2006 S Finance - Equipment Installment Financing Agreement

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replacement fund has or will be created or established, nor does Purchaser expect to create or establish such a fund. Purchaser will pay Installment Payments directly to Lender on the due dates thereof. 11. The Purchase Agreement has a weighted average maturity of 2.695 years. As of the Closing Date, Purchaser expects that the term of the Purchase Agreement is not longer than reasonably necessary for the governmental purpose of the Purchase Agreement. As of the Closing Date, Purchaser does not expect to have available amounts (within the meaning of Section 1.148-1(c)(4) of the Regulations) during the period in which the Purchase Agreement is in effect. 12. ,Purchaser .acknowledges its. rebate obligations under Section. 148 of the Code. Purchaser will maintain such records as to the investments and earnings on the Equipment Proceeds as may be necessary and appropriate to determine the amount, if any, that it is required to rebate to the U.S. Treasury because the earnings on such investments exceed the amount that would have been earned if such proceeds had been invested at the yield payable as the interest portion of the Installment Payments on the Purchase Agreement. In the event that Purchaser invests any of the Equipment Proceeds or any investment proceeds in investments that have a yield in excess of the yield on the Purchase Agreement, Purchaser agrees to retain a rebate advisor to assist Purchaser in complying with Section 148 of the Code. Purchaser will make the calculations of its liability, file such reports and make any required payments at the time or times as are now or may hereafter be prescribed under Section 148 (or a successor provision) of the Code. 13. Except as expressly permitted hereunder, Purchaser will not use any gross proceeds of the Purchase Agreement to acquire investments with a yield considered as a class higher than the yield payable as the interest portion of the Installment Payments on the Purchase Agreement or to replace funds which are used to directly or indirectly acquire investments with a yield higher than the yield payable as the interest portion of the Installment Payments on the Purchase Agreement. 14. The Purchase Agreement is not and will not be part of a transaction or series of transactions that attempts to circumvent the provisions of Section 148 of the Code or the Regulations (a) enabling Purchaser to exploit the difference between tax-exempt and taxable interest rates to gain a material financial advantage; or (b) overburdening the market for tax- exempt obligations. Miscellaneous 15. At least 85% of the net Equipment Proceeds of the Purchase Agreement will be allocated to expenditures relating to the Equipment no later than three years from the date hereof and therefore not more than 50% of the proceeds of the Purchase Agreement will be invested in nonpurpose investments (as defined in Section 148(f)(6)(A) of the Code) having a substantially guaranteed yield for four years or more. 16. Purchaser has not received notice of deficiency or other notice from the Internal Revenue Service, the Department of Treasury or any other governmental agency or department #765698v2 (BAPCGN Carolina Installment Purch Agent) A-12