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Series F bonds required to be so deposited by Section Z07 of Article II of this Resolution and all moneys received by the Board from any other source for financing the cost of the Project. The Construction Account shall be set up in a Depositary as provided in Section 210 of Article II of this Resolution. The moneys in the Construction Account shall be held in trust and applied to the paynent of the cost of the Project and, pending such application, shall be subject to a lien and charge in favor of the holders of the bonds issued and outstanding under this Resolution and shall be held for the future security of such holders until paid out and transferred as herein provided.

Section 402. Payment of the cost of the Project shall be made from the Construction Account. All payments from the Construction Account shall be subject to the provisions and restrictions set forth in this Article, and, to the extent required under the Loan Agreement mentioned in Section 209 of Article II hereof, expenditures of moneys in the Construction Account shall be only for such purposes as shall have been previously specified in project cost estimates approved by the Housing and Home Finance Agency. The Board covenants that it will not cause or permit to be paid from the Construction Account any sums except in accordance with the provisions and restrictions set forth in this Article.

Section 403. For the purposes of this Resolution the cost of the Project shall include, without intending thereby to limit or restrict or to extend any proper definition of such cost under any applicable laws, the Loan Agreement or this Resolution, the following:

(a) obligations incurred for labor and materials and to contractors, builders and materialmen in connection with the Project;

(b) interest accruing upon the Series F bonds prior to and during construction of the Project;

(c) the cost of any indemnity and surety bonds to secure deposits in the Construction Account, the fees and expenses of any Depositary or Depositaries of the Construction Account during construction, taxes or other municipal or governmental charges lawfully levied or assessed during construction upon the Project or any property acquired therefor, and premiums on insurance, if any, in connection with the Project during construction;

(d) fees and expenses of engineers and architects for surveys and estimates and other preliminary investigations, preparation of plans, drawings and specifications and supervising construction, as well as for the performance of all other duties of engineers and architects in relation to the construction of the Project or the issuance of the Series F bonds therefor;

(e) expenses of administration properly chargeable to the Project, legal expenses and fees, financing charges, cost of audits and of preparing and issuing the bonds, and all other items of expense not elsewhere in this Section specified incident to the construction of the Project and the placing of the Project in operation; and

(f) any obligation or expense heretofore or hereafter incurred by the Board or by any other agency of the State of North Carolina for any of the foregoing purposes, including the payment of any amounts due the United States of America under the provisions of the Loan Agreement.

Section 404. Payments from the Construction Account shall be made in accordance with the provisions of this Section.

Before payment of any item of cost shall be made by the Board, there