PREMIUM BILL
Insured: THE HYPERION TOTAL RETURN FUND, INC. Date: August 10, 2006
Producer: BANC OF AMERICA CORPORATE INSURANCE AGENCY LLC
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 30, 2006 82047607 1 yr. Bond $8,865.
To
July 30, 2007
10% Commission
-------
TOTAL $8,865.
=======
CHUBB GROUP OF INSURANCE COMPANIES DECLARATIONS
15 Mountain View Road, FINANCIAL INSTITUTION INVESTMENT
Warren, New Jersey 07059 COMPANY ASSET PROTECTION BOND
NAME OF ASSURED (including its
SUBSIDIARIES): Bond Number: 82047607
THE HYPERION TOTAL RETURN FUND, INC.
FEDERAL INSURANCE COMPANY
ONE LIBERTY PLAZA Incorporated under the laws of Indiana
NEW YORK, N Y 10006 a stock insurance company herein called
the COMPANY
Capital Center, 251 North Illinois,
Suite 1100 Indianapolis, IN 46204-1927
ITEM 1. BOND PERIOD: from 12:01 a.m. on July 30, 2006
to 12:01 a.m. on July 30, 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.
DEDUCTIBLE
INSURING CLAUSE LIMIT OF LIABILITY AMOUNT
--------------- ------------------ ----------
1. Employee $3,100,000. $ 0.
2. On Premises $3,100,000. $10,000.
3. In Transit $3,100,000. $10,000.
4. Forgery or Alteration $3,100,000. $10,000.
5. Extended Forgery $3,100,000. $10,000.
6. Counterfeit Money $3,100,000. $10,000.
7. Threats to Person $3,100,000. $10,000.
8. Computer System $3,100,000. $10,000.
9. Voice Initiated Funds Transfer Instruction $3,100,000. $10,000.
10 Uncollectible Items of Deposit $ 50,000. $ 5,000.
11. Audit Expense $ 50,000. $ 5,000.
ITEM 3. THE LIABILITY OF THE COMPANY IS ALSO SUBJECT TO THE TERMS OF THE
FOLLOWING ENDORSEMENTS EXECUTED SIMULTANEOUSLY HEREWITH:
1) Stop Payment Order or Refusal to Pay Check, 2) Unauthorized Signature
Endorsement, 3) New York Amendatory, 4) Deleting Valuation-Other
Property, 5) Complaince w/ Trade Sanction Laws, 6) Amend Name of Assured
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/ Illegible /s/ Illegible
------------------------------------- ----------------------------------------
Secretary President
Countersigned by /s/ Illegible
-------------------- ----------------------------------------
Authorized Representative
ICAP Bond (5-98) - Federal
Form 17-02-1421 (Ed. 5-98) Page 1 of 1
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:
INSURING CLAUSES
Employee 1. Loss resulting directly from LARCENY or
EMBEZZLEMENT committed by any EMPLOYEE,
alone or in collusion with others.
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.
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.
ICAP Bond (5-98)
Form 17-02-1421 (Ed. 5-98) Page 1 of 19
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.
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.
ICAP Bond (5-98)
Form 17-02-1421 (Ed. 5-98) Page 2 of 19
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.
Counterfeit Money 6. Loss resulting directly from the receipt
by the ASSURED in good faith of any
COUNTERFEIT money.
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.
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.
ICAP Bond (5-98)
Form 17-02-1421 (Ed. 5-98) Page 3 of 19
INSURING CLAUSES
(continued)
Voice Initiated Funds 9. Loss resulting directly from VOICE
Transfer Instruction INITIATED 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.
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.
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.
ICAP Bond (5-98)
Form 17-02-1421 (Ed. 5-98) Page 4 of 19
GENERAL AGREEMENTS
Additional Companies A. If more than one corporation, or
Included As Assured INVESTMENT 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.
Representation Made By B. The ASSURED represents that all
Assured information it 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.
ICAP Bond (5-98)
Form 17-02-1421 (Ed. 5-98) Page 5 of 19
GENERAL AGREEMENTS
(continued)
Additional Offices Or C. If the ASSURED, other than an INVESTMENT Employees -
Consolidation, COMPANY, while this Bond is in force, Merger Or Purchase Or
merges or consolidates with, or purchases Acquisition Of Assets Or or acquires
assets or liabilities of Liabilities - Notice To another institution, the
ASSURED shall not Company have the coverage 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.
Change Of Control - D. When the ASSURED learns of a change in
Notice To Company control (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.
