Ontario International Airport Authority Revenue Bonds,Series2016(Taxable)

This Preliminary Official Statement and the information herein are subject to completion or amendment. Under no circumstances shall this Preliminary Official Statement constitute an offer to sell or a solicitation to buy, nor shall there be any sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under applicable securities laws of any such jurisdiction. MATTERS” hereinregardingcertainothertaxconsiderations. the 2016BondsisexemptfrompersonalincometaxesofStateCalifornia(the“State”)underpresentlaw.See“TAX is notexcludedfrom gross incomeforfederaltaxpurposes.SpecialTaxCounselisfurtheroftheopinionthatintereston Bonds willbemadetoDTConor aboutNovember1,2016inNewYork,York. O’Melveny &MyersLLP,LosAngeles, California,servedasDisclosureCounseltotheAuthority. Itisexpectedthatthedeliveryof2016 Mullin, Richter&HamptonLLP andfortheUnderwriterbyitscounsel,StradlingYoccaCarlson &Rauth,aProfessionalCorporation. has servedasFinancialAdvisor totheAuthority.CertainmatterswillbepasseduponforAuthority byitsspecialcounsel,Sheppard, Los Angeles,California,(“Bond Counsel”)andNixonPeabodyLLP,SpecialTaxCounseltothe Authority.CSGAdvisorsIncorporated by reference,toobtaininformationessentialthemakingofan informed investmentdecision. the 2016Bonds.InvestorsareadvisedtoreadentireOf TAXING POWER.SEE“SECURITYANDSOURCESOFPAYMENT FORTHE2016BONDS”HEREIN. THE PAYMENT OF THE PRINCIPAL OF, PREMIUM, IF ANY,OR INTEREST ON THE 2016 BONDS. THE AUTHORITY HAS NO OF CALIFORNIA(THE“STATE”)ORANYPOLITICALSUBDIVISION ORAGENCYOFTHESTATEWILLBEPLEDGEDTO TAXING POWEROFTHECITYONTARIO,CALIFORNIA, THECOUNTYOFSANBERNARDINO,CALIFORNIA,STATE FOR THEBENEFITOFOWNERS2016BONDS, ANDNEITHERTHEFULLFAITHCREDITNOR UNDER THEINDENTURE.NONEOFPROPERTIES OF ONTWILLBESUBJECTTOANYMORTGAGEOROTHERLIEN OF ONTANDCERTAINLIMITEDFUNDSACCOUNTS HELDBYORTOBETHEAUTHORITYTRUSTEE SECURED BYAPLEDGEOFCERTAINNETPLEDGEDREVENUES DERIVEDBYTHEAUTHORITYFROMOPERATIONS bene the registeredownerof2016Bonds,paymentsprincipal,premium,ifany,andinterestonBondsareexpectedtobe madeto delivered underabook-entryformonlyandnophysicaldeliveryofthe2016Bondswillbemadetopurchasers.SolongasCede &Co.is Company (“DTC”)andwillbeavailabletoultimatepurchasersinintegralmultiplesof$5,000.The2016Bondsinitially issued and executed anddeliveredonlyasfullyregisteredbondswithoutcouponsinthenameofCede&Co.,nomineeTheDepository Trust INTERNATIONAL AIRPORT.” ONT fromtheDepartment(asdefinedherein)toAuthority.See“TRANSFEROFOPERATIONSANDMANAGEMENT ONTARIO 2016 BONDS—AdditionalBonds”herein. Future seriesofparitybondsmaybeissuedbytheAuthorityasdescribedherein.See“SECURITYANDSOURCESOFPAYMENT FORTHE Revenues (asdefinedherein),whichincludecertainincomeandrevenuereceivedbytheAuthorityfromOntarioInternationalAirport (“ONT”). bond insurancepolicyforalloraportionofthe2016Bonds,and(iv)topaycertaincostsissuancerelatedBonds. Bonds”) andSeries2006B(Taxable)(the“2006BBonds”),(ii)topurchaseareservefundsuretypolicyforthe2016Bonds,(iii) purchase a Los Angeles,CaliforniaoutstandingOntarioInternationalAirportRefundingRevenueBonds,Series2006A(Tax-Exempt)(AMT)(the“2006A herein. Theissuanceofthe2016BondsisinitialbondbyAuthority. Authority and The BankofNewYork Mellon TrustCompany,N.A.,astrustee(the“Indenture”). See “DESCRIPTIONOFTHE2016BONDS” Powers Act”), and pursuant to a Master TrustIndenturetobe dated as of November1, 2016, as amended andsupplemented,between the (Taxable) (the“2016Bonds”)pursuanttotheJointExerciseofPowersAct,CaliforniaGovernmentCodeSection6500,etseq.“Joint *Preliminary; subjecttochange Dated: October__, 2016 Dated: DateofDelivery NEW ISSUE—BOOK-ENTRYONLY THE BONDINSURER.” issued concurrentlywiththedeliveryof2016BondsbyAssuredGuarantyMunicipalCorp.See“THEBONDINSURANCEPOLICY AND fi In theopinionofNixonPeabodyLLP,asSpecialTaxCounsel(“SpecialCounsel”),intereston2016Bond(definedbelow) The 2016Bondswillbeoffered,when, asandifissuedbytheAuthority,subjecttoapprovalof legalitybyO’Melveny&MyersLLP, This coverpagecontainscertaininformationforgeneralreference only.Itisnotintendedtobeasummaryofthesecurityorterms THE 2016BONDSWILLBESPECIALLIMITEDOBLIGATIONS OFTHEAUTHORITY,PAYABLESOLELYFROMAND Interest onthe2016BondswillbepayableeachMay15andNovember15,commencing2017.The be The 2016Bondswillbeissuedinconnectionwithandasaconditionofthetransferownership,operationsmanagement of The 2016BondswillbelimitedobligationsoftheAuthority,payablesolelyfromandsecuredbyapledgefirstlienonNetPledged The proceedsofthe2016Bonds,alongwithotheravailablefunds,willbeused(i)torefundDepartmentAirportsCity The OntarioInternationalAirportAuthority(the“Authority”)willissueitsRevenueBonds,Series2016 The scheduledpaymentofprincipalandinterestonthe2016Bondswhenduewillbeguaranteedunderaninsurancepolicy tobe The 2016Bondswillbesubjecttoredemptionpriormaturityasdescribedherein.SEE“THEBONDS—Redemption” cial ownersbyDTCthroughitsparticipants.See“APPENDIXE—BOOK-ENTRYONLYSYSTEM.”

PRELIMINARY OFFICIAL STATEMENT DATED OCTOBER 11, 2016 ONTARIO INTERNATIONAL AIRPORT AUTHORITY REVENUE BONDS,SERIES2016(TAXABLE)

ONTARIO INTERNATIONALAIRPORT Morgan Stanley fi $52,475,000* cial Statement,includingallappendicesheretoandanyportionhereof included Insured Rating: S&P: AA Due: May15,asshownontheinsidecover

See “RATINGS”herein. Underlying Ratings: Fitch: A- S&P: A-

MATURITY DATES, PRINCIPAL AMOUNTS, INTEREST RATES, YIELDS AND CUSIPS

$52,475,000* ONTARIO INTERNATIONAL AIRPORT AUTHORITY ONTARIO INTERNATIONAL AIRPORT REVENUE BONDS, SERIES 2016 (TAXABLE) BASE CUSIP NO.† _____

Due Principal Interest CUSIP May 15* Amount* Rate Yield No. †

2017 $ 3,940,000 % % 2018 4,850,000 2019 4,950,000 2020 5,050,000 2021 5,185,000 2022 5,335,000 2023 5,495,000 2024 5,695,000 2025 5,875,000 2026 6,100,000

______* Preliminary; subject to change. † CUSIP is a registered trademark of American Bankers Association. CUSIP numbers herein are provided by Standard & Poor’s CUSIP Service Bureau, a Division of the McGraw-Hill Companies, Inc., and are set forth herein for the convenience of reference only. None of the Authority, Bond Counsel, Disclosure Counsel, the Underwriter or the Financial Advisor assume responsibility for the accuracy of such numbers.

No dealer, broker, salesperson or other person has been authorized by the Authority to give any information or to make any representation, other than those contained herein, and if given or made, such other information or representation must not be relied upon as having been authorized by the foregoing. 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 2016 Bonds in any jurisdiction in which it is unlawful to make such offer, solicitation or sale.

Certain statements included or incorporated by reference in this Official Statement constitute “forward- looking statements.” Such statements are generally identifiable by the terminology used such as “plan,” “project,” “expect,” “estimate,” “budget” or other similar words. Such forward-looking statements speak only as of the date of this Official Statement.

THE ACHIEVEMENT OF CERTAIN RESULTS OR OTHER EXPECTATIONS CONTAINED IN SUCH FORWARD-LOOKING STATEMENTS INVOLVES KNOWN AND UNKNOWN RISKS, UNCERTAINTIES AND OTHER FACTORS THAT MAY CAUSE ACTUAL RESULTS, PERFORMANCE OR ACHIEVEMENTS DESCRIBED TO BE MATERIALLY DIFFERENT FROM ANY FUTURE RESULTS, PERFORMANCE OR ACHIEVEMENTS EXPRESSED OR IMPLIED BY SUCH FORWARD-LOOKING STATEMENTS. THE AUTHORITY DOES NOT PLAN TO ISSUE ANY UPDATES OR REVISIONS TO THOSE FORWARD-LOOKING STATEMENTS IF OR WHEN ITS EXPECTATIONS CHANGE, OR EVENTS, CONDITIONS OR CIRCUMSTANCES ON WHICH SUCH STATEMENTS ARE BASED OCCUR.

The information set forth herein has been furnished by the Authority and other sources that are believed to be reliable, but is not guaranteed as to accuracy or completeness. The information and expressions of opinions herein are subject to change without notice and neither the delivery of this Official Statement nor any sale made hereunder shall, under any circumstances, create any implication that there has been no change in the affairs of the Authority since the date hereof.

IN CONNECTION WITH THE OFFERING, THE UNDERWRITER MAY OVERALLOT OR EFFECT TRANSACTIONS THAT STABILIZE OR MAINTAIN THE MARKET PRICE OF THE 2016 BONDS AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME. THE UNDERWRITER MAY OFFER AND SELL THE 2016 BONDS TO CERTAIN DEALERS, INSTITUTIONAL INVESTORS AND OTHERS AT PRICES LOWER THAN THE PUBLIC OFFERING PRICES STATED ON THE INSIDE COVER PAGE HEREOF AND SUCH PUBLIC OFFERING PRICES MAY BE CHANGED FROM TIME TO TIME BY THE UNDERWRITER.

The order and placement of material in this Official Statement, including its appendices, are not to be deemed a determination of relevant, materiality, or importance, and all material in this Official Statement, including the appendices, must be considered in its entirety.

The contents of this Official Statement are not to be construed as legal, business or tax advice. Prospective investors should consult their own attorneys and business and tax advisors as to legal, business, and tax advice. in making an investment decision, prospective investors must rely on their own examination of the terms of the offering of the Series 2016 Bonds, including the merits and risks involved. This Official Statement is not to be construed as a contract or agreement between the Authority and the purchaser or holders of any Series 2016 Bonds.

THE 2016 BONDS HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND THE INDENTURE HAS NOT BEEN QUALIFIED UNDER THE TRUST INDENTURE ACT OF 1939, AS AMENDED, IN RELIANCE UPON EXEMPTIONS CONTAINED IN SUCH ACTS. THE REGISTRATION OR QUALIFICATION OF THE SERIES 2016 BONDS IN ACCORDANCE WITH APPLICABLE PROVISIONS OF SECURITIES LAWS OF THE STATES IN WHICH THE 2016 BONDS HAVE BEEN REGISTERED OR QUALIFIED AND THE EXEMPTION FROM REGISTRATION OR QUALIFICATION IN OTHER STATES CANNOT BE REGARDED AS A RECOMMENDATION THEREOF.

THE 2016 BONDS HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOT HAS THE SECURITIES

AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS OFFICIAL STATEMENT.

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, their responsibilities to investors under the federal securities laws as applied to the facts and circumstances of this transaction, but the Underwriter does not guarantee the accuracy or completeness of such information.

Assured Guaranty Municipal Corp. (“AGM”) makes no representation regarding the 2016 Bonds or the advisability of investing in the 2016 Bonds. In addition, AGM has not independently verified, makes no representation regarding, and does not accept any responsibility for the accuracy or completeness of this Official Statement or any information or disclosure contained herein, or omitted herefrom, other than with respect to the accuracy of the information regarding AGM supplied by AGM and presented under the heading “BOND INSURANCE” and “APPENDIX G — SPECIMEN MUNICIPAL BOND INSURANCE POLICY.”

ONTARIO INTERNATIONAL AIRPORT AUTHORITY COMMISSIONERS Alan Wapner, President Ron Loveridge, Vice President Lucy Dunn, Secretary Jim Bowman Curt Hagman

ONTARIO INTERNATIONAL AIRPORT AUTHORITY MANAGEMENT Kelly Fredericks, Chief Executive Officer Jeff Reynolds, Chief Financial Officer Bruce Atlas, Chief Operating Officer Mark Thorpe, Chief Development Officer Daniel Adamus, Chief Marketing Officer

TRUSTEE & ESCROW AGENT The Bank of New York Mellon Trust Company, N.A.

BOND & DISCLOSURE COUNSEL O’Melveny & Myers LLP

SPECIAL TAX COUNSEL Nixon Peabody LLP

FINANCIAL ADVISOR CSG Advisors Incorporated

AIRPORT CONSULTANT DKMG Consulting, LLC

AIR TRAFFIC FORECAST CONSULTANT Campbell-Hill Aviation Group, LLC

VERIFICATION AGENT

Causey Demgen & Moore [THIS PAGE INTENTIONALLY LEFT BLANK] TABLE OF CONTENTS

INTRODUCTION ...... 1 Landing Fees and Building Rental ...... 35 General ...... 1 Budget For Fiscal Year 2017...... 36 The Issuer and ONT ...... 1 Investment Practices of the Authority ...... 36 Plan of Finance ...... 2 Liquidity ...... 36 The 2016 Bonds ...... 2 Risk Management and Insurance ...... 36 Risk Factors ...... 3 CAPITAL IMPROVEMENT PLANNING...... 37 Continuing Disclosure ...... 3 Capital Improvement Program ...... 37 Additional Information ...... 3 Passenger Facility Charges ...... 38 TRANSFER OF OPERATIONS AND MANAGEMENT OF Federal Grants ...... 38 ONTARIO INTERNATIONAL AIRPORT ...... 3 RISK FACTORS ...... 39 Settlement Agreement ...... 3 2016 Bonds are Special Obligations ...... 39 Transfer Date ...... 3 Airline Operating Results and Financial Condition ...... 39 FAA Approval of Transfer ...... 4 Effect of Airline Bankruptcy ...... 40 Settlement Payments ...... 4 Availability of Information Concerning Individual FAA Reauthorization Act and FAA Approval of PFC Airlines ...... 40 Usage ...... 6 Expiration and Possible Termination of ULAs ...... 41 Staff Augmentation Agreement ...... 6 Airline Consolidations ...... 41 Redemption and Defeasance of Department’s 2006 Concentration of Passenger and Air Cargo Carriers ...... 41 Bonds ...... 7 Competition for Domestic Flights ...... 41 ESTIMATED SOURCES AND USES OF FUNDS ...... 8 Cost of Aviation Fuel ...... 42 DESCRIPTION OF THE 2016 BONDS ...... 8 International Conflict and the Threat of Terrorism ...... 42 General ...... 8 Federal Law Affecting Airport Rates and Charges ...... 42 Redemption ...... 9 Aviation Security ...... 43 SECURITY AND SOURCES OF PAYMENT FOR THE 2016 Public Health Risks ...... 44 BONDS ...... 10 Effects of Concessionaire Bankruptcy ...... 44 Net Pledged Revenues ...... 10 National and Global Economic Conditions ...... 44 Rate Covenant ...... 12 Seismic Risks and Natural Disasters ...... 44 Flow of Funds ...... 12 Regulatory Uncertainties ...... 45 Reserve Fund...... 14 Federal Funding; Impact of Federal Sequestration ...... 45 The 2016 Bond Reserve Surety Bond...... 15 No Acceleration ...... 46 Rights of the 2016 Bond Insurer ...... 16 Ability to Meet Rate Covenant ...... 46 Additional Bonds ...... 16 Competition from Travel Alternatives ...... 46 Permitted Investments ...... 18 Capacity Restrictions ...... 47 Events of Default and Remedies; No Acceleration ...... 18 Operations at ONT ...... 47 DEBT SERVICE REQUIREMENTS ...... 18 Capital Improvement Program ...... 48 BOND INSURANCE ...... 18 New Management at ONT ...... 48 Bond Insurance Policy ...... 18 ONT ENVIRONMENTAL MATTERS ...... 48 Assured Guaranty Municipal Corp...... 19 Noise Standards ...... 48 SOURCES OF INFORMATION ...... 20 LITIGATION ...... 49 REPORT OF THE AIRPORT CONSULTANT ...... 21 TAX MATTERS ...... 50 Debt Service Coverage ...... 22 U.S. Holders ...... 50 ONTARIO INTERNATIONAL AIRPORT AUTHORITY ...... 22 Taxation of Interest Generally ...... 50 Organization and Powers ...... 22 Market Discount...... 50 Commission Members ...... 22 Surtax on Unearned Income ...... 51 Authority Management ...... 23 Sale or Redemption of the 2016 Bonds ...... 51 Staffing Plan ...... 24 Non-U.S. Holders ...... 52 ONTARIO INTERNATIONAL AIRPORT ...... 25 Information Reporting and Backup Withholding ...... 53 Introduction ...... 25 ERISA ...... 54 Aviation Activity ...... 25 State Taxes ...... 54 Passenger Enplanements and Airline Market Shares ...... 28 RATINGS ...... 54 Air Cargo ...... 30 LEGAL MATTERS ...... 54 Emergency Preparedness ...... 31 FINANCIAL ADVISOR ...... 55 AGREEMENTS FOR USE OF AIRPORT FACILITIES ...... 31 AIRPORT CONSULTANT ...... 55 General ...... 31 AIR TRAFFIC FORECAST CONSULTANT ...... 55 Operating Use and Terminal Lease Agreements ...... 31 FORWARD-LOOKING STATEMENTS ...... 55 Parking, Concession and Rental Car Agreements ...... 31 FINANCIAL STATEMENTS ...... 56 Ground Lease Agreements with UPS and FedEx...... 32 CONTINUING DISCLOSURE ...... 56 FINANCIAL AND OPERATING INFORMATION UNDERWRITING ...... 56 CONCERNING ONT ...... 33 VERIFICATION ...... 56 Summary of Operating Statements ...... 33 MISCELLANEOUS ...... 56 ONT Financial Performance ...... 35 AUTHORIZATION ...... 57 Revenue Diversity ...... 35

APPENDIX A – REPORT OF THE AIRPORT CONSULTANT APPENDIX B – DEMAND FORECAST METHODOLOGY AND RESULTS APPENDIX C – SUMMARIES OF THE MASTER INDENTURE AND THE FIRST SUPPLEMENTAL INDENTURE APPENDIX D-1 – FORM OF BOND COUNSEL OPINION APPENDIX D-2 – FORM OF OPINION OF SPECIAL TAX COUNSEL APPENDIX E – BOOK-ENTRY ONLY SYSTEM APPENDIX F – FORM OF CONTINUING DISCLOSURE CERTIFICATE APPENDIX G – SPECIMEN MUNICIPAL BOND INSURANCE POLICY

OFFICIAL STATEMENT

$52,475,000* ONTARIO INTERNATIONAL AIRPORT AUTHORITY ONTARIO INTERNATIONAL AIRPORT REVENUE BONDS SERIES 2016 (TAXABLE)

INTRODUCTION

This introduction contains a summary of the offering and certain documents. Investors are advised to read the Official Statement in its entirety.

General

The purpose of this Official Statement is to provide certain information concerning the sale and delivery by the Ontario International Airport Authority (the “Authority”) of its $52,475,000* aggregate principal amount of Ontario International Airport Revenue Bonds, Series 2016 (Taxable) (the “2016 Bonds”). Capitalized terms used but not defined herein have the meanings ascribed to them in APPENDIX C. See “APPENDIX C – SUMMARIES OF THE MASTER INDENTURE AND THE FIRST SUPPLEMENTAL INDENTURE.”

Included as Appendix A to this Official Statement is the Report of the Airport Consultant dated October 11, 2016 (the “Report of the Airport Consultant”) prepared by DKMG Consulting, LLC (the “Airport Consultant”), which, among other things, evaluates the ability of the Authority to produce Net Pledged Revenues (as defined herein) sufficient to meet the requirements of the rate covenant established in the Indenture (as defined herein) during the projection period, taking into account estimated annual debt service requirements, using assumptions as documented in the Report of the Airport Consultant. The findings and projections in the Report of the Airport Consultant are subject to a number of assumptions that should be reviewed and considered by prospective investors. No assurances can be given that the projections and expectations discussed in the Report of the Airport Consultant will be achieved. Actual results will differ and may differ materially from the projections described therein.

Included as Appendix B to this Official Statement is a Demand Forecast Methodology and Results forecast dated August 26, 2016 (the “Aviation Activity Forecast”) prepared by Campbell-Hill Aviation Group, LLC (the “Air Traffic Forecast Consultant”), which, among other things, forecasts passenger and cargo activity at ONT through the year 2045. The findings and projections in the Aviation Activity Forecast are subject to a number of assumptions that should be reviewed and considered by prospective investors. No assurances can be given that the projections and expectations discussed in the Aviation Activity Forecast will be achieved. Actual results will differ and may differ materially from the projections described therein.

The Issuer and ONT

The Authority is a joint exercise of powers authority created by the City of Ontario, California (the “City”) and the County of San Bernardino, California (the “County”) pursuant to the Joint Exercise of Powers Act, California Government Code Section 6500 and following (as it may be amended and supplemented, the “Joint Powers Act”), and organized under a Joint Exercise of Powers Agreement dated as of August 21, 2012 (the “Joint Powers Agreement”), between the City and the County. The Authority was created primarily for the purpose of operating, maintaining, managing, developing and marketing ONT. The Authority is governed by a commission of five (5) members, which is responsible for the formulation of airport policy. See “ONTARIO INTERNATIONAL AIRPORT AUTHORITY.”

* Preliminary; subject to change

According to statistics collected by Airports Council International (“ACI”), for calendar year 2015, ONT was the 58th busiest airport in the United States in terms of total passenger volume with approximately 4.2 million enplaned and deplaned passengers and the 15th busiest airport in the United States in terms of volume of air cargo with approximately 463,000 metric tons of cargo.

Plan of Finance

The proceeds of the 2016 Bonds will be used, along with other available funds (i) to redeem and discharge the Department of Airports of the City of Los Angeles, California’s outstanding Ontario International Airport Refunding Revenue Bonds, Series 2006A (Tax-Exempt) (AMT) (the “2006A Bonds”) and Ontario International Airport Refunding Revenue Bonds, Series 2006B (Taxable) (the “2006B Bonds” and, together with the 2006A Bonds, the “2006 Bonds”), (ii) to purchase a reserve fund surety policy for the 2016 Bonds, (iii) to purchase a bond insurance policy for the 2016 Bonds, and (iv) to pay certain costs of issuance related to the 2016 Bonds, all as further described herein. Payment and discharge of the outstanding 2006 Bonds (in addition to the payment of certain other amounts and satisfaction of certain other obligations) is a requirement of the Settlement Agreement defined below pursuant to which the management and operation of ONT will transfer from the Department (as defined below) to the Authority. See “TRANSFER OF OPERATIONS AND MANAGEMENT OF ONTARIO INTERNATIONAL AIRPORT,” “ESTIMATED SOURCES AND USES OF FUNDS” and “DESCRIPTION OF THE 2016 BONDS.”

The 2016 Bonds

The 2016 Bonds will be issued pursuant to the Master Trust Indenture, to be dated as of November 1, 2016 (the “Master Indenture”), by and between the Authority and The Bank of New York Mellon Trust Company, N.A., as trustee (the “Trustee”) and a First Supplemental Trust Indenture, to be dated as of November 1, 2016 (the “First Supplemental Indenture,” and together with the Master Indenture, as the same may be amended and supplemented from time to time, the “Indenture”), by and between the Authority and the Trustee. The issuance of the 2016 Bonds is the initial bond issuance by the Authority, and the bond issuance is a condition of and dependent upon the occurrence of the transfer of ONT management and operation from the Department to the Authority.

The 2016 Bonds will be secured by a pledge of and first lien on Net Pledged Revenues, which include certain income and revenue received by the Authority from ONT, after the payment therefrom of the maintenance and operation expenses of ONT. The Indenture will provide that the Authority may issue additional bonds payable from Net Pledged Revenues on a parity basis with the 2016 Bonds (“Additional Bonds”), subject to the satisfaction of certain conditions. See “SECURITY AND SOURCES OF PAYMENT FOR THE 2016 BONDS – Additional Bonds” for a discussion of the conditions to issuance of Additional Bonds. In addition, the Authority may issue bonds under the Indenture payable from Net Pledged Revenues on a subordinated basis. For purposes of this Official Statement, “Bonds” shall mean the 2016 Bonds and any Additional Bonds hereafter issued under the Indenture on a parity with the 2016 Bonds. Net Pledged Revenues will be available for the equal and proportionate benefit of all Bonds. See “SECURITY AND SOURCES OF PAYMENT FOR THE 2016 BONDS – Net Pledged Revenues.”

THE 2016 BONDS WILL BE SPECIAL LIMITED OBLIGATIONS OF THE AUTHORITY, PAYABLE SOLELY FROM AND SECURED BY A PLEDGE OF NET PLEDGED REVENUES DERIVED BY THE AUTHORITY FROM THE OPERATIONS OF ONT AND CERTAIN LIMITED FUNDS AND ACCOUNTS HELD BY OR TO BE HELD BY THE AUTHORITY OR THE TRUSTEE UNDER THE INDENTURE. NONE OF THE PROPERTIES OF ONT WILL BE SUBJECT TO ANY MORTGAGE OR OTHER LIEN FOR THE BENEFIT OF THE OWNERS OF THE 2016 BONDS, AND NEITHER THE FULL FAITH AND CREDIT NOR THE TAXING POWER OF THE CITY, THE COUNTY, THE STATE OR ANY POLITICAL SUBDIVISION OR AGENCY OF THE STATE WILL BE PLEDGED TO THE PAYMENT OF THE PRINCIPAL OF, PREMIUM, IF ANY, OR INTEREST ON THE 2016 BONDS. THE AUTHORITY HAS NO TAXING POWER.

Risk Factors

The purchase and ownership of the 2016 Bonds involve investment risks. Prospective purchasers of the 2016 Bonds should read this Official Statement in its entirety. For a discussion of certain risks relating to the 2016 Bonds, see “RISK FACTORS”.

Continuing Disclosure

The Authority will covenant for the benefit of the owners of the 2016 Bonds to provide to the Municipal Securities Rulemaking Board’s Electronic Municipal Market Access (“EMMA”) system: (i) certain financial information and operating data concerning the Authority on an annual basis and (ii) to provide notice to the EMMA system of certain enumerated events, pursuant to the requirements of Rule 15c2-12 adopted by the Securities and Exchange Commission (the “SEC”). See “CONTINUING DISCLOSURE” and “APPENDIX F – FORM OF CONTINUING DISCLOSURE CERTIFICATE” for the form of the Continuing Disclosure Certificate.

Additional Information

Brief descriptions of the 2016 Bonds, the Authority, ONT, the Indenture and certain other documents are included in this Official Statement and the appendices hereto. Such descriptions do not purport to be comprehensive or definitive. All references herein to such documents and any other documents, statutes, laws, reports or other instruments described herein are qualified in their entirety by reference to each such document, statute, law, report or other instrument. Information contained herein has been obtained from officers, employees and records of the Authority and from other sources believed to be reliable. See “SOURCES OF INFORMATION” herein for discussion of the sources of certain historical financial and operating information with respect to ONT. The information 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 any implication that there has been no change in the affairs of the Authority since the date hereof. This Official Statement is not to be construed as a contract or agreement between the Authority and purchasers or owners of any of the 2016 Bonds.

TRANSFER OF OPERATIONS AND MANAGEMENT OF ONTARIO INTERNATIONAL AIRPORT

Settlement Agreement

Since October 18, 1967, management and control of ONT was overseen by the City of Los Angeles, California, its Board of Airport Commissioners (“BOAC”) and Los Angeles World Airports (“LAWA” and collectively with the City of Los Angeles and BOAC, the “Department”) in accordance with the terms of a Joint Powers Agreement and subsequent Acquisition Agreement entered into on June 19, 1985. However, following protracted litigation between the Department, the City, and the Authority regarding the ownership of and control over ONT, on December 22, 2015, the Department and the Authority entered into a settlement agreement (as amended, the “Settlement Agreement”) providing for the Authority’s assumption of management and control of ONT on the Transfer Date (as defined below) subject to certain terms and conditions as set forth in the Settlement Agreement. Described below are certain key terms and conditions of the Settlement Agreement. A complete copy of the Settlement Agreement can be obtained from the Authority upon request.

Transfer Date

The Authority shall assume ownership and control of the management and operation of ONT on the transfer date, defined in the Settlement Agreement as the date on which all closing conditions are satisfied or waived by the parties thereto (the “Transfer Date”). The Authority and the Department anticipate that the Transfer Date shall be November 1, 2016, concurrent with the issuance and delivery of the 2016 Bonds. The issuance of the 2016 Bonds is a condition of and dependent upon the occurrence of the transfer of ONT management and operation from the Department to the Authority.

On the Transfer Date, the Department shall assign and transfer to the Authority, on an “as-is” basis, all of its right, title and interest in and to all of the assets, properties, rights and interests existing or acquired prior to the Transfer Date that are solely used or held for use in connection with the operation of ONT (excluding certain excluded assets further described below), including real and personal property, concession agreements, services agreements, leases with airport users (including airlines), assignable governmental permits and approvals, and cash balances in the accounts of ONT (following payment of certain amounts required to be paid by the Settlement Agreement from such accounts, as further described under the heading “—Settlement Payments” below). The excluded assets include certain assets and contracts that are used by the Department in connection with its operations of other airports, businesses or enterprises in addition to ONT. To the extent that such assets and contracts are required for the operation and management of ONT, the Authority will either acquire similar assets, enter into new agreements for applicable services, which are expected to be on terms substantially similar to those of the existing agreements, or obtain similar services through the City.

FAA Approval of Transfer

As a condition to the transfer of operations and management of ONT, the Authority is required to obtain written approval for the transfer from the Federal Aviation Administration (“FAA”), in the form of a certification from the FAA to the Authority pursuant to Title 14, Code of Federal Regulations (CFR), Part 139 (the “Part 139 Certificate”) authorizing the Authority to operate and manage ONT. Various requirements must be satisfied before the FAA will issue the Part 139 Certificate, including FAA approval of the Authority’s Airport Certification Manual, which will set forth operating procedures for ONT, and the Authority’s airport emergency plan for ONT, and Transportation Security Administration (“TSA”) approval of the Authority’s airport security plan for ONT.

Certain of the requirements for issuance of the Part 139 Certificate have already been satisfied, and the Authority has been in a continuing dialogue with the FAA regarding the status of completion of the remaining requirements and the FAA’s review thereof. In a letter to the Authority dated October 4, 2016, the FAA indicated that it appeared the Authority had submitted the documentation required to support the FAA’s issuance of the Part 139 Certificate and that, subject to compliance with certain requirements such as the execution of various agreements and certain final determinations by the FAA, the transfer agreement, with a transfer date of November 1, 2016, appeared consistent with Federal law. The Authority expects that the remaining requirements for the transfer will be satisfied prior to the Transfer Date and that the Part 139 Certificate will be issued on the Transfer Date, immediately prior to the issuance of the 2016 Bonds. If the Part 139 Certificate is not obtained, the transfer of operations and management of ONT will not occur and the 2016 Bonds will not be issued.

Settlement Payments

The Settlement Agreement requires the Authority to make certain payments to LAWA prior to and following the Transfer Date (the “Settlement Payments”). These payments include:

• The transfer of $15,000,000 from City funds within thirty (30) days of the execution of the Settlement Agreement. This amount was paid into an escrow fund for the benefit of LAWA on January 21, 2016, and will be released to LAWA on the Transfer Date.

• The transfer of $15,000,000 from City funds within thirty (30) days after the FAA’s approval of the transfer of ONT operations and management from the Department to the Authority, which approval is anticipated to be issued on the Transfer Date and is a condition of the transfer and the issuance of the 2016 Bonds. The City intends to make this payment on the Transfer Date.

• The transfer of $40,000,000 from the unrestricted cash accounts of ONT, provided that the remaining balance in the unrestricted cash accounts of ONT (plus amounts in the Maintenance and Operation Reserve Fund) equals or exceeds 120 days of Maintenance and Operation Expenses. If the remaining balance of the specified accounts would not satisfy this requirement, the amount of the transfer required to be made to LAWA will be reduced as necessary so that the remaining ONT unrestricted cash balances continue to satisfy this requirement. This transfer is required to be made within thirty (30) days after the FAA’s approval of the transfer of ONT operations and management from the Department to the Authority, and is

expected to be made on the Transfer Date. See “FINANCIAL AND OPERATING INFORMATION CONCERNING ONT — Liquidity” for further information regarding ONT’s available unrestricted cash and liquidity position.

• The transfer of $50 million by the fifth (5th) anniversary date of the Transfer Date. The Authority anticipates satisfying this requirement by transferring $47,338,500 from the proceeds of previously- collected Passenger Facility Charges (“PFCs”) from the ONT PFC account to the PFC account for Los Angeles International Airport (“LAX”) on the Transfer Date, which amount represents the $50 million transfer requirement discounted to the Transfer Date in accordance with the terms of the Settlement Agreement. See “FAA Reauthorization Act” below for a further discussion of this use of PFCs.

• The transfer of $70 million by the tenth (10th) anniversary date of the Transfer Date. To provide assurance to LAWA that the Authority will be able to fund the $70 million payment, the Settlement Agreement requires the Authority to prepare and submit a funding plan that must be approved by the BOAC. The funding plan was submitted by the Authority on July 29, 2016 and approved by BOAC on August 4, 2016 (the “Funding Plan”). Under the Funding Plan, the $70 million payment is anticipated to be made from the proceeds of PFCs collected at ONT following the Transfer Date, and the FAA approved such use of PFCs on September 26, 2016. See “FAA Reauthorization Act and FAA Approval of PFC Usage” below for a further discussion of this use of PFCs. The Authority will transfer PFC proceeds to LAWA quarterly until such time as the $70 million payment has been made in full (taking into account any prepayment discounts that may be permitted pursuant to the Settlement Agreement).

Although the Authority anticipates that PFC revenues will be sufficient to fund the $70 million payment obligation in full, in the event that this $70 million payment is not funded with the proceeds of PFCs, the Authority would need to look to alternative sources of funding. One such alternative source could be the issuance of additional bonds by the Authority to fund such payment, which bonds would be Subordinated Obligations for purposes of the Indenture, payable from Net Pledged Revenues on a basis junior and subordinate to the payment of principal and interest on the 2016 Bonds, in accordance with the terms of the Indenture. In the event and to the extent that the Authority determines to make any portion of the $70 million payment from Net Pledged Revenues, any such payment shall be made on a subordinate basis to the 2016 Bonds as to payment from Net Pledged Revenues, and then only to the extent that the Authority would have remaining Net Pledged Revenues in its then-current Fiscal Year equal to at least 100% of the actual debt service and other obligations yet to become due and payable on the outstanding 2016 Bonds in such Fiscal Year.

Until such time as the Authority has fully paid to LAWA the $70 million payment, (i) any financial obligations to third parties, including any holders of additional bonds issued pursuant to the Indenture, must be subordinate to the Authority’s payment obligations under the Settlement Agreement, including payment of the $70 million payment, and (ii) the Authority may not sell certain parcels of real property identified in the Settlement Agreement and adjacent to the airport unless the sale is approved by BOAC, which approval may not be unreasonably withheld but may be conditioned upon the proceeds of such sale being applied to the Authority’s $70 million payment obligation to LAWA.

• The transfer on the Transfer Date into a bond redemption escrow fund of amounts sufficient, together with funds available in the existing bond reserve fund established in connection with the 2006 Bonds, to pay and discharge the 2006 Bonds. The proceeds of the sale of the 2016 Bonds will be used to satisfy this requirement. The total amount to be transferred on the Transfer Date in satisfaction of this requirement is approximately $55.5 million.

Failure by the Authority to make any required Settlement Payment to LAWA could result in a default under the Settlement Agreement. In the event of a default under the Settlement Agreement, the Department has the right to pursue all remedies available under law or in equity, including injunctive relief.

FAA Reauthorization Act and FAA Approval of PFC Usage

On July 15, 2016, President Obama signed into law the FAA Extension, Safety, and Security Act of 2016 (the “FAA Reauthorization Act”), which includes provisions intended to facilitate the transfer of ONT from the Department to the Authority. In particular, the FAA Reauthorization Act authorizes PFC proceeds collected at ONT after the Transfer Date to be used to finance eligible projects at LAX, notwithstanding that ONT will no longer be under the control of the Department. Thus, as contemplated in the Settlement Agreement, the legislation enables the Authority to transfer PFC proceeds collected at ONT after the Transfer Date to LAWA in order to pay the required $70 million Settlement Payment due following the Transfer Date. Prior to the legislation, PFC proceeds were only permitted to be used to finance eligible projects at the airport or airport systems at which they are collected. The transfer of previously-collected PFC funds from the ONT PFC Account to the LAX PFC Account on the Transfer Date in satisfaction of the $50 million Settlement Payment obligation described above is permitted under pre- existing legislation, because LAX and ONT were within a single airport system when the PFCs were collected and transferred.

In addition to legislative authority to use PFC proceeds collected at ONT to fund projects at LAX, FAA approval of specific uses of PFC proceeds is also required. On July 18, 2016, the FAA approved the use of approximately $47.3 million of PFC proceeds previously collected at ONT to be used for eligible projects at LAX, thereby permitting the Settlement Payment in that amount to be made to LAWA on the Transfer Date from the proceeds of PFCs. On September 26, 2016, the FAA approved the collection and use of an additional $70 million of ONT PFCs for eligible projects at LAX, to enable PFC proceeds to be used to fund the Authority’s $70 million Settlement Payment obligation.

PFC proceeds do not constitute Pledged Revenues and are not available for payment of debt service on the 2016 Bonds.

Staff Augmentation Agreement

In order to facilitate the orderly transition of ONT operations and management from the Department to the Authority, the Authority and LAWA have entered into a Staff Augmentation Agreement dated June 20, 2016 (the “Staff Augmentation Agreement”). The Staff Augmentation Agreement will take effect on the Transfer Date and will remain in effect for 21 months (the “Transition Period”) from the Transfer Date, plus an additional 90-day retention period (the “Retention Period”) immediately following the 21 months.

Under the Staff Augmentation Agreement, the Authority will be responsible for all aspects of the operations of ONT. However, in order to maintain airport services at the level provided by the Department prior to the transfer, LAWA will provide qualified employees, in substantially the same numbers as prior to the transfer, to perform key ONT operations, such as airfield operations, facilities maintenance and custodial services, security services, and aircraft rescue and firefighting services. All ONT operations will be performed in accordance with the operating manuals and plans in effect prior to the Transfer Date, unless otherwise directed by the Authority.

Under the Staff Augmentation Agreement, LAWA will be required to retain staffing in the following critical managerial and supervisory positions (collectively, the “Critical Positions”), all of which positions will be staffed by the existing individuals in such positions or by similarly-qualified individuals: Director of ONT Operations, Assistant Airport Manager, Chief of ONT Airport Operations, Captain of Airport Police, Chief of ONT Aircraft Rescue and Firefighting (“ARFF”), and Airport Maintenance Superintendent. Although LAWA will be responsible for oversight and supervision of the LAWA employees, LAWA’s Director of ONT Operations will be required to act at the direction of the Authority’s management and to implement the Authority’s executive decisions. The Authority will be responsible for reimbursing LAWA for the base salary and overtime pay of the LAWA employees working for ONT, as well as for certain additional costs and administrative charges. LAWA will remain responsible for retirement and pension obligations of LAWA employees assigned to work for ONT during the Transition Period.

During the term of the Staff Augmentation Agreement, the Authority can only reduce the numbers of LAWA staff working at ONT by giving a 60-day redundancy notice to LAWA, wherein the Authority will identify a LAWA classification as redundant to the Authority, without identifying any particular employee. LAWA will then

make a good faith effort to reassign the positions in the redundancy notice to other LAWA facilities. Following the 60-day redundancy notice period, LAWA will be responsible for reassigning the affected employees to other positions. Once the employee is reassigned, the Authority, within 30 days of the employee’s transfer, will pay LAWA an amount equal to 6 months’ of such employee’s compensation if the employee was transferred to a position at LAWA that was not otherwise actively seeking to hire new employees. The Critical Positions will not be subject to redundancy notices.

At the end of the term of the Staff Augmentation Agreement, those LAWA employees who have worked at ONT for the 12 months prior to the end of the Transition Period and who do not choose to transfer to other positions within the City of Los Angeles Civil Service System or leave LAWA employment will be retained at ONT as employees of either the Authority or an Authority contractor during the ninety-day Retention Period, and their employment may not be terminated without cause during such Retention Period.

Throughout the term of the Staff Augmentation Agreement, the Authority will negotiate with labor groups the terms and conditions of employment at ONT. For additional information concerning the Authority’s staffing plans, see ONTARIO INTERNATIONAL AIRPORT AUTHORITY - Staffing Plan.”

Redemption and Defeasance of Department’s 2006 Bonds

As a condition to the transfer of ONT, the Authority, LAWA and the Trustee shall enter into an escrow agreement (the “Escrow Agreement”) establishing an escrow account for the redemption and defeasance of the 2006 Bonds. On the Transfer Date, the Authority shall deposit into the escrow account sufficient funds so that, together with the funds available in the Department’s existing debt service reserve fund and its maintenance and operation reserve fund, there is sufficient cash to pay and discharge the outstanding 2006 Bonds on the redemption date pursuant to the terms of the indenture under which such 2006 Bonds were issued. The Department’s bond counsel will also deliver a defeasance opinion with respect to the 2006 Bonds. The 2006 Bonds to be refunded are identified in the table below:

2006 BONDS TO BE REDEEMED (BASE CUSIP1 NO. 544435)

Maturity Date Principal CUSIP Series May 15 Redeemed Number(1) 2006A 2017 $ 3,990,000 XC9 2006A 2018 4,210,000 XD7 2006A 2019 4,450,000 XE5 2006A 2020 4,685,000 XF2 2006A 2021 4,950,000 XG0 2006A 2022 5,225,000 XH8 2006A 2023 5,515,000 XJ4 2006A 2024 5,840,000 XK1 2006A 2025 6,150,000 XL9 2006A 2026 6,510,000 XM7 2006A TOTAL: $ 51,525,000

2006B 2026 $ 3,980,000 XP0 2006B TOTAL: $ 3,980,000

TOTAL: $ 55,505,000

______1 CUSIP numbers are provided only for the convenience of the reader. The Authority takes no responsibility for any changes to or errors in this list of CUSIP numbers.

ESTIMATED SOURCES AND USES OF FUNDS

The following table sets forth the estimated sources and uses of the funds with respect to the 2016 Bonds and certain other funds to be provided by the Department:

Sources: 2016 Bonds Principal amount $ Funds released from debt service accounts related to the 2006 Bonds1 Termination payment from investment contract for 2006A Bonds2 Funds related from Airport Revenue Fund TOTAL: $

Uses: Deposit to 2006 escrow account $ Costs of issuance3 Underwriter’s discount Bond insurance premium Surety policy premium

TOTAL: $

1 Funds to be provided by the Department and placed in the escrow account. 2 Termination payment due from provider under an investment contract relating to the debt service reserve fund for the 2006A Bonds. 3 Includes legal fees, trustee fees, financial advisory fees, escrow agent fees, rating agencies’ fees, printing costs, verification agent fees and other costs of issuance.

DESCRIPTION OF THE 2016 BONDS

General

The 2016 Bonds will be dated their date of delivery, and will bear interest from that date at the rates per annum, and will mature on May 15 in the years, set forth on the inside cover page of this Official Statement. Interest on the 2016 Bonds will be payable semiannually on May 15 and November 15, commencing May 15, 2017, and will be calculated on the basis of a 360-day year comprised of twelve 30-day months. The 2016 Bonds will be issued in minimum denominations of $5,000 and any integral multiple thereof in fully registered form, and when issued, will be registered in the name of Cede & Co., as nominee of The Depository Trust Company, New York, New York (“DTC”). So long as Cede & Co. is the registered owner of the 2016 Bonds, references herein to the owners or registered owners of the 2016 Bonds shall mean Cede & Co., and not the beneficial owners of the 2016 Bonds. See “APPENDIX E – BOOK-ENTRY ONLY SYSTEM” herein.

See “APPENDIX C – SUMMARIES OF THE MASTER INDENTURE AND THE FIRST SUPPLEMENTAL INDENTURE” for a summary of certain provisions of the Indenture, including, without limitation, certain covenants of the Authority, the rights and duties of the Trustee, the rights and remedies of the Trustee and the Bondholders upon an event of default under the Indenture, provisions relating to amendments of the Indenture, and procedures for defeasance of the 2016 Bonds.

Redemption

Optional Redemption*

The 2016 Bonds will be subject to redemption at the option of the Authority prior to their respective maturity dates, as a whole or in part, on any date as directed by the Authority, at the Make-Whole Redemption Price to be calculated by the Authority. The “Make-Whole Redemption Price” is the greater of (i) 100% of the principal amount of the 2016 Bonds to be redeemed or (ii) the sum of the present value of the remaining scheduled payments of principal and interest on the 2016 Bonds to be redeemed, not including any portion of those payments of interest accrued and unpaid as of the date fixed for redemption of such 2016 Bonds to be redeemed, the present value of which will be determined by discounting the amount of each such interest and principal payment from the date that each such payment would have been payable but for the redemption to the date fixed for redemption on a semiannual basis, assuming a 360-day year containing twelve 30-day months, at the Treasury Rate plus __ basis points, plus, in each case, accrued and unpaid interest on the 2016 Bonds to be redeemed to the redemption date.

“Treasury Rate” means, with respect to any redemption date for a particular 2016 Bond, (i) the yield to maturity of U.S. Treasury securities with a constant maturity (as compiled and published in the most recent Federal Reserve Statistical Release H.15 (519)) that has become publicly available as of the most recent date that is not more than forty-five (45) calendar days prior to the redemption date (excluding inflation indexed securities) or, if such Statistical Release is no longer published, any publicly available source of similar market data reasonably selected by the Fiscal Agent, most nearly equal to the remaining average life of such 2016 Bond, or if the remaining average life is less than one year, the weekly average yield on actually traded U.S. Treasury securities adjusted to a constant maturity of one year, (ii) if the yield described in (i) above is not reported as of such time or the yield reported as of such time is not ascertainable, the rate per annum truncated to the fifth decimal, equal to the semiannual equivalent yield to maturity or interpolated maturity of the Comparable Treasury Issue, computed as of the second business day immediately preceding that a date that is not more than forty-five (45) calendar days prior to the redemption date, assuming a price for the Comparable Treasury Issue (expressed as a percentage of its principal amount), equal to the Comparable Treasury Price for that redemption date as calculated by the Designated Investment Banker.

“Comparable Treasury Issue” means, with respect to any redemption date for a particular 2016 Bond, the United States Treasury security or securities selected by the Designated Investment Banker which has an actual or interpolated maturity comparable to the remaining average life of the 2016 Bond to be redeemed, and that would be utilized in accordance with customary financial practice in pricing new issues of debt securities of comparable maturity to the remaining average life of the 2016 Bonds to be redeemed.

“Comparable Treasury Price” means, with respect to any redemption date for a particular 2016 Bond, the average of four Reference Treasury Dealer Quotations for that redemption date, after excluding the highest and lowest of such Reference Treasury Dealer Quotations, or if the Designated Investment Banker obtains fewer than four Reference Treasury Dealer Quotations, the average of all quotations obtained by the Designated Investment Banker.

“Designated Investment Banker” means one of the Reference Treasury Dealers appointed by the Authority.

“Reference Treasury Dealer” means each of the four firms, specified by the Authority from time to time, that are primary United States Government securities dealers in the City of New York (each a “Primary Treasury Dealer”); provided, however, that if any of them ceases to be a Primary Treasury Dealer, the Authority will substitute another Primary Treasury Dealer.

“Reference Treasury Dealer Quotations” means, with respect to each Reference Treasury Dealer and any redemption date for a particular 2016 Bond, the average, as determined by the Designated Investment Banker, of the bid and asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount) quoted in writing to the Designated Investment Banker by such Reference Treasury Dealer at 3:30 P.M., New York City time, on the third Business Day preceding that redemption date.

* Preliminary, subject to change

See “APPENDIX C – SUMMARIES OF THE MASTER INDENTURE AND THE FIRST SUPPLEMENTAL INDENTURE.”

Selection of Bonds for Redemption. Whenever provision is made in the First Supplemental Indenture for the redemption of less than all of the 2016 Bonds of a maturity, the Trustee shall select such 2016 Bonds for redemption pro rata, in accordance with the First Supplemental Indenture (and subject to DTC operational arrangements for 2016 Bonds held by DTC or the applicable successor depository). The Trustee shall promptly notify the Authority in writing of the numbers of the 2016 Bonds or portions thereof so selected for redemption by mailing it a copy of the notice of redemption.

Notice of Redemption. Notice of redemption shall be mailed by first-class mail not less than thirty (30) days before any Redemption Date, to the respective Owners of any 2016 Bonds designated for redemption at their addresses appearing on the registration books, and shall be submitted to the Municipal Securities Rulemaking Board’s EMMA system. Each notice of redemption shall state the Redemption Date, the place or places of redemption, whether less than all of the 2016 Bonds are to be redeemed, the distinctive numbers of the Bonds to be redeemed, and in the case of 2016 Bonds to be redeemed in part only, the respective portions of the principal amount thereof to be redeemed. Each such notice shall also state that on the Redemption Date there will become due and payable on each of said 2016 Bonds or parts thereof designated for redemption the Redemption Price thereof, plus accrued interest thereon, and that from and after such Redemption Date interest thereon shall cease to accrue, and shall require that such 2016 Bonds be surrendered. Neither the failure to receive any notice nor any defect therein shall affect the validity of the proceedings for such redemption or the cessation of accrual of interest from and after the redemption date. Notice of redemption of 2016 Bonds shall be given by the Trustee, at the expense of the Authority, for and on behalf of the Authority.

With respect to any notice of optional redemption of 2016 Bonds, unless upon the giving of such notice such 2016 Bonds shall be deemed to have been paid within the meaning of the Indenture or the Trustee has received amounts sufficient to pay the principal of, and premium, if any, and interest on, such 2016 Bonds to be redeemed, such notice shall state that such redemption shall be conditional upon the receipt by the Trustee on or prior to the Redemption Date of amounts sufficient to pay the principal of, and premium, if any, and interest on, such 2016 Bonds to be redeemed, and that if such amounts shall not have been so received said redemption notice shall be of no force and effect and such 2016 Bonds shall not be subject to redemption on such date. In the event that such notice of redemption contains such a condition and such amounts are not so received, the redemption shall not be made and the Trustee shall within a reasonable time thereafter give notice, to the persons and in the manner in which the notice of redemption was given, that such amounts were not so received and the redemption was not made.

