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271851 WHITE - GTV CLERK � I � �� PINK - FINANCE G I TY OF SA I NT PAiT L Council �"'j�� CANARV - DEPARTMENT BLUE - MAYOR File NO. ! ouncil Resolution Presented By Referred To Committee: Date Out of Committee By Date WHEREAS: 1 . On September 19, 1978, the Port Authority of the City of Saint Paul adopted Resolution No. 1392, giving preliminary approval to the issuance of revenue bonds in the initial principal amount of approximately $690,000 to finance the construction of a 28,000 square foot airplane hanger for Exec-U-Air, Inc. 2. Laws of Minnesota 1976, Chapter 234, provides that any issue of revenue bonds authorized by the Port Authority of the City of Saint Paul , shall be issued only with the consent of the City Council of the City of Saint Paul , by resolution adopted in accordance with law; 3. The Port Authority of the City of Saint Paul has requested that the City Council give its requisite consent pursuant to said law to facilitate the issuance of said revenue bonds by the Port Authority of the City of Saint Paul , subject to final approval of the details of said issue by the Port Authority of the City of Saint Paul . 4. It is estimated that the initial principal amount of said bonds will be approxi- mately $690,000 and that the net interest cost applicable to said issue will not exceed 8�, now, therefore, be it RESOLVED, by the Cjty Council of the City of Saint Paul , that in accordance with Laws of Minnesota 1976, Chapter 234, the City Council hereby consents to the issuance of the aforesaid revenue bonds for the purposes described in the aforesaid Port Authority Resolution No. 1392 in the initial principal amount of $690,000 at a net interest cost of not to exceed 8%, the exact details of which, including, but not limited to, provisions relating to maturities, interest rates, discount, redemption, and for the issuance of additional bonds are to be determined by the Port Authority, pursuant to resolution adopted by the Port Authority, and the City Council hereby authorizes the issuance of any additional bonds (including refunding bonds) by the Port Authority, found by the Port Authority ta be necessary for carrying out the purposes for which the aforesaid bonds are issued. COU[VCILMEN Yeas Nays Requested by Department of: utl r $��er _� oz a Ho� In Favor �� H Hunt Le e U�� a _ Against BY Ro dler M�dox Sy ster Iter Te e T �p Z 8 19T8 Form Approved by City At!orney Adopted Council: Date — � Ce ied Passe Coun S etary BY App v y Mayor: Dat � � 19�8 APP o ed by Mayor for Su m ssi n`to C uncil By. B PuBttSNED OCT 7 �g7� PO � T w A► 'UTHORITY OF THE CITY OF ST. PAUL ^"��-`�� Memorandum TO: BOARD OF COMMISSIONERS DATE: Sept. 18, 1978 (Sept. 19, 1978 Regular Meeting) � FROM: D.G. Dunshee SUBJECT: EXEC-U-AIR, INC. PRELIMINARY AGREEMENT $690,000 REVENUE BOND ISSUE � RESOLUTION N0. 1392 1. THE COMPANY Exec=U-Air, Inc. is a new air charter service that began operations at the Downtown St. Paul Airport July 1 , 1978. The company operates six twin engine planes that are piloted by commercial airline pilots during their off hours. -- All of the stock of Exec-U-Air is owned by Mr. John B. Pfaff, who is a resident of North Oaks and isinvolved in motel operations in Colorado, an apartment, and other commercial businesses in the Twin City area. Mr. Pfaff shows a tangible net worth as of March 1 , 1978 of $4,661 ,422. 2. THE PROJECT Exec-U-Air, Inc. proposes to build a 28,000 square foot airplane hanger at the Downtown St. Paul Airport on property leased from the Metropolitan Airports Commission. In addition to providing air charter service,_ they would also sell , repair and store aircraft, se11 parts, and provide a fueling service. The lease with the Metropolitan Airports Commission (M,A.C.} would be for a period of 20 years, and the Port A�thority, under a separate agreement with the M.A.C. , would have a 10-year renewal option in case of default. We also would have a provision that in case of default by the tenant, we would have the ability to remove the building from the Airport property. The building would be of inetal construction and situated on 52,000 square feet of land with all of the area around the hanger being blacktopped. The hanger would be. located on the west edge of the Airport property south of �he existing Rir National Guard hanger. Construction cost for the hanger is $600,898. In addition to hanger space, the building would contain 3,200 square feet of office space that would house the offices of Exec-U-Air and have a limited number of small office spaces available BOARD 0� COMMISSIONERS Sept. 18, 1978 � Page -2- . for rent to ather tenants. When the company occupfes the facility in the spr�ng of 1979 and is in full operation, they will emptay 20 people. 