REVOLVING CREDIT AGREEMENT between CAPITOL SERIES TRUST, on behalf and for the benefit of each of its series and THE HUNTINGTON NATIONAL BANK Dated as of March 15, 2019
between
on behalf and for the benefit of each of its series
and
THE HUNTINGTON NATIONAL BANK
Dated as of March 15, 2019
TABLE OF CONTENTS
Page | |||
Section 1 | Definitions | 1 | |
1.1 | Specific Definitions | 1 | |
1.2 | Accounting Terms | 5 | |
1.3 | Uniform Commercial Code Terms | 6 | |
1.4 | Computation of Time Periods | 6 | |
1.5 | Terms Generally | 6 | |
Section 2 | Loan and Term | 6 | |
2.1 | Revolving Credit Loans | 6 | |
2.2 | Promissory Note | 7 | |
2.3 | Repayment of Principal | 8 | |
2.4 | Payment of Interest | 8 | |
2.5 | Term of Facility | 9 | |
2.6 | Unused Fee | 9 | |
2.7 | Accounting | 9 | |
2.8 | Use of Proceeds | 9 | |
2.9 | Increased Costs | 10 | |
2.10 | Taxes | 10 | |
2.11 | Special Provisions Relating to the LIBO Rate | 11 | |
Section 3 | Representations and Warranties | 12 | |
3.1 | Organization and Qualification | 12 | |
3.2 | Due Authorization | 12 | |
3.3 | Litigation | 12 | |
3.4 | Margin Stock | 12 | |
3.5 | Laws and Taxes | 12 | |
3.6 | Financial Condition | 13 | |
3.7 | Representations in Exhibit 3.7 | 13 | |
3,8 | Borrowing Authority | 13 | |
3.9 | Accurate and Complete Statements | 13 | |
3.10 | Patriot Act | 13 | |
3.11 | OFAC | 13 | |
Section | 4 | Financial Statements and Information | 14 |
4.1 | Financial Statements | 14 |
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Section 5 | Covenants | 14 | |
5.1 | Existence; Merger | 14 | |
5.2 | Pledge or Encumbrance of Assets | 14 | |
5.3 | Business | 14 | |
5.4 | Compliance with Law | 14 | |
5.5 | Representations | 15 | |
5.6 | Fees and Costs | 15 | |
5.7 | Fund Coverage Ratio | 15 | |
5.8 | Limitation on Indebtedness | 16 | |
5.9 | Limitation on Fundamental Changes | 16 | |
Section 6 | Conditions Precedent | 16 | |
6.1 | Conditions to Initial Loan | 16 | |
6.2 | Conditions to Each Loan | 17 | |
Section 7 | Events of Default and Remedies | 17 | |
7.1 | Events of Default | 17 | |
7.2 | Remedies: | 18 | |
7.3 | Cumulative Remedies | 18 | |
7.4 | Limit of Liability | 19 | |
7.5 | Indemnification | 19 | |
Section 8 | Miscellaneous Provisions | 20 | |
8.1 | Delays and Waiver | 20 | |
8.2 | Waiver by the Borrower | 20 | |
8.3 | Complete Agreement | 20 | |
8.4 | Severability | 20 | |
8.5 | Binding Effect | 20 | |
8.6 | Notices | 20 | |
8.7 | Debtor-Creditor Relationship | 21 | |
8.8 | Governing Law; Submission to Jurisdiction; Venue; Waiver of Jury Trial | 22 | |
8.9 | Survival of Representations and Warranties | 22 | |
8.10 | Important Information About Procedures Required By The Patriot Act | 23 | |
8.11 | Limitation of Series Liability | 23 |
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Exhibits | ||
Exhibit 1.1 | - | Participating Funds |
Exhibit 1.2 | - | Fund Borrowing Limits |
Exhibit 1.3 | - | Specific Terms |
Exhibit 2.1 | - | List of Authorized Representative |
Exhibit 2.2 | - | Revolving Note |
Exhibit 3.1 | - | Certificate of the Borrower |
Exhibit 3.7 | - | Specific Representations |
Appendices | ||
Appendix A | - | Pledge and Security Agreement |
Appendix B | - | Authorization Letter |
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This REVOLVING CREDIT AGREEMENT (“Agreement”) is entered into as of March 15, 2019 by and between CAPITOL SERIES TRUST, an Ohio business trust (the “Borrower”), executing this Agreement on behalf of itself, and, if applicable, on behalf and for the benefit only of those investment series set forth on Exhibit 1.1 (the “Fund(s)” and each, a “Fund”) and THE HUNTINGTON NATIONAL BANK, a national banking association (the “Bank”).
1.1 | Specific Definitions. The following definitions shall apply: |
“Affiliate” shall mean as to any Person, any other Person (excluding any Foreign Subsidiary) which, directly or indirectly, is in control of, is controlled by, or is under common control with such Person. For purposes of this definition, a Person shall be deemed to be “controlled by” a Person if such Person possesses, directly or indirectly, power either (i) to vote twenty-five percent (25%) or more of the securities having ordinary voting power for the election of directors of such Person or (ii) to direct or cause the direction of the management and policies of such Person whether by control or otherwise.
“Annual Fee” has the meaning set forth on Exhibit 1.3.
“Anti-Terrorism Laws” means those laws and sanctions relating to terrorism or money laundering, including Executive Order No. 13224, the USA Patriot Act (Public Law 107-56), the Bank Secrecy Act (Public Law 91-508), the Trading with the Enemy Act (50 U.S.C. App. Section 1 et. seq.), the International Emergency Economic Powers Act (50 U.S.C. Section 1701 et. seq.), and the sanction regulations promulgated pursuant thereto by the Office of Foreign Assets Control, as well as laws relating to prevention and detection of money laundering in 18 U.S.C. Sections 1956 and 1957 (as any of the foregoing may from time to time be amended, renewed, extended or replaced).
“Authorization Letter” means the Authorization Letter(s) in the form attached as Appendix B hereto and incorporated herein by reference, as executed by the Borrower and the Investment Adviser from time to time on behalf of the Fund, including as such Authorization Letter may be amended, restated or otherwise modified from time to time, whereby the Borrower and the Investment Adviser authorize the Custodian to direct the making of Loans to the Borrower pursuant to this Agreement.
“Blocked Person” shall means any of the following: (a) a Person that is listed in the annex to, or is otherwise subject to the provisions of, the Executive Order No. 13224; (b) a Person owned or controlled by, or acting for or on behalf of, any Person that is listed in the annex to, or is otherwise subject to the provisions of, the Executive Order No. 13224; (c) a Person with which Bank is prohibited from dealing or otherwise engaging in any transaction by any Anti-Terrorism Law; (d) a Person that commits, threatens or conspires to commit or supports “terrorism” as defined in the Executive Order No. 13224; or (e) a Person that is named as a “specially designated national” on the most current list published by the U.S. Treasury Department Office of Foreign Asset Control at its official website or any replacement website or other replacement official publication of such list.
“Borrowing Date” has the meaning set forth in Section 2.1(b).
“Borrowing Limit,” with respect to the Borrower and a particular Fund, means the maximum amount of borrowing that the Borrower is permitted to borrow for the benefit of such Fund pursuant to such Fund’s Statement of Additional Information as a fundamental investment policy for purposes contemplated by this Agreement and as set forth on Exhibit 1.2.
“Business Day” shall mean any day other than a Saturday, a Sunday, or other day on which Bank is authorized or required to be closed; and if the applicable Business Day relates to any Loan accruing interest based on the LIBO Rate, such day must also be a day for trading by and between banks in US dollar deposits in the London interbank market.
“Closing Date” means the date of the making of the Loan under this Agreement, or the date of any amendment to this Agreement to increase or decrease the Loan Amount, as provide in Section 2.5.
“Costs” shall have the meaning given that term in Section 5.6.
“Custodian” means The Huntington National Bank.
“Custody Agreement” means that certain Custodian Agreement by and between the Custodian and Borrower dated as of December 15, 2016 as it may be amended, restated or otherwise modified from time to time.
“Default” means any event that, with the giving of notice or the passage of time, or both, would be an Event of Default.
“Event of Default” has the meaning set forth in Section 7.1.
“Facility” has the meaning set forth in Section 2.1(a).
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“Fund” means those series of the Borrower listed on Exhibit 1.1, as such Exhibit may be amended from time to time.
“Governmental Authority” shall mean any foreign, federal, state, regional, local, municipal or other government, or any department, commission, board, bureau, agency, public authority or instrumentality thereof, or any court.
“Insolvency Event” means, with respect to a Person, any of the following: a court enters a decree or order for relief in respect to such Person in an involuntary case under any applicable bankruptcy, insolvency or other similar law then in effect, or appoints a receiver, liquidator, assignee, custodian, trustee, sequestrator (or other similar official) of such Person or for any substantial part of its property, or orders the wind-up or liquidation of its affairs; or a petition initiating an involuntary case under any such bankruptcy, insolvency or similar law is filed against such Person; or such Person commences a voluntary case under any applicable bankruptcy, insolvency or other similar law in effect, or makes any general assignment for the benefit of creditors, or fails generally to pay its debts as such debts become due, or takes corporate action in furtherance of any of the foregoing.
“Interest Rate” has the meaning set forth on Exhibit 1.3.
“Investment Adviser” has the meaning set forth in Exhibit 1.3.
“LIBO Rate” shall mean the rate obtained by dividing: (1) the actual or estimated per annum rate, or the arithmetic mean of the per annum rates, of interest for deposits in U.S. dollars in the interbank market for the related LIBO Rate Interest Period, as determined by Bank in its reasonable discretion based upon reference to information which appears on page LIBOR01, captioned ICE Benchmark Administration Interest Settlement Rates, of the Reuters America Network, a service of Reuters America Inc. (or such other page that may replace that page on that service for the purpose of displaying London interbank offered rates; or, if such service ceases to be available or ceases to be used by Bank, such other reasonably comparable money rate service as Bank may select) or upon information obtained from any other reasonable procedure, as of two Business Days prior to the first day of a LIBO Rate Interest Period; by (2) an amount equal to one minus the stated maximum rate (expressed as a decimal), if any, of all reserve requirements (including, without limitation, any marginal, emergency, supplemental, special or other reserves) that is specified on the first day of each LIBO Rate Interest Period by the Board of Governors of the Federal Reserve System (or any successor agency thereto) for determining the maximum reserve requirement with respect to eurocurrency funding (currently referred to as “Eurocurrency liabilities” in Regulation D of such Board) maintained by a member bank of such System, or any other regulations of any governmental authority having jurisdiction with respect thereto as conclusively determined by Bank. Subject to any maximum or minimum interest rate limitation specified herein or by applicable law, any variable rate of interest on the obligation evidenced hereby shall change automatically, without notice to the Borrower, on the first day of each LIBO Rate Interest Period. Except for the first interest rate change, the interest rate change will not occur more often than each month. If the LIBO Rate becomes unavailable, Bank may designate a substitute index after notifying Borrower.
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This Agreement expresses an initial interest rate and an initial index value to five (5) places to the right of the decimal point. This expression is done solely for convenience. The reference sources for the index used by Bank, as stated in this Agreement may actually quote the index on any given day to as many as five (5) places to the right of the decimal point. Therefore, the actual index value used to calculate the interest rate on and the amount of interest due under this Agreement will be to five (5) places to the right of the decimal point.
“LIBO Rate Interest Period” shall mean one (1) month, provided that: (1) if any LIBO Rate Interest Period would otherwise expire on a day which is not a Business Day, the LIBO Rate Interest Period shall be extended to the next succeeding Business Day (provided, however, that if such next succeeding Business Day occurs in the following calendar month, then the LIBO Rate Interest Period shall expire on the immediately preceding Business Day).
“Lien” means any security interest, mortgage, pledge, assignment, or voluntary or involuntary lien, charge or other encumbrance of any kind, including interests of vendors or lessors under conditional sale contracts or capital leases.
“Loan Amount” has the meaning set forth in Exhibit 1.3.
