New York Consolidated Laws, Business Corporation Law - BSC § 513. Purchase, redemption and certain other transactions by a corporation with respect to its own shares

(a) Notwithstanding any authority contained in the certificate of incorporation, the shares of a corporation may not be purchased by the corporation, or, if redeemable, convertible or exchangeable shares, may not be redeemed, converted or exchanged, in each case for or into cash, other property, indebtedness or other securities of the corporation (other than shares of the corporation and rights to acquire such shares) if the corporation is then insolvent or would thereby be made insolvent.  Shares may be purchased or redeemed only out of surplus.

(b) When its redeemable, convertible or exchangeable shares are purchased by the corporation within the period during which such shares may be redeemed, converted or exchanged at the option of the corporation, the purchase price thereof shall not exceed the applicable redemption, conversion or exchange price stated in the certificate of incorporation.  Upon a redemption, conversion or exchange, the amount payable by the corporation for shares having a cumulative preference on dividends may include the stated redemption, conversion or exchange price plus accrued dividends to the next dividend date following the date of redemption, conversion or exchange of such shares.

(c) No domestic corporation which is subject to the provisions of section nine hundred twelve of this chapter shall purchase or agree to purchase more than ten percent of the stock of the corporation from a shareholder for more than the market value thereof unless such purchase or agreement to purchase is approved by the affirmative vote of the board of directors and a majority of the votes of all outstanding shares entitled to vote thereon at a meeting of shareholders unless the certificate of incorporation requires a greater percentage of the votes of the outstanding shares to approve.

The provisions of this paragraph shall not apply when the corporation offers to purchase shares from all holders of stock or for stock which the holder has been the beneficial owner of for more than two years.

The terms “stock”, “beneficial owner”, and “market value” shall be as defined in section nine hundred twelve of this chapter.