EXHIBIT 10.4
INITIAL PUBLIC OFFERING AGREEMENT
BY AND BETWEEN
CONTINENTAL AIRLINES, INC.
AND
EXPRESSJET HOLDINGS, INC.
Dated as of __________ __, 2002
TABLE OF CONTENTS
1. Definitions.........................................................................................1
2. The Initial Public Offering.........................................................................5
3. Expenses............................................................................................5
3.1 General.......................................................................................5
3.2 Certain Expenses Relating to the Initial Public Offering......................................5
4. Certain Other Covenants.............................................................................5
4.1 Financial and Other Information...............................................................5
4.2 Other Covenants...............................................................................11
4.3 Covenant Regarding Continental Preferred Stock................................................12
4.4 Covenant and Representation Regarding XJT Holdings and ExpressJet.............................12
4.5 Representation and Covenant Regarding Preferred Stock.........................................12
4.6 Covenant and Representation Regarding Issuance of Subsidiary Stock............................12
4.7 Representation and Covenants regarding ExpressJet Stock and Purchaser Note....................13
4.8 Tax Opinions..................................................................................13
5. Indemnification.....................................................................................13
5.1 Indemnification by Holdings...................................................................13
5.2 Indemnification by Continental................................................................14
5.3 Tax Effects of Indemnification................................................................14
5.4 Effect of Insurance Upon Indemnification......................................................14
5.5 Procedure for Indemnification Involving Third-party Claims....................................15
5.6 Procedure for Indemnification Not Involving Third-Party Claims................................16
5.7 Exclusive Remedies............................................................................16
6. Miscellaneous.......................................................................................17
6.1 Survival......................................................................................17
6.2 Complete Agreement............................................................................17
6.3 Authority.....................................................................................17
6.4 Governing Law.................................................................................17
6.5 Consent to Exclusive Jurisdiction.............................................................17
6.6 Notices.......................................................................................17
6.7 Amendment and Modification....................................................................18
6.8 Binding Effect; Assignment....................................................................18
6.9 Third Party Beneficiaries.....................................................................18
6.10 Counterparts..................................................................................19
6.11 Waiver........................................................................................19
6.12 Severability..................................................................................19
6.13 Remedies......................................................................................19
6.14 Performance...................................................................................19
6.15 References; Construction......................................................................20
Exhibits
Agreements Subject to Section 4.2(b)...............................................................Exhibit A
i
INITIAL PUBLIC OFFERING AGREEMENT
This
INITIAL PUBLIC OFFERING AGREEMENT (this "Agreement") is made and
entered into as of _________ __, 2002, by and between Continental Airlines,
Inc., a Delaware corporation ("Continental"), and ExpressJet Holdings, Inc., a
Delaware corporation and a wholly owned subsidiary of Continental ("Holdings").
Certain capitalized terms used herein are defined in Section 1 of this
Agreement.
WHEREAS, Continental owns all of the issued and outstanding Holdings
common stock;
WHEREAS, Holdings has previously filed the IPO Registration Statement
with the SEC but it has not yet become effective;
WHEREAS, the parties currently contemplate that, reasonably promptly
following the execution of this Agreement, Holdings shall consummate the Initial
Public Offering;
WHEREAS, the parties intend in this Agreement to set forth the
principal arrangements between them regarding the Initial Public Offering;
NOW, THEREFORE, in consideration of the premises and the
representations, warranties, covenants and agreements herein contained, and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, and intending to be legally bound hereby, the parties
hereby agree as follows:
1. Definitions. As used in this Agreement, the following terms shall
have the following definitions:
"Affiliate" means a Holdings Affiliate or a Continental Affiliate, as
the case may be.
"Agreement" has the meaning set forth in the Preamble.
"Annual Financial Statements" has the meaning set forth in Section
4.1(a)(vi).
"Business Day" means each Monday, Tuesday, Wednesday, Thursday and
Friday unless such day shall be a day when financial institutions in New York,
New York or Houston,
Texas are authorized by law to close.
"Claim" has the meaning set forth in Section 5.6.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time, together with the rules and regulations promulgated thereunder.
"Continental" has the meaning set forth in the Preamble.
"Continental Affiliate" means a Person that is Controlled by
Continental, other than Holdings and its subsidiaries.
"Continental Annual Statements" has the meaning set forth in Section
4.1(b)(ii).
"Continental's Auditors" has the meaning set forth in Section
4.1(b)(ii).
"Continental Business" means any business or operations of Continental
or any Continental Affiliates.
"Continental Common Stock" means the Class B common stock, par value
$0.01 per share, of Continental.
