<DOCUMENT>
<TYPE>40-17G
<SEQUENCE>1
<FILENAME>c44346.txt
<DESCRIPTION>RULE 17-G
<TEXT>
[ALGER LOGO]
VIA EDGAR ALGER
September 19, 2006
Branch of Registrations and Examinations
Office of Filings & Information Services
Securities and Exchange Commission
100 F Street, NE
Washington, DC 20549
RE: THE ALGER FAMILY OF FUNDS (COLLECTIVELY, THE "FUNDS") - FILING OF JOINT
FIDELITY BOND PURSUANT TO RULE 17G-1
To Whom It May Concern:
On behalf of the following registered investment companies (listed below and on
Schedule 1), enclosed herewith for filing is a copy of the Joint Insured
Fidelity Bond for the Funds, together with the statements and other materials
required by item (g) (1) of Rule 17g-l under the Investment Company Act of 1940,
including a copy of the appropriate resolutions adopted by a majority of the
Trustees/Directors of the Funds, including a majority of the Trustees/Directors
who are not "interested persons" of each Registered Investment Company listed
below.
The Alger Funds (formerly, The Alger Fund: File No. 811-1355)
The Alger American Fund (File No. 811-5550)
The Alger Institutional Funds (formerly, The Alger Institutional Fund:
File No. 811-7986)
Spectra Fund (File No. 811-1743)
Castle Convertible Fund, Inc. (File No. 811-2213)
The China-U.S. Growth Fund (formerly, The Global China Growth Fund: File
No. 811-21308)
The premium for the attached fidelity bond has been paid for the period
July 24, 2006 to July 24, 2007.
Please do not hesitate to call me at (212) 806-8838 if you require any
additional information. Thank you for your attention to this matter.
Best Regards,
/s/ Barry Mullen
Barry Mullen
Chief Compliance Officer
Enclosures
FRED ALGER MANAGEMENT, INC.
111 Fifth Avenue o New York, New York 10003 o 212.806.8800
<PAGE>
SCHEDULE 1
The Alger Funds (formerly, The Alger Fund: File No. 811-1355)
The Alger American Fund (File No. 811-5550)
The Alger Institutional Funds (formerly, The Alger Institutional Fund: File No.
811-7986)
Spectra Fund (File No. 811-1743)
Castle Convertible Fund, Inc. (File No. 811-2213)
The China-U.S. Growth Fund (formerly, The Global China Growth Fund: File No.
811-21308)
<PAGE>
<TABLE>
<S> <C>
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: 81448270
FRED ALGER MANAGEMENT, INC.
FEDERAL INSURANCE COMPANY
111 FIFTH AVENUE Incorporated under the laws of Indiana
NEW YORK, NY 10003 a stock insurance company herein called the COMPANY
Capital Center, 251 North Illinois, Suite 1100
Indianapolis, IN 46204-1927
</TABLE>
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ITEM 1. BOND PERIOD: from 12:01 a.m. on July 24, 2006
to 12:01 a.m. on July 24, 2007
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.
<TABLE>
<CAPTION>
DEDUCTIBLE
INSURING CLAUSE LIMIT OF LIABILITY AMOUNT
--------------- ------------------ ----------
<S> <C> <C>
1. Employee $ 6,850,000 $ 50,000
2. On Premises $ 6,850,000 $ 50,000
3. In Transit $ 6,850,000 $ 50,000
4. Forgery or Alteration $ 6,850,000 $ 50,000
5. Extended Forgery $ 6,850,000 $ 50,000
6. Counterfeit Money $ Not Covered $ N/A
7. Threats to Person $ Not Covered $ N/A
8. Computer System $ Not Covered $ N/A
9. Voice Initiated Funds Transfer Instruction $ Not Covered $ N/A
10. Uncollectible Items of Deposit $ 100,000 $ 50,000
11. Audit Expense $ Not Covered $ N/A
</TABLE>
ITEM 3. THE LIABILITY OF THE COMPANY IS ALSO SUBJECT TO THE TERMS OF THE
FOLLOWING ENDORSEMENTS EXECUTED SIMULTANEOUSLY HEREWITH:
1-4
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.
