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THE BONDS General Description The Bonds are dated as of July 1, 1996 and will mature annually on February 1, as set forth on the cover of this Official Statement, or in the event the principal amount of the bonds increases or decreases subsequent to the receipt of the proposals, the final principal maturity schedule will appear on the addendum to this Official Statement for the Bonds. The Bonds are issued in book entry form. Interest on the Bonds is payable February 1, 1997 and semiannually thereafter on February 1 and August 1. Interest will be payable to the holder (initially Cede & Co.) registered on the books of the registrar (the "Registrar") on the fifteenth day of the calendar month next preceding such interest payment date. Principal of and interest on the Bonds will be paid as described in the section herein entitled "Book Entry System." Optional Redemption The City may elect on February 1, 2006, and on any day thereafter, to prepay the Bonds due on or after February 1, 2007. Redemption may be in whole or in part and if in part at the option of the City and in such order as the City shall determine. If a maturity is prepaid only in part, prepayments will be in increments of $5,000 of principal. All optional prepayments shall be at a r price of par plus accrued interest. Book Entry System The Depository Trust Company ("DTC"), New York, New York, will act as securities depository { for the Bonds. The Bonds will be issued as fully-registered securities registered in the name of Cede & Co. (DTC's partnership nominee). One fully-registered Bond certificate per maturity will • be issued in the principal amount of the Bonds maturing in such year, and will be deposited with -. DTC. DTC is alimited-purpose trust company organized under the New York Banking Law, a "banking -organization" within the meaning of the New York Banking Law, a member of the Federal Reserve System, a "clearing corporation" within the meaning of the New York Uniform Commercial Code, and a "clearing agency" registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934. DTC holds securities that its participants ("Participants") deposit with DTC. DTC also facilitates the settlement among Participants of securities transactions, such as transfers and pledges in deposited securities through electronic computerized book entry changes in Participants' accounts, thereby eliminating the need for physical movement of securities certificates. Direct Participants ("Direct Participants") include securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is owned by a number of its Direct Participants and by the New York Stock Exchange, Inc., the American Stock Exchange, Inc., and the National Association of Securities Dealers, Inc. Access to the DTC system is also available to others such as securities brokers and dealers, banks, and trust companies that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly ("Indirect Participants"). The Rules applicable to DTC and its Participants are on file with the Securities and Exchange Commission. Purchases of Bonds under the DTC system must be made by or through Direct Participants, which will receive a credit for the Bonds on DTC's records. The ownership interest of each actual purchaser of each Bond ("Beneficial Owner") is in turn to be recorded on the Direct and Indirect Participants' records. Beneficial Owners will not receive written confirmation from DTC of their purchase, but Beneficial Owners are expected to receive written confirmations providing • details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interest in the Bonds are to be accomplished by entries made on the books of - 2 -