Exhibit 10.7

Execution Copy

 

 

TAX AGREEMENT

BY AND BETWEEN

CONTINENTAL AIRLINES, INC.,

EXPRESSJET HOLDINGS, INC.

AND

EXPRESSJET AIRLINES, INC.

TAX AGREEMENT

TAX AGREEMENT (this "Agreement"), dated as of April 17, 2002, by and between
Continental Airlines, Inc., a Delaware corporation ("Continental"), ExpressJet
Holdings, Inc., a Delaware corporation ("Holdings"), and ExpressJet Airlines,
Inc. ("ExpressJet Airlines"), a Delaware corporation (formerly known as New
ExpressJet Airlines, Inc.).

RECITALS

WHEREAS, Continental is the common parent corporation of an affiliated group of
corporations within the meaning of Section 1504(a) of the Code and of
consolidated, combined, unitary and other similar groups as defined under
similar laws of other jurisdictions, and Holdings and certain Holdings
Affiliates are members of such groups;

WHEREAS, the groups of which Continental is the common parent and Holdings and
the Holdings Affiliates are members file Consolidated Returns and Combined
Returns;

WHEREAS, Continental and XJT Holdings (formerly known as Continental Express,
Inc.) entered into a Tax Agreement effective January 1, 2001 (the "Original Tax
Agreement") setting forth the principles and responsibilities regarding the
allocation of Taxes (as defined herein) and other related liabilities and
adjustments with respect to Taxes during the periods during which members of the
Holdings Group are members of groups of which Continental is the common parent;

WHEREAS, Continental and Holdings have entered into an Initial Public Offering
Agreement, and as a result of the transactions contemplated by that agreement
Holdings will cease to be a member of the Continental Group; and

WHEREAS, Continental and Holdings now wish to terminate the Original Tax
Agreement effective as of the Deconsolidation Date for federal income tax
purposes and to enter into this Agreement to set forth the principles and
responsibilities regarding Taxes.

NOW, THEREFORE, in consideration of the premises and the representations,
covenants and agreements contained herein and intending to be legally bound, the
parties hereto hereby agree as follows:

ARTICLE I

Definitions

Section 1.1 Definitions

. Capitalized terms not otherwise defined herein shall have the meanings
ascribed to such terms in the Initial Public Offering Agreement. As used in this
Agreement, capitalized terms shall have the following meanings (such meanings to
be equally applicable to both the singular and plural forms of the terms
defined).

"Affiliate" means a Holdings Affiliate or a Continental Affiliate, as the case
may be.

"Agreed Rate" means, LIBOR plus 200 basis points.

"Agreement" has the meaning set forth in the Recitals.

"Allocated Attributes" means with respect to each jurisdiction in which a
Consolidated Return or Combined Return is filed, the Tax Attributes that are
available to the Holdings Group at the end of the period that includes the
Deconsolidation Date.

"Change Event" has the meaning set forth in Section 4.9.

"Change Notice" has the meaning set forth in Section 4.10.

"Code" means the United States Internal Revenue Code of 1986, as amended.

"Combined Group" means a group of corporations or other entities that files a
Combined Return.

"Combined Return" means any Tax Return (other than for Federal Income Taxes)
filed on a consolidated, combined (including nexus combination, worldwide
combination, domestic combination, line of business combination or any other
form of combination) or unitary basis wherein Holdings or one or more Holdings
Affiliates join in the filing of such Tax Return (for any taxable period or
portion thereof) with Continental or one or more Continental Affiliates.

"Consolidated Group" means an affiliated group of corporations within the
meaning of Section 1504(a) of the Code that files a Consolidated Return.

"Continental Affiliate" means a Person that is Controlled by Continental, other
than Holdings and its subsidiaries.

"Consolidated Return" means any Tax Return with respect to Federal Income Taxes
filed on a consolidated basis wherein Holdings or one or more Holdings
Affiliates join in the filing of such Tax Return (for any taxable period or
portion thereof) with Continental or one or more Continental Affiliates.

"Continental" has the meaning set forth in the Recitals.

"Continental Group" means the affiliated group of corporations as defined in
Section 1504(a) of the Code, or similar group of entities as defined under
corresponding provisions of the laws of other jurisdictions, of which
Continental is the common parent, and any corporation or other entity which is a
member of such group for the relevant taxable period or portion thereof, but
excluding any member of the Holdings Group.

"Control" means the possession, direct or indirect, of the power to direct or
cause the direction of the management and policies of a Person, whether through
the ownership of voting securities, by contract or otherwise.

"Deconsolidation" means with respect to each Tax Return (i) any event pursuant
to which Holdings and all Holdings Affiliates cease to be subsidiary
corporations includable in the Consolidated Return, and (ii) any event pursuant
to which neither Holdings nor any Holdings Affiliate continues to be included in
a Combined Return.

"Deconsolidation Date" means with respect to each jurisdiction in which a
Consolidated or Combined Tax Return is filed, the day on which Continental
reasonably determines a Deconsolidation occurs.

"Expected Restructuring Deductions" has the meaning set forth in Section 4.8(c).

"Estimated Tax Installment Date" means the installments due dates prescribed in
Section 6655(c) of the Code or any similar provision of the laws of any other
jurisdiction in which a member of the Continental Group or Holdings Group is
subject to Income Tax.

"Federal Income Tax" means any Tax imposed under Subtitle A of the Code or any
other provision of United States federal Income Tax law (including the Taxes
imposed by Sections 11, 55, 59A, and 1201(a) of the Code), and any interest,
additions to Tax or penalties applicable or related thereto.

"Final Determination" means the final resolution of any Tax (or other matter)
for a taxable period, including related interest or penalties, that, under
applicable law, is not subject to further appeal, review or modification through
proceedings or otherwise, including (1) by the expiration of a statute of
limitations or a period for the filing of claims for Refunds, amending Tax
Returns, appealing from adverse determinations, or recovering any Refund
(including by offset), (2) by a decision, judgment, decree, or other order by a
court of competent jurisdiction, which has become final and unappealable, (3) by
a closing agreement or an accepted offer in compromise under Section 7121 or
7122 of the Code, or comparable agreements under laws of other jurisdictions,
(4) by execution of an Internal Revenue Service Form 870AD, or by a comparable
form under the laws of other jurisdictions (excluding, however, with respect to
a particular Tax Item for a particular taxable period any such form that
reserves (whether by its terms or by operation of law) the right of the taxpayer
to file a claim for Refund and/or the right of the Tax Authority to assert a
further deficiency with respect to such Tax Item for such period), or (5) by any
allowance of a Refund or credit, but only after the expiration of all periods
during which such Refund may be adjusted.

"Holdings" has the meaning set forth in the Recitals.

"Holdings Affiliate" means a Person that directly or indirectly through one or
more intermediaries is Controlled by Holdings.

"Holdings Group" means the affiliated group of corporations as defined in
Section 1504(a) of the Code, or similar group of entities as defined under
corresponding provisions of the laws of other jurisdictions, of which Holdings
(or XJT Holdings or ExpressJet Airlines) is, or would be if it were not a
subsidiary of Continental, the common parent, and any corporation or other
entity which would be a member of such group for the relevant taxable period or
portion thereof.

"Holdings Group Combined Tax Liability" means, with respect to any taxable
period, the Holdings Group's liability for Non-Federal Combined Taxes as
determined under Section 4.3 of this Agreement.

