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5/6/74 a~d redemption, at the option of the City, on July 1, 1984, or on any interest payment date thereafter prior to maturity, at a redemption price equal to the principal amount thereof plus a pr~aium equal to one-quarter of one percent of said principal amount for each year or portion o£ a year between the redemption date and the maturity date thereof. All or any of the bonds subject to call may be called for redemption at any one time. If less than ali of the bonds are redeemed at any one time, such bonds shall he redeemed only in inverse order of maturity and by lot within the same maturity. The $1,310,000 bonds maturing in 1999 are subject to mandatory call and redemption in the following minimum amounts: Year ~ount 1990 ........................................ $ 50,000 1991 ........................................ 50,000 1992 ........................................ 50,000 1993 ........................................ 5~000 199~ ....................................... 5~000 Am~ttut 1995 ........................................ $190,000 1996 ........................................ 200,000 1997 .............. ~ ......................... 210,000 1998 ........................................ 220,000 1999 ........................................ 240,000 PURPOSE OF ISSUE: The bonds were authorized for the acquisition and construction of additions to the water system for the City of Santa Ans. 1962 Water Revenue Bonds, Series A and B, aggregating $5,000,000 of a total authorized amount of $6,950,000, have previously been issued and sold. SECURITY: The bonds are issued pursuam to the Charter of the City of Santa Ant, the Revenue Bond Law of 1941 (Governmem Code 54300 et seq.) and Article g, Chapter 3, Part 1, Division 2, Title 5 of said Government Code. The bonds are equally secured by pledge, charge and lien upon the gross revenues of the entire water system of the City of Santa Ant, together with all additions and improvements to said system hereafter made. The principal of and interest on the bonds and any premiums upon the redemption of any thereof are not a debt of the City of Santa Ant nor a legal or equitable pledge, charge, lien or encumbrance upon any of its property or upon any of its income, receipts or revenues, except the gross revenues of said water system which are under the terms of the Resolution and said Revenue Bond Law of 1941, pledged to the payment of said bonds and interest. The general fund of the City of Santa Ant is not liable for the payment of the bonds or their interest, nor is the credit or the taxing power of the City pledged. The holder of the bonds or coupons shall not compel the exercise of the taxing power by the City of Santa Ant or the forfeiture of any of its property. TERMS OF SALE interest Rate: The maximum rate bid may not exceed 7% per annum, payable semiannually. Each rate bid must be a multiple of 1/20 of 1%. No bond shall bear more than one interest rate, and all bonds of the same maturity shall bear the same rate. Only one coupon will be attached to each bond for each installment of interest thereon, and bids providing for additional or supplemental coupons wilt be rejected. The rate on any maturity or group of maturities shall not be more than 2% higher than the interest rate on any other maturity or group of maturities. Award: The bonds shall be sold for cash only. All bids must be for not less than all of the bonds hereby offered for sale and each bid shall state that the bidder offers par and accrued interest to the dat~ of delivery, the premium, if any, and the imerest rate or rates not to exceed those specified herein, at which the bidder offers to buy said bonds. Each bidder shall state in his bid the total net interest cost in dollars and the average net interest rate determined thereby, which shall be considered informatiw only and not a pan of the bid. 2