-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, RK0ZJ6l8Uj7zdaOzZ445qt0D8iZEFPsKkI87DFKjSrrz18nEP8ruiJYvmBNJnqCi d8in0epMVMw8r6yO69KQ5w== 0000897423-98-000102.txt : 19980430 0000897423-98-000102.hdr.sgml : 19980430 ACCESSION NUMBER: 0000897423-98-000102 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 4 FILED AS OF DATE: 19980428 SROS: NYSE GROUP MEMBERS: 1992 AIR GP GROUP MEMBERS: 1992 AIR, INC. GROUP MEMBERS: AIR II GENERAL, INC. GROUP MEMBERS: AIR PARTNERS ET AL GROUP MEMBERS: AIR PARTNERS, L.P. GROUP MEMBERS: ALFREDO BRENER GROUP MEMBERS: BONDERMAN FAMILY LIMITED PARTNERSHIP GROUP MEMBERS: BONDO AIR LIMITED PARTNERSHIP GROUP MEMBERS: DAVID BONDERMAN SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: CONTINENTAL AIRLINES INC /DE/ CENTRAL INDEX KEY: 0000319687 STANDARD INDUSTRIAL CLASSIFICATION: AIR TRANSPORTATION, SCHEDULED [4512] IRS NUMBER: 742099724 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: SEC FILE NUMBER: 005-32119 FILM NUMBER: 98603215 BUSINESS ADDRESS: STREET 1: 2929 ALLEN PKWY STE 2010 CITY: HOUSTON STATE: TX ZIP: 77019 BUSINESS PHONE: 7138342950 FORMER COMPANY: FORMER CONFORMED NAME: PEOPLE EXPRESS AIRLINES INC DATE OF NAME CHANGE: 19890726 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: AIR PARTNERS ET AL CENTRAL INDEX KEY: 0000930614 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 752443626 STATE OF INCORPORATION: TX FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: 201 MAIN ST STREET 2: SUITE 2420 CITY: FORT WORTH STATE: TX ZIP: 76102 MAIL ADDRESS: STREET 1: 201 MAIN STREET STREET 2: SUITE 2500 CITY: FORTH WORTH STATE: TX ZIP: 76102 SC 13D/A 1 CONTINENTAL AIRLINES, INC., SCHED. 13D AMEND. NO. 8 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 SCHEDULE 13D Under the Securities Exchange Act of 1934 (Amendment No. 8)* Continental Airlines, Inc. (Name of Issuer) Class A Common Stock (Title of Class of Securities) 210795209 (CUSIP Number) James J. O'Brien 201 Main Street, Suite 2420 Fort Worth, Texas 76102 (817) 871-4000 (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) April 24, 1998 (Date of Event Which Requires Filing of this Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(b)(3) or (4), check the following box / /. *The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page. The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes). **The total number of Class A shares reported herein is 8,532,166, which constitutes approximately 74.7% of the total number of Class A shares outstanding. The foregoing ownership percentages set forth herein assume that there are 11,418,932 shares of the Class A Stock outstanding following the exercise of warrants described herein. The number of outstanding shares of Class A Common Stock as reported in the Issuer's most recent quarterly report was 8,379,464. 1. Name of Reporting Person: Air Partners, L.P. 2. Check the Appropriate Box if a Member of a Group: (a) / / (b) /X/ 3. SEC Use Only 4. Source of Funds: OO-Partnership Contributions; Advance From Non-Affiliate 5. Check Box if Disclosure of Legal Proceedings is Required Pursuant to Item 2(d) or 2(e): / / 6. Citizenship or Place of Organization: Texas 7. Sole Voting Power: Class A - 8,302,656 (1) Number of Shares Beneficially 8. Shared Voting Power: -0- Owned By Each 9. Sole Dispositive Power: Reporting Class A - 8,302,656 (1) Person With 10. Shared Dispositive Power: -0- 11. Aggregate Amount Beneficially Owned by Each Reporting Person: Class A - 8,302,656 12. Check Box if the Aggregate Amount in Row (11) Excludes Certain Shares: /x/ See Item 2. 13. Percent of Class Represented by Amount in Row (11): Class A - 72.7% (2) 14. Type of Reporting Person: PN - ------------ (1) Power is exercised through its two general partners, 1992 Air GP and Air II General, Inc. Additionally, the voting and dispositive power may, under certain circumstances, be deemed to be shared with, or may be exercised by, the limited partners of Air Partners, L.P. as further described in Item 6 hereof. (2) Assumes that there are 11,418,932 shares of Class A Common Stock outstanding following the exercise of warrants by Air Partners, L.P., as reported in Item 5(c) herein. 1. Name of Reporting Person: 1992 Air GP 2. Check the Appropriate Box if a Member of a Group: (a) / / (b) /X/ 3. SEC Use Only 4. Source of Funds: Not Applicable 5. Check Box if Disclosure of Legal Proceedings is Required Pursuant to Item 2(d) or 2(e): / / 6. Citizenship or Place of Organization: Texas 7. Sole Voting Power: -0- Number of 8. Shared Voting Power: Shares Class A - 8,302,656 (1)(2) Beneficially Owned By Each 9. Sole Dispositive Power: -0- Reporting Person With 10. Shared Dispositive Power: Class A - 8,302,656 (1)(2) 11. Aggregate Amount Beneficially Owned by Each Reporting Person: Class A - 8,302,656(2) 12. Check Box if the Aggregate Amount in Row (11) Excludes Certain Shares: /x/ See Item 2. 13. Percent of Class Represented by Amount in Row (11): Class A - 72.7% (3) 14. Type of Reporting Person: PN - ------------- (1) Power is exercised through its majority general partner, 1992 Air, Inc. (2) Solely in its capacity as one of two general partners of Air Partners, L.P. The voting and dispositive power may, under certain circumstances, be deemed to be shared with, or may be exercised by, the limited partners of Air Partners, L.P. as further described in Item 6 hereof. (3) Assumes that there are 11,413,932 shares of Class A Common Stock outstanding following the exercise of warrants by Air Partners, L.P., as reported in Item 5(c) herein. 1. Name of Reporting Person: Air II General, Inc. 2. Check the Appropriate Box if a Member of a Group: (a) / / (b) /X/ 3. SEC Use Only 4. Source of Funds: Not Applicable 5. Check Box if Disclosure of Legal Proceedings is Required Pursuant to Item 2(d) or 2(e): / / 6. Citizenship or Place of Organization: Texas 7. Sole Voting Power: -0- Number of 8. Shared Voting Power: Shares Class A - 8,302,656 (1)(2) Beneficially Owned By Each 9. Sole Dispositive Power: -0- Reporting Person With 10. Shared Dispositive Power: Class A - 8,302,656 (1)(2) 11. Aggregate Amount Beneficially Owned by Each Reporting Person: Class A - 8,302,656 (2) 12. Check Box if the Aggregate Amount in Row (11) Excludes Certain Shares: /x/ See Item 2. 13. Percent of Class Represented by Amount in Row (11): Class A - 72.7% (3) 14. Type of Reporting Person: CO - ------------ (1) Power is exercised through its controlling shareholder, David Bonderman. (2) Solely in its capacity as one of two general partners of Air Partners, L.P. The voting and dispositive power may, under certain circumstances, be deemed to be shared with, or may be exercised by, the limited partners of Air Partners, L.P. as further described in Item 6 hereof. (3) Assumes that there are 11,418,932 shares of Class A Common Stock outstanding following the exercise of warrants by Air Partners, L.P., as reported in Item 5(c) herein. 1. Name of Reporting Person: 1992 Air, Inc. 2. Check the Appropriate Box if a Member of a Group: (a) / / (b) /X/ 3. SEC Use Only 4. Source of Funds: Not Applicable 5. Check Box if Disclosure of Legal Proceedings is Required Pursuant to Item 2(d) or 2(e): / / 6. Citizenship or Place of Organization: Texas 7. Sole Voting Power: Class A - 213,110 (1) Number of 8. Shared Voting Power: Shares Class A - 8,302,656 (1)(2) Beneficially Owned By Each 9. Sole Dispositive Power: Reporting Class A - 213,110 (1) Person With 10. Shared Dispositive Power: Class A - 8,302,656 (1)(2) 11. Aggregate Amount Beneficially Owned by Each Reporting Person: Class A - 8,515,766 (2) 12. Check Box if the Aggregate Amount in Row (11) Excludes Certain Shares: /x/ See Item 2. 13. Percent of Class Represented by Amount in Row (11): Class A - 74.6% (3) 14. Type of Reporting Person: CO - ------------ (1) Power is exercised through its controlling shareholder, David Bonderman. (2) Solely in its capacity as the majority general partner of 1992 Air GP with respect to 8,302,656 shares. The voting and dispositive power with respect to the shares of Class A Common Stock held by Air Partners, L.P. may, under certain circumstances, be deemed to be shared with, or may be exercised by, the limited partners of Air Partners, L.P. as further described in Item 6 hereof. (3) Assumes that there are 11,418,932 shares of Class A Common Stock outstanding following the exercise of warrants by Air Partners, L.P., as reported in Item 5(c) herein. 1. Name of Reporting Person: David Bonderman 2. Check the Appropriate Box if a Member of a Group: (a) / / (b) /X/ 3. SEC Use Only 4. Source of Funds: Not Applicable 5. Check Box if Disclosure of Legal Proceedings is Required Pursuant to Item 2(d) or 2(e): / / 6. Citizenship or Place of Organization: David Bonderman is a citizen of the United States of America. 