“Loan Documents,” means this Agreement, the Note, any guaranties, security agreements, collateral assignments, pledge agreements, including the Pledge and Security Agreement, account assignments, control agreements, letter of credit application and agreement or other reimbursement agreements, any subordination agreements, intercreditor agreements and any and all other agreements, instruments and documents, including powers of attorney, consents, and all other writings heretofore, now or hereafter executed by the Borrower or the Investment Adviser or delivered to Bank in connection with this Agreement
“Loan” and “Loans”, collectively, shall have the meanings given those terms in Section 2.1(a).
“Maturity Date” has the meaning set forth on Exhibit 1.3
“Maximum Amount” has the meaning set forth on Exhibit 1.3.
“Note” has the meaning set forth in Section 2.2(a).
“Obligation(s)” means all loans, advances, indebtedness and other obligations of Borrower owed to the Bank under this Agreement or any other Loan Document of every description whether now existing or hereafter arising and whether direct or indirect, primary or as guarantor or surety, absolute or contingent, liquidated or unliquidated, matured or unmatured, secured or unsecured, and all Costs incurred by the Bank (subject to the limitations set forth in Section 5.6).
“OFAC” means The Office of Foreign Assets Control of the U.S. Department of the Treasury.
“Person” shall mean any individual, sole proprietorship, partnership, corporation, business trust, joint stock company, trust, unincorporated organization, association, limited liability company, institution, public benefit corporation, joint venture, entity or governmental body.
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“Permitted Liens” shall mean Liens to the Bank under this Agreement or in connection with the Bank’s activities as a Fund’s securities lending and custodial agent, Liens of governmental entities that secure amounts not at the time due and payable and that are imposed by law without the consent of the Borrower, and Liens in favor of a Fund’s broker or other intermediary relating to short sales and other transactions permitted under a Fund’s prospectus or Statement of Additional Information.
“Pledge Agreement,” means that Pledge and Security Agreement by and between the Bank and Borrower in the form attached as Appendix A hereto, including as such Agreement may be amended, restated or otherwise modified from time to time.
“Requirement of Law” as to any Person shall mean the articles or certificate of incorporation and bylaws or other organizational or governing documents of such Person and any law, treaty, rule or regulation or determination of an arbitrator or a court or other Governmental Authority, in each case applicable to or binding upon such Person or any of its property or to which such Person or any of its property is subject.
“Sanctioned Entity” means (a) a country or a government of a country, (b) an agency of the government of a country, (c) an organization directly or indirectly controlled by a country or its government, (d) a Person resident in or determined to be resident in a country, in each case, that is subject to a country sanctions program administered and enforced by OFAC.
“Sanctioned Person” means a Person named on the list of Specially Designated Nationals maintained by OFAC.
“Subsidiary” means a corporation or other entity of whose shares of stock or other ownership interests having ordinary voting power (other than stock or other ownership interests having such power only by reason of the happening of a contingency) to elect a majority of the directors of such corporation, are owned, directly or indirectly, by the Borrower.
“Trust Custody Account,” means each account of the Borrower’s established with the Custodian on behalf of a Fund pursuant to the Custody Agreement.
“Unused Fee” has the meaning set forth in Section 2.6.
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1.3 Uniform Commercial Code Terms. All capitalized terms used herein with reference to the Collateral and defined in the Uniform Commercial Code as adopted in the State of Ohio from time to time shall have the meaning given therein unless otherwise defined herein. To the extent the definition of any category or type of Collateral is expanded by any amendment, modification or revision to the Uniform Commercial Code, such expanded definition will apply automatically as of the effective date of such amendment, modification or revision.
2.1 | Revolving Credit Loans. |
(a) Subject to the terms and conditions hereof, the Bank hereby extends to the Borrower a line of credit facility (the “Facility”) under which the Bank may make loans to the Borrower for the benefit of a Fund during the term of this Agreement in such amounts as the Borrower may from time to time request (the “Loans” and each, a “Loan”), up to an aggregate principal amount equal to the Maximum Amount, provided, however, that the Bank will not make a Loan to the Borrower for the benefit of a Fund if, after giving effect to such Loan, (i) the aggregate principal amount of all Loans outstanding for the Fund would exceed the Maximum Amount or (ii) the aggregate principal amount of all Loans outstanding for the benefit of any Fund would exceed the Borrowing Limit with respect to such Fund. Borrower may borrow and reborrow hereunder, provided that the principal amount of all Loans outstanding at any one time to Borrower shall not exceed the Maximum Amount
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(b) The Borrower must give, or cause its Investment Adviser or its authorized agent, including without limitation the Custodian pursuant to the terms of the Authorization Letter, to give the Bank irrevocable written or telephonic notice of Borrower’s intention to borrow under this Agreement by 2:00 p.m. local Columbus, Ohio time on the proposed Loan date (“Borrowing Date”). The Bank is authorized to make Loans based on the instructions received from any authorized representative of the Borrower, its Investment Adviser or authorized agent as listed on Exhibit 2.1 attached hereto, which list may be modified by the Borrower from time to time by written notice to the Bank. Provided that all conditions precedent to the making of any Loan as set forth in Section 6 have been satisfied, the Bank will make Loans by crediting the amount thereof to the appropriate demand deposit account at the Bank established by the Borrower for the Funds in accordance with Section 6.1(g) or such other account as the Bank and the Borrower may agree in writing. Each request for a Loan shall include the following:
(i) the proposed Borrowing Date;
(ii) the Fund for whom the Borrower is requesting the Loan and the amount of such requested Loan; and
(iii) a certification to the Bank, or other evidence satisfactory to the Bank, that, after giving effect to the requested Loan, (A) the aggregate principal amount of all Loans outstanding does not exceed the Maximum Amount and (B) the aggregate principal amount of all Loans outstanding for the benefit of the Fund for which the Loan has been requested does not exceed the Borrowing Limit for such Fund.
(c) Each written notice shall constitute a representation and warranty by the Borrower as of the date thereof that the conditions contained in Section 6 have been satisfied with respect to the Borrower.
(d) Notwithstanding anything in this Agreement to the contrary, the Bank may rely on telephonic instructions which it reasonably believes to be genuine. Telephonic requests shall be confirmed in writing or by other mutually acceptable electronic means no later than the Borrowing Date in a form satisfactory to the Bank. Borrower agrees to indemnify and hold the Bank harmless for any reasonable action taken in reliance upon such telephonic notice; provided that the Borrower shall not be liable for any such action, loss or expense to the extent such action, loss or expense results solely from the gross negligence or willful misconduct of the Bank.
2.2 | Promissory Note. |
(a) On or before the Closing Date, the Borrower shall duly issue and deliver to the Bank a Promissory Note in the form of Exhibit 2.2 hereto (the “Note”), payable to the Bank in the Maximum Amount.
(b) Notwithstanding anything to the contrary contained in this Agreement, the parties hereto acknowledge and agree that the sole source of payment of the obligations of the Borrower hereunder with respect to any Fund, including, without limitation, the principal of and interest on each Loan made hereunder for the benefit of any Fund and any other amounts attributable to the Loans made hereunder to the Borrower for the benefit of any Fund, shall be the revenues and assets of such Fund, and not the revenues and assets of any other Fund.
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2.3 | Repayment of Principal. |
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2.9 | Increased Costs. |
(a) If the adoption of or any change in any Requirement of Law or in the interpretation or application thereof or compliance by the Bank with any request or directive (whether or not having the force of law) from any Governmental Authority made subsequent to a Borrowing Date shall subject the Bank to any tax of any kind whatsoever with respect to this Agreement, the Note or any Loan made by it, or change the basis of taxation of payments to the Bank in respect thereof and the result is to increase the cost to the Bank, by an amount which Bank deems to be material, of making or maintaining the Loans, or to reduce any amount receivable hereunder in respect thereof, then the Borrower shall promptly pay the Bank, upon its demand, any additional amounts necessary to compensate the Bank for such increased cost or reduced amount receivable.
(b) If the Bank shall have determined that the adoption of, or any change in, any Requirement of Law regarding capital adequacy or in the interpretation or application thereof, or compliance by the Bank or any corporation controlling Bank with any request or directive regarding capital adequacy (whether or not having the force of law) from any Governmental Authority made subsequent to a Borrowing Date shall have the effect of reducing the rate of return on Bank’s or such corporation’s capital as a consequence of its obligations hereunder to a level below that which the Bank or such corporation could have achieved but for such adoption, change or compliance (taking into consideration Bank’s or such corporation’s policies with respect to capital adequacy) by an amount deemed by Bank to be material, then from time to time, after submission by Bank to the Borrower of a written request therefor, the Borrower shall pay to Bank such additional amount or amounts as will compensate Bank for such reduction.
(c) If, due to (i) the introduction of or any change in or in the interpretation of any law or regulation, (ii) the compliance with any guideline or request from any central bank or other public authority (whether or not having the force of law), or (iii) the failure of the Borrower to pay any amount when required by the terms of this Agreement, there shall be any loss or increase in the cost to the Bank of accruing interest on the Obligation based upon the LIBO Rate, then the Borrower agrees that the Borrower shall, from time to time, upon demand by the Bank, pay to the Bank additional amounts sufficient to compensate the Bank for such loss or increased cost. A certificate as to the amount of such loss or increase cost, submitted to the Borrower by the Bank, shall be conclusive evidence, absent manifest error, of the correctness of such amount.
(d) A certificate as to any amounts of such loss or increase cost, submitted by the Bank to the Borrower shall be conclusive, in the absence of manifest error, of the correctness of such amount.
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2.11 | Special Provisions Relating to the LIBO Rate. |
(a) In the event that Bank reasonably determines that by reason of (i) any change arising after the date of this Agreement affecting the interbank euro currency market or affecting the position of the Bank with respect to such market, adequate and fair means do not exist for ascertaining the applicable interest rates by reference to which the LIBO Rate then being determined is to be fixed, (ii) any change arising after the date of this Agreement in any applicable law or governmental rule, regulation or order (or any interpretation thereof, including the introduction of any new law or governmental rule, regulation or order), or (iii) any other circumstance affecting the Bank or the interbank euro currency market (such as, but not limited to, official reserve requirements required by Regulation D of the Board of Governors of the Federal Reserve System), the LIBO Rate plus the applicable spread shall not represent the effective pricing to the Bank of accruing interest hereunder based upon the LIBO Rate, then, and in any such event, the accruing of interest hereunder based upon the LIBO Rate shall be suspended until Bank shall notify the Borrower that the circumstances causing such suspension no longer exist. In such case, beginning on the date of such suspension, interest shall accrue hereunder at a variable rate of interest per annum, which shall change in the manner set forth below, equal to zero percentage points (0%) in excess of the Prime Commercial Rate (as defined hereafter).
(b) In the event that on any date Bank shall have reasonably determined that accruing interest hereunder based upon the LIBO Rate has become unlawful by compliance by Bank in good faith with any law, governmental rule, regulation or order, then, and in any such event, Bank shall promptly give notice thereof to the Borrower In such case, when required by law, interest shall accrue hereunder at a variable rate of interest per annum, which shall change in the manner set forth below, equal to zero percentage points (0%) in excess of the Prime Commercial Rate. Notwithstanding the preceding sentence, if the circumstances of the first sentence of this paragraph occur and the Borrower has the ability to request advances hereunder based on interest rates other than the LIBO Rate, then the Borrower shall repay any advances based on the LIBO Rate with advances under one of the other rates available to the Borrower hereunder. As used herein, “Prime Commercial Rate” shall mean the rate established by Bank from time to time based on its consideration of economic, money market, business and competitive factors, and it is not necessarily the Bank’s most favored rate. Subject to any maximum or minimum interest rate limitation specified herein or by applicable law, any variable rate of interest on the Obligation evidenced hereby based upon the Prime Commercial Rate shall change automatically without notice to the Borrower immediately with each change in the Prime Commercial Rate. If during any period of time while interest is accruing based upon the Prime Commercial Rate, the Obligation evidenced by any Note is not paid at maturity, whether maturity occurs by lapse of time, demand, acceleration or otherwise, the unpaid principal balance and any unpaid interest thereon shall, thereafter until paid, bear interest at a rate equal to three percentage points (3%) in excess of the rate indicated in the immediately preceding two paragraphs
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3.1 Organization and Qualification. The Borrower is duly organized, validly existing and in good standing under the laws of the State of Ohio, has the power and authority to carry on its business and to enter into and perform its obligations under this Agreement, the Note, the Pledge Agreements and the Authorization Letter and is duly qualified and authorized to do business in each jurisdiction in which such qualification is required. All information set forth in Exhibit 3.1 hereto, the Certificate of the Borrower, and in all attachments thereto, is true and correct.
