§ 15-4-922 - Debentures. - Arkansas Statutes

15-4-922. Debentures.

(a) Any development finance corporation organized under the provisions of this subchapter may issue debentures which shall be unsecured and noninterest-bearing and which may be payable all at one (1) time or serially over such a period of time as the corporation may provide for each such issue of debentures.

(b) The debentures issued under the provisions of this subchapter shall be issued by the corporation in such form as its directors may provide and shall be executed by the president and secretary of the corporation and be sealed with its corporate seal. In the event any of the officers whose signatures appear on any such obligation shall cease to be officers before the delivery thereof, such signatures nevertheless shall be valid and sufficient for all purposes the same as if they had remained in office until such delivery.

(c) The debentures shall not be offered for sale to the public. Instead, as a condition precedent to the purchase by the development finance corporation of bonds issued by any corporation organized and existing under the provisions of 15-4-101, 15-4-102, 15-4-201 -- 15-4-204, 15-4-206, 15-4-209 -- 15-4-212, and 15-4-501 -- 15-4-525, or as a condition precedent to the purchase by the development finance corporation of any common or preferred stock of any corporation, or as a condition precedent to the loan by the development finance corporation of any sum of money to any person, the development finance corporation may require that the corporation, the bonds or stocks of which are purchased or the person to whom money is loaned, shall purchase from the development finance corporation at par debentures equal to at least five percent (5%) of the amount of the bonds or stocks purchased or the sum of money loaned. The corporation or the person so purchasing the debentures of the development finance corporation shall pledge the debentures so purchased to the development finance corporation as additional security for the payment of the bonds purchased, for the retirement of the stocks purchased, or for the repayment of the loan made by the development finance corporation.

(d) Until all of the preferred stock of the development finance corporation issued and outstanding has been fully retired as provided in this subchapter, the entire proceeds reserved by the corporation from such sales of debentures shall be used exclusively for the retirement of the preferred stock of the corporation.