7. Sole Voting Power: Class A - 229,510 (1) Class B - 862,933 (2) Number of 8. Shared Voting Power: Shares Class A - 8,302,656 (3) Beneficially Owned By Each 9. Sole Dispositive Power: Reporting Class A - 229,510 (1) Person With Class B - 862,933 (2) 10. Shared Dispositive Power: Class A - 8,302,656 (3) 11. Aggregate Amount Beneficially Owned by Each Reporting Person: Class A - 8,532,166 (1)(3) Class B - 871,933 (2)(6) 12. Check Box if the Aggregate Amount in Row (11) Excludes Certain Shares: /x/ See Item 2. 13. Percent of Class Represented by Amount in Row (11): Class A - 74.7% (4) Class B - 1.7% (2)(5) 14. Type of Reporting Person: IN - ------------ (1) Solely in his capacity as general partner of the Bonderman Family Limited Partnership with respect to 16,400 shares and in his capacity as controlling shareholder of 1992 Air, Inc. with respect to 213,110 shares. (2) Solely in his capacity as general partner of the Bonderman Family Limited Partnership with respect to 682,448 shares of the Issuer's Class B Common Stock. (3) Solely in his capacities as the controlling shareholder of each of Air II General, Inc. and 1992 Air, Inc. with respect to 8,302,656 shares Class A Common Stock held by Air Partners, L.P. The voting and dispositive power with respect to the shares of Class A Common Stock held by Air Partners, L.P. may, under certain circumstances, be deemed to be shared with, or may be exercised by, the limited partners of Air Partners, L.P. as further described in Item 6 hereof. (4) Assumes that there are 11,418,932 shares of Class A Common Stock outstanding following the exercise of warrants by Air Partners, L.P., as reported in Item 5(c) herein. (5) Assumes, pursuant to Rule 13d-3(d)(1)(i) under the Act, that there are 50,960,663 shares of Class B Common Stock outstanding which includes the director options held by Mr. Bonderman. (6) Includes 9,000 shares of Class B Common Stock that may be acquired by Mr. Bonderman upon the exercise of outside director stock options. 1. Name of Reporting Person: Bonderman Family Limited Partnership 2. Check the Appropriate Box if a Member of a Group: (a) / / (b) /X/ 3. SEC Use Only 4. Source of Funds: WC 5. Check Box if Disclosure of Legal Proceedings is Required Pursuant to Item 2(d) or 2(e): / / 6. Citizenship or Place of Organization: Texas 7. Sole Voting Power: Class A - 16,400 (1) Class B - 682,448 (1) Number of 8. Shared Voting Power: Shares Class A - 140,364 (2) Beneficially Owned By Each 9. Sole Dispositive Power: Reporting Class A - 16,400 (1) Person With Class B - 682,448 (1) 10. Shared Dispositive Power: Class A - 140,364 (2) 11. Aggregate Amount Beneficially Owned by Each Reporting Person: Class A - 156,764 (2) Class B - 682,448 12. Check Box if the Aggregate Amount in Row (11) Excludes Certain Shares: /x/ See Item 2. 13. Percent of Class Represented by Amount in Row (11): Class A - 1.4% (3) Class B - 1.3% (4) 14. Type of Reporting Person: PN - ------------ (1) Power is exercised through its general partner, David Bonderman. (2) Bonderman Family Limited Partnership also holds a limited partnership interest in Air Partners, L.P. On the basis of certain provisions of the Partnership Agreement, Bonderman Family Limited Partnership may be deemed to beneficially own the shares of Class A Common Stock beneficially owned by Air Partners, L.P. that are attributable to such limited partnership interest. Pursuant to Rule 13d-4 under the Act, Bonderman Family Limited Partnership disclaims beneficial ownership of all such shares. (3) Assumes that there are 11,418,932 shares of Class A Common Stock outstanding following the exercise of warrants by Air Partners, L.P., as reported in Item 5(c) herein. (4) Percentage is based on 50,951,663 outstanding shares of Class B Common Stock, as reported in the Issuer's most recent quarterly report. 1. Name of Reporting Person: Bondo Air Limited Partnership 2. Check the Appropriate Box if a Member of a Group: (a) / / (b) /X/ 3. SEC Use Only 4. Source of Funds: Not Applicable 5. Check Box if Disclosure of Legal Proceedings is Required Pursuant to Item 2(d) or 2(e): / / 6. Citizenship or Place of Organization: Texas 7. Sole Voting Power: -0- Number of Shares 8. Shared Voting Power: Beneficially Class A - 1,403,664 (1) Owned By Each Reporting 9. Sole Dispositive Power: -0- Person With 10. Shared Dispositive Power: Class A - 1,403,664 (1) 11. Aggregate Amount Beneficially Owned by Each Reporting Person: Class A - 1,403,664 (1) 12. Check Box if the Aggregate Amount in Row (11) Excludes Certain Shares: /X/ See Item 2. 13. Percent of Class Represented by Amount in Row (11): Class A - 12.3% (2) 14. Type of Reporting Person: PN - ----------- (1) Solely in its capacity as a limited partner of Air Partners, L.P. On the basis of certain provisions of the Partnership Agreement, Bondo Air Limited Partnership ("Bondo Air") may be deemed to beneficially own the shares of Class A Common Stock beneficially owned by Air Partners, L.P. that are attributable to such limited partnership interests. Pursuant to Rule 13d-4 under the Act, Bondo Air disclaims beneficial ownership of all such shares. (2) Assumes that there are 11,418,932 shares of Class A Common Stock outstanding following the exercise of warrants by Air Partners, L.P., as reported herein in Item 5(c). 1. Name of Reporting Person: Alfredo Brener 2. Check the Appropriate Box if a Member of a Group: (a) / / (b) /X/ 3. SEC Use Only 4. Source of Funds: Not Applicable 5. Check Box if Disclosure of Legal Proceedings is Required Pursuant to Item 2(d) or 2(e): / / 6. Citizenship or Place of Organization: Alfredo Brener is a citizen of Mexico. 7. Sole Voting Power: -0- Number of Shares 8. Shared Voting Power: Beneficially Class A - 1,382,609 (1) Owned By Each Reporting 9. Sole Dispositive Power: -0- Person With 10. Shared Dispositive Power: Class A - 1,382,609 (1) 11. Aggregate Amount Beneficially Owned by Each Reporting Person: Class A - 1,382,609 (1) 12. Check Box if the Aggregate Amount in Row (11) Excludes Certain Shares: /x/ See Item 2. 13. Percent of Class Represented by Amount in Row (11): Class A - 12.1% (2) 14. Type of Reporting Person: IN - ------------ (1) Because Alfredo Brener, through a limited partnership whose corporate general partner he controls, owns warrants to purchase a 98.5% limited partnership interest in Bondo Air, and on the basis of certain provisions of the limited partnership agreement of Bondo Air, Alfredo Brener may be deemed to beneficially own 98.5% of the shares of Class A Common Stock beneficially owned by Bondo Air or that may be deemed to be beneficially owned by Bondo Air that are attributable to Bondo Air's limited partnership interest in Air Partners. Pursuant to Rule 13d-4 under the Act, Mr. Brener disclaims beneficial ownership of all such shares. (2) Assumes that there are 11,418,932 shares of Class A Common Stock outstanding following the exercise of warrants by Air Partners, L.P., as reported in Item 5(c) herein. Pursuant to Rule 13d-2(a) of Regulation 13D-G of the General Rules and Regulations under the Securities Exchange Act of 1934, as amended (the "Act"), the undersigned hereby amend their Schedule 13D Statement dated August 8, 1995, as amended by Amendment No. 1 dated August 11, 1995, Amendment No. 2 dated April 3, 1996, Amendment No. 3 dated April 26, 1996, Amendment No. 4 dated May 13, 1996, Amendment No. 5 dated December 6, 1996, Amendment No. 6 dated June 6, 1997 and Amendment No. 7 dated January 30, 1998 (the "Schedule 13D"), relating to the shares of Class A Common Stock, par value $.01 per share ("Class A Stock"), of Continental Airlines, Inc. (the "Issuer"). Unless otherwise indicated, all defined terms used herein shall have the same meanings respectively ascribed to them in the Schedule 13D. ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION. Item 3 is hereby amended by adding the following: On April 24, 1998, Air Partners exercised warrants with an aggregate exercise price of $28,356,015 to purchase 3,039,468 shares of Class A Stock, as more fully described in Item 5(c) herein. The full exercise price of the warrants was loaned to Air Partners by Northwest pursuant to the terms of the Investment Agreement. ITEM 5. INTERESTS IN SECURITIES OF THE ISSUER. Paragraphs (a)-(c) of Item 5 are hereby amended and restated in their entireties as follows: (a) AIR PARTNERS The aggregate number of shares of the Class A Stock that Air Partners owns beneficially, pursuant to Rule 13d-3 under the Act, is 8,302,656, which constitutes approximately 72.7% of the outstanding shares of such stock. 