p82341048_2016.htm - Generated by SEC Publisher for SEC Filing

[Letterhead of Stellus Capital Investment Corporation]

 

November 9, 2016

 

VIA EDGAR

U.S. Securities and Exchange Commission

100 F Street, N.E.

Washington, D.C. 20549

 

Re:Stellus Capital Investment Corporation

File No. 814-00971

Rule 17g-1(g) Fidelity Bond Filing

 

Ladies and Gentlemen:

 

On behalf of Stellus Capital Investment Corporation (the “Company”), enclosed herewith for filing, pursuant to Rule 17g-1(g) under the Investment Company Act of 1940, as amended (the “1940 Act”), are the following:

 

        1.       A copy of the Company’s Fidelity Bond in the amount of $1,000,000 (the “Bond”);

 

        2.       A copy of the resolutions approved at a meeting of Board of Directors of the Company on November 2, 2016 at which a majority of the directors who are not “interested persons” of the Company as defined under Section 2(a)(19) of the 1940 Act approved the amount, type, form and coverage of the Bond; and

 

        3.       A copy of the Single-Insured Investment Bond Agreement, effective November 7, 2016, pursuant to Rule 17g-1(g) under the 1940 Act.

 

The premium was paid for the period beginning November 7, 2016 and ending November 7, 2017.

 

If you have any questions regarding this submission, please do not hesitate to call me at (713) 292-5414.

 

 

  Very truly yours, 
   
   
  /s/ W. Todd Huskinson
 

W. Todd Huskinson

Chief Financial Officer,

Chief Compliance Officer,

Treasurer and Secretary of the Company

 

 

 

  

CERTIFICATE OF SECRETARY

 

The undersigned, W. Todd Huskinson, Secretary of Stellus Capital Investment Corporation, a Maryland corporation (the “Company”), does hereby certify that:

 

1.        This certificate is being delivered to the Securities and Exchange Commission (the “SEC”) in connection with the filing of the Company’s fidelity bond (the “Bond”) pursuant to Rule 17g-1 of the Investment Company Act of 1940, as amended, and the SEC is entitled to rely on this certificate for purposes of the filing.

 

2.        The undersigned is the duly elected, qualified and acting Secretary of the Company, and has custody of the corporate records of the Company and is a proper officer to make this certification.

 

3.        Attached hereto as Exhibit A is a copy of the resolution approved by the Board of Directors of the Company, including a majority of the Board of the Directors who are not “interested persons” of the Company, approving the amount, type, form and coverage of the Bond.

 

4.        Premiums have been paid for the period November 7, 2016 to November 7, 2017.

 

IN WITNESS WHEREOF, the undersigned has caused this certificate to be executed this 9th day of November, 2016.

 

 

 

/s/ W. Todd Huskinson           

W. Todd Huskinson

Secretary

 

 

 

 

EXHIBIT A

 

Approval and Renewal of Fidelity Coverage Bond

 

WHEREAS, Section 17(g) of the 1940 Act and Rule 17g-1(a) thereunder require a BDC, such as the Company, to provide and maintain a bond which has been issued by a reputable fidelity insurance company authorized to do business in the place where the bond is issued, to protect the Company against larceny and embezzlement, covering each officer and employee of the BDC who may singly, or jointly with others, have access to the securities or funds of the BDC, either directly or through authority to draw upon such funds of, or to direct generally, the disposition of such securities, unless the officer or employee has such access solely through his position as an officer or employee of a bank (each, a covered person);

 

WHEREAS, Rule 17g-1 under the 1940 Act specifies that the bond may be in the form of (i) an individual bond for each covered person, or a schedule or blanket bond covering such persons, (ii) a blanket bond which names the Company as the only insured (a single insured bond), or (iii) a bond which names the Company and one or more other parties as insureds (a joint insured bond), as permitted by Rule 17g-1 under the 1940 Act;

 

WHEREAS, Rule 17g-1 under the 1940 Act requires that a majority of the Non-Interested Directors approve periodically (but not less than once every 12 months) the reasonableness of the form and amount of the bond, with due consideration to the value of the aggregate assets of the Company to which any covered person may have access, the type and terms of the arrangements made for the custody and safekeeping of such assets, and the nature of securities and other investments to be held by the Company, and pursuant to factors contained in Rule 17g-1 under the 1940 Act, which are described in the accompanying memorandum attached hereto; and

 

WHEREAS, under Rule 17g-1 under the 1940 Act, the Company is required to make certain filings with the SEC and give certain notices to each member of the Board of Directors in connection with the bond, and designate an officer who shall make such filings and give such notices.

 

NOW, THEREFORE, BE IT RESOLVED, that, having considered the expected aggregate value of the securities and funds of the Company to which officers or employees of the Company may have access (either directly or through authority to draw upon such funds or to direct generally the disposition of such securities), the type and terms of the arrangements made for the custody of such securities and funds, the nature of securities and other investments to be held by the Company, the accounting procedures and controls of the Company, the nature and method of conducting the operations of the Company and the requirements of Section 17(g) of the 1940 Act and Rule 17g-1 thereunder, the Board, including a majority of the Non-Interested Directors, hereby determines that the amount, type, form, premium and coverage of the fidelity bond (the Fidelity Bond), covering the officers and employees of the Company and insuring the Company against loss from fraudulent or dishonest acts, including larceny and embezzlement, issued by Chubb Group of Insurance Companies and its affiliates having an aggregate coverage of $1,000,000 are fair and reasonable;

 

 

 

 

FURTHER RESOLVED, that the Authorized Officers be, and each of them hereby is, authorized, empowered and directed to take all appropriate actions, with the advice of legal counsel to the Company, to provide and maintain the Fidelity Bond on behalf of the Company;

 

FURTHER RESOLVED, that the Chief Compliance Officer of the Company be and hereby is, designated as the party responsible for making the necessary filings and giving the notices with respect to such bond required by paragraph (g) of Rule 17g-1 under the 1940 Act;

 

FURTHER RESOLVED, that the Authorized Officers be, and each of them hereby is, authorized, empowered and directed to file a copy of the Fidelity Bond and any other related document or instrument with the SEC;

 

FURTHER RESOLVED, that the Authorized Officers be, and each of them hereby is, authorized, empowered and directed, in the name and on behalf of the Company, to make or cause to be made, and to execute and deliver, all such additional agreements, documents, instruments and certifications and to take all such steps, and to make all such payments, fees and remittances, as any one or more of such officers may at any time or times deem necessary or desirable in order to effectuate the purpose and intent of the foregoing resolutions; and

 

FURTHER RESOLVED, that any and all actions previously taken by the Company or any of its directors, Authorized Officers or other employees in connection with the documents, and actions contemplated by the foregoing resolutions be, and they hereby are, ratified, confirmed, approved and adopted in all respects as and for the acts and deeds of the Company.

 

 

 

 

LOCKTON COMPANIES, LLC
ATTN: Tiffany Lemley
5847 SAN FELIPE, STE 320
HOUSTON, TX 77057  
 
 
 
 
INSURED: STELLUS CAPITAL INVESTMENT CORPORATION
PRODUCT: DFIBond
POLICY NO: 82341048
TRANSACTION: RENL

 


 

  Chubb Group of Insurance Companies DECLARATIONS
              FINANCIAL INSTITUTION INVESTMENT
  15 Mountain View Road, Warren, New Jersey 07059 COMPANY ASSET PROTECTION BOND
 
NAME OF ASSURED (including its Subsidiaries):     Bond Number: 82341048
 
STELLUS CAPITAL INVESTMENT CORPORATION        
4400 POST OAK PARKWAY, SUITE 2200          
              FEDERAL INSURANCE COMPANY
HOUSTON, TX   77027       Incorporated under the laws of Indiana
              a stock insurance company herein called the COMPANY
              Capital Center, 251 North Illinois, Suite 1100
              Indianapolis, IN 46204-1927
 
ITEM 1. BOND PERIOD: from 12:01 a.m. on November 7, 2016    
      to 12:01 a.m. on November 7, 2017    
 
ITEM 2. LIMITS OF LIABILITY--DEDUCTIBLE AMOUNTS:      
 
  If “Not Covered” is inserted below opposite any specified INSURING CLAUSE, such INSURING CLAUSE and
  any other reference shall be deemed to be deleted. There shall be no deductible applicable to any loss
  under INSURING CLAUSE 1. sustained by any Investment Company.  
 
