from the account of the Fund. At least monthly and from
time to time, the Custodian shall furnish the Trust with a detailed
statement of the Securities held for the Fund under this Agreement. Where
Securities are transferred to the account of the Fund without physical
delivery, the Custodian shall also identify as belonging to the Fund a
quantity of Securities in a fungible bulk of Securities registered in the
name of the Custodian (or its nominee) or shown on the Custodian's account
on the books of the Book-Entry System or the Depository. With respect to
information provided by this section, it shall not be necessary for the
Custodian to provide notice as described by Article XI Section F. Notices to
<PAGE>
Trust; it shall be sufficient to communicate by such means as shall be
mutually agreeable to the Trust and the Custodian.
ARTICLE VI
Purchase and Sale of Securities
VI. A. Purchase of Securities. Promptly after each purchase of
Securities by the Trust, the Trust shall deliver to the Custodian (i) with
respect to each purchase of Securities which are not Money Market
Securities, Written Instructions, and (ii) with respect to each purchase of
Money Market Securities, Proper Instructions, specifying with respect to
each such purchase the;
1.) name of the issuer and the title of the Securities,
2.) the number of shares, principal amount purchased (and accrued
interest, if any) or other units purchased,
3.) date of purchase and settlement,
4.) purchase price per unit,
5.) total amount payable,
6.) name of the person from whom, or the broker through which,
the purchase was made,
7.) the name of the person to whom such amount is payable, and
8.) the Fund for which the purchase was made.
The Custodian shall, against receipt of Securities purchased by or for the
Trust, pay out of the moneys held for the account of such Fund the total
amount specified in the Written Instructions, or Oral Instructions, if
applicable, to the person named therein. The Custodian shall not be under
any obligation to pay out moneys to cover the cost of a purchase of
Securities for a Fund, if in the relevant Fund custody account there is
insufficient cash available to the Fund for which such purchase was made.
With respect to any repurchase agreement transaction for the Funds, the
<PAGE>
Custodian shall assure that the collateral reflected on the transaction
advice is received by the Custodian.
VI. B. Sale of Securities. Promptly after each sale of Securities
by a Fund, the Trust shall deliver to the Custodian (i) with respect to each
sale of Securities which are not Money Market Securities, Written
Instructions, and (ii) with respect to each sale of Money Market Securities,
Proper Instructions, specifying with respect to each such sale the:
1.) name of the issuer and the title of the Securities,
2.) number of shares, principal amount sold (and accrued interest,
if any) or other units sold,
3.) date of sale and settlement,
4.) sale price per unit,
5.) total amount receivable,
6.) name of the person to whom, or the broker through which,
the sale was made,
7.) name of the person to whom such Securities are to be
delivered, and
8.) Fund for which the sale was made.
The Custodian shall deliver the Securities against receipt of the total
amount specified in the Written Instructions, or Oral Instructions, if
applicable.
VI. C. Delivery Versus Payment for Purchases and Sales. Purchases
and sales of Securities effected by the Custodian will be made on a delivery
versus payment basis. The Custodian may, in its sole discretion, upon
receipt of Written Instructions, elect to settle a purchase or sale
transaction in some other manner, but only upon receipt of acceptable
indemnification from the Fund.
VI. D. Payment on Settlement Date. On contractual settlement date,
the account of the Fund will be charged for all purchased Securities
<PAGE>
settling on that day, regardless of whether or not delivery is made.
Likewise, on contractual settlement date, proceeds from the sale of
Securities settling that day will be credited to the account of the Fund,
irrespective of delivery.