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
ICAP Bond (5-98)
Form 17-02-1421 (Ed. 5-98) Page 6 of 19
GENERAL AGREEMENTS
Court Costs And Attorneys' (3) in the absence of 1 or 2 above, an
Fees (continued) arbitration panel agrees, after a
review 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.
ICAP Bond (5-98)
Form 17-02-1421 (Ed. 5-98) Page 7 of 19
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
ICAP Bond (5-98)
Form 17-02-1421 (Ed. 5-98) Page 8 of 19
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.
ICAP Bond (5-98)
Form 17-02-1421 (Ed. 5-98) Page 9 of 19
CONDITIONS AND LIMITATIONS
Definitions f. FORGERY means the signing of the name
(continued) of 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
CONDITIONS AND
LIMITATIONS
Definitions m. SUBSIDIARY means any organization
(continued) that, 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 Insuring COVER:
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
CONDITIONS AND
LIMITATIONS
General Exclusions - h. loss resulting from dishonest acts by
Applicable to All Insuring any member of the Board of Directors
Clauses or Board of Trustees of the ASSURED
(continued) who is 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 Insuring COVER:
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
CONDITIONS AND LIMITATIONS
Specific Exclusions - f. loss resulting from the failure for
Applicable To All Insuring any reason of a financial or
Clauses Except Insuring depository institution, its receiver
Clause 1. or other liquidator to pay or deliver
(continued) funds or 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 Insuring COVER:
Clauses Except Insuring
Clauses 1., 4., And 5. a. loss resulting from the complete or
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
Accumulation Of Liability for 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
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.
Accumulation Of Liability above,
(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
CONDITIONS AND LIMITATIONS
Notice To Company - f. Proof of loss involving VOICE
Proof - Legal Proceedings INITIATED FUNDS TRANSFER INSTRUCTION
Against Company (continued) shall include electronic recordings
of such 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
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,
Recovery the 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
CONDITIONS AND LIMITATIONS
Subrogation - Assignment - d. fourth, to the ASSURED in
Recovery (continued) satisfaction of any loss suffered by
the ASSURED 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
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
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
FEDERAL INSURANCE COMPANY
Endorsement No.: 1
Bond Number: 82047607
NAME OF ASSURED: THE HYPERION TOTAL RETURN FUND, INC.
STOP PAYMENT ORDER OR REFUSAL TO PAY CHECK ENDORSEMENT
It is agreed that this Bond is amended as follows:
1. By adding the following INSURING CLAUSE:
"12. Stop Payment Order or Refusal to Pay Check
Loss resulting directly from the ASSURED being legally liable to pay
compensatory damages for:
a. complying or failing to comply with notice from any customer of
the ASSURED or any authorized representative of such customer, to
stop payment on any check or draft made or drawn upon or against
the ASSURED by such customer or by any authorized representative
of such customer, or
b. refusing to pay any check or draft made or drawn upon or against
the ASSURED by any customer of the ASSURED or by any authorized
representative of such customer."
2. By adding the following Specific Exclusion:
"Section 4.A. Specific Exclusions - Applicable to INSURING CLAUSE 12
THIS BOND DOES NOT DIRECTLY OR INDIRECTLY COVER:
a. liability assumed by the ASSURED by agreement under any contract,
unless such liability would have attached to the ASSURED even in the
absence of such agreement,
b. loss arising out of:
(1) libel, slander, wrongful entry, eviction, defamation, false
arrest, false imprisonment, malicious prosecution, assault or
battery,
(2) sickness, disease, physical bodily harm, mental or emotional
distress or anguish, or death of any person, or
(3) discrimination."
This Endorsement applies to loss discovered after 12:01 a.m. on July 30, 2006.
ALL OTHER TERMS AND CONDITIONS OF THIS BOND REMAIN UNCHANGED.
Date: August 10, 2006 By /s/ Illegible
-------------------------------------
Authorized Representative
ICAP Bond
Form 17-02-2365 (Ed. 10-00)
FEDERAL INSURANCE COMPANY
Endorsement No.: 2
Bond Number: 82047607
NAME OF ASSURED: THE HYPERION TOTAL RETURN FUND, INC.
UNAUTHORIZED SIGNATURE ENDORSEMENT
It is agreed that this Bond is amended as follows:
1. By adding the following INSURING CLAUSE:
13. Unauthorized Signature
Loss resulting directly from the ASSURED having accepted, paid or
cashed any check or WITHDRAWAL ORDER made or drawn on or against the
account of the ASSURED'S customer which bears the signature or
endorsement of one other than a person whose name and signature is on
file with the ASSURED as a signatory on such account.