SECURITY AND SOURCES OF PAYMENT FOR THE 2016 BONDS

Following is a summary of certain provisions of the Indenture, including, among other things, sections of the Indenture detailing the pledge of Net Pledged Revenues, the rate covenant for the Bonds, debt service deposits for the Bonds, the funding and utilization of the Reserve Fund for the Bonds and the issuance of Additional Bonds. These summaries are not comprehensive or definitive. See “APPENDIX C – SUMMARIES OF THE MASTER INDENTURE AND THE FIRST SUPPLEMENTAL INDENTURE” for a more complete description of these provisions of the Indenture.

Net Pledged Revenues

The Bonds are limited obligations of the Authority payable solely from and secured by a pledge of Net Pledged Revenues. “Net Pledged Revenues” means, for any given period, the Pledged Revenues for such period less, for such period, the Maintenance and Operation Expenses. The Bonds are also secured by all moneys and securities held under the Indenture (other than moneys and securities on deposit in any rebate fund established under the Indenture for purposes of compliance with federal United States tax laws), as further described herein, by moneys and securities held in the Reserve Fund and any Reserve Fund Surety Policy, provided at any time in satisfaction of all or a portion of the Required Reserve, moneys and securities held in the Debt Service Fund, whether or not held by the Trustee, and. to the extent provided in any Supplemental Indenture. moneys and securities held in any Construction Fund. whether or not held by the Trustee.

The term “Pledged Revenues” is defined in the Master Indenture to mean, except to the extent specifically excluded in the Master Indenture or under the terms of any Supplemental Indenture, “Airport Revenues.” Pledged Revenues also include any additional revenues designated as Pledged Revenues pursuant to a Supplemental Indenture. To date the Authority has not designated any additional revenues as Pledged Revenues.

The term “Airport Revenues” is defined in the Master Indenture to mean, except to the extent specifically excluded therefrom, all income, receipts, earnings and revenues received by the Authority from ONT, for any given period, as determined in accordance with generally accepted accounting principles, as modified from time to time, including, but not limited to: (a) rates, tolls, fees, rentals, charges and other payments made to or owed to the Authority for the use or availability of property or facilities at ONT; (b) amounts received or owed from the sale or provision of supplies, materials, goods and services provided by or made available by the Authority at ONT, and (c) all rental or business interruption insurance proceeds, received by, held by, accrued to or entitled to be received by the Authority or any successor thereto from the possession, management, charge, superintendence and control of ONT (or any Ontario Airport Facilities or activities or undertakings related thereto) or from any other facilities wherever located with respect to which the Authority receives payments which are attributable to Ontario Airport Facilities or activities or undertakings related thereto. Airport Revenues include all income, receipts and earnings from the investment of amounts held in the Airport Revenue Fund, any Construction Fund allowed to be pledged by the terms of a Supplemental Indenture, the Reserve Fund and the Maintenance and Operations Reserve Fund and the amount, if any, related to coverage paid in a prior Fiscal Year that is available to be spent in the current Fiscal Year and that is credited by the Authority against requirements in calculating for the given Fiscal Year terminal rentals and landing fees charged to airline users of ONT pursuant to any residual methodology employed by the Authority in calculating such rentals and fees; provided, however, that for purposes of calculating Airport Revenues for a given Fiscal Year, such amount may not exceed 25% of Debt Service for the Fiscal Year for which such determination is being made.

The following, including any investment earnings thereon, are specifically excluded from Pledged Revenues: (a) any amounts received by the Authority from the imposition of ad valorem taxes; (b) gifts, grants and other income otherwise included in Airport Revenues which are restricted by their terms to purposes inconsistent with the payment of debt service on the Bonds; (c) insurance proceeds received as a result of damage to or destruction of Ontario Airport Facilities, or any other insurance proceeds, or any condemnation award or amounts received by the Authority from the sale of Ontario Airport Facilities under the threat of condemnation, in each case to the extent the use of such proceeds is restricted by the terms of the policy under which they are paid to a use inconsistent with the payment of debt service on the Bonds, and (d) Ontario Airport Special Facilities Revenue. The following, including any investment earnings thereon, are also excluded from Pledged Revenues unless designated as Pledged Revenues under the terms of a Supplemental Indenture: (a) Swap Termination Payments paid to the Authority pursuant to a Qualified Swap; (b) Facilities Construction Credits; and (c) PFCs and Customer Facility Charges (“CFCs”) collected with respect to ONT unless otherwise so pledged under the terms of any Supplemental Indenture. Swap Termination Payments, Facilities Construction Credits, PFCs, and CFCs have not been designated as Pledged Revenues under the terms of the First Supplemental Indenture. Further, interest earnings or other investment earnings on any Construction Fund established by any Supplemental Indenture are specifically excluded from “Pledged Revenues,” unless otherwise provided for in such Supplemental Indenture.

“Maintenance and Operation Expenses” means, for any given period, the total maintenance and operation expenses of ONT as determined in accordance with generally accepted accounting principles as in effect from time to time, excluding depreciation expense and any maintenance and operation expenses of ONT payable from moneys other than Pledged Revenues.

THE 2016 BONDS WILL BE SPECIAL LIMITED OBLIGATIONS OF THE AUTHORITY, PAYABLE SOLELY FROM AND SECURED BY A PLEDGE OF NET PLEDGED REVENUES AND CERTAIN LIMITED FUNDS AND ACCOUNTS HELD BY OR TO BE HELD BY THE AUTHORITY OR THE TRUSTEE UNDER THE INDENTURE. NONE OF THE PROPERTIES OF ONT WILL BE SUBJECT TO ANY MORTGAGE OR OTHER LIEN FOR THE BENEFIT OF THE OWNERS OF THE 2016 BONDS, AND NEITHER THE FULL FAITH AND CREDIT NOR THE TAXING POWER OF THE CITY, THE COUNTY, THE STATE OR ANY POLITICAL SUBDIVISION OR AGENCY OF THE STATE WILL BE PLEDGED TO THE PAYMENT OF THE PRINCIPAL OF, PREMIUM, IF ANY, OR INTEREST ON THE 2016 BONDS. THE AUTHORITY HAS NO TAXING POWER.

Rate Covenant

Under the Master Indenture, the Authority has covenanted that, while any of the Bonds remain Outstanding, it shall establish, fix, prescribe and collect rates, tolls, fees, rentals and charges in connection with ONT and for services rendered in connection therewith, so that Pledged Revenues in each Fiscal Year will be at least equal to the deposits and transfers required to be made pursuant to paragraphs (1) through (5) set forth in “Flow of Funds” below. The Authority has further covenanted that it will establish, fix, prescribe and collect rates, tolls, fees, rentals and charges in connection with ONT and for services rendered in connection therewith, so that during each Fiscal Year the Net Pledged Revenues will be equal to at least 125% of Aggregate Annual Debt Service for that Fiscal Year.

If the Authority violates the above-described covenants, such violation is not a default under the Indenture and will not give rise to a declaration of an Event of Default under the Indenture if, within 120 days after the date such violation is discovered, the Authority revises the schedule of rates, tolls, fees, rentals and charges insofar as practicable and revises any Maintenance and Operation Expenses insofar as practicable and takes such other actions as are necessary so as to produce Net Pledged Revenues to cure such violation for future compliance; provided, however, that if the Authority does not cure such violation by the end of the second subsequent Fiscal Year succeeding the date such violation is discovered, an Event of Default may be declared under the Indenture.

Pursuant to the Operating Use and Terminal Lease Agreements (“ULAs”) between the Department and certain airlines operating at ONT, which the Authority will assume from the Department on the Transfer Date, the Authority will be entitled to adjust the rates and charges charged to the airlines under such ULAs as necessary to satisfy the Authority’s rate covenant with respect to the 2016 Bonds. See “AGREEMENTS FOR THE USE OF AIRPORT FACILITIES – Operating Use and Terminal Lease Agreements” for more information regarding amounts that may be charged to the airlines under the ULAs.

Flow of Funds

Pursuant to the Master Indenture, all Airport Revenues will be deposited in the Airport Revenue Fund created pursuant to the Indenture. Net Pledged Revenues will immediately upon receipt thereof become subject to the lien and pledge of the Indenture.

Pledged Revenues deposited into the Airport Revenue Fund shall be transferred to and deposited in the following respective funds in the following order of priority, the requirements of each such fund at the time of deposit to be satisfied before any transfer is made to any fund subsequent in priority:

(1) Maintenance and Operation Fund. On or before the first day of each month, the Treasurer shall set aside out of the Airport Revenue Fund and deposit in the Maintenance and Operation Fund an amount equal to (A) one-twelfth of the amount budgeted by the Authority in the original or a revised budget for Maintenance and Operation Expenses for the then-current Fiscal Year, or (B) such other amount as the Authority determines is necessary to pay the Maintenance and Operation Expenses in such month in excess of the amount budgeted in such month. Moneys in the Maintenance and Operation Fund shall be used to pay the Maintenance and Operation Expenses as they become due and payable.

(2) Interest Account. After making the deposit required by subsection (1) above, on or before the first day of each month, the Treasurer shall deposit into the Interest Account of the Debt Service Fund an amount equal to at least (A) one-sixth of the aggregate amount of interest becoming due and payable on the Initial Bonds during the next ensuing six months (excluding any moneys deposited in the Interest Account from the proceeds of any series of such Bonds to pay interest during said next ensuing six months), until the requisite half-yearly amount of interest on all such Initial Bonds is on deposit in such fund, and (B) the amounts required to be deposited in the Interest Account with respect to any Additional Bonds pursuant to the Supplemental Indenture providing for the issuance of such Additional Bonds. The Authority shall establish a separate subaccount within the Interest Account for the Initial Bonds and for each series of Additional Bonds and deposits to the Interest Account hereunder shall be maintained in such accounts. Moneys in each subaccount of the Interest Account shall be used and withdrawn by the Authority and transferred to the Trustee solely for the purpose of paying the interest on the applicable series of Bonds as it

shall become due and payable (including accrued interest on any such Bonds purchased or redeemed prior to maturity pursuant to the Master Indenture), as provided in the Master Indenture and in any Supplemental Indenture relating to any Series of Bonds. In the event that the Pledged Revenues, after making the deposit required by subsection (1), are insufficient to make the full deposit to the Interest Account required by this subsection (2), the Authority shall apply the amount, if any, available to make the deposit to the Interest Account pro rata to each subaccount within the Interest Account in proportion to the total monthly deposit amount required for each such subaccount (or, if the Supplemental Indenture for any Bonds requires deposits on a basis other than monthly, the amount which would be required to be deposited if such deposit requirement was divided into equal monthly amounts).

(3) Principal Account. After making the deposits required by (1) and (2) above, on or before the first day of each month, the Treasurer shall deposit in the Principal Account of the Debt Service Fund an amount equal to at least (A) one-twelfth of the aggregate Principal Amounts becoming due and payable on the Initial Bonds on the next succeeding May 15 and (B) the amounts required to be deposited in the Principal Account with respect to the Principal Amount for any Additional Bonds pursuant to the Supplemental Indenture providing for the issuance of such Additional Bonds. The Authority shall establish a separate subaccount within the Principal Account for the Initial Bonds and for each series of Additional Bonds and deposits to the Principal Account hereunder shall be maintained in such accounts. Moneys in each subaccount of the Principal Account shall be used and withdrawn by the Authority and transferred to the Trustee solely for the purpose of paying the Principal Amounts on the applicable series of Bonds as they shall become due and payable, as provided in the Master Indenture and in any Supplemental Indenture relating to any Series of Bonds. In the event that the Pledged Revenues, after making the deposit required by subsections (1) and (2), are insufficient to make the full deposit to the Principal Account required by this subsection (3), the Authority shall apply the amount, if any, available to make the deposit to the Principal Account pro rata to each subaccount within the Principal Account in proportion to the total monthly deposit amount required for each such subaccount (or, if the Supplemental Indenture for any Bonds requires deposits on a basis other than monthly, the amount which would be required to be deposited if such deposit requirement was divided into equal monthly amounts), after first deducting for such purposes from any of said Principal Amounts the amount of the applicable series of Bonds that shall have been redeemed or purchased during the period from the most recent Payment Date.

(4) Reserve Fund. After making the deposits required by (1), (2) and (3) above, on or before the first day of each month, the Treasurer shall transfer to the Trustee for deposit in the Reserve Fund such amount as shall be required to maintain in each account in the Reserve Fund a balance equal to the applicable Required Reserve for such account; provided that the amount to be replenished to any account within the Reserve Fund after a draw on such account to pay debt service on any Bonds may be divided into no more than 12 equal monthly installments. In the event that the Required Reserve with respect to any account within the Reserve Fund is satisfied by the deposit of a Reserve Fund Surety Policy therein, the amounts available for deposit to the Reserve Fund (plus amounts required for the payment of any associated expenses and interest) shall be available for reimbursement to the provider of said Reserve Fund Surety Policy in the event of a draw thereon.

(5) Maintenance and Operation Reserve Fund. After making the deposits required by (1), (2), (3), and (4) above, on or before the first day of each Fiscal Year, Treasurer shall transfer and deposit into the Maintenance and Operation Reserve Fund an amount, if any, required to be deposited therein such that the total amount on deposit therein shall be equal to the Maintenance and Operation Reserve Fund Requirement.

(6) Surplus Revenue Fund. The Treasurer may determine the Pledged Revenues remaining in the Airport Revenue Fund attributable to a prior calendar month which are available for transfer to the Surplus Revenue Fund after having set aside and transferred all amounts required to be set aside or transferred by the Trustee or the Authority, as provided in (1), (2), (3), (4), and (5) above, and the Treasurer may transfer and deposit into the Surplus Revenue Fund an amount equal to the amount remaining in the Airport Revenue Fund.

Moneys in the Surplus Revenue Fund may be transferred by the Treasurer to any other fund or account of the Authority, free and clear of the lien of the Indenture, to be used as directed by the Authority for the payment of Subordinated Obligations or for any discretionary purposes as authorized by the Authority and the Joint Powers Agreement; provided, however, the Treasurer shall not permit the Authority to withdraw any moneys held by the Authority in the Surplus Revenue Fund if and when the Authority is in default under the Indenture.

Reserve Fund

The Master Indenture establishes the Reserve Fund for the Bonds issued or to be issued by the Authority pursuant to any Supplemental Indenture. The Master Indenture establishes within the Reserve Fund an account designated as the “General Account.” Amounts in the General Account shall be available only to pay principal of and interest on the 2016 Bonds and any Additional Bonds for which the General Account is made available pursuant to the Supplemental Indenture providing for the issuance of such Additional Bonds. Any Supplemental Indenture providing for the issuance of Additional Bonds for which the General Account is made available shall require as a condition of issuance that an amount be deposited into the General Account for such Additional Bonds so that, together with any Reserve Fund Surety Policy, the amount on deposit in the General Account will be equal to the Required Reserve.

The Reserve Fund is held by the Trustee and is required to be funded at all times in an amount equal to the Required Reserve. “Required Reserve” means, with respect to any series of Bonds, the amount required to be maintained in the Reserve Fund, if any, for such series of Bonds pursuant to the Supplemental Indenture authorizing the issuance of such series of Bonds. The Required Reserve for the 2016 Bonds (and any Additional Bonds secured by the General Account within the Reserve Fund) shall be the lesser of (i) the Maximum Aggregate Annual Debt Service on all 2016 Bonds and such Additional Bonds, or (ii) the amount permitted to be held in the General Account within the Reserve Fund by the arbitrage bond regulations issued by the United States Authority of the Treasury under Section 148 of the Code, as such regulations are, at the time, applicable and in effect; provided, however, that any Required Reserve may be provided in whole or in part by one or more Reserve Fund Surety Policies.

Upon the issuance of the 2016 Bonds, the Required Reserve shall be deposited in the 2016 Reserve Subaccount (the “2016 Reserve Account”), so that the aggregate amount credited to the 2016 Reserve Account will be equal to the Required Reserve. The 2016 Reserve Account shall be held, invested and used as provided in the Master Indenture.

A Reserve Fund Surety Policy shall be acceptable in lieu of a deposit of cash or securities into the 2016 Reserve Account, or may be substituted for amounts on deposit in the 2016 Reserve Account, only if at the time of such deposit (i) such Reserve Fund Surety Policy extends to the maturity of the 2016 Bonds of the longest maturity then Outstanding, or the Authority has agreed, by Supplemental Indenture, that it will replace such Reserve Fund Surety Policy prior to its expiration with another Reserve Fund Surety Policy which shall have no adverse effect on the ratings, if any, then in effect on the 2016 Bonds, or with cash; and (ii) the face amount of the Reserve Fund Surety Policy, together with amounts on deposit in the General Account, including the face amount of any other Reserve Fund Surety Policy, is at least equal to the Required Reserve; and (iii) other than with respect to the 2016 Bond Reserve Surety Bond, written consent from the 2016 Bond Insurer both as to the Credit Provider of such Reserve Fund Surety Policy and as to its structure. The Authority’s repayment obligation to Credit Providers and Liquidity Providers (including the provider of the 2016 Bond Reserve Surety Bond (as defined below)) that make payments of principal of or interest on a Bond or advance funds to purchase or provide for the purchase of Bonds will be afforded the status of a Bond under the Indenture and will be payable from Net Pledged Revenues on a parity with the 2016 Bonds and any Additional Bonds. See “APPENDIX C —– SUMMARIES OF THE MASTER INDENTURE AND FIRST SUPPLEMENTAL INDENTURE —– Repayment Obligations Afforded Status of Bonds.”

Notwithstanding anything to the contrary contained in the Indenture, at any time one or more surety bonds, including the 2016 Bond Reserve Surety Bond, or insurance policies (collectively, “Reserve Fund Surety Policies”) are on deposit in the General Account of the Reserve Fund, the Trustee shall: (i) withdraw and use all cash and investments, if any, on deposit in the General Account prior to using and withdrawing any amounts derived from

payments under any Reserve Fund Surety Policies; and (ii) draw on all Reserve Fund Surety Policies on a pro rata basis based on the coverage then available under each such Reserve Fund Surety Policy, if there is more than one Reserve Fund Surety Policy on deposit in the General Account, after applying all available cash and investments in the General Account of the Reserve Fund. “Available coverage” means the coverage then available for disbursement pursuant to the terms of the applicable Reserve Fund Surety Policy without regard to the legal or financial ability or willingness of the provider of such Reserve Fund Surety Policy to honor a claim or draw thereon or the failure of such provider to honor any such claim or draw. Amounts received by the Trustee from the Authority pursuant to the Indenture as a replenishment of amounts withdrawn from the General Account shall be applied (i) first on a pro rata basis to reimburse draws on any Reserve Fund Surety Policies (including the payment of Policy Costs with respect to the 2016 Bond Reserve Surety Bond), and (ii) to replenish cash withdrawn from the General Account.

If moneys have been withdrawn from the General Account or a payment has been made under a Reserve Fund Surety Policy constituting all or a portion of the General Account, and deposited into an account or subaccount of the Debt Service Fund to prevent a default on the 2016 Bonds, then an Authorized Authority Representative will pay to the Trustee but only as provided in the Indenture, the full amount so withdrawn, together with any Policy Costs due with respect to the 2016 Bond Reserve Surety Bond, if applicable, and the expenses and interest, if any, required under the terms of any other Reserve Fund Surety Policy, or so much as shall be required to restore the General Account to the Required Reserve and to pay such interest, if any. Such repayment shall be made in 12 substantially equal monthly installments each due on the first Business Day of the month commencing with the first month after such withdrawal occurs. If such repayment is with respect to a draw under a Reserve Fund Surety Policy, the Trustee shall pay to the provider of such Reserve Fund Surety Policy the amount received by the Trustee from the Authority which is designated to be used to reimburse the provider of such Reserve Fund Surety Policy. The Trustee shall immediately notify the paying agent for the Reserve Fund Surety Policy, if any, of such reimbursement, and the amount available to be drawn under the Reserve Fund Surety Policy shall increase by the amount of such reimbursement, provided that, with respect to the 2016 Bond Reserve Surety Bond, amounts paid by the Authority with respect to Policy Costs shall be credited first to interest due, then to the expenses due and then to principal due. As and to the extent that payments are made to the 2016 Bond Insurer on account of principal due, then coverage under the 2016 Bond Reserve Surety Bond will be increased in a like amount, subject to the terms of the Reserve Policy.

Moneys in the General Account shall be invested and reinvested by the Trustee at the written direction of an Authorized Authority Representative in Permitted Investments. Earnings on the General Account shall be paid pro rata to the related principal and interest subaccounts of the Debt Service Fund to be applied as a credit against the Authority’s obligation to make its next deposit to such subaccounts unless an amount has been withdrawn from the General Account as a result of a deficiency in a related Debt Service Fund and such withdrawal has not been repaid or, as of the most recent valuation of the Reserve Fund, the amount therein was valued at less than the Required Reserve and the deficiency has not yet been restored, in either of which events the earnings shall be retained in the Reserve Fund until the deficiency therein has been eliminated.

All money remaining in the General Account related to the 2016 Bonds on the final Payment Date, in excess of the amount required to make provisions for the payment in full of the interest and/or the principal of the 2016 Bonds and the amount required to be held by any Supplemental Indenture shall be transferred to the Authority for deposit in the Airport Revenue Fund. See “APPENDIX C – SUMMARIES OF THE MASTER INDENTURE AND FIRST SUPPLEMENTAL INDENTURE.”

The 2016 Bond Reserve Surety Bond

Assured Guaranty Municipal Corp. (“AGM”) has committed to issue a surety bond in the amount of $[______] (the “2016 Bond Reserve Surety Bond”) pursuant to which, upon notice from the Trustee to AGM to the effect that insufficient amounts are on deposit in the principal and interest funds for the applicable series of 2016 Bonds after drawing upon and depleting any cash balance in the General Account to fund the principal and interest on a pro rata basis on any Bonds secured by the General Account, AGM will promptly deposit with the Trustee an amount sufficient to pay the principal and interest on the 2016 Bonds or the available amount of the 2016 Bond Reserve Surety Bond, as applicable, whichever is less. Upon the later of (i) the business day following the business day on which AGM receives a demand for payment in a form acceptable to AGM; or (ii) the payment date

of the applicable series or 2016 Bonds as specified in the demand for payment presented by the Trustee to AGM, AGM will make a deposit of funds in an account with U.S. Bank Trust National Association, in New York, New York, or its successor, sufficient for the payment to the Trustee of amounts which are then due to the Trustee (as specified in the demand for payment) subject to the 2016 Bond Reserve Surety Bond.

The available amount of the 2016 Bond Reserve Surety Bond will be the initial face amount of the 2016 Bond Reserve Surety Bond ($[______]) less the amount of any previous deposits by AGM with the Trustee which have not been reimbursed by the Authority. The Authority will be required to reimburse AGM the amount of such deposit made by AGM with the Trustee under the 2016 Bond Reserve Surety Bond, plus expenses and interest. Such reimbursement shall be made only as set forth above under “ Flow of Funds.” The Authority’s repayment obligation to the provider of the 2016 Bond Reserve Surety Bond will be afforded the status of a Bond under the Indenture and will be payable from Net Pledged Revenues on a parity with the 2016 Bonds and any Additional Bonds. See “APPENDIX C —– SUMMARIES OF THE MASTER INDENTURE AND FIRST SUPPLEMENTAL INDENTURE —– Repayment Obligations Afforded Status of Bonds.”

See “THE BOND INSURANCE POLICY AND THE BOND INSURER” and “APPENDIX C – SUMMARIES OF THE MASTER INDENTURE AND THE FIRST SUPPLEMENTAL INDENTURE.”

Rights of the 2016 Bond Insurer

The payment when due of the principal of and interest on the 2016 Bonds will be insured by the 2016 Municipal Bond Insurance Policy. See “THE BOND INSURANCE POLICY AND THE BOND INSURER” below. The First Supplemental Indenture will provide that the 2016 Bond Insurer shall be deemed to be the sole holder of the Insured Bonds (as defined herein) for the purpose of exercising any voting right or privilege or giving any consent or direction or taking any other action that the holders of the Insured Bonds are entitled to take pursuant to the Indenture pertaining to (i) defaults and remedies, and (ii) the duties and obligations of the Trustee. In addition, (a) any amendment, supplement, modification to or wavier of the Indenture that requires the consent of the Holders of the Insured Bonds or adversely affects the rights and interests of the 2016 Bond Insurer shall be subject to the written consent of the 2016 Bond Insurer, (b) if acceleration is permitted pursuant to the Indenture, the Insured Bonds will not be accelerated without the consent of the 2016 Bond Insurer and (c) no grace period for a covenant default by the Authority may exceed thirty (30) days or be extended for more than sixty (60) days without the prior written consent of the 2016 Bond Insurer. The First Supplemental Indenture will also include certain covenants of the Authority in favor of the 2016 Bond Insurer. See “THE BOND INSURANCE POLICY AND THE BOND INSURER” for further information regarding the 2016 Bond Insurer.

Additional Bonds

Subject to satisfaction of certain requirements pursuant to the Master Indenture, Additional Bonds may be issued under the Master Indenture on a parity with the 2016 Bonds. Such requirements include, among other things, a requirement that there is delivered to the Trustee either:

(a) a certificate prepared by an Authorized Authority Representative showing that Net Pledged Revenues for any 12 consecutive months out of the most recent 18 consecutive months preceding the date of issuance of the proposed Series of Bonds or preceding the first issuance of the proposed Program Bonds were at least equal to 125% of Maximum Aggregate Annual Debt Service calculated as if the proposed Series of Bonds and the full Authorized Amount of such proposed Program Bonds (as applicable) were then Outstanding; or

(b) a certificate dated as of a date between the date of pricing of the Bonds being issued and the date of delivery of such Bonds, prepared by a Consultant showing that:

(i) the Net Pledged Revenues (as calculated by said Consultant) for any 12 consecutive months out of the 24 consecutive months immediately preceding the date of issuance of the proposed Series of Bonds or the establishment of a Program were at least equal to 125% of Maximum Aggregate Annual Debt Service;

(ii) for each Fiscal Year during the period from the date of delivery of such certificate until the latest Estimated Completion Date, as certified to the Consultant by an Authorized Authority Representative, the Consultant estimates that the Authority will be in compliance with the rate covenant under the Indenture; and

(iii) the estimated Net Pledged Revenues for each of the three complete Fiscal Years immediately following the last Estimated Completion Date, as certified to the Consultant by an Authorized Authority Representative, will be at least equal to 125% of Maximum Aggregate Annual Debt Service calculated as if the proposed Series of Bonds and the full Authorized Amount of such proposed Program Bonds (if applicable) were then Outstanding.

Neither of the certificates described above will be required for the 2016 Bonds or if:

(a) the Additional Bonds being issued are for the purpose of refunding then Outstanding Bonds and there is delivered to the Trustee, instead, a certificate of an Authorized Authority Representative showing that Maximum Aggregate Annual Debt Service after the issuance of the refunding Additional Bonds will not exceed Maximum Aggregate Annual Debt Service prior to the issuance of such refunding Additional Bonds; or

(b) the Additional Bonds being issued constitute Notes and there is delivered to the Trustee, instead, a certificate prepared by an Authorized Authority Representative showing that the principal amount of the proposed Notes being issued, together with the principal amount of any Notes then Outstanding, does not exceed 10% of the Pledged Revenues for any 12 consecutive months out of the 18 months immediately preceding the issuance of the proposed Notes, and there is delivered to the Trustee a Certificate of an Authorized Authority Representative showing that for each of the Fiscal Years during which the Notes will be Outstanding and taking into account the debt service becoming due on such Notes, the Authority will be in compliance with the rate covenant under the Indenture; or

(c) the Additional Bonds being issued are for the purpose of providing funds for the completion of a Specified Ontario Project for which Bonds have previously been issued, provided that such new Bonds would not exceed 10% of the aggregate principal amount of such previously issued Bonds. Only one Series of Bonds may be issued in respect of any Project pursuant to this paragraph.

The Authority will covenant in the Master Indenture that so long as any Bonds are Outstanding, it will not issue any additional bonds or other obligations with a lien on or security interest granted in Net Pledged Revenues which is senior to the Bonds. The Authority may issue Ontario Special Facility Obligations. See “DEBT SERVICE SCHEDULE AND OTHER OBLIGATIONS – Other Obligations.” In addition, the Authority’s repayment obligation to Credit Providers and Liquidity Providers (including the provider of the 2016 Bond Reserve Surety Bond and the 2016 Bond Insurer) that make payments of principal of or interest on a Bond or advance funds to purchase or provide for the purchase of Bonds will be afforded the status of a Bond under the Indenture and will be payable from Net Pledged Revenues on a parity with the 2016 Bonds and any Additional Bonds. See “APPENDIX C —– SUMMARIES OF THE MASTER INDENTURE AND FIRST SUPPLEMENTAL INDENTURE —– Repayment Obligations Afforded Status of Bonds.”

The Indenture also permits the Authority to issue or incur indebtedness that is subordinated to the Bonds as to payment from Net Pledged Revenues. The Authority will covenant in the Master Indenture that, in the event and to the extent that the Authority determines to make Settlement Payments from Net Pledged Revenues, any such payment of Settlement Payments shall be made on a subordinate basis to the 2016 Bonds as to payment from Net Pledged Revenues, and then only to the extent that the Authority would have remaining Net Pledged Revenues in its then-current Fiscal Year equal to at least 100% of the actual debt service and other obligations yet to become due and payable on the outstanding 2016 Bonds in such Fiscal Year. The Authority will further covenant that, prior to the payment in full of the Settlement Payments, the Authority shall not issue Additional Bonds under the Indenture, and any Subordinated Obligations issued under the Indenture shall be subordinate to the payment of Settlement Payments as to payment from Net Pledged Revenues.

17 Permitted Investments

Moneys held by the Trustee under the Indenture, including moneys in the Debt Service Fund and Reserve Fund (and the accounts therein), may be invested as directed by the Authority in Permitted Investments, subject to the restrictions set forth in the Indenture and subject to restrictions imposed upon the Authority by the Joint Powers Act. See “FINANCIAL AND OPERATING INFORMATION CONCERNING ONT.”

Events of Default and Remedies; No Acceleration

Events of Default under the Indenture and related remedies are described in the summary of certain provisions of the Indenture attached as APPENDIX C. The occurrence of an Event of Default does not grant any right to accelerate payment of the 2016 Bonds to either the Trustee or the holders of the Bonds. The Trustee is authorized to take certain actions upon the occurrence of an Event of Default, including proceedings to enforce the obligations of the Authority under the Indenture.

DEBT SERVICE REQUIREMENTS

The following table sets forth debt service requirements on the 2016 Bonds:

TABLE 1 ONTARIO INTERNATIONAL AIRPORT DEBT SERVICE REQUIREMENTS

Principal Interest Total Debt Service Fiscal Requirements Requirements Requirements on Year on 2016 Bonds on 2016 Bonds 2016 Bonds 2017 $ $ $ 2018 2019 2020 2021 2022 2023 2024 2025 2026

Total $ $ $

Source: Ontario International Airport Authority

BOND INSURANCE

AGM has provided the following information for inclusion in this Official Statement. No representation is made by the Authority or the Underwriter as to the accuracy or completeness of this information.

Bond Insurance Policy

Concurrently with the issuance of the 2016 Bonds, Assured Guaranty Municipal Corp. (“AGM”) will issue its Municipal Bond Insurance Policy (the “Policy”) for the 2016 Bonds maturing on May 15 of the years 20__ through 20__, inclusive (the “Insured Bonds”). The Policy guarantees the scheduled payment of principal of and interest on the Insured Bonds when due as set forth in the form of the Policy included as Appendix G to this Official Statement.

The Policy is not covered by any insurance security or guaranty fund established under New York, California, Connecticut or Florida insurance law.

Assured Guaranty Municipal Corp.

AGM is a New York domiciled financial guaranty insurance company and an indirect subsidiary of Assured Guaranty Ltd. (“AGL”), a Bermuda-based holding company whose shares are publicly traded and are listed on the New York Stock Exchange under the symbol “AGO.” AGL, through its operating subsidiaries, provides credit enhancement products to the U.S. and global public finance, infrastructure and structured finance markets. Neither AGL nor any of its shareholders or affiliates, other than AGM, is obligated to pay any debts of AGM or any claims under any insurance policy issued by AGM.

AGM’s financial strength is rated “AA” (stable outlook) by S&P Global Ratings, a business unit of Standard & Poor’s Financial Services LLC (“S&P”), “AA+” (stable outlook) by Kroll Bond Rating Agency, Inc. (“KBRA”) and “A2” (stable outlook) by Moody’s Investors Service, Inc. (“Moody’s”). Each rating of AGM should be evaluated independently. An explanation of the significance of the above ratings may be obtained from the applicable rating agency. The above ratings are not recommendations to buy, sell or hold any security, and such ratings are subject to revision or withdrawal at any time by the rating agencies, including withdrawal initiated at the request of AGM in its sole discretion. In addition, the rating agencies may at any time change AGM’s long-term rating outlooks or place such ratings on a watch list for possible downgrade in the near term. Any downward revision or withdrawal of any of the above ratings, the assignment of a negative outlook to such ratings or the placement of such ratings on a negative watch list may have an adverse effect on the market price of any security guaranteed by AGM. AGM only guarantees scheduled principal and scheduled interest payments payable by the issuer of bonds insured by AGM on the date(s) when such amounts were initially scheduled to become due and payable (subject to and in accordance with the terms of the relevant insurance policy), and does not guarantee the market price or liquidity of the securities it insures, nor does it guarantee that the ratings on such securities will not be revised or withdrawn.

Current Financial Strength Ratings

On July 27, 2016, S&P issued a credit rating report in which it affirmed AGM’s financial strength rating of “AA” (stable outlook). AGM can give no assurance as to any further ratings action that S&P may take.

On August 8, 2016, Moody’s published a credit opinion affirming its existing insurance financial strength rating of “A2” (stable outlook) on AGM. AGM can give no assurance as to any further ratings action that Moody’s may take.

On December 10, 2015, KBRA issued a financial guaranty surveillance report in which it affirmed AGM’s insurance financial strength rating of “AA+” (stable outlook). AGM can give no assurance as to any further ratings action that KBRA may take.

For more information regarding AGM’s financial strength ratings and the risks relating thereto, see AGL’s Annual Report on Form 10-K for the fiscal year ended December 31, 2015.

Capitalization of AGM

At June 30, 2016, AGM’s policyholders’ surplus and contingency reserve were approximately $3,841 million and its net unearned premium reserve was approximately $1,459 million. Such amounts represent the combined surplus, contingency reserve and net unearned premium reserve of AGM, AGM’s wholly owned subsidiary Assured Guaranty (Europe) Ltd. and 60.7% of AGM’s indirect subsidiary Municipal Assurance Corp.; each amount of surplus, contingency reserve and net unearned premium reserve for each company was determined in accordance with statutory accounting principles.

Incorporation of Certain Documents by Reference

Portions of the following documents filed by AGL with the Securities and Exchange Commission (the “SEC”) that relate to AGM are incorporated by reference into this Official Statement and shall be deemed to be a part hereof:

(i) the Annual Report on Form 10-K for the fiscal year ended December 31, 2015 (filed by AGL with the SEC on February 26, 2016);

(ii) the Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2016 (filed by AGL with the SEC on May 5, 2016); and

(iii) the Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2016 (filed by AGL with the SEC on August 4, 2016).

All consolidated financial statements of AGM and all other information relating to AGM included in, or as exhibits to, documents filed by AGL with the SEC pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, excluding Current Reports or portions thereof “furnished” under Item 2.02 or Item 7.01 of Form 8-K, after the filing of the last document referred to above and before the termination of the offering of the 2016 Bonds shall be deemed incorporated by reference into this Official Statement and to be a part hereof from the respective dates of filing such documents. Copies of materials incorporated by reference are available over the internet at the SEC’s website at http://www.sec.gov, at AGL’s website at http://www.assuredguaranty.com, or will be provided upon request to Assured Guaranty Municipal Corp.: 1633 Broadway, New York, New York 10019, Attention: Communications Department (telephone (212) 974-0100). Except for the information referred to above, no information available on or through AGL’s website shall be deemed to be part of or incorporated in this Official Statement.

Any information regarding AGM included herein under the caption “BOND INSURANCE – Assured Guaranty Municipal Corp.” or included in a document incorporated by reference herein (collectively, the “AGM Information”) shall be modified or superseded to the extent that any subsequently included AGM Information (either directly or through incorporation by reference) modifies or supersedes such previously included AGM Information. Any AGM Information so modified or superseded shall not constitute a part of this Official Statement, except as so modified or superseded.

Miscellaneous Matters

AGM makes no representation regarding the 2016 Bonds or the advisability of investing in the 2016 Bonds. In addition, AGM has not independently verified, makes no representation regarding, and does not accept any responsibility for the accuracy or completeness of this Official Statement or any information or disclosure contained herein, or omitted herefrom, other than with respect to the accuracy of the information regarding AGM supplied by AGM and presented under the heading “BOND INSURANCE.”

SOURCES OF INFORMATION

The Department has not participated in the preparation of this Official Statement, and historical financial and operating information of ONT presented in this Official Statement has generally been obtained from publicly- available sources, including the audited financial statements of LAWA and continuing disclosure materials publicly released by the Department on LAWA’s website at www.lawa.org. In connection with the transfer of ownership and control of ONT from the Department to the Authority, and pursuant to the requirements of the Settlement Agreement, the Department has also provided certain additional information to the Authority about the operations and financial status of ONT (including certain unaudited financial results for Fiscal Year 2016, as referenced in this Official Statement), certain of which information is included in this Official Statement. Neither the Department, nor LAWA, nor the City of Los Angeles is responsible for information set forth in this Official Statement.

REPORT OF THE AIRPORT CONSULTANT

The Report of the Airport Consultant dated October 11, 2016 is attached to this Official Statement as Appendix A. The Report of the Airport Consultant evaluates the ability of the Authority to produce Net Pledged Revenues sufficient to meet the requirements of the rate covenant during the projection period (Fiscal Year 2018 through Fiscal Year 2022), taking into account estimated Annual Debt Service requirements and based on the assumptions set forth in the Report of the Airport Consultant. Certain information in this Official Statement has been excerpted from the Report of the Airport Consultant. The Report of the Airport Consultant includes the forecast of aviation activity set forth in the Aviation Activity Forecast attached to this Official Statement as Appendix B.

Any forecast is subject to uncertainties. Therefore, there may be differences between forecast and actual results, and those differences may be material. Furthermore, the findings and projections in the Report of the Airport Consultant are subject to a number of other assumptions that should be reviewed and considered by prospective investors. No assurances can be given that the findings and projections discussed in the Report of the Airport Consultant will be achieved. The Report of the Airport Consultant has not been and will not be updated to reflect the final pricing terms of the 2016 Bonds or other changes that may have occurred after the date of such report. Actual results may be materially adversely different from those described in such report. The Report of the Airport Consultant should be read in its entirety for an understanding of the forecasts, findings and projections, and the underlying assumptions.

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Debt Service Coverage

The following table, which is excerpted from the Report of the Airport Consultant, presents a summary of historical and projected debt service coverage for the Fiscal Years from 2013 through 2022. Although the historical debt service coverage shown on the chart was calculated under the 2006 LAWA Indenture and projected debt service coverage will be calculated under the Indenture, the applicable provisions of both indentures are substantially the same.

TABLE 2 ONTARIO INTERNATIONAL AIRPORT DEBT SERVICE COVERAGE

Debt Service Net Pledged Requirement Debt Service Revenues (000’s) (000’s) Coverage Historical 2013 $10,594 $7,015 1.51x 2014 $10,653 $7,043 1.51x 2015 $10,555 $7,047 1.50x 2016 (Unaudited) $10,532 $7,073 1.49x 2017 (Budget) $9,972 $6,214 1.60x Projected 2018 $15,293(1) $6,238 2.45x 2019 $16,456 $6,260 2.63x 2020 $16,474 $6,275 2.63x 2021 $16,488 $6,307 2.61x 2022 $16,530 $6,339 2.61x

(1) Increase in Net Pledged Revenues in Fiscal Year 2018 over Fiscal Year 2017 is primarily due to a projected increase in ONT’s Capital Improvement Program funding received from the airlines. For a discussion of sensitivities related to such projection, see “EXHIBIT A — REPORT OF THE AIRPORT CONSULTANT — Financial Analysis — 3.12 Sensitivity Test.” and related Table 3-11.

Source: Report of the Airport Consultant

ONTARIO INTERNATIONAL AIRPORT AUTHORITY

Organization and Powers

The Authority was created in August 2012 for the sole purpose of owning and operating ONT pursuant to the Joint Powers Agreement between the City and the County. Under the Joint Powers Agreement and the Joint Powers Act, the Authority has the powers common to the City and the County to operate, maintain, manage, develop and market ONT, subject only the restrictions upon the manner of exercising such powers as are imposed upon the City in the exercise of similar powers. Although the Authority has the authority under the ULAs and its rules and regulations to establish rates and charges, and also has the ability under legislation to impose PFCs (subject to the restrictions contained in such legislation) and, subject to applicable requirements, has the ability to impose CFCs, the Authority does not have the power to impose taxes.

Commission Members

The Authority is governed by a five-member Commission comprised of four members appointed by the City and one member appointed by the County. Members appointed by the City must consist of two members of the business community with their primary business interest located within the market service area of ONT and two members then serving as members of the City Council. The member appointed by the County must be the

Supervisor of the San Bernardino County Board of Supervisors representing the supervisorial district in which ONT is located. Members shall serve during the term for which they were appointed and until their successors have been appointed and qualified; provided, however, that members may resign voluntarily or, if applicable, may be removed by and at the pleasure of the party that appointed them, and provided, further, any member who also serves as a member of the governing body of any party shall automatically forfeit such member’s membership on the Commission if such member ceases to be member of the governing body, but after such forfeiture, such member may be appointed or reappointed to the Commission.

As of the date hereof, the members of the Commission are:

Member Affiliation Appointed By Date of Appointment Alan Wapner, President Ontario Council City August 2012 Member Ron Loveridge, Vice President Retired Riverside City August 2012 Mayor Lucy Dunn, Secretary OC Business City September 2012 Council President and CEO Jim Bowman Ontario Council City August 2012 Member Curt Hagman San Bernardino County January 2015 County Supervisor

Authority Management

Responsibility for the implementation of the policies formulated by the Commission and for the day-to-day operations of ONT rests with the senior management of the Authority. The Chief Executive Officer, under the direction of the Commission, is empowered to appoint and remove the senior managers who direct the major functions of the Authority. The principal senior managers of the Authority are listed below:

Kelly J. Fredericks, Chief Executive Officer. Mr. Fredericks joined the Authority in March 2016 after serving as President and Chief Executive Officer of the Rhode Island Airport Corporation (“RIAC”), the operator of a six-airport system consisting of a medium-hub airport (T.F. Green), two non-hub primary commercial airports (Westerly State and Block Island), a joint use military facility (Quonset State) and two corporate/general aviation facilities (North Central State and Newport State).

Mr. Fredericks has 33 years of aviation-related industry experience. He has served in senior leadership roles in the management of large, medium, small and non-hub airports, as well as overseeing the planning, design and construction of billions of dollars of airport development projects as an aviation consultant. He is an Accredited Airport Executive by the American Association of Airport Executives, a Professional Engineer and a private pilot. He serves on the Board of Directors of Airports Council International - North America, and is a Regional Director and Board Member of the National Association of State Aviation Officials.

Before joining RIAC, Mr. Fredericks served a Senior Vice President of the Corradino Group, leading efforts as Program Manager for the design and construction of a multi-billion dollar airport expansion program at Ft. Lauderdale-Hollywood International Airport. He also served as the Executive Director/CEO at Erie International Airport, Tom Ridge Field from 1999 to 2008; Deputy Aviation Director/COO at Pittsburgh International Airport from 1996 to 1999; and Manager of the State-Owned Airports/Improvements at Harrisburg International Airport from 1980 to 1993. He graduated from Pennsylvania State University in 1983 with a B.S. in Civil Engineering.

Jeff Reynolds, Chief Financial Officer. Mr. Reynolds joined the Authority in August, 2016, bringing with him over twenty years of experience in U.S. and international airport management, public private partnerships, business development, reporting and underwriting.

Mr. Reynolds most recently served as an aviation financial analyst, prior to which he was President and CEO of HAS Development Corp. (“HAS”), a non-profit Houston-based corporation specializing in training, technical services consulting and advisory services in the airport and aviation sectors. Prior to his position at HAS, Mr. Reynolds was vice president of assets and acquisitions for the Abu Dhabi Airports Company, which manages five airports in the United Arab Emirates. Mr. Reynolds earned a Masters of Business Administration from USC in 1985 and a Bachelor of Arts degree from UCLA in 1979.

Bruce Atlas, Chief Operating Officer. Mr. Atlas joined the Authority in August 2016 and brings 18 years of aviation experience and a comprehensive knowledge of ONT.

Mr. Atlas worked for Southwest Airlines from 1998 to August 2016, most recently as Southwest’s ONT station manager for the past 12 years. Prior to that, Mr. Atlas was the deputy station manager for Southwest at LAX and during this period, the station was highly awarded, including winning the company’s “Station of the Year”, “Top Performing Station” and other honors. Mr. Atlas’s expertise includes airport station management, ground handling, administration, security/safety operations, infrastructure management and customer service. His strong business skills include meeting budget goals and key performance indicators, organizational development, team leadership and strong interpersonal skills.

Mark Thorpe, Chief Development Officer. Mr. Thorpe joined the Authority in September 2016, with over 17 years of professional aviation experience.

Mr. Thorpe worked for more than four years with Dallas/Fort Worth International Airport (“DFW”). As assistant vice president for air service development, he conceived and executed DFW’s passenger and cargo air service development strategy and prompted American Airlines to establish DFW as its primary gateway between Asia and Latin America. He was also appointed to lead DFW’s newly created Cargo/Logistics Business Development division. Prior to DFW, Mr. Thorpe was director of air service development for LAWA, where he successfully recruited four new airlines to ONT 2003-2007, which was a period of substantial growth at ONT. Mr. Thorpe received his juris doctorate and master of business administration degrees in 1998 from George Washington University, with a magna cum laude distinction from the business school, and earned a Bachelor of Arts from Arizona State University in 1995.

Daniel Adamus, Chief Marketing Officer. Mr. Adamus joined the Authority in September 2016 with 27 years of executive experience.

Mr. Adamus has decades of experience in domestic and international marketing, public affairs, advertising, strategic planning and product and organizational development, including with organizations such as Great Lakes Case & Cabinet, the United States Marine Corps, GE Plastics, a regional marketing firm, and his own consulting business. Mr. Adamus received his MBA from Rensselaer Polytechnic Institute (Troy, NY) in 1993 and graduated from the U.S. Naval Academy with a double major in engineering and history in 1984.

Staffing Plan

During the 21-month Transition Period following the Transfer Date, LAWA will provide staffing for ONT pursuant to the Staff Augmentation Agreement. See “TRANSFER OF OPERATIONS AND MANAGEMENT OF ONTARIO INTERNATIONAL AIRPORT—Staff Augmentation Agreement” herein. During that period, the Authority will have the ability to hire additional employees to replace any departing employees of LAWA or to supplement the staff provided by LAWA.

During the Transition Period, the Authority intends to determine the optimum organizational structure for purposes of its long-term staffing plans. The Authority currently contemplates that its long-term staffing will include both Authority employees and contractor personnel. In particular, the Authority currently envisions that its employees will be responsible for critical operations and safety functions pertaining to ONT’s Part 139 Certificate, while private-sector contractors would undertake to perform custodial, grounds keeping and terminal maintenance functions. The Authority has retained the firm of Koff & Associates to perform an employee compensation and benefits study in order to assist the Authority in structuring employment terms for prospective employees of the

Authority. Projections of Maintenance and Operation Expenses included in the Report of the Airport Consultant project a reduction in staffing costs following the Transition Period as a result of the Authority’s staffing optimization efforts.

In addition, during the first six to nine months of the Transition Period, the Authority intends to determine its staffing plans for police and ARFF services following the Transaction Period. Police and ARFF services may be contracted to public safety agencies such as the City Police Department and the City Fire Department using personnel trained and certified in accordance with the applicable FAA and TSA regulations. Any proposed contract for police or ARFF services would require an amendment to the Airport Certification Manual and the prior approval of the FAA.

ONTARIO INTERNATIONAL AIRPORT

Introduction

ONT is classified by the FAA as a medium-hub full-service airport with commercial jet service to many major cities in the United States. ONT is located approximately 35 miles east of downtown Los Angeles and occupies approximately 1,700 acres.

ONT was developed prior to World War II, and following the war, with the support of the City of Los Angeles, the City acquired ONT as surplus Federal property from the U.S. War Assets Administration. In October 1967 the City of Los Angeles and the City entered into a Joint Powers Agreement whereby the Department would manage, operate and control ONT, and in July 1985, the City of Los Angeles became the owner of ONT. Pursuant to the Settlement Agreement, the Department will transfer ownership and control of the operations and management of ONT to the Authority on the Transfer Date.

The existing terminal facilities at ONT consist of two domestic terminals with a combined total of 570,000 square feet and 26 passenger gates, as well as nine aircraft parking positions at the International Arrivals Terminal. The airfield is equipped with two parallel runways with lengths of 10,200 feet and 12,200 feet. ONT’s facilities also include six parking lots, of which three are currently operational, providing 5,591 surface parking spaces, and a 15,000 square foot consolidated rental car facility (“CONRAC”). Other existing facilities at ONT include air freight buildings, various airport and aircraft support services, and administration facilities.

The majority of ONT’s originating passengers live in the counties of Riverside and San Bernardino, and other passengers may be drawn from the surrounding Los Angeles, Ventura, and Orange counties. In Fiscal Year 2016, ONT served approximately 2.1 million enplaned passengers. As of September 2016, five U.S. passenger carriers and two foreign flag carriers provided passenger service to ONT. In addition, seven all-cargo carriers served ONT, including Federal Express (“FedEx”) and United Parcel Service (“UPS”), the world’s leading all-cargo carriers by volume. UPS maintains a regional hub at ONT, serving customers throughout the western United States, Hawaii, and Alaska, and sorting and distributing the majority of UPS packages destined for the Pacific Rim. For further information regarding passenger volumes and services provided at ONT, including forecasts related thereto, see “APPENDIX A – REPORT OF THE AIRPORT CONSULTANT.”

Aviation Activity

According to statistics collected by ACI for calendar year 2015, ONT was the 58th busiest airport in the United States in terms of total passenger volume with approximately 4.2 million enplaned and deplaned passengers. In the five-county Los Angeles metropolitan region, ONT is the third-busiest of the five commercial airports located in the region. The following table shows the total passenger volumes and percentage shares of passenger traffic for ONT as well as the four other airports in the Los Angeles region.