          SINGLE LOSS   DEDUCTIBLE
  INSURING CLAUSE   LIMIT OF LIABILITY AMOUNT
 
  1 . Employee   $ 1,000,000   $ 0
  2 . On Premises   $ 1,000,000   $ 10,000
  3 . In Transit   $ 1,000,000   $ 10,000
  4 . Forgery or Alteration $ 1,000,000   $ 10,000
  5 . Extended Forgery $ 1,000,000   $ 10,000
  6 . Counterfeit Money $ 1,000,000   $ 10,000
  7 . Threats to Person $ 1,000,000   $ 10,000
  8 . Computer System $ 1,000,000   $ 10,000
  9 . Voice Initiated Funds Transfer          
      Instruction   $ 1,000,000   $ 10,000
  10 . Uncollectible Items of Deposit $ 1,000,000   $ 10,000
  11 . Audit Expense   $ 25,000   $ 0
 
ITEM 3. THE LIABILITY OF THE COMPANY IS ALSO SUBJECT TO THE TERMS OF THE FOLLOWING
  ENDORSEMENTS EXECUTED SIMULTANEOUSLY HEREWITH:    
 
  1-7                
 
 
IN WITNESS WHEREOF, THE COMPANY has caused this Bond to be signed by its authorized officers, but it shall not be
valid unless also signed by an authorized representative of the Company.    

 


ICAP Bond (5-98) - Federal  
Form 17-02-1421 (Ed. 5-98) Page 1 of 1

 


 

  The COMPANY, in consideration of payment of the required premium, and in reliance
  on the APPLICATION and all other statements made and information furnished to the
  COMPANY by the ASSURED, and subject to the DECLARATIONS made a part of this
  Bond and to all other terms and conditions of this Bond, agrees to pay the ASSURED
  for:          
 
 
Insuring Clauses            
 
 
Employee 1 . Loss resulting directly from Larceny or Embezzlement committed by any
Employee, alone or in collusion with others.

 
 
 
On Premises 2 . Loss of Property resulting directly from robbery, burglary, false pretenses,
      common law or statutory larceny, misplacement, mysterious unexplainable
      disappearance, damage, destruction or removal, from the possession, custody or
      control of the ASSURED, while such Property is lodged or deposited at premises
      located anywhere.
 
 
In Transit 3 . Loss of Property resulting directly from common law or statutory larceny,
      misplacement, mysterious unexplainable disappearance, damage or destruction,
      while the Property is in transit anywhere:
 
      a. in an armored motor vehicle, including loading and unloading thereof,
 
      b. in the custody of a natural person acting as a messenger of the ASSURED,
        or    
      c. in the custody of a Transportation Company and being transported in a
        conveyance other than an armored motor vehicle provided, however, that
        covered Property transported in such manner is limited to the following:
 
        (1 ) written records,
 
        (2 ) securities issued in registered form, which are not endorsed or are
restrictively endorsed, or
 
        (3 ) negotiable instruments not payable to bearer, which are not endorsed
            or are restrictively endorsed.
 
      Coverage under this INSURING CLAUSE begins immediately on the receipt of
      such Property by the natural person or Transportation Company and ends
      immediately on delivery to the premises of the addressee or to any representative
      of the addressee located anywhere.

 

ICAP Bond (5-98)  
Form 17-02-1421 (Ed. 5-98) Page 1 of 19

 


 

Insuring Clauses          
(continued)          
 
 
Forgery Or Alteration 4 . Loss resulting directly from:
      a. Forgery on, or fraudulent material alteration of, any bills of exchange,
        checks, drafts, acceptances, certificates of deposits, promissory notes, due
        bills, money orders, orders upon public treasuries, letters of credit, other
        written promises, orders or directions to pay sums certain in money, or
        receipts for the withdrawal of Property, or
 
      b. transferring, paying or delivering any funds or other Property, or establishing
        any credit or giving any value in reliance on any written instructions, advices
        or applications directed to the ASSURED authorizing or acknowledging the
        transfer, payment, delivery or receipt of funds or other Property, which
        instructions, advices or applications fraudulently purport to bear the
        handwritten signature of any customer of the ASSURED, or shareholder or
        subscriber to shares of an Investment Company, or of any financial
        institution or Employee but which instructions, advices or applications either
        bear a Forgery or have been fraudulently materially altered without the
        knowledge and consent of such customer, shareholder, subscriber, financial
        institution or Employee;
 
      excluding, however, under this INSURING CLAUSE any loss covered under
      INSURING CLAUSE 5. of this Bond, whether or not coverage for INSURING
      CLAUSE 5. is provided for in the DECLARATIONS of this Bond.
 
      For the purpose of this INSURING CLAUSE, a mechanically reproduced facsimile
      signature is treated the same as a handwritten signature.
 
 
Extended Forgery 5 . Loss resulting directly from the ASSURED having, in good faith, and in the
      ordinary course of business, for its own account or the account of others in any
      capacity:  
 
      a. acquired, accepted or received, sold or delivered, or given value, extended
        credit or assumed liability, in reliance on any original Securities,
        documents or other written instruments which prove to:
 
        (1) bear a Forgery or a fraudulently material alteration,
 
        (2) have been lost or stolen, or
 
        (3) be Counterfeit, or
 
      b. guaranteed in writing or witnessed any signatures on any transfer,
        assignment, bill of sale, power of attorney, guarantee, endorsement or other
        obligation upon or in connection with any Securities, documents or other
        written instruments.
 
      Actual physical possession, and continued actual physical possession if taken as
      collateral, of such Securities, documents or other written instruments by an
      Employee, Custodian, or a Federal or State chartered deposit institution of the
      ASSURED is a condition precedent to the ASSURED having relied on such items.
      Release or return of such collateral is an acknowledgment by the ASSURED that it
      no longer relies on such collateral.

 

ICAP Bond (5-98)  
Form 17-02-1421 (Ed. 5-98) Page 2 of 19

 


 

Insuring Clauses            
 
 
Extended Forgery     For the purpose of this INSURING CLAUSE, a mechanically reproduced facsimile
(continued)     signature is treated the same as a handwritten signature.
 
 
Counterfeit Money 6 . Loss resulting directly from the receipt by the ASSURED in good faith of any
      Counterfeit money.
 
 
Threats To Person 7 . Loss resulting directly from surrender of Property away from an office of the
      ASSURED as a result of a threat communicated to the ASSURED to do bodily
      harm to an Employee as defined in SECTION 1.e. (1), (2) and (5), a Relative or
      invitee of such Employee, or a resident of the household of such Employee, who
      is, or allegedly is, being held captive provided, however, that prior to the surrender
      of such Property:
      a. the Employee who receives the threat has made a reasonable effort to
        notify an officer of the ASSURED who is not involved in such threat, and
 
      b. the ASSURED has made a reasonable effort to notify the Federal Bureau of
        Investigation and local law enforcement authorities concerning such threat.
      It is agreed that for purposes of this INSURING CLAUSE, any Employee of the
      ASSURED, as set forth in the preceding paragraph, shall be deemed to be an
      ASSURED hereunder, but only with respect to the surrender of money, securities
      and other tangible personal property in which such Employee has a legal or
      equitable interest.
 
 
Computer System 8 . Loss resulting directly from fraudulent:
      a. entries of data into, or
 
      b. changes of data elements or programs within,
      a Computer System, provided the fraudulent entry or change causes:
 
        (1 ) funds or other property to be transferred, paid or delivered,
 
        (2 ) an account of the ASSURED or of its customer to be added, deleted,
debited or credited, or
 
        (3 ) an unauthorized account or a fictitious account to be debited or
            credited.

 

ICAP Bond (5-98)  
Form 17-02-1421 (Ed. 5-98) Page 3 of 19

 


 

Insuring Clauses        
(continued)        
 
 
Voice Initiated Funds 9 . Loss resulting directly from Voice Initiated Funds Transfer Instruction directed
Transfer Instruction     to the ASSURED authorizing the transfer of dividends or redemption proceeds of
      Investment Company shares from a Customer's account, provided such Voice
      Initiated Funds Transfer Instruction was:
      a. received at the ASSURED'S offices by those Employees of the ASSURED
        specifically authorized to receive the Voice Initiated Funds Transfer
        Instruction,
 
      b. made by a person purporting to be a Customer, and
 
      c. made by said person for the purpose of causing the ASSURED or Customer
        to sustain a loss or making an improper personal financial gain for such
        person or any other person.
      In order for coverage to apply under this INSURING CLAUSE, all Voice Initiated
      Funds Transfer Instructions must be received and processed in accordance with
      the Designated Procedures outlined in the APPLICATION furnished to the
      COMPANY.
 
