Exhibit 10.1c Third Amendment to the Second Amended and Restated Capacity Purchase Agreement

Third Amendment to the Second Amended and Restated
Capacity Purchase Agreement

This third amendment (this “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, as previously amended by the parties (the “Agreement”) is entered into this 22^nd day of December, 2009 by and between Continental and Contractor.  Except as otherwise specified herein, capitalized terms shall have the meanings ascribed in the Agreement.

WHEREAS, Contractor desires to sublease from Continental eight (8) Embraer 145 aircraft, that are currently Covered Aircraft, as Uncovered Aircraft in order to assist with Contractor’s fleet needs for the provision of services to United Air Lines under a capacity purchase agreement and in Contractor’s charter operations; and

WHEREAS, Continental is willing to sublease such aircraft as Uncovered Aircraft, in accordance with the terms set forth herein; and

WHEREAS, the parties desire to amend certain provisions of the Agreement related to or impacted by the conversion of such aircraft from Covered Aircraft to Uncovered Aircraft;

NOW THEREFORE, in consideration of the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree to amend the Agreement as follows:

            Section 1.  Section 2.04(b) is deleted in its entirety and replaced with the following:

            “(b)      Revenue-Risk Aircraft.  Contractor previously operated 13 Original Aircraft pursuant to the terms and conditions of the Delta Pro-Rate Agreement (“Delta Pro-Rate Aircraft”), 46 Original Aircraft under its own brand through scheduled service under the “ExpressJet Airlines” brand and also through charter operations (“Branded Aircraft”), and will operate 8 Original Aircraft either pursuant to the terms and conditions of the United CPA or as Branded Aircraft (“Additional Uncovered Aircraft”), such Delta Pro-Rate Aircraft, Branded Aircraft, and Additional Uncovered Aircraft (and, in the case of Additional Uncovered Aircraft, the associated engines) being identified in Section C of Schedule 1 hereto (collectively, the “Revenue Risk Aircraft”).

                        (i)         Contractor returned 29 of the Revenue-Risk Aircraft to Continental on or prior to December 1, 2008. 

                        (ii)        The parties acknowledge that the 30 Revenue-Risk Aircraft identified as “Retained" in the tables in Section C of Schedule 1 hereto captioned “Delta Prorate Aircraft” and “Branded Aircraft” (the “Retained Aircraft”) shall be retained by Contractor as Uncovered Aircraft until the seventh anniversary of the Effective Date, on which date, subject to the provisions of Section 8.05, Contractor shall deliver possession of such Retained Aircraft to Continental (or its designee) in accordance with the provisions of Section 2.08.  Contemporaneously with the execution of this Agreement, the Basic Rent payable under each Uncovered Aircraft Sublease related to a Retained Aircraft shall be reduced by 50 percent for such seven year period.

Terms Relating to Additional Uncovered Aircraft

Basic Rent

            Notwithstanding the terms of the relevant Uncovered Aircraft Sublease and Schedule 2 hereto, the Basic Rent payable under each Uncovered Aircraft Sublease for Additional Uncovered Aircraft will be the following. The Basic Rent will be $ [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT] per Additional Uncovered Aircraft per month, through the period ending at the end of the month in which the total number of aircraft months for the Uncovered Aircraft Subleases (measured in the aggregate for all Additional Uncovered Aircraft) equals two hundred forty (240) (the “Baseline Date”).  (For purposes of calculating the Baseline Date, if any partial month in which an Uncovered Aircraft Sublease commences on or before the 15^th of the month, then such month shall count as a full aircraft month, and, if any partial month in which an Uncovered Aircraft Sublease commences after the 15^th of the month, then such month shall not count as any portion of an aircraft month.)  During the month in which the Baseline Date is reached, the Basic Rent will be $ [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT] per Additional Uncovered Aircraft per month for each aircraft month in excess of two hundred forty (240) accrued during such month.  For eighteen months after the Baseline Date, the Basic Rent will be $ [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT] per Additional Uncovered Aircraft per month.  For the nineteenth month after the Baseline Date and for so long thereafter as such Uncovered Aircraft Sublease is in effect, the Basic Rent will be $ [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT] per Additional Uncovered Aircraft per month.  Contractor shall provide reasonable documentation and access to Contractor’s maintenance records so that Continental may substantiate all charges, maintenance events, operational statistics and expenses reimbursable hereunder.  The Basic Rent for partial months will be pro-rated based on the number of calendar days in such month.  Notwithstanding the payment terms for Basic Rent set forth in the applicable Uncovered Aircraft Sublease, payment of Basic Rent

for the Additional Uncovered Aircraft for each month will be made on the first Business Day of such month, or the first Business Day of the term of each applicable Uncovered Aircraft Sublease, if such Uncovered Aircraft Sublease term commences after the first Business Day of any month.

