If any installment of the principal of the unpaid assessment or of interest thereon
is not paid to the treasurer on or before the due dateof June 1st or December 1st, as the case may be, next preceding the date upon which
the coupons representing it are payable to the bondholder, the treasurer shall, after
the close of business onthe due date, add to the principal or interest so delinquent a penalty of2 percent of the total amount of such delinquency, and at the beginning of the business
on the first day of each succeeding month until such delinquent payment and all penalties
thereon are fully paid, he shall add an additional penalty of2-percent of the amount of such delinquency. The treasurer shall collect such penalties with and as a part of the delinquent
payment. Except as hereinafter provided, the2 percent penalty first imposed and all subsequent penalties shall be paid to the holder
of the bond along with and as a part of such defaulted payment. The legislative body conducting the proceedings may elect, in the resolution of
intention, to have the treasurer retain the first2-percent penalty as a cost of servicing the delinquency. In such case, the following sentence shall be substituted for the last sentence
of the default clause in the bond form, as set forth in Section 6460: “The2-percent penalty first imposed shall be retained by the treasurer as a cost of servicing
the delinquency and all subsequent penalties shall be paid to the holder of the bond
along with and as a part of such defaulted payment.”
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