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Section 4 Financial Statements and Information.
(a) within ten (10) Business Days after they are filed by the Borrower with the Securities and Exchange Commission, copies of all prospectuses, Statements of Additional Information, supplements, annual reports, financial information, proxy materials and other Securities and Exchange Commission filings;
(b) copies of all financial information and other reports and documents distributed by the Borrower to the holders of the Borrower’s securities;
(c) a report each Business Day detailing the market value of the assets held by the Fund and a calculation of the Maximum Amount as of that Business Day; and
(d) notwithstanding Section 4.1(a), a Fund’s annual report within 120 days of the end of the Fund’s fiscal year and a Fund’s semi-annual report within 90 days of the end of the Fund’s semi-annual period.
Section 5 Covenants. The Borrower hereby covenants to Bank as follows:
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Section 6 Conditions Precedent.
(a) the Pledge Agreement for each Fund requesting a Loan;
(b) all appropriate financing statements (Form UCC-1) and control agreements (substantially in the form of Annex I to the Pledge Agreement);
(c) a Certificate of the Borrower in the form of Exhibit 3.1, and all attachments thereto;
(d) as the Bank may require, UCC searches, tax lien and litigation searches, insurance certificates, notices, filings, acknowledgments or other documents or control agreements to reflect, perfect, or protect the priority of the Bank’s priority Lien in the Collateral pledged to the Bank pursuant to the Pledge Agreements and to fully consummate this transaction;
(e) payment by the Borrower of all fees and expenses of the Bank, including without limitation, counsel fees incurred by the Bank in connection with the preparation and negotiation of this Agreement and the other Loan Documents, and all recording fees and taxes, if any;
(f) as the Bank may require, all documentation needed to establish a demand deposit account with the Bank for each Fund if necessary for administrative and operational purposes, which account shall be used to receive proceeds of Loans made hereunder to each Fund;
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(g) the Authorization Letter;
(h) the prospectus, Statement of Additional Information and Custody Agreement for each Fund; and
(i) such additional information and materials as the Bank may reasonably request.
6.2 | Conditions to Each Loan. The Bank shall not make any Loan: |
(a) if there has occurred, and has not been waived, any Default or Event of Default; or
(b) if the Borrower, its Investment Adviser or other authorized agent has not delivered to the Bank a Pledge Agreement on behalf of each Fund as to which the Borrower has requested a Loan, executed by an authorized representative of the Borrower as listed in Exhibit 2.1;
(c) if all of the representations and warranties contained in this Agreement or any other Loan Document are not true and correct in all material respects with the same force and effect as if made on and as of the date of the requested Loan, except to the extent that any thereof expressly relate to an earlier date; or
(d) if the Borrower, its Investment Adviser or other authorized agent has not delivered to the Bank the daily report required by Section 4(c).
Section 7 Events of Default and Remedies.
7.1 Events of Default. Any of the following events shall be an Event of Default hereunder:
(a) any representation or warranty made by the Borrower herein, or in any other Loan Document or any document furnished to the Bank by the Borrower under this Agreement, is in any material respects, incorrect when made, deemed made or when reaffirmed; or
(b) The Borrower defaults in the payment of any principal or interest on any Obligation when due and payable, at maturity, by acceleration or otherwise; or
(c) The Borrower fails to observe or perform any covenant, condition or agreement to be observed or performed by the Borrower pursuant to the terms hereof or under any other Loan Document; or
(d) an Insolvency Event occurs with respect to the Borrower; or
(e) any of the following occurs: there is a material impairment of the value or priority of the Bank’s Lien in Collateral pledged to the Bank under the Pledge Agreement; a notice of lien, levy or assessment is filed against the Borrower or an asset of the Borrower by any government authority; or a judgment or other claim becomes a Lien on any Collateral; or any asset of the Borrower is seized, attached, or otherwise levied upon by a judicial officer; or
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(f) any event occurs which might, in the Bank’s reasonable opinion, have a material adverse effect on the Collateral pledged to the Bank under the Pledge Agreement and as identified in the Reports of Pledged Securities or on the Borrower’s financial condition, operations or prospects or the ability of the Borrower to perform its obligations under this Agreement or any other Loan Document; or
(g) the Custody Agreement is terminated except upon the simultaneous execution by the Bank and the Borrower of a substantially identical custody agreement in replacement thereof, in form and substance satisfactory to the Bank;
(h) the Bank reasonably determines that a material adverse change has occurred with respect to (i) the Borrower’s financial condition, results of operations, business or prospects, (ii) the Borrower’s ability to pay a Loan in accordance with the terms thereof, or (iii) the value or priority of the Bank’s Lien in Collateral pledged to the Bank under the Pledge Agreement of the Collateral; or
(i) an Event of Default occurs under any other Loan Document.
7.2 | Remedies. If any Event of Default shall occur and be continuing: |
(a) The Bank may cease making Loans hereunder, and/or declare all Obligations to be due and payable immediately (and, upon the occurrence of an Event of Default based on an Insolvency Event, all Obligations shall become automatically due and payable without any declaration or other notice, demand, or presentment by the Bank), whereupon they shall immediately become due and payable without further presentment, demand, protest, or notice of any kind, all of which are hereby expressly waived by the Borrower.
(b) The Bank may set off against the Obligations with respect to the Loans made to the Borrower for the benefit of each Fund (i) all Collateral pledged to the Bank by such Fund under the Pledge Agreement and as identified in the relevant Reports of Pledged Securities and (ii) all cash in such Fund’s Trust Custody Account from time to time.
(c) The Bank shall have all of the rights and remedies of a secured party under the Uniform Commercial Code.
(d) The Bank may in its sole discretion pay, purchase, contest or compromise any encumbrance, charge or lien which in the opinion of the Bank appears to be prior or superior to its Lien, and pay all expenses incurred in connection therewith, and all such payments, purchases and other expenses so paid or incurred by the Bank shall constitute Obligations hereunder.
18
19
Section 8 Miscellaneous Provisions.
20
To the Borrower: | Capitol Series Trust | |
c/o Ultimus Fund Solutions, LLC 000 Xxxxxxxx Xxxxx, Xxxxx 000 Xxxxxxxxxx, Xxxx 00000 | ||
Attention: Xxxxxxx X. Xxxxxx, President Tel: 000-000-0000 | ||
Email: XXxxxxx@xxxxxxxxxxxxxxxxxxxx.xxx | ||
with a copy to: | Caleb X.X. XxXxxx | |
Bernstein, Shur, Xxxxxx & Xxxxxx, P.A. 000 Xxxxxx Xxxxxx | ||
X.X. Xxx 0000 | ||
Xxxxxxxx, Xxxxx 00000-0000 Tel: 000 000-0000 | ||
Email: xxxxxxx@xxxxxxxxxxxxx.xxx | ||
To the Bank: | The Huntington National Bank | |
00 Xxxxx Xxxxxxxxxxxx Xxxxxx | ||
XXXX00 | ||
Xxxxxxxxxxxx, XX 00000 | ||
Attention: Xxxxxx Xxxxxxxx Tel: 000-000-0000 | ||
Email: Xxxxxx.Xxxxxxxx@Xxxxxxxxxx.xxx | ||
with a copy to: | The Huntington National Bank | |
00 Xxxxx Xxxxxxxxxxxx Xxxxxx | ||
XXXX00 | ||
Xxxxxxxxxxxx, XX 00000 | ||
Attention: Xxxxx Xxxxxxxx Tel: 000-000-0000 | ||
Email: Xxxxx.Xxxxxxxx@Xxxxxxxxxx.xxx |
Either party may change such address by sending notice of the change to the other party in accordance with this Section 8.6.
21
8.8 Governing Law; Submission to Jurisdiction; Venue; Waiver of Jury Trial.
(a) THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE LAW OF THE STATE OF OHIO WITHOUT GIVING EFFECT TO CONFLICTS OF LAWS PRINCIPLES. TO THE FULLEST EXTENT PERMITTED BY LAW, THE BORROWER HEREBY UNCONDITIONALLY AND IRREVOCABLY WAIVES ANY CLAIM TO ASSERT THAT THE LAW OF ANY JURISDICTION OTHER THAN THE STATE OF OHIO GOVERNS THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS. Any legal action or proceeding with respect to this Agreement or any other Loan Document may be brought in the courts of the State of Ohio sitting in Franklin County and of the United States District Court for the Southern District of Ohio, and any appellate court to which an appeal may be taken from any such courts, and, by execution and delivery of this Agreement, the Borrower hereby irrevocably accepts for itself and in respect of its property, generally and unconditionally, the jurisdiction of the aforesaid courts. The Borrower hereby further irrevocably consents to the service of process out of any of the aforementioned courts in any such action or proceeding by the mailing of copies thereof by registered or certified mail, postage prepaid, to the Borrower at its address for notices pursuant to Section 8.6, such service to become effective 30 days after such mailing or at such earlier time as may be provided under applicable law. Nothing herein shall affect the right of the Bank to serve process in any other manner permitted by law or to commence legal proceedings or otherwise proceed against the Borrower in any other jurisdiction.
(b) The Borrower hereby irrevocably waives any objection that it may now or hereafter have to the laying of venue of any of the aforesaid actions or proceedings arising out of or in connection with this Agreement or any other Loan Document brought in the courts referred to in Section 8.8(a) above and hereby further irrevocably waives and agrees not to plead or claim in any such court that any such action or proceeding brought in any such court has been brought in an inconvenient forum.
(c) The parties hereto acknowledge and agree that there may be a constitutional right to a jury trial in connection with any claim, dispute or lawsuit arising between or among them, but that such right may be waived. Accordingly, the parties agree that, notwithstanding such constitutional right, in this commercial matter the parties believe and agree that it shall be in their best interests to waive such right, and, accordingly, hereby waive such right to a jury trial, and further agree that the best forum for hearing any claim, dispute, or lawsuit, if any, arising in connection with this Agreement, the Loan Documents, or the relationship among the parties hereto, in each case whether now existing or hereafter arising, or whether sounding in contract or tort or otherwise, shall be a court of competent jurisdiction sitting without a jury. Each party hereto hereby (a) certifies that no representative, agent or attorney of any other party has represented, expressly or otherwise, that such other party would not, in the event of litigation, seek to enforce the foregoing waiver, and (b) acknowledges that it and the other parties hereto have been induced to enter into this agreement by, among other things, the mutual waivers and certifications in this paragraph.
22
What this means: When an entity or Person opens an account or establishes a relationship with the Bank, the Bank may ask for the name, address, date of birth, and other information that will allow the Bank to identify the entity or Person who opens an account or establishes a relationship with the Bank. The Bank may also ask to see identifying documents for the entity or Person.
IN WITNESS WHEREOF, the Borrower and the Bank have executed this Agreement by their duly authorized officers as of the date first above written.
SIGNATURES ON FOLLOWING PAGE
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CAPITOL SERIES TRUST on behalf and for the benefit of those Funds listed on Exhibit 1.1 | ||
By: | /s/ Xxxxxxx X. Xxxxxx | |
Name: | Xxxxxxx X. Xxxxxx | |
Title: | President | |
THE HUNTINGTON NATIONAL BANK | ||
By: | /s/ Xxxxxx X. Xxxxxxxx | |
Name: | Xxxxxx X. Xxxxxxxx | |
Title: | Senior Vice President |
24
EXHIBIT 1.1
TO REVOLVING CREDIT AGREEMENT
BETWEEN
THE HUNTINGTON NATIONAL BANK
Date: March 15, 2019
PARTICIPATING FUNDS
Fund | Date Added |
Hedeker Strategic Appreciation Fund | March 15, 2019 |
EXHIBIT 1.2
TO REVOLVING CREDIT AGREEMENT
BETWEEN
THE HUNTINGTON NATIONAL BANK
Fund: Hedeker Strategic Appreciation Fund
Date: March 15, 2019
FUND BORROWING LIMITS
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.
