N.Y. Business Corporation Law § 518: Corporate bonds

§ 518. Corporate bonds.

(a) No corporation shall issue bonds except for 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

thereof 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 as to the

value of the consideration received shall be conclusive.

(b) If a distribution of its own bonds is made by a corporation to

holders of any class or series of its outstanding shares, there shall be

concurrently transferred to the liabilities of the corporation in

respect of such bonds an amount of surplus equal to the principal amount

of, and any accrued interest on, such bonds. The amount of the surplus

so transferred shall be the consideration for the issue of such bonds.

(c) A corporation may, in its certificate of incorporation, confer

upon the holders of any bonds issued or to be issued by the corporation,

rights to inspect the corporate books and records and to vote in the

election of directors and on any other matters on which shareholders of

the corporation may vote.