VI. E. Segregated Accounts. The Custodian shall, upon receipt of
Proper Instructions so directing it, establish and maintain a segregated
account or accounts for and on behalf of a Fund. Cash and/or Securities may
be transferred into such account or accounts for specific purposes, to-wit:
1.) in accordance with the provision of any
agreement among the Trust, the Custodian, and a broker-dealer
registered under the 1934 Act, and also a member of the NASD
(or any futures commission merchant registered under the
Commodity Exchange Act), relating to compliance with the
rules of the Options Clearing Corporation and of any
registered national securities exchange, the Commodity
Futures Trading Commission, any registered contract market,
or any similar organization or organizations requiring escrow
or other similar arrangements in connection with transactions
by the Fund;
2.) for purposes of segregating cash or Securities
in connection with options purchased, sold, or written by the
Fund or commodity futures contracts or options thereon
purchased or sold by the Fund;
3.) for the purpose of compliance by the Fund with
the procedures required for reverse repurchase agreements,
firm commitment agreements, standby commitment agreements,
short sales, or any other securities by Act Release No.
10666, or any subsequent release or releases or rule of the
SEC relating to the maintenance of segregated accounts by
registered investment companies;
4.) for the purpose of segregating collateral for
loans of Securities made by the Fund; and
<PAGE>
5.) for other proper corporate purposes, but only
upon receipt of, in addition to Proper Instructions, a copy
of a resolution of the Board of Trustees, certified by an
Officer, setting forth the purposes of such segregated
account.
Each segregated account established hereunder shall be established and
maintained for a single Fund only. All Proper Instructions relating to a
segregated account shall specify the Fund involved.
VI. F. Advances for Settlement. Except as otherwise may be agreed
upon by the parties hereto, the Custodian shall not be required to comply
with any Written Instructions to settle the purchase of any Securities on
behalf of a Fund unless there is sufficient cash in the account(s)
pertaining to such Fund at the time or to settle the sale of any Securities
from such an account(s) unless such Securities are in deliverable form.
Notwithstanding the foregoing, if the purchase price of such Securities
exceeds the amount of cash in the account(s) at the time of such purchase,
the Custodian may, in its sole discretion, advance the amount of the
difference in order to settle the purchase of such Securities. The amount
of any such advance shall be deemed a loan from the Custodian to the Trust
payable on demand and bearing interest accruing from the date such loan is
made up to but not including the date such loan is repaid at the rate per
annum customarily charged by the Custodian on similar loans.
<PAGE>
ARTICLE VII
Trust Indebtedness
VII. A. Borrowings. In connection with any borrowings by the Trust,
the Trust will cause to be delivered to the Custodian by a bank or broker
requiring Securities as collateral for such borrowings (including the
Custodian if the borrowing is from the Custodian), a notice or undertaking
in the form currently employed by such bank or broker setting forth the
amount of collateral. The Trust shall promptly deliver to the Custodian
Written Instructions specifying with respect to each such borrowing: (a) the
name of the bank or broker, (b) the amount and terms of the borrowing, which
may be set forth by incorporating by reference an attached promissory note
duly endorsed by the Trust, or a loan agreement, (c) the date, and time if
known, on which the loan is to be entered into, (d) the date on which the
loan becomes due and payable, (e) the total amount payable to the Trust on
the borrowing date, and (f) the description of the Securities securing the
loan, including the name of the issuer, the title and the number of shares
or other units or the principal amount. The Custodian shall deliver on the
borrowing date specified in the Written Instructions the required collateral
against the lender's delivery of the total loan amount then payable,
provided that the same conforms to that which is described in the Written
Instructions. The Custodian shall deliver, in the manner directed by the
Trust, such Securities as additional collateral, as may be specified in
Written Instructions, to secure further any transaction described in this
Article VII. The Trust shall cause all Securities released from collateral
status to be returned directly to the Custodian and the Custodian shall
receive from time to time such return of collateral as may be tendered to
it.
The Custodian may, at the option of the lender, keep such collateral in
its possession, subject to all rights therein given to the lender because of
the loan. The Custodian may require such reasonable conditions regarding
such collateral and its dealings with third-party lenders as it may deem
<PAGE>
appropriate.