TABLE 3 ONTARIO INTERNATIONAL AIRPORT HISTORICAL ENPLANED PASSENGER MARKET SHARE IN THE LOS ANGELES REGION

Fiscal Enplaned Passengers Share of Los Angeles Region Airports Year1 Los Angeles John Wayne Burbank Bob Long Beach International Airport Hope Airport Airport (LAX) (SNA) ONT (BUR) (LGB) LAX SNA ONT BUR LGB 2005 30,548,251 4,770,223 3,517,228 2,562,791 1,520,918 71.2% 11.1% 8.2% 6.0% 3.5% 2006 30,655,146 4,808,643 3,604,920 2,840,085 1,412,636 70.8% 11.1% 8.3% 6.6% 3.3% 2007 30,803,470 4,956,525 3,532,937 2,892,051 1,446,120 70.6% 11.4% 8.1% 6.6% 3.3% 2008 31,142,339 4,780,487 3,548,882 2,919,311 1,439,598 71.1% 10.9% 8.1% 6.7% 3.3% 2009 28,328,978 4,269,395 2,631,192 2,413,006 1,466,499 72.4% 10.9% 6.7% 6.2% 3.7% 2010 29,003,142 4,391,439 2,417,085 2,261,143 1,460,041 73.4% 11.1% 6.1% 5.7% 3.7% 2011 30,280,539 4,282,816 2,367,120 2,181,852 1,532,442 74.5% 10.5% 5.8% 5.4% 3.8% 2012 31,519,124 4,309,464 2,209,070 2,092,805 1,643,383 75.5% 10.3% 5.3% 5.0% 3.9% 2013 32,524,178 4,547,598 2,076,333 2,062,601 1,497,503 76.2% 10.6% 4.9% 4.8% 3.5% 2014 34,333,538 4,642,948 2,002,759 1,949,065 1,433,273 77.4% 10.5% 4.5% 4.4% 3.2% 2015 36,114,324 4,792,579 2,085,482 1,953,558 1,276,679 78.1% 10.4% 4.5% 4.2% 2.8%

Compound Annual

Growth Rate 2005-2015 1.7% 0.05% -5.1% -2.7% -1.7% 2007-2014 1.6% -0.9% -7.8% -5.5% -0.1%

1 LGB’s fiscal year ends September 30. The remaining airports’ fiscal years end June 30.

Source: Report of the Airport Consultant

ONT primarily serves as an originating or destination airport for passenger traffic rather than as an airline connecting hub. Approximately 95% of the passenger traffic at ONT in Fiscal Year 2015 consisted of passengers beginning a trip from the Ontario area or returning to Ontario as their final destination.

The following table presents historical enplaned passenger volumes at ONT for Fiscal Years 2005 through 2016, and ONT’s share of total U.S. domestic enplanements during such period.

TABLE 4 ONTARIO INTERNATIONAL AIRPORT HISTORICAL ENPLANED PASSENGERS

ONT U.S. Domestic ONT Share of Fiscal Year Enplanements % Change Enplanements % Change U.S. Traffic 2005 3,517,228 -- 669,500,000 -- 0.525% 2006 3,604,920 2.5% 668,400,000 -0.2% 0.539% 2007 3,532,937 -2.0% 688,500,000 3.0% 0.513% 2008 3,548,882 0.5% 681,000,000 -1.1% 0.521% 2009 2,631,192 -25.9% 631,000,000 -7.3% 0.417% 2010 2,417,085 -8.1% 635,000,000 0.6% 0.381% 2011 2,367,120 -2.1% 650,000,000 2.4% 0.364% 2012 2,209,070 -6.7% 654,000,000 0.6% 0.338% 2013 2,076,333 -6.0% 654,000,000 0.0% 0.317% 2014 2,002,759 -3.5% 669,000,000 2.3% 0.299% 2015 2,085,482 4.1% 696,000,000 4.0% 0.300% 2016 2,108,441 1.1% 726,000,000 4.3% 0.290%

Compound Annual Growth Rate 2005 - 2016 -4.5% 0.7%

Source: Report of the Airport Consultant

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Passenger Enplanements and Airline Market Shares

The following table shows historical enplanements by airline at ONT for Fiscal Years 2012 through 2016.

TABLE 5 ONTARIO INTERNATIONAL AIRPORT HISTORICAL ENPLANED PASSENGERS BY AIRLINE

Airline FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 Enplanements Share Enplanements Share Enplanements Share Enplanements Share Enplanements Share Southwest 1,168,315 52.9% 1,151,530 55.5% 1,151,948 57.5% 1,191,577 57.1% 1,181,669 56.0% American1 383,782 17.4% 376,238 18.1% 380,897 19.0% 416,282 20.0% 418,832 19.9% United2 208,164 9.4% 205,363 9.9% 164,670 8.2% 166,639 8.0% 180,005 8.5% Alaska3 183,525 8.3% 185,924 9.0% 177,156 8.8% 166,551 8.0% 168,212 8.0% Delta 3 141,135 6.4% 113,439 5.5% 89,025 4.4% 82,722 4.0% 83,977 4.0% Skywest4 83,911 3.8% 0 0.0% 0 0.0% 0 0.0% 0 0.0% Others5 40,238 1.8% 43,839 2.1% 39,063 2.0% 61,711 3.0% 75,746 3.6% Total 2,209,070 100.0% 2,076,333 100.0% 2,002,759 100.0% 2,085,482 100.0% 2,108,441 100.0%

1 Includes US Airways and regional affiliates. 2 Includes Continental Airlines and regional affiliates. 3 Includes regional affiliates 4 Beginning in Fiscal Year 2013, Skywest data was reported under Alaska, Delta, and United. Fiscal Year 2012 data were not reclassified. 5 Consists of airlines no longer serving ONT and charter airlines.

Source: Report of the Airport Consultant Columns may not add to totals shown because of rounding.

The following table presents historical landed weight by airline at ONT for Fiscal Years 2012 through 2016:

TABLE 6 ONTARIO INTERNATIONAL AIRPORT HISTORICAL LANDED WEIGHT BY AIRLINE (in Thousand Pounds)

Airline FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 Landed Landed Landed Landed Landed Weight Share Weight Share Weight Share Weight Share Weight Share UPS 1,699,558 33.4% 1,698,421 34.7% 1,701,834 36.4% 1,789,288 38.1% 2,026,609 39.0% Southwest 1,559,950 30.7% 1,484,052 30.3% 1,394,440 29.8% 1,337,470 28.5% 1,346,748 25.9% FedEx 587,865 11.6% 601,544 12.3% 574,750 12.3% 549,292 11.7% 672,167 12.9% American1 454,214 8.9% 439,699 9.0% 428,932 9.2% 438,719 9.4% 452,175 8.7% Alaska2 182,482 3.6% 179,440 3.7% 185,999 4.0% 175,253 3.7% 175,341 3.4% United3 312,870 6.2% 252,714 5.2% 176,581 3.8% 171,387 3.7% 184,738 3.6% Delta2 160,626 3.2% 130,733 2.7% 98,846 2.1% 94,451 2.0% 95,993 1.8% Skywest4 19,446 0.4% 0 0.0% 0 0.0% 0 0.0% 0 0.0% Others5 106,033 2.1% 114,452 2.3% 114,258 2.4% 135,582 2.9% 244,372 4.7% Total 5,083,044 100% 4,901,055 100% 4,675,640 100% 4,691,442 100% 5,198,143 100%

1 Includes US Airways and regional affiliates. 2 Includes regional affiliates. 3 Includes Continental and regional affiliates. 4 Beginning in Fiscal Year 2013, Skywest data was reported under Alaska, Delta, and United. Fiscal Year 2012 data were not reclassified. 5 Consists of all-cargo carriers not listed, airlines no longer serving ONT, and charter airlines.

Source: Report of the Airport Consultant Columns may not add to totals shown because of rounding.

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Air Cargo

In calendar year 2015, according to Airports Council International (“ACI”), ONT ranked 15th in the United States in air cargo volume. The following table provides information concerning cargo traffic data at ONT over the last ten Fiscal Years.

TABLE 7 ONTARIO INTERNATIONAL AIRPORT HISTORICAL CARGO TRAFFIC DATA AIR CARGO ON AND OFF (METRIC TONS) (1)

Total Cargo Fiscal Year Total Freight Total Mail Total Cargo(2) % Change 2007 530,380 19,243 549,623 -- 2008 494,193 12,829 507,022 (7.8%) 2009 417,355 17,124 434,479 (14.3%) 2010 371,772 18,964 390,736 (10.1%) 2011 374,581 16,666 391,247 0.1% 2012 429,571 17,659 447,230 14.3% 2013 436,788 18,297 455,085 1.8% 2014 454,114 15,290 469,405 3.1% 2015 462,386 20,962 483,349 3.0% 2016 511,414 26,644 538,058 11.3%

(1) Restated. Certain updates have been made to Fiscal Years 2007-2014 due to reclassifying and correcting entries of cargo traffic data. (2) Totals may not add to total due to rounding

Source: Los Angeles World Airports Annual Financial Information for the Fiscal Year Ended June 30, 2015 For 2016 information, ONT Airline Market Share Summary for July 2015 to June 2016

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Emergency Preparedness

The Authority’s Part 139 Certificate will require that ONT develop and maintain an airport emergency plan. The purpose of this plan is to set forth emergency procedures that are intended to ensure prompt response to all emergencies and unusual conditions in order to minimize the possibility and extent of personal and property damage on ONT property. The Authority has set forth these emergency procedures in the Rules and Regulations for Ontario International Airport. Additional Part 139 Certificate Requirements include the requirement by the FAA that each airport hold full-scale airport emergency plan exercises at least once every three years.

AGREEMENTS FOR USE OF AIRPORT FACILITIES

General

The Authority, as assignee of the Department pursuant to the Settlement Agreement, will be party to and receive payments under different permits and agreements with various airlines and other parties, including operating permits relating to landing fees, leases with various airlines for the leasing of space in terminal buildings, other building and miscellaneous leases regarding the leasing of cargo and hangar facilities, concession agreements relating to the sale of goods and services at ONT, and leases relating to the construction of buildings and facilities for specific tenants.

Operating Use and Terminal Lease Agreements

Operating Use and Terminal Lease Agreements have been entered into by the Department with nine airlines (the “Signatory Airlines”) at ONT, which ULAs will be assigned to the Authority on the Transfer Date, and which permit the airlines to use ONT facilities and to lease terminal space. The nine Signatory Airlines are AeroMexico, Alaska, American, Delta, FedEx, Southwest, United, UPS, and Volaris. Each air carrier serving ONT has the opportunity to become a Signatory Airline. Non-signatory airlines pay a landing fee that is 1.25 times higher and a lease rate that is 1.10 times higher than rates paid by Signatory Airlines. Under the ULAs there are three categories of space leased: exclusive-use space, such as queuing areas, ticket counters, office space, bag service offices and airlines operations space; preferential-use space, such as hold-rooms and gates; and joint-use space, such as baggage claim areas and other specifically identified screening and roadway areas.

Under the ULAs, the Signatory Airlines will pay the Authority terminal rental fees and landing fees. Each of these fees will be calculated on a residual rate-setting methodology, whereby the rental rates and landing fees are calculated to provide revenue in an amount equal to the difference between ONT’s total expenses and the revenues collected from other, non-airline sources, such as concession and parking revenue. Terminal rental rates are determined by totaling the costs attributable to the terminal, including maintenance and operating expenses, Authority debt service and certain deposits to the Authority’s reserve and other Authority discretionary accounts, and any other applicable expenses, then dividing such total by the total space leased to the applicable Signatory Airlines. Terminal rental rates are calculated at least annually. Landing fees are calculated by totaling costs attributable to the airfield, including maintenance and operation expenses, Authority debt service and certain deposits to the Authority’s reserve and other Authority discretionary accounts, and any other applicable expenses. To determine the rates each airline pays for such airfield costs, the total amount of the airfield cost center requirement is divided by the total estimated landed weight of Signatory Airlines. Landing fee rates are calculated at least annually.

Each ULA has a basic term of twenty-five years from October 1, 1999 to September 30, 2024, subject to earlier termination by each airline on October 1, 2019, provided the applicable airline has ceased service at ONT by such date. In certain circumstances the ULAs may be terminated by the Authority prior to the end of their term.

Parking, Concession and Rental Car Agreements

The Authority, as assignee of the Department, will be party to various concession agreements for the management of public parking, rental car operations, food and beverage, news and gifts, public payphones, wireless internet, automated teller machines, and luggage carts at ONT. Each concessionaire has been audited annually by

the Department, and is anticipated to be audited annually by the Authority, to ensure compliance with the concession agreements. The following are brief summaries of certain key concession agreements at ONT.

Parking facility management and operation services, and associated courtesy transportation services with respect to ONT’s three operational parking lots are provided by Parking Concepts, Inc. (“Parking Concepts”) under an agreement effective as of April 4, 2014. The term of the agreement extends for eight years until April 3, 2022, with two one-year extension options, provided that the agreement may be terminated upon payment of a termination payment to Parking Concepts with respect to its unamortized investment at ONT. Notwithstanding such termination right, pursuant to the Staff Augmentation Agreement the Authority will be obligated to retain this agreement for two years following the Transfer Date. Under this agreement, Parking Concepts manages the parking lots, collects parking fees from users of the lots, and transfers such fees to LAWA, in exchange for receiving from LAWA a management fee, payment for its operational expenses, and certain other payments. In connection with amending the Parking Concepts agreement in September 2016, the Los Angeles City Administrative Officer estimated that revenue over the remaining term of the agreement would be approximately $109.7 million with total costs of approximately $60 million.

There are three on-airport rental car concessionaires at ONT operating nine brands at the CONRAC. The three rental car concessionaires operate pursuant to a concession lease and a ground lease, each of which expire February 28, 2019, provided that the Authority will have the right to terminate the concession agreements any time after February 28, 2018. Under the concession agreements, the concessionaire car rental companies pay ground rent as well as a percentage fee calculated at 10% of their respective gross revenue, subject to a minimum annual guarantee. There are also two off-airport car rental companies with current agreements at ONT, each of which pay ONT 9% of their gross revenues, subject to a minimum annual guarantee, and each of which expire January 31, 2017.

There are two food and beverage concession agreements at ONT: one with SSP America (“SSP”), which expires on September 26, 2017, and one with Delaware North Companies Travel Hospitality Services Inc. (“DNC”), which is currently set to expire on September 26, 2017, provided that the Authority has an option to extend the term of this agreement by one additional year. Pursuant to the Staff Augmentation Agreement, the Authority will be obligated to retain each of these agreements for two years following the Transfer Date, provided that each the SSP and DNC will agree to extend their respective agreements through such period. Under the SSP agreement, SSP will pay the Authority a percentage of SSP’s gross revenues from the sale of food, beverages, and merchandise and from advertising or promotional fees received by SSP (which percentage varies, from 10%-19%, depending on the type of product sole or fee earned), subject to a minimum annual guarantee of $142,543. Under the DNC agreement, DNC will pay the Authority 7% of all revenue generated in ONT’s terminal 2 and 10% of all revenue generated in ONT’s terminal 4. There is no minimum annual guarantee under the DNC agreement.

News and gift concessions at ONT are managed by WDFG LLC pursuant to a contract dated October 9, 2015 and expiring October 8, 2017. Pursuant to the Staff Augmentation Agreement, the Authority will be obligated to retain this agreement for two years following the Transfer Date, provided that WDFG agrees to extend its agreement through such period. Under the agreement with WDFG, WDFG will pay the Authority 11% of WDFG’s gross revenues; there is no minimum annual guarantee under the WDFG agreement.

Advertising concessions at ONT are managed by JCDecaux Airport Inc. (“JCDecaux”) pursuant to an agreement that will expire in April 2017. Under this agreement, the Authority will receive 75% of advertising sale revenue from terminals 2 and 4 that is over the $250,000 minimum annual guarantee.

For further information about ONT’s parking, concession, and car rental agreements, see “APPENDIX A – REPORT OF THE AIRPORT CONSULTANT.”

Ground Lease Agreements with UPS and FedEx

Land rentals comprised over 55% of ONT’s non-airline revenues in Fiscal Year 2015, and over 50% of the revenues from land rentals were earned under ONT’s ground lease agreements with UPS and FedEx.

The City entered into a 40 year Ground Lease and Access Agreement (the “UPS Ground Lease”) with UPS, which will be assigned to the Authority and will terminate December 4, 2030. Pursuant to the UPS Ground Lease, UPS is given the right to access ONT from its property adjacent to ONT. UPS is obligated under the UPS Ground Lease to pay rental for such rights at rates that are re-adjusted every five years during the term of the UPS Ground Lease. The current rental rate under the UPS Ground Lease is $38,162.17 per month.

FedEx’s ground lease (the “FedEx Ground Lease”) has a five-year term expiring in December 2018. FedEx uses its property for air cargo operations, aircraft maintenance, and operation support. Rental rates are adjusted each year, and the current rental rate under the FedEx Ground Lease is $11,383.00 per month for land rent, as well as $42,863.28 per month for paved aircraft parking and $20,950.83 per month for paved auto parking.

FINANCIAL AND OPERATING INFORMATION CONCERNING ONT

Summary of Operating Statements

The following table summarizes the financial results from operations for ONT for the Fiscal Years 2012 through 2016, based on information obtained from LAWA’s publicly-available financial statements and unaudited Fiscal Year 2016 results obtained from LAWA. The Department has not participated in the preparation of this Official Statement and is not responsible for the information contained herein. For additional information concerning the Department’s financial results, see the Audited Financial Statements of Los Angeles World Airports, Ontario International Airport for the fiscal years ended June 30, 2014 and 2015 which are available on the Los Angeles World Airport’s website at www.lawa.org.

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TABLE 8 ONTARIO INTERNATIONAL AIRPORT HISTORICAL OPERATING STATEMENTS (DOLLARS IN THOUSANDS) 2016 (1) (1) (1) (2) 2012 2013 2014 2015 (unaudited) OPERATING REVENUE Aviation Revenue Landing Fees $ 10,211 $ 11,304 $ 11,774 $ 12,140 $ 11,736 Building rentals 20,991 23,287 17,766 17,346 17,005 Other aviation revenue 3,631 4,093 2,979 3,164 3,951 Total aviation revenue 34,833 38,684 32,519 32,650 32,692 Concession Revenue 25,901 24,497 23,536 23,535 23,584 Other Operating Revenue 562 668 604 695 472 TOTAL OPERATING REVENUE $ 61,296 $ 63,849 $ 56,659 $ 56,880 $ 56,748 OPERATING EXPENSES Salaries and benefits $ 29,612 $ 28,128 $ 25,735 $ 25,701 $ 26,326

Contractual services 15,482 16,115 12,780 11,217 11,165 Material and supplies 3,167 3,556 3,347 3,211 3,503 Utilities 3,808 4,087 4,170 4,254 4,082 Other operating expenses 1,279 1,233 1,190 1,302 1,122 Allocated Administrative Charges 7,908 7,907 7,160 6,932 6,866 Total operating expenses before depreciation and amortization $ 61,256 $ 61,026 $ 54,382 $ 52,617 $ 53,064 Operating income (loss) before depreciation and amortization $ 40 $ 2,823 $ 2,277 $ 4,263 $ 3,684 Less depreciation and amortization 23,427 20,523 19,975 18,990 18,485 OPERATING INCOME (LOSS) $ (23,387) $ (17,700) $ (17,698) $ (14,727) $ (14,801) NON-OPERATING REVENUES (EXPENSES) Passenger facility charges $ 9,326 $ 5,902 $ 3,471 $ 3,611 $ 3,555 Customer facility charge 3,641 3,601 3,670 3,838 4,086 Interest Income 2,530 2,363 1,930 1,793 2,206 Net change in fair value of investments 486 (1,971) 141 (53) 1,298 Interest Expense (3,632) (3,479) (3,311) (2,711) (2,889) Other nonoperating revenue 1,286 31 779 557 (128) Other nonoperating expenses (65) ------Net Nonoperating Revenues $ 13,572 $ 6,447 $ 6,680 $ 7,035 $ 8,128 INCOME (LOSS) BEFORE CAPITAL GRANTS/INTERAGENCY TRANSFERS $ (9,815) $ (11,253) $ (11,018) $ (7,692) $ (6,673) Capital grant contributions -- -- 285 2,646 16 CHANGE IN NET POSITION $ (9,815) $ (11,253) $ (10,733) $ (5,046) $ (6,657) Net position, beginning of year 425,469 415,654 387,514 376,781 333,075 Change in accounting principle and adjustment of an amount due from LA/ONT -- (16,887) -- (38,660)(3) -- Net position, end of year $ 415,654 $ 387,514 $ 376,781 $ 333,075 $ 326,418

(1) Restated. Certain reclassifications have been made to conform to Fiscal Year 2015 presentation. (2) Based on unaudited financial statements of the Los Angeles World Airports for the Fiscal Year ended June 30, 2016.

Source: Audited Financial Statements of Los Angeles World Airports, Ontario International Airport for the Fiscal Years ended June 30, 2012 - June 30, 2015 and unaudited financial statements of Los Angeles World Airports for the Fiscal Year ended June 30, 2016.

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ONT Financial Performance

For the management discussion of LAWA for ONT’s Fiscal Year 2015 finances, see the Audited Financial Statements of Los Angeles World Airports, Ontario International Airport for the Fiscal Years Ended June 30, 2015 and 2014 available on available on the Los Angeles World Airport’s website at www.lawa.org.

In connection with the transfer of ownership and control of ONT from the Department to the Authority, and pursuant to the requirements of the Settlement Agreement, the Department has provided the Authority with certain unaudited financial results of LAWA for Fiscal Year 2016, including the information provided in Table 8 above and elsewhere in this Official Statement. Based on the information obtained by the Authority, the Authority has no reason to believe that any such unaudited information set forth in this Preliminary Official Statement is inaccurate. The Department has not participated in the preparation of this Official Statement and is not responsible for the information contained herein.

Revenue Diversity

The following table sets forth the top ten revenue providers for ONT for fiscal year 2015.

TABLE 9 ONTARIO INTERNATIONAL AIRPORT TOP TEN REVENUE PRODUCERS1 For Fiscal Year 2015 (Dollars in Thousands)

% of Operating Revenues Revenues2

Southwest Airlines Co. $ 14,069 24.7% United Parcel Service 5,679 10.0 Federal Express Corp. 2,893 5.1 US Airways Inc. 2,825 5.0 American Airlines Inc.3 2,725 4.8 The Hertz Corporation 2,564 4.5 Alaska Airlines Inc. 2,509 4.4 Vanguard Car Rental USA LLC 2,233 3.9 United Airlines Inc. 2,224 3.9 Enterprise Rent-A-Car 1,922 3.4 Company of Los Angeles Total 69.7%

1 Derived from unaudited financial statements; excludes revenue from the federal government. The amounts in this table reflect those billed by LAWA to the applicable revenue provider as of June 30, 2015. For those airlines that (i) were party to a completed merger or acquisition, (ii) have received a single FAA certificate and (iii) have completed operational integration, only the surviving entity is presented and the activity for the airlines that are now a part of the surviving airline are included in the information presented. 2 Percentages are calculated as Revenues divided by Total Operating Revenue for Fiscal Year 2015. 3 Includes SkyWest Airlines operating as American Eagle.

Source: LA/Ontario International Los Angeles World Airports Annual Financial Information for the Fiscal Year Ended June 30, 2015

Landing Fees and Building Rental

The landing fee at ONT for Fiscal Year 2016 was $2.68 for Signatory Airlines and $3.35 for Non-Signatory Airlines per thousand pounds of landed weight for aircraft with a maximum gross landing weight of more than 25,000 pounds. For aircraft with a maximum gross landing weight of between 12,500 pounds and 25,000 pounds, the landing fee was $67.00 per landing for Signatory Airlines and $84.00 per landing for Non-Signatory Airlines,

and for aircraft with a maximum gross landing weight of 12,500 pounds or less, the landing fee was $35.00 for Signatory Airlines and $44.00 for non-signatory airlines.

The terminal rental rate for Fiscal Year 2016 was $124.17 per square foot for Signatory Airlines and $135.59 per square foot for non-signatory airlines.

In Fiscal Year 2015, the average airline payment per enplaned passenger was $10.05, based on a landing fee of $2.57 per thousand pounds of landed weight for Signatory Airlines ($3.20 for Non-Signatory Airlines) and a terminal rental rate of $103.05 per square foot for non-signatory airlines. The average airline payment per enplaned passage for Fiscal Year 2016 has not yet been determined.

Budget For Fiscal Year 2017

On June 2, 2016, BOAC approved the annual budget for the airports owned and operated by LAWA, including ONT, for Fiscal Year 2017 (the “Fiscal Year 2017 Budget”). On October 4, 2016, the Authority approved the Fiscal 2017 Budget in the same form as previously approved by BOAC, as to those portions of the budget applicable to ONT. The Authority may adopt amendments to the Fiscal Year 2017 Budget at any time during the Fiscal Year to reflect anticipated changes in operating revenues and/or expenses.

The Fiscal Year 2017 Budget anticipates total operating revenues for ONT of approximately $59.4 million, which is a 2.4% increase over ONT’s total operating revenues of approximately $58.0 million in Fiscal Year 2016. The Fiscal Year 2017 Budget provides for Maintenance and Operations Expenses of approximately $55.9 million in Fiscal Year 2017, representing a 5.3% increase over the approximately $53.1 million of Maintenance and Operations Expenses in Fiscal Year 2016.

Investment Practices of the Authority

The Authority’s treasury operations will be managed in compliance with the California Government Code and according to any investment policy adopted by the Authority from time to time; the Authority’s initial investment policy was adopted by the Commission on October 4, 2016. These requirements, among other things, set forth permitted investment vehicles, liquidity parameters and maximum maturity of investments.

Liquidity

On the Transfer Date, the Department will transfer to the Authority the unrestricted cash balances in the accounts of ONT, other than $40 million of such funds that will be transferred to LAWA as a Settlement Payment on the Transfer Date, as described in the third bullet under the heading “TRANSFER OF OPERATIONS AND MANAGEMENT OF ONTARIO INTERNATIONAL AIRPORT—Settlement Payments” (provided that the remaining balance of ONT’s unrestricted cash accounts and Maintenance and Operation Reserve Fund after such transfer equals or exceeds 120 days of ONT’s Maintenance and Operation Expenses). As of June 30, 2016, ONT had approximately $67.7 million in the Surplus Revenue Fund. Following the transfer of the $40 million Settlement Payment to LAWA, ONT is projected to have an average of 205 days of cash on hand through Fiscal Year 2022. See “APPENDIX A - REPORT OF THE AIRPORT CONSULTANT.”

Risk Management and Insurance

The Indenture requires that the Authority maintain insurance or qualified self-insurance against such risks at ONT as are usually insured at other major airports, to the extent available at reasonable rates and upon reasonable terms and conditions. The Authority is not required under the Indenture to carry insurance against losses due to seismic activity and has obtained a waiver of insurance from the Federal Emergency Management Agency (“FEMA”) and the State of California Authority of Insurance, which ensures that the Authority would be eligible for reimbursement as and if available from FEMA in the event of earthquake losses. The Authority also carries Primary Earthquake coverage for airport buildings up to $10 million with a five percent (5%) deductible with a $100,000 minimum damage limit. Excess Earthquake coverage for airport buildings is also carried up to $15 million.

The Authority currently carries commercial aviation liability insurance with coverage limits of no less than $100 million for losses arising out of liability for airport operations. The deductible on the commercial aviation liability coverage shall not exceed $25,000 per occurrence (current deductible is $0). Excess Airport Liability coverage is also carried up to $100 million.

The Authority has also purchased a War and Allied Perils (also referred to as terrorism insurance) endorsement with coverage limits of no less than $100 million and a deductible not greater than $25,000 per occurrence. The War and Allied Perils endorsement extends to both foreign acts of terrorism and domestic acts of terrorism. Coverage under the War and Allied Perils endorsement may be terminated at any time by the underwriter and terminates automatically upon the outbreak of war (whether there has been a declaration of war or not) between any two of more of the following: France, the People’s Republic of China, the Russian Federation, the United Kingdom or the United States, and certain provisions of the endorsement are terminated upon the hostile detonation of any weapon of war employing atomic or nuclear fission and/or fusion or other like reaction or radioactive force.

The Authority currently carries general all-risk property insurance with coverage limits of approximately $250 million. The deductible on this coverage shall not exceed $25,000 per occurrence. The Authority’s insurance also incorporates a Property Insurance Special Endorsement that provides coverage for property losses resulting from acts of terrorism (both domestic and foreign). Coverage under this endorsement parallels the general all-risk limits of $250 million. The Authority’s property insurance coverage also incorporates a Property Insurance Special Endorsement that provides for coverage for “Boiler and Machinery” losses up to a covered limit of $100 million and Property Insurance Special Endorsement that provides coverage for “Business Interruption” losses to ONT resulting from a covered property peril. Authority carries limits of $100 million coverage for Business Interruption and the deductible is 48 hours from initial interruption.

In addition, the Authority currently purchases travel insurance for employees, with a $1 million limit, and an Employee Fidelity or Crime Insurance coverage with a limit of no less than $1 million.

The Authority currently carries coverage for workers’ compensation liability under both State and Federal laws up to the statutory limits with $5 million coverage for employer’s liability.

CAPITAL IMPROVEMENT PLANNING

Capital Improvement Program

During the Transition Period, the Authority plans to develop and adopt a Capital Improvement Program (“CIP”) for Fiscal Years 2017 to 2021, which will identify potential capital improvement projects for ONT. The CIP is expected to be funded with Airport Improvement Program (“AIP”) grant funds and other funds. It could also be funded with PFCs (subject to the Authority’s obligation under the Settlement Agreement to use PFCs to make the $70 million Settlement Payment to LAWA), CFCs, cash reserves and Additional Bonds or other debt authorized under the Indenture.

LAWA has prepared a CIP for ONT for Fiscal Years 2017 through 2021, which CIP identified approximately $50 million in capital project spending at ONT over the five-year period. All projects identified in LAWA’s CIP were airfield projects, including certain taxiway rehabilitation and lighting projects. Because the Authority will be independently assessing ONT’s capital needs and developing its own CIP, some or all of the projects identified in LAWA’s CIP may not be undertaken and new projects may be identified. In addition, if the Authority is unable to implement the CIP in a timely manner and, therefore, to charge the costs of such program to the airlines operating at the ONT pursuant to their ULAs, ONT operating revenues and its debt service coverage ratio could be adversely affected. For a discussion of the impact of a reduced CIP, see “EXHIBIT A — REPORT OF THE AIRPORT CONSULTANT — Financial Analysis — 3.12 Sensitivity Test.”

Passenger Facility Charges

Passenger Facility Charges or PFCs were created under a federal program authorized by the Aviation Safety and Capacity Expansion Act of 1990, as amended, which allows public agencies controlling commercial service airports to charge each enplaning passenger a facility charge $1.00, $2.00 or $3.00. Subsequent legislation raised the amount airports can collect to $4.50 per passenger when certain conditions are met. Public agencies wishing to impose and use PFCs must apply to the FAA for the authority to do so. The purpose of the charge is to develop additional capital funding sources to provide for the expansion of the national airport system. The proceeds from PFCs must be used to finance eligible airport-related projects that preserve or enhance the safety, capacity or security of the national system, reduce noise from an airport that is part of the system or furnish opportunities for enhanced competition between or among air carriers.

ONT is currently authorized to collect $4.50 per passenger in PFCs through October 2018. On the Transfer Date, the Department will assign to the Authority, and the FAA will approve the Authority’s assumption of, existing FAA Records of Decisions regarding the collection of PFCs at ONT. The Department will also transfer to the Authority all PFCs currently held by the Department relating to ONT. Pursuant to the Settlement Agreement and related FAA approvals, the Authority will transfer back to LAWA previously-collected PFCs in satisfaction of the $50 million payment obligation under the Settlement Agreement. Because the Authority will prepay this payment on the Transfer Date, it will pay a discounted amount of $47.3 million in full satisfaction of the $50 million obligation under the Settlement Agreement.

In addition, the Authority expects to transfer to LAWA an additional $70 million in PFCs collected at ONT following the Transfer Date in satisfaction of the $70 million payment obligation under the Settlement Agreement. Any additional PFCs collected at ONT shall be retained and used by the Authority for eligible capital projects at ONT. For additional information regarding the use of PFCs collected at ONT, see “TRANSFER OF OPERATIONS AND MANAGEMENT OF ONTARIO INTERNATIONAL AIRPORT—Settlement Payments” and “—FAA Reauthorization Act & FAA Approval of PFC Usage.”

The actual amount of PFC revenues received each Fiscal Year will vary depending upon the number of qualifying airport passenger enplanements at ONT. No PFC revenues are pledged to the repayment of Bonds.

Federal Grants

Under the FAA’s AIP, the FAA awards grant moneys to airports around the country for capital improvement projects. AIP grants include entitlement funds, which are apportioned annually based upon the number of enplaned passengers and the amount of landed weight of arriving cargo at individual airports, and discretionary funds, which are available at the discretion of the FAA based on a national priority system.

The Department, as prior operator of ONT, has approximately $5.4 million in federal AIP entitlement funds based on ONT’s enplaned passengers in Fiscal Year 2014, which AIP funds will be transferred to the Authority on the Transfer Date. The Authority anticipates that these AIP grant funds will be used for eligible capital projects and other reimbursements, including, among other things, to defray costs associated with airport master planning, airport capital improvement program planning, taxiway improvement projects. The $5.4 million to be transferred from the Department to the Authority must be used by Fiscal Year 2019, at which point the authorization for such funds will expire.

ONT also has approximately $10 million of AIP entitlement funds that have been apportioned to it based on ONT’s enplaned passengers in Fiscal Years 2015 and 2016. After the Transfer Date, the Authority intends to seek FAA approval to use these funds for the construction and design of a taxiway bypass project currently in design by LAWA.

ONT also has agreements with the TSA for reimbursement of various capital and non-capital security- related projects, however, TSA funding is subject to annual appropriation in the federal budget.

RISK FACTORS

This section provides a general overview of certain risk factors. This section is not meant to be a comprehensive or definitive discussion of the risks associated with an investment in the 2016 Bonds, and the order in which this information is presented does not necessarily reflect the relative importance of various risks. Potential investors in the 2016 Bonds are advised to consider the following factors, among others, and to review this entire Official Statement to obtain information essential to the making of an informed investment decision. Any one or more of the factors discussed below, among others, could affect the market value and/or the marketability of the 2016 Bonds. There can be no assurance that other risk factors not discussed herein will not become material in the future.

2016 Bonds are Special Obligations

The 2016 Bonds are special limited obligations of the Authority, payable solely from and secured by a pledge of Net Pledged Revenues which are principally derived by the Authority from the operations of ONT and certain limited funds and accounts held by or to be held by the Authority or the Trustee under the Indenture. None of the properties of ONT is subject to any mortgage or other lien for the benefit of the owners of the 2016 Bonds, and neither the full faith and credit nor the taxing power of the City, the County, the State or any political subdivision or agency of the State is pledged to the payment of the principal of, premium, if any, or interest on the 2016 Bonds. The Authority has no taxing power.

Airline Operating Results and Financial Condition

The Authority derives a substantial portion of its operating revenues from landing, facility rental and concession fees. The financial strength and stability of the airlines using ONT, together with numerous other factors, influence the level of aviation activity and revenues at ONT. Key factors that affect the financial condition of the airlines and therefore, the level of Net Pledged Revenues, include, among other things: 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 and costs; 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; capacity of ONT; applicable federal laws, including without limitation federal bankruptcy laws; and business travel substitutes, including teleconferencing, videoconferencing and web-casting.

The airline industry 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. Market conditions may limit an airline's access to additional financing if existing sources of funds, including any funds provided by the U.S. Department of Transportation, are exhausted. Certain factors (such as business conditions within the airline industry, the effects of an economic downturn, and high aviation fuel costs) can adversely affect the ability of the airlines that serve ONT, including the Signatory Airlines, to meet their financial obligations to the Authority. These conditions could, in the future, result in additional airline bankruptcies, elimination or reduction of service at ONT by certain airlines, in increased airline concentration at ONT, or other restructuring of the airline industry.

Growing competition from low-cost, low-fare carriers has forced legacy carriers to implement route rationalization, including route transfers to regional partners and the reduction, or elimination, of service to unprofitable markets. Many airlines have reduced schedules, simplified fleets, deferred new aircraft delivery, implemented pay and benefit cuts, reduced workforces and sought bankruptcy protection.

For further information regarding the financial condition and effects on operations of airlines, reference is made to the statements and reports filed periodically by the airlines with the SEC. See “– Availability of Information Concerning Individual Airlines.”

Effect of Airline Bankruptcy

A bankruptcy of an airline operating at ONT could result in a decrease in Net Pledged Revenues, along with delays or reductions in payments on the 2016 Bonds. In 2002 through 2012, several airlines (including some that served ONT) ceased operations and/or filed for bankruptcy protection. Additional bankruptcy filings may occur in the future. The bankruptcy of a Signatory Airline or other airline with significant operations at ONT could have a material adverse effect on operations of ONT, Net Pledged Revenues, and the costs of operation to the other Signatory Airlines operating at ONT.

In the event of an airline bankruptcy, the automatic stay provisions of the United States Bankruptcy Code (the “Bankruptcy Code”') could prevent (unless approval of the bankruptcy court was obtained) any action to collect any amount owing by the airline to the Authority or any action to enforce any obligation of the airline to the Authority. With the authorization of the bankruptcy court, the airline may be able to reject some or all of its agreements with the Authority, including the ULAs or other lease or operating agreements, and stop performing its obligations (including payment obligations) under such agreements. The airline may be able, without the consent and over the objection of the Authority, the Trustee, and the Owners of the 2016 Bonds, to alter the terms, including the payment terms, of its agreements with the Authority, as long as the bankruptcy court determines that the alterations are fair and equitable. In addition, with the authorization of the bankruptcy court, the airline may be able to assign its rights and obligations under any of its agreements with the Authority to another entity, despite any contractual provisions prohibiting such an assignment. The Trustee and the Owners of the 2016 Bonds may be required to return to the airline as preferential transfers any money that was used to make payments on the 2016 Bonds and that was received by the Authority or the Trustee from the airline during the 90 days immediately preceding the filing of the bankruptcy petition. Claims by the Authority under any agreement with the airline, including the ULA, may be subject to limitations.

Although the ULAs permit the Authority to adjust rental rates and landing fees to take into account amounts that go unpaid by a defaulting Signatory Airline, no assurance can be given that the non-defaulting Signatory Airlines will continue to serve ONT and to pay the higher rates and fees.

There may be delays in payments on the 2016 Bonds while the court considers any of these issues. There may be other possible effects from a bankruptcy filing by an airline that could result in delays or reductions in payments on the 2016 Bonds. Regardless of any specific adverse determinations by a court in an airline bankruptcy proceeding, an airline bankruptcy proceeding itself could have an adverse effect on the liquidity and value of the 2016 Bonds.

Availability of Information Concerning Individual Airlines

Certain of the airlines or their parent corporations operating at ONT are subject to the information reporting requirements of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and, as such, are required to file periodic reports, including financial and operational data, with the SEC. These filings are available to the public over the internet at the SEC’s website at http://www.sec.gov. Reports, proxy statements and other information filed by certain airlines can be inspected and copied at the public reference facilities maintained by the SEC at 100 F Street, N.E., Washington, D.C. 20549. A prospective purchaser of such filings and information can call the SEC at 1-800-SEC-0330 for further information on the public reference rooms and copy charges.

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 operating airlines, file limited information only with the DOT.

Neither the Authority nor the Underwriter undertakes any responsibility for and make no representations as to the accuracy or completeness of the content of information available from the SEC or the DOT as discussed in the preceding paragraphs, including, but not limited to, updates of such information or links to other Internet sites accessed through the SEC’s web site. None of the airlines’ reports or filings is incorporated by reference into this Official Statement.

Expiration and Possible Termination of ULAs

Pursuant to its ULA, each Signatory Airline has agreed to pay rates and charges for its use of ONT, which rates and charges include amounts sufficient to satisfy the 125% debt service coverage ratio requirement for the 2016 Bonds. The current ULAs expire on September 30, 2024, provided that each airline has the right to terminate its ULA on October 1, 2019 if the applicable airline has ceased service at ONT on or prior to such date. In addition, each ULA may be terminated by the Authority prior to its expiration under certain circumstances. The Authority cannot provide any assurances that the ULAs will be renewed at scheduled expiration and, if renewed, what the terms of the renewed ULAs will be. Upon the expiration of the ULAs, if the Authority and the Signatory Airlines are unable to reach a successor agreement to replace the current agreement, then the Authority will set airline rentals, fees and charges at ONT in accordance with a resolution of the Authority that will be consistent with DOT requirements.

Airline Consolidations

In response to competitive pressures, the U.S. airline industry has significantly consolidated. In October 2008, Delta Air Lines and Northwest Airlines merged. In June 2009, Republic Airways Holdings, Inc. acquired Midwest Airlines, and in October 2009 it acquired Frontier Airline. In October 2010, United Airlines and Continental Airlines completed the merger of the two airlines. In May 2011, Southwest Airlines completed its acquisition of AirTran Airways. In December 2013, US Airways and American Airlines completed the merger of the two airlines. Further airline consolidation is possible and could change airline service patterns. The Authority cannot predict what impact, if any, such consolidations could have on the airline traffic at ONT.

Concentration of Passenger and Air Cargo Carriers

In Fiscal Year 2016, Southwest Airlines accounted for approximately 56.0% of the total enplaned passengers at ONT. The next largest four airlines serving ONT have a combined market share of 40.4%. Where an airport has a significant market share accounted for by a single airline, there is also risk associated with the potential for that airline to reduce or discontinue service. As described in the Report of the Airport Consultant, Southwest decreased its capacity at ONT from 5.3 million seats in Fiscal Year 2007 to 3.2 million seats in Fiscal Year 2014. Southwest further decreased its seat capacity to 3.1 million for Fiscal Years 2015 and 2016. There can be no assurance that Southwest will continue to maintain its operations at ONT at current levels in the future.

UPS is ONT’s largest cargo carrier with approximately 72% of the cargo enplaned and deplaned at ONT. There is, therefore, risk associated with the potential for UPS to reduce or discontinue its service at ONT. UPS is currently expanding its operations at ONT, which expansion is expected to double its package processing capacity. There can be no assurance, however, that UPS will complete such expansion or continue to maintain its operations at ONT at current levels in the future.

No assurances can be given that either Southwest, UPS, or any of the other passenger or cargo carriers currently operating at ONT will continue to do so at the current level or at all, or what effect a reduction in any such operations could have on Net Pledged Revenues, if any. See “AGREEMENTS FOR THE USE OF AIRPORT FACILITIES.”

Competition for Domestic Flights

The majority of ONT’s originating passengers live in the counties of Riverside and San Bernardino, and other passengers may be drawn from the surrounding Los Angeles, Ventura, and Orange counties. ONT is the third- busiest of the five commercial service airports serving this five-county metropolitan area: the other competitor airports are LAX, located 57 miles west in Los Angeles County, John Wayne Airport, located 41 miles south in Orange County, Burbank Bob Hope Airport, located 49 miles west in Los Angeles County, and Long Beach Airport, located 52 miles southwest in Los Angeles County.

Between Fiscal Year 2005 and Fiscal Year 2015, ONT’s share of enplaned passengers in the five-county metropolitan area decreased from 8.2% to 4.5%. During such period, LAX’s market share increased from 71.2% to

78.1%, and the market shares of each of the other competing airports decreased. For further discussion of historical performance by ONT and the four other airports in the Los Angeles region, see “APPENDIX A – REPORT OF THE AIRPORT CONSULTANT.” Although ONT has experienced declining passengers in recent years, based on various considerations described therein, the Aviation Activity Forecast assumes growing passenger enplanement in the next few years. See “APPENDIX B - DEMAND FORECAST METHODOLOGY AND RESULTS .”

Future increases in operating costs at ONT due to compliance with federally-mandated and other security and operating changes, or with reductions in enplaned passengers at ONT, may increase costs per enplaned passenger to the airlines, which could result in ONT being at a competitive disadvantage relative to other transportation modes and airports serving the region.

Cost of Aviation Fuel

Airline earnings are significantly affected by the price of aviation fuel. According to Airlines for America, fuel is the largest single cost component for most airline operations, and therefore an important and uncertain determinant of an air carrier’s operating economics. There has been no shortage of aviation fuel since the “fuel crisis” of 1974, but there have been significant increases and fluctuations in the price of fuel.

Any increase in fuel prices causes an increase in airline operating costs. Fuel prices continue to be susceptible to, among other factors, political unrest in various parts of the world, Organization of Petroleum Exporting Countries’ policy, increased demand for fuel caused by rapid growth of economies such as China and India, the levels of fuel inventory maintained by certain industries, the amounts of reserves maintained by governments, currency fluctuations, disruptions to production and refining facilities and weather. The cost of aviation fuel has fluctuated in the past in response to changes in demand for and supply of oil worldwide. Significant fluctuations and prolonged increases in the cost of aviation fuel historically have had an adverse impact on air transportation industry profitability, causing airlines to reduce capacity, fleet and personnel as well as to increase airfares and institute fuel, checked baggage and other extra surcharges, all of which may negatively affect the demand for air travel and passenger activity at ONT.

International Conflict and the Threat of Terrorism

In the past, international conflict and terrorist actions and threats have had a negative effect on air travel domestically and internationally. As a result of certain prior conflicts and related terrorist threats, airlines significantly reduced the number of transatlantic flights and airline revenues and cash flow were adversely affected. Uncertainty associated with war and future terrorist threats and attacks may have an adverse impact on air travel in the future. The Authority cannot assess the threat of terrorism and the probability of another attack on American soil or against Americans traveling abroad. Should new attacks occur against the air transportation industry, the travel industry, cities, utilities, infrastructure, office buildings or manufacturing plants, the effects on travel demand could be substantial.

Federal Law Affecting Airport Rates and Charges

Federal aviation law requires, in general, that airport fees be reasonable and that in order to receive federal grant funding, all airport-generated revenues must be expended for the capital or operating costs of the airport, the local airport system, or other local facilities owned or operated by the airport owner that are directly and substantially related to air transportation of passengers or property. Pursuant to the requirements of the Federal Aviation Administration Authorization Act of 1994 (the “1994 Aviation Act”) the DOT and FAA have promulgated regulations setting forth an expedited hearing process to be followed in determining the reasonableness of the fees charged to airlines and other aeronautical users.

The Authority is not aware of any formal dispute involving ONT over any existing rates and charges. The Authority believes that the rates and charges methodology reflected in the ULAs and the rates and charges charged thereunder or otherwise to be imposed upon air carriers, foreign air carriers and other aeronautical users at ONT are reasonable and consistent with applicable law. However, there can be no assurance that a complaint will not be brought against the Authority in the near-term or in the future, challenging such methodology and the rates and

charges to be established by the Authority, and if a judgment is rendered against the Authority, there can be no assurance that rates and charges paid by aeronautical users of ONT will not be reduced.

The 1994 Act also provides that without air carrier approval, an airport may not include in its rate base debt service allocable to projects not yet completed and in service. Section 113 of the 1994 Act ("Section 113'') requires that airport fees be ''reasonable" and provides a mechanism by which the Secretary of Transportation can review complaints about rates and charges by air carriers. Section 113 specifically states that its provisions do not apply to (a) a fee imposed pursuant to a written agreement with air carriers using airport facilities, (b) a fee imposed pursuant to a financing agreement or covenant entered into prior to August 23, 1994, the date of enactment of Section 113, or (c) any other existing fee not in dispute as of August 23, 1994.

Aviation Security

Concerns about the safety of air travel and the effectiveness of security precautions, particularly in the context of international hostilities and domestic and foreign terrorist attacks and threats and other airline incidents, may influence passenger travel behavior and air travel demand. These concerns intensified in the aftermath of the events of September 11, 2001. 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, 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 on September 11, 2001 were largely responsible for the steep decline in airline travel nationwide in 2002. Intensified security precautions have been instituted by government agencies, airlines and airport operators since the events of September 11, 2001 and the more recent terrorist bombings to guard against possible terrorist incidents and maintain confidence in the safety of airline travel. These measures include, but are not limited to, the strengthening of aircraft cockpit doors, the federal program to allow and train U.S. commercial airline pilots to carry firearms during flight, federalization of certain airport security functions under the Aviation and Transportation Security Act (“ATSA”) and revised procedures and techniques for the screening of passengers and baggage for weapons and explosives. No assurance can be given that these precautions will be successful. The possibility of international hostilities and/or additional terrorist attacks involving or affecting commercial aviation are a continuing concern. To that end, airports have increased their security forces to reduce the likelihood of a successful criminal event taking place at their facilities.

ATSA was signed into law by the President on November 19, 2001. ATSA created the TSA, which is part of the Authority of Homeland Security. ATSA requires, among other things, that all security screeners at airports be federal employees. Security screeners must undergo background checks and must be U.S. citizens. These federal security screening services are paid for in the current Fiscal Year by a charge to passengers of $2.50 per departure or connection, not to exceed $5.00 per trip.

ATSA also requires that all passenger bags, mail and cargo be screened to prevent the carriage of weapons (including chemical and biological weapons), explosives or incendiary devices. Passenger and passenger property is currently screened by TSA personnel at multiple inspection checkpoints located within the terminal complex at ONT. One hundred percent of passenger baggage and checked items are screened electronically for explosives at additional processing stations. Mail and cargo screening is conducted on a random basis by K-9 teams using the guidelines provided by the TSA. These measures meet the current rules enacted and implemented by the TSA as of the date of this Official Statement. There can be no assurance that these enhanced screening procedures will be successful in identifying all weapons.

In compliance with federal regulations ONT established an Aviation Security Program (“ASP”) which has been approved by the TSA Federal Security Director for ONT. The ASP contains, among other measures, operational and facility management procedures that protect the physical security of airport property and act to limit access to controlled areas of the airport proper, as defined in the ASP. ONT’s access control program features personnel background investigations, criminal history checks, employment verification and other inspections, as required. ONT facilities are patrolled 24/7, with video monitoring, and no intrusions into the secured area have occurred that were not immediately detected and the intruder apprehended by airport authorities or law enforcement personnel.

The airlines and the federal government were primarily responsible for the capital costs associated with implementing the new security measures. ONT is currently in compliance with all federally-mandated security requirements. However, if the Department of Homeland Security issues a specific threat warning, the Authority may incur an increase in operating costs related to such raised threat levels. The Authority cannot predict the effect of any future government-required security measures on passenger activity at ONT, nor can the Authority predict how the government will staff security screening functions or the effect on passenger activity of government decisions regarding its staffing levels in the future.

Public Health Risks

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 led public health agencies to issue advisories against nonessential travel to certain regions of the world. In 2009, while the United States Center 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. Following an outbreak of the Ebola virus in West Africa in 2014, concerns about the spread of the virus adversely affected travel to and from certain regions of Africa. More recently, in January 2016, the Centers for Disease Control and Prevention issued a travel alert warning pregnant women to avoid travel to areas where the Zika virus, which has been linked to a type of birth defect called microcephaly, is spreading, a list that currently includes more than 30 countries and territories.

Effects of Concessionaire Bankruptcy

A bankruptcy of any significant concessionaire at ONT could also result in a decrease in Net Pledged Revenues, along with delays or reductions in payments on the 2016 Bonds, for reasons similar to those discussed above with respect to airline bankruptcies. Regardless of any specific adverse determinations by a court in a concessionaire bankruptcy proceeding, a bankruptcy proceeding itself could have an adverse effect on the liquidity and value of the 2016 Bonds.

National and Global Economic Conditions

Historically, the financial performance of the air transportation industry has correlated with the state of the national and global economy. Following significant and dramatic changes that occurred in the financial markets in September 2008, the U.S. economy experienced a recession followed by weak growth. As a result of concerns about the U.S. government’s ability to resolve long-term deficits, Standard & Poor’s Ratings Services in August 2011 downgraded the credit rating of the U.S. sovereign debt from “AAA” to “AA+.” While the global economy generally has rebounded, there can be no assurances that any such rebound will continue, or that other national and international fiscal concerns will not have an adverse effect on the air transportation industry.

Generally, at origination and destination airports such as ONT, air traffic is significantly dependent upon the economy of the airport trade area. Although ONT’s two-county air trade area is large and has a relatively diversified socioeconomic base, the economy in the air trade area depends in significant part upon the financial strength and stability of the industries within the air trade area and upon the success of major employers in the air trade area. Reduced demand for air travel in and out of the air trade area could result in fewer airlines serving ONT and lower levels of passenger activity at ONT. For further information about the economy of the air trade area, see “APPENDIX A - REPORT OF THE AIRPORT CONSULTANT.”

Seismic Risks and Natural Disasters

The region served by ONT is located in a seismically active region of the State. During the past 160 years, the Los Angeles area has experienced several major and minor earthquakes. The four nearest faults within close proximity to ONT are the San Andreas Fault, the Cucamonga Fault, the San Ysidro Fault and the North Lytle Creek Fault. Other seismic activity from those or other faults represent potential risk for damage to airport facilities as well as buildings, roads, bridges, and property in the vicinity of ONT in the event of an earthquake. There is significant potential for destructive ground-shaking during the occurrence of a major seismic event.