Landing Gear Charge

            In addition to the Basic Rent and engine LLP charges set forth below, Contractor shall also pay to Continental a charge of $ [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT] for every aircraft cycle flown after the sublease term commencement by the Additional Uncovered Aircraft for so long as each Additional Uncovered Aircraft remains an Additional Uncovered Aircraft as compensation for the consumption of landing gear useful life between overhauls, including the consumption of the useful life of landing gear LLP. These charges are non-refundable and are not in any way predicated or contingent upon the performance of any landing gear maintenance, overhaul or parts replacement.   Such payment shall be made on the 15th day of the month following the month of operation (or if such day is not a Business Day, the next Business Day).  If Contractor incurs out-of-pocket expenses for the scheduled overhaul of landing gear, including landing gear LLP replacement expenses (excluding removal and installation expenses and otherwise consistent with Section B4(a)(viii) of Schedule 3) for landing gear removed from such Uncovered Aircraft, then Continental shall reimburse Contractor for such expenses, within 30 days of Contractor’s presentation to Continental of an invoice along with evidence that Contractor has paid all applicable third parties for such material and services.  Contractor shall, in a manner consistent with industry best practices, prolong the life of landing gear assemblies as long as possible before removing for scheduled maintenance.  

Engine LLP Charge

            In addition to the Basic Rent and landing gear charges set forth above, Contractor shall also pay to Continental a charge of $ [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT] for every aircraft cycle flown after the Uncovered Aircraft Sublease term commencement by the Additional Uncovered Aircraft for so long as each Additional Uncovered Aircraft remains an Additional Uncovered Aircraft as compensation for the consumption of the useful life of engine LLP.  It being acknowledged that, as of December 22, 2009, Contractor is providing  [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT] spare engines either owned or leased outside of any Covered Aircraft Sublease or Uncovered Aircraft Sublease (“Spare Engines”), Contractor and Continental agree to reduce the above rate of $ [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT] to $ [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION

PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT] for the term and any extension thereof of the Additional Uncovered Aircraft subleases for so long as Contractor continues to provide at least  [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT] Spare Engines.  To the extent that the number of Spare Engines become less than  [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT] (whether or not periodically unserviceable in the ordinary course of business), the rate of $ [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT] will be increased by $ [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT] for each such Spare Engine up to a maximum rate of $ [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT]. These charges are non-refundable and are not in any way predicated or contingent upon the replacement of any engine LLP.  Such payment shall be made on the 15th day of the month following the month of operation (or if such day is not a Business Day, the next Business Day).   

Engine LLP Program

            If the Engine Maintenance Agreement is amended to provide coverage for LLP replacement in exchange for a charge per cycle (or a similar arrangement) (an “LLP Program”) and the engines associated with the Additional Uncovered Aircraft pursuant to the applicable Uncovered Aircraft Sublease are included within the scope of such LLP Program, then, upon the commencement of such LLP Program and thereafter, for so long as such engines remain within the scope of an LLP Program, Contractor shall be relieved of its obligation to pay the engine LLP charge described above, conditioned upon Contractor making payment to the maintenance provider of the LLP Program services, for all charges payable under such LLP Program relating to the cycles (or other operable parameter that may be the basis for payment under such LLP Program).  Without limiting Contractor’s right to decide whether or not the engines associated with the Additional Uncovered Aircraft are included within the scope of an LLP Program, Contractor shall keep the engines associated with the Additional Uncovered Aircraft within the scope of the Engine Maintenance Agreement (excluding any provisions related to such LLP Program), unless otherwise agreed by Continental.

Engine LLP Replacement Expenses

            If Contractor incurs out-of-pocket engine LLP replacement expenses for the cycle limit driven replacement of LLP for engines associated under the applicable Uncovered Aircraft Sublease with the Additional Uncovered Aircraft, (consistent with Section B4(a)(ix) of Schedule 3), then Continental shall reimburse Contractor for such expenses, within 30 days of Contractor’s presentation to Continental of an invoice along with evidence that Contractor has paid all applicable third parties for such material and services.  Contractor shall, in a manner consistent with industry best practices, prolong the life of engine LLP as long as possible before replacement.

