Carlyle GMS Finance, Inc. 520 Madison Avenue, 38th Floor New York, New York 10022		Matthew Cottrell Secretary (212) 813-4900

May 4, 2015

Securities and Exchange Commission

100 F Street, NE

Washington, DC 20549

VIA EDGAR

 

RE:	Rule 17g-1 Fidelity Bond Filing Information with Respect to Period Covering April 12, 2015 through April 12, 2016 for Carlyle GMS Finance, Inc. (814-00995) and NF Investment Corp. (814-01004)

Dear Sir or Madam:

Enclosed for filing, pursuant to Rule 17g-1 of the Investment Company Act of 1940, as amended (the “Investment Company Act”), please find the following information with respect to the Carlyle GMS Finance, Inc. (“Carlyle GMS Finance”) and NF Investment Corp. (“NF Investment” each a “Company” and collectively with Carlyle GMS Finance, the “Companies”). Please note for the Commission’s records, the following:

 

a.

A copy of the Companies’ executed Joint Fidelity Bond is enclosed under Exhibit 1;

 

b.

A copy of the resolution from the March 11, 2015 meeting of Carlyle GMS Finance’s Board of Directors at which a majority of directors not were considered “interested persons” within the meaning of the Investment Company Act, approving the amount, type, form and coverage of the Joint Fidelity Bond as enclosed under Exhibit 2;

 

c.

If the Companies were not participants in the Joint Fidelity Bond, they would have each maintained a single insured bond which in the aggregate would not have exceeded $1,600,000;

 

d.

The Joint Fidelity Bond will cover the period from April 12, 2015 through April 12, 2016;

 

e.

The premiums have been paid for the period from April 12, 2015 through April 12, 2016; and

 

f.

A copy of the agreement between each Company and all of the other named insureds entered into pursuant to paragraph (f) of Rule 17g-1 is enclosed under Exhibit 3.

Please contact me if you have any questions or require additional information.

Very truly yours,

 

\s\ Matthew Cottrell

Matthew Cottrell

Secretary

Enclosures

BERKLEYCRIME

 

 

 

EXPERTS FOCUSED ON YOUR PROTECTION. WE DELIVER.

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April 9, 2015

Cara LaTorre

Aon Risk Services Northeast, Inc.

199 Water Street, 32nd Floor

New York, NY 10038

 

Re:	Carlyle GMS Finance, Inc.

Policy # BFBD-45000280-20

Dear Cara,

Thank you for insuring your account with Berkley Crime. Attached please find a copy of the policy for the above referenced account. In the event of loss, please contact:

Ms. Donna Sofinowski

Assistant Vice President, Claims

849 Fairmount Avenue, Suite 301

Towson, Maryland 21286

Phone (toll free): (866) 539-3995 ext. 6318

Fax (toll free): (866) 915-7879

E-Mail: claims@berkleycrime.com

Please feel free to contact me with any additional questions.

Sincerely,

 

Matthew McNamara

Underwriting Manager

MMcNamara@BerkleyCrime.com

757 Third Avenue, 10th Floor, New York, NY 10017 PH. 844.44.CRIME

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				PRODUCER Cara LaTorre Aon Risk Services Northeast, Inc. 199 Water Street, 32nd Floor New York, NY 10038
Underwritten By BERKLEY REGIONAL INSURANCE COMPANY
Administrative Office:		Issuing Office:
475 Steamboat Road		29 South Main Street, Suite 308
Greenwich, CT 06830		West Hartford, CT 06107

FINANCIAL INSTITUTION BOND

Standard Form No. 14, Revised to October, 1987

                                 Bond No. BFBD-45000280-20

BERKLEY REGIONAL INSURANCE COMPANY

(Herein called Underwriter)

DECLARATIONS

 

Item 1.

Name of Insured (herein called Insured):

Carlyle GMS Finance, Inc.

Principal Address:

520 Madison Ave

New York, NY 10022

 

Item 2.

Bond Period: from 12:01 a.m. on 04/12/2015 to 12:01 a.m. on 04/12/2016

(MONTH, DAY, YEAR) (MONTH, DAY, YEAR)

 

Item 3.

The Aggregate Limit of Liability of the Underwriter during the Bond Period shall be

 

Item 4.

Subject to sections 4 through 11 hereof,

The Single Loss Limit of Liability is $2,000,000

And the Single Loss Deductible is $100,000

Provided, however, that if any amounts are inserted below opposite specified Insuring Agreements or Coverage, those amounts shall be controlling. Any amount set forth below shall be part of and not in addition to amounts set forth above. (If an Insuring Agreement or Coverage is to be deleted, Insert “Not Covered.”)

Amount applicable to:

 

		Single Loss Limit of Liability				Single Loss Deductible
Insuring Agreement (D)—FORGERY OR ALTERATION		$	2,000,000			$	100,000
Insuring Agreement (E)—SECURITIES		$	2,000,000			$	100,000
Coverage on Partners			NOT COVERED				NOT COVERED
Optional Insuring Agreements and Coverages
1. Computer Systems Fraud		$	2,000,000			$	100,000
2. Data Processing Service Operations			NOT COVERED				NOT COVERED
3. Voice Initiated Transfer Fraud		$	2,000,000			$	100,000
4. Telefacsimile Transfer Fraud		$	2,000,000			$	100,000
5. Destruction of Data or Programs by Hacker		$	2,000,000			$	100,000
6. Destruction of Data or Programs by Virus		$	2,000,000			$	100,000
7. Voice Computer Systems Fraud			NOT COVERED				NOT COVERED
Fidelity Claims Expense		$	100,000			$	0
Stop Payment		$	100,000			$	5,000
Unauthorized Signatures		$	2,000,000			$	100,000

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 5.

The liability of the Underwriter is subject to the terms of the following riders attached hereto: BCR FIB 00 01 15

 

TSB 5062b		Page 1 of 7

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Item 6.

The Insured by the acceptance of this bond gives notice to the Underwriter terminating or canceling prior bond(s) or policy(ies) No.(s) BFI-71001860-14 such termination or cancellation to be effective as of the time this bond becomes effective.

IN WITNESS WHEREOF, Berkley Regional Insurance Company designated herein has executed and attested these presents.

 

 

 

Page 2 of 7		TSB 5062b

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The Underwriter, in consideration of an agreed premium, and in reliance upon all statements made and information furnished to the Underwriter by the Insured in applying for this bond, and subject to the Declarations, Insuring Agreements, General Agreements, Conditions and Limitations and other terms hereof, agrees to indemnify the Insured for:

INSURING AGREEMENTS

 

 

GENERAL AGREEMENTS

 

 

TSB 5062b		Page 3 of 7

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CONDITIONS AND LIMITATIONS

 

 

Page 4 of 7		TSB 5062b

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TSB 5062b		Page 5 of 7

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Page 6 of 7		TSB 5062b

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In witness whereof, the Underwriter has caused this bond to be executed on the Declarations page.

 

TSB 5062b		Page 7 of 7

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RIDER

To be attached to and form part of Bond No. BFBD-45000280-20 in favor of Carlyle GMS Finance, Inc.

It is agreed that:

1. “Employee” as used in the attached bond shall include any natural person who is a director or trustee of the Insured while such director or trustee is engaged in handling funds or other property of any Employee Welfare or Pension Benefit Plan owned, controlled or operated by the Insured or any natural person who is a trustee, manager, officer or employee of any such Plan.

2. If the bond, in accordance with the agreements, limitations and conditions thereof, covers loss sustained by two or more Employee Welfare or Pension Benefit Plans or sustained by any such Plan in addition to loss sustained by an Insured other than such Plan, it is the obligation of the Insured or the Plan Administrator(s) of such Plans under Regulations published by the Secretary of Labor implementing Section 13 of the Welfare and Pension Plans Disclosure Act of 1958 to obtain under one or more bonds issued by one or more Insurers an amount of coverage for each such Plan at least equal to that which would be required if such Plans were bonded separately.

