AGREEMENT OF THE JOINT INSUREDS
THIS AGREEMENT dated April 20, 2001, as amended and restated as of
December 27, 2002, February 21, 2003, February 16, 2007 and September 26, 2007
is hereby entered into by and among CORNERSTONE TOTAL RETURN FUND, INC.,
CORNERSTONE STRATEGIC VALUE FUND, INC. and CORNERSTONE PROGRESSIVE RETURN FUND
(hereinafter referred to singularly as the "Fund" or collectively as the
"Funds")(the Funds are sometimes referred to individually herein as the "Insured
Party" or collectively the "Insured Parties").
WHEREAS, the Insured Parties are management investment companies
registered under the Investment Company Act of 1940, as amended (the "1940
Act"); and
WHEREAS, Rule 17g-1 under the 1940 Act requires each Fund to provide
and maintain in effect a bond against larceny and embezzlement by its officers
and employees; and
WHEREAS, Rule 17g-1 authorizes each Fund, by virtue of its affiliated
status, to secure a joint insured bond naming each of them as insureds; and
WHEREAS, Rule 17g-1 also requires that each investment company named as
an insured in a joint bond enter into an agreement with the other named insureds
containing certain provisions regarding the respective shares to be received by
said insureds in the event recovery is received under the joint insured bond as
a result of a loss sustained by them; and
WHEREAS, the Boards of Directors of the Cornerstone Total Return Fund,
Inc. and Cornerstone Strategic Value Fund, Inc. and the Board of Trustees of the
Cornerstone Progressive Return Fund, including a majority of the
Directors/Trustees of such Fund who are not "interested persons" of the Fund as
defined by Section 2(a)(19) of the 1940 Act, have given due consideration to all
factors relevant to the form, amount and ratable allocation of premiums of such
a joint insured bond and have determined that this joint insured bond is in the
best interest of each Insured Party and their respective shareholders, and,
accordingly, the majority of such Directors/Trustees have approved the amount,
type, form and coverage of the joint insured bond and the portion of the premium
payable by each such Insured Party hereunder; and
WHEREAS, the Directors/Trustees of each Fund have determined, with
respect to each Insured Party, that the allocation of the proceeds payable under
the joint insured bond as set forth herein, which takes into account the minimum
amount of coverage required for each Fund by Rule 17g-1, is equitable.
NOW, THEREFORE, the parties hereto, in consideration of the mutual
covenants contained herein, hereby agree as follows:
1. JOINT INSURED BOND. The Insured Parties shall maintain in effect a
joint fidelity insurance bond (the "Bond") from a reputable fidelity insurance
company authorized to do business in the place where the Bond is issued,
insuring each Insured Party against larceny and embezzlement and covering such
of their respective officers and employees who may, singly or jointly with
others, have access, directly or indirectly, to the particular Insured Party's
securities or other assets. The Bond shall name each Insured Party as an insured
and shall comply with the requirements for such bonds established by Rule 17g-1.
2. AMOUNT. The Bond shall be in at least the minimum amount required by
Rule 17g-1(d) to be maintained by the Insured Parties, in
accordance with the policies of the staff of the Securities and
Exchange Commission.
3. RATABLE ALLOCATION OF PREMIUMS. The Insured Parties shall divide the
initial premium and any additional premiums which may become due under the Bond
among them based upon their relative net assets at the time of payment of the
premium involved.
4. RATABLE ALLOCATION OF PROCEEDS.
(a) If more than one of the Insured Parties sustains a single
loss (including a loss sustained before the date hereof), for which recovery is
received under the Bond, each such Insured Party shall receive that portion of
the recovery that is sufficient in amount to indemnify that Insured Party in
full for the loss sustained by it, unless the recovery is inadequate to fully
indemnify all such Insured Parties sustaining a single loss.
