NEW ISSUE BOOK-ENTRY ONLY RATINGS: S&P: A

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1 NEW ISSUE BOOK-ENTRY ONLY RATINGS: S&P: A See Ratings herein. In the opinion of O Melveny & Myers LLP, Bond Counsel, assuming the accuracy of certain representations and compliance by the Regional Airports Improvement Corporation and LAXFUEL Corporation with certain covenants described herein, interest on the 2012 Bonds is excludable from gross income for federal income tax purposes under existing statutes, regulations, rulings and court decisions except with respect to any 2012 Bond for any period of time during which such 2012 Bond is held by a substantial user of the Facilities, within the meaning of Section 147(a) (1) of the Internal Revenue Code of 1986, as amended (the Code ), or by a related person of any such substantial user, as defined in Section 147(a)(2) of the Code. However, interest on the 2012 Bonds will be treated as an item of tax preference in calculating the federal alternative minimum tax imposed on individuals and corporations. Interest on the 2012 Bonds is not exempt from State of California income tax under present state law. See TAX MATTERS herein. Dated: Date of Delivery $64,095,000 REGIONAL AIRPORTS IMPROVEMENT CORPORATION Facilities Lease Refunding Revenue Bonds, Issue of 2012 LAXFUEL Corporation (Los Angeles International Airport) Due: As shown on the inside cover The 2012 Bonds are being issued by the Regional Airports Improvement Corporation (the Corporation ) to refund the outstanding principal amount of its Facilities Lease Refunding Revenue Bonds, Issue of 2001, LAXFUEL Corporation (Los Angeles International Airport). Payments of Facility Rent under the Facilities Lease are to be made by LAXFUEL Corporation directly to U.S. Bank National Association, successor trustee (the Trustee ), in an amount sufficient to pay when due the principal of and interest and premium, if any, on the 2012 Bonds and all other bonds outstanding under the Indenture (as defined herein). LAXFUEL Corporation is a California nonprofit mutual benefit corporation, and its members are the principal air carriers operating at Los Angeles International Airport. LAXFUEL Corporation operates jet fuel receipt, storage and distribution facilities at Los Angeles International Airport. Approximately 99% of all jet fuel delivered at the Airport passes through LAXFUEL Corporation s facilities. Payments of principal of and interest and premium, if any, on the 2012 Bonds will be unconditionally guaranteed by The 2012 Bonds are limited obligations of the Corporation and will be payable as to principal thereof and interest and premium, if any, thereon, solely from amounts pledged therefor and received by the Trustee as described herein. The 2012 Bonds will not constitute an indebtedness or pledge of the faith and credit or the taxing power of the City of Los Angeles, California (the City ), the City s Department of Airports or the State of California (the State ) or any political subdivision of the State. The 2012 Bonds will not constitute an indebtedness of the Corporation except to the extent described herein. None of the State, the City, the City s Department of Airports nor any political subdivision of the State will be obligated to pay the principal of, premium, if any, or interest on the 2012 Bonds. The 2012 Bonds will be payable on a parity with the other Bonds outstanding under the Indenture, including the 2005 Bonds (defined herein), of which $19,135,000 aggregate principal amount is currently outstanding, and any Additional Bonds (defined herein) hereinafter issued under the Indenture. Interest on the 2012 Bonds will be payable on January 1, 2013, and semiannually thereafter on each July 1 and January 1. The 2012 Bonds will be issued as fully registered bonds and will be registered in the name of Cede & Co., as nominee of The Depository Trust Company, New York, New York ( DTC ). DTC will act as securities depository for the 2012 Bonds. Purchases will be made only in book-entry form through DTC participants in the denomination of $5,000 or any integral multiple thereof and no physical delivery of 2012 Bonds will be made to purchasers. Payments of principal, interest and premium, if any, will be made to purchasers by DTC through its participants. The 2012 Bonds will be subject to optional redemption, mandatory sinking fund redemption and extraordinary mandatory redemption prior to maturity as more fully described herein. The 2012 Bonds are payable on a parity with other bonds issued under the Indenture, as described herein. The 2012 Bonds are offered when, as and if issued by the Corporation and accepted by the Underwriters, subject to prior withdrawal or modification of the offer without notice, the approval of legality by O Melveny & Myers LLP, Bond Counsel, and certain other conditions. Certain legal matters will be passed upon for the Corporation by O Melveny & Myers LLP, for LAXFUEL Corporation by Sherman & Howard LLC, Denver, Colorado and SSL Law Firm LLP, San Francisco, California, and for the Underwriters by Nixon Peabody LLP, Los Angeles, California. It is expected that delivery of the 2012 Bonds will occur through the facilities of DTC, on or about October 11, Morgan Stanley Dated: September 25, BofA Merrill Lynch

2 Maturity Schedule $64,095, Bonds $25,605,000 Serial Bonds Maturity (January 1) Principal Amount Interest Rate Yield Price CUSIP No $3,035, % 0.64% HY ,055, HZ ,155, JA ,255, JB ,370, JC ,480, JD ,615, JE ,745, JF ,875, JG ,020, JH4 $17,380, % Term Bonds due January 1, 2027, Yield 3.66%, Price c, CUSIP No JJ0 $21,110, % Term Bonds due January 1, 2032, Yield 3.75%, Price c, CUSIP No JK7 c Priced to par call on January 1, CUSIP is a registered trademark of the American Bankers Association. CUSIP data herein is provided by CUSIP Global Services, managed by Standard and Poor s Financial Services LLC on behalf of the American Bankers Association. CUSIP numbers are provided for convenience of reference only. None of the Corporation, LAXFUEL, or the Underwriters takes any responsibility for the accuracy of such CUSIP numbers.

