FINANCIAL
INSTITUTION BOND
Standard Form No. 14, Revised to October, 1987
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Bond
No.
RNN623821/01/2019
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AXIS
Reinsurance Company
(Herein
called Underwriter)
DECLARATIONS
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Item 1.
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Name of Insured (herein called Insured):
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Rand Capital Corporation & Rand Capital SBIC, Inc.
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Principal Address:
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14 Lafayette Square
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Suite 2200
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Buffalo, NY 14203-1922
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Item 2.
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Bond Period: from 12:01 a.m. on
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July 1, 2019
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to 12:01 a.m. on
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July 1, 2020
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(MONTH, DAY, YEAR)
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(MONTH, DAY, YEAR)
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standard
time.
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Item
3.
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The
Aggregate Liability of the Underwriter during the Bond Period shall be
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$400,000
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Item
4.
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Subject
to Sections 4 and 11 hereof,
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the
Single Loss Limit of Liability is $ 400,000
and
the Single Loss Deductible is $15,000
Provided,
however, that if any amounts are inserted below opposite specified Insuring Agreements or Coverage, those amounts shall be controlling.
Any amount set forth below shall be part of and not in addition to amounts set forth above. (If an Insuring Agreement or Coverage
is to be deleted, insert “Not Covered.”)
Amount
applicable to:
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Single Loss Limit of Liability
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Single Loss Deductible
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Insuring Agreement (A) – FIDELITY
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$
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400,000
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$
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15,000
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Insuring Agreement (B) – ON PREMISES
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$
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400,000
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$
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15,000
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Insuring Agreement (C) – IN TRANSIT
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$
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400,000
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$
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15,000
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Insuring Agreement (D)—FORGERY OR ALTERATION
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$
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400,000
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$
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15,000
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Insuring Agreement (E)—SECURITIES
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$
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400,000
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$
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15,000
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Insuring Agreement (F) – COUNTERFEIT CURRENCY
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$
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400,000
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$
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15,000
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Optional Insuring Agreements and Coverages:
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Computer Systems Fraud
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$
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400,000
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$
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15,000
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Telefacsimile Transfer Fraud
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$
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400,000
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$
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15,000
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Voice Initiated Transfer Fraud
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$
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400,000
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$
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15,000
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Destruction of Data – Hacker
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$
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400,000
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$
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15,000
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Destruction of Data – Virus
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$
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400,000
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$
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15,000
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Unauthorized Signature
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$
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25,000
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$
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2,500
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Stop Payment
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$
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25,000
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$
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2,500
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Uncollectible Items of Deposit
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$
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25,000
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$
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2,500
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Audit Expense
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$
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10,000
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$
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2,500
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Claims Expense
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$
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10,000
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$
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2,500
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Partners Coverage
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N/A
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N/A
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If
“Not Covered” is inserted above opposite any specified Insuring Agreement or Coverage, such Insuring Agreement or
Coverage and any other reference thereto in this bond shall be deemed to be deleted therefrom.
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Item
5.
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The
liability of the Underwriter is subject to the terms of the following riders attached
hereto:
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Riders:
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Signature Page - AXIS 102 ARCS (06 15)
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State Fraud Statement – AXIS 104 (04 15)
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Policyholder Notice Economic and Trade Sanctions - AXIS 906 (03 16)
1.
New York Statutory Rider/ Endorsement - SR 6180b
2.
Amend Named Insured Rider - FI 1002 08 14)
3.
Computer System Fraud Insuring Agreement – (SR6196)
4.
Telefacsimile Transfer Fraud Insuring Agreement Rider – FI 1007 (08 14)
5.
Voice Initiated Funds Transfer Fraud Insuring Agreement Rider- FI 1008 (08 14)
6.
Destruction of Data or Programs By Hacker Insuring Agreement Rider – FI 1005 (08 14)
7.
Destruction of Data or Program By Virus Insuring Agreement Rider – FI 1006(08 14)
8.
Unauthorized Signatures Insuring Agreement Rider- FI 1021 (08 14)
9.
Uncollectible Items of Deposit Coverage Rider- FI 1049 (05 16)
10.
Claim Expense Insuring Agreement Rider- FI 1004 (08 14)
11.
Audit Expense Insuring Agreement Rider- FI 1003 (08 14)
12.
Amend Fidelity Insuring Agreement Rider - FI 1013-14 (08 14)
13.
Investment Company No Deductible Rider FI 1062 (01 16)
14.
Amend Racketeering Exclusion Rider – FI 1009-14 (08 14)
15.
Amend Representation of Insured - FI 1014 (08 14)
16.
Amend Valuation Rider - FI 1015 (08 14)
17.
Amend Counterfeit Money Insuring Agreement Rider - FI 1016 (08 14)
18.
Amend Securities Insuring Agreement Rider- FI 1035 (04 16)
19.
Amend Definition of Employee to include Affiliated Persons Rider – FI 1050 (05 16)
20.
Securities and Exchange Commission Notification Rider – FI 1020-14 (08 14)
21.
Protected Information Exclusion Rider (Fidelity Carveback) - FI 1026 (08 14)
22.
Amend Ownership Condition Rider- FI 1046 (05 16)
Item 6.
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The Insured by the acceptance of this bond gives notice
to the Underwriter terminating or canceling prior bond(s) or policy(ies) No.(s) RNN623821/01/2018
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such
termination or cancelation to be effective as of the time this bond becomes effective.
The
Underwriter, in consideration of an agreed premium, and in reliance upon all statements made and information furnished to the
Underwriter by the Insured in applying for this bond, and subject to the Declarations, Insuring Agreements, General Agreements,
Conditions and Limitations and other terms hereof, agrees to indemnify the Insured for:
INSURING
AGREEMENTS
FIDELITY
(A) Loss resulting directly from dishonest or fraudulent acts committed by an Employee acting alone or in collusion with
others.
Such
dishonest or fraudulent acts must be committed by the Employee with the manifest intent:
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(a)
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to
cause the Insured to sustain such loss; and
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(b)
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to
obtain financial benefit for the Employee and which, in fact, result in obtaining such
benefit.
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As
used in this Insuring Agreement, financial benefit does not include any employee benefits earned in the normal course of employment,
including salaries, commissions, fees, bonuses, promotions, awards, profit sharing or pensions.
ON
PREMISES
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(B)
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(1)
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Loss of Property
resulting directly from
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(a)
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robbery,
burglary, misplacement, mysterious unexplainable disappearance and damage thereto or
destruction thereof, or
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(b)
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theft,
false pretenses, common-law or statutory larceny, committed by a person present in an
office or on the premises of the Insured,
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while
the Property is lodged or deposited within offices or premises located anywhere.
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(a)
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furnishings,
fixtures, supplies or equipment within an office of the Insured covered under this bond
resulting directly from larceny or theft in, or by burglary or robbery of, such office,
or attempt thereat, or by vandalism or malicious mischief, or
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(b)
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such
office resulting from larceny or theft in, or by burglary or robbery of such office or
attempt thereat, or to the interior of such office by vandalism or malicious mischief.
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provided
that
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(i)
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the
Insured is the owner of such furnishings, fixtures, supplies, equipment, or office or
is liable for such loss or damage, and
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(ii)
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the
loss is not caused by fire.
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IN
TRANSIT
(C) Loss
of Property resulting directly from robbery, common-law or statutory larceny, theft, misplacement, mysterious unexplainable disappearance,
being lost or made away with, and damage thereto or destruction thereof, while the Property is in transit anywhere in the custody
of
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(a)
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a
natural person acting as a messenger of the Insured (or another natural person acting
as messenger or custodian during an emergency arising from the incapacity of the original
messenger), or
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(b)
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a
Transportation Company and being transported in an armored motor vehicle, or
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(c)
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a
Transportation Company and being transported in a conveyance other than an armored motor
vehicle provided that covered Property transported in such manner is limited to the following:
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(i)
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records,
whether recorded in writing or electronically, and
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(ii)
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Certified
Securities issued in registered form and not endorsed, or with restrictive endorsements,
and
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(iii)
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Negotiable
Instruments not payable to bearer, or not endorsed, or with restrictive endorsements.
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Coverage
under this Insuring Agreement begins immediately upon the receipt of such Property by the natural person or Transportation Company
and ends immediately upon delivery to the designated recipient or its agent.
FORGERY
OR ALTERATION
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(D)
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Loss
resulting directly from
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(1) Forgery
or alteration of, on or in any Negotiable Instrument (except an Evidence of Debt), Acceptance, Withdrawal Order, receipt for the
withdrawal of Property, Certificate of Deposit or Letter of Credit.
(2) transferring,
paying or delivering any funds or Property or establishing any credit or giving any value on the faith of any written instructions
or advices directed to the Insured and authorizing or acknowledging the transfer, payment, delivery or receipt of funds or Property,
which instructions or advices purport to have been signed or endorsed by any customer of the Insured or by any financial institution
but which instructions or advices either bear a signature which is a Forgery or have been altered without the knowledge and consent
of such customer or financial institution.
A
mechanically reproduced facsimile signature is treated the same as a handwritten signature.
SECURITIES
(E) Loss
resulting directly from the insured having, in good faith, for its own account or for the account of others
(1) acquired,
sold or delivered, or given value, extended credit or assumed liability, on the faith of, any original
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(a)
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Certificated
Security,
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(b)
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deed,
mortgage or other instrument conveying title to, or creating or discharging a lien upon,
real property,
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(d)
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Instruction
to a Federal Reserve Bank of the United States, or
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(e)
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Statement
of Uncertificated Security of any Federal Reserve Bank of the United States
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which
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(i)
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bears
a signature of any maker, drawer, issuer, endorser, assignor, lessee, transfer agent,
registrar, acceptor, surety, guarantor, or of any person signing in any other capacity
which is a Forgery, or
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(2) guaranteed
in writing or witnessed any signature upon any transfer, assignment, bill of sale, power of attorney, Guarantee, or any items
listed in (a) through (c) above.
(3) acquired,
sold or delivered, or given value, extended credit or assumed liability, on the faith of any item listed in (a) and (b) above
which is a Counterfeit.
A
mechanically reproduced facsimile signature is treated the same as a handwritten signature.
COUNTERFEIT
CURRENCY
(F) Loss
resulting directly from the receipt by the Insured, in good faith, of any Counterfeit Money of the United States of America, Canada
or of any other country in which the Insured maintains a branch office.
GENERAL AGREEMENTS
NOMINEES
A. Loss
sustained by any nominee organized by the Insured for the purpose of handling certain of its business transactions and composed
exclusively of its Employees shall, for all the purposes of this bond and whether or not any partner of such nominee is implicated
in such loss, be deemed to be loss sustained by the Insured.
ADDITIONAL
OFFICES OR EMPLOYEES—CONSOLIDATION, MERGER OR PURCHASE OF ASSETS—NOTICE
B. If
the Insured shall, while this bond is in force, establish any additional offices, other than by consolidation or merger with,
or purchase or acquisition of assets or liabilities of, another institution such offices shall be automatically covered hereunder
from the date of such establishment without the requirement of notice to the Underwriter or the payment of additional premium
for the remainder of the premium period.
If
the Insured shall, while this bond is in force, consolidate or merge with, or purchase or acquire assets or liabilities of, another
institution, the Insured shall not have such coverage as is afforded under this bond for loss which
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(a)
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has
occurred or will occur in offices or premises, or
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(b)
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has
been caused or will be caused by an employee or employees of such institution, or
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(c)
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has
arisen or will arise out of the assets or liabilities
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acquired
by the Insured as a result of such consolidation, merger or purchase or acquisition of assets or liabilities unless the Insured
shall
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(i)
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give
the Underwriter 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
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(ii)
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obtain
the written consent of the Underwriter to extend the coverage provided by this bond to
such additional offices or premises, Employees and other exposures, and
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(iii)
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upon
obtaining such consent, pay to the Underwriter an additional premium.
