Can the refrigerant tubing exit the side of the inside unit and be run down and interior wall?

Yes, there should be a knockout on the side with enough room for the refrigerant tubes, control wire and drain hose to exit. Then the line set can be angled down at a "soft 90 degrees", being careful not to kink the tubes as you make the bends. If you have any further questions please feel free to give us a call! Thanks.