3 The information contained in this Official Statement (which term shall be deemed to include the Appendices to this Official Statement and all documents incorporated herein by reference) has been obtained from the Corporation, LAXFUEL Corporation ( LAXFUEL ), and other sources deemed reliable. The information concerning DTC has been obtained from DTC. The Corporation has provided the information under the captions THE CORPORATION and LITIGATION The Corporation. The Corporation neither has nor assumes any responsibility as to the accuracy or completeness of any other information in this Official Statement, all of which has been provided by others. This Official Statement is submitted in connection with the sale of the securities described in it and may not be reproduced or used, in whole or in part, for any other purposes. The information contained in this Official Statement is subject to change without notice and neither the delivery of this Official Statement nor any sale made by means of it shall, under any circumstances, create any implication that there have not been changes in the affairs of the Corporation or LAXFUEL since the date of this Official Statement. No broker, dealer, sales representative, or any other person has been authorized to give any information or to make any representation other than as contained in this Official Statement in connection with the offering described in it and, if given or made, such other information or representation must not be relied upon as having been authorized by any of the foregoing. This Official Statement does not constitute an offer to sell or the solicitation of an offer to buy any securities other than those described on the cover page, nor shall there by any offer to sell, solicitation of an offer to buy or sale of such securities by any person in any jurisdiction in which it is unlawful for such person to make such offer, solicitation or sale. The Underwriters have reviewed the information in this Official Statement in accordance with, and as part of their respective responsibilities to investors under the securities laws as applied to the facts and circumstances of this transaction, but the Underwriters do not guarantee the accuracy or completeness of such information. IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVERALLOT OR EFFECT TRANSACTIONS THAT STABILIZE THE MARKET PRICES OF THE 2012 BONDS AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME. CERTAIN STATEMENTS CONTAINED IN THIS OFFICIAL STATEMENT DO NOT REFLECT HISTORICAL FACTS BUT ARE FORECASTS, PROJECTIONS, ESTIMATES OR OTHER FORWARD- LOOKING STATEMENTS. THE WORDS ESTIMATE, PROJECT, ANTICIPATE, EXPECT, INTEND, BELIEVE, FORECAST, ASSUME AND SIMILAR EXPRESSIONS ARE INTENDED TO IDENTIFY FORWARD-LOOKING STATEMENTS. SUCH FORECASTS, PROJECTIONS, ESTIMATES AND OTHER FORWARD-LOOKING STATEMENTS ARE NOT INTENDED AS REPRESENTATIONS OF FACT OR GUARANTEES OF RESULTS. ANY SUCH FORWARD-LOOKING STATEMENTS ARE SUBJECT TO A VARIETY OF RISKS AND UNCERTAINTIES THAT COULD CAUSE ACTUAL RESULTS OR PERFORMANCE TO DIFFER MATERIALLY FROM THOSE THAT HAVE BEEN FORECASTED, ESTIMATED OR PROJECTED. THESE FORWARD-LOOKING STATEMENTS SPEAK ONLY AS OF THE DATE OF THIS OFFICIAL STATEMENT. THE DELIVERY OF THIS OFFICIAL STATEMENT DOES NOT IMPOSE UPON THE CORPORATION OR LAXFUEL ANY OBLIGATION OR UNDERTAKING TO RELEASE PUBLICLY ANY UPDATES OR REVISIONS TO ANY FORWARD-LOOKING STATEMENT CONTAINED HEREIN TO REFLECT ANY CHANGES IN LAXFUEL S EXPECTATIONS WITH REGARD THERETO OR ANY CHANGE IN EVENTS, CONDITIONS OR CIRCUMSTANCES ON WHICH ANY SUCH STATEMENT IS BASED. THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS OFFICIAL STATEMENT. ANY REPRESENTATIONS TO THE CONTRARY IS A CRIMINAL OFFENSE.

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5 Table of Contents INTRODUCTION... 1 AUTHORIZATION... 3 THE CORPORATION... 3 DESCRIPTION OF THE 2012 BONDS... 4 General Terms... 4 Redemption Provisions... 5 SECURITY FOR THE BONDS... 7 Limited Obligations... 7 Primary Source of Payment... 8 The Trust Estate... 8 Additional Bonds DEBT SERVICE REQUIREMENTS PLAN OF REFINANCING SOURCES AND USES OF FUNDS LAXFUEL CORPORATION General Corporate Governance The Interline Agreement Contracting Airlines The Operating Agreement The Operator Insurance Financial Matters RISK FACTORS Risks Related to the Aviation Industry Costs of Aviation Fuel Risks Associated with a LAXFUEL Bankruptcy Risks Associated with a Bankruptcy of the Corporation Risks Associated with a Contracting Airline s Bankruptcy Seismic and Other Risks Limited Obligations Limitations Upon Trustee s Ability to Realize Benefits of Bondholders Security Involving the Site Possible Loss of Tax-Exempt Status of Interest on 2012 Bonds THE FACILITIES Background The Facilities The Ground Lease THE AIRPORT Enplanements and Market Share Revenue Landed Weight by Airline Cargo Traffic Page i

6 Table of Contents (continued) AVAILABLE INFORMATION FOR CONTRACTING AIRLINES LITIGATION The Corporation LAXFUEL UNDERWRITING CONTINUING DISCLOSURE TAX MATTERS RATINGS OTHER LEGAL MATTERS VERIFICATION AGENT FINANCIAL STATEMENTS CERTAIN RELATIONSHIPS MISCELLANEOUS Page Appendix A AUDITED FINANCIAL STATEMENTS OF LAXFUEL FOR 2011 AND 2010 Appendix B SUMMARY OF CERTAIN PROVISIONS OF THE GROUND LEASE AND THE DEED OF RIGHTS Appendix C SELECTED DEFINITIONS Appendix D SUMMARY OF CERTAIN PROVISIONS OF THE INDENTURE Appendix E SUMMARY OF CERTAIN PROVISIONS OF THE FACILITIES LEASE Appendix F SUMMARY OF CERTAIN PROVISIONS OF THE INTERLINE AGREEMENT Appendix G SUMMARY OF CERTAIN PROVISIONS OF THE GUARANTY Appendix H FORM OF OPINION OF BOND COUNSEL Appendix I FORM OF CONTINUING DISCLOSURE UNDERTAKING Appendix J INFORMATION REGARDING DTC AND THE BOOK-ENTRY SYSTEM ii

