**·-~-;._.:,**

### ____ . --··-· ------·-

**-··---~--**



### To: GeraldP. 

### FitzGerald ActingDirector ofAviation 

# 95 0C T



# 12 P

# 3: 

# I6 DOCUMENT FOREXECUTION

NEW ARKINTERNATIONALAIRPORT CONTINENTALAIRLINES, 

### INC. MASTERLEASEAGREEMENTNO. ANA-170 SUPPLEMENTNO. 15



### EFFECTNEDATE: JANUARY 

## !. 1995 '

**-~~-'-'-** -.



### The subjectagreementprovides for a) anextensionto thetermfor theArea C-3 portionofTerminal C'slease to March 31, 2013 with adjustments inrental's and fees; b) paymentofmonorail fees uponcommencementoftheMonorail Systemoperation, andpayment ofaPhase lAchargeinconnectionwiththeperformanceofthePhase lA RoadwayWork. Authorizationto supplementthe subjectlease inaccordance withthe above terms was grantedbyBoard ofCommissioner approval onFebruary 9, 1995.
(Note: Per ourdiscussion, itis myunderstanding thatyouwill simultaneouslyexecute this document along withotherEWRMasterAirline Lessee lease extension agreements)

Mario C. Diaz Manager Property Development & 

### ManagementDivision New Jersey Airports 'ncr, 

### '""''"'.

### 1: .- 

## ). CERTIFICATE OF OFFICER ·OF
CONTINENTALAfRLINES, INC.

Theundersigned, Jeffery A. Smisek, SeniorVice President, General Counsel and Secretary ofContinental Airlines, Inc., a Delaware corporation (the "Company'), hereby certifies as follows: Holden Shannon is the duly elected StaffVicePresident-Properties and Facilities ofthe Company and is duly authorized underthe Company'sBy-Laws to executeand deliver leases, sub-leases, assignments, permits, service agreements, purchase orders, asset saleagreements, finance agreements, interline and other contracts onbehalfoftheCompany.



## INWITNESS WHEREOF, Ihave duly executed this Certificate on

### thisOl,-<"<'day of June, 

### 1995.

Je Senior · resident, General Counsel and Secretary



## ORlGINAL ON FILE' 

## .

I

. 

### ANA-170-SlS.M.lA.lR operated by the Lessee. The said Monorail Fee shall be a fee per thousand pounds of total Maximum Weight for Take-off, as defined in said subparagraph (b)

. (d) Commencing no later than the 20th day of the month following the month during which the Monorail Fee Commencement Date occurs and no later than the 20th day of each and every month thereafter, including the month following the expiration or earlier termination of the Lease, when the Lessee furnishes to the Port Authority a statement duly certified by an authorized officer of the Lessee certifying the number of takeoffs by type of aircraft operated by the Lessee during the preceding calendar month, it shall also separately state said take-offs by Passenger Aircraft. The Lessee shall pay to the Port Authority at the time it is obligated to furnish to the Port Authority the foregoing statement the Monorail Fee determined in accordance with Schedule M and payable by the Lessee for its Passenger Aircraft operations during the preceding calendar month computed on the basis of said operations. The Monorail Fee payable by the Lessee hereunder shall be in addition to any and all other rents, charges and fees imposed upon and payable by the Lessee under the Lease. The Monorail Fee shall be payable by the Lessee whether or not the Lessee uses the Monorail System or any or all of the Public Aircraft Facilities in addition to the runways. (e) Without limiting any of the foregoing provisions of this Paragraph or any of the provisions of Schedule M, commencing on the effective date hereof and from time to time thereafter and during each calendar year, but no more frequently than quarterly, 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:
-5-

### ANA-170-SlS.M.lA.lR

"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. 15 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'), the Lessee shall pay for each and every such take-off, a tentative Monorail Fee at the rate of $0.94 per thousand pounds of Maximum Weight for Take-off, as defined in Paragraph 1 of Supplement No. 15 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) (1) 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 the Monorail Construction Work, which shall be the total of the following: A. Construction Costs: (1) payments to independent contractors, vendors and suppliers; (2) premiums or charges for Performance Bonds; (3) insurance premiums or charges; (4) direct payroll and

**exp~nses** 

### of Port Authority employees and agents engaged in performance or supervision of the work, charged in accordance with Port Authority accounting practice.

-6-

### ANA-170-SlS.M.lA.lR

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." 8. Schedule C attached to the Lease, as heretofore amended, shall be deemed further amended as follows: (a) The fifth (5th), sixth (6th) and seventh (7th) lines of Paragraph I thereof shall be amended to read as follows: "(hereinafter called the 'Airport') and continuing

thereafter throughout the term of the letting under the Agreement, 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. In connection with the Phase lA Roadway Work as defined in Supplement No. 15 of 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) 

### subparagraph B 

### of following: ' 

### ' 

### There shall be added immediately after Paragraph II thereof, as subparagraph BB,

"BB. Initial Phase lA Charge Factor:



### -22- the

### ANA-170-Sl5.M.lA.lR

In connection with the Phase lA Roadway Work and in addition to the P. A. F. Charge Factor and the Airport Services Charge Factor above, the Lessee shall pay an Initial Phase lA Charge Factor determined as follows: after the close of calendar year 1994, the Port Authority shall establish an Initial Phase lA Charge Factor by multiplying the Initial Fee Per Acre, as determined in Paragraph 5 of Supplement No. 15 of the Lease, by the total developed land area at the Airport occupied by the Public Aircraft Facilities during the calendar year for which the adjustment is being made and the resulting product shall be divided by the total Maximum Weight for Take-off of all aircraft, as determined under subparagraph A (2) of Section II hereof, at the Airport during the calendar year for which the adjustment is being made, and the quotient thereof shall be multiplied by one thousand (1000), the resulting product thereof being herein referred to as the 'Initial Phase lA Charge Factor'." (c) There shall be added immediately after subparagraph BB thereof, as subparagraph BBB, the following: "BBB. New Phase lA Charge Factor After the close of calendar year 1994 and after the close of each calendar year thereafter up to and including the calendar year during which the Phase lA Roadway Work is substantially completed (it being understood that, in the event the Phase lA Roadway Work is not completed by December 31, 1998, the Lessee shall have no right nor shall the Port Authority have any obligation to extend or to offer to extend the term of the letting hereunder beyond March 31, 2013), the Port Authority will adjust the Initial Phase lA Charge Factor specified above and any New Phase lA Charge Factor, as hereinafter defined, as the case may be, upwards or downwards, as follows: after the close of calendar year 1994 and after the close of each calendar year thereafter up to and including the calendar year during which the Phase lA Roadway Work is completed, the Port Authority shall establish a New Phase lA Charge Factor by multiplying the New Fee Per Acre, as determined in Paragraph 5 of Supplement No. 15 of the Lease, by the total developed land area at the Airport occupied by the Public Aircraft Facilities during the calendar year for which the adjustment is being made and the resulting product shall be divided by the total Maximum Weight for Takeoff of all aircraft, as determined under subparagraph A(2) of Section I hereof, operated at the Airport during the calendar
-23-

### ANA-170-SlS.M.lA.lR

year for which the adjustment is being made, and the quotient thereof shall be multiplied by one thousand (1000), the resulting product thereof being, in each case, herein referred to as the 'New Phase lA Charge Factor'.'' (d) The first (1st) line of subparagraph (C) thereof shall be amended to read as follows: "The final P.A.F. Charge Factor, the final

Airport Services Charge Factor and the Initial or New Phase lA Charge Factor, as the case may be, as determined above

...." 9. Schedule D attached to the Lease, as heretofore amended shall be deemed further amended as follows: (a) The sixth (6th), seventh (7th) and eighth (8th) lines of Paragraph I thereof shall be amended to read as follows: "and continuing thereafter throughout the term of the letting under the Agreement the Lessee shall pay to the Port Authority a gallonage fee for each gallon of fuel delivered to aircraft operated by the Lessee. The Lessee, as an additional component of said gallonage fee and in connection with the Phase lA Roadway Work, as defined in Supplement No. 15 to the Lease shall pay an Initial Phase lA Charge Component and a New Phase lA Charge Component as hereinafter determined. The Lessee either itself, if it is a fuel storage
....'' (b) There shall be added immediately after subparagraph B of Paragraph II thereof, as subparagraph BB, the following: ''BB. Initial Phase lA Charge component: In connection with the Phase lA Roadway Work and in addition to the System Charge Component and the Airport Services Charge Component above, the Lessee

**shal~** 

### pay an Initial Phase lA Charge Component determined as follows: after the close of calendar year 1994, the Port Authority shall establish an Initial Phase lA Charge Component by multiplying the Initial Fee Per Acre, as determined in Paragraph 5 of Supplement No. 15 of the Lease, by the total developed land area at the Airport occupied
-24-

### ANA-170-S15.M.lA.1R

"The final System Charge Component, the final Airport Services Charge Component and the Initial or New Phase lA Charge Component, as the case may be, as determined above shall be

...." 10. There shall be added to the Lease immediately after Section 92 thereof the following "Section 92A "· "Section 92A. Airline Service Standards Subject to and without limiting or affecting any other term or provision of this Lease, the Lessee agrees to provide service at the premises for the benefit of the traveling public in a manner consistent with generally accepted airline industry standards for airport terminals and will cooperate with the Port Authority and other airlines serving the traveling public at the Airport in maintaining these standards through organized airport service improvement groups. The foregoing provision shall be binding as well on sublessees and others using the premises." 11. Effective as of December 31, 1998, the term of the letting of the Area C-3 portion of the premises under the Lease is hereby extended for the period ending on March 31, 2013, unless sooner terminated, at the rentals in accordance with Paragraphs 12 and 13 below and upon all the terms, covenants, provisions and conditions of the Lease, as hereby amended. 12. Area C-3 Annual Rentals: For the period 

## '



## .

**commenc~ng** 

### on January 1, 1999 to and including December 31, 2003, in addition to all other rentals, fees and charges under the Lease, the Lessee shall pay to the Port Authority rental for Area C-3 during the extension set forth in Paragraph 11 hereof as follows: For Area C-3 rental at an annual rate consisting of a Facility Factor, as hereinafter defined, in the plus the Airport Services Factor, as the same shall then

**·h~ve** 

### been adjusted in. accordance with Schedule A attached to the Lease, as herein amended, based upon a 1993 final Airport Services Factor in the of which annual rate is subject to adjustment from time to time as
-26-

### ANA-170-SlS.M.lA.lR

C-3 forms a part; (ii) from the center of partitions separating Area C-3 from areas occupied from or used by others." 16. Section 53 of the Lease entitled "Payment of Flight Fees" shall be deemed amended as follows: (a) The date appearing on the third (3rd) line of paragraph (a) (1) thereof as "December 31, 1998" shall be deemed amended to read "March 31, 2013". (b) Subparagraph (2) of paragraph (a) thereof shall be deemed amended to read as follows: "(2) It is recognized that the flight fee provisions contained in Schedule C are effective through the expiration date of the letting hereunder (March 31, 2013) .'' 17. Section 56 of the Lease entitled "Fuel Gallonage Fees" shall be deemed amended as follows: (a) The date appearing as "December 31, 1998" on the second (2nd) line of paragraph (a) thereof shall be deemed amended to read ''March 31, 2013''

.. (b) The second subparagraph of paragraph (a) thereof shall be deemed amended to read as follows: "It is recognized that the fuel gallonage fee provisions contained in Schedule D are effective through the expiration of the letting hereunder (March 31, 2013)." 18. It is understood, acknowledged and agreed that the right of the Port Authority to terminate the Lease and the letting thereunder with respect to all or portions of Area C-3 as specified in, provided under, and as stated in Paragraph 5 of Supplement No. 11 of the Lease shall continue to apply with full force and effect in accordance with the terms thereof throughout the term of Area C-3 as such term is extended by Paragraph 11 hereof. 19. The Lessee represents and warrants that no broker has been concerned in the negotiation of this Supplemental 

# -31-

### anal70suppl7-ex 

### "(c) Ifanyclause, provisionor section ofthis Agreementshall beruled invalidby any courtofcompetentjurisdiction,the invalidity ofsuchclause, provision orsectionor sections shallnotaffectany ofthe remainingclauses,provisions orsectionshereof." 29. Paragraph(d) ofSection49 oftheLease, as previouslyamended, shallbedeemed further amendedbychangingthe "1998" inthe seventh('?) and ninth (9th) lines thereofto "2018" andby changingthe "1999" inthe last line thereofto "2019". 30. Section53 oftheLease, aspreviously amended, shall be deemed further amended as follows: (a) Thedate appearingonthe third 

### (3'd) lineofparagraph(a) 

### (I)thereof(as setforth in Supplement 15 oftheLease) as "March31,2013" shallbe deemed amendedto read "December 31, 2018". (b) Subparagraph(2) ofparagraph(a) ofSection53 oftheLease, as previously amended, shallbe deemedfurtheramendedto readas follows: "(2) Itis recognizedthatpursuantto Paragraph2 ofSupplementNo. 17 to the Leasethetermofthe letting ofonlythe AreaC-3 portionofthepremises is extendedtoMarch31,2028,andthatflight fee provisionscontainedin ScheduleC are effectivethroughDecember31, 2018. It

### is hereby agreed thatfortheportionof thetermofthe lettingofsaidAreaC-3 hereundersubsequentto December31, 2018,thePortAuthorityandtheLesseeshall negotiateingoodfaithtowardthe establishmentofprovisionscoveringthedeterminationoftheflightfeespayableby theLesseefor theportionofthetermofsaidAreaC-3 commencingJanuary 1, 2019throughtheexpirationdateofthe termofthe lettingofsaidAreaC-3 hereunder (March31,2028), and upontheestablishmentofthe sametheLessee shallpay flight fees inaccordancewithsaidpi'ovisions for saidportionoftheterm. Ifthepartiesdo notreach suchagreement, the Lesseeshallpayflight fees in accordancewiththePortAuthority's ScheduleofChargesfor saidportionofthe termofsaidAreaC-3 commencingJanuary I,2019." 31. Thelast lineofthe seventh (7th) 

### subparagraphofparagraph(a) ofSection54 ofthe Leaseishereby amended toread as follows: "additions, and also includingthemodifications andadditions to theFuel Systemwhichthe Lessee shall perform aspartoftheExpansion ConstructionWork under Section93 hereof,shallbeandbecomepartof theFuel System." 32. Section56 oftheLease, aspreviouslyamended, shallbedeemed further amended to as follows:

TERMCSUPP 17 

### 55

## be used for any purpose other than heating or air-conditioning the CAL Premises or the generation of domestic hot water and precisely and without limiting the foregoing none of the same shall be used for the heating or air-conditioning of aircraft, (e) The Lessee shall pay to the Port Authority the Port Authority charge for such**r~gh-temperature** 

## hot water and chilled water determined as provided in Schedule B, attached hereto and hereby made a part hereof, and in the manner and at the times provided therein. (f) For the purposes hereof the term "high-temperature hot water" shall mean water having an average temperature of approximately 380 degrees Fahrenheit and the term "chilled water" shall mean water having an average temperature of approximately 45 degrees Fahrenheit. (g) · The Port Authorir:y may not discontinue its opeJ::ation of the Central Plant except upon thirty (30) days' notice to the Lessee and unless high-temperature hot water and chilled water shall be available to the Lessee from another supplier and upon any such discontinuance the Lessee shall be at liberty to contract or otherwise arrange for the supply of such high-temperature hot water and chilled water after the expiration of said thirty days from any other person, firm or corporation. Section 7.The term of the letting of the premises and the right to use the non-exclusive areas shall commence on August 1, 1999 and, unless sooner terminated, shall expire on December 31, 2018. Section 8. Rentals (a) For the period commencing on August 1, 1999 to and including December 31, 2003, the Lessee shall pay to the Port Authority rental for the CAL Premises, ihcluding the Lessee's right to use the non-exclusive areas, (i) 

## f6r the portion of the term during said period when four (4)**Aircr;a;f;t:==G=a~te** 

## Positions are let to the Lessee, at the monthly rate of

amount o.

..

## ~~~~~~~~~~~~~~~~~~~--~~~~~~~~~~~~~~~~~~~~~~~~~~~' plus the Airport Services Factor, as che same shall then have been adjusted in accordance with Schedule A {ar:tached hereto, hereby made a part hereof, and, as the same is hereinafter amended, hereinafter called**c~** ( 40 

## ;i \

.

...._ ____/ r

### a maximum gross weight of 870,000 pounds or in connection with aircraft for which the thickness of flexible pavement (if flexible pavement is used) is no greater than that necessary for the above designated aircraft. (b) The Public Aircraft Facilities may, in the sole discretion of the Port Authority, also be made available for use by aircraft other than that mentioned above or included in the aforesaid categories provided such aircraft, in the Port Authority's sole judgment, will not cause undue wear and tear to and may safely use the Public Aircraft Facilities. (c) Notwithstanding any of the foregoing, the use of the Public Aircraft Facilities shall be subject to existing Port Authority rules and regulations and such further reasonable rules and regulations as the Port Authority may from time to time promulgate pursuant to Section 35 hereof including, without limitation thereto, such further rules and regulations as impose other or different restrictions as to the types, weights or characteristics of Aircraft which may use the same. The Port Authority by such rules and regulations may forbid or limit 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 respect to Maximum 'N'eight 

### for Take-off. Section 14. Payment of Flight Fees (a) For the portion of the term of the CAL Lease during which the Lessee shall be conducting flight operations from Passenger Terminal Building C, the flight fees payable with respect to the Lessee's flight operations from the CAL Premises shall be calculated in accordance with the applicable provisions of the Agreement of Lease bearing Port Authority Lease No. ANA-170 covering the Lessee's premises in Passenger Terminal Building c. In the event that at any time during the term of the CAL Lease the Lessee shall cease to conduct flight operations from Passenger Terminal Building C, the provisions of this Section 14 shall govern the payment of flight fees for the Lessee's flight operations from the CAL Premises. (b) In 

### the event that at any time during the term of the CAL Lease the Lessee shall cease to conduct flight operations from Passenger Terminal Building C, then throughout the remainder of the term of the letting under the CAL Lease, the Lessee shall pay to the Port Authority che flight fees established by the Port Authority from time to time in accordance with the provisions of Schedule C, attached hereto and hereby made a part hereof, 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 Weight for Take-off) prorated to the nearest hundred pounds and is made up of two factors, a P.A.F. Charge Factor and an Airport Services Factor, as set forth in Schedule C.

53

### (cJ "Maximum Weight for Take-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 which is available for take-off by such aircraft under the Rules and Regulations of the Port 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 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 Maximum Authorized Weight for Take-off of other aircraft of the same type and model at the time of take-off. (d) "Maximurn Weight for Landing" when used with reference to aircraft shall mean the Maximum Weight at which such aircraft is authorized to land at 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 landing by such aircraft under the Rules and Regulations of the Port 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 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 Maximum Authorized Weight for Landing of other aircraft of the same type and model at the t-ime of landing. (e) Commencing no later than the 20th day of the month following the month during which the Lessee ceases to conduct flight operations from Passenger Terminal Building C, and no later than the 20th day of each and every month thereafter during the remainder of the term of the CAL Lease, including the month following the expiration of the CAL Lease, 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 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 runways.

S4

### SCHEDULE C

I. (a) Commencing on the Schedule C Date, as defined in Section 14 of Port Authority Agreement No. ANB-056 (hereinafter called "the Lease") with Continental Airlines, Inc. (hereinafter called "the Lessee") at Newark International Airport (hereinafter called "the Airport"), and continuing thereafter throughout the remainder of the term of 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. In connection with the Phase 1A Roadway Work, as defined in Section 78 of the Lease, there shall be included in the aforesaid flight fee an Initial Phase lA Cha:r:ge Factor subject to adjustment as hereinafter provided. For calendar year 1999, a current tentative flight fee has been established for each and every take-off at the rate of $2.45 per thousand pounds of Maximum Weight for Take-Off, which tentative flight fee 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 calendar year 1999, $1.1434 of the tentative flight fee of $2.45 per thousand pounds 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 calendar year 1999, $1.2537 of the tentative flight fee of $2.45 per thousand pounds represents the tentative Airport Services Charge Factor); and (3) A Phase lA Charge Factor. (For calendar year 1999, $0.0529 of the tentative flight fee of $2.45 per thousand pounds represents the tentative Phase lA Charge Factor). II. It is hereby acknowledged that the Port Authority established a tentative flight fee for calendar year 1973 at the rate of $0.6500 and that said fee has been adjusted each calendar year thereafter as hereinafter set forth, resulting in the portions of the tentative flight fee set forth in items (1) and (2) of Section I hereof and that the Port Authority established a tentative portion of the flight fee for calendar year 1994 and that said portion of the fee has been adjusted each

**~alendar** 

### year thereafter as hereinafter set forth, resulting in the portion of the tentative

Page l of Schedule C

### flight fee set forth in item (3) of Section I hereof. After the close of calendar year 1999 and after the close of each calendar year thereafter, the Port Authority will adjust the tentative flight fee for the applicable calendar year, upwards or downwards, to a finalized flight fee for each such calendar year, as follows: (A) P.A.F. Charae Factor (1) The Port Authority shall determine the total of the following major elements o£ costs actually incurred or accrued during calendar year 1999 or other calendar year for which the adjustment is being made in connection with the Public Aircraft Facilities: (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 cost 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 organiz-ation 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

**remova~.** 

### (2) The Port Authority will also determine the total Maximum Weight for Take-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 will multiply the sum of $0.3130 representing the tentative P.A.F. Charge Factor for calendar year 1973 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) {1) 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 and the denominator of which shall be the total Maximum Weight 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 calendar year for which the adjustment is being made. {B) Airport Services Charge Factor (1) The Port Authority shall determine the total



## Page 2 of Schedule C

### of the major elements of cost actually incurred or accrued during the 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 also determine the percentage of total developed land area at the Airport occupied by the Public Aircraft

**~acilities** 

### during the calendar year for which the adjustment is being made. (3) The Port Authority will multiply the sum of $0.3370 representing the tentative Airport Services Charge Factor 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) (l) 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 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 fract.ion the numerator of which shall be the percentage determined in paragraph (B) (2) above and the denominator of which shall be

**66.47~.**

**(~)** 

### The resultant product shall be the final Airport Services Charge Factor of the finalized flight fee for the calendar year for which the adjustment is being made. (BB) 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 Charge Factor above, the Lessee shall pay a Phase lA Charge Factor determined as follows: after the close of calendar year 1998, the Port Authority established the tentative Phase 1A Charge Factor set forth above; after the close of calendar year 1999 and after the close of each calendar year thereafter, the Port Authority will adjust the foregoing tentative Phase lA Charge Factor for the calendar year for which the adjustment is being made, by multiplying the Phase lA Charge Per Acre, as determined in Section 78 of the Lease, by 

### the total developed land area at the Airport occupied by the Public Aircraft Facilities during the calendar year for which the adjustment is being made and the resulting product shall be divided by the total Maximum Weight for take-off of all aircraft, as determined under subparagraph A (2) of Section II hereof, at the Airport during the calendar year for which the adjustment is being made, and the quotient thereof shall be multiplied by one thousand (1000), the resulting product thereof being herein referred to as the "Phase lA Charge Factor" for the calendar year for which the adjustment is being made.

Page 3 

### of 

### Schedule C

### (C) (1) The final P.A.F. Charge Factor, the final Airport Services Charge Factor and the Phase lA Charge Factor, as the case may be, as determined above shall be added together and the sum thereof shall constitute the finalized flight fee for the 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 shall be multiplied by the total Maximum Weight for Take-Off 

### (in thousands·of pounds) of all aircraft operated by the Lessee which took off from the Airport during the calendar year for which the adjustment is made and for the calendar months 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 Authority for the Airline's use of the Public Aircraft Facilities during the calendar year for which the adjustment is being made, and for the months which have elapsed since the close of the said calendar year. The Lessee shall continue to make payments based on the new tentative flight fee until the same is further adjusted.

. (2) 

### 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 aga.inst future flight fee charges, such credit to be made within thirty (30) days following the adjustment 

### of the flight fee. (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 AgL-eement shall be expressed in cents per thousand pounds of Maximum Weight for Take-Off to the nearest ten-thousandth of 

## a cent.

For Initialed:

For



# Page 4 oE Schedule C

### anal70suppl7-ex 

### Atany time and from timeto time afterthe PortAuthority may have exercised itsrights under Subdivision II to performthe AssumableMaintenance and Repairthe PortAuthority shallhave theright, uponnoticeto theLessee to returnthe obligationto performthe Assumable Maintenance and Repair to the Lessee commencing onadate to be specifiedin suchnoticewhichdate shall be not lessthanthirty (30) normorethanninety (90)daysfrom the giving ofsuchnotice. Suchdate shall be 'the ReturnDate ofthe AssumableMaintenance and Repair'. Fromand aftertheReturnDate oftheAssumableMaintenanceand Repairthe Lessee shallperformthe AssumableMaintenancepursuantto and in accordance withall theterms andprovisions ofthe Leaseincluding,butnot limited to, this Section 85. Fromand afterthe ReturnDateoftheAssumableMaintenance and Repair the Lessee shall continueto pay the CostofAssumable Maintenance and Repair, it beingunderstood,thatnothing hereinshallrelease orbedeemedto releasethe Lesseefromthepaymentto thePortAuthority oftbeCostofAssumable Maintenanceand Repairincluding thatportionthereofconsistingofthe Annual Capital Costin accordancewith SubdivisionIVhereofarisingpriorto theReturn DateoftheAssumable Maintenanceand Repair;nor shall anythinghereinrequire the PortAuthority to makeany calculation ordeterminationwith

**resp~ct** 

### to the CostofAssumableMaintenanceand Repairpriorto the time specifiedtherefor in SubdivisionIVhereof." 48. Theprovisions ofSection 88 and Section91 of, and ExhibitX-1 to, the Lease as herein amended shall apply solelywithrespectto theC-1andC-2 portionsofthe premises hereunder, and shall not apply inany mannerto theMortgaged Premises (as defined inSection96 oftheLease). 49. TheSectionoftheLeased entitled "EntireAgreement"shall bedeemed renunnbered as Section98 andthereference inthefirst sentence thereofto Section93 shall be deemedamendedto read "Section98", and inadditionto the Sectionadded asnew Section93 in Paragraph 6ofthis SeventeenthSupplementalAgreement, new Sections 94, 95, 96 and 97 are hereby addedto theLeasereadingas follows: "Section94. Federal Inspection (a) TheLessee has advisedthe PortAuthoritythat it intendsto makeavailable to theUnited States aportion orportions ofthepremises forthe inspection ofthe passengers oftheLessee and theirbaggagebytheUnitedStatesforUnited Statescustoms, immigration,publichealthand othergovernmentalpurposes, iftheUnited Stateswill acceptanduse the same. 1bePortAuthority shall haveno obligation orresponsibility of any kind withrespectto the foregoing orthe arrangements thatmustbe madeby the Lesseewiththe United States and any agencies thereofhavingjurisdiction.

