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Home My WebLink About2015-09-01-Meeting Minutes Commission Meeting Agenda Commission Chamber - 9/1/2015 ATTENDANCE: Present: Hons. Hardie Davis, Jr., Mayor; Guilfoyle, Sias, Frantom, M. Williams, Fennoy, D. Williams, Hasan, Davis and Smith, members of Augusta Richmond County Commission. Absent: Hon. Lockett, member of Augusta Richmond County Commission. INVOCATION: Rev. Mark S. Pierson, Pastor, Bethel AME Church PLEDGE OF ALLEGIANCE TO THE FLAG OF THE UNITED STATES OF AMERICA. Five (5) minute time limit per delegation DELEGATIONS A. Mr. Moses Todd RE: E911 Ambulance Service Item Action: None Moses_Todd_9-1-15.pdf ItemApprovalSheet.html Motions Motion Type Motion Text Made By Seconded By Motion Result Presentation is made by Mr. Todd. CONSENT AGENDA (Items 1-8) PUBLIC SERVICES 1. Motion to approve New Application: A. N. 15-48 request by Kevin Goldsmith Item for an on premise consumption Liquor, Beer & Wine License and a retail package Beer & Wine License to be used in connection with Bodega Ultima, LLC located at 353 Highland Ave. There will be Sunday Sales. District 7. Super District 10. (Approved by Public Services Committee August 25, 2015) Action: Approved Bodega_Ultima_LLC.pdf ItemApprovalSheet.html Motions Motion Type Motion Text Made By Seconded By Motion Result Approve Motion to approve. Motion Passes 9- 0. Commissioner Sammie Sias Commissioner Mary Davis Passes 2. Motion to approve Change Order #1 for the new Diamond Lakes Campground construction project for the amount of $99,915.20 to C & H Paving, Inc. (Approved by Public Services Committee August 25, 2015) Item Action: Approved CO_1_Backup.pdf ItemApprovalSheet.html Motions Motion Type Motion Text Made By Seconded By Motion Result Approve Motion to approve. Motion Passes 9- 0. Commissioner Sammie Sias Commissioner Mary Davis Passes ADMINISTRATIVE SERVICES 3. Motion to approve resolution (with proposed changes) reestablishing a Downtown Advisory Panel (DAP). (Approved by Administrative Services Committee August 25, 2015) Item Action: Approved Resolution_for_Downtown_Advisory_Panel_(with_changes).pdf ItemApprovalSheet.html Motions Motion Type Motion Text Made By Seconded By Motion Result Approve Motion to approve. Motion Passes 9- 0. Commissioner Sammie Sias Commissioner Mary Davis Passes FINANCE 4. Motion to approve a request for the waiver of the cleanup/usage fees for a Jazz Festival for Paine College to be held at the Jessye Norman Amphitheater on September 13, 2015. (Approved by Finance Committee August 25, 2015) Item Action: Approved ItemApprovalSheet.html Motions Motion Type Motion Text Made By Seconded By Motion Result Approve Motion to approve. Motion Passes 9- 0. Commissioner Sammie Sias Commissioner Mary Davis Passes ENGINEERING SERVICES 5. Motion to authorize condemnation to acquire title of a portion of property for right of way (Parcel 150-0-012-02-0) 3055 Willis Foreman Road. (Approved by Engineering Services Committee August 25, 2015) Item Action: Approved ItemApprovalSheet.html Motions Motion Type Motion Text Made By Seconded By Motion Result Approve Motion to approve. Motion Passes 9- 0. Commissioner Sammie Sias Commissioner Mary Davis Passes 6. Motion to award Design Consultant Services Agreement, RFQ 14-243, to Cooper Carry in the amount of $1,201,330 for the Augusta Downtown Concept Plan, to be funded from the Transportation Investment Act (TIA) as requested by AED. (Approved by Engineering Services Committee August 25, 2015) Item Action: Approved CPB_Award_consultant_8.3.2015.xlsx Downtown_Concept_Study_Funding_Analysis.pdf Request_for_Qualifications_sent_to_Newspapers.pdf 14-243_TAB.xls 14-243_Phase_II_Cumulative_Eval.pdf Process_Regarding_RFQs.pdf Mail_List_and_Demandstar_Planholders.pdf 14-243_Department_Recommendation_of_Award.pdf ItemApprovalSheet.html Motions Motion Type Motion Text Made By Seconded By Motion Result Approve Motion to approve. Motion Passes 9- 0. Commissioner Sammie Sias Commissioner Mary Davis Passes 7. Motion to approve Emergency Procurement of Replacement Parts for Hypochlorite Generation Equipment. (Approved by Engineering Services Committee August 25, 2015) Item Action: Approved Emergency_Severn_Trent.pdf ItemApprovalSheet.html Motions Motion Type Motion Text Made By Seconded By Motion Result Approve Motion to approve. Motion Passes 9- 0. Commissioner Sammie Sias Commissioner Mary Davis Passes PETITIONS AND COMMUNICATIONS 8. Motion to approve the minutes of the regular commission meeting held on August 18, 2015 and the special called commission meeting held on August 25, 2015. Item Action: Approved Regular_Commission_Meeting_August_18_2015.pdf Called_Commission_Meeting_August_25_2015.pdf ItemApprovalSheet.html Motions Motion Type Motion Text Made By Seconded By Motion Result Approve Motion to approve. Motion Passes 9- 0. Commissioner Sammie Sias Commissioner Mary Davis Passes ****END CONSENT AGENDA**** AUGUSTA COMMISSION 9/1/2015 AUGUSTA COMMISSION REGULAR AGENDA 9/1/2015 (Items 9-15) ADMINISTRATIVE SERVICES 9. 2015 Statistical Update of Non-Emergency Request for Service. (Requested by Mayor Hardie Davis, Jr.) Item Action: Approved 2015_Statistical_Update.pdf ItemApprovalSheet.html Motions Motion Type Motion Text Made By Seconded By Motion Result Approve Motion to approve receiving this item as information. Motion Passes 9-0. Commissioner Marion Williams Commissioner Ben Hasan Passes 10. Update from the DBE Coordinator regarding the Disparity Study. (No recommendation from Administrative Services Committee August 25, 2015) Item Action: Approved ItemApprovalSheet.html Motions Motion Type Motion Text Made By Seconded By Motion Result Approve Motion to approve receiving this item as information. Mr. M. Williams abstains. Voting No: Commissioner Wayne Guilfoyle. Motion Passes 7-1 -1. Commissioner William Fennoy Commissioner Dennis Williams Passes PUBLIC SAFETY 11. Motion to terminate the contract "Agreement for 911 Ambulance Response and Emergency Medical Services with Gold Cross EMS Inc." in accordance with Article VI of said contract. (No recommendation from Public Safety Committee August 25, 2015) Item Action: Approved Agenda_Item_Gold_Cross_EMS_Contract_Termination.pdf Agreement_for_911_Ambulance_Response_and_Emergency_Medical_Services.pdf EMS_Region_6_Emergency_Medical_Services_System_Zoning_Plan.pdf ItemApprovalSheet.html Motions Motion Type Motion Text Made By Seconded By Motion Result Approve Motion to approve receiving this item as information. Mr. Hasan abstains. Motion Passes 8-0 -1. Commissioner Sammie Sias Commissioner William Fennoy Passes FINANCE 12. Approve Augusta Regional Airport Revenue Bonds Series 2015 bond resolutions and authorize the Mayor and Clerk to sign all necessary documents. Item Action: Approved Master_Bond_Resolution_Augusta_Airport_2015_(00069637-15xA91E4).pdf Custodial__Agreement_(U.S._Bank)_Augusta_Airport_2015_(00073863-2xA91E4).pdf RJ___Augusta_Airport_2015_-_BPA_26837614_1.pdf Paying_Agent_and_Registrar_Agreement_Augusta_Airport_2015_(00073866-2xA91E4).pdf ATLANTA-#5621272-v6-Preliminary_Official_Statement____15_Augusta_Airport....pdf ItemApprovalSheet.html Motions Motion Type Motion Text Made By Seconded By Motion Result Approve Motion to approve. Motion Passes 9- 0. Commissioner Sammie Sias Commissioner Mary Davis Passes 13. Presentation by Mr. Rob Dennis of the NSC Discovery, Inc. regarding the tax exempt status of the property at 1930 North Leg Road. (No recommendation from Finance Committee August 25, 2015) Item Action: Approved NSC_Discovery_Inc..pdf ItemApprovalSheet.html Motions Motion Type Motion Text Made By Seconded By Motion Result Approve Motion to approve receiving this item as information. Motion Passes 9-0. Commissioner Wayne Guilfoyle Commissioner Sammie Sias Passes ADMINISTRATOR 14. Approve resolution requesting the Augusta-Richmond County Board of Elections to place the approved SPLOST 7 package on the ballot for the November 3, 2015 election. Item Action: Approved SPLOST_7_Resolution.pdf SPLOST_7_Project_List.pdf ItemApprovalSheet.html Motions Motion Type Motion Text Made By Seconded By Motion Result Motion to approve. Voting No: Upcoming Meetings www.augustaga.gov Approve Commissioner Marion Williams. Motion Passes 8-1. Commissioner Mary Davis Commissioner Grady Smith Passes OTHER BUSINESS 15. Discuss certificate of occupancy for the Municipal Building. (Requested by Commissioner M. Williams) Item Action: Approved ItemApprovalSheet.html Motions Motion Type Motion Text Made By Seconded By Motion Result Approve Motion to approve receiving this item as information. Mr. Guilfoyle out. Motion Passes 8-0. Commissioner William Fennoy Commisioner Sean Frantom Passes LEGAL MEETING A. Pending and Potential Litigation. B. Real Estate. C. Personnel. 16. Motion to authorize execution by the Mayor of the affidavit of compliance with Georgia's Open Meeting Act. Item Action: None Commission Meeting Agenda 9/1/2015 2:00 PM Attendance 9/1/15 Department: Caption: Background: Analysis: Financial Impact: Alternatives: Recommendation: Funds are Available in the Following Accounts: REVIEWED AND APPROVED BY: Commission Meeting Agenda 9/1/2015 2:00 PM Invocation Department: Caption:Rev. Mark S. Pierson, Pastor, Bethel AME Church Background: Analysis: Financial Impact: Alternatives: Recommendation: Funds are Available in the Following Accounts: REVIEWED AND APPROVED BY: Commission Meeting Agenda 9/1/2015 2:00 PM Moses Todd Department:Clerk of Commission Caption:Mr. Moses Todd RE: E911 Ambulance Service Background: Analysis: Financial Impact: Alternatives: Recommendation: Funds are Available in the Following Accounts: REVIEWED AND APPROVED BY: Commission Meeting Agenda 9/1/2015 2:00 PM Alcohol Application Department:Planning & Development Caption:Motion to approve New Application: A. N. 15-48 request by Kevin Goldsmith for an on premise consumption Liquor, Beer & Wine License and a retail package Beer & Wine License to be used in connection with Bodega Ultima, LLC located at 353 Highland Ave. There will be Sunday Sales. District 7. Super District 10. (Approved by Public Services Committee August 25, 2015) Background:This is a New Application. Analysis:This applicant meets all of the requirements of the City of Augusta Alcohol Ordinance. Financial Impact:This applicant will pay a pro-rated fee of $4,117.50. Alternatives: Recommendation:The Planning & Development recommends approval. The R.C.S.O. recommends approval. Funds are Available in the Following Accounts: REVIEWED AND APPROVED BY: Law Administrator Clerk of Commission Commission Meeting Agenda 9/1/2015 2:00 PM Approve Change Order #1 Diamond Lakes Campground Project Department:Recreation, Parks and Facilities Caption:Motion to approve Change Order #1 for the new Diamond Lakes Campground construction project for the amount of $99,915.20 to C & H Paving, Inc. (Approved by Public Services Committee August 25, 2015) Background:Funds were allocated in SPLOST Phase VI for the development of a 28 site full-service recreational vehicle campground. This is part of the overall site-specific master plan developed for this regional facility. Analysis:1. Unsuitable soils were encountered during construction of the new campground. The unforeseen poor subgrade materials have to be removed and replaced to meet the standards for paving. A unit price in the contract for excavation (removal) of unsuitable soils only was $25/C.Y. A price of $21/C.Y. was negotiated for removal and replacement for a 40% savings. Price for this work is $84,924. 2. Additional sewer work that rerouted a portion of the line due to unforeseen complexity with original plan at a cost of $7,630. 3. Lake treatment for the front pond adjacent to the campgrounds to treat lily, water shield and cabomba infestation at a cost of $7,361.20. Financial Impact:The cost of the Change Order is $99,915.20 Alternatives:1. Approve Change Order #1 on the new campground project at Diamond Lakes to C & H Paving, Inc. in the amount of $99,915.20 2. Move no action thus delaying the work on this construction/improvement project. Recommendation:1. Approve change order #1 Funds are Available in the Following Accounts: Funding is available in the project budget 328061110 - 5412120 REVIEWED AND APPROVED BY: Finance. Procurement. Law. Administrator. Clerk of Commission Commission Meeting Agenda 9/1/2015 2:00 PM Resolution Reestablishing Downtown Advisory Panel Department:Clerk of Commission Caption:Motion to approve resolution (with proposed changes) reestablishing a Downtown Advisory Panel (DAP). (Approved by Administrative Services Committee August 25, 2015) Background: Analysis: Financial Impact: Alternatives: Recommendation: Funds are Available in the Following Accounts: REVIEWED AND APPROVED BY: Commission Meeting Agenda 9/1/2015 2:00 PM 2015 Statistical Update Department:Clerk of Commission Caption:2015 Statistical Update of Non-Emergency Request for Service. (Requested by Mayor Hardie Davis, Jr.) Background: Analysis: Financial Impact: Alternatives: Recommendation: Funds are Available in the Following Accounts: REVIEWED AND APPROVED BY: Commission Meeting Agenda 9/1/2015 2:00 PM Update on Disparity Study Department:Clerk of Commission Caption:Update from the DBE Coordinator regarding the Disparity Study. (No recommendation from Administrative Services Committee August 25, 2015) Background: Analysis: Financial Impact: Alternatives: Recommendation: Funds are Available in the Following Accounts: REVIEWED AND APPROVED BY: Commission Meeting Agenda 9/1/2015 2:00 PM Gold Cross EMS Inc. Contract Termination Department:Clerk of Commission Caption:Motion to terminate the contract "Agreement for 911 Ambulance Response and Emergency Medical Services with Gold Cross EMS Inc." in accordance with Article VI of said contract. (No recommendation from Public Safety Committee August 25, 2015) Background: Analysis: Financial Impact: Alternatives: Recommendation: Funds are Available in the Following Accounts: REVIEWED AND APPROVED BY: Commission Meeting Agenda 9/1/2015 2:00 PM Paine College Event (Jazz Festival) Department:Clerk of Commission Caption:Motion to approve a request for the waiver of the cleanup/usage fees for a Jazz Festival for Paine College to be held at the Jessye Norman Amphitheater on September 13, 2015. (Approved by Finance Committee August 25, 2015) Background: Analysis: Financial Impact: Alternatives: Recommendation: Funds are Available in the Following Accounts: REVIEWED AND APPROVED BY: ______________________________ MASTER BOND RESOLUTION ______________________________ ADOPTED SEPTEMBER __, 2015 BY THE AUGUSTA-RICHMOND COUNTY COMMISSION ADOPTED SEPTEMBER__, 2015 BY THE AUGUSTA AVIATION COMMISSION AIRPORT REVENUE BONDS i TABLE OF CONTENTS ARTICLE I DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION .6 Section 101 Definitions................................................................................................................6 Section 102 Construction Of Certain Terms. .............................................................................22 Section 103 Table of Contents; Titles and Headings. ................................................................23 ARTICLE II THE BONDS ............................................................................................................24 Section 201 Authorization; Designation of Bonds. ...................................................................24 Section 202 Bond Details...........................................................................................................24 Section 203 Execution and Authentication of Bonds. ...............................................................26 Section 204 Registration of Bonds. ...........................................................................................27 Section 205 Transfer and Exchangeability of Bonds. ................................................................27 Section 206 Cancellation and Destruction of Bonds. ................................................................28 Section 207 Mutilated, Lost, Stolen, or Destroyed Bonds. ........................................................28 Section 208 Global Form; Securities Depository; Ownership of Series 2015 Bonds. ..............29 Section 209 Blank Bonds. ..........................................................................................................30 ARTICLE III REDEMPTION OF BONDS .................................................................................31 Section 301 Optional Redemption. ............................................................................................31 Section 302 Mandatory Sinking Fund Redemption. ..................................................................31 Section 303 Notice of Redemption. ...........................................................................................32 Section 304 Consolidated Government or Bond Registrar May Give Notice of Redemption. .33 Section 305 Effect of Notice of Redemption. ............................................................................33 Section 306 Conditional Redemptions.......................................................................................34 Section 307 Redemption Among Series. ...................................................................................34 Section 308 Selection of Bonds to be Redeemed. .....................................................................34 Section 309 Purchase in Open Market. ......................................................................................34 ARTICLE IV PLEDGED REVENUES AND FLOW OF FUNDS ............................................35 Section 401 Pledge of Revenues; Limited Obligations; Contract Liens....................................35 Section 402 Funds, Accounts, and Subaccounts. .......................................................................37 Section 403 Revenue Fund, PFC Revenue Fund, and Operation and Maintenance Fund.........39 Section 404 Debt Service Fund and Debt Service Reserve Fund. .............................................41 Section 405 Operation and Maintenance Reserve Fund. ...........................................................44 Section 406 Subordinate Securities Fund. .................................................................................45 Section 407 [Reserved]. .............................................................................................................45 Section 408 Capital Improvement Fund. ...................................................................................45 Section 409 Deposits and Security of Funds and Accounts. .....................................................46 Section 410 Investment of Funds and Accounts. .......................................................................46 Section 411 PFC Capital Fund. ..................................................................................................46 ii Section 412 Valuation of Investments. ......................................................................................46 Section 413 Application of Excess in Debt Service Fund. ........................................................46 Section 414 Disposition of Moneys After Payment of Bonds and Contracts. ...........................47 ARTICLE V ADDITIONAL BONDS; CONTRACTS; OTHER OBLIGATIONS .................48 Section 501 No Bonds Except as Permitted in the Bond Resolution. .......................................48 Section 502 Additional General Revenue Bonds.......................................................................48 Section 503 Subordinate Lien Bonds. ........................................................................................50 Section 504 Special Purpose Revenue Bonds; Additional Released Revenue Bonds; Other Airport Obligations; and PFC Stand-Alone Revenue Bonds. ................................52 Section 505 Released Revenues; Securitizations. ......................................................................53 Section 506 Special Purpose Facilities. .....................................................................................53 Section 507 Accession of Subordinate Lien Bonds and Related Contracts to Senior Lien Status. .....................................................................................................................53 Section 508 Adoption of Proceedings and Validation. ..............................................................54 Section 509 Proceedings Authorizing Additional Bonds. .........................................................54 Section 510 Applicability to Additional Bonds. ........................................................................54 Section 511 Financial Facilities. ................................................................................................55 Section 512 Other Obligations. ..................................................................................................55 ARTICLE VI GENERAL PROVISIONS ....................................................................................56 Section 601 Rate Covenant. .......................................................................................................56 Section 602 Maintenance of the Airport in Good Condition. ....................................................57 Section 603 Insurance. ...............................................................................................................57 Section 604 No Sale, Lease, or Encumbrance; Exceptions. ......................................................58 Section 605 No Impairment of Rights. ......................................................................................59 Section 606 Satisfaction of Liens. .............................................................................................59 Section 607 Enforcement of Charges and Connections. ............................................................59 Section 608 Payments. ...............................................................................................................60 Section 609 No Loss of Lien on Revenues. ...............................................................................60 Section 610 Annual Budget. ......................................................................................................60 Section 611 Rebate Fund and Tax Provisions. ..........................................................................60 Section 612 Uneconomic Facilities. ..........................................................................................62 ARTICLE VII EVENTS OF DEFAULT AND REMEDIES ......................................................63 Section 701 Definition of Events of Default..............................................................................63 Section 702 Remedies. ...............................................................................................................64 Section 703 Remedies Cumulative. ...........................................................................................65 Section 704 Waiver of Default. .................................................................................................66 Section 705 Application of Moneys After Default. ...................................................................66 Section 706 Rights of Credit Issuer. ..........................................................................................69 iii ARTICLE VIII BOND OWNERSHIP .........................................................................................70 Section 801 Manner of Evidencing Ownership of Bonds. ........................................................70 Section 802 Call of Meetings of Bondholders. ..........................................................................70 ARTICLE IX DEFEASANCE .......................................................................................................71 Section 901 Provision for Payment............................................................................................71 Section 902 Release of Pledge. ..................................................................................................71 ARTICLE X SUPPLEMENTAL RESOLUTIONS .....................................................................72 Section 1001 Supplemental Resolutions Not Requiring Consent of Bondholders. .....................72 Section 1002 Supplemental Resolutions Requiring Consent of Bondholders. ............................74 Section 1003 Notice of Supplemental Resolutions. .....................................................................75 Section 1004 Bond Opinion for Supplemental Resolutions. .......................................................75 ARTICLE XI SALE OF BONDS ..................................................................................................76 Section 1101 Application of Funds..............................................................................................76 Section 1102 Redemption of Refunded Bonds. ...........................................................................77 Section 1103 Direction to Paying Agent for the Refunded Bonds. .............................................77 Section 1104 Creation of 2005 Defeasance Account. .................................................................77 Section 1105 Costs of Issuance Fund ..........................................................................................78 ARTICLE XII CONSTRUCTION FUND....................................................................................79 Section 1201 Construction Fund. .................................................................................................79 Section 1202 Purposes of Payments. ...........................................................................................79 Section 1203 Documentation of Payments. .................................................................................79 Section 1204 Retention of Payment Documents. ........................................................................80 Section 1205 Funds Remaining on Completion of Projects. .......................................................80 ARTICLE XIII MISCELLANEOUS PROVISIONS ..................................................................81 Section 1301 Augusta Aviation Commission as Agent of Consolidated Government. ..............81 Section 1302 Authorization of Bond Purchase Agreement. ........................................................81 Section 1303 Offering Materials. .................................................................................................81 Section 1304 Public Hearing. ......................................................................................................82 Section 1305 Validation. ..............................................................................................................82 Section 1306 Approval of Series 2015 Paying Agent and Bond Registrar Agreement. ..............82 Section 1307 Approval of Series 2015 Custodian and Depositary Agreement. ..........................83 Section 1308 Waiver of Bond Audit. ...........................................................................................83 Section 1309 Severability. ...........................................................................................................83 Section 1310 Requests of Consolidated Government. .................................................................83 Section 1311 Mayor Pro-Tempore May Act. ..............................................................................84 Section 1312 Payments Due on Saturdays, Sundays, etc. ...........................................................84 iv Section 1313 Effective Date. .......................................................................................................84 Section 1314 Applicable Provisions of Law. ...............................................................................84 Section 1315 Repeal of Conflicting Resolutions and Resolutions. .............................................84 Section 1316 No Individual Responsibility of Members and Officers of Consolidated Government............................................................................................................84 Section 1317 Bond Resolution Constitutes a Contract. ...............................................................84 Exhibit A – Form of Series 2015A Bonds Exhibit B – Form of Series 2015B Bonds Exhibit C – Form of Redemption Notice for Series 2005A Bonds Exhibit D – Form of Redemption Notice for Series 2005B Bonds MASTER BOND RESOLUTION A MASTER BOND RESOLUTION PROVIDING FOR (1)THE ISSUANCE OF AUGUSTA, GEORGIA AIRPORT REVENUE BONDS TO REFINANCE THE OUTSTANDING (A) AUGUSTA, GEORGIA AIRPORT PASSENGER FACILITY CHARGE AND GENERAL REVENUE BONDS, SERIES 2005A (NON-AMT) IN THE ORIGINAL AGGREGATE PRINCIPAL AMOUNT OF $8,990,000 AND (B) AUGUSTA, GEORGIA AIRPORT GENERAL REVENUE BONDS, SERIES 2005C (AMT) IN THE ORIGINAL AGGREGATE PRINCIPAL AMOUNT OF $6,200,000, (2) VARIOUS SECURITY PROVISIONS FOR DIFFERENT TYPES OF SUCH AIRPORT REVENUE BONDS, (3) CONDITIONS REQUIRED FOR THE ISSUANCE OF SUCH AIRPORT REVENUE BONDS, (4) COVENANTS WITH RESPECT TO REVENUES ARISING FROM AIRPORT SERVICES AND FACILITIES, (5) COVENANTS WITH RESPECT TO THE RIGHTS AND REMEDIES OF THE HOLDERS OF AIRPORT REVENUE BONDS, (6) CREATION AND MAINTENANCE OF VARIOUS FUNDS AND THE DISPOSITION THEREOF, (7) THE RATIFICATION AND AUTHORIZATION OF THE PREPARATION, USE AND DISTRIBUTION OF A PRELIMINARY OFFICIAL STATEMENT AND A FINAL OFFICIAL STATEMENT IN CONNECTION WITH THE OFFER AND SALE OF SUCH BONDS, (8) THE APPROVAL OF A BOND PURCHASE AGREEMENT AND (9) OTHER RELATED MATTERS: WHEREAS, under and by virtue of the authority of the Constitution and laws of the State of Georgia, including specifically, but without limitation, Article 3 of Chapter 82 of Title 36 of the Official Code of Georgia Annotated, known as the “Revenue Bond Law,” as amended (the “Revenue Bond Law”), and an act of the General Assembly of the State of Georgia (Georgia Laws 1995 p. 3468 et seq.) (the “Act”), Augusta, Georgia (the “Consolidated Government”) is authorized to undertake the acquisition, construction, reconstruction and improvement of airports for its own use and for the use of the public; and WHEREAS, the Consolidated Government owns Augusta Regional Airport at Bush Field (the “Airport”); and WHEREAS, the Airport is operated for and on behalf of the Consolidated Government by the Augusta Aviation Commission, a board appointed by the Consolidated Government to manage and provide oversight for the Airport and all other property incidental thereto; and WHEREAS, pursuant to a Master Bond Resolution and the First Supplemental Bond Resolution adopted by the Augusta-Richmond County Commission on February 1, 2005 and by the Augusta Aviation Commission on January 20, 2005 and a Second Supplemental Bond Resolution adopted by the Augusta-Richmond County Commission and the Augusta Aviation Commission on February 17, 2005 (collectively, the “Prior Resolution”), the Consolidated Government issued and delivered $8,990,000 original aggregate principal amount of its Airport Passenger Facility Charge and General Revenue Bonds, Series 2005A (Non-AMT) (the “Series 2005A Bonds”), $4,415,000 original aggregate principal amount of its Airport Passenger Facility Charge and General Revenue Bonds, Series 2005B (AMT) (the “Series 2005B Bonds”), which Series 2005B Bonds have been paid in full, and $6,200,000 original aggregate principal amount 2 of its Airport General Revenue Bonds, Series 2005C (AMT) (the “Series 2005C Bonds” and, together with the Series 2005A Bonds, the “Series 2005 Bonds”); and WHEREAS, after a thorough and detailed review and upon the recommendation from Public Financial Management, Inc. (the “Financial Advisor”), the Consolidated Government has determined that due to present market conditions and in order to achieve debt service savings, the Consolidated Government at this time should refund all of the Series 2005A Bonds currently outstanding in the aggregate principal amount of $8,990,000 (the “Refunded 2005A Bonds”) and all of the Series 2005C Bonds currently outstanding in the aggregate principal amount of $6,090,000 (the “Refunded 2005C Bonds,” and together with the Refunded 2005A Bonds, the “Refunded Bonds”); and WHEREAS, the Financial Advisor has further recommended, and the Consolidated Government has concurred, that such refunding of the Refunded Bonds should be accomplished by making due and legal provision for the redemption on October 2, 2015 of the Refunded Bonds by paying the principal amount thereof and the interest to accrue thereon until such date of redemption and the payment of all expenses necessary to accomplish the foregoing; and WHEREAS, the Revenue Bond Law authorizes the Consolidated Government to issue revenue bonds at any time to refund or refinance, in whole or in part, all outstanding bonds against any existing undertaking and to issue revenue bonds at any time payable from all or any part of the revenues derived from the Airport; and WHEREAS, the Consolidated Government has determined that it is in the best interest of the citizens of the area to refund the Refunded Bonds and that the most feasible means of (i) refunding the Refunded Bonds, (iii) funding a debt service reserve account or accounts for the Series 2015 Bonds (hereafter defined) and (iv) paying the costs of issuance of the Series 2015 Bonds is through the issuance of its revenue bonds on the terms described in this Master Bond Resolution designated as “Augusta, Georgia Airport General Revenue Refunding Bonds, Series 2015A (Non-AMT)” (the “Series 2015A Bonds”) in an aggregate principal amount of $_____________ and “Augusta, Georgia Airport General Revenue Refunding Bonds, Series 2015B (AMT) in an aggregate principal amount of $____________ (the “Series 2015B Bonds,” and together with the Series 2015A Bonds, the “Series 2015 Bonds”); and WHEREAS, a portion of the proceeds derived from the sale of the Series 2015 Bonds, together with other available moneys, will be deposited in trust, simultaneously with the issuance and delivery of the Series 2015 Bonds, into a special segregated account designated as the “2005 Defeasance Account” with U.S. Bank National Association, Atlanta, Georgia, as successor to SunTrust Bank as bond registrar and paying agent for the Series 2005 Bonds (the “2005 Paying Agent”), in an amount sufficient without investment to pay the principal of and interest on the Refunded Bonds to the redemption date, all as hereinafter provided; and WHEREAS, Raymond James & Associates, Inc. (the “Underwriter”) has offered to purchase the Series 2015 Bonds pursuant to the terms contained in a Bond Purchase Agreement, dated September 1, 2015 (the “Bond Purchase Agreement”), between the Underwriter and the Consolidated Government; and 3 WHEREAS, it is further proposed that the Consolidated Government and the Augusta Aviation Commission should appoint a paying agent and registrar and various fund depositories for the Series 2015 Bonds; and WHEREAS, it is necessary for the Consolidated Government to authorize the execution and delivery of a bond registrar and paying agent agreement and a custodian agreement between the Consolidated Government, the Augusta Aviation Commission and U.S. Bank National Association; and WHEREAS, the Consolidated Government and the Augusta Aviation Commission must now ratify the preparation, use and distribution of the preliminary official statement, dated August __, 2015 (the “Preliminary Official Statement”) pertaining to the Series 2015 Bonds and authorize the preparation, use and distribution of the final official statement pertaining to the Series 2015 Bonds and the validation, execution, authentication, issuance, sale and delivery of the Series 2015 Bonds; and WHEREAS, to ensure compliance with Securities and Exchange Commission Rule 15c2-12, it is necessary and desirable to authorize the execution, delivery and performance by the Consolidated Government of a continuing disclosure certificate, dated the date hereof with respect to the Series 2015 Bonds; and WHEREAS, each series of Bonds will be issued in accordance with the initial provisions for such series in this Master Bond Resolution, including the conditions required for the issuance thereof, and except with respect to the Series 2015 Bonds, pursuant to a bond resolution supplementing this Master Bond Resolution (each a “Supplemental Bond Resolution”) providing for the particular terms of such Bonds. NOW, THEREFORE, BE IT RESOLVED by the Augusta-Richmond County Commission: IN CONSIDERATION of the purchase and acceptance of the Bonds from time to time, the provisions of this Master Bond Resolution shall be deemed to be and shall constitute a contract between the Consolidated Government and the holders from time to time of the Bonds and, upon fulfillment of the requirements specified herein, the parties to Contracts and certain other agreements secured by a lien on Pledged Revenues (hereafter defined), and the covenants and agreements herein set forth to be performed by or on behalf of the Consolidated Government shall be for the equal benefit, protection and security of the holders of any and all of the Bonds so issued or to be issued and any and all of the parties to Contracts and such other agreements (such holders and parties, together, the “Beneficiaries”), without preference, priority or distinction as to lien or otherwise except as provided herein or in any Supplemental Bond Resolution; and nothing herein expressed or implied is intended or shall be construed to confer upon or to give to any person or corporation, other than the Consolidated Government or the Beneficiaries, any right, remedy or claim under or by reason of this Master Bond Resolution or any covenant, condition or stipulation hereof; and all the covenants, stipulations, promises and agreements herein contained by or on behalf of the Consolidated Government shall be for the sole and exclusive benefit of the Consolidated Government and the Beneficiaries; 4 AND FURTHER, that the Consolidated Government, in order to secure the payment of the principal of, premium, if any, and interest on the Bonds according to their tenor and effect and to secure the performance and observance by the Consolidated Government of all of the covenants expressed herein, in the Bonds and in the Contracts, pursuant to the Revenue Bond Law, does hereby assign, pledge, charge and grant a lien and security interest in the following to the Beneficiaries and their successors and assigns forever, to secure the performance of the obligations of the Consolidated Government herein set forth (collectively, the “Pledged Revenues”): (1) All right, title and interest of the Consolidated Government in and to all Revenues (hereafter defined) arising from the Airport whether received by the Consolidated Government directly or indirectly, through the Augusta Aviation Commission after the payment of Expenses of Operation and Maintenance (hereafter defined); (2) All right, title and interest of the Consolidated Government in and to all monies and securities from time to time held under the terms of this Master Bond Resolution or any Supplemental Bond Resolution, in the funds hereunder or transferred to the Consolidated Government hereunder or pursuant hereto (excluding the Rebate Fund); and (3) Any right or interest from time to time hereafter by delivery or by right of any kind granted, bargained, sold, alienated, demised, released, conveyed, assigned, transferred, mortgaged, pledged, hypothecated or otherwise subjected hereto, as and for additional security herewith, by the Consolidated Government or any other person on the Consolidated Government’s behalf or with the Consolidated Government’s written consent to the extent permitted by law; PROVIDED, that the Revenues of each category hereinafter described shall be pledged to and secure only those Bonds or Contracts that are specifically designated as being so secured by this Master Bond Resolution or in the Supplemental Resolution authorizing same; AND SUCH REVENUES as and when received by the Consolidated Government, or by the Augusta Aviation Commission on the Consolidated Government’s behalf, and any other rights, interests, moneys and securities pledged, shall immediately be subject to the lien and pledge of this Master Bond Resolution without any physical delivery thereof or further act in the lien and pledge and the obligation to perform the contractual provisions hereby made shall be valid and binding as against all parties having claims of any kind in tort, contract or otherwise against the Consolidated Government, without regard to whether such parties have notice thereof; AND UPON the terms herein set forth for the equal and proportionate benefit, security and protection of all present and future Beneficiaries from time to time secured by this Master Bond Resolution or any Supplemental Bond Resolution without privilege, priority or distinction as to the lien or otherwise of any of the Bonds or Contracts over any of the other Bonds or Contracts except in the case of funds and accounts held hereunder for the benefit of particular holders of the Bonds or holders of particular series of Bonds or as otherwise described herein; 5 PROVIDED, HOWEVER, that if the Consolidated Government, its successors or assigns, shall well and truly pay, or cause to be paid, the principal of, premium, if any, and interest on the Bonds and obligations on Contracts due or to become due thereon, at the time and in the manner set forth in the Bonds and Contracts according to the true intent and meaning thereof, or shall provide, as permitted hereby, for the payment thereof, and shall well and truly cause to be kept, performed and observed all of its covenants and conditions pursuant to the terms of this Master Bond Resolution and any Supplemental Bond Resolution, then upon the final payment thereof this Master Bond Resolution and the rights hereby granted shall cease, determine and be void, except to the extent specifically provided herein; AND THIS MASTER BOND RESOLUTION FURTHER WITNESSETH, and it is expressly declared, that the Series 2015 Bonds and all other Bonds issued and secured hereunder and all Contracts executed and secured pursuant hereto are to be issued, executed, authenticated and delivered, and all said property, rights and interest, including, without limitation, the revenues derived by the Consolidated Government from the operation of the Airport and any other amounts hereby assigned and pledged, are to be dealt with and disposed of under, upon and subject to the terms, conditions, stipulations, covenants, agreements, trusts, uses and purposes as herein expressed, and the Consolidated Government has agreed and covenanted, and does hereby agree and covenant with the Beneficiaries as follows: 6 ARTICLE I DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION Section 101 Definitions. The following terms shall have the meanings specified below, unless the context clearly requires otherwise: “Accreted Value” means, with respect to each Capital Appreciation Bond, the principal amount of such Capital Appreciation Bond, plus, on the date of calculation, the interest accrued thereon to such date compounded at the interest rate thereof on each compounding date contained in such Capital Appreciation Bond, and, with respect to any calculation on a date other than a compounding date, the Accreted Value means the Accreted Value as of the preceding compounding date plus interest on such amount from such compounding date to the date of calculation at a rate equal to the interest rate on such Capital Appreciation Bond. “Additional Bonds” means General Revenue Bonds, other than the Series 2015 Bonds, issued pursuant to Section 502. The term “Additional Bonds” excludes Subordinate Lien Bonds, PFC Stand-Alone Revenue Bonds, Special Purpose Bonds and Released Revenue Bonds. “Additional Interest” means, for any period during which any Bank Bonds are owned by a Liquidity Facility Issuer pursuant to a Liquidity Facility or Liquidity Facility Agreement, the amount of interest accrued on such Bank Bonds at the Bank Bond Rate less the amount of interest that would have accrued during such period on an equal principal amount of Bonds at the Bond Rate. “Additional PFC Stand-Alone Bonds” means those PFC Stand-Alone Revenue Bonds issued after the first issuance of a series of PFC Stand-Alone Revenue Bonds, as described in Section 504(d). “Additional Released Revenue Bonds” means those Released Revenue Bonds issued after the first issuance of a series of Released Revenue Bonds, as described in Section 504(c). “Additional Special Purpose Revenue Bonds” means those Special Purpose Revenue Bonds issued after the first issuance of a series of Special Purpose Revenue Bonds, as described in Section 504(a). “Airport” means Augusta Regional Airport at Bush Field and all related improvements and facilities now in existence and as hereafter acquired, added, extended, improved and equipped less any portion thereof sold or otherwise disposed of pursuant to Section 604 and excluding those airport facilities now known as Daniel Field. “Airport Consultant” means a firm of consultants experienced in the planning, management or financial feasibility of airports or airport-related projects and having a nationally recognized reputation for such work, which has been retained by the Consolidated Government or whose selection has been approved by the Consolidated Government. 7 “Airport Director” means the chief administrative officer of the Airport or such person performing such function at the Airport. “Airport Finance Officer” means the director of finance of the Airport or such person performing such function at the Airport. “Airport Purpose” means any action or undertaking by the Consolidated Government reasonably related to the development and promotion of the Airport as a destination for air commerce or as industrial or commercial sites or related to the development and promotion of air transportation and commerce by air. “Amount Available to Pay Debt Service” with respect to General Revenue Bonds equals Net General Revenues plus Other Available Moneys and Pledged PFC Revenues pledged to the payment thereof. “Annual Budget” means the annual budget of the Augusta Aviation Commission (which shall specify all costs, obligations, and expenses properly allocable to the Airport), as amended or supplemented in accordance with established procedures of the Consolidated Government, adopted or in effect for a particular Fiscal Year. “Annual Debt Service Requirement” means the Debt Service Requirement in each year that the Bonds are outstanding. “Attesting Officer” means the individual presently holding the office of Clerk of Commission of the Consolidated Government and any successor who might hereafter hold such office, and any individual, body, or authority to whom or which may hereafter be delegated by law the duties, powers, authority, obligations, or liabilities of such office, and includes any deputy clerk, if one is so appointed. “Augusta Aviation Commission” means the Consolidated Government’s Augusta Aviation Commission or any successor agency, department or branch of the Consolidated Government having responsibility for the operation of the Airport. “Authorized Denominations” means (a) with respect to the Series 2015 Bonds, $5,000 and any integral multiple thereof and (b) with respect to future series of Bonds, the authorized denominations specified in the Supplemental Bond Resolution authorizing such Bonds. “Average Annual Debt Service Requirement” means, with respect to any series of Bonds, the sum of the Debt Service Requirement for each year in which such Bonds will be Outstanding divided by the number of years that such Bonds will be Outstanding. “Balloon Bonds” means any series of Bonds 25% or more of the original principal amount of which (i) is due in any 12-month period or (ii) may, at the option of the Bondholders, be required to be redeemed, prepaid, purchased directly or indirectly by the Consolidated Government, or otherwise paid in any 12-month period; provided that, in calculating the principal amount of such Bonds due or required to be redeemed, prepaid, purchased, or otherwise paid in any 12-month period, such principal amount shall be reduced to the extent that 8 all or any portion of such amount is required to be redeemed or amortized prior to such 12-month period. “Balloon Date” means any Principal Maturity Date or Put Date on which more than 25% of the original principal amount of related Balloon Bonds mature or are subject to mandatory redemption or could, at the option of the Bondholders, be required to be redeemed, prepaid, purchased directly or indirectly by the Consolidated Government, or otherwise paid. “Balloon Year” means any 12-month period in which more than 25 percent of the original principal amount of related Balloon Bonds mature or are subject to a Put Date or mandatory redemption. “Bank Bond” means any Bond purchased and held by a Liquidity Facility Issuer pursuant to a Liquidity Facility Agreement. A Bond shall be deemed a Bank Bond only for the actual period during which such Bond is owned by a Liquidity Facility Issuer pursuant to a Liquidity Facility Agreement. “Bank Bond Rate” means the rate of interest payable on Bank Bonds, as may be provided in a Liquidity Facility or Liquidity Facility Agreement. “Beneficial Owner” means the owner of a beneficial interest in Bonds registered in Book-Entry Form. “Beneficiaries” means the holders of any Bonds and the parties to Contracts. “Bond Counsel” means any firm of nationally recognized bond counsel experienced in matters relating to tax-exempt financing retained by the Consolidated Government. “Bond Rate” means the rate of interest per annum payable on specified Bonds other than Bank Bonds. “Bondholder” or “holder” means the registered owner of one or more Bonds. “Bond Register” means the registration books maintained and to be maintained by the Bond Registrar. “Bond Registrar” means any bank or trust company designated as such by the Consolidated Government in the Bond Resolution with respect to any of the Bonds. Such Bond Registrar shall perform the duties required of the Bond Registrar in the Bond Resolution. U.S. Bank National Association is hereby designated as Bond Registrar for the Series 2015 Bonds. “Bond Resolution” means this Master Bond Resolution as it may from time to time be modified, supplemented, or amended by Supplemental Resolutions. “Bond Year” means the 12-month period ending on January 1 of each year. 9 “Bonds” means any revenue bonds authorized by and authenticated and delivered pursuant to the Bond Resolution and constituting Senior Lien Bonds, including the Series 2015 Bonds and any Additional Bonds. “Book-Entry Form” or “Book-Entry System” shall mean, with respect to the Bonds, a form or system, as applicable, under which (i) the ownership of beneficial interests in the Bonds and bond service charges may be transferred only through book-entry and (ii) physical Bonds in fully registered form are registered only in the name of a Securities Depository or its nominee as holder, with physical Bonds in the custody of a Securities Depository. “Capital Appreciation Bonds” means Bonds that bear interest which is calculated based on periodic compounding, payable only at maturity or earlier redemption. “Capital Improvement Account” means the Capital Improvement Account within the Capital Improvement Fund established in Article IV. “Capital Improvement Fund” means the Capital Improvement Fund established in Article IV. “Capitalized Interest Account” means the Capitalized Interest Account within the Construction Fund established in Article IV. The term “category” or “category of Revenues” means an objectively definable portion of Revenues related to a particular type of service, activity or facility, including the categories of General Revenues, PFC Revenues, Released Revenues and Special Purpose Revenues and subcategories within such categories as the context may require. A “category of Revenues,” unless otherwise determined by the Consolidated Government, includes Investment Earnings or other moneys in funds or amounts derived from such portion of Revenues. “Code” means the Internal Revenue Code of 1986, as amended, and any applicable regulations thereunder. “Commitment,” when used with respect to Balloon Bonds, means a binding written commitment from a financial institution, surety, or insurance company to refinance such Bonds on or prior to any Balloon Date thereof, including without limitation any Liquidity Facility for such Bonds. “Conditional Redemption” means an optional redemption described in Section 306. “Consolidated Government” means Augusta, Georgia, a municipal corporation and a county created and existing under the laws of the State. “Consolidated Government Finance Director” means the director of finance of the Consolidated Government or such person performing such function with the Consolidated Government. “Construction Fund” means the Augusta, Georgia Airport Construction Fund established in Article IV. 10 “Contracts” means all Financial Facility Agreements, including any related Reimbursement Obligations, all agreements with respect to Reserve Account Credit Facilities, including any related Reimbursement Obligations, and any agreement made pursuant to Section 505(b). “Contract Payments Account” means the Contract Payments Account within the Debt Service Fund. “Costs,” with respect to any Project, means the total cost, paid or incurred, to study, plan, design, finance, acquire, construct, reconstruct, install or otherwise implement the Project, including improvements to another Project, and shall include, but shall not be limited to, the following costs and expenses relating to such Project and the reimbursement to the Consolidated Government for any such items previously paid by the Consolidated Government: (i) the cost of all lands, real or personal properties, rights, easements and franchises acquired; (ii) the cost of all financing charges and interest prior to and during construction and for up to six months after completion of construction (or such longer period as may be permitted by the Revenue Bond Law); (iii) the cost of the acquisition, construction, reconstruction, implementation or installation of the Project; (iv) the cost of engineering, architectural, planning, development, and supervisory services, fiscal agents’ and legal expenses, plans and specifications, and other expenses necessary or incident to determining the feasibility or practicability of the Project, administrative expenses, and such other expenses as may be necessary or incident to any financing with Bond proceeds; (v) the cost of placing the Project in operation; (vi) the cost of condemnation of property necessary for construction implementation and operation; (vii) the costs of issuing any Bonds to finance the Project or to refund any Bonds; and (viii) any other costs which may be incident to the Project. “Credit Facility” means any letter of credit, insurance policy, guaranty, surety bond, or similar obligation, arrangement, or instrument issued by a bank, insurance company, or other financial institution that is used by the Consolidated Government to enhance the Consolidated Government’s credit by assuring owners of any of the Bonds that principal of and interest on such Bonds will be paid promptly when due. The term “Credit Facility” shall not include a Reserve Account Credit Facility. 11 “Credit Facility Agreement” means an agreement between the Consolidated Government and a Credit Issuer pursuant to which the Credit Issuer issues a Credit Facility and may include a related Reimbursement Obligation. The term “Credit Facility Agreement” shall not include an agreement with respect to a Reserve Account Credit Facility. “Credit Issuer” means any issuer of a Credit Facility then in effect for all or part of the Bonds. The term “Credit Issuer” shall not include any Reserve Account Credit Facility Provider. Whenever in the Bond Resolution the consent of the Credit Issuer is required, such consent shall only be required from the Credit Issuer whose Credit Facility is issued with respect to the Bonds for which the consent is required. “Debt Service Fund” means the Augusta, Georgia Airport Debt Service Fund established in Article IV. “Debt Service Requirement” means the total principal and interest coming due, whether at maturity or upon mandatory redemption, in any specified periods. For purposes of calculating the Debt Service Requirement, the following assumptions shall be used: (a) If any Bonds Outstanding or proposed to be issued shall bear interest at a Variable Rate, the interest coming due in any specified future period shall be determined as if the Variable Rate in effect at all times during such future period equaled (1) the average of the actual Variable Rates that were in effect (weighted according to the length of the period during which each such Variable Rate was in effect) for the most recent twelve-month period immediately preceding the date of calculation for which such information is available (or shorter period if such information is not available for a twelve-month period), or (2) if no such Bonds are then Outstanding, the thirty year Revenue Bond Index most recently published in The Bond Buyer or if the Revenue Bond Index is no longer available, the current average annual long-term fixed rate of interest on securities of similar quality and having a similar maturity date as certified by a Financial Advisor. (b) If any Capital Appreciation Bonds are Outstanding or proposed to be issued, the total principal and interest coming due in any specified period shall be determined, with respect to such Capital Appreciation Bonds, by Series Resolution of the Consolidated Government authorizing such Capital Appreciation Bonds. (c) With respect to any Bonds secured by a Financial Facility, Debt Service Requirement shall include (i) any commission or commitment fee obligations with respect to such Financial Facility, (ii) the outstanding amount of any Reimbursement Obligation owed to the relevant Financial Facility Issuer and interest thereon, (iii) any Additional Interest owed on Bank Bonds to a Liquidity Facility Issuer, and (iv) any remarketing agent fees. (d) The principal of and interest on Bonds shall be excluded from the determination of Debt Service Requirement to the extent that the same were or are expected to be paid with amounts on deposit on the date of calculation (or Bond proceeds 12 to be deposited on the date of issuance of proposed Bonds) in the Capitalized Interest Account, the Debt Service Fund or a similar fund for Subordinate Lien Bonds. (e) For the purpose of calculating the Debt Service Requirement on Balloon Bonds which (1) which are subject to a Commitment or (2) do not have a Balloon Year commencing within 12 months from the date of calculation, such Bonds shall be assumed to be amortized in substantially equal annual amounts to be paid for principal and interest over an assumed amortization period of 20 years at an assumed interest rate (which shall be the interest rate certified by a Financial Advisor to be the interest rate at which the Consolidated Government could reasonably expect to borrow the same amount by issuing Bonds with the same priority of lien as such Balloon Bonds and with a 20-year term); provided, however, that if the maturity of such bonds is in excess of 20 years from the date of issuance, then such Bonds shall be assumed to be amortized in substantially equal annual amounts to be paid for principal and interest over an assumed amortization period of years equal to the number of years from the first full Fiscal Year after the date of completion of the related Project to maturity and at the interest rate applicable to such Bonds. (f) For the purpose of calculating the Debt Service Requirement on Balloon Bonds (1) which are not subject to a Commitment and (2) which have a Balloon Date within 12 months from the date of calculation, the principal payable on such Bonds on the Balloon Date shall be calculated as if paid on the Balloon Date. “Debt Service Reserve Fund” means the Augusta, Georgia Airport Debt Service Reserve Fund established in Article IV. “Debt Service Reserve Requirement” means, (a) with respect to each series of the Series 2015 Bonds, the lesser of (i) 125 percent of the Average Annual Debt Service Requirement, (ii) the Maximum Annual Debt Service Requirement, and (iii) 10 percent of the stated principal amount and (b) with respect to Additional Bonds, an amount determined from time to time by the Consolidated Government as a reasonable reserve, if any, for the payment of principal of and interest on Bonds for which a subaccount in the Debt Service Reserve Fund is created or added to pursuant to a Supplemental Bond Resolution. “Depository” means the depository or custodian of each fund established under the Bond Resolution, and any successor depository or custodian of such fund hereafter designated by the Consolidated Government and the Augusta Aviation Commission from time to time pursuant to a Supplemental Resolution. “DTC” means The Depository Trust Company, New York, New York, or its nominee, or its successors and assigns, or any other depository performing similar functions under the Bond Resolution. “Event of Default” means any of the events defined as such in Article VII. “Expenses of Operation and Maintenance” means all expenses reasonably incurred in connection with the operation, maintenance, repair, ordinary replacement and ordinary reconstruction of the Airport, including without limitation salaries, wages, the cost of materials, 13 services and supplies, rentals of leased property, if any, management fees, utility costs, the cost of audits, Paying Agent’s and Bond Registrar’s fees, payment of premiums for insurance required by the Bond Resolution and other insurance which the Consolidated Government deems prudent to carry on the Airport and its operations and personnel, and, generally, all expenses, exclusive of depreciation or amortization, which are properly allocable to operation and maintenance; however, only such expenses as are reasonably necessary or desirable for the proper operation and maintenance of the Airport shall be included. “Expenses of Operation and Maintenance” also includes the Consolidated Government’s obligations under any contract with any other political subdivision or public agency or authority of one or more political subdivisions pursuant to which the Consolidated Government undertakes to make payments measured by the expenses of operating and maintaining any facility which constitutes part of the Airport and which is owned or operated in part by the Consolidated Government and in part by others. “Expenses of Operation and Maintenance” does not include any payments on Bonds, Contracts (including continuing commissions or commitment fees or amounts equivalent to principal on related Bonds) or Other Airport Obligations. “Expenses of Operation and Maintenance” are to be calculated on a cash basis rather than on an accrual basis. To the extent Expenses of Operation and Maintenance are allocable to particular related facilities, a lien on the portion of Revenues related thereto shall not provide a claim on such Revenues ahead of the use thereof for payment of such allocable Expenses of Operation and Maintenance. “Financial Advisor” means an investment banking or financial advisory firm, commercial bank, or any other Person who or which is a registered municipal advisor under the Dodd-Frank Wall Street Reform and Consumer Protection Act and is appointed by the Consolidated Government for the purpose of passing on questions relating to the availability and terms of specified types of Bonds and is actively engaged in and, in the good faith opinion of the Consolidated Government, has a favorable reputation for skill and experience in providing financial advisory services in respect of similar types of securities. “Financial Facility” means a Credit Facility or a Liquidity Facility. “Financial Facility Agreement” means a Credit Facility Agreement or a Liquidity Facility Agreement. “Financial Facility Issuer” means a Credit Issuer or a Liquidity Facility Issuer. “Fiscal Year” means the 12-month period used by the Consolidated Government for its general accounting purposes, as it may be changed from time to time. The Fiscal Year at the time this Master Bond Resolution was adopted began on January 1 and ended on December 31 of the same year. “Fitch” means Fitch Inc., or, if such corporation is dissolved or liquidated or otherwise ceases to perform securities rating services, such other nationally recognized securities rating agency as may be designated in writing by the Consolidated Government. The notice address of Fitch is One State Street Plaza, New York, New York 10004. “Forecast Period” means a period of three consecutive Fiscal Years following the Fiscal Year in which the Airport Director estimates a substantial portion of the Project or Projects, the 14 Costs of which are to be financed by the issuance of Additional Bonds, will be placed in continuous service or commercial operation. “Funds” means each of the separate funds and accounts created pursuant to Article IV. “General Revenue Account” means the General Revenue Account within the Revenue Fund established in Article IV. “General Revenue Bonds” means Bonds secured by a Senior Lien on General Revenues, including the Series 2015 Bonds. “General Revenue Facilities” means the Airport, including PFC Facilities, but not including Special Purpose Facilities and Released Revenue Facilities. “General Revenues” means all revenues, income, receipts and money derived from the ownership and operation of the Airport, including without limitation all rentals, charges, landing fees, use charges and concession revenue received by or on behalf of the Consolidated Government from the ownership and operation of the Airport, Investment Earnings and all other income received from, and gain from, securities and other investments and amounts earned on amounts deposited in funds and accounts under the Bond Resolution or otherwise maintained with respect to the Airport. “General Revenues” excludes (i) all gifts, grants, reimbursements or payments received from governmental units or public agencies for the benefit of the Airport that are (y) not restricted by law or the payor to application for a particular purpose other than payment of certain Bonds or Contracts and (z) otherwise lawfully available for payment of Bonds or Contracts; (ii) PFC Revenues, Special Purpose Revenues and Released Revenues; and (iii) proceeds of insurance so long as such proceeds are to be paid to a party separate from the Consolidated Government in respect of a liability or are to be used by the Consolidated Government to repair or replace portions of the Airport. “General Revenues” are to be calculated on a cash basis rather than on an accrual basis. “Governing Body” means the Augusta-Richmond County Commission and any predecessor or successor in office to such present body. “Government Loans” means loans to the Consolidated Government by the government of the United States or the State, or by any department, authority, or agency of either, for the purpose of acquiring, constructing, reconstructing, improving, bettering, or extending any part of the Airport. “Government Obligations” means (a) obligations of the United States and of its agencies and instrumentalities, (b) obligations fully insured or guaranteed by the United States government or United States government agency or (c) obligations of any corporation of the United States government (including any obligations described in (a), (b) or (c) issued or held in book-entry form on the books of the Department of the Treasury of the United States of America). “Independent Certified Public Accountant” means a firm of certified public accountants which are “independent” as that term is defined in Rule 101 and related interpretations of the Code of Professional Ethics of the American Institute of Certified Public 15 Accountants, of recognized standing, and which does not devote its full time to the Consolidated Government (but which may be regularly retained by the Consolidated Government). “Interest Account” means the Interest Account within the Debt Service Fund established in Article IV. “Interest Payment Date” means, for the Series 2015 Bonds, each January 1 and July 1, commencing January 1, 2016, through the final maturity of the Series 2015 Bonds. “Investment Earnings” means all interest received on and profits derived from investments made with Revenues or any other moneys in the funds and accounts established under Article IV or Article XII. “Kroll” means Kroll Bond Rating Agency, Inc. or, if such corporation is dissolved or liquidated or otherwise ceases to perform securities rating services, such other nationally recognized securities rating agency as may be designated in writing by the Consolidated Government. The notice address of Kroll is 845 Third Avenue, Fourth Floor, New York, New York 10022. “Liquidity Facility” means any letter of credit, standby bond purchase agreement, line of credit, revolving credit agreement, or similar obligation, arrangement, or instrument issued by a bank, insurance company, or other financial institution that is used by the Consolidated Government to perform one or more of the following tasks: (i) providing liquidity for the owners of Bonds through undertaking to cause Bonds to be bought from the owners thereof when submitted pursuant to an arrangement prescribed by a Supplemental Bond Resolution; or (ii) remarketing any Bonds so submitted to the Liquidity Facility Issuer (whether or not the same Liquidity Facility Issuer is remarketing the Bonds). “Liquidity Facility Agreement” means an agreement between the Consolidated Government and a Liquidity Facility Issuer pursuant to which the Liquidity Facility Issuer issues a Liquidity Facility and may include the promissory note or other instrument evidencing the Consolidated Government’s obligations to a Liquidity Facility Issuer pursuant to a Liquidity Facility Agreement. “Liquidity Facility Issuer” means any issuer of a Liquidity Facility then in effect for all or part of the Bonds. “Master Bond Resolution” means this Master Bond Resolution as adopted by the Augusta Aviation Commission and by the Governing Body. “Maximum Annual Debt Service Requirement” means the largest aggregate Debt Service Requirement of Bonds secured by the applicable category of Revenues during any Bond Year beginning after the date of calculation. “Mayor” means the individual presently holding the office of Mayor of the Consolidated Government and any successor who might hereafter hold such office, and any individual, body, or authority to whom or which may hereafter be delegated by law the duties, powers, authority, obligations, or liabilities of such office. 16 “Moody’s” means Moody’s Investors Service, Inc. or, if such corporation is dissolved or liquidated or otherwise ceases to perform securities rating services, such other nationally recognized securities rating agency as may be designated in writing by the Consolidated Government. The notice address of Moody’s is 250 Greenwich Street, 7 World Trade Center, 23rd Floor, New York, New York 10007. “Net General Revenues” means General Revenues net of related Expenses of Operation and Maintenance. “Net Released Revenues” means Released Revenues net of related Expenses of Operations and Maintenance. “Net Special Purpose Revenues” means Special Purpose Revenues net of related Expenses of Operations and Maintenance. “Operation and Maintenance Fund” means the Augusta, Georgia Airport Operation and Maintenance Fund established in Article IV. “Operation and Maintenance Reserve Fund” means the Augusta, Georgia Airport Operation and Maintenance Reserve Fund established in Article IV. “Other Airport Obligations” means obligations of any kind, including but not limited to, Government Loans, revenue bonds, interest rate swap and other hedge contracts, capital leases, installment purchase agreements, or notes (but excluding Bonds and Contracts), incurred or issued by the Consolidated Government to finance or refinance the cost of acquiring, constructing, reconstructing, improving, bettering, or extending any part of the Airport or any other cost relating to the Airport, which do not have a lien on any category of Revenues, except pursuant to Section 502(c) or 503(b)(10). “Other Available Moneys” means, for any Fiscal Year, the amount of unencumbered funds on deposit or anticipated to be on deposit, as the case may be, on the first day of such Fiscal Year in the Revenue Credit Account. The amount of such funds treated as “Other Available Moneys” shall not exceed 25 percent of the Debt Service Requirement of General Revenue Bonds for any Fiscal Year. “Outstanding” means, when used in reference to the Bonds, all Bonds that have been duly authenticated and delivered under the Bond Resolution, with the exception of (a) Bonds in lieu of which other Bonds have been issued to replace lost, mutilated, stolen, or destroyed obligations, (b) Bonds surrendered by the owners in exchange for other Bonds under Section 207 or Section 304, and (c) Bonds for the payment of which provision has been made in accordance with Article IX. In determining the amount of Capital Appreciation Bonds Outstanding under the Bond Resolution, the Accreted Value of such Capital Appreciation Bonds at the time of determination shall be used. The term “parity” or “parity secured” when applied to two or more series of Bonds means each such series of Bonds has a lien of equal rank on the same category of Revenues; provided the existence of an additional lien on a different category of Revenues securing one or more series of such Bonds does not prevent such one or more series from being “parity secured” 17 with the other Bonds with respect to the category of Revenues on which they have liens of equal rank. “Participants” means those financial institutions for which the Securities Depository effects book-entry transfers and pledges of securities deposited with the Securities Depository in the Book-Entry System, as such listing exists at the time of such reference. “Paying Agent” means any bank or trust company authorized by the Consolidated Government in the Bond Resolution to pay the principal of, premium, if any, or interest on any Bonds on behalf of the Consolidated Government. Such Paying Agent shall perform the duties required of the Paying Agent in the Bond Resolution. “Permitted Investments” means obligations in which the Consolidated Government is permitted to invest moneys of the Consolidated Government pursuant to applicable law. Obligations in which the Consolidated Government is permitted to invest proceeds of Bonds are described, as of the date of adoption of this Master Bond Resolution, in Section 36-82-7 of the Official Code of Georgia Annotated. “Person” or “person” means any individual, corporation, partnership, limited liability company, joint venture, association, joint stock company, trust, unincorporated organization, body, authority, government, or agency or political subdivision thereof. “PFC Act” means the Aviation Safety and Capacity Government Expansion Act of 1990, Pub. L. 101508, Title IX, Subtitle B, §§ 9110 and 9111, as amended from time to time. “PFC Capital Fund” means the Augusta, Georgia PFC Capital Fund established in Article IV. “PFC Facilities” means facilities for the construction and implementation of which the Airport has received approval to expend PFC Revenues under the PFC Act, including facilities financed with PFC Stand-Alone Revenue Bonds. “PFC Regulations” means Part 158 of the Federal Aviation Regulations (14 CFR Part 158), as amended from time to time, and any other regulation issued with respect to the PFC Act. “PFC Stand-Alone Revenue Bonds” means Bonds solely secured by a Senior Lien on PFC Revenues. “PFC Revenue Fund” means the PFC Revenue Fund established in Article IV. “PFC Revenues” means all income and revenue received by or required to be remitted to the Augusta Aviation Commission from the passenger facility charges (“PFCs”) imposed by the Consolidated Government pursuant to the PFC Act and the PFC Regulations, including any interest earned after such charges have been remitted to the Augusta Aviation Commission as provided in the PFC Regulations, all of which may be pledged pursuant to the PFC Act and PFC Regulations § 158.13; provided, the term “PFC Revenues” also includes interest or other gain in any of the accounts or subaccounts created herein or in any Supplemental Resolution resulting 18 from any investments and reinvestments of PFC Revenues. If at any time pursuant to the PFC Act and PFC Regulations, there is permitted to be paid Expenses of Operation and Maintenance for PFC Facilities from passenger facility charges, “PFC Revenues” shall mean PFC Revenues less Expenses of Operation and Maintenance with respect to PFC Facilities. “Pledged PFC Account” means the Pledged PFC Account within the PFC Revenue Fund established in Article IV. “Pledged PFC Revenues” means any PFC Revenues specifically designated as such by the Consolidated Government and pledged to pay PFC eligible debt service on any series of General Revenue Bonds pursuant to this Master Bond Resolution or a Supplemental Bond Resolution. “Pledged PFC Series Account” means a Pledged PFC Series Account established for a series of Bonds and held within the Pledged PFC Account. The Pledged PFC Series Account established with respect to the Series 2015A Bonds is designated the “Pledged PFC Series 2015A Account.” “Pledged Revenues” has the meaning set forth in the granting clauses of this Master Bond Resolution. The term “principal” means the principal amount of any Bond and includes the Accreted Value of any Capital Appreciation Bonds. All references to principal shall be construed as if they were also references to Accreted Value with respect to Capital Appreciation Bonds. “Principal Maturity Date” means each date on which principal is to become due on any Bonds, by maturity or mandatory sinking fund redemption, as established in the Supplemental Bond Resolution for such Bonds. “Principal Account” means the Principal Account within the Debt Service Fund. “Project” means the acquisition, construction, reconstruction, improvement, betterment, extension, implementation or equipping of the Airport and, as described in the Bond Resolution, any specific capital facilities or group of related capital projects at the Airport, in each case, financed, in whole or in part, with the proceeds of any Bonds. “Projected Interest Payment” means that sum, redetermined by the Consolidated Government monthly, which would have to be accumulated in the Interest Account by the next Interest Payment Date to pay interest on Bonds that bear interest at a Variable Rate if such Variable Rate should continue to equal the rate borne by such Bonds on the date of calculation. “Put Date” means any date on which a Bondholder may elect to have Bonds redeemed, prepaid, purchased directly or indirectly by the Consolidated Government, or otherwise paid. “Rating” means a rating in one of the categories by a Rating Agency, disregarding pluses, minuses, and numerical gradations. 19 “Rating Agencies” or “Rating Agency” means Fitch, Moody’s, Standard & Poor’s and Kroll or any successors thereto and any other nationally recognized credit rating agency then maintaining a rating on any Bonds at the request of the Consolidated Government. If at any time a particular Rating Agency does not have a rating outstanding with respect to the relevant Bonds, then a reference to Rating Agency or Rating Agencies shall not include such Rating Agency. “Rebate Fund” means the Augusta, Georgia Airport Rebate Fund established in Article IV. “Record Date” means, (a) with respect to the Series 2015 Bonds, the fifteenth day of the calendar month preceding each Interest Payment Date, and (b) with respect to any other series of Bonds, the record date designated by the Consolidated Government in a Supplemental Bond Resolution authorizing such Bonds. “Reimbursement Obligation” means the obligation of the Consolidated Government to directly reimburse any Financial Facility Issuer for amounts paid by such Financial Facility Issuer under a Financial Facility or any Reserve Account Credit Facility Provider for amounts paid by such Reserve Account Credit Facility Provider under a Reserve Account Credit Facility, whether or not such obligation to so reimburse is evidenced by a promissory note or other similar instrument. The term “related” means, when used to refer to Bonds, subaccounts, category of Revenues or liens, the item modified by such term has a definite relationship to the subject as described in the Bond Resolution. The term “related” means, when used to refer to Expenses of Operation and Maintenance, (i) for Special Purpose Revenue Bonds or Special Purpose Revenues, Expenses of Operation and Maintenance with respect to Special Purpose Facilities, (ii) for Released Revenue Bonds or Released Revenues, Expenses of Operation and Maintenance with respect to Released Revenue Facilities, and (iii) for General Revenue Bonds or General Revenues, all Expenses of Operation and Maintenance of the Airport less Expenses of Operation and Maintenance with respect to Special Purpose Facilities and Released Revenue Facilities. “Released Revenue Account” means the Released Revenue Account within the Revenue Fund established in Article IV. “Released Revenue Bonds” means Bonds secured by a Senior Lien on one or more categories of Released Revenues. “Released Revenue Facilities” means the portion of the Airport with respect to which Released Revenues arise or from which they are generated, other than PFC Facilities. “Released Revenues” means particular categories of Revenues which would otherwise be General Revenues but have been identified in accordance with Section 505 and therefore do not constitute a part of General Revenues, until the Consolidated Government has acted to include such categories of Revenues within General Revenues again. “Reserve Account Credit Facility” means any letter of credit, insurance policy, line of credit, surety bond, or similar obligation, arrangement or instrument issued by a bank, insurance company, or other financial institution, together with any substitute or replacement therefor, if 20 any, complying with the provisions of the Bond Resolution, thereby fulfilling all or a portion of a Debt Service Reserve Requirement. “Reserve Account Credit Facility Provider” means any provider of a Reserve Account Credit Facility. “Revenue Bond Law” means Article 3 of Chapter 82 of Title 36 of the Official Code of Georgia Annotated, as amended. “Revenue Credit Account” means the Revenue Credit Account established in Article IV. “Revenue Fund” means the Augusta, Georgia Airport Revenue Fund established in Article IV. “Revenues” means General Revenues, PFC Revenues, Special Purpose Revenues and Released Revenues. “Securities Depository” means any securities depository that is a “clearing corporation” within the meaning of the New York Uniform Commercial Code and a “clearing agency” registered pursuant to provisions of Section 17A of the Securities Exchange Act of 1934, operating and maintaining, with its participants or otherwise, a Book-Entry System to record ownership of beneficial interest in bonds and bond service charges, and to effect transfers of bonds in Book-Entry Form, and means, initially, DTC. “Securities Depository Nominee” means any nominee of a Securities Depository and shall initially mean Cede and Co., New York, New York, as nominee of DTC. “Senior Lien” means a lien on one or more categories of Revenues that entitles the Beneficiaries of such lien to have a claim on such Revenues prior to any other Person and ahead of the use of such Revenues for any purpose other than payment of Expenses of Operation and Maintenance; provided one or more series of Bonds, Contracts and related Beneficiaries may have parity Senior Liens on the same categories of Revenues pursuant to the terms of the Bond Resolution. “Senior Lien Bonds” means Bonds having a Senior Lien on one or more categories of Revenues, including obligations secured by a Senior Lien pursuant to Section 502(c) or 507. The term “series” means all Bonds which (i) are issued on the same date, (ii) have the same tax status (tax-exempt or taxable under the federal income tax and subject or not to the alternative minimum income tax), and (iii) have the same lien status and priority with respect to each category of Revenues on which any such Bonds have a lien; as well as all Bonds delivered in lieu of or in substitution for such Bonds pursuant to provisions of the Bond Resolution with respect to exchange, transfer and replacement (for mutilation, loss, theft or destruction) of Bonds. “Series 2015 Bonds” means the Series 2015A Bonds and the Series 2015B Bonds. 21 “Series 2015A Bonds” means the Augusta, Georgia Airport General Revenue Refunding Bonds, Series 2015A (Non-AMT) in the aggregate principal amount of $____________, authorized to be issued under Article II of this Master Bond Resolution. “Series 2015B Bonds” means the Augusta, Georgia Airport General Revenue Refunding Bonds, Series 2015B (AMT) in the aggregate principal amount of $____________, authorized to be issued under Article II of this Master Bond Resolution. “Series 2015 Custodian Agreement” means the Custodian Agreement, to be dated the date of its execution and delivery, between the Consolidated Agreement and U.S. Bank National Association, relating to the Series 2015 Bonds, as amended, modified or replaced. “Series 2015 Disclosure Certificate” means the continuing disclosure certificate executed in connection with the issuance of the Series 2015 Bonds. “Series 2015 Paying Agent and Bond Registrar Agreement” means the Paying Agent and Bond Registrar Agreement, to be dated the date of its execution and delivery, between the Consolidated Government and U.S. Bank National Association, relating to the Series 2015 Bonds, as amended, modified, or replaced. “Special Purpose Facilities” means facilities which (i) will not result, upon completion, in a material reduction in Net General Revenues, (ii) will not be of such a type or design that the subsequent closing thereof (with the functions thereof not provided by a substitute facility) will materially impair the general operations of the Airport and (iii) the Consolidated Government has designated as “Special Purpose Facilities” provided such facilities, if owned or operated by the Consolidated Government, cease to be Special Revenue Facilities (and become General Revenue Facilities) when there are no longer any outstanding Special Purpose Revenue Bonds related thereto. For purposes of this definition, “material reduction” means Net General Revenues for the first complete Fiscal Year following completion of such facilities will be less than the amount required by Section 601. “Special Purpose Revenue Account” means the Special Purpose Revenue Account within the Revenue Fund established in Article IV. “Special Purpose Revenue Bonds” means bonds or other obligations secured by a lien on Special Purpose Revenues and not secured by a lien on General Revenues, PFC Revenues or Released Revenues. “Special Purpose Revenues” means revenues, income, receipts and money arising from or generated by one or more Special Purpose Facilities. “Standard & Poor’s” or “S&P” means Standard & Poor’s Ratings Services, a Division of The McGraw-Hill Companies, Inc., or, if such corporation is dissolved or liquidated or otherwise ceases to perform securities rating services, such other nationally recognized securities rating agency as may be designated in writing by the Consolidated Government. The notice address of Standard & Poor’s is 55 Water Street, New York, New York 10041. “State” means the State of Georgia. 