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underwriters' discount and a premium of $3 , 657, 901 . 15) plus accrued interest on the Bonds (other than capital appreciation bonds and auction and inverse rate securities described below) from the date of the Bonds to the date of Closing (as hereafter defined) . The Bonds are issued pursuant to an Indenture, dated as of March 1, 1994 between the Authority and Meridian Trust Company of California, San Francisco, California, as trustee (the "Trustee") . The Bonds shall be dated as of March 1, 1994, except the Bonds maturing in the years 2001 through 2003 , inclusive, which are capital appreciation bonds and which shall be dated the date of original delivery and except the Bonds maturing in 2014 which are Auction and Inverse Rate Securities and which shall be dated the date of original delivery. The Bonds shall be authenticated and delivered by the Trustee pursuant to the Indenture and shall be as described in the Indenture and the Official Statement relating to the Bonds. The Bonds are secured by Revenues of the Authority described in the Indenture, including certain Base Rental payments received by the Authority from the City pursuant to a Lease, dated as of March 1, 1994, between the Authority and the City (the "Lease" ) for certain police administration and holding facilities described therein. The Authority will use the proceeds of the Bonds to (i) acquire and construct certain police administration and holding facilities described in the Lease, (ii) fund a reserve fund, and (iii) pay certain costs of issuance. The Authority has received a written commitment from Municipal Bond Investors Assurance Corporation (the "Insurer") to issue, upon fulfillment of certain conditions, a municipal bond insurance policy (the "Policy") insuring payment of principal of, and interest with respect to, the Bonds, as the same become due, as described in the Official Statement. 2 . Public Offering. The Underwriters agree to make a bona fide public offering of all the Bonds initially at the public offering prices (or yields) set forth on Appendix A attached hereto and incorporated herein by reference. Subsequent to the initial public offering, the Underwriters reserve the right to change the public offering prices (or yields) as it deems necessary in connection with the marketing of the Bonds, provided that the Underwriters shall not change the interest rates set forth on Appendix A. The Bonds may be offered and sold to certain dealers at prices lower than such initial public offering prices . 3 . Delivery of Official Statement on the Date Hereof. Pursuant to the authorization of the Authority and the City, the Underwriters have distributed copies of the Preliminary Official Statement dated February 25, 1994, relating to the Bonds, which, together with the cover page and appendices thereto, is herein called the "Preliminary Official Statement. " By its acceptance of this proposal, the Authority and the City hereby ratifies the 2