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2015 Augusta, Georgia Airport General Revenue Refunding Bonds
r = L t✓ r v = y _- E E n ^U L r 7 ;r E� _ C c - E - — v � PRELIMINARY OFFICIAL STATEMENT DATED AUGUST 25, 2015 TWO SEPARATE ISSUES RATINGS (Book -Entry Only) Moody's: Baal Standard & Poor's: BBB 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 2015E Bond is held by a "substantial user" of the facilities financed with the proceeds of the Series 2015E 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. See "LEGAL MATTERS - Opinion of Bond Counsel" herein. $11,250,000* CK .0".1 ��� AUGUSTA, GEORGIA Aiylxwt Airport General Revenue Refunding Bonds, Series 2015 New Issue New Issue $7,320,000" $3,930,000* 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 I 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 September 24, 2015 *. RAYMOND JAMES Dated: 2015 * Preliminary; subject to change. MATURITIES, PRINCIPAL AMOUNTS, INTEREST RATES, PRICES, YIELDS, AND CUSIPS Maturi 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 Maturi 2017 2018 2019 2020 2021 2022 2023 2024 2025 $7,320,000* Airport General Revenue Refunding Bonds, Series 2015A (Non -AMT) Principal Interest Price or Amount Rate Yield CUSIP $3,930,000* Airport General Revenue Refunding Bonds, Series 2015B (AMT) Principal Interest Price or Amount Rate Yield CUSIP t CUSIP data herein is provided by Standard & Poor's, CUSIP Services Bureau, a division of the McGraw -Hill Companies, [nc. 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. AUGUSTA, GEORGIA ELECTED OFFICIALS Augusta- Richmond County Commission Hardie Davis, Jr., Mayor Grady Smith, Mayor Pro Tempore Mary Davis William Fennoy Sean Frantom Wayne Guilfoyle Ben Hasan APPOINTED OFFICIALS Bill Lockett Sammie Sias Dennis Williams Marion Williams Consolidated Government Administration Janice Allen 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 Douglas M. Lively Frank Bowman Willa Hilton Paulette Curry Grey B. Murray James Germany Rosa L. Thomas Rev. Karlton Howard Sammie Sias, Ex Officio Charles July 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 Shepard, Plunkett, Hamilton & Boudreaux, LLP Augusta, Georgia Bond Counsel Murray Barnes Finister LLP Atlanta, Georgia Airport Counsel Freeman Mathis & Gary, LLP Forest Park, Georgia Disclosure Counsel Dentons US LLP Atlanta, Georgia This page intentionally left blank. TABLE OF CONTENTS Page The Consolidated Government .................................................................................................... ..............................1 TheAviation Commission ........................................................................................................... ..............................1 Purpose of the Series 2015 Bonds ............................................................................................... ..............................2 TheAirport .................................................................................................................................. ..............................2 Security and Sources of Payment for the Series 2015 Bonds ...................................................... ..............................2 Description of the Series 2015 Bonds .......................................................................................... ..............................3 TaxExemption ............................................................................................................................. ..............................3 Bond Registrar, Paying Agent, and Depositories ......................................................................... ..............................3 Professionals Involved in the Offering ........................................................................................ ..............................4 LegalAuthority ............................................................................................................................ ..............................4 Offering and Delivery of the Series 2015 Bonds ......................................................................... ..............................4 ContinuingDisclosure ................................................................................................................. ..............................4 InvestmentConsiderat ions ........................................................................................................... ..............................5 OtherInformation ........................................................................................................................ ..............................5 PLANOF FINANCING ................................................................................................................ ............................... 7 Estimated Sources and Applications of Funds ............................................................................. ..............................7 RefundingProgram ...................................................................................................................... ..............................7 THESERIES 2015 BONDS .......................................................................................................... ............................... 8 Descript ion................................................................................................................................... ..............................8 Redemption................................................................................................................................. ............................... 8 Book -Entry Only System ............................................................................................................. ..............................9 LegalAuthority .......................................................................................................................... ..............................I l Investments................................................................................................................................. .............................12 SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2015 BONDS ....................... .............................12 PledgedRevenues ....................................................................................................................... .............................12 Funds Created By the Bond Resolution and Flow of Funds ....................................................... .............................12 RateCovenant ............................................................................................................................. .............................16 Parity and Subordinate Lien Bonds ............................................................................................ .............................16 LimitedObligations .................................................................................................................... .............................17 Remedies.................................................................................................................................... .............................17 THE CONSOLIDATED GOVERNMENT .................................................................................... .............................19 Introduction................................................................................................................................. .............................19 Consolidated Government Administration and Officials ............................................................ .............................19 THE AVIATION COMMISSION .................................................................................................. .............................20 Introduction............................................................................................................................... ............................... 20 Aviation Commission Administration and Officials ................................................................... .............................20 THEAIRPORT .............................................................................................................................. .............................22 Introduction................................................................................................................................. .............................22 AirportFacilities ......................................................................................................................... .............................22 AirTrade Area ............................................................................................................................ .............................23 Competition................................................................................................................................ .............................29 AirlinesProviding Service .......................................................................................................... .............................29 Availability of Information Concerning Individual Airlines ...................................................... .............................29 AviationActivity ........................................................................................................................ .............................30 Origin and Destination Information ............................................................................................ .............................32 Airline and Other Revenue Sources ............................................................................................ .............................32 Employees, Employee Relations, and Labor Organizations ....................................................... .............................36 Page AIRPORT FINANCIAL INFORMATION .................................................................................... .............................36 Accounting System and Policies ................................................................................................. .............................36 Historical and Pro Forma Capital Structure ................................................................................ .............................37 DebtService Requirements ......................................................................................................... .............................39 FiveYear Operating History ....................................................................................................... .............................40 Management's Discussion and Analysis of Results of Operations ............................................. .............................42 Historical Debt Service Coverage Ratios .................................................................................... .............................43 OperatingBudget ........................................................................................................................ .............................44 Capital Improvements Program .................................................................................................. .............................45 PassengerFacility Charges ......................................................................................................... .............................46 FederalGrants -In- Aid ................................................................................................................. .............................48 EmployeeBenefits ...................................................................................................................... .............................48 InsuranceCoverage ..................................................................................................................... .............................51 INVESTMENT CONSIDERATIONS ........................................................................................... .............................53 Introduction ................................................................................................................................. .............................53 Levels of Airline Traffic and Financial Condition of the Airlines .............................................. .............................53 Importance of Delta and US Airways at the Airport ................................................................... .............................53 Effectof Airline Bankruptcies .................................................................................................... .............................54 Costsof Aviation Fuel ................................................................................................................ .............................55 Airline Mergers; Consolidation .................................................................................................. .............................55 Structural Changes in the Travel Market .................................................................................... .............................56 Aviation Security and Health Safety Concerns ........................................................................... .............................56 Regulations and Restrictions Affecting the Airport .................................................................... .............................56 Expiration and Possible Termination of Revenue - Producing Agreements ................................. .............................57 Competition ................................................................................................................................ .............................57 Unavailability of Certain Insurance Coverage ............................................................................ .............................57 LEGALMATTERS ........................................................................................................................ .............................58 PendingLitigation ...................................................................................................................... .............................58 Opinionof Bond Counsel ........................................................................................................... .............................58 Changes in Federal and State Tax Law ....................................................................................... .............................59 ValidationProceedings ............................................................................................................... .............................59 ClosingCertificates ..................................................................................................................... .............................59 MISCELLANEOUS ....................................................................................................................... .............................60 Ratings ...................................................................................................................................... ............................... 60 Underwriting ............................................................................................................................. ............................... 60 FinancialAdvisor ........................................................................................................................ .............................60 IndependentAuditors .................................................................................................................. .............................60 Summary of Continuing Disclosure Certificate .......................................................................... .............................61 AdditionalInformation ............................................................................................................... .............................64 CERTIFICATION.......................................................................................................................... .............................65 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 ............................................. ............................0 -1 APPENDIX D: FORMS OF LEGAL OPINIONS ................................................................... ............................... D -1 (ii) OFFICIAL STATEMENT of AUGUSTA, GEORGIA relating to its $11,250,000* AIRPORT GENERAL REVENUE REFUNDING BONDS, SERIES 2015 New Issue New Issue $7,320,000* $3,930,000* 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 $11,250,000* in aggregate principal amount of its Airport General Revenue Refunding Bonds, Series 2015, consisting of $7,320,000* in aggregate principal amount of its Airport General Revenue Refunding Bonds, Series 2015A (Non -AMT) (the "Series 2015A Bonds "), and $3,930,000* 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 a 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. * Throughout this Preliminary Official Statement, the asterisk indicates information that is preliminary and subject to change. Purpose of the Series 2015 Bonds The proceeds of the Series 2015 Bonds, together with other available funds, will be used to, 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; and 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) the 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 ") constituting Pledged PFC Revenues, which are 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 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, 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 -2- 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. See Appendix D hereto for the forms of the opinions Bond Counsel proposes to deliver in connection with the issuance of the Series 2015 Bonds. For a more complete discussion of such opinions 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. Regions Bank, Augusta, Georgia, will act as depository of the Revenue Fund, the PFC Revenue Fund, 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. -3- 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 opinions will be available at the time of delivery of the Series 2015 Bonds, and copies of the proposed forms of such opinions are 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 (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 September 24, 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 the last day of the seventh month after the end of each Fiscal Year (currently July 31), 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 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. With respect to the Urban Redevelopment Agency of Augusta Taxable Revenue Bonds (Laney - Walker and Bethlehem Project), Series -4- 2010, the annual report for fiscal year 2013 was filed one day late and the annual report for fiscal year 2014 was filed three days 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. -5- 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: finoressllc.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 -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. Series 2015A Bonds Series 2015B Bonds Total Estimated Sources of Funds: Par Amount Premium (Discount) Funds Released from Prior Resolution' Aviation Commission Funds Total Sources of Funds Estimated Applications of Funds: Redeem Refunded Bonds' Deposit to Debt Service Reserve Fund Costs of Issuance' Underwriting Discount" Total Applications of Funds ' See "PLAN OF FINANCING - Refunding Program" herein. z 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 20058 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 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 2005B 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 and other Aviation Commission funds, 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. -7- 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 October 2, 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 2415 BONDS Description The Series 2015A Bonds are being issued in the aggregate principal amount of $7,320,000* and the Series 2015B Bonds are being issued in the aggregate principal amount of $3,930,000 *. 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 I 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 or in such other 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 or in such other 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 anuary 1, 20 January 1 Principal of the Year Amount (Leaving $ to mature January 1, 20_) -8- Series 2015A Bonds Maturing g anuary 1. 20 January 1 of the Year Principal Amount (Leaving $ Mandatory Redemption of Series 2015E Bonds to mature January 1, 20_) 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 or in such other 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 I of the Year Principal Amount (Leaving $ to mature January 1, 20_J Series 2015B Bonds Maturing g a`ry 1.20 January 1 of the Year Principal Amount (Leaving $ Redemption Notices to mature January 1, 20_) 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. IRZ 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 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.dicc.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 am 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. 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. 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 and certain other revenues as described in the definition of "General Revenues" set forth in "SUMMARY OF THE BOND RESOLUTION - Definitions" in Appendix B to this Official Statement. 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. Upon satisfaction of certain conditions, the Bond Resolution permits the Consolidated Government to withdraw a separable category or portion of revenues, income, receipts, and money relating to a definable service, facility, or program of the Airport from General Revenues and thereafter treat such amounts as "Released Revenues" for all purposes, including as security for Released Revenue Bonds. See "SUMMARY OF THE BOND RESOLUTION - Released Revenues and Securitizations" in Appendix B to this Official Statement. 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 Regions Bank, 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 Regions Bank, 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 Regions Bank, Augusta, Georgia, as Depository for the account of the Aviation Commission; on (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 Depository 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 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 U.S. Bank National Association, Atlanta, Georgia, as Depository for the account of the Aviation Commission; (8) the Subordinate Securities Fund, to be held by Regions Bank, Augusta, Georgia, as Depository for the account of the Aviation Commission; (9) the Capital Improvement Fund, to be held Regions Bank, 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 Regions Bank, 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, as described below. 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 (other than the Contract Payments Account) 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 -13- 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, and administrative costs of the PFC program. 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. 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 -14- 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 to provide a substitute Reserve Account Credit Facility in certain events). 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 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 PFC Revenue Fund, the Operation and Maintenance Fund, the Operation and Maintenance Reserve Fund, the accounts within the Debt Service Fund, and the Debt Service 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 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. 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 construed 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 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. -16- 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. 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. -17- 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. 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. (Remainder of Page Intentionally Left Blankl -18- 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 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 -19- 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 / 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 S 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, December 31, 2018 Business Owner Mayor Pro Tempore Janice Allen Jackson has been the Administrator of the Consolidated Government since November 2014. Prior to her appointment as Administrator, Ms. Jackson 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. 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. -20- 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. Beman' March 31, 2015 Commercial Real Estate Frank Bowman March 31, 2019 Retired Paulette Curry' March 31, 2013 Logistics James Germany March 31, 2017 Businessman Charles July March 31, 2017 Retired Rev. Karlton Howard March 31, 2018 Pastor Doug Lively' March 31, 2015 Independent Insurance Agent Willa Hilton March 31, 2019 Businesswoman Grey B. Murray March 31, 2017 Business Owner Rosa L. Thomas March 31, 2019 Retired Sammie Sias` EX Officio Retired ' Serving until successor is appointed. 2 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 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. me 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 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. -22- 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 I 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. 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 -23- 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 Industry Forestry, Fishing, Hunting, and Agriculture Support Mining Utilities Construction Manufacturing Wholesale Trade Retail Trade Transportation and Warehousing Information Finance and Insurance Real Estate and Rental and Leasing Professional, Scientific, and Technical Services Management of Companies and Enterprises Administrative, Support, Waste Management, and Remediation Services Educational Services Health Care and Social Assistance Arts, Entertainment, and Recreation Accommodation and Food Services Other Services Unclassified Establishments Total Counties Richmond (Ga.) Columbia (Ga.) Aiken (S.C.) n/a % n/a % 0.16% 0.15 n/a 0.22 n/a n/a n/a 3.15 8.31 7.41 13.12 17.37 18.87 3.28 13.93 1.04 7.22 16.48 6.91 3.55 1.16 3.57 3.08 1.13 1.10 3.82 4.39 2.35 1.32 1.33 0.56 7.05 6.45 n/a 1.80 0.55 n/a 5.65 4.31 23.83 1.03 1.07 0.51 37.32 11.83 9.69 1.25 1.00 0.68 4.06 5.86 2.81 2.54 3.95 1.80 0.76 0.88 18.49 100.00 % % Source: U.S. County Business Patterns, U.S. Department of Commerce, Bureau of the Census. Data not available where indicated by "n/a." -26- Demographic Information Set forth below is selected demographic data for Richmond, Columbia, and Aiken Counties and the Augusta MSA. Counties Richmond (Ga.) Columbia (Ga.) Aiken (S.C.) Augusta MSA 2014 Population' 201,368 139,257 164,753 580,230 2010 Population' 200,549 124,053 160,099 564,873 2000 Population' 199,775 89,288 142,552 447,441 1990 Population 189,719 66,031 120,940 415,184 2013 Per Capita Income $31,683 $43,739 $35,047 $35,625 2013 Median Household Income' $37,749 $69,306 $44,509 n/a 2013 Mean Household Income' $51,380 $87,167 $60,728 n/a 2013 Median Age 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. Z U.S. Department of Commerce, Bureau of Economic Analysis. ' 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 12300 18,287 Total _ 4Q Source: U.S. Department of Commerce, Bureau of the Census. lRemainder of Page Intentionally Left Blanki -25- 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. Largest Employers in Richmond County (Ga.) as of December 31, 2014 Employer U.S. Army Signal Center and Fort Gordon' Georgia Regents University Richmond County School System University Hospital Georgia Regents Health System Consolidated Government East Central Regional Hospital E -Z -GO Textron Veterans Administration Hospital Doctors Hospital Industry Employees Military 24,000 Education 4,656 Education 4,431 Healthcare 3,200 Healthcare 3,054 Government 2,785 Healthcare 1,488 Golf Cart Manufacturer 1,277 Healthcare 1,233 Healthcare 1,210 Source: Augusta Economic Development Authority. 1 Includes military and civilian employees. Largest Employers in Columbia County (Ga.) as of January 2015 Employe Columbia County Board of Education Columbia County Club Car John Deere Quad Graphics GIW Industries Augusta Sportswear Augusta Staffing Urban Outfitters Kelly Services Industry Education Government Golf, Utility, Transportation Vehicles Farm machinery and Equipment Tradebinding Sluree Pumps Athletic Clothing Employment Placement Distribution and Call Center Employment Placement Source: Augusta Economic Development Authority. Largest ployers in Aiken County (S.C.) as of October 2014 Employer Savannah River Nuclear Solutions, LLC Aiken County Public Schools Bridgestone Americas Tire Operations Savannah River Remediation, LLC Aiken Regional Medical Centers Kimberly -Clark Corporation Aiken County Government WSI -SRS Savannah River Site Wal -mart Associates, Inc. Shaw Industries Source: Greater Aiken Chamber of Commerce. Industry Nuclear Processing Education Tires Design and Construction Health Care Consumer Paper Products Government Security Systems Retail Textiles -27- Employees 2,984 1,100 750 500 500 440 300 300 230 223 Employees 4,704 3,199 1,595 1,541 1,237 1,167 970 685 653 612 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. Richmond County (Ga.) Employment Unemployment Total Labor Force County Unemployment Rate Columbia County (Ga.) Employment Unemployment Total Labor Force County Unemployment Rate State of Georgia Unemployment Rate Aiken County (S.C.) Employment Unemployment Total Labor Force County Unemployment Rate State of South Carolina Unemployment Rate Augusta MSA Employment Unemployment Total Labor Force Unemployment Rate 2010 2011 2012 2013 2014 78,209 78,543 78,988 78,341 78,219 9,678 9,966 9,389 7,436 8,522 87,887 88,509 88,377 85,777 86,741 11.0% 11.3% 10.6% 8.7% 9.8% 57,027 58,655 60,141 61,481 61,339 4,495 4,662 4,511 3,860 4,261 61,522 63,317 64,652 65,341 65,600 73% 7.4% 7.0% 5.9% 6.5% 10.5% 10.2% 9.2% 8.2% 7.2% 65,641 66,376 66,439 66,837 67,996 6,729 6,740 6,166 5,370 4,673 72,370 73,116 72,605 72,207 72,669 9.3% 9.2% 8.5% 7.4% 6.4% 11.2% 10.5% 9.2% 7.6% 6.4% 230,830 233,436 234,982 235,531 237,255 24,851 25,371 23,789 21,494 18,798 255,681 258,807 258,771 257,025 256,053 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. -28- 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 ' Includes service provided by the named airline either by its mainline service or through regional operating subsidiaries or affiliates. z 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 -29- Four Month Years Ended December 31 Period Ended 2010 2011 2012 2013 2014 April 30, 2015 Air Carrier Delta Air Lines 56.9% 54.7% 59.5% 59.8% 59.4% 59.2% US Airways 35.6 35.8 39.0 39.0 39.8 39.8 American Eagle' 6.0 8.8 0.6 - -- - -- - -- Others 1.5 0.7 0.9 1.2 0.8 1.0 Total 1= % lam(. % 12 W/ 0 E"% nu% 1 % ' Includes service provided by the named airline either by its mainline service or through regional operating subsidiaries or affiliates. z 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 -29- 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.g`v 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. Source: Airport records from airline reports. -30- Historical Enplaned Passengers Enplaned Percent Year Passengers 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 Enplaned Percent Ended April 30 Passengers 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. -30- 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 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) Passenger Percent General Airlines Change Year Air Carrier Air Taxi 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 General Ended April 30 Air Carrier Air Taxi 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) Compound Annual Growth Rate 2010 -2014 1.82% Source: Airport records from airline reports. -31- Passenger Percent Year Airlines 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 Passenger Percent Ended April 30 Airlines Change 2014 103,418 - -- % 2015 104,791 1.33 Compound Annual Growth Rate 2010 -2014 1.82% Source: Airport records from airline reports. -31- 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), midwestem (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 Source: United States Department of Transportation Origin and Destination Survey; Mileage from Diio, March 2015. 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 -32- Distance Number of Percent of Destination in miles Passengers 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 - -- MAU 100.0 °l0 Source: United States Department of Transportation Origin and Destination Survey; Mileage from Diio, March 2015. 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 -32- 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. 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 -33- 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. (Remainder of Page Intentionally Left Blank] -34- 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) Four Month Periods Years Ended December 31 Ended April 30 2010 2011 2012 2013 2014 2014 2015 Customer Class Commercial AirlineS 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 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 Deliveries' Excludes sales and deliveries of Avgas/IOOLL fuel, auto fuel, diesel, and oil. Z Includes revenue from fuel sales and from flowage fees for fuel delivery. 3 Aviation Services provides fuel discounts to Airport hangar tenants only. 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. -35- Four Month Periods Years Ended December 31 Ended April 30 2010 2011 2012 2013 2014 2014 2015 Gross Revenue by Customer Class: 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 3,749,317 3,139,454 2,969,274 1,092,188 1,058,750 Military 611,842 640,299 1,000,751 1,473,242 788,954 406,844 126,663 Others 2,447,815 1,127,043 1,002,488 937,505 -- 123,810 123,344 Sales Discount (48.533) (41,213 (54.605 (31,695) (39.198 I( 1.391) It 4.622) Total Gross Revenue 10,482,289 13,552,695 12,349,555 7,923,219 5,030,328 2,116,281 1,980,229 Cost of Fuel Sold" (8.066.874) (10.874.073 9� .886,569) 4 7(• 22.601) 2 4(. 94.063) 1 O(. 26,735) 72( 8,259} Net Revenue $ $ 2.6 $ 2.462.486 $ 3"200.618 SIML $ $ Excludes sales and deliveries of Avgas/IOOLL fuel, auto fuel, diesel, and oil. Z Includes revenue from fuel sales and from flowage fees for fuel delivery. 3 Aviation Services provides fuel discounts to Airport hangar tenants only. 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. -35- 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. -36- 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 Amount Outstanding as of December 31 (Audited) 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 1,706,946 Compensated Absences 179.281 212.959 251250 267.209 282,387 282,387 Total Current Liabilities 3,899,204 6730,557 5,306,891 2,940,218 3,591.902 2,218,956 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 -Tenn Liabilities 19,605,000 19,727,309 19,733,123 19,759173 19,981,642 15,456,628 Total Liabilities 23,504,204 26,457,866 25,040,014 22,699,491 23,573,544 17.675.584 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 3360.159 3,479,801 4,258,478 Total Net Position 61,388,487 72,635,850 76,165,485 76.941.475 77.891,011 79.836,529 Total Liabilities and Net Position $ $ $ 101.205.499 $266 $ 101.464.555 $ 2Z�i1 L1 Ratio of Long -Term Liabilities to Net Position 31,94 21,16 25 p /0 2L$ 25�0 19-b Long -Term Liabilities as a Percentage of Total Liabilities and Net Position ?,10 0 /0 12 % 122% 12 /. 9�% -37- 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 1,706,946 Compensated Absences 282,387 Total Current Liabilities 2,218,956 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 4,258,478 Total Net Position 79,836,529 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. -38- 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 Year Ending January 1 Principal 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 Totals Total Debt Service Interest Requirements Series 2015B Bonds Total Debt Service Principal Interest Requirements -39- Combined Total Debt Service Requirements 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) -40- WE Summary of Airport Revenues and Expenses Four -Month Periods Years Ended December 31 (Audited) Ended April 30 (Unaudited) 2010 2011 2012 2013 2014 2014 2015 Operating Revenue: Landing Fees $ 448,104 $ 542,786 $ 845,401 S 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 Sales' 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 74.70 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 Expense 8,070,175 10,915,515 9912,070 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 2,445,035 815,011 815,011 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 X887 999 360 Total Operating Expense 16.687.049 20.530.886 20.191643 15.980.743 14,039,324 4560,530 4.483.905 Operating Income (Loss) (1,217.088) (808A56) (1.085.192) 5( 26.882 8( 16.763 424.957 755.246 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 (1037.088) 51.037.094) (1.037.094) (1,037,094 (1.037.102) (345.701 (345.701} Net Non - Operating Revenue 770,568 1 407 267 1333,193 1,038.689 1,257.897 282.069 334.044 Net Income Before Transfers (446.520) 59&811 248001 5 11 807 441.134 707.026 1,089,290 Capital Contributions 377,018 11,538,487 3,292,284 264,183 508,402 72,350 862,775 Transfers Out (In) to other Funds ofthe Consolidated Government 10.650 (3.307) (3.543) Change in Net Position (69,502) 12,137,298 3,550,935 775,990 949,536 776,069 1,948,522 Net Position, Beginning of Year 61,457,989 61,388,487 72,635,850 76,165,485 76,941,475 76,941,475 77,891,001 Prior Period Adjustment (889.935) -- Net Position, Beginning of Year, as restated 61.457.989 60,498,55 71635.850 76.165.485 76.941.475 76.941.475 77.891.000 Net Position, End of Year $ S MM S S Z $Z 41 Qll S 7 -717 540 S 22JQ2,Q 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. WE 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 8.1% of total operating revenue. Over the five -year period, rental car revenue increased on average by 8.4% 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 28.7% 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. -42- 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 Revenue Bonds Secured Only by Net General Revenues Net General Revenues Available for Debt Service' Debt Service on Revenue Bonds Secured Only by Net General Revenue s Z Historical Debt Service Coverage Ratio Revenue Bonds Secured by Net General Revenues and PFC Revenues Remaining Net General Revenues Available for Debt Service PFC Revenues Available for Debt Service Total Revenues Available for Debt Service Debt Service on Revenue Bonds Secured by Net General Revenues and PFC Revenues' Historical Debt Service Coverage Ratio Years Ended December 31 2010 2011 2012 2013 2014 $964,153 $1,350,015 $1,036,700 $1,589,075 $1,628,272 510,429 510,429 510,429 510,429 510,429 Lux 2-6Ax 2Mx LUX Lux $ 453,724 $839,586 $526,271 $1,078,646 $1,117,843 909,816 1,222,709 1,113,026 1,074,276 1,090,518 1,363,540 2,062,295 1,639,297 2,152,922 2,208,361 1,040,3 55 1,040,355 1,040.355 1,040,355 1,040,355 L31x Lux i-Ux 2Mx 2A2x 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 2005E Bonds, but not the Series 2005C Bonds. The Series 2005B Bonds were paid in full in January 2015 and are no longer outstanding. ' 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. -43- 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. Airport Budget for Year Endin¢ 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 Sales' 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 Expense` 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 971,780 Total Operating Expense 17,039,265 Operating Income (Loss) (2,052,725 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 $ 1.328.085) Includes revenue from fuel sales and from flowage fees for fuel deliveries. Includes all fuel types sold or delivered. Represents cost of fuel sold, including all fuel types. -44- 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. The staff of the Airport maintains a multi -year capital improvements program and a plan to finance the program that relies on several funding sources. The capital improvements program is based on the federal fiscal year, which starts October I of each year and ends of September 30 of the following year, since a substantial source of funding is from the Airport Improvement Grant Program ( "AIP "), which is administered by the FAA. 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 based on funding availability and needs. To the extent that any portion of the funding sources assumed in the program is not available as anticipated, the Consolidated Government may be required to defer or remove certain projects. The following table summarizes the Airport's capital improvements program for the current year ending September 30, 2015 through the year ending September 30, 2020. Funding Sources Total Value 015 Debt Proceeds 2017 Fiscal of Capital Airport Customer Facility and Investment Federal Grants - Year Improvements Revenues Charges Earnings In -Aid 2010 $ 1,115,623 $ 105,070 $354,733 $ 278,802 $ 377,018 2011 17,197,216 5,391,716 267,013 -•• 11,538,487 2012 10,710,621 4,488,494 862,165 2,067,678 3,292,284 2013 968,699 655,892 48,624 - -- 264,183 2014 1,709,121 744,744 455,975 - -- 508,402 The staff of the Airport maintains a multi -year capital improvements program and a plan to finance the program that relies on several funding sources. The capital improvements program is based on the federal fiscal year, which starts October I of each year and ends of September 30 of the following year, since a substantial source of funding is from the Airport Improvement Grant Program ( "AIP "), which is administered by the FAA. 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 based on funding availability and needs. To the extent that any portion of the funding sources assumed in the program is not available as anticipated, the Consolidated Government may be required to defer or remove certain projects. The following table summarizes the Airport's capital improvements program for the current year ending September 30, 2015 through the year ending September 30, 2020. -45- Years Ending September 30 015 2016 2017 2018 2019 2070 Total Type of Capital Expenditure Airfield Improvements $ 567,159 $26,862,970 $13,660,000 S 754,000 $8,000,000 $ - -- $49,844,129 Terminal Improvements 739,903 - -- - -- - -- - -- - -- 739,903 Parking Improvements 100,000 - -- - -- - -- - -- 100,000 Infrastructure 145,000 4,137,712 - -- 1,838,860 - -- - -- 6,121,572 Aircraft Rescue and Firefighting Facility Rehab/Relocation - -- - -- - -- - -- 675,000 7,425,000 8,100,000 Rental Car Facility - 8000.000 - 8.00U0 000 Total Costs $ $ $2 ! $ $ SLM) $� Type of ource Funding, Source Federal Grants -In -Aid' Entitlement Funds $1,078,698 S 3,190,742 $ 2,134,720 $2,134,720 $2,134,720 $2,134,720 $12,808,320 Discretionary Funds - -- 13,940,346 10,159,280 198,854 5,672,780 4,547,780 34,519,040 State of Georgia Grants 29,964 475,864 341,500 64,822 216,875 185,625 1,314,650 Customer Facility Charges 100,000 8,000,000 - -- - -- - -- 8,100,000 SPLOSTtTSPLOST 108,508 11,966,139 - -- - -- - -- 12,074,647 Airport Revenues 234.892 1.427.591 1.024.500 194,464 650,625 556.875 4088.947 Total Funding Sources $ $ 31 4.482 S $ Z2 SLQ $ 8.675.000 $ Z 42yQ4 $ 1 See "AIRPORT FINANCIAL INFORMATION -Federal Grants -In -Aid" herein. 2 Represents proceeds of a one percent special purpose local option sales tax and a one percent transportation special purpose local option sales tax, each of which are currently in effect in Richmond County. -45- In addition to the approximately $72.9 million of planned expenditures set forth above, the Airport's capital improvements program for 2015 through 2020 includes approximately $53.4 million of additional capital improvements for which funding sources are not currently known. These capital improvements include, among other things, hangar replacement, maintenance facility replacement, southeast side infrastructure construction, and long term parking lot rehabilitation. The timing of these capital improvements, as with all capital improvements included in the Airport's capital improvements program, will depend on funding availability and needs. 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 -46- 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 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, 2001, 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. On August 30, 2011, the FAA approved another amendment to the first PFC application, decreasing the total amount authorized to be collected to $27,636,360, due to a decrease in the cost of the new terminal facility, and shortening the charge expiration date to August 1, 2024. The FAA's approval, as amended, authorizes PFC revenues to be applied to bond financing with respect to PFC - approved projects. 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. The FAA's approval 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, this approval 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). On October 6, 2011, the Aviation Commission received approval, pursuant to a third PFC application, to collect a $4.50 PFC from September 1, 2026 to November 1, 2027 on each qualifying enplaning passenger totaling $2,091,034, in order to pay for certain PFC- approved projects at the Airport, including runway rehabilitation and improvements to the Airport's general aviation terminal parking lot. The FAA's approval allows the Aviation Commission to impose and use these PFCs for the payment of PFC- approved project costs only on a pay -as- you -go basis ($2,091,034). 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. -47- 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 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 2020 includes approximately $47.3 million in funding from AIP grants, of which approximately $12.8 million is expected to be entitlement funding and approximately $34.5 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. See "INVESTMENT CONSIDERATIONS - Federal Funding; Impact of Federal Sequestration" herein. 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. 7MTH,MW' ._7t 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 -48- 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. Set forth below is selected information about the Consolidated Government's defined - benefit pension plans. Contributions to Defined- Benefit Pension Plans 1945 Plan Employee Contributions Employer Contributions General Retirement Plan Employee Contributions Employer Contributions GMEBS' Employee Contributions Employer Contributions Years Ended December 31 2010 2011 2012 2013 2014 $ 9,673 $ 6,253 $ 6,569 340,451 390,996 291,502 $ 6,617 $ 6,661 299,605 290,565 $ 326,923 $ 291,737 $ 219,125 1,403,253 1,543,071 2,826,791 $2,922,763 $2,913,475 $3,052,262 3,167,267 4,893,018 5,082,322 $ 202,735 $ 185,458 1,924,332 2,256,722 $3,022,920 3,377,580 5,170,685 5,297,640 The 1977 Plan was terminated effective January 1, 2008 when all participants in the 1977 Plan were transferred to the GMEBS Plan. Analvsis of Funding Proaress of Defined - Benefit Pension Plans 1945 Plan (Funded) Unfunded (Funded) Actuarially Unfunded Accrued Actuarial Actuarially Actuarially Liability as a Valuation Actuarial Accrued Accrued Funded Covered Percentage of Date Value of Assets Liability Liability Ratio Payroll 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 GMEBS' 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. -49- Membership in Defined - Benefit Pension Plans as of January 1. 2014 Retirees and Terminated Plan Members Active Beneficiaries Entitled to But Not Yet Plan Receiving Benefits Receiving Benefits 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 ¢O9 10� ZJ20 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 two years. The actuarial report prepared by The Segal Group, Inc. ( "Segal "), dated August 7, 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 June 30, 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 9.1011 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. -51- Present insurance coverage for the Consolidated Government, including coverage applicable to the Airport, is summarized below. Type Building and Contents' Employee Blanket Bond Public Official Bond for each Commissioner Amount in Force $619,649,004 100,000 10,000 Type Public Officials' Liability Commercial Aviation Liability Bodily Injury and Property Products and Completed Operations Hangarkeepers Liability - Not in Flight Each Aircraft Baggage Liability Contingent Cell Tower Liability Pollution Legal Liability Directors and Officers Liability` Automobile Liability' Limits of Liability Each Occurrence Aggregate $ 2,000,000 None 100,000,000 None 100,000,000 $100,000,000 100,000,000 None 1,000,000 1,000,000 100,000,000 100,000,000 10,000,000 10,000,000 1,000,000 1,000,000 1,000,000 None Includes boiler and machinery and valuable papers. Self - insured retention of $10,000 applies. 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 8 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. -52- 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 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 -53- 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 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) I S% 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. -54- 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. 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 -55- 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. 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. -56- 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 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 and "SUMMARY OF THE AIRLINE AGREEMENTS" in Appendix C hereto. 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, federal inspection services, 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 on September 30, 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. As of the date of this Official Statement, Congress has not enacted legislation to reauthorize the FAA beyond September 30, 2015, and there can be no assurance that the FAA will receive spending authority beyond that date. 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. -57- 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 opinions will be available at the time of delivery of the Series 2015 Bonds. It is anticipated that the approving opinions will be in substantially the forms 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. 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 excluded from gross income for federal income tax purposes, Bond Counsel will (i) rely as to certain factual matters upon certificates and certified proceedings of public officials of the Consolidated Government, and representations of the Consolidated Government with respect to, among other things, the use of the proceeds of the Series 2015 Bonds, the Series 2005A -58- Bonds, and the Series 20050 Bonds 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, including, but not limited to, the arbitrage requirements contained in Section 148 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 the State of Georgia under applicable state or local laws. Purchasers of the Series 2015 Bonds should consult their tax advisors as to the tax- exempt status of interest on the Series 2015 Bonds in a particular state or local jurisdiction other than the State of 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 -59- in this Official Statement does not contain any misstatement of a material fact and does not omit to state any material fact necessary to make the statements herein contained, in light of the circumstances under which they were made, not misleading. MISCELLANEOUS Ratings Moody's Investors Service, Inc. and Standard & Poor's Ratings Services, a division of The McGraw -Hill Companies, Inc., have assigned ratings of "Baa2" and "BBB," respectively, to the Series 2015 Bonds. The ratings reflect only the respective views of the rating agencies, and an explanation of the significance of each rating may be obtained from the rating agency furnishing such rating, at the following addresses: Moody's Investors Service, Inc., 7 World Trade Center, 250 Greenwich Street, New York, New York 10007 and Standard & Poor's Ratings Services, 55 Water Street, New York, New York 10041. Generally, a rating agency bases its rating on the information and materials furnished to it and on investigations, studies, and assumptions of its own. There is no assurance that either or both of such ratings will remain unchanged for any given period of time or that they will not be revised downward or withdrawn entirely by the rating agency furnishing the same, if, in its judgment, circumstances so warrant. Any such downward revision or withdrawal of such ratings, or either of them, may have an adverse effect on the liquidity and market price of the Series 2015 Bonds. 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. -60- 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. "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 the last day of the seventh month after the end of each Fiscal Year (currently July 31), commencing with Fiscal Year 2015, 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 -61- 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 the MSRB 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; (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) enpaanements 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, (1) 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; -62- (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. 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 S (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 2015 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 2015 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 1732 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 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. -64- 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 ! This page intentionally left blank. 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] This page intentionally left blank. AUGUSTA REGIONAL AIRPORT AT BUSH FIELD AUGUSTA, GEORGIA FINANCIAL REPORT FOR THE YEARS ENDED DECEMBER 31, 2014 AND 2013 AUGUSTA REGIONAL AIRPORT AT BUSH FIELD AUGUSTA, GEORGIA FINANCIAL REPORT FOR THE YEARS ENDED DECEMBER 31, 2014 AND 2013 TABLE OF CONTENTS Pane INDEPENDENT AUDITOR'S REPORT ................................................................................... ..............................1-3 MANAGEMENT'S DISCUSSION AND ANALYSIS .............................................................. ............................... 4 -13 FINANCIAL STATEMENTS Statementsof Net Position ................................................................................................. ............................... 14 Statements of Revenues, Expenses and Changes In Fund Net Position ...................... ............................... 15 Statementsof Cash Flows ........................................................................................ .............................16 and 17 Notes to Financial Statements ................................................................................... ............................... 18-42 REQUIRED SUPPLEMENTARY INFORMATION Schedules of Funding Progress — Defined Benefit Retirement Plans ........................... ............................... 43 Schedule of Funding Progress — Other Post - employment Benefit Plan ....................... ............................... 44 Schedule of Changes In the Government's Net Pension Liability and RelatedRatios —1945 Plan .................................................................................... ............................... 45 Schedule of Changes In the Government's Net Pension Liability and Related Ratios — General Retirement Plan ........................................................... ............................... 46 Schedule of Government Contributions —1945 Plan ...................................................... ............................... 47 Schedule of Government Contributions — General Retirement Plan ............................. ............................... 48 Schedule of Pension Investment Returns —1945 Plan .................................................... ............................... 49 Schedule of Pension Investment Returns — General Retirement Plan .......................... ............................... 50 To the Aviation Commission and Augusta- Richmond County Commission Augusta, Georgia Report on the Financial Statements We have audited the accompanying basic financial statements of Augusta Regional Airport at Bush Field (the "Airport"), an enterprise fund of Augusta, Georgia, as of and for the years ended December 31, 2014 and 2013, and the related notes to the financial statements, which collectively comprise the Airport's basic financial statements as listed in the table of contents. Management's Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor's Responsibility Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. 300 MULBERRY STREET, SUITE 300 - POST OFFICE BOX 1877 • MACON, GEORGIA 31202 - 1877.478-464 -8000 - FAX 478 -464 -8051 • www.mjcpa.com MEMBERS OF THE AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS Opinion In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Augusta Regional Airport at Bush Field, an enterprise fund of Augusta, Georgia as of December 31, 2014 and 2013, and the changes in financial position and cash flows thereof for the years then ended in accordance with accounting principles generally accepted in the United States of America. Emphasis of Matter As discussed in Note 1, the financial statements present only the Augusta Regional Airport at Bush Field enterprise fund of Augusta, Georgia and do not purport to, and do not, present fairly the financial position of Augusta, Georgia as of December 31, 2014 and 2013, the changes in its financial position or its cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America. Our opinion is not modified with respect to this matter. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the Management's Discussion and Analysis (on pages 4 through 13) and the Schedule of Funding Progress on pages 43 and 44 and the Schedules of Changes in the Government's Net Pension Liability and Related Ratios, Schedules of Government Contributions, and Schedules of Pension Investment Returns (on pages 45 through 50) be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. 2 Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated June 29, 2015, on our consideration of Augusta Regional Airport at Bush Field's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the Airport's internal control over financial reporting and compliance. /f4u/64� , A ee Macon, Georgia June 29, 2015 3 AUGUSTA REGIONAL AIRPORT AT BUSH FIELD AUGUSTA, GEORGIA MANAGEMENT'S DISCUSSION AND ANALYSIS The following discussion and analysis of the financial performance and activity of the Augusta Regional Airport at Bush Field ( "the Airport") provides an introduction and understanding of the basic financial statements of the Airport for the fiscal years ended December 31, 2014 and 2013. This discussion and analysis has been prepared by the Airport's management and should be read in conjunction with the audited financial statements and the notes thereto, which follow this section. This information taken collectively is designed to provide the reader with an understanding of the Airport's finances. Overview of the Financial Statements The Airport is a major enterprise wholly owned by Augusta, Georgia (the "Government ") and conducts business - type activities in its operation of the Airport. The Airport is self - supporting and does not draw on any other Government resources in order to fund its operations, nor does the Government draw from any Airport's revenues in order to fund non - Airport activities. The Airport financial report includes three basic financial statements: the Statement of Net Position, the Statement of Revenues, Expenses and Changes in Position, and the Statement of Cash Flows. The financial statements are prepared in accordance with accounting principles generally accepted in the United States of America. The Statement of Net Position presents information on all of the Airport's assets and liabilities, with the difference between the two reported as net position. Over time, increases or decreases in net position may serve as a useful indicator of the Airport's financial position. The Statement of Revenues, Expenses and Changes in Net Position present information showing how the Airport's net position changed during the year. All changes in net position are reported as soon as the underlying events giving rise to the change occurs, regardless of timing of related cash flows. Thus, revenues and expenses are reported in this statement for certain item(s) that result in cash flows in future fiscal periods. The Statement of Cash Flows reports the flow of cash and cash equivalents. Consequently, only transactions that affect the Airport's cash accounts are recorded in these statements. Reconciliation follows these statements to assist in the understanding of the difference between cash flows from operating activities and operating income. Aviation Highlights Below summarizes the Airport's significant achievements during 2014 and 2013: ❖ The Augusta Regional Airport Commission have selected nationally recognized airport planning and engineering firm Mead & Hunt to lead the consulting team that will prepare an update of the Airport's master plan. This plan examines the Airport's existing operational patterns to create a growth forecast for the next twenty years. The planning and design process started in November 2013. The Airport began a new parking lot project in June 2013 and completed in November 2014 to convert the former rental car ready return spaces into a credit card lot. These spaces are accessed through a gate arm system with the ability to pay by credit card upon exiting. The new credit card lot created approximately 165 additional spaces. 4 AUGUSTA REGIONAL AIRPORT AT BUSH FIELD AUGUSTA, GEORGIA MANAGEMENT'S DISCUSSION AND ANALYSIS Set forth below is historical enplanements, operations, and landing weight. Enplanements : Operations: Airlines General Aviation Military Total Airline Landed Weioht (1,000 pound units): Financial Highlights Revenues Airline Agreements Percent Percent Change Change from from 2014 2013 2012 2013 2012 269,902 270,805 279,242 -0.3% -3.0% 12,063 13,564 13,295 -11.1% 2.0% 11,621 11,605 12,481 0.1% -7.0% 2,273 1,783 1,981 27.5% - 10.0% 25,957 26,952 27,757 -3.7% -2.9% 307,712 321,687 308,202 4.3% 4.4% The terminal rates and charges for commercial airline activity are established annually in accordance with the Airline Lease Agreement as adopted by Augusta, Georgia, a political subdivision of the State of Georgia through the Augusta Aviation Commission on September 26, 2013. The rates and charges are to cover net operating cost as projected in the Airport's annual budget as approved by the Augusta Aviation Commission and adopted by Augusta, Georgia. Under the lease agreement, rents and fees will be adjusted whenever the Augusta Aviation Commission determines that Airport revenues are not sufficient to satisfy the requirements of the ordinance. Rents, fees, and charges are calculated proportionate to each airport cost center budget (Airfield, Apron, Loading Bridges, Terminal Area, Terminal Building, Aviation Services, Other buildings and areas). Rates and charges will be established to provide recovery of pro rata direct and indirect operation and maintenance expenses, 1.25 times annual debt service coverage and amounts of deposits to any funds and accounts required by the Bond Resolution. Non - Airtine 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 Airport 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. As the Airport's exclusive fuel provider, it delivers approximately three million gallons of jet fuel annually. 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. Currently, Aviation Services generates approximately one -third of the Airport's total revenues. AUGUSTA REGIONAL AIRPORT AT BUSH FIELD AUGUSTA, GEORGIA U. . U-1111441-1 The Airport purchases substantially all of its aviation fuel for resale from AVFuel Corporation, a global supplier of aviation fuels and services with over 600 branded FBOs and 4,000 other customers globally. Those customers include, but are not limited to, other FBOs, airport authorities, flight departments, airlines, and the Department of Defense. Avfuel Corporation has been the Airport's fuel supplier since 2001 and currently holds a three year fuel supplier contract with two one year extension options. Terminal Building Concession Agreements: The Airport 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 Airport. Pursuant to the Concessions Agreement, the Concessionaire pays the Airport five percent of gross food and non- alcoholic beverage sales and ten percent of gross retail and alcoholic beverage sales. In 2014, the Airport received revenues equal to approximately $0.35 per enplaned passenger from concessions in the terminal building. Public Parking Agreements: During 2014, the Airport increased the daily parking rates to $10.00 in the short-term lot and to $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 Airport 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 Airport entered into Rental Car Agreements in 2012, with agreements with seven rental car companies: Avis, Budget, Enterprise, Hertz, Alamo /National, Thrifty, and Ace. The initial term of each Rental Car Agreement was set to expire in 2015. Pursuant to each Rental Car Agreement, each Rental Car Company pays the Airport 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 Airport 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 Airport. Miscellaneous Agreements. The Airport 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). Total revenues for the Airport decreased 9.9% in 2014 compared to 2013. Operating revenue for the Airport decreased by 14.4% while non - Operating revenues increased 19.8 %. Comparative figures for the last three years are in the chart below: TOTAL REVENUES Percent Percent Change Change from from 2014 2013 2012 2013 2012 Operating revenues $ 13,222,561 $ 15,453,861 $ 19,107,452 - 14.4% -19.1% Non- operating revenues 2,803,401 2,339,966 5,662,571 19.8% - 58.7% Total revenues $ 16,025,962 $ 17,793,827 $ 24,770,023 -9.9% -28.2% AUGUSTA REGIONAL AIRPORT AT BUSH FIELD AUGUSTA, GEORGIA MANAGEMENT'S DISCUSSION AND ANALYSIS Operating Revenues Fuel sales represented the largest source of operating revenue. Gross sales reduced by 35.3% during 2014 from 2013 and by 35.1% during 2013 from 2012, due to a decrease in non - military and military contract sales. For many years, the Airport had been practicing buy -back arrangements. However, due to significant fuel cost fluctuations, it became necessary to procure fuel on a consignment basis. With buy -back arrangements, the Airport allows the supplier to maintain Jet -A fuel inventory for the contract customers with the understanding that the Airport would receive a flowage fee for every gallon delivered. In addition to the sales from retail customers and Department of Defense (DoD) customers, the Airport accounts for the reimbursements for the portion in consignment. Effective March 25, 2013, the Airport ceased buy -back arrangements in which it receives only In To Planes Fees for the quantity delivered to the contract customers. During 2014 and 2013, In To Planes Fees was $0.2 per gallon for signatory airlines and $1.65 per gallon for others. Parking revenue and rental car concession revenue represented the second and third largest sources of operating revenue. Parking revenue increased by 17.9% during 2014 from 2013 and by 1.7% during 2013 from 2012, due mainly to expansion of parking spaces during 2012 and the completion of the new credit card lots in 2014, which added approximately 775 additional spaces combined. Rental car concession revenue increased by 10.7% during 2014 from 2013, due to the increase in rental car privilege fee in proportion to their gross revenues. It decreased by 3.6% during 2013 from 2012. 7 Percent Percent Change Change 2014 2013 2012 from 2013 from 2012 Landing fees $ 1,158,656 $ 1,179,976 $ 845,401 -1.8% 39.6% Terminal area rental 817,540 796,441 746,517 2.6% 6.7% Security reimbursements 58,400 58,400 47,547 0.0% 22.8% Apron charges 1,189,366 1,078,140 682,640 10.3% 57.9% FBO revenue 44,408 53,853 25,298 -17.5% 112.9% Fuel sales (gross) 5,248,244 8,115,842 12,499,779 - 35.3% -35.1% Other aeronautical 41,576 39,397 32,911 5.5% 19.7% Land /non- terminal fees 620,610 657,157 680,087 -5.6% -3.4% Terminal food /beverage 70,298 72,384 74,949 -2.9% -3.4% Terminal other - - 24 - - 100.0% Rental cars 1,487,900 1,343,477 1,393,452 10.7% -3.6% Parking 2,368,627 2,008,932 1,975,937 17.9% 1.7% Non - aeronautical 42,236 48,846 23,459 -13.5% 108.2% Miscellaneous Income 74,700 1,016 79,451 7252.4% - 98.7% Total operating revenue $13,222,561 $15,453,861 $19,107,452 - 14.4% - 19.1% 7 AUGUSTA REGIONAL AIRPORT AT BUSH FIELD AUGUSTA, GEORGIA MANAGEMENT'S DISCUSSION AND ANALYSIS Non - operating Revenues Non - operating revenues comprise of capital contributions, passenger facility charges (PFC), customer facility charges (CFC), and investment income. The increase by 19.8% during 2014 and decrease by 58.7% during 2013 is due mainly to the increase and decrease in capital contributions. Set forth below is the projects funded by the Federal Aviation Administration (FAA) as Airport Improvement Project (AIP) grant eligible out of the Airport's five - year Capital Improvement Plan (CIP) from 2010 through 2015. The FAA funds 90 % -95% of the project costs on a reimbursements basis. Set forth below shows the amount reimbursed during 2012, 2013, and 2014. As of December 31, 2012, approximately 90% of Runway 35 -17 Rehabilitation Project and Joint Crack Seal and Pavement Markings & Aircraft Rescue Fire Fighting (ARFF) Equipment Project was complete. During 2012, the Aircraft Rescue Fire Fighting (ARFF) Vehicle was purchased at lump sum. During 2013, the Airport closed the two aforementioned projects and began Master Plan Update Project. During 2014, the Airport continued implementing Master Plan Update and started multiple projects funded by RIP Grant 37. The amount reimbursed during 2014, 2013, and 2012 was $502,672, $218,188, and $1,146,935 respectively. This explains significant increase and decrease during 2013 and 2014. Aimnrt Imnrnvamant Pmlant IAIPI Reimbursements Alp Grant# 2014 2013 2012 33 State 122,810 Alp Project Description Year Project FAA and Year Grant# 422,407 Awarded Cost Share Local Completed 201,315 0 0 Total 502,672 Match 3,314,036 33 Runway 35-17 Rehabilitation 2010 14,637,433 13,905,561 731,872 2013 34 Aircraft Rescue Fire Fighting (ARFF) Vehicle 2011 505,631 1 480 25,282 2012 Joint Crack Seal and Pavement 35 Markings Project & Aircraft Rescue Fire Fighting (ARFF) Equipment 2012 524,500 472,050 52,450 2013 36 Master Plan Update 2013 631,557 568,401 63,156 in progress Taxiway A Extension and Aircraft Rescue Fire Fighting (ARFF) Pavement Rehabilitation Security System Upgrade 37 2014 1,396,140 1,256,526 139,614 in progress Electrical Assessment DBE Goal Setting East Side Development Airfield Lighting Electrical Vault Reimbursements Alp Grant# 2014 2013 2012 33 0 122,810 2,411,279 34 0 0 480,349 35 0 34,319 422,407 36 1 301,357 61,059 0 37 201,315 0 0 Total 502,672 218,188 3,314,036 8 AUGUSTA REGIONAL AIRPORT AT BUSH FIELD AUGUSTA, GEORGIA MANAGEMENT'S DISCUSSION AND ANALYSIS Operating Expenses During 2014, fuel expense decreased by 47.4 %. It reflects decreased fuel purchases associated with decrease in military and non - military sales due to Airport's ceasing buy back arrangements effective March 25, 2013 (see Page 7). Contractual services and personnel salaries /benefits increased by 18.0% and 5.2 %. Overall, the 2014 operating expense decreased by 12.1 % as compared to 2013 Percent Percent Change Change 2014 2013 2012 from 2013 from 2012 Personnel salaries/benefits $ 5,252,691 $ 5,313,547 $ 5,082,946 -1.1% 4.5% Communications and utilities 738,000 731,345 714,419 0.9% 2.4% Repairs and maintenance 380,500 310,417 257,198 22.6% 20.7% Fuel expense 2,495,551 4,746,424 9,912,070 - 47.4% - 52.1% Contractual services 965,493 530,002 633,094 82.2% - 16.3% Insurance 197,767 165,213 153,511 19.7% 7.6% Supplies and materials 118,035 787,719 176,741 - 85.0% 345.7% Depreciation 2,445,035 2,115,957 2,121,892 15.6% -0.3% Miscellaneous expense 620,438 532,957 423,835 16.4% 25.7% Other expense 824,815 747,162 686,050 10.4% 8.9% Bad debt expense 9 9 9 - 30,887 - - 100.0% Total Operating Expense $14,039,324 $15,980,743 $20,192,643 -12.1% -20.9% Non - operating Expenses Non - operating expenses comprise interest on long term debt as explained on Page 12. Interest expense was $1,037,102, $1,037,094, and $1,037,094 in 2014, 2013, and 2012, respectively. 0 AUGUSTA REGIONAL AIRPORT AT BUSH FIELD AUGUSTA, GEORGIA MANAGEMENT'S DISCUSSION AND ANALYSIS Changes in Net Position The changes in net position for the years ended December 31, 2014, 2013, and 2012 are as follows: Percent Percent Change Change from from 2014 2013 2012 2013 2012 Operating revenue $13,222,561 $15,453,861 $19,107,452 - 14.4% - 19.1% Operating expense, excluding depreciation - 11,594,289 - 13,864,786 - 18,070,751 -16.4% - 23.3% Operating income before depreciation 1,628,272 1,589,075 1,036,701 2.5% 53.3% Depreciation expense -2,445,035 -2,115,957 -2,121,892 15.6°x6 -0.3% Operating income after depreciation - 816,763 - 526,882 - 1,085,191 55.0% - 51.4% Non - operating revenue 2,803,401 2,339,966 5,651,921 19.8% - 58.6% Non - operating expense - 1,037,102 - 1,037,094 - 1,037,094 0.0% 0.0% Transfers 0 0 10,650 - 100.0% Change in net position $949,536 $775,990 $3,529,636 22.4% - 78.0% Net position, beginning of year 76,941,475 76,165,485 72,635,850 1.0% 4.9% Net position, end of year $77,891,011 $76,941,475 $76,165,486 1.2% 1.0% Change in net position decreased by 22.4% during 2014 and by 78.0% during 2013. It is due primarily to the decrease in non - operating revenue as stated on page 8. 10 AUGUSTA REGIONAL AIRPORT AT BUSH FIELD AUGUSTA, GEORGIA MANAGEMENT'S DISCUSSION AND ANALYSIS Financial Position The statements of net position present the financial position of the Airport at the end of the year. The statement includes all assets and liabilities of the Airport. Net position is the difference between total assets and total liabilities and can be viewed as the indicator of the financial health of the Airport. During 2014, net position increased by 1.2% over 2013. Net position increased by 1.0% over 2012. Percent Percent Change Change from from Net investment in capital assets 2014 2013 2012 2013 2012 Current assets $ 7,448,345 $ 6,454,650 $ 8,093,428 15.4% -20.2% Restricted investments 20,741,172 19,175,364 17,953,861 8.2% 6.8% Capital assets, net 73,275,038 74,010,952 75,158,210 -1.0% -1.5% Total assets $101,464,555 $99,640,966 $101,205,499 1.8% -1.5% Current liabilities 3,591,902 2,940,218 5,312,705 22.2% - 44.7% Noncurrent liabilities 19,981,642 19,759,273 19,727,309 1.1% 0.2% Total liabilities $23,573,544 $22,699,491 $25,040,014 3.9% -9.3% Net investment in capital assets 53,670,038 54,405,952 55,553,210 -1.4% -2.1% Restricted for capital outlay 12,191,773 11,140,196 10,432,884 9.4% 6.8% Restricted for debt service 8,549,399 8,035,168 7,520,977 6.4% 6.8% Unrestricted 3,479,801 3,360,159 2,658,414 3.6% 26.4% Total net position $77,891,011 $76,941,475 $76,165,485 1.2% 1.0% Total assets increased by 1.8% in 2014 compared to 2013. The increase is the result of the increase in cash and cash equivalent and cash for investments. Total assets decreased 1.5% in 2013 compared to 2012. The decrease is the result of the depreciation of the depreciable capital assets. Total liabilities increased by 3.9% in 2014 compared to 2013. The increase is due to receipts of multiple vendor invoices dated December 31, 2014 including retainage payable. Total liabilities decreased by 9.3% in 2013 compared to 2012. The decrease is due to timely receipts and payments of the vendor invoices during and at the end of the year including retainage payable. The majority of the Airport's net position reflects its investment in capital assets less the related indebtedness outstanding used to acquire those capital assets. The Airport uses these capital assets to provide services to the airlines and to its passengers and visitors; consequently, these assets are not available for future spending. The Airport reports its net investment in capital assets. The resources required to repay the debt must be provided annually from operations since it is unlikely that the capital assets themselves will be liquidated to pay the liabilities. lillil AUGUSTA REGIONAL AIRPORT AT BUSH FIELD AUGUSTA, GEORGIA MANAGEMENT'S DISCUSSION AND ANALYSIS Financial Position (Continued) Restricted net assets reflect the portion of the Airport's net position restricted for debt and capital projects that are subject to external restrictions by the bond resolution, and PFCs that are restricted by federal regulations. The unrestricted portion of net position, $3.5 million, may be used to meet the Airport's ongoing obligations. Airport Capital Assets and Capital Improvement Plan As of year ended December 31, 2014, 2013, and 2012, the Airport had capital assets of $73.3 million, $74.0 million, and $75.2 million respectively. The majority of these balances are land, buildings, other property and equipment; net of any related accumulated depreciation. For these years, the balance in construction in progress was $6.8 million, $5.8 million, $26.2 million respectively. For 2014, the list below identifies the components of the Airport's construction in progress account. Additional information regarding the Airport's capital assets can be found in Note 3 in the Note to Financial Statements. CONSTRUCTION IN PROGRESS (CIPI Total Construction in Progress $6,832,110 Long -term Debt In February 2005, the Airport issued $19,605,000 in Airport Revenue Bonds for the purpose of paying the costs of acquiring, constructing and installing a new airline passenger terminal and certain other capital improvements. The bonds are divided into three issues with $6,200,000 paying 5.45% due on January 1, 2031, $4,415,000 paying 5.35% due on January 1, 2028, and $8,990,000 paying 5.15% due on January 1, 2035. During 2014 and 2013, the Augusta Aviation Commission did not procure additional long -term debt. Additional information on the Airport's long -term debt can be found in Note 5 of the notes to the financial statements of this report. 12 2014 Front Door Parking Improvement $5,315,489 ARFF Station Improvement 244,011 General Aviation Apron Design 119,220 Taxiway Extension/ARFF Pavement Rehabilitation 179,862 Consolidated Rental Car Facility 61,330 Credit Card Parking Facility 356,384 Master Plan Update 402,685 Security System Upgrade 96,815 Electrical Assessment 5,863 Loading Bridge Replacement 24,800 DBE Goal Setting 2,715 East Side Development 3,995 Front side Entrance Landscaping 5,926 Airfield Lighting Electrical Vault 13,015 Total Construction in Progress $6,832,110 Long -term Debt In February 2005, the Airport issued $19,605,000 in Airport Revenue Bonds for the purpose of paying the costs of acquiring, constructing and installing a new airline passenger terminal and certain other capital improvements. The bonds are divided into three issues with $6,200,000 paying 5.45% due on January 1, 2031, $4,415,000 paying 5.35% due on January 1, 2028, and $8,990,000 paying 5.15% due on January 1, 2035. During 2014 and 2013, the Augusta Aviation Commission did not procure additional long -term debt. Additional information on the Airport's long -term debt can be found in Note 5 of the notes to the financial statements of this report. 12 AUGUSTA REGIONAL AIRPORT AT BUSH FIELD AUGUSTA, GEORGIA MANAGEMENT'S DISCUSSION AND ANALYSIS Request for Information This financial report is designed to provide a general overview of the Airport's finances for all interested parties. Questions concerning any of the information provided in this report, or request for additional information should be addressed to: Risa Bingham, MBA, CPA Finance Director Augusta Regional Airport, 1501 Aviation Way, Augusta, GA 30906 E -mail: RBingham @augustaga.gov 13 AUGUSTA REGIONAL AIRPORT AT BUSH FIELD AUGUSTA, GEORGIA STATEMENTS OF NET POSITION DECEMBER 31, 2014 AND 2013 ASSETS CURRENT ASSETS Cash and cash equivalents Investments Trade receivables Due from other governments Due from other funds of the Government Inventories Accrued interest receivable Restricted cash and cash equivalents Restricted investments Total current assets 2014 $ 3,138,375 1,434,367 2,266,936 367,860 22,656 205,576 12,575 17,557,015 3,184,157 28,189,517 2013 $ 2,052,458 1,786,033 2,132,213 188,745 22,656 268,797 3,748 19,175, 364 25,630,014 NONCURRENT ASSETS Non - depreciable Depreciable, net of accumulated depreciation Total noncurrent assets Total assets LIABILITIES CURRENT LIABILITIES Accounts payable Accrued expenses Due to other funds of the Government Compensated absences Total current liabilities LONG -TERM LIABILITIES Advance from other funds of the Government Revenue bonds payable Total long -term liabilities Total liabilities NET POSITION Net investment in capital assets Restricted for capital outlay Restricted for debt service Unrestricted Total net positior See Notes to Financial Statements. 12,573,262 60,701,776 73,275,038 101,464,555 1,375,912 160,946 1,772,657 282,387 3,591,902 376,642 19,605,000 19,981,642 23,573,544 53,670,038 12,191,773 8,549,399 11,493,865 62,517,087 74,010,952 99,640,966 1,004,225 140,023 1,521,533 274,437 2,940,218 154,273 19,605,000 19,759,273 22,699,491 54,405,952 11,140,196 8,035,168 3,479,801 3,360,159 $ 77,891,011 $ 76,941,475 14 AUGUSTA REGIONAL AIRPORT AT BUSH FIELD AUGUSTA, GEORGIA STATEMENTS OF REVENUES, EXPENSES AND CHANGES IN FUND NET POSITION FOR THE YEARS ENDED DECEMBER 31, 2014 AND 2013 Operating revenues Landing fees Terminal area rental Security reimbursements Apron charges FBO revenue Fuel sales Other aeronautical Land and non - terminal fees Terminal food and beverage Rental cars Parking Non - aeronautical Miscellaneous income Total operating revenue 2014 $ 1,158,656 817,540 58,400 1,189,366 44,408 5,248,244 41,576 620,610 70,298 1,487,900 2,368,627 42,236 74,700 13,222,561 2013 $ 1,179,976 796,441 58,400 1,078,140 53,853 8,115, 842 39,397 657,157 72,384 1,343,477 2,008,932 48,846 1,016 15,453,861 Operating expenses Personnel compensation and benefits Communications and utilities Repairs and maintenance Fuelexpense Contractual services Insurance Supplies and materials Depreciation Miscellaneous expense Other expense Bad debt expense Total operating expenses Operating loss Nonoperating revenues (expenses) Passenger facility charges Customer facility charges Interest income Interest expense Total nonoperating revenues (expenses) Income before capital contributions Capital Contributions Change in net position Net position, beginning of year Net position, end of year See Notes to Financial Statements. 5,252,691 738,000 380,500 2,495,551 965,493 197,767 118,035 2,445,035 620,438 824,815 999 5,313,547 731,345 310,417 4,746,424 530,002 165,213 787,719 2,115,957 532,957 747,162 14,039,324 15,980,743 (816,763) (526,882) 1,090,518 1,144,445 60,036 (1,037,102) 1,257,897 1,074,276 989,357 12,150 (1,037,094) 1,038,689 441,134 511,807 508,402 264,183 949,536 775,990 76,941,475 76,165,485 $ 77,891,011 $ 76,941,475 15 AUGUSTA REGIONAL AIRPORT AT BUSH FIELD AUGUSTA, GEORGIA STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2014 AND 2013 CASH FLOWS FROM OPERATING ACTIVITIES Receipts from customers and users Payments to suppliers Payments to employees Net cash provided by (used in) operating activities CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Capital contributions Passenger facility charges Customer facility charges Acquisition and construction of capital assets Interest paid Net cash provided by (used in) capital and related financing activities CASH FLOWS FROM INVESTING ACTIVITIES Purchase of investments Proceeds from sale of investments Interest received Net cash used in investing activities Decrease in cash and cash equivalents Cash and cash equivalents, beginning of year Cash and cash equivalents, end of year 2014 $ 13,382,216 (5,945,350) (5,185,158) 2,251,708 508,402 1,090,518 1,144,445 (1,709,121) (1,037,102) (2,858) (3,184,157) 351,666 51,209 (2,781,282) (532,432) 21,227,822 $ 20,695,390 2013 $ 14,374,034 (10,404,703) (4,866,589) (897,258) 264,183 1,074,276 989,357 (968,699) (1,037,094) 322,023 (14,534) 14,482 (52) (575,287) 21,803,109_ $ 21,227,822 Classified as: Cash and cash equivalents Restricted assets: Cash and cash equivalents (Continued) $ 3,138,375 17,557,015 $ 20,695,390 $ 2,052,458 19,175,364 $ 21,227,822 iT-^. AUGUSTA REGIONAL AIRPORT AT BUSH FIELD AUGUSTA, GEORGIA STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2014 AND 2013 Reconciliation of operating loss to net cash provided by (used in) operating activities: Operating loss Adjustments to reconcile operating loss to net cash provided by (used in) operating activities: Depreciation Changes in assets and liabilities: Increase in accounts receivable (Increase) decrease in due from other governments Decrease in inventories Increase (decrease) in accounts payable Increase in accrued expenses Increase (decrease) in due to other funds Increase in advances from other funds Increase in compensated absences Net cash provided by (used in) operating activities See Notes to Financial Statements. 2014 $ (816,763) $ (526,882) 2,445,035 2,115,957 (134,723) (603,992) (179,115) 397,590 63,221 60,592 371,687 (1,505,476) 20,923 25,738 251,124 (899, 575) 222,369 26,150 7,950 12,640 $ 2,251,708 $ (897,258) 2013 M AUGUSTA REGIONAL AIRPORT AT BUSH FIELD AUGUSTA, GEORGIA NOTES TO FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2014 AND 2013 NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Augusta Regional Airport at Bush Field, (the "Airport"), accounts for its financial position and results of operations in accordance with accounting principles generally accepted in the United States of America (U.S.GAAP) applicable to governmental units. The following is a summary of the significant accounting policies: A. Reporting Entity The Airport provides aviation services to residents of Augusta, Georgia and surrounding areas. The Airport is the only airport within Augusta, Georgia and surrounding areas from which service by the major airlines is available. These financial statements present only an enterprise fund and are not intended to present fairly the financial position and results of operations of Augusta- Richmond County, Georgia, (the "Government "), in conformity with accounting principles generally accepted in the United States of America. The Airport is an integral part of the Government's financial reporting entity, and its results are included in the financial report of the Government, which should be read in conjunction with the financial statements. B. Measurement Focus, Basis of Accounting and Basis of Presentation The accounting and reporting policies of the Airport conform to accounting principles generally accepted in the United States of America. The financial statements are prepared on the accrual basis of accounting, whereby revenues are recognized as earned and expenses are recognized as incurred. Proprietary funds distinguish operating revenues and expenses from non - operating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund's principal ongoing operations. The principal operating revenues of the Airport are charges for goods and services provided. Operating expenses of the Airport include the cost of these goods and services, administrative expenses and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as non - operating revenues and expenses. When both restricted and unrestricted resources are available for use, it is the Airport's policy to use restricted resources first, then unrestricted resources as they are needed. 18 NOTES TO FINANCIAL STATEMENTS NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) C. Cash and Cash Equivalents For the purpose of financial statement presentation, the Airport considers all highly liquid investments with an original maturity of less than one year, or with insignificant early withdrawal penalties, to be cash equivalents. Cash equivalents include amounts in certificates of deposit, repurchase agreements, and U.S. Treasury bills, and are stated at cost, which approximates market. All deposits are stated at cost plus accrued interest, which reasonably estimates fair value. The State of Georgia's statutes authorize the Airport to invest in obligations of the United States government and agencies thereof, general obligations of the State of Georgia or any of its political subdivisions, or banks and savings and loan associations to the extent that they are secured by the Federal Deposit Insurance Corporation. D. Investments Investments are reported at fair value. Fair value is determined as follows: short-term investments are reported at cost, which approximates fair value; securities traded on national exchanges are valued at current prices or current prices of similar securities; securities for which an established market does not exist are reported at estimated fair value using selling prices for similar investments for which there is an active market. E. Trade Receivables The Airport operates a fixed base operation facility and provides credit in the normal course of business to customers. The Airport performs ongoing credit evaluations of its customers and monitors credit risk of specific customers, historical trends, and other information. Credit losses, when realized, have not been significant. F. Inventories All items in inventory are valued at lower of cost (first in, first out) or market, and are accounted for using the consumption method. G. Restricted Assets and Liabilities Cash invested in the Airport's sinking fund for the related revenue bond liability is restricted because its use is limited by applicable debt covenants. Cash invested in the Airport's Passenger Facility Charge account is restricted because its use is limited by applicable Passenger Facility Charge agreements. 19 NOTES TO FINANCIAL STATEMENTS NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) H. Capital Assets Property and equipment are recorded by the Airport at original cost at the time of acquisition. Donated capital assets are recorded at their estimated fair value at the date of donation. Improvements are capitalized and depreciated over the remaining estimated useful lives of the related capital assets, as applicable. Minimum capitalization costs are $5,000 for all categories of capital assets. Gains and losses are credited or charged to operations. The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend useful lives are expensed as incurred. Major outlays for capital assets and major improvements are capitalized as projects are constructed. Interest incurred during the construction period of capital assets is included as part of the capitalized value of the assets constructed. No interest expense was capitalized during the fiscal years ending December 31, 2014 or 2013. Depreciation is charged to operating income over the estimated useful lives of assets using the straight -line method. The estimated lives used in determining depreciation are as follows: I. Long -Term Obligations Long -term debt and other long -term obligations are reported as liabilities in the statement of net position. Bond premiums and discounts are deferred and amortized over the life of the bonds using the effective interest method. Bonds payable are reported net of the applicable bond premium or discount. Bond issuance costs are expensed in the period incurred. c Years Building and other improvements 10 -50 Vehicles 3 -8 Machinery and equipment 5 -10 Office furniture and fixtures 3 -8 Other capital items 3 -12 Infrastructure 30 Information tech - hardware 5 Information tech - software 3 I. Long -Term Obligations Long -term debt and other long -term obligations are reported as liabilities in the statement of net position. Bond premiums and discounts are deferred and amortized over the life of the bonds using the effective interest method. Bonds payable are reported net of the applicable bond premium or discount. Bond issuance costs are expensed in the period incurred. c NOTES TO FINANCIAL STATEMENTS NOTE 1. NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) J. Compensated Absences The vacation policy of the Airport provides for the accumulation of up to 43 days earned vacation leave with such leave being fully vested when earned. For the Airport's financial statements, an expense and a liability for compensated absences and the salary- related payments are recorded as leave is earned. The Airport has assumed a first -in, first -out method of using accumulated compensated time. The portion of that time that is estimated to be used in the next fiscal year has been designated as a current liability in the financial statements. No accrual has been established for accumulated sick leave of employees since it is the Airport's policy to record the cost of sick leave only when it is used. K. Use of Estimates Management uses estimates and assumptions in preparing these financial statements in accordance with accounting principles generally accepted in the United States of America. Those estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses. Actual results could differ from those estimates. DEPOSITS AND INVESTMENTS Total deposits as of December 31, 2014 and December 31, 2013, are summarized as follows: As reported in the Statement of Net Position: December 31, 2014 Cash and cash equivalents $ 3,138,375 Investments 1,434,367 Restricted cash and cash equivalents 17,557,015 Restricted investments 3,184,157 $ 25,313,914 Cash deposited with financial institutions $ 20,695,390 Certificates of deposit 4,618,524 $ 25,313,914 As of December 31, 2014, the Airport held the following investments: Investments Maturities Certificates of deposit December 31, 2013 $ 2,052,458 1,786,033 19,175,364 $ 23,013,855 $ 21,227,822 1,786,033 $ 23,013,855 Fair Value 24 month weighted average $ 4,618,524 21 NOTES TO FINANCIAL STATEMENTS NOTE 2. DEPOSITS AND INVESTMENTS (CONTINUED) As of December 31, 2013, the Airport held the following investments: Investments Maturities Fair Value Certificates of deposit 21 month weighted average $ 1,786,033 Credit Risk. State statutes authorize the Airport to invest in obligations of the State of Georgia or other states; obligations issued by the U.S. government; obligations fully insured or guaranteed by the U.S. government or by a government agency of the United States; obligations of any corporation of the U.S. government; prime bankers' acceptances; the local government investment pool established by state law; repurchase agreements; and obligations of other political subdivisions of the State of Georgia. Interest Rate Risk. The Airport's investment policy states that the Airport will structure its portfolio to meet cash requirements for ongoing operations, thereby avoiding the need to sell securities prior to their maturity. The policy also emphasizes the purchase of shorter term or more liquid investments. The policy does not place formal limits on investment maturities. Custodial Credit Risk — Deposits. The Airport does not have a formal custodial credit risk policy. Custodial credit risk for deposits is the risk that, in the event of the failure of a depository financial institution, a government will not be able to recover deposits or will not be able to recover collateral securities that are in the possession of an outside party. State statutes require all deposits and investments (other than federal or state government instruments) to be collateralized by depository insurance, obligations of the U.S. government, or bonds of public authorities, counties, or municipalities. As of December 31, 2014 and 2013, the Airport did not have any balances exposed to custodial credit risk as uninsured and uncollateralized as defined by GASB pronouncements. Custodial Credit Risk — Investments. Custodial credit risk for investments is the risk that, in the event of the failure of the counterparty, the Airport will not be able to recover the value of its investments or collateral securities that are in the possession of an outside party. State statutes require all investments (other than federal or state government instruments) to be collateralized by depository insurance, obligations of the U.S. government, or bonds of public authorities, counties, or municipalities. 22 NOTES TO FINANCIAL STATEMENTS NOTE 3. CAPITAL ASSETS Capital assets activity for the year ended December 31, 2014 is as follows: Capital assets, not being depreciated: Land Construction in progress Total Capital assets, being depreciated: Site improvements Building improvements Buildings Vehicles Machinery and equipment Furniture and fixtures Other capital Information tech - hardware Information tech - software Infrastructure Total Less accumulated depreciation for: Site improvements Building improvements Buildings Vehicles Machinery and equipment Furniture and fixtures Other capital Information tech - hardware Information tech - software Infrastructure Total Beginning Ending Balance Additions Transfers Disposals Balance $ 5,741,152 $ - $ - $ - $ 5,741,152 5,752,713 1,079,397 - - 6,832,110 11,493,865 1,079,397 - - 12,573,262 6,771,716 14,900 - - 6,786,616 2,360,813 - - - 2,360,813 42,040,821 - - - 42,040,821 3,137,208 470,802 - - 3,608,010 3,023,694 - - - 3,023,694 813,983 144,022 - - 958,005 166,144 - - - 166,144 117,304 - - - 117,304 43,116 - - - 43,116 40,515,216 - - - 40,515,216 98,990,015 629,724 - - 99,619,739 (2,329,341) (1,366,934) (11,206,215) (2,120,015) (2,006,200) (596,637) (166,144) ( 87,136) (34,048) (16,560,258) (407,300) (54,779) (998,680) (171,947) (94,320) (62,007) (14,892) (2,097) (639,013) - (2,736,641) - (1,421,713) - (12,204,895) - (2,291,962) - (2,100,520) - (658,644) - (166,144) - (102,028) - (36,145) - (17,199,271) (38,917,963) (36,472,928) (2,445,035) Total capital assets, being depreciated, net 62,517,087 (1,815,311) - - 60,701,776 Total capital assets, net $ 74,010,952 $ (735,914) $ - $ - $ 73,275,038 23 NOTES TO FINANCIAL STATEMENTS NOTE 3. CAPITAL ASSETS (CONTINUED) Capital assets activity for the year ended December 31, 2013 is as follows: depreciation for: Beginning Site improvements Ending (186,816) - Balance Additions Transfers Disposals Balance Capital assets, not Buildings (10,291,794) (914,421) - - (11,206,215) being depreciated: (2,031,037) (133,416) - 44,438 (2,120,015) Machinery and equipment Land $ 5,741,152 $ - $ - $ - $ 5,741,152 Construction in progress 26,234,781 569,457 (21,051,525) - 5,752,713 Total 31,975,933 569,457 (21,051,525) - 11,493,865 Capital assets, being (31,951) (2,097) - - (34,048) Infrastructure depreciated: (663,759) - - (16,560,258) Total (34,401,409) Site improvements 3,470,666 37,251 3,263,799 - 6,771,716 Building improvements 2,360,813 - - - 2,360,813 Buildings 39,476,407 - 2,564,414 - 42,040,821 Vehicles 2,862,772 318,874 - (44,438) 3,137,208 Machinery and equipment 2,994,654 29,040 - - 3,023,694 Furniture and fixtures 813,983 - - - 813,983 Other capital 166,144 - - - 166,144 Information tech - hardware 103,227 14,077 - - 117,304 Information tech - software 43,116 - - - 43,116 Infrastructure 25,291,904 - 15,223,312 - 40,515,216 Total 77,583,686 399,242 21,051,525 (44,438) 98,990,015 Less accumulated depreciation for: Site improvements (2,142,525) (186,816) - - (2,329,341) Building improvements (1,309,084) (57,850) - - (1,366,934) Buildings (10,291,794) (914,421) - - (11,206,215) Vehicles (2,031,037) (133,416) - 44,438 (2,120,015) Machinery and equipment (1,920,809) (85,391) - - (2,006,200) Furniture and fixtures (534,630) (62,007) - - (596,637) Other capital (166,144) - - - (166,144) Information tech - hardware (76,936) (10,200) - - (87,136) Information tech - software (31,951) (2,097) - - (34,048) Infrastructure (15,896,499) (663,759) - - (16,560,258) Total (34,401,409) (2,115,957) - 44,438 (36,472,928) Total capital assets, being depreciated, net 43,182,277 (1,716,715) 21,051,525 - 62,517,087 Total capital assets, net $ 75,158,210 $ (1,147,258) $ - $ - $ 74,010,952 24 NOTES TO FINANCIAL STATEMENTS NOTE 4. royPp LEASES The Airport is lessor of terminal space, land and buildings at Augusta Regional Airport at Bush Field under various operating leases. Some of the leases provide for additional payments based on usage activity in addition to non - cancelable amounts of fixed rates. During 2014 and 2013, rental income totaled $817,540 and $796,441, respectively, for the Augusta Regional Airport at Bush Field. LONG TERM DEBT The following is a summary of long -term debt activity for the year ended December 31, 2014: Beginning Ending Due Within Balance Additions Reductions Balance One Year Revenue bonds $ 19,605,000 $ - $ - $ 19,605,000 $ - Compensated absences 274,437 243,305 (235,355) 282,387 282,387 Total long -term liabilities $ 19,879,437 $ 243,305 23 $ 19,887,387 $ 282,387 The following is a summary of long -term debt activity for the year ended December 31, 2013: Beginning Ending Due Within Balance Additions Reductions Balance One Year Business -type activities: Revenue bonds $ 19,605,000 $ - $ - $ 19,605,000 $ - Compensated absences 261,797 213,465 (200,825) 274,437 274,437 Total long -term liabilities $ 19,866,797 $ 213,465 $ 2� 00,825) $ 19,879,437 $ 274,437 Revenue Bonds The Airport issues bonds to provide funds for various projects. The revenue bonds outstanding as of December 31, 2014 and 2013 are as follows: Interest Rate Airport, Series 2005A 5.15% Airport, Series 2005B 5.35% Airport, Series 2005C 5.45% Balance at December 31, 2014 $ 8,990,000 4,415,000 6,200,000 $ 19,605,000 Balance at December 31, 2013 $ 8,990,000 4,415,000 6,200,000 $ 19,605,000 FR NOTES TO FINANCIAL STATEMENTS NOTE 5. LONG -TERM DEBT (CONTINUED) Revenue Bonds (Continued) The Airport Passenger Facility Charge and General Revenue Bonds Series 2005A and 2005B are payable through 2035 primarily from Passenger Facility Charge No. 99- 01 -C -AGS approved by the Federal Aviation Administration in 2004. Should the proceeds of the Passenger Facility Charge not be sufficient to pay when due interest and principal on Series 2005A and 2005B bonds, the interest and principal shortfall will be paid from Airport Net General Revenues, derived by the 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 those passenger facility charge revenues that are allocable to the 2005 Project ( "PFC Revenues "). The Series 2005C Revenue Bonds are payable through 2031 solely from and secured by a first priority pledge and/or lien on Net General Revenues only. The Series 2005A bonds are payable in semi - annually interest only payments of 5.15% beginning July 1, 2005 and principal payable annually beginning January 2031 ranging from $540,000 to $2,275,000 through January 1, 2035. The Series 2005B bonds are payable in semi - annually interest only payments of 5.35% beginning July 1, 2005 and principal payable annually beginning January 2025 ranging from $130,000 to $1,505,000 through January 1, 2028. The Series 2005C bonds are payable in semi - annually interest only payments of 5.45% beginning July 1, 2005 and principal payable annually beginning January 2028 ranging from $1,315,000 to $1,760,000 through January 1, 2031. Pursuant to the Bond Resolution, the Augusta Regional Airport is subject to meeting certain financial covenants related to the Airport Revenue Bonds. The financial covenants include requirements to (i) 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) produce net general revenues, together with other available moneys, in each fiscal year which will (a) equal at least 125 percent of the debt service requirement on all general revenue bonds then outstanding for the sinking fund year ending on the next January 1 and at least 100 percent of the debt service or other amounts payable on all subordinate bonds and other airport obligations payable from net general revenues then outstanding for the year of computation, (b) enable the Aviation Commission to make all required payments, if any, into the debt service reserve account, the PFC debt service reserve account, the rebate fund, the renewal and replacement fund and on any contract or other airport obligation, (c) enable the aviation commission to accumulate an amount to be held in the capital improvement fund, which in the judgment of the Aviation Commission is adequate to meet the costs of major renewals, replacements, repairs, additions, betterments, and improvements to the Airport, necessary to keep the same in good operating condition or as is required by any governmental agency having jurisdiction over the Airport, and (d) remedy all deficiencies in required payments from the revenue fund from prior fiscal years. As of December 31, 2014 and 2013, the Airport was in compliance with all covenants. KA NOTES TO FINANCIAL STATEMENTS NOTE 6. NOTE 6. LONG -TERM DEBT (CONTINUED) Annual debt service requirements to maturity for the revenue bonds as of December 31, 2014 are as follows: Year ending December 31, 2015 2016 2017 2018 2019 2020-2024 2025-2029 2030-2034 PENSION PLANS 1945 Plan Plan Description Principal Interest Total $ - $ 1,037,088 $ 1,037,088 - 1,037,088 1,037,088 - 1,037,088 1,037,088 - 1,037,088 1,037,088 - 1,037,088 1,037,088 1,355,000 5,185,438 6,540,438 7,945,000 4,012,953 11,957,953 10, 305, 000 1,650,143 11, 955,143 $ 19,605,000 $ 16,033,974 $ 35,638,974 The 1945 Plan (the "1945 Plan "), a single- employer defined benefit pension plan, was available to all former Richmond County employees hired prior to October 1, 1975 that met the Plan's age and length of service requirements. Participants in the Plan who retired at or after age 60 are entitled to a monthly benefit equal to 2% of average earnings multiplied by years of service. The Plan provides death and disability benefits. These benefit provisions and all other requirements including amendments are established by Government ordinance. The Plan also provides for reduced benefits if the participant elects to retire after attaining age 50 and completing 15 years of service. This is a closed retirement plan (new employees may not participate in the Plan). The 1945 Plan does not issue a stand -alone financial statement report. Participant Data At January 1, 2014, the date of the most recent actuarial valuation, there were 27 participants as follows: Active participants 2 Retirees and beneficiaries 25 27 27 NOTES TO FINANCIAL STATEMENTS NOTE 6. PENSION PLANS (CONTINUED) 1945 Plan (Continued) As of the most recent valuation date, January 1, 2014, the funded status of the 1945 Plan was as follows: The required schedule of funding progress immediately following the notes to the financial statements presents multiyear trend information about whether the actuarial value of the 1945 Plan net position is increasing or decreasing over time relative to the actuarial accrued liability. Actuarial valuations involve estimates of the value of reported amounts and assumptions about the probability of events far into the future, and actuarially determined amounts are subject to continual revision as results are compared to past expectations and new estimates are made about the future. Actuarial calculations reflect long -term perspective. Calculations are based on the substantive plan in effect as of January 1, 2014. Funding Policy Employees are required to make contributions to the 1945 Plan equal to 5% of earnings. The Government is required to contribute the remaining amounts necessary to fund the 1945 Plan. If a participant terminates employment prior to completion of 10 years of credited service, the participant receives a lump -sum amount equal to his total contributions to the 1945 Plan, with 5% interest computed from January 1, 1997. After completion of at least 10 years of credited service, the participant receives a monthly benefit deferred to his normal retirement date, equal to the benefit computed as for normal retirement multiplied by the percentage based on completed years of credited service, as follows: 50% after 10 years, increasing 10% each year to 100% after 15 years of credited service. 28 Actuarial Actuarial Accrued Unfunded Actuarial Value of Liability (AAL) AAL Valuation Assets Entry Age (UAAL) Date (a) (b) (b-a) 12/31/2013 $ 6,423,808 $ 8,756,203 $ 2,332,395 The required schedule of funding progress immediately following the notes to the financial statements presents multiyear trend information about whether the actuarial value of the 1945 Plan net position is increasing or decreasing over time relative to the actuarial accrued liability. Actuarial valuations involve estimates of the value of reported amounts and assumptions about the probability of events far into the future, and actuarially determined amounts are subject to continual revision as results are compared to past expectations and new estimates are made about the future. Actuarial calculations reflect long -term perspective. Calculations are based on the substantive plan in effect as of January 1, 2014. Funding Policy Employees are required to make contributions to the 1945 Plan equal to 5% of earnings. The Government is required to contribute the remaining amounts necessary to fund the 1945 Plan. If a participant terminates employment prior to completion of 10 years of credited service, the participant receives a lump -sum amount equal to his total contributions to the 1945 Plan, with 5% interest computed from January 1, 1997. After completion of at least 10 years of credited service, the participant receives a monthly benefit deferred to his normal retirement date, equal to the benefit computed as for normal retirement multiplied by the percentage based on completed years of credited service, as follows: 50% after 10 years, increasing 10% each year to 100% after 15 years of credited service. 28 UAAL as a Percentage Funded Covered of Covered Ratio Payroll Payroll (a /b) (c) (b -ayc) 73.4 % $ 132,346 1,762.3 % The required schedule of funding progress immediately following the notes to the financial statements presents multiyear trend information about whether the actuarial value of the 1945 Plan net position is increasing or decreasing over time relative to the actuarial accrued liability. Actuarial valuations involve estimates of the value of reported amounts and assumptions about the probability of events far into the future, and actuarially determined amounts are subject to continual revision as results are compared to past expectations and new estimates are made about the future. Actuarial calculations reflect long -term perspective. Calculations are based on the substantive plan in effect as of January 1, 2014. Funding Policy Employees are required to make contributions to the 1945 Plan equal to 5% of earnings. The Government is required to contribute the remaining amounts necessary to fund the 1945 Plan. If a participant terminates employment prior to completion of 10 years of credited service, the participant receives a lump -sum amount equal to his total contributions to the 1945 Plan, with 5% interest computed from January 1, 1997. After completion of at least 10 years of credited service, the participant receives a monthly benefit deferred to his normal retirement date, equal to the benefit computed as for normal retirement multiplied by the percentage based on completed years of credited service, as follows: 50% after 10 years, increasing 10% each year to 100% after 15 years of credited service. 28 NOTES TO FINANCIAL STATEMENTS NOTE 6. PENSION PLANS (CONTINUED) 1945 Plan (Continued) Plan Disclosures Effective January 1, 2014, the Plan implemented the provisions of Governmental Accounting Standards Board (GASB) Statement No. 67, Financial Reporting for Pension Plans — an amendment of GASB Statement No. 25, which significantly changed the disclosures required related to the Plan. The information disclosed below is presented in accordance with this new standard. The Plan does not issue separate financial statements. Net Pension Liability The components of the net pension liability of the Government at December 31, 2014 were as follows: Total pension liability Plan fiduciary net position Government's net pension liability Plan fiduciary net position as a percentage of the total pension liability $ 8,450,282 6,675,015 $ 1,775,267 79.0% The required schedule of changes in the Government's net pension liability and related ratios immediately following the notes to the financial statements presents multiyear trend information about whether the value of plan assets is increasing or decreasing over time relative to the total pension liability. Actuarial assumptions. The total pension liability was determined by an actuarial valuation as of December 31, 2014. The following actuarial assumptions applied to all periods included in the measurement: Inflation 3.0% Salary increases, including inflation 5.5% Investment rate of return 8.0 %, including inflation Mortality rates were based upon the RP -2000 mortality table for healthy lives and the 1965 Railroad Board Ultimate mortality Table for disabled lives. W NOTES TO FINANCIAL STATEMENTS NOTE 6. PENSION PLANS (CONTINUED) 1945 Plan (Continued) Net Pension Liability (Continued) Discount rate. The discount rate used to measure the total pension liability was 8.0 %. The projection of cash flows used to determine the discount rate assumed that plan member contributions will be made at the current contribution rate and that Government contributions will be made at rates equal to the difference between actuarially determined contribution rates and the member rate. Based on those assumptions, the pension plan's fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long -term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability. Sensitivity of the net pension liability to changes in the discount rate. The following table presents the net pension liability of the Government, calculated using the discount rate of 8.0 %, as well as what the Government's net pension liability would be if it were calculated using a discount rate that is 1- percentage -point lower (7.0 %) or 1- percentage -point higher (9.0 %) than the current rate: 1% Decrease (7.0 %) Current Discount Rate (8.0 %) 1% Increase (9.0%) $ 2,409,514 $ 1,775,267 $ 1,219,691 Actuarial valuations involve estimates of the value of reported amounts and assumptions about the probability of events far into the future, and actuarially determined amounts are subject to continual revision as results are compared to past expectations and new estimates are made about the future. Actuarial calculations reflect a long -term perspective. Calculations are based on the substantive plan in effect as of December 31, 2014 and the current sharing pattern of costs between employer and employee. NOTES TO FINANCIAL STATEMENTS NOTE 6. PENSION PLANS (CONTINUED) 1945 Plan (Continued) Annual Pension Cost and Net Pension Obligation (Continued) The Government's annual pension cost and net pension obligation for the 1945 Plan for the current year is as follows: December 31, 2014 Derivation of Annual Pension Cost Annual Required Contribution $ 290,565 Interest on Net Pension Obligation (5,653) Amortization of Net Pension Obligation 5,964 Annual Pension Cost $ 290,876 Derivation of Net Pension Asset Annual Pension Cost $ 290,876 Actual Contributions to Plan 290,565 Decrease in Net Pension Asset 311 Net Pension Asset as of December 31, 2013 (70,660) Net Pension Asset as of December 31, 2014 $ (70,349) Basis of Valuation Current valuation date January 1, 2014 Annual return on invested Plan assets 8.00% Projected annual salary increases 5.00% Expected annual inflation 3.00% Actuarial value of assets Market Value Actuarial cost method Projected Unit Credit Amortization method Level Percent of Pay (Closed) Remaining amortization period Average future working lifetime Trend Information for The Plan Net Pension Fiscal Annual Actual Percentage Obligation Year Pension Government of APC (Asset) - Beginning Cost (APC) Contribution Contributed End of Year 1/1/2014 $ 290,876 $ 290,565 99.9 % $ (70,349) 1/1/2013 336,834 299,605 88.9 (70,660) 1/1/2012 257,798 291,502 113.1 (107,889) 31 NOTES TO FINANCIAL STATEMENTS NOTE 6. PENSION PLANS (CONTINUED) General Retirement Plan Description Former City of Augusta employees hired after March 1, 1949 and before March 1, 1987, whose age did not exceed 35 years at the time of their employment and are not participants of the 1977 Plan are covered under the General Retirement Plan, a single - employer defined benefit pension plan. Pension benefits vest after an employee is 45 years of age and has 15 years of full -time employment. An employee may retire at age 60 with 25 years of service and receive annual pension benefits equal to 2% of the employee's average salary earned during the last three years of employment, multiplied by the number of full -time years of employment. The Plan provides death and disability benefits. These benefit provisions and all other requirements including amendments are established by Government ordinance. All full -time employees hired before July 1, 1980 must contribute 8% of gross earnings and employees hired after July 1, 1980 must contribute 5% of gross earnings to the Plan, with the Government contributing remaining amounts sufficient to provide future pensions. This is a closed retirement plan (new employees may not participate in the Plan). The General Retirement Plan does not issue a stand -alone financial statement report. Participant Data At January 1, 2014, the date of the most recent actuarial valuation, there were 263 participants as follows: Active participants 71 Retirees and beneficiaries 182 Vested terminated 10 263 As of the most recent valuation date, January 1, 2014, the funded status of the General Retirement Plan was as follows: 12/31/2013 $ 64,261,414 $ 82,674,584 $ 18,413,170 77.7 % $ 2,906,852 633.4 % 32 Actuarial UAAL as a Actuarial Accrued Unfunded Percentage Actuarial Value of Liability (AAL) AAL Funded Covered of Covered Valuation Assets Entry Age (UAAL) Ratio Payroll Payroll Date (a) (b) (b-a) (alb) (b -a) /c) 12/31/2013 $ 64,261,414 $ 82,674,584 $ 18,413,170 77.7 % $ 2,906,852 633.4 % 32 NOTES TO FINANCIAL STATEMENTS NOTE 6. PENSION PLANS (CONTINUED) General Retirement (Continued) The required schedule of funding progress immediately following the notes to the financial statements presents multiyear trend information about whether the actuarial value of the General Retirement Plan position is increasing or decreasing over time relative to the actuarial accrued liability. Actuarial valuations involve estimates of the value of reported amounts and assumptions about the probability of events far into the future, and actuarially determined amounts are subject to continual revision as results are compared to past expectations and new estimates are made about the future. Actuarial calculations reflect long -term perspective. Calculations are based on the substantive plan in effect as of January 1, 2014. Funding Policy Employer contributions for 2014 are determined as part of the January 1, 2013 actuarial valuation using the frozen entry age cost method. The unfunded accrued liability is composed of pieces that are amortized over various periods to comply with Georgia law as a level percentage of payroll. When the actuarial value of assets exceeds 150% of the present value of accrued benefits, the Official Code of Georgia Annotated states that there is no minimum required contribution. The significant actuarial assumptions used to compute pension contribution requirements are the same as those used to determine the standard measure of the pension obligation. Plan Disclosures Effective December 31, 2014, the Plan implemented the provisions of Governmental Accounting Standards Board (GASB) Statement No. 67, Financial Reporting for Pension Plans — an amendment of GASB Statement No. 25, which significantly changed the disclosures required related to the Plan. The information disclosed below is presented in accordance with this new standard. The Plan does not issue separate financial statements. Net Pension Liability The components of the net pension liability of the Government at December 31, 2014 were as follows: Total pension liability Plan fiduciary net position Government's net pension liability Plan fiduciary net position as a percentage of the total pension liability $ 90,981,240 71, 328, 822 $ 19,652,418 78.4% 33 NOTES TO FINANCIAL STATEMENTS General Retirement (Continued) Net Pension Liability (Continued) The required schedule of changes in the Government's net pension liability and related ratios immediately following the notes to the financial statements presents multiyear trend information about whether the value of plan assets is increasing or decreasing over time relative to the total pension liability. Actuarial assumptions. The total pension liability was determined by an actuarial valuation as of December 31, 2014. The following actuarial assumptions applied to all periods included in the measurement: Inflation 3.0% Salary increases, including inflation 5.5% Investment rate of return 8.0 %, including inflation Mortality rates were based upon the RP -2000 mortality table for healthy lives and the 1965 Railroad Board Ultimate mortality Table for disabled lives. Discount rate. The discount rate used to measure the total pension liability was 8.0 %. The projection of cash flows used to determine the discount rate assumed that plan member contributions will be made at the current contribution rate and that Government contributions will be made at rates equal to the difference between actuarially determined contribution rates and the member rate. Based on those assumptions, the pension plan's fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long -term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability. Sensitivity of the net pension liability to changes in the discount rate. The following table presents the net pension liability of the Government, calculated using the discount rate of 8.0 %, as well as what the Government's net pension liability would be if it were calculated using a discount rate that is 1- percentage -point lower (7.0 %) or 1- percentage -point higher (9.0 %) than the current rate: 1% Decrease (7.0 %) Current Discount Rate (8.0 %) 1% Increase (9.0 %) $ 28,451,521 $ 19,652,418 $ 12,871,735 cm NOTES TO FINANCIAL STATEMENTS NOTE 6. PENSION PLANS (CONTINUED) General Retirement (Continued) Net Pension Liability (Continued) Actuarial valuations involve estimates of the value of reported amounts and assumptions about the probability of events far into the future, and actuarially determined amounts are subject to continual revision as results are compared to past expectations and new estimates are made about the future. Actuarial calculations reflect a long -term perspective. Calculations are based on the substantive plan in effect as of December 31, 2014 and the current sharing pattern of costs between employer and employee. Annual Pension Cost and Net Pension Obligation The Government's annual pension cost and net pension obligation for the General Retirement Plan for the current year are as follows: Derivation of Annual Pension Cost Annual Required Contribution Interest on Net Pension Obligation Adjustment on annual required contribution Annual Pension Cost Derivation of Net Pension Obligation Annual Pension Cost Actual Contributions to Plan Decrease in Net Pension Obligation Net Pension Obligation as of December 31, 2013 Net Pension Obligation as of December 31, 2014 December 31, 2014 $ 2,256,722 11,095 (11,704) $ 2,256,113 $ 2,256,113 2,256,722 (609) 138,690 $ 138,081 35 NOTES TO FINANCIAL STATEMENTS NOTE 6. PENSION PLANS (CONTINUED) General Retirement (Continued) Basis of Valuation Current valuation date Annual return on invested Plan assets Projected annual salary increases Expected annual inflation Actuarial value of assets Actuarial cost method Amortization method Remaining amortization period January 1, 2014 8.00% 5.5% 3.00% Market Value Projected Unit Credit Level Percent of Pay (Closed) Various periods to comply with state law Trend Infonnation for The Plan 1/1/2014 $ 2,256,113 $ 2,256,722 100.0 % $ 138,081 1/1/2013 2,482,959 1,924,332 77.5 138,690 1/1/2012 2,310,827 2,826,791 122.3 (419,937) Georaia Municipal Employees Benefit System Plan Description Employees from the City of Augusta hired after March 1, 1987 and before consolidation on December 31, 1996, and who were not participants in any other employer- sponsored retirement plan, and Augusta Canal Authority employees are covered under the Georgia Municipal Employees Benefit System ( GMEBS), a multiple - employer defined benefit pension plan. The GMEBS Plan provides pension benefits, deferred allowances, and death and disability benefits. In 2008, this plan was reopened to participants of the 1998 Defined Contribution Plan who opted to convert to the GMEBS Plan. Participation in this plan is mandatory for all new employees. These benefit provisions and all other requirements including amendments are established by Government ordinance. A participant may retire after reaching the age of 65 if the participant is not classified as public safety personnel; participating public safety personnel may retire at age 65 or age 55 with 25 years of total credited service, whichever is earlier. Early retirement may be taken at age 55 with 10 years of credited service. Benefits vest after 10 years of service. Employees who retire at or after age 55 with 10 or more years of service are entitled to pension payments for the remainder of their lives equal to 1 '1% of their final five -year average salary times the number of years of which they were employed as a participant in the GMEBS. Net Pension Fiscal Annual Actual Percentage Obligation Year Pension Govemment of APC (Asset) - Beginning Cost (APC) Contribution Contributed End of Year 1/1/2014 $ 2,256,113 $ 2,256,722 100.0 % $ 138,081 1/1/2013 2,482,959 1,924,332 77.5 138,690 1/1/2012 2,310,827 2,826,791 122.3 (419,937) Georaia Municipal Employees Benefit System Plan Description Employees from the City of Augusta hired after March 1, 1987 and before consolidation on December 31, 1996, and who were not participants in any other employer- sponsored retirement plan, and Augusta Canal Authority employees are covered under the Georgia Municipal Employees Benefit System ( GMEBS), a multiple - employer defined benefit pension plan. The GMEBS Plan provides pension benefits, deferred allowances, and death and disability benefits. In 2008, this plan was reopened to participants of the 1998 Defined Contribution Plan who opted to convert to the GMEBS Plan. Participation in this plan is mandatory for all new employees. These benefit provisions and all other requirements including amendments are established by Government ordinance. A participant may retire after reaching the age of 65 if the participant is not classified as public safety personnel; participating public safety personnel may retire at age 65 or age 55 with 25 years of total credited service, whichever is earlier. Early retirement may be taken at age 55 with 10 years of credited service. Benefits vest after 10 years of service. Employees who retire at or after age 55 with 10 or more years of service are entitled to pension payments for the remainder of their lives equal to 1 '1% of their final five -year average salary times the number of years of which they were employed as a participant in the GMEBS. NOTES TO FINANCIAL STATEMENTS NOTE 6. PENSION PLANS (CONTINUED) Georgia Municipal Employees Benefit System (Continued) The final five -year average salary is the average salary of the employee during the final five years of full -time employment. Pension provisions include deferred allowances, whereby an employee may terminate his or her employment with the Government after accumulating 10 years of service but before reaching the age of 55. If the employee does not withdraw his or her accumulated contributions, the employee is entitled to all pension benefits upon reaching the age of 55. Employees must contribute 4.0% of their gross earnings to the Plan. In addition, the Government must provide annual contributions sufficient to satisfy the actuarially determined contribution requirements as amended by GMEBS. The GMEBS Retirement Fund issues a publicly available financial report that includes financial statements and required supplementary information. That report may be obtained by writing to Georgia Municipal Employees Benefit System, 201 Pryor Street, SW, Atlanta, Georgia 30303. Participant Data At July 1, 2014, the date of the most recent actuarial valuation, there were 2,687 participants as follows: Active participants 2,141 Retirees and beneficiaries 448 Vested terminated 98 2,687 Funding Policy The employer contributions for 2014 are determined as part of a July 1, 2013 actuarial valuation using the projected unit credit actuarial cost method. The actuarial value of plan assets are computed with a smoothing method that uses a roll forward of prior year's actuarial value with contributions, disbursements, and expended return of investments, plus 10% of investment gains (losses) during 10 prior years. Normal cost is funded on a current basis. The Plan is subject to the minimum funding standards of the Public Retirement Systems Standards Law. Since the Government's policy is to contribute the pension expense in each year, the funding strategy should provide sufficient resources to pay employee pension benefits on a timely basis. The significant actuarial assumptions used to compute pension contribution requirements are the same as those used to determine the standardized measure of the pension obligation. The plan's unfunded actuarial accrued liability is being amortized over 30 years as a level dollar. 