1992 AIR GP Because of its position as one of two general partners of Air Partners, 1992 Air GP may, pursuant to Rule 13d-3 of the Act, be deemed to be the beneficial owner of 8,302,656 shares of the Class A Stock, which constitutes approximately 72.7% of the outstanding shares of such stock. AIR II Because of its position as one of two general partners of Air Partners, Air II may, pursuant to Rule 13d-3 of the Act, be deemed to be the beneficial owner of 8,302,656 shares of the Class A Stock, which constitutes approximately 72.7% of the outstanding shares of such stock. AIR, INC. Because of its position as one of two general partners of 1992 Air GP, and because of its direct ownership of 213,110 shares of the Class A Stock, Air, Inc. may, pursuant to Rule 13d-3 of the Act, be deemed to be the beneficial owner of an aggregate of 8,515,766 shares of the Class A Stock, which constitutes approximately 74.6% of the outstanding shares of such stock. BONDERMAN Because of his position as the controlling shareholder of each of Air II and Air, Inc., and as the general partner of Bonderman Family, and because he holds director stock options to acquire 9,000 shares of the Class B Stock, and because of his direct ownership of 180,483 shares of the Class B Stock, Bonderman may, pursuant to Rule 13d-3 of the Act, be deemed to be the beneficial owner of (i) 8,532,166 shares of the Class A Stock, which constitutes approximately 74.5% of the outstanding shares of such stock, and (ii) an aggregate 871,933 shares of the Class B Stock, which constitutes approximately 1.7% of the 50,960,663 shares of such stock deemed outstanding pursuant to Rule 13d-3(d)(1)(i) under the Act. BONDERMAN FAMILY The aggregate number of shares of the Class A Stock that Bonderman Family owns, or may be deemed to own, beneficially, pursuant to Rule 13d-3 under the Act, is 156,764, 16,400 shares of which Bonderman Family owns directly and 140,364 shares of which Bonderman Family may be deemed to own beneficially because of its position as a limited partner of Air Partners, and on the basis of certain provisions of the Partnership Agreement. In the aggregate, such shares of Class A Stock constitute approximately 1.3% of the outstanding shares of such stock. The aggregate number of shares of the Class B Stock that Bonderman Family owns, beneficially, pursuant to Rule 13d-3 under the Act, is 682,448 which constitutes approximately 1.4% of the 50,951,663 shares of such stock outstanding. Pursuant to Rule 13d-4 under the Act, Bonderman Family disclaims beneficial ownership of all shares attributable to Bonderman Family's limited partnership interest in Air Partners. BONDO AIR Because of its position as a limited partner of Air Partners, and on the basis of certain provisions of the Partnership Agreement, Bondo Air may, pursuant to Rule 13d-3 of the Act, be deemed to own beneficially 1,403,664 shares of the Class A Stock, which constitutes approximately 12.3% of the outstanding shares of such stock. Pursuant to Rule 13d-4 under the Act, Bondo Air disclaims beneficial ownership of all such shares. BRENER Because of his ownership, through a limited partnership whose corporate general partner he controls, of warrants to purchase a 98.5% limited partnership interest in Bondo Air, and on the basis of certain provisions of the limited partnership agreement of Bondo Air and the Partnership Agreement, Brener may, pursuant to Rule 13d-3 under the Act, be deemed to be the beneficial owner of 1,382,609 shares of the Class A Stock, which constitutes approximately 12.1% of the outstanding shares of such stock. Pursuant to Rule 13d-4 under the Act, Brener disclaims beneficial ownership of all such shares. To the best knowledge of each of the Reporting Persons, other than as set forth above, none of the persons named in response to Item 2(a) herein is the beneficial owner of any shares of the Class A Stock or the Class B Stock. (b) AIR PARTNERS Acting through its two general partners, Air Partners has the sole power to vote or to direct the vote and to dispose or to direct the disposition of 8,302,656 shares of the Class A Stock. Additionally, the voting and dispositive power with respect to such shares of Class A Common Stock held by Air Partners may, under certain circumstances, be deemed to be shared with, or may be exercised by, the limited partners of Air Partners as further described in Item 6 hereof. 1992 AIR GP In its capacity as one of two general partners of Air Partners, and acting through its majority general partner, 1992 Air GP has the shared power to vote or to direct the vote and to dispose or to direct the disposition of 8,302,656 shares of the Class A Stock. AIR II In its capacity as one of two general partners of Air Partners, and acting through its controlling shareholder, Air II has the shared power to vote or to direct the vote and to dispose or to direct the disposition of 8,302,656 shares of the Class A Stock. AIR, INC. In its capacity as the majority general partner of 1992 Air GP, and acting through its controlling shareholder, Air, Inc. has the shared power to vote or to direct the vote and to dispose or to direct the disposition of 8,302,656 shares of the Class A Stock. Air, Inc. has the sole power to vote or to direct the vote and to dispose or to direct the disposition of 213,110 shares of the Class A Stock. BONDERMAN In his capacity as the controlling shareholder of each of Air II and Air, Inc., Bonderman has the shared power to vote or to direct the vote and to dispose or to direct the disposition of 8,302,656 shares of the Class A Stock. In his capacity as the controlling shareholder of Air, Inc., Bonderman has the sole power to vote or to direct the vote and to dispose or to direct the disposition of an additional 213,110 shares of the Class A Stock. In his capacity as sole general partner of Bonderman Family, Bonderman has the sole power to vote or to direct the vote and to dispose or to direct the disposition of 16,400 shares of the Class A Stock and 682,448 shares of the Class B Stock. Bonderman also has the sole power to vote or to direct the vote and to dispose or to direct the disposition of 180,483 shares of Class B Stock owned directly by him. Additionally, because of Bonderman's ownership of direct and indirect limited partnership interests in Air Partners, and on the basis of certain provisions of the Partnership Agreement, Bonderman may be deemed to have shared power to vote or to direct the vote and to dispose or to direct the disposition of shares of Class A Stock beneficially owned by Air Partners attributable to such limited partnership interests in Air Partners. BONDERMAN FAMILY Acting through its sole general partner, Bonderman Family has the sole power to vote or to direct the vote and to dispose or to direct the disposition of 16,400 shares of the Class A Stock and 682,448 shares of the Class B Stock. Additionally, because of its ownership of a limited partnership interest in Air Partners, and on the basis of certain provisions of the Partnership Agreement, Bonderman Family may be deemed to have shared power to vote or to direct the vote and to dispose or to direct the disposition of 140,364 shares of Class A Stock. BONDO AIR In its capacity as a limited partner of Air Partners, and on the basis of certain provisions of the Partnership Agreement, Bondo Air may be deemed to have shared power to vote or to direct the vote and to dispose or to direct the disposition of 1,403,664 shares of the Class A Stock attributable to Bondo Air's limited partnership interest in Air Partners. BRENER Because of his ownership, through a limited partnership whose corporate general partner he controls, of warrants to purchase a 98.5% limited partnership interest in Bondo Air, and on the basis of certain provisions of the limited partnership agreement of Bondo Air and the Partnership Agreement, Brener may be deemed to have shared power to vote or to direct the vote and to dispose or to direct the disposition of 1,382,609 shares of the Class A Stock attributable to Bondo Air's limited partnership interest in Air Partners. (c) Pursuant to the terms of the Investment Agreement, on April 24, 1998, Air Partners exercised all warrants held by it to purchase shares of the Class A Stock. Air Partners purchased 2,298,134 shares of Class A Stock at an exercise price of $7.50 per share, and 741,334 shares of Class A Stock at an exercise price of $15.00 per share. Except as set forth in this paragraph (c), to the best of the knowledge of each of the Reporting Persons, none of the persons named in response to paragraph (a) has effected any transactions in the shares of the Class A Stock during the past sixty days. ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER. Item 6 is hereby amended by adding the following: In connection with the exercise of warrants described in Item 5(c) above, on April 24, 1998, Air Partners received from Northwest, pursuant to the Investment Agreement, funds in an amount equal to the aggregate exercise price of the warrants. The obligation of Air Partners to repay such loan is evidenced by a promissory note executed and delivered by Air Partners and payable to Northwest, a copy of which is attached hereto as Exhibit 4.12. The note is secured by a pledge of the shares of the Class A Stock issued upon exercise of the warrants. A copy of the pledge agreement is attached hereto as Exhibit 4.13. Except as disclosed in this Schedule 13D (including the original Schedule 13D filing, as amended), the Reporting Persons know of no contracts, arrangements, understandings or relationships between or among themselves, or between the Reporting Persons and any other person, with respect to any securities of the Issuer. ITEM 7. MATERIALS TO BE FILED AS EXHIBITS. Exhibit 4.12 Promissory Note dated as of April 24, 1998 executed by Air Partners, L.P. and payable to Northwest Airlines Corporation, filed herewith. Exhibit 4.13 Pledge Agreement dated as of April 24, 1998 between Air Partners, L.P. and Northwest Airlines Corporation, filed herewith. Exhibit 99.1 Agreement pursuant to Rule 13d-1(l)(iii), filed herewith. After reasonable inquiry and to the best of our knowledge and belief, we certify that the information set forth in this statement is true, complete and correct. Dated: April 28, 1998 AIR PARTNERS, L.P. By: 1992 AIR GP, General Partner By: 1992 AIR, INC., General Partner By:/s/James J. O'Brien James J. O'Brien, Vice President 1992 AIR GP By: 1992 AIR, INC., General Partner By:/s/James J. O'Brien James J. O'Brien, Vice President AIR II GENERAL, INC. By:/s/James J. O'Brien James J. O'Brien, Vice President 1992 AIR, INC. By:/s/James J. O'Brien James J. O'Brien, Vice President /s/James J. O'Brien James J. O'Brien, Attorney-in-Fact for each of: DAVID BONDERMAN (1) ALFREDO BRENER (2) BONDERMAN FAMILY LIMITED PARTNERSHIP By: David Bonderman, general partner By:/s/James J. O'Brien, Attorney-in-Fact for DAVID BONDERMAN(1) BONDO AIR LIMITED PARTNERSHIP By: 1992 AIR, INC., General Partner By:/s/James J. O'Brien James J. O'Brien, Vice President (1) A Power of Attorney authorizing James J. O'Brien to act on behalf of David Bonderman was previously filed with the Commission. (2) A Power of Attorney authorizing James J. O'Brien to act on behalf of Alfredo Brener was previously filed with the Commission. EXHIBIT INDEX EXHIBIT NO. DESCRIPTION 4.1 Subscription and Stockholders' Agreement, dated as of April 27, 1993, among Air Partners, Air Canada and the Issuer, previously filed. 4.2 Warrant Agreement, dated as of April 27, 1993, by and between the Issuer and the Warrant Agent as defined therein, previously filed. 4.3 Registration Rights Agreement dated as of April 27, 1993, among Air Partners, Air Canada and the Issuer, previously filed. 4.4 Form of Lock Up Agreement between Air Partners and Goldman Sachs International, previously filed. 4.5 Form of Lock Up Agreement between each Partner of Air Partners and the Issuer, previously filed. 4.6 Form of Assignment of Registration Rights by Air Partners in favor of each Partner of Air Partners, previously filed. 4.7 Amendment to Subscription and Stockholders' Agreement, dated as of April 19, 1996, among Air Partners, Air Canada and the Issuer, previously filed. 4.8 Amended and Restated Registration Rights Agreement, dated as of April 19, 1996 among the Issuer, Air Partners, and Air Canada, previously filed. 4.9 Warrant Purchase Agreement, dated as of May 2, 1996, by and between the Issuer and Air Partners, previously filed. 4.10 Warrant Purchase Agreement, dated as of May 27, 1997, by and between the Issuer and Air Partners, previously filed. 4.11 Investment Agreement dated as of January 25, 1998, among Northwest Airlines Corporation, Newbridge Parent Corporation, Air Partners and the other parties named therein, previously filed. 4.12 Promissory Note dated as of April 24, 1998 executed by Air Partners, L.P. and payable to Northwest Airlines Corporation, filed herewith. 4.13 Pledge Agreement dated as of April 24, 1998 between Air Partners, L.P. and Northwest Airlines Corporation, filed herewith. 24.1 Power of Attorney dated August 7, 1995, by Alfredo Brener, previously filed. 99.1 Agreement pursuant to Rule 13d-1(f)(1)(iii), filed herewith. 99.2 Amended and Restated Limited Partnership Agreement of Air Partners, L. P., together with the first amendment thereto, previously filed. 99.3 Second and Third Amendments to the Amended and Restated Limited Partnership Agreement of Air Partners, L.P., previously filed. EX-99.1 2 JOINT FILING AGREEMENT FOR SCHED. 13D AMEND. NO. 7 EXHIBIT 99.1 Pursuant to Rule 13d-1(k)(1)(iii) of Regulation 13D-G of the General Rules and Regulations of the Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended, the undersigned agree that the statement to which this Exhibit is attached is filed on behalf of them in the capacities set forth hereinbelow. AIR PARTNERS, L.P. By: 1992 AIR GP, General Partner By: 1992 AIR, INC., General Partner By:/s/James J. O'Brien James J. O'Brien, Vice President 1992 AIR GP By: 1992 AIR, INC., General Partner By:/s/James J. O'Brien James J. O'Brien, Vice President AIR II GENERAL, INC. By:/s/James J. O'Brien James J. O'Brien, Vice President 1992 AIR, INC. By:/s/James J. O'Brien James J. O'Brien, Vice President /s/James J. O'Brien James J. O'Brien, Attorney-in-Fact for each of: DAVID BONDERMAN (1) ALFREDO BRENER (2) BONDERMAN FAMILY LIMITED PARTNERSHIP By: David Bonderman, general partner By:/s/James J. O'Brien, Attorney-in-Fact for DAVID BONDERMAN(1) BONDO AIR LIMITED PARTNERSHIP By: 1992 AIR, INC., General Partner By:/s/James J. O'Brien James J. O'Brien, Vice President (1) A Power of Attorney authorizing James J. O'Brien to act on behalf of David Bonderman was previously filed with the Commission. (2) A Power of Attorney authorizing James J. O'Brien to act on behalf of Alfredo Brener was previously filed with the Commission. EX-4.12 3 PROMISSORY NOTE EXECUTED BY AIR PARTNERS, L.P. PROMISSORY NOTE $28,356,015.00 New York, New York April 14, 1998 THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE, AND MAY NOT BE REOFFERED OR SOLD UNLESS AN EXEMPTION FROM REGISTRATION IS AVAILABLE. FOR VALUE RECEIVED, the undersigned, AIR PARTNERS, L.P., a Texas limited partnership (the "Partnership"), promises to pay to NORTHWEST AIRLINES CORPORATION, a Delaware corporation ("Parent"), at 2700 Lone Oak Parkway, Eagan, Minnesota 55121 (or at such other place as Parent shall notify the Partnership in writing), without setoff or counterclaim, the principal amount of TWENTY-EIGHT MILLION THREE HUNDRED FIFTY-SIX THOUSAND FIFTEEN DOLLARS AND NO CENTS ($28,356,015.00) at the earlier to occur of (i) the date the Investment Agreement, dated as of January 25, 1998 (the "Agreement"; capitalized terms used and not specifically defined herein shall have the meanings set forth in the Agreement), among Parent, Newbridge Parent Corporation, the Partnership, the Partners of the Partnership named therein and the Transferors named therein, is terminated in accordance with its terms and (ii) the Closing and to pay interest on the unpaid principal balance hereunder (such principal amount, the "Loan") (A) for any period ending on or prior to July 25, 1998 at the Revolving Interest Rate and (B) for any period from and including July 25, 1998, at a rate of 10% per annum. If the Closing occurs, the aggregate Cash Election Share Price payable and/or the aggregate number of Exchange Shares to be delivered by Parent and Holdco Sub at the Closing shall be reduced by the amount of principal and interest payable by the Partnership hereunder (the "Payoff Amount") in respect of each Partner in proportion to each Partner's allocable share of the Payoff Amount, the determination of the portion of the Payoff Amount allocable to the Cash Electing Partners and the Share Electing Partners to be made by the Partnership and notified to Parent in writing at least three Business Days in advance of the Closing. Any reduction in the Exchange Shares to be issued shall be based on the average closing price for the Parent Class A Common Stock as of the close of business for each of the ten trading days ending on and including the third Business Day preceding the Closing Date. In the event the Agreement is terminated, this Note shall be repaid in full in cash. In the event that any amount payable hereunder is not paid when due, such amount shall bear interest at a rate per annum equal to the rate per annum applicable to the unpaid principal balance hereof, as described above, plus 2% per annum. Interest shall accrue from and including the date hereof to but excluding the date of payment, and shall be calculated on the basis of a 365- day year. All accrued but unpaid interest shall in any