VII. B. Advances. With respect to any advances of cash made by the
Custodian to or for the benefit of a Fund for any purpose which results in
the Fund incurring an overdraft at the end of any Business Day, such advance
shall be repayable immediately upon demand made by the Custodian at any
time.
ARTICLE VIII
Concerning the Custodian
VIII. A. Limitations on Liability of Custodian. Except as otherwise
provided herein, the Custodian shall not be liable for any loss or damage,
including counsel fees, resulting from its action or omission to act or
otherwise, except for any such loss or damage arising out of its negligence
or willful misconduct. The Trust, on behalf of the Fund and only from
assets of the Fund (or insurance purchased by the Trust with respect to its
liabilities on behalf of the Fund hereunder), shall defend, indemnify and
hold harmless the Custodian and its directors, officers, employees and
agents with respect to any loss, claim, liability or cost (including
reasonable attorneys' fees) arising or alleged to arise from or relating to
the Trust's duties hereunder or any other action or inaction of the Trust or
its Trustees, officers, employees or agents, except such as may arise from
the negligent action, omission, willful misconduct or breach of this
Agreement by the Custodian, its directors, officers, employees or agents..
The Custodian shall defend, indemnify and hold harmless the Trust and its
trustees, officers, employees or agents with respect to any loss, claim,
liability or cost (including reasonable attorneys' fees) arising or alleged
to arise from or relating to the Custodian's duties as specifically set
forth in this agreement with respect to the Fund hereunder or any other
action or inaction of the Custodian or its directors, officers, employees,
agents, nominees, or Sub-Custodians as to the Fund, except such as may arise
from the negligent action, omission or willful misconduct of the Trust, its
<PAGE>
trustees, officers, employees, or agents. The Custodian may, with respect
to questions of law apply for and obtain the advice and opinion of counsel
to the Trust at the expense of the Fund, or of its own counsel at its own
expense, and shall be fully protected with respect to anything done or
omitted by it in good faith in conformity with the advice or opinion of
counsel to the Trust, and shall be similarly protected with respect to
anything done or omitted by it in good faith in conformity with advice or
opinion of its counsel, unless counsel to the Fund shall, within a
reasonable time after being notified of legal advice received by the
Custodian, have a differing interpretation of such question of law. The
Custodian shall be liable to the Trust for any proximate loss or damage
resulting from the use of the Book-Entry System or any Depository arising by
reason of any negligence, misfeasance or misconduct on the part of the
Custodian or any of its employees, agents, nominees or Sub-Custodians, but
not for any special, incidental, consequential, or punitive damages;
provided, however, that nothing contained herein shall preclude recovery by
the Trust, on behalf of the Fund, of principal and of interest to the date
of recovery on Securities incorrectly omitted from the Fund's account or
penalties imposed on the Trust, in connection with the Fund, for any
failures to deliver Securities. In any case in which one party hereto may
be asked to indemnify the other or hold the other harmless, the party from
whom indemnification is sought (the "Indemnifying Party") shall be advised
of all pertinent facts concerning the situation in question, and the party
claiming a right to indemnification (the "Indemnified Party") will use
reasonable care to identify and notify the Indemnifying Party promptly
concerning any situation which presents or appears to present a claim for
indemnification against the Indemnifying Party. The Indemnifying Party
shall have the option to defend the Indemnified Party against any claim
which may be the subject of the indemnification, and in the event the
Indemnifying Party so elects, such defense shall be conducted by counsel
chosen by the Indemnifying Party and satisfactory to the Indemnified Party
<PAGE>
and the Indemnifying Party will so notify the Indemnified Party and
thereupon such Indemnifying Party shall take over the complete defense of
the claim and the Indemnifying Party shall sustain no further legal or other
expenses in such situation for which indemnification has been sought under
this paragraph, except the expenses of any additional counsel retained by
the Indemnified Party. In no case shall any party claiming the right to
indemnification confess any claim or make any compromise in any case in
which the other party has been asked to indemnify such party (unless such
confession or compromise is made with such other party's prior written
consent. The provisions of this section VIII. A. shall survive the
termination of this Agreement.