3. In compliance with the foregoing, payment by the Company in accordance with the agreements, limitations and conditions of the bond shall be held by the Insured, or, if more than one, by the Insured first named, for the use and benefit of any Employee Welfare or Pension Benefit Plan sustaining loss so covered and to the extent that such payment is in excess of the amount of coverage required by such Regulations to be carried by said Plan sustaining such loss, such excess shall be held for the use and benefit of any other such Plan also covered in the event that such other Plan discovers that it has sustained loss covered thereunder.

4. If money or other property of two or more Employee Welfare or Pension Benefit Plans covered under the bond is commingled, recovery for loss of such money or other property through fraudulent or dishonest acts of Employees shall be shared by such Plans on a pro rata basis in accordance with the amount for which each such Plan is required to carry bonding coverage in accordance with the applicable provisions of said Regulations.

5. The Deductible Amount of this bond applicable to loss sustained by a Plan through acts committed by an Employee of the Plan shall be waived, but only up to an amount equal to the amount of coverage required to be carried by the Plan because of compliance with the provisions of the Employee Retirement Income Security Act of 1974.

6. Nothing herein contained shall be held to vary, alter, waive or extend any of the terms, conditions, provisions, agreements or limitations of the bond, other than as stated herein.

7. This rider is effective as of 12:01 a.m. on 04/12/2015 Accepted:

 

ERISA RIDER
TO COMPLY WITH BONDING REGULATIONS MADE APPLICABLE TO THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974.   NOTE: This rider should not be used for any insured exempted from the bonding provi sions of the Act.   REVISED TO JUNE, 1990   SR 6145b

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BOND NUMBER: BFBD-45000280-20		BCR FIB 00 01 15
INSURED: Carlyle GMS Finance, Inc.		RIDER #: 2
EFFECTIVE DATE: 04/12/2015		EXPIRATION DATE: 04/12/2016
DATE OF ISSUANCE: 04/09/2015

THIS RIDER CHANGES THE BOND. PLEASE READ IT CAREFULLY.

FORMS INDEX

Forms and Riders Forming Part of this Bond When Issued:

Form Number and Edition Date		Description of Form or Rider:
BCR WDC 01 01 15		Berkley Crime We Deliver Cover Page
BCR COV 01 01 15		Berkley Crime Cover Letter
TSB 5062b 10 87		Financial Institution Bond Form 14 Declarations
SR 6145b 06 90		Pension Plans, ERISA
BCR FIB 00 01 15		Forms Index
BCR FIB 01 01 15		Premium Rider
BCR FIB 02 01 15		Omnibus Named Insured Rider
BCR FIB 03 01 15		Credit Rating Cancellation Rider
BCR FIB 04 01 15		Fidelity Claims Expense Rider
BCR FIB 05 01 15		Audit Expense Coverage Rider (Amend Fidelity Insuring Agreement)
BCR FIB 06 01 15		Computer Crime Rider
BCR FIB 10 01 15		Unauthorized Signatures Rider
BCR FIB 12 01 15		Amend Insuring Agreement (A)—Fidelity Rider (Carve Back for Loans & Trading)
BCR FIB 13 01 15		Amend Insuring Agreement (F)—Counterfeit Currency Rider
BCR FIB 16 01 15		Amend Termination or Cancellation (Paragraph 1) Rider
BCR FIB 19 01 15		Stop Payment Rider
BCR FIB 24 01 15		Amend Exclusion J Rider (Racketeering)
BCR FIB 36 01 15		Revised Representation of Insured Rider
SR 5109b 09 07		Adding or Deducting Insureds Rider
SR 6180d 07 09		New York
BCR WDB 01 01 15		Berkley Crime We Deliver Back Page

All other terms, conditions, limitations and exclusions remain unchanged.

 

BCR FIB 00 01 15		Page 1 of 1      0

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BOND NUMBER: BFBD-45000280-20		BCR FIB 01 01 15
INSURED: Carlyle GMS Finance, Inc.		RIDER #: 3
EFFECTIVE DATE: 04/12/2015		EXPIRATION DATE: 04/12/2016
DATE OF ISSUANCE: 04/09/2015

THIS RIDER CHANGES THE BOND. PLEASE READ IT CAREFULLY.

PREMIUM RIDER

For the period from 12:01 A.M. on 04/12/2015 to 12:01 A.M. on 04/12/2016 the premium for the attached bond is $6,253.

All other terms, conditions, limitations and exclusions remain unchanged.

 

BCR FIB 01 01 15		Page 1 of 1      0

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BOND NUMBER: BFBD-45000280-20		BCR FIB 02 01 15
INSURED: Carlyle GMS Finance, Inc.		RIDER #: 4
EFFECTIVE DATE: 04/12/2015		EXPIRATION DATE: 04/12/2016
DATE OF ISSUANCE: 04/09/2015

THIS RIDER CHANGES THE BOND. PLEASE READ IT CAREFULLY.

OMNIBUS INSURED RIDER

The Named Insured is amended to include:

 

1.	Any entity which is subject to control by the Insured by reason of operation of such entity through voting control or by written contract.

 

2.	Any entity which is subject to control by the Insured by reason of an ownership interest in such entity in excess of 50%.

 

3.	Any entity in which the Insured has an ownership interest of 50% or less:

 

a.

if you are legally liable for loss sustained by the entity; or

 

b.

but only up to the proportion that your ownership interest in the entity bears to the total interest of all owners, if you are not legally liable for loss sustained by the entity.

 

4.	Any Employee Welfare or Pension Benefit Plan owned, controlled or operated by the Insured, that is required to be bonded under the Employee Retirement Income Security Act of 1974 and any amendments thereto.

All other terms, conditions, limitations and exclusions remain unchanged.

 

BCR FIB 02 01 15		Page 1 of 1      0

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BOND NUMBER: BFBD-45000280-20		BCR FIB 03 01 15
INSURED: Carlyle GMS Finance, Inc.		RIDER #: 5
EFFECTIVE DATE: 04/12/2015		EXPIRATION DATE: 04/12/2016
DATE OF ISSUANCE: 04/09/2015

THIS RIDER CHANGES THE BOND. PLEASE READ IT CAREFULLY.

CREDIT RATING CANCELLATION RIDER

In the event that a financial strength rating is issued for the Company (1) below A- by A.M. Best Company, Inc., or (2) below BBB by Standard & Poor’s, (hereinafter “Credit Rating Downgrade”), and the Insured notifies the Company of its intent to cancel this bond within 30 days after such Credit Rating Downgrade, the Company shall return the premium due to the Insured on a pro-rata basis.

All other terms, conditions, limitations and exclusions remain unchanged.

 

BCR FIB 03 01 15		Page 1 of 1      0

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BOND NUMBER: BFBD-45000280-20		BCR FIB 04 01 15
INSURED: Carlyle GMS Finance, Inc.		RIDER #: 6
EFFECTIVE DATE: 04/12/2015		EXPIRATION DATE: 04/12/2016
DATE OF ISSUANCE: 04/09/2015

THIS RIDER CHANGES THE BOND. PLEASE READ IT CAREFULLY.

FIDELITY CLAIMS EXPENSE RIDER

Subject to the Single Loss Limit of Liability and Single Loss Deductible shown in the DECLARATIONS, the attached bond is amended to include coverage for the following:

FIDELITY CLAIMS EXPENSE

Reasonable expenses necessarily incurred and paid by the Insured in preparing the proof of loss caused by dishonest or fraudulent acts of an Employee acting alone or in collusion with others which loss constitutes a valid and collectible loss that exceeds the Single Loss Deductible as shown in the DECLARATIONS applicable under INSURING AGREEMENT (A).

