f123108form10kexh1028b.htm


    
      

    


    Exhibit
10.28(b)

    


    


    December
23, 2008

    


    Mr. Mark
Erwin

    Senior
Vice President Corporate Development & Alliances

    Continental
Airlines, Inc.

    1600
Smith Street

    Houston,
Texas 77002

    


    Second  Amendment
(this “Second  Amendment”) to that certain Second Amended and Restated
Capacity Purchase Agreement among Continental Airlines, Inc. (“Continental”),
ExpressJet Holdings, Inc. (“Holdings”), XJT Holdings, Inc. (“XJT”) and
ExpressJet Airlines, Inc. (“ExpressJet” and, collectively with Holdings and XJT,
“Contractor”) dated as of June 5, 2008 (the “Original Second Amended and
Restated CPA”), as amended by that certain First Amendment to the Second Amended
and Restated CPA dated August 29, 2008 (the “Second Amended and Restated
CPA”)

    


    As you
are aware, Continental and Contractor are parties to the Second Amended and
Restated CPA. Continental and Contractor each desires to amend the Second
Amended and Restated CPA as specifically provided below in this Second
Amendment, with such amendments to be effective as of August 29,
2008:

    


    Section
1.                      The
revised Appendix 1 to Schedule 3 attached to this Second Amendment hereby
replaces in its entirety the Appendix 1 to Schedule 3 attached to the Second
Amended and Restated CPA.  Continental and Contractor agree that
nothing in this Section 3 or in Appendix 1 to Schedule 3 attached hereto shall
in any way (i) amend or modify the provisions of Section 2.01(b) of the Second
Amended and Restated CPA, or (ii) create or disclaim (or be deemed, construed or
implied to create or disclaim) any obligation other than as is expressly and
specifically provided for in this Section 3 (and in Appendix 1 to Schedule 3
attached hereto).

    


    Section
2.                      Contractor
agrees that following sentence shall be added to the end of Section 2.b. of
Appendix 4 to Schedule 3 attached to the Second Amended and Restated
CPA:

    


    “Any
expenses borne by Contractor to develop Contractor’s Fuel Efficiency program for
which Contractor intends to seek reimbursement from Continental as herein
provided must be pre-approved by Continental and any such expenses reimbursed by
Continental to Contractor shall be deducted from any dollar amount of fuel
savings (as determined by performing the calculations described in clauses (a)
through (d) above) prior to  determining the amount of any fuel bonus
payments payable to Contractor hereunder (it being acknowledged that any such
expenses not applied to savings shall be carried forward to future years as
necessary until the balance of such expenses is zero); provided, however, that
in no event shall the reimbursement of such expenses be conditioned upon, or
delayed pending, the achievement of any savings or other objectives under
Contractor’s Fuel Efficiency program.”

    


    Section
3.                      
Contractor and Continental agree that, notwithstanding anything to the contrary
in Section 2 of the First Amendment to the Second Amended and Restated CPA, for
purposes of calculating the amount that Continental is required to pay to
Contractor pursuant to the Second Amended and Restated CPA in respect of any
depreciation expenses associated with either Covered Aircraft or Excess
Inventory, the scheduled depreciation period for such depreciation expenses
chargeable to Continental pursuant to Subsection B.4.a.xi of Schedule 3 to the
Second Amended and Restated CPA shall not be shortened from that period
currently used by Contractor (as indicated by the invoices related thereto that
have been presented to Continental and paid by Continental), notwithstanding any
change in accounting treatment that Contractor may implement relating to the
period over which any such depreciation will be taken for accounting purposes.
The foregoing shall also apply to any future depreciation expense associated
with Covered Aircraft or Excess Inventory that may become chargeable to
Continental pursuant to Subsection B.4.a.xi of Schedule 3 to the Second Amended
and Restated CPA, it being agreed that Contractor shall, for purposes of
calculating the amount that Continental is required to pay to Contractor
pursuant to the Second Amended and Restated CPA, utilize either the scheduled
depreciation period that Contractor would have utilized prior to its entry into
of the Second Amended and Restated CPA (and consistent with the invoices for
depreciation expenses related to Covered Aircraft and Excess Inventory presented
to Continental and paid by Continental under the Existing CPA) or any longer
period that Contractor may utilize in respect of such expenditures in accordance
with generally accepted accounting principles. Further to the foregoing,
Contractor and Continental agree that with respect to any capital expenditures
specifically approved by Continental in writing related to Covered Aircraft or
Excess Inventory, in determining the amount of any payment required to be made
by Continental to Contractor pursuant to Section 8.03(g) of
the Second Amended and Restated CPA, the “net book value” of such assets
referenced therein shall be deemed to mean and refer to the net book value of
such assets that would have been shown on Contractor’s most recent financial
statements if Contractor had accounted for such assets in the same manner as
Contractor had charged Continental for the related depreciation expense. For the
avoidance of doubt, it is acknowledged that if Contractor retains a Covered
Aircraft in accordance with Contractor’s rights to do so pursuant to the Second
Amended and Restated CPA, at the time as such Covered Aircraft ceases to be a
Covered Aircraft, Continental would no longer be required to pay any
depreciation expenses associated with such Covered Aircraft.