VIII. B. Actions not Required by Custodian. Without limiting the
generality of the foregoing, the Custodian, acting in the capacity of
Custodian hereunder, shall be under no obligation to inquire into, and shall
not be liable for:
1.) The validity of the issue of any Securities
purchased by or for the account of any Fund, the legality of
the purchase thereof, or the propriety of the amount paid
therefor;
2.) The legality of the sale of any Securities by
or for the account of any Fund, or the propriety of the
amount for which the same are sold;
3.) The legality of the issue or sale of any
Shares of any Fund, or the sufficiency of the amount to be
received therefor;
4.) The legality of the redemption of any Shares
of any Fund, or the propriety of the amount to be paid
therefor;
5.) The legality of the declaration or payment of
any dividend by the Trust in respect of Shares of any Fund;
6.) The legality of any borrowing by the Trust on
behalf of the Trust or any Fund, using Securities as
<PAGE>
collateral;
7.) Whether the Trust or a Fund is in compliance
with the 1940 Act, the regulations thereunder, the provisions
of the Trust's charter documents or by-laws, or its
investment objectives and policies as then in effect.
VIII. C. No Duty to Collect Amounts Due From Dividend and Transfer
Agent. The Custodian shall not be under any duty or obligation to take
action to effect collection of any amount due to the Trust from any Dividend
and Transfer Agent of the Trust nor to take any action to effect payment or
distribution by any Dividend and Transfer Agent of the Trust of any amount
paid by the Custodian to any Dividend and Transfer Agent of the Trust in
accordance with this Agreement.
VIII. D. No Enforcement Actions. Notwithstanding Section D of Article
V, the Custodian shall not be under any duty or obligation to take action,
by legal means or otherwise, to effect collection of any amount, if the
Securities upon which such amount is payable are in default, or if payment
is refused after due demand or presentation, unless and until (i) it shall
be directed to take such action by Written Instructions and (ii) it shall be
assured to its satisfaction (including prepayment thereof) of reimbursement
of its costs and expenses in connection with any such action.
VIII. E. Authority to Use Agents and Sub-Custodians. The Trust
acknowledges and hereby authorizes the Custodian to hold Securities through
its various agents described in Appendix C annexed hereto. In addition, the
Trust acknowledges that the Custodian may appoint one or more financial
institutions, as agent or agents or as sub-custodian or sub-custodians,
including, but not limited to, banking institutions located in foreign
countries, for the purpose of holding Securities and moneys at any time
owned by the Fund. The Custodian shall not be relieved of any obligation or
liability under this Agreement in connection with the appointment or
activities of such agents or sub-custodians. Any such agent or
sub-custodian shall be qualified to serve as such for assets of investment
<PAGE>
companies registered under the Act. The Funds shall reimburse the Custodian
for all costs incurred by the Custodian in connection with opening accounts
with any such agents or sub-custodians. Upon request, the Custodian shall
promptly forward to the Trust any documents it receives from any agent or
sub-custodian appointed hereunder which may assist trustees of registered
investment companies to fulfill their responsibilities under Rule 17f-5 of
the Act.
VIII. F. No Duty to Supervise Investments. The Custodian shall not be
under any duty or obligation to ascertain whether any Securities at any time
delivered to or held by it for the account of the Trust are such as properly
may be held by the Trust under the provisions of the Declaration of Trust
and the Trust's By-Laws.
VIII. G. All Records Confidential. The Custodian shall treat all
records and other information relating to the Trust and the assets of all
Funds as confidential and shall not disclose any such records or information
to any other person unless (i) the Trust shall have consented thereto in
writing or (ii) such disclosure is compelled by law.