3. FINANCING The proposed financing of the facility would be done under Resolution 876 and would cover the cost of construction of the building, debt service reserve, and six months capitalized interest for construction. Mr. Pfaff would pay the underwriter's discount and bond issue expenses. These costs are estimated to be approximately $40,000. Mr. Pfaff would also personally guarantee the bond issue, Proceeds from the bond issue would be as follows: Construction - � $ 598,6'E2.50 Debt Service - � 68,100.00 Capitalized Interest - 6 Months 23,287.50 TOTAL $ 690,000.00 Mr. Pfaff is also the owner of 36 acres of commercial/industrial property located in Oakdale at the southeast corner of Larpenteur Avenue and Century Avenue (Hwy. 120). The property has Chicago & North ��lestern rail trackage, sewer and water, and frontage on Century. This property was appraised by -�� Mr. Ron Blomquist (t�I} four years ago at a value of $345,000. Mr. Pfaff has agreed to giv� the Port Authority a first mortgage on the property as an additional guarantee for th� bonds besides his personal guarantee. 4. Uf�DERWRITING AGREEMENT Miller & Schroeder Municipals have agreed to underwrite the bond issue for a 20-year term to October 1 , 1998. An interest rate wi11 be set at the time the bond issue is closed. 5. TERMS OF THE LEASE The proposed lease agreement is for 20 years and provides an option to purchase the building at the end of the period for $69,�JQ0 or 10% of the bond issue cost. In addition, the tenant will pay a fiscal and administra- tive fee to the Port Authority of $200 pQr month or $2,400 per year. In addition, the interest on the debt service reserve of $68,1OQ will inure to the benefit of the Port Authority as well as interest on the sinking funds wnich will accrue through monthly rent payments. The income from these sources over the term will b� as follows: Fiscal and Admir�istrative Fee - Term $ 46,800.00 Debt Service Earnings - 8q - 106,236.00 Sinking Fund Earnings - 25,349.2Z TOTAL $178,385.22 ` • �� BOARD OF COMMTSSIONERS Sept. 18, 1978 Page -3- � There would be a provision in the lease that when the net worth of Exec-U-Air, based on certified audits, exceeds $400,000, the personal guarantee and the first mortgage on th� property in Oakdale would be removed. Th�re would also be a provisian in the lease that if Mr: Pfaff would provide securiti�s or land for an appraised value equal to or exceeding the value of the property in Oakdale, th�y could be used in place of the 36 acres in Oakdale. The public sale hearing for formal sale of the building was not pub- . ijshed this month but will be published so that when the iease and bond resolution are presented in October, a formal public sale for the building can take place. � 6. RECOMMENDATIONS Staff has reviewed the project in detail , the financial statements and appraisal of Mr. Pfaff's property, and recommends that the Authority approve the preliminary agreement by resolution 1392 authorizing the issuance of k�onds in the amount of $b90,000. DGD:ca PINK FINANCE G I TY OF SA I NT PAIT L Council - CANARV - DEGARTMENT � BLUE - MAYOR ' Flle NO. �ouncil Resolution �-��-�� Presented gy Referred To ' Committee: Date ' Out of Committee By Date WHEREAS: ' 1 . On September 19, 1978, the Port Authority of the City of Saint Paul adopted Resolution No. 1392, giving preliminary approval to the issuance of revenue bonds in the initial principal amount of approximately $690,000 to finance the construction of a 28,000 square foot airplane hanger for Exec-U-Air, Inc. 2. Laws of Minnesota 1976, Chapter 234, provides that any issue of revenue bands authorized by the Port Authority of the City of Saint Paul , shall be issued only with the cansent of the City Council of the City of Saint Paul , by resolution adopted in accordance with 1aw; 3. The Port Authority of the City of Saint Paul has requested that the City Council give its requisite consent pursuant to said law to facilitate the issuance of said revenue . bonds by the Port Authority of the City of Saint Paul , subject to final approval of the details of said issue by the Port Authority of the City of Saint Paul . 4. It is estimated that the initial principal amount of said bonds will be approxi- mately $690,000 and that the net interest cost applicable to said issue will not exceed 8�, now, therefore, be it RESOLVED, by the City Council of the City of Saint Paul , that in accordanee with taws _ of_ Minnesota 19Z6, Chapter 234, the City Council hereby consents to the issuance of the aforesaid revenue bonds for the purposes described in the aforesaid Port Authority Resolution No. 1392 in the initial principal amount of $690,000 at a net interest cost of not to exceed 8�, the exact details of which, including, but not limited to, provisions relating to maturities, int�rest rates, discount, redemption, and for the issuance of additiona� bonds are to be determined by the Port Authority, pursuant to resolution adopted by the Port Authority, and the City Council hereby autharizes the issuance of any additiona7 bonds (incl�uding refunding bonds) by the Port Authority, found by the Port Authority to be necessary for carrying out the purposes for which the aforesaid bonds are issued. COUNCIL1�lEN Requested by Department of: Yeas •Na5•s Butier Hozza [n Favor Hunt Levine _ Against BY Roedler Sylvester Tedesco Form Approved by City Attorney ` Adopted by Council: Date _ �" Certified Passed b}� Council Secretary BY Bv Appro��ed by :�layor: Date Approved by Mayor for Submission to Council sy� By r ' , ha�� e � Resolution No. 1392 RESOLUTION OF � . THE PORT AUTHORITY OF THE CITY OF SAINT P73UL � �4FiEREAS, the purpose of Chapter 474 , Minnesota Statutes, knotivn as the Minnesota Municipal �Industrzal Develop- ment Act (hereinafter called "Act") as found and .cTetermined b� the legislature is to promote the welfare of the state by the . active attraction and encouragement and development of economi- cally sound industry and commerce to prevent so far as possible the emergence of blighted and marginal �ands and areas of chronic unemployment and to aid in the development of existing areas of blight, marginal land and pezsistent " unemployment; and WHEtZEAS, factors necessitating the active promotion and cievelopment�ot economically sound industry and commerce. . are the increasing concentration of population zn the - metropolitan areas and the rapidly rising increase �.n the amount and cost of governmental services required to meet the needs of the increased popul.ation and the need for develop�inent of land use which �oill provide an adequate taa bas` ta finance these increased costs and access to employment opportunities for such population; and � WHEREAS, The Port Authority of the City of Sa�.nt � ' Paul (the "Authority") has recei.ved from �xec-U-Rir Znc. � (hereinafter referred to as "Company" ) a� request that the � Authority issue its revenue bonds to finance the acquisition, installation and construction of aircraft hanger facilzties on land o�aned,by the Metropolitan Airports Conmission and leased - to the Compa y (said facilities hereinafter called the " - - "Project") in the City of St. Paul, all as is more fully � described in the staff report on file; and 6aH�REAS, the Authority desires to facilitate the selective development of the community, to retain and improve its tax base and to help it provide the range of services and empToyment opportunities required by its population, and said Project will assist the City in achieving that objective. . Said Project will. help to increase the ass�sse� valuation of the City and help �maintain a positive relationship between assessed val.uation and debt and enhance the image and reputati.on of the City; and - WHEREAS, the Project to be financed by revenue bonds wil�. result in substantial employment opportunities in the - . Project; � �7HEREAS, the Authority has Ueen advised by repre- _ .. sentatives of the Company that conventional, commercial financing to pay the capital cost of th� Project is available only on a limited basis and at such high costs of borrowing that the economic feasibility of operating the Pro�ect would be significantly reduced, but the Company has also advised � this Authori�y that ��ith the aid of revenue bond fi.nancing, and its resulting low borrowing, costr the Project �.s econom- ically more feasible, and WAEREAS, Miller & Schroeder riunicipals, Inc. (the "Under�eriter") has made a proposal in an agreement (the "Under��riting Agreement") relating. to the purchase of the revenue bonds to be issued to finance the Project. � NO�d, THEREFORE, BE IT RESOLVk:D by the Commissioners of the Porz Authority of the City of Saint Paul, Minnesota as follows: � � l. On the basis of information availab].e to the Authority it anpears, and the Authora.ty hereby �inds, that said Project constitutes properties, used ox useful in : � connection with one or more revenue proc3uci.ng e�lt�rprises engaged in any business within the meaning of Subdi.visa.on 1a of Section 474 .02 of the Act; that the availabila.ty of the financing under the Act and willingness of the Authority to furnish such financing will be a substantial inducement to the � Company to underta}�e the Project, and that the effect of th� Project, if undertaken, wi11 be to encourage the develop- ment of economically sound industry and commerce and assist in � the prevention of the emergence of blighted and margina2 land, and will help to prevent chronic unemployment, and will help the City to retain and improve its tax base and provide the range of services and employrnent opportunities required by its population, and will help to prevent the movement af talented and educated persons out of the state and to areas within the state where their services may not be as effectively used and will result in more intensive development and use of land within the City and will eventually result i.n an increase in the City' s tax base. r2_ _. . __ ._ r - . ' ' � - 2. Subject to