7 Official Statement Relating to $64,095,000 Regional Airports Improvement Corporation Facilities Lease Refunding Revenue Bonds, Issue of 2012 LAXFUEL Corporation (Los Angeles International Airport) INTRODUCTION The purpose of this Official Statement, which includes the cover page and the Appendices hereto, is to furnish information in connection with the sale by the Regional Airports Improvement Corporation (the Corporation ) of $64,095,000 aggregate principal amount of its Facilities Lease Refunding Revenue Bonds, Issue of 2012, LAXFUEL Corporation (Los Angeles International Airport) (the 2012 Bonds ). Certain definitions are provided in APPENDIX C SELECTED DEFINITIONS and APPENDIX F SUMMARY OF CERTAIN PROVISIONS OF THE INTERLINE AGREEMENT. To the extent that capitalized terms used in this Official Statement are not otherwise defined herein (including in APPENDIX C and APPENDIX F), such terms shall have the meanings established in the Indenture (as hereinafter defined). The 2012 Bonds are issued under an Indenture of Mortgage and Deed of Trust between the Corporation and U.S. Bank National Association, successor trustee to State Street Bank and Trust Company of California, N.A. (the Trustee ), dated as of December 1, 1991 (the Original Indenture ), as amended and supplemented by the Supplemental Indenture of Mortgage and Deed of Trust, dated as of May 1, 1994 (the First Supplemental Indenture ), by the Second Supplemental Indenture, dated as of November 15, 2001 (the Second Supplemental Indenture ), by the Third Supplemental Indenture, dated as of November 1, 2005 (the Third Supplemental Indenture ), and by the Fourth Supplemental Indenture, dated as of October 1, 2012 (the Fourth Supplemental Indenture ). The Original Indenture, as amended and supplemented by the First Supplemental Indenture, the Second Supplemental Indenture, the Third Supplemental Indenture and the Fourth Supplemental Indenture, is referred to herein as the Indenture. The 2012 Bonds are limited obligations of the Corporation payable on a parity with the Corporation s Facilities Lease Refunding Revenue Bonds, Issue of 2005 LAXFUEL Corporation (Los Angeles International Airport) (the 2005 Bonds ) and any Additional Bonds hereafter issued under the Indenture (collectively, the Bonds ) solely from the Trust Estate pledged therefor. See SECURITY FOR THE BONDS. The Trust Estate includes Facility Rent (as hereinafter defined) payable by LAXFUEL Corporation ( LAXFUEL ) under the Facilities Lease (as hereinafter defined) in an amount sufficient to pay the principal of, and interest and premium, if any, on, the Bonds when due. The Bonds, including the 2012 Bonds, do not constitute an indebtedness or pledge of the faith and credit or the taxing power of the City of Los Angeles, California (the City ), the City s Department of Airports, the State of California (the State ) or any political subdivision of the State, and neither the City, the City s Department of Airports, the State nor any political subdivision of the State will be obligated to pay the principal of, or interest or premium, if any, on the Bonds or other costs incident thereto. The proceeds of the 2012 Bonds will be used, among other things, to pay redemption price and accrued interest on all of the Corporation s Facilities Lease Refunding Revenue Bonds, Issue of 2001, LAXFUEL Corporation (Los Angeles International Airport) (the 2001 Bonds ), which are currently outstanding in an aggregate principal amount of $69,090,000 approximately 30 days after the date of

8 issuance of the 2012 Bonds. See PLAN OF REFINANCING. After giving effect to the refunding, there will be $83,230,000 aggregate principal amount of Bonds outstanding under the Indenture consisting of $64,095,000 aggregate principal amount of the 2012 Bonds and $19,135,000 aggregate principal amount of the 2005 Bonds. LAXFUEL is a California nonprofit mutual benefit corporation whose members currently comprise over 60 air carriers (the Contracting Airlines ) serving the Los Angeles International Airport (the Airport ). See LAXFUEL CORPORATION and AVAILABLE INFORMATION FOR CONTRACTING AIRLINES. For discussion regarding the Contracting Airlines that have filed for bankruptcy, see LAXFUEL CORPORATION The Interline Agreement Default and RISK FACTORS Risks Associated with a Contracting Airline s Bankruptcy. LAXFUEL leases and operates, or its facilities are the sole source of jet fuel for, substantially all of the jet fuel receipt, storage and distribution facilities (the Facilities ) servicing the Airport pursuant to the Facilities Lease, other than certain hydrant systems serving the passenger terminals and certain cargo facilities which hydrant systems are connected to, and obtain jet fuel solely from, the LAXFUEL facilities. Approximately 99% of all aviation jet fuel currently used at the Airport passes through the Facilities. The Airport is owned and operated by the City through the City s Department of Airports. Pursuant to an Amended and Restated Lease and Non-Exclusive Right-of-Way License Agreement between the City of Los Angeles and LAXFUEL Corporation Covering Premises at Los Angeles International Airport, dated as of November 4, 1991, as amended by the Second Amendment to Lease and Non-Exclusive Right-of-Way License Agreement (the Ground Lease ), the City has leased to LAXFUEL the Facilities and certain premises at the Airport (the Demised Premises ) and has licensed to LAXFUEL certain non-exclusive rights-of-way in property at the Airport (the Right-of-Way ). The Demised Premises and the Right-of-Way are collectively referred to herein as the Site. See APPENDIX B SUMMARY OF CERTAIN PROVISIONS OF THE GROUND LEASE AND THE DEED OF RIGHTS. The ground rentals and any other amounts payable by LAXFUEL to the City under the Ground Lease, or any other lease, permit or other agreement between the City and LAXFUEL are not available for, or pledged as security for payment of, the Bonds. In addition, the Facilities and the City s interest therein will not be pledged as security for purposes of the 2012 Bonds. Under a Deed of Rights Pursuant to Lease and Right-of-Way Agreement, dated as of December 1, 1991 (the Deed of Rights ), LAXFUEL granted and assigned its interest in the Site to the Corporation, reserving certain rights for purposes of constructing, installing and maintaining facilities on the Site which do not materially interfere with the Facilities and their operations. LAXFUEL entered into a Facilities Lease, dated as of December 1, 1991 (the Facilities Lease ) with the Corporation pursuant to which LAXFUEL, as sublessee, was given the right to occupy and use the portion of the Site conveyed to the Corporation under the Deed of Rights and agreed to pay rentals in amounts that will be sufficient to pay the principal of and interest and premium, if any, on the Bonds when due. LAXFUEL s obligation to make payments of Facility Rent at the times and in the amounts specified in the Facilities Lease is absolute and unconditional. See SECURITY FOR THE BONDS Primary Source of Payment. Pursuant to the Indenture, the Corporation assigned to the Trustee, as security for the Bonds, all of its rights, powers and privileges in the Site and its right to receive Facility Rent under the Facilities Lease. See SECURITY FOR THE BONDS Primary Source of Payment and The Trust Estate. Pursuant to a Payment Agreement, dated as of December 1, 1991 (the Guaranty ), LAXFUEL unconditionally guaranteed to the Trustee, for the benefit of the Owners of the Bonds, the payment of the principal of and interest and premium, if any, on the Bonds. Pursuant to a Security Agreement, dated as of December 1, 1991 (as amended, the Security Agreement ), LAXFUEL granted to the Trustee, as 2

