Prospect Energy Corp 40-17G 10-5-2006
Prospect
Energy Corporation
SEC
File No. 814-00659
Filing
of Fidelity Bond Pursuant to Rule 17g-l
On
Behalf
of Prospect Energy Corporation (the "Corporation"), please find attached the
following documents pursuant to Rule 17g-l under the Investment Company Act
of
1940 (the "1940 Act"):
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(i)
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a
copy of the Corporation's blanket bond and binder for the period
July 30,
2006 to July 30, 2007;
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(ii)
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a
copy of the resolutions of a majority of the board of directors of
the
Corporation who are not "interested persons" (as defined in the 1940
Act)
approving the form and amount of the
bond;
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(iii)
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proof
of premium payment by the Corporation for the period July 30, 2006
to July
30, 2007.
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National
Union Fire Insurance Company of Pittsburgh,
Pa.
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175
Water Street
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New
York, NY 10038
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A
member company of
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(212)
770-7000
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American
International Group, Inc.
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BINDER
OF INSURANCE CONFIRMATION LETTER
August
21, 2006
JOHN
MACKO
AON
RISK
SERVICES INC OF NY
55
EAST
52ND STREET
NEW
YORK,
NY 10055-4725
RE:
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PROSPECT
ENERGY CORPORATION LLC
Investment
Company Blanket Bond
Tab#:
7314991, Submission #: 470915360
Policy#:
006734472
Replacement
of Policy # 004932820
Policy
Period Effective Date From: 07/30/2006 To 07/30/2007
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Dear
John:
On
behalf
of National Union Fire insurance Company of Pittsburgh, Pa, (hereinafter
"Insurer"), I am
pleased to confirm the binding of coverage in accordance with our agreement
as
set forth below
and
subject to the conditions set forth herein. Please review said Binder for
accuracy and contact
the Insurer prior
to the effective date of
policy
coverage of any inaccuracy(ies) found within
the issued Binder. If the Insurer does not hear from you prior to the effective
date of policy
coverage it will be understood that the Binder has been accepted as an accurate
description
of the agreed upon terms of coverage.
***IMPORTANT
POLICY ISSUANCE VERIFICATION***
A
policy
will be issued with the name and address of the insured exactly as referenced
in
the "Policy
Information" Section of this Binder. If this information is inaccurate, please
advise us immediately.
POLICY
INFORMATION
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INSURED:
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PROSPECT
ENERGY CORPORATION LLC
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INSURED'S
ADDRESS:
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10
EAST 40TH STREET
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NEW
YORK, NY 10016
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TYPE
OF POLICY:
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Investment
Company Blanket Bond
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BASIC
FORM:
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INSURANCE
COMPANY:
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National
Union Fire Insurance Company of Pittsburgh, Pa.
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POLICY
NUMBER:
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006734472
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EFFECTIVE
DATE:
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07/30/2006
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EXPIRATION
DATE 7/30/2007
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LIMIT
OF LIABILITY:
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$1,000,000
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RETENTION:
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$10,000
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OTHER
TERMS:
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Per
Insurer Quote/Indication Letter dated 08/16/2006 except as indicated
below.
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PREMIUM:
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$4,500
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COMMISSION:
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15.00%
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Important
Conditions Of Binder: See
Below
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Coverages
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Limit
of Liability
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Deductible
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Insuring
Agreement A - Fidelity
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$1,000,000
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$10,000
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Insuring
Agreement B - Audit Expense
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$100,000
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$5,000
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Insuring
Agreement C - On Premises
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$1,000,000
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$10,000
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Insuring
Agreement D - In Transit
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$1,000,000
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$10,000
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Insuring
Agreement E - Forgery or Alteration
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$1,000,000
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$10,000
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Insuring
Agreement F - Securities
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$1,000,000
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$10,000
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Insuring
Agreement G - Counterfeit Currency
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$1,000,000
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$10,000
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Insuring
Agreement H - Stop Payment
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$100,000
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$5,000
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Insuring
Agreement I - Uncollectible Items of Deposit
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$100,000
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$5,000
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Insuring
Agreement J - Computer Systems
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$1,000,000
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$10,000
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Insuring
Agreement K - Voice Initiated Transfer Fraud
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$1,000,000
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$10,000
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*No
Deductible shall apply under Insuring Agreement A for Registered Management
Investment Companies.
ENDORSEMENTS
The
following riders will be added to the basic policy:
1.
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FORMS
INDEX ENDORSEMENT
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2.
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COVERAGE
TERRITORY ENDORSEMENT (OFAC)
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CONDITIONS
OF BINDER
When
signed by the Insurer, the coverage described above is in effect from 12:01
AM
of the Effective
Date listed above to 12:01 AM of the Expiration Date listed above, pursuant
to
the terms,
conditions and exclusions of the policy form listed above, any policy
endorsements described
above, and any modifications of such terms as described in this Binder section.
Unless otherwise
indicated, this Binder may be canceled prior to the Effective Date by the
Insured, or by the
Broker on the behalf of the Insured, by written notice to the Insurer or by
the
surrender of this
Binder stating when thereafter such cancellation shall be effective. Unless
otherwise indicated,
this Binder may be canceled by the Insurer prior to the Effective Date by
sending written
notice to the Insured at the address shown above stating when, not less than
thirty days thereafter,
such cancellation shall be effective. Unless otherwise indicated, this Binder
may be canceled by the Insurer or by the Insured on or after the Effective
Date
in the same manner and upon
the
same terms and conditions applicable to cancellation of the policy form listed
above.Issuance by the Insurer and acceptance by or on the behalf of the Insured
of the policy shall
render this Binder void except as indicated below.
A
condition precedent to coverage afforded by this Binder is that no material
change in the risk occurs
and no submission is made to the Insurer of a claim or circumstances that might
give rise to
a
claim between the date of this Binder indicated above and the Effective
Date.
Please
note this Binder contains only a general description of coverages provided.
For
a detailed description
of the terms of a policy you must refer to the policy itself and the
endorsements bound
herein.
PREMIUM
PAYMENT
Our
accounting procedures require that payment be remitted within 30 days of the
effective date of
coverage or 15 days from the billing date, whichever is later.
We
appreciate your compliance with this procedure.
We
appreciate your business and hope that we can be of further service to you
in
the future.
Sincerely,
/s/
Matthew Dodd
MATTHEW
DODD
Senior
Underwriter
If
you have any questions regarding this policy, or for any other service
needs, please contact our AIG
Broker Services:
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Monday-Friday
9:00 AM - 6:00 PM Eastern
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Telephone:
1-877-TO-SERVE or (877)867-3783
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Fax:
(800) 315-3896
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Raising
the bar with commitment to
quality
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NATIONAL
UNION FIRE INSURANCE COMPANY OF PITTSBURGH, PA.
(A
Stock
Insurance Company, herein called the Underwriter)
175
Water
Street
New
York,
NY 10038
INVESTMENT
COMPANY BLANKET BOND
POLICY
NUMBER: 673-44-72
DECLARATIONS
ITEM
1.
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Name
of Insured:
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PROSPECT
ENERGY CORPORATION LLC
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(herein
called Insured)
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Principal
Address:
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10
EAST
40TH STREET
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NEW
YORK,
NY
10016
ITEM
2.
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Bond
Period: from 12:01 a.m. July
30, 2006 to
July
30, 2007 the
effective date of the termination or cancellation of this bond, standard
time at the Principal Address as to each of
said dates.
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ITEM
3.