the mutual agreement of the Authority, the Company and the purchas�r of the revenue bonds as to the details of the �lease and other documents necessary � to evidence and effect the financing of the Project and the issuance of the revenue bonds, the Project is hereby approved and authorized and the issuance of revenue bonds of the AutYiority in an aznount not to exceed appraximately $650,Q00 (other than such additional revenue bonds as� are needed . to �complete the Project) is authorized to fi.nance the costs of � the Project. . " 3. There has heretofore been filed with the Authority a form o� Preliminary Agreement between the Authority and Company, relating to the proposed construction and financing of the Project and a form of the Underwriting Agreement. The form of said Agreements have been examined by the Commissioners. It is the purpose of said Agreements to evidence the commi-tment of the parties and their i.ntentions � with respect to the proposed Project in order that the Company . may proceed �aithout delay �aith the commencement of the acquisition, installation and construction of the Project with the assurance that there has been suffici�nt "official action" under Section 103 (b) of the Internal Revenue Code of 1954, as . . � amended, to allow for the issuance of industrial revenue bonds � (including, if aeemed appropriate, any inter.i.in note or notes to provide 4emporary financing thereof) to finance the entire -� cost;:of the Project upon agreement being reached as ta the ultimate details of the Project and its tinancing. Said � Agreements are hereby approved, and the President and Secretary of the Authority are hereby authori zecl and c�:irected. to execute sa�d Agreements . 4. Upon execution of the Preliminary Agreement by the Company, the staff of the Autharity are authorized and directed to continue negotiations with the Company so as ta resolve the remaining issues necessary tv the preparation of � the lease and other documents necessary to the adoption by the Authority of its final bond resolution and the iasuance and � delivery of the revenue bonds; .provided that the President (or Vice-President if the President is absent) and the �ecretary - (or Assistant Secretary if the Secretary is absent) of the Authority, or if either of such officers (and his alternative) are absent, the Treasurer of the Authority in lieu of such absent officers, are hereby authorized in accordance ��ith the provisions of Minnesota Statutes, Section 475 . 60, Subdi:vision 1, to accept a final offer of the Underwriters to purchase the � revenue bonds at such time as such offer is made by the Underwriters to purchase said bonds and to execute an under-- writing agreement setting forth such offer on behalf of the Autchority. • Such acceptance shall bind the Underwriters _ `3_ i . . . ,� said offer but shaYl be subject ta approval and ratification by the Port Authority in a formal supplemental bond resolu-- � tion to be adopted prior �to the delivery of said revenue � bonds. � � �� •� 5. The revenue bonds and interest thereon shall not. constitute an indebtedness of the Authority or the City of Saint � - Paul wi.thin the meaning of any constitutional or statutory limitation and shall not constitute or give rise to a pecuniary ' • liability of the Authority or the City or a charge against their general credit or taxing pawers and neither the full � faith and credit nor the taxing powers of the Authority or the City is pledged for the pavment of the bonds or interest thereon. ' 6. In order to facilitate completion of the _ revenue bond financing herein contemplated, the City Council . is hereby requested to consent, pursuant to Laws af Minnesota, 1976, Chapter 234, to the issuance of the revenue bonds herein contemplated and any additional bonds which the Authority m�y � prior to issuance or from time to time thereafter deem necessary to complete the Project or to refund such revenue � bonds; and for such purpose the Executive Vice Preszdent of � the Authority .i5 hereby authorized and directed to forward ta the City Council copies of this resolution and said . . _; Preliminary Agreement and any additional available a.nformation the City Council may request. = Adopted September 19 , 1978 � _ % � . c GGc ,�.