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Section 3.6. Installment Payment Adjustment. (a)The Purchaser acknowledges that the Lender is providing the Purchase Price at the 5
<br /> interest rate set forth in Section 3.1 of this Agreement based on the premise that interest received under this Agreement is excludable from
<br /> gross income of the Lender for Federal and North Carolina income tax purposes. If, as a result of any action or failure to take any action
<br /> by the Purchaser, the Internal Revenue Service, a court of competent jurisdiction or nationally recognized bond counsel (selected by the
<br /> Lender)determines that the interest received under this Agreement by the Lender is includable in the gross income of the Lender for Federal
<br /> or North Carolina income tax purposes(a "Determination of Taxability"), then, at the option of the Lender, either(a) the Purchaser shall
<br /> immediately prepay all remaining Installment Payments together with an amount equal to the difference between(i)the anticipated after-tax
<br /> yield to the Lender under this Agreement had the interest received under this Agreement remained excludable from the gross income of the
<br /> Lender for Federal and North Carolina income tax purposes and(ii)the actual after-tax yield to the Lender under this Agreement following
<br /> such Determination of Taxability,or(b)the remaining Installment Payments shall be adjusted to provide for the payment of interest by the
<br /> Purchaser at a taxable rate which will preserve the Lender's after-tax economic yield. if a Determination of Taxability shall occur, the
<br /> Purchaser agrees, to the extent permitted by law, to indemnify and hold harmless the Lender from any costs and expense incurred as a result
<br /> of the loss of the tax-exempt status of the obligation created by this Agreement, specifically including,without limitation,all administrative
<br /> expenses arising in connection with the amendment of the Lender's tax returns. In addition, if, as a result of any action or failure to take
<br /> any action by the Purchaser, the Lender's after-tax yield with respect to the obligation created by this Agreement is adversely affected, the
<br /> Installment Payments shall be adjusted to produce an after-tax yield to the Lender equivalent to the Lender's after-tax yield prior to such
<br /> action or failure to take any action. (b)If the maximum federal and/or North Carolina marginal corporate income tax rate applicable to the
<br /> taxable income of the Lender decreases after the date of this Agreement, the Installment Payments shall be adjusted to produce an after-tax
<br /> yield to the Lender aluivalent to the Lender's after-tax yield prior to such decrease. (c) For purposes of paragraphs (a) and (b) of this
<br /> Section 3.6, the Lender's after-tax yield shall be as reasonably calculated by the Lender and such calculations, in the absence of manifest
<br /> error, shall be binding on the parties hereto. (d) The Purchaser hereby agrees to enter into any amendments to this Agreement which the
<br /> Lender determines are necessary to adjust the Installment Payments in the event of a breach by the Purchaser of any of the agreements
<br /> contained in this Section.
<br /> ARTICLE IV: ESCROW FUND
<br /> Section 4.1. Creation of Escrow fund. Moneys in an amount equal to the Purchase Price will be deposited by the Lender with the
<br /> Escrow Agent and this sum shall constitute the principal of the Escrow Fund, and shall be held by the Escrow Agent in trust in a separate
<br /> fund designated as the "Escrow Fund" and applied in accordance with the provisions of this Article IV. The Purchaser hereby assigns,
<br /> pledges and grants a security interest in the Escrow Fund in favor of the Lender to secure payment of the Installment Payments described
<br /> in Section 3.1 of this Agreement.
<br /> Section 4.2. Investment. The Escrow Agent shall invest and reinvest the Escrow fund in accordance with instructions received from
<br /> the Purchaser. The Purchaser is solely responsible for ascertaining that all proposed investments and reinvestments comply with federal,
<br /> state and local laws, regulations and ordinances governing investment of escrowed funds held pursuant to a financing arrangement similar
<br /> in substance to the arrangement contemplated by this Agreement and for providing appropriate notice to the Escrow Agent for the
<br /> reinvestment of any maturing investment. Accordingly,the Escrow Agent is not responsible for any liability,cost, expense, loss, damage
<br /> or claim of any kind, directly or indirectly,arising out of or related to investment or reinvestment of all or a portion of the Escrow Fund,
<br /> and the Purchaser agrees to release and indemnify and hold harmless the Escrow Agent and the Lender, and their respective officers,
<br /> directors, employees and agents, from any such liability, cost, expense, loss, damage or claim.