37 NOTES TO FINANCIAL STATEMENTS NOTE 6. PENSION PLANS (CONTINUED) Georala Municipal Emialoyees Benefit System tContinuedl Annual Pension Cost The Government's annual pension cost and net pension obligation for the GMEBS Plan for the current year are as follows: Basis of Valuation Current valuation date Trend Information for The Plan Fiscal Annual Actual Percentage Net Pension Year Pension Government of APC Obligation - Beginning Cost (APC) Contribution Contributed Beginning of Year 1/1/2014 $ 5,297,640 $ 5,297,640 100.0 % $ 1/1/2013 5,170,685 5,170,685 100.0 - 1/1/2012 5,082,322 5,082,322 100.0 - Basis of Valuation Current valuation date July 1, 2014 Actuarial cost method Projected Unit Credit Amortization method Closed level dollar for remaining unfunded liability Remaining amortization period Varies for the bases, with net effective amortization period of 14 years Actuarial asset valuation method Sum of actuarial value at beginning of year and the cash flow during the year plus the assumed investment return, adjusted by 10% of the amount that the value exceeds or is less than the market value at end of year. The actuarial value is adjusted, if necessary, to be within 44% of market value for 2010, 38% of market value for 2011, 32% of market value for 2012, 26% of market value for 2013, and 20% of market value for 2014 and later years. Actuarial assumptions: Investment rate of return 7.75% Projected salary increases 3.50% Post retirement benefit increases None Inflation 3.50% 38 NOTES TO FINANCIAL STATEMENTS NOTE 6. PENSION PLANS (CONTINUED) Georgia Municipal Employees Benefit System (Continued) Plan Funded Status As of the most recent valuation date, July 1, 2014, the funded status of the Plan was as follows: The required schedule of funding progress immediately following the notes to the financial statements presents multiyear trend information about whether the actuarial value of plan net position is increasing or decreasing over time relative to the actuarial accrued liability. Actuarial valuations involve estimates of the value of reported amounts and assumptions about the probability of events far into the future, and actuarially determined amounts are subject to continual revision as results are compared to past expectations and new estimates are made about the future. Actuarial calculations reflect long -term perspective. Calculations are based on the substantive plan in effect as of July 1, 2014. Policemen's Pension Plan, Firemen's Pension Plan and the City Employees' Pension Plan These Plans covered former City of Augusta employees. Policemen and firemen hired before 1945 are covered under the General Pension Plan. Policemen hired between 1945 and 1949 are covered under the Policemen's Pension Plan. Firemen hired between 1945 and 1949 are covered under the Firemen's Pension Plan. Other former City of Augusta employees hired between 1945 and 1949 are covered by the City Employees' Pension Plan. Pension benefits are being paid under these Plans to retired employees and beneficiaries. These are closed retirement plans (new employees may not participate in the plans). During the year ended December 31, 2014, the Policemen's Pension Plan has one participant with Government contributions of $27,256; the Firemen's Pension Plan has two participants with Government contributions of $38,319; and the City Employees' Pension Plan has six participants with Government contributions of $196,675. These plans do not issue stand -alone financial statement reports. 39 Actuarial UAAL as a Actuarial Accrued Unfunded Percentage Actuarial Value of Liability (AAL) AAL Funded Covered of Covered Valuation Assets Entry Age (UAAL) Ratio Payroll Payroll D ate (a) (b) ( b -a) (alb) (c) (b -a)lc) 7!1!2014 $ 99,509,643 $ 119,742,080 $ 20,232,437 83.1 % $ 82,687,047 24.5 % The required schedule of funding progress immediately following the notes to the financial statements presents multiyear trend information about whether the actuarial value of plan net position is increasing or decreasing over time relative to the actuarial accrued liability. Actuarial valuations involve estimates of the value of reported amounts and assumptions about the probability of events far into the future, and actuarially determined amounts are subject to continual revision as results are compared to past expectations and new estimates are made about the future. Actuarial calculations reflect long -term perspective. Calculations are based on the substantive plan in effect as of July 1, 2014. Policemen's Pension Plan, Firemen's Pension Plan and the City Employees' Pension Plan These Plans covered former City of Augusta employees. Policemen and firemen hired before 1945 are covered under the General Pension Plan. Policemen hired between 1945 and 1949 are covered under the Policemen's Pension Plan. Firemen hired between 1945 and 1949 are covered under the Firemen's Pension Plan. Other former City of Augusta employees hired between 1945 and 1949 are covered by the City Employees' Pension Plan. Pension benefits are being paid under these Plans to retired employees and beneficiaries. These are closed retirement plans (new employees may not participate in the plans). During the year ended December 31, 2014, the Policemen's Pension Plan has one participant with Government contributions of $27,256; the Firemen's Pension Plan has two participants with Government contributions of $38,319; and the City Employees' Pension Plan has six participants with Government contributions of $196,675. These plans do not issue stand -alone financial statement reports. 39 NOTES TO FINANCIAL STATEMENTS NOTE 6. NOTE 7. PENSION PLANS (CONTINUED) Retirement Savings Plan (the "1998 Plan ") All full -time employees with more than one month of service and Canal Authority employees were eligible to participate in the Retirement Savings Plan. The 1998 Plan is a defined contribution plan under Section 401(a) of the Internal Revenue Code, and is administered by Nationwide Life Insurance, PPA support. The Plan was organized and may be amended by a majority vote of the full -body of the governing board, the Augusta- Richmond County Commission. Employees contribute four percent (4 %) of their salary, and the Government contributes two percent (2 %) of the employee's salary. Contribution requirements may be amended by a majority vote of the full -body of the governing board, the Augusta- Richmond County Commission. At December 31, 2014, there were 164 plan participants. Participants are considered fully vested in the Government's contributions after completing five (5) years of service. For the year ended December 31, 2014, the employees' contributions were $296,222, and the Government's contributions were $148,112. This is a closed retirement plan (new employees may not participate in the Plan). OTHER POSTEMPLOYMENT BENEFITS Plan Description The Government maintains the Augusta- Richmond County Other Post - Employment Benefit Plan (the "OPEB Plan "), a single employer post - employment defined benefit plan. The OPEB plan provides medical and death benefits to eligible retirees and their spouses. Separate publicly available financial statements are not issued for the OPEB Plan. Funding Policy The Government intends to continue to fund the OPEB Plan on a pay -as- you -go basis. The OPEB Plan is fully funded by the Government and plan members are not required to contribute. Contribution requirements may be amended by a majority vote of the full -body of the Augusta - Richmond County Commission. Participant Data At December 31, 2013, the date of the most recent actuarial valuation, there were 2,363 participants as follows: Active employees Retired participants receiving benefits Total membership 1,807 556 2,363 NOTES TO FINANCIAL STATEMENTS NOTE 7. OTHER POSTEMPLOYMENT BENEFITS (CONTINUED) Annual OPEB Cost and Net OPEB Obligation The Government contributed $3,274,460 to the OPEB Plan for the year ended December 31, 2014. The Government's annual other post- retirement benefit (OPEB) cost (expense) is calculated based on the annual required contribution of the employer (ARC), an amount actuarially determined in accordance with the parameters of GASB Statement 45. The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover normal cost each year and amortize any unfunded actuarial liabilities (or funding excess) over a period not to exceed 30 years. The Government's annual pension cost and net OPEB obligation for the OPEB Plan for the current year are as follows: nual required employer contribution Interest on net OPEB obligation Adjustment to annual required contribution nual OPEB cost iployer contributions made or accrued Increase in net OPEB obligation t OPEB obligation beginning of year t OPEB obligation end of year Trend Information Fiscal Year Annual OPEB Ending Cost (APC) Percentage of APC Contributed December 31, 2014 $ 7,938,396 1,626,258 (2,034,460) 7,530,194 3,274,460 4,255,734 33,973,494 $ 38,229,228 Net OPEB Obligation 41 12/31/2014 $ 7,530,194 43.5 % $ 38,229,228 12/31/2013 7,530,193 41.5 33,973,493 12/31/2012 7,593,837 39.3 29,568,318 12/31/2011 7,908,059 31.9 24,957,840 12/31/2010 7,537,598 30.8 19,569,950 As of January 1, 2013, the most recent valuation date, the funded status of the OPEB Plan is as follows: Actuarial UAAL as a Actuarial Accrued Unfunded Percentage Actuarial Value of Liability (AAL) AAL Funded Covered of Covered Valuation Assets Entry Age (UAAL) Ratio Payroll Payroll Date (a) (b) (ba) (a /b) (c) (ba) /c) 1/1/2013 $ - $ 95,489,631 $ 95,489,631 - % $ N/A N/A 41 NOTES TO FINANCIAL STATEMENTS NOTE 7. NOTE 8. OTHER POSTEMPLOYMENT BENEFITS (CONTINUED) Trend Information (Continued) The required schedule of funding progress immediately following the notes to the financial statements presents multiyear trend information about whether the actuarial value of plan net assets is increasing or decreasing over time relative to the actuarial accrued liability. Actuarial valuations involve estimates of the value of reported amounts and assumptions about the probability of events far into the future, and actuarially determined amounts are subject to continual revision as results are compared to past expectations and new estimates are made about the future. Actuarial calculations reflect long -term perspective. Calculations are based on the substantive plan in effect as of January 1, 2013. Actuarial Assumptions The assumptions used in the January 1, 2013 actuarial valuation are as follows: Valuation date Actuarial cost method Amortization method Amortization period Asset valuation method Actuarial assumptions: Discount rate Annual health care cost trend rate January 1, 2013 Projected Unit Credit Level Percent of Pay (open) 30 years Market Value 5.50% 8.00% initially, reduced by decrements to an ultimate rate of 5.00% after three years RISK MANAGEMENT The Government, including the Airport, is exposed to various risks of loss related to torts; theft of, damage to and destruction of assets; errors and omissions; and natural disasters. The Government purchases commercial insurance to cover employee life, health, property and liability, and disability insurance programs, each of which is covered by the Airport. There were no significant reductions of insurance coverage compared to the prior year. Settled claims in the past three years have not exceeded the coverages. The Government records an estimated liability for indemnity workers' compensation claims against the Government; however, the liability is not allocated to enterprise funds. Claim liabilities are based on estimates of the ultimate cost of reported claims (including future claim adjustment expenses). Claims liabilities include specific, incremental claim adjustment expenses and allocated loss adjustment expenses. Because all workers' compensation claims are expected to be settled within one year, the related unpaid claims liability is not discounted and the entire liability is classified as current. Activity is accounted for in the General Fund of the Government. 42 REQUIRED SUPPLEMENTARY INFORMATION General Retirement (1949 Plan) DEFINED BENEFIT RETIREMENT PLANS UAAL as a SCHEDULES OF FUNDING PROGRESS Actuarial Accrued Unfunded 1945 Plan Actuarial Value of Liability (AAL) AAL Funded Actuarial of Covered Valuation Assets UAAL as a (UAAL) Actuarial Accrued Unfunded Date (a) Percentage Actuarial Value of Liability (AAL) AAL Funded Covered of Covered Valuation Assets Entry Age (UAAL) Ratio Payroll Payroll Date (a) (b) (b-a) (alb) (c) (b -a) /c) 12/31/2013 $ 6,423,808 $ 8,756,203 $ 2,332,395 73.4 % $ 132,346 1,762.3 % 12/31/2012 6,403,803 9,209,859 2,806,056 69.5 131,602 2,132.2 12/3112011 7,152,239 9,398,563 2,246,324 76.1 125,222 1,793.9 12/31/2010 7,860,568 11,366,929 3,506,361 69.2 125,359 2,797.1 12/31/2009 8,127,448 11,403,336 3,275,888 71.3 244,941 1,337.4 12/31/2008 9,839,493 11,083,498 1,244,005 88.8 252,660 492.4 General Retirement (1949 Plan) KjJ -R Actuarial UAAL as a Actuarial Accrued Unfunded Percentage Actuarial Value of Liability (AAL) AAL Funded Covered of Covered Valuation Assets Entry Age (UAAL) Ratio Payroll Payroll Date (a) (b) (b-a) a( /b) (c) b-a) /c 7/112014 $ 99,509,643 $ 119,742,080 12/31/2013 $ 64,261,414 $ 82,674,584 $ 18,413,170 77.7 % $ 2,906,852 633.4 % 12/31/2012 61,776,481 81,888,596 20,112,115 75.4 2,877,191 699.0 12/31/2011 64,785,966 83,583,477 18,797,511 77.5 3,152,905 596.2 12/31/2010 68,221,054 79,243,698 11,022,644 86.1 4,707,547 234.1 12/31/2009 65,807,023 74,884,813 9,077,790 87.9 5,775,104 157.2 12/31/2008 74,862,875 70,398,531 (4,464,344) 106.3 6,416,602 (69.6) KjJ -R 43 Actuarial UAAL as a Actuarial Accrued Unfunded Percentage Actuarial Value of Liability (AAL) AAL Funded Covered of Covered Valuation Assets Entry Age (UAAL) Ratio Payroll Payroll Date (a) (b) (b-a) (a /b) (c) (b -a) /c) 7/112014 $ 99,509,643 $ 119,742,080 $ 20,232,437 83.1 % $ 82,687,047 24.5 % 7/1/2013 87,884,346 110,942,833 23,058,487 79.2 79,574,939 29.0 7/1/2012 76,659,093 99,440,605 22,781,512 77.1 73,908,657 30.8 7/1/2011 67,421,898 90,451,936 23,030,038 74.5 73,830,249 31.2 7/1/2010 60,004,921 82,560,251 22,555,330 72.7 73,248,453 30.8 43 REQUIRED SUPPLEMENTARY INFORMATION OTHER POST - EMPLOYMENT BENEFIT PLAN SCHEDULE OF FUNDING PROGRESS The assumptions used in the preparation of the above schedules are disclosed in Notes 6 and 7 to the financial statements. 44 Actuarial UAAL as a Actuarial Accrued Unfunded Percentage Actuarial Value of Liability (AAL) AAL Funded Covered of Covered Valuation Assets Entry Age (UAAL) Ratio Payroll Payroll Date (a) (b) (b-a) (a /b) (c) (b -a) /c) 1/1/2013 $ - $ 95,489,631 $ 95,489,631 - % $ N/A N/A 1/1/2012 - 95,489,631 95,489,631 - N/A N/A 1/1/2011 - 91,479,290 91,479,290 - N/A N/A The assumptions used in the preparation of the above schedules are disclosed in Notes 6 and 7 to the financial statements. 44 AUGUSTA REGIONAL AIRPORT AT BUSH FIELD AUGUSTA, GEORGIA REQUIRED SUPPLEMENTARY INFORMATION 1945 PLAN SCHEDULE OF CHANGES IN THE GOVERNMENT'S NET PENSION LIABILITY AND RELATED RATIOS FOR THE YEAR DECEMBER 31, 2014 2014 Total pension liability Service cost $ 3,063 Interest on total pension liability 691,885 Benefit payments, including refunds of employee contributions (890,165) Net change in total pension liability (195,217) Total pension liability - beginning 8,645,499 Total pension liability - ending (a) $ 8,450,282 Plan fiduciary net position Contributions - employer $ 299,600 Contributions - employee 6,661 Net investment income 521,224 Benefit payments, including refunds of member contributions (855,928) Net change in plan fiduciary net position (28,443) Plan fiduciary net position - beginning 6,703,458 Plan fiduciary net position - ending (b) $ 6,675,015 Government's net pension liability - ending (a) - (b) $ 1,775,267 Plan fiduciary net position as a percentage of the total pension liability 79.0% Covered - employee payroll $ 132,346 Net pension liability as a percentage of covered - employee payroll 1341.4% Notes to the Schedule: The schedule will present 10 years of information once it is accumulated. 45 AUGUSTA REGIONAL AIRPORT AT BUSH FIELD AUGUSTA, GEORGIA REQUIRED SUPPLEMENTARY INFORMATION GENERAL RETIREMENT PLAN SCHEDULE OF CHANGES IN THE GOVERNMENT'S NET PENSION LIABILITY AND RELATED RATIOS FOR THE YEAR ENDED DECEMBER 31, 2014 2014 Total pension liability Service cost $ 196,121 Interest on total pension liability 7,212,710 Benefit payments, including refunds of employee contributions (6,390,348) Net change in total pension liability 1,018,483 Total pension liability - beginning 89,962,757 Total pension liability - ending (a) $ 90,981,240 Plan fiduciary net position Contributions - employer $ 2,256,722 Contributions - employee 185,458 Net investment income 4,737,674 Benefit payments, including refunds of member contributions (6,144,565) Net change in plan fiduciary net position 1,035,289 Plan fiduciary net position - beginning 70,293,533 Plan fiduciary net position - ending (b) $ 71,328,822 Government's net pension liability - ending (a) - (b) $ 19,652,418 Plan fiduciary net position as a percentage of the total pension liability 78.4% Covered - employee payroll $ 2,906,852 Net pension liability as a percentage of covered - employee payroll 676.1% Notes to the Schedule: The schedule will present 10 years of information once it is accumulated. M AUGUSTA REGIONAL AIRPORT AT BUSH FIELD AUGUSTA, GEORGIA REQUIRED SUPPLEMENTARY INFORMATION 1945 PLAN SCHEDULE OF GOVERNMENT CONTRIBUTIONS FOR THE YEAR ENDED DECEMBER 31, 2014 Actuarially determined contribution Contributions in relation to the actuarially determined contribution Contribution deficiency (excess) Covered employee payroll Contributions as a percentage of covered-employee payroll Notes to the Schedule: (1) Actuarial Assumptions Valuation Date Cost Method Actuarial Asset Valuation Method Assumed Rate of Return on Investments Projected Salary Increases Cost-of-living Adjustment Amortization Method Remaining Amortization Period December 31, 2014 Entry Age Normal Market Value 8.00% 5.50% 3.00% Level dollar for unfunded liability 30 years (open) (2) The schedule will present 10 years of information once it is accumulated. 2014 $ 299,600 299,600 $ 132,346 226.38% 47 AUGUSTA REGIONAL AIRPORT AT BUSH FIELD AUGUSTA, GEORGIA REQUIRED SUPPLEMENTARY INFORMATION GENERAL RETIREMENT PLAN SCHEDULE OF GOVERNMENT CONTRIBUTIONS FOR THE YEAR ENDED DECEMBER 31, 2014 Actuarially determined contribution Contributions in relation to the actuarially determined contribution Contribution deficiency (excess) Covered employee payroll Contributions as a percentage of covered- employee payroll Notes to the Schedule: (1) Actuarial Assumptions Valuation Date Cost Method Actuarial Asset Valuation Method Assumed Rate of Return on Investments Projected Salary Increases Cost -of- living Adjustment Amortization Method Remaining Amortization Period December 31, 2014 Entry Age Normal Market Value 8.00% 5.50% 3.00% Level dollar for unfunded liability 30 years (open) (2) The schedule will present 10 years of information once it is accumulated. 2014 $ 2,256,722 2,256,722 $ 2,906,852 77.63% 48 AUGUSTA REGIONAL AIRPORT AT BUSH FIELD AUGUSTA, GEORGIA REQUIRED SUPPLEMENTARY INFORMATION 1945 PLAN SCHEDULE OF PENSION INVESTMENT RETURNS FOR THE YEAR ENDED DECEMBER 31, 2014 Annual money- weighted rate of return, net of investment expenses for the Government's Pension Plan Notes to the Schedule: The schedule will present 10 years of information once it is accumulated. 2014 7.0% 49 AUGUSTA REGIONAL AIRPORT AT BUSH FIELD AUGUSTA, GEORGIA REQUIRED SUPPLEMENTARY INFORMATION GENERAL RETIREMENT PLAN SCHEDULE OF PENSION INVESTMENT RETURNS FOR THE YEAR ENDED DECEMBER 31, 2014 Annual money- weighted rate of return, net of investment expenses for the Government's Pension Plan Notes to the Schedule: The schedule will present 10 years of information once it is accumulated. 2014 8.2% 50 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 (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] This page intentionally left blank. APPENDIX B SUMMARY OF THE BOND RESOLUTION Definitions "Additional Bonds" means General Revenue Bonds, other than the Series 2015 Bonds, issued pursuant to the provisions of the Master Bond Resolution described under the caption "Additional Bonds." 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 under the caption "Special Purpose Revenue Bonds; Additional Released Revenue Bonds; PFC Stand -Alone Bonds and Other Airport Obligations ". "Additional Released Revenue Bonds" means those Released Revenue Bonds issued after the first issuance of a series of Released Revenue Bonds, as described under the caption "Special Purpose Revenue Bonds; Additional Released Revenue Bonds; PFC Stand -Alone Bonds and Other Airport Obligations ". "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 under the caption "Special Purpose Revenue Bonds; Additional Released Revenue Bonds; PFC Stand -Alone Bonds and Other Airport Obligations ". "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 the Bond Resolution 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. "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. "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 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. "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 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 designated as Bond Registrar for the Series 2015 Bonds. "Bond Resolution" means the Master Bond Resolution as it may from time to time be modified, supplemented, or amended by Supplemental Resolutions. B -2 "Bond Year" means the 12 -month period ending on January 1 of each year. "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. "Capital Appreciation Bonds" means Bonds that bear interest which is calculated based on periodic compounding, payable only at maturity or earlier redemption. 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. "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. "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 in connection with the securitization of Released Revenues as described in the last paragraph under the caption "Released Revenues and Securitizations ". "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; (H) 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; B -3 (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" does not include a Reserve Account Credit Facility. "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" does 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" does not include any Reserve Account Credit Facility Provider. Whenever in the Bond Resolution the consent of the Credit Issuer is required, such consent will 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 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 includes (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 are 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 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 are 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 is 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 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. "Event of Default" means any of the events defined as such under the caption "Events of Default and Remedies." "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, 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 will 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 B -5 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 the 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 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 of the Master Bond Resolution. "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 M 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 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 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 the Bond Resolution. "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 the Master Bond Resolution as adopted by the Augusta Aviation Commission and by the Governing Body on , 2015. "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. " 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. "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) of the Master Bond Resolution. "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" may 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 the Bond Resolution, and (c) Bonds for the payment of which provision has been made in accordance with the provisions of the Master Bond Resolution described under the caption "Defeasance ". 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" with the other Bonds with respect to the category of Revenues on which they have liens of equal rank. "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 will perform the duties required of the Paying Agent in the Bond Resolution. U.S. Bank National Association is designated as Bond Registrar for the Series 2015 Bonds. "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 the 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 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. B -8 "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 in the Master Bond Resolution or in any Supplemental Resolution resulting 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 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 the 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" means; (1) All right, title and interest of the Consolidated Government in and to all Revenues 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; (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 the 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 described in the Master Bond Resolution are pledged to and secure only those Bonds or Contracts that are specifically designated as being so secured by the Master Bond Resolution or in the Supplemental Resolution authorizing same. 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. "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 M 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. "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. "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 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 the provisions of the Master Bond Resolution described under the caption "Released Revenues and Securitizations," 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 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. 1 1I /] "Revenues" means General Revenues, PFC Revenues, Special Purpose Revenues and Released Revenues. "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 as described in the last paragraph under the caption "Additional Bonds" and under the caption "Accession of Subordinate Lien Bonds and Related Contracts to Senior Status ". 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. "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 the Master Bond Resolution. "Series 2015B Bonds" means the Augusta, Georgia Airport General Revenue Refunding Bonds, Series 201513 (AMT) in the aggregate principal amount of $ authorized to be issued under the Master Bond Resolution. "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 and described in the Official Statement under the first paragraph of the section entitled "SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2015 BONDS - Rate Covenant ". "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. "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 the Master Bond Resolution as described in the last paragraph under the caption "Subordinate Lien Bonds ". "Supplemental Bond Resolution" means a bond resolution of the Consolidated Government supplemental to the 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 will 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 the 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. "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. Debt Service Fund and Debt Service Reserve Fund Debt Service Fund. The Debt Service Fund is comprised of the Interest Account, the Contracts Payments Account and the Principal Account. The accounts function as follows: 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 is required to 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 may 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 will be satisfied with respect to such Bonds if the installment paid into the related subaccount of the Interest Account in each month is sufficient to accumulate for such Bonds an amount equal to 116th 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 may 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 must also deposit and continue to deposit any payments from a Credit Issuer under a Credit Facility Agreement in the related subaccount of the Interest Account from time to time as and when received. 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 is required to 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. B -12 Principal Account. Unless otherwise provided in a Supplemental Bond Resolution, on or before the last day of each month, there is required to 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 may 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 may 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. Additional Provisions Relating to Interest and Principal Subaccounts. No further payments are required to 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 may 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 part of such Bonds on the next succeeding redemption date for which the required notice of redemption may be given. Debt Service Reserve Fund. The Debt Service Reserve Requirement for the Series 2015 Bonds and Additional Bonds will be funded as described in the Official Statement under the heading "SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2015 BONDS — Funds Created by the Bond Resolution and Flow of Funds — Debt Service Fund and Debt Service Reserve Fund " Whenever, on the date that 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 must 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 to the Operation and Maintenance Fund, Operation and Maintenance Reserve Fund, and Debt Service Fund have been made. 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 may 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 must have a term of at least one (1) year (or, if less, the remaining term of the related series of Bonds) and must 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 must permit a drawing 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 B -13 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, must 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, must 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, must 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, must 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 may 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 must 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 will 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 will 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. Investments 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) will be retained therein. Investment Earnings from the investment of moneys in each subaccount of the Debt Service Reserve Fund will 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 will 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 will 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. B -14 Additional Bonds Upon satisfaction of certain conditions, the Master Bond Resolution permits the Consolidated Government to issue Additional Bonds without express limit as to principal amount to finance capital improvements to or expansions of the Airport (or to refinance obligations issued for such purposes), which will be equally and ratably secured on a parity basis with the Series 2015 Bonds. The Master Bond Resolution allows Bonds issued to refund General Revenue Bonds to be secured on a parity with any General Revenue Bonds if (a) the Consolidated Government obtains a certificate from the Airport Finance Officer, demonstrating that the refunding will either (x) reduce the total debt service payments on the Outstanding General Revenue Bonds, including on related Contracts, which are secured on a parity with the General Revenue Bonds to be refunded, on a present value basis or (y) 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 (b) the requirements of paragraphs (2), (5), (6) and (7) are met with respect to the refunding General Revenue Bonds. The Master Bond Resolution also allows Additional Bonds (including refunding General Revenue Bonds which do not meet the requirements of the preceding paragraph) to be issued on a parity with Outstanding General Revenue Bonds upon satisfaction of the following conditions: (1) There is 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 (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 in paragraph (a) above 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) 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. (3) 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 the Bond Resolution. B -15 (4) 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 the Bond Resolution relating to the issuance of refunding Bonds described in the first paragraph under this caption), and to pay expenses incidental thereto and to the issuance of the proposed Additional Bonds. (5) The Airport Director and the Airport Finance Officer certifies, 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. (6) The Consolidated Government receives 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. (7) If the Additional Bonds would bear interest at a Variable Rate, the Supplemental Bond Resolution under which such Additional Bonds are issued must provide a maximum rate of interest per annum that such Additional Bonds may bear. 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) through (7) are satisfied treating such obligations as Additional Bonds and the issuance and security documents therefor as Supplemental Bond Resolutions. The Augusta Aviation Commission is required to notify the Rating Agencies of its intent to so secure Other Airport Obligations. Subordinate Lien Bonds Subordinate Lien Bonds may be issued with a Subordinate Lien on the related Revenues upon satisfaction of the conditions described below. 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 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. 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 of the Bond Resolution relating to the obligation to reimburse a draw -down on a Reserve Account Credit Facility and the requirements under this heading requiring withdrawals of 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 will 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 will 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 in paragraphs (4) through (7) under the caption "Additional Bonds" are met with respect to such Subordinate Lien Bonds. (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 B -16 pursuant to the Bond Resolution then Outstanding and parties to related Contracts will 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) above are not 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 the Bond Resolution until the owners of all Bonds Outstanding 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) above are not applicable), the owners of all Bonds then Outstanding 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. (T) No owner of Bonds, or party to any related Contract will 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 is unconditional and absolute. Nothing in the Bond Resolution prevents 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 concerned, the foregoing provisions do 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 paragraphs (1) through (5) under this caption are satisfied treating such obligations as Subordinate Lien Bonds and the issuance and security documents therefor as Supplemental Bond Resolutions. M Special Purpose Revenue Bonds; Additional Release Revenue Bonds; PFC Stand -Alone Revenue Bonds and Other Airport Obligations 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. Other Airport Obligations (other than obligations treated as Senior Lien Bonds or Subordinate Lien Bonds as described in the last paragraph under the caption "Additional Bonds" and in paragraph (10) under the caption "Subordinate Lien Bonds" ) may not be accelerated for purposes of being paid from Revenues and, upon insolvency, bankruptcy or other event described in paragraph (4) under the caption "Subordinate Lien Bonds ", 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. Additional Released Revenue Bonds may be issued after compliance with the Master Bond Resolution and any requirements therefor set forth in any Supplemental Bond Resolution related to such Additional Released Revenue Bonds. 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 may 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 described in paragraph (1) under the caption "Additional Bonds" has been satisfied with respect to the then outstanding General Revenue Bonds. The pledge of PFC Revenues to secure PFC Stand -Alone Revenue Bonds will be provided for in the Supplemental Bond Resolution providing for the first issuance of PFC Stand - Alone Revenue Bonds. Released Revenues and Securitizations 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. Upon compliance with the preceding requirements, 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. B -18 Accession of Subordinate Lien Bonds and Related Contracts to Senior Lien Status By proceedings authorizing Subordinate Lien Bonds or a lien permitted by paragraph (b)(10) under the caption "Subordinate Lien Bonds ", 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 Contracts with a lien on the same category of Revenues if, as of the date of accession, the conditions of paragraphs (1)(A), (5) and (6) under the capital "Additional Bonds" 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 Account, the Principal Account and the Contract Payments Account 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. 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 may be created for purposes of the Bond Resolution until amounts are paid under such Financial Facility. Any such Reimbursement Obligation is 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) are fully subordinate to the payment of debt service on the related class of Bonds. Any such Financial Facility will be for the benefit of and secure such Bonds or portion thereof as specified in the applicable Supplemental Bond Resolution. Notwithstanding the other provisions of the Bond Resolution, 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. 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 B -19 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." Maintenance, Insurance, and Sale of the Airport; Annual Budget; Uneconomic Facilities; Tax Covenants The Consolidated Government covenanted in the Master Bond Resolution, by or through the Augusta Aviation Commission, to (i) maintain the Airport in good repair and in sound operating condition, (ii) carry adequate public liability, fidelity, and property insurance or self - insurance, as the Consolidated Government may determine to be appropriate under the circumstances, and (iii) adopt an Annual Budget as approved by the Augusta Aviation Commission for the Airport for each Fiscal Year of the Consolidated Government in compliance with the rate covenant described in the Official Statement under the heading "SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2015 BONDS — Rate Covenant ". The Consolidated Government also covenanted in the Bond Resolution not to sell, lease, encumber, or in any manner dispose of the Airport as a whole or in part, except for property not necessary, useful, or profitable in the operation of the Airport or property the disposition of which will be advantageous to the Airport and will not adversely affect the security for the Bonds, as certified by the Airport Director, Mayor and Airport Consultant. The Consolidated Government reserved the right in the Bond Resolution to sell any portion of the Airport or to transfer the Airport as a whole to any political subdivision or authority or agency of one or more political subdivisions of the State, provided that the Consolidated Government obtains an opinion of Bond Counsel that such sale or transfer 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 an opinion of an Airport Consultant that such sale or transfer will not result in any diminution of Net General Revenues to the extent that in the then current and each succeeding Fiscal Year of the Consolidated Government the Net General Revenues will be less than 120 percent of the Average Annual Debt Service Requirement on all General Revenue Bonds to be Outstanding after such sale or transfer with a lien on Net General Revenues. In reaching its opinion in the foregoing paragraph with respect to sales, the Airport Consultant will 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 will 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. In reaching its opinion with respect to transfers, the Airport Consultant will 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. 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 General Revenue Bonds to be Outstanding after such transfer with a lien on Net General Revenues. In reaching this conclusion, the Airport Consultant will 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. The Consolidated Government also covenanted in the Bond Resolution to take all actions to assure the tax - exempt status of interest on Tax - Exempt Bonds and to refrain from taking any action which would adversely affect such status. B -20 Events of Default and Remedies Events of Default. The Master Bond Resolution defines an "Event of Default" to mean, among other things, (i) failure to pay debt service on Senior Lien Bonds when due, (ii) certain events of insolvency affecting the Consolidated Government, (iii) the appointment of a receiver of the Airport or the funds held under the Bond Resolution, (iv) failure to perform any other covenant contained in the Bond Resolution for 90 days (or 180 days if such default cannot be cured in 90 days and if corrective action is instituted and diligently pursued) after notice from the owners of (or a Credit Issuer securing) at least 25 percent in aggregate principal amount of Senior Lien Bonds, (v) an Event of Default under any Supplemental Bond Resolution relating to Senior Lien Bonds, (vi) delivery of notice that an "Event of Default' has occurred under a Credit Facility Agreement relating to Senior Lien Bonds or (vii) failure by any Liquidity Facility Issuer to pay the purchase price of Senior Lien Bonds under any Liquidity Facility then in effect; provided if the Event of Default relates solely to Bonds related to a particular category of Revenues and no other event has occurred which could become an Event of Default with respect to any other Bonds then Outstanding, such Event of Default will be deemed to apply solely to the related Bonds and Contracts and the provisions of the Bond Resolution will otherwise remain in full force and effect with respect to all other Bonds and related Contracts. Remedies. Upon the happening and continuance of any Event of Default (except for events described in clauses (vi) and (vii) above), the Bond Resolution allows the owners of more than 50 percent in aggregate principal amount of outstanding Senior Lien Bonds affected thereby or a Credit Issuer securing more than 50 percent in aggregate principal amount of outstanding Senior Lien Bonds affected thereby to accelerate such Bonds affected thereby. If the Consolidated Government cures the Event of Default in the manner presented by the Bond Resolution, the Bond Resolution allows the owners of more than 50 percent in aggregate principal amount of outstanding Senior Lien Bonds to waive the acceleration, subject to the consent of each Credit Issuer securing Senior Lien Bonds. 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 Senior Lien Bonds by such of the following remedies as it shall deem most effectual to protect and enforce such rights: (a) 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; (b) by bringing suit upon the Senior Lien Bonds; (c) 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; (d) 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 (e) 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 are 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. M Application of Moneys After Default. The Bond Resolution provides that, upon the occurrence and continuation of an Event of Default, the Consolidated Government or a receiver appointed for the purpose must apply all Pledged Revenues as follows and in the following order of priority: (i) first, to the payment of the reasonable and proper charges, expenses, and liabilities of the receiver and any paying agent and bond registrar under the Bond Resolution (with such amounts payable, if related to a particular series and therefore to a particular category of Revenues, first from such category), (ii) second, to the payment of all reasonable and necessary Expenses of Operation and Maintenance of the Airport and major renewals and replacements to the Airport, (iii) third, to the payment of debt service on Senior Lien Bonds and 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 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 C1-Dki 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 mandatary redemption within such Fiscal Year. 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. (a) 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. (b) Notwithstanding anything else in the Bond Resolution to the contrary, payments made pursuant to (b), (c) and (d) shall be made by category of Revenues to related Bonds such that: 0) 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. Defeasance The Bond Resolution provides that Bonds for the payment or redemption of which sufficient moneys or sufficient Government Obligations 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) will be deemed to be paid and no longer outstanding under the Bond Resolution. Government Obligations are sufficient if: (i) 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 B -23 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. If all Bonds and obligations secured by a lien on a category of Revenues have been paid or provision for payment thereof made as set forth in the preceding paragraph, 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 will 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. Supplemental Resolutions The Bond Resolution permits the Consolidated Government to adopt supplemental resolutions modifying, amending, or supplementing the Bond Resolution, without the consent of or notice to the owners of any of the Bonds for certain purposes including to modify any of the provisions of the Bond Resolution in any respect (other than a modification of the type described below requiring the unanimous consent of the owners of Bonds); provided that for (i) 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 rating such Bonds shall have notified the Consolidated Government that such modification will not cause the then applicable Rating on any such 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. The Bond Resolution also provides that, with the consent 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, the Consolidated Government and the Augusta Aviation Commission may 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 may: (i) extend the maturity date or due date of any mandatory sinking fund redemption with respect to any Bond Outstanding under the Bond Resolution; (ii) reduce or extend the time for payment of debt service on any Bond Outstanding under the Bond Resolution; (iii) 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; (iv) 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; (v) 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; (vi) reduce the percentage of owners of either class of Bonds required to approve any such supplemental resolution; or (vii) deprive the owners of the Bonds of the right to payment of such 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 which affects the rights or duties of any Financial Facility Issuer securing any of the Bonds without its written consent. B -24 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) This page intentionally left blank. SUMMARY OF THE AIRLINE OPERATING AGREEMENT AND TERMINAL BUILDING LEASE Each Airport Operating Agreement and Terminal Building Lease (an "Agreement') sets forth the agreement for the use of Airport facilities between the Aviation Commission and the applicable Signatory Airlines. The Agreements between the Aviation Commission and each Signatory Airline are substantially the same. Certain provisions of the Agreement are summarized below. The headings and titles used herein are solely for convenience or reference. These summaries do not purport to be complete or definitive and reference should be made to each Agreement for a full and complete statement of its provisions. Definitions Certain words and terms used in this Official Statement are defined herein. In addition to the words and terms defined elsewhere herein, the following words and terms are defined terms in this Official Statement. "Affiliate" shall mean any air transportation company that is (i) a parent or subsidiary of Airline, or (ii) shares an International Air Transport Association (IATA) flight designator code with Airline at the Airport (Code- Sharing Partner), or (iii) otherwise operates under essentially the same trade name as Airline at the Airport and uses essentially the same livery as Airline; provided that no major airline, as such term is defined by the FAA, shall be classified as an Affiliate of another major airline, unless either clause (i) or (iii) above defines the relationship between such airlines at the Airport. Airline shall designate its Affiliate(s) in writing and shall serve as financial guarantor for all rentals and landing fees incurred by any such Affiliate at the Airport while operating as Airline's designated Affiliate under the Agreement. Airline may at any time give Airport thirty (30) days prior written notice that such an air transportation company otherwise meeting the definition of an "Affiliate" under the Agreement shall no longer be considered an Affiliate of Airline for purposes of the Agreement, and any guaranty by Airline of Affiliate's rentals or landing fees shall terminate and be ineffective as to any amounts incurred by such air transportation company after the effective date of termination of "Affiliate" status. During such period of time that an air transportation company is an Affiliate of Airline in accordance with the terms hereof, such Affiliate (1) shall have the same rights to use Airline's leased premises and the Airport as Airline; (2) shall be charged at the same landing fee rates as Airline without payment of any non- signatory premiums; (3) shall participate in any year -end or other reconciliation process whereby signatory airlines share in excess revenues or true -up of projected against actual costs; and (4) shall not be counted as a separate air transportation company from Airline for purposes of allocating the per capita portion of any cost allocation formula, but such Affiliate's passengers shall be counted as Enplaned Passengers of Airline for purposes of any enplanement -based portion of such formula. An Affiliate shall enter into a separate operating agreement with the Airport. "Agreement" means each Airline Operating Agreement and Terminal Building Lease for the Augusta Regional Airport, dated as of September 26, 2013 and as amended by a First Amendment to Airline Operating Agreement and Terminal Building Lease, dated as of the date of issuance of the Series 2015 Bonds, between the Augusta Regional Airport Aviation Commission and (1) Delta Air Lines, Inc. and (2) American Airlines, Inc. "Air Transportation" shall mean the carriage of persons, property, cargo, and mail by aircraft and all other activities reasonably related thereto. "Aircraft Arrival" shall mean the arrival of all non - governmental aircraft (including, without limitation, scheduled and nonscheduled flights, training and maintenance flights, or aircraft diversions) at the Airport. "Aircraft Gates" shall mean those portions of the Airport's Apron Area designated by the Aviation Commission from time to time for aircraft parking at the Terminal Building in order to enplane and deplane passengers. "Aircraft Operator" shall mean any entity operating aircraft into and out of the Airport under Part 121 or Part 135 of the FARs, or the practical equivalent of said Parts and using the Terminal Building. "Aircraft Parking Apron" means that portion of the Airfield located adjacent to the Terminal Building and depicted on Exhibit `B" of the Agreement where Aircraft Operators park aircraft. "Aircraft Parking Position(s)" shall mean the locations(s) on the Aircraft Parking Apron where aircraft are parked for the purpose of enplaning and deplaning passengers at the Terminal Building. "Airfield" or "Airfield Area" shall mean those portions of the Airport which provide for the landing, takeoff, taxiing, movement, or staging of aircraft including navigational aids, hazard designation and warning devices, airfield security roads, fencing, lighting, runway protection zones, aviation easements and interests in property utilized in connection therewith. C -1 "Airfield Area Requirement" shall be the sum of the amounts as described in subsection A, paragraphs 1 -5 under the subheading "Calculation of Landing Fee Rate" herein. "Airline" shall mean the entity that has executed the Agreement and is identified in the first paragraph of the Agreement. "Airline Leased Premises" or "Leased Premises" shall mean the following: (a) "Exclusive Use Space" shall mean only those premises in the Terminal Building that are leased by the Aviation Commission to Airline for its exclusive use. Exclusive Use Space is primarily used for ticket counter, office area, and baggage makeup functions. (b) "Joint Use Space" shall mean those premises that are used by airlines, including Airline, for their joint use (principally, the Terminal Building, hold room areas, baggage claim and baggage breakdown areas). (c) "Preferential Use Space" shall mean the premises from time to time provided by the Aviation Commission to an Airline for its preferential and nonexclusive use and shall include passenger holdrooms, Aircraft Parking positions, and Loading Bridges. "Airport" shall mean the Augusta Regional Airport at Bush Field, as shown in Exhibit A of the Agreement, as it now exists or as it may change from time to time. "Airport Cost Centers" shall mean the following cost centers as more fully shown in Exhibit B of the Agreement, as the same may change from time to time. Such cost centers shall be used for purposes of accounting for Airport Revenue and Expense and for calculating and adjusting certain rentals and fees set forth in the Agreement. "Airport Expense" shall mean all costs and expenses incidental to, necessary for, or arising out of the operation of the Airport, including but not limited to direct and allocated indirect Operation and Maintenance Expenses; Annual Debt Service, Other Indebtedness; Coverage; required reserve account funding and replenishment; and the cost of defending, settling, or satisfying any litigation or threatened litigation that relates to the Airport, or any aspect thereof. "Airport Revenue" shall mean all revenues, rentals, charges, Airline landing fees, user charges, and concession revenues received by or on behalf of the Aviation Commission in connection with the operation of the Airport or any part thereof, excluding all gifts, grants, reimbursements, restricted funds (including Passenger Facility Charge proceeds or payments received from governmental units, or public agencies, or any other source). Airport Revenue shall not include any revenue or income from (1) any Special Purpose Facility to the extent such revenue or income is either (a) pledged to pay principal, interest, or other charges for bonds or other obligations issued in anticipation thereof; or (b) for use by the Aviation Commission to reimburse costs incurred by it in the construction or provision of Special Purpose Facilities, or (2) any income earned on the investment of restricted funds. However, ground rentals for Special Purpose Facilities shall be considered Airport Revenue. "Annual Budget" shall mean the Airport capital and operating budget prepared by the Executive Director and adopted by the Aviation Commission each Fiscal Year. "Annual Debt Service" or "Annual Debt Service Requirement' means the Debt Service Requirement in each year that the Bonds are outstanding. "Apron Area" shall mean the paved aircraft ramp area adjacent to the Terminal Building that provides for the parking, loading, unloading, and servicing of aircraft. "Apron Area Requirement" shall be the sum of the amounts set forth as described in subsection A, paragraphs 1 -5 under the subheading "Calculation of Aircraft Parking Position Fee" herein. "Bonds" means any revenue bonds authorized by and authenticated and delivered pursuant to the Bond Resolution including the Series 2015 Bonds. "Bond Resolution" shall mean the Master Bond Resolution for the Series 2015 Bonds adopted by the Aviation Commission on , 2015 and the Augusta Richmond County Commission on , 2015 as it may from time to time be modified, supplemented, or amended by Supplemental Resolutions (as defined in the Master Bond Resolution). "Capital Improvement" shall mean any single item having a cost or estimated to have a total cost in excess of Fifty Thousand Dollars ($50,000) and a useful life in excess of three (3) years, acquired, purchased, or constructed to C -2 improve, maintain, or develop the Airport. Said term shall include any expense for development studies, analyses, master planning efforts (including periodic reviews thereof), and economic or operational studies conducted on behalf of the Airport. "Certified Maximum Gross Landing Weight or CMGLW" shall mean the maximum weight, in thousand (1,000) pounds units, that each aircraft operated by an Airline is authorized by the Federal Aviation Administration to land at the Airport. "Common Use Premises" shall mean the lobby area, baggage claim area, security check point area and any other areas in the Terminal Building used in common by Aircraft Operators together with all facilities, improvements and equipment which have been or may hereafter be provided for use in connection with such premises. The Common Use Premises in the Terminal Building are described in Exhibit "C" of the Agreement. "Competitive Credit" shall mean an amount provided, at discretion of Airport Executive Director, to the Airlines in form of a credit which is used to determine annual rate charges. "Contract Security" shall mean a contract bond, irrevocable letter of credit or other security acceptable to Augusta in an amount equal to three (3) months' rentals and landing fees payable by an Aircraft Operator under Section 1 -3 -8.4 of Augusta Ordinance. "Coverage" shall mean for any series of Bonds, the percentage of Annual Debt Service that the Aviation Commission covenants to generate from net revenues, over and above the Annual Debt Service for such series of Bonds, pursuant to the Bond Resolution. Said term shall also mean the dollar amount computed by multiplying said percentage by the Annual Debt Service for such series of Bonds. "Debt Service Requirement" shall have the meaning set forth in the Bond Resolution. "Deplaned Passengers" shall mean all passengers deplaned by an Aircraft Operator on aircraft operated at the Airport. "Enplaned Passengers" shall mean all passengers enplaned by an Aircraft Operator on aircraft operated at the Airport. Without limiting the generality of the foregoing, Enplaned Passengers shall also include persons for whom the Aircraft Operator has provided the particular air transportation on a substantially complimentary basis such as employees of an airline, family members of such employees, persons traveling on "buddy passes," employees of other airlines, and those passengers redeeming "frequent flyer" awards and travel vouchers. "Exclusive Use Premises" shall mean those premises which have been leased exclusively to an Aircraft Operator. The Exclusive Use Premises in the Terminal Building are described on Exhibit "C" of the Agreement. "Executive Director" shall mean the person designated by the Aviation Commission to exercise functions with respect to the rights and obligations of the Aviation Commission under the Agreement. Said term shall also include any person expressly designated by the Aviation Commission to exercise functions with respect to the rights and obligations of the Airport under the Agreement. "FAA" shall mean the Federal Aviation Administration of the U.S. Government or any federal agencies succeeding to its jurisdiction. "Fiscal Year" shall mean the twelve (12) month period beginning January 1 of any year and ending following December 31 of that year or any other period specified by federal or State law. "Gates" shall mean Aircraft Parking Positions at the Terminal Building together with hold room areas and loading bridges and shall include preferential use of the podium and associated facilities for the Gate. "Hazardous Material" shall mean and include those elements or compounds which are contained in the list of hazardous substances adopted by the United States Environmental Protection Agency (EPA) and the list of toxic pollutants designated by Congress or the EPA or defined by any other federal, state or local statute, law, ordinance, code, rule, regulations, order or decree regulating, relating to, or imposing liability or standards of conduct concerning, any hazardous, toxic or dangerous waste, substance or material as now or at any time under the Agreement in effect. "Joint Use Formula" shall mean the formula used to prorate the rental or cost of space among those airlines using or having the right to use such space on the basis of the proportion of each Airline's Enplaned Passengers to the total number of Enplaned Passengers of all such Airlines using said space at the Airport. In the application of the Joint Use Formula, Airline's Affiliates Enplaned Passengers will be counted as Enplaned Passengers of Airline. Cf3 "Landing Fee(s)" shall mean the payment required of each Airline each month, for the use of the Airfield determine based on the Landing Fee rate. "Landing Fee Rate" shall mean the rate multiplied by each 1,000 pounds of CMGLW or fraction thereof to calculate Landing Fees. "Loading Bridges" shall mean the loading bridges owned and maintained by Aviation Commission serving aircraft parked at the Aircraft Parking Positions at the Terminal Building or as they may be modified, changed, or relocated from time to time. "Loading Bridge Requirement" shall be the sum of the amounts as described in subsection A, paragraphs 1 -5 under the subheading "Calculation of Loading Bridge Use Fee" herein. "Loading Bridge Use Fee" shall be payment required of the Airline for the use of the Loading Bridges calculated as described under the subheadings "Loading Bridge Use Fee" and "Calculation of Loading Bridge Use Fee" herein. "Majority in Interest of Airlines" or "MII" shall mean, in the Airfield Area, at least fifty one percent (51 %) of the Signatory Airlines, which, together, have landed at least 51% of the total Maximum Gross Certificated Landing Weight by all Signatory Airlines at the Airport during the most recent six (6) month period. In the Terminal Building, Mil shall mean at least 51% of the Signatory Airlines, which, together, have paid 51% of the total Terminal Rentals paid by all Signatory Airlines at the Airport during the most recent six (6) month period. Solely for determining Mll, no Air Transportation company shall be deemed to be a Signatory Airline so long as any event of default with respect to such Air Transportation company has occurred and is continuing or such Air Transportation company operates less than one (1) average daily flight. MII shall only apply to the Airfield Area and Terminal Building and only as it relates to the placement of new debt for purposes of Capital Improvements, refinancing or acquisition for those capital improvements requiring MII consideration. For purposes of MII votes, Signatory Airlines that have executed Scheduled Airline Operating Agreement and Terminal Building Leases substantially the same as the Agreement will be the only airlines permitted to vote. "Operation and Maintenance Expenses" shall mean the Aviation Commission's current annual expenses of maintaining, operating, repairing, and administering the Airport, including taxes and assessments, if any, as set forth in the current Annual Budget of the Aviation Commission. "Other Indebtedness" shall mean any subordinate security or debt incurred by the Aviation Commission for Airport purposes that is outstanding and not authenticated and delivered under and pursuant to a Bond Resolution. "Personal Property" shall mean the trade fixtures, equipment, conveyors, inventory, furniture, or supplies owned or leased by Airline (from a party other than the Aviation Commission) and installed or used at the Airport in the conduct of Airline's Air Transportation business that are removable from Airline's Leased Premises without substantial or permanent injury or damage to Airline's Leased Premises. "Premises" shall mean the Exclusive Use, Preferential Use, and Common Use Premises leased to a specific Aircraft Operator. "Public Areas" shall mean those areas of the Terminal Building not leased to any person, company, or corporation that are open to the general public. "Rental Rate" shall mean the annual charge per square foot for the space leased to the Aircraft Operators. "Rentable Space" shall mean the airline, concession, Transportation Security Administration (TSA) passenger processing, TSA office and vacant spaces, administrative square footage in the Terminal Building. "Rules and Regulations" shall mean those Rules, Regulations, and ordinances promulgated by the Aviation Commission or operating directives issued by the Executive Director, as the same may be amended, modified, or supplemented from time to time to the extent that such rules, regulations, and ordinances are not in conflict with the purposes or terms of the Agreement. "Series 2015 Bonds" means collectively the Airport General Revenue Refunding Bonds, Series 2015A and Series 2015B, in an original aggregate principal amount of S issued pursuant to the Bond Resolution. "Signatory Airline" shall mean an airline that is a party to an Airline Operating Agreement and Terminal Building Lease with Augusta Aviation Commission. C -4 "Special Purpose Facility" shall mean any specific improvement undertaken by the Aviation Commission for the benefit of one or more airlines or other Airport tenants under the terms of a separate agreement that provides for, among other things (1) the payment of rentals or fees for the use or occupancy thereof in sufficient amounts to permit the financing of such improvement and payment of all costs thereof solely from such rentals or fees, and (2) the payments of the operation and maintenance cost of such improvement by the tenant or tenants thereof. "Sponsor Grant Assurances" shall mean those terms and conditions contained in FAA Airport Improvement Program Grants to which the Airport agrees as part of the warranties, assurances, covenants and other obligations contained in the grant. "Terminal Building" shall mean the Airport's passenger terminal building serving the traveling public. "Terminal Building Requirement" shall be the sum of the amounts as described in subsection A, paragraphs 1 -5 under the subheading "Calculation of Terminal Building Rental Rates" herein. "Terminal Rental" shall mean the aggregate of monthly payments required of a specific Aircraft Operator in each Fiscal Year for the license granted such Operator to occupy specific Premises in the Terminal Building. "Terminal Building Requirement" shall mean the sum of Operation and Maintenance Expenses, Operating and Maintenance Reserve, Net PFC Debt Service Requirement, and Debt Service Requirement. "Total Landed Weight" shall mean the sum of the Maximum Gross Certificated Landing Weight for all of Airline's Aircraft Arrivals over a stated period of time. Said sum shall be rounded up to the nearest one thousand (1,000) pound unit for all landing fee computations. "TSA" shall mean the Office of Homeland Security and Transportation Security Administration, or their authorized successor(s). Use of Airport, Facilities and Terminal Building The Agreement entitles the Airline to the use, in common with others, the Airport and its appurtenances (together with all facilities, equipment, improvements, and services that have been or may hereafter be provided at or in connection with the Airport for common use) for the sole purpose of its conduct of Air Transportation. The Agreement also entitles the Airline to use the Terminal Building, The Agreement sets forth certain expressly permitted uses as well as certain use restrictions relating to the Airport, its Facilities and the Terminal Building. Term The term of the Agreement commenced on September 26, 2013 and shall be for three (3) years, unless sooner terminated in accordance with the Agreement. Upon mutual agreement of the parties, the Agreement shall be subject to two (2) one (1) year renewals. The parties agree to provide written notification of intent to renew within ninety (90) days prior to the expiration of the tern. The Airline and the Aviation Commission agree to begin the re- negotiation of the Agreement at least six (6) months prior to December 31, 2015. Rentals and Fees Airline Payments. Airline agrees to pay the Aviation Commission, without deduction or setoff, all applicable rentals, additional rentals, charges, and fees (hereinafter referred to collectively as "Rentals and Fees ") during the term of the Agreement for its use of the Exclusive Use Space, Joint Use Space, Preferential Use Space, Loading Bridges, Aircraft Parking Positions, Airfield Area, and facilities, and for its rights, licenses, and privileges granted under the Agreement. Terminal Building Rentals. (a) Airline shall pay to the Aviation Commission, for its use of Terminal Building Exclusive Use Space and Preferential Use Space, monthly amounts determined by multiplying the total square footage of Airline's Terminal Building Exclusive Use Space and Preferential Use Space by the annual Terminal Building rental rate calculated as described under the subheading "Calculation of Terminal Building Rental Rates" below and dividing by twelve (12). (b) Airline shall pay to the Aviation Commission, for the shared use of Joint Use Space, monthly amounts determined by: 1. For space designated for joint use, multiplying the total square footage of such space by the annual Terminal Building rental rate calculated as described under the subheading "Calculation of Terminal Building Rental Rates" below, dividing the amount obtained by twelve (12), and then applying the Joint Use Formula, and C -5 2. For the purposes of applying the Joint Use Formula, the Aviation Commission will use statistics for the third (3 rd ) preceding month. If Airline fails to supply the passenger activity information then one hundred and twenty -five percent (125 %) of the most recent monthly enplaned passenger data available for Airline shall be used for that billing. Correction to actual will occur on receipt of statistical report or at the year -end adjustment, whichever is more convenient for the Aviation Commission. Loading Bridge Use Fee. Airline shall pay to the Aviation Commission, for its use of Loading Bridges, monthly fees determined by multiplying the number of Loading Bridges assigned to Airline by the annual Loading Bridge Use Fee rate calculated in accordance with as described under the subheading "Calculation of Loading Bridge Use Fee" below and dividing by twelve (12). In the event of multiple users the monthly fees will be prorated per use by Airline. Aircraft Parking Position Rentals. Airline shall pay to the Aviation Commission, for its use of Aircraft Parking Positions, monthly rentals determined by multiplying the number of Airline's aircraft parking positions at the Terminal Building by the annual Aircraft Parking Positions rental rate calculated under the subheading "Calculation of Aircraft Parking Position Fee" below and dividing by twelve (12). In the event of multiple users the monthly fees will be prorated per use by Airline. Landing Fees. (a) Rentals and Fees for the use of the Airfield, and for rights, licenses, and privileges granted to Airline under the Agreement shall be combined in and represented by a monthly landing fee (hereinafter referred to as the "Landing Fee "), which shall be determined by multiplying Airline's Total Landed Weight for the month by the annual Landing Fee rate per thousand (1,000) pound unit of landed weight. (b) Airline shall furnish to the Aviation Commission, on or before the tenth (10 day of each month, an accurate verified report containing Airline activity information for the previous month including the following: 1. Airline's total number of Aircraft Arrivals, by type of aircraft and Maximum Gross Certificated Landing Weight of each type of aircraft. 2. The number of Enplaned Passengers and the number of Deplaned Passengers, including all through and non - revenue passengers. Passenger Facility Charges Nothing in the Agreement limits the Aviation Commission's right to impose on Airline's passengers a Passenger Facility Charge ( "PFC ") authorized under Section 1113(e) of the Federal Aviation Act of 1958, as amended by Section 9110 of the Omnibus Budget Reconciliation Act of 1990 (Pub. L. 101 -508, 49 U.S.C. App Paragraph 1513) and the rules and regulations promulgated there under (14 CFR Part 158), as may be amended from time to time ( "PFC Regulations "). Airline agrees to cooperate with the Aviation Commission in the collection of such charge and to collect and remit such charges, less the allowable collection fee and any amounts paid by ticket purchasers that are subject to reimbursement, to the Aviation Commission as provided in the PFC Regulations. The Aviation Commission shall apply any such PFC revenues to improvement of the Airport or to the retirement of Airport debt as required by the PFC Regulations. Airline Records Airline shall keep and maintain a complete and adequate set of records concerning its landed weights for a period equal to the FAA mandated time of such activity. If such records are maintained at a location other than Airline's Leased Premises, such records shall be retrievable within ten (10) business days. Each party to the Agreement, at its expense and on reasonable notice, shall have the right from time to time to audit and inspect the records of the other party relating to the performance of the Agreement, provided that such inspection is made during regular business hours. Interest on Past Due Accounts Rents and fees not received within fifteen (15) business days after the due date are past due. There shall be added to all unpaid past due sums owed the Aviation Commission shall accrue interest at the maximum interest rate then allowable by applicable law; provided, however, that if no maximum interest rate is then provided by applicable law, the interest rate shall be twelve (12) percent per annum. No interest shall be charged on any past due account until Airline has been contacted via written notification and given an opportunity to cure and payment is thirty (30) days past due, but such interest when assessed thereafter shall be computed from the due date. Such interest shall not accrue with respect to disputed items being contested in good faith by an Airline. C -6 Security Should Airline fail to pay rentals and fees when they are due three times within any 12 month period, Airline agrees to provide the Aviation Commission, within thirty (30) days of written notice from the Aviation Commission, a contract bond, irrevocable letter of credit, or other similar security acceptable to the Aviation Commission ( "Contract Security") in an amount equal to the estimate of three (3) months' Rentals and Fees payable by Airline, to guarantee the faithful performance by Airline of its obligations under the Agreement and the payment of all Rentals and Fees due. Airline shall be obligated to maintain such Contract Security throughout the remaining term of the Agreement, unless Airline pays rentals and fees in full and on time for a continuous 12 month period. Such Contract Security shall be in a form and with a company chosen by Airline and reasonably acceptable to the Aviation Commission and licensed to do business in the State of Georgia. In the event that any such Contract Security shall be for a period less than the full period required this paragraph or if Contract Security shall be cancelled, Airline shall provide a renewal or replacement Contract Security for the remaining required period. In the event the Aviation Commission is required to draw down or collect against Airline's Contract Security for any reason, Airline shall, within fifteen (15) business days after the Aviation Commission's written demand, take such action as may be necessary to replenish the existing Contract Security to its original amount (three [31 months' estimated Rentals and Fees) or to provide additional or supplemental Contract Security from another source so that the aggregate of all Contract Security is equal to three months' estimated Rentals and Fees payable by Airline. Upon Airline's election to assume the Agreement under Federal Bankruptcy Rules and Regulations and the Federal Judgeship Act of 1984 or any successor statute, as such may be amended, supplemented, or replaced, the Aviation Commission, by written notice to Airline given at any time within ninety (90) days of the date such event becomes known to the Aviation Commission, may impose or re- impose the security requirements described above on Airline. In such event, Airline shall provide the Aviation Commission with the required Contract Security within fifteen (15) days from its receipt of such written notice and shall thereafter maintain such Contract Security in effect until the expiration or termination of the Agreement, unless Airline pays rentals and fees in full and on time for a continuous 12 -month period. If after notification by the Airport and the expiration of the 15 day period, should the Airline fail to obtain or keep in force such Contract Security required under the Agreement, such failure shall be grounds for immediate termination of the Agreement. Airline and the Aviation Commission agree that the Agreement constitutes an `unexpired lease' for the purposes of Section 365 of the United States Bankruptcy Code (Title I 1 USC) subject to assumption or rejection, and subject to the terms and conditions of assumption or rejection, as provided in said Section 365. Furthermore, Airline and the Aviation Commission agree that if Airline provides Contract Security in the form of a Contract bond or irrevocable letter of credit, such Contract Security provided by Airline is not `property of the estate' for purposes of Section 541 of the United States Bankruptcy Code (Title 11 USC), it being understood that any Contract Security is property of the third (3rd) party providing it (subject to the Aviation Commission's ability to draw against the Contract Security) and that all PFCs, less the allowable collection fees and any amounts paid by ticket purchasers that are subject to reimbursement, collected by Airline with respect to Enplaned Passengers at the Airport are property of the Aviation Commission. Recalculation of Rentals and Fees Rentals and Fees shall be adjusted annually during the term of the Agreement. Airlines shall be provided an opportunity to review the annual proposed budget thirty (30) to forty five (45) days prior to approval by the Aviation Commission. A statement showing the recalculation of the new rates for Rentals and Fees, in accordance with the rates and charges methodology provided for in the Agreement, shall be prepared and transmitted to Airline by the Executive Director within thirty (30) days after approval by the Aviation Commission and adoption by the County. Said statement shall then be deemed part of the Agreement and effective on the first (1 s ') day of each Fiscal Year to which such Rentals and Fees apply. Records of Airport Cost Centers The Aviation Commission shall maintain accounting records documenting the following items for each Airport Cost Center: (1) Airport Revenue, (2) Airport Expense, and (3) other expenses of the Aviation Commission. The Aviation Commission shall further maintain records evidencing the allocation of capital funds obtained from the proceeds of the sale of Bonds or other capital fund sources to each Airport Cost Center. Included in the allocation to each Airport Cost Center shall be that cost center's proportionate share of Bond issuance expense, capitalized interest, and funding of special funds determined in accordance with allocation of costs funded through bond proceeds or other capital sources. CitII►J Aviation Commission Reports On or before August 1 of each Fiscal Year, the Executive Director shall provide Airline with a budget calendar establishing dates for the Signatory Airlines to review the Annual Budget. On or before May 1 of each Fiscal Year, the Executive Director shall send Airline notification to submit forecast of Maximum Gross Certificated Landing Weight. On or before June 1 of each Fiscal Year, Airline shall submit to the Executive Director, in writing, a forecast of its Maximum Gross Certificated Landing Weight for the succeeding Fiscal Year. If such forecast is not submitted by Airline, the Aviation Commission will develop its own forecast of Maximum Gross Certificated Landing Weight for Airline for the succeeding Fiscal Year. If an Annual Budget is not adopted by the Aviation Commission before any such Fiscal Year, the Rentals and Fees in effect during the preceding Fiscal Year shall remain in effect until (1) a new Annual Budget has been adopted by the Aviation Commission, and (2) the Aviation Commission has calculated the Rentals and Fees in accordance therewith. The recalculated Rentals and Fees shall then be in effect retroactive (without penalties or interest if paid by the due date on invoice issued to Airline) to the beginning of such Fiscal Year. If the recalculated Rentals and Fees exceed 10% of the previous Fiscal Year, the invoiced amount for the difference between the preceding Fiscal Year rates and the current Fiscal Year rates will be broken into two equal invoice amounts payable within thirty (30) days of invoice date. Whenever the adjustment calculation involves an estimate, the estimate of the Aviation Commission shall be used, which estimate shall be based on past performance and reasonable and prudent future expectations. Whenever the adjustment calculation involves an estimate included in the Annual Budget, the estimated amount in the Annual Budget shall be used. Calculation of Terminal Building Rental Rates Each year the Aviation Commission shall calculate Terminal Building Requirement for the succeeding Fiscal Year by totaling the following amounts, as set forth in the Annual Budget: 1. The total of the direct and indirect Operation and Maintenance Expenses allocable to the Terminal Building. 2. Annual Debt Service plus Coverage (Net of available PFC proceeds authorized for the payment of a portion of Terminal Building Debt Service) reasonably allocable to the Terminal Building, as required by the Bond Resolution. An amount equal to 1.25 times the pro rata portion of the Annual Debt Service Requirement net of PFC proceeds, if any, authorized to pay debt service allocable to the Terminal Building, or such other amount as may be required by the Bond Resolution; 3. The amount of deposits to any funds and accounts required by the Bond Resolution and reasonably allocable to the Terminal Building. 4. Any other Airport Expense reasonably allocable to the Terminal Building not included in Paragraphs I through 3 above. 5. An amount equal to any deficit or credit estimated for operation of the Terminal Building during the then - current Fiscal Year or any adjustment carried over from preceding Fiscal Years to reflect any difference between actual versus estimated expenses. The average Rental Rate shall then be calculated by dividing the Terminal Building Requirement computed above by the amount of Rentable Space square footage in the Terminal Building. The average Rental Rate shall then be multiplied by the total amount of square footage used or occupied by Airline to determine the total annual Terminal Building space rent payable by each Airline. The space rents for all Joint Use Space shall be prorated among all Airlines according to the Joint Use Formula and each Airline shall pay its pro rata share of such space rents. Calculation of Loading Bridge Use Fee The Loading Bridge Use Fee shall be established and thereafter adjusted annually in the following manner: Each year the Aviation Commission shall calculate the Loading Bridge Requirement for the succeeding Fiscal Year by totaling the following amounts, as set forth in the Annual Budget: C -8 Bridges. 1. The total of the direct and indirect Operation and Maintenance Expenses allocable to the Loading 2. An amount equal to 1.25 times the pro rata portion of the Annual Debt Service Requirement net of PFC proceeds, if any, authorized to pay debt service allocable to the Loading Bridges, or such other amount as may be required by the Bond Resolution; 3. The amount of deposits to any funds and accounts required by the Bond Resolution and allocable to the Loading Bridges; 4. Any other Airport Expense reasonably allocable to the Loading Bridges not included in Paragraphs (1) through (3) above; and 5. An amount equal to any deficit or credit estimated for operation of the Loading Bridges during the then- current Fiscal Year or any adjustment carried over from preceding Fiscal Years to reflect any difference between actual versus estimated expenses. The Loading Bridge Use Fee rate per Loading Bridge shall be calculated by dividing the Loading Bridge Use Fee calculated in accordance with paragraph (1) to (5) above by the number of Loading Bridges. An Airline's Loading Bridge Use Fee shall then be calculated by multiplying the Loading Bridge Use Fee rate per Loading Bridge by the number of Loading Bridges assigned to Airline. In the event of multiple users the fee will be allocable to all users on a per use basis. Calculation of Aircraft Parking Position Fee The Aircraft Parking Position fee shall be adjusted annually in the following manner: Each year the Aviation Commission shall calculate the Apron Area fee for the succeeding Fiscal Year by totaling the following amounts, as set forth in the Annual Budget: 1. The total of the direct and indirect Operation and Maintenance Expenses allocable to the Apron Area. 2. An amount equal to 1.25 times the pro rata portion of the Annual Debt Service allocated to the Apron Area net of available PFC proceeds, if any, authorized for the payment of a portion of Apron Area Annual Debt Service and Coverage; 3. The amount of deposits to any funds and accounts required by the Bond Resolution and allocable to the Apron Area; 4. Any other Airport Expense reasonably allocable to the Apron Area not included in Paragraphs (1) through (3) above; and 5. An amount equal to any deficit or credit estimated for operation of the Apron Area during the then - current Fiscal Year or any adjustment carried over from preceding Fiscal Years to reflect any difference between actual versus estimated expenses. The sum of the expenses identified in (1) to (5) above equals the Apron Area Requirement. The Aircraft Parking Positions fee shall then be calculated by dividing the Apron Area Requirement by the number of Aircraft Parking Positions at the Terminal Building. An Airline's Aircraft Parking Position fee shall then be calculated by multiplying the total number of Aircraft Parking Positions assigned to and used by Airline times the Apron Area Rental Rate per Aircraft Gate. Should Airline stop providing Air Transportation at the Airport during any Fiscal Year, the Aircraft Parking Positions fee shall be recalculated for the portion of the Fiscal Year that Airline did conduct regularly scheduled Air Transportation at the Airport. The recalculation will be based on the Aircraft Parking Positions Requirement being calculated without a Competitive Credit. Airline agrees to repay the Aviation Commission the amount of recalculated Aircraft Parking Positions fees minus any Aircraft Parking Positions fee payments made during that Fiscal Year. Airline agrees to pay this amount to the Aviation Commission within thirty (30) days of receipt of an invoice from the Aviation Commission. Should Airline use an Aviation Commission Aircraft Parking Position at the Terminal Building, Airline shall pay the Aviation Commission $75 per aircraft per turn (or per two hour period during which Airline's aircraft occupies an Aviation Commission Aircraft Parking Position). However, for Airline's aircraft parked at an Aviation Commission Aircraft Parking Position overnight, the Airline will pay the Aviation Commission $150 for the Remain C -9 Overnight fee (RON) in addition to the per turn fee. Over the term of the Agreement, these rates are subject to adjustment based on increasing cost of operating and maintaining Aviation Commission Aircraft Parking Positions. Calculation of Landing Fee Rate A. Each Fiscal Year, the Aviation Commission shall recalculate the Landing Fee Rate for the Fiscal Year commencing January 1st, and for each succeeding Fiscal Year, based upon the Aviation Commission's proposed Annual Budget for the succeeding Fiscal Year by totaling the following estimated amounts: 1. The total of the direct and indirect estimated Operation and Maintenance Expenses of the Airfield Area; 2. An amount equal to the Airfield Area Annual Debt Service (plus Coverage), to pay debt service allocable to the Airfield Area, or such other amount as may be required by the Bond Resolution; 3. The amount of deposits to any funds and accounts required by the Bond Resolution and allocable to the Airfield Area; 4. Any other Airport Expense allocable to the Airfield Area not included in Paragraphs (1) through (3) above; and any overpayment or underpayment estimated for operation of the Airfield Area during the then - current Fiscal Year, or any adjustment carried over from the preceding Fiscal Year, to reflect any difference between actual versus estimated revenues or expenses; and 5. Any other Airfield Area expense not included in Paragraphs (1) to (5) above B. The Airfield Area Requirement for the succeeding Fiscal Year shall be calculated by subtracting from total Airport Expense the total of (1) to (5) above a Competitive Credit in an amount determined appropriate by the Aviation Commission each Fiscal Year. The purpose of the Competitive Credit is to keep the Airline's Airport cost per enplane passenger competitive with other airports similarly situated. The Aviation Commission may establish differing levels of Competitive Credit for different classes of airlines. 1. The Landing Fee Rate for the succeeding Fiscal Year shall be calculated by dividing the net Airfield Area Requirement computed above by the estimated Total Landed Weight of all Aircraft Arrivals at the Airport for the succeeding Fiscal Year as estimated by the Aviation Commission. 2. The Landing Fee shall be calculated by multiplying the Airline's portion of Total Landed Weight for the month by the Landing Fee Rate then in effect. 3. The Landing Fee is payable monthly. Subordination to Bond Resolution The Agreement and all rights of Airline under the Agreement are expressly subordinated and subject to the lien and provisions of any pledge, transfer, hypothecation, or assignment made (at any time) by the Aviation Commission to secure Bond financing. The Agreement is subject and subordinate to the terms, covenants, and conditions of the Bond Resolution authorizing the issuance of Bonds by Augusta- Richmond County. Augusta- Richmond County may amend or modify the Bond Resolution or make any change thereto that does not adversely affect Airline rights or obligations under the Agreement. Except for the preceding sentence, conflicts between the Agreement and the Bond Resolution shall be resolved in favor of the Bond Resolution. All definitional terms that are not specifically defined herein are to have the meanings set forth in the Bond Resolution. Capital Improvements Capital Improvement(s) or acquisition(s) paid for, financed, or refinanced with debt which negatively impacts rates and charges will be subject to the provisions described below under the subheading "Improvements Subject to Signatory Airline Consideration." Improvements Subject to Signatory Airline Consideration The Airport Director shall notify Airline, in writing, of the Aviation Commission's intent to undertake Capital Improvements or make an acquisition with newly issued Bonds. The Airport Director shall provide Airline with the following information associated therewith: C4hil 1. A description of the proposed Capital Improvement(s), or acquisition together with cost estimates, scheduling, and any preliminary drawings, if applicable; 2. A statement of the need for the proposed acquisition(s) or Capital Improvement(s), along with the planned benefits to be derived from such expenditures; 3. The Aviation Commission's preferred means of financing or paying the costs of the proposed acquisition or Capital Improvement(s); 4. The planned allocation of the costs thereof to the Airfield Area or the Terminal Building and the projected effect on Airline Rentals and Fees; and 5. The planned refinancing of prior improvements or acquisitions where applicable to Mll consideration. Within thirty (30) days after the Airport Director's delivery of said notice, Airline may request in writing, a meeting with the Airport Director for the purpose of discussing proposed acquisition or Capital Improvement(s). Should such a request be made, the Airport Director shall meet with Signatory Airlines collectively within sixty (60) days of the original notice. The Aviation Commission agrees to consider comments and recommendations of the Signatory Airlines with respect to proposed acquisition or Capital Improvements) to be financed with newly issued Bonds. Unless Signatory Airlines constituting an MII shall issue written disapprovals for a particular Capital Improvement in the Airfield Area (for those Capital Improvements in the Airfield Area requiring MII consideration) or for a Capital Improvement in the Terminal Building (for those Capital Improvements in the Terminal Building requiring Mll consideration) within thirty (30) days of the date of the meeting, the Aviation Commission may proceed with said acquisition or Capital Improvements. The Aviation Commission may also proceed at any time with acquisition or Capital Improvements not requiring Mll consideration, and with any other improvements or developments not defined as a Capital Improvement herein. In the event of MII disapproval of a proposed acquisition or Capital Improvement subject to MII consideration, the Airport Director shall have the option to convene a second meeting with the Signatory Airlines within forty -five (45) days following the date of disapproval for the purpose of providing additional information relative to the proposed acquisition or Capital Improvement and to request reconsideration. If, after the second meeting, Signatory Airlines constituting an MIl notify the Aviation Commission that they do not concur with said acquisition or Capital Improvement(s), the acquisition or Capital Improvement(s) shall be deferred for two (2) years. In such ensuing timeline, the Aviation Commission may implement such Capital Improvement(s) and include, debt service (including coverage), or loan payments for such Capital Improvement(s) in the Rentals and Fees of the Signatory Airlines, The Aviation Commission may elect to move forward with said acquisition or Capital Improvement(s) through means other than issuing new Airport Revenue Bonds. Disapproval of an acquisition or Capital Improvement may be reversed by an MII at any time. Augusta- Richmond County or its Aviation Commission may issue Bonds, Subordinate Lien Bonds, or Other Indebtedness to finance any acquisition or Capital Improvements permitted under the Agreement. All costs associated with an acquisition or Capital Improvements permitted by under the Agreement, including but not limited to Operation and Maintenance Expenses (including appropriate reserves therefore) and capital charges, except as may be limited by the Agreement, shall be included in the determination of rates for Rentals and Fees. Obligations of Airline Maintenance and Repair. The Airline has undertaken certain maintenance and repair obligations with respect to portions of the Terminal Building and the Apron Area, including keeping those areas clean, safe and in working order. Ownership of Improvements. Upon completion or installation of any fixture, addition, or improvement on the Terminal Building, excluding Personal Property, such fixture, addition, or improvement shall immediately become the property of the Aviation Commission, as owner, subject only to the right of Airline to use same as set forth in the Agreement, and shall remain the property of the Aviation Commission thereafter with the sole right, title, and interest thereto. Liens. Airline shall cause to be removed promptly any and all liens of any nature arising out of or because of any construction performed by Airline or any of its contractors or subcontractors upon the Terminal Building or arising out of or because of the performance of any work or labor by or for it or them at said premises, reserving the right to contest in court the validity of any such liens. Airline shall have the right to post an appropriate bond to cover these obligations. ME If any person or corporation attempts to assert any lien against the Terminal Building for improvements made by Airline, Airline shall hold the Aviation Commission harmless from such claim, including the cost of defense. Payment of Taxes. Airline shall pay (but such payment shall not be considered part of Airport Revenue) all lawful taxes, assessments, or charges (including any sales taxes imposed on Rentals and Fees paid by Airline) imposed by entities other than the Aviation Commission that, during the term of the Agreement, may become a lien or be levied on any interest in Airline's Leased Premises or any possessory right that Airline might have in or to said premises or any improvements thereof, by reason of its use or occupation thereof or otherwise, reserving to Airline, however, the right to contest, by administrative proceeding, court or otherwise, the validity or applicability of any such tax, assessment, or charge. Rules and Regulations. Airline shall not use or permit to be used any Airport facilities for any purposes or uses other than those specifically authorized by the Agreement, and such other purposes or uses as may be mutually agreed upon in writing. Airline shall comply with and shall require its officers and employees and any other persons over whom it has control to comply with such reasonable and nondiscriminatory Rules and Regulations governing the use of Airport facilities pursuant to the Agreement as may from time to time be adopted and promulgated by the Aviation Commission, including, but not limited to, security, health, safety, sanitation, and good order, and with such amendments, revisions, or extensions thereof as may from time to time be adopted and promulgated by the Aviation Commission. The Executive Director will provide a copy of the initial Rules and Regulations to Airline within thirty (30) days of the date of the Agreement. Airline's right of access to the Airport shall be subject to security considerations and all federal, State, and local laws or regulations and all Airport rules, regulations, and ordinances now in effect or hereinafter adopted or promulgated. Airline shall, at all times, comply with any and all present and future laws, ordinances, and general rules or regulations of any public or governmental entity (other than the Airport Commission) with jurisdiction pertaining to its operations at the Airport now or at any time during the term that the Agreement is in force. Obligations of Aviation Commission The Aviation Commission covenants and agrees that, at all times, relevant to the Agreement, it will operate and maintain the Airport facilities, as defined in the Agreement, as a public airport consistent with and pursuant to the Sponsor's Grant Assurances given by the Aviation Commission to the U.S. Government under the Federal Airport Act and consistent with the terms and conditions of the Agreement. The Aviation Commission further covenants and agrees to manage the Airport in a reasonable and prudent manner and to use due diligence in the operation and maintenance of Airport facilities. Access to Terminal Buildings. Subject to security considerations, upon payment of the rentals and performance of the covenants of the Agreement by Airline, Airline and its officers, employees, passengers, prospective passengers, and other persons with Airline shall have (without additional charge) the free, unobstructed right of ingress to and egress from the Terminal Building by means of a lobby, passageway, or other Public Areas designated by the Aviation Commission for that purpose and connecting the Terminal Building with a vehicular roadway and walkways adjacent to the Terminal Building (and provided and maintained by the Aviation Commission and connecting with a public street or other public highway outside the Airport), and with the Apron Area adjacent to the Terminal Building. Use of Other Public Areas. The officers, employees, passengers, and prospective passengers of Airline and other persons doing business with Airline shall have the right to use any space, facilities, and conveniences provided by the Aviation Commission at the Airport for use by airline passengers and other persons (including waiting rooms, lobbies, hallways, corridors, restaurants, restrooms, observation galleries, streets, highways, and vehicular parking areas), in each case, however, only in common with others authorized by the Aviation Commission to do so, at the times, to the extent, in the manner, and for the purposes for which they are made available for such use, in compliance with the terms and conditions on which they are made available for such use, and only in conformity with the Rules and Regulations with respect to the use thereof. Aviation Commission's Reservations The Aviation Commission, at its sole discretion, reserves the right to further develop or improve the aircraft operating area and other portions of the Airport, including the right to improve, relocate, or remove any structure on the Airport, as it sees fit, and to take any action it considers necessary to protect the aerial approaches of the Airport against obstructions in accordance with 14 CFR Part 77 as it is presently set forth or as it may be amended from time C -12 to time. The Aviation Commission has reserved certain rights of entry on the Airline's Leased Premises for inspection and repair purposes as set forth in the Agreement. Airport Access LicenselPermit. The Aviation Commission reserves the right to establish a licensing or permit procedure for personnel and vehicles requiring access to the Airport operational areas and to levy a reasonable regulatory or administrative charge for issuance of such Airport access license or permit. Airline shall pay such charge with regard to its own personnel or vehicles and shall, at the request of the Executive Director, cooperate in the collection of such charge with regard to any personnel or vehicles used by its suppliers. Any such charge shall not exceed an amount necessary to cover the actual regulatory or administrative expenses of such control measures. Airline Employee Parking. The Executive Director may designate areas from time to time to be used for parking automobiles by Airline's employees (including handicapped or disabled employees) working at the Airport. The Aviation Commission shall have the right to charge a reasonable fee for such privilege. Damage or Destruction Damage or Destruction of Terminal Building. If, by reason of any cause, the Terminal Building is damaged to such an extent that the Terminal Building is untenantable in whole, or in substantial part, then, if the repairs and rebuilding necessary to restore the Terminal Building to its condition before the occurrence of the damage can, in the reasonable judgment of the Aviation Commission, be completed within two hundred and seventy (270) days from the date on which the damage occurred, the Executive Director shall so notify Airline, in writing, and shall proceed promptly with such repairs and rebuilding. In such event, the rental for the Terminal Building shall be abated pro rata for the period from the date of the occurrence of such damage to the date on which such repairs and rebuilding is completed. If such repairs and rebuilding cannot, in the reasonable judgment of the Aviation Commission, be completed within said 270 days, the Aviation Commission, at its option, to be evidenced by notice in writing to Airline, may either: (1) proceed promptly with said repairs and rebuilding, in which event said rental shall be abated as aforesaid, or (2) terminate the letting of the Terminal Building, in which event said rental shall be abated from and after the date of occurrence of the damage. The Aviation Commission shall use its best efforts to provide Airline with reasonable alternate space, if necessary, during any repairs, rebuilding, or reconstruction of the Terminal Building. The Executive Director shall advise Airline, as soon as practicable, of the Aviation Commission's intention regarding any necessary repairs or restorations. In the event, however, that the cause of the damage is the fault or negligence or wrongful act of Airline or its employees or agents, then the expense of all such repairs shall be borne by Airline and there shall be no abatement of rent or other charges payable under the Agreement. Insurance During the term of the Agreement, Airline shall provide, pay for, and maintain with companies reasonably satisfactory to the Aviation Commission, the types of insurance described in the Agreement. All liability policies of Airline and its contractors shall provide that the Aviation Commission is an Additional Insured to the extent of Airline's contractual obligations under the Agreement. Prior to expiration of any policy of insurance, Airline shall deliver to Airport evidence showing that such insurance coverage has been renewed. All required insurance coverages of Airline shall be primary to any insurance or self - insurance program of the Aviation Commission. Airline and the Aviation Commission agree that the minimum limits of the insurance required under the Agreement may, from time to time, become inadequate, and Airline agrees that it will increase such minimum limits upon receipt of written notice defining the basis of the increase. Airline shall furnish the Aviation Commission, within sixty (60) days of the effective date thereof, a certificate of insurance evidencing that such insurance is in force. Airline's insurance companies or its authorized representative shall give the Aviation Commission thirty (30) days prior written notice of any cancellation, intent not to renew, or material reduction in any policy's coverage, except in the application of the Aggregate Limit Provisions. In the event of a reduction to the Aggregate Limit, it is agreed that immediate steps will be taken to have the prior Aggregate Limit reinstated. Should at any time Airline not provide or maintain the insurance coverages required under the Agreement, the Aviation Commission may terminate or suspend the Agreement upon ten (10) days advance written notice to the Airline's Facility Manager and to Airline's Leasing contact. The amounts and types of insurance shall conform to the following minimum requirements with the use policies, forms, and endorsements or broader, where applicable. C -13 I. Workers compensation and Employer's Liability Insurance shall be maintained in force by Airline during the term of the Agreement for all employees engaged in the operations under the Agreement. The limits of coverage shall not be less than: Workers' Compensation Georgia Statutory Employer's Liability $1,000,000 Limit Each Accident $1,000,000 Limit Disease Aggregate $1,000,000 Limit Disease Each Employee 2. Airport Liability Insurance shall be maintained by Airline for the life of the Agreement. Coverage shall include, but not be limited to, Premises and Operations, Personal Injury, Contractual for the Agreement, Independent Contractors, Broad Form Property Damage, Products, and Completed Operations Coverage and shall not exclude the Explosion, Collapse, and Underground Property Damage Liability Coverage. Coverage shall be applicable to the operation of all mobile and ground equipment at the Airport. The limits of coverage shall not be less than: Airlines Operating Aircraft with fifty (50) or more seats: Bodily & Personal Injury $100,000,000 Combined Single Limit & Property Damage Liability Each Occurrence & Aggregate Airlines Operating Aircraft with less than fifty (50) seats: Bodily & Personal Injury $50,000,000 Combined Single Limit & Property Damage Liability Each Occurrence & Aggregate 3. Aircraft Liability Insurance shall be maintained by Airline during the term of the Agreement for all owned, non - owned, leased, or hired aircraft, including passenger coverage. The limits of coverage shall not be less than: Bodily & Personal Injury $100,000,000 Combined Single Limit & Property Damage Liability Each Occurrence & Aggregate 4. Business Automobile Liability Insurance shall be maintained by Airline during the term of the Agreement as to the ownership, maintenance, and use of all owned, non - owned, leased, or hired vehicles. The limits of coverage shall not be less than: Bodily & Personal Injury $5,000,000 Combined Single Limit & Property Damage Liability Each Occurrence & Aggregate 5. Umbrella Liability Insurance or Excess Liability Insurance may be used to reach the limits of liability required for the Airport Liability Policy, Aircraft Liability, and the Business Automobile Policy. The limits of coverage shall not be less than: Umbrella or Excess Liability Policy $100,000,000 Combined Single Limit Each Occurrence & Aggregate - Specific for the Agreement $200,000,000 Combined Single Limit Each Occurrence & Aggregate -Not Specific for the Agreement Primary Liability Limits for the underlying Airport General Liability Coverage: Bodily & Personal Injury & Property Damage Liability Indemnification $10,000,000 Combined Single Limit Each Occurrence & Aggregate Except where, and to the extent, it is caused by the negligent or wrongful acts or omissions or willful misconduct of the agents, employees, contractors, officers, or board of Augusta Richmond County and the Aviation Commission, Airline agrees to protect, defend, reimburse, indemnify, and hold Augusta Richmond County and the Aviation Commission, its agents, employees, and elected officers and each of them, free and harmless at all times from and against any and all claims, liability, expenses, losses, costs, fines, and damages (including actually incurred reasonable attorney's fees) and causes of action of every kind and character, whether or not meritorious, against or C -14 from the Aviation Commission by reason of any damage to property, or the environment, claims and liability which is in or bodily injury (including death) incurred or sustained by any party hereto, any agent or employee of any party hereto, and any third or other party whomsoever, or any governmental agency, caused by or arising out of or incident to or in connection with Airline's performance under the Agreement, Airline's use or occupancy of the Airline Leased Premises, Airline's compliance with Title 49 CFR, Part 1542 requirements, Airline's negligent or wrongful acts, omissions, or operations under the Agreement or the performance, non - performance or purported performance of Airline or any breach of the terms of the Agreement by Airline. Environmental Conditions Airline shall not cause or permit any Hazardous Materials hereinafter to be placed, stored, generated, used, released, or disposed of in, on, under, about, or transported from any Airport premises by Airline, its agents, employees, contractors, or other person except in compliance with applicable Environmental Laws (as hereinafter defined). Any cost of remediating liabilities legally imposed on the Airport by the EPA directly caused by Airline's operations at the Airport will be additional rent under the Agreement. Airline shall comply, and shall at all times ensure that all Airport premises occupied by it are kept in compliance, with all applicable federal, State of Georgia, and local laws, ordinances, regulations, guidelines, and orders relating to health, safety and protection of persons, the public, and/or the environment with respect to Hazardous Materials (collectively "Environmental Laws "). Airline shall furnish upon the reasonable request of the Executive Director, all non - privileged reports, assessments, or other documents satisfactory to the Aviation Commission showing that no Airport premises occupied by Airline are being used nor have been used by Airline for any activities involving, directly or indirectly, the use, generation, treatment, storage, or disposal of any Hazardous Materials in violation of applicable Environmental Laws Termination By Airline. Airline, at its option, may declare the Agreement terminated in its entirety at any time Airline is not in default in the payment of Rentals and Fees to the Aviation Commission by giving the Aviation Commission sixty (60) days advance written notice, to be served as hereinafter provided, and by surrender of the Leased Premises on the happening of any one or more of the following events: 1. If the Terminal Building becomes untenantable in whole, or in substantial part, and the Aviation Commission does not terminate the letting thereof, pursuant to an option reserved to it in the Agreement, and does not proceed as promptly as reasonably practicable with the repairs and rebuilding necessary to restore the Terminal Building to its condition before the occurrence of the damage. 2. If the Aviation Commission fails to provide and maintain means for unobstructed ingress and egress to and from the Terminal Building in accordance with the provisions of the Agreement. 3. If the Aviation Commission closes the Airport to aircraft operations in general, or to the flights of Airline for reasons other than weather, acts of God, or other reasons beyond the Aviation Commission's control, and fails to reopen the Airport to such operations or flights for a period in excess of thirty (30) days. 4. If the Aviation Commission fails to comply with any of the terms or provisions of the Agreement or fails to promptly fulfill any of its obligations under the Agreement. No termination declared by Airline shall be effective unless and until not less than sixty (60) days have elapsed after the aforementioned written notice to the Aviation Commission specifying the date on which such termination shall take effect and the cause for which it is being terminated. The Aviation Commission may cure the cause of such termination within said 60 -day period or such longer time as the parties may agree. Notwithstanding the occurrence of any event of default, Airline shall remain liable to the Aviation Commission for all Rentals and Fees payable under the Agreement and for all preceding breaches of any covenant of the Agreement. Furthermore, unless the Aviation Commission elects to cancel the Agreement, Airline shall remain liable for and promptly pay all Rentals and Fees accruing under the Agreement until the term of the Agreement has expired or until the Agreement is terminated by Airline as described above. By Aviation Commission. The Aviation Commission, at its option, may declare the Agreement terminated on the happening of any one or more of the following events, and may exercise all rights of entry and re -entry to the Terminal Building: 1. If the Rentals and Fees, or other money payments that Airline agrees to pay, or any part thereof, shall be unpaid on the date by which payment is required to be made the same shall become due. C -15 2. If Airline files a voluntary petition in bankruptcy, or makes a general assignment for the benefit of creditors, or if Airline is adjudicated as bankrupt. 3. The taking of jurisdiction of Airline or its assets by a court of competent jurisdiction pursuant to proceedings brought under the provisions of any federal reorganization act. 4. The appointment of a receiver or a trustee of Airline's assets by a court of competent jurisdiction or a voluntary agreement with Airline's creditors and the same is not removed in ninety (90) days. 5. If any act occurs that deprives Airline permanently of the rights, powers, and privileges necessary for the proper conduct and operation of its Air Transportation business. 6. If Airline abandons and fails to use the Terminal Building for a period of thirty (30) days at any one time, except when arising out of or related to force majeure event as described in the Agreement. 7. If Airline uses or permits the use of its Leased Premises in the Terminal Building at any time for any purpose for which the use thereof at that time is not authorized by the Agreement, or by a subsequent written agreement between the parties, or permits the use thereof in violation of any law, rule, or regulation with which Airline has agreed in the Agreement to conform. 8. If Airline discontinues Air Transportation to the Airport as a consequence of Airline's filing of a bankruptcy petition, voluntary or involuntary, seeking a reorganization or readjustment of its indebtedness under the federal bankruptcy laws or under any other statute of the United States or any state thereof, or being adjudged bankrupt, Airline shall be deemed to have forfeited its leasehold space. 9. If Airline fails to operate at least weekly scheduled passenger service departures from the Airport, for a period of ninety (90) days or more (except when arising out of or related to a force majeure event). 