TE;RM CSUPP l7 

### 75

### anal70suppl7-ex 

### (b) 

### From and afterthe EffectiveDate ofSupplementNo. 17 ofthe Lease, the Lessee shallbe entitled to utilizethe numberofslotsatthe international arrivals facilities ofTerminal BattheAirportheldby, assignedto orutilized by theLessee

## as ofthe EffectiveDate ofSupplementNo. 17 oftheLease. Further, theLesseehereby expressly covenants and agreesthat, fol!owing the issuanceofthe certificatecalled for inparagraph (n)(l) ofSection 93 oftheLease,any requirement for slots above the numberofslotsheld by, assignedto orutilized by the Lesseeforits international airpassenger operations at Terminal Batthe AirportontheEffectiveDate ofSupplementNo. 17 oftheLease shall be handled by theLesseeat theFIS facilities atthepremiseshereunderat all times and only suchoperationsthat exceedthedesigncapacity ofthesaid FIS facilities at the premisesmay then behandledby additional slots oftheLesseeattheinternational arrivals facilities ofTerminalBattheAirport, ifotherwisepe1mitted. Section95. StorageTanks (a) Allaboveground storagetanksand undergroundstoragetanks, ifany, installed inthepremises as oftheeffectivedateofSupplementNo. 17to this Lease and its ortheirappurtenances, pipes, lines, fixtures andotherrelatedequipment, togetherwithall aboveground storage

### tanks andunderground storage tanksinstalled in thepremises during theterm ofthe letting subsequentto the saiddate and itsortheirappurtenances,pipes, lines,fixtures and otherrelated equipmentarehereinafter collectively calledthe 'Tanks' and singularly calleda 'Tank'. TheLesseehereby agrees that title and ownershipofthe Tanks shall be andremainintheLessee, notwithstandinganythingto thecontraryinany constructionoralterationapplication. ThePortAuthority

### has made no representations or wanantieswithrespectto theTanksor theirlocationand shall assume no responsibility fortheTanks. AllTanks installedsubsequentto saiddate shallbe installedpursuantto the termsandconditions ofthe Lease includingwithout limitationSection23 hereofand nothinginthis Section 95 

### shallorshallbedeemedto bepermission orauthorizationto install any Tanks. (b) 

### Without limitingthe generality ofanyoftheprovisions ofthe Lease,the Lessee agreesthatit shallbe solelyresponsibleformaintaining, testing andrepairing the Tanks. TheLessee shall notperform any servicing, repairs ornon-routine maintenanceto theTanks withoutthepriorwritten approval ofthePortAuthority. (c) Itishereby agreedthat title to and ownership ofthe Tanks shall remainin the Lesseeuntil theearlierto occurof(!)receipt by the Lesseeofnotice from the Port Authority thattitleto theTanks shall vestinthe PortAuthority orinthe City ofNewarkor (2) receipt by the Lessee ofnotice fromthePortAuthoritythatthePortAuthority waives itsright to requiretheLesseetoremovetheTanksfromthepremises as setforth in paragraph (i) 

### below. Thevestingoftitleto the Tanksinthe PortAuthority orin the City ofNewark, ifat all, in accordance withthe foregoing item (1) 

### shall in no eventrelievethe Lesseefromthe obligationto remove the Tanksfrom and restorethepremisesin 

## accordance withparagraph(i) 

## below,
TERMC SUPP 17


### 76

### ANA-1.7.058 

## ·.• ·' 

## ... 

# . '. 

### ,:


### . 

# .. :


### THIS SUPPLEMENTAL AGREEMENT SHALL NOT BE BINDING

UPON THE PORT AUTHORITY UNTIL DULY EXECUTED BY AN EXECUTIVE OFFICER THEREOF AND DELIVERED TO THE LESSEE BY AN AUTHORIZED REPRESENTATIVE OF 

# FILECOPY THE PORT AUTHORITY
Newark International Airport Lease No. ANA-170 Supplement No. 8
SUPPLEMENTAL AGREEMENT THIS AGREEMENT dated June 2, 1989 by and between THE PORT AUTHORITY OF NEW YORK AND NEW JERSEY (hereinafter called ''the Port Authority") and CONTINENTAL AIRLINES, INC., a corporation of the State of Delaware, having an office and place of business at Suite 1401, P.O. Box 4607, Houston, Texas 77210-4067, (hereinafter called ''the Lessee''), WITNESSETH, That: WHEREAS, the Port Authority and People Express Airlines, Inc. (hereinafter called "People Express'') as of January 11, 1985 

### entered into an agreement of lease (which agreement of lease as heretofore supplemented and amended is hereinafter called "the Lease"), covering certain premises, rights and privileges at and in respect to Newark International Airport (hereinafter called "the Airport'') as therein set forth; and WHEREAS, the Lease was thereafter assigned by said People Express to the Lessee pursuant to an Assignment of Lease with Assumption and Consent Agreement entered into among the Port Authority, the Lessee and People Express and dated August 15, 

### 1987; and WHEREAS, the Port Authority and the Lessee desire to amend the Lease in certain respects as hereinafter provided, NOW, THEREFORE, the Port Authority and the Lessee, for and in consideration of the covenants and mutual agreements hereinafter contained, hereby agree to amend the Lease, effective as of June 2, 

### :989, as follows: l. (a) In addition to the premises heretofore let to the Lessee under the Lease, lne letting as to which shall continue in full force and effect, the Port Authority hereby lets to the Lessee and the Lessee hereby hires and takes from the Port Authority the following:

- 1 -

# ANA-110S8

-. • ".·' I ' ' ' '' 

### ., 

### (i) The mechanical and utility room areas located on the Mezzanine Inter-Terminal Transportation level of Passenger Terminal Building C, which areas are shown in hatch on Exhibit AX attached hereto and hereby made a part hereof; (ii) The areas located on the Departure and Concourse/Concession Levels of Passenger Terminal Building C as shown in hatch and in stipple on Exhibit AX-1 attached hereto and hereby made a part hereof; (iii) The areas located on the Arrival Level of Passenger Terminal Building C as shown in hatch and in stipple on Exhibit AX-2 attached hereto and hereby made a part hereof; (iv) The areas located on the Operations Level of Passenger Terminal Building C as shown in hatch and in stipple on Exhibit AX-3 attached hereto and hereby a part hereof; (v) The crawl space areas in Passenger Terminal Building 

### C as shown in hatch on Exhibit AX-4 attached hereto and hereby made a part hereof; (vi) The two aircraft gate position areas, aircraft maneuvering areas and ramp and apron areas as shown in stipple and in hatch on Exhibit DX attached hereto and hereby made a part hereof (the foregoing aircraft gate position areas being sometimes referred to herein as the "Area D portion of Area C-3" under the Lease during the term of the letting of Area C-3 hereunder); together with the fixtures, improvements and other property, if any, of the Port Authority located or to be located therein or thereon, the said areas, fixtures, improvements and other property, if any of the Port Authority located or to be located therein or thereon, to be and become part of the premises under the Lease, as hereby amended, and are designated herein as and herein collectively called ''Area C-J'', let to the Lessee, subject to and in accordance with all the terms, provisions and convenants of the Lease as hereby amended for and during the term as set forth**b~low.** 

### The parties acknowledge and agree that the areas added to the premises pursuant to this paragraph constitute nonresidential real property. possession of the effective (b) If the Port Authority shall not give the areas described in subparagraph (a) above date set forth above by reason of the failure



## - 2

- on or

# . '., ' ;

**~** - 

### ,, ' ' 

## ' refusal of any occupant thereof to deliver possession thereof to the Port Authority or by reason of any cause or condition beyond the control of the Port Authority, the Port Authority shall not be subject to any liability for the failure to give possession on said date. No such failure to give possession on the date hereinabove specified shall in any wise affect the validity of this Agreement or the obligations of the

**Le~see** 

### hereunder, nor shall the same be construed in any wise to extend the term beyond the date stated in Paragraph 2 hereof. Tender shall be made by notice given at least five (5) days prior to the effective date of the tender. In the event that notice of tender of the said areas is not given for possession to commence on or before three hundred sixty-five (365) days after the effective date for the commencement of the letting thereof, then this Agreement with respect to the letting of the areas described in this Paragraph shall be deemed cancelled, except that each party shall and does release and discharge the other party from any and all claims or demands based on this Agreement, or a breach or alleged breach thereof. (c) The Lessee acknowledges that it has not relied upon any representation or statement of the Port Authority or its Commissioners, officers, employees and agents as to the suitability of the areas added to the premises pursuant to this Paragraph for the operations permitted thereon by the Lease and agrees to take the said areas and to use the same in their ''as is" condition at the time of the commencement of the letting hereunder. Without limiting any of the obligations of the Lessee under the Lease, the Lessee agrees that no portion of the premises under the Lease will be used initially or at any time during the letting thereof which is in a condition unsafe or improper for the conduct of the Lessee's operations under the Lease, as hereby amended, so that there is a possibility of injury or damage to life or property. 2. The term of the letting of Area C-3 hereunder shall commence on June 2, 1989 and, unless sooner terminated, shall expire on May 31, 1992. 3. (a) Area C-3 Annual Rental

- The Lessee agrees to pay to the Port Authority the following annual rental for the Area C-3 portion of the premises (hereinafter referred to as the "Area C-3 Annual Rental"): Commencing on June 2, 1989 to and including May 31, 1992 an Area C-3 Annual

- the annual



### - 3

-anal70suppl7-ex 

### 8 ofthe Lease, orwhich shall endanger any person orproperty therein orthereon; that theLessee expressly hereby assumes all risks in connection with its exercise ofsaid temporary right of access; and that nothing herein nor any Port Authority approval orrequirement given in connectionwith said temporary rightofaccess shallreleaseorrelievetheLessee from its obligations, liabilities and indemnities undertheLeaseorotherwise. (g) Withrespectto the portion ofAdded Area 1shown in diagonal hatchon Exliibit A-1 hereofandthe portion ofAdded Area 4 shown indiagonal hatch on Exhibit B-1, itis expressly understood and agreed thatthe same are letto the Lessee subject to the rightofthe Port Authority, its officers, employees, agents, representativesand contractors to enterupon the same at any time and from time to time to constructthereon and therein, and to maintain, all appropriateaccess stairways and otheraccess facilities (which shall not become partofthe premiseshereunder) suff1cientto provide ingress and egressto and from theparking garage structurepresentlycontemplatedby the PortAuthorityto be constructed in the area generally located in the front of, and outsideof, said portions ofthe premises; suchright ofentry for said purposes shall bedeemed included in and exercised pursuantto and in accordancewith Section 22ofthe Lease. Thereservation ofthe saidrightofentry and the exercisethereofby thePort Authority, its officers, employees,agents, representatives and contractors shallnotbe orbe construed to bean evictionofthe Lesseenorbe made the grounds for any abatement ofrental nor any claim ordemand for damages,consequential orotherwise. 2. (a) Effective as ofthe Effective Date, the term ofthe lettingofthe AreaC-3 portion ofthe premisesunderthe Lease, as said Area C-3 is defined in Paragraph l 

### of SupplementNo.8 ofthe Leaseand including the additional areas added orto be added to Area C-3 ofthe premisespursuantto subparagraph (a) ofParagraph 1above, is hereby extended for the period ending on March 31, 2028, unless soonertenninated, at the AreaC-3 rentals in accordance withParagraph 3belowand upon all the terms, covenants, provisions and conditions ofthe Lease, ashereby amended. (b) lt

### is expressly understood and agreed thattheextensionofthe term ofArea C-3 covered bythe foregoing subparagraph (a) ofthis Paragraph2 does not and shall notinclude the C-1 and C-2 portions ofthepremises(as defined above) orany otherpartofthe premisesor anyotherarea. It

### is also recognizedthat the expiration date ofthe letting ofall portions ofthe premises hereunder, other than AreaC-3, is and shall remain March31, 2013 as setforth in Section4 (b) 

### ofthe Lease as amended by paragraph 2ofSupplementNo. 7 ofthe Lease and that saidexpiration date is notbeing extendedby this Seventeenth SupplementalAgreement, and, further, that upon the said expirationdate ofMarch 31, 2013 the term ofthelettingunderthe Lease ofall portions ofthe premises hereunder otherthan AreaC-3 shall expire. 3. Paragraph 12 ofSupplement No.l5 ofthe Lease is hereby amended to read as follows:
"I. 

### It

### is hereby agreed that, from and after the Effective Date ofSupplementNo. 17 ofthe Lease (as said Effective Dateis setforth on the first pagethereof) and continuingupto and TERM CSUPP 17 

### 6ana170supp17-ex 

### (ee) for the portionofthe term ofthe letting ofArea C-3 from January 1, 2019 toDecember31,2023 at the daily rate of (ff) for the portion ofthe te1m ofthe letting ofArea C-3 from January 1,2024 to March31,2028 atthe dailyrate

**of~** 

### ...__ . (ii) withrespect to theAreaDportionofArea C-3 (as described inParagraph I (a) (vi) of SupplementNo.8 oftheLease): Any such abatement shall be made on anequitable basis giving effect to the amount and characterofthe said AreaD portion ofArea C-3 the use ofwhich is denied to the Lessee as comparedwiththe entire AreaC-3. Forthe purpose ofthis Agreement,themeasurement ofinterior building spaceintheaforesaidportion ofArea C-3shall be computed (i) from theinside surface ofouterwalls ofthe structureofwhichAreaC-3forms apart; (ii) from the center

### ofpartitions separatingAreaC-3 from areas occupied from orused by others.H


### 6. Thefollowing new Section93 shall be deemedinsertedafter Section 92A ofthe Leaseto read as follows: "Section93. TheExpansion Construction Workby theLessee (a) TheLessee shall,priortoits submissionto thePortAuthority oftheplans and specifications hereinafterprovided for, submit to the PortAuthority for its consent, theLessee's comprehensiveplanfor theExpansion Construction Work, as hereinbelow defmed, including but notlimitedto renderings, layouts, locations, models, estimated conunencementand completion dates, andpreliminary functional plans ('Comprehensive Plan'). TheLessee shallkeep the aforesaid Comprehensive Plan coveringall portions of theExpansionConstruction Workupto date and shall submitto thePortAuthority for its priorapproval anyamendments,revisions, ormodifications thereof, otherthan field changes (except field changesrelating to the relocation ofAdams Ditch and any work affecting theperipheral drainage ditch known as PeddieDitch.) (b) (!) 

### Without limiting the above, theLesseeagreesthat said ComprehensivePlan shallincludethe design andconstructionby the Lesseein, on and underthepremisesand offthe premises, whererequired, ofthe following:

TF,.RM C SUPP l7 

### l3

### ana170suppl7-ex 

### (i) 

### All construction andinstallation of, andotherappropriate, necessary orrequired work for, airline terminal facility capitalimprovementsto PassengerTerminal BuildingC tocomplete and decoratea completedpassenger concourse facility in Area C-3 ofthe premises (said AreaC-3 being definedin Paragraph I ofSupplementNo. 8ofthe Leaseand includingthe areas added to AreaC-3 pursuantto Paragraph 

## 1ofthe Seventeenth SupplementalAgreementtothe Lease) appropriate, necessary orrequired for theexpansionofall ofthe areas thereofand sufficientto handle both domesticand international airlinepassengertraffic, includingbutnot limited to the installation oflavatories, stairwells, stairways, escalators, elevators (includingfreight elevators)('AreaC-3 Concourse')and any alterations ofand additions to Passenger Terminal BuildingC required orappropriate inconnection with AreaC-3 Concourse, and includingwithout limitationan expansion ofthe portionofArea D located in AreaC-3 so as to add theretoa minimumoftwelve (12) new

**air~raft** 

### gate positions for wide bodied aircraft; (ii) Theconstructionand installation ofadditionsand modifications to the Fuel System (as defined

## in Section 54hereof), includingbutnot limitedto DistributionFacilities and TenninalDistribution Units(as suchtem1s are defined in Section54hereof)andundergroundpipelines, fuel mains, and stubs necessary orrequired to tie intothe Fuel System at the Airportto accommodateand serveArea 

### C-3 Concourse and all aircraft gate positions locatedorto be located thereat including without limitation all ofthe aforesaid new aircraftgatepositionstobe located inthe portion ofArea D locatedinAreaC-3, and also including all necessary, required, or appropriate work to make said additions and modifications fully operational as partofthe Fuel System; (iii) The construction and installationofa new baggagehandling system, including all related necessary orappropriate work, sufficientto handle the entire PassengerTerminal BuildingC includingConcourse C-1, Concourse C-2 and Area C-3 Concourse; (iv) Theconstruction and installationin theArea C-3 Concourseof, including all appropriate, necessary orrequired work for, United States government inspection areas (asdescribed in Section95 hereof) sufficientto handle therein atleast 1,500 

### internationalpassengersperhour (the 'FIS facilities'); (v) INTENTlONALLYOMITTED (vi) TI1e constructionand installationofall appropriate lines, pipes, mains, cables, manholes,wires, tubes, ducts, assemblies, conduits and other facilities required in connectionwithorrelating to the mechanical, utility, electrical, storm sewer, sanitary sewer, water, telephone, fire alarm, fire protection, gas, heating, ventilationand air conditioning, steam, drainage, refrigerating, conunw1ications, and othersystemsneeded for the Expansion Construction Workand necessary orrequired to tie the foregoing into the utility
TERM CSUPP 17


### 14

### anal70suppl7-ex



### access stubsnowexisting at orwithin the PassengerTerminal Building C, which include water, electrical power, and sanitaryservice lines, includingall necessary valves and otherequipment and accessoriesnecessary to theuse and operationof the heating, electrical,waterand otherutility systems which are to serve the premises; (vii) All necessary orappropriate tenninalfrontage improvements sufficient to align with the newroadway configurationplannedby the Port Authority for the CTA; airside groundroadways; airside ramps; and also sidewalks, vehicular service areas, andpedestrian circulation areas, togetherwith all relatedand associated areas and facilities; (viii) All grading andpaving ofgroundareas, including without limitation, all appropriate, necessary and required workfor the full-depth paving ofall unpaved potiions ofthe aircraftmaneuvering areas in theArea C-3 portion ofthepremises, and for the design and appropriatelandscaping togetherwith all related and associatedwork; (ix) All work necessary orrequired to constructadditional concession areas (as defined in Section 66 hereof) in the AreaC-3 Concourseto be madeavailable for consumerservices as morefully set forth in Section 66 hereofincluding the constructionand installation ofutility lines whichare to serve said concessionareas; 

### (x) All work necessary orrequired to tie intoPortAuthority supply lines for high temperaturehot water forheating and domesticusepurposes only and chilledwaterfor air-conditioningpurposes only, and in accordancewiththe requirements and specifications

## as set forth in Section49 hereof, includingall worknecessary or required to tie into the contemplated expansionofthe Port Authority's Central Heating andRefrigerationPlant (the "CentralPlant"); (xi) The grading andpaving withinAreaC-3 oftwelve 

### (12) aircraft gatepositions andaircraft ran1p and apronareas, all taxilanes and all associated and related areas and facilities (all ofthe foregoing to be andfonn

## part oftheArea

## Dportion ofArea C-3 underthe Lease); (xii) Construction and installationofall necessary orrequiredblast fences; (xiii) All otherappropriate ornecessary work in connectionwi.th or requiredbyorfor the foregoing includingwithout limitation all relamping in the premises, all painting, all borings, surveys,route markers, signs, obstructionlights and material inspections and all tie-ins to utility lines androadway access stubs;

n;RM CSUPP 17


### 15NEW ISSUE BOOK-ENTRY ONLY Ratings: See "Ratings" herein. In the opinion ofMcCarter&Eng/is·\ !.LP, BondCounsel to .theAuthority,,assuming

**crx,~,.p!iance** bythe New.)ersey Economic Development • Authority and Continental Airline.s_ Inc. with certain tax cpvenants descr(Qed ·,erefn, under existing law, interest on the Bonds Is

. excludedfrom thegross incotr·-· ofthe owners ofthe Bonds forfederalincome taxpurposespursuantto Section 103 ofthe Internal Revenue Code

# al-1.16, as ar;.ended {the "Internal Revenue Code''), eXceptas to interest on anyBond foranyperiod cfuring

._ --wti/C!Jsuch[Jondis e/dbyaperson who is eithera "substantia!user" (within the meaning ofSection 147(-?:) ofthe Internal 

### ' A'/IATlONRefMUPdode) fthe facilities financed with the proceeds of the Bonds ora "related person" ofsuch "substantial

\ **u~er".** Interestop the Bonds, however, Is an Item oftaxpreference underSection 57ofthe InternalRevenue Code for



# nll~ **f,** dbmputing alternative minimum tax imposed on individuals and corporations. Bond Counsel is 

# F \

L r (\ .h · h:\.?plnion that interest on the Bonds and any gain on the sale of the Bonds are excluded from 

# l

**r~** 

### l_ 1

# u.
s 

## core under the existing New Jersey Gross Income Tax Act. See "TAX MATTERS" herein.

. 

# l

. ')h... 

# u

**--·~\** $730,360,000

. ' New Jersey Economic Development Authority Special Facility Revenue Bonds {Continental Airlines, Inc. Project), Series 1999 Dated: September 15, 1999 Due as shown on the inside cover page hereto The Bondswill be issued in fully registered form in the name ofCede & Co., as nominee ofThe Depository Trust Comp8.ny ("DTC"). The ultimate purchasers of the Bonds will own them through the book-entry only system maintained by DTC. The Bonds will be issued in denominations of $5,000 and integral multiples In excess thereof. So long as Cede & Co. is the registered owner of the Bonds, the principal, purchase price and redemption price, if any, of and interest on the Bonds will be payable by Chase Bank of

**Texa~.** National Association, as trustee (the "Trustee"), to DTC. DTCwill in turn remit such payments to its participants for subsequent disbursement to beneficial owners of the Bonds, as more fully described herein. Interest on the Bonds is payable semiannually on each March 15 and September 15, commencing March 15, 2000. The Bondswill besubjectto redemption priorto maturity, andto mandatorytender priorto maturity, as morefully described herein. The Bonds are being issued by the New Jersey Economic Development Authority (the "Authority") to finance the design and construction ofcertain passengerterminal and related facilities (the ''Project'') for Continental'Airlines, Inc. at Newark International Airport (the ''Airport'') in NewJersey, includinga new passengerterminal to be known as ''Concourse C-3''.The Bondswill be issued asspecial, limited obligations ofthe Authority, payable from and secured by a pledge of certain receipts and revenues of the Authority, comprised of certain rental payments payable to the Authority pursuant to two

**L~ase** Agreements described herein between the Authority and 

# Continental Airlines
Continental Airlines, Inc. will unconditionally guarantee the payment to the Trustee of all amounts required for the full and prompt payment ofthe principal, purchase price and redemption price, ifany, ofand interest on the Bonds when due. Continental Airlines, Inc. will alsoenter intoaLeasehold Mortgagewith theTrustee, pledging totheTrustee its leasehold interestin the portion of the Project comprising Concourse C-3 as security for up to $550,000,000 of ,its payment ot obligations with respect to the Bonds. Other than the Leasehold Mortgage, the Bonds will not be secured byanyother Interest in the Projectorthe Leased Premises (as defined herein). Further, the Port Authority of New York and New Jersey, as operator of the Airport, will not have any obligation whatsoever with respect to the Bonds. THE STATE OF NEW JERSEY IS NOT OBLIGATED TO PAY. AND NEITHER THE FAITH AND CREDIT NOR TAXING POWER OF THE STATE OF NEW JERSEY IS PLEDGED TO THE PAYMENT OF THE PRINCIPAL. PURCHASE PRICE OR REDEMPTION PRICE, IF ANY, OF OR INTEREST ON THE BONDS. THE BONDS ARE SPECIAL, LIMITED OBLIGATIONS OF THE AUTHORITY, PAYABLE SOLELY OUT OF THE REVENUES OR OTHER RECEIPTS, FUNDS OR MONEYS OF THE AUTHORITY PLEDGED UNDER THE INDENTURE DESCRIBED HEREIN AND FROM ANY AMOUNTS OTHERWISE AVAILABLE UNDER THE INDENTURE FOR THE PAYMENT OF THE BONDS. THE BONDS DO NOT NOW AND SHALL NEVER CONSTITUTE A CHARGE AGAINST THE GENERAL CREDIT OF THE AUTHORITY. THE AUTHORITY HAS NO TAXING POWER. AN INVESTMENT IN THE BONDS INVOLVES SIGNIFICANT RISKS. For more complete information with respect to the security

. and sources of payment for the Bonds and certain risks with respect thereto, see "SECURITY FOR THE BONDS" and "CERTAIN

BONDOWNERS• RISKS" herein. AMOUNTS, MATURITIES, INTEREST RATES AND PRICES (ON INSIDE COVER) This coverpage contains certain information for quick reference only. It is not-intended to be a summary ofall factors relating to an investment in the Bonds. Investors should read this Official Statement in its entirety before making an investment decision. The Bonds are offered when, as and if issued by the Authorityandaccepted by the Underwriters, subject to priorsale, or withdrawal or modification of the offer without notice, and subject to the approving legal opinion ofMcCarter & English, LLP, Newark, New Jersey, BondCounselto theAuthority. Certain legal mattersw/1/bepassed upon forContinentalAirlines, Inc. byJefferyA. Smisek, its Executive Vice PresidentandGeneralCounsel, andbyits specialcounsel, Jones, Day, Reavis& Pogue; and forthe Underwriters bytheircounsel, O'Mefveny&Myers LLP. The Bondsare expectedto be available fordelivery through the facilities ofDTC in New York, New York, on orabout September22, 1999. 