"Holdings Group Federal Income Tax Liability" means, with respect to any taxable
period, the Holdings Group's liability for Federal Income Taxes as determined
under Section 4.2 of this Agreement.

"Holdings Group Taxpayer" means (i) Holdings and any member of the Holdings
Group, (ii) any entity that ceases to be a Holdings Group Taxpayer other than in
a taxable sale of 100% of the stock (or other ownership interests) of such
entity and any affiliated group of corporations as defined in Section 1504(a) of
the Code (or similar group of entities as defined under corresponding provisions
of the laws of other jurisdictions) of which any such entity is or becomes a
member, (iii) any entity to which assets of a Holdings Group Taxpayer are
transferred (other than entities that acquire assets in a transaction in which
all gain or loss is recognized or a transaction to which section 1031 of the
Code applies), and (iv) any entity with which a Holdings Group Taxpayer engages
in a merger, consolidation or similar combination (unless such merger,
consolidation or combination is a transaction in which all gain or loss is
recognized).

"Internal Restructuring" means the transfer of assets and liabilities of XJT
Holdings to ExpressJet Airlines in exchange for common stock and Series A
Preferred Stock of ExpressJet Airlines pursuant to the Asset Purchase and Sale
Agreement, dated as of April 16, 2002, by and between XJT Holdings and
ExpressJet Airlines and the sale of such Series A Preferred Stock pursuant to
the Series A Preferred Stock Purchase Agreement, dated as of April 15, 2002, by
and between XJT Holdings and Boeing Capital Loan Corporation.

"Income Tax" means (a) any Tax based upon, measured by, or calculated with
respect to (1) net income or profits (including, without limitation, any capital
gains Tax, minimum Tax and any Tax on items of Tax preference, but not including
sales, use, real or personal property, gross or net receipts, transfer or
similar Taxes) or (2) multiple bases if one or more of the bases upon which such
Tax may be based, measured by, or calculated with respect to, is described in
clause (1) above, or (b) any United States state or local franchise Tax.

"LIBOR" means, for each month (or portion thereof) during any period, an
interest rate per annum equal to the rate per annum reported, on the date two
days prior to the first day of such month, on the Telerate Page 3750 (of if such
screen shall cease to be publicly available, as reported on Reuters Screen page
"LIBO" or by any other publicly available source of such market rate) for London
interbank offered rates for United States dollar deposits for such month (or
portion thereof).

"Person" means and includes any individual, partnership, joint venture, limited
liability company, corporation, association, joint stock company, trust,
unincorporated organization or similar entity or a governmental authority or any
department or agency or other unit thereof.

"Potential Reduction" has the meaning set forth in Section 4.10.

"Pre-Deconsolidation Period" means any taxable period with respect to a
Consolidated Return or Combined Return, as the case may be, ending on or before
or that includes a Deconsolidation Date.

"Pro Forma Holdings Group Combined Return" means a pro forma non-federal
Combined Tax return or other schedule prepared pursuant to Section 4.3 or
Section 4.8 of this Agreement.

"Pro Forma Holdings Group Consolidated Return" means a pro forma consolidated
Federal Income Tax return or other schedule prepared pursuant to Section 4.2 or
Section 4.8 of this Agreement.

"Proceeding" means any assessment, audit, or other examination by any Tax
Authority, relating to Taxes (including Refunds), whether administrative or
judicial, and any appeal of the foregoing.

"Realized Tax Benefit" has the meaning set forth in Section 4.8(b)

"Refund" means any refund of Taxes, including any reduction in Tax liabilities
by means of a credit, offset or otherwise

"Representatives" means with respect to any Person, any of such Person's
directors, officers, employees, agents, consultants, advisors, accountants,
attorneys and representatives.

"Separate Return" means any Tax Return with respect to Holdings or any Holdings
Affiliate other than a Consolidated Return or a Combined Return.

"Stand-Alone Attributes" means with respect to each jurisdiction in which a
Consolidated Return or Combined Return is filed, the Tax Attributes that would
have been available to the Holdings Group at the end of the period that includes
the Deconsolidation Date assuming that:

(i) the members of the Holdings Group had not been included in any Consolidated
Return or Combined Return of Continental in any Pre-Deconsolidation Period;

(ii) the utilization of any Tax Attribute carryforward by Holdings was subject
to the limitation described in Section 4.2(h);

(iii) the Tax Attributes of the Holdings Group are reduced by the amount of any
such Tax Attributes utilized on a Consolidated Return or Combined Return for
which a member of the Holdings Group was previously compensated under section
4.7 of the Original Tax Agreement or otherwise; and

(iv) the Internal Restructuring had not occurred and any Tax Items associated
with the Internal Restructuring are ignored.

"Tax" means any charges, fees, levies, imposts, duties, or other assessments of
a similar nature, including income, alternative or add-on minimum, gross
receipts, profits, lease, service, service use, wage, wage withholding,
employment, workers compensation, business occupation, occupation, premiums,
environmental, estimated, excise, employment, sales, use, transfer, license,
payroll, franchise, severance, stamp, occupation, windfall profits, withholding,
social security, unemployment, disability, ad valorem, highway use, commercial
rent, capital stock, paid up capital, recording, registration, property, real
property gains, value added, business license, custom duties, or other tax or
governmental fee of any kind whatsoever, imposed or required to be withheld by
any Tax Authority including any interest, or penalties applicable or related
thereto.

"Tax Attribute" means a consolidated net operating loss, a consolidated net
capital loss, a consolidated unused investment credit, a consolidated unused
foreign tax credit, or a consolidated excess charitable contribution (as such
terms are used in Treasury Regulations 1.1502-79 and 1.1502-79A), or a U.S.
federal minimum tax credit or U.S. federal general business credit (but not tax
basis or earnings and profits) or any comparable Tax Item reflected on a
Combined Return that arises in a Pre-Deconsolidation Period (including the
taxable period in which a Deconsolidation Date occurs) and can be carried to a
taxable period ending after a Deconsolidation Date.

"Tax Authority" means a governmental authority (foreign or domestic) or any
subdivision, agency, commission or authority thereof or any quasi-governmental
or private body having jurisdiction over the assessment, determination,
collection or imposition of any Tax (including, without limitation, the Internal
Revenue Service).

"Tax Benefit Payment" means payments made pursuant to Sections 4.8(a)(ii) and
(iii).

"Tax Benefit Percentage" has the meaning set forth in Section 4.8(c)

"Tax Detriment Payment" means payments made pursuant to Sections 4.8(a)(i).

"Tax Item" means any item of income, gain, loss, deduction, credit or other item
reflected on a Tax Return or any Tax Attribute.

"Tax Return" means any return, report, certificate, form or similar statement or
document (including, any related or supporting information or schedule attached
thereto and any information return, amended Tax Return, claim for Refund or
declaration of estimated tax) required to be supplied to, or filed with, a Tax
Authority in connection with the determination, assessment or collection of any
Tax or the administration of any laws, regulations or administrative
requirements relating to any Tax.

"Treasury Regulations" means the final, temporary and proposed income tax
regulations promulgated under the Code, as such regulations may be amended from
time to time (including corresponding provisions of succeeding regulations).

"XJT Holdings" means XJT Holdings, a Delaware corporation, formerly known as
ExpressJet Airlines, Inc.

ARTICLE II

FILING AND PREPARATION OF TAX RETURNS

Section 2.1 In General.