 
Uncollectible Items of 10 . Loss resulting directly from the ASSURED having credited an account of a
Deposit     customer, shareholder or subscriber on the faith of any Items of Deposit which
      prove to be uncollectible, provided that the crediting of such account causes:
 
      a. redemptions or withdrawals to be permitted,
 
      b. shares to be issued, or
 
      c. dividends to be paid,
from an account of an Investment Company.
 
      In order for coverage to apply under this INSURING CLAUSE, the ASSURED
      must hold Items of Deposit for the minimum number of days stated in the
      APPLICATION before permitting any redemptions or withdrawals, issuing any
      shares or paying any dividends with respect to such Items of Deposit.
 
      Items of Deposit shall not be deemed uncollectible until the ASSURED'S
      standard collection procedures have failed.
 
 
Audit Expense 11 . Expense incurred by the ASSURED for that part of the cost of audits or
      examinations required by any governmental regulatory authority or self-regulatory
      organization to be conducted by such authority, organization or their appointee by
      reason of the discovery of loss sustained by the ASSURED and covered by this
      Bond.

 

ICAP Bond (5-98)  
Form 17-02-1421 (Ed. 5-98) Page 4 of 19

 


 

General Agreements        
 
 
Additional Companies A. If more than one corporation, or Investment Company, or any combination of
Included As Assured   them is included as the ASSURED herein:
    (1 ) The total liability of the COMPANY under this Bond for loss or losses
        sustained by any one or more or all of them shall not exceed the limit for
        which the COMPANY would be liable under this Bond if all such loss were
        sustained by any one of them.
 
    (2 ) Only the first named ASSURED shall be deemed to be the sole agent of the
        others for all purposes under this Bond, including but not limited to the giving
        or receiving of any notice or proof required to be given and for the purpose of
        effecting or accepting any amendments to or termination of this Bond. The
        COMPANY shall furnish each Investment Company with a copy of the
        Bond and with any amendment thereto, together with a copy of each formal
        filing of claim by any other named ASSURED and notification of the terms of
        the settlement of each such claim prior to the execution of such settlement.
 
    (3 ) The COMPANY shall not be responsible for the proper application of any
        payment made hereunder to the first named ASSURED.
 
    (4 ) Knowledge possessed or discovery made by any partner, director, trustee,
        officer or supervisory employee of any ASSURED shall constitute knowledge
        or discovery by all the ASSUREDS for the purposes of this Bond.
 
    (5 ) If the first named ASSURED ceases for any reason to be covered under this
        Bond, then the ASSURED next named on the APPLICATION shall thereafter
        be considered as the first named ASSURED for the purposes of this Bond.
 
 
Representation Made By B. The ASSURED represents that all information it has furnished in the
Assured   APPLICATION for this Bond or otherwise is complete, true and correct. Such
    APPLICATION and other information constitute part of this Bond.
 
    The ASSURED must promptly notify the COMPANY of any change in any fact or
    circumstance which materially affects the risk assumed by the COMPANY under
    this Bond.
 
    Any intentional misrepresentation, omission, concealment or incorrect statement of
    a material fact, in the APPLICATION or otherwise, shall be grounds for recision of
    this Bond.

 

ICAP Bond (5-98)  
Form 17-02-1421 (Ed. 5-98) Page 5 of 19

 


 

General Agreements        
(continued)        
 
 
Additional Offices Or C. If the ASSURED, other than an Investment Company, while this Bond is in force,
Employees - Consolidation,   merges or consolidates with, or purchases or acquires assets or liabilities of
Merger Or Purchase Or   another institution, the ASSURED shall not have the coverage afforded under this
Acquisition Of Assets Or   Bond for loss which has:
Liabilities - Notice To   (1 ) occurred or will occur on premises, or
Company        
    (2 ) been caused or will be caused by an employee, or
    (3 ) arisen or will arise out of the assets or liabilities,
    of such institution, unless the ASSURED:
    a.   gives the COMPANY written notice of the proposed consolidation, merger or
        purchase or acquisition of assets or liabilities prior to the proposed effective
        date of such action, and
    b.   obtains the written consent of the COMPANY to extend some or all of the
        coverage provided by this Bond to such additional exposure, and
    c.   on obtaining such consent, pays to the COMPANY an additional premium.
 
 
Change Of Control - D. When the ASSURED learns of a change in control (other than in an Investment
Notice To Company   Company), as set forth in Section 2(a) (9) of the Investment Company Act of
    1940,   the ASSURED shall within sixty (60) days give written notice to the
    COMPANY setting forth:
    (1 ) the names of the transferors and transferees (or the names of the beneficial
        owners if the voting securities are registered in another name),
    (2 ) the total number of voting securities owned by the transferors and the
        transferees (or the beneficial owners), both immediately before and after the
        transfer, and
    (3 ) the total number of outstanding voting securities.
    Failure to give the required notice shall result in termination of coverage for any
    loss involving a transferee, to be effective on the date of such change in control.
 
 
Court Costs And E. The COMPANY will indemnify the ASSURED for court costs and reasonable
Attorneys’ Fees   attorneys' fees incurred and paid by the ASSURED in defense, whether or not
    successful, whether or not fully litigated on the merits and whether or not settled,
    of any claim, suit or legal proceeding with respect to which the ASSURED would
    be entitled to recovery under this Bond. However, with respect to INSURING
    CLAUSE 1., this Section shall only apply in the event that:
    (1 ) an Employee admits to being guilty of Larceny or Embezzlement,
    (2 ) an Employee is adjudicated to be guilty of Larceny or Embezzlement, or

 

ICAP Bond (5-98)  
Form 17-02-1421 (Ed. 5-98) Page 6 of 19

 


 

General Agreements    
 
 
Court Costs And (3) in the absence of 1 or 2 above, an arbitration panel agrees, after a review of
Attorneys’ Fees   an agreed statement of facts between the COMPANY and the ASSURED,
(continued)   that an Employee would be found guilty of Larceny or Embezzlement if
such Employee were prosecuted.
 
  The ASSURED shall promptly give notice to the COMPANY of any such suit or
  legal proceeding and at the request of the COMPANY shall furnish copies of all
  pleadings and pertinent papers to the COMPANY. The COMPANY may, at its
  sole option, elect to conduct the defense of all or part of such legal proceeding.
  The defense by the COMPANY shall be in the name of the ASSURED through
  attorneys selected by the COMPANY. The ASSURED shall provide all reasonable
  information and assistance as required by the COMPANY for such defense.
 
  If the COMPANY declines to defend the ASSURED, no settlement without the
  prior written consent of the COMPANY nor judgment against the ASSURED shall
  determine the existence, extent or amount of coverage under this Bond.
 
  If the amount demanded in any such suit or legal proceeding is within the
  DEDUCTIBLE AMOUNT, if any, the COMPANY shall have no liability for court
  costs and attorney's fees incurred in defending all or part of such suit or legal
  proceeding.
 
  If the amount demanded in any such suit or legal proceeding is in excess of the
  LIMIT OF LIABILITY stated in ITEM 2. of the DECLARATIONS for the applicable
  INSURING CLAUSE, the COMPANY'S liability for court costs and attorney's fees
  incurred in defending all or part of such suit or legal proceedings is limited to the
  proportion of such court costs and attorney's fees incurred that the LIMIT OF
  LIABILITY stated in ITEM 2. of the DECLARATIONS for the applicable INSURING
  CLAUSE bears to the total of the amount demanded in such suit or legal
  proceeding.
 
  If the amount demanded is any such suit or legal proceeding is in excess of the
  DEDUCTIBLE AMOUNT, if any, but within the LIMIT OF LIABILITY stated in ITEM
  2. of the DECLARATIONS for the applicable INSURING CLAUSE, the
  COMPANY'S liability for court costs and attorney's fees incurred in defending all or
  part of such suit or legal proceedings shall be limited to the proportion of such
  court costs or attorney's fees that the amount demanded that would be payable
  under this Bond after application of the DEDUCTIBLE AMOUNT, bears to the total
  amount demanded.
 
  Amounts paid by the COMPANY for court costs and attorneys' fees shall be in
  addition to the LIMIT OF LIABILITY stated in ITEM 2. of the DECLARATIONS.