It shall be a condition precedent to the ASSURED'S right of recovery
under this INSURING CLAUSE that the ASSURED shall have on file
signatures of all the persons who are signatories on such account.
2. By adding to Section 1., Definitions, the following:
r. INSTRUCTION means a written order to the issuer of an UNCERTIFICATED
SECURITY requesting that the transfer, pledge or release from pledge
of the specified UNCERTIFICATED SECURITY be registered.
s. 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 on books maintained for that purpose by or on behalf
of the issuer, and
(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.
ICAP Bond
Form 17-02-5602 (Ed. 10-03) Page 1 of 2
t. WITHDRAWAL ORDER means a non-negotiable instrument, other than an
INSTRUCTION, signed by a customer of the ASSURED authorizing the
ASSURED to debit the customer's account in the amount of funds stated
therein.
This Endorsement applies to loss discovered after 12:01 a.m. on July 30, 2006.
ALL OTHER TERMS AND CONDITIONS OF THIS BOND REMAIN UNCHANGED.
Date: August 10, 2006 By /s/ Illegible
-------------------------------------
Authorized Representative
ICAP Bond
Form 17-02-5602 (Ed. 10-03) Page 2 of 2
FEDERAL INSURANCE COMPANY
Endorsement No.: 3
Bond Number: 82047607
NAME OF ASSURED: THE HYPERION TOTAL RETURN FUND, 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
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 17. 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
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 30, 2006.
ALL OTHER TERMS AND CONDITIONS OF THIS BOND REMAIN UNCHANGED.
Date: August 10, 2006 By /s/ Illegible
-------------------------------------
Authorized Representative
ICAP Bond - New York
Form 17-02-2863 (Rev. 7-03) Page 3
FEDERAL INSURANCE COMPANY
Endorsement No.: 4
Bond Number: 82047607
NAME OF ASSURED: THE HYPERION TOTAL RETURN FUND, INC.
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 30, 2006.
ALL OTHER TERMS AND CONDITIONS OF THIS BOND REMAIN UNCHANGED.
Date: August 10, 2006 By /s/ Illegible
-------------------------------------
Authorized Representative
ICAP Bond
Form 17-02-2437 (Ed. 1-01)
Effective date of
this endorsement: July 30, 2006 FEDERAL INSURANCE COMPANY
Endorsement No.: 5
To be attached to and
form a part of
Number: 82047607
Issued to: THE HYPERION TOTAL RETURN FUND, 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 REMAIN UNCHANGED.
Date: August 10, 2006 By /s/ Illegible
-------------------------------------
Authorized Representative
Form 14-02-9228 (Ed. 4/2004)
FEDERAL INSURANCE COMPANY
Endorsement No: 6
Bond Number: 82047607
NAME OF ASSURED: THE HYPERION TOTAL RETURN FUND, INC.
AMEND NAME OF ASSURED ENDORSEMENT
It is agreed that NAME OF ASSURED of the DECLARATIONS for this Bond is amended
to include the following:
The Hyperion Strategic Mortgage Income Fund Inc.
Hyperion 2005 Investment Grade Opportunity Term Trust, Inc.
Hyperion Strategic Bond Fund
Hyperion Collateralized Security Fund, Inc.
This Endorsement applies to loss discovered after 12:01 a.m. on July 30, 2006.
ALL OTHER TERMS AND CONDITIONS OF THIS BOND REMAIN UNCHANGED.
Date: August 10, 2006 By /s/ Illegible
-------------------------------------
Authorized Representative
ICAP Bond
Form 17-02-6272 (Ed. 8-04) Page 1
FEDERAL INSURANCE COMPANY
Endorsement No: 7
Bond Number: 82047607
NAME OF ASSURED THE HYPERION TOTAL RETURN FUND, INC.
NAME OF ASSURED ENDORSEMENT
It is agreed that the NAME OF ASSURED in the DECLARATIONS is amended to read as
follows:
The Hyperion Total Return Fund, Inc.
Three World Financial Center
200 Vesey Street, 10th Floor
New York, NY 10281
This Endorsement applies to loss discovered after 12:01 a.m. on July 30, 2006.
ALL OTHER TERMS AND CONDITIONS OF THIS BOND REMAIN UNCHANGED.
Date: September 6, 2006 By /s/ Illegible
-------------------------------------
Authorized Representative
ICAP Bond
Form 17-02-0949 (Rev. 1-97) Page 1
THE HYPERION STRATEGIC MORTGAGE INCOME FUND, INC.
THE HYPERION TOTAL RETURN FUND, INC.
HYPERION STRATEGIC BOND FUND, INC.
