AGREEMENT AMONG INSUREDS with respect to the JOINT INSURED FIDELITY BOND ICI Mutual Insurance Company, File No. 04704107B (the “Fidelity Bond”)
AGREEMENT AMONG INSUREDS
with respect to the
JOINT INSURED FIDELITY BOND
ICI Mutual Insurance Company, File No. 04704107B (the “Fidelity Bond”)
with respect to the
JOINT INSURED FIDELITY BOND
ICI Mutual Insurance Company, File No. 04704107B (the “Fidelity Bond”)
AGREEMENT, made as of March 10, 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 $7,525,000, which represents adequate coverage
as required under the Rule. The coverage is allocated based upon the gross assets of the Insureds
as of the most recent fiscal quarter end as set forth below:
| Required | ||||||||||||||||
| 1/31/08 Gross | Coverage | |||||||||||||||
| Assets | Under | Fidelity Bond | Allocation | |||||||||||||
| Fund | ($ million) | the Rule | Coverage | of Premium | ||||||||||||
Prospect Street
High Income
Portfolio Inc. |
$ | 134,339,761 | $ | 525,000 | $ | 575,000 | 7.64 | % | ||||||||
Prospect Street
Income Shares Inc. |
89,487,318 | 450,000 | 450,000 | 5.98 | % | |||||||||||
Highland Floating
Rate Fund |
1,932,287,761 | 1,500,000 | 1,550,000 | 20.59 | % | |||||||||||
Highland Floating
Rate Advantage Fund |
3,008,033,003 | 2,100,000 | 2,100,000 | 27.90 | % | |||||||||||
Highland Special
Situations Fund |
81,230,352 | 450,000 | 450,000 | 5.98 | % | |||||||||||
| 993,324,437 | 1,000,000 | 1,250,000 | 16.61 | % | ||||||||||||
Highland Funds I |
47,114,613 | 350,000 | 400,000 | 5.31 | % | |||||||||||
Highland Distressed |
||||||||||||||||
Opportunities, Inc. |
351,258,387 | 750,000 | 750,000 | 9.99 | % | |||||||||||
Totals |
$ | 6,737,075,632 | $ | 7,125,000 | $ | 7,525,000 | 100.00 | % | ||||||||
Prospect Street High Income Portfolio Inc.
Prospect Street Income Shares Inc.
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.
Prospect Street Income Shares Inc.
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: Secretary and Treasurer
Name: M. Xxxxx Xxxxxxxxx
Title: Secretary and Treasurer
