FEDERAL AVIATION ADMINISTRATION 

UNITED STATES DEPARTMENT OF TRANSPORTATION 

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UNITED AIRLINES, INC., 

Complainant, 

v. 

THE PORT AUTHORITY OF NEW YORK AND NEW JERSEY, 

Respondent. 

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DECLARATION OF FREDRICK LONGERNECKER 

I, Fredrick Longemecker, declare as follows: 

A. Introduction 

Docket No. 

FAA-16-14-13 

1. I submit this declaration in support of the motion of the Respondent The Port 

Authority of New York and New Jersey ("the Port Authority") for summary judgment 

dismissing the Complaint herein. 

2. I hold the position of Manager, Properties & Commercial Development, for Newark 

Liberty International Airport ("EWR") and Teterboro Airport. I have held that position since 

June 2014. My job responsibilities include the following: serving as head negotiator for lease 

agreements with major tenants, including but not limited leases for air cargo facilities, fixed base 

operators, and passenger terminal facilities; overseeing lease administration and development; 

responsibility for managing annual revenue generated through agreements at EWR and 

Teterboro Airports; reviewing tenant development plans; supervising preparation ofEWR 

financial models, project schedules; developing plans for efficient use of space, review tenant 

construction timetables; responsibility for ensuring compliance with the terms and conditions of 

all agreements including accounts receivable; and coordinating these oversight and management 

1 
responsibilities with all other applicable Port Authority departments including but not limited to 

Law, Comptrollers, and Treasury. 

3. From December 2003 to June 2014, I held the position of Principal Property 

Representative, EWR and Teterboro Airports. In this position, I served as lead negotiator with 

major tenants at both airports. These tenants included passenger airlines, air cargo operators, and 

fixed base operators. In this position, I coordinated my activities with the following Port 

Authority departments: Treasury, Law, Comptrollers and the Secretary's Office. 

4. From October 2000 to December 2003, I held the position of Senior Property 

Representative for EWR and Teterboro Airports. In this position, I was responsible for 

negotiation, management and administration of terms and conditions of airlines tenants and 

service providers for EWR and Teterboro Airports. These responsibilities included reviewing 

and establishing changes to flight fees and fuel fees for approval as appropriate at Teterboro 

Airport, developing new business agreements and acting as point of contact for airport tenants. 

5. The statements in this declaration are based upon my personal knowledge and upon 

review of information contained in business records of the Port Authority. 

6. The Port Authority was created in 1921 by a Compact between the States of New 

York and New Jersey to develop public transportation, terminals and other facilities of 

commerce within the statutorily defined Port District. Pursuant to the 1921 Compact and 

subsequent bi-state legislation, the Port Authority owns and/or operates thirty-three (33) such 

facilities, including airports, bus depots, marine terminals, interstate bridges and tunnels and, 

through its wholly-owned subsidiary, the Port Authority Trans-Hudson Corporation (PATH), an 

interstate railway. Among these facilities is EWR. 

2 
7. The Port Authority operates EWR pursuant to a lease with the City ofNewark, New 

Jersey. 

8. Airline passengers who depart from or arrive at EWR use one of three passenger 

terminals, designated A, B, and C. Terminals A, B and C are each sub-divided into subterminals which are designated A-1, A-2, A-3, B-1, B-2, B-3, C-1, C-2 and C-3. 

9. Complainant operates out of sub-terminals A-1 and A-2 in Terminal A in 

accordance with Lease AN-535 and ANB-056 and sub-terminals C-1, C-2, C-3 in Terminal C in 

accordance with Lease ANA-170. Complainant refers to Lease ANA-170 as the "Master Lease." 

10. Complainant also operates out of Terminal Band oecupies space pursuant to Space 

Permit ANC-184, dated December 1, 2010. Terminal B is the designated terminal for 

international flights. Complainant's Terminal B operations are tracked and the corresponding 

flight fees are calculated and paid in accordance with the provisions of Leases ANB-056 and 

ANA-170. See para. 30 below. 

11. Attached as Exhibit A is lease ANA-170, attached as Exhibit B is lease ANB-056 

and attached as Exhibit Cis lease AN-535. Exhibits A, B, and Care located on the compact disc 

accompanying this declaration. Redacted from Exhibits A, B and C is proprietary information. 

B. Complainant at EWR 

12. Prior to its merger with Continental Airlines Inc., ("Continental"), United Air 

Lines Inc., ("United")1 operated out ofEWR in accordance with lease agreements with the Port 

Authority since 1969, or for more than 40 years. Its merger partner, Continental, has operated 

out ofEWR under lease agreements since 1987. Those lease agreements now include, and have 

always included provisions governing the recovery of the costs for its use of the public aircraft 

1 As used herein, "Complainant" refers to United and Continental as a merged entity. 

3 
facilities and included the flight fee formula. As more fully set forth below these leases are set to 

expire in 2018,2028 and 2033 with the flight fee formula set to expire in 2018. See paras. 19, 

20, 27, 29, 32 and 33 below. 

13. On March 31, 2013, United merged with Continental. Continental continued as the 

surviving corporation of the merger and then changed its name to United Airlines Inc. The 

financial statements of United Air Lines, Inc., and Continental are now combined at their 

historical cost for all periods presented beginning on October 1, 2010. For the purposes of this 

declaration, I will refer to the merged entity as Complainant and as United and Continental 

respectively when discussing their lease history prior to the merger. See Ex. D Form 8-K United 

Continental Holdings Inc., Report March 31, 2013; See Complaint at~ 33. 

14. Complainant's rights to operate at EWR are reflected in the lease agreements with 

the Port Authority described above executed prior to the merger. During the merger resulting in 

the formation of Complainant, Continental requested that the Port Authority confirm in writing 

that the merger would not trigger termination of the agreements by the resulting assignment of 

such leases to United. On September 30,2010, the Port Authority in its reply assured that, if 

provided the requisite materials needed for any applicable assignment, the merger would not 

result in a termination of those agreements. See Ex. E Corr. D. Kagan toN. Foxhall 

(09/30/20 I 0). 

15. Each of Lease ANA-170, ANB-056 and AN-535 sets forth the same two 

components that comprised the flight fee and include Schedule C as an attachment setting forth 

the method for calculating the flight fee. See paras. 20, 24 and 29 below. 

16. The flight fee is made up of two factors a Public Aircraft Facilities Charge Factor 

("PAF Factor") and an Airport Services Factor Charge ("Airport Services Factor"). The PAF 

4 
Factor and Airport Services Factor are combined and then multiplied by an airline's total 

maximum gross take-off weight of departing aircraft for a year, in thousands of pounds, to 

determine that airline's flight fee for the year. The PAF Factor and Airport Services Factor are 

each comprised of a set formula 2 

17. Lease ANA-170 has been amended (or "supplemented") 27 times, Lease ANB -

056 has been supplemented 8 times and Lease AN-535 has been supplemented 29 times. I will 

review the significant milestones reflected in these agreements and their supplements for these 

three key leases. These supplements reflect both airlines evolving relationship with the Port 

Authority regarding the payment of flight fees prior to the merger which formed Complainant. 

Significantly, as discussed more fully below, each airline by executing the supplements chose to 

extend the application of the flight fee formula until December 31,2018 despite haven been 

given the opportunities to avoid doing so. 

18. Continental and United throughout their 40 years of operating at EWR negotiated 

major supplements to their respective leases. The history of Leases ANA-170, ANB-056 and 

AN-535, including key Supplements, 15, 17, to Lease ANA-170 and Supplement 24 to AN-535, 

contradict Complainant's assertion in its Complaint that neither airline had the opportunity to 

discuss or negotiate flight fee methodology. See Complaint at~ 33, ~ 120, ~ 121. These 

supplements addressed financial investments and financing in the hundreds of millions of 

dollars, base rentals, added or surrender space, modified base rentals and added fees that 

reflected major development at EWR such as the Monorail Fee and Phase lA Charge Factor. In 

each of the aforementioned leases and corresponding supplements both United and Continental 

accepted and agreed to extend the applicability of the flight fee formula until December 31, 

2 The accompanying Declaration of Joseph R. Garcia sets forth a description of the 

specific components of each factor contained in the flight fee formula. 

5 
2018. Moreover, both airlines agreed to implementation of a new component of the flight fee, 

the Phase 1A Charge Factor, and the implementation of the new EWR Monorail Fee. 

C. United's Lease and the Flight Fees Expiration and Extension 

19. Lease AN-535 has been supplemented over twenty-nine (29) times during the last 

40 years and has always contained provisions governing the payment of flight fees to cover 

United's use of the public aircraft facilities and included Schedule C that sets forth the 

methodology for calculating the flight fees. This lease and the applicability of Schedule C expire 

on December 31,2018. 

20. United entered into Lease AN-535 dated October 7, 1969, with the Port Authority 

for use of Terminal A facilities at EWR. AN-535 provides for calculation ofEWR flight fees 

using the same formula as set forth in Lease ANA-170. See Ex. F Lease AN-535 §16 and 

Schedule C. See also para. 24 below. December 31, 1996 was the scheduled expiration date for 

Lease AN-535 and the obligation to pay flight fees. See Ex. G Lease AN-535 § 7(b); Effective 

as of March 1, 1972, with Supplement No.4, United extended the term of the lease and the flight 

fee formula from December 31, 1996 to December 31, 1998. See Ex. H Lease AN-535 

Supplement No.4§ 5 (03/1/1972). Effective as of January I, 1995, United entered into 

Supplement No. 24 to AN-535, which extended the applicability of the flight fee formulated until 

December 31, 2018. See Ex. I Lease AN-535 Supplement No. 24 §13 (04/18/1995). 

21. In Supplement No. 24 to AN-535, United agreed to the addition of both the EWR 

Monorail Fee to permit the Port Authority to recover the costs of constructing the EWR 

AirTrain, and added the Phase !A Charge Factor to the flight fee to recover costs associated with 

construction of certain EWR roadways. See Ex. J Lease AN-535 Supplement No. 24 § 2 

Schedule M (!), § 9(a), § 6(a) (04/18/1995). 

6 
D. Continental's Lease and the Flight Fees Expirations and Extensions 

1. Terminal C 

22. Effective as of January 11, 1985, People Express Airlines Inc., ("People Express") 

entered into Lease ANA-170 with the Port Authority for a term of (25) twenty-five years for its 

operations out of Areas C-1 and C-2 of Terminal C. Complainant refers to ANA-170 as the 

Master Lease. See Complaint at ~ 3 3. People Express assigned its lease to Continental, with the 

Assignment and Assumption of Lease ANA-170 effective as of August 15, 1987 (Assignment 

and Assumption) with the Port Authority consenting attached as Exhibit K. 

23. From 1987 onward, Continental continued to operate under ANA-170 and 

continued to expand operations out ofEWR in accordance with ANA-l 70's provisions. 

Continental has executed no less than twenty-seven (27) supplements to ANA-170 addressing its 

expanding activities at the EWR. Also effective as of August 15, 1987, Continental entered into 

Supplement No. 6 to ANA-170, modifying certain terms and conditions such as rental 

commencement dates, insurance amounts, and adding a provision regarding notice of flight fees, 

among other items. See Ex. L Lease ANA-170 Supplement No.6§ 4, § 5 (a),§ 8(a)-(c), § 13 

(08/15/1987). 

24. Section 53 of Lease ANA-170 entitled Payment of Flight Fees sets forth the flight 

fees and corresponding methodology for their calculation in Schedule C. Furthermore, Section 

53 sets December 31, 1998 as the expiration for the flight fee provisions contained in Schedule 

C. In pertinent part Section 53 of ANA-170 states: 

"for the portion of the term subsequent to December 31, 1998, the Port Authority 

and Lessee shall negotiate in good faith toward the establishment of provisions 

covering the determination of flight fees payable by the Lessee for the portion of 

the term commencing January 1, 1999 through the expiration date of the term of 

the letting hereunder and upon establishment of the same Lessee shall pay flight 

fees in accordance with said provisions for said portion of the term. If the parties 

7 
do not reach such agreement, the Lessee shall pay flight fees in accordance with 

the Port Authority's Schedule of Charges for said portion of the term commencing 

January 1, 1999." 

See Ex. M Lease ANA-170 §51, Schedule A, Section I, §53 and Schedule C. 

25. Effective as ofJanuary 1, 1995, Continental entered into Supplement No. 15 to 

Lease ANA-170. Supplement No. 15 not only extended the lease term for Area C-3 but also 

included new base rentals, added the EWR Monorail Fee permitting the Port Authority to 

recover the costs of construction for the EWR AirTrain and also added the Phase lA Charge 

Factor to recover costs associated with the construction of certain roadways. 3 Prior to the 

expiration of the flight fee formula scheduled for December 31, 1998, Continental in Supplement 

No. 15 agreed to continue to use the methodology set forth in Schedule C and extended its 

application to March 31,2013. See Ex. N Corr. (Master Lease Agreement ANA-170 

Supplement No. 15 (11112/1995) and Certificate of Officer Of Continental Airlines Inc., 

(06/26/1995); See Ex. 0 Lease ANA-170 Supplement No. 15 § 2 Schedule M (I), § 8 (a)-( d), § 

11, § 16 (a),(b) (03/20/1995). 

