2010 New York Code
BSC - Business Corporation
Article 5 - (501 - 520) CORPORATE FINANCE
504 - Consideration and payment for shares.

§ 504. Consideration and payment for shares.
    (a)  Consideration  for  the issue of shares shall consist of money or
  other property, tangible  or  intangible;  labor  or  services  actually
  received  by  or  performed for the corporation or for its benefit or in
  its formation  or  reorganization;  a  binding  obligation  to  pay  the
  purchase  price  or  the subscription price in cash or other property; a
  binding obligation to perform services having an agreed  value;    or  a
  combination  thereof.    In the absence of fraud in the transaction, the
  judgment of the board or shareholders, as the case may  be,  as  to  the
  value of the consideration received for shares shall be conclusive.
    (c)  Shares  with  par value may be issued for such consideration, not
  less than the par value thereof, as is fixed from time to  time  by  the
  board.
    (d)  Shares  without par value may be issued for such consideration as
  is fixed from time to time  by  the  board  unless  the  certificate  of
  incorporation  reserves  to  the  shareholders  the  right  to  fix  the
  consideration.  If such right is reserved as to any shares,  a  vote  of
  the  shareholders  shall either fix the consideration to be received for
  the shares or authorize the board to fix such consideration.
    (e) Treasury shares may be disposed of by a corporation on such  terms
  and conditions as are fixed from time to time by the board.
    (f)   Upon   distribution   of   authorized  but  unissued  shares  to
  shareholders, that part  of  the  surplus  of  a  corporation  which  is
  concurrently  transferred  to  stated capital shall be the consideration
  for the issue of such shares.
    (g) In the event of a conversion of bonds or shares into shares, or in
  the event of an exchange of bonds or shares for shares, with or  without
  par  value,  the  consideration  for the shares so issued in exchange or
  conversion shall be the sum of (1) either  the  principal  sum  of,  and
  accrued  interest on, the bonds so exchanged or converted, or the stated
  capital then represented by the shares so exchanged or  converted,  plus
  (2)  any  additional  consideration  paid to the corporation for the new
  shares, plus (3) any stated capital not  theretofore  allocated  to  any
  designated  class  or  series  which  is  thereupon allocated to the new
  shares, plus (4) any surplus thereupon transferred to stated capital and
  allocated to the new shares.
    (h) Certificates for shares may not be issued until the amount of  the
  consideration  therefor  determined  to  be  stated  capital pursuant to
  section 506 (Determination of stated capital) has been paid in the  form
  of  cash,  services rendered, personal or real property or a combination
  thereof and consideration  for  the  balance  (if  any)  complying  with
  paragraph  (a)  of this section has been provided, except as provided in
  paragraphs (e) and (f) of section 505 (Rights and  options  to  purchase
  shares;   issue  of  rights  and  options  to  directors,  officers  and
  employees).
    (i) When the consideration for shares has been provided in  compliance
  with  paragraph (h) of this section, the subscriber shall be entitled to
  all the rights and privileges of a  holder  of  such  shares  and  to  a
  certificate representing his shares, and such shares shall be fully paid
  and nonassessable.
    (j)   Notwithstanding   that   such  shares  may  be  fully  paid  and
  nonassessable, the corporation may place in escrow shares issued  for  a
  binding  obligation  to  pay cash or other property or to perform future
  services, or make other arrangements to restrict  the  transfer  of  the
  shares,  and  may  credit distributions in respect of the shares against
  the obligation, until the obligation is performed. If the obligation  is
  not  performed  in  whole  or  in  part, the corporation may pursue such

remedies as are provided in the instrument evidencing the obligation  or
  a related agreement or under law.