AGREEMENT AMONG INSUREDS with respect to the JOINT INSURED FIDELITY BOND ICI Mutual Insurance Company, File No. 04704108B (the “Fidelity Bond”)

AGREEMENT AMONG INSUREDS
with respect to the
JOINT INSURED FIDELITY BOND
ICI Mutual Insurance Company, File No. 04704108B (the “Fidelity Bond”)

     AGREEMENT, made as of July 31, 2008 among the undersigned registered management investment companies and business development company (each an “Insured” and together, the “Insureds”) pursuant to paragraph (f) of Rule 17g-1 promulgated under the Investment Company Act of 1940 (the “1940 Act”) relating to the Fidelity Bond.

     Each of the Insureds hereby agrees that in the event recovery is received under the Fidelity Bond as a result of a loss sustained by one or more of the Insureds that is a registered management investment company or a business development company, the registered management investment company or business development company shall receive an equitable and proportionate share of the recovery, but at least equal to the amount that it would have received had it provided and maintained a single insured bond with minimum coverage required by paragraph (d) of Rule 17g-1 promulgated under the 1940 Act (the “Rule”).

     The Fidelity Bond coverage is in the amount of $6,450,000, which represents adequate coverage as required under the Rule. The coverage is allocated based upon the gross assets of the Insureds as of the most recent fiscal quarter end as set forth below:

		Gross Assets				Required Coverage
		as of				Under				Fidelity Bond				Allocation
Fund		06/30/2008				the Rule				Coverage				of Premium
Highland Floating Rate Fund			1,374,130,470				1,250,000				1,500,000				22.12	%
Highland Floating Rate Advantage Fund			2,305,078,501				1,700,000				1,700,000				30.09	%
Highland Special Situations Fund			97,936,874				450,000				525,000				7.96	%
Highland Credit Strategies Fund			1,399,225,300				1,250,000				1,500,000				22.13	%
Highland Funds I			47,770,252				350,000				400,000				6.19	%
Highland Capital Multi-Strategy Fund			131,066				50,000				75,000				0.89	%
Highland Distressed Opportunities, Inc.			245,598,133				600,000				750,000				10.62	%
Totals		$	5,469,870,596			$	5,650,000			$	6,450,000				100.00	%

Highland Floating Rate Fund
Highland Floating Rate Advantage Fund
Highland Special Situations Fund
Highland Credit Strategies Fund
Highland Funds I
Highland Capital Multi-Strategy Fund
Highland Distressed Opportunities, Inc.

By:	/s/ M. Xxxxx Xxxxxxxxx
	Name:	M. Xxxxx Xxxxxxxxx
	Title:	Chief Financial Officer, Secretary and Treasurer (principal financial officer)