(b) If the recovery is inadequate to fully indemnify all Insured
Parties sustaining a single loss, the recovery shall be allocated among such
Funds as follows:
(i) Each of the Insured Parties, to the extent it
sustains a loss, shall be allocated an amount equal to
the lesser of its actual loss or the minimum amount of
the fidelity bond that it would be required to maintain
under a single insured bond (determined as of the time
of the loss in accordance with the provisions of Rule
17g-1).
(ii) The remainder, if any, shall be allocated among the
other Insured Parties based upon their relative net
assets at the time of the loss (provided that, if such
allocation would result in any Insured Party receiving a
portion of the recovery in excess of the loss actually
sustained by it, the aggregate of such excess among such
other Insured Parties shall be reallocated among the
remaining Insured Parties not fully indemnified as a
result of the foregoing allocations, in proportion to
the allocation percentages set forth in this
sub-provision).
5. CLAIMS AND SETTLEMENTS. Each Insured Party shall, within five (5)
days after the making of any claim under the Bond, provide the other Insured
Parties with written notice of the amount and nature of such claim. Each Insured
Party shall, within five (5) days of the receipt thereof, provide the other
Insured Parties with written notice of the terms of settlement of any claim made
under the Bond by such Insured Party. In the event that two (2) or more Insured
Parties shall agree to a settlement of a claim made under the Bond with respect
to a single loss, notice of the settlement shall also include calculation of the
amounts to be received under Paragraph 4 hereof. The officers of each Insured
Party designated as responsible for filing notices required by paragraph (g) of
Rule 17g-1 under the Act shall give and receive any notices required hereby with
respect to such Insured Party.
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6. MODIFICATIONS AND AMENDMENTS. Any Insured Party may increase the
amount of the Bond. Such Insured Party must give written notice thereof to the
other Insured Parties to this Agreement and to the Securities and Exchange
Commission in accordance with Rule 17g-1. If, pursuant to Rule 17g-1, any Fund
shall determine that the coverage provided pursuant to this Agreement should
otherwise be modified, it shall so notify the other Insured Parties hereto and
indicate the nature of the modification (including the treatment of any increase
or return premium) which it believes to be appropriate. If within sixty (60)
days of such notice any necessary amendments to this Agreement shall not have
been made and the request for modification shall not have been withdrawn, this
Agreement shall terminate (except with respect to losses occurring prior to such
termination). Any Insured Party may withdraw from this Agreement at any time and
cease to be an Insured Party hereto (except with respect to losses occurring
prior to such withdrawal) by giving not less than sixty (60) days prior written
notice to the other parties of such withdrawal. Upon withdrawal, a withdrawing
Insured Party shall be entitled to receive such portion of any premium rebated
by the fidelity company with respect to such withdrawal. Upon termination of the
Bond, each Insured Party shall receive any premium rebated by the fidelity
company with respect to such termination in proportion to the premium paid by
such insured, less any premium previously refunded with respect to such insured.
7. GOVERNING LAW. This Agreement shall be construed in accordance with
the laws of the State of New York.
8. NO ASSIGNMENT. This Agreement is not assignable.
9. NOTICES. All notices and other communications hereunder shall be
addressed to the appropriate Insured Party, at: c/o Bear Xxxxxxx Funds
Management, Inc., 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xx.
Xxxxx X. Xxxxxxx.
10. COUNTERPARTS. This Agreement may be executed in two (2) or more
parts which together shall constitute a single agreement.
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IN WITNESS WHEREOF, each of the parties hereto has duly executed this
Agreement as of the day and year first above written.
CORNERSTONE TOTAL RETURN FUND, INC.
By: /s/ Xxxxx X. Xxxxxxxx
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Name: Xxxxx X. Xxxxxxxx
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Title: President
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CORNERSTONE STRATEGIC VALUE FUND, INC.
By: /s/ Xxxxx X. Xxxxxxxx
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Name: Xxxxx X. Xxxxxxxx
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Title: President
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CORNERSTONE PROGRESSIVE RETURN FUND
By: /s/ Xxxxx X. Xxxxxxxx
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Name: Xxxxx X. Xxxxxxxx
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Title: President
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