New York § 575 - 575Bond required

§ 575. 575Bond required

§ 575. Bond required. 1. At the time of filing each registration statement, the trading stamp company must also file with the secretary of state a bond payable to the people of the state of New York and duly executed by the company and a corporate surety qualified to do business in this state; such bond shall be conditioned upon the performance by the trading stamp company of its obligation to redeem trading stamps issued by retailers in this state when they are duly presented for redemption by the rightful holders. 2. The principal sum of the bond required by this article shall be as follows: if the company has not previously done business as a trading stamp company in this state, or if the company's gross receipts from such business during its last fiscal year was not in excess of one hundred thousand dollars the principal sum shall be ten thousand dollars; for each additional one hundred thousand dollars, or fraction thereof, of gross receipts from such business in this state, an additional ten thousand dollars, but such bond shall not exceed one hundred fifty thousand dollars. 3. On the effective date of each new bond, any and all liability on all bonds previously filed under this article shall terminate, and all rightful holders of trading stamps who prosecute their claims under this article shall prosecute such claims solely against the new bond and only by filing proofs of claim with the secretary of state in the manner provided in this article. 4. In lieu of the bond required by this section, the trading stamp company may post with the secretary of state (a) money equal to the amount of the bond otherwise required or (b) securities equal to one hundred twenty percent of the bond otherwise required. Such securities shall be of the same kinds and classes as those in which the comptroller may invest the funds of the state pursuant to section ninety-eight of the state finance law, or in which a fiduciary may invest funds he holds for investment pursuant to subparagraphs A through I of subparagraph (1) of paragraph (a) of section 11-2.2 of the Estates, Powers and Trusts Law.