# Goldman, Sachs & 

# Co. Merrill Lynch & 

## Co. Apex Securities Inc.

a division ofRice Financial Products Company 

### CIBC World Markets Corp. J.B. Hanauer & Co.

September 15, 1999 

## Salomon Smith Barney Bane of America Securities LLC Chase Securities Inc. Gibraltar Securities Co. Lehman Brothers

# I

t 

# i i I


# I 

# i $730,360,000 New Jersey Economic Development Authority Special Facility Revenue Bonds (Continental Airlines, Inc. Project), Series 1999 $100,275,000 6.625% Term Bonds due September 15, 2012 priced 

### at 105.579% (approximate yield 6.00%) 

### $184,195,000 6.25% Term Bonds due September 15, 2019 priced 

### at 98.320% (approximate yield 6.40%) 

### $146,480,000 6.40% Term Bonds due September 15, 2023 priced 

### at 99.392% (approximateyield 6.45%} 

### $299,410,000 6.25% Term Bonds.due September 15, 2029 priced 

### at 97.359% {approximateyield 6.45%)l ._, 

## ,. ' Investors should rely only on the information contained in this Official Statement No one has been authorized to give any different information or to make any other representations. Neither the delivery of this Official Statement nor any sale hereunder shall under any circumstances create any implication that there has been no change in the affairs of the New Jersey Economic Development Authority or Continental Airlines, Inc. since the date hereof. These securities are not be.ing offered in



### a~ystate where the offer is not permitted.The New Jersey Economic Development Authority neither has nor assumes any responsibility as to the accuracy of the information in this Official Statement (other than ihat under the headings "THE AUTHORITY" and '.'NO LITIGATION" (as it relates to the New Jersey Economic Development Authority), for which the New Jersey Economic Development Authority,..assumes full and sole responsibility). ·· IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVERALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF ANY OF THE SECURITIES OFFERED HEREBY AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME. THE BONDS HAVE NOT BEEN REGISTERED UNDER THE



### SECURITIE~ ACT OF 1933: AS AMENDED, NOR HAS THE INDENTURE BEEN QUALIFIED UNDER THE TRUST INDENTURE ACT OF 1939, AS AMENDED, IN RELIANCE UPON EXEMPTIONS CONTAINED IN SUCH ACTS. THE REGISTRATION OR QUALIFICATION OF THE BONDS IN ACCORDANCE WITH APPLICABLE PROVISIONS OF SECURITIES LAWS OF THE STATES IN WHICH THE BONDS HAVE BEEN REGISTERED OR QUALIFIED AND THE EXEMPTION FROM REGISTRATION OR QUALIFICATION'IN OTHER STATES CANNOT BE REGARDED AS A RECOMMENDATION THEREOF. IN MAKING AN INVESTMENT DECISION, INVESTORS SHOULD RELY ON THEIR OWN EXAMINATION OF THE TERMS OF THIS OFFERING, INCLUDING THE MERITS AND RISKS INVOLVED. NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED THESE SECURITIES OR DETERMINED IF THIS OFFICIAL STATEMENT IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

# i I

# I !

I 

# I, TABLE OF CONTENTS Page INTRODUCTION

.. : .
. , ...........................: .... ; ......................., . . . . . . . . 1 THE AUTHORITY.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 THE AIRPORT

.·. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 General
......... : .........................· ......... :. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Continental's Operations at the Airport. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 THE PROJECT.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Project Description ....................................-. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Project



### Stat'~s ....., ........... , . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 APPLICATION OF BOND PROCEEDS.................................................... 10 SECURITY FOR THE BONDS .·. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

The Trust Estate ............ :
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 Principal Source of Payment- Payments of Facility Rent by Continental
....... , . . . . . . . . . . . 10 Guaranty
......._.··_..· ..._ .•. :
.. ., . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 Leasehold Mortgage



## andH~Ietti~g ................, . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 Additional Bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 ANALYSIS OF POTENTIAL GATE DEMAND................................................ 18 CONTINENTAL AIRLINES, INC

....:
. ., . . . . .. . .. . .. ... . . .. .. . . ... .. .. .. .. . ... . . .. . .. . . . . . 18

Continental

. . .. .. . . .. . .. . . . . .. .. . . . . . . .. . ... . . .. . .. ... . . . .. .. . . . .. . .. . . .. . .. . .. . . . . . 18 Additional Information

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 THE BONDS .................................................., . . .. . .. . . . . . . . . . . .. . . .. 21 General............................................................................ 21 Interest Rate Adjustment

. . . .. .. . . ... . . .. .. .. .. . .. . . . . .. . . . ... .. .. . .. .. . . .. .. . . . . .. . . . 23 Book-Entry-Only System

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 Mandatory Sinking Fund Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 Optional Redemption

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 Extraordinary Optional Redemption

.. . . . . . . .. .. . .. . . . . ... . . . .. .. . . .. . .. . .. .. . .. . .. . . .. . 27 Extraordinary Mandatory Redemption with Respect to Port Authority Leases and Lease

Agreements

.. . . ... . . ... .. . .. . . . .. . .. . . . . . .. . . .. . . . .. . . .. .. .. . . .. . .. . .. . .. . ... . . .. 27 Special Redemption Upon a Determination of Taxability

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28 Extraordinary Mandatory Redemption by the Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 Extraordinary Mandatory Redemption upon Exercise of Purchase Rights by the

Port Authority

. . .... . . .. . . . . . . .. .. . . .. .. . . . . .. .. . . ... . . ... .. . ... .. . . . . . . . . . .. . . . . . . 30 Selection of Bonds to be Redeemed ..................................:. . . . . . . . . . . . . . . . 30 Notice of Redemption

.. . .. . . ... .. . . . . . .. ... .. . . . .. .. ... . . . . . . .. . . .. . . . . . . .. . . . .. . . . .. 30 Mandatory Tender of the Bonds....................................................... 31 CERTAIN BONDOWNERS' RISKS........................................................ 32

Obligation of Continental as Primary Security; Certain Risks with Respect to Continental

. . . . . 32 Risk Factors Relating to Continental

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32 Risk Factors Relating to the Airline Industry.

. ..... . . . .. . . . . . .. . . . .. ... . .. .. . .. . . . . .. . . . 35

### .

### ' Certain Considerations Under the United States Bankruptcy Code with Respect to the Lease Agreements and the Guaranty ...................................................... Limitations Upon Trustee's Ability to Accelerate Facility Rent ............................. Limitations Upon Trustee's and Bondholders' Ability to Realize Benefits of the Leasehold

Mortgage........................................................................
. No Direct Interest in Project Insurance or Similar Proceeds ............................... Effect on Bonds of Merger or Other Corporate Reorganization of Continental; Absence of

Certain Covenants ................................................................. Possible Loss ofTax-Exempt Status of Interest on Bonds ................................ NO l.ITIGATION ......................................................................
. RATINGS ............................................................................
. AVIATION DEMAND CONSULTANT ...................................................... UNDERWRITING .....................................................................
. CONTINUING DISCLOSURE ............................................................ TAX MATIERS .......................................................................
. Exclusion of Interest on the Bonds from Gross Income for Federal Income Tax Purposes

.... . Tax Treatment of Original Issue Discount ............................................... Additional Federal Income Tax Consequences .......................................... State of New Jersey Taxation ......................................................... OTHER LEGAL MATIERS .............................................................. MISCELLANEOUS ....................................................................
. APPENDIX A AVAILABILITY OF CERTAIN INFORMATION RELATING TO CONTINENTAL AIRLINES, INC. APPENDIX B FORM OF OPINION OF BOND COUNSEL APPENDIX C SUMMARY OF CERTAIN PROVISIONS OF THE CONTINUING DISCLOSURE AGREEMENT APPENDIX D SUMMARY OF CERTAIN PROVISIONS OF THE PRINCIPAL LEGAL DOCUMENTS The Leases The Guaranty The Indenture APPENDIX E ANALYSIS OF POTENTIAL GATE DEMAND



### ii 

### 36 

### 37 37 40


### 41 41 42 42 42 42 42 43 43 43 43 44 

### 44 44



### . ;

### $7~0,360,000 

# New Jersey Economic DevelopmentAuthority Special Facility Revenue Bonds (Continental Airlines, Inc. Project), Series 1999
INTRODUCTION This Official Statement, including its cover page and Appendices, provides information in connection with the issuance and sale by the New Jersey Economic Development Authority (the "Authority") of $730,360,000 aggregate principal amount of its Special Facility Revenue Bonds (Continental Airlines, Inc

.. Project), Series 1999 (the

**"Bon~s';l-** The Authority is a public body corporate and politic, constituting· an.instrumentality of thy State of New Jersey. See "THE AUTHORITY" herein.

. .

' ·"--: '' ; . . .

· •.• The Authoritywill issuethe Bonds pursuant to an Indenture of Trust dated as ofSeptember 1, 1999 (the "Indenture"), between the Authority and Chase Bank of Texas, National Association, as trustee (the!'Trustee"). The proceeds of the Bonds will be used (a) to-finance the design and construction of certain terminal and related facilities and equipment (the "Project") for Continental_ Airlines, Inc. ("Continental") at Newark International Airport ·(the "Airport") in Newark and Elizabeth, New Jersey, including the construction of a new 12- to 19-gate (depending on aircraft size) passenger concourse (''Concourse C-3'') adjoining Continental's existing passengerterminal facilities at the Airport, as well as certain upgrades and improvements to Continental's existing passenger terminal facilities in Concourses C-1 and C-2 at the Airport and certain improvements to other existing passenger terminal facilities in Concourse A-2 at the Airport to be used by Continental, and (b) to fund capitalized interest and to pay certain costs of issuance. The Airport serves as one of Continental's principal domestic airport hubs. See "THE PROJECT", "APPLICATION OF BOND PROCEEDS", "THE AIRPORT- Continental's Operations at the Airport" and "CONTINENTAL AIRLINES, INC.- Continental" herein. The Airport is operated by the Port Authority of New York and New Jersey, a body corporate and politic, established by a compact between the States of New York and New Jersey with the consent of the Congress ofthe United States (the ''Port Authority''). The Port Authority leases a portion of the real propertyand improvements constituting the Airport from the Cityof Newark, NewJersey ("Newark"), its fee ownec. pursuantto an Agreement of Lease dated October 22, 1947, as amended and supplemented,. byand between N.ewark, as lessor, and the Port Authority, as lessee (the "Basic Lease").The remainder of the Airport, which is located in Elizabeth, New Jersey, is owned by the Port Authority. The current expiration dateofthe Basic Lease is December 31, 2031, although itmay be subjectto earliertermination in certain Circumstances
. ._ The Project will be located at the Airport on two separate sites subleased to Continental by the Port Authority pursuant to the following leases:
• Agreement of Lease (Lease No. ANA-170) dated as of January 11 , 1985, as amended, covering Continental's use and occupancy of Concourses C-1 and C-2 and the new Concourse C-3 at the Airport (as amended, the "Terminal C Facility Lease"), and Amended arid Restated Agreement of Lease (Lease No. ANB-056) dated as of August 1, i999, as further amended, covering Continental's use and occupancy of Concourse A-2 at the Airport (as amended, the "Terminal A Facility Lease", and together with the Terminal C Facility Lease, the "Port Authority Leases"). Continental ·currently occupies and uses Concourses C-1 and C-2 at the Airport pursuant to the Terminal C Facility Lease;which originally became effective in 1985. Prior to the issuance of the Bonds,



### 1Continental and the Port Authority will amend the.Terminal C Facility Lease sothat it also governs the use and occupancyofthe new Concourse C-3-to be constructed"as part of the Project. Continental and the Port Authority'

# havil'

**reach~a** agreeme'Ki\upon ·and finalized the terms of that amendment Approximately 96

..3% of the available proceeds of the· Bonds,are expected ·to be used to finance the portion of the Project consisting of the' construction of the new Concourse C-3 .and upgrades and improvements to Concourses C-1 and C-2. Continental and the Port Authority have also executed the Terminal A Facility Lease. Approximately 3J%ofthe available proceeds ofthe Bonds are expected to be used to finance the portion ofthe Project consisting of improvements to Concourse A-2_ ·



### - lnconnection With the Project, Continental and the Authority will enter into (1) a Lease Agreement (Concourse C-3) dated as of September 1, 1999 (the "Concourse C-3 Lease Agreement") and (2) a Lease Agreement (Concourse C-1, C-2 and A-2) dated as of September 1, 1999 (the "Concourse A-2/ C-1IC-2-Lease Agreement", and -together with the Concourse C-3 Lease Agreement, the "Lease Agreements"), pursuant to which Continental will .sub-sublease to the -Authority (the "Authority Sublease"), and theAuthority will sulrsub-subleaseback to Continental {the "Continental Sublease"), Continental's interest in the premises covered by the'Port Authority Leases, including the Project (the '.'Leased Premises"). Also underthe Lease Agreements, the Authority will lease to Continental up to $10.,000,000 of equipment and other personal property:to be financed with the proceeds of the Bonds (the "Leased Personal Property").:In exchange for its right to sub-sub-sublease .the Leased- Premises and to lease the Leased Personal Property from the Authority, Continental will make rental payments to the Trustee, as assignee oftheAuthority, in an amount which is sufficient to pay when due the principal, purchase price and redemption price, ihmy, of and interest on the Bonds (the "Facility Rent"). Continental will also be required topaytheleesof theTrustee and thefees and expenses ofthe Authority in connection with the Project (the "Additional Rent"). See "THE LEASES" in Appendix D hereto

.. The Bonds will be issued as special, limited obligations of the .Authority, payable from and secured by a pledge of certain receipts, funds and revenues of the Authority, including the Facility .Rimt payable by Continental under the Lease AgreemenJs, and certain other moneys pledged. therefor under the Indenture. Pursuant to the Indenture, the Authority will assign and pledge to the Trustee substantiallyall of its rights and interests in connection with the Continental Sublease underthe Lease Agreements, inCluding its right to receive Facility Rent thereunder",''to secure the payment of the Bonds. Pursuantto·a GuarantyAgreement dated as of September 1, 1999 (the "Guaranty"), byand between Ccintiriental and theTrustee, Continental will unconditionally guaranteethe payment tothe Trustee ofall amounts 'required for thefull and prompt payment when due ofthe principal, purchase price and redemption price, ifany, of and interest on the Bonds. As security for up to $550,000,000 of its payment obligations under the Guaranty, Continental will also grant to the Trustee a leasehold mortgage interestjn its rights under the Terminal C Facility Lease and Concourse C-3 Lease Agreement:relating t.o ·the portion of the Project comprising Concourse C-3 pursuant to a Leasehold Mortgage dated as of September 1, 

### i 999 (the "L:asehold Mortgage"), by and between Continentaland theTrustee. · The Port Authority will consent to the Lease -Agreements and to· the Leasehold Mortgage in a Consent to Subleases and Leasehold Mortgage Agreement,

**dat~_d** as of Septell)ber.J, .1999, among the Port Authority, Continental,theAuthority and theTrustee{the ''Consent"):The terms ofthe Consent are described in.greater detail underthe heading ''Tf:iE,LEASES



### ~Gons"-0t of Port Authority" in Appendix D

**~~-** 

### .. . . . . ' Besides the Leasehold Mortgage, the Bondswill not be secured by any other interest in the Project or the Leased Premises, or by any other_property, including any leasehold. interest or other interest of the Port Authority in the Project or the Leased Premises, or by any revenues derived by the Port Authority from the operation of the Airport or otherwise. Further, none of Newark, Elizabeth and the PortAuthority shall have any obligation whatsoeverwith respecttothe Bonds. 

### 2THE STATE OF NEW JERSEY IS NOT OBLIGATED TO PAY, AND NEITHER THE FAITH AND CREDIT NOR TAXING POWER OFTHE STATE OFNEWJERSEY IS PLEDGED TO THE PAYMENT OFTHE PRINCIPAL, PURCHASE PRICE OR REDEMPTION PRICE, IF ANY, OF OR INTEREST ON THE BONDS.THE BONDS ARE SPECIAL, LIMITED OBLIGATIONS OFTHE AUTHORITY, PAYABLE SOLELY OUT OF THE REVENUES OR'OTHER RECEIPTS, FUNDS OR MONEYS OFTHE AUTHORITY PLEDGED UNDER·THE INDENTURE AND FROM ANY AMOUNTS OTHERWISE AVAILABLE UNDER THE INDENTURE FOR THE PAYMENT OF THE BONDS. THE BONDS DO NOT NOW AND SHALL NEVER CONSTITUTE A CHARGE AGAINSTTHE GENERAL CREDIT OF THE AUTHORITY. THE AUTHORITY HAS NO TAXING POWER. AN INVESTMENT IN THE BONDS INVOLVES SIGNIFICANT RISKS. See "SECURITY FOR THE BONDS" and :'CERTAIN BONDOWNERS' RISKS" herein, The Bonds will be issued in fully registered form·in the name of Cede & Co., as nominee of The Depository Trust Company ("DTC"). The ultimate purchasers of the Bonds will own them through the book-entry only system maintained by DTC. The Bonds will be dated September 

### 15, 1999, and initially will bearinterestatthe rates setforth on the inside cover pageofthis Official Statement, payable on each Mwch 

### 15 and September 

### 15, commencing March 

### 15,2000.The final maturity date for the Bonds will be September 

### 15, 2029, and the Bonds'will be subject to redemption (in whole or in part) priorto 'maturity as described herein, including; in certain circumstances, required mandatory redemption upon the expiration, surrender ortermination of eithertheTermiri&l C FacilityLease orthe Terminal A Facility Lease (both of wh'1oh have terms which do not extend through the final stated maturity of the Bonds)

. In addition, on or after September 

### 15, 2009, the Bonds (except for the Term Bonds maturing September 

### 15, 2012) may be subject to mandatory tender and a change in interest rate(s). See "THE BONDS- Interest Rate Adjustment" and "-Mandatory Tender of the Bonds" herein. Coniinental files reports and other information with ·the Securities and Exchange Commission. Certain information with respect to Continental is furnished fn this Official Statement and in Appendix A hereto and incorporated in this Official Statement by reference from materials·on file with the Securities and Exchange Commiseion. The information incorporated by reference is considered to be part of this Official Statement. See "CONTINENTALAIRLINES, INC.'' herein and Appendix A- Availability of Certain Information Relating to Continental Airlines, Inc. The information incorporated by reference in Appendix A and under the head'1ngs"CONTINENTAL AIRLINES, INC.'.' and "CERTAIN BONDOWNERS' RISKSObligations ofContinental as ·Primary Security; Certain Risks with Respectto Coniinental- Risk Factors Relating to Continental" and "-Risk Factors Relating to the Airline Industry" has been provided by Continental and has not been independently verified by the Authority or Goldman, Sachs & Co., as representative of the Underwriters. Neither the Authority nor the Underwriters make any representations or warranties, express orimplied, as to the accuracy or completeness of such information. In addition, certain information with respect to the Authority is furnished herein under the captions "THE AUTHORITY" and "NO LITIGATION". The Authority provided such information, and such information has not been independently verified by Continental.or the Underwriters, and neither Continental nor the Underwriters make any representations'or warranties, express or implied, as to the accuracy or completeness of such information. Further, in connection wi\h the issuance and sale of the Bonds, Continental will agree to provide certain annual financial information and notices of the occurrence of certain events, if material. See "CONTINUING DISCLOSURE" herein.

. . Continental .has also retained as its consultant Leigh FisherAssociates ("Leigh Fisher") to consider and assess in connection with the offering and.sale ofthe Bonds Continental's role at the Airport and the potential demand for the Concourse C-3 terminal facilities should Continental's operations at the Airport be discontinued or substantially reduced. A complete copy of Leigh Fisher's report entitled "Analysis of Potential Gate Demand" is included as Appendix E hereto.



### 3 

### i 

## f ! 

# lThis Official. Statement contains.certain information and descriptions relating to Continental, the Authority, the Project; the Basic Lease, the Port Authority Leases, the Bonds, the Lease**Agreements,,.th.~** Guaranty, the Leasehold Mortgage,a·continuing disclosure agreement and.the Indenture

..Such information and descriptionsare notcomprehensiv(l and may not include all of the information that investors m<>y believe is important. "Prospective investors should read all of these documents carefully·before deciding to invest in the Bonds. Copies of all of these documents are available· from Continental and the Underwriters during the initial offering period, and all references to any of the Bonds are qualified in their entirety by reference tothe definitiveform thereof and thejnformation with respectthereto included in the aforesaid documents. The foregoing Introduction contains only a brief summary of .certain information contained in this Official Statement. It is not intended to be complete and is qualified by the more detailed information contained elsewhere in this Official Statement.

THE AUTHORITY The Authority was established in 

## 1 974 as· a public body corporate and politic, constituting an instrumentality of the State of New Jersey pursuantto the New Jersey Economic Development Authority Act (the "Act"). The Authority's offices are located 'at 36 West State Street, Trenton, New Jersey

. ••!

. . •'

. '

- The Act authorizes the Authority to. finance or aid in financing the acquisition,. construction, reconstruction, repair, alteration, improvement and extension of any building, structure, facility or other improvement, the purchase and installation of equipment and machinery, and the acquisition and improvement of real estate and the extension or provision o( utility services, access roads or other appurtenant facilities to be used by or provided for employment-promoting enterprises, either for the manufacturing, processing or assembly of materials or products, orfor research or office purposes, or to reduce, ·abate or prevent environmental pollution derived from the operation of industry, utilities and commerce within the State of New Jersey. These include, but are not limitedto, pollution control facilities, medical and other professional facilities, industrial, recreational, hotel and motel facilities, public utility or warehouse uses and commercial and service enterprises. The Authority may finance any such project after making a finding that the financing will tend to maintain or provide gainfui employment for the inhabitants of the State of NewJersey, will tend to aid,·assist orencourage the economic development or redevelopment of any·political subdivision of the State of New Jersey, will maintain or increase the tax base of the State of New Jersey or any political subdivision ofthe State of New Jersey, or will maintain or diversify and expand employment promoting enterprises in theState of NewJersey. In order to discharge its responsibilities and fulfill those purposes mentioned above, the Authority is authorized to offervarious financing plans to applicants and to issue and sell bonds and notes for these purposes (including the Bonds described herein). · :• .i The Act provides that neitherthe members of the Authority nor any person executing bonds or notes issued pursuant to the Act shall be liable personally on such bonds or notes by reason of the issuance thereof, and that bonds or otherobligations issued bythe Authority pursuanttotheAct shall not be in any way adebt or liability ofthe State of New Jersey orofany political subdivision.thereof and shall not create or. constitute any indebtedness, liability or obligation of the .State of New J!lrsey or ·any political subdivision thereof, either legal, moral or otherwise. The Act further provides that nothing contained therein shall be construed to authorize the Authority to incur any indebtedness on behalf of or in any way
. obligate the State of New Jersey or any political subdivision thereof. The Bonds will be special, limited obligations of the Authority as described under the caption"SECURITY FOR THE BONDS" herein. The Authority consists often members and three alternate members. Of the ten members, the Chief Executive Officer ofthe New Jersey Commerce and Economic Growth Commission, the Commissioner of Labor, the Commissioner of Banking and Insurance and the State of New Jersey Treasurer are ex-officio members and the remaining six are public members appointed by the·Governor, with the advice and consent of the Senate, all for terms of three years. Anthony 

### R. Coscia is a public member and the Chairman ofthe Authority. Ofthe six public members, one public member (who shall not be a legislator) 

### 4 Lis appointed bythe Governor upon the recommendation of the Senate President, and one public member (who shall. not be a legislator) is appointed bythe Governor upon the recommendation ofthe Speaker of the General Assembly. Three alternate members are appointed by the Governor with the advice and consent of the Senate. Of the three alternate members, one alternate member (who shall not be a legislator) is appointed by the Governor upon the recommendation of the Senate President, and one alternate member (who shall not be a legislator) is appointed by the Governorupon the recommendation of the Speaker of the General Assembly. The executive staff of the Authority includes professionals in the fields of industrial and commercial development and management, finance and mortgage lending. The Executive Director ofthe Authority is Caren S. Franzini. The Authority does not represent or warrant in any way as to the accuracy or completeness of any information in this Official Statement, including the Appendices hereto, other than the information concerning the Authority underthe caption "THE AUTHORITY" and underthe caption "NO LITIGATION" (as it relates to the Authority) herein.

THE AIRPORT
General The Airport is located approximately 5 miles south of downtown Newark and is the largest (in terms of enplaned passengers) of the three major commercial airports serving the metropolitan New York area (i.e., the Airport, La Guardia Airport and John F. Kennedy International Airport).The Airport's passenger terminal facilities consist of three terminal buildings with approximately 94 jet aircraft gates. As of August 1, 1999, the Airport was served by approximately 51 passenger airlines, including 14 major and national airlines, 29 non-U.S. flag airlines and seven regional and commuter airlines. The Airport is also served by.various charter passenger airlines and all-cargo airlines. Approximately 32,512,106 passengers used the Airport in 1998 (an increase of 5.2% over 1997), making itthe eighth largest commercial airport in the United States in terms of passenger traffic, according to the Airports Council International.
Continental's Operations at the Airport The Airport is the second largest hub (in terms of enplaned passengers) in Continental's route system, alter Houston's George Bush Intercontinental Airport ("Bush Intercontinental"). As ofAugust 1, 1999, Continental together with its wholly owned subsidiary, Continental Express, lric. ("Express"), operated approximately 369 flights daily from the Airport, or 60% of the Airport's average daily departures.As of August 1, 1999, approximately 38% of Continental's total scheduled flights and 50% of Continental's total capacity (as measured by available seat miles) were conducted at the Airport. The drawing on the following page shows each of the rion-stop markets served by Continental and Express from the Air[iort as o.f August 1, 1999.