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Limit
of Liability - Subject to Sections 9, 10 and 12
hereof,
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COVERAGE
FORMS
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Single
Loss
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Single
Loss
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Limit
of Liability
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Deductible
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Insuring
Agreement (A)-FIDELITY
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$1,000,000
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$10,000
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Insuring
Agreement (B)-AUDIT EXPENSE
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$100,000
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$5,000
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Insuring
Agreement (C)-ON PREMISES
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$1,000,000
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$10,000
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Insuring
Agreement (D)-IN TRANSIT
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$1,000,000
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$10,000
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Insuring
Agreement (E)-FORGERY OR ALTERATION
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$1,000,000
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$10,000
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Insuring
Agreement (F)-SECURITIES
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$1,000,000
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$10,000
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Insuring
Agreement (G)-COUNTERFEIT CURRENCY
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$1,000,000
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$10,000
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Insuring
Agreement (H)-STOP PAYMENT
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$100,000
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$5,000
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Insuring
Agreement (I)-UNCOLLECTIBLE ITEMS OF DEPOSIT
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$100,000
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$5,000
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Optional
Insuring Agreements and Coverages
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Insuring
Agreement (J)-COMPUTER SYSTEMS
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$1,000,000
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$10,000
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Insuring
Agreement (K)-VOICE INITIATED TRANSFER FRAUD
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$1,000,000
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$10,000
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If
"Not
Covered" is inserted above opposite any specified Insuring Agreement or
Coverage,
such Insuring Agreement or Coverage and any other reference thereto in this
bond
shall be deemed to be deleted therefrom.
ITEM
4.
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Offices
or Premises Covered-Offices acquired or established subsequent
to the
effective date of this bond are covered according to the terms
of General
Agreement A. All the Insured's offices or premises in existence
at the
time this bond becomes effective are covered
under this bond except the offices or premises located as follows:
No
Exceptions
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ITEM
5.
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The
liability of the Underwriter is subject to the terms of the following
riders attached thereto:
Rider #1, #2, #3,
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ITEM
6.
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The
Insured by the acceptance of this bond gives to the Underwriter
terminating or canceling
prior bond(s) or policy(ies) No. 493-28-20
such
termination or cancellation to be
effective as of the time this bond becomes
effective.
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/s/
illegible
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Authorized
Representative
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Tab:
7314991
INVESTMENT
COMPANY BLANKET BOND
The
Underwriter, in consideration of an agreed premium, and subject to the
Declarations made a part hereof,
the General Agreements, Conditions and Limitations and other terms of this
bond,
agrees with the Insured, in accordance with the Insuring Agreements hereof
to
which an amount of insurance is applicable
as set forth in Item 3 of the Declarations and with respect to loss sustained
by
the Insured at any time but discovered during the Bond Period, to indemnify
and
hold harmless the Insured for:
INSURING
AGREEMENTS
Loss
resulting from any dishonest or fraudulent
act(s), including Larceny or Embezzlement
committed by an Employee, committed
anywhere and whether committed alone or in collusion with others, including
loss
of
Property resulting from such acts of an Employee,
which Property is held by the Insured
for any purpose or in any capacity and whether
so held gratuitously or not and whether
or not the Insured is liable therefor.
Dishonest
or fraudulent act(s) as used in this
Insuring Agreement shall mean only dishonest
or fraudulent act(s) committed by such
Employee with the manifest intent:
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(a)
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to
cause the Insured to sustain such loss;
and
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(b)
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to
obtain financial benefit for the Employee,
or for any other person or organization
intended by the Employee to
receive such benefit, other than salaries,
commissions, fees, bonuses, promotions,
awards, profit sharing, pensions
or other employee benefits earned
in the normal course of employment.
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Expense
incurred by the Insured for that part
of
the costs of audits or examinations required
by any governmental regulatory authority
to be conducted either by such authority
or by an independent accountant by reason
of
the discovery of loss sustained by the
Insured through any dishonest or fraudulent
act(s), including Larceny or Embezzlement
of any of the Employees. The total
liability of the Underwriter for such expense
by reason of such acts of any Employee
or in which such Employee is concerned
or implicated or with respect to any one
audit
or examination is limited to the amount
stated opposite Audit Expense in item 3 of the Declarations; it being
understood, however,
that such expense shall be deemed to
be a
loss sustained by the Insured through any
dishonest or fraudulent act(s), including Larceny
or Embezzlement of one or more of the Employees
and the liability under this paragraph
shall be in addition to the Limit of liability
stated in Insuring Agreement (A) in Item
3 of
the Declarations.
Loss
of
Property (occurring with or without negligence or violence) through robbery,
burglary, Larceny, theft, holdup, or other
fraudulent means, misplacement, mysterious
unexplainable disappearance, damage
thereto or destruction thereof, abstraction
or removal from the possession, custody
or control of the Insured, and loss of subscription,
conversion, redemption or deposit privileges
through the misplacement or loss of Property,
while the Property is (or is supposed or believed by the Insured to be) lodged
or deposited
within any offices or premises located
anywhere, except in an office listed in Item
4 of
the Declarations or amendment thereof
or in the mail or with a carrier for hire other
than an armored motor vehicle company, for
the
purpose of transportation.
Offices
and Equipment
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(1)
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Loss
of or damage to, furnishings, fixtures,
stationery, supplies or equipment,
within any of the Insured's offices
covered under this bond caused
by Larceny or theft in, or by burglary,
robbery or holdup of such office,
or attempt thereat, or by vandalism
or malicious mischief; or
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(2)
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loss
through damage to any such office
by Larceny or theft in, or by burglary,
robbery or holdup of such office
or attempt thereat, or to the interior
of any such office by vandalism
or malicious mischief provided,
in any event, that the Insured
is the owner of such offices, furnishings,
fixtures, stationery, supplies
or equipment or is legally liable
for such loss or damage, always excepting,
however, all loss or damage
through fire.
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Loss
of
Property (occurring with or without
negligence or violence) through robbery,
Larceny, theft, holdup, misplacement, mysterious
unexplainable disappearance, being lost
or
otherwise made away with, damage thereto
or destruction thereof, and loss of subscription,
conversion, redemption or deposit privileges through the misplacement or loss
of
Property,
while the Property is in transit anywhere
in the custody of any person or persons
acting as messenger, except while in the
mail
or with a carrier for hire, other than an armored
motor vehicle company, for the purpose
of transportation, such transit to begin immediately
upon receipt of such Property by the
transporting person or persons, and to end immediately
upon delivery thereof at destination.
(E)
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FORGERY
OR ALTERATION
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Loss
through FORGERY or ALTERATION of,
on or
in any bills of exchange, checks, drafts,
acceptances, certificates of deposit, promissory
notes, or other written promises, orders
or
directions to pay sums certain in money,
due bills, money orders, warrants, orders
upon public treasuries, letters of credit, written
instructions, advices or applications directed
to the Insured, authorizing or acknowledging
the transfer, payment, delivery or
receipt of funds or Property, which instructions
or advices or applications purport to
have
been signed or endorsed by any customer
of the Insured, shareholder or subscriber
to shares, whether certificated or uncertificated,
of any investment Company or by
any
financial or banking institution or stockbroker
but which instructions, advices or applications
either bear the forged signature or endorsement or have been altered without
the
knowledge
and consent of such customer, shareholder
or subscriber to shares, whether certificated
or uncertificated, of an Investment Company,
financial or banking institution or stockbroker,
withdrawal orders or receipts for the
withdrawal of funds or Property, or receipts
or certificates of deposit for Property and
bearing the name of the Insured as issuer, or
of
another Investment Company for which the
Insured acts as agent, excluding, however, any
loss
covered under Insuring Agreement (F) hereof
whether or not coverage for Insuring Agreement
(F) is provided for in the Declarations
of this bond.
Any
check
or draft (a) made payable to a fictitious
payee and endorsed in the name of such
fictitious payee or (b) procured in a transaction with the maker or drawer
thereof or
with
one acting as an agent of such maker or
drawer
or anyone impersonating another and made
or
drawn payable to the one so impersonated
and endorsed by anyone other than
the
one impersonated, shall be deemed to be
forged
as to such endorsement.
Mechanically
reproduced facsimile signatures
are treated the same as handwritten signatures.