    


    Section
4.                      Capitalized
terms not defined herein shall be defined as provided in the Second Amended and
Restated CPA.  From and after the date of this Second Amendment,
references in the Second Amended and Restated CPA to “this Agreement” shall mean
and refer to the Second Amended and Restated CPA as amended by this Second
Amendment.  Except as specifically amended or modified hereby, the
Second Amended and Restated CPA shall remain in effect as
written.  The Second Amended and Restated CPA, as amended or modified
by this Second Amendment, is hereby ratified and confirmed in all respects, and
shall be deemed to constitute the entire understanding of the parties relating
to its subject matter (and further that any prior or contemporaneous oral
commitments shall have no force or effect), and such agreement, as so amended
hereby, may not be further amended, modified or changed except by further
agreement in writing signed by the parties hereto.  This Second
Amendment may be executed by the parties hereto in any number of separate
counterparts, all of which shall constitute one agreement.  All
signatures need not be on one counterpart.

    


    If
Continental is in agreement with the above, please indicate its agreement by
having an authorized representative sign below in the spaces provided and return
a signed copy of this Second Amendment to the undersigned at the address
above.

    


    Very
truly yours,

    EXPRESSJET
HOLDINGS, INC.

    


    By:           /s/
James B. Ream

    Name:                      James
B. Ream

    Title:                      President
and Chief Executive Officer

    


    XJT
HOLDINGS, INC.

    


    By:           /s/
James B. Ream

    Name:                      James
B. Ream

    Title:                      President
and Chief Executive Officer

    


    EXPRESSJET
AIRLINES, INC.

    


    By:           /s/
James B. Ream

    Name:                      James
B. Ream

    Title:                      President
and Chief Executive Officer

    


    Agreed:

    


    CONTINENTAL
AIRLINES, INC.

    


    By:           /s/
Mark Erwin

    Name:                      Mark
Erwin

    Title:                      Senior
Vice President Corporate Development & Alliances

    


    cc:           Continental
Airlines, Inc.

    1600 Smith Street, HQSLG, Houston,
Texas 77002

    Attention: General Counsel

    Telecopy
No.: (713)  324-5161

    


    ExpressJet Holdings, Inc.

    700 North Sam Houston Parkway West,
Suite 200, Houston, Texas 77067

    Attention:  Vice President
& General Counsel

    Telecopy
No.: (832) 353-1141


    
      
         


      

      
         


        
          

        

      

      
         


        
                                                                                                                                                    Execution
Version 

           

        

      

    


    Appendix 1 to Schedule
3

    


    


    $ [CONFIDENTIAL MATERIAL OMITTED AND
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT]*for each actual block hour (which
shall be the “block hour” rate referred to in Schedule 3.A.1.a of this
Agreement).

    


    * This
Base Compensation Rate shall be adjusted to the extent provided pursuant to the
terms of Section
3.02 of this Agreement.

    


    In addition, for each calendar month
beginning with the month of September 2008 and extending through (and including)
June 2009 (such period from September 1, 2008 through June 30, 2009, being
herein referred to as the “Review Period”), Continental and Contractor, as part
of the monthly flight reconciliation process pursuant to Section 3.06(b) of this
Agreement, shall compare the number of Actual Monthly Block Hours for such
calendar month with the number of Baseline Monthly Block Hours for such calendar
month, and Continental shall pay Contractor $[CONFIDENTIAL MATERIAL OMITTED AND
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT] for each Extra Monthly Payment Hour,
if any, for such month, provided that, in no event shall Continental be required
(a) to pay an amount greater than $[CONFIDENTIAL MATERIAL OMITTED AND
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT] for any one month or $[CONFIDENTIAL MATERIAL OMITTED AND
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT] in the aggregate in respect of Extra
Monthly Payment Hours during the Review Period or (b) to make any payment under
this paragraph in respect of any calendar month after the Review
Period.  After the Review Period, Contractor shall pay Continental an
amount equal to $[CONFIDENTIAL
MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT] for each
Aggregate Accrued Block Hour, if any, existing as of June 30, 2009, subject to
the proviso at the end of the next paragraph (such payment to be made in July
2009 as part of the monthly flight reconciliation process pursuant to Section
3.06(b) of this Agreement).