 

ICAP Bond (5-98)  
Form 17-02-1421 (Ed. 5-98) Page 7 of 19

 


 

Conditions and            
Limitations            
 
 
Definitions 1 . As used in this Bond:
      a. Computer System means a computer and all input, output, processing,
        storage, off-line media libraries, and communication facilities which are
        connected to the computer and which are under the control and supervision
        of the operating system(s) or application(s) software used by the ASSURED.
 
      b. Counterfeit means an imitation of an actual valid original which is intended
        to deceive and be taken as the original.
 
      c. Custodian means the institution designated by an Investment Company to
        maintain possession and control of its assets.
 
      d. Customer means an individual, corporate, partnership, trust customer,
        shareholder or subscriber of an Investment Company which has a written
        agreement with the ASSURED for Voice Initiated Funds Transfer
        Instruction.
 
      e. Employee means:
 
        (1 ) an officer of the ASSURED,
 
        (2 ) a natural person while in the regular service of the ASSURED at any of
            the ASSURED'S premises and compensated directly by the ASSURED
            through its payroll system and subject to the United States Internal
            Revenue Service Form W-2 or equivalent income reporting plans of
            other countries, and whom the ASSURED has the right to control and
            direct both as to the result to be accomplished and details and means
            by which such result is accomplished in the performance of such
            service,
 
        (3 ) a guest student pursuing studies or performing duties in any of the
ASSURED'S premises,
 
        (4 ) an attorney retained by the ASSURED and an employee of such
            attorney while either is performing legal services for the ASSURED,
 
        (5 ) a natural person provided by an employment contractor to perform
            employee duties for the ASSURED under the ASSURED'S supervision
            at any of the ASSURED'S premises,
 
        (6 ) an employee of an institution merged or consolidated with the
            ASSURED prior to the effective date of this Bond,
 
        (7 ) a director or trustee of the ASSURED, but only while performing acts
            within the scope of the customary and usual duties of any officer or
            other employee of the ASSURED or while acting as a member of any
            committee duly elected or appointed to examine or audit or have
            custody of or access to Property of the ASSURED, or

 

ICAP Bond (5-98)  
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Conditions and        
Limitations        
 
 
Definitions (8 ) each natural person, partnership or corporation authorized by written
(continued)     agreement with the ASSURED to perform services as electronic data
      processor of checks or other accounting records related to such checks but
      only while such person, partnership or corporation is actually performing
      such services and not:
 
      a. creating, preparing, modifying or maintaining the ASSURED'S
        computer software or programs, or
 
      b. acting as transfer agent or in any other agency capacity in issuing
        checks, drafts or securities for the ASSURED,
 
  (9 ) any partner, officer or employee of an investment advisor, an underwriter
      (distributor), a transfer agent or shareholder accounting recordkeeper, or an
      administrator, for an Investment Company while performing acts coming
      within the scope of the customary and usual duties of an officer or employee
      of an Investment Company or acting as a member of any committee duly
      elected or appointed to examine, audit or have custody of or access to
      Property of an Investment Company.
 
      The term Employee shall not include any partner, officer or employee of a
      transfer agent, shareholder accounting recordkeeper or administrator:
 
      a. which is not an "affiliated person" (as defined in Section 2(a) of the
        Investment Company Act of 1940) of an Investment Company or of
        the investment advisor or underwriter (distributor) of such Investment
        Company, or
 
      b. which is a "bank" (as defined in Section 2(a) of the Investment
Company Act of 1940).
 
        This Bond does not afford coverage in favor of the employers of
        persons as set forth in e. (4), (5) and (8) above, and upon payment to
        the ASSURED by the COMPANY resulting directly from Larceny or
        Embezzlement committed by any of the partners, officers or
        employees of such employers, whether acting alone or in collusion with
        others, an assignment of such of the ASSURED'S rights and causes of
        action as it may have against such employers by reason of such acts
        so committed shall, to the extent of such payment, be given by the
        ASSURED to the COMPANY, and the ASSURED shall execute all
        papers necessary to secure to the COMPANY the rights provided for
        herein.
 
      Each employer of persons as set forth in e.(4), (5) and (8) above and the
      partners, officers and other employees of such employers shall collectively
      be deemed to be one person for all the purposes of this Bond; excepting,
      however, the fifth paragraph of Section 13.
 
      Independent contractors not specified in e.(4), (5) or (8) above,
      intermediaries, agents, brokers or other representatives of the same general
      character shall not be considered Employees.

 

ICAP Bond (5-98)  
Form 17-02-1421 (Ed. 5-98) Page 9 of 19

 


 

Conditions and    
Limitations    
 
 
Definitions f. Forgery means the signing of the name of another natural person with the
(continued)   intent to deceive but does not mean a signature which consists in whole or in
    part of one's own name, with or without authority, in any capacity for any
    purpose.
  g. Investment Company means any investment company registered under the
    Investment Company Act of 1940 and listed under the NAME OF ASSURED
    on the DECLARATIONS.
 
  h. Items of Deposit means one or more checks or drafts drawn upon a
    financial institution in the United States of America.
 
  i. Larceny or Embezzlement means larceny or embezzlement as defined in
    Section 37 of the Investment Company Act of 1940.
 
  j. Property means money, revenue and other stamps; securities; including any
    note, stock, treasury stock, bond, debenture, evidence of indebtedness,
    certificate of deposit, certificate of interest or participation in any profit-
    sharing agreement, collateral trust certificate, preorganization certificate or
    subscription, transferable share, investment contract, voting trust certificate,
    certificate of deposit for a security, fractional undivided interest in oil, gas, or
    other mineral rights, any interest or instruments commonly known as a
    security under the Investment Company Act of 1940, any other certificate of
    interest or participation in, temporary or interim certificate for, receipt for,
    guarantee of, or warrant or right to subscribe to or purchase any of the
    foregoing; bills of exchange; acceptances; checks; withdrawal orders; money
    orders; travelers' letters of credit; bills of lading; abstracts of title; insurance
    policies, deeds, mortgages on real estate and/or upon chattels and interests
    therein; assignments of such policies, deeds or mortgages; other valuable
    papers, including books of accounts and other records used by the
    ASSURED in the conduct of its business (but excluding all electronic data
    processing records); and, all other instruments similar to or in the nature of
    the foregoing in which the ASSURED acquired an interest at the time of the
    ASSURED'S consolidation or merger with, or purchase of the principal
    assets of, a predecessor or which are held by the ASSURED for any
    purpose or in any capacity and whether so held gratuitously or not and
    whether or not the ASSURED is liable therefor.
  k. Relative means the spouse of an Employee or partner of the ASSURED
    and any unmarried child supported wholly by, or living in the home of, such
    Employee or partner and being related to them by blood, marriage or legal
    guardianship.
 
  l. Securities, documents or other written instruments means original
    (including original counterparts) negotiable or non-negotiable instruments, or
    assignments thereof, which in and of themselves represent an equitable
    interest, ownership, or debt and which are in the ordinary course of business
    transferable by delivery of such instruments with any necessary
    endorsements or assignments.

 

ICAP Bond (5-98)  
Form 17-02-1421 (Ed. 5-98) Page 10 of 19

 


 

Conditions and        
Limitations        
 
 
Definitions     m. Subsidiary means any organization that, at the inception date of this Bond,
(continued)       is named in the APPLICATION or is created during the BOND PERIOD and
        of which more than fifty percent (50%) of the outstanding securities or voting
        rights representing the present right to vote for election of directors is owned
        or controlled by the ASSURED either directly or through one or more of its
        subsidiaries.
 
      n. Transportation Company means any organization which provides its own
        or its leased vehicles for transportation or which provides freight forwarding
        or air express services.
 
      o. Voice Initiated Election means any election concerning dividend options
        available to Investment Company shareholders or subscribers which is
        requested by voice over the telephone.
 
      p. Voice Initiated Redemption means any redemption of shares issued by an
        Investment Company which is requested by voice over the telephone.
 
      q. Voice Initiated Funds Transfer Instruction means any Voice Initiated
        Redemption or Voice Initiated Election.
 
      For the purposes of these definitions, the singular includes the plural and the
      plural includes the singular, unless otherwise indicated.
 