Loss
sustained by the Insured, including loss
sustained by reason of a violation of the constitution,
by-laws, rules or regulations of any
Self
Regulatory Organization of which the insured
is a member or which would have been imposed upon the insured by the
constitution, by-laws,
rules or regulations of any Self Regulatory
Organization if the insured had been a member thereof,
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(1)
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through
the Insured's having, in good faith
and in the course of business, whether
for its own account or for the account
of others, in any representative,
fiduciary, agency or any
other capacity, either gratuitously or
otherwise, purchased or otherwise acquired,
accepted or received, or sold or
delivered, or given any value, extended
any credit or assumed any liability, on the faith of, or otherwise
acted
upon, any securities, documents or other written instruments
which prove to have been
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(b)
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forged
as to the signature of any maker,
drawer, issuer, endorser, assignor,
lessee, transfer agent or registrar,
acceptor, surety or guarantor
or as to the signature of any
person signing in any other capacity,
or
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(c)
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raised
or otherwise altered, or lost, or
stolen, or
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(2)
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through
the Insured's having, in good faith
and in the course of business, guaranteed
in writing or witnessed any
signatures whether for valuable consideration
or not and whether or not
such guaranteeing or witnessing is ultra
vires the Insured, upon any transfers, assignments, bills of sale,
powers
of attorney, guarantees, endorsements
or other obligations upon or in connection with any securities,
documents or other written instruments
and which pass or purport to
pass title to such securities, documents
or other written instruments;
EXCLUDING, losses caused
by FORGERY or ALTERATION of,
on or in those instruments covered under
Insuring Agreement (E) hereof.
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Securities,
documents or other written instruments shall be deemed to mean original
(including original counterparts) negotiable or non-negotiable agreements which
in and of themselves represent an equitable interest, ownership, or debt,
including an assignment thereof which instruments are in the ordinary course
of
business, transferable by delivery of such agreements with any necessary
endorsement or assignment.
The
word
"counterfeited" as used in this
Insuring Agreement shall be deemed
to
mean any security, document
or other written instrument which
is
intended to deceive and to be taken
for
an original.
Mechanically
produced facsimile signatures
are treated the same as handwritten
signatures.
Loss
through the receipt by the Insured, in
good
faith, of any counterfeited money orders
or
altered paper currencies or coin of the
United States of America or Canada issued or
purporting to have been issued by the United
States of America or Canada or issued pursuant
to a United States of America or Canadian
statute for use as currency.
Loss
against any and all sums which the
insured
shall become obligated to pay by
reason
of
the Liability imposed upon the
Insured
by law for damages:
For
having either complied with or failed to
comply
with any written notice of any customer,
shareholder or subscriber of the
Insured or any Authorized Representative
of such customer, shareholder
or subscriber to stop payment of
any
check or draft made or drawn by such
customer, shareholder or subscriber or
any
Authorized Representative of such customer,
shareholder or subscriber, or For
having refused to pay any check or draft
made or drawn by any customer, shareholder
or subscriber of the Insured or
any
Authorized Representative of such customer,
shareholder or subscriber.
(I)
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UNCOLLECTIBLE
ITEMS OF DEPOSIT
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Loss
resulting from payments of dividends
or fund shares, or withdrawals permitted
from any customer's, shareholder's or
subscriber's account based upon Uncollectible
Items of Deposit of a customer, shareholder
or subscriber credited by the Insured
or the Insured's agent to such customer's,
shareholder's or subscriber's Mutual
Fund Account; or
loss
resulting from any Item of Deposit processed
through an Automated Clearing House
which is reversed by the customer, shareholder
or subscriber and deemed uncollectible
by the Insured.
Loss
includes dividends and interest accrued
not to exceed 15% of the Uncollectible
Items which are deposited.
This
Insuring Agreement applies to all Mutual
Funds with "exchange privileges" if all Fund(s)
in the exchange program are insured by
a
National Union Fire Insurance Company of Pittsburgh,
PA for Uncollectible Items of Deposit.
Regardless of the number of transactions
between Fund(s), the minimum number
of
days of deposit within the Fund(s) before
withdrawal as declared in the Fund(s) prospectus
shall begin from the date a deposit was
first
credited to any Insured Funds).
GENERAL
AGREEMENTS
A.
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ADDITIONAL
OFFICES OR EMPLOYEES-CONSOLIDATION
OR MERGER-NOTICE
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1.
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If
the insured shall, while this bond is in force,
establish any additional office or offices, such office or offices
shall
be automatically
covered hereunder from the
dates of their establishment, respectively. No notice to the Underwriter
of an increase during any premium
period in the number of offices or
in the number of Employees at any of
the offices covered hereunder need be
given and no additional premium need
be paid for the remainder of such premium
period.
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2.
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If
an Investment Company, named as Insured
herein, shall, while this bond is in
force, merge or consolidate with, or purchase
the assets of another institution, coverage for such acquisition
shall apply automatically from
the date of acquisition. The Insured
shall notify the Underwriter of such
acquisition within 60 days of said date,
and an additional premium shall be
computed only if such acquisition involves
additional offices or employees.
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No
statement made by or on behalf of the insured,
whether contained in the application or
otherwise, shall be deemed to be a warranty of
anything except that it is true to the best of the
knowledge and belief of the person making the
statement.
C.
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COURT
COSTS AND ATTORNEYS' FEES
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(Applicable
to all Insuring Agreements or Coverages
now or hereafter forming part of this
bond)
The
Underwriter will indemnify the Insured against
court costs and reasonable attorneys' fees
incurred and paid by the Insured in defense, whether
or not successful, whether or not fully litigated
on the merits and whether or not settled
of any suit or legal proceeding brought against
the Insured to enforce the Insured's liability or
alleged liability on account of any loss,
claim or damage which, if established against
the Insured, would constitute a loss sustained
by the Insured covered under the terms
of
this bond provided, however, that with respect
to Insuring Agreement (A) this indemnity shall
apply only in the event that
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(1)
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an
Employee admits to being guilty of any
dishonest or fraudulent act(s), including
Larceny or Embezzlement; or
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(2)
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an
Employee is adjudicated to be guilty
of any dishonest or fraudulent act(s),
including Larceny or Embezzlement;
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(3)
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in
the absence of (1)
or
(2) above an arbitration
panel agrees, after a review of
an agreed statement of facts, that an
Employee would be found guilty of dishonesty
if such Employee were prosecuted.
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The
Insured shall promptly give notice to the
Underwriter of any such suit or legal proceeding
and at the request of the Underwriter
shall furnish it with copies of all pleadings
and other papers therein. At the Underwriter's
election the Insured shall permit the
Underwriter to conduct the defense of such
suit
or legal proceeding, in the Insured's name,
through attorneys of the Underwriter's selection. In such event, the Insured
shall give all
reasonable information and assistance which
the
Underwriter shall deem necessary to the
proper defense of such suit or legal proceeding.
If
the
amount of the Insured's liability or alleged
liability is greater than the amount recoverable
under this bond, or if a Deductible Amount
is
applicable, or both, the liability of the
Underwriter under this General Agreement is
limited to the proportion of court costs and attorneys'
fees incurred and paid by the Insured
or by the Underwriter that the amount recoverable
under this bond bears to the total of
such
amount plus the amount which is not so
recoverable. Such indemnity shall be in addition
to the Limit of Liability for the applicable
Insuring Agreement or Coverage.
Acts
of
an Employee, as defined in this bond,
are
covered under insuring Agreement (A)
only
while the Employee is in the Insured's employ.
Should loss involving a former Employee
of the Insured be discovered subsequent
to the termination of employment, coverage
would still apply under Insuring Agreement
(A) if the direct proximate cause of the
loss
occurred while the former Employee performed
duties within the scope of his/her employment.
