N.Y. UCC Law § 3-606

Section 3--606. Impairment of Recourse or of Collateral.\n (1) The holder discharges any party to the instrument to the extent\nthat without such party's consent the holder\n (a) without express reservation of rights releases or agrees not\n to sue any person against whom the party has to the knowledge\n of the holder a right of recourse or agrees to suspend the\n right to enforce against such person the instrument or\n collateral or otherwise discharges such person, except that\n failure or delay in effecting any required presentment,\n protest or notice of dishonor with respect to any such person\n does not discharge any party as to whom presentment, protest\n or notice of dishonor is effective or unnecessary; or\n (b) unjustifiably impairs any collateral for the instrument given\n by or on behalf of the party or any person against whom he\n has a right of recourse.\n (2) By express reservation of rights against a party with a right of\nrecourse the holder preserves\n (a) all his rights against such party as of the time when the\n instrument was originally due; and\n (b) the right of the party to pay the instrument as of that time;\n and\n (c) all rights of such party to recourse against others.\n