N.Y. Business Corporation Law § 512: Redeemable shares

§ 512. Redeemable shares.

(a) Subject to the restrictions contained in section 513 (Purchase,

redemption and certain other transactions by a corporation with respect

to its own shares) and paragraph (b) of this section, a corporation may

provide in its certificate of incorporation for one or more classes or

series of shares which are redeemable, in whole or in part, at the

option of the corporation, the holder or another person or upon the

happening of a specified event.

(b) No redeemable common shares, other than shares of an open-end

investment company, as defined in an act of congress entitled

"Investment Company Act of 1940", as amended, or of a member corporation

of a national securities exchange registered under a statute of the

United States such as the Securities Exchange Act of 1934, as amended,

or of a corporation described in this paragraph, shall be issued or

redeemed unless the corporation at the time has outstanding a class of

common shares that is not subject to redemption. Any common shares of a

corporation which directly or through a subsidiary has a license or

franchise to conduct its business, which license or franchise is

conditioned upon some or all of the holders of such corporation's common

shares possessing prescribed qualifications, may be made subject to

redemption by the corporation to the extent necessary to prevent the

loss of, or to reinstate, such license or franchise.

(c) Shares of any class or series which may be made redeemable under

this section may be redeemed for cash, other property, indebtedness or

other securities of the same or another corporation, at such time or

times, price or prices, or rate or rates, and with such adjustments, as

shall be stated in the certificate of incorporation.

(d) Nothing in this section shall prevent a corporation from creating

sinking funds for the redemption or purchase of its shares to the extent

permitted by section 513 (Purchase, redemption and certain other

transactions by a corporation with respect to its own shares).