New York § 504 - 504Subventions

§ 504. 504Subventions

§ 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.