/s/ W. Andrew Mecan /s/ Thomas F. Motamed
Secretary President
Countersigned by /s/ Robert Hamburger
---------------- -------------------------
Authorized Representative
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ICAP Bond (5-98) - Federal
Form 17-02-1421 (Ed. 5-98) Page 1 of 1
Exhibit A
<PAGE>
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:
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INSURING CLAUSES
EMPLOYEE 1. Loss resulting directly from LARCENY or
EMBEZZLEMENT committed by any EMPLOYEE, alone
or in collusion with others.
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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.
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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.
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ICAP Bond (5-98)
Form 17-02-1421 (Ed. 5-98) Page 1 of 19
<PAGE>
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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.
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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, 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.
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ICAP Bond (5-98)
Form 17-02-1421 (Ed. 5-98) Page 2 of 19
<PAGE>
INSURING CLAUSES
EXTENDED FORGERY For the purpose of this INSURING CLAUSE, a
(CONTINUED) mechanically reproduced facsimile signature is
treated the same as a handwritten signature.
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COUNTERFEIT MONEY 6. Loss resulting directly from the receipt by
the ASSURED in good faith of any COUNTERFEIT
money.
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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.
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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.
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ICAP Bond (5-98)
Form 17-02-1421 (Ed. 5-98) Page 3 of 19
<PAGE>
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INSURING CLAUSES
(CONTINUED)
VOICE INITIATED FUNDS 9. LOSS resulting directly from VOICE INITIATED
TRANSFER INSTRUCTION FUNDS TRANSFER INSTRUCTION directed 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.
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UNCOLLECTIBLE ITEMS OF 10. Loss resulting directly from the ASSURED
DEPOSIT having credited an account of a 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.
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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.
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ICAP Bond (5-98)
Form 17-02-1421 (Ed. 5-98) Page 4 of 19
<PAGE>
GENERAL AGREEMENTS
ADDITIONAL COMPANIES A. If more than one corporation, or INVESTMENT
INCLUDED AS ASSURED COMPANY, or any combination of 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.
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REPRESENTATION MADE BY B. The ASSURED represents that all information it
ASSURED has furnished in the 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.
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ICAP Bond (5-98)
Form 17-02-1421 (Ed. 5-98) Page 5 of 19
<PAGE>
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GENERAL AGREEMENTS
(CONTINUED)
ADDITIONAL OFFICES OR C. If the ASSURED, other than an INVESTMENT
EMPLOYEES - CONSOLIDATION, COMPANY, while this Bond is in force, merges
MERGER OR PURCHASE OR or consolidates with, or purchases or acquires
ACQUISITION OF ASSETS OR assets or liabilities of another institution,
LIABILITIES - NOTICE the ASSURED shall not have the coverage
TO COMPANY afforded under this Bond for loss which has:
(1) occurred or will occur on premises, or
(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.
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CHANGE OF CONTROL - D. When the ASSURED learns of a change in control
NOTICE TO COMPANY (other than in an INVESTMENT 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.
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COURT COSTS AND E. The COMPANY will indemnify the ASSURED for
ATTORNEYS' FEES court costs and reasonable 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
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ICAP Bond (5-98)
Form 17-02-1421 (Ed. 5-98) Page 6 of 19
<PAGE>
GENERAL AGREEMENTS
COURT COSTS AND (3) in the absence of 1 or 2 above, an
ATTORNEYS' FEES arbitration panel agrees, after a review
(CONTINUED) of an agreed statement of facts between
the COMPANY and the ASSURED, 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.
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ICAP Bond (5-98)
Form 17-02-1421 (Ed. 5-98) Page 7 of 19
<PAGE>
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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
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ICAP Bond (5-98)
Form 17-02-1421 (Ed. 5-98) Page 8 of 19
<PAGE>
CONDITIONS AND
LIMITATIONS
DEFINITIONS (8) each natural person, partnership
(CONTINUED) or corporation authorized by
written 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.
