N.Y. General Business Law § 575: Bond required

§ 575. Bond required. 1. At the time of filing each registration

statement, the trading stamp company must also file with the secretary

of state a bond payable to the people of the state of New York and duly

executed by the company and a corporate surety qualified to do business

in this state; such bond shall be conditioned upon the performance by

the trading stamp company of its obligation to redeem trading stamps

issued by retailers in this state when they are duly presented for

redemption by the rightful holders.

2. The principal sum of the bond required by this article shall be as

follows: if the company has not previously done business as a trading

stamp company in this state, or if the company's gross receipts from

such business during its last fiscal year was not in excess of one

hundred thousand dollars the principal sum shall be ten thousand

dollars; for each additional one hundred thousand dollars, or fraction

thereof, of gross receipts from such business in this state, an

additional ten thousand dollars, but such bond shall not exceed one

hundred fifty thousand dollars.

3. On the effective date of each new bond, any and all liability on

all bonds previously filed under this article shall terminate, and all

rightful holders of trading stamps who prosecute their claims under this

article shall prosecute such claims solely against the new bond and only

by filing proofs of claim with the secretary of state in the manner

provided in this article.

4. In lieu of the bond required by this section, the trading stamp

company may post with the secretary of state (a) money equal to the

amount of the bond otherwise required or (b) securities equal to one

hundred twenty percent of the bond otherwise required. Such securities

shall be of the same kinds and classes as those in which the comptroller

may invest the funds of the state pursuant to section ninety-eight of

the state finance law, or in which a fiduciary may invest funds he holds

for investment pursuant to subparagraphs A through I of subparagraph (1)

of paragraph (a) of section 11-2.2 of the Estates, Powers and Trusts

Law.