22 “Subordinate Lien” means a lien on one or more categories of Revenues which is not a Senior Lien. “Subordinate Lien Bonds” means bonds or obligations which have a Subordinate Lien, or no lien, on Revenues and obligations secured by a Subordinate Lien pursuant to Section 503(b)(10). “Subordinate Securities Fund” means the Augusta, Georgia Airport Subordinate Securities Fund established in Article IV. “Supplemental Bond Resolution” means a bond resolution of the Consolidated Government supplemental to this Master Bond Resolution (which bond resolution itself may be supplemented by one or more bond resolutions) to be adopted prior to and authorizing the issuance and delivery of any series of Bonds, other than the Series 2015 Bonds. Other than with respect to the Series 2015 Bonds, such a bond resolution as supplemented shall establish the date or dates of the pertinent series of Bonds, the schedule of maturities of such Bonds, the name of the purchaser(s) of such series of Bonds, the purchase price thereof, the rate or rates of interest to be borne thereby, whether fixed or variable, the interest payment dates for such Bonds, the terms and conditions, if any, under which such Bonds may be made subject to redemption (mandatory or optional) prior to maturity, the form of such Bonds, the liens relating to such Bonds, the Contracts, if any, relating to such Bonds, and such other details as the Consolidated Government may determine. “Supplemental Resolution” means (i) any Supplemental Bond Resolution and (ii) any modification, amendment, or supplement to this Master Bond Resolution other than a Supplemental Bond Resolution. “Tax-Exempt Bonds” means any Bonds the interest on which has been determined, in an unqualified opinion of Bond Counsel, to be excludable from the gross income of the owners thereof for federal income tax purposes. “Term Bonds” means Bonds which mature on one Principal Maturity Date yet a portion of which are required to be redeemed, prior to maturity, under a schedule of mandatory redemptions established by the Bond Resolution. “2005 Defeasance Account” means the account created for the purpose of holding a portion of the proceeds of the Series 2015 Bonds which are to be applied to the refunding of the Refunded Bonds. “Variable Rate” means as to any Bonds, any portion of such Bonds the interest rate on which is not established at the time of original execution or issuance at a fixed or constant rate. Section 102 Construction Of Certain Terms. For all purposes of the Bond Resolution, except as otherwise expressly provided or unless the context otherwise requires, the following rules of construction shall apply: 23 (a) The use of the masculine, feminine, or neuter gender is for convenience only and shall be deemed and construed to include correlative words of the masculine, feminine, or neuter gender, as appropriate. (b) All references in the Bond Resolution to designated “Articles,” “Sections,” and other subdivisions are to the designated Articles, Sections, and other subdivisions of the Bond Resolution. The words “herein,” “hereof,” and “hereunder” and other words of similar import refer to the Bond Resolution as a whole and not to any particular Article, Section, or other subdivision. (c) The terms defined in this Article shall have the meanings assigned to them in this Article and include the plural as well as the singular. (d) All accounting terms not otherwise defined herein have the meanings assigned to them in accordance with generally accepted accounting principles as promulgated by the American Institute of Certified Public Accountants; provided “Expenses of Operation and Maintenance” and “Revenues” are determined on a cash basis. Section 103 Table of Contents; Titles and Headings. The table of contents, the titles of the articles, and the headings of the sections of the Bond Resolution are solely for convenience of reference, are not a part of the Bond Resolution, and shall not be deemed to affect the meaning, construction, or effect of any of its provisions. 24 ARTICLE II THE BONDS Section 201 Authorization; Designation of Bonds. The Bonds authorized under the Bond Resolution may be issued and sold from time to time in one or more series, and shall be in substantially the form set forth in this Master Bond Resolution with respect to the Series 2015 Bonds or the related Supplemental Bond Resolution, but such variations, omissions, substitutions, and insertions may be made therein; and such particular series designation, name identification, legends, or text may be endorsed thereon, as may be necessary or appropriate to conform to and as required or permitted by this Master Bond Resolution and any Supplemental Bond Resolution or as may be necessary or appropriate (for Tax-Exempt Bonds) to comply with applicable requirements of the Code. The Bonds also may bear such legend or contain such further provisions as may be necessary to comply with or conform to the rules and requirements of any brokerage board, securities exchange, or municipal securities rulemaking board. The Series 2015 Bonds constitute General Revenue Bonds. The Series 2015A Bonds will also be secured by Pledged PFC Revenues. Additional Bonds, if any, shall be secured as described in the related Supplemental Bond Resolution and pursuant to Section 502. Under the authority of the Revenue Bond Law, the Consolidated Government hereby authorizes the execution, issuance and delivery of the “Augusta, Georgia Airport General Revenue Refunding Bonds, Series 2015A (Non-AMT)” in the original aggregate principal amount of $__________ and the “Augusta, Georgia Airport General Revenue Refunding Bonds, Series 2015B (AMT)” in the original aggregate principal amount of $__________. The proceeds of the Series 2015A Bonds will be used for the purpose of (a) refunding the outstanding Series 2005A Bonds and (b) paying the costs of issuing the Series 2015A Bonds. The proceeds of the Series 2015B Bonds will be used for the purpose of (a) refunding the outstanding Series 2005C Bonds and (b) paying the costs of issuing the Series 2015B Bonds. The issuance of the Series 2015 Bonds for the foregoing purposes is hereby found and declared to be in the best interests of and in advancement of the general welfare of the Consolidated Government’s citizens. Section 202 Bond Details. The Bonds shall be issued in fully registered form in Authorized Denominations and shall be dated as provided herein with respect to the Series 2015 Bonds and otherwise as provided in the pertinent Supplemental Bond Resolution, except that any Capital Appreciation Bond shall be issued in the denomination of $5,000 maturity amount or integral multiples thereof. The provisions for dates, authentication, payment, registration and optional, mandatory and extraordinary redemption shall be in accordance with Article II and Article III of this Master Bond Resolution. Each Bond authenticated prior to the first Interest Payment Date thereon shall bear interest from its dated date. Each Bond authenticated on or after the first Interest Payment Date thereon shall bear interest from the Interest Payment Date thereon next preceding the date of authentication thereof, unless such date of authentication shall be an Interest Payment Date to 25 which interest on such Bond has been paid in full or duly provided for, in which case from such date of authentication; provided that if, as shown by the records of the Paying Agent, interest on such Bond shall be in default, such Bond shall bear interest from the date to which interest has been paid in full on such Bond or, if no interest has been paid on such Bond, its dated date. Each Bond shall bear interest on overdue principal and, to the extent permitted by law, on overdue premium, if any, and interest at the rate borne by such Bond. No payment due on any Bond shall be overdue if on the due date of such payment sufficient collected funds to make such payment are on deposit with the Paying Agent. The principal of, premium, if any, and interest on the Bonds shall be payable in any coin or currency of the United States of America which, at the respective dates of payment thereof, is legal tender for the payment of public and private debts. The Series 2015A Bonds shall be dated their date of original issuance and delivery, shall be in the form of fully registered bonds without coupons, shall be in Authorized Denominations, shall be transferable to subsequent owners as hereinafter provided, shall be numbered RA-1 upward and shall bear interest as herein provided (based on a 360 day year comprised of twelve 30-day months) at the rates per annum set forth below. Interest on the Series 2015A Bonds shall be payable January 1 and July 1 of each year, commencing January 1, 2016, and the principal shall mature on the 1st day of January in the years and amounts set forth below: Year Principal Amount Interest Rate The Series 2015B Bonds shall be dated their date of original issuance and delivery, shall be in the form of fully registered bonds without coupons, shall be in Authorized Denominations, shall be transferable to subsequent owners as hereinafter provided, shall be numbered RB-1 upward and shall bear interest as herein provided (based on a 360 day year comprised of twelve 30-day months) at the rates per annum set forth below. Interest on the Series 2015B Bonds shall be January 1 and July 1 of each year, commencing January 1, 2016, and the principal shall mature on the 1st day of January in the years and amounts set forth below: 26 Year Principal Amount Interest Rate Unless a Bond is held in Book-Entry Form, the principal of and redemption premium, if any, on any Bond shall be payable to the Bondholder upon presentation and surrender thereof at the designated corporate trust office of the Paying Agent. Unless a Bond is held in Book-Entry Form, payments of interest on each Bond shall be made by the Paying Agent to the registered owner as shown on the Bond Register kept by the Bond Registrar at the close of business on the Record Date preceding the Interest Payment Date by check, mailed by first class mail to the registered owner at the address shown on the Bond Register, or at such other address as is furnished in writing by such registered owner to the Bond Registrar prior to such Record Date, notwithstanding the cancellation of any such Bonds upon any exchange or transfer thereof subsequent to the Record Date and prior to such Interest Payment Date. Notwithstanding the foregoing, interest on the Bonds of any series shall be paid to any registered owner of more than $1,000,000 in aggregate principal amount of the Bonds of such series by deposit of immediately available funds to the account of such registered owner maintained with the Paying Agent or transmitted by wire transfer to such registered owner to an account maintained at a commercial bank located within the United States of America if written instructions are given to the Paying Agent prior to the 15th day preceding the Interest Payment Date. Interest shall continue to be so paid until such wire instructions are revoked in writing. While the Bonds of any series are held in Book-Entry Form, the principal of and interest on such Bonds shall be payable as provided in Section 208. The Consolidated Government may, by Supplemental Resolution, provide for other methods or places of payment, including wire transfer, as it may deem appropriate for any Bonds. Notwithstanding the foregoing, registrations of transfers and exchanges shall be made in accordance with the Book-Entry System as long as the Bonds are held in Book-Entry Form. Section 203 Execution and Authentication of Bonds. The Bonds shall be executed on behalf of the Consolidated Government by the manual or facsimile signature of the Mayor and Chairman of the Augusta Aviation Commission and attested by the Attesting Officer. The official seal of the Consolidated Government shall be 27 impressed thereon. The Bonds shall be authenticated by the manual signature of a duly authorized signatory of the Bond Registrar. The validation certificate to be attached to the Bonds shall be executed by the manual signature of the Clerk of the Superior Court of Richmond County, and the official seal of such Court shall be impressed thereon. In case any official whose signature shall appear on the Bonds shall cease to be such officer before delivery of the Bonds, such signature shall nevertheless be valid and sufficient for all purposes the same as if such officer had remained in office until such delivery. The Series 2015 Bonds, the certificate of authentication and registration, form of assignment and the certificate of validation to be endorsed upon the Series 2015 Bonds, shall be in substantially the forms set forth in Exhibit A and Exhibit B hereto, with such variations, omissions and insertions as are required or permitted by this Bond Resolution. Prior to the preparation of definitive Bonds, the Consolidated Government may issue interim receipts, interim certificates, or temporary Bonds, exchangeable in any case for definitive Bonds upon the issuance of definitive Bonds. Only those Bonds which shall have endorsed thereon a certificate of authentication and registration substantially in the form of Bond set forth in the Bond Resolution, duly executed by the manual signature of an authorized officer of the Bond Registrar shall be entitled to any benefit or security under this Bond Resolution. Every such certificate of the Bond Register upon any of such Bonds when duly executed shall be conclusive evidence that such Bond has been duly authenticated, registered and delivered under the Bond Resolution and that the owner is entitled to the benefit of the Bond Resolution. It shall not be necessary that the same authorized signatory of the Bond Registrar sign the certificate of authentication and registration on all of the Bond or on all Bonds of any series. The person in whose name any Bond shall be registered shall be deemed and regarded as the absolute owner thereof for all purposes and the payment of the principal amount, interest and premium, if any, shall be made only to or upon the order of the registered owner thereof or such registered owner’s attorney duly authorized in writing. All such payments shall be valid and effectual to satisfy and discharge the liability upon such Bond, including redemption premium, if any, and the interest thereon to the extent of the sums so paid. Section 204 Registration of Bonds. The Consolidated Government shall cause the Bond Register for the registration and for the transfer of the Bonds as provided in the Bond Resolution to be kept by the Bond Registrar. The Bonds shall be registered as to principal and interest on the Bond Register upon presentation thereof to the Bond Registrar which shall make notation of such registration thereon; provided that the Consolidated Government reserves the right to issue coupon Bonds payable to bearer whenever to do so would not result in any adverse federal tax consequences. Any Bonds may be issued, registered and maintained in a Book-Entry Form to the extent provided for herein or in a Supplemental Bond Resolution. Section 205 Transfer and Exchangeability of Bonds. The Bond Registrar shall keep the Bond Register of the Consolidated Government for the registration of the Bonds and for the registration of transfers of the Bonds as herein provided. The transfer of any Bond shall be registered upon the Bond Register upon the surrender and presentation of the Bond to the Bond Registrar duly endorsed for transfer or accompanied by an 28 assignment duly executed by the registered owner or attorney duly authorized in writing in such form as shall be satisfactory to the Bond Registrar. Upon any such registration of transfer, the Bond Registrar shall authenticate and deliver in exchange for such Bond or Bonds so surrendered, a new Bond or Bonds registered in the name of the transferee or transferees, of any Authorized Denomination, and in an aggregate principal amount or maturity amount equal to the aggregate principal amount or maturity amounts of the Bonds so surrendered and of the same maturity, interest rate, series and tenor, and bearing numbers not then outstanding. Any Bond, upon presentation and surrender thereof to the Bond Registrar, together with an assignment duly executed by the registered owner or duly authorized attorney, in such form as may be satisfactory to the Bond Registrar, may be exchanged for an aggregate principal amount of Bonds of the same series, interest rate, maturity and equal to the principal amount of the Bond so surrendered, of any Authorized Denomination, and bearing numbers not then outstanding. The Bond Registrar may make a charge for every exchange or registration of transfer of the Bonds sufficient to reimburse it for any tax or other governmental charge required to be paid with respect to such exchange or registration of transfer, but no other charge shall be made to the owner for the privilege of exchanging or registering the transfer of Bonds under the Bond Resolution. The Bond Registrar shall not be required to transfer or exchange any Bond after notice calling such Bond for redemption has been given or during the period of 15 days (whether or not a business day for the Bond Registrar, but excluding the date of giving such notice of redemption and including such 15th day) immediately preceding the giving of such notice of redemption. All Bonds surrendered for exchange or transfer of registration shall be cancelled and destroyed by the Bond Registrar in accordance with Section 206. Section 206 Cancellation and Destruction of Bonds. If a Bond is paid, purchased or redeemed in full, either at or before maturity, it shall be delivered to the Bond Registrar when such payment, purchase or redemption is made, and the Bond shall thereupon be cancelled and shall not be reissued. All Bonds cancelled on account of payment, transfer or exchange shall be destroyed in accordance with the prevailing practice of the Bond Registrar and a permanent record of such destruction shall be kept by the Bond Registrar. Section 207 Mutilated, Lost, Stolen, or Destroyed Bonds. If any Bond is mutilated, lost, stolen, or destroyed, the Consolidated Government may execute and deliver a new Bond of the same series, maturity, interest rate, aggregate principal amount, and tenor in lieu of and in substitution for the Bond mutilated, lost, stolen, or destroyed. In the case of any mutilated Bond, however, such mutilated Bond shall first be surrendered to the Bond Registrar, and, in the case of any lost, stolen, or destroyed Bond, there shall first be furnished to the Bond Registrar evidence satisfactory to it of the ownership of such Bond and of such loss, theft, or destruction, together with indemnity to the Consolidated Government and the Bond Registrar, satisfactory to each of them. If any such Bond shall have matured or a redemption date pertaining to the Bond shall have passed, instead of issuing a new Bond the Consolidated Government may pay or cause the Paying Agent to pay the Bond. The 29 Consolidated Government, the Bond Registrar, and the Paying Agent may charge the owner of such Bond with their reasonable fees and expenses for replacing mutilated, lost, stolen, or destroyed Bonds. In executing a new Bond and in furnishing the Bond Registrar with the written authorization to deliver a new Bond as provided for in this Section, the Consolidated Government may rely conclusively on a representation of the Bond Registrar that the Bond Registrar is satisfied with the adequacy of the evidence presented concerning the mutilation, loss, theft, or destruction of any Bond. Section 208 Global Form; Securities Depository; Ownership of Series 2015 Bonds. (a) Upon the initial issuance, the ownership of each Series 2015 Bond shall be registered in the name of the Securities Depository or the Securities Depository Nominee, and ownership thereof shall be maintained in Book Entry Form by the Securities Depository for the account of the Agent Members thereof. Initially, the Series 2015 Bonds shall be registered in the name of Cede & Co., as the nominee of The Depository Trust Company. Beneficial Owners will not receive Series 2015 Bonds from the Bond Registrar evidencing their ownership interests. Except as provided in subparagraph (c) of this Section 208, the Series 2015 Bonds may be transferred, in whole but not in part, only to the Securities Depository or the Securities Depository Nominee, or to a successor Securities Depository selected or approved by the Consolidated Government or to a nominee of such successor Securities Depository. (b) With respect to Series 2015 Bonds registered in the name of the Securities Depository or the Securities Depository Nominee, the Consolidated Government, the Bond Registrar and the Paying Agent shall have no responsibility or obligation to any Participant or Beneficial Owner. Without limiting the foregoing, the Consolidated Government, the Bond Registrar, the Paying Agent and their respective affiliates shall have no responsibility or obligation with respect to: (i) the accuracy of the records of the Securities Depository, the Securities Depository Nominee or any Participant with respect to any Beneficial Ownership interest in the Series 2015 Bonds; (ii) the delivery to any Participant, any Beneficial Owner or any other person, other than the Securities Depository or the Securities Depository Nominee, of any notice with respect to the Series 2015 Bonds; or (iii) the payment to any Participant, any Beneficial Owner or any other person, other than the Securities Depository or the Securities Depository Nominee, of any amount with respect to the principal of or interest on the Series 2015 Bonds. So long as any Series 2015 Bonds are registered in Book-Entry Form, the Consolidated Government, the Bond Registrar and the Paying Agent may treat the Securities Depository as, and deem the Securities Depository to be, the absolute owner of such Series 2015 Bonds for all purposes whatsoever, including without limitation: (i) the payment of principal and interest on such Series 2015 Bonds; 30 (ii) giving notices of redemption and other matters with respect to the Series 2015 Bonds; (iii) registering transfers with respect to such Series 2015 Bonds; (iv) the selection of Series 2015 Bonds for redemption; and (v) voting and obtaining consents under the Bond Resolution. So long as any Series 2015 Bonds are registered in Book-Entry Form, the Paying Agent shall pay all principal of and interest on the Series 2015 Bonds only to the Securities Depository or the Securities Depository Nominee as shown in the Bond Register, and all such payments shall be valid and effective to fully discharge the Consolidated Government’s obligations with respect to payment of principal of and interest on the Series 2015 Bonds to the extent so paid. (c) If at any time (i) the Consolidated Government determines that the Securities Depository is incapable of discharging its responsibilities described herein, (ii) if the Securities Depository notifies the Consolidated Government or the Paying Agent that it is unwilling or unable to continue as Securities Depository with respect to the Series 2015 Bonds, or (iii) if the Securities Depository shall no longer be registered or in good standing under the Securities Exchange Act of 1934 or other applicable statute or regulation and a successor Securities Depository is not appointed by the Consolidated Government within 90 days after the Consolidated Government receives notice or becomes aware of such condition, as the case may be, then this Section 208 shall no longer be applicable and the Consolidated Government shall execute and the Bond Registrar shall authenticate and deliver certificated bonds to the Beneficial Owners. Series 2015 Bonds issued pursuant to this paragraph (c) shall be registered in such names and Authorized Denominations as the Securities Depository, pursuant to instructions from the Participant or otherwise, shall instruct the Bond Registrar. Upon exchange, the Bond Registrar shall authenticate and deliver the certificated Series 2015 Bonds to the persons in whose names such Series 2015 Bonds are so registered on the business day immediately preceding the date of such exchange. Section 209 Blank Bonds. The Consolidated Government shall make all necessary and proper provisions for the transfer and exchange of the Bonds by the Bond Registrar and the Consolidated Government shall deliver or cause to be delivered to the Bond Registrar a sufficient quantity of blank Bonds duly executed on behalf of the Consolidated Government, together with the certificate of validation pertaining thereto duly executed by the Clerk of the Superior Court of Richmond County, as herein provided in order that the Bond Registrar shall at all times be able to register and authenticate the Bonds at the earliest practicable time in accordance with the provisions of the Bond Resolution. All Bonds surrendered in any such exchange or registration of transfer shall be forthwith canceled by the Bond Registrar and a record thereof duly entered in the permanent records pertaining to the Bonds maintained by the Bond Registrar. 31 ARTICLE III REDEMPTION OF BONDS Section 301 Optional Redemption. The Series 2015 Bonds may be redeemed at the option of the Consolidated Government in whole or in part at any time in any year not earlier than January 1, ______, from any moneys which may be available for such purpose and deposited with the Paying Agent on or before the date fixed for redemption. Any optional redemption of any series of Series 2015 Bonds shall be made by the payment of the principal amount of the related series of Series 2015 Bonds to be redeemed and accrued interest thereon to date of redemption, at par without a premium. If any series of the Series 2015 Bonds is called for optional redemption in part, then any Series 2015 Bonds so called for redemption shall be called in such maturities as may be specified by the Consolidated Government and if less than a full maturity by lot or in such other manner as may be designated by the Bond Registrar. Section 302 Mandatory Sinking Fund Redemption. The Series 2015A Bonds shall be subject to mandatory redemption prior to maturity on January 1, _____ and on each succeeding January 1 to and including January 1, _____ (the last maturity to be paid rather than redeemed), in part, by lot in such manner as may be designated by the Bond Registrar, at par plus accrued interest to the redemption date, in the following years and principal amounts: Year Amount The Series 2015B Bonds shall be subject to mandatory redemption prior to maturity on January 1, _____ and on each succeeding January 1 to and including January 1, _____ (the last maturity to be paid rather than redeemed), in part, by lot in such manner as may be designated by the Bond Registrar, at par plus accrued interest to the redemption date, in the following years and principal amounts: Year Amount 32 The Consolidated Government shall be entitled to receive a credit in respect of its mandatory sinking fund redemption obligation for Series 2015 Bonds delivered, purchased, or redeemed, as hereinafter described, if the Consolidated Government at its option purchases in the open market and delivers to the Paying Agent for cancellation Series 2015 Bonds or redeems Series 2015 Bonds (other than through mandatory sinking fund redemption) and such Series 2015 Bonds have not theretofore been applied as a credit against any mandatory redemption obligation. Each such Series 2015 Bond so purchased or redeemed shall be credited by the Paying Agent at 100% of the principal amount thereof on the obligation of the Consolidated Government with respect to the related series of Series 2015 Bonds on such mandatory redemption payment date, and any excess shall be credited on future mandatory sinking fund redemption obligations in chronological order, and the principal amount of such Series 2015 Bonds to be redeemed by operation of mandatory redemption shall be accordingly reduced. Section 303 Notice of Redemption. Unless waived by any registered owner of Bonds to be redeemed or contrary requirements are specified in the related Supplemental Bond Resolution, official notice of any redemption shall be given by the Bond Registrar on behalf of the Consolidated Government by mailing a copy of an official redemption notice by first class mail, at least 30 days and not more than 60 days prior to the date fixed for redemption to the registered owner of the Bond or Bonds to be redeemed at the address shown on the Bond Register or at such other address as is furnished in writing by such registered owner to the Bond Registrar. All official notices of redemption shall be dated, shall contain the complete official name of the Bond issue, and shall state: (a) the redemption date; (b) the redemption price; (c) the series, interest rate and maturity date of the Bonds being redeemed; (d) the date on which the notice of redemption was or will be sent to depositories as described hereafter; (e) if less than all the Outstanding Bonds of a series are to be redeemed, the Bond numbers, and, where part of the Bonds evidenced by one Bond certificate are being redeemed, the respective principal amounts of such Bonds to be redeemed; (f) that on the redemption date the redemption price will become due and payable upon each such Bond or portion thereof called for redemption and that interest thereon shall cease to accrue from and after such date; (g) the place where such Bonds are to be surrendered for payment of the redemption price (which place of payment shall be the designated corporate trust office of the Paying Agent) and the name, address, and telephone number of a person or persons at the Paying Agent who may be contacted with respect to the redemption; and 33 (h) if such redemption is a Conditional Redemption, the details and timing for such conditions. Not later than 5 p.m. on the business day preceding any redemption date, the Consolidated Government shall deposit with the Paying Agent an amount of money sufficient to pay the redemption price of all the Bonds or portions of Bonds which are to be redeemed on that date. Upon the payment of the redemption price of Bonds being redeemed, each check or other transfer of funds issued for such purpose shall bear the CUSIP number identifying, by issue and maturity, the Bonds being redeemed with the proceeds of such check or other transfer. Not less than 60 days after the redemption date, the Bond Registrar shall send a second copy of the official notice of redemption to the registered owner of any Bond or Bonds to be redeemed if, by such date, such registered owner has not surrendered its Bond or Bonds for redemption. Such notice shall be sent by registered or certified mail, with a return receipt requested. Failure to give appropriate notice of any redemption by mail or any defect in any notice of redemption shall not affect the validity of proceedings for redemption of the Bonds. The Paying Agent shall hold amounts payable on redemption for Bonds which have not been surrendered for redemption for a period of not less than one year after the final maturity date of the Bonds or any earlier date when all of the Bonds have been refunded or redeemed. Section 304 Consolidated Government or Bond Registrar May Give Notice of Redemption. Notice of redemption of Bonds to be redeemed shall be given by the Consolidated Government or by the Bond Registrar for and on behalf of the Consolidated Government whenever either: (i) such redemption is required to be made hereunder or under the Supplemental Bond Resolution for such Bonds, or (ii) such redemption is permitted to be made under the terms of such Bonds and the Consolidated Government requests that such redemption be made. Section 305 Effect of Notice of Redemption. Official notice of redemption having been given in the manner and under the conditions provided in this Article, and moneys for payment of the redemption price being held by the Paying Agent as provided in the Bond Resolution and, if such redemption is a Conditional Redemption, the conditions therefor have been met, the Bonds or portions of Bonds called for redemption shall, on the redemption date designated in such notice, become and be due and payable at the redemption price provided for redemption of such Bonds or portions of Bonds on such date, and from and after such date interest on the Bonds or portions of Bonds called for redemption shall cease to accrue, such Bonds or portions of Bonds shall cease to be entitled to any lien, benefit, or security under the Bond Resolution, and the owners of such Bonds or portions of Bonds shall have no rights in respect thereof except to receive payment of the redemption price thereof. Upon surrender for partial redemption of any Bond, there shall be 34 prepared for and delivered to the registered owner a new Bond or Bonds of the same series, maturity, and interest rate in the amount of the unpaid principal. Section 306 Conditional Redemptions. The Consolidated Government may, by the filing with the Bond Registrar a certificate of the Mayor or the Consolidated Government Finance Director to such effect prior to the delivery of the notice of an optional redemption, make such optional redemption conditional upon the occurrence of certain events, including without limitation the receipt of certain funds by the Consolidated Government or the Paying Agent, the issuance of certain bonds or other obligations by the Consolidated Government or other parties and the receipt of governmental permits. If so conditioned, the redemption will not be made unless such events occur, the notice thereof will specify such conditions and the required timing thereof and, if such conditions are not met, a notice thereof will be given by the Bond Registrar to the registered owners of Bonds promptly after the date it is determined such conditions are not met. Section 307 Redemption Among Series. Subject to the redemption provisions of any Supplemental Bond Resolution authorizing Bonds and the requirements of the Bond Resolution limiting the use of certain categories of Revenues to certain Bonds, the Consolidated Government in its discretion may redeem the Bonds of any series, or a portion of the Bonds of any such series, before it redeems the Bonds of any other series. Within any particular series, any redemption of Bonds shall be effected in the manner provided in any Supplemental Bond Resolution. Section 308 Selection of Bonds to be Redeemed. If less than all of the Bonds of like maturity of any series shall be called for redemption, the particular Bonds, or portions of Bonds, to be redeemed shall be selected by lot by the Bond Registrar or in such other manner as the Bond Registrar in its discretion may deem proper. The portion of any Bond of a denomination of more than $5,000 to be redeemed shall be in the principal amount of $5,000 or an integral multiple thereof, and, in selecting portions of such Bonds for redemption, the Consolidated Government shall treat each such Bond as representing that number of Bonds which is obtained by dividing the principal amount of such Bond to be redeemed in part by $5,000. Section 309 Purchase in Open Market. Nothing herein contained shall be construed to limit the right of the Consolidated Government to purchase with any excess moneys in a subaccount of the Interest Account or Principal Account related to Bonds (i.e., moneys not needed in the then current Bond Year to pay principal of and interest on the related Bonds), the related Bonds in the open market. Any such Bonds so purchased shall not be reissued and shall be cancelled. 35 ARTICLE IV PLEDGED REVENUES AND FLOW OF FUNDS Section 401 Pledge of Revenues; Limited Obligations; Contract Liens. (a) All Net General Revenues shall be and are hereby pledged to the prompt payment of the principal of, premium, if any, and interest on the General Revenue Bonds, obligations treated as General Revenue Bonds pursuant to Section 502(c) and the Consolidated Government’s obligations under the Contracts related to General Revenue Bonds; provided that a Contract may have a Senior Lien or a Subordinate Lien on Net General Revenues, or no lien at all, but (A) no Contract shall have a lien on Net General Revenues that is senior to the lien on Net General Revenues securing the related Bonds, and (B) the lien of the Contract shall be in parity with the lien of the related Bonds only to the extent of the payment of principal of, premium, if any, and interest on such Bonds is made through such Contract as evidenced by Reimbursement Obligations; provided other amounts due on a Contract may be secured by a lien ranking immediately thereafter with the effect set forth in Section 705. The Net General Revenues shall immediately be subject to the lien of this pledge for the benefit of the Beneficiaries as set forth herein without any physical delivery thereof or further act, and the lien of this pledge shall be valid and binding against the Consolidated Government and against all other persons having claims against the Consolidated Government, whether such claims shall have arisen in tort, contract, or otherwise, and regardless of whether such persons have notice of the lien of this pledge. This pledge shall rank superior to any and all other pledges which may hereafter be made of the Net General Revenues by the Consolidated Government. The lien of this pledge does not secure any obligation of the Consolidated Government other than the General Revenue Bonds, obligations treated as General Revenue Bonds pursuant to Section 502(c) and the Contracts relating to General Revenue Bonds. (b) Pledged PFC Revenues on deposit in a Pledged PFC Series Account shall be and are hereby pledged to the prompt payment of the principal of, premium, if any, and interest on the series of Bonds for which it was established. There is hereby created the Pledged PFC Series 2015 Account, which amounts on deposit therein from time to time shall secure the Series 2015A Bonds. Any Pledged PFC Series Account created herein or pursuant to the terms of a Supplemental Resolution shall be pledged pursuant to the applicable Supplemental Resolution as security for the applicable series of Bonds and the Consolidated Government’s obligations under the Contracts related to such Bonds (the “Applicable Bonds and Contracts”). The Pledged PFC Revenues on deposit in a Pledged PFC Series Account shall immediately be subject to the lien of this pledge for the benefit of the Beneficiaries of the Applicable Bonds and Contracts as set forth herein without any physical delivery thereof or further act, and the lien of this pledge shall be valid and binding against the Consolidated Government and against all other persons having claims against the Consolidated Government, whether such claims shall have arisen in tort, contract, or otherwise, and regardless of whether such persons have notice of the lien of this pledge. This pledge shall rank superior to any and all other pledges which may hereafter be made of those Pledged PFC Revenues so deposited in Pledged PFC Series Accounts by the Consolidated Government. The lien of this pledge does not secure any obligation of the Consolidated Government other than as described in this paragraph. 36 (c) All Net Special Purpose Revenues shall be and are hereby pledged to the prompt payment of the principal of, premium, if any, and interest on the Special Purpose Revenue Bonds, obligations treated as Special Purpose Revenue Bonds pursuant to Section 502(c) and the Consolidated Government’s obligations under the Contracts related to Special Purpose Revenue Bonds; provided that a Contract may have a Senior Lien or a Subordinate Lien on Special Purpose Revenues, or no lien at all, but (A) no Contract shall have a lien on Special Purpose Revenues that is senior to the lien on Special Purpose Revenues securing the related Bonds, and (B) the lien of the Contract shall be in parity with the lien of the related Bonds only to the extent of the payment of principal of, premium, if any, and interest on such Bonds is made through such Contract as evidenced by Reimbursement Obligations; provided other amounts due on a Contract may be secured by a lien ranking immediately thereafter with the effect set forth in Section 705. The Net Special Purpose Revenues shall immediately be subject to the lien of this pledge for the benefit of the Beneficiaries as set forth herein without any physical delivery thereof or further act, and the lien of this pledge shall be valid and binding against the Consolidated Government and against all other persons having claims against the Consolidated Government, whether such claims shall have arisen in tort, contract, or otherwise, and regardless of whether such persons have notice of the lien of this pledge. This pledge shall rank superior to any and all other pledges which may hereafter be made of the Net Special Purpose Revenues by the Consolidated Government. The lien of this pledge does not secure any obligation of the Consolidated Government other than the Special Purpose Revenue Bonds, obligations treated as Special Purpose Revenue Bonds pursuant to Section 502(c) and the Contracts relating to Special Purpose Revenue Bonds. (d) All Net Released Revenues shall be and are hereby pledged to the prompt payment of the principal of, premium, if any, and interest on the Released Revenue Bonds, obligations treated as Released Revenue Bonds pursuant to Section 502(c) and the Consolidated Government’s obligations under the Contracts related to Released Revenue Bonds; provided that a Contract may have a Senior Lien or a Subordinate Lien on Net Released Revenues, or no lien at all, but (A) no Contract shall have a lien on Net Released Revenues that is senior to the lien on Net Released Revenues securing the related Bonds, and (B) the lien of the Contract shall be in parity with the lien of the related Bonds only to the extent of the payment of principal of, premium, if any, and interest on such Bonds is made through such Contract as evidenced by Reimbursement Obligations; provided other amounts due on a Contract may be secured by a lien ranking immediately thereafter with the effect set forth in Section 705. The Net Released Revenues shall immediately be subject to the lien of this pledge for the benefit of the Beneficiaries as set forth herein without any physical delivery thereof or further act, and the lien of this pledge shall be valid and binding against the Consolidated Government and against all other persons having claims against the Consolidated Government, whether such claims shall have arisen in tort, contract, or otherwise, and regardless of whether such persons have notice of the lien of this pledge. This pledge shall rank superior to any and all other pledges which may hereafter be made of the Net Released Revenues by the Consolidated Government. The lien of this pledge does not secure any obligation of the Consolidated Government other than the Released Revenue Bonds, obligations treated as Released Revenue Bonds pursuant to Section 502(c) and the Contracts relating to Released Revenue Bonds. (e) The Bonds and related Contracts shall be limited obligations of the Consolidated Government as provided therein payable solely from the related Revenues of a particular 37 category pledged thereto. The Bonds and the interest thereon and related Contracts shall not constitute a general or moral obligation of the Consolidated Government nor a debt, indebtedness, or obligation of, or a pledge of the faith and credit of, the Consolidated Government or the State or any political subdivision thereof, within the meaning of any constitutional or statutory provision whatsoever. Neither the faith and credit nor the taxing power of the State, the Consolidated Government, or any political subdivision thereof is pledged to the payment of the principal of, premium, if any, or interest on the Bonds, the Consolidated Government’s obligations under the Contracts or other costs incident thereto. The Consolidated Government has no authority to levy any taxes to pay the Bonds or the Contracts. Neither the members of the Governing Body nor any person executing the Bonds shall be liable personally on the Bonds by reason of the issuance thereof or on the Contracts by reason of the execution thereof. (f) Other Airport Obligations (other than obligations treated as Senior Lien Bonds or Subordinate Lien Bonds pursuant to Section 502(c) or 503(b)(10)) that are not secured by a lien on any category of Revenues will not have a lien on any category of Revenues, but such obligations, prior to an Event of Default, may be paid from Revenues from the Subordinate Securities Fund as described in Section 403(b) and Section 406. Section 402 Funds, Accounts, and Subaccounts. Pursuant to the Prior Resolution, the Augusta Aviation Commission established funds and accounts with respect to the Airport, and, notwithstanding Section 416 of the Prior Resolution, such funds and accounts shall continue to be maintained under the Bond Resolution. The following funds, accounts, and subaccounts with respect to the Airport, and the moneys deposited in such funds, accounts, and subaccounts shall continue to be held in trust for the purposes set forth in the Bond Resolution. To the extent such funds and accounts are currently held by a Depository other than the Depositories authorized herein, such amounts on deposit in such funds and accounts shall be transferred to the Depositories authorized herein on or prior to the date of issuance of the Series 2015 Bonds. (a) Augusta, Georgia Airport Revenue Fund to be held by _____________, as Depository, for the account of the Augusta Aviation Commission, and within the Revenue Fund: (1) General Revenue Account. (2) Special Purpose Revenue Account. (3) Released Revenue Account. (b) Augusta, Georgia Airport PFC Revenue Fund to be held by ____________, as Depository, for the account of the Augusta Aviation Commission, and within the PFC Revenue Fund, the Pledged PFC Account, the Pledged PFC Series 2015 Account and Pledged PFC Series Accounts as may be created and established in a Supplemental Bond Resolution. (c) Augusta, Georgia Airport Operation and Maintenance Fund to be held by _______________, as Depository, for the account of the Augusta Aviation Commission. 38 (d) Augusta, Georgia Airport Operation and Maintenance Reserve Fund, currently held and to be held by U.S. Bank National Association, as Depository for the account of the Augusta Aviation Commission. (e) Augusta, Georgia Airport Debt Service Fund, currently held and to be held by U.S. Bank National Association, as Depository for the account of the Augusta Aviation Commission, and within the Debt Service Fund: (i) Interest Account, with a Series 2015A Subaccount and a Series 2015B Subaccount and additional subaccounts therein for each series of Bonds; provided a subaccount therein may be utilized for more than one series of Bonds if all such series share exactly the same lien status on the same categories of Revenues. (ii) Contract Payments Account, with subaccounts therein for each series of Bonds; provided a subaccount therein may be utilized for more than one series of Bonds if all such series share exactly the same lien status on the same categories of Revenues and are secured in parity by the same or identical Contracts with the same provider. (iii) Principal Account, with a Series 2015A Subaccount and a Series 2015B Subaccount and additional subaccounts therein for each series of Bonds; provided a subaccount therein may be utilized for more than one series of Bonds if all such series share exactly the same lien status on the same categories of Revenues. (f) Augusta, Georgia Airport Debt Service Reserve Fund, with a Series 2015A Account and a Series 2015B Account and additional accounts for each series of Bonds which has a Debt Service Reserve Requirement; provided an account therein may be utilized for more than one series of Bonds if all such series are specified in the related Supplemental Bond Resolutions to share a pledge of such account and have a combined Debt Service Reserve Requirement. (g) [Reserved]. (h) Augusta, Georgia Airport Construction Fund held for the account of the Augusta Aviation Commission, and within the Construction Fund the Capitalized Interest Account. (i) Augusta, Georgia Airport Rebate Fund currently held and to be held by U.S. Bank National Association for the account of the Augusta Aviation Commission. (j) Augusta, Georgia Airport Subordinate Securities Fund held for the account of the Augusta Aviation Commission. (k) Augusta, Georgia Airport Capital Improvement Fund to be held by ____________, as Depository, for the account of the Augusta Aviation Commission, and within the Capital Improvement Fund: (i) Capital Improvement Account. (ii) Revenue Credit Account. 39 (l) Augusta, Georgia Airport PFC Capital Fund to be held by ____________, as Depository, for the account of the Augusta Aviation Commission. (m) Each account listed above shall be held within the fund under which it is created. All funds and accounts listed above are further described in this Article, except for (i) the Rebate Fund and (ii) the Construction Fund, which are further described in Articles VI and XII respectively. All such funds and accounts shall be held in the name of the Augusta Aviation Commission and shall be held by the Augusta Aviation Commission on behalf of the Consolidated Government. The Augusta Aviation Commission reserves the right, in its sole discretion, to create or to abolish subaccounts within any account from time to time. The Debt Service Fund and the Debt Service Reserve Fund and each account therein, must at all times be trust accounts. (n) Any Depository or Custodian appointed under the Bond Resolution shall be a bank or trust company within the State which is duly authorized to exercise corporate trust powers and which is subject to examination by federal or State authority (including all national banks), of good standing, and has combined capital, surplus and undivided profits aggregating not less than $50,000,000. (o) Amounts on deposit in the Augusta, Georgia Airport Renewal and Replacement Fund created under the Prior Resolution shall be deposited to the Capital Improvement Account of the Capital Improvement Fund upon the issuance and delivery of the Series 2015 Bonds. Section 403 Revenue Fund, PFC Revenue Fund, and Operation and Maintenance Fund. (a) Revenue Fund; PFC Revenue Fund. The Consolidated Government, acting by and through the Augusta Aviation Commission, shall continue to collect Revenues derived from the ownership and operation of the Airport and shall deposit and continue to deposit all Revenues other than PFC Revenues in the Revenue Fund from time to time as and when received and shall deposit and continue to deposit all PFC Revenues in the PFC Revenue Fund from time to time as and when received. The amounts deposited to the Revenue Fund shall be immediately allocated to the account within the Revenue Fund designated therefor: General Revenues to the General Revenue Account; Special Purpose Revenues to the Special Purpose Revenue Account; and Released Revenues to the Released Revenue Account. The amounts deposited to the PFC Revenue Fund shall be immediately allocated to the account designated therefor as described in Section 403(c). (b) Application of Revenue Fund. Moneys in the Revenue Fund shall be applied from time to time to the following purposes and in the following order of priority subject to the limitations set forth in paragraph (d) of this Section: (i) to deposit into the Operation and Maintenance Fund amounts to pay Expenses of Operation and Maintenance; (ii) to deposit into the Debt Service Fund (other than the Contract Payments Account) the amounts required by Section 404; (iii) to deposit into the Rebate Fund the amounts required by Section 611; (iv) to deposit into the Operation and Maintenance Reserve Fund the amounts required by Section 405; (v) to pay to any party to a Contract the amounts due thereon, including continuing commission or commitment fees and repayment of amounts equivalent to principal on related Bonds, 40 including Additional Interest; (vi) to pay any amounts into the Subordinate Securities Fund pursuant to Section 406 required to be paid with respect to Subordinate Lien Bonds and then with respect to any Other Airport Obligations not secured by a lien on Revenues; and (vii) to transfer the balance of the Revenue Fund to the Capital Improvement Fund. (c) Application of PFC Revenue Fund. Moneys in the PFC Revenue Fund shall be applied from time to time to the following purposes and in the following order of priority: (i) PFC Revenues pledged to the payment of PFC Stand-Alone Revenue Bonds shall be deposited to the related accounts within the Debt Service Fund (other than the Contract Payments Account); (ii) amounts constituting Pledged PFC Revenues shall be transferred to the Pledged PFC Account (and credited to the Pledged PFC Series Accounts held within the Pledged PFC Account); and (iii) the balance of the PFC Revenue Fund shall be transferred to the PFC Capital Fund. Amounts on deposit in the Pledged PFC Series Accounts shall be deposited to the related accounts within the Debt Service Fund (other than the Contract Payments Account) as required by Section 404 to pay PFC eligible debt service. (d) Additional Provisions. Notwithstanding the foregoing paragraphs: (1) For Expenses of Operation and Maintenance, (A) amounts in the Special Purpose Revenue Account shall be used only for Expenses of Operation and Maintenance of Special Purpose Facilities, (B) amounts in the Released Revenue Account shall be used only for Expenses of Operation and Maintenance of Released Revenue Facilities, and (C) Expenses of Operation and Maintenance related to General Revenues shall be paid from amounts in the General Revenue Account; (2) For deposits to the Debt Service Fund, the Debt Service Reserve Fund or the Rebate Account, (A) amounts in the Special Purpose Revenue Account shall be used only for deposits to subaccounts relating to Bonds which have a lien on any Special Purpose Revenues, (B) amounts in the Released Revenue Account shall be used only for deposits to subaccounts relating to Bonds which have a lien on any Released Revenues or for other purposes pursuant to Section 505, (C) amounts in a Pledged PFC Account shall be used only for deposits to subaccounts relating to Bonds which have a lien on Pledged PFC Revenues, and (D) deposits to subaccounts relating to Bonds which have a lien on General Revenues shall be made from amounts in the General Revenue Account; (3) For any payments on a Contract, amounts may be drawn only from the account or accounts relating to the Revenues securing the Bonds related to such Contract, only in accordance with the strictures of (2) and, unless otherwise provided in the related Supplemental Bond Resolution because a Credit Facility is intended to be drawn on for payments on Bonds, only after all payments then due with respect to the related Bonds have been made; (4) For any payments with respect to any Other Airport Obligations, (A) if such Other Airport Obligations relate to Special Purpose Facilities, from the Special Purpose Revenue Account; (B) if such Other Airport Obligations relate to Released Revenue Facilities, then from the Released Revenue Account; and (C) otherwise, from the General Revenue Account; 41 (5) No payments may be made with respect to any Other Airport Obligations unless all required payments have been made to each subaccount with respect to Bonds and on all Contracts and with respect to Subordinate Lien Bonds; provided if required by the terms thereof, obligations treated as Senior Lien Bonds or Subordinate Lien Bonds pursuant to Section 502(c) or 503(b)(10) shall be paid with the other Senior Lien Bonds or Subordinate Lien Bonds; (6) If at any time the amounts in any subaccount of the Debt Service Fund or the Debt Service Reserve Fund are less than the amounts required by the Bond Resolution, and there are not on deposit in the Capital Improvement Fund available moneys sufficient to cure any such deficiency, then the Consolidated Government shall withdraw from the Subordinate Securities Fund subaccounts related to Subordinate Lien Bonds and deposit in such subaccount of the Debt Service Fund or the Debt Service Reserve Fund, as the case may be, the amount necessary (or all the moneys in such funds and accounts, if less than the amount required) to make up such deficiency; provided no such amounts shall be withdrawn from or payable to subaccounts related to Special Purpose Revenue Bonds. (e) Operation and Maintenance Fund. Moneys on deposit in the Operation and Maintenance Fund shall be disbursed for the purpose of paying Expenses of Operation and Maintenance. In each month, commencing with the 15th business day of each month, there shall be deposited to the Operation and Maintenance Fund an amount determined by the Airport Finance Officer to be necessary to be credited to said fund to pay Expenses of Operation and Maintenance for such month. Section 404 Debt Service Fund and Debt Service Reserve Fund. Sufficient moneys shall be paid in periodic installments from the Revenue Fund and, to the extent so pledged, the Pledged PFC Series Accounts held within the Pledged PFC Account, into the following accounts and subaccounts for the purpose of paying the Bonds as they become due and payable and for the purpose of making payments under Contracts. (a) Interest Account. Unless otherwise provided in a Supplemental Bond Resolution, on or before the last day of each month for a series of Bonds, there shall be deposited in the related subaccount of the Interest Account one-sixth of the amount of the interest due with respect to each series of Bonds on the next Interest Payment Date taking into account any other moneys on deposit therein or in the Capitalized Interest Account and available to make such payment, and further adjusted if necessary to insure the timely accumulation of the required amount in approximately equal installments, which amount shall not be less than the interest coming due on such Bonds on such Interest Payment Date. To the extent that any of the Bonds bear interest at a Variable Rate, this requirement shall be deemed satisfied with respect to such Bonds if the installment paid into the related subaccount of the Interest Account in each month shall be sufficient to accumulate for such Bonds an amount equal to 1/6th of the Projected Interest Payment multiplied by the number of months and fractions of months expired since delivery of such Bonds or the most recent Interest Payment Date. Moneys in the related subaccount of the Interest Account shall be used solely to pay interest on the Bonds when due or to pay Reimbursement Obligations for Credit Facilities under which the Credit Issuer makes all interest payments on the Bonds. The Consolidated Government shall also deposit and continue to deposit any payments from a Credit Issuer under 42 a Credit Facility Agreement in the related subaccount of the Interest Account from time to time as and when received. (b) Contract Payments Account. Unless otherwise provided in a Supplemental Bond Resolution or a Contract, on or before the 30th day preceding each payment date for amounts, other than for Reimbursement Obligations, due on Contracts, including continuing commission or commitment fees, there shall be deposited in the related subaccount of the Contract Payments Account an amount which, together with any other moneys already on deposit therein and available to make such payment, is not less than the amount coming due on such payment date. Moneys in the related subaccount of the Contract Payments Account shall be used solely for such payments when due. (c) Principal Account. Unless otherwise provided in a Supplemental Bond Resolution, on or before the last day of each month, there shall be deposited in the related subaccount of the Principal Account one-twelfth of the amount of the principal due with respect to such series of Bonds on the next Principal Maturity Date, and further adjusted if necessary to insure the timely accumulation of the required amount in approximately equal installments, which amount shall not be less than the principal coming due on such Bonds on such Principal Maturity Date. Moneys in the related subaccount of the Principal Account shall be used solely for the payment of principal of the Bonds as the same shall become due and payable at maturity or upon redemption or to pay Reimbursement Obligations for Credit Facilities under which the Credit Issuer makes all principal payments on the Bonds. (d) Additional Provisions Relating to Interest and Principal Subaccounts. No further payments need be made into a subaccount of the Interest Account or the Principal Account whenever the amount available in such subaccount of the Interest Account and the related subaccount of the Principal Account, if added to the amount then in the related subaccounts of the Capitalized Interest Account and of the Debt Service Reserve Fund, if any (without taking into account any amount available to be drawn on any applicable Reserve Account Credit Facility), is sufficient to retire all the Bonds then Outstanding and Contracts to which such subaccounts relate and to pay all unpaid interest accrued and to accrue prior to such retirement. No moneys in any subaccount of the Interest Account or the Principal Account shall be used or applied to the optional purchase or redemption of Bonds prior to maturity unless: (i) provision shall have been made for the payment of all of the Bonds to which such subaccount relates and all other Bonds having a parity or higher ranking lien on any category of Revenues securing such Bonds; or (ii) the Bonds to which such subaccount relates are Senior Lien Bonds and such moneys are applied to the purchase and cancellation of such Bonds which are subject to mandatory redemption on the next mandatory redemption date, which falls due within 12 months, such Bonds are purchased at a price not more than would be required for mandatory redemption, and such Bonds are cancelled upon purchase and credited against the redemption otherwise to be made on such mandatory redemption date; or (iii) the Bonds to which such subaccount relates are Senior Lien Bonds and such moneys are applied to the purchase and cancellation of such Bonds at a price less than the amount of principal which would be payable on such Bonds, together with interest accrued through the date of purchase, and such Bonds are cancelled upon purchase; or (iv) the Bonds to which such subaccount relates are Senior Lien Bonds and such moneys are in excess of the then required balance of the related subaccount in the Interest Account or the Principal Account and are applied to redeem a 43 part of such Bonds on the next succeeding redemption date for which the required notice of redemption may be given. (e) Debt Service Reserve Fund. Upon the issuance of the Series 2015 Bonds, there shall be deposited into subaccounts of the Debt Service Reserve Fund the amounts specified in Section 1101(a)(ii) and (b)(ii) hereof. There shall be deposited into the same account or separate accounts of the Debt Service Reserve Fund the amounts specified in Supplemental Bond Resolutions with respect to Additional Bonds. After the issuance of any Additional Bonds, any increase in the amount of the Debt Service Reserve Requirement resulting from the issuance of Additional Bonds which also are secured by an existing subaccount of the Debt Service Reserve Fund shall be funded upon the issuance and delivery of such Additional Bonds. The balance of each subaccount of the Debt Service Reserve Fund shall be maintained at an amount equal to the Debt Service Reserve Requirement for the related Bonds (or such lesser amount that is required upon the failure of the Consolidated Government to provide a substitute Reserve Account Credit Facility in certain events). There shall be transferred from the Revenue Fund on a pro rata basis (1) to each account of the Debt Service Reserve Fund the amount necessary to restore the amount of cash and securities in such account of the Debt Service Reserve Fund to an amount equal to the difference between (a) the Debt Service Reserve Requirement for the related Bonds (or such lesser monthly amount that is required to be deposited into the Debt Service Reserve Fund upon the failure of the Consolidated Government to provide a substitute Reserve Account Credit Facility in certain events), and (b) the portion of the required balance of such subaccount of the Debt Service Reserve Fund satisfied by means of a Reserve Account Credit Facility, and (2) to any Reserve Account Credit Facility Provider the amount necessary to reinstate any Reserve Account Credit Facility which has been drawn down. Whenever, on the date that such interest or principal is due on any Senior Lien Bonds, there are insufficient moneys in the related subaccounts of the Interest Account or the Principal Account available to make such payment, the Augusta Aviation Commission, on behalf of the Consolidated Government shall, without further instructions, apply so much as may be needed of the moneys in the related account, if any, of the Debt Service Reserve Fund to prevent default in the payment of such interest or principal, with priority to interest payments. Whenever by reason of any such application or otherwise the amount remaining to the credit of the related subaccount of the Debt Service Reserve Fund is less than the amount then required to be in such subaccount of the Debt Service Reserve Fund, such deficiency shall be remedied by not more than twelve equal monthly deposits from the related account or accounts of the Revenue Fund, to the extent funds are available in the related account or accounts of the Revenue Fund for such purpose after all required transfers set forth above have been made. (f) Reserve Account Credit Facility. The Debt Service Reserve Requirement for any Bonds may be satisfied in whole or in part by means of a Reserve Account Credit Facility, subject to the following requirements: (A) the Reserve Account Credit Facility Provider must have a credit rating issued by a Rating Agency not less than the Rating on the related series of Bonds at the time of issuance; (B) the obligations of the Consolidated Government shall not be secured by a lien equal to or superior to the lien granted to the related series of Bonds; (C) each Reserve Account Credit Facility shall have a term of at least one (1) year (or, if less, the remaining term of the related series of Bonds) and shall entitle the holder to draw upon or demand payment and receive the amount so requested in immediately available funds on the date of such draw or demand; (D) the Reserve Account Credit Facility shall permit a drawing 44 for the full stated amount in the event (i) the Reserve Account Credit Facility expires or terminates for any reason prior to the final maturity of the related series of Bonds, and (ii) the Augusta Aviation Commission, on behalf of the Consolidated Government, fails to satisfy the Debt Service Reserve Requirement by the deposit to the Debt Service Reserve Fund of cash, obligations, a substitute Reserve Account Credit Facility, or any combination thereof, on or before the date of such expiration or termination; (E) if the Rating issued by the Rating Agency to the Reserve Account Credit Facility Provider is withdrawn or reduced below the Rating assigned to the related series of Bonds immediately prior to such action by the Rating Agency, the Augusta Aviation Commission, on behalf of the Consolidated Government, shall provide a substitute Reserve Account Credit Facility within sixty (60) days after such rating change, and, if no substitute Reserve Account Credit Facility is obtained by such date, shall fund the Debt Service Reserve Requirement in not more than twenty-four (24) equal monthly deposits commencing not later than the first day of the month immediately succeeding the date representing the end of such sixty (60) day period; and (F) if the Reserve Account Credit Facility Provider commences any insolvency proceedings or is determined to be insolvent or fails to make payments when due on its obligations, the Augusta Aviation Commission, on behalf of the Consolidated Government, shall provide a substitute Reserve Account Credit Facility within sixty (60) days thereafter, and, if no substitute Reserve Account Credit Facility is obtained by such date, shall fund the Debt Service Reserve Requirement in not more than twenty-four (24) equal monthly deposits commencing not later than the first day of the month immediately succeeding the date representing the end of such sixty (60) day period. If the events described in either clauses (E) or (F) above occur, the Reserve Account Credit Facility at issue shall not be relinquished until after the Debt Service Reserve Requirement is fully satisfied by the provision of cash, obligations, or a substitute Reserve Account Credit Facility or any combination thereof. Any amount received from the Reserve Account Credit Facility shall be deposited directly into the related subaccounts of the Interest Account and the Principal Account, and such deposit shall constitute the application of amounts in the related subaccount of the Debt Service Reserve Fund. Repayment of any draw-down on the Reserve Account Credit Facility (other than repayments which reinstate the Reserve Account Credit Facility) and any interest or fees due the Reserve Account Credit Facility Provider under such Reserve Account Credit Facility shall be secured by a lien on Revenues, subordinate to the lien of the related Bonds for payments into the related subaccounts of the Debt Service Fund and the Rebate Fund and payments on any Financial Facility securing the related Bonds. Any such Reserve Account Credit Facility shall be pledged to the benefit of the owners of all of the Bonds secured by it. The Consolidated Government reserves the right, if it deems it necessary in order to acquire such a Reserve Account Credit Facility, to amend the Bond Resolution without the consent of any of the owners of the Bonds in order to grant to the Reserve Account Credit Facility Provider such additional rights as it may demand, provided that such amendment shall not, in the written opinion of Bond Counsel filed with the Consolidated Government, impair or reduce the security granted to the owners of Bonds or any of them. Section 405 Operation and Maintenance Reserve Fund. At the time of the issuance and delivery of the Series 2015 Bonds, there shall be on deposit in the Operation and Maintenance Reserve Fund an amount equal to 60 days’ Expenses of Operation and Maintenance (the “Operating Reserve”). Thereafter, there shall be deposited 45 monthly to the Operation and Maintenance Reserve Fund an amount, if any, necessary to maintain a balance equal to the Operating Reserve as estimated by the Airport Finance Officer. Amounts held within the Operation and Maintenance Reserve Fund shall be disbursed solely for the purposes of paying Expenses of Operation and Maintenance in the event there shall be insufficient money in the Revenue Fund to pay the same when due. Section 406 Subordinate Securities Fund. After all deposits are made as required pursuant to Sections 403, 404 and 405, there shall be deposited sufficient moneys to be paid in periodic installments from the Revenue Fund into the Subordinate Securities Fund for the purpose of paying Subordinate Lien Bonds and Other Airport Obligations as they become due and payable. Such periodic installments shall be paid into the Subordinate Securities Fund in accordance with the terms of such Other Airport Obligations or as set forth in a Supplemental Resolution. In connection with the issuance of any Subordinate Lien Bonds or Other Airport Obligations, the Augusta Aviation Commission may place additional restrictions on the use of funds on deposit in the Subordinate Securities Fund, and may agree that such fund will be a trust fund. Section 407 [Reserved]. Section 408 Capital Improvement Fund. Moneys transferred into the Capital Improvement Fund shall be applied to the Capital Improvement Account and to the Revenue Credit Account at the discretion of the Augusta Aviation Commission. Moneys in the Revenue Credit Account shall be transferred at the beginning of each Fiscal Year to the General Revenue Account of the Revenue Fund and applied for such Fiscal Year as a credit in the calculation of such fees and charges as determined by the Augusta Aviation Commission that are related to the Airport. All sums accumulated and retained in the Capital Improvement Account shall be used first to prevent default in the payment of interest on or principal of any General Revenue Bonds when due and then shall be applied from time to time, to the following purposes and, prior to the occurrence and continuation of an Event of Default, in the order of priority determined by the Augusta Aviation Commission, in its sole discretion: (a) for the purposes for which moneys held in the Revenue Fund may be applied under Section 403, (b) to pay any governmental charges and assessments against the Airport or any part thereof which may then be due and owing, (c) to make acquisitions, betterments, extensions, repairs, or replacements or other capital improvements (including the purchase of equipment) to the Airport deemed necessary by the Augusta Aviation Commission (including payments under contracts with vendors, suppliers, and contractors for the foregoing purposes), (d) for lawful Airport Purposes and (e) to acquire Senior Lien Bonds by redemption or by purchase in the open market in accordance with the terms and conditions of the Bond Resolution, which Senior Lien Bonds may be any of the Senior Lien Bonds, prior to their respective maturities, and when so used for such purposes the moneys shall be withdrawn from the Capital Improvement Account and deposited into the related subaccounts of the Interest Account and the Principal Account for the Bonds to be so redeemed or purchased. 46 Section 409 Deposits and Security of Funds and Accounts. All moneys in the funds and accounts established under the Bond Resolution shall be held by the Augusta Aviation Commission, on behalf of the Consolidated Government, in one or more Depositories meeting the requirements of Section 402(d). Uninvested moneys shall, at least to the extent not guaranteed by the Federal Deposit Insurance Corporation, be secured to the fullest extent required by the laws of the State for the security of public funds. Section 410 Investment of Funds and Accounts. Moneys in the funds and accounts established under the Bond Resolution shall be invested and reinvested in Permitted Investments. Investment Earnings in each fund and account (except the Debt Service Reserve Fund) shall be retained therein. Investment Earnings from the investment of moneys in each subaccount of the Debt Service Reserve Fund shall be retained in such subaccount of the Debt Service Reserve Fund at all times the balance is less than the respective Debt Service Reserve Requirement; thereafter and at all times the balance of such subaccount of the Debt Service Reserve Fund is equal to or greater than the respective Debt Service Reserve Requirement, such Investment Earnings shall be deposited in the related subaccount of the Interest Account. The Supplemental Bond Resolution authorizing the issuance of any Bonds may specify maturity limitations and different allocations of Investment Earnings on investments of moneys in the funds and accounts relating to such Bonds. Moneys in each of such funds shall be accounted for as a separate and special fund apart from all other Airport funds, provided that investments of moneys therein may be made in a pool of investments together with other moneys of the Airport so long as sufficient Permitted Investments in such pool, not allocated to other investments of contractually or legally limited duration, are available to meet the requirements of the foregoing provisions. Section 411 PFC Capital Fund. All amounts remaining in the PFC Revenue Fund after being used for deposits to the Debt Service Fund for Stand-Alone PFC Revenue Bonds and related Contracts and the Pledged PFC Account shall be transferred to the PFC Capital Fund. Amounts held in the PFC Capital Fund shall be used to pay Costs of PFC Facilities and administrative costs of the PFC program. Section 412 Valuation of Investments. All investments made for any fund, account or subaccount under the Bond Resolution shall, for purposes of the Bond Resolution, be valued at fair market value on each related Interest Payment Date. Section 413 Application of Excess in Debt Service Fund. Whenever on any January 2 the amount of moneys in any account or subaccount of the Debt Service Fund exceeds the sum of the amount then currently required to be held therein plus 47 the earnings on the account or subaccount for the immediately preceding Bond Year, the excess shall be transferred to the related account in the Revenue Fund. Any excess in an account of the Debt Service Reserve Fund shall be transferred to the related subaccount of the Interest Account of the Debt Service Fund. Section 414 Disposition of Moneys After Payment of Bonds and Contracts. Any amounts remaining in any fund or account established under the Bond Resolution after payment in full of the principal of, redemption premium, if any, and interest on the Bonds (or after provision for payment thereof has been made) and obligations treated as Senior Lien Bonds or Subordinate Lien Bonds pursuant to Section 502(c) or 503(b)(10), the fees, charges, and expenses of the Paying Agent and Bond Registrar, all amounts owing to any Financial Facility Issuer, any Reserve Account Credit Facility Provider, and any party to a Contract, and all other amounts required to be paid under the Bond Resolution (including amounts required to be paid into the Rebate Fund), shall be promptly paid to the Augusta Aviation Commission. 48 ARTICLE V ADDITIONAL BONDS; CONTRACTS; OTHER OBLIGATIONS Section 501 No Bonds Except as Permitted in the Bond Resolution. No Bonds, except for the Series 2015 Bonds, may be issued and no other obligations, except Contracts, which are secured by any interest in or lien on Pledged Revenues may be entered into except pursuant to Sections 502, 503, 504 or 505. Section 502 Additional General Revenue Bonds. (a) Any portion or all of a series of General Revenue Bonds may be refunded prior to their maturity and upon redemption in accordance with their terms, and the refunding General Revenue Bonds so issued shall constitute Additional Bonds secured on a parity with any General Revenue Bonds secured on a parity therewith, if all of the following conditions are satisfied: (1) The Consolidated Government shall have obtained a certificate of the Airport Finance Officer demonstrating that the refunding will reduce the total debt service payments on Outstanding General Revenue Bonds, including payments on related Contracts, which are secured on a parity with the General Revenue Bonds to be refunded, all on a present value basis; or (2) as an alternative to, and in lieu of, satisfying the requirements of (1), all Outstanding General Revenue Bonds which are secured on a parity with the Bonds to be refunded are being refunded under arrangements which immediately result in making provision for the payment of such General Revenue Bonds; and (3) the requirements of (b)(3), (6), (7) and (8) are met with respect to such refunding General Revenue Bonds. (b) Additional Bonds (including refunding General Revenue Bonds which do not meet the requirements of subsection (a) of this Section) may also be issued on a parity with Outstanding General Revenue Bonds pursuant to a Supplemental Bond Resolution, and the General Revenue Bonds so issued shall be secured on a parity with such Outstanding General Revenue Bonds, if all of the following conditions are satisfied: (1) There shall have been procured and filed with the Consolidated Government either: (A) a certificate of the Airport Finance Officer to the effect that the Amount Available to Pay Debt Service, for each of the two most recent audited Fiscal Years, was equal to at least 125 percent of the Maximum Annual Debt Service Requirement on all General Revenue Bonds which will be Outstanding immediately after the issuance of the proposed Additional Bonds and secured on a parity therewith, or 49 (B) a report by an Airport Consultant to the effect that in each Fiscal Year of the Forecast Period the forecasted Amount Available to Pay Debt Service is expected to equal at least the sum of (x) 125 percent of the Annual Debt Service Requirement on all General Revenue Bonds which will be Outstanding immediately after the issuance of the proposed Additional Bonds and secured on a parity therewith and (y) 100 percent of the maximum amount of debt service or other amounts payable in any subsequent Fiscal Year on all Subordinate Lien Bonds and Other Airport Obligations. The certificate of the Airport Finance Officer that is required by (b)(1)(A) may contain pro forma adjustments to historical Net General Revenues equal to 100 percent of the increased annual amount attributable to any revision in the schedule of rates, fees, and charges for the services and facilities furnished by the Airport imposed prior to the date of delivery of the proposed Additional Bonds and not fully reflected in the historical related Net General Revenues actually received during such historical period used. Such pro forma adjustments, if any, shall be based upon a report of an Airport Consultant as to the amount of General Revenues which would have been received during such period had the new rate schedule been in effect throughout such period. (2) [Reserved]. (3) The Airport Finance Officer shall have certified, at or before issuance of the Additional Bonds, that the payments required to be made into each account or subaccount of the Debt Service Fund and the Debt Service Reserve Fund have been made and the balance in each account or subaccount of the Debt Service Fund and the Debt Service Reserve Fund is not less than the balance required by the Bond Resolution as of the date of issuance of the proposed Additional Bonds. (4) The Supplemental Bond Resolution authorizing the proposed Additional Bonds must require (i) that the amount to be accumulated and maintained in the subaccount of the Debt Service Reserve Fund for Bonds which are to be secured on a parity with such Additional Bonds, if any, be increased to not less than 100 percent of the Debt Service Reserve Requirement computed on a basis which includes all Bonds which will be Outstanding and secured on a parity with the Additional Bonds immediately after the issuance of the proposed Additional Bonds and (ii) that the amount of such increase be deposited in such subaccount on or before the date specified in Section 404(f). (5) The Supplemental Bond Resolution authorizing the proposed Additional Bonds must require the proceeds of such proposed Additional Bonds to be used solely to make capital improvements to the Airport, to fund capitalized interest on any Bonds, to fund debt service reserves, to refund other obligations issued for such purposes (whether or not such refunding Bonds satisfy the requirements of (a)), and to pay expenses incidental thereto and to the issuance of the proposed Additional Bonds. (6) The Airport Director and the Airport Finance Officer shall have certified, by written certificate dated as of the date of issuance of the Additional Bonds, that the Consolidated Government is in compliance with all requirements of the Bond Resolution. 50 (7) The Consolidated Government shall have received an opinion of Bond Counsel, dated as of the date of issuance of the Additional Bonds, to the effect that the Supplemental Bond Resolution and any related Supplemental Resolution authorizing the issuance of Additional Bonds have been duly adopted by the Consolidated Government. (8) If the Additional Bonds would bear interest at a Variable Rate, the Supplemental Bond Resolution under which such Additional Bonds are issued shall provide a maximum rate of interest per annum that such Additional Bonds may bear. (c) Obligations which would be Other Airport Obligations but for the existence of a Senior Lien on a category of Revenues securing such obligations may be issued and so secured, and thereafter will be treated as Senior Lien Bonds, if all of the conditions of (b)(1) or (2), as applicable, and (b)(3) through (8) are satisfied treating such obligations as Additional Bonds and the issuance and security documents therefor as Supplemental Bond Resolutions. The Augusta Aviation Commission shall notify the Rating Agencies of its intent to so secure Other Airport Obligations. Section 503 Subordinate Lien Bonds. (a) The Consolidated Government reserves the right to issue bonds or other obligations with a Subordinate Lien on the related Revenues provided the conditions of this Section are met. In the event such Subordinate Lien Bonds are issued, amounts in the Subordinate Securities Fund shall be used to pay such Subordinate Lien Bonds, unless such Bonds are to be secured by Pledged PFC Revenues. In the event such Subordinate Lien Bonds are issued, payments from the PFC Revenue Fund to the PFC Capital Fund shall be suspended and the amounts which otherwise would have been transferred to the PFC Capital Fund may be used to pay such Subordinate Lien Bonds. (b) The documents and proceedings pursuant to which such Subordinate Lien Bonds are issued or incurred shall contain provisions to the effect that: (1) Such Subordinate Lien Bonds shall be junior and subordinate in lien and right of payment (A) directly, to any Outstanding Bonds or Bonds issued in the future which have a Senior Lien on a category of Revenues as to which such proposed Additional Bonds have a Subordinate Lien, and (B) indirectly (as a result of the requirements in Sections 404(f) and this 503, to withdraw certain amounts at certain times from subaccounts related to Subordinate Lien Bonds in the Subordinate Securities Fund), to any other Outstanding Bonds or Bonds issued in the future. (2) Unless such Bonds are to be secured by Pledged PFC Revenues, funds and accounts shall be established for the moneys securing such bonds in the Subordinate Securities Fund to be used to pay debt service on the Subordinate Lien Bonds, and to provide reserves therefor. If Subordinate Lien Bonds are to be secured by Pledged PFC Revenues, the Supplemental Bond Resolution shall establish funds and accounts for the moneys securing such Bonds, to be used to pay debt service on such Bonds, and to provide reserves therefor. (3) The requirements of Section 502(b)(5), (6), (7) and (8) are met with respect to such Subordinate Lien Bonds. 