9 security for the Bonds, a first priority security interest in the Interline Agreement (as hereinafter defined) to secure its obligations under the Guaranty. LAXFUEL and the Contracting Airlines are parties to the Second Amended and Restated Interline Agreement, dated as of December 1, 1985 (such agreement as amended by the First Amendment effective March 5, 1997, and as otherwise amended from time to time, the Interline Agreement ). The Interline Agreement provides for, among other things, the sharing of expenses (both capital and operating) among the Contracting Airlines, the corporate governance of LAXFUEL and the appointment of an operator of the Facilities. In the event of a failure of any Contracting Airline to pay its share of expenses, each non-defaulting Contracting Airline is obligated to pay its allocable share of such amounts. See LAXFUEL CORPORATION Corporate Governance, The Interline Agreement and The Operating Agreement and APPENDIX F SUMMARY OF CERTAIN PROVISIONS OF THE INTERLINE AGREEMENT. Brief descriptions of the Corporation, the 2012 Bonds, the security for the Bonds, the Facilities, LAXFUEL and the Airport are included in this Official Statement. Appendix A to this Official Statement contains the audited financial statements of LAXFUEL for 2011 and Appendix B contains a summary of certain provisions of the Ground Lease and the Deed of Rights. Appendix C contains the definitions of certain terms used in this Official Statement. Appendix D contains a summary of certain provisions of the Indenture. Appendix E contains a summary of certain provisions of the Facilities Lease. Appendix F contains a summary of certain provisions of the Interline Agreement. Appendix G contains a summary of certain provisions of the Guaranty. Appendix H sets forth the form of opinion of Bond Counsel. Appendix I sets forth the form of Continuing Disclosure Undertaking. Appendix J contains information regarding DTC and the book-entry only system. The descriptions herein of the Indenture, the Ground Lease, the Facilities Lease, the Guaranty, the Deed of Rights, the Security Agreement, the Interline Agreement, the Operating Agreement and the Continuing Disclosure Undertaking (as defined under CONTINUING DISCLOSURE ) are qualified in their entirety by reference to such documents, and the descriptions herein of the 2012 Bonds are qualified in their entirety by reference to the form thereof and the information with respect thereto included in the aforesaid documents. Copies of such documents may be obtained during the initial offering period from the principal office of the Underwriters and, after the initial delivery of the 2012 Bonds, at the principal corporate trust office of the Trustee in Los Angeles, California. The Corporation neither has nor assumes any responsibility as to the accuracy or completeness of the information in this Official Statement (other than that under the captions THE CORPORATION and LITIGATION The Corporation ), all of which has been provided by others. AUTHORIZATION The 2012 Bonds are being issued under and pursuant to the Indenture and a resolution duly adopted by the Corporation on August 30, THE CORPORATION The Corporation, which is not authorized to issue capital stock, was organized on June 17, 1969 as a nonprofit public benefit corporation under the laws of the State for the purpose of assisting the City by financing and otherwise acquiring, constructing, reconstructing, replacing, extending, enlarging or improving airports, heliports and the facilities thereof. The Corporation has no members, and all corporate powers are exercised by or under the direction of the Corporation s Board of Directors (the Board ). The Board consists of five directors (the Directors ) from time to time in office, who also act as the Corporation s officers. The Directors are elected at each annual meeting of the Board. The 3

