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<br />August 1, 1998, or any interest payment date thereafter, at the par value thereof plus accrued interest to
<br />the date fixed for redemption. If less than all of the Bonds are to be redeemed and if less than all of a
<br />maturity is to be redeemed, the Paying Agent/Registrar shaJl determine by lot the Bonds, or portions
<br />thereof, within such maturity to be redeemed. Not less than 30 days prior to a redemption date for the
<br />Bonds, the City shall cause a notice of redemption to be sent by United States mail, first class, postage
<br />prepaid, to each Holder of a Bond to be redeemed, in whole or in part, at the address of the Holder
<br />appearing on the registration books of the Paying Agent/Registrar at the close of business on the business
<br />day next preceding the date of mailing such notice.
<br />
<br />Further details with reference to the Certificates are set forth in the Official Statement.
<br />
<br />Source of Payment. . . The Certificates are direct general obligations payable from a combination of the
<br />receipts of an ad valorem tax levied, within the limits prescribed by law, on taxable property located
<br />within the City and a limited pledge of $10,000 of surplus revenues derived from the operation of the
<br />City's waterworks and sewer system, as provided in the Ordinance authorizing the Certificates.
<br />
<br />CONDITIONS OF THE SALE
<br />
<br />Type of Bids and Interest Rates. . . The Certificates will be sold in one block on an "All or None" basis,
<br />and at a price of not less than their par value plus accrued interest to the date of delivery of the
<br />Certificates. Bidders are invited to name the rate(s) of interest to be borne by the Certificates, provided
<br />that each rate bid must be in a multiple of 1/8 of 1 % or 1/20 of 1 % and the effective interest rate must
<br />not exceed 1.5%. The highest rate bid may not exceed the lowest rate bid by more than 3% in rate. No
<br />limitation is imposed upon bidders as to the number of rates or changes which may be used. All
<br />Certificates of one maturity must bear one and the same rate. No bids involving supplemental interest
<br />rates will be considered. Each bidder shall state in his bid the total interest cost in dollars and the
<br />effective interest rate determined thereby (calculated in the manner prescribed by Article 717k-2,
<br />VATCS), which shall be considered informative only and not as a part of the bid.
<br />
<br />Basis for Award... For the purpose of awarding the sale of the Certificates, the interest cost of each bid
<br />will be computed by determining, at the rate or rates specified therein, the total doJlar cost of all interest
<br />on the Certificates from the Certificate Date to their respective maturities, using the table of Bond
<br />Years herein, and deducting therefroml:he premium bid, if any. Subject to the City's right to reject any
<br />or all bids and to waive any irregularities except time of filing, the Certificates will be awarded to the
<br />bidder or syndicate account whose name first appears on the Official Bid Form (the "Initial Purchaser" or
<br />"Purchaser") whose bid based on the above computation produces the lowest effective interest cost to the
<br />City (calculated in the manner prescribed by Article 717k-2, VATCS).
<br />
<br />Good Faith Deposit. . . A Good Faith Deposit, payable to the "City of San Marcos, Texas", in the amount
<br />of $26,800.00, is required. Such Good Faith Deposit shaH be in the form of a Cashier's Check, or its
<br />equivalent, which is to be retained uncashed by the City pending the Purchaser's compliance with the
<br />terms of his bid and the Notice of Sale and Bidding Instructions. The Good Faith Deposit may accompany
<br />the Official Bid Form or it may be submitted separately. If submitted separately, it shall be made
<br />available to the City prior to the opening of the bids, and shall be accompanied by instructions from the
<br />bank on which drawn which authorize its use as a Good Faith Deposit by the Purchaser who shall be named,
<br />in such instructions. The Good Faith Deposit of the Purchaser wiH be returned upon payment for the
<br />Certificates. No interest wiH be allowed on the Good Faith Deposit. In the event the Purchaser should
<br />fail or refuse to take up and pay for the Certificates in accordance with his bid, then said check shaJl be
<br />cashed and accepted by the City as full and complete liquidated damages. The checks accompanying bids
<br />other than the winning bid will be returned immediately after the bids are opened, and an award of the
<br />Certificates has been made.
<br />
<br />DELIVERY OF THE CERTIFICATES AND ACCOMPANYING DOCUMENTS
<br />
<br />CUSIP Numbers. . . It is anticipated that CUSIP identification numbers will appear on the Certificates,
<br />but neither the failure to print or type such number on any Certificate nor any error with respect thereto
<br />shall constitute cause for a failure or refusal by the Purchaser to accept delivery of and pay for the
<br />Certificates in accordance with the terms of this Notice of Sale and the terms of the Official Bid Form.
<br />AH expenses in relation to the printing or typing of CUSIP numbers on the Certificates shaH be paid by
<br />the City; provided, however, that the CUSIP Service Bureau charge for the assignment of the numbers
<br />shall be the responsibility of and shaH be paid for by the Purchaser.
<br />
<br />Initial Delivery of Initial Certificate. . . Initial Delivery wiJI be accomplished by the issuance of the
<br />Initial Certificate (also called the "Certificates"), either in typed or printed form, in the aggregate
<br />principal amount of the Certificates, payable to the Purchaser, signed by the Mayor and City Secretary,
<br />
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