Any amount payable under this rider shall be paid to the Insured at the same time as the payment of the valid and collectible loss under INSURING AGREEMENT (A).

EXCLUSIONS Section 2. (u) (1) is deleted and replaced with the following:

 

(1)

in establishing the existence of or amount of loss covered under this bond, except to the extent covered under the portion of INSURING AGREEMENT (A) entitled to Fidelity Claims Expense Coverage, or

All other terms, conditions, limitations and exclusions remain unchanged.

 

BCR FIB 04 01 15		Page 1 of 1      0

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BOND NUMBER: BFBD-45000280-20		BCR FIB 05 01 15
INSURED: Carlyle GMS Finance, Inc.		RIDER #: 7
EFFECTIVE DATE: 04/12/2015		EXPIRATION DATE: 04/12/2016
DATE OF ISSUANCE: 04/09/2015

THIS RIDER CHANGES THE BOND. PLEASE READ IT CAREFULLY.

AUDIT EXPENSE COVERAGE RIDER

Subject to the Single Loss Limit of Liability and Single Loss Deductible shown in the DECLARATIONS, the attached bond is amended to include coverage for the following:

AUDIT EXPENSE COVERAGE

Expense incurred by the Insured for that part of the cost of audits or examination required by State or Federal supervisory authorities to be conducted either by such authorities or by independent accountants by reason of the discovery of loss sustained by the Insured through the dishonest or fraudulent acts 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 $100,000; it being understood, however, that such expense shall be deemed to be a loss sustained by the Insured through dishonest or fraudulent act of one or more of the Employees and the liability of the Underwriter under this paragraph of INSURING AGREEMENT (A) shall be part of and not in addition to the Single Loss Limit of Liability stated in Item 4 of the Declarations.

EXCLUSIONS Section 2. (u) (1) is deleted and replaced with the following:

 

(1)

in establishing the existence of or amount of loss covered under this bond, except to the extent covered under the portion of INSURING AGREEMENT (A) entitled to Audit Expense Coverage, or

All other terms, conditions, limitations and exclusions remain unchanged.

 

BCR FIB 05 01 15		Page 1 of 1      0

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BOND NUMBER: BFBD-45000280-20		BCR FIB 06 01 15
INSURED: Carlyle GMS Finance, Inc.		RIDER #: 8
EFFECTIVE DATE: 04/12/2015		EXPIRATION DATE: 04/12/2016
DATE OF ISSUANCE: 04/09/2015

THIS RIDER CHANGES THE BOND. PLEASE READ IT CAREFULLY.

COMPUTER CRIME RIDER

All of the terms, conditions and limitations of this financial institution bond shall apply to coverage as is afforded by this Rider unless specifically stated otherwise herein or in any Rider attached hereto.

Item 4 of the DECLARATIONS is amended by adding the following under Optional Insuring Agreements and Coverages:

 

		Single Loss				Single Loss
Insuring Agreements		Limit of Liability				Deductible
1. Computer Systems Fraud		$	2,000,000			$	100,000
2. Data Processing Service Operations			NOT COVERED				NOT COVERED
3. Voice Initiated Transfer Fraud		$	2,000,000			$	100,000
4. Telefacsimile Transfer Fraud		$	2,000,000			$	100,000
5. Destruction of Data or Programs by Hacker		$	2,000,000			$	100,000
6. Destruction of Data or Programs by Virus		$	2,000,000			$	100,000
7. Voice Computer Systems Fraud			NOT COVERED				NOT COVERED

Insuring Agreement 1 of this Rider is mandatory; all others are optional. If “Not Covered” is inserted opposite any specified optional Insuring Agreement, such Insuring Agreement and any other reference thereto in this Rider shall be deemed to be deleted therefrom.

Voice Initiated Transfer Fraud

Under the terms of the Voice Initiated Transfer Fraud Insuring Agreement, the Insured must place a verification call–back for each transfer in excess of $100,000.

Telefacsimile Transfer Fraud

Under the terms of the Telefacsimile Transfer Fraud Insuring Agreement, the Insured must place a verification call–back for each transfer in excess of $100,000.

The following are added as additional INSURING AGREEMENTS and CONDITIONS AND LIMITATIONS to the Bond:

INSURING AGREEMENTS

1. COMPUTER SYSTEMS FRAUD

Loss resulting directly from a fraudulent

 

(1)

entry of Electronic Data or Computer Program into, or

 

(2)

change of Electronic Data or Computer Program within any Computer System operated by the Insured, whether owned or leased; or any Computer System identified in the application for this bond; or a Computer System first used by the Insured during the bond period, as provided by General Agreement B;

provided the entry or change causes

 

(i)

property to be transferred, paid or delivered,

 

BCR FIB 06 01 15		Page 1 of 7      0

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(ii)

an account of the Insured, or of its customer, to be added, deleted, debited or credited, or

 

(iii)

an unauthorized account or a fictitious account to be debited or credited.

In this Insuring Agreement, fraudulent entry or change shall include such entry or change made by an employee of the Insured acting in good faith

 

(a)

on an instruction from a software contractor who has a written agreement with the Insured to design, implement or service programs for a Computer System covered by this Insuring Agreement, or

 

(b)

on an instruction transmitted by Tested telex or similar means of Tested communication identified in the application for this bond purportedly sent by a customer, financial institution, or automated clearing house.

2. DATA PROCESSING SERVICE OPERATIONS

Loss sustained by a Client of the Insured resulting directly from a fraudulent

 

(1)

entry of Electronic Data or a Computer Program into, or

 

(2)

change of Electronic Data or a Computer Program within a Computer System covered under the terms of Insuring Agreement 1, or

 

(3)

entry or change of Electronic Data during electronic transmission or physical transit from the Insured to its Client,

provided that the entry or change causes

 

(i)

property to be transferred, paid or delivered,

 

(ii)

an account of the Client, or a customer of the Client, to be added, deleted, debited or credited, or

 

(iii)

an unauthorized account or a fictitious account to be debited or credited,

and for which loss the Insured is legally liable to the Client as a provider of data processing services for such Client.

In this Insuring Agreement, fraudulent entry or change shall include such entry or change made by an employee of the Insured acting in good faith

 

(a)

on an instruction from a software contractor who has a written agreement with the Insured to design, implement or service programs for a Computer System covered by this Insuring Agreement, or

 

(b)

on an instruction transmitted by Tested telex or similar means of Tested communication identified in the application for this bond purportedly sent by a customer, financial institution, or automated clearing house.

In this Insuring Agreement, Client means an entity for whom the Insured serves as data processor under the terms of a written agreement.

3. VOICE INITIATED TRANSFER FRAUD

Loss resulting directly from the Insured having, in good faith, transferred Funds from a Customer’s account through a Computer System covered under the terms of Insuring Agreement 1 in reliance upon a fraudulent voice instruction transmitted by telephone which was purported to be from

 

(1)

an officer, director, partner or employee of a Customer of the Insured who was authorized by the Customer to instruct the Insured to make such transfer,

 

(2)

an individual person who is a Customer of the Insured, or

 

(3)

an employee of the Insured in another office of the Insured who was authorized by the Insured to instruct other employees of the Insured to transfer Funds,

and was received by an employee of the Insured specifically designated to receive and act upon such instructions, but the voice instruction was not from a person described in (1), (2), or (3) above, provided that

 

BCR FIB 06 01 15		Page 2 of 7      0

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(i)

such voice instruction was electronically recorded by the Insured and required password(s) or code word(s) given; and

 

(ii)

if the transfer was in excess of the amount shown on the Declarations Page as the verification call-back amount for this Insuring Agreement, the voice instruction was verified by a call-back according to a prearranged procedure.

