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(b) (i) In the event that Lender receives a Notice of Taxability (as hereinafter defined), the interest rate on this Note shall be increased retroactively effective from and after the Date of Taxability to the Reference Rate plus one-half percent (1/2%) as such rate may change from time to time. Unless contested in accordance with paragraph l(b)(iii) the City shall immediately upon demand pay to the Lender and to each prior holder affected by such Determination of Taxability an amount equal to the amount by which the interest accrued retroactively at such increased rate from the Date of Taxability to the date of payment exceeds the amount of interest actually accrued and paid to the Lender and any such prior holder during said period. (Such obligation of the City shall survive the payment in full of the principal amount of this Note.) (ii) The terms "Determination of Taxability," "Date of Taxability" and "Notice of Taxability" as used herein shall have the meanings ascribed to such terms in Section 4.07 of the Loan Agreement, dated the date hereof (the "Loan Agreement"), between the City and Advance Circuits, Inc. (the "Borrower") . (iii) The Lender shall give notice, as soon as practicable, but in any event before the right to appeal such Notice of Taxability has expired, to the Borrower and the City of its receipt of any Notice of Taxability and permit the Borrower to contest, litigate or appeal the same at its sole expense. In the event any such contest, litigation or appeal is undertaken, the increased interest provided in paragraph l(b) (i) shall, nevertheless, be payable to the Lender and, to the extent applicable, any prior holder shall be held by the Lender in an interest bearing escrow account pending final disposition of such contest, litigation or appeal, provided that the Borrower shall indemnify and hold harmless the Lender and each such prior holder from any and all penalties, interest or other liabilities which they may incur on account of such contest, litigation or appeal. If the final disposition of such contest is such that interest on this Note is determined to be exempt from taxation, Borrower shall be entitled to receive all sums which it deposited in said escrow account (including, but not limited to, all interest earnings thereon), otherwise the Lender shall be entitled to all sums in the escrow account (including, but not limited to, all interest earnings thereon). 2. In any event, the payments hereunder shall be sufficient to pay all principal and interest due, as such principal and interest becomes due, and to pay any premium or service charge, at maturity, upon redemption, or otherwise. Interest shall be computed on the basis of a 360 day year, but charged for the actual number of days elapsed in a 365 day year. 8