26. Effective as of September 1, 1999, with Supplement No. 17, Continental extended 

the term for the Area C-3 lease again, agreed to modify base rentals, and agreed to extend the 

flight fee provisions set forth in Schedule C from March 31, 2013 to December 31, 2018. See 

Ex. PLease ANA-170 Supplement No. 17 § 30 (09/01/1999). 

27. In Supplement No. 17; Continental and Port Authority again agreed to negotiate in 

"good faith to establish provisions covering the determination of flights fees payable by the 

Lessee." In the event the parties could not reach, an agreement Continental agreed that it "shall 

3 The accompanying Declaration of Joseph R. Garcia sets forth a description of the 

specific fees and components of the flight fee formula. 

8 
pay flight fees in accordance with the Port Authority's Schedule of Charges [ ... ] commencing 

January 1, 2019." See Ex. PLease ANA-170 Supplement No. 17 § 30 (09/0111999). 

28. In Supplements No. 15 and 17 Continental made significant changes to the financial 

terms of Lease ANA-170; such changes included modifications to base terminal rentals, adding 

the EWR Monorail Fee, adding the Phase 1A Charge Factor, and providing for significant 

investment. Continental did not take these opportunities to alter the original components of the 

flight fee formula as set forth in Schedule C, but instead agreed to extend its application to 

December 31,2018. 

2. Terminal A 

29. On August 10, 1999, Continental continued to expand its presence at EWR by 

executing Lease ANB-056, effective as of August 1, 1999 and agreed to lease from the Port 

Authority five (5) gates and accompanying space within Terminal A. Lease ANB-056 expires 

on December 31,2018. See Ex. Q Lease ANB-056 §7, §14 and Schedule C. In Lease ANB056, Continental agreed to adhere to the provisions of ANA-170 (for Terminal C) with regard to 

flight fees so long as it operated out of Terminal C, and agreed that even if it no longer operated 

out of that facility, its flight fees would be calculated in accordance with Schedule C of ANA170. In either event, Continental agreed that at all times provisions of the flight fee formula and 

Schedule C would apply. See Ex. Q Lease ANB-056 §7, § 14 and Schedule C. 

3. Terminal B 

30. Terminal B is the terminal designated for international arrivals at EWR. Prior to the 

merger, only Continental operated arrivals into Terminal B. Upon opening of its own 

international facility in Terminal C, Continental operated out of Terminal B, pursuant to 

Supplement No. 17 to ANA-170 in which Continental reserved the right under that agreement to 

9 
continue to use its slots at Terminal B. Continental submits monthly activity reports for arrivals 

in Terminal Band pays flight fees as set by Lease ANA-170. See Ex. R Lease ANA-170 

Supplement No. 17 § 49 (b) (09/01/1999). 

E. Major Investment Milestones for Continental and United at EWR. 

31. With Supplement No. 8 effective as ofJune 2, 1989, Continental added Area C-3 

to Terminal C. See Ex. S Lease ANA-170 Supplement No. 8 § 1, § 2 (06/02/1989). In the late 

1990's Continental embarked on a major expansion of its operations at Terminal C, expanding 

the Terminal to facilitate international arrivals and departures. It invested approximately 

$730,360,000.00 "~th a bond issuance in this expansion and this expansion resulted in the 

current form of Terminal C-3. Supplements No. 15 and 17 to Lease ANA-170 set forth 

Continental's investment in this expansion, its financing, and address its share of the costs 

associated with the EWR AirTrain construction and operation and incorporation of the Phase !A 

Charge Factor. See para. 32, below and 25 and 26 above. 

32. Continental's Supplement No. 17 to Lease ANA-170 reflects its extensive program 

to upgrade and develop Terminal C-3. This program included construction of approximately 

325,000 thousand square foot concourse, a new Federal Inspection Services facility, new 

baggage handling and sort facility, and renovation of existing passenger facilities such as the 

Presidents Club, public restrooms, relocation of administrative offices, baggage claim areas, 

ticket counters and reconfiguration of facilities to improve efficient air traffic. Supplement No. 

17 also set Terminal C-3 's lease term expiration for March 31, 2028. See Ex. T Lease ANA-170 

Supplement No. 17 § 2 (a),§ 6 (a), (b)(!) (i)-(xiii) (09/01/1999); Ex. UNew Jersey Economic 

Development Authority Special Facility Revenue Bonds (Continental Airlines Inc., Project) 

Series 1999 09/15/1999 see pgs 1-8). 

10 
33. Continental's4 investment in EWR continued whe~ it executed Supplement No. 

28, effective as of December 31, 2012. Supplement No. 28 reflects Complainant's investment of 

approximately $150,000,000.00 dollars in Terminals C-1 and C-2 to further expand and update 

the terminal facilities. Supplement No. 28 also extended the terms of Terminal C-1 and C-2 until 

March 31, 2033 and Terminal C-3 is set to expire March 31, 2028. See Ex. V Lease ANA-170 

Supplement No. 28 § 1, § 3(a) (12/3112012), See para. 32 above. ; See Ex. W United Extends 

Newark Agreement, commits $150M to its Hub. 

F. Continental's Treatment of Its EWR Leases Dnring Bankruptcy Proceedings 

34. On April!, 1992, Continental was under reorganization under Chapter 11 of the 

United States Bankruptcy Code. Nevertheless, rather than rejecting Lease ANA-170 under 

Section 362 of the Bankruptcy Code, Continental reaffirmed Lease ANA-170 without a 

modification to the flight fee formula and extended the lease term among other items when it 

executed Supplement No. 10. This supplement reflected that Continental fried for bankruptcy, 

extended the lease term for Terminal C-3 and that reflected Continental's commitment to operate 

out of Terminal C-3 while it surrendered certain areas under the leasehold to the Port Authority. 

See Ex. X Lease ANA-170, Supplement No. 10 (04/01/1992) § 1(a), (b), § 4(a),(b), § 5(a). 

35. On June 1, 1993, Continental and Port Authority entered into a stipulation 

addressing Continental's assumption under Section 362 of the Bankruptcy Code of certain leases 

for its operations at EWR and LaGuardia Airports. In this stipulation, Continental assumed 

Lease ANA-170, while rejecting others such as Lease ANA-093 for portions of the North 

Terminal at EWR. On October 1, 1993, the United States Bankruptcy Court for the District of 

4 Supplement No. 28 effective as of December 31, 2012lists Continental as the lessee. 

Execution of this supplement occurred prior to completion of the merger and Continental's name 

change on March 31, 2013. 

11 
Delaware entered its order approving Continental's motion for the assumption of certain 

agreements and the corresponding stipulations including the June I, 1993 stipulation between the 

Port Authority and Continental. See Ex. Y Stipulation Between Continental Airlines, Inc., and 

the Port Authority of New York and New Jersey for the Assumption of Certain Unexpired 

Leases and Executory Contracts (6/1/1993); In re Continental Airlines, Inc., et al., Chapter II 

Case No. 90-932 through 90-984, Order Pursuant to II U.S.C. § 365 Approving Assumption of 

Certain Executory Contracts and Unexpired Leases Upon the Effective Date of the Plan of 

Reorganization and Approving Certain Stipulations with Lessors (IO/l/I993). 

G. United's Treatment of Its EWR Leases During Bankruptcy Proceedings 

36. On June I7, 2005, United was under reorganization under Chapter II of the United 

States Bankruptcy Code. On that date, the Port Authority, United and Air Canada executed a 

partial assignment of certain facilities under Lease AN-535 with assumption and consent 

("Assignment"). This Assignment reflected United's proposed action to assume certain leases 

with the Port Authority including AN-535 subject to the bankruptcy's court approval. The 

modification included a surrender of space and changes to fees and rentals, but did not include a 

modification to the flight fee formula. See Ex. Z Partial Assignment under Letter Agreement 

with Assumption and Consent Lease Agreement No. AN-535 (6/I7/2005). 

37. The United States Bankruptcy Court for the Northern District of Illinois Eastern 

Division entered an order approving United's assumption of certain leases and agreements for its 

operations at EWR including Lease AN-535 while amending certain provisions of the lease. 

This included payments of credit from the Port Authority for investment by United in the 

terminal and an agreement for assignment of certain gates and termination of certain rentals, 

rates and fees for the space assigned. See Ex. AA In re UAL Corporation, et al., Chapter II 

12 
Case No. 02 B-48191, Stipulation order Assuming Certain Unexpired Leases of Non-Residential 

Real Property and Partial Assignment Thereof with respect to Newark Liberty International 

Airport Pursuant to Section 365(a) of the bankruptcy code. 

I declare nnder the penalty of perjury nnder the laws of the United States of America that 

that the foregoing is true and correct. 

Executed at Newark, New Jersey, on February 9, 2015. 

13 

Form 8-K 

8-K 1 d514659d8k.htm FORM 8-K 

UNITED STATES 

SECURITIES AND EXCHANGE COMMISSION 

Washington, D.C. 20549 

FORM8-K 

CURRENT REPORT 

PURSUANT TO SECTION 13 OR 15(0) OF 

THE SECURITIES EXCHANGE ACT OF 1934 

Date of Report (Date of earliest event reported): March 28, 2013 

UNITED CONTINENTAL HOLDINGS, INC. 

Delaware 

Delaware 

Delaware 

(State or Other Jurisdiction 

of Incorporation) 

UNITED AIR LINES, INC. 

UNITED AIRLINES, INC. 

(Exact Name of Registrant as Specified in its Charter) 

001-06033 

001-11355 

001-10323 

(Commission 

File Number) 

233 S. Wacker Drive, Chicago, IL 60606 

233 S. Wacker Drive, Chicago, IL 60606 

233 S. Wacker Drive, Chicago, IL 60606 

(Address of Principal Executive Offices) (Zip Code) 

(312) 997-8000 

(312) 997-8000 

(312) 997-8000 

(Registrant's telephone number, including area code) 

N/A 

(Former Name or Former Address, if Changed Since Last Report.) 

36-2675207 

36-2675206 

74-2099724 

(I.RS. Employer 

Identification No.) 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the 

following provisions: 

D Written communications pursuant to Rule 425 under the Securities Act (17 CFR 240.425) 

D Soliciting material pursuantto Rule l4a-l2 under the Exchange Act (17 CFR 240.14a-l2) 

D Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) 

D Pre-commencement communications pursuant to Rule l3e-4( c) under the Exchange Act (17 CFR 240.13e-4( c)) 

http://www.sec.gov/ Archives/edgar/data/! 00517/000119312513140583/d514659d8k.htm[2/5/20 15 11 :52:34 AM] 
Item 1.01 Entry into a Material Definitive Agreement. 

On March 28, 2013, Continental Airlines, Inc., a Delaware corporation ("Continental") and a wholly-owned subsidiary of United 

Continental Holdings, Inc. ("UAL"), and United Air Lines, Inc., a Delaware corporation ("United") and a wholly-owned subsidiary ofUAL, 

entered into an Agreement and Plan of Merger (the "Merger Agreement") providing for the merger of United with and into Continental (the 

"Merger"). On March 31, 2013, United merged with and into Continental, with Continental continuing as the surviving corporation of the Merger 

and as a wholly-owned subsidiary ofUAL. Upon the closing of the Merger on March 31, 2013, Continental's name was changed to "United 

Airlines, Inc." (the "Survivor"). 

As of April!, 2013, UAL, the Survivor and The Bank of New York Mellon Trust Company, N.A., as trustee (the "Trustee"), entered 

into a First Supplemental Indenture to the Amended and Restated Indenture dated as of January II, 2013 among UAL, United and the Trustee (the 

"2013 Indenture") in which the Survivor assumed the obligations of United as guarantor under the 2013 Indenture and with respect to $326 million 

aggregate principal amount of 6% Notes due 2026, $326 million aggregate principal amount of 6% Notes due 2028 and $400 million aggregate 

principal amount of8% Notes due 2024, each of which were issued by UAL and guaranteed by United. 

Also as of April I, 2013, UAL, the Survivor and the Trustee entered into a First Supplemental Indenture to the Indenture dated as of 

July 25, 2006 among UAL, United and the Trustee (the "4.50% Convertible Notes Indenture") in which the Survivor assumed the obligations of 

United as guarantor under the 4.50% Convertible Notes Indenture and with respect to $156 million aggregate principal amount of 4.50% Senior 

Limited-Subordination Convertible Notes due 2021, which were issued by UAL and guaranteed by United. 

The foregoing descriptions of the Merger Agreement and supplemental indentures in this [tern 1.01 do not purport to be complete and 

are qualified in their entirety by reference to the Merger Agreement, which is filed as Exhibit 2.1 hereto and incorporated herein by reference, and 

the First Supplemental Indenture to the 2013 Indenture and First Supplemental Indenture to the 4.50% Convertible Notes Indenture, which are filed 

as Exhibits 4.1 and 4.2, respectively, hereto and incorporated herein by reference. 

Item 2.01 Completion of Acquisition or Disposition of Assets. 

Effective March 31, 2013, pursuant to the Merger Agreement, United merged with and into Continental, with Continental continuing as 

the surviving corporation of the Merger and changing its name to "United Airlines, Inc." In accordance with the Merger Agreement, at the 

effective time of the Merger, each outstanding share of United common stock immediately prior to the Merger was cancelled and retired and no 

consideration was delivered in exchange therefor. Each outstanding share of Continental common stock immediately prior to the Merger remained 

outstanding and was unaffected by the Merger. 

