O-2010-3233 Certificates of Obligation Series 2010 and General Obligation Refunding Bonds

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CONTINUING DISCLOSURE AGREEMENT La Porte Area Water Authority Contract Revenue Refunding Bonds Series 2010 THIS CONTINUING DISCLOSURE AGREEMENT (this "Disclosure Agreement"), dated as of May 13, 2010 (this "Disclosure Agreement"), is executed and delivered by the City of La Porte, Texas (the "City"), and the La Porte Area Water Authority (the "Authority") in connection with the issuance by the Authority of its Contract Revenue Refunding Bonds, Series 2010. The City, the Dissemination Agent and the Trustee covenant and agree as follows: Section 1. Purpose of the Disclosure Agreement. This Disclosure Agreement is being executed and delivered by the City and the Authority for the benefit of the Holders and Beneficial Owners of the Bonds and in order to assist the Participating Underwriters in complying with, and constitutes the written undertaking of the City for the benefit of the Bondholders required by, Section (b)(5)(1) of Securities and Exchange Commission Rule 15c2- 12 under the Securities Exchange Act of 1934, as amended (17 C.F.R. § 240.15c2-12) (the "Rule"). The City, as an "obligated person" within the meaning of the Rule, undertakes to provide the following information as provided in this Disclosure Agreement: (1) Annual Financial Information. Section 2. Definitions. In addition to the definitions set forth in the Trust Indenture, which apply to any capitalized term used in this Disclosure Agreement unless otherwise defined in this Section, the following capitalized terms shall have the following meanings: "Annual Financial Information " means, in the case of the City, the financial information or operating data, provided at least annually, of the type included in Exhibit A hereto, which Annual Financial Infonnation may, but is not required to, be audited. Annual Financial Information shall be prepared in accordance with Generally Accepted Accounting Principals. "Beneficial Owners " means any person who has the power, directly or indirectly, to vote or consent with respect to, or to dispose of ownership of, any Bonds, including persons holding Bonds through nominees or depositories. "Holders " means either the registered owners of the Bonds, or, if the Bonds are registered in the name of The Depository Trust Company or another recognized depository, any applicable participant in its depository system. "Material Event" means any of the following events with respect to the Bonds, if material: (i) Principal and interest payment delinquencies; HOU:3004208.1