    


    During each calendar month beginning
with the month of July 2009 and extending through (and including) the end of the
Base Term or, if earlier, the date on which Contractor has provided a discount
to Continental in an aggregate amount equal to $[CONFIDENTIAL MATERIAL OMITTED AND
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT] (such period being herein referred to
as the “Discount Period”), Continental and Contractor, as part of the monthly
flight reconciliation process pursuant to Section 3.06(b) of this Agreement,
shall compare the number of Actual Monthly Block Hours for such calendar month
with the number of Baseline Monthly Block Hours for such calendar month, and
Contractor shall provide to Continental and Continental shall receive (and
Continental shall be entitled to apply and take) a discount on any amounts owed
to Contractor under the CPA equal to $[CONFIDENTIAL MATERIAL OMITTED AND
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT] per Discount Payment Hour, if any,
for such month, provided that, if for any reason any such discount cannot be
applied and taken such month, the unapplied portion thereof shall be applied and
taken in succeeding months until such discount has been fully applied and taken,
and provided further, that, in no event shall all such monthly payments in the
aggregate made by Contractor pursuant to this paragraph exceed $[CONFIDENTIAL MATERIAL OMITTED AND
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT].

    


    Solely for the purposes of calculating
amounts payable under the two preceding paragraphs of this Appendix 1 to
Schedule 3, the following terms shall have the definitions set forth
below:

    


    “Accrued Block Hours” means,
for each calendar month in the Review Period for which Actual Monthly Block
Hours exceeds Baseline Monthly Block Hours, the number of hours by which Actual
Monthly Block Hours for such month exceeds Baseline Monthly Block Hours for such
month.

    


    “Actual Monthly Block Hours”
means, for each calendar month, (a) the total actual block hours flown by
Contractor pursuant to this Agreement during such calendar month, plus (b) the
total block hours that are scheduled by Continental to be flown pursuant to a
Final Monthly Schedule in accordance with this Agreement but which are not
actually flown because the flight is not operated during such calendar month by
Contractor as a result of a Controllable Cancellation.

    


    “Aggregate Accrued Block
Hours” means the aggregate of all Accrued Block Hours from prior months
in the Review Period, less the number of Accrued Block Hours previously applied
to reduce the number of Extra Monthly Payment Hours pursuant to the last clause
in the definition thereof.

    


    


    “Baseline Monthly Block
Hours” means the
following number of block hours for each calendar month set forth
below:

    


    For
September
2008:                                              [XXX];

    For
October
2008:                                              [XXX];

    For
November
2008:                                              [XXX];

    For
December
2008:                                              [XXX];

    For
January
2009:                                              [XXX];

    For
February
2009:                                              [XXX];

    For March
2009:                                              [XXX];

    For April
2009:                                              [XXX];

    For May
2009:                                              [XXX]; and

    For June
2009:                                              [XXX].

    


    Following
June 2009,

    For each
July:                                              [XXX];

    For each
August:                                              [XXX];

    For each
September:                                              [XXX];

    For each
October:                                              [XXX];

    For each
November:                                              [XXX];

    For each
December:                                              [XXX];

    For each
January:                                              [XXX];

    For each
February:                                              [XXX];

    For each
March:                                   [XXX];

    For each
April:                                              [XXX];

    For each
May:                                              [XXX]; and

    For each
June:                                              [XXX].

    


    “Discount Payment Hours”
means, for each calendar month in the Discount Period for which Actual Monthly
Block Hours exceeds Baseline Monthly Block Hours, the number of hours by which
Actual Monthly Block Hours for such month exceeds the Baseline Monthly Block
Hours for such month.

    


    “Extra Monthly Payment Hours”
means, at the end of each calendar month in the Review Period in which Baseline
Monthly Block Hours exceeds Actual Monthly Block Hours, the number of hours by
which Baseline Monthly Block Hours exceeds Actual Monthly Block Hours, reduced
by the number of Aggregate Accrued Block Hours, if any, existing at the
beginning of such calendar month.

    


    


    The
foregoing definitions shall be equally applicable to both the singular and
plural forms of the defined terms.

    


    


    [“XXX”
REPRESENTS CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT.]