(a) Continental shall have the sole and exclusive responsibility for the
preparation and filing of, and shall prepare and file or cause to be prepared
and filed: (1) all Consolidated Returns and (2) all Combined Returns. Holdings
hereby consents to be included in all such Tax returns.

(b) Except as otherwise provided in Section 2.1(a) or Section 2.1(c), Holdings
shall have the sole and exclusive responsibility for the preparation and filing
of, and shall prepare and file or cause to be prepared and filed, all Tax
Returns of Holdings and any Holdings Affiliate. In filing such Tax Returns,
Holdings agrees to take (and to cause each Holdings Affiliate to take) all
available action to elect not to carry back losses incurred in periods ending
after the Deconsolidation Date to Pre-Deconsolidation Periods for which
Consolidated Retuns or Combined Returns were filed.

(c) Notwithstanding section 2.1(b), Continental has the right to control the
manner in which Holdings or any Holdings Group Taxpayer prepares any Tax Return
filed with respect to a period ending on or before the second anniversary of the
Closing of the Initial Public Offering to the extent such Tax Return involves
the Allocated Attributes, treatment of the Internal Restructuring described in
Section 2.3, the basis of any tangible or intangible asset transferred in the
Internal Restructuring, the eligibility of any such asset to be subject to the
allowance for depreciation or amortization, or the amount of any deduction for
depreciation or amortization relating to any such asset. Holdings shall submit
all such Tax Returns to Continental (no later than 30 days prior to the earlier
of the due date for the filing of such Tax Returns (taking into account
applicable extensions) and the date on which such Tax Return is filed) for
Continental's review and approval, and will make all changes requested by
Continental. Except as otherwise required by a Final Determination, Holdings and
each Holdings Group Taxpayer shall file all Tax Returns for periods ending after
the second anniversary of the Closing of the Initial Public Offering in a manner
consistent with the prior Tax Returns to the extent such Tax Returns relate to
the Allocated Attributes, the Tax treatment of the Internal Restructuring
described in section 2.3, the basis of any tangible or intangible asset
transferred in the Internal Restructuring, the eligibility of any such asset to
be subject to the allowance for depreciation or amortization, or the amount of
any deduction for depreciation or amortization relating to any such asset.
Notwithstanding the forgoing, neither Holdings nor any Holdings Group Taxpayer
shall be required under this section 2.1(c) to take any position on a Tax Return
for which "substantial authority" does not exist within the meaning of section
6662 of the Code and the Treasury regulations promulgated thereunder.

Section 2.2 Manner of Preparing and Filing Tax Returns.

(a) Continental shall have the exclusive right, in its sole discretion, to make
all decisions relating to any Tax Return described in Section 2.1(a) of this
Agreement, including the right to determine (1) the manner in which such Tax
Return shall be prepared and filed, including the elections, methods of
accounting, positions, conventions and principles of taxation to be used and the
manner in which any Tax Item shall be reported, (2) whether any extensions may
be requested, (3) the elections that will be made or revoked by Continental,
each Continental Affiliate, Holdings, and each Holdings Affiliate on such Tax
Return, (4) whether any amended Tax Returns shall be filed, (5) whether any
claims for Refund shall be made, (6) whether any Refunds shall be paid by way of
refund or credited against any liability for the related Tax, and (7) whether to
retain outside firms to prepare or review such Tax Return, whom to retain for
such purpose and the scope of any such retention.

(b) Holdings shall, at its expense, be responsible for preparing (or causing to
be prepared) and shall provide to Continental (or cause to be so provided), all
information that Continental shall reasonably request, in such form as
Continental shall reasonably request, relating to the rights and obligations of
Continental with respect to Taxes and Tax Returns hereunder, including any such
information so requested to enable Continental to prepare the Tax Returns that
it is required to prepare under Section 2.1 and allocate Taxes as required by
this Agreement (which information shall be provided by Holdings no later than
the later of thirty days following Continental's request for such information or
ten (10) days prior to the due date (not taking into account extensions) of such
Tax Return).

(c) In the event that a Tax Item affects a Tax Return described in Section
2.1(a) of this Agreement and also affects a Tax Return described in Section
2.1(b) of this Agreement that is filed after the date of this Agreement,
Holdings shall, to the extent permitted by law, conform the treatment of such
Tax Item in any Tax Return described in Section 2.1(b) of this Agreement to the
treatment of such Tax Item in the applicable Tax Return described in Section
2.1(a) of this Agreement.

Section 2.3 Treatment of Internal Restructuring

. Continental shall treat (and shall cause each Continental Affiliate to treat)
and Holdings shall treat (and shall cause each Holdings Group Taxpayer to treat)
the transfer of tangible and intangible assets by XJT Holdings to ExpressJet
Airlines in connection with the Internal Restructuring as a taxable sale of such
assets to ExpressJet Airlines for federal income tax purposes. Not later than
(60) days after the end of the Tax year of Continental that includes the
Deconsolidation, Continental shall provide Holdings a schedule (and related
supporting documentation) listing, as of the Deconsolidation Date, the basis
allocable to each class of assets of ExpressJet Airlines and the period, if any,
over which such class of assets is amortizable or depreciable for federal income
tax purposes. Absent a Final Determination to the contrary or a change in
applicable law, Continental shall (and shall cause each Continental Affiliate
to) and Holdings shall (and will cause each Holdings Group Taxpayer to) file all
federal income Tax Returns in a manner consistent with such schedule.
Continental and Holdings agree that all calculations under this Agreement will
be made in a manner consistent with such schedule. Notwithstanding the forgoing,
no Holdings Group Taxpayer shall be required under this section 2.3 to take any
position on a Tax Return for which "substantial authority" does not exist within
the meaning of section 6662 of the Code and the Treasury regulations promulgated
thereunder.

ARTICLE III

Payment of Taxes to Tax Authorities

Section 3.1 Consolidated and Combined Taxes.

Continental shall timely pay (or cause to be paid) to the appropriate Tax
Authority all Taxes with respect to each Consolidated Return and each Combined
Return due for all Pre-Deconsolidation Periods.

Section 3.2 Separate Taxes

. Holdings shall timely pay (or cause to be paid) to the appropriate Tax
Authorities all Taxes of Holdings or any member of the Holdings Group reflected
on a Separate Return and, except as provided below, shall have no claim against
Continental or any Continental Affiliate for any such Taxes.

ARTICLE IV

Allocation of Taxes

Section 4.1 Holdings' Liability for Consolidated and Combined Taxes

. For each Pre-Deconsolidation Taxable Period, Holdings shall be liable to
Continental for the Holdings Group Federal Income Tax Liability and the Holdings
Group Combined Tax Liability for such taxable period.