HYPERION COLLATERALIZED SECURITIES FUND, INC.
(As a single entity, a "Fund", and collectively the "Funds")
Proposed Resolution for a
Combined Regular Meeting of the Boards of Directors
May 9, 2006
Approval of Fidelity Bond Arrangements
(Agenda Item V)
WHEREAS, the Funds have previously satisfied the fidelity bond coverage
requirements of Rule 17g-1 under the Investment Company Act of 1940, as amended
(the "1940 Act") by participating in a joint fidelity bond (the "Joint Fidelity
Bond"); and
WHEREAS, in connection with the participation in the Joint Fidelity
Bond, the Funds have entered into a Joint Fidelity Bond Agreement (the "Joint
Fidelity Bond Agreement") providing for the allocation of premiums and minimum
levels of recoveries among the Funds; and
WHEREAS, it is proposed that the Joint Fidelity Bond, be continued for
a one year period from July 30, 2006 through July 30, 2007, and that the Funds
continue to satisfy their fidelity bond coverage requirements under the 1940 Act
through participation in the continuance of the Joint Fidelity Bond; and
WHEREAS, it is also proposed that, in connection with the continuance
of the Joint Fidelity Bond, that Funds enter into a new Joint Fidelity Bond
Agreement on substantially the same terms and conditions as contained in the
current Joint Fidelity Bond Agreement, which the new Joint Fidelity Bond
Agreement shall be in substantially the form presented to the Board, except that
the Hyperion 2005 Investment Grade Opportunity Term Trust shall no longer
participate in the agreement due to its recent dissolution.
RESOLVED, that the Funds' officers are severally authorized to execute
and deliver such documents as may be required to effectuate the foregoing
resolutions, to pay any premium as may from time to time be required, and to
take such further action as may be required by any applicable laws, rules or
regulations in connection with implementing any of the foregoing resolutions.
JOINT FIDELITY BOND AGREEMENT
As of July 1, 2006
W I T N E S S E T H
WHEREAS, The Hyperion Total Return Fund, Inc., The Hyperion Strategic
Mortgage Income Fund, Inc. Hyperion Strategic Bond Fund, Inc., and Hyperion
Collateralized Securities Fund, Inc. as parties to this Agreement (the
"Insureds") are named insureds under a financial institution fidelity bond
issued by Federal Insurance Company (the "Policy");
NOW, THEREFORE, the parties hereto, in consideration of the premises and
the mutual covenants contained herein, hereby agree as follows:
1. Joint Insured Bond. The Insureds shall maintain in effect the Policy or
a substitute fidelity insurance policy providing comparable coverage from one or
more reputable fidelity insurance companies which shall be authorized to do
business in the place where the Policy is issued.
2. Allocation of Premium. The Insureds shall pay the portion of the total
premium for the Policy set forth in Schedule A hereto.
3. Allocation of Proceeds.
(a) If one or more Insureds sustain a single loss for which
recovery is received under the Policy, each Insured shall receive that
portion of the recovery which is sufficient in amount to indemnify
that Insured in full for the loss sustained by it (other than the
portion thereof subject to a deductible), unless the recovery is
inadequate to fully indemnify all Insureds for such single loss.
(b) If the recovery is inadequate to indemnify fully each Insured
for such single loss (other than the portion thereof subject to a
deductible), the recovery shall be allocated among the Insureds as
follows:
(i) Each Insured shall be allocated an amount equal to the lesser
of its actual loss (net of any deductible) and the minimum amount of
coverage allocated to it in accordance with Schedule A attached
hereto; and
(ii) The remaining portion of the recovery (if any) shall be
allocated to each Insured for the portion of the loss not fully
indemnified by the allocation under subparagraph (i) in the same
proportion as the portion of each Insured's loss which is not fully
indemnified bears to the sum of the unindemnified loss of itself and
the other Insured. If such allocation would result in either Insured's
receiving a portion of the recovery in excess of the loss actually
sustained by it, the aggregate of such excess portion shall be
reallocated to the other Insured if its losses would not be fully
indemnified as a result of the foregoing allocation.
(c) If the recovery made pursuant to subparagraphs (a) and (b)
hereof reduces the total amount of coverage provided by the Policy
because recovery is made from a portion of the Policy written on an
"annual aggregate" basis:
(i) The Insureds agree to seek additional coverage to reinstate
the reduction in coverage; or
(ii) In the event any subsequent loss is sustained, any recovery
by an Insured in excess of the minimum amount allocated to it in
accordance with Schedule A from coverage written on an "annual
aggregate" basis shall be reallocated in the event of subsequent
single loss among the Insured or Insureds sustaining the earlier
loss(es) and other Insureds in accordance with subparagraphs (a) and
(b) above; or
(iii) Any recovery in excess of the minimum amount allocated in
accordance with Schedule A from coverage written on an "annual
aggregate" basis shall be paid into an escrow account and allocated in
accordance with subparagraphs (a) and (b) above upon final
determination of the aggregate losses for the policy year.