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CHANGE
OF CONTROL—NOTICE
C. When
the Insured learns of a change in control, it shall give written notice to the Underwriter.
As
used in this General Agreement, control means the power to determine the management or policy of a controlling holding company
or the Insured by virtue of voting stock ownership. A change in ownership of voting stock which results in direct or indirect
ownership by a stockholder or an affiliated group of stockholders of ten percent (10%) or more of such stock shall be presumed
to result in a change of control for the purpose of the required notice.
Failure
to give the required notice shall result in termination of coverage for any loss involving a transferee, to be effective upon
the date of the stock transfer.
REPRESENTATION
OF INSURED
D. The
Insured represents that the information furnished in the application for this bond is complete, true and correct. Such application
constitutes part of this bond.
Any
misrepresentation, omission, concealment or incorrect statement of a material fact, in the application or otherwise, shall be
grounds for the rescission of this bond.
JOINT
INSURED
E. If
two or more Insureds are covered under this bond, the first named Insured shall act for all Insureds. Payment by the Underwriter
to the first named Insured of loss sustained by any Insured shall fully release the Underwriter on account of such loss. If the
first named Insured ceases to be covered under this bond, the Insured next named shall thereafter be considered as the first named
Insured. Knowledge possessed or discovery made by any Insured shall constitute knowledge or discovery by all Insureds for all
purposes of this bond. The liability of the Underwriter for loss or losses sustained by all Insureds shall not exceed the amount
for which the Underwriter would have been liable had all such loss or losses been sustained by one Insured.
NOTICE
OF LEGAL PROCEEDINGS AGAINST INSURED—ELECTION TO DEFEND
F. The
Insured shall notify the Underwriter at the earliest practicable moment, not to exceed 30 days after notice thereof, of any legal
proceeding brought to determine the Insured’s liability for any loss, claim or damage, which, if established, would constitute
a collectible loss under this bond. Concurrently, the Insured shall furnish copies of all pleadings and pertinent papers to the
Underwriter.
The
Underwriter, at its sole option, may elect to conduct the defense of such legal proceeding, in whole or in part. The defense by
the Underwriter shall be in the Insured’s name through attorneys selected by the Underwriter. The Insured shall provide
all reasonable information and assistance required by the Underwriter for such defense.
If
the Underwriter elects to defend the Insured, in whole or in part, any judgment against the Insured on those counts or causes
of action which the Underwriter defended on behalf of the Insured or any settlement in which the Underwriter participates and
all attorneys’ fees, costs and expenses incurred by the Underwriter in the defense of the litigation shall be a loss covered
by this bond.
If
the Insured does not give the notices required in subsection (a) of Section 5 of this bond and in the first paragraph of this
General Agreement, or if the Underwriter elects not to defend any causes of action, neither a judgment against the Insured, nor
a settlement of any legal proceeding by the Insured, shall determine the existence, extent or amount of coverage under this bond
for loss sustained by the Insured, and the Underwriter shall not be liable for any attorneys’ fees, costs and expenses incurred
by the Insured.
With
respect to this General Agreement, subsections (b) and (d) of Section 5 of this bond apply upon the entry of such judgment or
the occurrence of such settlement instead of upon discovery of loss. In addition, the Insured must notify the Underwriter within
30 days after such judgment is entered against it or after the Insured settles such legal proceeding, and, subject to subsection
(e) of Section 5, the Insured may not bring legal proceedings for the recovery of such loss after the expiration of 24 months
from the date of such final judgment or settlement.
CONDITIONS AND LIMITATIONS
DEFINITIONS
Section
1. As used in this bond:
(a) Acceptance
means a draft which the drawee has, by signature written thereon, engaged to honor as presented.
(b) Certificate
of Deposit means an acknowledgment in writing by a financial institution of receipt of Money with an engagement to repay it.
(c) Certificated
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:
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(1)
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represented
by an instrument issued in bearer or registered form;
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(2)
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of
a type commonly dealt in on securities exchanges or markets or commonly recognized in
any area in which it is issued or dealt in as a medium for investment; and
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(3)
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either
one of a class or series or by its terms divisible into a class or series of shares,
participations, interests or obligations.
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(d) Counterfeit
means an imitation of an actual valid original which is intended to deceive and to be taken as the original.
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(1)
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a
natural person in the service of the Insured at any of the Insured’s offices or
premises covered hereunder whom the Insured compensates directly by salary or commissions
and whom the Insured has the right to direct and control while performing services for
the Insured;
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(2)
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an
attorney retained by the Insured and an employee of such attorney while either is performing
legal services for the Insured;
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(3)
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a
person provided by an employment contractor to perform employee duties for the Insured
under the Insured’s supervision at any of the Insured’s offices or premises
covered hereunder, and a guest student pursuing studies or duties in any of said offices
or premises;
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(4)
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an
employee of an institution merged or consolidated with the Insured prior to the effective
date of this bond;
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(5)
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each
natural person, partnership or corporation authorized by the Insured to perform services as data processor of checks or other
accounting records of the Insured (not including preparation or modification of computer software or programs), herein called
Processor. (Each such Processor, and the partners, officers and employees of such Processor shall, collectively, be deemed to
be one Employee for all the
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purposes of this bond, excepting,
however, the second paragraph of Section 12. A Federal Reserve Bank or clearing house
shall not be construed to be a processor.); and
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(6)
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a
Partner of the Insured, unless not covered as stated in Item 4 of the Declarations.
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(f) Evidence
of Debt means an instrument, including a Negotiable Instrument, executed by a customer of the Insured and held by the Insured
which in the regular course of business is treated as evidencing the customer’s debt to the Insured.
(g) Financial
Interest in the Insured of the Insured’s general partner(s), or limited partner(s), committing dishonest or fraudulent acts
covered by this bond or concerned or implicated therein means:
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(1)
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as
respects general partner(s) the value of all right, title and interest of such general
partner(s), determined as of the close of business on the date of discovery of loss covered
by this bond, in the aggregate of:
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(a)
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the
“net worth” of the Insured, which for the purposes of this bond, shall be
deemed to be the excess of its total assets over its total liabilities, without adjustment
to give effect to loss covered by this bond, (except that credit balances and equities
in proprietary accounts of the Insured, which shall include capital accounts of partners,
investment and trading accounts of the Insured, participations of the Insured in joint
accounts, and accounts of partners which are covered by agreements providing for the
inclusion of equities therein as partnership property, shall not be considered as liabilities)
with securities, spot commodities, commodity future contracts in such proprietary accounts
and all other assets marked to market or fair value and with adjustment for profits and
losses at the market of contractual commitments for such proprietary accounts of the
Insured; and
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(b)
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the
value of all other Money, securities and property belonging to such general partner(s),
or in which such general partner(s) have a pecuniary interest, held by or in the custody
of and legally available to the Insured as set-off against loss covered by this bond;
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provided,
however, that if such “net worth” adjusted to give effect to loss covered by this bond and such value of all other
Money, securities and property as set forth in (g)(1)(b) preceding, plus the amount of coverage afforded by this bond on account
of such loss, is not sufficient to enable the Insured
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to meet its obligations, including its obligations to its partners other
than to such general partner(s), then the Financial Interest in the Insured, as above defined, of such general partner(s) shall
be reduced in an amount necessary, or eliminated if need be, in order to enable the Insured upon payment of loss under this bond
to meet such obligations, to the extent that such payment will enable the Insured to meet such obligations, without any benefit
accruing to such general partner(s) from such payment; and
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(2)
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as
respects limited partners the value of such limited partner’s (’) investment
in the Insured.
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(h) Forgery
means the signing of the name of another person or organization with intent to deceive; it does not mean a signature which consists
in whole or in part of one’s own name signed with or without authority, in any capacity, for any purpose.
(i) Guarantee
means a written undertaking obligating the signer to pay the debt of another to the Insured or its assignee or to a financial
institution from which the Insured has purchased participation in the debt, if the debt is not paid in accordance with its terms.
(j) Instruction
means a written order to the issuer of an Uncertificated Security requesting that the transfer, pledge, or release from pledge
of the Uncertificated Security specified be registered.
(k) Letter
of Credit means an engagement in writing by a bank or other person made at the request of a customer that the bank or other person
will honor drafts or other demands for payment upon compliance with the conditions specified in the Letter of Credit.
(l) Money
means a medium of exchange in current use authorized or adopted by a domestic or foreign government as a part of its currency.
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(m)
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Negotiable
Instrument means any writing
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(1)
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signed
by the maker or drawer; and
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(2)
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containing
any unconditional promise or order to pay a sum certain in Money and no other promise,
order, obligation or power given by the maker or drawer; and
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(3)
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is
payable on demand or at a definite time; and
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(4)
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is
payable to order or bearer.
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(n)
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Partner
means a natural person who
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(1)
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is
a general partner of the Insured, or
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(2)
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is
a limited partner and an Employee (as defined in Section 1(e)(1) of the bond) of the
Insured.
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(o) Property
means Money, Certificated Securities, Uncertificated Securities of any Federal Reserve Bank of the United States, Negotiable Instruments,
Certificates of Deposit, documents of title, Acceptances, Evidences of Debt, security agreements, Withdrawal Orders, certificates
of origin or title, Letters of Credit, insurance policies, abstracts of title, deeds and mortgages on real estate, revenue and
other stamps, tokens, unsold state lottery tickets, books of account and other records whether recorded in writing or electronically,
gems, jewelry, precious metals of all kinds and in any form, and tangible items of personal property which are not herein before
enumerated.
(p) Statement
of Uncertificated Security means a written statement of the issuer of an Uncertificated Security containing:
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(1)
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a
description of the Issue of which the Uncertificated Security is a part;
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(2)
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the
number of shares or units:
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(a)
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transferred
to the registered owner;
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(b)
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pledged
by the registered owner to the registered pledgee;
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(c)
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released
from pledge by the registered pledgee;
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(d)
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registered
in the name of the registered owner on the date of the statement; or
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(e)
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subject
to pledge on the date of the statement;
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(3)
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the
name and address of the registered owner and registered pledgee;
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(4)
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a
notation of any liens and restrictions of the issuer and any adverse claims to which
the Uncertificated Security is or may be subject or a statement that there are none of
those liens, restrictions or adverse claims; and
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(a)
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the
transfer of the shares or units to the new registered owner of the shares or units was
registered;
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(b)
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the
pledge of the registered pledgee was registered, or
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(c)
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of
the statement, if it is a periodic or annual statement.
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(q) Transportation
Company means any organization which provides its own or leased vehicles for transportation or which provides freight forwarding
or air express services.
(r) 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:
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(1)
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not
represented by an instrument and the transfer of which is registered upon books maintained
for that purpose by or on behalf of the issuer;
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(2)
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of
a type commonly dealt in on securities exchanges or markets; and
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(3)
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either
one of a class or series or by its terms divisible into a class or series of shares,
participations, interests or obligations.
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(s) Withdrawal
Order means a non-negotiable instrument, other than an Instruction, signed by a customer of the Insured authorizing the Insured
to debit the customer’s account in the amount of funds stated therein.
