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(b) Interest only shall be payable on the Principal Balance on the first day of the calendar month next succeeding the date hereof and on the first day of each succeeding month thereafter through and including December 1, 1985. Commencing January 1, 1986 and on the first day of each calendar month thereafter, the Principal Balance and interest accrued thereon shall be paid in equal monthly installments in the amount necessary to fully amortize the Principal Balance over the period remaining to the Final Maturity Date. The amount of the monthly installments due hereunder shal1 be increased or decreased on each Adjustment Date to reflect any adjustment to the rate of interest borne by this Note pursuant to the terms hereof and by prepayments of principal previously made. All payments shal1 be applied first to accrued interest and thereafter to reduction of the Principal Balance. (c)(i) In the event that the interest on this Note shall become subject to federal income taxation pursuant to a Determination of Taxability (as hereinafter defined), the interest rate on this Note shall be increased, retroactively effective from and after the Date of Taxability (as hereinafter defined) to 4~% per annum above the Tax Exempt Rate then in effect (the "Taxable Rate"), provided, however, that in no event shal1 the Taxable Rate for any period be less than the Tax Exempt Rate otherwise in effect for the same period. The City shall immediately upon demand pay to the Holder 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 Holder and any such prior Holder during said period. Such obligation of the City shal1 survive the payment in full of the principal amount of this Note. Commencing on the payment date next following the Notice of Taxability and continuing on each payment date there- after (unless the Holder shall accelerate the maturity of the Note pursuant to clause (ii) of this paragraph (c)), this Note shall be payable as follows: (A) if amortization of the Principal Balance had not theretofore commenced, the monthly payments of interest only under paragraph (b) shall be increased to reflect the accrual of interest at the Taxable Rate and the monthly installments of principal and interest payable commencing with the January 1, 1986 payment shall be recomputed on the basis of the Taxable Rate in effect 9