51 (4) In the event of any insolvency or bankruptcy proceedings, and any receivership, liquidation, reorganization, or other similar proceedings in connection therewith, relative to the Consolidated Government or to its property, and in the event of any proceedings for voluntary liquidation, dissolution, or other winding up of the Consolidated Government, whether or not involving insolvency or bankruptcy, the owners of all Bonds issued pursuant to this Resolution then Outstanding and parties to related Contracts shall be entitled to receive payment in full of all principal and interest due on all such Bonds and related Contracts in accordance with the provisions of the Bond Resolution and related Contracts before the owners of any Subordinate Lien Bonds having a Subordinate Lien on a category of Revenues as to which Bonds have a Senior Lien are entitled to receive any payment from the related Revenues, or the amounts held in the funds and accounts created under the Bond Resolution on account of principal of, premium, if any, or interest on the Subordinate Lien Bonds or related Contracts. (5) In the event that any of the Subordinate Lien Bonds are declared due and payable before their expressed maturities because of the occurrence of an event of default (under circumstances when the provisions of paragraph (4) shall not be applicable), no owners of such Subordinate Lien Bonds or parties to related Contracts may receive any accelerated payment from the Revenues or the amounts held in the funds and accounts created under this Bond Resolution until the owners of all Bonds Outstanding hereunder having a Senior Lien on a category of Revenues as to which such Subordinate Lien Bonds have a Subordinate Lien and parties to related Contracts have received payment in full of all principal and interest on all such Bonds and all payments on related Contracts. (6) If any Event of Default shall have occurred and be continuing (under circumstances when the provisions of paragraph (4) shall not be applicable), the owners of all Bonds then Outstanding hereunder and parties to related Contracts shall be entitled to receive payment in full of all principal and interest then due on all such Bonds and related Contracts before the owners of the Subordinate Lien Bonds or parties to related Contracts are entitled to receive any payment from Pledged Revenues or the amounts held in the funds and accounts created under the Bond Resolution of principal of, premium, if any, or interest on the Subordinate Lien Bonds or payments under related Contracts. (7) No owner of Bonds, or party to any related Contract shall be prejudiced in its right to enforce subordination of the Subordinate Lien Bonds and related Contracts by any act or failure to act on the part of the Consolidated Government. (8) The obligations of the Consolidated Government to pay to the owners of the Subordinate Lien Bonds the principal of, premium, if any, and interest thereon in accordance with their terms and to pay parties to related Contracts in accordance with the terms of the related Contracts shall be unconditional and absolute. Nothing in the Bond Resolution shall prevent the owners of the Subordinate Lien Bonds or parties to related Contracts from exercising all remedies otherwise permitted by applicable law or under the Bond Resolution or the related Contracts upon default thereunder, subject to the rights contained in the Bond Resolution of the owners of Bonds and parties to related Contracts to receive cash, property, or securities otherwise payable or deliverable to the owners of the Subordinate Lien Bonds and parties to related Contracts, and any Supplemental Bond Resolution authorizing Subordinate Lien Bonds may provide that, insofar as a trustee or paying agent for the Subordinate Lien Bonds is 52 concerned, the foregoing provisions shall not prevent the application by such trustee or paying agent of any moneys deposited with such trustee or paying agent for the purpose of the payment of or on account of the principal of, premium, if any, and interest on such Subordinate Lien Bonds and payments under related Contracts if such trustee or paying agent did not have knowledge at the time of such application that such payment was prohibited by the foregoing provisions. (9) Any series of Subordinate Lien Bonds and related Contracts may have such rank or priority with respect to any other series of Subordinate Lien Bonds and related Contracts as may be provided in the Supplemental Bond Resolution authorizing such series of Subordinate Lien Bonds and may contain such other provisions as are not in conflict with the provisions of the Bond Resolution. (10) Obligations which would be Other Airport Obligations but for the existence of a Subordinate Lien on a category of Revenues securing such obligations may be issued and so secured, and thereafter will be treated as Subordinate Lien Bonds, if all of the conditions of 503(b)(1) through (5) are satisfied treating such obligations as Subordinate Lien Bonds and the issuance and security documents therefor as Supplemental Bond Resolutions. Section 504 Special Purpose Revenue Bonds; Additional Released Revenue Bonds; Other Airport Obligations; and PFC Stand-Alone Revenue Bonds. (a) Special Purpose Bonds and Additional Special Purpose Bonds may be issued after compliance with any requirements therefor set forth in any Supplemental Bond Resolution related to such Special Purpose Bonds and Additional Special Purpose Bonds. (b) Other Airport Obligations (other than obligations treated as Senior Lien Bonds or Subordinate Lien Bonds pursuant to Section 502(c) or 503(b)(10)) may not be accelerated for purposes of being paid from Revenues and, upon an event described in Section 503(b)(4), or an Event of Default, may not be paid from Revenues until the owners of all Senior Lien Bonds, Subordinate Lien Bonds, and related Contracts have been paid in full. (c) Additional Released Revenue Bonds may be issued after compliance with this Master Bond Resolution and any requirements therefor set forth in any Supplemental Bond Resolution related to such Additional Released Revenue Bonds. (d) PFC Stand-Alone Revenue Bonds and Additional PFC Stand-Alone Revenue Bonds may be issued after compliance with any requirements therefor set forth in any Supplemental Bond Resolution relating to such PFC Stand-Alone Revenue Bonds and Additional PFC Stand-Alone Revenue Bonds; provided however, no PFC Stand-Alone Revenue Bonds or Additional PFC Stand-Alone Revenue Bonds shall be issued unless there is first procured and filed with the Consolidated Government a certificate of the Airport Finance Officer that the test for issuing Additional Bonds set forth in Section 502(b)(1) has been satisfied with respect to the then outstanding General Revenue Bonds. The pledge of PFC Revenues to secure PFC Stand-Alone Revenue Bonds shall be provided for in the Supplemental Bond Resolution providing for the first issuance of PFC Stand-Alone Revenue Bonds. 53 Section 505 Released Revenues; Securitizations. (a) A separable category or portion of revenues, income, receipts and money relating to a definable service, facility or program of the Airport may be withdrawn from General Revenues and thereafter treated as Released Revenues for all purposes, including the security for Released Revenue Bonds, if the following conditions are met: (1) Filing of a report of an Independent Certified Public Accountant to the effect that the historical Amount Available to Pay Debt Service, determined excluding the General Revenues proposed to become Released Revenues, for each of the two most recent audited Fiscal Years prior to the date of such report were equal to at least 150%, of the Maximum Annual Debt Service Requirement on all General Revenue Bonds which will be Outstanding after the General Revenues become Released Revenues; (2) Rating Agency confirmation that the ratings on the respective Outstanding General Revenue Bonds will not be reduced as a result of such withdrawal of Released Revenues; (3) Filing of a written request of the Airport Director to release such category of Revenues, accompanied by a written certificate of the Airport Director and the Consolidated Government Finance Director certifying the Consolidated Government is in compliance with all requirements of the Bond Resolution; and (4) Either the report described in (1) above will include statements to the effect that, or there will be filed a separate report of an Independent Certified Public Accountant to the effect that, there are sufficient internal accounting and fiscal operations management practices in place at the Airport to provide an adequate basis for the additional accounting and related procedures required as a result of the release of revenues from General Revenues and the subsequent treatment thereof as Released Revenues. (b) Upon compliance with subsection (a), Released Revenues may be sold, leased or loaned to a related or unrelated Person in a securitization or other similar transaction wherein the Consolidated Government either receives the current estimated or present value calculated value of such Released Revenues or expects to receive a fee or other denominated amounts for the lease or loan of such Released Revenues. Section 506 Special Purpose Facilities. Facilities at the Airport may be designated by the Consolidated Government as “Special Purpose Facilities” by the filing of a certificate of the Airport Director with respect thereto if such facilities meet the definition of Special Purpose Facilities in Section 101. Section 507 Accession of Subordinate Lien Bonds and Related Contracts to Senior Lien Status. By proceedings authorizing Subordinate Lien Bonds or a lien permitted by Section 503(b)(10), the Consolidated Government may provide for the accession of such Subordinate Lien Bonds and related Contracts to the status of complete parity with any Bonds and related 54 Contracts with a lien on the same category of Revenues if, as of the date of accession, the conditions of Section 502(b)(1)(A) or (2)(A), as applicable, (5) and (6) are satisfied, on a basis that includes all Outstanding Bonds with a lien on the same category of Revenues and such Subordinate Lien Bonds, and if on the date of accession: (a) The account of the Debt Service Reserve Fund, if any, relating to the Bonds contains an amount equal to the Debt Service Reserve Requirement computed on a basis that includes all Outstanding Bonds with a lien on the same category of Revenues and such Subordinate Lien Bonds; and (b) The subaccounts of the Interest Subaccount, the Principal Subaccount and the Contract Payments Subaccount contain the amounts which would have been required to be accumulated therein on the date of accession if the Subordinate Lien Bonds had originally been issued as Bonds with a lien on the same category of Revenues. Section 508 Adoption of Proceedings and Validation. The Consolidated Government shall adopt a Supplemental Bond Resolution authorizing the issuance of any Additional Bonds reciting that the requirements of this Article have been satisfied, and shall set forth in such proceedings, among other things, the security therefor, the date or dates such Additional Bonds shall bear and the rate or rates of interest, interest payment date or dates, maturity date or dates, and redemption provisions with respect to such Additional Bonds and any other matters applicable to such Additional Bonds as the Consolidated Government may deem advisable. Any such Supplemental Bond Resolution shall restate and reaffirm, by reference, all of the applicable terms, conditions, and provisions of the Bond Resolution not modified by the Supplemental Bond Resolution. All Additional Bonds, any Supplemental Bond Resolution providing for Additional Bonds, and all proceedings relative thereto and the security therefor shall be validated as then prescribed by law. Section 509 Proceedings Authorizing Additional Bonds. No Supplemental Bond Resolution authorizing the issuance of Additional Bonds as permitted under this Article shall conflict with the terms and conditions of the Bond Resolution, except to the extent that the Supplemental Bond Resolution is adopted for one of the purposes set forth in Section 1001 and complies with the provisions of Section 1001 for the adoption of Supplemental Resolutions without the consent of Bondholders. Section 510 Applicability to Additional Bonds. The provisions of the Bond Resolution shall be construed as including and being applicable to any future series of Bonds, and any such Bonds shall be treated, unless otherwise specifically stated, as if such Additional Bonds were issued concurrently with the Series 2015 Bonds, pursuant to the terms of this Master Bond Resolution. 55 Section 511 Financial Facilities. In connection with the issuance of any Bonds, the Consolidated Government may obtain or cause to be obtained one or more Financial Facilities providing for payment of all or a portion of the principal of, premium, if any, or interest due or to become due on such Bonds, providing for the purchase of such Bonds by the Financial Facility Issuer, or providing funds for the purchase of such Bonds by the Consolidated Government. In connection therewith the Consolidated Government may enter into Financial Facility Agreements with such Financial Facility Issuers providing for, among other things, (i) the payment of fees and expenses to such Financial Facility Issuers for the issuance of such Financial Facilities; (ii) the terms and conditions of such Financial Facilities and the Bonds affected thereby; and (iii) the security, if any, to be provided for the issuance of such Financial Facilities. The Consolidated Government may secure any Financial Facility by an agreement providing for the purchase of the Bonds secured thereby with such adjustments to the rate of interest, method of determining interest, maturity, or redemption provisions as are specified by the Consolidated Government in the applicable Supplemental Bond Resolution. The Consolidated Government may in a Financial Facility Agreement agree to directly reimburse such Financial Facility Issuer for amounts paid under the terms of such Financial Facility, together with interest thereon; provided, however, that no Reimbursement Obligation shall be created for purposes of the Bond Resolution until amounts are paid under such Financial Facility. Any such Reimbursement Obligation shall be deemed to be a part of the Bonds to which the Financial Facility relates which gave rise to such Reimbursement Obligation, and references to principal and interest payments with respect to such Bonds shall include principal and interest (except for Additional Interest and principal amortization requirements with respect to the Reimbursement Obligation that are more accelerated than the amortization requirements for the related Bonds, without acceleration) due on the Reimbursement Obligation incurred as a result of payment of such Bonds with the Financial Facility. All other amounts payable under the Financial Facility Agreement (including any Additional Interest and principal amortization requirements with respect to the Reimbursement Obligation that are more accelerated than the amortization requirements for the related Bonds, without acceleration) shall be fully subordinate to the payment of debt service on the related class of Bonds. Any such Financial Facility shall be for the benefit of and secure such Bonds or portion thereof as specified in the applicable Supplemental Bond Resolution. Notwithstanding the other provisions hereof, the Consolidated Government’s obligations under a Financial Facility which requires the Financial Facility Issuer to make all interest payments due on the Bonds may be secured to the extent of such amounts by a pledge of, and lien on, the Pledged Revenues pledged to the payment of the related Bonds on a parity with such lien, or may be wholly or partially subordinate in lien and right of payment to the payment of the Bonds, as determined by the Consolidated Government. Section 512 Other Obligations. The Consolidated Government expressly reserves the right, at any time, to adopt one or more other bond resolutions and reserves the right, at any time, to issue any other obligations not secured by the amounts pledged under the Bond Resolution, including bonds or other obligations secured by gifts, grants, reimbursements or payments described in (i)(y) of the definition of “Revenues.” 56 ARTICLE VI GENERAL PROVISIONS Section 601 Rate Covenant. The Consolidated Government acting by and through the Augusta Aviation Commission shall continuously own, control, operate, and maintain the Airport in an efficient and economical manner and on a revenue producing basis and shall at all times prescribe, fix, maintain, and collect rates, fees, and other charges for the services and facilities furnished by the Airport fully sufficient at all times: (a) To provide for 100 percent of the Expenses of Operation and Maintenance and for the accumulation in the Operation and Maintenance Reserve Fund of the Operating Reserve; and (b) such that the Amount Available to Pay Debt Service in each Fiscal Year (1) will equal at least 125 percent of the Debt Service Requirement on all General Revenue Bonds for the Bond Year ending on the next January 1 and at least 100 percent of the debt service or other amounts payable on all Subordinate Lien Bonds and Other Airport Obligations payable from Net General Revenues and Pledged PFC Revenues then Outstanding for the year of computation; (2) will enable the Augusta Aviation Commission to make all required payments, if any, into the Debt Service Reserve Fund, the Rebate Fund and on any Contract or Other Airport Obligation; and (3) will remedy all deficiencies in required payments from the Revenue Fund from prior Fiscal Years; and provided that this Section 601 shall not be construed as requiring the Airport to impose passenger facility charges in excess of amounts permitted pursuant to the PFC Act. (c) If the Consolidated Government, acting by and through the Augusta Aviation Commission, fails to prescribe, fix, maintain, and collect rates, fees, and other charges, or to revise such rates, fees, and other charges, in accordance with the provisions of this section in any Fiscal Year, but the Augusta Aviation Commission, on behalf of the Consolidated Government, in the next Fiscal Year has promptly taken all available measures to revise such rates, fees and other charges after consideration of recommendations from an Airport Consultant, there shall be no Event of Default as described in Section 701(f) until the end of the second Fiscal Year following such failure to prescribe rates in accordance with Section 601 and only then if Net General Revenues and Pledged PFC Revenues are less than the amount required by this section. The rates, fees, and other charges shall be classified in a reasonable manner to cover users of the services and facilities furnished by the Airport so that, as nearly as practicable, such 57 rates, fees, and other charges shall be uniform in application to all users falling within any reasonable class. Section 602 Maintenance of the Airport in Good Condition. The Augusta Aviation Commission covenants that it has and will continue to enforce reasonable rules and regulations governing the Airport and the operation thereof, that all compensation, salaries, fees, and wages paid by it in connection with the operation, maintenance, and repair of the Airport will be reasonable, that it will operate the Airport in an efficient and economical manner and will at all times maintain the Airport in good repair and in sound operating condition, that it will make all necessary repairs, renewals, and replacements to the Airport, and that it will comply with all valid acts, rules, regulations, orders, and directions of any legislative, executive, administrative, or judicial body applicable to the Airport and the operation thereof. The Augusta Aviation Commission will not take, or allow any person to take, any action which would cause the Administrator of the Federal Aviation Administration, Department of Transportation, or any successor to the powers and authority of such Administrator, to suspend or revoke the Airport’s operating certificates issued under the Federal Aviation Act of 1958, or any successor statute. The Augusta Aviation Commission shall comply with the requirements of the federal government, including the PFC Act and the PFC Regulations, with respect to grants-in-aid accepted by the Augusta Aviation Commission pursuant to the Airport Improvement Program and passenger facility charges collected by the Augusta Aviation Commission. Section 603 Insurance. (a) With respect to the Airport, the Consolidated Government will carry such public liability, fidelity, and property insurance as it may determine to be appropriate under the circumstances. All such policies shall be for the benefit of and made payable to the Augusta Aviation Commission, on behalf of the Consolidated Government. Notwithstanding the foregoing, the Consolidated Government may elect to be a self-insurer with respect to any risks for which insurance is required under this Section 603(a). The cost of such insurance may be paid as Expenses of Operations and Maintenance. (b) In addition, the Consolidated Government shall indemnify itself against the usual hazards incident to the construction of any Project, and without in any way limiting the generality of the above, shall: (i) require each construction contractor and each subcontractor to furnish a bond, or bonds, of such type and in amounts adequate to assure the faithful performance of their contracts and the payment of all bills and claims for labor and material arising by virtue of such contracts; (ii) require each construction contractor or the subcontractor to maintain at all times until the completion and acceptance of that portion of the Project for which the work is being performed insurance, in such amounts as the Consolidated Government or the Augusta Aviation Commission, on behalf of the Consolidated Government, may in its discretion require, against the following types of claims: (1) claims under workers compensation, disability benefit and other similar employee benefit laws applicable to the construction of the Project; (2) claims for damages because of bodily injury, occupational sickness or disease, or death of the contractor’s or subcontractor’s employees; and (3) comprehensive general liability insurance. 58 All moneys received for losses under any such insurance policies, except public liability policies, are hereby pledged by the Consolidated Government as security for the Bonds until and unless such proceeds are paid out in making good the loss or damage in respect of which such proceeds are received, either by repairing the property damaged or replacing the property destroyed or by depositing the same in the Capital Improvement Fund. Adequate provision for making good such loss and damage shall be made within 120 days from the date of the loss. Insurance proceeds not used in making such provision shall be deposited in the Capital Improvement Fund on the expiration of such 120 day period. Such insurance proceeds shall be payable to the Consolidated Government or to the Augusta Aviation Commission, on its behalf by appropriate clause to be attached to or inserted in the policies. Section 604 No Sale, Lease, or Encumbrance; Exceptions. Except as expressly permitted in this section or elsewhere in the Bond Resolution, the Consolidated Government irrevocably covenants, binds, and obligates itself not to sell, lease, encumber, or in any manner dispose of the Airport as a whole or in part until all of the Bonds and all interest thereon shall have been paid in full or provision for payment has been made in accordance with Article IX. The Consolidated Government shall have and hereby reserves the right to sell, lease, or otherwise dispose of any of the property comprising a part of the Airport in the following manner, if any one of the following conditions exists: (i) such property is not necessary for the operation of the Airport; (ii) such property is not useful in the operation of the Airport; (iii) such property is not profitable in the operation of the Airport; or (iv) the disposition of such property will be advantageous to the Airport and will not adversely affect the security for the Bondholders, and the Airport Director, Mayor and Airport Consultant shall certify as to the existence of the appropriate condition. All proceeds of any such sale or disposition shall be deposited in the Revenue Fund unless the Augusta Aviation Commission directs amounts be deposited in the Capital Improvement Fund or the Augusta Aviation Commission is required to deliver such amounts to another Person. The Consolidated Government reserves the right to sell any portion of the Airport to any political subdivision or authority or agency of one or more political subdivisions of the State, provided that there shall be first filed with the Attesting Officer: (i) an opinion of Bond Counsel to the effect that such sale will not adversely affect the extent to which interest on any Tax-Exempt Bonds is excluded from gross income for federal income tax purposes; and (ii) an opinion of an Airport Consultant that such sale will not result in any diminution of Net General Revenues to the extent that in the then current and each succeeding Fiscal Year the Net General Revenues will be less than 120 percent of the Average Annual Debt Service Requirement on all Bonds to be Outstanding after such transfer with a lien on Net General Revenues. In reaching this conclusion, the Airport Consultant shall take into consideration such factors as the Airport Consultant may deem significant, including (i) anticipated diminution of Revenues, (ii) anticipated increase or decrease in Expenses of Operation and Maintenance attributable to the sale, and (iii) reduction in the annual Debt Service Requirement attributable to the application of the sale proceeds to the provision for payment of Bonds theretofore Outstanding. All proceeds of any such sale or disposition shall be deposited in the Revenue Fund unless the Augusta 59 Aviation Commission directs amounts be deposited in the Capital Improvement Fund or the Augusta Aviation Commission is required to deliver such amounts to another Person. The Consolidated Government reserves the right to transfer the Airport as a whole to any political subdivision or authority or agency of one or more political subdivisions of the State to which may be delegated the legal authority to own and operate the Airport, or any portion thereof, on behalf of the public, and which undertakes in writing, filed with the Attesting Officer, the Consolidated Government’s obligations under the Bond Resolution, provided that there shall be first filed with the Attesting Officer: (i) an opinion of Bond Counsel to the effect that such sale will not adversely affect the extent to which interest on any Tax-Exempt Bonds is excluded from gross income for federal income tax purposes; and (ii) an opinion of an Airport Consultant that such transfer will not result in any diminution of Net General Revenues to the extent that in the then current and each succeeding Fiscal Year the Net General Revenues will be less than 120 percent of the Average Annual Debt Service Requirement on all Bonds to be Outstanding after such transfer with a lien on Net General Revenues. In reaching this conclusion, the Airport Consultant shall take into consideration such factors as the Airport Consultant may deem significant, including any rate revision to be imposed by the transferee political subdivision, authority, or agency. Section 605 No Impairment of Rights. Neither the Consolidated Government nor the Augusta Aviation Commission shall enter into any contract or contracts, nor take any action, the results of which might materially impair the rights of the Bondholders. Section 606 Satisfaction of Liens. The Consolidated Government and the Augusta Aviation Commission hereby covenant and agree that they will from time to time duly pay and discharge or cause to be paid and discharged all taxes, assessments, and other governmental charges, if any, lawfully imposed upon the Airport or any part thereof or upon the Pledged Revenues, as well as any lawful claims for labor, materials, or supplies which if unpaid might by law become a lien or charge upon the Airport or the Pledged Revenues or any part thereof or which might impair the security of the Bonds, except when the Consolidated Government or the Augusta Aviation Commission, as the case may be, in good faith contests its liability to pay the same. Section 607 Enforcement of Charges and Connections. The Consolidated Government shall compel the prompt payment of rates, fees, and charges imposed for service connected with the Airport, and to that end will vigorously enforce all of the provisions of any resolution or ordinance of the Consolidated Government having to do with the same, and all of the rights and remedies permitted the Consolidated Government under law. The Consolidated Government by this Section expressly covenants and agrees that such charges will be enforced and promptly collected to the full extent permitted by law. 60 Section 608 Payments. All payments falling due on the Bonds for principal and interest shall be made from the Pledged Revenues, or from other legally available revenues to the owners thereof when due in full, and all reasonable and authorized charges made by the Bond Registrar and any Paying Agent shall be paid by the Consolidated Government or the Augusta Aviation Commission, on its behalf, when due. Section 609 No Loss of Lien on Revenues. Neither the Augusta Aviation Commission nor the Consolidated Government shall do, or omit to do, or permit to be done or to be omitted any matter or thing whatsoever whereby the lien of the Bond Resolution on the Pledged Revenues or any part thereof might or could be lost or impaired. Section 610 Annual Budget. The Consolidated Government agrees to adopt an Annual Budget as approved by the Augusta Aviation Commission for the Airport for each Fiscal Year in compliance with the rate covenant as stated in Section 601. The Annual Budget and the annual audit of the Airport will make distinctions among different categories of Revenues to comply with, and evidence compliance with, the provisions or the Bond Resolution. Section 611 Rebate Fund and Tax Provisions. The Consolidated Government and the August Aviation Commission each hereby covenants and agrees to take any and all action which may be required from time to time in order to assure that interest on the Tax-Exempt Bonds shall remain excludable from the gross income of the owners of the Tax-Exempt Bonds for federal income tax purposes and each shall refrain from taking any action that would adversely affect such status. The Consolidated Government and the Augusta Aviation Commission each hereby covenants and agrees that it will not, subsequent to the date of the issuance of the Series 2015 Bonds, intentionally use any portion of the proceeds of the Series 2015 Bonds to acquire higher yielding investments or to replace funds which were used directly or indirectly to acquire higher yielding investments, except as may be otherwise permitted by Section 148 of the Code and that it will comply with, and take such action and make such payments as may be permitted or required by, Section 148(f) of the Code, to ensure that the Series 2015 Bonds do not constitute “arbitrage bonds” within the meaning of Section 148(a) of the Code. Prior to or contemporaneously with delivery of each series of Tax-Exempt Bonds, the Mayor, the Airport Director and the Airport Finance Officer shall execute a Certificate as to Tax Matters on behalf of the Consolidated Government respecting the use and investment of the proceeds of such series of Tax-Exempt Bonds. Such certificate shall be a representation and certification of the Consolidated Government, and an executed copy thereof shall be delivered to the Bond Registrar. The Consolidated Government shall not knowingly use, invest or participate in the investment of any moneys held under the Bond Resolution if such use or investment would cause interest on any Tax-Exempt Bonds to become included in gross income for federal income tax purposes. 61 The Mayor, the Airport Director, the Airport Finance Officer or the Attesting Officer shall, and are hereby authorized to, execute and deliver, on behalf of the Consolidated Government: (i) such agreements, filings, and other writings as may be necessary or desirable to cause or bind the Consolidated Government to comply with any requirements for rebate under Section 148(f) of the Code, or (ii) such certificate or other writing as may be necessary or desirable to qualify for exemption from such rebate requirements. The Consolidated Government shall retain a qualified rebate analyst to calculate, from time to time, as required in order to comply with the provisions of Section 148(f) of the Code, the amounts required to be rebated (including penalties) to the United States and the Consolidated Government or the Augusta Aviation Commission, on its behalf, shall deposit or cause to be deposited into the Rebate Fund any and all of such amounts promptly following a determination of any such amount. All moneys held in the Rebate Fund shall be continuously invested in Permitted Investments. To the extent and at not later than the times required to comply with Section 148(f) of the Code, funds may be withdrawn from the Rebate Fund for the purpose of making rebate payments (including penalties) to the United States as required by Section 148(f) of the Code. Except as otherwise specifically provided in this Section, moneys in the Rebate Fund may not be withdrawn from the Rebate Fund for any other purpose. All earnings on investments held in the Rebate Fund shall be retained in the Rebate Fund and shall become part of the Rebate Fund. Moneys held in the Rebate Fund, including the investment earnings thereon, if any, shall not be subject to a pledge in favor of the owners of the Bonds under the Bond Resolution and may not be used to pay amounts due on the Bonds or under any Financial Facility Agreements or amounts required for the operation, maintenance, enlargement, or extension of the Airport. The Augusta Aviation Commission may create separate accounts in the Rebate Fund as it may deem desirable. If the Consolidated Government shall deliver to the Depository of the Rebate Fund a certificate, signed by the Consolidated Government Finance Director, certifying that the Consolidated Government or the Augusta Aviation Commission, on its behalf, has filed all reports required to be filed with the United States pursuant to Section 148(f) of the Code and has made all payments required to be made to the United States pursuant to Section 148(f) of the Code, then the Depository of the Rebate Fund shall transfer to the Augusta Aviation Commission, on behalf of the Consolidated Government all moneys or investments remaining in the Rebate Fund, and such moneys and investments may be used for any Airport Purpose. The covenants, certifications, representations, and warranties contained in this Section shall survive payment in full or provision for payment in full of the Tax-Exempt Bonds until the end of the statute of limitations following the later of final payment of such Bonds (without regard to any defeasance or other provision for the payment thereof) or the last date as of which payments under Section 148(f) of the Code could be due to the United States. 62 Section 612 Uneconomic Facilities. The Consolidated Government may acquire assets or property, including other airport facilities, and combine such assets or property with the Airport if there is first filed with the Attesting Officer an opinion of the Airport Consultant that such acquisition will not result in any diminution of Net General Revenues to the extent that in the then current and each succeeding Fiscal Year the Net General Revenues will be less than 120 percent of the Average Annual Debt Service Requirement on all Bonds to be Outstanding after such transfer with a lien on Net General Revenues. In reaching this conclusion, the Airport Consultant shall take into consideration such factors as the Airport Consultant may deem significant, including (i) anticipated diminution of Revenues, and (ii) anticipated increase or decrease in Expenses of Operation and Maintenance attributable to the acquisition. 63 ARTICLE VII EVENTS OF DEFAULT AND REMEDIES Section 701 Definition of Events of Default. An “Event of Default” shall mean the occurrence of any one or more of the following: (a) a failure to pay the principal or redemption price of any Senior Lien Bond when the same shall become due and payable, either at maturity or by proceedings for redemption or otherwise; or (b) a failure to pay interest on any Senior Lien Bond when the same shall become due and payable; or (c) a court of competent jurisdiction shall enter an order, judgment, or decree appointing a receiver of the Airport or any of the funds or accounts established in Article IV or Article XII, or approving a petition seeking reorganization of the Consolidated Government under the federal bankruptcy laws or any other applicable law or statute of the United States of America or the State, and such order, judgment, or decree shall not be vacated or set aside or stayed within 60 days from the date of the entry thereof; or (d) under the provisions of any other law for the relief or aid of debtors, any court of competent jurisdiction shall assume custody or control of any of the funds or accounts established in Article IV or Article XII, and such custody or control shall not be terminated or stayed within 60 days from the date of assumption of such custody or control; or (e) the Consolidated Government or the Augusta Aviation Commission shall fail to perform any of the other covenants, conditions, agreements, and provisions contained in the Senior Lien Bonds or in the Bond Resolution to be performed, and such failure shall continue for 90 days after written notice specifying such failure and requiring it to be remedied shall have been given to the Consolidated Government by the owners of not less than, or a Credit Issuer securing not less than, 25 percent in aggregate principal amount of the Senior Lien Bonds; provided, however, if the failure stated in such notice can be corrected, but not within such 90 day period, the Consolidated Government or the Augusta Aviation Commission, as the case may be, shall have 180 days after such written notice to cure such default if corrective action is instituted by the Consolidated Government or the Augusta Aviation Commission, as the case may be, within such 90 day period and diligently pursued until the failure is corrected; or (f) an Event of Default under any Supplemental Bond Resolution relating to Senior Lien Bonds shall occur; or (g) the issuance to the Consolidated Government by a Credit Issuer of written notice stating that an “Event of Default” or the part of the Consolidated Government has occurred under any Credit Facility Agreement relating to Senior Lien Bonds; or (h) failure by any Liquidity Facility Issuer to pay the purchase price of Senior Bonds under any Liquidity Facility then in effect; 64 provided if the Event of Default relates solely to Bonds related to a particular category of Revenues and no other event has occurred which, with the lapse of time or the delivery of notice or both, could become an Event of Default with respect to any other Bonds then Outstanding, such Event of Default shall be deemed to apply solely to the related Bonds and Contracts and the provisions of the Bond Resolution shall otherwise remain in full force and effect with respect to all other Bonds and related Contracts. Section 702 Remedies. (a) Upon the happening and continuance of any Event of Default specified in Section 701 (except in (g)), then and in every such case, upon the written declaration of the owners of more than 50 percent in aggregate principal amount of all Senior Lien Bonds then Outstanding affected thereby or upon the written demand of a Credit Issuer securing more than 50 percent in aggregate principal amount of the Senior Lien Bonds then Outstanding affected thereby, the principal of all Senior Lien Bonds then Outstanding affected thereby shall become due and payable immediately, together with the interest accrued thereon to the date of such acceleration, at the place of payment provided therein, and interest on such Senior Lien Bonds shall cease to accrue after the date of such acceleration, anything in the Bond Resolution or in the Senior Lien Bonds to the contrary notwithstanding. Upon any declaration of acceleration under the Bond Resolution, the Paying Agent shall immediately draw under the applicable Credit Facility to the extent permitted by the terms thereof that amount which, together with other amounts on deposit under the Bond Resolution, shall be sufficient to pay the principal of and accrued interest on the related Senior Lien Bonds so accelerated. The above provisions, however, are subject to the condition that if, after the principal of the Senior Lien Bonds shall have been so accelerated, all arrears of interest upon such Bonds, and interest on overdue installments of interest at the rate on such Bonds, shall have been paid, the principal of such Bonds which has matured (except the principal of any Bonds not then due by their terms except as provided above) has been paid, and the Consolidated Government also shall have performed all other things in respect to which it may have been in default under the Bond Resolution, and the Credit Issuer shall have reinstated the Credit Facility in the full amount available to be drawn thereunder by written notice to the Consolidated Government, then, in every such case, the owners of more than 50 percent in aggregate principal amount of all Senior Lien Bonds then Outstanding by written notice to the Consolidated Government, may waive such default and its consequences and such waiver shall be binding upon the Consolidated Government and upon all owners of the Bonds; but no such waiver shall extend to or affect any subsequent default or impair any right or remedy consequent thereon. Notwithstanding the foregoing, as long as the applicable Credit Issuer shall not then continue to dishonor draws under the Credit Facility, no Event of Default with respect to the related Senior Lien Bonds may be waived without the express written consent of such Credit Issuer. (b) Upon the happening and continuance of any Event of Default, any owner of Senior Lien Bonds then Outstanding affected by the Event of Default or a duly authorized agent for such owner may proceed to protect and enforce its rights and the rights of the owners of 65 Senior Lien Bonds by such of the following remedies as it shall deem most effectual to protect and enforce such rights: (1) by mandamus or other suit, action, or proceeding at law or in equity, enforce all rights of the owners of Senior Lien Bonds, including the right to require the appointment of a receiver for the Airport or to exercise any other right or remedy provided by the Revenue Bond Law and to require the Consolidated Government and/or the Augusta Aviation Commission to perform any other covenant or agreement contained in the Bond Resolution and to perform their duties under the Revenue Bond Law; (2) by bringing suit upon the Senior Lien Bonds; (3) by action or suit in equity, require the Consolidated Government and/or the Augusta Aviation Commission to account as if it were the trustee of an express trust for the owners of the Senior Lien Bonds; (4) by action or suit in equity, enjoin any acts or things which may be unlawful or in violation of the rights of the owners of the Senior Lien Bonds; or (5) by pursuing any other available remedy at law or in equity or by statute. In the enforcement of any remedy under the Bond Resolution, owners of Senior Lien Bonds shall be entitled to sue for, enforce payment on, and receive any and all amounts then or during any default becoming, and at any time remaining, due from the Consolidated Government for principal, redemption premium, interest, or otherwise, under any provision of the Bond Resolution or of the Senior Lien Bonds, and unpaid, with interest on overdue payments at the rate or rates of interest specified in such Senior Lien Bonds, together with any and all costs and expenses of collection and of all proceedings under the Bond Resolution and under such Senior Lien Bonds, without prejudice to any other right or remedy of the owners of Senior Lien Bonds, and to recover and enforce a judgment or decree against the Consolidated Government for any portion of such amounts remaining unpaid, with interest, costs, and expenses, and to collect from any moneys available for such purpose, in any manner provided by law, the moneys adjudged or decreed to be payable. (c) From and after an Event of Default, notwithstanding Section 404(a), (b) or (c), deposits into the Interest Account, the Contract Payments Account and the Principal Account shall be made monthly in an amount equal to a fraction of the difference between the amount in such subaccount and the amount due to be paid from such subaccount on the next payment date with the numerator of such fraction being “1” and the denominator being the number of whole months between the date of such deposit and the payment date. Section 703 Remedies Cumulative. No remedy conferred upon or reserved to the Bondholders is intended to be exclusive of any other remedy or remedies, and each and every such remedy shall be cumulative and shall be in addition to every other remedy given under the Bond Resolution or now or hereafter existing at law or in equity or by statute. 66 Section 704 Waiver of Default. No delay or omission of any Bondholder to exercise any right or power accruing upon any Event of Default shall impair any such right or power or shall be construed to be a waiver of any such Event of Default, or an acquiescence therein, and every power and remedy given by the Bond Resolution to the Bondholders may be exercised from time to time and as often as may be deemed expedient. Section 705 Application of Moneys After Default. If an Event of Default occurs and shall not have been remedied, all Pledged Revenues shall be applied as follows and in the following order of priority (subject to the last paragraph of this Section 705): (a) Expenses of Receiver and Paying Agent and Bond Registrar - to the payment of the reasonable and proper charges, expenses, and liabilities of the receiver and the Paying Agent and Bond Registrar under the Bond Resolution with the amounts payable under this (a), if related to a particular series and therefore to a particular category of Revenues, first from such category and second from other categories of Revenues in amounts as determined by the receiver or the Paying Agent, and if not so related to a particular series or category of Revenues, then from all Revenues as determined by the Receiver or the Paying Agent; (b) Expenses of Operation and Maintenance and Renewals and Replacements - then, within each category of Revenues, to the payment of all reasonable and necessary related Expenses of Operation and Maintenance and major renewals and replacements to the related facilities at the Airport; (c) Principal or Redemption Price, Interest on Senior Lien Bonds and Payments on related Contracts - then, within each category of Revenues, to the payment of the interest and principal or redemption price then due on the related Senior Lien Bonds and payments then due under related Contracts, as follows: (1) Unless the principal of all the Senior Lien Bonds related to such category of Revenues shall have become due and payable, all such moneys shall be applied as follows: first: to the payment to the persons entitled thereto of all installments of interest then due on the Senior Lien Bonds, in the order of the maturity of such installments (with interest on defaulted installments of interest at the rate or rates borne by the Senior Lien Bonds with respect to which such interest is due, but only to the extent permitted by law), and, if the amount available shall not be sufficient to pay in full any particular installment, then to the payment ratably, according to the amounts due on such installment, to the persons entitled thereto, without any discrimination or preference. As to any Capital Appreciation Bond that is a Senior Lien Bond, such interest shall accrue on the Accreted Value of such Bond and be set aside on a daily basis until the next compounding date for such Bonds, whereupon it shall be paid to the owner of such Bond as interest on a defaulted obligation and only the unpaid portion of such interest (if any) shall be treated as principal of such Bond. If some of the Senior Lien Bonds bear interest payable at 67 different intervals or upon different dates and if at any time moneys from the Debt Service Reserve Fund must be used to pay any such interest, the moneys in the Debt Service Reserve Fund shall be applied (to the extent necessary) to the payment of all interest falling due on the dates upon which such interest is payable to and including the date six months after the date of application of such moneys. After such period, moneys in the Debt Service Reserve Fund plus any other moneys available in the Interest Account shall be set aside for the payment of interest on Senior Lien Bonds of each class (a class consisting of all Senior Lien Bonds payable as to interest on the same dates) pro rata among Senior Lien Bonds of the various classes on a daily basis so that there shall accrue to each owner of a Senior Lien Bond throughout each Fiscal Year the same proportion of the total interest payable to such owner of a Senior Lien Bond as shall so accrue to every other owner of a Senior Lien Bond during such Fiscal Year. second: to interest portions of Reimbursement Obligations related to Senior Lien Bonds pursuant to the terms of the related Contracts. third: to the payment to the persons entitled thereto of the unpaid principal of any of the Senior Lien Bonds which shall have become due at maturity or upon mandatory redemption prior to maturity (other than Senior Lien Bonds called for redemption for the payment of which moneys are held pursuant to the provisions of Article IX), in the order of their due dates, with interest upon such Senior Lien Bonds from the respective dates upon which they became due, and, if the amount available shall not be sufficient to pay in full Senior Lien Bonds due on any particular date, together with such interest, then to the payment first of such interest, ratably according to the amount of such interest due on such date, and then to the payment of such principal, ratably according to the amount of such principal due on such date, to the persons entitled thereto without any discrimination or preference. The Accreted Value of a Capital Appreciation Bond that is a Senior Lien Bond (except for interest that shall have been paid under paragraph first) shall be treated as principal for purposes of this paragraph third. If some of the Senior Lien Bonds mature (including for this purpose the mandatory redemption dates of Term Bonds) upon a different date or dates and if at any time moneys from the Debt Service Reserve Fund must be used to pay any such principal falling due, the moneys in the Debt Service Reserve Fund not required to pay interest under paragraph first above shall be applied to the extent necessary to the payment of all principal falling due prior to the date 12 months after the date of application of such moneys. After such period, moneys in the Debt Service Reserve Fund not required to pay interest plus any other moneys available in the Principal Account shall be set aside for the payment of principal of Senior Lien Bonds of each class (a class consisting of all Senior Lien Bonds payable as to principal on the same date) pro rata among Senior Lien Bonds of the various classes which mature or must be redeemed pursuant to mandatory redemption prior to maturity throughout each Fiscal Year in such proportion of the total principal payable on each such Senior Lien Bond as shall be equal among all classes of Senior Lien Bonds maturing or subject to mandatory redemption within such Fiscal Year. 68 fourth: to the payment of the principal portions of Reimbursement Obligations related to Senior Lien Bonds pursuant to the terms of the related Contracts. fifth: to the payment of the redemption premium on and the principal of any Senior Lien Bonds called for optional redemption pursuant to their terms. sixth: to the payment of all other amounts then due on Contracts related to Senior Lien Bonds. (2) If the principal of all the Senior Lien Bonds shall have become due and payable, all such moneys shall be applied to the payment of the principal and interest then due and unpaid upon the Senior Lien Bonds, with interest thereon as aforesaid, and due and unpaid payments under related Contracts, without preference or priority of principal over interest or payments on Contracts or of interest over principal or payments on Contracts, or of payments on Contracts over principal or interest, or of any installment of interest over any other installment of interest, or of any Senior Lien Bond over any other Senior Lien Bonds, or of any such payment under a Contract over any other such payment under a Contract, ratably, according to the amounts due respectively for principal, interest, and payments under Contracts, to the persons entitled thereto without any discrimination or preference. (d) If a series of Senior Lien Bonds has a Senior Lien on more than one category of Revenues, payments will be made thereto under (c) pro rata as to the number of Senior Liens; provided if after such payments amounts are owed on such Bonds and amounts are remaining hereunder, payments thereon will be made from any category of Revenues as to which such series has a Senior Lien. If any amounts remain after payment under (d), further payments shall be made with respect to all Subordinate Lien Bonds (to the extent not already paid) upon the same order and priority as used for Senior Lien Bonds under (d) within lien classifications as provided in the related Supplemental Bond Resolutions. (e) Notwithstanding anything else herein to the contrary, payments made pursuant to (b), (c) and (d) shall be made by category of Revenues to related Bonds such that: (i) Amounts traceable to General Revenues are used only for General Revenue Bonds and related Contracts; (ii) Amounts traceable to PFC Revenues are used only for PFC Stand-Alone Revenue Bonds, Bonds for which a Pledged PFC Series Account has been established and related Contracts; (iii) Amounts traceable to Released Revenues are used only for Released Revenue Bonds and related Contracts or otherwise as permitted by Section 505; and (iv) Amounts not traceable to particular categories of Revenues shall be used first as General Revenues for purposes of this Section and then as PFC Revenues, then as other Released Revenues, and then as Special Purpose Revenues. 69 Section 706 Rights of Credit Issuer. Notwithstanding any other provision of the Bond Resolution, in the event that a Credit Facility shall be drawn upon in any amount for the payment of principal of or interest on any Bonds, then upon such payment the related Credit Issuer shall succeed to and become subrogated to the rights of the recipients of such payments to the extent of such payments and such principal or interest shall be deemed to continue to be unpaid and Outstanding for all purposes and shall continue to be fully secured by the Bond Resolution until the Credit Issuer, as successor and subrogee, has been paid all amounts owing in respect of such subrogated payments of principal and interest. Whenever moneys become available for the payment of any interest then overdue, the Credit Issuer shall be treated as to interest owed to it as successor and subrogee as if it had been the holder of the Bonds on which such interest is payable on any special record date therefor. 70 ARTICLE VIII BOND OWNERSHIP Section 801 Manner of Evidencing Ownership of Bonds. Any request, direction, or other instrument required by the Bond Resolution to be signed or executed by holders may be in any number of counterparts or writings of similar tenor and may be signed or executed by such holders in person or by agent appointed in writing. Proof of the execution of any such request, direction, or other instrument, or of the writing appointing such agent and of the ownership of Bonds, if made in the following manner, shall be sufficient for any purpose of the Bond Resolution. The fact and date of the execution by any person of any such writing may be proved by the certificate of any officer in any jurisdiction, who, by the laws thereof, has power to take acknowledgments within such jurisdiction, to the effect that the person signing such writing acknowledged before him the execution thereof, or by an affidavit of a witness to such execution; provided that the execution of the form of assignment on the back of each Bond may be guaranteed only by an eligible guarantor institution (such as banks, stockbrokers, savings and loan associations, and credit unions) with membership in an approved Signature Guarantee Medallion Program. The fact of ownership of the Bonds by any holder, the amount and issue numbers of such Bonds, and the date of ownership shall be proved by the Bond Register. Section 802 Call of Meetings of Bondholders. The Consolidated Government or the owners of not less than 25 percent in aggregate principal amount of the Bonds of either the senior class or the subordinate class may at any time call a meeting of the holders. 71 ARTICLE IX DEFEASANCE Section 901 Provision for Payment. Bonds for the payment or redemption of which sufficient moneys or sufficient Government Obligations shall have been deposited with the Paying Agent or the Depository of the Debt Service Fund (whether upon or prior to the maturity or the redemption date of such Bonds) shall be deemed to be paid and no longer Outstanding under the Bond Resolution; provided, however, that if such Bonds are to be redeemed prior to the maturity thereof, notice of such redemption shall have been duly given as provided in Article III or firm and irrevocable arrangements shall have been made for the giving of such notice. Government Obligations shall be considered sufficient for purposes of this Article IX only: (i) if such Government Obligations are not callable by the issuer of the Government Obligations prior to their stated maturity, and (ii) if such Government Obligations fall due and bear interest in such amounts and at such times as will assure sufficient cash (whether or not such Government Obligations are redeemed by the Consolidated Government pursuant to any right of redemption) to pay currently maturing interest and to pay principal and redemption premiums, if any, when due on the Bonds without rendering the interest on any Tax-Exempt Bonds includable in gross income of any owner thereof for federal income tax purposes. The Consolidated Government may at any time surrender to the Bond Registrar for cancellation by it any Bonds previously authenticated and delivered under the Bond Resolution which the Consolidated Government may have acquired in any manner whatsoever. All such Bonds, upon such surrender and cancellation, shall be deemed to be paid and retired. Section 902 Release of Pledge. If all Bonds and obligations secured by a lien on a category of Revenues have been paid or provision for payment thereof made pursuant to Section 901, at the option of the Consolidated Government the terms and provisions of the Bond Resolution relating solely to such category of Revenues may be determined as void and of no further force or effect; provided the other terms and provisions of the Bond Resolution shall remain in effect until the election of the Consolidated Government after payment or provision for payment of all Bonds and obligations secured by a lien created pursuant to the Bond Resolution on any Revenues. 72 ARTICLE X SUPPLEMENTAL RESOLUTIONS Section 1001 Supplemental Resolutions Not Requiring Consent of Bondholders. The Consolidated Government, from time to time and at any time, subject to the conditions and restrictions in the Bond Resolution, may adopt one or more Supplemental Resolutions which thereafter shall form a part of the Bond Resolution, for any one or more or all of the following purposes: (a) to add to the covenants and agreements of the Consolidated Government and/or the Augusta Aviation Commission in the Bond Resolution other covenants and agreements thereafter to be observed or to surrender, restrict, or limit any right or power reserved in the Bond Resolution to or conferred upon the Consolidated Government or the Augusta Aviation Commission (including but not limited to the right to issue Additional Bonds); (b) to make such provisions for the purpose of curing any ambiguity, or of curing, correcting, or supplementing any defective provision contained in the Bond Resolution, or in regard to matters or questions arising under the Bond Resolution, as the Consolidated Government may deem necessary or desirable and not inconsistent with the Bond Resolution; (c) to subject to the lien and pledge of the Bond Resolution additional revenues, receipts, properties, or other collateral; (d) to evidence the appointment of successors to any Depositories, Paying Agent(s), or Bond Registrar(s); (e) to modify, amend, or supplement the Bond Resolution in such manner as to permit the qualification of the Bond Resolution under the Trust Indenture Act of 1939 or any federal statute hereinafter in effect, and similarly to add to the Bond Resolution such other terms, conditions, and provisions as may be permitted or required by such Trust Indenture Act of 1939 or any similar federal statute; (f) to make any modification or amendment of the Bond Resolution required in order to make any Bonds eligible for acceptance by The Depository Trust Company or any similar holding institution or to permit the issuance of any Bonds or interests therein in book- entry form; (g) to modify any of the provisions of the Bond Resolution in any respect if such modification shall not become effective until after all the Bonds Outstanding immediately prior to the effective date of such Supplemental Resolution shall cease to be Outstanding and if any Bonds issued contemporaneously with or after the effective date of such Supplemental Resolution shall contain a specific reference to the modifications contained in such subsequent proceedings; 73 (h) to modify the provisions of the Bond Resolution with respect to the disposition of any moneys remaining in the Construction Fund upon the completion of any Project or to revise, enlarge or reduce the definition or description of any particular Project; (i) to create additional subaccounts or to abolish any subaccounts within any account, or to change the amount of the Debt Service Reserve Requirement, but not below the amount specified in such definition; (j) to modify the Bond Resolution to permit the qualification of any Bonds for offer or sale under the securities laws of any state in the United States of America; (k) to modify the Bond Resolution in connection with the issuance of Additional Bonds or Subordinate Lien Bonds permitted to be issued under the Bond Resolution prior to such modification, and such modification may deal with any subjects and make any provisions relating to the Additional Bonds or Subordinate Lien Bonds which the Consolidated Government deems necessary or desirable for that purpose; (l) to make such modifications in the provisions of the Bond Resolution as may be deemed necessary by the Consolidated Government to accommodate the issuance of Bonds which (i) are Capital Appreciation Bonds (including, but not limited to, provisions for determining the Debt Service Requirement for such Capital Appreciation Bonds and for treatment of Accreted Value in making such determination) or (ii) bear interest at a Variable Rate; (m) to make such modifications in the provisions of the Bond Resolution as may be deemed necessary for the Consolidated Government to accommodate the issuance of PFC Stand-Alone Revenue Bonds, Released Revenue Bonds, Special Purpose Revenue Bonds or the Series 2015 Bonds; provided that any such Supplemental Resolution with respect to the issuance of PFC Stand-Alone Revenue Bonds, Released Revenue Bonds, Special Purpose Revenue Bonds or the Series 2015 Bonds takes effect not later than the first issuance of PFC Stand-Alone Revenue Bonds, Released Revenue Bonds, Special Purpose Revenue Bonds or the issuance of the Series 2015 Bonds, respectively; and (n) to modify any of the provisions of the Bond Resolution in any respect (other than a modification of the type described in Section 1002 requiring the unanimous written consent of the holders); provided that (i) for any Outstanding Bonds which are assigned a Rating and which are not secured by a Credit Facility providing for the payment of the full amount of principal and interest to be paid thereon, each Rating Agency shall have given written notification to the Consolidated Government that such modification will not cause the then applicable Rating on any Bonds to be reduced or withdrawn, and (ii) for any Outstanding Bonds which are secured by Credit Facilities providing for the payment of the full amount of the principal and interest to be paid thereon, each Credit Issuer shall have consented in writing to such modification. Any Supplemental Resolution authorized by the provisions of this Section may be adopted by the Consolidated Government without the consent of or notice to the owners of any of the Bonds at the time Outstanding, notwithstanding any of the provisions of Section 1002. 74 Any such Supplemental Resolution of the Consolidated Government may modify the provisions of the Bond Resolution in such a manner, and to such extent and containing such provisions, as the Consolidated Government may deem necessary or desirable to effect any of the purposes stated above. As used in this Section, the term “modify” shall mean “modify, amend, or supplement” and the term “modification” shall mean “modification, amendment, or supplement.” The provisions of this Section and Section 1002 shall be interpreted by category of Revenues such that each provision of any Supplemental Resolution shall be reviewed for compliance with such sections upon its effect on the Bonds secured by the related category of Revenues and whether the consent of any holders, of a majority of holders of a certain category of Bonds or the consent of all such holders shall be determined with respect to each category of Revenues Supplemental Resolutions may be adopted containing provisions which (1) do not require the consents of any holders, (2) require the consents of some but not all holders of Bonds related to a category of Revenues, (3) require the consents of some but not all holders of Bonds related to several categories of Revenues, (4) require the consents of all holders of Bonds related to a category of Revenues, (5) require the consents of all holders of Bonds, or (6) are covered in a combination of some or all of (1) through (5). Section 1002 Supplemental Resolutions Requiring Consent of Bondholders. With the consent (evidenced as provided in Article VIII) of the owners of more than 50 percent in aggregate principal amount of the Outstanding Bonds of each class (senior and subordinate), voting separately by class, of each series of Bonds related to an affected category of Revenues or related Bonds, the Consolidated Government and the Augusta Aviation Commission may from time to time and at any time adopt a Supplemental Resolution for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of the Bond Resolution or of any Supplemental Resolution; provided, however, that no such Supplemental Resolution shall: (a) extend the maturity date or due date of any mandatory sinking fund redemption with respect to any Bond Outstanding under the Bond Resolution; (b) reduce or extend the time for payment of principal of, redemption premium, or interest on any Bond Outstanding under the Bond Resolution; (c) reduce any premium payable upon the redemption of any Bond under the Bond Resolution or advance the date upon which any Bond may first be called for redemption prior to its stated maturity date; (d) give to any Bond or Bonds (or related Contracts) a preference over any other Bond or Bonds (or related Contracts) not already permitted by the Bond Resolution; (e) permit the creation of any lien or any other encumbrance on the Pledged Revenues having a lien equal to or prior to the lien created under the Bond Resolution for the Senior Lien Bonds; (f) reduce the percentage of owners of either class of Bonds required to approve any such Supplemental Resolution; or (g) deprive the owners of the Bonds of the right to payment of the Bonds or from the Pledged Revenues, without, in each case, the consent of the owners of all the Bonds then Outstanding of the category of Bonds affected thereby. No amendment may be made under this Section which affects the rights or duties of any Financial Facility Issuer securing any of the Bonds, without its written consent. The provisions of this paragraph shall be strictly construed such that Supplemental Resolutions requiring the consents of owners of Bonds shall be limited to those clearly falling within one of the enumerated categories. 75 If the Consolidated Government and the Augusta Aviation Commission intend to enter into or adopt any Supplemental Resolution as described in this Section, the Augusta Aviation Commission, on behalf of itself and Consolidated Government, shall mail, by registered or certified mail, to the registered owners of the Bonds at their addresses as shown on the Bond Register, a notice of such intention along with a description of such Supplemental Resolution not less than 30 days prior to the proposed effective date of such Supplemental Resolution. The consents of the registered owners of the Bonds need not approve the particular form of wording of the proposed Supplemental Resolution, but it shall be sufficient if such consents approve the substance thereof. Failure of the owner of any Bond to receive the notice required in the Bond Resolution shall not affect the validity of any Supplemental Resolution if the required number of owners of the Bonds of each class shall provide their written consent to such Supplemental Resolution. Notwithstanding any provision of the Bond Resolution to the contrary, upon the issuance of a Credit Facility to secure any Bonds and for the period in which such Credit Facility is outstanding, the Credit Issuer may have the consent rights of the owners of the Bonds which are secured by such Credit Facility pertaining to some or all of the amendments or modifications of the Bond Resolution, to the extent provided in the applicable Supplemental Bond Resolution. Notwithstanding the foregoing, if a Credit Issuer is granted the consent rights of the owners of any Bonds in a Supplemental Bond Resolution and refuses to exercise such consent rights, either affirmatively or negatively, then the registered owners of the Bonds secured by the related Credit Facility may exercise such consent rights. Section 1003 Notice of Supplemental Resolutions. The Augusta Aviation Commission shall cause the Bond Registrar to mail a notice by registered or certified mail to the registered owners of all Bonds Outstanding, at their addresses shown on the Bond Register or at such other address as has been furnished in writing by such registered owner to the Bond Registrar, setting forth in general terms the substance of any Supplemental Resolution which has been: (i) adopted by the Consolidated Government pursuant to Section 1001; or (ii) approved by holders or any Credit Issuer and adopted by the Consolidated Government pursuant to Section 1002. Section 1004 Bond Opinion for Supplemental Resolutions. So long as there are Tax-Exempt Bonds Outstanding, no Supplemental Resolution may become effective prior to the receipt by the Consolidated Government and the Augusta Aviation Commission of an opinion from Bond Counsel that such Supplemental Resolution will have no adverse effect on the tax status of any Tax-Exempt Bonds and the adoption of such Supplemental Resolution was permitted by the terms of the Bond Resolution. 76 ARTICLE XI SALE OF BONDS Section 1101 Application of Funds. (a) The Consolidated Government shall apply the net proceeds (i.e., the sale proceeds less the Underwriter’s discount of $____________) from the sale of the Series 2015A Bonds, together with amounts on deposit in the PFC Balloon Bonds Reserve Account allocable to the Refunded 2005A Bonds, amounts on deposit in the 2005A/B Subaccount of the PFC Debt Service Reserve Account allocable to the Refunded Series 2005A Bonds and amounts on deposit in the Series 2005A/B Subaccount of the Interest Account and the Principal Account of the PFC Debt Service Fund allocable to the Refunded 2005A Bonds all created and held under the Prior Resolution, as follows: (i) $____________ shall be transferred to the 2005 Paying Agent for deposit in the 2005 Defeasance Account and applied to refund the Refunded 2005A Bonds; (ii) $____________ shall be deposited into the Series 2015A Subaccount of the Debt Service Reserve Fund; and (iii) the balance shall be deposited into the Costs of Issuance Fund to pay the costs of issuance for the Series 2015A Bonds. (b) The Consolidated Government shall apply the net proceeds (i.e., the sale proceeds less the Underwriter’s discount of $____________) from the sale of the Series 2015B Bonds, together with amounts on deposit in the Balloon Bonds Reserve Account, amounts on deposit in the Series 2005C Subaccount of the Debt Service Reserve Account and amounts on deposit in the Series 2005C Subaccount of the Interest Account and the Principal Account of the Debt Service Fund all created and held under the Prior Resolution, as follows: (i) $____________ shall be transferred to the 2005 Paying Agent for deposit in the 2005 Defeasance Account and applied to refund the Refunded 2005B Bonds; (ii) $____________ shall be deposited into the Series 2015B Subaccount of the Debt Service Reserve Fund; and (iii) the balance shall be deposited into the Costs of Issuance Fund to pay the costs of issuance for the Series 2015B Bonds. (c) All amounts remaining in the PFC Balloon Bonds Reserve Account after the transfers authorized in Section 1101(a) shall be deposited to the PFC Capital Fund. All amounts remaining in the Series 2005A/B Subaccount of the PFC Debt Service Reserve Account after the transfers authorized in Section 1101(a) shall be deposited to the Capital Improvement Account of the Capital Improvement Fund. 77 Notwithstanding the foregoing, if the Mayor and the Airport Director shall determine that a different application of funds is required to carry out the intent of this Bond Resolution, the Mayor and Airport Director may provide for such different application of funds in the authentication order to be delivered at the time of issuance of the Series 2015 Bonds. Section 1102 Redemption of Refunded Bonds. The Refunded Bonds be and the same are hereby irrevocably called for redemption on October 2, 2015 and the owners of the Refunded Bonds should present the same for payment on October 2, 2015 and receive the principal amount thereof and all interest due thereon to October 2, 2015. Section 1103 Direction to Paying Agent for the Refunded Bonds. The Consolidated Government hereby authorizes and directs the 2005 Paying Agent to mail the notices of redemption of the Refunded Bonds not later than September 2, 2015 to the registered owners of the Refunded Bonds to be redeemed at the addresses which appear on the bond registration book kept by the bond registrar for the Refunded Bonds, which notices shall be in substantially the forms attached hereto as Exhibits C and D. Section 1104 Creation of 2005 Defeasance Account. Simultaneously with the issuance and delivery of the Series 2015 Bonds herein authorized to be issued, a sufficient sum derived from the sale of the Series 2015 Bonds and lawfully available funds shall be deposited in trust with the 2005 Paying Agent in an amount sufficient without investment to pay the principal of and interest on the Refunded Bonds to the October 2, 2015 redemption date. The Paying Agent, in its role as the 2005 Paying Agent, shall establish a special segregated trust account designated the “2005 Defeasance Account.” The moneys so deposited in the 2005 Defeasance Account and all income therefrom shall be subject to a lien and charge in favor of the owners of, and are hereby pledged to the payment of, the Refunded Bonds, shall not be commingled with other moneys on deposit with the 2005 Paying Agent and shall be held in trust for the security of such owners until used and applied as hereinafter provided. The moneys so deposited in trust in the 2005 Defeasance Account have been calculated as being sufficient and shall be used to redeem all of the Refunded Bonds by making the following payment on October 2, 2015: Principal Interest Total Refunded 2005A Bonds $8,990,000 $117,032.32 $9,107,032.32 Refunded 2005B Bonds 6,090,000 83,898.21 6,173,898.21 Any moneys remaining in the 2005 Defeasance Account following the redemption of the Refunded Bonds on October 2, 2015, shall be deposited to the 2015A Subaccount of the Interest Account to the extent such excess relates to the Series 2015A Bonds and to the 2015B Subaccount of the Interest Account to the extent such excess relates to the Series 2015B Bonds. 78 Section 1105 Costs of Issuance Fund A special fund is hereby created and designated “Augusta, Georgia Airport Refunding Costs of Issuance Fund” (the “Costs of Issuance Fund”), for the credit of which there shall be deposited the amount of proceeds of the sale of the Series 2015 Bonds as set forth in Section 1101. Such moneys in the Costs of Issuance Fund shall be held by the Paying Agent and applied to the payment of the costs of issuing the Series 2015 Bonds that have been approved by the Consolidated Government Finance Director and the Airport Director, and which shall be deemed to mean and include, without limitation, legal fees and expenses, fees and expenses of the Bond Registrar in connection with the initial issuance and delivery of the Series 2015 Bonds, fees and expenses of the certified public accountants and the costs of preparing and issuing the Series 2015 Bonds. Any moneys remaining in the Costs of Issuance Fund as of the date 60 days from the date of initial issuance and delivery of a series of the Series 2015 Bonds shall be deposited to the Interest Account for the related series of Series 2015 Bonds and the Costs of Issuance Fund shall be closed. 79 ARTICLE XII CONSTRUCTION FUND Section 1201 Construction Fund. The Augusta Aviation Commission shall establish within the Construction Fund a separate account for each Project unless a Supplemental Resolution otherwise provides. Moneys in the Construction Fund shall be held by such bank as may from time to time be designated by the Augusta Aviation Commission, and applied to the payment of the Costs of the Project, or for the repayment of advances made for that purpose in accordance with and subject to the provisions and restrictions set forth in this Article. The Consolidated Government and the Augusta Aviation Commission each covenants that it will not cause or permit to be paid from the Construction Fund any sums except in accordance with such provisions and restrictions; provided, however, that any moneys in the Construction Fund not presently needed for the payment of current obligations during the course of construction may be invested in Permitted Investments maturing not later than (i) the date upon which such moneys will be needed according to a schedule of anticipated payments from the Construction Fund filed with the Consolidated Government by the Airport Director or, (ii) in the absence of such schedule, 36 months from the date of purchase, in either case upon written direction of the Augusta Aviation Commission. Any such investments shall be held by the Depository, in trust, for the account of the Construction Fund until maturity or until sold, and at maturity or upon such sale the proceeds received therefrom including accrued interest and premium, if any, shall be immediately deposited by the Depository in the Construction Fund and shall be disposed of in the manner and for the purposes provided in the Bond Resolution. Amounts held in the Capitalized Interest Account shall be transferred to the related Interest Account on or before the 30th day preceding each Interest Payment Date for related Bonds in the amount necessary to pay interest coming due on such Bonds on the next Interest Payment Date. Section 1202 Purposes of Payments. Moneys in each separate account in the Construction Fund shall be used for the payment or reimbursement of the Costs of the Project for which such account was established as provided in this Article XII. Section 1203 Documentation of Payments. All payments from the Construction Fund, except for payments from the Capitalized Interest Account, shall be made upon a request therefor from the Airport Finance Officer or his designee specifying the payments to be made. The Augusta Aviation Commission shall maintain records with respect to the expenditure of such funds. In the event the United States government or government of the State, or any department, authority, or agency of either, agrees to allocate moneys to be used to defray any part of the Cost of any Project upon the condition that the Augusta Aviation Commission appropriate a designated amount of moneys for such purpose, and it is required of the Augusta Aviation Commission that its share of such cost be deposited in a special account, the Augusta Aviation 80 Commission shall have the right to withdraw any sum so required from the Construction Fund by appropriate transfer and deposit the same in a special account for that particular Project; provided, however, that all payments thereafter made from such special account shall be made only in accordance with the requirements set forth in this Section. Withdrawals for investment purposes only may be made by the Depository to comply with written directions from the Augusta Aviation Commission without any requisition other than such direction. Section 1204 Retention of Payment Documents. All requisitions and certificates required by this Article shall be retained for at least five years by the Depository subject at all times to inspection by any officer of the Consolidated Government or the Augusta Aviation Commission and the Bondholders. Section 1205 Funds Remaining on Completion of Projects. The Augusta Aviation Commission shall, when a Project has been completed, and may, when a Project has been substantially completed, file with the Construction Depository a certificate signed by the Airport Director estimating what portion of the funds remaining in the separate account relating to such Project will be required for the payment or reimbursement of the Costs of such Project. The Airport Director shall attach to his certificate a certificate of the architect/engineer certifying that such Project has been completed or substantially completed, as the case may be, in accordance with the plans and specifications therefor and a certificate of the construction manager approving the estimates of the Airport Director with respect to the portion of funds in the account required for Costs of the Project. Such funds that will not be used shall be (1) transferred to the Principal Account and used to redeem Bonds of the related series on the next redemption date or to pay principal of such Bonds on the next Principal Maturity Date, or for such other use as may be set forth in the opinion of Bond Counsel described below, or (2) transferred to the Interest Account and used to pay interest on Bonds of the related series, provided that there shall first be obtained and filed with the Construction Fund Depository an opinion of Bond Counsel to the effect that, under existing law, the application of such moneys for such other use or to pay interest on such Bonds (a) is allowed under State law, and (b) if such Bonds are Tax-Exempt Bonds, will not, by itself and without more, adversely affect the exclusion from gross income for federal income tax purposes of interest payable on such Bonds. When all moneys have been withdrawn or transferred from any separate account within the Construction Fund in accordance with the provisions of this Article XII, such separate account shall terminate and cease to exist. 81 ARTICLE XIII MISCELLANEOUS PROVISIONS Section 1301 Augusta Aviation Commission as Agent of Consolidated Government. The Augusta Aviation Commission undertakes its covenants and agreements herein on behalf of the Consolidated Government pursuant to the Richmond County Code of Ordinances. The Consolidated Government hereby approves all such undertakings and approves the performance by the Augusta Aviation Commission, its officials, officers, employees and agents, of its and their obligations hereunder. In the event the Augusta Aviation Commission fails to act when action is required, or takes an action that is prohibited, hereunder or under the Revenue Bond Law, the Consolidated Government shall take such action as may be necessary to cause the Augusta Aviation Commission to take such action or to refrain from taking action when required by the Bond Resolution on the Revenue Bond Law. Failing that, the Consolidated Government hereby covenants and agrees to perform such obligations directly. Section 1302 Authorization of Bond Purchase Agreement. The execution, delivery and performance of the Bond Purchase Agreement providing for the sale of the Series 2015 Bonds, by and between the Consolidated Government and the Underwriter, a copy of which has been presented to the Augusta-Richmond County Commission at its meeting and considered by the Augusta-Richmond County Commission is hereby authorized and approved. The Bond Purchase Agreement shall be in substantially the form as presented, subject to such minor changes, insertions or omissions as may be approved by the Mayor or the Mayor Pro-Tem and the execution of the Bond Purchase Agreement by the Mayor or the Mayor Pro-Tem as hereby authorized shall be conclusive evidence of any such approval Section 1303 Offering Materials. The preparation, use and distribution of the Preliminary Official Statement with respect to the Series 2015 Bonds, is hereby authorized, ratified and approved. The preparation and distribution of a final Official Statement with respect to the Series 2015 Bonds in substantially the form as the Preliminary Official Statement but containing the information with respect to the Series 2015 Bonds set forth in this Master Bond Resolution is hereby authorized and approved. The Mayor, the Consolidated Government Finance Director, the Airport Finance Officer and the Airport Director are authorized to execute such final Official Statement on behalf of the Consolidated Government. The Consolidated Government hereby covenants and agrees that it will, to the extent allowed by applicable law, comply with and carry out all provisions of the Series 2015 Disclosure Certificate, as originally executed and as it may be amended from time to time in accordance with its terms. The execution and delivery by the Consolidated Government of the Series 2015 Disclosure Certificate is hereby authorized. The Mayor is authorized to sign the Series 2015 Disclosure Certificate on behalf of the Consolidated Government, and the corporate seal of the Consolidated Government shall be affixed on the Series 2015 Disclosure Certificate and attested by the Attesting Officer. Notwithstanding any other provision of the Bond 82 Resolution, failure of the Consolidated Government to comply with the Series 2015 Disclosure Certificate shall not be considered a default thereunder, and under no circumstances shall such failure affect the validity or the security for the payment of the Series 2015 Bonds. It is expressly provided, however, that any beneficial owner of the Series 2015 Bonds may take such action, to the extent and in such manner as may be allowed by applicable law, as may be necessary and appropriate, including seeking mandamus or specific performance by court order to cause the Consolidated Government to comply with its obligations under this Section. The cost to the Consolidated Government of performing its obligations set forth in this Section shall be paid solely from funds lawfully available for such purpose. Nothing contained in the Bond Resolution shall obligate the levy of any tax for the Consolidated Government’s obligations set forth in this Section. Section 1304 Public Hearing. The Airport Director, or such delegate as may be designated by the Airport Director, is hereby authorized and directed to serve as the hearing officer for purposes of conducting the public hearing for the Series 2015B Bonds, if and as required by Section 147(f) of the Code. Section 1305 Validation. In order to proceed with the issuance and delivery of the Series 2015 Bonds, the Mayor is hereby authorized and directed immediately to notify the District Attorney of the Augusta Judicial Circuit of the action taken by the Consolidated Government as shown by this Master Bond Resolution, to request the District Attorney to institute proper proceedings to confirm and validate the Series 2015 Bonds and to pass upon the security therefor, and the Mayor is further authorized to acknowledge service and to make answer in such proceedings and the Mayor, the Chairman of the Augusta Aviation Commission and the Attesting Officer are authorized to take any and all further action and to execute any and all further instruments as they might deem necessary to consummate the sale, issuance and delivery of the Series 2015 Bonds. Section 1306 Approval of Series 2015 Paying Agent and Bond Registrar Agreement. The form, terms, and conditions and the execution, delivery, and performance of the Series 2015 Paying Agent and Bond Registrar Agreement, which has been filed with the Consolidated Government, are hereby approved and authorized. The Series 2015 Paying Agent and Bond Registrar Agreement shall be in substantially the form submitted to the Mayor with such changes, corrections, deletions, insertions, variations, additions, or omissions as may be approved by the Mayor, whose approval thereof shall be conclusively evidenced by the execution of such contract. The Mayor is hereby authorized and directed to execute on behalf of the Consolidated Government, the Series 2015 Paying Agent and Bond Registrar Agreement, and the Attesting Officer is hereby authorized and directed to affix thereto and attest the seals of the Consolidated Government upon proper execution and delivery of the other party thereto, provided, that in no event shall any such attestation or affixation of the seals of the Consolidated Government be required as a prerequisite to the effectiveness thereof, and the Mayor and the Attesting Officer are authorized and directed to deliver such contract on behalf of the Consolidated Government. 