EXHIBIT 1.3
TO REVOLVING CREDIT AGREEMENT
BETWEEN
THE HUNTINGTON NATIONAL BANK
Fund: Hedeker Strategic Appreciation
Fund
Date: March 15, 2019
SPECIFIC TERMS
Capitalized terms not otherwise defined in this Exhibit have the meanings specified in the Revolving Credit Agreement. In the event of any inconsistency between this Exhibit and the Revolving Credit Agreement, this Exhibit will control.
Section 1 | Definitions |
Annual Fee means a per annum fee, assessed each Fund on whose behalf a Loan is made, equal to ⅛ of one percent (1.00%) of $10,000,000],or such pro-rated fee as appropriate if the Loan matures in less than 364 days following the date of the execution of a Note, subject to a fee of $12,500.
Interest Rate means the interest rate per annum to be applied to the principal balance outstanding, from time to time, equal to the London Interbank Offered Rate (LIBO Rate) plus one hundred and thirty-seven and one-half (137.5) basis points (one hundred (100) and thirty-seven (37) and one-half (0.50) basis points being equal to 1.375% per annum).
Investment Adviser means Hedeker Wealth LLC.
Loan Amount means $10,000,000.
Maturity Date means March 14, 2020.
Maximum Amount means, on a per Fund basis, the lesser of: (i) $10,000,000 or (ii) 30% of a Fund’s daily market value.
Section 2.4 | Payment of Interest |
First Payment Date means the fifth day of the first month immediately following the date of the execution of a Note.
Section 2.6 | Unused Fee |
Unused Fee. From the date of this Agreement to the payment in full in cash of all Obligations under this Agreement, Borrower shall pay to Bank an Unused Fee quarterly commencing on July 5, 2019, and on the fifth day of each quarter thereafter. The Unused Fee payable to Bank shall be determined by multiplying the basis points per annum set forth in the Grid below times the unused amount of the Loan Amount each day during the relevant quarter or portion thereof. The Unused Fee shall be computed in the same manner as in Section 2.4 (Payment of Interest). Whenever any payment of the Unused Fee shall be due on a day which is not a Business Day, the date for payment thereof shall be extended to the next Business Day. It is expressly understood that the Unused Fee herein described shall not be refundable under any circumstances.
Tiered Utilization | Fee Rate |
>75% | 0 bps |
51 – 75% | 7.5 bps |
0 – 50% | 12.5 bps |
EXHIBIT 2.1
TO REVOLVING CREDIT AGREEMENT
BETWEEN
THE HUNTINGTON NATIONAL BANK
Fund: Hedeker Strategic Appreciation Fund
Date: March 15, 2019
LIST OF AUTHORIZED REPRESENTATIVES
In accordance with Section 2.1(b) of that certain Revolving Credit Agreement dated March 15, 2019 between Capitol Series Trust (the “Borrower”) and The Huntington National Bank (the “Bank”), the Borrower hereby authorizes the Bank to act upon the telephonic and/or written instructions of the following authorized representatives of the Borrower:
Borrower: | Xxxxxxx X. Xxxxxx | |
Investment Adviser: | Xxxxxxx XxXxxxx, Portfolio Manager | |
Xxxxxxxx Xxxx, Director of Operations | ||
Xxxx Xxxxxxx, Principal | ||
Custodian: | Any and all officers and employees of Huntington National Bank. |
CAPITOL SERIES TRUST | ||
on behalf and for the benefit of those Funds listed on Exhibit 1.1 | ||
By: | ||
Name: | ||
Title: |
EXHIBIT 2.2
TO REVOLVING CREDIT AGREEMENT
BETWEEN
CAPITOL SERIES TRUST
AND
THE HUNTINGTON NATIONAL BANK
PROMISSORY NOTE
Capitol Series Trust, on behalf and for
the benefit of
Hedeker Strategic Appreciation Fund
Indianapolis, IN | |
$10,000,000 | March 15, 2019 |
Capitol Series Trust, an Ohio business trust (the “Borrower”), on behalf and for the benefit of the Hedeker Strategic Appreciation Fund (the “Fund”), for value received, hereby promises to pay to the order of THE HUNTINGTON NATIONAL BANK (the “Bank”) at its offices, 00 Xxxxx Xxxxxxxxxxxx Xxxxxx, XXXX00, Xxxxxxxxxxxx, Xxxxxxx 00000, in lawful money of the United States of America and in immediately available funds, the principal sum of TEN MILLION AND NO/100 DOLLARS ($10,000,000) or the aggregate unpaid principal amount of all Loans made by the Bank to the Borrower, whichever is less, pursuant to the terms of the Revolving Credit Agreement of even date herewith by and between the Borrower and the Bank (as the same may be amended, restated or otherwise modified from time to time the “Agreement”). Capitalized terms used herein without definition shall have the meanings given to them in the Agreement.
The Borrower covenants that the funds borrowed by it from the Bank as evidenced by this Note shall be used solely for the benefit of the Fund.
The principal balance hereof outstanding from time to time shall bear interest at the Interest Rate in effect from time to time. Interest on each Loan will accrue daily, will be calculated based on a 360-day year and charged for the actual number of days the principal balance is outstanding. All outstanding principal and interest shall be payable in accordance with the terms of the Agreement. Upon and during the continuance of an Event of Default, this Note shall bear interest (computed and adjusted in the same manner, and with the same effect, as interest hereon prior to maturity), at a rate per annum equal to three percent (3%) above the Interest Rate, until paid, and whether before or after the entry of judgment hereon.
The principal amount of each Loan made by the Bank and the amount of each payment or prepayment made by the Borrower shall be recorded by the Bank on the schedules attached hereto or in the regularly maintained data processing records of the Bank. The aggregate unpaid principal amount of all Loans set forth in such schedules or in such records shall be presumptive evidence of the principal amount owing and unpaid on this Note. However, failure by the Bank to make any such entry shall not limit or otherwise affect the Borrower’s obligations under this Note or the Agreement.
1
This Note is the Note referred to in the Agreement, and is entitled to the benefits, and is subject to the terms of the Agreement. This Note and the obligations evidenced hereby are secured by the Collateral described in the Pledge Agreement and are entitled to the benefits of the Pledge Agreement. The principal of this Note is payable and/or prepayable in the amounts and under the circumstances, and its maturity is subject to acceleration upon the terms, set forth in the Agreement. Except as otherwise expressly provided in the Agreement, if any payment on this Note becomes due and payable on a day other than a Business Day, the maturity thereof shall be extended to the next Business Day, and interest shall be payable at the rate specified herein during such extension period.
In no event shall the interest rate on this Note exceed the highest rate permissible under any law which a court of competent jurisdiction shall, in a final determination, deem applicable hereto. In the event that a court determines that the Bank has received interest and other charges under this Note in excess of the highest permissible rate applicable hereto, such excess shall be deemed received on account of the Borrower, and shall automatically be applied to reduce the amounts due to the Bank from the Borrower under this Note, other than interest, and the provisions hereof shall be deemed amended to provide for the highest permissible rate. If there are no such amounts outstanding, the Bank shall refund to the Borrower such excess.
The Borrower and all endorsers, sureties, guarantors and other Persons liable on this Note, if any, hereby waive notice of non-payment, demand, presentment or protest in connection with the delivery, performance and enforcement of this Note; consent to one or more renewals or extensions of this Note; and generally waive any and all suretyship defenses and defenses in the nature thereof.
This Note may not be changed orally, but only by an instrument in writing.
This Note is being delivered in, is intended to be performed in, shall be construed and enforced in accordance with, and be governed by the laws of, the State of Ohio without regard to principles of conflict of laws. The Borrower agrees that the State and federal courts in Franklin County, Ohio or any other court in which the Bank initiates proceedings have exclusive jurisdiction over all matters arising out of this Note, and that service of process in any such proceeding shall be effective if mailed to the Borrower at its address described in the Notices section of the Agreement.
BANK AND BORROWER HEREBY WAIVE THE RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT BY EITHER BANK OR BORROWER AGAINST THE OTHER ARISING OUT OF THIS NOTE.
Borrower authorizes any attorney at law to appear in any court of record in the State of Ohio or in any other state or territory of the United States of America after the loan evidenced by this Note becomes due, whether by acceleration or otherwise, to waive the issuing and service of process, and to confess judgment against the Borrower in favor of the Bank for the amount then appearing due on this Note, together with costs of suit, and thereupon to waive all errors and all rights of appeal and stays of execution. The Borrower waives any conflict of interest that an attorney hired by the Bank may have in acting on the Borrower’s behalf in confessing judgment against the Borrower while such attorney is retained by the Bank. The Borrower expressly consents to such attorney acting for Borrower in confessing judgment and to such attorney’s fee being paid by the Bank or deducted from the proceeds of collection of this Note or Collateral security therefor.
2
WARNING - BY SIGNING THIS PAPER YOU GIVE UP YOUR RIGHT TO NOTICE AND COURT TRIAL. IF YOU DO NOT PAY ON TIME A COURT JUDGMENT MAY BE TAKEN AGAINST YOU WITHOUT YOUR PRIOR KNOWLEDGE AND THE POWERS OF A COURT CAN BE USED TO COLLECT FROM YOU REGARDLESS OF ANY CLAIMS YOU MAY HAVE AGAINST THE CREDITOR WHETHER FOR RETURNED GOODS, FAULTY GOODS, FAILURE ON HIS PART TO COMPLY WITH THE AGREEMENT, OR ANY OTHER CAUSE. |
CAPITOL SERIES TRUST on behalf of Hedeker Strategic Appreciation Fund | ||
By: | ||
Name: | ||
Title: |
3
EXHIBIT 3.1
TO REVOLVING CREDIT AGREEMENT
BETWEEN
CAPITOL SERIES TRUST
AND
THE HUNTINGTON NATIONAL BANK
FORM OF CERTIFICATE OF BORROWER
Date: March 15, 2019
CAPITOL SERIES TRUST
CERTIFICATE OF BORROWER
Re: Hedeker Strategic Appreciation Fund
$10,000,000 Financing
From The Huntington National Bank
The undersigned does hereby certify that he is the duly elected, qualified and acting President of Capitol Series Trust, an Ohio business trust (the “Borrower”), and the undersigned does hereby further certify as follows:
1. | Attached hereto, marked Attachment A, is a true and correct copy of the current Declaration of Trust, as in effect on the date hereof certified by the Secretary of the State of Ohio. |
2. | Attached hereto, marked Attachment B, is a true and correct copy of the Bylaws of the Borrower, as in effect on the date hereof. |
3. | The following Persons are the duly elected officers of the Borrower, holding the office set forth opposite their respective names. Each officer who has executed or will execute any documents in connection with this loan transaction has set forth his or her true and customary signature opposite his name: |
Name | Title | Signature |
Xxxxxxx X. Xxxxxx | President | |
Xxxxxxx Xxxx | Secretary |
1
4. | Each officer whose personal signature appears above has been duly authorized by resolution of the board of trustees of the Borrower to execute any and all instruments or documents which he may deem necessary or appropriate in connection with this loan transaction. |
5. | Attached hereto, marked Attachment C, is a copy of the resolution authorizing the execution and delivery of any documents in connection with this loan transaction. |
6. | The Borrower is in good standing in the state of its formation. Attached hereto, marked Attachment D, is a certificate of good standing issued within the past thirty (30) days by the Secretary of State of Ohio. |
7. | Attached hereto, marked Attachment E, is a certificate executed in the name of the Borrower by an officer of the Borrower certifying that the representations and warranties contained in Section 3 of the Revolving Credit Agreement are true and correct in all material respects as of the date hereof and shall remain true and correct for as long as the Revolving Credit Agreement remains in effect. |
Xxxxxxx Xxxx, Secretary |
The undersigned does hereby certify that he is the President of the Borrower, and does further certify that the signatory above is the Secretary of the Borrower, and that his signature set forth above is his true and customary signature.
