Chubb Group of Insurance Companies DECLARATIONS
FINANCIAL INSTITUTION INVESTMENT
COMPANY ASSET PROTECTION BOND
15 Mountain View Road, Warren, New Jersey 07059
NAME OF ASSURED (including its Subsidiaries): Bond Number: 82047607
THE HYPERION BROOKFIELD TOTAL RETURN FUND, INC.
FEDERAL INSURANCE COMPANY
Incorporated under the laws
THREE WORLD FINANCIAL CENTER of Indiana a stock insurance company herein called the
NEW YORK, NY 10281010 Capital Center, 251 North Illinois,
Suite 110
Indianapolis, IN 46204-1927
ITEM 1. BOND PERIOD: from 12:01 a.m. on July 30, 2007
to 12:01 a.m. on July 30, 2008
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. $ 25,000.
2. On Premises $ 3,100,000. $ 25,000.
3. In Transit $ 3,100,000. $ 25,000.
Forgery or
4. Alteration $ 3,100,000. $ 25,000.
5. Extended Forgery $ 3,100,000. $ 25,000.
6. Counterfeit Money $ 3,100,000. $ 25,000.
7. Threats to Person $ 3,100,000. $ 25,000.
8. Computer System $ 3,100,000. $ 25,000.
9. Voice Initiated Funds Transfer Instruction $ 3,100,000. $ 25,000.
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) Compliance w/ Trade Sanction Laws, 6)
Amend Name of Assured, 7)Revise Item 2 Endorsement
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.
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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.
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Insuring Clauses
Extended Forgery For the purpose of this INSURING CLAUSE, a mechanically reproduced facsimile
(continued) 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.
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Insuring Clauses
(continued)
Voice Initiated Funds 9. Loss resulting directly from Voice Initiated Funds Transfer Instruction
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 having credited an account of a
Deposit 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.
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General Agreements
Additional Companies A. If more than one corporation, or Investment Company, or any combination of
Included As Assured 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 information it has furnished in the
Assured 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.
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General Agreements
(continued)
Additional Offices Or C. If the ASSURED, other than an Investment Company, while this Bond is in
Employees - Consolidation force merges or consolidates with, or purchases or acquires assets or liabilities
Merger Or Purchase Or of another institution, the ASSURED shall not have the coverage afforded under
Acquisition Of Assets this Bond for loss which has:
Or Liabilities - Notice
To Company
(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 control (other than in an Investment
Notice To Company 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 court costs and reasonable
Attorneys' Fees 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
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General Agreements
Court Costs And (3) in the absence of 1 or 2 above, an arbitration panel agrees, after a
Attorney's Fees review of an agreed statement of facts between the COMPANY and the ASSURED,
(continued) 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.
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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
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Conditions And
Limitations
Definitions (8) each natural person, partnership or corporation authorized by written
(continued) 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.
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Conditions And
Limitations
Definitions f. Forgery means the signing of the name of another natural person with the
(continued) 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.
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Conditions And
Limitations
Definitions m. Subsidiary means any organization that, at the inception date of this Bond,
(continued) 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 cover:
Applicable to All
Insuring Clauses a. loss not reported to the COMPANY in writing within sixty (60) daysafter
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;
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Conditions And
Limitations
General Exclusions - h. loss resulting from dishonest acts by any member of the Board of Directors
Applicable to All or Board of Trustees of the ASSURED who is not an Employee, acting
Clauses alone or in collusion with others;
(continued)
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,
securities transactions on security or commodity
b. 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 cover:
Applicable To All
Insuring Clauses a. loss caused by an Employee, provided, however, this Section 3.a. shall
Except Insuring not apply to loss covered under INSURING CLAUSE 2. or 3. which results
Clause 1. 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;
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Conditions And
Limitations
Specific Exclusions - f. loss resulting from the failure for any reason of a financial or
Applicable To All Insuring depository nstitution, its receiver or other liquidator to pay or deliver funds
Clauses Except Insuring or other Property to the ASSURED provided further that this Section 3.f. shall
Clause 1. not apply to loss of Property resulting directly from robbery, burglary,
(continued) 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 cover:
Applicable To All Insuring
Clauses Except Insuring a. loss resulting from the complete or partial non-payment of or default
Clauses 1., 4., And 5 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 Bond, this Bond shall continue in force for
Reduction And Non- the limit stated in the applicable sections of ITEM 2. of the DECLARATIONS,
Accumulation Of Liability 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 those specified in a., b., or c. above,
Reduction And Non- shall be deemed to be one loss and shall be limited to the applicable LIMIT OF
Accumulation Of Liability LIABILITY stated in ITEM 2. of the DECLARATIONS of this Bond irrespective of
(continued) 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 notice thereof at the earliest
Proof - Legal Proceedings practicable moment, not to exceed sixty (60) days after discovery of
Against Company 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 Initiated Funds Transfer Instruction shall
Proof - Legal Proceedings include electronic recordings of such instructions.