VIII. H. Compensation of Custodian. The Custodian shall be entitled
to receive and the Trust agrees to pay to the Custodian, for the Fund's
account from the Fund's assets only, such compensation as shall be
determined pursuant to Appendix E attached hereto, or as shall be determined
pursuant to amendments to Appendix E as approved by the Custodian and the
Trust. The Custodian shall be entitled to charge against any money held
by it for the accounts of the Fund the amount of any loss, damage, liability
or expense, including counsel fees, for which it shall be entitled to
reimbursement under the provisions of this Agreement as determined by
agreement of the Custodian and the Trust or by the final order of any court
or arbitrator having jurisdiction and as to which all rights of appeal shall
have expired. The expenses which the Custodian may charge against the
account of a Fund include, but are not limited to, the expenses of agents or
Sub-Custodians incurred in settling transactions involving the purchase and
<PAGE>
sale of Securities of the Fund.
VIII. I. Reliance Upon Instructions. The Custodian shall be entitled
to rely upon any Proper Instructions if such reliance is made in good faith.
The Trust agrees to forward to the Custodian Written Instructions confirming
Oral Instructions in such a manner so that such Written Instructions are
received by the Custodian, whether by hand delivery, telex, facsimile or
otherwise, on the same Business Day on which such Oral Instructions were
given. The Trust agrees that the failure of the Custodian to receive such
confirming instructions shall in no way affect the validity of the
transactions or enforceability of the transactions hereby authorized by the
Trust. The Trust agrees that the Custodian shall incur no liability to the
Trust for acting upon Oral Instructions given to the Custodian hereunder
concerning such transactions.
VIII. J. Books and Records. The Custodian will (i) set up and
maintain proper books of account and complete records of all transactions in
the accounts maintained by the Custodian hereunder in such manner as will
meet the obligations of the Fund under the Act, with particular attention to
Section 31 thereof and Rules 3la-1 and 3la-2 thereunder and those records
are the property of the Trust, and (ii) preserve for the periods prescribed
by applicable Federal statute or regulation all records required to be so
preserved. All such books and records shall be the property of the Trust,
and shall be available, upon request, for inspection by duly authorized
officers, employees or agents of the Trust and employees of the SEC.
VIII. K. Internal Accounting Control Systems. The Custodian shall
send to the Trust any report received on the systems of internal accounting
control of the Custodian, or its agents or sub-custodians, as the Trust may
reasonably request from time to time.
VIII. L. No Management of Assets by Custodian. The Custodian performs
only the services of a custodian and shall have no responsibility for the
<PAGE>
management, investment or reinvestment of the Securities or other assets
from time to time owned by any Fund. The Custodian is not a selling agent
for Shares of any Fund and performance of its duties as custodian shall not
be deemed to be a recommendation to any Fund's depositors or others of
Shares of the Fund as an investment. The Custodian shall have no duties or
obligations whatsoever except such duties and obligations as are
specifically set forth in this Agreement, and no covenant or obligation
shall be implied in this Agreement against the Custodian.
VIII. M. Assistance to Trust. The Custodian shall take all reasonable
action, that the Trust may from time to time request, to assist the Trust in
obtaining favorable opinions from the Trust's independent accountants, with
respect to the Custodian's activities hereunder, in connection with the
preparation of the Fund's Form N- IA, Form N-SAR, or other annual reports to
the SEC.