EXCLUSIONS
Section
2. This bond does not cover:
(a) loss
resulting directly or indirectly from forgery or alteration, except when covered under Insuring Agreements (A), (D), or (E);
(b) loss
due to riot or civil commotion outside the United States of America and Canada; or loss due to military, naval or usurped power,
war or insurrection unless such loss occurs in transit in the circumstances recited in Insuring Agreement (C), and unless, when
such transit was initiated, there was no knowledge of such riot, civil commotion, military, naval or usurped power, war or insurrection
on the part of any person acting for the Insured in initiating such transit;
(c) loss
resulting directly or indirectly from the effects of nuclear fission or fusion or radioactivity; provided, however, that this
paragraph shall not apply to loss resulting from industrial uses of nuclear energy;
(d) loss
resulting from any act or acts of any person who is a member of the Board of Directors of the Insured or a member of any equivalent
body by whatsoever name known unless such person is also an Employee or an elected official of the Insured in some other capacity,
nor, in any event, loss resulting from the act or acts of any person while acting in the capacity of a member of such Board or
equivalent body;
(e) loss
resulting directly or indirectly from the complete or partial nonpayment of, or default upon, any loan or transaction involving
the Insured as a lender or borrower, or extension of credit, including the purchase, discounting or other acquisition of false
or genuine accounts, invoices, notes, agreements or Evidences of Debt, whether such loan, transaction or extension was procured
in good faith or through trick, artifice, fraud or false pretenses, except when covered under Insuring Agreements (A), (D) or
(E);
(f) loss
resulting from any violation by the Insured or by any Employee
|
(1)
|
of
law regulating (i) the issuance, purchase or sale of securities, (ii) securities transactions
upon security exchanges or over the counter market, (iii) investment companies, or (iv)
investment advisers, or
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|
(2)
|
of
any rule or
regulation made pursuant to any such law, unless it is established by the Insured that the act or acts which caused the said
loss involved fraudulent or dishonest conduct which would have caused a loss to the Insured in a similar amount in the
absence of such laws, rules or regulations;
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(g) loss
resulting directly or indirectly from the failure of a financial or depository institution, or its receiver or liquidator, to
pay or deliver, on demand of the Insured, funds or Property of the Insured held by it in any capacity, except when covered under
Insuring Agreements (A) or (B)(1)(a);
(h) loss
caused by an Employee, except when covered under Insuring Agreement (A) or when covered under Insuring Agreement (B) or (C) and
resulting directly from misplacement, mysterious unexplainable disappearance or destruction of or damage to Property;
(i) loss
resulting directly or indirectly from transactions in a customer’s account, whether authorized or unauthorized, except the
unlawful withdrawal and conversion of Money, securities or precious metals, directly from a customer’s account by an Employee
provided such unlawful withdrawal and conversion is covered under Insuring Agreement (A);
(j) damages
resulting from any civil, criminal or other legal proceeding in which the Insured is alleged to have engaged in racketeering activity
except when the Insured establishes that the act or acts giving rise to such damages were committed by an Employee under circumstances
which result directly in a loss to the Insured covered by Insuring Agreement (A). For the purposes of this exclusion, “racketeering
activity” is defined in 18 United States Code 1961 et seq., as amended;
(k) loss
resulting directly or indirectly from the use or purported use of credit, debit, charge, access, convenience, identification,
cash management or other cards
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(1)
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in
obtaining credit or funds, or
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(2)
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in
gaining access to automated mechanical devices which, on behalf of the Insured, disburse
Money, accept deposits, cash checks, drafts or similar written instruments or make credit
card loans, or
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(3)
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in
gaining access to point of sale terminals, customer-bank communication terminals, or
similar electronic terminals of electronic funds transfer systems,
|
whether
such cards were issued, or purport to have been issued, by the Insured or by anyone other than the Insured, except when covered
under Insuring Agreement (A);
(l) loss
involving automated mechanical devices which, on behalf of the Insured, disburse Money, accept deposits, cash checks, drafts or
similar written instruments or make credit card loans, except when covered under Insuring Agreement (A);
(m) loss
through the surrender of Property away from an office of the Insured as a result of a threat
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(1)
|
to
do bodily harm to any person, except loss of Property in transit in the custody of any
person acting as messenger provided that when such transit was initiated there was no
knowledge by the Insured of any such threat, or
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|
(2)
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to
do damage to the premises or property of the Insured,
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except
when covered under Insuring Agreement (A);
(n) loss
resulting directly or indirectly from payments made or withdrawals from a depositor’s or customer’s account involving
erroneous credits to such account, unless such payments or withdrawals are physically received by such depositor or customer or
representative of such depositor or customer who is within the office of the Insured at the time of such payment or withdrawal,
or except when covered under Insuring Agreement (A);
(o) loss
involving items of deposit which are not finally paid for any reason, including but not limited to Forgery or any other fraud,
except when covered under Insuring Agreement (A);
(p) loss
resulting directly or indirectly from counterfeiting, except when covered under Insuring Agreements (A), (E) or (F);
(q) loss
of any tangible item of personal property which is not specifically enumerated in the paragraph defining Property if such property
is specifically insured by other insurance of any kind and in any amount obtained by the Insured, and in any event, loss of such
property occurring more than 60 days after the Insured takes possession of such property, except when covered under Insuring Agreements
(A) or (B) (2);
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(r)
|
loss
of Property while
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(2)
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in
the custody of any Transportation Company, unless covered under Insuring Agreement (C),
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except
when covered under Insuring Agreement (A);
(s) potential
income, including but not limited to interest and dividends, not realized by the Insured or by any customer of the Insured;
(t) damages
of any type for which the Insured is legally liable, except compensatory damages, but not multiples thereof, arising directly
from a loss covered under this bond;
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(u)
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all
fees, costs and expenses incurred by the Insured
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(1)
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in
establishing the existence of or amount of loss covered under this bond, or
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(2)
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as
a party to any legal proceeding whether or not such legal proceeding exposes the Insured
to loss covered by this bond;
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|
(v)
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indirect
or consequential loss of any nature;
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(w) loss
involving any Uncertificated Security except an Uncertificated Security of any Federal Reserve Bank of the United States or when
covered under Insuring Agreement (A);
(x) loss
resulting directly or indirectly from any dishonest or fraudulent act or acts committed by any non-Employee who is a securities,
commodities, money, mortgage, real estate, loan, insurance, property management, investment banking broker, agent or other representative
of the same general character;
(y) loss
caused directly or indirectly by a Partner of the Insured unless the amount of such loss exceeds the Financial Interest in the
Insured of such Partner and the Deductible Amount applicable to this bond, and then for the excess only;
(z) loss
resulting directly or indirectly from any actual or alleged representation, advice, warranty or guarantee as to the performance
of any investments;
(aa)
loss due to liability imposed upon the Insured as a result of the unlawful disclosure of non-public material information by the
Insured or any Employee, or as a result of any Employee acting upon such information, whether authorized or unauthorized.
DISCOVERY
Section
3. This bond applies to loss discovered by the Insured during the Bond Period. Discovery occurs when the Insured first becomes
aware of facts which would cause a reasonable person to assume that a loss of a type covered by this bond has been or will be
incurred, regardless of when the act or acts causing or contributing to such loss occurred, even though the exact amount or details
of loss may not then be known.
Discovery
also occurs when the Insured receives notice of an actual or potential claim in which it is alleged that the Insured is liable
to a third party under circumstances which, if true, would constitute a loss under this bond.
LIMIT
OF LIABILITY
Section
4.
Aggregate
Limit of Liability
The
Underwriter’s total liability for all losses discovered during the Bond Period shown in Item 2 of the Declarations shall
not exceed the Aggregate Limit of Liability shown in Item 3 of the Declarations. The Aggregate Limit of Liability shall be reduced
by the amount of any payment made under the terms of this bond.
Upon
exhaustion of the Aggregate Limit of Liability by such payments:
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(a)
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The
Underwriter shall have no further liability for loss or losses regardless of when discovered
and whether or not previously reported to the Underwriter, and
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|
(b)
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The
Underwriter shall have no obligation under General Agreement F to continue the defense
of the Insured, and upon notice by the Underwriter to the Insured that the Aggregate
Limit of Liability has been exhausted, the Insured shall assume all responsibility for
its defense at its own cost.
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The
Aggregate Limit of Liability shall not be increased or reinstated by any recovery made and applied in accordance with subsections
(a), (b) and (c) of Section 7. In the event that a loss of Property is settled by the Underwriter through the use of a lost instrument
bond, such loss shall not reduce the Aggregate Limit of Liability.
Single
Loss Limit of Liability
Subject
to the Aggregate Limit of Liability, the Underwriter’s liability for each Single Loss shall not exceed the applicable Single
Loss Limit of Liability shown in Item 4 of the Declarations. If a Single Loss is covered under more than one Insuring Agreement
or Coverage, the maximum payable shall not exceed the largest applicable Single Loss Limit of Liability.
Single
Loss Defined
Single
Loss means all covered loss, including court costs and attorneys’ fees incurred by the Underwriter under General Agreement
F, resulting from
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(a)
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any
one act or series of related acts of burglary, robbery or attempt thereat, in which no
Employee is implicated, or
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|
(b)
|
any
one act or series of related unintentional or negligent acts or omissions on the part
of any person (whether an Employee or not) resulting in damage to or destruction or misplacement
of Property, or
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|
(c)
|
all
acts or omissions other than those specified in (a) and (b) preceding, caused by any
person (whether an Employee or not) or in which such person is implicated, or
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|
(d)
|
any
one casualty or event not specified in (a), (b) or (c) preceding.
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NOTICE/PROOF—LEGAL
PROCEEDINGS
AGAINST UNDERWRITER
Section
5.
(a) At
the earliest practicable moment, not to exceed 30 days, after discovery of loss, the Insured shall give the Underwriter notice
thereof.
(b) Within
6 months after such discovery, the Insured shall furnish to the Underwriter proof of loss, duly sworn to, with full particulars.
(c) Lost
Certificated Securities listed in a proof of loss shall be identified by certificate or bond numbers if such securities were issued
therewith.
(d) Legal
proceedings for the recovery of any loss hereunder shall not be brought prior to the expiration of 60 days after the original
proof of loss is filed with the Underwriter or after the expiration of 24 months from the discovery of such loss.
(e) If
any limitation embodied in this bond is prohibited by any law controlling the construction hereof, such limitation shall be deemed
to be amended so as to equal the minimum period of limitation provided by such law.
(f) This
bond affords coverage only in favor of the Insured. No suit, action or legal proceedings shall be brought hereunder by any one
other than the named Insured.
VALUATION
Section
6. Any loss of Money, or loss payable in Money, shall be paid, at the option of the Insured, in the Money of the country in which
the loss was sustained or in the United States of America dollar equivalent thereof determined at the rate of exchange at the
time of payment of such loss.
Securities
The
Underwriter shall settle in kind its liability under this bond on account of a loss of any securities or, at the option of the
Insured, shall pay to the Insured the cost of replacing such securities, determined by the market value thereof at the time of
such settlement. However, if prior to such settlement the Insured shall be compelled by the demands of a third party or by market
rules to purchase equivalent securities, and gives written notification of this to the Underwriter, the cost incurred by the Insured
shall be taken as the value of those securities. In case of a loss of subscription, conversion or redemption privileges through
the misplacement or loss of securities, the amount of such loss shall be the value of such privileges immediately preceding the
expiration thereof. If such securities cannot be replaced or have no quoted market value, or if such privileges have no quoted
market value, their value shall be determined by agreement or arbitration.
If
the applicable coverage of this bond is subject to a Deductible Amount and/or is not sufficient in amount to indemnify the Insured
in full for the loss of securities for which claim is made hereunder, the liability of the Underwriter under this bond is limited
to the payment for, or the duplication of, so much of such securities as has a value equal to the amount of such applicable coverage.
Books
of Account and Other Records
In
case of loss of, or damage to, any books of account or other records used by the Insured in its business, the Underwriter shall
be liable under this bond only if such books or records are actually reproduced and then for not more than the cost of the blank
books, blank pages or other materials plus the cost of labor for the actual transcription or copying of data which shall have
been furnished by the Insured in order to reproduce such books and other records.