10. If Airline is in violation of any provision of the Agreement not cured within a sixty (60) day period as specified in the following paragraph. No termination declared by the Aviation Commission shall be effective unless and until at least sixty (60) days have elapsed after written notice to Airline specifying the date upon which such termination shall take effect and the cause for which it is being terminated. Notwithstanding such default, no termination shall occur if Airline cures the default within said sixty (60) day period; provided that if cure would reasonably require a longer time to cure, the Airline may take such additional time to cure, as agreed upon by the parties, as long as Airline commences to cure within the original sixty (60) day period and diligently pursues a cure. Possession by Aviation Commission In any of the termination events described under the subheading "Termination" herein, the Aviation Commission may take possession of Airline's Leased Premises upon termination of the Agreement and remove Airline's effects without being deemed guilty of trespassing. On said default, after expiration of any applicable cure period, the Aviation Commission shall have and reserve all of its available remedies at law as a result of said breach of the Agreement. Failure of the Aviation Commission to declare the Agreement terminated on default of Airline for any of the reasons set forth in the Agreement shall not operate to bar, destroy, or waive the right of the Aviation Commission to cancel the Agreement by reason of any subsequent violation of the terms of the Agreement. Rights on Termination or Reassignment Any leasehold improvements and any alterations shall be and remain the property of the Aviation Commission during the entire term of the Agreement and thereafter. On termination of the Agreement, Airline shall remove all Personal Property and leasehold improvements from its Leased Premises within thirty (30) days after said termination and restore the Leased Premises to their original condition, ordinary wear and tear excepted. If Airline fails to remove said Personal Property or leasehold improvements, the Aviation Commission may thereafter remove said property at Airline's expense. Assignment Airline shall not assign or transfer the Agreement or any right or leasehold interests granted to it by the Agreement or otherwise transfer any interest in or to the Terminal Building without the prior written approval of the Executive Director. Such approval shall not be unreasonably withheld. The Aviation Commission expressly reserves the right to withhold approval of a proposed assignment of any ticket counter space, office area space, baggage makeup space, airline operations space, or hold room space with associated aircraft parking position(s) if any other such space is vacant and available for lease and/or use on a per -use basis. RM Governmental Agreements The Agreement shall be subordinate to the provisions of any existing or future agreements between the Aviation Commission and the United States Government or other governmental authority, relative to the operation or maintenance of the Airport, the execution of which has been or will be required as a condition precedent to the granting of federal or other governmental funds for the development of the Airport, to the extent that the provisions of any such existing or future agreements are generally required by the United States or other governmental authority of other civil airports receiving such funds. The Aviation Commission agrees to provide Airline written advance notice of any provisions that would adversely modify the material terms of the Agreement. Agreements between the Aviation Commission and Other Airlines The Aviation Commission agrees not to enter into any scheduled airline operating agreement and terminal building lease with any other airline conducting similar operations at the Airport after the date of the Agreement that contains more favorable Rentals and Fees and other terms and conditions than those provided in the Agreement. The above notwithstanding, the Aviation Commission reserves the right to offer incentives, in any form, including the abatement of rentals and fees for a period of time, to airlines offering new air services, subject to and in compliance with, all Federal Grant Assurances, the FAA's Revenue Use Policy and applicable laws. Said incentives may provide an airline offering new air service more favorable terms, conditions, rentals, and fees for an initial period of time. Airline shall not be required to recompense the Aviation Commission for financial shortfalls, if any, caused by the offering of incentives. RM This page intentionally left blank. APPENDIX D FORMS OF LEGAL OPINIONS The forms of Legal Opinions included as this Appendix D have been prepared by Murray Barnes Finister LLP, Atlanta, Georgia, Bond Counsel, and are substantially the forms to be given in connection with the delivery of the Series 2015 Bonds. lRemainder of Page Intentionally Left Blank) This page intentionally left blank. TO • • • • • 3525 PIEDMONT ROAD - 5 PIEDMONT CENTER - SUITE 515 - ATLANTA, GEORGIA 30305 September _, 2015 Augusta- Richmond County Commission Augusta, Georgia Augusta Aviation Commission Augusta, Georgia Raymond James & Associates, Inc. Atlanta, Georgia Re: $ Augusta, Georgia Airport General Revenue Refunding Bonds, Series 2015A (Non -AMT) To the Addressees: We have acted as Bond Counsel to Augusta, Georgia (the "Consolidated Government ") in connection with the execution and delivery of $ in aggregate principal amount of its Airport General Revenue Refunding Bonds, Series 2015A (Non -AMT) (the "Series 2015A Bonds "). The Series 2015A Bonds are being issued pursuant to the Constitution and laws of the State of Georgia, including in particular the Revenue Bond Law of the State of Georgia (O.C.G.A. Section 36 -82 -60 et seq., as amended) (the "Revenue Bond Law ") and a Master Bond Resolution adopted by the Augusta- Richmond County Commission and the Augusta Aviation Commission (the "Aviation Commission ") on September 1, 2015 (the "Bond Resolution "). In connection with the issuance of the Series 2015A Bonds, we have examined the law and such certified proceedings, including a certified copy of the transcript of the validation proceeding concluded in the Superior Court of Richmond County, Georgia, and other documents as we have deemed necessary to render this opinion. In all such examinations, we have assumed the genuineness of signatures on original documents and the conformity to original documents of all copies submitted to us as certified, conformed or photographic copies, and as to certificates of public officials, we have assumed the same to have been properly given and to be accurate. The Series 2015A Bonds mature, bear interest and are subject to exchange, transfer and redemption at the times, in the manner and on the terms, and contain such other terms and conditions, as set forth in the Bond Resolution. All capitalized terms used but not otherwise defined herein shall have the meanings assigned thereto in the Bond Resolution. TELEPHONE: (678)999-0,450 - FACSIMILE: (678) 999 -0357 0 INTERNE'r: www.murraybarneslaw.com September _, 2015 Page 2 The proceeds from the sale of the Series 2015A Bonds, together with other available moneys, will be used for the purpose of (a) refunding all of the Augusta, Georgia Airport Passenger Facility Charge and General Revenue Bonds, Series 2005A (Non -AMT) currently outstanding in the aggregate principal amount of $8,990,000 (the "Refunded Bonds ") and (b) paying the costs of issuance of the Series 2015A Bonds. Concurrently with the issuance and delivery of the Series 2015A Bonds, the Consolidated Government will issue $ in aggregate principal amount of Augusta, Georgia Airport General Revenue Refunding Bonds, Series 2015B (AMT) (the "Series 2015B Bonds" and, together with the Series 2015A Bonds, the "Series 2015 Bonds ") pursuant to the Bond Resolution. The Series 2015 Bonds, when issued, will be the only bonds outstanding under the Bond Resolution. The Series 2015A Bonds are payable from and secured by a pledge of and first lien on the Net General Revenues of the Airport and Pledged PFC Revenues of the Airport on deposit in the Pledged PFC Series 2015A Account. The Series 2015A Bonds will be equally and ratably secured on a parity basis as to lien on the Net General Revenues with the Series 2015B Bonds. The Consolidated Government has reserved the right, under certain terms and conditions, to issue additional parity bonds ( "Additional Bonds ") pursuant to the Bond Resolution payable from and secured by a lien on the Net General Revenues of the Airport on parity with the lien thereon securing the Series 2015 Bonds. The Series 2015A Bonds constitute limited obligations of the Consolidated Government and are payable solely from the Net General Revenues of the Airport and Pledged PFC Revenues of the Airport on deposit in the Pledged PFC Series 2015A Account. Neither the general credit nor the taxing power of the State of Georgia or any political subdivision thereof, including the Consolidated Government, is pledged for the payment of the Series 2015A Bonds. The Series 2015A Bonds will not constitute a debt of the State of Georgia or any political subdivision of the State of Georgia, including the Consolidated Government, within the meaning of any constitutional or statutory debt limitation. A portion of the proceeds derived from the sale of the Series 2015A Bonds, together with other available moneys, is being deposited in trust, simultaneously with the issuance and delivery of the Series 2015A Bonds, into a special segregated account designated as the "2005 Defeasance Account' with U.S. Bank National Association, as Bond Registrar and Paying Agent for the Refunded Bonds, which amounts will be held uninvested and will be used to pay the principal of and interest on the Refunded Bonds on the October 2, 2015 redemption date (the "Redemption Date "), all as provided in the Bond Resolution. As to the sufficiency of moneys held in trust in the 2005 Defeasance Account to provide money sufficient to pay the interest on and principal of the Refunded Bonds on the Redemption Date we express no opinion, and have relied on calculations prepared by Public Financial Management, Inc., financial advisor to the Consolidated Government. As to questions of fact material to our opinion, we have relied upon (a) representations of the Consolidated Government and the Aviation Commission (b) certified proceedings and other certifications of public officials furnished to us, and (c) representations and certifications of the Consolidated Government and the Aviation Commission relating to the September _, 2015 Page 3 use of the proceeds of the Series 2015A Bonds and the Refunded Bonds and the design, scope, function, use, cost and economic useful life of the facilities refinanced by the Refunded Bonds, without undertaking to verify the same by independent investigation. In our capacity as Bond Counsel, we express no opinion (a) with respect to the accuracy, completeness or sufficiency of the Preliminary Official Statement, dated August _, 2015 or the Official Statement, dated September _, 2015, related to the Series 2015 Bonds or (b) as to compliance by the Consolidated Government or the initial purchasers of the Series 2015A Bonds with any federal or state statute, regulation or ruling with respect to the sale or distribution of the Series 2015A Bonds. The Series 2015 Bonds will be treated as a single issue of bonds for most purposes under the Internal Revenue Code of 1986, as amended (the "Code "), and the exclusion from gross income for federal income tax purposes of the interest on each series of the Series 2015 Bonds may be dependent upon whether the interest on the other series of the Series 2015 Bonds is excluded from gross income for federal income tax purposes. On the date of this opinion, we are delivering an opinion with respect to the Series 2015E Bonds to the effect that based on assumptions substantially to the same effect as the assumptions on which this opinion is based, the interest on the Series 2015B Bonds is excluded from gross income for federal income tax purposes. Based upon the examinations, opinions and provisions referred to above, we are of the opinion, as of the date hereof and under existing law, as follows: 1. The Consolidated Government is a political subdivision of the State of Georgia with the power and authority under the laws and Constitution of the State of Georgia, and in particular the Revenue Bond Law, to (a) adopt the Bond Resolution and perform its obligations thereunder and (b) issue, execute, deliver and perform its obligations under the Series 2015A Bonds. 2. The Bond Resolution has been duly adopted by the Consolidated Government and constitutes the legal, valid and binding obligation of the Consolidated Government, enforceable against the Consolidated Government in accordance with its terms. The Bond Resolution creates a valid lien on the Net General Revenues of the Airport for the security of the Series 2015A Bonds, the Series 2015B Bonds and any Additional Bonds hereafter issued. The Bond Resolution creates a valid lien on the Pledged PFC Revenues of the Airport on deposit in the Pledged PFC Series 2015A Account of the Airport. 3. The Series 2015A Bonds have been duly authorized, executed and delivered by the Consolidated Government and constitute the legal, valid and binding limited obligations of the Consolidated Government, enforceable against the Consolidated Government in accordance with their terms. September _, 2015 Page 4 4. The Bond Resolution and the Series 2015A Bonds have been duly validated by the Superior Court of Richmond County. 5. The interest on the Series 2015A Bonds (including any original issue discount properly allocable to a holder thereof) is not includable in 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. The opinions set forth in the immediately preceding sentence are subject to the condition that the Consolidated Government and the Aviation Commission comply with all requirements of the Code that must be satisfied subsequent to the issuance of the Series 2015A Bonds in order that the interest on the Series 2015A Bonds be and continue to be excluded from gross income for federal income tax purposes. The Consolidated Government and the Aviation Commission have covenanted to comply with such requirements. Failure to comply with such covenants could cause interest on the Series 2015A Bonds to be included in federal gross income retroactive to the date of issuance of the Series 2015A Bonds. We express no opinion regarding any other federal tax consequences caused by the receipt or accrual of interest on the Series 2015A Bonds. 6. The interest on the Series 2015A Bonds is exempt from all present State of Georgia income taxes. The rights of the owners of the Series 2015A Bonds and the enforceability of the Series 2015A Bonds and the Bond Resolution may be subject to bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting creditors' rights heretofore or hereafter enacted to the extent constitutionally applicable and their enforcement may also be subject to the exercise of judicial discretion in appropriate cases. September _, 2015 Page 5 We are members of the State Bar of Georgia. Our opinions herein are limited to the laws of the State of Georgia and any applicable federal laws of the United States. This opinion is limited to the matters expressly set forth above, and no opinion is implied or may be inferred beyond the matters so stated. This opinion is intended solely for the use of the addressees and their permitted successors and /or assigns and may not be relied upon by any other person for any purpose without our prior written consent in each instance. We expressly disclaim any duty to update this opinion in the future for any changes of fact or law that may affect any of the opinions expressed herein. Very truly yours, MURRAY BARNES FINISTER LLP By: A Partner This page intentionally left blank. MURRAY .BARNES FINISTER LLP 3525 PIEDMONT ROAD - 5 PIEDMONT CENTER - SUITE 515 - ATLANTA, GEORGIA 30305 September _, 2015 Augusta- Richmond County Commission Augusta, Georgia Augusta Aviation Commission Augusta, Georgia Raymond James & Associates, Inc. Atlanta, Georgia Re: $ Augusta, Georgia Airport General Revenue Refunding Bonds, Series 20158 (AMT) To the Addressees: We have acted as Bond Counsel to Augusta, Georgia (the "Consolidated Government ") in connection with the execution and delivery of $ in aggregate principal amount of its Airport General Revenue Refunding Bonds, Series 2015B (AMT) (the "Series 20158 Bonds "). The Series 2015B Bonds are being issued pursuant to the Constitution and laws of the State of Georgia, including in particular the Revenue Bond Law of the State of Georgia (O.C.G.A. Section 36 -82 -60 et seq., as amended) (the "Revenue Bond Law ") and a Master Bond Resolution adopted by the Augusta - Richmond County Commission and the Augusta Aviation Commission (the "Aviation Commission ") on September 1, 2015 (the "Bond Resolution "). In connection with the issuance of the Series 2015B Bonds, we have examined the law and such certified proceedings, including a certified copy of the transcript of the validation proceeding concluded in the Superior Court of Richmond County, Georgia, and other documents as we have deemed necessary to render this opinion. In all such examinations, we have assumed the genuineness of signatures on original documents and the conformity to original documents of all copies submitted to us as certified, conformed or photographic copies, and as to certificates of public officials, we have assumed the same to have been properly given and to be accurate. The Series 20158 Bonds mature, bear interest and are subject to exchange, transfer and redemption at the times, in the manner and on the terms, and contain such other terms and conditions, as set forth in the Bond Resolution. All capitalized terms used but not otherwise defined herein shall have the meanings assigned thereto in the Bond Resolution. The proceeds from the sale of the Series 2015B Bonds, together with other available moneys, will be used for the purpose of (a) refunding all of the Augusta, Georgia TELEPHONE: (678).999-0360 - FACSIMILE: (678) 999 -0357 - INTERNFT: www.murraybarneslaw.com September _, 2015 Page 2 Airport General Revenue Bonds, Series 2005C (AMT) currently outstanding in the aggregate principal amount of $6,090,000 (the "Refunded Bonds ") and (b) paying the costs of issuance of the Series 2015B Bonds. Concurrently with the issuance and delivery of the Series 2015B Bonds, the Consolidated Government will issue $ in aggregate principal amount of Augusta, Georgia Airport General Revenue Refunding Bonds, Series 2015A (Non -AMT) (the "Series 2015A Bonds" and, together with the Series 2015B Bonds, the "Series 2015 Bonds ") pursuant to the Bond Resolution. The Series 2015 Bonds, when issued, will be the only bonds outstanding under the Bond Resolution. The Series 2015B Bonds are payable from and secured by a pledge of and first lien on the Net General Revenues of the Airport. The Series 2015B Bonds will be equally and ratably secured on a parity basis as to lien on the Net General Revenues of the Airport with the Series 2015A Bonds. The Consolidated Government has reserved the right, under certain terms and conditions, to issue additional parity bonds ( "Additional Bonds ") pursuant to the Bond Resolution payable from and secured by a lien on the Net General Revenues of the Airport on parity with the lien thereon securing the Series 2015 Bonds. The Series 2015B Bonds constitute limited obligations of the Consolidated Government and are payable solely from the Net General Revenues of the Airport. Neither the general credit nor the taxing power of the State of Georgia or any political subdivision thereof, including the Consolidated Government, is pledged for the payment of the Series 2015B Bonds. The Series 2015B Bonds will not constitute a debt of the State of Georgia or any political subdivision of the State of Georgia, including the Consolidated Government, within the meaning of any constitutional or statutory debt limitation. A portion of the proceeds derived from the sale of the Series 2015B Bonds, together with other available moneys, is being deposited in trust, simultaneously with the issuance and delivery of the Series 2015B Bonds, into a special segregated account designated as the "2005 Defeasance Account' with U.S. Bank National Association, as Bond Registrar and Paying Agent for the Refunded Bonds, which amounts will be held uninvested and will be used to pay the principal of and interest on the Refunded Bonds on the October 2, 2015 redemption date (the "Redemption Date "), all as provided in the Bond Resolution. As to the sufficiency of moneys held in trust in the 2005 Defeasance Account to provide money sufficient to pay the interest on and principal of the Refunded Bonds on the Redemption Date we express no opinion, and have relied on calculations prepared by Public Financial Management, Inc., financial advisor to the Consolidated Government. As to questions of fact material to our opinion, we have relied upon (a) representations of the Consolidated Government and the Aviation Commission (b) certified proceedings and other certifications of public officials furnished to us, and (c) representations and certifications of the Consolidated Government and the Aviation Commission relating to the use of the proceeds of the Series 2015B Bonds and the Refunded Bonds and the design, scope, function, use, cost and economic useful life of the facilities refinanced by the Refunded Bonds, without undertaking to verify the same by independent investigation. September _, 2015 Page 3 In our capacity as Bond Counsel, we express no opinion (a) with respect to the accuracy, completeness or sufficiency of the Preliminary Official Statement, dated August _, 2015 or the Official Statement, dated September _, 2015, related to the Series 2015 Bonds or (b) as to compliance by the Consolidated Government or the initial purchasers of the Series 2015B Bonds with any federal or state statute, regulation or ruling with respect to the sale or distribution of the Series 2015B Bonds. The Series 2015 Bonds will be treated as a single issue of bonds for most purposes under the Internal Revenue Code of 1986, as amended (the "Code "), and the exclusion from gross income for federal income tax purposes of the interest on each series of the Series 2015 Bonds may be dependent upon whether the interest on the other series of the Series 2015 Bonds is excluded from gross income for federal income tax purposes. On the date of this opinion, we are delivering an opinion with respect to the Series 2015A Bonds to the effect that based on assumptions substantially to the same effect as the assumptions on which this opinion is based, the interest on the Series 2015A Bonds is excluded from gross income for federal income tax purposes. Based upon the examinations, opinions and provisions referred to above, we are of the opinion, as of the date hereof and under existing law, as follows: 1. The Consolidated Government is a political subdivision of the State of Georgia with the power and authority under the laws and Constitution of the State of Georgia, and in particular the Revenue Bond Law, to (a) adopt the Bond Resolution and perform its obligations thereunder and (b) issue, execute, deliver and perform its obligations under the Series 2015E Bonds. 2. The Bond Resolution has been duly adopted by the Consolidated Government and constitutes the legal, valid and binding obligation of the Consolidated Government, enforceable against the Consolidated Government in accordance with its terms. The Bond Resolution creates a valid lien on the Net General Revenues of the Airport for the security of the Series 2015A Bonds, the Series 2015B Bonds and any Additional Bonds hereafter issued. 3. The Series 2015B Bonds have been duly authorized, executed and delivered by the Consolidated Government and constitute the legal, valid and binding limited obligations of the Consolidated Government, enforceable against the Consolidated Government in accordance with their terms. 4. The Bond Resolution and the Series 2015B Bonds have been duly validated by the Superior Court of Richmond County. 5. The interest on the Series 2015B Bonds (including any original issue discount properly allocable to a holder thereof) is not includable in gross income for federal income tax purposes except for interest on any Series 2015B Bond during any September _, 2015 Page 4 period while such Series 2015B Bond is held by a "substantial user" of the facilities refinanced by the Series 2015B Bonds or a "related person," as those terms are used in Section 147 of the Code. Interest on the Series 2015B Bonds is an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations. The opinions set forth in the immediately preceding sentence are subject to the condition that the Consolidated Government and the Aviation Commission comply with all requirements of the Code that must be satisfied subsequent to the issuance of the Series 2015B Bonds in order that the interest on the Series 2015B Bonds be and continue to be excluded from gross income for federal income tax purposes. The Consolidated Government and the Aviation Commission have covenanted to comply with such requirements. Failure to comply with such covenants could cause interest on the Series 2015E Bonds to be included in federal gross income retroactive to the date of issuance of the Series 2015B Bonds. We express no opinion regarding any other federal tax consequences caused by the receipt or accrual of interest on the Series 2015B Bonds. 6. The interest on the Series 2015B Bonds is exempt from all present State of Georgia income taxes. The rights of the owners of the Series 2015B Bonds and the enforceability of the Series 2015B Bonds and the Bond Resolution may be subject to bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting creditors' rights heretofore or hereafter enacted to the extent constitutionally applicable and their enforcement may also be subject to the exercise of judicial discretion in appropriate cases. We are members of the State Bar of Georgia. Our opinions herein are limited to the laws of the State of Georgia and any applicable federal laws of the United States. This opinion is limited to the matters expressly set forth above, and no opinion is implied or may be inferred beyond the matters so stated. This opinion is intended solely for the use of the addressees and their permitted successors and /or assigns and may not be relied upon by any other person for any purpose without our prior written consent in each instance. We expressly disclaim any duty to update this opinion in the future for any changes of fact or law that may affect any of the opinions expressed herein. Very truly yours, IN Lei 0 9 RN :: "ON li By: A Partner This page intentionally left blank. SUMMARY OF CONTENTS' Page Introduction............................... ............................... I Plan of Financing ...................... ............................... 7 The Series 2015 Bonds ............. ............................... 8 Security and Sources of Payment for the Series 2015 Bonds ........ ............................... 12 The Consolidated Government ............................. 19 The Aviation Commission ...... ............................... 20 TheAirport ............................. ............................... 22 Airport Financial Information ............................... 36 Investment Considerations ...... ............................... 53 LegalMatters .......................... ............................... 58 Miscellaneous ......................... ............................... 60 Certification ........................... ............................... 65 Appendix A: Financial Statements of theAirport ........................ ............................... A -1 Appendix B: Summary of the Bond Resolution........................ ............................... B -1 Appendix C: Summary of the Airline Agreements ...................... ............................... C -1 Appendix D: Forms of Legal Opinions ............... D -I 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. $11,250,000* AUGUSTA, GEORGIA Airport General Revenue Refunding Bonds, Series 2015 New Issue New Issue $7,320,000* $3,930,000* Airport General Revenue Airport General Revenue Refunding Bonds, Refunding Bonds, Series 2015A (Non -AMT) Series 2015B (AMT) ix1 Airport. OFFICIAL STATEMENT RAYMOND JAMES Dated: , 2015 ' See detailed "TABLE OF CONTENTS" on pages (i) to (ii). * Preliminary; subject to change. TWO SEPARATE ISSUES (Book -Entry Only) RATINGS Moody's: Baa2 Standard & Poor's: BBB 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 2015E Bonds (i) is excluded from gross income for federal income tax purposes, except for any period during which a Series 2015E 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(x) 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. See "LEGAL MATTERS - Opinion of Bond Counsel" herein. AUGUSTA, AUGU GEORGIA STA, GEORGIA J q P.egional Airport Airport General Revenue Refunding Bonds, Series 2015 New Issue New Issue $6,675,000 $3,850,000 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 20158 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 20158 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 2015A Bonds are subject to optional redemption prior to maturity as described herein. The Series 2015B Bonds are not subject to redemption prior to maturity. 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 September 24, 2015. IRIAI CC If I, Dated: September 1, 2015 MATURITIES, PRINCIPAL AMOUNTS, INTEREST RATES, YIELDS, AND CUSIPS $6,675,000 53,850,000 Airport General Revenue Refunding Bonds, Series 2015B (AMT) Maturity Airport General Revenue Refunding Bonds, Interest Series 2015A (Non -AMT) (January 1) Maturity Principal Interest CUSIP 2017 (January 1) Amount Rate Yield CUSIP 2026 $530,000 5.00% 3.44% 051177BJ 1 2027 560,000 5.00 3.58 051177BK8 2028 585,000 5.00 3.68 051177BL6 2029 615,000 5.00 3.80 051177BM4 2030 645,000 5.00 3.85 051177BN2 2031 675,000 5.00 3.93 051177BP7 2032 710,000 5.00 3.97 051177BQ5 2033 745,000 5.00 4.02 051177BR3 2034 785,000 5.00 4.04 051177BSI 2035 825,000 5.00 4.07 051177BT9 All maturities are priced to January 1, 2025 optional redemption date. 53,850,000 Airport General Revenue Refunding Bonds, Series 2015B (AMT) Maturity Principal Interest (January 1) Amount Rate Yield CUSIP 2017 $350,000 5.00% 1.32% 051177BU6 2018 365,000 5.00 1.76 051177BV4 2019 385,000 5.00 2.14 051177BW2 2020 405,000 5.00 2.44 051177BX0 2021 425,000 5.00 2.80 051177BY8 2022 445,000 5.00 3.14 051177BZ5 2023 470,000 5.00 3.38 051177CA9 2024 490,000 5.00 3.54 051177CB7 2025 515,000 5.00 3.70 051177CC5 t 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. 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 Allen 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 Frank Bowman Paulette Curry James Germany Rev. Karlton Howard Charles July Douglas M. Lively Willa Hilton Grey B. Murray Rosa L. Thomas 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 Public Financial Management, Inc. Macon, Georgia Atlanta, Georgia Special Counsel Shepard, Plunkett, Hamilton & Boudreaux, LLP Augusta, Georgia Airport Counsel Freeman Mathis & Gary, LLP Forest Park, Georgia Bond Counsel Murray Barnes Finister LLP Atlanta, Georgia Disclosure Counsel Dentons US LLP Atlanta, Georgia TABLE OF CONTENTS Page INTRODUCTION......................................................................................................................... ............................... TheConsolidated Government ................................................................................................... ............................... l TheAviation Commission ........................................................................................................... ..............................1 Purpose of the Series 2015 Bonds ............................................................................................... ..............................2 TheAirport .................................................................................................................................. ..............................2 Security and Sources of Payment for the Series 2015 Bonds ...................................................... ..............................2 Description of the Series 2015 Bonds .......................................................................................... ..............................3 TaxExemption ............................................................................................................................. ..............................3 Bond Registrar, Paying Agent, and Depositories ......................................................................... ..............................3 Professionals Involved in the Offering ........................................................................................ ..............................4 LegalAuthority ................................................................................... ............................... ............. ...........................4 Offering and Delivery of the Series 2015 Bonds ......................................................................... ..............................4 ContinuingDisclosure ................................................................................................................. ..............................4 InvestmentConsiderations ........................................................................................................... ..............................5 OtherInformation ........................................................................................................................ ..............................5 PLANOF FINANCING ................................................................................................................ ............................... 7 Estimated Sources and Applications of Funds ............................................................................. ..............................7 RefundingProgram ...................................................................................................................... ..............................7 THESERIES 2015 BONDS .......................................................................................................... ............................... 8 Description.................................................................................................................................. ............................... 8 Redemption................................................................................................................................. ............................... 8 Book -Entry Only System ............................................................................................................. ..............................8 LegalAuthority ................................................................................................................. ............................... Investments................................................................................................................................ ..............................1 I SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2015 BONDS ....................... .............................11 PledgedRevenues ..................................................................................................................... ............................... l 1 Funds Created By the Bond Resolution and Flow of Funds ....................................................... .............................11 RateCovenant ............................................................................................................................. .............................15 Parity and Subordinate Lien Bonds ............................................................................................ .............................15 LimitedObligations .................................................................................................................... .............................16 Remedies.................................................................................................................................... .............................16 Introduction................................................................................................................................. .............................18 Consolidated Government Administration and Officials ............................................................ .............................18 THE AVIATION COMMISSION .................................................................................................. .............................19 Introduction................................................................................................................................. .............................19 Aviation Commission Administration and Officials ................................................................... .............................19 THEAIRPORT .............................................................................................................................. .............................21 Introduction................................................................................................................................. .............................21 AirportFacilities ......................................................................................................................... .............................21 AirTrade Area ............................................................................................................................ .............................22 Competition................................................................................................................................ .............................28 AirlinesProviding Service .......................................................................................................... .............................28 Availability of Information Concerning Individual Airlines ...................................................... .............................28 Aviation Activity .................................................................................... ............................... ... ............................... Originand Destination Information ............................................................................................ .............................31 Airlineand Other Revenue Sources ............................................................................................ .............................31 Employees, Employee Relations, and Labor Organizations ....................................................... .............................35 (i) Page AIRPORT FINANCIAL INFORMATION .................................................................................... .............................35 Accounting System and Policies ................................................................................................. .............................35 52 Historical and Pro Forma Capital Structure ................................................................................ .............................36 Debt Service Requirements ......................................................................................................... .............................38 Five Year Operating History ....................................................................................................... .............................39 Management's Discussion and Analysis of Results of Operations ............................................. .............................41 Historical Debt Service Coverage Ratios .................................................................................... .............................42 Operating ........................................................................................................................ .............................43 Capital Improvements Program .................................................................................................. .............................44 Passenger Facility Charges ......................................................................................................... .............................45 Federal Grants -In- Aid ................................................................................................................. .............................47 Employee Benefits ...................................................................................................................... .............................47 Insurance Coverage ..................................................................................................................... .............................50 INVESTMENT CONSIDERATIONS ........................................................................................... .............................52 Introduction ............................................................................................................................... ............................... 52 Levels of Airline Traffic and Financial Condition of the Airlines .............................................. .............................52 Importance of Delta and US Airways at the Airport ................................................................... .............................52 Effect Airline Bankruptcies .................................................................................................... .............................53 Costsof Aviation Fuel ................................................................................................................ .............................54 Airline Mergers; Consolidation .................................................................................................. .............................54 Structural Changes in the Travel Market .................................................................................... .............................55 Aviation Security and Health Safety Concerns ........................................................................... .............................55 Regulations and Restrictions Affecting the Airport .................................................................... .............................55 Expiration and Possible Termination of Revenue - Producing Agreements ................................. .............................56 Competition ................................................................................................................................ .............................56 Unavailability of Certain Insurance Coverage ............................................................................ .............................56 LEGALMATTERS ........................................................................................................................ .............................57 Pending Litigation ...................................................................................................................... .............................57 Opinion Bond Counsel ........................................................................................................... .............................57 Bond Premium ............................................................................................................................ .............................58 Changes in Federal and State Tax Law ....................................................................................... .............................58 Validation Proceedings ............................................................................................................... .............................59 Closing Certificates ..................................................................................................................... .............................59 MISCELLANEOUS ....................................................................................................................... .............................59 Ratings ...................................................................................................................................... ............................... 59 Underwriting ............................................................................................................................. ............................... 59 Financial ........................................................................................................................ .............................60 Independent .................................................................................................................. .............................60 Summary of Continuing Disclosure Certificate .......................................................................... .............................60 Additional Information ............................................................................................................... .............................63 CERTIFICATION .......................................................................................................................... .............................(4 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 ............................................. ............................0 -1 M99 ZI100.16 7&MI)�1A�L CM1109) ` [IN Dim (ii) OFFICIAL STATEMENT of AUGUSTA, GEORGIA relating to its $10,525,000 AIRPORT GENERAL REVENUE REFUNDING BONDS, SERIES 2015 New Issue New Issue $6,675,000 $3,850,000 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 $10,525,000 in aggregate principal amount of its Airport General Revenue Refunding Bonds, Series 2015, consisting of $6,675,000 in aggregate principal amount of its Airport General Revenue Refunding Bonds, Series 2015A (Non -AMT) (the "Series 2015A Bonds "), and $3,850,000 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 a 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. Purpose of the Series 2015 Bonds The proceeds of the Series 2015 Bonds, together with other available funds, will be used to, 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; and 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) the 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 ") constituting Pledged PFC Revenues, which are specifically pledged to pay debt service on the Series 2015A Bonds. The Series 2015E 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 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, 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 $667,500 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 -2- the Series 2015B Bonds, in an amount equal to $385,000 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 2015A Bonds are redeemable at the option of the Consolidated Government, not earlier than January 1, 2025, at the prices and on the terms described in this Official Statement. The Series 2015B Bonds are not subject to redemption prior to maturity. 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. See Appendix D hereto for the forms of the opinions Bond Counsel proposes to deliver in connection with the issuance of the Series 2015 Bonds. For a more complete discussion of such opinions 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 and - Bond Premium" 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. Regions Bank, Augusta, Georgia, will act as depository of the Revenue Fund, the PFC Revenue Fund, 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. -3- 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 opinions will be available at the time of delivery of the Series 2015 Bonds, and copies of the proposed forms of such opinions are 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 and by the Augusta - Richmond County Commission on September 1, 2015 (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 September 24, 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 the last day of the seventh month after the end of each Fiscal Year (currently July 31), 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 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. 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 and the annual report for fiscal year 2014 was -4- filed three days 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. 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 -5- 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: finpressllc.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[ -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. Series 2015A Bonds Series 2015B Bonds Total Estimated Sources of Funds: Par Amount $ 6,675,000.00 $3,850,000.00 $10,525,000.00 Bond Premium 586,229.80 362,595.15 948,824.95 Funds Released from Prior Resolution' 2,830,932.26 2,300,213.58 5,131,145.84 Aviation Commission Funds 230.715.00 230,715.00 Total Sources of Funds $10.092.162.06 %J43.= $ I .835.685.79 Estimated Applications of Funds: Redeem Refunded Bonds' $ 9,107,032.32 $6,173,898.21 $15,280,930.53 Deposit to Debt Service Reserve Fund` 667,500.00 385,000.00 1,052,500.00 Costs of Issuance' 259,441.58 151,063.80 410,505.38 Underwriting Discount 58,188.16 33,561.72 91,749.88 Total Applications of Funds $ .09 $ .74 $16.835.685.79 ' See "PLAN OF FINANCING - Refunding Program" herein. z 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. s 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 0.871733% 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 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 2005B 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 and other Aviation Commission funds, 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 4.08 %, and the weighted average interest rate on the Refunded Bonds is 5.25 %. The Consolidated Government has determined that refunding the Refunded Bonds will reduce the Consolidated Government's total debt service payments by $11,353,882.36 on an aggregate basis and by $2,045,440.19 on a net present value basis. -7- 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 October 2, 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 $6,675,000 and the Series 2015B Bonds are being issued in the aggregate principal amount of $3,850,000. 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 I 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 I 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 2015A Bonds The Series 2015A 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, 2025 (less than all of such Series 2015 Bonds of a single maturity to be selected by lot or in such other 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. Series 2015B Bonds Non - Callable The Series 2015B Bonds are not subject to redemption prior to maturity. Redemption Notices Notice of any redemption of the Series 2015A Bonds, identifying the Series 2015A 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 2015A 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 2015A 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. in 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 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 IQ 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. 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 taw 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. -10- 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. 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 and certain other revenues as described in the definition of "General Revenues" set forth in "SUMMARY OF THE BOND RESOLUTION - Definitions" in Appendix B to this Official Statement. 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 20158 Bonds, Net General Revenues. Upon satisfaction of certain conditions, the Bond Resolution permits the Consolidated Government to withdraw a separable category or portion of revenues, income, receipts, and money relating to a definable service, facility, or program of the Airport from General Revenues and thereafter treat such amounts as "Released Revenues" for all purposes, including as security for Released Revenue Bonds. See "SUMMARY OF THE BOND RESOLUTION - Released Revenues and Securitizations" in Appendix B to this Official Statement. 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 Regions Bank, 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 Regions Bank, 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 Regions Bank, 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 Depository 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 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 U.S. Bank National Association, Atlanta, Georgia, as Depository for the account of the Aviation Commission; (8) the Subordinate Securities Fund, to be held by Regions Bank, Augusta, Georgia, as Depository for the account of the Aviation Commission; (9) the Capital Improvement Fund, to be held Regions Bank, 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 Regions Bank, 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, as described below. 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 (other than the Contract Payments Account) 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 SH 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, and administrative costs of the PFC program. 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. 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 -13- 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 to provide a substitute Reserve Account Credit Facility in certain events). 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 $667,500 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 20158 Bonds will be fully funded upon the issuance of the Series 2015A Bonds in an amount equal to $385,000 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 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 PFC Revenue Fund, the Operation and Maintenance Fund, the Operation and Maintenance Reserve Fund, the accounts within the Debt Service Fund, and the Debt Service 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 -14- 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. 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 construed 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 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. -15- 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. 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. -16- 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. 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. [Remainder of Page Intentionally Left Blank] -17- 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 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 III" 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 William Fennoy, District 1 December 31, 2016 Dennis Williams, District 2 December 31, 2018 Mary Davis, District 3 December 31, 2016 Sammie Sias, District 4 December 31, 2018 Bill Lockett, District S December 31, 2016 Ben Hasan, District 6 December 31, 2018 Sean Frantom, District 7 December 31, 2016 Wayne Guilfoyle, District 8 December 31, 2018 Marion Williams, District 9 December 31, 2016 Grady Smith, District 10, December 31, 2018 Mayor Pro Tempore Full -Time Mayor Retired Retired School Development Director Retired Retired Business Owner Nonprofit Development Director Business Owner Pastor Business Owner Janice Allen Jackson has been the Administrator of the Consolidated Government since November 2014. Prior to her appointment as Administrator, Ms. Jackson 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. 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. -19- Information concerning the current members of the Aviation Commission is set forth below: Name and Office Held Expiration of Term Principal Occunation Cedric J. Johnson, Chairman March 31, 2018 Businessman Randy Sasser, Vice Chairman March 31, 2017 Territorial Director, Dallas Airmotive Davis H. Beman' March 31, 2015 Commercial Real Estate Frank Bowman March 31, 2019 Retired Paulette Curvy' March 31, 2013 Logistics James Germany March 31, 2017 Businessman Charles July March 31, 2017 Retired Rev. Karlton Howard March 31, 2018 Pastor Doug Lively' March 31, 2015 Independent Insurance Agent Willa Hilton March 31, 2019 Businesswoman Grey B. Murray March 31, 2017 Business Owner Rosa L. Thomas March 31, 2019 Retired Sammie Sias' Ex Officio Retired ' Serving until successor is appointed. 2 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 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. -20- 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 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. IE 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 a 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. 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 M Demographic Information Set forth below is selected demographic data for Richmond, Columbia, and Aiken Counties and the Augusta MSA. Counties Richmond (Ga.) Columbia (Ga.) Aiken (S.C.) Augusta MSA 2014 Population' 201,368 139,257 164,753 580,230 2010 Population' 200,549 124,053 160,099 564,873 2000 Population' 199,775 89,288 142,552 447,441 1990 Population' 189,719 66,031 120,940 415,184 2013 Per Capita Income' $31,683 $43,739 $35,047 $35,625 2013 Median Household Income' $37,749 $69,306 $44,509 n/a 2013 Mean Household Income' $51,380 $87,167 $60,728 n/a 2013 Median Age' 33.2 36.7 40.3 n/a Sources: ` 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 ? X92 124,053 142 ,552 Source: U.S. Department of Commerce, Bureau of the Census. [Remainder of Page Intentionally Deft Blank) -24- 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 Industry Forestry, Fishing, Hunting, and Agriculture Support Mining Utilities Construction Manufacturing Wholesale Trade Retail Trade Transportation and Warehousing Information Finance and Insurance Real Estate and Rental and Leasing Professional, Scientific, and Technical Services Management of Companies and Enterprises Administrative, Support, Waste Management, and Remediation Services Educational Services Health Care and Social Assistance Arts, Entertainment, and Recreation Accommodation and Food Services Other Services Unclassified Establishments Total Counties Richmond (Ga.) Columbia (Ga.) Aiken (S.C.) n/a % n/a % 0.16% 0.15 n/a 0.22 n/a n/a n/a 3.15 8.31 7.41 13.12 17.37 18.87 3.28 13.93 1.04 7.22 16.48 6.91 3.55 1.16 3.57 3.08 1.13 1.10 3.82 4.39 2.35 1.32 1.33 0.56 7.05 6.45 n/a 1.80 0.55 n/a 5.65 4.31 23.83 1.03 1.07 0.51 37.32 11.83 9.69 1.25 1.00 0.68 4.06 5.86 2.81 2.54 3.95 1.80 0.76 0.88 18.49 100.00 100.00 100.00 Source: U.S. County Business Patterns, U.S. Department of Commerce, Bureau of the Census. Data not available where indicated by "n/a." -25- 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. Largest Employers in Richmond CouM (Ga.) as of December 3 1. 2014 Employer U.S. Army Signal Center and Fort Gordon' Georgia Regents University Richmond County School System University Hospital Georgia Regents Health System Consolidated Government East Central Regional Hospital E -Z -GO Textron Veterans Administration Hospital Doctors Hospital Indus Employees Military 24,000 Education 4,656 Education 4,431 Healthcare 3,200 Healthcare 3,054 Government 2,785 Healthcare 1,488 Golf Cart Manufacturer 1,277 Healthcare 1,233 Healthcare 1,210 Source: Augusta Economic Development Authority. ' Includes military and civilian employees. Largest Employers in Columbia County (Ga.) as of January 2015 Employer Columbia County Board of Education Columbia County Club Car John Deere Quad Graphics GIW Industries Augusta Sportswear Augusta Staffing Urban Outfitters Kelly Services Indus Education Government Golf, Utility, Transportation Vehicles Farm machinery and Equipment Tradebinding Sluree Pumps Athletic Clothing Employment Placement Distribution and Call Center Employment Placement Source: Augusta Economic Development Authority. Largest Employers in Aiken County (S.C.) as of October 2014 Employer Savannah River Nuclear Solutions, LLC Aiken County Public Schools Bridgestone Americas Tire Operations Savannah River Remediation, LLC Aiken Regional Medical Centers Kimberly -Clark Corporation Aiken County Government WSI -SRS Savannah River Site Wal -mart Associates, Inc. Shaw Industries Source: Greater Aiken Chamber of Commerce. Indus Nuclear Processing Education Tires Design and Construction Health Care Consumer Paper Products Government Security Systems Retail Textiles -26- Employees 2,984 1,100 750 500 500 440 300 300 230 223 Employees 4,704 3,199 1,595 1,541 1,237 1,167 970 685 653 612 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. Richmond County (Ga.) Employment Unemployment Total Labor Force County Unemployment Rate Columbia County (Ga.) Employment Unemployment Total Labor Force County Unemployment Rate State of Georgia Unemployment Rate Aiken County (S.C.) Employment Unemployment Total Labor Force County Unemployment Rate State of South Carolina Unemployment Rate Augusta MSA Employment Unemployment Total Labor Force Unemployment Rate 2010 2011 2012 2013 2014 78,209 78,543 78,988 78,219 78,341 9,678 9,966 9,389 8,522 7,436 87,887 88,509 88,377 86,741 85,777 11.0% 11.3% 10.6% 9.8% 8.7% 57,027 58,655 60,141 61,339 61,481 4,495 4,662 4,511 4,261 3,860 61,522 63,317 64,652 65,600 65,341 7.3% 7.4% 7.0% 6.5% 5.9% 10.5% 10.2% 9.2% 8.2% 7.2% 65,641 66,376 66,439 66,837 67,996 6,729 6,740 6,166 5,370 4,673 72,370 73,116 72,605 72,207 72,669 9.3% 9.2% 8.5% 7.4% 6.4% 11.2% 10.5% 9.2% 7.6% 6.4% 230,830 233,436 234,982 235,531 237,255 24,851 25,371 23,789 21,494 18,798 255,681 258,807 258,771 257,025 256,053 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. -27- 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 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 M Four Month Years Ended December 31 Period Ended 2010 2011 2012 2013 2014 April 30, 2015 Air Carrier Delta Air Lines 56.9% 54.7% 59.5% 59.8% 59.4% 59.2% US Airways 35.6 35.8 39.0 39.0 39.8 39.8 American Eagle 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 1" /0 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 M 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. Compound Annual Growth Rate 2005 -2014 5.29% 2010 -2014 1.48 Source: Airport records from airline reports. -29- Historical Enplaned Passengers Enplaned Percent Year Passengers 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 Enplaned Percent Ended April 30 Passengers 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. -29- 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 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) Passenger Percent General Airlines Change Year Air Carrier Air Taxi Aviation Mili 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 General Ended April 30 Air Carrier Air Taxi Aviation Mili tary 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) Compound Annual Growth Rate 2010 -2014 1.82% Source: Airport records from airline reports. -30- Passenger Percent Year Airlines Change 2010 278,581 - -- % 2011 301,325 8.16 2012 308,202 2.28 2013 32 1,687 4.38 2014 307,712 (4.34) Four -Month Periods Passenger Percent Ended April 30 Airlines Change 2014 103,418 --- % 2015 104,791 1.33 Compound Annual Growth Rate 2010 -2014 1.82% Source: Airport records from airline reports. -30- 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 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 -31- Distance Number of Percent of Destination in miles Passengers 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 --- 4_82" l m o/o Source: United States Department of Transportation Origin and Destination Survey; Mileage from Diio, March 2015. 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 -31- 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 ply. 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. 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 -32- 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. Avf iel 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 Avgasll00LL ref ieler 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 Avfuet and pay for the Airport's entire requirements for Jet -A fuel and Avgasl100LL 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 Avfuet 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 Avf eel'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 Avfuet 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. [Remainder of Page Intentionally Left Blank] -33- 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. Customer Class Commercial Historical Jet -A Fuel Sales and Deliveries By Volume (Gallons) Years Ended December 31 2010 2011 2012 2013 2014 Four Month Periods Ended April 30 2014 2015 Airlines 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 Includes Jet -A fuel purchased from Avfuel and sold to the Airport's retail customers and Avf tel fuel delivered to Avf tel's contract customers. Excludes sales and deliveries of Avgas /t00LL 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 Deliveries' 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. ° 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. -34- Four Month Periods Years Ended December 31 Ended April 30 2010 2011 2012 2013 2014 2014 2015 Gross Revenue by Customer Class: Commercial Airlines S 2,872,766 $ 8,008,195 S 6,651,604 S2,404,713 $ 1,311,298 S 504,830 S 686,094 General Aviation 4,598,398 3,818,371 3,749,317 3,139,454 2,969,274 1,092,188 1,058,750 Military 611,842 640,299 1,000,751 1,473,242 788,954 406,844 126,663 Others 2,447,815 1,127,043 1,002,488 937,505 — 123,810 123,344 Sales Discount (48,5331 (41,213) (54,6051 3( 1,6951 3( 9.198) 1( 1,391) (14.622 Total Gross Revenue" 10,482,289 13,552,695 12,349,555 7,923,219 5,030,328 2,116,281 1,980,229 Cost of Fuel Sold (8,066,8741 (10,874,073) (9,886,569) (4,722,601) (2,494,063 (1.026.7351 71 28,259 Net Revenue 5 .41 41 5 61.2 S 2 4 S 11£ s ib= S iMMA6 S 1,25im 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. ° 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. -34- 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. -35- 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 Current Liabilities: Accounts Payable Accrued Expenses Due to Other Funds of the Consolidated Government Compensated Absences Total Current Liabilities Long -Term Liabilities Advance from other Funds of the Consolidated Government Revenue Bonds Payable Total Long -Term Liabilities Total Liabilities Net Position Net Investment in Capital Assets Restricted for Capital Outlay Restricted for Debt Service Unrestricted Total Net Position 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 Amount Outstanding as of Amount Outstanding as of December 31 (Audited) April 30, 2015 2010 2011 2012 2013 2014 (Unaudited) $1,394,540 S 5,672,589 S 2,509,710 S 1,004,225 S 1,375,912 $ 68,677 75,404 89,573 122,832 147,251 160,946 160,946 2,249,979 755,436 2,421,108 1,521,533 1,772,657 1,706,946 179,281 212,959 253,250 267,209 282,387 282,387 3.899,204 6,730,557 5,306,891 2,940,218 3,591,902 2,218,956 -- 122,309 128,123 154,273 376,642 376,642 19.605.000 19.605.000 19.605,000 19.605.000 19.605.000 15.079.986 19,605.000 19,727.309 19.733.123 19.759,273 19.981.642 15.456.628 23.504.204 26.457.866 25.040.014 22.699.491 23.573.544 17.675.584 32,843,837 47,882,582 55,553,210 54,405,952 53,670,038 58,981,590 18,211,731 12,248,902 10,432,884 11,140,196 12,191,773 12,400,757 2,068,812 7,006,787 7,520,977 8,035,168 8,549,399 4,195,704 8.264.107 5.497.579 2.658.414 3.360,159 3.479.801 4.258.478 61.388.487 72.635.850 76.165.485 76.941.475 77.891.011 79.836.529 5 8 HQ2 21 $ 22 MaW 5 101.205.499 $ 22 645 - 5 101 464 555 5 2LaL2J=U 31.94 27.16 2191 25-68 2565 19.36 2LOT 12 21 19.50 12,$3_ 12 T /o 1s,W -36- 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 Net Position Total Net Position 79,836,529 Total Liabilities and Net Position $ 92.957.127 Ratio of Long -Term Liabilities to Net Position 13.65 Long -Term Liabilities as a Percentage of Total Liabilities and Net Position 11.73 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. -37- 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 1,706,946 Compensated Absences 282,387 Total Current Liabilities 2,218,956 Long -Term Liabilities Advance from other Funds of the Consolidated Government 376,642 Revenue Bonds Payable 10,525,000 Total Long -Term Liabilities 10,901,642 Total Liabilities 13,120,598 Net Position Total Net Position 79,836,529 Total Liabilities and Net Position $ 92.957.127 Ratio of Long -Term Liabilities to Net Position 13.65 Long -Term Liabilities as a Percentage of Total Liabilities and Net Position 11.73 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. -37- 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 Interes Requirements Principal Interest Ric uirements Requirements 2016 $ - -- $ 89,927.08 $ 89,927.08 $ - -- $ 51,868.06 $ 51,868.06 $ 141,795.14 2017 - -- 333,750.00 333,750.00 350,000 192,500.00 542,500.00 876,250.00 2018 - -- 333,750.00 333,750.00 365,000 175,000.00 540,000.00 873,750.00 2019 - -- 333,750.00 333,750.00 385,000 156,750.00 541,750.00 875,500.00 2020 - -- 333,750.00 333,750.00 405,000 137,500.00 542,500.00 876,250.00 2021 - -- 333,750.00 333,750.00 425,000 117,250.00 542,250.00 876,000.00 2022 - -- 333,750.00 333,750.00 445,000 96,000.00 541,000.00 874,750.00 2023 - -- 333,750.00 333,750.00 470,000 73,750.00 543,750.00 877,500.00 2024 - -- 333,750.00 333,750.00 490,000 50,250.00 540,250.00 874,000.00 2025 - -- 333,750.00 333,750.00 515,000 25,750.00 540,750.00 874,500.00 2026 530,000 333,750.00 863,750.00 - -- - -- - -- 863,750.00 2027 560,000 307,250.00 867,250.00 - -- - -- - -- 867,250.00 2028 585,000 279,250.00 864,250.00 - -- - -- - -- 864,250.00 ' 2029 615,000 250,000.00 865,000.00 - -- - -- - -- 865,000.00 2030 645,000 219,250.00 864,250.00 - -- - -- - -- 864,250.00 2031 675,000 187,000.00 862,000.00 - -- - -- - -- 862,000.00 2032 710,000 153,250.00 863,250.00 - -- - -- - -- 863,250.00 2033 745,000 117,750.00 862,750.00 - -- - -- - -- 862,750.00 2034 785,000 80,500.00 865,500.00 - -- - -- - -- 865,500.00 2035 825.000 41.250.00 866.250.00 866.250.00 Totals $ 5.000 $ 5.062.927.08 $ 11.737.927.08 $ I$ QM $ 1.076.618.06 $ 4.926.618.06 $ ]x,664.545.14 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] -39- t 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. -40- Summn of Airport Revenues and Expenses Four -Month Periods Years Ended December 31 (Audited) Ended April 30 (Unaudited) 2010 2011 2012 2013 2014 2014 2015 Operating Revenue: Landing Fees $ 448,104 S 542,786 $ 845,401 $ 1,179,976 S 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 Sales' 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 2267 Total Operating Revenue 15.469.961 19722,430 19307.451 15.451861 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 Expense 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 2,445,035 815,011 815,011 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 16,687M9 20,530,886 20.192.643 15.980343 14.039324 4,560530 4.483905 Operating Income (Loss) (1.217.088} (808.4561 (1.085.192) 525 6.882) X816.763) 424.957 755.246 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) (1.037.0941 X1,037.094) X1,037.1021 (345,7011 (345,701) Net Non- Operating Revenue 770,568 1,407-267 1,333.193 1.038.689 1,257,897 282.069 334,044 Net income Before Transfers (446320) 598.811 248,001 511.807 441J34 707 026 1.089290 Capital Contributions 377,018 11,538,487 3,292,284 264,183 508,402 72,350 862,775 Transfers Out (In) to other Funds of the Consolidated Government -- 101,650 - (3.307) (3.543 Change in Net Position (69,502) 12,137,298 3,550,935 775,990 949,536 776,069 1,948,522 Net Position, Beginning of Year 61,457,989 61,388,487 72,635,850 76,165,485 76,941,475 76,941,475 77,891,001 Prior Period Adjustment (889.9351 -- - -- Net Position, Beginning of Year, as restated 61.457.989 60.498.552 72.635.850 76.165A85 76.941.475 76.941.475 77.891.000 Net Position, End of Year $ $ $ $ $ 7 -77 I] 54Q S � t 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. -40- 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 8.1 % of total operating revenue. Over the five -year period, rental car revenue increased on average by 8.4% 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 28.7% 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. -41- 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 Revenue Bonds Secured Only by Net General Revenues Net General Revenues Available for Debt Service' Debt Service on Revenue Bonds Secured Only by Net General Revenue s Historical Debt Service Coverage Ratio Revenue Bonds Secured by Net General Revenues and PFC Revenues Remaining Net General Revenues Available for Debt Service' PFC Revenues Available for Debt Service Total Revenues Available for Debt Service Debt Service on Revenue Bonds Secured by Net General Revenues and PFC Revenues Historical Debt Service Coverage Ratio Years Ended December 31 2010 2011 2012 2013 2014 $964,153 $1,350,015 $1,036,700 $1,589,075 $1,628,272 510,429 510,429 510,429 510,429 510,429 Imx 2 6Ax 2—Ux LU X L12x $ 453,724 $839,586 $526,271 $1,078,646 $1,117,843 909,816 1,222,709 1,113,026 1,074,276 1,090, 518 1,363,540 2,062,295 1,639,297 2,152,922 2,208,361 1,040,355 104, 0,355 1,040,355 1.040,355 1,040,355 1.3-lx Lm L5-$x 2Mx 2A2 ' Operating income (loss) of the Airport, plus depreciation and amortization. See "AIRPORT FINANCIAL INFORMATION - Five Year Operating History" herein. z Represents historical debt service, including required deposits to reserve accounts, on the Series 2005C Bonds, which were secured only by Net General Revenues. ' Represents operating income (loss) of the Airport, plus depreciation and amortization, remaining after payment of debt service on the Series 2005C Bonds. ° 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. S Represents historical debt service, including required deposits to reserve accounts, on the Series 2005A Bonds and the Series 2005E Bonds, which were secured by Net General Revenues and PFC Revenues. EN 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. Airport Budget for Year Endina December 31. 2015 Operating Revenue: 5,569,790 Landing Fees $ 1,229,730 Terminal Area Rental 911,300 Security Reimbursements 227,500 Apron Charges 1,141,250 FBO Revenue 53,000 Fuel Sales` 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 Expense` 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 971,780 Total Operating Expense 17,039,265 Operating Income (Loss) (2,052,7251 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 $ 1.328.085) Includes revenue from fuel sales and from flowage fees for fuel deliveries. Includes all fuel types sold or delivered. Represents cost of fuel sold, including all fuel types. -43- 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. The staff of the Airport maintains a multi -year capital improvements program and a plan to finance the program that relies on several funding sources. The capital improvements program is based on the federal fiscal year, which starts October 1 of each year and ends of September 30 of the following year, since a substantial source of funding is from the Airport Improvement Grant Program ("Al?"), which is administered by the FAA. 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 based on funding availability and needs. To the extent that any portion of the funding sources assumed in the program is not available as anticipated, the Consolidated Government may be required to defer or remove certain projects. The following table summarizes the Airport's capital improvements program for the current year ending September 30, 2015 through the year ending September 30, 2020. Funding Sources Total Value 2015 Debt Proceeds 2017 2018 Fiscal of Capital Airport Customer Facility and Investment Federal Grants - Year Improvements Revenues Charges Earnings In -Aid 2010 $ 1,115,623 $ 105,070 $354,733 $ 278,802 $ 377,018 2011 17,197,216 5,391,716 267,013 -- 11,538,487 2012 10,710,621 4,488,494 862,165 2,067,678 3,292,284 2013 968,699 655,892 48,624 -- 264,183 2014 1,709,121 744,744 455,975 -- 508,402 The staff of the Airport maintains a multi -year capital improvements program and a plan to finance the program that relies on several funding sources. The capital improvements program is based on the federal fiscal year, which starts October 1 of each year and ends of September 30 of the following year, since a substantial source of funding is from the Airport Improvement Grant Program ("Al?"), which is administered by the FAA. 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 based on funding availability and needs. To the extent that any portion of the funding sources assumed in the program is not available as anticipated, the Consolidated Government may be required to defer or remove certain projects. The following table summarizes the Airport's capital improvements program for the current year ending September 30, 2015 through the year ending September 30, 2020. -44- Years Ending September 30 2015 2016 2017 2018 2019 2020 To Type of Capital Expenditure Airfield improvements S 567,159 $26,862,970 $13,660,000 S 754,000 $8,000,000 $ - $49,844,129 Terminal Improvements 739,903 -- - -- -- -- 739,903 Parking Improvements 100,000 -- -- -- - -- - -- 100,000 Infrastructure 145,000 4,137,712 - 1,838,860 - - -- 6,121,572 Aircraft Rescue and Firefighting Facility Rehab/Relocation - -- - -- - -- - -- 675,000 7,425,000 8,100,000 Rental Car Facility - 8.000,000 8.000.000 Total Costs S $ 19 b$2b$2 $ Ili! $ 5 $ 7 42 $ Type of Funding Source Federal Grants -In -Aid' Entitlement Funds $ 1,078,698 $ 3,190,742 S 2,134,720 $2, 134,720 $2, 134,720 $2,134,720 $ 12,808,320 Discretionary Funds -- 13,940,346 10,159,280 198,854 5,672,780 4,547,780 34,519,040 State of Georgia Grants 29,964 475,864 341,500 64,822 216,875 185,625 1,314,650 Customer Facility Charges 100,000 -- 8,000,000 -- -- - 8,100,000 SPLOSTrrSPLOST 108,508 11,966,139 -- - - -- 12,074,647 Airport Revenues 234.892 1.427.591 1.024.500 194.464 650.625 556.875 4.088,947 Total Funding Sources $ $ 2J (?k= S 2.5.22m $ S Z42l.994 $ ` See "AIRPORT FINANCIAL INFORMATION - Federal Grants -In -Aid" herein. 2 Represents proceeds of a one percent special purpose local option sales tax and a one percent transportation special purpose local option sales tax, each of which are currently in effect in Richmond County. -44- In addition to the approximately $72.9 million of planned expenditures set forth above, the Airport's capital improvements program for 2015 through 2020 includes approximately $53.4 million of additional capital improvements for which funding sources are not currently known. These capital improvements include, among other things, hangar replacement, maintenance facility replacement, southeast side infrastructure construction, and long term parking lot rehabilitation. The timing of these capital improvements, as with all capital improvements included in the Airport's capital improvements program, will depend on funding availability and needs. 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 -45- 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 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, 2001, 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. On August 30, 2011, the FAA approved another amendment to the first PFC application, decreasing the total amount authorized to be collected to $27,636,360, due to a decrease in the cost of the new terminal facility, and shortening the charge expiration date to August 1, 2024. The FAA's approval, as amended, authorizes PFC revenues to be applied to bond financing with respect to PFC- approved projects. 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. The FAA's approval 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, this approval 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). On October 6, 2011, the Aviation Commission received approval, pursuant to a third PFC application, to collect a $4.50 PFC from September 1, 2026 to November 1, 2027 on each qualifying enplaning passenger totaling $2,091,034, in order to pay for certain PFC - approved projects at the Airport, including runway rehabilitation and improvements to the Airport's general aviation terminal parking lot. The FAA's approval allows the Aviation Commission to impose and use these PFCs for the payment of PFC - approved project costs only on a pay -as- you -go basis ($2,091,034). 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. -46- 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 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 2020 includes approximately $47.3 million in funding from AIP grants, of which approximately $12.8 million is expected to be entitlement funding and approximately $34.5 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. See "INVESTMENT CONSIDERATIONS - Federal Funding; Impact of Federal Sequestration" herein. 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 -47- 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. Set forth below is selected information about the Consolidated Government's defined- benefit pension plans. Contributions to Defined- Benefit Pension Plans Analvsis of Fundine Prowess of Defined - Benefit Pension Plans (Funded) Years Ended December 31 Unfunded (Funded) 2010 2011 2012 2013 2014 1945 Plan Covered Percentage of Date Value of Assets Liabilijy Liabili Ratio Payroll Covered Pavroll 12/31/11 7,152,239 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 6,423,808 8,756,203 2,332,395 73.4 132,346 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 GMEBS' 234.1% 12/31/11 64,785,966 83,583,477 18,797,511 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 The 1977 Plan was terminated effective January 1, 2008 when all participants in the 1977 Plan were transferred to the GMEBS Plan. GMEBS' Analvsis of Fundine Prowess of Defined - Benefit Pension Plans 1945 Plan (Funded) Unfunded (Funded) Actuarially Unfunded Accrued Actuarial Actuarially Actuarially Liability as a Valuation Actuarial Accrued Accrued Funded Covered Percentage of Date Value of Assets Liabilijy Liabili Ratio Payroll Covered Pavroll 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 GMEBS' 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 The 1977 Plan was terminated effective January 1, 2008 when all participants in the 1977 Plan were transferred to the GMEBS Plan. -48- Membership in Defined - Benefit Pension Plans as of January 1, 2014 Retirees and Terminated Plan Members Active Beneficiaries Entitled to But Not Yet Plan Receiving Benefits Receiving Benefits 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 02 E16 ZJA 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 two years. The actuarial report prepared by The Segal Group, Inc. ( "Segal "), dated August 7, 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 June 30, 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 -49- 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 fast 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. -50- Present insurance coverage for the Consolidated Government, including coverage applicable to the Airport, is summarized below. 4 Building and Contents' Employee Blanket Bond Public Official Bond for each Commissioner Amount in Force $619,649,004 100,000 10,000 Ur i M. Public Officials' Liability Commercial Aviation Liability Bodily Injury and Property Products and Completed Operations Hangarkeepers Liability - Not in Flight Each Aircraft Baggage Liability Contingent Cell Tower Liability Pollution Legal Liability Directors and Officers Liability` Automobile Liability' Includes boiler and machinery and valuable papers. Self - insured retention of $10,000 applies. Limits of Liability Each Occurrence Aggregate $ 2,000,000 None 100,000,000 None 100,000,000 $100,000,000 100,000,000 None 1,000,000 1,000,000 100, 000,000 100, 000,000 10, 000, 000 10, 000, 000 1,000,000 1,000,000 1,000,000 None 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 8 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 Tyne 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. -51- 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 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 -52- 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 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. ma 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. 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 -54- 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. 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 H IN 1 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. -55- 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 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 and "SUMMARY OF THE AIRLINE AGREEMENTS" in Appendix C hereto. 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, federal inspection services, 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 on September 30, 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. As of the date of this Official Statement, Congress has not enacted legislation to reauthorize the FAA beyond September 30, 2015, and there can be no assurance that the FAA will receive spending authority beyond that date. 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. -56- 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 opinions will be available at the time of delivery of the Series 2015 Bonds. It is anticipated that the approving opinions will be in substantially the forms 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. 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 excluded from gross income for federal income tax purposes, Bond Counsel will (i) rely as to certain factual matters upon certificates and certified proceedings of public officials of the Consolidated Government, and representations of the Consolidated Government with respect to, among other things, the use of the proceeds of the Series 2015 Bonds, the Series 2005A -57- Bonds, and the Series 2005C Bonds 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, including, but not limited to, the arbitrage requirements contained in Section 148 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 the State of Georgia under applicable state or local laws. Purchasers of the Series 2015 Bonds should consult their tax advisors as to the tax- exempt status of interest on the Series 2015 Bonds in a particular state or local jurisdiction other than the State of Georgia. Bond Premium The Series 2015 Bonds are being sold at initial offering prices in excess of the principal amount thereof. An amount equal to the excess of the purchase price of a Series 2015 Bond over its stated redemption price at maturity constitutes premium on such Series 2015 Bond. A purchaser of a Series 2015 Bond must amortize any premium over such Series 2015 Bond's term using constant yield principles, based on the purchaser's yield to maturity. As premium is amortized, the purchaser's basis in such Series 2015 Bond is reduced by a corresponding amount, resulting in an increase in the gain (or decrease in the loss) to be recognized for federal income tax purposes upon a sale or disposition of such Series 2015 Bond prior to its maturity. Even though the purchaser's basis is reduced, no federal income tax deduction is allowed. Purchasers of any Series 2015 Bonds at a premium, whether at the time of initial issuance or subsequent thereto, should consult their own tax advisors with respect to the determination and treatment of premium for federal income tax purposes and with respect to state and local tax consequences of owning such Series 2015 Bonds. The foregoing is a general discussion of certain federal income tax consequences of original issue premium and does not purport to deal with all tax questions that may be relevant to particular investors or circumstances. Holders of the Series 2015 Bonds should consult their own tax advisors with respect to the apportionment for federal income tax purposes of accrued tax- exempt interest upon a sale or exchange (including redemption) and with respect to the state and local tax consequences of original issue premium. 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 -58- 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 material fact necessary to make the statements herein contained, in light of the circumstances under which they were made, not misleading. MISCELLANEOUS Ratings Moody's Investors Service, Inc. and Standard & Poor's Ratings Services, a division of The McGraw -Hill Companies, Inc., have assigned ratings of `Baa2" and `BBB," respectively, to the Series 2015 Bonds. The ratings reflect only the respective views of the rating agencies, and an explanation of the significance of each rating may be obtained from the rating agency furnishing such rating, at the following addresses: Moody's Investors Service, Inc., 7 World Trade Center, 250 Greenwich Street, New York, New York 10007 and Standard & Poor's Ratings Services, 55 Water Street, New York, New York 10041. Generally, a rating agency bases its rating on the information and materials furnished to it and on investigations, studies, and assumptions of its own. There is no assurance that either or both of such ratings will remain unchanged for any given period of time or that they will not be revised downward or withdrawn entirely by the rating agency furnishing the same, if, in its judgment, circumstances so warrant. Any such downward revision or withdrawal of such ratings, or either of them, may have an adverse effect on the liquidity and market price of the Series 2015 Bonds. 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 $11,382,075.07 (being the aggregate principal amount of the Series 2015 Bonds ($10,525,000.00) plus bond premium of $948,824.95 less Underwriter's discount of $91,749.88). 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 $8.72 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 -59- 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. "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 the last day of the seventh month after the end of each Fiscal Year (currently July 31), commencing with Fiscal Year 2015, 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 -60- 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 the MSRB 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; (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) enhaanements 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; -61- (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. 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 2015 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 2015 Bonds outstanding at the time of such amendment or waiver; and -62- (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 ofAnnual 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 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. -63- 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: /Vardi Dav is. Jr. Mayor, Augusta - Richmond County Commission By: /s/ Cedric J. hn on Chairman, Augusta Aviation Commission -64- 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. lRemainder of Page Intentionally Left Blank] AUGUSTA REGIONAL AIRPORT AT BUSH FIELD AUGUSTA, GEORGIA FINANCIAL REPORT FOR THE YEARS ENDED DECEMBER 31, 2014 AND 2013 AUGUSTA REGIONAL AIRPORT AT BUSH FIELD AUGUSTA, GEORGIA FINANCIAL REPORT FOR THE YEARS ENDED DECEMBER 31, 2014 AND 2013 TABLE OF CONTENTS Pane INDEPENDENT AUDITOR'S REPORT ................................................................................... ..............................1-3 MANAGEMENTS DISCUSSION AND ANALYSIS .............................................................. ............................... 4-13 FINANCIAL STATEMENTS Statementsof Net Position ................................................................................................... .............................14 Statements of Revenues, Expenses and Changes in Fund Net Position ........................ .............................15 Statements of Cash Flows ........................................................................................ .............................16 and 17 Notes to Financial Statements ..................................................................................... .............................18-42 REQUIRED SUPPLEMENTARY INFORMATION Schedules of Funding Progress - Defined Benefit Retirement Plans ........................... ............................... 43 Schedule of Funding Progress - Other Post - employment Benefit Plan ....................... ............................... 44 Schedule of Changes in the Government's Net Pension Liability and RelatedRatios -1945 Plan .................................................................................... ............................... 45 Schedule of Changes in the Government's Net Pension Liability and Related Ratios - General Retirement Plan ........................................................... ............................... 46 Schedule of Government Contributions -1945 Plan ...................................................... ............................... 47 Schedule of Government Contributions - General Retirement Plan ............................. ............................... 48 Schedule of Pension Investment Returns -1945 Plan .................................................... ............................... 49 Schedule of Pension Investment Returns - General Retirement Plan .......................... ............................... 50 To the Aviation Commission and Augusta - Richmond County Commission Augusta, Georgia Report on the Financial Statements We have audited the accompanying basic financial statements of Augusta Regional Airport at Bush Field (the "Airport "), an enterprise fund of Augusta, Georgia, as of and for the years ended December 31, 2014 and 2013, and the related notes to the financial statements, which collectively comprise the Airport's basic financial statements as listed in the table of contents. Management's Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor's Responsibility Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. 300 MULBERRY STREET, SUITE 300 • POST OFFICE BOX 1877 • MACON, GEORGIA 31202 - 1877.478 -454 -8000 • FAX 478464 -8051 • www.mjcpa.com MEMBERS OF THE AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS Opinion In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Augusta Regional Airport at Bush Field, an enterprise fund of Augusta, Georgia as of December 31, 2014 and 2013, and the changes in financial position and cash flows thereof for the years then ended in accordance with accounting principles generally accepted in the United States of America. Emphasis of Matter As discussed in Note 1, the financial statements present only the Augusta Regional Airport at Bush Field enterprise fund of Augusta, Georgia and do not purport to, and do not, present fairly the financial position of Augusta, Georgia as of December 31, 2014 and 2013, the changes in its financial position or its cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America. Our opinion is not modified with respect to this matter. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the Management's Discussion and Analysis (on pages 4 through 13) and the Schedule of Funding Progress on pages 43 and 44 and the Schedules of Changes in the Government's Net Pension Liability and Related Ratios, Schedules of Government Contributions, and Schedules of Pension Investment Returns (on pages 45 through 50) be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. F% Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated June 29, 2015, on our consideration of Augusta Regional Airport at Bush Field's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the Airport's internal control over financial reporting and compliance. i / i F Macon, Georgia June 29, 2015 3 AUGUSTA REGIONAL AIRPORT AT BUSH FIELD AUGUSTA, GEORGIA MANAGEMENT'S DISCUSSION AND ANALYSIS The following discussion and analysis of the financial performance and activity of the Augusta Regional Airport at Bush Field ( "the Airport") provides an introduction and understanding of the basic financial statements of the Airport for the fiscal years ended December 31, 2014 and 2013. This discussion and analysis has been prepared by the Airport's management and should be read in conjunction with the audited financial statements and the notes thereto, which follow this section. This information taken collectively is designed to provide the reader with an understanding of the Airport's finances. Overview of the Financial Statements The Airport is a major enterprise wholly owned by Augusta, Georgia (the "Government ") and conducts business - type activities in its operation of the Airport. The Airport is self - supporting and does not draw on any other Government resources in order to fund its operations, nor does the Government draw from any Airport's revenues in order to fund non - Airport activities. The Airport financial report includes three basic financial statements: the Statement of Net Position, the Statement of Revenues, Expenses and Changes in Position, and the Statement of Cash Flows. The financial statements are prepared in accordance with accounting principles generally accepted in the United States of America. The Statement of Net Position presents information on all of the Airport's assets and liabilities, with the difference between the two reported as net position. Over time, increases or decreases in net position may serve as a useful indicator of the Airport's financial position. The Statement of Revenues, Expenses and Changes in Net Position present information showing how the Airport's net position changed during the year. All changes in net position are reported as soon as the underlying events giving rise to the change occurs, regardless of timing of related cash flows. Thus, revenues and expenses are reported in this statement for certain item(s) that result in cash flows in future fiscal periods. The Statement of Cash Flows reports the flow of cash and cash equivalents. Consequently, only transactions that affect the Airport's cash accounts are recorded in these statements. Reconciliation follows these statements to assist in the understanding of the difference between cash flows from operating activities and operating income. Aviation Highlights Below summarizes the Airport's significant achievements during 2014 and 2013: ❖ The Augusta Regional Airport Commission have selected nationally recognized airport planning and engineering firm Mead & Hunt to lead the consulting team that will prepare an update of the Airport's master plan. This plan examines the Airport's existing operational patterns to create a growth forecast for the next twenty years. The planning and design process started in November 2013. ❖ The Airport began a new parking lot project in June 2013 and completed in November 2014 to convert the former rental car ready return spaces into a credit card lot. These spaces are accessed through a gate arm system with the ability to pay by credit card upon exiting. The new credit card lot created approximately 165 additional spaces. 4 AUGUSTA REGIONAL AIRPORT AT BUSH FIELD AUGUSTA, GEORGIA MANAGEMENT'S DISCUSSION AND ANALYSIS Set forth below is historical enplanements, operations, and landing weight. Enplanements : Operations: Airlines General Aviation Military Total Airline Landed Wel aht (1,000 pound units): Financial Highlights Revenues Airline Agreements Percent Percent Change Change from from 2014 2013 2012 2013 2012 269,902 270,805 279,242 -0.3% -3.0% 12,063 13,564 13,295 -11.1% 2.0% 11,621 11,605 12,481 0.1% -7.0% 2,273 1,783 1,981 27.5% -10.0% 25,957 26,952 27,757 -3.7% -2.9% 307,712 321,687 308,202 -4.3% 4.4% The terminal rates and charges for commercial airline activity are established annually in accordance with the Airline Lease Agreement as adopted by Augusta, Georgia, a political subdivision of the State of Georgia through the Augusta Aviation Commission on September 26, 2013. The rates and charges are to cover net operating cost as projected in the Airport's annual budget as approved by the Augusta Aviation Commission and adopted by Augusta, Georgia. Under the lease agreement, rents and fees will be adjusted whenever the Augusta Aviation Commission determines that Airport revenues are not sufficient to satisfy the requirements of the ordinance. Rents, fees, and charges are calculated proportionate to each airport cost center budget (Airfield, Apron, Loading Bridges, Terminal Area, Terminal Building, Aviation Services, Other buildings and areas). Rates and charges will be established to provide recovery of pro rata direct and indirect operation and maintenance expenses, 1.25 times annual debt service coverage and amounts of deposits to any funds and accounts required by the Bond Resolution. 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 Airport conducts limited fixed based operations at the Airport under the name "Augusta Regional Airport Aviation Services" ( "Aviation Services "). As a fixed base operator ( "7130 "), 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. As the Airport's exclusive fuel provider, it delivers approximately three million gallons of jet fuel annually. 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. Currently, Aviation Services generates approximately one -third of the Airport's total revenues. 61 AUGUSTA REGIONAL AIRPORT AT BUSH FIELD AUGUSTA, GEORGIA MANAGEMENT'S DISCUSSION AND ANALYSIS The Airport purchases substantially all of its aviation fuel for resale from AVFuel Corporation, a global supplier of aviation fuels and services with over 600 branded FBOs and 4,000 other customers globally. Those customers include, but are not limited to, other FBOs, airport authorities, flight departments, airlines, and the Department of Defense. Avfuel Corporation has been the Airport's fuel supplier since 2001 and currently holds a three year fuel supplier contract with two one year extension options. Terminal Building Concession Agreements: The Airport 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 Airport. Pursuant to the Concessions Agreement, the Concessionaire pays the Airport five percent of gross food and non- alcoholic beverage sales and ten percent of gross retail and alcoholic beverage sales. In 2014, the Airport received revenues equal to approximately $0.35 per enplaned passenger from concessions in the terminal building. Public Parking Agreements: During 2014, the Airport increased the daily parking rates to $10.00 in the short-term lot and to $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 Airport 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 Airport entered into Rental Car Agreements in 2012, with agreements with seven rental car companies: Avis, Budget, Enterprise, Hertz, Alamo /National, Thrifty, and Ace. The initial term of each Rental Car Agreement was set to expire in 2015. Pursuant to each Rental Car Agreement, each Rental Car Company pays the Airport 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 Airport 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 Airport. Miscellaneous Agreements. The Airport 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). Total revenues for the Airport decreased 9.9% in 2014 compared to 2013. Operating revenue for the Airport decreased by 14.4% while non - Operating revenues increased 19.8 %. Comparative figures for the last three years are in the chart below: 11[6 11Cl4 1:k14:1,11 *? Percent Percent Change Change from from 2014 2013 2012 2013 2012 Operating revenues $ 13,222,561 $ 15,453,861 $ 19,107,452 -14.4% -19.1% Non - operating revenues 2,803,401 2,339,966 5,662,571 19.8% -58.7% Total revenues $ 16,025,962 $ 17,793,827 $ 24,770,023 -9.9% - 28.2% 6 AUGUSTA REGIONAL AIRPORT AT BUSH FIELD AUGUSTA, GEORGIA MANAGEMENT'S DISCUSSION AND ANALYSIS Operating Revenues Fuel sales represented the largest source of operating revenue. Gross sales reduced by 35.3% during 2014 from 2013 and by 35.1% during 2013 from 2012, due to a decrease in non - military and military contract sales. For many years, the Airport had been practicing buy -back arrangements. However, due to significant fuel cost fluctuations, it became necessary to procure fuel on a consignment basis. With buy -back arrangements, the Airport allows the supplier to maintain Jet -A fuel inventory for the contract customers with the understanding that the Airport would receive a flowage fee for every gallon delivered. In addition to the sales from retail customers and Department of Defense (DoD) customers, the Airport accounts for the reimbursements for the portion in consignment. Effective March 25, 2013, the Airport ceased buy -back arrangements in which it receives only In To Planes Fees for the quantity delivered to the contract customers. During 2014 and 2013, In To Planes Fees was $0.2 per gallon for signatory airlines and $1.65 per gallon for others. Parking revenue and rental car concession revenue represented the second and third largest sources of operating revenue. Parking revenue increased by 17.9% during 2014 from 2013 and by 1.7% during 2013 from 2012, due mainly to expansion of parking spaces during 2012 and the completion of the new credit card lots in 2014, which added approximately 775 additional spaces combined. Rental car concession revenue increased by 10.7% during 2014 from 2013, due to the increase in rental car privilege fee in proportion to their gross revenues. It decreased by 3.6% during 2013 from 2012. 7 Percent Percent Change Change 2014 2013 2012 from 2013 from 2012 Landing fees $ 1,158,656 $ 1,179,976 $ 845,401 -1.8% 39.6% Terminal area rental 817,540 796,441 746,517 2.6% 6.7% Security reimbursements 58,400 58,400 47,547 0.0% 22.8% Apron charges 1,189,366 1,078,140 682,640 10.3% 57.9% FBO revenue 44,408 53,853 25,298 - 17.5% 112.9% Fuel sales (gross) 5,248,244 8,115,842 12,499,779 - 35.3% -35.1% Other aeronautical 41,576 39,397 32,911 5.5% 19.7% Land /non- terminal fees 620,610 657,157 680,087 -5.6% -3.4% Terminal food/beverage 70,298 72,384 74,949 -2.9% -3.4% Terminal other - - 24 - - 100.0 °!° Rental cars 1,487,90,343,477 0 1 1,393,452 10.7% -3.6% Parking 2,368,627 2,008,932 1,975,937 17.9% 1.7% Non - aeronautical 42,236 48,846 23,459 - 13.5% 108.2% Miscellaneous Income 74,700 1,016 79,451 7252.4% - 98.7% Total operating revenue $13,222,561 $15,453,861 $19,107,452 -14.4% - 19.1% 7 AUGUSTA REGIONAL AIRPORT AT BUSH FIELD AUGUSTA, GEORGIA MANAGEMENT'S DISCUSSION AND ANALYSIS Non - operating Revenues Non - operating revenues comprise of capital contributions, passenger facility charges (PFC), customer facility charges (CFC), and investment income. The increase by 19.8% during 2014 and decrease by 58.7% during 2013 is due mainly to the increase and decrease in capital contributions. Set forth below is the projects funded by the Federal Aviation Administration (FAA) as Airport Improvement Project (AIP) grant eligible out of the Airport's five - year Capital Improvement Plan (CIP) from 2010 through 2015. The FAA funds 90 % -95% of the project costs on a reimbursements basis. Set forth below shows the amount reimbursed during 2012, 2013, and 2014. As of December 31, 2012, approximately 90% of Runway 35 -17 Rehabilitation Project and Joint Crack Seal and Pavement Markings & Aircraft Rescue Fire Fighting (ARFF) Equipment Project was complete. During 2012, the Aircraft Rescue Fire Fighting (ARFF) Vehicle was purchased at lump sum. During 2013, the Airport closed the two aforementioned projects and began Master Plan Update Project. During 2014, the Airport continued implementing Master Plan Update and started multiple projects funded by AIP Grant 37. The amount reimbursed during 2014, 2013, and 2012 was $502,672, $218,188, and $1,146,935 respectively. This explains significant increase and decrease during 2013 and 2014. Airport Improvement Proiect (AIPI Reimhursamants AIP Grant# 2014 2013 2012 33 State 122,810 AIP Project Description Year Project FAA and Year Grant# 422,407 Awarded Cost Share Local Completed 201,315 0 0 Total 502,672 Match 3,314 33 Runway 35-17 Rehabilitation 2010 1 14,637,433 13,905,561 731,872 2013 34 Aircraft Rescue Fire Fighting (ARFF) Vehicle 2011 505,631 480,349 25,282 2012 Joint Crack Seal and Pavement 35 Markings Project & Aircraft Rescue Fire Fighting (ARFF) Equipment 2012 524,500 472,050 52,450 2013 36 Master Plan Update 2013 631,557 568,401 63,156 in progress Taxiway A Extension and Aircraft Rescue Fire Fighting (ARFF) Pavement Rehabilitation Security System Upgrade 37 2014 1,396,140 1,256,526 139,614 in progress Electrical Assessment DBE Goal Setting East Side Development Airfield Lighting Electrical Vault Reimhursamants AIP Grant# 2014 2013 2012 33 0 122,810 2,411,279 34 0 0 480,349 35 0 34,319 422,407 36 301,357 61,059 0 37 201,315 0 0 Total 502,672 218 3,314 P AUGUSTA REGIONAL AIRPORT AT BUSH FIELD AUGUSTA, GEORGIA MANAGEMENT'S DISCUSSION AND ANALYSIS Operating Expenses During 2014, fuel expense decreased by 47.4 %. It reflects decreased fuel purchases associated with decrease in military and non - military sales due to Airport's ceasing buy back arrangements effective March 25, 2013 (see Page 7). Contractual services and personnel salaries /benefits increased by 18.0% and 5.2 %. Overall, the 2014 operating expense decreased by 12.1 % as compared to 2013 Percent Percent Change Change 2014 2013 2012 from 2013 from 2012 Personnel salaries /benefits Communications and utilities Repairs and maintenance Fuelexpense Contractual services Insurance Supplies and materials Depreciation Miscellaneous expense Other expense Bad debt expense Total Operating Expense Non - operating Expenses $ 5,252,691 $ 5,313,547 $ 5,082,946 -1.1% 4.5% 738,000 731,345 714,419 0.9% 2.4% 380,500 310,417 257,198 22.6% 20.7% 2,495,551 4,746,424 9,912,070 - 47.4% - 52.1% 965,493 530,002 633,094 82.2% -16.3% 197,767 165,213 153,511 19.7% 7.6% 118,035 787,719 176,741 - 85.0% 345.7% 2,445,035 2,115,957 2,121,892 15.6% -0.3% 620,438 532,957 423,835 16.4% 25.7% 824,815 747,162 686,050 10.4% 8.9% 999 - 30,887 - - 100.0% $14,039,324 $15,980,743 $20,192,643 -12.1% - 20.9% Non - operating expenses comprise interest on long term debt as explained on Page 12. Interest expense was $1,037,102, $1,037,094, and $1,037,094 in 2014, 2013, and 2012, respectively. AUGUSTA REGIONAL AIRPORT AT BUSH FIELD AUGUSTA, GEORGIA MANAGEMENT'S DISCUSSION AND ANALYSIS Changes in Net Position The changes in net position for the years ended December 31, 2014, 2013, and 2012 are as follows: Operating revenue Operating expense, excluding depreciation Operating income before depreciation Depreciation expense Operating income after depreciation Non - operating revenue Non - operating expense Transfers Change in net position Net position, beginning of year Net position, end of year - 816,763 - 526,882 - 1,085,191 Percent Percent 2,803,401 2,339,966 5,651,921 Change Change - 1,037,102 - 1,037,094 - 1,037,094 from from 2014 2013 2012 2013 2012 $13,222,561 $15,453,861 $19,107,452 - 14.4% - 19.1% - 11,594,289 - 13,864,786 - 18,070,751 -16.4% -23.3% 1,628,272 1,589,075 1,036,701 2.5% 53.3% - 2.445.035 - 2.115.957 - 2.121.892 15.6% -0.3% - 816,763 - 526,882 - 1,085,191 55.0% - 51.4% 2,803,401 2,339,966 5,651,921 19.8% - 58.6% - 1,037,102 - 1,037,094 - 1,037,094 0.0% 0.0% 0 0 10,650 - 100.0% $949,536 $775,990 $3,529,636 22.4% - 78.0% 76,941,475 76,165,485 72,635,850 1.0% 4.9% $77,891,011 $76,941,475 $76,165,486 1.2% 1.0% Change in net position decreased by 22.4% during 2014 and by 78.0% during 2013. It is due primarily to the decrease in non - operating revenue as stated on page 8. fil AUGUSTA REGIONAL AIRPORT AT BUSH FIELD AUGUSTA, GEORGIA MANAGEMENT'S DISCUSSION AND ANALYSIS Financial Position The statements of net position present the financial position of the Airport at the end of the year. The statement includes all assets and liabilities of the Airport. Net position is the difference between total assets and total liabilities and can be viewed as the indicator of the financial health of the Airport. During 2014, net position increased by 1.2% over 2013. Net position increased by 1.0% over 2012. Current liabilities 3,591,902 2,940,218 5,312,705 Percent Percent Noncurrent liabilities 19,981,642 19,759,273 19,727,309 Change Change Total liabilities $23,573,544 $22,699,491 $25,040,014 from from Unrestricted 2014 2013 2012 2013 2012 Current assets $ 7,448,345 $ 6,454,650 $ 8,093,428 15.4% - 20.2% Restricted investments 20,741,172 19,175,364 17,953,861 8.2% 6.8% Capital assets, net 73,275,038 74,010,952 75,158,210 -1.0% -1.5% Total assets $101,464,555 $99,640,966 $101,205,499 1.8% -1.5% Current liabilities 3,591,902 2,940,218 5,312,705 22.2% - 44.7% Noncurrent liabilities 19,981,642 19,759,273 19,727,309 1.1% 0.2% Total liabilities $23,573,544 $22,699,491 $25,040,014 3.9% -9.3% Net investment in capital assets 53,670,038 54,405,952 55,553,210 -1.4% -2.1% Restricted for capital outlay 12,191,773 11,140,196 10,432,884 9.4% 6.8% Restricted for debt service 8,549,399 8,035,168 7,520,977 6.4% 6.8% Unrestricted 3,479,801 3,360,159 2,658,414 3.6% 26.4% Total net position $77,891,011 $76,941,475 $76,165,485 1.2% 1.0% Total assets increased by 1.8% in 2014 compared to 2013. The increase is the result of the increase in cash and cash equivalent and cash for investments. Total assets decreased 1.5% in 2013 compared to 2012. The decrease is the result of the depreciation of the depreciable capital assets. Total liabilities increased by 3.9% in 2014 compared to 2013. The increase is due to receipts of multiple vendor invoices dated December 31, 2014 including retainage payable. Total liabilities decreased by 9.3% in 2013 compared to 2012. The decrease is due to timely receipts and payments of the vendor invoices during and at the end of the year including retainage payable. The majority of the Airport's net position reflects its investment in capital assets less the related indebtedness outstanding used to acquire those capital assets. The Airport uses these capital assets to provide services to the airlines and to its passengers and visitors; consequently, these assets are not available for future spending. The Airport reports its net investment in capital assets. The resources required to repay the debt must be provided annually from operations since it is unlikely that the capital assets themselves will be liquidated to pay the liabilities. 11 AUGUSTA REGIONAL AIRPORT AT BUSH FIELD AUGUSTA, GEORGIA MANAGEMENT'S DISCUSSION AND ANALYSIS Financial Position (Continued) Restricted net assets reflect the portion of the Airport's net position restricted for debt and capital projects that are subject to external restrictions by the bond resolution, and PFCs that are restricted by federal regulations. The unrestricted portion of net position, $3.5 million, may be used to meet the Airport's ongoing obligations. Airport Capital Assets and Capital Improvement Plan As of year ended December 31, 2014, 2013, and 2012, the Airport had capital assets of $73.3 million, $74.0 million, and $75.2 million respectively. The majority of these balances are land, buildings, other property and equipment; net of any related accumulated depreciation. For these years, the balance in construction in progress was $6.8 million, $5.8 million, $26.2 million respectively. For 2014, the list below identifies the components of the Airport's construction in progress account. Additional information regarding the Airport's capital assets can be found in Note 3 in the Note to Financial Statements. CONSTRUCTION IN PROGRESS ICIPI Total Construction in Progress $6,832,110 Long -term Debt In February 2005, the Airport issued $19,605,000 in Airport Revenue Bonds for the purpose of paying the costs of acquiring, constructing and installing a new airline passenger terminal and certain other capital improvements. The bonds are divided into three issues with $6,200,000 paying 5.45% due on January 1, 2031, $4,415,000 paying 5.35% due on January 1, 2028, and $8,990,000 paying 5.15% due on January 1, 2035. During 2014 and 2013, the Augusta Aviation Commission did not procure additional long -term debt. Additional information on the Airport's long-term debt can be found in Note 5 of the notes to the financial statements of this report. 12 2014 Front Door Parking Improvement $5,315,489 ARFF Station Improvement 244,011 General Aviation Apron Design 119,220 Taxiway Extension /ARFF Pavement Rehabilitation 179,862 Consolidated Rental Car Facility 61,330 Credit Card Parking Facility 356,384 Master Plan Update 402,685 Security System Upgrade 96,815 Electrical Assessment 5,863 Loading Bridge Replacement 24,800 DBE Goal Setting 2,715 East Side Development 3,995 Front side Entrance Landscaping 5,926 Airfield Lighting Electrical Vault 13,015 Total Construction in Progress $6,832,110 Long -term Debt In February 2005, the Airport issued $19,605,000 in Airport Revenue Bonds for the purpose of paying the costs of acquiring, constructing and installing a new airline passenger terminal and certain other capital improvements. The bonds are divided into three issues with $6,200,000 paying 5.45% due on January 1, 2031, $4,415,000 paying 5.35% due on January 1, 2028, and $8,990,000 paying 5.15% due on January 1, 2035. During 2014 and 2013, the Augusta Aviation Commission did not procure additional long -term debt. Additional information on the Airport's long-term debt can be found in Note 5 of the notes to the financial statements of this report. 12 AUGUSTA REGIONAL AIRPORT AT BUSH FIELD AUGUSTA, GEORGIA MANAGEMENT'S DISCUSSION AND ANALYSIS Request for Information This financial report is designed to provide a general overview of the Airport's finances for all interested parties. Questions concerning any of the information provided in this report, or request for additional information should be addressed to: Risa Bingham, MBA, CPA Finance Director Augusta Regional Airport, 1501 Aviation Way, Augusta, GA 30906 E -mail: RBingham@augustaga.gov 13 AUGUSTA REGIONAL AIRPORT AT BUSH FIELD AUGUSTA, GEORGIA STATEMENTS OF NET POSITION DECEMBER 31, 2014 AND 2013 ASSETS 2014 2013 CURRENT ASSETS Cash and cash equivalents I nvestments Trade receivables Due from other governments Due from other funds of the Government Inventories Accrued interest receivable Restricted cash and cash equivalents Restricted investments Total current assets NONCURRENT ASSETS Non - depreciable Depreciable, net of accumulated depreciation Total noncurrent assets Total assets LIABILITIES CURRENT LIABILITIES Accounts payable Accrued expenses Due to other funds of the Government Compensated absences Total current liabilities LONG -TERM LIABILITIES Advance from other funds of the Government Revenue bonds payable Total long -term liabilities Total liabilities NET POSITION Net investment in capital assets Restricted for capital outlay Restricted for debt service Unrestricted Total net positior See Notes to Financial Statements. $ 3,138,375 1,434,367 2,266,936 367,860 22,656 205,576 12,575 17,557,015 3,184,157 28,189,517 12,573,262 60,701,776 73,275,038 101,464,555 1,375,912 160,946 1,772,657 282,387 3,591,902 376,642 19,605,000 19,981,642 23,573,544 53,670,038 12,191,773 8,549,399 3,479,801 $ 77,891,011 $ 2,052,458 1,786,033 2,132,213 188,745 22,656 268,797 3,748 19,175,364 25,630,014 11,493,865 62,517,087 74,010,952 99,640,966 1,004,225 140,023 1,521,533 274,437 2,940,218 154,273 19,605,000 19,759,273 22,699,491 54,405,952 11,140,196 8,035,168 3,360,159 $ 76, 941,475 14 AUGUSTA REGIONAL AIRPORT AT BUSH FIELD AUGUSTA, GEORGIA STATEMENTS OF REVENUES, EXPENSES AND CHANGES IN FUND NET POSITION FOR THE YEARS ENDED DECEMBER 31, 2014 AND 2013 Operating revenues Landing fees Terminal area rental Security reimbursements Apron charges FBO revenue Fuel sales Other aeronautical Land and non - terminal fees Terminal food and beverage Rental cars Parking Non - aeronautical Miscellaneous income Total operating revenue 2014 $ 1,158,656 817,540 58,400 1,189,366 44,408 5,248,244 41,576 620,610 70,298 1,487,900 2,368,627 42,236 74,700 13,222,561 2013 $ 1,179,976 796,441 58,400 1,078,140 53,853 8,115,842 39,397 657,157 72,384 1,343,477 2,008,932 48,846 1,016 15,453,861 Operating expenses Personnel compensation and benefits Communications and utilities Repairs and maintenance Fuel expense Contractual services Insurance Supplies and materials Depreciation Miscellaneous expense Other expense Bad debt expense Total operating expenses Operating loss Nonoperating revenues (expenses) Passenger facility charges Customer facility charges Interest income Interest expense Total nonoperating revenues (expenses) Income before capital contributions Capital Contributions Change in net position Net position, beginning of year Net position, end of year See Notes to Financial Statements. 5,252,691 738,000 380,500 2,495,551 965,493 197,767 118,035 2,445,035 620,438 824,815 999 14,039,324 5,313,547 731,345 310,417 4,746,424 530,002 165,213 787,719 2,115,957 532,957 747,162 15,980,743 (816,763) (526,882) 1,090,518 1,144,445 60,036 (1,037,102) 1,257,897 441.134 1,074,276 989,357 12,150 (1,037,094) 1,038,689 511.807 508,402 264,183 949,536 775,990 76,941,475 76,165,485 $ 77,891,011 $ 76,941,475 15 AUGUSTA REGIONAL AIRPORT AT BUSH FIELD AUGUSTA, GEORGIA STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2014 AND 2013 CASH FLOWS FROM OPERATING ACTIVITIES Receipts from customers and users Payments to suppliers Payments to employees Net cash provided by (used in) operating activities 2014 $ 13,382,216 (5,945,350) (5,185,158) 2,251,708 2013 $ 14,374,034 (10,404,703) (4,866,589) (897,258) CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Capital contributions Passenger facility charges Customer facility charges Acquisition and construction of capital assets Interest paid Net cash provided by (used in) capital and related financing activities CASH FLOWS FROM INVESTING ACTIVITIES Purchase of investments Proceeds from sale of investments Interest received Net cash used in investing activities Decrease in cash and cash equivalents Cash and cash equivalents, beginning of year Cash and cash equivalents, end of year Classed as: Cash and cash equivalents Restricted assets: Cash and cash equivalents (Continued) 508,402 1,090,518 1,144,445 (1,709,121) (1,037,102) (2,858) (3,184,157) 351,666 51,209 (2,781,282) (532,432) 21,227,822 $ 20,695,390 264,183 1,074,276 989,357 (968,699) (1,037,094) 322,023 (14,534) 14,482 (52) (575,287) 21,803,109 $ 21,227,822 $ 3,138,375 $ 2,052,458 17,557,015 $ 20,695,390 19,175, 364 $ 21,227,822 16 AUGUSTA REGIONAL AIRPORT AT BUSH FIELD AUGUSTA, GEORGIA STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2014 AND 2013 Reconciliation of operating loss to net cash provided by (used in) operating activities: Operating loss Adjustments to reconcile operating loss to net cash provided by (used in) operating activities: Depreciation Changes in assets and liabilities: Increase in accounts receivable (Increase) decrease in due from other governments Decrease in inventories Increase (decrease) in accounts payable Increase in accrued expenses Increase (decrease) in due to other funds Increase in advances from other funds Increase in compensated absences Net cash provided by (used in) operating activities See Notes to Financial Statements. 2014 2013 $ (816,763) 2,445,035 (134,723) (179,115) 63,221 371,687 20,923 251,124 222,369 7,950 $ 2,251 $ (526,882) 2,115,957 (603,992) 397,590 60,592 (1,505,476) 25,738 (899,575) 26,150 12,640 $ (897,258) WA AUGUSTA REGIONAL AIRPORT AT BUSH FIELD AUGUSTA, GEORGIA NOTES TO FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2014 AND 2013 I : , 1'TV;AW01 J*C1 I [a WK, ir=[OT19Z•1W,1111 [c][01K•i1 � Augusta Regional Airport at Bush Field, (the "Airport"), accounts for its financial position and results of operations in accordance with accounting principles generally accepted in the United States of America (U.S.GAAP) applicable to governmental units. The following is a summary of the significant accounting policies: A. Reporting Entity The Airport provides aviation services to residents of Augusta, Georgia and surrounding areas. The Airport is the only airport within Augusta, Georgia and surrounding areas from which service by the major airlines is available. These financial statements present only an enterprise fund and are not intended to present fairly the financial position and results of operations of Augusta- Richmond County, Georgia, (the "Government"), in conformity with accounting principles generally accepted in the United States of America. The Airport is an integral part of the Government's financial reporting entity, and its results are included in the financial report of the Government, which should be read in conjunction with the financial statements. B. Measurement Focus, Basis of Accounting and Basis of Presentation The accounting and reporting policies of the Airport conform to accounting principles generally accepted in the United States of America. The financial statements are prepared on the accrual basis of accounting, whereby revenues are recognized as earned and expenses are recognized as incurred. Proprietary funds distinguish operating revenues and expenses from non - operating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund's principal ongoing operations. The principal operating revenues of the Airport are charges for goods and services provided. Operating expenses of the Airport include the cost of these goods and services, administrative expenses and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as non - operating revenues and expenses. When both restricted and unrestricted resources are available for use, it is the Airport's policy to use restricted resources first, then unrestricted resources as they are needed. 18 NOTES TO FINANCIAL STATEMENTS NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) C. Cash and Cash Equivalents For the purpose of financial statement presentation, the Airport considers all highly liquid investments with an original maturity of less than one year, or with insignificant early withdrawal penalties, to be cash equivalents. Cash equivalents include amounts in certificates of deposit, repurchase agreements, and U.S. Treasury bills, and are stated at cost, which approximates market. All deposits are stated at cost plus accrued interest, which reasonably estimates fair value. The State of Georgia's statutes authorize the Airport to invest in obligations of the United States government and agencies thereof, general obligations of the State of Georgia or any of its political subdivisions, or banks and savings and loan associations to the extent that they are secured by the Federal Deposit Insurance Corporation. D. Investments Investments are reported at fair value. Fair value is determined as follows: short-term investments are reported at cost, which approximates fair value; securities traded on national exchanges are valued at current prices or current prices of similar securities; securities for which an established market does not exist are reported at estimated fair value using selling prices for similar investments for which there is an active market. E. Trade Receivables The Airport operates a fixed base operation facility and provides credit in the normal course of business to customers. The Airport performs ongoing credit evaluations of its customers and monitors credit risk of specific customers, historical trends, and other information. Credit losses, when realized, have not been significant. F. Inventories All items in inventory are valued at lower of cost (first in, first out) or market, and are accounted for using the consumption method. G. Restricted Assets and Liabilities Cash invested in the Airport's sinking fund for the related revenue bond liability is restricted because its use is limited by applicable debt covenants. Cash invested in the Airport's Passenger Facility Charge account is restricted because its use is limited by applicable Passenger Facility Charge agreements. W1 NOTES TO FINANCIAL STATEMENTS NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) H. Capital Assets Property and equipment are recorded by the Airport at original cost at the time of acquisition. Donated capital assets are recorded at their estimated fair value at the date of donation. Improvements are capitalized and depreciated over the remaining estimated useful lives of the related capital assets, as applicable. Minimum capitalization costs are $5,000 for all categories of capital assets. Gains and losses are credited or charged to operations. The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend useful lives are expensed as incurred. Major outlays for capital assets and major improvements are capitalized as projects are constructed. Interest incurred during the construction period of capital assets is included as part of the capitalized value of the assets constructed. No interest expense was capitalized during the fiscal years ending December 31, 2014 or 2013. Depreciation is charged to operating income over the estimated useful lives of assets using the straight -line method. The estimated lives used in determining depreciation are as follows: I. Long -Term Obligations Long -term debt and other long -term obligations are reported as liabilities in the statement of net position. Bond premiums and discounts are deferred and amortized over the life of the bonds using the effective interest method. Bonds payable are reported net of the applicable bond premium or discount. Bond issuance costs are expensed in the period incurred. K11 Years Building and other improvements 10 -50 Vehicles 3-8 Machinery and equipment 5-10 Office furniture and fixtures 3-8 Other capital items 3 -12 Infrastructure 30 Information tech - hardware 5 Information tech - software 3 I. Long -Term Obligations Long -term debt and other long -term obligations are reported as liabilities in the statement of net position. Bond premiums and discounts are deferred and amortized over the life of the bonds using the effective interest method. Bonds payable are reported net of the applicable bond premium or discount. Bond issuance costs are expensed in the period incurred. K11 NOTES TO FINANCIAL STATEMENTS NOTE 1. NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) J. Compensated Absences The vacation policy of the Airport provides for the accumulation of up to 43 days earned vacation leave with such leave being fully vested when earned. For the Airport's financial statements, an expense and a liability for compensated absences and the salary- related payments are recorded as leave is earned. The Airport has assumed a first -in, first -out method of using accumulated compensated time. The portion of that time that is estimated to be used in the next fiscal year has been designated as a current liability in the financial statements. No accrual has been established for accumulated sick leave of employees since it is the Airport's policy to record the cost of sick leave only when it is used. K. Use of Estimates Management uses estimates and assumptions in preparing these financial statements in accordance with accounting principles generally accepted in the United States of America. Those estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses. Actual results could differ from those estimates. DEPOSITS AND INVESTMENTS Total deposits as of December 31, 2014 and December 31, 2013, are summarized as follows: As reported in the Statement of Net Position: Cash and cash equivalents Investments Restricted cash and cash equivalents Restricted investments Cash deposited with financial institutions Certificates of deposit December 31, 2014 $ 3,138, 375 1,434,367 17,557,015 3,184,157 $ 25,313,914 $ 20,695,390 4,618,524 $ 25,313,914 As of December 31, 2014, the Airport held the following investments: December 31, 2013 $ 2,052,458 1,786,033 19,175, 364 $ 23,013,855 $ 21,227,822 1,786,033 $ 23,013,855 Investments Maturities Fair Value Certificates of deposit 24 month weighted average $ 4,618,524 21 NOTES TO FINANCIAL STATEMENTS NOTE 2. DEPOSITS AND INVESTMENTS (CONTINUED) As of December 31, 2013, the Airport held the following investments: Investments Maturities Fair Value Certificates of deposit 21 month weighted average $ 1,786,033 Credit Risk. State statutes authorize the Airport to invest in obligations of the State of Georgia or other states; obligations issued by the U.S. government; obligations fully insured or guaranteed by the U.S. government or by a government agency of the United States; obligations of any corporation of the U.S. government; prime bankers' acceptances; the local government investment pool established by state law; repurchase agreements; and obligations of other political subdivisions of the State of Georgia. Interest Rate Risk. The Airport's investment policy states that the Airport will structure its portfolio to meet cash requirements for ongoing operations, thereby avoiding the need to sell securities prior to their maturity. The policy also emphasizes the purchase of shorter term or more liquid investments. The policy does not place formal limits on investment maturities. Custodial Credit Risk — Deposits. The Airport does not have a formal custodial credit risk policy. Custodial credit risk for deposits is the risk that, in the event of the failure of a depository financial institution, a government will not be able to recover deposits or will not be able to recover collateral securities that are in the possession of an outside party. State statutes require all deposits and investments (other than federal or state government instruments) to be collateralized by depository insurance, obligations of the U.S. government, or bonds of public authorities, counties, or municipalities. As of December 31, 2014 and 2013, the Airport did not have any balances exposed to custodial credit risk as uninsured and uncollateralized as defined by GASB pronouncements. Custodial Credit Risk — Investments. Custodial credit risk for investments is the risk that, in the event of the failure of the counterparty, the Airport will not be able to recover the value of its investments or collateral securities that are in the possession of an outside party. State statutes require all investments (other than federal or state government instruments) to be collateralized by depository insurance, obligations of the U.S. government, or bonds of public authorities, counties, or municipalities. 