03-10-10 Regular Meeting of the La Porte Area Water Authority

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The principal of and, subject to Section 2.3 hereof, interest on the Bonds shall be payable at the principal office of the Paying Agent/Registrar in Dallas, Texas. SECTION 2.2. Redemption. The Bonds are not subject to optional or mandatory redemption prior to Stated Maturity. SECTION 2.3. Payment of Interest; Interest Rights Preserved. Interest on any Bond which is payable on any Interest Payment Date, unless Defaulted Interest, shall be paid to the Person in whose name that Bond is registered at the close of business on the Regular Record Date for such interest. Defaulted Interest shall cease to be payable to the registered Holder on the relevant Regular Record Date by virtue of having been such Holder, but shall be paid to the Person in whose name the Bonds are registered at the close of business on a Special Record Date for the payment of such Defaulted Interest, which shall be fixed in the following manner. The Authority shall notify the Paying Agent/Registrar in writing of the amount of Defaulted Interest proposed to be paid on each Bond and the date of the proposed payment and shall simultaneously deposit with the Paying Agent/Registrar an amount of money equal to the aggregate amount proposed to be paid in respect of such Defaulted Interest or shall make arrangements satisfactory to the Paying Agent/Registrar for such deposit prior to the date of the proposed payment, such money when deposited to be held in trust for the benefit of the Persons entitled to such Defaulted Interest as in this Section provided. Thereupon the Paying Agent/Registrar shall fix a Special Record Date for the payment of such Defaulted Interest which shall be not more than 15 nor less than 10 days prior to the date of the proposed payment and not less than 10 days after the receipt by the Paying Agent/Registrar of the notice of the proposed payment. The Paying Agent/Registrar shall promptly notify the Authority of such Special Record Date and, in the name and at the expense of the Authority, shall cause notice of the proposed payment of such Defaulted Interest and the Special Record Date therefor to be mailed to each Bondholder not less than 10 days prior to such Special Record Date. Notice of the proposed payment of such Defaulted Interest and the Special Record Date therefor having been mailed as aforesaid, such Defaulted Interest shall be paid to the Persons in whose names the Bonds are registered on such Special Record Date. All payments of interest on the Bonds shall be paid by check or draft mailed by the Paying Agent/Registrar to the Person entitled to such payment, first-class postage prepaid, at the address of such Person as it appears in the Bond Register, or by such other customary banking arrangements to which such Person and the Paying Agent/Registrar may agree. Subject to the foregoing provisions of this Section, each Bond delivered hereunder upon transfer or in lieu of or in exchange for any other Bond shall carry all the rights to interest accrued and unpaid, and to accrue, which were carried by such other Bond, and each such Bond shall bear interest from such date, that neither gain nor loss in interest shall result from such transfer, exchange, or substitution. 10 HOU3003369. ]