 
General Exclusions - 2 . This bond does not directly or indirectly cover:
Applicable to All Insuring     a. loss not reported to the COMPANY in writing within sixty (60) days after
Clauses       termination of this Bond as an entirety;
 
      b. loss due to riot or civil commotion outside the United States of America and
        Canada, or any loss due to military, naval or usurped power, war or
        insurrection. This Section 2.b., however, shall not apply to loss which occurs
        in transit in the circumstances recited in INSURING CLAUSE 3., provided
        that when such transit was initiated there was no knowledge on the part of
        any person acting for the ASSURED of such riot, civil commotion, military,
        naval or usurped power, war or insurrection;
 
      c. loss resulting from the effects of nuclear fission or fusion or radioactivity;
 
      d. loss of potential income including, but not limited to, interest and dividends
        not realized by the ASSURED or by any customer of the ASSURED;
 
      e. damages of any type for which the ASSURED is legally liable, except
        compensatory damages, but not multiples thereof, arising from a loss
        covered under this Bond;
 
      f. costs, fees and expenses incurred by the ASSURED in establishing the
        existence of or amount of loss under this Bond, except to the extent covered
        under INSURING CLAUSE 11.;
 
      g. loss resulting from indirect or consequential loss of any nature;

 

ICAP Bond (5-98)  
Form 17-02-1421 (Ed. 5-98) Page 11 of 19

 


 

Conditions and              
Limitations              
 
 
General Exclusions -     h. loss resulting from dishonest acts by any member of the Board of Directors
Applicable to All Insuring       or Board of Trustees of the ASSURED who is not an Employee, acting
Clauses       alone or in collusion with others;
(continued)     i. loss, or that part of any loss, resulting solely from any violation by the
ASSURED or by any Employee:
        (1 ) of any law regulating:
            a. the issuance, purchase or sale of securities,
            b. securities transactions on security or commodity exchanges or
              the over the counter market,
            c. investment companies,
            d. investment advisors, or
        (2 ) of any rule or regulation made pursuant to any such law; or
      j. loss of confidential information, material or data;
      k. loss resulting from voice requests or instructions received over the
        telephone, provided however, this Section 2.k. shall not apply to INSURING
        CLAUSE 7. or 9.
 
 
Specific Exclusions - 3 . This Bond does not directly or indirectly cover:
Applicable To All Insuring     a. loss caused by an Employee, provided, however, this Section 3.a. shall not
Clauses Except Insuring       apply to loss covered under INSURING CLAUSE 2. or 3. which results
Clause 1.       directly from misplacement, mysterious unexplainable disappearance, or
damage or destruction of Property;
      b. loss through the surrender of property away from premises of the ASSURED
        as a result of a threat:
        (1 ) to do bodily harm to any natural person, except loss of Property in
            transit in the custody of any person acting as messenger of the
            ASSURED, provided that when such transit was initiated there was no
            knowledge by the ASSURED of any such threat, and provided further
            that this Section 3.b. shall not apply to INSURING CLAUSE 7., or
        (2 ) to do damage to the premises or Property of the ASSURED;
      c. loss resulting from payments made or withdrawals from any account
        involving erroneous credits to such account;
      d. loss involving Items of Deposit which are not finally paid for any reason
        provided however, that this Section 3.d. shall not apply to INSURING
        CLAUSE 10.;
      e. loss of property while in the mail;

 

ICAP Bond (5-98)  
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Conditions and                
Limitations                
 
 
Specific Exclusions -     f. loss resulting from the failure for any reason of a financial or depository
Applicable To All Insuring       institution, its receiver or other liquidator to pay or deliver funds or other
Clauses Except Insuring       Property to the ASSURED provided further that this Section 3.f. shall not
Clause 1.       apply to loss of Property resulting directly from robbery, burglary,
(continued)       misplacement, mysterious unexplainable disappearance, damage,
        destruction or removal from the possession, custody or control of the
        ASSURED.        
      g. loss of Property while in the custody of a Transportation Company,
        provided however, that this Section 3.g. shall not apply to INSURING
        CLAUSE 3.;        
      h. loss resulting from entries or changes made by a natural person with
        authorized access to a Computer System who acts in good faith on
        instructions, unless such instructions are given to that person by a software
        contractor or its partner, officer, or employee authorized by the ASSURED to
        design, develop, prepare, supply, service, write or implement programs for
        the ASSURED's Computer System; or    
      i. loss resulting directly or indirectly from the input of data into a Computer
        System terminal, either on the premises of the customer of the ASSURED
        or under the control of such a customer, by a customer or other person who
        had authorized access to the customer's authentication mechanism.
 
 
Specific Exclusions - 4 . This bond does not directly or indirectly cover:    
Applicable To All Insuring     a. loss resulting from the complete or partial non-payment of or default on any
Clauses Except Insuring       loan whether such loan was procured in good faith or through trick, artifice,
Clauses 1., 4., And 5.       fraud or false pretenses; provided, however, this Section 4.a. shall not apply
        to INSURING CLAUSE 8.;      
 
      b. loss resulting from forgery or any alteration;    
 
      c. loss involving a counterfeit provided, however, this Section 4.c. shall not
        apply to INSURING CLAUSE 5. or 6.    
 
 
Limit Of Liability/Non- 5 . At all times prior to termination of this Bond, this Bond shall continue in force for
Reduction And Non-     the limit stated in the applicable sections of ITEM 2. of the DECLARATIONS,
Accumulation Of Liability     notwithstanding any previous loss for which the COMPANY may have paid or be
      liable to pay under this Bond provided, however, that the liability of the COMPANY
      under this Bond with respect to all loss resulting from:  
 
      a. any one act of burglary, robbery or hold-up, or attempt thereat, in which no
        Employee is concerned or implicated, or    
 
      b. any one unintentional or negligent act on the part of any one person
        resulting in damage to or destruction or misplacement of Property, or
 
      c. all acts, other than those specified in a. above, of any one person, or

 

ICAP Bond (5-98)  
Form 17-02-1421 (Ed. 5-98) Page 13 of 19

 


 

Conditions and        
Limitations        
 
 
Limit Of Liability/Non-     d. any one casualty or event other than those specified in a., b., or c. above,
Reduction And Non-     shall be deemed to be one loss and shall be limited to the applicable LIMIT OF
Accumulation Of Liability     LIABILITY stated in ITEM 2. of the DECLARATIONS of this Bond irrespective of
(continued)     the total amount of such loss or losses and shall not be cumulative in amounts
      from year to year or from period to period.
 
      All acts, as specified in c. above, of any one person which
 
      i. directly or indirectly aid in any way wrongful acts of any other person or
        persons, or
 
      ii. permit the continuation of wrongful acts of any other person or persons
 
      whether such acts are committed with or without the knowledge of the wrongful
      acts of the person so aided, and whether such acts are committed with or without
      the intent to aid such other person, shall be deemed to be one loss with the
      wrongful acts of all persons so aided.
 
 
Discovery 6 . This Bond applies only to loss first discovered by an officer of the ASSURED
      during the BOND PERIOD. Discovery occurs at the earlier of an officer of the
      ASSURED being aware of:
 
      a. facts which may subsequently result in a loss of a type covered by this Bond,
        or
 
      b. an actual or potential claim in which it is alleged that the ASSURED is liable
        to a third party,
 
      regardless of when the act or acts causing or contributing to such loss occurred,
      even though the amount of loss does not exceed the applicable DEDUCTIBLE
      AMOUNT, or the exact amount or details of loss may not then be known.
 
 
Notice To Company - 7 . a. The ASSURED shall give the COMPANY notice thereof at the earliest
Proof - Legal Proceedings       practicable moment, not to exceed sixty (60) days after discovery of loss, in
Against Company       an amount that is in excess of 50% of the applicable DEDUCTIBLE
        AMOUNT, as stated in ITEM 2. of the DECLARATIONS.
 
      b. The ASSURED shall furnish to the COMPANY proof of loss, duly sworn to,
        with full particulars within six (6) months after such discovery.
 
      c. Securities listed in a proof of loss shall be identified by certificate or bond
        numbers, if issued with them.
 
      d. Legal proceedings for the recovery of any loss under this Bond shall not be
        brought prior to the expiration of sixty (60) days after the proof of loss is filed
        with the COMPANY or after the expiration of twenty-four (24) months from
        the discovery of such loss.
 
      e. This Bond affords coverage only in favor of the ASSURED. No claim, suit,
        action or legal proceedings shall be brought under this Bond by anyone
        other than the ASSURED.

 

ICAP Bond (5-98)  
Form 17-02-1421 (Ed. 5-98) Page 14 of 19

 


 

Conditions and        
Limitations        
 
 
Notice To Company -     f. Proof of loss involving Voice Initiated Funds Transfer Instruction shall
Proof - Legal Proceedings       include electronic recordings of such instructions.
Against Company        
(continued)        
 
 
Deductible Amount 8 . The COMPANY shall not be liable under any INSURING CLAUSES of this Bond
      on account of loss unless the amount of such loss, after deducting the net amount
      of all reimbursement and/or recovery obtained or made by the ASSURED, other
      than from any Bond or policy of insurance issued by an insurance company and
      covering such loss, or by the COMPANY on account thereof prior to payment by
      the COMPANY of such loss, shall exceed the DEDUCTIBLE AMOUNT set forth in
      ITEM 3. of the DECLARATIONS, and then for such excess only, but in no event
      for more than the applicable LIMITS OF LIABILITY stated in ITEM 2. of the
      DECLARATIONS.
 