Against Company
(continued)
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
amountof 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, the COMPANY shall be subrogated to
Recovery 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 satisfaction of any loss suffered by the
Recovery ASSURED which was not covered under this Bond.
(continued)
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 officer or supervisory employee of an
(continued) 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 charge or modification which would
(continued) 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
Bond Number: 82047607
NAME OF ASSURED: THE HYPERION BROOKFIELD 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, 2007.
/s/ Illegible
By --------------------------------
Authorized Representative
ALL OTHER TERMS AND CONDITIONS OF THIS BOND REMAIN UNCHANGED.
Date: September 24, 2007
ICAP Bond
Form 17-02-2365 (Ed. 10-00)
FEDERAL INSURANCE COMPANY
Endorsement No.: 2 Bond
Bond Number: 82047607
NAME OF ASSURED: THE HYPERION BROOKFIELD 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
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, 2007.
ALL OTHER TERMS AND CONDITIONS OF THIS BOND REMAIN UNCHANGED.
Date: September 24, 2007
/s/ Illegible
By --------------------------------
Authorized Representative
ICAP Bond
Form 17-02-5602 (Ed. 10-03) Page 2
FEDERAL INSURANCE COMPANY
Endorsement No.: 3 Bond
Bond Number: 82047607
NAME OF ASSURED: THE HYPERION BROOKFIELD 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, 2007.
ALL OTHER TERMS AND CONDITIONS OF THIS BOND REMAIN UNCHANGED.
Date: September 24, 2007
/s/ Illegible
By --------------------------------
Authorized Representative
ICAP Bond - New York
Form 17-02-2863 (Rev. 7-03) Page 3
ENDORSEMENT/RIDER
Effective date of
this endorsement/rider: July 30, 2007 FEDERAL INSURANCE COMPANY
Endorsement/Rider No. 4 Bond
To be attached to and
form a part of Bond No. 82047607
Issued to: THE HYPERION BROOKFIELD TOTAL RETURN FUND, INC.
DELETING VALUATION-OTHER PROPERTY AND AMENDING CHANGE OR MODIFICATION
ENDORSEMENT
In consideration of the premium charged, it is agreed that this Bond is amended
as follows:
1. The paragraph titled Other Property in Section 9, Valuation, is deleted in
its entirety.
2. The third paragraph in Section 16, Change or Modification, is deleted in
its entirety and replaced with the following:
If this Bond is for a joint 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 all insured
Investment Companies and the Securities and Exchange Commission,
Washington, D.C., by the COMPANY.
The title and any headings in this endorsement/rider are solely for convenience
and form no part of the terms and conditions of coverage.
All other terms, conditions and limitations of this Bond shall remain unchanged.
/s/ Illegible
--------------------------------
Authorized Representative
17-02-2437 (12/2006) rev. Page 1
Effective date of
this endorsement: July 30, 2007 FEDERAL INSURANCE COMPANY
Endorsement No.: 5 Bond
To be attached to and form a
part of Bond Number: 82047607
Issued to: THE HYPERION BROOKFIELD 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 BOND REMAIN UNCHANGED.
Date: September 24, 2007
/s/ Illegible
By --------------------------------
Authorized Representative
Form 14-02-9228 (Ed. 4/2004)
FEDERAL INSURANCE COMPANY
Endorsement No: 6 BOND
Bond Number: 82047607
NAME OF ASSURED: THE HYPERION BROOKFIELD 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 Brookfield Total Return Fund, Inc.
The Hyperion Brookfield Strategic Mortgage Income Fund Inc.
The Hyperion Brookfield Income Fund, Inc
The Hyperion Brookfield Collateralized Security Fund, Inc.
This Endorsement applies to loss discovered after 12:01 a.m. on July 30, 2007.
ALL OTHER TERMS AND CONDITIONS OF THIS BOND REMAIN UNCHANGED.