The foregoing description of the Merger in this Item 2.01 does not purport to be complete and is qualified in its entirety by reference to 

the Merger Agreement, which is filed as Exhibit 2.1 hereto and incorporated herein by reference. 

Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant. 

The information described in the second, third and fourth paragraphs under Item 1.01 above is incorporated herein by reference. In 

addition, by virtue of the Merger, the Survivor assumed by operation oflaw all of United's obligations under all notes issued by United and all 

credit agreements, loan agreements and other contracts to which United is a party, including but not limited to all equipment notes previously 

issued by United in its enhanced equipment trust certificate ("EETC") financings of aircraft. On March 31, 2013, the aggregate principal balance of 

such equipment notes issued in connection with United's 2007-1 EETC financing was $505 million at interest rates ranging from LIBOR plus 

2.25% per annum to 7.336% per annum. As of March 31, 2013, the aggregate principal balance of such equipment notes issued in connection with 

United's 2009-1 EETC financing was $419 million at an interest rate of 10.4% per annum, and the aggregate principal balance of such equipment 

notes issued in connection with United's 2009-2 EETC financing was $587 million at interest rates of9.75% (in the case of$518 million of such 

notes) and 12% (in the case of$69 million of such notes). 

For more information concerning the assumed obligations, see (i) "Note 14-Debt" to the Combined Notes to Consolidated Financial 

Statements in United's Annual Report on Form 10-K for the year ended December 31, 2012 (the "2012 

10-K"), which Note is included in Exhibit 99.1 hereto and incorporated herein by reference and (ii) Items 1.01, 1.02, 2.03 and 9.01 in the Current 

Report on Form 8-K filed by UAL, United and Continental on March 28, 2013, which are incorporated herein by reference. Additional information 

can also be found in "Item 7, Management's Discussion and Analysis-Liquidity and Capital Resources" of the 2012 10-K. 

Item 5.03 Amendments to Articles of Incorporation or By-laws; Change in Fiscal Year. 

In accordance with the provisions of the Merger Agreement, at the effective time of the Merger, the certificate of incorporation of the 

Survivor was amended and restated to read in its entirety as set forth in Exhibit 3.1 hereto (the "Survivor Certificate of Incorporation"). The 

Survivor Certificate of Incorporation was approved by UAL, the sole stockholder of Continental, on March 22, 2013 and affects the following 

changes to the certificate of incorporation of Continental in effect immediately prior to the effective time of the Merger: (i) changes the name of 

Continental to "United Airlines, Inc." and (ii) revises the limitation of liability provision to eliminate or limit the personal liability of directors to 

the fullest extent permitted by the General Corporation Law of the State of Delaware (the ''DGCL") in the event of any amendment to the DGCL 

authorizing corporate action further eliminating or limiting the personal liability of directors. 

http://www.sec.gov/Archives/edgar/data11005!7/000 119312513140583/d514659d8k.htm[2/5/2015 11:52:34 AM] 
Fonn 8-K 

Jn accordance with the provisions of the Merger Agreement, at the effective time of the Merger, the by-laws of the Survivor were 

amended and restated to read in their entirety as set forth in Exhibit 3.2 hereto (the "Survivor By-laws"). The Survivor By-laws include the 

following provisions, which are amended or in addition to the provisions contained in the by-laws of Continental in effect immediately prior to the 

effective time of the Merger: (i) the Board is authorized to tal(e any action without a meeting if all members consent thereto in writing or by 

electronic transmission; (ii) shares of the Survivor's stock may be certificated or uncertificated; and (iii) the Chairman, Chief Executive Officer or 

President has the authority to vote the securities of any other corporation which are owned or held by the Survivor. 

The foregoing descriptions of the Survivor Certificate of Incorporation and Survivor By-laws in this Item 5.03 do not purport to be 

complete and are qualified in their entirety by reference to the Survivor Certificate of Incorporation and Survivor By-laws, which are filed as 

Exhibits 3.1 and 3.2 hereto and incorporated herein by reference. 

Item 9.01 Financial Statements and Exhibits. 

(a) Financial Statements of Businesses Acquired. 

Pursuant to Rule 3-05(b) of Regulation S-X, Exhibit 99.1 to this Curreut Report on Form 8-K presents the consolidated balance sheets 

of United as of December 31, 2012 and 2011 and the related statements of consolidated operations, comprehensive income (loss), cash flows and 

stockholder's deficit for each of the three years in the period ended December 31, 2012, together with the report of independent registered public 

accounting firms thereon. The successor is viewed as the acquirer in the Merger following the legal form of the transaction and, therefore, the 

historical fmancial statements of United have been included pursuant to Rule 3-05(b) in this Form 8-K of the successor. The notes to these 

fmancial statements are combined notes relating to the financial statements ofUAL and Continental in addition to the financial statements of 

United, because this was the presentation used in the 2012 10-K. However, for purposes of this Form 8-K, information in the notes to the United 

fmancial statements included in Exhibit 99.1 relating to the financial statements ofUAL or Continental shall be deemed excluded from such notes. 

(b) Pro Forma Financial Information. 

The Merger represents a transaction between entities under common control and United is considered the predecessor entity for 

accounting purposes. Transactions between entities under common control are accounted for as if the transaction occurred at the beginning of the 

earliest period presented under which the entities were nnder common control, and prior years are retrospectively adjusted to furnish comparative 

information similar to the pooling method. The pro forma financial statements have been combined with United as the predecessor entity because 

it was the first of the two subsidiaries that was controlled by UAL, the parent entity. Exhibit 99.2 to this Current Report on Form 8-K presents tbe 

following Unaudited Pro Forma Condensed Combined Financial Information of United and Continental, which has been prepared in accordance 

with Article 11 ofRegulation S-X: 

Unaudited Pro Forma Condensed Combined Balance Sheet as of December 31, 2012; 

Unaudited Pro Forma Condensed Combined Statements of Operations for the years ended December 31, 2012, 2011 and 201 0; and 

Notes to Unaudited Pro Forma Condensed Combined Financial Statements. 

(d) Exhibits. 

Exhibit 

Number 

2.1 

3.1 

3.2 

4.1 

4.2 

99.1 

99.2 

Description 

Agreement and Plan of Merger, dated as of March 28, 2013, by and between Continental Airlines, Inc. and United Air Lines, Inc. 

Amended and Restated Certificate oflncorporation of United Airlines, Inc. 

Amended and Restated By-laws of United Airlines, Inc. 

First Supplemental Indenture dated as of April l, 2013 by and among United Continental Holdings, Inc., United Airlines, Inc. and 

The Bank ofNew York Mellon Trust Company, N.A., as trustee, to the Amended and Restated Indenture dated as ofJanuary 11, 

2013 

First Supplemental Indenture dated as of April], 2013 by and among United Continental Holdings, Inc., United Airlines, Inc. and 

The Bank of New York Mellon Trust Company, N.A., as trustee, to the Indenture dated as of July 25, 2006 

Consolidated Balance Sheets of United as of December 31, 2012 and 20 ll and the related Statements of Consolidated Operations, 

Comprehensive Income (Loss), Cash Flows and Stockholder's Deficit for each ofthe three years in the period ended December 31, 

2012 and the notes thereto, together with the report of independent registered public accounting firms thereon 

Unaudited Pro Forma Condensed Combined Financial Statements of United and Continental 

SIGNATURES 

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be 

llv.'WW.sec.gov/Archives/edgar/data/l00517/000ll9312513140583/d514659d8k.htm[2/5/2015 ll :52:34 AM] 
Fonn 8-K 

signed on its behalf by the undersigned hereunto duly authorized. 

UNITED CONTINENTAL HOLDINGS, INC. 

UNITED AIRLINES, INC.* 

UNITED AIRLINES, INC. 

Date: April3, 2013 

By: lsi John D. Rainey 

John D. Rainey 

Executive Vice President and Chief Financial Officer 

* By United Airlines, Inc. (£1k/a Continental Airlines, Inc.) as successor by merger to United Air Lines, Inc. 

Exhibit Index 

Exhibit 

Number 

2.1 

3.1 

3.2 

4.1 

4.2 

99.1 

99.2 

Description 

Agreement and Plan of Merger, dated as ofMarch 28, 2013, by and between Continental Airlines, Inc. and United Air Lines, Inc. 

Amended and Restated Certificate oflncorporation of United Airlines, Inc. 

Amended and Restated By-laws of United Airlines, Inc. 

First Supplemental Indenture dated as of April!, 2013 by and among United Continental Holdings, Inc., United Airlines, Inc. and 

The Bank ofNew York Mellon Trust Company, N.A., as trustee, to the Amended and Restated Indenture dated as ofJanuary II, 

2013 

First Supplemental Indenture dated as of April!, 2013 by and among United Continental Holdings, Inc., United Airlines, Inc. and 

The Bank of New York Mellon Trust Company, N.A., as trustee, to the Indenture dated as of July 25, 2006 

Consolidated Balance Sheets of United as of December 31, 2012 and 2011 and the related Statements of Consolidated Operations, 

Comprehensive Income (Loss), Cash Flows and Stockholder's Deficit for each of the three years in the period ended December 31, 

2012 and the notes thereto, together with the report of independent registered public accoWlting fmns thereon 

Unaudited Pro Forma Condensed Combined Financial Statements of United and Continental 

http://www.sec.gov/Archives/edgar/data/1 00517 /000119312513140583/d514659d8k.htm[2/5/20 15 11 :52:34 AM] 

September 30,2010 

Ms. Nene Foxhall 

Senior Vice President 

Communications and Government Affairs 

Continental Airlines 

1600 Smith Street HQSEO 

Houston, TX 77002 

DearNene: 

~PORTAUTHORmOF NY& NJ 

This letter is in further response to your letter of September I 0, 2010 to Sue Baer regarding the 

merger between Continental Airlines and United Air Lines, and is a supplement to my letter 

dated September 21,2010. 

The Port Authority hereby states that the merger between Continental Airlines and United Air 

Lines shall not, by itself, constitute an event of termination of any of the respective agreements 

listed below pursuant to the corresponding section thereof: 

Agreement Facility Name or 

Description 

ANA-040 Maintenance Complex 

[Hangars 54, 55C, 

Engine Build Up (EBU) 

Bldg. 101, Material 

Stores Bldg. I 00] ' ANA-170 Terminal C 

ANA-326 GSE 154 

ANA-370 ! Chelsea Kitchen 

ANA-957 Hangar 56 

ANB-028 Cargo Bldg. 344 

ANB-056 Terminal A 

ANB-990 Satellite Kitchen 

. ANC-069 Cargo 

Expiration Section 

Date 

4/30/2027 20(a)(5) 

3/3112013 24(a)(8) 

[Cl/C2] (Supp. 

3/31/2028 17) 

[C3] 

12/31/2024 · 19(a)(8) 

2/28/2015 24(8) 

4/30/2027 23(a)(8}_ 

12/3112024 22(a)(8) 

12/3112028 45(a)(6) 

7/31/2012 20(a)(8) 

10/31/2012 23(a)(8) 

225 Park Avenue South 

New Yor~ NY I 0003 
Ms. Nene Foxhall 

Senior Vice President 

Connnunications and Government Affairs 

Continental Airlines 

t?! PORTAUiliORnY OF NY & NJ 

- 2-

The foregoing notwithstanding, the Port Authority further states that by this letter the Port 

Authority does not consent to assignment of any of above agreements from one party to another 

in the absence of delivery to the Port Authority of the relevant document or documents effecting 

such assignment, and the Port Authority approval thereof, as may be required by any of the 

agreements listed above, including, but not limited to, the respective sections of the agreements 

as set forth below. 

Agreement Facility Name or Expiration Section ! 

Description Date 

ANA-040 Maintenance Complex 4/30/2027 19 

[Hangars 54, 55C, 

Engine Build Up (EBU) 

Bldg. 101, Material 

Stores Bldg. 1 00) 

ANA-170 TerminalC 3/3112013 77 

[Cl/C2] 

3/31/2028 

[C3] 

ANA-326 GSE 154 12/31/2024 18 

ANA-370 Chelsea Kitchen 2/28/2015 23 

ANA-957 Hangar 56 ' 4/30/2027 21 

ANB-028 Cargo Bldg. 344 i 12/31/2024 20 

ANB-056 Terminal A 12/3112028 19 I 

ANB-990 Satellite Kitchen 7/3112012 19 

ANC-069 Cargo 10/31/2012 21 

We look forward to reviewing the relevant Continental/United documents as soon as they are 

available. If you have any additional questions, do not hesitate to call. 

Sincerely, 

Da "dKagan 

As~istant Director Business, 

Pr · erties & Airport Development 

NT 2"168-u ' ' ' 

·Section 16. Payment of Flight Fees 

Throughout the term of the letting under this Agreement, the Lessee shall pay to the Port Authority, the flight fee established 

by the Port Authority from time to time in accordance with Schedule C 

attached to and made a part of this Agreement, for each and 

the 

The Lessee hereby agrees that not later than the 20th day of each and every month, it shall furnish to the Port Authority a 

statement, duly certified by an authorized officer of the Lessee, certifying the number of take-offs by type of aircraft operated by the Lessee during the preceding calendar month. The Lessee shall 

also send to the Port Authority together with the certified statement aforesaid its check to the order of the Port Authority in payment of all flight fees payable by the Lessee for its activities during the 

preceding calendar month, computed on the basis of its activity and 

the pre-established flight fee as attested by such statement. The 

flight fees payable by the Lessee hereunder shall be in addition to 

any and all other rents, charges, or fees imposed upon and payable by the Lessee under any other section of this Lease. The flight fees shall be payable by the Lessee whether or not the Lessee uses 

any or all of the Public Aircraft Facilities in addition to runways. 