10 Department of Airports of the City has, but has never exercised, the right to disapprove the election, reelection or appointment of any Director. The Corporation s articles of incorporation provide that the Corporation is not organized for profit and that no part of the net earnings, if any, of the Corporation, will inure to the benefit of any private shareholder or individual. Upon the dissolution of the Corporation, any assets remaining after provision for its debts and liabilities are to be distributed to the City. The Corporation has no paid employees, and its sole business is to assist the City in financing its airports and heliports. The Corporation has participated in approximately 34 projects at the Airport and has issued airport facilities lease revenue bonds in an aggregate principal amount of approximately $1,346,762,000 (not including the 2012 Bonds). The Corporation may finance additional airport projects in the future. Each project and the financing or refinancing thereof requires the approval of the City s Department of Airports, which approval is subject to the assertion of jurisdiction by the City Council of the City. The financing or refinancing of each project is separately secured, as appropriate. The funds, accounts and security pledged to the payment of financings for projects other than the Facilities are not and will not be available to pay the Bonds, and the funds, accounts and security pledged to the payment of the Bonds are not and will not be available to pay financings for projects other than the Facilities. General Terms DESCRIPTION OF THE 2012 BONDS The 2012 Bonds will be dated their date of delivery, will be issued in the aggregate principal amount of $64,095,000, will bear interest from their date of delivery at the rates set forth on the inside cover page hereof, payable on January 1, 2013 and semiannually thereafter on July 1 and January 1 of each year, and will mature on January 1 of the years and in the principal amounts set forth on the inside cover page hereof. Interest on the 2012 Bonds will be calculated on the basis of a 360-day year comprised of twelve 30-day months. The 2012 Bonds will initially be executed and delivered as one fully registered bond for each maturity, in the name of Cede & Co. as nominee for The Depository Trust Company, New York, New York ( DTC ), as registered Owner of all the 2012 Bonds. DTC will act as securities depository for the 2012 Bonds. Individual purchases may be made in book-entry form only. Purchasers will not receive certificates representing their interests in 2012 Bonds purchased. So long as Cede & Co. is the registered owner of the 2012 Bonds, as nominee of DTC, references herein to the Bondholders or registered owners shall mean Cede & Co. and shall not mean the Beneficial Owners of the 2012 Bonds. So long as Cede & Co. is the registered owner of the 2012 Bonds, principal of and interest and premium, if any, on the 2012 Bonds are payable by wire transfer by the Trustee to Cede & Co., which is required, in turn, to remit such amounts to DTC s participants for subsequent disbursement to the Beneficial Owners. In addition, so long as Cede & Co. is the registered owner of the 2012 Bonds, it shall be considered the Bondholder and registered owner of the 2012 Bonds for purposes of receiving notices and for all other purposes under the Indenture. See APPENDIX J INFORMATION REGARDING DTC AND THE BOOK-ENTRY SYSTEM. Certificates representing replacement 2012 Bonds may be issued directly to Beneficial Owners of such 2012 Bonds, but only in the event that (i) DTC determines to discontinue providing its service with respect to the 2012 Bonds or (ii) at the direction of LAXFUEL, the Corporation determines that DTC shall no longer so act and delivers a written certificate to the Trustee to that effect, and, in either case, LAXFUEL fails to identify a successor securities depository in accordance with the Indenture. Beneficial Owners have no right to a book-entry system or a depository for the 2012 Bonds. 4

11 Redemption Provisions Optional Redemption The 2012 Bonds maturing on or after January 1, 2023 are subject to redemption at the option of the Corporation upon the written request of LAXFUEL, as a whole or in part, on January 1, 2022 or on any date thereafter, at redemption prices equal to 100% of the principal amount of such 2012 Bonds to be redeemed, plus accrued interest, if any, to the applicable redemption dates. Mandatory Sinking Fund Redemption The 2012 Bonds maturing on January 1, 2027 are subject to mandatory redemption on January 1 of each of the following years in the respective principal amounts set forth opposite such years at a redemption price equal to the principal amount of such 2012 Bonds to be redeemed, plus accrued interest, if any, to the Sinking Fund Payment Date: Sinking Fund Payment Date (January 1) Principal Amount *Maturity 2023 $3,180, ,320, ,465, ,630, * 3,785,000 The 2012 Bonds maturing on January 1, 2032 are subject to mandatory redemption on January 1 of each of the following years in the respective principal amounts set forth opposite such years at a redemption price equal to the principal amount of such 2012 Bonds to be redeemed, plus accrued interest, if any, to the Sinking Fund Payment Date: Sinking Fund Payment Date (January 1) Principal Amount *Maturity 2028 $3,955, ,155, ,365, ,585, * 4,050,000 At any time before the giving of notice of redemption for any Sinking Fund Payment Date for the 2012 Bonds of any maturity, the Corporation or LAXFUEL may deliver to the Trustee for cancellation the 2012 Bonds of that maturity in any aggregate principal amount in authorized denominations desired. Each 2012 Bond of that maturity so delivered shall be credited by the Trustee at the principal amount thereof against the obligation of the Corporation on such Sinking Fund Payment Date, and any excess shall be credited against future sinking fund payment obligations in such order as the Corporation or LAXFUEL may direct, and the principal amount of the 2012 Bonds to be so redeemed on future mandatory sinking fund payment dates shall be reduced accordingly. The Corporation or LAXFUEL may also credit against future sinking fund payment obligations for the 2012 Bonds, the principal amount of 5

12 any 2012 Bonds redeemed pursuant to the optional redemption provisions of the Indenture which have not been previously so applied. Extraordinary Mandatory Redemption The Bonds, including the 2012 Bonds, are subject to extraordinary mandatory redemption at a redemption price equal to the principal amount of the Bonds to be redeemed, plus accrued interest, if any, to the date of redemption, without premium, upon the occurrence of any of the following events: (i) At any time, as a whole or in part, in the event of loss of or damage to or condemnation or sale under threat of condemnation of the Site or the Facilities, from such funds as may be available and deposited in the Redemption Account in accordance with the Indenture. See APPENDIX D SUMMARY OF CERTAIN PROVISIONS OF THE INDENTURE Insurance and Condemnation Awards. (ii) With respect to any Bonds that are initially issued as tax-exempt Bonds, as a whole, not later than 120 days after interest on such Bonds shall be finally determined, upon the basis of a ruling of the Internal Revenue Service or a determination by a court of competent jurisdiction, not to be excluded from gross income for federal income tax purposes in the income of all recipients thereof. (iii) As a whole on the earliest date for which notice of redemption can be given after termination or cancellation of the Ground Lease. See APPENDIX B SUMMARY OF CERTAIN PROVISIONS OF THE GROUND LEASE AND THE DEED OF RIGHTS. (iv) As a whole on the earliest date for which notice of redemption can be given following the receipt by the Trustee of notice from LAXFUEL that the Interline Agreement is to be terminated. See LAXFUEL CORPORATION The Interline Agreement Withdrawal. In addition, the 2012 Bonds are subject to extraordinary mandatory redemption as a whole as soon as practicable and in any event within 90 days following upon the City s exercise of the City s buyback right in accordance with the Ground Lease at a redemption price equal to the principal amount of the 2012 Bonds, plus accrued interest, if any, to (but excluding) the date of redemption, without premium. See description of buyback right in APPENDIX B SUMMARY OF CERTAIN PROVISIONS OF GROUND LEASE AND THE DEED OF RIGHTS. Method of Redemption If less than all of the 2012 Bonds are to be redeemed, the maturities of the 2012 Bonds to be redeemed are to be selected by the Corporation at the written direction of LAXFUEL. If less than all of the 2012 Bonds of a maturity are to be redeemed prior to maturity, the specific 2012 Bonds to be called and redeemed are to be selected by the Trustee by lot or in such manner as the Trustee in its discretion may determine. Notice of Redemption Notice of redemption of 2012 Bonds shall be given by the Trustee as soon as practicable following (i) receipt by the Trustee of the net proceeds of insurance or a condemnation award in respect of the Site or the Facilities as contemplated by the Indenture or (ii) as soon as practicable following receipt by the Trustee of notice that one of the other events giving rise to an extraordinary mandatory 6

