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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 (h) 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 grass 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 /> consequence of an action, or failure to act, by the County, the interest is included in the <br /> Bondholder' s gross income for federal income tax purposes ; (b ) the date on which the <br /> County receives notice from a Bondholder that the Bondholder has been advised (i) in <br /> writing by the Internal Revenue Service that the Service has issued a statutory notice <br /> of deficiency or similar notice to the Bondholder which asserts, in effect, that interest <br /> 26 <br />