Arkansas § 15-5-412 - Guaranty agreement provision.

§ 15-5-412. Guaranty agreement provision.

Guaranty agreements entered into by the Arkansas Development Finance Authority under the provisions of this subchapter with respect to qualified bonds issued on behalf of any borrower shall provide, among other things: That the authority guarantees and the authority is required to use the funds on deposit in the Bond Guaranty Reserve Account to meet amortization payments as guaranteed under this subchapter as the same become due, in the event and to the extent the borrower is unable to meet such payments in accordance with the terms of the bond indenture when called on to do so by the trustee of the bondholders. Whenever the authority, acting under the terms of the guaranty agreement, deems it necessary to assume the obligation of maintenance of any project, the amortization payments of which the authority has guaranteed under the provisions of this subchapter, the authority may use funds on deposit in the account to pay insurance and maintenance costs required for the preparation of the same and to protect the account from loss or to minimize losses in such manner as deemed necessary and advisable by the authority; and That the guaranty shall not be a general obligation of the authority or of the State of Arkansas, but shall be a special obligation, and in no event shall the guaranty constitute an indebtedness of the authority or of the State of Arkansas within the meaning of any constitutional or statutory limitation. Each guaranty agreement shall have plainly stated on the face of the agreement that the same has been entered into under the provisions of this subchapter, and that it does not constitute an indebtedness of the authority or of the State of Arkansas within any constitutional or statutory limitation, and that the full faith and credit of the State of Arkansas or any of its revenues are not pledged to meet any of the obligations of the authority under the guaranty agreement. Each agreement shall state that the obligation of the authority under the guaranty shall be limited to the funds available in the account as authorized in this subchapter.