(a) Where the sale price is an amount greater than the outstanding secured indebtedness of the district, at least the excess over the amount of the secured indebtedness shall be paid in cash.(b)(1) All deferred payments, if any, shall be secured by a bond for one and one-half (11/2) times the total amount of the deferred payments. This bond shall be for the maintenance of the plant or system during the time of any outstanding secured indebtedness and for the prompt payment of any interest or principal on any secured indebtedness as and when the interest or principal shall fall due.(2) The bond shall be further conditioned that the purchaser will maintain insurance upon the plant for an amount to be agreed upon, with a 'loss payable' clause for the benefit of the town or city making the sale as its interest may appear.(3) The bond shall be approved by the town or city council.(4) The bond provided for in this section and § 14-199-301 shall be made by a corporate surety company authorized to do business in the State of Arkansas.Acts 1923, No. 322, § 3; Pope's Dig., § 7392; A.S.A. 1947, § 19-3908.
Arkansas Legal Code