Property
other than Money, Securities or Records
In
case of loss of, or damage to, any Property other than Money, securities, books of account or other records, or damage covered
under Insuring Agreement (B)(2), the Underwriter shall not be liable for more than the actual cash value of such Property, or
of items covered under Insuring Agreement (B)(2). The Underwriter may, at its election, pay the actual cash value of, replace
or repair such property. Disagreement between the Underwriter and the Insured as to the cash value or as to the adequacy of repair
or replacement shall be resolved by arbitration.
Set-Off
Any
loss covered under this bond shall be reduced by a set-off consisting of any amount owed to the Employee causing the loss if such
loss is covered under Insuring Agreement (A)
ASSIGNMENT—
SUBROGATION— RECOVERY— COOPERATION
Section
7.
(a) In
the event of payment under this bond, the Insured shall deliver, if so requested by the Underwriter, an assignment of such of
the Insured’s rights, title and interest and causes of action as it has against any person or entity to the extent of the
loss payment.
(b) In
the event of payment under this bond, the Underwriter shall be subrogated to all of the Insured’s rights of recovery therefor
against any person or entity to the extent of such payment.
(c) Recoveries,
whether effected by the Underwriter or by the Insured, shall be applied net of the expense of such recovery first to the satisfaction
of the Insured’s loss which would otherwise have been paid but for the fact that it is in excess of either the Single or
Aggregate Limit of Liability, secondly, to the Underwriter as reimbursement of amounts paid in settlement of the Insured’s
claim, and thirdly, to the Insured in satisfaction of any Deductible Amount. Recovery on account of loss of securities as set
forth in the second paragraph of Section 6 or recovery from reinsurance and/or indemnity of the Underwriter shall not be deemed
a recovery as used herein.
(d) Upon
the Underwriter’s request and at reasonable times and places designated by the Underwriter the Insured shall
|
(1)
|
submit
to examination by the Underwriter and subscribe to the same under oath; and
|
|
(2)
|
produce
for the Underwriter’s examination all pertinent records; and
|
|
(3)
|
cooperate
with the Underwriter in all matters pertaining to the loss.
|
(e) The
Insured shall execute all papers and render assistance to secure to the Underwriter the rights and causes of action provided for
herein. The Insured shall do nothing after discovery of loss to prejudice such rights or causes of action.
LIMIT
OF LIABILITY UNDER THIS BOND AND PRIOR INSURANCE
Section
8. With respect to any loss set forth in sub-section (c) of Section 4 of this bond which is recoverable or recovered in whole
or in part under any other bonds or policies issued by the Underwriter to the Insured or to any predecessor in interest of the
Insured and terminated or canceled or allowed to expire and in which the period for discovery has not expired at the time any
such loss thereunder is discovered, the total liability of the Underwriter under this bond and under such other bonds or policies
shall not exceed, in the aggregate, the amount carried hereunder on such loss or the amount
available to the Insured under such
other bonds or policies, as limited by the terms and conditions thereof, for any such loss if the latter amount be the larger.
If
the coverage of this bond supersedes in whole or in part the coverage of any other bond or policy of insurance issued by an Insurer
other than the Underwriter and terminated, canceled or allowed to expire, the Underwriter, with respect to any loss sustained
prior to such termination, cancelation or expiration and discovered within the period permitted under such other bond or policy
for the discovery of loss thereunder, shall be liable under this bond only for that part of such loss covered by this bond as
is in excess of the amount recoverable or recovered on account of such loss under such other bond or policy, anything to the contrary
in such other bond or policy notwithstanding.
OTHER
INSURANCE OR INDEMNITY
Section
9. Coverage afforded hereunder shall apply only as excess over any valid and collectible insurance or indemnity obtained by the
Insured, or by one other than the Insured on Property subject to exclusion (q) or by a Transportation Company, or by another entity
on whose premises the loss occurred or which employed the person causing the loss or the messenger conveying the Property involved.
OWNERSHIP
Section
10. This bond shall apply to loss of Property (1) owned by the Insured, (2) held by the Insured in any capacity, or (3) for which
the Insured is legally liable. This bond shall be for the sole use and benefit of the Insured named in the Declarations.
DEDUCTIBLE
AMOUNT
Section
11. The Underwriter shall be liable hereunder only for the amount by which any single loss, as defined in Section 4, exceeds the
Single Loss Deductible amount for the Insuring Agreement or Coverage applicable to such loss, subject to the Aggregate Limit of
Liability and the applicable Single Loss Limit of Liability.
The
Insured shall, in the time and in the manner prescribed in this bond, give the Underwriter notice of any loss of the kind covered
by the terms of this bond, whether or not the Underwriter is liable therefor, and upon the request of the Underwriter shall file
with it a brief statement giving the particulars concerning such loss.
TERMINATION
OR CANCELATION
Section
12. This bond terminates as an entirety upon occurrence of any of the following:—(a) 60 days after the receipt by the Insured
of a written notice from the Underwriter of its desire to cancel this bond, or (b) immediately upon the receipt by the Underwriter
of a written notice from the Insured of its desire to cancel this bond, or (c) immediately upon the taking over of the Insured
by a receiver or other liquidator or by State or Federal officials, or (d) immediately upon the taking over of the Insured by
another institution, or (e) immediately upon exhaustion of the Aggregate Limit of Liability, or (f) immediately upon expiration
of the Bond Period as set forth in Item 2 of the Declarations.
This
bond terminates as to any Employee or any partner, officer or employee of any Processor—(a) as soon as any Insured, or any
director or officer not in collusion with such person, learns of any dishonest or fraudulent act committed by such person at any
time, whether in the employment of the Insured or otherwise, whether or not of the type covered under Insuring Agreement (A),
against the Insured or any other person or entity, without prejudice to the loss of any Property then in transit in the custody
of such person, or (b) 15 days after the receipt by the Insured of a written notice from the Underwriter of its desire to cancel
this bond as to such person.
Termination
of the bond as to any Insured terminates liability for any loss sustained by such Insured which is discovered after the effective
date of such termination.
In
witness whereof, the Underwriter has caused this bond to be executed on the Declarations page.
SIGNATURE
PAGE
IN
WITNESS WHEREOF, the Company has caused the facsimile signatures of its President and Secretary to be affixed hereto, and has
caused this policy to be signed on the Declarations by an authorized representative of the Company.
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Robert
J. Looney, President
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Andrew
Weissert, Secretary
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AXIS 102 ARC (02-16)
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Page
1
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STATE
FRAUD STATEMENT
ALABAMA
Any
person who knowingly presents a false or fraudulent claim for payment of a loss or benefit or who knowingly presents false information
in an application for insurance is guilty of a crime and may be subject to restitution fines or confinement in prison or any combination
thereof.
ARKANSAS
Any
person who knowingly presents a false or fraudulent claim for payment of a loss or benefit or knowingly presents false information
in an application for insurance is guilty of a crime and may be subject to fines and confinement in prison.
COLORADO
It
is unlawful to knowingly provide false, incomplete, or misleading facts or information to an insurance company for the purpose
of defrauding or attempting to defraud the company. Penalties may include imprisonment, fines, denial of insurance and civil damages.
Any insurance company or agent of an insurance company who knowingly provides false, incomplete, or misleading facts or information
to a policyholder or claimant for the purpose of defrauding or attempting to defraud the policyholder or claimant with regard
to a settlement or award payable from insurance proceeds shall be reported to the Colorado division of insurance within the department
of regulatory agencies.
DISTRICT
OF COLUMBIA
Warning:
It is a crime to provide false or misleading information to an insurer for the purpose of defrauding the insurer or any other
person. Penalties include imprisonment and/or fines. In addition, an insurer may deny insurance benefits if false information
materially related to a claim was provided by the applicant.
FLORIDA
Any
person who knowingly and with intent to injure, defraud, or deceive any insurer files a statement of claim or an application containing
any false, incomplete or misleading information is guilty of a felony of the third degree.
KANSAS
A
“fraudulent insurance act” means an act committed by any person who, knowingly and with intent to defraud, presents,
causes to be presented or prepares with knowledge or belief that it will be presented to or by an insurer, purported insurer,
broker or any agent thereof, any written electronic, electronic impulse, facsimile, magnetic, oral, or telephonic communication
or statement as part of, or in support of, an application for the issuance of, or the rating of an insurance policy for personal
or commercial insurance, or a claim for payment or other benefit pursuant to an insurance policy for commercial or personal insurance
which such person knows to contain materially false information concerning any fact material thereto; or conceals, for the purpose
of misleading, information concerning any fact material thereto.
KENTUCKY
Any
person who knowingly and with intent to defraud any insurance company or other person files an application for insurance containing
any materially false information, or conceals, for the purpose of misleading, information concerning any fact material thereto
commits a fraudulent insurance act, which is a crime.
LOUISIANA
Any
person who knowingly presents a false or fraudulent claim for payment of a loss or benefit or knowingly presents false information
in an application for insurance is guilty of a crime and may be subject to fines and confinement in prison.
MAINE
It
is a crime to knowingly provide false, incomplete or misleading information to an insurance company for the purpose of defrauding
the company. Penalties may include imprisonment, fines or a denial of insurance benefits.
MARYLAND
Any
person who knowingly or willfully presents a false or fraudulent claim for payment of a loss or benefit or who knowingly or willfully
presents false information in an application for insurance is guilty of a crime and may be subject to fines and confinement in
prison.
NEW
JERSEY
Any
person who includes any false or misleading information on an application for an insurance policy is subject to criminal and civil
penalties.
NEW
MEXICO
Any
person who knowingly presents a false or fraudulent claim for payment of a loss or benefit or knowingly presents false information
in an application for insurance is guilty of a crime and may be subject to civil fines and criminal penalties.
NEW
YORK
Any
person who knowingly and with intent to defraud any insurance company or other person files an application for insurance or statement
of claim containing any materially false information, or conceals for the purpose of misleading, information concerning any fact
material thereto, commits a fraudulent insurance act, which is a crime, and shall also be subject to a civil penalty not to exceed
five thousand dollars and the stated value of the claim for each such violation.
OHIO
Any
person who, with intent to defraud or knowing that he is facilitating a fraud against an insurer, submits an application or files
a claim containing a false or deceptive statement is guilty of insurance fraud.
OKLAHOMA
WARNING:
Any person who knowingly, and with intent to injure, defraud or deceive any insurer, makes any claim for proceeds of an insurance
policy containing any false, incomplete or misleading information is guilty of a felony.
OREGON
Any
person who knowingly presents a false or fraudulent claim for payment of a loss or benefit or knowingly presents materially false
information in an application for insurance may be guilty of a crime and may be subject to fines and confinement in prison.
In
order for us to deny a claim on the basis of misstatements, misrepresentations, omissions or concealments on your part, we must
show that:
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A.
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The
misinformation is material to the content of the policy;
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B.
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We
relied upon the misinformation; and
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C.
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The
information was either:
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1.
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Material
to the risk assumed by us; or
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|
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2.
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Provided
fraudulently.
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For
remedies other than the denial of a claim, misstatements, misrepresentations, omissions or concealments on your part must either
be fraudulent or material to our interests.
With
regard to fire insurance, in order to trigger the right to remedy, material misrepresentations must be willful or intentional.
Misstatements,
misrepresentations, omissions or concealments on your part are not fraudulent unless they are made with the intent to knowingly
defraud.
PENNSYLVANIA
Any
person who knowingly and with intent to defraud any insurance company or other person files an application for insurance or statement
of claim containing any materially false information or conceals for the purpose of misleading, information concerning any fact
material thereto commits a fraudulent insurance act, which is a crime and subjects such person to criminal and civil penalties.