�---- Attest C Presi e t i . The Po t Authority of the City ��2%YI/ . of Saint Paul . ecre tary - � . � _q_ � � . � . _ � . . . PRELIMIiJARY AGREEMENT �'��'� ��;� , THIS AGREEMENT, made and entered into as oi this � _ day of , 197 , by and between the PORT AUTHORITY OF THE CITY OF SAINT PAUL, a public corgoration � organized and existing under the provisions of Piinnesota Statutes, Chapter 458, and a redevelopnent agency within the � meaning of AZinnesota Statutes, Chapter 474, hereina�ter ca�.led "Port Authority" , and Exec-U-Air, Inc. , a corpora�ion organized under the laws of Minnesota, hexeinafter call.ed � ��Company�� WITNESSETH: WHEREAS: - A. The Company and Port Authority intend that aircraft hanger facilities be constructed �_ on land described in Exhibi-� A. attached � hereto and incorporated herein by � � reference, said facility being herein- after called "Project"; � B. 1'he parties hereto intend, subject to the - terms, covenants and conditions herein con- _ tained, to enter into a Lease (hereinafter called Lease) of the Project in the farm • and tenor customary with respect to industrial �revenue bond financing in the . State of Minnesota and to �inance the � � . acquisition, installation and construction ' . � of the Project through the issuance by the . Port Authority of Industrial Development Revenue Bonds (hereina£ter called Bonds) pursuant to P�Tinnesota Statutes, Chapters 45$ and 474 . � N04�I THEREFORE, in consideration of the mutual covenants herein contained, it is hereby agreed by and betcaeen the parties hereto as follows: � � . 1. The Company and the Port Authority agree to nego- _ ,_ tiate the Lease in_a farm and .tenor customary taith respect to . industrial revenue bond financing in the State of Ninnesota, including without limitation the provision for tlie following: (a) The Lease term shall commence _ . � on the nominal date of the Bonds and shall extend . through the final maturity date of the Bonds. - (b) The Company shall agree under the Lease to make nionthly paymants in the amounts and at such � times as are set out in said negotiated Lease� but in any event sufficient to. pay when due dek�t service on the Bonds, plus an administrative fee of $20Q.00 per month: � � _2- � ' � __ __ ,. �._ ....,. ., ._ _ ...,,�v__.. ._ _� __._. _.�._..�. ..��__..,-,�.,_�.�.M��....�.�.:,�,�...,�,�.��.-�_ (c) The Company shall pay from -its own funds all �� . bond issuance expenses included the undercariter's _ . . commission. - � (d) Interest on earnings derived from the investment of the monthly payments and other monies in the Bond Fund and any reserve established for the Bonds and the Construction Fund shall inure to the . benefit of the Port Authority. - - (e) The Company shall have the option to purchase - the Project at an amount require�d to discharge the Bonds; including payment of Paying Ag�nt and Escrow Agent fees and any other liabilities accrued under . the Lease; plus $69 ,000 . (f) The Company shall be entitled ta credit against its last installments of payments due during � the term of the Lease the princigal amount of any surplus construction funds transferred to the Bond Fund and any reserve .established out of bond proceeds . -(g) The Company shall agree to perform alI its obligations under its lease (the "Land Lease") . with the Metropolitan Airports Commission of the land on which the Project is ta be located and . � _ . _3- . and shall cause the Project to be maintained in good working order and free of liens to the extent provided in the Lease. ' _ � • (h) The Conpany shall agree to procure on or - � before termination of the constructiQn period and � maintain in its name and in the name of the Port Authority, liabili-ty and property insurance with respect to .the Project in amounts and aga.inst risks customary with respect to such groperties and _ business interruption or rental value insurance. � (i} The Company agrees that prior to the � commencement of the construction of any part of the � Project, the Company will Cause to be fa.led �,�ith the . . __ __ _ ----_ � ' _ ___-. Port Authority and approved by its duly authari�ed agent the Plans and Specifications for the entire Project certified by an engineer registered in the - State of Minnesota and that with respect to at least � � � that part of the Project the Company then wishes to undertake the Company will first cause to be filed � with the Port Authority and approved by its duly � designated agent, (i) all .payment and performance � bonds for the work to be undertaken, (iia all _ construction. contracts, including any installation contract, (iii) such builders risk, installation floater, and liability insurance as �aill fulZy protect the Company, contractor and Port Authority _4_ (who shall be named as an additional insured ar loss payees) as their interests shall appear, against _ . . risk of loss or damage to �the Project and Project � premises and against claims which may arise from the � construction, acquisition and installation of the _ . Project, and (iv) waivers from .the general � contractor and all subcontractars and suppliers of . all rights against the Port Authority for damag�s to property except such rights as they may have to proceeds of such insurance. All construction contracts entered into for constructing the Project . described herein shall include provisions that the - wages, paid to skilled .and unskilled labor shall� not _-- . __.