In the event of a severe earthquake, fire, flood or other natural disaster, there may be significant damage to airport facilities as well as buildings, roads, bridges, and property in the vicinity of ONT. As a result, the availability of Net Pledged Revenues might be interrupted or not available to pay the principal of or interest on the 2016 Bonds as and when due. However, due to the residual nature of ONT, any costs associated with the repair of ONT facilities would be charged to the airlines serving ONT.

On January 17, 1994, the Los Angeles area experienced an earthquake that measured 6.7 on the Richter Scale. ONT experienced no damage or disruption of service. The Authority is unable to predict when another earthquake may occur and what impact, if any, it may have on the Authority’s operations or finances. See “FINANCIAL AND OPERATING INFORMATION CONCERNING ONT – Risk Management and Insurance.”

Regulatory Uncertainties

Development at ONT is regulated extensively by the State of California and requires a number of reviews and permits. The collection and application of any Customer Facility Charges and noise waivers may also be subject to audit. Operations and development at ONT are also subject to extensive federal oversight. The Authority will operate ONT pursuant to an airport operating certificate to be issued by the FAA on the date of issuance of the 2016 Bonds (the issuance of which certificate is a condition precedent to the issuance of the 2016 Bonds). See “TRANSFER OF OPERATIONS AND MANAGEMENT OF ONTARIO INTERNATIONAL AIRPORT--FAA Approval of Transfer” for a more complete description of the FAA Certificate. In addition to this operating certificate, the Authority is required to obtain other permits and/or authorizations from the FAA and from other regulatory agencies and is bound by contractual agreements included as a condition to receiving grants from the FAA Airport Improvement Program. All long-term planning is subject to the FAA's approval; outside audits of the Authority's financial statements are subject to periodic audits by the FAA:, the Authority's use of ONT revenues, which is generally limited to airport-related purposes, is subject to audit and review by the FAA; and the Authority's use of Passenger Facility Charges and grant proceeds is also subject to approval, audit and review.

Climate change concerns have led, and may continue to lead, to new laws and regulations at the federal and state levels that could have a material adverse effect on the operations of the Authority and on the airlines operating at ONT. The United States Environmental Protection Agency (the “EPA”) has taken steps toward regulation of greenhouse gas (“GHG”) emissions under existing federal law. Those steps may in turn lead to further regulation of aircraft GHG emissions. On July 5, 2011, the United States District Court for the District of Columbia issued an order concluding that the EPA has a mandatory obligation under the Clean Air Act to consider whether the GHG and black carbon emissions of aircraft engines endanger public health and welfare. On June 10, 2015, EPA proposed the find that GHG emissions from certain aircraft cause and contribute to pollution that endangers public health and welfare. This proposed endangerment finding will be subject to public comment and EPA plans to finalize the aircraft endangerment finding in mid-2016. If finalized as proposed, EPA has stated its intent to propose GHG emission standards for covered aircraft that will be at least as stringent as emission standards under development by the International Civil Aviation Organization, which are scheduled for final review and adoption in 2016. The Authority cannot predict what the EPA’s emission standards will be or what effect those standards may have on the Authority or on air traffic at ONT.

Federal Funding; Impact of Federal Sequestration

On February 6, 2012, Congress passed a four-year reauthorization bill for the FAA, the “FAA Modernization and Reform Act of 2012” (the “2012 FAA Reauthorization”) which was signed into law on February 14, 2012 by the President. The 2012 FAA Reauthorization had an original expiration date of September 30, 2015. This was the first long-term FAA authorization since the last such authorization expired in 2007. Between 2007 and the 2012 reauthorization, there were 23 short-term extensions of the FAA’s authority and a two-week partial shutdown of the FAA in the summer of 2011. Similarly, the 2012 FAA Reauthorization has been extended three times, most recently on July 15, 2016, and now expires on September 30, 2017. The 2012 FAA Reauthorization, and the three extensions, retained the federal cap on Passenger Facility Charges at $4.50 and continued funding for AIP through September 30, 2017. The AIP provides federal capital grants to support airport infrastructure, including entitlement grants (determined by formulas based on passenger, cargo, and general aviation activity levels) and discretionary grants (allocated on the basis of specific set-asides and the national priority ranking system). There can be no assurance that the FAA will receive spending authority beyond the September 30, 2017 extension. In addition,

the AIP could be affected by the automatic across-the-board spending cuts, known as sequestration, described in more detail below. The Authority is unable to predict the level of available AIP funding it may receive. If there is a reduction in the amount of AIP grants awarded to the Authority for ONT, such reduction could increase by a corresponding amount the capital expenditures that the Authority would need to fund from other sources (including operating revenues or additional bonds) or limit the Authority’s ability to implement capital projects included in the Authority’s Capital Improvement Program. See “CAPITAL IMPROVEMENTS PROGRAM” herein.

Federal funding received by the Authority and aviation operations could be adversely affected by the implementation of sequestration – a unique budgetary feature first introduced in the Budget Control Act of 2011, which, among other things, reduced spending for most federal programs.

Sequestration could also adversely affect FAA and TSA budgets, operations and the availability of certain federal grant funds anticipated to be received by the Authority, which may cause the FAA or TSA to implement furloughs of its employees and hiring freezes, including air traffic controllers, and result in flight delays and flight cancellations, implement hiring freezes.

The Authority is unable to predict future sequestration funding cuts or furloughs or the impact of such actions on ONT’s airline traffic, grant receipts and Net Pledged Revenues. The Authority intends to take any commercially reasonable measures necessary to continue smooth operation of ONT.

No Acceleration

The occurrence of an Event of Default under the Indenture does not grant any right to accelerate payment of the 2016 Bonds to either the Trustee or the holders of the 2016 Bonds.

Ability to Meet Rate Covenant

As discussed in “SECURITY AND SOURCES OF PAYMENT FOR THE 2016 BONDS – Rate Covenant,” the Authority will covenant with respect to the 2016 Bonds to fulfill certain debt service coverage and rate setting requirements.

Pursuant to the ULAs (see “AGREEMENTS FOR THE USE OF AIRPORT FACILITIES – Operating Use and Terminal Lease Agreements”), the Authority (as assignee of the Department) may establish and adjust airline rates and charges as necessary to satisfy the rate covenant applicable to the 2016 Bonds.

Increasing the schedule of rentals, rates, fees and charges for the use of ONT and for services rendered by the Authority in connection with ONT could be subject to contractual, statutory or regulatory restrictions and could have market implications.

Competition from Travel Alternatives

California High Speed Rail. The California High Speed Rail Authority (the “CHSR Authority”') is pursuing a statewide, high speed rail system. According to information from the CHSR Authority in its 2016 Business Plan, high speed rail service is not expected to begin until 2025 and would connect the City of San Jose to the Central Valley (in particular, a station north of Bakersfield). The 2016 Business Plan also provides that high speed rail service is expected to be extended to San Francisco/Merced and Los Angeles/Anaheim by 2029. Extensions from Los Angeles/Anaheim to San Diego and from Merced to Sacramento are part of Phase 2 of the implementation of the statewide, high speed rail system. The Authority is unable to predict what effect such rail system would have, if any, on passenger traffic at ONT or its revenues.

Technology. Advancements in technology with teleconferences, video-conferences and web-based meetings have provided satisfactory alternatives to face-to-face business meetings. Such alternatives, in certain cases, have reduced and may continue to reduce the demand for air travel.

Capacity Restrictions

ONT is currently subject to a nominal capacity limitation. This limitation was established by the State of California Air Resources Board (the “ARB”) in 1979. To ensure that ONT operations do not degrade air quality, the ARB imposed certain conditions as part of its approval of an Ontario Airport Air Quality Certificate in 1977. These conditions limit aviation activity at ONT to a maximum of 12 million annual passengers (“MAP”) or 125,000 annual air carrier operations. In Fiscal Year 2016, ONT served 4.2 MAP, which is 35.1% of the 12 MAP limit, and had air carrier operations of 55,359 (44.3% of the 125,000 annual air carrier operations limit). The Air Traffic Forecast Consultant does not forecast that ONT will exceed the MAP or annual air carrier operation limits through the projection period of 2045.

The Authority believes that, if ONT were to approach the MAP or annual air carrier operation limits, the ARB would modify the Air Quality Certificate to increase the operational limits, or the airlines would adjust their fleet mix and load factors at ONT to stay within the prescribed limits, or the ARB’s limits will not be enforced or may prove unenforceable. In August of 2000, the Department received a legal opinion from the Office of the Chief Counsel of the FAA that the State cannot obtain or exercise continuing authority over operations at ONT by virtue of an Air Quality Certificate. The opinion states that while the State has authority to issue the Air Quality Certificate it does not have authority to impose conditions as part of its Air Quality Certificate.

Future growth and operations at ONT could be adversely impacted by the Authority’s failure to obtain an amendment to the Air Quality Certificate and enforcement of the ARB’s limits should they be exceeded. For the reasons set forth above the Authority does not believe this will occur, although the Authority is unable to predict the outcome of this matter.

Operations at ONT

The Authority will derive a substantial portion of its operating revenues from landing fees, facility rent and concession fees at ONT. The financial strength and stability of the airlines using ONT, together with numerous other factors, most notably demand for airline services by passengers, influence the level of aviation activity at ONT. In addition, individual airline decisions regarding level of service, particularly hubbing activity and aircraft size such as use of regional jets, can be expected to affect passenger activity at ONT, as well as be affected by passenger activity at ONT. The level of passenger activity at ONT is reasonably expected to impact the level of other sources of revenue for ONT, such as parking revenues, concession fees, Passenger Facility Charges and Customer Facility Charges. The Authority cannot predict the duration or extent of reductions and disruptions in air travel or the extent of any adverse impact on Net Pledged Revenues, Passenger Facility Charge collections, Customer Facility Charge collections, passenger activity, general ONT operations, or the financial condition of ONT that may result from the financial difficulties of airlines serving ONT. No assurances can be given that any of the airlines currently serving ONT will continue operations at ONT or maintain their current level of operations at ONT. If one or more of these airlines discontinues operations at ONT, its current level of activity may not be replaced by other carriers.

Parking fees will be collected by the Authority. In Fiscal Year 2015, such revenues comprised approximately 57.8% of concession revenues. The level of passenger activity at ONT is expected to impact the level of parking revenues. The Authority cannot give any assurance that parking fees will continue to produce the same level of revenue in the future.

Although the Signatory Airlines are a significant part of ONT’s operations and an important source, whether directly or indirectly, of ONT revenues, ONT also relies on other ONT operations for revenues, including concessionaires and rental car companies. In Fiscal Year 2015, airline revenues comprised 48.6% of ONT’s operating revenues, and non-airline revenues (including concession revenue, land rentals, non-airline building rentals, and fuel fees) comprised 51.4% of ONT’s operating revenues. The Authority cannot give any assurances that these non-airline operations will continue at ONT at current levels or produce the same level of revenue for the Authority.

Capital Improvement Program

Following the Transfer Date, the Authority will develop a five-year CIP to identify capital projects and equipment purchases to be undertaken in such period for the benefit of ONT. Although LAWA has developed a CIP for the Fiscal Years from 2017 to 2021, the Authority will independently assess ONT’s capital needs and may determine to proceed with different projects than those identified by LAWA. See “CAPITAL IMPROVEMENT PLANNING—Capital Improvement Program” herein for a further discussion of the status of ONT’s Capital Improvement Program.

Because the Authority’s CIP has not yet been developed, the costs of the CIP ultimately adopted by the Authority may differ from the CIP presented in the Report of the Airport Consultant. There can be no assurances that the cost of the CIP will not exceed projected amounts.

In addition, if the Authority is unable to implement the CIP in a timely manner and, therefore, to charge the costs of such program to the airlines operating at the ONT pursuant to their ULAs, ONT operating revenues and its debt service coverage ratio could be adversely affected. For a discussion of the impact of a reduced CIP, see “EXHIBIT A — REPORT OF THE AIRPORT CONSULTANT — Financial Analysis — 3.12 Sensitivity Test.”

New Management at ONT

The Authority is a new agency without an institutional operating history. Although the Authority has hired experienced managers (see “ONTARIO INTERNATIONAL AIRPORT AUTHORITY—Authority Management” herein for a description of senior Authority officers) and will benefit from staffing continuity during the Transition Period pursuant to the Staff Augmentation Agreement, the Authority has not previously been responsible for operating ONT or similar assets, and therefore there can be no assurances that operations at ONT following the Transfer Date will be consistent with or comparable to operations prior to the Transfer Date.

ONT ENVIRONMENTAL MATTERS

There are several significant environmental matters which have direct and indirect impacts on the Authority and ONT, some of which are described below. These include aircraft noise reduction, clean air requirements and hazardous substance cleanup. Generally, ONT tenant leases include a set of standard terms and conditions that provide that tenants are responsible for the costs of remediation of hazardous or other regulated material from ONT property and obligates tenants to comply with applicable laws. However, if a tenant does not comply with these lease requirements or the requirements of applicable environmental laws, the Authority could ultimately become responsible for any required environmental cleanup. The ultimate impact of these environmental factors on the Authority and ONT cannot be determined at this time.

Noise Standards

Under a line of federal court decisions, an airport operator has responsibility for the impacts of aircraft noise on the areas surrounding the airport. Both the federal government and the State of California have established levels of significant noise impact, to indicate whether the average noise impact over time on land near an airport is compatible with the use of that land. The federal noise descriptor, DNL, and the State noise descriptor, CNEL, both refer to an annual average noise impact measured in the range of human hearing, described in decibels (“dB”). Both DNL and CNEL include a multiplier for nighttime noise in view of the extra sensitivity to aircraft noise in night hours. The primary goal of airport noise mitigation is to avoid noise levels above 65 dB DNL/CNEL in residential areas.

The federal government has provided a program for uniform measurement of airport noise and development of noise mitigation measures in 14 CFR Part 150. Part 150 sets guidelines for airport operators to document aircraft noise exposure, and to establish noise abatement and compatible land use programs. These noise programs must be approved by the FAA in order for the airport to qualify for potential federal funding for noise mitigation efforts such as sound insulation and land acquisition. The Part 150 regulations are further clarified by the FAA in Advisory Circular 150/5020-1. A Part 150 Study consists of two technical elements: (i) a Noise Exposure

Map (“NEM”), which identifies the levels of aircraft noise in areas around the airport, and (ii) Noise Compatibility Program (“NCP”), which includes measures designed to reduce noise and incompatible land uses within the noise exposure area.

ONT completed its first Part 150 study in 1990, which included both elements. On the basis of the 1990 study and succeeding studies, a residential sound insulation program was implemented to reduce interior noise below CNEL 45 dB for residences inside the CNEL 65 dB contour. The most recent update of the ONT Part 150 NEM was approved by the FAA in March 2016. That update reported no incompatible residential land uses or population within the CNEL 65 dB or higher noise contours. If there is significant growth in aircraft operations at ONT in the future, the CNEL 65 dB noise contour could expand into new areas. This would be offset to some extent by the continuing reduction in individual aircraft noise emissions, under increasingly stringent U.S. and international noise standards for aircraft certification.

Title 21 of the California Code of Regulations, Subchapter 6, defines the limit of acceptable noise exposure for communities near an airport as CNEL 65 dB or lower. The California Division of Aeronautics may issue a variance to an airport that has areas exceeding state standards but that has demonstrated programs to reduce noise impacts. ONT is subject to the variance requirement, and the State has issued a variance for the airport.

The federal DNL 65 dB threshold of significant impact for residential areas has been in effect for decades and remains in effect at this time. The FAA has announced its intention to study whether the DNL 65 dB threshold is the appropriate guideline for impact on residential areas. It is expected that the FAA will complete the study in 2017, and issue a policy determination in 2018. That determination could potentially lower the threshold of significant impact, which in turn would include more areas subject to the threshold noise level. Since California statutes already provide for use of a residential threshold of significance lower than CNEL 65 dB on a voluntary basis, the FAA determination may have less effect in California than in other states.

LITIGATION

There is no litigation now pending or, to the best of the Authority’s knowledge, threatened which seeks to restrain or enjoin the sale, execution, issuance or delivery of the 2016 Bonds or in any way contests the validity of the 2016 Bonds or any proceedings of the Authority taken with respect to the authorization, sale or issuance of the 2016 Bonds, or the pledge or application of any moneys provided for the payment of or security for the 2016 Bonds. Further, there is no pending litigation relating to ONT or the Authority’s operations or business pertaining thereto, except as follows:

Over the years, the City of Los Angeles has had many lawsuits filed against it by residents (or homeowners’ groups on behalf of residents) in areas near ONT which allege a taking of property or interest therein, or injuries and/or emotional distress to persons, by reason of noise due to the flight of aircraft. Traditionally claims greatly exceed the actual recovery. This principle has been well established by the results of trials and settlements which have been concluded in the past. There are no such claims pending as of the date hereof, and the Authority has no knowledge of any unasserted claims or assessments with respect to ONT that would, if asserted, have at least a reasonable probability of an unfavorable outcome or a material adverse impact on operations.

In addition, from time to time the Department has been party to litigation and subject to claims arising out of the normal course of business and operations at ONT. As of the date hereof, there is no pending litigation relating to ONT that the Authority will become responsible for from and after the Transfer Date that would reasonably be expected to have a material impact on Net Pledged Revenues or the operations of ONT. Pursuant to the Settlement Agreement, the Department is retaining as Excluded Liabilities, and the Authority will not assume or otherwise be responsible for, any liabilities arising from claims asserted by LAWA employees concerning their rights as employees of LAWA or the terms and conditions of their employment by LAWA, and the Department will indemnify the Authority from any such liabilities.

To the Authority’s knowledge, based on information provided by the Department, there are no claims or litigation arising out of or challenging any federal grants received or held by the Department for ONT.

TAX MATTERS

The following is a summary of certain anticipated United States federal income tax consequences of the purchase, ownership and disposition of the 2016 Bonds. The summary is based upon the provisions of the Internal Revenue Code of 1986, as amended (the “Code”), the Treasury Regulations promulgated thereunder and the judicial and administrative rulings and decisions now in effect, all of which are subject to change. Such authorities may be repealed, revoked, or modified, possibly with retroactive effect, so as to result in United States federal income tax consequences different from those described below. The summary generally addresses 2016 Bonds held as capital assets within the meaning of Section 1221 of the Code and does not purport to address all aspects of federal income taxation that may affect particular investors in light of their individual circumstances or certain types of investors subject to special treatment under the federal income tax laws, including but not limited to financial institutions, insurance companies, dealers in securities or currencies, persons holding such 2016 Bonds as a hedge against currency risks or as a position in a “straddle,” “hedge,” “constructive sale transaction” or “conversion transaction” for tax purposes, or persons whose functional currency is not the United States dollar. It also does not deal with holders other than original purchasers that acquire the 2016 Bonds at their initial issue price except where otherwise specifically noted. Potential purchasers of the 2016 Bonds should consult their own tax advisors in determining the federal, state, local, foreign and other tax consequences to them of the purchase, holding and disposition of the 2016 Bonds.

The Authority has not sought and will not seek any rulings from the Internal Revenue Service with respect to any matter discussed herein. No assurance can be given that the Internal Revenue Service would not assert, or that a court would not sustain, a position contrary to any of the tax characterizations and tax consequences set forth below.

U.S. Holders

As used herein, the term ‘‘U.S. Holder’’ means a beneficial owner of the 2016 Bonds that is (a) an individual citizen or resident of the United States for federal income tax purposes, (b) a corporation, including an entity treated as a corporation for federal income tax purposes, created or organized in or under the laws of the United States or any State thereof (including the Authority of Columbia), (c) an estate whose income is subject to federal income taxation regardless of its source, or (d) a trust if a court within the United States can exercise primary supervision over the administration of the trust and one or more U.S. persons have the authority to control all substantial decisions of the trust. Notwithstanding clause (d) of the preceding sentence, to the extent provided in Treasury regulations, certain trusts in existence on August 20, 1996, and treated as United States persons prior to that date that elect to continue to be treated as United States persons also will be U.S. Holders. In addition, if a partnership (or other entity or arrangement treated as a partnership for federal income tax purposes) holds the 2016 Bonds, the tax treatment of a partner in the partnership generally will depend upon the status of the partner and the activities of the partnership. If a U.S. Holder is a partner in a partnership (or other entity or arrangement treated as a partnership for federal income tax purposes) that holds the 2016 Bonds, the U.S. Holder is urged to consult its own tax advisor regarding the specific tax consequences of the purchase, ownership and dispositions of the 2016 Bonds.

Taxation of Interest Generally

Interest on the 2016 Bonds is not excluded from gross income for federal income tax purposes under Code section 103 and so will be fully subject to federal income taxation. Purchasers (other than those who purchase the 2016 Bonds in the initial offering at their principal amounts) will be subject to federal income tax accounting rules affecting the timing and/or characterization of payments received with respect to such 2016 Bonds. In general, interest paid on the 2016 Bonds and recovery of any accrued original issue discount and market discount will be treated as ordinary income to a bondholder, and after adjustment for the foregoing, principal payments will be treated as a return of capital to the extent of the U.S. Holder’s adjusted tax basis in the 2016 Bonds and capital gain to the extent of any excess received over such basis.

Market Discount

Any owner who purchases a 2016 Bond at a price which includes market discount (i.e., at a purchase price that is less than its adjusted issue price in the hands of an original owner) in excess of a prescribed de minimis

amount will be required to recharacterize all or a portion of the gain as ordinary income upon receipt of each scheduled or unscheduled principal payment or upon other disposition. In particular, such owner will generally be required either (a) to allocate each such principal payment to accrued market discount not previously included in income and to recognize ordinary income to that extent and to treat any gain upon sale or other disposition of such a 2016 Bond as ordinary income to the extent of any remaining accrued market discount or (b) to elect to include such market discount in income currently as it accrues on all market discount instruments acquired by such owner on or after the first day of the taxable year to which such election applies.

The Code authorizes the Treasury Department to issue regulations providing for the method for accruing market discount on debt instruments the principal of which is payable in more than one installment. Until such time as regulations are issued by the Treasury Department, certain rules described in the legislative history of the Tax Reform Act of 1986 will apply. Under those rules, market discount will be included in income either (a) on a constant interest basis or (b) in proportion to the accrual of stated interest.

An owner of a 2016 Bond who acquires such 2016 Bond at a market discount also may be required to defer, until the maturity date of such 2016 Bonds or the earlier disposition in a taxable transaction, the deduction of a portion of the amount of interest that the owner paid or accrued during the taxable year on indebtedness incurred or maintained to purchase or carry a 2016 Bond in excess of the aggregate amount of interest (including original issue discount) includable in such owner’s gross income for the taxable year with respect to such 2016 Bond. The amount of such net interest expense deferred in a taxable year may not exceed the amount of market discount accrued on the 2016 Bond for the days during the taxable year on which the owner held the 2016 Bond and, in general, would be deductible when such market discount is includable in income. The amount of any remaining deferred deduction is to be taken into account in the taxable year in which the 2016 Bond matures or is disposed of in a taxable transaction. In the case of a disposition in which gain or loss is not recognized in whole or in part, any remaining deferred deduction will be allowed to the extent gain is recognized on the disposition. This deferral rule does not apply if the bondholder elects to include such market discount in income currently as described above.

Surtax on Unearned Income

Recently enacted legislation generally imposes a tax of 3.8% on the “net investment income” of certain individuals, trusts and estates for taxable years beginning after December 31, 2012. Among other items, net investment income generally includes gross income from interest and net gain attributable to the disposition of certain property, less certain deductions. U.S. Holders should consult their own tax advisors regarding the possible implications of this legislation in their particular circumstances.

Sale or Redemption of the 2016 Bonds

A bondholder’s adjusted tax basis for a 2016 Bond is the price such owner pays for the 2016 Bond plus the amount of original issue discount and market discount previously included in income and reduced on account of any payments received on such 2016 Bond other than “qualified stated interest” and any amortized bond premium. Gain or loss recognized on a sale, exchange or redemption of a 2016 Bond, measured by the difference between the amount realized and the bondholder’s tax basis as so adjusted, will generally give rise to capital gain or loss if the 2016 Bond is held as a capital asset (except in the case of the 2016 Bonds acquired at a market discount, in which case a portion of the gain will be characterized as interest and therefore ordinary income).

If the terms of the 2016 Bonds are materially modified, in certain circumstances, a new debt obligation would be deemed created and exchanged for the prior obligation in a taxable transaction. Among the modifications which may be treated as material are those which related to the redemption provisions and, in the case of a nonrecourse obligation, those which involve the substitution of collateral. The defeasance of the 2016 Bonds may also result in a deemed sale or exchange of such 2016 Bonds under certain circumstances.

EACH POTENTIAL HOLDER OF THE 2016 BONDS SHOULD CONSULT ITS OWN TAX ADVISOR CONCERNING (1) THE TREATMENT OF GAIN OR LOSS ON SALE OR REDEMPTION OF THE 2016 BONDS, AND (2) THE CIRCUMSTANCES IN WHICH BONDS WOULD BE DEEMED REISSUED AND THE LIKELY EFFECTS, IF ANY, OF SUCH REISSUANCE.

Non-U.S. Holders

The following is a general discussion of certain United States federal income tax consequences resulting from the beneficial ownership of the 2016 Bonds by a person other than a U.S. Holder, a former United States citizen or resident, or a partnership or entity treated as a partnership for United States federal income tax purposes (a “Non-U.S. Holder”).

Subject to the discussion of backup withholding and the Foreign Account Tax Compliance Act (“FATCA”), payments of principal by the Authority or any of its agents (acting in its capacity as agent) to any Non- U.S. Holder will not be subject to federal withholding tax. In the case of payments of interest to any Non-U.S. Holder, however, federal withholding tax will apply unless the Non-U.S. Holder (1) does not own (actually or constructively) 10-percent or more of the voting equity interests of the Authority, (2) is not a controlled foreign corporation for United States tax purposes that is related to the Authority (directly or indirectly) through stock ownership, and (3) is not a bank receiving interest in the manner described in Section 881(c)(3)(A) of the Code. In addition, either (1) the Non-U.S. Holder must certify on the applicable IRS FormW-8 (series) (or successor form) to the Authority, its agents or paying agents or a broker under penalties of perjury that it is not a U.S. person and must provide its name and address, or (2) a securities clearing organization, bank or other financial institution, that holds customers’ securities in the ordinary course of its trade or business and that also holds the 2016 Bonds must certify to the Authority or its agent under penalties of perjury that such statement on the applicable IRS Form W-8 (series) (or successor form) has been received from the Non-U.S. Holder by it or by another financial institution and must furnish the interest payor with a copy.

Interest payments may also be exempt from federal withholding tax depending on the terms of an existing Federal Income Tax Treaty, if any, in force between the U.S. and the resident country of the Non-U.S. Holder. The U.S. has entered into an income tax treaty with a limited number of countries. In addition, the terms of each treaty differ in their treatment of interest and original issue discount payments. Non-U.S. Holders are urged to consult their own tax advisor regarding the specific tax consequences of the receipt of interest payments, including original issue discount. A Non-U.S. Holder that does not qualify for exemption from withholding as described above must provide the Authority or its agent with documentation as to his, her, or its identity to avoid the U.S. backup withholding tax on the amount allocable to a Non-U.S. Holder. The documentation may require that the Non-U.S. Holder provide a U.S. tax identification number.

If a Non-U.S. Holder is engaged in a trade or business in the United States and interest on a 2016 Bond held by such holder is effectively connected with the conduct of such trade or business, the Non-U.S. Holder, although exempt from the withholding tax discussed above (provided that such holder timely furnishes the required certification to claim such exemption), may be subject to United States federal income tax on such interest in the same manner as if it were a U.S. Holder. In addition, if the Non-U.S. Holder is a foreign corporation, it may be subject to a branch profits tax equal to 30% (subject to a reduced rate under an applicable treaty) of its effectively connected earnings and profits for the taxable year, subject to certain adjustments. For purposes of the branch profits tax, interest on a 2016 Bond will be included in the earnings and profits of the holder if the interest is effectively connected with the conduct by the holder of a trade or business in the United States. Such a holder must provide the payor with a properly executed IRS Form W-8ECI (or successor form) to claim an exemption from United States federal withholding tax.

Generally, any capital gain realized on the sale, exchange, retirement or other disposition of a 2016 Bond by a Non-U.S. Holder will not be subject to United States federal income or withholding taxes if (1) the gain is not effectively connected with a United States trade or business of the Non-U.S. Holder, and (2) in the case of an individual, the Non-U.S. Holder is not present in the United States for 183 days or more in the taxable year of the sale, exchange, retirement or other disposition, and certain other conditions are met.

For newly issued or reissued obligations, such as the 2016 Bonds, FATCA imposes U.S. withholding tax on interest payments and, for dispositions after December 31, 2018 (see IRS Notice 2015-66), gross proceeds of the sale of the 2016 Bonds paid to certain foreign financial institutions (which is broadly defined for this purpose to generally include non-U.S. investment funds) and certain other non-U.S. entities if certain disclosure and due diligence requirements related to U.S. accounts or ownership are not satisfied, unless an exemption applies. An intergovernmental agreement between the United States and an applicable non-U.S. country may modify these

requirements. In any event, bondholders or beneficial owners of the 2016 Bonds shall have no recourse against the Authority, nor will the Authority be obligated to pay any additional amounts to “gross up” payments to such persons, as a result of any withholding or deduction for, or on account of, any present or future taxes, duties, assessments or government charges with respect to payments in respect of the 2016 Bonds.

Non-U.S. Holders should consult their own tax advisors with respect to the possible applicability of federal withholding and other taxes upon income realized in respect of the 2016 Bonds.

Information Reporting and Backup Withholding

For each calendar year in which the 2016 Bonds are outstanding, the Authority, its agents or paying agents or a broker is required to provide the IRS with certain information, including a holder’s name, address and taxpayer identification number (either the holder’s Social Security number or its employer identification number, as the case may be), the aggregate amount of principal and interest paid to that holder during the calendar year and the amount of tax withheld, if any. This obligation, however, does not apply with respect to certain U.S. Holders, including corporations, tax-exempt organizations, qualified pension and profit sharing trusts, and individual retirement accounts and annuities.

If a U.S. Holder subject to the reporting requirements described above fails to supply its correct taxpayer identification number in the manner required by applicable law or under-reports its tax liability, the Authority, its agents or paying agents or a broker may be required to make “backup” withholding of tax on each payment of interest or principal on the 2016 Bonds. This backup withholding is not an additional tax and may be credited against the U.S. Holder’s federal income tax liability, provided that the U.S. Holder furnishes the required information to the IRS.

Under current Treasury Regulations, backup withholding and information reporting will not apply to payments of interest made by the Authority, its agents (in their capacity as such) or paying agents or a broker to a Non-U.S. Holder if such holder has provided the required certification that it is not a U.S. person (as set forth in the second paragraph under “—Non-U.S. Holders” above), or has otherwise established an exemption (provided that neither the Authority nor its agent has actual knowledge that the holder is a U.S. person or that the conditions of an exemption are not in fact satisfied).

Payments of the proceeds from the sale of a 2016 Bond to or through a foreign office of a broker generally will not be subject to information reporting or backup withholding. However, information reporting (but not backup withholding) may apply to those payments if the broker is one of the following:

• a U.S. person;

• a controlled foreign corporation for U.S. tax purposes;

• a foreign person 50-percent or more of whose gross income from all sources for the three-year period ending with the close of its taxable year preceding the payment was effectively connected with a United States trade or business; or

• a foreign partnership with certain connections to the United States.

Payment of the proceeds from a sale of a 2016 Bond to or through the United States office of a broker is subject to information reporting and backup withholding unless the holder or beneficial owner certifies as to its taxpayer identification number or otherwise establishes an exemption from information reporting and backup withholding.

The preceding federal income tax discussion is included for general information only and may not be applicable depending upon a holder’s particular situation. Holders should consult their tax advisors with respect to the tax consequences to them of the purchase, ownership and disposition of the 2016 Bonds, including the tax

53 consequences under federal, state, local, foreign and other tax laws and the possible effects of changes in those tax laws.

ERISA

The Employees Retirement Income Security Act of 1974, as amended (“ERISA”), and the Code generally prohibit certain transactions between a qualified employee benefit plan under ERISA or tax-qualified retirement plans and individual retirement accounts under the Code (collectively, the “Plans”) and persons who, with respect to a Plan, are fiduciaries or other “parties in interest” within the meaning of ERISA or “disqualified persons” within the meaning of the Code. All fiduciaries of Plans, in consultation with their advisors, should carefully consider the impact of ERISA and the Code on an investment in any 2016 Bond.

State Taxes

Special Tax Counsel is also of the opinion that interest on the 2016 Bonds is exempt from personal income taxes of the State of California under present State law. Special Tax Counsel expresses no opinion as to other State or local tax consequences arising with respect to the 2016 Bonds nor as to the taxability of the 2016 Bonds or the income therefrom under the laws of any state other than California.

IN ALL EVENTS, ALL INVESTORS SHOULD CONSULT THEIR OWN TAX ADVISORS IN DETERMINING THE FEDERAL, STATE, LOCAL, FOREIGN AND OTHER TAX CONSEQUENCES TO THEM OF THE PURCHASE, OWNERSHIP AND DISPOSITION OF THE 2016 BONDS

RATINGS

S&P Global Ratings a business unit of Standard & Poor’s Financial Services LLC (“S&P”) is expected to assign a rating of “AA” to the 2016 Bonds with the understanding that AGM will issue its Policy concurrently with the delivery of the 2016 Bonds.

In addition, the Authority received underlying ratings of “A-” and “A-” from S&P and Fitch, respectively, for the 2016 Bonds based solely upon the Authority’s credit.

Such ratings reflect only the views of such organizations and any desired explanation of the significance of such ratings should be obtained from the rating agency furnishing the same, at the following addresses: S&P, 55 Water Street, New York, New York 10041 and Fitch, One State Street Plaza, New York, New York 10004. The Authority furnished the rating agencies with certain information and materials concerning the 2016 Bonds and the Authority. 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 such ratings will continue for any given period of time or that such ratings will not be revised downward or withdrawn entirely by the rating agencies, if in the judgment of such rating agencies, circumstances so warrant. Any such downward revision or withdrawal of such ratings may have an adverse effect on the market price of the 2016 Bonds.

LEGAL MATTERS

The validity of the 2016 Bonds and certain other legal matters are subject to the approving opinion of O’Melveny & Myers LLP, Los Angeles, California, Bond Counsel and Nixon Peabody LLP, Special Tax Counsel to the Authority. A complete copy of the form of Bond Counsel opinion is contained in APPENDIX D-1 hereto, and a complete copy of the form of opinion of Special Tax Counsel is contained in APPENDIX D-2 hereto. Certain matters will be passed upon for the Underwriter by its counsel, Stradling Yocca Carlson & Rauth, a Professional Corporation. Certain legal matters in connection with the Official Statement will be passed upon by O’Melveny & Myers LLP, Los Angeles, California, Disclosure Counsel to the Authority, and certain legal matters in connection with the transfer of ONT from the Department to the Authority will be passed upon my Sheppard, Mullin, Richter & Hampton LLP. The Department’s bond counsel will also deliver a defeasance opinion with respect to the 2006 Bonds.

FINANCIAL ADVISOR

The Authority has retained the services of CSG Advisors Incorporated of San Francisco, California as Financial Advisor in connection with the authorization and delivery of the 2016 Bonds. The Financial Advisor is not obligated to undertake, and has not undertaken to make, an independent verification or to assume responsibility for the accuracy, completeness or fairness of the information contained in this Official Statement.

AIRPORT CONSULTANT

The Report of the Airport Consultant has been included herein in reliance upon the knowledge and expertise of the Airport Consultant. The Airport Consultant has provided its consent to include the Report of the Airport Consultant and references to such report in this Official Statement.

AIR TRAFFIC FORECAST CONSULTANT

The Aviation Activity Forecast has been included herein in reliance upon the knowledge and expertise of the Air Traffic Forecast Consultant. The Air Traffic Forecast Consultant has provided its consent to include the Aviation Activity Forecast and references to such report in this Official Statement.

Any forecast is subject to uncertainties. Therefore, there may be differences between forecast and actual results, and those differences may be material. Furthermore, the findings and projections in the Aviation Activity Forecast are subject to a number of other assumptions that should be reviewed and considered by prospective investors. No assurances can be given that the findings and projections discussed in the Aviation Activity Forecast will be achieved. The Aviation Activity Forecast has not been and will not be updated to reflect the final pricing terms of the 2016 Bonds or other changes that may have occurred after the date of such report. Actual results may be materially adversely different from those described in such forecast. The Aviation Activity Forecast should be read in its entirety for an understanding of the forecasts, findings and projections, and the underlying assumptions.

FORWARD-LOOKING STATEMENTS

The statements contained in this Official Statement and in the Appendices hereto, and in any other information provided by the Authority, that are not purely historical, are forward-looking statements, including statements regarding the Authority’s expectations, hopes, intentions or strategies regarding the future. Prospective investors should not place undue reliance on forward-looking statements. All forward- looking statements included in this Official Statement are based on information available to the Authority on the date hereof, and the Authority assumes no obligation to update any such forward- looking statements. It is important to note that the Authority’s actual results could differ materially from those in such forward-looking statements.

The forward-looking statements herein are necessarily based on various assumptions and estimates and are inherently subject to various risks and uncertainties, including risks and uncertainties relating to the possible invalidity of the underlying assumptions and estimates and possible changes or developments in social, economic, business, industry, market, legal and regulatory circumstances and conditions and actions taken or omitted to be taken by third parties, including airlines, customers, suppliers and competitors, and legislative, judicial and other governmental authorities and officials. Assumptions related to the foregoing involve judgments with respect to, among other things, future economic, competitive and market conditions and future business decisions, all of which

are difficult or impossible to predict accurately and many of which are beyond the control of the Authority. Any of such assumptions could be inaccurate and, therefore, there can be no assurance that the forward-looking statements included in this Official Statement would prove to be accurate.

FINANCIAL STATEMENTS

For additional information concerning LAWA’s financial results with respect to ONT, see the Audited Financial Statements of Los Angeles World Airports, Ontario International Airport for the fiscal years ended June 30, 2014 and 2015 which are available on the Los Angeles World Airport’s website at www.lawa.org.

CONTINUING DISCLOSURE

In connection with the issuance of the 2016 Bonds, and to enable the Underwriter to comply with the requirements of Rule 15c2-12(b)(5) adopted by the SEC (as amended, the “Rule”), the Authority will covenant to provide, or cause to be provided, to the Municipal Securities Rulemaking Board’s Electronic Municipal Market Access System, certain annual financial information and operating data relating to the Authority and, in a timely manner, notice of certain enumerated events. See “APPENDIX F – FORM OF CONTINUING DISCLOSURE CERTIFICATE.”

The Authority has not, prior to the date of this Official Statement, entered into, and will not prior to the Transfer Date enter into (except in connection with the issuance of the 2016 Bonds), any undertakings pursuant to the Rule.

UNDERWRITING

Morgan Stanley & Co. LLC, as underwriter (the “Underwriter”), has agreed to purchase the 2016 Bonds from the Authority at a purchase price of $______(consisting of the par amount less $______of underwriting discount), pursuant to the terms of a Purchase Contract for the Bonds between the Authority and the Underwriter (the “Purchase Contract”). The Purchase Contract provides that the obligations of the Underwriter are subject to certain conditions precedent and that the Underwriter will be obligated to purchase all of the 2016 Bonds offered under the Purchase Contract if any of the 2016 Bonds offered thereunder are purchased. The 2016 Bonds may be offered and sold to certain dealers (including dealers depositing such 2016 Bonds into investment trusts, accounts or funds) and others at prices lower than the initial public offering prices. After the initial public offering, the public offering prices of the 2016 Bonds may be changed from time to time by the Underwriter.

Morgan Stanley, parent company of Morgan Stanley & Co. LLC., the underwriter of the 2016 Bonds, has entered into a retail distribution arrangement with its affiliate Morgan Stanley Smith Barney LLC. As part of the distribution arrangement, Morgan Stanley & Co. LLC may distribute municipal securities to retail investors through the financial advisor network of Morgan Stanley Smith Barney LLC. As part of this arrangement, Morgan Stanley & Co. LLC may compensate Morgan Stanley Smith Barney LLC for its selling efforts with respect to the 2016 Bonds.

VERIFICATION

Causey Demgen & Moore (the “Verification Agent”) will deliver a report stating that the Verification Agent has verified the accuracy of mathematical computations concerning the adequacy of the cash deposits initially deposited in the escrow account for the payment of principal, redemption premium and accrued interest on the Department’s 2006 Bonds on the Redemption Date pursuant to the terms of the indenture under which such 2006 Bonds were issued.

MISCELLANEOUS

Any statements made in this Official Statement involving matters of opinion or of estimates, whether or not expressly stated, are set forth as such and not representations of fact. No representation is made that any of such opinions or estimates will be realized.

All references to the Joint Powers Agreement, the Indenture and agreements with any other parties herein and in the Appendices hereto are made subject to the detailed provisions of such documents, and reference is made to such documents and agreements for full and complete statements of the contents thereof. Copies of such documents are available for review at the offices of the Authority which are located at 303 East B Street, Ontario, CA 91764. This Official Statement is not to be construed as a contract or agreement between the Authority and the owners of any of the 2016 Bonds.

AUTHORIZATION

The Authority has authorized the distribution of this Official Statement. This Official Statement has been duly executed and delivered by the Chief Executive Officer on behalf of the Authority.

ONTARIO INTERNATIONAL AIRPORT AUTHORITY

By: Kelly J. Fredericks Chief Executive Officer

57 [THIS PAGE INTENTIONALLY LEFT BLANK]

APPENDIX A

REPORT OF THE AIRPORT CONSULTANT [THIS PAGE INTENTIONALLY LEFT BLANK] !"

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~~Report of the Airport Consultant, Series 2016 Bonds *~~

~~APPENDIX B~~

~~DEMAND FORECAST METHODOLOGY AND RESULTS [THIS PAGE INTENTIONALLY LEFT BLANK]~~

~~ONTARIO INTERNATIONAL AIRPORT~~

~~DEMAND FORECAST METHODOLOGY AND RESULTS~~

~~Eric Ford August 26, 2016~~

~~Rex Edwards Table of Contents~~

~~1.0 Executive Summary ...... 3~~

~~1.1 Background ...... 3~~

~~1.2 Forecast ...... 4~~

~~2.0 Ontario International Airport ...... 5~~

~~2.1 Seat-Departures ...... 5~~

~~2.2 Enplanements ...... 6~~

~~2.3 Enplanement Mix ...... 7~~

~~2.4 Resident/Visitor Mix ...... 7~~

~~2.5 Largest ONT Markets ...... 8~~

~~2.6 Passenger Fares ...... 9~~

~~2.7 Seat Factor ...... 9~~

~~2.8 General Aviation Operations ...... 10~~

~~2.9 ONT’s Domestic O&D Market Share of the Los Angeles Region ...... 11~~

~~3.0 “Low” and “Medium” Short-Term Traffic Forecast (2016-2021) ...... 12~~

~~3.1 Service...... 12~~

~~3.2 Passengers ...... 17~~

~~4.0 “High” Short-Term Traffic Forecast (2016-2021) ...... 19~~

~~4.1 Projecting ONT Traffic Based on BUR/LGB/SNA Traffic Trends ...... 19~~

~~4.2 Projecting ONT Seats ...... 20~~

~~4.3 Projecting ONT Total Operations ...... 21~~

~~5.0 Unconstrained Long-Term Forecast Growth Rates ...... 23~~

~~5.1 Factors Affecting Passenger Demand and Activity ...... 23~~

~~5.2 Economic-Based Forecast Methodology and Assumptions ...... 24~~

~~Page 1 5.3 Conclusions ...... 27~~

~~6.0 Long-Term Commercial Forecast (2022-2045) ...... 28~~

~~6.1 ONT Enplanements through FY 2045 ...... 28~~

~~6.2 ONT Seats through FY 2045 ...... 29~~

~~6.3 ONT Total Operations through FY 2045 ...... 30~~

~~7.0 All-Cargo Forecast Methodology and Results ...... 33~~

~~7.1 Historical Cargo Activity ...... 33~~

~~7.2 All-Cargo Flight Forecasts ...... 34 8.0 General Aviation Forecast ...... 37~~

~~8.1 ONT Operations ...... 37~~

~~9.0 Appendix ...... 38~~

~~Page 2 1.0 Executive Summary~~

Campbell-Hill Aviation Group, LLC (“Campbell-Hill”) has been retained to develop a passenger, operation and landed weight forecast for Ontario International Airport (ONT) through 2045. The forecast analysis is based on publicly available data.

~~1.1 Background~~

~~The Los Angeles Combined Statistical Area (CSA) has the second largest population in the U.S.1 and ranks fifth in terms of number of flight departures and fourth in terms of seat-departures in 2015.~~

The dominant airline at ONT is Southwest Airlines, which is the largest airline in the U.S. based on domestic O&D passengers for the year ended Q4 20154. Financially, Southwest is a very well-run airline and consistently ranks among the highest for customer satisfaction surveys.

Over the next five years, ONT has significant upside to grow its passenger share of the Los Angeles region based on constraints on traffic growth at several of the region’s other airports (SNA and LGB), growing congestion at the largest airport in the region (LAX), the return of the Airport’s management from LAWA allowing for more focus on ONT and a new air service incentive program to attract air service back to the airport. Future schedules already show ONT year-over-year seat capacity up 5.2% in Q4 2016 and up 5.9% in Q1 2017.

The region’s largest airport, LAX, had approximately 75 million passengers in 2015, and at current growth rates should exceed 80 million annual passengers in 2016, putting tremendous pressure on already heavily constrained facilities. A rising Cost Per Enplaned Passenger (CPE) will make secondary airports in the region relatively more attractive to serve, however, several of these airports are also constrained.

The region’s second largest airport, SNA, had 10.2 million passengers in 2015, and at current growth rates will hit its passenger limitation of 10.8 million in 2016, capping any further growth at this airport through 2020. At LGB, noise limitations limit the number of large commercial aircraft operations to 50 daily departures. BUR is limited to 14 gates.

In mid-August, the Ontario International Airport Authority (OIAA) approved an air service incentive program to attract domestic and international air service. The incentive program is very competitive compared to those plans offered by other U.S. airports that offer one.

1 U.S. Census Bureau, 2014 American Fact Finder. 2 The five airports in the region include Los Angeles International Airport, John Wayne Airport, Ontario International Airport, Bob Hope Airport and Long Beach Airport. 3 Ranking based on 2014 FAA Passenger Boarding (Enplanement) and All-Cargo Data for U.S. Airports. 4 The latest quarter for which public information is available for from the DOT.

~~Page 3 1.2 Forecast~~

~~A near-term monthly forecast (through June 2021) is based on 2016 schedules filed by the air carriers at ONT, and anticipated service changes for 2017 through 2021. Key forecast assumptions include:~~

~~ Anticipated schedule changes Average seats per departure Percentage of seats filled (seat factor)~~

Beyond 2021, longer-term demographic variables for ONT, the Los Angeles region and National demographic trends were considered to derive ONT passenger levels. Growth rates from the Federal Aviation Administration’s (FAA) Terminal Area Forecast (TAF) were also considered.

On an unconstrained basis (assuming no airport facility or airfield constraints), ONT commercial passenger levels should reach 4.8 million enplanements by FY 2045 in a “medium” forecast, including over 0.2 million international enplanements. The “medium” forecast assumes service growth from several incumbent airlines at the airport, and the ability to attract an Ultra-Low Cost Carrier (ULCC) operation at ONT by 2021. After 2021, longer term growth rates are applied to generate the forecast.

The “low” forecast of 3.98 million enplanements by FY 2045 is based on a modest expansion by ONT’s incumbent airlines through 2021 (with longer term growth rates applied thereafter). An alternative “high” forecast of 5.7 million enplanements by FY 2045 assumes that ONT enplanements return by 2021 to the traffic trends experienced by the other secondary airports in the Los Angeles region (SNA, BUR and LGB) since 2007.

The findings and projections in this forecast are subject to a number of assumptions that should be reviewed and considered. No assurances can be given that the projections and expectations discussed in the forecast will be achieved. Actual results may differ from the forecasts in this report.

~~Page 4 2.0 Ontario International Airport~~

~~2.1 Seat-Departures~~

ONT seat-departures were relatively consistent from FY 2001 through FY 2008, averaging approximately 4.8 million per year. FY 2008 was the peak with 4.93 million seat-departures contributed to by the ExpressJet focus city operation at ONT during 2007/2008. Starting in late 2008, with the failure of ExpressJet resulting in the loss of nonstop service to many markets that was not replaced, the onset of higher fuel prices, the Great Recession and an in-attentive air service development program, seat capacity at ONT fell dramatically, falling to 2.5 million seat-departures by FY 2015.

~~Figure 1: Scheduled Seat-Departures at ONT (in Millions)~~

~~Source: U.S. DOT T-100 Report~~

~~Southwest has been the largest airline at ONT and had over 60% of the seat-departures at the Airport FY 2015.~~

~~Page 5 Figure 2: Scheduled Seat-Departures at ONT by Airline (in Millions)~~

~~Source: U.S. DOT T-100 Report~~

~~2.2 Enplanements~~

ONT handled an average of approximately 3.5 million enplanements between FY 2001 and FY 2008. Enplanements dropped starting in late 2008 for the reasons mentioned earlier, falling to a low of 2.0 million for FY 2014. Enplanements rebounded slightly for FY 2015, but remain significantly below their highs.

~~Figure 3: Enplaned Passengers at ONT (in Millions)~~

~~Source: LAWA Airport Statistics~~

~~Page 6 2.3 Enplanement Mix~~

ONT’s mix of enplanement traffic is predominantly domestic U.S. FY 2011, 96% of all enplanements at the airport were domestic enplanements, with a small percentage of international enplanements and connecting enplanements. By FY 2015, the percentage of enplanements that were domestic U.S. fell to 92% as a result of growth in service to Mexico on Aeromexico and Volaris.

~~Figure 4: Historical ONT Enplanements by Type (in Millions)~~

~~Source: LAWA Airport Statistics~~

~~2.4 Resident/Visitor Mix~~

The split between resident and visitor traffic has remained relatively stable over the historical period, varying between 56% and 59% resident traffic. This relative balance of O&D traffic is typical for airports in large metropolitan regions.

~~Page 7 Figure 5: Resident % Share of Historical ONT O&D Traffic~~

~~Source: U.S. DOT O&D Survey~~

~~2.5 Largest ONT Markets~~

ONT’s 12 largest O&D passenger destinations all have nonstop service. Figure 6 below shows the top 15 markets out of ONT. The top markets include large West Coast destinations such as Seattle, Oakland and San Francisco as well as carrier hubs including Phoenix, Denver and Dallas/Ft. Worth. Several large business destinations are missing from the list, such as New York, Washington D.C. and Boston.

~~Figure 6: Largest ONT O&D Destinations (Passengers Daily Each Way)~~

~~Source: U.S. DOT O&D Survey, YE Q2 2015~~

~~Page 8 2.6 Passenger Fares~~

Average domestic passenger fares at ONT have steadily increased since FY 2002, with the largest jump in fares occurring between FY 2010 and FY 2012. Consolidation, industry capacity discipline and fuller aircraft have driven passenger fares higher since FY 2010.