THE
FOREGOING INSURING AGREEMENTS AND
GENERAL
AGREEMENTS ARE SUBJECT TO
THE
FOLLOWING CONDITIONS
AND
LIMITATIONS:
SECTION
1. DEFINITIONS
The
following terms, as used in this bond, shall have the respective meanings stated
in this Section:
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(1)
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any
of the Insured's officers, partners, or employees,
and
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(2)
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any
of the officers or employees of any predecessor of the Insured whose
principal assets are acquired by the Insured by consolidation or
merger
with, or purchase of assets or capital stock of such predecessor,
and
|
|
(3)
|
attorneys
retained by the Insured to perform legal services for the Insured
and the
employees of such attorneys while such attorneys or the employees
of such
attorneys are performing such services for the Insured,
and
|
|
(4)
|
guest
students pursuing their studies or duties in any of the Insured's
offices,
and
|
|
(5)
|
directors
or trustees of the Insured, the investment advisor, underwriter
(distributor), transfer agent, or shareholder accounting record keeper,
or
administrator authorized by written agreement to keep financial and/or
other required records, but only while performing acts coming within
the
scope of the usual duties of an officer or employee or while acting
as a
member of any committee duly elected or appointed to examine or audit
or
have custody of or access to the Property of the Insured,
and
|
|
(6)
|
any
individual or individuals assigned to perform the usual duties of
an
employee within the premises of the Insured, by contract, or by any
agency
furnishing temporary personnel on a contingent or part-time basis,
and
|
|
(7)
|
each
natural person, partnership or corporation authorized by written
agreement
with the Insured to perform services as electronic data processor
of
checks or other accounting records of the Insured, but excluding
any such
processor who acts as transfer agent or in any other agency capacity
in
issuing checks, drafts or securities for the Insured, unless included
under Sub-section (9) hereof, and
|
|
(8)
|
those
persons so designated in Section 15, Central Handling of Securities,
and
|
|
(9)
|
any
officer, partner or Employee of
|
|
a)
|
an
investment advisor,
|
|
b)
|
an
underwriter (distributor),
|
|
c)
|
a
transfer agent or shareholder accounting record-keeper,
or
|
|
d)
|
an
administrator authorized by written agreement to keep financial and/or
other required records,
|
for
an
Investment Company named as Insured while performing acts coming within the
scope of the usual duties of an officer or Employee of any Investment Company
named as insured herein, or while acting as a member of any committee duly
elected or appointed to examine or audit or have custody of or access to the
Property of any such Investment Company, provided that only Employees or
partners of a transfer agent, shareholder accounting record-keeper or
administrator which is an affiliated person as defined in the Investment Company
Act of 1940, of an Investment Company named as insured or is an affiliated
person of the adviser, underwriter or administrator of such Investment Company,
and which is not a bank, shall be included within the definition of
Employee.
Each
employer of temporary personnel or processors as set forth in Sub-Sections
(6)
and of Section 1 (a) and their partners, officers and employees shall
collectively be deemed to be one person for all the purposes of this bond,
excepting, however, the last paragraph of Section 13.
Brokers,
or other agents under contract or representatives of the same general character
shall not be considered Employees.
|
(b)
|
"Property"
means money (i.e., currency, coin, bank notes, Federal Reserve notes),
postage and revenue stamps, U.S. Savings Stamps, bullion, precious
metals
of all kinds and in any form and articles made therefrom, jewelry,
watches, necklaces, bracelets, gems, precious and semi-precious stones,
bonds, securities, evidences of debts, debentures, scrip, certificates,
interim receipts, warrants, rights, puts, calls, straddles, spreads,
transfers, coupons, drafts, bills of exchange, acceptances, notes,
checks,
withdrawal orders, money orders, warehouse receipts, bills of lading,
conditional sales contracts, abstracts of title, insurance policies,
deeds, mortgages under real estate and/or chattels and upon interests
therein, and assignments of such policies, mortgages and instruments,
and
other valuable papers, including books of account and other records
used
by the Insured in the conduct of its business, and all other instruments
similar to or in the nature of the foregoing including Electronic
Representations of such instruments enumerated above (but excluding
all
data processing records) in which the Insured has an interest or
in which
the Insured acquired or should have acquired an interest by reason
of a
predecessor's declared financial condition at the time of the Insured's
consolidation or merger with, or purchase of the principal assets
of, such
predecessor or which are held by the Insured for any purpose or in
any
capacity and whether so held by the Insured for any purpose or in
any
capacity and whether so held gratuitously or not and whether or not
the
insured is liable therefor.
|
|
(c)
|
"Forgery"
means the signing of the name of another with intent to deceive;
it does
not include the signing of one's own name with or without authority,
in
any capacity, for any purpose.
|
|
(d)
|
"Larceny
and Embezzlement" as it applies to any named Insured means those
acts as
set forth in Section 37 of the Investment Company Act of
1940.
|
|
(e)
|
"Items
of Deposit" means any one or more checks and drafts. Items of Deposit
shall not be deemed uncollectible until the Insured's collection
procedures have failed.
|
SECTION
2. EXCLUSIONS
THIS
BOND
DOES NOT COVER:
|
(a)
|
loss
effected directly or indirectly by means of forgery or alteration
of, on
or in any instrument, except when covered by Insuring Agreement (A),
(E),
(F) or (G).
|
|
(b)
|
loss
due to riot or civil commotion outside the United States of America
and
Canada; or loss due to military, naval or usurped power, war or
insurrection unless such loss occurs in transit in the circumstances
recited in Insuring Agreement (D), and unless, when such transit
was
initiated, there was no knowledge of such riot, civil commotion,
military,
naval or usurped power, war or insurrection on the part of any person
acting for the insured in initiating such transit,
|
|
(c)
|
loss,
in time of peace or war, directly or indirectly caused by or resulting
from the effects of nuclear fission or fusion or radioactivity; provided,
however, that this paragraph shall not apply to loss resulting from
industrial uses of nuclear energy.
|
|
(d)
|
loss
resulting from any wrongful act or acts of any person who is a member
of
the Board of Directors of the Insured or a member of any equivalent
body
by whatsoever name known unless such person is also an Employee or
an
elected official, partial owner or partner of the Insured in some
other
capacity, nor, in any event, loss resulting from the act or acts
of any
person while acting in the capacity of a member of such Board or
equivalent body.
|
|
(e)
|
loss
resulting from the complete or partial non-payment of, or default
upon,
any loan or transaction in the nature of, or amounting to, a loan
made by
or obtained from the Insured or any of its partners, directors or
Employees, whether authorized or unauthorized and whether procured
in good
faith or through trick, artifice, fraud or false pretenses, unless
such
loss is covered under Insuring Agreement (A), (E) or
(F).
|
|
(f)
|
loss
resulting from any violation by the Insured or by any
Employee
|
|
(1)
|
of
law regulating (a) the issuance, purchase or sale of securities,
(b)
securities transactions upon Security Exchanges or over the counter
market, (c) Investment Companies, or (d) Investment Advisors,
or
|
|
(2)
|
of
any rule or regulation made pursuant to any such law, unless such
loss, in
the absence of such laws, rules or regulations, would be covered
under
Insuring Agreements (A) or (E).
|
|
(g)
|
loss
of Property or loss of privileges through the misplacement or loss
of
Property as set forth in Insuring Agreement (C) or (D) while the
Property
is in the custody of any armored motor vehicle company, unless such
loss
shall be in excess of the amount recovered or received by the Insured
under (a) the Insured's contract with said armored motor vehicle
company,
(b) insurance carried by said armored motor vehicle company for the
benefit of users of its service, and (c) all other insurance and
indemnity
in force in whatsoever form carried by or for the benefit of users
of said
armored motor vehicle company's service, and then this bond shall
cover
only such excess.
|
|
(h)
|
potential
income, including but not limited to interest and dividends, not
realized
by the Insured because of a loss covered under this bond, except
as
included under Insuring Agreement
(I).
|
|
(i)
|
all
damages of any type for which the Insured is legally liable, except
direct
compensatory damages arising from a loss covered under this
bond.
|
|
(j)
|
loss
through the surrender of Property away from an office of the insured
as a
result of a threat
|
|
(1)
|
to
do bodily harm to any person, except loss of Property in transit
in the
custody of any person acting as messenger provided that when such
transit
was initiated there was no knowledge by the Insured of any such threat,
or
|
|
(2)
|
to
do damage to the premises or Property of the Insured, except when
covered
under Insuring Agreement (A).
|
|
(k)
|
all
costs, fees and other expenses incurred by the Insured in establishing
the
existence of or amount of loss covered under this bond unless such
indemnity is provided for under Insuring Agreement
(B).
|
|
(l)
|
loss
resulting from payments made or withdrawals from the account of a
customer
of the Insured, shareholder or subscriber to shares involving funds
erroneously credited to such account, unless such payments are made
to or
withdrawn by such depositor or representative of such person, who
is
within the premises of the drawee bank of the Insured or within the
office
of the Insured at the time of such payment or withdrawal or unless
such
payment is covered under Insuring Agreement
(A).
|
|
(m)
|
any
loss resulting from Uncollectible Items of Deposit which are drawn
from a
financial institution outside the fifty states of the United States
of
America, District of Columbia, and territories and possessions of
the
United States of America, and
Canada.
|
SECTION
3. ASSIGNMENT OF RIGHTS
This
bond
does not afford coverage in favor of any Employers of temporary personnel or
of
processors as set forth in sub-sections (6) and (7) of Section 1 (a) of this
bond, as aforesaid, and upon payment to the Insured by the Underwriter on
account of any loss through dishonest or fraudulent act(s) including 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 Insured'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 Insured to the Underwriter, and the Insured shall
execute all papers necessary to secure to the Underwriter the rights herein
provided for.