### 5...Continental'sNewarkHub(J)----·-"-·--.---.·-...TakyoHonoluluContinentalExpress'NewarkHubQuebec'...•HJ'fJ,'a1axPovt(and..::_;,(\!·,;·'··I1...Manchester-/l,..,..Vineyard•1'1)'N:antucket\L.NewarKY:..:/··ProvtdenceMllwliukee,:.-\\......,.-....RarrlsburgP.hJladelphla\•·EfaHI.more\(.----,:l..St.Louis\-......_.-CmQinna1:tWashington/DullesiI,...RIChmp"nd•.NrlJkLou(§;_vilfe•)../00•rK·-···-Gr;;;lf(ef---,Cha,fldue;_______,.Spattahb,-•'-r:-'."SeasonalService1·\oru'blaB!rmingharh•\,/YSavannah'.'·\..,I";'J>······Lima\\-J......._\-·ToIiJt'•;Continental11.EffectiveAugust1,1999........!daJanalroContinental currently uses 46 jet gates at the ·Airport, includingall of Terminal C and portions of Concourse A-2, and uses certain common 'use gates 

### at Terminal B·for international flights. Continental also maintains afiight kitchen, cargo lacilitles,.-aircralt maintenance'facilities and a training facility ·at the Airport. Continental employs more than 11

### ,ODD people in the Newark./New York metropolitan area.
THE PROJECT Project Description

. . . . : "'· ; . .:0'· The Project consists of the construction of a new approximately 325,000 square foot concourse·with 12 to 19 gates (depending on typeol aircraft) capable of handling domestic or.internationalllights and related· facilities at ConcourseC-3; · · • the construction of a new Terminal C Federal Inspection Services ("FIS") facility with capacityto

handle 1,50.0 arriving international passengers per hour;
• the construction of a new approximately 112,000 square foot baggage handling and sortation

facility for Terminal C;
• the renovation and mod'1flcation of the existing concourses and support areas at Concourses C-1

and C-2 and related improvements thereto, including the renovation of Continental's Presidents' Club; the renovation of public restrooms; modifications designed to improve passenger fiow; the refurbishing of elevators; the relocation of adm-Inistrative offices; the renovation of flight attendant crew areas; the modification 

### ol baggage claim areas; the installation of preconditioned air units at · certain jet bridges; the construction of an international ticket counter and bag systems; the reconfiguratlon ofthe lobbyto expand electronic ticket processing capabilities; the construction of a ramp control tower to facilitate the efficient movement of aircraft; and the renovation of ramp level airport service facilities; and the renovation and modification of gates in Concourse A-2 to provide a total of live gates tor Continental, includ'1ng for all the aforesaid the purchase and installation of machinery and equipment, all located orto be located in eitherthe City of Newark, County of Essex, New Jersey or the City of Elizabeth, County of Union, New Jersey. Among otherthings, the Project will expand Continental's capacity at the Airport through the ability to handle larger aircraft and will facilitate the further development of the Airport as an efficient international hub for Continental. In connection with Continental's development and growth plans atthe Airport, including the Project, the Port Authority will also invest up to $200 million lor the construction of a new parking garage and additional traffic lanes at Terminal C. This investment by the Port Authority is not part of the Project. Project Status Continental has retained Skidmore, Owings & Merrill Architects, PA, in partnership with TAMS Consultants, Inc. to serve as its lead architects and JA-Jones GMO asthe construction manager on the Concourse C-3 development. Design is approximately 45% complete tor Concourse C-3, approximately 30% complete tor the Terminal C FIS facility and approximately 35% complete for the Terminal C baggage facility. Site preparation is underway, and construction of Concourse C-3 and the FIS facility is expected to be completed byApril 2002. Construction of the Terminal C baggage facility is expected to be completed by June 2001.


### 7 

## ,, 

# J IContinental has retained URS Greiner/Woodward-Ciyde to serve as,its lead architect and Tisliman Construction Corporation as the construction manager on the Concourse A-2 development. Design for the Concourse A-2 project is approximately 50% complete: Site preparation is underway, and the renovation of Concourse A-2 is expected to be completed by Januaryc2001. , The miscellaneous improvementsto Concourses C-1 and C-2 are eithercomplete or are expected to be completed on various dates through October 2001. Continental expects that all design and construction costs for the Project will be financed with proceeds of the Bonds. Continental further believes that each element of the Project .fa) cari be constructed at or below the estimated costs therefor, (b) can be comr>lete_d wiJhin the estimated construction schedule, (c) contains only proven technology elements and 0(d).will constitute fully functional airport facilities when completed. The diagram on the following page shows the approximate location and major elements of the Project.



### 8"' Continental Airlines Newark Hub Expansion

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### .f

......· .................. SECURITY FOR THE BONDS

. The Trust Estate $622,373,865.37 94,749,350.12

6,938,634,26 6,29s.1so:2s· ·· $730,360,000.00

Pursuant to the Indenture, the Authoritywill irrevocablyassign and pledgeto theTrustee, as security forthe Bonds, certain of its interests in the Continental Sublease underthe Lease Agreements, including its right to receive payments of Facility Rentfrom Continental in an amount sufficientto paythe principal, purchase price and redemption price, ifany, ofand intereston the Bonds.TheAuthority will retain only its rights to (a) release and indemnification, (b) receive payment of certain costs and expenses, (c) enforce certain public purpose covenants undertaken by Continental pursuant to the Lease Agreements, (d) receive certain notices and reports or obtain information pursuant to the Lease Agreements and (e) exercise certa'1n rights and remedies, including, without limitation, the right to require an extraordinary mandatory redemption of Bonds in certain circumstances. See "THE BONDSExtraordinary Mandatory Redemption by the Authority" below. All moneys and securities received bythe Trustee underthe Indenture and held bytheTrustee in the funds established thereunder (otherthan the Rebate Fund and the Bond Purchase Fund) are pledged as security for repayment of the Bonds. In this regard, the Indenture establishes a Construction Fund, a Capitalized Interest Fund and a Debt Service Fund into which certain proceeds of the Bonds will be deposited upon issuance. See "APPLICATION OF BOND PROCEEDS" above and "THE INDENTURE" in Appendix D hereto. Besidesthe Leasehold'Mortgage described underthe heading "- Leasehold Mortgage aiid Reletting" below,the Bondswill notbe.secured byanyotherinterestinthe Projectorthe Leased Premises, by any other property,-

**includin~(any** leasehold interest or other inter,est of the Port Authorityinthe Project-Orthe Leased Premises, orby any revenues derived bythe PortAuthority from the operation ofthe Airport or otherwise. Further, none of Newark, Elizabeih and the Port Authority shall have any obligation whatsoever.with respect to the Bonds. THE STATE OF NEW JERSEY IS NOT OBLIGATED TO PAY, AND NEITHEHTHE FAITH AND CREDIT NOR TAXINGPOWER OF THE STATE OF NEW JERSEY IS PLEDGED TOTHE PAYMi:NT OF THE PRINCIPAL, PURCHASEPRICE OR REDEMPTION PRICE, IF ANY, OF OR INTEREST ON THE BOND.S. THE BONDSARE SPECIAL, LIMITEDOBLIGATIONS OF THEAUTHORITY, PAYABLE SOLELY OUT OF THE REVENUE¢ OR OTHER RECEIPTS, FUNDS OR MONEYS OF THE



### AUTHOR~ ITY PLEDGED UNDER THE INDENTURE AND FROM ANY AMOUNTS OTHERWISE AVAILABLE UNDER THE INDENTURE FOR THE PAYMENT OF THE BONDS. THE BONDS

# DO NOT NOW AND SHALL NEVER CONSTITUTE A CHARGE AGAINST THE GENERAL CREDIT OF THE AUTHORitY. THE AUTHORITY HAS NO TAXING POWER.' Principal Source of Payment- Payments of.Facility Rent by Continental The principal sources (other than unspent Bond proceeds, if.any) for the payment of the principal, purchase price and redemption price, if any, of and interest on the Bonds will be the payment by Continental of Facility·Rent"llriderthe Lease Agreements arid any ·amoUritil"payable'under the Guaranty (as described under "- Guaranty" below). Under the Lease Agreements, Continental is obligated to 10pay' to the Trustee, as assignee of the Authority, Facility Rent in an amount equal to the principal, purchase price and redemption price, if any, of and interest on theBonds, when due. The Lease Agreements provide thatthe obligation of Continentaltopay Facility Rent is an absolute and unconditional general obligation of Continental. Payment of such amounts.will be dependent upon thefinancial condition and results of operations ofContinental. For adescription ofcertain risks relating to Continental and its obligation to pay Facility Rent under the 'Lease Agreements, see "CERTAIN BONDOWNERS' RISKS- Obligation of Continental as Primary Security; Certain Risks with Respect to Continental" herein. · Guaranty

· The owners of. the Bondsare also entitled to the benefits of the Guaranty from Continental to the Trustee under which Continental will unconditionally guarantee to the Trustee, for the· benefit of the owners ofthe Bonds, the full and prompt payment ofthe principal, purchase.price and redemption price, ifany,'ofand interE?st onthe Bonds when and as any ofthe same·become due and payable as provided in the lndenture:The obligations ofContinental underthe Guaranty are intendedtobe independent ofthose set out in the Lease Agreements and to be enforceable without regard to the validity or enfOrceability of the Lease Agreements or any obligation ofContinental contained therein. However, a bankrupicy court could limit a claim against Continental under both the· Lease Agreements and':the. Guaranty. See "CERTAIN BONDOWNERS' RISKS -Certain Considerations Underthe United States Bankruptcy Code with Respect to the Lease Agreements and the Guaranty" herein.· · · Leasehold Mortgage and Reletting SecurityInterest; MortgageAmount. Continental's obligation to make payments underthe Guaranty with respect to up to $550 million (the "Mortgage Amount") of the obligations guaranteed thereunder will be secured by a mortgage of Continental's leasehold interest in Concourse C-3 pursuant to the Leasehold Mortgage. The Mortgage Amount is based upon the amount ofthe initial Bond proceeds allocable to the construction and financing costs for Concourse C-3 and may be increased by up to $150 million with respect to the same amount of any additional bonds .issued under the Indenture on a parity with !he Bonds, provided that the proceeds of such additional bonds are expended on Concqurs.e C-3 prior to the scheduled completion date for Concourse C-3 under the Terminal C Facility Lease. Any obligations of Continental under the Guaranty in excess of the Mortgage Amount or not otherwise satisfied by the exercise of rights under·the Leasehold Mortgage will be unsecured. See "CERTAIN BONDOWNERS' RISKS- Limitations UponTrustee's and Bondholders' Ability to Realize Benefits of the Leasehold Mortgage- Limitations on Receipts From Leasehold Mortgage; Obligations Undersecured." Foreclosure. Upon the occurrence and continuation of an "event of default" under .tihe.Leasehold Mortgage, the Trustee, acting on behalf of Bondholders, mayforeclose upon the Leasehold Mortgage by seeking to (a) take possession of Concourse C,3 from Continental, i.f necessary, and (b) have Continental's leasehold interest in Concourse C-3 assigned to a succe.ssor tenant.that satisfies the conditions setforth under ''-Obligations of Qualiiying Replacement Tenant- Qualification Standards" below (a "Qualifying ReplacementTenant").The Qualifying Replacement Tenant would also be required to ,assume Continental's obligations under the Concourse C-3 Lease Agreement with respect to the Bonds (or make otherarrangements with the Trustee) and to meet the otherconditions described under "-Obligationsof Qualifying Replacement Tenant" below, including the payment ofa "deferred reletting fee" to the Port Authority. · The "events of default" under the Leasehold Mortgage (each a "Leasehoid Mortgage Event of Default") include: (a) the Trustee's receipt of a noticefrom the Port Authority to the effect that Continental is in default under the Terminal C Facility Lease and that the Port Authority has elected to terminate the 11

# I

I. 

# i 

# I
! 

# ,. 

# l Terminal C Facility Lease pursuant to its terms as it pertains io Concourse C-3, so long as such notice has not been revoked (a "Lease Default"); (b) a failure by Continental· to pay all amounts when ·due with respect -to the Bonds in accordance with the Guaranty; or (c) the election of at least 51% of all Bondholders. to pursue their remedies under the Leasehold Mortgageif ( 1 ) the Trustee has received a.statementof accountfromthe Port Authority to the effect that Continental is delinquent in its payment obligations under the Terminal C Facility Lease in an amount greaterthan $7.1 million (approximately 60 days' rent, includingflightfees, due to the Port Authority with respect to Concourse C-3 under the Terminal C Facility Lease) and (2) Continental has failed to pay such amount (other than amounts disputed in good faith) within 20 days after receiving awarning notice from the Trustee (the events in (b) and (c) each being a "Bond Default"). Conditions Precedent to Foreclosure. The Port Authority may not terminate iheTerminal C Facility Lease as it pertains to cor1,course C-3 so long as Continental'sinterest in Concourse

# c.3 is.encu-mbered by the Leas.ehold Mortgage. To preseNe the effectiveness of the Leasehold Mortgage, h:owever, the Trustee must take the actions described in this subsection following any Leasehold Mortgage Event of Def<tult. /(any ofthese.conditions were not satisfied or complied with. by the Trustee in· 

### a timely manner, the Leasehold Mortgage would terl!linate and the Trustee and Bondholders would be foreverprecluded from foreclosing upon the LeaseholdMortgage. 

### 1. Notice. Within 30 days after a Leasehold Mortgage Event of Default, the Trustee must give notice to the Port Authority of its intent to foreclose upon the Leasehold Mortgage and Iorseek the assignment of Continental's leasehold interest in Concourse C-3 to aQualifying Replacement Tenant (ihe "Foreclosure Notice"). · ·

,- ' 

### . ·,, . .

• 2. Foreclosure Proceedings and RemovalofContinental. The Trustee must identify 

### a Qualifying Replacement Tenant to assume from Continental its leasehold interest in Concourse C-3 within 270 days. (i.e., approximately nine.months) following the Trustee's delivery ofa ForeclosureNotice (the "Initial Foreclosure Period").The Qualifying ReplacementTenant must satisfythe requirements described below under"- Obligations of Qualifying Replacement Tenant". It Continental does not agree voluntarily to assign its leasehold interest in Concourse.C-3 to a Qualifying Replacement Tenant, or if Continental fails to vacate Concourse C-3,.·the Trustee niust commence appropriate legal proceedings

**wit~in** the first 90 days ofthe Initial Foreclosure Period and diligently pursue such proceedings to secure (a) Continental's removal from Concourse C-3, if necessary, and (b) the assignmertt- of Continental's leasehold interest in Concourse C-3 to a Qualifying Replacement Tenant. The Initial Foreclosure Period may be extended for up to an additional 

### 450 days (i.e., approximately 15 additional months, tor a total of approximately 24 months) if the Trustee has secureifthe commitment of a Qualifying· Replacement Tenant prior to the expiration of the Initial Foreclosure Period and if pending legal foreclosure proceedings are the sole obstacle then

. preventirig a Qualifying Replacement Tenant from taking possession of Concourse C-3 (the Initial ForeclosurePeriod, as it_may be extended, is hereafter referred to as the "Foreclosure Period"). IfContinental:s leasehold interest in Concourse.C-3 has not been assigned to, and assumed by, a Qualifying Replacement Tenant by the end of the Foreclosure Period, the Leasehold Mortgage will be deemedexpired and terminated and ofno furtherforce or effect. No assurance can be given that the Trustee will have sufficient time to complete any necessary foreclosure proceedings during the Foreclosure Period. See "CERTAIN BONDOWNERS' RISKS- Limitations Upon Trustee's and Bondholders' Ability to Realize Benefits of the Leasehold Mortgage". 3. Foreclosure Period Payments. Except as described below under "-Certain Bankruptcy Matters," to preserve the effectiveness of the Leasehold Mortgage upon the commencement of and during the continuation ofthe Foreclosure Period, the Trustee must make certain ongoing payments to the Port Authority pursuant to the Terminal 

### C Facility Lease, to the extent such payments are not 12being made by Continental, including payments in respect of (a) the ground rentals payable by Continental under the Terminal C Facility Lease with respect to Concourse C-3 (".Ground Rent"), (b) the "airport service factor charges" payable by Continental underthe Terminal C Facility Lease with respect to Concourse C-3 (the "Airport Service Factor Charges") and (c) the flightfees, fuel gallonage fees, monorail fees and other activity-based fees payable by Continental_ under the Terminal C Facility Lease,.to the extent allocable to Concourse C-3 and provided the Port Authority has sought to prevent Continental from using Concourses C-1 and C-2 (the "Activity-Based Charges"). In addition, the Trustee might also be required to (a) reimburse the Port Authority for expenses in connection with its provision of utilities, security and maintenance services supplied in satisfaction of Continental's obligations under the Terminal C Facility Lease in respect of Concourse C-3 during the Foreclosure Period (the "Utilities, Security and Maintenance Costs") and (b) pay to the Port Authority certain additional fees to compensate it for the**p~eservation** of the effectiveness of the Leasehold Mortgage (the "Additional Fees").Thefollowing table summarizes the scope of the payments that the Trustee could be required to make to the Port Authority during the Foreclosure Period to preserve the effectiveness of the Leasehold Mortgage: Payment Period Upon Delivery of Foreclosure Notice

0-90 days after delivery of Foreclosure Notice

91-180 days after delivery of Foreclosure Notice (available only if foreclosure proceedings have previously commenced and are being diligently pursued)

181-270 days after delivery of Foreclosure Notice (available only if pending foreclosure proceedings are being diligently pursued)

13 Payment Obligation Accrued but unpaid Ground Rent; Accrued but unpaid Airport Service Factor Charges; Up to 60 days of accrued but unpaid Activity-Bas.ed Charges, provided the Port Authority has sought to prevent Continental from using Concourses Cc1 and C-2 · Current Ground Rent; Current Airport Service Factor Charges; Utilities, Security and 'Maintenance Costs; Current ActivityBased Charges, provided the Port Authority has sought to prevent Continental from using Conco'urses C-1 and C-2 Current Ground Rent; Current Airport Service Factor Charges; Utilities, Security and Maintenance Costs; Current ActivityBased Charges, provided the Port · Authority has soughtto prevent Continental from using Concourses C-1 and C-2 Current Ground Rent; Current Airport Service Factor Charges;- Utilities, Security and Maintenance Costs; Up to $3 million in Additional Fees for this period, prorated and payable monthly (i.e., $1 million per month) in advance; Current Activity-Based Charges, p(ovided the Port Authority has sought to prevent Continental from using Concourses C-1 and C-2Payment Period 271-360 days afterdelivery of Foreclosure Notice (available only ifa Qualifying Replacement Tenant has been secured and foreclosure proceedings are

**continui~_g)**

361-540 days'alter delivery of Foreclosure Notice (available only ifa Qualifying Replacement Tenant has been secured and foreclbst:ire proceedings are continuing)

541-720 days after delivery of Foreclosure Notice (available only ifa Qualifying Replacement Tenant has been secured and foreclosure proceedings are continuing) . .-:- · •• ..,:,·.· ,. __ .;..:;,c

Payment Obligation Current Ground Rent; Current Airport Service Factor Charges; Utilities, Security andMaintenalice Costs; Up to $3 million in Additional FeeiHorthis period, prorated and payable monthly· (i.e., $1 million per mohUi) in advan·ce; ·Current Activity-Based Charges; provided the Port·Authority has sought to prevent Continental from using Concourses C-1 and C-2 · Current Ground Rent; Current'Airport Service FaCtor Charges; Utilities, seduJity and Maintenance Costs; Up to $12 million in Additional Feesfor this period, prorated and payable monthly (i.e., $2 million per month) in advance; Current Activity-Based Charges, provided the Port Authority has sought to prevent Continental from using Concourses C-1 and C-2 Current Ground Rent; Current Airport Service Factor Charges; Utilities, Security and Maintenance Costs; Up to $18 million in Additional Fees for this period, prorated and payable monthly (i.e., $3 million per month) in advance; Current Activity-Based Charges, provided the Port Authority has sought to prevent Continental from using Concourses C-1 and C-2 The Indenture establishes a Leasehold Mortgage Reserve Fund for use by the Trustee in the event that aforeclosure under the Leasehold Mortgage becomes necessary and the Trustee incurs payment obligations to the Port Authority pursuant to the Leasehold Mortgage to preserve its effectiveness while a Qualifying SuccessorTenant is being secured. Upon completion of the portion of the Proje9t comprising Concourse C-3, Continental is required under the Concourse C-3 Lease Agreementto fund the Leasehold Mortgage Reserve Fund with a cash deposit ordirect pay letterof credit or surety bond with avalue equal to $9.6 million. Such amount is estimated to be sufficientto cover anypaymentobligations thatthe Trustee may be required to payto the Port Authoritythrough theend ofthe first 

### 90 days ofthe· Foreclosure Period to preserve the effectiveness ofthe Leasehold Mortgage. However, no assurance can be given that the Leasehold Mortgage Reserve Fund will provide sufficient funds to cover all o.r any portion ofthe payments required during this or any other part of the Foreclosure Period to preserve the effE)ctiveness of the Leaseho.ld Mortgage. See "CERTAIN BONDOWNERS' RISKS- Limitations UponTrustee's and Bondholders' AbHityto Realize Benefits of the Leasehold Mortgage''. At the direction of Bondholders, the Leasehold Mortgage Reserve Fund. may instead be used to repay a portion of the Bonds upon and following a Leasehold Mortgage Event of Default, in which case the Leasehold Mortgage would terminate. 4. BuyOutRights ofPortAuthorityPriorto Foreclosure. Following aLeasehold Mortgage Event of Default, the Port Authority will have the right to purchase the Leasehold Mortgage from the Trustee for an amount equal to the Mortgage Amount plus accrued interest to the date of purchase.

14such amount would be used to redeem Bonds but may be insufficient to repay all of the thenoutstanding Bonds. See "CERTAIN BONDOWNERS' RISKS c--c Limitations Upon Trustee's and Bondholders' Ability to Realize Benefits of the Leasehold Mortgage" and "THE BONDS
- Extraordinary Mandatory Redemption Upon Exercise of Purchase Rights by the Port Authority". Certain BankruptcyMatters. Ifany bankruptcy proceedings involving Continental are instituted while the Leasehold Mortgage remains in effect, the obligations of the Trustee to take the actions (including making certain required payments) described above under"- Conditions Precedentto Foreclosure" in order to preserve its and the Bondholders' rights to foreclose upon Continental's interest in Concourse C-3 will be suspended until the earliest to occur of (a) the "rejection" of theTerminal C Facility Lease by Continental as debtor-in-possession or by its bankruptcy trustee, (b) the 'assignment of the Terminal C Facility Lease to any other entity or person by Continental as debtor-in-p'ossession or by its bankruptcy trustee or (c) the conclusionof such bankruptcy proceedings. During the pendency of any bankruptcy proceedings, Bondholders could be precludedfrom foreclosing upon Continental's leasehold interest in Concourse C-3. See "CERTAIN BONDOWNERS' RISKS- Limitations Upon Trustee's and Bondholders' Ability to Realize Benefits of the Leasehold Mortgage". 1. Refection of Terminal C Facility Lease. In the event that the Terminal C Facility Lease is "rejected" by Continental as debtor-in-possession or by its bankruptcy trustee, the Port Authority has agreed that the Trustee will have the right for a 90-day period following the later of the date of the bankruptcy court's approval of the rejection of theTerminal C Facility Lease and the effective date ofthe rejection of the Terminal C Facility Lease (the "rejection date") to identify a Qualifying Replacement Tenant for Concourse C-3 to succeed to Continental's interests in Concourse C-3 as Continental's "deemed assignee". To preserve such right, however, theTrustee would be required to (a) give noticetothe Port Authoritywithin 30 days afterthe rejection date of its intent to seek a Qualifying Replacement Tenant, (b) pay to the Port Authority all current and previously accrued Ground Rents and Airport Service Factor Charges, as well as up to 60 days of accrued but unpaid Activity-Based Charges, in each case as they become due undertheTerminal CFacility Lease from and after the rejection date, and (c) institute appropriate legal proceedings, if necessary, to remove Continental from Concourse C-3. Any Qualifying Replacement Tenant identified by the Trustee to succeed to Continental's interest in the Terminal C Facility Lease following a "rejection" of the Terminal C Facility Lease in a bankruptcy would also have to satisfy the requirements described below under"-'--- Obligations of Qualifying Replacement Tenant", 2. Assignment ofTerminal C Facility Lease. If the Terminal C Facility Lease is assigned to another entity or person by Continental as debtor-in-possession or by its bankruptcy trustee, and assuming the Leasehold Mortgage remains unaltered and in full force and effect in connection therewith, upon any then-current or subsequent Lease Default (involving the assignee of the Terminal C Facility Lease) or Bond Default (involving (a) the assignee of the Terminal C Facility Lease if ithas alsoassumed Continental's obligations underthe Concourse C-3 Lease Agreement, or (b) Continental ifthe assignee has notassumed Continental's obligations underthe Concourse C-3 Lease Agreement), the Trustee would again be required to takethe actions described above under
"- Conditions Precedent to Foreclosure" to preserve and effect its right to foreclose upon the assignee's interest in Concourse C-3. 3. Conclusion ofProceedings. Upon Continental's emergence from any bankruptcy proceedings, and ifthe Terminal C Facility Lease was not "rejected" or assigned to another person or entity during the bankruptcy proceedings, the Trustee would be required to take the actions described above under "-Conditions Precedent to Foreclosure" to preserve and effect its right to foreclose upon Continental's leasehold interest in Concourse· C-3 on account of any then-current or subsequent Lease Default or .Bond Default involving Continental.



### 15 . I<L Obligations of Qualifying Replacement Tenant· The following requirements and obligations are applicable to any Qualifying Replacement Tenant identified by the Trustee to succeed to Continental's interests in Concourse C-3 upon the Trustee's foreclosure under the Leasehold Mortgage: 1. AssignmentandAssumptionAgreement. The Qualifying Replacement Tenant must execute an assignment and assumption agreementwith the Port Authorityagreeing to be bound by-the terms of the Terminate Facility Lease (but-only with respect to Concourse C-3) as if it were the original tenant thereunder, except that the Qualifying Replacement Tenant may (with the Trustee's approval) agree to lease Concourse C-3 for a term that is less than the remaining term of the Terminal C FacHity Lease.
l'·

. .:.
. . '

. 2. Assumption ofAuthority Financing Obligations. The Qualifying Replacement Tenant must also assuni{orsucceed to Continental's obligations underthe Concourse C-3 Lease Agreement, or enter into new arrangements with theTrustee requiring the Qualifying Replacement Tenant to make payments.directl/to the Trustee in respect _of the Bonds. 3. Payment ofAccrued Continental Obligations and Deferred Reletting Fee. Upon or prior to accepting the assignment and assumption of Continental's leasehold interest in Concourse C-3, the Qualifying Replacement Tenant (or the Trustee) must also pay to the Port Authority: (a) all accrued Ground Rent, Airport Service Factor Charges, Activity-Based Charges and

.Utilities, Security and Maintenance Costs previously owed and unpaid by the Trustee pursuant to.the Leasehold Mortgage, togetherwith accrued interest thereon at the Port Authority's thenprevailing late charges rate; and (b) a "deferred reletting fee" equal to the product of (1) the Mortgage Amount multiplied by (2) 2% if the default under the Leasehold Mortgage that gave rise to the assignment is a Bond Default, 3% if the default is a Lease Default or 4% if there were both Bond and Lease Defaults, further multiplied by (3) afraction, the numerator of which is the greateroffive or the number of full years then remaining under the scheduled lease term for the Terminal C Facility Lease and the denominator of which is the total number of originally scheduled lease term years for the Terminal C Facility Lease, which deferred reletting fee may be paid upon the commencement of the reletting or in installments with interest over the lesser of (i) ten years and (ii) the remaining number of scheduled lease term years for the Terminal C Facility Lease for which the Qualifying Replacement Tenant is obligated.
4. Qualification Standards. Any proposed replacement tenant must be approved by the Port Authority, which will reasonably consider whether the proposed Qualifying Replacement Tenant will be able tofulfill all of Continental's obligations as lessee of Concourse C-3 for the tenm of its tenancy (e.g. whether it is a major domestic or international "scheduled aircraft operator" (as defined in the Terminal:c Facility Lease) or a consortium of such carriers, each of which must be jointly and severally responsible for the consortium liabilities). In addition, the Port Authority will reasonably consider whether such proposed replacement tenant, together with each of its members if it is a consortium, satisfies the following conditions: (a) it has financial resources that are sufficient, in the opinion of the Port Authority, tofulfill all obligations as the lessee ofConcourse C-3 forthe term of its ten,.ncy, (b) it and its 20% owners have a good reputation for integrity and financial responsibility, (c) it and all of its officers, directors, partners, or 20% owners have had no prior "unfavorable experience" (as defined in the Terminal C Facility Lease) with the Port Authority, (d) itand all of its 20% owners·have no "conflict of interest" with the Port Authority or any of its commissioners under applicable policies and laws, and (e) it and all of its 20% owners have not been the subject of bankruptcy proceedings during the prior five years. A 20% owner refers to any person, firm or corporation having an outright or beneficial interest in 20% or more of the monies invested in the proposed Qualified Replacement Tenant, and if said Qualified Replacement Tenant is a corporation or partnership, by loans thereto, stock ownership therein or any other form of financial interest.


