US Laws, Codes, Statutes & Cases

 
  § 504. Subventions.
    (a)  The certificate of incorporation may provide that the corporation
  shall be authorized by resolution of the  board  to  accept  subventions
  from  members  or  non-members  on terms and conditions not inconsistent
  with this  chapter,  and  to  issue  certificates  therefor.  Subvention
  certificates  shall  be  nontransferable unless such resolution provides
  that they shall be transferable, either at will or subject to  specified
  restrictions.
    (b) A subvention shall consist of money or other property, tangible or
  intangible,  actually  received  by  the corporation or expended for its
  benefit or  for  its  formation  or  reorganization,  or  a  combination
  thereof. In the absence of fraud in the transaction, the judgment of the
  board  as  to the value of the consideration received by the corporation
  shall be conclusive.
    (c) The rights of holders of  subvention  certificates  shall  at  all
  times be subordinate to the rights of creditors of the corporation.
    (d) The resolution of the board may provide that holders of subvention
  certificates shall be entitled to a fixed or contingent periodic payment
  out of the corporate assets equal to a percentage of the original amount
  or value of the subvention, but such payment shall not exceed two-thirds
  of the maximum interest rate authorized pursuant to section 5-501 of the
  general obligations law.
    (e) The resolution of the board may provide that a subvention shall be
  redeemable,  in  whole  or  in part, at the option of the corporation at
  such price or prices (not to exceed the original amount or value of  the
  subvention  plus  any  periodic payments due or accrued thereon), within
  such  period  or  periods,  and  on  such  terms  and  conditions,   not
  inconsistent with this chapter, as are stated in the resolution.
    (f)  The  resolution  of  the board may provide that holders of all or
  some subvention  certificates  shall  have  the  right  to  require  the
  corporation   after   a   specified   period  of  time  to  redeem  such
  certificates, in whole or in part, at a price  or  prices  that  do  not
  exceed  the original amount or value of the subvention plus any periodic
  payments due or accrued thereon, upon an affirmative  showing  that  the
  financial  condition of the corporation will permit the required payment
  to be made without  impairment  of  its  operations  or  injury  to  its
  creditors.   The   right  to  require  redemption  may  in  addition  be
  conditioned upon the occurrence of a specified event. For the purpose of
  enforcing their rights  under  this  paragraph,  holders  of  subvention
  certificates  shall  be entitled to inspect the books and records of the
  corporation.
    (g) Holders  of  subvention  certificates,  upon  dissolution  of  the
  corporation,  shall be entitled, after the claims of creditors have been
  satisfied, to a repayment  of  the  original  amount  or  value  of  the
  subvention  plus  any periodic payments due or accrued thereon, unless a
  lesser sum is specified in  the  certificate  of  incorporation  or  the
  resolution of the board concerning such subvention.