EXHIBIT 10.22(a)
FIRST AMENDMENT
TO THE
GOVERNANCE AGREEMENT
This First Amendment to the Governance Agreement dated as of
March 2, 1998, is by and among Continental Airlines, Inc., a
Delaware corporation (the "Company"), Newbridge Parent
Corporation, a Delaware corporation (the "Stockholder"), and
Northwest Airlines Corporation, a Delaware corporation that is
the holder of all of the outstanding stock of the Stockholder
("Parent").
WHEREAS, the Company, the Stockholder and the Parent have
entered into that certain Governance Agreement dated as of
January 25, 1998 (the "Governance Agreement"), pursuant to which
the Parent and the Stockholder have agreed, among other things,
that they and their respective Affiliates will not, subject to
certain exceptions set forth in the Governance Agreement,
Beneficially Own any Voting Securities in excess of the Permitted
Percentage; and
WHEREAS, the Parent and the Stockholder have proposed to
enter into a Purchase Agreement (the "Xxxxxx Agreement") with
Xxxxxx Investors III, LLC, a California limited partnership
("Xxxxxx"), and the guarantors signatory thereto, pursuant to
which the Parent and the Stockholder would acquire Beneficial
Ownership of 979,000 shares of Class A Common Stock Beneficially
Owned by Xxxxxx;
WHEREAS, the Parent and the Stockholder entering into the
Xxxxxx Agreement would cause them to Beneficially Own Voting
Securities in excess of the Permitted Percentage as in effect on
the date hereof; and
WHEREAS, the Parent and the Stockholder have requested that
the Company consent to their entering into the Xxxxxx Agreement,
and the Company is willing to agree thereto subject to the terms
and conditions of this First Amendment; and
WHEREAS, the Company, the Parent and the Stockholder desire
to clarify the effect of the conversion of shares of Class A
Common Stock to Class B Common Stock by the holders thereof under
Section 1.01 of the Governance Agreement.
NOW THEREFORE, the Company, the Stockholder and the Parent,
intending to be legally bound, hereby agree as follows:
1. Capitalized terms not otherwise defined herein shall
have their respective meanings set forth in the Governance
Agreement.
2. Section 1.01(d) of the Governance Agreement is amended
and restated to read in its entirety as set forth below:
(d) (i) Except as otherwise set forth in this
subsection (d), if at any time the Parent or the
Stockholder becomes aware that it and its Affiliates
Beneficially Own more than the Permitted Percentage,
then the Parent shall promptly notify the Company, and
the Parent and the Stockholder, as appropriate, shall
promptly take all action necessary to reduce the amount
of Voting Securities Beneficially Owned by such Persons
to an amount not greater than the Permitted Percentage.
(ii) If the Voting Securities Beneficially Owned
by the Stockholder and its Affiliates exceed the
Permitted Percentage (A) solely by reason of
repurchases of Voting Securities by the Company or (B)
as a result of the transactions otherwise permitted by
the terms of this Agreement, then the Stockholder shall
not be required to reduce the amount of Voting
Securities Beneficially Owned by such Persons and the
percentage of the Fully Diluted Voting Power
represented by the Voting Securities Beneficially Owned
by such Persons shall become the Permitted Percentage.
(iii) Notwithstanding the provisions of Section
1.01(a), if the Voting Securities Beneficially Owned by
the Stockholder and its Affiliates exceed the Permitted
Percentage solely by reason of the Parent's and the
Stockholder's entering into (A) the Purchase Agreement
dated as of March 2, 1998 (the "Xxxxxx Agreement")
among the Parent, the Stockholder, Xxxxxx Investors
III, LLC, a California limited liability company
("Xxxxxx"), and the guarantors signatory thereto,
respecting the sale by Xxxxxx of 979,000 shares of
Class A Common Stock to the Stockholder, and (B) the
Investment Agreement, and the purchase of (C) the
979,000 shares of Class A Common Stock pursuant to the
Xxxxxx Agreement, and (D) Voting Securities pursuant to
the Investment Agreement, the Stockholder and its
Affiliates shall not be required to reduce the amount
of Voting Securities Beneficially Owned by such
Persons; provided that the Permitted Percentage shall
not be changed as a result thereof, and, if the Fully
Diluted Voting Power of the Voting Securities
Beneficially Owned by the Stockholder and its
Affiliates is subsequently reduced to or below the
Permitted Percentage, neither the Stockholder, the
Parent, nor any of their respective Affiliates shall
Beneficially Own any Voting Securities in excess of the
Permitted Percentage after such reduction.
(iv) Notwithstanding the provisions of Section
1.01(a), if the Voting Securities Beneficially Owned by
the Stockholders and its Affiliates exceed the
Permitted Percentage solely by reason of the conversion
of shares of Class A Common Stock into shares of Class
B Common Stock by the holders thereof, the Stockholder
and its Affiliates shall not be required to reduce the
amount of Voting Securities Beneficially Owned by such
Persons; provided that, the Permitted Percentage shall
not be changed as a result of any such conversion, and
if the Fully Diluted Voting Power of the Voting
Securities Beneficially Owned by the Stockholder and
its Affiliates is subsequently reduced to or below the
Permitted Percentage, neither the Stockholder, the
Parent, nor any of their respective Affiliates shall
Beneficially Own any Voting Securities in excess of the
Permitted Percentage after such reduction.
3. The Company hereby represents and warrants to the
Parent and the Stockholder that this First Amendment to the
Governance Agreement has been approved by a Majority Vote.
4. This First Amendment may be signed in any number of
counterparts, each of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same
instrument.
5. Except as expressly modified by this First Amendment
to the Governance Agreement, all of the terms, conditions and
provisions of the Governance Agreement shall remain unchanged and
in full force and effect.
IN WITNESS WHEREOF, the parties hereto have caused this
First Amendment to the Governance Agreement to be executed as of
the date first referred to above.
Northwest Airlines Corporation
By: /s/ Xxxxxxx X. Xxxxxxxxx
Name:Xxxxxxx X Xxxxxxxxx
Title:Senior Vice President,
General Counsel and Secretary
Newbridge Parent Corporation
By: /s/Xxxxxxx X. Xxxxxxxxx
Name:Xxxxxxx X. Xxxxxxxxx
Title:Vice President, Secretary
And Assistant Treasurer
Continental Airlines, Inc.
By: /s/Xxxxxxx X. Xxxxxx
Name:Xxxxxxx X. Xxxxxx
Title:Executive Vice President,
General Counsel and Secretary