ARTICLE IX
Termination
IX. A. Termination. Either party hereto may terminate this Agreement
for any reason by giving to the other party a notice in writing specifying
the date of such termination, which shall be not less than ninety (90) days
after the date of giving of such notice. If such notice is given by the
Trust, it shall be accompanied by a copy of a resolution of the Board of
Trustees of the Trust, certified by the Secretary of the Trust, electing to
terminate this Agreement and designating a successor custodian or custodians
each of which shall be a bank or trust company having not less than
<PAGE>
$100,000,000 aggregate capital, surplus, and undivided profits. In the
event such notice is given by the Custodian, the Trust shall, on or before
the termination date, deliver to the Custodian a copy of a resolution of the
Board of Trustees of the Trust, certified by the Secretary, designating a
successor custodian or custodians to act on behalf of the Trust. In the
absence of such designation by the Trust, the Custodian may designate a
successor custodian which shall be a bank or trust company having not less
than $100,000,000 aggregate capital, surplus, and undivided profits. Upon
the date set forth in such notice this Agreement shall terminate, and the
Custodian, provided that it has received a notice of acceptance by the
successor custodian, shall deliver, on that date, directly to the successor
custodian all Securities and monies then owned by the Fund and held by it as
Custodian. Upon termination of this Agreement, the Trust shall pay to the
Custodian on behalf of the Trust such compensation as may be due as of the
date of such termination. The Trust agrees on behalf of the Trust that the
Custodian shall be reimbursed for its reasonable costs in connection with
the termination of this Agreement.
IX. B. Failure to Designate Successor Trustee. If a successor
custodian is not designated by the Trust, or by the Custodian in accordance
with the preceding paragraph, or the designated successor cannot or will not
serve, the Trust shall, upon the delivery by the Custodian to the Trust of
all Securities (other than Securities held in the Book-Entry System which
cannot be delivered to the Trust) and moneys then owned by the Trust, be
deemed to be the custodian for the Trust, and the Custodian shall thereby be
relieved of all duties and responsibilities pursuant to this Agreement,
other than the duty with respect to Securities held in the Book-Entry
System, which cannot be delivered to the Trust, which shall be held by the
Custodian in accordance with this Agreement.
ARTICLE X
Force Majeure
Neither the Custodian nor the Trust shall be liable for any failure or
delay in performance of its obligations under this Agreement arising out of
or caused, directly or indirectly, by circumstances beyond its reasonable
control, including, without limitation, acts of God; earthquakes; fires;
floods; wars; civil or military disturbances; sabotage; strikes; epidemics;
riots; labor disputes; acts of civil or military authority; governmental
<PAGE>
actions; or inability to obtain labor, material, equipment or
transportation; provided, however, that the Custodian, in the event of a
failure or delay, shall use its best efforts to ameliorate the effects of
any such failure or delay.
ARTICLE XI
Miscellaneous
XI. A. Designation of Authorized Persons. Appendix A sets forth the
names and the signatures of all Authorized Persons as of this date, as
certified by the Secretary of the Trust. The Trust agrees to furnish to the
Custodian a new Appendix A in form similar to the attached Appendix A, if
any present Authorized Person ceases to be an Authorized Person or if any
other or additional Authorized Persons are elected or appointed. Until such
new Appendix A shall be received, the Custodian shall be fully protected in
acting under the provisions of this Agreement upon Oral Instructions or
signatures of the then current Authorized Persons as set forth in the last
delivered Appendix A.
XI. B. Limitation of Personal Liability. No recourse under any
obligation of this Agreement or for any claim based thereon shall be had
against any organizer, shareholder, officer, trustee, past, present or
future as such, of the Trust or of any predecessor or successor, either
directly or through the Trust or any such predecessor or successor, whether
by virtue of any constitution, statute or rule of law or equity, or by the
enforcement of any assessment or penalty or otherwise; it being expressly
agreed and understood that this Agreement and the obligations thereunder are
enforceable solely against the assets of the Trust, and that no such
personal liability whatever shall attach to, or is or shall be incurred by,
the organizers, shareholders, officers, or trustees of the Trust or of any
predecessor or successor, or any of them as such, because of the obligations
contained in this Agreement or implied therefrom and that any and all such
<PAGE>
liability is hereby expressly waived and released by the Custodian as a
condition of, and as a consideration for, the execution of this Agreement.
