FINANCIAL INSTITUTION BOND
Standard Form No. 14, Revised to October, 1987
Bond No. RNN623821/01/2017
AXIS Reinsurance Company
(Herein called Underwriter)
DECLARATIONS
Item 1. | Name of Insured (herein called Insured): |
Rand Capital Corporation |
Principal Address: |
14 Layfayette Square |
Suite 2200 |
Buffalo, NY 14203-1922 |
Item 2. Bond Period: from 12:01 a.m. on |
July 1, 2017 | to 12:01 a.m. on | July 1, 2018 | |||
(MONTH, DAY, YEAR) | (MONTH, DAY, YEAR) |
standard time. |
Item 3. | The Aggregate Liability of the Underwriter during the Bond Period shall be |
$400,000 |
Item 4. | Subject to Sections 4 and 11 hereof, |
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: |
Single Loss Limit of Liability |
Single Loss Deductible |
||||||
Insuring Agreement (A) FIDELITY |
$ | 400,000 | $ | 15,000 | * | |||
Insuring Agreement (B) ON PREMISES |
$ | 400,000 | $ | 15,000 | ||||
Insuring Agreement (C) IN TRANSIT |
$ | 400,000 | $ | 15,000 | ||||
Insuring Agreement (D) FORGERY OR ALTERATION |
$ | 400,000 | $ | 15,000 | ||||
Insuring Agreement (E) SECURITIES |
$ | 400,000 | $ | 15,000 | ||||
Insuring Agreement (F) COUNTERFEIT CURRENCY |
$ | 400,000 | $ | 15,000 | ||||
Optional Insuring Agreements and Coverages: |
||||||||
Computer Systems Fraud |
$ | 400,000 | $ | 15,000 | ||||
Telefacsimile Transfer Fraud |
$ | 400,000 | $ | 15,000 | ||||
Voice Initiated Transfer Fraud |
$ | 400,000 | $ | 15,000 | ||||
Destruction of Data Hacker |
$ | 400,000 | $ | 15,000 | ||||
Destruction of Data Virus |
$ | 400,000 | $ | 15,000 | ||||
Unauthorized Signature |
$ | 25,000 | $ | 2,500 | ||||
Stop Payment |
$ | 25,000 | $ | 2,500 | ||||
Uncollectible Items of Deposit |
$ | 25,000 | $ | 2,500 | ||||
Audit Expense |
$ | 10,000 | $ | 2,500 | ||||
Claims Expense |
$ | 10,000 | $ | 2,500 | ||||
Partners Coverage |
N/A | N/A |
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.
TSB 5062b | Page 1 of 7 |
Item 5. | The liability of the Underwriter is subject to the terms of the following riders attached hereto: |
Riders:
1. | NY State Amendatory |
2. | Additional Named Insured (FI1002 0814) Rand Capital SBIC, Inc., Rand Capital SBIC II, L.P. |
3. | Computer Crime Rider (SR6196) |
4. | Telefacsimile Transfer Fraud (FI1007 0814) $15,000 call back |
5. | Voice Initiated Transfer Fraud (FI1008 0814) $15,000 call back |
6. | Destruction of Data Hacker (FI1005 0814) |
7. | Destruction of Data Virus (FI1006 0814) |
8. | Unauthorized Signatures (FI 1021 08/14) |
9. | Uncollectible Items of Deposit (FI1049 0516) |
10. | Claims Expense FI 1004 (08/14) |
11. | Audit Expense FI 1003 (08/14) |
12. | Amend Fidelity Insuring Agreement (A) amends to or wording for dishonest and fraudulent acts; matches definition of Larceny and Embezzlement set forth in The Investment Company Act of 1940 (FI101314 0814) |
13. | Investment Company No Deductible Rider (FI1062 116) |
14. | Amend Racketeering Exclusion Rider FI 1009 (08/14) |
15. | Amend Representation of Insured FI 1014 (08/14) |
16. | Amend Valuation Rider FI 1015 (08/14) |
17. | Amend Counterfeit currency Insuring Agreement Rider FI 1016 (08/14) |
18. | Amend Insuring Agreement E Uncertificated Securities (FI1035 0516) |
19. | Amend Definition of Employee to include Affiliated Persons Rider 1940 Act fund (FI1050 0516) |
20. | Amend Termination 60 Days to the SEC FI1020 0814 |
21. | Protected Information Exclusion FI 1026 (08/14) |
22. | Ownership Clarification (FI1046 0516) |
Item 6. | The Insured by the acceptance of this bond gives notice to the Underwriter terminating or canceling prior bond(s) or policy(ies) No.(s) N/A |
such termination or cancelation to be effective as of the time this bond becomes effective. |
Page 2 of 7 | TSB 5062b |
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
GENERAL AGREEMENTS
TSB 5062b | Page 3 of 7 |
CONDITIONS AND LIMITATIONS
Page 4 of 7 | TSB 5062b |
TSB 5062b | Page 5 of 7 |
Page 6 of 7 | TSB 5062b |
In witness whereof, the Underwriter has caused this bond to be executed on the Declarations page.
TSB 5062b | Page 7 of 7 |
SIGNATURE PAGE
IN WITNESS WHEREOF, the Insurer has caused this policy to be issued by affixing hereto the facsimile signatures of its President and Secretary.
| ||
Peter J. Vogt, President | Andrew Weissert, Secretary |
AXIS 102 AIC (06-15) | Page 1 |
RIDER/ENDORSEMENT 1
To be attached to and form part of Financial Institution Bond, Standard Form No. 14, No. RNN623821/01/2017 in favor of Rand Capital Corporation
It is agreed that:
1. Part (a) of the section entitled Termination or Cancelation of this bond/policy is deleted.
2. 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 insurers solvency or be hazardous to the interests of the insureds, the insurers 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
SR 6180b | Page 1 of 2 |
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 Underwriters/Companys 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.