### i6The Authority's consent will also be requ·ired for any Qualifying Replacement Tenant who succeeds to Continental's interests under the Concourse C-3 Lease Agreement, although such consent may riot be unreasonably withheld. The Concourse C-3 Lease Agreement further provides
that any such successor must, among otherthings, (a) obtain an opinion of counsel to the effect
that its assumption of the Project would not impair the excludability ofinterest paid on the Bonds from gross income for purposes of federal income taxation and (b) agree to operate or cause the Project to be operated as an authorized project under the.Act.
There can be no assurance thattlieTrustee will be ableto locate.a replacementtenant capable
ofsatisfying all ofthe foregoing requirements. See "CERTAIN BONDOWNERS' RISKS- Limitations Upon Trustee's and Bondholders' Ability to Realize Benefits of the Leasehold Mortgage- Limitations on Successor Tenants" herein.



### No Subsequent Mortgages. A Qualifying Replacement Tenant that succeeds to Continental's interests in.Concourse C-3·. as a result of the Trustee's exercise of its rights under the Leasehold Mortgage must·separatelyabide by itscommitmentsto (a) the PortAuthority underthetermsof its lease relating to concourse C-3 and (b) the Trustee and Bondholders pursuant to the Concourse C-3 Lease Agreement•or•silch 'other arrangements as may be made between the Trustee and such Qualifying ReplacementTenanttosecure repayment ofthe Bonds. NeithertheTrustee nor Bondholderswould have
anyfurther leasehold mortgage rigC\ts with respecttoConcourse C-3 or anyotherportion ofthe Projectif
the Qualifying ReplacementTenant were to breach either such commitment. Analysis of Aviation Demand. In addition to the factors and conditions described abcve, the likelihoodthat.the Trustee would be able to find a Qualifying Replacement,Tenant for Concourse C-3
would be affected by the supply ofand demand for aircraft gates at the Airport and in the greater New
York area. Inconnection withthe offerand sale ofthe Bonds, Continental has retained Leigh Fisher as Its consultant to consider and assess Continental's role at the Airport and the potential demand for the Concourse C-3 terminal facilities should Continental's operations at the Airport be discontinued or substantially reduced. See "ANALYSIS OFPOTENTIAL GATE DEMAND" below.

In addition to theforegoing, prospectiveinvestors should review the section of this Official Statement entitled "CERTAIN BONDOWNERS' RISKS- Limitations Upon Trustee's and Bondholders' Ability to Realize Benefits of the Leasehold Mortgage" for a further discussion of the foregoing and other risk factors thatcould affectdemandforthe Concourse C-3 terminalfacilities upon andfollowing aLeasehold Mortgage Event of Default, including the ·potential availability of other competing facilities within Terminal C and other areas at theAirport and certain pricing considerations.' '
.
Additional Bonds ·.The Leasehold Mortgage providesthat additional bonds on aparity with the Bonds may be issued at
any time with the approval of the Port Authority prior to the completion olthe Project in an amount up to $150 million. The proceedsof anysuch additional paritybonds must be spenton Concourse C-3, and the Mortgage Amount would be increased by the·original principal amount of any such additional parity bonds.The Indenture: the Guarantyand theTerminal CFacility Leasefurtherprovidethatotheradditional bonds (notsecured

### tiy the Leasehold Mortgage) maybe issued at any timewiththe approvalofthe Port Authority priorto the completion of the Project and·upon such terms and conditions as are agreed to by
the Authority and Continental; but only for purposes related t<J the Leased Premises and improvements made during the term of the Port Authority Leases. '



### 17 '!

'i. .\:• ii < 

### 'ANALYSIS OF POTENTIAL GATE DEMAND In connection with the offer and sale of the Bonds, Continental has retained Leigh Fisher as its consultant to consider and assess Continental's_market share attheAirport and the potential demandfor the Concourse C-3 terminal facilities should Continental's operations at the Airport be discontinued or substantially reduced. As stated in Leigh Fisher's report, among other things:
1

. Considering likelyfuture growth in passenger demand and planned additions to gate supply, most gates at the three major New York area airports, including those being constructed in Concourse C-3 an·d Concourse A-2 as part- of the.Project, will be required during peak operating periods.

. . · 2. If Continental were to cease or substantially reduce service atthe Airport, various hypothetical scenarios described in the report suggestthatthere would be demand for mostor all ofthe gates being constructed as part_ of the Project. For a major operator, a complete terminal, such as Terminal C, would likely be preferred to the alternative of using scattered available gates at various airports and terminals. ·,.. ; ' · ..•.· · · 3. Although the various described scenarios would not necessarily create demand for all of Continental's gates at the Airport, it is likely that the newer facilities on Concourse C-3, with dedicated FIS facility:capacity, would be the first to be absorbed. It is likely that Concourse C-3 gates would be more marketable than gates at most other New York area airports for a variety of reasons discussed in the report.


### A complete copy of Leigh Fisher's report is included as Appendix' E hereto. The report should be read in its entirety for 

# an ·understanding of the assumptions, findings, opinions and qualifications expressed therein. ·
CONTINENTAL AIRLINES, INC.
Continental Continental is a major United States air carrier engaged in the business of transporting passenger0, cargo and mail. Continental is the fifth largest United States airline (as measured by revenue passenger miles in 1998) and, togetherwith.itswholly-owned subsidiaries, Express and Continental Micronesia, Inc. ("CMI"), serves 215 airports worldwide. As of August 1, 1999, Continental flew to 129domestic and 86 international destinations and offered .additional connecting service through alliances with domestic and foreign carriers. Continental directly serves 16 European cities and is one of the leading airlines providing service to Mexico and Central America, serving more destinations there than any other United States airline. Through ·its Guam hub, CMI provides extensive service in the:western Pacific, including service to more Japanese cities than any other United States carrier. 

### Domestic Operations. Continental operates its domestic route system primarily.through hubs. at the Airport, Bush Intercontinental, and Hopkins International Airport in Cleveland (''.Hopkins International"). Continental's hub system allows itto transport passengers between a large number of destinations with substantially more frequent service than if each route were served directly. The hubsystem also.allows Continental to add service to a new destination from a large number ofcities using. only one or a limited number ofaircraft. As ofAugust 1, 1999, Continental operated 77% of the average dailyjet departures from Bush Intercontinental, 57% ofthe average dailyjetdepartures attheAirport and 50% of the average dailyjet departures from Hopkins International (in each case excluding regional jets). Each of Continental's domestic hubs, including the Airport, is located in a large business and population center, contributing to a high volume of "origin and destination" traffic. 18

# .' Domeslfc CarrierAlliances. Continental has entered into and continues to develop alliances with domestic carriers: InJanuary 1998, Continental announced it had entered into a long-term global alliance.(the "Northwest Alliance") with Northwest Airlines, Inc. ("Northwest"). The Northwest Alliance includes the placing by each carrier of its code.on a large number of the fiights of the other, and

.. reciprocal frequent flyer programs and executive lounge access,. Significant otherjointmarketing

activities will be undertaken, while preserving the separate identities of the carriers. Continental has also entered into agreements ·to code-share with certain Northwest regional affiliates. See ''CERTAIN BONDOWNERS' RISKS- Obligation ofContinental as Primary Security;Certain Risks with Respectto Continental- Risk Factors Relating to Continental- Risks Regarding Continental/Northwest Alliance.''

.Continental has a series of

**agreem~nts** with America West Airlines, Inc. ("America West"). -'·' _.including agreements.related to



### cod~--sharing and groundhandling,which havecreatedsubstan-

.tial benefits for. both'airlines

..These code-sharing agreements cover 118 city-pairs and allow

-Cdntinental to link additional destinations to its route network and derive additionaJ traffic from AmericaWest's distribution



### str~ngth in'.bties where Continental has less sales presence. The sharing of facilities and employees 

### 'by'Continental and America West in their respeciive key markets has resulted in significant cost savings. Continental has a code-sharing arrangement with Gulfstream'international.Airlines, Inc. ("Gulfstream") which commenced in April 1997. Gulfstream serves as a connection for Continental passengers throughout Florida as well as five markets in the Bahamas. In July 1999, Continental and ·Gulfstream announced their intention to expand the code-share agreement to include 378 new weekly departures to four Caribbean destinationsfrom· San Juan, Puerto Rico beginning

. November1, 1999.
•.Continental has acode-sharing arrangement with Colgan Air, Inc. which commenced in July 1997
on flights connecting in four· cities in the eastern United States and offers connections for Continental passengers to ten cities in the Northeastern and mid-Atlaniic regions of the United States. Continental and CMI have a cooperative marketing agreement with Hawaiian Airlines that began October 1, 1997 on flights connecting in Honolulu and began code-sharing on August 3, 1999. On February 25, 1999, Continental announced that it had entered into a code-sharing agreement with Alaska Airlines, Inc. ("Alaska") and its affiliate, Horizon Airlines, ·Inc. ("Horizon"). Alaska and Horizon serve as

# aconnection for Continental passengers to 29 destinations throughout the PaCific Northwest. · · · · International Operations. Continental serves destinations throughout Europe, Mexico, the



### Carib~ bean and Central and South America and has extensive operations in the western Pacific conducted by CMI. As measured by_available seat miles for 1998, approximately 37.7-% of Continental'sjet operations, including CMI, were dedicated to international. traffic. As of August 1, 1999, Continental offered 182 weekly departures to 1'6 European cities and marketed service to 31 other,European cities through code-sharing agreements. Continental_is one of .the leading.airlin_es providing service to Mexico and Central America, serving rnore destinations there than any other United States airline

.

. The f\irport is a significant international gateway. Ffom Newark, Continental serves 16 European cities, six Canadian cities, two Mexican cities, three Central American cities, six South American cities and six Caribbean destinations, and markets numerous other destinations through code-sharing arrangements with foreign carriers. In addition, Continental commenced non-stop service to Tokyo in November 1998 arid Tel Aviv in August 1999. · · Continental's Houston hub is the focus of Continental's operations in Mexico and Central America. Continental currently flies non-stop from Houston to 15 cities in Mexico, every country in Central America,
19

# I

1 

# I 

# I 

# I I five c·lties ir> South America, two Caribbean destinations, three cities in Canada and twocities in Europe. In addition, Continental commenced non-stop service from Houston to Tokyo in January 

### 1999 and has announced plans to begin non-stop servicefrom Houston to Sao Pauloon November30, 

### 1999, subjectto Brazilian government approval.

- · .., Continental also flies to Montreal, Toronto andSan Juan from its nub in Cleveland and commenced service to London's Gatwick Airport on June 30, 

### 1999. Continental also offers··seasonaf·service from Cleveland to Cancun. · Foreign CarrierAlliances: Over the last decade, major United· States airlines have·developed and expanded alliances with foreign air carriers, generally involving adjacentterminal operations; coordinated flights, code-sharing and other joint marketing activities. Continental is the sole major United States carrier to operate a hub in the New York City area. Consequently, Continental believes it is uniquely situated to attract alliance partners from Europe, the Far

..East and South America and int;mds to aggressively pursue such alliances. Continental believes that'the Northwest Alliance will

**.enh~nce** its ability to atlritcl foreign alliance partners. See "CERTAIN BONDOWNERS' RISKS- Obligation of Continental as Primary Security; Certain Risks with Res·pect to Continent8J- Risk factors Relating to Continental

- Risks Regarding Continental/Northwest Alliance.'' ·

**.~** Continental believes that developing a network of international'alliance partners will better leverage Continental's hub assets by attractinghigh-yield flow traffic and by strengthening Continental's position in large, local (non-connecting) markets and will result in improved returns to Continental. Additionally, Continental can enlarge its scope of servicemore rapidly and enteradditional markets with lowercapital and· start-up costs through formation of alliances with partners as compared with entering .markets independently of other carriers. Continental has implemented international code-sharing agreements with Alitalia:·.CSA. Czech Airlines, British Midland, EVAAirways Corporation, Virgin Atlantic.Airways ("Virgin''), Viacao Aerea Sao Paulo ("VASP"), A1r France, and Campania Panamena de Aviacion, SA ("COPA"), 49% of the common equity of·which is owned by Continental. Upon receipt of governmental·approval, Continental will commence code-sharing arrangements with Aeroservicios Carabobo S.A. (Aserca), a Venezuelan carrier, Avant Airlines, a Chilean carrier, Air Aruba and Air China. In addition, the Northwest Alliance contemplates formation of ajoint venture with KLM Royal DutCh Airlines, a Dutch'carrier.:

. Certain of Continental's code-sharing agreements involve block-space arrangements (pursuant to which the carriers agree to share capacity and beareconomic risk for blocks of seats on certain routes). Alitalia has agreed to purchase blocks of seats on Continentai flights between Newark and Rome or Milan. Continental and Air France purchase blocks of seats on each other's flights



### betwe~n Housto'n or Newark and Paris. Continental and Virgin exchange blocks of seats on each



### ·~!her's flights between Newark and London. Continental's agreement with Virgin also includes the purchase by. Contineqtal of blocksof seats on eightotherroutes ftown by Virgin betweenthe United Kingdom and th(J United $tales. In July 

### 1999, Air France announced that it had elected to attempt to form a global group 8Johg With Delta Air Lines. This announcement precludes the development of additional forms of coopera.tiori between Continental and Air France, although ContinentaJ does notanticipate any material adverse effeCt on the forms of cooperation with which ii is·currently engagedwithAir France._

... . .. ... ' '

**;.~;'** Asignificant numberofthe world's majorairlines h<:tve engaged in the formation oflarge, multi-carrier alliances that offer to customers and travel agencies on·a global basi.s some

### pfthe benefits that they would ordinarily expect to receive from

# asingle carrier. The airlines·participating·in these global groups hope that byoffering to theircustomers greaterscope and scale theywill be ableto increasetheir market' share and yield in highly competitive and increasingly concentrated global markets. Continental

..hi'S engaged in discussions with Northwest, Alitalia and KLM regarding the formation of a global group thai would compete with the other global groups that have already formed. or 

## are' in formation. These negotiations have not yet concluded.

.'· , .. 

### 20

## '

.CMI. CMI is. a United States-certificated international air carrier engaged in the business of transporting passengers, cargo and mail in the western Pacific. From its. hub operations based on the island of Guam, CMI provides service to eight cities in Japan, more than any other U.S. carrier, as well as other Pacific Rim destinations, including Taiwan, the Philippines, Hong Kong, Australia, New Caledonia and Indonesia. Service tothese Japanese cities and certain other Pacific Rim destinations is subjectto a variety of regulatory restrictions, limiting the ability of other carriers to service these markets. CMI is the principal air carrier in the Micronesian Islands, where it pioneered scheduled air service in 1968. CMI's route system is linked to the Unit<:>d States market through Honolulu (which CMI serves.nonstopfrom both Guam and Tokyo) and Tokyo (which CMI serves non-stopfrom Guam and Honolulu). CMI and Continental also maintain acode-sharing agreement and coordinate schedules on certain flights from the west coast of the United Statesto Honolulu, and from Honolulu to Guam and Tokyo, tofacilitate travel from the United States into CMI's route system. Earlier this year, CMI began the previously announced accelerated retirement of_certain of its aircraft. ··· Express. Continental's jet service at each of its·domestic hub cities is coordinated with Express, which operates new-generation turboprop aircraft and regional jets under the name "Continental Express." The turboprop aircraft average approximately seven years of age and seat 64 or fewer passengers while the regional jets average less than 15 months of age and seat 50 passengers. In addition, Express recently announced the accelerated retirement of certain turboprop aircraft and an order to purchase 25 Embraer ERJ-135 ("ERJ-135") 37-seat regional jets.

·' .As of August 1, 1999, Express served 34 destinations from the Airport (21 by regional jet), 37 destinations from Bush Intercontinental (18 by regional jet) and 51 destinations from Hopkins International (24 by regional jet). In addition, commuter feed traffic is currently provided by other code-sharing partners. Continental believes that Express' turboprop and regional jet operations complement Continental's jetoperations by allowing more frequent service to small cities than could be provided economically with conventional jet aircraft and by carrying traffic that connects onto Continental's jets. In many cases, Express (and Continental) compete for such connecting traffic with commuter airlines owned by or affiliated with other major airlines operating out of the same or other cities. Continental believes that Express' new regional jets provide greater comfort and enjoy better customer acceptance than its turboprop aircraft. The regional jets also allow Express to serve certain routes that cannot be served by turboprop aircraft.
Additional Information Continental is. subject to the informational requirements of the Securities Exchange Act of 1934, as amended, and in accordance therewith, files reports and other information with the Securities and Exchange Commission. Certain information with respect to Continental is incorporated by reference in Appendix A hereto from materials on file with the Securities and Exchange Commission. See AppendixA- Availability ofCertain Information Relating to Continental Airlines, Inc. Such information has been provided by Continental and has not been independently verified by the Authority or the Underwriters, and neither of the Authority nor the Underwriters makes any representations or warranties, express or implied, as to the accuracy or completeness of such information.

THE BONDS General The Bonds will be issued in the original aggregate principal amount of $730,360,000. The Bonds will be dated September 15, 1999, will be issued in denominations of $5,000 and integral multiples in excess thereof. 21 

## :;.-,

1! 

### ; ;The final maturity date for the Bonds will be September 15, 2029, unless redeemed earlier as described herein,.and the Bonds will bear interest atthe rates set forth-on.the inside cover ofthis Official Statement, unless adjusted as described under.'.'- Interest Rate·Adjustment" below:·'Interest on ·each Bond will accrue from the date such Bond is dated, payable semiannually on each March- 15 and September 15, commencing March 15, 2000 (each such• date being an "Interest Payment Date"). Interest on the Bonds will be computed· on the basis of a 360-day year- consisting of twelve 30-day months. For as long as the Bonds are book-entry bonds, as described below under "-Book-Entry-Only System," payment of the principal, purchase price and redemption price;·if ahy, of and interest on the Bonds and all notrees with respect to the Bonds.sh-all be made and given in accordance with DTC's operational arrangements. If in the future the Sonds cease 

### id be book-entry bohdS, the principal, purchase priceand redemption price, ifany, ofany Bdnd will be payable on presentation and surrehcfer of such'Bond,.in lawful moneyofthe United States·ofAmerica;witliout exchange or collection'¢f1arges to the registered owner of such Bond, atthe-principal corpora1e'trustofflce ofthe Paying Agent (asdefined below) orthe TenderAgent (as defined below), as applicatiie: AfJ'interest accruing prior

# to maturiij

# on any Bond that ceases to be a book-entry.bond,shall be paid bycheck mailed-to .the registered.holder of such Bond at itsaddress as it appears on.the registration



### book~,of the Trustee.-If any Bondholderthat owns Bonds in an aggregate principal amounto!$1,000,000 ormore so requests inwriting,,interestwill be paid.tothat Bondholder byelectr9nic transfer

# oi immediatelyavailable funds-tothe financial institution within the Unhed Staies of America and the account number that are reflected in the registratiOf].bOoks; provided that any such request must be received by,the Trustee at least five days prior,to the Record Date or if any such day is not a B-usiness Day, the Business Day immediately preceding such day. Any costs associated· with an electronic transfer shall be deducted from the amount transferred .to the financial institution receiving such funds on behalf ofthe Bondholder requesting the transfer. "Record Date," as defined under the Indenture, means the first day of the calendar month in which an Interest Payment Date occurs (whether or not such day is a Business Day), and "Business Day" means a day on which banks lOcated in the cities in which'the principal offices oftheTrustee, the·Tender Agent (as hereinafter defined) the paying--·agent (which will initially'be the Trustee) (the "Paying Agent") and registrar (which will initially be theTrustee) (the "Registrar") are located are not required or authorized to remain closed- and on which the New York Stock Exchange is not closed. Except as described below under "c:- Book-Entry-Only, System,:· the Bonds shall. be transferable only upon presentation and surrender thereof at the corporate trust office of the Trustee, acting·in its capacityas Registrar, dulyendorsedfortransfer, oraccompanied byan assignmentdulyexecuted bythe registered owner or his authorized representative in a form satisfactory to the Trustee. Upon due presentation of any Bond for transfer, the Trustee shall authenticate and deliver in exchange·therefor-,a new Bond or Bonds, registered in the name ofthe transferee or transferees, in authorized



### denomin~tions. and of the same aggregate principal amount as the Bond'or Bonds so presented and surrendered. The Authority or the Trustee may require the registered-- owner ofany Bond to pay a sum sufficient:to·.-;over any-tax orother governmental chargethat.-may be imposed in connection withthe transfer or exchange of such Bond.

. · TheTrustee shall not be required to registerthe



## tr~nsferorexchange of'anyBoncj during the pe;iod from a Record Date through the next Interest Payment Date.• inclusive, nor to transfer or exchange any Bond selected for redemption in whole or in part. In addition, theTrusteeshall, not pe required-tq register the transfer or exchange of any such Bond during the period of 15 days next preceding the giving of notice of redemption. The Authority, the Trustee, the tenderagent appointed under the Indenture (the "TenderAgent"), the remarketing agent appointed underthe Indenture (the "Remarketing Agent") and any other. P.§[Son may deem and treat the person in whose name any Bond is registered as the absolute registered owner of such Bond forall purposes, including making payment of'theprincipal'and the redemption price; ifany, of and interest on such Bond and forthe purpose of giving notice-to>the holderof such Bond. Neitherthe Authority, the TenderAgent, the Remarketing Agent, the Trustee nor any other person shall be bound by 22.. " any notice to the contrary. All payments made to the person deemed to be the holder of any Bond in accordance with the Indentureshall bevalid and effectual and shall discharge.the liabilityofthe Authority and the Trustee upon such Bond to the extent of the sums paid.
Interest Rate Adjustment In connection·with a mandatorytenderdescribed under "- MandatoryTender ofthe Bonds" below, the interest rate(s) on all or a portion ofthe Bonds, other than theTerm Bonds maturing September 15, 2012, may be adjusted at the option of Continental to a rate determined by the Remarketing Agent on 45 days' written notice to the Trustee, the Tender Agent, the Paying Agent, the Remarketing Agent and the Authority. The reset interest rate(s) will be the lowest rate (s) which, in the judgment of the Remarketing Agent, having dueregard to prevailing market conditions, would be necessarytoenablethe applicable Bonds to be sold at par on the date(s) selected byContinental for such adjustment (each a "Tender Date").The initialreset interest rate(s) for any Bondswill remain in effectfrom the initialTender Date until the maturitydateof suchBonds, subjecttoContinental's right to reset the interest rate for such Bonds on a second Tender Date occurring not before the date such Bonds would then be subject to optional redemption. See''- Optional Redemption" below, The second reset interest rate(s) for any Bonds will remain in effect from the secondTender Date until the maturity date of such Bonds.· In order to effect a mandatory tender and adjust the interest rate(s) with respect to any Bonds, Continental must deliver (a) anopinion of bond counsel tothe effect thatthe action proposed is permitted by the Act, the Indenture. and the Lease Agreements, andwill not adversely affect.the exclusion of interest on such Bonds from gross income for purposes offederal income taxation, and (b) funds equal tothe difference between the purchase price forthe applicable Bonds and the amount on deposit with the Remarketing Agent from the remarketing of the applicable Bonds

.

. In the eventthat such conditions are not met, none ofthe Bonds will be subject to mandatorytender on suchTender Dateand Continental will have no liability therefor. The interest rate then in effect on the applicable Bonds will .remain in effect until a new Tender Date, if any, is selected by Continental and the conditions precedent to the adjustment of the interest rate set forth above are satisfied. The determination by the Remarketing Agent of the reset interest rate for any Bond shall be conclusive and binding.

_ Book-Entry-Only System The Bonds,.when issued, will be registered.in the name of Cede & Co., as nominee for DTC. When the. Bonds are issued, ownership interests will be available to purchasers only through a book-entry system,maintained by DTC (the "Book-Entry-Only System")·. 

