2. Street Improvement District #2007-1

Section 7. Construction Fund. 7.01. The Issuer shall establish a Construction Fund which shall be established and maintained as a separate fund and used only to payor reimburse costs and expenses which under accepted accounting practices constitute capital costs necessarily incurred to construct the Improvements, including but not limited to land, easements, buildings, structures, machinery and equipment and the cost of all architectural, engineering, legal and other professional services, printing and publication and other costs reasonable, necessary and incidental thereto. To this fund shall be credited all proceeds of the Bonds, except accrued interest which will be deposited into the Bond Fund. Only costs and expenses of the Improvements shall be paid from time to time as incurred from the Construction Fund, and the monies in the Construction fund should be used for no other purposes. If upon the completion of the Improvements there shall remain any unexpended balance in the Construction Fund, such balance shall be transferred to the Bond Fund. Section 8. Bond Fund. 8.01. There shall be and is hereby established a special fund to be maintained by the County Auditor separate and apart from all other funds of the Issuer, to be designated as the Refunding Improvement Bonds of 2007 Bond Fund (the "Bond Fund"). To the Bond Fund shall be credited each improvement warrant issued by this resolution when received by the County Auditor, which warrant (s) shall thereupon become and shall thereafter be held as an asset of the Bond Fund, and the proceeds of all assessments for each improvement warrant so acquired shall be held by the Issuer in trust for the use and benefit of the holders from time to time of the Bonds herein authorized. The assessments levied for each warrant shall be continued and payments shall be made therefrom on each improvement warrant drawn thereon in the same manner as though each improvement warrant had not been exchanged. All payments of principal and interest made on each improvement warrant shall be credited to the Bond Fund and shall be used and applied in payment of the principal of and interest on the Bonds as such principal and interest become due. 8.02. In the event the moneys in the Bond Fund should at any time be insufficient to meet all payments of principal and interest then due on the Bonds, said moneys shall be first used to pay the interest accrued on all outstanding Bonds issued pursuant to this resolution, and the balance shall be applied in payment of the principal of said Bonds in order of their maturity dates, earliest Bonds first, Bonds bearing the same maturity dates being paid pro rata. The Issuer reserves the right and privilege of refunding any of such matured Bonds for the payment of which moneys are not at the -4-