(d) In the event that a recovery by an Insured is less than its
actual loss because of the applicability of a deductible clause that
is applicable on an "annual aggregate" rather than a "per occurrence"
basis and one or more other Insureds sustain a subsequent loss or
losses to which none or only the remaining portion of the deductible
amount applies, the Insured(s) that sustained the earlier loss(es)
shall be entitled to a portion of the recovery with respect to the
later loss(es) such that the total burden of the deductible amount is
borne between the Insureds in accordance with the percentages set
forth in Schedule A hereto.
4. Claims and Settlements. Each Insured shall, within ten days after the
making of any claim under the Policy, provide the other Insureds with written
notice of the amount and nature of such claim. Each Insured shall, within ten
days after the receipt thereof, provide the other Insureds with written notice
of the terms of settlement of any claim made under the Policy by such Insured.
5. Withdrawal. Any Insured may withdraw from this Agreement at any time and
cease to be a party hereto (except with respect to losses occurring prior to
such withdrawal) by giving not less than 10 days' prior written notice to the
other Insureds of such withdrawal. Upon withdrawal, such Insured shall cease to
be named insured on the Policy and shall be entitled to receive any premium
rebated by the insurance company with respect to such withdrawal.
6. Governing Law. This Agreement shall be construed in accordance with the
laws of the State of New York.
7. No Assignment. This Agreement is not assignable.
8. Notices. All notices and other communications hereunder shall be in
writing and shall be addressed to the appropriate party at Three World Financial
Center, 200 Vesey Street, 10th Floor, New York, NY 10281-1010.
IN WITNESS WHEREOF, each of the parties hereto has duly executed this
Agreement as of the day and year first written above.
THE HYPERION TOTAL RETURN FUND, INC.
By: /s/ Daniel S. Kim
------------------------------------------------
HYPERION STRATEGIC MORTGAGE INCOME FUND, INC.
By: /s/ Daniel S. Kim
------------------------------------------------
HYPERION STRATEGIC BOND FUND, INC.
By: /s/ Daniel S. Kim
------------------------------------------------
HYPERION COLLATERALIZED SECURITIES FUND, INC.
By: /s/ Daniel S. Kim
------------------------------------------------
SCHEDULE A
HYPERION BROOKFIELD ASSET MANAGEMENT, INC.
Summary of Proposed Fidelity Bond Insurance Program for the Hyperion Mutual
Funds For the Insurance Policy Year Ending July 30, 2007
(3,100,000 Joint Fidelity Bond)
Total Quoted Premium
----------------------
for 7/30/2006 through 7/30/2007 $8,865
----------------------
--------------------------------------------------------------------------------------------------------------------------------
ALLOCATION OF PREMIUM TO THE INDIVIDUAL FUNDS FOR $3.1 MILLION JOINT FIDELITY BOND
--------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------
TOTAL STRATEGIC
FUND RETURN MORTGAGE
FUND FUND
(HTR) (HSM)
--------------------------------------------------------------------------------------------------------------------------------
Gross Assets (1) 389,834,684.07 211,000,449.38
Mimimumm required coverage per Rule 17g-1 of the 1940 Act $750,000 $600,000
Net Assets (1) 273,987,488.85 140,590,538.20
Allocation of $3,100,000 Joint Fidelity Bond Premium (2) $1,825 $936
Stand-Alone Premium (3) $2,750 $2,750
STRATEGIC COLLATERALIZED
BOND SECURITIES
FUND FUND
(HSB) (HCS)
------------------------------------------------------------------------------------------------------------------------------
Gross Assets (1) $288,063,034.01 $877,968,870.78
Minimum required coverage per Rule 17g-1 of the 1940 Act $750,000 $1,000,000
Net Assets (1) $258,086,002.78 $658,306,300.13
Allocation of $3,100,000 Joint Fidelity Bond Premium (2) $1,719 $4,385
Stand-Alone Premium (3) $2,750 $2,750
Notes:
(1) As of March 31, 2006
(2) Allocation based on each Fund's net assets as of March 31, 2006 in conjunction with Rule 17g-1 of the 1940 Act
(3) Premium amounts for each Fund on a stand-alone basis at minimum required coverage for one year