### DTCand its'Participants. DTC is a limited-purpose trust company organized under the laws ofthe State ofNewYork, a memberofthe Federal Reserve System, a "clearing corporation" within the meaning ofthe NewYork Uniform Commercial Code and a "clearing agency" registered pursuanttothe provisions of Section 17 A ofthe Securities ExchangeActof 1934, as af)'lended. DTC was created.to hold securities of its participants (the "DTC Participants") and to facilitate the clearance and settlement of securities transactions among DTC Participants in such securities through electronic book-entry changes· in accounts of the DTC Participants, thereby eliminating the need for physical movement of securities certificates. DTC Participants include securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations, some of which (and

### Ior their representatives) own DTC. Access to the DTC system is also available to.others such as banks, brokers; dealers and trust companiesthatclear through ormaintain acustodial relationship with a DTC Participant, eitherdirectlyor indirectly (the "Indirect Participants"). DTC Participants and Indirect Participants are referred to herein as "Participants." 23 j I

### \-· 

# ' 

# I

:I Purchase ofOwnership Interests. ·The DTC Participantswill receive acredit balance in the.records of DTG

.. The ownership interest of.each·.actual purchaser.of each. Bond (the.::beneficial owner") will be recorded through the records of the DTC Participants. Beneficial .owners wil.knot receive written confirmation from DTC of their purchase, but beneficial owners are expected to receive a written confirmation of theirpurchase providing details ofthe Bond acquired from the Partio;ipant through,Whic.h the beneficial owner entered into the transaction. Transfers of ownership interests in



### ·B~nds will be.made by DTC and its Participants, acting as nominees of the beneficial owners, in accordanc.e with rules specified by DTC and its Participants. Beneficial'owners will not receive certificates representing their ownership interests.in any Bonds, except as specifically. provided in the Indenture. · Each 1person for whom a Participant, as



# nomin~e,**~~san** interes; in



# a~yBonds may desire tornake arrangementswith such Participa,nt,to receive acredit balancein the records ofsuch Participantand may pesire to make arrangements. with- such. Participant to have: all notices

.of redemption· anfi. other communiqations with respect to such Bonds that may affect_§u.ch person.forwarded in writing bysuch participant and to be notified of allinterest payments. NONE OF THE AUTHORITY, THE TRUSTEE OR
**~ONTINENTAL** WILL HAVE ANY RESPONSIBILITYOR OBLIGATION TO SUCJ:1 PARTIC,:fPANTS OR THE PERSONS FOR WHOM THEY ACT AS NO[vliNEES .WITH RESPECT TO THE f':AYMENT TO, OR THE PROVIDING,OF NOTICE FOR, SUCH PARTICIPANTSOR THE PERSONS FOR WHOM THEY ACT AS NOMINEES. Payments ofPrincipal, Purchase Price, Redemption Price, 

### ifany, andInterest. ·So long as all Bon<;:ls are registered in the name of DTC or its nominee, all payments of principal, purchase price and redemption price, ifany, ofand intereston the Bondswill be made toDTCor its nominee, Cede, &Co., as registered ownerof the Bonds. Upon receipt of moneys, DTC's current practice is to immediatelycredit the accounts ofthe DTC Participants in accordance with their respective holdings shownon the records of DTC. Payments by Participants to beneficial owners will be governed by standing instructions and custom·a:rj pnicbces, as'is'nowthecasewith municipal securities held for the accounts of customers in bearerform or registered in "street name,'' and

# will be the responsibility of such Participant and not of DTC, theTrustee, the TenderAgent, Continental ortheAuthority, subject to anystatutoryand regulatory requirements as may be in effectfrom time to time. Payment of principal, purchase price and redemption price, if any, of and interest on the Bonds' to DTC is the responsibility of the Trustee, disbursement of such payments to DTC Participants shall' be the responsibility of DTC, and disbursement of such payments-to the beneficial owners shall'be the responsibflity of Participants. Notices. Notices referenced in this Official Statement that are to be given to registered owners will be given only to DTC. Except as described in the preceding sentence, conveyance of notices and other communications by DTC to DTC Participants, by DTC Participants to Indirect Pari':cipimts, and by DTC Participants and Indirect Participants to beneficial.owners will· be governed by arrangements among them, subjectto any statutory and regulatory requirements asmay be in effectfrorntime.totime. None of the Authority, the Trustee, the TenderAgent and·Continental will· have any responsibility

## or obligation to assure that any such notice is forwarded by DTC to the Participants orbyany Participantto the beneficial 

### 6\.\/ners.' ·l2·> ·" ;o:. . ,_. .:..-;·; Transfers ofBonds. Upon initialissuance of the Bonds, the Bonds--will·-be registered in the bond registration books of the Trustee in· the'riame ofCede & Co., as nominee b!DTC.: Bonds"will.notbe available for registration of transfec to benefiCial owners except'upon discontinuance orthe Book-EntrYOnly System as described below. · · ··' .: :· -. ·" -The Authority, .Continental, the Tender Agent and th.eTrustee may treat ti)e registered owner of a Bond (.initially,.Cede & Co.) as the **absolute.owner.-t~ereoJ.Jor** all purposes o.f-the Indenture and any applicable laws, notwithstanding· any notice to the contrary received, by afly of. them; and, except as described above, theAuthority, Continental, the.-TenderAgent and the.Trusteewill have no responsibility for transmitting.payments to, communicating with;, notifyin_g. or otherwise dealing with any benef:cial owners ofany Bonds. None oftheAuthority, Continental, the Tender Agent and theTrusteewill have any 

### 24

### , 

## .. responsibility or obligation, legal or otherwise, to any party other than to the registered owners of any Bond on the registration books of the Trustee. Mandatory Tender. So long as the·Bonds are held in Book-Entry-Only form, delivery of any Bond by its beneficial owner with respect to any tender of the Bonds shall be m(l.de when-the_beneficial owner of such Bond irrevocably authorizes the Trustee pursuant to the mandatory tender notice, directly or through its DTC Participant, to make appropriate entrie·s on the books ofDTC or any DTC Participant; provided however, the Trustee shall have no obligation'to makeoraccept such entries, it

**~nhe** time that such entry is made, the Trustee has not yet received tundsnec"ssary to

**~onor** such entry.

__ .. · Discontinuance of Book-Entry-Only System. The Book-Entry-Only Systemthrough DTC may be terminated uponthe happening of anyofthe following: (a) DTC ortheAuthority, based upon advice from DTC, advises the Trustee that DTC is no longerwilling or able to properly discharge·its responsibilities

**a~** securities depository and the Trustee or the Authority are unable to locate aqualified successor clearing agency satisfactorytothe Trustee and theAuthority; (b) the Authority, with the consent of Continental, elects to terminate the Book-Entry-Only System by notice to DTC, Continental and the Trustee and makes such election at the request of Continental; or (c) after the occurrence of an event of default under the Indenture, the beneficial owners of not less than 51% in aggregate outstanding principal amount ofthe Bonds, through the Participants and DTC, electto discontinuethe Book-Entry-OnlySystem through DTC and so advise theTrustee, the Authority and DTC in writing. Uponthe occurrence of any of the events described above, definitive certificated Bonds will be authenticated and delivered in accordance with the Indenture. Use ofCertain Terms in OtherSections ofthis Official Statement. While the Bonds are in the BookEntry-Only System, references in other sections ofthis Official Statement to registered owners should be read to include the person for whom the Participant acquires an interest in the Bonds, but (a) all rights of ownership must be exercised through DTC and the Book-Entry-Only System, and (b) except as described above, noticesthat are to be given to registered owners by the Authority, the Tender Agent or the Trustee will be given only to DTC. · · Year2000. DTC management is aware that some computerapplications, systems, and the like for processing data ("Systems") that are dependent upon caJendar dates, including dates before, on, and after January 1, 2000, may encounter "Year 2000 problems." DTC has informed its Participants and other members of the financial community (the "Industry") that it has developed and is implementing a program so that its Systems, as the same relate to thetimely payment ofdistributions (including-principal and income payments) to· securityholders, book-entry deliveries, and settlement'of trades within DTC, continue tofunction appropriately. This program includes a technical asses·sment and a remediation plan, each of which is complete. Additionally, DTC's plan includes a testing phase, which is expected to be completed within appropriate time frames. However, DTC's ability to perform properly its services is also dependent upon .other parties, including but not limited to issuers and their agents, as well as third party vendorsfrom· whom DTC licenses software and hardware, and third party vendors on whom DTC relies for ·information or the provision of services, including telecommunication and electrical utility service providers, among others. DTC has informed the Industry that it is contacting (andwill continue to contact) third party vendors from whom DTC acquires services to: (a) impress upon them the importance of such services being Year 2000 compliant; and (b) determine the extentof their efforts for Year 2000 remediation (and, as appropriate, testing) of their services. In addition, DTC is in the process of developing such contingency plans as it deems appropriate. According to DTC, the foregoing information with respect to DTC has been provided to the Industry for informational purposes only and is not intended to serve as a representation, warranty, or contract modification of any kind. 

### 25

# I I ,' o'-

Information concerning DTC and the Book-Entry-Only System has been obtained from DTC and is not guaranteed as to accuracyor completeness by, and is notto be construed as a representation by, the Underwriters, the Authority or Continental. Mandatory Sinking Fund Redemption The Bonds maturing on Sept\'mber 15, 2019, September 15, 2023 and September 15, 2029 are required to be retired ,bymanpato,Y sinking fund redemption priortomaturity in directorderofmaturity by lot by the Trustee, beginning on September 15 of each of the years and".in the respective principal amounts setforth below (subject-to reduction by the principal amount ofany Bonds ofthe same maturity previously purchased by continental (whether by redemption or purchase) and surrendered to the Trustee for cancellatioa·

# or purchased by the Trustee for cance_llation pursuant to the Indenture), at a redemption price equal 

### to·the principal amount thereof to be redeemed plus accrued interest tci. the redemption date: · ., · ·
Year 2013
..............., 2014

. '''
........... ·' 2015 "" "."" "' ". 2016 """

.....• .... .. 2017

.. ""

........ ". 2018 "

.. " '

... """ ' 2019 (maturity)

.. , .. . 2020

.. " "

.... ; . "

.. . 2021 '

.......: .
.. "

.. . Principal -:- Installment $21,785,000

23,140,000• 24,580,000 26;140,000 27,750,000 29,475,000 31,325,000 33,290,000 35,425,000 Year

. ' 2022 "

....... "

.... ..

2023 (maturity)

...... . 2024 " "

. '
..........- 2025
................ . 2026 " "

.. "

.. "

.. "

. 2027 " "

.... '

.'

..... . 2028 ' ' " "

... '

.... ' '

. 2029 (final maturity)

... Principal Installment $37,670,000

40,095,000 42,655,000 45,330,000 48,150,000 51,160,000 54,360,000 57,755,000 On or before the 45th daypreceding each sinking fuhd installment payment date set forth above, Continental may deliver any Bonds ofthe next occurring maturity to·the Trustee. Upon such delivery, any prior redemption, or purchase of such Bonds by the Trustee, such Bonds shall be canceled by the Trustee and the amount of the next sinking fund installment shall thereupon be reduced by the principal amount of such Bonds so delivered and canceled. In the event thatany prior redemption or purchase of the Bonds is in an amount greaterthan the next sinking fund installment, such excess shall continue as a credit against the next due future sinking fund installments until exhausted. Optional Redemption On orafterSeptember 15; 2009, but priortothe initial Tender Date, if any, for any Bonds exceptthe Term Bonds maturing September 15, 2012, Continental may direct the Authorityto redeem such Bonds prior to their stated maturities in whole or in part at any time (but if in part only in integral multiples of $5,000) at the redempt'1on pr'lces set forth below, plus accrued interest thereon to the date of redemption: Redemption Dates September 15, 2009 through_September 14, 2010 September 15, 2010 through September 14, 2011 September 15, 2011 and thereafter Redemption Prices 101

# :ora 100.5%

. 

### 1



### oo.o'Y~ On orafterthe initial Tender Date, ifany, (but before asecond Tender Date, if any) foranyof the Bonds exceptthe Term Bonds maturing'September 15, 2012, such Bonds will besubject to optional redemption as follows: (a) if the length of time from the initial Tender Date to the final maturity of such Bonds is less than 10 years, such Bonds will not be subject to optional redemption; and (b) ifthe length of time from the initial Tender Date to the final maturity date of such Bonds is 10years or more, such Bonds will be subject to optional redemption bythe Authority, at the written 26request of Continental, in whole or in part at any time on or alterthe tenth anniversary of such initial Tender Date. Such Bonds will be subject to optional redemption at a redemption plice equal to the principal amount thereof, plus a premium equal to 1.0% of the principal amount to be redeemed upon and during the year following the tenth anniversary of such initial Tender Date together with interest accrued thereon to the date of the redemption. The premium percentage will decline by 0.5% per year on each subsequent anniversary of such initial Tender Date applicable to such Bonds until the Bonds shall be redeemable without premium. Such Bonds will be subject to such optional redemption upon receipt by the Trustee not less than 45 days prior to such redemption date of a written direction from Continental stating that itintends toexercise its option to redeem such Bonds. On or after the second Tender Date for any Bonds, such Bonds will not be subject to optional redemption. 

### Extraordinary Optional Redemption Continental may directthe Authority to redeem theBonds at a redemption price equafto 100% ofthe unpaid principal amount of the Bonds to be redeemed, plus accrued interest thereon to the date of redemption, at any time, upon the occurrence of any of the following events: (a) in whole or in part, if Continental determines, in its sole discretion, that the continued operation of the Project or a substantial portion of the Project is impractical, uneconomical or undesirable for any reason; (b) in whole or in part, if all or a portion of the Project is damaged, destroyed, condemned, taken by eminent domain or sold under a reasonably apprehended threat ofcondemnation or such portion of the Project or the use or control thereof is condemned or taken by eminent domain orsold under a reasonably apprehended threat of condemnation as to render the Project or a substantial portion of the Project unsatisfactory for its intended use as determined by. Continental in its sole discretion; (c) in whole or in part, if operation of the Project or a substantial portion of the Project is enjoined or prevented or is otherwise prohibited by, or conflicts with, any order,'decree, rule or regulation ofany court or of any federal, State of New Jersey or local regulatory body, administrative agency or other governmental body; or (d) with respect to any Bonds other than the Term Bonds maturing September 15, 2012, in part, on any date, at the direction of Continental after the filing of a completion certificate by Continental in accordancewith the Indenture uponcompletion ofthe construction ofthe Project, with funds remaining in the Construction Fund .and not reserved for punch-list items, costs of construction, deposits to the Rebate Fund or additional capital projects. .• In the event of a partial redemption, the amount ofthe Bonds to be redeemed will not be more than the applicable amount set forth under "-Extraordinary.Mandatory Redemption wiUr Respect to Port Authority Leases ana Lease Agreements- Expiration, Surrender or-Termination- of Port Authority Leases" below based on which portion of the Port Authority Leases are affected (expressed as a percentage of the outstanding principal amount of the Bonds) plus accrued interest thereon. 

### Extraordinary Mandatory Redemption with Respect to Port Authority Leases and Lease Agreements Expiration, Surrenderor Termination ofPortAuthorityLeases. Ifthe Port Authority Leases (or either of them, in its entirety, as provided below) are surrendered or terminate or expire, the. Authority must redeem the Bonds as a whole or in part at a redemption price equal to 100% of the unpaid principal amount of such Bonds to be redeemed, together with interest accrued thereon tothe date of redemption, as soon as practicable, but in any event within 90 days after the effective date of any expiration, surrender or termination of the Port Authority Leases or either of them, in its entirety. In the event of the


### 27 ·. '!

;'; ''·\



## '

,;

':; ;'I•' (.

. 

# ;j

1 

# III



### II 

# I I'

I

I, 

# jl I i 

## \l: expiration, surrender or termination of one of the Port Authority Leases in its entirety, the amount of Bonds to be redeemed shall be equal to the amount set forth below based upon which Port Authority Lease has expired orhas been surrendered orterminated (expressed as apercentage ofthe outstanding principal amount of the Bonds.) plus accrued interest on the Bonds to be redeemed to the. redemption date of such Bonds; provided that the amount of Bonds to be redeemed may be reduced by the aggregate principal amount·(valued at par) of any Bonds previously redeemed or purchased by or on behalf of Continental arid delivered to the Paying Agent for cancellation: Expiration, Surrenderor Termination'Of Lease Terminal·A Facility Lease· Terminal C Facility Lease Percentage 3.7% 96.3%. Expiration, Surrender or Termination ofLease Agreements or Basic Lease. If both Lease Agreements are surrendered, expire orterminate in theirentirety, including, without limitation, on account ofthe surrender, termination or expiration of the Basic Lease and/or both Project Leases, the Trustee must redeem the Bonds as a whole at a redemption price equal to 1 00% of the unpaid principal amount togetherwith interestaccrued thereon to thedateofredemption, as soon as practicable, butin any event within 90 days after the effective date of any surrender, termination or expiration of the Lease Agreements in their entirety. For a more complete description of these and other circumstances under which the Lease Agreements could terminate or expire, see "THE LEASES -The Concourse A-2/C-1/G-2 Lease Agreement- Term" and "-The Concourse C-3 Lease Agreement- Term" in Appendix D hereto. No Redemption ifContinentalRetains OccupancyRights. Notwithstanding the foregoing, the Bonds will not be subject to extraordinary mandatory redemption in whole or in part in the event of: '

. 

### . - . . . ' " ' 

### . . . . (a) the expiration, surrender or termination of one or both of the Port Authority Leases as a result ofthe expiration, surrender ortermination ofthe Basic Lease so long as Continental continues to have permitted occupancyofthe related portion ofthe Leased Premises (including occupancy as a resultof a permitted holdover tenancy) or · (b) the expiration, surrender or termination of both Lease Agreements so long as Continental continues to have permitted occupancy of the Leased Premises (including occupancyas a result of a permitted holdover tenancy).



### ··.• ·As described in Appendix D hereto under "THE LEASES-The Port Authority Leases," the Terminal A Facility Lease

### will expireon December31, 2018, unlessextended, and theTerminal C Facility Lease 

### will expire in its entirety on March 31, 2028, unless extended. Each of the Port Authority Leases

### will also besubjecttoearliertermination in certain circumstances. In the event either PortAuthority Lease is notextendedthrough the final stated maturitydateofthe Bonds, a corresponding portion of outstanding Bonds could become subject to extraordinary mandatory redemption as described in the preceding paragraphs. In addition, if either PortAuthority Lease isotherwiseterminated orsurrendered priortothe stated maturityofthe Bondswhile any Bonds remain outstanding, acorresponding portion·ofoutstanding Bonds also could become subjectto extraordinary mandatory redemption asdescribed in the preceding paragraphs.There can be no assurancethateithertheTerminal A Facility Lease ortheTerminal C Facility Lease

### will continue in effect through its respective scheduled expiration date or that such expiration date 

### will be extended. Special Redemption Upon a Determination ofTaxability The Bonds are subject to special redemption at a redemption price equal to 100% of the unpaid principal amount of the Bonds to be redeemed; plus accrued interest thereon, if any, to the date of redemption in the event of a Determination of Taxability (defined below) on any date selected by 

### 28Continental, but not later than 180 days after such Determination of Taxability. "Determination of Taxability" means adetermination thatthe interest on the Bonds is includable in the gross income of the holder or·the beneficial owner thereof for purposes of federal income taxation, which will be deemed to have occurred upon the receipt bythe Trustee ofwritten notice from acurrent orformer holderofa Bond or from Continental of (a) the issuance of a published or private ruling or a technical advice .memorandum by the Internal Revenue Service in which Continental has participated or has been given the opportunity to participate, and which ruling or memorandum Continental, in its discretion, does notcontest orfrom which no further right ofjudicial review or appeal exists, or · (b) afinal determination from which no further right of appeal exists ofany court of competent jurisdiction in the United States in a proceeding in which Continental has participated or has been a party, or has been given the opportunity to participate or be a party, in either

## c~se, to the effect that, as a result of afailure by Continental to observe the provisions of its tax covenants in the Lease Agreements, the interest payable on such Bonds is included in·the gross income ofthe holders.thereofforfederal income tax purposes,.other than a person who is a "substantial user" of the Project or a "related person'' of such substantial user within the mean.ing of Section 147(a) of the Internal Revenue Code; provided however, that no such Determination ofTaxability will be considered to exist unless (a) the registered owner orformer registered ownerofthe Bond involved in such proceeding or action ( 1 ) gives Continental and the Trustee prompt notice of the commencement thereof and (2)·. (if Continental agrees to pay all expenses in connection therewith) offers Continental the opportunity to control unconditionally the defense thereof, and (b) either ( 1 ) Continental does not agree within 30 days of receipt of such offer to pay such expenses and liabilities and to control such defense or (2) Continental exhausts or chooses not to ·exhaust all available proceedings for the contest, review, appeal or rehearing of such decree, judgment or action which Continental detenmines to be appropriate. No Determination of Taxability described above will result from the inclusion of interest on any Bond in the computation of minimum or indirect taxes or if ihe events which would otherwise give ris.e to a Determination of Taxability are the result of a change in the Internal Revenue Code or regulations under the Internal Revenue Code adoptedand becoming effective afterthe date of issuance ofthe Bonds. All of such Bonds will be redeemed upon a Determination of Taxability as described above, unless, in the opinion of Bond Counsel, 'redemption of a portion of such Bonds would have the result that interest payable on the remaining Bonds outstanding afterthe redemption would not be so included in the gross income for federal income tax purposes of any holder or beneficial owner thereof (otherthan a person who is a "substantial user" of the Project or a "related person" of such a substantial user within the meaning of Section 147(a) of the Internal Revenue Code), in which event only such portion will be redeemed. Rights and remedies of holders of the Bonds could be limited in the event of a Determination of Taxability. See "CERTAIN BONDOWNERS'**RISKS~** Possible Loss'ofTax-Exempt Status of Interest on Bonds." Extraordinary Mandatory Redemption by the Authority · The Bonds are subject to extraordinary mandatory redemption at the option of the Authority on any date at a redemption price equal to 100% of the unpaid principal amount of such Bonds to be redeemed plus acc;rued interest thereon, if any, to the date of redemption as follows: (a) in whole, upon receipt by the Trustee and Continental of a notice from the Authority that ( 1 ) Continental has failed for twelve consecutive months, without first obtaining the prior written 

### 29 

# i,-

# I 1j 

## \I " consent Of the Authority, tocontinue to operate the Project ortocause the Projectto be operatedas an authorized,project within the meaning ofthe Act; ('2[ any representation or warranty made by Continental in either Lease Agreement or in any. other document furnished in connection with the Lease Agreements proves to have been false or misleading in any material respect when made; (3) Continental has failed to maintain or cause to be maintained the liability insurance required

**pursua~l** to

**t~e.!--ease** Agreements forthe benefit ofthe Authorityfor 30 consecutive daysand foran additionalthre? Business Days after notice bythe AuthoritYto Continental of such failure; or (4) the Authority is unable



### t~ exere<ise its right ·to specific performance of any covenant of_ Continental pursuanrto

**'eithei·[~ase**Agreement due to thefactthatsuch-speqific

**perfo~ance** would constitute a breach or default ofor would conflict with or violate the PortAuthority Leases

## oreither of them or involve the· specffic enforcement of.any covenant of Continental underthe Bond Documents relating to or-ofa-Property Interest itthe performance ofsuch covenant would constituteabreach of the Port Authority Leases or either oHhem; or (b) in whole, or in part ifsuch partial redemption will preservethe exclusion from gross income as evidenc8d'-b/arr.cipinion ofbond counsel, if the whole or a part of the Project is damaged or · des\foyecf·dondemn<'!d or taken-by eminent domain, and Continental elects notto rebuild, replace,

repair,or restore· trie'- Project;'provided, however that the Bonds are not subject to mandatory redemption in··accordancewiththis·subparagraph if c'ontinental receives an opinion of McCarter & English; LLP (or if McCarter& English, LLP ce'ases to exist: fromany successorfirm to McCarter& English, LLP, or if there is no successorfirm, any nationally recognized bond counsel designated by Continental_ iJQcj,

**rea~mnably** acceptable to theAuthority)· to the effect that the Project would still constitute an.airpoct-_that._is an exewp!Jacility within the meaning of Section 142(a) (1) of the Internal Revenue ,Code or.omat failure to rebuild, replace, repair or restore would not cause the interest on the Bonds to be includable in gross income for federal income tax purposes. Extraordinary Mandatory Redemption Upon Exercise of Purchase Rights by the Port Authority

. .

-t·:·-,·

...,-The Bonds are subject to extraordinary.mandatory redemption prior to maturity at any time at a redemption price equal to 100% oithe unpaid princ;ipal amount thereof plus accrued interest (if any) thereon, to the redemption date, to the extent of and as soon as practical following the Trustee's receipt of any moneys received bythe Trustee as a result of .the exercise by the PortAuthority of its purchase rights under.-the .Terminal C Fac_ility Lease following a Leasehoid Mortgage Event of Default See ''SECUf3lTY FOR Tf-IE BONDS-Leasehold·Mortgageand Reletting- Con_ditions Precedentto Foreclosure -e,BuyOutFlights

# 'oiPort Authority Priorto Foreclosure" and ,"CERTAIN BONDOWNERS' RISKS

- LirnitationdJpon

**_Trust~e·~ a~dBondhplders'**  Ability I() Realize Benefits of theLeasehold Mortgage

-

**Limitatio~,s** on. Receipts from Leasehold Mortgage; Obligations Undersecured"

.. Selection 

### o(Boncls to l:>e Redeemed

• L.

**·~·.** _,.,_ •• ·-·' • • • • ••

. Whenever less'!f{afi'aO of'tfle Bonds are to be redeen1ed, Continenial will select the maturity of the Bonds to _be redeenied,'iind within a'maturity,'the Trustee'Will select the specific Bonds to be redeemed by lot Whenever Bonds to be redeemed are required to be selected by lot, theTrustee will be authorized to drawby,)otthe numbers of,,the Bonds to. be,redeemed i.n any manner deemed reasonable by the Trustee"ln ttie case of a Bond of a.denomination greaterthan $5,000, the Trustee will treat each such Bond as.



### repres~nting such- number of separate Bonds, each of the denomination of $5,000, as is obtained by dividing the actual principal amount of such Bond by $5,000, with any remainder amount after so dividing by $5,000 to be added to and_considered part of one otsuch.separate Bonds. 

### . •, .._, - .. . . ·' Notice of Redemption The Tru;tee,



## 6ri'b~h~lf ofthe 1\utnorr.t\i:



## sli~ll give notice by mailing notice ofthe call_for redemption of the Bonds by first class mail, postage prepaid, at least 30 days butno more than 

### 60 days prior to the datefixed forredemption, tothe registered-owner of each Bond subjectto redemption in whole or in part atthe registered owner.'s addressshown on:the registration books. Any notice mailed in accordance with 30the requirements of the Indenture shall be conclusively presumed to have been given, whether or not such notice is actually received by the Bondholders. Failure to receive notice of redemption, orany defect in that notice, as to any Bond shall not affect the validity of the proceedings for the. redemption of any other Bond. Any optional redemption for which notice is given may be conditioned upon the depositwith the Trustee not later than the date fixed for redemption of moneys sufficient to redeem all Bonds called for redemption as described in the Indenture; and such notice shall be of no effect unless such moneys are so deposited. All Bonds, or portions thereof, so called for redemption will cease to bear intereston the specified·date fixed for redemption, provided funds for their redemption are on depositwith the Trustee at that time, and shall no longer be considered outstanding under the Indenture. So long as DTC or its nominee is the sole registered owner of the Bonds under the Book-Entry-Only System, redemption notices will be sent only to DTC. Any failure on the partof DTC or aDTC Participant0r Indirect Participant to notify the beneficial owner of a book-entry interest in the Bonds so affected shall not affectvalidity of the redemption.