22 NOTES TO FINANCIAL STATEMENTS NOTE 3. CAPITAL ASSETS Capital assets activity for the year ended December 31, 2014 is as follows: depreciation for: Beginning Ending (2,329,341) Balance Additions Transfers Disposals Balance Capital assets, not (54,779) - - (1,421,713) Buildings being depreciated: (998,680) - - (12,204,895) Vehicles Land $ 5,741,152 $ - $ - $ - $ 5,741,152 Construction in progress 5,752,713 1,079,397 - - 6,832,110 Total 11,493,865 1,079,397 - - 12,573,262 Capital assets, being - - - (166,144) Information tech - hardware depreciated: (14,892) - - (102,028) Information tech - software Site improvements 6,771,716 14,900 - - 6,786,616 Building improvements 2,360,813 - - - 2,360,813 Buildings 42,040,821 - - - 42,040,821 Vehicles 3,137,208 470,802 - - 3,608,010 Machinery and equipment 3,023,694 - - - 3,023,694 Furniture and fixtures 813,983 144,022 - - 958,005 Other capital 166,144 - - - 166,144 Information tech - hardware 117,304 - - - 117,304 Information tech - software 43,116 - - - 43,116 Infrastructure 40,515,216 - - - 40,515,216 Total 98,990,015 629,724 - - 99,619,739 Less accumulated depreciation for: Site improvements (2,329,341) (407,300) - - (2,736,641) Building improvements (1,366,934) (54,779) - - (1,421,713) Buildings (11,206,215) (998,680) - - (12,204,895) Vehicles (2,120,015) (171,947) - - (2,291,962) Machinery and equipment (2,006,200) (94,320) - - (2,100,520) Furniture and fixtures (596,637) (62,007) - - (658,644) Other capital (166,144) - - - (166,144) Information tech - hardware (87,136) (14,892) - - (102,028) Information tech - software (34,048) (2,097) - - (36,145) Infrastructure (16,560,258) (639,013) - - (17,199,271) Total (36,472,928) (2,445,035) - - (36,917,963) Total capital assets, being depreciated, net 62,517,087 (1,815,311) - 60,701,776 Total capital assets, net $ 74,010,952 $ (735,914) $ - $ - $ 73,275,038 W NOTES TO FINANCIAL STATEMENTS NOTE 3. CAPITAL ASSETS (CONTINUED) Capital assets activity for the year ended December 31, 2013 is as follows: R Beginning Ending Balance Additions Transfers Disposals Balance Capital assets, not being depreciated: Land $ 5,741,152 S - $ - $ - $ 5,741,152 Construction in progress 26,234,781 569,457 (21,051,525) - 5,752,713 Total 31,975,933 569,457 (21,051,525) - 11,493,865 Capital assets, being depreciated: Site improvements 3,470,666 37,251 3,263,799 - 6,771,716 Building improvements 2,360,813 - - - 2,360,813 Buildings 39,476,407 - 2,564,414 - 42,040,821 Vehicles 2,862,772 318,874 - (44,438) 3,137,208 Machinery and equipment 2,994,654 29,040 - - 3,023,694 Furniture and fbdures 813,983 - - - 813,983 Other capital 166,144 - - - 166,144 Information tech - hardware 103,227 14,077 - - 117,304 Information tech - software 43,116 - - - 43,116 Infrastructure 25,291,904 - 15,223,312 - 40,515,216 Total 77,583,686 399,242 21,051,525 (44,438) 98,990,015 Less accumulated depreciation for: Site improvements (2,142,525) (186,816) - - (2,329,341) Building improvements (1,309,084) (57,850) - - (1,366,934) Buildings (10,291,794) (914,421) - - (11,206,215) Vehidles (2,031,037) (133,416) - 44,438 (2,120,015) Machinery and equipment (1,920,809) (85,391) - - (2,006,200) Furniture and fbdures (534,630) (62,007) - - (596,637) Other capital (166,144) - - - (166,144) Information tech - hardware (76,936) (10,200) - - (87,136) Information tech - software (31,951) (2,097) - - (34,048) Infrastructure (15,896,499) (663,759) - (16,560,258) Total (34,401,409) (2,115,957) - 44,438 (36,472,928) Total capital assets, being depreciated, net 43,182,277 (1,716,715) 21,051,525 - 62,517,087 Total capital assets, net $ 75,158,210 $ (1,147,258) Z - $ - $ 74,010,952 R NOTES TO FINANCIAL STATEMENTS NOTE 4. LEASES The Airport is lessor of terminal space, land and buildings at Augusta Regional Airport at Bush Field under various operating leases. Some of the leases provide for additional payments based on usage activity in addition to non - cancelable amounts of fixed rates. During 2014 and 2013, rental income totaled $817,540 and $796,441, respectively, for the Augusta Regional Airport at Bush Field. NOTE 5. LONG TERM DEBT The following is a summary of long -term debt activity for the year ended December 31, 2014: Beginning Ending Due Within Balance Additions Reductions Balance One Year Revenue bonds $ 19,605,000 $ - $ - $ 19,605,000 $ - Compensated absences 274,437 243,305 (235,355) 282,387 282,387 Total long -term liabilities $ 19,879,437 $ 243,305 $$ 2� $ 19,887,387 $ 282,387 The following is a summary of long -term debt activity for the year ended December 31, 2013: Beginning Ending Due Within Balance Additions Reductions Balance One Year Business -type activities: Revenue bonds $ 19,605,000 $ - $ - $ 19,605,000 $ - Compensated absences 261,797 213,465 (200,825) 274,437 274,437 Total long -term liabilities $ 19,866,797 $ 213,465 $ 200,825 $ 19,879,437 $ 274,437 Revenue Bonds The Airport issues bonds to provide funds for various projects. The revenue bonds outstanding as of December 31, 2014 and 2013 are as follows: Balance at Interest December 31, Rate 2014 Airport, Series 2005A 5.15% $ 8,990,000 Airport, Series 2005E 5.35% 4,415,000 Airport, Series 2005C 5.45% 6,200,000 $ 19,605,000 Balance at December 31, 2013 $ 8,990,000 4,415,000 6,200,000 $ 19,605,000 25 NOTES TO FINANCIAL STATEMENTS NOTE 5. LONG -TERM DEBT (CONTINUED) Revenue Bonds (Continued) The Airport Passenger Facility Charge and General Revenue Bonds Series 2005A and 2005B are payable through 2035 primarily from Passenger Facility Charge No. 99 -01 -C -AGS approved by the Federal Aviation Administration in 2004. Should the proceeds of the Passenger Facility Charge not be sufficient to pay when due interest and principal on Series 2005A and 2005B bonds, the interest and principal shortfall will be paid from Airport Net General Revenues, derived by the 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 those passenger facility charge revenues that are allocable to the 2005 Project ( "PFC Revenues "). The Series 2005C Revenue Bonds are payable through 2031 solely from and secured by a first priority pledge and/or lien on Net General Revenues only. The Series 2005A bonds are payable in semi - annually interest only payments of 5.15% beginning July 1, 2005 and principal payable annually beginning January 2031 ranging from $540,000 to $2,275,000 through January 1, 2035. The Series 20058 bonds are payable in semi - annually interest only payments of 5.35% beginning July 1, 2005 and principal payable annually beginning January 2025 ranging from $130,000 to $1,505,000 through January 1, 2028. The Series 2005C bonds are payable in semi - annually interest only payments of 5.45% beginning July 1, 2005 and principal payable annually beginning January 2028 ranging from $1,315,000 to $1,760,000 through January 1, 2031. Pursuant to the Bond Resolution, the Augusta Regional Airport is subject to meeting certain financial covenants related to the Airport Revenue Bonds. The financial covenants include requirements to (i) 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) produce net general revenues, together with other available moneys, in each fiscal year which will (a) equal at least 125 percent of the debt service requirement on all general revenue bonds then outstanding for the sinking fund year ending on the next January 1 and at least 100 percent of the debt service or other amounts payable on all subordinate bonds and other airport obligations payable from net general revenues then outstanding for the year of computation, (b) enable the Aviation Commission to make all required payments, if any, into the debt service reserve account, the PFC debt service reserve account, the rebate fund, the renewal and replacement fund and on any contract or other airport obligation, (c) enable the aviation commission to accumulate an amount to be held in the capital improvement fund, which in the judgment of the Aviation Commission is adequate to meet the costs of major renewals, replacements, repairs, additions, betterments, and improvements to the Airport, necessary to keep the same in good operating condition or as is required by any governmental agency having jurisdiction over the Airport, and (d) remedy all deficiencies in required payments from the revenue fund from prior fiscal years. As of December 31, 2014 and 2013, the Airport was in compliance with all covenants. m NOTES TO FINANCIAL STATEMENTS 1CeIl0" NOTE 6. LONG -TERM DEBT (CONTINUED) Annual debt service requirements to maturity for the revenue bonds as of December 31, 2014 are as follows: Year ending December 31, 2015 2016 2017 2018 2019 2020-2024 2025-2029 2030-2034 PENSION PLANS 1945 Plan Plan Description Principal Interest Total $ - $ 1,037,088 $ 1,037,088 - 1,037,088 1,037,088 - 1,037,088 1,037,088 - 1,037,088 1,037,088 - 1,037,088 1,037,088 1,355,000 5,185,438 6,540,438 7,945,000 4,012,953 11,957,953 10,305,000 1,650,143 11,955,143 $ 19,605,000 $ 16,033,974 $ 35,638,974 The 1945 Plan (the "1945 Plan "), a single - employer defined benefit pension plan, was available to all former Richmond County employees hired prior to October 1, 1975 that met the Plan's age and length of service requirements. Participants in the Plan who retired at or after age 60 are entitled to a monthly benefit equal to 2% of average earnings multiplied by years of service. The Plan provides death and disability benefits. These benefit provisions and all other requirements including amendments are established by Government ordinance. The Plan also provides for reduced benefits if the participant elects to retire after attaining age 50 and completing 15 years of service. This is a closed retirement plan (new employees may not participate in the Plan). The 1945 Plan does not issue a stand -alone financial statement report. Participant Data At January 1, 2014, the date of the most recent actuarial valuation, there were 27 participants as follows: Active participants Retirees and beneficiaries 2 25 27 27 NOTES TO FINANCIAL STATEMENTS NOTE 6. PENSION PLANS (CONTINUED) 1945 Plan (Continued) As of the most recent valuation date, January 1, 2014, the funded status of the 1945 Plan was as follows: The required schedule of funding progress immediately following the notes to the financial statements presents multiyear trend information about whether the actuarial value of the 1945 Plan net position is increasing or decreasing over time relative to the actuarial accrued liability. Actuarial valuations involve estimates of the value of reported amounts and assumptions about the probability of events far into the future, and actuarially determined amounts are subject to continual revision as results are compared to past expectations and new estimates are made about the future. Actuarial calculations reflect long -term perspective. Calculations are based on the substantive plan in effect as of January 1, 2014. Funding Policy Employees are required to make contributions to the 1945 Plan equal to 5% of earnings. The Government is required to contribute the remaining amounts necessary to fund the 1945 Plan. If a participant terminates employment prior to completion of 10 years of credited service, the participant receives a lump -sum amount equal to his total contributions to the 1945 Plan, with 5% interest computed from January 1, 1997. After completion of at least 10 years of credited service, the participant receives a monthly benefit deferred to his normal retirement date, equal to the benefit computed as for normal retirement multiplied by the percentage based on completed years of credited service, as follows: 50% after 10 years, increasing 10% each year to 100% after 15 years of credited service. 28 Actuarial Actuarial Accrued Unfunded Actuarial Value of Liability (AAL) AAL Valuation Assets Entry Age (UAAL) Date (a) (b) (b-a) 11251=13 $ 6,423,808 $ 8,756,203 $ 2,332,395 The required schedule of funding progress immediately following the notes to the financial statements presents multiyear trend information about whether the actuarial value of the 1945 Plan net position is increasing or decreasing over time relative to the actuarial accrued liability. Actuarial valuations involve estimates of the value of reported amounts and assumptions about the probability of events far into the future, and actuarially determined amounts are subject to continual revision as results are compared to past expectations and new estimates are made about the future. Actuarial calculations reflect long -term perspective. Calculations are based on the substantive plan in effect as of January 1, 2014. Funding Policy Employees are required to make contributions to the 1945 Plan equal to 5% of earnings. The Government is required to contribute the remaining amounts necessary to fund the 1945 Plan. If a participant terminates employment prior to completion of 10 years of credited service, the participant receives a lump -sum amount equal to his total contributions to the 1945 Plan, with 5% interest computed from January 1, 1997. After completion of at least 10 years of credited service, the participant receives a monthly benefit deferred to his normal retirement date, equal to the benefit computed as for normal retirement multiplied by the percentage based on completed years of credited service, as follows: 50% after 10 years, increasing 10% each year to 100% after 15 years of credited service. 28 UAAL as a Percentage Funded Covered of Covered Ratio Payroll Payroll (arb) (c) (b-ayc) 73.4 % $ 132,346 1,762.3 % The required schedule of funding progress immediately following the notes to the financial statements presents multiyear trend information about whether the actuarial value of the 1945 Plan net position is increasing or decreasing over time relative to the actuarial accrued liability. Actuarial valuations involve estimates of the value of reported amounts and assumptions about the probability of events far into the future, and actuarially determined amounts are subject to continual revision as results are compared to past expectations and new estimates are made about the future. Actuarial calculations reflect long -term perspective. Calculations are based on the substantive plan in effect as of January 1, 2014. Funding Policy Employees are required to make contributions to the 1945 Plan equal to 5% of earnings. The Government is required to contribute the remaining amounts necessary to fund the 1945 Plan. If a participant terminates employment prior to completion of 10 years of credited service, the participant receives a lump -sum amount equal to his total contributions to the 1945 Plan, with 5% interest computed from January 1, 1997. After completion of at least 10 years of credited service, the participant receives a monthly benefit deferred to his normal retirement date, equal to the benefit computed as for normal retirement multiplied by the percentage based on completed years of credited service, as follows: 50% after 10 years, increasing 10% each year to 100% after 15 years of credited service. 28 NOTES TO FINANCIAL STATEMENTS NOTE 6. PENSION PLANS (CONTINUED) 1945 Plan (Continued) Plan Disclosures Effective January 1, 2014, the Plan implemented the provisions of Governmental Accounting Standards Board (GASB) Statement No. 67, Financial Reporting for Pension Plans — an amendment of GASB Statement No. 25, which significantly changed the disclosures required related to the Plan. The information disclosed below is presented in accordance with this new standard. The Plan does not issue separate financial statements. Net Pension Liability The components of the net pension liability of the Government at December 31, 2014 were as follows: Total pension liability Plan fiduciary net position Government's net pension liability Plan fiduciary net position as a percentage of the total pension liability $ 8,450,282 6,675,015 $ 1,775,267 79.0% The required schedule of changes in the Government's net pension liability and related ratios immediately following the notes to the financial statements presents multiyear trend information about whether the value of plan assets is increasing or decreasing over time relative to the total pension liability. Actuarial assumptions. The total pension liability was determined by an actuarial valuation as of December 31, 2014. The following actuarial assumptions applied to all periods included in the measurement: Inflation 3.0% Salary increases, including inflation 5.5% Investment rate of return 8.0 %, including inflation Mortality rates were based upon the RP -2000 mortality table for healthy lives and the 1965 Railroad Board Ultimate mortality Table for disabled lives. KN NOTES TO FINANCIAL STATEMENTS NOTE 6. PENSION PLANS (CONTINUED) 1945 Plan (Continued) Net Pension Liability (Continued) Discount rate. The discount rate used to measure the total pension liability was 8.0 %. The projection of cash flows used to determine the discount rate assumed that plan member contributions will be made at the current contribution rate and that Government contributions will be made at rates equal to the difference between actuarially determined contribution rates and the member rate. Based on those assumptions, the pension plan's fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long -term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability. Sensitivity of the net pension liability to changes in the discount rate. The following table presents the net pension liability of the Government, calculated using the discount rate of 8.0 %, as well as what the Government's net pension liability would be if it were calculated using a discount rate that is 1- percentage -point lower (7.0 %) or 1- percentage -point higher (9.0 %) than the current rate: 1% Decrease (7.o %) Current Discount Rate (8.0%) I% Increase (9.0 %) $ 2,409,514 $ 1,775,267 $ 1,219,691 Actuarial valuations involve estimates of the value of reported amounts and assumptions about the probability of events far into the future, and actuarially determined amounts are subject to continual revision as results are compared to past expectations and new estimates are made about the future. Actuarial calculations reflect a long -term perspective. Calculations are based on the substantive plan in effect as of December 31, 2014 and the current sharing pattern of costs between employer and employee. W NOTES TO FINANCIAL STATEMENTS NOTE 6. PENSION PLANS (CONTINUED) 1945 Plan (Continued) Annual Pension Cost and Net Pension Obligation (Continued) The Government's annual pension cost and net pension obligation for the 1945 Plan for the current year is as follows: December 31, 2014 Derivation of Annual Pension Cost Annual Required Contribution $ 290,565 Interest on Net Pension Obligation (5,653) Amortization of Net Pension Obligation 5,964 Annual Pension Cost $ 290,876 Derivation of Net Pension Asset Annual Pension Cost $ 290,876 Actual Contributions to Plan 290,565 Decrease in Net Pension Asset 311 Net Pension Asset as of December 31, 2013 (70,660) Net Pension Asset as of December 31, 2014 $ (7 Basis of Valuation Current valuation date January 1, 2014 Annual return on invested Plan assets 8.00% Projected annual salary increases 5.00% Expected annual inflation 3.00% Actuarial value of assets Market Value Actuarial cost method Projected Unit Credit Amortization method Level Percent of Pay (Closed) Remaining amortization period Average future working lifetime Trend Information for The Plan Net Pension Fiscal Annual Actual Percentage Obligation Year Pension Government of APC (Asset) - Beginning Cost (APC) Contribution Contributed End of Year 1/1/2014 $ 290,876 $ 290,565 1/1/2013 336,834 299,605 1/1/2012 257,798 291,502 99.9 % $ (70,349) 88.9 (70,660) 113.1 (107,889) 31 NOTES TO FINANCIAL STATEMENTS NOTE 6. PENSION PLANS (CONTINUED) General Retirement Plan Description Former City of Augusta employees hired after March 1, 1949 and before March 1, 1987, whose age did not exceed 35 years at the time of their employment and are not participants of the 1977 Plan are covered under the General Retirement Plan, a single - employer defined benefit pension plan. Pension benefits vest after an employee is 45 years of age and has 15 years of full -time employment. An employee may retire at age 60 with 25 years of service and receive annual pension benefits equal to 2% of the employee's average salary earned during the last three years of employment, multiplied by the number of full -time years of employment. The Plan provides death and disability benefits. These benefit provisions and all other requirements including amendments are established by Government ordinance. All full -time employees hired before July 1, 1980 must contribute 8% of gross earnings and employees hired after July 1, 1980 must contribute 5% of gross earnings to the Plan, with the Government contributing remaining amounts sufficient to provide future pensions. This is a closed retirement plan (new employees may not participate in the Plan). The General Retirement Plan does not issue a stand -alone financial statement report. Participant Data At January 1, 2014, the date of the most recent actuarial valuation, there were 263 participants as follows: Active participants 71 Retirees and beneficiaries 182 Vested terminated 10 263 As of the most recent valuation date, January 1, 2014, the funded status of the General Retirement Plan was as follows: 32 Actuarial UAAL as a Actuarial Accrued Unfunded Actuarial Value of Liability (AAL) AAL Valuation Assets Entry Age (UAAL) Date (a) (b) (be) 121312013 $ 64,281,414 $ 82,674,584 $ 18,413,170 32 UAAL as a Percentage Funded Covered of Covered Ratio Payroll Payroll (alb) W (b-a>/c) 77.7 % $ 2,906,852 633.4 % 32 NOTE 6. PENSION PLANS (CONTINUED) General Retirement (Continued) The required schedule of funding progress immediately following the notes to the financial statements presents multiyear trend information about whether the actuarial value of the General Retirement Plan position is increasing or decreasing over time relative to the actuarial accrued liability. Actuarial valuations involve estimates of the value of reported amounts and assumptions about the probability of events far into the future, and actuarially determined amounts are subject to continual revision as results are compared to past expectations and new estimates are made about the future. Actuarial calculations reflect long -term perspective. Calculations are based on the substantive plan in effect as of January 1, 2014. Funding Policy Employer contributions for 2014 are determined as part of the January 1, 2013 actuarial valuation using the frozen entry age cost method. The unfunded accrued liability is composed of pieces that are amortized over various periods to comply with Georgia law as a level percentage of payroll. When the actuarial value of assets exceeds 150% of the present value of accrued benefits, the Official Code of Georgia Annotated states that there is no minimum required contribution. The significant actuarial assumptions used to compute pension contribution requirements are the same as those used to determine the standard measure of the pension obligation. Plan Disclosures Effective December 31, 2014, the Plan implemented the provisions of Governmental Accounting Standards Board (GASB) Statement No. 67, Financial Reporting for Pension Plans — an amendment of GASB Statement No. 25, which significantly changed the disclosures required related to the Plan. The information disclosed below is presented in accordance with this new standard. The Plan does not issue separate financial statements. Net Pension Liability The components of the net pension liability of the Government at December 31, 2014 were as follows: Total pension liability Plan fiduciary net position Government's net pension liability Plan fiduciary net position as a percentage of the total pension liability $ 90,981,240 71,328,822 $ 19,652,418 78.4% 33 NOTES TO FINANCIAL STATEMENTS NOTE 6. PENSION PLANS (CONTINUED) General Retirement (Continued) Net Pension Liability (Continued) The required schedule of changes in the Government's net pension liability and related ratios immediately following the notes to the financial statements presents multiyear trend information about whether the value of plan assets is increasing or decreasing over time relative to the total pension liability. Actuarial assumptions. The total pension liability was determined by an actuarial valuation as of December 31, 2014. The following actuarial assumptions applied to all periods included in the measurement: Inflation 3.0% Salary increases, including inflation 5.5% Investment rate of return 8.0 %, including inflation Mortality rates were based upon the RP -2000 mortality table for healthy lives and the 1965 Railroad Board Ultimate mortality Table for disabled lives. Discount rate. The discount rate used to measure the total pension liability was 8.0 %. The projection of cash flows used to determine the discount rate assumed that plan member contributions will be made at the current contribution rate and that Government contributions will be made at rates equal to the difference between actuarially determined contribution rates and the member rate. Based on those assumptions, the pension plan's fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long -term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability. Sensitivity of the net pension liability to changes in the discount rate. The following table presents the net pension liability of the Government, calculated using the discount rate of 8.0 %, as well as what the Government's net pension liability would be if it were calculated using a discount rate that is 1- percentage -paint lower (7.0 %) or 1- percentage -point higher (9.0 %) than the current rate: 11% Decrease (7.0 %) Current Discount Rate (8.0'X.) 1% Increase (9.0%) $ 28,451,521 $ 19,652,418 $ 12,871,735 M NOTES TO FINANCIAL STATEMENTS NOTE S. PENSION PLANS (CONTINUED) General Retirement (Continued) Net Pension Liability (Continued) Actuarial valuations involve estimates of the value of reported amounts and assumptions about the probability of events far into the future, and actuarially determined amounts are subject to continual revision as results are compared to past expectations and new estimates are made about the future. Actuarial calculations reflect a long -term perspective. Calculations are based on the substantive plan in effect as of December 31, 2014 and the current sharing pattern of costs between employer and employee. Annual Pension Cost and Net Pension Obligation The Government's annual pension cost and net pension obligation for the General Retirement Plan for the current year are as follows: Derivation of Annual Pension Cost Annual Required Contribution Interest on Net Pension Obligation Adjustment on annual required contribution Annual Pension Cost Derivation of Net Pension Obligation Annual Pension Cost Actual Contributions to Plan Decrease in Net Pension Obligation Net Pension Obligation as of December 31, 2013 Net Pension Obligation as of December 31, 2014 December 31, 2014 $ 2,256,722 11,095 (11,704) $ 2,256,113 $ 2,256,113 2,256,722 (609) 138,690 $ 138,081 W NOTES TO FINANCIAL STATEMENTS NOTE 6. PENSION PLANS (CONTINUED) General Retirement (Continued) Basis of Valuation Current valuation date Annual return on invested Plan assets Projected annual salary increases Expected annual inflation Actuarial value of assets Actuarial cost method Amortization method Remaining amortization period January 1, 2014 8.00% 5.5% 3.00% Market Value Projected Unit Credit Level Percent of Pay (Closed) Various periods to comply with state law Trend Information for The Plan Net Pension Fiscal Annual Actual Percentage Obligation Year Pension Government of APC (Asset) - Beginning Cost (APC) Contribution Contributed End of Year 11112014 $ 2,256,113 $ 2,256,722 100.0 % $ 138,081 11112013 2,482,959 1,924,332 77.5 138,690 111/2012 2,310,827 2,826,791 122.3 (419,937) Georgia Municipal Employees Benefit System Plan Description Employees from the City of Augusta hired after March 1, 1987 and before consolidation on December 31, 1996, and who were not participants in any other employer- sponsored retirement plan, and Augusta Canal Authority employees are covered under the Georgia Municipal Employees Benefit System ( GMEBS), a multiple-employer defined benefit pension plan. The GMEBS Plan provides pension benefits, deferred allowances, and death and disability benefits. In 2008, this plan was reopened to participants of the 1998 Defined Contribution Plan who opted to convert to the GMEBS Plan. Participation in this plan is mandatory for all new employees. These benefit provisions and all other requirements including amendments are established by Government ordinance. A participant may retire after reaching the age of 65 if the participant is not classified as public safety personnel; participating public safety personnel may retire at age 65 or age 55 with 25 years of total credited service, whichever is earlier. Early retirement may be taken at age 55 with 10 years of credited service. Benefits vest after 10 years of service. Employees who retire at or after age 55 with 10 or more years of service are entitled to pension payments for the remainder of their lives equal to 1 %4% of their final five -year average salary times the number of years of which they were employed as a participant in the GMEBS. KZ NOTES TO FINANCIAL STATEMENTS NOTE S. PENSION PLANS (CONTINUED) Georgia Municipal Employees Benefit System (Continued) The final five -year average salary is the average salary of the employee during the final five years of full -time employment. Pension provisions include deferred allowances, whereby an employee may terminate his or her employment with the Government after accumulating 10 years of service but before reaching the age of 55. If the employee does not withdraw his or her accumulated contributions, the employee is entitled to all pension benefits upon reaching the age of 55. Employees must contribute 4.0% of their gross earnings to the Plan. In addition, the Government must provide annual contributions sufficient to satisfy the actuarially determined contribution requirements as amended by GMEBS. The GMEBS Retirement Fund issues a publicly available financial report that includes financial statements and required supplementary information. That report may be obtained by writing to Georgia Municipal Employees Benefit System, 201 Pryor Street, SW, Atlanta, Georgia 30303. Participant Data At July 1, 2014, the date of the most recent actuarial valuation, there were 2,687 participants as follows: Active participants 2,141 Retirees and beneficiaries 448 Vested terminated 98 2,687 Funding Policy The employer contributions for 2014 are determined as part of a July 1, 2013 actuarial valuation using the projected unit credit actuarial cost method. The actuarial value of plan assets are computed with a smoothing method that uses a roll forward of prior year's actuarial value with contributions, disbursements, and expended return of investments, plus 10% of investment gains (losses) during 10 prior years. Normal cost is funded on a current basis. The Plan is subject to the minimum funding standards of the Public Retirement Systems Standards Law. Since the Government's policy is to contribute the pension expense in each year, the funding strategy should provide sufficient resources to pay employee pension benefits on a timely basis. The significant actuarial assumptions used to compute pension contribution requirements are the same as those used to determine the standardized measure of the pension obligation. The plan's unfunded actuarial accrued liability is being amortized over 30 years as a level dollar. 37 NOTES TO FINANCIAL STATEMENTS Geornia Municipal Employees Benefit System (Continued) Annual Pension Cost The Government's annual pension cost and net pension obligation for the GMEBS Plan for the current year are as follows: Basis of Valuation Current valuation date July 1, 2014 Actuarial cost method Projected Unit Credit Amortization method Closed level dollar for remaining unfunded liability Remaining amortization period Varies for the bases, with net effective amortization period of 14 years Actuarial asset valuation method Sum of actuarial value at beginning of year and the cash flow during the year plus the assumed investment return, adjusted by 10% of the amount that the value exceeds or is less than the market value at end of year. The actuarial value is adjusted, if necessary, to be within 44% of market value for 2010, 38% of market value for 2011, 32% of market value for 2012, 26% of market value for 2013, and 20% of market value for 2014 and later years. Actuarial assumptions: Investment rate of return 7.75% Projected salary increases 3.50% Post retirement benefit increases None Inflation 3.50% 38 Trend Information for The Plan Fiscal Annual Actual Percentage Net Pension Year Pension Government of APC Obligation - Beginning Cost (APC) Contribution Contributed Beginning of Year 1!1/2014 $ 5,297,640 $ 5,297,640 100.0 % $ 1 /1 /2013 5,170,685 5,170,685 100.0 - 1/1/2012 5,082,322 5,082,322 100.0 - Basis of Valuation Current valuation date July 1, 2014 Actuarial cost method Projected Unit Credit Amortization method Closed level dollar for remaining unfunded liability Remaining amortization period Varies for the bases, with net effective amortization period of 14 years Actuarial asset valuation method Sum of actuarial value at beginning of year and the cash flow during the year plus the assumed investment return, adjusted by 10% of the amount that the value exceeds or is less than the market value at end of year. The actuarial value is adjusted, if necessary, to be within 44% of market value for 2010, 38% of market value for 2011, 32% of market value for 2012, 26% of market value for 2013, and 20% of market value for 2014 and later years. Actuarial assumptions: Investment rate of return 7.75% Projected salary increases 3.50% Post retirement benefit increases None Inflation 3.50% 38 NOTES TO FINANCIAL STATEMENTS NOTE 6. PENSION PLANS (CONTINUED) Georaia Municipal Employees Benefit System (Continued) Plan Funded Status As of the most recent valuation date, July 1, 2014, the funded status of the Plan was as follows: The required schedule of funding progress immediately following the notes to the financial statements presents multiyear trend information about whether the actuarial value of plan net position is increasing or decreasing over time relative to the actuarial accrued liability. Actuarial valuations involve estimates of the value of reported amounts and assumptions about the probability of events far into the future, and actuarially determined amounts are subject to continual revision as results are compared to past expectations and new estimates are made about the future. Actuarial calculations reflect long -term perspective. Calculations are based on the substantive plan in effect as of July 1, 2014. Policemen's Pension Plan, Firemen's Pension Plan and the City Employees' Pension Plan These Plans covered former City of Augusta employees. Policemen and firemen hired before 1945 are covered under the General Pension Plan. Policemen hired between 1945 and 1949 are covered under the Policemen's Pension Plan. Firemen hired between 1945 and 1949 are covered under the Firemen's Pension Plan. Other former City of Augusta employees hired between 1945 and 1949 are covered by the City Employees' Pension Plan. Pension benefits are being paid under these Plans to retired employees and beneficiaries. These are closed retirement plans (new employees may not participate in the plans). During the year ended December 31, 2014, the Policemen's Pension Plan has one participant with Government contributions of $27,256; the Firemen's Pension Plan has two participants with Government contributions of $38,319; and the City Employees' Pension Plan has six participants with Government contributions of $196,675. These plans do not issue stand -alone financial statement reports. 39 Actuarial UAAL as a Actuarial Accred Unfunded Percentage Actuarial Value of Liability (AAL) AAL Funded Covered of Covered Valuation Assets Entry Age (UAAL) Ratio Payroll Payroll Date (a) (b) (b-a) (alb) (c) b c 711/2014 $ 99,509,643 $ 119,742,080 $ 20,232,437 83.1 % $ 82,687,047 24.5 % The required schedule of funding progress immediately following the notes to the financial statements presents multiyear trend information about whether the actuarial value of plan net position is increasing or decreasing over time relative to the actuarial accrued liability. Actuarial valuations involve estimates of the value of reported amounts and assumptions about the probability of events far into the future, and actuarially determined amounts are subject to continual revision as results are compared to past expectations and new estimates are made about the future. Actuarial calculations reflect long -term perspective. Calculations are based on the substantive plan in effect as of July 1, 2014. Policemen's Pension Plan, Firemen's Pension Plan and the City Employees' Pension Plan These Plans covered former City of Augusta employees. Policemen and firemen hired before 1945 are covered under the General Pension Plan. Policemen hired between 1945 and 1949 are covered under the Policemen's Pension Plan. Firemen hired between 1945 and 1949 are covered under the Firemen's Pension Plan. Other former City of Augusta employees hired between 1945 and 1949 are covered by the City Employees' Pension Plan. Pension benefits are being paid under these Plans to retired employees and beneficiaries. These are closed retirement plans (new employees may not participate in the plans). During the year ended December 31, 2014, the Policemen's Pension Plan has one participant with Government contributions of $27,256; the Firemen's Pension Plan has two participants with Government contributions of $38,319; and the City Employees' Pension Plan has six participants with Government contributions of $196,675. These plans do not issue stand -alone financial statement reports. 39 NOTE 6. NOTE 7. PENSION PLANS (CONTINUED) Retirement Savinas Plan (the 11 1998 Plan") All full -time employees with more than one month of service and Canal Authority employees were eligible to participate in the Retirement Savings Plan. The 1998 Plan is a defined contribution plan under Section 401(a) of the Internal Revenue Code, and is administered by Nationwide Life Insurance, PPA support. The Plan was organized and may be amended by a majority vote of the full -body of the governing board, the Augusta- Richmond County Commission. Employees contribute four percent (4 %) of their salary, and the Government contributes two percent (2 %) of the employee's salary. Contribution requirements may be amended by a majority vote of the full -body of the governing board, the Augusta - Richmond County Commission. At December 31, 2014, there were 164 plan participants. Participants are considered fully vested in the Government's contributions after completing five (5) years of service. For the year ended December 31, 2014, the employees' contributions were $296,222, and the Government's contributions were $148,112. This is a closed retirement plan (new employees may not participate in the Plan). OTHER POSTEMPLOYMENT BENEFITS Plan Description The Government maintains the Augusta - Richmond County Other Post - Employment Benefit Plan (the "OPEB Plan "), a single employer post- employment defined benefit plan. The OPEB plan provides medical and death benefits to eligible retirees and their spouses. Separate publicly available financial statements are not issued for the OPEB Plan. Funding Policy The Government intends to continue to fund the OPEB Plan on a pay- as- you-go basis. The OPEB Plan is fully funded by the Government and plan members are not required to contribute. Contribution requirements may be amended by a majority vote of the full -body of the Augusta - Richmond County Commission. Participant Data At December 31, 2013, the date of the most recent actuarial valuation, there were 2,363 participants as follows: Active employees Retired participants receiving benefits Total membership 1,807 556 2,363 40 NOTES TO FINANCIAL STATEMENTS NOTE 7. OTHER POSTEMPLOYMENT BENEFITS (CONTINUED) Annual OPEB Cost and Net OPEB Obligation The Government contributed $3,274,460 to the OPEB Plan for the year ended December 31, 2014. The Government's annual other post- retirement benefit (OPEB) cost (expense) is calculated based on the annual required contribution of the employer (ARC), an amount actuarially determined in accordance with the parameters of GASB Statement 45. The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover normal cost each year and amortize any unfunded actuarial liabilities (or funding excess) over a period not to exceed 30 years. The Government's annual pension cost and net OPEB obligation for the OPEB Plan for the current year are as follows: nual required employer contribution Interest on net OPEB obligation Adjustment to annual required contribution nual OPEB cost iployer contributions made or accrued Increase in net OPEB obligation t OPEB obligation beginning of year t OPEB obligation end of year Trend Information December 31, 2014 $ 7,938,396 1,626,258 (2,034,460) 7,530,194 3,274,460 4,255,734 33,973,494 $ 38,229,228 Fiscal Year Annual OPEB Percentage of Net OPEB Ending Cost (APC) APC Contributed Obligation 12/31/2014 $ 7,530,194 43.5 % $ 38,229,228 12/31/2013 7,530,193 41.5 33,973,493 12/3112012 7,593,837 39.3 29,568,318 12/31/2011 7,908,059 31.9 24,957,840 12/31/2010 7,537,598 30.8 19,569,950 As of January 1, 2013, the most recent valuation date, the funded status of the OPEB Plan is as follows: Actuarial UAAL as a Actuarial Accrued Unfunded Percentage Actuarial Value of Usbility (AAL) AAL Funded Covered of Covered Valuation Assets Entry Age (UAAL) Ratio Payroll Payroll Date (a) (b) (b-a) (alb) (c) (b - ayc) 111/2013 $ - $ 95,489,631 $ 95,489,631 - % $ N/A N/A 41 NOTES TO FINANCIAL STATEMENTS NOTE 7. NOTE 8. OTHER POSTEMPLOYMENT BENEFITS (CONTINUED) Trend Information (Continued) The required schedule of funding progress immediately following the notes to the financial statements presents multiyear trend information about whether the actuarial value of plan net assets is increasing or decreasing over time relative to the actuarial accrued liability. Actuarial valuations involve estimates of the value of reported amounts and assumptions about the probability of events far into the future, and actuarially determined amounts are subject to continual revision as results are compared to past expectations and new estimates are made about the future. Actuarial calculations reflect long -term perspective. Calculations are based on the substantive plan in effect as of January 1, 2013. Actuarial Assumptions The assumptions used in the January 1, 2013 actuarial valuation are as follows: Valuation date Actuarial cost method Amortization method Amortization period Asset valuation method Actuarial assumptions: Discount rate Annual health care cost trend rate January 1, 2013 Projected Unit Credit Level Percent of Pay (open) 30 years Market Value 5.50% 8.00% initially, reduced by decrements to an ultimate rate of 5.00% after three years RISK MANAGEMENT The Government, including the Airport, is exposed to various risks of loss related to torts; theft of, damage to and destruction of assets; errors and omissions; and natural disasters. The Government purchases commercial insurance to cover employee life, health, property and liability, and disability insurance programs, each of which is covered by the Airport. There were no significant reductions of insurance coverage compared to the prior year. Settled claims in the past three years have not exceeded the coverages. The Government records an estimated liability for indemnity workers' compensation claims against the Government; however, the liability is not allocated to enterprise funds. Claim liabilities are based on estimates of the ultimate cost of reported claims (including future claim adjustment expenses). Claims liabilities include specific, incremental claim adjustment expenses and allocated loss adjustment expenses. Because all workers' compensation claims are expected to be settled within one year, the related unpaid claims liability is not discounted and the entire liability is classified as current. Activity is accounted for in the General Fund of the Government. 42 REQUIRED SUPPLEMENTARY INFORMATION DEFINED BENEFIT RETIREMENT PLANS SCHEDULES OF FUNDING PROGRESS 1945 Plan GMEBS Actuarial UAAL as a Actuarial Accrued Unfunded Percentage Actuarial Value of Liability (AAL) AAL Funded Covered of Covered Valuation Assets Entry Age (UAAL) Ratio Payroll Payroll Date (a) (b) (b-a) (alb) (c) (b -ay 7/12014 $ 99,509,643 12/31!2013 $ 6,423,808 $ 8,756,203 $ 2,332,395 73.4 % $ 132,346 1,762.3 % 12/31/2012 6,403,803 9,209,859 2,806,056 69.5 131,602 2,132.2 12/312011 7,152,239 9,398,563 2,246,324 76.1 125,222 1,793.9 12/312010 7,860,568 11,366,929 3,506,361 69.2 125,359 2,797.1 12/312009 8,127,448 11,403,336 3,275,888 71.3 244,941 1,337.4 12/312008 9,839,493 11,083,498 1,244,005 88.8 252,660 492.4 General Retirement (1949 Plan) Actuarial UAAL as a Actuarial Accrued Unfunded Percentage Actuarial Value of Liability (AAL) AAL Funded Covered of Covered Valuation Assets Entry Age (UAAL) Ratio Payroll Payroll Date (a) (b) (b-a) (alb) (c) (b -ayc) 12/312013 $ 64,261,414 $ 82,674,584 $ 18,413,170 77.7 % $ 2,906,852 633.4 % 12/312012 61,776,481 81,888,596 20,112,115 75.4 2,877,191 699.0 12/312011 64,785,966 83,583,477 18,797,511 77.5 3,152,905 596.2 12/312010 68,221,054 79,243,698 11,022,644 86.1 4,707,547 234.1 12/312009 65,807,023 74,884,813 9,077,790 87.9 5,775,104 157.2 12/312008 74,862,875 70,398,531 (4,464,344) 106.3 6,416,602 (69.6) GMEBS 0. 43 Actuarial UAAL as s Actuarial Accrued Unfunded Percentage Actuarial Value of Liability (AAL) AAL Funded Covered of Covered Valuation Assets Entry Age (UAAL) Ratio Payroll Payroll Date (a) (b) (b-a) (a/b) (c) b-a is 7/12014 $ 99,509,643 $ 119,742,080 $ 20,232,437 83.1 % $ 82,687,047 24.5 % 7/12013 87,884,346 110,942,833 23,058,487 79.2 79,574,939 29.0 7/12012 76,659,093 99,440,605 22,781,512 77.1 73,908,657 30.8 7/12011 67,421,898 90,451,936 23,030,038 74.5 73,830,249 31.2 7/12010 60,004,921 82,560,251 22,555,330 72.7 73,248,453 30.8 0. 43 REQUIRED SUPPLEMENTARY INFORMATION OTHER POST - EMPLOYMENT BENEFIT PLAN SCHEDULE OF FUNDING PROGRESS The assumptions used in the preparation of the above schedules are disclosed in Notes 6 and 7 to the financial statements. M'' Actuarial UAAL as a Actuarial Accrued Unfunded Percentage Actuarial Value of Liability (AAL) AAL Funded Covered of Covered Valuation Assets Entry Age (UAAL) Ratio Payroll Payroll Date (a) (b) (b-a) (a/b) (c) (b -ayc) 1/12013 $ - $ 95,489,631 $ 95,489,631 - % $ N/A N/A 1/12012 - 95,489,631 95,489,631 - N/A N/A 1/12011 - 91,479,290 91,479,290 - NIA N/A The assumptions used in the preparation of the above schedules are disclosed in Notes 6 and 7 to the financial statements. M'' AUGUSTA REGIONAL AIRPORT AT BUSH FIELD AUGUSTA, GEORGIA REQUIRED SUPPLEMENTARY INFORMATION 1945 PLAN SCHEDULE OF CHANGES IN THE GOVERNMENT'S NET PENSION LIABILITY AND RELATED RATIOS FOR THE YEAR DECEMBER 31, 2014 2014 Total pension liability Service cost $ 3,063 Interest on total pension liability 691,885 Benefit payments, including refunds of employee contributions (890,165) Net change in total pension liability (195,217) Total pension liability - beginning 8,645,499 Total pension liability - ending (a) $ 8,450,282 Plan fiduciary net position Contributions - employer $ 299,600 Contributions - employee 6,661 Net investment income 521,224 Benefit payments, including refunds of member contributions (855,928) Net change in plan fiduciary net position (28,443) Plan fiduciary net position - beginning 6,703,458 Plan fiduciary net position - ending (b) $ 6,675,015 Government's net pension liability - ending (a) - (b) $ 1,775,267 Plan fiduciary net position as a percentage of the total pension liability 79.0% Covered - employee payroll $ 132,346 Net pension liability as a percentage of covered - employee payroll 1341.4% Notes to the Schedule: The schedule will present 10 years of information once it is accumulated. 45 AUGUSTA REGIONAL AIRPORT AT BUSH FIELD AUGUSTA, GEORGIA REQUIRED SUPPLEMENTARY INFORMATION GENERAL RETIREMENT PLAN SCHEDULE OF CHANGES IN THE GOVERNMENT'S NET PENSION LIABILITY AND RELATED RATIOS FOR THE YEAR ENDED DECEMBER 31, 2014 2014 Total pension liability Service cost $ 196,121 Interest on total pension liability 7,212,710 Benefit payments, including refunds of employee contributions (6,390,348) Net change In total pension liability 1,018,483 Total pension liability - beginning 89,962,757 Total pension liability - ending (a) $ 90,981,240 Plan fiduciary net position Contributions - employer $ 2,256,722 Contributions - employee 185,458 Net investment income 4,737,674 Benefit payments, including refunds of member contributions (6,144,565) Net change in plan fiduciary net position 1,035,289 Plan fiduciary net position - beginning 70,293,533 Plan fiduciary net position - ending (b) $ 71,328,822 Government's net pension liability - ending (a) - (b) $ 19,652,418 Plan fiduciary net position as a percentage of the total pension liability 78.4% Covered - employee payroll $ 2,906,852 Net pension liability as a percentage of covered - employee payroll 676.1% Notes to the Schedule: The schedule will present 10 years of information once it is accumulated. CI AUGUSTA REGIONAL AIRPORT AT BUSH FIELD AUGUSTA, GEORGIA REQUIRED SUPPLEMENTARY INFORMATION 1945 PLAN SCHEDULE OF GOVERNMENT CONTRIBUTIONS FOR THE YEAR ENDED DECEMBER 31, 2014 Actuarially determined contribution Contributions in relation to the actuarially determined contribution Contribution deficiency (excess) Covered employee payroll Contributions as a percentage of covered- employee payroll Notes to the Schedule: (1) Actuarial Assumptions Valuation Date December 31, 2014 Cost Method Entry Age Normal Actuarial Asset Valuation Method Market Value Assumed Rate of Return on Investments 8.00% Projected Salary Increases 5.50% Cost -of- living Adjustment 3.00% Amortization Method Level dollar for unfunded liability Remaining Amortization Period 30 years (open) (2) The schedule will present 10 years of information once it is accumulated. 2014 $ 299,600 299,600 $ 132,346 226.38% 47 AUGUSTA REGIONAL AIRPORT AT BUSH FIELD AUGUSTA, GEORGIA REQUIRED SUPPLEMENTARY INFORMATION GENERAL RETIREMENT PLAN SCHEDULE OF GOVERNMENT CONTRIBUTIONS FOR THE YEAR ENDED DECEMBER 31, 2014 2014 Actuarially determined contribution $ 2,256,722 Contributions in relation to the actuarially determined contribution 2,256,722 Contribution deficiency (excess) $ - Covered employee payroll $ 2,906,852 Contributions as a percentage of covered- employee payroll 77.63% Notes to the Schedule: (1) Actuarial Assumptions Valuation Date December 31, 2014 Cost Method Entry Age Normal Actuarial Asset Valuation Method Market Value Assumed Rate of Return on Investments 8.00% Projected Salary Increases 5.50% Cost -of- living Adjustment 3.00% Amortization Method Level dollar for unfunded liability Remaining Amortization Period 30 years (open) (2) The schedule will present 10 years of information once it is accumulated. 48 AUGUSTA REGIONAL AIRPORT AT BUSH FIELD AUGUSTA, GEORGIA REQUIRED SUPPLEMENTARY INFORMATION 1945 PLAN SCHEDULE OF PENSION INVESTMENT RETURNS FOR THE YEAR ENDED DECEMBER 31, 2014 Annual money - weighted rate of return, net of investment expenses for the Government's Pension Plan Notes to the Schedule: The schedule will present 10 years of information once it is accumulated. 2014 7.0% M AUGUSTA REGIONAL AIRPORT AT BUSH FIELD AUGUSTA, GEORGIA REQUIRED SUPPLEMENTARY INFORMATION GENERAL RETIREMENT PLAN SCHEDULE OF PENSION INVESTMENT RETURNS FOR THE YEAR ENDED DECEMBER 31, 2014 Annual money - weighted rate of return, net of investment expenses for the Government's Pension Plan Notes to the Schedule: The schedule will present 10 years of information once it is accumulated. 2014 8.2% A 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 and by the Augusta- Richmond County Commission on September 1, 2015 (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] APPENDIX B SUMMARY OF THE BOND RESOLUTION Definitions "Additional Bonds" means General Revenue Bonds, other than the Series 2015 Bonds, issued pursuant to the provisions of the Master Bond Resolution described under the caption "Additional Bonds." 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 under the caption "Special Purpose Revenue Bonds; Additional Released Revenue Bonds; PFC Stand -Alone Bonds and Other Airport Obligations ". "Additional Released Revenue Bonds" means those Released Revenue Bonds issued after the first issuance of a series of Released Revenue Bonds, as described under the caption "Special Purpose Revenue Bonds; Additional Released Revenue Bonds; PFC Stand -Alone Bonds and Other Airport Obligations ". "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 under the caption "Special Purpose Revenue Bonds; Additional Released Revenue Bonds; PFC Stand -Alone Bonds and Other Airport Obligations ". "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 the Bond Resolution 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. "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. B -1 "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. "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 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. "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 "bolder" means the registered owner of one or more Bonds. "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 designated as Bond Registrar for the Series 2015 Bonds. "Bond Resolution" means the Master Bond Resolution as it may from time to time be modified, supplemented, or amended by Supplemental Resolutions. B -2 "Bond Year" means the 12 -month period ending on January 1 of each year. "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. "Capital Appreciation Bonds" means Bonds that bear interest which is calculated based on periodic compounding, payable only at maturity or earlier redemption. 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. "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. "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 in connection with the securitization of Released Revenues as described in the last paragraph under the caption "Released Revenues and Securitizations ". "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; B -3 (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" does not include a Reserve Account Credit Facility. "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" does 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" does not include any Reserve Account Credit Facility Provider. Whenever in the Bond Resolution the consent of the Credit Issuer is required, such consent will 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 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 includes (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 are 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 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. B-4 (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 are 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 is 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 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. "Event of Default" means any of the events defined as such under the caption "Events of Default and Remedies." "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, 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 will 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 f�7 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 the 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 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 of the Master Bond Resolution. "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 I 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 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 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 the Bond Resolution. "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 the Master Bond Resolution as adopted by the Augusta Aviation Commission and by the Governing Body on September 1, 2015. "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. " 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. B -7 "Net Special Purpose Revenues" means Special Purpose Revenues net of related Expenses of Operations and Maintenance. "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) of the Master Bond Resolution. "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" may 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 the Bond Resolution, and (c) Bonds for the payment of which provision has been made in accordance with the provisions of the Master Bond Resolution described under the caption "Defeasance ". 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" with the other Bonds with respect to the category of Revenues on which they have liens of equal rank. "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 will perform the duties required of the Paying Agent in the Bond Resolution. U.S. Bank National Association is designated as Bond Registrar for the Series 2015 Bonds. "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 the 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 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. B -8 "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 in the Master Bond Resolution or in any Supplemental Resolution resulting 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 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 the 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" means; (1) All right, title and interest of the Consolidated Government in and to all Revenues 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; (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 the 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 described in the Master Bond Resolution are pledged to and secure only those Bonds or Contracts that are specifically designated as being so secured by the Master Bond Resolution or in the Supplemental Resolution authorizing same. 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. "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 I 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. "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. "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 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 the provisions of the Master Bond Resolution described under the caption "Released Revenues and Securitizations," 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 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. B -10 "Revenues" means General Revenues, PFC Revenues, Special Purpose Revenues and Released Revenues. "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 as described in the last paragraph under the caption "Additional Bonds" and under the caption "Accession of Subordinate Lien Bonds and Related Contracts to Senior Status ". 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. "Series 2015A Bonds" means the Augusta, Georgia Airport General Revenue Refunding Bonds, Series 2015A (Non -AMT) in the aggregate principal amount of $6,675,000, authorized to be issued under the Master Bond Resolution. "Series 2015B Bonds" means the Augusta, Georgia Airport General Revenue Refunding Bonds, Series 2015B (AMT) in the aggregate principal amount of $3,850,000, authorized to be issued under the Master Bond Resolution. "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 and described in the Official Statement under the first paragraph of the section entitled "SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2015 BONDS - Rate Covenant ". "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. "Subordinate Lien" means a lien on one or more categories of Revenues which is not a Senior Lien. ME "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 the Master Bond Resolution as described in the last paragraph under the caption "Subordinate Lien Bonds ". "Supplemental Bond Resolution" means a bond resolution of the Consolidated Government supplemental to the 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 will 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 the 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. "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. Debt Service Fund and Debt Service Reserve Fund Debt Service Fund. The Debt Service Fund is comprised of the Interest Account, the Contracts Payments Account and the Principal Account. The accounts function as follows: 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 is required to 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 may 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 will be satisfied with respect to such Bonds if the installment paid into the related subaccount of the Interest Account in each month is 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 may 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 must also deposit and continue to deposit any payments from a Credit Issuer under a Credit Facility Agreement in the related subaccount of the Interest Account from time to time as and when received. 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 is required to 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. ME Principal Account. Unless otherwise provided in a Supplemental Bond Resolution, on or before the last day of each month, there is required to 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 may 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 may 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. Additional Provisions Relating to Interest and Principal Subaccounts. No further payments are required to 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 may 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 part of such Bonds on the next succeeding redemption date for which the required notice of redemption may be given. Debt Service Reserve Fund. The Debt Service Reserve Requirement for the Series 2015 Bonds and Additional Bonds will be funded as described in the Official Statement under the heading "SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2015 BONDS — Funds Created by the Bond Resolution and Flow of Funds — Debt Service Fund and Debt Service Reserve Fund. " Whenever, on the date that 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 must 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 to the Operation and Maintenance Fund, Operation and Maintenance Reserve Fund, and Debt Service Fund have been made. 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 may 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 must have a term of at least one (1) year (or, if less, the remaining term of the related series of Bonds) and must 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 must permit a drawing 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 B -13 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, must 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, must 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, must 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, must 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 may 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 must 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 will 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 will 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. Investments 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) will be retained therein. Investment Earnings from the investment of moneys in each subaccount of the Debt Service Reserve Fund will 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 will 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 will 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. B -14 Additional Bonds Upon satisfaction of certain conditions, the Master Bond Resolution permits the Consolidated Government to issue Additional Bonds without express limit as to principal amount to finance capital improvements to or expansions of the Airport (or to refinance obligations issued for such purposes), which will be equally and ratably secured on a parity basis with the Series 2015 Bonds. The Master Bond Resolution allows Bonds issued to refund General Revenue Bonds to be secured on a parity with any General Revenue Bonds if (a) the Consolidated Government obtains a certificate from the Airport Finance Officer, demonstrating that the refunding will either (x) reduce the total debt service payments on the Outstanding General Revenue Bonds, including on related Contracts, which are secured on a parity with the General Revenue Bonds to be refunded, on a present value basis or (y) 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 (b) the requirements of paragraphs (2), (5), (6) and (7) are met with respect to the refunding General Revenue Bonds. The Master Bond Resolution also allows Additional Bonds (including refunding General Revenue Bonds which do not meet the requirements of the preceding paragraph) to be issued on a parity with Outstanding General Revenue Bonds upon satisfaction of the following conditions: (1) There is 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 (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 in paragraph (a) above 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) 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. (3) 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 the Bond Resolution. B -15 (4) 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 the Bond Resolution relating to the issuance of refunding Bonds described in the fast paragraph under this caption), and to pay expenses incidental thereto and to the issuance of the proposed Additional Bonds. (5) The Airport Director and the Airport Finance Officer certifies, 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. (6) The Consolidated Government receives 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 duty adopted by the Consolidated Government. (7) If the Additional Bonds would bear interest at a Variable Rate, the Supplemental Bond Resolution under which such Additional Bonds are issued must provide a maximum rate of interest per annum that such Additional Bonds may bear. 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) through (7) are satisfied treating such obligations as Additional Bonds and the issuance and security documents therefor as Supplemental Bond Resolutions. The Augusta Aviation Commission is required to notify the Rating Agencies of its intent to so secure Other Airport Obligations. Subordinate Lien Bonds Subordinate Lien Bonds may be issued with a Subordinate Lien on the related Revenues upon satisfaction of the conditions described below. 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 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. 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 of the Bond Resolution relating to the obligation to reimburse a draw -down on a Reserve Account Credit Facility and the requirements under this heading requiring withdrawals of 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 will 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 will 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 in paragraphs (4) through (7) under the caption "Additional Bonds" are met with respect to such Subordinate Lien Bonds. (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 B -16 pursuant to the Bond Resolution then Outstanding and parties to related Contracts will 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) above are not 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 the Bond Resolution until the owners of all Bonds Outstanding 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) above are not applicable), the owners of all Bonds then Outstanding 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 will 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 is unconditional and absolute. Nothing in the Bond Resolution prevents 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 concerned, the foregoing provisions do 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 paragraphs (1) through (5) under this caption are satisfied treating such obligations as Subordinate Lien Bonds and the issuance and security documents therefor as Supplemental Bond Resolutions. Special Purpose Revenue Bonds; Additional Release Revenue Bonds; PFC Stand -Alone Revenue Bonds and Other Airport Obligations 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. Other Airport Obligations (other than obligations treated as Senior Lien Bonds or Subordinate Lien Bonds as described in the last paragraph under the caption "Additional Bonds" and in paragraph (10) under the caption "Subordinate Lien Bonds" ) may not be accelerated for purposes of being paid from Revenues and, upon insolvency, bankruptcy or other event described in paragraph (4) under the caption "Subordinate Lien Bonds ", 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. Additional Released Revenue Bonds may be issued after compliance with the Master Bond Resolution and any requirements therefor set forth in any Supplemental Bond Resolution related to such Additional Released Revenue Bonds. 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 may 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 described in paragraph (1) under the caption "Additional Bonds" has been satisfied with respect to the then outstanding General Revenue Bonds. The pledge of PFC Revenues to secure PFC Stand -Alone Revenue Bonds will be provided for in the Supplemental Bond Resolution providing for the first issuance of PFC Stand - Alone Revenue Bonds. Released Revenues and Securitizations 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. Upon compliance with the preceding requirements, 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. ME Accession of Subordinate Lien Bonds and Related Contracts to Senior Lien Status By proceedings authorizing Subordinate Lien Bonds or a lien permitted by paragraph (b)(10) under the caption "Subordinate Lien Bonds ", 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 Contracts with a lien on the same category of Revenues if, as of the date of accession, the conditions of paragraphs (1)(A), (5) and (6) under the capital "Additional Bonds" 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 Account, the Principal Account and the Contract Payments Account 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. 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 may be created for purposes of the Bond Resolution until amounts are paid under such Financial Facility. Any such Reimbursement Obligation is 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) are fully subordinate to the payment of debt service on the related class of Bonds. Any such Financial Facility will be for the benefit of and secure such Bonds or portion thereof as specified in the applicable Supplemental Bond Resolution. Notwithstanding the other provisions of the Bond Resolution, 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. 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." Maintenance, Insurance, and Sale of the Airport; Annual Budget; Uneconomic Facilities; Tax Covenants The Consolidated Government covenanted in the Master Bond Resolution, by or through the Augusta Aviation Commission, to (i) maintain the Airport in good repair and in sound operating condition, (ii) carry adequate public liability, fidelity, and property insurance or self - insurance, as the Consolidated Government may determine to be appropriate under the circumstances, and (iii) adopt an Annual Budget as approved by the Augusta Aviation Commission for the Airport for each Fiscal Year of the Consolidated Government in compliance with the rate covenant described in the Official Statement under the heading "SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2015 BONDS — Rate Covenant". The Consolidated Government also covenanted in the Bond Resolution not to sell, lease, encumber, or in any manner dispose of the Airport as a whole or in part, except for property not necessary, useful, or profitable in the operation of the Airport or property the disposition of which will be advantageous to the Airport and will not adversely affect the security for the Bonds, as certified by the Airport Director, Mayor and Airport Consultant. The Consolidated Government reserved the right in the Bond Resolution to sell any portion of the Airport or to transfer the Airport as a whole to any political subdivision or authority or agency of one or more political subdivisions of the State, provided that the Consolidated Government obtains an opinion of Bond Counsel that such sale or transfer 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 an opinion of an Airport Consultant that such sale or transfer will not result in any diminution of Net General Revenues to the extent that in the then current and each succeeding Fiscal Year of the Consolidated Government the Net General Revenues will be less than 120 percent of the Average Annual Debt Service Requirement on all General Revenue Bonds to be Outstanding after such sale or transfer with a lien on Net General Revenues. In reaching its opinion in the foregoing paragraph with respect to sales, the Airport Consultant will 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 will 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. In reaching its opinion with respect to transfers, the Airport Consultant will 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. 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 General Revenue Bonds to be Outstanding after such transfer with a lien on Net General Revenues. In reaching this conclusion, the Airport Consultant will 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. The Consolidated Government also covenanted in the Bond Resolution to take all actions to assure the tax - exempt status of interest on Tax- Exempt Bonds and to refrain from taking any action which would adversely affect such status. B -20 Events of Default and Remedies Events of Default. The Master Bond Resolution defines an "Event of Default" to mean, among other things, (i) failure to pay debt service on Senior Lien Bonds when due, (ii) certain events of insolvency affecting the Consolidated Government, (iii) the appointment of a receiver of the Airport or the funds held under the Bond Resolution, (iv) failure to perform any other covenant contained in the Bond Resolution for 90 days (or 180 days if such default cannot be cured in 90 days and if corrective action is instituted and diligently pursued) after notice from the owners of (or a Credit Issuer securing) at least 25 percent in aggregate principal amount of Senior Lien Bonds, (v) an Event of Default under any Supplemental Bond Resolution relating to Senior Lien Bonds, (vi) delivery of notice that an "Event of Default' has occurred under a Credit Facility Agreement relating to Senior Lien Bonds or (vii) failure by any Liquidity Facility Issuer to pay the purchase price of Senior Lien Bonds under any Liquidity Facility then in effect; provided if the Event of Default relates solely to Bonds related to a particular category of Revenues and no other event has occurred which could become an Event of Default with respect to any other Bonds then Outstanding, such Event of Default will be deemed to apply solely to the related Bonds and Contracts and the provisions of the Bond Resolution will otherwise remain in full force and effect with respect to all other Bonds and related Contracts. Remedies. Upon the happening and continuance of any Event of Default (except for events described in clauses (vi) and (vii) above), the Bond Resolution allows the owners of more than 50 percent in aggregate principal amount of outstanding Senior Lien Bonds affected thereby or a Credit Issuer securing more than 50 percent in aggregate principal amount of outstanding Senior Lien Bonds affected thereby to accelerate such Bonds affected thereby. If the Consolidated Government cures the Event of Default in the manner presented by the Bond Resolution, the Bond Resolution allows the owners of more than 50 percent in aggregate principal amount of outstanding Senior Lien Bonds to waive the acceleration, subject to the consent of each Credit Issuer securing Senior Lien Bonds. 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 Senior Lien Bonds by such of the following remedies as it shall deem most effectual to protect and enforce such rights: (a) 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; (b) by bringing suit upon the Senior Lien Bonds; (c) 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; (d) 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 (e) 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 are 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. F:—► Application of Moneys After Default. The Bond Resolution provides that, upon the occurrence and continuation of an Event of Default, the Consolidated Government or a receiver appointed for the purpose must apply all Pledged Revenues as follows and in the following order of priority: (i) first, to the payment of the reasonable and proper charges, expenses, and liabilities of the receiver and any paying agent and bond registrar under the Bond Resolution (with such amounts payable, if related to a particular series and therefore to a particular category of Revenues, fast from such category), (ii) second, to the payment of all reasonable and necessary Expenses of Operation and Maintenance of the Airport and major renewals and replacements to the Airport, (iii) third, to the payment of debt service on Senior Lien Bonds and 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 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 Tenn 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 IMN 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. 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. (a) 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. (b) Notwithstanding anything else in the Bond Resolution to the contrary, payments made pursuant to (b), (c) and (d) shall be made by category of Revenues to related Bonds such that: W 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. Defeasance The Bond Resolution provides that Bonds for the payment or redemption of which sufficient moneys or sufficient Government Obligations 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) will be deemed to be paid and no longer outstanding under the Bond Resolution. Government Obligations are sufficient if. (i) 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 P.M 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. If all Bonds and obligations secured by a lien on a category of Revenues have been paid or provision for payment thereof made as set forth in the preceding paragraph, 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 will 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. Supplemental Resolutions The Bond Resolution permits the Consolidated Government to adopt supplemental resolutions modifying, amending, or supplementing the Bond Resolution, without the consent of or notice to the owners of any of the Bonds for certain purposes including to modify any of the provisions of the Bond Resolution in any respect (other than a modification of the type described below requiring the unanimous consent of the owners of Bonds); provided that for (i) 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 rating such Bonds shall have notified the Consolidated Government that such modification will not cause the then applicable Rating on any such 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. The Bond Resolution also provides that, with the consent 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, the Consolidated Government and the Augusta Aviation Commission may 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 may: (i) extend the maturity date or due date of any mandatory sinking fund redemption with respect to any Bond Outstanding under the Bond Resolution; (ii) reduce or extend the time for payment of debt service on any Bond Outstanding under the Bond Resolution; (iii) reduce any premium payable upon the redemption of any Bond under the Bond Resolution or advance the date upon which any Bond may fast be called for redemption prior to its stated maturity date; (iv) 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; (v) 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; (vi) reduce the percentage of owners of either class of Bonds required to approve any such supplemental resolution; or (vii) deprive the owners of the Bonds of the right to payment of such 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 which affects the rights or duties of any Financial Facility Issuer securing any of the Bonds without its written consent. B -24 APPENDIX C This Appendix C has been prepared by Dentons US LLP, Atlanta, Georgia, Disclosure Counsel. [Remainder of Page Intentionally Left Blank) SUMMARY OF THE AIRLINE OPERATING AGREEMENT AND TERMINAL BUILDING LEASE Each Airport Operating Agreement and Terminal Building Lease (an for the use of Airport facilities between the Aviation Commission and t Agreements between the Aviation Commission and each Signatory Airlin e provisions of the Agreement are summarized below. The headings and titles or reference. These summaries do not purport to be complete or definitive Agreement for a full and complete statement of its provisions. Definitions "Agreement') sets forth the agreement he applicable Signatory Airlines. The are substantially the same. Certain used herein are solely for convenience and reference should be made to each Certain words and terms used in this Official Statement are defined herein. In addition to the words and terms defined elsewhere herein, the following words and terms are defined terms in this Official Statement. "Affiliate" shall mean any air transportation company that is (i) a parent or subsidiary of Airline, or (ii) shares an International Air Transport Association (IATA) flight designator code with Airline at the Airport (Code - Sharing Partner), or (iii) otherwise operates under essentially the same trade name as Airline at the Airport and uses essentially the same livery as Airline; provided that no major airline, as such term is defined by the FAA, shall be classified as an Affiliate of another major airline, unless either clause (i) or (iii) above defines the relationship between such airlines at the Airport. Airline shall designate its Affiliate(s) in writing and shall serve as financial guarantor for all rentals and landing fees incurred by any such Affiliate at the Airport while operating as Airline's designated Affiliate under the Agreement. Airline may at any time give Airport thirty (30) days prior written notice that such an air transportation company otherwise meeting the definition of an "Affiliate" under the Agreement shall no longer be considered an Affiliate of Airline for purposes of the Agreement, and any guaranty by Airline of Affiliate's rentals or landing fees shall terminate and be ineffective as to any amounts incurred by such air transportation company after the effective date of termination of "Affiliate" status. During such period of time that an air transportation company is an Affiliate of Airline in accordance with the terms hereof, such Affiliate (1) shall have the same rights to use Airline's leased premises and the Airport as Airline; (2) shall be charged at the same landing fee rates as Airline without payment of any non - signatory premiums; (3) shall participate in any year -end or other reconciliation process whereby signatory airlines share in excess revenues or true -up of projected against actual costs; and (4) shall not be counted as a separate air transportation company from Airline for purposes of allocating the per capita portion of any cost allocation formula, but such Affiliate's passengers shall be counted as Enplaned Passengers of Airline for purposes of any enplanement -based portion of such formula. An Affiliate shall enter into a separate operating agreement with the Airport. "Agreement" means each Airline Operating Agreement and Terminal Building Lease for the Augusta Regional Airport, dated as of September 26, 2013 and as amended by a First Amendment to Airline Operating Agreement and Terminal Building Lease, dated as of the date of issuance of the Series 2015 Bonds, between the Augusta Regional Airport Aviation Commission and (1) Delta Air Lines, Inc. and (2) American Airlines, Inc. "Air Transportation" shall mean the carriage of persons, property, cargo, and mail by aircraft and all other activities reasonably related thereto. "Aircraft Arrival" shall mean the arrival of all non - governmental aircraft (including, without limitation, scheduled and nonscheduled flights, training and maintenance flights, or aircraft diversions) at the Airport. "Aircraft Gates" shall mean those portions of the Airport's Apron Area designated by the Aviation Commission from time to time for aircraft parking at the Terminal Building in order to enplane and deplane passengers. "Aircraft Operator" shall mean any entity operating aircraft into and out of the Airport under Part 121 or Part 135 of the FARs, or the practical equivalent of said Parts and using the Terminal Building. "Aircraft Parking Apron" means that portion of the Airfield located adjacent to the Terminal Building and depicted on Exhibit `B" of the Agreement where Aircraft Operators park aircraft. "Aircraft Parking Position(s)" shall mean the locations(s) on the Aircraft Parking Apron where aircraft are parked for the purpose of enplaning and deplaning passengers at the Terminal Building. "Airfield" or "Airfield Area" shall mean those portions of the Airport which provide for the landing, takeoff, taxiing, movement, or staging of aircraft including navigational aids, hazard designation and warning devices, airfield security roads, fencing, lighting, runway protection zones, aviation easements and interests in property utilized in connection therewith. C -1 "Airfield Area Requirement" shall be the sum of the amounts as described in subsection A, paragraphs 1 -5 under the subheading "Calculation of Landing Fee Rate" herein. "Airline" shall mean the entity that has executed the Agreement and is identified in the first paragraph of the Agreement. "Airline Leased Premises" or "Leased Premises" shall mean the following: (a) "Exclusive Use Space" shall mean only those premises in the Terminal Building that are leased by the Aviation Commission to Airline for its exclusive use. Exclusive Use Space is primarily used for ticket counter, office area, and baggage makeup functions. (b) "Joint Use Space" shall mean those premises that are used by airlines, including Airline, for their joint use (principally, the Terminal Building, hold room areas, baggage claim and baggage breakdown areas). (c) "Preferential Use Space" shall mean the premises from time to time provided by the Aviation Commission to an Airline for its preferential and nonexclusive use and shall include passenger holdrooms, Aircraft Parking positions, and Loading Bridges. "Airport" shall mean the Augusta Regional Airport at Bush Field, as shown in Exhibit A of the Agreement, as it now exists or as it may change from time to time. "Airport Cost Centers" shall mean the following cost centers as more fully shown in Exhibit B of the Agreement, as the same may change from time to time. Such cost centers shall be used for purposes of accounting for Airport Revenue and Expense and for calculating and adjusting certain rentals and fees set forth in the Agreement. "Airport Expense" shall mean all costs and expenses incidental to, necessary for, or arising out of the operation of the Airport, including but not limited to direct and allocated indirect Operation and Maintenance Expenses; Annual Debt Service; Other Indebtedness; Coverage; required reserve account funding and replenishment; and the cost of defending, settling, or satisfying any litigation or threatened litigation that relates to the Airport, or any aspect thereof. "Airport Revenue" shall mean all revenues, rentals, charges, Airline landing fees, user charges, and concession revenues received by or on behalf of the Aviation Commission in connection with the operation of the Airport or any part thereof, excluding all gifts, grants, reimbursements, restricted funds (including Passenger Facility Charge proceeds or payments received from governmental units, or public agencies, or any other source). Airport Revenue shall not include any revenue or income from (1) any Special Purpose Facility to the extent such revenue or income is either (a) pledged to pay principal, interest, or other charges for bonds or other obligations issued in anticipation thereof; or (b) for use by the Aviation Commission to reimburse costs incurred by it in the construction or provision of Special Purpose Facilities, or (2) any income earned on the investment of restricted funds. However, ground rentals for Special Purpose Facilities shall be considered Airport Revenue. "Annual Budget" shall mean the Airport capital and operating budget prepared by the Executive Director and adopted by the Aviation Commission each Fiscal Year. "Annual Debt Service" or "Annual Debt Service Requirement" means the Debt Service Requirement in each year that the Bonds are outstanding. "Apron Area" shall mean the paved aircraft ramp area adjacent to the Terminal Building that provides for the parking, loading, unloading, and servicing of aircraft. "Apron Area Requirement" shall be the sum of the amounts set forth as described in subsection A, paragraphs 1 -5 under the subheading "Calculation of Aircraft Parking Position Fee" herein. "Bonds" means any revenue bonds authorized by and authenticated and delivered pursuant to the Bond Resolution including the Series 2015 Bonds. "Bond Resolution" shall mean the Master Bond Resolution for the Series 2015 Bonds adopted by the Aviation Commission and the Augusta Richmond County Commission on September 1, 2015 as it may from time to time be modified, supplemented, or amended by Supplemental Resolutions (as defined in the Master Bond Resolution). "Capital Improvement" shall mean any single item having a cost or estimated to have a total cost in excess of Fifty Thousand Dollars ($50,000) and a useful life in excess of three (3) years, acquired, purchased, or constructed to improve, maintain, or develop the Airport. Said term shall include any expense for development studies, analyses, C -2 master planning efforts (including periodic reviews thereof), and economic or operational studies conducted on behalf of the Airport. "Certified Maximum Gross Landing Weight or CMGLW" shall mean the maximum weight, in thousand (1,000) pounds units, that each aircraft operated by an Airline is authorized by the Federal Aviation Administration to land at the Airport. "Common Use Premises" shall mean the lobby area, baggage claim area, security check point area and any other areas in the Terminal Building used in common by Aircraft Operators together with all facilities, improvements and equipment which have been or may hereafter be provided for use in connection with such premises. The Common Use Premises in the Terminal Building are described in Exhibit "C" of the Agreement. "Competitive Credit" shall mean an amount provided, at discretion of Airport Executive Director, to the Airlines in form of a credit which is used to determine annual rate charges. "Contract Security" shall mean a contract bond, irrevocable letter of credit or other security acceptable to Augusta in an amount equal to three (3) months' rentals and landing fees payable by an Aircraft Operator under Section 1 -3 -8.4 of Augusta Ordinance. "Coverage" shall mean for any series of Bonds, the percentage of Annual Debt Service that the Aviation Commission covenants to generate from net revenues, over and above the Annual Debt Service for such series of Bonds, pursuant to the Bond Resolution. Said term shall also mean the dollar amount computed by multiplying said percentage by the Annual Debt Service for such series of Bonds. "Debt Service Requirement" shall have the meaning set forth in the Bond Resolution. "Deplaned Passengers" shall mean all passengers deplaned by an Aircraft Operator on aircraft operated at the Airport. "Enplaned Passengers" shall mean all passengers enplaned by an Aircraft Operator on aircraft operated at the Airport. Without limiting the generality of the foregoing, Enplaned Passengers shall also include persons for whom the Aircraft Operator has provided the particular air transportation on a substantially complimentary basis such as employees of an airline, family members of such employees, persons traveling on "buddy passes," employees of other airlines, and those passengers redeeming "frequent flyer" awards and travel vouchers. "Exclusive Use Premises" shall mean those premises which have been leased exclusively to an Aircraft Operator. The Exclusive Use Premises in the Terminal Building are described on Exhibit "C" of the Agreement. "Executive Director" shall mean the person designated by the Aviation Commission to exercise functions with respect to the rights and obligations of the Aviation Commission under the Agreement. Said term shall also include any person expressly designated by the Aviation Commission to exercise functions with respect to the rights and obligations of the Airport under the Agreement. "FAA" shall mean the Federal Aviation Administration of the U.S. Government or any federal agencies succeeding to its jurisdiction. "Fiscal Year" shall mean the twelve (12) month period beginning January l of any year and ending following December 31 of that year or any other period specified by federal or State law. "Gates" shall mean Aircraft Parking Positions at the Terminal Building together with hold room areas and loading bridges and shall include preferential use of the podium and associated facilities for the Gate. "Hazardous Material" shall mean and include those elements or compounds which are contained in the list of hazardous substances adopted by the United States Environmental Protection Agency (EPA) and the list of toxic pollutants designated by Congress or the EPA or defined by any other federal, state or local statute, law, ordinance, code, rule, regulations, order or decree regulating, relating to, or imposing liability or standards of conduct concerning, any hazardous, toxic or dangerous waste, substance or material as now or at any time under the Agreement in effect. "Joint Use Formula" shall mean the formula used to prorate the rental or cost of space among those airlines using or having the right to use such space on the basis of the proportion of each Airline's Enplaned Passengers to the total number of Enplaned Passengers of all such Airlines using said space at the Airport. In the application of the Joint Use Formula, Airline's Affiliates Enplaned Passengers will be counted as Enplaned Passengers of Airline. C -3 "Landing Fee(s)" shall mean the payment required of each Airline each month, for the use of the Airfield determine based on the Landing Fee rate. "Landing Fee Rate" shall mean the rate multiplied by each 1,000 pounds of CMGLW or fraction thereof to calculate Landing Fees. "Loading Bridges" shall mean the loading bridges owned and maintained by Aviation Commission serving aircraft parked at the Aircraft Parking Positions at the Terminal Building or as they may be modified, changed, or relocated from time to time. "Loading Bridge Requirement" shall be the sum of the amounts as described in subsection A, paragraphs 1 -5 under the subheading "Calculation of Loading Bridge Use Fee" herein. "Loading Bridge Use Fee" shall be payment required of the Airline for the use of the Loading Bridges calculated as described under the subheadings "Loading Bridge Use Fee" and "Calculation of Loading Bridge Use Fee" herein. "Majority in Interest of Airlines" or "Mil" shall mean, in the Airfield Area, at least fifty one percent (51 %) of the Signatory Airlines, which, together, have landed at least 51% of the total Maximum Gross Certificated Landing Weight by all Signatory Airlines at the Airport during the most recent six (6) month period. In the Terminal Building, MII shall mean at least 51 % of the Signatory Airlines, which, together, have paid 51 % of the total Terminal Rentals paid by all Signatory Airlines at the Airport during the most recent six (6) month period. Solely for determining MII, no Air Transportation company shall be deemed to be a Signatory Airline so long as any event of default with respect to such Air Transportation company has occurred and is continuing or such Air Transportation company operates less than one (1) average daily flight. MII shall only apply to the Airfield Area and Terminal Building and only as it relates to the placement of new debt for purposes of Capital Improvements, refinancing or acquisition for those capital improvements requiring MII consideration. For purposes of MII votes, Signatory Airlines that have executed Scheduled Airline Operating Agreement and Terminal Building Leases substantially the same as the Agreement will be the only airlines permitted to vote. "Operation and Maintenance Expenses" shall mean the Aviation Commission's current annual expenses of maintaining, operating, repairing, and administering the Airport, including taxes and assessments, if any, as set forth in the current Annual Budget of the Aviation Commission. "Other Indebtedness" shall mean any subordinate security or debt incurred by the Aviation Commission for Airport purposes that is outstanding and not authenticated and delivered under and pursuant to a Bond Resolution. "Personal Property" shall mean the trade fixtures, equipment, conveyors, inventory, furniture, or supplies owned or leased by Airline (from a party other than the Aviation Commission) and installed or used at the Airport in the conduct of Airline's Air Transportation business that are removable from Airline's Leased Premises without substantial or permanent injury or damage to Airline's Leased Premises. "Premises" shall mean the Exclusive Use, Preferential Use, and Common Use Premises leased to a specific Aircraft Operator. "Public Areas" shall mean those areas of the Terminal Building not leased to any person, company, or corporation that are open to the general public. "Rental Rate" shall mean the annual charge per square foot for the space leased to the Aircraft Operators. "Rentable Space" shall mean the airline, concession, Transportation Security Administration (TSA) passenger processing, TSA office and vacant spaces, administrative square footage in the Terminal Building. "Rules and Regulations" shall mean those Rules, Regulations, and ordinances promulgated by the Aviation Commission or operating directives issued by the Executive Director, as the same may be amended, modified, or supplemented from time to time to the extent that such rules, regulations, and ordinances are not in conflict with the purposes or terms of the Agreement. "Series 2015 Bonds" means collectively the Airport General Revenue Refunding Bonds, Series 2015A and Series 2015B, in an original aggregate principal amount of S 10,525,000, issued pursuant to the Bond Resolution. "Signatory Airline" shall mean an airline that is a party to an Airline Operating Agreement and Terminal Building Lease with Augusta Aviation Commission. C-4 "Special Purpose Facility" shall mean any specific improvement undertaken by the Aviation Commission for the benefit of one or more airlines or other Airport tenants under the terms of a separate agreement that provides for, among other things (1) the payment of rentals or fees for the use or occupancy thereof in sufficient amounts to permit the financing of such improvement and payment of all costs thereof solely from such rentals or fees, and (2) the payments of the operation and maintenance cost of such improvement by the tenant or tenants thereof. "Sponsor Grant Assurances" shall mean those terms and conditions contained in FAA Airport Improvement Program Grants to which the Airport agrees as part of the warranties, assurances, covenants and other obligations contained in the grant. "Terminal Building" shall mean the Airport's passenger terminal building serving the traveling public. "Terminal Building Requirement" shall be the sum of the amounts as described in subsection A, paragraphs 1-5 under the subheading "Calculation of Terminal Building Rental Rates" herein. "Terminal Rental" shall mean the aggregate of monthly payments required of a specific Aircraft Operator in each Fiscal Year for the license granted such Operator to occupy specific Premises in the Terminal Building. "Terminal Building Requirement" shall mean the sum of Operation and Maintenance Expenses, Operating and Maintenance Reserve, Net PFC Debt Service Requirement, and Debt Service Requirement. "Total Landed Weight" shall mean the sum of the Maximum Gross Certificated Landing Weight for all of Airline's Aircraft Arrivals over a stated period of time. Said sum shall be rounded up to the nearest one thousand (1,000) pound unit for all landing fee computations. "TSA" shall mean the Office of Homeland Security and Transportation Security Administration, or their authorized successor(s). Use of Airport, Facilities and Terminal Building The Agreement entitles the Airline to the use, in common with others, the Airport and its appurtenances (together with all facilities, equipment, improvements, and services that have been or may hereafter be provided at or in connection with the Airport for common use) for the sole purpose of its conduct of Air Transportation. The Agreement also entitles the Airline to use the Terminal Building. The Agreement sets forth certain expressly permitted uses as well as certain use restrictions relating to the Airport, its Facilities and the Terminal Building. Term The term of the Agreement commenced on September 26, 2013 and shall be for three (3) years, unless sooner terminated in accordance with the Agreement. Upon mutual agreement of the parties, the Agreement shall be subject to two (2) one (1) year renewals. The parties agree to provide written notification of intent to renew within ninety (90) days prior to the expiration of the term. The Airline and the Aviation Commission agree to begin the re- negotiation of the Agreement at least six (6) months prior to December 31, 2015. Rentals and Fees Airline Payments. Airline agrees to pay the Aviation Commission, without deduction or setoff, all applicable rentals, additional rentals, charges, and fees (hereinafter referred to collectively as "Rentals and Fees ") during the term of the Agreement for its use of the Exclusive Use Space, Joint Use Space, Preferential Use Space, Loading Bridges, Aircraft Parking Positions, Airfield Area, and facilities, and for its rights, licenses, and privileges granted under the Agreement. Terminal Building Rentals. (a) Airline shall pay to the Aviation Commission, for its use of Terminal Building Exclusive Use Space and Preferential Use Space, monthly amounts determined by multiplying the total square footage of Airline's Terminal Building Exclusive Use Space and Preferential Use Space by the annual Terminal Building rental rate calculated as described under the subheading "Calculation of Terminal Building Rental Rates" below and dividing by twelve (12). (b) Airline shall pay to the Aviation Commission, for the shared use of Joint Use Space, monthly amounts determined by: 1. For space designated for joint use, multiplying the total square footage of such space by the annual Terminal Building rental rate calculated as described under the subheading "Calculation of Terminal Building Rental Rates" below, dividing the amount obtained by twelve (12), and then applying the Joint Use Formula, and C -5 2. For the purposes of applying the Joint Use Formula, the Aviation Commission will use statistics for the third (3' preceding month. If Airline fails to supply the passenger activity information then one hundred and twenty-five percent (125 %) of the most recent monthly enplaned passenger data available for Airline shall be used for that billing. Correction to actual will occur on receipt of statistical report or at the year -end adjustment, whichever is more convenient for the Aviation Commission. Loading Bridge Use Fee. Airline shall pay to the Aviation Commission, for its use of Loading Bridges, monthly fees determined by multiplying the number of Loading Bridges assigned to Airline by the annual Loading Bridge Use Fee rate calculated in accordance with as described under the subheading "Calculation of Loading Bridge Use Fee" below and dividing by twelve (12). In the event of multiple users the monthly fees will be prorated per use by Airline. Aircraft Parking Position Rentals. Airline shall pay to the Aviation Commission, for its use of Aircraft Parking Positions, monthly rentals determined by multiplying the number of Airline's aircraft parking positions at the Terminal Building by the annual Aircraft Parking Positions rental rate calculated under the subheading "Calculation of Aircraft Parking Position Fee" below and dividing by twelve (12). In the event of multiple users the monthly fees will be prorated per use by Airline. Landing Fees. (a) Rentals and Fees for the use of the Airfield, and for rights, licenses, and privileges granted to Airline under the Agreement shall be combined in and represented by a monthly landing fee (hereinafter referred to as the "Landing Fee "), which shall be determined by multiplying Airline's Total Landed Weight for the month by the annual Landing Fee rate per thousand (1,000) pound unit of landed weight. (b) Airline shall furnish to the Aviation Commission, on or before the tenth (10` day of each month, an accurate verified report containing Airline activity information for the previous month including the following: I. Airline's total number of Aircraft Arrivals, by type of aircraft and Maximum Gross Certificated Landing Weight of each type of aircraft. 2. The number of Enplaned Passengers and the number of Deplaned Passengers, including all through and non - revenue passengers. Passenger Facility Charges Nothing in the Agreement limits the Aviation Commission's right to impose on Airline's passengers a Passenger Facility Charge ( "PFC ") authorized under Section 1113(e) of the Federal Aviation Act of 1958, as amended by Section 9110 of the Omnibus Budget Reconciliation Act of 1990 (Pub. L. 101 -508, 49 U.S.C. App Paragraph 1513) and the rules and regulations promulgated there under (14 CFR Part 158), as may be amended from time to time ( "PFC Regulations "). Airline agrees to cooperate with the Aviation Commission in the collection of such charge and to collect and remit such charges, less the allowable collection fee and any amounts paid by ticket purchasers that are subject to reimbursement, to the Aviation Commission as provided in the PFC Regulations. The Aviation Commission shall apply any such PFC revenues to improvement of the Airport or to the retirement of Airport debt as required by the PFC Regulations. Airline Records Airline shall keep and maintain a complete and adequate set of records concerning its landed weights for a period equal to the FAA mandated time of such activity. If such records are maintained at a location other than Airline's Leased Premises, such records shall be retrievable within ten (10) business days. Each party to the Agreement, at its expense and on reasonable notice, shall have the right from time to time to audit and inspect the records of the other party relating to the performance of the Agreement, provided that such inspection is made during regular business hours. Interest on Past Due Accounts Rents and fees not received within fifteen (15) business days after the due date are past due. There shall be added to all unpaid past due sums owed the Aviation Commission shall accrue interest at the maximum interest rate then allowable by applicable law; provided, however, that if no maximum interest rate is then provided by applicable law, the interest rate shall be twelve (12) percent per annum. No interest shall be charged on any past due account until Airline has been contacted via written notification and given an opportunity to cure and payment is thirty (30) days past due, but such interest when assessed thereafter shall be computed from the due date. Such interest shall not accrue with respect to disputed items being contested in good faith by an Airline. C-6 Should Airline fail to pay rentals and fees when they are due three times within any 12 month period, Airline agrees to provide the Aviation Commission, within thirty (30) days of written notice from the Aviation Commission, a contract bond, irrevocable letter of credit, or other similar security acceptable to the Aviation Commission ( "Contract Security") in an amount equal to the estimate of three (3) months' Rentals and Fees payable by Airline, to guarantee the faithful performance by Airline of its obligations under the Agreement and the payment of all Rentals and Fees due. Airline shall be obligated to maintain such Contract Security throughout the remaining term of the Agreement, unless Airline pays rentals and fees in full and on time for a continuous 12 month period. Such Contract Security shall be in a form and with a company chosen by Airline and reasonably acceptable to the Aviation Commission and licensed to do business in the State of Georgia. In the event that any such Contract Security shall be for a period less than the full period required this paragraph or if Contract Security shall be cancelled, Airline shall provide a renewal or replacement Contract Security for the remaining required period. In the event the Aviation Commission is required to draw down or collect against Airline's Contract Security for any reason, Airline shall, within fifteen (15) business days after the Aviation Commission's written demand, take such action as may be necessary to replenish the existing Contract Security to its original amount (three [3] months' estimated Rentals and Fees) or to provide additional or supplemental Contract Security from another source so that the aggregate of all Contract Security is equal to three months' estimated Rentals and Fees payable by Airline. Upon Airline's election to assume the Agreement under Federal Bankruptcy Rules and Regulations and the Federal Judgeship Act of 1984 or any successor statute, as such may be amended, supplemented, or replaced, the Aviation Commission, by written notice to Airline given at any time within ninety (90) days of the date such event becomes known to the Aviation Commission, may impose or re- impose the security requirements described above on Airline. In such event, Airline shall provide the Aviation Commission with the required Contract Security within fifteen (l5) days from its receipt of such written notice and shall thereafter maintain such Contract Security in effect until the expiration or termination of the Agreement, unless Airline pays rentals and fees in full and on time for a continuous 12 -month period. If after notification by the Airport and the expiration of the 15 day period, should the Airline fail to obtain or keep in force such Contract Security required under the Agreement, such failure shall be grounds for immediate termination of the Agreement. Airline and the Aviation Commission agree that the Agreement constitutes an `unexpired lease' for the purposes of Section 365 of the United States Bankruptcy Code (Title I 1 USC) subject to assumption or rejection, and subject to the terms and conditions of assumption or rejection, as provided in said Section 365. Furthermore, Airline and the Aviation Commission agree that if Airline provides Contract Security in the form of a Contract bond or irrevocable letter of credit, such Contract Security provided by Airline is not `property of the estate' for purposes of Section 541 of the United States Bankruptcy Code (Title 11 USC), it being understood that any Contract Security is property of the third (3rd) party providing it (subject to the Aviation Commission's ability to draw against the Contract Security) and that all PFCs, less the allowable collection fees and any amounts paid by ticket purchasers that are subject to reimbursement, collected by Airline with respect to Enplaned Passengers at the Airport are property of the Aviation Commission. Recalculation of Rentals and Fees Rentals and Fees shall be adjusted annually during the term of the Agreement. Airlines shall be provided an opportunity to review the annual proposed budget thirty (30) to forty five (45) days prior to approval by the Aviation Commission. A statement showing the recalculation of the new rates for Rentals and Fees, in accordance with the rates and charges methodology provided for in the Agreement, shall be prepared and transmitted to Airline by the Executive Director within thirty (30) days after approval by the Aviation Commission and adoption by the County. Said statement shall then be deemed part of the Agreement and effective on the first (I") day of each Fiscal Year to which such Rentals and Fees apply. Records of Airport Cost Centers The Aviation Commission shall maintain accounting records documenting the following items for each Airport Cost Center: (1) Airport Revenue, (2) Airport Expense, and (3) other expenses of the Aviation Commission. The Aviation Commission shall further maintain records evidencing the allocation of capital funds obtained from the proceeds of the sale of Bonds or other capital fund sources to each Airport Cost Center. Included in the allocation to each Airport Cost Center shall be that cost center's proportionate share of Bond issuance expense, capitalized interest, and funding of special funds determined in accordance with allocation of costs funded through bond proceeds or other capital sources. C -7 Aviation Commission Reports On or before August 1 of each Fiscal Year, the Executive Director shall provide Airline with a budget calendar establishing dates for the Signatory Airlines to review the Annual Budget. On or before May 1 of each Fiscal Year, the Executive Director shall send Airline notification to submit forecast of Maximum Gross Certificated Landing Weight. On or before June 1 of each Fiscal Year, Airline shall submit to the Executive Director, in writing, a forecast of its Maximum Gross Certificated Landing Weight for the succeeding Fiscal Year. If such forecast is not submitted by Airline, the Aviation Commission will develop its own forecast of Maximum Gross Certificated Landing Weight for Airline for the succeeding Fiscal Year. If an Annual Budget is not adopted by the Aviation Commission before any such Fiscal Year, the Rentals and Fees in effect during the preceding Fiscal Year shall remain in effect until (1) a new Annual Budget has been adopted by the Aviation Commission, and (2) the Aviation Commission has calculated the Rentals and Fees in accordance therewith. The recalculated Rentals and Fees shall then be in effect retroactive (without penalties or interest if paid by the due date on invoice issued to Airline) to the beginning of such Fiscal Year. If the recalculated Rentals and Fees exceed 10% of the previous Fiscal Year, the invoiced amount for the difference between the preceding Fiscal Year rates and the current Fiscal Year rates will be broken into two equal invoice amounts payable within thirty (30) days of invoice date. Whenever the adjustment calculation involves an estimate, the estimate of the Aviation Commission shall be used, which estimate shall be based on past performance and reasonable and prudent future expectations. Whenever the adjustment calculation involves an estimate included in the Annual Budget, the estimated amount in the Annual Budget shall be used. Calculation of Terminal Building Rental Rates Each year the Aviation Commission shall calculate Terminal Building Requirement for the succeeding Fiscal Year by totaling the following amounts, as set forth in the Annual Budget: 1. The total of the direct and indirect Operation and Maintenance Expenses allocable to the Terminal Building. 2. Annual Debt Service plus Coverage (Net of available PFC proceeds authorized for the payment of a portion of Terminal Building Debt Service) reasonably allocable to the Terminal Building, as required by the Bond Resolution. An amount equal to 1.25 times the pro rata portion of the Annual Debt Service Requirement net of PFC proceeds, if any, authorized to pay debt service allocable to the Terminal Building, or such other amount as may be required by the Bond Resolution; 3. The amount of deposits to any funds and accounts required by the Bond Resolution and reasonably allocable to the Terminal Building. 4. Any other Airport Expense reasonably allocable to the Terminal Building not included in Paragraphs 1 through 3 above. 5. An amount equal to any deficit or credit estimated for operation of the Terminal Building during the then - current Fiscal Year or any adjustment carried over from preceding Fiscal Years to reflect any difference between actual versus estimated expenses. The average Rental Rate shall then be calculated by dividing the Terminal Building Requirement computed above by the amount of Rentable Space square footage in the Terminal Building. The average Rental Rate shall then be multiplied by the total amount of square footage used or occupied by Airline to determine the total annual Terminal Building space rent payable by each Airline. The space rents for all Joint Use Space shall be prorated among all Airlines according to the Joint Use Formula and each Airline shall pay its pro rata share of such space rents. Calculation of Loading Bridge Use Fee The Loading Bridge Use Fee shall be established and thereafter adjusted annually in the following manner: Each year the Aviation Commission shall calculate the Loading Bridge Requirement for the succeeding Fiscal Year by totaling the following amounts, as set forth in the Annual Budget: C -8 1. The total of the direct and indirect Operation and Maintenance Expenses allocable to the Loading Bridges. 2. An amount equal to 1.25 times the pro rata portion of the Annual Debt Service Requirement net of PFC proceeds, if any, authorized to pay debt service allocable to the Loading Bridges, or such other amount as may be required by the Bond Resolution; 3. The amount of deposits to any funds and accounts required by the Bond Resolution and allocable to the Loading Bridges; 4. Any other Airport Expense reasonably allocable to the Loading Bridges not included in Paragraphs (t) through (3) above; and 5. An amount equal to any deficit or credit estimated for operation of the Loading Bridges during the then - current Fiscal Year or any adjustment carried over from preceding Fiscal Years to reflect any difference between actual versus estimated expenses. The Loading Bridge Use Fee rate per Loading Bridge shall be calculated by dividing the Loading Bridge Use Fee calculated in accordance with paragraph (1) to (5) above by the number of Loading Bridges. An Airline's Loading Bridge Use Fee shall then be calculated by multiplying the Loading Bridge Use Fee rate per Loading Bridge by the number of Loading Bridges assigned to Airline. In the event of multiple users the fee will be allocable to all users on a per use basis. Calculation of Aircraft Parking Position Fee The Aircraft Parking Position fee shall be adjusted annually in the following manner: Each year the Aviation Commission shall calculate the Apron Area fee for the succeeding Fiscal Year by totaling the following amounts, as set forth in the Annual Budget: 1. The total of the direct and indirect Operation and Maintenance Expenses allocable to the Apron Area. 2. An amount equal to 1.25 times the pro rata portion of the Annual Debt Service allocated to the Apron Area net of available PFC proceeds, if any, authorized for the payment of a portion of Apron Area Annual Debt Service and Coverage; 3. The amount of deposits to any funds and accounts required by the Bond Resolution and allocable to the Apron Area; 4. Any other Airport Expense reasonably allocable to the Apron Area not included in Paragraphs (1) through (3) above; and 5. An amount equal to any deficit or credit estimated for operation of the Apron Area during the then - current Fiscal Year or any adjustment carried over from preceding Fiscal Years to reflect any difference between actual versus estimated expenses. The sum of the expenses identified in (1) to (5) above equals the Apron Area Requirement. The Aircraft Parking Positions fee shall then be calculated by dividing the Apron Area Requirement by the number of Aircraft Parking Positions at the Terminal Building. An Airline's Aircraft Parking Position fee shall then be calculated by multiplying the total number of Aircraft Parking Positions assigned to and used by Airline times the Apron Area Rental Rate per Aircraft Gate. Should Airline stop providing Air Transportation at the Airport during any Fiscal Year, the Aircraft Parking Positions fee shall be recalculated for the portion of the Fiscal Year that Airline did conduct regularly scheduled Air Transportation at the Airport. The recalculation will be based on the Aircraft Parking Positions Requirement being calculated without a Competitive Credit. Airline agrees to repay the Aviation Commission the amount of recalculated Aircraft Parking Positions fees minus any Aircraft Parking Positions fee payments made during that Fiscal Year. Airline agrees to pay this amount to the Aviation Commission within thirty (30) days of receipt of an invoice from the Aviation Commission. Should Airline use an Aviation Commission Aircraft Parking Position at the Terminal Building, Airline shall pay the Aviation Commission $75 per aircraft per turn (or per two hour period during which Airline's aircraft occupies an Aviation Commission Aircraft Parking Position). However, for Airline's aircraft parked at an Aviation Commission Aircraft Parking Position overnight, the Airline will pay the Aviation Commission $150 for the Remain C -4 Overnight fee (RON) in addition to the per turn fee. Over the term of the Agreement, these rates are subject to adjustment based on increasing cost of operating and maintaining Aviation Commission Aircraft Parking Positions. Calculation of Landing Fee Rate A. Each Fiscal Year, the Aviation Commission shall recalculate the Landing Fee Rate for the Fiscal Year commencing January lst, and for each succeeding Fiscal Year, based upon the Aviation Commission's proposed Annual Budget for the succeeding Fiscal Year by totaling the following estimated amounts: 1. The total of the direct and indirect estimated Operation and Maintenance Expenses of the Airfield Area; 2. An amount equal to the Airfield Area Annual Debt Service (plus Coverage), to pay debt service allocable to the Airfield Area, or such other amount as may be required by the Bond Resolution; 3. The amount of deposits to any funds and accounts required by the Bond Resolution and allocable to the Airfield Area; 4. Any other Airport Expense allocable to the Airfield Area not included in Paragraphs (1) through (3) above; and any overpayment or underpayment estimated for operation of the Airfield Area during the then - current Fiscal Year, or any adjustment carried over from the preceding Fiscal Year, to reflect any difference between actual versus estimated revenues or expenses; and 5. Any other Airfield Area expense not included in Paragraphs (1) to (5) above B. The Airfield Area Requirement for the succeeding Fiscal Year shall be calculated by subtracting from total Airport Expense the total of (1) to (5) above a Competitive Credit in an amount determined appropriate by the Aviation Commission each Fiscal Year. The purpose of the Competitive Credit is to keep the Airline's Airport cost per enplane passenger competitive with other airports similarly situated. The Aviation Commission may establish differing levels of Competitive Credit for different classes of airlines. 1. The Landing Fee Rate for the succeeding Fiscal Year shall be calculated by dividing the net Airfield Area Requirement computed above by the estimated Total Landed Weight of all Aircraft Arrivals at the Airport for the succeeding Fiscal Year as estimated by the Aviation Commission. 2. The Landing Fee shall be calculated by multiplying the Airline's portion of Total Landed Weight for the month by the Landing Fee Rate then in effect. 