Uncovered Aircraft Sublease Term Commencement

            The term of each Uncovered Aircraft Sublease for the Additional Uncovered Aircraft will commence on the later of the (i) date that such aircraft is released from its status as a Covered Aircraft and no longer providing Regional Airline Services, or (ii) date set forth in the following schedule:  (a) December 29, 2009 for the first two Additional Uncovered Aircraft, (b) January 5, 2010 for the third, fourth, fifth and sixth Additional Uncovered Aircraft and (c) April 6, 2010 for the seventh and eighth Additional Uncovered Aircraft.  Upon transition of such aircraft from Covered Aircraft to Additional Uncovered Aircraft, such aircraft shall be fully fueled at Continental’s expense and Contractor shall deliver to Continental a delivery receipt, including a description of operational and maintenance history, in a form reasonably acceptable to Continental.

Uncovered Aircraft Sublease Term Duration

            The average term of all of the Uncovered Aircraft Subleases for the Additional Uncovered Aircraft will be thirty (30) months from May 1, 2010, provided that the minimum term for any such Uncovered Aircraft Sublease is twenty-four (24) months from May 1, 2010, and provided further that if the thirty (30) month average term described above for such Uncovered Aircraft Subleases is less than the average term of all the aircraft operated by Contractor pursuant to the United CPA, then, upon Continental’s election, the term of one or more of such Uncovered Aircraft Subleases for the Additional Uncovered CPA Aircraft will be extended such that the average term (measured from May 1, 2010) of all the Uncovered Aircraft Subleases for Additional Uncovered Aircraft equals the average initial term for all of the aircraft operated by Contractor pursuant to the United CPA.  If United elects to extend the term of the United CPA, then Contractor shall immediately notify Continental of such election in writing.

            Each time that United extends the term of the United CPA Continental may extend the term of one or more of the Uncovered Aircraft Subleases for Additional Uncovered Aircraft for the term of such extension (but not beyond April 30, 2015), but not more than the number of Uncovered Aircraft Subleases that would cause the total number of Uncovered Aircraft Sublease terms extended (including any extension options exercised by Contractor as provided below) to exceed one Additional Uncovered Aircraft Sublease for every two aircraft covered by such extension of the United CPA.  Within twenty (20) days of notice by Contractor to Continental that United has elected to extend the United CPA, Continental shall provide notice to Contractor identifying the particular Uncovered Aircraft Subleases that Continental elects to extend, if any, as described above.

            Each time that United extends the term of the United CPA, provided that Continental is given notice of such election no less than six (6) months prior to the effective date of such extension, Contractor may extend the term of one or more the Uncovered Aircraft Subleases for Additional Uncovered Aircraft for the term of such extension (but not beyond April 30, 2015), but not more than the number of Uncovered Aircraft Subleases that would cause the total number of Uncovered Aircraft Sublease terms extended (including any extension options exercised by Continental as provided above) to exceed one Additional Uncovered Aircraft Sublease for every two aircraft covered by such extension of the United CPA.  Within twenty (20) days of notice by Contractor to Continental that United has elected to extend the United CPA, Contractor shall provide notice to Continental of the number of Uncovered Aircraft Subleases that Contractor wishes to extend.  Continental shall select the particular Additional Uncovered Aircraft for which the Uncovered Aircraft Sublease(s) will be extended.

Return of Additional Uncovered Aircraft

            Upon expiration of each such Uncovered Aircraft Sublease for the Additional Uncovered Aircraft, Contractor shall comply with the provisions of Section 2.08 and 10.01 related to return of Uncovered Aircraft and return such aircraft fully fueled. Contractor may not operate any Uncovered Aircraft in commercial service, whether scheduled or otherwise, if such aircraft are in any livery that incorporates Continental Marks.  

Contractor Representations Regarding the United CPA

            Contractor warrants and represents that (a) of the twenty-two (22) aircraft to be operated  by Contractor pursuant to the United CPA (i) the term of 11 of such aircraft is not less than twenty-four (24) months, and (ii) the term of the other eleven (11) aircraft is not less than thirty-six (36) months (b) Contractor will immediately notify Continental of any notice provided by United related to any extension of the term of the United CPA, (c) Contractor will promptly provide notice of any change to the notice provisions of the United CPA relating to the term thereof, and (d) Contractor will provide a true and correct representation with respect to the term of the United CPA and any extension options.

            Section 2.         Section 2.08 is amended by changing the reference to “Section 2.04” in the 32^nd line of the section, so that it reads in relevant part:

            “…except those Uncovered Aircraft being returned to Continental under Section 2.04(a) or 2.04(b)(i)….”

            Section 3.         Section 3.03 is amended by adding the following to the end of the section:

            “Notwithstanding any provision of this Agreement to the contrary, Continental will not be responsible for reimbursement of additional Contractor expenses, to the extent that such additional expenses increase due to the impact of the operations of the Additional Uncovered Aircraft.”