. · · Except when DTC or its nominee is the sole registered owner of the Bonds pursuant to the BookEntry-Only System, if less than all ofthe Bonds are to be redeemed, the Bonds to be redeemed will be selected bythe Trustee. Mandatory Tender of the Bonds The Bonds other than the Term Bonds maturing September 15, 2012 are subject to mandatory tender and purchase, initially on any Tender Date selected by Continental on or after September 15, 2009, as a whole or in part, at a price equal to the principal amount thereof plus premium (if any) plus accrued interest (if any) thereon to the date of purchase on 30 days' notice. Bonds previously tendered will become subject to mandatory tender for a second time on any Tender Date selected by Continental occurring on or after the date, if any, when such Bonds·would then be subject to optional redemption. The amount of any premium that is due as part of the purchase price in connection with any mandatory tender of Bonds is the amount that would be due ifContinental exercised its right to optional redemption on such date (see "- Optional Redemption" above). Unless there is an Event of Default underthe Indenture and the Remarketing Agent elects not to do so, the Remarketing Agent will offer for sale and use its best efforts to sell the Bonds to persons other than Continental and theAuthority and their affiliates and·insiders ataprice equal to the principal amount thereof plus accrued interest (if any) thereon to the Tender Date, and the proceeds of such sale, together with any moneys furnished by Continental for the purchase of the Bonds under the Lease Agreements will be used to pay for the mandatory purchase. These are the only sources of funds that may be used for the purchase of the Bonds. See also "-Interest Rate Adjustment'' above. Any Bondto be purchased on anyTender Date that is notdelivered by the Bondholderthereof to the Tender Agent on such Tender Date will nonetheless be deemed to have been tendered by the Bondholder thereof for purchase and to have been purchased, if moneys for such purchase have been deposited with the Trustee or made available to the Tender Agent on or before such Tender Date in accordance with the Indenture. Thereafter: · (a) the Authority shall execute and the Trustee shall authenticate and deliver,a new Bond or Bonds in the same aggregate principal denomination as the.Bond deemed to have been tendered and purchased to the person to whom the Bond deemed to have been tendered and purchased would have been delivered, and the Trustee shall register such new Bond in the manner provided in the Indenture; (b) such Bond deemed to have been tendered and purchased shall no longer be outstanding under the Indenture; · ' ·· (c) intereston such Bond deemed to have been tendered and purchased shall cease to accrue to the former Bondholder thereof as of such Tender Date; 

### 31 

# l '.'

, I 

### l:



## ri i '

; 'i(d) the former Bondholder ofsuch Bond shall cease to beentitled to the benefits and security ofthe Indenture as of such Tender Date, except to receive the moneys representing the purchase price of such Bond against delivery thereof at the principal office ofthe Tender Agent; and

.. 

## (.~). the



## Trust~e will not register, nor.will the TenderAgent, the Trustee (in such capacityand as Paying_Agent). recognize, any furtheqransfers ofsuch Bond bythe former Bondholder thereof. At



### th~·**~xpense** ofContinent$, th·e TenderAgent will promptlygive notice bymail to the Bondholder of any Bond.which is-deemedto have been tendered and purchased. Moneys to'be. used .for the purchase of any.Bqrid deemed to have been tendered and purchased shall be deposited with the Tender Ageni andheldin'irustby the Tender Agent in a separate escrow account,·without liabifity for interestthereon;and shall be paid to the former Bondholder of such Bond upon presentation thereof. Exceptas provided in theto/lowing paragraph, the former Bondholderofsuch BondshaiJ,thereafter berestricted exclusivel>e to,such. moneys for the satisfaction of any claim of vyhatever nature on its part under the.lndenture or on, or with respect to, such Bond. Any moneys which the TenderAgent holds in trustfor the payment 

### ofthe principal amount of any Bond deemed to have been tendered and purchased and which remain unclaimed shall be applied pursuant to the terms ofthe Uniform Unclaimed Property Act, N.J.S.A. 46:30B·1 et seq: ·

· CERTAIN BONDOWNERS' RISKS ·.:·:. 'o'

**.,.~,** The following sectiondescribes certain

**ris.~**. .factors affe.ct[ng the payment of and security for the Bonds, The following discussion is notmeant to be an exhaustive.lio.l ofall the risks associated with the purchase

## ot thi'J Bonds and does not necessarily reflectJhe relative importance of the various risks. In evaluqting the.Bonds, potential investors should consider,.the to/lowing risk factors along with all other information described elsewhere or incorporated by reference in this Official Statement. Obligation of Continental as Primary Security; Certain Risks with Respect to Continental Payments of Facility Rent byContinental underthe Lease Agreements and any amounts payable by Continental underthe Guaranty will constitute the principal security (otherthan available unspent Bond proceeds and any proceeds recognized pursuant to.the.Leasehold Mortgage) foF the payment of the principal and purchase priceand the redemption price, itany, ofand intereston the Bonds. Although the obligation ofContinental to make payments underthe Lease Agreements and the Guarantyprovides that any required payments thereunder will be an absoiUti'J and unconditional general obligation ofContinental, the payment of such amounts will bedependent upon thefinancial condition and results ofoperations of ContinentaL· · ·· ' "

.·.; ·- :,i:• . . , C()ntinental,is subjec.tto the informational requirements of the Securities.ExchangeAc,t of 1934, as· am,nded, and in accordance therewith files reports. and other information with-' the Securities and Exchange Commission, Certain infonmation with respect to Continental, Express and CMI is furnished above underthe caption "CONTINENTAL AIRLINES, INC." and in Appendix A hereto and incorporated therein

## by reference from materials on file with the'Securities and Exchange Commission, In addition to sUch information,·prospective purchasers ofany ofthe Bonds should consider thefollowing risk factors relating toContinental:
· ' · · '· RiskFactors Relating to Continental

.

**-~**

### .. Leverage andLiquidity. Continental has a higher proportion of debt compared to its equity capital than some of its principal competitors. In addition, Continental's cash resources are less than some of its principal competitors. A majority of Continental's property and equipment is subject to liens securing indebtedness. Accordingly, Continental may be less able than some ofits competitors to withstand a 

### 32' '' prolongedTecessionin ·the airline industry or respond as flexibly to changing economic and competitive conditions. As ofJUne 30, 1999, Continental had: · $3.1 billion (including current maturities)of long-termdebt and capital



## i~ase obligations.
. 

# . . . .
. $1 .6 billion of common stockholders' equity. $1.3 billion ·,n_ cash ancj cash equivalents (excluding restricted cash and cash equivalents of $11 million)

. · · · ·· · $225 million available'to be drawn under general lines of credit'. Continental haic



## s~bstantial commitments for



## c~pital **expendit~res,** including for theacquisition of new aircraft. As of August 1, 199.9, Continental had agreed to acquire a total of 99 Boeing jet aircraft thrdugh 2005: Continental also hasoptfons for an additional' 121 aircraft (exercisable subject to certain conditions). Tfie estimated aggregate•cost of Continental's firm commitments for Boeing aircraft is approximately $4.7 billion. Continental currently plans to finance-its new Boeing aircraft with a combination of enhanced pass through trust certificates,'lease equity and other third party financing, subjectto availability and market conditions. As of August 1, 1999, approximately $897 million in financing had been arranged for such future Boeing deliveries.



### . . As ofAugust 

### 1,)999, Express had firm


## co~mitments for27 Embraer ERJ-145 ("ERJ-145")50-seat regional jets and 25 ERJ-1:35 :i7-seatregional jets, with opiions far-an additional125 ERJ-145 <>nd 50 ERJ-135 aircraftexercisable through 2008. Neither Express norContinental will.h.ave any obligation to take any such firm aircraftthat are not financed by athird party and ieased toExpress or Continental. In thefourth quarter of 1998, Express began the previously announced accelerated retiremeni of certain turboprop aircraft. · · · · · · · Continental expects to finance certain of its capital commitments through operating leases, which will increase its operating expenses. For 1998, cash expenditures under operating leases relating to aircraft approximated $702 million, compared to $626 million for 1997, and approximately $263 million relating to facilities and other rentals, compared to $236 million in 1997-. Additional financing will be needed to satisfyContinental's capital commitments: Continental cannot predictwhethersufficientfinanc:ing will be availablefor capital expenditures notcovered byfirm financing commitments. . - . Continental's History

..of,Operating Losses. Continental recorded net .income of approximately $221 million in the /irs! six months of 1999, $383 million in.1998, $385 million in 1997, $319 million in 1996 and $224 million in ·1995. However, Continental experienced significant operating losses in the prev·lous eight years. Historically, the financial results. of the U.S. airline industry have been cyclical. Continental cannot predict whether current industry conditions will cohfinue.

. Aircraft Fuel

. .Fuel costs constitute a significant portion of Contin.ental's operating expenses

.. Fuel costs were· approximately 7.9%· of operating expenses for the six month'S ended June 30, 1999 and 10.2% for theyear ended December 31, 1998 (excluding fleet dispositionIimpairment loss). Fuel prices and supplies are influenced significantly by international polit'<cal·and economic circumstances. Continental· enters into

.. petroleum·

..swap contracts, petroleum call option contracts and jet·fuel purchase. commitments to provide some short-term protection (generally three to six months) against a sharp increase in jetfuel prices. However, significantchanges in fuel costswould materiallyaffect Continental's· operating results. If

## afuel supply

**.shortag~** were to arise fro'1' a disruption of oil imports orotherwise, higher fuel prices


### orcurtailm~~~O .. f



### scl)~du.led airline service could result. , · Labor Matters. In· September 199c, Continental announced its intention to bring all Continental employees to industry standardwages no laterthan the end ofthe year 200Q. Wage increases began in 1997 and will continue to be phased ih through the year 2000. 33The current status of Continental's and its subsidiaries' principal labor union agreements is as follows: Continental's Pilots. In June 1998, Continental's pilots ratified a five-year collective bargaining agreement, retroactive to October 1997. The agreement becomes amendable in October 2002. ', '' ' ''· 'iJ' Express' Pilots. In December 1998, Express and its pilots executed a new agreement. This agreement will become amendable on October i ,: 2002. ·. - · · ''
• FlightAttendants. The flight attendants atContinental, Express and CMI, Continental's subsidiary

based in Guam, are covered by collective bargaining agreements that become amendable on December 31, 1999, November 1, 1999, and June 30, 2000, respectively. Dispatchers.· Continental's dispatchers ratified a newfive-year collective bargaining agreement in July 1998. The agreement becomes amendable in October 2003. · Mechanics. ·Continental's mechanics are·covered by a newagreement signed in January 1999 that becomes amendable January 8, 2002. _CMI's. mechanics

.are -.covered by a collective bargaining agreementthatbecomes amendable March 31, 2001. Express'-mechanics ratified an initial collective bargaining agreement in.July_i999. The_agreement becomes. amendable in July 2003. Risks Regarding ContinentalINorthwest Alliance and GlobalAlliances. In November i 998, Continental and Northwest began implementing the Northwest Alliance, a long-term global alliance involving extensive code-sharing, frequent flyer reciprocity and othercooperative activities. In a related transaction, on November 20, 1998, a Northwest affiliate acquired securities representing approxim-ately 14.5% of Continental's equity from Continental's principal shareholder and certain other parties. These acquired securities, together with additional Continental equity securities for which the Northwest affiliate holds a limited voting proxy, represent approximately 52% of the fully diluted voting power of Continental. Continental's ability to implement the Northwest Alliance successfully and to achieve anticipated benefits are subject to certain risks and uncertainties, including: · • Disapproval or delay by regulatory authorities or adverse regulatory developments.

Competitive pressures, including developments with respect to alliances among otherair carriers. Customer reaction to the alliance, including reaction to differences in product and benefiis provided by Continental and Northwest.
• Economic conditions in the principal markets served by Continental

### ~nd Northwest.
• Increased costs or other implementation difficulties, including those·caused by employees.
• Continental's ability to modify certain contracts that restrict certain aspects

### ~{theailiance. On October 23, 1998, the Department of Justice ("DOJ") filed a lawsuit against Northwest and Continental challenging Northwest'sacquisition of an interest in Continental. The.DOJ cjid not seek to preliminarily enjoin thetransaction before it closed on November 20, i 998, nor.is the DOJ challenging the Northwest Alliance at this time, although it is continuing lo investigate.certain specific aspects of the alliance. Continental is in the process of implementing the alliance with Northwest. While it is not possible to predict the ultimate outcome of this litigation, Continental believes that this litigation will not have a material adverse effect on .Continental. Continental has engaged in discussions with Northwest, Alitalia and KLM regarding the formation of a global group that would compete with the other global groups thai have ·already formed or are in formation. These negotiations have not yet concluded. If Continental is able to form a global group with these other carriers, this global group will be one of the smaller of th.e global groupsthat are currently in formation. If Continental and its group members are not able to achieve a sufficiently high level of 34coordination

.and

.integration

.of.their adlvities

.as compared ·to the <COOrdination and

.integration of competing groups, Continental could experience anadverse impact on its traffic and yield performance. Because of Continental's strategic positions:in New York City and Latin America, which provide to it a greater degree :of self-sufficiency, Continental· does not believe that any adverse impact would be material. •,.,..,, . _

• <
. • " • • "t.

. - ... :
.. -:(·.

**~** . ' r : ._ • • , _ •• • Year 

### 4000. Computerized systems are. essential to Continental's operations

.. Many

..computer prcigrams'in use around the' world use only twodigitsto identify the applicable year_and do riot take account of the change in century that will occur in the year 2000. If this problem is not corrected, computer applications rcould -fail --or ·create mistakes. As a result, Continental has·'implemented a Year 2000 project thar.is•iritended to allow-Continental's computer systems to function properly in the year •2000·-andJ.thereafter;e-Continental be1ieves .that·theccyear 

### 2000: issue will not pose significant operational problems•for its computer systems: ·- ·

. ::,1

.. --'0::'

**-:;<~-** .: '

**~--** •. ·-: ::o
-·. 

### <· ,_.;•
.

--:09(\tinental has alsocontactedits significant suppliers and vendor<;

**wjt~** whorl) its systemsjnte_rface or upo!J _whom-its pusiness depends. Continental.is

**worki~g**_wi!hthese.parties to minimize.the extent-to which its business will_b_,.,_vulnerable tq their failure to remediate their Year-2000 issues. Continental's business is also dependent upon certain governmental agencies, such as the.FAA, that provide essential services to the aviation'industry:Continental cannot-predict whether the systems'ofsuch third parties on which Continental's business· relies (including''those of the FAA) willbe modified on a timely basis. ··

··· Continental's business, financial condition and results of 'operations could be materially adversEllY affected if its systemsorthose operated by other parties on which Continental's business depends-fail to operate properly beyond 1999. •
.. RiskFactors Relating hJ the



## Air/in~ lndu;try 

### Competition and'tndustr/Conditions. The airline industry is highly competitive and susceptible to price discounting. Carriers have used-discount fares to slimulate traffic during periods of slackdemand; lei generate cashflowand ioincrease marketshare. Some of Continental's competitors'have substantially greater finan'Cial resources or lower cost structures than continentaL

.. . .

- - -·

**.~** ' · ..':"· . . ,.. Airline profit•levels are highly sensitive 

### to changes in fuel·costs, fare levels and passenger demand. Passenger demand andfare-levels have in the past been influenced by,·among other things;·the general state of the economy (both in international regions and domestically), international events, airline capacity and pricing actions taken by carriers. For example, the operating results of CMI declined during 1996,.1.997 and 1998. as a .resuiL.of the continued weakness-of the yen against th!3•dollar, a
..weak Japanese economy and increased fuel costs. Domestically, from 1990 to··1993, the weak U.S.-economy, turbulent international events and extensive price discounting by carriers contributed to unprecedented losses for U.S. airlines·c·lri the last several years; the 

## u.s.· economy ·has improved and excessive price discounting has abated. Continental cannoi predict the ·extent fo whichthese industry conditions will coritin·ue. · ·

**-~-** • ' .:y

**.:;~** .-.. ··

### ... · In recent·years, the.major l:J.S. airlines-have sought to form marketing alliances with other U.S.•and foreign air carriers. Such alliances, generally. provide for "code-sharing'',·frequent flyer--.reciprocity, coordinated scheduling of flights of each alliance member to permit convenient connections and other joint marketing activities, including ticketing practices and the· treatment ofcustomers. Such ·arrange: ments permit.an airline to:market flights operated by other alliance members as its .own; This increases the destinations, connections and frequencies offered by the airline, which provides an opportunity to increase traffic-on such airline's segment oUiights connecting with alliance· partners. The Northwest Alliance is an ·example of such an arrangement, and Continental has existing alliances with numerous other air carriers: Other ·major U.S.-·airlines have alliances or planned alliances more extensive than Continental's.alliances. Continental cannot predict the extent to which Continental will benefit from·its alliances or be disadvantaged by competing alliances. 

### 35 li


# i ,\1 [!. 

### I •' 

### i' ·II



### j~ 

# I·

# l

,, RegulatoryMatters. Airlines are subjectto extensive regulatory and legal compliance requirements. These.requirements impose substantial costs on airlines. In the last several years; the FAA ha$ issued a numberofdirectives and other regulations relating to the maintenance and operation ofaircraftthat have required significant.expenditures. Such FAA requirements 

### cover, among otherthings, retirement of older aircraft, security measures, collision avoidance systems, airborne windshear avoidance systems, noise abatement, commuter aircraft safety and increased inspections and maintenance procedures to be conducted on·oider aircraft. Continental expects to continue incurring expenses in complying with the FAA's regulations: · · · Additional-laws, regulations; taxes and airport rates and-charges have been proposed from time to time that could significantly increase the cost of airline operations or reduce revenues. Congress and.the DOT have also proposed the regulation ofairlines'.competitive responses and other activities. Restric, !ions on the ownership and transfer of airline routes and. takeoff and landing slots have also been proposed. The ability of U.S. carriers to operate international routes is subject to change because the applicable arrangements between the United States and foreign governments may be amended.from time totime, or because appropriate slots orfacilities are not made available. Continental cannot provide assurances that laws or regulations enacted in thefuture will not adversely affect Continental. '

. 

### -. ' ;,•- The. Federal Aviation Administration has designated John F. Kennedy lnternationa,l Airport ("John F. Kennedy"), New York LaGua.rdia Airport·. ("LaGuardia''), Chicago O'Hare International Airport ("O'Hare") and Ronald Reagan Washington National Airport in Washington D.C. ("Reagan National") as "high density traffic airports'' and has lim'!ted the number of departure and· arrival slots at those airports. Currently, such slots may bevoluntarily sold ortransferred between carriers. The DOT has in the past reallocated slots to other carriers and reserves the right to withdraw slots. Various amendments to the slot system proposed from time to time could, if adopted, significantly affect operations at high density traffic airports, significantly change thevalue of the slots, grant slots to other carriers or for route oraircraftspecific usage, expand slots'atotherairports or·eliminate slots entirely. The DOT has proposed the elimination of slot restrictions at high density airports other than Reagan National. The full House of Representatives has passedlegislation containing a similar proposal which could eliminate slots as early as 2002 at O'Hare and

**:200~** at LaGuardia and John F. Kennedy, and which doubles the maximum passenger facilities charges permitted to be charged by airport authorities. Continental cannot predict whether any of these proposals will be adopted. However, iflegislation or regulation eliminating slots is adopted, the value of such slots could be·deemed to be permanently impaired, resulting in a loss being charged to Continental'searnings forthe relevant 'period. Moreover, the elimination of slots could have an adverse effect upon future results ofoperations of Continental. 

### ·•.· Certain Considerations Under the United States Bankruptcy Code with Respect io the Lease Agreements and the Guaranty



## -~~ the.



## ~~ent a bankruptcy, case.;$ filed with ;e;pect to Continental, a.bankruptcy



## co~rt could <;fetermine that theLease Agreemen.ts are. executory contracts or unexpired leases pursuant to Section 365 of the United States Bankruptcy Code. In that event, atrustee in bankrupicyor Continental as a debtor-in-possession might reject one or both of the Lease Agreements. Under the United States Bankruptcy Code,- any rejection of one or both of the Lease Agreements could result in a claim for damages against Continental

..in connection with the Bonds,_which. claim would rank as that ofa general unsecured creditor of Continental. II a.court determined that the Lease Agreement(s) were unexpired leases of non-residential real property, the amount of any su.ch corresponding claim would be limited to the rent payable under the Lease Agreement(s) (without·acceleration) for the greater. of one year or 15%of the remaining term of the Lease Agreement(s) , but not to exceed three years, following the earlier of (a) the date the bankruptcy petition was filed and· (b) the date on which Continental surrendered the leased property under the Lease Agreement(s), plus any unpaid rentals under the Lease Agreement(s) (without acceleration)· on the earlier of such dates. In this event, any claim with respect to the Bonds that do not mature (absent acceleration) within the period of one year or 

### 15% of the remaining term of the Lease Agreement(s) (but not in·.excess of three years) following the 36' ' 

### bankruptcy commencement date (i.e., the earlier of (a) or (b) above) could be limited'to the interest which would accrue on the Bonds during such period and may not permit a claim for the recovery of principal. See "-Limitations Upon Trustee's and Bondholders' Ability to Realize Benefits of the Leasehold Mortgage- Effect of Continental Bankruptcy" below.

## Pur~uant to the terms of the Guaranty, Continental will unconditionally

## guarant~e'

# tdthe

## Tru~tee, for the benefit of the owners of the.sands, the full and prompt payment·of the principal, purchase price and redemption price, if any' of SllCh Bonds when and as the same shall become due and payable as provided in the .Indenture, \'Vhether at the state<:!. m-aturity th-ereof, by redemption, acceleration or otherwise, and the full and prompt payment of the interest on the Bonds when and as the same shall become due and payable as provided in the Indenture

..The obligations covered by the Guaranty are intended

### bythe parties to be independent oi those set out i.n the Lease Agreements (and thereby not subject !De 

### the Bankruptcy. Code limitaiions ,on clilims for darilflges with respect to non-residential real property. leasesdiscussed above) and to be enforceablewithout regard to thevalidity orenforceability of the Lease Agreements

## oi a(lY obligation.of Continental-contained therein. In the event a bankruptcy case were filed with respect·-io Continental, the Trustee might file a claim pursuant to the Guaranty, independent of any elaim.under the Lease Agreements and Indenture, for the payment of all amounts, if any, required for the paymentofthe principal, purchase price and redemption price, ifany, of and interest on the Bonds when due. Such claim, if allowed, would rank as that of-a general unsecured creditor of ContinentaL A bankruptcy court could determine;· however,.that-the.Trustee's claims underthe Guaranty should be limited to the same extent as the Bankruptcy Code limitation of claims for damages with respect to nonresidential real property leases described above in connection with claims underthe Lease Agreements. No assurance can be given that the Trustee's claims in connection with the Guaranty will not be so limited. If so limited, the Guarantywould provide no additional security for payments due on the Bonds. No representation or warranty is made·by Continental or any other party that any claim under the Lease Agreements or the Guaranty will be allowed or that any recovery on any such claim will be permitted under the United States Bankruptcy Code. Limitations Upon Trustee's Ability to Accelerate Facility Rent Upon certain payment-related events of default under the Indenture, the Trustee may declare all amounts owed under the· Bonds immediately· due and payable. The Lease Agreements provide that Continental must pay Facility Rent in an amount sufficient topay all amounts when due upon the Bonds; upon acceleration or-otherwise. New Jersey law concerning real property leases provides- for certain remedies. available to a lessor for breach of a· lease for real property; and acceleration of all rental payments due under the lease may not be an available remedy. A court could conclude that the requirement that Continental pay Facility Rent in an amount equal to the amount due on the Bonds following·an acceleration of the Bonds is, in effect, an impermissible acceleration of the rent due under a lease'for 'real property and refuse to enforce the payment. .-··

. . .**I"~:..,;'.** i

. ..- '

.. 

### Limitations·Upon Trustee's and Bondholders' Ability to Realize Benefits of the Leasehold 

### Mortgage ·• · Upon and during a Leasehold Mortgage Event of Default the Trustee may seek to foreclose upon Continental-'s leasehold interests in Concourse C-3 underthe Terminal C Facility Lease and assign such interests. to a Qualifying Replacement Tenant. The Qualifying Replacement.Tenant would similarly assume Continental's obligations under the Concourse C"3: 

### Lease Agreement to make payments in respect of all or (with the approval of Bondholders owning at least 75% of the then-outstanding principal amount of the Bonds) aportion ofthe Bonds when due.orwould negotiate a separate arrangement with the Trustee guaranteeing repayment of the Bonds. See "SECURITY FOR THE BONDS- Leasehold Mortgage and Reletting" for a more detailed discussion of the leasehold mortgage rights granted to the Trustee. Certain practical and legal considerations, however, could inhibit or materially delay the Trustee's ability to foreclose upon its interests in the Terminal C Facility Lease or locate a Qualifying 

### 37ReplacementTenantfor Concourse c,3, orotherwisepreclude.the receiptofsufficientrevenuesfollowing a foreclosure to repay all the f?onds. ,,. ". · ''··. Umitations on Receipts from Leasehpld.



# Mo~gage; **Obiigf'tion~··** Undersecurech

.']"he Le;:tsehold Mortgage precludes the Trustee and Bondholders from ,recovering any amounts' in excess of the "Mortgage Amount": initially$5'5o,oob,OOO,' pursuan't to any toreclosure·unilerti\e Leaseliofil Mortgage. lri addition, the LeaseholdMortgage provides that the' Port Authority has tne'opticin 

### cit "l:iuying-ciut'' the Trustee's and Bondholders' rights iJn&rthe Leasehold Mortgage following a Leasehold Mortgage Event of Default 

## bY payniehtto tHe Trustee of the MOrtgage AmOunt and.certain other limited sums· (which amounls would be used toeffectamandatory redemption of Bonds as described under''THE

**BONDS'~** Extraordinary Mandatory Redemption 

## ·up6n

. Exercise·of'.Purchase· Rights by 

## the 'Port·Authority'')'.The Bonds aie'being issued in the cirigirlal priridpal anriourit of$Y30,360;000:Consequently, upon' and following a Leasehold Mortgage Everlf-'i:if Default;-the Trustee may not be able to recogni:Ce' suilitient

. ·- . . . 

### .·

- -.. -. -' .... '


### . . -.-,-· ,; ···-:· 

### ,. ,, proceeds from the fore'closure orthreatened foreclosure of its security interest in Concourse C,3.iri order to 

### repay all of th6 BOnds. See ''THE BONDS

**~-Selecti9ri** of B6rids-:t6 be Red8eiiied';. ,..

**·---~** !• •

- ;', • ' • ', '>.--' ·Uncertain Gate Demand;Availability-ofCompeting Facilities. The likelihoodthat the'Trustee ·would be ·able to find· a-.Qualifying Repla:cemef\t Tenant .for Continental's ConcoUrse".C·3• gates would be affected· by the supply of and demand'for gates at the Airport and iri·thegreater··NeWYork area. Such supply and demand cannot be predicted ·at'this time and

**~could** be affected by such factors as an economic downturn in the area at the· time the Trustee is seeking a Qualifying ReplacementTenant Further; in addition to Concourse·

### {>:Y, the Terminal C Facility· Lease covers !he gates and space in Concourses.

**C~**1 and C-2 at the Airport It is possible 'that if Continental-has defaulted under the Terminal C Facility•Lease;the Port Authority· would endeavor to relet Concourses C-land C-2 at the same time the Trustee is attempting to seek a Qualifying Replacement Tenant for Concourse C'3. Particularly.given the requirements that aoy Qualifying Replacement Tenant for Concourse C-3 make certain·payinimisasdiscussedfurther under·;-..:Assumption of Disproportionate Boniiobiigations:' and "___:Payment ot''Deferred Reletting Fee' tothe Port Authority'' below, the,availability .of competing facilities without those pricing requirements could make itmore difficult for· the Trustee to locate

# a Qualifying Replacement Tenant for Concourse C-3. •""

.. , , ··;.. -, ,,, .