3. The Landing Fee is payable monthly. Subordination to Bond Resolution The Agreement and all rights of Airline under the Agreement are expressly subordinated and subject to the lien and provisions of any pledge, transfer, hypothecation, or assignment made (at any time) by the Aviation Commission to secure Bond financing. The Agreement is subject and subordinate to the terms, covenants, and conditions of the Bond Resolution authorizing the issuance of Bonds by Augusta - Richmond County. Augusta - Richmond County may amend or modify the Bond Resolution or make any change thereto that does not adversely affect Airline rights or obligations under the Agreement. Except for the preceding sentence, conflicts between the Agreement and the Bond Resolution shall be resolved in favor of the Bond Resolution. All definitional terms that are not specifically defined herein are to have the meanings set forth in the Bond Resolution. Capital Improvements Capital Improvement(s) or acquisition(s) paid for, financed, or refinanced with debt which negatively impacts rates and charges will be subject to the provisions described below under the subheading "Improvements Subject to Signatory Airline Consideration." Improvements Subject to Signatory Airline Consideration The Airport Director shall notify Airline, in writing, of the Aviation Commission's intent to undertake Capital Improvements or make an acquisition with newly issued Bonds. The Airport Director shall provide Airline with the following information associated therewith: C -10 1. A description of the proposed Capital Improvement(s), or acquisition together with cost estimates, scheduling, and any preliminary drawings, if applicable; 2. A statement of the need for the proposed acquisition(s) or Capital Improvement(s), along with the planned benefits to be derived from such expenditures; 3. The Aviation Commission's preferred means of financing or paying the costs of the proposed acquisition or Capital Improvement(s); 4. The planned allocation of the costs thereof to the Airfield Area or the Terminal Building and the projected effect on Airline Rentals and Fees; and 5. The planned refinancing of prior improvements or acquisitions where applicable to MII consideration. Within thirty (30) days after the Airport Director's delivery of said notice, Airline may request in writing, a meeting with the Airport Director for the purpose of discussing proposed acquisition or Capital Improvement(s). Should such a request be made, the Airport Director shall meet with Signatory Airlines collectively within sixty (60) days of the original notice. The Aviation Commission agrees to consider comments and recommendations of the Signatory Airlines with respect to proposed acquisition or Capital Improvement(s) to be financed with newly issued Bonds. Unless Signatory Airlines constituting an MII shall issue written disapprovals for a particular Capital Improvement in the Airfield Area (for those Capital Improvements in the Airfield Area requiring MII consideration) or for a Capital Improvement in the Terminal Building (for those Capital Improvements in the Terminal Building requiring MII consideration) within thirty (30) days of the date of the meeting, the Aviation Commission may proceed with said acquisition or Capital Improvements. The Aviation Commission may also proceed at any time with acquisition or Capital Improvements not requiring MII consideration, and with any other improvements or developments not defined as a Capital Improvement herein. In the event of MII disapproval of a proposed acquisition or Capital Improvement subject to MII consideration, the Airport Director shall have the option to convene a second meeting with the Signatory Airlines within forty-five (45) days following the date of disapproval for the purpose of providing additional information relative to the proposed acquisition or Capital Improvement and to request reconsideration. If, after the second meeting, Signatory Airlines constituting an MII notify the Aviation Commission that they do not concur with said acquisition or Capital Improvement(s), the acquisition or Capital Improvement(s) shall be deferred for two (2) years. In such ensuing timeline, the Aviation Commission may implement such Capital Improvement(s) and include, debt service (including coverage), or loan payments for such Capital Improvement(s) in the Rentals and Fees of the Signatory Airlines. The Aviation Commission may elect to move forward with said acquisition or Capital Improvement(s) through means other than issuing new Airport Revenue Bonds. Disapproval of an acquisition or Capital Improvement may be reversed by an MII at any time. Augusta - Richmond County or its Aviation Commission may issue Bonds, Subordinate Lien Bonds, or Other Indebtedness to finance any acquisition or Capital Improvements permitted under the Agreement. All costs associated with an acquisition or Capital Improvements permitted by under the Agreement, including but not limited to Operation and Maintenance Expenses (including appropriate reserves therefore) and capital charges, except as may be limited by the Agreement, shall be included in the determination of rates for Rentals and Fees. Obligations of Airline Maintenance and Repair. The Airline has undertaken certain maintenance and repair obligations with respect to portions of the Terminal Building and the Apron Area, including keeping those areas clean, safe and in working order. Ownership of Improvements. Upon completion or installation of any fixture, addition, or improvement on the Terminal Building, excluding Personal Property, such fixture, addition, or improvement shall immediately become the property of the Aviation Commission, as owner, subject only to the right of Airline to use same as set forth in the Agreement, and shall remain the property of the Aviation Commission thereafter with the sole right, title, and interest thereto. Liens. Airline shall cause to be removed promptly any and all liens of any nature arising out of or because of any construction performed by Airline or any of its contractors or subcontractors upon the Terminal Building or arising out of or because of the performance of any work or labor by or for it or them at said premises, reserving the right to contest in court the validity of any such liens. Airline shall have the right to post an appropriate bond to cover these obligations. C -11 If any person or corporation attempts to assert any lien against the Terminal Building for improvements made by Airline, Airline shall hold the Aviation Commission harmless from such claim, including the cost of defense. Payment of Taxes. Airline shall pay (but such payment shall not be considered part of Airport Revenue) all lawful taxes, assessments, or charges (including any sales taxes imposed on Rentals and Fees paid by Airline) imposed by entities other than the Aviation Commission that, during the term of the Agreement, may become a lien or be levied on any interest in Airline's Leased Premises or any possessory right that Airline might have in or to said premises or any improvements thereof, by reason of its use or occupation thereof or otherwise, reserving to Airline, however, the right to contest, by administrative proceeding, court or otherwise, the validity or applicability of any such tax, assessment, or charge. Rules and Regulations. Airline shall not use or permit to be used any Airport facilities for any purposes or uses other than those specifically authorized by the Agreement, and such other purposes or uses as may be mutually agreed upon in writing. Airline shall comply with and shall require its officers and employees and any other persons over whom it has control to comply with such reasonable and nondiscriminatory Rules and Regulations governing the use of Airport facilities pursuant to the Agreement as may from time to time be adopted and promulgated by the Aviation Commission, including, but not limited to, security, health, safety, sanitation, and good order, and with such amendments, revisions, or extensions thereof as may from time to time be adopted and promulgated by the Aviation Commission. The Executive Director will provide a copy of the initial Rules and Regulations to Airline within thirty (30) days of the date of the Agreement. Airline's right of access to the Airport shall be subject to security considerations and all federal, State, and local laws or regulations and all Airport rules, regulations, and ordinances now in effect or hereinafter adopted or promulgated. Airline shall, at all times, comply with any and all present and future laws, ordinances, and general rules or regulations of any public or governmental entity (other than the Airport Commission) with jurisdiction pertaining to its operations at the Airport now or at any time during the term that the Agreement is in force. Obligations of Aviation Commission The Aviation Commission covenants and agrees that, at all times, relevant to the Agreement, it will operate and maintain the Airport facilities, as defined in the Agreement, as a public airport consistent with and pursuant to the Sponsor's Grant Assurances given by the Aviation Commission to the U.S. Government under the Federal Airport Act and consistent with the terms and conditions of the Agreement. The Aviation Commission further covenants and agrees to manage the Airport in a reasonable and prudent manner and to use due diligence in the operation and maintenance of Airport facilities. Access to Terminal Buildings. Subject to security considerations, upon payment of the rentals and performance of the covenants of the Agreement by Airline, Airline and its officers, employees, passengers, prospective passengers, and other persons with Airline shall have (without additional charge) the free, unobstructed right of ingress to and egress from the Terminal Building by means of a lobby, passageway, or other Public Areas designated by the Aviation Commission for that purpose and connecting the Terminal Building with a vehicular roadway and walkways adjacent to the Terminal Building (and provided and maintained by the Aviation Commission and connecting with a public street or other public highway outside the Airport), and with the Apron Area adjacent to the Terminal Building. Use of Other Public Areas. The officers, employees, passengers, and prospective passengers of Airline and other persons doing business with Airline shall have the right to use any space, facilities, and conveniences provided by the Aviation Commission at the Airport for use by airline passengers and other persons (including waiting rooms, lobbies, hallways, corridors, restaurants, restrooms, observation galleries, streets, highways, and vehicular parking areas), in each case, however, only in common with others authorized by the Aviation Commission to do so, at the times, to the extent, in the manner, and for the purposes for which they are made available for such use, in compliance with the terms and conditions on which they are made available for such use, and only in conformity with the Rules and Regulations with respect to the use thereof. Aviation Commission's Reservations The Aviation Commission, at its sole discretion, reserves the right to further develop or improve the aircraft operating area and other portions of the Airport, including the right to improve, relocate, or remove any structure on the Airport, as it sees fit, and to take any action it considers necessary to protect the aerial approaches of the Airport against obstructions in accordance with 14 CFR Part 77 as it is presently set forth or as it may be amended from time C -12 to time. The Aviation Commission has reserved certain rights of entry on the Airline's Leased Premises for inspection and repair purposes as set forth in the Agreement. Airport Access License/Permit. The Aviation Commission reserves the right to establish a licensing or permit procedure for personnel and vehicles requiring access to the Airport operational areas and to levy a reasonable regulatory or administrative charge for issuance of such Airport access license or permit. Airline shall pay such charge with regard to its own personnel or vehicles and shall, at the request of the Executive Director, cooperate in the collection of such charge with regard to any personnel or vehicles used by its suppliers. Any such charge shall not exceed an amount necessary to cover the actual regulatory or administrative expenses of such control measures. Airline Employee Parking. The Executive Director may designate areas from time to time to be used for parking automobiles by Airline's employees (including handicapped or disabled employees) working at the Airport. The Aviation Commission shall have the right to charge a reasonable fee for such privilege. Damage or Destruction Damage or Destruction of Terminal Building. If, by reason of any cause, the Terminal Building is damaged to such an extent that the Terminal Building is untenantable in whole, or in substantial part, then, if the repairs and rebuilding necessary to restore the Terminal Building to its condition before the occurrence of the damage can, in the reasonable judgment of the Aviation Commission, be completed within two hundred and seventy (270) days from the date on which the damage occurred, the Executive Director shall so notify Airline, in writing, and shall proceed promptly with such repairs and rebuilding. In such event, the rental for the Terminal Building shall be abated pro rata for the period from the date of the occurrence of such damage to the date on which such repairs and rebuilding is completed. If such repairs and rebuilding cannot, in the reasonable judgment of the Aviation Commission, be completed within said 270 days, the Aviation Commission, at its option, to be evidenced by notice in writing to Airline, may either: (1) proceed promptly with said repairs and rebuilding, in which event said rental shall be abated as aforesaid, or (2) terminate the letting of the Terminal Building, in which event said rental shall be abated from and after the date of occurrence of the damage. The Aviation Commission shall use its best efforts to provide Airline with reasonable alternate space, if necessary, during any repairs, rebuilding, or reconstruction of the Terminal Building. The Executive Director shall advise Airline, as soon as practicable, of the Aviation Commission's intention regarding any necessary repairs or restorations. In the event, however, that the cause of the damage is the fault or negligence or wrongful act of Airline or its employees or agents, then the expense of all such repairs shall be borne by Airline and there shall be no abatement of rent or other charges payable under the Agreement. Insurance During the term of the Agreement, Airline shall provide, pay for, and maintain with companies reasonably satisfactory to the Aviation Commission, the types of insurance described in the Agreement. All liability policies of Airline and its contractors shall provide that the Aviation Commission is an Additional Insured to the extent of Airline's contractual obligations under the Agreement. Prior to expiration of any policy of insurance, Airline shall deliver to Airport evidence showing that such insurance coverage has been renewed. All required insurance coverages of Airline shall be primary to any insurance or self-insurance program of the Aviation Commission. Airline and the Aviation Commission agree that the minimum limits of the insurance required under the Agreement may, from time to time, become inadequate, and Airline agrees that it will increase such minimum limits upon receipt of written notice defining the basis of the increase. Airline shall furnish the Aviation Commission, within sixty (60) days of the effective date thereof, a certificate of insurance evidencing that such insurance is in force. Airline's insurance companies or its authorized representative shall give the Aviation Commission thirty (30) days prior written notice of any cancellation, intent not to renew, or material reduction in any policy's coverage, except in the application of the Aggregate Limit Provisions. In the event of a reduction to the Aggregate Limit, it is agreed that immediate steps will be taken to have the prior Aggregate Limit reinstated. Should at any time Airline not provide or maintain the insurance coverages required under the Agreement, the Aviation Commission may terminate or suspend the Agreement upon ten (10) days advance written notice to the Airline's Facility Manager and to Airline's Leasing contact. The amounts and types of insurance shall conform to the following minimum requirements with the use policies, forms, and endorsements or broader, where applicable. C -13 I . Workers compensation and Employer's Liability Insurance shall be maintained in force by Airline during the term of the Agreement for all employees engaged in the operations under the Agreement. The limits of coverage shall not be less than: Workers' Compensation Georgia Statutory Employer's Liability $1,000,000 Limit Each Accident $1,000,000 Limit Disease Aggregate $1,000,000 Limit Disease Each Employee 2. Airport Liability Insurance shall be maintained by Airline for the life of the Agreement. Coverage shall include, but not be limited to, Premises and Operations, Personal Injury, Contractual for the Agreement, Independent Contractors, Broad Form Property Damage, Products, and Completed Operations Coverage and shall not exclude the Explosion, Collapse, and Underground Property Damage Liability Coverage. Coverage shall be applicable to the operation of all mobile and ground equipment at the Airport. The limits of coverage shall not be less than: Airlines Operating Aircraft with fifty (50) or more seats: Bodily & Personal Injury $100,000,000 Combined Single Limit & Property Damage Liability Each Occurrence & Aggregate Airlines Operating Aircraft with less than fifty (50) seats: Bodily & Personal Injury $50,000,000 Combined Single Limit & Property Damage Liability Each Occurrence & Aggregate 3. Aircraft Liability Insurance shall be maintained by Airline during the term of the Agreement for all owned, non - owned, leased, or hired aircraft, including passenger coverage. The limits of coverage shall not be less than: Bodily & Personal Injury $100,000,000 Combined Single Limit & Property Damage Liability Each Occurrence & Aggregate 4. Business Automobile Liability Insurance shall be maintained by Airline during the term of the Agreement as to the ownership, maintenance, and use of all owned, non - owned, leased, or hired vehicles. The limits of coverage shall not be less than: Bodily & Personal Injury $5,000,000 Combined Single Limit & Property Damage Liability Each Occurrence & Aggregate 5. Umbrella Liability Insurance or Excess Liability Insurance may be used to reach the limits of liability required for the Airport Liability Policy, Aircraft Liability, and the Business Automobile Policy. The limits of coverage shall not be less than: Umbrella or Excess Liability Policy $100,000,000 Combined Single Limit Each Occurrence & Aggregate - Specific for the Agreement $200,000,000 Combined Single Limit Each Occurrence & Aggregate -Not Specific for the Agreement Primary Liability Limits for the underlying Airport General Liability Coverage: Bodily & Personal Injury & Property Damage Liability Indemnification $10,000,000 Combined Single Limit Each Occurrence & Aggregate Except where, and to the extent, it is caused by the negligent or wrongful acts or omissions or willful misconduct of the agents, employees, contractors, officers, or board of Augusta Richmond County and the Aviation Commission, Airline agrees to protect, defend, reimburse, indemnify, and hold Augusta Richmond County and the Aviation Commission, its agents, employees, and elected officers and each of them, free and harmless at all times from and against any and all claims, liability, expenses, losses, costs, fines, and damages (including actually incurred reasonable attorney's fees) and causes of action of every kind and character, whether or not meritorious, against or Mr from the Aviation Commission by reason of any damage to property, or the environment, claims and liability which is in or bodily injury (including death) incurred or sustained by any party hereto, any agent or employee of any party hereto, and any third or other party whomsoever, or any governmental agency, caused by or arising out of or incident to or in connection with Airline's performance under the Agreement, Airline's use or occupancy of the Airline Leased Premises, Airline's compliance with Title 49 CFR, Part 1542 requirements, Airline's negligent or wrongful acts, omissions, or operations under the Agreement or the performance, non - performance or purported performance of Airline or any breach of the terms of the Agreement by Airline. Environmental Conditions Airline shall not cause or permit any Hazardous Materials hereinafter to be placed, stored, generated, used, released, or disposed of in, on, under, about, or transported from any Airport premises by Airline, its agents, employees, contractors, or other person except in compliance with applicable Environmental Laws (as hereinafter defined). Any cost of remediating liabilities legally imposed on the Airport by the EPA directly caused by Airline's operations at the Airport will be additional rent under the Agreement. Airline shall comply, and shall at all times ensure that all Airport premises occupied by it are kept in compliance, with all applicable federal, State of Georgia, and local laws, ordinances, regulations, guidelines, and orders relating to health, safety and protection of persons, the public, and/or the environment with respect to Hazardous Materials (collectively "Environmental Laws "). Airline shall furnish upon the reasonable request of the Executive Director, all non- privileged reports, assessments, or other documents satisfactory to the Aviation Commission showing that no Airport premises occupied by Airline are being used nor have been used by Airline for any activities involving, directly or indirectly, the use, generation, treatment, storage, or disposal of any Hazardous Materials in violation of applicable Environmental Laws Termination By Airline. Airline, at its option, may declare the Agreement terminated in its entirety at any time Airline is not in default in the payment of Rentals and Fees to the Aviation Commission by giving the Aviation Commission sixty (60) days advance written notice, to be served as hereinafter provided, and by surrender of the Leased Premises on the happening of any one or more of the following events: 1. If the Terminal Building becomes untenantable in whole, or in substantial part, and the Aviation Commission does not terminate the letting thereof, pursuant to an option reserved to it in the Agreement, and does not proceed as promptly as reasonably practicable with the repairs and rebuilding necessary to restore the Terminal Building to its condition before the occurrence of the damage. 2. If the Aviation Commission fails to provide and maintain means for unobstructed ingress and egress to and from the Terminal Building in accordance with the provisions of the Agreement. 3. If the Aviation Commission closes the Airport to aircraft operations in general, or to the flights of Airline for reasons other than weather, acts of God, or other reasons beyond the Aviation Commission's control, and fails to reopen the Airport to such operations or flights for a period in excess of thirty (30) days. 4. If the Aviation Commission fails to comply with any of the terms or provisions of the Agreement or fails to promptly fulfill any of its obligations under the Agreement. No termination declared by Airline shall be effective unless and until not less than sixty (60) days have elapsed after the aforementioned written notice to the Aviation Commission specifying the date on which such termination shall take effect and the cause for which it is being terminated. The Aviation Commission may cure the cause of such termination within said 60-day period or such longer time as the parties may agree. Notwithstanding the occurrence of any event of default, Airline shall remain liable to the Aviation Commission for all Rentals and Fees payable under the Agreement and for all preceding breaches of any covenant of the Agreement. Furthermore, unless the Aviation Commission elects to cancel the Agreement, Airline shall remain liable for and promptly pay all Rentals and Fees accruing under the Agreement until the term of the Agreement has expired or until the Agreement is terminated by Airline as described above. By Aviation Commission. The Aviation Commission, at its option, may declare the Agreement terminated on the happening of any one or more of the following events, and may exercise all rights of entry and re -entry to the Terminal Building: 1. If the Rentals and Fees, or other money payments that Airline agrees to pay, or any part thereof, shall be unpaid on the date by which payment is required to be made the same shall become due. C -15 2. If Airline files a voluntary petition in bankruptcy, or makes a general assignment for the benefit of creditors, or if Airline is adjudicated as bankrupt. 3. The taking of jurisdiction of Airline or its assets by a court of competent jurisdiction pursuant to proceedings brought under the provisions of any federal reorganization act. 4. The appointment of a receiver or a trustee of Airline's assets by a court of competent jurisdiction or a voluntary agreement with Airline's creditors and the same is not removed in ninety (90) days. 5. If any act occurs that deprives Airline permanently of the rights, powers, and privileges necessary for the proper conduct and operation of its Air Transportation business. 6. If Airline abandons and fails to use the Terminal Building for a period of thirty (30) days at any one time, except when arising out of or related to force majeure event as described in the Agreement. 7. If Airline uses or permits the use of its Leased Premises in the Terminal Building at any time for any purpose for which the use thereof at that time is not authorized by the Agreement, or by a subsequent written agreement between the parties, or permits the use thereof in violation of any law, rule, or regulation with which Airline has agreed in the Agreement to conform. 8. If Airline discontinues Air Transportation to the Airport as a consequence of Airline's filing of a bankruptcy petition, voluntary or involuntary, seeking a reorganization or readjustment of its indebtedness under the federal bankruptcy laws or under any other statute of the United States or any state thereof, or being adjudged bankrupt, Airline shall be deemed to have forfeited its leasehold space. 9. If Airline fails to operate at least weekly scheduled passenger service departures from the Airport, for a period of ninety (90) days or more (except when arising out of or related to a force majeure event). 10. If Airline is in violation of any provision of the Agreement not cured within a sixty (60) day period as specified in the following paragraph. No termination declared by the Aviation Commission shall be effective unless and until at least sixty (60) days have elapsed after written notice to Airline specifying the date upon which such termination shall take effect and the cause for which it is being terminated. Notwithstanding such default, no termination shall occur if Airline cures the default within said sixty (60) day period; provided that if cure would reasonably require a longer time to cure, the Airline may take such additional time to cure, as agreed upon by the parties, as long as Airline commences to cure within the original sixty (60) day period and diligently pursues a cure. Possession by Aviation Commission In any of the termination events described under the subheading "Termination" herein, the Aviation Commission may take possession of Airline's Leased Premises upon termination of the Agreement and remove Airline's effects without being deemed guilty of trespassing. On said default, after expiration of any applicable cure period, the Aviation Commission shall have and reserve all of its available remedies at law as a result of said breach of the Agreement. Failure of the Aviation Commission to declare the Agreement terminated on default of Airline for any of the reasons set forth in the Agreement shall not operate to bar, destroy, or waive the right of the Aviation Commission to cancel the Agreement by reason of any subsequent violation of the terms of the Agreement. Rights on Termination or Reassignment Any leasehold improvements and any alterations shall be and remain the property of the Aviation Commission during the entire term of the Agreement and thereafter. On termination of the Agreement, Airline shall remove all Personal Property and leasehold improvements from its Leased Premises within thirty (30) days after said termination and restore the Leased Premises to their original condition, ordinary wear and tear excepted. If Airline fails to remove said Personal Property or leasehold improvements, the Aviation Commission may thereafter remove said property at Airline's expense. Assignment Airline shall not assign or transfer the Agreement or any right or leasehold interests granted to it by the Agreement or otherwise transfer any interest in or to the Terminal Building without the prior written approval of the Executive Director. Such approval shall not be unreasonably withheld. The Aviation Commission expressly reserves the right to withhold approval of a proposed assignment of any ticket counter space, office area space, baggage makeup space, airline operations space, or hold room space with associated aircraft parking position(s) if any other such space is vacant and available for lease and/or use on a per -use basis. C -16 Governmental Agreements The Agreement shall be subordinate to the provisions of any existing or future agreements between the Aviation Commission and the United States Government or other governmental authority, relative to the operation or maintenance of the Airport, the execution of which has been or will be required as a condition precedent to the granting of federal or other governmental funds for the development of the Airport, to the extent that the provisions of any such existing or future agreements are generally required by the United States or other governmental authority of other civil airports receiving such funds. The Aviation Commission agrees to provide Airline written advance notice of any provisions that would adversely modify the material terms of the Agreement. Agreements between the Aviation Commission and Other Airlines The Aviation Commission agrees not to enter into any scheduled airline operating agreement and terminal building lease with any other airline conducting similar operations at the Airport after the date of the Agreement that contains more favorable Rentals and Fees and other terms and conditions than those provided in the Agreement. The above notwithstanding, the Aviation Commission reserves the right to offer incentives, in any form, including the abatement of rentals and fees for a period of time, to airlines offering new air services, subject to and in compliance with, all Federal Grant Assurances, the FAA's Revenue Use Policy and applicable laws. Said incentives may provide an airline offering new air service more favorable terms, conditions, rentals, and fees for an initial period of time. Airline shall not be required to recompense the Aviation Commission for financial shortfalls, if any, caused by the offering of incentives. WE "a FORMS OF LEGAL OPINIONS The forms of Legal Opinions included as this Appendix D have been prepared by Murray Barnes Finister LLP, Atlanta, Georgia, Bond Counsel, and are substantially the forms to be given in connection with the delivery of the Series 2015 Bonds. [Remainder of Page Intentionally Left Blank[ MURRAY BARNES FINISTER LLP 8525 PIEDMONT ROAD - 5 PIEDMONT CENTER - SUITE 515 - ATLANTA, GEORGIA 30305 September _, 2015 Augusta - Richmond County Commission Augusta, Georgia Augusta Aviation Commission Augusta, Georgia Raymond James & Associates, Inc. Atlanta, Georgia Re: $6,675,000 Augusta, Georgia Airport General Revenue Refunding Bonds, Series 2015A (Non -AMT) To the Addressees: We have acted as Bond Counsel to Augusta, Georgia (the "Consolidated Government ") in connection with the execution and delivery of $6,675,000 in aggregate principal amount of its Airport General Revenue Refunding Bonds, Series 2015A (Non -AMT) (the "Series 2015A Bonds "). The Series 2015A Bonds are being issued pursuant to the Constitution and laws of the State of Georgia, including in particular the Revenue Bond Law of the State of Georgia (O.C.G.A. Section 36 -82 -60 et seq., as amended) (the "Revenue Bond Law ") and a Master Bond Resolution adopted by the Augusta - Richmond County Commission and the Augusta Aviation Commission (the "Aviation Commission ") on September 1, 2015 (the "Bond Resolution "). In connection with the issuance of the Series 2015A Bonds, we have examined the law and such certified proceedings, including a certified copy of the transcript of the validation proceeding concluded in the Superior Court of Richmond County, Georgia, and other documents as we have deemed necessary to render this opinion. In all such examinations, we have assumed the genuineness of signatures on original documents and the conformity to original documents of all copies submitted to us as certified, conformed or photographic copies, and as to certificates of public officials, we have assumed the same to have been properly given and to be accurate. The Series 2015A Bonds mature, bear interest and are subject to exchange, transfer and redemption at the times, in the manner and on the terms, and contain such other terms and conditions, as set forth in the Bond Resolution. All capitalized terms used but not otherwise defined herein shall have the meanings assigned thereto in the Bond Resolution. TELEPHONE: (678) 999 -0350 0 FACSIMILE: (678) 999-0557 0 INTERNET: www.murraybarneslaw.com September_, 2015 Page 2 The proceeds from the sale of the Series 2015A Bonds, together with other available moneys, will be used for the purpose of (a) refunding all of the Augusta, Georgia Airport Passenger Facility Charge and General Revenue Bonds, Series 2005A (Non-AMT) currently outstanding in the aggregate principal amount of $8,990,000 (the "Refunded Bonds") and (b) paying the costs of issuance of the Series 2015A Bonds. Concurrently with the issuance and delivery of the Series 2015A Bonds, the Consolidated Government will issue $3,850,000 in aggregate principal amount of Augusta, Georgia Airport General Revenue Refunding Bonds, Series 2015E (AMT) (the "Series 2015B Bonds" and, together with the Series 2015A Bonds, the "Series 2015 Bonds") pursuant to the Bond Resolution. The Series 2015 Bonds, when issued, will be the only bonds outstanding under the Bond Resolution. The Series 2015A Bonds are payable from and secured by a pledge of and first lien on the Net General Revenues of the Airport and Pledged PFC Revenues of the Airport on deposit in the Pledged PFC Series 2015A Account. The Series 2015A Bonds will be equally and ratably secured on a parity basis as to lien on the Net General Revenues with the Series 2015B Bonds. The Consolidated Government has reserved the right, under certain terms and conditions, to issue additional parity bonds ("Additional Bonds") pursuant to the Bond Resolution payable from and secured by a lien on the Net General Revenues of the Airport on parity with the lien thereon securing the Series 2015 Bonds. The Series 2015A Bonds constitute limited obligations of the Consolidated Government and are payable solely from the Net General Revenues of the Airport and Pledged PFC Revenues of the Airport on deposit in the Pledged PFC Series 2015A Account. Neither the general credit nor the taxing power of the State of Georgia or any political subdivision thereof, including the Consolidated Government, is pledged for the payment of the Series 2015A Bonds. The Series 2015A Bonds will not constitute a debt of the State of Georgia or any political subdivision of the State of Georgia, including the Consolidated Government within the meaning of any constitutional or statutory debt limitation. A portion of the proceeds derived from the sale of the Series 2015A Bonds, together with other available moneys, is being deposited in trust, simultaneously with the issuance and delivery of the Series 2015A Bonds, into a special segregated account designated as the "2005 Defeasance Account" with U.S. Bank National Association, as Bond Registrar and Paying Agent for the Refunded Bonds, which amounts will be held uninvested and will be used to pay the principal of and interest on the Refunded Bonds on the October 2, 2015 redemption date (the "Redemption Date"), all as provided in the Bond Resolution. As to the sufficiency of moneys held in trust in the 2005 Defeasance Account to provide money sufficient to pay the interest on and principal of the Refunded Bonds on the Redemption Date we express no opinion, and have relied on calculations prepared by Public Financial Management, Inc., financial advisor to the Consolidated Government. As to questions of fact material to our opinion, we have relied upon (a) representations of the Consolidated Government and the Aviation Commission (b) certified proceedings and other certifications of public officials furnished to us, and (c) representations and certifications of the Consolidated Government and the Aviation Commission relating to the September _, 2015 Page 3 use of the proceeds of the Series 2015A Bonds and the Refunded Bonds and the design, scope, function, use, cost and economic useful life of the facilities refinanced by the Refunded Bonds, without undertaking to verify the same by independent investigation. In our capacity as Bond Counsel, we express no opinion (a) with respect to the accuracy, completeness or sufficiency of the Preliminary Official Statement, dated August 25, 2015 or the Official Statement, dated September 1, 2015, related to the Series 2015 Bonds or (b) as to compliance by the Consolidated Government or the initial purchasers of the Series 2015A Bonds with any federal or state statute, regulation or ruling with respect to the sale or distribution of the Series 2015A Bonds. The Series 2015 Bonds will be treated as a single issue of bonds for most purposes under the Internal Revenue Code of 1986, as amended (the "Code "), and the exclusion from gross income for federal income tax purposes of the interest on each series of the Series 2015 Bonds may be dependent upon whether the interest on the other series of the Series 2015 Bonds is excluded from gross income for federal income tax purposes. On the date of this opinion, we are delivering an opinion with respect to the Series 2015E Bonds to the effect that based on assumptions substantially to the same effect as the assumptions on which this opinion is based, the interest on the Series 2015E Bonds is excluded from gross income for federal income tax purposes. Based upon the examinations, opinions and provisions referred to above, we are of the opinion, as of the date hereof and under existing law, as follows: 1. The Consolidated Government is a political subdivision of the State of Georgia with the power and authority under the laws and Constitution of the State of Georgia, and in particular the Revenue Bond Law, to (a) adopt the Bond Resolution and perform its obligations thereunder and (b) issue, execute, deliver and perform its obligations under the Series 2015A Bonds. 2. The Bond Resolution has been duly adopted by the Consolidated Government and constitutes the legal, valid and binding obligation of the Consolidated Government, enforceable against the Consolidated Government in accordance with its terms. The Bond Resolution creates a valid lien on the Net General Revenues of the Airport for the security of the Series 2015A Bonds, the Series 2015B Bonds and any Additional Bonds hereafter issued. The Bond Resolution creates a valid lien on the Pledged PFC Revenues of the Airport on deposit in the Pledged PFC Series 2015A Account of the Airport. 3. The Series 2015A Bonds have been duly authorized, executed and delivered by the Consolidated Government and constitute the legal, valid and binding limited obligations of the Consolidated Government, enforceable against the Consolidated Government in accordance with their terms. September_, 2015 Page 4 4. The Bond Resolution and the Series 2015A Bonds have been duly validated by the Superior Court of Richmond County. 5. The interest on the Series 2015A Bonds (including any original issue discount properly allocable to a holder thereof) is not includable in 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. The opinions set forth in the immediately preceding sentence are subject to the condition that the Consolidated Government and the Aviation Commission comply with all requirements of the Code that must be satisfied subsequent to the issuance of the Series 2015A Bonds in order that the interest on the Series 2015A Bonds be and continue to be excluded from gross income for federal income tax purposes. The Consolidated Government and the Aviation Commission have covenanted to comply with such requirements. Failure to comply with such covenants could cause interest on the Series 2015A Bonds to be included in federal gross income retroactive to the date of issuance of the Series 2015A Bonds. We express no opinion regarding any other federal tax consequences caused by the receipt or accrual of interest on the Series 2015A Bonds. 6. The interest on the Series 2015A Bonds is exempt from all present State of Georgia income taxes. The rights of the owners of the Series 2015A Bonds and the enforceability of the Series 2015A Bonds and the Bond Resolution may be subject to bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting creditors' rights heretofore or hereafter enacted to the extent constitutionally applicable and their enforcement may also be subject to the exercise of judicial discretion in appropriate cases. September _, 2015 Page 5 We are members of the State Bar of Georgia. Our opinions herein are limited to the laws of the State of Georgia and any applicable federal laws of the United States. This opinion is limited to the matters expressly set forth above, and no opinion is implied or may be inferred beyond the matters so stated. This opinion is intended solely for the use of the addressees and their permitted successors and/or assigns and may not be relied upon by any other person for any purpose without our prior written consent in each instance. We expressly disclaim any duty to update this opinion in the future for any changes of fact or law that may affect any of the opinions expressed herein. Very truly yours, MURRAY BARNES FINISTER LLP A Partner MURRAY BARNES FINISTER LLP 3525 PIEDMONT ROAD - 5 PIEDMONT CENTER - SUITE 515 - ATLANTA, GEORGIA 30305 September _, 2015 Augusta-Richmond County Commission Augusta, Georgia Augusta Aviation Commission Augusta, Georgia Raymond James & Associates, Inc. Atlanta, Georgia Re: $3,850,000 Augusta, Georgia Airport General Revenue Refunding Bonds, Series 2015B (AMT) To the Addressees: We have acted as Bond Counsel to Augusta, Georgia (the "Consolidated Government") in connection with the execution and delivery of $3,850,000 in aggregate principal amount of its Airport General Revenue Refunding Bonds, Series 2015B (AMT) (the "Series 2015B Bonds"). The Series 2015B Bonds are being issued pursuant to the Constitution and laws of the State of Georgia, including in particular the Revenue Bond Law of the State of Georgia (O.C.G.A. Section 36-82-60 et seq., as amended) (the "Revenue Bond Law") and a Master Bond Resolution adopted by the Augusta-Richmond County Commission and the Augusta Aviation Commission (the "Aviation Commission") on September 1, 2015 (the "Bond Resolution"). In connection with the issuance of the Series 2015B Bonds, we have examined the law and such certified proceedings, including a certified copy of the transcript of the validation proceeding concluded in the Superior Court of Richmond County, Georgia, and other documents as we have deemed necessary to render this opinion. In all such examinations, we have assumed the genuineness of signatures on original documents and the conformity to original documents of all copies submitted to us as certified, conformed or photographic copies, and as to certificates of public officials, we have assumed the same to have been properly given and to be accurate. The Series 2015B Bonds mature, bear interest and are subject to exchange, transfer and redemption at the times, in the manner and on the terms, and contain such other terms and conditions, as set forth in the Bond Resolution. All capitalized terms used but not otherwise defined herein shall have the meanings assigned thereto in the Bond Resolution. The proceeds from the sale of the Series 2015B Bonds, together with other available moneys, will be used for the purpose of (a) refunding all of the Augusta, Georgia TELEPHONE: (678) 999-0350 0 FACSIMILE: (678) 999-0357 0 INTERNET: www.murraybarneslaw.com September _, 2015 Page 2 Airport General Revenue Bonds, Series 2005C (AMT) currently outstanding in the aggregate principal amount of $6,090,000 (the "Refunded Bonds ") and (b) paying the costs of issuance of the Series 2015B Bonds. Concurrently with the issuance and delivery of the Series 2015B Bonds, the Consolidated Government will issue $6,6 75,000 in aggregate principal amount of Augusta, Georgia Airport General Revenue Refunding Bonds, Series 2015A (Non -AMT) (the "Series 2015A Bonds" and, together with the Series 2015B Bonds, the "Series 2015 Bonds ") pursuant to the Bond Resolution. The Series 2015 Bonds, when issued, will be the only bonds outstanding under the Bond Resolution. The Series 2015B Bonds are payable from and secured by a pledge of and first lien on the Net General Revenues of the Airport. The Series 2015B Bonds will be equally and ratably secured on a parity basis as to lien on the Net General Revenues of the Airport with the Series 2015A Bonds. The Consolidated Government has reserved the right, under certain terms and conditions, to issue additional parity bonds ( "Additional Bonds ") pursuant to the Bond Resolution payable from and secured by a lien on the Net General Revenues of the Airport on parity with the lien thereon securing the Series 2015 Bonds. The Series 2015B Bonds constitute limited obligations of the Consolidated Government and are payable solely from the Net General Revenues of the Airport. Neither the general credit nor the taxing power of the State of Georgia or any political subdivision thereof, including the Consolidated Government, is pledged for the payment of the Series 2015B Bonds. The Series 2015B Bonds will not constitute a debt of the State of Georgia or any political subdivision of the State of Georgia, including the Consolidated Government, within the meaning of any constitutional or statutory debt limitation. A portion of the proceeds derived from the sale of the Series 2015B Bonds, together with other available moneys, is being deposited in trust, simultaneously with the issuance and delivery of the Series 2015B Bonds, into a special segregated account designated as the "2005 Defeasance Account" with U.S. Bank National Association, as Bond Registrar and Paying Agent for the Refunded Bonds, which amounts will be held uninvested and will be used to pay the principal of and interest on the Refunded Bonds on the October 2, 2015 redemption date (the "Redemption Date "), all as provided in the Bond Resolution. As to the sufficiency of moneys held in trust in the 2005 Defeasance Account to provide money sufficient to pay the interest on and principal of the Refunded Bonds on the Redemption Date we express no opinion, and have relied on calculations prepared by Public Financial Management, Inc., financial advisor to the Consolidated Government. As to questions of fact material to our opinion, we have relied upon (a) representations of the Consolidated Government and the Aviation Commission (b) certified proceedings and other certifications of public officials furnished to us, and (c) representations and certifications of the Consolidated Government and the Aviation Commission relating to the use of the proceeds of the Series 2015B Bonds and the Refunded Bonds and the design, scope, function, use, cost and economic useful life of the facilities refinanced by the Refunded Bonds, without undertaking to verify the same by independent investigation. September _, 2015 Page 3 In our capacity as Bond Counsel, we express no opinion (a) with respect to the accuracy, completeness or sufficiency of the Preliminary Official Statement, dated August 25, 2015 or the Official Statement, dated September 1, 2015, related to the Series 2015 Bonds or (b) as to compliance by the Consolidated Government or the initial purchasers of the Series 2015B Bonds with any federal or state statute, regulation or ruling with respect to the sale or distribution of the Series 2015B Bonds. The Series 2015 Bonds will be treated as a single issue of bonds for most purposes under the Internal Revenue Code of 1986, as amended (the "Code "), and the exclusion from gross income for federal income tax purposes of the interest on each series of the Series 2015 Bonds may be dependent upon whether the interest on the other series of the Series 2015 Bonds is excluded from gross income for federal income tax purposes. On the date of this opinion, we are delivering an opinion with respect to the Series 2015A Bonds to the effect that based on assumptions substantially to the same effect as the assumptions on which this opinion is based, the interest on the Series 2015A Bonds is excluded from gross income for federal income tax purposes. Based upon the examinations, opinions and provisions referred to above, we are of the opinion, as of the date hereof and under existing law, as follows: 1. The Consolidated Government is a political subdivision of the State of Georgia with the power and authority under the laws and Constitution of the State of Georgia, and in particular the Revenue Bond Law, to (a) adopt the Bond Resolution and perform its obligations thereunder and (b) issue, execute, deliver and perform its obligations under the Series 2015B Bonds. 2. The Bond Resolution has been duly adopted by the Consolidated Government and constitutes the legal, valid and binding obligation of the Consolidated Government, enforceable against the Consolidated Government in accordance with its terms. The Bond Resolution creates a valid lien on the Net General Revenues of the Airport for the security of the Series 2015A Bonds, the Series 2015E Bonds and any Additional Bonds hereafter issued. 3. The Series 2015B Bonds have been duly authorized, executed and delivered by the Consolidated Government and constitute the legal, valid and binding limited obligations of the Consolidated Government, enforceable against the Consolidated Government in accordance with their terms. 4. The Bond Resolution and the Series 2015B Bonds have been duly validated by the Superior Court of Richmond County. 5. The interest on the Series 2015B Bonds (including any original issue discount properly allocable to a holder thereof) is not includable in gross income for federal income tax purposes except for interest on any Series 2015B Bond during any September 2015 Page 4 period while such Series 2015B Bond is held by a "substantial user" of the facilities refinanced by the Series 2015B Bonds or a "related person," as those terms are used in Section 147 of the Code. Interest on the Series 2015B Bonds is an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations. The opinions set forth in the immediately preceding sentence are subject to the condition that the Consolidated Government and the Aviation Commission comply with all requirements of the Code that must be satisfied subsequent to the issuance of the Series 2015B Bonds in order that the interest on the Series 2015B Bonds be and continue to be excluded from gross income for federal income tax purposes. The Consolidated Government and the Aviation Commission have covenanted to comply with such requirements. Failure to comply with such covenants could cause interest on the Series 2015B Bonds to be included in federal gross income retroactive to the date of issuance of the Series 2015B Bonds. We express no opinion regarding any other federal tax consequences caused by the receipt or accrual of interest on the Series 2015B Bonds. 6. The interest on the Series 2015B Bonds is exempt from all present State of Georgia income taxes. The rights of the owners of the Series 2015B Bonds and the enforceability of the Series 2015B Bonds and the Bond Resolution may be subject to bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting creditors' rights heretofore or hereafter enacted to the extent constitutionally applicable and their enforcement may also be subject to the exercise of judicial discretion in appropriate cases. We are members of the State Bar of Georgia. Our opinions herein are limited to the laws of the State of Georgia and any applicable federal laws of the United States. This opinion is limited to the matters expressly set forth above, and no opinion is implied or may be inferred beyond the matters so stated. This opinion is intended solely for the use of the addressees and their permitted successors and/or assigns and may not be relied upon by any other person for any purpose without our prior written consent in each instance. We expressly disclaim any duty to update this opinion in the future for any changes of fact or law that may affect any of the opinions expressed herein. Very truly yours, MURRAY BARNES FINISTER LLP By: A Partner SUMMARY OF CONTENTS' Page Introduction ............................... ............................... 1 Plan of Financing ...................... ............................... 7 The Series 2015 Bonds ............. ............................... 8 Security and Sources of Payment for the Series 2015 Bonds ........ ............................... 11 The Consolidated Government ............................. 18 The Aviation Commission ...... ............................... 19 TheAirport ............................. ............................... 21 Airport Financial Information ............................... 35 Investment Considerations ...... ............................... 52 LegalMatters .......................... ............................... 57 Miscellaneous ......................... ............................... 59 Certification ........................... ............................... 64 Appendix A: Financial Statements of theAirport ........................ ............................... A -1 Appendix B: Summary of the Bond Resolution........................ ............................... B -1 Appendix C: Summary of the Airline Agreements...................... ............................... C -1 Appendix D: Forms of Legal Opinions ............... D -1 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. $10,525,000 AUGUSTA, GEORGIA Airport General Revenue Refunding Bonds, Series 2015 New Issue New Issue $6,675,000 Airport General Revenue Refunding Bonds, Series 2015A (Non -AMT) $3,850,000 Airport General Revenue Refunding Bonds, Series 2015E (AMT) 1 4 al Airport OFFICIAL STATEMENT RAYMOND JAMES Dated: September 1, 2015 1 See detailed "TABLE OF CONTENTS" on pages (i) to (ii). CONTINUING DISCLOSURE CERTIFICATE This Continuing Disclosure Certificate (the "Disclosure Certificate ") is executed and delivered by Augusta, Georgia (the "Consolidated Government ") in connection with the issuance of $6,675,000 in aggregate principal amount of its Airport General Revenue Refunding Bonds, Series 2015A (Non -AMT), and $3,850,000 in aggregate principal amount of its Airport General Revenue Refunding Bonds, Series 2015B (AMT) (collectively the `Bonds "). The Bonds are being issued pursuant to a Master Bond Resolution adopted by the Augusta Aviation Commission and by the Augusta - Richmond County Commission on September 1, 2015 (the "Bond Resolution "). The Consolidated Government covenants and agrees as follows: SECTION 1. Purpose of the Disclosure Certificate This Disclosure Certificate is being executed and delivered by the Consolidated Government for the benefit of the beneficial owners of the Bonds (the "Bondholders ") and in order to assist the Participating Underwriters in complying with Securities and Exchange Commission Rule 15c2- 12(b)(5). SECTION 2. Definitions In addition to the definitions set forth in the Bond Resolution, which apply to any capitalized term used in this Disclosure Certificate unless otherwise defined in this Disclosure Certificate, the following capitalized terms shall have the following meanings: "Annual Report" shall mean any Annual Report provided by the Consolidated Government pursuant to, and as described in, Sections 3 and 4 of this Disclosure Certificate. "Dissemination Agent" shall mean 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. "EMMA" shall mean the Electronic Municipal Market Access system of the MSRB. "Fiscal Year" shall mean any period of twelve consecutive months adopted by the Consolidated Government as its fiscal year for financial reporting purposes and shall initially mean the period beginning on January 1 of each calendar year and ending on December 31 of the same calendar year. "Listed Events" shall mean any of the events listed in Section 5(a) of this Disclosure Certificate. "MSRB" shall mean the Municipal Securities Rulemaking Board. "Participating Underwriters" shall mean any of the original underwriters of the Bonds required to comply with the Rule in connection with the offering of the Bonds. "Rule" shall mean 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. ATLANTA 5667245.1 SECTION 3. Provision of Annual Reports (a) The Consolidated Government shall, or shall cause the Dissemination Agent to, not later than the last day of the seventh month after the end of each Fiscal Year (currently July 31), commencing with Fiscal Year 2015, 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 Section 4 of this Disclosure Certificate. Not later than fifteen (15) business days prior to such date, the Consolidated Government shall 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 Section 4 of this Disclosure Certificate; provided that the audited financial statements of the Airport may be submitted separately from the balance of the Annual Report. (b) If the Consolidated Government is unable to provide to the MSRB an Annual Report by the date required in subsection (a), the Consolidated Government shall send a notice to the MSRB in an electronic format as prescribed by the MSRB (which, as of the date hereof, is EMMA) in substantially the form attached as Exhibit A hereto. (c) The Dissemination Agent shall: (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 this Disclosure Certificate to the MSRB in an electronic format as prescribed by the MSRB (which, as of the date hereof, is EMMA) and stating the date it was provided. (d) The Consolidated Government shall 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). (e) If the audit report specified in clause (1) of Section 4 hereof is not submitted as part of the Annual Report to the MSRB pursuant to Section 3(a) hereof, the Consolidated Government shall, or shall 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. SECTION 4. Content of Annual Reports The Consolidated Government's Annual Report shall contain or incorporate by reference the following: (1) the financial statements of the Airport for the preceding Fiscal Year, which shall be prepared in accordance with generally accepted accounting principles, as in effect from time to time, and which shall be accompanied by an audit report, if -2- ATLANTA 5667245.1 available at the time of submission of the Annual Report to the MSRB pursuant to Section 3(a) hereof, 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; (2) if generally accepted accounting principles have changed since the last Annual Report was submitted pursuant to Section 3(a) hereof 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) enplements 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 shall clearly identify each such other document so incorporated by reference. SECTION 5. Reporting of Significant Events (a) This Section 5 shall govern the giving of notices of the occurrence of any of the following events with respect to the 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 Bonds, or other material events affecting the tax status of the Bonds; (7) Modifications to rights of Bondholders, if material; -3- ATLANTA 5667245.1 (8) Bond calls, if material, and tender offers; (9) Defeasances; (10) Release, substitution, or sale of property securing repayment of the 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. (b) For the purposes of the event identified in subsection (a)(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. (c) If the Consolidated Government obtains knowledge of the occurrence of a Listed Event, the Consolidated Government shall file in a timely manner not in excess of ten business days after the occurrence of the Listed Event, 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 subsections (a)(8) (other than tender offers) and (9) need not be given under this Disclosure Certificate any earlier than the notice (if any) of the underlying event is given to the owners of the affected Bonds pursuant to the Bond Resolution. SECTION 6. Termination of Reporting Obligation The Consolidated Government's obligations under this Disclosure Certificate shall terminate upon the legal defeasance, prior redemption, or payment in full of all of the Bonds. SECTION 7. 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 -4- ATLANTA 5667245.1 this Disclosure Certificate, and may discharge any such Dissemination Agent, with or without appointing a successor Dissemination Agent. SECTION 8. Amendment: Waiver Notwithstanding any other provision of this Disclosure Certificate, the Consolidated Government may amend this Disclosure Certificate, and any provision of this 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 Bonds, or type of business conducted by such obligor; (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 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 herein to violate the Rule if such amendment or waiver had been effective on the date hereof 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 Section 4 hereof is amended or waived, the first Annual Report containing any amended, or omitting any waived, operating data or financial information shall 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 Section 4 hereof 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 shall 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 shall 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 shall also be quantitative. The Consolidated Government shall 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. SECTION 9. Additional Information Nothing in this Disclosure Certificate shall be deemed to prevent the Consolidated Government from disseminating any other information, using the means of dissemination set forth in this 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 this Disclosure Certificate. If the Consolidated Government chooses to include any information in any Annual Report or notice of -5- ATLANTA 5667245.1 occurrence of a Listed Event in addition to that which is specifically required by this Disclosure Certificate, the Consolidated Government shall have no obligation under this Disclosure Certificate to update such information or include it in any future Annual Report or notice of occurrence of a Listed Event. SECTION 10. Default In the event of a failure of the Consolidated Government to comply with any provision of this 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 this Disclosure Certificate. A default under this Disclosure Certificate shall not be deemed an "event of default" or "default" under the Bond Resolution, and the sole remedy under this Disclosure Certificate in the event of any failure of the Consolidated Government to comply with this Disclosure Certificate shall be an action to compel performance. SECTION 11. Duties, Immunities, and Liabilities of Dissemination Agent The Dissemination Agent shall have only such duties as are specifically set forth in this Disclosure Certificate, and, to the extent allowed by applicable law, the Consolidated Government agrees to indemnify and save the Dissemination Agent, its officers, directors, employees, and agents, harmless against any loss, expense, and liabilities which it may incur arising out of or in the exercise or performance of its powers and duties hereunder, including the costs and expenses (including attorneys' fees) of defending against any claim of liability, but excluding liabilities due to the Dissemination Agent's negligence or willful misconduct. The obligations of the Consolidated Government under this Section 11 shall survive resignation or removal of the Dissemination Agent and payment of the Bonds. SECTION 12. Identifying Information All documents provided to the MSRB pursuant to this Disclosure Certificate shall be accompanied by identifying information prescribed by the MSRB. SECTION 13. Beneficiaries This Disclosure Certificate shall inure solely to the benefit of the Consolidated Government, the Dissemination Agent, the Participating Underwriters, and the Bondholders, and shall create no rights in any other person or entity. -6- ATLANTA 5667245.1 Date: September 24, 2015 ems' CN M() IW tv "4 ••d . % © (SEAL) �w• .r � f � io . s 3 ss " `.� •i .sqt ,.,r"� ,r Attest: � i �•MNM %SCORG N- . County Commission x AUGUSTA, GEORGIA L Mayor, Augusta- Riclurt County Commission H ATLANTA 5667245.1 EXHIBIT A NOTICE TO MSRB OF FAILURE TO FILE ANNUAL REPORT Name of Issuer: AUGUSTA, GEORGIA Name of Bond Issue: $6,675,000 AUGUSTA, GEORGIA AIRPORT GENERAL REVENUE REFUNDING BONDS, SERIES 2015A (NON -AMT) $3,850,000 AUGUSTA, GEORGIA AIRPORT GENERAL REVENUE REFUNDING BONDS, SERIES 2015B (AMT) Date of Issuance: SEPTEMBER 24, 2015 NOTICE IS HEREBY GIVEN that Augusta, Georgia (the "Consolidated Government ") has not provided an Annual Report with respect to the above -named Bonds as required by the Master Bond Resolution adopted by the Augusta Aviation Commission and by the Augusta - Richmond County Commission on September 1, 2015. The Consolidated Government anticipates that the Annual Report will be filed by Dated: am AUGUSTA, GEORGIA Mayor, Augusta - Richmond County Commission ATLANTA 5667245.1 STANDARD & POOR'S RATINGS SERVICES 5ewYork,NY10041 -M3r New York, NY 10041.0003 WGRAW HILL FINANCIAL tel212- 438 -2000 reference no.:776342 August 25, 2015 Augusta Regional Airport 1501 Aviation Way Augusta, GA 30906 Attention: Mr. Risa A. Bingham, MBA, CPA, Finance Director, DBELO Re: US$6,675,000 City of Augusta, Georgia, Airport General Revenue Refunding Bonds, (Augusta Regional Airport), (Non AMT), Series 2015A, dated: Date of delivery, due: January 1, 2035 USS3,850,000 City of Augusta, Georgia, Airport General Revenue Refunding Bonds, (Augusta Regional Airport), (AMT), Series 20158, dated. Date of delivery, due: January 1, 2025 Dear Mr. Bingham: Pursuant to your request for a Standard & Poor's Ratings Services ( "Ratings Services ") rating on the above - referenced obligations, Ratings Services has assigned a rating of "BBB ". Standard & Poor's views the outlook for this rating as stable. A copy of the rationale supporting the rating is enclosed. This letter constitutes Ratings Services' permission for you to disseminate the above - assigned ratings to interested parties in accordance with applicable laws and regulations. However, permission for such dissemination (other than to professional advisors bound by appropriate confidentiality arrangements) will become effective only after we have released the rating on standardandpoors.com. Any dissemination on any Website by you or your agents shall include the full analysis for the rating, including any updates, where applicable. 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No person is intended as a third party beneficiary of any credit rating engagement or of a credit rating when issued. PF Ratings U.S. (02116113) MOODY'S INVESTORS SERVICE August 26, 2015 Ms. Risa Bingham Augusta (City Of) GA Airport Enterprise Augusta Regional Airport 1501 Aviation Way Augusta, GA 30906 Dear Ms. Risa Bingham: 7 World Trade Center 250 Greenwich Street New York 10007 www.moodys.com We wish to inform you that on August 19, 2015, Moody's Investors Service reviewed and assigned a rating of Baa2 to Augusta (City Of) GA Airport Enterprise, Airport General Revenue Refunding Bonds, Series 2015A • Baa2 to Augusta (City Of) GA Airport Enterprise, Airport General Revenue Refunding Bonds, Series 2015B Credit ratings issued by Moody's Investors Service, Inc. and its affiliates ( "Moody's ") are Moody's current opinions of the relative future credit risk of entities, credit commitments, or debt or debt -like securities and are not statements of current or historical fact. 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However, Moody's is not an auditor and cannot in every instance independently validate or verify information received in the rating process. Moody's expects and is relying upon you possessing all legal rights and required consents to disclose the information to Moody's, and that such information is not subject to any restrictions that would prevent use by Moody's for its ratings process. In assigning the Credit Ratings, Moody's August 26, 2015 Ms. Risa Bingham Augusta (City Of) GA Airport Enterprise Augusta Regional Airport 1501 Aviation Way Augusta, GA 30906 has relied upon the truth, accuracy, and completeness of the information supplied by you or on your behalf to Moody's. Moody's expects that you will, and is relying upon you to, on an ongoing basis, promptly provide Moody's with all information necessary in order for Moody's to accurately and timely monitor the Credit Ratings, including current financial and statistical information. 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Sincerely, Earl Heffintrayer AVP- Analyst RULE 15c2 -12 CERTIFICATE Augusta, Georgia (the "Consolidated Government "), as of the date hereof, hereby "deems final" (within the meaning of Securities Exchange Act Rule 15c2 -12 ( "Rule 15c2 -12 ")) the Preliminary Official Statement, dated August 25, 2015 (the "Preliminary Official Statement "), relating to the bonds designated "Augusta, Georgia Airport General Revenue Refunding Bonds, Series 2015A (Non- AMT)" and "Augusta, Georgia Airport General Revenue Refunding Bonds, Series 2015B (AMT)" (collectively the "Bonds "), except for the permitted omissions described in paragraph (b)(1) of Rule 15c2 -12. The information contained in the Preliminary Official Statement relating to the Consolidated Government and the Consolidated Government's Augusta Regional Airport at Bush Field is complete, accurate, true, and correct and does not contain any untrue statement of a material fact and does not omit to state a material fact necessary in order to make the statements therein made, in light of the circumstances under which they were made, not misleading. The Consolidated Government hereby authorizes the use and distribution of the Preliminary Official Statement by Raymond James & Associates, Inc. (the "Underwriter "), in connection with the offering of the Bonds. The Consolidated Government will deliver, or cause to be delivered, to the Underwriter copies of the Preliminary Official Statement in sufficient quantity to comply with paragraph (b)(2) of Rule 15c2 -12. DATED as of August 25, 2015. AUGUSTA, GEORGIA By, m-* M yor Acknowledged as of August 25, 2015. RAYMOND JAMES & ASSOCIATES, INC., as Underwriter W:B0 M"' - ATLANTA: 5429924.1 IN THE SUPERIOR COURT OF RICHMOND COUNTY STATE OF GEORGIA STATE OF GEORGIA, ) Plaintiff, ) VS. ) AUGUSTA, GEORGIA, ) Defendant. ) 7 o r. 2; `�C � CIVIL ACTION FI NO. BOND VALIDATION N _O CPI 'd 0 3 w S H C RYL S. JOLLIt PETITION AND COMPLAINT r m r�C The STATE OF GEORGIA, by and through Ashley Wright, District Attorney of the Augusta Judicial Circuit, in which is located Augusta, Georgia, files this petition against AUGUSTA, GEORGIA, as defendant, and respectfully shows: 1. Defendant Augusta, Georgia (the "Consolidated Government") constitutes a county and a municipality under the laws of the Constitution of the State of Georgia, existing under and pursuant to Article IX, Section III, Paragraph II(a) of the Constitution of the State of Georgia and an act of the General Assembly of the State of Georgia (Georgia Laws 1995, p. 3648 et seq., as amended the "Act "), and pursuant to referenda held within the former City of Augusta and Richmond County, and is a political subdivision of the State of Georgia in the exercise of the respective powers of a municipality and a county. The Consolidated Government owns Augusta Regional Airport at Bush Field (the "Airport") and 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. 2. This Court has jurisdiction over the above -named defendant and the subject matter of this proceeding by virtue of, among other things, the Act and the Revenue Bond Law of the State of Georgia (O.C.G.A. Section 36- 82 -60, et seq.), as amended (the "Revenue Bond Lave'). 3. Pursuant to the terms and conditions of a Master Bond Resolution adopted by the Augusta - Richmond County Commission (the "Commission ") on February 1, 2005 and by the Augusta Aviation Commission on January 20, 2005, as amended and supplemented by a First Supplemental Bond Resolution adopted by the Commission on February 1, 2005 and by the Augusta Aviation Commission on January 20, 2005 and a Second Supplemental Bond Resolution adopted by the Commission and the Augusta Aviation Commission on February 17, 2005 (collectively, the "Prior Bond Resolution "), the Consolidated Government has heretofore authorized, issued and delivered its (i) Airport Passenger Facility Charge and General Revenue Bonds, Series 2005A (Non -AMT) (the "Series 2005A Bonds' in the original aggregate principal amount of $8,990,000, (ii) Airport Passenger Facility Charge and General Revenue Bonds, Series 2005B (AMT) in the original aggregate principal amount of $4,415,000, which have been paid in full and are no longer outstanding and (iii) Airport General Revenue Bonds, Series 2005C (AMT) in the original aggregate principal amount of $6,200,000 (the "Series 2005C Bonds" and, together with the Series 2005A Bonds, the "Series 2005 Bonds'). The Series 2005 Bonds are the only revenue bonds of the Consolidated Government presently outstanding under the Prior Bond Resolution. 2 4. Defendant proposes to issue $6,675,000 aggregate principal amount of its "Augusta, Georgia Airport General Revenue Refunding Bonds, Series 2015A (Non- AMT)" (the "Series 2015A Bonds'), to be dated the date of issuance, to be initially issued as book -entry only bonds in fully registered form without coupons, in the denomination of $5,000 or any integral multiple thereof, to be numbered RA -1 upward, to be transferable to subsequent owners as therein provided, to bear interest from date at the rate per annum set forth below opposite each principal maturity, all interest payable semiannually on January 1' and July I in each year, commencing January 1, 2016, and the principal to mature on January 1 in the following years and principal amounts: Year Principal Amount Interest Rate 2026 $530,000 5.000% 2027 560,000 5.000 2028 585,000 5.000 2024 615,000 5.000 2030 645,000 5.000 2031 675,000 5.000 2032 710,000 5.000 2033 745,000 5.000 2034 785,000 5.000 2035 825,000 5.000 All other facts pertaining to the Series 2015A Bonds are set forth in detail in the Bond Resolution (hereafter defined). a Defendant proposes to issue $3,850,000 aggregate principal amount of its "Augusta, Georgia Airport General Revenue Refunding Bonds, Series 2015B (AMT)" (the "Series 2015B Bonds" and, together with the Series 2015A Bonds, the "Series 2015 Bonds "), to be dated the date of issuance, to be initially issued as book -entry only bonds in fully registered 3 form without coupons, in the denomination of $5,000 or any integral multiple thereof, to be numbered RB -1 upward, to be transferable to subsequent owners as therein provided, to bear interest from date at the rate per annum set forth below opposite each principal maturity, all interest payable semiannually on January 1 and July 1 in each year, commencing January 1, 2016, and the principal to mature on January 1 in the following years and principal amounts: Year Principal Amount Interest Rate 2017 $350,000 5.000% 2018 365,000 5.000 2019 385,000 5.000 2020 405,000 5.000 2021 425,000 5.000 2022 445,000 5.000 2023 470,000 5.000 2024 490,000 5.000 2025 515,000 5.000 All other facts pertaining to the Series 2015B Bonds are set forth in detail in the Bond Resolution. 6. The Series 2015 Bonds were duly authorized pursuant to the Constitution of the State of Georgia, the Revenue Bond Law, the Act and a Master Bond Resolution adopted by the Commission and by the Augusta Aviation Commission on September 1, 2015 (the "Bond Resolution "). A certified copy of the Bond Resolution is attached to and made a part of the notice personally served on your District Attorney, which notice with acknowledgment of service is attached hereto as Exhibit A and by this reference thereto is incorporated in this petition and paragraph. 4 7. The Consolidated Government and the Augusta Aviation Commission have determined that it is in the best interest of its citizenry to provide for the current refunding of the outstanding Series 2005 Bonds, as hereafter described. A After a thorough and detailed review and upon the recommendation from Public Financial Management, Inc. (the "Financial Advisor', the Consolidated Government and the Augusta Aviation Commission have determined that due to present market conditions and in order to achieve a debt service savings on the Consolidated Government's now outstanding bonded indebtedness, the Consolidated Government at this time should refund the Series 2005A Bonds currently outstanding in the aggregate principal amount of $8,990,000 and the Series 2005C Bonds currently outstanding in the aggregate principal amount of $6,050,000 (collectively, the "Refunded Bonds"). 9. The Financial Advisor has further recommended, and the Consolidated Government and the Augusta Aviation Commission concurred, that such refunding of the Refunded Bonds should be accomplished by making due and legal provision for the redemption of the Refunded Bonds on October 2, 2015, 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. In the Bond Resolution, the Consolidated Government has taken all necessary and proper steps to provide for the refunding of the Refunded Bonds by redemption and payment, all as is more fully set forth in detail in the Bond Resolution. 5 10. The proceeds of the Series 2015A Bonds, together with other available moneys, will be used for the purposes of (a) refunding the outstanding Series 2005A Bonds and (b) paying the costs of issuance of the Series 2015A Bonds. The proceeds of the Series 2015B Bonds, together with other available moneys, will be used for the purposes of (a) refunding the outstanding Series 2005C Bonds and (b) paying the costs of issuance of the Series 2015B Bonds. 11. Simultaneously with the issuance and delivery of the Series 2015 Bonds, the sum of $15,280,930.53 (or such other amount as shall be necessary) derived from the sale of the Series 2015 Bonds, together with other available moneys, will be deposited in trust into a segregated account designated as the "2005 Defeasance Account" with U.S. Bank National Association, as successor bond registrar and paying agent for the Refunded Bonds (the "2005 Paying Agent) in an amount sufficient without investment to pay the principal of and interest on the Refunded Bonds as aforesaid and will be used for that purpose, all as provided in the Bond Resolution. The amounts so deposited with the 2005 Paying Agent shall be subject to a lien and charge in favor of the owners of the Refunded Bonds and shall be held for the security of such owners until used and applied in accordance with the terms of the Bond Resolution. 12. Upon the recommendation of the Financial Advisor, with which recommendation the Consolidated Government and the Augusta Aviation Commission concurs, it has been determined that the Consolidated Government should make due and legal provision to fund a reasonably required debt service reserve for each series of the Series 2015 Bonds. The debt service reserve requirement for each series of the Series 2015 Bonds shall be satisfied with moneys currently on deposit in the debt service reserve fund for the Series 2005 Bonds. 0 13. The Commission has received and accepted the offer of Raymond James & Associates, Inc. (the "Underwriter ") to purchase (a) the Series 2015A Bonds at a purchase price of $7,203,041.64, which is equal to par less Underwriter's discount of $58,188.16, and plus original issue premium of $586,229.80, with no accrued interest, (b) and the Series 2015B Bonds at a purchase price of $4,179,033.43 which is equal to par less Underwriter's discount of $33,561.72, and plus original issue premium of $362,595.15, with no accrued interest, and the sale of the Series 2015 Bonds at such prices will provide the Consolidated Government with sufficient funds to finance the cost of the overall undertaking now contemplated by the Consolidated Government as set forth in the Bond Resolution. 14. The Consolidated Government anticipates the need for additional money in the future to make further additions, extensions and improvements to the Airport and accordingly provision was made in the Bond Resolution for the issuance from time to time of additional bonds ranking as to lien on the Net General Revenues (as defined in the Bond Resolution) of the Airport on a parity with the Series 2015 Bonds now proposed to be issued under the terms and conditions as set forth in the Bond Resolution. 15. The Consolidated Government has covenanted in the Bond Resolution to 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: W (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: (i) 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; (ii) 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 (iii) will remedy all deficiencies in required payments from the Revenue Fund from prior Fiscal Years; and provided that the preceding rate covenant shall not be construed as requiring the Airport to impose passenger facility charges in excess of amounts permitted pursuant to the PFC Act. All capitalized terms used in this paragraph have the meanings set forth in the Bond Resolution. 16. The Series 2015A Bonds, when issued, shall be payable from and secured by a senior lien on both the Net General Revenues of the Airport and Pledged PFC Revenues of the Airport on deposit in the Pledged PFC Series 2015 Account (as such terms are defined in the Bond Resolution). The Series 2015B Bonds, when issued, shall be payable from and secured by a senior lien on the Net General Revenues of the Airport. The Series 2015A Bonds and the Series 2015E Bonds shall be secured on a parity with each other as to the lien on the Net General 8 Revenues of the Airport, and shall constitute General Revenue Bonds (as defined in the Bond Resolution). The issuance of the Series 2015 Bonds and the security therefor is sound, reasonable, feasible and self - liquidating. 17. The Consolidated Government has met the applicable terms and conditions of the Bond Resolution pertaining to the issuance of the Series 2015 Bonds. 18. The Series 2015 Bonds proposed to be issued will not constitute a debt of the State of Georgia or the Consolidated Government nor a pledge of the faith and credit of said State or Consolidated Government, nor shall the State or Consolidated Government be subject to any pecuniary liability thereon. The Series 2015 Bonds shall not be payable from, nor be a charge upon, any funds other than the revenues pledged therefor pursuant to the Bond Resolution. No owner of the Series 2015 Bonds shall ever have the right to enforce payment thereof against any other property of the State of Georgia or the Consolidated Government, nor shall the Series 2015 Bonds constitute a charge, lien or encumbrance, legal or equitable, upon any other property of the Consolidated Government other than the revenues pledged to the payment thereof under the Bond Resolution. The issuance of the Series 2015 Bonds shall not directly, indirectly or contingently obligate the State or the Consolidated Government to levy or to pledge any form of taxation whatever therefor or to make any appropriation for their payment. 19. The Consolidated Government, pursuant to the laws of the State of Georgia, particularly O.C.G.A. Section 36 -82 -100 (the "Audit Statute'), has elected to waive the independent performance audit or performance review requirement (the "Independent Audit ") with respect to the Series 2015 Bonds. However, the Consolidated Government will ensure that 6 Series 2015 Bond proceeds are expended efficiently and economically as intended by the Audit Statute. 20. The defendant, Consolidated Government, has taken all necessary and proper steps to authorize the issuance of the Series 2015 Bonds and said defendant through its Commission desires to issue the Series 2015 Bonds, as aforesaid, and desires that same may be validated and confirmed according to law, and to this end did notify the District Attorney of the Augusta Judicial Circuit in writing to that effect, all as set forth in Paragraph 6 above. 21. The District Attorney of the Augusta Judicial Circuit, pursuant to the laws of the State of Georgia, in particular Code Section 9 -11 -52 of the Official Code of Georgia Annotated, waives, in the name of the State of Georgia, the requirement that separate findings of fact and conclusions of law be entered in this action. WHEREFORE within 20 days from the date of service of notice, your District Attorney, pursuant to the laws of the State of Georgia, files this petition in the name of the State of Georgia, against the Consolidated Government and prays: (a) That an order be issued requiring the Consolidated Government by its proper officers to show cause, if any exist, at such time and place, in open court, within 20 days from the filing of this petition why the Series 2015 Bonds as described in this petition should not be confirmed and validated, as well as why the Court should not pass upon all questions of law and fact pertaining to the right of the Consolidated Government to issue the Series 2015 Bonds and any additional parity bonds therewith, adopt the Bond Resolution and to pledge the revenues of the Airport as security for the payment of the Series 2015 Bonds in the manner before described. IN (b) That this Court adjudicate that the notice of validation containing the waiver provisions set forth in the Audit Statute is sufficient to exempt the Consolidated Government from the Independent Audit. (c) That an order be passed requiring the Consolidated Government, by its proper officers, to show cause, if any exist, why the Bond Resolution should not in all respects be adjudicated as being constitutional, legal, valid and binding in accordance with its terms. (d) That the Series 2015 Bonds and the security therefor be confirmed and validated and held to be constitutional in all respects. (e) That this petition and such order as shall be passed be served upon the defendant Augusta, Georgia in the manner provided by law. (f) That that this Court make such other adjudications with respect to the Series 2015 Bonds and the security therefor (including the Bond Resolution) as may be proper or necessary in connection with the matters before it and that the Series 2015 Bonds be validated and confirmed in all respects. r 'zdA� W , District Attorney, &igusta 3 ci Circuit 11 GEORGIA, RICHMOND COUNTY C^ a �^ TO THE HONORABLE ASHLEY WRIGHT,�; DISTRICT ATTORNEY OF THE AUGUSTA JUDICIAL CIRCUIT YOU ARE HEREBY NOTIFIED that under and by virtue of the q#610on of = ' the State of Georgia, the Revenue Bond Law (Title 36, Chapter 82, Article 3 of the Of6ciaaTCode of Georgia Annotated, as amended) and an Act of the General Assembly of the State of Georgia (Georgia Laws 1995, p. 3648 et seq., as amended), granting to the consolidated government of Augusta, Georgia (the "Consolidated Government ") the authority to issue interest bearing revenue bonds for the purpose of providing funds, together with other available moneys, to finance (a) the refunding of (i) all of the outstanding Augusta, Georgia Airport Passenger Facility Charge and General Revenue Bonds, Series 2005A (Non -AMT) (the "Series 2005A Bonds") currently outstanding in the aggregate principal amount of $8,990,000, and (ii) all of the outstanding Augusta, Georgia Airport General Revenue Bonds, Series 2005C (AMI) currently outstanding in the aggregate principal amount of $6,050,000 (the "Series 2005C Bonds" and, together with the Series 2005A Bonds, the "Series 2005 Bonds ") and (b) paying all of the expenses necessary to accomplish the foregoing, the Augusta - Richmond County Commission (the "Commission "), in a meeting duly assembled, did on September 1, 2015, adopt a Master Bond Resolution (the "Bond Resolution "} authorizing the issuance of Augusta, Georgia Airport General Revenue Refunding Bonds, Series 2015A (Non -AMT) in an aggregate principal amount of $6,675,000 (the "Series 2015A Bonds ") and Augusta, Georgia Airport General Revenue Refunding Bonds, Series 2015E (AMT) in an aggregate principal amount of $3,850,000 (the "Series 2015B Bonds," and together with the Series 2015A Bonds, the "Series 2015 Bonds "), the date, denominations, rates of interest, maturity dates and all other pertinent facts pertaining to the Series 2015 Bonds being shown in detail in the Bond Resolution, a certified copy of which being attached hereto and made a part hereof. YOU ARE FURTHER NOTIFIED that the Consolidated Government has waived the performance and audit review requirements provided in O.C.G.A. § 36 -82 -100 and will conduct no performance audit or performance review with respect to the Series 2015 Bonds. YOU ARE FURTHER NOTIFIED of the action of the Commission in accordance with the law pertaining to the validation and confirmation of the proposed issues of Series 2015 Bonds, and request is hereby made that you take immediate and proper steps for the confirmation and validation of the Series 2015 Bonds, of the issuance of the Series 2015 Bonds as provided in the Bond Resolution, and of all matters relating to the security for the payment of the Series 2015 Bonds, all as provided by law. This September 144. 2015. AUGUSTA, GEORGIA (SEAL) Attest: By: --I-� Mayor, Hat 40�� ; -z Jim a , 1 4 prolic 1 Commission 2 Exhibit A ADOPTED SEPTEMBER 1, 2015 BY THE AUGUSTA-RICHMOND COUNTY COMMISSION ADOPTED SEPTEMBER 1, 2015 BY THE AUGUSTA AVIATION COMMISSION AIRPORT REVENUE BONDS TABLE OF CONTENTS ARTICLE I DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION.6 Section101 Definitions ................................................................................ ..............................6 Section 102 Construction Of Certain Terms ............................................... .............................22 Section 103 Table of Contents; Titles and Headings .................................. .............................23 ARTICLEII THE BONDS ............................................................................... .............................24 Section 201 Authorization; Designation of Bonds ..................................... .............................24 Section202 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 32 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 Section209 Blank Bonds ............................................................................ .............................30 ARTICLE III REDEMPTION OF BONDS ................................................... .............................31 Section 301 Optional Redemption .............................................................. .............................31 Section302 [ Reserved] ............................................................................... .............................31 Section 303 Notice of Redemption ............................................................. .............................31 Section 304 Consolidated Government or Bond Registrar May Give Notice of Section 404 Redemption........................................................................... ............................... 32 Section 305 Effect of Notice of Redemption .............................................. .............................32 Section 306 Conditional Redemptions ........................................................ .............................33 Section 307 Redemption Among Series ..................................................... .............................33 Section 308 Selection of Bonds to be Redeemed ....................................... .............................33 Section 309 Purchase in Open Market . .................................................................................... 33 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 ............................. .............................45 Section 406 Subordinate Securities Fund ................................................... .............................45 Section407 [ 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 Section 412 Valuation of Investments ........................................................ .............................46 Section 413 Application of Excess in Debt Service Fund .......................... .............................47 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; Section 605 Other Airport Obligations; and PFC Stand -Alone Revenue Bonds .....................52 59 Section 505 Released Revenues; Securitizations ........................................ .............................53 59 Section 506 Special Purpose Facilities ....................................................... .............................53 Section 507 Accession of Subordinate Lien Bonds and Related Contracts to Senior Section 609 LienStatus ............................................................................... .............................53 60 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 Section601 Rate Covenant ......................................................................... .............................56 Section 602 Maintenance of the Airport in Good Condition ...................... .............................57 Section603 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 Section608 Payments ................................................................................. .............................60 Section 609 No Loss of Lien on Revenues ............................................... ............................... 60 Section610 Annual Budget ........................................................................ .............................60 Section 611 Rebate Fund and Tax Provisions ............................................ .............................60 Section 612 Uneconomic Facil ities ............................................................. .............................62 ARTICLE VII EVENTS OF DEFAULT AND REMEDIES ........................ .............................63 Section 701 Definition of Events of Default ............................................. ............................... 63 Section702 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 ii ARTICLE VIII BOND OWNERSHHP ............................................................ .............................70 Section 801 Manner of Evidencing Ownership of Bonds ........................... .............................70 Section 802 Call of Meetings of Bondholders ............................................ .............................70 ARTICLE IX DEFEASANCE ......................................................................... .............................71 Section901 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 Section1305 Validation ................................................................................ .............................82 Section 1306 Approval of Series 2015 Paying Agent and Bond Registrar Agreement .............82 Section 1307 Approval of Series 2015 Custodian Agreement ..................... .............................83 Section 1308 Waiver of Bond Audit ............................................................. .............................83 Section1309 Sevembility ............................................................................. .............................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 iii 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 Iv 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 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 fiuther 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 $6,675,000 and "Augusta, Georgia Airport General Revenue Refunding Bonds, Series 2015B (AMT) in an aggregate principal amount of $3,850,000 (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 17efeasanee 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 2 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 25, 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; 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; 4 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: 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. M "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 6 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. "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. 9 "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. "Coats," 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 Facdity" shall not include a Reserve Account Credit Facility. 10 "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 tern "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 Buffer 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. (e) 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 11 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, 12 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 13 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 14 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 Droll 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. 15 " 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(bx10). "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" 16 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. U.S. Bank National Association is hereby designated as Paying Agent for the Series 2015 Bonds. "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 17 any of the accounts or subaccounts created herein or in any Supplemental Resolution resulting 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 this Master Bond Resolution for the Series 2015 Bonds or in the Supplemental Bond Resolution for such other 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. 18 "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 19 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 `blearing 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 2015E Bonds. FE "Series 2015A Bonds" means the Augusta, Georgia Airport General Revenue Refunding Bonds, Series 2015A (Non -AMT) in the aggregate principal amount of $6,675,000, 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 $3,850,000, 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. 21 "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 N. "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 Defeaaance 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: 22 (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 tenors 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 Headinas. 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. 23 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 $6,675,000 and the "Augusta, Georgia Airport General Revenue Refunding Bonds, Series 2015B (AMT)" in the original aggregate principal amount of $3,850,000. 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 2015E Bonds will be used for the purpose of (a) refunding the outstanding Series 2005C Bonds and (b) paying the costs of issuing the Series 2015E 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 24 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 1 st day of January in the years and amounts set forth below: Year Principal Amount Interest Rate 2026 $530,000 5.000% 2027 560,000 5.000 2028 585,000 5.000 2024 615,000 5.000 2030 645,000 5.000 2031 675,000 5.000 2032 710,000 5.000 2033 745,000 5.000 2034 785,000 5.000 2035 825,000 5.000 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- l 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 1 st day of January in the years and amounts set forth below: RE Year Principal Amount Interest Rate 2017 $350,000 5.000% 2018 365,000 5.000 2019 385,000 5.000 2020 405,000 5.000 2021 425,000 5.000 2022 445,000 5.000 2023 470,000 5.000 2024 490,000 5.000 2025 515,000 5.000 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 15 th 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 Govemment 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 Govemment shall be 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 9.1 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 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 27 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 fast 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 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. 28 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; (ii) giving notices of redemption and other matters with respect to the Series F (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. 30 ARTICLE III lti *13 DI&I 1I to) as A :T#NI O Section 301 Optional Redemption. The Series 2015B Bonds are not subject to optional redemption prior to their respective maturities. The Series 2015A Bonds may be redeemed at the option of the Consolidated Goverment in whole or in part at any time in any year not earlier than January 1, 2025, 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 the Series 2015A Bonds shall be made by the payment of the principal amount of the Series 2015A Bonds to be redeemed and accrued interest thereon to date of redemption, at par without a premium. If the Series 2015A Bonds are 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 [Rese rved]. 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, postage prepaid, 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; K (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 (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 Redstrar 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 32 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 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 30$ 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 33 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 34 I 4" 31 VA 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. 35 (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 36 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(bx10)) 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 Subaecounts. Pursuant to the Prior Resolution, the Augusta Aviation Commission established finds 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 Regions Bank, Augusta, Georgia, 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 Regions Bank, Augusta, Georgia, 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 such additional Pledged PFC Series Accounts as may be created and established in a Supplemental Bond Resolution. 37 (c) Augusta, Georgia Airport Operation and Maintenance Fund to be held by Regions Bank, Augusta, Georgia, as Depository, for the account of the Augusta Aviation Commission. (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. 0) Augusta, Georgia Airport Subordinate Securities Fund to be held by Regions Bank, Augusta, Georgia, as Depository, for the account of the Augusta Aviation Commission. (k) Augusta, Georgia Airport Capital Improvement Fund to be held by Regions Bank, Augusta, Georgia, as Depository, for the account of the Augusta Aviation Commission, and within the Capital Improvement Fund: 38 (i) Capital Improvement Account. (ii) Revenue Credit Account. (1) Augusta, Georgia Airport PFC Capital Fund to be held by Regions Bank, Augusta, Georgia, 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 39 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, 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, EN then from the Released Revenue Account; and (C) otherwise, from the General Revenue Account; (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(bx10) 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 15 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 41 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 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, 42 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 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 43 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 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 subaceounts 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. 44 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 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 51 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. 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. FR Section 413 Aonlication 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 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 Disnosition 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(e) 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. 47 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: either: (1) There shall have been procured and filed with the Consolidated Government (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 48 (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 aver 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. M (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) 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. MI (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 51 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(bXl) through (5) are satisfied treating such obligations as Subordinate Lien Bonds and the issuance and security documents therefor as Supplemental Bond Resolutions. Section 544 Special Purpose Revenue Bonds; Additional Released Revenue Bonds; Other Airport ObIkations: 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(bXl) 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. 52 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 Puraose 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(bx10), 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 53 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), (6) and (7) 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 Account, the Principal Account and the Contract Payments Account 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 alien 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 terns, 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 Anthorizing 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. 54 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 Oblizations. 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." W, • C(i3) zlA 7xq T&WA &.I [ON &I 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 I 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(e) 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 56 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. 57 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 DC 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 58 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 MAU. 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 Chames 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. 59 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. rr1 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. 61 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. 62 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 Lien Bonds under any Liquidity Facility then in effect; 63 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 :, 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 (S) 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. RR 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 Amlication 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 66 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 DQ, 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. G1►� 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. K -1 Section 706 Riahts 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. .t 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. W 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 Pledee. 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. 71 ARTICLE X SUPPLEMENTAL RESOLUTIONS Section 1001 Supnlemental Resolutions Not Reanirinp. Co of Bo 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; 72 (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; 0) 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; (1) 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. VA 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 Reauirin¢ 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. 74 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. 75 SALE OF BONDS Section 1101 AmUcation of Funds. (a) The Consolidated Government shall apply the net proceeds (i.e., equal to the par amount of the Series 2015A Bonds plus $586,229.80 of original issue premium and less the Underwriter's discount of $58,188.16) from the sale of the Series 2015A Bonds, together with $1,665,951.51 on deposit in the PFC Balloon Bonds Reserve Account allocable to the Refunded 2005A Bonds, $1,059,501.48 on deposit in the 2005AJB Subaccount of the PFC Debt Service Reserve Account allocable to the Refunded 2005A Bonds and $105,460.34 on deposit in the Series 2005AB 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) $9,107,032.32 shall be transferred to the 2005 Paying Agent for deposit in the 2005 Defeasance Account and applied to refund the Refunded 2005A Bonds; (ii) $667,500.00 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., equal to the par amount of the Series 2015E Bonds of $3,850,000 plus $362,595.15 of original issue premium and less the Underwriter's discount of $33,561.72) from the sale of the Series 2015B Bonds, together with an equity contribution by the Airport of $230,715 and $1,500,712.62 on deposit in the Balloon Bonds Reserve Account, $710,448.37 on deposit in the Series 2005C Subaccount of the Debt Service Reserve Account and $89,038.43 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) $6,173,898.21 shall be transferred to the 2005 Paying Agent for deposit in the 2005 Defeasance Account and applied to refund the Refunded 2005E Bonds; (ii) $385,000.00 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 2015E Bonds. (c) All amounts remaining in the PFC Balloon Bonds Reserve Account and the Series 2005AB Subaccount of the Interest Account and the Principal Account of the PFC Debt Service Fund 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 76 Reserve Account after the transfers authorized in Section 1101(a) shall be deposited to the Capital Improvement Account of the Capital Improvement Fund. Upon the issuance of the Series 2015 Bonds, all amounts held under the Prior Resolution in the Augusta, Georgia Airport Renewal and Replacement Fund shall be deposited to the Capital Improvement Account of the Capital Improvement Fund. 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 aid all interest due thereon to October 2, 2015. Section 1103 Direction to Paving 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: 77 Princi 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. 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. 78 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 MI. 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 79 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 Remainins 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 Pro ject 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. 80 ARTICLE XIII NUSCELLANEOUS 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 terns. 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 81 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 Goverment 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 Hearin¢. 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 Anoroval of Series 2015 Paving 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. 82 Section 1307 Approval of Series 2015 Custodian 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. 83 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 Pavments 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 Reveal 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. 84 1, 2015. 1% j \.�Zdms AUGUSTA, GEORGIA 0 1 Adopted this September 1, 2015. AUGUSTA AVIATION COMAUSSION (SEAL) Chairmw Attest: Secretary 85 [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, FLEDGE 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) S DATE: INTEREST RATE: MATURITY DATE: CUSIP: of 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 201 SA 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 -1 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 gender 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 $6,675,000 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 funds to A -2 (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 $3,850,000 aggregate principal amount of its Airport General Revenue Refunding Bonds, Series 2015E (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 2015E 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 -3 (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 rLl 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, 2025. The Series 2015A Bonds 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, 2025, 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. 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 M 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. 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 -6 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 -7 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 -8 VALIDATION CERTIFICATE STATE OF GEORGIA 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 -9 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 1 7Ad -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. A -10 MW: [FORM OF SERIES 2015B BONDS] Unless this Bond is presented by an authorized representative of The Depository Trust Company, a New York corporation ( "D7'C'), 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) S 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 I 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. E 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 2015E 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 2015E 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 $3,850,000 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 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 $6,675,000 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 M 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 2015E 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 2015E 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 2015E Bond is registered on the registration books kept by the Bond Registrar shall be deemed to be the owner of this Series 20158 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 2015E 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 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 2015E 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 are not subject to optional redemption prior to their respective maturities. 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 2015E Bond shall be entitled to the remedies provided by the Bond Resolution and the Revenue Bond Law. 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. IM 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 AUGUSTA, GEORGIA (SEAL) By: Mayor By: Chairman, Augusta Aviation Commission Attest: Clerk CERTIFICATE OF AUTHENTICATION Date of Authentication: This bond is one of the Series 2015E Bonds described herein. U.S. BANK NATIONAL ASSOCIATION, as Bond Registrar By: Authorized Signatory ME 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) I AM 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. 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. Maturity Date CUSIP Number Januar r l 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: If by Herod or Overnight U. S. Bank hki Corporate Trust Services U. S. Bank P.O. Box 64111 Corporate Trust Services St. Paul, MN 55164 -0111 60 Livingston Ave 1 st 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 -1 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.usbauLcom/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 C -2 EXHIBIT D FORM OF REDEMPTION NOTICE FOR SERIES 2005C 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: If by Hand or Overniaht U. S. Bank ail: Corporate Trust Services U. S. Bank P. O. Box 64111 Corporate Trust Services St. Paul, MN 55164- 0111 60 Livingston Ave 0 FI — 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 Im 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 not 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/covomtetrust 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 W 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 $6,675,000 Augusta, Georgia Airport General Revenue Refunding Bonds, Series 2015A (Non-AMT) and of $3,850,000 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 I Nay C, Abstain 0 11ty-ilml - anq the official seal of Augusta, Georgia this September 1, 2015 IC tA .44(), ' I t Y W elerk V e, 01 • It 41 i Vii. R 1► MCI 1' _ • : • �� • i 1 • • • STATE OF GEORGIA STATE OF GEORGIA, ) Plaintiff, ) VS. } AUGUSTA, GEORGIA, ) } Defendant. } CIVIL ACTION FILE NO. 9 tS" (2{ V oogS The foregoing petition having been presented and read, and it is hereby sanctioned and ordered filed. IT IS FURTHER ORDERED that a copy of this petition and order be served upon the defendant Augusta, Georgia forthwith. IT IS FURTHER ORDERED that the defendant, by its proper officers, show cause, if any exist, before the Judge of the Superior Court of Richmond County, in the Augusta Richmond County Judicial Center, 735 James Brown Blvd., Courtroom Number � F Augusta, Georgia 30901, at _ 151 m., on September,A 2015, why the prayers of the petition should not be granted, and why the Augusta, Georgia Airport General Revenue Refunding Bonds, Series 2015A (Non -AMT) and Augusta, Georgia Airport General Revenue Refimding Bonds, Series 2015B ( AMT), described in said petition should not be validated and confirmed as provided by law. IT IS FURTHER ORDERED that the Clerk of the Superior Court of Richmond County, Georgia, publish in the official newspaper in said County in which Sheriff's BOND VALIDATION a x �, rCJ rr C].. The foregoing petition having been presented and read, and it is hereby sanctioned and ordered filed. IT IS FURTHER ORDERED that a copy of this petition and order be served upon the defendant Augusta, Georgia forthwith. IT IS FURTHER ORDERED that the defendant, by its proper officers, show cause, if any exist, before the Judge of the Superior Court of Richmond County, in the Augusta Richmond County Judicial Center, 735 James Brown Blvd., Courtroom Number � F Augusta, Georgia 30901, at _ 151 m., on September,A 2015, why the prayers of the petition should not be granted, and why the Augusta, Georgia Airport General Revenue Refunding Bonds, Series 2015A (Non -AMT) and Augusta, Georgia Airport General Revenue Refimding Bonds, Series 2015B ( AMT), described in said petition should not be validated and confirmed as provided by law. IT IS FURTHER ORDERED that the Clerk of the Superior Court of Richmond County, Georgia, publish in the official newspaper in said County in which Sheriff's advertisements appear, once during each of the two successive weeks immediately preceding the week in which the hearing is to be held, a notice to the public that on the date herein specified for the hearing on this cause, that the same will be heard. This September 1e, 2015. Judge, S rior dourt Richmond County, Georgia 2 NOTICE TO PUBLIC p r r YOU ARE HEREBY NOTIFIED that there will be heard before *ri Court of Richmond County, Georgia, in the Augusta Richmond County Jual t�nte 735 James Brown Blvd., Augusta, Georgia 30901, Courtroom Number 7F , at FSc ,., o w "r f'T September 80 2015, the case of State of Georgia vs. Augusta, Georgia, Civil=Actf& File Numbem - W %Y btu y I pending in said Court, the same being a proceeding to confirm and validate an issue of Augusta, Georgia Airport General Revenue Refunding Bonds, Series 2015A (Non -AMT) in an aggregate principal amount of $6,675,000 (the "Series 2015A Bonds'] and an issue of Augusta, Georgia Airport General Revenue Refunding Bonds, Series 2015B (AMT) in an aggregate principal amount of $3,850,000 (the "Series 2015B Bonds," and together with the Series 2015A Bonds, the "Series 2015 Bonds ") to be issued by Augusta, Georgia for the purpose of providing funds to finance, together with other available funds, (a) the refunding of all of the outstanding Augusta, Georgia Airport Passenger Facility Charge and General Revenue Bonds, Series 2005A (Non -AMT) currently outstanding in the aggregate principal amount of $8,990,000, and all of the outstanding Augusta, Georgia Airport General Revenue Bonds, Series 2005C (AMT) currently outstanding in the aggregate principal amount of $6,050,000, and (b) paying all expenses necessary to accomplish the foregoing. Pursuant to O.C.G.A. Section 36-82 -100 (the "Audit Statute"), the Consolidated Government hereby notifies all interested parties that no independent performance audit or performance review will be conducted with respect to the Series 2015 Bonds. However, the Consolidated Government will ensure that Series 2015 Bond proceeds are expended efficiently and economically as intended by the Audit Statute. Any citizen of the State of Georgia residing in Augusta, Georgia, or any other person wherever residing who has a right to object, may intervene and become a party to these proceedings. This September 10, 2015. £rrk, Superior Court Richmond County, Georgia FA Wo 0 1' • zX011j • • ! kvj CORI • STATE OF GEORGIA STATE OF GEORGIA, ) Plaintiff, ) VS. ) AUGUSTA, GEORGIA, ) Defendant. ) L 2815 SEP 21 9: 43 CIVIL ACTION FILE NO. 2015 RCCV 00457 BOND VALIDATION ACKNOWLEDGMENT OF SERVICE BY AUGUSTA, GEORGIA Due and legal service of the Petition and Complaint for Validation of Revenue Bonds with exhibits and Order dated September 10, 2015 filed in this case is hereby acknowledged; copy received; process and any and all other notice and service waived this September L�, 2015. AUGUSTA, GEORGIA Jamer T. SHEPARD, PLUNKETT, HAMILTON & BOUDREAUX, LLP 429 Walker Street, Upper Level Augusta, GA 30901 706.722.4111 Attorney for Augusta, Georgia IN THE SUPERIOR COURT OF RICHMOND COUNW -- STATE OF GEORGIA 1015 SEa 21 Al 9: 43 iiiChP1 ` , STATE OF GEORGIA, ) Plaintiff, ) CIVIL ACTION FILE NO. 2015 RCCV 00457 VS. ) BOND VALIDATION AUGUSTA, GEORGIA, ) Defendant. ) ����;Z��aT;1il�lif'� 1►; . � ' Comes now AUGUSTA, GEORGIA, a political subdivision of the State of Georgia (the "Consolidated Government "), the defendant named in the above and foregoing matter and having been duly served in the above - stated cause, for answer to the petition and order served on it, says: up Defendant admits that, as a matter of fact and as a matter of law, the Superior Court of Richmond County has jurisdiction over the subject matter of this proceeding and the parties thereto. 2. Defendant admits each and every paragraph and each and every allegation contained in paragraphs 1 through 20 of the Petition and Complaint of the District Attorney of the Augusta Judicial Circuit (the "Petition ") filed against the defendant in this case. 3. Answering further, this defendant shows that due and legal service was made upon it of an Order to show cause, if any exist, before the Superior Court of Richmond County, why the Augusta, Georgia Airport General Revenue Refunding Bonds, Series 2015A (Non - AMT) in an aggregate principal amount of $6,675,000 (the "Series 2015A Bonds ") and the Augusta, Georgia Airport General Revenue Refunding Bonds, Series 2015E (AMT) in an aggregate principal amount of $3,850,000 (the "Series 2015B Bonds," and together with the Series 2015A Bonds, the "Series 2015 Bonds ") as described in the Petition should not be validated and confirmed. Following service of the Petition and the Order upon it, a notice to the public of the validation hearing was published as required by law in The Augusta Chronicle, which is the newspaper in which sheriffs advertisements are published for Richmond County, a copy of said notice and affidavit as to publication being attached hereto, made a part hereof and marked EXHIBIT A. 4. Defendant Consolidated Government further shows that it constitutes a county and a municipality under the laws and the Constitution of the State of Georgia, existing under and pursuant to Article IX, Section III, Paragraph II(a) of the Constitution of the State of Georgia and an act of the General Assembly of the State of Georgia (Georgia Laws 1995, p. 3648 et seq., as amended, the "Act "), and pursuant to referenda held within the former City of Augusta and Richmond County, and is a political subdivision of the State of Georgia in the exercise of the respective powers of a municipality and a county. 5. Answering further, this Defendant shows that the Series 2015 Bonds were duly authorized by a master bond resolution adopted by the Augusta - Richmond County Commission 01 (the "Commission ") and by the Augusta Aviation Commission on September 1, 2015 (the "Bond Resolution "). The facts, precise terms, conditions and particulars with respect to the sale, issuance and delivery of the Series 2015 Bonds, including redemption provisions, are set forth in the Bond Resolution. A certified copy of the Bond Resolution is attached to the Petition as a part of Exhibit A thereto and the Bond Resolution, by this reference thereto, is incorporated in this answer as if same were set forth verbatim herein. The Bond Resolution has in nowise been amended or repealed and is of full force and effect. 9 Defendant further shows that the Consolidated Government has full authority for the issuance and sale of the Series 2015 Bonds under the Constitution of the State of Georgia, the Revenue Bond Law (Title 36, Chapter 82, Article 3 of the Official Code of Georgia Annotated, as amended) and the Act. FA Answering further this defendant shows that after a thorough and detailed review and upon the recommendation from Public Financial Management, Inc., financial advisor to the Consolidated Government, the Consolidated Government and the Augusta Aviation Commission have determined that due to present market conditions and in order to achieve debt service savings on the Consolidated Government's now outstanding bonded indebtedness, the Consolidated Government at this time should refund the Augusta, Georgia Airport Passenger Facility Charge and General Revenue Bonds, Series 2005A (Non -AMT) currently outstanding in the aggregate principal amount of $8,990,000 (the "Series 2005A Bonds ") and the Augusta, Georgia Airport General Revenue Bonds, Series 20050 (AMT) currently outstanding in the aggregate principal amount of $6,090,000 (the "Series 2005C Bonds" and together with the Series 2005A Bonds, the "Refunded Bonds ") by making due and legal provision for the M redemption of the Refunded Bonds on October 2, 2015 by paying the principal amount thereof and the interest to accrue thereon until such date of redemption all as is more fiilly set forth in detail in the Bond Resolution. 8. This defendant further shows that it proposes to issue the Series 2015A Bonds for the purpose of providing funds, together with other available moneys, to (a) refund the outstanding Series 2005A Bonds and (b) paying the costs of issuance of the Series 2015A Bonds. This defendant further shows that it proposes to issue the Series 2015B Bonds for the purpose of providing funds, together with other available moneys, to (a) refund the Series 2005C Bonds and (b) paying the costs of issuance of the Series 2015B Bonds. All the terms and conditions set forth in the Bond Resolution for the issuance of the Series 2015 Bonds have been satisfied or will be satisfied prior to the issuance of the Series 2015 Bonds. a Answering further, this defendant shows that simultaneously with the issuance and delivery of the Series 2015 Bonds, the sum of $15,280,930.53 (or such other amount as shall be necessary) derived from the sale of the Series 2015 Bonds, together with other available moneys, will be deposited in trust into a segregated account designated as the "2005 Defeasance Account" with U.S. Bank National Association, as successor bond registrar and paying agent for the Refunded Bonds (the "2005 Paying Agent ") in an amount sufficient without investment to pay the principal of and interest on the Refunded Bonds as aforesaid and will be used for that purpose, all as provided in the Bond Resolution. The amounts so deposited with the 2005 Paying Agent shall be subject to a lien and charge in favor of the owners of the Refunded Bonds and 4 shall be held for the security of such owners until used and applied in accordance with the terms of the Bond Resolution. 