§ 15-4-923 - Bonds and notes -- Use of earned surplus. - Arkansas Statutes

15-4-923. Bonds and notes -- Use of earned surplus.

(a) (1) Any development finance corporation organized under the provisions of this subchapter, from time to time, as the conduct of its business requires, may issue and sell at a price not less than par plus accrued interest its bonds or notes not to exceed, in a total aggregate amount outstanding at any one (1) time, ten (10) times the total amount of its fully paid common stock, its fully paid issued and outstanding preferred stock, its debentures issued and outstanding, and the amount of its earned surplus in excess of a reserve set aside therefrom equal in amount to five percent (5%) of the aggregate total amount of loans of the development finance corporation outstanding at any one (1) time.

(2) However, the validity of bonds or notes of the corporation valid at the time of the issuance and delivery shall not thereafter be affected if in excess of such ratio.

(b) (1) The bonds or notes of the development finance corporation shall contain such provisions concerning the limitations, conditions, and security therefor, if any, and shall be in such form and denominations; shall have such dates and maturities; shall bear interest payable at such times and places and at such rates; shall be payable at such places within or without the state; and shall contain such provisions as to registration of ownership, if registration is deemed desirable, all as the directors of the corporation shall determine in conformity with the provisions of this subchapter.

(2) They shall be executed by the president and secretary of the corporation and be sealed with the corporate seal, and, 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 shall, nevertheless, be valid and sufficient for all purposes, the same as if the officers had remained in office until such delivery.

(c) (1) Unless otherwise specifically stated therein, all bonds or notes of a development finance corporation issued under the provisions of this subchapter, irrespective of the date of issue, shall be on a parity as to security and shall be secured by a lien on the entire assets of the corporation. The lien shall be a first lien and superior to all other debts and to all other encumbrances of whatsoever nature on all of the assets of the corporation.

(2) However, the corporation may issue one (1) or more series of bonds or notes of differing parity as to security or specifying a particular lien, pledge, or other security therefor, as the board of directors shall determine.

(d) The earned surplus of the corporation, in whole or in part, in the discretion of the directors of the corporation, may be invested as provided in the bylaws of the corporation and retained in reserve to meet losses and contingencies of the corporation.