Date: September 24, 2007
/s/ Illegible
By --------------------------------
Authorized Representative
ICAP Bond
Form 17-02-6272 (Ed. 8-04) Page 1
FEDERAL INSURANCE COMPANY
Endorsement No. 7 Bond
Bond Number: 82047607
NAME OF ASSURED: THE HYPERION BROOKFIELD TOTAL RETURN FUND, INC.
REVISE ITEM 2. ENDORSEMENT
It is agreed that this Bond is amended by deleting ITEM 2. in its entirety on
the DECLARATIONS and substituting the following:
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 to such INSURING CLAUSE in this Bond
shall be deemed to be deleted. There shall be no deductible applicable to any
loss under INSURING CLAUSE 1 sustained by any Investment Company.
SINGLE LOSS DEDUCTIBLE
INSURING CLAUSE LIMIT OF LIABILITY AMOUNT
--------------- ------------------ ------
1. Employee $ 3,100,000. $ 25,000
2. On Premises $ 3,100,000. $ 25,000
3. In Transit $ 3,100,000. $ 25,000
4. Forgery or Alteration $ 3,100,000. $ 25,000
5. Extended Forgery $ 3,100,000. $ 25,000
6. Counterfeit Currency $ 3,100,000. $ 25,000
7. Threats to Person $ 3,100,000. $ 25,000
8. Computer System $ 3,100,000. $ 25,000
9. Voice Initiated Funds Transfer Instruction $ 3,100,000. $ 25,000
10. Uncollectible Items of Deposit $ 50,000. $ 5,000.
11. Audit Expense $ 50,000. $ 5,000.
12. Stop Payment Order or Refusal to Pay Check $ 25,000. $ 5,000.
13. Unauthorized Signature $ 25,000. $ 5,000.
This Endorsement applies to loss discovered after 12:01 a.m. on July 30, 2007.
ALL OTHER TERMS AND CONDITIONS OF THIS BOND REMAIN UNCHANGED.
Date: September 24, 2007
/s/ Illegible
By --------------------------------
Authorized Representative
ICAP Bond
Form 17-02-1582 (Ed. 5-98) Page 1
IMPORTANT NOTICE TO POLICYHOLDERS
All of the members of the Chubb Group of Insurance companies doing business
in the United States (hereinafter "Chubb") distribute their products through
licensed insurance brokers and agents ("producers"). Detailed information
regarding the types of compensation paid by Chubb to producers on US insurance
transactions is available under the Producer Compensation link located at the
bottom of the page at www.chubb.com, or by calling 1-866-588-9478. Additional
information may be available from your producer.
Thank you for choosing Chubb.
10-02-1295 (ed. 5/2007)
Important Notice:
The SEC Requires Proof of Your Fidelity Insurance Policy
Your company is now required to file an electronic copy of your fidelity
insurance coverage (Chubb's ICAP Bond policy) to the Securities and Exchange
Commission (SEC), according to rules adopted by the SEC on June 12, 2006.
Chubb is in the process of providing your agent/broker with an electronic copy
of your insurance policy as well as instructions on how to submit this proof of
fidelity insurance coverage to the SEC. You can expect to receive this
information from your agent/broker shortly.
The electronic copy of your policy is provided by Chubb solely as a convenience
and does not affect the terms and conditions of coverage as set forth in the
paper policy you receive by mail. The terms and conditions of the policy mailed
to you, which are the same as those set forth in the electronic copy, constitute
the entire agreement between your company and Chubb.
If you have any questions, please contact your agent or broker.
Form 14-02-12160 (ed. 7/2006)
Chubb & Son, div. of Federal Insurance Company
as manager of the member insurers of the
Chubb Group of Insurance Companies
POLICYHOLDER
DISCLOSURE NOTICE OF
TERRORISM INSURANCE COVERAGE
(for policies with no terrorism exclusion or sublimit)
You are hereby notified that, under the Terrorism Risk Insurance Act of 2002
(the "Act") effective November 26, 2002, this policy makes available to you
insurance for losses arising out of certain acts of international terrorism.
Terrorism is defined as any act certified by the Secretary of the Treasury, in
concurrence with the Secretary of State and the Attorney General of the United
States, to be an act of terrorism; to be a violent act or an act that is
dangerous to human life, property or infrastructure; to have resulted in damage
within the United States, or outside the United States in the case of an air
carrier or vessel or the premises of a United States Mission; and to have been
committed by an individual or individuals acting on behalf of any foreign person
or foreign interest, as part of an effort to coerce the civilian population of
the United States or to influence the policy or affect the conduct of the United
States Government by coercion.