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ICAP Bond (5-98)
Form 17-02-1421 (Ed. 5-98) Page 9 of 19
<PAGE>
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CONDITIONS AND
LIMITATIONS
DEFINITIONS f. FORGERY means the signing of the name of
(CONTINUED) another natural person with the 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
<PAGE>
CONDITIONS AND
LIMITATIONS
DEFINITIONS m. SUBSIDIARY means any organization that,
(CONTINUED) at the inception date of this Bond, 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
APPLICABLE TO ALL COVER:
INSURING CLAUSES
a. loss not reported to the COMPANY in
writing within sixty (60) days after
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
<PAGE>
--------------------------------------------------------------------------------
CONDITIONS AND
LIMITATIONS
GENERAL EXCLUSIONS - h. loss resulting from dishonest acts by
APPLICABLE TO ALL any member of the Board of Directors or
INSURING CLAUSES Board of Trustees of the ASSURED who is
(CONTINUED) not an EMPLOYEE, acting alone or in
collusion with others;
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
APPLICABLE TO ALL COVER:
INSURING CLAUSES EXCEPT
INSURING CLAUSE 1. a. loss caused by an EMPLOYEE, provided,
however, this Section 3.a. shall not
apply to loss covered under INSURING
CLAUSE 2. or 3. which results 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)
Form 17-02-1421 (Ed. 5-98) Page 12 of 19
<PAGE>
CONDITIONS AND
LIMITATIONS
SPECIFIC EXCLUSIONS - f. loss resulting from the failure for any
APPLICABLE TO ALL reason of a financial or depository
INSURING CLAUSES EXCEPT institution, its receiver or other
INSURING CLAUSE 1. liquidator to pay or deliver funds or
(CONTINUED) other PROPERTY to the ASSURED provided
further that this Section 3.f. shall not
apply to loss of PROPERTY resulting
directly from robbery, burglary,
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
APPLICABLE TO ALL COVER:
INSURING CLAUSES EXCEPT
INSURING CLAUSES 1., 4., a. loss resulting from the complete or
AND 5. partial non-payment of or default on any
loan whether such loan was procured in
good faith or through trick, artifice,
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
REDUCTION AND NON- Bond, this Bond shall continue in force for
ACCUMULATION OF LIABILITY the limit stated in the applicable sections of
ITEM 2. of the DECLARATIONS, 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
<PAGE>
--------------------------------------------------------------------------------
CONDITIONS AND
LIMITATIONS
LIMIT OF LIABILITY/NON- d. any one casualty or event other than
REDUCTION AND NON- those specified in a., b., or c. above,
ACCUMULATION OF LIABILITY
(CONTINUED) shall be deemed to be one loss and shall be
limited to the applicable LIMIT OF LIABILITY
stated in ITEM 2. 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.
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
PROOF - LEGAL PROCEEDINGS notice thereof at the earliest
AGAINST COMPANY practicable moment, not to exceed sixty
(60) 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.
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
<PAGE>
CONDITIONS AND
LIMITATIONS
NOTICE TO COMPANY - f. Proof of loss involving VOICE INITIATED
PROOF - LEGAL PROCEEDINGS FUNDS TRANSFER INSTRUCTION shall include
AGAINST COMPANY electronic recordings of such
(CONTINUED) instructions.
--------------------------------------------------------------------------------
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
<PAGE>
--------------------------------------------------------------------------------
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
- RECOVERY COMPANY shall be subrogated to 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
<PAGE>
CONDITIONS AND
LIMITATIONS
SUBROGATION - ASSIGNMENT d. fourth, to the ASSURED in satisfaction
- RECOVERY of any loss suffered by the ASSURED
(CONTINUED) which was not covered under this Bond.
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
<PAGE>
--------------------------------------------------------------------------------
CONDITIONS AND LIMITATIONS
TERMINATION If any partner, director, trustee, or
(CONTINUED) officer or supervisory employee of an
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
<PAGE>
CONDITIONS AND LIMITATIONS
CHANGE OR MODIFICATION If this Bond is for a joint ASSURED, no
(CONTINUED) charge 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 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
<PAGE>
Effective date of
this endorsement: July 24, 2006 FEDERAL INSURANCE COMPANY
Endorsement No.: 1 Bond
To be attached to and form a
part of Policy Number: 81448270
Issued to: FRED ALGER MANAGEMENT, INC.