As used in this Insuring Agreement, Customer means an entity or individual which has a written agreement with the Insured authorizing the Insured to rely on voice instructions to initiate transfers and has provided the Insured with the names of persons authorized to initiate such transfers, and with which the Insured has established an instruction verification mechanism.

4. TELEFACSIMILE TRANSFER FRAUD

Loss resulting directly from the Insured having, in good faith, transferred or delivered Funds, Certificated Securities or Uncertificated Securities through a Computer System covered under the terms of Insuring Agreement 1 in reliance upon a fraudulent instruction received through a Telefacsimile Device, and which instruction

 

(1)

purports and reasonably appears to have originated from

 

(a)

a Customer of the Insured,

 

(b)

another financial institution, or

 

(c)

another office of the Insured

 

but,

in fact, was not originated by the Customer or entity whose identification it bears and

 

(2)

contains a valid test code which proves to have been used by a person who was not authorized to make use of it, and

 

(3)

contains the name of a person authorized to initiate such transfer;

provided that, if the transfer was in excess of the amount shown on the Declarations Page as the verification call-back amount for this Insuring Agreement, the instruction was verified by a call-back according to a prearranged procedure.

As used in this Insuring Agreement, Customer means an entity or individual which has a written agreement with the Insured authorizing the Insured to rely on Telefacsimile Device instructions to initiate transfers and has provided the Insured with the names of persons authorized to initiate such transfers, and with which the Insured has established an instruction verification mechanism.

5. DESTRUCTION OF DATA OR PROGRAMS BY HACKER

Loss resulting directly from the malicious destruction of, or damage to, Electronic Data or Computer Programs owned by the Insured or for which the Insured is legally liable while stored within a Computer System covered under the terms of Insuring Agreement 1.

The liability of the Company shall be limited to the cost of duplication of such Electronic Data or Computer Programs from other Electronic Data or Computer Programs which shall have been furnished by the Insured.

In the event, however, that destroyed or damaged Computer Programs cannot be duplicated from other Computer Programs, the Company will pay the cost incurred for computer time, computer programmers, consultants or other technical specialists as is reasonably necessary to restore the Computer Programs to substantially the previous level of operational capability.

6. DESTRUCTION OF DATA OR PROGRAMS BY VIRUS

Loss resulting directly from the malicious destruction of, or damage to, Electronic Data or Computer Programs owned by the Insured or for which the Insured is legally liable while stored within a Computer System covered under the terms of Insuring Agreement 1 if such destruction or damage was caused by a computer program or similar instruction which was written or altered to incorporate a hidden instruction designed to destroy or damage Electronic Data or Computer Programs in the Computer System in which the computer program or instruction so written or so altered is used.

The liability of the Company shall be limited to the cost of duplication of such Electronic Data or Computer Programs from other Electronic Data or Computer Programs which shall have been furnished by the Insured.

 

BCR FIB 06 01 15		Page 3 of 7      0

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In the event, however, that destroyed or damaged Computer Programs cannot be duplicated from other Computer Programs, the Company will pay the cost incurred for computer time, computer programmers, consultants or other technical specialists as is reasonably necessary to restore the Computer Programs to substantially the previous level of operational capability.

 

Special

Condition:

Under this Insuring Agreement, “Single Loss” means all covered costs incurred by the Insured between the time destruction or damage is discovered and the time the Computer System is restored to substantially the previous level of operational capability. Recurrence of destruction or damage after the Computer System is restored shall constitute a separate “Single Loss.”

7. VOICE COMPUTER SYSTEM FRAUD

Loss resulting directly from charges for voice telephone long-distance toll calls which were incurred due to the fraudulent use or fraudulent manipulation of an Account Code or System Password required to obtain access to a Voice Computer System owned or leased by the Insured, installed on the Insured’s premises, whose System Administration is performed and controlled by the Insured; provided, however, that the unauthorized access was not made possible by

 

(1)

failure to incorporate a System Password feature or failure to change the System Password at least once every 30 days thereafter, or

 

(2)

failure to have a call-disconnect feature in operation to automatically terminate a caller’s access to the Voice Computer System after not more than three unsuccessful attempts to input an Account Code.

 

Special

Condition:

Under this Insuring Agreement, “Single Loss” means loss resulting from toll call charges made only on telephone lines directly controlled by one Voice Computer System and only toll call charges occurring for a period of not more than 30 days inclusive of the date on which the first such toll call charge was made.

CONDITIONS AND LIMITATIONS

Section 1. DEFINITIONS

As used in this Rider:

 

(a)

Account Code means a confidential and protected string of characters which identifies or authenticates a person and permits that person to gain access to a Voice Computer System for the purpose of making toll calls or utilizing voice mail box messaging capabilities or other similar functional features of the System;

 

(b)	Certificated Security means a share, participation or other interest in the property, of or an enterprise of, the issuer or an obligation of the issuer, which is:

 

(1)

represented by an instrument issued in bearer or registered form;

 

(2)

of a type commonly dealt in on securities exchanges or markets or commonly recognized in any area in which it is issued or dealt in as a medium for investment, and

 

(3)

either one of a class or series or by its terms divisible into a class or series of shares, participations, interests or obligations;

 

(c)	Computer Program means a set of related electronic instructions which direct the operations and functions of a computer or devices connected to it which enable the computer or devices to receive, process, store or send Electronic Data;

 

(d)	Computer System means

 

(1)

computers with related peripheral components, including storage components wherever located,

 

(2)

systems and applications software,

 

(3)

terminal devices, and

 

(4)

related communication networks

by which Electronic Data are electronically collected, transmitted, processed, stored and retrieved;

 

(e)	Electronic Data means facts or information converted to a form usable in a Computer System by Computer Programs and which is stored on magnetic tapes or disks, or optical storage disks or other bulk media;

 

(f)	Funds means Money on deposit in an account;

 

BCR FIB 06 01 15		Page 4 of 7      0

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(g)	Money means a medium of exchange in current use authorized or adopted by a domestic or foreign government as a part of its currency;

 

(h)

System Administration means the performance of security functions including but not limited to defining authorized persons to access a Voice Computer System and adding, changing and deleting Account Codes or passwords in connection therewith; and invoking or revoking a System option which directs telephone call routing or which adds, moves or drops telephone lines or which performs any other similar activity allowed by a hardware or software-based System option that has been incorporated by a manufacturer or vendor into a System or any component thereof provided said System option is not intended for the sole use of such manufacturer or vendor;

 

(i)

System Maintenance means the performance of hardware and software installation, diagnostics and corrections and similar activities that are performed in the usual custom and practice by a manufacturer or vendor to establish or maintain the basic operational functionality of a Voice Computer System or any component thereof;

 

(j)	System Password means a confidential and protected string of characters which identifies or authenticates a person and permits that person to gain access to a Voice Computer System or any portion thereof for the purpose of performing System Administration or System Maintenance activities;

 

(k)	Telefacsimile Device means a machine capable of sending or receiving a duplicate image of a document by means of electronic impulses transmitted through a telephone line and which reproduces the duplicate image on paper;

 

(l)

Tested means a method of authenticating the contents of a communication by placing a valid test key on it which has been agreed upon by the Insured and a customer, automated clearing house, or another financial institution for the purpose of protecting the integrity of the communication in the ordinary course of business;

 

(m)	Uncertificated Security means a share, participation or other interest in property of, or an enterprise of, the issuer or an obligation of the issuer, which is:

 

(1)

not represented by an instrument and the transfer of which is registered upon books maintained for that purpose by or on behalf of the issuer,

 

(2)

of a type commonly dealt in on securities exchanges or markets, and

 

(3)

either one of a class or series or by its terms divisible into a class or series of shares, participations, interests or obligations;

 

(n)	Voice Computer System means a Computer System installed in one location which functions as a private branch exchange (PBX), voice mail processor, automated call attendant or provides a similar capability used for the direction or routing of telephone calls in a voice communications network.