"Maximum Weight for Take -off" when used with reference 

to any Aircraft shall mean the maximum weight at which such Aircraft 

is authorized to take-off from the Airport by the Federal Governmental 

Agency or Agencies having jurisdiction, under conditions of zero 

wind velocity and standard atmosphere, on the least restricted Runway which is available for take-off by such Aircraft under the rules 

and regulations of the Authority, provided, that Runways shall be 

deemed to be available for use under the rules and regulations of 

the Port Authority within the meaning of this definition in cases 

where they are not actually available for periods of less than 48 

hours because of snow, ice or other temporary emergency conditions. 

If such maximum weight is not specified by such Agency or Agencies, then said phrase shall mean the highest maximum authorized weight for take-off of other Aircraft of the same type and model at the time 

of take -off. 

Section 17. FUel Storage and Distribution System 

(a) The Port Authority proposes to build and to construct, in stages and as required, an Aviation Fuel Storage and 

Distribution System, hereinafter referred to as "the FUel System". 

The Port Authority hereby reserves the right in 

its discretion, and from time to time, to enlarge or reduce or modify the Fuel System, to make changes in and to the design thereof and to 

make other changes during the progress of construction which it may deem necessary or desirable. 

- 29 -
h 1' 2_cu8-U · 

30. c - p. 1 

SCHEDULE C 

I. Commencing upon the later of the following dates: 

(1) the commencement date of the letting or (2) the date as of which 

the Port Authority shall have certified that the extension of Runway 

4R-22L and new Runway 4L-22R have been substantially completed 

(which later date is hereinafter called "the Starting Date") and 

continuing thereafter throughout the term of the letting under the 

Agreement to which this Schedule is attached (which Agreement is 

hereinafter sometimes called "the Lease") the Lessee shall pay to 

the Port Authority a flight fee for each and every take-off made by 

any aircraft operated by the Lessee. For the period from the Starting 

Date through the 31st day of December of the year in which the sa~d 

Starting Date occurs (which period is hereinafter referred to as the 

Initial Period") the Lessee shall pay for each and every take-off, a 

flight fee at the rate of $0.6500 per thousand pounds of Maximum 

Weight for Take-Off, It is understood that the flight fee for the 

Initial Period is tentative only and represents the summation of the 

following factors: 

(1) A P.A.F. Charge Factor, which pertains to the 

Port Authority's snow removal operations and provision, operation, 

maintenance, servicing, repair and replacement of and to the 

Public Aircraft Facilities and Airport emergency services. For 

the Initial Period $ 0.3130 of the tentative flight fee of $0,6500 

per thousand lbs. represents the tentative P.A.F. Charge Factor; and 

(2) An Airport Services Charge Factor which pertains 

to the Port Authority's snow removal operations and provision, 

operation, maintenance, repair and replacement with respect to 

Airport Services. For the Initial Period $0.3370 per thousand 

lbs. represents the tentative Airport Services Charge Factor. 

II. After the close of the Initial Period and after the close 

of each calendar year thereafter, the Port Authority will adjust the 

tentative flight fee for the Initial Period, or other calendar year, 

as the case may be, upwards or downwards to a finalized flight fee for 

such period or calendar year, as follows: 

A. P.A.F. Charge Factor 

(1) The Port Authority shall determine the total of 

the following major elements of costs actually incurred or 

accrued during the Initial Period, or other calendar year 

for which the adjustment is being made, in connection with 

the Public Aircraft Facilities: 
!J'X• 2168'-u. · Sc. C - p. 2 

(a) fixed charges on Port Authority Investment 

in Public Aircraft Facilities; and 

(b) the Port Authority's cost of direct labor, 

materials, payments to contractors and suppliers, 

the Port Authority's costs charged to the Emergency 

Service functions at the Airport (whether performed 

by the Airport Police Section or other section or 

sections or other Port Authority organizational unit 

or units as may hereafter perform the same or similar functions), other costs for the operation, 

maintenance, repair, and replacement of Public Aircraft Facilities, and the pro-rata share of the cost 

of snow and ice removal. 

(2) The Port Authority will also determine the total ~laximum Weight for Take-off of all aircraft using the Airport 

during the Initial Period or other calendar year for which the 

adjustment is being made except such aircraft as are not required to pay a flight fee, such as government flights, etc. 

(3) The Port Authority will multiply the sum of $0.3130 

representing the tentative P.A.F. Charge Factor in effect at 

the beginning of the Initial Period by a fraction the numerator 

of which shall be the total of the actual elements of cost 

described in subparagraphs (a) and (b) of the preceding paragraph A (l) and the denominator of which shall be $4,010,000.00; 

the resulting product shall then be multiplied by a fraction, 

the numerator of which shall be 17,734,000,000 lbs. and the 

denominator of which shall be the total Maximum vlei~ht for 

Take-Off determined in the preceding paragraph A (2); and the 

resultant product shall be the final P.A.F. Charge Factor of 

the finalized flight fee for the Initial Period or other calendar year for which the adjustment is being made. 

B. Airport Services Charge Factor 

(1) The Port Authority shall determlne the total of 

the major elements of cost actually incurred or accrued 

during the Initial Period, or other calendar year for 

which adjustment is being made, as such maJor elements are 

described in paragraph I, subparagraphs (a) through (d) 

in Schedule A attached to this Agreement. 

( 2) The Port Authority shall a1so determine the percentage of total developed land area at the Airport occupied 

by the Public Aircraft Facilities during the Initial Period 

or other calendar year for which the adjustment is being 

made. 

- 2 -
NT 2168-U 

sc. c p. 3 

(3) The Port Authority will multiply the sum of 

$0,3370 representing the tentative Airport Services 

Charge Factor of the tentative flight fee in effect at the 

beginning of the Initial Period by a fraction the numerator 

of which shall be the total of the actual major elements 

of costs determined under the precedin~ paragraph B ( 1) 

and the denominator of which shall be ~4,625,000.00: the 

resulting product shall be multiplied by a fraction the 

numerator of which shall be 17,734,000,000 lbs. and the 

denominator of which shall be the total Maximum Weight for Take-off determined in paragraph A (2) above; and 

that product shall then be multiplied by a fraction the 

numerator of which shall be the percentage determined in 

paragraph B (2) above and the denominator of which shall 

be 66.1+7%. 

(4) The resultant product shall be the final Airport Services Charge Factor of the finalized flight fee for the 

Init1al Period, or other calendar year for which the 

adjustment is being made. 

c. The final P.A.F. Charge Factor and the final Airport Services Charge Factor as determined above shall be added 

together and the sum thereof shall const1tute the finalized 

flight fee for the In1t1al Period or other calendar year for which the adjustment is being made. It shall also 

constitute the tentative flight fee for the calendar year in which such adjustment is calculated, and such flight fee will be expressed in cents per thousand pounds of 

Maximum Weight for Take-Off. The finalized flight fee 

shalJ. be multiplied by the total Maximum Weight for 

Take-off (in thousand of pounds) of all aircraft operated by the Lessee which took off from the Airport during the 

Initial Period or other calendar year for which the 

adjustment is being made and during the calendar months 

which have elapsed since the close of the Initial Period 

or other calenda,r year. The resultant product shall 

constitute the total flight fee charges payable by the 

Lessee to the Port Authority for the Lessee's use of the 

Public Aircraft Facilities during the Initial Period, or 

other calendar year, and for the months which have elapsed since the close of the Initial Period or other calendar 

year. The Lessee shall continue to make payments based 

on the new tentative flight fee until the same is further 

adcjusted. 

Any deficiency due to the Port Authority from the 

Lessee for the InHial Period or for any calendar year thereafter resulting from adjustment of the flight fee 

shall be paid to the Port Authority by the Lessee within 

thirty (30) days after demand therefor and any excess 

- 3 -· 
NT 2168-U 

Sc. C p. 4 

payments made by the Lessee determined on the basis of an 

adjusted flight fee shaH be credited against future flight fee charges, such credit to be made within thirty (30) days fol~wing the adjustment of the flight fee. The ~alculation 

of the adjustment to the flight fee wJll be made for the 

Initial Period, and ror such calendar year ohereafter, by 

no later than April 30th of the following calendar year. 

D. Notwithstanding the provisions of the Lease and notwithstanding anything herein contained, it is understood and 

agreed that the Lessee shall in no event be obligated at 

any time during the term of the letting under the Lease to 

pay a flight fee, whether tent a ti v.e o1t finalized, which is 

at a rate in excess of the flight fee rate imposed at that 

time upon aircraft of the following airlines: Allegheny Airlines, Inc., American Airlines, Inc., Braniff Airways, Inc., Delta Air Lines., Eastern Air Lines, Inc., 

Mohawk Airlines, Inc., National Airlines, Inc., Northwest Airlines, Inc., and Trans World Airlines, Inc. 

E. All percentage shares calculated under this Schedule c 

shall be expressed in decimals to the nearest ten-thousandth. 

F. All flight fees payable under this Agreement shall be 

expressed in cents per thousand lbs. of Maximum Weight for 

Take-Off to the nearest ten-thousandth of a cent. 

- 4 -

~ c""' ~ 'L-' 

·~-={<::..-._...-

.~.,'..t. c...Lvu-v 

paving work. If the Port Authority finds that the same has been 

completed to its satisfaction and in full compliance with the aforesaid approved Port Authority Construction Application, it shall issue 

and deliver to the Lessee a certificate certifYing to the completion of all such gate positions. The date specified in such certificate 

or the date of such certificate, whichever is later, shall constitute the Completion Date of Area D. 

(d) When the necessary fill has been placed upon Area E 

and the grading and paving thereof have been completed to the satisfaction of the Port Authority, the Port Authority will deliver to 

the Lessee a Certificate of Completion. The date specified in such 

Certificate or the date of the Certificate whichever is later shall 

constitute the Completion Date of Area E. 

(e) The Lessee shall not use any Area of its premises 

or any of the non-exclusive Areas for any of the purposes set forth in Section 11 hereof until the Port Authority has certified to the 

Lessee that the Lessee (and where required that the Lessee and its 

Airline co-lessees) has substantially completed all of the construction and installation work required to be performed by the Lessee 

(and if required, by the k~~see and its Airline co-lessees) in Passenger Terminal Building A:,"'11 1fassageway~ B and B-1, Flight Stations ,~ 

A-1, and A-2 and Aircraft Gate Positions designated "Area D". 

Section 7. Term 

(a) The term of the letting of Areas A, A-1, A-2, B, C, C-1, C-2, C-3 and D shall commence on the Completion Date of all 

said Areas, and the Lessee's obligation to pay the fees prescribed in 

Section 9 hereof for the non-exclusive areas described in Section 3 

hereof shall commence on the Completion Date of all said non-exclusive 

areas, as the term Completion Date is defined and determined in 

Sub-section (a) of Section 6 of this Agreement. 

and 

31, 

(b) 

the right to 

1996. 

Unless sooner terminated the letting of the premises 

use the non-exclusive areas shall expire on December 

(c) The Port Authority hereby reserves the right at any time upon ninety (90) days written notice to the Lessee and to all 

other Airline Lessees entitled to the non-exclusive use of Area E 

in common with the Lessee to terminate the common use of said area 

if, in the discretion of the Port Authority, such area is required for the further expansion of the Central Terminal Area Complex or 

for the expansion of Passenger Terminal Buildi:1g C or for the expansion of the Public Aircraft Facilities (as the same are described in 

Section 14 hereof), provided another area reasonably comparable to 

Area E is substituted therefor and made available for common use by the Lessee and all other Airline Lessees in the Central Terminal Area 

Complex. 

- 14 -

5. Subsection (b) of Section 7 of the Lease is 

amended by deleting therefrom the date "Decerrber 31, 1996" 

and substituting therefor the date "December 31, 1998". 

6. Section 8 of the Lease entitled "Rentals" is 

hereby amended to read as follows: 

"Section 8. Rentals 

(a) Commencing on March 6, 1972 and 

through June 30, 1973 the Lessee shall 

to the Port Author 

afores · annual rental shall be payable monthly in 

advance the first installment, payable on ~larch 6, 

1972 being for a part of a month only, shall be in 

monthly rental payable on April 1, 1972 and on the 

first of each and every month thereafter through 

and including the rental able on June l, 1973 

shall be 

(b) Commencing as of July l, 1973 the 

Lessee shall pay rentals to the Port Authority for 

the premises as follmvs: 

C, 

annual rate is subject to revisions from 

to time as provided in Section 10 and Schedule A 

hereof. The Lessee shall pay the rental monthly 

in advance, the first monthly installment le 

time as the annual rental 

rate has been revised in accordanc(' \vi th Section' 10 

l 

and Schedule A hereof, Hhich adjusted annual rate shall 

remain in effect until the next adjustment and the 

- 4 -

seats that can be accommodated on the particular aircraft 

equipment scheduled to be used by the Lessee. The total revenue 

seats of the Lessee shall then be divided by fourteen (14), the 

resulting quotient being herein called 'the revenue seats daily 

average' of the Lessee. 