SECTION
4. LOSS -NOTICE -PROOF- LEGAL PROCEEDINGS
This
bond
is for the use and benefit only of the Insured named in the Declarations and
the
Underwriter shall not be liable hereunder for loss sustained by anyone other
than the insured unless the Insured, in its sole discretion and at its option,
shall include such loss in the Insured's proof of loss. At the earliest
practicable moment after discovery of any loss hereunder the insured shall
give
the Underwriter written notice thereof and shall also within six months after
such discovery furnish to the Underwriter affirmative proof of loss with full
particulars. If claim is made under this bond for loss of securities or shares,
the Underwriter shall not be liable unless each of such securities or shares
is
identified in such proof of loss by a certificate or bond number or, where
such
securities or shares are uncertificated, by such identification means as agreed
to by the Underwriter. The Underwriter shall have thirty days after notice
and
proof of loss within which to investigate the claim, but where the loss is
clear
and undisputed, settlement shall be made within forty-eight hours; and this
shall apply notwithstanding the loss is made up wholly or in part of securities
of which duplicates may be obtained. Legal proceedings for recovery of any
loss
hereunder shall not be brought prior to the expiration of sixty days after
such
proof of loss is filed with the Underwriter nor after the expiration of
twenty-four months from the discovery of such loss, except that any action
or
proceeding to recover hereunder on account of any judgment against the Insured
in any suit mentioned in General Agreement C or to recover attorneys' fees
paid
in any such suit, shall be begun within twenty-four months from the date upon
which the judgment in such suit shall become final, if any limitation embodied
in this bond is prohibited by any law controlling the construction hereof,
such
limitation shall be deemed to be amended so as to be equal to the minimum period
of limitation permitted by such law.
Discovery
occurs when the Insured
|
(a)
|
becomes
aware of facts, or
|
|
(b)
|
receives
written notice of an actual or potential claim by a third party which
alleges that the Insured is liable under
circumstance
|
which
would cause a reasonable person to assume that a loss covered by the bond has
been or will be incurred even though the exact amount or details of loss may
not
be then known.
SECTION
5. VALUATION OF PROPERTY
The
value
of any Property, except books of accounts or other records used by the Insured
in the conduct of its business, for the loss of which a claim shall be made
hereunder, shall be determined by the average market value of such Property
on
the business day next preceding the discovery of such loss; provided, however,
that the value of any Property replaced by the Insured prior to the payment
of
claim therefor shall be the actual market value at the time of replacement;
and
further provided that in case of a loss or misplacement of interim certificates,
warrants, rights, or other securities, the production which is necessary to
the
exercise of subscription, conversion, redemption or deposit privileges, the
value thereof shall be the market value of such privileges immediately preceding
the expiration thereof if said loss or misplacement 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
or by
arbitration.
In
case
of any loss or damage to Property consisting of books of accounts or other
records used by the Insured in the conduct of its business, the Underwriter
shall be liable under this bond only if such books or records are actually
reproduced and then for not more than the cost of blank books, blank pages
or
other materials plus the cost of labor for the actual transcription or copying
of data which shall have been furnished by the Insured in order to reproduce
such books and other records.
SECTION
6. VALUATION OF PREMISES AND FURNISHINGS
In
case
of damage to any office of the Insured, or loss of or damage to the furnishings,
fixtures, stationery, supplies, equipment, safes or vaults therein, the
Underwriter shall not be liable for more than the actual cash value thereof,
or
for more than the actual cost of their replacement or repair. The Underwriter
may, at its election, pay such actual cash value or make such replacement or
repair. If the Underwriter and the Insured cannot agree upon such cash value
or
such cost of replacement or repair, such shall be determined by
arbitration.
SECTION
7. LOST SECURITIES
If
the
Insured shall sustain a loss of securities the total value of which is in excess
of the limit stated in Item 3 of the Declarations of this bond, the liability
of
the Underwriter shall be limited to payment for, or duplication of, securities
having value equal to the limit stated in Item 3 of the Declarations of this
bond.
If
the
Underwriter shall make payment to the Insured for any loss of securities, the
Insured shall thereupon assign to the Underwriter all of the Insured's rights,
title and interests in and to said securities.
With
respect to securities the value of which do not exceed the Deductible Amount
(at
the time of the discovery of the loss) and for which the Underwriter may at
its
sole discretion and option and at the request of the insured issue a Lost
Instrument Bond or Bonds to effect replacement thereof, the Insured will pay
the
usual premium charged therefor and will indemnify the Underwriter against all
loss or expense that the Underwriter may sustain because of the issuance of
such
Lost Instrument Bond or Bonds.
With
respect to securities the value of which exceeds the Deductible Amount (at
the
time of discovery of the loss) and for which the Underwriter may issue or
arrange for the issuance of a Lost Instrument Bond or Bonds to effect
replacement thereof, the Insured agrees that it will pay as premium therefor
a
proportion of the usual premium charged therefor, said proportion being equal
to
the percentage that the Deductible Amount bears to the value of the securities
upon discovery of the loss, and that it will indemnify the issuer of said Lost
Instrument Bond or Bonds against all loss and expense that is not recoverable
from the Underwriter under the terms and conditions of this INVESTMENT COMPANY
BLANKET BOND subject to the Limit of Liability hereunder.
SECTION
8. SALVAGE
In
case
of recovery, whether made by the Insured or by the Underwriter, on account
of
any loss in excess of the Limit of Liability hereunder plus the Deductible
Amount applicable to such loss from any source other than suretyship, insurance,
reinsurance, security or indemnity taken by or for the benefit of the
Underwriter, the net amount of such recovery, less the actual costs and expenses
of making same, shall be applied to reimburse the Insured in full for the excess
portion of such loss, and the remainder, if any, shall be paid first in
reimbursement of the Underwriter and thereafter in reimbursement of the Insured
for that part of such loss within the Deductible Amount. The Insured shall
execute all necessary papers to secure to the Underwriter the rights provided
for herein.