~~Figure 7: Domestic O&D Average Fare~~

~~Source: U.S. DOT Domestic O&D Survey~~

~~2.7 Seat Factor~~

~~Seat factor (the percentage of seats occupied) has grown at ONT from the mid/high-60s to over 80% by FY 2015. Since FY 2010, ONT’s seat factor has grown 10 percentage points.~~

~~For ONT’s largest carrier Southwest, for FY 2015 its seat factor was 78%, which is up significantly from the low/mid-60s they ran in the early 2000s.~~

~~Page 9 Figure 8: Seat Factor - % of Seats Filled at ONT~~

~~Source: U.S. DOT T-100 Report~~

~~2.8 General Aviation Operations~~

~~General aviation operations at the airport fell from a peak of nearly 35,000 FY 2002 to below 14,000 by FY 2009. Since that low, operations have been trending higher and were nearly 17,000 by FY 2015.~~

~~Figure 9: General Aviation Operations at ONT~~

~~Source: LAWA Airport Statistics~~

~~Page 10 2.9 ONT’s Domestic O&D Market Share of the Los Angeles Region~~

Between FY 2001 and FY 2008, ONT’s share of Los Angeles region domestic O&D passengers was consistently around 12%. However, since that time, ONT’s share of the region has declined significantly, paralleling the decline in ONT’s enplanements. ONT’s share of the Los Angeles region domestic market shrunk to 7% by FY 2015.

~~Figure 10: ONT % Share of Los Angeles Region Domestic O&D Traffic~~

~~Source: U.S. DOT O&D Survey~~

~~As previously mentioned in Section 1.1, ONT has significant upside for growing its share of the Los Angeles region as a result of constraints at the other airports.~~

~~Page 11 3.0 “Low” and “Medium” Short-Term Traffic Forecast (2016-2021)~~

~~3.1 Service~~

~~The following total commercial operations (commercial air traffic movements, or ATMs) and total seats are scheduled at ONT for FY 2016:~~

~~Figure 11: FY 2016 Commercial Operations and Total Seats~~

~~Operations Seats Airline (in 000s) (in millions)~~

Southwest Airlines 21.2 3.10 United Airlines 7.8 0.44 American Airlines 6.1 0.85 Alaska Airlines 3.6 0.38 Delta Air Lines 2.1 0.18 US Airways 1.1 0.14 Aeromexico 0.6 0.10 Volaris 0.5 0.09 Total 43.1 5.29

~~Source: Innovata Schedule~~

The commercial air service schedule for ONT (which will be referred to as the “baseline” schedule) is based on schedules filed by the airlines with commercial schedule data providers. The schedules are detailed, with information as to airline, flight number, day of week of operation, origin5 and destination6, aircraft type7 and flight arrival and departure times. Actual operations will be lower than scheduled operations as operational disruptions (cancellations) can occur.

~~For FY 2016 at ONT, the average seats per departure is 123.2, which is up 0.6% year-over-year.~~

~~Figure 12: FY 2016 Operations and Seats by Quarter~~

~~Operations YOY Seats YOY Avg Seats/ Quarter (in 000s) Change (in millions) Change Departure~~

~~Q3 2015 10.9 1.2% 1.32 -0.6% 121.6 Q4 2015 10.7 0.6% 1.35 2.2% 126.4 Q1 2016 10.4 6.7% 1.26 7.2% 121.3 Q2 2016 11.0 2.1% 1.36 4.4% 123.5~~

~~Source: Innovata Schedule~~

~~5 The airport at which a flight began 6 The airport at which a flight ended 7 Manufacturer and model of the aircraft it is and how many seats are onboard~~

Page 12 For the short-term forecast period through FY 2021, we have assumed an industry standard 99.5% completion factor on all scheduled operations. In a perfect operational world, all scheduled flights will operate, but this does not happen in reality. Cancellations due to such things as weather, crew issues or maintenance prevent a complete schedule from being operated. The final forecast reflects this reality.

~~For the air service schedules through FY 2021, the baseline schedule is modified with operations increasing based on anticipated new services for all carriers.~~

~~For the “Low” forecast, there are several new market opportunities that we anticipate. Starting in late 2016, Southwest Airlines will begin one daily roundtrip to Portland, OR (PDX).~~

In late 2017 and beyond for the “Low” forecast, we anticipate several other new services including nonstop service to New York Kennedy Airport (JFK) with one daily roundtrip and new once daily Southwest service to San Francisco International Airport (SFO) as Southwest is aircraft constrained in the short-term, but looking for short-haul expansion opportunities. Internationally we anticipate seasonal, less-than-daily service to start on Volaris to Morelia (MLM) and Del Bajío International Airport (BJX).

~~Figure 13: “Low” Forecast Market Opportunities~~

In addition to the new services in the “Low” forecast, other adjustments were made to the forecast, including United removing their daily nonstop regional jet service to Houston George Bush Intercontinental Airport (IAH) effective late June 2016 but up-gauging regional aircraft to mainline jet aircraft to Denver International Airport (DEN). Additionally, some minor adjustments were made to aircraft type and/or frequency in some select markets (discussed further below).

For the “Medium” forecast, we take the “Low” forecast and add several more additional market opportunities by June 2021. We would anticipate Southwest Airlines adding one daily nonstop flight to

Page 13 Houston Hobby (HOU) in mid-20178 and a new carrier adding some service at ONT in 2018 (due to lower CPE’s at ONT relative to LAX as well as the inability to grow more at LAX) starting with nonstop service to Denver (3 daily nonstop flights), Chicago O’Hare (1 daily nonstop flight) and George Bush Intercontinental Airport (1 daily nonstop flight).

Beyond 2018 we anticipate a carrier announcing nonstop service to Boston with one daily nonstop flight, Alaska starting international service out of ONT with seasonal, less than daily service to Los Cabos (SJD) and a new carrier starting new daily service to Orlando.

~~Figure 14: “Medium” Forecast Market Opportunities~~

~~Similar to the “Low” forecast, some minor adjustments were made to aircraft type and/or frequency in high load factor markets.~~

~~8 Southwest started DAL-LAX and DAL-SNA service in late 2014 with the expiration of the Wright Amendment and it starts DAL-BUR service in early 2016.~~

~~Page 14 For the “Low” and “Medium” forecasts we expect ONT total operations to grow as follows:~~

~~Figure 15: Total ONT Operations by Year~~

~~Total ONT Operations (000s) Time Period "Low" "Medium"~~

~~YE June 2016 43.1 43.1 YE June 2017 43.5 43.7 YE June 2018 44.5 46.0 YE June 2019 45.7 52.4 YE June 2020 46.1 54.0 YE June 2021 46.1 54.5~~

~~Source: Innovata Schedule for year-ended June 2016, forecast through FY 2021~~

~~On a daily basis, departures from ONT are as follows:~~

~~Figure 16: Average Daily ONT Departures by Year~~

~~Average Daily Departures Time Period "Low" "Medium"~~

~~YE June 2016 59.0 59.0 YE June 2017 59.6 59.8 YE June 2018 60.9 63.0 YE June 2019 62.6 71.8 YE June 2020 63.1 73.9 YE June 2021 63.2 74.7~~

~~Source: Innovata Schedule for year-ended June 2016, forecast through FY 2021~~

As noted above, the aircraft type used by some airlines is expected to change. Most notably, American Airlines will be retiring MD-80 aircraft (140 seats) and it is expected that they will replace these aircraft in ONT routes with 737-800 aircraft (160 seats) by the end of CY 2017. Also as noted above, in high load factor markets an up-gauge to a larger equipment was anticipated (example market AA ONT-PHX, changing from 3 daily A319/2 daily A320 flights to 2 daily A319/3 daily A320 flights) or a minor change in frequency was made. Over the short-term, the expected change in average seats per departure will be the following:

~~Page 15 Figure 17: Average Seats per Departure at ONT~~

~~Average Seats/Departure Time Period "Low" "Medium"~~

~~YE June 2016 123 123 YE June 2017 127 127 YE June 2018 129 129 YE June 2019 131 132 YE June 2020 131 133 YE June 2021 131 133~~

~~Source: Innovata Schedule for year-ended June 2016, forecast through FY 2021~~

~~The higher average seats per departure for the “Medium” forecast versus the “Low” forecast are a result of high-density new ONT carrier aircraft.~~

~~The result is an increase in seat capacity at ONT of:~~

~~Figure 18: ONT Total Seats by Year~~

~~Forecast Total Seats (million) Time Period "Low" "Medium"~~

~~YE June 2016 5.29 5.29 YE June 2017 5.52 5.55 YE June 2018 5.74 5.94 YE June 2019 5.98 6.91 YE June 2020 6.03 7.15 YE June 2021 6.05 7.25~~

~~Source: Innovata Schedule for year-ended June 2016, forecast through FY 2021~~

~~With landed weights projected to be:~~

~~Figure 19: ONT Landed Weights by Year~~

~~ONT Landed Weight (billion) Time Period "Low" "Medium"~~

~~YE June 2016 2.67 2.67 YE June 2017 2.89 2.90 YE June 2018 2.99 3.11 YE June 2019 3.11 3.60 YE June 2020 3.14 3.72 YE June 2021 3.14 3.76~~

~~Source: Innovata Schedule for year-ended June 2016, forecast through FY 2021~~

~~Page 16 3.2 Passengers~~

The short-term forecast is based on a supply driven model. Once the supply of seats9 has been established, passenger demand is forecasted. Passenger demand is forecasted by projecting the number of seats filled on each of the flights.

For existing services, ONT reported traffic figures for January 2016 through June 2016 show that traffic growth has fallen short of the seat growth at the airport. Through the first six months of 2016 passengers grew only 0.4% year-over-year despite 4.9% year-over-year seat growth in Q1 and Q2 2016.

This trend diverges from what was observed in the second half of 2015, where capacity, passengers and the percentage of seats being filled were all growing. This trend also diverges from what is occurring at the other LA Area airports, where seat capacity January-May was up 8.2% and passengers were up 7.6% year-over-year – traffic growth nearly matching capacity growth. Domestic O&D average fare data for Q1 2016 shows that YOY fares for ONT were unchanged YOY, while fares at LAX, LGB and SNA fell suggesting some traffic leakage to the other airports. With Southwest adding new nonstop service at ONT in late 2016, and high fare legacy carrier United exiting IAH, it is anticipated that this divergence of fare trends between airports will be short-lived as the mix of low fare seats at ONT grows. Forecast growth by Southwest and Volaris will also lower ONT fares relative to the other area airports resulting in traffic shifting towards ONT and away from the other airports.

As a result, for the FY 2016 and FY 2017 forecasts, rather than marginally reducing the forecasted percentage of seats filled based on the scheduled growth in capacity, larger reductions in the forecasted percentage of seats filled through the first quarter of 2017 are being forecast to reflect the recent weakness in traffic. Beginning in the second quarter of 2017, the year-over-year growth rates in percentage of seats filled are forecast to return closer to the national average (although still not as strong). This is done for several reasons, (1) by early 2017 ONT will be forecast to have a much lower base of percentage of seats being filled – this lower base is then what the future (2018 and beyond) forecasts will be built off of, (2) it is expected that with transfer of control of the airport and a raised level of awareness of the airport, that traffic will begin to grow again similar to trends observed in late 2015, (3) constraints at the other area airports and the new air service incentive program will result in more capacity and traffic at ONT.

For new anticipated services, we looked at seat factors on similar services by carrier. For example, for Southwest service HOU-ONT, the seat factors of HOU-LA Area were used. For Delta service MSP- ONT, the seat factors of MSP-LA Area were used and then discounted slightly in the first year of service for ONT.

In the “Medium” forecast, with new service from a new ONT carrier, we modeled a slightly lower projected seat factor for incumbent carriers flying nonstop in head-to-head markets (such as Denver, Chicago and Houston) for the first year of service, and a very small impact the second year. There was also a very small impact to incumbent carriers in a few select hub markets.

Multiplying seat-departures by expected seat factor yields the number of enplaned passengers by month and then by fiscal year. This figure represents the number of enplaned passengers on flights to/from ONT. Each ONT service is categorized as either “domestic” or “international”. Connecting

~~9 Total seats are divided by 2 in order to arrive at seat-departures.~~

~~Page 17 enplanements10 are assumed to be domestic only and for the 2016-2021 forecast are assumed to be 4.3% of total enplanements, which is equal to the 10-year weighted average at the airport.~~

~~Figure 20: Total Enplanements at ONT~~

~~Enplaned Passengers (million) Time Period "Low" "Medium"~~

~~YE June 2016 2.11 2.11 YE June 2017 2.15 2.16 YE June 2018 2.25 2.32 YE June 2019 2.36 2.57 YE June 2020 2.42 2.81 YE June 2021 2.47 3.01~~

~~Source: Forecast through FY 2021~~

~~10 Passengers using ONT as a connecting airport, rather than beginning or ending their journey at ONT.~~

~~Page 18 4.0 “High” Short-Term Traffic Forecast (2016-2021)~~

~~4.1 Projecting ONT Traffic Based on BUR/LGB/SNA Traffic Trends~~

~~The “High” forecast is a top-down approach, rather than the bottom-up approach of the “Low” and “Medium” forecasts.~~

The first step in the “High” forecast is to estimate where ONT domestic traffic would have been had it behaved similar to the combination of BUR, LGB and SNA domestic traffic between 2007 and 201511. Rather than dropping over 40% over this time frame, ONT traffic would have dropped by only 15%.

~~This newly derived estimate for ONT traffic in 2015 is then grown by the FAA TAF growth rate between 2016 and 2021 to get to a year-ended June 2021 traffic estimate.~~

~~The “High” forecast assumes that ONT will achieve this higher traffic estimate by FY 2021. It must grow at a 11% CAGR between FY 2017 and FY 2021 traffic in order to get to BUR/LGB/SNA trends12.~~

~~Figure 21: Estimated “High” Forecast ONT traffic by FY 2021 (Enplanements in Millions)~~

11 The traffic decline compares year-ended June 2015 to the three-year average of July 2004 through June 2007, prior to ExpressJet building up operations at Ontario. Domestic traffic is used as it represents the vast majority of the airports traffic. 12 Year-ended June 2016 traffic is anticipated to be the same as the “Low” or “Medium” forecast which is capacity and seat factor based.

~~Page 19 Comparing the “Low”, “Medium” and “High” forecasted passenger enplanements through FY 2021:~~

~~Figure 22: Total Enplanements at ONT~~

~~Enplaned Passengers (million) Time Period "Low" "Medium" "High"~~

~~YE June 2016 2.11 2.11 2.11 YE June 2017 2.15 2.16 2.34 YE June 2018 2.25 2.32 2.61 YE June 2019 2.36 2.57 2.91 YE June 2020 2.42 2.81 3.24 YE June 2021 2.47 3.01 3.58~~

~~Source: Forecast through FY 2021~~

~~4.2 Projecting ONT Seats~~

~~After the “High” forecast for enplaned passengers has been derived for FY 2017 through FY 2021, the next step is to forecast seats.~~

The seat forecast is calculated by dividing enplaned passengers by the percentage of seats that are filled by fiscal year. The percentage of seats filled for FY 2017 through FY 2021 was estimated by taking the FY 2016 estimate of seats filled of 79.7% from the “Low” forecast (there are no differences between any of the forecasts for FY 2016) and growing the seat factor by each year through FY 2021 with the same growth factor used in Section 3.2.

~~The resulting estimate for percentage of seats filled for all three forecasts are as follows:~~

~~Figure 23: ONT Percentage of Seats Filled7 Forecast of Percentage of Seats Filled Time Period "Low" "Medium" "High"~~

~~YE June 2016 79.7% 79.7% 79.7% YE June 2017 77.9% 78.0% 80.1% YE June 2018 78.4% 78.2% 80.5% YE June 2019 79.0% 74.4% 80.9% YE June 2020 80.2% 78.6% 81.3% YE June 2021 81.7% 82.9% 81.7%~~

~~Source: Forecast through FY 2021~~

~~Note the “Medium” forecast lower load factors in FY 2018 through FY 2020 as a result of the initial impact of a new ONT carrier in terms of growth in seats.~~

Page 20 Dividing “High” forecast enplaned passengers by fiscal year by the estimated percentage of seats by filled by fiscal year yields the forecast for seat-departures. Multiplying seat-departures by 2 results in total seats in the market. The table below compares the total seats for all three forecasts:

~~Figure 24: ONT Total Seats by Year~~

~~Forecast Total Seats (million) Time Period "Low" "Medium" "High"~~

~~YE June 2016 5.29 5.29 5.29 YE June 2017 5.52 5.55 5.85 YE June 2018 5.74 5.94 6.48 YE June 2019 5.98 6.91 7.20 YE June 2020 6.03 7.15 7.98 YE June 2021 6.05 7.25 8.76~~

~~Source: Forecast through FY 2021~~

~~4.3 Projecting ONT Total Operations~~

After the “High” forecast for total seats has been derived, the next step is to forecast total operations. Operations are forecast by dividing the number of total seats by a forecast of seats per departure by fiscal year through FY 2021.

~~For the “High” forecast, the average number of seats per departure used the same values as the “Medium” forecast.~~

~~Figure 25: Average Seats per Departure at ONT~~

~~Average Seats/Departure Time Period "Low" "Medium" "High"~~

~~YE June 2016 123 123 123 YE June 2017 127 127 127 YE June 2018 129 129 129 YE June 2019 131 132 132 YE June 2020 131 133 133 YE June 2021 131 133 133~~

~~Source: Forecast through FY 2021~~

~~Dividing “High” forecast total seats by the “High” forecast average seats per departure results in the forecast for total operations by fiscal year:~~

~~Page 21 Figure 26: Total ONT Operations by Year~~

~~Total ONT Operations (000s) Time Period "Low" "Medium" "High"~~

~~YE June 2016 43.1 43.1 43.1 YE June 2017 43.5 43.7 46.9 YE June 2018 44.5 46.0 51.1 YE June 2019 45.7 52.4 55.1 YE June 2020 46.1 54.0 60.4 YE June 2021 46.1 54.5 65.7~~

~~Source: Forecast through FY 2021~~

Landed weights for the “High” forecast is derived by looking at the relationship between landed weights and seats in the “Low” and “Medium” forecasts for FY 2017 through FY 2021 and applying that ratio for the “High” forecast. The resulting landed weights through FY 2021 are:

~~Figure 27: ONT Landed Weights by Year~~

~~ONT Landed Weight (billion) Time Period "Low" "Medium" "High"~~

~~YE June 2016 2.67 2.67 2.67 YE June 2017 2.89 2.90 3.02 YE June 2018 2.99 3.11 3.32 YE June 2019 3.11 3.60 3.67 YE June 2020 3.14 3.72 4.04 YE June 2021 3.14 3.76 4.42~~

~~Source: Forecast through FY 2021~~

~~Page 22 5.0 Unconstrained Long Term Forecast~~

An unconstrained forecast in the context of commercial airports predicts passenger demand absent any additional future constraints on airline service levels due to infrastructure or other limitations.13 Future passenger levels at ONT will result from the market interaction between (1) the demand for air travel between Los Angeles and various airport markets and (2) the availability, efficiency and cost of flight services to and from those markets.

Several different forecast methodologies were considered for developing the long term forecast for ONT. First we looked at passenger demand at ONT and separated it into origin and destination (O&D) passengers whose air trip originates or terminates at ONT and connecting passengers traveling between two points other than ONT (this figure was very small). O&D passengers were further subdivided in to resident passengers whose round trip originates at ONT and visitor passengers who originate their travel at another airport.14

~~5.1 Factors Affecting Passenger Demand and Activity~~

O&D passenger demand, in general, depends on demographic and economic factors, in combination with factors affecting the efficiency of air travel relative to alternative modes and alternative travel options. Changes in average or median personal and business income affect the ability to purchase air travel, while population growth provides a baseline trend in demand. Local factors affect the resident passenger demand, while origin market economic and demographic factors affect visitor travel.15

The small volume of connecting passengers at ONT is also affected by similar economic/demographic and air fare factors for the specific origin and destination markets, and is also affected by airline strategies for serving those O&D markets that can connect via ONT flights. In the unconstrained forecast, it is assumed that connecting passengers grow at the average rate of O&D passenger growth.

13 The historical passenger and aircraft activity levels on which this unconstrained forecast is based may have been affected by past and present constraints that directly limit service growth (e.g., runway length) or indirectly through fare levels and marketing strategy. This unconstrained forecast assumes no additional constraints, while fare and service levels are assumed to normalize to regional averages. 14 An insignificant number of airport passengers travel on one-way or multi-market itineraries, but this analysis assumes all passengers complete a round-trip between ONT and another airport market. 15 Underlying all air passenger demand is the desirability of air travel between two cities, whether for business or leisure purposes. While it is possible that there can be significant shifts for particular markets (e.g., the development of a new tourist destination such as Branson, MO), it is reasonable to assume that aggregate ONT demand would primarily be affected by economic/demographic factors for a mature market such as Los Angeles.

~~Page 23 5.2 Economic-Based Forecast Methodology and Assumptions~~

~~This section describes two methodologies used to develop unconstrained enplanement forecasts involving ONT:~~

~~1. ONT Local Economic-Based Forecast 2. ONT Market Share of Regional Economic-Based Forecast~~

~~5.2.1 ONT Local Economic-Based Forecast~~

~~Unconstrained passenger forecasts are typically based on the following general methodology and assumptions:~~

~~ The patterns of historical passenger traffic are representative of unconstrained demand during the forecast period (see Section 2).~~

~~ Resident O&D passenger levels are correlated with local/regional demographic and/or economic trends and average yield levels.~~

~~ Visitor O&D passenger levels are correlated with national demographic and/or economic trends and average yield levels.~~

~~ In the short term (2016-2021 in this case), passenger traffic levels are determined by schedules and other airline-specific factors (see Section 3).~~

In the long-term (2022-2045), total passenger traffic levels will be determined by the projected growth in total O&D passengers with connecting passengers calculated based as a fixed share of total passengers. This assumes that O&D traffic growth will determine the capacity levels and that load factors will remain constant. It is assumed that connecting passengers will grow at similar growth rates to O&D passengers.

The forecast of resident and visitor O&D passengers are typically based on regression models that relate historical passenger levels to regional and national economic/demographic statistics. As will be shown below, this regression-based approach did not produce reasonable results at the airport-level for ONT due to factors that constrained service levels, high fare levels, and the airport’s diminishing role in the broader regional airport market.

~~Regressions relating O&D passengers to ONT’s local metro area16 (ONT MSA) were based on the following data:~~

~~ Historical O&D domestic and international passengers from 1990 to 2014 from DIIO.17 Historical domestic and international average yield from 1990 to 2014 from DIIO.~~

16 The Riverside-San Bernardino metropolitan statistical area including Riverside and San Bernardino counties. 17 There was no adjustment to the limited number of international passengers to account for traffic on foreign-flag carriers; this assumes the same patterns of growth for foreign-flag passengers as for U.S.-flag traffic.

Page 24 Historical data on population, total personal income and regional domestic product from the BEA’s regional data series. All monetary values were converted to constant 2009 dollars using BEA’s national personal consumption expenditure price index (resulting in “real” values).

As a market that is not a major leisure or business destination, the relationship of resident travel patterns to local economic conditions are critical. As shown in Figure 28, ONT’s O&D passengers and various demographic and economic statistics do not correlate over the 1990 to 2014 historical period particularly after 2006 when fare levels increased and passengers declined even after the 2008-2009 recession.

~~Figure 28: ONT Resident O&D Traffic versus ONT MSA Demographic and Yield Indices~~

~~1.8~~

~~1.6~~

~~1.4~~

~~1.2~~

~~0.8 Index (1990 = 1.00) 0.6~~

~~0.4~~

~~0.2~~

~~0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 O&D Yield Population Income GDP~~

~~Source: BEA local personal income statistics; U.S. DOT O&D Survey~~

The resulting regression equations developed by comparing resident and visitor passenger growth to each of the economic factors in combination with average yields. As shown, none of the economic factors had

Page 25 a positive effect on passenger traffic as would be expected and, while the relationship between traffic and yields was appropriate (i.e., higher fares reduces traffic), the coefficients in most cases were not in a reasonable range for travel elasticity factors.18 It is probable that other factors that affected service levels (e.g., high airport costs) had a greater effect on traffic thereby obscuring the influence of the local economy.

Resident O&D Passengers ln(Resident Passengers) = 20.2 + -0.7 * ln(ONT MSA Personal Income 2009$) + -1.4 * ln(Average Yield 2009$) ln(Resident Passengers) = 13.11 + -0.6 * ln(ONT MSA Domestic Product 2009$) + -0.3 * ln(Average Yield 2009$) ln(Resident Passengers) = 20.62 + -1.3 * ln(ONT MSA Population 2009$) + -1.1 * ln(Average Yield 2009$) ln(Resident Passengers) =8.94 + -0.3 * ln(Average Yield 2009$)

Visitor O&D Passengers ln(Visitor Passengers) = 23.03 + -0.8 * ln(U.S. Personal Income 2009$) + -1.2 * ln(Average Yield 2009$) ln(Visitor Passengers) = 22.85 + -0.7 * ln(U.S. Domestic Product 2009$) + -0.8 * ln(Average Yield 2009$) ln(Visitor Passengers) = 37.9 + -1.1 * ln(U.S. Population 2009$) + -2.2 * ln(Average Yield 2009$) ln(Visitor Passengers) = 8.67 + -0.3 * ln(Average Yield 2009$)

~~The regression analysis was also applied using total passenger traffic (residents and visitors) compared to the economic factors and average yield. None of the regressions produced useful results.~~

~~5.2.2 ONT Share of Regional Economic-Based Forecast~~

An alternative methodology that can be used for airports that compete in a multi-airport region is a combination of economic-based forecast of regional passengers with a projection of future market shares for a single airport. In this case, a regression-based forecast was developed using domestic and international traffic and average yields for the five regional airports (LAX, BUR, SNA, LGB, and ONT) compared with economic factors for the Los Angeles Consolidated Metro Area (LA CSA) that includes the ONT MSA.

~~The same regression analysis as used for the ONT local market was applied to domestic and international O&D traffic and the various economic factors.~~

~~Domestic O&D Passengers ln(Domestic Passengers) = 6.8 + 0.31 * ln(LA CSA Personal Income 2009$) + -0.1 * ln(Average Yield 2009$)~~

~~International O&D Passengers~~

18 The Southern California Association of Governments (SCAG) estimated yield elasticities ranging from -0.25 to - 0.70 for domestic traffic at Southern California airports including ONT. The only coefficient s close to or within this range involved the Domestic Product regressions for which the economic coefficient had the wrong sign.

~~Page 26 ln(International Passengers) =-14.5 + 1.52* ln(LAX CSA Personal Income 2009$) + 1.1 * ln(Average Yield 2009$).~~

~~These regressions also do not present logical results in terms of the signs for the yield coefficient, so the regression-based forecasts were not pursued any further.~~

~~5.3 Conclusion~~

The regressions that typically apply to passenger forecasts for airports were not valid for ONT at either the local or regional level. An alternative methodology based on short-term service changes and the FAA TAF forecast growth rates was used instead.

~~Page 27 6.0 Long-Term Commercial Forecast (2022-2045)~~

The “Low”, “Medium” and “High” forecasts for FY 2022 through FY 2045 take the year-over-year enplanement growth trends from the FAA TAF, coupled with the growth trends in percentage of seats filled and average seats per departure to derive the seat, operation and landed weight forecasts.

~~6.1 ONT Enplanements through FY 2045~~

For each of the three forecasts, “Low”, “Medium” and “High”, the year-over-year growth rates are applied to the FY 2021 enplanement forecast to derive enplanements out through FY 2045. The graph and table below provides a summary snapshot of ONT’s enplanement counts. For reference purposes, the FAA TAF forecast is also shown on the graph:

~~Figure 29: ONT Enplanement Overview Through FY 2045~~

~~Source: Forecast through FY 2045~~

~~Page 28 Figure 30: Summary of Enplanements Through FY 2045~~

~~Enplaned Passengers (million) Time Period "Low" "Medium" "High"~~

YE June 2021 2.47 3.01 3.58 YE June 2022 2.53 3.07 3.66 YE June 2023 2.59 3.14 3.74 YE June 2024 2.64 3.21 3.82 YE June 2025 2.70 3.27 3.90 YE June 2030 2.98 3.62 4.31 YE June 2035 3.29 3.98 4.75 YE June 2040 3.63 4.37 5.21 YE June 2045 3.98 4.78 5.69

~~Source: Forecast through FY 2045~~

~~6.2 ONT Seats through FY 2045~~

~~The computation for ONT seats FY 2022 through FY 2045 uses the same methodology used for the “High” forecast in Section 4.2.~~

The seat forecast is calculated by dividing enplaned passengers by the percentage of seats that are filled by fiscal year. The percentage of seats filled for each forecast for FY 2022 through FY 2045 is estimated by taking the FY 2021 estimate of seats filled (from each forecast) and growing the seat factor each year through FY 2045. Once the percentage of seats filled in any fiscal year reaches 87.5% it is capped at this value for all future fiscal years.

~~The resulting estimate for percentage of seats filled for all three forecasts are as follows:~~

~~Figure 31: ONT Percentage of Seats Filled Through FY 2045~~

~~Forecast of Percentage of Seats Filled Time Period "Low" "Medium" "High"~~

YE June 2021 81.7% 82.9% 81.7% YE June 2022 82.1% 83.3% 82.1% YE June 2023 82.5% 83.7% 82.6% YE June 2024 82.9% 84.1% 83.0% YE June 2025 83.3% 84.5% 83.4% YE June 2030 85.4% 86.7% 85.5% YE June 2035 87.5% 87.5% 87.5% YE June 2040 87.5% 87.5% 87.5% YE June 2045 87.5% 87.5% 87.5%

~~Source: Forecast through FY 2045~~

Page 29 Dividing forecast enplaned passengers by fiscal year by the estimated percentage of seats by filled by fiscal year yields the forecast for seat-departures. Multiplying seat-departures by 2 results in total seats in the market. The table below compares the total seats for all three forecasts:

~~Figure 32: ONT Total Seats Through FY 2045~~

~~Forecast Total Seats (million) Time Period "Low" "Medium" "High"~~

YE June 2021 6.05 7.25 8.76 YE June 2022 6.17 7.38 8.91 YE June 2023 6.27 7.51 9.07 YE June 2024 6.37 7.63 9.21 YE June 2025 6.47 7.74 9.35 YE June 2030 6.97 8.35 10.09 YE June 2035 7.53 9.11 10.85 YE June 2040 8.30 9.99 11.90 YE June 2045 9.10 10.93 13.02

~~Source: Forecast through FY 2045~~

~~6.3 ONT Total Operations Through FY 2045~~

Similar to section 4.3, operations are forecast by dividing the number of total seats by a forecast of seats per departure by fiscal year FY 2022 through FY 2045. The forecast for average seats per departure assumes an annual growth rate of 0.59% from the FY 2021 forecasted seats per departure. The rate of 0.59% was the forecasted rate of the “Low” forecast and very similar to the actual growth rate of 0.52% observed between FY 2010 and FY 2015.

Dividing the forecasted total seats by fiscal year for each forecast by the estimated average seats per departure by fiscal year for each forecast results in the forecast for total operation. No FAA TAF forecast for operations is shown, the FAA TAF operations do not appear to be an “apples to apples” commercial airline comparison as the FAA operations are significantly different than those reported by LAWA.

Total operations for all three forecasts remain below the peak hit in FY 2008 as carriers are now running with much higher seat factors than they have run in the past as well as much larger average aircraft size (seats per departure).

~~Page 30 Figure 33: Total ONT Operations Through FY 2045~~

~~Source: Forecast through FY 2045~~

~~Figure 34: Summary of Operations Through FY 2045~~

~~Total ONT Operations (000s) Time Period "Low" "Medium" "High"~~

YE June 2021 46.1 54.5 65.7 YE June 2022 46.7 55.1 66.6 YE June 2023 47.3 55.8 67.5 YE June 2024 47.7 56.3 68.3 YE June 2025 48.2 56.8 69.1 YE June 2030 50.4 59.5 73.1 YE June 2035 52.8 63.0 77.4 YE June 2040 56.5 67.1 82.4 YE June 2045 60.2 71.3 87.6

~~Source: Forecast through FY 2045~~

~~Page 31 The Landed weights forecasts applies the same ratio used in Section 4.3 resulting in landed weights through FY 2045 of:~~

~~Figure 35: ONT Landed Weights Through FY 2045~~

~~ONT Landed Weight (billion) Time Period "Low" "Medium" "High"~~

YE June 2021 3.14 3.76 4.42 YE June 2022 3.21 3.84 4.50 YE June 2023 3.26 3.90 4.59 YE June 2024 3.31 3.97 4.67 YE June 2025 3.36 4.03 4.75 YE June 2030 3.63 4.34 5.18 YE June 2035 3.92 4.74 5.64 YE June 2040 4.31 5.19 6.19 YE June 2045 4.73 5.68 6.77

~~Source: Forecast through FY 2045~~

~~Page 32 7.0 All-Cargo Forecast Methodology and Results~~

~~7.1 Historical Cargo Activity~~

ONT handles two types of cargo activities: belly cargo on passenger flights and cargo moving on scheduled and non-scheduled freighter flights. Passenger activity is forecast separately, so this section focuses on freighter-based or “all-cargo” flight activity.

The main source of ONT’s cargo activity are scheduled flights by the two U.S. integrated carriers, UPS and FedEx, which accounted for 99% of the airport cargo traffic over the last five years (see Figure 39). UPS accounts for nearly three-quarters of the cargo traffic over the last five years based on flights supporting local O&D traffic as well as flights serving regional markets as the carrier’s West Coast regional hub.19 FedEx’s flights connect the local market with its national and regional hubs in serving local O&D freight and express traffic. Combined the two integrated carriers’ traffic average 1.2% annual growth from 1.2% from 2011 to 2015. The remaining non-integrated traffic moving on non-scheduled flights varied significantly by year indicating the ad hoc nature of the charter market. Overall, the “All Other” traffic declined from 2011 to 2015.

Cargo has been a very bright spot for ONT in 2016. Through June 2016, Cargo tons have increased 12% year-over-year, continuing the strength observed at the end of 2015. Figure 36 shows the year-over-year growth in cargo by month.

~~Figure 36: ONT Cargo (Tons) Compared to Prior Year Same Month~~

~~30%~~

~~25% 23.8%~~

~~20% 17.6%~~

15% 13.9% 12.8% 12.9% 12.4% 11.3%11.8% 10.5% 9.6% 10.0% 10% 8.8% 7.6% 6.8% 6.0% 5.7% 5.2% 5% 3.5% 3.7% 2.5% 2.9% 1.7% 1.8% 0.3% 0% -0.5%-0.8% -1.5% -1.0% -2.0% -2.1% -5% Jan Mar May Jul Sep Nov Jan Mar May Jul Sep Nov Jan Mar May '14 '15 '16

~~Source: Ontario Airport Statistics~~

The level of flight activity (as measured by departures, capacity and MLW) depends on a number of factors including some unrelated to the local market. The integrated carriers’ cargo capacity increased

~~19 An integrated carrier “regional hub” is used to bypass the “national hub” for traffic with an O&D within the region while also handling some international cargo.~~

Page 33 more than traffic as load factors declined slightly from 2011 to 2015. As aircraft aggregate MLW is similarly based on the size of freighter aircraft, there was a slight increase over the period. Rather than being market-driven, this pattern probably reflects minor changes in fleet composition for these carriers as well as changes in how UPS structures its West Coast regional hub.

~~Similarly, the minor non-integrated traffic moves on an ad hoc basis using a variety of aircraft types so there is no clear pattern for traffic and flight activity.~~

~~7.2 All-Cargo Flight Forecasts~~

All-cargo markets for an airport are jointly driven by the size of the local market (mostly based on demand for integrated air freight and express services) and structural factors for the air carriers (e.g., hub- and-spoke systems, fleet composition and demand for non-scheduled freighter service). As a result, it is reasonable to base a future forecast on baseline activity levels combined with economic and industry growth rates. The forecast is based on the following assumptions:

Flight and MLW activity for the integrated and “all other” carriers in 2015 was assumed to be a reasonable baseline to which forecast growth can be applied. As the ratio of MLW to all-cargo flights has been relatively consistent for the integrated carriers over the last five years, it is assumed that operations and aggregate MLW will grow at the same rates in the future. The same assumption is applied to all other activity as the historical pattern has been variable (and is minor in any case). FY 2016 activity was estimated based on the net growth from July 2014-February 2015 to July 2015-February 2016. The growth for the integrated carriers was 13.4% for operations and 13.2% for aggregate MLW (based on capacity growth). The introduction of new all-cargo service in support of Amazon’s air operations resulted in growth of 67.9% in operations and 257.0% in MLW for all other carriers. The integrated carrier flight activity is affected by the local economy (for local O&D traffic), the regional economy (for regional hub operations), and projected growth in the national air cargo market (as dominated by the integrated carriers). Future growth rates were based on an average of (1) Boeing’s projected growth in domestic air cargo (2.1% per year); (2) Woods & Poole’s projected growth in the ONT’s economy (as measured by the Gross Regional Product for ONT’s MSA); and (3) Woods & Poole’s projected growth in the regional economy (as measured by the Gross Regional Product for L.A.’s CSA). Non-integrated flight activity is primarily based on local economic conditions that drive the choice of ONT for non-scheduled freight flights. Therefore, the growth rate was based on GRP growth for ONT’s MSA.

~~The resulting forecast of operations and aggregate MLW is shown in Figure 37 and Figure 38.~~

~~Page 34 Figure 37: Forecast All-Cargo Operations (2015-2040)~~

~~45,000~~

~~40,000~~

~~35,000~~

~~30,000~~

~~25,000~~

~~20,000~~

~~15,000~~

~~10,000~~

~~5,000~~

~~0 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 Fiscal Year~~

~~FedEx/UPS All Other~~

~~Figure 38: Forecast MLW in Millions of Pounds (2015-2040)~~

~~6,000.0~~

~~5,000.0~~

~~4,000.0~~

~~3,000.0~~

~~2,000.0~~

~~1,000.0~~

~~0.0 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 Fiscal Year~~

~~FedEx/UPS All Other~~

~~Page 35 Figure 39: ONT Cargo Statistics (2011-2015)~~

~~Page 36 8.0 General Aviation Forecast~~

~~8.1 ONT Operations~~

~~The General Aviation (GA) operation forecast used the annual growth rate (CAGR) from FY 2010 through FY 2015 of 2.16% and applied that every fiscal year through FY 2045.~~

~~A second approach was also considered but not used. Using the year-over-year domestic enplanement growth rates from the FAA TAF, this resulted in an effective annual growth rate (CAGR) of 2.1%.~~

~~The FAA TAF effective growth rate (CAGR) for GA operations was 0.32% was considered too low.~~

~~The graph below shows the forecast for GA operations in addition to the TAF forecast.~~

~~Figure 40: ONT General Aviation Operations Through FY 2045~~

~~Source: LAWA statistics and forecast through FY 2045~~

~~Page 37 9.0 Appendix~~

Low Forecast Fiscal Year Fiscal 2045 2044 2043 2042 2041 2040 2039 2038 2037 2036 2035 2034 2033 2032 2031 2030 2029 2028 2027 2026 2025 2024 2023 2022 2021 2020 2019 2018 2017 2016 2015 2014 2013 2012 2011 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001 2000

3,609,941 3,543,947 3,479,160 3,415,556 3,353,116 3,291,817 3,231,639 3,171,344 3,110,292 3,048,652 2,987,908 2,927,686 2,868,211 2,810,056 2,754,196 2,701,491 2,649,342 2,598,470 2,547,393 2,496,190 2,444,789 2,396,002 2,347,352 2,296,516 2,241,933 2,192,494 2,159,012 2,057,232 1,978,928 1,944,969 1,912,331 1,875,933 1,966,385 2,095,143 2,279,509 2,295,333 2,449,982 3,370,389 3,330,253 3,352,223 3,138,640 3,078,662 3,035,962 3,033,242 3,288,926 oetcItrainlDmsi nentoa oetcItrainlEnplanements International Domestic International Domestic International Domestic O&D Enplanements O&D n/a

197,722 194,108 190,559 187,075 183,655 180,298 177,002 173,700 170,356 166,979 163,652 160,354 157,096 153,911 150,852 147,965 145,109 142,322 139,525 136,720 133,905 131,233 128,568 125,784 122,794 120,399 98,933 96,141 80,150 72,187 59,020 36,801 28,099 34,275 17,678 20,089 34,553 35,772 61,835 71,175 59,027 53,517 30,053 16,239 10,153 n/a

Connecting Enplanements Connecting 172,313 169,163 166,071 163,035 160,054 157,128 154,256 151,378 148,464 145,521 142,622 139,747 136,908 134,132 131,466 128,950 126,461 124,033 121,595 119,151 116,697 114,368 112,046 109,620 107,014 104,669 102,182 114,131 146,550 142,721 140,722 182,979 317,955 252,174 206,273 159,555 167,954 97,450 93,182 91,285 90,025 74,481 79,652 79,881 99,311 n/a / 3,293,852 n/a 3,782,255 0 3,713,110 0 3,645,230 0 3,578,591 0 3,513,170 0 3,448,945 0 3,385,895 0 3,322,722 0 3,258,755 0 3,194,174 0 3,130,530 0 3,067,433 0 3,005,120 0 2,944,188 0 2,885,662 0 2,830,442 0 2,775,803 0 2,722,503 0 2,668,987 0 2,615,341 0 2,561,486 0 2,510,370 0 2,459,398 0 2,406,136 0 2,348,947 0 2,297,163 0 2,261,194 0 2,154,682 0 2,072,110 0 2,036,254 0 2,026,462 0 1,965,958 0 2,040,866 0 2,174,795 0 2,359,390 0 2,394,644 0 2,596,532 0 3,513,110 0 3,470,975 0 3,535,202 0 3,456,595 0 3,330,836 0 3,242,235 0 3,192,797 0 3,456,880 0

~~Total Enplanements Total~~

3,979,977 3,907,218 3,835,789 3,765,667 3,696,826 3,629,243 3,562,896 3,496,421 3,429,111 3,361,153 3,294,182 3,227,787 3,162,216 3,098,099 3,036,513 2,978,407 2,920,912 2,864,825 2,808,512 2,752,061 2,695,391 2,641,603 2,587,966 2,531,920 2,471,741 2,417,562 2,360,127 2,250,823 2,152,260 2,108,441 2,085,482 2,002,759 2,068,965 2,209,070 2,377,068 2,414,733 2,631,085 3,548,882 3,532,810 3,606,377 3,515,622 3,384,353 3,272,288 3,209,036 3,467,033 3,295,253 Total

omrilCmeca rih/ag Freight/Cargo Freight/Cargo Commercial Commercial prtosLanded Weight Operations 60,194 59,442 58,699 57,966 57,242 56,527 55,821 55,103 54,361 53,598 52,840 52,291 51,788 51,293 50,823 50,395 49,962 49,539 49,096 48,635 48,154 47,709 47,251 46,733 46,121 46,095 45,722 44,485 43,516 43,078 41,660 42,174 43,611 47,065 51,908 55,724 60,803 88,382 80,924 78,883 76,879 75,346 75,421 73,695 Total n/a n/a

4,730,486,570 4,644,007,651 4,559,109,669 4,475,763,723 4,393,941,441 4,313,614,966 4,234,756,956 4,155,746,570 4,075,743,395 3,994,970,493 3,915,371,032 3,851,926,584 3,792,544,458 3,734,225,486 3,678,294,071 3,625,945,804 3,573,730,783 3,522,634,687 3,470,658,022 3,417,902,162 3,364,258,470 3,313,609,026 3,262,559,256 3,207,862,560 3,143,883,768 3,140,447,193 3,114,750,965 2,993,673,122 2,885,554,394 2,667,424,995 2,313,946,000 2,356,760,000 2,556,074,000 2,772,365,000 2,936,568,000 3,150,337,000 3,388,897,000 4,532,355,000 4,483,529,000 4,552,084,000 4,462,769,000 4,356,552,000 4,312,351,000 4,283,952,000 Total

prtosLanded W Operations 44,288 43,151 42,046 40,971 39,925 38,907 37,824 36,771 35,747 34,753 33,783 32,839 31,921 31,029 30,162 29,320 28,505 27,718 26,963 26,240 25,551 24,897 24,279 23,687 23,117 22,565 22,032 21,517 21,020 20,544 17,777 17,065 16,997 17,123 17,077 Total

5,875,138,406 5,719,755,873 5,568,600,317 5,421,556,749 5,278,513,307 5,139,361,173 4,997,939,994 4,860,425,737 4,726,709,906 4,596,687,037 4,469,866,762 4,346,180,241 4,225,927,323 4,109,012,288 3,995,342,101 3,884,886,718 3,777,824,723 3,674,450,985 3,575,041,231 3,479,820,837 3,388,862,394 3,302,467,172 3,220,540,935 3,142,099,258 3,066,360,511 2,993,074,361 2,922,182,621 2,853,635,252 2,787,515,146 2,724,032,600 2,362,527,000 2,300,949,000 2,325,005,000 2,315,983,000 2,230,772,000 2,230,238,000 2,525,738,000 2,679,017,000 2,834,140,000 2,641,153,000 2,582,412,000 2,631,438,000 2,666,796,000 2,609,512,000 eight Total

Operations Charter Total 502 493 484 475 467 458 450 442 434 426 418 410 402 395 387 380 372 364 357 350 343 337 330 322 315 309 301 293 285 276 154 605 222 178 204 517 252 286 264 282 220 246 275 162 n/a n/a

Operations 31,732 31,062 30,406 29,764 29,136 28,521 27,918 27,329 26,752 26,187 25,634 25,093 24,563 24,045 23,537 23,040 22,554 22,077 21,611 21,155 20,708 20,271 19,843 19,424 19,014 18,613 18,220 17,835 17,458 17,090 16,729 15,642 14,967 15,239 15,400 15,036 13,664 17,942 20,308 18,824 29,141 33,026 28,822 34,827 34,413 Total n/a GA

Page 38 Medium Forecast Fiscal Year Fiscal 2045 2044 2043 2042 2041 2040 2039 2038 2037 2036 2035 2034 2033 2032 2031 2030 2029 2028 2027 2026 2025 2024 2023 2022 2021 2020 2019 2017 2018 2016 2011 2012 2013 2014 2015 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001 2000

4,341,634 4,264,247 4,188,239 4,113,587 4,040,265 3,968,249 3,897,518 3,826,477 3,756,539 3,687,711 3,619,324 3,551,337 3,483,814 3,417,380 3,351,264 3,286,739 3,218,658 3,153,473 3,091,335 3,031,410 2,973,198 2,914,561 2,853,450 2,791,418 2,730,468 2,547,373 2,349,970 1,988,968 2,126,408 1,944,969 2,279,509 2,095,143 1,966,385 1,875,933 1,912,341 2,295,333 2,449,982 3,370,389 3,330,253 3,352,223 3,138,640 3,078,662 3,035,962 3,033,242 3,288,926 oetcItrainlDmsi nentoa oetcItrainlEnplanements International Domestic International Domestic International Domestic O&D Enplanements O&D n/a

231,542 227,415 223,362 219,380 215,470 211,629 207,857 204,069 200,339 196,668 193,021 189,395 185,794 182,251 178,725 175,284 171,653 168,177 164,863 161,667 158,563 155,436 152,176 148,868 145,618 143,166 109,516 80,150 96,141 72,187 17,678 34,275 28,099 36,801 59,585 20,089 34,553 35,772 61,835 71,175 59,027 53,517 30,053 16,239 10,153 n/a

Connecting Enplanements Connecting 206,956 203,267 199,644 196,086 192,591 189,158 185,786 182,400 179,066 175,785 172,525 169,284 166,066 162,899 159,747 156,672 153,426 150,319 147,357 144,501 141,726 138,931 136,018 133,061 130,155 121,759 100,580 111,303 114,165 146,550 142,721 140,722 182,979 317,955 252,174 206,273 159,555 167,954 93,637 91,285 79,881 79,652 74,481 90,025 99,311 n/a / 3,293,852 n/a 4,548,590 0 4,467,514 0 4,387,884 0 4,309,672 0 4,232,855 0 4,157,407 0 4,083,304 0 4,008,877 0 3,935,605 0 3,863,496 0 3,791,849 0 3,720,621 0 3,649,880 0 3,580,279 0 3,511,011 3,443,411 0 0 3,372,084 0 3,303,792 0 3,238,692 0 3,175,911 0 3,114,924 0 3,053,491 0 2,989,468 0 2,924,478 0 2,860,623 0 2,669,131 0 2,226,988 0 2,461,273 0 2,082,604 0 2,026,506 0 2,036,254 0 2,359,390 0 2,174,795 0 2,040,866 0 1,965,958 0 2,394,644 0 2,596,532 0 3,513,110 0 3,470,975 0 3,535,202 0 3,456,595 0 3,330,836 0 3,242,235 0 3,192,797 0 3,456,880 0

~~Total Enplanements Total~~

231,542 227,415 223,362 219,380 215,470 211,629 207,857 204,069 200,339 196,668 193,021 189,395 185,794 182,251 178,725 175,284 171,653 168,177 164,863 161,667 158,563 155,436 152,176 148,868 145,618 143,166 109,516 96,141 80,150 59,585 72,187 17,678 34,275 28,099 36,801 20,089 34,553 35,772 61,835 71,175 59,027 53,517 30,053 16,239 10,153 1,401

4,780,132 4,694,929 4,611,245 4,529,053 4,448,325 4,369,037 4,291,161 4,212,945 4,135,944 4,060,165 3,984,870 3,910,017 3,835,674 3,762,530 3,689,736 3,618,695 3,543,737 3,471,969 3,403,555 3,337,578 3,273,487 3,208,927 3,141,645 3,073,347 3,006,241 2,812,297 2,323,129 2,570,789 2,162,754 2,086,091 2,108,441 2,377,068 2,209,070 2,068,965 2,002,759 2,414,733 2,631,085 3,548,882 3,532,810 3,606,377 3,515,622 3,384,353 3,272,288 3,209,036 3,467,033 3,295,253 Total

omrilCmeca rih/ag Freight/Cargo Freight/Cargo Commercial Commercial prtosLanded Weight Operations 71,309 70,451 69,604 68,766 67,939 67,122 66,315 65,490 64,672 63,862 63,047 62,228 61,405 60,589 60,031 59,519 58,923 58,361 57,836 57,335 56,848 56,336 55,758 55,142 54,527 53,956 52,401 45,960 43,690 41,660 43,078 51,908 47,065 43,611 42,174 55,724 60,803 88,382 80,924 78,883 76,879 75,346 75,421 73,695 Total n/a n/a

5,681,528,648 5,580,259,010 5,480,794,439 5,383,102,761 5,287,152,376 5,192,912,245 5,100,351,884 5,007,386,628 4,915,864,778 4,825,795,606 4,736,302,870 4,647,334,026 4,558,972,525 4,472,035,885 4,404,847,565 4,341,637,804 4,272,963,682 4,207,359,262 4,145,077,387 4,085,049,813 4,026,637,420 3,966,960,125 3,903,202,740 3,837,440,671 3,759,646,736 3,717,442,720 3,602,846,069 3,111,107,073 2,899,952,115 2,313,946,000 2,667,424,995 2,936,568,000 2,772,365,000 2,556,074,000 2,356,760,000 3,150,337,000 3,388,897,000 4,532,355,000 4,483,529,000 4,552,084,000 4,462,769,000 4,356,552,000 4,312,351,000 4,283,952,000 Total

5,875,138,406 5,719,755,873 5,568,600,317 5,421,556,749 5,278,513,307 5,139,361,173 4,997,939,994 4,860,425,737 4,726,709,906 4,596,687,037 4,469,866,762 4,346,180,241 4,225,927,323 4,109,012,288 3,995,342,101 3,884,886,718 3,777,824,723 3,674,450,985 3,575,041,231 3,479,820,837 3,388,862,394 3,302,467,172 3,220,540,935 3,142,099,258 3,066,360,511 2,993,074,361 2,922,182,621 2,853,635,252 2,787,515,146 2,362,527,000 2,724,032,600 2,230,772,000 2,315,983,000 2,325,005,000 2,300,949,000 2,230,238,000 2,525,738,000 2,679,017,000 2,834,140,000 2,641,153,000 2,582,412,000 2,631,438,000 2,666,796,000 2,609,512,000 eight Total