event be paid in full in cash, shares of Holdco Sub Class A Common Stock or a combination thereof (in accordance with the preceding paragraph), as the case may be, on the earlier to occur of (i) the Closing, (ii) the date the Agreement is terminated in accordance with its terms and (iii) the date on which the Loan becomes due by acceleration or otherwise; provided, however, in the event the Agreement is terminated, all accrued and unpaid interest shall be repaid in full in cash. For purposes of this Note, if any day referenced herein shall not be a Business Day, such reference shall be deemed to be the next succeeding Business Day. This Note may be prepaid in whole or in part at any time without premium or penalty. Each payment under this Note shall first be credited to accrued and unpaid interest, and the remainder shall be credited to principal. All interest due hereunder shall be paid to the date of payment on principal amount prepaid. All cash payments (including prepayments) to be made by the Partnership hereunder, whether on account of principal, interest, fees or otherwise, shall be made without setoff or counterclaim and shall be made prior to the close of business on the due date thereof to or for the account of Parent at 2700 Lone Oak Parkway, Eagan, Minnesota 55121 (or at such other place as Parent shall notify the Partnership in writing), in dollars in lawful currency of the United States of America and in immediately available funds. All payments of principal, interest and any other amounts hereunder by the Partnership shall be made free and clear of, and without deduction or withholding for, any and all present or future income, stamp or other taxes, levies, imposts, duties, charges, fees, deductions or withholdings of any nature whatsoever, now or hereafter imposed, levied, collected, withheld or assessed by any governmental authority (the foregoing, "Taxes"). If any of the following events (each, an "Event of Default") shall occur and be continuing: (a) The Partnership shall fail to pay any principal hereunder when due in accordance with the terms hereof, or the Partnership shall fail to pay any interest in respect of the Loan, or any other amount payable hereunder, when any such interest or other amounts becomes due in accordance with the terms hereof; or (b) (i) The Partnership shall commence any case, proceeding or other action (A) under any existing or future law or any jurisdiction, domestic or foreign, relating to bankruptcy, insolvency, reorganization or relief of debtors, seeking to have an order for relief entered with respect to it, or seeking or adjudicate it a bankrupt or insolvent, or seeking reorganization, arrangement, adjustment, winding-up, liquidation, dissolution, composition or other relief with respect to it or its debts, or (B) seeking appointment of a receiver, trustee, custodian, conservator or other similar official for it or for all or any substantial part of its assets, or the Partnership shall make a general assignment for the benefit of its creditors; or (ii) there shall be commenced against the Partnership any case, proceeding or other action or a nature referred to in clause (i) above which (A) results in the entry of an order for relief or any such adjudication or appointment or (B) remains undismissed, undischarged or unbonded for a period of 60 days; or (iii) there shall be commenced against the Partnership any case, proceeding or other action seeking issuance of a warrant of attachment, execution, restraint or similar process against any or any substantial part of its assets which results in the entry of an order for any such relief which shall not have been vacated, discharged, or stayed or bonded pending appeal within 60 days from the entry thereof; or (iv) the Partnership shall take any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any of the acts set forth in clause (i), (ii), or (iii) above; or (v) the Partnership shall generally not, or shall be unable to, or shall admit in writing its inability to, pay its debts as they become due. then, and in any such event, (A) if such event is an Event of Default specified in clause (i) or (ii) of paragraph (b) above with respect to the Partnership, automatically the Loan (with accrued interest thereon) and all other amounts owing under this Note shall immediately become due and payable, and (B) if such event is any other Event of Default, Parent may, in its sole discretion by notice to the Partnership, declare the Loan (with accrued interest thereon) and all other amounts owing under this Note to be due and payable forthwith, whereupon the same shall immediately become due and payable, and Parent may avail itself of all other remedies of a secured creditor, including as set forth under the Pledge Agreement date as of the date hereof among Parent, the Partnership and the Partners. The Partnership agrees (a) to pay or reimburse Parent for all its costs and expenses incurred in connection with the enforcement or preservation of any rights under this Note and any other documents related hereto, including, without limitation, the fees and disbursements of counsel and (b) to pay, indemnify, and hold Parent harmless from, any and all recording and filing fees, stamp or similar taxes or duties or any amendment, supplement or modification of, or any waiver or consent under or in respect of, this Note. The agreements in this paragraph shall survive repayment of the Loan and all other amounts payable hereunder. The right to plead any and all statutes of limitation as a defense to a demand hereunder is hereby waived to the full extent permitted by law. None of the provisions hereof and none of Parent's rights or remedies hereunder on account of any past or future defaults shall be deemed to have been waived by Parent's acceptance of any past due installments or by any indulgence granted by Parent to the Partnership. The Partnership, for itself and any guarantors hereof, and their successors and assigns, waives presentment, demand, protest and notice thereof or of dishonor, and waives any right to be released by reason of any extension of time or change in the terms of payment or any change, alteration or release of any security given for the payment hereof. The Partnership hereby irrevocably and unconditionally (i) submits for itself and its property in any legal action or proceeding relating to or arising from this Note, or for recognition and enforcement of any judgment in respect thereof, to the non-exclusive general jurisdiction of the courts of the United States of America sitting in the Southern District of New York or, in the absence of Federal jurisdiction, the Commercial Part of the Supreme Court of the State of New York for New York County, and appellate courts from any thereof; (ii) consents that any such action or proceeding may be brought in such courts and waives any objection that it may now or hereafter have to the venue of any such action or proceeding in any such court or that such action or proceeding was brought in an inconvenient court and agrees not to plead or claim the same; (iii) agrees that service of process in any such action or proceeding may be effected by mailing a copy thereof by registered or certified mail (or any substantially similar form of mail), postage prepaid, to the Partnership at its address previously notified to Parent; and (iv) agrees that nothing herein shall affect the right to effect service of process in any other manner permitted by law or shall limit the right to sue in any other appropriate jurisdiction. The terms of this Note may be amended, supplemented or modified only with the written consent of Parent and the Partnership. Neither this Note nor any of the rights, interests or obligations under this Note shall be assigned, in whole or in part, by operation of law or otherwise by either of the parties without the prior written consent of the other party. The Note will be binding upon and, inure to the benefit of, and be enforceable by, the parties and their respective successors, assigns and heirs. The Partnership hereby represents and warrants to Parent that (i) the execution, delivery and performance by the Partnership of the Note and its obligations hereunder have been duly authorized by all necessary Partnership action, and by all necessary action on the part of each Partner; (ii) no consent or authorization of, filing with, notice to or other act by or in respect of, any governmental authority or any other person is required in connection with the borrowing hereunder or with the execution, delivery, performance, validity or enforceability of this Note except consents, authorizations, filings and notices that have been obtained or made and are in full force and effect; (iii) this Note constitutes a