EXHIBIT 4.7(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 "Barlow Agreement") with
Barlow Investors III, LLC, a California limited partnership
("Barlow"), 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
Barlow;
WHEREAS, the Parent and the Stockholder entering into the
Barlow 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 Barlow
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
"Barlow Agreement") among the Parent, the
Stockholder, Barlow Investors III, LLC, a
California limited liability company
("Barlow"), and the guarantors signatory
thereto, respecting the sale by Barlow 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 Barlow
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:
Douglas M Steenland
Senior Vice President,
General Counsel
and Secretary
Newbridge Parent Corporation
By:
Douglas M Steenland
Vice President, Secretary
and Assistant Treasurer
By:
Continental Airlines, Inc.
By:
Jeffery A. Smisek
Executive Vice President,
General Counsel
and Secretary