Approval of Annual Fidelity Bond Renewal
WHEREAS, Section 17(g) of the Investment Company Act of 1940, as amended (the 1940 Act),
and Rule 17g-1(a) thereunder, require each business development company (BDC), such as Solar Capital Ltd. (the Company) to provide and maintain a bond which shall be issued by a reputable fidelity
insurance company, authorized to do business in the place where the bond is issued, to protect the BDC against larceny and embezzlement, covering each officer and employee of the BDC who may singly, or jointly with others, have access to the
securities or funds of the BDC, either directly or through authority to draw upon such funds of, or to direct generally, the disposition of such securities, unless the officer or employee has such access solely through his position as an officer or
employee of a bank (each, a covered person); and
WHEREAS, Rule 17g-1 specifies
that the bond may be in the form of (i) an individual bond for each covered person, or a schedule or blanket bond covering such persons, (ii) a blanket bond which names the Company as the only insured, or (iii) a bond which names the
Company and one or more other parties as insureds in a joint insured bond, as permitted by Rule 17g-1; and
WHEREAS, Rule 17g-1 requires that a majority of directors who are not interested persons of the BDC, as such
term is defined under the 1940 Act (the Non-Interested Directors), approve periodically (but not less than once every 12 months) the reasonableness of the form and amount of the bond,
with due consideration to the value of the aggregate assets of the Company to which any covered person may have access, the type and terms of the arrangements made for the custody and safekeeping of such assets, and the nature of securities and
other investments to be held by the Company, and pursuant to factors contained in Rule 17g-1, which are described in the accompanying memorandum provided herewith; and
WHEREAS, under Rule 17g-1, the Company is required to make certain filings with the U.S. Securities and Exchange
Commission (the Commission) and give certain notices to each member of the Companys Board of Directors (the Board) in connection with the bond, and designate an officer who shall make such
filings and give such notices; and
WHEREAS, the Board, including all of the
Non-Interested Directors, have considered the expected aggregate value of the securities and funds of the Company to which the Companys officers and employees may have access (either directly or through
authority to draw upon such funds or to direct generally the disposition of such securities), the type and terms of the arrangements made for the custody of such securities and funds, the nature of securities and other investments to be held by the
Company, the accounting procedures and controls of the Company, the nature and method of conducting the operations of the Company, the requirements of Section 17(g) of the 1940 Act and Rule 17g-1 thereunder, and all other factors deemed
relevant by the Board, including the Non-Interested Directors;
NOW, THEREFORE,
BE IT RESOLVED, that having considered the expected aggregate value of the securities and funds of the Company to which the Companys officers and employees may have access (either directly or through authority to draw upon such funds or to
direct generally the disposition of such securities), the type and terms of the arrangements made for the custody of such securities and funds, the nature of securities and other investments to be held by the Company, the accounting procedures and
controls of the Company, the nature and method of conducting the operations of the Company, the requirements of Section 17(g) of the 1940 Act and Rule 17g-1 thereunder, and all other factors deemed relevant by the Board, including the Non-Interested Directors, the Board, including all of the Non-Interested Directors, determine that the amount, type, form, premium and coverage, covering the officers and
employees of the Company and insuring the Company against loss from fraudulent or dishonest acts, including larceny and embezzlement, issued by National Union Fire Insurance Company of Pittsburgh, Pennsylvania in the amount of $5,000,000 (the
Joint Fidelity Bond) be, and hereby are approved; and
FURTHER RESOLVED, that the
Board, including all of the Non-Interested Directors, have determined the portion of the premium to be paid by the Company be, and it hereby is, approved, taking all relevant factors into consideration
including, but not limited to, the number of the other insured parties named as insureds, the nature of business activities of the other insured parties, the amount of the Joint Fidelity Bond and the amount of the premium for such Joint Fidelity
Bond, the ratable allocation of the premium among the insureds, and the extent to which the share of the premium allocated to the Company is less than the premium the Company would have had to pay had such joint insured bond not been obtained;
and
FURTHER RESOLVED, that the Authorized Officers of the Company be, and each of them hereby is, authorized
and directed to cause the Company to pay its ratable allocation of the annual premium payable with respect to the Joint Fidelity Bond and to enter into and execute, on behalf of the Company, an agreement reflecting the provisions of the Joint
Fidelity Bond and relating to the division of proceeds in the event of a joint fidelity loss, as required by Rule 17g-1(f) (the Joint Insured Bond Allocation Agreement); and