Section 4.2 Holdings Group Federal Income Tax Liability

. The Holdings Group Federal Income Tax Liability for a period shall be the
Federal Income Taxes for such taxable period, as determined on a Pro Forma
Holdings Group Consolidated Return prepared:

(a) assuming that the members of the Holdings Group were not included in the
Continental Consolidated Group for all Pre-Deconsolidation Periods;

(b) except as provided in section 4.2(f), using all elections, accounting
methods and conventions used on the Consolidated Return for such period;

(c) applying the highest statutory marginal corporate income Tax rate in effect
for such taxable period (or portion thereof);

(d) assuming that the Tax Attributes of the Holdings Group are reduced by the
amount of any such Tax Attributes utilized on a Consolidated Return or Combined
Return for which a member of the Holdings Group was previously compensated under
section 4.7 of the Original Tax Agreement or otherwise;

(e) assuming the exemption amount in section 55 of the Code for such year equals
zero and that the amount specified in section 59(a)(a) of the Code is zero;

(f) assuming that the Holdings Group elects not to carry back any net operating
losses;

(g) ignoring the effects of the Internal Restructuring; and

(h) assuming that the utilization of any Tax Attribute carryforward by Holdings
(including, but not limited to, the Holdings Group's deduction for any net
operating loss carryforwards under section 172 of the Code, any capital loss
carryforwards, any charitable contribution carryforwards or any Tax credits) is
limited to the amount of such Tax Attributes that would be utilized on the
Consolidated Return for such period ignoring the effect of the Internal
Restructuring.

Section 4.3 Holdings Group Combined Tax Liability

. With respect to any Pre-Deconsolidation Period, the Holdings Group Combined
Tax Liability shall be the sum for such taxable period of the Holdings Group's
liability for each Non-Federal Combined Tax, as determined on Pro Forma Holdings
Group Combined Returns prepared in a manner consistent with the principles and
procedures set forth in Section 4.2 hereof.

Section 4.4 Preparation and Delivery of Pro Forma Tax Returns

. With respect to Pre-Deconsolidation Periods for which the Tax Return has not
been filed as of the date hereof, not later than thirty (30) days following the
date on which the related Consolidated Return or Combined Return, as the case
may be, is filed with the appropriate Tax Authority, Continental shall prepare
and deliver to Holdings a pro forma Tax Return calculating the Holdings Group
Federal Income Tax Liability or the Holdings Group Combined Tax Liability which
is attributable to the period covered by such filed Tax Return.

Section 4.5 Installment Payments and Extensions.

(a) Estimated Consolidated Taxes. Not later than five (5) days prior to each
Estimated Tax Installment Date with respect to any Consolidated Return for a
Pre-Deconsolidation Period, Continental may reasonably determine under the
principles of Section 6655 of the Code the estimated amount of the related
installment of the Holdings Group Federal Income Tax Liability and provide
Holdings with a written notice of such determination. Holdings shall pay to
Continental no later than the Estimated Tax Installment Date the amount thus
determined.

(b) Estimated Combined Taxes. Following the payment of any installment payment
with respect to any Combined Tax Return for any Pre-Deconsolidation Period,
Continental may reasonably determine the estimated amount of the Holdings Group
Federal Income Tax Liability and Holdings Group Combined Tax Liability and
within the first twenty (20) days following such payment provide Holdings with a
written notice of such determination. Holdings shall pay to Continental the
amount thus determined within five (5) days of the receipt of such notice.

(c) Extensions. If Continental files for an extension of time to file a Tax
Return relating to Consolidated Taxes or Combined Taxes for a
Pre-Deconsolidation Period, not later than five (5) days prior to due date of
such Tax return (without extension), (i) Continental will provide to Holdings a
good faith estimate of the Holdings Group Federal Income Tax Liability or
Holdings Group Combined Tax Liability for the entire period cover by the Tax
Return, and (ii) to the extent such amount differs from the aggregate amount of
payments made pursuant to Sections 4.5(a) or (b) with respect to the Taxes
covered by such Tax Return, Holdings shall pay to Continental, or Continental
shall pay to Holdings, as appropriate, the amount of such difference.

Section 4.6 True-Up Payments.

(a) Consolidated Taxes. Not later than fifteen (15) days following the
completion and delivery to Holdings of the Pro Forma Holdings Group Consolidated
Return for any Pre-Deconsolidation Period, Holdings shall pay to Continental, or
Continental shall pay to Holdings, as appropriate, an amount equal to (i) the
difference, if any, between the Holdings Group Federal Income Tax Liability for
such period and the aggregate amount paid by Holdings with respect to such
period under Sections 4.5(a) and (c) of this Agreement and Section 4.5(a) of the
Original Tax Agreement, plus (ii) interest on such amount computed (A) in the
case of payments from Holdings to Continental, under principles of Code Sections
6601 and 6655 substituting the Agreed Rate for the interest rates provided for
in such Code sections, and (B) in the case of payments from Continental to
Holdings, under principles of Code Section 6611 substituting the Agreed Rate for
the interest rates provided for in such Code section.

(b) Combined Taxes. Not later than fifteen (15) days following the completion
and delivery to Holding of the Pro Forma Holdings Group Combined Return of any
for any Pre-Deconsolidation Period, Holdings shall pay to Continental, or
Continental shall pay to Holdings, as appropriate, an amount equal to (i) the
difference, if any, between the Holdings Group Combined Tax Liability for the
Pre-Deconsolidation Period and the amounts paid by Holdings with respect to such
period under Sections 4.5(b) and (c) of this Agreement and Section 4.5(b) of the
Original Tax Agreement, plus (ii) interest on such amount computed (A) in the
case of payments from Holdings to Continental, under principles of Code Sections
6601 and 6655 substituting the Agreed Rate for the interest rates provided for
in such Code sections, and (B) in the case of payments from Continental to
Holdings, under principles of Code Section 6611 substituting the Agreed Rate for
the interest rates provided for in such Code section.

Section 4.7

[Intentionally Omitted]

Section 4.8 Compensation for Tax Benefits.

(a) Tax Detriment/Benefit Payments. With respect to each taxable period ending
after the Deconsolidation Date, Continental and Holdings will make the following
payments in the manner provided in Section 4.8(d):

(i) Continental shall pay to Holdings 100% of the amount of any Realized Tax
Detriment;

(ii) Holdings shall pay 100% of the amount of any Realized Tax Benefit to
Continental until the cumulative amount of all payments made pursuant to this
Section 4.8(a)(ii) equals the cumulative amount of Payments made by Continental
pursuant to Section 4.8(a)(i) that are attributable to Tax Items resulting from
the Internal Restructuring; and

(iii) Holdings shall pay to Continental the product of (A) any Realized Tax
Benefit for such period in excess of those included in Section 4.8(a)(ii),
multiplied by (B) the applicable Tax Benefit Percentage.

(b) Calculation of Realized Tax Detriment and Realized Tax Benefit.

(i) The Realized Tax Detriment for any taxable period is the excess, if any, of
the actual liability for Taxes of Holdings Group Taxpayers with respect to such
period (computed assuming that the Holdings Group Taxpayers make all available
elections to cause any losses to be carried forward to future periods rather
than carried back to prior years) over the Adjusted Holdings Tax Liability.

(ii) The Realized Tax Benefit for any taxable period is the excess, if any, of
the Adjusted Holdings Tax Liability over the actual liability for Taxes of the
Holdings Group Taxpayers with respect to such period (computed assuming that the
Holdings Group Taxpayers make all available elections to cause any losses to be
carried forward to future periods rather than carried back to prior years).

(iii) For purposes of this Section 4.8(b), the Adjusted Holdings Tax Liability
is the Tax liability of the Holdings Group Taxpayers calculated (A) using the
same methods and elections used on the relevant Tax Returns as filed, (B)
excluding the effects of the Internal Restructuring (including any Tax Items
associated with the Internal Restructuring that are recognized as a result of
the Deconsolidation), (C) assuming the Tax Attributes of the Holdings Group as
of the end of the year that includes the Deconsolidation Date equaled the
Stand-Alone Attributes, and (D) assuming that all available elections are made
to cause any losses to be carried forward to future periods rather than carried
back to prior year. The calculation of Adjusted Holdings Tax Liability shall
take into account any tax consequences of an "ownership change" of Holdings
within the meaning of section 382 of the Code resulting from any sales of
Holdings stock pursuant to or after the Initial Public Offering.

