2. Street Improvement District #2007-1

improvement to the Issuer, except any portion, not exceeding one-fifth of the cost of the improvement and not exceeding any applicable constitutional or statutory debt limit, as the Issuer may determine to pay by the levy of ad valorem taxes upon all taxable property within its corporate limits. In the event that the assessment should at any time be held invalid with respect to any lot or tract of land, due to any error, defect or irregularity in any action or proceeding taken or to be taken by the Issuer or by the governing body or by any officers or employees, either in the making of the assessment or in the performance of any condition precedent. thereto, the Issuer covenants and agrees that it will forthwith do all such further acts and take all such further proceedings as may be required by law to make such assessment a valid and binding lien upon such lot or tract. The installments of special assessments from time to time remaining unpaid shall bear interest at the rate of % per annum and the special assessments shall be levied in equal annual installments of principal as set out in Section 3. Section 3. The Warrants. 3.01. Each warrant shall bear interest from the date of issue until paid at the rate of % per annum, payable semi-annually on each May 1 and November 1, commencing May 1, 2008. Each warrant shall be exchanged for the Bonds at closing. The principal of and interest on each warrant shall be payable at the office of the County Auditor. Each warrant shall be in the principal amounts set forth below, and shall be payable on May 1 in the respective years and amounts as follows: District Desianation Principal Amount Years Levied Amounts and Years of Payment Street Improvement District No. 2007-1 $365,000 2008-2022 $24,333.33 in each of the years 2009 through 2023 3.02. Each and photocopied Attachment 3. improvement warrant in substantially the shall be form attached typewritten hereto as Section 4. Terms of Bonds. 4,01. The Bonds shall initially be dated October 1, 2007. Bonds issued upon exchange or transfer after May 1, 2008, shall be dated as of the interest payment date next preceding their issuance, or if the date of such issuance shall be on an interest payment date as of the date of such issue; provided, however, that if interest on the Bonds shall be in default, the Bonds shall be dated as of the date to which interest has been paid in full on the Bonds being transferred. The Bonds shall be issued in fully registered form in -2-