      There shall be no deductible applicable to any loss under INSURING CLAUSE 1.
      sustained by any Investment Company.
 
 
Valuation 9 . BOOKS OF ACCOUNT OR OTHER RECORDS
      The value of any loss of Property consisting of books of account or other records
      used by the ASSURED in the conduct of its business shall be the amount paid by
      the ASSURED for blank books, blank pages, or other materials which replace the
      lost books of account or other records, plus the cost of labor paid by the
      ASSURED for the actual transcription or copying of data to reproduce such books
      of account or other records.
 
      The value of any loss of Property other than books of account or other records
      used by the ASSURED in the conduct of its business, for which a claim is made
      shall be determined by the average market value of such Property on the
      business day immediately preceding discovery of such loss provided, however,
      that the value of any Property replaced by the ASSURED with the consent of the
      COMPANY and prior to the settlement of any claim for such Property shall be the
actual market value at the time of replacement.
 
      In the case of a loss of interim certificates, warrants, rights or other securities, the
      production of which is necessary to the exercise of subscription, conversion,
      redemption or deposit privileges, the value of them shall be the market value of
      such privileges immediately preceding their expiration if said loss is not discovered
      until after their expiration. If no market price is quoted for such Property or for
      such privileges, the value shall be fixed by agreement between the parties.
      OTHER PROPERTY
 
      The value of any loss of Property, other than as stated above, shall be the actual
      cash value or the cost of repairing or replacing such Property with Property of
      like quality and value, whichever is less.

 

ICAP Bond (5-98)  
Form 17-02-1421 (Ed. 5-98) Page 15 of 19

 


 

Conditions and        
Limitations        
(continued)        
 
 
Securities Settlement 10 . In the event of a loss of securities covered under this Bond, the COMPANY may,
      at its sole discretion, purchase replacement securities, tender the value of the
      securities in money, or issue its indemnity to effect replacement securities.
 
      The indemnity required from the ASSURED under the terms of this Section
      against all loss, cost or expense arising from the replacement of securities by the
      COMPANY'S indemnity shall be:
 
      a. for securities having a value less than or equal to the applicable
        DEDUCTIBLE AMOUNT - one hundred (100%) percent;
 
      b. for securities having a value in excess of the DEDUCTIBLE AMOUNT but
        within the applicable LIMIT OF LIABILITY - the percentage that the
        DEDUCTIBLE AMOUNT bears to the value of the securities;
 
      c. for securities having a value greater than the applicable LIMIT OF LIABILITY
        - the percentage that the DEDUCTIBLE AMOUNT and portion in excess of
        the applicable LIMIT OF LIABILITY bears to the value of the securities.
 
      The value referred to in Section 10.a., b., and c. is the value in accordance with
      Section 9, Valuation, regardless of the value of such securities at the time the loss
under the COMPANY'S indemnity is sustained.
 
      The COMPANY is not required to issue its indemnity for any portion of a loss of
      securities which is not covered by this Bond; however, the COMPANY may do so
      as a courtesy to the ASSURED and at its sole discretion.
 
      The ASSURED shall pay the proportion of the Company's premium charge for the
      Company's indemnity as set forth in Section 10.a., b., and c. No portion of the
      LIMIT OF LIABILITY shall be used as payment of premium for any indemnity
      purchased by the ASSURED to obtain replacement securities.
 
 
Subrogation - Assignment 11.   In the event of a payment under this Bond, the COMPANY shall be subrogated to
Recovery     all of the ASSURED'S rights of recovery against any person or entity to the extent
      of such payment. On request, the ASSURED shall deliver to the COMPANY an
      assignment of the ASSURED'S rights, title and interest and causes of action
      against any person or entity to the extent of such payment.
 
      Recoveries, whether effected by the COMPANY or by the ASSURED, shall be
      applied net of the expense of such recovery in the following order:
 
      a. first, to the satisfaction of the ASSURED'S loss which would otherwise have
        been paid but for the fact that it is in excess of the applicable LIMIT OF
        LIABILITY,
 
      b. second, to the COMPANY in satisfaction of amounts paid in settlement of
        the ASSURED'S claim,
 
      c. third, to the ASSURED in satisfaction of the applicable DEDUCTIBLE
        AMOUNT, and

 

ICAP Bond (5-98)  
Form 17-02-1421 (Ed. 5-98) Page 16 of 19

 


 

Conditions and        
Limitations        
 
 
Subrogation - Assignment     d. fourth, to the ASSURED in satisfaction of any loss suffered by the
Recovery       ASSURED which was not covered under this Bond.
(continued)     Recovery from reinsurance or indemnity of the COMPANY shall not be deemed a
      recovery under this section.
 
 
Cooperation Of Assured 12 . At the COMPANY'S request and at reasonable times and places designated by
      the COMPANY, the ASSURED shall:
 
      a. submit to examination by the COMPANY and subscribe to the same under
        oath,
 
      b. produce for the COMPANY'S examination all pertinent records, and
 
      c. cooperate with the COMPANY in all matters pertaining to the loss.
 
      The ASSURED shall execute all papers and render assistance to secure to the
      COMPANY the rights and causes of action provided for under this Bond. The
      ASSURED shall do nothing after loss to prejudice such rights or causes of action.
 
 
Termination 13 . If the Bond is for a sole ASSURED, it shall not be terminated unless written notice
      shall have been given by the acting party to the affected party and to the
      Securities and Exchange Commission, Washington, D.C., not less than sixty (60)
      days prior to the effective date of such termination.
 
      If the Bond is for a joint ASSURED, it shall not be terminated unless written notice
      shall have been given by the acting party to the affected party, and by the
      COMPANY to all ASSURED Investment Companies and to the Securities and
      Exchange Commission, Washington, D.C., not less than sixty (60) days prior to
      the effective date of such termination.
 
      This Bond will terminate as to any one ASSURED, other than an Investment
      Company:
 
      a. immediately on the taking over of such ASSURED by a receiver or other
        liquidator or by State or Federal officials, or
 
      b. immediately on the filing of a petition under any State or Federal statute
        relative to bankruptcy or reorganization of the ASSURED, or assignment for
        the benefit of creditors of the ASSURED, or
 
      c. immediately upon such ASSURED ceasing to exist, whether through merger
        into another entity, disposition of all of its assets or otherwise.
 
      The COMPANY shall refund the unearned premium computed at short rates in
      accordance with the standard short rate cancellation tables if terminated by the
      ASSURED or pro rata if terminated for any other reason.

 

ICAP Bond (5-98)  
Form 17-02-1421 (Ed. 5-98) Page 17 of 19

 


 

Conditions and        
Limitations        
 
 
Termination     If any partner, director, trustee, or officer or supervisory employee of an
(continued)     ASSURED not acting in collusion with an Employee learns of any dishonest act
      committed by such Employee at any time, whether in the employment of the
      ASSURED or otherwise, whether or not such act is of the type covered under this
      Bond, and whether against the ASSURED or any other person or entity, the
      ASSURED:
 
      a. shall immediately remove such Employee from a position that would enable
        such Employee to cause the ASSURED to suffer a loss covered by this
        Bond; and
 
      b. within forty-eight (48) hours of learning that an Employee has committed
        any dishonest act, shall notify the COMPANY, of such action and provide full
particulars of such dishonest act.
 
      The COMPANY may terminate coverage as respects any Employee sixty (60)
      days after written notice is received by each ASSURED Investment Company
      and the Securities and Exchange Commission, Washington, D.C. of its desire to
      terminate this Bond as to such Employee.
 
 
Other Insurance 14 . Coverage under this Bond shall apply only as excess over any valid and collectible
      insurance, indemnity or suretyship obtained by or on behalf of:
 
      a. the ASSURED,
 
      b. a Transportation Company, or
 
      c. another entity on whose premises the loss occurred or which employed the
        person causing the loss or engaged the messenger conveying the Property
        involved.
 
 
Conformity 15 . If any limitation within this Bond is prohibited by any law controlling this Bond's
      construction, such limitation shall be deemed to be amended so as to equal the
      minimum period of limitation provided by such law.
 