--------------------------------------------------------------------------------
COMPLIANCE WITH APPLICABLE TRADE SANCTION LAWS RIDER
It is agreed that this insurance does not apply to the extent that trade or
economic sanctions or other laws or regulations prohibit the coverage provided
by this insurance.
ALL OTHER TERMS AND CONDITIONS OF THIS BOND REMAIN UNCHANGED.
Date: August 18, 2006 By /s/ Robert Hamburger
------------------------------
Authorized Representative
Form 14-02-9228 (Ed. 4/2004)
<PAGE>
FEDERAL INSURANCE COMPANY
Endorsement No.: 2 Bond
Bond Number: 81448270
NAME OF ASSURED: FRED ALGER MANAGEMENT, INC.
--------------------------------------------------------------------------------
NEW YORK AMENDATORY ENDORSEMENT
It is agreed that this Bond is amended as follows:
1. By adding to Section 13, Termination, the following:
Bonds In Effect Sixty (60) Days Or Less
If this Bond has been in effect for less than sixty (60) days and if it is
not a renewal Bond, the COMPANY may terminate it for any reason by mailing
or delivering to the ASSURED and to the authorized agent or broker, if
any, written notice of termination at least sixty (60) days before the
effective date of termination.
Bonds In Effect More Than Sixty (60) Days
If this Bond has been in effect for sixty (60) days or more, or if it is a
renewal of a Bond issued by the COMPANY, it may be terminated by the
COMPANY by mailing or delivering to the ASSURED and to the authorized
agent or broker, if any, written notice of termination at least sixty (60)
days before the effective date of termination. Furthermore, when the Bond
is a renewal or has been in effect for sixty (60) days or more, the
COMPANY may terminate only for one or more of the reasons stated in 1-7
below.
1. Nonpayment of premium;
2. Conviction of a crime arising out of acts increasing the hazard
insured against;
3. Discovery of fraud or material misrepresentation in the obtaining of
this Bond or in the presentation of a claim thereunder;
4. Violation of any provision of this Bond that substantially and
materially increases the hazard insured against, and which occurred
subsequent to inception of the current BOND PERIOD;
5. If applicable, material physical change in the property insured,
occurring after issuance or last annual renewal anniversary date of
this Bond, which results in the property becoming uninsurable in
accordance with the COMPANY's objective, uniformly applied
underwriting standards in effect at the time this Bond was issued or
last renewed; or material change in the nature or extent of this
Bond occurring after issuance or last annual renewal anniversary
date of this Bond, which causes the risk of loss to be substantially
and materially increased beyond that contemplated at the time this
Bond was issued or last renewed;
ICAP Bond - New York
Form 17-02-2863 (Rev. 7-03) Page 1
<PAGE>
6. A determination by the Superintendent of Insurance that continuation
of the present premium volume of the COMPANY would jeopardize the
COMPANY's policyholders, creditors or the public, or continuing the
Bond itself would place the COMPANY in violation of any provision of
the New York Insurance Code; or
7. Where the COMPANY has reason to believe, in good faith and with
sufficient cause, that there is a probable risk or danger that the
PROPERTY will be destroyed by the ASSURED for the purpose of
collecting the insurance proceeds.
Notice Of Termination
Notice of termination under this SECTION shall be mailed to the ASSURED
and to the authorized agent or broker, if any, at the address shown on the
DECLARATIONS of this Bond. The COMPANY, however, may deliver any notice
instead of mailing it.
Return Premium Calculations
The COMPANY shall refund the unearned premium computed pro rata if this
Bond is terminated by the COMPANY."
2. By adding a new Section reading as follows:
"Section 14. Election To Conditionally Renew / Nonrenew This Bond
Conditional Renewal
If the COMPANY conditionally renews this Bond subject to:
1. Change of limits of liability;
2. Change in type of coverage;
3. Reduction of coverage;
4. Increased deductible;
5. Addition of exclusion; or
6. Increased premiums in excess of 10%, exclusive of any premium
increase due to and commensurate with insured value added; or as a
result of experience rating, retrospective rating or audit; the
COMPANY shall send notice as provided in Notices Of Nonrenewal And
Conditional Renewal immediately below.