Operations Charter Total 502 493 484 475 467 458 450 442 434 426 418 410 402 395 387 380 372 364 357 350 343 337 330 322 315 309 301 293 285 154 276 517 204 178 222 605 252 286 264 282 220 246 275 162 n/a n/a

Operations 31,732 31,062 30,406 29,764 29,136 28,521 27,918 27,329 26,752 26,187 25,634 25,093 24,563 24,045 23,537 23,040 22,554 22,077 21,611 21,155 20,708 20,271 19,843 19,424 19,014 18,613 18,220 17,835 17,090 17,458 16,729 15,036 15,400 15,239 14,967 15,642 13,664 17,942 20,308 18,824 29,141 33,026 28,822 34,827 34,413 Total n/a GA

Page 39 High Forecast Fiscal Year Fiscal 2011 2010 2012 2009 2013 2018 2017 2014 2019 2008 2016 2015 2020 2007 2021 2006 2025 2022 2005 2026 2023 2004 2027 2024 2003 2028 2002 2029 2001 2033 2030 2034 2031 2000 2035 2032 2036 2037 2038 2041 2039 2042 2040 2043 2044 2045

2,279,509 2,295,333 2,095,143 2,449,982 1,966,385 2,391,246 2,156,594 1,875,933 2,651,430 3,370,389 1,944,969 1,912,341 2,939,923 3,330,253 3,259,806 3,352,223 3,549,593 3,332,572 3,138,640 3,619,091 3,406,630 3,078,662 3,690,632 3,479,588 3,035,962 3,764,816 3,033,242 3,842,638 3,288,926 4,159,199 3,923,918 4,239,812 4,000,951 4,320,979 4,079,885 4,402,624 4,484,795 4,568,292 4,823,525 4,653,105 4,911,061 4,737,549 5,000,186 5,090,929 5,183,318 oetcItrainlDmsi nentoa oetcItrainlEnplanements International Domestic International Domestic International Domestic O&D Enplanements O&D n/a

104,807 134,398 164,189 166,622 181,434 170,342 184,987 174,127 188,643 177,856 192,435 196,413 212,594 200,568 216,714 204,505 220,863 208,540 225,036 229,236 233,504 246,550 237,839 251,025 242,156 255,580 260,218 264,941 17,678 20,089 34,275 34,553 28,099 85,793 36,801 35,772 72,187 59,585 61,835 71,175 59,027 53,517 30,053 16,239 10,153 n/a

Connecting Enplanements Connecting 146,550 112,957 101,478 126,071 142,721 114,165 140,475 140,722 155,061 182,979 168,845 158,522 317,955 172,151 162,045 252,174 175,554 165,515 206,273 179,083 159,555 182,785 167,954 197,843 186,651 201,677 190,315 205,538 194,070 209,422 213,331 225,353 217,302 229,443 221,337 233,607 237,846 242,163 246,558 79,881 99,311 79,652 74,481 90,025 91,285 n/a / 3,293,852 n/a 2,359,390 0 2,394,644 0 2,174,795 0 2,596,532 0 2,040,866 0 2,504,204 2,258,072 0 0 1,965,958 0 2,777,501 0 3,513,110 0 2,026,506 0 2,036,254 0 3,080,398 0 3,470,975 0 3,414,867 0 3,535,202 0 3,718,438 0 3,491,094 0 3,456,595 0 3,791,242 0 3,568,675 0 3,330,836 0 3,866,187 0 3,645,103 0 3,242,235 0 3,943,899 0 3,192,797 0 4,025,423 0 3,456,880 0 4,357,041 0 4,110,569 0 4,441,489 0 4,191,267 0 4,526,517 0 4,273,955 0 4,612,046 0 4,698,126 0 4,962,902 4,785,594 0 0 5,052,968 4,874,441 0 0 5,144,668 0 5,238,033 0 5,333,092 0 5,429,876 0

~~Total Enplanements Total~~

104,807 134,398 164,189 166,622 181,434 170,342 184,987 174,127 188,643 177,856 192,435 196,413 212,594 200,568 216,714 204,505 220,863 208,540 225,036 229,236 242,156 233,504 246,550 237,839 251,025 255,580 260,218 264,941 20,089 17,678 34,553 34,275 85,793 28,099 35,772 36,801 59,585 72,187 61,835 71,175 59,027 53,517 30,053 16,239 10,153 1,401

2,414,733 2,377,068 2,631,085 2,209,070 2,343,865 2,068,965 2,609,010 3,548,882 2,002,759 2,086,091 2,108,441 2,911,899 3,532,810 3,244,587 3,606,377 3,581,489 3,515,622 3,899,873 3,661,435 3,384,353 3,976,228 3,742,802 3,272,288 4,054,830 3,822,959 3,209,036 4,136,335 3,467,033 4,221,836 4,482,495 3,295,253 4,569,635 4,311,137 4,658,203 4,395,772 4,747,380 4,837,082 4,927,362 5,205,058 5,019,098 5,299,518 5,112,281 5,395,693 5,493,613 5,593,310 5,694,817 Total

omrilCmeca rih/ag Freight/Cargo Freight/Cargo Commercial Commercial prtosLanded Weight Operations 55,724 51,908 60,803 47,065 46,084 43,611 50,106 88,382 42,174 41,660 43,078 54,558 80,924 60,188 78,883 65,864 76,879 68,668 66,607 75,346 69,255 67,351 75,421 69,861 68,049 73,695 70,495 73,144 71,174 73,760 71,894 74,376 72,513 75,112 76,082 77,047 79,966 78,021 80,939 79,004 81,925 82,923 83,932 84,954 Total n/a n/a

3,150,337,000 2,936,568,000 3,388,897,000 2,772,365,000 3,042,208,861 2,556,074,000 3,369,505,031 4,532,355,000 2,356,760,000 2,313,946,000 2,667,424,995 3,741,971,904 4,483,529,000 4,148,753,358 4,552,084,000 4,556,756,056 4,462,769,000 4,863,829,190 4,635,295,908 4,356,552,000 4,934,386,301 4,714,730,790 4,312,351,000 5,006,894,411 4,791,744,188 4,283,952,000 5,082,125,521 5,398,651,518 5,161,369,977 5,476,220,517 5,244,322,367 5,554,587,082 5,320,674,283 5,642,600,577 5,749,217,865 5,856,521,889 6,186,582,749 5,965,556,564 6,298,855,851 6,076,310,843 6,413,166,468 6,529,551,575 6,648,048,821 6,768,696,535 Total

prtosLanded W Operations 17,077 17,123 21,020 16,997 21,517 17,065 17,777 20,544 22,032 22,565 24,897 23,117 25,551 23,687 26,240 24,279 26,963 27,718 31,029 28,505 31,921 29,320 32,839 30,162 33,783 34,753 35,747 38,907 36,771 39,925 37,824 40,971 42,046 43,151 44,288 Total

2,230,238,000 2,230,772,000 2,525,738,000 2,315,983,000 2,787,515,146 2,325,005,000 2,853,635,252 2,679,017,000 2,300,949,000 2,362,527,000 2,724,032,600 2,922,182,621 2,834,140,000 2,993,074,361 2,641,153,000 3,302,467,172 3,066,360,511 2,582,412,000 3,388,862,394 3,142,099,258 2,631,438,000 3,479,820,837 3,220,540,935 2,666,796,000 3,575,041,231 2,609,512,000 3,674,450,985 4,109,012,288 3,777,824,723 4,225,927,323 3,884,886,718 4,346,180,241 3,995,342,101 4,469,866,762 4,596,687,037 4,726,709,906 5,139,361,173 4,860,425,737 5,278,513,307 4,997,939,994 5,421,556,749 5,568,600,317 5,719,755,873 5,875,138,406 eight Total

Operations Charter Total 517 252 204 178 285 286 222 293 264 605 154 276 301 282 309 220 337 315 246 343 322 275 350 330 162 357 364 395 372 402 380 410 387 418 426 434 458 442 467 450 475 484 493 502 n/a n/a

Operations 15,036 13,664 15,400 15,239 17,090 17,458 17,942 14,967 17,835 20,308 15,642 16,729 18,220 18,824 18,613 29,141 20,271 19,014 33,026 20,708 19,424 28,822 21,155 19,843 34,827 21,611 22,077 34,413 24,045 22,554 24,563 23,040 25,093 23,537 25,634 26,187 26,752 28,521 27,329 29,136 27,918 29,764 30,406 31,062 31,732 Total n/a GA

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~~APPENDIX C~~

~~SUMMARIES OF THE MASTER INDENTURE AND THE FIRST SUPPLEMENTAL INDENTURE~~

Presented below are summaries of certain provisions contained in the Master Trust Indenture (the “Master Indenture”) and the First Supplemental Trust Indenture (the “First Supplemental Indenture,” and, together with the Master Indenture, the “Indenture”). Such summaries are not to be considered full statements pertaining thereto. Reference is directed to such documents for the complete text thereof. Copies of such documents are available from the Authority. All capitalized terms not defined herein or elsewhere in the Official Statement have the meanings set forth in the Indenture.

~~DEFINITIONS~~

~~The following are definitions of certain terms used in this Official Statement including the summaries of the Master Indenture and the First Supplemental Indenture.~~

~~“2006 LAWA Bonds” means, collectively, the 2006A LAWA Bonds and the 2006B LAWA Bonds.~~

“2006 LAWA Indenture” means the Master Indenture dated as of May 15, 1996, by and between the Department and BNY Western Trust Company (predecessor-in-interest to The Bank of New York Mellon Trust Company, N.A.).

~~“2016 Paying Agent” means The Bank of New York Mellon Trust Company, N.A., as paying agent for the 2006 LAWA Bonds.~~

“2006A LAWA Bonds” means the Department of Airports of the City of Los Angeles, California’s Ontario International Airport Refunding Revenue Bonds, Series 2006A (Tax Exempt; Alternative Minimum Tax), issued pursuant to the 2006 LAWA Indenture.

“2006B LAWA Bonds” means the Department of Airports of the City of Los Angeles, California’s Ontario International Airport Refunding Revenue Bonds, Series. 2006B (Taxable), issued pursuant to the 2006 LAWA Indenture.

“2016 Bond Insurer” means Assured Guaranty Municipal Corp., a New York stock insurance company, or any successor thereto or assignee thereof. The 2016 Bond Insurer shall be deemed to be a credit provider for purposes of the Indenture.

“2016 Bond Reserve Surety Bond” means the municipal bond debt service reserve insurance policy issued by Assured Guaranty Municipal Corp. guaranteeing certain payments into the 2016 Bond Reserve Fund with respect to the 2016 Bonds as provided therein and subject to the limitations set forth therein.

“2016 Bonds” means the Ontario International Airport Authority’s $52,475,000* Ontario International Airport Revenue Bonds, Series 2016 (Taxable) issued under the Master Indenture and this First Supplemental Indenture.

“2016 Costs of Issuance Fund” means the costs of issuance fund created in the First Supplemental Indenture and into which money is to be deposited to pay Costs of Issuance with respect to the issuance of the 2016 Bonds and the redemption of the 2006 LAWA Bonds.

~~“2016 Interest Subaccount” shall mean the 2016 Interest Subaccount established within the Interest Account of the Debt Service Fund pursuant to the First Supplemental Indenture.~~

* Preliminary; subject to change.

~~C-1~~

“2016 Municipal Bond Insurance Policy” means the insurance policy issued by the 2016 Bond Insurer guaranteeing the scheduled payment of principal of and interest on the 2016 Bonds when due, which insurance policy shall constitute a Credit Facility for purposes of the Indenture.

~~“2016 Principal Subaccount” shall mean the 2016 Principal Subaccount established within the Principal Account of the Debt Service Fund pursuant to the First Supplemental Indenture.~~

~~“2016 Reserve Subaccount” shall mean the Bond Reserve Subaccount, Series 2016 established within the General Account of the Reserve Fund pursuant to the First Supplemental Indenture.~~

“Accreted Value” means (i) with respect to any Capital Appreciation Bonds, as of any date of calculation, the sum of the amount set forth in a Supplemental Indenture as the amount representing the initial principal amount of such Capital Appreciation Bond plus the interest accumulated, compounded and unpaid thereon as of the most recent compounding date, or (ii) with respect to Original Issue Discount Bonds, as of the date of calculation, the amount representing the initial public offering price of such Original Issue Discount Bonds plus the amount of the discounted principal which has accreted since the date of issue; in each case the Accreted Value will be determined in accordance with the provisions of the Supplemental Indenture authorizing the issuance of such Capital Appreciation Bond or Original Issue Discount Bond.

~~“Additional Bonds” means Bonds issued with a parity claim as to the Net Pledged Revenues with the Initial Bonds.~~

“Aggregate Annual Debt Service” means for any Fiscal Year the aggregate amount of Annual Debt Service on all Outstanding Bonds and Unissued Program Bonds. For purposes of calculating Aggregate Annual Debt Service, the following components of debt service will be computed as follows:

(i) in determining the principal due in each year, payment will (unless a different subsection of this definition applies for purposes of determining principal maturities or amortization) be assumed to be made on Outstanding Bonds and Unissued Program Bonds in accordance with any amortization schedule established by the governing documents setting forth the terms of such Bonds, including, as a principal payment, the Accreted Value of any Capital Appreciation Bonds or Original Issue Discount Bonds maturing or scheduled for redemption in such year; in determining the interest due in each year, interest payable at a fixed rate will (except to the extent subsection (ii), (iii) or (iv) of this definition applies) be assumed to be made at such fixed rate and on the required payment dates; provided, however, that interest payable on the Bonds will be excluded to the extent such payments are to be paid from Capitalized Interest for such Fiscal Year;

(ii) if all or any portion or portions of an Outstanding Series of Bonds, or Unissued Program Bonds constitute Balloon Indebtedness (excluding Program Bonds or Unissued Program Bonds to which subsection (vi) applies), then, for purposes of determining Aggregate Annual Debt Service, each maturity which constitutes Balloon Indebtedness will, unless otherwise provided in the Supplemental Indenture pursuant to which such Balloon Indebtedness is issued or unless provision (iii) of this definition then applies to such maturity, be treated as if it were to be amortized over a term of not more than 30 years and with substantially level annual debt service payments commencing not later than the year following the year in which such Balloon Indebtedness matured, and extending not later than 30 years from the date such Balloon Indebtedness was originally issued; the interest rate used for such computation will be that rate quoted in The Bond Buyer Revenue Bond Index, or such successor or replacement index, for the last week of the month preceding the date of calculation as published by The Bond Buyer, or if that index is no longer published, another similar index selected by the Authority, or if the Authority fails to select a replacement index, that rate determined by a Consultant to be a reasonable market rate for fixed-rate Bonds of a corresponding term issued under the Master Indenture on the date of such calculation, with no credit enhancement and taking into consideration whether such Bonds bear interest which is or is not excluded from gross income for federal income tax purposes; with respect to any Series of Bonds, Unissued Program Bonds or Program Bonds only a portion of which constitutes Balloon Indebtedness, the remaining portion will be treated as described in (i) above or such other provision of this definition as will be applicable and, with respect to any Series, Unissued Program Bonds or Program Bonds or that portion of a Series thereof which constitutes Balloon Indebtedness, all payments of principal and interest becoming due prior to the year of the stated maturity of the Balloon Indebtedness will be treated as described in (i) above or such other provision of this definition as will be applicable;

~~C-2~~

(iii) any maturity of Bonds which constitutes Balloon Indebtedness as described in provision (ii) of this definition and for which the stated maturity date occurs within 12 months from the date such calculation is made, will be assumed to become due and payable on the stated maturity date and provision (ii) above will not apply thereto unless there is delivered to the entity making the calculation a certificate of an Authorized Authority Representative stating that the Authority intends to refinance such maturity and stating the probable terms of such refinancing and that the debt capacity of the Authority is sufficient to successfully complete such refinancing; upon the receipt of such certificate, such Balloon Indebtedness will be assumed to be refinanced in accordance with the probable terms set out in such certificate and such terms will be used for purposes of calculating Aggregate Annual Debt Service, provided that such assumption will not result in an amortization period longer than or an interest rate lower than that which would be assumed under provision (ii) above;

(iv) if any Outstanding Bonds (including Program Bonds then issued and Outstanding) or any Bonds which are then proposed to be issued constitute Tender Indebtedness (but excluding Program Bonds or Bonds as to which a Qualified Swap is in effect and to which subsection (vi) or (viii) applies), then, for purposes of determining Aggregate Annual Debt Service, Tender Indebtedness will be treated as if the principal amount of such Bonds were to be amortized over a term of not more than 30 years commencing in the year in which such Series is first subject to tender and with substantially level Annual Debt Service payments and extending not later than 30 years from the date such Tender Indebtedness was originally issued; the interest rate used for such computation will be that rate quoted in The Bond Buyer Revenue Bond Index, or such successor or replacement index, for the last week of the month preceding the date of calculation as published by The Bond Buyer, or if that index is no longer published, another similar index selected by the Authority, or if the Authority fails to select a replacement index, that rate determined by a Consultant to be a reasonable market rate for fixed-rate Bonds of a corresponding term issued under the Master Indenture on the date of such calculation, with no credit enhancement and taking into consideration whether such Bonds bear interest which is or is not excluded from gross income for federal income tax purposes; and with respect to all principal and interest payments becoming due prior to the year in which such Tender Indebtedness is first subject to tender, such payments will be treated as described in (i) above unless the interest during that period is subject to fluctuation, in which case the interest becoming due prior to such first tender date will be determined as provided in (v) or (vi) below, as appropriate;

(v) if any Outstanding Bonds constitute Variable Rate Indebtedness (except to the extent subsection (ii) or (iii) relating to Balloon Indebtedness or (iv) relating to Tender Indebtedness or subsection (viii) relating to Synthetic Fixed Rate Debt and Qualified Swaps applies), the interest rate on such Bonds will be the average rate quoted in The Bond Buyer Revenue Bond Index, or such successor or replacement index, for the 12 months preceding the date of calculation as published by The Bond Buyer, or if that index is no longer published, another similar index selected by the Authority or if the Authority fails to select a replacement index, that rate determined by a Consultant to be a reasonable market rate for such Bonds of a corresponding term issued under the Master Indenture on the date of such calculation, with no credit enhancement and taking into consideration whether such Bonds bear interest which is or is not excluded from gross income for federal income tax purposes;

(vi) with respect to any Program Bonds or Unissued Program Bonds (a) debt service on Program Bonds then Outstanding will be determined in accordance with such of the foregoing provisions of this definition as will be applicable, and (b) with respect to Unissued Program Bonds, it will be assumed that the full principal amount of such Unissued Program Bonds will be amortized over a term certified by an Authorized Authority Representative at the time the initial Program Bonds of such Program are issued to be the expected duration of such Program or, if such expectations have changed, over a term certified by an Authorized Authority Representative to be the expected duration of such Program at the time of such calculation, but not to exceed 30 years from the date the initial Program Bonds of such Program are issued and it will be assumed that debt service will be paid in substantially level Annual Debt Service payments over such assumed term; the interest rate used for such computation will be that rate quoted in The Bond Buyer Revenue Bond Index, or such successor or replacement index, for the last week of the month preceding the date of calculation as published by The Bond Buyer, or if that index is no longer published, another similar index selected by the Authority, or if the Authority fails to select a replacement index, that rate determined by a Consultant to be a reasonable market rate for fixed-rate Bonds of a corresponding term issued under the Master Indenture on the date of such calculation, with no credit enhancement and taking into consideration whether such Bonds bear interest which is or is not excluded from gross income for federal income tax purposes;

~~C-3~~

~~(vii) debt service on Repayment Obligations, to the extent such obligations constitute Bonds under the Master Indenture, will be calculated as provided in the Master Indenture;~~

(viii) (a) for purposes of computing the Annual Debt Service of Bonds which constitute Synthetic Fixed Rate Debt, the interest payable thereon will be deemed to be the fixed rate as implied by the terms of the Swap Agreement or the net interest rate payable pursuant to offsetting indices, as applicable;

(b) for purposes of computing Annual Debt Service of the Bonds with respect to which any other Qualified Swap is in effect, interest deemed to be payable thereon will be based on the net economic effect on the Authority expected to be produced by the terms of such Bonds and such Qualified Swap; and accordingly, the amount of interest deemed to be payable on any Bonds with respect to which a Qualified Swap is in force will be an amount equal to the amount of interest that would be payable at the rate or rates stated in such Bonds plus the amount payable by the Authority (or the Trustee) under the Qualified Swap in accordance with the terms thereof, less any amount to be received by the Authority from the Qualified Swap Provider pursuant to the Qualified Swap; and

(ix) if moneys or Permitted Investments have been irrevocably deposited with and are held by the Trustee or another fiduciary or Capitalized Interest has been set aside exclusively to be used to pay principal and/or interest on specified Bonds, then the principal and/or interest to be paid from such moneys, Permitted Investments, or Capitalized Interest or from the earnings thereon will be disregarded and not included in calculating Annual Debt Service.

~~“Airport Revenue Fund” means the fund created by and further described in the Master Indenture.~~

“Airport Revenues” means, except to the extent specifically excluded herefrom, all income, receipts, earnings and revenues received by the Authority from the Ontario International Airport, for any given period, as determined in accordance with generally accepted accounting principles, as modified from time to time, including, but not limited to: (1) all rates, tolls, fees, rentals, charges and other payments made to or owed to the Authority for the use or availability of property or facilities at Ontario International Airport; (2) all amounts received or owed from the sale or provision of supplies, materials, goods and services provided by or made available by the Authority at Ontario International Airport; and (3) all rental or business interruption insurance proceeds, received by, held by, accrued to or entitled to be received by the Authority or any successor thereto from the possession, management, charge, superintendence and control of Ontario International Airport (or any Ontario Airport Facilities or activities and undertakings related thereto) or from any other facilities wherever located with respect to which the Authority receives payments which are attributable to Ontario Airport Facilities or activities or undertakings related thereto, all of which is required to be deposited in the Airport Revenue Fund pursuant to the Master Indenture. “Airport Revenues” includes all income, receipts and earnings from the investment of amounts held in the Airport Revenue Fund, any Construction Fund allowed to be pledged by the terms of a Supplemental Indenture, the Reserve Fund and earnings on the Maintenance and Operation Reserve Fund established and the amount, if any, related to coverage paid in a prior Fiscal Year that is available to be spent in the current Fiscal Year and that is credited by the Authority against requirements in calculating for the given Fiscal Year terminal rentals and landing fees charged to airline users of Ontario International Airport pursuant to any residual methodology employed by the Authority in calculating such rentals and fees; provided, however, that for purposes of calculating Airport Revenues for a given Fiscal Year, such amount may not exceed 25% of Debt Service for the Fiscal Year for which such determination is being made.

“Annual Debt Service” means, with respect to any Bond, the aggregate amount of principal and interest becoming due and payable during any Fiscal Year, calculated using the principles and assumptions set forth in the definition of Aggregate Annual Debt Service.

~~“Authority” means the Ontario International Airport Authority, or any successor thereto performing the activities and functions under the Joint Powers Agreement.~~

“Authorized Amount” means, when used with respect to Bonds, including Program Bonds, the maximum Principal Amount of Bonds which is then authorized by a resolution or Supplemental Indenture adopted by the Authority pursuant to the Master Indenture to be Outstanding at any one time under the terms of such Program or

~~C-4~~

Supplemental Indenture. If the maximum Principal Amount of Bonds or Program Bonds authorized by a preliminary resolution or form of Supplemental Indenture approved by the Authority pursuant to the Master Indenture exceeds the maximum Principal Amount of Bonds set forth in the final resolution of sale adopted by the Authority or in the definitive Supplemental Indenture executed and delivered by the Authority pursuant to which such Bonds are issued or such Program is established, the Principal Amount of such Bonds or Program Bonds as is set forth in said final resolution of sale or in the definitive Supplemental Indenture as executed and delivered by the Authority will be deemed to be the “Authorized Amount.”

“Authorized Authority Representative” means the Chief Executive Officer, Chief Financial Officer and Chief Operating Officer of the Authority or such other official or employee of the Authority designated by the Authority as an Authorized Authority Representative by written notice to the Trustee signed by the Chief Executive Officer, Chief Financial Officer and Chief Operating Officer of the Authority. Any action required or authorized to be taken by the Authority or the Authority in this Master Indenture or any Supplemental Indenture may be taken by an Authorized Authority Representative.

“Balloon Indebtedness” means, with respect to any Series of Bonds twenty-five percent (25%) or more of the principal amount of which matures on the same date or within a Fiscal Year, that portion of such Series which matures on such date or within such Fiscal Year; provided, however, that to constitute Balloon Indebtedness the amount of Bonds of a Series maturing on a single date or within a Fiscal Year must equal or exceed 150% of the amount of such Series which matures during any preceding Fiscal Year. For purposes of this definition, the principal amount maturing on any date will be reduced by the amount of such Bonds, scheduled to be amortized by prepayment or redemption prior to their stated maturity date. A Commercial Paper Program and the Commercial Paper constituting part of such Program will not be Balloon Indebtedness.

“Bond” or “Bonds” means any debt obligation of the Authority issued under and in accordance with the provisions of the Master Indenture, including, but not limited to, bonds, notes, bond anticipation notes, commercial paper and other instruments creating an indebtedness of the Authority, and obligations incurred through lease or installment purchase agreements or other agreements or certificates of participation therein and Repayment Obligations to the extent provided the Master Indenture. The term “Bond” or “Bonds” herein does not include any Subordinated Obligation; provided, however, that the Authority may provide in a Supplemental Indenture to the Master Indenture that Subordinated Obligations may be thenceforth issued pursuant to the Master Indenture having the terms applicable to the Bonds, except that such Subordinated Obligations will be junior and subordinate in payment of such Subordinated Obligations from the Net Pledged Revenues. The term “Bond” and “Bonds” includes Program Bonds.

“Bond Counsel” means a firm or firms of attorneys which are nationally recognized as experts in the area of municipal finance and which are familiar with the transactions contemplated under the Indenture.

“Bondholder,” “holder,” “owner” or “registered owner” means the person or entity in whose name any Bond or Bonds are registered on the books maintained by the Registrar and will include any Credit Provider or Liquidity Provider to which a Repayment Obligation is then owed, to the extent that such Repayment Obligation is deemed to be a Bond under the provisions of the Indenture.

“Business Day” means a day on which banks located in New York, New York, in Los Angeles, California and in the city in which the principal corporate trust office of the Trustee is located are open, provided that such term may have a different meaning for any specified Series of Bonds if so provided by Supplemental Indenture.

“Capital Appreciation Bonds” means Bonds all or a portion of the interest on which is compounded and accumulated at the rates and on the dates set forth in a Supplemental Indenture and is payable only upon redemption or on the maturity date of such Bonds. Bonds which are issued as Capital Appreciation Bonds, but later convert to Bonds on which interest is paid periodically will be Capital Appreciation Bonds until the conversion date and from and after such conversion date will no longer be Capital Appreciation Bonds, but will be treated as having a principal amount equal to their Accreted Value on the conversion date.

~~C-5~~

“Capitalized Interest” means the amount of interest on Bonds, if any, funded from the proceeds of the Bonds or other monies that are deposited with the Trustee upon issuance of Bonds to be used to pay interest on the Bonds.

“City of Ontario” mean the City of Ontario, California, a general law city and municipal corporation duly organized and existing under the Constitution and laws of the State of California, or any successor thereto.

~~“Code” means the Internal Revenue Code of 1986, as amended, and the United States Treasury Regulations applicable with respect thereto.~~

“Commercial Paper” means notes of the Authority with a maturity of not more than 270 days from the date of issuance and which are issued and reissued from time to time pursuant to a Program adopted by the Authority.

“Commercial Paper Program” means a Program authorized by the Authority pursuant to which Commercial Paper will be issued and reissued from time to time, up to the Authorized Amount of such Program.

~~“Commission” means the commission governing the Authority, created under the provisions of the Joint Powers Agreement, and any successor to its function.~~

~~“Construction Fund” means any of the Construction Funds authorized to be created by and described in the Master Indenture.~~

“Consultant” means any independent consultant, consulting firm, engineer, architect, engineering firm, architectural firm, financial advisor, accountant or accounting firm, or other expert recognized to be well-qualified for work of the character required and retained by the Authority to perform acts and carry out the duties provided for such consultant herein.

~~“Continuing Disclosure Certificate” means the Continuing Disclosure Certificate executed by the Authority with respect to the 2016 Bonds.~~

“Costs” or “Costs of a Project” means all costs of planning, developing, financing, constructing, installing, equipping, furnishing, improving, acquiring, enlarging and/or renovating a Project and placing the same in service, all as more particularly described in an applicable Supplemental Indenture.

“Costs of Issuance” means all costs and expenses incurred by the Authority in connection with the issuance of the 2016 Bonds associated with the redemption of the 2006 LAWA Bonds, including, but not limited to, costs and expenses of printing and copying documents, the official statement, and the 2016 Bonds and the fees, costs and expenses of rating agencies, the Trustee, the Escrow Agent, legal counsel, accountants, financial advisors, feasibility consultants and other consultants.

“County of San Bernardino” means the County of San Bernardino, California, a political subdivision of the State of California duly organized and existing under the Constitution and laws of such state, or any successor thereto.

“Credit Facility” means a policy of municipal bond insurance, a letter of credit, surety bond, line of credit, guarantee, standby purchase agreement, reserve fund surety policy or other financial instrument which obligates a third party to make payment of or provide funds to the Trustee for the payment of the principal of and/or interest on Bonds.

~~“Credit Provider” means the party obligated to make payment of principal of and interest on the Bonds under a Credit Facility.~~

~~“Customer Facility Charges” means a customer facility charge authorized to be imposed by the Authority in accordance with §1936 of the California Civil Code.~~

~~C-6~~

~~“Debt Service Fund” means the Debt Service Fund created in the Master Indenture and into which money is to be deposited to pay debt service on the Bonds.~~

“Depository” or “DTC” means The Depository Trust Company, New York, New York, a limited purpose trust company organized under the laws of the State of New York in its capacity as securities depository for the Bonds, and its successors and assigns.

“Designated Debt” means a specific indebtedness designated by the Authority with the intent that the risks associated with such debt be offset with a Swap, such specific indebtedness to include all or any part of a Series of Bonds.

“Escrow Agreement” means that Escrow Agreement dated as of ______, 2016, by and among the Authority, LAWA, the 2006 Paying Agent and the Escrow Agent, under which a portion of the proceeds of the 2016 Bonds, along with other moneys, are to be deposited and used to pay the redemption price of the 2006 LAWA Bonds on the redemption date therefor.

“Estimated Completion Date” means the estimated date upon which a Specified Ontario Project will have been substantially completed in accordance with the plans and specifications applicable thereto or the estimated date upon which a Specified Ontario Project is expected to have been acquired and payment therefor made, in each case, as that date will be set forth in a certificate of an Authorized Authority Representative delivered to the Trustee at or prior to the time of issuance of the Bonds which are issued to finance such Project.

~~“Event of Default” means any occurrence or event specified in the Master Indenture or the First Supplemental Indenture.~~

“Facility Construction Credits” means the amounts further described herein resulting from an arrangement embodied in a written agreement of the Authority and another person or entity pursuant to which the Authority permits such person or entity to make a payment or payments to the Authority which is reduced by the amount owed by the Authority to such person or entity under such agreement, resulting in a net payment to the Authority by such person or entity. The “Facilities Construction Credit” will be deemed to be the amount owed by the Authority under such agreement which is “netted” against the payment of such person or entity to the Authority. “Facilities Construction Credits” will include any credits extended to airlines or other users of Ontario Airport Facilities.

~~“First Supplemental Indenture” means the First Supplemental Trust Indenture dated as of November 1, 2016, between the Authority and the Trustee and which sets forth the terms of the 2016 Bonds.~~

“Fiscal Year” means the period of time beginning on July 1 of each given year and ending on June 30 of the immediately subsequent year, or such other similar period as the Authority designates as its fiscal year.

~~“Fitch” means Fitch Ratings, a corporation organized and existing under the laws of the State of New York, its successors and their assigns.~~

~~“General Account” means the General Account within the Reserve Fund established in the Master Indenture.~~

“Government Obligations” means (1) United States Obligations (including obligations issued or held in book-entry form) and (2) prerefunded municipal obligations meeting the following conditions: (a) the municipal obligations are not subject to redemption prior to maturity, or the trustee has been given irrevocable instructions concerning their calling and redemption and the issuer has covenanted not to redeem such obligations other than as set forth in such instructions; (b) the municipal obligations are secured by cash and/or United States Obligations, which United States Obligations may be applied only to interest, principal and premium payments of such municipal obligations; (c) the principal of and interest on the United States Obligations (plus any cash in the escrow fund) are sufficient to meet the liabilities of the municipal obligations; (d) the United States Obligations serving as security for the municipal obligations are held by an escrow agent or trustee; (e) the United States Obligations are not available

~~C-7~~

to satisfy any other claims, including those against the trustee or escrow agent; and (f) the municipal obligations are rated in the highest Rating Category of any Rating Agency which then maintains a rating on any of the Bonds.

~~“Holder” or “Bondholder” means the registered owner of any 2016 Bond, including DTC or its nominee as the sole registered owner of Book-Entry Bonds.~~

“Independent” means, when used with respect to any specified firm or individual, such a firm or individual who (i) does not have any direct financial interest or any material indirect financial interest in the operations of the Authority or the City of Ontario or the County of San Bernardino, other than the payment to be received under a contract for services to be performed, and (ii) is not connected with the Authority or the City as an official, officer or employee.

~~“Interest Account” means the Interest Account within the Debt Service Fund established and described in the Master Indenture.~~

“Initial Bonds” means the Ontario International Airport Authority Ontario International Airport Revenue Bonds, Series 2016 (Taxable) authorized pursuant to a Supplemental Indenture dated the date hereof.

“Investment Agreement” means an investment agreement or guaranteed investment contract (i) with or guaranteed by a national or state chartered bank or savings and loan, an insurance company or other financial institution whose unsecured debt is rated in the highest short-term Rating Category (if the term of the Investment Agreement is less than three years) or in either of the two highest long-term Rating Categories (if the term of the Investment Agreement is three years or longer) by the Rating Agency which then maintains a rating on any of the Bonds or (ii) which investment agreement or guaranteed investment contract is fully secured by obligations described in item (1) or (2) of the definition of Permitted Investments which are (A) valued not less frequently than monthly and have a fair market value, exclusive of accrued interest, at all times at least equal to 105% of the principal amount of the investment, together with the interest accrued and unpaid thereon, (B) held by the Trustee (who will not be the provider of the collateral) or by any Federal Reserve Bank or a depository acceptable to the Authority, (C) subject to a perfected first lien on behalf of the Trustee, and (D) free and clear from all third-party liens.

~~“Joint Powers Act” means Article 1, Chapter 5, Division 7, of Title 1 of the California Government Code (commencing with Section 6500), as the same will be amended from time to time.~~

~~“Joint Powers Agreement” means that certain Joint Exercise of Powers Agreement dated as of August 21, 2012, by and between the City of Ontario and the County of San Bernardino.~~

~~“LAWA” means the Los Angeles World Airports.~~

“LAWA Bonds” means LAWA’s outstanding $83,720,000 Ontario International Airport Refunding Revenue Bonds, Series 2006A and the $6,435,000 Ontario International Airport Refunding Revenue Bonds, Series 2006B, currently outstanding in the aggregate principal amount of $55,505,000, the proceeds of which were used to refinance the construction of certain improvements at the Ontario International Airport.

“Liquidity Facility” means a letter of credit, line of credit, standby purchase agreement or other financial instrument, including a Credit Facility, which is available to provide funds with which to purchase Bonds tendered for purchase pursuant to the terms of such Bonds.

~~“Liquidity Provider” means the entity, including a Credit Provider, which is obligated to provide funds to purchase Bonds under the terms of a Liquidity Facility.~~

“Maintenance and Operation Expenses” means, for any given period, the total operation and maintenance expenses of Ontario International Airport as determined in accordance with generally accepted accounting principles as in effect from time to time, excluding depreciation expense and any operation and maintenance expenses of Ontario International Airport payable from moneys other than Pledged Revenues.

~~C-8~~

~~“Maintenance and Operation Reserve Fund” means the fund established by and described in the Master Indenture.~~

“Maintenance and Operation Reserve Fund Requirement” means twenty-five percent (25%) of the amount budgeted by the Authority in the original or a revised budget for Ontario Maintenance and Operation Expenses for the then-current Fiscal Year.

~~“Master Indenture” means the Master Indenture dated as of November 1, 2016 between the Authority and the Trustee, together with all Supplemental Indentures.~~

“Maximum Aggregate Annual Debt Service” means the maximum amount of Aggregate Annual Debt Service with respect to all Bonds, Unissued Program Bonds and the Authorized Amount of all Bonds then proposed to be issued in the then current or any future Fiscal Year.

~~“Moody’s” means Moody’s Investors Service, a corporation organized and existing under the laws of the State of Delaware, its successors and its assigns.~~

~~“Net Pledged Revenues” means Pledged Revenues for such period less, for such period, the Ontario Maintenance and Operation Expenses.~~

“Net Proceeds” means insurance proceeds received as a result of damage to or destruction of Ontario Airport Facilities or any condemnation award or amounts received by the Authority from the sale of Ontario Airport Facilities under the threat of condemnation less expenses (including attorneys’ fees and expenses and any fees and expenses of the Trustee) incurred in the collection of such proceeds or award.

~~“Nominee” means the nominee of the Depository, which may be the Depository, as determined from time to time pursuant to the Master Indenture.~~

~~“Non-Qualified Swap” shall mean any Swap which is not a Qualified Swap.~~

“Notes” means Bonds issued under the provisions of the Master Indenture which have a maturity of one year or less from their date of original issuance and which are not part of a Commercial Paper Program.

“Ontario Airport Facilities” or “Ontario Airport Facility” means a facility or group of facilities or category of facilities which constitute or are part of Ontario International Airport (excluding privately owned or leased property, except for any portion thereof which is governmentally owned or leased and which is a source of Pledged Revenues).

“Ontario International Airport” means the airport commonly known by such name, including all airport sites, and all equipment, accommodations and facilities for aerial navigation, flight, instruction and commerce belonging to or pertaining to the Authority and under the jurisdiction and control of the Authority and any successor entity thereto, including or excluding, as the case may be, such property as the Authority may either acquire or which will be placed under its control, or divest or have removed from its control.

“Ontario Special Facilities” or “Ontario Special Facility” means, with respect to Ontario International Airport, a facility or group of facilities or category of facilities which are designated as an Ontario Special Facility or Ontario Special Facilities pursuant to the provisions of the Master Indenture.

“Ontario Special Facilities Revenue” means the contractual payments and all other revenues derived by or available to the Authority from an Ontario Special Facility, which are pledged to secure Ontario Special Facility Obligations.

“Ontario Special Facility Obligations” means bonds or other debt instruments issued pursuant to an indenture other than this Master Indenture to finance Ontario Special Facilities and which are not secured by nor

~~C-9~~

~~payable from a lien on and pledge of the Net Pledged Revenues but which are secured by revenues derived from Ontario Special Facilities located at Ontario International Airport.~~

“Original Issue Discount Bonds” means Bonds which are sold at an initial public offering price of less than 95% of their face value and which are specifically designated as Original Issue Discount Bonds by the Supplemental Indenture under which such Bonds are issued.

~~“Outstanding” when used with respect to Bonds means all Bonds which have been authenticated and delivered under the Indenture, except:~~

(a) Bonds cancelled or purchased by the Trustee for cancellation or delivered to or acquired by the Trustee for cancellation and, in all cases, with the intent to extinguish the debt represented thereby;

~~(b) Bonds deemed to be paid in accordance with the Master Indenture;~~

~~(c) Bonds in lieu of which other Bonds have been authenticated under the Master Indenture;~~

(d) Bonds that have become due (at maturity or on redemption or otherwise) and for the payment of which sufficient moneys, including interest accrued to the due date, are held by the Trustee or a Paying Agent;

~~(e) Bonds which, under the terms of the Supplemental Indenture pursuant to which they were issued, are deemed to be no longer Outstanding;~~

(f) Repayment Obligations deemed to be Bonds to the extent such Repayment Obligation arose under the terms of a Liquidity Facility and are secured by a pledge of Outstanding Bonds acquired by the Liquidity Provider; and

(g) for purposes of any consent or other action to be taken by the holders of a specified percentage of Bonds under the Indenture, Bonds held by or for the account of the Authority or by any person or entity controlling, controlled by or under common control with the Authority, unless such Bonds are pledged to secure a debt to an unrelated party, except that in determining whether the Trustee will be protected in relying upon any such approval or consent of a Bondholder, only Bonds which a Responsible Officer of the Trustee actually knows to be held by or for the account of the Authority or by any person or entity controlling, controlled by or under common control with the Authority (an “Affiliate”), will be disregarded unless all Bonds are owned by the Authority or an Affiliate thereof, in which case such Bonds will be considered Outstanding for the purpose of such determination.

“Passenger Facility Charges” means charges collected by the Authority pursuant to the authority granted by the Aviation Safety and Capacity Expansion Act of 1990 and the FAA Extension, Safety and Security Act of 2016 in respect of any component of Ontario International Airport and interest earnings thereon.

“Paying Agent” or “Paying Agents” means, with respect to the Bonds or any Series of Bonds, the banks, trust companies or other financial institutions or other entities designated in a Supplemental Indenture or a resolution of the Authority as the place where such Bonds will be payable.

“Payment Date” means, with respect to any Bonds, each date on which interest is due and payable thereon and each date on which principal is due and payable thereon whether by maturity or redemption thereof.

“Permitted Investments” means, to the extent permitted to be invested by the Authority by applicable law, the Joint Powers Agreement and any then-current investment policy of the Authority, any of the following:

~~(1) Government Obligations,~~

(2) Obligations, debentures, notes or other evidences of indebtedness issued or guaranteed by any of the following instrumentalities or agencies of the United States of America: Federal Home Loan Bank System; Export-Import Bank of the United States; Federal Financing Bank; Government National Mortgage Association;

~~C-10~~

Federal National Mortgage Association; Student Loan Marketing Association; Federal Farm Credit System; Farmers Home Administration; Federal Home Loan Mortgage Corporation; and Federal Housing Administration;

(3) Direct and general long-term obligations of any state, which obligations are rated in either of the two highest Rating Categories by any Rating Agency which then maintains a rating on any of the Bonds;

(4) Direct and general short-term obligations of any state which obligations are rated in the highest Rating Category by any two of the Rating Agencies which then maintains a rating on any of the Bonds;

(5) Interest-bearing demand or time deposits, bank deposit products, overnight bank deposits, interest bearing deposits, interest bearing money market accounts, trust funds, trust accounts, bankers’ acceptances, certificates of deposit (including certificates of deposit placed by a third party pursuant to a separate agreement between the Authority and the Trustee) or interests in money market portfolios issued by state banks or trust companies or national banking associations (including the Trustee or any of its affiliates) that are members of the Federal Deposit Insurance Corporation (“FDIC”) or by savings and loan associations that are members of the FDIC, which deposits or interests must either be (a) continuously and fully insured by FDIC, (b) with banks that are rated at least “P-1” or “Aa” by Moody’s if any of the Bonds are then rated by Moody’s, “F1” or “AA” by Fitch if any of the Bonds are then rated by Fitch and “A-1” or “AA” by S&P if any of the Bonds are then rated by S&P, or (c) fully secured by obligations described in item (1) or (2) of this definition of Permitted Investments (i) which are valued not less frequently than monthly and have a fair market value, exclusive of accrued interest, at all times at least equal to the principal amount of the investment, (ii) held by the Trustee (who will not be the provider of the collateral) or by any Federal Reserve Bank or a depository acceptable to the Authority, (iii) subject to a perfected first lien in favor of the Trustee, and (iv) free and clear from all third-party liens;

~~(6) Long-term or medium-term corporate debt guaranteed by any corporation that is rated by any two of Fitch, Moody’s and S&P, in either of their two highest Rating Categories;~~

(7) Repurchase or reverse repurchase agreements which are (a) entered into with banks or trust companies (including the Trustee or any of its affiliates) organized under state law, national banking associations, insurance companies or government bond dealers reporting to, trading with, and recognized as a primary dealer by, the Federal Reserve Bank of New York and which either are members of the Security Investors Protection Corporation or with a dealer or parent holding company that has an investment grade rating from any Rating Agency which then maintains a rating on any of the Bonds and (b) fully secured by investments specified in section (1) or (2) of this definition of Permitted Investments (i) which are valued not less frequently than monthly and have a fair market value, exclusive of accrued interest, at least equal to the amount invested in the repurchase agreements, (ii) held by the Trustee (who will not be the provider of the collateral) or by any Federal Reserve Bank or a depository acceptable to the Authority, (iii) subject to a perfected first lien in favor of the Trustee and (iv) free and clear from all third-party liens;

(8) Prime commercial paper of a United States corporation, finance company or banking institution rated at least “P-1” by Moody’s if Moody’s then maintains a rating on any of the Bonds, “F1” by Fitch if Fitch then maintains a rating on any of the Bonds and “A-1” by S&P if S&P then maintains a rating on any of the Bonds;

(9) Shares of a diversified open-end management investment company (as defined in the Investment Company Act of 1940, as amended) or shares in a regulated investment company (as defined in Section 851(a) of the Code) that is (a) a money market mutual fund that has been rated in one of the two highest Rating Categories by Moody’s or S&P or (b) a money market fund or account of the Trustee or any funds for which the Trustee, its parent holding company, if any, or any affiliates or subsidiaries of the Trustee provide transfer agency, custodial investment advisory, management or other services, for which the Trustee or an affiliate of the Trustee receives and retains a fee for services provided to the fund, or any state or federal bank that is rated at least “P-1” or “Aa” by Moody’s if Moody’s then maintains a rating on any of the Bonds, “F1” or “AA” by Fitch if Fitch then maintains a rating on any of the Bonds and at least “A-1” or “AA” by S&P if S&P then maintains a rating on any of the Bonds or whose one bank holding company parent is rated at least “P-1” or “Aa” by Moody’s if Moody’s then maintains a rating on any of the Bonds, “F1” or “AA” by Fitch if Fitch then maintains a rating on any of the Bonds and “A-1” or “AA” by S&P if S&P then maintains a rating on any of the Bonds or that has a combined capital and surplus of not less than $50,000,000;

~~C-11~~

(10) Investment Agreements with one or more providers (a) whose senior long-term debt obligations, other senior unsecured long-term obligations, financial program rating, counterparty rating or claims paying ability are rated in either of the two highest Rating Categories by at least two of Fitch, Moody’s and S&P, or the equivalent thereto in the case of any successor thereto, and (b) that are acceptable to the Credit Provider, if any, for the applicable Series of Bonds; and

(11) Any other type of investment consistent with Authority policy in which the Authority directs the Trustee to invest provided that there is delivered to the Trustee a certificate of an Authorized Authority Representative stating that each of the Rating Agencies then maintaining a rating on the Bonds has been informed of the proposal to invest in such investment and each of such Rating Agencies has confirmed that such investment will not adversely affect the rating then assigned by such Rating Agency to any of the Bonds.

“Pledged Revenues” means, except to the extent specifically excluded herein or under the terms of any Supplemental Indenture, Airport Revenues. “Pledged Revenues” will also include such additional revenues, if any, as are designated as “Pledged Revenues” under the terms of any Supplemental Indenture. The following, including any investment earnings thereon, are specifically excluded from Pledged Revenues: (i) any amounts received by the Authority from the imposition of ad valorem taxes, (ii) gifts, grants and other income (including any investment earnings thereon) otherwise included in the definition of “Airport Revenues” which are restricted by their terms to purposes inconsistent with the payment of debt service on the Bonds, (iii) Net Proceeds and other insurance proceeds to the extent the use of such Net Proceeds or other proceeds is restricted by the terms of the policy under which they are paid to a use inconsistent with the payment of debt service on the Bonds, and (iv) Airport Special Facilities Revenue. In addition, the following, including any investment earnings thereon, are specifically excluded from “Pledged Revenues,” unless designated as “Pledged Revenues” under the terms of a Supplemental Indenture: (a) any Swap Termination Payments paid to the Authority pursuant to a Qualified Swap, (b) Facilities Construction Credits, (c) Passenger Facility Charges unless otherwise so pledged under the terms of any Supplemental Indenture. Further, interest earnings or other investment earnings on any Construction Fund established by any Supplemental Indenture are specifically excluded from “Pledged Revenues,” unless otherwise provided for in such Supplemental Indenture.

“Policy Costs” means repayment of any draws under the 2016 Bond Reserve Surety Bond, plus related reasonable expenses incurred by the 2016 Bond Insurer and interest thereon from the date of payment by the 2016 Bond Insurer.

~~“Principal Account” means the Principal Account within the Debt Service Fund established and described in the Master Indenture.~~

“Principal Amount” or “principal amount” means, as of any date of calculation, (i) with respect to any Capital Appreciation Bond, the Accreted Value thereof (the difference between the stated amount to be paid at maturity and the Accreted Value being deemed unearned interest), (ii) with respect to any Original Issue Discount Bond, the Accreted Value thereof, unless the Supplemental Indenture under which such Bond was issued will specify a different amount, in which case, the terms of the Supplemental Indenture will control, and (iii) with respect to any other Bonds, the principal amount of such Bond payable at maturity.

“Program” means a financing program, including but not limited to a Commercial Paper Program, (i) which is authorized and the terms thereof approved by a resolution adopted by the Authority and the items described in the Master Indenture have been filed with the Trustee, (ii) wherein the Authority has authorized the issuance, from time to time, of notes, commercial paper or other indebtedness in an Authorized Amount, and (iii) the Authorized Amount of which has met the additional bonds test set forth in the Master Indenture and the Outstanding amount of which may vary from time to time, but not exceed the Authorized Amount.

~~“Program Bonds” means Bonds issued and Outstanding pursuant to a Program, other than Unissued Program Bonds.~~

~~“Project” means any and all facilities financed in whole or in part with proceeds of Bonds.~~

~~C-12~~

~~“Qualified Self-Insurance” is defined in Section 5.10 of the Master Indenture.~~

“Qualified Swap” means any Swap (a) whose Designated Debt is all or part of a particular Series of Bonds; (b) which has been approved in writing by any Credit Provider securing payment of principal of and interest on such Series of Bonds (including any bond insurer); (c) for purpose of any calculation of Aggregate Annual Debt Service or average Aggregate Annual Debt Service required under the Indenture only, whose Swap Provider is a Qualified Swap Provider or has been a Qualified Swap Provider within the 60 day period preceding the date on which the calculation of Aggregate Annual Debt Service or average Aggregate Annual Debt Service is being made; (d) which has a term not greater than the term of the Designated Debt or to a specified mandatory tender or redemption of such Designated Debt; (e) which has been designated in writing to the Trustee by the Authority as a Qualified Swap with respect to such Bonds; and (f) which has been approved by S&P, if S&P has an outstanding rating on any Bonds, Fitch, if Fitch has an outstanding rating on any Bonds, and Moody’s, if Moody’s has an outstanding rating on the Bonds.

“Qualified Swap Provider” means an entity (a) whose senior long-term debt obligations, other senior unsecured long term obligations, financial program rating, counterparty rating or claims paying ability or whose payment obligations under any Qualified Swap are enhanced by an entity whose senior long-term debt obligations, other senior unsecured long term obligations, financial program rating, counterparty rating or claims paying ability are rated in either of the two highest Rating Categories by at least two of Fitch, Moody’s and S&P or the equivalent thereto in the case of any successor thereto, and (b) acceptable to the Credit Provider, if any, for the Designated Debt.