PUERTO
RICO
Any
person who knowingly and with the intention of defrauding presents false information in an insurance application, or presents,
helps, or causes the presentation of a fraudulent claim for the payment of a loss or any other benefit, or presents more than
one claim for the same damage or loss, shall incur a felony and, upon conviction, shall be sanctioned for each violation with
the penalty of a fine of not less than five thousand dollars ($5,000) and not more than ten thousand dollars ($10,000), or a fixed
term of imprisonment for three (3) years, or both penalties. Should aggravating circumstances be present, the penalty thus established
may be increased to a maximum of five (5) years, if extenuating circumstances are present, it may be reduced to a minimum of two
(2) years.
RHODE
ISLAND
Any
person who knowingly presents a false or fraudulent claim for payment of a loss or benefit or knowingly presents false information
in an application for insurance is guilty of a crime and may be subject to fines and confinement in prison.
TENNESSEE
It
is a crime to knowingly provide false, incomplete or misleading information to an insurance company for the purpose of defrauding
the company. Penalties include imprisonment, fines and denial of insurance benefits.
VIRGINIA
It
is a crime to knowingly provide false, incomplete or misleading information to an insurance company for the purpose of defrauding
the company. Penalties include imprisonment, fines and denial of insurance benefits.
WASHINGTON
It
is a crime to knowingly provide false, incomplete or misleading information to an insurance company for the purpose of defrauding
the company. Penalties include imprisonment, fines and denial of insurance benefits.
WEST
VIRGINIA
Any
person who knowingly presents a false or fraudulent claim for payment of a loss or benefit or knowingly presents false information
in an application for insurance is guilty of a crime and may be subject to fines and confinement in prison.
POLICYHOLDER
NOTICE
ECONOMIC
AND TRADE SANCTIoNS
This
Notice provides information concerning possible impact on your insurance coverage due to directives issued by the Office of
Foreign Assets Control (OFAC).
The
Office of Foreign Assets Control (“OFAC”) of the US Department of the Treasury administers and enforces economic and
trade sanctions based on US foreign policy and national security goals against targeted foreign countries and regimes, terrorists,
international narcotics traffickers, those engaged in activities related to the proliferation of weapons of mass destruction,
and other threats to the national security, foreign policy or economy of the United States.
whenever
coverage provided by this policy would be in violation of any U.S. economic or trade sanctions, such coverage shall be null and
void.
For
more information, please refer to:
https://www.treasury.gov/resource-center/sanctions/Pages/default.aspx
AXIS 906 (03-16)
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Page
1
of 1
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Rider
No. 1
To
be attached to and form part of Financial Institution Bond, Standard Form No. 14, No. RNN623821/01/2019 in favor of Rand
Capital Corporation & Rand Capital SBIC, Inc
It
is agreed that:
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1.
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Part
(a) of the section entitled “Termination or Cancelation” of this bond/policy is deleted.
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2.
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Cancelation
of this bond/policy by the Underwriter/Company is subject to the following provisions:
|
If
the bond/policy has been in effect for 60 days or less, it may be canceled by the Underwriter/Company for any reason. Such cancelation
shall be effective 20 days after the Underwriter/Company mails a notice of cancelation to the first-named insured at the mailing
address shown in the bond/policy. However, if the bond/policy has been in effect for more than 60 days or is a renewal, then cancelation
must be based on one of the following grounds:
|
(A)
|
non-payment
of premium;
|
|
(B)
|
conviction
of a crime arising out of acts increasing the hazard insured against;
|
|
(C)
|
discovery
of fraud or material misrepresentation in the obtaining of the bond/policy or in the presentation of claim thereunder;
|
|
(D)
|
after
issuance of the bond/policy or after the last renewal date, discovery of an act or omission, or a violation of any bond/policy
condition that substantially and materially increases the hazard insured against, and which occurred subsequent to inception
of the current bond/policy period;
|
|
(E)
|
material
change in the nature or extent of the risk, occurring after issuance or last annual renewal anniversary date of the bond/policy,
which causes the risk of loss to be substantially and materially increased beyond that contemplated at the time the bond/policy
was issued or last renewed;
|
|
(F)
|
the
cancelation is required pursuant to a determination by the superintendent that continuation of the present premium volume
of the insurer would jeopardize that insurer’s solvency or be hazardous to the interests of the insureds, the insurer’s
creditors or the public;
|
|
(G)
|
a
determination by the superintendent that the continuation of the bond/policy would violate, or would place the insurer in
violation of, any provision of the New York State insurance laws.
|
|
(H)
|
where
the insurer has reason to believe, in good faith and with sufficient cause, that there is a possible risk or danger that the
insured property will be destroyed by the insured for the purpose of collecting the insurance proceeds, provided, however,
that:
|
|
(i)
|
a
notice of cancelation on this ground shall inform the insured in plain language that the insured must act within ten days
if review by the Insurance Department of the State of New York of the ground for cancelation is desired, and
|
|
(ii)
|
notice
of cancelation on this ground shall be provided simultaneously by the insurer to the Insurance Department of the State of
New York.
|
Cancelation
based on one of the above grounds shall be effective 15 days after the notice of cancelation is mailed or delivered to the named
insured, at the address shown on the bond/policy, and to its authorized agent or broker.
NEW
YORK STATUTORY RIDER/ENDORSEMENT
FOR
USE WITH FINANCIAL INSTITUTION BONDS, STANDARD FORMS NOS. 14, 15, 24 AND
25,
AND EXCESS BANK EMPLOYEE DISHONESTY BOND, STANDARD FORM NO. 28, AND COM-
PUTER
CRIME POLICY FOR FINANCIAL INSTITUTIONS TO COMPLY WITH STATUTORY RE-
QUIREMENTS.
REVISED
TO DECEMBER, 1993
3.
If the Underwriter/company elects not to replace a bond/policy at the termination of the bond/policy period, it shall notify the
insured not more than 120 days nor less than 60 days before termination. If such notice is given late, the bond/policy shall continue
in effect for 60 days after such notice is given. The Aggregate Limit of Liability shall not be increased or reinstated. The notice
not to replace shall be mailed to the insured and its broker or agent.
4.
If the Underwriter/Company elects to replace the bond/policy, but with a change of limits, reduced coverage, increased deductible,
additional exclusion, or upon increased premiums in excess of ten percent (exclusive of any premium increase as a result of experience
rating), the Underwriter/Company must mail written notice to the insured and its agent or broker not more than 120 days nor less
than 60 days before replacement. If such notice is given late, the replacement bond/policy shall be in effect with the same terms,
conditions and rates as the terminated bond/policy for 60 days after such notice is given.
5.
The Underwriter/Company may elect to simply notify the insured that the bond/policy will either be not renewed or renewed with
different terms, conditions or rates. In this event, the Underwriter/Company will inform the insured that a second notice will
be sent at a later date specifying the Underwriter’s/Company’s exact intention. The Underwriter/Company shall inform
the insured that, in the meantime, coverage shall continue on the same terms, conditions and rates as the expiring bond/policy
until the expiration date of the bond/policy or 60 days after the second notice is mailed or delivered, whichever is later.
Rider
No.
|
This
rider is effective on the effective date of the bond unless a different date is set forth below.
|
Bond
No.
|
☐ Additional
☐
Return
Premium
|
2
|
12:01
a.m. on July 1, 2019
|
RNN623821/01/2019
|
N/A
|
AMEND
NAMED INSURED RIDER
It
is agreed that Item 1. Name of Insured (herein called Insured) of the Declarations is amended to include the following:
Rand
Capital SBIC, Inc.
Rand
Capital SBICII,L.P.
All
other provisions of the bond remain unchanged.
Includes copyright material of The Surety Association of America FI 1002 (08 14)
|
Page
1
of 1
|
Rider
No. 3
To
be attached to and form part of Financial Institution Bond, Standard Form No. 14, No. RNN623821/01/2019 in favor of Rand
Capital Corporation & Rand Capital SBIC, Inc.
It
is agreed that:
|
1.
|
The
attached bond is amended by adding an Insuring Agreement as follows:
|
COMPUTER
SYSTEMS FRAUD
|
Loss
resulting directly from a fraudulent
|
|
(1)
|
entry
of Electronic Data or Computer Program into, or
|
|
|
|
|
(2)
|
change
of Electronic Data or Computer Program within
|
|
any
Computer System operated by the Insured, whether owned or leased; or any Computer System identified in the application for
this bond; or a Computer System first used by the Insured during the Bond Period, as provided by General Agreement B of this
bond;
|
|
provided
that the entry or change causes
|
|
(i)
|
Property
to be transferred, paid or delivered,
|
|
|
|
|
(ii)
|
an
account of the Insured, or of its customer to be added, deleted, debited or credited, or
|
|
|
|
|
(iii)
|
an
unauthorized account or a fictitious account to be debited or credited.
|
|
In
this Insuring Agreement, fraudulent entry of change shall include such entry or change made by an Employee of the Insured
acting in good faith on an instruction from a software contractor who has a written agreement with the Insured to design,
implement or service programs for a Computer System covered by this Insuring Agreement.
|
2.
In addition to the Conditions and Limitations in the bond, the following, applicable to the Computer Systems Fraud Insuring Agreement,
are added:
DEFINITIONS
|
(A)
|
Computer
Program means a set of related electronic instructions which direct the operations and functions of a computer or devices
connected to it which enable the computer or devices to receive, process, store or send Electronic Data;
|
|
|
|
|
(B)
|
Computer
System means
|
|
(1)
|
computers
with related peripheral components, including storage components wherever located,
|
|
|
|
|
(2)
|
systems
and applications software,
|
|
|
|
|
(3)
|
terminal
devices, and
|
|
|
|
|
(4)
|
related
communications networks
|
by
which Electronic Data are electronically collected, transmitted, processed, stored and retrieved;
|
(C)
|
Electronic
Data means facts or information converted to a form usable in a Computer System by Computer Programs, and which is stored
on magnetic tapes or disks, or optical storage disks or other bulk media.
|
COMPUTER
SYSTEMS FRAUD INSURING AGREEMENT
FOR
USE WITH FINANCIAL INSTITUTION BONDS, STANDARD FORMS NOS. 14, 15 AND 25
ADOPTED
DECEMBER, 1993
SR
6196
EXCLUSIONS
|
(A)
|
loss
resulting directly or indirectly from the assumption of liability by the Insured by contract unless the liability arises from
a loss covered by the Computer Systems Fraud Insuring Agreement and would be imposed on the Insured regardless of the existence
of the contract:
|
|
|
|
|
(B)
|
loss
resulting directly or indirectly from negotiable instruments, securities, documents or other written instruments which bear
a forged signature, or are counterfeit, altered or otherwise fraudulent and which are used as source documentation in the
preparation of Electronic Data or manually keyed into a data terminal;
|
|
|
|
|
(C)
|
loss
resulting directly or indirectly from
|
|
(1)
|
mechanical
failure, faulty construction, error in design, latent defect, fire, wear or tear, gradual deterioration, electrical disturbance
or electrical surge which affects a Computer System, or
|
|
|
|
|
(2)
|
failure
or breakdown of electronic data processing media, or
|
|
|
|
|
(3)
|
error
omission in programming or processing;
|
|
(D)
|
loss
resulting directly or indirectly from the input of Electronic Data into a Computer System terminal device either on the premises
of a customer of the Insured or under the control of such a customer by a person who had authorized access to the customer’s
authentication mechanism;
|
|
|
|
|
(E)
|
loss
resulting directly or indirectly from the theft of confidential information.
|
SERIES
OF LOSSES
All
loss or series of losses involving the fraudulent acts of one individual, or involving fraudulent acts in which one individual
is implicated, whether or not that individual is specifially identified, shall be treated as a Single Loss and subject to the
Single Loss Limit of Liability. A series of losses involving unidentified individuals but arising from the same method of operation
shall be deemed to involve the same individual and in that event shall be treated as a Single Loss and subject to the Single Loss
Liability.
3.
