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• installments shall not extend beyond November 1, 2001, on which date all principal and interest remaining unpaid shall be paid in full. All interest hereon shall be computed on the basis of the actual number of days elapsed and on the assumptions that each month contains thirty (30) days and each year contains three hundred sixty (360) days. All payments shall be applied first to interest on the unpaid principal balance and the remainder to reduction of principal. As used herein, the term "Completion Date" shall mean the first day of November, 1979 . In the event that interest payable pursuant to this Note becomes subject to federal or state income taxation pursuant to a Determination of Taxability, as defined in Section 1. 01 of that certain Loan Agreement (the "Loan Agreement") of even date herewith between the City and John Plaisted, an individual residing in Elk River, Minnesota ("Plaisted") , the rate of interest hereon shall be automatically increased to eleven percent (11%) per annum effective as of the Date of Taxability. Further, in the event of a Determination of Taxability the City shall, within ninety (90) days thereafter, pay to the Holder the difference between ( i) the amounts actually paid hereunder between the Date of Taxability and the effective date of such rate increase and (ii) the amounts which would have been paid to such Holder during such period if the increased rate had been in effect. Prior to the expiration of the first ten (10) loan years, no principal payments other than the required monthly installment payments above provided for may be made. Beginning with the eleventh (11th) loan year, additional principal payments may be made provided that such additional principal payments shall be subject to a prepayment premium equal to five percent (5%) of such amount prepaid, which premium shall decrease one percent (1%) during every loan year thereafter to a minimum of par during the sixteenth (16th) loan year and every loan year thereafter. As used herein the term "loan year" shall mean a year consisting of twelve (12) calendar months, the first day of such first loan year being the date on which the City is obligated to make its first required installment payment of principal and interest as set forth in paragraph (b) above. Any prepayments shall be made on at lease thirty (30) days' advance written notice to the Holder, shall be made on a regu- larly scheduled installment payment date and shall not suspend or reduce required installment payments. 411