(iv) It is the intent of the parties that no Tax Item shall result in duplicate
payments under this Agreement, and accordingly, once a Tax Item has been
reflected in the calculation of Realized Tax Benefit or Realized Tax Detriment,
subsequent calculations of those amounts shall be performed in a manner so as to
avoid any duplication of benefit for the same Tax Item.

(c) Calculation of Tax Benefit Percentage.

(i) The Tax Benefit Percentage equals (A) 100% until the Holdings Group
Taxpayers have Realized Tax Benefits attributable to Expected Restructuring
Deductions in an aggregate amount equal to 33.33% of the total Expected
Restructuring Deductions, (B) 90% until the Holdings Group Taxpayers have
Realized Tax Benefits attributable to additional Expected Restructuring
Deductions equal to 33.33% of the total Expected Restructuring Deductions, and
(C) 80% for the remaining Realized Tax Benefits. Notwithstanding the forgoing,
for any period beginning after December 31, 2018, the Tax Benefit Percentage
shall be 100%.

(ii) For purposes of the calculation of Tax Benefit Percentage, the Expected
Restructuring Deductions shall equal the total increase in the basis of tangible
and intangible assets of Holdings resulting from the Internal Restructuring that
are actually subject to amortization or depreciation for federal income tax
purposes.

(d) Estimated Payments and True-Up.

(i) Not later than five (5) days prior to each Estimated Tax Installment Date of
the Holdings Group (or any member thereof) , (i) Holdings will provide to
Continental a good faith estimate of the anticipated Tax Detriment Payment or
Tax Benefit Payment expected to accrue under the principles of Section 6655 of
the Code during the period to which the Estimated Tax Installment Date relates
and (ii) Holdings shall pay to Continental, or Continental shall pay to
Holdings, as appropriate, such estimated amount. Notwithstanding the foregoing,
no payment will be required to be made under this Section 4.8(d)(i) prior to
fifteen (15) days following the delivery of the schedule described in Section
2.3.

(ii) If the Holdings Group (or a member thereof) files for an extension of time
to file a Tax Return, not later than five (5) days prior to due date of such Tax
return (without extension), (i) Holdings will provide to Continental a good
faith estimate of the anticipated Tax Detriment Payment or Tax Benefit Payment
expected to accrue during the entire period cover by the Tax Return and (ii) to
the extent such amount differs from the aggregate amount of payments made
pursuant to Section 4.8(d)(i), Holdings shall pay to Continental, or Continental
shall pay to Holdings, as appropriate, the amount of such difference.
Notwithstanding the foregoing, no payment or will be required to be made under
this Section 4.8(d)(ii) prior to fifteen (15) days following the delivery of the
schedule described in Section 2.3.

(iii) Not later than fifteen (15) days following the filing of the applicable
Tax Return, Holdings shall provide to Continental for its review the calculation
of the Tax Detriment Payment or Tax Benefit Payment for the period covered by
such Tax Return. Not later than fifteen (15) days following the delivery of the
calculation of the Tax Benefit Payment for the period, Holdings shall pay to
Continental, or Continental shall pay to Holdings, as appropriate, an amount
equal to (A) the difference, if any, between the Tax Detriment Payment or Tax
Benefit Payment for the period covered by the Tax Return and the aggregate
amount of any payments made under Section 4.8(d)(i) and (ii) with respect to
such period, plus (B) interest on such amount computed (1) in the case of
payments from Holdings to Continental, under principles of Code Sections 6601
and 6655 substituting the Agreed Rate for the interest rates provided for in
such Code sections, and (2) in the case of payments from Continental to
Holdings, under principles of Code Section 6611 substituting the Agreed Rate for
the interest rates provided for in such Code section.

(e) Separate Application for Each Tax Jurisdiction. The payment obligations and
calculations made pursuant to this section 4.8 shall be made separately for each
jurisdiction in which the Holdings Group (or any Member thereof) is subject to
Income Tax, and in the case of a taxing jurisdiction other than the United
States, references in section 4.8 to provisions the Code shall be to any similar
provision of the laws of such other jurisdiction.

(f) Prior Compensation. Notwithstanding any other provision of this section 4.8,
in no event shall a party to this Agreement be required to make any payment
pursuant to this section to the extent compensation was previously paid for the
same Tax Attributes or Tax Items pursuant to section 4.7 of the Original Tax
Agreement or otherwise.

Section 4.9 Subsequent Changes in Treatment of Tax Items

. In the event of a change in the treatment of any Tax Item of any member of the
Continental Group or any Holdings Group Taxpayer for any taxable period as a
result of a Final Determination, the filing of a claim for Refund, the filing of
an amended Tax Return for such period or the reflection of a change in treatment
reflected in a subsequently filed Tax Return (a "Change Event"), the following
steps shall be taken:

(a) To the extent the change affects a Pre-Deconsolidation Period, Continental
shall prepare Pro Forma Holdings Group Consolidated Returns and/or Pro Forma
Holdings Group Combined Returns, as appropriate, for each such period with and
without the changed Tax Items and determine the amount of change, if any, in the
amount of the Holdings Group Federal Income Tax Liability and/or the Holdings
Group Combined Tax Liability for each such period that results from the change.
If the change results in a net increase in the Holdings Group Federal Income Tax
Liability and Holdings Group Combined Tax Liability for all affected periods,
Holdings shall pay to Continental the amount of the increase no later than
twenty (20) days following the relevant Change Event. If the change results in a
net decrease in the Holdings Group Federal Income Tax Liability and Holdings
Group Combined Tax Liability for all affected periods, Continental shall pay to
Holdings the amount of the increase no later than twenty (20) days following the
relevant Change Event.

(b) To the extent the change affects a taxable period ending after the
Deconsolidation Date, the Tax Detriment Payments and Tax Benefit Payments shall
be recalculated under Section 4.8. If the recalculated payment differs from the
original amount, Holdings shall pay to Continental, or Continental shall pay to
Holdings, as appropriate, an amount equal to such difference, no later than
twenty (20) days following the relevant Change Event. In performing the
recalculations required by this paragraph, the Adjusted Holdings Tax Liability
will not include any interest and penalties from the relevant change (to the
extent such interest and penalties result from changes to the Tax treatment of
the Internal Restructuring described in Section 2.3), with the result that any
such interest and penalties incurred by a Holdings Group Taxpayer will decrease
the recalculated Tax Benefit Payments or increase the recalculated Tax Detriment
Payments. As appropriate, to the extent that a recalculated payment made
pursuant to this Section 4.9(b) does not include interest (or a similar charge)
paid to a Tax Authority, such recalculated payment shall include interest
computed under the principles of 4.8(d)(iii).