Xxxxxxx X. Xxxxxx, President |
2
EXHIBIT 3.7
TO REVOLVING CREDIT AGREEMENT
BETWEEN
Capitol Series Trust
AND
THE HUNTINGTON NATIONAL BANK
Date: March 15, 2019
SPECIFIC REPRESENTATIONS OF BORROWER
1. | The exact legal name of the Borrower is: Capitol Series Trust |
2. | If the Borrower has changed its name since it was established, its past legal names were: __________________________ |
3. | The Borrower uses in its business and owns the following trade names: |
Capitol Series Trust and Hedeker Strategic Appreciation Fund |
4. | The Borrower was organized on September 27, 2013 under the laws of the State of Ohio and is in good standing under those laws. |
5. | The Borrower has its chief executive office and principal place of business at: |
000 Xxxxxxxx Xxxxx, Xxxxx 000, Xxxxxxxxxx, Xxxx 00000 |
6. | The Borrower maintains all of its records with respect to its Accounts at that address. |
7. | The Borrower also has places of business at: The Cincinnati address is the principal business address of the Trust, but the Trust will also conduct certain business out of Ultimus’ Columbus address at 0 Xxxxxx Xxxx, Xxx 000, Xxxxxxxx, XX 00000 |
8. | No securities owned by the Participating Funds are located at any other place, nor were they located at any other place within the past four (4) months, except as held by The Huntington National Bank, as custodian, and by the agents and sub-custodians of The Huntington National Bank. |
9. | In the past five (5) years the Borrower has never maintained its chief executive office or principal place of business or records with respect to accounts, nor owned personal property, at any locations except those set forth above and except: |
0000 X. Xxxxxxxx Xxxxxx, Xxxxxxxxxxxx, Xxxxxxx |
1
10. | The applicable Fund(s) operated by the Borrower are: |
Hedeker Strategic Appreciation Fund |
11. | If the name of any Fund has been changed since it was formed, its past names are: |
NA |
2
APPENDIX A
TO REVOLVING CREDIT AGREEMENT
BETWEEN
CAPITOL SERIES TRUST AND
THE HUNTINGTON NATIONAL BANK
PLEDGE AND SECURITY AGREEMENT
THIS PLEDGE AND SECURITY AGREEMENT (“Agreement”), dated as of March 15, 2019 between CAPITOL SERIES TRUST, an Ohio business trust (the “Borrower”), executing this Agreement on behalf of itself and on behalf and for the benefit of those investment series set forth on Exhibit 1.1 (the “Fund(s)” and each, a “Fund”), and THE HUNTINGTON NATIONAL BANK, a national banking association (“Bank”).
WHEREAS, the Borrower and Bank have previously entered into a Custody Agreement dated December 15, 2016 (as said Custody Agreement may be amended, restated or otherwise modified from time to time, “the Custody Agreement”) pursuant to which Bank holds securities as custodian for the Borrower on behalf of the Funds, all as more fully set forth in the Custody Agreement; and
WHEREAS, the Borrower, on behalf and for the benefit of the Funds, is issuing to Bank a promissory (as said Note may be amended, restated or otherwise modified from time to time, the “Note”) in connection with the execution on the date hereof by the Borrower on behalf and for the benefit of the Funds and Bank of that certain Revolving Credit Agreement (as said Loan Agreement may be amended, restated or otherwise modified from time to time, the “Loan Agreement”); and
WHEREAS, the Borrower, on behalf of the Funds, the Investment Adviser and the Bank may execute a Foreign Exchange Agreement(s) (“FX Agreement”) pursuant to which the Investment Adviser enters into foreign exchange transactions on behalf of a Fund for hedging and investment purposes and the Borrower, on behalf of the Funds, the Investment Adviser and the Bank may execute an ISDA Master Agreement (Multicurrency - Cross Border), as well as any related annexes, confirmations and other documentation (an “FX Options Agreement”, and together with the FX Agreement, the “FX Documentation”), pursuant to which the Investment Adviser may enter into foreign currency options transactions on behalf of a Fund; and;
WHEREAS, it is a condition to Bank executing the Loan Agreement, an FX Agreement and, if applicable, an FX Options Agreement that this Agreement be executed and delivered by the Borrower, pursuant to which the Borrower is, among other things, agreeing to pledge securities owned by the Borrower but held by a Fund to (i) secure borrowings incurred by the Borrower on behalf of the Fund under the Loan Agreement and as reflected on the Note and (ii) secure the settlement of foreign exchange transactions under the FX Documentation.
1
NOW, THEREFORE, in consideration of the premises and to induce Bank to agree to execute the Loan Agreement and the FX Documentation, it is agreed as follows:
1. | Definitions. |
Specific Definitions. The following definitions shall apply:
“Alternative Funding Date” shall have the meaning given it in the FX Agreement.
“Business Day” shall mean any day on which the Bank shall be open to the public in Indianapolis, Indiana for the transaction of its normal banking business.
“Collateral” shall have the meaning set forth that term in Section 2.
“Costs” shall have the meaning set forth that term in Section 10.
“Default” means any event that, with the giving of notice or the passage of time, or both, would be an Event of Default.
“Event of Default” has the meaning set forth in Section 17.
“Governmental Authority” shall mean any foreign, federal, state, regional, local, municipal or other government, or any department, commission, board, bureau, agency, public authority or instrumentality thereof, or any court.
“Insolvency Event” means, with respect to a Person, any of the following: a court enters a decree or order for relief in respect to such Person in an involuntary case under any applicable bankruptcy, insolvency or other similar law then in effect, or appoints a receiver, liquidator, assignee, custodian, trustee, sequestrator (or other similar official) of such Person or for any substantial part of its property, or orders the wind-up or liquidation of its affairs; or a petition initiating an involuntary case under any such bankruptcy, insolvency or similar law is filed against such Person; or such Person commences a voluntary case under any applicable bankruptcy, insolvency or other similar law in effect, or makes any general assignment for the benefit of creditors, or fails generally to pay its debts as such debts become due, or takes corporate action in furtherance of any of the foregoing.
“Investment Adviser”, has the meaning set forth in Exhibit 1.1
“Lien” means any security interest, mortgage, pledge, assignment, or voluntary or involuntary lien, charge or other encumbrance of any kind, including interests of vendors or lessors under conditional sale contracts or capital leases.
“Obligation(s)” (i) means all loans, advances, indebtedness and other obligations of the Borrower owed to Bank under the Loan Agreement, as the same may be amended from time to time hereafter, of every description whether now existing or hereafter arising and whether direct or indirect, primary or as guarantor or surety, absolute or contingent, liquidated or unliquidated, matured or unmatured, secured or unsecured, and all expenses and attorney’s fees incurred by Bank under this Agreement or any other document or instrument related thereto, and (ii) any amounts owed to the Bank in connection with any foreign exchange transaction or foreign currency options transaction entered into on behalf of a Fund and to pay any and all applicable fees under the FX Agreement, the FX Options Agreement or any Pledge Documents, and all Costs incurred by the Bank.
2
“OFAC” means The Office of Foreign Assets Control of the U.S. Department of the Treasury.
“Person” shall mean and include an individual, business trust, statutory trust, corporation, partnership, corporation, joint stock company, trust, unincorporated association, joint venture or other entity.
“Pledge Documents,” means this Agreement and the Control Agreement dated March 15, 2019 by and among the Borrower, on behalf of the Funds; the Custodian and the Bank, including any and all such documents as they may be amended, restated or otherwise modified from time to time.
“Prime Rate” means the rate of interest announced by the Bank from time to time to be its prime lending rate, which rate shall be determined solely by the Bank and does not necessarily represent the lowest rate charged to any customer.
“Requirements of Law” as to any Person shall mean the articles or certificate of incorporation and bylaws or other organizational or governing documents of such Person and any determination of an arbitrator or a court or other Governmental Authority, or law, treaty, rule or regulation or, in each case applicable to or binding upon such Person or any of its property or to which such Person or any of its property is subject.
“Sanctioned Entity” means (i) a country or a government of a country, (ii) an agency of the government of a country, (iii) an organization directly or indirectly controlled by a country or its government, (iv) a Person resident in or determined to be resident in a country, in each case, that is subject to a country sanctions program administered and enforced by OFAC.
“Sanctioned Person” means a Person named on the list of Specially Designated Nationals maintained by OFAC.
“Securities” shall have the meaning set forth that term in Section 2.
“Settlement Date” has the meaning given it in the FX Documentation.
“Trade Date” has the meaning given it in the FX Documentation.
“Trust Custody Account,” means each account of the Borrower established with the Custodian on behalf of a Fund pursuant to the Custody Agreement.
2. Pledge. To secure the payment and performance by the Borrower, on behalf of a Fund, of the Obligations under the Loan Agreement and the FX Documentation, the Borrower grants to the Bank and its successors and assigns, with full power and discretion as hereinafter provided, a continuing first priority lien and security interest in and right of setoff against all of the Borrower’s rights, title and interest, including without limitations the Borrower’s securities entitlement (as such term is defined in Article 8 of the Uniform Commercial Code as adopted by the State of Indiana (the “UCC”)), in and to the Securities (as defined below) now or at any time held or controlled by Bank pursuant to the Custody Agreement or by any third party, whether or not acting on behalf of the Bank, together with all the Borrower’s rights, title and interest in and to all Securities and financial assets (as such term is defined in Article 8 of the UCC) therein and all principal, interest, distributions, dividends (whether cash or stock), income, earnings, cash and other rights at any time received or receivable or otherwise distributed in respect of or in exchange therefor, and all additions to, all replacements of, all substitutions for, and all proceeds of any or all of the foregoing (the “Collateral”).
3
The Borrower acknowledges and agrees that so long as this Agreement is in effect, the Bank is holding physical possession and/or control of the Securities for the purpose of perfecting its security interest in the Securities, as well as for the purposes set forth in the Custody Agreement.
“Securities” shall include, without limitation, whether certificated or uncertificated, those common and preferred stocks, bonds, investment company securities, call options, put options, debentures, notes, bank certificates of deposit, banker’s acceptances, mortgage backed securities, U.S. Treasury Securities, money market instruments or other obligations, repurchase agreements and the underlying collateral, certificates, receipts, warrants, securities entitlements, securities accounts or other investment property, instruments or documents, and all additions, all as owned by the Borrower on behalf of a Fund. Securities shall also include any rights or other interests therein to receive, purchase or subscribe for any of the foregoing and all investments and rights therein. The collateral value of the Securities shall be calculated in accordance with the procedures set forth in the Borrower’s current prospectus and Statement of Additional Information (“Securities Valuation”).
3. Authorization to File Financing Statements; Ratification. The Borrower hereby authorizes the Bank to file all financing statements. The Borrower will deliver to the Bank control agreements (substantially in the form attached here to as Annex 1, a “Control Agreement) and other documents and take such other actions as may from time to time be requested by the Bank in order to maintain a first perfected security interest in and, if applicable, Control (as defined in the UCC) of the Collateral owned by the Borrower on behalf of a Fund. Any financing statement filed by the Bank may be filed in any filing office in any UCC jurisdiction and may indicate the Borrower’s Collateral (i) as all assets of the Borrower or words of similar effect, regardless of whether any particular asset comprised in the Collateral falls within the scope of Article 9 of the UCC or such jurisdiction, or (ii) by any other description which reasonably approximates the description contained in this Agreement.
4. Fees and Costs. The Borrower shall reimburse the Bank for all fees, costs and expenses including, without limitation, reasonable attorney’s fees, other professional fees, appraisal fee, court costs, litigation and other expenses (collectively, “Costs”) incurred in connection with the enforcement of the Pledge Documents without any limitation. Costs shall be due and payable within thirty (30) days of demand by the Bank. If the Borrower fails to pay Costs within thirty (30) days, the Bank is entitled to disburse such Costs as Obligations. Thereafter, the Costs shall bear interest from the date incurred or disbursed at the highest rate set forth in the Loan Agreement. This provision shall survive the termination of this Agreement.