Notices Of Nonrenewal And Conditional Renewal
1. If the COMPANY elects not to renew this Bond, or to conditionally
renew this Bond as provided herein, the COMPANY shall mail or
deliver written notice to the ASSURED at least sixty (60) but not
more than one hundred twenty (120) days before:
a. The expiration date; or
b. The anniversary date if this Bond has been written for a term
of more than one year.
ICAP Bond - New York
Form 17-02-2863 (Rev. 7-03) Page 2
<PAGE>
2. Notice shall be mailed or delivered to the ASSURED at the address
shown on the DECLARATIONS of this Bond and the authorized agent or
broker, if any. If notice is mailed, proof of mailing shall be
sufficient proof of notice.
3. Paragraphs 1. and 2. immediately above shall not apply when the
ASSURED, authorized agent or broker, or another insurer has mailed
or delivered written notice to the COMPANY that the Bond has been
replaced or is no longer desired.
3. By adding to General Agreement B., Representations Made By Assured, the
following:
No misrepresentation shall be deemed material unless knowledge by the
COMPANY would have lead to the COMPANY'S refusal to write this Bond.
This Endorsement applies to loss discovered after 12:01 a.m. on July 24, 2006.
ALL OTHER TERMS AND CONDITIONS OF THIS BOND REMAIN UNCHANGED.
Date: August 18, 2006 By /s/ Robert Hamburger
------------------------------
Authorized Representative
ICAP Bond - New York
Form 17-02-2863 (Rev. 7-03) Page 3
<PAGE>
FEDERAL INSURANCE COMPANY
Endorsement No: 3 Bond
Bond Number: 81448270
NAME OF ASSURED FRED ALGER MANAGEMENT, INC.
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NAME OF ASSURED ENDORSEMENT
It is agreed that the NAME OF ASSURED in the DECLARATIONS is amended to read as
follows:
CASTLE CONVERTIBLE FUND, INC.
SPECTRA FUND
THE ALGER FUND
THE ALGER AMERICAN FUND
THE ALGER INSTITUTIONAL FUND
AND THEIR CORRESPONDING SERIES/PORTFOLIOS
THE CHINA-U.S. GROWTH FUND
This Endorsement applies to loss discovered after 12:01 a.m. on July 24, 2006. \
ALL OTHER TERMS AND CONDITIONS OF THIS BOND REMAIN UNCHANGED.
Date: August 18, 2006 By /s/ Robert Hamburger
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Authorized Representative
ICAP Bond
Form 17-02-0949 (Rev. 1-97) Page 1
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FEDERAL INSURANCE COMPANY
Endorsement No.: 4 Bond
Bond Number: 81448270
NAME OF ASSURED: FRED ALGER MANAGEMENT, INC.
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DELETING VALUATION-OTHER PROPERTY ENDORSEMENT
It is agreed that this Bond is amended by deleting in its entirety the paragraph
titled Other Property in Section 9., Valuation.
This Endorsement applies to loss discovered after 12:01 a.m. on July 24, 2006.
ALL OTHER TERMS AND CONDITIONS OF THIS BOND REMAIN UNCHANGED.
Date: August 18, 2006 By /s/ Robert Hamburger
------------------------------
Authorized Representative
ICAP Bond
Form 17-02-2437 (Ed. 1-01)
<PAGE>
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)
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CHUBB & SON, DIV. OF FEDERAL INSURANCE COMPANY
AS MANAGER OF THE MEMBER INSURERS OF THE
CHUBB GROUP OF INSURANCE COMPANIES
POLICYHOLDER
DISCLOSURE NOTICE OF
TERRORISM INSURANCE COVERAGE
(FOR POLICIES WITH NO TERRORISM EXCLUSION OR SUBLIMIT)
You are hereby notified that, under the Terrorism Risk Insurance Act of 2002
(the "Act") effective November 26, 2002, this policy makes available to you
insurance for losses arising out of certain acts of international terrorism.
