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14. Delivery; Application of Proceeds. The Bonds when so prepared and executed shall be delivered by the City to the Purchaser upon receipt of the purchase price, and the Purchaser shall not be obliged to see to the proper application thereof. 15. Fund and Accounts. For the convenience and proper administration of the moneys to be borrowed and repaid on the Bonds, there is hereby created a special fund to be designated the General Obligation Water Revenue Bonds, Series 2003B, Fund" (the "Fund") to be administered and maintained by the City as a bookkeeping account separate and apart from all other funds maintained in the official financial records of the City. The Fund shall be maintained in the manner herein specified until all of the Refunded Bonds and the Bonds herein authorized and the interest thereon shall have been fully paid. There shall be maintained in the Fund three separate accounts, to be designated the "Refunding Account," the "Capital Account" and the "Debt Service Account," respectively. (i) Refunding Account. The proceeds of the sale of the Refunding Bonds, less such proceeds of the Refunding Bonds as may be used to pay allocated issuance expenses or hereinafter directed for deposit into the Debt Service Account, plus any other available municipal funds ("Other Funds"), if any, as may be required to adequately fund the Refunding Account to accomplish its purposes, together with all investment earnings on funds held in the Refunding Account, are hereby pledged and appropriated and shall be credited to the Refunding Account. The Refunding Account may be invested only in securities maturing or callable on such dates and beating interest at such rates as shall be required to provide funds sufficient, together with any cash or other funds retained in the Refunding Account, and together with monies made available from the debt service account for the Prior Bonds, to pay all principal and interest due on the Prior Bonds on the Refunding Date (as described in paragraph 3 of this Resolution), whether due thereon by virtue of regularly scheduled debt service or prior redemption. The moneys in the Refunding Account shall be used solely for the purposes herein set forth and for no other purpose, except that any surplus in the Refunding Account shall be remitted to the City. Such Other Funds, if any, as may be required to fully fund the Refunding Account as described above are hereby appropriated for said purpose. (ii) Capital Account. To the Capital Account there shall be credited the proceeds of the sale of the Nonrefunding Bonds, less such amounts thereof as shall be used to pay their allocated issuance expenses or deposited into the Debt Service Account pursuant to paragraph 16(iii) below. From the Capital Account there shall be paid all costs and expenses of making the Improvements, including the cost of any construction contracts heretofore let, the costs of issuing the Nonrefunding Bonds and all other costs incurred and to be incurred of the kind authorized in Minnesota Statutes, Section 475.65; and the moneys in said account shall be used for no other purpose except as otherwise provided by law. (iii) Debt Service Account. To the Debt Service Account there are hereby pledged and irrevocably appropriated and there shall be credited: (1) all -accrued interest on the Bonds, which shall be used to pay the interest first coming 1580841vl 18