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4. In any event, the payments hereunder shall be sufficient to pay all principal and <br />interest due, as such principal and interest becomes due, and to pay any premium or service <br />charge, at maturity, upon redemption, or otherwise. <br />5. If any installment of principal or interest on this Note is not paid within ten (10) <br />days of the due date thereof, the City shall pay to the Lender a late charge equal to five percent <br />(5 %) of the amount of such installment. <br />6. a. Optional Redemption without Prepayment Penalty. This Note is subject to <br />optional redemption in whole or in part by the City at the direction of the Borrower, on <br />any date at a redemption price equal to the outstanding Principal Balance hereof plus <br />accrued interest thereon without premium, unless the source of such funds for such <br />prepayment is proceeds of borrowing with a financial institution other than the Lender. <br />b. Optional Redemption with Prepayment Penalty. If the source of funds for <br />the prepayment of the Note are the proceeds of borrowing with a financial institution <br />other than the Lender, the City, at the direction of the Borrower, may at its option redeem <br />this Note, in whole but not in part, at par plus accrued interest, plus a prepayment penalty <br />of 5% of the then outstanding Principal Balance if the prepayment occurs on or prior to <br />December 20, 2008; of 4% of the then outstanding Principal Balance if the prepayment <br />occurs after December 20, 2008 but on or prior to December 20, 2009; of 3% of the then <br />outstanding Principal Balance if the prepayment occurs after December 20, 2009 but on <br />or prior to the December 20, 2010; of 2% of the then outstanding Principal Balance if the <br />prepayment occurs after December 20, 2010 but on or prior to December 20, 2011; of 1% <br />of the then outstanding Principal Balance if the prepayment occurs after December 20, <br />2011 but on or prior to December 20, 2012; and of 0% of the then outstanding Principal <br />Balance if the prepayment occurs after December 20, 2012. <br />c. Partial Prepayment Application and Adjustments. Any partial prepayment <br />shall be applied first against the interest accrued on the Note, and then the outstanding <br />principal balance on the Note. Required monthly payments will not be reduced as a <br />result of a partial prepayment unless the Borrower satisfies the conditions set forth in <br />Section 3 hereof. <br />d. Notice of Prepayment. Notice of any such redemption shall be given by <br />the Borrower to the Lender by first -class mail, addressed to the Lender at its registered <br />address, not less than thirty (30) days prior to the date fixed for prepayment. At the date <br />fixed for prepayment, funds shall be paid to the Lender at its registered address. <br />7. Upon a Determination of Taxability (as defined in the Loan Agreement), the <br />annual interest rate on this Note shall be one hundred percent (100 %) of the sum of that rate of <br />interest published from time to time as the Prime Rate in effect on the Date of Taxability as <br />defined in the Loan Agreement, minus one percent (1.00 %), from and after the Date of <br />Taxability. Any accrued and unpaid interest as a result of such Determination of Taxability shall <br />be paid to the Lender within thirty (30) days of the Determination of Taxability. <br />2110588v4 3 <br />- 1 1 - <br />