Agenda 10-01-19 Item 6-a - Adoption of the Final Financing Resolution Authorizing the Issuance of $37,000,000 in Installment Purchase Financing for Various CIP Projects Including Refinancing County Debt

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75 on the Mortgaged Property), even if those payments are denominated as interest with respect to the 2019B Bonds. Bond Counsel will give its opinion in reliance upon certifications by County representatives and others as to certain facts relevant to the opinion. The County has covenanted to comply with the provisions of the Internal Revenue Code of 1986, as amended (the "Code"), regarding, among other matters, the use, expenditure and investment of the proceeds derived from the sale of the 2019B Bonds and the timely payment to the United States of any arbitrage profit with respect to the 2019B Bonds. The County's failure to comply with its covenants could cause interest on the 2019B Bonds to be included in gross income for federal income tax purposes retroactively to the date of issuance of the 2019B Bonds. DISCOUNT BONDS The initial public offering prices of the 2019B Bonds maturing on October 1, 20 through October 1, 20_, inclusive (collectively, the "Discount Bonds"), are less than the amounts payable at maturity. An amount not less than the difference between the initial offering prices to the public (excluding bond houses,brokers or similar persons or organizations acting in the capacity of underwriters, placement agents,wholesalers or other intermediaries) of the Discount Bonds and the amounts payable at maturity constitutes original issue discount. Under existing federal income tax law and regulations, the original issue discount on a Discount Bond is interest not includable in the gross income of an owner who purchases such Discount Bond in the original offering at the initial public offering price thereof and holds it to maturity, and such owner will not realize taxable gain upon payment of such Discount Bond at maturity. Owners who purchase Discount Bonds at a price other than the initial offering price or who do not purchase Discount Bonds in the initial public offering should consult their tax advisors with respect to the consequences of the ownership of such Discount Bonds. An owner who purchases a Discount Bond in the initial offering at the initial offering price and holds such Discount Bond to maturity is deemed under existing federal tax laws and regulations to accrue original issue discount on a constant yield basis under Section 1288 of the Code from the date of original issue. An owner's adjusted basis in a Discount Bond is increased by accrued original issue discount for purposes of determining gain or loss on sale, exchange or other disposition of such Discount Bond. Accrued original issue discount may be taken into account as an increase in the amount of tax-exempt interest received or deemed to have been received for purposes of determining various other tax consequences of owning a Discount Bond, including in the calculation of adjusted current earnings of corporations for purposes of computing the alternative minimum tax imposed by the Code on corporations, even though there will not be a corresponding cash payment. Bond Counsel's opinion will not address issues relating to the treatment of original issue discounts on Discount Bonds. Owners and prospective purchasers of Discount Bonds should consult their own tax advisors regarding the calculation of accrued original issue discount for federal income tax purposes and any North Carolina or other state and local tax consequences in connection with the ownership or disposition of Discount Bonds. PREMIUM BONDS The initial public offering prices of the 2019B Bonds maturing on October 1, 20_ through October 1, 20_, inclusive (collectively, the "Premium Bonds"), are greater than the amounts payable at maturity. The difference between (a) the initial offering prices to the public (excluding bond houses, brokers or similar persons or organizations acting in the capacity of underwriters, placement agents, wholesalers or other intermediaries) at which a substantial amount of each maturity of the Premium Bonds is sold and (b) the principal amount payable at maturity of such Premium Bonds constitutes original issue premium. In general, an owner of a Premium Bond must amortize the bond premium over 19