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42 <br /> and interest on this Bond will be due and payable on February 1, 20 Principal <br /> and interest are payable in lawful money of the United States of America. <br /> Upon any "Determination of Taxability" or "Event of Taxability," as defined <br /> below, (a) the principal of the this Bond will remain payable on dates and in <br /> amounts as provided in Schedule I, but (b) the unpaid principal of this Bond will, <br /> from and after the "Date of Taxability," as defined below, bear interest at the rate <br /> that will provide to each affected Bondholder the effective yield which it would have <br /> received if there had not been a Determination of Taxability or an Event of <br /> Taxability (the "Alternative Rate of Interest"), payable from and after the Date of <br /> Taxability. <br /> The County shall also pay to each affected Bondholder, upon the Bondholder's <br /> demand, (i) the difference between interest paid and interest that would have been <br /> due at the Alternative Rate of Interest for all Payment Dates from the Date of <br /> Taxability to the demand date, and (ii) all amounts which may be necessary to <br /> reimburse the Bondholder for any interest, penalties or other charges assessed by <br /> the United States Internal Revenue Service or the North Carolina Department of <br /> Revenue against the Bondholder by reason of the Bondholder's failure to include the <br /> interest paid by the County on the this Bond in its gross income for income tax <br /> purposes. The County shall pay to each affected Bondholder interest calculated at <br /> the Alternative Rate of Interest notwithstanding any transfer by the Bondholder or <br /> payment or prepayment by the County prior to the Determination of Taxability. <br /> As appropriate, each affected Bondholder shall promptly prepare a substitute <br /> Schedule I reflecting the Alternative Rate of Interest, as calculated by the <br /> Bondholder, and the resulting payment schedule, and deliver a copy of the new <br /> schedule to the County, the Trustee and to the North Carolina Local Government <br /> Commission (the "LGC"). The Trustee has no responsibility to calculate any such <br /> additional interest, penalties or charges, or to confirm that any have been paid, with <br /> those matters lying only between the County and the affected Bondholders. <br /> "Determination of Taxability" means a determination that interest on this Bond <br /> paid by the County is included in gross income of a Bondholder for federal income tax <br /> purposes, which determination shall be deemed to have been made upon the first to <br /> occur of the following: (a) the date on which the Bondholder is advised in writing by <br /> the Commissioner or any District Director of the Internal Revenue Service that, as a <br /> 24 <br />