13 redemption of Bonds has occurred. See Extraordinary Mandatory Redemption above for list of events. Notice of redemption of any 2012 Bonds, either in whole or in part, is to be mailed by first class mail, postage prepaid not less than 30 days nor more than 60 days prior to the redemption date to all Owners of the 2012 Bonds to be redeemed at their addresses as they appear on the registration books of the Trustee as of the close of business on the day before such notice is given. Such notice shall also be given on or before the date such notice is mailed to the Owners of the 2012 Bonds, by first class mail, postage prepaid, confirmed facsimile transmission, overnight delivery service or electronic mail to DTC or its successor. Each such notice is to set forth (i) the redemption date, (ii) the place or places where 2012 Bonds will be redeemed, including the name and address of any redemption agent, (iii) the premium, if any, that will be paid on the redemption date, (iv) the CUSIP numbers assigned to the 2012 Bonds to be redeemed, (v) the interest rates, serial numbers and maturity date or dates of the 2012 Bonds selected for redemption, except that where all 2012 Bonds are to be redeemed, the serial numbers and maturities thereof need not be specified, and where all 2012 Bonds of one maturity are to be redeemed, the serial numbers of such maturity need not be specified, and (vi) the date of mailing of the notice to Owners. Such redemption notices will further state that on the specified redemption date there shall become due and payable each 2012 Bond or portion thereof being redeemed (including interest thereon to the date of redemption) and that from and after such date interest thereon shall cease to accrue and be payable. In case any 2012 Bond is to be redeemed in part only, the notice of redemption which relates to such 2012 Bond is to state the portion of the principal amount thereof to be redeemed and that on or after the redemption date, upon surrender of such 2012 Bond, a new 2012 Bond or 2012 Bonds of the same maturity and in principal amount equal to the unredeemed portion of such 2012 Bond will be issued. The Trustee shall not take any action with respect to redemption notices at the election of the Corporation (except in the case of a refunding of the 2012 Bonds) unless moneys shall be on deposit with the Trustee sufficient to pay the principal of and premium, if any, and accrued interest on the 2012 Bonds to be so redeemed on the respective redemption date. Neither failure to receive any redemption notice nor any defect in redemption notice so given shall affect the sufficiency of the proceedings for the redemption of such 2012 Bonds. Limited Obligations SECURITY FOR THE BONDS The Bonds, including the 2012 Bonds, will be limited obligations of the Corporation and will be payable as to principal thereof and interest and premium, if any, thereon solely from amounts pledged therefor and received by the Trustee. The Bonds will not constitute an indebtedness or pledge of the faith and credit or the taxing power of the City, the City s Department of Airports, the State or any political subdivision of the State. The Bonds will not constitute an indebtedness of the Corporation except to the extent described herein. None of the City, the City s Department of Airports, the State nor any political subdivision of the State will be obligated to pay the principal of, or interest or premium, if any, on, the Bonds or other costs incident thereto. The Corporation will be obligated to make such payments only from the Revenues and the Trust Estate pledged therefor under the Indenture. The ground rentals and any other amounts payable by LAXFUEL to the City under the Ground Lease, or any other lease, permit or other agreement between the City and LAXFUEL are not available, or pledged as security for payment of the Bonds. In addition, the Facilities and the City s interest therein will not be pledged as security for purposes of the 2012 Bonds. 7