__ _ -- --- be less than the prevailing wage rates currently in effect in the City of Saint Paul. � - � (j) The Company shall agree to pay all taxes, assessments, and other governmental charges that are or may become due with resnect to the Project. � 2. The performance of the Company's abligations under . the Lease with a personal guaranty of John B. Pfaff and a _ _ _ first mortgage on 36 .8 acres of property (the "Mortgaged Property") owned by John B. Pfaff located in the City of � Oakdale, Washington County, provided that a first mortgage i� real property of equal or greater market value (determined by _5_ an appraised approval by the Port Authority) may be sub- stituted for the first mortgage on the mortgaged propexty. - 3. Upon negotiation of the details "of said Lease and an agreement with the Metropolitan Airports Gommission in form and content satisfactory to the Port Authority relating �. to the Port Authority's rights with respect to the Land Lease and final determination of the terms of the Bonds, the Port . Authority shall thereafter issue said Bonds in accordance with the terms and conditions set forth in an underwriting agreement and the Revenue Agreementi provided that: = . (a) Details of -the sale and issuance o.f th� � . - Bonds to be issued by the Por�E Authority shal], be � subject to final approval by the Company and the Port Authority. � ' - _ (b) Issuance of said Bonds sha11 be subject ta the issuance of the approving opinion of Briggs and. Morgan, Professional. Association, Bond Counsel far _ - the Port Authority and for the City of Saint Paul, and the furnishing of a].1 documents, resolutions� � agreements, financial information, certifications, and representations necessary to the sale� and � � ' delivery of the Bonds, including those �ahich are customarily used and those which are customary and necessary to comply with all state and federal laws, - regulations, rulings and decisions. " _6_ - - . 4. Regardless of whether or not for any reason the Bonds are issued, the Company shall upon demand nevertheless promptly pay or reimburse the Port Authority for the gayment of �ll out-of-pocY.et expenses incurred by the Port Authori ty in. connection with the Project including without limitation . all Bond Counsel and other legal fees incurred in the preparation of this Preliminary Agreement, the negotiated Lease, the underwriting agreement� other related documents, and all costs incident to any environmental studzes requa.red to be hereafter made in connectian with the Project. � 5. This Agreement is subject ta the. approval of the Bonds by the City Council of the City of Saint Paul as provided by Cha-pter 234 of the Laws of Minnesota for 1976. XN WITNESS WHEREOF, the parties hereto have caused� these presents to be executed as of the day and year fi.rst above writeen. ' � In the Presence of: � PORT AUTFIORI�Y OF THE CITY OF SAINT PAUL � � / / y ' ' �I.rC�t, g �` _- `I�-`--_ � _ Y Its �� - ��:�',/� � � By '� , � 1/I� . T �e�.�� (Corporate Seal) . �. � . _�_ . • - . . . In the Presence of: EXEC-U-AIR, INC. . By • � Its By : - .. I ts � (Corporate Seal) _ . -8- � � � � ` • BRANCH OFE7CES: he�� r . La)olla,Califomia 92077 1200 Prospect SVeet,Suite 750 - � � (714)459-2661 � Chicago,Illinois 60604 , � 204 South La Salle Street.Suite 709 � (3t2J346-9448 ' 1 . � Miller & Schroeder Municipals, Inc. NORTHWESTERN FINANCIAL CENTER, 7900 XERXES AVENUE SOUTH, MINNEAPOLIS, MINNESOTA b5431 TOLL FREE MIM4ESOTA 800862-6002 TEL.612-831-1500 TOLL FREE OTHER STATE$SOP32&Bt22 ..� September 19, 1978 Honorable Board of Commissioners Port Authority of the City of Saint Paul � 1130 Minnesota Building Saint Paul, Minnesota 55101 and Exec-U-Air, Inc. Suite 25 - 1821 University Avenue Saint Paul, Minnesota 55104 Ladies and Gentlemen: You have advised us that it has been proposed that the Port Authority of the City of Saint Paul {the "Issuer") issue its Industrial Development Revenue Bonds (the "Bonds") under the provisions of Chapters 458 and 474 Minnesota Revised Statutes and Bond Resolution No. 876 of the Port Authority of the City of Saint Paul to finance a project to be leased by the Issuer to Exec-U-Air, Inc. (the "Company") . On the basis of information furnished us to date with respect to the project to be financed by the issuance of the Bonds, and upon the terms and conditians as generally set forth in this letter . and more specifically described in the Addendum attached • hereto and fully made a part hereof by reference thereto, we hereby agree to purchase approximately $690,000 principal amount of the Bonds on the following basis: A. The Bonds shall bear a date of November l, 1978, and shall mature approximately 20 years from and after the date thereof, with amortization of the Bonds to be provided for or� a level basis whereby the sum of prin- cipal and interest payments due in each year is essential].y constant over the term of the Bonds. The Bonds shall � . � ' 1 � `'1/j , � Pozt Authority of the City of Saint Paul Exec-U-Air, Inc. September 19, 1978 � Page Two � mature in the years beginning November l, 1980, through November 1, 1998. The first interest coupon shall be payable May 1, 1979. B. The Bonds shall be subject to redemption and pre- payment in whole or in part in inverse order of their serial numbers at the option of the Issuer at a callable price of 102� of par value at any time on or after _ November l, 1988, and at 101� of par value at any time on or after November 1, 1993. C. The interest rates with respect to the Bonds shall be determined in the manner as specifically provided and set forth in paragraph 2 of the attached Addendum. D. The proceeds of sale of the Bonds shall be allo- cated approximately as follows: Construction $577,912. 