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5. Representations and Warranties. The Borrower represents and warrants to the Bank that:
(a) As of the date of each Loan (as defined in the Loan Agreement) and each transaction under the FX Documentation, the Borrower will be the sole beneficial owner of the Securities free and clear of any security interest, pledge, or other lien or encumbrance (collectively, “Lien”) thereon or affecting the title thereto, except for Liens to Bank and Liens of governmental entities which secure amounts not at the time due and payable and which are imposed by law without the consent of the Borrower;
(b) The Borrower has the right and requisite authority to pledge, mortgage, assign, transfer, deliver, deposit, set over, grant a security interest in and confirm the Securities to the Bank as provided herein;
(c) The Borrower has obtained all permits, consents, approvals, authorizations or other orders of any Person, corporation, partnership, trust, governmental entity, or other entity required for the execution and delivery of this Agreement or the delivery of the Securities to the Bank as provided herein; and
(d) The Borrower has good and marketable title to the Securities, and the Liens granted to the Bank pursuant to this Agreement are fully perfected first priority Liens in and to the Securities assuming that the Bank has physical possession and/or control of the Securities as set forth in Section 2 and that Bank makes and continues such UCC-1 financing statement filings as are necessary to perfect Bank’s security interest in the Securities.
The representations and warranties set forth in this Section 5 shall survive the execution and delivery of this Agreement and shall be deemed to have been made anew upon the making of each Loan pursuant to the Loan Agreement.
6. Covenants. The Borrower covenants and agrees that until payment in full of all the Obligations:
(a) Without the prior written consent of the Bank, it will not mortgage, pledge or otherwise encumber any of the Borrower’s rights in or to the Securities or any unpaid dividends or other distributions or payments with respect thereto, or xxxxx x Xxxx in any of the above; and
(b) The Borrower, at the Borrower’s expense, will obtain, execute, acknowledge and deliver all such instruments and take all such action necessary (or as the Bank from time to time may request) in order to ensure the Bank shall have and retain the benefits of the first priority Lien in the Securities intended to be created by this Agreement, including without limitation the delivery of all notices and the procurement of all acknowledgments and Control Agreements as may be required by Article 8 and/or Article 9 of the Uniform Commercial Code, as adopted by the applicable jurisdiction and as amended from time to time.
(c) The Borrower will not cause or permit any Fund to create, incur, assume or permit to continue in existence any Lien on Collateral now owned or hereafter acquired by the Borrower, except for Liens to the Bank under this Agreement.
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7. Rights with Respect to Securities.
(a) Except as provided in this Agreement, the Borrower shall have the rights provided to it in the Custody Agreement or any Control Agreement. The Borrower shall have the right, from time to time, to vote and give consents with respect to the Securities for all purposes not inconsistent with the provisions of this Agreement, the Custody Agreement or any Control Agreement. Notwithstanding anything else set forth in this Agreement, in the event of a conflict between this Agreement, the Custody Agreement and the Control Agreement, the provisions of this Agreement and the Control Agreement shall control and in the event of a conflict between this Agreement and the Control Agreement, the Control Agreement shall control.
(b) The Bank (itself or through an agent) is hereby authorized and empowered at its election, to transfer and register in its name or in the name of its nominee the whole or any part of the Securities to collect and receive all cash dividends and other distributions made thereon, to sell in one or more sales, but without any previous notice or advertisement, the whole or any part of the Securities and to otherwise act with respect to the Securities as though the Bank was the outright owner thereof. Except as provided in the Authorization Letter (as defined in the Loan Agreement), the Bank hereby agrees that it shall not exercise any of the powers granted in this Section 7(b) unless an Event of Default (as defined in Section 8) has occurred.
(c) All dividends and other distributions in respect of any of the Securities, whenever paid or made, shall be delivered to the Bank as contemplated by the Custody Agreement and held by the Bank subject to the Lien created by this Agreement.
8. Events of Default. The following shall each constitute an “Event of Default” under this Agreement:
(a) The occurrence of an Event of Default under the terms of the Loan Agreement, the Note or the FX Documentation;
(b) Failure by the Borrower to observe and perform any covenant, condition, or agreement on the Borrower’s part to be observed or performed under this Agreement;
(c) Failure of any representation or warranty of the Borrower contained in this Agreement to be true when given;
(d) An Insolvency Event occurs with respect to the Borrower;
(e) Any of the following occurs: there is a material impairment of the value or priority of the Bank’s Lien in the Collateral; a notice of lien, levy or assessment is filed against the Borrower or an asset of the Borrower by any government authority; or a judgment or other claim becomes a Lien on any Collateral; or any asset of the Borrower is seized, attached, or otherwise levied upon by a judicial officer;
(f) Any event occurs which might, in the Bank’s reasonable opinion, have a material adverse effect on the Collateral pledged to the Bank under the this Agreement or on the Borrower’s financial condition, operations or prospects or the ability of the Borrower to perform its obligations under this Agreement or any other Pledge Document; or
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(g) The Custody Agreement is terminated except upon the simultaneous execution by the Bank and the Borrower of a substantially identical custody agreement in replacement thereof, in form and substance satisfactory to the Bank.
9. Remedies.
(a) If an Event of Default shall occur and be continuing, then or at any time thereafter, and in addition to the rights and remedies of Bank pursuant to the terms and provisions of the Loan Agreement and the Note, the Bank (itself or through an agent) is hereby authorized and empowered at its election, to sell in one or more public or private sales after seven days’ notice (which notice the Borrower agrees is commercially reasonable) but without any previous notice or advertisement, the whole or any part of the Securities. Any sale may be either for cash or upon credit or for future delivery, and the Bank may be the purchaser of the whole or any part of the Securities so sold and hold the same thereafter in its own right free from any claim of the Borrower or any right of redemption. The Bank reserves the right to reject any and all bids at such sale which, in its sole discretion, it shall deem inadequate. Demands of performance, except as otherwise herein specifically provided for, notices of sale, advertisements and the presence of property at sale are hereby waived and any sale hereunder may be conducted by any officer or agent of the Bank.
(b) If, at the original time or times appointed for the sale of the whole or any part of the Securities, the then current market price is inadequate to discharge in full all the Obligations, or if the Securities be offered for sale in lots, if at any of such sales, the highest bid for the lot offered for sale would indicate to the Bank, in its discretion, the unlikelihood of the proceeds of the sales of all of the Securities being sufficient to discharge all the Obligations, the Bank may, on one or more occasions, postpone any of said sales by public announcement at the time of sale or the time of previous postponement of sale, and no other notice of such postponement or postponements of sale need be given, any other notice being hereby waived; provided, however, that any sale or sales made after such postponement shall be after seven days’ notice to the Borrower.
(c) In the event of any sale(s) hereunder the Bank shall, after deducting all costs or expenses of every kind (including, to the full extent permitted by law, attorney’s fees and disbursements) for care, safekeeping, collection, sale, delivery or otherwise, apply the residue of the proceeds of the sale(s) to the payment or reduction, either in whole or in part, of the Obligations returning the surplus, if any, to the Borrower.
(d) If, at any time when the Bank shall determine to exercise its right to sell the whole or any part of the Securities hereunder, such Securities or the part thereof to be sold shall not be effectively registered, for any reason whatsoever, under the Securities Act of 1933, as then in effect (or any similar statute then in effect) (the “Securities Act”), the Bank may, in its discretion (subject only to applicable Requirements of Law), sell such Securities or part thereof by private sale in such manner and under such circumstances as the Bank may deem necessary or advisable, but subject to the other requirements of this Section 9, and shall not be required to effect such registration or to cause the same to be effected. Without limiting the generality of the foregoing, in any such event the Bank in its discretion (i) may proceed to make such private sale notwithstanding that a registration statement for the purpose of registering such Securities or part thereof could be or shall have been filed under said Securities Act (or similar statute), (ii) may approach and negotiate with a single possible purchaser to effect such sale, and (iii) may restrict such sale to a purchaser who will represent and agree that such purchaser is purchasing for its own account, for investment and not with a view to the distribution or sale of such Securities or part thereof. In addition to a private sale as provided above in this Section 9, if any of the Securities shall not be freely distributable to the public without registration under the Securities Act (or similar statute) at the time of any proposed sale pursuant to this Section 9, then the Bank shall not be required to effect such registration or cause the same to be effected but, in its discretion (subject only to applicable Requirements of Law), may require that any sale hereunder (including a sale at auction) be conducted subject to restrictions (i) as to the financial sophistication and ability of any Person permitted to bid or purchase at sale, (ii) as to the content of legends to be placed upon any certificates representing the Securities sold in such sale, including restrictions on future transfer thereof, (iii) as to the representations required to be made by each Person bidding or purchasing at such sale relating to that Person’s access to financial information about the Borrower and such Person’s intentions as to the holding of the Securities so sold for investment, for its own account, and not with a view to the distribution thereof, and (iv) as to such other matters as the Bank may, in its discretion, deem necessary or appropriate in order that such sale (notwithstanding any failure so to register) may be effected in compliance with laws affecting the enforcement of creditors’ rights and the Securities Act and all applicable state or other jurisdictions’ securities laws.
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(e) The Borrower acknowledges that any sale under the circumstances described in this Section 9 shall be deemed to have been held in a manner which is commercially reasonable. In the event of any such sale under the circumstances described in this Section 9, the Bank shall incur no responsibility or liability for selling all or any part of the Securities at a price which the Bank may deem reasonable under the circumstances, notwithstanding the possibility that a substantially higher price might be realized if the sales were deferred until after registration as aforesaid.
(f) The Borrower agrees that it will not at any time plead, claim or take the benefit of any appraisal, valuation, stay, extension, moratorium or redemption law now or hereafter in force in order to prevent or delay the enforcement of this Agreement, or the absolute sale of the whole or any part of the Securities or the possession thereof by any purchaser at any sale hereunder, and the Borrower waives the benefit of all such laws to the extent it lawfully may do so. The Borrower agrees that it will not interfere with any right, power and remedy of the Bank provided for in this Agreement or now or hereafter existing at law or in equity or by statute or otherwise, or the exercise or beginning of the exercise by the Bank of any one or more of such rights, powers or remedies. No failure or delay on the part of the Bank to exercise any such right, power or remedy and no notice or demand which may be given to or made upon the Borrower by the Bank with respect to any such remedies shall operate as a waiver hereof, or limit or impair the Bank’s right to take any action or to exercise any power or remedy hereunder, without notice or demand, or prejudice its rights as against the Borrower in any respect.
10. Waiver.
(a) The Borrower waives any right to require Bank to: (i) proceed against or exhaust any security held for the Obligations, or (ii) pursue any other remedy in Bank’s power whatsoever. The Borrower hereby waives notice of acceptance of this Agreement, and also presentment, demand, protest and notice of dishonor of any and all of the Obligations, and promptness in commencing suit against any party thereto or liable thereon, and in giving notice to or of making any claim or demand hereunder upon the Borrower.
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(b) No delay on the Bank’s part in exercising any power of sale, lien, option or other right hereunder, and no notice or demand which may be given to or made upon the Borrower by the Bank with respect to any power of sale, lien, option or other right hereunder, shall constitute a waiver thereof, or limit or impair the Bank’s right to take any action or to exercise any power of sale, lien, option, or any other right hereunder, without notice or demand, or prejudice the Bank’s rights as against the Borrower in any respect. No act or omission of any kind on Bank’s part shall in any event affect or impair this Agreement.
11. Indemnification. The Borrower agrees to indemnify and hold the Bank harmless from and against any taxes, liabilities, claims and damages, including reasonable attorney’s fees and disbursements, and other expenses asserted or brought by any third parties and incurred or arising by reason of the taking or the failure to take action by the Bank, in good faith, under this Agreement and in respect of any transactions effected in connection with this Agreement, including, without limitation, any taxes payable in connection with the delivery or registration of any of the Securities as provided herein. The obligations of the Borrower under this Section shall survive the termination of this Agreement.
(a) The Borrower agrees to reimburse Bank for actual out-of-pocket expenses within thirty (30) days of demand, including, without limitation, reasonable counsel fees, incurred by the Bank in connection with the administration and enforcement of this Agreement and/or the Note and/or the Loan Agreement; provided, however, that this Section 12(a) shall not be construed as granting the Bank a security interest in any Securities for the purpose of paying such counsel fees.
(b) This Agreement shall be binding upon the Borrower and the Borrower’s assigns, and shall inure to the benefit of, and be enforceable by, the Bank and its successors, transferees and assigns. None of the terms or provisions of this Agreement may be waived, altered, modified or amended except in writing duly signed for and on behalf of the Bank and the Borrower.