10. The Consolidated Government has determined to issue the Series 2015A Bonds pursuant to the Bond Resolution, which Series 2015A Bonds when issued, shall be payable from and secured by a senior lien on both the Net General Revenues of the Airport and Pledged PFC Revenues of the Airport on deposit in the Pledged PFC Series 2015 Account (as such terms are defined in the Bond Resolution). The Consolidated Government has determined to issue the Series 2015B Bonds pursuant to the Bond Resolution, which Series 2015B Bonds when issued, shall be payable from and secured by a senior lien on the Net General Revenues of the Airport. The Series 2015A Bonds and the Series 2015B Bonds shall be secured on a parity with each other as to the lien on the Net General Revenues of the Airport, and shall constitute General Revenue Bonds (as defined in the Bond Resolution). 11. Defendant further shows that the Bond Resolution requires it to fund a reasonably required debt service reserve for the Series 2015 Bonds. The debt service reserve requirement for the Series 2015 Bonds shall be satisfied with moneys currently on deposit in the debt service reserve funds for the Refunded Bonds. 12. Defendant further shows that it anticipates the need for additional money in the future to make further additions, extensions and improvements to the Airport and accordingly provision was made in the Bond Resolution for the issuance from time to time of additional bonds ranking as to lien on the Net General Revenues of the Airport on a parity with the Series 5 2015 Bonds now proposed to be issued under the terns and conditions as set forth in the Bond Resolution. 13. Defendant Consolidated Government further shows that it has covenanted, acting by and through the Augusta Aviation Commission, to 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: (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: (i) 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; (ii) 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 (iii) will remedy all deficiencies in required payments from the Revenue Fund from prior Fiscal Years; and provided that the preceding rate covenant shall not be construed as requiring the Airport to impose passenger facility charges in excess of amounts permitted pursuant to the PFC Act. All capitalized terms used in this paragraph have the meanings set forth in the Bond Resolution. 14. Defendant further shows that it has pledged all or so much as may be necessary of (a) with respect to the Series 2015A Bonds, the Net General Revenues of the Airport and Pledged PFC Revenues of the Airport on deposit in the Pledged PFC Series 2015 Account, and (b) with respect to the Series 2015B Bonds, the Net General Revenues of the Airport, to secure payment by the Consolidated Government of the amounts agreed to be paid in the Bond Resolution with respect to the Series 2015 Bonds and any bonds hereafter issued on a parity therewith, which pledge constitutes a first lien on said revenues to the extent and in the manner as set forth in the Bond Resolution. 15. This Defendant further shows that the undertaking for which the Series 2015 Bonds is to be issued, the use of the proceeds of the Series 2015 Bonds, the issuance of the Series 2015 Bonds and the security therefor are sound, feasible and reasonable. 16. Answering further, this defendant shows that the Series 2015 Bonds proposed to be issued will not constitute a debt of the State of Georgia or the Consolidated Government nor a pledge of the faith and credit of said State or Consolidated Government, nor shall the State or Consolidated Government be subject to any pecuniary liability thereon. The Series 2015 Bonds shall not be payable from, nor be a charge upon, any funds other than the revenues pledged therefor pursuant to the Bond Resolution. No owner of the Series 2015 Bonds shall ever have the right to enforce payment thereof against any other property of the State of Georgia or the W Consolidated Government, nor shall the Series 2015 Bonds constitute a charge, lien or encumbrance, legal or equitable, upon any other property of the Consolidated Government other than the revenues pledged to the payment thereof under the Bond Resolution. The issuance of the Series 2015 Bonds shall not directly, indirectly or contingently obligate the State or the Consolidated Goverment to levy or to pledge any form of taxation whatever therefor or to make any appropriation for their payment. 17. Answering further, this defendant, pursuant to the laws of the State of Georgia, particularly O.C.G.A. Section 36 -82 -100 (the "Audit Statute "), has elected to waive the independent performance audit or performance review requirement with respect to the Series 2015 Bonds. However, the Consolidated Government will ensure that Series 2015 Bond proceeds are expended efficiently and economically as intended by the Audit Statute. 18. This defendant, pursuant to laws of the State of Georgia, in particular Section 9 -11 -52 of the Official Code of Georgia Annotated, waives the requirement that separate findings of fact and conclusions of law be entered in this action. 19. Defendant submits that it has in every way complied with the Constitution and laws of the State of Georgia governing the issuance of the Series 2015 Bonds and the security _t WHEREFORE, having fully answered, Augusta, Georgia prays judgment of this Honorable Court in favor of the issuance of the Series 2015 Bonds, finding that all necessary requirements as a matter of fact and as a matter of law have been met and that the defendant has the right to and has made proper, legal provision to issue the Series 2015 Bonds for the purpose 8 of refunding the Refunded Bonds and paying the costs of issuing the Series 2015 Bonds and that the revenues pledged as security for the Series 2015 Bonds in the manner before described have been validly pledged as security for the payment of the Series 2015 Bonds and any additional parity bonds therewith hereafter issued pursuant to the Bond Resolution, that such pledge shall have a first lien on such revenues pledged as security for the Series 2015 Bonds and that an order be passed approving the actions of the defendant in the premises and validating and confirming the Series 2015 Bonds as provided by law. J s T 11lyd<etK " H (gWa State Bar 582284) SHEPARD, PLUNKETT, HAMILTON & BOUDREAUX, LLP 429 Walker Street, Upper Level Augusta, GA 30901 706.722.4111 Attorney for Augusta, Georgia E EXHIBIT A AFFIDAVIT OF PUBLICATION ATTORNEY SHEPARD PLUNKETI' HAMILTON & BOUDREAUX 7013 EVANS TOWN CENTER BLVD SUITE 303 EVANS, GA 30809 ACCOUNT NUMBER: 1000166707 AD NUMBER: 16721301 * STATE OF GEORGIA Personally appeared before me, Martha Anne Tudor Schwartz to me known, who being sworn, deposes and says: That he/she is the authorized agent of Southeastern Newspapers Company, LLC, a Georgia Limited Liability Company, doing business in said County under the trade name Augusta Chronicle a newspaper in said County; That he /she is authorized to make affidavits of publication on behalf of said publisher company Augusta Chronicle; that said newspaper is of general circulation in said county and in the area adjacent thereto; that he/she has reviewed the regular editions of said newspapers published on: 09/12/2015 and finds that the following in each of said editions, to -wit: (deponent) Sworn to and subscribed befo e t This n 4y, day of ` S i 2015 Notary Public Richmond County, Georgia. unh. * 2M 'k c r•�ia�� pending 19 41 edd cart, lM qma Wkp a proowW kW to oo�h+n and vaYdab an tatua or to be of the r - - - _i__x__I x 1 72 In of anOe Nd perferlllall0e 1= 1 CondllCted wtth rNpect t0 the 2016 Bonds. tlowever,lM Con- ted Government will ensure that a 2016 Bond proceeds are ded need lir an ac ti n . ng In o Ieally r the State of Georgia ng In Aupuah, Georgia, or any hereon whelevw 77. 1 ldp wtlo hY t to object matrvene and lea P�rIY !��tiwi ProosedMgt clerk. Sup e r i o r c Septarlt6er 12,1?3 & Ad /16721301 AMY HOWARD MOORE - "� "'�:• i • .._ Notary Public, Georgia Richmond •u•uc; - s,�•.,,,•���,� County My Commission Expires i - 44G�G�a nuts February 16, 2 unh. * 2M 'k c r•�ia�� pending 19 41 edd cart, lM qma Wkp a proowW kW to oo�h+n and vaYdab an tatua or to be of the r - - - _i__x__I x 1 72 In of anOe Nd perferlllall0e 1= 1 CondllCted wtth rNpect t0 the 2016 Bonds. tlowever,lM Con- ted Government will ensure that a 2016 Bond proceeds are ded need lir an ac ti n . ng In o Ieally r the State of Georgia ng In Aupuah, Georgia, or any hereon whelevw 77. 1 ldp wtlo hY t to object matrvene and lea P�rIY !��tiwi ProosedMgt clerk. Sup e r i o r c Septarlt6er 12,1?3 & Ad /16721301 EXHIBIT A AFFIDAVIT OF PUBLICATION ATTORNEY SHEPARD PLUNKETT HAMILTON B OR AGENCY: STE 303 7013 EVANS TOWN CENTER BLVD EVANS GA 30809 BUSINESS: ACCOUNT NUMBER: 1000166707 AD NUMBER: B16721308 PO NUMBER: STATE OF GEORGIA COUNTY OF RICHMOND Personally appeared before me, Martha Anne Tudor Schwartz, to me known, who being sworn, deposes and says: That He /She is the authorized agent of Southeastern Newspapers Company, LLC, a Georgia Limited Liability Company, doing business in said County under the trade name of Richmond County Neighbors, a newspaper in said County; That He/She is authorized to make affidavits of publication on behalf of said publisher company: Richmond County Neighbors ; That said newspaper is of general circulation in said County and in the area adjacent thereto; That He /She has reviewed the regular editions of said newspapers published on: 09/17/2016 and finds that the following advertiem t aapea in each of said editions, to -wit: 1 Sworn to a subscribed before me , - ,,) .}_ This day of '� klxn DO, J R.� r; H > Notary Public Richmond County, Georgia {deponent} AMY HOWARD MOOR- ' „ou•`7�e Notary ublic. Geor s y i 9 ��. s �•....;.,,• Richmond County My Commission Expires FebrUOry 16. 2019 {deponent} VERIFICATION STATE OF GEORGIA COUNTY OF RICHMOND Before the undersigned attesting officer personally appeared Hardie Davis, Jr., Mayor, and Lena J. Bonner, Clerk, who on oath depose and say that they are the duly elected or appointed, qualified and acting Mayor and Clerk of the Augusta - Richmond County Commission and that they have read the above and foregoing answer, and that the facts contained therein are true and correct. AUGUSTA. GEORGIA /j Bv: Mayor, Augusta Richmon o v Commission ma W I - V ~; r `Q �s.. Commission ACKNOWLEDGMENT OF DISTRICT ATTORNEY STATE OF GEORGIA Due and legal service of the within and foregoing Answer of Augusta, Georgia is hereby acknowledged; copies received; and all other and further notice of service is hereby waived. This V day of September, 2415. � zjjv47 1 f1 is Distnc A rney ;,4t ♦ Auguskrfudicial District A CA f W. -s� ,64's, —37: IN THE SUPERIOR COURT OF RICHMOND COUNTY I « : a:, `t CC:; STATE OF GEORGIA 1015 SEP 21 AN 9: 43 MOW 66'." : irY.uA. STATE OF GEORGIA, ) Plaintiff, ) CIVIL ACTION FILE NO. 2015 RCCV 00457 VS. ) BOND VALIDATION AUGUSTA, GEORGIA, ) Defendant. ) ORDER AND FINAL JUDGMENT The above entitled cause coming on for a hearing in its regular order pursuant to order heretofore granted, and it appearing from an examination and inspection of the proceedings concerning the Augusta, Georgia Airport General Revenue Refunding Bonds, Series 2015A (Non -AMT) in an aggregate principal amount of $6,675,000 (the "Series 2015A Bonds ") and the Augusta, Georgia Airport General Revenue Refunding Bonds, Series 2015B (AMT) in an aggregate principal amount of $3,850,000 (the "Series 2015B Bonds," and together with the Series 2015A Bonds, the "Series 2015 Bonds') involved in this case, that the same are regular and in due form and after hearing evidence on all matters bearing upon the Series 2015 Bonds and the security therefor: IT IS HEREBY DETERMINED, ORDERED AND ADJUDGED that, as a matter of fact and as a matter of law, the Superior Court of Richmond County has jurisdiction over the subject matter of this proceeding and the parties thereto and said cause is properly before this Court. IT IS FURTHER DETERMINED, ORDERED AND ADJUDGED that, as a matter of fact and as a matter of law, the provisions of an Act of the General Assembly of the State of Georgia (Georgia Laws 1995, p. 3648 et seq., as amended, the "Act ") are valid, constitutional and of full force and effect, and pursuant thereto and to referenda required by the Act, which were held within the City of Augusta (the "City ") and Richmond County (the "County"), the City and County were consolidated (such consolidated political subdivision hereinafter referred to as the "Consolidated Government "). IT IS FURTHER DETERMINED, ORDERED AND ADJUDGED that, as a matter of fact and as a matter of law, the Consolidated Government has been duly, legally and constitutionally created and designated as "Augusta, Georgia" and now constitutes a county and a municipality under the laws and the Constitution of the State of Georgia and is a political subdivision of the State of Georgia in the exercise of the respective powers of a municipality and a county, governed by the Augusta- Richmond County Commission (the "Commission'). IT IS FURTHER DETERMINED, ORDERED AND ADJUDGED that, as a matter of fact and as a matter of law, the Consolidated Government, acting by and through the Commission, its duly and legally constituted governing body, is authorized pursuant to the Constitution of the State of Georgia, the Act, the Revenue Bond Law (Title 36, Chapter 82, Article 3 of the Official Code of Georgia, Annotated, as amended, the "Revenue Bond Law") and the Bond Resolution (as hereinafter defined) to issue the Series 2015 Bonds for the legal and constitutional purposes hereinafter set forth. IT IS FURTHER DETERMINED, ORDERED AND ADJUDGED that, as a matter of fact and as a matter of law, the defendant Consolidated Government acting by and through the Commission was and is legally authorized to and did adopt a master bond resolution 2 ze�- on September 1, 2015 (the "Bond Resolution'), authorizing the issuance of the Series 2015 Bonds described in the petition and complaint and referred to in the answer in this case, for the purposes of providing funds, together with other available moneys, to finance the cost of (a) with respect to the Series 2015A Bonds, refunding the Augusta, Georgia Airport Passenger Facility Charge and General Revenue Bonds, Series 2005A (Non -AMT) currently outstanding in the aggregate principal amount of $8,990,000 (the "Series 2005A Bonds ") and paying the costs of issuance of the Series 2015A Bonds and (b) with respect to the Series 2015B Bonds, to refund the Augusta, Georgia Airport General Revenue Bonds, Series 2005C (AMT) currently outstanding in the aggregate principal amount of $6,040,000 (the "Series 2005C Bonds ") and paying the costs of issuance of the Series 2015B Bonds, all to the extent and in the manner set forth in the Bond Resolution, which purposes are sound, reasonable and feasible and legal, valid and constitutional in all respects. IT IS FURTHER DETERMINED, ORDERED AND ADJUDGED that, as a matter of fact and as a matter of law, the Series 2015A Bonds, when issued, will be payable from and secured by a senior lien on both the Net General Revenues of the Airport and Pledged PFC Revenues of the Airport on deposit in the Pledged PFC Series 2015 Account (as such tenors are defined in the Bond Resolution), and the Series 2015B Bonds, when issued, will be payable from and secured by a senior lien on the Net General Revenues of the Airport. The Series 2015A Bonds and the Series 2015B Bonds shall be secured on a parity with each other as to the lien on the Net General Revenues of the Airport, and shall constitute General Revenue Bonds (as defined in the Bond Resolution). The Series 2015 Bonds are fully authorized to be issued pursuant to the Bond Resolution and each condition thereto has been met. M 1 1, 3 matter of fact and as a matter of law, the Consolidated Government is legally authorized to and did take all necessary and proper steps to provide that the proceeds derived from the sale of the Series 2015A Bonds shall be used only for the purposes for which the Series 2015A Bonds are being issued under the Bond Resolution; that is, refunding the outstanding Series 2005A Bonds and paying the costs of issuance of the Series 2015A Bonds, all as is more fully set forth in the Bond Resolution. IT IS FURTHER DETERMINED, ORDERED AND ADJUDGED that, as a matter of fact and as a matter of law, the Consolidated Government is legally authorized to and did take all necessary and proper steps to provide that the proceeds derived from the sale of the Series 2015B Bonds shall be used only for the purposes for which the Series 2015B Bonds are being issued under the Bond Resolution; that is, refunding the outstanding Series 2005C Bonds and paying the costs of issuance of the Series 2015B Bonds, all as is more fully set forth in the Bond Resolution. IT IS FURTHER DETERMINED, ORDERED AND ADJUDGED that as a matter of fact and as a matter of law, the defendant Consolidated Government has covenanted, acting by and through the Augusta Aviation Commission, to continuously own, control, operate, and maintain the Airport in an efficient and economical manner and on a revenue producing basis and has the authority and is required at all times to prescribe, fix, maintain, and collect rates, fees, and other charges for the services and facilities furnished by the Airport fully sufficient: (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: (i) 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; (ii) 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 (iii) will remedy all deficiencies in required payments from the Revenue Fund from prior Fiscal Years; and provided that the preceding rate covenant shall not be construed as requiring the Airport to impose passenger facility charges in excess of amounts permitted pursuant to the PFC Act. All capitalized terms used in this paragraph have the meanings set forth in the Bond Resolution. IT IS FURTHER DETERMINED, ORDERED AND ADJUDGED that, as a matter of fact and as a matter of law, the defendant Consolidated Government has pledged all or so much as may be necessary of the revenues heretofore described to secure payment by the Consolidated Government of the amounts agreed to be paid in the Bond Resolution with respect to the Series 2015 Bonds and any bonds hereafter issued on a parity therewith, which pledge constitutes a first lien on said revenues, to the extent and in the manner as set forth in the Bond Resolution. IT IS FURTHER DETERMINED, ORDERED AND ADJUDGED that, as a matter of fact and as a matter of law, the Series 2015 Bonds are authorized to be issued pursuant to the valid and binding Bond Resolution and the Revenue Bond Law, and pursuant to the laws and Constitution of the State of Georgia, the defendant be and it is hereby authorized to issue the Series 2015 Bonds described in the petition and complaint and referred to in the answer in this case for the legal and constitutional purposes set forth in the Bond Resolution. IT IS FURTHER DETERMINED, DECLARED, ORDERED AND ADJUDGED, as a matter of fact and as a matter of law, that the Consolidated Government, pursuant to the Bond Resolution, has waived its obligation to complete the performance audit or review requirements set forth in O.C.G.A. Section 36 -82 -100 by including a specific waiver of public accountability in its notice to the public, as part of these validation proceedings. IT IS FURTHER DETERMINED, ORDERED AND ADJUDGED that, as a matter of fact and as a matter of law, the Series 2015 Bonds will not constitute a debt of the State of Georgia or the Consolidated Government nor a pledge of the faith and credit of said State or Consolidated Government, nor shall the State or Consolidated Government be subject to any pecuniary liability thereon; and the Series 2015 Bonds shall not be payable from, nor be a charge upon, any funds other than the revenues pledged therefor pursuant to the Bond Resolution; and no owner of the Series 2015 Bonds shall ever have the right to enforce payment thereof against any other property of the State of Georgia or the Consolidated Government, nor shall the Series 2015 Bonds constitute a charge, lien or encumbrance, legal or equitable, upon any other property of the Consolidated Government other than the revenues pledged to the payment thereof under the Bond Resolution and the issuance of the Series 2015 Bonds shall not directly, indirectly or s � contingently obligate the State or the Consolidated Government to levy or to pledge any form of taxation whatever therefor or to make any appropriation for their payment. IT IS FURTHER DETERMINED, ORDERED AND ADJUDGED that, as a matter of fact and as a matter of law, the Series 2015 Bonds, as described in said petition and referred to in defendant's answer, be and the same are hereby in each and every respect confirmed and validated, and Augusta, Georgia is authorized and empowered to issue and deliver the Series 2015 Bonds, and when so issued and delivered, the Series 2015 Bonds shall be valid and binding limited obligations of Augusta, Georgia, in accordance with the terms and conditions of the Series 2015 Bonds and of the Bond Resolution authorizing the issuance of the Series 2015 Bonds, all of which terms and conditions are hereby in each and every respect confirmed and validated. Let the defendant pay the cost of these proceedings from the proceeds of the sale of the Series 2015 Bonds. IN OPEN COURT, this September 21, 2015 Court I qty, Georgia IN THE SUPERIOR COURT OF RICHMOND COUNTY STATE OF GEORGIA, Plaintiff, vs. AUGUSTA, GEORGIA, Defendant. STATE OF GEORGIA CIVIL ACTION FILE NO. 2015 RCCV 00457 BOND VALIDATION CLERK'S CERTIFICATE I, Elaine C. Johnson, Clerk of the Superior Court of Richmond County, Georgia, do hereby certify that I have compared the foregoing copy of the Petition for Validation of Revenue Bonds, Order of the Court entered thereon, Answer of Augusta, Georgia, together with Advertisements, Acknowledgments of Service, Exhibits, Order and Final Judgment of Court entered September 21, 2015 confirming and validating the Augusta, Georgia Airport General Revenue Refunding Bonds, Series 2015A (Non -AMT) in an aggregate principal amount of $6,675,000 (the "Series 2015A Bonds ") and the Augusta, Georgia Airport General Revenue Refunding Bonds, Series 2015B (AMT) in an aggregate principal amount of $3,850,000, in the case of the State of Georgia vs. Augusta, Georgia, same being Civil Action File Number 2015- RCCV -00457 in said Court, with the original record thereof now remaining in this office, and the same is a correct copy thereof, and of the whole of such original record, and that this Court is a Court of Record. IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the Superior Court of Richmond County, Georgia this September2 U ' 410 15. Clerk, Superior Court Richmond County, GeOl�ia MASTER BOND RESOLUTION ADOPTED SEPTEMBER 1, 2015 BY THE AUGUSTA - RICHMOND COUNTY COMMISSION ADOPTED SEPTEMBER 1, 2015 BY THE AUGUSTA AVIATION COMMISSION AIRPORT REVENUE BONDS TABLE OF CONTENTS ARTICLE DDEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION.6 Section Definitions . ............................................................................................................. 6 Section 102 Construction Of Certain Terms ........................................................................... 2Z Section 103 Table of Titles and .............................................................. 23 Seotimo28l ' m �� mf�oo�o '---'--------^ -- '--''—'---------'--'----'---- 24 Scobmn Bond Details . ........................................................................................................ 24 Section 203 Execution and Authentication mf Bonds ............................................................... 26 Section 204 Registration nf Bonds ' .......................................................................................... 27 Section 205 Transfer and Exchangeability mf Bonds . .............................................................. 27 Section 206 Cancellation and Destruction mf Bonds ................................................................ 28 Section 207 Mutilated Lost, Stolen, or Destroyed Bonds . ...................................................... 28 Section 208 Global �mro,'8ccu���m�mmmm�mr= mf�c��m2nl5Bmo�a -- " --,----', —''--''' 29 Section 308 Selection nf Bonds tobe Redeemed ..................................................................... 33 Section 301 Optional Redemption . .......................................................................................... ]l Section . ........................................................................................................... 3l Section 303 Notice of Redemption . ......................................................................................... 3l Section 304 Consolidated Government mrBond Registrar May Give Notice of 3g Section 404 Redemption '—'---''---------'—'---------'—'--''-------'-32 4l Section 305 Effect of Notice of ---.----.—.-----------.----.32 45 Section 306 Conditional -----.-.---.---.----.-----------..33 Section 307 Redemption Among Series ................................................................................... 33 Section 308 Selection nf Bonds tobe Redeemed ..................................................................... 33 Section 409 Deposits and Security oF Funds and Accounts . .................................................... 48 Sectimo4Ol of�sv�omx�m' �ioz�c� K�wotca�t �i�om ''--�- , _-'=�---- '----------.-- 35 Section 402 Funds Accounts and -.---------.--.—.--..—.--.---.-37 Section 403 Revenue Food PFC Revenue Fund and Operation and Maintenance Fund ...................................................................................................................... 3g Section 404 Debt Service Fund and Debt Service Reserve Fund . ........................................... 4l Section 405 Operation and Maintenance Reserve Fund .......................................................... 45 Section 406 Subordinate Securities Food ..--.—.------..----.—.-.—.—..—.--.--../45 Section 407 '—.-----------..---.---.--.---.--..-----.—.---/45 Section 408 Capital Improvement Fuud--.----.----------.—..—...—..—..----.. 45 Section 409 Deposits and Security oF Funds and Accounts . .................................................... 48 Section 410 Investment of Funds and Accounts ...................................................................... 46 I Section 412 Valuation of Investments ......................................................... .............................46 Section 413 Application of Excess in Debt Service Fund ........................... .............................47 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 602 Section 502 Additional General Revenue Bonds ........................................ .............................48 Section 603 Section 503 Subordinate Lien Bonds .......................................................... .............................50 No Sale, Lease, or Encumbrance; Exceptions ......................... .............................58 Section 504 Special Purpose Revenue Bonds; Additional Released Revenue Bonds; Section 606 Satisfaction of Liens ................................................................ .............................59 Other Airport Obligations; and PFC Stand -Alone Revenue Bonds ..................... 52 Section 505 Released Revenues; Securitizations ........................................ .............................53 Section 609 Section 506 Special Purpose Facilities ........................................................ .............................53 Annual Budget ......................................................................... .............................60 Section 507 Accession of Subordinate Lien Bonds and Related Contracts to Senior .............................60 Section 612 LienStatus ............................................................................... .............................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 Section608 Payments ................................................................................. .............................60 Section 609 No Loss of Lien on Revenues ................................................. .............................60 Section610 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 Section702 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 ii 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 .. ............................... 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 Section1305 Validation ................................................................................ .............................82 Section 1306 Approval of Series 2015 Paying Agent and Bond Registrar Agreement .............82 Section 1307 Approval of Series 2015 Custodian Agreement ...................... .............................83 Section 1308 Waiver of Bond Audit ............................................................. .............................83 Section1309 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 iii 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 2015E Bonds Exhibit C — Form of Redemption Notice for Series 2005A Bonds Exhibit D — Form of Redemption Notice for Series 2005B Bonds IV 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 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 $6,675,000 and "Augusta, Georgia Airport General Revenue Refunding Bonds, Series 2015B (AMT) in an aggregate principal amount of $3,850,000 (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 K 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 25, 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; 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; 4 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 2415 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: 5 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. 0 "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 7 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. 6 "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. E "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. U1 "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 11 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, 12 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 13 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 14 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. 15 " 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" 16 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. U.S. Bank National Association is hereby designated as Paying Agent for the Series 2015 Bonds. "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 1V any of the accounts or subaccounts created herein or in any Supplemental Resolution resulting 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 this Master Bond Resolution for the Series 2015 Bonds or in the Supplemental Bond Resolution for such other 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. z "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 19 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 2015E Bonds. 20 "Series 2015A Bonds" means the Augusta, Georgia Airport General Revenue Refunding Bonds, Series 2015A (Non -AMT) in the aggregate principal amount of $6,675,000, 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 $3,850,000, 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. 21 "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. 11 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: W (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. 23 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 $6,675,000 and the "Augusta, Georgia Airport General Revenue Refunding Bonds, Series 2015E (AMT)" in the original aggregate principal amount of $3,850,000. 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 24 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 1 st day of January in the years and amounts set forth below: Year Principal Amount Interest Rate 2026 $530,000 5.000% 2027 560,000 5.000 2028 585,000 5.000 2029 615,000 5.000 2030 645,000 5.000 2031 675,000 5.000 2032 710,000 5.000 2033 745,000 5.000 2034 785,000 5.000 2035 825,000 5.000 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 -I 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 1 st day of January in the years and amounts set forth below: 25 Year Principal Amount Interest Rate 2017 $350,000 5.000% 2018 365,000 5.000 2019 385,000 5.000 2020 405,000 5.000 2021 425,000 5.000 2022 445,000 5.000 2023 470,000 5.000 2024 490,000 5.000 2025 515,000 5.000 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 15' 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 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 Nel 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 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 27 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 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. W 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; (ii) giving notices of redemption and other matters with respect to the Series FM (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. 30 ARTICLE III REDEMPTION OF BONDS Section 301 Optional Redemption. The Series 2015B Bonds are not subject to optional redemption prior to their respective maturities. The Series 2015A 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, 2025, 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 the Series 2015A Bonds shall be made by the payment of the principal amount of the Series 2015A Bonds to be redeemed and accrued interest thereon to date of redemption, at par without a premium. If the Series 2015A Bonds are 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 Reserved]. 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, postage prepaid, 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; 31 (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 (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 32 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 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 33 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. 34 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. 35 (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 ail, 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 36 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 Regions Bank, Augusta, Georgia, 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 Regions Bank, Augusta, Georgia, 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 such additional Pledged PFC Series Accounts as may be created and established in a Supplemental Bond Resolution. 37 (c) Augusta, Georgia Airport Operation and Maintenance Fund to be held by Regions Bank, Augusta, Georgia, as Depository, for the account of the Augusta Aviation Commission. (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. 0) Augusta, Georgia Airport Subordinate Securities Fund to be held by Regions Bank, Augusta, Georgia, as Depository, for the account of the Augusta Aviation Commission. (k) Augusta, Georgia Airport Capital Improvement Fund to be held by Regions Bank, Augusta, Georgia, as Depository, for the account of the Augusta Aviation Commission, and within the Capital Improvement Fund: (i) Capital Improvement Account. (ii) Revenue Credit Account. (1) Augusta, Georgia Airport PFC Capital Fund to be held by Regions Bank, Augusta, Georgia, 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. Fund. Section 403 Revenue Fund, PFC Revenue Fund, and Operation and Maintenance (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 39 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, 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, .l then from the Released Revenue Account; and (C) otherwise, from the General Revenue Account; (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 15` 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 1l6th 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 41 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 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, 42 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 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 43 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 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. 44 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 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 1Reservedl. 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 45 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. 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. .e 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 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. 47 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 .• (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. E (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) 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. c (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 51 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. 52 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 53 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), (6) and (7) 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 Account, the Principal Account and the Contract Payments Account 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. 54 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." M 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(e) 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 M 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. WA 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 ; 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. We 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. C 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. 61 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. 62 ARTICLE VII 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 Lien Bonds under any Liquidity Facility then in effect; x 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 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 444(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. M 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 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. 67 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. WV Section 706 Rishts 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. 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. 70 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 an angements 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 Pledse. 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. 71 ARTICLE X SUPPLEMENTAL RESOLUTIONS Section 1001 Supplemental Resolutions Not Requirine 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; 72 (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; 0) 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; (1) 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. 73 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 failing within one of the enumerated categories. 74 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. M ARTICLE XI SALE OF BONDS Section 1101 Application of Funds. (a) The Consolidated Government shall apply the net proceeds (i.e., equal to the par amount of the Series 2015A Bonds plus $586,229.80 of original issue premium and less the Underwriter's discount of $58,188.16) from the sale of the Series 2015A Bonds, together with $1,665,951.51 on deposit in the PFC Balloon Bonds Reserve Account allocable to the Refunded 2005A Bonds, $1,059,501.48 on deposit in the 2005A/B Subaccount of the PFC Debt Service Reserve Account allocable to the Refunded 2005A Bonds and $105,460.34 on deposit in the Series 2005AB 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) $9,107,032.32 shall be transferred to the 2005 Paying Agent for deposit in the 2005 Defeasance Account and applied to refund the Refunded 2005A Bonds; (ii) $667,500.00 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.,equal to the par amount of the Series 2015B Bonds of $3,850,000 plus $362,595.15 of original issue premium and less the Underwriter's discount of $33,561.72) from the sale of the Series 2015B Bonds, together with an equity contribution by the Airport of $230,715 and $1,500,712.62 on deposit in the Balloon Bonds Reserve Account, $710,448.37 on deposit in the Series 2005C Subaccount of the Debt Service Reserve Account and $89,038.43 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) $6,173,898.21 shall be transferred to the 2005 Paying Agent for deposit in the 2005 Defeasance Account and applied to refund the Refunded 2005B Bonds; (ii) $385,000.00 shall be deposited into the Series 2015E 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 and the Series 2005AB Subaccount of the Interest Account and the Principal Account of the PFC Debt Service Fund after the transfers authorized in Section 1101(a) shall be deposited to the PFC Capital Fund. All amounts remaining in the Series 2005A1B Subaccount of the PFC Debt Service in Reserve Account after the transfers authorized in Section 1101(a) shall be deposited to the Capital Improvement Account of the Capital Improvement Fund. Upon the issuance of the Series 2015 Bonds, all amounts held under the Prior Resolution in the Augusta, Georgia Airport Renewal and Replacement Fund shall be deposited to the Capital Improvement Account of the Capital Improvement Fund. 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 Paving Ascent 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: 77 Principal Interest Total Refunded 2005A Bonds $8,990,000 Refunded 2005B Bonds 6,090,000 $117,032.32 83,898.21 $9,107,032.32 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. 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. M 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 WE 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 Proiects. 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. W 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 2 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 Paving 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. 82 Section 1307 Approval of Series 2015 Custodian 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. RE 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 fails 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. 84 A� this Septemb 1, 2015. ►ratCH�� Mp Y k f lo AUGUSTA, GEORGIA By ► CEORO � Adopted this September 1, 2015. AUGUSTA AVIATION COMMISSION (SEAL) By: Chairman Attest: Secretary M 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 -1 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 $6,675,000 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 funds to A -2 (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 $3,850,000 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 -3 (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 -4 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, 2025. The Series 2015A Bonds 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, 2025, 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. 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 FEW 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. 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 -6 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 7 2015. AUGUSTA, GEORGIA (SEAL) By: Mayor 0 Chairman, Augusta Aviation Commission Attest: Clerk A -7 CERTIFICATE OF AUTHENTICATION Date of Authentication: I rill� ;ox l e ; 1 3 1 1 IT I U.S. BANK NATIONAL ASSOCIATION, as Bond Registrar By: Authorized Signatory m 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 -9 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. A -10 [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 far 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 2015E (AMT) S DATE: INTEREST RATE: MATURITY DATE: CUSIP: ° lo 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 2015E 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. 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 2015E 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 $3,850,000 duly authorized and designated "Augusta, Georgia Airport General Revenue Refunding Bonds, Series 201513" (the "Series 2015B Bonds ") all of like tenor, except as to authentication dates, numbers, denominations, interest rates and maturities. The Series 2015E 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 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 $6,675,000 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 ff-W 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 2015E 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 2015E 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 2015E 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 2015E 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 ., 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 2015E 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 are not subject to optional redemption prior to their respective maturities. 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. 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. M . 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. (SEAL) Attest: Clerk Chairman, Augusta Aviation Commission AUGUSTA, GEORGIA By: Mayor By: MR 114 9 * 1 OWN e �W Date of Authentication: This bond is one of the Series 2015E Bonds described herein. U.S. BANK NATIONAL ASSOCIATION, as Bond Registrar By: Authorized Signatory I: 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) 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 Registered Owner 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. 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. •1 0NNUTHUS 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. Maturity Date CUSIP Number Janu 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 Overniaht Mail: U. S. Bank Corporate Trust Services 60 Livingston Ave 1 St 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 -1 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 C -2 EXHIBIT D FORM OF REDEMPTION NOTICE FOR SERIES 2005C 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 (Januga 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 I" 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 RN 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. REOUIREMENT 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 I1 M CLERK'S CERTIFICATE mXG7wei/•w:i[a] k CO) gI174141ilan`1 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 $6,675,000 Augusta, Georgia Airport General Revenue Refunding Bonds, Series 2015A (Non -AMT) and of $3,850,000 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 0 Abstain 11) . WITNESS my hand and the official seal of Augusta, Georgia this September 1, 2015 �; AD RON :i L / ROM /� i.1 % r 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 -1 UNITED STATES OF STATE OF GEO AIRPORT G DATE: September3.A AUGUSTAC; GEORG �1 ►J F R VALUE I D, A U T A, I I G qR ✓ I� "Consolidated Gove nt m cipal co ati n d ty di ly at d existing under the laws of t St a of a rg' , hereb o ise t pa ole ro sources hereinafter described to E egi ered a ign , the p 'nci a sum of FIVE HUNDRED THIRTY US ND D in 1 mo y the United States of America, on the date specifi d abov , unle s r eem d for reto as hereinafter provided, upon presentation and surrend r of his Seri s 2015A and to U.S. Bank National Association, Atlanta, Georgia, as r tr d crying a ent `Bond Registrar" or the "Paying Agent "), and to pay interest on aid pri it sum (c puted on the basis of a 360 -day year of twelve 30 -day months) at the i t es r e r annum specified above, payable semiannually on January 1 and July 1 of each year ac uch date an "Interest Payment Date "), commencing January 1, 2016, from the Inte st Payment Date next preceding the date of authentication of this Series 2015A Bond to w ich in 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 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 registration books 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 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 -2 UNITED STATES OF AMERIC STATE OF GEORGIA f' DATE: September 2 t F R VA Jove nt' , in St to of a r' r US " ND D peci i d abov uni ,urren r of his Sei str d aying ai pr �ipa sum AUGUST RGI AIRPORT GE SE ES 24151 U N R,E ) I BOND T " E AU A A, G QR I�,. fe "Consolidated icin o t d ly c at d existing under the laws of ht pa ole y o t sources hereinafter described to re , t rin i sum of FIVE HUNDRED SIXTY A 1 mon y e United States of America, on the date s for t reto as hereinafter provided, upon presentation and i s o U.S. Bank National Association, Atlanta, Georgia, as e Registrar" or the "Paying Agent "), and to pay interest on u ted on the basis of a 360 -day year of twelve 30 -day months) at the ii res rte Oer annum specified above, payable semiannually on January 1 and July 1 of each year ac uch date an "Interest Payment Date "), commencing January 1, 2016, from the Ineich st Payment Date next preceding the date of authentication of this Series 2015A Bond to w 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 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 registration books 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 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 -3 UNITED STATES OF AMERI STATE OF GEO AIRPORT G DATE: September J BOND F R VA E IV D, A G S A, G I %fie "Consolidated Gove nt' m icipal co rati n o duly c eat d existing under the laws of t St to of rg a, hereb o is s t p ole y from sources hereinafter described to C ., or a ist ed assi ns, p . c pals f FIVE HUNDRED EIGHTY -FIVE US D D L A in a 4ul mo y e United States of America, on the date speci i d abo , unle s r eem d rior t ereto as hereinafter provided, upon presentation and surren of his Ser' s 2015A Bon o U.S. Bank National Association, Atlanta, Georgia, as r str d paying 4gent Bond Registrar" or the "Paying Agent "), and to pay interest on a pr n ipa sum (c uted on the basis of a 360 -day year of twelve 30 -day months) at the res r to er annum specified above, payable semiannually on January 1 and July l of each year ea such date an "Interest Payment Date "), commencing January 1, 2016, from the Int est 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 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 registration books 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 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 -4 UNITED STATES OF AMERI STATE OF GEORGIA DATE: September 2J AUGUST E )R VA E IV D, A G S A, G Ie "Consolidated ;nt icipai co rati n o t d ly c eat d xrsting under the laws of of rg a, hereby o is s t p oie y o t sources hereinafter described to ., r reg' eyed si th rin ip um of SIX HUNDRED FIFTEEN ►ND D L A Sin a i mo y e United States of America, on the date abov , unle s r em d rior t reto as hereinafter provided, upon presentation and of this Series 2 115A Bon o U.S. Bank National Association, Atlanta, Georgia, as and paying ent Bond Registrar" or the "Paying Agent "), and to pay interest on ipa sum (c uted on the basis of a 360 -day year of twelve 30 -day months) at the lyres rte er annum specified above, payable semiannually on January 1 and July 1 of each Vne s ea such date an "Interest Payment Date "), commencing January 1, 2016, from the t Payment Date next preceding the date of authentication of this Series 2015A Bond to 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 thc. 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 Bond is registered at the close of business on tl a 15th day of the calendar month next preceding such Interest Payment Date (each such da a "Record Date ") at the address shown on the registration books maintained by the Pond Registrar on such Record Date, except that any interest not so timely paid or duly provid -d for shall cease to be payable to the person who is the 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 -5 UNITED STATES OF STATE OF GEO AUGUST AIRPORT DATE: J I7 F R VA E PA G S A, G tERCI "e "Consolidated Gave nt' ), m icipal co o d ly c eat d existing under the laws of S to of rg a, hereb ole y ro sources hereinafter described to E C ., o r gis red ari cip 1 of SIX HUNDRED FORTY -FIVE T S ND D L A S i y the United States of America, on the date specifi d ab , unle s r eem reto as hereinafter provided, upon presentation and surren of is Se ' s 2015A .S. Bank National Association, Atlanta, Georgia, as reg' tr d aying ent "strar" or the "Paying Agent "), and to pay interest on ai pr n ipa sum (c puted on the basis of a 360 -day year of twelve 30 -day months) at the i re rte er annum specified above, payable semiannually on January 1 and July 1 of each year ea such date an "Interest Payment Date "), commencing January 1, 2016, from the I est 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 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 registration books 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 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 -6 UNITED STATES OF AMERI STATE OF GEOR AUGUST , G RGI AIRPORT GENE U SE ES 2 15 ( N- DATE: INTE ST A U Seatember2"15 5. 00 0 J n 1 � 1 F R VA E IV D, A G A, g R I6_- the "Consolidated Gove nt' ), m icipal co rati n d o d ly d existing under the laws of St to of rg a, hereb o is t p ole y f ro sources hereinafter described to E C ., or a ist red assi ns, a pr nc al su o HUNDRED SEVENTY -FIVE S ND D L A S i a l mo y the United States of America, on the date specifi d ab , unle s r eem d or ereto as hereinafter provided, upon presentation and surren r of is Seri s 2015A Bond to U.S. Bank National Association, Atlanta, Georgia, as re ' tr d aying ent "Bond Registrar" or the "Paying Agent "), and to pay interest on ai pr n ipa sum (c puted on the basis of a 360 -day year of twelve 30 -day months) at the i res rte er annum specified above, payable semiannually on January 1 and July 1 of each year ea c such date an "Interest Payment Date "), commencing January 1, 2016, from the In est 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 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 registration books 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 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. UNITED STATES OF STATE OF GEO FOR VALUE IV D, AU U , Oat �I "e "Consolidated Gove nt' VhisSerni cipal co o ati n d ty duly r d existing under the laws of t S e of hereb o ise to pa ole o sources hereinafter described to E registered sig , t rin i m su of SEVEN HUNDRED TEN SAND AR i 1 mo y the United States of America, on the date specifi d abo s r eem d or reto as hereinafter provided, upon presentation and surrend r of s 2015A and to U.S. Bank Natio nal Association, Atlanta, Georgia, as V d aying a ent `Bond Registrar" or the "Paying Agent "), and to pay interest on ipa sum (c puted on the basis of a 360 -day year of twelve 30 -day months) at the to er annum specified above, payable semiannually on January 1 and July 1 of each c such date an "Interest Payment Date "), commencing January 1, 2016, from the 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 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 registration books 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 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 -8 UNITED STATES OF STATE OF GEO AUGUST AIRPORT G DATE: 1 IN� September 1 Oor% - 17 5. 00 /o )R VA E IV Nnd G S A, G QR�l6✓''(the "Consolidated ant ), icipal co rati o d ly c eat d d exis ting under the laws of of rg a, hereb o is ole y o e sources hereinafter described to C ., ore ist ed assi s, i al of SEVEN HUNDRED FORTY -FIVE US D D L i a 1 mo y Ftf" the United States of America, on the date speci r d ab , unle s r eem d or ereto as hereinafter provided, upon presentation and surren of is Series 2015A Bond to U.S. Bank National Association, Atlanta, Georgia, as re 'str d aging ent a "Bond Registrar" or the "Paying Agent "), and to pay interest on ai p n ipa sum (c puted on the basis of a 360 -day year of twelve 30 -day months) at the i re r to er annum specified above, payable semiannually on January 1 and July 1 of each V* eac such date an "Interest Payment Date "), commencing January 1, 2016, from the In est 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 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 registration books 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 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 -9 UNITED STATES OF AMERIC STATE OF GEORGIA► r AIRPORT G AUGUST DATE: September 24 28,15 MIKENZ.&MM� clove nt' m n cipai co o ati n a c ty d iy rata " existing under the laws or t Stale a of a rgi , hereb o ise to pa le ro sources hereinafter described to E & C ., or r g ter d assig s, th rin ip 1 s m EVEN HUNDRED EIGHTY -FIVE )regt D D L in 1 mon y e United States of America, on th e date abo , unle s r eem d or t reto as hereinafter provided, upon presentation and r of his Seri s 2015A and to U.S. Bank National Association, Atlanta, Georgia, as d aying a ent `Bond Registrar" or the "Paying Agent "), and to pay interest on ipa sum (c puted on the basis of a 360 -day year of twelve 30 -day months) at the te er annum specified above, payable semiannually on January 1 and July 1 of each c such date an "Interest Payment Date "), commencing January 1, 2016, from the 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 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 registration books 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 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 -10 100[1Y X111MUstiIlOM 0131"M_- 71 STATE OF GEO :'1: AUGUST DATE: 0 1,1 )R VALUE IV D, At GUS] A, G �I6�e "Consolidated ,nt' P.. icipal co rati n d o nt d ly c eat d existing under the laws of of rg a, hereb o is t p ole y fro sources hereinafter described to C o r gis red ass igns, a ri in 1 of EIGHT HUNDRED TWENTY- )Iest OUSA D O L lawful moil of the United States of America, on the date ab , unle s r eem d for ereto as hereinafter provided, upon presentation and of this Seri s 2015A Bond to U.S. Bank National Association, Atlanta, Georgia, as d paying ent a "Bond Registrar" or the "Paying Agent "), and to pay interest on all ip sum (c puted on the basis of a 360 -day year of twelve 30 -day months) at the rte er annum specified above, payable semiannually on January 1 and July 1 of each such date an "Interest Payment Date "), commencing January 1, 2016, from the 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 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 registration books 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 payable to any registered owner of more than $1,000,000 in aggregate principal amo Series 2015A Bonds by deposit of immediately available funds to the account s ch r owner maintained with the Paying Agent or transmitted by wire transfeFatefota 'I c r g ster at an account maintained at a commercial bank located within th te o Ai the Paying Agent receives from such registered owner itte or Ft I re instructions prior to the Record Date preceding the In est Pa men r whi or wire transfer is requested. r -I , The principal of this Series 2 5A n is a bl po res( of this bond at the designat rp ate trust o ice a th B d e is rar its successor or succe s, in y oin cu e cy f he e St to of time of such pent is legal t d r f p is d ri at a is twithstan i Sv in , so long as hi ies 15 and egistered in the name f ed C ., pri cip nd in r on t is e ' 2015A Bond shall be m de it tr ns r to. T is erie 2 1s all not b v lid r 15"e obligatory for any purpose or be entitl t any s curl y t not t Bond Resolution (hereinafter described) until this Series 0 5 ands aen ticated and registered upon the registration books kept the nd egistr urpose, which authentication shall be evidenced by the manual pxe uti of he certi c by the Bond Registrar. T is eries 2015A Bond is one of a series of general revenue refunding bonds in the aggr gate principal amount of $6,675,000 duly authorized and designated "Augusta, Georgia Vort 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 on September 1, 2015 by the Augusta - Richmond County Commission and by the Augusta Aviation Commission (the "Bond Resolution "), for the purpose of providing 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 on deposit in the Pledged PFC Series 2015A Account (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 $3,850,000 aggregate principal amount of its Airport General Revenue Refunding Bonds, Series 2015B (AMT) (the "Series 2015B Bonds "). The lien of the Series 2015A Bonds on Net General Revenues is on a parity with the lien on such revenues securing the Series 2015E Bonds. Net General Revenues include generally all revenues arising from the ownership or operation of the Airport after the payment of expenswif operation and maintenance of the Airport, but specifically exclude "PFC Revenues' rev nu s received by or required to be remitted to the Augusta Aviation Commission he s ng r facility charges imposed by the Augusta Aviation Commission pursu the iatio S fe mxt and Capacity Government Expansion Act of 1990), "Special se Reve " (r nu s arising from or generated by one or more Special Purpo e F chit es as coed in the on Resolution)) and "Released Revenues" (particular Cate o es Re enue hi oul otherwise be General Revenues but have been i nt fi d in cc r an e t e o d solutio and therefore do not constitute a part ner 1 R v (nu s, ti the onsolida d Go rnme t has acted to include such categories f Rev u s it in e r R v nue ain). P s ant t the Bond Resolution, upo o pli ce with c rt ' o iti ns the on olidated Go e e t may (i) issue additio revenue nd s c e on a a ' i t eri B nd , ) issue additio ve ue bo ec ed on a su or in e s ayment r m he same revenues securing h S ries 20 5A Bonds, ( ii) issue diti al r enue bo d secured by e es diffe ent r m a ue securing the S ri s 20 5 o d v) issue additional revenu n s c by a co b' ati no i d (ii) or i) d "' or (v) grant a lien securing r l gat o pari t or n s b rdi at b s the Series 2015A Bonds. The er s 2 15 on s, th Series 01 B d ( it espect only to the senior lien on Net Gen i evenue an a ditio 1 onds se re n a parity therewith are hereinafter referred to as the ` G ner evenue nds.' e nsolida ed G ent, acting by and through the Augusta Aviation Commission, Dasco a ant d and y covenants and agrees at all times to prescribe, fix, maintain, and ect ra es, ees, and other charges for the services and facilities of the Airport fully sufficient to: (i pr a for 100 percent of the Expenses of Operation and Maintenance of the Airport (e pt for certain specific facilities) and for the accumulation in the Operation and Maintenance Reserve Fund of the Operating Reserve, and (ii) produce an Amount Available to Pay Debt Service in each Fiscal Year 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, for the Bond Year ending on the next January 1 and at least 100 percent of the debt service requirement of all Subordinate Lien Bonds and Other Airport Obligations payable from Net General Revenues and Pledged PFC Revenues, (b) enable the Augusta Aviation Commission to make all payments into any Debt Service Reserve Fund and the Rebate Fund and on Contracts or Other Airport Obligations, and (c) remedy all deficiencies in required payments into any of the funds and accounts mentioned in the Bond Resolution from prior Fiscal Years. Capitalized terms in this paragraph shall have the meanings set forth in the Bond Resolution. 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 PROP OF THE CONSOLIDATED GOVERNMENT; NOR SHALL THIS SERIES B CONSTITUTE A CHARGE, LIEN, OR ENCUMBRANCE, LEGAL E U A L E, UPON ANY PROPERTY OF THE CONSOLIDATED GOVE NT, CET O THE NET GENERAL REVENUES, PLEDGED PFC REV E ON D SIT I PRLEDGED PFC SERIES 2015A ACCOUNT AND Y TH F S P EDG T SECURE THE PAYMENT OF THE SERIES 3fi 15 B N S. No covenants, stipulations, ob ' ns or g e e t o y fficer, a e , a mey r employee of the Consolidated Go ernme t or t e A gu vi tin is ior s all e deemed to be covenants p iat' ns, obli at on or a e is of an such c ffic er, ager t, attorney or employee ast or p s nt, ' s ' d vid a ca c y. o re ou s al e ad e payment oft ie 2015 o ds r any cl m t e eo agai y ember, it c r, officer, agent, a orney o in oyee o t e Conso idal ed Go e nt the sta Aviation is ion, ast, r se e. T e er on n hose thi Se 'es 2015 on s gistered on the registration books e y t e nd a ist shall e e to be h er of this Series 2015A Bond for all p ses The S rie 2 15A o ds are b in ' ued by means of a book -entry system, with actual es 5A o i o 'lized t The Depository Trust Company, New York, New York t ecunt Deposit ry"), or its successor as Securities Depository, evidencing o ers i o the Series 201 onds in denominations of $5,000 and integral multiples thereof J"Apth r. zed Denom ions "), and with transfers of beneficial ownership effected on the kp6rd of the Securities Depository and its participants pursuant to the rules and procedures estab sh y the Securities Depository. Actual Series 2015A Bonds are not available for dis ution 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 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 designated corporate trust office of the Band 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 and surrender thereof to the Bond Registrar for an equal aggregate principal amount of Series 2015A Bonds of the same series, interest P11 maturity and in any Authorized Denominations in the manner, subject to the conditi��d po payment of charges, if any, provided in the Bond Resolution. "I The Series 2015A Bonds may not be called for optional r e ption pri r '01 , 2025. The Series 2015A Bonds may be redeemed prior to eir a pec ' mat rities th option of the Consolidated Government, either in wh o i part t any time no a lie th January 1, 2025, in the manner and subject t e rovi io s oft es lu n, at redemption price equal to 100% oft inc pal o t o t e e ies 2015 o to b redeemed, together with accrued rote st tot e r de p io d t . If less than all a Se ' s 01 B d of at i s 11 a all d f e em do , t particular bon r p rtions t r f b red an d h b le e b of o i s ch er manner a ay be es gn by t e nd Regis ar N tic o re a pt n, 1 s aive , ' b g ve y f s Zredemption ail, postage prepaid, at I st 3 ays n t ore th 0 d ys riot th at e to the registered of ac en s 01 and to b de m d a t e dress shown on the registration books fain 6 d by the B nd egistr or at su address as is furnished in writing by such regist a ow B own o th is ar. Al such Series 2015A Bonds called for redemption and for the a ire ent of hich fun ar y provided shall, on the redemption date designated in n i e, ecome d bed and payable at the redemption price provided for redemption of uc S ri s 15A B on such date, and interest on the Series 2015A Bonds or portions of e es 0 5 Bonds so called for redemption shall cease to accrue, such Series 2015A Bonds or portio s dfWeries 2015A Bonds shall cease to be entitled to any lien, benefit, or security under the Xond Resolution, and the owners of such Series 2015A Bonds or portions of Series 2015A onds 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. 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 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. 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. ,,,r IN WITNESS WHEREOF, the Consolidated Government has caused this Series 2015A Bond to be executed by the manual 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 signature of its Clerk, as of September 24, 2015. AUGUSTA, GEORGIA 6 b � Y •-- •..; N 4 c. e e r Zi By Je i �MNNM F Attest: "+► CEORC3 � '+ a CERTIFICATE OF AUTHENTICATION Date of Authentication: September 24, 2015 This bond is one of the Series 2015A Bonds described herein. U.S. BANK NATIONAL ASSOCIATION, as Bond Registrar _. Authorized Signatory 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 21, 201 , +t no intervention or objection was filed opposing the validation of this Bond e s c u A ty therefor, and that no appeal of such judgment of validation has been taken,.- Witness my (facsimile) signature and seal of the Superl'o'j C�- rtof --I Georgia. I I Tu 0 * * * * JQ �p40R C�G9 • 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 Assi the within bond and all rights thereunder, hereby constituting and attorney to transfer this Bond on the Registrar, with full power of substiti Signature Guaranteed credit Siana in �e(s ust be a t ed y :or tho ' (su , vi gs d oan a s iations d m mb ip n appr ed irante Medall on ogram purpose V o�: The signature(s) on this assignment ust correspond with the name as it appears on the face of the within bond in every particular without alterations, enlargement or any change whatsoever. 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. UNITED STATES OF STATE OF GEa AUG DATE: Septem!w� 0 a sn E, 01 6 GUST , gfl9A iIA (the "Consolidated a o d y ated and existing under the laws of to ay so el rom the sources hereinafter described to t v , 01 re 2 isterom ssigns, a principal sum of THREE HUNDRED FIFTY DO LA i la f it oney of the United States of America, on the date )ove, unless redee ed prior thereto as hereinafter provided, upon presentation and f this Series B Bond to U.S. Bank National Association, Atlanta, Georgia, as r gis r payingent (the "Bond Registrar" or the "Paying Agent "), and to pay interest on aid p ci al sum (computed on the basis of a 360 -day year of twelve 30 -day months) at the int est ate per annum specified above, payable semiannually on January 1 and July 1 of each ar (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 2015E 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. 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 2015E 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 registration books maintained by the Bond Registrar on such Record Date, except that any 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 -2 UNITED STATES OF AMERI STATE OF GEORGIA DATE: AIRPORT FIXIMI M I VAIIUE EI D G S , 2EGIA �. (the "Consolidated a icipa rp rat on d a o ty du y ted and existing under the laws of o gi , h reby pr mis to a so l om the sources hereinafter described to )intr CO. r r gis ere signs, the nnp�al sum of THREE HUNDRED SIXTY -FIVE DO LA in la 1 oney of the United States of America, on the date above, un ess redee ed prior thereto as hereinafter provided, upon presentation and d r this Sc 'es B Bond to U.S. Bank National Association, Atlanta, Georgia, as an payin gent (the "Bond Registrar" or the "Paying Agent "), and to pay interest on ' c' al sum (computed on the basis of a 360 -day year of twelve 30 -day months) at the rate per annum specified above, payable semiannually on January 1 and July 1 of each 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. 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 registration books maintained by the Bond Registrar on such Record Date, except that any 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 -3 UNITED STATES OF AMERI STATE OF GEORGIA AIRPORT G AUGUST DATE: Septem4 O V UE C I ED G S A M1 (the "Consolidated v en ") a u icipal rat' n d o u r to and existing under the laws of he Stat o Geo i h re pr in to ay sol ly m the sources hereinafter described to C E & C ., r regi re assi principal sum of THREE HUNDRED EIG - T O N D LL in lawful money of the United States of America, on the I D s ecified I above, ufiless redeemed prior thereto as hereinafter provided, upon p se tatior ands en of this Series 2015B Bond to U.S. Bank National Association, 1 a G rgia, egistrar and paying agent (the "Bond Registrar" or the "Paying Agent "), nd o rths) nterest on said principal sum (computed on the basis of a 360 -day year of twelve 30- da mo at the interest rate per annum specified above, payable semiannually on January 1 d 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. 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 registration books maintained by the Bond Registrar on such Record Date, except that any 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 oj'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 -4 UNITED STATES OF AMERI STATE OF GEORGIA AUGUST MPSMSTCTl y DATE: l- -111011 J_�j,a UE EI ED G , EO"GrA (the "Consolidated N icip rp rat on d a ou ty du y�y�Iated and existing under the laws of e Stale i , h reby pr mis to a so 1 )m the sources hereinafter described to CE E o r gis d assigns, the rmcipal sum of FOUR HUNDRED FIVE TH U L S i la 1 oney of the United States of America, on the date eci i d a ove, un ess redee ed prior thereto as hereinafter provided, upon presentation and s e r f this S ries B Bond to U.S. Bank National Association, Atlanta, Georgia, as r gis r payin agent (the "Bond Registrar" or the "Paying Agent"), and to pay interest on sai p ' n al sum (computed on the basis of a 360 -day year of twelve 30 -day months) at the in rest rate per annum. specified above, payable semiannually on January 1 and July 1 of each ear (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. 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 registration books maintained by the Bond Registrar on such Record Date, except that any 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 -5 UNITED STATES OF AMERICA STATE OF GEORGIA AIRPORT DATE: September 01� ,,,) 5 AUGUST $125,000 O V I UE" I ED UGUS GJA--`(the "Consolidated ove en ") a u icipal c rat an d i *unty du y re t nd existing under the laws of th tat o eor i , h y pr miss o ay sol.-ly fr a sources hereinafter described to E CO., re is red assi ns, the p nc sum of FOUR HUNDRED TWENTY -FIVE TH U AN O L m la ful ney of the United States of America, on the date specie a ove, un ess redee4ied thereto as hereinafter provided, upon presentation and -sretider of this S es 20 Bond to U.S. Bank National Association, Atlanta, Georgia, as ynte� an paying nt (the "Bond Registrar" or the "Paying Agent "), and to pay interest on ci al sum (computed on the basis of a 360 -day year of twelve 30 -day months) at the a per annum specified above, payable semiannually on January 1 and July 1 of each 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 2015E 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. 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 registration books maintained by the Bond Registrar on such Record Date, except that any 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 -6 UNITED STATES OF AMERICA STATE OF GEORGIA AIRPORT G ►A11doll-11 DATE: �INTE�1500 S � September �01 ,_, j 5445,000 V4L UE C I ED, G S A G PR tA,<the "Consolidated a icipal co rat n t d o y ul re t d existing under the laws of O i . h v Y)r mis s v sol iv fr m e sources hereinafter described to CEP I CO., r r gis eyed ass ns, the nip l sum of FOUR HUNDRED FORTY -FIVE TH U AN O L in la 1 m ' hey of the United States of America, on the date specie a ove, unless redee ed thereto as hereinafter provided, upon presentation and " erlder of this S � es 20 Bond to U.S. Bank National Association, Atlanta, Georgia, as re is an paying t (the "Bond Registrar" or the "Paying Agent "), and to pay interest on id r' ci al sum (computed on the basis of a 360 -day year of twelve 30 -day months) at the int est a per annum specified above, payable semiannually on January I and July I of each (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 2015E 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 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 registration books maintained by the Band Registrar on such Record Date, except that any 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 -7 UNITED STATES OF STATE OF GEC AUGUSTA, GE AIRPORT GENE V N ] RIES 0 DATE: r l:NTE M T Sevtembor�P , 20 5 5. 0° o the , `GFORiIA (the "Consolidated I c wed and existing under the laws of m the sources hereinafter described to sum of FOUR HUNDRED SEVENTY THOU N DOL S in l wfi ney of the United States of America, on the date ifie above, unle s d prior thereto as hereinafter provided, upon presentation and urr nd r of his Seri B Bond to U.S. Bank National Association, Atlanta, Georgia, as str nd aging agent (the "Bond Registrar" or the "Paying Agent "), and to pay interest on said p 'n i sum (computed on the basis of a 360 -day year of twelve 30 -day months) at the inte st rate per annum specified above, payable semiannually on January i and July 1 of each ar (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 2015E 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 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 "2ecord Date ") at the address shown on the registration books maintained by the Bond Registrar on such Record Date, except that any 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. 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 2015E 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 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 registration books maintained by the Bond Registrar on such Record Date, except that any 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 -9 STATE OF G AIRPORT G AUGUST nb 2 15 I IN 0°Yo ahu� f 027 5 ttate of R E RE V D, U T, �GF0 o nt �6IA (the "Consolidated " m n cipa o do d a c t d ly c ed and existing under the laws of Geor a, her by pro ises o p le the sources hereinafter described to CO, o om r r gi a signs, th pr cipal sum of FIVE HUNDRED FIFTEEN N DOL ARS in 1 hey of the United States of America, on the date 5estr ifi ab e, unle s redee d prior thereto as hereinafter provided, upon presentation and n r of his Seri s B Bond to U.S. Bank National Association, Atlanta, Georgia, as and aying agent (the "Bond Registrar" or the "Paying Agent "), and to pay interest on said n ' sum (computed on the basis of a 360 -day year of twelve 30 -day months) at the inte st rate per annum specified above, payable semiannually on January 1 and July 1 of each ar (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. 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 registration books 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 20158 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 shafl b payable to any registered owner of more than $1,000,000 in aggregate principa o t o th Series 2015B Bonds by deposit of immediately available funds to the acc of u h re ist re owner maintained with the Paying Agent or transmitted by wire trau.% er to such re i tered v mej at an account maintained at a commercial bank located within ffa L ni ed S s of Amer c , i the Paying Agent receives from such registered a tten epo it or ire tr sfe instructions prior to the Record Date preceding a nt rest a m nt D to is th de osi or wire transfer is requested. The principal of th' eri s 15B Bo d is p y bl o o p es tation d ende of this bond at the de 'gnated c rp rat t s f ice f th d e is ar d i g Age t, o its succe e ors, i of or urre cy f he m e t o of eri a wh ch a e time of s i s le al tend r f r public d i to ebts N i g t e for g in so as hi S r es I5 d is registered in the e ., paymen ri cip 1 nd 'n re t on t ' Series 2015E Bond shall be a by r to ede & o. is S s 2 151d sh 11 not a valid or become obligatory for any purpose or be y securi y e it uh4eKthe Bond Resolution (hereinafter described) until this SB Bond st allhav en authenticated and registered upon the registration books kept rid egistr that purpose, which authentication shall be evidenced by the manual of he certificate hereon by the Bond Registrar. This Series 2015B Bond is one of a series of airport general revenue refunding bonds in t e aggregate principal amount of $3,850,000 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 Resolution adopted on September 1, 2015 by the Augusta - Richmond County Commission and 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 Reve ' (particular categories of Revenues which would otherwise be General Revenues b ave ee identified in accordance with the Bond Resolution and therefore do not c it to p f General Revenues, until the Consolidated Government has acted to i e su ate ri s f Revenues within General Revenues again). ",I Concurrently with the Resolution, the Consolidated principal amount of its Airport (the "Series 2015A Bonds "). ' 2015A Bonds by a seni ien Bonds are also secure by a set Series 201.f1�C" Ac o nt. E� c itio s the Cos lid ted C 1pari wi h the -Seri s 201 basis tb 6avnhedt frbnh the Ogr t lie# se ur' Series ?ql5"onds.1 The Se the senliolt lien on Nei General issuance of the S Government is C the 1 ursu t to he Vo 7 ,0 0 grega -ies 201 A (N -AMT) a y w th h Seri s ao The eri s 015 ro i e Ple ge P amnlianc wi certain Inent may (i) ss a a Ud 1 revenue bo s secured on a ii) is p& a dit o 1 e n d s e d on a subordinate ues ec ng he Se 15 Bonds, (iii) issue additional di er t fro th ues securing the Series 2015B b nds ec e b a combination of (i) and (iii) or (ii) and oblig io on a parity with or on a subordinate basis to the l5 onds, the Series 2015A Bonds (with respect only to aes) and additional bonds secured on a parity therewith are Revenue Bonds." Tbe-jXonsolidated Government, acting by and through the Augusta Aviation Commission, has ovenanted and hereby covenants and agrees at all times to prescribe, fix, maintain, and ect rates, fees, and other charges for the services and facilities of the Airport fully sufficient 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 of the Operating Reserve, and (ii) produce an Amount Available to Pay Debt Service in each Fiscal Year 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, for the Bond Year ending on the next January 1 and at least 100 percent of the debt service requirement of all Subordinate Lien Bonds and Other Airport Obligations payable from Net General Revenues and Pledged PFC Revenues, (b) enable the Augusta Aviation Commission to make all payments into any Debt Service Reserve Fund and the Rebate Fund and on Contracts or Other Airport Obligations, and (c) remedy all deficiencies in required payments into any of the funds and accounts mentioned in the Bond Resolution from prior Fiscal Years. Capitalized terms in this paragraph shall have the meanings set forth in the Bond Resolution. 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 GOVERNM TO PAY THIS SERIES 2015B BOND OR THE INTEREST HEREON R T ENFORCE PAYMENT OF THIS SERIES 2015B BOND AGAINST ANY E T1 O THE CONSOLIDATED GOVERNMENT; NOR SHALL THIS ES 158 N CONSTITUTE A CHARGE, LIEN, OR ENCUMBRANC AL OR BL , UPON ANY PROPERTY OF THE CONSOLIDAT G VE , EX EPT O THE NET GENERAL REVENUES AND ANY T ER F ND P E G T EC RE THE PAYMENT OF THE SERIES 2015B B N S. No covenants, stipulati s, ligatio s r a r e n o an ffic , gen , a o ey employee of the Cons ted G vernment o t e Au us vi tin ommiss on sh 11 b deemed to be coven ts, stipu at'ons o ' ati ns oi al ee e s f an officer, e , attorney or p�e I ast res nt, n his indi id al a city. o e nurse shal e h d for the Pa e n t f the Seri s 20 5B Bo s r any claim them o gals ember, r ctor, officer, gent, a o or e mp e o t C nsol dat d Go e ent o Augusta Aviation Comm ss on, p t, resent or fu e person n h se name this erie 2 15 is registered on the registration books kept t e Bon a istr s deeme to the owner of this Series 2015B Bond for all purpos s. TI Serie 20 B n are eing issued by means of a book -entry system, with tual 'es 2015B onds i obilized at The Depository Trust Company, New York, New Yo ecunti D s l tory"), or its successor as Securities Depository, evidencing er i o the Seri s 2015B Bonds in denominations of $5,000 and integral multiples thereof ut o ze Denominations "), and with transfers of beneficial ownership effected on the reco s o the Securities Depository and its participants pursuant to the rules and procedures ablished 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 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 designated 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 2015E 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 and surrender thereof to the Bond Registrar f equal aggregate principal amount of Series 2015B Bonds of the same series, in rat an I o maturity and in any Authorized Denominations in the manner, subject to the ti ns nd p payment of charges, if any, provided in the Bond Resolution. The Series 2015E Bonds are not subject to maturities. The Bond Resolution con provisions securing the Series 2 15 2015B Bond may enforc ve an this Series 2015E B nd when dq achieve Event this S the of the (other t ar the c ve to a p 'nc pal of d i to e f e our e p vi e, th igh f rce wh c s st V ich addi on 1 r v ue b ds y be issu n panty or O15B Bo d d r t Bo R s lution, t o conditions be amended r u em n ed a occurrence of an sol do , the o f h' eves 20158 Bond shall be e n R soi tin a Revenue Bond Law. It is hereb ce ifi d, r to ,and de lard -tfat all acts, conditions, and things required by the C n itu ' and th aws of he S to of Georgia to exist, happen, and be performed reced I to and in he iss e o is Series 2015E Bond and the adoption of the Bond Re olu n d exist, 1 ave ened, and have been performed in due time, form, and manner as IN WITNESS WHEREOF, the Consolidated Government has caused this Series 2015B Bond to be executed by the manual 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 signature of its Clerk, as of September 24, 2015. SEAL �.s'q�Rq =.� ; +.,�TMhC4sM1'rj r% :r- 40 t f i t rte: Am �i� ' :I \ Attest: r AUGUSTA, GEORGIA '�D B q Mayor, CERTIFICATE OF AUTHENTICATION Date of Authentication: September 24, 2015 This bond is one of the Series 2015B Bonds described herein. U.S. BANK NATIONAL ASSOCIATION, as Bond Registrar By: J� 4 ��5- ?�� Authorized Signatory 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 21, 201 at no intervention or objection was filed opposing the validation of this Bond an" sTur ty therefor, and that no appeal of such judgment of validation has been taken./''l Witness my (facsimile) signature and seal of the up�IC�urtof Georgia. , .ly�Q�tOR C OG9. i Y ' IV 1 •'f S Y 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 the within bond and all rights thereunder, hereby constituting attorney to transfer this Bond on the b nd n Registrar, with full power otsab�stitqfion in Signature e ' le aranto A th rity (su as b s, L,,1Notice: The signature(s) on this assignment stock o ers, s ings and s tation and must correspond with the name as it appears credit n ons with m mbership in roved on the face of the within bond in every = �uarante Me ion Program particular without alterations, enlargement or pur u t o E.C. R d -15. any change whatsoever. l� y Blanket Issuer Letter of Representations (To be Completed by i ssuer) Augusta, Georgia (Name of Inuarj Attention: Underwriting Department =- Eligibility The Depository Trust Company 33 Water Street, 30th Floor New York, NY 10041 -0099 Ladies and Gentlemen: This Letter sets forth our understanding with respect-to all issues (the. " Securitim - ) - that Issuer shall request be made eligible for deposit. by The Depository Trust Company ( "DTC"). To induce DTC to accept the Securities as eligible for deposit at DTC, and to act in accordance with DTO Riles with respect to the Securities, Issuer represents to DTC that Issuer will comply with the requirements stated in DTC's Opera#onal Arrangements, as they may be amended from time to time. Not) Very truly yours. Schedule A contains statement$ that DTC believes sec describe, DTC. the method of effe entry truden of sec tdo dist:*ubsd dwaug#► OM and Augu G .orgia c'ertel7° reused mattem (UFU r) Bob Young, May , Augu to ichmond Recet and county commis ` l7 Name & ! THE DEPOSI'I�ORY OMPANY 454 Greene Street (Sava 13 ...........� Augusta, GA 30903 tai ( Sum) t7i�r! 7061821 -2488 tPbme SCHEDULE A SAMPLE OFFERING DOCUMENT LANGUAGE DESCRIBING BOOK-ENTRY-ONLY ISSUANCE (Prepared by DTC— bracketed material may be applicable only to certain issues) 1. The Depository Trust Company. ( "DTC "), New York NY, will act as securities depository for the securities (the "Securities "). The Securities will be issued as fully - registered securities registered in the name of Cede & Co. (DTC's partnership nominee). One fully- registered Security certificate will be issued for [each issue of] the Securities, [each] in the aggregate principal amount of-such issue, and will be deposited with DTC. [If, however, the aggregate principal amount of [any] issue exceeds 5200. million, one certificate will be issued with respect to each $200 million of principal amount and an additional certificate will be issued with respect to any remaining principal amount of such issue.] 2 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 securities that its participants (" Participants ") deposit with DTC. DTC also facilitates the settlement among Participants of securities transactions, such as transfers and pledges, in deposited securities through electronic computerized book -entry changes in Participants' accounts, thereby eliminating the need for physical movement of securities certificates. Direct Participants.include securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is owned by a number of its Direct Participants and by the New York Stock Exchange, Inc.. the American Stock Exchange, Inc., and the National Association of Securities Dealers, Inc. Access to the DTC system is also available to others such as securities brokers and dealers, banks, and trust companies that clear through or maintain a custodial reladoruhip with a Direct Pardeipant, either directly or indir>rctly ( "indirect Participants"). The Rules applicable to DTC and its Participants are on file with the Securities and Exchan Commission. 3. purchases of Securities under the DTC system must be made by or through Direct Participants, which will receive a credit for the Securities on DTC's reoar& The ownership interest-of each actual purchaser of each Security ("Beae&W Owner ") is to tam to be recorded on the Direct and Indirect Participants' records. Beneficial Owners will not receive written confirmatbn from DTC of their purchase, but Beneficial Owners are expected to receive written confirmations providing details of the transa tiao, as well as periodic statements of their holdings: from the Direct or Indirect Participant through which the Beneficial Owner entered into die transaction. Transfers of ownership interests in the Securities are to be accomplished by entries made on the books of Part9dpanti acting on behalf of B Owners. Beneficial Ownen will not receive cemf1cates reprreaemting their ownership interests in Securities, except to the event that use of the book -entry system for the Securities a distmntinued. 4. To facilitate subsequent transfers, an Securities deposited by Putictpanb with DTC am registered in the name of DTC's partnership nominee, Cede do Co. The deposit of Secsnities with DTC and their registration in the name of Cede & Co. effect no change in beneficial ownership: DTC has no knowledge of the actual Beneficial Owners of the Secu itiex DTCs records reflect only the' identity of the Direct Participants to whose accounts such Securities acre credited, which may or may not be the Bene&W Owners. The Participants will remaam respormble for keeping axount of their holdings on behalf of their customers: 3. 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. (6. Redemption notices shall be sent to Cede & Co. If less than all of the Securities within an issue are being redeemed, DTC's practice is 'to determine by lot the amount of the interest of each Direct Participant in such issue to be redeemed] 7. Neither DTC nor Cede 8c Co. will consent or vote with respect to Securities, Under its usual procedures. DTC mails an Omnibus Proxy to the Issuer 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 Securities are credited on the record date (identified in a listing attached to the Omnibus Proxy). S. Principal and interest payments on the Securities will be made to DTC. DTCS practice is to credit Direct Participants' accounts on payable dace in accordance with their rtgwtive holdings shown on DTC's records unless DTC has reason to believe that it will not receive payment on payable date. Payments by Participants to Beneficial Owners will be governed by standing instructions and custonuuy practices, as is the case with securities held for the' accounts of customers in bearer form, or registered in "suet name," and will be the responsibility of such Participant and not of DTC, the Agent, or the Issuer, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of principal and interest to DTC is the responsibility of the Issuer or the Agent, disbursement of such payments to Direct Participants shall be the responsibility of DTC,' and disbursement of such payments to the Beneficial Owners shall be the responsibility of Direct and Indirect Participants. (8. A Beneficial Owner shall give notice to elect to have its Securities purchased or tendered, through its Participant, to the (TendedRemarketing] Agent, and-shall effect delivery of such Securities by causing the Direct Participant to transfer the Partic:ipanes interest in the Securities, on DTCs records, to the ( Tender /Remarketing) Agent Mw requirement for physical delivery of Securities its eoanectioo with a demand for purchase or a mandatory purchase will be deemed satisfied when the ownership rights in *the Securities are traasfenvd by Dftw Participants on DTC's recordLI 10. DTC may discourse prvviding its servkvs as securities depository with respect to the Securities at any time by giving reasonable notice to the Wuer or the Agent: Under such circumstances, in the event that a suer securities depository is not obtained, Sec=ity certificates are required to be printed and de*me& 11. The Imn er may deckle to discontinue use of the system of book -entry transfers through DTC for a succem"sec ritZa depository). In that event, Security certificates will be painted and dehvm:ed. 1L The information in this section concerning DTC and DTC's book -entry system has been obtained from sources that the Issuer believes to be reliable, but the Issuer takes no responsibility for the accuracy thereof: EXECUTION, SIGNATURE, NO- LITIGATION AND OFFICERS' CERTIFICATE OF THE CONSOLIDATED GOVERNMENT The undersigned Mayor and Clerk of Augusta, Georgia, a public body corporate and politic of the State of Georgia (the "Consolidated Government ") duly created and validly existing pursuant to Article IX, Section III, Paragraph II(a) of the Constitution of the State of Georgia and an act of the General Assembly of the State of Georgia (Georgia Laws 1995, p. 3648 et seq., as amended (the "Act ")), DO HEREBY CERTIFY that we have the authority to execute this Certificate and that we have caused to be executed on behalf of the Consolidated Government the Augusta, Georgia Airport General Revenue Refunding Bonds, Series 2015A (Non -AMT) (the "Series 2015A Bonds ") in the aggregate principal amount of $6,675,000 and the Augusta, Georgia Airport General Revenue Refunding Bonds, Series 2015B (AMT) (the "Series 2015B Bonds" and together with the Series 2015A Bonds, the "Series 2015 Bonds ") in the aggregate principal amount of $3,850,000. The Series 2015 Bonds shall be dated, mature, bear interest, be subject to redemption prior to maturity and be payable as set forth in the Master Bond Resolution adopted by the Augusta - Richmond County Commission (the "Commission ") and by the Augusta Aviation Commission (the "Aviation Commission ") on September 1, 2015 (the "Bond Resolution "). The Series 2015 Bonds are being delivered and registered in accordance with the instructions of Raymond James & Associates, Inc., as underwriter (the "Underwriter "). Capitalized terms used but not defined herein shall have the meanings assigned to them in the Bond Resolution. All of the Series 2015 Bonds bear the manual signature of said Mayor and the corporate seal of the Consolidated Government has been impressed thereon and attested by the manual signature of the Clerk of the Commission. THE UNDERSIGNED DO FURTHER CERTIFY, as follows: 1. The Consolidated Government is properly created, organized and existing under the Constitution and laws of the State of Georgia, including the Act, and has full legal right, power and authority to (i) adopt the Bond Resolution authorizing, among other things, the issuance of the Series 2015 Bonds; (ii) issue, execute, deliver and perform its obligations under the Series 2015 Bonds; (iii) execute, deliver and perform its obligations under the Bond Resolution, a Bond Purchase Agreement, dated September 1, 2015 (the "Bond Purchase Agreement "), between the Underwriter and the Consolidated Government, the Continuing Disclosure Certificate of the Consolidated Government, dated September 1, 2015 (the "Disclosure Certificate "), the First Amendment to Airline Operating Agreement and Terminal Building Lease dated September 24, 2015 (the "Delta Amendment "), between the Consolidated Government and Delta Air Lines, Inc. the First Amendment to Airline Operating Agreement and Terminal Building Lease dated September 24, 2015 (the "American Airlines Amendment "), between the Consolidated Government and American Airlines, Inc., as successor to U.S. Airways, Inc.; (iv) execute and authorize the use of the Official Statement, dated September 1, 2015 (the "Official Statement ") relating to the Series 2015 Bonds; (v) refund the Refunded Bonds; and (v) carry out the transactions contemplated by the foregoing documents. 2. The Bond Resolution has been duly adopted by the Commission and constitutes the legal, valid and binding obligation of the Consolidated Government. The Bond Resolution remains in full force and effect as of the date hereof and has not been amended, modified, revoked or rescinded. The Prior Resolution is no longer in effect. 3. The Commission has authorized the issuance, execution, delivery and performance of its obligations under the Series 2015 Bonds, The Series 2015 Bonds have been duly executed and constitute the legal, valid and binding limited obligations of the Consolidated Government. The Commission has authorized the (a) execution, delivery and performance of its obligations under the Bond Purchase Agreement, the Disclosure Certificate, the Delta Amendment and the American Airlines Amendment, (b) execution and delivery of the Official Statement, (c) refunding of the Refunded Bonds and (d) carrying out of the transactions contemplated by the Bond Purchase Agreement, the Disclosure Certificate, the Delta Amendment and the American Airlines Amendment. The Bond Purchase Agreement, the Disclosure Certificate, the Delta Amendment and the American Airlines Amendment have been duly executed and constitute the legal, valid and binding obligations of the Commission. 4. The Commission has approved the execution and use of the Official Statement and has ratified the preparation and use of the Preliminary Official Statement, dated August 25, 2015 (the "Preliminary Official Statement "), with respect to the Series 2015 Bonds. The information in the Preliminary Official Statement and the Official Statement is true, complete and correct in all material respects as of the date hereof, and the Preliminary Official Statement and the Official Statement do not contain any untrue statement of a material fact or omit to state any material fact which should be included therein for the purpose for which the Preliminary Official Statement and the Official Statement were or are to be used, or which is necessary in order to make the statements contained therein, in light of the circumstances under which they were made, not misleading. No event affecting the Consolidated Government or the Airport has occurred since the date of the Official Statement which should be disclosed in the Official Statement for the purposes for which it is to be used or which it is necessary to disclose therein in order to make the statements and information therein not misleading in any material respect. 5. The Consolidated Government has complied with all of the agreements and satisfied all conditions on its part required to be performed or satisfied under the Bond Resolution at or prior to the date hereof. No Zvent of default or event which with notice or lapse of time or both would become an event of default under the Bond Resolution has occurred and is continuing. The Series 2015 Bonds, the Bond Purchase Agreement and the Disclosure Certificate, as executed by the Consolidated Government, are in the form or in substantially the form approved in the Bond Resolution. 6. There is no action, suit, proceeding, controversy or litigation of any nature pending or, to the best of our knowledge threatened, before or by any court, public board or body (a) in any way attempting to limit, enjoin or otherwise prevent or restrict the Consolidated Government from (i) issuing the Series 2015 Bonds or (ii) functioning, (b) contesting or questioning the existence of the Consolidated Government or the titles of the officers of the Consolidated Government to their offices, or (c) wherein an unfavorable decision, ruling or 2 finding would (i) adversely affect the tax - exempt status of the Series 2015 Bonds or the enforceability of the Bond Resolution, the Bond Purchase Agreement, the Delta Amendment, the American Airlines Amendment or any agreement or instrument to which the Consolidated Government is a party and which is used or contemplated for use in the consummation of the transactions contemplated by the Bond Resolution, the Bond Purchase Agreement, the Delta Amendment, the American Airlines Amendment and the Official Statement or (ii) materially adversely affect (A) the financial condition of the Airport, (B) the powers of the Consolidated Government, (C) the security for the Series 2015 Bonds or (D) the transactions contemplated by the Bond Resolution, the Bond Purchase Agreement and the Official Statement. 7. There has not been any material adverse change in the properties, financial position or results of operations of the Airport, whether or not arising from transactions in the ordinary course of business, other than as set forth in the Official Statement. The Series 2015 Bonds are secured by a senior lien on Net General Revenues of the Airport and by a senior lien on Pledged PFC Revenues on deposit in the Pledged PFC Series 2015 Account (as such terms are defined in the Bond Resolution). The Series 2015B Bonds are secured by a senior lien on the Net General Revenues of the Airport on a parity as to such lien with the Series 2015A Bonds. 8. The Consolidated Government is not in breach of or in default under any constitutional provision, statute, indenture, mortgage, lease, resolution, note agreement or other agreement or instrument to which the Consolidated Government is a party or by which or any of its property is bound or order, rule or regulation of any court or governmental agency or body having jurisdiction over the Consolidated Government or any of its properties, which breach or default would in any way materially adversely affect the adoption of the Bond Resolution and the performance of its obligations thereunder the issuance, execution, delivery and performance of the Series 2015 Bonds, the execution, delivery and performance of its obligations under the Bond Purchase Agreement, the Disclosure Certificate, the Delta Amendment and the American Airlines Amendment, the execution and use of the Official Statement, the refunding of the Refunded Bonds and carrying out the transactions contemplated on its part by the Bond Resolution, the Bond Purchase Agreement, the Disclosure Certificate and the Official Statement. No event has occurred and is continuing which, with the passage of time or the giving of notice or both, would constitute such a breach or default 9. All consents, governmental or otherwise, required to be obtained prior to the date hereof in connection with the adoption of the Bond Resolution and the performance of its obligations thereunder, the issuance, execution, delivery and performance of the Series 2015 Bonds, the execution, delivery and performance of its obligations under the Bond Purchase Agreement, the Disclosure Certificate, the Delta Amendment and the American Airlines Amendment, the execution and use of the Official Statement, the refunding of the Refunded Bonds and carrying out the transactions contemplated on its part by the Bond Resolution, the Bond Purchase Agreement, the Disclosure Certificate and the Official Statement have been obtained and remain in full force and effect; except that no representation is made as to compliance with any applicable state securities or "blue sky" laws. 10. The adoption of the Bond Resolution, the issuance, execution, delivery and performance of its obligations under the Series 2015 Bonds, the execution, delivery and 3 performance of its obligations under the Bond Purchase Agreement, the Disclosure Certificate, the Delta Amendment and the American Airlines Amendment, the execution and use of the Official Statement, the refunding of the Refunded Bonds and carrying out the transactions contemplated on its part by the Bond Resolution, the Bond Purchase Agreement, the Disclosure Certificate and the Official Statement do not and will not in any material respect conflict with or constitute on the part of the Consolidated Government a violation of, breach of or default under any constitutional provision, statute, indenture, mortgage, lease, resolution, note agreement or other agreement or instrument to which the Consolidated Government is a party or by which or any of its property is bound or order, rule or regulation of any court or governmental agency or body having jurisdiction over the Consolidated Government or any of its properties. 11. Except for the pledge of the Net General Revenues of the Airport securing the Series 2015 Bonds and the pledge of Pledged PFC Revenues on deposit in the Pledged PFC Series 2015 Account securing the Series 2015A Bonds, there exists no lien or charge on the Net General Revenues of the Airport or the Pledged PFC Revenues. 12. Since December 31, 2014, and as of the date hereof, no material adverse change has occurred in the financial position of the Airport or results of operations of the Airport, and since December 31, 2014, and as of the date hereof, there have been no material liabilities incurred with respect to the Airport other than in the ordinary course of business, except as set forth in or contemplated by the Official Statement or as reported by Mauldin & Jenkins Certified Public Accountants, LLC, auditors for the Consolidated Government. 13. Upon the issuance of the Series 2015 Bonds and the application of the proceeds of the Series 2015 Bonds to the payment of the Airport Passenger Facility Charge and General Revenue Bonds, Series 2005A (Non -AMT) outstanding in the aggregate principal amount of $8,990,000 (the "Series 2005A Bonds ") and the Airport General Revenue Bonds, Series 2005C (AMT) outstanding in the aggregate principal amount of $6,090,000 (the "Series 2005C Bonds" and, together with the Series 2005A Bonds, the "Series 2005 Bonds "), the Series 2005 Bonds will no longer be outstanding under the Prior Resolution. 14. We have reviewed the information contained in the Information Return for Tax Exempt Governmental Bond Issues, I.R.S. Form 8038 -G with respect to the Series 2015A Bonds, dated the date of this Certificate, being filed with the Internal Revenue Service Center, Ogden, Utah 84201, pursuant to Section 149(e) of the Code, and, to the best of our knowledge, the information set forth therein is true and correct. We have reviewed the information contained in the Information Return for Tax Exempt Private Activity Bond Issues, I.R.S. Form 8038 with respect to the Series 2015B Bonds, dated the date of this Certificate, being filed with the Internal Revenue Service Center, Ogden, Utah 84201, pursuant to Section 149(e) of the Code, and, to the best of our knowledge, the information set forth therein is true and correct. 15. The representations and warranties of the Consolidated Government contained in the Bond Purchase Agreement are true and correct in all material respects on and as of the date hereof with the same effect as if made on the date hereof. 4 WITNESS our hands, this 24th day of September, 2015. AUGUSTA, GEORGIA By:_ Mayor By I Clerk, Augigia-Vichmond County Commission (Execution, Signature, No-Litigation and Officers' Certificate of the Consolidated Government) GEORGIA, RICHMOND COUNTY. The undersigned Clerk of the Superior Court of Richmond County, DOES HEREBY CERTIFY that I have executed and sealed the certificate of validation endorsed upon each of the above described Series 2015 Bonds and have authorized the reproduction of a facsimile of the seal of said Superior Court thereon; and I DO FURTHER CERTIFY that in the matter of the proceeding to validate said Bonds, in the case of State of Georgia v. Augusta, Georgia Civil Action File No. 2015 -RCCV -00457 in the Superior Court of Richmond County, there were no proceedings had or papers filed other than the petition and complaint, rule nisi, acknowledgments of service, answer and judgment of validation; that no person intervened or in any way became a party to said proceeding other than the parties named above; that the judgment of validation was entered on September 21, 2015; and that no exception, intervention or objection to said judgment or appeal therefrom or filing of extension of appeal has been taken. WITNESS my hand and the seal of said Court, this 1st day of September, 2015. • g`s4�A1oR Coe; (SEAL) I • t11 • i� a 9i c iti C� � •• 'D �DU�' ''•.•... Clerk, Superior Cou&6 Richmond County, I HEREBY CERTIFY that the signature of the Clerk of the Superior Court of Richmond County, Georgia above subscribed is true and genuine. EXECUTION, SIGNATURE, NO- LITIGATION AND OFFICERS' CERTIFICATE OF THE AUGUSTA AVIATION COMMISSION The undersigned Chairman of the Augusta Aviation Commission, an agency of Augusta, Georgia (the "Aviation Commission ") and the Clerk of the Augusta - Richmond County Commission (the "Commission "), DO HEREBY CERTIFY that they have the authority to execute this Certificate and that they have caused to be executed on behalf of the Aviation Commission the Augusta, Georgia Airport General Revenue Refunding Bonds, Series 2015A (Non -AMT) (the "Series 2015A Bonds ") in the aggregate principal amount of $6,675,000 and the Augusta, Georgia Airport General Revenue Refunding Bonds, Series 2015B (AMT) (the "Series 2015B Bonds" and together with the Series 2015A Bonds, the "Series 2015 Bonds ") in the aggregate principal amount of $3,850,000. The Series 2015 Bonds shall be dated, mature, bear interest, be subject to redemption prior to maturity and be payable as set forth in the Master Bond Resolution adopted by the Commission and the Aviation Commission on September 1, 2015 (the "Bond Resolution "). Capitalized terms used but not defined herein shall have the meanings assigned to them in the Bond Resolution. All of the Series 2015 Bonds bear the manual signature of said Chairman and the corporate seal of the Aviation Commission has been impressed thereon and attested by the manual signature of the Clerk of the Commission. THE UNDERSIGNED DO FURTHER CERTIFY, as follows: 1. The Aviation Commission is an agency of Augusta, Georgia and has full legal right, power and authority to (i) adopt the Bond Resolution; (ii) execute, deliver and perform its obligations under the Bond Resolution; (iii) execute and authorize the use of the Official Statement, dated September 1, 2015 (the "Official Statement ") relating to the Series 2015 Bonds and (iv) carry out the transactions contemplated by the foregoing documents. 2. The Bond Resolution has been duly adopted by the Aviation Commission and constitutes the legal, valid and binding obligation of the Aviation Commission. The Bond Resolution remains in full force and effect as of the date hereof and has not been amended, modified, revoked or rescinded. The Prior Resolution is no longer in effect. 3. The Aviation Commission has authorized the execution of the Series 2015 Bonds by the Chairman of the Aviation Commission and the Clerk of the Commission, and the Series 2015 Bonds have been duly executed by the signatures of the Chairman of the Aviation Commission and the Clerk of the Commission. 4. The Aviation Commission has approved the execution and use of the Official Statement and has ratified the preparation and use of the Preliminary Official Statement, dated August 25, 2015 (the "Preliminary Official Statement "), with respect to the Series 2015 Bonds. The information in the Preliminary Official Statement and the Official Statement is true, complete and correct in all material respects as of the date hereof, and the Preliminary Official Statement and the Official Statement do not contain any untrue statement of a material fact or omit to state any material fact which should be included therein for the purpose for which the i� Preliminary Official Statement and the Official Statement were or are to be used, or which is necessary in order to make the statements contained therein, in light of the circumstances under which they were made, not misleading. No event affecting the Airport has occurred since the date of the Official Statement which should be disclosed in the Official Statement for the purposes for which it is to be used or which it is necessary to disclose therein in order to make the statements and information therein not misleading in any material respect. 5. There is no action, suit, proceeding, controversy or litigation of any nature pending or, to the best of our knowledge threatened, before or by any court, public board or body (a) in any way attempting to limit, enjoin or otherwise prevent or restrict the Aviation Commission from (i) executing the Series 2015 Bonds or (ii) functioning, (b) contesting or questioning the existence of the Aviation Commission or the titles of the officers of the Aviation Commission to their offices, or (c) wherein an unfavorable decision, ruling or finding would (i) adversely affect the tax - exempt status of the Series 2015 Bonds or the enforceability of the Bond Resolution or any agreement or instrument to which the Aviation Commission is a party and which is used or contemplated for use in the consummation of the transactions contemplated by the Bond Resolution and the Official Statement or (ii) materially adversely affect (A) the financial condition of the Airport, (B) the powers of the Aviation Commission, (C) the security for the Series 2015 Bonds or (D) the transactions contemplated by the Bond Resolution, and the Official Statement. 6. There has not been any material adverse change in the properties, financial position or results of operations of the Airport, whether or not arising from transactions in the ordinary course of business, other than as set forth in the Official Statement. 7. All consents, governmental or otherwise, required to be obtained prior to the date hereof in connection with the adoption of the Bond Resolution and the performance of its obligations thereunder and the execution and use of the Official Statement have been obtained; except that no representation is made as to compliance with any applicable state securities or "blue sky" laws. 8. The adoption of the Bond Resolution, the execution, delivery and performance of the Series 2015 Bonds and the execution and use of the Official Statement do not and will not in any material respect conflict with or constitute on the part of the Aviation Commission a breach of or a default under any agreement or instrument to which the Aviation Commission is a party or any law, public administrative rule or regulation, court order or consent decree to which the Aviation Commission is subject. 9. Since December 31, 2014, and as of the date hereof, no material adverse change has occurred in the financial position of the Airport or results of operations of the Airport, and since December 31, 2014, and as of the date hereof, there have been no material liabilities incurred with respect to the Airport other than in the ordinary course of business, except as set forth in or contemplated by the Official Statement or as reported by Mauldin & Jenkins Certified Public Accountants, LLC, auditors for the Consolidated Government. 3 WITNESS our hands, this 24th day of September, 2015. AUGUSTA AVIATION COMMISSION B K 7 Chairman wy� � (Execution, Signature, No- Litigation and Officers' Certificate of the Augusta Aviation Commission) RECEIPT OF BOND PROCEEDS The undersigned Mayor of Augusta, Georgia and Chairman of the Augusta Aviation Commission acknowledge payment in full from Raymond James & Associates, Inc., the underwriter of the $6,675,000 aggregate principal amount of Augusta, Georgia Airport General Revenue Refunding Bonds, Series 2015A (Non -AMT) (the "Series 2015A Bonds ") and $3,850,000 aggregate principal amount of Augusta, Georgia Airport General Revenue Refunding Bonds, Series 2015B (AMT) (the "Series 2015B Bonds" and together with the Series 2015A Bonds, the "Series 2015 Bonds "), the sum so received for said Series 2015 Bonds being: Original Issue Less Underwriter's Series Principal Amount Premium Discount Total Proceeds 2015A $ 6,675,000 $586,229.80 $58,188.16 $ 7,203,041.64 2015B 3,850,000 362,595.15 33,561.72 4,179,033.43 Total $10,525,000 1948,824.95 41 4 $$ 11,382.075.07 WITNESS my hand, this 24th day of September, 2015. AUGUSTA, GEORGIA B Mayor (Receipt of Bond Proceeds) (Receipt of Bond Proceeds) AUTHENTICATION ORDER U.S. Bank National Association Atlanta, Georgia Re: $6,675,000 Augusta, Georgia Airport General Revenue Refunding Bonds, Series 2015A (Non -AMT) and $3,850,000 Augusta, Georgia Airport General Revenue Refunding Bonds, Series 2015B (AMT) To the Addressee: Augusta, Georgia (the "Consolidated Government ") has sold the Augusta, Georgia Airport General Revenue Refunding Bonds, Series 2015A (Non -AMT) (the "Series 2015A Bonds ") and the Augusta, Georgia Airport General Revenue Refunding Bonds, Series 2015E (AMT) (the "Series 2015E Bonds" and together with the Series 2015A Bonds, the "Series 2015 Bonds ") in caption, which are more fully described in the Master Bond Resolution of the Consolidated Government adopted on September 1, 2015 (the "Bond Resolution "), to Raymond James & Associates, Inc. (the "Underwriter "), (a) with respect to the Series 2015A Bonds, for the sum of $7,203,041.64 (equal to par of $6,675,000.00 plus original issue premium of $586,229.80 and less Underwriter's discount of $58,188.16) and (b) with respect to the Series 2015B Bonds, for the sum of $4,179,033.43 (equal to par plus original issue premium of $362,595.15 less Underwriter's discount of $33,561.72). The Consolidated Government has heretofore delivered the Bonds to you as Bond Registrar. You are hereby authorized and directed to authenticate and register the Series 2015 Bonds in the name of Cede & Co., as nominee for The Depository Trust Company ( "DTC ") and to hold the Series 2015 Bonds on behalf of DTC. You are hereby further directed to apply the proceeds of the Series 2015 Bonds as set forth below: (a) The net proceeds from the sale of the Series 2015A Bonds in the amount of $7,203,041.64, shall be applied as follows: (i) $6,943,600.06 shall be transferred to U.S. Bank National Association as the paying agent for the Refunded Bonds (as defined in the Bond Resolution)for deposit in the 2005 Defeasance Account and applied to refund the Refunded 2005A Bonds; and (ii) the balance ($259,441.58) shall be deposited into the Costs of Issuance Fund to pay the costs of issuance for the Series 2015A Bonds. (b) The net proceeds from the sale of the Series 2015B Bonds in the amount of $4,179,033.43 shall be applied as follows: (i) $4,133,684.63 shall be transferred to the 2005 Paying Agent for deposit in the 2005 Defeasance Account and applied to refund the Refunded 2005B Bonds (as defined in the Bond Resolution); (ii) $43,438.23 shall be deposited into the Costs of Issuance Fund to pay the costs of issuance for the Series 2015E Bonds; and (iii) the balance ($1,910.57) shall be deposited into the 2015B Subaccount of the Interest Account of the Debt Service Fund. P1 Witness my hand, this 24th day of September, 2015. AUGUSTA, GEORGIA A By:�c.� M or (Authentication Order) INCUMBENCY CERTIFICATE OF THE CONSOLIDATED GOVERNMENT The undersigned Clerk of the Augusta - Richmond County Commission (the "Commission "), on behalf of Augusta, Georgia (the "Consolidated Government "), DOES HEREBY CERTIFY, as follows: 1. I am the duly appointed Clerk of Commission of the Consolidated Government and have the authority to execute this Certificate. 2. The Consolidated Government is a public body corporate and politic duly created and existing pursuant to the provisions of Article IX, Section III, Paragraph II(a) of the Constitution of the State of Georgia and an act of the General Assembly of the State of Georgia (Georgia Laws 1995, p. 3648 et seq., as amended (the "Act "). 3. The Commission is composed of a mayor and ten commissioners elected pursuant to the terms of the Act. The names of the present members of the Commission and the dates of the ending of their respective terms of office are, as follows: Name Expiration of Term Hardie Davis, Jr., Mayor December 31, 2018 Grady Smith, Mayor Pro - Tempore December 31, 2018 William Fennoy December 31, 2016 Dennis Williams December 31, 2018 Mary Davis December 31, 2016 Sammy Sias December 31, 2018 Bill Lockett December 31, 2016 Ben Hasan December 31, 2018 Sean Frantom December 31, 2016 Wayne Guilfoyle December 31, 2018 Marion Williams December 31, 2016 4. All of the foregoing members have duly filed their oaths of office, and each of them legally required to give bond or undertaking has filed such bond or undertaking in form and amount as required by law. 5. The official seal of the Consolidated Government, being the only seal used by the Consolidated Government in the execution of contracts and other instruments, is the seal affixed opposite my signature hereto. 6. Each of the below -named persons has been duly elected or appointed and this day holds the office set opposite his or her name, and the signature below is his or her genuine signature. Name Office Signature Hardie Davis, Jr. Mayor ' 1j J yel Donna B. Williams Finance Director rc+rn�v Timothy E. Schroer Assistant Director of Finance f-- WITNESS my hand and the seal of the Consolidated Government, this 24th day +�' Z Q erk, Augus cliinond County Commission WCERTIF'r that the signature of the Clerk of the Augusta - Richmond Commission above subscribed is true and genuine. Counse , Geo gia (Incumbency Certificate of the Consolidated Government) INCUMBENCY CERTIFICATE OF THE AUGUSTA AVIATION COMMISSION The undersigned Clerk of the Augusta - Richmond County Commission (the "Commission "), as the authorized attesting officer of the Augusta Aviation Commission (the "Aviation Commission "), DOES HEREBY CERTIFY, as follows: 1. I am the duly appointed attesting officer of the Aviation Commission and have the authority to execute this Certificate. 2. The Aviation Commission is an agency of Augusta, Georgia (the "Consolidated Government ") established by ordinance of the Consolidated Government, The Aviation Commission manages and operates the Augusta Regional Airport at Bush Field. 3. The Aviation Commission is composed of twelve members and one ex- officio member. The names of the present members of the Aviation Commission and the dates of the ending of their respective terms of office are, as follows: Name Cedric J. Johnson, Chairman Randy Sasser, Vice Chairman Davis H. Beman' Frank Bowman Paulette Curry' James Germany Charles July Rev. Karlton Howard Doug Lively' Willa Hilton Grey B. Murray Rosa L. Thomas Sammie Sias Expiration of Term March 31, 2018 March 31, 2017 March 31, 2015 March 31, 2019 March 31, 2013 March 31, 2017 March 31, 2017 March 31, 2018 March 31, 2015 March 31, 2019 March 31, 2017 March 31, 2019 Ex- Officio I . Serving until successor is appointed. 4. All of the foregoing members have duly filed their oaths of office, and each of them legally required to give bond or undertaking has filed such bond or undertaking in form and amount as required by law. 5. The official seal of the Aviation Commission, being the only seal used by the Aviation Commission in the execution of contracts and other instruments, is the seal affixed opposite my signature hereto. 2 6. Each of the below -named persons has been duly elected or appointed and this day holds the office set opposite his or her name, and the signature below is his or her genuine signature. Name Office Signature Cedric J. Johnson Randy Sasser Roy A. Williams Risa Akiyoma Bingham WITNESS Chairman 1 Vice Chairman Executive Director Director of Finance ✓ han and the seal of the Aviation Commission, this 24th day of Ar • • • Z , � erk, August c and County Commission NPEORCA "',0" %% 4vp' R' I REBY CERTIFY. that the signature of the Clerk of the Augusta - Richmond Comm above subscribed is true and genuine. L_ Omw_� Couns fo r is (Incumbency Certificate of the Aviation Commission) TAX AND NON - ARBITRAGE CERTIFICATE The undersigned Mayor of the Augusta - Richmond County Commission (the "Commission") of Augusta, Georgia (the "Consolidated Government ") and the Executive Director and Director of Finance of Augusta Regional Airport at Bush Field (the "Airport "), in connection with the issuance and delivery by the Consolidated Government of $6,675,000 aggregate principal amount of Airport General Revenue Refunding Bonds, Series 2015A (Non - AMT) (the "Series 2015A Bonds "), and $3,850,000 aggregate principal amount of Airport General Revenue Refunding Bonds, Series 2015B (AMT) (the "Series 2015B Bonds "; the Series 2015A Bonds and the Series 2015B Bonds are collectively referred to as the "Bonds "), DO HEREBY CERTIFY AND REASONABLY EXPECT that on the basis of facts, estimates and circumstances in existence the following will occur with respect to the proceeds derived from the sale of the Bonds: 1. General. 1.1. We are familiar with the Bonds being issued and sold by the Consolidated Government pursuant to a master bond resolution adopted by the Commission and the Augusta Aviation Commission (the "Aviation Commission') on September 1, 2015 (the "Bond Resolution'). 1.2. The proceeds of the Series 2015A Bonds, together with other available funds described in paragraph 3.2, will be used for the purpose of (i) currently refunding the outstanding Augusta, Georgia Airport Passenger Facility Charge and General Revenue Bonds, Series 2005A (Non -AMT) (the "Series 2005A Bonds "), now outstanding in the aggregate principal amount of $8,990,000 (the "Refunded 2005A Bonds ") and (ii) paying the costs of issuance of the Series 2015A Bonds. The proceeds of the Series 2015B Bonds, together with other available funds described in paragraph 3.2, will be used for the purpose of (i) currently refunding the outstanding Augusta, Georgia Airport General Revenue Bonds, Series 2005C (AMT) (the "Series 2005C Bonds" and together with the Series 2005A Bonds, the "Series 2005 Bonds "), now 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 (ii) paying the costs of issuance of the Series 2015E Bonds. 