The exclusion below, found in financial institution bonds forms 14, and 25, does not apply to the Computer Systems Fraud Insuring
Agreement.
“loss
involving any Uncertificated Security except an Uncertificated Security of any Federal Reserve Bank of the United States or when
covered under Insuring Agreement (A);”
4.
This rider shall become effective as of 12:01 a.m. on July 1, 2019.
Rider No.
|
This rider is effective on the effective date of the bond unless a different date is set forth below.
|
Bond No.
|
☐ Additional
☐ Return
Premium
|
4
|
12:01 a.m. on July 1, 2019
|
RNN623821/01/2019
|
N/A
|
TELEFACSIMILE
TRANSFER FRAUD
INSURING
AGREEMENT RIDER
It
is agreed that:
I.
|
The
INSURING AGREEMENTS are amended by the addition of the following:
|
TELEFACSIMILE
TRANSFER FRAUD
Loss
resulting directly from the Insured having, in good faith, transferred or delivered Funds or securities through a Computer System
in reliance upon a fraudulent instruction received through a Telefacsimile Device, and which instruction:
|
(1)
|
purports
and reasonably appears to have originated from:
|
|
(a)
|
a
Customer of the Insured;
|
|
|
|
|
(b)
|
another
financial institution; or
|
|
|
|
|
(c)
|
another
office of the Insured;
|
|
|
|
|
but,
in fact, was not originated by the Customer or entity whose identification it bears; and
|
|
(2)
|
contains
a valid test code which proves to have been used by a person who was not authorized to make use of it; and
|
|
|
|
|
(3)
|
contains
the name of a person authorized to initiate such transfer;
|
|
|
|
|
provided
that, if the transfer was in excess of $15,000, the instruction was verified by a call-back according to a prearranged procedure.
|
II.
|
The
applicable Single Loss Limit of Liability and Single Loss Deductible for the Telefacsimile Transfer Fraud Insuring Agreement
are as set forth in the Declarations.
|
|
|
III.
|
For
the purposes of the coverage provided by this rider:
|
|
A.
|
The
following Definitions shall apply:
|
Computer
Program means a set of related electronic instructions which direct the operations and functions of a computer or devices connected
to it which enable the computer or devices to receive, process, store, or send Electronic Data.
Includes copyright material of The Surety Association of America FI 1007 (08 14)
|
Page
1
of 2
|
Computer
System means:
|
(1)
|
computers
with related peripheral components, including storage components wherever located;
|
|
|
|
|
(2)
|
systems
and applications software;
|
|
|
|
|
(3)
|
terminal
devices; and
|
|
|
|
|
(4)
|
related
communications networks;
|
by
which Electronic Data are electronically collected, transmitted, processed, stored, and retrieved, and which is operated by the
Insured, whether owned or leased; or which is identified in the application for this bond.
Computer
System does not include any such computers, systems, software, devices, or networks acquired by the Insured through merger with
or acquisition of another entity, or acquisition of the assets of another entity, unless the Insured:
|
(a)
|
provides
the Underwriter with written notice of such merger or acquisition prior to the proposed effective date of such transaction;
and
|
|
|
|
|
(b)
|
obtains
the written consent of the Underwriter to extend coverage under this bond to such computers, systems, software, devices, or
networks; and
|
|
|
|
|
(c)
|
pays
such additional premium as required by the Underwriter.
|
Customer
means an entity or individual which has a written agreement with the Insured authorizing the Insured to rely on Telefacsimile
Device instructions to initiate transfers and has provided the Insured with the names of persons authorized to initiate such transfers,
and with which the Insured has established an instruction verification mechanism.
Electronic
Data means facts or information converted to a form usable in a Computer System by Computer Programs, and which is stored on magnetic
tapes or disks, or optical storage disks, or other bulk media.
Funds
means money on deposit in an account.
Telefacsimile
Device means a machine capable of sending or receiving a duplicate image of a document by means of electronic impulses transmitted
through a telephone line and which reproduces the duplicate image on paper.
|
B.
|
The
following Exclusion shall apply:
|
This
bond does not cover loss resulting directly or indirectly from the assumption of liability by the Insured by contract unless the
liability arises from a loss covered by the Telefacsimile Transfer Fraud Insuring Agreement and would be imposed on the Insured
regardless of the existence of the contract.
IV.
|
Proof
of loss for a claim under the Telefacsimile Transfer Fraud Insuring Agreement must include a copy of the document reproduced
by the Telefacsimile Device.
|
All
other provisions of the bond remain unchanged.
Includes copyright material of The Surety Association of America FI 1007 (08 14)
|
Page
2
of 2
|
Rider No.
|
This rider is effective on the effective date of the bond unless a different date is set forth below.
|
Bond No.
|
☐ Additional
☐ Return
Premium
|
5
|
12:01 a.m. on July 1, 2019
|
RNN623821/01/2019
|
N/A
|
VOICE
INITIATED FUNDS TRANSFER FRAUD
INSURING
AGREEMENT RIDER
It
is agreed that:
I.
|
The
INSURING AGREEMENTS are amended by the addition of the following:
|
VOICE
INITIATED FUNDS TRANSFER FRAUD
Loss
resulting directly from the Insured having, in good faith, transferred Funds from a Customer’s account to another financial
institution for credit to a designated account in reliance upon a fraudulent voice instruction transmitted by telephone which
was purported to be from:
|
(1)
|
an
officer, director, partner, or employee of a Customer who was authorized by such Customer to instruct the Insured to make
such transfer;
|
|
|
|
|
(2)
|
an
individual person who is a Customer; or
|
|
|
|
|
(3)
|
an
Employee in another office of the Insured who was authorized by the Insured to instruct other Employees to transfer Funds,
and was received by an Employee specifically designated to receive and act upon such instructions;
|
but
such voice instruction was, in fact, not from a person described in (1), (2), or (3) above; provided that
|
(i)
|
such
voice instruction was electronically recorded by the Insured and any required passwords or code words were given; and
|
|
|
|
|
(ii)
|
if
the transfer was in excess of $15,000, such voice instruction was verified by a call-back according to a prearranged procedure.
|
II.
|
The
applicable Single Loss Limit of Liability and Single Loss Deductible for the Voice Initiated Funds Transfer Fraud Insuring
Agreement are as set forth in the Declarations.
|
|
|
III.
|
For
the purposes of the coverage provided by this rider:
|
|
A.
|
The
following Definitions shall apply:
|
Customer
means an entity or individual which has a written agreement with the Insured authorizing the Insured to rely on voice instructions
to make transfers, and which has provided the Insured with the names of persons authorized to initiate such transfers, and with
which the Insured has established an instruction verification mechanism.
Funds
means money on deposit in an account.
Includes copyright material of The Surety Association of America FI 1008 (08 14)
|
Page
1
of 2
|
|
B.
|
The
following Exclusion shall apply:
|
This
bond does not cover loss resulting directly or indirectly from the assumption of liability by the Insured by contract unless the
liability arises from a loss covered by the Voice Initiated Funds Transfer Fraud Insuring Agreement and would be imposed on the
Insured regardless of the existence of the contract.
|
C.
|
Proof
of loss for a claim under the Voice Initiated Funds Transfer Fraud Insuring Agreement must include electronic recordings of
such voice instructions and the verification call-back, if such call-back was required.
|
All
other provisions of the bond remain unchanged.
Includes copyright material of The Surety Association of America FI 1008 (08 14)
|
Page
2
of 2
|
Rider No.
|
This rider is effective on the effective date of the bond unless a different date is set forth below.
|
Bond No.
|
☐ Additional
☐ Return
Premium
|
6
|
12:01 a.m. on July 1, 2019
|
RNN623821/01/2019
|
N/A
|
DESTRUCTION
OF DATA OR PROGRAMS BY HACKER
INSURING
AGREEMENT RIDER
It
is agreed that:
I.
|
The
INSURING AGREEMENTS are amended by the addition of the following:
|
DESTRUCTION
OF DATA OR PROGRAMS BY HACKER
Loss
resulting directly from the malicious destruction of, or damage to, Electronic Data or Computer Programs owned by the Insured
or for which the Insured is legally liable while stored within a Computer System.
The
liability of the Underwriter shall be limited to the cost of duplication of such Electronic Data or Computer Programs from other
Electronic Data or Computer Programs which shall have been furnished by the Insured.
In
the event, however, that destroyed or damaged Computer Programs cannot be duplicated from other Computer Programs, the Underwriter
will pay the cost incurred for computer time, computer programmers, consultants, or other technical specialists as is reasonably
necessary to restore Computer Programs to substantially the previous level of operational capability.
II.
|
The
applicable Single Loss Limit of Liability and Single Loss Deductible for the Destruction of Data or Programs by Hacker Insuring
Agreement are as set forth in the Declarations.
|
|
|
III.
|
Solely
for the purposes of the coverage provided by this rider, the section of the bond entitled Single Loss Defined is replaced
with the following:
|
Single
Loss Defined
Under
the Destruction of Data or Programs by Hacker Insuring Agreement, Single Loss means all covered costs incurred by the Insured
between the time destruction or damage is discovered and the time the Computer System is restored to substantially the previous
level of operational capability. Recurrence of destruction or damage after the Computer System is restored shall constitute a
separate Single Loss.
All
loss or series of losses involving fraudulent or destructive acts of one individual, or involving fraudulent or destructive acts
in which one individual is implicated, whether or not that individual is specifically identified, shall be treated as a Single
Loss and subject to the Single Loss Limit of Liability.
A
series of losses involving unidentified individuals but arising from the same method of operation shall be deemed to involve the
same individual and in that event shall be treated as a Single Loss and subject to the Single Loss Limit of Liability.
Includes copyright material of The Surety Association of America FI 1005 (08 14)
|
Page
1
of 2
|
IV.
|
For
the purposes of the coverage provided by this rider, the following Definitions shall apply:
|
Computer
Program means a set of related electronic instructions which direct the operations and functions of a computer or devices connected
to it which enable the computer or devices to receive, process, store, or send Electronic Data.
Computer
System means:
|
(1)
|
computers
with related peripheral components, including storage components wherever located;
|
|
|
|
|
(2)
|
systems
and applications software;
|
|
|
|
|
(3)
|
terminal
devices; and
|
|
|
|
|
(4)
|
related
communication networks;
|
by
which Electronic Data are electronically collected, transmitted, processed, stored, and retrieved, and which is operated by the
Insured, whether owned or leased; or which is identified in the application for this bond.
Computer
System does not include any such computers, systems, software, devices, or networks acquired by the Insured through merger with
or acquisition of another entity, or acquisition of the assets of another entity, unless the Insured:
|
(a)
|
provides
the Underwriter with written notice of such merger or acquisition prior to the proposed effective date of such transaction;
and
|
|
|
|
|
(b)
|
obtains
the written consent of the Underwriter to extend coverage under this bond to such computers, systems, software, devices, or
networks; and
|
|
|
|
|
(c)
|
pays
such additional premium as required by the Underwriter.
|
Electronic
Data means facts or information converted to a form usable in a Computer System by Computer Programs and which is stored on magnetic
tapes or disks, or optical storage disks, or other bulk media.
All
other provisions of the bond remain unchanged.
Includes copyright material of The Surety Association of America FI 1005 (08 14)
|
Page
2
of 2
|
Rider No.
|
This rider is effective on the effective date of the bond unless a different date is set forth below.
|
Bond No.
|
☐ Additional
☐ Return
Premium
|
7
|
12:01 a.m. on July 1, 2019
|
RNN623821/01/2019
|
N/A
|
DESTRUCTION
OF DATA OR PROGRAMS BY VIRUS
INSURING AGREEMENT RIDER
It
is agreed that:
I.
|
The
INSURING AGREEMENTS are amended by the addition of the following:
|
DESTRUCTION
OF DATA OR PROGRAMS BY VIRUS
Loss
resulting directly from the malicious destruction of, or damage to, Electronic Data or Computer Programs owned by the Insured
or for which the Insured is legally liable while stored within a Computer System if such destruction or damage was caused by a
computer program or similar instruction which was written or altered to incorporate a hidden instruction designed to destroy or
damage Electronic Data or Computer Programs in the Computer System in which the computer program or instruction so written or
so altered is used.