13. Notices. Any notices under or pursuant to this Agreement shall be deemed duly sent when delivered by hand or when mailed by registered or certified mail, return receipt requested, or when sent by facsimile transmission, addressed as follows:
(a) | If to Bank, at | |
The Huntington National Bank | ||
00 Xxxxx Xxxxxxxxxxxx Xxxxxx XXXX00 | ||
Xxxxxxxxxxxx, XX 00000 | ||
Attention: Xxxxxx Xxxxxxxx Tel: 000-000-0000 | ||
Email: Xxxxxx.Xxxxxxxx@Xxxxxxxxxx.xxx |
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(b) | If to the Borrower: | |
Capitol Series Trust | ||
c/o Ultimus Fund Solutions, LLC 000 Xxxxxxxx Xxxxx, Xxxxx 000 Xxxxxxxxxx, Xxxx 00000 | ||
Attention: Xxxxxxx X. Xxxxxx, President Tel: 000-000-0000 | ||
Email: XXxxxxx@xxxxxxxxxxxxxxxxxxxx.xxx | ||
with a copy to: | ||
Caleb X.X. XxXxxx | ||
Bernstein, Shur, Xxxxxx & Xxxxxx, P.A. 000 Xxxxxx Xxxxxx | ||
X.X. Xxx 0000 | ||
Xxxxxxxx, Xxxxx 00000-0000 Tel: 000 000-0000 | ||
Email: xxxxxxx@xxxxxxxxxxxxx.xxx |
Either party may change such address by sending notice of the change to the other party.
SIGNATURES ON FOLLOWING PAGE
10
IN WITNESS WHEREOF, the parties hereto have caused this Pledge and Security Agreement to be duly executed as of the date first above written.
CAPITOL SERIES TRUST | ||
on behalf and for the benefit of the Funds, | ||
“Borrower” | ||
By: | ||
Name: | ||
Title: |
THE HUNTINGTON NATIONAL BANK, “Bank” | ||
By: | ||
Name: | ||
Title: |
11
EXHIBIT 1.1
TO PLEDGE AND SECURITY AGREEMENT
BETWEEN
CAPITOL SERIES TRUST,
AND
THE HUNTINGTON NATIONAL BANK
PARTICIPATING FUNDS
Fund | Investment Adviser | Date Added |
Hedeker Strategic Appreciation Fund | Hedeker Wealth LLC | March 15, 2019 |
CAPITOL SERIES TRUST | ||
on behalf and for the benefit of the Funds, | ||
“Trust” | ||
By: | ||
Name: | ||
Title: | ||
THE HUNTINGTON NATIONAL BANK, “Bank” | ||
By: | ||
Name: | ||
Title: |
1
ANNEX 1
TO PLEDGE AND SECURITY AGREEMENT
BETWEEN
CAPITOL SERIES TRUST
AND
THE HUNTINGTON NATIONAL BANK
CONTROL AGREEMENT
This Control Agreement (this “Agreement”), dated March 15, 2019 is by and among CAPITOL SERIES TRUST, an Ohio business trust (the “Borrower”) executing this Agreement on behalf of itself and on behalf and for the benefit of those investment series set forth in Exhibit A (the “Funds” and each, a “Fund”), THE HUNTINGTON NATIONAL BANK, a national bank (“Bank”), and THE HUNTINGTON NATIONAL BANK, a national bank (the “Custodian”).
NOW THEREFORE, for valuable consideration, the parties hereto agree as follows:
1. | Establishment of Collateral Account(s). The Custodian hereby confirms and agrees that: |
1.1 Custodian has established the following account(s) (the “Collateral Account(s)”), in the name of the Borrower.
Fund | Collateral Account Numbers |
Hedeker Strategic Appreciation Fund | 1041013623 |
1.2 The Custodian is, and at all times hereafter will be, acting in the capacity of “Securities Intermediary” (as such term is defined in Article 8 of the Uniform Commercial Code as adopted by the State of Ohio (the “UCC”)) in respect of all Securities or other property credited to the Collateral Account(s).
1.3 All securities or other property underlying any financial assets credited to the Collateral Account(s) shall be registered in the name of the Custodian, indorsed to the Custodian or in blank and in no case, will any financial asset credited to a Collateral Account be registered in the name of the Borrower, payable to the order of the Borrower or specially indorsed to the Borrower except to the extent the foregoing have been specially indorsed to the Custodian or in blank.
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2. | Collateral Account Control. |
3. | Limited Responsibility of Custodian. |
3.1 The Custodian shall have no responsibility or liability to Bank for complying with entitlement orders or other instructions originated by the Borrower concerning the Collateral Account(s) or any Collateral, prior to Custodian receiving a Notice of Exclusive Control and Custodian having had a reasonable time to act thereon.
3.2 The Custodian shall have no responsibility or liability to the Borrower, for complying with a Notice of Exclusive Control or complying with entitlement orders or other instructions originated by Bank concerning the Collateral Accounts or any Collateral. The Custodian shall have no duty to investigate or make any determination as to whether any entitlement order or Notice of Exclusive Control is appropriate whether or not the Borrower may allege that such entitlement order or Notice of Control is inappropriate. Upon Bank issuing a Notice of Exclusive Control, the Borrower agrees not to issue any request or instructions to Custodian to make trades of securities held in the Collateral Account(s) or to transfer or withdraw any financial assets, cash or other property from the Collateral Account(s) without the prior written consent of Bank.
3.3 Notwithstanding any provision contained herein or in any other document or instrument to the contrary, Custodian shall not be liable for any action taken or omitted to be taken at the instruction of Bank or the Borrower, as applicable, or any action taken or omitted to be taken under or in connection with this Agreement, except for Custodian’s own gross negligence or willful misconduct in carrying out such instructions.
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5. | Duties and Services of Custodian. |
5.1 The Custodian shall have no duties, obligations, responsibilities or liabilities with respect to the Collateral or the Collateral Account(s) except as and to the extent expressly set forth in this Agreement (and as between the Borrower and Custodian the Custody Agreement), and no implied duties of any kind shall be read into this Agreement against Custodian including, without limitation, the duty to preserve, exercise or enforce rights in the Collateral and Collateral Account(s).
5.2 Instructions under this Agreement from the Borrower’s authorized representative given in accordance with the terms of the Custody Agreement shall also constitute proper instructions under the Custody Agreement.
5.3 Bank agrees to provide to Custodian, on Exhibit C attached hereto, the names and signatures of authorized parties who may give written notices, instructions or entitlement orders concerning the Collateral Account(s).
5.4 Notwithstanding anything to the contrary in this Agreement, Bank and the Borrower hereby further acknowledge and agree that any Collateral issued outside the United States (“Foreign Security System Assets”) which may be held by Custodian, a sub-custodian within Custodian’s network of sub-custodians (each a “Sub-Custodian”) or a depository or book-entry system for the central handling of securities and other financial assets in which Custodian or the Sub-Custodian are participants may not permit the Borrower to have a security entitlement under the UCC with respect to such Foreign Security System Assets (and such property shall be deemed for purposes of this Agreement not to be a financial asset held within the Collateral Account(s)). The parties hereby further acknowledge that Custodian gives no assurance that a security entitlement is created under the UCC with respect to any assets held in Euroclear or Cedelbank or their successors.
6. | Indemnification of the Custodian. |
6.1 The Borrower and Bank hereby agree that Custodian is released from any and all liabilities to the Borrower and Bank arising from the terms of this Agreement and the compliance of Custodian with the terms hereof, except to the extent that such liabilities arise from Custodian’s gross negligence or willful misconduct. In no event shall Custodian be liable under this Agreement to the Borrower or Bank or any Person claiming by through or under the Borrower or Bank for consequential or special damages, even if Custodian has been advised of the possibility or likelihood of such damages. This provision shall survive the termination of this Agreement.
6.2 As between the Borrower and Custodian, Custodian shall be and remains entitled to all of the rights, indemnities, powers, and protections in its favor under the Custody Agreement, which shall apply fully to Custodian’s actions and omissions hereunder. This provision shall survive the termination of this Agreement. In addition to such the rights, indemnities, powers, and protections set forth in the Custody Agreement, Borrower hereby agrees to hold harmless, indemnify, and defend Custodian, and its affiliates, successors, assigns, officers, directors, employees, and agents, against all losses, liabilities, claims, litigation, demands, suits, costs (including reasonable attorneys’ fees), disbursements, or expenses incurred as a result of the assertion of any claim by any Person or entity arising out of or otherwise arising from or in connection with or related to this Agreement, including any that may be incurred in performing its duties or responsibilities pursuant to the terms of this Agreement, except to the extent the losses, liabilities, claims, litigation, demands, suits, costs, disbursements, or expenses are a direct result of Custodian’s gross negligence or willful misconduct.
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6.3 As between Custodian and Bank, Bank will hold harmless, indemnify, and defend Custodian, and its affiliates, successors, assigns, officers, directors, employees, and agents, against all losses, liabilities, claims, litigation, demands, suits, costs, disbursements, or expenses arising out of entitlement orders and any other instructions given by Bank to Custodian under this Agreement or actions taken by Custodian in compliance with entitlement orders originated by Bank, or otherwise following instructions of Bank hereunder, including reasonable attorneys’ fees and disbursements, except to the extent the losses, liabilities, claims, litigation, demands, suits, costs, disbursements, or expenses are a direct result of Custodian’s gross negligence or willful misconduct. This provision shall survive the termination of this Agreement.
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11. Notices. Any notice, instruction or other instrument required to be given hereunder requests and demands to or upon the respective parties hereto shall be in writing and may be sent by hand, or by facsimile transmission, telex, or delivery by any recognized delivery service, prepaid or, by certified or registered mail, postage prepaid, and addressed as follows, or to such other address as any party may hereafter notify the other respective parties hereto in writing:
(a) | If to Custodian, then: |
The Huntington National Bank
7 Easton Oval/EA4E95
Xxxxxxxx, XX 00000
Attn: Xxxxx Xxxxxx
Tel: 000-000-0000
Email: Xxxxx.Xxxxxx@Xxxxxxxxxx.xxx
(b) | If to Bank, then: |
The Huntington National Bank
00 Xxxxx Xxxxxxxxxxxx Xxxxxx
XXXX00
Xxxxxxxxxxxx, XX 00000
Attn: Xxxxxx Xxxxxxxx
Tel: 000-000-0000
Email: Xxxxxx.Xxxxxxxx@Xxxxxxxxxx.xxx
(c) | If to Borrower, then: |
Capitol Series Trust
c/o Ultimus Fund Solutions, LLC
000 Xxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxxx, Xxxx 00000
Attention: Xxxxxxx X. Xxxxxx, President
Tel: 000-000-0000
Email: XXxxxxx@xxxxxxxxxxxxxxxxxxxx.xxx
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with a copy to:
Caleb X.X. XxXxxx
Bernstein, Shur, Xxxxxx & Xxxxxx, P.A.
000 Xxxxxx Xxxxxx
X.X. Xxx 0000
Xxxxxxxx, Xxxxx 00000-0000
Tel: 000 000-0000
Email: xxxxxxx@xxxxxxxxxxxxx.xxx
SIGNATURE PAGE TO FOLLOW
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THE HUNTINGTON NATIONAL BANK, as Custodian | ||
By: | ||
Name: | ||
Title: | ||
Its duly authorized officer | ||
THE HUNTINGTON NATIONAL BANK, as Bank | ||
By: | ||
Name: | ||
Title: | ||
Its duly authorized officer | ||
CAPITOL SERIES TRUST | ||
on behalf and for the benefit of the Funds, as Borrower | ||
By: | ||
Name: | ||
Title: | ||
Its duly authorized officer |
8
Exhibit A
To the
Control Agreement
Participating Funds
Hedeker Strategic Appreciation Fund
9
Exhibit B
[Bank letterhead]
The Huntington National Bank
7 Easton Oval/EA4E95
Xxxxxxxx, Xxxx 00000
Attention: Xxxxx Xxxxxx
We hereby instruct you pursuant to the terms of that certain Control Agreement dated as of March 15, 2019 (as from time to time amended and supplemented, the “Control Agreement”) among the undersigned, The Huntington National Bank (together with its successors and assigns), Capitol Series Trust (the “Borrower”) and you, as Custodian, that you (i) shall not follow any instructions or entitlement orders of Borrower in respect of the Collateral Account(s) or the Collateral assets held by you for Hedeker Strategic Appreciation Fund (as each such capitalized term is defined in the Control Agreement), and (ii) unless and until otherwise expressly instructed by the undersigned, Custodian shall exclusively follow the entitlement orders and instructions of the undersigned in respect of the Collateral Account(s) or the Collateral Account(s) assets.