Section 4.10 Escrow of Tax Benefit Payments

. If Continental or any member of the Continental Group or any Holdings Group
Taxpayer receives a notice of proposed adjustment (I.R.S. Form 5701), a final
audit report, a statutory notice of deficiency or similar written notice from
any Tax Authority (collectively, a "Change Notice"), which, if sustained, would
result in Continental being required to make a payment to Holdings under section
4.9(b) with respect to Tax Benefit Payments made prior to the receipt of the
Change Notice or a reduction in future Tax Benefit Payments required to be paid
pursuant to by Holdings to Continental (collectively, the "Potential
Reduction"), then:

(a) From the date such Change Notice is received until there is a Final
Determination with respect to the adjustments proposed therein, any Tax Benefit
Payments required to be made by Holdings to Continental pursuant to section 4.8
shall instead be paid by Holdings (i) first, to a mutually agreed upon escrow
agent that will hold such funds until such Final Determination is received with
respect to the Change Notice, until the amount held by the escrow agent equals
the Potential Reduction, and (ii) thereafter, to Continental.

(b) If the Final Determination (i) results in no adjustment to the Tax Benefit
Payments, then the escrowed funds (along with interest earned thereon) shall be
distributed to Continental, and (ii) results in an adjustment to the Tax Benefit
Payments, the escrowed funds (along with interest earned thereon) shall be
distributed to Continental and/or Holdings in accordance with the recalculated
Tax Benefit Payment determined under Section 4.9.
Tax Attributes

ARTICLE V

Tax Attributes

Section 5.1 Allocation of Tax Items upon Deconsolidation.

(a) In General. All Tax computations for any period that includes a
Deconsolidation Date, shall be made pursuant to the principles of Section
1.1502-76(b) of the Treasury Regulations or of a corresponding provision under
the laws of other jurisdictions. For the avoidance of doubt, the parties agree
that the Tax Items relating to the Internal Restructuring are attributable to
the Pre-Deconsolidation Period and will be reflected on the appropriate
Consolidated Return and Combined Return.

(b) Reattribution. Continental may, at its option, elect to reattribute to
itself certain Tax Items of the Holdings Group pursuant to Section 1.1502-20(g)
of the Treasury Regulations. If Continental makes such election, Holdings shall
comply with the requirements of Section 1.1502-20(g)(4) of the Treasury
Regulations.

Section 5.2 Allocation of Tax Attributes

. To the extent permitted by applicable law, the relevant Tax Attributes with
respect to the Consolidated Group or Combined Group, as the case may be, shall
be allocated (except as otherwise provided under section 5.1(b)) to the
corporation or entity that created or generated such Tax Attributes.

Section 5.3 Earnings and Profits

. The Federal Income Tax liability of the Consolidated Group shall, for purposes
of determining the earnings and profits of each member, be allocated in
accordance with the methods prescribed in Treasury Regulation section
1.1552-1(a)(2) and Treasury Regulation section 1.1502-33(d)(2)(ii) (using 100%
as the fixed percentage).

ARTICLE VI

Additional Rights and Obligations

Section 6.1 Provision of Information and Mutual Cooperation.

(a) Holdings shall (and shall cause the Holdings Affiliates to), (1) furnish to
Continental in a timely manner such information, documents and other materials
as Continental may reasonably request for purposes of (i) preparing any Tax
Return (or pro forma Tax return prepared in accordance with Section 4 hereof) or
portion thereof for which the Continental has responsibility for preparing under
this Agreement, (ii) contesting or defending any Proceeding, and (iii) making
any determination or computation necessary or appropriate under this Agreement,
(2) make its employees available to the other to provide explanations of
documents and materials and such other information as the other may reasonably
request in connection with any of the matters described in subclauses (i), (ii)
and (iii) of clause (1) above, and (3) reasonably cooperate in connection with
any Proceeding. Except as provided in section 2.1(c), Continental shall not be
entitled to review the Tax Returns and associated workpapers and similar
documents of Holdings. Notwithstanding any other provision of this Agreement, no
member of the Holdings Group shall be required to provide Continental or any
Continental Affiliate access to or copies of (1) any Tax information as to which
any member of the Holdings Group is entitled to assert the protection of any
privilege, or (2) any Tax information as to which any member of the Holdings
Group is subject to an obligation to maintain the confidentiality of such
information. If a dispute arises regarding accuracy of any information required
to be supplied pursuant to this section 6.1(a), Holdings and Continental shall
engage an Independent Entity pursuant to the procedures in Section 8.1 to
resolve any such dispute.

(b) Continental shall (and shall cause the Continental Affiliates to) (1)
furnish to the Holdings in a timely manner such information, documents and other
materials as Holdings may reasonably request for purposes of (i) preparing any
Tax Return (or pro forma Tax return prepared in accordance with Section 4
hereof) or portion thereof for which the other has responsibility for preparing
under this Agreement, (ii) contesting or defending any Proceeding, and (iii)
making any determination or computation necessary or appropriate under this
Agreement, (2) make its employees available to the other to provide explanations
of documents and materials and such other information as the other may
reasonably request in connection with any of the matters described in subclauses
(i), (ii) and (iii) of clause (1) above, and (3) reasonably cooperate in
connection with any Proceeding. Notwithstanding any other provision of this
Agreement, no member of the Continental Group shall be required to provide
Holdings or any Holdings Affiliate access to or copies of (1) any Tax
information that relates exclusively to any member of the Continental Group, (2)
any Tax information as to which any member of the Continental Group is entitled
to assert the protection of any privilege, or (3) any Tax information as to
which any member of the Continental Group is subject to an obligation to
maintain the confidentiality of such information. Continental shall use
reasonable efforts to separate any such information from any other information
to which Holdings is entitled to access or to which Holdings is entitled to copy
under this Agreement, to the extent consistent with preserving its rights under
this Section 6.1(b). If a dispute arises regarding accuracy of any information
required to be supplied pursuant to this section 6.1(b), Holdings and
Continental shall engage an Independent Entity pursuant to the procedures in
Section 8.1 to resolve any such dispute.

Section 6.2 Indemnification.

(a) Failure to Pay. Continental and each Continental Affiliate shall jointly and
severally indemnify Holdings and each Holdings Affiliate, and hold them harmless
from and against any Tax or Losses that are attributable to, or results from the
failure of Continental or any Continental Affiliate to make any payment required
to be made under this Agreement. Holdings and each Holdings Affiliate shall
jointly and severally indemnify Continental and each Continental Affiliate, and
hold them harmless from and against any Tax or Losses that are attributable to,
or results from, the failure of Holdings or any Holdings Affiliate to make any
payment required to be made under this Agreement.

(b) Inaccurate or Incomplete Information. Continental and each Continental
Affiliate shall jointly and severally indemnify Holdings, each Holdings
Affiliate and each of their respective Representatives, and hold them harmless
from and against any net Taxes or net Losses attributable to Continental or any
Continental Affiliate supplying Holdings or any Holdings Affiliate with
inaccurate or incomplete information, in connection with the preparation of any
Tax Return, any Proceeding, or any calculation under this Agreement. Holdings
and each Holdings Affiliate shall jointly and severally indemnify Continental,
each Continental Affiliate and their respective Representatives, and hold them
harmless from and against any net Taxes or net Losses attributable to Holdings
or any Holdings Affiliate supplying Continental or any Continental Affiliate
with inaccurate or incomplete information, in connection with the preparation of
any Tax Return, any Proceeding or any calculation under this Agreement.

Section 6.3 Interest

. Unless a different rate of interest is provided for in this Agreement,
payments pursuant to this Agreement that are not made within the period
prescribed in this Agreement or, if no period is prescribed, within fifteen (15)
days after demand for payment is made, shall bear interest through and including
the date of payment at a per annum rate equal the Agreed Rate or such lesser
rate as may be required by applicable law. Such interest will be payable at the
same time as the payment to which it relates and shall be calculated based on a
year of 365 or 366 days, as appropriate, for the actual number of days for which
due.