Section 2. EXCLUSIONS

This Rider does not cover:

 

(a)	any loss of the type or kind covered by the Insured’s financial institution bond, regardless of any deductible amount or limit of liability;

 

(b)

loss caused by a director or employee of the Insured or by a person in collusion with any director or employee of the Insured; (Collusion shall include the willful withholding of knowledge from the Insured by any director or employee that a fraudulent act by a person not an employee has been or will be perpetrated against the Insured.);

 

(c)	loss resulting directly or indirectly from entry or change of Electronic Data or Computer Programs in a Computer System, unless covered under Insuring Agreement 1 or 2;

 

(d)	loss resulting directly or indirectly from the Insured having transferred Funds in reliance on the validity of a voice instruction, unless covered under Insuring Agreement 1 or 3;

 

(e)	loss resulting directly or indirectly by the Insured having transferred or delivered Funds, Certificated Securities or Uncertificated Securities in reliance on an instruction received through a Telefacsimile Device, unless covered under Insuring Agreement 4;

 

(f)	loss resulting directly or indirectly from theft of confidential information;

 

BCR FIB 06 01 15		Page 5 of 7      0

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(g)	loss resulting directly or indirectly from payments made or withdrawals from a depositor’s account involving items of deposit which are not finally paid for any reason;

 

(h)	potential income, including but not limited to interest and dividends;

 

(i)	damages of any type for which the Insured is legally liable, except compensatory damages, but not multiples thereof, arising directly from a loss covered under this Rider;

 

(j)	loss resulting directly or indirectly from the assumption of liability by the Insured by contract unless the liability arises from a loss covered by this Rider and would be imposed on the Insured regardless of the existence of the contract;

 

(k)	any fees, costs and expenses incurred by the Insured

 

(1)

in establishing the existence of or amount of loss covered under this Rider, or

 

(2)

as a party to any legal proceeding whether or not such legal proceeding exposes the Insured to loss covered by this Rider;

 

(l)	indirect or consequential loss of any nature;

 

(m)	the cost of duplication of Electronic Data or Computer Programs, unless covered under Insuring Agreement 5 or 6;

 

(n)	loss involving a Voice Computer System, unless covered under Insuring Agreement 7;

 

(o)	loss involving automated mechanical devices which, on behalf of the Insured, disburse Money, accept deposits, cash checks, drafts or similar written instruments or make credit card loans;

 

(p)	loss resulting directly or indirectly from

 

(1)

written instructions or advices, or

 

(2)

telegraphic or cable instructions or advices;

unless the instructions or advices are Tested and the loss is covered under Insuring Agreement 1 or 2;

 

(q)

loss resulting directly or indirectly from negotiable instruments, securities, documents or other written instruments which bear a forged signature, or are counterfeit, altered or otherwise fraudulent and which are used as source documentation in the preparation of Electronic Data or manually keyed into a data terminal;

 

(r)	loss resulting directly or indirectly from the fraudulent preparation, or fraudulent modification of Computer Programs unless covered under Insuring Agreement 1 or 2;

 

(s)	loss resulting directly or indirectly from

 

(1)

mechanical failure, faulty construction, error in design, latent defect, fire, wear or tear, gradual deterioration, electrical disturbance or electrical surge which affects a Computer System, or

 

(2)

failure or breakdown of electronic data processing media, or

 

(3)

error or omission in programming or processing;

 

(t)	loss due to riot or civil commotion or loss due to military, naval or usurped power, war or insurrection;

 

(u)	loss resulting directly or indirectly from the effects of nuclear fission or fusion or radioactivity; provided, however, that this exclusion shall not apply to loss resulting from industrial uses of nuclear energy;

 

(v)	loss as a result of a threat

 

(1)

to do bodily harm to any person, or

 

(2)

to do damage to the premises or property of the Insured, or

 

(3)

to Computer System operations;

 

(w)	loss resulting directly or indirectly from the use of a telephone credit, debit, charge, identification or similar card to gain access to the Insured’s Voice Computer System;

 

(x)	loss resulting directly or indirectly from the use or purported use of credit, debit, charge, access, convenience, customer identification or other cards;

 

BCR FIB 06 01 15		Page 6 of 7      0

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(y)	loss resulting directly or indirectly from the input of Electronic Data into a Computer System terminal device either on the premises of a customer of the Insured or under the control of such customer by a person who had authorized access to the customer’s authentication mechanism.

SECTION 3. OWNERSHIP

This Rider shall apply to loss of Money, Certificated and Uncertificated Securities, Electronic Data, Computer Programs and other property

 

(1)	owned by the Insured,

 

(2)	held by the Insured in any capacity, or

 

(3)	for which the Insured is legally liable because of a loss covered by this Rider.

 

This	Rider shall be for the sole use and benefit of the Insured named in the DECLARATIONS.

SECTION 4. ADDITIONAL CONDITIONS AND LIMITATIONS

The following items are added to NOTICE/PROOF-LEGAL PROCEEDINGS AGAINST UNDERWRITER section of the financial institution bond to which this Rider is added:

 

(a)	Proof of loss for claim under the Voice Initiated Transfer Fraud Insuring Agreement must include electronic recordings of such voice instructions and the verification call-back, if such call-back was required.

 

(b)	Proof of loss for claim under the Telefacsimile Transfer Fraud Insuring Agreement must include a copy of the document reproduced by the Telefacsimile Device.

All other terms, conditions, limitations and exclusions remain unchanged.

 

BCR FIB 06 01 15		Page 7 of 7      0

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BOND NUMBER: BFBD-45000280-20		BCR FIB 10 01 15
INSURED: Carlyle GMS Finance, Inc.		RIDER #: 9
EFFECTIVE DATE: 04/12/2015		EXPIRATION DATE: 04/12/2016
DATE OF ISSUANCE: 04/09/2015

THIS RIDER CHANGES THE BOND. PLEASE READ IT CAREFULLY.

UNAUTHORIZED SIGNATURES RIDER

Subject to the Single Loss Limit of Liability and Single Loss Deductible shown in the DECLARATIONS, the attached bond is amended to include coverage for the following:

UNAUTHORIZED SIGNATURES

Loss resulting directly from the Insured having accepted, paid or cashed any check or withdrawal order made or drawn on a customer’s account which bears the signature or endorsement of one other than a person whose name and signature is on file with the Insured as a signatory on such account.

It shall be a condition precedent to the Insured’s right of recovery under this rider that the Insured shall have on file signatures of all persons who are authorized signatories on such account.

CONDITIONS AND LIMITATIONS Section 2. (a) is deleted and replace with the following:

(a) loss resulting directly or indirectly from forgery or alteration, except when covered under INSURING AGREEMENTS (A), (D), (E) or this rider.

All other terms, conditions, limitations and exclusions remain unchanged.

 

BCR FIB 10 01 15		Page 1 of 1      0

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BOND NUMBER: BFBD-45000280-20		BCR FIB 12 01 15
INSURED: Carlyle GMS Finance, Inc.		RIDER #: 10
EFFECTIVE DATE: 04/12/2015		EXPIRATION DATE: 04/12/2016
DATE OF ISSUANCE: 04/09/2015

THIS RIDER CHANGES THE BOND. PLEASE READ IT CAREFULLY.