SECTION
9. NON-REDUCTION AND NON-ACCUMULATION OF LIABILITY AND TOTAL
LIABILITY
At
all
times prior to termination hereof this bond shall continue in force for the
limit stated in the applicable sections of Item 3 of the Declarations of this
bond notwithstanding any previous loss for which the Underwriter may have paid
or be liable to pay hereunder; PROVIDED, however, that regardless of the number
of years this bond shall continue in force and the number of premiums which
shall be payable or paid, the liability of the Underwriter under this bond
with
respect to all loss resulting from
|
(a)
|
any
one act of burglary, robbery or holdup, or attempt thereat, in which
no
Partner or Employee is concerned or implicated shall be deemed to
be one
loss, 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, shall be
deemed
to be one loss, or
|
|
(c)
|
all
wrongful acts, other than those specified in (a) above, of any one
person
shall be deemed to be one loss, or
|
|
(d)
|
ail
wrongful acts, other than those specified in (a) above, of one or
more
persons (which dishonest act(s) or act(s) of Larceny or Embezzlement
include, but are not limited to, the failure of an Employee to report
such
acts of others) whose dishonest act or acts intentionally or
unintentionally, knowingly or unknowingly, directly or indirectly,
aid or
aids in any way, or permits the continuation of, the dishonest act
or acts
of any other person or persons shall be deemed to be one loss with
the act
or acts of the persons aided, or
|
|
(e)
|
any
one casualty or event other than those specified in (a), (b), (c)
or (d)
preceding, shall be deemed to be one loss, and
|
shall
be
limited to the applicable Limit of Liability stated in Item 3 of the
Declarations of this bond irrespective of the total amount of such loss or
losses and shall not be cumulative in amounts from year to year or from period
to period,
Sub-section
(c) is not applicable to any situation to which the language of sub-section
(d)
applies.
SECTION
10. LIMIT OF LIABILITY
With
respect to any loss set forth in the PROVIDED clause of Section 9 of this bond
which is recoverable or recovered in whole or in part under any other bonds
or
policies issued by the Underwriter to the Insured or to any predecessor in
interest of the insured and terminated or cancelled or allowed to expire and
in
which the period for discovery has not expired at the time any such loss
thereunder is discovered, the total liability of the Underwriter under this
bond
and under other bonds or policies shall not exceed, in the aggregate, the amount
carried hereunder on such loss or the amount available to the insured under
such
other bonds or policies, as limited by the terms and conditions thereof, for
any
such loss if the latter amount be the larger.
SECTION
11. OTHER INSURANCE
If
the
Insured shall hold, as indemnity against any loss covered hereunder, any valid
and enforceable insurance or suretyship, the Underwriter shall be liable
hereunder only for such amount of such loss which is in excess of the amount
of
such other insurance or suretyship, not exceeding, however, the Limit of
Liability of this bond applicable to such loss.
SECTION
12. DEDUCTIBLE
The
Underwriter shall not be liable under any of the Insuring Agreements of this
bond on account of loss as specified, respectively, in sub-sections (a), (b),
(c), (d) and (e) of Section 9, NON-REDUCTION AND NON- ACCUMULATION OF LIABILITY
AND TOTAL LIABILITY, unless the amount of such loss, after deducting the net
amount of all reimbursement and/or recovery obtained or made by the Insured,
other than from any bond or policy of insurance issued by an insurance company
and covering such loss, or by the Underwriter on account thereof prior to
payment by the Underwriter of such loss, shall exceed the Deductible Amount
set
forth in Item 3 of the Declarations hereof (herein called Deductible Amount)
and
then for such excess only, but in no event for more than the applicable Limit
of
Liability stated in Item 3 of the Declarations.
The
Insured will bear, in addition to the Deductible Amount, premiums on Lost
Instrument Bonds as set forth in Section 7.
There
shall be no deductible applicable to any loss under Insuring Agreement A
sustained by any Investment Company named as Insured herein.
SECTION
13. TERMINATION
The
Underwriter may terminate this bond as an entirety by furnishing written notice
specifying the termination date which cannot be prior to 60 days after the
receipt of such written notice by each Investment Company named as Insured
and
the Securities and Exchange Commission, Washington, D.C. The Insured may
terminate this bond as an entirety by furnishing written notice to the
Underwriter. When the Insured cancels, the Insured shall furnish written notice
to the Securities and Exchange Commission, Washington. D.C. prior to 60 days
before the effective date of the termination. The Underwriter shall notify
ail
other Investment Companies named as Insured of the receipt of such termination
notice and the termination cannot be effective prior to 60 days after receipt
of
written notice by all other Investment Companies. Premiums are earned until
the
termination date as set forth herein.
This
Bond
will terminate as to any one Insured immediately upon taking over of such
Insured by a receiver or other liquidator or by State or Federal officials,
or
immediately upon the filing of a petition under any State or Federal statute
relative to bankruptcy or reorganization of the Insured, or assignment for
the
benefit of creditors of the insured, or immediately upon such Insured ceasing
to
exist, whether through merger into another entity, or by disposition of all
of
its assets.
The
Underwriter shall refund the unearned premium computed at short rates in
accordance with the standard short rate cancellation tables if terminated by
the
Insured or pro rata if terminated for any other reason.
This
Bond
shall terminate
|
(a)
|
as
to any Employee as soon as any partner, officer or supervisory Employee
of
the Insured, who is not in collusion with such Employee, shall learn
of
any dishonest or fraudulent act(s), including Larceny or Embezzlement
on
the part of such Employee without prejudice to the loss of any Property
then in transit in the custody of such Employee (See Section 16[d]),
or
|
|
(b)
|
as
to any Employee 60 days after receipt by each Insured and by the
Securities and Exchange Commission of a written notice from the
Underwriter of its desire to terminate this bond as to such Employee,
or
|
|
(c)
|
as
to any person, who is a partner, officer or employee of any Electronic
Data Processor covered under this bond, from and after the time that
the
Insured or any partner or officer thereof not in collusion with such
person shall have knowledge or information that such person has committed
any dishonest or fraudulent act(s), including Larceny or Embezzlement
in
the service of the Insured or otherwise, whether such act be committed
before or after the time this bond is
effective.
|
SECTION
14. RIGHTS AFTER TERMINATION OR CANCELLATION
At
any
time prior to the termination or cancellation of this bond as an entirety,
whether by the Insured or the Underwriter, the Insured may give to the
Underwriter notice that it desires under this bond an additional period of
12
months within which to discover loss sustained by the Insured prior to the
effective date of such termination or cancellation and shall pay an additional
premium therefor.
Upon
receipt of such notice from the Insured, the Underwriter shall give its written
consent thereto; provided, however, that such additional period of time shall
terminate immediately;
|
(a)
|
on
the effective date of any other insurance obtained by the Insured,
its
successor in business or any other party, replacing in whole or in
part
the insurance afforded by this bond, whether or not such other insurance
provides coverage for loss sustained prior to its effective date,
or
|
|
(b)
|
upon
takeover of the Insured's business by any State or Federal official
or
agency, or by any receiver or liquidator, acting or appointed for
this
purpose without the necessity of the Underwriter giving notice of
such
termination. In the event that such additional period of time is
terminated, as provided above, the Underwriter shall refund any unearned
premium.
|
The
right
to purchase such additional period for the discovery of loss may not be
exercised by any State or Federal official or agency, or by any receiver or
liquidator, acting or appointed to take over the Insured's business for the
operation or for the liquidation thereof or for any other purpose.
SECTION
15. CENTRAL HANDLING OF SECURITIES
Securities
included in the systems for the central handling of securities established
and
maintained by Depository Trust Company, Midwest Depository Trust Company,
Pacific Securities Depository Trust Company, and Philadelphia Depository Trust
Company, hereinafter called Corporations, to the extent of the Insured's
interest therein as effective by the making of appropriate entries on the books
and records of such Corporations shall be deemed to be Property.
The
words
"Employee" and "Employees" shall be deemed to include the officers, partners,
clerks and other employees of the New York Stock Exchange, Boston Stock
Exchange, Midwest Stock Exchange, Pacific Stock Ex- change and Philadelphia
Stock Exchange, hereinafter called Exchanges, and of the above named
Corporations, and of any nominee in whose name is registered any security
included within the systems for the central handling of securities established
and maintained by such Corporations, and any employee of any recognized service
company, while such officers, partners, clerks and other employees and employees
of service companies perform services for such Corporations in the operation
of
such systems. For the purpose of the above definition a recognized service
company shall be any company providing clerks or other personnel to said
Exchanges or Corporation on a contract basis.
The
Underwriter shall not be liable on account of any loss(es) in connection with
the central handling of securities within the systems established and maintained
by such Corporations, unless such loss(es) shall be in excess of the amount(s)
recoverable or recovered under any bond or policy of insurance indemnifying
such
Corporations, against such loss(es), and then the Underwriter shall be liable
hereunder only for the Insured's share of such excess loss(es), but in no event
for more than the Limit of Liability applicable hereunder.
