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GILMORE & BELL, P.C. DILMZT I - MAY 27, 2004 FOR DI,gCUSSION PURPOSE~g ONLy PRELIMINARY OFFICIAL STATEMENT DATED JUNE __, 2004 NEW ISSUE S&P RATING "AAA" BOOK-ENTRY ONLY Insured by Ambac See "RATING" herein In the opinion of Gilmore & Bell, P.C, St. Louis, Missouri, Special Tar Counsel, under ~risting law and assuming continued compliance with certain requirements of the b~ten~al Revenue Code of 1986, as amended, the Interest Component of the Base Rentals paid by the Ci~., trader the Lease (as described herein) and distributed to the Owners of the Series 2004 Certificates (including an), original isstte discount properly allocable to an owner thereoJ) is excluded fi-om gross income for federal and Missouri income tar ptttposes and is not an item of tttr preference for putposes of the federal altetwative minimum tar intposed on individuals and cotporations, except that Special Tar Counsel will not express any opinion for federal or Missouri tar patposes as to any money received in payment of or with respect to the Series 2004 CerTificates subsequent to termination of the City"s obligations under the Lease by reason of an Event of Nonappropriation or an Event of Default. The Series 2OO4 Certificates are "quali~ed tc~r-erempt ~bligati~ns"f~r putp~ses ~f Secti~n 265(b)(3) ~f the ~nternal Revenue C~de ~f ~ 986~ as amended See "TAX MATTERS" herein. $5,900,000* CERTIFICATES OF PARTICIPATION (City of University City, Missouri, Lessee), Series 2004 Evidencing Undivided, Proportionate Interests of the Owners Thereof in Base Rentals Payable, Subject to Annual Appropriation, by the CITY OF UNIVERSITY CITY, MISSOURI Pursuant to a Lease/Purchase Agreement Dated: July 1, 2004 Due: February I as shown on the inside cover The Series 2004 Certificates, representing undivided, proportionate interests in base rentals (the "Base Rentals") to be paid by the City of University City, Missouri (the "City"), are being delivered pursuant to a Trust Indenture dated as of November 1, 2003 (the "Original Indenture"), as amended and supplemented by a First Supplemental Trust Indenture dated as of July 1, 2004 (the "First Supplemental Indenture" and together with the Original Indenture, the "Indenture") executed by BNW Trust Company of Missouri, as trustee (the "Trustee"). The Base Rentals are payable by the City under an annually renewable Lease/Purchase Agreement dated as of November 1, 2003 (the "Original Lease"), as amended and supplemented by a First Supplemental Leaseff~urchase Agreement dated as of July 1, 2004 (the "First Supplemental Lease" and together with the Original Lease, the "Lease") between the City and the Trustee. The City intends to satisfy its obligations to make Base Rentals from (i) a portion of a one-half cent local capital improvement sales tax collected within the City, (ii) a portion of a one-half cent local park sales tax collected within the City, and (iii) other available funds of the City. The City has not, however, pledged such sales taxes or any other funds to the payment of the Series 2004 Certificates. The Series 2004 Certificates will be delivered in fully registered form without coupons in the denomination of $5.000 or any integral multiple thereof, and will be registered in the name of Cede & Co., as nominee of The Depository Irust Company, New York, New York ("DTC"). Individual purchases of interests in the Series 2004 Certificates will be made in book-entry form only. Purchasers of such interests (the "Beneficial Owners") will not receive certificates representing their interests in the Series 2004 Certificates. So long as Cede & Co., as nominee of DTC, is the Owner of the Series 2004 Certificates, references herein to the Owners or Registered Owners mean Cede & Co., as aforesaid, and do not mean the Beneficial Owners of the Series 2004 Certificates. Principal and interest distributable with respect to the Series 2004 Certificates are payable by the Trustee. So long as DTC or its nominee, Cede & Co., is the Owner, such payments will be made directly to such Owner. Upon receipt of payments of principal and interest, DTC will in mm remit such principal and interest to DTC's participants for subsequent disbursement to the Beneficial Owners of the Series 2004 Certificates. Principal will be payable annually on February 1, beginning February 1, 2005. Interest will be payable semiannually on February I and August 1, beginning February 1, 2005, by check or draft mailed (or by wire transfer in certain circumstances as described herein) to the persons who are the registered owners of the Series 2004 Certificates as of the close of business on the 15th day of the month preceding the applicable interest payment date. The Series 2004 Certificates will be payable solely from the Base Rentals under the Lease and certain money held by the Trustee under the Indenture. See "SECURITY FOR THE CERTIFICATES" herein. Ihe City has agreed to pay the total Base Rentals due under the Lease for each fiscal year, but only if the City Council of the City annually appropriates sufficient money specifically designated to pay the Base Rentals coming due during each succeeding fiscal year. lhe obligation to make payments will not create a general obligation or other indebtedness of the CiD' within the meaning of any constitutional, statutory or charter debt limitation or restriction. The delivery of the Series 2004 Certificates will not obligate the City to levy any form of taxation therefor or to make any appropriation for their payment in any year subsequent to a year in which the Lease is in effect. Payment of the principal of and interest on the Series 2004 Certificates when due will be insured by a financial guaranty insurance policy to be issued by Ambac Assurance Corporation simultaneously with the delivery of the Series 2004 Certificates. Ambac The Series 2004 Certificates are subject to optional and extraordinary optional prepayment prior to their stated payment dates under certain conditions. See "THE CERTIFICATES -- Prepayment Provisions" herein. /he Series 2004 Certificates are subject to certain risks. Prospective purchasers of the Series 2004 Certificates should be able to evaluate the risks and merits of an investment in the Series 2004 Certificates before considering a purchase of the Series 2004 Certificates. See "RISK FACTORS AND INVESTMENT CONSIDERATIONS" herein. The Series 2004 Certificates are offered when, as and if executed and delivered by the Trustee, subject to the approval of legaliO, by Gilmore & Bell, P. C. St. Louis, Missouri, Special ?ca' Counsel, and certain other conditions. Certain legal matters relating to this Official Statement will also be passed upon by Gilmore & Bell, P. C, St. Louis, Missouri. Certain legal matters will be passed upon for the City' by John F. Mulligan, Jr., Attorney-at-Law, Clayton, Missoltri. It is expected that the Series 2004 Certificates will be available for delivery through The Deposito~ Tntst Company in New York, New York, on or about July 1, 2004. Bids received until 11:00 a.m. Central Time on June 21, 2004, at the offices of Gilmore & Bell, P.C. One Metropolitan Square 211 North Broadway, Suite 2350 St. Louis, Missouri 63102 The date of this Official Statement is June ,2004. * Preliminary; subject to change.