50 Bond reserve 68,100. 00 Capitalized interest (6 months) 23,287. 50 � Underwriting 20, 700. OQ Total $690,000. 00 E. We will pay $669 , 300 for the Bonds upon their delivery to us, together with accrued interest to a now anticipated Closing Date of November 22, 1978, all as more specifically provided and set forth in paragraph 3 of the attached Addendum. F. Notwithstanding anything herein contained to the contrary, all of the terms, covenants and conditions of tl�e Addendum attached hereto and made a part hereof� shall be fully applicable. to the issuance of the Bonds as if such terms, covenants and conditions were fully set forth herein, and to the extent of any conflict between the terms, covenants and conditions of said � • i + . j � �� j Port Authority of the City of Saint Paul Exec-U-Air, Inc. � September 19, 1978 Page Three Addendum and the general description of the transaction ' as contained in this letter, the proyisions of said Addendum shall be controlling and binding upon all parties hereto. If the foregoing proposal is acceptable to both of you, please indicate by endorsing a copy hereof, with the copy so endorsed to be returned to us. Until and unless accepted by both of you, this proposal may be withdrawn by us at any time by a telegram addressed to both of you. If this proposal is accepted but for any reason Bonds are not issued and delivered as herein contemplated, the Issuer shall be reimbursed by the Company for all expenses theretofore incurred by the Issuer in connection with the proposed __ _ _ _ project. � Very truly yours, MILLER & SCHROEDER MUNZCIPALS, INC. By � Accepted by the Port Authority of the Gity of aint Paul this day of September, 1978. �� 1- �.E, � ,; f,�'�-t. By Anc� ��L /J �Z��Z?�-�_ - - Z• Accepted by Exec-U-Air, Inc. this day of September, 1978. BY Its ADDENDUM . THIS ADDENDUM shall be and is hereby made a part of that eertain letter dated the 19th day of September, 1978, addressed by Miller & Schroeder Municipals, Inc. (the "Underwriter") to Port Authority of the City of Saint Paul (the "Issuer") and Exec-U-Air, Inc. (the "Company") , and relates to tl�e proposed issuance and purchase of approximately $690,000 Industrial Development Revenue Bonds (the "Bonds") to be issued by the Issuer to finance a project (the "Project") to be leased to the Company. 1. The Company agrees to fully comply with and assume all expenses incurred in fully complying with all regulatory requirements imposed by the Securities Division of the Minnesota Department of Commerce or such other regulatory or Blue Sky authority as may have jurisdiction herein arising out of or incurred in conjunction with the issuance of the Bonds, including, but not limited to, all expenses incurred and required in the preparation and filing af such interim and annual financial information and reports as may be required to maintain the registration of the Bonds, copies of al.l of which the Company agrees to promptly furnish to the Underwriter at such time as the same may be filed in the -- Office of the Securities Division of the Minnesota Department of Commerce or the office of such other regulatory or Blue Sky authority as may have jurisdiction herein. 2. Al1 Bonds are to bear interest payable semi- annually at the rate or rates of interest as mutually determined between the parties hereto. Notwithstanding the final rate or rates of interest to be borne by the Bonds, the Underwriter reserves the right to reoffer the Bonds to the public at prices other than the par value thereof, including a premium over par or a discount below par, as the Underwriter, in its sole judgment and discretion, may deem necessary. 3. The Underwriter will pay for the Bonds upon their delivery to it if the Bonds are delivered on or before the proposed Closing Date as specified in the letter to which � this Addendum is attached and made a part thereof by reference thereto. The Bonds are to be accompanied by the unqualified approving opinion of Briggs and Morgan, Professional Association, whose opinion shall state in substance that the Bonds are valid and binding special obligations of the Issuer under the Lease payable from revenues pledged to the Common Revenue Bond Fund and stating that interest payable on the Bonds in the hands of a person not. a user of the Project is, - 1 - . on the �date of their issuance, exempt from Federal income taxes under then existing laws, regulations, decisions and rulings. You agree to cooperate in obtaining this opinian and will also furnish an opinion of your counsel as to your authority to enter into this transaction and with�� respect to such additional matters as shall reasonably be required by Bond counsel and our counsel. � . 