For
the
purpose of determining the Insured's share of excess loss(es) it shall be deemed
that the insured has an interest in any certificate representing any security
included within such systems equivalent to the interest the Insured then has
in
all certificates representing the same security included within such systems
and
that such Corporations shall use their best judgement in apportioning the
amount(s) recoverable or recovered under any bond or policy of insurance
indemnifying such Corporations against such loss(es) in connection with the
centra! handling of securities within such systems among all those having an
interest as recorded by appropriate entries in the books and records of such
Corporations in Property involved in such loss(es) on the basis that each such
interest shall share in the amount(s) so recoverable or recovered in the ratio
that the value of each such interest bears to the total value of all such
interests and that the Insured's share of such excess loss(es) shall be the
amount of the Insured's interest in such Property in excess of the amount(s)
so
apportioned to the Insured by such Corporations.
This
bond
does not afford coverage in favor of such Corporations or Exchanges or any
nominee in whose name is registered any security included within the systems
for
the central handling of securities established and maintained by such
Corporations, and upon payment to the Insured by the Underwriter on account
of
any loss(es) within the systems, an assignment of such of the Insured's rights
and causes of action as it may have against such Corporations or Exchanges
shall
to the extent of such payment, be given by the Insured to the Underwriter,
and
the Insured shall execute all papers necessary to secure to the Underwriter
the
rights provided for herein.
SECTION
16. ADDITIONAL COMPANIES INCLUDED AS INSURED
If
more
than one corporation, co-partnership or person or any combination of them be
included as the Insured herein:
|
(a)
|
the
total liability of the Underwriter hereunder for loss or losses sustained
by any one or more or all of them shall not exceed the limit for
which the
Underwriter would be liable hereunder if ail such loss were sustained
by
any one of them,
|
|
(b)
|
the
one first named herein shall be deemed authorized to make, adjust
and
receive and enforce payment of all claims hereunder and shall be
deemed to
be the agent of the others for such purposes and for the giving or
receiving of any notice required or permitted to be given by the
terms
hereof, provided that the Underwriter shall furnish each named Investment
Company with a copy of the bond and with any amendment thereto, together
with a copy of each formal filing of the settlement of each such
claim
prior to the execution of such
settlement,
|
|
(c)
|
the
Underwriter shall not be responsible for the proper application of
any
payment made hereunder to said first named
Insured,
|
|
(d)
|
knowledge
possessed or discovery made by any partner, officer or supervisory
Employee of any Insured shall for the purposes of Section 4 and Section
13
of this bond constitute knowledge or discovery by all the Insured,
and (e)
if the first named Insured ceases for any reason to be covered under
this
bond, then the Insured next named shall thereafter be considered
as the
first named Insured for the purposes of this
bond.
|
SECTION
17. NOTICE AND CHANGE OF CONTROL
Upon
the
Insured's obtaining knowledge of a transfer of its outstanding voting securities
which results in a change in control (as set forth in Section 2(a) (9) of the
Investment Company Act of 1940) of the Insured, the Insured shall within thirty
(30) days of such knowledge give written notice to the Underwriter setting
forth:
|
(a)
|
the
names of the transferors and transferees (or the names of the beneficial
owners if the voting securities are requested in another name),
and
|
|
(b)
|
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
|
|
(c)
|
the
total number of outstanding voting
securities.
|
As
used
in this section, control means the power to exercise a controlling influence
over the management or policies of the Insured.
Failure
to give the required notice shall result in termination of coverage of this
bond, effective upon the date of stock transfer for any loss in which any
transferee is concerned or implicated.
Such
notice is not required to be given in the case of an Insured which is an
Investment Company.
SECTION
18. CHANGE OR MODIFICATION
This
bond
or any instrument amending or effecting same may not be changed or modified
orally. No changes in or modification thereof shall be effective unless made
by
written endorsement issued to form a part hereof over the signature of the
Underwriter's Authorized Representative. When a bond covers only one Investment
Company no change or modification which would adversely affect the rights of
the
Investment Company shall be effective prior to 60 days after written
notification has been furnished to the Securities and Exchange Commission,
Washington, D.C. by the insured or by the Underwriter. If more than one
Investment Company is named as the Insured herein, the Underwriter shall give
written notice to each investment Company and to the Securities and Exchange
Commission, Washington, D.C. not less than 60 days prior to the effective date
of any change or modification which would adversely affect the rights of such
Investment Company.
IN
WITNESS WHEREOF, the Underwriter has caused this bond to be executed on the
Declarations Page.
POLICYHOLDER
NOTICE
Thank
you
for purchasing insurance from a member company of American International
Group, Inc. (AIG). The AIG member companies generally pay compensation
to brokers and independent agents, and may have paid compensation
in connection with your policy. You can review and obtain information
about the nature and range of compensation paid by AIG member companies
to brokers and independent agents in the United States by visiting our website
at www.aigproducercompensation.com or by calling AIG at 1-800-706-3102.
ENDORSEMENT
#1
This
endorsement, effective 12:01
AM July
30, 2006
|
forms
a part of policy
number 673-44-72
|
issued
to PROSPECT
ENERGY CORPORATION LLC |
|
by National
Union Fire Insurance Company of Pittsburgh,
Pa.
|
COMPUTER
SYSTEMS/VIT
It
is
agreed that:
1.
|
The
attached bond is amended by adding an additional Insuring Agreement
as
follows:
|
COMPUTER
SYSTEMS
Loss
resulting directly from a fraudulent
|
(1)
|
entry
of data into, or
|
|
(2)
|
change
of data elements or programs within
|
a
Computer System; provided the fraudulent entry or change causes
|
(a)
|
Property
to be transferred, paid or
delivered,
|
|
(b)
|
an
account of the Insured, or of its customer, to be added, deleted,
debited
or credited, or
|
|
(c)
|
an
unauthorized account or a fictitious account to be debited or credited;
|
|
(3)
|
voice
instructions or advices having been transmitted to the insured or
its
agent(s)
by telephone;
|
and
provided further, the fraudulent entry or change is made or caused by an
individual
acting with the manifest intent to:
|
(a)
|
cause
the Insured or its agent(s) to sustain a loss,
and
|
|
(b)
|
obtain
financial benefit for that individual or for other persons intended
by that individual to receive financial
benefit,
|
|
(c)
|
and
further provided such voice instructions or
advices:
|
|
(i)
|
were
made by a person who purported to represent an individual
authorized to make such voice instructions or advices;
and
|
|
(ii)
|
were
electronically recorded by the Insured or its
agent(s).
|
END
1
ENDORSEMENT
#1
(Continued)
This
endorsement, effective 12:01
AM July
30, 2006
|
forms
a part of policy
number 673-44-72
|
issued
to PROSPECT
ENERGY CORPORATION LLC |
|
by National
Union Fire Insurance Company of Pittsburgh,
Pa.
|
|
(4)
|
It
shall be a condition to recovery under the Computer Systems Rider
that
the
Insured or its agent(s) shall to the best of their ability electronically
record
all voice instructions or advices received over telephone. The Insured
or
its agent(s) warrant that they shall make their best efforts to maintain
the electronic recording system on a continuous basis. Nothing, however,
in this Rider
shall bar the insured from recovery where no recording is available
because of mechanical failure of the device used in making such recording,
or because of failure of the media used to record a conversation
from any
cause,
or error or omission of any Employee(s) or agent(s) of the
Insured.
|
SCHEDULE
OF SYSTEMS
Insureds
Proprietary System
2.
|
As
used in this Rider, Computer System
means
|
|
(a)
|
computers
with related peripheral components, including storage components,
wherever located,
|
|
(b)
|
systems
and applications software,
|
|
(d)
|
related
communication networks or customer communication systems,
and
|
|
(e)
|
related
Electronic Funds Transfer Systems,
|
by
which
data are electronically collected, transmitted, processed, stored, and
retrieved,
3.