83 Section 1307 Approval of Series 2015 Custodian and Depositary Agreement. The form, terms, and conditions and the execution, delivery, and performance of the Series 2015 Custodian Agreement, which has been filed with the Consolidated Government, are hereby approved and authorized. The Series 2015 Custodian Agreement shall be in substantially the form submitted to the Mayor with such changes, corrections, deletions, insertions, variations, additions, or omissions as may be approved by the Mayor, whose approval thereof shall be conclusively evidenced by the execution of such contract. The Mayor is hereby authorized and directed to execute on behalf of the Consolidated Government, the Series 2015 Custodian Agreement, and the Attesting Officer is hereby authorized and directed to affix thereto and attest the seals of the Consolidated Government upon proper execution and delivery of the other party thereto, provided, that in no event shall any such attestation or affixation of the seals of the Consolidated Government be required as a prerequisite to the effectiveness thereof, and the Mayor and the Attesting Officer are authorized and directed to deliver such contract on behalf of the Consolidated Government. Section 1308 Waiver of Bond Audit. The Consolidated Government hereby approves the publication of the requisite legal notice waiving the performance audit and performance review requirements of Section 36-82-100 of the Official Code of Georgia Annotated. Section 1309 Severability. In case any one or more of the provisions of the Bond Resolution or of the Bonds shall for any reason be held to be illegal or invalid, such illegality or invalidity shall not affect any other provision of the Bond Resolution or of the Bonds, but the Bond Resolution and the Bonds shall be construed and enforced as if such illegal or invalid provision had not been contained therein. In case any covenant, stipulation, obligation, or agreement contained in the Bonds or in the Bond Resolution shall for any reason be held to be unenforceable or in violation of law, then such covenant, stipulation, obligation, or agreement shall be deemed to be the covenant, stipulation, obligation, or agreement of the Consolidated Government or the Augusta Aviation Commission to the full extent that the power to incur such obligation or to make such covenant, stipulation, or agreement shall have been conferred on the Consolidated Government or the Augusta Aviation Commission by law. Section 1310 Requests of Consolidated Government. Whenever any action is to be taken by the Bond Registrar or the Paying Agent at the request of the Consolidated Government or the Augusta Aviation Commission under the Bond Resolution, if no other means of authenticating such request is required, such request shall be evidenced by a written instrument signed by the Mayor, the Airport Director or the Airport Finance Officer or by such other official or employee (one or more) as may from time to time be designated in writing by the Mayor. A duly certified copy of such designation must be filed with the Bond Registrar and the Paying Agent. 84 Section 1311 Mayor Pro-Tempore May Act. Notwithstanding anything in the Bond Resolution to the contrary, any action which the Mayor is required, permitted, or otherwise authorized to take may be taken by the Mayor Pro- Tempore. These actions shall include execution, delivery, or performance of any certificate, agreement, instrument, document, or other writing, including the execution of the Bonds. To this end, the Bond Resolution shall be construed so that all references to the Mayor may also be considered to be references to the Mayor Pro-Tempore. The Attesting Officer shall determine whether the Mayor is disabled or whether there is a vacancy in the office of Mayor such that the Mayor Pro-Tempore may act under this Section, and the determination of the Attesting Officer shall be binding and conclusive. Section 1312 Payments Due on Saturdays, Sundays, etc. Whenever a date upon which a payment is to be made under the Bond Resolution falls on a Saturday, Sunday, a legal holiday, or any other day on which banking institutions are authorized to be closed in the state in which the payment is to be made, or a date that is not a Business Day under the related Supplemental Bond Resolution, such payment may be made on the next succeeding business day or Business Day, respectively, without interest for the intervening period. Section 1313 Effective Date. This Master Bond Resolution shall take effect immediately upon its adoption. Section 1314 Applicable Provisions of Law. The Bond Resolution shall be governed by and construed and enforced in accordance with the laws of the State. Section 1315 Repeal of Conflicting Resolutions and Resolutions. Any and all Resolutions and resolutions, or parts of Resolutions or resolutions, if any, in conflict with the Bond Resolution are hereby repealed. Section 1316 No Individual Responsibility of Members and Officers of Consolidated Government. No stipulations, obligations, or agreements of any member of the Governing Body or of any officer of the Consolidated Government shall be deemed to be stipulations, obligations, or agreements of any such member or officer in his or her individual capacity. Section 1317 Bond Resolution Constitutes a Contract. The Bond Resolution constitutes a contract with the Bondholders binding the Consolidated Government, and therefore it is proper and appropriate for the Mayor to execute the same on behalf of the Consolidated Government and for the Attesting Officer to attest the same. 85 Adopted this September 1, 2015. AUGUSTA, GEORGIA (SEAL) By: Mayor Attest: Clerk Adopted this September 1, 2015. AUGUSTA AVIATION COMMISSION (SEAL) By: Chairman Attest: Secretary A-1 EXHIBIT A [FORM OF SERIES 2015A BONDS] Unless this Bond is presented by an authorized representative of The Depository Trust Company, a New York corporation (“DTC”), to Augusta, Georgia or its agent for registration of transfer, exchange or payment, and any Bond issued is registered in the name of Cede & Co. or in such other name as is requested by an authorized representative of DTC (and any payment is made to Cede & Co. or to such other entity as is requested by an authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest herein. No. RA-____ $__________ UNITED STATES OF AMERICA STATE OF GEORGIA AUGUSTA, GEORGIA AIRPORT GENERAL REVENUE REFUNDING BOND SERIES 2015A (NON-AMT) DATE: INTEREST RATE: MATURITY DATE: CUSIP: % FOR VALUE RECEIVED, AUGUSTA, GEORGIA (the “Consolidated Government”), a municipal corporation and county duly created and existing under the laws of the State of Georgia, hereby promises to pay solely from the sources hereinafter described to CEDE & CO., or registered assigns, the principal sum of ___________________ DOLLARS in lawful money of the United States of America, on the date specified above, unless redeemed prior thereto as hereinafter provided, upon presentation and surrender of this Series 2015A Bond to U.S. Bank National Association, Atlanta, Georgia, as registrar and paying agent (the “Bond Registrar” or the “Paying Agent”), and to pay interest on said principal sum (computed on the basis of a 360-day year of twelve 30-day months) at the interest rate per annum specified above, payable semiannually on January 1 and July 1 of each year (each such date an “Interest Payment Date”), commencing January 1, 2016, from the Interest Payment Date next preceding the date of authentication of this Series 2015A Bond to which interest has been paid or provided for, unless the date of authentication of this Series 2015A Bond is an Interest Payment Date to which interest has been paid or provided for, in which case from the date of authentication hereof, or unless no interest has been paid hereon, in which case from the date hereof, or unless such authentication date shall be after any record date (hereinafter defined) and before the next succeeding Interest Payment Date, in which case interest shall be paid from the next succeeding Interest Payment Date. The interest payable on any Interest Payment Date will be paid by first class mail, postage prepaid, mailed on the date on which due to the person in whose name this Series 2015A A-2 Bond is registered at the close of business on the 15th day of the calendar month next preceding such Interest Payment Date (each such date, a “Record Date”) at the address shown on the bond register maintained by the Bond Registrar on such Record Date, except that any interest not so timely paid or duly provided for shall cease to be payable to the person who is the registered owner of this Series 2015A Bond as of the Record Date and shall be payable to the person who is the registered owner of this Series 2015A Bond at the close of business on a special record date for the payment of such defaulted interest. Such special record date shall be fixed by the Bond Registrar whenever moneys become available for the payment of such defaulted interest, and notice of the special record date shall be given by first class mail by the Bond Registrar or by or on behalf of the Consolidated Government to the owner hereof not less than 50 days prior thereto. Notwithstanding the foregoing, however, interest on this Series 2015A Bond shall be payable to any registered owner of more than $1,000,000 in aggregate principal amount of the Series 2015A Bonds by deposit of immediately available funds to the account of such registered owner maintained with the Paying Agent or transmitted by wire transfer to such registered owner at an account maintained at a commercial bank located within the United States of America, if the Paying Agent receives from such registered owner written deposit or wire transfer instructions prior to the Record Date preceding the Interest Payment Date for which the deposit or wire transfer is requested. The principal of this Series 2015A Bond is payable only upon presentation and surrender of this bond at the designated corporate trust office of the Bond Registrar and Paying Agent, or its successor or successors, in any coin or currency of the United States of America which at the time of such payment is legal tender for public and private debts. Notwithstanding the foregoing, so long as this Series 2015A Bond is registered in the name of Cede & Co., payment of principal of and interest on this Series 2015A Bond shall be made by wire transfer to Cede & Co. This Series 2015A Bond shall not be valid or become obligatory for any purpose or be entitled to any security or benefit under the Bond Resolution (hereinafter described) until this Series 2015A Bond shall have been authenticated and registered upon the registration books kept by the Bond Registrar for that purpose, which authentication shall be evidenced by the manual execution of the certificate hereon by the Bond Registrar. This Series 2015A Bond is one of a series of general revenue refunding bonds in the aggregate principal amount of $__________________ duly authorized and designated “Augusta, Georgia Airport General Revenue Refunding Bonds, Series 2015A (Non-AMT)” (the “Series 2015A Bonds”) all of like tenor, except as to authentication dates, numbers, denominations, interest rates and maturities. The Series 2015A Bonds are issued by the Consolidated Government pursuant to the Constitution and laws of the State of Georgia, including specifically, but without limitation, Article 3 of Chapter 82 of Title 36 of the Official Code of Georgia Annotated, as amended, known as the “Revenue Bond Law,” an act of the General Assembly of the State of Georgia (Georgia Laws 1995 p. 3468 et seq., as amended), and the Master Bond Resolution adopted September 1, 2015 by the Consolidated Government and September 1, 2015 by the Augusta Aviation Commission (the “Bond Resolution”), for the purpose of providing A-3 funds to (a) refund $8,990,000 aggregate principal amount of its Airport Passenger Facility Charge and General Revenue Bonds, Series 2005A (Non-AMT) and (b) pay expenses necessary to accomplish the foregoing. The Series 2015A Bonds are General Revenue Bonds (as defined in the Bond Resolution) and are secured by a senior lien on Net General Revenues and Pledged PFC Revenues (as defined in the Bond Resolution). Concurrently with the issuance of the Series 2015A Bonds, pursuant to the Bond Resolution the Consolidated Government is issuing and delivering $________ aggregate principal amount of its Airport General Revenue Refunding Bonds, Series 2015B (AMT) (the “Series 2015B Bonds”), and the lien of the Series 2015A Bonds on Net General Revenues is on a parity with the lien on such revenues securing the Series 2015B Bonds. Net General Revenues include generally all revenues arising from the ownership or operation of the Airport after the payment of expenses of operation and maintenance of the Airport, but specifically exclude “PFC Revenues” (revenues received by or required to be remitted to the Augusta Aviation Commission from the passenger facility charges imposed by the Augusta Aviation Commission pursuant to the Aviation Safety and Capacity Government Expansion Act of 1990), “Special Purpose Revenues” (revenues arising from or generated by one or more Special Purpose Facilities (as defined in the Bond Resolution)) and “Released Revenues” (particular categories of Revenues which would otherwise be General Revenues but have been identified in accordance with Section 505 of the Bond Resolution and therefore do not constitute a part of General Revenues, until the Consolidated Government has acted to include such categories of Revenues within General Revenues again). Pursuant to the Bond Resolution, upon compliance with certain conditions, the Consolidated Government may (i) issue additional revenue bonds secured on a parity with the Series 2015A Bonds, (ii) issue additional revenue bonds secured on a subordinate basis to payment from the same revenues securing the Series 2015A Bonds, (iii) issue additional revenue bonds secured by revenues different from the revenues securing the Series 2015A Bonds, (iv) issue additional revenue bonds secured by a combination of (i) and (iii) or (ii) and (iii) or (v) grant a lien securing other obligations on a parity with or on a subordinate basis to the Series 2015A Bonds. The Series 2015B Bonds, the Series 2015A Bonds (with respect only to the senior lien on Net General Revenues) and additional bonds secured on a parity therewith are hereinafter referred to as the “General Revenue Bonds.” The Consolidated Government, acting by and through the Augusta Aviation Commission, has covenanted and hereby covenants and agrees at all times while any Bonds are outstanding and unpaid to prescribe, fix, maintain, and collect rates, fees, and other charges for the services and facilities of the Airport to: (i) provide for 100 percent of the Expenses of Operation and Maintenance of the Airport (except for certain specific facilities) and for the accumulation in the Operation and Maintenance Reserve Fund, as defined in the Bond Resolution, of the Operating Reserve, and (ii) produce an Amount Available to Pay Debt Service, as defined in the Bond Resolution, in each Fiscal Year, as defined in the Bond Resolution, which will: (a) equal at least 125 percent of the debt service requirement of all General Revenue Bonds, including the Series 2015A Bonds and the Series 2015B Bonds, and at least 100 percent of the debt service requirement of all Subordinate Lien Bonds and Other Airport Obligations payable from Net General Revenues, (b) enable the Consolidated Government to make all payments required to come from Net General Revenues into any Debt Service Reserve Fund and the Rebate Fund and on Contracts or Other Airport Obligations, as each is defined in the Bond Resolution, and A-4 (c) with other revenues, remedy all deficiencies in required payments into any of the funds and accounts mentioned in the Bond Resolution from prior Fiscal Years. THE SERIES 2015A BONDS SHALL NOT BE DEEMED TO CONSTITUTE A DEBT OF THE CONSOLIDATED GOVERNMENT NOR A PLEDGE OF THE FAITH AND CREDIT OF THE CONSOLIDATED GOVERNMENT. THE SERIES 2015A BONDS SHALL NOT BE PAYABLE FROM OR BE A CHARGE UPON ANY FUNDS OTHER THAN THE REVENUES AND AMOUNTS PLEDGED TO THE PAYMENT THEREOF, NOR SHALL THE CONSOLIDATED GOVERNMENT BE SUBJECT TO ANY PECUNIARY LIABILITY THEREON. NO OWNER OR OWNERS OF THIS SERIES 2015A BOND SHALL EVER HAVE THE RIGHT TO COMPEL ANY EXERCISE OF THE TAXING POWER OF THE CONSOLIDATED GOVERNMENT TO PAY THIS SERIES 2015A BOND OR THE INTEREST HEREON, NOR TO ENFORCE PAYMENT OF THIS SERIES 2015A BOND AGAINST ANY PROPERTY OF THE CONSOLIDATED GOVERNMENT; NOR SHALL THIS SERIES 2015A BOND CONSTITUTE A CHARGE, LIEN, OR ENCUMBRANCE, LEGAL OR EQUITABLE, UPON ANY PROPERTY OF THE CONSOLIDATED GOVERNMENT, EXCEPT FOR THE NET GENERAL REVENUES, PLEDGED PFC REVENUES AND ANY OTHER FUNDS PLEDGED TO SECURE THE PAYMENT OF THE SERIES 2015A BONDS. No covenants, stipulations, obligations or agreements of any officer, agent, attorney or employee of the Consolidated Government or the Augusta Aviation Commission shall be deemed to be covenants, stipulations, obligations or agreements of any such officer, agent, attorney or employee, past or present, in his individual capacity. No recourse shall be had for the payment of the Series 2015A Bonds or any claim thereon against any member, director, officer, agent, attorney or employee of the Consolidated Government or the Augusta Aviation Commission, past, present or future. The person in whose name this Series 2015A Bond is registered on the registration books kept by the Bond Registrar shall be deemed to be the owner of this Series 2015A Bond for all purposes. The Series 2015A Bonds are being issued by means of a book-entry system, with actual Series 2015A Bonds immobilized at The Depository Trust Company, New York, New York (the “Securities Depository”), or its successor as Securities Depository, evidencing ownership of the Series 2015A Bonds in Authorized Denominations (hereinafter defined), and with transfers of beneficial ownership effected on the records of the Securities Depository and its participants pursuant to the rules and procedures established by the Securities Depository. Actual Series 2015A Bonds are not available for distribution to the owners of beneficial interests in the Series 2015A Bonds registered in book-entry form (the “Beneficial Owners”), except under the limited circumstances set forth in the Bond Resolution. The principal, redemption premium (if any) and interest on the Series 2015A Bonds are payable by the Paying Agent to Cede & Co., as nominee of the Securities Depository. Transfers of principal, redemption premium (if any) and interest payments to participants of the Securities Depository is the responsibility of the Securities Depository and transfers of principal, redemption premium (if any) and interest to Beneficial Owners of the Series 2015A Bonds by participants of the Securities Depository will be the responsibility of such participants and other nominees of Beneficial Owners. Neither the Consolidated Government nor the Bond Registrar and Paying Agent is responsible or liable for maintaining, supervising or reviewing the records maintained A-5 by the Securities Depository, its participants or persons acting through such participants. If the Series 2015A Bonds are no longer registered to a Securities Depository or its nominee, this Series 2015A Bond may be registered as transferred only upon the registration books kept for that purpose at the principal corporate trust office of the Bond Registrar by the registered owner hereof in person, or by his or her attorney duly authorized in writing, upon presentation and surrender to the Bond Registrar of this Series 2015A Bond duly endorsed for registration of transfer or accompanied by an assignment duly executed by the registered owner or his or her attorney duly authorized in writing, and thereupon a new registered bond, in the same aggregate principal amount and of the same maturity, shall be issued to the transferee in exchange therefor. In addition, if the Series 2015A Bonds are no longer registered to a Securities Depository, this Series 2015A Bond may be exchanged by the registered owner hereof or his or her duly authorized attorney upon presentation at the principal corporate trust office of the Bond Registrar for an equal aggregate principal amount of Series 2015A Bonds of the same maturity and in any Authorized Denominations in the manner, subject to the conditions and upon payment of charges, if any, provided in the Bond Resolution. The Series 2015A Bonds are issuable in the form of fully registered bonds in denominations of $5,000 and any integral multiple thereof (“Authorized Denominations”) and may be exchanged by the registered owner hereof or his duly authorized attorney upon presentation at the designated corporate trust office of the Bond Registrar for an equal aggregate principal amount of Series 2015A Bonds of the same maturity and series and in any Authorized Denominations in the manner, subject to the conditions and upon payment of charges, if any, provided in the Bond Resolution. The Series 2015A Bonds may not be called for optional redemption prior to January 1, _____. The Series 2015A Bonds maturing on or after January 1, _____ may be redeemed prior to their respective maturities at the option of the Consolidated Government, either in whole or in part at any time not earlier than January 1, _____, in the manner and subject to the provisions of the Bond Resolution, at a redemption price equal to 100% of the principal amount of the Series 2015A Bonds to be redeemed, together with accrued interest to the redemption date. If less than all of the Series 2015A Bonds of a maturity shall be called for redemption, the particular bonds or portions thereof to be redeemed shall be selected by lot in such manner as may be designated by the Bond Registrar. The Series 2015A Bonds shall be subject to mandatory redemption prior to maturity on January 1, _____ and on each succeeding January 1 to and including January 1, _____ (the last maturity to be paid rather than redeemed), in part, by lot in such manner as may be designated by the Bond Registrar, at par plus accrued interest to the redemption date, in the following years and principal amounts: A-6 Year Amount The Consolidated Government shall be entitled to receive a credit in respect of its mandatory sinking fund redemption obligation for Series 2015A Bonds delivered, purchased, or redeemed, as hereinafter described, if the Consolidated Government at its option purchases in the open market and delivers to the Paying Agent for cancellation Series 2015A Bonds or redeems Series 2015A Bonds (other than through mandatory sinking fund redemption) and such Series 2015A Bonds have not theretofore been applied as a credit against any mandatory redemption obligation. Each such Series 2015A Bond so purchased or redeemed shall be credited by the Paying Agent at 100% of the principal amount thereof on the obligation of the Consolidated Government with respect to the Series 2015A Bonds on such mandatory redemption payment date, and any excess shall be credited on future mandatory sinking fund redemption obligations in chronological order, and the principal amount of such Series 2015A Bonds to be redeemed by operation of mandatory redemption shall be accordingly reduced. Notice of redemption, unless waived, is to be given by first class mail at least 30 days and not more than 60 days prior to the date fixed for redemption to the registered owner of each Series 2015A Bond to be redeemed at the address shown on the Bond Register or at such other address as is furnished in writing by such registered owner to the Bond Registrar. All such Series 2015A Bonds called for redemption and for the retirement of which funds are duly provided shall, on the redemption date designated in such notice, become and be due and payable at the redemption price provided for redemption of such Series 2015A Bonds on such date, and interest on the Series 2015A Bonds or portions of Series 2015A Bonds so called for redemption shall cease to accrue, such Series 2015A Bonds or portions of Series 2015A Bonds shall cease to be entitled to any lien, benefit, or security under the Bond Resolution, and the owners of such Series 2015A Bonds or portions of Series 2015A Bonds shall have no rights in respect thereof except to receive payment of the redemption price. The Bond Resolution permits optional redemptions as described above to be conditioned on the occurrence of particular events and, if a redemption is so conditioned, the notice thereof will specify the terms of such conditional redemption. Any defect in any notice of redemption shall not affect the validity of proceedings for the redemption of any Series 2015A Bonds. The Bond Resolution contains a more particular statement of the covenants and provisions securing the Series 2015A Bonds, the conditions under which the owner of this Series 2015A Bond may enforce covenants (other than the covenant to pay principal of and interest on this Series 2015A Bond when due from the sources provided, the right to enforce which is unconditional), the conditions upon which additional revenue bonds may be issued on a parity or achieve parity status with this Series 2015A Bond under the Bond Resolution, and the conditions upon which the Bond Resolution may be amended or supplemented. Upon the occurrence of an Event of Default under the Bond Resolution, the owner of this Series 2015A Bond shall be entitled to the remedies provided by the Bond Resolution and the Revenue Bond Law. A-7 It is hereby certified, recited, and declared that all acts, conditions, and things required by the Constitution and the laws of the State of Georgia to exist, happen, and be performed precedent to and in the issuance of this Series 2015A Bond and the adoption of the Bond Resolution do exist, have happened, and have been performed in due time, form, and manner as required by law. A-8 IN WITNESS WHEREOF, the Consolidated Government has caused this Series 2015A Bond to be executed by the manual [facsimile] signature of its Mayor and the Chairman of the Augusta Aviation Commission and has caused the official seal of the Consolidated Government to be impressed on this Series 2015A Bond and attested by the manual [facsimile] signature of its Clerk, as of _______________, 2015. AUGUSTA, GEORGIA (SEAL) By: Mayor By: Chairman, Augusta Aviation Commission Attest: Clerk * * * * * A-9 CERTIFICATE OF AUTHENTICATION Date of Authentication: This bond is one of the Series 2015A Bonds described herein. U.S. BANK NATIONAL ASSOCIATION, as Bond Registrar By: Authorized Signatory * * * * * A-10 VALIDATION CERTIFICATE STATE OF GEORGIA ) ) COUNTY OF RICHMOND ) The undersigned Clerk of the Superior Court of Richmond County, State of Georgia, DOES HEREBY CERTIFY that this Bond and the security therefor was validated and confirmed by judgment of the Superior Court of Richmond County, on September __, 2015, that no intervention or objection was filed opposing the validation of this Bond and the security therefor, and that no appeal of such judgment of validation has been taken. Witness my (facsimile) signature and seal of the Superior Court of Richmond County, Georgia. Clerk, Superior Court Richmond County, Georgia (SEAL) * * * * * A-11 ASSIGNMENT FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers unto [Please print or typewrite name and address including postal zip code.] [Please insert Social Security or Tax Identification Number of Assignee.] the within bond and all rights thereunder, hereby constituting and appointing attorney to transfer this Bond on the bond registration book kept for such purpose by the Bond Registrar, with full power of substitution in the premises. Signature Guaranteed _______________________________________ Notice: Signature(s) must be guaranteed by an eligible guarantor Authority (such as banks, stockbrokers, savings and loan associations and credit unions) with membership in an approved Signature Guarantee Medallion Program pursuant to S.E.C. Rule 17Ad-15. _____________________________________ Registered Owner Notice: The signature(s) on this assignment must correspond with the name as it appears on the face of the within bond in every particular without alterations, enlargement or any change whatsoever. * * * * * B-1 EXHIBIT B [FORM OF SERIES 2015B BONDS] Unless this Bond is presented by an authorized representative of The Depository Trust Company, a New York corporation (“DTC”), to Augusta, Georgia or its agent for registration of transfer, exchange or payment, and any Bond issued is registered in the name of Cede & Co. or in such other name as is requested by an authorized representative of DTC (and any payment is made to Cede & Co. or to such other entity as is requested by an authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest herein. No. RB-____ $__________ UNITED STATES OF AMERICA STATE OF GEORGIA AUGUSTA, GEORGIA AIRPORT GENERAL REVENUE REFUNDING BOND SERIES 2015B (AMT) DATE: INTEREST RATE: MATURITY DATE: CUSIP: % FOR VALUE RECEIVED, AUGUSTA, GEORGIA (the “Consolidated Government”), a municipal corporation and a county duly created and existing under the laws of the State of Georgia, hereby promises to pay solely from the sources hereinafter described to CEDE & CO., or registered assigns, the principal sum of ___________________ DOLLARS in lawful money of the United States of America, on the date specified above, unless redeemed prior thereto as hereinafter provided, upon presentation and surrender of this Series 2015B Bond to U.S. Bank National Association, Atlanta, Georgia, as registrar and paying agent (the “Bond Registrar” or the “Paying Agent”), and to pay interest on said principal sum (computed on the basis of a 360-day year of twelve 30-day months) at the interest rate per annum specified above, payable semiannually on January 1 and July 1 of each year (each such date an “Interest Payment Date”), commencing January 1, 2016, from the Interest Payment Date next preceding the date of authentication of this Series 2015B Bond to which interest has been paid or provided for, unless the date of authentication of this Series 2015B Bond is an Interest Payment Date to which interest has been paid or provided for, in which case from the date of authentication hereof, or unless no interest has been paid hereon, in which case from the date hereof, or unless such authentication date shall be after any record date (hereinafter defined) and before the next succeeding Interest Payment Date, in which case interest shall be paid from the next succeeding Interest Payment Date. B-2 The interest payable on any Interest Payment Date will be paid by first class mail, postage prepaid, mailed on the date on which due to the person in whose name this Series 2015B Bond is registered at the close of business on the 15th day of the calendar month next preceding such Interest Payment Date (each such date, a “Record Date”) at the address shown on the bond register maintained by the Bond Registrar on such Record Date, except that any interest not so timely paid or duly provided for shall cease to be payable to the person who is the registered owner of this Series 2015B Bond as of the Record Date and shall be payable to the person who is the registered owner of this Series 2015B Bond at the close of business on a special record date for the payment of such defaulted interest. Such special record date shall be fixed by the Bond Registrar whenever moneys become available for the payment of such defaulted interest, and notice of the special record date shall be given by first class mail by the Bond Registrar or by or on behalf of the Consolidated Government to the owner hereof not less than 50 days prior thereto. Notwithstanding the foregoing, however, interest on this Series 2015B Bond shall be payable to any registered owner of more than $1,000,000 in aggregate principal amount of the Series 2015B Bonds by deposit of immediately available funds to the account of such registered owner maintained with the Paying Agent or transmitted by wire transfer to such registered owner at an account maintained at a commercial bank located within the United States of America, if the Paying Agent receives from such registered owner written deposit or wire transfer instructions prior to the Record Date preceding the Interest Payment Date for which the deposit or wire transfer is requested. The principal of this Series 2015B Bond is payable only upon presentation and surrender of this bond at the designated corporate trust office of the Bond Registrar and Paying Agent, or its successor or successors, in any coin or currency of the United States of America which at the time of such payment is legal tender for public and private debts. Notwithstanding the foregoing, so long as this Series 2015B Bond is registered in the name of Cede & Co., payment of principal of and interest on this Series 2015B Bond shall be made by wire transfer to Cede & Co. This Series 2015B Bond shall not be valid or become obligatory for any purpose or be entitled to any security or benefit under the Bond Resolution (hereinafter described) until this Series 2015B Bond shall have been authenticated and registered upon the registration books kept by the Bond Registrar for that purpose, which authentication shall be evidenced by the manual execution of the certificate hereon by the Bond Registrar. This Series 2015B Bond is one of a series of airport general revenue refunding bonds in the aggregate principal amount of $__________________ duly authorized and designated “Augusta, Georgia Airport General Revenue Refunding Bonds, Series 2015B” (the “Series 2015B Bonds”) all of like tenor, except as to authentication dates, numbers, denominations, interest rates and maturities. The Series 2015B Bonds are issued by the Consolidated Government pursuant to the Constitution and laws of the State of Georgia, including specifically, but without limitation, Article 3 of Chapter 82 of Title 36 of the Official Code of Georgia Annotated, as amended, known as the “Revenue Bond Law,” an act of the General Assembly of the State of Georgia (Georgia Laws 1995 p. 3468 et seq., as amended), and the Master Bond B-3 Resolution adopted September 1, 2015 by the Consolidated Government and September 1, 2015 by the Augusta Aviation Commission (the “Bond Resolution”), for the purpose of providing funds to (a) refund $6,090,000 aggregate principal amount of its Airport General Revenue Bonds, Series 2005C (AMT) and (b) pay expenses necessary to accomplish the foregoing. The Series 2015B Bonds are General Revenue Bonds (as defined in the Bond Resolution) secured by a senior lien on the Net General Revenues (as defined in the Bond Resolution) of the Airport. Net General Revenues include generally all revenues arising from the ownership or operation of the Airport remaining after the payment of expenses of operation and maintenance of the Airport, but specifically exclude “PFC Revenues” (revenues received by or required to be remitted to the Augusta Aviation Commission from the passenger facility charges imposed by the Augusta Aviation Commission pursuant to the Aviation Safety and Capacity Expansion Act of 1990), “Special Purpose Revenues” (revenues arising from or generated by one or more Special Purpose Facilities (as defined in the Bond Resolution)) and “Released Revenues” (particular categories of Revenues which would otherwise be General Revenues but have been identified in accordance with Section 505 of the Bond Resolution and therefore do not constitute a part of General Revenues, until the Consolidated Government has acted to include such categories of Revenues within General Revenues again). Concurrently with the issuance of the Series 2015B Bonds and pursuant to the Bond Resolution, the Consolidated Government is issuing and delivering $__________ aggregate principal amount of its Airport General Revenue Refunding Bonds, Series 2015A (Non-AMT) (the “Series 2015A Bonds”). The Series 2015B Bonds are secured on a parity with the Series 2015A Bonds by a senior lien on the Net General Revenues of the Airport. The Series 2015A Bonds are also secured by a senior lien on Pledged PFC Revenues. Pursuant to the Bond Resolution, upon compliance with certain conditions, the Consolidated Government may (i) issue additional revenue bonds secured on a parity with the Series 2015B Bonds and the Series 2015A Bonds, (ii) issue additional revenue bonds secured on a subordinate basis to payment from the same revenues securing the Series 2015B Bonds and the Series 2015A Bonds, (iii) issue additional revenue bonds secured by revenues different from the revenues securing the Series 2015B Bonds and the Series 2015A Bonds, (iv) issue additional revenue bonds secured by a combination of (i) and (iii) or (ii) and (iii), or (v) grant a lien securing other obligations on a parity with or on a subordinate basis to the Series 2015B Bonds and the Series 2015A Bonds. The Series 2015B Bonds, the Series 2015A Bonds (with respect only to the senior lien on Net General Revenues) and additional bonds secured on a parity therewith are hereinafter referred to as the “General Revenue Bonds.” The Consolidated Government acting by and through the Augusta Aviation Commission has covenanted and hereby covenants and agrees at all times while any General Revenue Bonds are outstanding and unpaid to prescribe, fix, maintain, and collect rates, fees, and other charges for the services and facilities of the Airport to: (i) provide for 100 percent of the Expenses of Operation and Maintenance of the Airport (except for certain specific facilities) and for the accumulation in the Operation and Maintenance Reserve Fund, as defined in the Bond Resolution, of the Operating Reserve, and (ii) produce an Amount Available to Pay Debt Service as defined in the Bond Resolution, in each Fiscal Year, as defined in the Bond Resolution, which will: (a) equal at least 125 percent of the debt service requirement of all General Revenue Bonds, including the Series 2015B Bonds and the Series 2015A Bonds, and at least 100 percent of the B-4 debt service requirement of all Subordinate Lien Bonds and Other Airport Obligations payable from Net General Revenues, (b) enable the Consolidated Government to make all payments required to come from Net General Revenues into any Debt Service Reserve Fund and the Rebate Fund and on Contracts or Other Airport Obligations, as each is defined in the Bond Resolution, and (c) with other revenues, remedy all deficiencies in required payments into any of the funds and accounts mentioned in the Bond Resolution from prior Fiscal Years. THE SERIES 2015B BONDS SHALL NOT BE DEEMED TO CONSTITUTE A DEBT OF THE CONSOLIDATED GOVERNMENT NOR A PLEDGE OF THE FAITH AND CREDIT OF THE CONSOLIDATED GOVERNMENT. THE SERIES 2015B BONDS SHALL NOT BE PAYABLE FROM OR BE A CHARGE UPON ANY FUNDS OTHER THAN THE REVENUES AND AMOUNTS PLEDGED TO THE PAYMENT THEREOF, NOR SHALL THE CONSOLIDATED GOVERNMENT BE SUBJECT TO ANY PECUNIARY LIABILITY THEREON. NO OWNER OR OWNERS OF THIS SERIES 2015B BOND SHALL EVER HAVE THE RIGHT TO COMPEL ANY EXERCISE OF THE TAXING POWER OF THE CONSOLIDATED GOVERNMENT TO PAY THIS SERIES 2015B BOND OR THE INTEREST HEREON, NOR TO ENFORCE PAYMENT OF THIS SERIES 2015B BOND AGAINST ANY PROPERTY OF THE CONSOLIDATED GOVERNMENT; NOR SHALL THIS SERIES 2015B BOND CONSTITUTE A CHARGE, LIEN, OR ENCUMBRANCE, LEGAL OR EQUITABLE, UPON ANY PROPERTY OF THE CONSOLIDATED GOVERNMENT, EXCEPT FOR THE NET GENERAL REVENUES AND ANY OTHER FUNDS PLEDGED TO SECURE THE PAYMENT OF THE SERIES 2015B BONDS. No covenants, stipulations, obligations or agreements of any officer, agent, attorney or employee of the Consolidated Government or the Augusta Aviation Commission shall be deemed to be covenants, stipulations, obligations or agreements of any such officer, agent, attorney or employee, past or present, in his individual capacity. No recourse shall be had for the payment of the Series 2015B Bonds or any claim thereon against any member, director, officer, agent, attorney or employee of the Consolidated Government or the Augusta Aviation Commission, past, present or future. The person in whose name this Series 2015B Bond is registered on the registration books kept by the Bond Registrar shall be deemed to be the owner of this Series 2015B Bond for all purposes. The Series 2015B Bonds are being issued by means of a book-entry system, with actual Series 2015B Bonds immobilized at The Depository Trust Company, New York, New York (the “Securities Depository”), or its successor as Securities Depository, evidencing ownership of the Series 2015B Bonds in Authorized Denominations (hereinafter defined), and with transfers of beneficial ownership effected on the records of the Securities Depository and its participants pursuant to the rules and procedures established by the Securities Depository. Actual Series 2015B Bonds are not available for distribution to the owners of beneficial interests in the Series 2015B Bonds registered in book-entry form (the “Beneficial Owners”), except under the limited circumstances set forth in the Bond Resolution. The principal, redemption premium (if any) and interest on the Series 2015B Bonds are payable by the Paying Agent to Cede & Co., as nominee of the Securities Depository. Transfers of principal, redemption premium (if any) and interest payments to participants of the Securities Depository is the responsibility of the Securities Depository and transfers of principal, redemption premium (if B-5 any) and interest to Beneficial Owners of the Series 2015B Bonds by participants of the Securities Depository will be the responsibility of such participants and other nominees of Beneficial Owners. Neither the Consolidated Government nor the Bond Registrar and Paying Agent is responsible or liable for maintaining, supervising or reviewing the records maintained by the Securities Depository, its participants or persons acting through such participants. If the Series 2015B Bonds are no longer registered to a Securities Depository or its nominee, this Series 2015B Bond may be registered as transferred only upon the registration books kept for that purpose at the principal corporate trust office of the Bond Registrar by the registered owner hereof in person, or by his or her attorney duly authorized in writing, upon presentation and surrender to the Bond Registrar of this Series 2015B Bond duly endorsed for registration of transfer or accompanied by an assignment duly executed by the registered owner or his or her attorney duly authorized in writing, and thereupon a new registered bond, in the same aggregate principal amount and of the same maturity, shall be issued to the transferee in exchange therefor. In addition, if the Series 2015B Bonds are no longer registered to a Securities Depository, this Series 2015B Bond may be exchanged by the registered owner hereof or his or her duly authorized attorney upon presentation at the principal corporate trust office of the Bond Registrar for an equal aggregate principal amount of Series 2015B Bonds of the same maturity and in any Authorized Denominations in the manner, subject to the conditions and upon payment of charges, if any, provided in the Bond Resolution. The Series 2015B Bonds are issuable in the form of fully registered bonds in denominations of $5,000 and any integral multiple thereof (“Authorized Denominations”) and may be exchanged by the registered owner hereof or his duly authorized attorney upon presentation at the designated corporate trust office of the Bond Registrar for an equal aggregate principal amount of Series 2015B Bonds of the same maturity and series and in any Authorized Denominations in the manner, subject to the conditions and upon payment of charges, if any, provided in the Bond Resolution. The Series 2015B Bonds may not be called for optional redemption prior to January 1, _____. The Series 2015B Bonds maturing on or after January 1, _____ may be redeemed prior to their respective maturities at the option of the Consolidated Government, either in whole or in part at any time not earlier than January 1, _____, in the manner and subject to the provisions of the Bond Resolution, at a redemption price equal to 100% of the principal amount of the Series 2015B Bonds to be redeemed, together with accrued interest to the redemption date. If less than all of the Series 2015B Bonds of a maturity shall be called for redemption, the particular bonds or portions thereof to be redeemed shall be selected by lot in such manner as may be designated by the Bond Registrar. The Series 2015B Bonds shall be subject to mandatory redemption prior to maturity on January 1, _____ and on each succeeding January 1 to and including January 1, _____ (the last maturity to be paid rather than redeemed), in part, by lot in such manner as may be designated by the Bond Registrar, at par plus accrued interest to the redemption date, in the following years and principal amounts: B-6 Year Amount The Consolidated Government shall be entitled to receive a credit in respect of its mandatory sinking fund redemption obligation for Series 2015B Bonds delivered, purchased, or redeemed, as hereinafter described, if the Consolidated Government at its option purchases in the open market and delivers to the Paying Agent for cancellation Series 2015B Bonds or redeems Series 2015B Bonds (other than through mandatory sinking fund redemption) and such Series 2015B Bonds have not theretofore been applied as a credit against any mandatory redemption obligation. Each such Series 2015B Bond so purchased or redeemed shall be credited by the Paying Agent at 100% of the principal amount thereof on the obligation of the Consolidated Government with respect to the Series 2015B Bonds on such mandatory redemption payment date, and any excess shall be credited on future mandatory sinking fund redemption obligations in chronological order, and the principal amount of such Series 2015B Bonds to be redeemed by operation of mandatory redemption shall be accordingly reduced. Notice of redemption, unless waived, is to be given by first class mail at least 30 days and not more than 60 days prior to the date fixed for redemption to the registered owner of each Series 2015B Bond to be redeemed at the address shown on the Bond Register or at such other address as is furnished in writing by such registered owner to the Bond Registrar. All such Series 2015B Bonds called for redemption and for the retirement of which funds are duly provided shall, on the redemption date designated in such notice, become and be due and payable at the redemption price provided for redemption of such Series 2015B Bonds on such date, and interest on the Series 2015B Bonds or portions of Series 2015B Bonds so called for redemption shall cease to accrue, such Series 2015B Bonds or portions of Series 2015B Bonds shall cease to be entitled to any lien, benefit, or security under the Bond Resolution, and the owners of such Series 2015B Bonds or portions of Series 2015B Bonds shall have no rights in respect thereof except to receive payment of the redemption price. The Bond Resolution permits optional redemptions as described above to be conditioned on the occurrence of particular events and, if a redemption is so conditioned, the notice thereof will specify the terms of such conditional redemption. Any defect in any notice of redemption shall not affect the validity of proceedings for the redemption of any Series 2015B Bonds. The Bond Resolution contains a more particular statement of the covenants and provisions securing the Series 2015B Bonds, the conditions under which the owner of this Series 2015B Bond may enforce covenants (other than the covenant to pay principal of and interest on this Series 2015B Bond when due from the sources provided, the right to enforce which is unconditional), the conditions upon which additional revenue bonds may be issued on a parity or achieve parity status with this Series 2015B Bond under the Bond Resolution, and the conditions upon which the Bond Resolution may be amended or supplemented. Upon the occurrence of an Event of Default under the Bond Resolution, the owner of this Series 2015B Bond shall be entitled to the remedies provided by the Bond Resolution and the Revenue Bond Law. B-7 It is hereby certified, recited, and declared that all acts, conditions, and things required by the Constitution and the laws of the State of Georgia to exist, happen, and be performed precedent to and in the issuance of this Series 2015B Bond and the adoption of the Bond Resolution do exist, have happened, and have been performed in due time, form, and manner as required by law. B-8 IN WITNESS WHEREOF, the Consolidated Government has caused this Series 2015B Bond to be executed by the manual [facsimile] signature of its Mayor and the Chairman of the Augusta Aviation Commission and has caused the official seal of the Consolidated Government to be impressed on this Series 2015B Bond and attested by the manual [facsimile] signature of its Clerk, as of _______________, 2015. AUGUSTA, GEORGIA (SEAL) By: Mayor By: Chairman, Augusta Aviation Commission Attest: Clerk * * * * * B-9 CERTIFICATE OF AUTHENTICATION Date of Authentication: This bond is one of the Series 2015B Bonds described herein. U.S. BANK NATIONAL ASSOCIATION, as Bond Registrar By: Authorized Signatory * * * * * B-10 VALIDATION CERTIFICATE STATE OF GEORGIA ) ) COUNTY OF RICHMOND ) The undersigned Clerk of the Superior Court of Richmond County, State of Georgia, DOES HEREBY CERTIFY that this Bond and the security therefor was validated and confirmed by judgment of the Superior Court of Richmond County, on September __, 2015, that no intervention or objection was filed opposing the validation of this Bond and the security therefor, and that no appeal of such judgment of validation has been taken. Witness my (facsimile) signature and seal of the Superior Court of Richmond County, Georgia. Clerk, Superior Court Richmond County, Georgia (SEAL) * * * * * B-11 ASSIGNMENT FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers unto [Please print or typewrite name and address including postal zip code.] [Please insert Social Security or Tax Identification Number of Assignee.] the within bond and all rights thereunder, hereby constituting and appointing attorney to transfer this Bond on the bond registration book kept for such purpose by the Bond Registrar, with full power of substitution in the premises. Signature Guaranteed _______________________________________ Notice: Signature(s) must be guaranteed by an eligible guarantor Authority (such as banks, stockbrokers, savings and loan associations and credit unions) with membership in an approved Signature Guarantee Medallion Program pursuant to S.E.C. Rule 17Ad-15. _____________________________________ Registered Owner Notice: The signature(s) on this assignment must correspond with the name as it appears on the face of the within bond in every particular without alterations, enlargement or any change whatsoever. * * * * * C-1 EXHIBIT C FORM OF REDEMPTION NOTICE FOR SERIES 2005A BONDS CONDITIONAL NOTICE OF REDEMPTION AUGUSTA, GEORGIA AIRPORT PASSENGER FACILITY CHARGE AND GENERAL REVENUE BONDS SERIES 2005A (Non-AMT) NOTICE IS HEREBY GIVEN that the above-captioned revenue bonds more fully described below (the “Bonds”) in the principal amount of $8,990,000 and bearing interest at 5.15% are called for redemption prior to their maturity and will be redeemed in full on October 2, 2015 (the “Redemption Date”) at a price of 100% of the principal amount to be redeemed (the “Redemption Price”), plus accrued interest to the Redemption Date. From and after the Redemption Date, interest on the Bonds shall cease to accrue and any pledge of security or collateral for the Bonds called for redemption shall also cease on the Redemption Date. CUSIP Number Maturity Date (January 1) 051177BG7 2035 Augusta, Georgia (the “Issuer”) proposes to issue the Augusta, Georgia Airport General Revenue Refunding Bonds, Series 2015A (Non-AMT) (the “Series 2015A Bonds”). The proceeds of the Series 2015A Bonds will be used by the Issuer to redeem the Bonds on the Redemption Date. In the event the Series 2015A Bonds are not issued, the redemption will be rescinded, and a notice cancelling the redemption will be given. Pursuant to the resolutions pursuant to which the Bonds were issued, payment of the Redemption Price on the Bonds called for redemption will be paid without presentation of the Bonds if presentment is not required and upon presentation of the Bonds if presentment is required. If presentment is required, surrender thereof can be made in the following manner: If by Mail: U. S. Bank Corporate Trust Services P.O. Box 64111 St. Paul, MN 55164-0111 If by Hand or Overnight Mail: U. S. Bank Corporate Trust Services 60 Livingston Ave 1st Fl – Bond Drop Window St. Paul, MN 55107 1-800-934-6802 Bondholders presenting their bonds in person for same day payment must surrender their bond(s) by 1:00 P.M. on the Redemption Date and a check will be available for pick up after C-2 2:00 P.M. Checks not picked up by 4:30 P.M. will be mailed out to the bondholder via first class mail. If payment of the Redemption Price is to be made to the registered owner of the Bond, you are not required to endorse the Bond to collect the Redemption Price. Neither Augusta, Georgia nor the Bond Registrar shall be responsible for the use of the CUSIP number(s) selected, nor is any representation made as to their correctness indicated in the notice or as printed on any Bond. They are included solely for the convenience of the bondholders. REQUIREMENT INFORMATION For a list of redemption requirements please visit our website at www.usbank.com/coporatetrust and click on the “Bondholder Information” link. IMPORTANT NOTICE Under the Jobs and Growth Tax Relief Reconciliation Act of 2003 (the “Act”), 28% will be withheld if tax identification number is not properly certified. Dated: September 2, 2015 U.S. BANK NATIONAL ASSOCIATION, as Bond Registrar D-1 EXHIBIT D FORM OF REDEMPTION NOTICE FOR SERIES 2005B BONDS CONDITIONAL NOTICE OF REDEMPTION AUGUSTA, GEORGIA AIRPORT GENERAL REVENUE BONDS SERIES 2005C (AMT) NOTICE IS HEREBY GIVEN that a portion of the above-captioned revenue bonds more fully described below (the “Bonds”) in the principal amount of $6,090,000 and bearing interest at 5.45% are called for redemption prior to their maturity and will be redeemed in full on October 2, 2015 (the “Redemption Date”) at a price of 100% of the principal amount to be redeemed (the “Redemption Price”), plus accrued interest to the Redemption Date. From and after the Redemption Date, interest on the Bonds shall cease to accrue and any pledge of security or collateral for the Bonds called for redemption shall also cease on the Redemption Date. Maturity Date CUSIP Number (January 1) 051177BH5 2031 Augusta, Georgia (the “Issuer”) proposes to issue the Augusta, Georgia Airport General Revenue Refunding Bonds, Series 2015B (AMT) (the “Series 2015B Bonds”). The proceeds of the Series 2015B Bonds will be used by the Issuer to redeem the Bonds on the Redemption Date. In the event the Series 2015B Bonds are not issued, the redemption will be rescinded, and a notice cancelling the redemption will be given. Pursuant to the resolutions pursuant to which the Bonds were issued, payment of the Redemption Price on the Bonds called for redemption will be paid without presentation of the Bonds if presentment is not required and upon presentation of the Bonds if presentment is required. If presentment is required, surrender thereof can be made in the following manner: If by Mail: U. S. Bank Corporate Trust Services P. O. Box 64111 St. Paul, MN 55164-0111 If by Hand or Overnight Mail: U. S. Bank Corporate Trust Services 60 Livingston Ave 1st Fl – Bond Drop Window St. Paul, MN 55107 1-800-934-6802 Bondholders presenting their bonds in person for same day payment must surrender their bond(s) by 1:00 P.M. on the Redemption Date and a check will be available for pick up after D-2 2:00 P.M. Checks not picked up by 4:30 P.M. will be mailed out to the bondholder via first class mail. If payment of the Redemption Price is to be made to the registered owner of the Bond, you are not required to endorse the Bond to collect the Redemption Price. Neither Augusta, Georgia nor the Bond Registrar shall be responsible for the use of the CUSIP number(s) selected, nor is any representation made as to their correctness indicated in the notice or as printed on any Bond. They are included solely for the convenience of the bondholders. REQUIREMENT INFORMATION For a list of redemption requirements please visit our website at www.usbank.com/coporatetrust and click on the “Bondholder Information” link. IMPORTANT NOTICE Under the Jobs and Growth Tax Relief Reconciliation Act of 2003 (the “Act”), 28% will be withheld if tax identification number is not properly certified. Dated: September 2, 2015 U.S. BANK NATIONAL ASSOCIATION, as Bond Registrar CLERK’S CERTIFICATE GEORGIA, RICHMOND COUNTY The undersigned Clerk of the Augusta-Richmond County Commission (the “Commission”), DOES HEREBY CERTIFY that the foregoing pages constitute a true and correct copy of the resolution adopted by the Commission at an open public meeting duly called and lawfully assembled on September 1, 2015, at which a quorum was present and acting throughout, authorizing the issuance of $_______________ Augusta, Georgia Airport General Revenue Refunding Bonds, Series 2015A (Non-AMT) and of $_______________ Augusta, Georgia Airport General Revenue Refunding Bonds, Series 2015B (AMT) the original of said resolution being duly recorded in the Minute Book of the Commission, which Minute Book is in my custody and control, and that said resolution was duly adopted by a vote of: Aye ____ Nay ____ Abstain ____. WITNESS my hand and the official seal of Augusta, Georgia this September __, 2015 Clerk (SEAL) CUSTODIAN AGREEMENT THIS CUSTODIAN AGREEMENT (this “Agreement”), is entered into as of September __, 2015 by and between Augusta, Georgia (the “Issuer”), the Augusta Aviation Commission and U.S. Bank National Association (“Bank”), as custodian of the Accounts (hereinafter defined). RECITALS WHEREAS the Issuer has duly authorized and provided for the issuance of the Issuer’s Airport General Revenue Refunding Bonds, Series 2015A (Non-AMT) and Airport General Revenue Refunding Bonds, Series 2015B (AMT) (collectively, the “Bonds”), and the Bonds are fully registered bonds without coupons; and WHEREAS the Issuer will ensure all things necessary to make the Bonds the valid obligations of the Issuer, in accordance with their terms, will be done upon the issuance and delivery thereof; and WHEREAS under a master bond resolution of the Issuer adopted on September 1, 2015 (the “Bond Resolution”) the Issuer maintains certain accounts for the account of the Augusta Aviation Commission designated as the “Augusta, Georgia Airport Operation and Maintenance Reserve Fund,” the “Augusta, Georgia Airport Debt Service Fund,” the “Augusta, Georgia Airport Debt Service Reserve Fund,” the “Augusta, Georgia Airport Rebate Fund” and the “Costs of Issuance Fund” (collectively the “Accounts”); and WHEREAS the Issuer covenants that moneys in the Accounts shall be used solely for the purposes set forth in the Bond Resolution; and WHEREAS the Issuer and the Bank wish to provide the terms under which the Bank will act as custodian of the Accounts, with respect to receipts and disbursements of the Accounts, the maintenance of separate records with respect to the receipts and disbursements, and by which the moneys deposited with the Bank in the Accounts shall be held in trust for the purposes set forth in the Bond Resolution, in accordance with the terms thereof; and WHEREAS the Bank has agreed to serve in such capacities for and on behalf of the Issuer and has full power and authority to perform and serve as custodian of the Accounts; and WHEREAS the Issuer has duly authorized the execution and delivery of this Agreement, and all things necessary to make this Agreement a valid agreement have been done. NOW, THEREFORE, it is mutually agreed as follows: ARTICLE ONE DEFINITIONS Section 1.01. Definitions. For all purposes of this Agreement except as otherwise expressly provided or unless the context otherwise requires: “Accounts” has the meaning set forth in the recitals of this Agreement. 2 “Augusta Aviation Commission” means the Issuer’s Augusta Aviation Commission or any successor agency, department or branch of the Issuer having responsibility for the operation of the Augusta Regional Airport at Bush Field. “Bank” means U.S. Bank National Association, a national banking association organized and existing under the laws of the United States of America. “Custodian” means the Bank when it is performing the function of custodian relating to the Accounts as described under the Bond Resolution. “Fiscal Year” means the fiscal year of the Issuer ending on December 31 of each year. “Issuer” means Augusta, Georgia, a political subdivision of the State of Georgia, its successors and assigns. “Bond Resolution” has the meaning set forth in the recitals of this Agreement. “Person” means any individual, corporation, partnership, joint venture, association, joint stock company, trust, unincorporated organization or government or any agency or political subdivision of a government or any entity whatsoever. “Stated Maturity” when used with respect to any Bond means the date specified in the Bond as the date on which the principal of such Bond is due and payable. ARTICLE TWO APPOINTMENT OF BANK AS CUSTODIAN Section 2.01. Appointment and Acceptance. The Issuer hereby appoints the Bank to act as Custodian with respect to the Accounts, to disburse, from time to time, under the direction of the Issuer or the Augusta Aviation Commission, in accordance with the terms and provisions of this Agreement and the Bond Resolution, moneys held in trust in the Accounts. As Custodian, the Bank shall keep and maintain for and on behalf of the Issuer and the Augusta Aviation Commission, books and records as to the disposition of the Accounts and with respect to the investment of the Accounts. The Bank hereby accepts its appointment and agrees to act as Custodian. Section 2.02. Compensation. As compensation for the Bank’s services as Custodian, the Issuer and the Augusta Aviation Commission hereby agree to pay the Bank the fees and amounts set forth in the Bank’s current fee schedule then in effect for services as custodian for municipalities, which shall be supplied by the Bank to the Issuer and the Augusta Aviation Commission on or before the execution and delivery of this Agreement and thereafter on or before 90 days prior to the close of the Fiscal Year of the Issuer if there are any changes, and shall be effective upon the first day of the following Fiscal Year. 3 In addition, the Issuer and the Augusta Aviation Commission agree to reimburse the Bank, upon its request, for all reasonable and necessary out-of-pocket expenses, disbursements, and advances, including without limitation the reasonable fees, expenses, and disbursements of its agents and attorneys, made or incurred by the Bank in connection with its entrance into and its performance under this Agreement and in connection with investigating and defending itself against any claim or liability in connection with its performance hereunder. ARTICLE THREE CUSTODIAN Section 3.01. Duties of Custodian. As Custodian, the Bank, shall receive and disburse moneys on deposit in the Accounts in accordance with the Bond Resolution. Section 3.02. Receipt of Funds. The Augusta Aviation Commission hereby deposits with the Bank moneys to be used solely for the purposes of the Accounts set forth in the Bond Resolution. Section 3.03. Disbursement of Funds. The Issuer, the Augusta Aviation Commission or their designee is hereby authorized to direct the disbursement of funds by giving written authorization and direction to the Bank with respect to the Accounts, in accordance with the Bond Resolution. Section 3.04. Investment of Funds. The Augusta Aviation Commission or its designee is hereby authorized to direct the Bank in respect of the investment of funds on deposit in the Accounts. All investment earnings shall become part of the Accounts and investment losses shall be charged against the Accounts, except as specifically provided in the Bond Resolution. The Bank shall not be liable or responsible for loss in the value of any investment made pursuant to this Agreement, or for any loss, cost or penalty resulting from any sale or liquidation of the investments in the Accounts. With respect to any funds received by the Bank after ten o’clock a.m. EST, the Bank shall not be required to invest such funds or to effect any investment instruction until the next day upon which the Bank is open for business. Section 3.05. Permitted Investments. The Issuer and the Augusta Aviation Commission covenant that they shall invest moneys in the Accounts only in such investments as are authorized by State of Georgia law and by the Bond Resolution. ARTICLE FOUR THE BANK Section 4.01. Duties of Bank. The Bank undertakes to perform the duties set forth herein. No implied duties or obligations shall be read into this Agreement against the Bank. 4 Section 4.02. Reliance on Documents, Etc. (a) The Bank may conclusively rely, as to the truth of the statements and correctness of the opinions expressed therein, on certificates or opinions expressed therein, on certificates or opinions furnished to the Bank by the Issuer and the Augusta Aviation Commission. (b) The Bank shall not be liable for any error of judgment made in good faith. The Bank shall not be liable for other than its gross negligence or willful misconduct in connection with any act or omission hereunder. (c) No provision of this Agreement shall require the Bank to expend or risk its own funds or otherwise incur any financial liability for performance of any of its duties hereunder, or in the exercise of any of its rights or powers. (d) The Bank may rely, or be protected in acting or refraining from acting, upon any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, note, security or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties. (e) The Bank may consult with counsel, and the written advice or opinion of counsel shall be full authorization and protection with respect to any action taken, suffered or omitted by it hereunder in good faith and reliance thereon. (f) The Bank may exercise any of the powers hereunder and perform any duties hereunder either directly or by or through agents or attorneys and shall not be liable for the actions of such agent or attorney if appointed by it with reasonable care. Section 4.03. May Own Bonds. The Bank, in its individual or any other capacity, may become the owner or pledgee of Bonds with the same rights it would have if it were not the Custodian. Section 4.04. Money Held by Bank. The Bank shall have no duties with respect to the investment of funds deposited with it and shall be under no obligation to pay interest on any money received by it hereunder. Any moneys deposited with or otherwise held by the Bank for the purposes set forth in this Agreement and which remain unclaimed by the Issuer (which claim by the Issuer shall be made in writing) after the Bonds mature and prior to escheatment) will be escheated pursuant to the applicable state law. If funds are returned to the Issuer, the Issuer and the Bank agree that any parties entitled to the benefit of such shall thereafter look only to the Issuer for payment thereof, and that all liability of the Bank with respect to such moneys shall thereupon cease. Section 4.05. Other Transactions. The Bank may engage in or be interested in any financial or other transaction with the Issuer or the Augusta Aviation Commission. Section 4.06. Interpleader. The Issuer, the Augusta Aviation Commission and the Bank agree that the Bank may seek adjudication of any adverse claim, demand, or controversy over its person as well as funds on deposit, in 5 a court of competent jurisdiction. The Issuer, the Augusta Aviation Commission and the Bank further agree that the Bank has the right to file an action in interpleader in any court of competent jurisdiction to determine the rights of any person claiming any interest herein. Section 4.07. Indemnification. To the extent permitted by Georgia law, the Issuer shall indemnify the Bank, its officers, directors, employees and agents (“Indemnified Parties”) for, and hold them harmless against any loss, cost, claim, liability or expense arising out of or in connection with the Bank’s acceptance or administration of the Bank’s duties hereunder (except any loss, liability or expense as may be adjudged by a court of competent jurisdiction to be attributable to the Bank’s gross negligence or willful misconduct), including the cost and expense (including its counsel fees) of defending itself against any claim or liability in connection with the exercise or performance of any of its powers or duties under this Agreement. Such indemnity shall survive the termination or discharge of this Agreement or discharge of the Bonds. ARTICLE FIVE MISCELLANEOUS PROVISIONS Section 5.01. Amendment. This Agreement may be amended only by an agreement in writing signed by both of the parties hereto. Section 5.02. Assignment This Agreement may not be assigned by any party without the prior written consent of the other parties. Section 5.03. Notices. Any request, demand, authorization, direction, notice, consent, waiver or other document provided or permitted hereby to be given or furnished to the Issuer, the Augusta Aviation Commission or the Bank shall be mailed, faxed, sent pdf or delivered to the Issuer, the Augusta Aviation Commission or the Bank, respectively, at the address shown below, or such other address as may have been given by one party to the others by fifteen (15) days written notice: If to the Issuer: Augusta, Georgia 530 Greene Street Augusta, Georgia 30901 Attention: Director – Finance If to the Augusta: Augusta Aviation Commission Airport Commission: 1501 Aviation Way Augusta, Georgia 30906 Attention: Executive Director 6 If to the Bank: U.S. Bank National Association 1349 W. Peachtree Street NW Suite 1050 Atlanta, GA 30309 Attention: Corporate Trust Section 5.04. Effect of Headings. The Article and Section headings herein are for convenience of reference only and shall not affect the construction hereof. Section 5.05. Successors and Assigns. All covenants and agreements herein by the Issuer, the Augusta Aviation Commission and the Bank shall bind their successors and assigns, whether so expressed or not. Section 5.06. Severability. If any provision of this Agreement shall be determined to be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions hereof shall not in any way be affected or impaired thereby. Section 5.07. Benefits of Agreement. Nothing herein, express or implied, shall give to any Person, other than the parties hereto and their successors hereunder, any benefit or any legal or equitable right, remedy or claim hereunder. Section 5.08. Entire Agreement. This Agreement shall constitute the entire agreement between the parties hereto relative to the Bank acting as Custodian. If any provision of this Agreement is in conflict with the Bond Resolution, the terms of the Bond Resolution shall control. Section 5.09. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original and all of which shall constitute one and the same Agreement. Section 5.10. Term and Termination. This Agreement shall be effective from and after its date and until the Bank resigns; provided, however, that no such termination shall be effective until a successor has been appointed and has accepted the duties of the Custodian hereunder. The Bank may resign at any time by giving written notice thereof to the Issuer and the Augusta Aviation Commission. If the Bank shall resign, or become incapable of acting, the Issuer shall promptly appoint a successor Custodian. If an instrument of acceptance by a successor Custodian shall not have been delivered to the Bank within thirty (30) days after the Bank gives notice of resignation, the Bank may petition any court of competent jurisdiction at the expense of the Issuer for the appointment of a successor Custodian. In the event of resignation of the Bank as Custodian, upon the written request of the Issuer and upon payment of all amounts owing to the Bank hereunder the Bank shall deliver to the Issuer 7 or its designee all funds held in custody. The provisions of Section 2.02 and Section 4.07 hereof shall survive and remain in full force and effect following the termination of this Agreement. Section 5.11. Governing Law. This Agreement shall be construed in accordance with and shall be governed by the laws of the State of Georgia. Section 5.12. Documents to be Filed with Bank. At the time of the Bank’s appointment as Custodian, the Issuer shall file with the Bank the following documents: (a) a specimen Bond; (b) a copy of the opinion of bond counsel provided to the Issuer in connection with the issuance of the Bonds; (c) a copy of the Bond Resolution; and (d) such other information that the Bank may request. Section 5.13. Patriot Act Compliance. To help the government fight the funding of terrorism and money laundering activities, Federal law requires all financial institutions, including the Bank, to obtain, verify and record information that identifies each person who opens an account. For a non-individual person such as a business entity, a charity, a trust or other legal entity including the Issuer, the Bank requires documentation to verify its formation and existence as a legal entity. The Bank is also permitted to request financial statements, licenses, identification and authorization documents from individuals claiming authority to represent the Issuer or other relevant documentation. (Custodian and Depository Agreement) IN WITNESS WHEREOF, the Issuer, the Augusta Aviation Commission and the Bank have caused this agreement to be executed in their respective names by their duly authorized representatives, in two counterparts, each of which shall be deemed an original. AUGUSTA, GEORGIA By: Hardie Davis, Jr. Mayor By: Cedric Johnson Chairman, Augusta Aviation Commission (Custodian and Depository Agreement) U.S. BANK NATIONAL ASSOCIATION, as Custodian By: Authorized Representative DRAFT 8.13.2015 BOND PURCHASE AGREEMENT between AUGUSTA, GEORGIA as Issuer and RAYMOND JAMES & ASSOCIATES, INC. as Underwriter Dated: __________ relating to $[AMOUNT-A] $[AMOUNT-B] Airport General Revenue Refunding Bonds, Airport General Revenue Refunding Bonds, Series 2015A (Non-AMT) Series 2015B (AMT) DRAFT 8.13.2015 TRANSACTION PARTICIPANTS & IMPORTANT DATES Issuer: Augusta, Georgia Underwriter: Raymond James & Associates, Inc. Securities: $[--AMOUNT--] Augusta, Georgia Airport General Revenue Refunding Bonds Series 2015A (the “Series 2015A Bonds”) $[--AMOUNT--] Augusta, Georgia Airport General Revenue Refunding Bonds Series 2015A and 2015B (the “Series 2015B Bonds,” and together with the Series 2015A Bonds, where applicable, the “Series 2015 Bonds”) Acceptance Deadline: __________, 10:00 p.m. (eastern standard time). Effective Date and Time: __________, 6:00 p.m. (eastern standard time). Closing Date: ______ ___, 20__ TABLE OF CONTENTS Section Title Page Section 1. Offer to Purchase the Securities ....................................................................... 1 Section 2. Documents Comprising the Agreement ........................................................... 1 Section 3. Purchase of the Securities ................................................................................ 1 Section 4. Purchase Price .................................................................................................. 2 Section 5. Public Offering................................................................................................. 2 Section 6. Official Statement ............................................................................................ 2 Section 7. Representations and Warranties ....................................................................... 4 Section 8. Covenants of the Issuer .................................................................................... 4 Section 9. Closing ............................................................................................................. 4 Section 10. Closing Conditions........................................................................................... 5 Section 11. Termination Events .......................................................................................... 6 Section 12. Payment of Expenses ....................................................................................... 8 Section 13. Indemnification and Contribution .................................................................... 9 Section 14. Notices ........................................................................................................... 11 Section 15. Reserved ......................................................................................................... 11 Section 16. Governing Law .............................................................................................. 11 Section 17. Miscellaneous ................................................................................................ 11 Section 18. Third-Party Credit Enhancement or Support ................................................. 11 Section 19. Ratings ........................................................................................................... 11 Section 20. Closing Date................................................................................................... 12 Section 21. Issue Price Certificate .................................................................................... 12 Section 22. Accountants’ Letter ........................................................................................ 12 Section 23. Indemnification and Contribution .................................................................. 12 Section 24. Counterparts ................................................................................................... 12 Section 25. Signatures ....................................................................................................... 12 Schedule I – Terms of the Securities Schedule II – Defined Terms Schedule III – Modifications to the Agreement and Other Required State or Issuer Specific Provisions Schedule IV – Representations and Warranties Schedule V – Items to be Delivered at Closing Exhibit A Opinion of Counsel to Issuer 1 BOND PURCHASE AGREEMENT This Bond Purchase Agreement (the “Agreement”) relates to the Securities identified herein and in Schedules 1 and 2, attached hereto. By entering into this Agreement and executing this Agreement, the Issuer and the Underwriter agree to the following terms and provisions: Section 1. Offer to Purchase the Securities The Issuer and the Underwriter are entering into this Agreement to provide for the purchase and sale of the Securities identified above. The Securities are further described in Schedule I. The Underwriter hereby offers to purchase all (but not less than all) of the Securities from, and to enter into this Agreement with, the Issuer. This offer is subject to acceptance by the Issuer by the Acceptance Deadline and, if not so accepted, will be subject to withdrawal by the Underwriter by written notice delivered to the Issuer at any time prior to acceptance. The Issuer shall accept this Agreement by its execution thereof. Upon such execution, this Agreement will be binding upon the Underwriter and the Issuer. This Agreement is effective as of the Effective Date and Time. Section 2. Documents Comprising the Agreement This Agreement consists of this Agreement and the following Schedules both of which are incorporated herein and constitute part of this Agreement as if fully restated herein. The Schedules are as follows: Schedule I: Terms of the Securities Schedule II: Defined Terms Schedule III: Modifications to the Agreement and Other Required State- or Issuer- Specific Provisions Schedule IV: Issuer and Underwriter Representations Schedule V: Items to be Delivered at Closing This Agreement shall include all provisions contained in this Agreement or as modified in Schedule III. All capitalized terms used in this Agreement and not otherwise defined are used as defined in Schedule II. Section 3. Purchase of the Securities The Underwriter shall purchase from the Issuer, and the Issuer shall sell to the Underwriter, all (but not less than all) of the Securities on the Closing Date at the aggregate Purchase Price set forth below, plus accrued interest (if any). The Securities shall bear interest at 2 the rates per annum, mature on the dates, be sold to the public at the prices and be subject to optional sinking fund redemption prior to maturity and to such other terms and provisions, all as set forth in Schedule I. The Securities otherwise shall be as described in the Official Statement, the Bond Resolution and the Issuer Documents. The Underwriter’s agreement to purchase the Securities from the Issuer is made in reliance upon the Issuer’s representations, covenants and warranties and on the terms and conditions set forth in this Agreement. The Issuer acknowledges and agrees that (i) the purchase and sale of the Securities pursuant to this Agreement is an arm’s-length, commercial transaction between the Issuer and the Underwriter in which the Underwriter is acting solely as a principal and is not acting as a municipal advisor (within the meaning of Section 15B of the Exchange Act), financial advisor or fiduciary to the Issuer, (ii) the Underwriter has not assumed (individually or collectively) any advisory or fiduciary responsibility to the Issuer with respect to this Agreement, the offering of the Securities and the discussions, undertakings and procedures leading thereto (irrespective of whether the Underwriter, or any affiliate of the Underwriter, has provided other services or is currently providing other services to the Issuer on other matters), (iii) the only obligations the Underwriter has to the Issuer with respect to the transactions contemplated hereby are set forth in this Agreement, (iv) the Underwriter has financial and other interests that differ from those of the Issuer and (v) the Issuer has consulted with its own legal, accounting, tax, financial and other advisors, as applicable, to the extent it has deemed appropriate. Section 4. Purchase Price The Purchase Price of the Bonds is $__________ (representing the principal amount of the Securities, (i) $_____________ for the Series 2015A Bonds less Underwriter’s discount of $__________ and plus [minus] [net] original issue premium [discount] of $__________ and (ii) $_______ for the Series 2015B Bonds less Underwriter’s discount of $__________ and plus [minus] [net] original issue premium [discount] of $__________), plus accrued interest, if any, to the Closing Date. The Purchase Price shall be payable on the Closing Date by the Underwriter to or as directed by the Issuer by wire transfer in immediately available funds. Section 5. Public Offering The Underwriter intends to make a bona fide initial public offering of all the Securities at prices no higher than, or yields not lower than, those shown in the Official Statement. The Underwriter reserves the right to lower such initial offering prices as they deem necessary in connection with the marketing of the Securities. The Underwriter may offer and sell the Securities to certain dealers (including dealers depositing the Securities into investment trusts) and others at prices lower than the initial public offering price or prices set forth in the Official Statement. The Underwriter also reserves the right to: (i) over-allot or effect transactions which stabilize or maintain the market price of the Securities at levels above those that might otherwise prevail in the open market and (ii) discontinue such stabilizing, if commenced, at any time without prior notice. 3 Section 6. Official Statement The Issuer hereby consents to and ratifies the use and distribution by the Underwriter of the Preliminary Official Statement in connection with the public offering of the Securities by the Underwriter, and further confirms the authority of the Underwriter to use, and consents to the use of, the final Official Statement with respect to the Securities in connection with the public offering and sale of the Securities. The Issuer hereby represents and warrants that the Preliminary Official Statement previously furnished to the Underwriter was “deemed final” by the Issuer as of its date for purposes of Rule 15c2-12, except for permitted omissions. In accordance with Section 6(a) of this Agreement, the Issuer agrees, at its cost, to provide to the Underwriter not more than ten (10) copies of the Official Statement. (a) The Issuer shall provide, or cause to be provided, to the Underwriter within seven business days after the date of this Agreement (or within such shorter period as may be agreed by the Issuer and the Underwriter or required by applicable rule), the number of executed counterparts of the Official Statement and conformed copies of a final Official Statement as specified in this Agreement, but in any event in sufficient quantity to permit the Underwriter to comply with Rule 15c2-12 and other applicable rules of the SEC and the MSRB. (b) The Issuer authorizes the Underwriter to file, to the extent required by applicable SEC or MSRB rule, and the Underwriter agrees to file or cause to be filed, the Official Statement with (i) the MSRB or its designee (including submission to the MSRB’s Electronic Municipal Market Access system (“EMMA”)) or (ii) other repositories approved from time to time by the SEC (either in addition to or in lieu of the filings referred to above). If an amended Official Statement is prepared in accordance with Section 6(d) during the “primary offering disclosure period,” and if required by applicable SEC or MSRB rule, the Underwriter also shall make the required submission of the amended Official Statement to EMMA. (c) The Preliminary Official Statement and/or the Official Statement may be delivered in printed and/or electronic form to the extent permitted by applicable rules of the MSRB and as may be agreed by the Issuer and the Underwriter. (d) During the period ending on the 25th day after the End of the Underwriting Period (or such other period as may be agreed to by the Issuer and the Underwriter), the Issuer (i) shall not supplement or amend the Official Statement or cause the Official Statement to be supplemented or amended without the prior written consent of the Underwriter and (ii) shall notify the Underwriter promptly if any event shall occur, or information comes to the attention of the Issuer, that is reasonably likely to cause the Official Statement (whether or not previously supplemented or amended) to contain any untrue statement of a material fact or to omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. If, in the opinion of the Underwriter, such event requires the preparation and distribution of a supplement or amendment to the Official Statement, the Issuer shall prepare and furnish to the Underwriter, at the Issuer’s expense, such number of copies of the supplement or amendment to the Official Statement, in form and substance mutually 4 agreed upon by the Issuer and the Underwriter, as the Underwriter may reasonably request. If such notification shall be given subsequent to the Closing Date, the Issuer also shall furnish, or cause to be furnished, such additional legal opinions, certificates, instruments and other documents as the Underwriter may reasonably deem necessary to evidence the truth and accuracy of any such supplement or amendment to the Official Statement. (e) For purposes of this Agreement: (i) the “End of the Underwriting Period” is used as defined in Rule 15c2-12 and shall occur on the later of (A) the Closing Date or (B) when the Underwriter no longer retains an unsold balance of the Securities; unless otherwise advised in writing by the Underwriter on or prior to the Closing Date, or otherwise agreed to by the Issuer and the Underwriter, the Issuer may assume that the End of the Underwriting Period is the Closing Date; and (ii) the “primary offering disclosure period” is used as defined in MSRB Rule G-32 and shall end on the 25th day after the Closing. Section 7. Representations and Warranties The Issuer and the Underwriter make the respective representations and warranties to the other as set forth in Schedule IV of this Agreement. Section 8. Covenants of the Issuer The Issuer hereby covenants with the Underwriter that: (a) Prior to the Closing Date, except as otherwise contemplated by the Official Statement, the Issuer shall not create, assume or guarantee any indebtedness payable from, or pledge or otherwise encumber, the Trust Estate or other assets, properties, funds or interests that will be pledged as security or be available as a source of payment for the Securities pursuant to the Bond Resolution and the Issuer Documents. (b) The Issuer shall cooperate with the Underwriter in the qualification of the Securities for offering and sale and the determination of their eligibility for investment under the laws of such jurisdictions, to the extent applicable, as the Underwriter may request; provided that the Issuer shall not be required to qualify as a foreign corporation in, or submit to the general jurisdiction of, any other state or to file any general or special consent to service of process under the laws of any jurisdiction. (c) Unless the Securities are being issued as taxable Securities, the Issuer shall not knowingly take or omit to take any action that, under existing law, may adversely affect the exclusion from gross income for federal income tax purposes, or the exemption from any applicable state tax, of the interest on the Securities. 