Terrorism is defined as any act certified by the Secretary of the Treasury, in
concurrence with the Secretary of State and the Attorney General 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 acting on behalf of any foreign person
or foreign interest, 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 90% of covered
terrorism losses that exceed the statutorily established deductible to be paid
by the insurance company providing the coverage. 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.
Form 10-02-1281 (Ed. 1/2003)
<PAGE>
REGULAR MEETING OF THE BOARD OF TRUSTEES/DIRECTORS
111 FIFTH AVENUE, 2ND FLOOR, NEW YORK, NY
SEPTEMBER 12, 2006
THE ALGER FUNDS
THE ALGER AMERICAN FUND
THE ALGER INSTITUTIONAL FUNDS
SPECTRA FUND
CASTLE CONVERTIBLE FUND, INC.
THE CHINA-U.S. GROWTH FUND
(All Funds)
RESOLVED, that the joint insured fidelity bond written by Chubb Group of
Insurance Companies (the "Bond") in the amount of $6,850,000 covering, among
others, officers and employees of The Alger Funds, Castle Convertible Fund,
Inc., Spectra Fund, The Alger American Fund, The Alger Institutional Funds and
The China-U.S. Growth Fund, in accordance with the requirements of Rule 17g-l
under the Investment Company Act of 1940, as amended, (the "Act"), is hereby
ratified and approved and the bond is reasonable in form and amount, after
having given due consideration to, among other things, the value of the
aggregate assets of the Trust/Fund to which any person covered under the Bond
may have access, the type and terms of the arrangements made for the custody and
safekeeping of the Trust/Fund's assets and the nature of the securities in the
Trust/Fund's Portfolios; and further
RESOLVED, that the premium to be paid annually by the Trust/Fund under the
Bond be, and hereby is, approved by vote of a majority of the Board of
Trustees/Directors and separately by a majority of the independent
Trustees/Directors, after having given due consideration to, among other things,
the number of other parties insured under the Bond, the nature of business
activities of those other parties, the amount of the Bond and of the premium
therefor, the ratable allocation of the premium among the parties named as
insureds and the extent to which the share of the premium allocated to the
Trust/Fund under the Bond is less than the premium the Trust/Fund would have had
to pay had it maintained a single insured bond; and further
RESOLVED, that the continuation of the Bond be, and hereby is, approved by
vote of a majority of the Board of Trustees/Directors and separately by a
majority of the independent Trustees/Directors and further
RESOLVED, that Barry Mullen, Chief Compliance Officer of the Trust, be,
and he hereby is, designated as the officer who shall make the filings and give
the notices required by paragraph (g) of Rule 17g-1.
Exhibit B
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REGISTERED MANAGEMENT INVESTMENT COMPANY (REMIC) BOND RENEWAL
ESTIMATE OF RULE 17G-1 REQUIRED LIMIT FOR A SINGLE INSURED BOND
Current Program - July 24, 2006 to July 24, 2007
Current Limit on Liability - $6,850,000
Annual Premium - $23,187
TOTAL ASSETS (IN
MILLIONS) AS OF
THE FUND'S MOST
RECENT FISCAL RULE 17G-1 REQUIRED
QTR END PRIOR TO LIMIT FOR A SINGLE PREMIUM
FUND DATE OF COVERAGE INSURED BOND ALLOCATION
------------------------- ---------------- ------------------- ----------
The Alger Funds -
4/30/06 $ 2,365.8 $ 1,700,000 $ 6,257
The Alger American
Fund - 6/30/06 $ 2,330.6 $ 1,700,000 $ 6,257
The Alger Institutional
Fund - 4/30/06 $ 1,910.9 $ 1,500,000 $ 5,521
Castle Convertible Fund
- 4/30/06 $ 63.3 $ 400,000 $ 1,472
Spectra Fund - 4/30/06 $ 217.2 $ 600,000 $ 2,208
The China-U.S. Growth
Fund - 4/30/06 $ 60.3 $ 400,000 $ 1,472
------------------- ----------
TOTAL $ 6,300,000 $ 23,187
------------------- ----------
Based on the above table and as required by Rulel7d-1(d)(7), the allocation of
the renewal premium to each of the funds is fair and reasonable based on the
proportionate share of the sum of what the premiums would have been if such
insurance coverage were purchased separately by each fund.