, cFUrther, while m.ost of Continental's traffic at the Airport consists.of origination-and-destination passengertraffic;

### .a.significant portion of its operations supportpassengertraffic thatis not originated in, or ultimatelydestinedfor, theAirport.The factthat manyof Continental'sfacilities attheAirport,.including its gates, are sized toaccommodate.significant.hubb,ing activitycould make it·unlikelythaU:Iemand for ail of such facilities will

..be- as great .For further discussion, seeAppendix E-c-.Analysis

**of~** Potential.Gate Demand. ,. , ,.-·,· ·r; · 'i· ;

. · ·-·. · ·

**-~** · ·· .· ;
. .;:i,, :< : : ,·1, ·
.. , .Assumption 

## of Disproportionate Bonci Obligations. Because of the ar;nortizatipn-.whedyle. for the Bonds, ttie.



### rental~payments under the Lease)greements.,towards the, end.of th.e



### )eas~ te(ms

..will 

# be. greaterthan earlier rental payments. As a result,



### ~the Trustee's abilityto secure aQualifYing Replacement Tenant willing.to pay rent L!nder..the Concourse

## 813 LeaseAgreementon the,same·basir; as continental towards the end of the stated



### ·i~rm ofthe Concourse



### C~3 LeaseAgreement couldbe



### adverse.ly~affected,

. ·"

**~** >::. ·.•. Effectof Continentaf,Bankruptcy. ·In addition to giVing, rise to the possibility of limited damages against Continental as described above under.

### ...I'- Certain Considerations Under the United States Bankruptcy Code with· Respect to the. Lease Agree·ments and the Guaranty"; certain· procedural and substantive provisions of•the United-States Bankruptcy Code could significantly-delay•or inhibit during a bankruptcy of ContinentaHhe.Tru'i;tee's,. ability to cause' Continental to surren'der:aoy or all of Concourse C-3 so that Contiflental's leasehold interest in such facility could be assighed.to a Qualifying Replacement Tenant: lri. particular, whilfith·e Leasehold Mortgage would permit the Bondholders· to be treated as secured crec]itor:sin·a.bankruptcy proceeding ihvolving Corrtinental;·an:automatic stay.against foreclosure on the.Leasehold Mortgage could mean thatthe·Trustee would-not be able toforeclose on

## the Leasehold Mortgage and obtain a Qualifying Replacement Tenant·.for Concourse C-3 during the 

### 38pendency of the bankruptcy proceeding. In contrast, Continental could seek to suspend its payments in respect of the Bonds during the pendency of any bankruptcy proceedings. Limited Foreclosure Period. If Continental does not consent to the assignment of its rights and obligations with respect to Concourse C-3 to a new tenant following a Leasehold Mortgage Event of Default, the Trustee will have a maximum of 720 days following the delivery by the Trustee to'the Port Authority of a notice of the Trustee's intention to exercise its rights under the Leasehold Mortgage to foreclose upon its security interest in Concourse C-3 pursuant to the Leasehold Mortgage. Under New Jersey law, the Trustee must comply with many procedural requirements toforeclose on the Leasehold Mortgage. These include time-consuming filing and notice· requirements. In addition, a judgment of foreclosure must beobtained from applicable administrative andIorjudicial authorities and acted upon by the local· sheriff. It is possible, particularly if Continental or any of its other creditors challenge the foreclosure, that tlie Trustee may not be able to foreclose within the 720 day time period arid, in such event would lose its right to obtain a Qualifying Replacement Tenant for Concourse C-3. Trustee's Obligations During Foreclosure Period. As a condi!Lon to exercising its rights.under the Leasehold Mortgage, the Trustee is responsible for all accrued but unpaid Ground Rent and Airport Service Factor Charges and.up to 60 days of all Activity-Based Charges allocable to Concourse C-3, including ftight fees, at the time the Trustee delivers a reletting election notice to the Port Authority. Further, the Trustee· will be responsible for paying all current Ground Rent, Airport Service Factor Charges, Utility Security ana Maintenance Costs and Activity-Based Charges allocable to Concourse C-3 and not paid by Continental unde"r'the Terminal C Facility Lease from and'after the date it elects 

### l<i enforce its rights under .the Leasehold Mortgage. See "SECURITY FOR THE BONDS- Leasehold Mortgage and Reletting" above. The Indenture provides for a Leasehold Mortgage Reserve Fund to be funded by Continental upon completion of the Project in an amount ($9.6 million) estimated to be sufficient to cover approximately five months·of Ground Rentals and Airport Service Factor Charges allocable to Concourse c:3 under the Terminal C Facility Lease, and two'months of Activity-Based Charges allocable to Concourse C-3 under the Terminal C Facility Lease. While it is intended that this Leasehold Mortgage Reserve Fund will be sufficient to cover. the obligations of the Trustee-during the time before the Trustee is able to locate a Qualifying Replacement Tenant for Concourse C-3 (which might thereafter assume- any further obligations that would accrue during the Foreclosure Period to preserve the effectiveness of the Leasehold Mortgage until it can gain possession of Concourse C-3), there can be no assurance thatthe Leasehold Mortgage Reserve Fund will, in fact, beadequateforsuch purpose, or that any Qualifying Replacement Tenant, if located, would be willing to assumeimy such further obligations that accrue during the Foreclosure Period. Ifthe Leasehold Mortgage Reserve Fund is not sufficient, the Bondholders may be compelled to choose between providing ·additional funds to the Trustee for that purpose on the one hand and losing'their rights under the Leasehold Mortgageon the otherhand. · . Failure to FundLeaseholdMortgage Fund; ProjectCompletion Risks. Continental is required tofund the Leasehold Mortgage Reserve Fund upon completion of the construction of Concourse C-3, which it currently estimates will occur at or about April 2002. The Ttus!ee"s ability to Seek"and finda Qualifying Replacement Tenant to assume and succeed to Continental's interests in Concourse C-3 could be substantially impaired,.or even inhibited, if a Leasehold Mortgage Event of Default were to occur prior to Continental's funding of the Leasehold Mortgage Reserve Fund and, particularly, during the period that Concourse C-3 is under construction. If a Leasehold Mortgage Event of Default were to occurduring this time, no funds would be available to the Trustee under the Indenture for any payments that are required to be made to the Port Authority to preserve the effectiveness of the Leasehold Mortgage while a Qualifying Replacement Tenant is being sought. If any required payments were not made, the Leasehold Mortgagewould terminateandtheTrustee and Bondholders would have no further rights or interestswith respect to Concourse C-3. In addition, the Trustee and Bondholders would have no rights or interests in the construction and related contracts entered into by Continental forthe construction of Concourse C-3. For these and other reasons, if a Leasehold Mortgage jOvent of Default were to occur during the construction· period, the Trustee could encounter particulardifficulties locating a Qualifying Replacement 

### 39 ' 

# I i I 

## I 

## i 

# I I



### I ! 

# I i 

# I 

# II 

# I:i

I! '_ _,_;- 

# r l.t I, ''1

. I. Tenantwho would be willing to assume and succeed to Continental's interests if\ Concourse C-3 as•an uncompleted facility. Finally, although Continental estimates that the construction of Concourse C-3 will be completed on or about April 2002, prospective investors should consider that completion of the construction ofConcourse C-3 by the anticipated completion date could be'adversely affected by such factors as (a) estimating errors, (b) design· arid engineering errors, (c) delays· in the award 'or processing of construction contracts or changes in construction plans, (d) unforeseen site conditions, (e) labor difficulties, (f) adverseweather conditions, (g)·coniractor·defaults and''(

### ti) other construc- tion-related delays. · · .,;,- ,..



### . ' 

## ..

**~·** Requirement for Single Successor. Tenant or Consortium of;Tenants,· The Leasehold Mq[lgage provides that the Trustee may assign the.-Terminal G. Facility Le<J.se only toa single tenant ·or to,_a gonsortium oftenants, each ofwhich '1sjointlyand severally responsible forthe conscortium's liabilitiesand meets certain requirements described under "SECURITY FOR THE- BONDS.-,Leasehold Mortgage and Reletting

**~** Obligations, of.Qualifying Replacement T:enant

**~** Quafifi<;atian Standards", but

.. not: to multiple tenants that are not part of a consortium. This limits the availability of potential Qualifying ReplacementTenants. In addition, the Leasehold Mortgage provides that subsequent tenants·will not be allowed•to mortgage their interests- in Concourse C-3. Thus, !tie Trustee and Bondholders will have'no further- rights or ·Interests in ·concourse C-3 following the assignment- of the facility to a Qualifying Replacement Tenant. · •" • ' '

. . • '

. .:::. 1·-'

. •

. . . • • •

Paymentof"DeferredRe/etting Fee" to the PortAuthority. Asacondition toassuming Continental's rights and interests with respect to Concourse C-3, a Qualifying'Replacement tenant mustpay .to--the Port -Authorityat the time of such



### a~sumption a deierred reletting fee of up to $22-million. 

# See

**'~SECURITY** FOR THE BONDS

- Leasehold Mortgage imd 'Reletting --:- Obligations of Qualifying 'Replacement Tenant- Payment of Accrued Continental Obligation<;>and Deterred Reletting Fee': ,al;>ove. This fee, cand the fact that theport Authority could .lease the. same p;operty to the oame tenant



### immediat~ly**f~llowi.ng** the expiration ofthe term ofthe Foreclosure Perio(J underthe. Leasehold Mortgage (i.e., up to 720 days) without regard to this fee could impairth!' ability oftheTrustee tofind a Qualifying ReplacementTenant.willing toassume Cof\tinental'sobligations.with respecttoConcourse C-3 underthe Terminal C Facility Lease and the Concourse C-3 Lease,Agreement. · ., Limitations

# on SuccessorTenants. Any proposed replacementtenant musttieapproved by boththe Port Authority and·the Authority. As described above under ''SECURITY FOR THE BONDS---'- Leasehold Mortgage' and· Reletting- Obligations of Qualifying Replacement Tenant......:Qualification Standards,'' the Port Authority in particular is entitled to consider a number·6Hacto'rs in -determining whether"t6 provide '1ts consentto aproposed replacement tenant nominated bytlieTrusiee. Someofthe factors!he Port-Authorityinay·consider in deciding wheiher to apilrove:

# a proposed re'placement tenant provide

## the Port Authority witli'-sigriificant discretion to reject any proposed repfa'cerneni teriant who is"otherWise willing and able to assume Continental's rights and obligations under the Concourse c:3 LEiase Agreement and with.respect to c:;oncourse. C-3. • .• No Direct Interestin Project



## lnsura~ce orSimilarPro<io;>eds :;
. . '..;'''

'

**·~** Pursuantto iheTerminal C Facility lease, Continental is requirEid·to maintain casUalty insurancE! with respecttoConcourses C-1, C-2 and C-3-iii an aggregateamount

**nofle~s** than the full replacementvalue thereof. In addition, the Terminal C Facility Lease requires Continentai'toapply the proceeds o(finYiiiich
. . '

. '

. ·. c ,. ., -_. ' --. insurance to rebuild or reconstruct the affected portions of Concourses C-1, C-2 and' C-3·upon the occurrenceof any casualty event orotherloss. Bon-dholders·tiave·no diri!chnterest in any such·insi.mince proceeds orsimilar proceeds. -.- o.·· • ... . . ... Pursuant to the Terminal A Facility Lease, the. Port Authority Will be required to r:naintain casualty insurance with respect to Concourse A-2 in an amount not less than 80%.(90% ifthe enclosed portions are protected by asprinkler system) ofthe insurable value thereof, which may be effected in whole orin part under the PortAuthority's self-insurance plan>. In addition, the,Terminal A Facility Lease will provide that, upon the occurrence of any casualty event, the Port Authority shal.l repair orrebuild..the damaged 

### 40portions of Concourse A-2, unless such repair or rebuilding cannot be completed within 90 days, in which event the Port Authority may terminate the Terminal A Facility Lease in whole or in part. Bondholders will have no direct interest in the proceeds of any such insurance or similar proceeds. Effect on Bonds of MergerorOther Corporate Reorganization of Continental; Absence of Certain Covenants ' The Lease Agreements do not prohibit Continental from consolidating or merging with or into another corporation or entity, orfrom selling or otherwise disposing of all or substantially all of its assets, so long as certain conditions are satisfied. See "THE LEASES- The Concourse A-2/C-1/C-2 Lease Agreement- Continental's.Obligation to Maintain Corporate Existence" and "-The Concourse C-3 Lease Agreement- ContinentaJ's Obligation to Maintain Corporate Existence" in Appendix D. If Continental were to.participate in a merger or other corporate reorganization as permitted· under .the Lease Agreements·, either voluntarily or otherwise, the financial condition and prospects of the surviving or resulting corporation or transfereecould be materially differentfrom those of Continental, and the security for the payment of the Bonds, and the ratings thereon and market price thereof, could. be.adversely affected. · Holders of the Bonds do not have the right to require Continental to repurchase the Bonds because of a merger or other corporate reorganization of Continental. Further, Continental has recently entered into a long-term global alliance with Northwest and a corporate governance agreement with certain affilia,tes of Northwest. The ability of Continental toengage in a change of control transaction other than withNorthwest or an affiliate thereof is limited by the provisions of the corporate governance agreement. See ''CERTAIN BONDOWNERS' RISKS

- Obligation of Continental as Primary Security; Certain Risks with Respect to Continental- Risk Factors Relating to Continental -Risks Regarding Continental/Northwest Alliance" above. Possible Loss of Tax-Exempt Status of Interest on Bonds On the date of delivery of and payment for the Bonds, Bond Counsel will render its opinion with respect to the tax-exempt status of the interest on the Bonds, the form of which opinion is set forth in Appendix B hereto. See also "TAX MATIERS" herein. If the interest on the Bonds is determined to be includable in gross income of registered owners of the Bondsforfederal incometax purposes on account ofa Determination ofTaxability, such Bonds will be subjectto special mandatory redemption as described under "THE BONDS- Special Redemption Upon a Determination of Taxability" above. Ifthe interest on the Bonds is determined to be includable in gross income of registered owners ofthe Bonds for federal income tax purposes for any reason otherthan as a result of a Determination of Taxability, the Bonds will not be subjectto special mandatory redemption. In either such event, there will be no adjustment iri the interest rate on the Bonds and the owners will not be indemnified against losses sustained as a result of a determination that the interest on the Bonds is not excludablefrom gross income forfederal income tax purposes. Further, a Determination ofTaxability may notoccurfor a substantial period of time after interestfirst becomes includable in the gross income ofthe owners of. the Bonds for federal income tax purposes, No·Determination of Taxability will result if the events that Would otherwise give· rise to a Determination of Taxability are the res.ult of a change in the Internal Revenue Code or regulations promulgated ·under the lrtternal Revenue Code adopted and becoming effective after the date of issuance of the Bonds. Additionally, if, prior to a Determination of Taxability, the lien ofthe Indenture has been defeased pursuant to the provisions thereof, such Bonds will not be subject to special mandatory redemption as a result orsuch Determination ofTaxability. In certain circumstances, the loss of the exclusion of interest on any Bonds from gross income of the owners of those Bonds forfederal income tax purposes could be retroactive to the date of issuance of the Bonds. The tax liability of the owners of any Bonds for failure. to inclUde interest on the Bonds in their gross income may extend to years forwhich interestwas received on the. Bonds, or a portion ofthe Bonds, and for which the relevant statute of limitations has not yet, run:
.. 

### 41·· If the Bonds are redeemed as· described in the foregoing paragraph, then the failure by Continental to observe any covenant, agreement or representation in the Lease Agreements or Indenturethat results in a Determination ofTaxabilitywill notconstitute an Event of Default under the Indenture and payment of the redemption price will constitutefull and complete payment and satisfactiontothe owners otthe Bondsforany·claims, damages, costs orexpensesarising outof or based upon such failure by Continental.

NO LITIGATION There is,·to the best knowledge of the Authority, no action, suit or proceeding at law or in equity pendingorthreatened against the !iuiilority to restrain or enjoin the issuance or sale of the Bonds or in ariyway contestingthevalidityoraffectingthe powerofthe Authoritywith respect to the issuance orsale ofthe Bonds or the documentsor instruments executed bythe Authority in connection therewith or the existence or powers of the Authority



### o~ the right.of the Authority to finance the Project, nor,'to the best knowled'ge oftheAuthority, any basis therefor.

RATINGS Moody's and S&P have provided ratings fcir the Bonds of Ba2 and BB, respectively. These ratings reflect onlytheview ofsuch organizations, and an explanation ofthe significance ofsuch ratings may be obtained onlyfrom the rating agencyfurnishing such' rating. There is no assurance that such ratings will 

### be maintained for any given period oftime or that such ratings will notbe revised downward, suspended or withdrawn entirely by such rating agencies; ihn their sole judgment, circumstances so warrant. Any such downward revision, suspension or withdrawal of such ratings may have an adverse effect on the market price of the affected series of Bonds.

AVIATION DEMAND CONSULTANT The Analysis of Potential Gate Demand included as Appendix E to this Official Statement has been prepared by Leigh Fisher, as consultant to Continentaf, and is included in reliance upon the knowledge and experience of such firm in the field ofairport consulting.
UNDERWRITING. The· Bonds are being purcna:sed for reoffering by the Underwriters at an aggregate underwriting discount of$5,135,864.26 and an aggregate original issue discount of$6,298,150.25. The Purchase Contractdated September 15, 1999 betweentheAuthority and Goldman, Sachs & Co., as representative of the Underwriters, provides that the UnderWriters will purchase all of the Bonds if any are purchased andthatsuch purchase is subjecttocertain'terms and conditions setforth therein, including theapproval of certain legal matters by counsel. Continental has agreed to indemnify the Authority and ·the Underwriters against certain liabilit'1es, including certain civil liabilities under federal securities laws.
CONTINUING DISCLOSURE Continental will enter intoacontinuing disclosureagreementwith theTrustee upon the issuance and sale of the Bonds to provide certain financial and operating data concerning its affairs on a continuing basis for owners of the Bonds. For a description of such agreement, see Appendix C- Summary of Certain Provisions ofthe Continuing Disclosure Agreement.
42· TAX MATTERS

,._. ·::·.: Exclusion of Interest on the Bonds from Gross Income for Federallncome.TaxPurposes The Internal Revenue Code'irnr)oses certain requirement's 'iivi]ith .mustbe met ofi a continuing basis subsequent to the issuance'ofthe Bonds·in orderto assure thEifi'nterest on the Bondswillbe and remain excluded from gross income for federal income 

### tax purposes uncier Section

# ·i··a·3 ofthe Internal Revenue Code. Such requirements include, among other things, rebate of arbitrage, investment limitations, use of proceeds for qualifying airport facilities, limitations with respect to paymei'ii 'of issuance costs and acquisition of land, used property and prohibited facilities

..failu_re ofthe Authority or Continental to comply with such requirements may cause .interest on the Bonqs to.be

**incjud~d** in gross income for federal income tax purposes retroactive to the date of issuance of the Bonds. Except as otherwise expressly permitted by the Bond Documents, the Authority and Continental have covenanted notto take any action or fail to take any action which would cause the interest on the Bonds to be included in gross income under Section 103 ofthe Internal Revenue Code as in ef1€.cton the dateofissuance of the Bonds. Assuming compliance by the

..AUthority and Continental with their covenants with respect to the Internal Revenue Code, McCarter & English·, LLP, Bond Counsel·to the Authority, is·ofthe·opiriion that, under existing law, interest on the Bonds is excluded frorri the gross income of the owners of the·Bonds for federal income tax purposes pursuant to SeCtion· 103 of the Internal Revenue Code, except'as to interest on any Bond for any period during which such Bond is held by a· person who is either a "substantial user" (within the meaning of Section 147(a) ofthe Internal Revenue Code) ofthefacilities financed with the proceeds of the Bonds or a "related person" of such a substantial user. Certain requirements contained or referred to in the documents relevant to the Bonds may be changed and certain actions may be taken, under the circ!Jm'stances and'subject tci'the terms and conditions set forth in·such' documents; upon tlie advice or with the app.roving opinion of nationally· recognized bond counsel. McCarter& English, LLP expresses 'no opinion as tO'



### ~ny Bond or the interest thereon if any such change occurs or action is taken upon the advice'or approval of bond counsel other than McCarter & English, LLP. · ·· Tax Treatment of Original Issue Discount The initial public offering price of the Bonds is less than the principal amount payable on each of the Bonds at maturity. The difference between the initial public offering price of the Bonds at which price a substantial amount ofeach ofthe Bonds was sold and the principal amount payable.at maturityof each of the Bonds constitutes original issue discount Bond Counsel is ofthe opinion that the appropriate portion of the original issue discount allocable to the original and each subsequent owner of the Bonds will be treated for federal income tax purposes as interest not includable in gross income under Section 103 of the Internal Revenue Code to the same extent as stated interest on the Bonds. Under Section 1288 of the Internal Revenue Code, original issue discount on the Bonds accrues on the basis of economic accrual. The basis of an initial purchaser of a Bond acquired at the initial public offering price of the Bond will be increased by the amount of such accrued discount Owners ofthe Bonds should consult their personal tax advisors with respect to the determination for federal income tax purposes ofthe original issue discount properly accruable with respect to the Bonds and the tax accounting treatment of accrued interest Additional Federal Income Tax Consequences Underthe Internal Revenue Code, interest on the Bonds is an ''item oftax preference" and therefore is included in calculating alternative minimum taxable incomefor purposes of the alternative minimum tax imposed by Section 55 of the Internal Revenue Code on individuals and corporations. Prospective purchasers of the BoQdS should also be aware that ownership of, accrual or receipt of interest on, or disposition of, governmental obligations, such as the Bonds, may have collateral federal 

### 43income tax consequences tor certain taxpayers, including-financial institutions, property and casualty insurance companies, SCorporations, certain foreign corporations, individual recipients of Social Security or Railroad Retirement benefits and taxpayers who may be deemed to have incurred or continued indebtednessto purchase or carry such obligations. Prospective purchasers ofthe Bonds should consult theirtaxadvisers as to any possiblecoll<:iieral consequences·from_theirownership of, accrual or receipt of interest on, or disposition

### ·ot; the_ Bonds

.. · 

### State of New Jersey Taxation Bond Counsel is ofthe opinion that, based upon existing law, interest on the Bonds and any gain on the sale ofthe Bonds are-excluded 

### Irani gross income under the existing New Jersey Gross Income Tax Act.

OTHER LEGAL MATTERS Legal matters incident tothe authorization and issuance ofthe Bonds are subject to the approving opinion of McCarter&.English, LLP, Newark, New Jersey, Bond Counsel to th!" Authority. Certain legal matters will be passed upon lor Continental by Jeffery 

### A. Smisek, its Executive Vice President and General Counsel, and by its special counsel, Jones, Day, Reavis & Pogue; and lorthe Underwriters by their counsel, O'Melveny & Myers LLP

.. MISCELLANEOUS The summaries and


### de~criptions herein of the Basic Lease, the Port Authority Leases, the Lease Ag-reements, the Guaranty, _the Indenture, the Consent and any other documents relating to the Bonds and not purporting to be quoted in lull are qualified in their entirety by reference to the complete provisions of such documents, copies of which may be obtained from Continental and from the Underwriters during the period ofthe offering. Appendix A to this Official Statement incorporates by reference information concerning Continental, including certain financial information.



### 44This Official Statement has been duly authorized by the Authority and approved by Continental.

Approved by: CONTINENTAL AIRLINES, INC.



### 45 NEW JERSEY ECONOMIC DEVELOPMENT AUTHORITY
By: 

### IsI CAREN S. FRANZINI Name: Caren S. Franzini Title: Executive Director" ' APPENDIX A AVAILABILITY OF CERTAIN INFORMATION RELATING TO CONTINENTAL AIRLINES, INC. Available Information Continental is subject to the informational requirements ofthe Securities Exchange Act of 1934, as amended (the "ExchangeAct"), and in accordance therewith files reports, proxy statements and other information with the Securities and Exchange Commission (the "SEC"). Reports, proxy statements and other information filed by Continental can be inspected and copied at the public reference facilities maintained by the SEC at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, and at the following Regional Offices of the SEC: Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661-2511, and Seven World Trade Center, 13th Floor, New York, New York 10048. Copies of such material can be obtained from the Public Reference Section of. the SEC at 450 Fifth Street, N.W., Washington, D.C. 20549 upon payment of prescribed rates. The SEC maintains aWeb site at http://www.sec.gov containing reports, proxy statements and other information regarding registrants that file electronically with the SEC, including Continental. In addition, reports, proxy statements and other information concerning Continental may be inspected and copied at the offices of the New York Stock Exchange, Inc., 20 Broad Street, New York, New York 10005. Incorporation of Certain Documents by Reference The Annual Report of Continental on Form 10-K. for the fiscal year ended December 31, 1998, together with Continental's quarterly reports filed on Form 10-Q for the quarters ended March 31, 1999 and June 30, 1999, is herebyincorporated by reference in this Official Statementand made apart hereof. All documentsfiled by Continental pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this Official Statement and until the time when the Official Statement is available to any person from a nationally recognized securities information repository, but in no case less than 25 days from the end of the underwriting period (i.e., being the later of such time as (a) the Authority delivers the Bondstothe Underwriters, or (b) the Underwriters do not retain, directlyor as a member of an underwriting syndicate, an unsold balance of Bonds for sale to the public), shall be deemed to be incorporated by reference in this Official Statement and to be a part hereoffrom the date offiling ofsuch documents. Any statement contained in a document incorporated or deemed to be incorporated by reference herein, or contained in this Official Statement, shall be deemed to be modified or superseded for purposes of this Official Statement to the extent that a statement contained herein or in any other subsequentlyfiled documentthat aiso is oris deemed to be incorporated by reference herein modifies or supersedes such statement.Any such statement so modified orsuperseded shall not be deemed, except as so modified or superseded, to constitute a part of this Official Statement. Continental will provide without charge to each person to whom this Official Statement is delivered, on written ororal request of such person, acopyofany orall documents incorporated by reference in this Official Statement without exhibits to such documents (unless such exhibits are specifically incorporated by reference into such documents). Requests for such copies should be directed to the Corporate Secretary, Continental Airlines, Inc., 1600 Smith Street, Houston, Texas 77002, telephone (713) 324-2948.

A-1 

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