You should know that the insurance provided by your policy for losses caused by
acts of terrorism is partially reimbursed by the United States under the formula
set forth in the Act. Under this formula, the United States pays 90% of covered
terrorism losses that exceed the statutorily established deductible to be paid
by the insurance company providing the coverage. The portion of your policy's
annual premium that is attributable to insurance for such acts of terrorism is:
$ -0-.
If you have any questions about this notice, please contact your agent or
broker.
Form 10-02-1281 (Ed. 1/2003)
THE HYPERION STRATEGIC MORTGAGE INCOME FUND, INC.
Excerpts of Minutes of a Meeting
of the Board of Directors
Held on
May 7, 2007
Review and Renewal of Joint Fidelity Bond and Participation in
Joint Fidelity Bond Agreement among the Funds
Following discussion, and on a motion duly made and seconded, the Board
unanimously approved the following resolution:
WHEREAS, the Fund has 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 Fund 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 Fund and other
Hyperion funds; and
WHEREAS, it is proposed that the Joint Fidelity Bond be
continued for a one year period from July 30, 2007 through July 30,
2008, and that the Fund continue to satisfy its 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 the Fund 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.
NOW THEREFORE, BE IT RESOLVED, that the Joint Fidelity Bond be
continued for a one year period from July 30, 2007 through July 30,
2008, and that the Fund continue to satisfy its fidelity bond coverage
requirements under the 1940 Act through participation in the
continuance of the Joint Fidelity Bond; and be it further
RESOLVED, that, in connection with the continuance of the
Joint Fidelity Bond, the Fund is authorized to 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; and be it further
RESOLVED, that the Fund's 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, 2007
W I T N E S S E T H
WHEREAS, The Hyperion Brookfield Total Return Fund, Inc., The Hyperion
Brookfield Strategic Mortgage Income Fund, Inc., Hyperion Brookfield Income
Fund, Inc., and Hyperion Brookfield 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 BROOKFIELD TOTAL RETURN FUND, INC.
By:/s/ Thomas F. Doodian
--------------------------------
HYPERION BROOKFIELD STRATEGIC MORTGAGE INCOME FUND, INC.
By: /s/ Thomas F. Doodian
--------------------------------
HYPERION BROOKFIELD INCOME FUND, INC.
By: /s/ Thomas F. Doodian
--------------------------------
HYPERION BROOKFIELD COLLATERALIZED SECURITIES FUND, INC.
By:/s/ Thomas F. Doodian
--------------------------------
SCHEDULE A
HYPERION BROOKFIELD ASSET MANAGEMENT, INC.
Summary of Proposed Fidelity Bond Insurance Program for the Hyperion Funds
For the Insurance Policy Year Ending July 30, 2008
($3,100,000 Joint Fidelity Bond)
Total Quoted Premium
-----------------------
for 07/30/2007 through 07/30/2008 $8,865
-----------------------
------------------------------------------------------------------------------------------------------------------------------
ALLOCATION OF PREMIUM TO THE INDIVIDUAL FUNDS FOR $3.10 MILLION JOINT FIDELITY BOND
------------------------------------------------------------------------------------------------------------------------------
------------------------ --- -- ------------- -------------- ------------- ---------------------------------------------------
Collateralized
Total Return Fund Strategic Mortgage Brookfield Income Securities Fund
FUND (HTR) Fund (HSM) Fund (HBIF) (HCS)
-----------------------------------------------------------------------------------------------------------------------------------
Gross Assets (1) $407,000,000 $235,000,000 $304,000,000 $775,251,000
Minimum required coverage
per Rule 17g-1 of the
1940 Act $750,000 $600,000 $750,000 $1,000,000
----------------------- ---------------------- -------------------- -------------------
Net Assets (1) $276,049,834 $139,000,000 $283,000,000 $707,000,000
----------------------- ---------------------- -------------------- -------------------
Allocation of $3,100,000
Joint Fidelity Bond
Premium (2) $1,742 $877 $1,786 $4,461
----------------------- ---------------------- -------------------- -------------------
Stand Alone Premium(3) $2,750 $2,750 $2,750 $2,750
----------------------- ---------------------- -------------------- -------------------
Notes:
(1) As of March 31, 2007 (in millions)
(2) Allocation based on Fund's net assets as of March 31,
2007 in conjunction with Rule 17g-1 of the 1940 Act (2)
Premium amounts for each Fund on a stand alone basis at
minimum required coverage for one year