1.3. The Series 2005 Bonds were issued by the Consolidated Government on March 3, 2005 pursuant to a Master Bond Resolution adopted by the Commission on February 1, 2005 and by the Aviation Commission on January 20, 2005, as supplemented by the First Supplemental Bond Resolution adopted by the Commission on February 1, 2005 and by the Aviation Commission on January 20, 2005 and by the Second Supplemental Bond Resolution adopted by the Commission and by the Aviation Commission on February 17, 2005 (collectively, the "Prior Bond Resolution') to finance improvements to the Airport ( the "2005 Project "), including capitalized interest during the period of construction of the 2005 Project, and to pay a portion of the costs associated with the issuance of the Series 2005 Bonds. Under the Prior Bond Resolution, the Consolidated Government also issued the Augusta, Georgia Airport Passenger Facility Charge and General Revenue Bonds, Series 2005B (AMT) in the original principal amount of $4,415,000 (the "Series 2005B Bonds ") to finance other improvements to the Airport, which Series 2005B Bonds were paid in full on January 1, 2015. The 2005 Project being refinanced with proceeds of the Series 2005A Bonds and the Series 2005C Bonds (the "Refinanced 2005 Project") is more specifically described on Exhibit C and Exhibit D , respectively, attached hereto and made a part hereof. The Series 2015A Bonds (the "Governmental Purpose Bonds ") are refinancing the portion of the Refinanced 2015 Project described on Exhibit D (the "Governmental Purpose Facilities "). The Series 2015B Bonds (the "Private Activity Bonds ") are refinancing the portion of the Refinanced 2005 Project (the "Private Purpose Facilities ") described on Exhibit C. 1.4. In connection with the issuance of the Bonds, the Consolidated Government is applying certain moneys on deposit in the funds and accounts held under the Prior Bond Resolution to the refunding of the Refunded Bonds, as described in paragraph 3.2 hereof. In addition, certain moneys on deposit in the funds and accounts allocable to the Series 2005B Bonds (which were paid in full on January 1, 2015) will be released to the Consolidated Government. 1.5. The Series 2015A Bonds are secured by a senior lien on Net General Revenues of the Airport (as defined in the Bond Resolution) and Pledged PFC Revenues on deposit in the Pledged PFC Series 2015 Account (as defined in the Bond Resolution). The Series 2015E Bonds are secured by a senior lien on the Net General Revenues of the Airport on a parity with such lien securing the Series 2015A Bonds. 1.6. With respect to the Series 2015A Bonds, we have examined a completed copy of the Information Return for Tax - Exempt Governmental Bond Issues (IRS Form 8038 -G) of even date herewith to be filed pursuant to Section 149(e) of the Internal Revenue Code of 1986, as amended (the "Code ") on behalf of the Consolidated Government with the Internal Revenue Service Center, and, to the best of our knowledge, all information therein is true and correct as of the date of this Certificate. 1.7 With respect to the Series 2015B Bonds, we have examined a completed copy of the Information Return for Tax- Exempt Private Activity Bond Issues (IRS Form 8038) of even date herewith to be filed pursuant to Section 149(e) of the Code on behalf of the Consolidated Government with the Internal Revenue Service Center, and, to the best of our knowledge, all information therein is true and correct as of the date of this Certificate. 1.8 The Consolidated Government has sold the Bonds to Raymond James & Associates, Inc. (the "Underwriter ") pursuant to a Bond Purchase Agreement, dated September 1, 2015, between the Consolidated Government and the Underwriter, and the Bonds are being delivered on this date to the Underwriter in exchange for good funds. 2. Sources and Uses of Funds. 2.1. The total sources and uses of the Bonds are set forth in Exhibit A attached hereto. 2 2.2. The allocation of proceeds of the Bonds to the Private Purpose Facilities and the Governmental Purpose Facilities is based on the actual costs of such separate purposes. Common costs, such as costs of issuance, are generally allocated between the Governmental Purpose Bonds and the Private Activity Bonds on a pro -rata basis, except for underwriter's discount (which is charged at a fee per $1,000 bond), which accurately reflects the extent to which any separate purpose of the Bonds enjoys the economic benefit or bears the economic burden of the common costs. 3. Overissuance Test. 3.1. Reasonably expected "proceeds" of the Bonds means the sum of (a) the "sale proceeds" of the Bonds (defined in Treasury Regulation § 1.148 -1(b) as any amounts actually or constructively received from the sale of the Bonds, including amounts used to pay underwriter's discount and post - issuance accrued interest), plus (b) any "investment proceeds" of the Bonds (as defined in Treasury Regulation § 1.148- 1(b)), plus (c) any "transferred proceeds" of the Bonds (as defined in Treasury Regulation § 1.148 -9). 3.2. There are no transferred proceeds of the Bonds. On the date hereof, the following amounts were on deposit in the funds and accounts under the Prior Bond Resolution, which constitute replacement proceeds and are being applied to the refunding of the Refunded Bonds by the deposit thereof to the 2005 Defeasance Account or the funding of the Series 2015A Account and the Series 2015B Account of the Debt Service Reserve Fund for the Bonds (the "Prior Bond Resolution Funds "). The amounts set forth in the table below on deposit in the PFC Debt Service Reserve Account and the Debt Service Reserve Account for the Refunded Bonds and held under the Prior Bond Resolution were funded with Airport revenues. Series to Which Prior Bond Amount Application of Funds Allocable Resolution Account Series 2005A Bonds PFC Balloon Bonds $1,665,963.81 2005 Defeasance Reserve Account Account to be applied to 2005A Bonds Series 2005A Bonds 2005AB Subaccount $392,006.97 2005 Defeasance of PFC Debt Service Account to be applied Reserve Account to 2005A Bonds Series 2005A Bonds 2005A/B Subaccount $667,500.00 Series 2015A Account of PFC Debt Service of the Debt Service Reserve Account Reserve Fund 3 Series to Which Prior Bond Amount Application of Funds Allocable Resolution Account Series 2005A Bonds Series 2005A/B $105,461.48 2005 Defeasance Subaccount of the Account to be applied Interest Account and to 2005A Bonds the Principal Account of the PFC Debt Service Fund Series 2005C Bonds Balloon Bonds $1,500,722.75 2005 Defeasance Reserve Account Account to be applied to 2005C Bonds Series 2005C Bonds 2005C Subaccount of $325,452.05 2005 Defeasance Debt Service Reserve Account to be applied Account to 2005C Bonds Series 2005C Bonds 2005C Subaccount of $385,000.00 Series 2015B Account Debt Service Reserve of the Debt Service Account Reserve Fund Series 2005C Bonds Series 2005C $89,038.78 2005 Defeasance Subaccount of the Account to be applied Interest Account and to 2005C Bonds the Principal Account of the Debt Service Fund 3.3. The reasonably expected proceeds of the Bonds (a) will not exceed the amount necessary to accomplish the governmental purposes of the issue and (b) are not in excess of the amount of sale proceeds allocated to expenditures for the governmental purposes of the issue. 4. Disbursements of Funds and Schedule of Expenditures; the Refunding. 4.1. The sale proceeds derived from the sale of the Series 2015A Bonds ($7,261,229.80), together with Prior Bond Resolution Funds relating to the Series 2005A Bonds ($2,830,932.26), shall be applied as follows: (a) $58,188.16, funded with Series 2015A Bond proceeds, will be retained by the Underwriter as the Underwriter's discount; (b) $667,500.00 funded from the Prior Bond Resolution Funds relating to the Series 2005A Bonds will be deposited into the Series 2015A Account of the Debt Service Reserve Fund created under the Bond Resolution to fund the debt service reserve requirement for the Series 2015A Bonds; 4 (c) $9,107,032.32 (comprised of Series 2015A Bond proceeds of $6,943,600.06, and Prior Bond Resolution Funds relating to the Series 2005A Bonds of $2,163,432.26) will be deposited into the 2005 Defeasance Account created under the Bond Resolution and will applied to the redemption of the Refunded 2005A Bonds on October 2, 2015; (d) $259,441.58 of Series 2015A Bond proceeds will be deposited in to the Costs of Issuance Fund to pay the costs of issuance for the Series 2015A Bonds; and 4.2. The sale proceeds derived from the sale of the Series 2015B Bonds ($4,212,595.15), together with the Prior Bond Resolution Funds relating to the Series 2005C Bonds ($2,300,213.58) and an equity contribution by the Consolidated Government in the amount of $230,715 (the "Equity Contribution "), shall be applied as follows: (a) $33,561.72, funded with Series 2015B Bond proceeds will be retained by the Underwriter as the Underwriter's discount; (b) $385,000.00 funded from the Prior Bond Resolution Funds relating to the Series 2005C Bonds will be deposited into the Series 2015B Account of the Debt Service Reserve Fund created under the Bond Resolution to fund the debt service reserve requirement for the Series 2015B Bonds; (c) $6,173,898.21 (comprised of Series 2015B Bond proceeds of $4,133,684.63, Prior Bond Resolution Funds relating to the Series 2005C Bonds of $1,915,213.58 and an Equity Contribution of $125,000.00) will be deposited into the 2005 Defeasance Account created under the Bond Resolution and will applied to the redemption of the Refunded 2005C Bonds on October 2, 2015; (d) $149,153.23 (comprised of Series 2015B Bond proceeds of $43,438.23 and an Equity Contribution of $105,715.00) will be deposited in to the Costs of Issuance Fund to pay the costs of issuance for the Series 2015B Bonds; and (e) $1,910.57 of Series 2015E Bond proceeds shall be deposited to the Series 2015B Subaccount of the Interest Account of the Debt Service Fund and used to pay interest on the Series 2015B Bonds on their first interest payment date. 4.3. The moneys deposited in the Costs of Issuance Fund, together with any investment earnings thereon, is expected to be expended for the payment of costs of issuance of the Bonds within 60 days after the date of this Certificate. Any moneys remaining in the Costs of Issuance Fund will be deposited to the Series 2015A Account of the Interest Account of the Debt Service Fund. 4.4. The amount set forth in Section 4.1(c) and 4.2(c) will be deposited in trust in the 2005 Defeasance Account with the Paying Agent in an amount sufficient without investment to pay the principal and interest on the Refunded Bonds on the October 2, 2015 redemption date. 5 4.5. Each series of the Bonds is a "current refunding issue" within the meaning of Treasury Regulation § 1.150- 1(d)(3), in that each series of the Bonds is being issued not more than 90 days prior to the last expenditure of any proceeds of the Bonds to pay the principal of or interest on the Refunded Bonds. The net sale proceeds and the investment proceeds of the Bonds qualify for the 90 -day temporary period for current refunding issues provided for in Treasury Regulation § 1.148- 9(d)(2)(ii). 4.6. $8,783.67 of the proceeds of the Series 2015A Bonds will be used to reimburse legal fees constituting costs of issuance paid by the Consolidated Government prior to the issuance of the Bonds. $5,066.33 of the Equity Contribution allocable to the costs of issuance of the Series 2015B Bonds will be sued to reimburse legal fees constituting costs of issuance paid by the Consolidated Government prior to the issuance of the Bonds. 5. Yield. 5.1. The yield on the Bonds is 3.6644 %. For purposes of this Certificate, the "yield" is, and shall be, calculated in the manner set forth in the Code and in accordance with Treasury Regulation § 1.148 -4(b). Generally, the "yield" on a fixed yield issue means the discount rate that, when used in computing the present value of all unconditionally payable payments of principal and interest and fees for a "qualified guarantee" (as defined in Treasury Regulation § 1.148- 4(f)), produces an amount equal to the present value, using the same discount rate, of the aggregate issue price of the bonds as of the issue date. In the case of the Bonds, the "issue price" of any bond is defined in the same manner as such term is defined under Sections 1273 and 1274 of the Code. The initial issue price and the yield of the Series Bonds is based on the Certificate of the Underwriter attached hereto as Exhibit B . 6. Funds and Accounts. 6.1. The Consolidated Government has established the following funds and accounts pursuant to the Bond Resolution: (a) Revenue Fund; (b) PFC Revenue Fund, and within the PFC Revenue Fund, the Pledged PFC Series 2015 Account; (c) Operation and Maintenance Fund; (d) Operation and Maintenance Reserve Fund; (e) Debt Service Fund, and within the Debt Service Fund: (i) Interest Account, with a Series 2015A Subaccount and a Series 2015B Subaccount. (ii) Principal Account, with a Series 2015A Subaccount and a Series 2015B Subaccount. 0 (iii) Contracts Payment Account; (f) Debt Service Reserve Fund, with a Series 2015A Account and a Series 2015B Account; (g) Capital Improvement Fund, and within the Capital Improvement Fund, the Capital Improvement Account and the Revenue Credit Account; (h) PFC Capital Fund; (i) Costs of Issuance Fund; and 0) 2005 Defeasance Account, 6.2. The Interest Account and the Principal Account of the Debt Service Fund (with respect to the Bonds) and the Pledged PFC Series 2015A Account (with respect to the Series 2015A Bonds only) are together a "bona fide debt service fund" within the meaning of Section 148 of the Code and Treasury Regulation § 1.148 -1(b) in that: (a) such accounts will be used primarily to achieve a proper matching of revenues with principal and interest payments within each bond year; and (b) such accounts will be depleted at least once each bond year, except for a reasonable carryover amount not to exceed the greater of (i) the earnings on the bona fide debt service fund for the immediately preceding bond year, or (ii) 1 /12th of the principal and interest payments on the Bonds for the immediately preceding bond year. The moneys on deposit in the bona fide debt service fund will be invested pending their disbursement. The Interest Account and the Principal Account and the Pledged PFC Series 2015A Account are expected to be completely depleted on each payment date of the principal of the Bonds. 6.3. Except for the Debt Service Fund, the Debt Service Reserve Fund and the Pledged PFC Series 2015A Account, no "sinking fund" or "pledged fund" (as such terms are defined in Treasury Regulation § 1.148- 1(c)(2) and (3), respectively), debt service fund, redemption fund, reserve fund, revolving fund or any similar fund or account has been or will be created or established by the Consolidated Government or will be established by any other person or entity with moneys or property derived from the Consolidated Government or any related party from which the principal of, redemption premium (if any) or interest on, the Bonds is reasonably expected to be paid, directly or indirectly. All of the moneys to be used to pay the principal of, redemption premium (if any) and interest on the Bonds will be deposited into the related subaccounts of the Interest Account and the Principal Account. 6.4. The Debt Service Reserve Fund contains a Series 2015A Account which secures only the Series 2015A Bonds and a Series 2015B Account which secures only the Series 2015B Bonds and is intended to be used to make payments of principal, redemption premium (if any), and interest on the respective series of Bonds in the event that on any payment 7 date there are insufficient moneys in the related subaccounts of the Principal Account and the Interest Account to make such payments. Under the terms of the Bond Resolution, the Consolidated Government is obligated to maintain in the Series 2015A Account and the Series 2015B Account of the Debt Service Reserve Fund an amount equal to the "Debt Service Reserve Requirement," which is defined as a) with respect to each series of the Bonds, the least of (i) 125 percent of the Average Annual Debt Service Requirement (as defined in the Bond Resolution), (ii) the Maximum Annual Debt Service Requirement (as defined in the Bond Resolution), 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. Investment income on moneys held in the Debt Service Reserve Fund shall be retained therein unless the retention of such moneys would cause the amount held in the Debt Service Reserve Fund to exceed the Debt Service Reserve Requirement, in which case, such moneys shall be transferred to the related subaccount of the Interest Account and applied to the payment of amounts due on the related series of Bonds. The Series 2015A Account of the Debt Service Reserve Fund is funded with amounts on deposit in the PFC Debt Service Reserve Account under the Prior Bond Resolution for the Refunded 2005A Bonds (which was originally funded with Airport revenues). The Series 2015B Account of the Debt Service Reserve Fund is funded with amounts on deposit in the Debt Service Reserve Account under the Prior Bond Resolution for the Refunded 2005C Bonds (which was originally funded with Airport revenues). 6.5. Proceeds of the Bonds and other amounts on deposit in the 2005 Defeasance Account will be held uninvested. 6.6. Moneys in the Interest Account and the Principal Account of the Debt Service Fund and in the Pledged PFC Series 2015A Account may be invested in investments permitted under the Bond Resolution at an unlimited yield. Moneys in the Debt Service Reserve Fund not in excess of the Debt Service Reserve Requirement may be invested in investments permitted under the Bond Resolution at an unlimited yield. 7. Pledged and Replacement Funds. 7.1. No stock or other "security" as defined in Section 165(g)(2)(A) and (B) of the Code, annuity contract, "investment -type property" as described or defined in Section 148(d)(2)(D) of the Code and Treasury Regulation § 1.148 -1(d), or any other obligation (other than an obligation described in Section 103(a) of the Internal Revenue Code of 1954, as amended, or Section 103(a) of the Code which is not a "specified private activity bond" within the meaning of Section 57(a)(5)(C) of the Code), will be pledged as security for the payment of principal of, redemption premium (if any) and interest on the Bonds. 7.2. All of the proceeds of the Bonds (including any investment proceeds) are being expended for the purposes set forth in paragraph 1.2 hereof, and no portion of the proceeds of the Bonds (except for $1,910.57) is expected to be used to finance or be allocated to working capital expenditures or to create any working capital reserve, directly or indirectly. 7.3. The Bonds will not be outstanding longer than is reasonably necessary for the governmental purposes of the issue, as determined under Treasury Regulation § 1.148 -10. As described in Section 13, the weighted average maturity of each series of the Bonds does not exceed the reasonably expected remaining weighted average economic life of the facilities refinanced by the related series of Bonds by more than 20 %. The proceeds of the Bonds are not expected to be used directly or indirectly to replace funds which were or are to be used directly or indirectly to acquire "higher yielding investments" within the meaning of Section 148(b) of the Code. 7.4. Except as described in paragraph 6.4 with respect to the Debt Service Reserve Fund, the Consolidated Government has not entered into any agreement obligating it to maintain any amount at a particular level for the benefit of the owners of the Bonds. 8. Composite Issues. 8.1. Other than the Bonds, there are no other obligations heretofore issued or to be issued by or on behalf of any state, territory or possession of the United States, or any political subdivision of any of the foregoing, or of the District of Columbia, which: (a) are to be sold less than 15 days prior to or after the date of sale of the IC • • (b) are to be sold pursuant to the same plan of financing with the Bonds; and (c) are reasonably expected to be paid from substantially the same source of funds as the Bonds, determined without regard to guarantees from unrelated parties. 9. Private Activity - Governmental Purpose Bonds. 9.1. All of the facilities refinanced from the proceeds of the sale of the Bonds will be owned by the Consolidated Government. Except as described in paragraph 9.2, no portion of the proceeds of the Governmental Purpose Bonds or of the Governmental Purpose Facilities is to be used, directly or indirectly, in a trade or business carried on by any person other than a governmental unit (other than use as a member of the general public) (a "private business use "), and no portion of the principal or interest on the Governmental Purpose Bonds is, under the Bond Resolution or pursuant to any underlying agreement, directly or indirectly (a) secured by any property used or to be used in a private business use or payments in respect of such property, or (b) to be derived from payments (whether or not to the Consolidated Government) in respect of property, or borrowed money, used or to be used for a private business use. 9.2. Except with respect to (a) the separate Airline Operating Agreement and Terminal Building Lease for the Augusta Regional Airport, dated as of September 26, 2013, as amended by a First Amendment to Airline Operating Agreement and Terminal Building Lease, dated as of September 24, 2015 (collectively the "Airline Agreements "), between the Consolidated Government, acting by and through the Aviation Commission, and (1) Delta Air Lines, Inc. and (2) American Airlines, Inc. (as successor by merger to U.S. Airways, Inc.) and (b) Parking Management Contract for the Public Parking Facilities Located at Augusta Regional E Airport at Bush Field, dated as of January 1, 2014 (the "Parking Contract "), between the Consolidated Government, acting by and through the Aviation Commission, and Republic/NFR &CS Parking System, LP (the Airline Agreements and the Parking Contract are collectively referred to as the "Management Contracts "), there is no management contract, cooperative research agreement, output contract or similar agreement with respect to the Governmental Purpose Facilities or any of the products or services provided at the Governmental Purpose Facilities. Except for the Management Contracts, no private business has a contractual arrangement or special legal entitlement for the use of any portion of the Governmental Purpose Facilities. Except for the Management Contracts, the Governmental Purpose Facilities do not confer special economic benefits on any private business. The Parking Contract meets the requirements of Revenue Procedure 97 -13. The portion of the proceeds of the Series 2015A Bonds used to finance improvements to the Governmental Purpose Facilities subject to the Airlines Contracts, do not exceed 10% of the proceeds of the Series 2015A Bonds. If the Consolidated Government or the Aviation Commission enters into any such further agreement, including any agreement to replace the Parking Contract, such agreement shall comply with Revenue Procedure 97 -13 or any other similar law, regulation, procedure or ruling. 9.3. The Refinanced 2005 Project is available to members of the general public because (a) the Consolidated Government intends that the Refinanced 2005 Project will be available to members of the general public, (b) the Refinanced 2005 Project is available on the same basis to natural persons not engaged in a trade or business (except with respect to airline use, concession use and rental car agency use of the Private Purpose Facilities), and (c) the Refinanced 2005 Project will be available to the general public on the basis of rates that are generally applicable and uniformly applied 9.4. No portion of the proceeds of the Bonds is being used (a) to finance or refinance any "output facility" (within the meaning of Section 141(b)(4) of the Code) other than a facility for the furnishing of water, (b) to make or to finance loans to persons other than governmental units or (c) directly or indirectly, for the acquisition by a governmental unit of nongovernmental output property (within the meaning of Section 141(d) of the Code). 10. Airport Facility Bonds. 10.1. The Private Activity Bonds constitute exempt facility bonds for airports within the meaning of Section 142(a)(7) of the Code. 10.2. The primary users of the Refinanced 2005 Project are members of the public traveling on airlines and others using the Airport, airlines using the airport facilities of the Consolidated Government and their officers and employees, businesses serving the airlines, providers of food and beverage services to persons using the airport facilities and the airplanes, and providers of administrative, clerical and office and general services to the airport facilities. The primary users of the Private Purpose Facilities will be, in addition to members of the public generally, common carriers under the terms of Ordinance No. 6737 adopted November 3, 2004 by the Consolidated Government relating to rates and fees payable by airlines operating at the Airport and the federal government. IN 10.3. Not less than 95 percent of the Sale Proceeds of the Refunded 2005C Bonds and investment earnings thereon were spent for amounts chargeable to the capital account for the Private Purpose Facilities. 10.4. The Private Purpose Facilities are described on Exhibit C . Except as described in paragraph 10.5, the Private Purpose Facilities consist entirely of facilities directly related and essential to servicing aircraft, enabling aircraft to take off and land or transferring passengers or cargo to or from aircraft and facilities that are functionally related and subordinate to the Airport that are of a character and size commensurate with the character and size of the Airport. 10.5. Approximately $251,000 of Sale Proceeds of the Series 2005C Bonds were used to rehabilitate a parking lot adjacent to the Airport to be used by rental car companies as a rental ready/return lot, which use may not have constituted an airport exempt facility under Section 142(c) of the Code (the "Rehab Project "). $125,000 of the Equity Contribution is allocable to the refunding of the Rehab Project and has been deposited to the 2005 Defeasance Account. $126,000 (equal to the remainder of the original Sales Proceeds of the Series 2005C Bonds applied to the Rehab Project), or approximately 2.99% of the Sale Proceeds of the Series 2015B Bonds, shall be applied (together with costs of issuance as described in paragraph 10.8) against the limit of five percent of Sale Proceeds of Private Activity Bonds not required to be used to provide exempt facilities. 10.6. No portion of the Private Purpose Facilities contain or will contain offices or office space other than office space where all functions to be performed in such office space will be directly related to the day -to -day operations at the Airport. 10.7. The Private Activity Bonds satisfy the public approval requirement under Section 147(f) of the Code. On February 22, 2005, a public hearing regarding the issuance of the Bonds was held by Willis Boshears, Jr., the then Executive Director of the Airport, following notice published in the Augusta Chronicle on February 7, 2005, as evidenced by the publisher's affidavit of such newspaper included in the transcript of proceedings relating to the issuance of the Bonds. On February 22, 2005, following the public hearing, public approval was provided for the Private Activity Bonds by the Mayor of the Consolidated Government, being the chief elected executive officer of the Consolidated Government. No new TEFRA hearing was required as the weighted average maturity of the Series 2015B Bonds does not exceed the remaining weighted average maturity of the Refunded 2005C Bonds. 10.8. The only costs of issuance of the Series 2015B Bonds being financed with the proceeds of the Series 2015B Bonds is the Underwriter's compensation of $33,561.72 and other costs of issuance in the amount of $43,438.23, which amount does not exceed 2 percent of the proceeds of the Series 2015B Bonds. All other costs of issuance with respect to the Series 2015B Bonds are being paid with the Equity Contribution in the amount of $105,715.00. 11 11. Hedge Bonds. 11.1. Not less than 85% of the "spendable proceeds" (within the meaning of Section 149(g) of the Code) of the Refunded Bonds were reasonably expected to be spent for the governmental purposes for which such Refunded Bonds were issued within the three -year period beginning the date of issuance of the Refunded Bonds and (b) not more than 50% of the proceeds of the Refunded Bonds were invested in "nonpurpose investments" (as defined in Treasury Regulation § 1.148 -1(b)) having a substantially guaranteed yield for four years or more. 11.2. The Bonds are being issued for the significant governmental purposes set forth in paragraph 1.2, and are not being issued to hedge against future increases in interest rates. 12. Rebate to the United States. 12.1. The Consolidated Government hereby covenants and agrees that unless the "gross proceeds" (as defined in Treasury Regulation § 1.148 -1(b)) of the Bonds are expended or otherwise allocated to expenditures for the governmental purpose for which the Bonds are issued in accordance with one of the spending exceptions to the rebate requirement in Treasury Regulation § 1.148 -7, each five years beginning on the date of issuance of the Bonds, or on such other date as may be permitted by applicable temporary, proposed or final Treasury Regulations (each such date a "computation date ") it shall compute the Rebate Amount (as described in paragraph 12.2 of this Certificate) with respect to the Bonds and within 60 days thereafter, make installment payments to the United States in an amount that, when added to the future value, as of the computation date, of previous rebate payments made with respect to the Bonds, equals at least 90% of the Rebate Amount with respect to the Bonds as of such date. The final installment (the "Final Rebate ") shall be paid not later than the later of (a) the date 60 days after the final computation date; (b) the date eight months after the date of issuance of the Bonds; and (c) the date 60 days after the earlier of (i) the date the Consolidated Government no longer reasonably expects Section 148(f)(4)(B) of the Code to apply to the Bonds and (ii) the date twelve months after the date of issuance of the Bonds, and shall be in an amount sufficient to pay all of the Rebatable Arbitrage as of the final computation date. If the Bonds are retired within three years after the date of issuance thereof, the final computation date need not occur before the end of eight months after the date of issuance of the Bonds or during the period in which the Consolidated Government reasonably expects that any of the spending exceptions under Treasury Regulation § 1.148 -7 will apply to the Bonds. 12.2. Generally, the Rebate Amount with respect to the Bonds as of any computation date is the excess of (a) the aggregate amount earned from the date of the issuance of the Bonds are invested (other than amounts attributable to the excess described in this clause) over the amount that would have been earned if the yield on such nonpurpose investments had been equal to the yield (determined on the basis of the issue price) on the Bonds; (b) plus any income attributable to the excess described in Section 12.2(a) above whether or not such income exceeds the yield on the Bonds. The Rebate Amount shall be computed in accordance with Treasury Regulations §§ 1.148 -0 to 1.148 -11, as the same may be modified, amended or superseded from time to time 12 with respect to the Bonds. 12.3. For purposes of determining the Rebate Amount under Section 148(f) of the Code, because the rate of interest on the Bonds does not vary during the term of the Bonds, and because the weighted average maturity of each series of the Bonds (as determined in accordance with Section 147(b)(2)(A) of the Code) is at least five years, any amount earned on a bona fide debt service fund (as described in Section 148(f)(4)(B) of the Code) shall not be taken into account. 12.4. Each payment of the Rebate Amount required under the provisions of this Certificate and Section 148(f) of the Code shall be (a) filed with the Internal Revenue Service Center at the place or places designated by the Commissioner of Internal Revenue, presently Ogden, Utah 84201, and (b) accompanied by a copy of the form provided by the Commissioner for such purpose, presently IRS Form 8038 -T, except as may be otherwise provided by applicable Treasury Regulations. 12.5. Unless the Consolidated Government shall receive an opinion of nationally recognized bond counsel experienced in matters relating to Section 148 of the Code to the effect that failure to pay any rebate under Section 148(f) of the Code will not adversely affect the exclusion of interest on the Bonds from gross income for federal income tax purposes, the Consolidated Government agrees that it shall file all reports and make all payments required to be made to the United States in accordance with Section 148(f) of the Code and Treasury Regulation § 1.148 -0 to 1.148 -11, or any successor temporary, proposed or final Treasury Regulations thereto. 12.6. The Consolidated Government further agrees that it will, within 60 days after the date of this certificate, calculate the Rebate Amount due (if any) with respect to the Refunded Bonds and pay such amount to the Internal Revenue Service in accordance with its procedures for the payment of rebate amounts due under Section 148(f) of the Code. 13. Limitation on Maturity. 13.1. Private Activity Bonds. (i) The weighted average maturity of the Private Activity Bonds does not exceed 120 percent of the remaining economic lives of the facilities constituting the Private Purpose Facilities. (ii) The weighted average maturity of the Private Activity Bonds (determined by taking into account the respective issue prices of the Private Activity Bonds) is 5.6246 years as calculated by the Underwriter and set forth in the Certificate of the Underwriter attached hereto as Exhibit B . (iii) Attached hereto as Exhibit C is a schedule listing the components of the Private Purpose Facilities, their actual cost, their anticipated economic useful lives and their placed in service dates as of the date of this Certification. The economic life of each 13 such component has been determined in accordance with generally accepted accounting principles. Based upon the experience of the Consolidated Government in operating the same or similar components under similar circumstances, such guidelines are a reasonable estimate of the remaining economic life of such components. (iv) Based upon the economic useful lives of the property refinanced in whole or in part with the proceeds of the Private Activity Bonds as described above, and the actual cost of such property, the reasonably expected weighted average remaining economic useful life of the property financed or refinanced in whole or in part with the Private Activity Bonds is not less than 18.5346 years as shown on Exhibit C . 13.2. Governmental Purpose Bonds. (i) The weighted average maturity of the Governmental Purpose Bonds does not exceed 120 percent of the remaining economic lives of the facilities constituting the Governmental Purpose Facilities. (ii) The weighted average maturity of the Governmental Purpose Bonds (determined by taking into account the respective issue prices of the Governmental Purpose Bonds) is 15.1296 years as calculated by the Underwriter and set forth in the Certificate of the Underwriter attached hereto as Exhibit B. (iii) Attached hereto as Exhibit D is a schedule listing the components of the Governmental Purpose Facilities, their cost, their anticipated or actual economic useful lives and their actual placed in service dates as of the date of this Certification. The economic life of each such component has been determined in accordance with generally accepted accounting principles. Based upon the experience of the Consolidated Government in operating the same or similar components under similar circumstances, such guidelines are a reasonable estimate of the remaining economic life of such components. (iv) Based upon the economic useful lives of the property financed or refinanced in whole or in part with the proceeds of the Governmental Purpose Bonds as described above, and the actual cost of such property, the reasonably expected weighted average remaining economic useful life of the property financed or refinanced in whole or in part with the Governmental Purpose Bonds is not less than 21.5977 years as shown on Exhibit D 13.3. The Consolidated Government agrees that it will not take any action that would cause the weighted average maturity of a series of the Bonds to exceed 120% of the reasonably expected economic life of the facilities refinanced with the proceeds of such series of the Bonds. 14 14. Miscellaneous. 14.1. The Bonds are not and will not be "federally guaranteed" within the meaning of Section 149(b) of the Code. 14.2. No portion of the Bonds are to be used to provide, directly or indirectly, any airplane, skybox or other private luxury box, health club facility, facility primarily used for gambling, or store the principal business of which is the sale of alcoholic beverages for consumption off - premises. 14.3. No portion of the Bonds is being used, directly or indirectly, in connection with a transaction or a series of transactions that attempts to circumvent the provisions of Section 148 of the Code or the proposed, temporary or final Treasury Regulations applicable thereto (a) enabling the Consolidated Government to exploit the difference between tax exempt and taxable interest rates to gain a material financial advantage and (b) increasing the burden on the market for tax exempt obligations. The Bonds are not being issued sooner will not remain outstanding longer than is reasonably necessary for the purposes for which the Bonds are issued. 14.4. The Consolidated Government shall retain all records relating to the Bonds needed to comply with Section 6001 of the Code. Without limiting the foregoing, the Consolidated Government shall retain the following: (i) basic records relating to the transaction (including the bond documents, the opinion of bond counsel, etc.), (ii) documents evidencing expenditure of the Bond proceeds, (iii) documentation pertaining to any investment of Bond proceeds (including the purchase and sale of securities, SLG subscriptions, yield calculations for each class of investments, actual investment income received from the investment of Bond proceeds, guaranteed investment contracts and rebate calculations), (v) records sufficient to show that all Bond - related returns submitted to the IRS are correct and (vi) records necessary to satisfy the safe harbor requirements relating to guaranteed investment contracts and yield restricted defeasance escrows. Such records shall be maintained as long as the Bonds are outstanding, plus three years after the final payment or redemption date. 14.5. To the best of our knowledge, information and belief there are no other facts, estimates or circumstances that would materially change any of the foregoing certifications. Representations contained in this Certificate are made for the benefit of the purchasers of the Bonds, Bond Counsel and others, and may be relied upon by the purchasers of the Bonds, Bond Counsel and others in determining whether the interest on the Bonds is excluded from gross income for federal income tax purposes. 15 IN WITNESS WIIEREOF, we have hereunto set our hands on September 24, 2015, the date of the delivery of and payment for the Bonds. AUGUSTA, GEORGIA By: G z2� Hardie Davis, Jr., M sta- Richmond County Commission By: Risa Ajeyoma Bingham, Director of Finance, Augusta Regional Airport By: Roy A. Williams, Executive Director, Augusta Regional Airport Attest: ��L Aw r� i a en 'Bo ujust� Co � ' ,r - • ap y� .9oi (S E A#V ''••...e•r'' �CEORGt �,,•. (Tax and Non - Arbitrage Certificate) 09- 21- 15;05.35PM; IN WITNESS VW-MEOF, we have hereunto set our hands on September 24, 2015, the date of the delivery of and payment for the Bonds: AUGUSTA, GEORGIA 14 By: Hardie Davis, Jr., Mayor, Augusta - Richmond County Commission By: Rise yoma Bingham„ Director of Finance, . Augusta Regional Airport By: Roy A. VIR9K Executive Director, Augusta Regional Airport Attest: Lena L Bonner, Clerk, Augusta - Richmond County Commission (S E A L) # 21 2 (Tax and Eton- Arbitrage Certificate) Exhibits: Exhibit A — Sources and Uses of Funds Exhibit B — Certificate of the Underwriter as to Issue Price, Yield and Weighted Average Maturity Exhibit C — Weighted Average Economic Life of Private Purpose Facilities Exhibit D — Weighted Average Economic Life of Governmental Purpose Facilities Exhibit A Sources of Funds: Par Amount of Bonds Original Issue Premium Equity Contribution by Consolidated Government Transfers from Debt Service Fund, Debt Service Reserve Fund and Balloon Bond Reserve Fund Under Prior Bond Resolution Total Uses of Funds: Cash Deposit to 2005 Defeasance Account Series 2005A Debt Service Reserve Account Series 2005B Debt Service Reserve Account Costs of Issuance Underwriter's Discount Working Capital Series 2005A Series 2005E $ 6,675,000.00 $ 3,850,000.00 586,229.00 362,595.15 — 230,715.00 2,830,932.26 2,300,213.58 10.092,162.06 $6,743,523.73 $ 9,107,032.32 $6,173,898.21 667,500.00 - - 385,000.00 259,441.58 149,153.23 58,188.16 33,561.72 — 1,910.57 Total 1 1• • 1• • Exhibit B CERTIFICATE AS TO ISSUE PRICE, YIELD AND WEIGHTED AVERAGE MATURITY The undersigned officer of Raymond James & Associates, Inc., as purchaser (the "Purchaser ") of the $6,775,000 aggregate principal amount of Airport General Revenue Refunding Bonds, Series 2015A (Non -AMT) (the "Series 2015A Bonds "), and $3,850,000 aggregate principal amount of Airport General Revenue Refunding Bonds, Series 2015B (AMT) (the "Series 2015E Bonds "; the Series 2015A Bonds and the Series 2015B Bonds are collectively referred to as the "Bonds "), DOES HEREBY CERTIFY as follows: 1. As of September 1, 2015, the date on which the Purchaser was awarded the purchase of the Bonds (the "Sale Date "), the Purchaser offered all of the Bonds to the general public (excluding bond houses, brokers or similar persons or organizations acting in the capacity of underwriters or wholesalers) (the "Public ") in a bona fide public offering, and based on our assessment of the then prevailing market conditions, the Purchaser reasonably expected that the first prices at which at least 10% of each maturity would be sold by the Purchaser to the Public were the prices not higher than those listed for each maturity set forth on the cover page of the Official Statement, dated September 1, 2015, for the Bonds (the "Initial Offering Prices "). 2. The first price at which ten percent (10 %) of each maturity of the Bonds has been sold to the Public was at a price not higher than the Initial Offering Prices. 3. The price paid for any of the Bonds does not exceed the fair market value of such Bonds as of the sale date. 4. No Bonds were sold in exchange for property. 5. For purposes of the IRS Form 8038 -G, the weighted average maturity of the Series 2015A Bonds is 15.1296 years. For purposes of the IRS Form 8038, the weighted average maturity of the Series 2015B Bonds is 5.6246 years. 6. For purposes of the IRS Form 8038 -G and Form 8038, the yield on the Bonds, as calculated by the undersigned, is 3.46638 %. Witness my hand this 24th day of September, 2015. RAYMOND JAMES & ASSOCIATES, INC. r By: D.. M hig Managing irector (Certificate as to Issue Price, Yield and Weighted Average Maturity) Exhibit C WEIGHTED AVERAGE ECONOMIC LIFE OF PRIVATE PURPOSE FACILITIES ' Reflects the cost of each component of the 2005 Project financed with proceeds of the Series 2005C Bonds and investment earnings thereon. Series 2005C Bond Proceeds plus investment earnings equaled $6,900,665, of which $124,000 was used to pay underwriter's discount, $786,556 was used to fund capitalized interest and $110,000, representing excess bond proceeds, was used to redeem a portion of the Series 2005C Bonds on January I, 201 5. Placed in Remaining Cost Useful Life Service Date Useful Life Weighted Life Terminal Building $2,568,072 30 Dec -07 22.83 58,629,084 Credit Card Rehab 251,000 20 June -06 0 0 South Side Employee Parking 269,000 20 June -06 10.75 2,891,750 Parking (General Public) 2,792,037 20 Oct -12 17.00 47,464,629 Totals $5,880,109 108,985,463 Weighted Average Economic Life 18.5346 ' Reflects the cost of each component of the 2005 Project financed with proceeds of the Series 2005C Bonds and investment earnings thereon. Series 2005C Bond Proceeds plus investment earnings equaled $6,900,665, of which $124,000 was used to pay underwriter's discount, $786,556 was used to fund capitalized interest and $110,000, representing excess bond proceeds, was used to redeem a portion of the Series 2005C Bonds on January I, 201 5. Exhibit D WEIGHTED AVERAGE ECONOMIC LIFE OF GOVERNMENTAL PURPOSE FACILITIES Weighted Average Economic Life 21.5977 1 Equal to the cost of each component of the 2005 Project, which was funded with proceeds of the Series 2005A Bonds and investment earnings thereon. Series 2005A Bond proceeds plus investment earnings equaled $9,820,211, of which $179,800 was used to pay underwriter's discount and $1,077,726 was used to fund capitalized interest. Completion Remaining Cost' Useful Life Date Useful Life Weighted Life Terminal Building $6,572,791 30 Dec -07 22.83 150,056,819 Utilities 151,460 30 June -06 20.75 3,142,795 Curbfront Renovations 240,374 20 Dec -07 12.83 3,083,998 North Side Multi -Modal Curb 139,503 20 Dec -07 12.83 1,789,823 Parking (Employee) 978,082 20 June -12 16.67 16,304,627 Runway 17135 391,034 30 Nov -11 26.08 10,198,167 Furniture and Fixtures 89,441 8 Oct -11 4.00 357,764 Totals $8,562,685 184,933,993 Weighted Average Economic Life 21.5977 1 Equal to the cost of each component of the 2005 Project, which was funded with proceeds of the Series 2005A Bonds and investment earnings thereon. Series 2005A Bond proceeds plus investment earnings equaled $9,820,211, of which $179,800 was used to pay underwriter's discount and $1,077,726 was used to fund capitalized interest. MURRAY BARNES FINISTER LLP 3525 PIEDMONT RO.AD • 5 PII: )M O N T CI:NTrR • S UITE 515 • ATI.A. \TA, CiroRGIA 30305 September 24, 2015 Via Federal Express Internal Revenue Service Center Ogden, Utah 84201 Re: $6,675,000 Augusta, Georgia Airport General Revenue Refunding Bonds, Series 2015A (Non -AMT) To the Addressee: Augusta, Georgia has heretofore issued the Bonds referenced above and encloses herewith a completed I.R.S. Form 8038 -G "Information Return for Tax- Exempt Governmental Obligations," with respect to such Bonds. If you should have any questions concerning the enclosed Form 8038 -G, please contact me at the above address. Sincerely, �Z44.aa 5 Teresa P. Finister Enclosure TELLPHONE: (678)999 -0350 • FACSIMILE: (678)999.0357 • INTERNET: A-ww.nxtrraybarneslaw.com Fan, 8038 -G Information Return for Tax - Exempt Governmental Obligations (Rev. September 2011) ► Under Internal Revenue Code section 149(e) OMB No. 1545 -0720 11P See separate instruction. Department of the Treasury Internal Revenue Service Caution: N the issue price is under $100,000, use Form 8038 -GC. Reporting Authority If Amended Return, check here ► I 1 Issuer's name 2 Issuer's employer identification number (EIN) Augusta, Georgia 58. 2204274 36 Name of person (other than issuer) with whom the IRS may communicate about the return (see instructions) 3b Telephone number of other person shown on 3a James T. Plunkett, Esq. 706.7224111 4 Number and street (a P.O. box if mail is not del vaned o street address) RoomJSUite 5 Report number (For IRS Use OrNy) 530 Greene Street 24 1 3 1. f j 6 City, town, or poet office, state, and ZIP code 7 Date of issue Augusta, Georgia 30901 09/2412015 8 Name of issue 9 CUSIP number Augusta, Georigia Airport General Revenue Refunding Bonds, Series 2015A (Non -AMT) 051177BT9 ION Name and title of officer or other employee of the issuer whom the IRS may call for more information (see 10b telephone number of officer or other Instructions) employee shown on 10a Timothy E. Schroer, CPA, Assistant Director of Finance 706.821 -1741 AM 11 12 13 14 15 16 17 18 19 20 Type of Issue (enter the issue price). See the instructions and attach schedule. Education . . . . . . . . . . . . . . . . . . . . . . . . . . . Health and hospital . . . . . . . . . . . . . . . . . . . . . . . Transportation . . . . . . . . . . . . . . . . . . . . . . . . . Public safety . . . . . . . . . . . . . . . . . . . . . . . . . . . Environment (including sewage bonds) . . . . . . . . . . . . . . . . . . Housing . . . . . . . . . . . . . . . . . . . . . . . . . . . Utilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . Other. Describe ► If obligations are TANs or RANs, check only box 19a . . . . . . . . . . . . . If obligations are BANS, check only box 19b . . . . . . . . . . . . . . If obligations are in the form of a lease or installment sale, check box . . . . . . . . . . . . . . . . . . . . . ► ❑ ► ❑ ► ❑ 11 12 23 Issue price of entire issue (enter amount from line 21, column (b)) . . 13 7,261,230 14 Proceeds used for bond issuance costs (including underwriters' discount) . 24 15 16 25 17 25 18 =- r' ,._< (a) Final maturity date (b) (b) Issue price I (c) Stated redemption (d) Weighted f (e) Yield price at maturity average maturity 21 1 01/01/2035 1 S 7,261,2301 $ 6,675,0001 15.1296 vears 1 3.6644 22 Proceeds used for accrued interest . . . . . . . . . . . . . . . . . . . . . 22 23 Issue price of entire issue (enter amount from line 21, column (b)) . . 23 7,261,230 24 Proceeds used for bond issuance costs (including underwriters' discount) . 24 317,630 25 Proceeds used for credit enhancement . . . . . . . . . . . . 25 =- 26 Proceeds allocated to reasonably required reserve or replacement fund 26 27 Proceeds used to currently refund prior issues . . . . . . . . . 27 6,943,600 28 Proceeds used to advance refund prior issues . . . . . . . . . 28 - 29 Total (add lines 24 through 28) . . . . . . . . . . . . . . . . 29 7,261,230 30 Nonrefunding proceeds of the issue (subtract line 29 from line 23 and enter amount here) 301 p Description of Refunded Bonds. Complete this part only for Fe bonds. 31 Enter the remaining weighted average maturity of the bonds to be currently refunded . . . . ► 17.6788 years 32 Enter the remaining weighted average maturity of the bonds to be advance refunded . . . . ► years 33 Enter the last date on which the refunded bonds will be called (MM/DD/YYY`) . . . . . . ► 10/02/2015 34 Enter the date(s) the refunded bonds were issued ► (MM/DD/YYYY) 03103/2005 For Paperwork Reduction Act Notice, see separate instructions. Cat. No. 63773S Form 8038 -G (Rev. 9 -2011) Form 8038 -G (Rev. 9 -2011) Page 2 35 Enter the amount of the state volume cap allocated to the issue under section 141(bK5) . . . . I AS 36a Enter the amount of gross proceeds invested or to be invested in a guaranteed investment contra (GIC) (see instructions) . . . . . . . . . . . . . . . . . . . . . . . . . b Enter the final maturity date of the GIC P- C Enter the name of the GIC provider III- 37 Pooled financings: Enter the amount of the proceeds of this issue that are to be used to make loans - to other govemmental units . . . . . . . . . . . . . . . . . . . . . . . 37 38a If this issue is a loan made from the proceeds of another tax - exempt issue, check box ► ❑ and enter the following information: b Enter the date of the master pool obligation ► c Enter the EIN of the issuer of the master pool obligation ► d Enter the name of the issuer of the master pool obligation ► 39 if the issuer has designated the issue under section 265(b)(3)(B)M(Iiq (small issuer exception), check box . . . . ► ❑ 40 If the issuer has elected to pay a penalty in lieu of arbitrage rebate, check box . . . . . . . . . . . . . ► ❑ 41a If the issuer has identified a hedge, check here ► ❑ and enter the following information: b Name of hedge provider ► c Type of hedge ► d Term of hedge ► 42 If the issuer has superintegrated the hedge, check box . . . . . . . . . . . . . . . . . . . . . ► ❑ 43 if the Issuer has established written procedures to ensure that all nonqualified bonds of this issue are remediated according to the requirements under the Code and Regulations (see Instructions), check box . . . . . . . . ► 0 44 If the issuer has established written procedures to monitor the requirements of section 148, check box . . . . . ► 45a If some portion of the proceeds was used to reimburse exp check here 10 0 and enter the amount of reimbursement . . . . . . . . . lo- $2,7F3.4 - eosf of SSJ onGc. b Enter the date the official Intent was adopted ► m be r' 1 f 20 t 5 Under penalties of penury, l declare that I xamined this return and accompanying schedules and statements, and to the bast of my knowledge Sign ature and bailor. they are true, correct, and c lets. further declare that 1 consent to the IRS's disclosure of the issuer's return information, as necessary to and process ttm T son have aut nz e. Consent 1 � ICJ[/ r \ Hardie Davis, Jr., Mayor Signature of issuer's aut ed re tetive Date r Type or print name and lifts Paid Print/Type preparees name Pre er's signature Data Check it ❑ TIN Preparer Teresa P. Finister /. Z!. f J self- employed P01433775 Firm's name ► Murray Barnes Finister LLP Firm's EIN ► 80-0084586 Use Only Firm's address ► 3525 Piedmont Road NE, Bldg 5, Suite 515, Atlanta, GA 30305 Phone no. 678- 999 -0350 Form 8038 -G (Rev. 9.2011) If • X Customer Focus New Customer Center Small Business Center Service Guide Customer Support Company Information About FedEx Careers Investor Rela6urs rF, FedEx 1995 -2015 C 1i•,ered Ship date . Location Actual delivery Thur 9/24/2015 _ Fri 9/25/2015 10:01 am MURRAY BARNES LLP Delivered Department of the Treasury Building 5. Suite 515 Sr rted for dy .AMOhGAN SERVICE CTR 3525 Piedmont Road NE - OGDEN, UT US 84201 ATLANTA. GA US 30305 - 9/24/2015 - Thursday 800 829 -4933 678 999 -0350 klaRIL —',A 11 33 am Shipment information sent to FedEx Deliver Weekday Shipment Facts Travel History �Daterrime Activity Location - 9/25/2015 - Friday 1 10 am Delivered N , 8 13 am On FedEx vehicle for delivery Shipping /Receiving 7 24 am At local FedEx facility Not Available 530 am At destination sort facility SA T.gxr;.,r,;,T 3.41 am Departed FedEx location n+enw+ts TN 12:05 am Arrived at FedEx location K+rrwNls TN - 9/24/2015 - Thursday 7 26 pm Picked up klaRIL —',A 11 33 am Shipment information sent to FedEx Deliver Weekday Shipment Facts Tracking 774586184679 number 1 Weight 0.5 Ibs / 0.23 kgs Delivered To Shipping /Receiving Total Not Available shipment 0.5 Ibs r 0.23 kgs weight Shipper 1496 reference Special handling Deliver Weekday section Service FedEx Priority Overnight Delivery 1 attempts Total pieces 1 Terms Not Available Packaging FedEx Envelope Search United States - English - erms of Use ; Security and Privacy MURRAY BARNES FINISTER LLP 3525 PIEI MONT ROAD 0 5 PIEDMONT CENTER • SI!ITE 515 • ATLANTA, CJEURvtA 30305 September 24, 2015 Via Federal Express Internal Revenue Service Center Ogden, Utah 84201 RE: $3,850,000 Augusta, Georgia Airport General Revenue Refunding Bonds, Series 2015B (AMT) To the Addressee: Augusta, Georgia has heretofore issued and delivered the Bonds referenced above and encloses herewith a completed I.R.S. Form 8038 "Information Return for Tax- Exempt Private Activity Bond Issues," with respect to such Bonds. If you should have any questions concerning the enclosed Form 8038, please contact me at the above address. Sincerely, Teresa P. Finister Enclosure TELEPHONE: (678) 999 -0350 • FACSIMILE: (678) 999.0357 • INTERNET: www.murraybarnt:slaw.com Form 8038 Information Return for Tax - Exempt (Rev. April 2011) Private Activity Bond Issues Department of the Tr awry (Under Internal Revenue Code section 149(e)) trnen,st Revenue seines ► see separate instructions. OMB No. 1545 -0720 Check if Amended Return ► 1 Issuers name 2 lower's employer iderrtiflcation number Au g usta, Georgia 58- 2204274 so Name of person (other than issuer) with whom the IRS may communicate about this return (see instructions) 3b Telephone number of other person shown on 3a James T. Plunkett, Esq. 706 -722 -4111 4 Number and street (or P.O. box if matt is not delivered to street address) Roo m/su to Use 5 port number w /R Only) 530 Greene Street . . 1 6 City, town, or post office. state, and ZIP code 7 Date of issue (MMJDO(YYY1) Augusta, Georgia 30901 0912412015 8 Name of issue 9 CUSIP number Augusta, Georgia Airport General Revenue Refunding Bonds, Series 20156 (AMT) 051177CC5 10a Name and title of officer or other employee of the issuer whom the IRS may call for more information 10b Telephone number M officer or other employee shown on t0a Timothy E. Schroer, CPA, Assistant Director of Finance 706.821.1741 Type of Issue Enter the issue rice. Issue Price 11 Exempt facility bond: a Airport (sections 142(a)(1) and 142(c)) . . . . . . . . . . . . . . . . . . . . . 11a 4,212,595 b Docks and wharves (sections 142(a)(2) and 142(c)) . . . . . . . . . . . . . . . . 11b c Water furnishing facilities (sections 142(a)(4) and 142(e)) . . . . . . . . . . . . . . 111C d Sewage facilities (section 142(x)(5)) . . . . . . . . . . . . . . . . . . . . . 11d is Solid waste disposal facilities (section 142(a)(6)) . . . . . . . . . . . . . . . . . 11e f Qualified residential rental projects (sections 142(a)(7) and 142(4)) (see instructions) . . . . . 11f Meeting 20-50 test (section 142(d)(1)(A)) . . . . . . . . . . . . ❑ - Meeting 40-60 test (section 142(d)(1)(121)) . . . . . . . . . . . ❑ } Meeting 25-60 test (NYC only) (section 142(d)(6)) . . . . . . . . . . ❑ Has an election been made for deep rent skewing (section 142(d)(4)(B))? ❑ Yes ❑ No g Facilities for the local furnishing of electric energy or gas (sections 142(axB) and 142(f)) . . . . 119 h Facilities allowed under a transitional rule of the Tax Reform Act of 1986 (see instructions) 11 h Facility type r, 1986 Act section - -----------------------•- ---- -- -------- - - - -- i ---•-•----------- --- -• •-------------------••-----•-- --•-- -- ---- Qualified enterprise zone facility bonds (section 1394) (see instructions) . . . . . . . - . . 11 i J Qualified empowerment zone facility bonds (section 1394(f)) (see instructions) . . . . . . . 11 k District of Columbia Enterprise Zone facility bonds (section 1400A) . . . . . . . . . . . 11k Qualified public educational facility bonds (sections 142(a)(13) and 142(k)) . . . . . . . . 111 m Qualified green building and sustainable design projects (sections 142(a)(14) and 1420)) . . . . 11m n Qualified highway or surface freight transfer facilities (sections 142(a)(15) and 142(m)) . . . . . 11 n o Other (see instructions) -- ---- -•....- •-••Fa "1- p ............... Qualified New York Liberty Zone bonds (section 140OL(d)) 11p q Other (see instructions) llq 12a Qualified mortgage bond (section 143(a)) . . . . . . . . . . . . . . . . . . . 12a b Other (see instructions) 12b 13 Qualified veterans' mortgage bond (section 143(b)) (see instructions) . . . . . . . . . ► 13 Check the box if you elect to rebate arbitrage profits to the United States . . . . . ❑ 14 Qualified small issue bond (section 144(a)) (see instructions) . . . . . . . . . . . . ► 14 Check the box for $10 million small issue exemption . . . . . . . . . . . . ❑ 15 Qualified student loan bond (section 144(b)) . . . . . . . . . . . . . . . . . . 15 16 Qualified redevelopment bond (section 144(c)) . . . . . . . . . . . . . . . . . 16 17 Qualified hospital bond (section 145(c)) (attach schedule -see instructions) . . . . . . . . 17 18 Qualified 501(c)(3) nonhospital bond (section 145(b)) (attach schedule -see Instructions) . . . . 18 Check box if 95% or more of net proceeds will be used only for capital expenditures . ► ❑ 19 Nongovernmental output property bond (treated as private activity bond) (section 141(d)) . . . 19 20a Other (see instructions) -- ----- -------------- ---- --- --- ------- -- ------- -- ----- - ------ ---------------------- b -- -------- New York Liberty Zone advance refunding bond (section 1400L(e)) (see instructions) 20b c Other. Describe (see instructions) ► 2pc For Paperwork Reduction Act Notice, see separate instructions. Cat. No. 49973K Form 8038 (Rev. 4.2011) Form 8038 (Rev. 4-2011) Page 2 Description of Bonds (Complete for the entire issue for which this form is being filed. 1+1 Final maturity date (b) Issue price (c► Stated redemption (dl Weighted (e) yield price at maturity average maturity 21 01/0112025 $ 4,212,5951 $ 3,850,000 5.6246 years 3.6644 22 Proceeds used for accrued interest . . . . . . . . . . . . . . . . . . . . . 22 23 Issue price of entire issue (enter amount from line 21, column (b)) . . . . . . . 23 4,212,595 24 Proceeds used for bond issuance costs (including underwriters' discount) 24 77, 000 ni .- ur�1 , 25 Proceeds used for credit enhancement . . . . . . . . 25 == 26 Proceeds allocated to reasonably required reserve or replacement fund 28 =- 27 Proceeds used to currently refund prior issue (complete Part V0 . . . . 27 4,133 684* 28 Proceeds used to advance refund prior issue (complete Part VI) . . . . 28 29 Add lines 24 through 28 . . . . . . . . . . . . . . . . . . . . . . . . . 29 4,210,684 30 Nonrefunding proceeds of the issue (subtract line 29 from line 23 and enter amount here) 30 11911 Description of Property Financed by Nonrefunding Proceeds Caution: The total of lines 31a through a below must equal line 30 above. Do not complete for qualified student loan bonds, qualified mortgage bonds, or qualified veterans' mortgage bonds. 31 Type of Property Financed by Nonrefunding Proceeds. Amount a land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31a b Buildings and structures . . . . . . . . . . . . . . . . . . . . . . . . . 31b c Equipment with recovery period of more than 5 years . . . . . . . . . . . . . . 31c d Equipment with recovery period of 5 years or less . . . . . . . . . . . . . . . 31d e Other. Describe (see instructions) Working capital 319 1,911 NAILS Code I Amount of nonrefunding proceeds I I NAILS Code I Amount of nonrefunding proceeds a 1 488119 1 $ 1.9111 C 1 1 $ 33 Enter the remaining weighted average maturity of the bonds to be currently refunded . . . . . . ► 13.7694 years 34 Enter the remaining weighted average maturity of the bonds to be advance refunded . . . . . . ► years 35 Enter the last date on which the refunded bonds will be called . . . . . . . . . . . . . ► 110 / 02 / 2015 36 Enter the date(s) the refunded bonds were issued ► 03/03/2005 37 Name of governmental unit(s) approving issue (see the instructions) ► Refunded Bonds approved_b7 Mayor of Augusta, Georgia ..... following public hearing on February 22, 2005 ---- •------------------------------------------------•------- ....-•••-•---••........•-----•. 38 Check the box if you have designated any Issue under section 265(b)(3)(B)()(III) . . . . . . . . . . . . . . ► ❑ 39 Check the box if you have elected to pay a penalty in lieu of arbitrage rebate . . . . . . . . . . . . . . ► ❑ 40a Check the box if you have Identified a hedge and enter the following information . . . . . . . . . . . . . ► ❑ b Name of hedge provider _ ___ c Type of hedge ► ................................ d Term of hedge __ __ _••_-_- 41 Check the box if the hedge is superintegrated . . . . . . . . . . . . . . . . . . . . . ► ❑ 42a Enter the amount of gross proceeds Invested or to be invested in a guaranteed investment contract (GIC) lo- b Enter the final maturity date of the GIC . . . . . . . . . . . . . . . . . . . . . . ► / / c Enter the name of the GIC provider ► 43 Check the box if the issuer has established written procedures to ensure that all nonqualified bonds of this issue are remediated in accordance with the requirements under the Code and Regulations (see instructions) . . . . . . . ► 44 Check the box if the issuer has established written procedures to monitor the requirements of section 148 . . . . ► ❑r 45a Enter the amount of reimbursement if some portion of the proceeds was used to reimburse expenditures . lo- b Enter the date the official intent was adopted . . . . . . . . . . . . . . . . . . . . ► / / 46 Check the box if the issue is comprised of qualified redevelopment, qualified small issue, or exempt facilities bonds and provide name and EIN of the primary private user . . . . . . . . . . . . . . . . . . . . . . . ► Name► Augusta. Georgia EIN 58-2204274 Form OM (Rev. 4 -2011) Form 8038 (Rev. 4 -2011) Pa c e 3 rdasm volume caps amount 47 Amount of state volume cap allocated to the issuer. Attach copy of state certification . . . . 47 48 Amount of Issue subject to the unified state volume cap . . . . . . . . . . . . . . 48 49 Amount of Issue not subject to the unified state volume cap or other volume limitations; 49 a Of bonds for governmentally owned solid waste facilities, airports, docks, wharves, environmental enhancements of hydroelectric generating facilities, or high -speed intercity rail facilities . . . . 49a b Under a carryforward election. Attach a copy of Form 8328 to this return . . . . . . . . . 49b c Under transitional rules of the Tax Reform Act of 1986. Enter Act section ► 49c d Under the exception for current refunding (section 146() and section 1313(a) of the Tax Reform Act of 1986) 49d We Amount of issue of qualified veterans' mortgage bonds . . . . . . . . . . . . . . . 50a b Enter the state limit on qualified veterans' mortgage bonds . . . . . . . . . . . . . 50b 51a Amount of section 1394(f) volume cap allocated to issuer. Attach copy of local government certification 51a b Name of empowerment zone ► 52 Amount of section 142(k)(5) volume ca allocated to issuer. Attach copy of state certification 52 Under penalties of perjury, I declare that I have examined this rettum, and accompanying schedules and statements, and to the best of my knowledge and Signature belief, they are true, correct, and complete. l further declare t to the IRS's disclosure of the issuers return information, as necessary to process and this M to the P authaiz Consent Hardie Davis, Jr., Mayor S"turs of issuer's authorized rWes"16tive I Date ` Type or print name and title Paid Printlrype preparees name P 's ' nature Date Check 0 If Preparer's PnN Prepa>trer Teresa P. Finister 9fof y es sNt amplayed P01433775 Use Only Farm's name ► Murra Barnes Finister LLP Firm'e EIN ► 80- 0084586 Firm's addresa ► 3525 Piedmont Road NE, Bldg 5, Suite 515, Atlanta, GA 30305 Phone no. 678.989 -0350 Form l (Rev. 4.2011) Search % United States - English erms of Use I Security and Privacy Dt; livered Sh"Wina -3 of ; d - � 7 Shlp date . Actual delivery Customer Focus New Customer Center Thur 912412015 9l25t2015 10:01 am Small Business Center MURRAY BARNES LLP Department of the Treasury Service Guide Delivered Customer Support ( Building 5. Suite 515 Signed ror by .AHiORGAN SERVICE CTR 3525 Piedmont Road NE °' OGDEN, UT US 84201 Company Information ATLANTA, GA US 30305 -_ -_. 8008294933 About FedEx 678 999 -0350 y Careers Investor Relations Tr History �Daterrime Activity Location .c) FedEx 1995 -2015 - 9/25/2015 - Friday 10:01 am Delivered aC �sN ur 8 13 am On FedEx vehicle for delivery vcoeN r 7:24 am At local FedEx facility 530 am At destination sort facility SJ4r•..4K@C- •Jr 3.41 am Departed FedEx location NteWuis FN 12.05 am Arrived at FedEx location Nirr.wris rN - 9/24/2015 - Thursday 7.26 pm Picked up N: -.aiE• •:, ,;, 11:33 am Shipment mfermabon sent to FedEx Shipment Facts Tracking 774586192861 Service FedEx Priority Overnight number Delivery 1 Weight 0.5 lbs / 0.23 kgs attempts Delivered To Shipping /Receiving Total pieces 1 Total Terms Not Available shipment 05 Ins / 0.23 kgs Packaging FedEx Envelope weight Shipper 1496 reference Special handling Deliver Weekday section Search % United States - English erms of Use I Security and Privacy - -- DEBT ISSUANCE REPORT - Georgia Department of Community Affairs , 60 Executive Park South, N.E. •a__a_ i+___a_ wwwww www� Chapter 82 of Title 36 of the Official Code of Georgia requires any municipality, county, local government authority, board or other commission empowered to enter into debt, which issues general obligation bonds, revenue bonds, or any other bond notes, certificates of participation, or other such obligations in an amount exceeding $1 million, to file a report with the Department of Community Affairs. Please complete this Report and save it to your hard drive. Please do not mail a hard copy. EMAIL a copy of your saved report to: debt. issuance@dca.ga.gov (Use Proper Case (Upper /Lower); Do NOT type in all Upper Case.] Legal Name of Entity Issuing Debt: [Augusta, Georgia Entity Contact Person: Name jJames T. Plunkett, Es q. Entity Phone: 706 - 722 -4111 9/1/15 Date of Issue: 9/24/15 01/2 (month /year only) Date of Pricing: Maturity Date: This Issue has varying maturity dates: Yes (Change No to Yes if applicable) Amount of Debt Issued: $3,850 (whole dollars only, no cents) (use dropdown list) Select Type of Issue: [Refundin Amount of Issuance Costs: $77,( Interest Rate: This issue has variable interest rates: This issue has multiple non - variable rates: True Interest Percentage: 3.290% the Serial and Term Bonds Schedule must also be completed. (Use tab at bottom) Purpose(s) for which debt was issued (Change No to Yes where applicable) Public buildings Public transit system Single family housing Solid waste system Telecommunications Water /sewer system Other (must specify b F N _ o _ j Economic Development Bond FY Facility Bond (Private Activity) (Only ONE may be YES) Provide a detailed description of the purpose(s) of the debt: To finance (i) the refunding of all of the Augusta, Georgia Airport General Revenue Bonds, Series 2005C (AMT) and (ii) paying a portion of the costs of issuing the Series 2015B Bonds. Beneficiary of Bond Proceeds IF different from Issuer: Name of Lead Bond Underwriter: Raymond James & Associates, Inc. Name of Lead Bond Counsel: Murray Bames Finister LLP Sal First Name Middle Name Last Name Desig. (Jr.. Sr., etc.'. Person Completing This Report: I (Teresa Report Date: 91240015 Firm Name 678 -999 -0350 City State Zip Atlanta IGA 1 30305 (use dropdown list) Revenue Bonds If OTHER, Specify: 100 (whole dollars only, no cents) (Change No to Yes if applicable) No Yes NOTE: If Multiple non - variable rates is YES, Revised: 10/1 /2009R Yes Airport No Health care No Education No Highways, streets and drainage No Electric utility system No Industrial revenue bonds No Enterprize Zone facility No Jails No Exempt facility bonds No Law enforcement and corrections No Fire protection No Multi- family housing No Gas utility system No Parks and recreation facilities Other: Recovery Zone Bond Allocation? = (Change No to Yes if applicable) If YES, one of these two boxes MUST be "Yes ": Public buildings Public transit system Single family housing Solid waste system Telecommunications Water /sewer system Other (must specify b F N _ o _ j Economic Development Bond FY Facility Bond (Private Activity) (Only ONE may be YES) Provide a detailed description of the purpose(s) of the debt: To finance (i) the refunding of all of the Augusta, Georgia Airport General Revenue Bonds, Series 2005C (AMT) and (ii) paying a portion of the costs of issuing the Series 2015B Bonds. Beneficiary of Bond Proceeds IF different from Issuer: Name of Lead Bond Underwriter: Raymond James & Associates, Inc. Name of Lead Bond Counsel: Murray Bames Finister LLP Sal First Name Middle Name Last Name Desig. (Jr.. Sr., etc.'. Person Completing This Report: I (Teresa Report Date: 91240015 Firm Name 678 -999 -0350 City State Zip Atlanta IGA 1 30305 (use dropdown list) Revenue Bonds If OTHER, Specify: 100 (whole dollars only, no cents) (Change No to Yes if applicable) No Yes NOTE: If Multiple non - variable rates is YES, Revised: 10/1 /2009R DEBT ISSUANCE REPORT - Georgia Department of Community Affairs ; 60 Executive Park South, N.E. _ Atlanta, Georgia 30329 -2231 [ - Schedule of Serial and Term Bonds 1 2 3 4 5 8 7 8 9 1C 11 12 13 14 15 16 17 18 19 2C 21 22 23 24 25 26 27 28 29 3C 31 32 33 34 35 36 37 38 39 4C Maturity Date Type of Issue Principal Amount Interest Rate month! ear Alternative Min. Tax or Non - Alternative Min. Tax whole dollars only) (percentage (use dropdown list) 01/2017 Alternative Min. Tax $350,000 5.000% 01/2018 Alternative Min. Tax $365,000 5.000% 01/2019 Alternative Min. Tax $385,000 5.000% 01/2020 Alternative Min. Tax $405,000 5.000% 01/2021 Alternative Min. Tax $425,000 5.000% 01/2022 Alternative Min. Tax $445,000 5.000% 01/2023 Alternative Min. Tax $470,000 5.000% 01/2024 Alternative Min. Tax $490,000 5.000% 01/2025 Alternative Min. Tax $515,000 5.000% Alternative Min. Tax Alternative Min. Tax Alternative Min. Tax Alternative Min. Tax Alternative Min. Tax Alternative Min. Tax Alternative Min. Tax Alternative Min. Tax Alternative Min. Tax Alternative Min. Tax Alternative Min. Tax Alternative Min, Tax Alternative Min. Tax Alternative Min. Tax Alternative Min. Tax Alternative Min. Tax Alternative Min. Tax Alternative Min. Tax Altentative Min. Tax Alternative Min. Tax Alternative Min. Tax Alternative Min. Tax Alternative Min. Tax Alternative Min. Tax Alternative Min. Tax Alternative Min. Tax Alternative Min. Tax Alternative Min. Tax Alternative Min. Tax Alternative Min. Tax Alternative Min. Tax From: Eric Lopez <Eric.Lopez @dca.ga.gov> Sent: Friday, September 25, 2015 10:27 AM To: Rachel Jones Subject: CONFIRMATION OF RECEIPT -- DEBT ISSUANCE - Augusta Series B Bonds Rachel, Thank you for submitting a Debt Issuance Report for Augusta, Georgia. Please retain this email as documentation that the Department of Community Affairs' Office of Research received from Murray Barnes Finister LLP via email a Debt Issuance Report for debt issued by Augusta, Georgia on the date and in the amount indicated below. Date of Issuance: 9/24/2015 Amount Issued: $3,850,000 If you have any questions or otherwise need assistance please feel free to contact me. Thank you! (i Georgia Community Affairs r_ e it i mo) e aoaut o:ir commirmeo; to `a t� array Eric Lopez Government Research & Survey Program Coordinator Georgia Department of Community Affairs 60 Executive Park South, NE Atlanta, Georgia 30329 Direct 404 -679 3127 Fax 404 -679 -0572 Er c._Lopez dc a .ga.p 1 DEBT ISSUANCE REPORT Georgia Department of Community Affairs , 60 Executive Park South, N.E. Chapter 82 of Title 36 of the Official Code of Georgia requires any municipality, county, local government authority, board or other commission empowered to enter into debt, which issues general obligation bonds, revenue bonds, or any other bond notes, certificates of participation, or other such obligations in an amount exceeding $1 million, to file a report with the Department of Community Affairs. ease complete this Report and save it to your hard drive. Please do not mail a hard copy. EMAIL a copy of your saved report to: [Use Proper Case (Upper /Lower); Do NOT type in all Upper Case.] Legal Name of Entity Issuing Debt: JAugusta, Georgia Entity Contact Person: Name jJames T. Plunkett, Esq. I Entity Phone: 706- 722 -4111 Date of Pricing: 1 9/1/15 Date of Issue: 9/24/15 Maturity Date: 1 01/2035 (month/year only) This Issue has varying maturity dates: Yes (Change No to Yes if applicable) Amount of Debt Issued: 1 $6,675,000 (whole dollars only, no cents) (use dropdown list) Select Type of Issue: lRefundin Amount of Issuance Costs: $317,( Interest Rate: 0 This issue has variable interest rates: This issue has multiple non - variable rates: True Interest Percentage: 4.280% (use dropdown list) Revenue Bonds If OTHER, Specify: 111 (whole dollars only, no cents) (Change No to Yes if applicable) No Yes I NOTE: If Multiple non - variable rates is YES, the Serial and Term Bonds Schedule must also be completed. (Use tab at bottom) Pu os @(s) for which debt was issued: (Change No to Yes where applicable) Yes Airport No Health care No Education No Highways, streets and drainage No Electric utility system No Industrial revenue bonds No Enterprize Zone facility No Jails No Exempt facility bonds No Law enforcement and corrections No Fire protection No Multi- family housing No H Gas utility system No Parks and recreation facilities Other: Recovery Zone Bond Allocation? = ( Change No to Yes if applicable) If YES, one of these two boxes MUST be "Yes ": Public buildings Public transit system Single family housing Solid waste system Telecommunications Water /sewer system Other (must specify b FN_o_j Economic Development Bond No Facility Bond (Private Activity) (Only ONE may be YES) Provide a detailed description of the purpose(s) of the debt: To finance the (i) refunding of all of the Augusta, Georgia Airport Passenger Facility Charge and General Revenue Bonds, Series 2005A (Non -AMT) and (ii) paying the costs of issuing the Series 2015A Bonds. Beneficiary of Bond Proceeds IF different from Issuer: Name of Lead Bond Underwriter: I Raymond mond James &Associates, Inc. Name of Lead Bond Counsel: IMurray Bames Finister LLP S al First Name Middle Name Last Name Desia. (Jr., Sr., etc. Person Completing This Report: Report Date: 9/2412015 Firm Name 678 - 999 -0350 City State Zip Atlanta GA 30305 Revised: 10/1/2009R DEBT ISSUANCE REPORT Georgia Department of Community Affairs 60 Executive Park South, N.E. Atlanta, Georgia 30329 -2231 Schedule of Serial and Term Bonds 1 2 3 4 5 6 7 8 9 1c 11 12 13 14 15 16 17 18 19 2C 21 22 23 24 25 26 27 28 29 X 31 32 33 34 35 36 37 38 39 4a Maturity Date Type of Issue Principal Amount Interest Rate month/ ear Alternative Min. Tax or Non - Alternative Min. Tax whole dollars only) (percentage (use dropdown list) 01/2026 Non - Altemative Min. Tax $530,000 5.000% 01/2027 Non-Alternative Min. Tax $560 5.000% 01/2028 Non - Altemative Min. Tax $585,000 5.000% 01/2029 Non - Altemative Min. Tax $615,000 5.000% 01/2030 Non - Altemative Min. Tax $645,000 5.000% 01/2031 Nan - Altemative Min. Tax $675,000 5.000% 01/2032 Non - Alternative Min. Tax $710,000 5.000% 01/2033 Non - Alternative Min. Tax $745,000 5.000% 01/2034 Non - Alternative Min. Tax $785,000 5.000% 01/2035 Non - Altemative Min. Tax $825,000 5.000% Non - Altemative Min. Tax Non - Altemative Min. Tax Non - Altemative Min. Tax Non - Altemative Min. Tax Non - Alternative Min. Tax Non-Alternative Min. Tax Non - Altemative Min. Tax Non - Altemative Min. Tax Non - Altemative Min. Tax Non - Alternative Min. Tax Alternative Min. Tax Alternative Min. Tax Alternative Min. Tax Alternative Min. Tax Alternative Min. Tax Alternative Min. Tax Alternative Min. Tax Alternative Min. Tax Alternative Min. Tax Alternative Min. Tax Alternative Min. Tax Alternative Min. Tax Alternative Min. Tax Alternative Min, Tax Altemative Min. Tax Altemative Min. Tax Alternative Min. Tax Alternative Min. Tax Alternative Min. Tax Alternative Min. Tax Rachel Jones From: Eric Lopez <Eric.Lopez @dca.ga.gov> Sent: Friday, September 25, 2015 10:23 AM To: Rachel Jones Subject: CONFIRMATION OF RECEIPT -- DEBT ISSUANCE - Augusta Series A Bonds Rachel, Thank you for submitting a Debt Issuance Report for Augusta, Georgia. Please retain this email as documentation that the Department of Community Affairs' Office of Research received from Murray Barnes Finister LLP via email a Debt Issuance Report for debt issued by Augusta, Georgia on the date and in the amount indicated below. Date of Issuance: 9/24/2015 Amount Issued: $6,675,000 If you have any questions or otherwise need assistance please feel free to contact me. Thank you! (A Georgia Community Affairs Learn more about our commitment to ta;r ho uses Eric Lopez Government Research & Survey Program Coordinator Georgia Department of Community Affairs 60 Executive Park South, NE Atlanta, Georgia 30329 Direct 404 -679 -3127 Fax 404 - 679 -0572 Eric Lopez @dca_ga.go_v 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. "Issuer" means Augusta, Georgia, a political subdivision of the State of Georgia, its successors and assigns. for the Bonds. "Paying Agent" means the Bank when it is performing the function of paying agent "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. Register. "I" "Registered Owner" means a Person in whose name a Bond is registered in the Bond "Registrar" means the Bank when it is performing the function of registrar for the "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. Al2pointment 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. Registrar. The Bank hereby accepts its appointment, and agrees to act as Paying Agent and 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 2 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 Pang 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. 3 ARTICLE FOUR 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 Re ig strar 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 4 period then in effect and shall thereafter be destroyed and evidence of such destruction fiarnished 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. 5 (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. 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 7 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. Severabilitv 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 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. 7 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 p ove4A' Hardie Davis, Jr. Mayor (Paying Agent and Bond Registrar Agreement) U.S. BANK NATIONAL ASSOCIATION, as Paying Agent and Bond Registrar By: - -- Authorized Representative (Paying Agent and Bond Registrar Agreement) OFFICER'S CERTIFICATE OF THE PAYING AGENT, BOND REGISTRAR AND DEPOSITORY OF THE AIRPORT DEBT SERVICE FUND, THE AIRPORT DEBT SERVICE RESERVE FUND, THE 2015 DEFEASANCE ACCOUNT AND THE COSTS OF ISSUANCE FUND The undersigned officer of U.S. Bank National Association, Atlanta, Georgia, as Paying Agent, Bond Registrar, and Depository of the Airport Debt Service Fund, Airport Debt Service Reserve Fund, 2015 Defeasance Account and the Costs of Issuance Fund pursuant to the hereinafter defined Bond Resolution (such roles collectively referred to as the "Bank "), DOES HEREBY CERTIFY that the undersigned has the authority to execute this Certificate, and the undersigned DOES HEREBY FURTHER CERTIFY, as follows: 1. The Bank is a national banking association duly organized and existing under the laws of the United States of America and authorized to do business in the State of Georgia. Under the applicable laws of the United States and the State of Georgia, the Bank is authorized and qualified to accept its duties of Bond Registrar, Paying Agent and Depository of the Airport Debt Service Fund, Airport Debt Service Reserve Fund, 2015 Defeasance Account and the Costs of Issuance Fund under the resolution adopted by the Augusta - Richmond County Commission (the "Commission "), the governing body of Augusta, Georgia (the "Consolidated Government ") and the Augusta Aviation Commission, an agency of the Consolidated Government (the "Aviation Commission ") on September 1, 2015 (the "Bond Resolution ") authorizing the issuance of $6,675,000 in aggregate principal amount of Augusta, Georgia Airport General Revenue Refunding Bonds, Series 2015A (Non -AMT) and $3,850,000 in aggregate principal amount of Augusta, Georgia Airport General Revenue Refunding Bonds, Series 2015B (AMT) (collectively, the "Series 2015 Bonds "), the Paying Agent and Bond Registrar Agreement, dated as of September 1, 2015 (the "Paying Agent Agreement "), between the Consolidated Government and the Bank and the Custodial Agreement, dated as of September 1, 2015 (the "Custodial Agreement" and together with the Paying Agent Agreement, the `Bank Agreements "), among the Consolidated Government, the Aviation Commission and the Bank. The Bank has duly authorized by all necessary corporate action the authentication of the Series 2015 Bonds and the performance of its other duties under the Bond Resolution and the Bank Agreements. 2. The Bank has received a certified copy of the Bond Resolution. 3. The Bank has received the Series 2015 Bonds from the Consolidated Government and has, pursuant to the Authentication Order of the Consolidated Government, duly authenticated and registered the Series 2015 Bonds in the name of Cede & Co., as nominee for The Depository Trust Company ( "DTC "), in accordance with the instructions of Raymond James & Associates, Inc., as purchaser of the Series 2015 Bonds, and is holding the Series 2015 Bonds on behalf of DTC. 4. The Series 2015 Bonds were authenticated and the Bank Agreements were executed by the Bank, by persons who, at the time of affixing their signatures, were and still are officers of the Bank, and said officers were and are duly authorized to authenticate the Series 2015 Bonds and execute and deliver the Bank Agreements on behalf of the Bank. 5. No authorization or approval of any banking regulatory agency having jurisdiction over the Bank that has not already been obtained is required with respect to the performance of the Bank's duties under the Bond Resolution and the Bank Agreements. 6. The Bank, in acting as Bond Registrar, Paying Agent and Depository of the Airport Debt Service Fund, Airport Debt Service Reserve Fund, 2015 Defeasance Account and the Costs of Issuance Fund and in the execution and delivery and performance of its obligations under the Bank Documents is not in violation of any provision of its Articles of Incorporation or Bylaws, any law, regulation or court or administrative order or any agreement or other instrument to which it is a party or by which it may be bound 7. There is no litigation known to the Bank, pending or, to the best of my knowledge, threatened, in any court, calling into question the creation, organization or existence of the Bank or its authority to perform its duties under the Bond Resolution and the Bank Agreements. 8. Attached hereto as Exhibit A is a true and correct copy of those portions of the Articles of Incorporation, Bylaws and/or Corporate Resolutions of the Bank respecting the corporate powers of the Bank and the authority of certain officers of the Bank to execute and deliver documents for and on behalf of the Bank; and that said provisions of the Articles of Incorporation, Bylaws and/or Corporate Resolutions were in effect on the date or dates said officers acted and remain in full force and effect on the date hereof. 2 WITNESS my hand, this 24th day of September, 2015. U.S. BANK NATIONAL ASSOCIATION, as Paying Agent, Bond Registrar, and Depository of the Airport Debt Service Fund, Airport Debt Service Reserve Fund, 2015 Defeasance Account and the Costs of Issuance Fund By. r- �---r � Vice President (Officer's Certificate of the Paying Agent, Bond Registrar and Depository of the Airport Debt Service Fund, the Airport Debt Service Reserve Fund, the 2015 Defeasance Account and the Costs of Issuance Fund) CUSTODIAN AGREEMENT THIS CUSTODIAN AGREEMENT (this "Agreement "), is entered into as of September 1, 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," the "2005 Defeasance Account" 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. "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 40 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. 2 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 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. 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 4 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 hereto. parties. Section 5.01. Amendment. This Agreement may be amended only by an agreement in writing signed by both of the parties Section 5.02. Assi ng� ment This Agreement may not be assigned by any party without the prior written consent of the other 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 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. Counterpart s . 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 6 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. 7 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: H rdie Davis, Jr. Mayor i By: r Cedric Johns6 Chairman, Augusta Aviation Commission U.S. BANK NATIONAL ASSOCIATION, as Custodian Authorized Representative (Custodian 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. LN AUGUSTA, GEORGIA By: Hardie Davis, Jr. Mayor Cedric Johnson Chairman, Augusta Aviation Commission U.S. BANK NATIONAL ASSOCIATION, as Custodian By: Authorized Representative (Custodian Agreement) CERTIFICATE OF DEPOSITORY OF AIRPORT REVENUE FUND, AIRPORT PFC REVENUE FUND, AIRPORT OPERATION AND MAINTENANCE FUND, AIRPORT CAPITAL IMPROVEMENT FUND AND AIRPORT PFC CAPITAL FUND The undersigned, Regions Bank (the "Bank ") as Depository of the Augusta, Georgia Airport Revenue Fund (the "Revenue Fund "), the Augusta, Georgia Airport PFC Revenue Fund, and within such fund the Pledged PFC Series 2015 Account (the "PFC Revenue Fund "), the Augusta, Georgia Airport Operations and Maintenance Fund (the "O &M Fund "), the Augusta, Georgia Capital Improvement Fund (the "Capital Improvement Fund ") and the Augusta, Georgia Airport PFC Capital Fund (the "PFC Capital Fund "), each established pursuant to the Master Bond Resolution adopted by the Augusta - Richmond County Commission and the Augusta Aviation Commission on September 1, 2015 (the "Master Bond Resolution ") in connection with the issuance of $6,675,000 in aggregate principal amount of Augusta, Georgia Airport General Revenue Refunding Bonds, Series 2015A (Non -AMT) and $3,850,000 in aggregate principal amount of Augusta, Georgia Airport General Revenue Refunding Bonds, Series 2015B (AMT) (collectively, the "Series 2015 Bonds "), hereby certifies, as follows: 1. The Bank has received a copy of the Master Bond Resolution pursuant to which the Bank was designated as Depository of the Revenue Fund, the PFC Revenue Fund, the O &M Fund, the Capital Improvement Fund and the PFC Capital Fund. 2. The Bank accepts the duties of Depository of the Revenue Fund, the PFC Revenue Fund, the O &M Fund, the Capital Improvement Fund and the PFC Capital Fund in connection with the Series 2015 Bonds as set forth in the Master Bond Resolution. 3. The Bank is a state banking association duly organized and existing under the laws of the State of Alabama and is authorized to transact business in the State of Georgia. The Bank is authorized and qualified to act as Depository of the Revenue Fund, the PFC Revenue Fund, the O &M Fund, the Capital Improvement Fund and the PFC Capital Fund. 4. The Bank, in acting as Depository of the Revenue Fund, the PFC Revenue Fund, the O &M Fund, the Capital Improvement Fund and the PFC Capital Fund is not in violation of any provision of its Articles of Incorporation or Bylaws, any law, regulation or court or administrative order or any agreement or other instrument to which it is a party or by which it may be bound. 5. The Bank hereby agrees to comply in all respects with the requirements imposed under the Master Bond Resolution regarding the custody and investments of all monies deposited with the Bank in the Revenue Fund, the PFC Revenue Fund, the O &M Fund, the Capital Improvement Fund, and the PFC Capital Fund. 6. The Bank has established the Revenue Fund, the PFC Revenue Fund, the O &M Fund, the Capital Improvement Fund, and the PFC Capital Fund pursuant to the Master Bond Resolution. 7. The Bank acknowledges receipt of $2,952,995.23 from U.S. Bank National Association, of which $1,595,168.83 shall be deposited by the Bank in the Capital Improvement Account of the Capital Improvement Fund and $1,357,826.40 shall be deposited by the Bank to the credit of the PFC Capital Fund. 8. Attached hereto as Exhibit A is a true and correct copy of those portions of the Articles of Incorporation, Bylaws and/or Corporate Resolutions of the Bank respecting the corporate powers of the Bank and the authority of certain officers of the Bank to execute and deliver documents for and on behalf of the Bank; and that said provisions of the Articles of Incorporation, Bylaws and/or Corporate Resolutions were in effect on the date or dates said officers acted and remain in full force and effect on the date hereof. WITNESS my hand, this 24th day of September, 2015. REGIONS BANK, as Depository of the Revenue Fund, the PFC Revenue Fund, the O &M Fund, the Capital Improvement Fund and the PFC Capital Fund By: yr r, Vice President M Ch&AI V - DLLL1400r -fir -� (Certificate of Depository of Airport Revenue Fund, Airport PFC Revenue Fund, Airport Operation and Maintenance Fund, Airport Capital Improvement Fund and Airport PFC Capital Fund) BOND PURCHASE AGREEMENT between AUGUSTA, GEORGIA as Issuer and RAYMOND JAMES & ASSOCIATES, INC. as Underwriter Dated: September 1, 2015 relating to $6,675,000 $3,850,000 Airport General Revenue Refunding Bonds, Airport General Revenue Refunding Bonds, Series 2015A (Non -AMT) Series 2015B (AMT) TRANSACTION PARTICIPANTS & IMPORTANT DATES Issuer: Augusta, Georgia Underwriter: Raymond James & Associates, Inc. Securities: $6,675,000 Augusta, Georgia Airport General Revenue Refunding Bonds Series 2015A (Non -AMT) (the "Series 2015A Bonds ") $3,850,000 Augusta, Georgia Airport General Revenue Refunding Bonds, 2015B (AMT) (the "Series 2015B Bonds," and together with the Series 2015A Bonds, where applicable, the "Series 2015 Bonds ") Acceptance Deadline: September 1, 2015, 10:00 p.m. (eastern standard time). Effective Date and Time: September 1, 2015, 6:00 p.m. (eastern standard time). Closing Date: September 24, 2015 TABLE OF CONTENTS Section Title Page Section 1. Offer to Purchase the Securities ......................................... ..............................1 Section 2. Documents Comprising the Agreement ............................ ............................... l Section 3. Purchase of the Securities .................................................. ..............................1 Section4. Purchase Price .................................................................... ..............................2 Section5. Public Offering .................................................................. ............................... 2 Section 6. Official Statement ............................................................. ............................... 2 Section 7. Representations and Warranties ......................................... ..............................4 Section 8. Covenants of the Issuer ..................................................... ............................... 4 Section9. Closing .............................................................................. ............................... 4 Section 10. Closing Conditions ............................................................ ............................... 5 Section 11. Termination Events ........................................................... ............................... 6 Section 12. Payment of Expenses ........................................................ ............................... 8 Section 13. Indemnification and Contribution ...................................... ..............................9 Section14. Notices .............................................................................. .............................11 Section15. Reserved .......................................................................... ............................... 11 Section 16. Governing Law ................................................................. .............................11 Section 17. Miscellaneous ................................................................... .............................11 Section 18. Third -Party Credit Enhancement or Support .................... .............................11 Section19. Ratings .............................................................................. .............................11 Section20. Closing Date ...................................................................... .............................12 Section 21. Issue Price Certificate ....................................................... .............................12 Section 22. Accountants' Letter ........................................................... .............................12 Section 23. Indemnification and Contribution ..................................... .............................12 Section24. Counterparts ...................................................................... .............................12 Section25. 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 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 1 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 $11,382.075.07 equal to (i) $6,675,000.00 for the Series 2015A Bonds (representing par) less Underwriter's discount of $58,188.16 and plus original issue premium of $586,229.80 and (ii) $3,850,000.00 for the Series 2015E Bonds (representing par) less Underwriter's discount of $33,561.72 and plus original issue premium of $362,595.15. 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. 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 4 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 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 3 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. Section 9. Closm (a) At the Closing, the Issuer shall deliver Securities to DTC or to the Paying Agent on behalf described in subsection (b) below. The Securities shall duly executed by the Issuer and authenticated in the or cause to be delivered the of the Underwriter, as further be delivered in definitive form, manner set forth in the Bond Eli 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, 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 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. 5 (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 (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 no (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 relating to the Augusta Regional Airport at Bush Field; 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 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 7 (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, the 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; 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; 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 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) To the extent permitted by law, 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 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 E 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. 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. r 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. Ratin The following ratings on the Securities shall be in effect on the Closing Date: Moody's: Baa2 S &P: BBB Fitch: None 11 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 A Consent Letter, dated the date of the Preliminary Official Statement, an Agreed -Upon Procedures Letter and a Consent Letter, dated the date of the Official Statement, and a Bring - Down Letter, dated the Closing Date, of Mauldin & Jenkins, LLC, in the forms reasonably acceptable to the Underwriter will be delivered on or before the Closing Date. 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] 12 ACCEPTED AND AGREED: ISSUER: � � 7 L]" = i e ' + AUGUSTA, GEORGIA By: _►1 r _ Mayor, Augus Commission iN [Signature Page to Bond Purchase Agreement — Issuer] UNDERWRITER: RAYMOND JAMES & ASSOCIATES, INC. By: Aoorfied Rejies I ative [Signature Page to Bond Purchase Agreement - Underwriter] TERMS OF THE SECURITIES SERIES 2015A (Non -AMT)* Maturity Date Amount Rate Yield (January 1) 2026 $530,000 5.000% 3.440% 2027 560,000 5.000 3.580 2028 585,000 5.000 3.680 2029 615,000 5.000 3.800 2030 645,000 5.000 3.850 2031 675,000 5.000 3.930 2032 710,000 5.000 3.970 2033 745,000 5.000 4.020 2034 785,000 5.000 4.040 2035 825,000 5.000 4.070 * Indicates that the Series 2015A (Non -AMT) Bonds are priced to the January 1, 2025 call date. SERIES 2015B (AMT) Maturity Date Amount Rate Yield (January 1) 2017 $350,000 5.000% 1.320% 2018 365,000 5.000 1.760 2019 385,000 5.000 2.140 2020 405,000 5.000 2.440 2021 425,000 5.000 2.800 2022 445,000 5.000 3.140 2023 470,000 5.000 3.380 2024 490,000 5.000 3.540 2025 515,000 5.000 3.700 Schedule I - Page 1 SCHEDULE II. 11134WIIZIN1 C U 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 Augusta Aviation Commission on September 1, 2015 and by the Augusta - Richmond County Commission on September 1, 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. Exchange Act: The Securities Exchange Act of 1934, as amended. Schedule II - Page 1 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 and 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 25, 2015, relating to the Securities, together with all appendices or exhibits, any materials incorporated by reference therein and any amendments or supplements thereto. 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. Schedule II - Page 2 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: Augusta, Georgia Airport General Revenue Refunding Bonds, Series 2015A (Non -AMT). Series 2015B Bonds: Augusta, Georgia 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 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 11 - Page 3 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: MWO Schedule III - Page I 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, 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 notice, or both, would constitute a material default or event of default by the Issuer under any of the foregoing. Schedule IV - Page 1 (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 audited 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. 0) 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 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 Schedule IV - Page 2 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. (1) 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 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. Schedule IV - Page 3 (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 IV - Page 4 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 the form reasonably acceptable to the Underwriter. (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 DTC. (iv) An opinion of Freeman, Mathis & Gary, LLP addressed to the Underwriter and the Issuer, dated the Closing Date, and in form and substance reasonably acceptable to the Underwriter. (v) 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; July _, 2014 Page 2 (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; (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) 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 Schedule IV - Page 2 July 2014 Page 3 (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. (x) 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. (xi) First Amendment to the Airline Operating Agreement and Terminal Building Lease dated on or before the Closing Date between the Issuer and American Airlines, Inc. (xii) First Amendment to the Airline Operating Agreement and Terminal Building Lease dated on or before the Closing Date between the Issuer and Delta Air Lines, Inc. (xiii) A Consent Letter, dated the date of the Preliminary Official Statement, an Agreed -Upon Procedures Letter and a Consent Letter, dated the date of the Official Statement, and a Bring -Down Letter, dated the Closing Date, of Mauldin & Jenkins, LLC, in the forms reasonably acceptable to the Underwriter. BuderSnow 268376140 Schedule IV - Page 3 RECEIPT FOR BONDS Raymond James & Associates, Inc. HEREBY ACKNOWLEDGES receipt from U.S. Bank National Association, Atlanta, Georgia, as Bond Registrar, through the facilities of The Depository Trust Company, $6,675,000 in aggregate principal amount of Augusta, Georgia Airport General Revenue Refunding Bonds, Series 2015A (Non -AMT) and $3,850,000 in aggregate principal amount of Augusta, Georgia Airport General Revenue Refunding Bonds, Series 2015B (AMT), as more particularly described in the Master Bond Resolution adopted by the Augusta - Richmond County Commission and the Augusta Aviation Commission on September 1, 2015. WITNESS my hand, this 24th day of September, 2015. RAYMOND JAMES & ASSOCIATES, INC., as Purchaser By: D�d N(ehiga� Managing Director (Receipt for Bonds) LAW OFFICES SHEPARD, PLUNKETT, HAMILTON & BOUDREAUX LLP A PARTNERSHIP INCLUDING PROFESSIONAL CORPORATIONS STEPHEN E. SHEPARD, P.C. AUGUSTA OFFICE. EVANS OFFICE- PAUL K. PLUNKETT JAMES T. PLUNKETT, P.C. DANIEL W. HAMILTON, P.C. TODD BOUDREAUX, P.C. JOHN P. MANTON III, P.C. (GA & SC) JENNA BLACKWELL MATSON 429 WALKER STREET 7013 EVANS TOWN CENTER BLVD (1922 -1998) UPPER LEVEL SUITE 303 AUGUSTA, GA 30901 EVANS, GA 30809 (706) 722 -4111 (706) 869 -1334 (706) 722 -6200 (706) 868 -6788 FAX REPLY TO: (706) 722 -4817 FAX Augusta September 24, 2015 Raymond James & Associates, Inc. Atlanta, Georgia Murray Barnes Finister LLP Atlanta, Georgia Re: $6,675,000 Augusta, Georgia Airport General Revenue Refunding Bonds, Series 2015A (Non -AMT) $3,850,000 Augusta, Georgia Airport General Revenue Refunding Bonds, Series 2015B (AMT) We have acted as special counsel to Augusta, Georgia (the "Consolidated Government ") preliminary to and in connection with the issuance and sale by the Consolidated Government of the above - captioned bonds (the "Bonds "). In so acting, we have examined, among other things, Paragraph I of Section VI of Article IX of the Constitution of the State of Georgia, Article 3 of Chapter 82 of Title 36 of the Official Code of Georgia Annotated, Acts of the General Assembly of the State of Georgia (1995 Ga. Laws 3648 to 3675, inclusive as amended by 1996 Ga. Laws 3607 to 3608, inclusive 1997 Ga. Laws 4024 to 4025, inclusive 1997 Ga. Laws 4690 to 4693, inclusive 1999 Ga. Laws 4143 to 4145, inclusive 2002 Ga. Laws 3769 to 3782, inclusive and 2007 Ga. Laws 3539 to 3541, inclusive (collectively the "Consolidation Act "), and originals, executed counterparts, or certified copies of the following: 1. The proceedings, including a Master Bond Resolution adopted by the Augusta - Richmond County Commission (the "Commission ") and by the Augusta Aviation Commission on September 1, 2015 (the "Bond Resolution "), authorizing, among other things, the issuance and delivery of the Bonds and the execution, delivery, receipt, and approval of a Bond Purchase Agreement (the "Bond Purchase Agreement "), dated September 1, 2015, between the Consolidated Government and Raymond James & Associates, Inc. (the "Underwriter "), a Preliminary Official Statement dated August 25, 2015 (the "Preliminary Official Statement "), and an Official Statement dated September 1, 2015 (the "Official Statement "). ATLANTA 5667394.2 Raymond James & Associates, Inc. Murray Barnes Finister LLP September 24, 2015 Page 2 2. The Bond Purchase Agreement, the Preliminary Official Statement, and the Official Statement and a specimen Bond. Based upon the foregoing and an examination of such other information, papers, and documents as we believed necessary or advisable to enable us to render this opinion, we are of the opinion, as of the date hereof, that: 1. The Consolidated Government is a political subdivision of the State of Georgia duly created and validly existing under and by virtue of the Constitution and laws of the State of Georgia, and a consolidated city - county government created on January 1, 1996 pursuant to the Consolidation Act. The Consolidated Government has all of the governmental and corporate powers of both municipal corporations and counties under Georgia law, including all requisite power and authority to adopt the Bond Resolution and perform its obligations thereunder, to issue, sell, and deliver the Bonds, to enter into and perform its obligations under the Bond Purchase Agreement, to execute and deliver the Official Statement to the Underwriter for distribution to the general public in connection with the offering by the Underwriter of the Bonds, and to secure the Bonds as provided in the Bond Resolution. 2. The Consolidated Government has taken all action legally required to authorize the issuance, sale, and delivery of the Bonds and has duly authorized the adoption and performance of the Bond Resolution, the execution, delivery, and performance of the Bond Purchase Agreement and the approval of the Official Statement. 3. The adoption by the Consolidated Government of the Bond Resolution, the authorization by the Consolidated Government of the Official Statement, the issuance and delivery by the Consolidated Government of the Bonds, the execution and delivery by the Consolidated Government of the Bond Purchase Agreement and the other agreements and documents described in the Bond Purchase Agreement, and the performance by the Consolidated Government of its obligations under and the consummation of the transactions described in all of the foregoing instruments and documents do not and will not conflict with or constitute, on the part of the Consolidated Government, a material breach or violation of or default under, any of the terms and conditions of the Consolidation Act, any existing constitution, statute, law, or court or administrative rule or regulation, decree, order, or judgment to which the Consolidated Government is subject or by which the Consolidated Government or any of its properties is bound or any agreement, indenture, mortgage, lease, security deed, note, resolution, ordinance, contract, commitment, or other instrument or agreement to which the Consolidated Government is a party or by which the Consolidated Government or any of its properties is bound. ATLANTA 5667394.2 Raymond James & Associates, Inc. Murray Barnes Finister LLP September 24, 2015 Page 3 4. Each of the officials of the Consolidated Government was on the date of execution of each of the instruments relating to the Bonds, was on the date of the execution of the Bonds, and is on the date hereof the duly elected or appointed qualified incumbent of his or her office of the Consolidated Government. 5. The notice given prior to the meeting of the Commission at which the Bond Resolution was adopted complies with the applicable notice requirements of Georgia law, and such meeting was conducted in accordance with the applicable requirements of Georgia law. 6. Except as disclosed in the Official Statement, there is no action, suit, proceeding, inquiry, or investigation, at law or in equity, by or before any court or public board or body pending or, to the best of our knowledge and belief, after making due inquiry with respect thereto, threatened against or affecting the Consolidated Government, nor to our knowledge is there any basis therefor, which in any way questions the creation or existence of the Consolidated Government or the powers of the Consolidated Government referred to in Section A(a) of Schedule IV to the Bond Purchase Agreement, or the validity of the proceedings resulting in the issuance and delivery of the Bonds, or wherein an unfavorable decision, ruling, or finding would adversely affect the transactions contemplated by the Bond Purchase Agreement or which in any way would adversely affect the validity or enforceability of the Bonds, the Bond Resolution, the Bond Purchase Agreement, or any other agreement or instrument to which the Consolidated Government is a party and which is used or contemplated for use in connection with the consummation of the transactions contemplated by the Bond Purchase Agreement. 7. All permits, consents, permissions, approvals, or licenses and authorizations or orders of any court or governmental or regulatory bodies that are required to have been obtained as of the date hereof by the Consolidated Government in connection with the issuance, sale, and delivery of the Bonds, the adoption, execution, delivery, and performance of the Bond Resolution, the Bond Purchase Agreement, and the consummation of the transactions contemplated by the Official Statement have been duly obtained and remain in full force and effect. We have no reason to believe, after making due inquiry, that the Consolidated Government will not be able to maintain all such permits, consents, permissions, approvals, and licenses described in the preceding sentence or to obtain all such additional permits, consents, permissions, approvals, or licenses and authorizations or orders of any court or governmental or regulatory bodies as may be required on or prior to the date the Consolidated Government is legally required to obtain the same. Except as disclosed in the Official Statement, no additional or further approval, consent, permission, authorization, or order of any court or any governmental or public agency or authority not already obtained is required by the Consolidated Government as of the date hereof in connection with the issuance, sale, and delivery of the Bonds, or the adoption, execution, delivery, and performance of the Bond Purchase Agreement, or the Bond ATLANTA 5667394.2 Raymond James & Associates, Inc. Murray Barnes Finister LLP September 24, 2015 Page 4 Resolution. The opinion expressed in this paragraph 7 shall not extend to or otherwise cover any approvals that may be required by any federal or state securities laws. 8. The Bond Resolution has been duly adopted by the Consolidated Government, is in full force and effect in the form in which it was adopted, and constitutes the valid, binding, and legally enforceable obligation of the Consolidated Government according to its import. The Bond Purchase Agreement has been duly authorized, executed, and delivered by the Consolidated Government and is in full force and effect and constitutes the valid, binding, and legally enforceable obligation of the Consolidated Government according to its import. The Bonds have been duly authorized, executed, issued, and delivered by the Consolidated Government and, assuming the due authentication thereof by U.S. Bank National Association, Atlanta, Georgia, as bond registrar, constitute the valid and legally binding special or limited obligations of the Consolidated Government, are entitled to the benefit and security of the Bond Resolution, and are enforceable in accordance with their terms. 9. The Bonds and the security therefor have been validated by the Superior Court of Richmond County, and no valid intervention or objection was raised and no appeals are pending with respect to such validation. 10. The Official Statement has been duly authorized, executed, and delivered by the Consolidated Government, and the Consolidated Government has duly approved the use of the Preliminary Official Statement and the Official Statement by the Underwriter in connection with the offering of the Bonds. 11. As special counsel to the Consolidated Government, we have rendered legal advice and assistance to the Consolidated Government in the course of the financing. Such assistance involved, among other things, discussions and inquiries concerning various legal matters and review of various documents relating to the offering and the preparation of the Preliminary Official Statement and the Official Statement and participation in conferences during which the contents of the Preliminary Official Statement and the Official Statement and related matters were discussed and reviewed. To the best of our knowledge, after making due inquiry with respect thereto, the statements contained in the Preliminary Official Statement and the Official Statement under the captions "INTRODUCTION - The Consolidated Government," "THE CONSOLIDATED GOVERNMENT - Introduction and - Consolidated Government Administration and Officials," and "LEGAL MATTERS - Pending Litigation and - Validation Proceedings" (other than the financial and statistical data included therein, as to which we express no view) are accurate statements or summaries of the matters set forth therein and fairly represent the information purported to be shown and do not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements made therein, in light of the circumstances ATLANTA 5667394.2 Raymond James & Associates, Inc. Murray Barnes Finister LLP September 24, 2015 Page 5 under which they were made, not misleading. In addition, while we do not pass upon or assume responsibility for the accuracy, completeness, or fairness of the Preliminary Official Statement or the Official Statement (other than the opinion given in the preceding sentence), nothing has come to our attention that leads us to believe that any portions of the Preliminary Official Statement or the Official Statement contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements made therein, in light of the circumstances under which they were made, not misleading. The foregoing opinions are qualified to the extent that the enforceability of the Bonds, the Bond Resolution, or the Bond Purchase Agreement might be limited by (i) bankruptcy, insolvency, reorganization, moratorium, and other similar laws affecting creditors' rights generally heretofore or hereafter enacted to the extent of their enforcement, (ii) judicial discretion in the application of principles of equity, and (iii) the valid exercise of the sovereign police powers of the State of Georgia and its governmental bodies and the constitutional powers of the United States of America. The foregoing opinions are also qualified to the extent that any rights to indemnity or contribution contained in the Bond Purchase Agreement might be limited by applicable law. No opinion is given as to the tax- exempt status of the Bonds or the interest thereon. No opinion is given concerning the requirement for registration of the Bonds under the securities laws of any state or the Securities Act of 1933, as amended, nor is an opinion given concerning qualification of any document under the Trust Indenture Act of 1939, as amended. We are members of the State Bar of Georgia. Our opinions herein are limited to the laws of the State of Georgia and any applicable federal laws of the United States. We expressly disclaim any duty to update this opinion in the future for any changes of fact or law that may affect any of the opinions expressed herein. Very truly yours, ATLANTA 5667394.2 SHEPARD, PLUNKETT, HAMILTON & FREEMAN MATHIS &GARY A I.Iht1 - 1 ED I.IABI I,ITY PA RT\ ERSII I P Reply to Forest Park office: 661 Forest Parkway, Suite E Forest Park, Ga. 30297 -2257 Tel: 404.366. 1000 Fax: 404.3613223 Atlanta office: 100 Galleria Parkway, Suite 1600 Atlanta, Ga. 30339 -5948 Tel: 770.818.0000 Fax: 770.937.9960 www.fmglaw.com September 24, 2015 Raymond James & Associates, Inc. Atlanta, Georgia Murray Barnes Finister LLP Atlanta, Georgia Jack R. Hancock Partner Writer's Direct Access 404.335.7143 jhancock@fmglaw.com Re: $6,675,000 Augusta, Georgia Airport General Revenue Refunding Bonds, Series 2015A (Non -AMT) $3,850,000 Augusta, Georgia Airport General Revenue Refunding Bonds, Series 2015B (AMT) Ladies and Gentlemen: We have acted as special counsel to the Augusta Aviation Commission the Augusta Aviation Commission (the "Aviation Commission "), a board established by ordinance of Augusta, Georgia (the "Consolidated Government') preliminary to and in connection with the issuance and sale by the Consolidated Government of the above - captioned bonds (the "Bonds "). In so acting, we have examined, among other things, Paragraph I of Section VI of Article IX of the Constitution of the State of Georgia, Article 3 of Chapter 82 of Title 36 of the Official Code of Georgia Annotated, Acts of the General Assembly of the State of Georgia (1995 Ga. Laws 3648 to 3675, inclusive as amended by 1996 Ga. Laws 3607 to 3608, inclusive 1997 Ga. Laws 4024 to 4025, inclusive 1997 Ga. Laws 4690 to 4693, inclusive 1999 Ga. Laws 4143 to 4145, inclusive 2002 Ga. Laws 3769 to 3782, inclusive and 2007 Ga. Laws 3539 to 3541, inclusive (collectively the "Consolidation Act'), and originals, executed counterparts, or certified copies of the following: The proceedings, including a Master Bond Resolution adopted by the Augusta - Richmond County Commission (the "Commission ") and by the Aviation Commission on September 1, 2015 (the "Bond Resolution "), authorizing, among other things, the issuance and delivery of the Bonds and the execution, delivery, receipt, and approval of a Bond Purchase Agreement (the "Bond Purchase Agreement'), dated September 1, 2015, between the Consolidated Government and Raymond James & Associates, Inc., a Preliminary Official Statement dated August 25, 2015 (the "Preliminary Official Statement "), and an Official Statement dated September 1, 2015 (the "Official Statement'). FREEMAN MATHIS & GARY A LIMITED LIABILITY PARTNERSHIP Raymond James & Associates, Inc. Murray Barnes Finister LLP September 24, 2015 Page 2 2. The Bond Purchase Agreement, the Preliminary Official Statement, and the Official Statement. Each separate Airline Operating Agreement and Terminal Building Lease for the Augusta Regional Airport, dated as of September 26, 2013, as amended by a First Amendment to Airline Operating Agreement and Terminal Building Lease, dated as of the date hereof (each an "Airline Agreement" and collectively the "Airline Agreements "), between the Consolidated Government, acting by and through the Aviation Commission, and (1) Delta Air Lines, Inc. and (2) American Airlines, Inc. (as successor by merger to U.S. Airways, Inc.). 4. An ordinance (the "Rate Ordinance ") adopted by the Commission on November 4, 2004, requiring the Aviation Commission to establish rates, rents, fees, and other charges for airlines operating at Augusta Regional Airport at Bush Field (the "Airport"). Based upon the foregoing and an examination of such other information, papers, and documents as we believed necessary or advisable to enable us to render this opinion, we are of the opinion, as of the date hereof, that: 1. The Consolidated Government is a political subdivision of the State of Georgia duly created and validly existing under and by virtue of the Constitution and laws of the State of Georgia, and a consolidated city- county government created on January 1, 1996 pursuant to the Consolidation Act. The Consolidated Government has all of the governmental and corporate powers of both municipal corporations and counties under Georgia law, including all requisite power and authority to enter into and perform its obligations under the Airline Agreements. 2. The Consolidated Government has taken all action legally required to authorize the execution, delivery, and performance of the Airline Agreements. 3. The execution and delivery by the Consolidated Government of the Airline Agreements, and the performance by the Consolidated Government of its obligations under and the consummation of the transactions described in the Airline Agreements do not and will not conflict with or constitute, on the part of the Consolidated Government a material breach or violation of or default under, any of the terms and conditions of the Consolidation Act, any existing constitution, statute, law, or court or administrative rule or regulation, decree, order, or judgment related to the Airport or its operations to which the Consolidated Government is subject or by which the Consolidated Government or any of its properties is bound or any agreement, indenture, mortgage, lease, security deed, note, resolution, ordinance, contract, commitment, or other instrument or agreement related to the Airport FREEMAN MATHIS & GARY A LIMITED LIABILITY PARTNERSHIP Raymond James & Associates, Inc. Murray Barnes Finister LLP September 24, 2015 Page 3 or its operations to which the Consolidated Government is a party or by which the Consolidated Government or any of its properties is bound. 4. The notice given prior to the meeting of the Aviation Commission at which the Bond Resolution was adopted complies with the applicable notice requirements of Georgia law, and such meeting was conducted in accordance with the applicable requirements of Georgia law. 5. Except as disclosed in the Official Statement, there is no action, suit, proceeding, inquiry, or investigation, at law or in equity, by or before any court or public board or body pending or, to the best of our knowledge and belief, after making due inquiry with respect thereto, threatened against or affecting the Consolidated Government, nor to our knowledge is there any basis therefor, which might result in a material adverse change in the condition (financial or other), business, or affairs of the Airport, or wherein an unfavorable decision, ruling, or finding which in any way would adversely affect the validity or enforceability of the Airline Agreements, or any other agreement or instrument relating to the Airport to which the Consolidated Government is a party and which is used or contemplated for use in connection with the consummation of the transactions contemplated by the Bond Purchase Agreement or which in any way would adversely affect the setting, charging, or collection of any rates, fees, and other charges for the services and facilities furnished by the Airport. 6. All permits, consents, permissions, approvals, or licenses and authorizations or orders of any court or governmental or regulatory bodies that are required to have been obtained as of the date hereof by the Consolidated Government in connection with the ownership and operation of Airport or any part thereof, as contemplated by the Official Statement, the execution, delivery, and performance of the Airline Agreements, and the consummation of the transactions contemplated by the Official Statement have been duly obtained and remain in full force and effect. We have no reason to believe, after making due inquiry, that the Consolidated Government will not be able to maintain all such permits, consents, permissions, approvals, and licenses described in the preceding sentence or to obtain all such additional permits, consents, permissions, approvals, or licenses and authorizations or orders of any court or governmental or regulatory bodies as may be required on or prior to the date the Consolidated Government is legally required to obtain the same. Except as disclosed in the Official Statement, no additional or further approval, consent, permission, authorization, or order of any court or any governmental or public agency or authority not already obtained is required by the Consolidated Government as of the date hereof in connection with the ownership and operation of the Airport or any part thereof, as contemplated by the Official Statement, or the execution, delivery, and performance of the Airline Agreements. The opinion expressed in this paragraph 6 shall not extend to or otherwise cover any approvals that may be required by any federal or state securities laws. FREEMAN MATHIs & GARY A LIMITED LIABILITY PARTNERSHIP Raymond James & Associates, Inc. Murray Barnes Finister LLP September 24, 2015 Page 4 7. The Airline Agreements have been duly authorized, executed, and delivered by the Consolidated Government and, assuming the due authorization, execution, and delivery by the other parties thereto, are each in full force and effect and constitute the valid, binding, and legally enforceable obligations of the Consolidated Government according to their import. 