~~“Rating Agency” means any nationally recognized rating agency then providing a rating on the Bonds.~~

“Rating Category” and “Rating Categories” means (i) with respect to any long-term Rating Category, all ratings designated by a particular letter or combination of letters, without regard to any numerical modifier, plus or minus sign or other modifier, and (ii) with respect to any short-term or commercial paper Rating Category, all ratings designated by a particular letter or combination of letters and taking into account any numerical modifier, but not any plus or minus sign or other modifier.

“Rebate Fund” means any fund created by the Commission pursuant to a Supplemental Indenture in connection with the issuance of the Bonds or any Series of Bonds for the purpose of complying with the Code and providing for the collection and holding for and payment of amounts to the United States of America.

~~“Redemption Date” means any date fixed for redemption prior to maturity of Bonds.~~

“Redemption Price” means, with respect to any Bond (or portion thereof), the principal amount with respect to such Bond (or portion) plus the applicable premium, if any, payable upon redemption thereof pursuant to the provisions of such Bond and the Master Indenture.

~~“Refunding Bonds” means any Bonds issued under the Indenture to refund or defease all or a portion of any series of Outstanding Bonds or any Subordinated Obligation.~~

“Registrar” means, with respect to the Bonds or any Series of Bonds, the bank, trust company or other entity designated in a Supplemental Indenture or a resolution of the Authority to perform the function of Registrar under the Master Indenture or any Supplemental Indenture, and which bank, trust company or other entity has accepted the position in accordance with the Master Indenture.

“Repayment Obligations” shall mean an obligation arising under a written agreement of the Authority and a Credit Provider pursuant to which the Authority agrees to reimburse the Credit Provider for amounts paid through a Credit Facility to be used to pay debt service on any Bonds or an obligation arising under a written agreement of the Authority and a Liquidity Provider pursuant to which the Authority agrees to reimburse the Liquidity Provider for amounts paid through a Liquidity Facility to be used to purchase Bonds.

~~C-13~~

“Required Reserve” means, with respect to any series of Bonds, the amount required to be maintained in the Reserve Fund, if any, for such series of Bonds pursuant to the Supplemental Indenture authorizing the issuance of such series of Bonds. The Required Reserve for the Initial Bonds (and any Additional Bonds secured by the General Account within the Reserve Fund) will be the lesser of (i) the Maximum Aggregate Annual Debt Service on all Initial Bonds and such Additional Bonds, or (ii) the amount permitted to be held in the General Account within the Reserve Fund by the arbitrage bond regulations issued by the United States Department of the Treasury under Section 148 of the Code, as such regulations are, at the time, applicable and in effect; provided, however, that any Required Reserve may be provided in whole or in part by one or more Reserve Fund Surety Policies.

“Reserve Fund” means the trust fund created pursuant to the Master Indenture and that is required to be funded for the purpose of providing additional security for any applicable Outstanding Bonds issued pursuant to the terms of the Master Indenture and as specified in any Supplemental Indenture.

“Reserve Fund Surety Policy” means with respect to the Initial Bonds (and any Additional Bonds secured by the General Account within the Reserve Fund pursuant to the Master Indenture), an insurance policy or surety bond, or a letter of credit, deposited with the Trustee for the credit of the Reserve Fund or any accounts therein in lieu of or partial substitution for cash or securities on deposit therein. The entity providing such Reserve Fund Surety Policy will be rated in one of the two highest Rating Categories by at one Rating Agency which is then maintaining a rating on the Bonds at the time such instrument is provided. With respect to any Additional Bonds which are not secured by the General Account within the Reserve Fund pursuant to the Master Indenture, the Reserve Fund Surety Policy will be as defined in the Supplemental Indenture authorizing the issuance of such series of Bonds.

~~“Resolution” means the Resolution adopted by the Authority on October 4, 2016, as amended or supplemented, authorizing the issuance of the 2016 Bonds.~~

“Responsible Officer” means, when used with respect to the Trustee, the president, any vice president, any assistant vice president, the secretary, any assistant secretary, the treasurer, any assistant treasurer, any senior associate, any associate or any other officer of the Trustee within the corporate trust office (or any successor corporate trust office) at the Trustee’s address set forth in the Master Indenture (the “Corporate Trust Office”) customarily performing functions similar to those performed by the persons who at the time will be such officers, respectively, or to whom any corporate trust matter is referred at the Corporate Trust Office because of such person’s knowledge of and familiarity with the particular subject and having direct responsibility for the administration of this.

~~“Serial Bonds” shall mean Bonds for which no sinking installment payments are provided.~~

“Series” means Bonds designated as a separate Series by a Supplemental Indenture and, with respect to a Commercial Paper Program, means the full Authorized Amount of such program, regardless of when or whether issued, unless portions thereof are, by Supplemental Indenture, designated as separate Series.

“Settlement Agreement” means that certain Settlement Agreement dated December 15, 2015, by and among the Authority, the City of Ontario and the City of Los Angeles, California and its Board of Airport Commissioners and the Los Angeles World Airports (collectively, “Los Angeles”), pursuant to which Los Angeles will transfer management and control of the Ontario International Airport to the Authority and certain other Airport Assets on the Transfer Date (each as defined therein) subject to the terms and conditions set forth therein.

~~“Settlement Payments” means, each payment required to be paid by the Authority to Los Angeles following the Transfer Date pursuant to the Section 11.E of the Settlement Agreement.~~

“Significant Portion” means any Ontario Airport Facilities or portions thereof which, if such facilities had been sold or disposed of by the Authority at the beginning of an annual period which includes the month of commencement of the 12-month period ending on the day of such disposition would have resulted in a reduction in Net Pledged Revenues for such annual period of more than 5% when the actual Net Pledged Revenues for such

~~C-14~~

annual period are decreased by the Pledged Revenues directly attributable to such Ontario Airport Facilities and increased by the expenses of the Authority directly attributable to such Ontario Airport Facilities.

~~“S&P” means Standard & Poor’s Ratings Group, a corporation organized and existing under the laws of the State of New York, its successors and their assigns.~~

“Specified Ontario Project” means a Project at Ontario International Airport or a group of alternative Projects which are described in a certificate of an Authorized Authority Representative delivered to the Consultant preparing the certificate described in the Master Indenture, the revenues and expenses of which Project or of the alternative Projects are to be taken into account by such Consultant in preparing the certificate under the Master Indenture in connection with the issuance of Additional Bonds.

~~“State” means the State of California.~~

“Subordinated Obligation” means any bond, note or other debt instrument issued or otherwise entered into by the Authority which ranks junior and subordinate to the Bonds and which may be paid from moneys constituting Net Pledged Revenues only if all amounts of principal and interest which have become due and payable on the Bonds whether by maturity or redemption have been paid in full and the Authority is current on all payments, if any, required to be made to replenish any bond reserve fund created for any Bonds. The Commission may henceforth by Supplemental Indenture elect to have the provisions of this Master Indenture applicable to the Bonds apply to other Subordinated Obligations issued thereunder, including any obligations to pay remaining Settlement Payments, except that such Subordinated Obligations will be secured on a junior and subordinate basis to the Bonds from the Net Pledged Revenues as provided in the Master Indenture. No bond, note or other instrument of indebtedness will be deemed to be a “Subordinated Obligation” for purposes of the Master Indenture and payable on a subordinated basis from Net Pledged Revenues unless specifically designated by the Commission as a “Subordinated Obligation” in a Supplemental Indenture or other written instrument. In connection with any Subordinated Obligation with respect to which a Swap is in effect or proposes to be in effect, the term “Subordinated Obligation” includes, collectively, both such Subordinated Obligation and either such Swap or the obligations of the Authority under each such Swap, as the context requires. The term “Subordinated Obligations” also includes a Swap or the obligations of the Authority under such Swap which has been entered into in connection with a Subordinated Obligation, as the context requires, although none of the Subordinated Obligations with respect to which such Swap was entered into remain outstanding. In connection with any Bonds with respect to which a Qualified Swap is in effect or proposed to be in effect, the term “Subordinated Obligation” includes any Swap Termination Payment payable by the Authority.

~~“Supplemental Indenture” means any document supplementing or amending the Master Indenture or providing for the issuance of Bonds and entered into as provided in the Master Indenture.~~

~~“Surplus Revenue Fund” mean the fund created pursuant to and described in the Master Indenture.~~

“Swap” means any financial arrangement between the Authority and a Swap Provider which provides that (a) each of the parties will pay to the other an amount or amounts calculated as if such amount were interest accruing during the term of the arrangement at a specified rate (whether fixed or a variable rate or measured against some other rate) on a Designated Debt, and payable from time to time or at a designated time or times (whether before, during or after the term of the arrangement); (b) if such amount is to be paid before it is deemed to have accrued, the amount paid will reflect the present value of such future amount (i.e., an upfront premium), while an amount to be paid after it is deemed to have accrued will reflect the time value of such funds; (c) payment dates and calculated accrual rates need not be the same for each payor, but to the extent payment dates coincide, the arrangement may (but need not) provide that one will pay to the other any net amount due under such arrangement.

~~“Swap Agreement” means an agreement between the Authority and a Swap Provider for a Swap.~~

~~“Swap Policy” means any insurance policy or similar agreement insuring payment of the Authority’s obligations under a particular Qualified Swap.~~

~~C-15~~

~~“Swap Provider” means a party to a Swap with the Authority.~~

~~“Swap Termination Payment” means any amounts due and payable by the Authority or a Qualified Swap Provider, in connection with the termination of a Qualified Swap.~~

“Synthetic Fixed Rate Debt” means indebtedness issued by the Authority which: (i) is combined, as Designated Debt, with a Qualified Swap and creates, in the opinion of a Consultant, a substantially fixed-rate maturity or maturities for a term not exceeding such maturity or maturities, or (ii) consisting of an arrangement in which two inversely related variable-rate securities are issued in equal principal amounts with interest based on offsetting indices resulting in a combined payment which is economically equivalent to a fixed rate.

“Tax Certificate” means the agreement or certificate of the Authority prepared by Bond Counsel and delivered by the Authority at the time of issuance and delivery of any Series of Bonds, the interest on which is excluded from gross income for federal income tax purposes pursuant to a favorable opinion of such Bond Counsel, making certifications and representations of the Authority as to the status of such Bonds under the Code.

“Tender Indebtedness” means any Bonds or portions of Bonds a feature of which is an obligation on the part of the Bondholders, under the terms of such Bonds, to tender all or a portion of such Bonds to the Authority, the Trustee, the Paying Agent or other fiduciary or agent or Credit Provider for payment or purchase and requiring that such Bonds or portions of Bonds be purchased if properly presented

“Term Bonds” means Bonds of a series which are payable on or before their specified maturity dates from sinking installment payments established pursuant to the Supplemental Indenture for such series for that purpose and calculated to retire the Bonds on or before their specified maturity dates.

~~“Treasurer” means the Treasurer of the Authority as set forth in the Joint Powers Agreement.~~

~~“Transfer Date” has the meaning set forth in the Settlement Agreement.~~

~~“Trustee” means the entity named as such until a successor replaces it and, thereafter, means such successor.~~

“Unissued Program Bonds” means the bonds, notes or other indebtedness authorized to be issued pursuant to a Program and payable from Net Pledged Revenues, issuable in an amount up to the Authorized Amount relating to such Program, which have been approved for issuance by the Commission pursuant to a resolution or supplemental indenture adopted by the Commission and with respect to which Program the items described in the applicable provisions of the Master Indenture have been filed with the Trustee but which have not yet been authenticated and delivered pursuant to the Program documents.

“United States Obligations” means direct and general obligations of the United States of America, or obligations that are fully and unconditionally guaranteed as to timely payment of principal and interest by the United States of America, including, with respect only to direct and general obligations and not to guaranteed obligations, evidences of ownership of proportionate interests in future interest and/or principal payments of such obligations, provided that investments in such proportionate interests must be limited to circumstances wherein: (1) a bank or trust company acts as custodian and holds the underlying United States Obligations; (2) the owner of the investment is the real party in interest and has the right to proceed directly and individually against the obligor of the underlying United States Obligations; and (3) the underlying United States Obligations are held in a special account separate from the custodian’s general assets and are not available to satisfy any claim of the custodian, any person or entity claiming through the custodian or any person or entity to whom the custodian may be obligated. “United States Obligations” will include any stripped interest or principal portion of United States Treasury securities and any stripped interest portion of Resolution Funding Corporation securities.

~~“Variable Rate Indebtedness” means any Bond or Bonds the interest rate on which is not, at the time in question, fixed to maturity, excluding any Commercial Paper Program.~~

~~C-16~~

~~THE MASTER TRUST INDENTURE~~

The following is a summary of certain provisions of the Master Indenture. Such summary is only a brief description of limited provisions of such document and is qualified in its entirety by reference to the full text of the Master Indenture.

~~Grant to Secure the Bonds; Pledge of Airport Revenues~~

To secure the payment of the interest, principal and premium, if any, on the Bonds and the performance and observance by the Authority of all the covenants, agreements and conditions expressed or implied herein or contained in the Bonds, the Authority hereby pledges and assigns to the Trustee and grants to the Trustee a lien on and security interest in all right, title and interest of the Authority in and to all of the following and provides that, except as otherwise authorized in the Indenture, such lien and security interest will be prior in right to any other pledge, lien or security interest created by the Authority in the following: (a) the Net Pledged Revenues, subject only to the provisions of the Master Indenture permitting the application thereof for the purposes and on the terms and conditions set forth in the Indenture, (b) all moneys and securities (excluding moneys and securities on deposit in any Rebate Fund) held from time to time by the Trustee under the Master Indenture, moneys and securities held in the Reserve Fund and any Reserve Fund Surety Policy, provided at any time in satisfaction of all or a portion of the Required Reserve, moneys and securities held in the Debt Service Fund, whether or not held by the Trustee and to the extent provided in any Supplemental Indenture moneys and securities held in any Construction Fund whether or not held by the Trustee, (c) earnings on amounts included in provisions (a) and (h) above (except to the extent excluded from the definition of “Net Pledged Revenues” by this Master Indenture), and (d) any and all other funds, assets, rights, property or interests therein, of every kind or description which may from time to time hereafter, by delivery or by writing of any kind, be sold, transferred, conveyed, assigned, pledged, mortgaged, granted or delivered to or deposited with the Trustee as additional security under the Master Indenture, for the equal and proportionate benefit and security of all Bonds, all of which, regardless of the time or times of their authentication and delivery or maturity, will, with respect to the security provided by the Master Indenture, be of equal rank without preference, priority or distinction as to any Bond over any other Bond or Bonds, except as to the timing of payment of the Bonds. Any security or Credit Facility provided for specific Bonds or a specific Series of Bonds may, as provided by Supplemental Indenture, secure only such specific Bonds or Series of Bonds and, therefore, will not be included as security for all Bonds under the Master Indenture and moneys and securities held in trust as provided in the Master Indenture exclusively for Bonds which have become due and payable and moneys and securities which are held exclusively to pay Bonds which are deemed to have been paid under the Master Indenture will be held solely for the payment of such specific Bonds. In addition, nothing in the Indenture will prevent additional security being provided to specific Bonds or Series of Bonds or the creation of a bond reserve fund therefor under any Supplemental Indenture.

The Authority represents and states under the Indenture that it has not previously created any charge or lien on or any security interest in the Net Pledged Revenues and the Authority covenants that, until all the Bonds authorized and issued under the provisions of the Master Indenture and the interest thereon will have been paid or are deemed to have been paid, it will not, except as specifically provided in the Master Indenture, grant any prior or parity pledge of or any security interest in the Net Pledged Revenues or any of the other security which is pledged pursuant to the Master Indenture, or create or permit to be created any charge or lien thereon or any security interest therein ranking prior to or on a parity with the charge or lien of the Bonds from time to time Outstanding under the Indenture. The Authority may grant a lien on or security interest in the Net Pledged Revenues to secure Subordinated Obligations.

All Airport Revenues, when and as received by or on behalf of the Authority, will be deposited by the Authority pursuant to the Master Indenture in the Airport Revenue Fund. The Net Pledged Revenues will, immediately upon receipt thereof; become subject to the lien thereon and pledge of this Master Indenture.

All Pledged Revenues deposited into the Airport Revenue Fund will be transferred to and deposited as described in the Official Statement under “SECURITY AND SOURCES OF PAYMENT FOR THE 2016 BONDS — Flow of Funds.”

~~C-17~~

Earnings on the various funds and accounts created under the Master Indenture will be transferred to the Airport Revenue Fund, provided that earnings on any accounts created under any Supplemental Indenture with respect to any Series of Bonds will be deposited as provided in such Supplemental Indenture, except that (i) during the continuation of an Event of Default earnings on such funds and accounts will be deposited into the Interest Subaccount or Principal Subaccount created under the respective Supplemental Indentures, (ii) earnings on any Construction Fund may, if so provided by a Supplemental Indenture, be retained in such Construction Fund, and (iii) earnings on any account in the Reserve Fund may, if so provided by a Supplemental Indenture, be retained in such account under the conditions therein described.

~~Disbursements from the Debt Service Fund~~

Subject to any more restrictive requirements for a Series of Bonds as set forth in the Supplemental Indenture relating to such Series, so long as any of the Bonds are Outstanding, the Trustee will deliver to the Treasurer, as to each Series of Bonds Outstanding, a written demand requesting that the Treasurer, not later than the first Business Day prior to the payment date therefore, transfer from (A) each account in the Interest Account to the Trustee or the applicable Paying Agent the full amount required to pay the interest on Bonds of that Series as it becomes due on such payment date, provided that such deposits will not be required to the extent the Trustee or a Paying Agent holds sufficient funds payable as capitalized interest in respect of such Bonds to pay the interest due on such Bonds on such payment date and (B) each account in the Principal Account to the Trustee or the applicable Paying Agent the full amount required to pay the principal amount of Bonds of that Series as such principal amount becomes due on such payment date and the full amount required to pay the sinking installment payment, if any, due with respect to Term Bonds of such Series as such sinking installment payment becomes due on such payment date. Each such transfer will be accompanied by written instructions from the Treasurer directing the Trustee to pay the Owners of the Bonds of a given Series from the amounts so transferred the interest and principal to be paid and, if any, the Term Bonds to be redeemed. The Authority will not give (or instruct the Trustee to give) notice of the redemption of any Bonds unless either (1) moneys are on deposit in the Principal Account (or any subaccount, as applicable) to provide for payment of such Bonds, or (2) such notice states that the redemption of such Bonds is conditioned upon the deposit with the Trustee of such moneys.

Money held by the Trustee for any Series of Bonds may be temporarily invested in accordance with the written direction of the Authority, as provided in the Master Indenture or as provided in any Supplemental Indenture with respect to any Series of Bonds, but such investment will not affect the obligation of the Authority to cause the full amount required by the terms of the Master Indenture to be available at the time required to meet payments of principal of and interest on Bonds of the Series for which it is accumulated.

~~Repayment Obligations Afforded Status of Bonds~~

If a Credit Provider or Liquidity Provider makes payment of principal of or interest on a Bond or advances funds to purchase or provide for the purchase of Bonds and is entitled to reimbursement thereof, pursuant to a separate written agreement with the Authority, but is not reimbursed, the Authority’s Repayment Obligation under such written agreement may, if so provided in the written agreement and to the extent provided in such agreement and the applicable Supplemental Indenture, be afforded the status of a Bond issued under the Indenture, and, if afforded such status, the Credit Provider or Liquidity Provider shall be the Bondholder and such Bond shall be deemed to have been issued at the time of the original Bond for which the Credit Facility or Liquidity Facility was provided and will not be subject to the provisions of the Indenture governing the issuance of Additional Bonds; provided, however, notwithstanding the stated terms of the Repayment Obligation, the payment terms of the Bond held by the Credit Provider or Liquidity Provider hereunder shall be calculated as a Bond issued hereunder.

~~Maintenance and Operation of Ontario Airport Facilities~~

Subject to the transfer of any Ontario Airport Facilities pursuant to the Master Indenture, the Authority covenants that the Ontario Airport Facilities will at all times be operated and maintained in good working order and condition and that all lawful orders of any governmental agency or authority having jurisdiction in the

~~C-18~~

premises will be complied with (provided the Authority will not be required to comply with any such orders so long as the validity or application thereof will be contested in good faith), and that all licenses and permits necessary to construct or operate any of the Ontario Airport Facilities will be obtained and maintained and that all necessary repairs, improvements and replacements of the Ontario Airport Facilities will be made, subject to sound business judgment. Subject to the transfer of any Ontario Airport Facilities pursuant to the Master Indenture, the Authority will, from time to time, duly pay and discharge, or cause to be paid and discharged, except to the extent the imposition or payment thereof is being contested in good faith by the Authority, all taxes (if any), assessments or other governmental charges lawfully imposed upon the Ontario Airport Facilities or upon any part thereof, or upon the Pledged Revenues, when the same will become due, as well as any lawful claim for labor, materials or supplies or other charges which, if unpaid, might by law become a lien or charge upon the Pledged Revenues or Ontario Airport Facilities or any part thereof constituting part of Ontario International Airport.

~~Insurance; Application of Insurance Proceeds~~

~~Subject, in each case, to the condition that insurance is obtainable at reasonable rates and upon reasonable terms and conditions:~~

(i) the Authority will procure and maintain or cause to be procured and maintained commercial insurance or provide Qualified Self Insurance with respect to the facilities constituting Ontario International Airport and public liability insurance in the form of commercial insurance or Qualified Self Insurance and, in each case, in such amounts and against such risks as are, in the judgment of the Authority, prudent and reasonable taking into account, but not being controlled by, the amounts and types of insurance or self-insured programs provided by similar airports;

(ii) the Authority will procure and maintain reasonable fidelity insurance or bonds on the position of Treasurer and on any other employees of the Authority who handle or are responsible for funds of the Authority; and

(iii) the Authority will place on file with the Trustee annually within 120 days after the close of each Fiscal Year a certificate of an Authorized Authority Representative containing a summary of all insurance policies and self-insured programs then in effect with respect to Ontario International Airport and the operations of the Authority. The Trustee may conclusively rely upon such certificate and will not be responsible for the sufficiency or adequacy of any insurance required under the Master Indenture or obtained by the Authority a certification to the effect that the Authority is in compliance with the requirements of the Indenture.

“Qualified Self Insurance” means insurance maintained through a program of self insurance or insurance maintained with a fund, company or association in which the Authority may have a material interest and of which the Authority may have control, either singly or with others. Each plan of Qualified Self Insurance will be established in accordance with law, will provide that reserves be established or insurance acquired in amounts adequate to provide coverage which the Authority determines to be reasonable to protect against risks assumed under the Qualified Self Insurance plan, including any potential retained liability in the event of the termination of such plan of Qualified Self Insurance, and such self-insurance program will be reviewed at least once every 12 months by a Consultant who will deliver to the Authority a report on the adequacy of the reserves established thereunder. If the Consultant determines that such reserves are inadequate, he will make a recommendation as to the amount of reserves that should be established and maintained, and the Authority will comply with such recommendation unless it can establish to the satisfaction of and receive a certification from a Consultant that a lower amount is reasonable to provide adequate protection to the Authority.

If, as a result of any event, any part of an Ontario Airport Facility or any Ontario Airport Facilities is destroyed or severely damaged, the Authority will create within the Airport Revenue Fund a special subaccount and will credit the Net Proceeds received as a result of such event of damage or destruction to such subaccount and such Net Proceeds will, within a reasonable period of time taking into account any terms under which insurance proceeds are paid and any insurance restrictions upon the use or timing of the use of insurance proceeds, be used to: (1) repair or replace the Ontario Airport Facilities, or portion thereof, which were damaged or destroyed, (2) provide additional revenue-producing Ontario Airport Facilities, (3) redeem Bonds, or (4) create an escrow fund pledged to pay specified Bonds and thereby cause such Bonds to be deemed to be paid; provided,

~~C-19~~

however, that the Authority will first deliver to the Trustee a certificate of a Consultant showing that, after taking into account the use of the Net Proceeds for the redemption of such specified Bonds, would, nevertheless, be met.

~~Transfer of Ontario Airport Facility or Ontario Airport Facilities~~

The Authority will not, except as permitted in the Master Indenture, transfer, sell or otherwise dispose of an Ontario Airport Facility or Ontario Airport Facilities. Any transfer of an asset over which the Authority retains substantial control in accordance with the terms of such transfer will not, for so long as the Authority has such control, be deemed a disposition of an Ontario Airport Facility or Ontario Airport Facilities.

~~The Authority may transfer, sell or otherwise dispose of Ontario Airport Facilities only if such transfer, sale or disposition complies with one or more of the following provisions:~~

~~(a) The property being disposed of is inadequate, obsolete or worn out; or~~

(b) The property proposed to be disposed of and all other Ontario Airport Facilities disposed of during the 12-month period ending on the day of such transfer (but excluding property disposed of under (a) above), will not, in the aggregate, constitute a Significant Portion, the proceeds are deposited into the Airport Revenue Account to be used as described below and the Authority believes that such disposal will not prevent it from fulfilling its obligations under the Indenture; or

(c) Prior to the disposition of such property, there is delivered to the Trustee (i) a certificate of a Consultant to the effect that notwithstanding such disposition, but taking into account the use of such proceeds in accordance with the expectations of the Authority as evidenced by a certificate of an Authorized Authority Representative, the Consultant estimates that Authority will be in compliance with the rate covenant under the Master Indenture during each of the five Fiscal Years immediately following such disposition, and (ii) a certificate of an Authorized Authority Representative that each of the requirements set forth in the next two paragraphs have been complied with.

Ontario Airport Facilities which were financed with the proceeds of obligations the interest on which is then excluded from gross income for federal income tax purposes will not be disposed of, except under the terms of provision (a) above, unless the Authority has first received a written opinion of Bond Counsel to the effect that such disposition will not cause the interest on such obligations to become includable in gross income for federal income tax purposes.

~~No such disposition will be made which would cause the Authority to be in default of any other covenant contained under the Master Indenture.~~

Settlement Payments; Subordination. In the event and to the extent that the Authority determines to make Settlement Payments from Net Pledged Revenues, any such payment of Settlement Payments will be made on a subordinate basis to the Initial Bonds as to payment from Net Pledged Revenues, and then only to the extent that the Authority would have remaining Net Pledged Revenues in its then-current Fiscal Year equal to at least 100% of the actual debt service and other obligations yet to become due and payable on the Outstanding Initial Bonds in such Fiscal Year. Prior to the payment in full of the Settlement Payments, the Authority will not issue Additional Bonds hereunder, and any Subordinated Obligations issued hereunder will be subordinate to the payment of Settlement Payments as to payment from Net Pledged Revenues.

~~Investments~~

Moneys held by the Trustee in the funds and accounts created under the Master Indenture and under any Supplemental Indenture will be invested and reinvested as directed by the Authority, in Permitted Investments subject to the restrictions set forth under the Master Indenture and any Supplemental Indenture and subject to the investment restrictions imposed upon the Authority by the Joint Powers Agreement and the laws of the State. The Authority will direct such investments by written certificate (upon which the Trustee may conclusively rely) of an Authorized Authority Representative; in the absence of any such instructions, the Trustee will, to the extent practicable, hold such funds uninvested. Investments will mature not later than such times as will be necessary to

~~C-20~~

provide moneys when needed for payment to be made from such funds and accounts. The Trustee will sell and reduce to cash a sufficient amount of any such investments whenever the cash balance in any such funds is insufficient to pay the amounts due therefrom. The Trustee will not be liable for any loss resulting from following the written directions of the Authority or as a result of liquidating investments to provide funds for any required payment, transfer, withdrawal or disbursement from any fund or account in which such Permitted Investment is held. The Trustee may buy or sell any Permitted Investment through its own (or any of its affiliates) investment Authority.

Earnings on the various funds and accounts created under any Supplemental Indenture will be deposited as provided in such Supplemental Indenture, except that (i) during the continuation of an Event of Default earnings on such funds and accounts (to the extent not required to be deposited in any Rebate Fund) will be deposited into the respective Debt Service Funds created under the respective Supplemental Indentures, and (ii) earnings on a bond reserve fund (to the extent not required to be deposited in a Rebate Fund) will be applied as required by the Supplemental Indenture creating such bond reserve fund.

~~Issuance of Series of Bonds; Supplemental Indenture; Application of Bond Proceeds~~

Bonds may be issued, from time to time under the Master Indenture, provided that prior to or simultaneous with the original delivery of each Series of Bonds, certain conditions, consisting of the delivery of certain documents and opinions described in the Master Indenture and the delivery of certificates (the “Certificates”) regarding debt service coverage must be met. Such Certificates are described in the Official Statement under “SECURITY AND SOURCES OF PAYMENT FOR THE 2016 BONDS — Additional Bonds.”

~~Defeasance~~

~~Discharge of Master Indenture. The Authority may pay and discharge the entire indebtedness on all Bonds Outstanding in any one or more of the following ways:~~

(a) by well and truly paying or causing to be paid the principal of (including redemption premiums, if any) and interest on all such Bonds Outstanding, as and when the same become due and payable (not including Bonds the principal of or interest on which has been paid by a Credit Provider until said principal and interest will have been paid by the Authority); or

(b) by depositing with the Trustee, in trust, at or before maturity, money which, together with the amounts then on deposit with the Trustee under the Master Indenture for the payment of debt service on such Bonds, including any reserve funds, is fully sufficient to pay or redeem all such Bonds Outstanding, including all principal, interest and redemption premiums, if any; or

~~(c) by delivering to the Trustee, for cancellation by it, all such Bonds Outstanding; or~~

(d) by depositing with the Trustee, in trust, Government Obligations in such amount which, in the determination of an Independent certified public accountant, who will certify such determination to the Trustee, will, together with the income or increment to accrue thereon and any other moneys of the Authority made available for such purpose, be fully sufficient to pay and discharge the indebtedness on all such Bonds (including all principal, interest and redemption premiums, if any) at or before their respective maturity dates; and if the Authority will also pay or cause to be paid all other sums payable by the Authority, then and in that case, at the election of the Authority (evidenced by a Certificate of the Authority signifying its intention to pay and discharge all such indebtedness and that the Master Indenture and all other obligations of the Authority under the Master Indenture with respect to such Bonds will cease and terminate, which will be filed with the Trustee), and notwithstanding that any such Bonds will not have been surrendered for payment, the pledge of the Airport Revenues and other funds provided for in the Master Indenture and all other obligations of the Authority under the Master Indenture with respect to such Bonds will cease, terminate and be completely discharged, and the Owners of such Bonds not so surrendered and paid will thereafter be entitled to payment only out of the money or Government Obligations deposited with the Trustee as aforesaid for their payment (subject, however, to the provisions of the Indenture governing payment of Bonds after the discharge of the Master Indenture). The

C-21 discharge of the obligations of the Authority under the Master Indenture will be without prejudice to the rights of the Trustee to charge for and be reimbursed by the Authority for any expenditure which it may thereafter incur in connectionherewith.

The Authority may at any time surrender to the Trustee for cancellation by it any Bonds previously issued and delivered, which the Authority may have acquired in any manner whatsoever, and such Bonds, upon such surrender and cancellation, will be deemed to be paid and retired.

Discharge of Liability on Bonds. If the Authority will pay and discharge any of the Bonds Outstanding in any one or more of the ways set forth in the Master Indenture (whether upon or prior to their maturity or the redemption date of such Bonds), and provided that if such Bonds are to be redeemed prior to the maturity thereof, notice of such redemption will have been given as provided in the Supplemental Indenture related to such Bonds or provision satisfactory to the Trustee will have been made for the giving of such notice, then all liability of the Authority in respect of such Bonds will cease, determine and be completely discharged and the Owners thereof will thereafter be entitled only to payment out of the money or Government Obligations deposited with the Trustee as aforesaid for their payment, subject, however, to the provisions of the following paragraph.

Payment of Bonds after Discharge of Master Indenture. Notwithstanding any provisions of the Master Indenture, any moneys deposited with the Trustee in trust for the payment of the principal of, or interest or premium on, any Bonds and remaining unclaimed for two years after the principal of all the Outstanding Bonds has become due and payable (whether at maturity or upon call for redemption or by declaration as provided in the Master Indenture) will then be repaid to the Authority (without liability for interest), and the Owners of such Bonds will thereafter be entitled to look only to the Authority for payment thereof, and all liability of the Trustee with respect to such moneys will thereupon cease. In the event of the repayment of any such moneys to the Authority as aforesaid, the Owners of the Bonds in respect of which such moneys were deposited will thereafter be deemed to be general creditors of the Authority for amounts equivalent to the respective amounts deposited for the payment of such Bonds and so repaid to the Authority (without interest thereon).

~~Defaults and Remedies~~

~~Events of Default. Each of the following events will constitute and is referred to under the Master Indenture as an “Event of Default”:~~

~~(a) a failure to pay the principal of or premium, if any, on any of the Bonds, when the same will become due and payable at maturity or upon redemption;~~

~~(b) a failure to pay any installment of interest on any of the Bonds when such interest will become due and payable;~~

~~(c) failure to pay the purchase price of any Bond when such purchase price will be due and payable upon an optional or mandatory tender date as provided in any Supplemental Indenture;~~

(d) a failure by the Authority to observe and perform any covenant, condition, agreement or provision (other than as specified in paragraphs (a), (b) and (c) above) that are to be observed or performed by the Authority and which are contained under the Master Indenture or a Supplemental Indenture, which failure, except for a violation under the rate covenant which will be controlled by the provisions set forth therein, will continue for a period of 60 days after written notice, specifying such failure and requesting that it be remedied, will have been given to the Authority by the Trustee, which notice may be given at the discretion of the Trustee and will be given at the written request of holders of 25% or more of the Principal Amount of the Bonds then Outstanding, unless the Trustee, or the Trustee and holders of Bonds in a Principal Amount not less than the Principal Amount of Bonds the holders of which requested such notice, will agree in writing to an extension of such period prior to its expiration; provided, however, that such period will be deemed extended if corrective action is initiated by the Authority within such period and is being diligently pursued until such failure is corrected;

C-22 (e) bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings, including without limitation proceedings under Chapter 9 of 11 United States Code (as the same may from time to time be hereafter amended), or other proceedings for relief under any federal or state bankruptcy law or similar law for the relief of debtors are instituted by or against the Authority and, if instituted against the Authority, said proceedings are consented to or are not dismissed within 60 days after such institution; or the occurrence of any other Event of Default as is provided in a Supplemental Indenture; or

~~(f) with respect to any Series of Bonds, the occurrence of any other Event of Default as is provided in a Supplemental Indenture authorizing the issuance of such Series.~~

If, on any date on which payment of principal of or interest on the Bonds is due and sufficient moneys are not on deposit with the Trustee or Paying Agent to make such payment, the Trustee will give telephone notice of such insufficiency to the Authority.

Remedies. (a) Upon the occurrence and continuance of any Event of Default, the Trustee in its discretion, may and upon the written direction of the holders of 25% or more of the Principal Amount of the Bonds then Outstanding and receipt of indemnity to its satisfaction, will, in its own name and as the Trustee of an express trust:

(i) by mandamus, or other suit, action or proceeding at law or in equity, enforce all rights of the Bondholders, and require the Authority to carry out any agreements with or for the benefit of the Bondholders and to perform its or their duties under the Joint Powers Agreement or any other law to which it is subject and the Master Indenture, provided that any such remedy may be taken only to the extent permitted under the applicable provisions of the MasterIndenture;

~~(ii) bring suit upon the Bonds;~~

~~(iii) commence an action or suit in equity to require the Authority to account as if it were the trustee of an express trust for the Bondholders; or~~

~~(iv) by action or suit in equity enjoin any acts or things which may be unlawful or in violation of the rights of the Bondholders.~~

(b) The Trustee will be under no obligation to take any action with respect to any Event of Default unless the Trustee has actual knowledge of the occurrence of such Event of Default. Nothing herein will be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Bondholder any plan of reorganization, arrangement, adjustment, or composition affecting the Bonds or the rights of any Holder thereof, or to authorize the Trustee to vote in respect of the claim of any Bondholder in any such proceeding without the approval of the Bondholders so affected.

Bondholders’ Right To Direct Proceedings. Anything under the Master Indenture to the contrary notwithstanding, holders of a majority in Principal Amount of the Bonds then Outstanding will have the right, at any time, by an instrument in writing executed and delivered to the Trustee, to direct the time, method and place of conducting all remedial proceedings available to the Trustee to be taken in connection with the enforcement of the terms described in the Master Indenture or exercising any trust or power conferred on the Trustee by the Master Indenture; provided that such direction will not be otherwise than in accordance with the provisions of the law and the Indenture and that there will have been provided to the Trustee security and indemnity satisfactory to the Trustee against the costs, expenses and liabilities to be incurred as a result thereof by the Trustee.

Limitation on Right To Institute Proceedings. No Bondholder will have any right to institute any suit, action or proceeding in equity or at law for the execution of any trust or power under the Indenture, or any other remedy under the Indenture or on such Bonds, unless such Bondholder or Bondholders previously will have given to the Trustee written notice of an Event of Default as provided above and unless also holders of 25% or more of the Principal Amount of the Bonds then Outstanding will have made written request of the Trustee to do so, after

C-23 the right to institute such suit, action or proceeding under the Master Indenture will have accrued, and will have afforded the Trustee a reasonable opportunity to proceed to institute the same in either its or their name, and unless there also will have been offered to the Trustee security and indemnity satisfactory to it against the costs, expenses and liabilities to be incurred therein or thereby, and the Trustee will not have complied with such request within a reasonable time; and such notification, request and offer of indemnity are declared in every such case, at the option of the Trustee, to be conditions precedent to the institution of such suit, action or proceeding; it being understood and intended that no one or more of the Bondholders will have any right in any manner whatever by his or their action to affect, disturb or prejudice the security thereof, or to enforce any right under the Indenture or under the Bonds, except in the manner provided under the Master Indenture, and that all suits, actions and proceedings at law or in equity will be instituted, had and maintained in the manner provided under the Master Indenture and for the equal benefit of all Bondholders.

Application of Moneys. If an Event of Default shall occur and be continuing, all amounts then held or any moneys received by the Trustee, by any receiver or by any Bondholder pursuant to any right given or action taken under the default and remedy provisions of the Master Indenture (which shall not include moneys provided through a Credit Facility, which moneys shall be restricted to the specific use for which such moneys were provided), after payment of the costs and expenses of the proceedings resulting in the collection of such moneys and of the fees, expenses, liabilities and advances incurred or made by the Trustee (including attorneys’ fees and disbursements), shall be applied as follows:

(a) All such moneys shall be applied (i) first, to the payment to the persons entitled thereto of all installments of interest then due on the Bonds, with interest on overdue installments, if lawful, at the rate per annum as provided in any Supplemental Indenture, as the case may be, in the order of maturity of the installments of such interest and, if the amount available shall not be sufficient to pay in full any particular installment of interest, then to the payment ratably, according to the amounts due on such installment, and (ii) second, to the payment to the persons entitled thereto of the unpaid principal amount of any of the Bonds which shall have become due with interest on such Bonds at such rate as provided in a Supplemental Indenture from the respective dates upon which they became due and, if the amount available shall not be sufficient to pay in full Bonds on any particular date determined to be the payment date, together with such interest, then to the payment ratably, according to the amount of principal and interest due on such date, in each case to the persons entitled thereto, without any discrimination or privilege.

(b) If the principal of all the Bonds subject to acceleration shall have been declared due and payable, all such moneys shall be applied to the payment of the principal and interest then due and unpaid upon the Bonds, with interest on overdue interest and principal, as aforesaid, without preference or priority of principal over interest or interest over principal, or of any installment of interest over any other installment of interest, or of any Bond over any other Bond, ratably, according to the amounts due respectively for principal and interest, to the persons entitled thereto without any discrimination or privilege.

(c) If the principal of all the Bonds subject to acceleration shall have been declared due and payable, and if such declaration shall thereafter have been rescinded and annulled, then, subject to the provisions of clause (b) above, which shall be applicable in the event that the principal of all the Bonds shall later become due and payable, the moneys shall be applied in accordance with the provisions of clause (a) above.

Whenever moneys are to be applied as described under this caption “Application of Moneys,”, such moneys shall be applied at such times, and from time to time, as the Trustee shall determine, having due regard to the amount of such moneys available for application and the likelihood of additional moneys becoming available for such application in the future. Whenever the Trustee shall apply such funds, it shall fix the date (which shall be an interest Payment Date unless it shall deem another date more suitable) upon which such application is to be made and upon such date interest on the amounts of principal and interest to be paid on such date shall cease to accrue. The Trustee shall give notice of the deposit with it of any such moneys and of the fixing of any such date by first-class United States mail, postage prepaid, to all Bondholders and shall not be required to make payment to any Bondholder until such Bonds shall be presented to the Trustee for appropriate endorsement or for cancellation if fully paid.

~~C-24~~

~~Trustee, Paying Agent and Registrar~~

Duties of Trustee. If an Event of Default has occurred and is continuing, the Trustee will exercise its rights and powers and use the same degree of care and skill in their exercise as a prudent person would exercise or use under the circumstances in the conduct of such person’s own affairs. The Trustee will perform the duties set forth under the Master Indenture and no implied duties or obligations will be read into the Master Indenture against the Trustee. Except during the continuance of an Event of Default, in the absence of any negligence on its part or any knowledge to the contrary, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed, upon certificates or opinions furnished to the Trustee and conforming to the requirements of the Master Indenture on their face. However, the Trustee will examine the certificates and opinions to determine whether they conform to the requirements of the Master Indenture.

The Trustee may not be relieved from liability for its own negligent action, its own negligent failure to act or its own willful misconduct, except that: (i) the Trustee will not be liable for any error of judgment made in good faith by a Responsible Officer unless the Trustee was negligent in ascertaining the pertinent facts; and (ii) the Trustee will not be liable with respect to any action it takes or omits to take in good faith in accordance with a direction received by it from Bondholders or the Authority in the manner provided under the Master Indenture.

The Trustee will not, by any provision of the Master Indenture, be required to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties under the Master Indenture, or in the exercise of any of its rights or powers, if repayment of such funds or indemnity satisfactory to it against such risk or liability is not reasonably assured to it. The Trustee will be under no obligation to exercise any of the rights or powers vested in it by the Master Indenture at the request or direction of any of the holders of the Bonds, unless such holders will have offered to the Trustee security or indemnity satisfactory to it against the costs, expenses and liabilities which might be incurred by it in compliance with such request or direction.

Notice of Defaults. If (i) an Event of Default has occurred or (ii) an event has occurred which with the giving of notice and/or the lapse of time would be an Event of Default and, with respect to such events for which notice to the Authority is required before such events will become Events of Default, such notice has been given, then the Trustee will promptly, after obtaining actual notice of such Event of Default or event described in the Master Indenture, give notice thereof to each Bondholder. Except in the case of a default in payment or purchase on any Bonds, the Trustee may withhold the notice if and so long as a committee of its Responsible Officers in good faith determines that withholding the notice is in the interests of the Bondholders.

Eligibility of Trustee. The Master Indenture will always have a Trustee that is a trust company, banking association or a bank having the powers of a trust company and is organized and doing business under the laws of the United States or any state or the District of Columbia, is authorized to conduct trust business under the laws of the State, is subject to supervision or examination by United States, state or District of Columbia authority and has (together with its corporate parent) a combined capital and surplus of at least $50,000,000 as set forth in its most recent published annual report of condition.

Replacement of Trustee. The Trustee may resign by notifying the Authority in writing prior to the proposed effective date of the resignation. The holders of a majority in Principal Amount of the Bonds may remove the Trustee by notifying the removed Trustee and may appoint a successor Trustee with the Authority’s consent. The Authority may remove the Trustee, by notice in writing delivered to the Trustee at least 60 days prior to the proposed removal date; provided, however, that the Authority will have no right to remove the Trustee during any time when an Event of Default has occurred and is continuing or when an event has occurred and is continuing or condition exists which with the giving of notice or the passage of time or both would be an Event of Default.

No resignation or removal of the Trustee will be effective until a new Trustee has taken office and delivered a written acceptance of its appointment to the retiring Trustee and to the Authority. If no successor Trustee will have been appointed and have accepted appointment within 45 days of giving notice of removal or notice of resignation as aforesaid, the resigning Trustee or any Bondholder (on behalf of itself and all other Bondholders) may petition any court of competent jurisdiction for the appointment of a successor Trustee, and

~~C-25~~

such court may thereupon, after such notice (if any) as it may deem proper, appoint such successor Trustee. Immediately thereafter, the retiring Trustee will transfer all property held by it as Trustee to the successor Trustee, the resignation or removal of the retiring Trustee will then (but only then) become effective and the successor Trustee will have all the rights, powers and duties of the Trustee under the Master Indenture.

If the Trustee resigns or is removed or for any reason is unable or unwilling to perform its duties under the Master Indenture, the Authority will promptly appoint a successor Trustee. If a Trustee is not performing its duties under the Master Indenture and a successor Trustee does not take office within 60 days after the retiring Trustee delivers notice of resignation or the Authority delivers notice of removal, the retiring Trustee, the Authority or the holders of a majority in Principal Amount of the Bonds may petition any court of competent jurisdiction for the appointment of a successor Trustee.

Successor Trustee or Agent by Merger. If the Trustee, any Paying Agent or Registrar consolidates with, merges or converts into, or transfers all or substantially all its assets (or, in the case of a bank or trust company, its corporate trust assets) to, another corporation and meets the qualifications set forth under the Master Indenture, the resulting, surviving or transferee corporation without any further act will be the successor Trustee, Paying Agent or Registrar.

Accounting Records and Reports of the Trustee. The Trustee will at all times keep, or cause to be kept, proper records in which complete and accurate entries will be made of all transactions made by it relating to the proceeds of the Bonds and all funds and accounts established by it pursuant hereto. Such records will be available for inspection with reasonable prior notice by the Authority on each Business Day during reasonable business hours and by any Bondholder, or his agent or representative duly authorized in writing, at reasonable hours and under reasonable circumstances. The Trustee will provide to the Authority each month a report of any Bond proceeds received during that month, if any, and the amounts deposited into each fund and account held by it under the Indenture and the amount disbursed from such funds and accounts, the earnings thereon, the ending balance in each of such funds and accounts and the investments of each such fund and account. The Trustee will annually, within 30 days after the end of the Fiscal Year, furnish to the Authority and to each Bondholder who will have filed his name and address with the Trustee for such purpose (at such Bondholder’s cost) a statement (which need not be audited) covering receipts, disbursements, allocation and application of Bond proceeds, Pledged Revenues and any other moneys in any of the funds and accounts established by it pursuant hereto or any Supplemental Indenture for the preceding year.

~~Modifications to Master Indenture~~

Supplemental Indentures Not Requiring Consent of Bondholders. The Authority may, from time to time and at any time, without the consent of or notice to the Bondholders, execute and deliver Supplemental Indentures supplementing and/or amending the Master Indenture or any Supplemental Indenture as follows:

~~(a) to provide for the issuance of a Series or multiple Series of Bonds under the Master Indenture and to set forth the terms of such Bonds and the special provisions which will apply to such Bonds;~~

(b) to cure any formal defect, omission, inconsistency or ambiguity in, or answer any questions arising under, the Master Indenture or any Supplemental Indenture, provided such supplement or amendment is not materially adverse to the Bondholders;

(c) to add to the covenants and agreements of the Authority under the Master Indenture or any Supplemental Indenture other covenants and agreements, or to surrender any right or power reserved or conferred upon the Authority, provided such supplement or amendment will not adversely affect the interests of the Bondholders;

(d) to confirm, as further assurance, any interest of the Trustee in and to the Net Pledged Revenues or in and to the funds and accounts held by the Trustee or in and to any other moneys, securities or funds of the Authority provided pursuant hereto or to otherwise add additional security for the Bondholders;

~~C-26~~

(e) to evidence any change made in the terms of any Series of Bonds if such changes are authorized by the Supplemental Indenture at the time the Series of Bonds is issued and such change is made in accordance with the terms of such Supplemental Indenture;

~~(f) to comply with the requirements of the Trust Indenture Act of 1939, as from time to time amended;~~

~~(g) to modify, alter, amend or supplement the Master Indenture or any Supplemental Indenture in any other respect which is not materially adverse to the Bondholders;~~

(h) to qualify the Bonds or a Series of Bonds for a rating or ratings by any of Fitch, Moody’s and S&P; (i) to accommodate the technical, operational and structural features of Bonds which are issued or are proposed to be issued or of a Program which has been authorized or is proposed to be authorized, including, but not limited to, changes needed to accommodate commercial paper, auction bonds, variable rate or adjustable rate bonds, discounted or compound interest bonds or other forms of indebtedness which the Authority from time to time deems appropriate to incur;

~~(j) to accommodate the use of a Credit Facility or Liquidity Facility for specific Bonds or a specific Series of Bonds; and~~

(k) to comply with the requirements of the Code as are necessary, in the opinion of Bond Counsel, to prevent the federal income taxation of the interest on the Bonds, including, without limitation, the segregation of Pledged Revenues into different funds.

Before the Authority will execute any Supplemental Indenture, there will have been delivered to the Authority and Trustee an opinion of Bond Counsel to the effect that such Supplemental Indenture is authorized or permitted by the Master Indenture, the Joint Powers Agreement and other applicable law, complies with their respective terms, will, upon the execution and delivery thereof, be valid and binding upon the Authority in accordance with its terms and will not cause interest on any of the Bonds which is then excluded from gross income of the recipient thereof for federal income tax purposes to be included in gross income for federal income tax purposes.

Supplemental Indenture Requiring Consent of Bondholders. Except for any Supplemental Indenture entered into that does not require consent of Bondholders and any Supplemental Indenture entered into pursuant to the immediately succeeding paragraph, the holders of not less than a majority in aggregate Principal Amount of the Bonds then Outstanding will have the right from time to time to consent to and approve the execution by the Authority of any Supplemental Indenture deemed necessary or desirable by the Authority for the purposes of modifying, altering, amending, supplementing or rescinding, in any particular, any of the terms or provisions contained under the Master Indenture or in a Supplemental Indenture; provided, however, that, unless approved in writing by the holders of all the Bonds then Outstanding or unless such change affects less than all Series of Bonds and the following paragraph is applicable, nothing under the Master Indenture contained will permit, or be construed as permitting, (i) a change in the scheduled times, amounts or currency of payment of the principal of, interest on or Accreted Value of any Outstanding Bonds or (ii) a reduction in the principal amount or redemption price of any Outstanding Bonds or the rate of interest thereon; and provided that nothing contained in the Master Indenture, will, unless approved in writing by the holders of all the Bonds then Outstanding, permit or be construed as permitting (iii) the creation of a lien (except as expressly permitted by the Master Indenture) upon or pledge of the Net Pledged Revenues, ranking prior to or on a parity with the claim created under the Master Indenture, (iv) except with respect to additional security which may be provided for a particular Series of Bonds, a preference or priority of any Bond or Bonds over any other Bond or Bonds with respect to the security granted therefor under the Granting Clauses of the Master Indenture, or (v) a reduction in the aggregate Principal Amount of Bonds the consent of the Bondholders of which is required for any such Supplemental Indenture. Nothing under the Master Indenture contained, however, will be construed as making necessary the approval by Bondholders of the execution of any Supplemental Indenture not requiring Bondholder consent as authorized in

~~C-27~~

~~the Master Indenture, including the granting, for the benefit of particular Series of Bonds, security in addition to the pledge of the Net Pledged Revenues.~~

The Authority may, from time to time and at any time, execute a Supplemental Indenture which amends the provisions of an earlier Supplemental Indenture under which a Series or multiple Series of Bonds were issued. If such Supplemental Indenture is executed for one of the purposes set forth in the Master Indenture as not requiring Bondholder consent, no notice to or consent of the Bondholders will be required. If such Supplemental Indenture contains provisions which affect the rights and interests of less than all Series of Bonds Outstanding and consent of the Bondholders is required pursuant to the Master Indenture, then this paragraph (rather than the paragraph above) will control and, subject to the terms and provisions contained in the Master Indenture governing Supplemental Indentures not requiring Bondholder approval, and not otherwise, the holders of not less than 51% in aggregate Principal Amount of the Bonds of all Series which are affected by such changes will have the right from time to time to consent to any Supplemental Indenture deemed necessary or desirable by the Authority for the purposes of modifying, altering, amending, supplementing or rescinding, in any particular, any of the terms or provisions contained in such Supplemental Indenture and affecting only the Bonds of such Series; provided, however, that, unless approved in writing by the holders of all the Bonds of all the affected Series then Outstanding, nothing contained under the Master Indenture will permit, or be construed as permitting, (i) a change in the scheduled times, amounts or currency of payment of the principal of, interest on or Accreted Value of any Outstanding Bonds of such Series or (ii) a reduction in the principal amount or redemption price of any Outstanding Bonds of such Series or the rate of interest thereon. Nothing contained under the Master Indenture, however, will be construed as making necessary the approval by Bondholders of the adoption of any Supplemental Indenture as authorized under the Master Indenture to be adopted without Bondholder approval, including the granting, for the benefit of particular Series of Bonds, security in addition to the pledge of the Net Pledged Revenues.