<br /> Section 4.3. Disbursements. (a) Payment by Escrow Agent. Unless the Escrow Fund is earlier terminated in accordance with the
<br /> provisions of Section 4.4 of this Agreement, the principal of the Escrow Fund shall be disbursed by the Escrow Agent to the vendor as
<br /> directed by the Purchaser in payment of the Project Costs on receipt of written authorization(s)from the Lender. The Lender agrees to
<br /> provide such authorization(s)on receipt of a requisition from the Purchaser substantially in the form set forth in Exhibit B attached hereto,
<br /> together with any documents or other items as the Lender may determine to be necessary, including but not limited to, copies of filed
<br /> Uniform Commercial Code financing statements evidencing the Lender's security interest in the Project. If the principal of the Escrow Fund
<br /> is insufficient to pay the Project Costs, the Purchaser shall provide any balance of the funds needed to complete the Acquisition of the
<br /> Project. Any moneys remaining in the Escrow Fund after completion of the Acquisition of the Project or on termination hereof before such
<br /> completion shall be distributed to the Lender to be applied to the outstanding principal balance and modify the Installment Payments due after
<br /> the distribution. (b)Distribution of Interest. Interest earned on the Escrow Fund shall be disbursed by the Escrow Agent on the termination
<br /> or the final distribution of the Escrow Fund in the following order: first,to the payment of the Escrow Agent's fees as set forth in Section
<br /> 4.13 of this Agreement; and second, to the Purchaser.
<br /> Section 4.4. Termination. The Escrow Fund shall be terminated at the earliest of(a) the final distribution of principal of the Escrow
<br /> fund; (b) the Escrow agent receives written notice by the Lender of the occurrence of an event of Default under this Agreement, or (c) the
<br /> termination of this Agreement.
<br /> Section 4.5. Scope of Escrow Agent's Authority. The Escrow Agent shall act as escrow agent for the Escrow Fund under this
<br /> Agreement until the termination of this Agreement in accordance with its terms,shall take such actions as are specifically provided for herein
<br /> and may exercise such additional powers as are reasonably incidental thereto. The Escrow Agent shall not exercise any discretion or make
<br /> any judgments and shall act or refrain from acting only in accordance with instructions and directions of the parties to this Agreement who
<br /> shall have agreed to make such instructions or directions.
<br /> Section 4.6. Limitation of Liability. The Escrow Agent shall not be liable for any act which it may do or omit to do hereunder so
<br /> long as it shall have acted in a manner not inconsistent with the terms of this Agreement. The Escrow Agent shall not be liable in any
<br /> respect on account of the identity,authority or rights of the parties executing or delivering or purporting to execute or deliver this Agreement,
<br /> or any documents or papers the delivery of which is contemplated hereunder. The Escrow Agent is authorized to disregard any and all
<br /> warnings from any person, and may disregard any directions, instructions, notices, communications, or information from any source
<br /> whatsoever, excepting only directives conforming to the terms and provisions of this Agreement. Under no circumstances shall the Escrow
<br /> Agent be liable or responsible for the application of funds after the same have been delivered to the Purchaser, any other person identified
<br /> as a payee in any requisition submitted to the Escrow Agent by the Purchaser, or any other person in accordance with this Agreement.
<br /> Section 4.7. Reliance of Escrow Agent on Documents. The Escrow Agent may act in reliance on any writing or instrument or
<br /> signature which it,in good faith, believes to be genuine and may assume the validity and accuracy of any statement or assertion contained
<br /> in such a writing or instrument. The Escrow Agent is not liable in any manner for the sufficiency or correctness as to form, mariner and
<br /> execution,or validity of any instrument nor as to the identity,authority,or right of any person executing same; and its duties hereunder are
<br /> limited to the receipt of such moneys,instruments or other documents received by it as the Escrow Agent,and for the disposition of the same
<br /> in accordance herewith.
<br /> Section 4.8. Indemnification of Escrow Agent. Unless the Escrow Agent is guilty of gross negligence or willful misconduct with
<br /> regard to its duties hereunder, the Purchaser agrees to indemnify the Escrow Agent, and its officers,directors, employees and agents, and
<br /> to hold them harmless from any and all damages, claims, liabilities,losses, actions, suits or proceedings at law or in equity, or any other
<br /> expenses, fees or charges of any character or nature, which they may incur or with which they may be threatened by reason of actions taken
<br /> in connection with this Agreement; and in connection therewith,to indemnify the Escrow Agent, and its officers, directors. employees and
<br /> agents, against any and all expenses, including reasonable attorneys' fees and expenses and the cost of defending any action, suit or
<br /> proceeding or resisting any claim. The Escrow Agent is vested with a lien on all property deposited hereunder, for indemnification, for
<br /> reasonable attorneys' fees, court costs, for any suit, interpleader or otherwise, or any other expenses, fees or charges of any character or
<br /> nature, which may be incurred by the Escrow Agent by reason of disputes arising between the Purchaser and the Lender as to the correct
<br /> interpretation of this Agreement or any directions or instructions given to the Escrow Agent hereunder, or otherwise, with the right of the
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