(g) It is recognized and agreed that where all or 

a portion of the Lease is assigned pursuant to the terms of the 

Lease, the assignee's lease shall contain the provisions of this 

Section 70H with the insertion of appropriate numbers and dates 

in paragraphs (a), (b) and (c) hereof.• 

13. Effective as of December 31, 1998, the term of the 

letting under the Lease is hereby extended for the period ending 

on December 31, 2018, unless sooner terminated, upon all the 

terms, covenants, provisions and conditions of the Lease, as 

hereby amended. 

14. For the period commencing on January 1, 1999 to 

and including December 31, 2003, the Lessee shall pay to the Port 

Authority rental for the premises during the extension set forth 

in Paragraph 12 hereof as follows: 

(a) For Exclusive Areas 

C-2, C-3, G and V, 

Factor, as herei 

us 

provided in Paragraph 16 hereof and Schedule A of the Lease, as 

herein amended. The Lessee shall pay the rental for the 

Exclusive Areas, as the same shall then have been determined 

based upon the aforesaid adjustments, monthly in advance on 

January 1, 1999 and on the first day of each and every succeeding 

month in equal installments until such time as the aforesaid 

annual rate has been further adjusted in accordance with 

Paragraph 16 hereof and Schedule A of the Lease, as herein 

amended, which adjusted annual rate shall remain in effect until 

the next adjustment and the monthly installments payable after 

each such adjustment shall be equal to one-twelfth (1/12th) of 

said annual rate as so adjusted. 

27 

quarcerly, the Port Authority may notify the Lessee whether and 

to what extent the payments due to the Port Authority resulting 

from the tentative Monorail Fee established pursuant to Schedule 

M will be likely to exceed or be less than the payments which 

would result from the estimated finalized Monorail Fee as 

described in Paragraph II of Schedule M for such year for the 

period during such year as designated by the Port Authority's 

notice. If such notice is given the Lessee shall pay a new 

tentative Monorail Fee established by the Port Authority and set 

forth in said notice until the same is further adjusted in 

accordance with this subparagraph or Schedule M. 

2. There shall be added to the Lease, as 'Schedule M,' 

the following: 

"SCHEDULE M 

I. Commencing upon the date (hereinafter called the 

'Monorail Fee Commencement Date') which the Port Authority shall 

have certified to be the date as of which the construction of the 

Monorail System at Newark International Airport (hereinafter 

called the 'Airport') has been substantially completed and is 

operational and continuing thereafter for the balance of the term 

of the Lease, the Lessee shall pay to the Port Authority a 

Monorail Fee for each and every take-off of each and every 

Passenger Aircraft, as defined in Paragraph 1 of Supplement No. 

24 of the Lease, operated by the Lessee. For the period from the 

Monorail Fee Commencement Date through the 31st day of December 

of the year in which the said Monorail Fee Commencement Date 

occurs (which period is hereinafter referred to as 'the Initial 

Schedule M Period' I, the tessee shall pay for each~ such 

take-off, a tentative Monorail Fee at the rate of -

thousand pounds of Maximum weight for Take-off, as defined in 

Paragraph 1 of Supplement No. 24 of the Lease. It is understood 

that the Monorail Fee for the Initial Schedule M Period set forth 

above is tentative only and is subject to final determination as 

hereinafter provided. 

II. Initial Construction Factor: 

(a) Ill On or after the Monorail Fee 

Commencement Date the Port Authority shall determine the portion 

of the total construction costs (the 'Monorail Construction 

Costs') paid or incurred by the Port Authority in connection with 

5 
Port Authority shall also advise the Lessee of the New Phase lA 

CH&RP Charge, which shall be the amount due and payable by the 

Lessee to the Port Authority for each calendar month during 

calendar year 1995 or such other calendar year and for each and 

every month thereafter during the remainder of the Phase lA 

Charge Period. The Lessee shall pay the New Phase lA CH&RP 

Charge at the time it pays the tentative Charges for the calendar 

month following the month during which the New Phase lA CH&RP 

Charge is calculated and shall continue to make payments based on 

the said New Phase lA CH&RP Charge at the time it pays each 

Charge hereunder during the remainder of the Phase lA Charge 

Period. 

(c) Any deficiency in the amounts due to the Port 

Authority from the Lessee for any calendar year resulting from 

the adjustment of the Initial or New Phase lA CH&RP Charge shall 

be paid to the Port Authority by the Lessee within thirty (30) 

days after demand therefor and any excess payments made by the 

Lessee determined on the basis of an adjusted Initial or New 

Phase lA CH&RP Charge shall be credited against future Charges 

hereunder, such credit to be made within thirty (30) days 

following the adjustment of the Initial or New Phase lA CH&RP 

Charge, as the case may be." 

9. Schedule C attached to the Lease, as heretofore 

amended, shall be deemed further amended as follows: 

(a) The seventh (7th) line of Paragraph I thereof 

shall be amended to read as follows: 

"take-off made by any aircraft operated by the Lessee. 

In connection with the Phase lA Roadway Work, as 

defined in Supplement No. 24 to the Lease, there shall 

be included in the aforesaid flight fee an Initial 

Phase lA Charge Factor subject to adjustment as 

hereinafter provided. For .... " 

(b) There shall be added immediately after 

subparagraph B of Paragraph II thereof, as subparagraph BB, the 

following: 

"BE. Initial Phase lA Charge Factor: 

In connection with the Phase lA Roadway work and 

in addition the P. A. F. Charge Factor and the Airport Services 

20 
exceed a legal maximum applicable to such late charges then, in 

such event, each such late charge payable under this Agreement 

shall be payable instead at such legal maximum." 

5. There shall be added at the end of subparagraph 

(b) (6) of Section 30 of the Lease the following sentence: 

'The foregoing obligation shall not apply to the roof and 

exterior structure of Area M." 

6. (a) The parties hereby acknowledge that the Port 

Authority is performing a certain landside access construction 

project at the Airport consisting generally of the following 

portions: a) the construction of certain roadway improvements at 

the Airport's principal roadway entrance; b) the construction of 

an inbound ramp connecting the I-78 Connector to Brewster Road 

and a corresponding ramp to facilitate outbound movements of 

traffic; c) the construction of roads to connect Monorail 

Stations "D2" and "E" to adjacent Airport roads, and dropoff/pick-up facilities at said Stations; d) an expansion of the 

Central Terminal Area Complex recirculation road; and e) other 

roadway improvements related thereto; all of the foregoing 

portions being hereinafter collectively called the "Phase lA 

Roadway Work. " 

(b) (1) For purposes of this Supplemental 

Agreement, the term "Phase lA Costs" shall mean the total costs 

in connection with all portions of the Phase lA Roadway Work, as 

determined under subparagraph (a) (1) of Section II of Schedule M 

attached to the Lease by Paragraph 2 hereof as such costs are 

incurred in the performance of each portion of the Phase lA 

Roadway Work. 

(2) "Phase lA Charge Commencement Date" shall 

mean the date on which the Port Authority shall have certified 

that the construction of any portion of the Phase lA Roadways has 

been substantially completed, provided, however, if any such date 

shall occur on other than the first day of a calendar month, the 

Phase lA Charge Commencement Date shall mean the first (1st) day 

of the first (1st) full calendar month immediately following the 

month during which the said date occurs. 

( 3) ( i) "The Phase lA Factor" shall mean the 

sum of (1) the respective averages of the annual capital investment recovery rates of the "25-Bond Revenue Index" appearing in 

12 

7./27/f!J. 

THIS AGREEMENT SHALL NOT BE BINDING 

UPON THE PORT AUTHORITY UNTIL DULY EXECUTED 

BY AN EXECUTIVE OFFICER THEREOF, AND DELIVERED 

,-------------T~O~T~HE LESSEE BY AN AUTHORIZED REPRESENTATIVE 

' I'V!;C\T:(\:: C\:-::PT. I OF THE PORT AUTHORITY 

\;I.:_\ ; r· ('\: .\ D \fj ASSIGNMENT OF LEASE l ! L L 'J U __ l _1 .: WITH ASSUMPTION AND CONSENT 

. ' 

(Lease No. ANA-170) 

THIS AGREEMENT, made as of August 15, 1987 by THE PORT 

AUTHORITY OF NEW YORK AND NEW JERSEY (hereinafter called "the 

Port Authority"), ·a body corporate and politic created by Compact between the States of New York and New Jersey, with the consent 

of the Congress of the United States of America, having an office 

for the transaction of business at One world Trade Center, in the 

Borough of Manhattan, in the City, County and State of New York, and PEOPLE EXPRESS AIRLINES, INC. (hereinafter called "the 

Assignor"), a corporation organized and existing under the laws 

of the State of Delaware with an office for the transaction of 

business at the North Passenger Terminal at Newark International 

Airport, Newark, New Jersey and CONTINENTAL AIRLINES, INC. 

(hereinafter called "the Assignee"), a corporation organized and 

existing under the laws of the State of Delaware with an office 

for the transaction of business at Suite 1401, P.O. Box 4607, 

Houston, Texas 77210-4607 the representative of which is Mr. Sam 

E. Ashmore, 

WITNESSETH, THAT: 

WHEREAS, the Assignor desires to assign to the Assignee that certain Agreement of Lease dated as of January 11, 1985, 

made by and between the Port Authority and the Assignor, and 

hereinafter, as the same has been heretofore amended and 

supplemented, called "the Lease" covering certain premises, rights and privileges at and in respect to Newark International 

Airport; and 

WHEREAS, the Assignee has advised the Port Authority and the Assignor that it is desirous of acquiring the Lease and 

becoming the tenant of the Port Authority thereunder; and 

WHEREAS, the Assignee and the Port Authority have 

agreed, contemporaneously with the execution and delivery of thi 

Agreement by the Port Authority, to enter into Supplemental Agreement No. 6 to the Lease; and 
7/27/87 

• 

WHEREAS, the Port Authority is willing to consent to 

such assignment on certain terms, provisions, covenants and 

conditions: 

NOW, THEREFORE, in consideration of the covenants and 

mutual agreements herein contained, the Port Authority, the 

Assignor and the Assignee hereby agree as follows: 

1. The Assignor does hereby assign, transfer and set 

over to the Assignee and its successors, to its and their own 

proper use, benefit and behoof forever, the Lease, to have and to 

hold the same unto the Assignee, its successors from the 

fifteenth day of August, 1987, for and during all the rest, 

residue, and remainder of the term of the letting under the 

Lease, subject nevertheless to all the terms, provisions, 

covenants and conditions therein contained. 

2. The Port Authority hereby consents to the foregoing 

assignment. Notwithstanding anything herein to the contrary, the 

granting of such consent by the Port Authority shall not be, or 

be deemed to operate as, a waiver of the requirement for consent 

(or consents) to each and every subsequent assignment by the 

Assignee or by any subsequent assignee, nor shall the Assignor be 

relieved of liability under the terms, provisions, covenants and 

conditions of the Lease by reason of this consent of the Port 

Authority or of one or more other consents to one or more other 

assignments thereof. 

3. The Assignor agrees that this assignment of the 

Lease and this consent of the Port Authority thereto shall not in 

any way whatsoever affect or impair the liability of the Assignor 

to perform all the terms, provisions, covenants and conditions, 

including without limitation thereto the obligation to pay rent, 

of the Lease on the part of the Lessee or tenant thereunder to be 

performed, and that the Assignor shall continue fully liable for 

the performance of all the terms, provisions, covenants and 

conditions, including without limitation thereto the obligation 

to pay rent, on the part of the Lessee or tenant thereunder to be 

performed. The liability of the Assignor as set forth in this 

paragraph shall remain and continue in full force and effect as 

to any and every renewal, modification, or extension of the Lease 

whether in accordance with the terms of the Lease or by a 

separate or additional document, and notwithstanding any such 

renewal, modification, or extension, whether or not the Assignor 

has specifically consented to such renewal, modification or 

extension. The liability of the Assignor hereunder shall in no 

way be affected by the failure of the Port Authority to obtain 

the Assignor's consent to any such renewal, modification or 

extension notwithstanding that the Port Authority had previously 

obtained such consent with respect to a prior renewal, 

modification, or extension. 

Page 2 
4. The Assignee does hereby assume the performance of 

and does hereby agree to perform all the terms, provisions, 

covenants and conditions, including without limitation thereto 

the obligation to pay rent, contained in the Lease, to be 

performed on the part of the lessee or tenant thereunder, as 

though the Assignee were the original signatory to the Lease. 

The execution of this instrument by the Port Authority does not 

constitute a representation by it that the' Assignor has performed 

or fulfilled every obligation required by the Lease; as to such 

matters the Assignee agrees to rely solely upon the 

representation of the Assignor. 

5. The liability of the Assignor hereunder shall in no 

way be affected by: 

(a) The release or discharge of the Assignee in any 

creditors' receivership, bankruptcy or other similar proceeding; 

or 

(b) The impairment, limitation or modification of the 

liability of the Assignee or its estate in bankruptcy, or of any 

remedy for the enforcement of the Assignee's said liability under 

the Lease, resulting from the operation of any present or future 

provision of the Bankruptcy Code or any other statute or from the 

decision of any court having jurisdiction over the Assignee or 

its estate; or 

(c) The rejection or disaffirmance of the Lease in any 

creditors' receivership, bankruptcy, or other similar proceeding; 

or 

(d) Any disability or any defense of the Assignee. 

