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"Regulations" means the temporary or final Income Tax Regulations applicable to <br />the Series 2014 Bonds issued pursuant to sections 141 through 150 of the Code. Any <br />reference to a section of the Regulations shall also refer to any successor provision to <br />such section hereafter promulgated by the Internal Revenue Service pursuant to <br />sections 141 through 150 of the Code and applicable to the Bonds. <br />"Yield of <br />(1) any Investment shall be computed in accordance with <br />section 1.148-5 of the Regulations, and <br />(2) the Bonds shall be computed in accordance with section 1.148-4 of <br />the Regulations. <br />(b) Not to Cause Interest to Become Taxable. The City shall not use, permit <br />the use of or omit to use Gross Proceeds or any other amounts (or any property the <br />acquisition, construction or improvement of which is to be financed directly or indirectly <br />with Gross Proceeds) in a manner which, if made or omitted, respectively, would cause <br />the interest on any Bonds to become includable in the gross income, as defined in <br />section 61 of the Code, of the owner thereof for federal income tax purposes. Without <br />limiting the generality of the foregoing, unless and until the City shall have received a <br />written opinion of counsel nationally recognized in the field of municipal bond law to the <br />effect that failure to comply with such covenant will not adversely affect the exemption <br />from federal income tax of the interest on any Bond, the City shall comply with each of <br />the specific covenants in this Section. <br />(c) No Private Use or Private Payments. Except as permitted by section 141 <br />of the Code and the regulations and rulings thereunder, the City shall, at all times prior to <br />the last stated maturity of the Bonds, <br />(1) exclusively own, operate, and possess all property the acquisition, <br />construction, or improvement of which is to be financed or refinanced directly or <br />indirectly with Gross Proceeds of the Bonds (including property financed or <br />refinanced with Gross Proceeds of the Refunded Bonds) and not use or permit the <br />use of such Gross Proceeds or any property acquired, constructed, or improved <br />with such Gross Proceeds in any activity carried on by any person or entity other <br />than a state or local government, unless such use is solely as a member of the <br />general public, or <br />(2) not directly or indirectly impose or accept any charge or other <br />payment for use of Gross Proceeds of the Bonds or any property the acquisition, <br />construction or improvement of which is to be financed or refinanced directly or <br />indirectly with such Gross Proceeds (including property financed or refinanced <br />with Gross Proceeds of the Refunded Bonds) other than taxes of general <br />application and interest earned on investments acquired with such Gross Proceeds <br />pending application for their intended purposes. <br />15 <br />HOU:3189356.1 <br />