valid and binding obligation of the Partnership, enforceable against the Partnership in accordance with its terms (subject to applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer and other similar laws affecting creditors' rights generally from time to time in effect and to general principles of equity, including concepts of materiality, reasonableness, good faith and fair dealing, regardless of whether in a proceeding at equity or at law) and (iv) the execution, delivery and performance by the Partnership of this Note, the borrowing hereunder, the use of the proceeds thereof and the compliance by the Partnership with any of the provisions hereof will not violate any material requirement of law or any material contractual obligation of the Partnership or conflict with or result in any breach of any applicable trust or other organizational documents applicable to the Partnership. This Note shall be governed by and construed in accordance with the laws of the State of New York. IN WITNESS WHEREOF, the Partnership has caused this Note to be duly executed the day and year first above written. AIR PARTNERS, L.P. By: 1992 Air GP, Managing General Partner By: 1992 Air, Inc., Managing Partner By: /s/ James J. O'Brien Name: James J. O'Brien Title: Vice President EX-4.13 4 PLEDGE AGREEMENT BETWEEN AIR PARTNERS, L.P. AND NORTHWEST AIRLINES CORPORATION PLEDGE AGREEMENT PLEDGE AGREEMENT, dated as of April 24, 1998, by and between NORTHWEST AIRLINES CORPORATION, a Delaware corporation ("Parent"), AIR PARTNERS, L.P., a Texas limited partnership ("Partnership"). W I T N E S S E T H: WHEREAS, Parent, Newbridge Parent Corporation, a Delaware corporation, the Partnership, the Partners of the Partnership named therein and the Transferors named therein entered into an Investment Agreement, dated as of January 25, 1998 (the "Investment Agreement"); WHEREAS, pursuant to Section 2.3(a) of the Investment Agreement, Parent has agreed to extend a loan to the Partnership (the "Loan"), in the principal amount of TWENTY-EIGHT MILLION THREE HUNDRED FIFTY-SIX THOUSAND FIFTEEN DOLLARS AND NO CENTS ($28,356,015.00) (the "Loan Amount") to fund the purchase of the Warrants, which loan is evidenced by a note (the "Note"); and WHEREAS, the obligation of Parent to make the Loan is conditioned upon, among other things, the execution and delivery by the Partnership of a Pledge Agreement in the form hereof: NOW, THEREFORE, in consideration of the premises and to induce Parent to make the Loan to the Partnership, the parties agree as follows: 1. Defined Terms. Unless otherwise defined herein, terms defined in the Investment Agreement and used herein shall have the meanings given to them in the Investment Agreement. (b) The following terms shall have the following meanings: "Agreement" means this Pledge Agreement, as the same may be amended, modified or otherwise supplemented from time to time. "Code" means the Uniform Commercial Code from time to time in effect in the State of New York. "Collateral" means the Pledged Stock and all Proceeds. "Collateral Account" means any account established to hold money Proceeds, maintained under the sole dominion and control of the Partnership. "Obligations" means the collective reference to: (a) the unpaid principal of and interest on the Loan and all other obligations and liabilities of the Partnership to Parent (including, without limitation, interest accruing at the then applicable rate provided in the Note after the maturity of the Loan and interest accruing at the then applicable rate provided in the Note after the filing of any petition in bankruptcy, or the commencement of any insolvency, reorganization or like proceeding, relating to the Partnership, whether or not a claim for post-filing or post- petition interest is allowed in such proceeding), whether direct or indirect, absolute or contingent, due or become due, or now existing or hereafter incurred, which may arise under, out of, or in connection with, the Note, this Agreement or any other document made, delivered or given in connection therewith; and (b) all obligations and liabilities of the Partnership which may arise under or in connection with this Agreement; in each case whether on account of principal, interest, reimbursement obligations, fees, indemnities, costs, expenses or otherwise (including, without limitation, all fees and disbursements of counsel to Parent that are required to be paid by the Partnership pursuant to the terms of this Agreement). "Pledged Stock" means the shares of capital stock listed on Schedule 1 hereto, which shall be all shares of Company Class A Common Stock issued to the Partnership upon exercise of the Warrants, together with all stock certificates, securities, options or rights of any nature whatsoever that may be issued or granted by the Company to the Partnership in respect of the Pledged Stock while this Agreement is in effect. "Proceeds" means all "proceeds" as such term is defined in Section 9- 306(1) of the Uniform Commercial Code in effect in the State of New York on the date hereof and, in any event, shall include, without limitation, all dividends or other income from the Pledged Stock, collections thereon or distributions with respect thereto. (c) The words "hereof," "herein" and "hereunder" and words of similar import when used in this Agreement shall refer to this Agreement as a whole not to any particular provision of this Agreement, and section and paragraph references are to this Agreement unless otherwise specified. (d) The meanings given to terms defined herein shall be equally applicable to both the singular and plural forms of such terms. 2. Loan. The Partnership hereby confirms its promise to pay the Loan Amount to the order of Parent at the earlier to occur of (i) the Closing and (ii) the date the Investment Agreement is terminated in accordance with its terms, in cash in the event the Investment Agreement is terminated in accordance with its terms or in cash and/or shares of Holdco Sub Class A Common Stock, as the Partners so determine, in the event the Closing occurs. 3. Pledge; Grant of Security Interest. The Partnership hereby delivers to Parent all the Pledged Stock and hereby grants to Parent a first security interest in the Collateral, as collateral security for the prompt and complete payment and performance when due (whether at the stated maturity, by acceleration or otherwise) of the Obligations. 4. Stock Powers. Concurrently with the delivery to Parent of each certificate representing one or more shares of Pledged Stock, the partnership shall deliver an undated stock power covering such certificate, duly executed in blank by the Partnership. 5. Representations and Warranties. The Partnership represents and warrants that: (a) The Partnership is the direct and record owner of the Pledged Stock. The Partnership has, and at the Closing will have, good and valid title to the Pledged Stock, free and clear of any Liens or Restrictions, except the security interest arising under this Agreement. The Partnership has the sole voting power, and sole power of disposition, with respect to the Pledged Stock, and there are no restrictions on the Partnership's ability to transfer the Pledged Stock. (b) Upon delivery to Parent of the stock certificates evidencing the Pledged Stock, the security interest created by this Agreement will constitute a valid, perfected first priority security interest in the Collateral, enforceable in accordance with its terms against all creditors of the Partnership and any Persons purporting to purchase any Collateral from the Partnership (subject to applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer and other similar laws affecting creditors' rights generally from time to time in effect and to general principles of equity, including concepts of materiality, reasonableness, good faith and fair dealing, regardless of whether in a proceeding at equity or at law). (c) (i) The execution, delivery and performance by the Partnership of this Agreement and its obligations hereunder have been duly authorized by all necessary Partnership action, and by all necessary action on the part of each Partner; (ii) no consent or authorization of, filing with, notice to or other act by or in respect of, any governmental authority or any other person is required in connection with the execution, delivery, performance, validity or enforceability of this Agreement except consents, authorizations, filings and notices that have been obtained or made and are in full force and effect; (iii) this Agreement constitutes a valid and binding obligation of the Partnership, enforceable against the Partnership in accordance with its terms (subject to applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer and other similar laws affecting creditors' rights generally from time to time in effect and to general principles of equity, including concepts of materiality, reasonableness, good faith and fair dealing, regardless of whether in a proceeding at equity or at law) and (iv) the execution, delivery and performance by the Partnership of this Agreement and the compliance by the Partnership with any of the provisions hereof will not violate any material requirement of law or any material contractual obligation of the Partnership or conflict with or result in any breach of any applicable trust or other organizational documents applicable to the Partnership. 