Section 6.4 Closing of Tax Periods

. For Federal Income Tax purposes, the taxable year of the Holdings Group shall
end as of the close of the Deconsolidation Date and, with respect to all other
Income Taxes, Continental (or the appropriate member of the Continental Group)
and Holdings (or the appropriate member of the Holdings Group) shall, unless
prohibited by applicable law, take all action necessary or appropriate to close
the taxable period of the members of the Holdings Group as of the close of the
Deconsolidation Date. Neither any member of the Continental Group nor any member
of the Holdings Group shall take any position inconsistent with the preceding
sentence on any Income Tax Return.

ARTICLE VII

Proceedings

Section 7.1 In General

.

(a) Subject to Section 7.1(b) of this Agreement, Continental shall have the
exclusive right, in its sole discretion, to control, contest, and represent the
interests of Continental, any Continental Affiliate, Holdings or any Holdings
Group Taxpayer that is a Holdings Affiliate and to resolve, settle or agree to
any deficiency, claim or adjustment proposed, asserted or assessed in connection
with or as a result of any Proceeding relating to (i) any Tax Return described
in Section 2.1(a) of this Agreement or (ii) the Allocated Attributes, the
treatment of the Internal Restructuring, the basis of any tangible or intangible
asset transferred in the Internal Restructuring, the eligibility of any such
asset to be subject to the allowance for depreciation or amortization or the
amount of any deduction for depreciation or amortization relating to any such
asset (in each case without regard for the identity of the taxpayer or the
entity that is responsible for filing the relevant Tax Return). Continental's
rights shall extend to any matter pertaining to the management and control of
any Proceeding, including, without limitation, execution of waivers, choice of
forum and scheduling of conferences. Continental may require Holdings to pay any
Tax with respect to a claim or adjustment described in (i) or (ii) and sue for a
refund, provided that Continental advance to Holdings the amount of such payment
on an interest-free basis. Continental shall use reasonable efforts to cooperate
and coordinate with Holdings or any Holdings Group Taxpayer that is a Holdings
Affiliate with respect to Proceedings described above that also involve Tax
Returns and Tax Items not described in clauses (i) and (ii).

(b) Except as provided in Section 7.1(a), Holdings shall have the exclusive
right, in its sole discretion, to control, contest, and represent the interests
of Holdings or any Holdings Group Taxpayer in any Proceeding relating to any Tax
Return described in Section 2.1(b) of this Agreement and to resolve, settle, or
agree to any deficiency, claim or adjustment proposed, asserted or assessed in
connection with or as a result of any such Proceeding.

(c) In addition to the parties' obligations under Section 6.1 of this Agreement,
(i) Holdings shall, and shall cause each Holdings Group Taxpayer that is a
Holdings Affiliate to, cooperate fully with Continental in contesting or
defending any Proceeding described in Section 7.1(a), including, without
limitation, by furnishing to Continental in a timely manner such information,
documents or other materials as Continental may reasonably request and (ii)
Continental shall, and shall cause each Continental Affiliate to, cooperate
fully with Holdings in contesting or defending any Proceeding described in
Section 7.1(b), including, without limitation, by furnishing to Holdings in a
timely manner such information, documents or other materials as Holdings may
reasonably request.

Section 7.2 Notice

. If Continental or any member of the Continental Group receives written notice
of or relating to, any Proceeding from a Tax Authority that asserts, proposes or
recommends a deficiency, claim or adjustment that, if sustained, would result in
the redetermination of a Tax Item of a Holdings Group Taxpayer, Continental
shall promptly provide a copy of such notice to Holdings (but in no event later
than fifteen (15) days following the receipt of such notice). If Holdings or any
Holdings Group Taxpayer that is a Holdings Affiliate receives written notice of,
or relating to, any Proceeding from a Tax Authority with respect to a Tax Return
described in Section 2.l(a) of this Agreement, Holdings shall promptly provide a
copy of such notice to Continental (but in no event later than fifteen (15) days
following the receipt of such notice).

Section 7.3 Failure to Notify

. The failure of Continental or Holdings to notify the other of any matter
relating to a particular Tax for a taxable period or to take any action
specified in this Agreement shall not relieve such other party of any liability
and/or obligation which it may have under this Agreement with respect to such
Tax for such taxable period except to the extent that such other party's rights
hereunder are actually prejudiced by such failure.

ARTICLE VIII

Dispute Resolution

Section 8.1 Dispute Resolution.

In the event that Continental and Holdings disagree as to the amount or
calculation of any payment to be made under this Agreement, or the
interpretation or application of any provision under this Agreement, the parties
shall attempt in good faith to resolve such dispute. If such dispute is not
resolved within sixty (60) days following the commencement of the dispute,
Continental and Holdings shall jointly retain a nationally recognized law firm
or independent public accounting firm, which firm is independent of both parties
(the "Independent Entity"), to resolve the dispute. The Independent Entity shall
act as an arbitrator to resolve all points of disagreement and its decision
shall be final and binding upon all parties involved. Following the decision of
the Independent Entity, Continental and Holdings shall each take or cause to be
taken any action necessary to implement the decision of the Independent Entity.
The fees and expenses relating to the Independent Entity shall be borne equally
by Continental and Holdings.

ARTICLE IX
Miscellaneous

Section 9.1 Effectiveness

. This Agreement shall be effective on closing date of the Initial Public
Offering.

Section 9.2 Notices

. All notices, requests, demands and other communications under this Agreement
shall be in writing and, unless otherwise provided herein, shall be deemed to
have been duly given (i) on the date of service if served personally on the
party to whom notice is given, (ii) on the day of transmission if sent via
facsimile transmission to the facsimile number given below; provided, telephonic
confirmation of receipt is obtained promptly after completion of transmission,
(iii) on the business day after delivery to an overnight courier service or the
Holdings mail service maintained by the United States Postal Service, provided,
receipt of delivery has been confirmed, or (iv) on the fifth day after mailing,
provided, receipt of delivery is confirmed, if mailed to the party to whom
notice is to be given, by first class mail, registered or certified, postage
prepaid, properly addressed and return-receipt requested, to the party as
follows:

If to Continental or any Continental Affiliate, to:

Continental Airlines, Inc.

1600 Smith Street, HQSTY

Houston, Texas 77002

Attention: Chief Financial Officer

Telecopy No.: (713) 324-2448

with a copy to:

Continental Airlines, Inc.

1600 Smith Street, HQSLG

Houston, Texas 77002

Attention: General Counsel

Telecopy No.: (713) 324-5161

if to Holdings, to:

ExpressJet Holdings, Inc.

1600 Smith Street, HQSCE

Houston, Texas 77002

Attention: Chief Financial Officer

Telecopy No.: (713) 324-4420

Any party may change its address or fax number by giving the other party written
notice of its new address or fax number in the manner set forth above.

Section 9.3 Changes in Law

. Any reference to a provision of the Code or a law of another jurisdiction
shall include a reference to any applicable successor provision or law.