Exhibit C
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PREMIUM BILL
Insured: FRED ALGER MANAGEMENT, INC. Date: August 18, 2006
Producer: ACORDIA OF MINNESOTA, INC.
Company: FEDERAL INSURANCE COMPANY
THIS BILLING IS TO BE ATTACHED TO AND FORM PART OF THE BOND REFERENCED BELOW.
NOTE: PLEASE RETURN THIS BILL WITH REMITTANCE AND NOTE HEREON ANY CHANGES. BILL
WILL BE RECEIPTED AND RETURNED TO YOU PROMPTLY UPON REQUEST.
PLEASE REMIT TO PRODUCER INDICATED ABOVE. PLEASE REFER TO:
EFFECTIVE DATE BOND NUMBER COVERAGE PREMIUM
-------------- ----------- ----------------- ----- -----------
July 24, 2006 81448270 Renewal/ICAP-Bond $ 23,187.00
To
July 24, 2007
15% Commission
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TOTAL $ 23187.00
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<PAGE>
AMENDED AND RESTATED
AGREEMENT CONCERNING ALLOCATION OF
FIDELITY BOND PREMIUMS AND RECOVERIES
Amended and Restated Agreement dated as of the 12TH day of SEPTEMBER, 2006
among each Fund listed on Schedule 1 (collectively, the "Funds").
WHEREAS, each Fund is named insured under the fidelity bond (the "Bond")
written by Chubb Group of Insurance Companies (the "Insurer") in the amount of
$6.85 million; and
WHEREAS, the Funds desire to enter into an agreement pursuant to Rule
17g-l(f) under the Investment Company Act of 1940, as amended (the "1940 Act");
NOW, THEREFORE, the Funds do hereby agree as follows:
1. The premium payable on the Bond by each Fund shall be allocated in
proportion to each Fund's minimum of separate bond coverage.
2. In the event that recovery is received under the Bond as a result of a
loss sustained by a Fund and one or more other Funds, such Fund shall
receive a share of the recovery at least equal to the amount it would have
received had it provided and maintained a separate Bond under Rule
17g-l(d) under the 1940 Act ("Separate Bond").
3. In the event that the claims of loss of the Funds are so related that the
Insurer is entitled to assert that the claims must be aggregated with the
results that the total amount payable on such claims is limited to the
face amount of the Bond, the following rules for determining the
priorities among the Funds for satisfaction of the claims under the Bond
shall apply:
A. First, all claims of each Fund which have been duly proven and
established under the Bond shall be satisfied up to minimum amount
of a separate Bond for such Fund; and
B. Second, the remaining amount of insurance, if any, shall then be
applied to the claims of the Funds in proportion to the total of the
unsatisfied amount of the claims of each Fund.
4. If the Funds' investment advisor, distributor, or an affiliate of either
in the future serves as an investment advisor, sub-investment advisor,
administrator, or distributor to any other investment company (an
"Additional Fund"), and if the Insurer is willing to add the Additional
Fund as a named insured under the Bond, such Additional Fund shall become
subject to this Agreement upon addition to the Bond and notice of such
addition shall be given to each of the Funds hereunder; PROVIDED, however,
that the amount of the Bond is increased, if necessary, by an amount so
that the aggregate amount of the Bond is not less than the minimum amount
which would have been required for each named insured, including any
Additional Fund, to obtain under Rule 17g-l(d) under the 1940 Act.
5. Attached hereto as Schedule C is a list of the assets of each of the Funds
as of the end of the respective Fund's last fiscal quarter, together with
an indication of the
Exhibit D
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minimum bond that be provided and maintained under Rule 17g-l(d) under the
1940 Act for a fund with assets of that amount.
IN WITNESS WHEREOF, each Fund has caused this Agreement to be
executed by one of its officers thereunto duly authorized as of the date
above written.
The Funds listed on Schedule 1
By: /s/ Barry Mullen
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Barry Mullen
Title: Chief Compliance
Officer
Exhibit D
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