6. Neither the Commissioners of the Port Authority nor 

any of them, nor any officers, agent or employee thereof, shall 

be charged personally by the Assignor or by the Assignee with any 

liability or held liable to either of them under any term or 

provision of this Agreement, or because of its execution or 

Page 3 
attempted execution, or because of any breach or attempted or 

alleged breach thereof. 

IN WirNESS WHEREOF, the Port Authority, the Assignor and the Assignee have executed these presents as of the date 

first hereinabove set forth. 

ATTEST: ~ 

(\;S0-St>l Secretary 

ASSIGNOR: 

PEOPLE EXPRESS AIRLINES, INC. 

By %JwLtL ~ .. ___ _ (Title) v,ee__ Pre~ ;n,t _ 

(Corporate Seal) 

ASSIGNEE: 

CONTINENTAL AIRLINES, INC. 

(Title) vfc.& President 

(Corporate Seal) 

(Seal) 

APPROVED: 

Page 4 
FormE- Acknowledgment (N.J.) I 62472 

STATE OF NEW YOM ) 

) 1111 • 

CO!JN'I'Y OF NEW YORK ) 

subscriber, 

On thill /F day of L-e.t/__;~ , 1981 , before me, t~ a nota;¥ public of New York" personally appeared;£'..£.~ d 1cc-re~ the /.JLA.-L-.c-c.~ij-- d::~r<-dru of The Port Aut ority of New York and New Jersey, wno I am satisfied is the person who has signed the within instrument, and, I having first made known to him the contents thereof, he did ackncvledge that he signed, sealed with the corporate seal, and delivered the same as such officer aforesaid, and that the within 

instrument is the voluntary act and deed of The Port Authority of New York and New Jersey, made by virtue of the authority of its Board of Commissioners. 

STATE OF T e.;f:.CY":> l JAQUEUNE WHITE 

) IIIII. NOTARY PUBliC, Stale of New York d_~ I? D '"3 ) No. 4737769 COUNTY OF t~.--.-. \ Qualifie<l in Suffolk County ,.

4 ~ rnrnissi E ptres M~· " ~n l'jo1 ( 

. On thi~ -~A~ay of ~~~ , 1987 , before me, the s~scribeF, a Nofui)&R'..J( i5:' Pu DlfC Cl- - 6 , personally appeared Klc~o._ \;{ -'5\\u'{ -c K , (the '-JlC -e._ President of People Express Airlines, Inc. ) who I am satisfied is the person who has (executed) (signed) the within instrument, and, I having first made known to (him) (her) the contents thereof, (s)he did acknowledge that (s)he aigned, sealed (with the corporate seal) and delivered the same as (his) (her) (voluntary act and deed, for the uses and purposes therein expressed) (such officer aforesaid and that the within instrument is the voluntary act and deed of People Express Airlines, Inc. made by virtue of the authority of its board of directors) ~ind~J~y-and-a._ 

general-par h- · 

STATE OF ) 

COUNTY OF t-\GR~\'5 ) 1111 • 

) 

On thil' ·~a:y of ~ , 19 87 , before me, the s~scriber, 

~ 

c;-. 1'-lm<::,p..'-{ Pubt1c , penonally appeared C, Pe>i~\'YIOee , (the "-1\:C..E', President of Continental Airlines, Inc. ) who I am satisfied is the person who has (executed) (signed) the within instrument, and, I having first made 

known to (him) (her) the contents thereof, {s)he did acknowledge that (s)he signed, sealed (with the corporate seal) and delivered the same as {his) (her) (voluntary act and deed, for the uses and purposes therein ~xpreased) 

(such officer aforesaid and that the within instrument 1111 the voluntary ~act 

and deed of Continental Airlt' nes, Inc. made by virtue of the authority of ts board of directors) -~.i¥-id>JaUy and -&a. 

general .put -+• 

ld4 ~ • HELEN B. W1.SON . I 11 I I j, 11 A· \ 'A . 

~ ~ ' COIIMISS!ON EXPIRES .J-l(f / UJ }-JVdJ_J\ i .,... .___.,. NOI'EMBEJ'!:!<. 11100 t no tail 8e!!.l and stamp) 

~-~~-~\.:~~-'"'··'--/"" . ..,_,..,_ ..... ,A!)"~ 

(ii) Property Damage Liability 

For all damage arising out of 

injury to or destruction 

of property in any one 

occurrence ..••.•.•..•. $ 25,000,000 ,. 

Aggregate"Products Completed 

Operations •••..• ·''·• •. $ 25,000,000 . I 

Aggregate Premises · Operations •....••.•.•. $ 25,000,000 

Aggregate Protective ••.•. $ 25,000,000 

Aggregate Contractual ..•• $ 25,000,000". 

(d) The word "Worker's" appearing in the last 

sentence of subparagraph (11) of said paragraph (c) shall be 

deemed amended to read "Workers'". 

(e) 

the second subparagraph 

shall be deemed amended 

The seven'th through fourteenth lines of 

(14) of paragraph (c) of said Section 2 

to read as follows: 

"thereof and, also, a valid provision obligating the insurance company to furnish the Port Authority and the City of Newark simultaneously with the said 

insurance company's notice to the Lessee, but in no 

event less than ten (10) days' advance notice to 

the Port Authority, of the cancellation, termination, change or modification of the insurance 

evidenced by said policy or certificate. Renewal 

policies or certificates shall be delivered to the 

Port Authority simultaneously with the delivery thereof by the Lessee but in no event less than ten 

(10) days before the expiration of the insurance 

which such policies are to renew." 

(f) The fifth line of subparagraph (1) of 

paragraph (h) thereof shall be deemed amended to read as follows: 

''an authorized officer of the Lessee and by 

the Lessee's architect or engineer certifying that 

the". 

4. Paragraph (b) of Section 4 of the Lease is hereby amended to read as follows: 

-4-
follows: 

·(b) Unless sooner termina,~~, the term of the 

letting heceunder shall expire on the day immediately preceding the twenty-fifth (25th) year anniversary date of the Completion Date as defined in 

Section 2 hereof, or on December 31, 2012, whichever date first occurs, or on February 28, 2013 if 

the Executive Director has extended the date for 

completion as set forth in Section 2(c)(2) hereof 

to February 29, 1988, or on March 31, 2013 if the 

Executive Director has extended the date for completion as set forth in Section 2(c)(2) hereof to 

March 31, 1988." 

5. Section 5 of the Lease is hereby amended as 

(a) Subparagraph (1) of paragraph (a) thereof 

shall be deemed amended by de1eting the designation 

"(1)" at the beginning thereor and by amending the 

same to read as follows: 

"'Rental Commencement Date' shall mean 

(i) the Completion Date, as defined in Section 2 hereof, or January 1, 1988, whichever 

date occurs first; or, (ii) if the Executive 

Director has extended the date for completion 

as set forth in Section 2 (c)(2) hereof to 

February 29, 1988, 'Rental Commencement Date' 

shall mean the Completion Date, as defined in 

said Section 2, or March 1, 1988, whichever 

date occurs first; or (iii) if the Executive 

Director has extended the date for completion 

as set forth in Section 2(c)(2) hereof to 

March 31, 1988, 'Rental Commencement Date' 

shall mean the Completion Date, as defined in 

said Section 2, or April 1, 1988, whichever 

date first occurs; or (iv) if the Executive 

Director has extended the date for completion 

as set forth in Section 2(c)(2) to March 31, 

1988 and the Lessee exercises its election in 

accordance with and as provided in the following sentence, 'Rental Commencement Date' 

shall mean the Completion Date, as defined in 

said Section 2, or March l, 1988, whichever 

date first occurs. It is expressly agreed 

that in the event the Executive Director has 

extended the date for completion to March 31, 

1988 the Lessee may by written notice to the 

Port Authority, given not later than 

January 31, 1988, elect to commence payment of 

-5-
the Base Annual Rental hereunder on the Completion Date, as defined in said Section 2, or 

March l, 1988, whichever date first occurs.'' 

{b) 

shall be 

force or 

Subparagraph {2) of paragraph {a) hereof 

deemed deleted and shall be of no further 

effect. 

{c) Paragraph (b) thereof shall be deemed 

amended to read as follows: 

{b) Base Annual Rental 

The Lessee agrees to pay to the Port Authority 

the following Base Annual Rental for the 

premises: 

{1) For the portion of the term of 

the Lease commencing on the Rental Commencement Date to the last day of the month of the 

twelfth (12th) month consecutively following 

the Rental Commencement Date, including the 

month in which the Rental Commencement Date 

occurs (and in the event the Rental Commencement Date occurs on a day other than the first 

day of a calendar month the said portion of 

the term shall end on the day preceding the 

actual day on which the twelfth- month anniversary of the Rental Commencement Date 

Bn.nu.ct 1 Ren 

ctor in llliilll' Dollars and No Cents 

subject to the adjustments as 

paragraph (c hereof, and the 

able the amoun 

ethe Airport Services portion 

of the Base Annual Rental and such variable 

factor of the Base Annual Rental is herein-

-6-
ANA-l70S6B. ( 7/24/8;7J • ' I'', ' . r' • y" I ',•,,' ' . 

•and further limited with respect to Construction Advances in excess of $175,000,000 to 

construction of facilities that are not by their nature utilizable by only the Lessee or 

the Lessee's Affiliated Companies." 

(iii) The first full paragraph appearing at the top of page 48 of the Lease shall be deemed deleted from the 

Lease and shall be of no further force or effect. 

(4) There shall be deemed added at the end of 

paragraph (o) of Section 6 the following new paragraph (p) reading as follows: 

"(p) The Lessee hereby represents and warrants 

to the Port Authority that all construction 

contracts covering the construction work or 

portions thereof, including, but not limited 

to, the contract entered into between People Express and VRH/CROW, a Joint Venture of VRH 

Construction Company and William L. Crow Construction Company, dated April 10, 1985, as 

heretofore amended, supplemented and modified, 

as well as the McCormick-Morgan contract 

described in subparagraphs (4) and (12) of 

paragraph (n) of this Section, and the Wollard 

contract described in subparagraphs (1) and 

(6) of subparagraph (n) of this Section and 

the contract between People Express and BAE 

Automated Systems, Inc. and the contract 

between People Express and the Grad Partnership with respect to the construction work 

have been duly assigned by People Express to 

the Lessee including all modification agreements and amendments thereto as heretofore 

consented to by the Port Authority and, 

further, that no consent of any of the 

contractors is required for said assignment, 

or if required that the same has been obtained 

with respect to each of the said contracts." 

7. Section 7 of the Lease shall be deemed deleted therefrom 

and shall be of no further force or effect. 

8. (a) The second and third sentences of paragraph (b) of 

Section 18 of the Lease and the items designated therein as 

"Minimum Limits" shall be deemed amended to read as follows: 

''The said policy or policies of insurance shall also provide 

or contain an endorsement providing that the protections 

-15-

\ 
(' '' 

f . ' ' . . 

afforded the Lessee thereunder with respect to any claim or 

action against the Lessee by a third person shall pertain and 

apply with like effect with respect to any claim or action 

against the Lessee by the Port Authority, and that said pro- tections shall also pertain and apply with respect to any 

claim or action against the Port Authority by the Lessee, but 

such endorsement shall not limit, vary, .change, or affect the 

protections afforded the Port Authority thereunder as an additional insured. The said policy or policies of insurance 

shall also provide or contain a contractual liability endorsement covering obligations assumed by the Lessee under 

Paragraph (a) hereof. 

Minimum Limits 

Comprehensive General Liability 

(including Aircraft Liability) 

Bodily Injury Liability: 

For injury to or wrongful death 

of one or more than one person 

in any one occurrence: 

Property Damage Liability 

(including but not limited to 

aircraft in the care, custody 

and control of the Lessee) 

For all damages arising out 

of injury to or destruction 

of property in any one occurrence: 

Comprehensive Automobile Liability 

Bodily Injury Liability: 

For injury to or wrongful death 

of one or more than one person in any 

$100,000,000 

$100,000,000 

one occurrence: $25,000,000 

Property Damage Liability: 

For all damages arising out of 

injury to or destruction of 

property in any one occurrence: $ 25,000,000." 

(b) The words ''Each such copy or'' appearing in the sixteenth 

and twentieth lines of said paragraph (c) of Section 18 shall in 

each case be deemed amended to read "Each such copy and''. 

(c) The words "or out of the use or" appearing in the eighth line of paragraph (a) (1) of said Section 18 of the Lease shall 

be deemed amended to read ''arising out of any default of the 

Lessee in performing or observing any term or provision of this 

Agreement or out of the use or''. 

-16-
. ',.,' ' ' 

shall be credited against future charges, such cr~dit to 

be made within thirty (30) days following such adjustment. Nothing herein in this paragraph (g), however, 

shall obligate or be deemed to obligate the Port 

Authority to supply high temperature hot water and 

chilled water or to continue any such supply once the 

same is started, at any time prior to the Rental 

Commencement Date, or to make any'determination or 

adjustment under Schedule B at any time other than as 

stated herein." 