Page 2 of 2 | SR 6180b |
Rider No. | This rider is effective on the effective date of the bond unless a different date is set forth below.
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Bond No. | ☐ Additional ☐ Return Premium | |||
2
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12:01 a.m. on July 1, 2017 | RNN623821/01/2017 | 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 3
To be attached to and form part of Financial Institution Bond, Standard Form No. 14, No. RNN623821/01/2017 in favor of Rand Capital Corporation
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 customers 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, 2017
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
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12:01 a.m. on July 1, 2017 | RNN623821/01/2017 | 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
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12:01 a.m. on July 1, 2017 | RNN623821/01/2017 | 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 Customers 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
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12:01 a.m. on July 1, 2017 | RNN623821/01/2017 | 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, 2017 | RNN623821/01/2017 | 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, 2017 | RNN623821/01/2017 | 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 customers 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 Insureds 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) |
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Rider No. | This rider is effective on the effective date of the bond unless a different date is set forth below.
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9
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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 customers, shareholders or subscribers 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 Insureds 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) |
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Rider No. | This rider is effective on the effective date of the bond unless a different date is set forth below.
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10
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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) |
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Rider No. | This rider is effective on the effective date of the bond unless a different date is set forth below.
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11
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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) |
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Rider No. | This rider is effective on the effective date of the bond unless a different date is set forth below.
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12
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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) |
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Rider No. | This rider is effective on the effective date of the bond unless a different date is set forth below.
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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.
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Bond No. | ☐ Additional ☐ Return Premium | |||
14
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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.
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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.
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Bond No. | ☐ Additional ☐ Return Premium | |||
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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.
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Bond No. | ☐ Additional ☐ Return Premium | |||
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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) |
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Rider No. | This rider is effective on the effective date of the bond unless a different date is set forth below.
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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.
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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) |
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Rider No. | This rider is effective on the effective date of the bond unless a different date is set forth below.
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Bond No. | ☐ Additional ☐ Return Premium | |||
20
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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.
FI 1020-14 (08 14) | Includes copyright material of The Surety & Fidelity Association of America | 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.
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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.
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22
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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 |
Secretarys Certificate
The undersigned, Daniel P. Penberthy, being duly elected, qualified and acting Chief Financial Officer, Chief Compliance Officer and Corporate Secretary of Rand Capital Corporation, a New York Corporation (the Corporation), does hereby certify that:
1. By the affirmative vote of a majority of the directors of the Corporation including a majority of such directors who are not interested persons (as defined in Section 2(a)(19) of the Investment Company Act of 1940, as amended (the 1940 Act)) of the Corporation, the following resolutions were adopted at a meeting duly called and held on April 20, 2017:
WHEREAS, the Board has reviewed the renewal of the Corporations Financial Institution Bond, issued by The Cincinnati Insurance Company (the Fidelity Bond), and
WHEREAS, the Board has considered, among other things; (i) the required amount of fidelity bond coverage under the 1940 Act; (ii) the form and amount of fidelity bond coverage in light of the securities and funds of the Corporation; (iii) the type and terms of the arrangements made for the custody of such securities and funds; (iv) the number of the insured parties; (v) the nature of securities and other investments to be held by the Corporation; (v) the nature of securities and other investments to be held by the Corporation; (vi) the amount of premium for the Fidelity Bond allocable to the Corporation; and (vii) the comparative amount that the Corporation would have had to pay if it had provided and maintained a single insured bond.
NOW, THEREFORE, BE IT RESOLVED, that the Board, including all of the Independent Directors hereby determine that the Fidelity Bond is reasonable in form and amount;
FURTHER RESOLVED, that the appropriate officers of the Corporation be, and they hereby are, authorized to enter into the Fidelity Bond for the Corporation;
FURTHER RESOLVED, that any and all previous actions taken by the Corporations officers, principals or agents in connection with the Fidelity Bond be, and hereby are, approved and ratified as duly authorized actions of the Corporation;
FURTHER RESOLVED, that the appropriate officers of the Corporation be, and each of them hereby is, authorized and directed, for and on behalf of the Corporation, to file the Fidelity Bond with the Securities and Exchange Commission (the SEC); and
FURTHER RESOLVED, that the Chief Compliance Officer of the Corporation be and hereby is, designated as the party responsible for making the necessary filings and giving the notices with respect to such bond required by paragraph (g) of Rule 17g-1 under the 1940 Act.
2. Premiums due under the Fidelity Bond will be been paid for the period July 1, 2017 to July 1, 2018.
IN WITNESS WHEREOF, the undersigned has caused this certificate to be executed on this 6th day of July 2017.
/s/ Daniel P. Penberthy |
Daniel P. Penberthy Chief Financial Officer, Chief Compliance Officer and Corporate Secretary |
RAND CAPITAL CORPORATION
Fidelity Bond
Board Resolution
April 20, 2017
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 greater than $50 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 sole 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 20th day of April 2017.
This Written Consent may be signed by two or more counterparts, which together shall constitute a single Written Consent.
/s/ Reginald B. Newman, II |
Reginald B. Newman, II (Chairman) |
/s/ Allen F. Grum |
Allen F. Grum |
/s/ Erland E. Kailbourne |
Erland E. Kailbourne |
/s/ Ross B. Kenzie |
Ross B. Kenzie |
/s/ Jayne K. Rand |
Jayne K. Rand |
/s/ Robert M. Zak |
Robert M. Zak |