5 Section 9. Closing (a) At the Closing, the Issuer shall deliver or cause to be delivered the Securities to DTC or to the Paying Agent on behalf of the Underwriter, as further described in subsection (b) below. The Securities shall be delivered in definitive form, duly executed by the Issuer and authenticated in the manner set forth in the Bond Resolution or the Issuer Documents, together with the other documents identified in Schedule V of this Agreement. Subject to satisfaction of the conditions contained in this Agreement, the Underwriter will accept delivery of the Securities, as described above, and pay the Purchase Price, plus accrued interest (if any) on the Securities from their dated date to, but not including, the Closing Date, in immediately available funds, payable to the order of the Issuer, as described above, or as otherwise directed by the Issuer. If the Underwriter is to be paid an underwriting commission, as set forth in this Agreement, the Issuer shall pay the underwriting commission to the Underwriter in immediately available funds on the Closing Date. (b) Delivery of the definitive Securities shall be made through the facilities of DTC’s book-entry-only system. The Securities will be delivered as fully-registered bonds, bearing CUSIP numbers, with a single bond for each maturity of each series of the Securities (or, if so provided in Schedule I of this Agreement, for each separate interest rate within a maturity), and registered in the name of Cede & Co., as nominee of DTC, which will act as securities depository for the Securities. Unless otherwise agreed by the Underwriter, the Securities will be delivered under DTC’s FAST delivery system. Section 10. Closing Conditions The Underwriter has entered into this Agreement in reliance upon the representations, warranties and agreements of the Issuer contained herein and upon the accuracy of the statements to be contained in the documents and instruments to be delivered at the Closing. Accordingly, the Underwriter’s obligations under this Agreement to purchase, accept delivery of and pay for the Securities are subject to the performance by the Issuer of its obligations required to be performed under this Agreement at or prior to the Closing, and to the additional conditions precedent set forth below and in Schedule V of this Agreement. (a) At the time of the Closing, the representations and warranties of the Issuer contained in this Agreement shall be true, complete and correct in all material respects as if made on and as of the Closing Date; the Issuer shall have complied with all agreements and satisfied all the conditions on its part to be performed at or prior to the Closing; the Securities shall have been duly executed and delivered and authenticated; the Official Statement shall have been executed and delivered by the Issuer at or prior to the Closing in sufficient time to permit the Underwriter to comply with its obligations under Rule 15c2-12; the Issuer Documents and all other financing or operative documents required in connection with the issuance of the Securities shall have been duly executed and delivered by the appropriate parties thereto; the Bond Resolution, the Issuer Documents and such other financing or operative documents shall be in full force and effect and shall not have been amended, modified or supplemented, except as may have been agreed to in writing by the Underwriter; if the Securities are to be supported by a Policy or other 6 Support Facility, the Policy or Support Facility shall have been duly executed, issued and delivered; the proceeds of the sale of the Securities shall have been paid to the Issuer or its designee for deposit for use as described in the Official Statement, the Bond Resolution and the Issuer Documents; and the Issuer shall have adopted and there shall be in full force and effect such resolutions as, in the opinion of Bond Counsel, shall be necessary in connection with the transactions contemplated by this Agreement and as described in the Official Statement. (b) The Underwriter shall receive on the Closing Date, in form and substance satisfactory to Bond Counsel and to the Underwriter, each item specified in Schedule V of this Agreement, unless waived by the Underwriter. Section 11. Termination Events The Underwriter shall have the right to cancel its obligation to purchase the Securities and to terminate this Agreement by written notice to the Issuer if, between the Effective Date to and including the Closing Date, in the Underwriter’s sole and reasonable judgment any of the following events (except as otherwise set forth in Schedule III of this Agreement) shall occur (each a “Termination Event”): (a) the market price or marketability of the Securities, or the ability of the Underwriter to enforce contracts for the sale of the Securities, shall be materially adversely affected by any of the following events: (i) legislation shall have been enacted by the Congress of the United States or the legislature of the State or shall have been favorably reported out of committee of either body or be pending in committee of either body, or shall have been recommended to the Congress for passage by the President of the United States or a member of the President’s Cabinet, or a decision shall have been rendered by a court of the United States or the State or the Tax Court of the United States, or a ruling, resolution, regulation or temporary regulation, release or announcement shall have been made or shall have been proposed to be made by the Treasury Department of the United States or the Internal Revenue Service, or other federal or state authority with appropriate jurisdiction, with respect to federal or state taxation upon interest received on obligations of the general character of the Securities; provided that, this paragraph (a)(i) shall not apply if the Securities are being issued as taxable Securities; or (ii) there shall have occurred (1) an outbreak or escalation of hostilities or the declaration by the United States of a national emergency or war, (2) any other calamity or crisis in the financial markets of the United States or elsewhere, (3) the sovereign debt rating of the United States is downgraded by any major credit rating agency or a payment default occurs on United States Treasury obligations, or (4) a default with respect to the debt obligations of, or the institution of proceedings under any federal bankruptcy laws by or against, any state of the United States or any city, county or other political subdivision located in the United States having a population of over 500,000; or 7 (iii) a general suspension of trading on the New York Stock Exchange or other major exchange shall be in force, or minimum or maximum prices for trading shall have been fixed and be in force, or maximum ranges for prices for securities shall have been required and be in force on any such exchange, whether by virtue of determination by that exchange or by order of the SEC or any other governmental authority having jurisdiction; or (iv) legislation shall have been enacted by the Congress of the United States or shall have been favorably reported out of committee or be pending in committee, or shall have been recommended to the Congress for passage by the President of the United States or a member of the President’s Cabinet, or a decision by a court of the United States shall be rendered, or a ruling, regulation, proposed regulation or statement by or on behalf of the SEC or other governmental agency having jurisdiction of the subject matter shall be made, to the effect that any obligations of the general character of the Securities, the Bond Resolution or the Issuer Documents, or any comparable securities of the Issuer, are not exempt from the registration, qualification or other requirements of the Securities Act or the Trust Indenture Act or otherwise, or would be in violation of any provision of the federal securities laws; or (v) except as disclosed in or contemplated by the Official Statement, any material adverse change in the affairs of the Issuer shall have occurred; or (vi) any rating on: (1) securities of the Issuer that are secured by a pledge or application of the Trust Estate on a parity with the Securities; or (2) if the Securities (or any portion thereof) are insured by a Policy or supported by a Support Facility, on the Bond Insurer or the Support Facility Provider is reduced or withdrawn or placed on credit watch with negative outlook by any major credit rating agency; or (iii) there shall have occurred or any notice shall have been given of any intended downgrading, suspension, withdrawal or negative change in credit watch status by any national rating service to any of the Issuer’s obligations; or (iv) any disruptive events, occurrences or conditions in the securities or debt markets; or (b) any event or circumstance shall exist that either makes untrue or incorrect in any material respect any statement or information in the Official Statement (other than any statement provided by the Underwriter) or is not reflected in the Official Statement but should be reflected therein in order to make the statements therein, in the light of the circumstances under which they were made, not misleading and, in either such event, the Issuer refuses to permit the Official Statement to be supplemented to supply such statement or information, or the effect of the Official Statement as so supplemented is to 8 materially adversely affect the market price or marketability of the Securities or the ability of the Underwriter to enforce contracts for the sale of the Securities; or (c) a general banking moratorium shall have been declared by federal or State authorities having jurisdiction and be in force; or (d) a material disruption in securities settlement, payment or clearance services affecting the Securities shall have occurred; or (e) any new restriction on transactions in securities materially affecting the market for securities (including the imposition of any limitation on interest rates) or the extension of credit by, or a charge to the net capital requirements of, Underwriter shall have been established by the New York Stock Exchange, the SEC, any other federal or State agency or the Congress of the United States, or by Executive Order; or (f) a decision by a court of the United States shall be rendered, or a stop order, release, regulation or no-action letter by or on behalf of the SEC or any other governmental agency having jurisdiction of the subject matter shall have been issued or made, to the effect that the issuance, offering or sale of the Securities, including the underlying obligations as contemplated by this Agreement or by the Official Statement, or any document relating to the issuance, offering or sale of the Securities, is or would be in violation of any provision of the federal securities laws at the Closing Date, including the Securities Act, the Exchange Act and the Trust Indenture Act. Upon the occurrence of a Termination Event and the termination of this Agreement by the Underwriter, all obligations of the Issuer and the Underwriter under this Agreement shall terminate, without further liability, except that the Issuer and the Underwriter shall pay their respective expenses as set forth in Section 12. Section 12. Payment of Expenses Except as otherwise set forth in this Agreement, the Underwriter shall be under no obligation to pay, and the Issuer shall pay from available funds, all expenses that are incidental to the performance of the Issuer’s obligations under this Agreement, including but not limited to: all expenses in connection with costs of qualifying the Securities for sale in the various states chosen by the Underwriter, all advertising expenses in connection with the public offering of the Securities, the printing of the Preliminary Official Statement, the Official Statement and any amendment or supplement to either; all expenses in connection with the printing, issuance and delivery of the Securities; the fees and expenses of Bond Counsel, Issuer’s Special Counsel, and Disclosure Counsel, Accountants, any verification consultant and all other consultants; the fees and disbursements of the Paying Agent and any Escrow Agent, and their respective counsel; all expenses in connection with obtaining a rating or ratings for the Securities; all expenses of the Issuer in connection with the preparation, printing, execution and delivery, and any recording or filing, of the Bond Resolution, any Issuer Document or any other instrument; the Issuer’s administrative fees; all fees and expenses in connection with any interest rate swap agreement and related transactions; and all other expenses and costs of the Issuer incident to its obligations in connection with the authorization, issuance, sale and distribution of the Securities and all other 9 expenses incurred by the Underwriter in connection with the public offering and distribution of the Securities. Unless the Issuer and the Underwriter otherwise agree, the Issuer shall pay for all incidental costs (including, but not limited to, transportation, lodging, meals and entertainment of Issuer personnel) incurred by or on behalf of the Issuer in connection with the marketing, issuance and delivery of the Securities. Section 13. Indemnification and Contribution (a) The Issuer agrees to indemnify and hold harmless the Underwriter, and each person, if any, who controls (within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act) the Underwriter, and its directors, officers, agents and employees, against any and all losses, claims, damages, liabilities and expenses to which the Underwriter may become subject, insofar as such losses, claims, damages, liabilities or expenses (or actions in respect thereof), arise out of or are based upon (i) a claim in connection with the public offering of the Securities to the effect that the Securities or any related security are required to be registered under the Securities Act or any indenture is required to be qualified under the Trust Indenture Act, or (ii) any statement or information in the Preliminary Official Statement or in the Official Statement that is or is alleged to be untrue or incorrect in any material respect, or any omission or alleged omission of any statement or information in the Preliminary Official Statement or the Official Statement (other than in the Excluded Sections) which is necessary in order to make the statements therein not misleading. The foregoing indemnity agreement shall be in addition to any liability that the Issuer otherwise may have. (b) The Underwriter will indemnify and hold harmless the Issuer, each of its members, directors, officers and employees, and each person who controls the Issuer within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act, to the same extent as the foregoing indemnity from the Issuer to the Underwriter, but only with reference to the statements under the caption “Underwriting” (or similar caption) in the Preliminary Official Statement and the Official Statement. (c) In case any claim shall be made or action brought against an indemnified party for which indemnity may be sought against any indemnifying party, as provided above, the indemnified party shall promptly notify the indemnifying party in writing setting forth the particulars of such claim or action; but the omission to so notify the indemnifying party (i) shall not relieve it from liability under paragraph (a) or (b) above unless and to the extent it did not otherwise learn of such action and such failure results in the forfeiture by the indemnifying party of substantial rights and defenses and (ii) shall not relieve it from any liability which it may have to any indemnified party otherwise than under paragraph (a) or (b) above. The indemnifying party shall assume the defense thereof, including the retention of counsel acceptable to such indemnified party and the payment of all expenses and shall have the right to negotiate and consent to settlement. An indemnified party shall have the right to retain separate counsel in any such action and to participate in the defense thereof but the fees and expenses of such counsel shall be at the expense of such indemnified party unless the employment of such counsel has been specifically authorized by the indemnifying party or the indemnifying party shall not have employed counsel reasonably acceptable to the indemnified party to have charge 10 of the defense of such action or proceeding or the indemnified party shall have reasonably concluded that there may be defenses available to it which are different from or additional to those available to the indemnifying party (in which case the indemnifying party shall not have the right to direct the defense of such action or proceeding on behalf of the indemnified party), in any of which events, such legal or other expenses shall be borne by the indemnifying party. No party shall be liable for any settlement of any action effected without its consent, but if settled with the consent of the indemnifying party or if there is a final judgment for the plaintiff in any action with or without written consent of the indemnifying party, the indemnifying party agrees to indemnify and hold harmless the indemnified parties to the extent of the indemnities set forth above from and against any loss or liability by reason of such settlement or judgment. Any such settlement must include an unconditional release of each indemnified party from all liability arising out of such action. (d) If the indemnification provided for above is unenforceable, or is unavailable to an indemnifying party in respect of any losses, claims, damages or liabilities (or actions in respect thereof) of the type subject to indemnification herein, then the indemnifying party shall, in lieu of indemnifying such person, contribute to the amount paid or payable by such person as a result of such losses, claims, damages, or liabilities (or actions in respect thereof). In the case of the Issuer and the Underwriter, contribution shall be in such proportion as is appropriate to reflect the relative benefits received by the Issuer, on the one hand, and the Underwriter, on the other, from the sale of the Securities. If, however, the allocation provided by the immediately preceding sentence is not permitted by applicable law, then the indemnifying party shall contribute to such amount paid or payable by such indemnified party in such proportion as is appropriate to reflect not only such relative benefits but also the relative fault of the Issuer, on the one hand, and the Underwriter, on the other, in connection with the statements or omissions which resulted in such losses, claims, damages or liabilities (or action in respect thereof), as well as any other relevant equitable considerations. The relative benefits received by the Issuer on the one hand and the Underwriter on the other shall be deemed to be in the same proportion as the total net proceeds of sale of the Securities paid to the Issuer pursuant to this Agreement (before deducting expenses) bear to the underwriting discount or commission received by the Underwriter. The relative fault shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Issuer or the Underwriter and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such untrue statement or omission. The Issuer and the Underwriter agree that it would not be just and equitable if contribution pursuant to this paragraph were determined by pro rata allocation or by any other method of allocation which does not take account of the equitable considerations referred to above in this paragraph. The amount paid or payable by any person as a result of the losses, claims, damages or liabilities (or actions in respect thereof) referred to above shall be deemed to include any legal or other expenses reasonably incurred by such person in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this paragraph, however, the Underwriter shall not be required to contribute an amount in excess of the amount of the underwriting discount or commission applicable to the 11 purchase of the Securities. No person guilty of fraudulent misrepresentation (within the meaning of Section 10(b) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. Section 14. Notices All notices (“Notices”) provided for in this Agreement shall be in writing delivered to the applicable Notice Address set forth in Schedule II (or at such other address as may have been designated by written Notice) and may be given by personal or courier delivery, registered or certified mail, facsimile transmission or electronic communication, provided that delivery by facsimile transmission or electronic communication must be confirmed by the sender. Section 15. Reserved Section 16. Governing Law This Agreement shall be governed by the laws of the State. Section 17. Miscellaneous This Agreement is made solely for the benefit of the signatories hereto (including the successors or assigns of the Underwriter) and no other person shall acquire or have any right hereunder or by virtue hereof. The Issuer may not assign this Agreement. The term “successor” shall not include any holder of any Securities merely by virtue of such holding. All representations, warranties, agreements and indemnities contained in this Agreement shall remain operative and in full force and effect, regardless of any investigation made by or on behalf of the Underwriter, and shall survive the delivery of and payment for the Securities and any termination of this Agreement. Section headings have been included in this Agreement as a matter of convenience of reference only and are not to be used in the interpretation of any provisions of this Agreement. If any provision of this Agreement is, or is held or deemed to be, invalid, inoperative or unenforceable as applied in any particular case in any jurisdiction or jurisdictions because it conflicts with any provisions of any constitution, statute, rule of public policy or for any other reason, such circumstances shall not make the provision in question invalid, inoperative or unenforceable in any other case or circumstance, or make any other provision or provisions of this Agreement invalid, inoperative or unenforceable to any extent whatever. Section 18. Third-Party Credit Enhancement or Support No Policy or Support Facility will be provided with respect to the Securities. Section 19. Ratings The following ratings on the Securities shall be in effect on the Closing Date: Moody’s: __________ S&P: __________ Fitch: None 12 Section 20. Closing Date The delivery of and payment for the Securities shall be the “Closing” for the Securities and shall occur at or prior to 1:00 p.m., New York City time, on the Closing Date, or at such other time or on such other date as may be mutually agreed by the Underwriter and the Issuer. The location of the Closing shall be the offices of Bond Counsel, or at such other location as may be mutually agreed by the Underwriter and the Issuer. Section 21. Issue Price Certificate The Underwriter shall execute and deliver on the Closing Date an issue price or similar certificate, in form and substance reasonably satisfactory to the Issuer, Bond Counsel and the Underwriter substantially in the form attached as an exhibit to the Issuer’s Tax and Non- Arbitrage Certificate. Section 22. Accountants’ Letter No Accountants’ letters will be delivered in connection with issuance of the Securities. Section 23. Indemnification and Contribution THE INDEMNIFICATION AND CONTRIBUTION PROVISIONS CONTAINED IN SECTION 13 OF THIS AGREEMENT SHALL APPLY TO THE ISSUANCE AND SALE OF THE SECURITIES AND SHALL BE PART OF THIS AGREEMENT. Section 24. Counterparts This Agreement may be executed in one or more counterparts with the same force and effect as if all signatures appeared on a single instrument. Section 25. Signatures Upon execution by the Issuer and the Underwriter, this Agreement shall be binding upon the Issuer and the Underwriter as of the Effective Date and Time. [Signature Page Follows] [Signature Page to Bond Purchase Agreement – Issuer] ACCEPTED AND AGREED: ISSUER: AUGUSTA, GEORGIA By: Mayor, Augusta-Richmond County Commission [S E A L] [Signature Page to Bond Purchase Agreement - Underwriter] UNDERWRITER: RAYMOND JAMES & ASSOCIATES, INC. By: Authorized Representative Schedule I - Page 1 SCHEDULE I. TERMS OF THE SECURITIES (ATTACHED) Schedule II - Page 1 SCHEDULE II. DEFINED TERMS All capitalized terms used in this Agreement and not otherwise defined are used as defined in Schedule II below or in the Bond Purchase Agreement: ACCEPTANCE DEADLINE: THE DATE SET FORTH ON THE FIRST PAGE OF THIS AGREEMENT, BEING THE DATE AND TIME BY WHICH THE ISSUER MUST ACCEPT THIS AGREEMENT. Accountants: Mauldin & Jenkins LLC. Agreement: This Bond Purchase Agreement, dated the Effective Date, including Schedules I, II, III, IV and V attached hereto. Bond Counsel: Murray Barnes Finister LLP. Bond Resolution: The Master Bond Resolution adopted by the Aviation Commission on __________, 2015 and by the Augusta-Richmond County Commission on __________, 2015, as ratified, reaffirmed, supplemented, and amended by a First Supplemental Bond Resolution adopted by the Aviation Commission on __________, 2015 and by the Augusta-Richmond County Commission on __________, 2015 authorizing the issuance of the Securities, as amended and supplemented to the Closing Date. Closing Date: The date set forth on the first page of this Agreement, being the date of the issuance and delivery of the Securities. Continuing Disclosure Undertaking: The continuing disclosure undertaking or agreement, if any, entered into by the Issuer with respect to the Securities in accordance with Rule 15c2-12 (which may be a separate document or may be included in the Bond Resolution or another Issuer Document). Creditors’ Rights Laws: Limitations on enforceability as may result from bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting creditors’ rights generally from time to time in effect and from the application of general principles of equity and from public policy limitations on the exercise of any rights to indemnification and contribution. Disclosure Counsel: Dentons US LLP. DTC: The Depository Trust Company. Effective Date and Time: The date and time that this Agreement is effective, as set forth on the first page of the Bond Purchase Agreement. End of the Underwriting Period: The later of (A) the Closing Date or (B) when the Underwriter no longer retains an unsold balance of the Securities. See Section 6(e)(i) of this Agreement. Schedule II - Page 2 Exchange Act: The Securities Exchange Act of 1934, as amended. Excluded Sections: For purposes of the representations and warranties of the Issuer set forth in Schedule IV, the indemnification provisions set forth in Section 13 of this Agreement the opinion of Issuer’s Special Counsel set forth in Schedule V, the “Excluded Sections” of the Preliminary Official Statement and the Official Statement shall be: (i) the section describing DTC and its book-entry-only procedures and (ii) the subsection captioned “Underwriting.” Issuer: The Issuer of the Securities, identified on the first page of the Bond Purchase Agreement. Issuer Documents: All financing documents to which the Issuer is a party relating to the issuance of and security for the Securities, as such documents are amended and supplemented to the Closing Date, including, but not limited to: (i) this Agreement, (ii) any Continuing Disclosure Undertaking, and (iii) other applicable financing or operative documents to which the Issuer is a party, as such documents are amended and supplemented to the Closing Date. Issuer’s Special Counsel: Shepard, Plunkett, Hamilton & Boudreaux, LLP. MSRB: Municipal Securities Rulemaking Board. Notice Address: Issuer: 530 Greene Street, Augusta, Georgia 30901 Underwriter: 3050 Peachtree Road NW, Suite 702, Atlanta, Georgia 30305 All Notices required to be delivered under this Agreement shall be given as provided in Section 14 of the Bond Purchase Agreement. Official Statement: Official Statement dated the Effective Date relating to the Securities, together with all appendices or exhibits, any materials incorporated by reference therein and any amendments or supplements thereto. Paying Agent: U.S. Bank National Association, acting as bond registrar and paying agent for the Series 2015 Bonds. Preliminary Official Statement: Preliminary Official Statement dated August __, 2015, relating to the Securities, together with all appendices or exhibits, any materials incorporated by reference therein and any amendments or supplements thereto. Schedule II - Page 3 Purchase Price: The amount specified in this Bond Purchase Agreement as the Purchase Price to be paid by the Underwriter at the Closing for the purchase of the Securities on the Closing Date. Rule 15c2-12: Rule 15c2-12 promulgated by the SEC under the Exchange Act. SEC: Securities and Exchange Commission of the United States. Securities: The Securities identified on the first page of this Bond Purchase Agreement, as more specifically described in Schedule I. Series 2015A Bonds: Airport General Revenue Refunding Bonds, Series 2015A (Non- AMT). Series 2015B Bonds: Airport General Revenue Refunding Bonds, Series 2015B (AMT). Series 2015 Bonds: Collectively, the Series 2015A Bonds and the Series 2015B Bonds. Securities Act: The Securities Act of 1933, as amended. State: The State of Georgia. Trust Estate: The taxes, revenues and/or other funds pledged or otherwise identified by the Issuer as security or the source of payment for the Securities as set forth in the Issuer Documents. Trust Indenture Act: Trust Indenture Act of 1939, as amended. Underwriter: Raymond James & Associates, Inc. Schedule III - Page 1 SCHEDULE III. MODIFICATIONS TO THE AGREEMENT AND OTHER REQUIRED STATE- OR ISSUER-SPECIFIC PROVISIONS Each of the modifications and/or supplemental provisions set forth below or attached to this Schedule III shall be incorporated in and constitute part of this Agreement as if fully restated therein: [NONE] Schedule IV - Page 1 SCHEDULE IV. REPRESENTATIONS AND WARRANTIES A. Representations and Warranties of the Issuer. The Issuer hereby agrees with, and makes the following representations and warranties to, the Underwriter, as of the date hereof and as of the Closing Date, which representations and warranties shall survive the Closing: (a) The Issuer is duly created and existing under the constitution and laws of the State and has full legal right, power and authority under the constitution and laws of the State, to adopt the Bond Resolution, to execute and deliver the Issuer Documents and the Official Statement, to issue, sell and deliver the Securities as provided herein, and to carry out and to consummate the transactions contemplated by the Bond Resolution, the Issuer Documents and the Official Statement. (b) By all necessary official action of the Issuer prior to or concurrently with the acceptance hereof, the Issuer has duly authorized and approved (i) the distribution of the Preliminary Official Statement and the execution, delivery and distribution of the Official Statement for use by the Underwriter in connection with the public offering of the Securities, (ii) the issuance and sale of the Securities upon the terms set forth herein and as contemplated by the Bond Resolution, the Issuer Documents and the Official Statement and (iii) the execution and delivery of, and the performance by the Issuer of the obligations on its part contained in, the Securities, the Bond Resolution and the Issuer Documents. (c) The Securities will be issued in conformity with and entitled to the benefit and security of the Bond Resolution and the Issuer Documents, including the pledge or application thereunder of the Trust Estate. (d) This Agreement constitutes a legal, valid and binding obligation of the Issuer enforceable in accordance with its terms; the other Issuer Documents, when duly executed and delivered, will constitute the legal, valid and binding obligations of the Issuer enforceable in accordance with their respective terms; and the Securities, when issued, authenticated and delivered in accordance with the Issuer Documents and sold to the Underwriter as provided herein, will be the legal, valid and binding obligations of the Issuer enforceable in accordance with their terms; in all cases, except as to the enforceability of this Agreement, the other Issuer Documents and the Securities may be limited by application of Creditors’ Rights Laws. (e) The Issuer is not in breach of or default in any material respect under (if applicable) its charter documents, its articles of incorporation or its bylaws or under any applicable constitutional provision, law or administrative regulation of the State or the United States or any applicable judgment or decree or any loan agreement, indenture, bond, note, resolution, agreement or other instrument to which the Issuer is a party or to which the Issuer is or any of its property or assets are otherwise subject, and no event has occurred and is continuing which constitutes or with the passage of time or the giving of Schedule IV - Page 2 notice, or both, would constitute a material default or event of default by the Issuer under any of the foregoing. (f) The adoption, execution and delivery of the Securities, the Bond Resolution and the Issuer Documents, and compliance with the provisions on the Issuer’s part contained therein, will not conflict with or constitute a breach of or default under any constitutional provision, law, administrative regulation, judgment, decree, loan agreement, indenture, bond, note, resolution, agreement or other instrument to which the Issuer is a party or to which the Issuer or any of its property or assets are otherwise subject, and such adoption, execution, delivery or compliance will not result in the creation or imposition of any lien, charge or other security interest or encumbrance of any nature upon the Trust Estate or the property or assets, if any, of the Issuer to be pledged to secure the Securities or under the terms of any such law, regulation or instrument, except as provided by the Securities, the Bond Resolution and the Issuer Documents. (g) All authorizations, approvals, consents and orders of any governmental authority, legislative body, board, agency or commission having jurisdiction which are required for the due authorization of, which would constitute a condition precedent to, or the absence of which would materially adversely affect, the issuance of the Securities or the due performance by the Issuer of its obligations under the Bond Resolution, the Issuer Documents and the Securities have been duly obtained or will be obtained prior to the Closing, except for: (i) such authorizations, approvals, consents and orders (if any) as may be required under the Blue Sky or securities laws of any jurisdiction in connection with the offering and sale of the Securities and (ii) authorizations, approvals, consents and orders that are required to be obtained or renewed periodically, such as budgets, licenses and permits. (h) The Preliminary Official Statement as of its date did not, and the Official Statement as of its date does not and as of the Closing Date will not, contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided that, the Issuer makes no statement as to the Excluded Sections of the Preliminary Official Statement or the Official Statement. (i) The financial statements of the Issuer contained in the Preliminary Official Statement and the Official Statement fairly present the financial position and results of operations of the Issuer as of the dates and for the periods therein set forth in accordance with generally accepted accounting principles consistently applied, and, since the date thereof, there has been no material adverse change in the financial position or results of operations of the Issuer. (j) There is no action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court, agency, public board or body, pending or, to the knowledge of the Issuer, threatened against the Issuer: (i) affecting the existence of the Issuer or the titles of its officers to their respective offices, (ii) seeking to prohibit, restrain or enjoin the issuance, sale or delivery of the Securities or the pledge or collection by the Issuer of the Trust Estate or the making of any other required deposits Schedule IV - Page 3 with respect to the Securities, (iii) in any way contesting or affecting the validity or enforceability of, or the power or authority of the Issuer to issue, adopt or to enter into (as applicable), the Securities, the Bond Resolution or the Issuer Documents, (iv) contesting in any way the completeness or accuracy of the Preliminary Official Statement or the Official Statement, or any amendment or supplement thereto, (v) except as disclosed in the Official Statement, wherein an unfavorable decision, ruling or finding would materially adversely affect the financial position or condition of the Issuer or would result in any material adverse change in the ability of the Issuer to pledge or apply the Trust Estate or to pay debt service on the Securities, or (vi) contesting the status of the interest on the Series 2015 Bonds as excludable from gross income for federal income tax purposes or as exempt from any applicable state tax, in each case as described in the Official Statement. (k) The Issuer has received all licenses, permits or other regulatory approvals required (if any) for the pledge, collection and/or application by the Issuer of the Trust Estate and the Issuer is not in material default, and no event has occurred which would constitute or result in a material default, under any such licenses, permits or approvals. (l) The Issuer has entered or will enter into the Continuing Disclosure Undertaking and, unless otherwise described in the Official Statement or set forth below, the Issuer has not failed during the previous five years to comply in all material respects with any previous undertakings in a written continuing disclosure contract or agreement under Rule 15c2-12. (m) The Bond Resolution, the Issuer Documents and the Securities conform to the description thereof contained in the Official Statement. (n) The Issuer has the legal authority to apply proceeds of the Securities for the purposes contemplated by the Bond Resolution and the Issuer Documents, including for the payment or reimbursement of incidental expenses in connection with the marketing, issuance and delivery of the Securities to the extent required by this Agreement and in compliance with applicable law. (o) Any certificate signed by an authorized officer of the Issuer and delivered to the Underwriter shall be deemed a representation and warranty of the Issuer to the Underwriter as to the statements made therein. B. Representations and Warranties of the Underwriter. The Underwriter hereby agrees with, and make the following representations and warranties to, the Issuer, as of the date hereof and as of the Closing Date, which representations and warranties shall survive the Closing: (a) The Underwriter is an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization. (b) This Agreement has been duly authorized, executed and delivered by the Underwriter and, assuming the due authorization, execution and delivery by the Issuer, is Schedule IV - Page 4 the legal, valid and binding obligation of the Underwriter enforceable in accordance with its terms, except as the enforceability of this Agreement may be limited by application of Creditors’ Rights Laws. (c) The Underwriter represents that it is licensed by and registered with the Financial Industry Regulatory Authority as a broker-dealer and the MSRB as a municipal securities dealer. Schedule V - Page 1 SCHEDULE V. ITEMS TO BE DELIVERED AT CLOSING The Underwriter shall receive on the Closing Date, in form and substance satisfactory to Bond Counsel and to the Underwriter, each item specified below, unless waived by the Underwriter: (i) The approving opinion of Bond Counsel, addressed to the Underwriter (or addressed to the Issuer with a reliance letter addressed to the Underwriter), dated the Closing Date, and in substantially the form included as an appendix to the Official Statement. (ii) The opinion of Issuer’s Special Counsel addressed to the Underwriter and the Issuer, dated the Closing Date, and in substantially the form attached hereto and marked Exhibit A. (iii) The opinion of Disclosure Counsel, addressed to the Underwriter, dated the Closing Date, to the effect that: (A) the Securities are exempt from registration under the Securities Act and the Bond Resolution and any related trust indenture are exempt from qualification under the Trust Indenture Act and (B) the Continuing Disclosure Undertaking meets the requirements of Rule 15c2-12. In addition, such counsel shall state in its letter containing the foregoing opinion or in a separate letter addressed to the Underwriter that, without having undertaken to determine independently, or to assume responsibility for, the accuracy, completeness or fairness thereof, and based solely on their participation in meetings and telephone conferences at which representatives of the Issuer, Bond Counsel and the Underwriter were at various times present, nothing has come to the attention of such counsel that would lead them to believe that the information and statements in the Official Statement, as of its date and as of the date of such letter, contained or contain any untrue statement of a material fact or omitted or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided that, no view need be expressed as to the financial statements of the Issuer, any other financial, forecast, technical or statistical data, and any information in the Official Statement respecting the Bond Insurer, the Support Facility Provider or DTC. (iv) A certificate dated the Closing Date of an authorized officer of the Issuer to the effect that: (A) the representations and warranties of the Issuer contained in this Agreement are true and correct in all material respects on and as of the Closing Date with the same effect as if made on the Closing Date; (B) the Issuer has complied with all of the agreements and satisfied all of the conditions on its part to be performed or satisfied at or prior to the Closing; Schedule V - Page 2 (C) no event affecting the Issuer has occurred since the date of the Official Statement which either makes untrue or incorrect in any material respect as of the Closing Date any statement or information contained in the Official Statement or is not reflected in the Official Statement but should be reflected therein in order to make the statements and information therein not misleading in any material respect; and (D) there is no action, suit, proceeding or investigation before or by any court or public board or body pending or threatened against the Issuer to restrain or enjoin the issuance, execution or delivery of the Securities or in any manner questioning the proceedings or authority for the issuance of the Securities or affecting directly or indirectly the validity of the Securities or of any provisions made or authorized for their payment or contesting the existence of the Issuer or the title of any of its officers to their respective offices. (v) Written evidence that the rating(s) on the Securities by the applicable rating services, as set forth in this Bond Purchase Agreement, are in effect as of the Closing Date. (vi) A tax certificate or tax regulatory agreement, executed by a duly authorized officer of the Issuer, in form and substance satisfactory to Bond Counsel, setting forth, among other things, in the manner permitted by the Internal Revenue Code of 1986, as amended, and the regulations promulgated thereunder, the reasonable expectations of the Issuer as of the Closing Date as to the use of proceeds of the Series 2015 Bonds and of any other funds of the Issuer expected to be used to pay debt service on the Series 2015 Bonds and the facts and estimates on which such expectations are based, and stating that, to the best of knowledge and belief of such certifying officer, the expectations set forth therein are reasonable. (vii) An Information Return for Tax-Exempt Bond Issues (Internal Revenue Service Form 8038-G), in a form satisfactory to Bond Counsel for filing, executed by a duly authorized officer of the Issuer. (viii) A copy of the Blanket Letter of Representations to DTC relating to the Securities signed by the Issuer. (ix) If the Securities (or any portion thereof) are being issued to advance refund other outstanding obligations: a letter from a firm of certified public accountants, verifying the mathematical accuracy of the related schedules and computations with respect to the yield on the Securities and the availability of sufficient funds (including investment income) for payment of the obligations to be refunded; the executed escrow agreement, if any; and an opinion or opinions of Bond Counsel, dated the Closing Date, in form and substance satisfactory to the Underwriter, relating to the defeasance of the obligations to be refunded. Schedule V - Page 3 (x) True and complete copies of all opinions, certificates and other documents delivered under the Bond Resolution and the Issuer Documents; and such additional legal opinions, certificates, instruments and other documents as the Underwriter or Bond Counsel reasonably may request, in form and substance satisfactory to the Underwriter or Bond Counsel, as the case may be, to evidence (A) compliance by the Issuer with legal requirements reasonably relating to the transactions contemplated by the Official Statement and this Agreement, (B) the truth and completeness, as of the date thereof and as of the time of the Closing, of the statements and information contained in the Official Statement, (C) the truth and completeness, as of the time of the Closing, of the representations and warranties of the Issuer contained in this Agreement and the certificates and other documents referred to in this Agreement, and (D) the due performance or satisfaction by the Issuer at or prior to the Closing of all agreements then to be satisfied. (xi) A certificate of an officer of the Paying Agent, acceptable to the Underwriter, dated the Closing Date, to the effect that the Issuer Documents and other financing or operative documents relating to the Securities to which the Paying Agent is a party have been duly authorized, executed, and delivered by the Paying Agent and, assuming due authorization, execution, and delivery thereof by the Issuer and the other parties thereto, constitute valid and binding agreements of the Paying Agent enforceable against the Paying Agent in accordance with their terms, and the Securities have been authenticated in accordance with the Bond Resolution and the Issuer Documents by a duly authorized officer or signatory of the Paying Agent; and an incumbency certificate of the Paying Agent, in form and content acceptable to the Underwriter and Bond Counsel, dated the Closing Date, with respect to the officers of other signatories of the Paying Agent who have executed, authenticated, and delivered the Securities, the Issuer Documents to which the Paying Agent is a party, and all other financing or operative documents relating to the Securities to be signed by the Paying Agent. EXHIBIT A OPINION OF ISSUER’S SPECIAL COUNSEL (Attached) ButlerSnow 26837614v1 PAYING AGENT AND BOND REGISTRAR AGREEMENT THIS PAYING AGENT AND BOND REGISTRAR AGREEMENT (this “Agreement”), is entered into as of September 1, 2015 by and between Augusta, Georgia (the “Issuer”), and U.S. Bank National Association (the “Bank”), as Paying Agent and Registrar. RECITALS WHEREAS, pursuant to a Master Bond Resolution adopted on September 1, 2015 (the “Bond Resolution”), the Issuer has duly authorized and provided for the issuance of its Airport General Revenue Refunding Bonds, Series 2015A (Non-AMT) and Airport General Revenue Refunding Bonds, Series 2015B (AMT) (collectively, the “2015 Bonds”), and the 2015 Bonds are fully registered bonds without coupons; WHEREAS, the Issuer will ensure all things necessary to make the 2015 Bonds the valid obligations of the Issuer, in accordance with their terms, will be done upon the issuance and delivery thereof; WHEREAS, the Issuer and the Bank wish to provide the terms under which Bank will act as Paying Agent. NOW, THEREFORE, it is mutually agreed as follows: ARTICLE ONE DEFINITIONS Section 1.01. Definitions. For all purposes of this Agreement except as otherwise expressly provided or unless the context otherwise requires: “Bank” means U.S. Bank National Association, a national banking association organized and existing under the laws of the United States of America. “Bond Register” means the book or books of registration kept by the Bank in which are maintained the names and addresses and principal amounts registered to each Registered Owner. “Bonds” means any revenue bonds authorized and authenticated and delivered pursuant to the Bond Resolution, as supplemented, including the 2015 Bonds. “Fiscal Year” means the fiscal year of the Issuer ending on December 31 of each year, as such fiscal year may be changed from time to time. 2 “Issuer” means Augusta, Georgia, a political subdivision of the State of Georgia, its successors and assigns. “Paying Agent” means the Bank when it is performing the function of paying agent for the Bonds. “Person” means any individual, corporation, partnership, joint venture, association, joint stock company, trust, unincorporated organization or government or any agency or political subdivision of a government or any entity whatsoever. “Registered Owner” means a Person in whose name a Bond is registered in the Bond Register. “Registrar” means the Bank when it is performing the function of registrar for the Bonds. “Stated Maturity” when used with respect to any Bond means the date specified in the Bond as the date on which the principal of such Bond is due and payable. ARTICLE TWO APPOINTMENT OF BANK AS PAYING AGENT AND REGISTRAR Section 2.01. Appointment and Acceptance. The Issuer hereby appoints the Bank to act as Paying Agent with respect to the Bonds, to pay to the Registered Owners in accordance with the terms and provisions of this Agreement and the Bond Resolution the principal of, redemption premium (if any), and interest on all or any of the Bonds. The Issuer hereby appoints the Bank as Registrar with respect to the Bonds. As Registrar, the Bank shall keep and maintain for and on behalf of the Issuer, books and records as to the ownership of the Bonds and with respect to the transfer and exchange thereof as provided in this Agreement and the Bond Resolution. The Bank hereby accepts its appointment, and agrees to act as Paying Agent and Registrar. Section 2.02. Compensation. As compensation for the Bank’s services as Paying Agent and Registrar, the Issuer hereby agrees to pay the Bank the fees and amounts set forth in the Bank’s current fee schedule then in effect for services as paying agent and bond registrar for municipalities, which shall be supplied by the Bank to the Issuer on or before the execution of this Agreement and thereafter on or before 3 90 days prior to the close of the Fiscal Year of the Issuer if there are any changes, and shall be effective upon the first day of the following Fiscal Year. In addition, the Issuer agrees to reimburse the Bank, upon its request, for all reasonable and necessary out-of-pocket expenses, disbursements, and advances, including without limitation the reasonable fees, expenses, and disbursements of its agents and attorneys, made or incurred by the Bank in connection with entering into and performing under this Agreement and in connection with investigating and defending itself against any claim or liability in connection with its performance hereunder. ARTICLE THREE PAYING AGENT Section 3.01. Duties of Paying Agent. As Paying Agent, the Bank, provided sufficient collected funds have been provided to it for such purpose by or on behalf of the Issuer, shall pay on behalf of the Issuer the principal of, redemption premium, if any, and interest on the Bonds in accordance with the provisions of the Bonds. Section 3.02. Payment Dates. The Issuer hereby instructs the Bank to pay the principal of, redemption premium (if any) and interest on the Bonds on the dates specified in the Bonds, to the extent such funds have herein been provided by the Issuer. The Bank shall not be required to pay interest on any funds of the Issuer for any period during which such funds are held by the Bank awaiting the presentation of the Bonds for payment. Section 3.03 Receipt of Funds. The Issuer hereby agrees to provide the Paying Agent with sufficient funds to make principal and interest payments as follows: (1) payment by check must be received by the Paying Agent at least 5 business days prior to payment date and (2) payment by wire must be received by Paying Agent no later than 11:30 a.m. EST on the payment date. 4 ARTICLE FOUR REGISTRAR Section 4.01. Initial Delivery of 2015 Bonds. One 2015 Bond for each maturity will initially be registered in the name of Cede & Co., as nominee for The Depository Trust Company (“DTC”). The Bank will hold the 2015 Bonds on behalf of DTC. Section 4.02. Duties of Registrar. The Bank shall provide for the proper registration of transfer, exchange and replacement of the Bonds. Every Bond surrendered for transfer or exchange shall be duly endorsed or be accompanied by a written instrument of transfer, the signature on which as been guaranteed by an eligible guarantor institution, in form acceptable to the Bank, duly executed by the Registered Owner thereof or his attorney duly authorized in writing. The Registrar may request any supporting documentation it deems necessary or appropriate to affect a re-registration. Section 4.03. Unauthenticated Bonds. In the event that the Bonds are no longer held in book-entry form, the Issuer shall provide to the Bank on a continuing basis, an adequate inventory of unauthenticated Bonds to facilitate transfers. The Bank agrees that it will maintain such unauthenticated Bonds in safekeeping. Section 4.04. Form of Bond Register. The Bank as Registrar will maintain its records as Registrar in accordance with the Bank’s general practices and procedures in effect from time to time. Section 4.05. Reports. The Bank will not release or disclose the content of the Bond Register to any person other than to the Issuer at its written request, except upon receipt of a subpoena or court order or as may otherwise be required by law. Upon receipt of a subpoena or court order the Bank will notify the Issuer. Section 4.06. Cancelled Bonds. All Bonds surrendered for payment, redemption, transfer, exchange, or replacement, if surrendered to the Bank, shall be promptly cancelled by it and, if surrendered to the Issuer, shall be delivered to the Bank and, if not already cancelled, shall be promptly cancelled by the Bank. The Issuer may at any time deliver to the Bank for cancellation any Bonds previously authenticated and delivered which the Issuer may have acquired in any manner whatsoever, and all Bonds so delivered shall be promptly cancelled by the Bank. All cancelled Bonds held by the Bank for its retention 5 period then in effect and shall thereafter be destroyed and evidence of such destruction furnished to the Issuer upon its written request. Section 4.07. Mutilated, Lost, Stolen or Destroyed Bonds. In case any Bond shall become mutilated or be destroyed, stolen or lost, the Bank shall deliver a new Bond of like amount, number, maturity date and tenor in exchange and substitution for and upon cancellation of any such mutilated Bond or in lieu of and in substitution for any such Bond destroyed, stolen or lost, upon the payment of the reasonable expenses and charges of the Bank in connection therewith; and, in the case of a Bond destroyed, stolen or lost, upon filing by the owner with the Bank of evidence satisfactory to the Bank that such Bond was destroyed, stolen or lost, and of the ownership thereof, and upon furnishing to the Bank of an appropriate bond of indemnity in form, substance and amount as may be required by law and as is satisfactory to the Bank. All Bonds so surrendered to the Bank shall be canceled by it and evidence of such cancellation shall be given to the Issuer. If the mutilated, destroyed, stolen or lost Bond has already matured or been called for redemption in accordance with its terms it shall not be necessary to issue a new Bond prior to payment, provided that the owner shall first provide the Bank with a bond of indemnity as set forth above. ARTICLE FIVE THE BANK Section 5.01. Duties of Bank. The Bank undertakes to perform the duties set forth herein. No implied duties or obligations shall be read into this Agreement against the Bank. The Bank hereby agrees to use the funds deposited with it for payment of the principal of and interest on the Bonds to pay the same as it shall become due and further agrees to establish and maintain such accounts and funds as may be required for the Bank to function as Paying Agent. Section 5.02. Reliance on Documents, Etc. (a) The Bank may conclusively rely, as to the truth of the statements and correctness of the opinions expressed therein, on certificates or opinions expressed therein, on certificates or opinions furnished to the Bank by the Issuer. (b) The Bank shall not be liable for any error of judgment made in good faith. The Bank shall not be liable for other than its gross negligence or willful misconduct in connection with any act or omission hereunder. (c) No provision of this Agreement shall require the Bank to expend or risk its own funds or otherwise incur any financial liability for performance of any of its duties hereunder, or in the exercise of any of its rights or powers. 6 (d) The Bank may rely, or be protected in acting or refraining from acting, upon any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, note, security or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties. The Bank need not examine the ownership of any Bond, but shall be protected in acting upon receipt of Bonds containing an endorsement or instruction of transfer or power of transfer which appears on its face to be signed by the Registered Owner or agent of the Registered Owner. (e) The Bank may consult with counsel, and the written advice or opinion of counsel shall be full authorization and protection with respect to any action taken, suffered or omitted by it hereunder in good faith and reliance thereon. (f) The Bank may exercise any of the powers hereunder and perform any duties hereunder either directly or by or through agents or attorneys and shall not be liable for the actions of such agent or attorney if appointed by it with reasonable care. Section 5.03. Recitals of Issuer. The recitals contained in the Bonds shall be taken as the statements of the Issuer, and the Bank assumes no responsibility for their correctness. Section 5.04. May Own Bonds. The Bank, in its individual or any other capacity, may become the owner or pledgee of Bonds with the same rights it would have if it were not the Paying Agent and Registrar for the Bonds. Section 5.05. Money Held by Bank. Money held by the Bank hereunder need not be segregated from other funds. The Bank shall have no duties with respect to investment of funds deposited with it and shall be under no obligation to pay interest on any money received by it hereunder. Any money deposited with or otherwise held by the Bank for the payment of the principal, redemption premium (if any) or interest on any Bond and remaining unclaimed, by the Registered Owner (or by the Issuer (which claim by the Issuer shall be made in writing) after maturity and prior to escheatment) will be escheated pursuant to the applicable state law. If funds are returned to the Issuer, the Issuer and the Bank agree that the Registered Owner of such Bond shall thereafter look only to the Issuer for payment thereof, and that all liability of the Bank with respect to such moneys shall thereupon cease. Section 5.06. Other Transactions. The Bank may engage in or be interested in any financial or other transaction with the Issuer. 7 Section 5.07. Interpleader. The Issuer and the Bank agree that the Bank may seek adjudication of any adverse claim, demand, or controversy over its person as well as funds on deposit, in a court of competent jurisdiction. The Issuer and the Bank further agree that the Bank has the right to file an action in interpleader in any court of competent jurisdiction to determine the rights of any person claiming any interest herein. Section 5.08. Indemnification. To the extent permitted by Georgia law, the Issuer shall indemnify the Bank, its officers, directors, employees and agents (“Indemnified Parties”) for, and hold them harmless against any loss, cost, claim, liability or expense arising out of or in connection with the Bank’s acceptance or administration of the Bank’s duties hereunder (except any loss, liability or expense as may be adjudged by a court of competent jurisdiction to be attributable to the Bank’s gross negligence or willful misconduct), including the cost and expense (including its counsel fees) of defending itself against any claim or liability in connection with the exercise or performance of any of its powers or duties under this Agreement. Such indemnity shall survive the termination or discharge of this Agreement or discharge of the Bonds. ARTICLE SIX MISCELLANEOUS PROVISIONS Section 6.01. Amendment. This Agreement may be amended only by an agreement in writing signed by both of the parties hereto. Section 6.02. Assignment. This Agreement may not be assigned by either party without the prior written consent of the other party. Section 6.03. Notices. Any request, demand, authorization, direction, notice, consent, waiver or other document provided or permitted hereby to be given or furnished to the Issuer or the Bank shall be mailed, faxed, sent pdf or delivered to the Issuer or the Bank, respectively, at the address shown below, or such other address as may have been given by one party to the other by fifteen (15) days written notice: If to the Issuer: Augusta, Georgia 530 Greene Street Augusta, Georgia 30901 Attention: Director - Finance 8 If to the Bank: U.S. Bank National Association 1349 W. Peachtree Street NW, #1050 Atlanta, GA 30309 Attention: Corporate Trust Section 6.04. Effect of Headings. The Article and Section headings herein are for convenience of reference only and shall not affect the construction hereof. Section 6.05. Successors and Assigns. All covenants and agreements herein by the Issuer and the Bank shall bind their successors and assigns, whether so expressed or not. Section 6.06. Severability. If any provision of this Agreement shall be determined to be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions hereof shall not in any way be affected or impaired thereby. Section 6.07. Benefits of Agreement. Nothing herein, express or implied, shall give to any Person, other than the parties hereto and their successors hereunder, any benefit or any legal or equitable right, remedy or claim hereunder. Section 6.08. Entire Agreement. This Agreement shall constitute the entire agreement between the parties hereto relative to the Bank acting as Paying Agent and Registrar. Section 6.09. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original and all of which shall constitute one and the same Agreement. Section 6.10. Term and Termination. This Agreement shall be effective from and after its date and until the Bank resigns; provided, however, that no such termination shall be effective until a successor has been appointed and has accepted the duties of the Bank hereunder. The Bank may resign at any time by giving written notice thereof to the Issuer. If the Bank shall resign, or become incapable of acting, the Issuer shall promptly appoint a successor Paying Agent and Registrar. If an instrument of acceptance by a successor Paying Agent and 9 Registrar shall not have been delivered to the Bank within thirty 30 days after the Bank gives notice of resignation, the Bank may petition any court of competent jurisdiction at the expense of the Issuer for the appointment of a successor Paying Agent and Registrar. In the event of resignation of the Bank as Paying Agent and Registrar, upon the written request of the Issuer and upon payment of all amounts owing to the Bank hereunder the Bank shall deliver to the Issuer or its designee all funds and unauthenticated Bonds, and a copy of the Bond Register. The provisions of Section 2.02 and Section 5.08 hereof shall survive and remain in full force and effect following the termination of this Agreement. Section 6.11. Governing Law. This Agreement shall be construed in accordance with and shall be governed by the laws of the State of Georgia. Section 6.12. Documents to be Filed with Bank. At the time of the Bank’s appointment as Paying Agent and Registrar, the Issuer shall file with the Bank the following documents: (a) a specimen Bond; (b) a copy of the opinion of bond counsel provided to the Issuer in connection with the issuance of the Bonds; and (c) such other information that the Bank may request. Section 6.13. Patriot Act Compliance. To help the government fight the funding of terrorism and money laundering activities, Federal law requires all financial institutions to obtain, verify and record information that identifies each person who opens an account. For a non-individual person such as a business entity, a charity, a Trust or other legal entity we will ask for documentation to verify its formation and existence as a legal entity. We may also ask to see financial statements, licenses, identification and authorization documents from individuals claiming authority to represent the entity or other relevant documentation. (Paying Agent and Bond Registrar Agreement) IN WITNESS WHEREOF, the Issuer and the Bank have caused this agreement to be executed in their respective names by their duly authorized representatives, in two counterparts, each of which shall be deemed an original. AUGUSTA, GEORGIA , Issuer By: Hardie Davis, Jr. Mayor (Paying Agent and Bond Registrar Agreement) U.S. BANK NATIONAL ASSOCIATION, as Paying Agent and Bond Registrar By: Authorized Representative DENTONS DRAFT 8/__/15 ATLANTA 5621272.6 PRELIMINARY OFFICIAL STATEMENT DATED AUGUST 21, 2015 TWO SEPARATE ISSUES RATINGS (Book-Entry Only) See “MISCELLANEOUS - Ratings” herein. In the opinion of Bond Counsel, under existing law and subject to the conditions described herein, interest on the Series 2015A Bonds (i) is excluded from gross income for federal income tax purposes, (ii) is exempt from present State of Georgia income taxation, and (iii) will not be an item of tax preference for purposes of the federal alternative minimum income tax imposed on individuals and corporations. See “LEGAL MATTERS - Opinion of Bond Counsel” herein. In the opinion of Bond Counsel, under existing law and subject to the conditions described herein, interest on the Series 2015B Bonds (i) is excluded from gross income for federal income tax purposes, except for any period during which a Series 2015B Bond is held by a “substantial user” of the facilities financed with the proceeds of the Series 2015B Bonds or a “related person” within the meaning of Section 147(a) of the Internal Revenue Code of 1986, as amended, (ii) is exempt from present State of Georgia income taxation, and (iii) is an item of preference for purposes of computing the federal alternative minimum tax imposed on corporations and taxpayers other than corporations and will be taken into account in determining the adjusted current earnings for the purpose of computing the alternative minimum tax imposed upon certain corporations. See “LEGAL MATTERS - Opinion of Bond Counsel” herein. $[AMOUNT]* AUGUSTA, GEORGIA Airport General Revenue Refunding Bonds, Series 2015 New Issue New Issue $[AMOUNT-A]* $[AMOUNT-B]* Airport General Revenue Refunding Bonds, Airport General Revenue Refunding Bonds, Series 2015A (Non-AMT) Series 2015B (AMT) Dated: Date of Issuance Due: January 1, as shown on the inside front cover hereof The Airport General Revenue Refunding Bonds, Series 2015A (Non-AMT) (the “Series 2015A Bonds”) and the Airport General Revenue Refunding Bonds, Series 2015B (AMT) (the “Series 2015B Bonds”) are being issued by Augusta, Georgia (the “Consolidated Government”) for the purpose of refunding all of the Consolidated Government’s Airport Passenger Facility Charge and General Revenue Bonds, Series 2005A (Non-AMT), and Airport General Revenue Refunding Bonds, Series 2005C (AMT), in order to refinance the costs of acquiring, constructing, and installing a new airline passenger terminal and certain other capital improvements for the Augusta Regional Airport at Bush Field (the “Airport”). See “PLAN OF FINANCING” herein. Interest on the Series 2015A Bonds and the Series 2015B Bonds (collectively the “Series 2015 Bonds”) is payable semiannually on January 1 and July 1 of each year, commencing on January 1, 2016. All Series 2015 Bonds bear interest from their date of issuance. See “INTRODUCTION - Description of the Series 2015 Bonds” herein. The Series 2015 Bonds will be issued as fully registered bonds, registered in the name of Cede & Co., as nominee of The Depository Trust Company, New York, New York (“DTC”), to which payments of principal, premium, if any, and interest will be made. Purchasers will acquire beneficial interests in the Series 2015 Bonds in book-entry form only. DTC will remit such payments to its participants who will be responsible for remittance to beneficial owners. See “INTRODUCTION - Description of the Series 2015 Bonds” herein. The Series 2015 Bonds are subject to mandatory and optional redemption prior to maturity as described herein. See “THE SERIES 2015 BONDS - Redemption” herein. The Series 2015A Bonds are special limited obligations of the Consolidated Government payable solely from and secured by a first priority pledge of and lien on (1) certain revenues derived by the Consolidated Government from the ownership and operation of the Airport, remaining after the payment of expenses of operating, maintaining, and repairing the Airport (“Net General Revenues”), and (2) certain revenue from passenger facility charges imposed by the Consolidated Government (“PFC Revenues”) and specifically pledged to pay debt service on the Series 2015A Bonds. The Series 2015B Bonds are special limited obligations of the Consolidated Government payable solely from and secured by a first priority pledge of and lien on Net General Revenues only; the Series 2015B Bonds are not secured by or payable from PFC Revenues. The Series 2015 Bonds will be issued and secured on a parity with any additional revenue bonds of the Consolidated Government hereafter issued on a parity with the Series 2015 Bonds. See “SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2015 BONDS” herein. The Series 2015 Bonds do not constitute a debt or general obligation of the Consolidated Government or a pledge of the faith and credit or taxing power of the Consolidated Government. No governmental entity, including the Consolidated Government, is obligated to levy any tax for the payment of the Series 2015 Bonds. No recourse may be had against the General Fund of the Consolidated Government for the payment of the Series 2015 Bonds. The maturities, principal amounts, interest rates, and prices or yields of the Series 2015 Bonds are set forth on the inside front cover of this Official Statement. This cover page contains certain information for quick reference only. It is not a summary of this issue. Investors must read the entire Official Statement to obtain information essential to making an informed investment decision. The Series 2015 Bonds are offered when, as, and if issued by the Consolidated Government and accepted by the Underwriter, subject to prior sale and to withdrawal or modification of the offer without notice, and are subject to the approving opinion of Murray Barnes Finister LLP, Atlanta, Georgia, Bond Counsel. Certain legal matters will be passed on for the Consolidated Government by its special counsel, Shepard, Plunkett, Hamilton & Boudreaux, LLP, Augusta, Georgia, its Airport counsel, Freeman Mathis & Gary, LLP, Forest Park, Georgia, and by its disclosure counsel, Dentons US LLP, Atlanta, Georgia; and for the Underwriter by its counsel, Butler Snow LLP, Atlanta, Georgia. The Series 2015 Bonds are expected to be available for delivery in book-entry form only through the facilities of DTC in New York, New York on or about __________, 2015. RAYMOND JAMES Dated: __________, 2015 ___________________________ * Preliminary; subject to change. Th i s P r e l i m i n a r y O f f i c i a l S t a t e m e n t a n d t h e i n f o r m a ti o n c o n t a i n e d h e r e i n a r e s u b j e c t t o c o m p l e t i o n o r a m e n d m e n t w i t h o u t n o t i c e . T h e s e s e c u r i t i e s m a y n o t b e s o l d n o r m a y o f f e r s to b u y b e a c c e p t e d p r i o r t o t h e t i m e t h e Of f i c i a l S t a t e m e n t i s d e l i v e r e d i n f i n a l f o r m . U n d e r n o c i r c u m s t a n c e s s h a l l t h i s P r e l i m i na r y O f f i c i a l S t a t e m e n t c o n s t i t u t e a n o f f e r t o s e l l o r t h e s o l i c i t a t i o n o f a n o f f e r t o b u y n o r s h a l l t h e r e b e a n y s a l e o f t h e se s e c u r i t i e s i n an y j u r i s d i c t i o n i n w h i c h s u c h o f f e r , s o l i c i t a t i o n , o r s a l e w o u l d b e u n l a w f u l p r i o r t o r e g i s t r a t i o n o r q u a l i f i c a t i on u n d e r t h e s e c u r i t i e s l a w s o f a n y s u c h j u r i s d i c t i o n . Th i s P r e l i m i n a r y O f f i c i a l S t a t e m e n t a n d t h e i n f o r m a t i o n c o n t a i n e d h e r e i n a r e s u b j e c t t o c o m p l e t i o n o r a m e n d m e n t w i t h o u t n o t i c e. T h e s e s e c u r i t i e s m a y n o t b e s o l d n o r m a y o f f e r s t o b u y b e a c c e p t e d p r i o r t o t h e t i m e t h e Of f i c i a l S t a t e m e n t i s d e l i v e r e d i n f i n a l f o r m . U n d e r n o c i r c u m s t a n c e s s h a l l t h i s P r e l i m i n a r y O f f i c i a l S t a t e m e n t c o n s t i t u t e a n o f f e r t o s e l l o r t h e s o l i c i t a t i o n o f a n o f f e r t o b u y n o r s h a l l t h e r e b e a n y s a l e o f t h e s e s e c u r i t i e s i n an y j u r is d i c t i o n i n w h i c h s u c h o f f e r , s o l i c i t a t i o n , o r s a l e w o u l d b e u n l a w f u l p r i o r t o r e g i s t r a t i o n o r q u a l i f i c a t i o n u n d e r t h e s e c u r it i e s l a w s o f a n y s u c h j u r i s d i c t i o n . ATLANTA 5621272.6 MATURITIES, PRINCIPAL AMOUNTS, INTEREST RATES, PRICES, YIELDS, AND CUSIPS $[AMOUNT-A]* Airport General Revenue Refunding Bonds, Series 2015A (Non-AMT) Maturity Principal Amount Interest Rate Yield CUSIP† Maturity Principal Amount Interest Rate Price or Yield CUSIP† 2018 2027 2019 2028 2020 2029 2021 2030 2022 2031 2023 2032 2024 2033 2025 2034 2026 2035 $[AMOUNT-B]* Airport General Revenue Refunding Bonds, Series 2015B (AMT) Maturity Principal Amount Interest Rate Price or Yield CUSIP† 2020 2021 2022 2023 2024 2025 2026 2027 2028 ________________________ † CUSIP data herein is provided by Standard & Poor’s, CUSIP Services Bureau, a division of the McGraw-Hill Companies, Inc. The Consolidated Government is not responsible for the selection of CUSIP numbers, nor is any representation made as to their correctness on the Series 2015 Bonds or as indicated above. ATLANTA 5621272.6 AUGUSTA, GEORGIA ELECTED OFFICIALS Augusta-Richmond County Commission Hardie Davis, Jr., Mayor Grady Smith, Mayor Pro Tempore Mary Davis Bill Lockett William Fennoy Sammie Sias Sean Frantom Dennis Williams Wayne Guilfoyle Marion Williams Ben Hasan __________________________ APPOINTED OFFICIALS Consolidated Government Administration Janice Jackson, Administrator Donna Williams, Finance Director Lena J. Bonner, Clerk of Commission Andrew G. Mackenzie, General Counsel Augusta Aviation Commission Cedric J. Johnson, Chairman Randy Sasser, Vice Chairman Davis H. Beman Charles July Frank Bowman Douglas M. Lively Paulette Curry Willa Hilton James Germany Grey B. Murray Rev. Karlton Howard Sammie Sias, Ex Officio Airport Administration Roy A. Williams, Executive Director Risa Akiyama Bingham, Director of Finance __________________________ SPECIAL SERVICES Airport Auditors Financial Advisor Mauldin & Jenkins LLC Macon, Georgia Public Financial Management, Inc. Atlanta, Georgia Special Counsel Airport Counsel Shepard, Plunkett, Hamilton & Boudreaux, LLP Augusta, Georgia Freeman Mathis & Gary, LLP Forest Park, Georgia Bond Counsel Disclosure Counsel Murray Barnes Finister LLP Atlanta, Georgia Dentons US LLP Atlanta, Georgia (i) ATLANTA 5621272.6 TABLE OF CONTENTS Page INTRODUCTION ......................................................................................................................................................... 1 The Consolidated Government .................................................................................................................................. 1 The Aviation Commission ......................................................................................................................................... 1 Purpose of the Series 2015 Bonds ............................................................................................................................. 2 The Airport ................................................................................................................................................................ 2 Security and Sources of Payment for the Series 2015 Bonds .................................................................................... 2 Description of the Series 2015 Bonds ........................................................................................................................ 3 Tax Exemption .......................................................................................................................................................... 3 Bond Registrar, Paying Agent, and Depositories ...................................................................................................... 3 Professionals Involved in the Offering ...................................................................................................................... 4 Legal Authority.......................................................................................................................................................... 4 Offering and Delivery of the Series 2015 Bonds ....................................................................................................... 4 Continuing Disclosure ............................................................................................................................................... 4 Investment Considerations ......................................................................................................................................... 5 Other Information ...................................................................................................................................................... 5 PLAN OF FINANCING ................................................................................................................................................ 7 Estimated Sources and Applications of Funds ........................................................................................................... 7 Refunding Program .................................................................................................................................................... 7 THE SERIES 2015 BONDS .......................................................................................................................................... 8 Description ................................................................................................................................................................ 8 Redemption ................................................................................................................................................................ 8 Book-Entry Only System ......................................................................................................................................... 10 Legal Authority........................................................................................................................................................ 12 Investments .............................................................................................................................................................. 12 SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2015 BONDS .................................................... 13 Pledged Revenues .................................................................................................................................................... 13 Funds Created By the Bond Resolution and Flow of Funds .................................................................................... 13 Rate Covenant.......................................................................................................................................................... 17 Parity and Subordinate Lien Bonds ......................................................................................................................... 17 Limited Obligations ................................................................................................................................................. 17 Remedies ................................................................................................................................................................. 18 THE CONSOLIDATED GOVERNMENT ................................................................................................................. 19 Introduction ............................................................................................................................................................. 19 Consolidated Government Administration and Officials ......................................................................................... 19 THE AVIATION COMMISSION............................................................................................................................... 21 Introduction ............................................................................................................................................................. 21 Aviation Commission Administration and Officials ............................................................................................... 21 THE AIRPORT ........................................................................................................................................................... 22 Introduction ............................................................................................................................................................. 22 Airport Facilities ...................................................................................................................................................... 22 Air Trade Area ......................................................................................................................................................... 23 Competition ............................................................................................................................................................. 29 Airlines Providing Service ....................................................................................................................................... 29 Availability of Information Concerning Individual Airlines ................................................................................... 29 Aviation Activity ..................................................................................................................................................... 30 Origin and Destination Information ......................................................................................................................... 32 Airline and Other Revenue Sources ......................................................................................................................... 33 Employees, Employee Relations, and Labor Organizations .................................................................................... 36 Page (ii) ATLANTA 5621272.6 AIRPORT FINANCIAL INFORMATION ................................................................................................................. 36 Accounting System and Policies.............................................................................................................................. 36 Historical and Pro Forma Capital Structure ............................................................................................................. 37 Debt Service Requirements ..................................................................................................................................... 39 Five Year Operating History ................................................................................................................................... 40 Management’s Discussion and Analysis of Results of Operations .......................................................................... 42 Historical and Pro Forma Debt Service Coverage Ratios ........................................................................................ 43 Operating Budget ..................................................................................................................................................... 44 Capital Improvements Program ............................................................................................................................... 46 Passenger Facility Charges ...................................................................................................................................... 47 Federal Grants-In-Aid .............................................................................................................................................. 48 Employee Benefits ................................................................................................................................................... 49 Insurance Coverage ................................................................................................................................................. 52 INVESTMENT CONSIDERATIONS ........................................................................................................................ 54 Introduction ............................................................................................................................................................. 54 Levels of Airline Traffic and Financial Condition of the Airlines ........................................................................... 54 Importance of Delta and US Airways at the Airport ............................................................................................... 54 Effect of Airline Bankruptcies ................................................................................................................................. 55 Costs of Aviation Fuel ............................................................................................................................................. 56 Airline Mergers; Consolidation ............................................................................................................................... 56 Structural Changes in the Travel Market ................................................................................................................. 