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ARTICLE V APPLICATION OF CASH BALANCES Section 5.01. In General. Except as provided in Sections 5.02 and 5.03 hereof, neither the Issuer nor the Escrow Agent shall reinvest any moneys deposited to or held as part of the Escrow Fund. Section 5.02. Reinvestment in SLGS. Cash balances in the Escrow Fund shall be reinvested in United States Treasury Obligations-State and Local Government Series ('SLGS") with a 0% interest rate on the dates, in the amounts and with the maturity dates as set forth on Exhibit E attached hereto and incorporated herein by reference. In the event such cash balances cannot be reinvested in accordance with the foregoing because the United States Department of the Treasury has suspended sales of SLGS, the Escrow Agent shall immediately notify the Issuer, the Issuer shall provide to the Escrow Agent written instructions for reinvestment of such cash balances and the Escrow Agent shall reinvest such cash balances in accordance with such instructions; provided that: (a) such reinvestments shall be made in accordance with the applicable provisions of the Internal Revenue Code of 1986, as amended, and the regulations and procedures promulgated thereunder, or otherwise then applicable laws and regulations, and (b) such funds shall be invested in Federal Securities which mature, in amounts at least equal to their purchase price, on or before the respective dates needed for payment of the Refunded Bonds. Section 5.03. Reinvestment of Cash Balances. At the written request of the Issuer, and upon compliance with the conditions hereinafter stated, the Escrow Agent shall permit or cause the reinvestment of cash balances in the Escrow Fund, pending the use thereof to pay when due the principal of and interest on the Refunded Bonds, in Federal Securities which obligations must mature, in amounts at least equal to their purchase price, on or before the respective dates needed for payment of the Refunded Bonds. Any such modification must include (i) an opinion of nationally recognized bond counsel that such transaction does not adversely affect the tax-exempt nature of the Bonds or the Refunded Bonds and complies with the Constitution and laws of the State of Texas and (ii) a verification report by an independent firm of certified public accountants verifying the sufficiency of the Escrow Fund and the yield on the investment thereof. ARTICLE VI RECORDS AND REPORTS Section 6.01. Records. The Escrow Agent will keep books of record and account in which complete and correct entries shall be made of all transactions relating to the receipts, disbursements, allocations and application of the money and Federal Securities deposited to the Escrow Fund and all proceeds thereof, and such books shall be available for inspection at reasonable hours and under reasonable conditions by the Issuer and the owners of the Refunded Bonds. Section 6.02. Reports. While this Agreement remains in effect, the Escrow Agent at least annually shall prepare and send to the Issuer a written report summarizing all transactions relating to the Escrow Fund during the preceding year, including, without limitation, credits to the Escrow Fund as a result of interest payments on or maturities of the Federal Securities and transfers from the Escrow Fund for payments on the Refunded Bonds or otherwise, together with a detailed statement of all Federal Securities and the cash balance on deposit in the Escrow Fund as of the end of such period. RISANMARlGORl99\DOCSIESCROW. WPD 6