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Pursuant to the Original Indenture, the City and the Trustee caused to be delivered Certificates of
<br />Participation (City of University City, Missouri, Lessee), Series 2003 in the aggregate principal amount of
<br />$6,345,000 (the "Series 2003 Certificates"), for the purpose of providing funds to (1) refund $1,415,000
<br />original principal amount of Certificates of Participation (City of University City, Missouri, Parking Facility
<br />Project), Series 1997; (2) pay the costs of constructing, renovating and improving recreational facilities in the
<br />City's Heman Park, including improvements to the existing swimming pool and fitness center and related
<br />security and safety improvements (collectively, the "2003 Project"); (3) fund a debt service reserve fund for
<br />the Series 2003 Certificates; and (4) pay the costs of delivering the Series 2003 Certificates.
<br />
<br /> Pursuant to a Base Lease dated as of November 1, 2003 (the "Original Base Lease"), the City leased
<br />to the Trustee all its interest in (1) those tracts of land on which the swimming pool, fitness center and other
<br />recreational facilities in Heman Park are situated and land on which the City's parking garage is located
<br />(together with all other improvements now or to be situated thereon, collectively, the "Series 2003 Leased
<br />Property").
<br />
<br /> Simultaneously with the delivery of the Series 2004 Certificates, the City and the Trustee will enter
<br />into a First Supplemental Base Lease dated as of July 1, 2004 (the "First Supplemental Base Lease" and
<br />together with the Original Base Lease, the "Base Lease"), pursuant to which the Original Base Lease will be
<br />supplemented and amended to lease to the Trustee the Series 2003 Leased Properly and those tracts of land on
<br />which the City's police station and fire stations are located, together with all other improvements now or to be
<br />situated thereon (collectively, the "Leased Property"). See the caption "PLAN OF FINANCING - The
<br />Leased Property" for a more detailed description of the Leased Property.
<br />
<br /> Pursuant to the terms of the First Supplemental Lease, (1) the City will use a portion of the proceeds
<br />of the Series 2004 Certificates to pay the costs of the Series 2004 Project and (2) the Trustee, as lessor under
<br />the Lease, will lease the Leased Property to the City for a current term ending June 30, 2005, with 14
<br />successive one-year renewal options, with a final Renewal Term beginning July 1, 2019 and ending February
<br />2, 2020 (the Lease Term established pursuant to the First Supplemental Indenture). Each Renewal Term is
<br />subject to annual appropriation by the City Council.
<br />
<br /> The City intends to satisfy its obligation to make Base Rentals under the Lease from (i) a portion of a
<br />one-half cent local capital improvement sales tax collected within the City, (ii) a portion of a one-half cent
<br />local park sales tax collected within the City, and (iii) other available funds of the City. Purchasers of the
<br />Series 2004 Certificates should be aware, however, that such sales taxes and other funds are not pledged to the
<br />payment of the Series 2004 Certificates.
<br />
<br /> Pursuant to the Indenture, a portion of each Base Rental will be used to pay interest distributable with
<br />respect to the Series 2004 Certificates, and a portion of each Base Rental will be used to pay principal
<br />distributable with respect to the Series 2004 Certificates.
<br />
<br />See the caption "PLAN OF FINANCING" herein.
<br />
<br />Parity Obligations
<br />
<br /> The Series 2004 Certificates will be secured on a parity basis with each other and with the Series 2003
<br />Certificates, except that (i) the Series 2003 Certificates are secured by a separate account within the reserve
<br />fund, (ii) the Certificate Insurance Policy issued by the Certificate Insurer with respect to the Series 2003
<br />Certificates insures only the Series 2003 Certificates, and (iii) the Certificate Insurance Policy issued by the
<br />Certificate Insurer with respect to the Series 2004 Certificates insures only the Series 2004 Certificates. The
<br />Indenture provides for the future issuance of Additional Certificates which, if issued, would rank on a parity
<br />with the Series 2003 Certificates and the Series 2004 Certificates under the Indenture. The term
<br />"Certificates," as used in this Official Statement, means the Series 2003 Certificates, the Series 2004
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