 
Change or Modification 16 . This Bond or any instrument amending or affecting this Bond may not be changed
      or modified orally. No change in or modification of this Bond shall be effective
      except when made by written endorsement to this Bond signed by an authorized
      representative of the COMPANY.
 
      If this Bond is for a sole ASSURED, no change or modification which would
      adversely affect the rights of the ASSURED shall be effective prior to sixty (60)
      days after written notice has been furnished to the Securities and Exchange
      Commission, Washington, D.C., by the acting party.

 

ICAP Bond (5-98)  
Form 17-02-1421 (Ed. 5-98) Page 18 of 19

 


 

Conditions And  
Limitations  
 
 
Change or Modification If this Bond is for a joint ASSURED, no charge or modification which would
(continued) adversely affect the rights of the ASSURED shall be effective prior to sixty (60)
  days after written notice has been furnished to all insured Investment Companies
  and to the Securities and Exchange Commission, Washington, D.C., by the
  COMPANY.

 

ICAP Bond (5-98)  
Form 17-02-1421 (Ed. 5-98) Page 19 of 19

 


 

POLICYHOLDER
DISCLOSURE NOTICE OF
TERRORISM INSURANCE COVERAGE
(for policies with no terrorism exclusion or sublimit)
Insuring Company: FEDERAL INSURANCE
COMPANY
You are hereby notified that, under the Terrorism Risk Insurance Act (the “Act”), this
policy makes available to you insurance for losses arising out of certain acts of terrorism.
Terrorism is defined as any act certified by the Secretary of the Treasury of the United
States, to be an act of terrorism; to be a violent act or an act that is dangerous to human
life, property or infrastructure; to have resulted in damage within the United States,
or outside the United States in the case of an air carrier or vessel or the premises of a
United States Mission; and to have been committed by an individual or individuals as part
of an effort to coerce the civilian population of the United States or to influence the policy
or affect the conduct of the United States Government by coercion.
 
You should know that the insurance provided by your policy for losses caused by acts of
terrorism is partially reimbursed by the United States under the formula set forth in the
Act. Under this formula, the United States pays 85% of covered terrorism losses that
exceed the statutorily established deductible to be paid by the insurance company
providing the coverage. Beginning in 2016, the Federal share will be reduced by 1% per
year until it reaches 80%, where it will remain.
 
However, if aggregate insured losses attributable to terrorist acts certified under the Act
exceed $100 billion in a calendar year, the Treasury shall not make any payment for
any portion of the amount of such losses that exceeds $100 billion.

 

10-02-1281 (Ed. 03/2015)


 

If aggregate insured losses attributable to terrorist acts certified under the Act exceed
$100 billion in a calendar year and we have met our insurer deductible under the Act,
we shall not be liable for the payment of any portion of the amount of such losses that
exceeds $100 billion, and in such case insured losses up to that amount are subject to
pro rata allocation in accordance with procedures established by the Secretary of the
Treasury.
 
The portion of your policy’s annual premium that is attributable to insurance for such acts
of terrorism is: $ -0-.
 
If you have any questions about this notice, please contact your agent or broker.

 

10-02-1281 (Ed. 03/2015)


 

IMPORTANT NOTICE TO POLICYHOLDERS
 
 
 
All of the members of the Chubb Group of Insurance companies doing business in the United
States (hereinafter “Chubb”) distribute their products through licensed insurance brokers and agents
(“producers”). Detailed information regarding the types of compensation paid by Chubb to producers on
US insurance transactions is available under the Producer Compensation link located at the bottom of the
page at www.chubb.com, or by calling 1-866-588-9478. Additional information may be available from your
producer.
 
Thank you for choosing Chubb.

 

10-02-1295 (ed. 6/2007)


 

Important Notice:
 
 
 
The SEC Requires Proof of Your Fidelity Insurance Policy
 
Your company is now required to file an electronic copy of your fidelity insurance coverage
(Chubb’s ICAP Bond policy) to the Securities and Exchange Commission (SEC), according to
rules adopted by the SEC on June 12, 2006.
 
Chubb is in the process of providing your agent/broker with an electronic copy of your insurance
policy as well as instructions on how to submit this proof of fidelity insurance coverage to the
SEC. You can expect to receive this information from your agent/broker shortly.
 
The electronic copy of your policy is provided by Chubb solely as a convenience and does not
affect the terms and conditions of coverage as set forth in the paper policy you receive by mail.
The terms and conditions of the policy mailed to you, which are the same as those set forth in
the electronic copy, constitute the entire agreement between your company and Chubb.
 
If you have any questions, please contact your agent or broker.

 

Form 14-02-12160 (ed. 7/2006)


 

Policyholder Information Notice
 
 
IMPORTANT NOTICE AVISO IMPORTANTE
 
 
To obtain information or make a complaint: Para obtener información o para someter una
  queja:
 
 
You may call Chubb's toll-free telephone Usted puede llamar al número de teléfono gratis de
number for information or to make a complaint Chubb's para información o para someter una
at queja al
 
 
1-800-36-CHUBB 1-800-36-CHUBB
 
You may contact the Texas Department of Puede comunicarse con el Departamento de
Insurance to obtain the information on Seguros de Texas para obtener información
companies, coverages, rights or complaints at acerca de compañias coberturas, derechos o
  quejas al
 
(512) 676-6000 or (800) 578-4677 (512) 676-6000 or (800) 578-4677
 
You may write the Texas Department of Puede escribir al Departamento de Seguros de
Insurance Texas
 
P.O. Box 149104 P.O. Box 149104
Austin, TX 78714-9104 Austin TX 78714-9104
Fax # (512) 475-1771 FAX # (512) 475-1771
 
 
You may email the Texas Department of Puede correo electrónico Departamento de
Insurance at: Seguros de Texas al:
 
consumerprotection@tdi.texas.gov consumerprotection@tdi.texas.gov
 
You may visit the Texas Department of Puede visitar el Departamento de Seguros de
Insurance’s website at: Texas en el sitio web de:
 
www.tdi.texas.gov www.tdi.texas.gov
 
PREMIUM OR CLAIM DISPUTES DISPUTAS SOBRE PRIMAS O RECLAMOS:
 
Should you have a dispute concerning your Si tiene una disputa concerniente a su prima o a
premium or about a claim you should contact un reclamo, debe comunicarse con el agente
the agent first. If the dispute is not resolved, primero. Si no se resueve la disputa, puede
you may contact the Texas Department of entonces comunicarse con el departamento (TDI).
Insurance.  
 
ATTACH THIS NOTICE TO YOUR POLICY: UNA ESTE AVISO A SU POLIZA:
 
This notice is for information only and does not Este aviso es solo para proposito de información y
become a part or condition of the attached no se convierte en parte o condicion del
document. documento adjunto.

 

99-10-0299 (01/2015)


 

  ENDORSEMENT/RIDER
 
Effective date of  
this endorsement/rider: November 7, 2016 FEDERAL INSURANCE COMPANY
  Endorsement/Rider No. 1
  To be attached to and
  form a part of Policy No. 82341048
 
 
Issued to: STELLUS CAPITAL INVESTMENT CORPORATION
COMPLIANCE WITH APPLICABLE TRADE SANCTION LAWS
It is agreed that this insurance does not apply to the extent that trade or economic sanctions or other similar laws or
regulations prohibit the coverage provided by this insurance.
 
The title and any headings in this endorsement/rider are solely for convenience and form no part of the terms and
conditions of coverage.  
All other terms, conditions and limitations of this Policy shall remain unchanged.

 

14-02-9228 (2/2010)

Page 1


 

FEDERAL INSURANCE COMPANY
Endorsement No: 2
Bond Number: 82341048
 
NAME OF ASSURED: STELLUS CAPITAL INVESTMENT CORPORATION  
TEXAS AMENDATORY ENDORSEMENT
It is agreed that this Bond is amended by adding an additional paragraph to Section 13.,Termination, as
follows:  
"The COMPANY may not terminate or refuse to renew this Bond solely because the ASSURED is an
elected official."  
 
 
 
 
This Endorsement applies to loss discovered after 12:01 a.m. on November 7, 2016.
 
ALL OTHER TERMS AND CONDITIONS OF THIS BOND REMAIN UNCHANGED.