The
liability of the Underwriter shall be limited to the cost of duplication of such Electronic Data or Computer Programs from other
Electronic Data or Computer Programs which shall have been furnished by the Insured.
In
the event, however, that destroyed or damaged Computer Programs cannot be duplicated from other Computer Programs, the Underwriter
will pay the cost incurred for computer time, computer programmers, consultants, or other technical specialists as is reasonably
necessary to restore Computer Programs to substantially the previous level of operational capability.
II.
|
The
applicable Single Loss Limit of Liability and Single Loss Deductible for the Destruction of Data or Programs by Virus Insuring
Agreement are as set forth in the Declarations.
|
|
|
III.
|
Solely
for purposes of the coverage provided by this rider, the section of the bond entitled Single Loss Defined is replaced with
the following:
|
Single
Loss Defined
Under
the Destruction of Data or Programs by Virus Insuring Agreement, Single Loss means all covered costs incurred by the Insured between
the time destruction or damage is discovered and the time the Computer System is restored to substantially the previous level
of operational capability. Recurrence of destruction or damage after the Computer System is restored shall constitute a separate
Single Loss.
All
loss or series of losses involving fraudulent or destructive acts of one individual, or involving fraudulent or destructive acts
in which one individual is implicated, whether or not that individual is specifically identified, shall be treated as a Single
Loss and subject to the Single Loss Limit of Liability.
Includes copyright material of The Surety Association of America FI 1006 (08 14)
|
Page
1
of 2
|
A
series of losses involving unidentified individuals but arising from the same method of operation shall be deemed to involve the
same individual and in that event shall be treated as a Single Loss and subject to the Single Loss Limit of Liability.
IV.
|
For
the purposes of the coverage provided by this rider, the following Definitions shall apply:
|
Computer
Program means a set of related electronic instructions which direct the operations and functions of a computer or devices connected
to it which enable the computer or devices to receive, process, store, or send Electronic Data.
Computer
System means:
|
(1)
|
computers
with related peripheral components, including storage components wherever located;
|
|
|
|
|
(2)
|
systems
and applications software;
|
|
|
|
|
(3)
|
terminal
devices; and
|
|
|
|
|
(4)
|
related
communication networks;
|
by
which Electronic Data are electronically collected, transmitted, processed, stored, and retrieved, and which is operated by the
Insured, whether owned or leased; or which is identified in the application for this bond.
Computer
System does not include any such computers, systems, software, devices, or networks acquired by the Insured through merger with
or acquisition of another entity, or acquisition of the assets of another entity, unless the Insured:
|
(a)
|
provides
the Underwriter with written notice of such merger or acquisition prior to the proposed effective date of such transaction;
and
|
|
|
|
|
(b)
|
obtains
the written consent of the Underwriter to extend coverage under this bond to such computers, systems, software, devices, or
networks; and
|
|
|
|
|
(c)
|
pays
such additional premium as required by the Underwriter.
|
Electronic
Data means facts or information converted to a form usable in a Computer System by Computer Programs and which is stored on magnetic
tapes or disks, or optical storage disks, or other bulk media.
All
other provisions of the bond remain unchanged.
Includes copyright material of The Surety Association of America FI 1006 (08 14)
|
Page
2
of 2
|
Rider No.
|
This rider is effective on the effective date of the bond unless a different date is set forth below.
|
Bond No.
|
☐ Additional
☐ Return
Premium
|
8
|
12:01 a.m. on July 1, 2019
|
RNN623821/01/2019
|
N/A
|
UNAUTHORIZED
SIGNATURES
INSURING
AGREEMENT RIDER
It
is agreed that:
I.
|
The
INSURING AGREEMENTS are amended by the addition of the following:
|
UNAUTHORIZED
SIGNATURES
Loss
resulting directly from the Insured having in good faith and in the ordinary course of business accepted from, paid to, or cashed
for a person present on the premises of the Insured, any check withdrawal order, or draft, made or drawn on a customer’s
account, which bears the signature or endorsement of one other than a person whose name and signature is on the application on
file with the Insured as a signatory on such account.
It
shall be a condition precedent to the Insured’s right of recovery under this Insuring Agreement that the Insured shall have
on file signatures of all persons who are authorized signatories on such account; and the Insured must maintain written instructions
outlining the acceptance.
II.
|
The
applicable Single Loss Limit of Liability and Single Loss Deductible for the Unauthorized Signatures Insuring Agreement are
as set forth in the Declarations.
|
All
other provisions of the bond remain unchanged.
Includes copyright material of The Surety Association of America FI 1021 (08 14)
|
Page
1
of 1
|
Rider No.
|
This rider is effective on the effective date of the bond unless a different date is set forth below.
|
Bond No.
|
☐ Additional
☐ Return
Premium
|
9
|
12:01 a.m. on July 1, 2019
|
RNN623821/01/2019
|
N/A
|
UNCOLLECTIBLE
ITEMS OF DEPOSIT COVERAGE RIDER
It
is agreed that:
I.
|
Item
4
of the Declarations is amended by the addition of the following:
|
UNCOLLECTIBLE
ITEMS OF DEPOSIT Insuring Agreement Single Loss Limit of Liability: $25,000
UNCOLLECTIBLE
ITEMS OF DEPOSIT Insuring Agreement Single Loss Deductible: $2,500
II.
|
The
Section of the bond entitled
INSURING AGREEMENTS
is amended by the addition of the following Insuring Agreement:
|
UNCOLLECTIBLE
ITEMS OF DEPOSIT
Loss
resulting directly from the Insured having, in good faith, credited its customer’s, shareholder’s or subscriber’s
account of any item of deposit which proves to be uncollectible, provided that:
|
(1)
|
the
item was held for a minimum of five (5) days before any redemption, withdrawal, dividend payment or share issuance occurs
with respect to that item of deposit; and
|
|
|
|
|
(2)
|
there
was a redemption, withdrawal, dividend payment or share issuance with respect to that item of deposit.
|
Items
of Deposit shall not be deemed uncollectible until the Insured’s collection procedures have failed.
For
the purposes of this Insuring Agreement, Item of Deposit means any one or more checks and drafts drawn upon a financial institution
in the United States of America.
All
other provisions of the bond remain unchanged.
Includes copyright material of The Surety Association of America FI 1049 (05-16)
|
Page
1
of 1
|
Rider No.
|
This rider is effective on the effective date of the bond unless a different date is set forth below.
|
Bond No.
|
☐ Additional
☐ Return
Premium
|
10
|
12:01 a.m. on July 1, 2019
|
RNN623821/01/2019
|
N/A
|
CLAIM
EXPENSE INSURING AGREEMENT RIDER
It
is agreed that:
I.
|
The
INSURING AGREEMENTS are amended by the addition of the following:
|
CLAIM
EXPENSE
Reasonable
expenses necessarily incurred and paid by the Insured in preparing any valid claim for loss covered under this bond.
II.
|
The
applicable Single Loss Limit of Liability and Single Loss Deductible for the Claim Expense Insuring Agreement are as set forth
in the Declarations. Such limit shall be part of, and not in addition to, the Single Loss Limit of Liability for the Insuring
Agreement applicable to the loss that is the subject of the valid claim as set forth in the Claim Expense Insuring Agreement.
|
|
|
III.
|
Paragraph
(1) of Exclusion (u) shall not apply to the Claim Expense Insuring Agreement.
|
All
other provisions of the bond remain unchanged.
Includes copyright material of The Surety Association of America FI 1004 (08 14)
|
Page
1
of 1
|
Rider
No.
|
This rider is effective on the effective
date of the bond unless a different
date is set forth below.
|
Bond
No.
|
☐
Additional
☐ Return
Premium
|
11
|
12:01
a.m. on July 1, 2019
|
RNN623821/01/2019
|
N/A
|
AUDIT
EXPENSE INSURING AGREEMENT RIDER
It
is agreed that:
I.
|
The
INSURING AGREEMENTS are amended by the addition of the following:
|
AUDIT
EXPENSE
Reasonable
expenses incurred by the Insured for that part of the cost of audits or examinations required by any governmental regulatory authority
to be conducted either by such authority or by an independent accountant by reason of the discovery of loss under Insuring Agreement
(A) FIDELITY.
II.
|
The
applicable Single Loss Limit of Liability and Single Loss Deductible for the Audit Expense Insuring Agreement are as set forth
in the Declarations. Such limit shall be part of, and not in addition to, the Single Loss Limit of Liability for Insuring
Agreement (A) FIDELITY set forth in the Declarations.
|
|
|
III.
|
Paragraph
(1) of Exclusion (o) shall not apply to the Audit Expense Insuring Agreement.
|
All
other provisions of the bond remain unchanged.
Includes copyright material of The Surety Association of America
FI 1003-25 (08 14)
|
Page
1
of 1
|
Rider No.
|
This rider is effective on the effective
date of the bond unless a different
date is set forth below.
|
Bond No.
|
☐ Additional
☐ Return
Premium
|
12
|
12:01 a.m. on July 1, 2019
|
RNN623821/01/2019
|
N/A
|
AMEND
FIDELITY INSURING AGREEMENT RIDER
It
is agreed that:
I.
|
The
first paragraph of Insuring Agreement (A) FIDELITY is replaced with the following:
|
Loss
resulting directly from dishonest or fraudulent acts, including Larceny or Embezzlement, committed by an Employee acting alone
or in collusion with others. Such dishonest or fraudulent acts must be committed by the Employee with the manifest intent:
(1)
to cause the Insured to sustain such loss; and
(2)
to obtain an improper financial benefit for the Employee or another person or entity.
Notwithstanding
the foregoing, however, it is agreed that with regard to Loans and/or Trading, this bond covers only loss resulting directly from
dishonest or fraudulent acts committed by an Employee with the intent to cause the Insured to sustain such loss and which results
in a financial benefit for the Employee.
As
used in this Insuring Agreement, financial benefit does not include any employee benefits earned in the normal course of employment,
including salaries, commissions, fees, bonuses, promotions, awards, profit sharing or pensions.
The
term Loans, as used in this Insuring Agreement, means all extensions of credit by the Insured and all transactions creating a
creditor relationship in favor of the Insured and all transactions by which the Insured assumes an existing creditor relationship.
The
term Trading, as used in this Insuring Agreement, means trading or other dealing in securities, commodities, futures, options,
swaps, foreign or Federal Funds, currencies, foreign exchange and the like.
II.
|
For
the purposes of this bond, the term Larceny and Embezzlement shall have the same meaning set forth in Section 37 of The Investment
Company Act of 1940.
|
All
other provisions of the bond remain unchanged.
Includes copyright material of The Surety Association of America
FI 1013-14 (08 14)
|
Page
1
of 1
|
Rider No.
|
This rider is effective on the effective
date of the bond unless a different
date is set forth below.
|
Bond No.
|
☐ Additional
☐ Return
Premium
|
13
|
12:01 a.m. on July 1, 2019
|
RNN623821/01/2019
|
N/A
|
INVESTMENT
COMPANY – NO DEDUCTIBLE
RIDER
It
is agreed that the Section entitled CONDITIONS AND LIMITATIONS is amended as follows:
A.
|
The
subsection entitled DEFINITIONS is amended by the addition of the following:
|
|
●
|
Investment
Company means any Investment Company registered under the Investment Company Act of 1940.
|
B.
|
The
subsection entitled DEDUCTIBLE AMOUNT is amended by the addition of the following:
|
|
●
|
Notwithstanding
the foregoing, there shall be no Deductible Amount applicable to any loss under Insuring
Agreement A sustained by any Investment Company named as an Insured herein.
|
All
other provisions of the bond remain unchanged.
