First Amendment to Participation Warrant Agreement
This First Amendment to Participation Warrant Agreement dated as of
November 17, 1999 ("First Amendment"), by and between ▇▇▇▇▇▇▇▇▇.▇▇▇ Incorporated
(the "Company") and Continental Airlines, Inc. ("Warrant Holder").
WHEREAS, the Company and Warrant Holder are parties to that certain
Participation Warrant Agreement dated as of July 16, 1999 (the "Warrant
Agreement"); and
WHEREAS, the parties desire to amend the Warrant Agreement upon the terms
and conditions herein provided.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. Definitions. Capitalized terms use herein and not otherwise defined
herein shall have the meanings ascribed to them in the Warrant Agreement.
2. Amendment to Warrant Agreement. The Warrant Agreement is amended as
follows:
(A) Section 2 of the Warrant Agreement is amended to read in its
entirety as follows:
"2. Exercise Price. The Warrants have an exercise price of $59.93
per share of Common Stock, as adjusted pursuant to the provisions of
Section 10 of this Warrant Agreement (the "Exercise Price")."
(B) Section 4(b) of the Warrant Agreement is hereby amended to read in
its entirety as follows:
"(b) Early Exercise Rights.
(i) The Warrant Holder will earn the right to exercise
Warrants for the first 500,000 Shares, subject to
adjustment as provided in Section 10 hereof, from and
after the date during any Measuring Period (as
identified in Section 4(c) hereof) that the Company has
sold during such Measuring Period at least $40.66
million (for the first Measuring Period ending August 1,
2000) or $36 million (for any Measuring Period ending
after August 1, 2000) of tickets issued for travel on
the Warrant Holder, its subsidiaries and/or on the
Warrant Holder's code share partners using Warrant
Holder's code (such amount being measured by the amount
paid by the Company to the Warrant Holder and its code
share partners net of federal excise taxes on such
amount, PFCs and related collections) ("Warrant Holder
Net Fares").
(ii) The Warrant Holder will earn the right to exercise
Warrants for the full amount of the second 500,000
Shares, subject to adjustment as provided in Section 10
hereof, from and after the date during any Measuring
Period (other than the Measuring Period during which
Warrant Holder shall have earned the right to exercise
Warrants for the first 500,000 Shares) that the Company
has sold during such Measuring Period at least $67.0
million of Warrant Holder Net Fares. If, upon completion
of the Measuring Period immediately following the
Measuring Period for which Warrant Holder earned the
right to exercise Warrants for the first 500,000 Shares,
the Company has sold more than $36.0 million but less
than $67.0 million of Warrant Holder Net Fares during
such immediately following Measuring Period, Warrant
Holder will earn (upon completion of such immediately
following Measuring Period) the right to exercise that
number of Warrants for a portion of the second 500,000
Shares, subject to adjustment as provided in Section 10
hereof, equal to the product of (i) 500,000 (subject to
adjustment as provided in Section 10 hereof) multiplied
by (ii) a fraction, the numerator of which shall be the
Warrant Holder Net Fares in excess of $36.0 million sold
by the Company during such immediately following
Measuring Period, and the denominator of which shall be
$31.0 million. Thereafter, subject to the provisions of
Section 4(a), the Warrant Holder will earn the right to
exercise Warrants for any remaining Shares only from and
after the date during any Measuring Period that the
Company has sold during such Measuring Period at least
$67.0 million of Warrant Holder Net Fares.
(iii) Warrant Holder Net Fares will be measured separately,
not cumulatively. For example, if the Company has sold
Warrant Holder Net Fares of $40.66 million during the
first Measuring Period, $61.0 million during the second
Measuring Period, and $64.0 million during the third
Measuring Period, then the Warrant Holder will earn the
right to exercise Warrants for the first
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500,000 Shares upon the date the Company has first sold
$40.66 million of Warrant Holder Net Fares during the
first Measuring Period, the right to exercise Warrants
for 403,226 Shares (500,000 x 25/31) upon completion of
the second Measuring Period, and no additional Shares at
any time during or upon completion of the third
Measuring Period. For purposes of this example, it is
assumed that no adjustment pursuant to Section 10 hereof
has occurred. If, for the first Measuring Period ending
August 1, 2000, Warrant Holder Net Fares do not equal or
exceed $40.66 million, Warrant Holder will not with
respect to the first Measuring Period earn the right to
exercise Warrant for the first 500,000 shares, but will
earn the right to exercise Warrants for the first
500,000 Shares in a subsequent Measuring Period if, in
such subsequent Measuring Period, Warrant Holder Net
Fares for such subsequent Measuring Period equals or
exceeds $36 million."
(C) Section 4(c) of the Warrant Agreement is hereby amended to read in
its entirety as follows:
"(c) Measuring Periods. Each Measuring Period shall be a 12 month
period, with the first Measuring Period commencing on August
1, 1999 (the "First Ticket Date") and ending on the first
anniversary of such date. Subsequent Measuring Periods will
expire on the second, third, fourth and fifth anniversary of
the First Ticket Date, respectively; provided that the last
Measuring Period will expire on the fifth anniversary of the
Issue Date."
3. Amendment. All references in the Warrant Agreement (and in the other
agreements, documents and instruments entered into in connection therewith) to
the "Warrant Agreement" shall be deemed for all purposes to refer to the Warrant
Agreement, as amended by this First Amendment.
4. Remaining Provisions of Warrant Agreement. Except as expressly provided
herein, the provision of the Warrant Agreement shall remain in full force and
effect in accordance with their terms and shall be unaffected by this First
Amendment.
5. Counterparts. This First Amendment may be executed in counterparts,
each of which when executed shall be deemed an original and both of which when
executed shall be deemed one and the same instrument.
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6. Headings. The headings to this First Amendment are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
7. Governing Law. This First Amendment shall be governed by, and construed
in accordance with, the laws of the State of Delaware, without regard to the
principles of conflicts of law of any jurisdiction.
IN WITNESS WHEREOF, this First Amendment has been duly executed and
delivered by the authorized officers of each of the undersigned as of the date
first above written.
▇▇▇▇▇▇▇▇▇.▇▇▇ INCORPORATED
By:__________________________________
Name:
Title:
CONTINENTAL AIRLINES, INC.
By:__________________________________
Name:
Title:
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