13. Section 53 of the Lease is hereby amended by adding at 

the end thereof a new paragraph "(d)" reading as follows: 

"(d) Without limiting any of the foregoing provisions 

of this Section or any of the provisions of Schedule c, 

the Port Authority, commencing after the Schedule C 

Date, may from time to time during each succeeding 

calendar year, but no more frequently than quarterly, 

notify the Lessee whether and to what extent the payments due to the Port Authority resulting from the 

tentative flight fee established pursuant to Schedule C 

will be likely to exceed or be less than the payments which would result from the estimated finalized fee as 

described in Paragraph II of Schedule C for such year for the period during such year as designated by the 

Port Authority's notice. If such notice is given the 

Lessee shall pay a new tentative flight fee established 

by the Port Authority and set forth in said notice until 

the same is further adjusted pursuant to this paragraph 

or Schedule C." 

14. Section 56 of the Lease is hereby amended as follows: 

(a) The words "or 82" shall be deemed deleted from the 

last line of subparagraph (ii) of paragraph (c) thereof. 

(b) Subparagraph (iii) of paragraph (c) thereof shall 

be deemed deleted and shall be of no further force or effect. 

(c) A new paragraph ''(d)" shall be added at the end 

thereof reading as follows: 

"(d) Without limiting any of the foregoing provisions 

of this Section or any of the provisions of Schedule D, 

the Port Authority, commencing after the Schedule c 

Date, may from time to time during each succeeding 

calendar year, but no more frequently than quarterly, notify the Lessee whether and to what extent the payments due to the Port Authority resulting from the 

-21-

defined) for or in connection with aircraft operated by the 

Lessee, for the purposes for which such facilities are 

provided, and all common and public roads, roadways and 

other means of access as they may from time to time be 

provided by the Port Authority to or from the Public Aircraft Facilities and all other existing common and public 

areas, space, facilities and conveniences and such additional 

common and public areas, space, facilities and conveniences 

as may from time to time be provided by the Port Authority 

at the Airport, at the time and times and for the purpose 

and purposes for which they are provided and subject to the 

terms and conditions (including the payment of fees or other 

charges which may now or in the future be imposed for said 

use) upon which they are made available therewith. 

Section 51. Expansion, Maintenance and Operation of 

Public Aircraft Facilities 

Pursuant to the Federal Airport Act and Regulations thereunder, the Port Authority has filed with the 

A~~inistrator of the Federal Aviation Administration a 

revised Master Plan (layout) of the Airport as shown on Port 

Authority Drawing No. NIA-7900 (Exhibit E, attached hereto 

and hereby made a part hereof) dated May 10, 1973 which 

shows the layout of the Airport. Upon approval of the 

revised Master Plan (layout) by the Administrator of the 

Federal Aviation Administration, the Port Authority will 

agree with such Administrator to conform to such revised 

Master Plan (layout) in making any further improvements or 

changes at the Airport which, if made contrary to such 

revised Master Plan (layout) may adversely affect the aeronautical safety, utility or efficiency of the Airport. 

Nothing contained herein shall be construed as 

a representation or agreement by the Port Authority that the 

~laster Pl.an (layout) as revised will not be further changed 

or modified from time to time or abandoned. Exhibit E expresses the PQrt Authority's tentative pians only as of the 

date hereof and it is understood that such plans are subject 

to change at the discretion of the ?ort AUthority. In 

addition to the facilities show-n on the Mas-cer Plan (layout) ,t:1e 

?crt Authority may from time to time provide other and extended Public Aircraft Facilities, the costs of which additional aad/or exteEded facilities and other costs shall 

constitute additional costs of providing the ?ublic Aircraft 

Facilities (a factor in establishing the flight fees as 

provided in the schedule attached hereto, hereby made a 

part hereof and marked "Schedule C") if such additional costs 

result f~cm any one or more of the following factors: 

- 98 -
TER'!. C 484 

(a) Technical advances in aircraft design; 

(b) Orders or requirements of governmental 

authorities which are pertinent to the Lessee's 

ai:!:cr-aft operations or are related to the issuance 

to the Port Authority of federal grants or loans in 

aid of the Airport; 

(c) Orders issued by a court of competent jurisdiction requiring the acquisition by the Port Authority 

of additional lands or the making of compensation to 

owners of adjoining lands for the taking thereof or 

Nhere a constructive taking has been found; 

(d) All costs, expenses, damage:~ and judg7Jlents 

incurred by or imposed upcn the ~crt Authority because 

of or as constituting noise costs (as the words "noise 

costs" are defined in paragraph (r) of Section 72 hereof). 

The Port Authority agrees to give to the Lessee prompc 

notice of any cla~ ~de against it or the institution of 

any suit seeking or demanding noise costs damage. The 

Lessee shall have a right to join in the defense of 

any such cla~~ or suit. 

(e) Casualty damage requiring new capital 

expenditures to the extent that such d~~age is not 

covered in insurance; and 

(£) Expenditures made by the Port Authority in 

addit~cn to those res~lting frcrn the foregoing fact~rs 

where the additional expenditures are such that would 

have bsen made by a reasonably prudent Airport Operator. 

Cost Factors (including all elements of cosk incurred 

or accrued) as set forth in Schedule C, as ne-.::essary L-. 

providing the Public Aircraft Facilities, are he~eby 

agreed to and accepted as expenses incurred by a reasonably prudent Airport Operator. 

For the purposes of this Agreement, the te;:::n "?c:blic ~ircraft Facilities" shall include such of the follat.ving faciliti8s 

as now exist and shall, from time to tUnet be const~ucted, 

provided ~~d maintained by the Port Authority ac the Airport for public and common use including without l~itation 

thereto, use by Airline Lessees (including the Lessee) of the 

Central ~e~inal Area Complex and by Ai~c~af~ Op~rators, ot~er 

than said Airline Lessees for ~he following pur?oses ::egardless 

of whecher or not they are actually used or usable in whole or 

in part by the Lessee (except that such facilities shall not be 

dee.."tled to includ2 any area or areas c.s to w·hich the Lessee is 

grantsd rights ?U~suant tQ Section l or J of this Agr~sment): 

- 99 -
.!.C.!'..:.'! • "-" ..L.:...O"t 

(a) Public Ramp and Apron Space - by which is 

meant space for the purpose of loading and unloading passengers, baggage, rr.ail and supplies to or from aircraft, 

for the purpose of servicing aircraft with fuel and 

lubricants, for the purpose of performing the operations commonly known as "ramp service" and for the 

purpose of performing inspection, minor maintenance and 

other services upon or in connection with aircraft 

incidental to performing "ramp service" and for the 

purpose of parking of mobile equipment actively used in 

connection with such operations; 

(b) Runways - by ~;hich is meant the runways 

(including aerial approaches and buffer zones and additionally anything required for the effective and safe 

operation of aircraft as required by the Federal Aviation Administration) at the Airport for the purposes of 

landing and taking off of aircraft; 

(c) Aircraft Parking and Storage Space - by which 

is meant those public areas of the Airport which are 

designated by the Port Authority from time to time for 

use by an Aircraft Operator for the parking or storage 

of an aircraft. 

(d) Taxiways by which is meant taxiways at the 

.".irport for the purpose of the grou.>1d movement cf 

aircraft to, from and between the runways, the Public 

Ramp and Apron Space, the Aircraft Parking and Storage 

Space, aircraft maneuvering areas, and other portions 

of the Airport, not including, however, any taxiways or 

portions thereof that are within the ~essee's premises. 

(e) Facilities incidental to the runways, the 

Public Ramp and Ap:::-on Space, the Aircraft Park~ng and 

Storage Space and Taxiways-by which is meant facilities and 

equipment for the monitoring of aircraft noise decibels 

and facilities for the purpose of controlling or assi3ting arrivals, departures and operations of aircraft 

using the Airport, such as control to\Jers, signals, 

beacons, wind indicators, floodlights, landing lights, 

boundary lights, construction lights, radio and electronic aids or other aids to operations, navigation or 

ground com:rol of hlrc:::-aft whether or not of a type 

herein mentioned and even though located at sites 

located away from the other Public Aircraft Facilities 

or outside the Airport. 

- 100 -
TERM. C 484 

The designation by the Port Authority by Rules 

or Regulations, ?romulgated pursuant to Section 11 hereof, 

of particular portions of the Public Ramp and Apron Space for use by the aircraft of particular Aircraft Operators or 

for use by particular types of aircraft or for use fer 

particular operations shall not affect the status of such 

Space as Public Aircraft Facilities. 

In addition to anything hereinbefore contained, 

to the extent that the present and future air traffic needs 

of the New York-~ew Jersey Port District and economic and 

teclL'l:.cal changes in t:::ansportaion by aircraft justify and 

subject to available land and commensurate ,.,.ith the reasonably prudent operation of the Airport, and so far as economically practicable in the light of the flight fees that the 

Lessee and the other Airline Lessees pay and subject to the 

ability of the Port Authority to finance such construction 

and maintenance, the Port Authority du~ing the ter-m cf the 

letting under this Agreement shall provide reasonably suitable Public Aircraft Facilities for such traffic needs. The 

Port Authority shall maintain such ?ublic Ai:::craft Facilities, 

as and when provided, in a rr~nne= consistent with the 

operation of the Airport by a reasonably prucent Airport 

Ope::a::or. 

Section 52. Use a£ Public Aircraft Facilities 

The Public Aircraf~ Facilities shall. be a ... rai2.-

able fer use by the Lessee, in co~n with other Ai~~ra=~ 

Ope:::ators authorized by the Port Authority to use such 

facili~i2s, for and in connection with ai:c~a=t developing a 

stress in =igid paveillent (if rig~d ?2Vement is used) ~o 

g:::eater tban that caused by the DC 8-50 Series with a maximum 

gross weight of 325,000 pounds or in connec~ion f.o/i~h ..:tircr3.it 

for which the thickness of flexible pavement (if flexible 

?avement is used) is no greater th~n that necessary for the 

above designatec aircraft. 

The Public ~ircr2ft Facilities ~ay, in the sole 

c~scretion of the Por"= Aut.ho=ity, also be made availab:e £a;: 

use by aircraft other than that mentioned above cr i::1cl:.::.ded 

in the aforesaid categories provided such aircza:t, in tbe 

Port A.u~ho:::-ity's sole judgment, will not cause LL""tdue rnrear 

and te3.r to and may safely use tj1e Public Aircraft Facilit.i.es. 

NotwithstanCir.g ~ny of the foregoing, the use 

of the 2cblic Aircraft Fa~ilit~es shall be subject to ~xisting Port Au~hority Rules anC Regulat~ons and sue~ f~r~her 

- 101 -
TERl1. C 1284 

SCHEDULE A 

The Lessee shall pay the Base Annual Rental at the 

rate and at the time stated in paragraph (b) of Section 5 of 

the Agreement to which this Schedule is attached (which 

Agreement is hereinafter sometimes called "the Lease"), as 

said rate is to be adjusted as of the Base Annual Rental 

commencement date,~ until the said rate is further adjusted, 

all as hereinafter provided. After the close of calendar 

year 1984 and after the close of each calendar year thereafter, the Port Authority will adjust the Airport Services 

Factor of the Base Annual Rental specified in paragraph (b) 

of Section 5 of the Agreement, upwards or dowm;ards, as 

follows: 

I. The Port Authority shall determine the total 

of the following major elements of costs actually incurred 

or accrued during the calendar year for which the adjustment 

is being made, in connection with Air;:>ort Services: 

(a) Fixed charges on Port Authority invest..'"!lent in 

Airport Services. 

(b) The Port Authority's cost of direct labor, 

mate~ials, payments to contractors and s~ppliers and other costs for operation, maintenance, repairs and replacements charged 

directly to Airport S·ervices, and the pro 

rata sha~e of the cost of snow and ice removali 

such ccs~s, however, to exclude those charged 

to Port Authority non-revenue producing 

areas. 

(c) The Port Authority 1 s cost of direct labo~, 

materialsr payments to contractors and suppliers and other costs charged directly to 

Policing and Traffic functions at the Airport 

(whether performed by the Airport Police 

Section or such othe~ sections or other Port 

Authority organization unit or units as may 

here~fter perform the same or siillilar functions). 

(d) The Port Authority's cost of labor which was 

charged di!:'ectly to the Airp-ort Hana.gerfs 

Office (or such other Port A~thc~ity office 

or organization unit or units as may hereafter 

from tirr.e. to tim0 perfo:r-m the sarz1e or s imilc.r 

functi::>:ts). 

II. ~he Port Authority shall also ~eterrnine during 

the calendar year for which the adjustme;1t is being m,3.de the 

percentage of total developed land area at the Airport 

occapied by the Lessee's premises. 

Page l of Schedule A 
TER11. C 1284 ' 

reasonable rules and regulations as the ?ort Authority may 

from time to time promulgate pursuant to Section 11 hereof 

including, without limitation thereto, such furtcher rules 

and regulations as impose other or different restrictions as 

to the types, weights or characteristics oZ aircraft which 

may use the same. The Port Authority by such rules and 

regulations may forbid or li8it the use of the Public Aircraft Facilities by aircraft for reasons other than herein 

set forth, even though such aircraft meet the requirements 

of this Section with c:espect to Maximum \'Ieight for Take-off. 

Section 53. Payment of Flight Fees 

(2) (l) Commencing on the Completion Date 

(hereinafter sometimes called the "Schedule C Date") and 

continuing up to and including December 31, 1998, the Lessee/ 

shall pay to the Port Authority the flight fees established 

by the Port Authority from time to time in accordance with 

the provisions of Schedule C, for each and every take-off 

of each and every aircraft operated by the Lessee. The 

said flight fee shall be a fee (per thousand pounds of 

Maximum \'Ieight for Take-off) prorated to the nearest hundred 

pounds. 