AMEND INSURING AGREEMENT (A) – FIDELITY RIDER

(CARVE BACK FOR LOANS & TRADING)

INSURING AGREEMENT (A) is deleted and replaced with the following:

FIDELITY

(A) Loss resulting directly from

(1) dishonest or fraudulent acts committed by an Employee acting alone or in collusions with others. Such dishonest or fraudulent acts must be committed by the Employee with the intent:

 

(a)

to cause the Insured to sustain such loss, or

 

(b)

to obtain financial benefit for the Employee or another person or entity.

Notwithstanding the foregoing, it is agreed that with regard to Loans and/or Trading this bond covers only loss resulting directly from dishonest or fraudulent acts committed by an Employee with the intent to make and which results in a financial benefit for the Employee.

However, where the proceeds of a fraud perpetrated by an Employee arising from Loans and/or Trading are actually received by persons with whom the Employee was acting in collusion, but said Employee fails to derive a financial benefit therefrom, such a loss will nevertheless be covered hereunder as if the Employee had obtained such benefit provided the Insured establishes that the Employee intended to participate therein.

As used throughout this INSURING AGREEMENT, financial benefit does not include any employee benefits earned in the course of employment, including salaries, commissions, fees, bonuses, promotions, awards, profit sharing or pensions.

(2) the physical loss of or damage to Property, Electronic Data or Electronic Data Processing Media as a direct result of acts committed by an Employee (including malicious acts of an Employee) whether committed alone or in collusion with others.

The term “Electronic Data” as used in this INSURING AGREEMENT shall be deemed to mean facts or information converted to a form usable in a computer system and which is stored on Electronic Data Processing Media for use by computer programs.

The term “Electronic Data Media” as used in this INSURING AGREEMENT shall be deemed to mean punched cards, magnetic tapes, punched tapes or magnetic discs or other bulk media on which data are recorded.

The term “Loan” as used in this INSURING AGREEMENT shall be deemed to mean all extensions of credit by the Insured and all transactions creating a creditor relationship in favor of the Insured and all transactions by which the Insured assumes an existing creditor relationship.

The term “Trading” as used in this INSURING AGREEMENT shall be deemed to mean Trading or other dealings in securities, commodities, futures, options, foreign or federal funds, currencies, foreign exchange and the like.

All other terms, conditions, limitations and exclusions remain unchanged.

 

BCR FIB 12 01 15		Page 1 of 1      0

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BOND NUMBER: BFBD-45000280-20		BCR FIB 13 01 15
INSURED: Carlyle GMS Finance, Inc.		RIDER #: 11
EFFECTIVE DATE: 04/12/2015		EXPIRATION DATE: 04/12/2016
DATE OF ISSUANCE: 04/09/2015

THIS RIDER CHANGES THE BOND. PLEASE READ IT CAREFULLY.

REVISED INSURING AGREEMENT (F)—COUNTERFEIT

CURRENCY RIDER

INSURING AGREEMENT F. is deleted and replaced with the following:

COUNTERFEIT CURRENCY

(F) Loss resulting directly from the receipt by the Insured, in good faith, of any Counterfeit Money.

All other terms, conditions, limitations and exclusions remain unchanged.

 

BCR FIB 13 01 15		Page 1 of 1      0

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BOND NUMBER: BFBD-45000280-20		BCR FIB 16 01 15
INSURED: Carlyle GMS Finance, Inc.		RIDER #: 12
EFFECTIVE DATE: 04/12/2015		EXPIRATION DATE: 04/12/2016
DATE OF ISSUANCE: 04/09/2015

THIS RIDER CHANGES THE BOND. PLEASE READ IT CAREFULLY.

AMEND TERMINATION OR CANCELLATION

(PARAGRAPH 1) RIDER

CONDITIONS AND LIMITATIONS Section 12., paragraph one (a) is deleted and replaced with the following:

(a) 60 days after the receipt by the Insured of a written notice from the Underwriter of its desire to cancel this bond, or

All other terms, conditions, limitations and exclusions remain unchanged.

 

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BOND NUMBER: BFBD-45000280-20		BCR FIB 19 01 15
INSURED: Carlyle GMS Finance, Inc.		RIDER #: 13
EFFECTIVE DATE: 04/12/2015		EXPIRATION DATE: 04/12/2016
DATE OF ISSUANCE: 04/09/2015

THIS RIDER CHANGES THE BOND. PLEASE READ IT CAREFULLY.

STOP PAYMENT RIDER

Subject to the Single Loss Limit of Liability and Single Loss Deductible shown in the DECLARATIONS, the attached bond is amended to include coverage for the following:

STOP PAYMENT

Loss against any and all sums which the Insured shall become legally obligated to pay for damages:

(1) 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

(2) 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.

All other terms, conditions, limitations and exclusions remain unchanged.

 

BCR FIB 19 01 15		Page 1 of 1      0

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BOND NUMBER: BFBD-45000280-20		BCR FIB 24 01 15
INSURED: Carlyle GMS Finance, Inc.		RIDER #: 14
EFFECTIVE DATE: 04/12/2015		EXPIRATION DATE: 04/12/2016
DATE OF ISSUANCE: 04/09/2015

THIS RIDER CHANGES THE BOND. PLEASE READ IT CAREFULLY.

AMEND EXCLUSION J RIDER (RACKETEERING)

CONDITIONS AND LIMITATIONS Section 2. (j) is deleted and replaced with the following:

(j) damages resulting from any civil, criminal or other legal proceeding in which the Insured is adjudicated to have engaged in racketeering activity except when the Insured establishes that the act or acts giving rise to such damages were committed by an Employee under circumstances which result directly in a loss to the Insured covered by Insuring Agreement (A). For the purposes of this exclusion, “racketeering activity” is defined in 18 United States Code 1961 et seq., as amended.

All other terms, conditions, limitations and exclusions remain unchanged.

 

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BOND NUMBER: BFBD-45000280-20		BCR FIB 36 01 15
INSURED: Carlyle GMS Finance, Inc.		RIDER #: 15
EFFECTIVE DATE: 04/12/2015		EXPIRATION DATE: 04/12/2016
DATE OF ISSUANCE: 04/09/2015

THIS RIDER CHANGES THE BOND. PLEASE READ IT CAREFULLY.

REVISED REPRESENTATION OF INSURED RIDER

GENERAL AGREEMENT D. is deleted and replaced with the following:

D. 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.

Any intentional misrepresentation, omission, concealment or incorrect statement of a material fact, in the application or otherwise, shall be grounds for the rescission of this bond.

All other terms, conditions, limitations and exclusions remain unchanged.

 

BCR FIB 36 01 15		Page 1 of 1      0

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RIDER

To be attached to and form part of Financial Institution Bond, Standard Form No. 14, No. BFBD-45000280-20 in favor of Carlyle GMS Finance, Inc.

It is agreed that:

1. At the request of the Insured, the Underwriter adds to/deducts from the list of Insured under the attached bond the following:

Carlyle GMS Finance Administration LLC

Carlyle GMS Investment Management LLC

NF Investment Corp

2. This rider is effective as of 12:01 a.m. on 04/12/2015.

Accepted:

 

ADDING OR DEDUCTING INSUREDS RIDER
FOR USE WITH ALL FORMS OF BONDS CONTAINING A JOINT INSURED CLAUSE OR RIDER, TO ADD OR DEDUCT JOINT INSUREDS.
REVISED TO SEPTEMBER, 2007

 

SR 5109b		Copyright, The Surety & Fidelity Association of America, 2007		Page 1 of 1

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RIDER/ENDORSEMENT

To be attached to and form part of Financial Institution Bond or Computer Crime Policy for Financial Institutions, No. BFBD-45000280-20 in favor of Carlyle GMS Finance, Inc.