 

Date: November 4, 2016


State Amendatory-General Use Form 17-02-1429 (Ed. 1-97)


 

        FEDERAL INSURANCE COMPANY
 
        Endorsement No. 3  
 
        Bond Number: 82341048  
 
NAME OF ASSURED: STELLUS CAPITAL INVESTMENT CORPORATION    
 
 
 
REVISE ITEM 2. ENDORSEMENT
 
It is agreed that this Bond is amended by deleting ITEM 2. in its entirety on the DECLARATIONS and
substituting the following:        
 
ITEM 2. LIMITS OF LIABILITY-DEDUCTIBLE AMOUNTS:        
 
If "Not Covered" is inserted below opposite any specified INSURING CLAUSE, such INSURING CLAUSE
and any other reference to such INSURING CLAUSE in this Bond shall be deemed to be deleted. There
shall be no deductible applicable to any loss under INSURING CLAUSE 1 sustained by any
Investment Company.        
 
      SINGLE LOSS DEDUCTIBLE
INSURING CLAUSE LIMIT OF LIABILITY AMOUNT
1 . Employee $ 1,000,000 $ 0
2 . On Premises $ 1,000,000 $ 10,000
3 . In Transit $ 1,000,000 $ 10,000
4 . Forgery or Alteration $ 1,000,000 $ 10,000
5 . Extended Forgery $ 1,000,000 $ 10,000
6 . Counterfeit Money $ 1,000,000 $ 10,000
7 . Threats to Person $ 1,000,000 $ 10,000
8 . Computer System $ 1,000,000 $ 10,000
9 . Voice Initiated Funds Transfer Instruction $ 1,000,000 $ 10,000
10 . Uncollectible Items of Deposit $ 1,000,000 $ 10,000
11 . Audit Expense $ 25,000 $ 0
12 . Claims Expense $ 25,000 $ 0
 
 
This Endorsement applies to loss discovered after 12:01 a.m. on November 7, 2016.    
 
ALL OTHER TERMS AND CONDITIONS OF THIS BOND REMAIN UNCHANGED.    

 

Date: November 4, 2016


 

      FEDERAL INSURANCE COMPANY
      Endorsement No.: 4
      Bond Number: 82341048
 
 
NAME OF ASSURED: STELLUS CAPITAL INVESTMENT CORPORATION  
AUTOMATIC ACQUISITION PERCENTAGE THRESHOLD ENDORSEMENT
It is agreed that this Bond is amended by deleting in its entirety General Agreement C., Additional Offices
or Employees-Consolidation, Merger or Purchase or Acquisition of Assets or Liabilities-Notice To
Company, and substituting the following:  
C. Additional Offices or Employees-Consolidation, Merger or Purchase or Acquisition Of Assets or
  Liabilities-Notice to Company  
  If the ASSURED, other than an Investment Company, while this Bond is in force, merges or
  consolidates with, or purchases or acquires assets or liabilities of another institution, the ASSURED
  shall not have the coverage afforded under this Bond for loss which has:  
  (1 ) occurred or will occur on premises,  
  (2 ) been caused or will be caused by an employee, or  
  (3 ) arisen or will arise out of the assets or liabilities,  
  of such institution, unless the ASSURED:  
  a.   gives the COMPANY written notice of the proposed consolidation, merger or purchase or
      acquisition of assets or liabilities prior to the proposed effective date of such action, and
  b.   obtains the written consent of the COMPANY to extend some or all of the coverage provided
      by this Bond to such additional exposure, and  
  c.   on obtaining such consent, pays to the COMPANY an additional premium.
  Notwithstanding anything stated above to the contrary, the COMPANY hereby agrees to provide
  coverage which shall be effective on the date of acquisition under this Bond for those acquired
  institutions in which the ASSURED owns greater than fifty percent (50%) of the voting stock or voting
  rights either directly or through one or more of its subsidiaries for the remainder of the BOND
  PERIOD, with no additional premium, provided the acquired institution meets all of the following
  conditions:  
  i.   the assets shall not exceed fifteen percent (15%) of the ASSURED’S assets,
  ii.   there shall be neither any paid nor pending Bond claim for the three (3) year period prior to the
      date of acquisition, and  
  iii.   the ASSURED is not aware of any disciplinary action or proceeding by State or Federal
      officials involving the acquired institution as of the date of acquisition.

 

ICAP Bond  
Form 17-02-6247 (Ed. 3-04) Page 1

 


 

The COMPANY further agrees that as respects any acquisition that involves a State or Federal
regulatory assisted acquisition or assumption of assets and/or liabilities, coverage shall be provided
under this Bond for the remainder of the BOND PERIOD as long as conditions i. and ii. above are
met. As respects such acquisition or assumption of assets and/or liabilities, coverage applies only to
a Single Loss fully sustained by the ASSURED on or after the date of such acquisition or
assumption. All of the circumstances, conditions or acts causing or contributing to a Single Loss
must occur on or after the date of such acquisition or assumption for coverage to apply regardless of
the time such loss is discovered by the ASSURED.
 
 
 
 
This Endorsement applies to loss discovered after 12:01 a.m. on November 7, 2016.
 
 
 
ALL OTHER TERMS AND CONDITIONS OF THIS BOND REMAIN UNCHANGED.

 

Date: November 4, 2016


ICAP Bond  
Form 17-02-6247 (Ed. 3-04) Page 2

 


 

        FEDERAL INSURANCE COMPANY
        Endorsement No.: 5
        Bond Number: 82341048
 
 
NAME OF ASSURED: STELLUS CAPITAL INVESTMENT CORPORATION  
CLAIMS EXPENSE ENDORSEMENT
It is agreed that this Bond is amended as follows:  
1 . By adding the following INSURING CLAUSE:  
    12. Claims Expense  
    Reasonable expense incurred by the ASSURED, solely for independent firms or individuals to
    determine the amount of loss where:  
    (1 ) the loss is covered under the Bond, and  
    (2 ) the loss is in excess of the applicable DEDUCTIBLE AMOUNT.  
2 . Under General Exclusions-Applicable To All Insuring Clauses, Section 2.f. does not apply to loss
    covered under this INSURING CLAUSE.  
 
 
 
This Endorsement applies to loss discovered after 12:01 a.m. on November 7, 2016.
 
ALL OTHER TERMS AND CONDITIONS OF THIS BOND REMAIN UNCHANGED.

 

Date: November 4, 2016


ICAP Bond

Form 17-02-6282 (Ed. 11-04)


 

        ENDORSEMENT/RIDER
Effective date of    
this endorsement/rider: November 7, 2016 FEDERAL INSURANCE COMPANY
      Endorsement/Rider No. 6
      To be attached to and  
      form a part of Bond No. 82341048
 
 
Issued to: STELLUS CAPITAL INVESTMENT CORPORATION  
    DELETING VALUATION-OTHER PROPERTY AND AMENDING CHANGE OR MODIFICATION
ENDORSEMENT
In consideration of the premium charged, it is agreed that this Bond is amended as follows:
1 . The paragraph titled Other Property in Section 9, Valuation, is deleted in its entirety.
2 . The third paragraph in Section 16, Change or Modification, is deleted in its entirety and replaced with
    the following:    
    If this Bond is for a joint ASSURED, no change or modification which would adversely affect the
    rights of the ASSURED shall be effective prior to sixty (60) days after written notice has been
    furnished to all insured Investment Companies and the Securities and Exchange Commission,
    Washington, D.C., by the COMPANY.    
 
 
The title and any headings in this endorsement/rider are solely for convenience and form no part of the
terms and conditions of coverage.    
All other terms, conditions and limitations of this Bond shall remain unchanged.  

 

17-02-2437 (12/2006) rev.

Page 1


 

      ENDORSEMENT/RIDER
Effective date of    
this endorsement/rider: November 7, 2016 FEDERAL INSURANCE COMPANY
    Endorsement/Rider No. 7
    To be attached to and  
    form a part of Bond No. 82341048
Issued to: STELLUS CAPITAL INVESTMENT CORPORATION  
 
AMENDED NOTICE ENDORSEMENT
It is agreed Section 7., Notice to Company-Proof-Legal Proceedings Against Company, is amended by deleting in
its entirety paragraph a. and substituting the following:  
a. The ASSURED shall give the COMPANY notice thereof at the earliest practicable moment, not to
  exceed ninety (90) days after discovery of loss, in an amount that is in excess of 50% of the applicable
  DEDUCTIBLE AMOUNT, as stated in ITEM 2. of the DECLARATIONS.  
 
The title and any headings in this endorsement/rider are solely for convenience and form no part of the terms
and conditions of coverage.    
All other terms, conditions and limitations of this Bond shall remain unchanged.

 

14-02-12867 (02/2007)

Page 1