If at any time the Authority shall desire to enter into any Supplemental Indenture that requires Bondholder consent under the Master Indenture, the Authority shall cause notice of the proposed execution of the Supplemental Indenture to be given by first class United States mail, postage prepaid, to all Bondholders, or all Bondholders of the affected Series, if applicable. Such notice shall briefly set forth the nature of the proposed Supplemental Indenture and shall state that a copy thereof is on file at the office of the Authority for inspection by all Bondholders and it shall not be required that the Bondholders approve the final form of such Supplemental Indenture but it shall be sufficient if such Bondholders approve the substance thereof.

~~Rights of Credit Provider~~

The Master Indenture states that if a Credit Facility is provided for a Series of Bonds or for specific Bonds, unless otherwise provided by the Authority in the Supplemental Indenture under which such Bonds are issued, the Credit Provider will have (a) the right to make requests of, direct or provide consent to actions under the Indenture or to otherwise direct proceedings all as provided in the Master Indenture to the same extent and in place of the owners of the Bonds, when such request, direction or consent is required from owners of Bonds, which are secured by the Credit Facility and for such purposes the Credit Provider will be deemed to be the Bondholder of such Bonds; and (b) the right to act in place of the owners of the Bonds which are secured by the Credit Facility for purposes of removing a Trustee or appointing a Trustee. The rights granted to any such Credit Provider will be disregarded and be of no effect if the Credit Provider is in default of its payment obligations under its Credit Facility.

~~THE FIRST SUPPLEMENTAL TRUST INDENTURE~~

The following is a summary of certain provisions of the First Supplemental Indenture. Such summary is only a brief description of limited provisions of such document and is qualified in its entirety by reference to the full text of the First Supplemental Indenture.

~~C-28~~

~~General Terms of the 2016 Bonds~~

~~The First Supplemental Indenture sets forth the terms of the 2016 Bonds, most of which terms are described earlier in this Official Statement under “DESCRIPTION OF THE 2016 BONDS.”~~

~~Establishment of Funds~~

The First Supplemental Indenture establishes the following funds and accounts to be held and administered by the Trustee: the Bond Reserve Subaccount, Series 2016 within the General Account of the Reserve Fund; and the Costs of Issuance Fund, Series 2016 (the “2016 Costs of Issuance Fund”). The First Supplemental Indenture also establishes the following funds and accounts to be held and administered by the Treasurer: an Interest Subaccount for the 2016 Bonds (the “2016 Interest Subaccount”) within the Interest Account of the Debt Service Fund; and a Principal Subaccount for the 2016 Bonds (the “2016 Principal Subaccount”), within the Principal Account of the Debt Service Fund.

The Treasurer will keep and maintain records and reports in respect of the foregoing funds, accounts and subaccounts and make such records and reports available to the Authority and the Trustee, as if such records and reports were subject to the provisions of the Master Indenture governing retention of books and records. Upon and during an Event of Default, the Treasurer will immediately transfer the foregoing funds, accounts and subaccounts and the deposits therein to the Trustee (together with the Treasurer’s records and reports relating thereto), and such funds, accounts and subaccounts will be held and administered by the Trustee for so long as any Event of Default continues, following which the Trustee will, but only upon the request of the Authority, transfer such funds, accounts and subaccounts and the deposits therein back to the Treasurer (together with the Trustee’s records and reports relating thereto) to hold and administer in accordance with the provisions of the Master Indenture.

~~Debt Service Fund~~

For so long as the Treasurer holds and administers the Debt Service Fund and the accounts and subaccounts therein, the Authority will instruct the Treasurer to transfer funds from the Airport Revenue Fund into the Debt Service Fund at the times and in the amounts required by the Master Indenture in respect to the 2016 Bonds. To the extent the Trustee holds and administers the Debt Service Fund and the accounts and subaccounts therein, the Authority will instruct the Treasurer to withdraw funds and make payments from the Airport Revenue Fund to the Trustee for deposit into the Debt Service Fund at the times and in the amounts required by the Master Indenture in respect to the 2016 Bonds. With the funds made available to it pursuant to the Master Indenture for such purpose, the Trustee or the Treasurer, as applicable, will make deposits or transfers into the Debt Service Fund as follows:

(a) 2016 Interest Subaccount. The Treasurer or the Trustee, as applicable, will deposit or transfer into the 2016 Interest Subaccount amounts as instructed in writing by or as received from the Authority, as provided in the Master Indenture, to be used to pay interest on the 2016 Bonds. The Treasurer or the Trustee, as applicable, will also deposit into the 2016 Interest Subaccount any other amounts deposited with it for deposit in the 2016 Interest Subaccount or transferred from other funds and accounts for deposit therein.

(b) 2016 Principal Subaccount. The Treasurer or the Trustee, as applicable, will deposit into the 2016 Principal Subaccount amounts as instructed in writing by or as received from the Authority, as provided in the Master Indenture, to be used to pay principal of the 2016 Bonds at maturity or to pay the redemption price of the 2016 Bonds being redeemed as provided in the First Supplemental Indenture. The Treasurer or the Trustee, as applicable, will also deposit into the 2016 Principal Subaccount any other amounts deposited with it for deposit into the 2016 Principal Subaccount or transferred from other funds and accounts for deposit therein.

The Debt Service Fund will be invested and reinvested as directed by an Authorized Authority Representative in Permitted Investments. Earnings on the 2016 Interest Subaccount and the 2016 Principal Subaccount will be transferred into the Airport Revenue Fund unless an Event of Default exists under the Master Indenture, in which event the earnings will be retained in such account pursuant to the Master Indenture.

~~C-29~~

~~Reserve Fund~~

As a condition of issuance of the 2016 Bonds, the 2016 Bond Reserve Surety Bond will be credited to the 2016 Reserve Subaccount, such that the aggregate amount credited to the 2016 Reserve Account will be equal to the Required Reserve. The 2016 Reserve Account will be held, invested and used as provided in the Master Indenture.

A Reserve Fund Surety Policy will be acceptable in lieu of a deposit of cash or securities into the 2016 Reserve Account, or may be substituted for amounts on deposit in the 2016 Reserve Account, only if at the time of such deposit (i) such Reserve Fund Surety Policy extends to the maturity of the 2016 Bonds of the longest maturity then Outstanding, or the Authority has agreed, by Supplemental Indenture, that it will replace such Reserve Fund Surety Policy prior to its expiration with another Reserve Fund Surety Policy which will have no adverse effect on the ratings, if any, then in effect on the 2016 Bonds, or with cash; and (ii) the face amount of the Reserve Fund Surety Policy, together with amounts on deposit in the General Account, including the face amount of any other Reserve Fund Surety Policy, is at least equal to the Required Reserve.

Notwithstanding anything to the contrary contained in the Master Indenture, at any time one or more surety bonds, including the 2016 Bond Reserve Surety Bond, or insurance policies (collectively, “Reserve Fund Surety Policies”) are on deposit in the General Account of the Reserve Fund, the Trustee will: (i) withdraw and use all cash and investments, if any, on deposit in the General Account prior to using and withdrawing any amounts derived from payments under any Reserve Fund Surety Policies; and (ii) draw on all Reserve Fund Surety Policies on a pro rata basis based on the coverage then available under each such Reserve Fund Surety Policy, if there is more than one Reserve Fund Surety Policy on deposit in the General Account, after applying all available cash and investments in the General Account of the Reserve Fund. “Available coverage” means the coverage then available for disbursement pursuant to the terms of the applicable Reserve Fund Surety Policy without regard to the legal or financial ability or willingness of the provider of such Reserve Fund Surety Policy to honor a claim or draw thereon or the failure of such provider to honor any such claim or draw. Amounts received by the Trustee from the Authority pursuant to the immediately succeeding paragraph as a replenishment of amounts withdrawn from the General Account will be applied (i) first on a pro rata basis to reimburse draws on any Reserve Fund Surety Policy (including the payment of Policy Costs with respect to the 2016 Bond Reserve Surety Bond), and (ii) to replenish cash withdrawn from the General Account.

If moneys have been withdrawn from the General Account or a payment has been made under a Reserve Fund Surety Policy constituting all or a portion of the General Account, and deposited into an account or subaccount of the Debt Service Fund to prevent a default on the 2016 Bonds, then the Authorized Authority Representative will pay to the Trustee but only as provided in the First Supplemental Indenture, the full amount so withdrawn, together with any Policy Costs due with respect to the 2016 Bond Reserve Surety Bond, if applicable, and the expenses and interest, if any, required under the terms of any other Reserve Fund Surety Policy, or so much as will be required to restore the General Account to the Required Reserve and to pay such interest, if any. Such repayment will be made in 12 substantially equal monthly installments each due on the first Business Day of the month commencing with the first month after such withdrawal occurs. If such repayment is with respect to a draw under a Reserve Fund Surety Policy, the Trustee will pay to the provider of such Reserve Fund Surety Policy the amount received by the Trustee from the Authority which is designated to be used to reimburse the provider of such Reserve Fund Surety Policy. The Trustee will immediately notify the paying agent for the Reserve Fund Surety Policy, if any, of such reimbursement, and the amount available to be drawn under the Reserve Fund Surety Policy will increase by the amount of such reimbursement, provided that, with respect to the 2016 Bond Reserve Surety Bond, amounts paid by the Authority with respect to Policy Costs shall be credited first to interest due, then to the expenses due and then to principal due. As and to the extent that payments are made to the 2016 Bond Insurer on account of principal due, then coverage under the 2016 Bond Reserve Surety Bond will be increased in a like amount, subject to the terms of the Reserve Policy.

Moneys in the General Account will be invested and reinvested by the Trustee at the written direction of the Authorized Authority Representative in Permitted Investments. Earnings on the General Account will be paid pro rata to the related principal and interest subaccounts of the Debt Service Fund to be applied as a credit against the Authority’s obligation to make its next deposit unless an amount has been withdrawn from the General Account as a result of a deficiency in a related Debt Service Fund and such withdrawal has not been repaid or, as of the most recent valuation of the Reserve Fund, the amount therein was valued at less than the Required Reserve and the

~~C-30~~

~~deficiency has not yet been restored, in either of which events the earnings will be retained in the Reserve Fund until the deficiency therein has been eliminated.~~

All money remaining in the General Account related to the 2016 Bonds on the final Payment Date, in excess of the amount required to make provisions for the payment in full of the interest and/or the principal of the 2016 Bonds and the amount required to be held by any Supplemental Indenture will be transferred to the Authority for deposit in the Airport Revenue Fund.

~~2016 Costs of Issuance Fund~~

There will be deposited into the 2016 Costs of Issuance Fund the amount provided in the First Supplemental Indenture. The Trustee will make payments or disbursements from the 2016 Costs of Issuance Fund upon receipt from the Authority of a written requisition executed by an Authorized Authority Representative, which requisition will state, with respect to each amount requested thereby, (i) that such amount is to be paid from the 2016 Costs of Issuance Fund, (ii) the number of the requisition from such account, (iii) the amount to be paid, the name of the entity to which the payment is to be made, and (iv) a description of the Costs of Issuance represented by such payment. Each such requisition will be sufficient evidence to the Trustee of the facts stated therein and the Trustee will have no duty to confirm the accuracy of such facts. On May 1, 2017, all amounts remaining on deposit in the 2016 Costs of Issuance Fund will be transferred to the Authority to be used for any lawful purpose.

~~Continuing Disclosure~~

The Authority covenants and agrees under the First Supplemental Indenture that it will comply with and carry out all of the provisions of the Continuing Disclosure Certificate applicable to such party. Notwithstanding any other provision of the Master Indenture, failure of the Authority to comply with the Continuing Disclosure Certificate will not be considered an Event of Default under the Master Indenture; however, the Trustee may (and, at the request of any Participating Underwriter or the Holders of at least 25% aggregate principal amount of Outstanding Bonds, after indemnification to its satisfaction, will) or any Bondholder or Beneficial Owner of the 2016 Bonds may take such actions as may be necessary and appropriate, including seeking mandate or specific performance by court order, to cause the Authority to comply with its obligations described in this paragraph. For purposes of this paragraph, “Beneficial Owner” means any person which (a) has the power, directly or indirectly, to vote or consent with respect to, or to dispose of ownership of, any 2016 Bond (including persons holding 2016 Bonds through nominees, depositories or other intermediaries), or (b) is treated as the owner of any Bonds for federal income tax purposes. Notwithstanding anything to the contrary, in no event will the Trustee be deemed to have breached its fiduciary duty or any other duty or obligation arising under the First Supplemental Indenture or under any related document in connection with the performance of any of the terms contained in the Continuing Disclosure Certificate.

~~Bond Insurance Provisions~~

The payment when due of the principal of and interest on the 2016 Bonds will be insured by the 2016 Municipal Bond Insurance Policy. The First Supplemental Indenture sets forth certain covenants of the Authority in favor of the 2016 Bond Insurer with respect to the Insured Bonds. For additional information concerning these covenants and the rights of the 2016 Bond Insurer, see “SECURITY AND SOURCES OF PAYMENT FOR THE 2016 BONDS — Rights of the 2016 Bond Insurer” in the front of the Official Statement.

~~C-31 [THIS PAGE INTENTIONALLY LEFT BLANK]~~

~~APPENDIX D-1 FORM OF BOND COUNSEL OPINION~~

~~______, 2016~~

~~Ontario International Airport Authority Ontario, California~~

~~RE: $______Ontario International Airport Authority Ontario International Airport Revenue Bonds Series 2016 (Taxable)~~

~~Ladies and Gentlemen:~~

We have acted as bond counsel to the Ontario International Airport Authority (the “Authority”) in connection with the issuance and sale by the Authority of $______aggregate principal amount of its Ontario International Airport Revenue Bonds Series 2016 (Taxable) (the “2016 Bonds”).

The 2016 Bonds are being issued pursuant to the Joint Exercise of Powers Act, California Government Code Section 6500, et seq. (as it may be amended and supplemented, the “Joint Powers Act”) and pursuant to a Master Trust Indenture, dated as of November 1, 2016 (the “Master Indenture”) and a First Supplemental Trust Indenture, dated as of November 1, 2016 (the “First Supplemental Indenture,” and together with the Master Indenture, as the same may be amended and supplemented from time to time, the “Indenture”), each by and between the Authority and The Bank of New York Mellon, as trustee (the “Trustee”). Except as otherwise indicated, capitalized terms used in this opinion and defined in the Indenture will have the meanings given in the Indenture.

In our capacity as bond counsel, we have examined copies, certified to us as being true and complete copies, of the proceedings of the Authority for the authorization and issuance of the 2016 Bonds, In this connection we have also examined such certificates of public officials and officers of the Authority as we have considered necessary for the purposes of this opinion. Except as otherwise indicated, capitalized terms used in this opinion and defined in the Indenture will have the meanings given in the Indenture.

~~We have, with your approval, assumed that all items submitted to us as originals are authentic and that all items submitted as copies conform to the originals.~~

On the basis of such examination, our reliance upon the assumptions contained herein and our consideration of those questions of law we considered relevant, and subject to the limitations and qualifications in this opinion, we are of the opinion that:

1. The 2016 Bonds have been duly authorized and issued and constitute legally valid, binding obligations of the Authority, enforceable against the Authority in accordance with their terms and the terms of the Indenture.

2. Each of the Master Indenture and the First Supplemental Indenture has been duly executed and delivered by the Authority and constitutes the legally valid and binding obligation of the Authority, enforceable against the Authority in accordance with its terms. The 2016 Bonds, assuming due authentication by the Trustee, are entitled to the benefits of the Indenture.

The 2016 Bonds are special limited obligations of the Authority payable solely as to both principal and interest from and secured by a pledge of Net Pledged Revenues and amounts on deposit in certain funds and

~~D-1-1~~

accounts established under the Indenture. Neither the full faith and credit nor the taxing power of the City, the County, the State or any political subdivision or agency of the State is pledged to the payment of the principal of, premium, if any, or interest on the 2016 Bonds. The Authority has no taxing power.

Our opinions set forth above assume that the Trustee has duly authenticated the 2016 Bonds and are subject to (a) applicable bankruptcy, insolvency, reorganization, moratorium or similar laws relating to or affecting creditors' rights generally (including, without limitation, fraudulent conveyance laws), (b) the effect of general principles of equity, including, without limitation, concepts of materiality, reasonableness, good faith and fair dealing and the possible unavailability of specific performance or injunctive relief, regardless of whether considered in a proceeding in equity or at law, and (c) limitations on the enforcement of legal remedies against public agencies in the State of California.

In rendering all such opinions, we assume, without independent verification, and rely upon: (i) the accuracy of the factual matters represented, warranted or certified in the proceedings and documents we have examined, and (ii) the due and legal authorization, execution and delivery of those documents by, and the valid, binding and enforceable nature of those documents upon, any parties other than the Authority.

We express no opinion herein as to the priority of any liens or security interests created by the Indenture. In addition, no opinion is expressed herein on the accuracy, completeness or sufficiency of the offering material relating to the 2016 Bonds.

We express no opinion as to any provision of the Master Indenture or the First Supplemental Indenture requiring written amendments or waivers of the Master Indenture or the First Supplemental Indenture insofar as it suggests that oral or other modifications, amendments or waivers could not be effectively agreed upon by the parties or that the doctrine of promissory estoppel might not apply.

~~We express no opinion concerning federal or state securities laws or regulations.~~

~~We further express no opinion as to any federal or State tax consequences of the ownership of, receipt of interest on, or disposition of the 2016 Bonds.~~

We call attention to the fact that the opinions expressed herein may be affected by actions taken or omitted or events occurring or failing to occur after the date hereof. We have not undertaken to determine, or inform any person, whether any such actions are taken, omitted, occur or fail to occur.

~~The law covered by this opinion is limited to the present federal law of the United States and the present law of the State of California.~~

This opinion is expressly limited to the matters set forth above, and we render no opinion, whether by implication or otherwise, as to any other matters. This opinion speaks only as of the date hereof and we assume no obligation to update or supplement this opinion to reflect any facts or circumstances that arise after the date of this opinion and come to our attention, or any future changes in laws.

~~Respectfully submitted,~~

~~D-1-2~~

~~APPENDIX D-2 FORM OF OPINION OF SPECIAL TAX COUNSEL~~

~~______, 2016~~

~~Ontario International Airport Authority Ontario, California~~

~~Re: $______Ontario International Airport Authority, Revenue Bonds, Series 2016 (Taxable)~~

~~Ladies and Gentlemen:~~

We are acting as Special Tax Counsel in connection with the issuance by the Ontario International Airport Authority (the “Authority”) of its $______Revenue Bonds, Series 2016 (Taxable) (the “2016 Bonds”). In that connection, we have reviewed the record of proceedings related to the issuance of the 2016 Bonds, including the Master Trust Indenture (the “Master Indenture”) and a First Supplemental Trust Indenture (the “First Supplemental Indenture,” and together with the Master Indenture, the “Indenture”), each dated as of November 1, 2016, each by and between the Authority and The Bank of New York Mellon, as trustee (the “Trustee”), and such other documents, records, agreements and certificates as we have considered necessary or appropriate for us to render these opinions. We have also made such other investigations of fact and law as we have deemed necessary. We have, with your approval, assumed the genuineness of signatures and that all items submitted to us as originals are authentic and that all items submitted as copies conform to the originals. In rendering the opinions herein, we have assumed the accuracy of the approving opinion of O’Melveny & Myers LLP, Bond Counsel, delivered on even date herewith, relating to the validity of the 2016 Bonds (the “Approving Opinion”).

On the basis of our examination of the documents we deemed necessary to render the opinions herein, our reliance upon the assumptions contained herein and our consideration of those questions of law we consider relevant, and subject to the limitations and qualifications set forth herein, we are of the following opinions:

~~1. Interest on the 2016 Bonds is not excluded from gross income for federal income tax purposes under Section 103 of the Code.~~

~~2. Interest on the 2016 Bonds is exempt from personal income taxes of the State of California under present state law.~~

Except as stated in the paragraphs 1 and 2 above, we express no opinion as to any other federal, state or local tax consequences of the ownership or disposition of the 2016 Bonds. Furthermore, we express no opinion as to any federal, state or local tax law consequences with respect to the 2016 Bonds, or the interest thereon, if any action is taken with respect to the 2016 Bonds or the proceeds thereof upon the advice or approval of other counsel.

Our opinions expressed herein are rendered only with regard to the matters expressly opined on above and do not consider or extend to any documents, agreements, representations or other material of any kind not specifically opined on above. No other opinions are intended nor should they be inferred. This opinion letter is issued as of the date hereof, and we assume no obligation to update, revise or supplement this opinion letter to reflect any facts or circumstances that may hereafter come to our attention, or any changes in law, or in interpretations thereof, that may hereafter occur, for any reason whatsoever.

~~D-2-1~~

This opinion is furnished by us as Special Tax Counsel in connection with the issuance of the 2016 Bonds and may be relied upon by you only in connection with such issuance. It may not be used or relied upon by you for any other purpose.

~~Respectfully submitted~~

~~D-2-2~~

~~APPENDIX E~~

~~BOOK-ENTRY ONLY SYSTEM~~

~~Introduction~~

Unless otherwise noted, the information contained under the subcaption “– General” below has been provided by DTC. Neither the City nor the Authority make any representations as to the accuracy or the completeness of such information. The beneficial owners of the 2016 Bonds should confirm the following information with DTC, the Direct Participants or the Indirect Participants.

NEITHER THE CITY, THE AUTHORITY NOR THE TRUSTEE WILL HAVE ANY RESPONSIBILITY OR OBLIGATION TO DIRECT PARTICIPANTS, TO INDIRECT PARTICIPANTS OR TO ANY BENEFICIAL OWNER WITH RESPECT TO (A) THE ACCURACY OF ANY RECORDS MAINTAINED BY DTC, ANY DIRECT PARTICIPANT OR ANY INDIRECT PARTICIPANT; (B) ANY NOTICE THAT IS PERMITTED OR REQUIRED TO BE GIVEN TO THE OWNERS OF THE 2016 BONDS UNDER THE INDENTURE, (C) THE SELECTION BY DTC OR ANY DIRECT PARTICIPANT OR INDIRECT PARTICIPANT OF ANY PERSON TO RECEIVE PAYMENT IN THE EVENT OF A PARTIAL REDEMPTION OF THE 2016 BONDS; (D) THE PAYMENT BY DTC OR ANY DIRECT PARTICIPANT OR INDIRECT PARTICIPANT OF ANY AMOUNT WITH RESPECT TO THE PRINCIPAL, PREMIUM, IF ANY, OR INTEREST DUE WITH RESPECT TO THE OWNER OF THE 2016 BONDS; (E) ANY CONSENT GIVEN OR OTHER ACTION TAKEN BY DTC AS THE OWNERS OF 2016 BONDS; OR (F) ANY OTHER MATTER REGARDING DTC.

~~General~~

DTC will act as securities depository for the 2016 Bonds. The 2016 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 bond certificate will be issued for each maturity of the 2016 Bonds, each in the aggregate principal amount of such maturity, and will be deposited with DTC or held by the Trustee.

DTC, the world’s largest securities depository, 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 3.5 million issues of U.S. and non-U.S. equity issues, corporate and municipal debt issues, and money market instruments (from over 100 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 2016 Bond 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 is the holding company for DTC, National Securities Clearing Corporation and Fixed Income Clearing Corporation, all of which are registered clearing agencies DTCC, is owned by the users of its regulated subsidiaries. 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 rating of AA+. 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. The Authority undertakes no responsibility for and makes no representations as to the accuracy or the completeness of the content of such material contained on DTC’s website as described in the preceding sentence including, but not limited to, updates of such information or links to other Internet sites accessed through the aforementioned website. Information on such website is not incorporated herein

~~E-1~~

Purchases of the 2016 Bonds under the DTC system must be made by or through Direct Participants, which will receive a credit for the 2016 Bonds on DTC’s records. The ownership interest of each actual purchaser of each 2016 Bond (“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 confirmation 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 2016 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 2016 Bonds, except in the event that use of the book-entry system for the 2016 Bonds is discontinued.

To facilitate subsequent transfers, all 2016 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 2016 Bonds with DTC and their registration in the name of Cede & Co. or such other DTC nominee do not affect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the 2016 Bonds DTC records reflect only the identity of the Direct Participants to whose accounts such 2016 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. Beneficial Owners of 2016 Bonds may wish to take certain steps to augment the transmission to them of notices of significant events with respect to the 2016 Bonds, such as redemptions, tenders, defaults and proposed amendments to the Indenture. For example, Beneficial Owners of 2016 Bonds may wish to ascertain that the nominee holding the 2016 Bonds for their benefit has agreed to obtain and transmit notices to Beneficial Owners. In the alternative, Beneficial Owners may wish to provide their names and addresses to the registrar and request that copies of notices be provided directly to them.

Redemption notices shall be sent to DTC. If less than all of the 2016 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 each maturity to be redeemed.

Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to 2016 Bonds unless authorized by a Direct Participant in accordance with DTC’s Money Market Instrument Procedures. Under its usual procedures, DTC will mail an Omnibus Proxy to the Authority 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 2016 Bonds are credited on the record date (identified in a listing attached to the Omnibus Proxy).

Principal, premium, if any, and interest payments on the 2016 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 Authority or the Trustee, on payable date in accordance with their respective holdings shown on DTC’s records. Payments by Direct Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with 2016 Bonds 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 Authority, or the Trustee, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of principal, premium, if any, and interest on the 2016 Bonds to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of the Authority or the Trustee, 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 depository with respect to the 2016 Bonds at any time by giving reasonable notice to the Authority or the Trustee. Under such circumstances, in the event that a successor depository is not obtained, 2016 Bond certificates are required to be printed and delivered.

~~E-2~~

The Authority may decide to discontinue use of the system of book-entry transfers through DTC (or a successor securities depository). In that event, bond certificates will be printed and delivered to DTC.

The information in this section concerning DTC and DTC’s book-entry system has been obtained from sources that the Authority believes to be reliable, but the Authority takes no responsibility for the accuracy thereof.

~~No Assurance Regarding DTC Practices~~

THE AUTHORITY WILL HAVE NO RESPONSIBILITY OR OBLIGATION WITH RESPECT TO THE PAYMENTS TO THE DIRECT PARTICIPANTS, ANY INDIRECT PARTICIPANTS OR THE BENEFICIAL OWNERS, OR THE PROVISION OF NOTICE TO THE DIRECT PARTICIPANTS, ANY INDIRECT PARTICIPANTS OR THE BENEFICIAL OWNERS WITH RESPECT TO THE 2016 BONDS. NO ASSURANCE CAN BE GIVEN BY THE AUTHORITY THAT DTC, DIRECT PARTICIPANTS, INDIRECT PARTICIPANTS OR OTHER NOMINEES OF THE BENEFICIAL OWNERS WILL MAKE PROMPT TRANSFER OF PAYMENTS TO THE BENEFICIAL OWNERS, THAT THEY WILL DISTRIBUTE NOTICES RECEIVED AS THE REGISTERED OWNER OF THE SERIES 2016 BONDS TO THE BENEFICIAL OWNERS, THAT THEY WILL DO SO ON A TIMELY BASIS, OR THAT DTC WILL ACT IN THE MANNER DESCRIBED IN THIS OFFICIAL STATEMENT.

In the event the Authority determines not to continue the book-entry system or DTC determines to discontinue its services with respect to the 2016 Bonds and the Authority does not select another qualified depository, the Authority shall deliver one or more 2016 Bonds in such principal amount or amounts, in authorized denominations, and registered in whatever name or names, as DTC shall designate. In such event, transfers and exchanges of 2016 Bonds will be governed by the provisions of the Indenture.

~~Risks of Book-Entry System~~

~~The Authority makes no assurance, and the Authority shall incur no liability, regarding the fulfillment by DTC of its obligations under the book-entry system with respect to the 2016 Bonds.~~

In addition, Beneficial Owners of the 2016 Bonds may experience some delay in their receipt of distributions of principal of, premium, if any, and interest on, the 2016 Bonds since such distributions will be forwarded by the Authority to DTC and DTC will credit such distributions to the accounts of the Direct Participants which will thereafter credit them to the accounts of the Beneficial Owners either directly or through Indirect Participants.

Since transactions in the 2016 Bonds can be effected only through DTC, Direct Participants, Indirect Participants and certain banks, the ability of a Beneficial Owner to pledge 2016 Bonds to persons or entities that do not participate in the DTC system, or otherwise to take actions in respect of such 2016 Bonds, may be limited due to lack of a physical certificate. Beneficial Owners will not be recognized by the Authority as registered owners of the 2016 Bonds, and Beneficial Owners will only be permitted to exercise the rights of registered owners indirectly through DTC and its Participants.

~~E-3 [THIS PAGE INTENTIONALLY LEFT BLANK]~~

~~APPENDIX F~~

~~FORM OF CONTINUING DISCLOSURE CERTIFICATE~~

This Continuing Disclosure Certificate (the “Disclosure Certificate”) is executed and delivered by the ONTARIO INTERNATIONAL AIRPORT AUTHORITY (the “Authority”) in connection with the issuance of its Ontario International Airport Revenue Bonds, Series 2016 (the “2016 Bonds”). The 2016 Bonds are being issued pursuant to a Master Trust Indenture to be dated as of November 1, 2016, as amended and supplemented, between the Authority and The Bank of New York Mellon Trust Company, N.A., as trustee (the “Indenture”). In connection therewith the Authority covenants and agrees as follows:

SECTION 1. Purpose of the Disclosure Certificate. The Disclosure Certificate is being executed and delivered by the Authority for the benefit of the Holders and Beneficial Owners of the 2016 Bonds and in order to assist the Underwriter in complying with Rule 15c2-12(b)(5) of the Securities and Exchange Commission (“SEC”).

SECTION 2. Definitions. In addition to the definitions set forth above and in the Indenture, which apply to any capitalized term used in the Disclosure Certificate unless otherwise defined in this section, the following capitalized terms have the following meanings:

~~“Annual Report” means any Annual Report provided by the Authority pursuant to, and as described in, Sections 3 and 4 of the Disclosure Certificate.~~

“Beneficial Owner” means any person who has the power, directly or indirectly, to vote or consent with respect to, or to dispose of ownership of, any 2016 Bonds (including persons holding 2016 Bonds through nominees, depositories, or other intermediaries).

~~“Dissemination Agent” shall mean any dissemination agent designated in writing by the Authority. Initially, The Bank of New York Mellon Trust Company, N.A. shall be the Dissemination Agent.~~

~~“EMMA System” means the MSRB’s Electronic Municipal Market Access system, or such other electronic system designated by the MSRB.~~

~~“Listed Event” means any of the events listed in Section 5(a) of the Disclosure Certificate.~~

~~“MSRB” means the Municipal Securities Rulemaking Board.~~

~~“Rule” means Rule 15c2-12(b)(5) adopted by the SEC under the Securities Exchange Act of 1934, as the same may be amended from time to time.~~

~~“State” means the State of California.~~

~~“Underwriter” means Morgan Stanley & Co. LLC, the initial underwriter of the 2016 Bonds.~~

~~SECTION 3. Provision of Annual Reports.~~

(a) The Authority shall, or shall cause the Dissemination Agent to, not later than the end of the ninth month following the end of the Authority’s Fiscal Year (presently June 30), commencing with the report for the 2016-17 Fiscal Year, provide to the MSRB through the EMMA System (in an electronic format and accompanied by identifying information all as prescribed by the MSRB) an Annual Report that is consistent with the requirements of Section 4 of the Disclosure Certificate. The Annual Report may be submitted as a single document or as separate documents composing a package and may cross-reference other information as provided in Section 4 of the Disclosure Certificate, except that the audited financial statements of the Authority may be submitted separately from the balance of the Annual Report and later than the date required above for the filing of the Annual Report if they are not available by that date. If the Authority’s Fiscal Year changes, then the Authority shall give notice of such change in the same manner as for a Listed Event under Section 5(c). If the Authority is not the Dissemination

~~F-1~~

~~Agent, the Authority shall provide the Annual Report to the Dissemination Agent not later than 15 business days prior to the date specified for providing the Annual Report to the MSRB.~~

(b) If the Authority is unable to provide to the MSRB an Annual Report by the date required in Section 3(a), the Authority shall send (or shall cause the Dissemination Agent to send) to the MSRB a notice in substantially the form attached hereto as Exhibit A.

(c) In addition to the foregoing requirements, if the Department of Airports of the City of Los Angeles, California provides audited financial statements for Ontario Airport for Fiscal Year 2015-16 and makes such audited financial statements available to the Authority, the Authority shall, or shall cause the Dissemination Agent to, provide such audited financial statements to the MSRB through the EMMA System to, not later than 30 days after receipt.

~~SECTION 4. Content of Annual Reports. The Authority’s Annual Report shall contain the CUSIP numbers of the 2016 Bonds and include by reference the following:~~

(a) The audited financial statements of the Authority for the prior Fiscal Year, prepared in accordance with generally accepted accounting principles as promulgated to apply to governmental entities from time to time by the Governmental Accounting Standards Board. If, however, the Authority’s audited financial statements are not available by the time the Annual Report is required to be filed pursuant to Section 3(a), then the Annual Report shall contain unaudited financial statements in a format similar to the financial statements contained in the final Official Statement, and the audited financial statements shall be filed in the same manner as the Annual Report when they become available.

(b) An annual report containing information of the type shown in the following tables contained in the Official Statement for the 2016 Bonds, dated ______, 2016, to reflect actual results of the most recently completed fiscal year (projections need not be updated):

~~(1) Table 5 – HISTORICAL ENPLANED PASSENGERS BY AIRLINE~~

~~(2) Table 6 - HISTORICAL LANDED WEIGHT BY AIRLINE~~

~~(3) Table 7 - HISTORICAL CARGO TRAFFIC DATA~~

~~(4) Table 8 - HISTORICAL OPERATING STATEMENTS~~

~~(5) Table 9 – TOP TEN REVENUE PRODUCERS~~

~~(6) Table 3-9 (from Report of the Airport Consultant) – Debt Service Coverage Ratio~~

~~(7) Table 3-10 (from Report of the Airport Consultant) – Required Fund Deposits~~

Any or all of the items listed above may be included by specific reference to other documents, including the audited financial statements or the official statements of debt issues of the Authority, that have been submitted to the MSRB or the Securities and Exchange Commission, subject to the following: if any document included by reference is a final official statement, then it must be available from the MSRB, and the Authority shall clearly identify each such other document so included by reference.

~~SECTION 5. Reporting of Significant Events.~~

(a) Pursuant to the provisions of this Section 5, the Authority shall give, or cause to be given, notice to the MSRB of the occurrence of any of the following events with respect to the 2016 Bonds in a timely manner not more than 10 business days after the event:

~~(1) Principal and interest payment delinquencies;~~

~~F-2~~

~~(2) Unscheduled draws on debt service reserves reflecting financial difficulties;~~

~~(3) Unscheduled draws on credit enhancements reflecting financial difficulties;~~

~~(4) Substitution of credit or liquidity providers, or their failure to perform;~~

~~(5) Issuance by the Internal Revenue Service (the “IRS”) of proposed or final determination of taxability or of a Notice of Proposed Issue (IRS Form 5701 TEB);~~

~~(6) Tender offers;~~

~~(7) Defeasances;~~

~~(8) Rating changes; or~~

~~(9) Bankruptcy, insolvency, receivership or similar event of the Authority.~~

Note: for the purposes of the event identified in Section 5(a)(9), the event is considered to occur when any of the following occur: the appointment of a receiver, fiscal agent or similar officer for the Authority 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 Authority, or if such jurisdiction has been assumed by leaving the existing governmental 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 Authority.

(b) Pursuant to the provisions of this Section 5, the Authority shall give, or cause to be given, notice to the MSRB of the occurrence of any of the following events with respect to the 2016 Bonds, if material:

(1) Unless described in Section 5(a)(5), adverse tax opinions or other material notices or determinations by the IRS with respect to the tax status of the 2016 Bonds or other material events affecting the tax status of the 2016 Bonds;

~~(2) Modifications to rights of holders of the 2016 Bonds;~~

~~(3) Optional, unscheduled or contingent bond calls;~~

~~(4) Release, substitution, or sale of property securing repayment of the 2016 Bonds;~~

~~(5) Non-payment related defaults;~~

(6) The consummation of a merger, consolidation, or acquisition involving an obligated person or the sale of all or substantially all of the assets of the obligated person, 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 any such actions, other than pursuant to its terms; or

~~(7) Appointment of a successor or additional trustee or the change of name of a trustee.~~

(c) Whenever the Authority obtains knowledge of the occurrence of a Listed Event described in Section 5(b), the Authority shall as soon as possible determine if such event would be material under applicable federal securities laws. If the Authority determines that knowledge of the occurrence of a Listed Event under Section 5(b) would be material under applicable federal securities laws, the Authority shall file a notice of such occurrence with EMMA in a timely manner not more than 10 business days after the event.

~~F-3~~

SECTION 6. Termination of Reporting Obligation. The Authority’s obligations under the Disclosure Certificate shall terminate (a) upon the legal defeasance, prior redemption, or payment in full of all of the 2016 Bonds; or (b) if, in the opinion of nationally recognized bond counsel, the Authority ceases to be an “obligated person” (within the meaning of the Rule) with respect to the 2016 Bonds, or the 2016 Bonds otherwise cease to be subject to the requirements of the Rule. If such termination occurs prior to the final maturity of the 2016 Bonds, the Authority shall give notice of such termination in the same manner as for a Listed Event under Section 5(c).

SECTION 7. Amendment; Waiver. Notwithstanding any other provision of the Disclosure Certificate, the Authority may amend the Disclosure Certificate (with the consent of the Dissemination Agent if its rights or duties are affected thereby), and any provision of the Disclosure Certificate may be waived, if all of the following conditions are satisfied:

(a) If the amendment or waiver relates to the provisions of Sections 3(a), 4, or 5(a), it may only be made in connection with a change in circumstances that arises from a change in legal requirements, change in law (or interpretation thereof), or change in the identity, nature, or status of an obligated person with respect to the 2016 Bonds, or the type of business conducted;

(b) The undertaking, as amended or taking into account such waiver, would, in the opinion of nationally recognized bond counsel, have complied with the requirements of the Rule at the time of the original issuance of the 2016 Bonds, after taking into account any amendments or interpretations of the Rule, as well as any change in circumstances; and

(c) The amendment or waiver either (1) is approved by the Holders of the 2016 Bonds in the same manner as provided in the Indenture for amendments to the Indenture with the consent of Holders or (2) does not, in the opinion of nationally recognized bond counsel, materially impair the interests of the Holders or Beneficial Owners of the 2016 Bonds.

In the event of any amendment or waiver of a provision of the Disclosure Certificate that results in a change to the information provided in any subsequent Annual Report, the Authority shall describe such amendment or waiver in the next Annual Report and shall include, as applicable, a narrative explanation of the reason for the amendment or waiver and its impact on the type (or in the case of a change of accounting principles, on the presentation) of financial information or operating data being presented by the Authority. In addition, if the amendment relates to the accounting principles to be followed in preparing financial statements, then the Authority shall give notice of such change in the same manner as for a Listed Event under Section 5(c), and the Annual Report for the year in which the change is made must present a comparison (in narrative form and also, if feasible, in quantitative form) between the financial statements as prepared on the basis of the new accounting principles and those prepared on the basis of the former accounting principles.

SECTION 8. Dissemination Agent. The Authority may, from time to time, discharge the then-current Dissemination Agent (with or without appointing a new Dissemination Agent). If at any time there is not a designated Dissemination Agent, the Authority shall be the Dissemination Agent. The Dissemination Agent shall have only such duties as are specifically set forth in this Disclosure Certificate, and the Authority agrees to indemnify and hold harmless the Dissemination Agent, its officers, directors, employees and agents, against any losses, expenses, costs, suits, claims, judgments, damages and liabilities which the Dissemination Agent may incur arising out of or in the exercise or performance of its powers end duties hereunder, including the costs and expenses (including attorneys’ fees and expenses) of defending against any claim of liability, but excluding liabilities due to the Dissemination Agent’s gross negligence or willful misconduct. The obligations of the Authority under this Section shall survive resignation or removal of the Dissemination Agent and payment of the Bonds. The Dissemination Agent shall have the same rights and protections hereunder as afforded to it as Trustee under Article IX of the Indenture. The Dissemination Agent shall not be liable hereunder except for its gross negligence or willful misconduct.

It is understood and agreed that any information that the Dissemination Agent may be instructed to file with the MSRB shall be prepared and provided to it by the Authority. The Dissemination Agent has undertaken no responsibility with respect to any reports, notices or disclosures provided to it under this Disclosure Certificate, and has no liability to any person, including any holder of Bonds, with respect to any such reports, notices or disclosures.

~~F-4~~

The fact that the Dissemination Agent or any affiliate thereof may have any fiduciary or banking relationship with the Authority shall not be construed to mean that the Dissemination Agent has actual knowledge of any event or condition except as may be provided by written notice from the Authority.

The Authority shall pay the Dissemination Agent its fees as set forth in a separate fee schedule, and reimburse the Dissemination Agent for its expenses incurred hereunder (including, without limitation, legal fees and expenses.

SECTION 9. Additional Information. Nothing in the Disclosure Certificate prevents the Authority (a) from disseminating any other information, using the means of dissemination set forth in the Disclosure Certificate or any other means of communication; or (b) from including any other information in any Annual Report or notice of occurrence of a Listed Event in addition to that required by the Disclosure Certificate. If the Authority chooses to include any information in any Annual Report or notice of occurrence of a Listed Event in addition to that specifically required by the Disclosure Certificate, the Authority shall 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.

SECTION 10. Default. In the event of a failure of the Authority to comply with any provision of the Disclosure Certificate, the Underwriter or any Holder or Beneficial Owner of the 2016 Bonds may take such actions as may be necessary and appropriate, including seeking mandate or specific performance by court order, to cause the Authority to comply with its obligations under the Disclosure Certificate. A default under the Disclosure Certificate shall not be deemed an Event of Default under the Indenture or result in any pecuniary liability of the Authority, and the sole remedy under the Disclosure Certificate in the event of any failure of the Authority or the Dissemination Agent to comply with the Disclosure Certificate shall be an action to compel performance hereunder.

~~F-5~~

SECTION 11. Beneficiaries. The Disclosure Certificate shall inure solely to the benefit of the Authority, the Underwriter, and the Holders and Beneficial Owners from time to time of the 2016 Bonds, and it creates no rights in any other person or entity.

~~SECTION 12. Governing Law This Disclosure Certificate shall be governed by the laws of the state of California.~~

~~ONTARIO INTERNATIONAL AIRPORT AUTHORITY~~

~~By: Kelly J. Fredericks Title: Chief Executive Officer~~

~~Dated: November 1, 2016~~

~~Accepted:~~

~~The Bank of New York Mellon Trust Company, N.A., as Dissemination Agent~~

~~______By: Authorized Representative Dated: November 1, 2016~~

~~F-6~~

~~EXHIBIT A~~

~~NOTICE OF FAILURE TO FILE ANNUAL REPORT~~

~~Name of Issuer: ONTARIO INTERNATIONAL AIRPORT AUTHORITY~~

~~Name of Issue: $______Ontario International Airport Revenue Bonds, Series 2016 (collectively, the “2016 Bonds”)~~

~~Date of Issuance: ______, 2016~~

NOTICE IS HEREBY GIVEN that the Authority has not provided an Annual Report with respect to the above- named Bonds as required by the Continuing Disclosure Certificate of the Authority dated November 1, 2016 (the “Continuing Disclosure Certificate”). The Authority anticipates that the Annual Report will be filed by ______.

~~Dated: ______, _____~~

~~ONTARIO INTERNATIONAL AIRPORT AUTHORITY~~

~~By: Authorized Representative~~

~~F-7 [THIS PAGE INTENTIONALLY LEFT BLANK]~~

~~APPENDIX G~~

~~SPECIMEN MUNICIPAL BOND INSURANCE POLICY~~

~~[THIS PAGE INTENTIONALLY LEFT BLANK] MUNICIPAL BOND INSURANCE POLICY~~

~~ISSUER: Policy No: -N~~

~~BONDS: $ in aggregate principal amount of Effective Date: Premium: $~~

ASSURED GUARANTY MUNICIPAL CORP. ("AGM"), for consideration received, hereby UNCONDITIONALLY AND IRREVOCABLY agrees to pay to the trustee (the "Trustee") or paying agent (the "Paying Agent") (as set forth in the documentation providing for the issuance of and securing the Bonds) for the Bonds, for the benefit of the Owners or, at the election of AGM, directly to each Owner, subject only to the terms of this Policy (which includes each endorsement hereto), that portion of the principal of and interest on the Bonds that shall become Due for Payment but shall be unpaid by reason of Nonpayment by the Issuer.

On the later of the day on which such principal and interest becomes Due for Payment or the Business Day next following the Business Day on which AGM shall have received Notice of Nonpayment, AGM will disburse to or for the benefit of each Owner of a Bond the face amount of principal of and interest on the Bond that is then Due for Payment but is then unpaid by reason of Nonpayment by the Issuer, but only upon receipt by AGM, in a form reasonably satisfactory to it, of (a) evidence of the Owner's right to receive payment of the principal or interest then Due for Payment and (b) evidence, including any appropriate instruments of assignment, that all of the Owner's rights with respect to payment of such principal or interest that is Due for Payment shall thereupon vest in AGM. A Notice of Nonpayment will be deemed received on a given Business Day if it is received prior to 1:00 p.m. (New York time) on such Business Day; otherwise, it will be deemed received on the next Business Day. If any Notice of Nonpayment received by AGM is incomplete, it shall be deemed not to have been received by AGM for purposes of the preceding sentence and AGM shall promptly so advise the Trustee, Paying Agent or Owner, as appropriate, who may submit an amended Notice of Nonpayment. Upon disbursement in respect of a Bond, AGM shall become the owner of the Bond, any appurtenant coupon to the Bond or right to receipt of payment of principal of or interest on the Bond and shall be fully subrogated to the rights of the Owner, including the Owner's right to receive payments under the Bond, to the extent of any payment by AGM hereunder. Payment by AGM to the Trustee or Paying Agent for the benefit of the Owners shall, to the extent thereof, discharge the obligation of AGM under this Policy.

Except to the extent expressly modified by an endorsement hereto, the following terms shall have the meanings specified for all purposes of this Policy. "Business Day" means any day other than (a) a Saturday or Sunday or (b) a day on which banking institutions in the State of New York or the Insurer's Fiscal Agent are authorized or required by law or executive order to remain closed. "Due for Payment" means (a) when referring to the principal of a Bond, payable on the stated maturity date thereof or the date on which the same shall have been duly called for mandatory sinking fund redemption and does not refer to any earlier date on which payment is due by reason of call for redemption (other than by mandatory sinking fund redemption), acceleration or other advancement of maturity unless AGM shall elect, in its sole discretion, to pay such principal due upon such acceleration together with any accrued interest to the date of acceleration and (b) when referring to interest on a Bond, payable on the stated date for payment of interest. "Nonpayment" means, in respect of a Bond, the failure of the Issuer to have provided sufficient funds to the Trustee or, if there is no Trustee, to the Paying Agent for payment in full of all principal and interest that is Due for Payment on such Bond. "Nonpayment" shall also include, in respect of a Bond, any payment of principal or interest that is Due for Payment made to an Owner by or on behalf of the Issuer which has been recovered from such Owner pursuant to the

~~G-1 Page 2 of 2 Policy No. -N~~

United States Bankruptcy Code by a trustee in bankruptcy in accordance with a final, nonappealable order of a court having competent jurisdiction. "Notice" means telephonic or telecopied notice, subsequently confirmed in a signed writing, or written notice by registered or certified mail, from an Owner, the Trustee or the Paying Agent to AGM which notice shall specify (a) the person or entity making the claim, (b) the Policy Number, (c) the claimed amount and (d) the date such claimed amount became Due for Payment. "Owner" means, in respect of a Bond, the person or entity who, at the time of Nonpayment, is entitled under the terms of such Bond to payment thereof, except that "Owner" shall not include the Issuer or any person or entity whose direct or indirect obligation constitutes the underlying security for the Bonds.

AGM may appoint a fiscal agent (the "Insurer's Fiscal Agent") for purposes of this Policy by giving written notice to the Trustee and the Paying Agent specifying the name and notice address of the Insurer's Fiscal Agent. From and after the date of receipt of such notice by the Trustee and the Paying Agent, (a) copies of all notices required to be delivered to AGM pursuant to this Policy shall be simultaneously delivered to the Insurer's Fiscal Agent and to AGM and shall not be deemed received until received by both and (b) all payments required to be made by AGM under this Policy may be made directly by AGM or by the Insurer's Fiscal Agent on behalf of AGM. The Insurer's Fiscal Agent is the agent of AGM only and the Insurer's Fiscal Agent shall in no event be liable to any Owner for any act of the Insurer's Fiscal Agent or any failure of AGM to deposit or cause to be deposited sufficient funds to make payments due under this Policy.

To the fullest extent permitted by applicable law, AGM agrees not to assert, and hereby waives, only for the benefit of each Owner, all rights (whether by counterclaim, setoff or otherwise) and defenses (including, without limitation, the defense of fraud), whether acquired by subrogation, assignment or otherwise, to the extent that such rights and defenses may be available to AGM to avoid payment of its obligations under this Policy in accordance with the express provisions of this Policy.

This Policy sets forth in full the undertaking of AGM, and shall not be modified, altered or affected by any other agreement or instrument, including any modification or amendment thereto. Except to the extent expressly modified by an endorsement hereto, (a) any premium paid in respect of this Policy is nonrefundable for any reason whatsoever, including payment, or provision being made for payment, of the Bonds prior to maturity and (b) this Policy may not be canceled or revoked. THIS POLICY IS NOT COVERED BY THE PROPERTY/CASUALTY INSURANCE SECURITY FUND SPECIFIED IN ARTICLE 76 OF THE NEW YORK INSURANCE LAW.

~~In witness whereof, ASSURED GUARANTY MUNICIPAL CORP. has caused this Policy to be executed on its behalf by its Authorized Officer.~~

~~ASSURED GUARANTY MUNICIPAL CORP.~~

~~By Authorized Officer~~

~~A subsidiary of Assured Guaranty Municipal Holdings Inc. 1633 Broadway, New York, N.Y. 10019 (212) 974-0100~~

~~Form 500NY (5/90)~~

~~G-2~~

~~ONTARIO INTERNATIONAL AIRPORT AUTHORITY • ONTARIO INTERNATIONAL AIRPORT REVENUE BONDS, SERIES 2016 (TAXABLE)~~