It is agreed that:

 

1.	Part (a) of the section entitled “Termination or Cancellation” of this bond/policy is deleted and cancellation of this bond/policy by the Underwriter/Company is subject to the following provisions:

 

a.

If this bond/policy has been in effect for 60 days or less, the underwriter/company may cancel this bond/policy by mailing or delivering to the first named Insured written notice of cancellation at least:

 

(1)

20 days before the effective date of cancellation if the underwriter/company cancels for any reason not included in paragraph (2) below.

 

(2)

15 days before the effective date of cancellation if the underwriter/company cancels for any of the following reasons:

 

(i)

Nonpayment of premium provided, however, that a notice of cancellation for this reason shall inform the Insured of the amount due;

 

(ii)

Conviction of a crime arising out of acts increasing the hazard insured against;

 

(iii)

Discovery of fraud or material misrepresentation in the obtaining of the bond/policy or in the presentation of a claim;

 

(iv)

After issuance of the bond/policy or after the last renewal date, discovery of an act or omission, or a violation of a bond/policy condition, that substantially and materially increases the hazard insured against, and that occurred subsequent to inception of the current bond/policy period;

 

(v)

Material physical change in the property insured, occurring after issuance or last annual renewal anniversary date of the bond/policy, that results in the property becoming uninsurable in accordance with our objective, uniformly applied underwriting standards in effect at the time the bond/policy was issued or last renewed; or material change in the nature or extent of the risk, occurring after issuance or last annual renewal anniversary date of the bond/policy, that causes the risk of loss to be substantially and materially increased beyond that contemplated at the time the bond/policy was issued or last renewed;

 

(vi)

Required pursuant to a determination by the Superintendent that continuation of our present premium volume would jeopardize our solvency or be hazardous to the interest of our policyholders, our creditors or the public;

 

(vii)

A determination by the Superintendent that the continuation of the bond/policy would violate, or would place us in violation of, any provision of the Insurance Code; or

 

(viii)

Where the underwriter/company has reason to believe, in good faith and with sufficient cause, that there is a probable risk of danger that an insured will destroy, or permit to be destroyed, the insured property for the purpose of collecting the insurance proceeds. If the underwriter/company cancels for this reason, the first named Insured may make a written request to the Insurance Department, within 10 days of receipt of this notice, to review the cancellation decision. Also, the underwriter/company will simultaneously send a copy of the cancellation notice to the Insurance Department.

NEW YORK STATUTORY RIDER/ENDORSEMENT

FOR USE WITH FINANCIAL INSTITUTION BONDS, STANDARD FORMS NOS. 14, 15, 24 AND 25, AND EXCESS BANK EMPLOYEE DISHONESTY BOND,

STANDARD FORM NO. 28, AND COMPUTER CRIME POLICY FOR FINANCIAL INSTITUTIONS TO COMPLY WITH STATUTORY REQUIREMENTS.

REVISED TO JULY, 2009

 

SR 6180d		Copyright, The Surety & Fidelity Association of America, 2009		Page 1 of 2

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b.

If this bond/policy has been in effect for more than 60 days, or if this bond/policy is a renewal or continuation of a bond/policy the underwriter/company issued, the underwriter/company may cancel only for any of the reasons listed in paragraph 2. above, provided the underwriter/company mails the first named Insured written notice at least 15 days before the effective date of cancellation. If cancellation is for nonpayment of premium, the notice of cancellation shall inform the Insured of the amount due.

 

c.

The underwriter/company will mail or deliver notice, including the reason for cancellation, to the first named Insured at the address shown in the bond/policy and to the authorized agent or broker.

 

d.

If this bond/policy is canceled, the underwriter/company will send the first named Insured any premium refund due. If the underwriter/company cancels, the refund will be pro rata. If the first named Insured cancels, the refund may be less than pro rata. However, when the premium is advanced under a premium finance agreement, the cancellation refund will be pro rata. Under such financed policies, the underwriter/company will be entitled to retain a minimum earned premium of 10% of the total premium or $60, whichever is greater. The cancellation will be effective even if the underwriter/company has not made or offered a refund.

 

e.

If one of the reasons for cancellation in paragraph a.(2) exists, the underwriter/company may cancel this entire bond/policy, even if the reason for cancellation pertains only to a new coverage or endorsement initially effective subsequent to the original issuance of this bond/policy.

 

2.	Renewal or nonrenewal of this bond/policy by the Underwriter/Company is subject to the following provisions:

 

a.

If the underwriter/company decides not to renew this bond/policy, it will send notice as provided in paragraph c. below.

 

b.

If the underwriter/company conditionally renews this bond/policy subject to a change of limits, change in type of coverage, reduction of coverage, increased deductible, addition of exclusion, or increased premiums in excess of 10% (exclusive of any premium increase due to insured value added, increased exposure units, or as a result of experience rating, loss rating, retrospective rating or audit) the underwriter/company will send notice as provided in paragraph c. below.

 

c.

If the underwriter/company decides not to renew this bond/policy, or to conditionally renew this bond/policy as provided in paragraph 2.b. above, the underwriter/company will mail or deliver written notice to the first named Insured shown in the Declarations at least 60 days, but not more than 120 days, before the expiration date of the bond/policy or, the anniversary date if this is a continuous bond/policy.

 

d.

Notice will be mailed or delivered to the first named Insured at the address shown in the bond/policy and to the authorized agent or broker. If notice is mailed, proof of mailing will be sufficient proof of notice.

 

e.

Notice will include the availability of loss information and the specific reason(s) for nonrenewal or conditional renewal, including the amount of any premium increase for conditional renewal and a description of any other changes.

 

f.

If the underwriter/company violates the provisions of paragraph c. above by sending the first named Insured an incomplete or late conditional renewal notice or a late nonrenewal notice:

 

(1)

prior to the expiration date of the bond/policy, coverage will remain in effect at the same terms and conditions of this bond/policy at the lower of the current rates or the prior period’s rates until 60 days after such notice is mailed or delivered, unless the first named Insured, during this 60 day period, has replaced the coverage or elects to cancel; provided, however, that if the insured elects to renew on the basis of a conditional renewal notice and the notice was provided at least thirty (30) days prior to the expiration date of this Policy, then the terms, conditions and rates set forth in the conditional renewal notice shall apply as of the renewal date; or

 

(2)

on or after the expiration date of this bond/policy, coverage will remain in effect at the same terms and conditions of this bond/policy for another required bond/policy period, at the lower of the current rates or the prior period’s rates, unless the first named Insured, during this additional required bond/policy period, has replaced the coverage or elects to cancel.

 

g.

The underwriter/company need not send notice of nonrenewal or conditional renewal if the first named Insured, its authorized agent or broker or another insurer of the first named Insured mails or delivers notice that the bond/policy has been replaced or is no longer desired.

 

SR 6180d		Copyright, The Surety & Fidelity Association of America, 2009		Page 2 of 2

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Berkley Crime

29 South Main Street, 3rd FL I West Hartford, CT 06107 I 844.44.CRIME

Berkleycrime.com

Copy of the Resolution Approved at the March 11, 2015 Meeting of Carlyle GMS

Finance, Inc. (the “Company”)

CARLYLE GMS FINANCE, INC.