57 Aviation Security and Health Safety Concerns ....................................................................................................... 57 Regulations and Restrictions Affecting the Airport ................................................................................................. 57 Expiration and Possible Termination of Revenue-Producing Agreements .............................................................. 58 Competition ............................................................................................................................................................. 58 Unavailability of Certain Insurance Coverage ......................................................................................................... 58 LEGAL MATTERS .................................................................................................................................................... 59 Pending Litigation ................................................................................................................................................... 59 Opinion of Bond Counsel ........................................................................................................................................ 59 Changes in Federal and State Tax Law.................................................................................................................... 60 Validation Proceedings ............................................................................................................................................ 60 Closing Certificates ................................................................................................................................................. 60 MISCELLANEOUS .................................................................................................................................................... 61 Ratings ..................................................................................................................................................................... 61 Underwriting ............................................................................................................................................................ 61 Financial Advisor .................................................................................................................................................... 61 Independent Auditors............................................................................................................................................... 61 Summary of Continuing Disclosure Certificate ....................................................................................................... 61 Additional Information ............................................................................................................................................ 65 CERTIFICATION ....................................................................................................................................................... 66 APPENDIX A: FINANCIAL STATEMENTS OF THE AIRPORT ....................................................................... A-1 APPENDIX B: SUMMARY OF THE BOND RESOLUTION ............................................................................... B-1 APPENDIX C: SUMMARY OF THE AIRLINE AGREEMENTS ......................................................................... C-1 APPENDIX D: FORM OF LEGAL OPINION ........................................................................................................ D-1 _____________________ * Throughout this Preliminary Official Statement, the asterisk indicates information that is preliminary and subject to change. ATLANTA 5621272.6 OFFICIAL STATEMENT of AUGUSTA, GEORGIA relating to its $[AMOUNT]* AIRPORT GENERAL REVENUE REFUNDING BONDS, SERIES 2015 New Issue New Issue $[AMOUNT-A]* $[AMOUNT-B]* Airport General Revenue Refunding Bonds, Airport General Revenue Refunding Bonds, Series 2015A (Non-AMT) Series 2015B (AMT) ________________________________ INTRODUCTION The purpose of this Official Statement, which includes the cover page and the Appendices hereto, is to furnish certain information in connection with the sale by Augusta, Georgia of $[AMOUNT] in aggregate principal amount of its Airport General Revenue Refunding Bonds, Series 2015, consisting of $[AMOUNT-A] in aggregate principal amount of its Airport General Revenue Refunding Bonds, Series 2015A (Non-AMT) (the “Series 2015A Bonds”), and $[AMOUNT-B] in aggregate principal amount of its Airport General Revenue Refunding Bonds, Series 2015B (AMT) (the “Series 2015B Bonds”). The Series 2015A Bonds and the Series 2015B Bonds are referred to collectively as the “Series 2015 Bonds” in this Official Statement and will be differentiated, where necessary, by reference to the Series 2015A Bonds and the Series 2015B Bonds. Definitions of certain terms used in this Official Statement and not otherwise defined herein are set forth in Appendix B to this Official Statement under the heading “SUMMARY OF THE BOND RESOLUTION - Definitions.” This Introduction is not a summary of this Official Statement and is intended only for quick reference. It is only a brief description of and guide to, and is qualified in its entirety by reference to, more complete and detailed information contained in the entire Official Statement, including the cover page and the Appendices, and the documents summarized or described herein. Potential investors should fully review the entire Official Statement. The offering of the Series 2015 Bonds to potential investors is made only by means of the entire Official Statement, including the Appendices hereto. No person is authorized to detach this Introduction from the Official Statement or to otherwise use it without the entire Official Statement, including the Appendices hereto. The Consolidated Government Augusta, Georgia (the “Consolidated Government”) is a political subdivision of the State of Georgia, created on January 1, 1996 pursuant to Acts of the General Assembly of the State of Georgia that authorized the consolidation of the municipal corporation known as “The City Council of Augusta” (the “City”) and the political subdivision known as “Richmond County, Georgia” (the “County”). The Consolidated Government is located in the central eastern portion of the State of Georgia bordering the South Carolina state line, approximately 155 miles east of Atlanta, Georgia and 75 miles southwest of Columbia, South Carolina. For more complete information, see “THE CONSOLIDATED GOVERNMENT” herein. The Aviation Commission The Augusta Aviation Commission (the “Aviation Commission”) is board established by ordinance of the Consolidated Government to operate and manage Augusta Regional Airport at Bush Field (the “Airport”) for the benefit of the Consolidated Government. The Aviation Commission is not a legal entity separate and independent of the Consolidated Government. For more complete information, see “THE AVIATION COMMISSION” herein. -2- ATLANTA 5621272.6 Purpose of the Series 2015 Bonds The proceeds of the Series 2015 Bonds, together with other available funds, will be used to, (i) refund all of the Consolidated Government’s outstanding Airport Passenger Facility Charge and General Revenue Bonds, Series 2005A (Non-AMT), issued in the original aggregate principal amount of $8,990,000 (the “Series 2005A Bonds”), and Airport General Revenue Bonds, Series 2005C (AMT), issued in the original aggregate principal amount of $6,200,000 (the “Series 2005C Bonds”), in order to refinance the costs of acquiring, constructing, and installing a new airline passenger terminal and certain other capital improvements for the Airport; (ii) to fully fund debt service reserve accounts to secure the Series 2015 Bonds; and (iii) to pay the costs of issuance of the Series 2015 Bonds. For more complete information, see “PLAN OF FINANCING” herein. The Airport The Consolidated Government owns and the Aviation Commission operates the Airport. The Airport is located approximately seven miles south of downtown Augusta primarily within the territorial limits of the Consolidated Government. The Airport presently consists of approximately 1,248 acres of land, a primary all-weather runway that is approximately 8,000 feet in length, a crosswind runway that is approximately 6,000 feet in length, an air traffic control tower, a main terminal building containing approximately 97,000 square feet, general aviation facilities including a 14,000 square foot general aviation terminal building, and public parking facilities consisting of surface lots containing 1,589 parking spaces. Delta Air Lines and US Airways presently provide scheduled service to and from the Airport. For more complete information, see “THE AIRPORT” herein. Security and Sources of Payment for the Series 2015 Bonds The Series 2015A Bonds are special limited obligations of the Consolidated Government payable solely from and secured by a first priority pledge of and lien on (1) hereinafter described General Revenues remaining after the payment of expenses of operating and maintaining the Airport (“Net General Revenues”), and (2) certain revenue from passenger facility charges imposed by the Consolidated Government (“PFC Revenues”) and specifically pledged to pay debt service on the Series 2015A Bonds. The Series 2015B Bonds are special limited obligations of the Consolidated Government payable solely from and secured by a first priority pledge of and lien on Net General Revenues only; the Series 2015B Bonds are not secured by or payable from PFC Revenues. General Revenues consist of all revenues, income, receipts, and money derived by the Consolidated Government from the ownership or operation of the Airport, including without limitation all rentals, charges, landing fees, use charges, and concession revenue derived from rental car concessions, terminal concessions, food concessions, rentals of land and buildings to fixed base operators and other tenants, and earnings from the investment of revenues. General Revenues do not include PFC Revenues. For a description of PFC Revenues, see “AIRPORT FINANCIAL INFORMATION -Passenger Facility Charges” herein. References to “Pledged Revenues” in this Official Statement mean, in the case of the Series 2015A Bonds, Net General Revenues and Pledged PFC Revenues, and, in the case of the Series 2015B Bonds, Net General Revenues. The Series 2015 Bonds will be equally and ratably secured on a parity basis with any additional revenue bonds of the Consolidated Government hereafter issued on a parity basis with the Series 2015 Bonds. The Series 2015 Bonds and any additional revenue bonds of the Consolidated Government hereafter issued on a parity basis with the Series 2015 Bonds are collectively referred to as the “Bonds” in this Official Statement. The Series 2015 Bonds do not and will not constitute a debt or general obligation of the Consolidated Government or a pledge of the faith and credit or taxing power of the Consolidated Government. No governmental entity, including the Consolidated Government, is obligated to levy any tax for the payment of the Series 2015 Bonds. No recourse may be had against the General Fund of the Consolidated Government for the payment of the Series 2015 Bonds. The pledge of and lien on Pledged Revenues securing the Series 2015 Bonds do not create a legal or equitable pledge, charge, lien, or encumbrance upon any of the Consolidated Government’s property or income, receipts, or revenues, except the Pledged Revenues and the amounts on deposit in the funds held under the hereinafter described Bond Resolution. The Series 2015A Bonds will also be secured by a debt service reserve account to be held in trust for the owners of all of the Series 2015A Bonds, equally and ratably, under the terms of the hereinafter described Bond Resolution. The debt service reserve account for the Series 2015A Bonds will be fully funded upon the issuance of the Series 2015A Bonds, in an amount equal to $__________* from moneys to be released from reserve funds held under the Prior Resolution (as hereinafter defined).. The Series 2015B Bonds will also be secured by a debt service reserve account to be held in trust for the owners of all of the Series 2015B Bonds, equally and ratably, under the terms of the hereinafter described Bond Resolution. The debt service reserve account for the Series 2015B Bonds will be fully funded upon the issuance of -3- ATLANTA 5621272.6 the Series 2015B Bonds, in an amount equal to $__________* from moneys to be released from reserve funds held under the Prior Resolution. For more complete and detailed information, see “SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2015 BONDS” herein. Description of the Series 2015 Bonds Redemption. The Series 2015 Bonds maturing on or after January 1, 20__ are redeemable at the option of the Consolidated Government, not earlier than January 1, 20__ , at the prices and on the terms described in this Official Statement. The Series 2015A Bonds maturing on January 1, 20__ and 20__ are subject to mandatory sinking fund redemption in part prior to maturity on the dates and in the amounts described in this Official Statement. The Series 2015B Bonds maturing on January 1, 20__ and 20__ are subject to mandatory sinking fund redemption in part prior to maturity on the dates and in the amounts described in this Official Statement. For more complete information, see “THE SERIES 2015 BONDS - Redemption” herein. Denominations. The Series 2015 Bonds are issuable in denominations of $5,000 or any integral multiple thereof. Book-Entry Bonds. Each of the Series 2015 Bonds will be issued as fully registered bonds in the denomination of one bond per aggregate principal amount of the stated maturity of each series thereof, and, when issued, will be registered in the name of Cede & Co., as nominee for The Depository Trust Company (“DTC”), New York, New York, an automated depository for securities and clearing house for securities transactions, which will act as securities depository for the Series 2015 Bonds. Purchasers will not receive certificates representing their ownership interest in the Series 2015 Bonds purchased. Purchases of beneficial interests in the Series 2015 Bonds will be made in book-entry only form (without certificates), in authorized denominations, and, under certain circumstances as more fully described in this Official Statement, such beneficial interests are exchangeable for one or more fully registered certificates of like series, principal amount, and maturity in authorized denominations. For more complete information, see “THE SERIES 2015 BONDS - Book-Entry Only System” herein. Payments. So long as DTC or its nominee, Cede & Co., is the registered owner of the Series 2015 Bonds, payments of the principal of, premium, if any, and interest on the Series 2015 Bonds will be made directly to Cede & Co., which will remit such payments to the DTC participants, which will in turn remit such payments to the beneficial owners of the Series 2015 Bonds. For a more complete description of the Series 2015 Bonds, see “THE SERIES 2015 BONDS” herein. Tax Exemption In the opinion of Bond Counsel, under existing law and subject to the conditions described herein, interest on the Series 2015A Bonds (i) is excluded from gross income for federal income tax purposes, (ii) is exempt from present State of Georgia income taxation, and (iii) will not be an item of tax preference for purposes of the federal alternative minimum income tax imposed on individuals and corporations. In the opinion of Bond Counsel, under existing law and subject to the conditions described herein, interest on the Series 2015B Bonds (i) is excluded from gross income for federal income tax purposes, except for any period during which a Series 2015B Bond is held by a “substantial user” of the facilities financed with the proceeds of the Series 2015B Bonds or a “related person” within the meaning of Section 147(a) of the Internal Revenue Code of 1986, as amended, (ii) is exempt from present State of Georgia income taxation, and (iii) is an item of preference for purposes of computing the federal alternative minimum tax imposed on corporations and taxpayers other than corporations and will be taken into account in determining the adjusted current earnings for the purpose of computing the alternative minimum tax imposed upon certain corporations. See Appendix D hereto for the form of the opinion Bond Counsel proposes to deliver in connection with the issuance of the Series 2015 Bonds. For a more complete discussion of such opinion and certain other tax consequences of owning the Series 2015 Bonds, including certain exceptions to the exclusion of the interest on the Series 2015 Bonds from gross income, see “LEGAL MATTERS - Opinion of Bond Counsel herein. Bond Registrar, Paying Agent, and Depositories U.S. Bank National Association, Atlanta, Georgia, will act as bond registrar and as paying agent for the Series 2015 Bonds and as depository of the Debt Service Fund, the Debt Service Reserve Fund, the Operation and Maintenance Reserve Fund, the Renewal and Replacement Fund, and the Rebate Fund created under the hereinafter described Bond Resolution. _______________ will act as depository of the Revenue Fund, the PFC Revenue Fund, -4- ATLANTA 5621272.6 the Operation and Maintenance Fund, the Capital Improvement Fund, the PFC Capital Fund, and the Subordinate Securities Fund created under the hereinafter described Bond Resolution. Professionals Involved in the Offering Certain legal matters pertaining to the Consolidated Government and its authorization and issuance of the Series 2015 Bonds are subject to the approving opinion of Murray Barnes Finister LLP, Atlanta, Georgia, Bond Counsel. Copies of such opinion will be available at the time of delivery of the Series 2015 Bonds, and a copy of the proposed form of such opinion is attached hereto as Appendix D. Certain legal matters will be passed on for the Consolidated Government by its special counsel, Shepard, Plunkett, Hamilton & Boudreaux, LLP, Augusta, Georgia, by its Airport counsel, Freeman Mathis & Gary, LLP, Forest Park, Georgia, and by its disclosure counsel, Dentons US LLP, Atlanta, Georgia; and for the Underwriter by its counsel, Butler Snow LLP, Atlanta, Georgia. Public Financial Management, Inc., Atlanta, Georgia, has been employed as Financial Advisor to the Consolidated Government in connection with the issuance of the Series 2015 Bonds. The financial statements of the Airport as of December 31, 2014 and 2013 and for the years then ended, attached hereto as part of Appendix A, have been audited by Mauldin & Jenkins LLC, Macon, Georgia, independent certified public accountants, to the extent and for the periods indicated in their report thereon which appears in Appendix A hereto. See “MISCELLANEOUS - Independent Professionals” herein. Legal Authority The Series 2015 Bonds are being issued and secured pursuant to the authority granted by the laws of the State of Georgia and under the provisions of a Master Bond Resolution adopted by the Aviation Commission on __________, 2015 and by the Augusta-Richmond County Commission on __________, 2015, as ratified, reaffirmed, supplemented, and amended by a First Supplemental Bond Resolution adopted by the Aviation Commission on __________, 2015 and by the Augusta-Richmond County Commission on __________, 2015 (collectively the “Bond Resolution”). For more complete information, see “THE SERIES 2015 BONDS - Legal Authority” herein. Offering and Delivery of the Series 2015 Bonds The Series 2015 Bonds are offered when, as, and if issued by the Consolidated Government and accepted by the Underwriter, subject to prior sale and to withdrawal or modification of the offer without notice. The Series 2015 Bonds are expected to be available for delivery in book-entry form only through the facilities of DTC in New York, New York on or about __________, 2015. Continuing Disclosure The Consolidated Government has covenanted in the Bond Resolution and a Continuing Disclosure Certificate (the “Disclosure Certificate”) for the benefit of the beneficial owners of the Series 2015 Bonds to provide certain financial information and operating data relating to the Airport (the “Annual Report”) by not later than 210 days after the end of each fiscal year of the Consolidated Government, commencing with fiscal year 2015, and to provide notices of the occurrence of certain enumerated events. The Annual Report will be filed by the Consolidated Government with the Municipal Securities Rulemaking Board (the “MSRB”) in an electronic format as prescribed by the MSRB (which, as of the date hereof, is the Electronic Municipal Market Access (“EMMA”) system of the MSRB). The notices of certain events will be filed by the Consolidated Government with the MSRB in an electronic format as prescribed by the MSRB (which, as of the date hereof, is EMMA). The specific nature of the information to be contained in the Annual Report or the notices of certain events is summarized herein under the caption “MISCELLANEOUS - Summary of Continuing Disclosure Certificate.” These covenants have been made in order to assist the Underwriter in complying with Securities and Exchange Commission Rule 15c2-12(b)(5) (the “Rule”). The Consolidated Government has previously entered into undertakings similar to the Disclosure Certificate in connection with the issuance of other obligations of the Consolidated Government (the “Prior Consolidated Government Undertakings”). The Prior Consolidated Government Undertakings required that the Consolidated Government file (a) its audited financial statements and certain operating and financial data on EMMA and (b) notices of the occurrence of certain enumerated events (“Event Notices”) on EMMA. There have been instances in the previous five fiscal years in which the Consolidated Government has failed to make filings in accordance with the Prior Consolidated Government Undertakings, as described in more detail below. For fiscal year 2010, the Consolidated Government failed to timely file its audited financial statements, which were due on June 29, 2011, July 14, 2011 and July 29, 2011, respectively, under its Prior Consolidated Government -5- ATLANTA 5621272.6 Undertakings. The audited financial statements were received by the Consolidated Government on September 8, 2011 and filed on September 22, 2011. In addition, with respect to the Consolidated Government’s General Obligation Bonds, Series 2010, the operating data required to be included in the annual report for fiscal year 2010 and the annual report for fiscal year 2011 were filed 17 days late and 16 days late, respectively, and with respect to the Urban Redevelopment Agency of Augusta Taxable Revenue Bonds (Laney-Walker and Bethlehem Project), Series 2010, the annual report for fiscal year 2013 was filed one day late. The Consolidated Government failed to timely file Event Notices that were required to be filed with respect to changes in credit ratings of the Consolidated Government and with respect to changes in credit ratings of Financial Security Assurance Inc. and Assured Guaranty Municipal Corp., which insure certain of the Consolidated Government’s bonds. These rating changes were posted to EMMA on July 29, 2014 and September 12, 2014. The Consolidated Government has retained Digital Assurance Certification, L.L.C. to assist with continuing disclosure compliance matters, and the Consolidated Government plans in the future to comply in all material respects with its continuing disclosure undertakings. Investment Considerations There are certain considerations relating to an investment in the Series 2015 Bonds, which are set forth in this Official Statement under the caption “INVESTMENT CONSIDERATIONS” and which should be carefully reviewed by prospective purchasers of the Series 2015 Bonds. The Series 2015 Bonds may not be suitable for purchase by all investors. See “INVESTMENT CONSIDERATIONS” herein. Other Information This Official Statement speaks only as of its date, and the information contained herein is subject to change without notice. This Official Statement contains forecasts, projections, and estimates that are based on current expectations but are not intended as representations of fact or guarantees of results. If and when included in this Official Statement, the words “expects,” “forecasts,” “projects,” “intends,” “anticipates,” “estimates,” and analogous expressions are intended to identify forward-looking statements as defined in the Securities Act of 1933, as amended, and any such statements inherently are subject to a variety of risks and uncertainties, which could cause actual results to differ materially from those contemplated in such forward-looking statements. These forward-looking statements speak only as of the date of this Official Statement. The Consolidated Government disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statement contained herein to reflect any change in the Consolidated Government’s expectations with regard thereto or any change in events, conditions, or circumstances on which any such statement is based. This Official Statement and the Appendices hereto contain brief descriptions of, among other matters, the Consolidated Government, the Aviation Commission, the Series 2015 Bonds, the Airport, the Bond Resolution, the Disclosure Certificate, and the security and sources of payment for the Series 2015 Bonds. Such descriptions and information do not purport to be comprehensive or definitive. The summaries of various constitutional provisions and statutes, the Bond Resolution, the Disclosure Certificate, and other documents are intended as summaries only and are qualified in their entirety by reference to such documents, and references herein to the Series 2015 Bonds are qualified in their entirety to the forms thereof included in the Bond Resolution. Copies of the Bond Resolution, the Disclosure Certificate, and other documents and information are available, upon request and upon payment to the Aviation Commission of a charge for copying, mailing, and handling, from Risa Akiyama Bingham, Director of Finance, Augusta Regional Airport, 1501 Aviation Way, Augusta, Georgia 30906-9620, telephone (706) 798-3236. During the period of the offering of the Series 2015 Bonds, copies of such documents are available, upon request and upon payment to the Financial Advisor of a charge for copying, mailing, and handling, from Public Financial Management, Inc., Bank of America Plaza, 600 Peachtree Street, N.E., Suite 3770, Atlanta, Georgia 30308, telephone (404) 876-1919. The Series 2015 Bonds have not been registered under the Securities Act of 1933, and the Bond Resolution has not been qualified under the Trust Indenture Act of 1939, in reliance on exemptions contained in such Acts. This Official Statement does not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of the Series 2015 Bonds by any person in any jurisdiction in which it is unlawful for such person to make such offer, solicitation, or sale. -6- ATLANTA 5621272.6 No dealer, broker, salesman, or other person has been authorized by the Consolidated Government or the Underwriter to give any information or to make any representations other than those contained in this Official Statement, and, if given or made, such other information or representations should not be relied upon as having been authorized by the Consolidated Government or the Underwriter. Except where otherwise indicated, all information contained in this Official Statement has been provided by the Consolidated Government. The information set forth herein has been obtained by the Consolidated Government from sources that are believed to be reliable. The Underwriter has provided the following sentence for inclusion in this Official Statement. The Underwriter has reviewed the information in this Official Statement in accordance with, and as part of, its responsibilities to investors under the federal securities law as applied to the facts and circumstances of this transaction, but the Underwriter does not guarantee the accuracy or completeness of such information. The information contained herein is subject to change without notice, and neither the delivery of this Official Statement nor any sale made hereunder shall under any circumstances create an implication that there has been no change in the affairs of the Consolidated Government or the other matters described herein since the date hereof or the earlier dates set forth herein as of which certain information contained herein is given. In connection with this offering, the Underwriter may over-allot or effect transactions that stabilize or maintain the market prices of the Series 2015 Bonds at a level above that which might otherwise prevail in the open market. Such stabilizing, if commenced, may be discontinued at any time. Neither the United States Securities and Exchange Commission nor any state securities commission has approved or disapproved of the Series 2015 Bonds or reviewed or passed upon the adequacy or accuracy of this Official Statement. Any representation to the contrary may be a criminal offense. The order and placement of information in this Official Statement, including the appendices, are not an indication of relevance, materiality, or relative importance, and this Official Statement, including the appendices, must be read in its entirety. The captions and headings in this Official Statement are for convenience only and in no way define, limit, or describe the scope or intent, or affect the meaning or construction, of any provision or section in this Official Statement. THIS OFFICIAL STATEMENT IS BEING PROVIDED TO PROSPECTIVE PURCHASERS EITHER IN BOUND PRINTED FORM (“ORIGINAL BOUND FORMAT”) OR IN ELECTRONIC FORMAT ON THE FOLLOWING WEBSITE: www.i-dealprospectus.com. THIS OFFICIAL STATEMENT MAY BE RELIED UPON ONLY IF IT IS IN ITS ORIGINAL BOUND FORMAT OR IS PRINTED IN ITS ENTIRETY DIRECTLY FROM SUCH WEBSITE. [Remainder of Page Intentionally Left Blank] -7- ATLANTA 5621272.6 PLAN OF FINANCING Estimated Sources and Applications of Funds The sources and applications of funds in connection with the issuance of the Series 2015 Bonds are estimated below. Estimated Sources of Funds*: Par Amount of Series 2015A Bonds Plus: Net Premium Total Proceeds of Series 2015A Bonds Par Amount of Series 2015B Bonds Plus: Net Premium Total Proceeds of Series 2015B Bonds Funds Released from Prior Resolution1 Total Sources of Funds Estimated Applications of Funds*: Redeem Refunded Bonds1 Deposit to Debt Service Reserve Fund2 Costs of Issuance3 Underwriting Discount4 Total Applications of Funds ________________________ 1 See “PLAN OF FINANCING - Refunding Program” herein. 2 This amount fully funds (a) the Series 2015A Subaccount of the Debt Service Reserve Fund in an amount equal to 10 percent of the stated principal amount of the Series 2015A Bonds, and (b) the Series 2015B Subaccount of the Debt Service Reserve Fund in an amount equal to 10 percent of the stated principal amount of the Series 2015B Bonds. See “SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2015 BONDS - Funds Created By the Bond Resolution and Flow of Funds -- Debt Service Fund” herein. 3 Includes legal and accounting fees, Financial Advisor’s fees, initial Bond Registrar’s and Paying Agent’s fees, printing costs, validation court costs, rating agencies’ fees, and other costs of issuance. 4 ________% of the principal amount of the Series 2015 Bonds. See “MISCELLANEOUS - Underwriting” herein. Refunding Program The Consolidated Government issued the Series 2005A Bonds and the Series 2005C Bonds, together with its Airport Passenger Facility Charge and General Revenue Bonds, Series 2005B (AMT), in the original aggregate principal amount of $4,415,000 (the “Series 2005B Bonds”), for the purpose of financing the costs of acquiring, constructing, and installing a new airline passenger terminal and certain other capital improvements for the Airport. The Series 2005A Bonds, the Series 2005B Bonds, and the Series 2005C Bonds (collectively the “Prior Bonds”) were issued and secured under the provisions of a Master Bond Resolution adopted by the Augusta-Richmond County Commission on February 1, 2005 and by the Aviation Commission on January 20, 2005, as ratified, reaffirmed, supplemented, and amended by a First Supplemental Bond Resolution adopted by the Augusta-Richmond County Commission on February 1, 2005 and by the Aviation Commission on January 20, 2005 and a Second Supplemental Bond Resolution adopted by the Augusta-Richmond County Commission and by the Aviation Commission on February 17, 2005 (collectively the “Prior Resolution”). The Series 2005C Bonds were paid in full in January 2015 and are no longer outstanding. The Consolidated Government will use a portion of the proceeds of the sale of the Series 2015 Bonds, together with certain amounts held under the Prior Resolution, to refund all of the Series 2005A Bonds, maturing January 1, 2035, currently outstanding in the aggregate principal amount of $8,990,000, and all of the Series 2005C Bonds, maturing January 1, 2031, currently outstanding in the aggregate principal amount of $6,090,000 (collectively the “Refunded Bonds”), in order to achieve debt service savings. The true interest cost on the Series 2015 Bonds is ____%, and the weighted average interest rate on the Refunded Bonds is ____%. The Consolidated Government has determined that refunding the Refunded Bonds will reduce the Consolidated Government’s total debt service payments by $_________ on an aggregate basis and by $_________ on a net present value basis. -8- ATLANTA 5621272.6 The Consolidated Government will deposit sufficient moneys in trust into the 2005 Defeasance Account held by U.S. Bank National Association, Atlanta, Georgia, in its capacity as paying agent for the Refunded Bonds, from the proceeds of the sale of the Series 2015 Bonds and from certain amounts held under the Prior Resolution, to pay the principal of and interest on the Refunded Bonds on their scheduled redemption date of __________, 2015. These amounts will not be available to pay the principal of, premium, if any, or interest on the Series 2015 Bonds, and the owners of the Series 2015 Bonds will have no claim to these amounts. THE SERIES 2015 BONDS Description The Series 2015A Bonds are being issued in the aggregate principal amount of $[AMOUNT-A] and the Series 2015B Bonds are being issued in the aggregate principal amount of $[AMOUNT-B]. The Series 2015 Bonds will be dated as of their date of issuance and will bear interest at the rates set forth on the inside front cover page of this Official Statement, payable January 1, 2016, and semiannually thereafter on July 1 and January 1 of each year to the registered owner as shown on the books and records of U.S. Bank National Association, Atlanta, Georgia, as Paying Agent and Bond Registrar (the “Paying Agent” or the “Bond Registrar”) as of the close of business on the 15th day of the calendar months next preceding such July 1 and January 1. Subject to the redemption provisions set forth below, the Series 2015 Bonds will mature on the dates and in the amounts set forth on the inside front cover page of this Official Statement. The Series 2015 Bonds are issuable only as fully registered bonds, without coupons, in any authorized denomination. Purchases of beneficial ownership interests in the Series 2015 Bonds will be made in book-entry form and purchasers will not receive certificates representing interests in the Series 2015 Bonds so purchased. If the book-entry system is discontinued, Series 2015 Bonds will be delivered as described in the Bond Resolution, and beneficial owners of the Series 2015 Bonds will become the registered owners of the Series 2015 Bonds. Redemption Optional Redemption of Series 2015 Bonds The Series 2015 Bonds are redeemable at the option of the Consolidated Government in whole or in part at any time in any year, not earlier than January 1, 20__ (less than all of such Series 2015 Bonds of a single maturity to be selected by lot in a manner determined by the Bond Registrar), from any monies available therefor at a redemption price equal to 100% of the principal amount of the Series 2015 Bonds being redeemed plus accrued interest to the redemption date, all in the manner provided in the Bond Resolution. Mandatory Redemption of Series 2015A Bonds The Series 2015A Bonds maturing on January 1, 20__ and 20__ are subject to scheduled mandatory redemption prior to maturity in part (the actual bonds to be redeemed to be selected by lot in such manner as may be designated by the Paying Agent) at a redemption price equal to 100% of the principal amount thereof, plus accrued interest to the redemption date, in the following principal amounts and on the dates set forth below: Series 2015A Bonds Maturing January 1, 20 January 1 Principal of the Year Amount (Leaving $_________ to mature January 1, 20__) Series 2015A Bonds Maturing January 1, 20 January 1 Principal of the Year Amount -9- ATLANTA 5621272.6 (Leaving $_________ to mature January 1, 20__) -10- ATLANTA 5621272.6 Mandatory Redemption of Series 2015B Bonds The Series 2015B Bonds maturing on January 1, 20__ and 20__ are subject to scheduled mandatory redemption prior to maturity in part (the actual bonds to be redeemed to be selected by lot in such manner as may be designated by the Paying Agent) at a redemption price equal to 100% of the principal amount thereof, plus accrued interest to the redemption date, in the following principal amounts and on the dates set forth below: Series 2015B Bonds Maturing January 1, 20 January 1 Principal of the Year Amount (Leaving $_________ to mature January 1, 20__) Series 2015B Bonds Maturing January 1, 20 January 1 Principal of the Year Amount (Leaving $_________ to mature January 1, 20__) Redemption Notices Notice of any redemption of the Series 2015 Bonds, identifying the Series 2015 Bonds (or any portion of the respective principal sums thereof) to be redeemed, will be given by first-class mail, postage prepaid, at least 30 days and not more than 60 days prior to the redemption date to all registered owners of the Series 2015 Bonds to be redeemed (in whole or in part). Failure to give appropriate notice of any redemption by mail or any defect in the notice will not affect the validity of the proceedings for the redemption of any Series 2015 Bond. Book-Entry Only System The Depository Trust Company (“DTC”), New York, New York, or its successor, will act as securities depository for the Series 2015 Bonds. The Series 2015 Bonds will be issued as fully registered securities registered in the name of Cede & Co. (DTC’s partnership nominee) or such other name as may be requested by an authorized representative of DTC. One fully registered Series 2015 Bond will be issued for each maturity, in the aggregate principal amount of such maturity within each series, and will be deposited with DTC. So long as DTC or its nominee is the registered owner of the Series 2015 Bonds, payments of the principal and redemption premium of and interest due on the Series 2015 Bonds will be payable directly to DTC. DTC is a limited-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 and provides asset servicing for over 2 million issues of U.S. and non-U.S. equity issues, corporate and municipal debt issues, and money market instruments from over 85 countries that DTC’s participants (“Direct Participants”) deposit with DTC. DTC also facilitates the post-trade settlement among Direct Participants of sales and other securities transactions in deposited securities, through electronic computerized book-entry transfers and pledges between Direct Participants accounts. This eliminates the need for physical movement of securities certificates. Direct Participants include both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is a wholly-owned subsidiary of The Depository Trust & Clearing Corporation (“DTCC”). DTCC, in turn, is owned by a number of Direct Participants of DTC and members of the National Securities Clearing Corporation, Government Securities Clearing Corporation, MBS Clearing -11- ATLANTA 5621272.6 Corporation, and Emerging Markets Clearing Corporation (NSCC, GSCC, MBSCC, and EMCC, also subsidiaries of DTCC), as well as by the New York Stock Exchange, Inc., the American Stock Exchange LLC, and the National Association of Securities Dealers, Inc. Access to the DTC system is also available to others such as both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly (“Indirect Participants”). DTC has Standard & Poor’s highest rating: AAA. The DTC Rules applicable to its Participants are on file with the Securities and Exchange Commission. More information about DTC can be found at www.dtcc.com. Purchases of Series 2015 Bonds under the DTC system must be made by or through Direct Participants, which will receive a credit for the Series 2015 Bonds on DTC’s records. The ownership interest of each actual purchaser of each Series 2015 Bond (a “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. Beneficial Owners are, however, 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 interests in the Series 2015 Bonds are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in Series 2015 Bonds, except in the event that use of the book-entry system for the Series 2015 Bonds is discontinued. To facilitate subsequent transfers, all Series 2015 Bonds deposited by Direct Participants with DTC are registered in the name of DTC’s partnership nominee, Cede & Co., or such other name as may be requested by an authorized representative of DTC. The deposit of Series 2015 Bonds with DTC and their registration in the name of Cede & Co., or such other DTC nominee, do not effect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Series 2015 Bonds; DTC’s records reflect only the identity of the Direct Participants to whose accounts such Series 2015 Bonds are credited, which may or may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers. Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Redemption notices will be sent to DTC. If less than all of the Series 2015 Bonds within a maturity are being redeemed, DTC’s practice is to determine by lot the amount of the interest of each Direct Participant in such maturity to be redeemed. Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to Series 2015 Bonds unless authorized by a Direct Participant in accordance with DTC’s procedures. Under its usual procedures, DTC mails an Omnibus Proxy to the Paying Agent as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.’s consenting or voting rights to those Direct Participants to whose accounts the Series 2015 Bonds are credited on the record date (identified in a listing attached to the Omnibus Proxy). Principal, premium, and interest payments on the Series 2015 Bonds will be made to Cede & Co., or such other nominee as may be requested by an authorized representative of DTC. DTC’s practice is to credit Direct Participants’ accounts upon DTC’s receipt of funds and corresponding detail information from the Consolidated Government or the Paying Agent, on the payable date in accordance with their respective holdings shown on DTC’s records. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in “street name,” and will be the responsibility of such Participant and not of DTC, the Paying Agent, or the Consolidated Government, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of principal, premium, and interest to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of the Consolidated Government or the Paying Agent, disbursement of such payments to Direct Participants will be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants. DTC may discontinue providing its services as securities depository with respect to the Series 2015 Bonds at any time by giving reasonable notice to the Consolidated Government or the Paying Agent. Under such circumstances, in the event that a successor securities depository is not obtained, Series 2015 Bonds are required to be printed and delivered. The Consolidated Government may decide to discontinue use of the system of book-entry transfers through DTC (or a successor securities depository). In that event, Series 2015 Bonds will be printed and delivered to DTC. -12- ATLANTA 5621272.6 The information concerning DTC and DTC’s book-entry system set forth above has been obtained from sources that the Consolidated Government believes to be reliable, but the Consolidated Government takes no responsibility for the accuracy thereof. SO LONG AS CEDE & CO., AS NOMINEE FOR DTC, IS THE SOLE BONDHOLDER, THE CONSOLIDATED GOVERNMENT SHALL TREAT CEDE & CO. AS THE ONLY BONDHOLDER FOR ALL PURPOSES, INCLUDING RECEIPT OF ALL PRINCIPAL AND PREMIUM OF AND INTEREST ON THE SERIES 2015 BONDS, RECEIPT OF NOTICES, VOTING, AND REQUESTING OR DIRECTING THE CONSOLIDATED GOVERNMENT AND THE PAYING AGENT TO TAKE OR NOT TO TAKE, OR CONSENTING TO, CERTAIN ACTIONS. THE CONSOLIDATED GOVERNMENT HAS NO RESPONSIBILITY OR OBLIGATION TO THE DIRECT OR INDIRECT PARTICIPANTS OR THE BENEFICIAL OWNERS WITH RESPECT TO (A) THE ACCURACY OF ANY RECORDS MAINTAINED BY DTC OR ANY DIRECT OR INDIRECT PARTICIPANT; (B) THE PAYMENT BY ANY DIRECT OR INDIRECT PARTICIPANT OF ANY AMOUNT DUE TO ANY BENEFICIAL OWNER IN RESPECT OF THE PRINCIPAL AND PREMIUM OF AND INTEREST ON THE SERIES 2015 BONDS; (C) THE DELIVERY OR TIMELINESS OF DELIVERY BY ANY DIRECT OR INDIRECT PARTICIPANT OF ANY NOTICE TO ANY BENEFICIAL OWNER WHICH IS REQUIRED OR PERMITTED UNDER THE TERMS OF RESOLUTION TO BE GIVEN TO BONDHOLDERS; OR (D) OTHER ACTION TAKEN BY DTC OR CEDE & CO. AS BONDHOLDER. Beneficial Owners of the Series 2015 Bonds may experience some delay in their receipt of distributions of principal and interest on the Series 2015 Bonds since such distributions will be forwarded by the Paying Agent to DTC and DTC will credit such distributions to the accounts of Direct Participants which will thereafter credit them to the accounts of Beneficial Owners either directly or indirectly through Indirect Participants. Issuance of the Series 2015 Bonds in book-entry form may reduce the liquidity of the Series 2015 Bonds in the secondary trading market since investors may be unwilling to purchase Series 2015 Bonds for which they cannot obtain physical certificates. In addition, since transactions in the Series 2015 Bonds can be effected only through DTC, Direct Participants, Indirect Participants, and certain banks, the ability of a Beneficial Owner to pledge Series 2015 Bonds to persons or entities that do not participate in the DTC system, or otherwise to take action in respect of such Series 2015 Bonds, may be limited due to lack of a physical certificate. Beneficial Owners will not be recognized by the Paying Agent as registered owners for purposes of the Bond Resolution, and Beneficial Owners will be permitted to exercise the rights of registered owners only indirectly through DTC and the Direct or Indirect Participants. Legal Authority Paragraph I of Section VI of Article IX of the Constitution of the State of Georgia authorizes any political subdivision to issue revenue bonds as provided by general law and provides (1) that the obligation represented by revenue bonds shall be repayable only out of the revenue derived from the project and shall not be deemed to be a debt of the issuing political subdivision and (2) that no issuing political subdivision shall exercise the power of taxation for the purpose of paying any part of the principal or interest of any such revenue bonds. The Series 2015 Bonds are being issued and secured pursuant to the authority granted by Article 3 of Chapter 82 of Title 36 of the Official Code of Georgia Annotated, known as the “Revenue Bond Law” (the “Revenue Bond Law”), and under the provisions of the Bond Resolution. Investments For a description of the provisions governing the investment of the amounts held to pay debt service on the Series 2015 Bonds, see “SUMMARY OF THE BOND RESOLUTION - Investments” in Appendix B hereto and “SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2015 BONDS - Funds Created By the Bond Resolution and Flow of Funds” herein. -13- ATLANTA 5621272.6 SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2015 BONDS Pledged Revenues Under the terms of the Bond Resolution, the Series 2015A Bonds are secured by a first priority pledge of and lien on Net General Revenues and Pledged PFC Revenues. Under the terms of the Bond Resolution, the Series 2015B Bonds are secured by a first priority pledge of and lien on Net General Revenues only; the Series 2015B Bonds are not secured by or payable from PFC Revenues. General Revenues consist of all revenues, income, receipts, and money derived by the Consolidated Government from the ownership or operation of the Airport, including without limitation all rentals, charges, landing fees, use charges, and concession revenue received by or on behalf of the Consolidated Government from the ownership and operation of the Airport. General Revenues do not include PFC Revenues. For a description of PFC Revenues, see “AIRPORT FINANCIAL INFORMATION - Passenger Facility Charges” herein. References to “Pledged Revenues” in this Official Statement mean, in the case of the Series 2015A Bonds, Net General Revenues and Pledged PFC Revenues, and, in the case of the Series 2015B Bonds, Net General Revenues. The Consolidated Government has covenanted in the Bond Resolution that it will not create or suffer to be created in the operation and maintenance of the Airport any charge, lien, or security interest on the Airport or upon the revenues derived therefrom ranking prior to or (except as provided in the Bond Resolution with respect to the issuance of parity bonds) equally with the lien and charge upon such revenues created by the Bond Resolution. The Consolidated Government has also made certain covenants in the Bond Resolution concerning the sale or disposition of the Airport, insurance on the Airport, and the books and records relating to the Airport, which are described in “SUMMARY OF THE BOND RESOLUTION - Maintenance, Insurance, and Sale of the Airport; Annual Budget; Uneconomic Facilities; Tax Covenants” in Appendix B to this Official Statement. Funds Created By the Bond Resolution and Flow of Funds The Bond Resolution requires the Aviation Commission, on behalf of the Consolidated Government, to maintain the following funds: (1) the Revenue Fund, to be held by _______________, Augusta, Georgia, as Depository for the account of the Aviation Commission, and therein the following three accounts: (a) General Revenue Account, (b) Special Purpose Revenue Account, and (c) Released Revenue Account; (2) the PFC Revenue Fund, to be held by _______________, Augusta, Georgia, as Depository for the account of the Aviation Commission, and within the PFC Revenue Fund, the Pledged PFC Account and the Pledged PFC Series 2015 Account therein and such additional Pledged PFC Series Accounts as may be created and established in a Supplemental Bond Resolution: (3) the Operation and Maintenance Fund, to be held by _______________, Augusta, Georgia, as Depository for the account of the Aviation Commission; (4) the Operation and Maintenance Reserve Fund, to be held by U.S. Bank National Association, Atlanta, Georgia, as Depository for the account of the Aviation Commission; (5) the Debt Service Fund, to be held by U.S. Bank National Association, Atlanta, Georgia, as Custodian for the account of the Aviation Commission, and therein the following five accounts: (a) Interest Account, with a Series 2015A Subaccount and a Series 2015B Subaccount and additional subaccounts therein for each series of Bonds, provided a subaccount therein may be utilized for more than one series of Bonds if all such series share exactly the same lien status on the same categories of Revenues, (b) Contract Payments Account, with subaccounts therein for each series of Bonds, provided a subaccount therein may be utilized for more than one series of Bonds if all such series share exactly the same lien status on the same categories of Revenues and are secured in parity by the same or identical Contracts with the same provider, and (c) Principal Account, with a Series 2015A Subaccount and a Series 2015B Subaccount and additional subaccounts therein for each series of Bonds, provided a subaccount therein may be utilized for more -14- ATLANTA 5621272.6 than one series of Bonds if all such series share exactly the same lien status on the same categories of Revenues and are secured in parity by the same or identical Contracts with the same provider; (6) the Debt Service Reserve Fund, to be held by U.S. Bank National Association, Atlanta, Georgia, as Depository for the account of the Aviation Commission, with a Series 2015A Account and a Series 2015B Account and additional accounts for each series of Bonds which has a Debt Service Reserve Requirement; provided an account therein may be utilized for more than one series of Bonds if all such series are specified in the related Supplemental Bond Resolutions to share a pledge of such account and have a combined Debt Service Reserve Requirement; (7) the Rebate Fund, to be held by by _______________, Augusta, Georgia, as Depository for the account of the Aviation Commission; (8) the Subordinate Securities Fund, to be held by _______________, Augusta, Georgia, as Depository for the account of the Aviation Commission; (9) the Capital Improvement Fund, to be held _______________, Augusta, Georgia, as Depository for the account of the Aviation Commission, and therein the following two accounts: (a) Capital Improvement Account, and (b) Revenue Credit Account; and (10) the Airport PFC Capital Fund, to be held by _______________, Augusta, Georgia, as Depository for the account of the Aviation Commission. Revenue Fund; PFC Revenue Fund; Operation and Maintenance Fund The Bond Resolution requires the Consolidated Government, acting by and through the Aviation Commission, to deposit and continue to deposit all Revenues other than PFC Revenues in the Revenue Fund from time to time as and when received and to deposit and continue to deposit all PFC Revenues in the PFC Revenue Fund from time to time as and when received. The amounts deposited to the Revenue Fund are to be immediately allocated to the account within the Revenue Fund designated therefor: General Revenues to the General Revenue Account; Special Purpose Revenues to the Special Purpose Revenue Account; and Released Revenues to the Released Revenue Account. The amounts deposited to the PFC Revenue Fund are to be immediately allocated to the account designated therefor: Pledged PFC Revenues to the Pledged PFC Account and then to the applicable Pledged PFC Series Account. Under the terms of the Bond Resolution, moneys in the Revenue Fund are to be applied from time to time to the following purposes and, prior to the occurrence and continuation of an Event of Default under the Bond Resolution, in the following order of priority subject to the limitations set forth below: (i) to deposit into the Operation and Maintenance Fund the amounts required to pay Expenses of Operation and Maintenance; (ii) to deposit into the Debt Service Fund the amounts required for debt service on General Revenue Bonds; (iii) to deposit into the Rebate Fund the amounts required to make provision for arbitrage rebate payments to the United States government; (iv) to deposit into the Operation and Maintenance Reserve Fund the amounts necessary to reserve against any shortfall in funds to pay Expenses of Operation and Maintenance when due; (v) to pay to any party to a Contract the amounts due thereon, including continuing commission or commitment fees and repayment of amounts equivalent to principal on related Bonds, including Additional Interest; (vi) to pay in periodic installments any amounts into the Subordinate Securities Fund required to be paid with respect to Subordinate Lien Bonds and then with respect to any Other Airport Obligations not secured by a lien on Revenues; and (vii) to transfer the balance of the Revenue Fund to the Capital Improvement Fund. Under the terms of the Bond Resolution, moneys in the PFC Revenue Fund are to be applied from time to time to the following purposes and in the following order of priority: (i) PFC Revenues pledged to the payment of PFC Stand-Alone Revenue Bonds are to be deposited to the related accounts within the Debt Service Fund (other than the Contract Payments Account); (ii) amounts constituting Pledged PFC Revenues are to be transferred to the Pledged PFC Account (and credited to the Pledged PFC Series Accounts held within the Pledged PFC Account); and (iii) the balance of the PFC Revenue Fund is to be transferred to the PFC Capital Fund to pay Costs of PFC Facilities, administrative costs of the PFC program, the payment of PFC Revenue Bonds, and related Contracts. For Expenses of Operation and Maintenance, (A) amounts in the Special Purpose Revenue Account may be used only for Expenses of Operation and Maintenance of Special Purpose Facilities; (B) amounts in the Released Revenue Account may be used only for Expenses of Operation and Maintenance of Released Revenue Facilities; and (C) Expenses of Operation and Maintenance related to General Revenues may be paid from amounts in the General Revenue Account. -15- ATLANTA 5621272.6 For deposits to the Debt Service Fund, the Debt Service Reserve Fund, or the Rebate Account, (A) amounts in the Special Purpose Revenue Account may be used only for deposits to subaccounts relating to Bonds that have a lien on any Special Purpose Revenues; (B) amounts in the Released Revenue Account may be used only for deposits to subaccounts relating to Bonds that have a lien on any Released Revenues or for other purposes specified in the Bond Resolution; (C) amounts in a Pledged PFC Account may be used only for deposits to subaccounts relating to Bonds that have a lien on Pledged PFC Revenues; and (D) deposits to subaccounts relating to Bonds that have a lien on General Revenues may be made from amounts in the General Revenue Account. For any payments on a Contract, amounts may be drawn only from the account or accounts relating to the revenues securing the Bonds related to such Contract, only in accordance with the strictures of the immediately preceding paragraph and, unless otherwise provided in the related Supplemental Bond Resolution because a Credit Facility is intended to be drawn on for payments on Bonds, only after all payments then due with respect to the related Bonds have been made. For any payments with respect to any Other Airport Obligations, (A) if such Other Airport Obligations relate to Special Purpose Facilities, from the Special Purpose Revenue Account; (B) if such Other Airport Obligations relate to Released Revenue Facilities, then from the Released Revenue Account; and (C) otherwise, from the General Revenue Account. No payments may be made with respect to any Other Airport Obligations unless all required payments have been made to each subaccount with respect to Bonds and on all Contracts and with respect to Subordinate Lien Bonds; provided if required by the terms thereof, obligations treated as Senior Lien Bonds or Subordinate Lien Bonds pursuant to the Bond Resolution will be paid with the other Senior Lien Bonds or Subordinate Lien Bonds. If at any time the amounts in any subaccount of the Debt Service Fund or the Debt Service Reserve Fund are less than the amounts required by the Bond Resolution, and there are not on deposit in the Capital Improvement Fund available moneys sufficient to cure any such deficiency, then the Consolidated Government will withdraw from the Subordinate Securities Fund subaccounts related to Subordinate Lien Bonds and deposit in such subaccount of the Debt Service Fund or the Debt Service Reserve Fund, as the case may be, the amount necessary (or all the moneys in such funds and accounts, if less than the amount required) to make up such deficiency; provided no such amounts may be withdrawn from or payable to subaccounts related to Special Purpose Revenue Bonds. The Bond Resolution requires that moneys on deposit in the Operation and Maintenance Fund are to be disbursed for the purpose of paying Expenses of Operation and Maintenance. In each month, commencing with the 15th business day of each month, there will be deposited to the Operation and Maintenance Fund an amount determined by the Airport Finance Officer to be necessary to be credited to said fund to pay Expenses of Operation and Maintenance for such month. Debt Service Fund and Debt Service Reserve Fund Sufficient moneys shall be paid in periodic installments from the Revenue Fund and, to the extent so pledged, the Pledged PFC Series Accounts held within the Pledged PFC Account, into the accounts and subaccounts of the Debt Service Fund for the purpose of paying the Bonds as they become due and payable and for the purpose of making payments under Contracts. The Bond Resolution creates the Series 2015A Subaccount and the Series 2015B Subaccount of the Debt Service Reserve Fund. The Debt Service Reserve Requirement (a) with respect to each of the Series 2015A Bonds and the Series 2015B Bonds, is equal to the lesser of (i) 125 percent of the Average Annual Debt Service Requirement, (ii) the Maximum Annual Debt Service Requirement, and (iii) 10 percent of the stated principal amount and (b) with respect to Additional Bonds, is equal to an amount determined from time to time by the Consolidated Government as a reasonable reserve, if any, for the payment of principal of and interest on Bonds for which a subaccount in the Debt Service Reserve Fund is created or added to pursuant to a Supplemental Bond Resolution. The Series 2015A Subaccount of the Debt Service Reserve Fund securing the Series 2015A Bonds will not secure the Series 2015B Bonds, and the Series 2015B Subaccount of the Debt Service Reserve Fund securing the Series 2015B Bonds will not secure the Series 2015A Bonds. Any increase in the amount of the Debt Service Reserve Requirement resulting from the issuance of Additional Bonds which also are secured by an existing subaccount of the Debt Service Reserve Fund are required by the Bond Resolution to be funded upon the issuance and delivery of such Additional Bonds. The Bond Resolution requires that the balance of each subaccount of the Debt Service Reserve Fund be maintained at an amount equal to the Debt Service Reserve Requirement for the related Bonds (or such lesser amount that is required upon the failure of the Consolidated Government or the Aviation Commission to provide a substitute Reserve Account Credit Facility in certain events). -16- ATLANTA 5621272.6 The Debt Service Reserve Requirement for any Bonds may be satisfied in whole or in part by means of a Reserve Account Credit Facility, subject to restrictions provided in the Bond Resolution. Any such Reserve Account Credit Facility must be pledged to the benefit of the owners of all of the Bonds so secured. The Consolidated Government reserves the right, if it deems it necessary in order to acquire such a Reserve Account Credit Facility, to amend the Bond Resolution without the consent of any of the owners of the Bonds in order to grant to the Reserve Account Credit Facility Provider such additional rights as it may demand, provided that such amendment shall not, in the written opinion of Bond Counsel filed with the Consolidated Government, impair or reduce the security granted to the owners of Bonds or any of them. The Series 2015A Subaccount of the Debt Service Reserve Fund securing the Series 2015A Bonds will be fully funded upon the issuance of the Series 2015A Bonds in an amount equal to $__________* from moneys to be released from reserve funds held under the Prior Resolution. The Series 2015B Subaccount of the Debt Service Reserve Fund securing the Series 2015B Bonds will be fully funded upon the issuance of the Series 2015A Bonds in an amount equal to $__________* from moneys to be released from reserve funds held under the Prior Resolution. Operation and Maintenance Reserve Fund At the time of the issuance and delivery of the Series 2015 Bonds, there will be $________ on deposit in the Operation and Maintenance Reserve Fund, which is an amount equal to 60 days’ Expenses of Operation and Maintenance (the “Operating Reserve”). Thereafter, there will be deposited monthly to the Operation and Maintenance Reserve Fund an amount, if any, necessary to maintain a balance equal to the Operating Reserve as estimated by the Airport Finance Officer. Amounts held within the Operation and Maintenance Reserve Fund will be disbursed solely for the purposes of paying Expenses of Operation and Maintenance in the event there is insufficient money in the Revenue Fund to pay the same when due. Subordinate Securities Fund After all deposits are made as required by the Bond Resolution to the Revenue Fund, the Debt Service Reserve Fund, the PFC Revenue Fund, and the Operation and Maintenance Fund, the accounts within the Debt Service Fund, and the Operation and Maintenance Reserve Fund, there will be deposited sufficient moneys to be paid in periodic installments from the Revenue Fund into the Subordinate Securities Fund for the purpose of paying Subordinate Lien Bonds and Other Airport Obligations as they become due and payable. Such periodic installments are to be paid into the Subordinate Securities Fund in accordance with the terms of such Other Airport Obligations or as set forth in a Supplemental Resolution. In connection with the issuance of any Subordinate Lien Bonds or Other Airport Obligations, the Aviation Commission may place additional restrictions on the use of funds on deposit in the Subordinate Securities Fund, and may agree that such fund will be a trust fund. Capital Improvement Fund The Bond Resolution requires that moneys transferred into the Capital Improvement Fund be applied to the Capital Improvement Account and to the Revenue Credit Account at the discretion of the Aviation Commission. Moneys in the Revenue Credit Account will be transferred at the beginning of each Fiscal Year to the General Revenue Account of the Revenue Fund and applied for such Fiscal Year as a credit in the calculation of such fees and charges as determined by the Aviation Commission that are related to the Airport. All sums accumulated and retained in the Capital Improvement Account will be used first to prevent default in the payment of interest on or principal of any General Revenue Bonds when due and then will be applied by the Aviation Commission from time to time, to the following purposes and, prior to the occurrence and continuation of an Event of Default, in the order of priority determined by the Aviation Commission in its sole discretion: (a) for the purposes for which moneys held in the Revenue Fund may be applied under the Bond Resolution, (b) to pay any governmental charges and assessments against the Airport or any part thereof which may then be due and owing, (c) to make acquisitions, betterments, extensions, repairs, or replacements or other capital improvements (including the purchase of equipment) to the Airport deemed necessary by the Aviation Commission (including payments under contracts with vendors, suppliers, and contractors for the foregoing purposes), (d) for lawful Airport Purposes and (e) to acquire Senior Lien Bonds by redemption or by purchase in the open market in accordance with the terms and conditions of the Bond Resolution, which Senior Lien Bonds may be any of the Senior Lien Bonds, prior to their respective maturities, and when so used for such purposes the moneys will be withdrawn from the Capital Improvement Account and deposited into the related subaccounts of the Interest Account and the Principal Account for the Bonds to be so redeemed or purchased. The gross revenues derived by the Consolidated Government from the ownership and operation of the Airport may be used only in accordance with the provisions of the Bond Resolution described above and may not be transferred to either the General Fund or any other fund of the Consolidated Government. -17- ATLANTA 5621272.6 Rate Covenant Pursuant to the Bond Resolution, the Consolidated Government has covenanted and agreed at all times, acting by and through the Aviation Commission, to prescribe, fix, maintain, and collect rates, fees, and other charges for the services and facilities furnished by the Airport: (i) to provide for 100 percent of the Expenses of Operation and Maintenance and for the accumulation in the Operation and Maintenance Reserve Fund of the Operating Reserve; and (ii) such that the Amount Available to Pay Debt Service in each Fiscal Year: (a) will equal at least 125 percent of the Debt Service Requirement on all General Revenue Bonds for the Bond Year ending on the next January 1 and at least 100 percent of the debt service or other amounts payable on all Subordinate Lien Bonds and Other Airport Obligations payable from Net General Revenues and Pledged PFC Revenues then Outstanding for the year of computation, (b) will enable the Aviation Commission to make all required payments, if any, into the Debt Service Reserve Fund and the Rebate Fund, and on any Contract or Other Airport Obligation, and (c) remedy all deficiencies in required payments from the Revenue Fund from prior Fiscal Years; provided, this paragraph will not be contrued as requiring the Airport to impose passenger facility charges in excess of amounts permitted pursuant to the PFC Act. If the Consolidated Government, acting by and through the Aviation Commission, fails to prescribe, fix, maintain, and collect rates, fees, and other charges, or to revise such rates, fees, and other charges, in accordance with the Bond Resolution in any Fiscal Year, but the Aviation Commission, on behalf of the Consolidated Government, in the next Fiscal Year has promptly taken all available measures to revise such rates, fees, and other charges after consideration of recommendations from an Airport Consultant, there shall be no Event of Default with respect to any Supplemental Bond Resolution relating to Senior Lien Bonds as described in the Bond Resolution until the end of the second Fiscal Year following such failure to prescribe rates in accordance with the Bond Resolution and only then if Net General Revenues and Pledged PFC Revenues are less than the amount required by the Bond Resolution as described in the preceding paragraph. The rates, fees, and other charges will be classified in a reasonable manner to cover users of the services and facilities furnished by the Airport so that, as nearly as practicable, such rates, fees, and other charges will be uniform in application to all users falling within any reasonable class. Parity and Subordinate Lien Bonds Upon satisfaction of certain conditions, the Bond Resolution permits the Consolidated Government, for specified purposes, to issue additional revenue bonds without express limit as to principal amount, which will be equally and ratably secured on a parity basis with the Series 2015 Bonds under the Bond Resolution. See “SUMMARY OF THE BOND RESOLUTION - Additional Bonds” in Appendix B hereto. The Consolidated Government may issue additional parity bonds in the future to finance part of the cost of ongoing capital improvements to the Airport. The issuance of additional parity bonds may, for a period of time, dilute the security for the Series 2015 Bonds. Upon satisfaction of certain conditions, the Bond Resolution also permits the Consolidated Government to issue bonds or other obligations secured by the related Revenues that are junior and subordinate to the Bonds as to lien and right of payment. In the event Subordinate Lien Bonds are issued, amounts in the Subordinate Securities Fund will be used to pay such Subordinate Lien Bonds, unless such bonds are to be secured by Pledged PFC Revenues. In the event such Subordinate Lien Bonds are issued, payments from the PFC Revenue Fund to the PFC Capital Fund will be suspended and the amounts that otherwise would have been transferred to the PFC Capital Fund may be used to pay such Subordinate Lien Bonds. See “SUMMARY OF THE BOND RESOLUTION - Subordinate Lien Bonds” in Appendix B hereto. Limited Obligations The Series 2015 Bonds are special limited obligations of the Consolidated Government payable solely from the Pledged Revenues. The Series 2015 Bonds are not payable from and are not secured by a charge, lien, or encumbrance upon any funds or assets of the Consolidated Government other than the Pledged Revenues and the funds created and held under the Bond Resolution. The Series 2015 Bonds do not and will not constitute a debt or general obligation of the Consolidated Government or a pledge of the faith and credit or taxing power of the Consolidated Government. No governmental entity, including the Consolidated Government, is obligated to levy any tax for the payment of the Series 2015 Bonds. No recourse may be had against the General Fund of the Consolidated Government for the payment of the Series 2015 Bonds. The pledge of and lien on Pledged Revenues securing the Series 2015 Bonds do not create a legal or equitable pledge, charge, lien, or encumbrance upon any of the Consolidated Government’s property or income, receipts, or revenues, except the Pledged Revenues and the amounts on deposit in the funds held under the Bond Resolution. -18- ATLANTA 5621272.6 Remedies The Revenue Bond Law provides that the provisions of the Revenue Bond Law and the Bond Resolution constitute a contract between the Consolidated Government and the owners of the Bonds. For a description of the remedies available to owners of the Bonds under the terms of the Bond Resolution upon the occurrence of an Event of Default thereunder, see “SUMMARY OF THE BOND RESOLUTION - Events of Default and Remedies” in Appendix B hereto. In addition to the remedies set forth in the Bond Resolution, the Revenue Bond Law provides that the duties of the Consolidated Government, the Augusta-Richmond County Commission, and the officers of the Consolidated Government under the Revenue Bond Law and the Bond Resolution are enforceable by any owner of the Bonds by mandamus or other appropriate action or proceeding at law or in equity. The Revenue Bond Law also provides that in the event the Consolidated Government defaults in the payment of the principal or interest on any of the Bonds after the same becomes due, whether at maturity or upon call for redemption, and such default continues for a period of 30 days, or in the event the Consolidated Government or the Augusta-Richmond County Commission or the officers, agents, or employees of the Consolidated Government fail or refuse to comply with the essential provisions of the Revenue Bond Law or default in any material respect in the Bond Resolution, any holders of the Bonds shall have the right to apply in an appropriate judicial proceeding to the Superior Court of Richmond County or to any court of competent jurisdiction for the appointment of a receiver of the Airport, whether or not all Bonds have been declared due and payable and whether or not such holder is seeking or has sought to enforce any other right or to exercise any remedy in connection with the Bonds. Upon such application, the Superior Court, if it deems such action necessary for the protection of the bondholders, may appoint and, if the application is made by the holders of 25 percent in principal amount of the Bonds then outstanding, shall appoint a receiver of the Airport. The receiver so appointed under the Revenue Bond Law, directly or by his agents and attorneys, is required under the Revenue Bond Law to forthwith enter into and upon and take possession of the Airport. If the court so directs, the receiver may exclude the Consolidated Government, the Augusta-Richmond County Commission, and the Consolidated Government’s officers, agents, and employees, and all persons claiming under them, wholly from the Airport. Under the Revenue Bond Law, the receiver will have, hold, use, operate, manage, and control the Airport, in the name of the Consolidated Government or otherwise, as the receiver may deem best. Under the Revenue Bond Law, the receiver will exercise all the rights and powers of the Consolidated Government with respect to the Airport as the Consolidated Government itself might do. The receiver will maintain, restore, insure, and keep insured the Airport and from time to time will make all such necessary or proper repairs, as the receiver may deem expedient. Under the Revenue Bond Law, the receiver will establish, levy, maintain, and collect such fees, tolls, rentals, and other charges in connection with the Airport, as he deems necessary or proper and reasonable. Under the Revenue Bond Law, the receiver will collect and receive all revenues and will deposit the same in a separate account and apply the revenues so collected and received in such manner as the court shall direct. Notwithstanding the provisions of the Revenue Bond Law described above, the receiver has no power to sell, assign, mortgage, or otherwise dispose of any assets of whatever kind or character belonging to the Consolidated Government and useful for the Airport. The authority of any such receiver is limited to the operation and maintenance of the Airport. No court may have jurisdiction to enter any order or decree requiring or permitting the receiver to sell, assign, mortgage, or otherwise dispose of any such assets. The receiver must, in the performance of the powers conferred upon him, act under the direction and supervision of the court making such appointment and will at all times be subject to the orders and decrees of such court and may be removed by such court. Under the terms of the Revenue Bond Law, whenever all that is due upon the Bonds and interest thereon and upon any other notes, bonds, or other obligations and interest thereon having a charge, lien, or encumbrance on the revenues of the Airport and under any of the terms of the Bond Resolution has been paid or deposited as provided therein and whenever all defaults have been cured and made good and it appears to the court that no default is imminent, the court must direct the receiver to surrender possession of the Airport to the Consolidated Government. The same right of the holders of the Bonds to secure the appointment of a receiver exists upon any subsequent default as is provided in the Revenue Bond Law. If the Consolidated Government were to default on the Series 2015 Bonds, the realization of value from the pledge of the Pledged Revenues to secure the payment of the Series 2015 Bonds would depend upon the exercise of various remedies specified by the Bond Resolution and Georgia law (including the Revenue Bond Law). These remedies may require judicial actions, which are often subject to discretion and delay and which may be difficult to pursue. The enforceability of rights or remedies with respect to the Series 2015 Bonds may be limited by state and federal laws, rulings, and decisions affecting remedies and by bankruptcy, insolvency, or other laws affecting creditors’ rights or remedies heretofore or hereafter enacted. -19- ATLANTA 5621272.6 Section 36-80-5 of the Official Code of Georgia Annotated provides that no political subdivision created under the Constitution or laws of the State of Georgia shall be authorized to file a petition for relief from payment of its debts as they mature or a petition for composition of its debts under any federal statute providing for such relief or composition or otherwise to take advantage of any federal statute providing for the adjustment of debts of political subdivisions and public agencies and instrumentalities. Section 36-80-5 of the Official Code of Georgia Annotated also provides that no chief executive, mayor, board of commissioners, or other governmental officer, governing body, or organization shall be empowered to cause or authorize the filing by or on behalf of any political subdivision created under the Constitution or laws of the State of Georgia of any petition for relief from payment of its debts as they mature or a petition for composition of its debts under any federal statute providing for such relief or composition or otherwise to take advantage of any federal statute providing for the adjustment of debts of political subdivisions and public agencies and instrumentalities. Section 36-80-5 of the Official Code of Georgia Annotated does not constitute a statutory covenant with the owners of any Series 2015 Bonds and may be amended or repealed at any time without the consent of any owners of the Series 2015 Bonds. THE CONSOLIDATED GOVERNMENT Introduction The consolidated government of Augusta-Richmond County is a political subdivision created and existing under the laws of the State of Georgia and presently has as its formal or legal name “Augusta, Georgia.” The Consolidated Government was created on January 1, 1996 pursuant to Acts of the General Assembly of the State of Georgia (collectively the “Consolidation Act”) that authorized the consolidation of the municipal corporation known as “The City Council of Augusta” and the political subdivision known as “Richmond County, Georgia.” The Consolidation Act and the consolidation of the City and the County were separately approved by a majority of the qualified voters of the City and the County at an election held on June 20, 1995. On January 1, 1996, the Consolidated Government became a consolidated city-county government, with territorial limits covering all of what was formerly Richmond County. This geographic area is hereinafter referred to as “Richmond County.” The Cities of Blythe and Hephzibah, small communities with populations of approximately 708 and 3,972, respectively, still hold their own municipal charters within the consolidated territory. The relationship between the Consolidated Government and the Cities of Blythe and Hephzibah is similar to that of counties to municipalities located within the territorial limits of such counties. As a consolidated city-county government within the State of Georgia, the Consolidated Government has all of the governmental and corporate powers of both municipal corporations and counties under Georgia law. Under the terms of the Consolidation Act, the Augusta-Richmond County Commission may exercise and is subject to all of the rights, powers, duties, and obligations previously applicable to the governing authorities of the City and the County. Consolidation is intended to result in the removal of duplicate services formerly rendered by the City and County governments. As a result of consolidation, the Consolidated Government provides, under one management, public services throughout its territorial limits, which services would have been provided separately by the City and the County. The City was originally chartered in 1789 by the General Assembly of the State of Georgia, making it Georgia’s second oldest city. As a city, the Consolidated Government would rank as the second largest by population in the State of Georgia. The Consolidated Government is located in the central eastern portion of the State of Georgia on the south bank of the Savannah River, which is the Georgia-South Carolina state boundary, approximately 155 miles east of Atlanta, Georgia and 75 miles southwest of Columbia, South Carolina. Richmond County has a land area of approximately 325 square miles. At its highest point, Richmond County is situated at 520 feet above sea level. Richmond County is located on the Fall Line, which is the natural division of the Piedmont Plateau and the Coastal Plain of Georgia. Its physical features include rolling slopes in the north, transitioning to more level terrain in the south. Average rainfall is 43 inches per year, and average temperatures range from a high of 91 degrees in the summer to a low of 34 degrees in the winter. Consolidated Government Administration and Officials The form of government of the Consolidated Government is the municipal form of government. Under the Consolidation Act, the governing authority of the Consolidated Government is a board of commissioners designated as the Augusta-Richmond County Commission (the “Commission”). The Commission consists of a Mayor and ten commissioners. The members of the Commission serve terms of office of four years and until a successor is elected and qualified. All members of the Commission are full voting members, except for the Mayor, who has the right to vote only to create or break a tie vote on any matter. Under the terms of the Consolidation Act, seven members of -20- ATLANTA 5621272.6 the Commission constitute a quorum for the transaction of ordinary business, and an affirmative vote of at least six members is required for the Commission to take action. For the purpose of electing members of the Commission, Richmond County is divided into ten commission districts. Each commissioner is elected by the voters residing within such commissioner’s commission district. Commission district 9 encompasses all of commission districts 1, 2, 4, and 5. Commission district 10 encompasses all of commission districts 3, 6, 7, and 8. No person will be eligible to serve as a commissioner unless he or she: (1) has been a resident of the commission district from which elected for a period of one year immediately prior to the date of the election, (2) continues to reside within the commission district from which elected during his or her term of office, (3) is a registered and qualified elector of Richmond County, and (4) meets the qualification standards required for members of the Georgia House of Representatives. No person who has served two consecutive full four-year terms of office as commissioner will again be eligible to hold office as commissioner until after the expiration of four years from the conclusion of that person’s last term of office as commissioner. The Mayor is the chief executive officer of the Consolidated Government and is elected on a county-wide basis by the voters of the entire county. No person will be eligible to serve as Mayor unless he or she (1) has been a resident of Richmond County for a period of one year immediately prior to the date of the election, (2) continues to reside within Richmond County during his or her term of office, (3) is a registered and qualified elector of Richmond County, and (4) meets the qualification standards required for members of the Georgia House of Representatives. No person who has served two consecutive full four-year terms of office as Mayor will again be eligible to hold office as Mayor until after the expiration of four years from the conclusion of that person’s last term of office as Mayor. Under the Consolidation Act, the Mayor presides at all meetings of the Commission, but has no power to veto ordinances, resolutions, or other actions of the Commission. Information concerning the current Mayor and commissioners is set forth below: Name and Office Held Expiration of Term Principal Occupation Hardie Davis, Jr., Mayor December 31, 2018 Full-Time Mayor William Fennoy, District 1 December 31, 2016 Retired Dennis Williams, District 2 December 31, 2018 School Development Director Mary Davis, District 3 December 31, 2016 Retired Sammie Sias, District 4 December 31, 2018 Retired Bill Lockett, District 5 December 31, 2016 Retired Ben Hasan, District 6 December 31, 2018 Nonprofit Development Director Sean Frantom, District 7 December 31, 2016 Business Owner Wayne Guilfoyle, District 8 December 31, 2018 Business Owner Marion Williams, District 9 December 31, 2016 Pastor Grady Smith, District 10, Mayor Pro Tempore December 31, 2018 Business Owner Janice Jackson has been the Administrator of the Consolidated Government since November 2014. Prior to her appointment as Administrator, Ms. Allen owned her own consulting business in Charlotte, North Carolina. Previously she served as the General Manager for Mecklenburg County, North Carolina and as the City Manager for Albany, Georgia. She is a graduate of the College of William and Mary and holds a Master’s degree in Public Policy from Duke University. Donna Williams, C.G.F.M, has been the Director of Finance of the Consolidated Government since November 2007. She has been employed by the County and the Consolidated Government for approximately 30 years and served as the Assistant Director of Finance from 1984 until she assumed the position of Interim Director of Finance on March 1, 2006 and the position of Director of Finance on November 8, 2007. Ms. Williams earned a Certified Governmental Financial Manager certificate in 1997 and received a B.B.A. degree in Accounting from Augusta State University in 1979. -21- ATLANTA 5621272.6 THE AVIATION COMMISSION Introduction The Consolidated Government by ordinance established the Augusta Aviation Commission as a board to take charge of the Airport. The Aviation Commission manages and operates the Airport for the Consolidated Government. The Aviation Commission is not a legal entity separate and independent of the Consolidated Government. The Consolidated Government, in the ordinance establishing the Aviation Commission, authorized the Aviation Commission to enter into contracts with respect to the Airport on behalf of the Consolidated Government, subject to the approval of the Augusta-Richmond County Commission for any contract with a term exceeding one year. The Aviation Commission operates from offices separate from the Consolidated Government’s administration building, which are located at the Airport. Aviation Commission Administration and Officials The Aviation Commission consists of twelve members who are appointed for staggered four-year terms of office. In addition, the Mayor of the Commission serves as an ex-officio member of the Aviation Commission. Each of the ten commissioners of the Consolidated Government appoints a member of the Aviation Commission to represent each of the ten commissioner districts of the Consolidated Government. The Richmond County legislative delegation appoints two members of the Aviation Commission. Members of the Aviation Commission are required to be citizens of Richmond County who have had at least ten years of business experience and have manifested some interest in the advancement of aviation. The Aviation Commission holds regular meetings on a monthly basis. Information concerning the current members of the Aviation Commission is set forth below: Name and Office Held Expiration of Term Principal Occupation Cedric J. Johnson, Chairman March 31, 2018 Businessman Randy Sasser, Vice Chairman March 31, 2017 Territorial Director, Dallas Airmotive Davis H. Beman2 March 31, 2015 Commercial Real Estate Frank Bowman March 31, 2019 Retired Paulette Curry2 March 31, 2013 Logistics James Germany March 31, 2017 Charles July March 31, 2017 Retired Rev. Karlton Howard March 31, 2018 Pastor Doug Lively2 March 31, 2015 Independent Insurance Agent Willa Hilton March 31, 2019 Businesswoman Grey B. Murray March 31, 2017 Business Owner Sammie Sias3 Ex Officio Retired ________________________ 1 There is currently one vacancy on the Aviation Commission. 