The said flight fee is made up to two 

factors, a P.A.F. Charge Factor and an Airport Services 

Charge Factor, as set forth in Schedule C. It is recognized 

that the North Terminal Lease (as defined in Section 92 

hereof) i~cludes among other thingsr provisions for the Lesseefs 

pa]~ents of flight fees in accordance with the provisions 

thereof and Schedule C attached thereto. Upon the Schedule C 

Da.te, as defined in this Section 53, the Lessee's paymcmts i!1 

respect of its flight fees shall be pursuant to the provisious 

of this Section and Schedule C attached hereto, and that any 

required adjustments of the flight fees and 10ayments resulti,-,g 

~rom such adlustments as called fer under Section 54 and Schedule 

C of the North Terminal Lease shall survive any amendment or 

surrender of the North Terminal Lease as called for under 

Section 92 hereof and be covered by the Lease. 

(2) It is recognized that the flight fee 

po:-ovisicns contained ir. Schedule C are effective throuah 

December 3l, 1998. It is hereby agreed that for the po.~tion 

- 102 -
TC:iU-1. C ll84 

of the term hereunder subsequent to December 31, 1998, the 

Port Authority and the Lessee shall negotiate in good faith 

toward the establishment of provisions covering the determination of the flight fees payable by the Lessee for the 

portion of the term commencing January 1, 1999 through the 

expiration date of the term of -the letting hereunder, and 

upon the establishment of the s~~e the Lessee shall pay 

flight fees in accordance with said provisions for said 

portion of the term. If the parties do not reach such 

agreement, the Lessee shall pay flight fees in accordance 

with the Port Authority's Schedule of Charges for said 

portion of the term commencing January 1, 1999. 

(b) "Maximum Weight for Teke-off" when used 

with reference to aircraft shall mean the Maximum Weight at 

which such Aircraft is authorized to take-off from the 

Airport by the Federal Governmental Agency or Agencies 

having jurisdiction, under conditions of zero wind velocity 

and standard atmosphere, on the least restricted Runway 

vlhich is available for take-off by such Aircraft under the 

Rules and Regulations of the Port Authority, provided, that 

R~~ways shall be deemed to be available for use under the 

Rules and Regulations of the Port Authority, within the 

m.ea:-ting of this definition, i!1 cases where they are not 

actually a'!ailable for s;eriods of less tha'1 forty-eight (48) 

hours because of snow, ice or other temporary emergency conditions. If such Maximum Weight is not specified by such 

Agency or Agencies, then said phrase shall mean the highest 

~1aximem Authori:::ed \'leight for Take-off of other Aircraft of 

the same type and model at the time of take-off. 

1

'Maximur:t ~.Yeigh·t for Laod.::..ngH when U!:;ed with 

reference to Aircraft shall mean the t1aximum Weight at ·.-.rhich 

such Aiccraft is authorized to land at the Airport ~y the 

F-=deral Governmental Agency or Agencies having jurisdiction, 

under conditions of zero wind velocity and standard atmosphere, 

on the lea.st restricted Ru..T..ray "'hich is avilable for landing by 

such Aircraft under the Rules and Regulations of the Pert 

Authority, tJrovided, that Runways sha:i.l be deemed to be availab~e for use under '.:.he Rules and Regulations of the Port 

Au~hority, within the meaning of this definition, in cases 

where they are not actually a-,.tailable for pe~::.ods of less than 

forty-eight (48) hcurs because of sno•>~, ice, ore other temporcary 

emerge!lcy conditions. If such Maxim;.h-n Height is not s,:>ecified 

by such Agency or Agencies, then said phrase shall mean the 

highest 11aximurn Authcr::.zed ;;eight for Landing of other .'\ircra=t of the same type and model qt the time of landing. 

- 103 -
TERM. C 1284 

(c) Commencing no later than the 20th day of 

the month following the month during which the Schedule C 

Date occurs and no later than the 20th day of e3ch and every 

month thereafter during the term of this Agreement, including 

the month following the expiration of this Agreement, the Lessee 

shall furnish to the Port Authority a statement duly certified 

by an authorized officer of the Lessee certifying the number of 

take-offs by type of Aircraft operated by the Lessee during the 

preceding calendar month. The Lessee shall pay to the Port 

Authority at the time it is obligated to furnish to the Port 

Authority the foregoing statement the flight fees payable by 

the Lessee for its aircraft operations during the preceding 

calendar month computed on the basis of said operations and 

the flight fees determined in accordance with Schedule C. 

The flight fees payable by the Lessee hereunder shall be in 

addition to any and all rents, charges and fees imposed upon 

and payable by the Lessee whether or not the Lessee uses any 

or all of the Public Aircraft Facilities in addition to the 

run\vays. 

Section 54. Fuel Storage and Distribution System 

(a) The Port Authority has built and constructed 

an Aviation Fuel Storage and Distribution System, hereinafter 

referred to as "the Fuel System'1 • 

The Port Authority hereby reserves the right 

in its discretion, and from time to ti.me 1 to enlarge or reduce or 

modify the Fuel System, to make changes in and to the design 

thereof and to make other changes which it may deem ~ecessary 

or desi:-able _ 

As used in this Agreement and in Schedule D 

(attached hereto and made a part hereof) , the term "Fuel 

System" shall mean and include the Bulk Storage Area (the 

location of which is sho;m on Exhibit (D), the Distribution 

Facilities and Lhe Terminal Distribution Units. 

The Bulk Storage Area shall include storage 

tan~s and incidental physical facilities for the receiving~ 

storing and dispensing of aviation fuel by pipeline including 

pumps and piping for unloading over-the-road fv.el trucks, floating 

roof tanks and a!)purtenances within dike walls, pt:mp suction 

piping and manifolds, pumps, filter separators, controls c.nd 

- 104 -
TERM C lJ84 

SCHEDULE C 

I. (a) Commencing on the Schedule C Date as defined 

in Section 53 of Port Authority Agreement No. hNA-170 (hereinafter 

called "the Agreement") with Peo?le Express Airlines, Inc. 

(hereinafter called ''the Lessee") at Newark International Airport 

(hereinafter called "the Airport"), and continuing up to and 

including December 31, 1998, the Lessee shall pay to the Port 

Authority a flight fee for each and every take-off made by any 

aircraft operated by the Lessee. For calendar year 1984 

a tenta~ive flight fee has been established for each and every 

take-off at the rate of $2.1860 per thousand pounds of Maximum 

Weight for Take-Off. It is understood that this flight fee is 

tentative only and represents the sum of the following factors: 

(1) A P.A.F. Charge Factor, which pertains to the 

Port Authority's snow removal O?erations and provision, 

operation, maintenance, servicing, repair and replacement 

of and to the Public Aircraft Facilities and Airport 

emergency services. (For calendar year 1984, $0.98295 of 

the tentative .flight fee of $2.1860 per thousand pounds 

represents G~e tentative P.A.F. Charge Factor); and 

(2) An Airport Services Charge Factor which 

pertains to the Port Authority's snow removal operations 

and provision, operation, maintenance, repair and 

replacement with respect to Airport. Se:!..-vices. (For 

calendar year 1984, $1.20302 per thousand pounds represents the tentative Airport Services Charge Factor) . 

I:i:. It is hereby acknowledged that the Pert Authority 

established a tentative flight fee for calendar year 1973 at the 

rate of $0.6300 and that said ~ee has been adjusted each calendar 

year thereafter as hereinafter set forL~, resulting in the 

tentat~ve flight fee set forth in Section ~ hereof. After the 

close of calendar year 1984 and after the close of each calendar 

year thereafter, the Port Au~~ority will adjust the tentative 

flight fee for the applicable calendar year, upwards or dowm;ards, 

to a finalized flight fee for each such calendar year, as follows: 

(il.) P.A.F. Charge Factor 

(1) The Port Authority shall determine 

the total of the following major elements of costs 

actually incurred or accru.ed during ·=he calendar 

year for which the adjustment is being made in 

Page 1 of Schedule c 
TERM C 1084 

connection with the Public Aircraft Facilities: 

(a) fixed charges on Port Authority 

~nvestment ih Public Aircraft Facilities; and 

(b) the Port Authority's cost of direct 

labor, materials, payments to contractors ~~d 

suppliers, the Port Authority's cost charged to the 

Emergency Service Functions at the Airport (whether 

performed by the Airport Police Section or other 

section or sect~ons or other Port Authority organization unit or units as may hereafter perform ~~e same 

or similar functions), other costs for the operation, 

maintenance, repair and replacement of Public Aircraft 

Facilities, and ~~e pro rata share of the cost of snow 

and ice removal. 

(2) The Port Authority shall also determine 

the total Maximum Weight f::>r '!'ake-Off of all aircraft using 

the Airport during the calendar year for which the adjustment 

is being made except such aircraft as are not required to 

pay a flight fee, such as government flights, etc. 

(3) The Port Authority '"'ill multiply ~'le s=. 

of $0.3130 representing the tentative P.A.F. Charge Factor for 

1973 by a fraction the numerator of which shall be the total 

of the actual elements of cost descr~bed in subparagraphs (a) 

and (b) of the preceding paragraph (A) (l) and the denominator 

of which shall be $4,010,000.00; the resulting product shall 

then be multiplied by a fraction, the numerator of which 

shall be 17,734,000,000 poGnds and the denominator of which 

shall be the total M~~irnum Weight for Take-Off deterr.~ned in 

the preceding paragraph (A) (2); ~~d the resultant product 

shall be the final P.A.F. Charge Factor of the finalized 

flight fee for L'le calendar year for which the adjus~~en~ is 

being made. 

(B) Airport Services Charge Factor 

(l) The Port Au~~ority shall determine ~'e 

total of the following major elements of cost actually incurred or accrued during the calendar year for which the 

adjusG~ent is being made, as described in Paragraph I, 

subparagraphs (a) ~~rough (d) in Schedule A attached to 

this Agreement. 

(2) The Port AuL~ority shall also dete~ine 

i±e percentage of total developed l2.nd area at the Airpors 

occupied by the Public Aircraft Facilities during r.he 

calendar year for which the adjustment is being made. 

Page 2 of Schedule c 
• 

TERM C 1084 

(3) The Port Authority will multiply the sum 

of $0.3370 representing the tentative Airport Services Charge 

Factor of the tentative flight fee for calendar year 1973 

by a fraction the numerator of which shall be the total 

of the actual major elements of costs determined under 

the preceding paragraph (B) (1) and the denominator of which 

shall be $4,625,000.00; the resulting product shall be 

multiplied by a fraction the numerator of which shall be 

17,734,000,000 pounds and the denominator of which shall 

be the total Maximum Weight for T~~e-Off determined in 

paragraph (A) (2) above; and that product shall then be 

multiolied bv a fraction the numerator of which shall be the 

perce~tage d~termined in paragraph (B) (2) above and the 

denominator of which shall be 66.47%. 

(4) The resultan·t :oroduct shall ce the final 

Airport Services Charge Factor of the finalized flight fee 

for the calendar year for which the adjustment is being made. 

(C) The final P.A.F. Charge Factor and the final 

Airport Services Charge Factor as determined above shall be 

added together and the sum thereof shall constitute the 

finalized flight fee for the calendar year for which L~e 

adjusL~ent is being made. It shall also constitute the 

tentative flight fee for the calendar year in which such 

adjustment is calculated, and such flight fee will be 

expressed in cents per thousand pounds of Maximum \\eight 

for Take-Off. The finalized flight fee shall be mul;:iplied 

by the total Maximw~ Weight for Take-Off (in thousands of 

pounds) of all aircraft operated by the Lessee which tcok 

off from the Airpm:·t during the calendar year for which the 

adjusL~ent is being made and during the calendar mon~~s which 

have elapsed since the close of said calendar year. The 

resultant product shall constitute the total flight fee 

charges payable by the Lessee to the Port AuL~ority for the 

Lessee's use of the Public l'.ircraft Facilities durin.g L'1e 

calendar year for which L'1e adjustment is being made, and 

for the months which have elapsed since the close of the 

said calendar year. The Lessee shall continue to nake 

?ayr.1ents based on the new tenta;:ive :!:light fee until the 

sa~e is further adjusted. 

Page 3 of Schedule C 
' 

• 

• 

TEK~ C 1084 

Any deficiency due to the Port Authority from the 

Lessee for any calendar year resulting from adjustment of the 

flight fee shall be paid to the Port Authority by the Lessee 

within thirty (30) days after demand therefor and any excess 

payments made by the Lessee determined on the basis of an 

adjusted flight fee shall be credited against future flight 

fee charges, such credit to be made within thirty {30) days 

following the adjustment of the flight fee. The calculation 

of the adjustment to the flight fee will be made for each 

calendar year thereafter by no later than April 30th of the 

following calendar year. 

(D) All percentage shares calculated under this Schedule 

C shall be expressed in decimals to the nearest ten thousandth . 

(E) All flight fees payable under the Agreement shall be 

expressed in cents per thousand pounds of Maximum Weight for 

Take-Off to the nearest ten-thousandth of a cent. 

For th~Authority 

Initialled: 

For the Lessee 

Page 4 of Schedule C