            Section 4.         Section 10.01 is deleted in its entirety and replaced with the following:

            “Section 10.01             Conversion of Covered Aircraft Livery.  Without limiting Contractor’s obligations in respect of any return conditions under any Covered Aircraft Sublease or Uncovered Aircraft Sublease, for each Delta CPA or Revenue Risk Aircraft, at such time as such aircraft is returned to Continental, if such aircraft is not already prepared in the livery required by Paragraph 8 of Exhibit G and not already configured in the same manner such aircraft was configured at the time of its withdrawal from the capacity purchase provisions of the Existing CPA prior to becoming a Delta CPA or Revenue Risk Aircraft, as applicable (including the removal of all items installed in connection with XM radio, in-seat power or any other such additions to the aircraft), then Contractor shall cause each such aircraft to be prepared in such livery and be configured (including, without limitation, the seating and interior configuration) in the same manner such aircraft was configured at the time of its withdrawal from the capacity purchase provisions of the Existing CPA prior to becoming a Delta CPA or Revenue Risk Aircraft, as applicable (including the removal of all items installed in connection with XM radio, in-seat power or any other such additions to the aircraft), prior to its being placed into such service, and provide all documentation required by applicable FARs relating to such reconfiguration.  Contractor shall be responsible for all costs related to such preparation and reconfiguration.”

            Section 5.         The following definition of “Additional Uncovered Aircraft” is added to Exhibit A:

            “Additional Uncovered Aircraft – is defined in Section 2.04(b).”      

            Section 6.         The following definition of “Baseline Date” is added to Exhibit A:

            “Baseline Date – is defined in Section 2.04(b)(ii).”

            Section 7.         The definition of “Basic Rent” is deleted in its entirety from Exhibit A and replaced with the following:

            “Basic Rent – is defined, with respect to any Covered Aircraft, in the Covered Aircraft Sublease for such Covered Aircraft and, with respect to any Uncovered Aircraft, other than the Additional Uncovered Aircraft, in the Uncovered Aircraft Sublease for such Uncovered Aircraft as modified by Section 2.04(b)(ii) and Schedule 2 hereto, and, in the case of each Additional Uncovered Aircraft, for so long as such Additional Uncovered Aircraft remains an Additional Uncovered Aircraft pursuant to the terms of this Agreement, in Section 2.04(b)(ii).”

            Section 8.         The following definition of “LLP Program” is added to Exhibit A:

            “LLP Program” – is defined in Section 2.04(b)(ii).

            Section 9.         The following definition of “United” is added to Exhibit A:

            “United – means United Air Lines, Inc., a Delaware corporation, and its successors and assigns.”

            Section 10.       The following definition of “United CPA” is added to Exhibit A:

            “United CPA – means the capacity purchase agreement to be entered into by and among Contactor and United, the general terms of which are described in Contractor’s third quarter of 2009 10Q as filed with the Securities and Exchange Commission on November 16, 2009, and as same may be extended pursuant to the terms thereof.”

            Section 11.       Schedule 1 is deleted in its entirety and replaced with the attached restated Schedule 1.

            Section 11.       Appendix 1 to Schedule 3 is amended by deleting the definition of “Baseline Monthly Block Hours” in its entirety and replacing it with the following:

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

            For December, 2009:               ****
            For January, 2010:                   ****
            For February, 2010:                 ****
            For March, 2010:                     ****

Following March, 2010,
            For each April                          ****
            For each May:                          ****
            For each June:                          ****
            For each July:                           ****
            For each August:                      ****
            For each September:                ****
            For each October:                    ****
            For each November:                 ****
            For each December:                 ****
            For each January:                     ****
            For each February:                   ****
            For each March:                       ****”

**** [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT]

Except as expressly amended in this Amendment, the Agreement remains in full force and effect.

IN WITNESS WHEREOF, Continental, Holdings, XJT and ExpressJet have caused this Amendment to be executed in duplicate (each of which duplicates are deemed to be an original) by their duly authorized representatives as of the date first set forth above.

SCHEDULE 1
Section A

                *withdrawn Covered Aircraft pursuant to Section 2.05 and Continental’s notification to ExpressJet on September 5th, 2008

                **withdrawn Covered Aircraft pursuant to Section 2.05 and Continental’s notification to ExpressJet on September 9th, 2008

                        ¹ Will transition to Additional Uncovered Aircraft in accordance with Section 2.04 (b) (ii)

Section B

Delta CPA Aircraft

Section C
Revenue Risk Aircraft
Delta-Prorate Aircraft

                        ¹ Will transition to Additional Uncovered Aircraft in accordance with Section 2.04 (b) (ii)