14 Primary Source of Payment The primary source for the payment of principal of, and interest and premium, if any, on, the Bonds will be the payment by LAXFUEL of Facility Rent under the Facilities Lease. Under the Facilities Lease, LAXFUEL is obligated to pay to the Trustee rental payments in an amount equal to (i) the principal of and interest and premium, if any, on the Bonds, including the 2012 Bonds, to the extent moneys in the Bond Fund (other than the Reserve Account) are not available therefor and (ii) the deposit requirements (including any valuation deficiencies) of the Reserve Account (collectively, the Facility Rent ). LAXFUEL is also required to pay rent (the Additional Rent ) at times and in amounts sufficient to pay LAXFUEL s allocated share of expenses of the Corporation, including any taxes levied against the Corporation (but excluding taxes unrelated to the Facilities and federal income taxes), fees of accountants, attorneys and the Trustee, insurance premiums, and all other expenses of the Corporation required to maintain its corporate existence and to comply with the provisions of the Indenture. All payments of Facility Rent attributable to payments of principal of, premium, if any, or interest on or in redemption of the Bonds are to be paid by LAXFUEL at least three business days prior to the related Bond payment or redemption date. Deposit requirements to the Reserve Account are payable not later than the last business day of the month after receipt of a notice of deficiency from the Trustee. The Trustee is obligated to establish the market value for the Reserve Account five days prior to each principal payment date, each redemption date and any date on which the lien of the Indenture with respect to Bonds is defeased, and immediately after making any withdrawal from the Reserve Account. See The Trust Estate Reserve Account below. LAXFUEL s obligation to make all rental payments at the times and in the amounts specified in the Facilities Lease is absolute and unconditional. The Trust Estate Pursuant to the Indenture, the Corporation has assigned and pledged to the Trustee, as security for the Bonds (including the 2012 Bonds), its rights to the payment of all Revenues (including the Facility Rent) and all other rights and interests which the Corporation has under the Facilities Lease and Deed of Rights (other than the Corporation s rights (i) to payment of reasonable expenses incurred by the Corporation in connection with the Indenture and certain other matters as further described in the Indenture and (ii) the indemnification and certain exemptions from liability as further described in the Facilities Lease). Pursuant to the Indenture, the Corporation has also assigned and pledged to the Trustee, as security for the Bonds (including the 2012 Bonds), all of its rights, title and interest to and in (a) the Site and the Facilities, including any insurance proceeds relating thereto and all awards due to the taking thereof by eminent domain or sale under threat thereof, (b) all proceeds received from the sale of Bonds (provided that proceeds from the 2012 Bonds deposited in the Escrow Fund shall secure only the 2001 Bonds), and (c) all moneys and securities received by the Trustee under the Indenture and held by the Trustee in the funds and accounts established thereunder (provided that all moneys and securities transferred to and held in the Escrow Fund shall secure only the 2001 Bonds), other than the Corporate Operation Fund and the Excess Earnings Fund, together with all investments and reinvestments thereof; provided that the Trustee has a prior claim on such moneys for the payment of its compensation and expenses and for the payment of advances made by it to effect performance of certain covenants contained in the Indenture. There are, however, limitations on the ability of the Trustee to foreclose upon or otherwise realize upon the Bondholders security. See RISK FACTORS Limitations upon Trustee s Ability to Realize Benefits of Bondholders Security Involving the Site herein. Other than the leasehold mortgage created by the Indenture, the Bonds will not be secured by any other mortgage on the Site or any other property or improvements at the Airport or any other revenues 8

15 derived by the Corporation or by the City from the operation of the Airport generally. The ground rentals and any other amounts payable by LAXFUEL to the City under the Ground Lease, or any other lease, permit or other agreement between the City and LAXFUEL are not available for, or pledged as security for payment of, the Bonds. In addition, the Facilities and the City s interest therein will not be pledged as security for purposes of the 2012 Bonds. See RISK FACTORS Risks Related to the Aviation Industry, RISK FACTORS Risks Associated with a LAXFUEL Bankruptcy, RISK FACTORS Risks Associated with a Bankruptcy of the Corporation, and RISK FACTORS Risks Associated with a Contracting Airline s Bankruptcy. Reserve Account At the time of issuance of the 2012 Bonds, the amounts of cash and permitted investments on deposit in the Reserve Account of the Bond Fund established pursuant to the Indenture as security for the Bonds shall equal the Reserve Account Requirement for the Bonds, including the 2012 Bonds, after giving effect to the refunding of the 2001 Bonds. During any period in which Bonds are Outstanding, the Reserve Account will be maintained at the Reserve Account Requirement, which is defined by the Indenture to mean the least of (i) 10% of the original issue price of the Bonds net of any preissuance accrued interest (i.e. par amount less any original issue discount plus any original issue premium), (ii) the maximum annual principal and interest payment requirements on the Bonds in any Bond Year (as herein defined), and (iii) 125% of the average annual principal and interest payment requirements on the Bonds in any Bond Year. The Guaranty Pursuant to the Guaranty, LAXFUEL absolutely and unconditionally guarantees to the Trustee for the benefit of the Bondholders (i) the full and prompt payment of the principal of and interest and premium, if any, on the Bonds, when and as the same shall become due whether at stated times or maturities, by redemption, acceleration or otherwise, (ii) the full and prompt payment of all other amounts due under the Indenture, together with any interest accrued thereon (items (i) and (ii) collectively shall be referred to as the Guaranteed Indebtedness ) and (iii) the full, prompt and complete performance of all obligations of the Corporation set forth in the Indenture and in any deed of trust, security agreement, lease assignment or other assignment, agreement or instrument now or hereafter evidencing or securing any portion of the Guaranteed Indebtedness or setting forth obligations of the Corporation to or for the benefit of the Owners (together with the full and prompt payment of the Guaranteed Indebtedness, the Guaranteed Obligations ). See APPENDIX G SUMMARY OF CERTAIN PROVISIONS OF THE GUARANTY for a summary of certain additional provisions of the Guaranty. See RISK FACTORS Risks Associated with a LAXFUEL Bankruptcy and RISK FACTORS Risks Associated with a Contracting Airline s Bankruptcy herein for a discussion of certain risks which may affect the Guaranty. Pursuant to the Security Agreement, LAXFUEL has granted a security interest in the Interline Agreement to the Trustee to secure its obligations under the Guaranty. In addition, LAXFUEL has agreed to cooperate with the Trustee to enforce the payment of all amounts due under the Interline Agreement with respect to the Guaranteed Obligations and to require the Contracting Airlines to perform their respective obligations under the Interline Agreement. Neither the Guaranty nor the Security Agreement may be modified if such modification adversely affects the interest of the Bondholders. 9

16 Additional Bonds The Corporation may issue one or more series of Additional Bonds, secured on a parity with the 2005 Bonds and the 2012 Bonds, to refund any Bonds Outstanding under the Indenture, to pay additional Costs of the Project or to finance additional facilities on property owned by the City s Department of Airports upon the receipt by the Trustee of, among other things, (i) an opinion of Bond Counsel to the effect that the issuance of such Additional Bonds does not adversely affect the tax-exempt status of the then Outstanding Bonds, (ii) the consent and approval of LAXFUEL to the issuance of such Additional Bonds and (iii) funds for deposit in the Reserve Account, either from the proceeds of such Additional Bonds or from any other source, which together with amounts then on deposit in the Reserve Account cause the balance in such account to equal the Reserve Account Requirement for the Bonds immediately after the issuance of such Additional Bonds. [Remainder of Page Intentionally Left Blank] 10