6. Covenants. The Partnership covenants and agrees with Parent that, from and after the date of this Agreement until this Agreement is terminated and the security interests created hereby are released: (a) Without in any way limiting Section 4.2(b) of the Investment Agreement, which is incorporated herein in its entirety, without the prior written consent of Parent, the Partnership will not (1) sell, assign, transfer, exchange, or otherwise dispose of, or grant any option with respect to, the Collateral, (2) create, incur or permit to exist any Lien or Restriction in favor of, or any claim of any Person with respect to, any of the Collateral, or any interest therein, except for the security interests created by this Agreement or (3) enter into any agreement or undertaking restricting the right or ability of the Partnership or Parent to sell, assign or transfer any of the Collateral. (b) The Partnership shall maintain the security interest created by this Agreement as a first, perfected security interest and shall defend such security interest against claims and demands of all Persons whomsoever. At any time and from time to time, upon the written request of Parent and at the sole expense of the Partnership, the Partnership will promptly and duly execute or cause to be executed and deliver such further instruments and documents and take such further actions as Parent may reasonably request for the purposes of obtaining or preserving the full benefits of this Agreement and of the rights and powers herein granted. (c) The Partnership shall pay, and save Parent harmless from, any and all liabilities with respect to, or resulting from any delay in paying, any and all stamp, excise, sales or other taxes which may be payable or determined to be payable with respect to any of the Collateral or in connection with any of the transactions contemplated by this Agreement. 7. Cash Dividends; Voting Rights. Unless an Event of Default shall have occurred and be continuing and Parent shall have given notice to the Partnership of Parent's intent to exercise its corresponding rights pursuant to Section 8 below, the Partnership shall be permitted to receive all cash dividends paid in the normal course of business of the Company and consistent with past practice in respect of the Pledged Stock and, subject to the provisions of the Investment Agreement, to exercise all voting and corporate rights with respect to the Pledged Stock; provided, however, that no vote shall be cast or corporate right exercised or other action taken which, in Parent's reasonable judgment, would impair the Collateral or which would be inconsistent with or result in any violation of any provision of the Note or this Agreement. 8. Rights of Parent. If an Event of Default (as defined in the Note) shall occur, (1) Parent shall have the right to receive any and all cash dividends paid in respect of the Pledged Stock and make application thereof to the Obligations in such order as Parent may determine, and (2) subject to applicable law (including the HSR Act and any other governmental approvals that may be required in connection therewith), all shares of the Pledged Stock shall be registered in the name of Parent or its nominee, and Parent or its nominee may thereafter exercise (A) all voting, corporate and other rights pertaining to such shares of the Pledged Stock at any meeting of shareholders of the Company or otherwise and (B) any and all rights of conversion, exchange, subscription and any other rights, privileges or options pertaining to such shares of the Pledged Stock as if it were the absolute owner thereof, all without liability except to account for property actually received by it, but Parent shall have no duty to the Partnership to exercise any such right, privilege or option and shall not be responsible for any failure to do so or delay in so doing. 9. Remedies. (a) If an Event of Default shall have occurred, at any time at Parent's election, Parent may apply all or any part of Proceeds held in any Collateral Account in payment of the Obligations in such order as Parent may elect. (b) If an Event of Default shall have occurred, Parent may exercise all other rights and remedies granted in this Agreement and in any other instrument or agreement securing, evidencing or relating to the Obligations, and all rights and remedies of a secured party under the Code. Without limiting the generality of the foregoing, Parent, without demand of performance or other demand, presentment, protest, advertisement or notice of any kind (except any notice required by law referred to below) to or upon the Partnership or any other Person (all and each of which demands, defenses, advertisements and notices are hereby waived), may in such circumstances forthwith collect, receive, appropriate and realize upon the Collateral, or any part thereof, and/or may forthwith sell, assign, give option or options to purchase or otherwise dispose of and deliver the Collateral or any part thereof (or contract to do any of the foregoing), in one or more parcels at public or private sale or sales, in the over-the-counter market, at any exchange, broker's board or office of parent or elsewhere upon such terms and conditions as it may deem advisable and at such prices as it may deem best, for cash or on credit or for future delivery without assumption of any credit risk. Parent shall have the right upon any such public sale or sales, and, to the extent permitted by law, upon any such private sale or sales, to purchase the whole or any part of the Collateral so sold, free of any right or equity of redemption in the Partnership, which right or equity is hereby waived or released. Parent shall apply any Proceeds from time to time held by it and the next proceeds of any such collection, recovery, receipt, appropriation, realization or sale, after deducting all reasonable costs and expenses of every kind incurred in respect thereof or incidental to the care or safekeeping of any of the Collateral or in any way relating to the Collateral or the rights of Parent hereunder, including, without limitation, reasonable attorneys' fees and disbursements of counsel to Parent, to the payment in whole or in part of the Obligations, in such order as Parent may elect, and only after such application and after the payment by Parent of any other amount required by any provision of law, including, without limitation, Section 9-504(1)(c) of the Code, need Parent account for the surplus, if any, to the Partnership. To the extent permitted by applicable law, the Partnership waives all claims, damages and demands it may acquire against Parent arising out of the exercise by them of any rights hereunder. If any notice of a proposed sale or other disposition of Collateral shall be required by law, such notice shall be deemed reasonable and proper if given at least 10 days before such sale or other disposition. The Partnership waives and agrees no to assert any rights or privileges which it may acquire under Section 9-112 of the Code. 10. Registration Rights; Private Sales. (a) If Parent shall determine to exercise its right to sell any or all of the Pledged Stock pursuant to Section 9 hereof, and if in the opinion of Parent it is necessary or advisable to have the Pledged Stock, or that portion thereof to be sold, registered under the provisions of the securities Act, the Partnership will use its reasonable best efforts to cause the Company to (1) execute and deliver, and cause the directors and officers of the Company to execute and deliver, all such instruments and documents, and do or cause to be done all such other acts as may be, in the opinion of Parent, necessary or advisable to register the Pledged Stock, or that portion thereof to be sold, under the provisions of the Securities Act, (2) to use its best efforts to cause the registration statement relating thereto to become effective and to remain effective for a period of one year from the date of the first public offering of the Pledged Stock, or that portion thereof to be sold, and (3) to make all amendments thereto and/or to the related prospectus which, in