2 Serving until successor is appointed. 3 Sammie Sias is the designee of the Mayor, who serves as an ex-officio member of the Aviation Commission. Under the ordinance establishing the Aviation Commission, the Aviation Commission is required to employ an Airport Manager responsible for the supervision and control of the Airport. The Airport Manager has duties to enforce all rules and regulations prescribed by the Aviation Commission and to maintain the Airport in good condition. The Airport Manager serves at the will of the Aviation Commission. Roy A. Williams, has been the Airport Manager of the Airport since January 2015 and serves in this position under the title “Executive Director.” From 2007 through 2014, Mr. Williams worked as a consultant to support airport operators and bidders on airport management issues, including privatizations, in the United States and abroad. Prior to that, he held positions as the Executive Director of the Salt Lake City International Airport (SLC) and the Executive Director of the Louis Armstrong New Orleans International Airport (MSY). Mr. Williams received a Bachelor of Arts Degree in Economics from Harvard University and a law degree from Georgetown University. Risa Akiyama Bingham, CPA, has been the Director of Finance of the Airport since May 2012. She was initially employed by the Airport in September 2011 as the Senior Finance Manager and in January 2012 was appointed as Interim Finance Director of the Airport. From 2008 to 2011, Mrs. Bingham was employed by Serenity Behavioral Health Systems as Chief Financial Officer. From 2005 to 2007, she was employed by Ronlyn Food -22- ATLANTA 5621272.6 Services as Budget Analyst as the DoD Contractor. From 2000 to 2005, Mrs. Bingham was employed by the Consolidated Government as an Accountant/Financial Analyst. Mrs. Bingham received a Bachelor of Art degree in Social Work from Sophia University in 1988, a Bachelor of Science degree in Management from Hawaii Pacific University in 1990, and Master Business Administration degree from Brenau University in 2005. Mrs. Bingham acquired a Certified Public Accountant (CPA) licensure by the Georgia Board of Accountancy in 2007. THE AIRPORT Introduction The Revenue Bond Law authorizes the Consolidated Government to acquire and operate airports for users within and outside its territorial boundaries. The Airport is located on the site of a former military facility established in 1941 by the U.S. War Department. It was known as the Georgia Aero Flying School and was a flight training school developed to support the United States’ military build-up prior to World War II. The United States government transferred the facility, then known as “Bush Field,” to the City in 1948, and the City established the Augusta Aviation Commission and opened the facility as the City’s commercial airport in 1950. In 2000, Bush Field was renamed “Augusta Regional Airport at Bush Field” to reflect its representation as the primary airport serving the Central Savannah River Area. The consolidation of the governments of the City and the County vested ownership and operation of the Airport with the Consolidated Government. The Aviation Commission operates the Airport as a department of the Consolidated Government. The Consolidated Government also owns Daniel Field, a general aviation airport located approximately seven miles from the Airport. Daniel Field is operated by an appointed commission separate and apart from the Aviation Commission. Airport Facilities General The Airport occupies approximately 1,248 acres of land in the territorial limits of the Consolidated Government and in Aiken County, South Carolina. The Airport is located approximately seven miles south of downtown Augusta. Throughout most of its history, the Airport used many of the original facilities from the Airport’s previous use as a military facility, including three original structures that were joined to form the Airport’s original terminal. In order to improve the Airport, the Aviation Commission has made significant improvements to the Airport over the years. By the close of the 1960s, the Aviation Commission had doubled the Airport’s baggage claim area and had added a tower, a lobby, a hotel, parking meters, and a second runway. The Aviation Commission constructed two separate holdrooms in 1973 and a new administration suite in 1987. In the 1990s, the Aviation Commission demolished two hotel buildings, constructed two short-term parking lots, and made loop road and access improvements. In 2002, the Aviation Commission completed the first-ever master plan for economic growth and development at and around the Airport. The master plan included plans for the acquisition, construction, and installation of a new airline passenger terminal to replace the original airline passenger terminal and certain other capital improvements for the Airport. The construction program for these improvements consisted of the demolition, in phases, of the existing airline passenger terminal facility and the construction, also in phases, of a new airline passenger terminal facility. The new airline passenger terminal facility and other related improvements were completed in 2008. Since opening the new passenger terminal, the Aviation Commission has continued to upgrade the Airport in accordance with the master plan. Airfield The major airfield facilities consist of two intersecting air carrier runways of concrete and asphalt construction and associated taxiways. The primary runway is approximately 8,000 feet long and 150 feet wide. The secondary runway is approximately 6,000 feet long and 75 feet wide and is used primarily for crosswind operations. The runways provide operational facilities to cover varying wind conditions and are connected by a system of taxiways and aprons. In addition, the primary runway approach is equipped from each direction with high-intensity runway lighting, centerline lighting, an instrument landing system, a localizer and glide slope indicator, a visual approach -23- ATLANTA 5621272.6 slope indicator, and runway end identified lights, which permit continuous operation under almost all weather conditions. The boundaries of the Airport provide sufficient clear area for runway approaches to meet the requirements of the Federal Aviation Administration (the “FAA”). The taxiway system at the Airport consists of two partial-length taxiways and one full-length taxiway, parallel to the two air carrier runways, and four exit taxiways. Passenger Terminal The airline passenger terminal, which was completed in 2008, is an approximately 97,000 square foot building consisting of approximately 80,500 square feet of ground floor space and approximately 13,000 square feet of second floor space. The terminal consists of airline ticketing counters containing approximately 18 ticket agent positions, a baggage claim/handling area, passenger waiting areas, rental car counters, a coffee shop/snack shop, a gift shop, a restaurant/lounge, a military hospitality suite, and Airport, airline, and Transportation Security Administration (“TSA”) administrative offices. Landscaped courtyards are located between the secured and non-secured areas of the terminal. The terminal has six aircraft gates utilized for passenger loading. The baggage handling system at the terminal consists of two outbound baggage conveyors, the baggage make-up area, and the baggage claim area. There are no curbside check-in facilities. Apron Areas The apron areas are used for aircraft parking and passenger loading and unloading. The Airport aprons are constructed of concrete/asphalt, asphalt, and perforated steel planking (“PSP”) tied down with stakes. The apron referred to as the Airline Apron is located east of the passenger terminal building, serves airline and commuter aircraft, and contains approximately 50,000 square yards and six aircraft parking positions corresponding to Gates 1 through 6. The Air Cargo Apron contains approximately 2,800 square yards. General aviation aircraft use the parking apron south of the terminal building, which contains 91,485 square yards and 38 aircraft tiedown positions, and an approximately 22,300-square-yard apron located south of the control tower. The Helicopter Apron, containing approximately 5,500 square yards, and a PSP apron, containing approximately 40,200 square yards, are used for fixed-wing aircraft when aircraft parking requirements exceed the permanent apron capacity, most notably during the Masters Golf Tournament. Garrett Aviation Services, Inc., the largest commercial business at the Airport, leases three aprons containing approximately 25,000 square yards and exclusively uses a taxilane. Parking Facilities Approximately 1,589 parking spaces are provided on Airport property in surface lots adjacent to or within walking distance of the terminal building. The parking facilities consist of a short-term lot containing 204 parking spaces, two long-term economy lots containing 826 parking spaces, a lot containing 166 parking spaces providing for payment by credit card, an elite rewards lot containing 39 premium parking spaces, a lot shared by rental car companies containing 208 rental car ready-and-return parking spaces, and a lot serving the general aviation terminal and Airport employees containing 146 parking spaces. Additional parking areas are provided for corporate hangars, airport support facilities, and commercial facilities. General Aviation Facilities The general aviation facilities include an approximately 14,000 square foot general aviation terminal building completed in 2012 with updated flight planning and crew areas, conference rooms, amenities for passengers and catering facilities, and a VIP lounge. The general aviation facilities also include public and private aircraft parking, two public use hangars, one private hangar, and vehicle parking. The Fixed Base Operations facility and aviation support businesses in this area provide a wide range of general aviation services, including aircraft fueling, airframe and engine repair, ramp parking and tie downs, ground handling, hangar storage, pilots’ lounge, and avionics repair. Airport Support Facilities The Airport support facilities include an FAA traffic control tower, fuel storage facilities, aircraft rescue and firefighting station, and Airport operations and maintenance facilities. Air Trade Area General The Airport is primarily an origin and destination airport, and most passengers are traveling to or from the Airport’s general service area and not simply connecting through the Airport to other destinations. The Airport’s general service area (the “Air Trade Area”) encompasses 15 counties located in Georgia and South Carolina, centered on Augusta, Georgia, with a total population of 664,900 according to the 2010 Census of the U.S. -24- ATLANTA 5621272.6 Department of Commerce, Bureau of the Census. The Airport’s primary Air Trade Area is comprised of the six counties that constitute the Augusta-Richmond County GA-SC Metropolitan Statistical Area (the “Augusta MSA”), namely Burke, Columbia, McDuffie, and Richmond Counties, Georgia and Aiken and Edgefield Counties, South Carolina. The Airport’s secondary Air Trade Area is comprised of Lincoln, Wilkes, Taliaferro, Warren, Glascock, Jefferson, and Jenkins Counties, Georgia and Barnwell and McCormick Counties, South Carolina. Approximately 87% of the population of the Air Trade Area resides in the six counties comprising the Augusta MSA and approximately 87% of the population of the Augusta MSA resides in Richmond, Columbia, and Aiken Counties. The following map indicates the primary and secondary Air Trade Area. -25- ATLANTA 5621272.6 Demographic Information Set forth below is selected demographic data for Richmond, Columbia, and Aiken Counties and the Augusta MSA. Counties Augusta MSA Richmond (Ga.) Columbia (Ga.) Aiken (S.C.) 2014 Population1 201,368 139,257 164,753 580,230 2010 Population1 200,549 124,053 160,099 564,873 2000 Population1 199,775 89,288 142,552 447,441 1990 Population1 189,719 66,031 120,940 415,184 2013 Per Capita Income2 $31,683 $43,739 $35,047 $35,625 2013 Median Household Income3 $37,749 $69,306 $44,509 n/a 2013 Mean Household Income3 $51,380 $87,167 $60,728 n/a 2013 Median Age1 33.2 36.7 40.3 n/a ________________________ Sources: 1 U.S. Department of Commerce, Bureau of the Census. All population figures for years other than 2010, 2000, and 1990 are estimates by the U.S. Department of Commerce, Bureau of the Census. 2 U.S. Department of Commerce, Bureau of Economic Analysis. 3 United States Census Bureau, 2013 American Community Survey 1-Year Estimates. 2010 Population by Counties Age Group Richmond (Ga.) Columbia (Ga.) Aiken (S.C.) Under 20 56,572 37,165 41,205 20-44 71,374 39,937 49,801 45-64 49,891 34,251 33,259 65+ 22,712 12,700 18,287 Total 200,549 124,053 142,552 ________________________ Source: U.S. Department of Commerce, Bureau of the Census. -26- ATLANTA 5621272.6 Economic Information The following information is provided to give prospective investors an overview of the general economic conditions in Richmond, Columbia, and Aiken Counties and the Augusta MSA. These statistics have not been adjusted to reflect economic trends and are not to be relied upon as a representation or guarantee of the Consolidated Government. Following is a table showing the percentage of the 2013 payroll distribution in Richmond, Columbia, and Aiken Counties for each major sector of the local economy. Percentage of 2013 Payroll Distribution by Sector Counties Industry Richmond (Ga.) Columbia (Ga.) Aiken (S.C.) Forestry, Fishing, Hunting, and Agriculture Support n/a % n/a % 0.16% Mining 0.15 n/a 0.22 Utilities n/a n/a n/a Construction 3.15 8.31 7.41 Manufacturing 13.12 17.37 18.87 Wholesale Trade 3.28 13.93 1.04 Retail Trade 7.22 16.48 6.91 Transportation and Warehousing 3.55 1.16 3.57 Information 3.08 1.13 1.10 Finance and Insurance 3.82 4.39 2.35 Real Estate and Rental and Leasing 1.32 1.33 0.56 Professional, Scientific, and Technical Services 7.05 6.45 n/a Management of Companies and Enterprises 1.80 0.55 n/a Administrative, Support, Waste Management, and Remediation Services 5.65 4.31 23.83 Educational Services 1.03 1.07 0.51 Health Care and Social Assistance 37.32 11.83 9.69 Arts, Entertainment, and Recreation 1.25 1.00 0.68 Accommodation and Food Services 4.06 5.86 2.81 Other Services 2.54 3.95 1.80 Unclassified Establishments 0.76 0.88 18.49 Total 100.00% 100.00% 100.00% ________________________ Source: U.S. County Business Patterns, U.S. Department of Commerce, Bureau of the Census. Data not available where indicated by “n/a.” -27- ATLANTA 5621272.6 Set forth below are the largest employers located in Richmond, Columbia, and Aiken Counties, as of the dates shown, their industries, and their approximate number of employees. There can be no assurance that any employer listed below will continue to be located in the county shown or will continue employment at the level stated. No independent investigation has been made of, and no representation can be made as to, the stability or financial condition of the companies listed below. [ADD AUGUSTA AS AN EMPLOYER] Largest Employers in Richmond County (Ga.) as of December 31, 2014 Employer Industry Employees U.S. Army Signal Center and Fort Gordon1 Military 24,000 Georgia Regents University Education 4,656 Richmond County School System Education 4,431 University Hospital Healthcare 3,200 Georgia Regents Health System Healthcare 3,054 East Central Regional Hospital Healthcare 1,488 E-Z-GO Textron Golf Cart Manufacturer 1,277 Veterans Administration Hospital Healthcare 1,233 Doctors Hospital Healthcare 1,210 Covidien Disposable Medical Supplies 850 ________________________ Source: Augusta Economic Development Authority. 1 Includes military and civilian employees. Largest Employers in Columbia County (Ga.) as of January 2015 Employer Industry Employees Columbia County Board of Education Education 2,984 Columbia County Government 1,100 Club Car Golf, Utility, Transportation Vehicles 750 John Deere Farm machinery and Equipment 500 Quad Graphics Tradebinding 500 GIW Industries Sluree Pumps 440 Augusta Sportswear Athletic Clothing 300 Augusta Staffing Employment Placement 300 Urban Outfitters Distribution and Call Center 230 Kelly Services Employment Placement 223 ________________________ Source: Augusta Economic Development Authority. Largest Employers in Aiken County (S.C.) as of October 2014 Employer Industry Employees Savannah River Nuclear Solutions, LLC Nuclear Processing 4,704 Aiken County Public Schools Education 3,199 Bridgestone Americas Tire Operations Tires 1,595 Savannah River Remediation, LLC Design and Construction 1,541 Aiken Regional Medical Centers Health Care 1,237 Kimberly-Clark Corporation Consumer Paper Products 1,167 Aiken County Government Government 970 WSI-SRS Savannah River Site Security Systems 685 Wal-mart Associates, Inc. Retail 653 Shaw Industries Textiles 612 ________________________ Source: Greater Aiken Chamber of Commerce. -28- ATLANTA 5621272.6 Set forth below are labor statistics for Richmond, Columbia, and Aiken Counties and the Augusta MSA for past five years, with comparative data for their respective states. 2010 2011 2012 2013 2014 Richmond County (Ga.) Employment 78,209 78,543 78,988 78,341 78,219 Unemployment 9,678 9,966 9,389 7,436 8,522 Total Labor Force 87,887 88,509 88,377 85,777 86,741 County Unemployment Rate 11.0% 11.3% 10.6% 8.7% 9.8% Columbia County (Ga.) Employment 57,027 58,655 60,141 61,481 61,339 Unemployment 4,495 4,662 4,511 3,860 4,261 Total Labor Force 61,522 63,317 64,652 65,341 65,600 County Unemployment Rate 7.3% 7.4% 7.0% 5.9% 6.5% State of Georgia Unemployment Rate 10.5% 10.2% 9.2% 8.2% 7.2% Aiken County (S.C.) Employment 65,641 66,376 66,439 66,837 67,996 Unemployment 6,729 6,740 6,166 5,370 4,673 Total Labor Force 72,370 73,116 72,605 72,207 72,669 County Unemployment Rate 9.3% 9.2% 8.5% 7.4% 6.4% State of South Carolina Unemployment Rate 11.2% 10.5% 9.2% 7.6% 6.4% Augusta MSA Employment 230,830 233,436 234,982 235,531 237,255 Unemployment 24,851 25,371 23,789 21,494 18,798 Total Labor Force 255,681 258,807 258,771 257,025 256,053 Unemployment Rate 9.7% 9.8% 9.2% 8.4% 7.3% ________________________ Source: State of Georgia Department of Labor; South Carolina Department of Employment and Workforce. According to the State of Georgia Department of Labor, the preliminary March 2015 unemployment rate for Richmond County was 7.4 percent and for Columbia County was 5.0 percent, compared to 5.7 percent for the Augusta MSA and compared to 6.2 percent for the State of Georgia. According to the State of South Carolina Employment Security Commission, the seasonally unadjusted March 2015 unemployment rate for Aiken County was 6.0 percent, compared to 6.7 percent for the State of South Carolina. Total Deposits in Financial Institutions as of June 30 (in Millions) Year Richmond (Ga.) Columbia (Ga.) Aiken (S.C.) 2014 $3,252 $1,775 $1,857 2013 3,164 1,842 1,902 2012 3,129 1,822 1,870 2011 3,145 1,599 1,894 2010 3,024 1,604 1,934 ________________________ Source: Federal Deposit Insurance Corporation. According to the Federal Deposit Insurance Corporation, as of June 30, 2014, Richmond County had 13 financial institutions with a total of 44 branch offices, Columbia County had 12 financial institutions with a total of 30 branch offices, and Aiken County had 10 financial institutions with a total of 35 branch offices. -29- ATLANTA 5621272.6 Competition The Airport historically has experienced a high amount of passenger diversion to nearby competing airports. The Airport’s primary competition comes from Hartsfield-Jackson Atlanta International Airport (the “Atlanta Airport”), the nearest large-hub airport, due to its proximity to Augusta and its provision of frequent nonstop service to hundreds of destinations at a wide range of airfares. The Atlanta Airport is located approximately 160 miles west of the Airport and is the principal air carrier airport in Georgia and the southeastern United States. It serves as a primary connecting or transfer point in the national air transportation system. The Atlanta Airport has been designated as the busiest airport in the world by passenger count in every year since 2000 according to each annual report of Airports Council International. Airports Council International reported that approximately 94.43 million passengers were enplaned and deplaned at the Atlanta Airport during 2013. The Airport’s competition also comes from Columbia (South Carolina) Metropolitan Airport, which is approximately 70 miles northeast of the Airport, and, to a lesser extent, the Charleston (South Carolina) International Airport, which is approximately 160 miles east of the Airport, and the Savannah/Hilton Head International Airport, which is approximately 175 miles southeast of the Airport. The competition from these airports arises primarily from airfares, which can be lower on some but not all flights at the competing airports. Airlines Providing Service Delta Air Lines and US Airways presently provide scheduled passenger service at the Airport. Set forth below is the historical airline market share, based on enplanements, for the airlines providing service at the Airport for calendar years 2010 through 2014 and for the four months ended April 30, 2015. Historical Airline Market Shares Years Ended December 31 Four Month Period Ended April 30, 2015 2010 2011 2012 2013 2014 Air Carrier1 Delta Air Lines 56.9% 54.7% 59.5% 59.8% 59.4% 59.2% US Airways2 35.6 35.8 39.0 39.0 39.8 39.8 American Eagle3 6.0 8.8 0.6 --- --- --- Others 1.5 0.7 0.9 1.2 0.8 1.0 Total 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% ________________________ 1 Includes service provided by the named airline either by its mainline service or through regional operating subsidiaries or affiliates. 2 On December 9, 2013, AMR Corporation, the parent of American Airlines, and US Airways Group, Inc., the parent of US Airways, merged by forming American Airlines Group, Inc. American Airlines Group, Inc. is now the holding company for American Airlines, US Airways, and a number of its regional operating subsidiaries. On April 8, 2015, the FAA officially granted a single operating certificate for both carriers, meaning that US Airways and American Airlines are now regulated as one carrier. American Airlines Group, Inc. recently announced that it will retire the US Airways brand as of October 17, 2015 and, as of that date, the merged airline will operate as one carrier under the American Airlines name. 3 American Eagle, which is affiliated with American Airlines Group, Inc., began service June 10, 2010 and ended January 30, 2012. Source: Airport records from airline reports and airline websites. For more information regarding the airlines providing service at the Airport, see “INVESTMENT CONSIDERATIONS - Importance of Delta and US Airways at the Airport” herein. Availability of Information Concerning Individual Airlines Certain of the airlines (or their respective parent corporations) are subject to the information reporting requirements of the Securities Exchange Act of 1934, and, in accordance therewith, file reports and other -30- ATLANTA 5621272.6 information with the Securities and Exchange Commission (the “SEC”). Certain information, including financial information, concerning such airlines (or their respective parent corporations) is disclosed in reports and statements filed with the SEC. Such reports and statements can be inspected and copies obtained at prescribed rates at the SEC’s principal offices at 450 Fifth Street, N.W., Washington, D.C. 20549, and should be available for inspection and copying at the SEC’s regional offices located at 233 Broadway, New York, New York 10279, and 500 W. Madison Street, Suite 1400, Chicago, Illinois 60661. The SEC maintains a website at www.sec.gov containing reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC. In addition, each domestic airline is required to file periodic reports of financial and operating statistics with the U.S. Department of Transportation (the “DOT”). Such reports can be inspected at the Office of Aviation Information Management, Data Requirements and Public Reports Division, Research and Special Programs Administration, Department of Transportation, 400 7th Street, S.W., Washington, D.C. 20590, and copies of such reports can be obtained from the DOT at prescribed rates. Neither the Consolidated Government nor the Underwriter undertake any responsibility for or make any representation as to the accuracy or completeness of (i) any reports and statements filed with the SEC or the DOT, or (ii) any material contained on the SEC’s website as described in the preceding paragraph, including, but not limited to, updates of information on the SEC’s website or links to other internet sites accessed through the SEC’s website. Airlines owned by foreign governments or foreign corporations operating airlines (unless such foreign airlines have American Depository Receipts registered on a national exchange) are not required to file information with the SEC. Airlines owned by foreign governments or foreign corporations file limited information only with the DOT. Aviation Activity The Airport is classified by the FAA as a non-hub airport based on its percentage of nationwide enplanements. Set forth below is historical enplanements at the Airport for calendar years 2005 through 2014 and for the four months ended April 30, 2014 and 2015. Historical Enplaned Passengers Year Enplaned Passengers Percent Change 2005 161,162 --- % 2006 140,987 (12.52) 2007 160,103 13.56 2008 180,159 12.53 2009 202,908 12.63 2010 250,761 23.58 2011 272,851 8.81 2012 279,242 2.34 2013 270,805 (3.02) 2014 269,902 (0.33) Four-Month Periods Ended April 30 Enplaned Passengers Percent Change 2014 88,903 --- % 2015 90,889 2.23 Compound Annual Growth Rate 2005-2014 5.29% 2010-2014 1.48 ________________________ Source: Airport records from airline reports. -31- ATLANTA 5621272.6 Set forth below is historical aircraft operations at the Airport for calendar years 2010 through 2014 and for the four months ended April 30, 2014 and 2015. Historical Aircraft Operations Year Air Carrier Air Taxi General Aviation Military Total 2010 574 12,471 14,591 2,568 30,204 2011 922 12,827 13,502 1,718 28,969 2012 1,294 12,001 12,549 2,016 27,860 2013 1,645 11,919 11,605 1,783 26,952 2014 2,360 9,703 11,621 2,273 25,957 Four-Month Periods Ended April 30 Air Carrier Air Taxi General Aviation Military Total 2014 658 4,249 4,777 804 10,488 2015 942 3,967 4,721 516 10,146 ________________________ Source: FAA OPSNET Reports. Aircraft landed weight at the Airport (expressed in 1,000 pound units), which is used to calculate landing fees, is recorded according to the aircraft’s certificated maximum gross landing weight, as approved by the FAA. Set forth below is historical landed weight at the Airport for calendar years 2010 through 2014 and for the four months ended April 30, 2014 and 2015. Historical Landed Weight (1,000 pound units) Year Passenger Airlines Percent Change 2010 278,581 --- % 2011 301,325 8.16 2012 308,202 2.28 2013 321,687 4.38 2014 307,712 (4.34) Four-Month Periods Ended April 30 Passenger Airlines Percent Change 2014 103,418 --- % 2015 104,791 1.33 Compound Annual Growth Rate 2010-2014 1.82% ________________________ Source: Airport records from airline reports. -32- ATLANTA 5621272.6 Origin and Destination Information As of July 1, 2015, daily nonstop service from the Airport is provided to two cities, Atlanta and Charlotte, with a total of 13 daily flights, including six daily nonstop flights to Atlanta and seven daily nonstop flights to Charlotte. The Airport serves primarily short- to medium-haul domestic origin and destination (“O&D”) markets. Domestic O&D passengers accounted for 100 percent of the total scheduled passengers at the Airport in 2014, with an average stage length (i.e., passenger trip distance) of 907 miles in 2014. The Airport’s average stage lengths reflect the Airport’s geographical location and strong local demand for major eastern (i.e., New York, Washington, and Boston), midwestern (i.e., Chicago), and western (i.e., Dallas, Las Vegas, and Los Angeles) markets. Set forth below is the Airport’s top 20 O&D enplaned passenger markets for calendar year 2014. Top 20 Domestic O&D Airports For the Year Ended December 31, 2014 Destination Distance (in miles) Number of Passengers Percent of Total Passengers Washington (DCA) 468 19,566 4.1% Baltimore (BWI) 497 19,383 4.0 New York (LGA) 678 15,592 3.2 Dallas (DFW) 874 14,050 2.9 Chicago (ORD) 677 12,354 2.6 Detroit (DTW) 615 11,670 2.4 Los Angeles (LAX) 2,090 11,564 2.4 Las Vegas (LAS) 1,889 11,092 2.3 Boston (BOS) 861 11,023 2.3 Newark (EWR) 663 10,677 2.2 Denver (DEN) 1,334 9,634 2.0 Kansas City (MCI) 820 9,124 1.9 Philadelphia (PHL) 583 8,773 1.8 Minneapolis (MSP) 996 8,654 1.8 San Antonio (SAT) 1,009 8,610 1.8 Pittsburgh (PIT) 501 8,531 1.8 Houston (IAH) 821 8,462 1.8 Seattle (SEA) 2,306 8,421 1.7 Fort Lauderdale (FLL) 514 8,383 1.7 Tampa (TPA) 373 8,336 1.7 All Other --- 258,789 53.6 Total --- 482,688 100.0% ________________________ Source: United States Department of Transportation Origin and Destination Survey; Mileage from Diio March 2015. -33- ATLANTA 5621272.6 Airline and Other Revenue Sources General The Consolidated Government, by and through the Aviation Commission, has entered into, and receives payments under, agreements and informal arrangements with airlines and other parties, including lease and use agreements relating to landing fees and the leasing of space in the terminal building at the Airport, other building and miscellaneous leases relating to the leasing of hangar facilities at the Airport, concession agreements relating to the sale of goods and services at the Airport, and parking and car rental agreements. In addition, the Aviation Commission conducts limited fixed base operations at the Airport that is a source of non-airline revenues for the Airport. Airline Agreements The Aviation Commission entered into separate but substantially identical Airline Operating Agreements and Terminal Building Leases (each an “Airline Agreement”), dated September 26, 2013, as amended, with Delta Air Lines, Inc. and American Airlines, Inc. as successor to U.S. Airways, Inc. (each a “Signatory Airline”). The initial term of each Airline Agreement is for three years and expires on September 25, 2016, subject to two renewal terms of one year each. The Airline Agreements set forth the business arrangement between the Airport and the Signatory Airlines including, but not limited to, use of space in the Airport’s terminal building; terminal building rental charges, loading bridge use fees, aircraft parking position rental charges, and landing fees applicable to the Signatory Airlines; provisions for airline approval of certain capital improvement projects; insurance, indemnification, environmental compliance; maintenance of Airport facilities; the Aviation Commission’s rate setting mechanisms; and provisions for the termination of an Airline Agreement by a party due to certain actions or inactions of the other party. Under the Airline Agreements, the Signatory Airlines lease space in the terminal building designated as Exclusive Use Space, including space designated for a Signatory Airline’s administrative offices, operations offices, ticket counter, customer relations, lost and found, ramp storage, baggage service, baggage make up space, and bag claim offices. Under the Airline Agreements, the Signatory Airlines lease non-exclusive space in the terminal building designated as Preferential Use Space, including hold room space, waiting areas for passengers, and checking in passengers. Under the Airline Agreements, the Signatory Airlines lease non-exclusive space in the terminal building designated as Joint Use Space used for inbound passenger baggage claim. Under the Airline Agreements, the Signatory Airlines agree to pay rentals, charges, and landing fees for its use of the terminal building, loading bridges, aircraft parking positions, and the airfield areas. Generally, rates are established and adjusted annually based on direct and indirect expenses allocable the space used by the airlines, including operation and maintenance expenses, annual debt service requirements, and other expenses reasonably allocable to the space. Under the Airline Agreements, the Signatory Airlines make payments monthly for amounts due to the Aviation Commission on account of rentals and fees incurred. Each Airline Agreement requires that the Signatory Airline provide security in the form of a contract bond, letter of credit, or other similar security equal to three months estimated monthly rentals and fees should the Signatory Airline fail to pay rentals and fees when due three times within any 12-month period. Upon a termination, expiration, or non-renewal of an Airline Agreement, the Signatory Airline would have to vacate and cease operations at the Airport, continue operating at the Airport as a non-signatory airline, or operate as may otherwise be agreed to by the Aviation Commission and the respective Signatory Airline. In the event either Airline Agreement were to expire or terminate, the Consolidated Government possesses the authority to impose rates and charges by ordinance. The Airline Agreements are subject and subordinate to the Bond Resolution. For more information on the Airline Agreements, see “SUMMARY OF THE AIRLINE AGREEMENTS” in Appendix C hereto. For fiscal year 2014, the Signatory Airlines and their affiliates accounted for 100 percent of the enplaned commercial passengers at the Airport and approximately 14.3% percent of the Airport’s operating revenues. See “INVESTMENT CONSIDERATIONS - Importance of Delta and US Airways at the Airport” herein. -34- ATLANTA 5621272.6 Non-Airline Revenue Sources Major sources of non-airline revenues include terminal building concessions, public automobile parking, automobile rentals, company privilege fees and space rentals, building and ground rentals, and revenues generated from fixed base operations. It is the policy of the Aviation Commission to periodically competitively select, through a public bid process, concessionaires and providers of non-airline services at the Airport. Fixed Base Operations. The Aviation Commission conducts limited fixed based operations at the Airport under the name “Augusta Regional Airport Aviation Services” (“Aviation Services”). As a fixed base operator (“FBO”), Aviation Services has been providing aviation fuel and aviation-related services at the Airport for over 65 years. Aviation Services is the exclusive provider of fueling services at the Airport. Additionally, Aviation Services manages two aircraft storage hangars and offers ground handling support for all transient aviation to include general, business, military, and unscheduled commercial airlines. For fiscal year 2014, Aviation Services generated approximately 39% of the Airport’s total operating revenue. Most of this operating revenue is from its fuel operations, which generates revenue from retail fuel sales and from flowage fees charged upon fuel delivery to contract customers of Avfuel Corporation (“Avfuel”), the Airport’s fuel supplier. Substantially all of the fuel sold or delivered by Aviation Services consists of Jet-A fuel sold or delivered to commercial airlines, general aviation, and military customers. Aviation Services also sells smaller quantities of Avgas/100LL fuel to general aviation customers, as well as limited amounts of auto fuel, diesel, and oil to customers at the Airport. The Aviation Commission purchases all of its aviation fuel for resale from Avfuel pursuant to a Fixed Base Operator Aviation Fuel Supply Agreement (the “Fuel Supply Agreement”), dated November 18, 2013. The initial term of the Fuel Supply Agreement is for three years and expires on December 31, 2016, subject to two renewal terms of one year each. Avfuel is a global supplier of aviation fuels and services. Avfuel’s customers include, but are not limited to, other FBOs, airport authorities, flight departments, airlines, and the Department of Defense. Avfuel has been the Airport’s fuel supplier since 2001. Avfuel provides a comprehensive marketing sales and FBO support package for the Airport. Avfuel also provides the Airport with two 5,000 gallon Jet-A refuelers and one Avgas/100LL refueler for the term of the Fuel Supply Agreement. Pursuant to the Fuel Supply Agreement, Avfuel agrees to sell and deliver and the Aviation Commission agrees to purchase from Avfuel and pay for the Airport’s entire requirements for Jet-A fuel and Avgas/100LL fuel at the price per gallon established by Avfuel from time to time in its discretion based upon market and other conditions that it deems pertinent. In addition, pursuant to the Fuel Supply Agreement, the Airport participates in Avfuel’s Contract Fuel Dealer Program, whereby the Airport earns a flowage fee for delivery of Avfuel fuel to Avfuel’s contract customers at the Airport, including the Signatory Airlines and certain other general aviation customers. Aviation Services regularly maintains an inventory of Jet-A fuel purchased from Avfuel for resale to the Airport’s fuel customers, which includes certain general aviation and military customers. Aviation Services also maintains on behalf of Avfuel (under the Contract Fuel Dealer Program) Avfuel inventory for delivery to Avfuel’s contract customers upon purchase by those customers. The volume of inventory maintained on the Airport’s own behalf or on behalf of Avfuel is based on expected fuel demand, which is highest during October 15 through May 15. Fuel customers at the Airport are either retail customers who purchase fuel directly from Aviation Services or customers who contract with Avfuel to buy fuel directly from Avfuel but take delivery of the Avfuel fuel from Aviation Services. The price for fuel sold to the retail customers is based on the price at which the Aviation Commission purchases the fuel pursuant to the Fuel Supply Agreement plus a profit margin set by the Aviation Commission. For fuel delivered to Avfuel contract customers, Aviation Services charges (1) a flowage fee of $0.20 per gallon for delivery to the Signatory Airlines and (2) a flowage fee ranging from $1.40 to $1.80 per gallon for delivery to other contract customers, based upon the volume of fuel sold. Since the Aviation Commission sets its own profit margin for sales to its retail customers and earns fixed flowage fees on sales by Avfuel to its contract customers, the Airport is able to reduce its exposure to fuel price fluctuations. Prior to March 25, 2013, the Aviation Commission had been using a buy-back arrangement with Avfuel for sales to the contract customers, but the Aviation Commission ceased this practice in order to reduce its exposure to fuel price fluctuations. For more information on the Airport’s prior use of the buy-back arrangement, see “AIRPORT FINANCIAL INFORMATION - Management’s Discussion and Analysis of Results of Operations” herein. -35- ATLANTA 5621272.6 Set forth below is the Airport’s Jet-A fuel sales and deliveries by customer class, based on volume, for fiscal years 2010 through 2014 and for the four-month periods ended April 30, 2014 and 2015. Historical Jet-A Fuel Sales and Deliveries By Volume (Gallons)1 Years Ended December 31 Four Month Periods Ended April 30 2010 2011 2012 2013 2014 2014 2015 Customer Class Commercial Airlines2 1,685,558 1,832,602 1,254,579 1,222,780 1,014,640 362,213 319,392 General Aviation 811,115 948,881 1,076,102 946,241 1,044,413 515,310 607,727 Military 288,354 159,213 489,243 384,190 219,383 74,080 38,034 Others 420,164 286,184 289,071 286,466 177,061 59,440 66,705 Total 3,205,191 3,226,880 3,108,995 2,839,677 2,455,497 1,011,043 1,031,858 ________________________ 1 Includes Jet-A fuel purchased from Avfuel and sold to the Airport’s retail customers and Avfuel fuel delivered to Avfuel’s contract customers. Excludes sales and deliveries of Avgas/100LL fuel, auto fuel, diesel, and oil. 2 Demand for fuel by commercial airlines decreased from 2010 to 2014 primarily due to increased fuel conservation and a change in the airlines’ fleet mix landing at the Airport. In recent years, the airlines have been landing fewer regional jets in favor of larger, narrow body jets, which require less frequent refueling. Source: Airport records from airline reports. Set forth below is the Airport’s net revenue from Jet-A fuel sales and deliveries, for fiscal years 2010 through 2014 and for the four-month periods ended April 30, 2014 and 2015. Historical Net Revenue from Jet-A Fuel Sales and Deliveries1 Years Ended December 31 Four Month Periods Ended April 30 2010 2011 2012 20131 20141 2014 2015 Gross Revenue by Customer Class:2 Commercial Airlines $ 2,872,766 $ 8,008,195 $ 6,651,604 $ 2,404,713 $ 1,311,298 $ 504,830 $ 686,094 General Aviation 4,598,398 3,818,371 3,703,497 3,139,454 2,969,274 1,092,187 1,058,750 Military 611,843 640,299 1,000,751 1,473,242 788,954 406,844 126,663 Others 2,447,815 1,127,043 1,002,489 937,505 --- 123,810 123,344 Sales Discount3 (48,533) (41,212) (8,789) (31,696) (39,197) (10,163) (14,191) Total Gross Revenue4 10,482,288 13,552,695 12,349,552 7,923,219 5,030,329 2,117,509 1,980,660 Cost of Fuel Sold4 (7,872,338) (10,679,060) (9,725,464) (4,560,253) (2,292,136) (954,093) (686,094) Net Revenue $ 2,609,950 $ 2,873,635 $ 2,624,088 $ 3,362,966 $ 2,738,193 $1,163,416 $1,294,566 ________________________ 1 Excludes sales and deliveries of Avgas/100LL fuel, auto fuel, diesel, and oil. 2 Includes revenue from fuel sales and from flowage fees for fuel delivery. 3 Aviation Services provides fuel discounts to Airport hangar tenants only. 4 Decreases in total gross revenue and cost of fuel sold beginning in 2013 due in part to ceasing the buy-back arrangement with Avfuel as of March 25, 2013 and reduced demand for fuel by commercial airlines, each as discussed above. Source: Airport records from airline reports. -36- ATLANTA 5621272.6 Terminal Building Concession Agreements. The Aviation Commission entered into a lease and concessions agreement (the “Concessions Agreement”), dated June 3, 2011, as amended January 22, 2013, with Sterling Restaurant & Retail Group, LLC (the “Concessionaire”). The Concessions Agreement provides that the Concessionaire has the non-exclusive right to provide retail concessions services, including food, alcoholic and non-alcoholic beverage, gift shop, and vending services, in the Airport’s terminal building. The initial term of the Concessions Agreement is for five years and expires on June 2, 2016, subject to a five-year renewal term at the sole option of the Aviation Commission. Pursuant to the Concessions Agreement, the Concessionaire pays the Aviation Commission five percent of gross food and non-alcoholic beverage sales and ten percent of gross retail and alcoholic beverage sales. In 2014, the Aviation Commission received revenues equal to approximately $0.35 per enplaned passenger from concessions in the terminal building. Public Parking Agreements. The daily parking rates are $10.00 in the short-term lot and $8.00 in the long-term lot. Parking management services are provided at the Airport by Republic/NFR&CS Parking System, L.P.. The company provides complete turnkey maintenance and operation of all Airport parking facilities. Compensation under the contract is an annual fixed management fee of $42,450. The current contract expires on December 31, 2017 and permits the Aviation Commission to renew the contract for two additional one year renewal terms. It is the policy of the Aviation Commission to periodically re-bid this management contract based upon contemporary airport industry practices. Rental Car Agreements. The Aviation Commission entered into separate Rental Car Concession and Lease Agreements (each a “Rental Car Agreement”), dated March 1, 2015, with agreements with six rental car companies: Avis/Payless, Budget/Zipcar, Enterprise, Hertz, Alamo/National, and Thrifty (each a “Rental Car Company”). The initial term of each Rental Car Agreement is for five years and expires on February 29, 2020, unless earlier terminated. Pursuant to each Rental Car Agreement, each Rental Car Company pays to the Aviation Commission a privilege fee equal to the greater of ten percent of the Rental Car Company’s gross revenues or a minimum annual guarantee fee. In addition, each Rental Car Company operating at the Airport is required to rent, at prevailing rental rates, office space and automobile ready/return parking spaces. In addition, the Aviation Commission instituted a customer facility charge (“CFC”) of $3.50 per day in 2007 on all rental car contracts to fund rental car capital projects, and each Rental Car Agreement requires the Rental Car Company to collect the CFCs from each rental car customer at the Airport and remit the full amount of CFCs collected to the Aviation Commission. Miscellaneous Agreements. The Aviation Commission collects building and ground rentals from various Airport properties, which are rented to third parties (including properties for hangars, cargo facilities, and industrial and commercial purposes). Employees, Employee Relations, and Labor Organizations The Consolidated Government employed 78 persons related to the Airport as of June 30, 2015, all of whom are full-time employees. No employees of the Consolidated Government related to the Airport are represented by labor organizations or are covered by collective bargaining agreements, and the Consolidated Government is not aware of any union organizing efforts at the present time. The Airport Director believes that employee relations are good. AIRPORT FINANCIAL INFORMATION Accounting System and Policies The Consolidated Government maintains all of its funds and accounts relating to the Airport separate from other Consolidated Government funds. The accounting practices and policies of the Consolidated Government relating to the Airport conform to generally accepted accounting principles as applied to governments. The Airport is accounted for as an Enterprise Fund of the Consolidated Government. Enterprise Funds are used to account for operations (i) that are financed and operated in a manner similar to private business enterprises, where the intent of the governing body is that the cost (expenses, including depreciation) of providing goods or services to the general public on a continuing basis be financed or recovered primarily through user charges, or (ii) where the governing body has decided that periodic determination of revenues earned, expenses incurred, and net income is appropriate for capital maintenance, public policy, management control, accountability, or other purposes. The Airport is accounted for using the accrual basis of accounting. Its revenues are recognized when earned, and its expenses are recognized when incurred. Note 1 of the audited financial statements of the Airport included as part of Appendix A contains a detailed discussion of the Consolidated Government’s significant accounting policies relating to the Airport. -37- ATLANTA 5621272.6 Historical and Pro Forma Capital Structure Set forth below is an historical, comparative summary of the capital structure of the Airport as of the end of fiscal years 2010 to 2014 and as of April 30, 2015. The information in the following table has been extracted from audited financial statements of the Airport for the years ended December 31, 2010 to 2014 and from unaudited interim financial statements of the Airport for the four-month period ended April 30, 2015. Although the information for fiscal years 2010 to 2014 was taken from audited financial statements, no representation is made that the information is comparable from year to year, or that the information as shown taken by itself presents fairly the capital structure of the Airport as of the end of the years shown. The unaudited interim amounts reflected below are not necessarily indicative of the amounts that will be outstanding as of the end of the full fiscal year. For more complete information, reference is made to the financial statements from which this information was extracted, copies of which are available from the Aviation Commission upon request. Historical Capital Structure of the Airport Amount Outstanding as of December 31 (Audited) Amount Outstanding as of April 30, 2015 2010 2011 2012 2013 2014 (Unaudited) Current Liabilities: Accounts Payable $ 1,394,540 $ 5,672,589 $ 2,509,710 $ 1,004,225 $ 1,375,912 $ 68,677 Accrued Expenses 75,404 89,573 122,832 147,251 160,946 160,946 Due to Other Funds of the Consolidated Government 2,249,979 755,436 2,421,108 1,521,533 1,772,657 1,691,477 Compensated Absences 179,281 212,959 253,250 267,209 282,387 282,387 Total Current Liabilities 3,899,204 6,730,557 5,306,891 2,940,218 3,591,902 2,203,486 Long-Term Liabilities Advance from other Funds of the Consolidated Government --- 122,309 128,123 154,273 376,642 376,642 Revenue Bonds Payable 19,605,000 19,605,000 19,605,000 19,605,000 19,605,000 15,079,986 Total Long-Term Liabilities 19,605,000 19,727,309 19,733,123 19,759,273 19,981,642 15,456,627 Total Liabilities 23,504,204 26,457,866 25,040,014 22,699,491 23,573,544 17,660,114 Net Position Net Investment in Capital Assets 32,843,837 47,882,582 55,553,210 54,405,952 53,670,038 58,981,590 Restricted for Capital Outlay 18,211,731 12,248,902 10,432,884 11,140,196 12,191,773 12,400,757 Restricted for Debt Service 2,068,812 7,006,787 7,520,977 8,035,168 8,549,399 4,195,704 Unrestricted 8,264,107 5,497,579 2,658,414 3,360,159 3,479,801 5,414,714 Total Net Position 61,388,487 72,635,850 76,165,485 76,941,475 77,891,011 80,992,765 Total Liabilities and Net Position $84,892,691 $99,093,716 $101,205,499 $99,640,966 $101,464,555 $98,652,879 Ratio of Long-Term Liabilities to Net Position 31.94% 27.16% 25.91% 25.68% 25.65% 19.08% Long-Term Liabilities as a Percentage of Total Liabilities and Net Position 23.09% 19.91% 19.50% 19.83% 19.69% 15.67% -38- ATLANTA 5621272.6 Set forth below is the pro forma capital structure of the Airport as of April 30, 2015, determined by the application of pro forma adjustments to the actual amounts outstanding as of April 30, 2015, which assume that the Series 2015 Bonds were issued on April 30, 2015. Pro Forma Capital Structure of the Airport Amount Outstanding as of April 30, 2015 (Unaudited) Current Liabilities: Accounts Payable $ 68,677 Accrued Expenses 160,946 Due to Other Funds of the Consolidated Government 1,691,477 Compensated Absences 282,387 Total Current Liabilities 2,203,486 Long-Term Liabilities Advance from other Funds of the Consolidated Government 376,642 Revenue Bonds Payable * Total Long-Term Liabilities * Total Liabilities * Net Position Net Investment in Capital Assets 58,981,590 Restricted for Capital Outlay 12,400,757 Restricted for Debt Service 4,195,704 Unrestricted 5,414,714 Total Net Position 80,992,765 Total Liabilities and Net Position * Ratio of Long-Term Liabilities to Net Position Long-Term Liabilities as a Percentage of Total Liabilities and Net Position The Consolidated Government has no present plans to incur additional debt secured by revenues of the Airport in the next five years. There has never been a default in payment of the principal of or interest on any revenue bonds of the Consolidated Government, the City, or the County secured by revenues of the Airport. -39- ATLANTA 5621272.6 Debt Service Requirements Following are the principal and interest payment requirements with respect to the Series 2015 Bonds for the years shown below. For purposes of calculating the principal payable in any year, the relevant maturity or mandatory redemption amount is used. Series 2015A Bonds* Series 2015B Bonds* Total Total Combined Total Year Ending Debt Service Debt Service Debt Service January 1 Principal Interest Requirements Principal Interest Requirements Requirements* 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 Totals -40- ATLANTA 5621272.6 Five Year Operating History Set forth below is an historical, comparative summary of the revenues and expenses of the Airport for fiscal years 2010 to 2014 and for the four-month periods ended April 30, 2014 and 2015. The information in the following table has been extracted from audited financial statements of the Airport for the years ended December 31, 2010 to 2014 and from unaudited interim financial statements of the Airport for the four-month periods ended April 30, 2014 and 2015. Although the information for fiscal years 2010 to 2014 was taken from audited financial statements, no representation is made that the information is comparable from year to year, or that the information as shown taken by itself presents fairly the results of operations of the Airport for the periods shown. The interim amounts set forth below have been prepared by the staff of the Airport without audit and, in the opinion of staff of the Airport, include all adjustments necessary for a fair statement of the operating results of the Airport for such interim periods, all of which adjustments are of a normal recurring nature. The interim amounts reflected below are not necessarily indicative of the financial results that will be achieved for the full fiscal year. For more complete information, reference is made to the financial statements from which this information was extracted, copies of which are available from the Aviation Commission upon request. [Remainder of Page Intentionally Left Blank] -41- ATLANTA 5621272.6 Summary of Airport Revenues and Expenses Years Ended December 31 (Audited) Four-Month Periods Ended April 30 (Unaudited) 2010 2011 2012 2013 2014 2014 2015 Operating Revenue: Landing Fees $ 448,104 $ 542,786 $ 845,401 $ 1,179,976 $ 1,158,656 $ 410,298 $ 468,512 Terminal Area Rental 694,806 694,858 746,517 854,841 817,540 272,338 301,314 Security Reimbursements 57,248 40,045 47,547 --- 58,400 12,098 --- Apron Charges 517,285 687,962 682,640 1,078,140 1,189,366 560,780 954,072 FBO Revenue 25,718 215,992 25,298 53,853 44,408 15,279 15,244 Fuel Sales1 10,541,873 13,614,684 12,499,779 8,115,842 5,248,244 2,193,543 2,067,215 Other Aeronautical 31,524 32,506 32,911 39,397 41,576 15,276 11,880 Land and Non-Terminal Fees 649,045 650,503 680,087 657,157 620,610 211,108 205,689 Terminal Food and Beverage 10,693 57,763 74,949 72,384 70,298 25,146 24,767 Terminal Other 42 --- 24 --- --- --- --- Rental Cars 1,098,550 1,380,405 1,393,452 1,343,477 1,487,900 533,422 599,403 Parking 1,376,682 1,683,383 1,975,937 2,008,932 2,368,627 726,070 564,939 Non-Aeronautical 18,391 22,975 23,459 48,846 42,236 6,195 20,849 Miscellaneous Income --- 98,568 79,450 1,016 74,700 3,934 2,267 Total Operating Revenue 15,469,961 19,722,430 19,107,451 15,453,861 13,222,561 4,985,487 5,236,151 Operating Expense: Personnel Compensation and Benefits 3,788,945 4,677,439 5,082,946 5,313,547 5,252,691 1,541,150 1,616,225 Communications and Utilities 534,856 683,567 714,419 731,345 738,000 195,804 191,184 Repairs and Maintenance 218,609 220,904 257,198 310,417 380,500 159,378 122,697 Fuel Expense2 8,070,175 10,915,515 9,912,070 4,746,424 2,495,551 1,027,137 729,567 Contractual Services 552,016 552,140 633,094 530,002 965,493 226,267 258,980 Insurance 131,632 161,385 153,511 165,213 197,767 7,379 --- Supplies and Material 124,014 158,429 176,741 787,719 118,035 36,588 58,311 Depreciation 2,181,241 2,158,471 2,121,892 2,115,957 2,445,035 --- --- Miscellaneous Expense 409,232 438,642 423,835 532,957 620,438 290,794 445,016 Other Expense 676,329 563,859 686,050 747,162 824,815 260,662 246,914 Bad Debt Expense --- 535 30,887 --- 999 360 --- Total Operating Expense 16,687,049 20,530,886 20,192,643 15,980,743 14,039,324 3,745,519 3,668,894 Operating Income (Loss) (1,217,088) (808,456) (1,085,192) (526,882) (816,763) 1,239,968 1,567,257 Non-Operating Revenue (Expense) Passenger Facility Charges 909,816 1,222,709 1,113,026 1,074,276 1,090,518 237,465 242,069 Customer Facility Charges 825,520 1,084,041 1,059,826 989,357 1,144,445 367,000 408,015 Master Plan and Program Expenses (36,508) --- --- --- --- --- --- Miscellaneous Income 42,737 --- --- --- --- --- --- Miscellaneous Expense - Events (15,809) --- --- --- --- --- --- Interest Income 81,900 137,611 197,435 12,150 60,036 23,305 29,661 Interest Expense (1,037,088) (1,037,094) (1,037,094) (1,037,094) (1,037,102) --- --- Net Non-Operating Revenue 770,568 1,407,267 1,333,193 1,038,689 1,257,897 627,770 679,745 Net Income Before Transfers (446,520) 598,811 248,001 511,807 441,134 1,867,738 2,247,002 Capital Contributions 377,018 11,538,487 3,292,284 264,183 508,402 72,350 862,775 Transfers Out to other Funds of the Consolidated Government --- --- (10,650) --- --- 3,307 3,543 Change in Net Position (69,502) 12,137,298 3,529,635 775,990 949,536 1,943,395 3,113,320 Net Position, Beginning of Year 61,457,989 61,388,487 72,635,850 76,165,485 76,941,475 76,165,485 76,941,475 Prior Period Adjustment --- (889,935) --- --- --- --- --- Net Position, Beginning of Year, as restated 61,457,989 60,498,552 72,635,850 76,165,485 76,941,475 76,165,485 76,941,475 Net Position, End of Year $61,388,487 $72,635,850 $76,165,485 $76,941,475 $77,891,011 $78,108,880 $80,054,795 _______________________ 1 Includes revenue from fuel sales and from flowage fees for fuel deliveries. Includes all fuel types sold or delivered. 2 Represents cost of fuel sold, including all fuel types. -42- ATLANTA 5621272.6 Management’s Discussion and Analysis of Results of Operations For a narrative overview and analysis of the financial activities of the Airport for fiscal year 2014, see “Management’s Discussion and Analysis” included in Appendix A to this Official Statement. The Management’s Discussion and Analysis is not a required part of the basic financial statements of the Airport but is supplementary information required by the Governmental Accounting Standards Board that has not been audited by the Airport’s auditor. The Airport’s total operating revenue increased from $15.5 million in 2010 to $19.7 million in 2011, decreased to $19.1 million in 2012, to $15.5 million in 2013, and to $13.2 million in 2014. Over the five-year period, total operating revenue decreased by 3.6% on average. From 2010 through 2014, the Airport’s four largest sources of operating revenue were fuel sales, parking fees, rental car revenue, and landing fees. Fuel sales represented the largest source of operating revenue, generating 60.3% of total operating revenue during the five-year period. During this period, the Airport changed certain practices with respect its fuel sale operations in order to decrease the Airport’s exposure to changes in the price of aviation fuel. Prior to March 25, 2013, the Airport had been using buy-back arrangements with its aviation fuel supplier, Avfuel Corporation. Under this practice, the Airport purchased fuel from Avfuel to hold in inventory for resale to Avfuel’s contract customers, which includes the Signatory Airlines and certain general aviation customers utilizing the Airport. When the fuel was resold, Avfuel would reimburse the Airport at the market price in effect on the resale date plus a flowage fee. The reimbursement price did not take into account the price that the Airport had paid for the fuel. Accordingly, the Airport was exposed to market price fluctuations, and if prices dropped from the Airport’s purchase date to the resale, the Airport’s profit margin decreased. Effective March 25, 2013, the Airport ceased using the buy-back arrangement. Under the current practice, the Airport no longer purchases aviation fuel for resale to Avfuel’s contract customers. Instead, the Airport allows Avfuel to maintain its own fuel inventory at the Airport for its contract customers and the Airport delivers Avfuel’s fuel to those customers upon purchase by the customer. Upon delivery, Avfuel pays the Airport a flowage fee for every gallon delivered. This change in the Airport’s fuel sale practice has contributed to a decrease in operating revenue from fuel sales as well as a corresponding decrease in fuel expense during the five-year period; however, the profit margin from fuel sales has remained stable over the five-year period. See “THE AIRPORT - Airline and Other Revenue Sources -- Non-Airline Revenue Sources -- Fixed Base Operations” herein. Revenue from parking fees represented the second largest source of operating revenue from 2010 through 2014, generating 11.3% of total operating revenue. Parking revenue is generated from fees charged for short-term, long-term, and credit card parking activity. From 2010 through 2014, revenue from parking fees increased on average by 14.5% per year, reflecting the Airport’s significant increase in passenger activity during 2010 and 2011 coupled with expansion of the parking lots in 2012. From 2010 through 2014, rental car revenue represented the third largest source of operating revenue, generating 8.4% of total operating revenue. Over the five-year period, rental car revenue increased on average by 18.5% per year, mirroring the Airport’s increase in passenger activity during, 2010 and 2011. From 2010 through 2014, revenue from landing fees represented the fourth largest source of operating revenue, generating 5.0% of total operating revenue. Over the five-year period, landing fees increased on average by 64.5% per year, primarily due to an increase in the landing rate per one thousand (1,000) pound of Certified Maximum Landing Weight (CMLW) from $1.49 to $2.93 effective October 1, 2012. Also, since 2013, the mix of aircrafts landing at the Airport has changed from mostly regional jets to more narrow body jets. The Airport’s total operating expense increased from $16.7 million in 2010 to $20.5 million in 2011, decreased to $20.2 million in 2012, to $16.0 million in 2013, and to $14.0 million in 2014. Over the five-year period, total operating expense decreased by 4.0% on average, primarily due to the decrease in fuel expense (cost of goods of sold) associated with ceasing the buy-back arrangements effective March 15, 2013, and offsetting increase in personnel and contractual services. Fuel expense was the largest source of operating expense, generating 41.3% of total operating expense during the five-year period. -43- ATLANTA 5621272.6 Historical Debt Service Coverage Ratios Set forth below is the Airport’s historical ratios of (1) Revenues Available to Pay Debt Service on Revenue Bonds secured only by Net General Revenues of the Airport, and (2) Revenues Available to Pay Debt Service Revenue Bonds secured by Net General Revenues and PFC Revenues of the Airport, each for the years ended December 31, 2010 to 2014. Historical Debt Service Coverage Ratios Years Ended December 31 2010 2011 2012 2013 2014 Revenue Bonds Secured Only by Net General Revenues Net General Revenues Available for Debt Service1 $964,153 $1,350,015 $1,036,700 $1,589,075 $1,628,272 Debt Service on Revenue Bonds Secured Only by Net General Revenues2 510,429 510,429 510,429 510,429 510,429 Historical Debt Service Coverage Ratio 1.89x 2.64x 2.03x 3.11x 3.19x Revenue Bonds Secured by Net General Revenues and PFC Revenues Remaining Net General Revenues Available for Debt Service3 $ 453,724 $839,586 $526,271 $1,078,646 $1,117,843 PFC Revenues Available for Debt Service4 909,816 1,222,709 1,113,026 1,074,276 1,090,518 Total Revenues Available for Debt Service 1,363,540 2,062,295 1,639,297 2,152,922 2,208,361 Debt Service on Revenue Bonds Secured by Net General Revenues and PFC Revenues5 1,040,355 1,040,355 1,040,355 1,040,355 1,040,355 Historical Debt Service Coverage Ratio 1.31x 1.98x 1.58x 2.07x 2.12x ________________________ 1 Operating income (loss) of the Airport, plus depreciation and amortization. See “AIRPORT FINANCIAL INFORMATION - Five Year Operating History” herein. 2 Represents historical debt service, including required deposits to reserve accounts, on the Series 2005C Bonds, which were secured only by Net General Revenues. 3 Represents operating income (loss) of the Airport, plus depreciation and amortization, remaining after payment of debt service on the Series 2005C Bonds. 4 See “AIRPORT FINANCIAL INFORMATION - Five Year Operating History” herein. PFC Revenues were available to pay debt service only on the Series 2005A Bonds and the Series 2005B Bonds, but not the Series 2005C Bonds. The Series 2005B Bonds were paid in full in January 2015 and are no longer outstanding. 5 Represents historical debt service, including required deposits to reserve accounts, on the Series 2005A Bonds and the Series 2005B Bonds, which were secured by Net General Revenues and PFC Revenues. -44- ATLANTA 5621272.6 Operating Budget The Consolidated Government is not legally required under Georgia law to adopt a budget for the Airport. The Consolidated Government, however, has covenanted in the Bond Resolution to adopt an annual budget for the Airport for each fiscal year, and the staff of the Airport prepares an annual operating budget for the Airport for management control purposes. The staff of the Airport uses the accrual basis of accounting in its annual operating budget for the Airport, which is consistent with the basis of accounting used in the Airport’s financial statements. Set forth below is a summary of the Airport’s budget for the year ending December 31, 2015. This budget is based upon certain assumptions and estimates of the staff of the Airport regarding future events, transactions, and circumstances. Realization of the results projected in this budget will depend upon implementation by management of the Airport of policies and procedures consistent with the assumptions. There can be no assurance that actual events will correspond with such assumptions, that uncontrollable factors will not affect such assumptions, or that the projected results will be achieved. Accordingly, the actual results achieved could materially vary from those projected in the budget set forth below. [Remainder of Page Intentionally Left Blank] -45- ATLANTA 5621272.6 Airport Budget for Year Ending December 31, 2015 Operating Revenue: Landing Fees $ 1,229,730 Terminal Area Rental 911,300 Security Reimbursements 227,500 Apron Charges 1,141,250 FBO Revenue 53,000 Fuel Sales1 6,911,440 Other Aeronautical 45,000 Land and Non-Terminal Fees 638,230 Terminal Food and Beverage 75,000 Rental Cars 1,445,840 Parking 2,262,250 Non-Aeronautical 43,000 Miscellaneous Income 3,000 Total Operating Revenue 14,986,540 Operating Expense: Personnel Compensation and Benefits 5,569,790 Communications and Utilities 844,795 Repairs and Maintenance 417,660 Fuel Expense2 4,721,800 Contractual Services 1,044,280 Insurance 167,440 Supplies and Material 205,915 Depreciation 2,445,035 Miscellaneous Expense 650,770 Other Expense 20,221,320 Total Operating Expense 36,288,805 Operating Income (Loss) (21,302,265) Non-Operating Revenue (Expense) Passenger Facility Charges 1,124,280 Customer Facility Charges 1,000,000 Interest Income 151,100 Interest Expense (1,550,740) Net Non-Operating Revenue 724,640 Net Income Before Transfers (20,577,625) Capital Contributions 12,773,580 Transfers Out to other Funds of the Consolidated Government (10,630) Change in Net Position (7,814,675) Net Position, Beginning of Year 77,891,011 Net Position, End of Year $70,076,656 _______________________ 1 Includes revenue from fuel sales and from flowage fees for fuel deliveries. Includes all fuel types sold or delivered. 2 Represents cost of fuel sold, including all fuel types. -46- ATLANTA 5621272.6 Capital Improvements Program The following table summarizes the estimated value of capital improvements made to the Airport in each year for the fiscal years 2010 to 2014 and the funding sources for such capital improvements. Funding Sources Fiscal Total Value of Debt Proceeds and Federal Grants- Year Capital Improvements Airport Revenues Investment Earnings In-Aid 2010 $ 1,115,623 $--- $ 815,006 $ 377,018 2011 17,197,216 --- 5,658,729 11,538,487 2012 10,710,621 --- 7,418,337 3,292,284 2013 968,699 --- 704,515 264,184 2014 1,709,121 --- 1,200,719 508,402 The staff of the Airport has developed a multi-year capital improvements program and a plan to finance the program that relies on several funding sources. The capital improvements program allows the staff of the Airport to plan, on a long-term basis, for future Airport capital needs. The capital improvements program is updated periodically. The following table summarizes the Airport’s capital improvements program for fiscal years 2015 through 2019. Years Ending December 31 2015 2016 2017 2018 2019 Total Type of Capital Expenditure Airfield Improvements Terminal Improvements Parking Improvements Infrastructure Aircraft Rescue and Firefighting Facility Rehab/Relocation Maintenance Facility Replacement Hangar Replacement Total Costs Type of Funding Source Federal Grants-In-Aid1 Entitlement Funds Discretionary Funds State of Georgia Grants Customer Facility Charges Airport Revenues Future Revenue Bonds Total Funding Sources ________________________ 1 See “AIRPORT FINANCIAL INFORMATION - Federal Grants-In-Aid” herein. -47- ATLANTA 5621272.6 Passenger Facility Charges Under the terms of the Bond Resolution, the Series 2015A Bonds (but not the Series 2015B Bonds) are secured by a first priority pledge of and lien on Net General Revenues and Pledged PFC Revenues. see “SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2015 BONDS - Pledged Revenues” herein. Passenger facility charges, referred to as PFCs, are fees authorized by the Aviation Safety and Capacity Expansion Act of 1990, as amended and recodified at 49 U.S.C. § 40117 (the “PFC Act”), as implemented by the FAA pursuant to published regulations at 14 CFR Part 158 (the “PFC Regulations”). The PFC Act permits a public agency that controls a commercial service airport (those with regularly scheduled service and enplaning 2,500 or more passengers annually) to charge each paying passenger enplaning at the airport a PFC of $1.00, $2.00, $3.00, or $4.50, subject to certain exceptions described below. The proceeds from PFCs are to be used to finance eligible airport-related projects approved by the FAA that preserve or enhance the capacity, safety, or security of the national air transportation system, reduce or mitigate noise from an airport that is part of the system, or provide an opportunity for enhanced competition between or among air carriers or foreign air carriers. “Eligible airport-related projects” include certain airport development or planning, terminal development, airport noise compatibility measures, and planning and construction of gates and related areas (but excluding restaurants, rental car facilities, automobile parking, or other concessions) within airport boundaries for the movement of passengers and baggage. The public agency must obtain the FAA’s approval before imposing PFCs and before using the proceeds of PFCs. FAA approval may be for “impose-only” authority, “use” authority, or “impose-and-use” authority. “Impose-only” authority permits the public agency to charge PFCs for approved projects but requires another application for authority to use such PFCs. Projects for which impose-only authority is granted must be “implemented” within five years after the effective date of such authority; and a use application (or, if the implementation schedule is delayed, a request for extension) must be submitted within three years after the effective date. Projects for which “impose-and-use” authority is granted must be implemented within two years after approval of the use of the PFCs. Implementation means that a notice to proceed has been issued by the public agency to a contractor, in the case of a construction project, that a title search, survey, or appraisal has commenced for a significant part of the property in the case of property acquisition, or that a contractor or public agency has started work in the case of any other non-construction project. An airport may only impose the designated PFC until the authorized total amount is collected, and interest earnings on PFCs collected are included in the approved PFC collection amount. PFCs are collected on behalf of airports by air carriers, certain foreign air carriers, and their agents (“Collecting Carriers”) from each eligible enplaning passenger at such airport. PFCs may not be collected, however, from a passenger enplaning at the airport if the passenger did not pay for the ticket (for example, if the passenger obtained the ticket with a frequent flier award coupon without monetary payment) or from a passenger flying on an essential air-service route. A PFC may be collected from a passenger (i) on a one-way trip, only for the first two enplaning airports on the travel itinerary where PFCs are imposed, and (ii) on a roundtrip, only for the first two and the last two enplaning airports where PFCs are imposed. Public agencies may request that a class of air carrier not be required to collect PFCs if that class constitutes 1% or less of the total number of passengers enplaned annually at the airport. In the process of collecting PFCs, each Collecting Carrier is entitled to and does commingle the collected PFCs with its other funds. The Collecting Carriers are authorized to withhold, as a collection fee, (i) eleven cents per eligible enplaning passenger from whom a PFC is collected, and (ii) any investment income earned on the amount collected prior to the due date of the remittance. Collecting Carriers remit collected PFCs to the airport on a monthly basis. Quarterly, the Aviation Commission compares the amount of PFCs remitted with the quarterly enplanement figures provided by the Collecting Carriers. The Aviation Commission compiles and sends a passenger facility charge report to the FAA and to the Collecting Carriers each quarter. As required by the FAA, the Aviation Commission requests annual audit reports from Collecting Carriers carrying more than 50,000 eligible enplaning passengers. For the years 2010 through 2014, the Consolidated Government’s independent accountants determined that there were no material delinquencies for the PFC payments. With respect to a Collecting Carrier operating at the Airport that is involved in bankruptcy proceedings, it is unclear whether the Consolidated Government would be afforded the status of a secured creditor with regard to PFCs collected or accrued by that Collecting Carrier. Congress enacted legislation in late 2003 that requires an airline that files for bankruptcy protection, or that has an involuntary bankruptcy proceeding commenced against it, to segregate PFC revenue in a separate account for the benefit of the public agencies entitled to such revenue. See “INVESTMENT CONSIDERATIONS - Effect of Airline Bankruptcies -- PFCs” herein. The PFC Act, as well as the PFC Regulations, are subject to amendment and repeal. Without approval of the FAA, but with written notice to the Collecting Carriers and to the FAA, the level of the PFCs charged or the total amount of approved PFCs may be decreased, or the total amount of PFCs to be collected may be increased, by an amount not exceeding fifteen percent of the approved amount of PFCs. Increases in excess of fifteen percent may -48- ATLANTA 5621272.6 not be instituted without the approval of the FAA. Any change will be effective as of the first day of a month that is at least 60 days after the date the Collecting Carriers are notified of the change. On May 5, 1999, the Aviation Commission received approval, pursuant to a first PFC application, to collect a $3.00 PFC from September 1, 1999 to September 1, 2026 on each qualifying enplaning passenger totaling $29,266,258, in order to finance, among other things, the new terminal facility. On May 1, 2000, the FAA approved an amendment to the first PFC application, increasing the collection level to $4.50 on each qualifying enplaning passenger, decreasing the total amount authorized to be collected to $28,835,139 and revising the charge expiration date to July 1, 2020. On August 24, 2004, the FAA approved another amendment to the first PFC application, increasing the total amount authorized to be collected to $31,482,000 and extending the charge expiration date to July 1, 2030. The FAA’s approval (“Final Agency Decision”) contemplates leveraging a portion of the Aviation Commission’s PFCs and authorizes PFC revenues to be applied to bond financing with respect to PFC-approved projects. Specifically, the Final Agency Decision allows the Aviation Commission to impose and use PFCs for the payment of (1) debt service on bonds used to fund PFC-approved projects ($29,296,000), and (2) PFC-approved project costs on a pay-as-you-go basis ($2,186,000). On November 4, 2004, the Aviation Commission received approval, pursuant to a second PFC application, to collect a $4.50 PFC on each qualifying enplaning passenger totaling $2,007,000 and extending the charge expiration date to August 1, 2031, in order to finance certain PFC-approved projects at the Airport that are part of the Aviation Commission’s five-year capital improvement program. The FAA’s Final Agency Decision contemplates leveraging a portion of the Aviation Commission’s PFCs and authorizes PFC revenues to be applied to bond financing with respect to PFC-approved projects. Specifically, the Final Agency Decision allows the Aviation Commission to impose and use PFCs for the payment of (1) debt service on bonds used to fund PFC-approved projects ($1,868,000), and (2) PFC-approved project costs on a pay-as-you-go basis ($139,000). Because actual debt service on the Series 2015A Bonds ($________), which are the bonds used to refinance PFC-approved projects, exceeds the total amount of PFCs authorized to be collected in its first and second PFC applications to pay debt service ($31,164,000), the Aviation Commission expects to provide written notice to the Collecting Carriers and to the FAA that it plans to collect additional PFCs within the permitted fifteen percent increase described above so that total PFC collections will be sufficient to pay actual debt service on the Series 2015A Bonds. As of June 30, 2015, the Aviation Commission had collected PFC revenues in the total amount of $12,208,540 (excluding interest earnings on such amount). No assurance can be given that the PFC revenues and the schedule for their receipt that are assumed in the Aviation Commission’s plan of financing will be attained. The FAA may terminate the Airport’s authority to impose PFCs, subject to informal and formal procedural safeguards, if the FAA determines that (i) the Airport is in violation of certain provisions of the Airport Noise and Capacity Act of 1990 relating to an airport’s noise or access restrictions on aircraft operations, (ii) PFC collections and investment income thereon are not being used for PFC-approved projects at the Airport in accordance with FAA impose-and-use authority for such approved projects or with the PFC Act and the PFC Regulations, (iii) implementation of the approved projects does not commence within the time periods specified in the PFC Act and PFC Regulations, or (iv) the Airport is otherwise in violation of the PFC Act, the PFC Regulations, or the FAA impose-and-use authority. If the FAA determines that revenue derived from a PFC is excessive or is not being used in accordance with the PFC Act, the FAA may reduce the amount of Airport Improvement Program funds otherwise payable to the Airport. No assurance can be given that PFCs will actually be received in the amount or at the time contemplated by the Consolidated Government. The amount of actual PFC revenues collected, and the rate of collection, will vary depending on the actual levels of qualified passenger enplanements at the Airport. Furthermore, no assurance can be given that the Airport’s authority to impose a PFC will not be terminated by Congress or the FAA, or that the PFC program will not be modified or restricted by Congress or the FAA so as to reduce PFC revenues available to the Airport. Federal Grants-In-Aid The Airport and Airway Improvement Act of 1982 created the Airport Improvement Grant Program (“AIP”), which is administered by the FAA and funded by the Airport and Airway Trust Fund. This fund is financed by federal aviation user taxes. Grants are available to airport operators in the form of “entitlement” funds and “discretionary” funds. Entitlement funds are apportioned annually based upon enplaned passengers and cargo landing weights, and discretionary funds are available at the discretion of the FAA based upon a national priority -49- ATLANTA 5621272.6 system. Actual entitlement funds will vary with the actual number of passenger enplanements, with total appropriations for the AIP, and with any revision of the existing statutory formula for calculating such funds. The DOT classifies airports as large, medium, small, and non-hubs according to their share of the total enplaned passengers in the United States. Large-hub airports enplane over 0.1 percent, medium-hub airports enplane between 0.25 percent and 0.9999 percent, small-hub airports enplane between 0.05 percent and 0.2499 percent, and non-hub airports enplane less than 0.05 percent of total enplaned passengers in the United States. Pursuant to the PFC Act, annual federal passenger entitlement grants to large- and medium-hub airports are reduced by 50 percent when a $3.00 PFC is imposed and are reduced by 75 percent when a $4.50 PFC is imposed. Small- and non-hub airports are not required to reduce their passenger entitlement grants due to the collection of any PFC amount. As a result of the Airport’s non-hub classification by the DOT, the Consolidated Government is not required to reduce any federal passenger entitlement grants when collecting the current $4.50 PFC. The Airport’s capital improvements program for fiscal years 2015 through 2019 includes approximately $38.8 million in funding from AIP grants, of which approximately $10.7 million is expected to be entitlement funding and approximately $28.1 million is expected to be discretionary funding; however, these AIP grants have not yet been awarded to the Consolidated Government. The FAA presently disburses grant funds on a reimbursement basis after the Consolidated Government incurs the capital expenditures for which the grant was awarded. No assurance can be given concerning the timing or amounts of future AIP grant funding by the FAA to the Consolidated Government. Employee Benefits General The Consolidated Government presently maintains one agent multiple-employer (the “GMEBS Plan”), and six single-employer defined-benefit pension plans (the “General Retirement Plan,” the “1945 Plan,” the “General Pension Plan,” the “Policemen’s Pension Plan,” the “Firemen’s Pension Plan,” and the “City Employees’ Pension Plan”), described below, covering certain employees of the Consolidated Government, including certain employees of the Airport. The Consolidated Government also presently maintains a defined-contribution plan and a deferred compensation plan, each described below, covering certain employees of the Consolidated Government, including certain employees of the Airport, and provides certain other employee and post-employment benefits, which are described below, to certain employees of the Consolidated Government, including certain employees of the Airport. Pension Plans The GMEBS Plan is administered through the Georgia Municipal Employees Benefit System (“GMEBS”), an agent multiple-employer public employee retirement system that acts as a common investment and administrative agent for cities in the State of Georgia. Effective January 1, 2008, the Consolidated Government revised the plan provisions governing the GMEBS and transferred all participants in the single-employer defined-benefit pension plan known as the “1977 Plan,” which covered certain former County employees, into the GMEBS Plan. In addition, the Consolidated Government offered all participants in its defined-contribution plan described below the option to transfer their contributions from that plan to the revised GMEBS Plan. All but 290 of the participants in the defined-contribution plan elected to transfer their contributions to the GMEBS Plan. The General Retirement Plan, the General Pension Plan, the Policemen’s Pension Plan, the Firemen’s Pension Plan, and the City Employee’s Pension Plan cover former City employees. The 1945 Plan covers certain former County employees. The funding methods and determination of benefits payable for the defined-benefit plans in general provide that pension funds are to be accumulated from employee contributions, employer contributions, and income from the investment of accumulated funds. Former City policemen and firemen hired before 1945 are covered under the General Pension Plan. Former City policemen hired between 1945 and 1949 are covered under the Policemen’s Pension Plan. Former City firemen hired between 1945 and 1949 are covered under the Firemen’s Pension Plan. Other former City employees hired between 1945 and 1949 are covered by the City Employees’ Pension Plan. Former City employees hired after March 1, 1949 and before March 1, 1987, whose age did not exceed 35 at the time of their employment, are covered by the General Retirement Plan. Former City employees hired on or after March 1, 1987 and before consolidation of the City and County governments are covered by the GMEBS Plan Former County employees hired prior to October 1, 1975 are covered by the 1945 Plan. Former County employees not covered by the 1945 Plan, whose age did not exceed 60 at the time of their employment, were covered by the 1977 Plan until January 1, 2008 and are now covered by the GMEBS Plan. Consolidated Government employees who are not covered by another plan are covered by the defined- contribution plan described below. All of the Consolidated Government’s pension plans, except for the GMEBS Plan, are closed to new employees. -50- ATLANTA 5621272.6 Set forth below is selected information about the Consolidated Government’s defined-benefit pension plans. Contributions to Defined-Benefit Pension Plans Years Ended December 31 2010 2011 2012 2013 2014 1945 Plan Employee Contributions $ 9,673 $ 6,253 $ 6,569 $ 6,617 $ 6,661 Employer Contributions 340,451 390,996 291,502 299,605 290,565 General Retirement Plan Employee Contributions $ 326,923 $ 291,737 $ 219,125 $ 202,735 $ 185,458 Employer Contributions 1,403,253 1,543,071 2,826,791 1,924,332 2,256,722 GMEBS1 Employee Contributions $2,922,763 $2,913,475 $3,052,262 $3,022,920 3,377,580 Employer Contributions 3,167,267 4,893,018 5,082,322 5,170,685 5,297,640 ________________________ 1 The 1977 Plan was terminated effective January 1, 2008 when all participants in the 1977 Plan were transferred to the GMEBS Plan. Analysis of Funding Progress of Defined-Benefit Pension Plans Actuarial Valuation Date Actuarial Value of Assets Actuarially Accrued Liability (Funded) Unfunded Actuarially Accrued Liability Funded Ratio Covered Payroll (Funded) Unfunded Actuarially Accrued Liability as a Percentage of Covered Payroll 1945 Plan 12/31/10 $7,860,568 $11,366,929 $3,506,361 69.2% $125,359 2,797.1% 12/31/11 7,152,239 9,398,563 2,246,324 76.1 125,222 1,793.9 12/31/12 6,403,803 9,209,859 2,806,056 69.5 131,602 2,132.2 12/31/13 6,423,808 8,756,203 2,332,395 73.4 132,346 1,762.3 General Retirement Plan 12/31/10 $68,221,054 $79,243,698 $11,022,644 86.1% $4,707,547 234.1% 12/31/11 64,785,966 83,583,477 18,797,511 77.5 3,152,905 596.2 12/31/12 61,776,481 81,888,596 20,112,115 75.4 2,877,191 699.0 12/31/13 64,261,414 82,674,584 18,413,170 77.7 2,906,852 633.4 GMEBS1 07/01/10 $60,004,921 $ 82,560,251 $22,555,330 72.7% $73,248,453 30.8% 07/01/11 67,421,898 90,451,936 23,030,038 74.5 73,830,249 31.2 07/01/12 76,659,093 99,440,605 22,781,512 77.1 73,908,657 30.8 07/01/13 87,884,346 110,942,833 23,058,487 79.2 79,574,939 29.0 07/01/14 99,509,643 119,742,080 20,232,437 83.1 82,687,047 24.5 ________________________ 1 The 1977 Plan was terminated effective January 1, 2008 when all participants in the 1977 Plan were transferred to the GMEBS Plan. -51- ATLANTA 5621272.6 Membership in Defined-Benefit Pension Plans as of January 1, 2014 Retirees and Beneficiaries Receiving Benefits Terminated Plan Members Entitled to But Not Yet Receiving Benefits Active Plan Members 1945 Plan 25 -0- 2 Policemen’s Pension Plan 1 -0- -0- Firemen’s Pension Plan 2 -0- -0- City Employees’ Pension Plan 6 -0- -0- General Retirement Plan 182 10 71 GMEBS 393 96 2,047 Total 609 106 2,120 The Consolidated Government is required by Georgia law to have an actuarial valuation of its defined-benefit pension plans done once every two years. The Consolidated Government met the minimum funding levels prescribed by state law through January 1, 2015. The Consolidated Government has an actuarial valuation of the GMEBS Plan, the General Retirement Plan, and the 1945 Plan done once every year. The actuarial report prepared by The Segal Group, Inc. (“Segal”), dated __________, 2014, presents the results of the July 1, 2014 actuarial valuation of the GMEBS Plan. The actuarial reports prepared by the CBIZ Benefits & Insurance Services, Inc. (“CBIZ”), dated __________, 2014, present the results of the January 1, 2014 actuarial valuations of the General Retirement Plan and the 1945 Plan. For more complete information, reference is made to these actuarial reports, copies of which are available from the Consolidated Government upon request. Note 6 of the audited financial statements included as a part of Appendix A to this Official Statement contains a detailed description of the Consolidated Government’s defined-benefit pension plans covering employees of the Consolidated Government, including certain employees of the Airport. This description includes the principal actuarial assumptions used by Segal in preparing the actuarial valuation of the GMEBS Plan as of July 1, 2014, and used by CBIZ in preparing the actuarial valuations of the General Retirement Plan and the 1945 Plan as of January 1, 2014. INFORMATION INCLUDED IN THIS SECTION REGARDING THE CONSOLIDATED GOVERNMENT’S DEFINED-BENEFIT PENSION PLANS RELIES ON INFORMATION PRODUCED BY THESE PENSION PLANS AND THEIR INDEPENDENT ACCOUNTANTS AND ACTUARIES. ACTUARIAL ASSESSMENTS ARE “FORWARD-LOOKING” INFORMATION THAT REFLECT THE JUDGMENT OF THE FIDUCIARIES OF THESE PENSION PLANS. ACTUARIAL ASSESSMENTS ARE BASED UPON A VARIETY OF ASSUMPTIONS, ONE OR MORE OF WHICH MAY PROVE TO BE INACCURATE OR BE CHANGED IN THE FUTURE, AND WILL CHANGE WITH THE FUTURE EXPERIENCE OF THESE PENSION PLANS. Defined Contribution Plan The Consolidated Government maintains a single employer, defined-contribution plan created in accordance with Internal Revenue Code Section 401(a) for certain of its full-time employees, including certain employees of the Airport. In a defined-contribution plan, benefits depend solely on amounts contributed to the plan plus investment earnings. The Consolidated Government has no liability under this plan except for contributions established and made each year. Employees are eligible to participate in the plan after one month of employment. Participants in the plan are required to contribute 4% of their salary, and the Consolidated Government is required to contribute 2% of the participant’s salary to the plan. The Consolidated Government’s contributions for each employee are fully vested after five years of continuous employment. The plan is administered by Nationwide Life Insurance. As of December 31, 2014, there were approximately 164 participants in the plan. For the year ended December 31, 2014, participants in the plan contributed approximately $296,222 and the Consolidated Government contributed approximately $148,112. The plan is currently closed to new participants. Deferred Compensation Plan The Consolidated Government also offers its employees, including employees of the Airport, a deferred compensation plan created in accordance with Internal Revenue Code Section 457(b). The plan is available to all employees and permits them to defer income taxation of a portion of their salary to future years. Participation in the plan is optional. The deferred compensation is not available to employees until termination, retirement, death, or unforeseeable emergency, but employees do not incur a penalty for early withdrawal. All of the contributions into -52- ATLANTA 5621272.6 the plan come from employee contributions. In accordance with Internal Revenue Code Section 457, plan assets are held in trust for the exclusive benefit of plan participants. Accordingly, the assets and liabilities of the trust are not reflected in the City’s financial statements. Other Employee Benefits Consolidated Government employees, including employees of the Airport, accrue vacation and sick leave in different amounts, depending upon the period of time the Consolidated Government has employed them. The maximum amount of vacation leave that employees may accumulate is 43 days. The Consolidated Government pays accrued vacation leave upon termination of employment and has reflected a liability for accumulated vacation pay in its financial statements. The maximum amount of sick leave that Consolidated Government employees (other than firefighters) may accumulate is 132 days. The Consolidated Government, however, does not pay accrued sick leave upon termination of employment and has not reflected accumulated sick leave as a liability in the Consolidated Government’s financial statements. Other Post-Retirement Benefits In addition to pension benefits, the Consolidated Government provides certain medical and death benefits for eligible retired employees of the Consolidated Government and their spouses. The Consolidated Government’s employees who are also participants in one of the retirement plans are eligible for these post-employment retirement benefits if they reach normal retirement age or are totally disabled while employed by the Consolidated Government. The cost of these benefits is recognized as expenditures as claims and premiums are paid. For the year ended December 31, 2014, the Consolidated Government contributed $3,274,460 to post-employment retirement benefits costs. The Consolidated Government currently funds and intends to continue to fund these benefits on a pay-as-you-go basis. No trust fund has been established for future funding of these benefits. As of January 1, 2013, the most recent date for which an actuarial valuation is available, the actuarial accrued liability for benefits was $95,489,631 and the actuarial value of assets was $-0-, resulting in an unfunded actuarial accrued liability of $95,489,631. As of the January 1, 2013 actuarial valuation, there were 556 retirees and spouses of retires receiving these post-employment retirement benefits. See Note 7 of the audited financial statements of the Airport included as a part of Appendix A to this Official Statement for further information concerning the Consolidated Government’s post-retirement benefits. Accounting Changes Impacting Defined Benefit Pension Plan and OPEB Reporting Beginning with the fiscal year ended December 31, 2015, the Consolidated Government will be required to adopt GASB Statement No. 68 (“Statement 68”), Accounting and Financial Reporting for Pensions. Statement 68 requires governments providing defined benefit pensions to recognize their long-term obligations for pension benefits as a liability for the first time on its government-wide statement of net position and to more comprehensively and comparably measure the annual costs of pension benefits and provides methodologies required to make such calculations. Currently, the Consolidated Government and the Airport report such liability in the notes to its respective audited financial statements. The assumptions required under GASB 68 to make such calculations will differ from the current actuarial assumptions used to calculate such liabilities that are reported in the notes to the audit; however, at this time, no assessment of the impact of GASB 68 has been made by the Consolidated Government. GASB has indicated in its 2014 plan that it expects to release an exposure draft of a statement regarding other postemployment benefit (“OPEB”) accounting and financial reporting, which is expected to become final in the second quarter of 2015. Currently, as with pension liabilities, OPEB liabilities are reported in the notes to the audited financial statements and are not reported in the audited financial statements. Insurance Coverage The Consolidated Government carries liability insurance for the Airport or is self-insured for the types of claims and in amounts that are customary for similar enterprises. The Consolidated Government also carries property and casualty damage insurance on buildings and other physical assets related to the Airport. See “SUMMARY OF THE BOND RESOLUTION - Maintenance, Insurance, and Sale of the Airport; Annual Budget; Uneconomic Facilities; Tax Covenants” in Appendix B to this Official Statement for a description of the Consolidated Government’s covenants regarding insurance for the Airport. -53- ATLANTA 5621272.6 Present insurance coverage for the Consolidated Government, including coverage applicable to the Airport, is summarized below. Type Amount in Force Building and Contents1 $619,649,004 Employee Blanket Bond 100,000 Public Official Bond for each Commissioner 10,000 Limits of Liability Type Each Occurrence Aggregate Public Officials’ Liability $ 2,000,000 None Commercial Aviation Liability Bodily Injury and Property 100,000,000 None Products and Completed Operations 100,000,000 $100,000,000 Hangarkeepers Liability - Not in Flight Each Aircraft 100,000,000 None Baggage Liability 1,000,000 1,000,000 Contingent Cell Tower Liability 100,000,000 100,000,000 Pollution Legal Liability 10,000,000 10,000,000 Directors and Officers Liability2 1,000,000 1,000,000 Automobile Liability3 1,000,000 None ________________________ 1 Includes boiler and machinery and valuable papers. 