OTHER-2025-035-Orange County North Carolina limited obligation bonds series 2025

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determining the annual adjusted financial statement income of applicable corporations (as defined in Section 59(k) of the "Code, " as defined below) for the purpose of computing the alternative minimum tax imposed on corporations for tax years that begin after December 31 , 2022 . 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 2025 Bonds and the timely payment to the United States of any arbitrage profit with respect to the 2025 Bonds . The County ' s failure to comply with such covenants could cause interest on the 2025 Bonds to be included in gross income for federal income tax purposes retroactively to the date of issuance of the 2025 Bonds . In addition to the matters addressed above , prospective purchasers of the 2025 Bonds should be aware that the ownership of tax-exempt obligations may result in collateral federal income tax consequences to certain taxpayers , including without limitation financial institutions , property and casualty insurance companies, certain S corporations , certain foreign corporations subject to the branch profits tax, corporations subject to the environmental tax, recipients of Social Security or Railroad Retirement benefits and taxpayers who may be deemed to have incurred or continued indebtedness to purchase or carry tax- exempt obligations . Prospective purchasers of the 2025 Bonds should consult their tax advisors as to the applicability and impact of such consequences . Other Matters . Bond Counsel will give its opinions in reliance upon certifications by County representatives and others as to certain facts relevant to the opinion . Bond Counsel ' s opinions do not address the tax-exempt status of payments on the 2025 Bonds derived from parties other than the County , even if those payments are denominated as interest with respect to the 2025 Bonds . Bond Counsel will express no other opinion regarding the federal or North Carolina tax consequences of the ownership of or the receipt or accrual of interest on the 2025 Bonds . Interest on the 2025 Bonds may or may not be subject to state or local taxation in jurisdictions other 1 than North Carolina . Prospective purchasers of the 2025 Bonds should consult their own tax advisors as to the status of interest on the 2025 Bonds under the tax laws of any such jurisdiction other than North Carolina . ORIGINAL ISSUE PREMIUM The 2025 Bonds maturing on October 1 , (collectively, the " Premium Bonds") are being sold at an initial offering price in excess of the principal amounts payable at maturity . Under the Code, the difference between (a) the initial offering prices to the public (excluding bond houses and brokers) at which a substantial amount of each maturity of the Premium Bonds is sold and (b) the principal amount payable i at maturity of such Premium Bonds constitutes "original issue premium " . Original issue premium is not deductible for federal income tax purposes . For an owner of a Premium Bond, the amount of the original issue premium which is treated as having accrued over the term of such Premium Bond is reduced from the owner ' s cost basis of such Premium Bond in determining, for federal income tax purposes, the gain or loss upon the sale, redemption or other disposition of such Premium Bond (whether upon its sale, redemption or payment at maturity) . t Bond Counsel ' s opinion will not specifically address any issues relating to the treatment of premiums paid on Premium Bonds . Owners of Premium Bonds should consult their tax advisors with respect to the tax consequences of owning or disposing of a Premium Bond , 3 I 18