17 DEBT SERVICE REQUIREMENTS The following table sets forth the annual debt service requirements payable in each year ending January 1 ( Bond Year ) for the Bonds, including the 2012 Bonds, after giving effect to the refunding of the 2001 Bonds. Bond Year 2005 Bonds 2012 Bonds Total Bond Ending Debt Service* Principal Interest Total* Debt Service* 01/01/2013 $ 2,397,055 $ 3,035,000 $ 672,622 $ 3,707,622 $ 6,104,677 01/01/2014 2,878,110 2,055,000 2,966,100 5,021,100 7,899,210 01/01/2015 2,877,110 2,155,000 2,863,350 5,018,350 7,895,460 01/01/2016 2,876,110 2,255,000 2,755,600 5,010,600 7,886,710 01/01/2017 2,779,860 2,370,000 2,642,850 5,012,850 7,792,710 01/01/2018 2,877,860 2,480,000 2,524,350 5,004,350 7,882,210 01/01/2019 2,880,360 2,615,000 2,400,350 5,015,350 7,895,710 01/01/2020 2,881,610 2,745,000 2,269,600 5,014,600 7,896,210 01/01/ ,360 2,875,000 2,132,350 5,007,350 5,928,710 01/01/2022 3,020,000 1,988,600 5,008,600 5,008,600 01/01/2023 3,180,000 1,837,600 5,017,600 5,017,600 01/01/2024 3,320,000 1,694,500 5,014,500 5,014,500 01/01/2025 3,465,000 1,545,100 5,010,100 5,010,100 01/01/2026 3,630,000 1,389,175 5,019,175 5,019,175 01/01/2027 3,785,000 1,225,825 5,010,825 5,010,825 01/01/2028 3,955,000 1,055,500 5,010,500 5,010,500 01/01/2029 4,155, ,750 5,012,750 5,012,750 01/01/2030 4,365, ,000 5,015,000 5,015,000 01/01/2031 4,585, ,750 5,016,750 5,016,750 01/01/2032 4,050, ,500 4,252,500 4,252,500 Total* $23,369,435 $64,095,000 $34,105,472 $98,200,472 $121,569,907 * Totals may not add due to rounding. PLAN OF REFINANCING The 2001 Bonds are presently outstanding in the aggregate principal amount of $69,090,000. Proceeds of the sale of the 2012 Bonds together with certain amounts released from the Reserve Account will be irrevocably deposited in an escrow fund established pursuant to the Indenture (the Escrow Fund ) held by the Trustee. Upon issuance of the 2012 Bonds, the Trustee will be irrevocably instructed to call the 2001 Bonds for redemption on the date which is approximately 30 days after the date of issuance of the 2012 Bonds (the Redemption Date ), at the redemption prices set forth in the Indenture, plus accrued interest, and moneys in the Escrow Fund will be applied for this purpose. From and after the date of issuance of the 2012 Bonds and such deposit into the Escrow Fund, the 2001 Bonds shall no longer be outstanding within the meaning of the Indenture. The moneys held by the Trustee in the Escrow Fund will, pursuant to the Indenture, be invested in Government Obligations maturing on or 11

18 before the Redemption Date, and will not be available for payment of the Bonds (including the 2012 Bonds) or for any other purpose. SOURCES AND USES OF FUNDS The sources and uses of funds to accomplish the plan of refinancing, including the uses of the proceeds of the sale of the 2012 Bonds, are as follows: Sources of Funds: Par Amount of 2012 Bonds $64,095, Original Issue Premium 6,065, Released Reserve Account Moneys (1) 5,871, Total Sources $76,032, Uses of Funds: Deposit to Escrow Fund $70,477, Costs of Issuance (2) 1,139, Deposit to Reserve Account 4,416, Total Uses $76,032, (1) Includes $694, of amounts payable to the Trustee pursuant to the Reserve Account Investment Agreement for the 2001 Bonds in connection with the termination thereof. (2) Includes underwriters discount, legal, trustees, accountant and other fees associated with the issuance of the 2012 Bonds. General LAXFUEL CORPORATION LAXFUEL was organized on December 5, 1984, as a California nonprofit mutual benefit corporation for the purpose of leasing, financing, constructing, purchasing, owning and operating facilities for the storage, distribution and dispensing of jet fuel at the Airport. LAXFUEL currently has over 60 members which are substantially all of the domestic and foreign commercial air carriers serving the Airport. LAXFUEL operates essentially all jet fuel receipt, storage and distribution facilities at the Airport other than certain hydrant systems serving the passenger terminals and certain cargo facilities which hydrant systems are connected to, and obtain jet fuel solely from, the LAXFUEL Facilities. Approximately 99% of all jet fuel delivered at the Airport passes through the Facilities. In addition, LAXFUEL leases jet fuel receiving and pipeline transmission facilities which enable air carriers at the Airport to access waterborne jet fuel cargos from Los Angeles harbor. LAXFUEL has no employees, but instead uses a contract operator. See The Operator below. Corporate Governance LAXFUEL has a Board of Directors comprised of one director appointed by each Contracting Airline. LAXFUEL s Board of Directors is charged with the management of the business and affairs of LAXFUEL, but policy making and all decisions related to the planning, installation, expansion, contraction, operation and management of LAXFUEL s Facilities have been vested in a Fuel Committee comprised of one member appointed by each member of the Board of Directors. In particular, the Fuel Committee is responsible for managing the Operator (as herein defined) and enforcing the rights of the Contracting Airlines and LAXFUEL under the Operating Agreement. The day-to-day management and operation of LAXFUEL s Facilities are vested in an Executive Committee established by the Fuel 12