FI 1062 (11-16)
|
Page
1
of 1
|
Rider No.
|
This rider is effective on the effective
date of the bond unless a different
date is set forth below.
|
Bond No.
|
☐ Additional
☐ Return
Premium
|
14
|
12:01 a.m. on July 1, 2019
|
RNN623821/01/2019
|
N/A
|
AMEND
RACKETEERING EXCLUSION RIDER
It
is agreed that Exclusion 2(j) of the CONDITIONS AND LIMITATIONS is replaced with the following:
|
(j)
|
damages
resulting from any civil, criminal or other legal proceeding in which the Insured is
adjudicated to have engaged in racketeering activity except when the Insured establishes
that the act or acts giving rise to such damages were committed by an Employee under
circumstances which result directly in a loss to the Insured covered by Insuring Agreement
(A). For the purposes of this Exclusion, “racketeering activity” is defined
in 18 United States Code 1961 et seq., as amended;
|
All
other provisions of the bond remain unchanged.
Includes copyright material of The Surety Association of America
FI 1009-14 (08 14)
|
Page
1
of 1
|
Rider No.
|
This rider is effective on the effective
date of the bond unless a different
date is set forth below.
|
Bond No.
|
☐Additional
☐ Return
Premium
|
15
|
12:01 a.m. on July 1, 2019
|
RNN623821/01/2019
|
N/A
|
AMEND
REPRESENTATION OF INSURED RIDER
It
is agreed that the second paragraph of the section of the bond entitled REPRESENTATION OF INSURED of the GENERAL AGREEMENTS is
replaced with the following:
Any
intentional misrepresentation, omission, concealment, or incorrect statement in the application or otherwise, shall be grounds
for the rescission of this bond.
All
other provisions of the bond remain unchanged.
Includes copyright material of The Surety Association of America
FI 1014 (08 14)
|
Page
1
of 1
|
Rider No.
|
This rider is effective on the effective
date of the bond unless a different
date is set forth below.
|
Bond No.
|
☐ Additional
☐ Return
Premium
|
16
|
12:01 a.m. on July 1, 2019
|
RNN623821/01/2019
|
N/A
|
AMEND
VALUATION RIDER
It
is agreed that the first paragraph of the section of the bond entitled VALUATION of the CONDITIONS AND LIMITATIONS is replaced
with the following:
Any
loss of Money, or loss payable in Money, shall be paid, at the option of the Insured, in the Money of the country in which the
loss was sustained or in the United States of America dollar equivalent thereof determined at the rate of exchange published in
The Wall Street Journal
on the day immediately preceding the date the loss was discovered.
All
other provisions of the bond remain unchanged.
Includes copyright material of The Surety Association of America
FI 1015 (08 14)
|
Page
1
of 1
|
Rider No.
|
This rider is effective on the effective
date of the bond unless a different
date is set forth below.
|
Bond No.
|
☐ Additional
☐ Return
Premium
|
17
|
12:01 a.m. on July 1, 2019
|
RNN623821/01/2019
|
N/A
|
AMEND
COUNTERFEIT MONEY
INSURING
AGREEMENT RIDER
It
is agreed that Insuring Agreement (F) COUNTERFEIT MONEY is replaced with the following:
COUNTERFEIT
MONEY
|
(F)
|
Loss
resulting directly from the receipt by the Insured, in good faith, of any Counterfeit
Money of the United States of America, Canada, or any other country.
|
All
other provisions of the bond remain unchanged.
Includes copyright material of The Surety Association of America
FI 1016 (08 14)
|
Page
1
of 1
|
Rider No.
|
This rider is effective on the effective
date of the bond unless a different
date is set forth below.
|
Bond No.
|
☐ Additional
☐ Return
Premium
|
18
|
12:01 a.m. on July 1, 2019
|
RNN623821/01/2019
|
N/A
|
AMEND
SECURITIES INSURING AGREEMENT
(FORM
14 AND FORM 25 ENDORSEMENT)
It
is agreed that:
I.
|
Wherever
the phrase ‘“Statement of Uncertificated Security of any Federal Reserve
Bank of the United States” appears in this bond, it is deleted and replaced with
the defined term ‘‘Statement of Uncertificated Security.”
|
II.
|
The
phrase “Instruction to a Federal Reserve Bank of the United States” in paragraph
(1) in Insuring Agreement E – Securities is deleted and replaced with the defined
term “Instruction.”
|
III.
|
The
definition of Property is amended by deleting the phrase “Uncertificated Securities
of any Federal Reserve Bank of the United States” and replacing it with “Uncertificated
Securities.”
|
IV.
|
The Exclusion for loss involving any Uncertificated
Security is deleted.
|
All
other provisions of the Policy remain unchanged.
FI 1035 (04-16)
|
Page
1
of 1
|
Rider No.
|
This rider is effective on the effective
date of the bond unless a different
date is set forth below.
|
Bond No.
|
☐ Additional
☐ Return
Premium
|
19
|
12:01 a.m. on July 1, 2019
|
RNN623821/01/2019
|
N/A
|
AMEND
DEFINITION OF EMPLOYEE TO INCLUDE AFFILIATED PERSONS RIDER
(1940
ACT)
It
is agreed that the Section of the bond entitled
CONDITIONS AND LIMITATIONS
, Section 1. DEFINITIONS, Definition (e) Employee,
is amended to include the following:
|
●
|
a
natural person partner, officer or employee of an investment adviser, underwriter (distributor),
transfer agent or shareholder accounting recordkeeper, or administrator for the Insured,
but only while performing acts coming within the usual and customary duties of an officer
or employee of the Insured or acting as a member of any committee duly elected or appointed
to examine, audit or have custody of or access to Property of the Insured; provided that
the adviser, underwriter, transfer agent, recordkeeper or administrator is an affiliated
person (as defined in Section 2(a) of the Investment Company Act of 1940) of the Insured;
|
All
other provisions of the bond remain unchanged.
Includes copyright material of The Surety Association of America
FI 1050 (05-16)
|
Page
1
of 1
|
Rider No.
|
This rider is effective on the effective
date of the bond unless a different
date is set forth below.
|
Bond No.
|
☐ Additional
☐ Return
Premium
|
20
|
12:01 a.m. on July 1, 2019
|
RNN623821/01/2019
|
N/A
|
SECURITIES
AND EXCHANGE COMMISSION
NOTIFICATION
RIDER
It
is agreed that:
I.
|
In
the event that this bond is cancelled, terminated, or Substantially Modified, the Underwriter
agrees to use its best efforts to notify the Securities and Exchange Commission (“SEC”)
within sixty (60) days following such cancellation, termination, or modification, whether
such cancellation, termination, or modification is at the request of the Insured or the
Underwriter. Failure on the part of the Underwriter to provide such notice shall not
impair or delay the effectiveness of such cancellation, termination, or modification,
nor shall the Underwriter be held liable in any way for such failure.
|
II.
|
For
the purposes of this rider, Substantially Modified means a change in the type or amount
of fidelity bond coverage, or a change in the exclusions of this bond, or any change
in the bond such that it no longer meets the requirements of the applicable SEC laws
and regulations.
|
All
other provisions of the bond remain unchanged.
Includes copyright material of The Surety & Fidelity Association of America
FI 1020-14 (08 14)
|
Page
1
of 1
|
Rider No.
|
This rider is effective on the effective
date of the bond unless a different
date is set forth below.
|
Bond No.
|
☐ Additional
☐ Return
Premium
|
21
|
12:01 a.m. on July 1, 2019
|
RNN623821/01/2019
|
N/A
|
PROTECTED
INFORMATION EXCLUSION RIDER
(
Fidelity
Carveback)
It
is agreed that this bond shall not apply to any loss resulting directly or indirectly from the: (i) theft, disappearance, or destruction
of; (ii) unauthorized use or disclosure of; (iii) unauthorized access to; or (iv) failure to protect any:
A.
|
confidential
or non-public; or
|
B.
|
personal
or personally identifiable;
|
information
that any person or entity has a duty to protect under any law, rule or regulation, agreement, or industry guideline or standard;
provided that this shall not apply to the extent that any unauthorized use or disclosure of a password enables a theft by an Employee
of the Insured of tangible Property of the Insured or tangible Property that the Insured is holding for a third party.
Theft
of tangible Property does not include the use of confidential or non-public information or personal or personally identifiable
information to enable the theft of or disclosure of information.
All
other provisions of the bond remain unchanged.
Includes copyright material of The Surety Association of America
FI 1026 (08 14)
|
Page
1
of 1
|
Rider No.
|
This rider is effective on the effective
date of the bond unless a different
date is set forth below.
|
Bond No.
|
☐ Additional
☐ Return
Premium
|
22
|
12:01 a.m. on July 1, 2019
|
RNN623821/01/2019
|
N/A
|
AMEND
OWNERSHIP CONDITION RIDER
It
is understood and agreed that the Section entitled
CONDITIONS AND LIMITATIONS
, Section 10. OWNERSHIP, is deleted and replaced
with the following:
OWNERSHIP
Section
10. This bond shall apply to loss of Property (1) owned by the Insured, (2) held by the Insured in any capacity, or (3) owned
and held by someone else under circumstances which make the Insured responsible for the Property prior to the occurrence of the
loss. This bond shall be for the sole use and benefit of the Insured named in the Declarations.
All
other provisions of the bond remain unchanged.
Includes copyright material of The Surety Association of America
FI 1046 (05-16)
|
Page
1
of 1
|
RAND
CAPITAL CORPORATION
Fidelity
Bond
Board
Resolution
April
17, 2019
The
members of the Board of Directors of Rand Capital Corporation (the “Corporation”), hereby adopt and consent to the
adoption of the following resolutions and agree that said resolutions shall have the same force and effect as if adopted at a
meeting of the Board of Directors duly called and held for such purpose.
WHEREAS,
Section 17(g) of the Investment Company Act of 1940 (the “1940 Act”) and Rule 17g-1(a) thereunder, requires a Business
Development Company (a “BDC”), such as the Corporation, to provide and maintain a bond issued by a reputable fidelity
insurance company to protect the assets of the Corporation against larceny and embezzlement.
WHEREAS,
the Board of Directors has considered the relevant factors in determining the bond to be provided.
WHEREAS,
Section 17g-1(d) requires that the Corporation provide a bond in the minimum amount of $400,000 if its gross assets are $75 million,
which level the Corporation believes it may exceed in the future.
WHEREAS,
the Corporation has identified that an insurance company who will provide a Financial Institution Bond protecting the Corporation
with $400,000 in coverage (the “Bond”), naming the Corporation as the insured.
WHEREAS
a majority of the Board of Directors who are not interested persons of the Corporation must approve the form and amount of the
Bond.
NOW,
THEREFORE, BE IT RESOLVED, that having considered the expected aggregate value of the securities and funds of the Corporation
to which officers or employees of the Corporation may have access, the type and terms of the arrangements made for the custody
of such securities and funds, the nature of securities and other investments to be held by the Corporation, the nature and method
of conducting the operations of the Corporation, and the requirements of Section 17(g) of the 1940 Act and Rule 17g-1 thereunder,
it is determined that the amount, type, form, premium, term and coverage of the Bond covering the Corporation in the amount of
$400,000 are hereby approved;
FURTHER
RESOLVED, that the officers of the Corporation be, and they hereby are, authorized to take all appropriate actions, with the advice
of legal counsel to the Corporation, to provide and maintain the Bond on behalf of the Corporation.
These
actions are taken this 17
th
day of April 2019.
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