|
In
addition to the exclusions in the attached bond, the following exclusions
are applicable
to this Insuring Agreement:
|
|
(a)
|
Loss
resulting directly or indirectly from the theft of confidential
information, material
or data; and
|
|
(b)
|
Loss
resulting directly or indirectly from entries or changes made by
an
individual
authorized to have access to a Computer System who acts in good
faith
on instructions, unless such instructions are given to that individual
by
a
software contractor (or by a partner, officer or employee thereof)
authorized
by the Insured to design, develop, prepare, supply service, write
or
implement programs for the Insured's Computer
System.
|
END
1
ENDORSEMENT
#1
(Continued)
This
endorsement, effective 12:01
AM July
30, 2006
|
forms
a part of policy
number 673-44-72
|
issued
to PROSPECT
ENERGY CORPORATION LLC |
|
by National
Union Fire Insurance Company of Pittsburgh,
Pa.
|
4.
|
The
following portions of the attached bond are not applicable to this
Rider:
|
|
(a)
|
the
initial paragraph of the bond preceding the Insuring Agreements which
reads
"... at any time but discovered during the Bond
Period,"
|
5.
|
The
coverage afforded by this rider applies only to loss discovered by
the
Insured during the period this Rider is in
force.
|
6.
|
All
loss or series of losses involving the fraudulent activity of one
individual, or involving fraudulent activity in which one individual
is
implicated, whether or not that
individual is specifically identified, shall be treated as one loss.
A
series of losses
involving unidentified individuals but arising from the same method
of
operation
may be deemed by the Underwriter to involve the same individual and
in
that event shall be treated as one
loss.
|
7.
|
The
Limit of Liability for the coverage provided by this Rider shall
be
One Million Dollars
($1,000,000).
|
8.
|
The
Underwriter shall be liable hereunder for the amount by which one
loss
shall be in excess of Ten Thousand Dollars ($10,000)
(herein called the Deductible Amount) but
not in excess of the Limit of Liability stated
above.
|
9.
|
If
any loss is covered under this insuring Agreement and any other Insuring
Agreement
or Coverage, the maximum amount payable for such loss shall not
exceed
the largest amount available under anyone Insuring Agreement or
Coverage.
|
10.
|
Coverage
under this Rider shall terminate upon termination or cancellation
of the
bond
to which this Rider is attached. Coverage under this rider may also
be
terminated
or cancelled without cancelling the bond as an
entirety:
|
|
(a)
|
60
days after receipt by the Insured of written notice from the Underwriter
of
its desire to terminate or cancel coverage under this Rider,
or
|
|
(b)
|
immediately
upon receipt by the Underwriter of a written request from the Insured
to terminate or cancel coverage under this
Rider.
|
The
Underwriter shall refund to the Insured the unearned premium for this coverage
under
this Rider, The refund shall be computed at short rates if this Rider is
terminated
or cancelled or reduced by notice from, or at the instance of, the Insured.
END1
ENDORSEMENT
#1
(Continued)
This
endorsement, effective 12:01
AM July
30, 2006
|
forms
a part of policy
number 673-44-72
|
issued
to PROSPECT
ENERGY CORPORATION LLC |
|
by National
Union Fire Insurance Company of Pittsburgh,
Pa.
|
11.
|
Section
4-LOSS-NOTICE-PROOF-LEGAL PROCEEDING of the Conditions and Limitations
of this bond is amended by adding the following
sentence:
|
"Proof
of
Loss resulting from Voice instructions or advices covered under this bond
shall
include Electronic Recordings of such Voice Instructions or
advices."
12.
|
Notwithstanding
the foregoing, however, coverage afforded by this Rider is not
designed
to provide protection against loss covered under a separate Electronic
and
Computer
Crime Policy by whatever title assigned or by whatever Underwriter
written.
Any loss which is covered under such separate Policy is excluded
from
coverage
under this bond; and the Insured agrees to make claim for such loss
under
its
separate Policy.
|
|
/s/
illegible
|
|
AUTHORIZED
REPRESENTATIVE
|
END1
ENDORSEMENT#
2
This
endorsement, effective 12:01
AM July
30, 2006
|
forms
a part of policy
number 673-44-72
|
issued
to PROSPECT
ENERGY CORPORATION LLC |
|
by National
Union Fire Insurance Company of Pittsburgh,
Pa.
|
THIS
ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY.
COVERAGE
TERRITORY ENDORSEMENT
Payment
of loss under this policy shall only be made in full compliance with all United
States
of
America economic or trade sanction laws or regulations, including, but not
limited
to, sanctions, laws and regulations administered and enforced by the U.S.
Treasury Department's Office of Foreign Assets Control ("OFAC").
|
/s/
illegible
|
|
AUTHORIZED
REPRESENTATIVE
|
END
002
ENDORSEMENT
# 3
This
endorsement, effective 12:01
AM July
30, 2006
|
forms
a part of policy
number 673-44-72
|
issued
to PROSPECT
ENERGY CORPORATION LLC |
|
by National
Union Fire Insurance Company of Pittsburgh,
Pa.
|
FORMS
INDEX ENDORSEMENT
The
contents of the Policy is comprised of the following forms:
FORM
NUMBER
|
EDITION
DATE
|
FORM
TITLE
|
MNSCPT
|
|
NU
INVESTMENT COMPANY BLANKET BOND POLICY DEC
|
41206
|
9/84
|
NU
INVESTMENT COMPANY BLANKET BOND POLICY GUTS
|
MNSCPT
|
|
COMPUTER
SYSTEMS/VIT
|
89644
|
07/05
|
COVERAGE
TERRITORY ENDORSEMENT (OFAC)
|
78859
|
10/01
|
FORMS
INDEX ENDORSEMENT
|
ALL
OTHER
TERMS AND CONDITIONS OF THE POLICY REMAIN UNCHANGED.
|
/s/
illegible
|
|
AUTHORIZED
REPRESENTATIVE
|
END
003
Prospect
Energy Corporation
Board
Resolution
Approval
of Fidelity and Related Bond
RESOLVED,
that the Corporation, Adviser and Administrator shall be named as an insured
under an insured fidelity bond having an aggregate coverage of $1 million
issued by National Union Fire Insurance Company of Pittsburgh, PA., a reputable
fidelity
insurance company, against larceny and embezzlement and such other types of
losses as are included in standard fidelity bonds, covering the officers and
the
other employees of the Corporation from time to time, containing such provisions
as may be required by the rules promulgated under the 1940 Act;
FURTHER
RESOLVED, that the proposed form and amount of the fidelity
bond considered herein be, and the same hereby are, approved after consideration
of
all
factors deemed relevant by the Board of Directors (all voting) and separately
approved by vote of the Directors who are not "interested persons' of the
Corporation (as defined in the 1940 Act), including, but not limited to the
amount of the bond, the expected value of the assets of the Corporation to
which
any person covered under the bond
may
have access, the amount of the premium for such bond, the type and terms of
the
arrangements made for the custody and safekeeping of the Corporation's assets,
and the nature of the securities in the Corporation's portfolio;
FURTHER
RESOLVED, that the officers of the Corporation be, and each of
them
hereby is, authorized to obtain said fidelity bond in substantially the form
discussed at the meeting and pay the premium therefore;
FURTHER
RESOLVED, that the Secretary of the Corporation 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-l under
the 1940
Act.
|
AM
-243-00918-0
|
|
|
000
46
|
Page
8 of 19
|
|
ACCOUNT
NUMBER: 19-7057
|
|
PROSPECT
ENERGY CORPORATION
|
|
This
statement is for the period from August 1, 2006 to August 31,
2006
|
TRANSACTION
DETAIL (continued)
Date
|
|
|
|
Principal
|
|
|
Posted
|
|
Description
|
|
Cash
|
|
Balance
|
|
|
Inc.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,500.00
|
|
53,702,554.88
|
08-26-06
|
Cash
Disbursement
|
Paid
To
Aon Risk Services, Inc. Of New York
Outgoing
Domestic Wire
Disbursed
Wire Per Instructions
Client
Invoice #100000256588