the option of Parent, are necessary or advisable, all in conformity with the requirements of the Securities Act and the rules and regulations of the Securities and Exchange Commission applicable thereto. The Partnership agrees to use its best efforts to cause the Company to comply with the provisions of the securities or "Blue Sky" laws of any and all jurisdictions which Parent shall designate and to make available to its security holders, as soon as practicable, an earnings statement (which need not be audited) which will satisfy the provisions of Section 11(a) of the Securities Act. (b) The partnership recognizes that Parent may be unable to effect a public sale of any or all the Pledged Stock, by reason of certain prohibitions contained in the Securities Act and applicable state securities laws, by reason of other rules and regulations of Governmental Authorities or otherwise, and may be compelled to resort to one or more private sales thereof to a restricted group of purchasers which will be obliged to agree, among other things, to acquire such securities for their own account for investment and not with a view to the distribution or resale thereof. The Partnership acknowledges and agrees that any such private sale may result in prices and other terms less favorable than if such sale were a public sale and, notwithstanding such circumstances, agrees that any such private sale shall be deemed to have been made in a commercially reasonably manner. Parent shall be under no obligation to delay a sale of any of the Pledged Stock for the period of time necessary to permit the Company to register such securities for public sale under the Securities Act, or under applicable state securities laws, even if the Company would agree to do so. (c) The Partnership further agrees to use its best efforts to do or cause to be done all such other acts as may be necessary to make such sale or sales of all or any portion of the Pledged Stock pursuant to this Section valid and binding and in compliance with any and all other applicable requirements of law. The Partnership further agrees that a breach of any of the covenants contained in this Section will cause irreparable injury to Parent, that Parent has no adequate remedy at law in respect of such breach and, as a consequence, that each and every covenant contained in this Section shall be specifically enforceable against the Partnership, and the Partnership hereby waives and agrees not to assert any defenses against an action for specific performance of such covenants except for a defense that no Event of Default has occurred under the Note. 11. Parent Appointment as Attorney-in-Fact. (a) The Partnership hereby irrevocably constitutes and appoints, upon the occurrence of an Event of Default, Parent and any officer or agent of Parent, with full power of substitution, as its true and lawful attorney-in-fact with full irrevocable power and authority in its place and stead, in its name or in Parent's own name, from time to time in Parent's discretion, for the purpose of carrying out the terms of this Agreement, to take any and all appropriate action and to execute any and all documents and instruments which may be necessary or desirable to accomplish the purposes of this Agreement, including, without limitation, any financing statements, endorsements, assignments or other instruments of transfer. (b) The Partnership hereby ratifies all that said attorneys shall lawfully do or cause to be done pursuant to the power of attorney granted in paragraph 11(a). All powers, authorizations and agencies contained in this Agreement are coupled with an interest and are irrevocable until this Agreement is terminated and the security interests created hereby are released. 12. Execution of Financing Statements. Pursuant to Section 9-402 of the Code, the Partnership authorizes Parent to file financing statements with respect to the Collateral without the signature of the Partnership in such form and in such filing offices as Parent reasonably determines appropriate to perfect the security interests of Parent under this Agreement. 13. Severability. If any provision of this Agreement shall be declared by any court of competent jurisdiction to be illegal, void or unenforceable, all other provisions of this Agreement shall not be affected and shall remain in full force and effect. 14. Amendments in Writing; No Waiver; Cumulative Remedies. (a) None of the terms or provisions of this Agreement may be waived, amended, supplemented or otherwise modified except by a written instrument executed by the Partnership and the Parent. (b) Parent shall not by any act (except by a written instrument pursuant to paragraph 14(a) hereof), delay, indulgence, omission or otherwise be deemed to have waived any right or remedy hereunder or to have acquiesced in any Event of Default or any breach of any of the terms and conditions hereof. No failure to exercise, nor any delay in exercising, on the part of Parent, any right, power or privilege hereunder shall operate as a waiver thereof. No single or partial exercise of any right, power or privilege hereunder shall preclude any other or further exercise thereof or the exercise of any other right, power or privilege. A waiver by Parent of any right or remedy hereunder on any one occasion shall not be construed as a bar to any right or remedy which Parent would otherwise have on any future occasion. (c) The rights and remedies herein provided are cumulative, may be exercised singly or concurrently and are not exclusive of any other rights or remedies provided by law. 15. Section Headings. The titles and headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. 16. Successors and Assigns. Neither this Agreement nor any of the rights, interests or obligations under this Agreement shall be assigned, in whole or in part, by operation of law or otherwise by either of the parties without the prior written consent of the other party. Subject to the preceding sentence, this Agreement will be binding upon, inure to the benefit of, and be enforceable by, the parties and their respective successors and assigns. 17. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York as applied to contracts entered and to be performed in New York and without regard to the application of principles of conflicts of laws. 18. Termination and Release. This Agreement and the security interests granted hereby shall terminate when all the Obligations have been indefeasibly paid in full in accordance with the Note in cash and/or shares of Holdco Sub Class A Common Stock, as the case may be. 19. Submission to Jurisdiction. The Partnership hereby irrevocably and unconditionally (i) subjects for itself and its property in any legal action or proceeding relating to or arising from this Agreement, or for recognition and enforcement of any judgment in respect thereof, to the non- exclusive general jurisdiction of the courts of the United States of America sitting in the Southern District of New York or, in the absence of Federal jurisdiction, the Commercial Part of the Supreme Court of the State of New York for New York County, and appellate courts from any thereof; (ii) consents that any such action or proceeding may be brought in such courts and waives any objection that it may now or hereafter have to the venue of any such action or proceeding in any such court or that such action or proceeding was brought in an inconvenient court and agrees not to plead or claim the same; (iii) agrees that service of process in any such action or proceeding may be effected by mailing a copy thereof by registered or certified mail (or any substantially similar form of mail), postage prepaid, to the partnership at its address previously notified to Parent; and (iv) agrees that nothing herein shall affect the right to effect service of process in any other manner permitted by law or shall limit the right to sue in any other appropriate jurisdiction. 20. Counterparts. This Agreement may be executed in one or more counterparts, all of which shall be considered one and the same agreement, and shall become a binding agreement when one or more counterparts have been signed by each party and delivered to the other. IN WITNESS WHEREOF, the undersigned has caused this Agreement to be duly executed and delivered as of the date first above written. NORTHWEST AIRLINES CORPORATION By: Name: Title: AIR PARTNERS, L.P. By: 1992 Air GP, Managing General Partner By: 1992 Air, Inc., Managing Partner By: /s/ James J. O'Brien Name: James J. O'Brien Title: Vice President SCHEDULE 1 TO PLEDGE AGREEMENT DESCRIPTION OF PLEDGED STOCK Stock Certificate Issuer Class of Stock No. No. of Shares Continental Class A Airlines, Inc. Common Stock 3,039,468 -----END PRIVACY-ENHANCED MESSAGE-----