4. You agree to cooperate with us, Bond counsel, counsel for the Underwritex and such others as may be appro- priate in the preparation of documents and proceedings reasonably necessary to the completian of this transaction, and the Company shall make available to the Underwriter such information and documents with respect to its financial affairs and operations as requested. 5. Before delivery of the Bonds to the Underwriter, appropriate officers of the Issuer shall have reviewed the Official Statement prepared to offer the Bonds for sale so that they will be prepared upon delivery of the Bonds to the Underwriter to certify that the information furnished by them contained therein as of the date thereof is true and correct and does not contain any untrue statement or misleading statement of a material fact nor omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading, and authorizing use of the Official Statement by the Underwriter. . 6. Between the date hereof and the date of del�very of the Bonds to the Underwriter, there shall not have been any material adverse change in the business, properties, financial position or results of operation of the Company, nor shall there be pending or threatened on such date any legal proceedings to which the Issuer or the Company is a party and which will have a material adverse effect on the transactions contemplated by the Lease and. resolution authorizing the Bonds, except any such action of which we shall have been advised prior to the date hereof. 7. The Company agrees to indemnify and hold the Underwriter harmless from and against any and all claims, demands, actions, causes of action, damages, liabilities and judgments (including attorneys' fees and expenses) arising from or in any way connected with any statement or information contained in the Official Statement concerning or related to the Company, the Project and/or the use of Bond proceeds. 8. The Company will pay all expenses in connection with the proposed offering, including, among others, fees and expenses of Company counsel, counsel for the Issuer, Bond counsel, Blue Sky counsel, Blue Sky fees and Accountants' - 2 - fees, together with all costs and expenses incurred in conjunction with the preparation and printing of all documents required to consummate this offering including, but not limited to, the Official Statement, all of the same to be . paid by the Company without regard to �whether the Bonds as . contemplated herein are issued. The Company and the Underwriter acknowledge that they have estimates of the fees and expenses of (a) Bond counsel, (b) Blue Sky counsel, (c) Blue Sky fees', (d) accountants, (e) the normal costs and expenses incurred in conjunction with the preparation and printing of all documents required to consummate the offering, including, but not limited to, the Official Statement. and the printing of the Bonds. The fees of Underwriter' s counsel as well as all rating agency fees shall be paid by the Underwriter. 9. The Port Authority of the City of Saint Paul and - the City Council of the City of Saint Paul agree to do such things and to take such action as may be required to discharge all obligations and honor all covenants made or entered into by the Port Authority with the Company in connection with the issuance, by the Port Authority, of its revenue bonds to finance the Project, including, but not limited to: (a) supervision of the covenants relating to rents, insurance, , repairs, maintenance and taxes; (b) management of separate accounts as required by the Bond authorizing resolutions; and (c) auditing of Port Authority: accounts by a qualified Certified Public Accountant. 10. Upon delivery of the Bonds to the Underwriter, the Underwriter shall pay to the Issuer the purchase price of the Bonds plus accrued interest from their date of issue to the Closing Date all as more specifically provided in Paragraph E of the letter to which this Addendum is attached and made a part thereof by reference thereto, provided the Official Statement with respect to this Bond offering required to permit public sales to individuals in the State of Minnesota and such other jurisdictions as the Underwriter shall desig- nate has been accepted for registration and Standard & Poor' s Corporatian has assigned an "A" rating of the Bonds. If not so accepted for registration prior to the Closing Date, we may accept and place the Bonds at our option, but are not required to do so. 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