Very truly yours, | ||
THE HUNTINGTON NATIONAL BANK | ||
By: | ||
Authorized Signatory |
cc: | Capitol Series Trust |
Hedeker Wealth LLC
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Exhibit C
[Bank letterhead]
The Huntington National Bank
7 Easton Oval/EA4E95
Xxxxxxxx, Xxxx 00000
Attention: Xxxxx Xxxxxx
The Huntington National Bank, (the “Bank”), hereby certifies that the Persons whose names appear below are authorized to act on its behalf, including the authorization to give instructions, with respect to the Control Agreement among the undersigned, The Huntington National Bank (together with its successors and assigns), Capitol Series Trust (the “Borrower”) and you, as Custodian, dated as of March 15, 2019. The Bank further certifies that the true signature of each such Person is set forth below opposite his/her name, and that Custodian may rely upon this certificate until such time as it receives another certificate bearing a later date and has had a reasonable opportunity to act thereon.
NAME | SIGNATURE | ||
Xxxxxx Xxxxxxxx | |||
Xxxxx Xxxxxxxx | |||
Xxxxxx Xxxxx | |||
Xxx Xxxxx |
THE HUNTINGTON NATIONAL BANK | ||
BY: | ||
TITLE: | ||
DATE: |
00
XXXXXXXX X
TO CREDIT AGREEMENT
BETWEEN
CAPITOL SERIES
TRUST
AND
THE HUNTINGTON NATIONAL BANK
AUTHORIZATION LETTER
_____________, 2019
Xxxxxx Xxxxxxxx
The Huntington National Bank
00 Xxxxx Xxxxxxxxxxxx Xxxxxx
XXXX00
Xxxxxxxxxxxx, XX 00000
Ladies and Gentlemen:
This letter will serve as a notification that Capitol Series Trust (the “Borrower”) and Hedeker Wealth LLC (the “Investment Advisor”) have the power and authority to request and enter into borrowings on behalf of those investment series set forth on Exhibit 1.1 (the “Funds” and each a “Fund”) pursuant to that certain Credit Agreement between the Borrower and The Huntington National Bank dated as of even date herewith (“Credit Agreement”). The Borrower is the Borrower referenced in the Credit Agreement. The Adviser is the investment adviser for the Borrower registered under the Investment Advisers Act of 1940 with SEC registration number 801-61654.
The Borrower and the Investment Advisor hereby expressly authorize The Huntington National Bank (the “Custodian”) as the Borrower’s designated representative on behalf of the Funds, without any further oral or written instruction, (a) to request advances from The Huntington National Bank (the “Bank”) under the Credit Agreement for the purposes set forth therein on each occasion where a Fund has daily cash needs in excess of the amount of cash then available in the Fund’s Trust Custody Account, and (b) to immediately apply when available the cash held by the Custodian on behalf of the Fund to the repayment of principal and interest of the amounts due by the Fund under the Credit Agreement.
The Borrower and the Investment Advisor hereby acknowledge and agree that all securities of a Fund are to be pledged as security for any and all advances made to the Fund under the Credit Agreement pursuant to the terms of the Pledge and Security Agreement to be entered into between the Bank and the Borrower (the Pledge Agreement”) and upon the delivery of a Report of Pledged Securities to the Bank. The Borrower and the Investment Adviser hereby authorize and direct the Custodian to execute on behalf of the Fund, a Report of Pledged Securities granting to the Bank a security interest in securities owned by the Fund in an amount equal to the Loan.
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Notwithstanding the authority granted to the Custodian in this Authorization Letter, the Borrower and the Investment Adviser shall be at all times responsible for ensuring that the borrowings made by a Fund under the Credit Agreement do not violate the Investment Company Act of 1940 or any of the rules and regulations thereunder. A Fund shall from time to time promptly inform the Custodian of any applicable limitations, restrictions and/or prohibitions on borrowings by the Fund under any agreement binding upon or affecting the Fund.
Nothing in this Authorization Letter shall obligate the Custodian to request any advances under the Credit Agreement. To the extent that the Custodian takes any actions contemplated by this Authorization Letter, the Custodian shall be held to the exercise of reasonable care and shall be without liability to a Fund for any loss, damage, cost, expense (including attorneys’ fees and disbursements), liability or claim unless arising from the gross negligence, bad faith or willful misconduct of the Custodian. The Custodian shall not be under any obligation at any time to ascertain whether a Fund is in compliance with the Investment Company Act of 1940, the rules and regulations thereunder, any other laws, rules or regulations applicable to the Borrower or the Fund, the provisions of the Borrower’s charter documents or by-laws, or the Fund’s investment objectives and policies as then in effect.
Nothing contained in this Agreement shall be deemed to modify or amend the Custody Agreement in effect between the Custodian and the Borrower. The obligations and liabilities of the Bank and the Borrower shall be as set forth in the Credit Agreement and related loan documents.
The Borrower and the Investment Adviser hereby expressly authorize the Bank to act upon the oral and/or written instructions of the Custodian as the Funds’ authorized designated representative, in making advances to the Fund under the Credit Agreement. The authorizations and designations set forth in this Authorization Letter shall remain in force as to a Fund until delivery to the Custodian and the Bank of written notice by Borrower revoking such authorizations and designations.
SIGNATURE PAGE TO FOLLOW
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Sincerely yours, | ||
CAPITOL SERIES TRUST | ||
By: | ||
Name: | ||
Title: | ||
HEDEKER WEALTH LLC | ||
By: | ||
Name: | ||
Title: |
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Exhibit 1.1
To the
Authorization Letter
Participating Funds
Date: March 15, 2019
Hedeker Strategic Appreciation Fund
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PROMISSORY NOTE
Capitol Series Trust, on behalf and for the benefit of
Hedeker Strategic Appreciation Fund
Indianapolis, IN
$10,000,000 | March 15, 2019 |
Capitol Series Trust, an Ohio business trust (the “Borrower”), on behalf and for the benefit of the Hedeker Strategic Appreciation Fund (the “Fund”), for value received, hereby promises to pay to the order of THE HUNTINGTON NATIONAL BANK (the “Bank”) at its offices, 00 Xxxxx Xxxxxxxxxxxx Xxxxxx, XXXX00, Xxxxxxxxxxxx, Xxxxxxx 00000, in lawful money of the United States of America and in immediately available funds, the principal sum of TEN MILLION AND NO/100 DOLLARS ($10,000,000) or the aggregate unpaid principal amount of all Loans made by the Bank to the Borrower, whichever is less, pursuant to the terms of the Revolving Credit Agreement of even date herewith by and between the Borrower and the Bank (as the same may be amended, restated or otherwise modified from time to time the “Agreement”). Capitalized terms used herein without definition shall have the meanings given to them in the Agreement.
The Borrower covenants that the funds borrowed by it from the Bank as evidenced by this Note shall be used solely for the benefit of the Fund.
The principal balance hereof outstanding from time to time shall bear interest at the Interest Rate in effect from time to time. Interest on each Loan will accrue daily, will be calculated based on a 360-day year and charged for the actual number of days the principal balance is outstanding. All outstanding principal and interest shall be payable in accordance with the terms of the Agreement. Upon and during the continuance of an Event of Default, this Note shall bear interest (computed and adjusted in the same manner, and with the same effect, as interest hereon prior to maturity), at a rate per annum equal to three percent (3%) above the Interest Rate, until paid, and whether before or after the entry of judgment hereon.
The principal amount of each Loan made by the Bank and the amount of each payment or prepayment made by the Borrower shall be recorded by the Bank on the schedules attached hereto or in the regularly maintained data processing records of the Bank. The aggregate unpaid principal amount of all Loans set forth in such schedules or in such records shall be presumptive evidence of the principal amount owing and unpaid on this Note. However, failure by the Bank to make any such entry shall not limit or otherwise affect the Borrower’s obligations under this Note or the Agreement.
This Note is the Note referred to in the Agreement, and is entitled to the benefits, and is subject to the terms of the Agreement. This Note and the obligations evidenced hereby are secured by the Collateral described in the Pledge Agreement and are entitled to the benefits of the Pledge Agreement. The principal of this Note is payable and/or prepayable in the amounts and under the circumstances, and its maturity is subject to acceleration upon the terms, set forth in the Agreement. Except as otherwise expressly provided in the Agreement, if any payment on this Note becomes due and payable on a day other than a Business Day, the maturity thereof shall be extended to the next Business Day, and interest shall be payable at the rate specified herein during such extension period.
In no event shall the interest rate on this Note exceed the highest rate permissible under any law which a court of competent jurisdiction shall, in a final determination, deem applicable hereto. In the event that a court determines that the Bank has received interest and other charges under this Note in excess of the highest permissible rate applicable hereto, such excess shall be deemed received on account of the Borrower, and shall automatically be applied to reduce the amounts due to the Bank from the Borrower under this Note, other than interest, and the provisions hereof shall be deemed amended to provide for the highest permissible rate. If there are no such amounts outstanding, the Bank shall refund to the Borrower such excess.
The Borrower and all endorsers, sureties, guarantors and other Persons liable on this Note, if any, hereby waive notice of non-payment, demand, presentment or protest in connection with the delivery, performance and enforcement of this Note; consent to one or more renewals or extensions of this Note; and generally waive any and all suretyship defenses and defenses in the nature thereof.
This Note may not be changed orally, but only by an instrument in writing.
This Note is being delivered in, is intended to be performed in, shall be construed and enforced in accordance with, and be governed by the laws of, the State of Ohio without regard to principles of conflict of laws. The Borrower agrees that the State and federal courts in Franklin County, Ohio or any other court in which the Bank initiates proceedings have exclusive jurisdiction over all matters arising out of this Note, and that service of process in any such proceeding shall be effective if mailed to the Borrower at its address described in the Notices section of the Agreement.
BANK AND BORROWER HEREBY WAIVE THE RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT BY EITHER BANK OR BORROWER AGAINST THE OTHER ARISING OUT OF THIS NOTE.
Borrower authorizes any attorney at law to appear in any court of record in the State of Ohio or in any other state or territory of the United States of America after the loan evidenced by this Note becomes due, whether by acceleration or otherwise, to waive the issuing and service of process, and to confess judgment against the Borrower in favor of the Bank for the amount then appearing due on this Note, together with costs of suit, and thereupon to waive all errors and all rights of appeal and stays of execution. The Borrower waives any conflict of interest that an attorney hired by the Bank may have in acting on the Borrower’s behalf in confessing judgment against the Borrower while such attorney is retained by the Bank. The Borrower expressly consents to such attorney acting for Borrower in confessing judgment and to such attorney’s fee being paid by the Bank or deducted from the proceeds of collection of this Note or Collateral security therefor.
WARNING - BY SIGNING THIS PAPER YOU GIVE UP YOUR RIGHT TO NOTICE AND COURT TRIAL. IF YOU DO NOT PAY ON TIME A COURT JUDGMENT MAY BE TAKEN AGAINST YOU WITHOUT YOUR PRIOR KNOWLEDGE AND THE POWERS OF A COURT CAN BE USED TO COLLECT FROM YOU REGARDLESS OF ANY CLAIMS YOU MAY HAVE AGAINST THE CREDITOR WHETHER FOR RETURNED GOODS, FAULTY GOODS, FAILURE ON HIS PART TO COMPLY WITH THE AGREEMENT, OR ANY OTHER CAUSE.
CAPITOL SERIES TRUST on behalf of Hedeker Strategic Appreciation Fund | ||
By: | /s/ Xxxxxxx X. Xxxxxx | |
Name: | Xxxxxxx X. Xxxxxx | |
Title: | President |