APPROVAL OF JOINT FIDELITY BOND

WHEREAS, Section 17(g) of the 1940 Act and Rule 17g-1(a) thereunder, which apply to the Company pursuant to Section 59 of the 1940 Act, require a BDC, such as the Company, to provide and maintain a bond which has been issued by a reputable fidelity insurance company authorized to do business in the place where the bond is issued, to protect the Company against larceny and embezzlement, covering each officer and employee of the Company who may singly, or jointly with others, have access to the securities or funds of the Company, either directly or through authority to draw upon such funds of, or to direct generally, the disposition of such securities, unless the officer or employee has such access solely through his position as an officer or employee of a bank (each, a “covered person”);

WHEREAS, Rule 17g-1 under the 1940 Act requires that a majority of the Non- Interested Directors approve periodically (but not less than once every 12 months), in accordance with the provisions of Rule 17g-1, the reasonableness of the form and amount of the bond, with due consideration to, among other things, 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

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

NOW, THEREFORE, BE IT RESOLVED, that, having considered all factors deemed relevant by the Board, including, but not limited to: (i) the expected aggregate value of the securities and funds of the Company to which officers or employees of the Company may have access (either directly or through authority to draw upon such funds or to direct generally the disposition of such securities); (ii) the type and terms of the arrangements made for the custody of such securities and funds; (iii) the nature of securities and other investments to be held by the Company; (iv) the accounting procedures and controls of the Company; (v) the nature and method of conducting the operations of the Company and (vi) the requirements of Section 17(g) of the 1940 Act and Rule 17g-1 thereunder, the Board, including all of the Non-Interested Directors, hereby determines that the amount, type, form, portion of the premium to be paid by the Company and coverage of the fidelity bond (the “Fidelity Bond”), in substantially the form presented at the meeting, covering, among others, the officers and employees of the Company and insuring the Company against loss from fraudulent or dishonest acts, including larceny and embezzlement, issued by Berkley Regional Insurance Company having an aggregate coverage of $2,000,000 which amount may increase pursuant to the terms of the Fidelity Bond), is fair and reasonable, and it hereby is confirmed, ratified and approved; and it is further

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RESOLVED, that any executive officers of the Company (each, an “Authorized Officer” and, collectively, the “Authorized Officers”) be, and each of them individually hereby is, authorized, empowered and directed to take all appropriate actions, with the advice of legal counsel to the Company, to provide and maintain the Fidelity Bond on behalf of the Company; and it is further

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

RESOLVED, that the Authorized Officers be, and each of them individually hereby is, authorized and directed to cause the Company to pay its ratable allocation of the annual premium payable with respect to the Fidelity Bond; and it is further

RESOLVED, that the form, terms, and provisions of the joint allocation agreement entered into by the Company, its affiliate, NF Investment Corp., and any subsidiaries thereof which reflects the provisions of the Fidelity Bond and relate to the sharing of premiums and division of proceeds in the event of a joint fidelity loss, as required by Rule 17g-1(f) (the “Joint Allocation Agreement”), a copy of which is presented at the meeting, and the transactions contemplated thereby, be, and they hereby are, confirmed, ratified, approved and adopted in all respects; and it is further

RESOLVED, that the execution and delivery of the Joint Fidelity Bond Agreement by the Authorized Officers be, and they hereby are, confirmed, ratified, approved and adopted in all respects; and it is further

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

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

JOINT ALLOCATION AGREEMENT

THIS JOINT ALLOCATION AGREEMENT (this “Agreement”), effective as of the 11^th day of March, 2015, by and between Carlyle GMS Finance, Inc. (“Carlyle GMS Finance”) and NF Investment Corp. (“NF Investment Corp.”), each affiliates and business development companies that have elected or intend to elect to be regulated under the Investment Company Act of 1940, as amended (the “1940 Act”), and any subsidiaries thereof (each an “Insured” and together, the “Insureds”).

WHEREAS, pursuant to the requirements of Section 17(g) of the 1940 Act and Rule 17g-1 adopted thereunder (“Rule 17g-1”), which apply to a business development company pursuant to Section 59 of the 1940 Act, each Insured is required to maintain a bond issued by a reputable fidelity insurance company, authorized to do business in the place where the bond is issued, against larceny and embezzlement, covering certain officers and employees of the Insureds; and

WHEREAS, the Insureds propose entering into a joint bond with Berkley Regional Insurance Company, in accordance with Rule 17g-1 (such joint bond as proposed to be executed and as it may be amended from time to time, hereinafter, the “Bond”); and

WHEREAS, the Insureds, in order to be covered jointly under the Bond, are required by Rule 17g-1 to be parties to an agreement that establishes the criteria by which the premiums and any recoveries under the Bond shall be allocated among them.

NOW, THEREFORE, it is agreed as follows:

1. Amount of Coverage Maintained. The amount of fidelity coverage under the Bond shall at all times be at least equal to the sum of: (a) the total amount of coverage the Insured would have been required to provide and maintain individually pursuant to the schedule set forth in paragraph (d)(1) of Rule 17g-1 had the other not been a named insured under the Bond, plus (b) the amount of each bond which each other named Insured would have been required to provide and maintain pursuant to federal statutes or regulations had such Insured not been named as an insured under the Bond (such amounts, respectively, the “minimum coverage requirement” for each Insured). The amount of fidelity coverage under the Bond shall be approved at least annually by the Board of Directors of each Insured, including a majority of those directors who are not “interested persons” of the Insureds.

2. Allocation of Recovery. In the event an actual pecuniary loss is suffered by the Insureds under circumstances covered by the Bond, any recovery under the Bond shall be allocated among such Insureds as follows:

a. If the total amount of coverage provided under the Bond exceeds or is equal to the amount of the combined total loss suffered by the Insureds suffering the loss, then each such Insured shall be entitled to recover the amount of its actual loss.

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b. If the amount of loss suffered by each Insured suffering loss exceeds its minimum coverage requirement as set forth in Section 1 hereof and the amount of such Insureds’ combined actual losses exceeds the total amount of coverage under the Bond, then each such Insured shall be entitled to recover (i) its minimum coverage requirement, and (ii) to the extent there exists any excess coverage, the proportion of such excess coverage that its minimum coverage requirement bears to the amount of the combined minimum coverage requirements of the Insureds suffering actual loss; provided, however, that if the actual loss of any such Insureds is less than the sum of (i) and (ii) above, then such difference shall be recoverable by the other Insured in proportion to its minimum coverage requirements.

c. If (i) the amount of actual loss suffered by any Insured is less than or equal to its minimum coverage requirement, (ii) the amount of actual loss of the other Insured exceeds its minimum coverage requirements, and (iii) the amount of the combined actual losses of the Insureds exceeds the total amount of coverage provided under the Bond, then any Insured that has suffered an amount of actual loss less than or equal to its minimum coverage requirement shall be entitled to recover its actual loss. The other Insured that has suffered actual loss shall be entitled to recover the remainder of the coverage under the Bond.

d. Notwithstanding anything to the foregoing, no Insured shall receive any recovery until the each Insured has at least received at least the amount it would have received had it provided and maintained a single insured bond with each Insured’s minimum coverage requirements.

3. Allocation of Premiums. The Insureds shall divide the initial premium and any additional premiums which may become due under the Bond among them based upon their relative net assets at the time of payment of the premium involved; provided that the premium to be paid by the Insureds shall be that approved by each Insured’s Board of Directors in accordance with Rule 17g-1(e).

4. Amendment. This Agreement may not be modified or amended in any manner except by written agreement executed by the parties hereto.

5. Filing with the Commission. A copy of this Agreement, and any amendment thereto, shall be filed with the SEC within 10 days after receipt by the Insureds of an executed copy of the Bond.

6. Governing Law. This Agreement shall be construed and the provisions thereof interpreted under and in accordance with the laws of the State of New York.

IN WITNESS WHEREOF, the Insureds have caused this Agreement to be executed as of the day and year first written above.

 

Carlyle GMS Finance, Inc.
By:		/s/ Orit Mizrachi
		Orit Mizrachi, Chief Operating Officer

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NF Investment Corp.
By:		/s/ Orit Mizrachi
		Orit Mizrachi, Chief Operating Officer