2 Self-insured retention of $10,000 applies. 3 Includes pilot and fleet coverage, combined single limit(bodily injury and property damage). The Consolidated Government maintains four Risk Management Funds to account for and finance its self-insured risks of loss. The Risk Management Funds are maintained to provide general liability insurance, workers’ compensation coverage, and unemployment coverage for the Consolidated Government, including the Airport. As of December 31, 2014, the fund balances of the Risk Management Funds totaled $$1,300,000 (including $300,000 invested in capital assets). In addition, the Consolidated Government designated $1,250,000 of its unreserved fund balance in its general fund for risk management. The Consolidated Government is also self-insured for its workers’ compensation coverage through a self-insurance program that is administered under contracts with third party administrators. For a description of the Consolidated Government’s self-insurance programs, see Note _ to the audited financial statements of the Airport included as part of Appendix A to this Official Statement. A summary of the Consolidated Government’s self-insured retention and excess liability insurance coverage is set forth below: Excess Liability Insurance Self-Insured Retention Limits of Liability Type Each Occurrence Aggregate Each Occurrence Aggregate Workers’ Compensation $1,000,000 None $1,000,000 None The current insurance policies do not insure the Airport against acts of war or terrorism, because the Aviation Commission has judged that such coverage is not available with the terms and for a premium that is economically feasible for the Airport. The Consolidated Government requires payment and performance surety bonds and builders’ risk insurance of all contractors and subcontractors involved in construction related to the Airport. The Consolidated Government -54- ATLANTA 5621272.6 requires the surety bonds to be issued by surety firms listed on the U.S. Treasury-approved list and the builders’ risk insurance to be in the amount of the contract sums. INVESTMENT CONSIDERATIONS Introduction In analyzing the Series 2015 Bonds and in order to make an informed investment decision, potential investors should carefully consider the following investment considerations prior to making a decision to purchase the Series 2015 Bonds. The following investment considerations are not intended to be exhaustive of the general or specific investment considerations relating to the purchase of the Series 2015 Bonds. Additional investment considerations relating to the purchase of the Series 2015 Bonds are described throughout this Official Statement, whether or not specifically designated as investment considerations. Levels of Airline Traffic and Financial Condition of the Airlines Since the events of September 11, 2001, the Airport, as well as the rest of the aviation industry, has faced numerous challenges. Following the terrorist events, the aviation industry continued to face obstacles as airline traffic and revenue remained soft, the economy weakened, air traffic demand continued to decrease, and airlines’ expenses continued to increase. The aviation industry continues to face obstacles including hostilities in the Middle East, elevated oil prices, increased fare discounting, escalating security costs, the outbreak of SARS, the Ebola virus and, most recently, measles. All of this has had an impact on the operational levels at airports across the country, including the Airport. The Consolidated Government cannot predict with any certainty what impact these events are likely to have on any of the airlines operating at the Airport. Further, the Consolidated Government cannot predict the likelihood of future incidents similar to the events of September 11, 2001, the likelihood of future air transportation disruptions, or the impact on the Consolidated Government or the airlines operating at the Airport from such incidents or disruptions. Key factors that affect airline traffic at the Airport and the financial condition of the airlines, and, therefore, the amount of Pledged Revenues available for payment of the Series 2015 Bonds, include: local, regional, national, and international economic and political conditions; international hostilities; world health concerns; aviation security concerns; airline service and routes; airline airfares and competition; airline industry economics, including labor relations; availability and price of aviation fuel (including the ability of airlines to hedge fuel costs); capacity of the national air traffic control and airport systems; regional, national and international environmental regulation; airline consolidation and mergers; capacity of the Airport and competition from other airports; and business travel substitutes, including teleconferencing, videoconferencing, and web-casting. Most of these factors are outside the Consolidated Government’s control. The airline industry is highly cyclical and is characterized by intense competition, high operating and capital costs and varying demand. Passenger and cargo volumes are highly sensitive to general and localized economic trends, and passenger traffic varies substantially with seasonal travel patterns. The profitability of the airline industry can fluctuate dramatically from quarter to quarter and from year to year, even in the absence of catastrophic events such as the terrorist attacks of September 11, 2001 and the economic recession that occurred between 2008 and 2009. Other business decisions by airlines, such as the reduction or elimination of service to unprofitable markets could affect airline operations in the future. Importance of Delta and US Airways at the Airport The Airport derives a portion of its operating revenues (14.3% in fiscal year 2014) from landing and facility rental fees paid by the airlines using the Airport. The financial strength and stability of the airlines using the Airport, together with numerous other factors, most notably demand for airline services by passengers, influence the level of aviation activity at the Airport. In addition, individual airline decisions regarding level of service at the Airport can be expected to affect passenger activity at the Airport, as well as be affected by passenger activity at the Airport. The level of passenger activity at the Airport is reasonably expected to impact the level of other sources of revenue for the Airport, such as parking revenues, concession charges, passenger facility fees, and customer facility charges. Delta Air Lines and US Airways, operating either through their mainline services or through subsidiaries and other affiliates, are currently the only airlines serving the Airport. In December 2013, US Airways merged with American Airlines, and the two carriers are now in the final stages of integrating their operations as one airline under the American Airlines name. For the year ended December 31, 2014, Delta accounted for 59.4% of -55- ATLANTA 5621272.6 commercial airline enplanements, and US Airways accounted for 39.8% of commercial airline enplanements, and commercial charters accounted for 0.8% of commercial airline enplanements. For the year ended December 31, 2014, Delta Air Lines accounted for approximately 60.7% of the total airline rentals, fees, and charges component of the Airport’s operating revenues and US Airways accounted for approximately 39.3% of the total airline rentals, fees, and charges component of the Airport’s operating revenues. See “THE AIRPORT - Airlines Providing Service” herein. The Consolidated Government cannot predict the duration or extent of reductions and disruptions in air travel or the extent of any adverse impact on Airport revenues, general Airport operations, or the financial condition of the Airport that might result from financial difficulties of Delta Air Lines and US Airways or any reduction in service of any of these airlines at the Airport. No assurances can be given that these airlines will continue operations at the Airport or maintain their current level of activity at the Airport. If one or more of these airlines discontinues operations at the Airport, its current level of activity might not be replaced by other carriers. Effect of Airline Bankruptcies General The profitability of the airline industry has deteriorated since 2000, with many airlines reporting substantial financial losses and several airlines filing for bankruptcy protection, due not only to the events of September 11, 2001, but also to a general economic slowdown, which commenced prior to the events of September 11, 2001, increased aviation fuel costs, weather conditions, labor disruptions, and other factors. Since December 2000, several airlines have filed for and have subsequently emerged from bankruptcy protection, including United, Continental (which has merged with United), Delta (which operates at the Airport), Northwest (which has merged with Delta), US Airways (which operates at the Airport and has merged with American Airlines), and, most recently, American Airlines in 2011. Additional bankruptcies, liquidations, or major restructurings of other airlines could occur. It is not possible to predict the impact on the Airport of any future bankruptcies, liquidations, or major restructurings of the airlines operating at the Airport or other airlines. Because of the limited number of airlines that operate at the Airport, financial difficulties of any one of those airlines could directly impact the financial condition of the Airport. See “INVESTMENT CONSIDERATIONS - Levels of Airline Traffic and Financial Condition of the Airlines and - Importance of Delta and US Airways at the Airport” herein. Potential investors are urged to review the airlines’ financial information on file with the SEC and DOT. See “THE AIRPORT - Availability of Information Concerning Individual Airlines” herein. Assumption or Rejection of Airline Agreements An airline that has executed an Airline Agreement or other executory contract with the Consolidated Government and seeks protection under the U.S. bankruptcy laws must assume or reject (a) its Airline Agreement within 120 days after the bankruptcy filing (subject to court approval, a one-time 90-day extension is allowed (further extensions are subject to the consent of the Consolidated Government)), and (b) its other executory contracts with the Consolidated Government prior to the confirmation of a plan of reorganization. In the event of assumption and/or assignment of any agreement to a third party, the airline or any assignee would be required to cure any pre- and post-petition monetary defaults and provide adequate assurance of future performance under the applicable Airline Agreement or other agreements. Rejection of an Airline Agreement or other agreement or executory contract will give rise to an unsecured claim of the Consolidated Government for damages, the amount of which in the case of an Airline Agreement or other agreement is limited by the United States Bankruptcy Code generally to the amounts unpaid prior to bankruptcy plus the greater of: (i) one year of rent; or (ii) 15% of the total remaining lease payments, not to exceed three years. However, the amount ultimately received in the event of a rejection of an Airline Agreement or other agreement could be considerably less than the maximum amounts allowed under the United States Bankruptcy Code. In addition, pre-petition payments made by an airline in bankruptcy within 90 days of filing a bankruptcy case could be deemed to be an “avoidable preference” under the United States Bankruptcy Code and thus subject to recapture by the debtor or its trustee in bankruptcy. In general, risks associated with bankruptcy include risks of substantial delay in payment or of reduced or non-payment and the risk that the Consolidated Government may be delayed or prohibited from enforcing any of its remedies under the agreements with a bankrupt airline. With respect to an airline in bankruptcy proceedings in a foreign country, the Consolidated Government is unable to predict what types of orders and/or relief could be issued by foreign bankruptcy tribunals, or the extent to which any such orders would be enforceable in the United States. -56- ATLANTA 5621272.6 Pre-Petition Obligations During the pendency of a bankruptcy proceeding, a debtor airline may not, absent a court order, make any payments to the Consolidated Government on account of goods and services provided prior to the bankruptcy. Thus, the Consolidated Government’s stream of payments from a debtor airline would be interrupted to the extent of pre-petition goods and services, including accrued rent and landing fees. PFCs Pursuant to the PFC Act, the FAA has approved the Consolidated Government’s applications to require the airlines to collect and remit to the Consolidated Government a $4.50 PFC on each enplaning revenue passenger at the Airport. The PFC Act provides that PFCs collected by the airlines constitute a trust fund held for the beneficial interest of the eligible agency (i.e., the Consolidated Government) imposing the PFCs, except for any handling fee (which currently is $0.11 per PFC) or retention of interest collected on unremitted proceeds. In addition, federal regulations require airlines to account for PFC collections separately and to disclose the existence and amount of funds regarded as trust funds in their respective financial statements. However, the airlines, provided they are not under bankruptcy protection, are permitted to commingle PFC collections with other revenues. The bankruptcy courts have not fully addressed such trust arrangements. Therefore, the Consolidated Government cannot predict how a bankruptcy court might rule on this matter in the event of a bankruptcy filing by one of the airlines operating at the Airport. The PFC Act requires an airline in bankruptcy protection to segregate PFC collections from all of its other revenues. It is possible that the Consolidated Government could be held to be an unsecured creditor with respect to unremitted PFCs held by an airline that has filed for bankruptcy protection. Additionally, the Consolidated Government cannot predict whether an airline operating at the Airport that files for bankruptcy protection would have properly accounted for the PFCs owed to the Consolidated Government or whether the bankruptcy estate would have sufficient moneys to pay the Consolidated Government in full for the PFCs owed by such airline. Costs of Aviation Fuel Airline earnings are significantly affected by changes in the price of aviation fuel. According to Airlines for America (an airline trade association, formerly known as Air Transport Association of America), fuel, along with labor costs, is one of the largest cost components of airline operations, and continues to be an important and uncertain determinate of an air carrier’s operating economics. There has been no shortage of aviation fuel since the “fuel crisis” of 1974, but any increase in fuel prices causes an increase in airline operating costs. Although some airlines hedge fluctuations in fuel prices through the purchase of futures contracts and although fuel costs have dropped significantly in recent years, the substantial increase in fuel prices over the past decade had a significant impact on profitability and airline aircraft route decisions at the Airport, and future fuel price increases or sustained higher prices have affected and likely will continue to affect the financial conditions of airlines, their capacity and route decisions and level of service the airlines provide to the Airport. Fuel prices continue to be susceptible to, among other factors, political unrest in various parts of the world (particularly in the oil-producing nations in the Middle East and North Africa), Organization of Petroleum Exporting Countries policy, the rapid growth of economies such as China and India, the levels of inventory carried by industries, the amounts of reserves maintained by governments, disruptions to production and refining facilities and weather. According to Airlines for America, for the fourth quarter of 2014, jet fuel accounted for approximately 33% of the airline industry’s operating expenses. The price of aviation fuel rose to an all-time high of approximately $3.70 per gallon in July 2008. Airline Mergers; Consolidation The airline industry continues to evolve as a result of competition and changing demand patterns and it is possible the airlines serving the Airport could consolidate operations through acquisition, merger, alliances, and code share sales strategies. For example, US Airways and America West merged in 2005, Delta and Northwest merged in 2008, and United and Continental merged in 2010. In 2011, Southwest and AirTran Airways completed their merger, and the merger between US Airways and American was concluded in 2014, although American Airlines and US Airways continue to operate as separate airlines until their operations have been fully integrated. These mergers, as well as future mergers, could change airline service patterns at the Airport, including a possible reduction in service at the Airport. The Consolidated Government cannot predict what impact, if any, such consolidations will have on airline traffic at the Airport. -57- ATLANTA 5621272.6 Structural Changes in the Travel Market Many factors have combined to alter consumer travel patterns. The threat of terrorism against the United States remains high. As a result, the federal government has mandated various security measures that have resulted in new security taxes and fees and longer passenger processing and wait times at airports. Both add to the costs of air travel and make air travel less attractive to consumers relative to ground transportation, especially to short-haul destinations. Additionally, consumers have become more price-sensitive. Efforts of airlines to stimulate traffic by heavily discounting fares have changed consumer expectations regarding airfares. Consumers have come to expect extraordinarily low fares. In addition, the availability of fully transparent price information on the internet now allows quick and easy comparison shopping, which has changed consumer purchasing habits. Consumers have shifted from purchasing paper tickets from travel agencies or airline ticketing offices to purchasing electronic tickets over the internet. This has made pricing and marketing even more competitive in the U.S. airline industry. Finally, smaller corporate travel budgets, combined with the higher time costs of travel, have made business customers more amenable to communications substitutes such as tele- and video- conferencing. Aviation Security and Health Safety Concerns Concerns about the safety of airline travel and the effectiveness of security precautions, particularly in the context of potential international hostilities and terrorist attacks, may influence passenger travel behavior and air travel demand. These concerns intensified in the aftermath of the events of September 11, 2001 and again in 2014 following the high profile disappearance of Malaysia Airlines Flight 370 and the crash of Malaysia Airlines Flight 17. Travel behavior may be affected by anxieties about the safety of flying and by the inconveniences and delays associated with more stringent security screening procedures, both of which may give rise to the avoidance of air travel generally and the switching from air to surface travel modes. Safety concerns in the aftermath of the terrorist attacks in September 2001 were largely responsible for the steep decline in airline travel nationwide in 2002. Since 2001, government agencies, airlines, and airport operators have upgraded security measures to guard against future terrorist incidents and maintain confidence in the safety of airline travel. These measures include strengthened aircraft cockpit doors, changed flight crew procedures, increased presence of armed sky marshals, federalization of airport security functions under the TSA, more effective dissemination of information about threats, more intensive screening of passengers, baggage, and cargo, and deployment of new screening technologies. The airlines and the federal government were primarily responsible for, and bore most of the capital costs associated with, implementing the new security measures. No assurance can be given that these precautions will be successful. Also, the possibility of intensified international hostilities and further terrorist attacks involving or affecting commercial aviation are a continuing concern that may affect future travel behavior and airline passenger demand. Public health and safety concerns have also affected air travel demand from time to time. In 2003, concerns about the spread of severe acute respiratory syndrome (SARS) led public health agencies to issue advisories against nonessential travel to certain regions of the world. In 2009, while the United States Centers for Disease Control and Prevention (“CDC”) and the World Health Organization (“WHO”) did not recommend that people avoid domestic or international travel, concerns about the spread of influenza caused by the H1N1 virus reduced international air travel, particularly to and from Mexico and Asia. More recently, in 2014, an outbreak of Ebola in West Africa and the discovery of a patient and health care workers infected with Ebola in the United States have again raised concerns about the spread of communicable disease through air travel. While the CDC and WHO have not yet recommended travelers avoid domestic or international travel, in the event the CDC or WHO recommends travel restrictions, or should another outbreak occur, prospective investors should take into consideration the impact that such developments may have on activity levels at the Airport and the potential financial impact on the airlines that serve the Airport. Regulations and Restrictions Affecting the Airport The operations of the Airport are affected by a variety of contractual, statutory, and regulatory restrictions and limitations, including, without limitation, the provisions of its airline agreements, the federal acts authorizing the imposition, collection, and use of PFCs, and extensive federal legislation and regulations applicable to all airports in the United States. In the aftermath of the events of September 11, 2001, the Airport also has been required to implement enhanced security measures mandated by the FAA and the Department of Homeland Security and Department of Aviation management. See “INVESTMENT CONSIDERATIONS - Aviation Security and Health Safety Concerns” herein. It is not possible to predict whether future restrictions or limitations on Airport operations will be imposed, whether future legislation or regulations will affect anticipated federal funding or PFC collections for capital projects for the Airport, whether additional requirements will be funded by the federal government or require -58- ATLANTA 5621272.6 funding by the Consolidated Government, or whether such restrictions or legislation or regulations would adversely affect Airport revenues. Expiration and Possible Termination of Revenue-Producing Agreements Pursuant to its Airline Agreement, each Signatory Airline has agreed to pay rates and charges for its use of the Airport. The current Airline Agreements expire on September 25, 2016, but may be renewed for two renewal terms of one-year each and may be terminated by the Consolidated Government or, under certain conditions, by a Signatory Airline before such expiration. Upon a Signatory Airline’s ceasing to provide service at the Airport, the Aviation Commission’s is entitled to terminate the Airline Agreement with the result that the Signatory Airline has no obligation to make payments with respect to any period after such termination. The Consolidated Government cannot provide any assurance that the Airline Agreements will be renewed and, if renewed, what the terms of the renewed Airline Agreement will be. In addition, the non-airline agreements, pursuant to which other users of the Airport agreed to pay rates and charges for its use, are also subject to expiration by their terms or earlier termination under certain conditions. The Aviation Commission intends to negotiate new non-airline agreements as soon as possible after any such expiration or earlier termination. No assurance can be given as to when or whether any such agreements can be negotiated or what terms such agreements will provide. See “THE AIRPORT - Airline and Other Revenue Sources” herein. Competition The Airport’s Air Trade Area is served by several other carrier airports, including a large-hub airport at Atlanta and small-hub airports at Columbia, South Carolina, Charleston, South Carolina, and Savannah, Georgia. Service from the Airport is subject to competition from other forms of transportation. In addition, teleconference, videoconference, and web-based meetings continue to improve in quality and price to the extent that they are often satisfactory alternatives to face-to-face meetings, and these modes of communication may potentially reduce the need for business travel throughout the aviation industry, including the Airport. Furthermore, the ability of the Airport to continue to attract passengers and air carriers is dependent on factors such as cost and convenience. Increased costs resulting from the Airport’s capital improvement program and compliance with federally mandated security requirements could result in the Airport’s being at a competitive disadvantage relative to other airports in the Airport’s Air Trade Area, as well as other modes of transportation. Unavailability of Certain Insurance Coverage The Consolidated Government no longer has insurance for war casualty or terrorist acts. The Consolidated Government was insured on September 11, 2001, but that coverage was terminated as a result of the events of September 11, 2001 and has not yet been replaced because, as of the date of this Official Statement, such insurance is not available at reasonable costs and in meaningful amounts. No assurance can be given that such insurance will be available at reasonable costs and in meaningful amounts in the future, or that to the extent that the Consolidated Government is uninsured, it will be able to satisfy any claims in the event of a future war or terrorist attack. Federal Funding; Impact of Federal Sequestration The Airport depends upon federal funding not only in connection with grants and PFC authorizations but also because it is federal funding that provides for TSA, FIS, air traffic control and other FAA staffing and facilities. The FAA currently operates under the FAA Modernization and Reform Act of 2012, which is scheduled to expire in 2015. That statute was the first long-term FAA authorization since 2007 and ended a period of 23 short-term extensions of FAA authority, including a two-week, partial shutdown of all FAA facilities. Federal funding is also impacted by sequestration under the federal Budget Control Act of 2011. Except to the extent changed by Congress from time to time, sequestration is a multi-year process and could continue to affect FAA, TSA, and Customs and Border control budgets and staffing, which results in staffing shortages and furloughs and traffic delays at the Airport and also nationwide. Some of the TSA funding shortages are being addressed by increasing the amount (and removing the cap) on the security fees and tickets, but such fees have been controversial and no assurance can be given that such fees will be sufficient or that the increased ticket costs will not result in lower passenger enplanements. -59- ATLANTA 5621272.6 LEGAL MATTERS Pending Litigation The Consolidated Government, like other similar bodies, is subject to a variety of suits and proceedings arising in the ordinary conduct of the affairs of the Airport. The Consolidated Government, after reviewing the current status of all pending and threatened litigation relating to the Airport with its special counsel, Shepard, Plunkett, Hamilton & Boudreaux, LLP, and its Airport counsel, Freeman Mathis & Gary, LLP, believes that, while the outcome of litigation cannot be predicted, the final settlement of all lawsuits that have been filed and of any actions or claims pending or threatened against the Consolidated Government relating to the Airport or its officials in such capacity are adequately covered by insurance or will not have a material adverse effect upon the financial position or results of operations of the Airport. There is no litigation now pending or, to the knowledge of the Consolidated Government, threatened against the Consolidated Government that restrains or enjoins the issuance or delivery of the Series 2015 Bonds, the pledge of the Pledged Revenues to secure the Series 2015 Bonds, or the use of the proceeds of the Series 2015 Bonds or that questions or contests the validity of the Series 2015 Bonds or the proceedings and authority under which they are to be issued and secured. Neither the creation, organization, or existence of the Consolidated Government, nor the title of the present members or other officials of the Consolidated Government to their respective offices, is being contested or questioned. Opinion of Bond Counsel Certain legal matters incident to the authorization and issuance of the Series 2015 Bonds are subject to the approval of Murray Barnes Finister LLP, Atlanta, Georgia, Bond Counsel, whose approving opinion will be available at the time of delivery of the Series 2015 Bonds. It is anticipated that the approving opinion will be in substantially the form attached hereto as Appendix D. The Internal Revenue Code of 1986, as amended (the “Code”), contains a number of requirements and restrictions that apply to the Series 2015 Bonds. These include restrictions on investments, requirements for periodic payment of arbitrage profits to the United States, requirements regarding the use of the Series 2015 Bond proceeds, and other restrictions and requirements. Failure to comply with certain of such requirements and restrictions may cause interest on the Series 2015 Bonds to become subject to federal income taxation, retroactive, in some cases, to the date of issuance of the Series 2015 Bonds. In the opinion of Bond Counsel, under existing statutes, rulings, and court decisions and under applicable regulations, interest on the Series 2015A Bonds is excluded from gross income for federal income tax purposes and is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations; provided, however, with respect to corporations (as defined for federal income tax purposes), such interest is taken into account in determining adjusted current earnings for purposes of computing the alternative minimum tax imposed on such corporations. No opinion will be expressed with respect to any other federal tax consequences of the receipt or accrual of interest on the Series 2015A Bonds. In the opinion of Bond Counsel, under existing statutes, rulings, and court decisions and under applicable regulations, interest on the Series 2015B Bonds is excluded from gross income for federal income tax purposes except for any period during which a Series 2015B Bond is held by a “substantial user” of the facilities financed with the proceeds of the Series 2015B Bonds or a “related person” within the meaning of Section 147(a) of the Code. The interest on the Series 2015B Bonds will be treated as an item of tax preference for purposes of calculating the federal alternative minimum tax imposed on corporations and taxpayers other than corporations, and will be taken into account in determining adjusted current earnings for the purpose of computing the alternative minimum tax imposed upon certain corporations. No opinion will be expressed with respect to any other federal tax consequences of the receipt or accrual of interest on the Series 2015B Bonds. Ownership of the Series 2015 Bonds may result in other collateral federal income tax consequences to certain taxpayers, including without limitation, corporations subject to the environmental tax, banks, thrift institutions and other financial institutions, foreign corporations that conduct a trade or business in the United States, property and casualty insurance corporations, S corporations, individual recipients of social security or railroad retirement benefits, and taxpayers who may be deemed to have incurred or continued indebtedness to purchase or carry the Series 2015 Bonds. Purchasers of the Series 2015 Bonds should consult their tax advisors as to the applicability of any such collateral tax consequences. In rendering its opinion that the interest on the Series 2015 Bonds is not includable in gross income for federal income tax purposes, Bond Counsel will (i) rely as to certain factual matters upon representations of the Consolidated Government with respect to, among other things, the use of the proceeds of the Series 2015 Bonds -60- ATLANTA 5621272.6 without undertaking to verify the same by independent investigation, and (ii) assume the continued compliance by the Consolidated Government with its covenants relating to the use of the proceeds of the Series 2015 Bonds and compliance with other requirements of the Code. The inaccuracy of any such representations or noncompliance with such covenants may cause interest on the Series 2015 Bonds to become includable in gross income for federal income tax purposes retroactive to the date of issuance of the Series 2015 Bonds. In the opinion of Bond Counsel, under existing statutes, interest on the Series 2015 Bonds is exempt from all present state income taxation within the State of Georgia. Interest on the Series 2015 Bonds may or may not be subject to state or local income taxation in jurisdictions other than Georgia under applicable state or local laws. Purchasers of the Series 2015 Bonds should consult their tax advisors as to the taxable status of the Series 2015 Bonds in a particular state or local jurisdiction other than Georgia. Changes in Federal and State Tax Law From time to time, legislative proposals may be made to change federal or state law that, if enacted, would eliminate the exclusion of interest on tax-exempt bonds from gross income for federal income tax purposes or any state law exemption or that would otherwise diminish the advantages of ownership of tax-exempt bonds for one or more categories of taxpayers for federal or state law purposes. Any such proposal could, in certain circumstances, even become effective with respect to tax-exempt bonds issued or purchased prior to enactment or announcement of the proposal. Recent federal tax proposals have included a surtax on a measure of income that included interest on tax-exempt bonds and a proposal that diminished the “tax value” of the tax exemption for higher-income taxpayers whose income as adjusted would be subject to federal income tax at higher marginal rates. Among these proposals is one included in the Obama Administration’s Fiscal Year 2016 Revenue Proposals. This Obama proposal would, in effect, limit the “tax value” of specified deductions and exclusions, including interest on federally tax-exempt bonds, to 28% of such items. These items would be added as modifications to a taxpayer’s adjusted gross income. If the marginal federal income tax rate(s) on this measure of income exceeded 28% for an affected taxpayer, an additional tax would be imposed on the amount of such items at a rate (or rates) equal to the excess of the taxpayer's abovementioned margin rate(s) over 28%. As so proposed, this proposal would be effective for taxable years beginning after 2015. This proposal, and possibly other proposals, if enacted, would adversely affect the ownership of federally tax-exempt bonds, including the ownership of federally tax-exempt bonds issued or purchased prior to enactment or announcement of the proposal. In addition, from time to time, administrative actions, including regulations, rulings, and other administrative authorities, may be announced or proposed and litigation may be commenced or threatened that, if they become a legal authority, could eliminate or diminish the advantages of ownership of tax-exempt bonds for one or more categories of taxpayers for federal or state law purposes. The mere existence or announcement of any such legislative proposal or commencement or threatening of any such administrative action or litigation could impair the marketability or market value of the Series 2015 Bonds, at least temporarily, whether or not it is ultimately enacted into law or becomes a legal authority. The opinion expressed by Bond Counsel is based upon the U.S. Constitution and the Constitution of the State of Georgia, implemented by statutes enacted thereunder, and as interpreted by judicial, regulatory, and other administrative authorities existing as of the date of issuance and delivery of the Series 2015 Bonds. Bond Counsel expresses no opinion as of any date subsequent thereto or with respect to any proposed or pending legislation or proposed, pending, or threatened administrative actions or litigation. Potential purchasers of the Series 2015 Bonds should consult their tax advisors regarding any pending or proposed legislation, administrative action, or litigation of the type referred to or characterized above as part of their investment decision and thereafter, as appropriate. Validation Proceedings The State of Georgia will institute proceedings in the Superior Court of Richmond County, Georgia to validate the Series 2015 Bonds and the security therefor. The State of Georgia will be the plaintiff in the proceeding, and the Consolidated Government will be the defendant. A final judgment confirming and validating the Series 2015 Bonds and the security therefor will be entered before the Series 2015 Bonds are issued and delivered. Under Georgia law, the judgment of validation will be forever conclusive against the Consolidated Government upon the validity of the Series 2015 Bonds and the security therefor. Closing Certificates At closing of the sale of the Series 2015 Bonds by the Underwriter, the Consolidated Government will deliver to the Underwriter a certificate (1) that no litigation is pending or threatened against it that would have a material effect on the issuance or validity of the Series 2015 Bonds or the security for the Series 2015 Bonds or, except as disclosed in this Official Statement, on the financial condition of the Airport, and (2) that the information contained in this Official Statement does not contain any misstatement of a material fact and does not omit to state any -61- ATLANTA 5621272.6 material fact necessary to make the statements herein contained, in light of the circumstances under which they were made, not misleading. MISCELLANEOUS Ratings [TO BE PROVIDED] Underwriting The Series 2015 Bonds will be purchased for re-offering at negotiated sale by Raymond James & Associates, Inc. (the “Underwriter”), from the Consolidated Government at an aggregate purchase price of ____ percent of the principal amount of the Series 2015 Bonds. The Underwriter will enter into a Bond Purchase Agreement which provides that the Underwriter will purchase all of the Series 2015 Bonds, if any are purchased. The obligation of the Underwriter to accept delivery of the Series 2015 Bonds will be subject to various conditions contained in the Bond Purchase Agreement. The Underwriter intends to offer the Series 2015 Bonds to the public initially at the offering prices set forth on the cover page of this Official Statement, which offering prices may subsequently be changed from time to time by the Underwriter without any requirement of prior notice. The offering prices set forth on the cover page of this Official Statement average $____ per $1,000 face amount of the Series 2015 Bonds in excess of the purchase price to be paid to the Consolidated Government by the Underwriter. The Underwriter will receive no fee (other than the anticipated profits described in the preceding sentence) from the Consolidated Government for underwriting the Series 2015 Bonds. The Underwriter has reserved the right to permit other securities dealers who are members of the Financial Industry Regulatory Authority to assist in selling the Series 2015 Bonds. The Underwriter may offer and sell the Series 2015 Bonds to certain dealers (including dealers depositing Bonds into investment trusts) at prices lower than the public offering prices set forth on the cover page of this Official Statement or otherwise allow concessions to such dealers who may re-allow concessions to other dealers. Any discounts or commissions that may be received by such dealers in connection with the sale of the Series 2015 Bonds will be deducted from the Underwriter’s underwriting profits. Financial Advisor The Consolidated Government has employed Public Financial Management, Inc., Atlanta, Georgia, as its Financial Advisor in connection with the issuance of the Series 2015 Bonds. Independent Auditors The financial statements of the Airport as of December 31, 2014 and 2013 and for the years then ended, attached hereto as part of Appendix A, have been audited by Mauldin & Jenkins LLC, Macon, Georgia, independent certified public accountants, to the extent and for the periods indicated in their report thereon, which appears in Appendix A. Such financial statements have been included herein in reliance upon the report of Mauldin & Jenkins LLC. Summary of Continuing Disclosure Certificate Definitions The following capitalized terms have the following meanings for purposes of the Disclosure Certificate: “Annual Report” means any Annual Report provided by the Consolidated Government pursuant to the provisions of the Disclosure Certificate described herein under the caption “MISCELLANEOUS - Summary of Continuing Disclosure Certificate -- Provision of Annual Reports and -- Content of Annual Reports.” “Bondholders” means the beneficial owners of the Series 2015 Bonds. “EMMA” means the Electronic Municipal Market Access system of the MSRB. -62- ATLANTA 5621272.6 “Dissemination Agent” means the Consolidated Government, or any successor Dissemination Agent designated in writing by the Consolidated Government and that has filed with the Consolidated Government a written acceptance of such designation. “Fiscal Year” means any period of twelve consecutive months adopted by the Consolidated Government as its fiscal year for financial reporting purposes and initially means the period beginning on January 1 of each calendar year and ending on December 31 of the same calendar year. “Listed Events” means any of the events listed in the provisions of the Disclosure Certificate described herein under the caption “MISCELLANEOUS - Summary of Continuing Disclosure Certificate - Reporting of Significant Events.” “MSRB” means the Municipal Securities Rulemaking Board. “Rule” means Rule 15c2-12(b)(5) adopted by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as the same may be amended from time to time. Provision of Annual Reports The Consolidated Government agreed in the Disclosure Certificate to, or to cause the Dissemination Agent to, not later than 210 days after the end of each Fiscal Year, commencing with Fiscal Year 2014, provide to the MSRB in an electronic format as prescribed by the MSRB (which, as of the date hereof, is EMMA) an Annual Report that is consistent with the requirements of the provisions of the Disclosure Certificate described below under the caption “MISCELLANEOUS - Summary of Continuing Disclosure Certificate -- Content of Annual Reports.” Not later than fifteen business days prior to such date, the Consolidated Government agreed to provide the Annual Report to the Dissemination Agent (if other than the Consolidated Government). The Annual Report may be submitted as a single document or as separate documents comprising a package, and may cross reference other information as provided in the provisions of the Disclosure Certificate described below under the caption “MISCELLANEOUS - Summary of Continuing Disclosure Certificate -- Content of Annual Reports;” provided that the audited financial statements of the Airport may be submitted separately from the balance of the Annual Report. If the Consolidated Government is unable to provide to the MSRB an Annual Report by the date required as described above, the Consolidated Government must send a notice to the MSRB in an electronic format as prescribed by the MSRB (which, as of the date hereof, is EMMA) of such failure. The Dissemination Agent is required to: (i) determine each year prior to the date for providing the Annual Report the appropriate electronic format prescribed by the MSRB for filing with the MSRB and the proper form for such filing; and (ii) if the Dissemination Agent is other than the Consolidated Government, file a report with the Consolidated Government certifying that the Annual Report has been provided pursuant to the Disclosure Certificate and stating the date it was provided. The Consolidated Government is required to promptly file a notice of any change in its Fiscal Year with the MSRB in an electronic format as prescribed by the MSRB (which, as of the date hereof, is EMMA). If the audit report specified in clause (1) of the provisions of the Disclosure Certificate described below under the caption “MISCELLANEOUS - Summary of Continuing Disclosure Certificate -- Content of Annual Reports” is not submitted as part of the Annual Report to the MSRB pursuant to the Disclosure Certificate, the Consolidated Government agreed to, or to cause the Dissemination Agent to, provide to the MSRB in an electronic format as prescribed by the MSRB (which, as of the date hereof, is EMMA) such audit report, together with the audited financial statements of the Airport to which such audit report relates, when they are available to the Consolidated Government. Content of Annual Reports The Disclosure Certificate requires the Consolidated Government’s Annual Report to contain or incorporate by reference the following: (1) the financial statements of the Airport for the preceding Fiscal Year, which must be prepared in accordance with generally accepted accounting principles, as in effect from time to time, and which must be accompanied by an audit report, if available at the time of submission of the Annual Report to each Repository pursuant to the Disclosure Certificate, resulting from an audit conducted by an independent certified public accountant or firm of independent certified public accountants in conformity with generally accepted auditing standards; -63- ATLANTA 5621272.6 (2) if generally accepted accounting principles have changed since the last Annual Report was submitted pursuant to the Disclosure Certificate and if such changes are material to the Airport, a narrative explanation describing the impact of such changes on the Airport; and (3) information for the preceding Fiscal Year regarding the following categories of financial information and operating data of the Airport: (A) market share by airline; (B) enplanements by airline, (C) aircraft operations, (D) landed weight by airline, (E) primary origin and destination passenger markets for the Airport, (F) Jet-A fuel sales and deliveries by customer class, based on volume, (G) net revenue from Jet-A fuel sales and deliveries by customer class, (H) historical debt service coverage ratio, (I) total costs of capital improvements and funding sources, and (J) the insurance coverage of the Airport. Any or all of the items listed above may be incorporated by reference from other documents, including official statements of debt issues of the Consolidated Government or related public entities, which are available to the public on the MSRB’s internet web site or filed with the Securities and Exchange Commission. The Consolidated Government must clearly identify each such other document so incorporated by reference. Reporting of Significant Events The Disclosure Certificate governs the giving of notices of the occurrence of any of the following events with respect to the Series 2015 Bonds: (1) Principal and interest payment delinquencies; (2) Non-payment related defaults, if material; (3) Unscheduled draws on debt service reserves reflecting financial difficulties; (4) Unscheduled draws on credit enhancements reflecting financial difficulties; (5) Substitution of credit or liquidity providers, or their failure to perform; (6) Adverse tax opinions, the issuance by the Internal Revenue Service of proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701-TEB) or other material notices or determinations with respect to the tax status of the Series 2015 Bonds, or other material events affecting the tax status of the Series 2015 Bonds; (7) Modifications to rights of Bondholders, if material; (8) Bond calls, if material, and tender offers; (9) Defeasances; (10) Release, substitution, or sale of property securing repayment of the Series 2015 Bonds, if material; (11) Rating changes; (12) Bankruptcy, insolvency, receivership, or similar event of the Consolidated Government; (13) The consummation of a merger, consolidation, or acquisition involving the Consolidated Government or the sale of all or substantially all of the assets of the Consolidated Government, other than in the ordinary course of business, the entry into a definitive agreement to undertake such an action or the termination of a definitive agreement relating to such actions, other than pursuant to its terms, if material; and (14) Appointment of a successor or additional trustee or the change of name of a trustee, if material. For purposes of the event identified in clause 12, the event is considered to occur when any of the following occur: the appointment of a receiver, fiscal agent, or similar officer for the Consolidated Government in a proceeding under the U.S. Bankruptcy Code or in any other proceeding under state or federal law in which a court or governmental authority has assumed jurisdiction over substantially all of the assets or business of the Consolidated Government, or if such jurisdiction has been assumed by leaving the existing governing body and officials or officers in possession but subject to the supervision and orders of a court or governmental authority, or the entry of an order confirming a plan of reorganization, arrangement, or liquidation by a court or governmental authority having supervision or jurisdiction over substantially all of the assets or business of the Consolidated Government. -64- ATLANTA 5621272.6 If the Consolidated Government obtains knowledge of the occurrence of a Listed Event, the Consolidated Government has agreed to file in a timely manner not in excess of ten business days after such occurrence a notice of such occurrence with the MSRB in an electronic format as prescribed by the MSRB (which, as of the date hereof, is EMMA). Notwithstanding the foregoing, notice of Listed Events described in clauses 8 (other than tender offers) and 9 need not be given under the Disclosure Certificate any earlier than the notice (if any) of the underlying event is given to the owners of the affected Series 2015 Bonds pursuant to the Bond Resolution. Termination of Reporting Obligation The Consolidated Government’s obligations under the Disclosure Certificate will terminate upon the legal defeasance, prior redemption, or payment in full of all of the Series 2015 Bonds. Dissemination Agent The Consolidated Government may, from time to time, appoint or engage a Dissemination Agent to assist it in carrying out its obligations under the Disclosure Certificate, and may discharge any such Dissemination Agent, with or without appointing a successor Dissemination Agent. Amendment; Waiver Notwithstanding any other provision of the Disclosure Certificate, the Consolidated Government may amend the Disclosure Certificate, and any provision of the Disclosure Certificate may be waived, if (a) such amendment or waiver is made in connection with a change in circumstances that arises from a change in legal requirements, change in law, or change in the identity, nature, or status of the obligor on the Series 2012 Bonds, or type of business conducted; (b) such amendment or waiver does not materially impair the interests of the Bondholders, as determined either by an unqualified opinion of nationally recognized bond counsel filed with the Consolidated Government or by the approving vote of the Bondholders owning more than two-thirds in aggregate principal amount of the Series 2012 Bonds outstanding at the time of such amendment or waiver; and (c) such amendment or waiver is supported by an opinion of counsel expert in federal securities laws, to the effect that such amendment or waiver would not, in and of itself, cause the undertakings in the Disclosure Certificate to violate the Rule if such amendment or waiver had been effective on the date of the Disclosure Certificate but taking into account any subsequent change in or official interpretation of the Rule, as well as any change in circumstances. If any provision of the Disclosure Certificate described herein under the caption “MISCELLANEOUS - Summary of Continuing Disclosure Certificate - Content of Annual Reports” is amended or waived, the first Annual Report containing any amended, or omitting any waived, operating data or financial information must explain, in narrative form, the reasons for the amendment or waiver and the impact of the change in the type of operating data or financial information being provided. If the provisions of the Disclosure Certificate described herein under the caption “MISCELLANEOUS - Summary of Continuing Disclosure Certificate - Content of Annual Reports” specifying the accounting principles to be followed in preparing the financial statements of the Airport are amended or waived, the Annual Report for the year in which the change is made must present a comparison between the financial statements or information prepared on the basis of the new accounting principles and those prepared on the basis of the former accounting principles. The comparison must include a qualitative discussion of the differences in the accounting principles and the impact of the change in the accounting principles on the presentation of the financial information, in order to provide information to the Bondholders to enable them to evaluate the ability of the Consolidated Government to meet its obligations. To the extent reasonably feasible, the comparison must also be quantitative. The Consolidated Government must file a notice of the change in the accounting principles with the MSRB in an electronic format as prescribed by the MSRB (which, as of the date hereof, is EMMA) on or before the effective date of any such amendment or waiver. Additional Information Nothing in the Disclosure Certificate will prevent the Consolidated Government from disseminating any other information, using the means of dissemination set forth in the Disclosure Certificate or any other means of communication, or including any other information in any Annual Report or notice of occurrence of a Listed Event, in addition to that which is required by the Disclosure Certificate. If the Consolidated Government chooses to include any information in any Annual Report or notice of occurrence of a Listed Event in addition to that which is -65- ATLANTA 5621272.6 specifically required by the Disclosure Certificate, the Consolidated Government will have no obligation under the Disclosure Certificate to update such information or include it in any future Annual Report or notice of occurrence of a Listed Event. Default In the event of a failure of the Consolidated Government to comply with any provision of the Disclosure Certificate, any Bondholder may take such actions as may be necessary and appropriate, including seeking mandamus or specific performance by court order, to cause the Consolidated Government to comply with its obligations under the Disclosure Certificate. A default under the Disclosure Certificate will not be deemed an “event of default” or “default” under the Bond Resolution, and the sole remedy under the Disclosure Certificate in the event of any failure of the Consolidated Government to comply with the Disclosure Certificate will be an action to compel performance. A court may decide not to order the specific performance of the covenants contained in the Disclosure Certificate. Identifying Information All documents provided to the MSRB pursuant to the Disclosure Certificate will be accompanied by identifying information prescribed by the MSRB. Additional Information Use of the words “shall,” “must,” or “will” in this Official Statement in summaries of documents or laws to describe future events or continuing obligations is not intended as a representation that such event will occur or obligation will be fulfilled but only that the document or law contemplates or requires such event to occur or obligation to be fulfilled. Any statements made in this Official Statement involving estimates or matters of opinion, whether or not so expressly stated, are set forth as such and not as representations of fact, and no representation is made that any of the estimates or matters of opinion will be realized. Neither this Official Statement nor any statement that may have been made orally or in writing is to be construed as a contract with the owners of the Series 2015 Bonds. -66- ATLANTA 5621272.6 CERTIFICATION The execution and delivery of this Official Statement, and its distribution and use by the Underwriter, have been duly authorized and approved by the Consolidated Government. AUGUSTA, GEORGIA By: Mayor, Augusta-Richmond County Commission By: Chairman, Augusta Aviation Commission ATLANTA 5621272.6 APPENDIX A FINANCIAL STATEMENTS OF THE AIRPORT The financial statements of the Airport as of December 31, 2014 and 2013 and for the years then ended, included as part of this Appendix A, have been audited by Mauldin & Jenkins LLC, Macon, Georgia, independent certified public accountants, to the extent and for the periods indicated in their report thereon, which appears in this Appendix A. Such financial statements have been included herein in reliance upon the report of Mauldin & Jenkins LLC. [Remainder of Page Intentionally Left Blank] ATLANTA 5621272.6 APPENDIX B SUMMARY OF THE BOND RESOLUTION This Appendix B has been prepared by Murray Barnes Finister LLP, Atlanta, Georgia, Bond Counsel. The Master Bond Resolution adopted by the Aviation Commission on __________, 2015 and by the Augusta-Richmond County Commission on __________, 2015, as ratified, reaffirmed, supplemented, and amended by a First Supplemental Bond Resolution adopted by the Aviation Commission on __________, 2015 and by the Augusta-Richmond County Commission on __________, 2015 (collectively the “Bond Resolution”), is a contract for the benefit of the owners of the Bonds, which specifies the terms and details of the Series 2015 Bonds and which defines the security for the Series 2015 Bonds. The following is a summary, which does not purport to be comprehensive or definitive, of certain provisions of the Bond Resolution. Other provisions of the Bond Resolution are described in this Official Statement under the captions “SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2015 BONDS - Pledge of Revenues, - Funds Created by the Bond Resolution and Flow of Funds, and - Rate Covenant.” Reference is made to the Bond Resolution in its entirety for a complete recital of the detailed provisions thereof, copies of which are available from the Consolidated Government upon request. [Remainder of Page Intentionally Left Blank] ATLANTA 5621272.6 APPENDIX C SUMMARY OF THE AIRLINE AGREEMENTS This Appendix C has been prepared by Dentons US LLP, Atlanta, Georgia, Disclosure Counsel. [Remainder of Page Intentionally Left Blank] ATLANTA 5621272.6 APPENDIX D FORM OF LEGAL OPINION The form of Legal Opinion included as this Appendix D has been prepared by Murray Barnes Finister LLP, Atlanta, Georgia, Bond Counsel, and is substantially the form to be given in connection with the delivery of the Series 2015 Bonds. [Remainder of Page Intentionally Left Blank] ATLANTA 5621272.6 SUMMARY OF CONTENTS 1 Page Introduction .............................................................. 1 Plan of Financing ....................................................... The Series 2015 Bonds .............................................. Security and Sources of Payment for the Series 2015 Bonds ........................................... The Consolidated Government ................................. The Aviation Commission ......................................... The Airport ................................................................ Airport Financial Information ................................... Investment Considerations ......................................... Legal Matters ............................................................. Miscellaneous ............................................................ Certification .............................................................. Appendix A: Financial Statements of the Airport ....................................................... A-1 Appendix B: Summary of the Bond Resolution ....................................................... B-1 Appendix C: Summary of the Airline Agreements ..................................................... C-1 Appendix D: Form of Legal Opinion .................. D-1 $[AMOUNT]* AUGUSTA, GEORGIA Airport General Revenue Refunding Bonds, Series 2015 New Issue New Issue $[AMOUNT-A] $[AMOUNT-B] Airport General Revenue Airport General Revenue Refunding Bonds, Refunding Bonds, Series 2015A (Non-AMT) Series 2015B (AMT) ________________________________ OFFICIAL STATEMENT No dealer, broker, salesman, or other person has been authorized to give any information or to make any representations, other than those contained in this Official Statement, and, if given or made, such other information or representations should not be relied upon as having been authorized by the Consolidated Government or the Underwriter. This Official Statement does not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of the Series 2015 Bonds by any person in any jurisdiction in which it is unlawful for such person to make such offer, solicitation, or sale. The delivery of this Official Statement at any time does not imply that the information herein is correct as of any time subsequent to this date. RAYMOND JAMES Dated: _________, 2015 1 See detailed “TABLE OF CONTENTS” on pages (i) to (ii). * Preliminary; subject to change. Commission Meeting Agenda 9/1/2015 2:00 PM Approve Augusta Regional Airport Revenue Bonds Series 2015A and Series 2015B Department:Augusta Regional Airport Caption: Approve Augusta Regional Airport Revenue Bonds Series 2015 bond resolutions and authorize the Mayor and Clerk to sign all necessary documents. Background:The commission has previously approved the refunding of the Augusta Regional Airport Revenue Bonds series 2005. This is the next step in the process of issuing the 2015 bond series. The Augusta Regional Airport commission has also approved the process and the attached documents. Refunding the bonds at this time allows for savings generated from lower interest costs. Analysis:This is the next step in the process of issuing the 2015 bonds. Financial Impact:n/a Alternatives:none Recommendation:Approve Bond Resolution Funds are Available in the Following Accounts: n/a REVIEWED AND APPROVED BY: Finance. Law. Administrator. Clerk of Commission Commission Meeting Agenda 9/1/2015 2:00 PM NSC Discovery Inc. Department:Clerk of Commission Caption:Presentation by Mr. Rob Dennis of the NSC Discovery, Inc. regarding the tax exempt status of the property at 1930 North Leg Road. (No recommendation from Finance Committee August 25, 2015) Background: Analysis: Financial Impact: Alternatives: Recommendation: Funds are Available in the Following Accounts: REVIEWED AND APPROVED BY: Commission Meeting Agenda 9/1/2015 2:00 PM Acquisition of right of way to Richmond County, Georgia from Harvey Lee James. Department:Law Department Caption:Motion to authorize condemnation to acquire title of a portion of property for right of way (Parcel 150-0-012-02-0) 3055 Willis Foreman Road. (Approved by Engineering Services Committee August 25, 2015) Background:Despite repeated efforts, the City has been unable to reach an agreement with the property owner and therefore seeks to acquire title through condemnation. In order to proceed and avoid further project delays, it is necessary to condemn a portion of subject property. The required property consists of 12,085 square feet of right of way. The appraised value is $2,417.00. Analysis:Condemnation is necessary in order to acquire the required property. Financial Impact:The necessary costs will be covered under the project budget. Alternatives:Deny condemnation. Recommendation:Approve condemnation. Funds are Available in the Following Accounts: G/L 101041110-5212115 J/L 101041110-5212115 REVIEWED AND APPROVED BY: Finance. Law. Administrator. Clerk of Commission Augusta-Richmond County, Georgia BE IT ORDAINED by the Commission-Council of Augusta-Richmond County, Georgia that the following Capital Project Budget is hereby amended: Section 1: The project change is authorized to CPB#N/A. This project consists of downtown concept plan that will identify and set standards for infrastructure, landscaping, urban design and streetscaping , parking, utlities, and pedestrian connectivity. Funding to come from Transportation Investment Act in the amount of $1,201,330. Section 2: The following revenues are anticipated to be available to the Consolidated Government to complete the project. TIA 1,201,330$ 1,201,330$ Section 3: Copies of this Capital Project Budget shall be made available to the Comptroller for direction in carrying out this project. Adopted this ____________________ day of ______________________. Approved _________________________________________________ Original-Commission Council Office Copy-Engineering Department Copy-Finance Department Copy-Procurement Department Honorable Hardie Davis, Jr., Mayor CAPITAL PROJECT BUDGET CPB#N/A Augusta Downtown Concept Plan 1.13.2012 Augusta-Richmond County, Georgia CAPITAL PROJECT BUDGET CPB#N/A Augusta Downtown Concept Plan CPB AMOUNT CPB NEW SOURCE OF FUNDS CPB ADDITION CPB TIA Funds ($1,201,330)($1,201,330) TOTAL SOURCES: ($1,201,330) $0 ($1,201,330) USE OF FUNDS ENGINEERING 371-041110-5212115-$1,201,330 $1,201,330 TOTAL USES: $1,201,330 $1,201,330 1.13.2012 DOWNTOWN CONCEPT STUDY FUNDING MECHANISM NO.Project Budget Project Percentage Requested Project Amounts 1. 5th Street Bridge (Bridge Repair and Restoration)$9,058,113.90 10.83%$162,456.63 2. James Brown Reconstruction $6,132,040.22 7.33%$109,977.70 3. 13th Street (RA Dent to Reynolds Street)$3,030,246.45 3.62%$54,347.25 4. 5th Street Laney Walker Boulevard to Reynolds Street $5,066,968.50 6.06%$90,875.72 5. 6th Street (Laney Walker Boulevard to Reynolds Street)$6,775,498.62 8.10%$121,518.08 6. Broad Street Improvements (Washington Road to Sand Bar Ferry Road)$24,750,000.00 29.59%$443,889.48 7. Greene Street Improvements from 13th Street to East Boundary Street $9,781,928.64 11.70%$175,438.19 8. Telfair Street Improvements (15th Street to East Boundary Street)$19,040,886.81 22.77%$341,496.94 TOTAL:$1,500,000.00 BAND 2 Subtotal:$15,190,154 BAND 3 Subtotal:$68,445,529 GRAND TOTAL:$83,635,683 Estimated Amount for Downtown Concept Study:$1,500,000.00 BAND 2 BAND 3 REQUEST FOR QUALIFICATION Request for Qualifications will be received at this office until Tuesday, January 27, 2015 @ 11:00 a.m. for furnishing: RFQ Item #14-243 Comprehensive Downtown Concept Plan for Augusta, GA for Engineering Department Qualifications will be received by: The Augusta Commission hereinafter referred to as the OWNER at the offices of: Geri A. Sams, Director Augusta Procurement Department 530 Greene Street - Room 600A Augusta, Georgia 30901 Request for Qualification (RFQ) documents may be viewed on the Augusta Georgia web site under the Procurement Department ARCbid. RFQ documents may be obtained at the office of the Augusta, GA Procurement Department, 530 Greene Street – Room 600A, Augusta, GA 30901. All questions must be submitted in writing by fax to 706 821-2811 or by email to procbidandcontract@augustaga.gov to the office of the Procurement Department by Friday January 9, 2015 @ 5:00 P.M. No RFQ will be accepted by fax, all must be received by mail or hand delivered. No qualifications may be withdrawn for a period of 90 days after time has been called on the date of opening. Request for qualifications (RFQ) and specifications. An RFQ shall be issued by the Procurement Office and shall include specifications prepared in accordance with Article 4 (Product Specifications), and all contractual terms and conditions, applicable to the procurement. All specific requirements contained in the RFQ including, but not limited to, the number of copies needed, the timing of the submission, the required financial data, and any other requirements designated by the Procurement Department are considered material conditions of the RFQ which are not waiveable or modifiable by the Procurement Director. All requests to waive or modify any such material condition shall be submitted through the Procurement Director to the appropriate committee of the Augusta, Georgia Commission for approval by the Augusta, Georgia Commission. Please mark RFQ number on the outside of the envelope. Proponents are cautioned that acquisition of RFQ documents through any source other than the office of the Procurement Department is not advisable. Acquisition of RFQ documents from unauthorized sources places the Proponent at the risk of receiving incomplete or inaccurate information upon which to base its qualifications. GERI A. SAMS, Procurement Director Publish: Augusta Chronicle December 18, 25, 2014 and January 1, 8, 2015 Metro Courier December 24, 2014 Revised: 6/27/2013 UNOFFICIAL VENDORS Attachment B E-Verify # SAVE Form Original 7 Copies STANTEC 11315 COROPRATE BLVD., OLANDO, FL 32817 YES 45737 YES YES YES COOPER CARRY 191 Peachtree Street, NE Suite 2400 Atlanta, GA 30303 YES 122329 YES YES YES ARCADE INC 11 85 WASHINGTON ST NEWTON, MA 02465 YES 844634 YES YES YES CRANSTON ENGINEERING 452 ELLIS STREET AUGUSTA, GA 30903-2546 YES 64684 YES YES YES Total Number Specifications Mailed Out: 27 Total Number Specifications Download (Demandstar): 11 Total Electronic Notifications (Demandstar): 1310 Mandatory Pre-Proposal/Telephone Conference Attendees: NOT APPLICABLE Total packages submitted: 4 Total Noncompliant: 0 Qualification Opening RFQ Item #14-243 Comprehensive Downtown Concept Plan for Augusta, GA for Augusta, Georgia - Engineering Department RFQ Due: Tuesday, January 27, 2015 @ 11:00 a.m. Page 1 of 1 Evaluation Criteria PTS ARCADE INC 11 85 WASHINGTON ST NEWTON, MA 02465 COOPER CARRY 191 Peachtree Street, NE Suite 2400 Atlanta, GA 30303 CRANSTON ENGINEERING 452 ELLIS STREET AUGUSTA, GA 30903-2546 STANTEC 11315 COROPRATE BLVD., OLANDO, FL 32817 1) Team Qualifications 25 22.6 23 19.2 21.6 2) Team experience 30 26 27.6 22.2 24.4 3) Technical Approach 35 29.8 32.2 26.4 31 4) References including specific individuals, address, phone number, and e- mail address 10 8.8 9 8.4 8.4 Total 100 87.2 91.8 76.2 85.4 Phase II Presentations 3 1 3.6 2.4 Cumulative Evaluation Sheet RFQ Item #14-243 Comprehensive Downtown Concept Plan for Augusta, GA for Augusta, Georgia - Engineering Department Tuesday, February 24, 2015 @ 3:00 p.m. Evaluation Committee Comments: During Phase I, the companies were ranked by the committee members according to the evaluation criteria which was listed in the RFP. All four companies were shortlisted by the committee members and invited to participate in Phase II of the evaluation process. During Phase II of the evaluation process, each company will be ranked on their presentation by the committee members with their number 1 choice receiving a 1. Cumulative Phase II - Presentations (Ranking in order of preference - 1 being the number one choice) Phase I Commission Meeting Agenda 9/1/2015 2:00 PM Augusta Downtown Concept Plan (TIA Project)- Contract Award Department:Abie L. Ladson, Director Caption:Motion to award Design Consultant Services Agreement, RFQ 14-243, to Cooper Carry in the amount of $1,201,330 for the Augusta Downtown Concept Plan, to be funded from the Transportation Investment Act (TIA) as requested by AED. (Approved by Engineering Services Committee August 25, 2015) Background:Broad Street (Lakemont Drive to East Boundary), Greene Street (15th Street to East Boundary, 14th/Telfair Street (Reynolds to East Boundary), 13th Street (Savannah River to Laney-Walker), James Brown Boulevard (9th Street) (Reynolds Street to Laney- Walker), 6th Street (Reynolds Street to Laney-Walker Boulevard), and 5th Street (Savannah River to Gordon Highway) were approved projects of the Transportation Investment Act (TIA) of 2010. These projects are located within the downtown area and intersect with each other. This requires a downtown concept plan that will identify and set standards for infrastructure, landscaping, urban design and streetscaping, parking, utilities, and pedestrian connectivity. Once the concept is completed, separate design work will commence on each downtown project. Analysis:The following firms were evaluated based on qualifications, experience, technical approach, and references on February 24, 2015. 1. ARCADE, Inc. 2. Cooper Carry 3. Cranston Engineering 4. STANTEC Cooper Carry was selected based on the evaluation procedures used for this project. Financial Impact:Funds are available in TIA and have been approved by GDOT. See attachment: Downtown_Concept_Study_Funding_Analysis for funding breakdown. Funding is contingent upon receipt of projects Notice to Proceed (NTP) from GDOT. Expenses are not eligible for reimbursement if incurred prior to receipt of NTP. Alternatives:1) Award Design Consultant Services Agreement to Cooper Carry in the amount of $1,201,330 for the Augusta Downtown Concept Plan to be funded from the Transportation Investment Act (TIA) as requested by AED. 2) Do not approve; proceed with individually designing Downtown TIA projects without concepts and guidelines. Recommendation:Approve Alternative Number One Funds are Available in the Following Accounts: Funds are available in TIA,funding is contingent upon receipt of projects Notice to Proceed (NTP) from GDOT. REVIEWED AND APPROVED BY: Finance. Procurement. Law. Administrator. Clerk of Commission Commission Meeting Agenda 9/1/2015 2:00 PM Highland Avenue Water Treatment Plant – Emergency equipment repairs Department:Utilities Caption:Motion to approve Emergency Procurement of Replacement Parts for Hypochlorite Generation Equipment. (Approved by Engineering Services Committee August 25, 2015) Background:Augusta's new and upgraded surface water treatment plants utilize a technology which allows on site generation of sodium hypochlorite which is used as a replacement for chlorine gas as a disinfectant in drinking water. The system used at our facilities is manufactured bySevern Trent Services. On July 13 we experienced the failure of one of the hypochlorite generation cells at the Highland Avenue Water Treatment Plant. This particular cell is and older design and had apparently weakened in a critical location causing it to fail. We are currently in our period of highest water demand and need to replace the unit as quickly as possible for operational reliability. The vendor stated that they has the needed material in stock and available for immediate shipment. Due to the critical nature of this equipment we worked with the Procurement Department to order the needed parts as an emergency procurement. Analysis:This is a replacement part for an existing piece of equipment which is proprietary in its design and construction. The only source for this procurement is the original equipment manufacturer. Financial Impact:$58,600.00 from budgeted funds. Alternatives:No feasible alternatives are available. This was an emergency procurement. Recommendation:Approve the emergency sole source procurement of a replacement cell assembly from Severn Trent Services at a cost of $58,600.00. Funds are Available in the Following Accounts:506043520-5425110 REVIEWED AND APPROVED BY: Finance. Procurement. Law. Administrator. Clerk of Commission Commission Meeting Agenda 9/1/2015 2:00 PM Minutes Department:Clerk of Commission Caption:Motion to approve the minutes of the regular commission meeting held on August 18, 2015 and the special called commission meeting held on August 25, 2015. Background: Analysis: Financial Impact: Alternatives: Recommendation: Funds are Available in the Following Accounts: REVIEWED AND APPROVED BY: Commission Meeting Agenda 9/1/2015 2:00 PM Approve resolution for SPLOST 7 referendum Department:Administrator Caption: Approve resolution requesting the Augusta-Richmond County Board of Elections to place the approved SPLOST 7 package on the ballot for the November 3, 2015 election. Background: Analysis: Financial Impact: Alternatives: Recommendation: Funds are Available in the Following Accounts: REVIEWED AND APPROVED BY: Finance. Law. Administrator. Clerk of Commission Commission Meeting Agenda 9/1/2015 2:00 PM Certificate of Occupancy Department:Clerk of Commission Caption:Discuss certificate of occupancy for the Municipal Building. (Requested by Commissioner M. Williams) Background: Analysis: Financial Impact: Alternatives: Recommendation: Funds are Available in the Following Accounts: REVIEWED AND APPROVED BY: Commission Meeting Agenda 9/1/2015 2:00 PM Affidavit Department:Clerk of Commission Caption:Motion to authorize execution by the Mayor of the affidavit of compliance with Georgia's Open Meeting Act. Background: Analysis: Financial Impact: Alternatives: Recommendation: Funds are Available in the Following Accounts: REVIEWED AND APPROVED BY: