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25 <br /> 3 . 6 Installment Payment Adjustment. The County acknowledges <br /> that the Lender is providing the Financing Proceeds at the rate set <br /> forth herein based on the premise that interest received under this <br /> Contract is exempt from taxation to the Lender and based on other <br /> state and federal laws in effect as of the date hereof. If, as a <br /> result of any action or failure to take any action by the County, <br /> the income received by the Lender shall be deemed to be taxable <br /> income to the Lender by any governmental agency (herein an "Event <br /> of Taxability") , then Lender shall have the option to either (i) <br /> declare the principal component of the remaining Installment <br /> Payments immediately due and payable or (ii) adjust the amount of <br /> the remaining Installment Payments to provide for the payment of <br /> interest by the County at a taxable rate which will preserve the <br /> Lender' s after-tax economic yield. In such event, the County <br /> agrees, to the extent permitted by law, to indemnify and hold <br /> harmless the Lender from any cost and expense incurred as a result <br /> of the loss of the tax-exempt status of the obligation created by <br /> this Contract, specifically including, without limitation, all <br /> administrative expenses arising in connection with the amendment of <br /> the Lender' s tax returns. The Lender' s after-tax yield prior to <br /> and after an Event of Taxability shall be as reasonably calculated <br /> by the firm of certified public accountants regularly employed by <br /> the Lender, and such calculations, in the absence of manifest <br /> error, shall be binding on the parties hereto. <br /> SECTION 4 . ESCROW FUND <br /> 4 .1 Creation of Escrow Fund. Following execution of this <br /> Contract , the principal amount of the Financing Proceeds will be <br /> deposited by the Lender with the Escrow Depository and this sum <br /> shall constitute the principal of the Escrow Fund and shall be held <br /> by the Escrow Depository in a separate fund designated as the <br /> "Escrow Fund" and applied in accordance with the provisions of this <br /> Section 4. <br /> 4.2 Investment. The Escrow Depository shall invest and <br /> reinvest the Escrow Fund in accordance with written instructions <br /> received from the County. The County shall be solely responsible <br /> for ascertaining that all proposed investments and reinvestments <br /> comply with federal, state and local laws, regulations and <br /> ordinances governing investment of escrowed funds held pursuant to <br /> a loan agreement similar in substance to the arrangement <br /> contemplated by this Contract and for providing appropriate notice <br /> to the Escrow Depository for the reinvestment of any maturing <br /> investment. Accordingly, the Escrow Depository shall not be <br /> responsible for any liability, cost, expense, loss or claim of any <br /> kind, directly or indirectly arising out of or related to <br /> investment or reinvestment of all or a portion of the Escrow Fund, <br /> and the County agrees, to the extent permitted by law, to release <br /> and indemnify and hold harmless the Escrow Depository from any such <br /> liability, cost, expense, loss or claim. <br /> 4 <br />