Section 9.4 Successors and Assigns

. This Agreement and all of the provisions hereof shall be binding upon and
inure to the benefit of the parties and their respective successors and
permitted assigns, but neither this Agreement nor any of the rights, interests
or obligations hereunder shall be assigned by either party without the prior
written consent of the other party. Holdings shall cause any entity that becomes
a Holding Group Taxpayer after the date hereof to agree to be bound by the terms
of this agreement and acknowledge that Continental is a beneficiary of that
agreement.

Section 9.5 Authorization, Etc

. Each of the parties hereto hereby represents and warrants that it has the
power and authority to execute, deliver and perform this Agreement, that this
Agreement has been duly authorized by all necessary corporate action on the part
of such party, that this Agreement constitutes a legal, valid and binding
obligation of such party (subject to applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting creditors' rights
generally and general equity principles) and that the execution, delivery and
performance of this Agreement by such party does not contravene or conflict with
any provision of law or of its charter or bylaws or any agreement, instrument or
order binding on such party.

Section 9.6 Complete Agreement

. This Agreement shall constitute the entire agreement between Continental or
any Continental Affiliate and Holdings or Holdings Group Taxpayer with respect
to the subject matter hereof and shall supersede all previous negotiations,
commitments and writings with respect to such subject matter. Unless the context
indicates otherwise, any reference to Holdings in this Agreement shall refer to
Holdings and each Holdings Group Taxpayer and any reference to Continental in
this Agreement shall refer to Continental and the Continental Affiliates.
Notwithstanding anything to the contrary herein, nothing in this Agreement shall
modify the rights and obligations of the parties as set forth in the Initial
Public Offering Agreement.

Section 9.7 Original Tax Agreement Terminated.

The Original Tax Agreement is hereby terminated and no party thereto shall be
entitled to pursue any rights or remedies thereunder after the effective date of
this Agreement.

Section 9.8 Rights of Holdings and ExpressJet Airlines

Whenever this Agreement provides for an obligation of Continental to make a
payment to Holdings, the obligation shall be construed as an obligation of
Continental to make a payment to either Holdings or ExpressJet Airlines, and
either Holdings or ExpressJet Airlines shall be entitled to enforce such
obligation.

Section 9.9 Interpretation

. The Section headings contained in this Agreement are solely for the purpose of
reference, are not part of the agreement of the parties and shall not in any way
affect the meaning or interpretation of this Agreement. Whenever any words are
used herein in the masculine gender, they shall be construed as though they were
also used in the feminine gender in all cases where they would so apply. The
parties have participated jointly in the negotiation and drafting of this
Agreement. In the event an ambiguity or question of intent or interpretation
arises, this Agreement shall be construed as if drafted jointly by the parties
and no presumption or burden of proof shall arise favoring or disfavoring any
party by virtue of the authorship of any of the provisions of this Agreement.

Section 9.10 Governing Law

. This Agreement shall be governed by and construed and enforced in accordance
with the laws of the State of Texas (regardless of the laws that might otherwise
govern under applicable principles of conflicts law) as to all matters,
including, without limitation, matters of validity, construction, effect,
performance and remedies.

Section 9.11 Counterparts

. This Agreement may be executed in two or more counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and
the same instrument.

Section 9.12 Legal Enforceability

. Any provision of this Agreement which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof. Any such prohibition or unenforceability in any jurisdiction
shall not invalidate or render unenforceable such provision in any other
jurisdiction.

Section 9.13 No Third Party Beneficiaries

. This Agreement is solely for the benefit of Continental, the Continental
Affiliates, Holdings and the Holdings Group Taxpayers, and is not intended to
confer upon any other person any rights or remedies hereunder.

Section 9.14 Jurisdiction; Forum

.

(a) By the execution and delivery of this Agreement, Continental and Holdings
submit and agree to cause the Continental Affiliates and Holdings Affiliates,
respectively, to submit to the personal jurisdiction of any state or federal
court in the State of Texas in any suit or proceeding arising out of or relating
to this Agreement.

(b) To the extent that Continental, Holdings, any Continental Affiliate or any
Holdings Affiliate has or hereafter may acquire any immunity from jurisdiction
of any Delaware court or from any legal process (whether through service or
notice, attachment prior to judgment, attachment in aid of execution, execution
or otherwise) with respect to itself or its property, Continental or Holdings,
as the case may be, hereby irrevocably waives, and agrees to cause the
Continental Affiliates and the Holdings Affiliate, respectively, to waive such
immunity in respect of its obligations with respect to this Agreement.

(c) The parties hereto agree that an appropriate and convenient, non-exclusive
forum for any disputes between any of the parties hereto or the Continental
Affiliates and the Holdings Group Taxpayers arising out of this Agreement shall
be in any state or federal court in the State of Delaware.

Section 9.15 Right of Offset.

If any party hereto shall be in default hereunder, then the non-defaulting party
shall be entitled to set off any amount owed by the defaulting party to the
non-defaulting hereunder against any amounts owed by the non-defaulting party to
the defaulting party under (i) the Amended and Restated Capacity Purchase
Agreement, dated as of April 17, 2002, among Continental, Holdings, XJT Holdings
and ExpressJet Airlines and (ii) the Promissory Note, dated as of March 31,
2001, made by Continental Express, Inc. in favor of Continental (the "Note"). It
is specifically agreed that (i) for purposes of the set-off by any
non-defaulting party, mutuality shall be deemed to exist among Continental,
Holdings, XJT Holdings and ExpressJet Airlines; (ii) reciprocity among
Continental, Holdings, XJT Holdings and ExpressJet Airlines exists with respect
to their relative rights and obligations in respect of any such set-off; and
(iii) the right of set-off is given as additional security to induce the parties
to enter into the transactions contemplated hereby. Upon completion of any such
set-off, the obligation of the defaulting party to the non-defaulting party
shall be extinguished to the extent of the amount so set-off. Each party hereto
further waives any right to assert as a defense to any attempted set-off the
requirements of liquidation or mutuality. This set-off provision shall be
without prejudice, and in addition, to any right of set-off, combination of
accounts, lien or other right to which any non-defaulting party is at any time
otherwise entitled (either by operation of law, contract or otherwise).

Section 9.16 Confidentiality

. Each party shall hold and cause its Representatives to hold in strict
confidence, unless compelled to disclose by judicial or administrative process
or, in the opinion of its counsel, by other requirements of law, all information
(other than any such information relating solely to the business or affairs of
such party) concerning the other parties hereto furnished it by such other party
or its Representatives pursuant to this Agreement (except to the extent that
such information can be shown to have been (a) previously known by the party to
which it was furnished, (b) in the public domain through no fault of such party,
or (c) later lawfully acquired from other sources by the party to which it was
furnished), and each party shall not release or disclose such information to any
other person, except its Representatives who shall be advised of the provisions
of this Section. Each party shall be deemed to have satisfied its obligation to
hold confidential information concerning or supplied by the other party if it
exercises the same care as it takes to preserve confidentiality for its own
similar information.

Section 9.17 Amendment and Modification

. This Agreement may be amended, modified or supplemented only by written
agreement of the parties.

IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be
executed by a duly authorized officer as of the date first above written.

Continental Airlines, Inc.,

on behalf of itself and each

of the Continental Affiliates

By:

Name: Jeffery A. Smisek

Title: Executive Vice President - Corporate

ExpressJet Holdings, Inc.

on behalf of itself and each of

the Holdings Affiliates

By:

Name: James B. Ream

Title: President and Chief Executive Officer

ExpressJet Airlines, Inc.

By:

Name: James B. Ream

Title: President and Chief Executive Officer