XI. C. Authorization By Board. The obligations set forth in this
Agreement as having been made by the Trust have been made by the Board of
Trustees, acting as such Trustees for and on behalf of the Trust, pursuant
to the authority vested in them under the laws of the State of Ohio, the
Declaration of Trust and the By-Laws of the Trust. This Agreement has been
executed by Officers of the Trust as officers, and not individually, and the
obligations contained herein are not binding upon any of the Trustees,
Officers, agents or holders of shares, personally, but bind only the Trust
and then only to the extent of the assets of the Trust.
XI. D. Custodian's Consent to Use of Its Name. The Trust shall obtain
the Custodian's consent prior to the publication and/or dissemination or
distribution, of the Prospectus and any other documents (including
advertising material) specifically mentioning the Custodian (other than
merely by name and address).
XI. E. Notices to Custodian. Any notice or other instrument in
writing, authorized or required by this Agreement to be given to the
Custodian, shall be sufficiently given if addressed to the Custodian and
mailed or delivered to it at its offices at Star Bank Center, 425 Walnut
Street, M. L. 6118, Cincinnati, Ohio 45202, attention Mutual Fund Custody
Department, or at such other place as the Custodian may from time to time
designate in writing.
XI. F. Notices to Trust. Any notice or other instrument in writing,
authorized or required by this Agreement to be given to the Trust shall be
sufficiently given when delivered to the Trust or on the second Business Day
following the time such notice is deposited in the U.S. mail postage prepaid
and addressed to the Trust at its office at 18820 High Parkway, Rocky River,
Ohio 44116 or at such other place as the Trust may from time to time
designate in writing.
<PAGE>
XI. G. Amendments In Writing. This Agreement, with the exception of
the Appendices, may not be amended or modified in any manner except by a
written agreement executed by both parties with the same formality as this
Agreement, and authorized and approved by a resolution of the Board of
Trustees of the Trust.
XI. H. Successors and Assigns. 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 or by the Custodian, and no attempted assignment by the Trust
or the Custodian shall be effective without the written consent of the other
party hereto.
XI. I. Governing Law. This Agreement shall be construed in
accordance with the laws of the State of Ohio.
XI. J. Jurisdiction. Any legal action, suit or proceeding to be
instituted by either party with respect to this Agreement shall be brought
by such party exclusively in the courts of the State of Ohio or in the
courts of the United States for the Southern District of Ohio, and each
party, by its execution of this Agreement, irrevocably (i) submits to such
jurisdiction and (ii) consents to the service of any process or pleadings by
first class U.S. mail, postage prepaid and return receipt requested, or by
any other means from time to time authorized by the laws of such
jurisdiction.
XI. K. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but such
counterparts shall, together, constitute only one instrument.
XI. L. Headings. The headings of paragraphs in this Agreement are
for convenience of reference only and shall not affect the meaning or
construction of any provision of this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective Officers, thereunto duly authorized as of the
day and year first above written.
<PAGE>
WITNESS: TRUST:
The Jhaveri Trust
Saumil Jhaveri ___________ By: Ramesh Jhaveri_____________
Title: President___________
WITNESS: CUSTODIAN:
Star Bank, N.A.
Mark Dowling________________ By: Nancy Kelly ____________
Title: Vice President___________
<PAGE> 1
Exhibit 99.B11
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the use in this
Post-Effective Amendment Number 4 of our report dated April 21, 1998 and to all
references to our firm included in or made a part of this Post-Effective
Amendment.
McCurdy & Associates CPA's, Inc.
August 11, 1998
<PAGE> 1
April 10, 1995
The Jhaveri Trust
18820 High Parkway
Cleveland, Ohio 44116
Gentlemen:
The undersigned hereby purchases 8,333.33 shares of the
Jhaveri Value Fund at $12.00 per share, representing a total
investment of $100,000.00 in the shares of the series of The
Jhaveri Trust. The undersigned hereby represents that (i)
such purchase is for investment purposes, and (ii) the
undersigned has no present intention of redeeming or selling
said shares.
Ramesh C. Jhaveri