8. As special counsel to the Aviation Commission, we have rendered legal advice and assistance to the Consolidated Government in the course of the financing. Such assistance involved, among other things, discussions and inquiries concerning various legal matters and review of various documents relating to the offering and the preparation of the Preliminary Official Statement and the Official Statement and participation in conferences during which the contents of the Preliminary Official Statement and the Official Statement and related matters were discussed and reviewed. To the best of our knowledge, after making due inquiry with respect thereto, the statements contained in the Preliminary Official Statement and the Official Statement under the captions "INTRODUCTION - The Aviation Commission and - The Airport," "PLAN OF FINANCING - Refunding Program," "THE AVIATION COMMISSION - Introduction and - Aviation Commission Administration and Officials," "THE AIRPORT - Introduction, - Airport Facilities, - Air Trade Area, - Competition, - Airlines Providing Service, - Aviation Activity, - Origin and Destination Information, - Airline and Other Revenue Sources, and - Employees, Employee Relations, and Labor Organizations," "AIRPORT FINANCIAL INFORMATION - Passenger Facility Charges, - Federal Grants -In -Aid, and - Insurance Coverage," and "LEGAL MATTERS - Pending Litigation and - Validation Proceedings," and in "APPENDIX C - SUMMARY OF THE AIRLINE AGREEMENTS" (other than the financial and statistical data included therein, as to which we express no view) are accurate statements or summaries of the matters set forth therein and fairly represent the information purported to be shown and do not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements made therein, in light of the circumstances under which they were made, not misleading. In addition, while we do not pass upon or assume responsibility for the accuracy, completeness, or fairness of the Preliminary Official Statement or the Official Statement (other than the opinion given in the preceding sentence), nothing has come to our attention which leads us to believe that any portions of the Preliminary Official Statement or the Official Statement contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements made therein, in light of the circumstances under which they were made, not misleading. 9. To the best of our knowledge and belief, after making due inquiry with respect thereto, the Consolidated Government has never issued, assumed, guaranteed, or otherwise become FREEMAN MATHIs & GARY A LIMITED LIABILITY PARTNERSHIP Raymond James & Associates, Inc. Murray Barnes Finister LLP September 24, 2015 Page 5 liable in respect of any bonds, notes, or other obligations that are presently outstanding and that are secured in any manner by the Airport or by the revenues to be received from the ownership and operation thereof, other than as set forth in the Bond Resolution or the Official Statement, and the Consolidated Government has not entered into or issued any instrument, resolution, ordinance, agreement, mortgage, security agreement, indenture, contract, or arrangement of any kind that might, on or after the date hereof, give rise to any lien or encumbrance on the Airport or the revenues derived from the ownership and operation thereof, other than as described in the Official Statement or the Bond Resolution. 10. We have no reason to believe that the Airline Agreements do not each constitute the valid, binding, and legally enforceable obligations of the parties thereto other than the Consolidated Government, according to their import, and we have no reason to believe that the Consolidated Government is not entitled to the benefits of the same. No action has been taken or to our knowledge is contemplated questioning the terms, conditions, validity, or legality of the Airline Agreements. 11. The Rate Ordinance has been duly adopted by the Consolidated Government and is in full force and effect in the form in which it was adopted. No action has been taken or to our knowledge is contemplated questioning the terms, conditions, validity, or legality of the Rate Ordinance. The foregoing opinions are qualified to the extent that the enforceability of the Airline Agreements might be limited by (i) bankruptcy, insolvency, reorganization, moratorium, and other similar laws affecting creditors' rights generally heretofore or hereafter enacted to the extent of their enforcement, (ii) judicial discretion in the application of principles of equity, and (iii) the valid exercise of the sovereign police powers of the State of Georgia and its governmental bodies and the constitutional powers of the United States of America. The foregoing opinions are also qualified to the extent that any rights to indemnity or contribution contained in the Airline Agreements might be limited by applicable law. No opinion is given as to the tax - exempt status of the Bonds or the interest thereon. No opinion is given concerning the requirement for registration of the Bonds under the securities laws of any state or the Securities Act of 1933, as amended, nor is an opinion given concerning qualification of any document under the Trust Indenture Act of 1939, as amended. FREEMAN MATHIS & GARY A LIMITED LIABILITY PARTNERSHIP Raymond James & Associates, Inc. Murray Barnes Finister LLP September 24, 2015 Page 6 We are members of the State Bar of Georgia. Our opinions herein are limited to the laws of the State of Georgia and any applicable federal laws of the United States. We expressly disclaim any duty to update this opinion in the future for any changes of fact or law that may affect any of the opinions expressed herein. Very truly yours, FREEMAN MATHIS & GARY, LLP Salans FMC SNR Denton Dentons US LLP McKenna Long 303 Peachtree Street, NE - Suite 5300 dentons.com Atlanta, GA 30308 United States T 404.527.4000 F 404.527,4198 September 24, 2015 Augusta, Georgia Augusta, Georgia Raymond James & Associates, Inc. Atlanta, Georgia Re: $6,675,000 Augusta, Georgia Airport General Revenue Refunding Bonds, Series 2015A (Non -AMT) $3,850,000 Augusta, Georgia Airport General Revenue Refunding Bonds, Series 2015B (AMT) Ladies and Gentlemen: We have acted as disclosure counsel to Augusta, Georgia (the "Consolidated Government ") preliminary to and in connection with the issuance and sale by the Consolidated Government of $6,675,000 in aggregate principal amount of its Airport General Revenue Refunding Bonds, Series 2015A (Non -AMT), and $3,850,000 in aggregate principal amount of its Airport General Revenue Refunding Bonds, Series 2015B (AMT) (collectively the "Bonds "). In so acting, we have examined originals, executed counterparts, or certified copies of the following: (a) the Master Bond Resolution adopted by the Augusta Aviation Commission and by the Augusta - Richmond County Commission on September 1, 2015 (the "Bond Resolution "); (b) the Preliminary Official Statement, dated August 25, 2015 (the "Preliminary Official Statement "), relating to the Bonds; (c) the Official Statement, dated September 1, 2015 (the "Official Statement "), relating to the Bonds; (d) the Continuing Disclosure Certificate, dated the date hereof (the "Disclosure Certificate "), of the Consolidated Government; and (e) a transcript of the proceedings of the Consolidated Government relating to the authorization, issuance, and delivery of the Bonds. ATLANTA 5667250.1 DENTONS Augusta, Georgia Raymond James & Associates, Inc. September 24, 2015 Page 2 Salans FMC SNR Denton McKenna Long dentons.com In all such examinations, we have assumed the authenticity of all documents submitted to us as original documents and the authenticity of originals and conformity to original documents of all documents submitted to us as certified, conformed, or photostatic copies. We have assumed, but not independently verified, that the signatures on all documents and certificates that we have examined are genuine, and, as to certificates, we have assumed the same to be properly given and to be accurate. We are not expressing any opinion or views on the authorization, issuance, delivery, or validity of the Bonds. Based upon the foregoing and an examination of such other information, papers, and documents as we believe necessary or advisable to enable us to render this opinion, we are of the opinion, as of the date hereof, as follows: The Bonds are exempt securities within the meaning of Section 3(a)(2) of the Securities Act of 1933, as amended (the "1933 Act "), and the Bond Resolution is exempt from qualification under Section 304(a)(4) of the Trust Indenture Act of 1939, as amended (the "1939 Act "), to the extent provided in such Acts, respectively, and it is not necessary in connection with the offer and sale of the Bonds to the public to register the Bonds under the 1933 Act, or to qualify the Bond Resolution under, or to issue the Bonds under any indenture qualified under, the 1939 Act. 2. The Bonds are exempted from the registration provisions of the Georgia Uniform Securities Act of 2008, as amended, by virtue of Section 10 -5 -10(1) thereof. 3. The Bonds are covered securities within the meaning of Section 18(b)(4)(C) of the 1933 Act, to the extent provided in the 1933 Act, and it is not necessary in connection with the offer and sale of the Bonds to the public to register or qualify the Bonds under the securities or "Blue Sky" laws of any state of the United States, the District of Columbia, Puerto Rico, the Virgin Islands, or any other possession of the United States, or any political subdivision thereof. It should be noted, however, that filing fees may be payable in certain jurisdictions if the Bonds are offered or sold in such jurisdictions. 4. The Disclosure Certificate complies as to form with the requirements of Rule 15c2- 12(b)(5) promulgated under the Securities Exchange Act of 1934, as amended. ATLANTA 5667250.1 DENTONS Augusta, Georgia Raymond James & Associates, Inc. September 24, 2015 Page 3 Salans FMC SNR Denton McKenna Long dentons.com Because the primary purpose of our professional engagement as disclosure counsel to the Consolidated Government was not to establish factual matters and because of the wholly or partially nonlegal character of many determinations involved in the preparation of the Preliminary Official Statement and the Official Statement, we are not passing upon and do not assume any responsibility for the accuracy, completeness, or fairness of the statements contained in the Preliminary Official Statement or the Official Statement, and we have not independently verified the accuracy, completeness, or fairness of such statements. Nevertheless, we have rendered legal advice and assistance to the Consolidated Government in the course of the offering and sale of the Bonds, and the preparation of the Preliminary Official Statement and the Official Statement. Such assistance involved, among other things, discussions and inquiries concerning various legal matters, the review of the documents referred to above, and discussions with representatives of the Consolidated Government, its counsel, its financial advisor, Bond Counsel, and auditors for the Consolidated Government's Augusta Regional Airport at Bush Field, in connection with the preparation of the Preliminary Official Statement and the Official Statement. We have obtained and reviewed certificates as to factual matters and legal opinions from these parties and their counsel in regard to the Preliminary Official Statement and the Official Statement and certain information contained therein. The performance of the services referred to above, the discussions referred to above, and our examination of the factual certifications and legal opinions referred to above did not disclose to us any information that would lead us to believe that the Preliminary Official Statement or the Official Statement (other than the financial statements and related notes and other financial and statistical data included therein, as to which we express no view) contains any untrue statement of a material fact or omits to state a material fact required to be stated or necessary to make the statements therein made, in light of the circumstances under which they were made, not misleading. The opinions set forth in paragraphs 2 and 3 above are subject to the existence of broad discretionary powers vested in the administrative authorities administering the securities or "Blue Sky" laws in the jurisdictions named in paragraphs 2 and 3, authorizing them, among other things, to withdraw exemptions accorded by statute, to impose additional requirements, to refuse registration, or to issue stop orders. This opinion does not purport to cover the requirements under the laws of any jurisdiction with respect to the registration or licensing of dealers, brokers, or salespersons, the form or substance of advertising materials or the filing requirements applicable thereto, or the legality of investments in the Bonds by any institutional investor which is subject to statutory or other restrictions as to its investments. ATLANTA 5667250.1 Salans FMC SNR Denton McKenna Long dentons.com Augusta, Georgia Raymond James & Associates, Inc. September 24, 2015 Page 4 We are members of the State Bar of Georgia. Our opinions herein are limited to the laws of the State of Georgia and any applicable federal laws of the United States. We expressly disclaim any duty to update this opinion in the future for any changes of fact or law that may affect any of the opinions expressed herein. As disclosure counsel to the Consolidated Government, we are furnishing this letter to you solely for your benefit and not for dissemination in connection with the offer and sale of the Bonds. This opinion is limited to the matters expressly set forth above, and no opinion is implied or may be inferred beyond the matters expressly so stated. Very truly yours, DENTONS US LLP : B Y Kenneth B. Pollock, Partner ATLANTA 5667250.1 MURRAY BARNES FINISTER LLP 3525 PIEDMONT ROAD - 5 PIEDMONT CENTER - SUITE 515 - ATLANTA, GEORGIA 30305 September 24, 2015 Augusta - Richmond County Commission Augusta, Georgia Augusta Aviation Commission Augusta, Georgia Raymond James & Associates, Inc. Atlanta, Georgia Re: $6,675,000 Augusta, Georgia Airport General Revenue Refunding Bonds, Series 2015A (Non -AMT) To the Addressees: We have acted as Bond Counsel to Augusta, Georgia (the "Consolidated Government ") in connection with the execution and delivery of $6,675,000 in aggregate principal amount of its Airport General Revenue Refunding Bonds, Series 2015A (Non -AMT) (the "Series 2015A Bonds "). The Series 2015A Bonds are being issued pursuant to the Constitution and laws of the State of Georgia, including in particular the Revenue Bond Law of the State of Georgia (O.C.G.A. Section 36 -82 -60 et seq., as amended) (the "Revenue Bond Law ") and a Master Bond Resolution adopted by the Augusta - Richmond County Commission and the Augusta Aviation Commission (the "Aviation Commission ") on September 1, 2015 (the "Bond Resolution "). In connection with the issuance of the Series 2015A Bonds, we have examined the law and such certified proceedings, including a certified copy of the transcript of the validation proceeding concluded in the Superior Court of Richmond County, Georgia, and other documents as we have deemed necessary to render this opinion. In all such examinations, we have assumed the genuineness of signatures on original documents and the conformity to original documents of all copies submitted to us as certified, conformed or photographic copies, and as to certificates of public officials, we have assumed the same to have been properly given and to be accurate. The Series 2015A Bonds mature, bear interest and are subject to exchange, transfer and redemption at the times, in the manner and on the terms, and contain such other terms and conditions, as set forth in the Bond Resolution. All capitalized terms used but not otherwise defined herein shall have the meanings assigned thereto in the Bond Resolution. TELEPHONE: (678) 999.0350 - FACSIMILE: (678) 999 -0357 - INTERNET: www.murraybarneslaw.com September 24, 2015 Page 2 The proceeds from the sale of the Series 2015A Bonds, together with other available moneys, will be used for the purpose of (a) refunding all of the Augusta, Georgia Airport Passenger Facility Charge and General Revenue Bonds, Series 2005A (Non -AMT) currently outstanding in the aggregate principal amount of $8,990,000 (the "Refunded Bonds ") and (b) paying the costs of issuance of the Series 2015A Bonds. Concurrently with the issuance and delivery of the Series 2015A Bonds, the Consolidated Government will issue $3,850,000 in aggregate principal amount of Augusta, Georgia Airport General Revenue Refunding Bonds, Series 2015B (AMT) (the "Series 2015B Bonds" and, together with the Series 2015A Bonds, the "Series 2015 Bonds ") pursuant to the Bond Resolution. The Series 2015 Bonds, when issued, will be the only bonds outstanding under the Bond Resolution. The Series 2015A Bonds are payable from and secured by a pledge of and first lien on the Net General Revenues of the Airport and Pledged PFC Revenues of the Airport on deposit in the Pledged PFC Series 2015A Account. The Series 2015A Bonds will be equally and ratably secured on a parity basis as to lien on the Net General Revenues with the Series 2015B Bonds. The Consolidated Government has reserved the right, under certain terms and conditions, to issue additional parity bonds ( "Additional Bonds ") pursuant to the Bond Resolution payable from and secured by a lien on the Net General Revenues of the Airport on parity with the lien thereon securing the Series 2015 Bonds. The Series 2015A Bonds constitute limited obligations of the Consolidated Government and are payable solely from the Net General Revenues of the Airport and Pledged PFC Revenues of the Airport on deposit in the Pledged PFC Series 2015A Account. Neither the general credit nor the taxing power of the State of Georgia or any political subdivision thereof, including the Consolidated Government, is pledged for the payment of the Series 2015A Bonds. The Series 2015A Bonds will not constitute a debt of the State of Georgia or any political subdivision of the State of Georgia, including the Consolidated Government, within the meaning of any constitutional or statutory debt limitation. A portion of the proceeds derived from the sale of the Series 2015A Bonds, together with other available moneys, is being deposited in trust, simultaneously with the issuance and delivery of the Series 2015A Bonds, into a special segregated account designated as the "2005 Defeasance Account" with U.S. Bank National Association, as Bond Registrar and Paying Agent for the Refunded Bonds, which amounts will be held uninvested and will be used to pay the principal of and interest on the Refunded Bonds on the October 2, 2015 redemption date (the "Redemption Date "), all as provided in the Bond Resolution. As to the sufficiency of moneys held in trust in the 2005 Defeasance Account to provide money sufficient to pay the interest on and principal of the Refunded Bonds on the Redemption Date we express no opinion, and have relied solely on calculations prepared by Public Financial Management, Inc., financial advisor to the Consolidated Government. As to questions of fact material to our opinion, we have relied upon (a) representations of the Consolidated Government and the Aviation Commission (b) certified proceedings and other certifications of public officials furnished to us, and (c) representations and certifications of the Consolidated Government and the Aviation Commission relating to the September 24, 2015 Page 3 use of the proceeds of the Series 2015A Bonds and the Refunded Bonds and the design, scope, function, use, cost and economic useful life of the facilities refinanced by the Refunded Bonds, without undertaking to verify the same by independent investigation. In our capacity as Bond Counsel, we express no opinion (a) with respect to the accuracy, completeness or sufficiency of the Preliminary Official Statement, dated August 25, 2015 or the Official Statement, dated September 1, 2015, related to the Series 2015 Bonds or (b) as to compliance by the Consolidated Government or the initial purchasers of the Series 2015A Bonds with any federal or state statute, regulation or ruling with respect to the sale or distribution of the Series 2015A Bonds. The Series 2015 Bonds will be treated as a single issue of bonds for most purposes under the Internal Revenue Code of 1986, as amended (the "Code "), and the exclusion from gross income for federal income tax purposes of the interest on each series of the Series 2015 Bonds may be dependent upon whether the interest on the other series of the Series 2015 Bonds is excluded from gross income for federal income tax purposes. On the date of this opinion, we are delivering an opinion with respect to the Series 2015B Bonds to the effect that based on assumptions substantially to the same effect as the assumptions on which this opinion is based, the interest on the Series 2015B Bonds is excluded from gross income for federal income tax purposes. Based upon the examinations, opinions and provisions referred to above, we are of the opinion, as of the date hereof and under existing law, as follows: 1. The Consolidated Government is a political subdivision of the State of Georgia with the power and authority under the laws and Constitution of the State of Georgia, and in particular the Revenue Bond Law, to (a) adopt the Bond Resolution and perform its obligations thereunder and (b) issue, execute, deliver and perform its obligations under the Series 2015A Bonds. 2. The Bond Resolution has been duly adopted by the Consolidated Government and constitutes the legal, valid and binding obligation of the Consolidated Government, enforceable against the Consolidated Government in accordance with its terms. The Bond Resolution creates a valid lien on the Net General Revenues of the Airport for the security of the Series 2015A Bonds, the Series 2015B Bonds and any Additional Bonds hereafter issued. The Bond Resolution creates a valid lien on the Pledged PFC Revenues of the Airport on deposit in the Pledged PFC Series 2015A Account of the Airport. 3. The Series 2015A Bonds have been duly authorized, executed and delivered by the Consolidated Government and constitute the legal, valid and binding limited obligations of the Consolidated Government, enforceable against the Consolidated Government in accordance with their terms. September 24, 2015 Page 4 4. The Bond Resolution and the Series 2015A Bonds have been duly validated by the Superior Court of Richmond County. 5. The interest on the Series 2015A Bonds is not includable in 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. The opinions set forth in the immediately preceding sentence are subject to the condition that the Consolidated Government and the Aviation Commission comply with all requirements of the Code that must be satisfied subsequent to the issuance of the Series 2015A Bonds in order that the interest on the Series 2015A Bonds be and continue to be excluded from gross income for federal income tax purposes. The Consolidated Government and the Aviation Commission have covenanted to comply with such requirements. Failure to comply with such covenants could cause interest on the Series 2015A Bonds to be included in federal gross income retroactive to the date of issuance of the Series 2015A Bonds. We express no opinion regarding any other federal tax consequences caused by the receipt or accrual of interest on the Series 2015A Bonds. 6. The interest on the Series 2015A Bonds is exempt from all present State of Georgia income taxes. The rights of the owners of the Series 2015A Bonds and the enforceability of the Series 2015A Bonds and the Bond Resolution may be subject to bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting creditors' rights heretofore or hereafter enacted to the extent constitutionally applicable and their enforcement may also be subject to the exercise of judicial discretion in appropriate cases. September 24, 2015 Page 5 We are members of the State Bar of Georgia. Our opinions herein are limited to the laws of the State of Georgia and any applicable federal laws of the United States. This opinion is limited to the matters expressly set forth above, and no opinion is implied or may be inferred beyond the matters so stated. This opinion is intended solely for the use of the addressees and their permitted successors and/or assigns and may not be relied upon by any other person for any purpose without our prior written consent in each instance. We expressly disclaim any duty to update this opinion in the future for any changes of fact or law that may affect any of the opinions expressed herein. Very truly yours, .., By: A Partner MURRAY BARNES FINISTER LLP 3525 PIEDMONT ROAD • 5 PIEDMONT CENTER • SUITE 515 • ATLANTA, GEORGIA 30305 September 24, 2015 Augusta - Richmond County Commission Augusta, Georgia Augusta Aviation Commission Augusta, Georgia Raymond James & Associates, Inc. Atlanta, Georgia Re: $3,850,000 Augusta, Georgia Airport General Revenue Refunding Bonds, Series 2015B (AMT) To the Addressees: We have acted as Bond Counsel to Augusta, Georgia (the "Consolidated Government ") in connection with the execution and delivery of $3,850,000 in aggregate principal amount of its Airport General Revenue Refunding Bonds, Series 2015B (AMT) (the "Series 2015B Bonds "). The Series 2015B Bonds are being issued pursuant to the Constitution and laws of the State of Georgia, including in particular the Revenue Bond Law of the State of Georgia (O.C.G.A. Section 36 -82 -60 et seq., as amended) (the "Revenue Bond Law ") and a Master Bond Resolution adopted by the Augusta - Richmond County Commission and the Augusta Aviation Commission (the "Aviation Commission ") on September 1, 2015 (the "Bond Resolution "). In connection with the issuance of the Series 2015B Bonds, we have examined the law and such certified proceedings, including a certified copy of the transcript of the validation proceeding concluded in the Superior Court of Richmond County, Georgia, and other documents as we have deemed necessary to render this opinion. In all such examinations, we have assumed the genuineness of signatures on original documents and the conformity to original documents of all copies submitted to us as certified, conformed or photographic copies, and as to certificates of public officials, we have assumed the same to have been properly given and to be accurate. The Series 2015B Bonds mature, bear interest and are subject to exchange, transfer and redemption at the times, in the manner and on the terms, and contain such other terms and conditions, as set forth in the Bond Resolution. All capitalized terms used but not otherwise defined herein shall have the meanings assigned thereto in the Bond Resolution. TELEPHONE: (678) 999 -0350 • FAcsIMILE: (678) 999 -0357 • INTERNET: www.murraybameslaw.com September 24, 2015 Page 2 The proceeds from the sale of the Series 2015B Bonds, together with other available moneys, will be used for the purpose of (a) refunding all of the Augusta, Georgia Airport General Revenue Bonds, Series 2005C (AMT) currently outstanding in the aggregate principal amount of $6,090,000 (the "Refunded Bonds ") and (b) paying the costs of issuance of the Series 2015B Bonds. Concurrently with the issuance and delivery of the Series 2015B Bonds, the Consolidated Government will issue $6,675,000 in aggregate principal amount of Augusta, Georgia Airport General Revenue Refunding Bonds, Series 2015A (Non -AMT) (the "Series 2015A Bonds" and, together with the Series 2015B Bonds, the "Series 2015 Bonds ") pursuant to the Bond Resolution. The Series 2015 Bonds, when issued, will be the only bonds outstanding under the Bond Resolution. The Series 2015B Bonds are payable from and secured by a pledge of and first lien on the Net General Revenues of the Airport. The Series 2015B Bonds will be equally and ratably secured on a parity basis as to lien on the Net General Revenues of the Airport with the Series 2015A Bonds. The Consolidated Government has reserved the right, under certain terms and conditions, to issue additional parity bonds ( "Additional Bonds ") pursuant to the Bond Resolution payable from and secured by a lien on the Net General Revenues of the Airport on parity with the lien thereon securing the Series 2015 Bonds. The Series 2015B Bonds constitute limited obligations of the Consolidated Government and are payable solely from the Net General Revenues of the Airport. Neither the general credit nor the taxing power of the State of Georgia or any political subdivision thereof, including the Consolidated Government, is pledged for the payment of the Series 2015B Bonds. The Series 2015B Bonds will not constitute a debt of the State of Georgia or any political subdivision of the State of Georgia, including the Consolidated Government, within the meaning of any constitutional or statutory debt limitation. A portion of the proceeds derived from the sale of the Series 2015B Bonds, together with other available moneys, is being deposited in trust, simultaneously with the issuance and delivery of the Series 2015B Bonds, into a special segregated account designated as the "2005 Defeasance Account" with U.S. Bank National Association, as Bond Registrar and Paying Agent for the Refunded Bonds, which amounts will be held uninvested and will be used to pay the principal of and interest on the Refunded Bonds on the October 2, 2015 redemption date (the "Redemption Date "), all as provided in the Bond Resolution. As to the sufficiency of moneys held in trust in the 2005 Defeasance Account to provide money sufficient to pay the interest on and principal of the Refunded Bonds on the Redemption Date we express no opinion, and have relied solely on calculations prepared by Public Financial Management, Inc., financial advisor to the Consolidated Government. As to questions of fact material to our opinion, we have relied upon (a) representations of the Consolidated Government and the Aviation Commission (b) certified proceedings and other certifications of public officials furnished to us, and (c) representations and certifications of the Consolidated Government and the Aviation Commission relating to the use of the proceeds of the Series 2015B Bonds and the Refunded Bonds and the design, scope, September 24, 2015 Page 3 function, use, cost and economic useful life of the facilities refinanced by the Refunded Bonds, without undertaking to verify the same by independent investigation. In our capacity as Bond Counsel, we express no opinion (a) with respect to the accuracy, completeness or sufficiency of the Preliminary Official Statement, dated August 25, 2015 or the Official Statement, dated September 1, 2015, related to the Series 2015 Bonds or (b) as to compliance by the Consolidated Government or the initial purchasers of the Series 2015B Bonds with any federal or state statute, regulation or ruling with respect to the sale or distribution of the Series 2015B Bonds. The Series 2015 Bonds will be treated as a single issue of bonds for most purposes under the Internal Revenue Code of 1986, as amended (the "Code "), and the exclusion from gross income for federal income tax purposes of the interest on each series of the Series 2015 Bonds may be dependent upon whether the interest on the other series of the Series 2015 Bonds is excluded from gross income for federal income tax purposes. On the date of this opinion, we are delivering an opinion with respect to the Series 2015A Bonds to the effect that based on assumptions substantially to the same effect as the assumptions on which this opinion is based, the interest on the Series 2015A Bonds is excluded from gross income for federal income tax purposes. Based upon the examinations, opinions and provisions referred to above, we are of the opinion, as of the date hereof and under existing law, as follows: 1. The Consolidated Government is a political subdivision of the State of Georgia with the power and authority under the laws and Constitution of the State of Georgia, and in particular the Revenue Bond Law, to (a) adopt the Bond Resolution and perform its obligations thereunder and (b) issue, execute, deliver and perform its obligations under the Series 2015B Bonds. 2. The Bond Resolution has been duly adopted by the Consolidated Government and constitutes the legal, valid and binding obligation of the Consolidated Government, enforceable against the Consolidated Government in accordance with its terms. The Bond Resolution creates a valid lien on the Net General Revenues of the Airport for the security of the Series 2015A Bonds, the Series 2015B Bonds and any Additional Bonds hereafter issued. 3. The Series 2015B Bonds have been duly authorized, executed and delivered by the Consolidated Government and constitute the legal, valid and binding limited obligations of the Consolidated Government, enforceable against the Consolidated Government in accordance with their terms. 4. The Bond Resolution and the Series 2015B Bonds have been duly validated by the Superior Court of Richmond County. September 24, 2015 Page 4 5. The interest on the Series 2015B Bonds is not includable in gross income for federal income tax purposes except for interest on any Series 2015E Bond during any period while such Series 2015B Bond is held by a "substantial user" of the facilities refinanced by the Series 2015E Bonds or a "related person," as those terms are used in Section 147 of the Code. Interest on the Series 2015B Bonds is an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations. The opinion set forth in the first sentence of this paragraph is subject to the condition that the Consolidated Government and the Aviation Commission comply with all requirements of the Code that must be satisfied subsequent to the issuance of the Series 2015B Bonds in order that the interest on the Series 2015B Bonds be and continue to be excluded from gross income for federal income tax purposes. The Consolidated Government and the Aviation Commission have covenanted to comply with such requirements. Failure to comply with such covenants could cause interest on the Series 2015E Bonds to be included in federal gross income retroactive to the date of issuance of the Series 2015B Bonds. We express no opinion regarding any other federal tax consequences caused by the receipt or accrual of interest on the Series 2015B Bonds. 6. The interest on the Series 2015B Bonds is exempt from all present State of Georgia income taxes. The rights of the owners of the Series 2015B Bonds and the enforceability of the Series 2015B Bonds and the Bond Resolution may be subject to bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting creditors' rights heretofore or hereafter enacted to the extent constitutionally applicable and their enforcement may also be subject to the exercise of judicial discretion in appropriate cases. We are members of the State Bar of Georgia. Our opinions herein are limited to the laws of the State of Georgia and any applicable federal laws of the United States. This opinion is limited to the matters expressly set forth above, and no opinion is implied or may be inferred beyond the matters so stated. This opinion is intended solely for the use of the addressees and their permitted successors and/or assigns and may not be relied upon by any other person for any purpose without our prior written consent in each instance. We expressly disclaim any duty to update this opinion in the future for any changes of fact or law that may affect any of the opinions expressed herein. Very truly yours, MURRAY BARNES FINISTER LLP By: A Partner 3525 PIEDMONT ROAD - 5 PIEDMONT CENTER - SUITE 515 - ATLANTA, GEORGIA 30305 September 24, 2015 Raymond James & Associates, Inc. Atlanta, Georgia Re: $6,675,000 Augusta, Georgia Airport General Revenue Refunding Bonds, Series 2015A (Non -AMT); $3,850,000 Augusta, Georgia Airport General Revenue Refunding Bonds, Series 2015B (AMT) To the Addressee: We have acted as Bond Counsel to Augusta, Georgia (the "Consolidated Government ") in connection with the issuance by the Consolidated Government of the above- captioned revenue bonds (the "Series 2015 Bonds "). Terms used and not otherwise defined herein shall have the meaning set forth in the Official Statement (hereinafter defined). In our capacity as Bond Counsel, we have examined the Official Statement, dated September 1, 2015 (the "Official Statement "), relating to the Series 2015 Bonds, and such other documents, instruments and certificates of public officials as we have considered necessary or appropriate to enable us to render the opinions expressed herein. In all such examinations, we have assumed the genuineness of signatures on original documents and the conformity to original documents of all copies submitted to us as certified, conformed or photographic copies, and as to certificates of public officials, we have assumed the same to have been properly given and to be accurate. Based upon the examinations, certificates and provisions referred to above, we are of the opinion, as of the date hereof and under existing law, as follows: (1) No registration of the Series 2015 Bonds under the Securities Act of 1933, as amended, and no qualification of the Bond Resolution under the Trust Indenture Act of 1939, as amended, is required in connection with sale of the Series 2015 Bonds to the public. (2) We have reviewed the portions of the Official Statement appearing under the captions "INTRODUCTION - Security and Sources of Payment for the Series 2015 Bonds (except for the dollar amounts set forth under such caption), - Description of the Series 2015 Bonds (except for the information under the caption "Book -Entry Only System "), - Tax Exemption, and - Legal Authority," "THE SERIES 2015 BONDS" (except for the information under the caption "Book -Entry Bonds ") , "SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2015 BONDS" (except for the dollar amounts set forth under such caption), and "LEGAL MATTERS — Opinion of Bond Counsel," and in "APPENDIX B: SUMMARY OF THE BOND RESOLUTION," and are of the opinion that the statements made under such TELEPHONE: (678) 999 -0350 9 FACSIMILE: (678) 999 -0357 - INTERNET: www.murraybameslaw.com September 24, 2015 Page 2 captions and in such Appendix fairly summarize the matters purported to be summarized therein. We express no further opinion regarding the accuracy, completeness or sufficiency of the Official Statement. We are members of the State Bar of Georgia. Our opinions herein are limited to the laws of the State of Georgia and any applicable federal laws of the United States. This opinion is limited to the matters expressly set forth above, and no opinion is implied or may be inferred beyond the matters so stated. This opinion is intended solely for the use of the addressees and their permitted successors and/or assigns and may not be relied upon for any other purpose or by any other person for any purpose without out prior written consent. We expressly disclaim any duty to update this opinion in the future for any changes of fact or law that may affect any of the opinions expressed herein. Very truly yours, MURRAY BARNES FINISTER LLP l A Partner EXECUTIVE ORDER OF THE MAYOR OF AUGUSTA, GEORGIA APPROVING THE ISSUANCE OF REVENUE BONDS BY AUGUSTA, GEORGIA PURSUANT TO A PLAN OF FINANCE WITH RESPECT TO THE FINANCING OF CERTAIN FACILITIES TO BE OWNED BY AUGUSTA, GEORGIA AND OPERATED BY THE AUGUSTA AVIATION COMMISSION AT AUGUSTA REGIONAL AIRPORT AT BUSH FIELD Augusta, Georgia (the "Consolidated Government ") held a hearing on February 22, 2005 pursuant to the requirements of Section 147(f) of the Internal Revenue Code of 1986, as amended (the "Code ") concerning the proposed issuance by the Consolidated Government of revenue bonds in an amount not to exceed $21,500,000 with respect to certain facilities to be owned by the Consolidated Government and operated by the Augusta Aviation Commission at Augusta Regional Airport at Bush Field. The Consolidated Government intends to issue revenue bonds in one or more series for any and all of the improvements described on Exhibit A to the Report of Hearing Officer attached as ANNEX I hereto. Section 147(f) of the Code provides that if the proceeds of an issue are to be used to finance a facility or facilities located at an airport and the governmental unit issuing such bonds is the owner and operator of such airport, then such governmental unit shall be deemed to be the only governmental unit having jurisdiction over such airport for the purposes of Section 147(f) of the Code. BE IT ORDERED by the Mayor of the Consolidated Government that the issuance of revenue bonds by the Consolidated Government with respect to the financing of facilities at the Augusta Regional Airport in one or more series in an amount not to exceed $21,500,000 is hereby approved to the extent required by Section 147(f) of the Code. This Executive Order shall take effect immediately. This February 22, 2005. By: Bob Young Mayor Augusta, Georgia �O 1273067,1 REPORT OF HEARING OFFICER REGARDING PUBLIC HEARING The undersigned officer of Augusta, Georgia (the "Consolidated Government ") hereby certitics that: 1. A public hearing was held on February 22, 2005 at 11:00 a.m. at Augusta Regional - \irport at Bush Field, Banquet Room, 1501 Aviation Way. Augusta, Georgia pursuant to proper notice given in accordance with law as to the time and place of the meeting. The meeting was Open to the public. The time of the meeting and the room in which the meeting was held provided a reasonable opportunity for persons of differing views to appear and be heard. 2. The hearing officer announced the commencement of a public hearing on the proposed issuance of revenue bonds (the "Bonds ") by the Consolidated Government with respect to the financing of certain facilities to be owned by the Consolidated Government and operated by the Augusta Aviation Commission at Augusta Regional Airport at Bush Field (the "Facilities ") and that the Consolidated Government had caused the publication of a notice at least 14 days prior to the hearing in the The Augusta Chronicle, a newspaper having general circulation in the Augusta, Georgia (the "Notice "). The affidavit of the publisher of said newspaper is attached hereto, made a part hereof and marked Exhibit A . 3. No persons appeared to speak on the matter, and the hearing officer declared the public hearing closed. Based on the above information it is the recommendation of the hearing officer that the .Mayor of the Consolidated Government approve the issuance of the Bonds to the extent required by Section 147(f) of the Internal Revenue Code of 1986, as amended. This February 22, 2005. Hearing Officer , I NEX I TO EXECUTIVE ORDER OF THE MAYOR OF AUGUSTA, GEORGIA V) 1273f)67.1 EXHIBIT A TO REPORT OF HEARING OFFICER Affidavit of Publication (attached) F.3 A ;117 = i dle ;I I 1 :1 Iq L#LN 1 1 0 167, ATTORNEY �1 ,-„ � ORAGENCY ►�'l BUSINESS STATE OF GEORGIA COUNTY OF RICHMOND 4. yT� Personally appeared before me, Melanie Wad to me know, who being sworn, deposes and says: That He /She is the authorized agent of Southeastern Newspapers Corporation, a Georgia Corporation, doing business in said county under {he We name of The Augusta Chronicle, a newspaper published in said county; That He /She is authorized to make af- fidavits of publication on behalf of said publisher corporation; The Augusta Chronicle. 1M said newspaper is of general circulation in said county and in the area adjacent thereto; That He /She has reviewed the reoulaGBditions of said newspapers published on avertisement appeared in each of said editions, to -wit: (deponent) Swam to and subscribed b me Mt �' day of —20 WCOMMISSION• Notary Public JAN. 13 �411 County, Georgia. AON SV NOTARY i Puduc :v ULIUdy, L'CUJ dilly 1, .VV-) We're going to do our best to keep people from having e to go back to an institution, No. 1. But No. 2, ,.,A from to wont case scenario, that's a possibility" couldn't keep him for - aid. ' probably be institution - od Scott Russell, Walton a r. . A going to try 0 % , 41th )t, but it's going to di- e ; ser<1ces. ' an outcome the state n �owledges. i,.e going to do our best to 4 ;Bogle From having to go a 3a Institution. No. 1. ' Mr. IL w6 '-But No. 2, worst -case a ;.:. that's a possibility." l , xp would hit those with the O :Beds, such as those who w e nund•the -clock services to iependent on a ventilator, KEVIN MAR ws; - rAFF 81ft, wears the � �PBCtln0 last month's on ant of the teams ���_ three times in flrb victims and from the train. molt In death or injury ate patients or nurs �I�e rfsrdeuts. They also * all the evacuees t ag- - ed to declare 6t*mile mandatory to ne , wafered by a ; A bo two miles from the '! stood ready to V A' alert. In the late 9 Z of law enforce - ePt through the 4 WZ._ e _ nocking on an estimated to leave, 9 4e for the dan. — Mark Trail, the director of the Division of Medical Assistance said Pat Nobbie, the deputy direc- tor of the Governor's Council on Developmental Disabilities. "The waiver was created for folks like this," she said. "It was created for people with very serious physical and medical disabilities so that they wouldn't have to spend their lives living in hospitals and nursing homes. So now their status is going to be compromised." With that support, Mr. Minix can go out to restaurants or Augusta GreenJackets games or to shoot pool, Mr. Russell said. But having very high -cost people on the program, some whose care is in "the six-figure range," means denying others an opportunity, Mr. Trail said. "What I'm hoping is that we .Ir can kind of work with them to find ways to reduce the cost of their care plans," he said. But to others, that potential re- duction means losing their quality of life, Dr. Nobbie said. "If they only think they're going to save $1 million. and that $1 million would keep the people that are at jeopardy in the com- munity ... that seems like pretty good value for a million dollars." she said. Reach Tom Corwin at (706) 823.3213 or tom .corwindaugustachrcnicie.com. NOTICE OF PUBLIC HEARING ON THE PROPOSED ISSUANCE OF REVENUE BONDS BY AUGUSTA, GEORGIA WITH RESPECT TO FACILITIES AT AUGUSTA REGIONAL AIRPORT AT BUSH FIELD Miscellaneous HEARING NOTICE AIKEN COUNTY FAMILY COURT P.O. BOX 3047 AIKEN, SC 20602 -3047 Brien Katonek, Esquire Attorney at Law P.Q. Boot 1606 Akan, t1C PY#ttitP• Attomsy Mess Franklin, Esquire Attorney at Law PA. Boa 46 Aker, 8C 2,1002 Case Caption James 6 Sharon McDonald vs. Todra Cantacho, ET AL Case Number 04 -DR-02 -1672 H rlrq t Feb. 17- 2005 Tone Allotted: 30 MIN "as" Time: 10M A.M. Pursuant to your request the above matter has been Sort for hearkig. Please notify me immedi- Y ou are to no ft opposing attorney it not noted above. Dagd: Jertuary 13, 2005 lfaidi wYbrtka, Docket clerk 715 042-1 eb. 7,11,15 2005 Adv. #6346766 LEGAL NOTICE Fort GoMOrt Georyla SolidtMbn of Irrterest Restoration of Board The Department ense rec nuzes the importance of slaksholder participation for Installation Restoration Programs (IRP). Therefore, Fort Gordon wishes to determine If then is adequate public interest in the estab- lishment of a Restoration Advisortyy Board (RAH). The PAS Is lotarlded to ptmudda Public ���an ci involving � community in the The dRAeS will include community mem- bers who reflect the diverse interests of the local community. RAB members will be required to review and comment on plans and activ6isa relating to the ng environmental restoration activities at Fort Gordon. RAB members will have the opportunity to provide input on activities that will accelerate the res- toration. Members will also be expected to serve as a voluntary lialson between the com- munity and the RAB and be available to meet with community members and J or groups. RAS meetings will be open to the public. Members will be expected to serve a two year term and attend RAB meetings regularly. o quality, interested persons must be resi- dents of Columbia, Jefferson, McDuffie, or Richmond counties that may be impacted by the scheduled restoration activities to be eon. ducted at Fort Gordon. To be considered for participation in the RAB and for additional information on the selection process, interested parties must Submit their name, address, and daytime tele- phone number to: Fort Gordon, ATZH -DIE (Mr. Lange), Building 14600, Fort Gordon, GA 30905 -5209. Submittal must be received no leier than February 23, 2005. Jan. 24 -Feb. 22, 2005 Adv 0 6170204 Notice is hereby given that Augusta, Georgia (the "Consolidated Govemment") will commence a public hearing at 11 a.m. on February 22, 2005 at Augusta Regional Airport at Bush Field, Banquet Room, 1501 Aviation Way, Augusta, Georgia 30906, which hearing may be continued or adjourned, concerning the issuance of revenue bonds by the Consolidated Government to finance or refinance certain facilities to be owned by the Consolidated Government and operated by the Augusta Aviation Commission at Augusta Regional Airport at Bush Field located in Augusta, Georgia (the "Airport"). The Consolidated Government intends to issue revenue bonds in three series in an aggregate principal amount estimated not to exceed $21,500,000 (the "Bonds ") for any or all of the following improvements, enlargements and replacements at the Airport: New Terminal Buiidina — The project includes the demolition, in phases, of the existing airline passenger terminal building and the construction, in phases, of a new airline passenger terminal building consisting of new holdrooms, new ticketing and baggage make -up areas and new bag claim and bag claim handling areas, security offices, concession spaces, rental car offices and other ancillary and support space. Proceeds of the proposed Bonds also will be used for site work related to access road, parking areas and aprons, including utilities, grading and drainage and paving. Caoitalized Interest — Proceeds from the proposed Bonds will be used to fund capitalized interest on the proposed Bonds during the period of construction of the related projects. The hearing will be held before Willis "Buster" Boshears, Airport Executive Director, or his designee as hearing officer, and may be continued or adjourned. The Bonds when and if issued will be limited obligations of the Consolidated Government and will not constitute a general obligation of the State of Georgia or the Consolidated Government, nor shall the Bonds be payable in any manner by taxation, but are' payable solely from the revenues of the Airport pledged to the payment thereof. The hearing is required by Federal law because certain of the Bonds will be treated as private activity bonds under the Internal Revenue Code of 1986, as amended. Any interested person having views on the proposed issuance of the Bonds or the facilities to be financed thereby may appear and be heard at the Public Hearing. l AULDIN aENKINS INDEPENDENT ACCOUNTANT'S REPORT ON APPLYING AGREED-UPON PROCEDURES To the Members of the Augusta-Richmond County Commission Augusta, Georgia We have performed the procedures enumerated below, which were agreed to by Augusta, Georgia (the "Government"), solely to assist you in evaluating certain information included in the Preliminary Official Statement dated August 25, 2015 and the Official Statement dated September 1, 2015, relating to the issuance of the $10,525,000 Augusta Georgia Airport General Revenue Refunding Bonds, Series 2015 (the "Series 2015 Bonds"). Management of the Government is responsible for the information in the Preliminary Official Statement and the Official Statement. This agreed-upon procedures engagement was conducted in accordance with attestation standards established by the American Institute of Certified Public Accountants. The sufficiency of the procedures is solely the responsibility of the Government. Consequently, we make no representation regarding the sufficiency of the procedures described below either for the purpose for which this report has been requested or for any other purpose. At your request, we have read the minutes of the meetings of the Government subsequent to the year ended December 31, 2014, set forth in the minute books as of September 1, 2015, officials of the Government having advised us that the minutes of all such meetings through that date were set forth therein, and have carried out other procedures to September 1, 2015, as follows: 1) For the tabular presentation under the heading "Historical Airline Market Shares" on page 29 of the Official Statement, we compared the amounts presented with the corresponding amounts shown in an analysis prepared by the Government and found them to be in agreement. 2) For the tabular presentation under the heading "Historical Enplaned Passengers" on page 30 of the Official Statement, we compared the amounts presented with the corresponding amounts shown in an analysis prepared by the Government and found them to be in agreement. 3) For the tabular presentations under the heading "Historical Landed Weight (1,000 pound units)" on page 31 of the Official Statement, we compared the amounts presented with the corresponding amounts shown in an analysis prepared by the Government and found them to be in agreement. 300 MULBERRY STREET, SUITE 300 - POST OFFICE BOX 1877 - MACON, GEORGIA 31202 - 1877.478 -464 -8000 - FAX 478-464-8051 - www.mjcpa.com MEMBERS OF THE AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS 4) For the tabular presentation under the heading "Historical Jet -A Fuel Sales and Deliveries By Volume (Gallons)" on page 35 of the Official Statement, we compared the amounts presented with the corresponding amounts shown in an analysis prepared by the Government and found them to be in agreement. 5) For the tabular presentation under the heading "Historical Net Revenue from Jet -A Fuel Sales and Deliveries" on page 35 of the Official Statement, we compared the amounts presented with the corresponding amounts shown in an analysis prepared by the Government and found them to be in agreement. 6) For the tabular presentation under the heading "Historical Capital Structure of the Airport" on page 37 of the Official Statement, we compared the amounts presented to the audited financial statements of the Augusta Regional Airport at Bush Field for the years ended December 31, 2010, 2011, 2012, 2013, and 2014 and found them to be in agreement. In addition, we compared the amounts for the four -month period ended April 30, 2015 to the unaudited financial statements prepared by the Government and found them to be in agreement. 7) For the tabular presentation under the heading "Summary of Airport Revenues and Expenses" on page 41 of the Official Statement, we compared the amounts presented to the audited financial statements of the Augusta Regional Airport at Bush Field for the years ended December 31, 2010, 2011, 2012, 2013, and 2014 and found them to be in agreement. In addition, we compared the amounts for the four -month periods ended April 30, 2014 and 2015 to the unaudited financial statements prepared by the Government and found them to be in agreement. 8) For the tabular presentation under the heading "Historical Debt Service Coverage Ratios" on page 43 of the Official Statement, we compared the amounts presented with the corresponding amounts shown in an analysis prepared by the Government and found them to be in agreement. In addition, we recomputed the historical debt service coverage ratios presented in the table and found them to be in agreement. 9) For the tabular presentation under the heading "Airport Budget for Year Ending December 31, 2015" on page 44 of the Official Statement, we compared the amounts presented with the Airport's adopted and amended budget for the year ending December 31, 2015 and found them to be in agreement. 10) For the tabular presentation under the heading "Capital Improvements Program" on page 45 of the Official Statement, we compared the amounts presented with the corresponding amounts shown in an analysis prepared by the Government and found them to be in agreement. 11) For the tabular presentation under the heading "Contributions to Defined - Benefit Pension Plans" on page 49 of the Official Statement, we compared the amounts presented to the financial statements of the Augusta Regional Airport at Bush Field for the years ended December 31, 2010, 2011, 2012, 2013, and 2014 and found them to be in agreement. AULDIN & ENKINS 12) For the tabular presentation under the heading "Analysis of Funding Progress of Defined - Benefit Pension Plans" on page 49 of the Official Statement, we compared the amounts presented to the financial statements of the Augusta Regional Airport at Bush Field for the years ended December 31, 2010, 2011, 2012, 2013, and 2014 and found them to be in agreement. 13) For the tabular presentation under the heading "Membership in Defined - Benefit Pension Plans as of January 1, 2014" on page 50 of the Official Statement, we compared the amounts presented to the financial statements of the Augusta Regional Airport at Bush Field for the year ended December 31, 2014 and found them to be in agreement. 14) For the tabular presentation under the heading "Insurance Coverage" on page 51 of the Official Statement, we compared the amounts presented to the financial statements of the Augusta Regional Airport at Bush Field for the year ended December 31, 2014 and found them to be in agreement. 15) We obtained the unaudited trial balances of the Airport as of and for the six months ended June 30, 2015 and 2014, noting total assets to be $99,209,170 and $102,712,846, respectively. 16) We obtained the unaudited trial balances of the Airport as of and for the six months ended June 30, 2015 and 2014, noting total liabilities to be $17,450,503 and $22,673,855, respectively. 17) We obtained the unaudited trial balances of the Airport as of and for the six months ended June 30, 2015 and 2014, noting total net position to be $77,891,013 and $76,944,858, respectively. 18) We obtained the unaudited trial balances of the Airport as of and for the six months ended June 30, 2015 and 2014, noting total operating revenues to be $7,439,200 and $7,584,700, respectively. 19) We obtained the unaudited trial balances of the Airport as of and for the six months ended June 30, 2015 and 2014, noting total operating expenses to be $5,580,322 and $5,639,499, respectively. 20) We obtained the unaudited trial balances of the Airport as of and for the six months ended June 30, 2015 and 2014, noting total non - operating revenues to be $2,008,777 and $1,148,933, respectively. 21) We obtained the unaudited trial balances of the Airport as of and for the six months ended June 30, 2015 and 2014, noting total change in net position to be $3,867,655 and $3,094,134, respectively. We were not engaged to, and did not conduct an audit, the objective of which would be the expression of an opinion on the specified elements, accounts, or items referenced above. Accordingly, we do not express such an opinion. Had we performed additional procedures, other matters might have come to our attention that would have been reported to you. Z AULDIN ENKINS This report is intended solely for the information and use of the Members of the Augusta - Richmond County Commission as it relates to information included in the Preliminary Official Statement and the Official Statement, and is not intended to be and should not be used by anyone other than these specified parties, except that reference may be made to it in any list of closing documents pertaining to the offering of the Series 2015 Bonds. i Macon, Georgia September 1, 2015 AULDIN & ENKINS Members of the Augusta- Richmond County Commission Augusta, Georgia RE: $11,250,000* Augusta, Georgia Airport General Revenue Refunding Bonds, Series 2015 (the "Series 2015 Bonds ") We consent to the reference made to our firm under the captions "INTRODUCTION — Professionals Involved in the Offering" and "MISCELLANEOUS — Independent Auditors" included in the Preliminary Official Statement dated August 25, 2015 relating to the $11,250,000* in aggregate principal amount of AUGUSTA, GEORGIA AIRPORT GENERAL REVENUE REFUNDING BONDS, SERIES 2015 and the use of our report dated June 29, 2015 on our audit of the Augusta Regional Airport at Bush Field's financial statements as of and for the years ended December 31, 2014 and 2013, included in Appendix A to the Preliminary Official Statement. j Macon, Georgia August 25, 2015 * Preliminary, subject to change 300 MULBERRY STREET, SUITE 300 • POST OFFICE BOX 1877 • MACON, GEORGIA 31202 - 1877.478- 464 -8000 o FAX 478 -464 -8051 - www.mjcpa.com MEMBERS OF THE AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS AULDIN & ENKINS Members of the Augusta- Richmond County Commission Augusta, Georgia RE: $10,525,000 Augusta, Georgia Airport General Revenue Refunding Bonds, Series 2015 (the "Series 2015 Bonds ") We consent to the reference made to our firm under the captions "INTRODUCTION — Professionals Involved in the Offering" and "MISCELLANEOUS — Independent Auditors" included in the Official Statement dated September 1, 2015 relating to the $10,525,000 in aggregate principal amount of AUGUSTA, GEORGIA AIRPORT GENERAL REVENUE REFUNDING BONDS, SERIES 2015 and the use of our report dated June 29, 2015 on our audit of the Augusta Regional Airport at Bush Field's financial statements as of and for the years ended December 31, 2014 and 2013, included in Appendix A to the Official Statement. Macon, Georgia September 1, 2015 300 MULBERRY STREET, SUITE 300 • POST OFFICE BOX 1877 - MACON, GEORGIA 31202 - 1877.478- 464 -8000 - FAX 478 - 464 -8051 • www.mjcpa.com MEMBERS OF THE AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS G E" o R G I A September 1, 2015 0mce of the Mayor Hardie Davis, Jr. Mayor Ms. Sonia Henry U.S. Bank National Association Corporate Trust Services 1349 W. Peachtree Street, NW, Suite 1050 Atlanta, GA 30309 Attention: Corporate Trust Department Re: Redemption of Augusta, Georgia Airport Passenger Facility Charge and General Revenue Bonds, Series 2005A (Non -AMT) and Augusta, Georgia, Airport General Revenue Bonds, Series 2005C (AMT) To the Addressee: The above - referenced bonds (the "Bonds ") were issued pursuant to a Master Bond Resolution (the "Prior Master Bond Resolution ") and the First Supplemental Bond Resolution (the "First Supplemental Bond Resolution ") adopted by the Augusta - Richmond County Commission (the "Commission ") on February 1, 2005 and by the Augusta Aviation Commission (the "Aviation Commission ") on January 20, 2005, as supplemented by a Second Supplemental Bond Resolution (the "Second Supplemental Bond Resolution ") adopted by the Commission and the Aviation Commission on February 17, 2005. In accordance with Sections 302, 303 and 1205 of the Prior Master Bond Resolution and Section 1.4 of the Second Supplemental Bond Resolution and pursuant to the adoption by the Commission and the Aviation Commission of the hereafter described Master Bond Resolution on September 1, 2015, you are hereby directed to provide notice to the bondholders on September 2, 2015 to redeem (a) $8,990,000 principal amount of the Series 2005A Bonds maturing on January 1, 2035 and (b) $6,090,000 principal amount of the Series 2005C Bonds maturing on January 1, 2031, on October 2, 2015 (the "Redemption Date ") at a redemption price of par plus accrued interest through the Redemption Date (the "Redemption Price ") from amounts on deposit in the 2005 Defeasance Account created under the Master Bond Resolution and adopted by the Commission and the Aviation Commission on September 1, 2015 in connection with the refunding of the Series 2005A Bonds and the Series 2005C Bonds. Please provide a notice of the call for redemption in accordance with Sections 302 and 303 of the Prior Master Bond Resolution. You are hereby instructed to send the redemption notices substantially in the attached forms on September 2, 2015 to (a) the Electronic Municipal Market Access ( "EMMA ") System, f and (b) the owners of the Bonds. The redemption notices should be sent in accordance with the f Prior Master Bond Resolution. 535 Telfair Street • Suite 200 - Augusta, GA 30901 706.821.1831 • Fax: 706.821.1835 www.augustaga.gov Please contact the undersigned if you have any questions. Sincerely, 5�P (Signatures continued on following page) AUGUSTA, GEORGIA AUGUSTA AVIATION COMMISSION (34�-6 Cedric J. Jo so Chairman h i 1 1, bi 1 V 11 1 146 P1 10 k lull i U 4 1 I I gil i I i i rm 1 1W. , V - -1 m 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. Maturity Date CUSIP Number (Januga 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 Is' 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 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 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 1 It 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 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 Q DIRECTION TO U.S. BANK NATIONAL ASSOCIATION September 24, 2015 U.S. Bank National Association Corporate Trust Services Suite 1050 1349 West Peachtree Street Atlanta, GA 30309 Re: $8,990,000 Augusta, Georgia Airport Passenger Facility Charge and General Revenue Bonds, Series 2005A (Non -AMT) (the "2005A Bonds ") $4,415,000 Augusta, Georgia Airport Passenger Facility Charge and General Revenue Bonds, Series 2005B (AMT) (the "2005B Bonds ") $6,200,000 Augusta, Georgia Airport General Revenue Bonds, Series 2005C (AMT) (the "2005C Bonds" and together with the 2005A Bonds and the 2005B Bonds, the "2005 Bonds ") To the Addressee: The 2005 Bonds were issued pursuant to the Master Bond Resolution adopted by the Augusta - Richmond County Commission (the "Commission ") of Augusta, Georgia (the "Consolidated Government") on February 1, 2005 and by the Augusta Aviation Commission (the "Aviation Commission ") on January 20, 2005 (the "Master Bond Resolution "), as supplemented and amended by a First Supplemental Bond Resolution adopted by the Commission on February 1, 2005 and by the Aviation Commission on January 20, 2005 (the "First Supplemental Bond Resolution ") and by a Second Supplemental Bond Resolution adopted by the Commission and by the Aviation Commission on February 17, 2005 (the "Second Supplemental Bond Resolution" and, together with the Master Bond Resolution and the First Supplemental Bond Resolution, the "Prior Bond Resolution "). Pursuant to a Master Bond Resolution adopted by the Commission and the Aviation Commission on September 1, 2015 (the "Bond Resolution "), the Issuer is issuing and delivering $6,675,000 in aggregate principal amount of its Airport General Revenue Refunding Bonds, Series 2015A (Non -AMT) (the "Series 2015A Bonds ") and $3,850,000 in aggregate principal amount of its Airport General Revenue Refunding Bonds, Series 2015B (AMT) (the "Series 2015B Bonds" and together with the Series 2015A Bonds, the "Series 2015 Bonds ") the proceeds of which will be applied, in part, to the refunding of all of the currently outstanding 2005A Bonds and 2005C Bonds (collectively, the "Refunded Bonds "). The 2005B Bonds were paid in full on January 1, 2015. In connection with the refunding of the Refunded Bonds, it is necessary to transfer moneys held in accounts and funds under the Prior Resolution relating to the 2005 Bonds as directed herein and as authorized by the Bond Resolution. Proceeds of the Series 2015A Bonds in the amount of $6,943,600.06 and proceeds of the Series 2015B Bonds in the amount of $4,133,684.58 (collectively, the "Redemption Proceeds ") will be received by you (the "Bank ") on the date hereof and shall be deposited in the 2005 Defeasance Account as provided in the Authentication Order relating to the Series 2015 Bonds and dated the date hereof. The Bank shall also receive funds from the Consolidated Government in the amount of $230,715, of which $125,000.05 (the "Defeasance Equity Contribution ") shall be deposited to the credit of the 2005 Defeasance Account and $105,714.95 (the "Costs of Issuance Equity Contribution ") shall be deposited to the Costs of issuance Fund and applied to costs of issuance of the Series 2015B Bonds. The Consolidated Government and the Aviation Commission further authorizes the following transfers to be made from accounts and funds held under the Prior Resolution: 1. $468,094.74 shall be transferred from the Balloon Bonds Reserve Account for deposit to the PFC Balloon Bonds Reserve Account. 2. Following the transfer in (1), the following transfers shall be made of the total $2,866,318.85 on deposit in the in the PFC Balloon Bonds Reserve Account: (a) $1,665,963.81 allocable to the Refunded 2005A Bonds (as defined in the Bond Resolution) shall be transferred to the 2005 Defeasance Account and applied to refund the Refunded 2005A Bonds, (b) $1,200,355.04 allocable to the 2005B Bonds shall be transferred to the PFC Capital Fund held by Regions Bank. 3. The following transfers shall be made of the total $1,508,816.77 on deposit in the 2005A/B Subaccount of the PFC Debt Service Reserve Account allocable to the Refunded 2005A Bonds shall be applied as follows: (a) $392,006.97 shall be transferred to the 2005 Defeasance Account and applied to refund the Refunded 2005A Bonds, (b) $667,500 shall be deposited into the Series 2015A Account of the Debt Service Reserve Fund under the Bond Resolution, and (c) $449,309.80 shall be transferred to Regions Bank for deposit to the Capital Improvement Account of the Capital Fund. 4. The following transfers shall be made of the total $262,932.84 on deposit in the Series 2005A/B Subaccount of the Interest Account and the Principal Account of the PFC Debt Service Fund: (a) $105,461.48 allocable to the Refunded 2005A Bonds shall be transferred to the 2005 Defeasance Account and applied to refund the Refunded 2005A Bonds and (b) $157,471.36 allocable to the 2005B Bonds shall be transferred to Regions Bank for deposit to the PFC Capital Fund. 5. Following the transfer in (1), the balance of $1,500,722.75 on deposit in the Balloon Bonds Reserve Account shall be transferred to the 2005 Defeasance Account and applied to refund the Refunded 2005C Bonds (as defined in the Bond Resolution). 2 6. $710,452.05 on deposit in the Series 2005C Subaccount of the Debt Service Reserve Account under the Prior Resolution shall be applied as follows: (a) $325,452.05 shall be transferred to the 2005 Defeasance Account and applied to refund the Refunded 2005C Bonds, (b) $385,000 shall be deposited into the Series 2015B Account of the Debt Service Reserve Fund under the Bond Resolution. 7. $89,038.78 on deposit in the Series 2005C Subaccount of the Interest Account and the Principal Account of the Debt Service Fund shall be transferred to the 2005 Defeasance Account and applied to refund the Refunded 2005C Bonds $1,145,859.03 on deposit in the Renewal and Replacement Fund shall be transferred to Regions Bank for deposit to the Capital Improvement Account of the Capital Improvement Fund. The amounts to be transferred to the 2005 Defeasance Account as directed in paragraphs (2) through (7) above (the "Transferred Funds ") together with the Defeasance Equity Contribution and the Redemption Proceeds shall be deposited to the 2005 Defeasance Account, shall be held uninvested and shall be used to redeem the Refunded Bonds on October 2, 2015 by paying the principal amount thereof and interest thereon corning due on October 2, 2015. The Bank is hereby directed to deposit all amounts on deposit in the Operating and Maintenance Reserve Fund under the Prior Bond Resolution to the credit of the Operating and Maintenance Reserve Fund under the Bond Resolution. By execution of the acknowledgement hereto, the Bank confirms (a) with respect to the Refunded Bonds, receipt of the Redemption Proceeds and the Defeasance Equity Contribution, the deposit to the 2005 Defeasance Account of the Redemption Proceeds and the Defeasance Equity Contribution, the transfer to the 2005 Defeasance Account of the Transferred Proceeds, (b) funds on deposit in the Renewal and Replacements Fund have been transferred to Regions Bank, (c) receipt of the Costs of Issuance Equity Contribution and the deposit thereof to the Costs of Issuance Fund and (d) the payment in full of all fees and expenses owed to the Bank pursuant to the Prior Resolution. 3 AUGUSTA, GEORGIA (SEAL) J B Mayor By: Chairman, Aug to Mviation Commission ��.•M:'. Kw4L h '1S r `4 ssion tom• ! a � A { 3 (Direction to U.S. Bank National Association) This First Amendment to Airline Operating Agreement And Terminal Building Lease, dated September 24, 2015, hereinafter referred to as this "First Amendment," by and between Augusta, Georgia, a political subdivision of the State of Georgia, by and through the Augusta Aviation Commission, hereinafter referred to as the "Aviation Commission" and Delta Air Lines, Inc., a corporation organized and existing under the laws of the State of Delaware and authorized to do business in the State of Georgia, hereinafter referred to as "Airline ". WITNESSETH WHEREAS, the Aviation Commission is operator of the Augusta Regional Airport (Airport) located in Augusta, Georgia and has the right to lease portions of such Airport and to grant operating privileges thereon; and WHEREAS, on September 26, 2013, the Panties entered into an Airline Operating Agreement and Terminal Building Lease (the "Original Agreement ") which includes certain provisions related to the Augusta, Georgia Airport Revenue Bonds, Series 2005 (the "Prior Bonds "); and WHEREAS, the Prior Bonds were issued 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; and WHEREAS, the Aviation Commission, has determined that due to present market conditions and in order to achieve debt service savings, that this time it should refund all of the outstanding Prior Bonds currently outstanding in the aggregate principal amount of $15,080,000; and WHEREAS, the Aviation Commission has adopted a Master Bond Resolution for the issuance of Airport General Revenue Refunding Bonds, Series 2015A and Series 2015E (collectively the "Series 2015 Bonds ") in an aggregate principal amount of $10,525,000 to refund the Prior Bonds; and WHEREAS, the Aviation Commission and the Airline desire to amend the Original Agreement to reflect issuance of the Series 2015 Bonds and the adoption of the Master Bond Resolution relating to the Series 2015 Bonds; and NOW, THEREFORE, the Aviation Commission and Airline agree to amend the Original Agreement as follows. up The definitions in Article 1 — Definitions, Section 1.01 in the Original Agreement are hereby amended, modified and supplemented as follows: "Airfield" or "Airfield Area" shall mean those portions of the Airport which provide for the landing, takeoff, taxiing, movement, or staging of aircraft including navigational aids, hazard designation and warning devices, airfield security roads, fencing, lighting, runway protection zones, aviation easements and interests in property utilized in connection therewith. "Airfield Area Requirement" shall be the sum of the amounts set forth in paragraphs 1 -5 of Section 6.07, subsection B. "Airline Leased Premises" or "Leased Premises" shall mean the following: "Exclusive Use Space" shall mean only those premises in the Terminal Building that are leased by the Aviation Commission to Airline for its exclusive use. Exclusive Use Space is primarily used for ticket counter, office area, and baggage makeup functions. "Joint Use Space" shall mean those premises that are used by airlines, including Airline, for their joint use (principally, the Terminal Building, hold room areas, baggage claim and baggage breakdown areas). "Preferential Use Space" shall mean the premises from time to time provided by the Aviation Commission to an Airline for its preferential and nonexclusive use and shall include passenger holdrooms, Aircraft Parking positions, and Loading Bridges. "Airport Expense" shall mean all costs and expenses incidental to, necessary for, or arising out of the operation of the Airport, including but not limited to direct and allocated indirect Operation and Maintenance Expenses; Annual Debt Service; Other Indebtedness; Coverage; required reserve account funding and replenishment; and the cost of defending, settling, or satisfying any litigation or threatened litigation that relates to the Airport, or any aspect thereof. First Amendment to the Airline Operating Agreement and Terminal Building Lease Page 2 of 6 "Annual Debt Service" or "Annual Debt Service Requirement" means the Debt Service Requirement in each year that the Bonds are outstanding. "Apron Area Requirement" shall be the sum of the amounts set forth in paragraphs 1 -5 of Section 6.06, subsection A. "Bonds" means any revenue bonds authorized by and authenticated and delivered pursuant to the Bond Resolution including the Series 2015 Bonds. "Bond Resolution" shall mean the Master Bond Resolution for the Series 2015 Bonds adopted by the Aviation Commission on September 1, 2015 and the Augusta Richmond County Commission on September 1, 2015 as it may from time to time be modified, supplemented, or amended by Supplemental Resolutions (as defined in the Master Bond Resolution). "Debt Service Requirement" shall have the meaning set forth in the Bond Resolution. "Loading Bridge Use Fee" shall be payment required of the Airline for the use of the Loading Bridges calculated in accordance with Sections 5.03 and 6.05. "Loading Bridge Requirement" shall be the sum of the amounts set forth in paragraphs 1 -5 of Section 6.05, subsection A. "Majority in Interest of Airlines" or ""MU" shall mean, in the Airfield Area, at least fifty one percent (51 %) of the Signatory Airlines, which, together, have landed at least 51% of the total Maximum Gross Certificated Landing Weight by all Signatory 'Airlines at the Airport during the most recent six (6) month period. In the Terminal Building, MII shall mean at least 51% of the Signatory Airlines, which, together, have paid 51% of the total Terminal Rentals paid by all Signatory Airlines at the Airport during the most recent six (6) month period. Solely for determining MII, no Air Transportation company shall be deemed to be a Signatory Airline so long as any event of default with respect to such Air Transportation company has occurred .and is continuing or such Air Transportation company operates less than one (1) average daily flight. MII shall only apply to the Airfield Area and Terminal Building and only as it relates to the placement of new debt for First Amendment to the Airline Operating Agreement and Terminal Building Lease Page 3 of 6 purposes of Capital Improvements, refinancing or acquisition for those capital improvements requiring Mll consideration. For purposes of VIII votes, Signatory Airlines that have executed Scheduled Airline Operating Agreement and Terminal Building Leases substantially the same as this Agreement will be the only airlines permitted to vote. "Series 2015 Bonds" means collectively the Airport General Revenue Refunding Bonds, Series 2015A and Series 201513, in an original aggregate principal amount of $10,525,000, issued pursuant to the Bond Resolution. "Terminal Building Requirement" shall be the sum of the amounts set forth in paragraphs 1 -5 of Section 6.04, subsection A. 2. The defined term "Airport Revenue Fund" set forth in Article 1— Definitions, Section 1.01 in the Original Agreement is hereby deleted. 0 All references in Section 6.06, (i) to the phrase "Aircraft Parking Positions Fee ", shall be deemed to be read as "Aircraft Parking Position fee" and (ii) to the phrase "Apron Area Fee" shall be deemed to be read as "Apron Area fee." 4. Section 6.07, subsection A, 5 is hereby amended and restated to read as follows: 5. Any other Airfield Area expense not included in Paragraphs (1) to (5) above. Section 8.01, Need for Acquisition (s) Capital Expenditures is hereby amended and restated to read as follows: The parties hereto recognize that Capital Improvements or acquisitions to preserve, protect, enhance, expand, or otherwise improve the Airport, or part thereof, may be required during the term of this Agreement. Any such Capital Improvement(s) or acquisition(s) paid for, First Amendment to the Airline Operating Agreement and Terminal Building Lease Page 4 of 6 financed, or refinanced with debt which negatively impacts rates and charges will be subject to the provisions of Section 8.02 below. 6. In Section 8.02, all references to the term "Airport Improvement Bonds" shall be deemed to mean "Bonds ". Additionally, all references to the term "Subordinated Bonds" shall be deemed to mean "Subordinate Lien Bonds ". El Section 16.04 Security, is hereby amended and restated to read as follows: Airline shall not bring into or operate any vehicle or motorized equipment within any air operations area, unless having first complied with all insurance provisions and requirements specified in this Agreement, as well as the Airport Vehicle Training Program and the Airport Tenant Security Program both of which as defined by the Aviation Commission and the TSA respectively. When operating within any Air Operations Area, Airline shall cause its vehicles and equipment to move directly to and from the entrance gate or Airline Premises and the aircraft and shall not enter or move about any other Non - Movement Area. E� Section 16.05 Environmental, subsection A, 2 General Conditions is hereby amended and restated to read as follows: Airline shall not cause or permit any Hazardous Materials hereinafter to be placed, stored, generated, used, released, or disposed of in, on, under, about, or transported from any Airport premises by Airline, its agents, employees, contractors, or other person except in compliance with applicable Environmental Laws (as hereinafter defined). Any cost of remediating liabilities legally imposed on the Airport by the EPA directly caused by Airline's operations at the Airport will be additional rent under this Agreement. First Amendment to the Airline Operating Agreement and Terminal Building Lease Page 5 of 6 9. Except as expressly supplemented and amended by this First Amendment, the Original Agreement is and shall remain unchanged and in full force and effect in accordance with its terms, IN 'WITNESS HEREOF, the parties hereto have caused this First Amendment to the Original Agreement to be effective on September 24, 2015. ATTEST: AUGUSTA AVIATION COMMISSION By:. Secretary Cedric Johns n, hairman ATTEST: C Secre ary A a t e tC -H 14% 'A IJ dw.X • t %i CORGtk,o0 t DELTA AIR LINES, INC. Daniel . Garland, Regional Director Corporate Real Estate AUGUSTA- RICHMOND C-CR NTY: Hardie E) vis, l , Mayor First Amendment to the Airline Operating Agreement and Terminal Building Lease Page 6 of 6 CGS 5 ° � 5 This First Amendment to Airline Operating Agreement And Terminal Building Lease, dated September 24, 2015, hereinafter referred to as this "First Amendment," by and between Augusta, Georgia, a political subdivision of the State of Georgia, by and through the Augusta Aviation Commission, hereinafter referred to as the "Aviation Commission" and American Airlines, Inc., a corporation organized and existing under the laws of the State of Delaware and authorized to do business in the State of Georgia, as successor to U.S. Airways, Inc., hereinafter referred to as "Airline ". WHEREAS, the Aviation Commission is operator of the Augusta Regional Airport (Airport) located in Augusta, Georgia and has the right to lease portions of such Airport and to grant operating privileges thereon; and WHEREAS, on September 26, 2013, the Parties entered into an Airline Operating Agreement and Terminal Building Lease (the "Original Agreement ") which includes certain provisions related to the Augusta, Georgia Airport Revenue Bonds, Series 2005 (the "Prior Bonds ");. and WHEREAS, the Prior Bonds were issued 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; and WHEREAS, the Aviation Commission has determined that due to present market conditions and in order to achieve debt service savings, that this time it should refund all of the outstanding Prior Bonds currently outstanding in the aggregate principal amount of $15,080,000; and WHEREAS, the Aviation Commission has adopted a Master Bond Resolution for the issuance of Airport' General Revenue Refunding Bonds, Series 2015A and Series 2015B (collectively the "Series 2015 Bonds ") in an aggregate principal amount of $10,525-,000 -to refund the Prior Bonds; and "Airport Expense" shall mean all costs and expenses incidental to, necessary for, or arising out of the operation of the Airport, including but not limited to direct and allocated indirect Operation and Maintenance Expenses; Annual Debt Service; Other Indebtedness; Coverage; - required reserve - account funding and replenishment; and the cost of defending, settling, or satisfying any litigation or threatened litigation that relates to the Airport, or any aspect thereof. "Annual Debt Service" or "Annual Debt Service Requirement" means the Debt Service Requirement in each year that the Bonds are outstanding. "Apron Area Requirement" shall be the sum of the amounts set forth in paragraphs 1.5 of Section 6.06, subsection A. "Bonds" means any revenue bonds authorized by and authenticated and delivered pursuant to the Bond Resolution including the Series 2015 Bonds. "Bond Resolution" shall mean the Master Bond Resolution for the Series 2015 Bonds adopted by the Aviation Commission on September 1, 2015 and the Augusta Richmond County Commission on September 1, 2015 as it may from time to time be modified, supplemented, or amended by Supplemental Resolutions (as defined in the Master Bond Resolution). "Debt Service Requirement" shall have the meaning set forth in the Bond Resolution. "Loading Bridge Use Fee" shall be'payment required of the Airline for the use of the Loading Bridges calculated in accordance with Sections 5.03 and 6.05. "Loading Bridge Requirement" shall be the sum of the amounts set forth in paragraphs 1 -5 of Section 6.05, subsection A. "Majority in Interest of Airlines" or ' 1 "M11" shall mean, in the Airfield Area, at least fifty one percent (51 %) of the Signatory Airlines, which, together, have landed at least 51 % of-the total Maximum Gross Certificated Landing Weight by all Signatory Airlines at the Airport during the First Amendment to the Airline Operating Agreement and Terminal Building Lease Page 3 of 7 most recent six (6) month period. In the Terminal Building, Mil shall mean at least 51 % of the Signatory Airlines, which, together, have paid 51% of the total Terminal Rentals paid by all Signatory Airlines at the Airport during the most recent six (6) month period. Solely for determining MR, no Air Transportation company shall be deemed to be a Signatory Airline so long as any event of default with respect to such Air Transportation company has occurred and is continuing or such Air Transportation company operates less than one (1) average daily flight. MII shall only apply to the Airfield Area and Terminal Building and only as it relates to the placement of new debt for purposes of Capital Improvements, refinancing or acquisition for those capital improvements requiring MII consideration. For purposes of NM votes, Signatory Airlines that have executed Scheduled Airline Operating Agreement and Terminal Building Leases substantially the same as this Agreement will be the only airlines permitted to vote. "Series 2015 Bonds" means collectively the Airport General Revenue Refunding Bonds, Series 2015A and Series 20158, in an original aggregate principal amount of $10,525,000, issued pursuant to the Bond Resolution. "Terminal Building Requirement" shall be the sum of the amounts set forth in paragraphs 1 -5 of Section 6.04, subsection A. 2 , The defined term "Airport Revenue Fund" set forth in Article 1— Definitions, Section 1.01 in the Original Agreement is hereby deleted. 3. All references in Section 6.06, (i) to the phrase "Aircraft Parking Positions Fee ", shaIl be deemed to be read as "Aircraft Parking Position fee" and (ii) to the phrase "Apron Area Fee" shall be deemed to be read as "Apron Area fee." 4. Section 6.07, subsection A, 5 is hereby amended and restated to read as follows: 5. Any other Airfield Area expense not included in Paragraphs (1) to (5) above. First Amendment to the Airline Operating Agreement and Terminal Building Lease Page 4 of 7 5. Section 8.01, Need for Acquisition (s) Capital Expenditures, is hereby amended and restated to read as follows: The parties hereto recognize that Capital Improvements or acquisitions to preserve, protect, enhance, expand, or otherwise improve the Airport, or part thereof, may be required during the term of this Agreement. Any such Capital Improvement(s) or acquisition(s) paid for, financed, or refinanced with debt which negatively impacts rates and charges will be subject to the provisions of Section 8.02 below. 6. In Section 8.02, all references to the term "Airport Improvement Bonds" shall be deemed to mean "Bonds ". Additionally, all references to the term "Subordinated Bonds" shall be deemed to mean "Subordinate Lien Bonds ". 7. Section 16.04 Security, is hereby amended and restated to read as follows: Airline shall not bring into or operate any vehicle or motorized equipment within any air operations area, unless having first complied with all insurance provisions and requirements specified in this Agreement, as well as the Airport Vehicle Training Program and the Airport Tenant Security Program both of which as defined by the Aviation Commission and the TSA respectively. When operating within any Air Operations Area, Airline shall cause its vehicles and equipment to move directly to and fi-om the entrance gate or Airline Premises and the aircraft and shall not enter or move about any other Non - Movement Area. 8. Section 16.05 Environmental, . subsection A, 2 General Conditions is hereby amended and restated to read as follows: Airline shall not cause or permit any Hazardous Materials hereinafter to be placed, stored, generated, used, released, or disposed of in, on, under, about, or transported from any Airport premises by Airline, its agents, employees, contractors, or other person except in compliance with applicable Environmental Laws (as hereinafter defined). Any First Amendment to the Airline Operating Agreement and Terminal Building Lease Page 5 of 7 cost of remediating liabilities legally imposed on the Airport by the EPA directly caused by Airline's operations at the Airport will be additional rent under this Agreement. 9. This Agreement is amended to change the Airline's name from U.S. Airways, Inc. to American Airlines, Inc. 10. Section 17.17 Notices, is hereby amended to change the notification address for the Airline to: American Airlines Attn: Vice President of Corporate Real Estate 4333 Amon Carter Blvd MD5317 Ft. Worth, Texas 76155 11. Except as expressly supplemented and amended by this First Amendment, the Original Agreement is and shall remain unchanged and in full force and effect in accordance with its terms. BALANCE OF PAGE LEFT BLAND INTENTIONALLY First Amendment to the Airline Operating Agreement and Terminal Building Lease Page 6 of 7 IN WITNESS HEREOF, the parties hereto have caused this First Amendment to the Original Agreement to be effective on September 24, 2015, ATTEST: By: Secretary ATTEST: AUGUSTA AVIATION COMMISSION K?A �' Cedric Johnso , - airman ;al Estate First Amendment to the Airline Operating Agreement and Terminal Building Lease Pago 7 of 7 AUGUSTA - RICHMOND COUNTY: k� Hardie Davis, Jr /Mayor l MURRAY BARNES FINISTER LLP 3525 PIEDMONT ROAD • 5 PIEDMONT CENTER • SUITE 515 • ATLANTA, GEORGIA 30305 October 30, 2015 Timothy E. Schroer, CPA Assistant Director of Finance Augusta, Georgia 530 Greene Street Augusta, GA 30901 Ms. Risa Bingham, CPA Finance Director Augusta Regional Airport 1501 Aviation Way Augusta, GA 30906 Re: $6,675,000 Augusta, Georgia Airport General Revenue Refunding Bonds, Series 2015A (Non -AMT) and $3,850,000 Augusta, Georgia Airport General Revenue Refunding Bonds, Series 2015B (AMT) Dear Tim and Risa: Thank you again for allowing us to act as bond counsel to Augusta - Richmond County (the "Consolidated Government ") in connection with the issuance of the above - captioned airport general revenue refunding bonds (collectively, the "Bonds "). The purpose of this letter is to (a) remind you of the Consolidated Government's post - closing obligations to (i) comply with its policy with respect to tax- exempt debt (the "Tax Policy "), (ii) comply with its obligations contained in the Continuing Disclosure Certificate and (iii) comply with its obligations to retain records related to the Bonds and (b) advise you that our representation has terminated. Tax Policy The Consolidated Government has previously approved a Tax Policy. In the Tax Policy, the Consolidated Government agreed to, among other things, (a) monitor private business use of property that was financed with the proceeds of its tax- exempt debt, including the Bonds, and take remedial action with respect thereto and (b) monitor compliance with the arbitrage, yield restriction and rebate requirements related to the Bonds and its other tax- exempt debt. The Tax Policy should be reviewed annually with staff. TELEPHONE: (678) 999.0350 • FACSIMILE: (678) 999 -0357 • INTERNET: www.murraybarneslaw.com Mr. Timothy E. Schroer, CPA Ms. Risa Bingham, CPA October 30, 2015 Page 2 Continuing Disclosure In the Continuing Disclosure Certificate, the Consolidated Government agreed to provide updated operating and financial data annually (the "Annual Report") to the Municipal Securities Rulemaking Board's Electronic Municipal Market Access System ( "EMMA ") and to provide notices of certain events to EMMA (the "Event Notices "). The Event Notices must be filed almost immediately after the occurrence of the event (within 10 business days). The Annual Report must include (a) the audited financial statements of Augusta Regional Airport at Bush Field (the "Airport") and (b) the following categories of financial and operating data (the "Operating Data ") with respect to the Airport contained in the Official Statement: (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. The Annual Report can be filed in two formats: (a) the audited financial statements of the Airport with a separate document containing the Operating Data or (b) the Airport's audited financial statements may include a statistical section that contains the Operating Data. The Annual Report must be filed not later than the last day of the seventh month after the end of each fiscal year (currently July 31) in one of the two foregoing formats. We are happy to assist you in completing these reports if you so direct us. Rebate In the Tax Certificate, the Consolidated Government agreed to rebate any arbitrage profits (Le., the earnings on the Bond proceeds above the yield on the Bonds) on the gross proceeds of the Bonds (which were deposited primarily in the 2005 Defeasance Account and the Costs of Issuance Fund, with a de minimus amount of $1,910.57 being deposited to the Series 2015B Subaccount of the Interest Account of the Debt Service Fund (the "2015B Subaccount" )) unless it satisfies one of the arbitrage rebate exceptions. The proceeds held in the 2005 Defeasance Account were held uninvested from the closing date of September 24, 2015 to the October 2, 2015 redemption date, so no rebate will be due on such funds. Earnings on moneys in the Debt Service Reserve Account for each series of the Bonds above the Bond yield will need to be rebated. The Consolidated Government will satisfy the 6 -month arbitrage rebate exception with respect to the remaining Bond proceeds if the nominal amount left in the Costs of Issuance Fund after the refunding and the proceeds deposited to the 2015B Subaccount are used for the first interest payment on the Bonds as directed in the Tax Certificate. You will need to arrange for the timely computation of any rebate liability. If rebate is payable, you must file Form 8038 -T with the Treasury Department and pay it every five years. In addition, yield reduction payments may need to be made if Bond proceeds remain unspent three years after the issuance date. Mr. Timothy E. Schroer, CPA Ms. Risa Bingham, CPA October 30, 2015 Page 3 Record Retention In the Tax Certificate, the Consolidated Government agreed to retain all records relating to the Bonds in order to comply with Section 6001 of the Code. These records should include, among other things, (a) basic records relating to the transaction (including the bond documents, the opinion of bond counsel, etc.), (b) documents evidencing expenditure of the proceeds of the Bonds, (c) documentation evidencing the use of property that was refinanced with the proceeds of the Bonds by public and private entities (e.g., copies of management contracts, leases and research agreements) and (d) documentation pertaining to any investment of the proceeds of the Bonds (including the purchase and sale of securities, SLG subscriptions, yield calculations for each class of investments, actual investment income received from the investment of Bond proceeds, guaranteed investment contracts and rebate calculations). Such records must be maintained as long as the Bonds are outstanding, plus three years after the final payment or redemption date. Termination of Representation Our insurance carriers require that we advise our clients at the end of a transaction that our representation has ended. Accordingly, we are advising you that our representation of the Consolidated Government and the attorney - client relationship with the Consolidated Government concluded upon the issuance of the Bonds. However, do not hesitate to call us if you have any questions regarding the Bonds. Sincerely, Teresa P. Finister cc: Jim Plunkett, Esq. Enclosure REQUISITION NO. I U.S. Bank National Association, Costs of Issuance Fund Depository Atlanta, Georgia Re: $6,675,000 Augusta, Georgia Airport General Refunding Revenue Bonds, Series 2015A (Non -AMT) and $3,$50,000 Augusta, Georgia Airport General Revenue Refunding Bonds, Series 2015B (AMT) To the Addressee: Pursuant to a Master Bond Resolution of the Augusta - Richmond County Commission (the "Consolidated Government ") and the Augusta Aviation Commission (the "Commission "), adopted on September 1, 2015 (the "Master Bond Resolution "), you are hereby directed to disburse from the "Costs of Issuance Fund" the amounts set forth below. Capitalized terms used but not otherwise defined herein shall have the meanings ascribed to them in the Master Bond Resolution. (1) The names and addresses of the persons, firms or corporations to whom the disbursements are due, the amounts to be disbursed thereto and the purposes of the payments are shown on Exhibit A, which is attached hereto. (2) Statements are attached hereto. Dated this 24th day of September, 2015. AUGUSTA, GEORGIA Donna Williams Finance Director AUGUSTA AVIATION COMMISSION Roy A. Williams Executive Director (Requisition No. 1) Dated this 24th day of September, 2015. AUGUSTA, GEORGIA By: Donna Williams Finance Director AUGUSTA AVIATION COMMISSION By: Roy A. WillifKs Executive Director (Requisition No. 1) PAYEE PURPOSE WIRE TRANSFER OR AMOUNT ADDRESS Mauldin & Jenkins Consent Letters and See attached $21,200.00 Agreed Upon Procedures Letter Financial Press LLC Official Statement See attached $1,268.04 printing and distribution Standard & Poor's Ratings Services Ratings See attached $22,000.00 PFM, Inc. Financial Advisory fees See attached $50,000.00 Freeman Mathis & Gary, LLP Borrower's Counsel fees See attached $13,850.00 Murray Barnes Finister LLP Bond Counsel fees See attached $90,379.81 Augusta, Georgia Reimbursement of costs See attached $22,150.00 of issue (legal fees) Dentons LLP Disclosure Counsel fees See attached $90,165.13 U.S. Bank National Association Custodian fee & See attached $4,000.00 Paying Agent fees Digital Assurance Certification, Repository Services See attached $2,500.00 LLC Moody's Investors Service Ratings See attached $36,000.00 Shepard, Plunkett, Hamilton & Special Counsel to the See attached $36,000.00 Bordeaux, LLP Aviation Commission fees Al - me —9 a I ON= 300 Mulberry Street, Suite 300 - P.O. Box 1877 - Macom Geofes 31202 -1877 - Telephone (478) 464 -M • Fax (478) 46"051 Avgvst&~mcnd County Commission Ann: Ails. Donna WWttams 530 Gnm SbvW Room 207 Augusta, GA 30901 IMAM ft. 577808 Date 099i22M5 ttaa■ txH W&wo��.aM PAYMENT IS DUE U " CJieM No. 02008297.000 WM VOLO RECEIP T Of 84vOCE AMOUNT 3 PROFESSIONAL SERVICES RENDERED AS FOLLOWS: As requested by management, and other legal and finance professionals serving the Augusta- Ridxnond County Commission nsis "10 our perliormance of a wide variety of procedures relative to the PreNminary Official Statement (POS) dated August 25, 2015 and the Ofscial Statement (OS) dated Seplernber 1, 2015, relating to to issuance of the $6,675,000 Airport General Revenue Refunding Bonds, Swiss 2015A (Nm AMT) and the $3,850,000 Airport Gerwal Revenue Re/tatdi V Bonds, Series 2015E (AMT) collectively known as dte $10 ,525,000 Augusta, Georgia Airport General Revenue Rdcnding Bonds, Series 2015 (the - Swim 2015 Bonds - ). The requested procedures uidrrtately resulted in our providing the respective consent letters and agreed -upon procedure reports. $ 21,200.00 Prior Balance 0.00 Total Amount Due $ 29.200.00 0 31.60 61 -90 91.120 Over 120 Balance 00 0.00 0.00 0.00 Q00 21 .00 WE APPRECIATE YOUR BUSINESSI MAUUXN a JIM MS - 300 Matbetr7 Shen. Suke 300 • P.O. Beat 1871 - b4amm Gemoa 81202- 1877 + Telephone (478) 464.8000 • Fax (478) 4644 061 Lr& P/12SS�� INVOKE F. E.I.N. 45- 2727602 1011 E. Main St., Ste. 201 Richmond, VA 23219 SOLD TO Augusta Regional Airport Risa Bingham 1501 Aviation Wav Augusta, GA 30906 INVOICE DATE REP INV NO DUE DATE 9/10/2015 GML 1575 10/10/2015 $10,525,000 AUGUSTA, GEORGIA Airport General Revenue Refunding Bonds, Series 2015 THANK YOU FOR YOUR BUSINESS! SUBTOTAL Prepress, Print, Bind and Distribute SALES TAX 918/2015 48 copies of a 184 page Official Statement consisting of a 4 -page cover printed one color on 65# coated 676.32 TOTAL DUE cover stock with text printed one color throughout on 20# white bond, perfect bound and finished to a final size of 8 -1/2 x 11: carton and prepare for delivery. Convert Preliminary and Final Official Statements to PDF format, assemble, bookmark and distribute to 500.00 email list. THANK YOU FOR YOUR BUSINESS! SUBTOTAL $1,176.32 SALES TAX $0.00 FREIGHT $91.72 TOTAL DUE $1,268.04 PAYMENT BY CHECK: Please record the invoice number on your check. ACH/EFTS: Account # 7556708530 Routing # 051400549 Wells Fargo Bank, N.A. 1021 E. Cary Street Richmond, VA 23219 Name on account: Financial Press LLC OVERNIGHT OR MAIL: Financial Press LLC 1011 F. Main Street, Suite 201 Richmond, N'A 23219 Please send remittance information with payment WIRE TRANSFER INFO: Wells Fargo Bank, N.A. 1021 E. Cary Street Richmond, VA 23219 Account # 7556708530 Routing # 121000248 Please send remittance information by e-mail to os!@finuresslic.com PLEASE NOTE NEW MAILING ADDRESS FOR SENDING CHECKS BY MAIL OR OVERNIGHT Fort W -9 I Request for Taxpayer (Rev. December 2014) Identification Number and Certification Department of the Taney Internal f�arxue Servtoe N O CCC U 4 Exemptions (codes apply only to certain entities, not individuals: see Instructions on page 3): Exempt payee code (if any) Exemption from FATCA reporting code (if any) yrppws ro — orNS nrnyr,ro ar,btlr iN U S) name and address Enter your TIN in the appropriate box. The TIN provided must match the name given on line 1 to avoid I Social security number backup withholding. For individuals, this is generally your social security number (SSN). However, for a (_ resident alien, sole proprietor, or disregarded entity, see the Pan I instructions on page 3. For other FT7 _ _ L entities, it is your employer identification number (EIN). If you do not have a number, see How to get a TIN on page 3. or Note. If the account is in more than one name, see the instructions for line 1 and the chart on page 4 for I Employe' identification number guidelines on whose number to enter. (77 r 415 1 - 12 17 12 17 18 10 12 Under penalties of perjury, I certify that: 1. The number shown on this form is my correct taxpayer identification number (or I am waiting for a number to be issued to me); and 2. 1 am not subject to backup withholding because: (a) I am exempt from backup withholding, or (b) I have not been notified by the internal Revenue Service (IRS) that I am subject to backup withholding as a result of a failure to report all interest or dividends, or (c) the IRS has notified me that I am no longer subject to backup withholding; and 3. 1 am a U.S. citizen or other U.S. person (defined below); and 4. The FATCA code(s) entered on this form (f any) Indicating that I am exempt from FATCA repotting is correct. Certification Instructions. You must cross out item 2 above If you have been notified by the IRS that you are currently subject to backup withholding because you have failed to report all interest and dividends on your tax return. For real estate transactions, item 2 does not apply. For mortgage interest paid, acquisition or abandonment of secured property, cancellation of debt, contributions to an individual retirement arrangement (IRA), and generally, payments other than interest and dividends, you are not required to sign the certification, but you must provide your correct TIN. See the instructions on page 3. A _ He I Signature . person ► .-�Vff C - K Jl ,�- General Instructions Section references are to the Internet Revenue Code unless otherwise noted. Future developtnerKa. Information about developments affecting For, W - 9 (such as legislation enacted after we release it) is at www.its.gov/tw9. Purpose of Form An individual or entity (Form W -9 requester) who is required to file an information return with the IRS must obtain your correct taxpayer identification number (rIN) which may be your social security number (SSN), Individual taxpayer Identification number OTIN), adoption taxpayer identification number (TIN), or employer identification number (EIN), to report on an information return the amount paid to you, or other amount reportable on an information return. Examples of information returns include, but are rat limited to, the following: • Form 1099-INT pnterest earned or pair!) • Form 1099 -DIV (dividends, including those from stocks or mutual funds) • Forth 1099 -MISC (various types of income, prizes, awards, or gross proceeds) • Form 1099.8 (stock or mutual fund sales and certain other transactions by brokers) • Form 1099 -S (proceeds from real estate transactions) • Form 1099 -K (merchant card and third party network transactions) vame (as shown on your income tax return). Name is req FINANCIAL PRESS LLC 3usiness nameldrsregarded entity name, if different from Give Form to the requester. Do not send to the IRS. on tnts une; 00 not leave this tine 9 Check appropriate box for federal tax classification; check only one of the following seven boxes: ❑ IndividuaVsois proprietor or ❑ C Corporation ❑ S Corporation ❑ Partnership ❑ Trustlestate single - member LLC ® Limited liability oompany. Enter the tax classification (C -C corporation, S=S corporation, P =partnership) ► S Z Note. For a single mamt»r LLC that is disregarded, do not check LLC; check the appropriate box in the line above for tax Classification Oi the single - member owner. LI Ot h e r ( see ins ► S Address (number, street, and apt. or su 1011 E MAIN ST, STE 201 RICHMOND VA 23219 list account numberts) here tootion, onto P- January 15, 2015 • Forth 1098 (home mortgage Interest), 1098 -E (student loan interest), 1098 -T pu tion) • Form 1099 -C (canceled debt) • Form 1099 -A (acquisition or abandonment of secured property) Use Form W -9 only if you are a U.S. person (including a resident alien), to provide your correct TIN. If you do not return Form W-9 to the requester with a TIN, you might be subject to backup withholding. See Whet is backup withholding? on page 2. By sighing the filed -out form, you: 1. Certify that the TIN you are giving is correct (or you are waiting for a number to be issued), 2. Certify that you are not subject to backup withholding, or 3. Claim exemption from backup withholding if you are a U.S. exempt payee. If applicable, you are also certifying that as a U.S. person. your allocable share of any partnership Income from a U.S. trade or business is not subject to the withholding tax on foreign partners' share of effectively connected income, and 4. Certify that FATCA code(s) entered on this form (if any) indicating that you are exempt from the FATCA reporting, i correct. See What is FATCA reporting? on page 2 for further information. Cat. No. 10231x Form W -9 (Rev. 12 -2014) 0201 McGRAW HILL FINANCIAL MR. RISA BINGHAM AUGUSTA REGIONAL AIRPORT 1501 AVIATION WAY AUGUSTA GA 30906 Standard & Poor's Financial Services, LLC Invoice No.: 10376581 Federal I.D.: 26- 3740348 Customer No.: 1000098119 Invoice Date: 08/26/15 Page No.: 1 Print Data: 08/26/15 SEP 1 0 2015 BY: - - - -- -- 101311 ANALYTICAL SERVICES RENDERED IN CONNECTION WITH: US$7,320,000 Augusta, Georgia, Airport General Revenue Refunding Bonds, (Augusta Regional Airport), (Non -amt), Series 2015A, dated: Date of delivery, due: January 01, 2035 US$3,935.000 Augusta, Georgia, Airport General Revenue Refunding Bonds. (Augusta Regional Airport), (Amount), Series 20158, dated: Date of delivery, FOR INQUIRIES PLEASE CONTACT: SREEKANTH MADDALA SREEKANTH .MADDALA , aSTANDARDANDPOORS,COM PRONE: 1. 800 -767 -1896 EXT #6 FAX: 1-212.48.5178 For inquiries contact the client services representative listed on this invoice. Do not roturn it or direct any inquiries about the invoice to credit ratings analysts. S &P maintains a separation of commercial and analytical activities. Please note that our credit ratings analysts are not permitted to communicate, negotiate, arrange or collect credit rating tees. PLEASE REFERENCE INVOICE OR STATEMENT NUMBER ON ALL CHECKS AND WIRE TRANSFERS $22,000.00 This Invoice Due and Payable As Of: 08/26115 INVOICE TOTAL $22, 000.00 USD !Male Checks Payabk To. STANDARDBPOOR'S \I/ RATINGS SERVICES wco"w alu rillru+caa [J*41l] Billed To: _,_ n. ,'_RE l - FET; Pf: 7 CCP7i =r, �- ., . MR. RISA BINGHAM AUGUSTA REGIONAL AIRPORT 1501 AVIATION WAY AUGUSTA GA 30906 Standard & Poor's Financial Services, LLC Federal 1. D.: 26- 3740348 Wire Transfer To: Please include invoice # Bank of America -San Francisco CA Standard & Poor's Account # 12334 -02500 ABA # 0260 - 09,9 -3 Or E -mail: cashapps@mhfi.com 1111 1 . . mor4r.11 M1 inallillilli nil 1 I I: 1 Invoice No.: 10376581 Customer No.: 1000098119 Invoice Date: 08/26115 Remit To: STANDARD AND POOR'S 2542 COLLECTION CENTER DRIVE CHICAGO, IL 60t:93 TOTAL AMOUNT DUE: $22.000.00 USD AMOUNT ENCLOSED: Mr. Roy Williams, Executive Director Augusta Regional Airport 1501 Aviation Way Augusta. GA 30906 -9620 Puhlic Financial ins 21; -6100 IlN o I ouan "yu:ur . SILIW 1600 15-' -4 1 SO 1,41h ti Arch qtr«!, I a'" September 15, 2015 INVOICE: 14514 RE: For Financial Advisory Services provided to Augusta Richmond County, Georgia and Augusta Regional Airport in connection with the Airport General Revenue Refunding Bonds, Series 2015, INVOICE Description Series 2015 Bonds Total Amount Due Remittance Address: Public Financial Management, Inc. PO Box 62920 Baltimore, MD 21264 -2920 Total 550,000.00 $50,000.00 EFT Instructions: M &T Bank ABA (for Wires) : 022000046 ABA (for ACH) : 031302955 Acct#: 9856661229 INVOICE TERMS: UPON RECEIPT 04.00063.006 FREEMAN MATHIS & GARY, LLP 100 GALLERIA PARKWAY SUITE 1600 ATLANTA, GEORGIA 30339 -5948 ITsNOICE Representation of the Augusta Regional Airport Aviation Commission on behalf of the Consolidated Government for a Bond Closing: $ 13,850.00 DOMESTIC WIRING INSTRUCTIONS Receiving Bank Synovus Bank Receiving Bank ABA # 061100606 Further Credit Bank Bank of North Georgia, a Division of Synovus Bank Further Credit ABA 261170290 Beneficiary's Name Freeman Mathis & Gary, LLP 100 Galleria Pkwy, Suite 1600 Atlanta, GA 30339 Beneficiary's Account # 0138438 MURRAY BARNES FINISTER LLP 3525 PIEDMONT ROAD - 5 PIEDMONT CENTER - SUITE 515 - ATIANTA, GEORGIA 30305 September 24, 2015 Tim Schroer, CPA Deputy Finance Director Augusta - Richmond County 530 Greene Street Augusta, GA 30901 RE: $6,675,000 Augusta, Georgia Airport General Revenue Refunding Bonds, Series 2015A (Non -AMT) and $3,850,000 Augusta, Georgia Airport General Revenue Refunding Bonds, Series 2015B (AMT) FOR PROFESSIONAL SERVICES RENDERED by Murray Barnes Finister LLP as Bond Counsel and Disclosure Counsel in connection with the captioned transaction FOR EXPENSES INCURRED OR ADVANCED by Murray Barnes Finister LLP in connection with the captioned transaction Conference Calls Document Delivery Support Staff Overtime Total Expenses TOTAL 'Final expenses will be billed after all disbursements are posted. WIRING INSTRUCTIONS State Bank and Trust Company ABA No.: 061104123 Account Name: Murray Barnes Finister LLP Acct. No.: 1000116408 $290.80 47.76 41.25 $90,000.00 379.81 TELEPHONE: (678)999 -0350 - FacsimILE: (678)999 -0357 - INTERNET: www.niurra } ,barneslaw.com AUGUSTA, GEORGIA Reimbursement for legal fees in the amount of $22,150 paid to Freeman Mathis & Gary, LLP in connection with the issuance of the Series 2015A Bonds and the Series 2015B Bonds. See attached Exhibit A. Wiring, Instructions Bank of America, NA ABA# 0260- 0454 -3 Further Credit: Augusta Richmond County Concentration Account Account Number: 003282507617 Cyr+• 6. +' A Page: 9 Augusta - Richmond County September 01, 2015 Client Matter 5826 -00038 5 Invoice number 172462 Augusta - Richmond County -2009' Bond Refinancing PROFESSIONAL SUMMARY Professional Title Hours Rate Amount Pamela F. Everett Of Counsel 54.40 $250.00 $13,600.00 Total amount of this statement 13,600.00 Previous Balance $8,100.00 08/24/2015 Payment from Augusta- Richmond County - Thank You - 8,100.00 9 Balance Due Billing History Fees Expenses Finance Charqe Pa nts 35,750.00 0.00 0.00 22,150.00 Payment due within 10 days of receipt, payable to Freeman Mathis & Gary, LLP 100 Galleria Parkway, Suite 1600 Atlanta, GA 30339 -5948 Federal ID# 58- 2288491 A finance charge of 1.5% may apply if payment is not received timely $13,600.00 Demons US LLP 303 Peachtree Stroet Suite 5300 Atlanta, Georgia 30308 T 404.527.8000 City of Augusta 535 Telfair Street Suite 800 Augusta, Georgia 30901 Attention: Timothy Schroer Assistance Finance Director Salons FMC SNR Denton McKenna Long dentons. com INVOICE OF LEGAL SERVICES RENDERED Client/Matter No: 012400.00023 Date: September 24, 2015 THROUGH SEPTEMBER 24, 2015, fees for services rendered and expenses incurred as Disclosure Counsel in connection with the $6,675,000 Augusta, Georgia Airport General Revenue Refunding Bonds, Series 2015A (Non -AMT) and the $3,850,000 Augusta, Georgia Airport General Revenue Refunding Bonds, Series 2015E (AMT). Fees............................................................. ............................... $90,000.00 Expenses: CopyCharges ..................................... ............................... 163.20 Long Distance Telephone .................. ............................... 1.93 TOTAL AMOUNT DUE .......................... ............................... $ 90,16 Wiring Instructions: Bank Name: SunTtust Bank Bank Address: 25 Park Place, 2e Floor, Atlanta, GA 30303 ABA Number: 061000104 Account Name: Denton US LLP Account Number: 8800918057 Notify: Lisa Green (404) 527 -4193 Reference to: 012400.00023 ATLANTA 5668982 1 bank. U.S. Bank Customer Confidential Schedule of Fees for Services as Paying Agent, Registrar and Custodian For Augusta, Georgia Airport General Revenue Refunding Bond Series 2015A (NON -AMT) And Augusta, Georgia Airport General Revenue Refunding Bond Series 2015B (AMT) CTSO4110 Paying Agent 1 Registrar / Transfer Agent Annual fee for the standard transfer $500.00 agent, registrar, and paying agent services associated with the administration of the (Series 2015A) account. Administration fees are payable in advance. CTSO4110 Paying Agent f Registrar / Transfer Agent Annual fee for the standard transfer $500.00 agent, registrar, and paying agent services associated with the administration of the (Series 2015B account. Administration fees are payable in advance. CTSO4050 Custodian Annual fee for the standard custodian services associated with the $3,000.00 administration of the accounts. Administration fees are payable in advance. Direct Out of Pocket Expenses Reimbursement of expenses associated with the At Cost performance of our duties, including but not limited to publications, legal counsel after the initial close, travel expenses and filing fees. Extraordinary Services Extraordinary Services are duties or responsibilities of an unusual nature, including termination, but not provided for in the governing documents or otherwise set forth in this schedule. A reasonable charge will be assessed based on the nature of the services and the responsibility involved. At our option, these charges will be billed at a flat fee or at our hourly rate then in effect. Account approval is subject to review and qualification. Fees are subject to change at our discretion and upon written notice. Fees paid in advance will not be prorated. The fees set forth above and any subsequent modifications thereof are part of your agreement. Finalization of the transaction constitutes agreement to the above fee schedule, including agreement to any subsequent changes upon proper written notice. In the event your transaction is not finalized, any related out -of- pocket expenses will be billed to you directly. Absent your written instructions to sweep or otherwise invest, all sums in your account will remain uninvested and no accrued interest or other compensation will be credited to the account. Payment of fees constitutes acceptance of the terms and conditions set forth. IMPORTANT INFORMATION ABOUT PROCEDURES FOR OPENING A NEW ACCOUNT: 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. Digital Assurance Certification LLC 390 N. Orange Ave., Suite 1750 Orlando, FL 32801 Phone (407) 515 -1100 Invo DATE INVOICE NUMBER 8124/2015 28035 BILL TO: J REFERENCE: City and County of Augusta, GA Augusta, Georgia 'Ms. Donna Williams Airport Enterprise Refunding Bonds i Finance Director Series 2015 530 Greene Street, Room 105 Augusta, GA 30911 Description Initial Set -up Fee - New Issue - Existing Client Professional Services Rendered to City and County of Augusta, Georgia for centralized document repositon for client filings, cover sheet creation, even dissemination to EMMA and investors, links to and from client web -site (if requested), email reminders keyed to continuing disclosure agreement, creation of templates for operating data, staffed help desk and access to Continuing Professional Education (CPE) credits. Wire funds to: Bank of America ABA #026009593 For credit to: I Digital Assurance Certification (DAC) (Account #229049807799 Invoice 028035 Thank you for your business. Our Federal EIN:59- 3536820 Total Amount 2,500.00 I $2,500.00 I DUE UPON RECEIPT MOO DY'S INVESTORS SERVICE MR. ROY WILLIAMS AUGUSTA REGIONAL AIRPORT 1501 AVIATION WAY AUGUSTA GA 30905 Moody's Investors Service, Inc. 7l'v'TC AT 250 GREENWICH STREET NEW YORK NY 10007 USA Invoice Recipient Invoice No.: Customer No. Invoice Date: P0177209 9000003213 September 22, 2015 Augusta Regional Airport 1501 AVIATION WAY AUGUSTA GA 30906 For Professional Services: - Total Net Value: USD 313 000 0:? State and Local Taxes: USD 0.00 j Invoice Amount: USD 36,000.00 Inquiries Contact Carol P cou Phone 212- 553 -79 Fax 212- 298 -7228 Email carol -picou a,moccys com Moody's Investors Service, Inc. Taxpayer ID# 13- 1959883 Please do not contact your Analytic Team regarding this or any other fee - related matter. ---------------------------------------------------------- -- -------- -- -- -- ------ - - - - -- Return This Portion V%lith Your Payment Invoice No.: P0i77209 Moodys Ref No.: P017 Customer No.: 9000003213 Invoice Date: September 22 2015 Invoice Amount: USD 36 000 OC Invoke Payable USD Wire Payment with Invoice Number to Mail Payment with Invoice Stub To SunTrust Bank Mcocys investors Ser,ce Inc Transit Routing# 061CC0 PC BOX 1C2597 ACH # 0610r.'0 ATLANTA GEORGIA 30368 -0597 Moody's Accour; # 88,31939847 USA For Customers wiring outside the US. Swih Code SNTRUS3A PAYMENT DUE UPON RECEIPT Moody's Investors Service, Inc. 7WTC AT 250 GREENWICH STREET NEW YORK, NY 10007 USA Invoice No.: P0177209 Invoice Date: September 22, 2015 Invoice Supporting Detail For Professional Services: Infrastructure, initial Fee: USD 36,000 USD 6,675,000 AUGUSTA (CITY OF) GA AIRPORT ENTERPRISE - Augusta (City of) GA USD 36,000 Airport Enterprise, AUGUSTA (CITY OF) GA AIRPORT ENTERPRISE - Augusta (City of) GA Airport Enterprise, Airport General Revenue Refunding Bonds, Series 2015A USD 3,850,000 AUGUSTA (CITY OF) GA AIRPORT ENTERPRISE - Augusta (City of) GA USD 0 Airport Enterprise, AUGUSTA (CITY OF) GA AIRPORT ENTERPRISE- Augusta (City of) GA Airport Enterprise, Airport General Revenue Refunding Bonds, Series 2015E Infrastructure, Aggregation Fee: USD 1,000 USD 6,675,000 AUGUSTA (CITY OF) GA AIRPORT ENTERPRISE - Augusta (City of) GA USD 1,000 Airport Enterprise, AUGUSTA (CITY OF) GA AIRPORT ENTERPRISE - Augusta (City of) GA Airport Enterprise, Airport General Revenue Refunding Bonds, Series 2015A USD 3,850,000 AUGUSTA (CITY OF) GA AIRPORT ENTERPRISE - Augusta (City of) GA USD 0 Airport Enterprise, AUGUSTA (CITY OF) GA AIRPORT ENTERPRISE- Augusta (City of) GA Airport Enterprise, Airport General Revenue Refunding Bonds, Series 2015E Total: USO 36,000 Page 2 of 2 LAW OFFICES SHEPARD PLUNKETT, HAMILTON & BOUDREAUX, LLP A PARTNERSHIP INCLUDING PROFESSIONAL CORPORATIONS STEPHEN E. SHEPARD, P.C. JAMES T. PL UNKETT, P.C. DANIEL W. HAMILTON, P.C. TODD BOUDREAUX. P.C. JOHN P. MANTON III, P.C. (GA (¢ SC) JENNA BLACKWELL MATSON AUGUSTA OFF /CF 429 WALKER STREET UPPER LEVEL. AIiGUSTA,GA 30401 (706) 722.4111 (706) 722 -6200 (706) 722 -4817 FAX EVANS OFFlCL: 7013 EVANS TOWN ('ENTER BLVD SUITE 303 EVANS, GA 30809 (706) 869 -1334 (706) 868.6788 FAX PAUL K. FLU NKETT (1922 - 1998) REPLY TO: Augusta September 24, 2015 Augusta, Georgia Augusta - Richmond County Commission Attn: Andrew G. MacKenzie City-County Building Augusta, Georgia 30901 STATEMENT FOR PROFESSIONAL SERVICES RENDERED Re: $6,675,000 Augusta, Georgia Airport General Revenue Refunding Bonds, Series 2015A (Non -AMT) $3,850,000 Augusta, Georgia Airport General Revenue Refunding Bonds, Series 2015B (AMT) For legal services as Special Counsel in the above referenced matter: $36000.00 Please wire fees to: "Plunkett & Plunkett Trust Account" CLOSING MEMORANDUM AND INDEX OF CLOSING TRANSCRIPT $6,675,000 Augusta, Georgia Airport General Refunding Revenue Bonds Series 2015A (Non -AMT) (the "Series 2015A Bonds ") $3,850,000 Augusta, Georgia Airport General Revenue Refunding Bonds Series 2015B (AMT) (the "Series 2015E Bonds ") The following documents were delivered to Augusta, Georgia (the "Consolidated Government "); the Augusta Aviation Commission (the "Aviation Commission "); Raymond James & Associates, Inc., purchaser (the "Underwriter ") of the Bonds (as defined herein); Shepard, Plunkett, Hamilton & Boudreaux, LLP, counsel to the Consolidated Government; Butler Snow LLP, Underwriter's Counsel; Murray Barnes Finister LLP, Bond Counsel; Freeman Mathis & Gary, LLP, counsel to the Aviation Commission; Dentons US LLP, disclosure counsel to the Consolidated Government; Public Financial Management, Inc., financial advisor to Augusta Regional Airport at Bush Field (the "Airport") (the "Financial Advisor "); Mauldin & Jenkins, LLP, the Consolidated Government's auditors ( "M &J" ); U.S. Bank National Association, paying agent ( "Paying Agent ") for the Series 2015 Bonds and depository of the Debt Service Fund, the Debt Service Reserve Fund, the Operation and Maintenance Reserve Fund and the Rebate Fund; Regions Bank, depository of the Revenue Fund, the PFC Revenue Fund, the Operation and Maintenance Fund, the Capital Improvement Fund, the PFC Capital Fund and the Subordinate Securities Fund; concurrently with the authorization, issuance and sale of the Series 2015A Bonds and the Series 2015B Bonds (the "Bonds ") at the closing held in the offices of Murray Barnes Finister LLP at 10:00 a.m. on September 24, 2015. All transactions at the closing were interdependent and shall be considered to have been effected concurrently. No delivery was considered to be completed until all deliveries were made and Bond Counsel authorized the release of its opinions. OFFERING DOCUMENTS RELATING TO THE BONDS: Preliminary Official Statement with respect to the Bonds, dated August 25, 2015. 2. Official Statement with respect to the Bonds, dated September 1, 2015. 3. Continuing Disclosure Certificate of the Consolidated Government. 4. Rating Letter from Standard & Poor's Ratings Services, a Division of The McGraw -Hill Companies, Inc. confirming the rating of BBB on the Bonds. 5. Rating Letter from Moody's Investors Service, Inc. confirming the rating of Baa2 on the Bonds. 6. Rule 15c2 -12 Certificate of the Consolidated Government. BASIC DOCUMENTS: 7. Bond Validation Transcript. 8. Certified copy of the Master Bond Resolution adopted by the Consolidated Government and by the Aviation Commission on September 1, 2015. 9. Specimen Bonds. 10. Blanket Issuer Letter of Representations. CLOSING DOCUMENTS FURNISHED BY THE CONSOLIDATED GOVERNMENT, AVIATION COMMISSION AND AIRPORT: 11. Execution, Signature and No- Litigation Certificate of the Consolidated Government. 12. Execution, Signature and No- Litigation Certificate of the Aviation Commission. 13. Receipt of Payment. 14. Authentication Order from the Consolidated Government to the Bond Registrar. 15. Incumbency Certificate of the Consolidated Government. 16. Incumbency Certificate of the Aviation Commission. 17. Tax Agreement and Non - Arbitrage Certificate. 18. Copy of I.R.S. Form 8038 -G and proof of mailing and receipt, with respect to the Series 2015A Bonds. 19. Copy of I.R.S. Form 8038 and proof of mailing and receipt, with respect to the Series 2015B Bonds. IN 20. Debt Issuance Report for the following: (a) Series 2015A Bonds, and (b) Series 2015B Bonds. CLOSING DOCUMENTS FURNISHED BY THE BOND REGISTRAR, PAYING AGENT AND FUND CUSTODIANS: 21. Paying Agent and Bond Registrar Agreement, dated as of September 1, 2015, between the Consolidated Government and U.S. Bank National Association. 22. Officer's Certificate of the Paying Agent, Bond Registrar and Depository of the Airport Debt Service Fund, the Airport Debt Service Reserve Fund, the 2015 Defeasance Account and the Costs of Issuance Fund. 23. Custodian Agreement, dated as of September 1, 2015, among the Consolidated Government, the Aviation Commission and U.S. Bank National Association. 24. Certificate of Depository of Airport Revenue Fund, Airport PFC Revenue Fund, Airport Operation and Maintenance Fund, Airport Capital Improvement Fund and Airport PFC Capital Fund. CLOSING DOCUMENTS FURNISHED BY THE UNDERWRITER: 25, Bond Purchase Agreement, dated September 1, 2015, between the Consolidated Government and the Underwriter. 26. Receipt for the Bonds. OPINIONS OF COUNSEL: 27. Opinion of Counsel to Consolidated Government. 28. Opinion of Counsel to the Aviation Commission. 29. Opinion of Disclosure Counsel. 30. Opinions of Bond Counsel: (a) Series 2015A Bond Counsel Opinion, (b) Series 2015B Bond Counsel Opinion, and (c) Supplemental Opinion of Bond Counsel. MISCELLANEOUS: 31. Evidence of the Public Hearing held on February 22, 2005 with respect to the Series 2005 Bonds, including publisher's affidavit with respect to notice of the Public Hearing. C 32. Materials from M &J: (a) Agreed Upon Procedures Letter dated September 1, 2015, (b) Consent Letters of M &J dated August 25, 2015 and September 1, 2015, as to the inclusion of their report in the Preliminary Official Statement and in the Official Statement, respectively. 33. Direction of Consolidated Government and the Aviation Commission to Redeem Series 2005 Bonds, dated September 1, 2015. 34. Direction to U.S. Bank National Association by the Consolidated Government and the Aviation Commission as to the application of funds on deposit under the prior master bond resolution. 35. First Amendment to Airline Operating Agreement and Terminal Building Lease dated September 24, 2015, between the Consolidated Government and Delta Air Lines, Inc. 36. First Amendment to Airline Operating Agreement and Terminal Building Lease dated September 24, 2015, between the Consolidated Government and American Airlines, Inc., as successor to U.S. Airways, Inc. 37. Post - Closing Letter. 38. Requisition No. 1. 4