Res 2023-208R approving a Resolution by the Board of Directors of the Alliance Regional Water Authority authorizing the issuance of Alliance Regional Water Authority bond anticipation note (Regional Water Supply Contract Project), Series 2023

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the Authority for the payment and security thereof, all as hereinafter provided; and it is hereby resolved that the Note, and the interest thereon, shall constitute a lien on and pledge of the Future Bond Proceeds (when, as and if issued) and be valid and binding without any physical delivery thereof or further act by the Authority. The Authority shall deposit the Future Bond Proceeds (when, as and if issued), as collected and received, into a Debt Service Fund (hereinafter defined) or such other appropriate fund or account as authorized by law, to be utilized pursuant to Section 9 hereof to pay the Note. Notwithstanding anything contained herein to the contrary, only the Future Bond Proceeds (when, as and if issued) and no other funds of the Authority shall be encumbered, pledged, committed or used for the payment and security of the Note. Further (and for the avoidance of doubt), the Authority shall never be obligated to pay the principal of or interest on the Note from Bond Payments, and the Registered Owner shall never have the right to demand payment for the Note out of any funds raised or to be raised from taxation by the Sponsors or the Authority. (b)Perfection of Pledge. Chapter 1208, as amended, Texas Government Code, applies to the issuance of the Note and the lien on and pledge of Future Bond Proceeds granted by the Authority under subsection (a) of this Section, and such pledge is therefore valid, effective, and perfected. If State law is amended at any time while the Note is outstanding and unpaid such that the pledge of the Future Bond Proceeds granted by the Authority is to be subject to the filing requirements of Chapter 9, Texas Business & Commerce Code, then in order to preserve to the Registered Owners of the Note the perfection of the security interest in this pledge, the Board agrees to take such measures as it determines are reasonable and necessary under State law to comply with the applicable provisions of Chapter 9, as amended, Texas Business & Commerce Code and enable a filing to perfect the security interest in this pledge to occur. Section 8. DEBT SERVICE FUND AND PROJECT FUND. (a) Debt Service Fund. For purposes of providing funds to pay the principal of and interest on the Note as the same become due and payable, the Authority shall maintain, at a Depository, a separate and special fund or account to be created and known as the "Alliance Regional Water Authority Bond Anticipation Note (Regional Water Supply Contract Project) Debt Service Fund" (the "Debt Service Fund"). The Authority shall deposit into the Debt Service Fund (or such other appropriate fund or account as authorized by law) prior to each principal and interest payment date, solely from and to the extent of the available Future Bond Proceeds (when, as and if issued), an amount equal to one hundred per cent (100%) of the amount required to fully pay the interest on and the principal of the Note then falling due and payable. Any accrued interest received from the Purchaser of the Note shall be deposited into a subaccount of the Debt Service Fund. In addition, any surplus proceeds from the sale of the Note, including investment income therefrom, not expended for authorized purposes shall be deposited into the Debt Service Fund, and such amounts (i.e., accrued and investment interest) so deposited shall reduce the sum otherwise required to be deposited in the Debt Service Fund from Future Bond Proceeds. (b) Project Fund. The Authority hereby creates and establishes and shall maintain on the books and records of the Authority a separate fund or account to be entitled the "Alliance Regional Water Authority Bond Anticipation Note (Regional Water Supply Contract Project), Project Fund" for use by the Authority for payment of the Sponsors' respective shares of the ARWA\BAN\2023:Authorizing Resolution 8