"Continental Disclosure Portions" means all material set forth in, or
incorporated by reference into, the IPO Registration Statement, to the extent
relating exclusively to (i) Continental and the Continental Affiliates or (ii)
the Continental Business.
"Continental Public Filings" has the meaning set forth in Section
4.1(a)(xiii).
"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.
"Dispute Notice" means written notice of any dispute between
Continental and Holdings arising out of or relating to this Agreement, which
shall set forth, in reasonable detail, the nature of the dispute.
"Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time, together with the rules and regulations promulgated
thereunder.
"GAAP" means generally accepted accounting principles, consistently
applied.
"Holdings" has the meaning set forth in the Preamble.
"Holdings Affiliate" means a Person that directly or indirectly through
one or more intermediaries is Controlled by Holdings.
"Holdings' Auditors" has the meaning set forth in Section 4.1(b)(i).
"Holdings Business" means any business or operations of Holdings or any
Holdings Affiliates, including, in all cases, any predecessor entities.
"Holdings Capital Stock" means all classes or series of capital stock
of Holdings.
"Holdings Common Stock" means the common stock, par value $0.01 per
share, of Holdings.
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"Holdings Public Documents" has the meaning set forth in Section
4.1(a)(ix).
"Indemnifying Party" means a Person that is obligated to provide
indemnification under this Agreement.
"Indemnitee" means a Person that is entitled to seek indemnification
under this Agreement.
"Indemnity Payment" means an amount that an Indemnifying Party is
required to pay to an Indemnitee under this Agreement.
"Initial Public Offering" means the initial public offering of shares
of Holdings Common Stock as contemplated by the IPO Registration Statement.
"Insurance Proceeds" means the payment received by an insured from an
insurance carrier or paid by an insurance carrier on behalf of the insured, net
of any applicable premium adjustment and tax effect.
"IPO Registration Statement" means the Registration Statement on Form
S-1, Registration No. 333-64808 of Holdings, as supplemented and amended from
time to time.
"IRS" means the Internal Revenue Service of the U.S. Department of
Treasury or any successor agency.
"Losses" means all losses, liabilities, claims, obligations, demands,
judgments, damages, dues, penalties, assessments, fines (civil or criminal),
costs, liens, expenses, forfeitures, settlements, or fees, reasonable attorneys'
fees and court costs, of any nature or kind, whether or not the same would
properly be reflected on a balance sheet, and "Loss" means any of these.
"Notice" means any notice, request, claim, demand, or other
communication under this Agreement.
"Person" means an individual, partnership, limited liability company,
corporation, joint stock company, trust, estate, joint venture, association or
unincorporated organization, any other form of business or professional entity
or any governmental entity or any department, agency or political subdivision
thereof.
"Quarterly Financial Statements" has the meaning set forth in Section
4.1(a)(v).
"Regulation S-K" means Regulation S-K of the General Rules and
Regulations promulgated by the SEC.
"Regulation S-X" means Regulation S-X of the General Rules and
Regulations promulgated by the SEC.
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"Representative" means, with respect to any Person, any of such
Person's directors, officers, employees, agents, consultants, advisors,
accountants or attorneys.
"Request" has the meaning set forth in Section 5.6.
"SEC" means the United States Securities and Exchange Commission or any
successor agency.
"Securities Act" means the Securities Act of 1933, as amended from time
to time, together with the rules and regulations promulgated thereunder.
"Separate Counsel" has the meaning set forth in Section 5.5(b).
"SSB" means Xxxxxxx Xxxxx Xxxxxx Inc.
"Subsidiary" means with respect to any specified Person, any
corporation or other legal entity of which such Person or any of its
Subsidiaries Controls or owns, directly or indirectly, more than 50% of the
voting power with respect to the election of members to the board of directors
or similar governing body; provided, however, that for the purposes of this
Agreement, neither Holdings nor any of the Subsidiaries of Holdings shall be
deemed to be Subsidiaries of Continental or of any of the Subsidiaries of
Continental.
"Tax" means (i) any income, gross receipts, license, payroll,
employment, excise, severance, stamp, occupation, premium, windfall profits,
environmental (including taxes under Section 59A of the Code), customs duties,
capital stock, franchise, profits, withholding, social security (or similar),
unemployment, disability, real property, personal property, sales, use,
transfer, registration, value added, alternative or add-on, minimum, estimated,
or other tax, assessment, or governmental charge of any kind whatsoever imposed
by any governmental authority, including any interest, penalty, or addition
thereto, whether disputed or not; (ii) liability for the payment of any amounts
of the type described in clause (i) above arising as a result of being (or
having been) a member of any group or being (or having been) included or
required to be included in any Tax Return related thereto; and (iii) liability
for the payment of any amounts of the type described in clause (i) above as a
result of any express or implied obligation to indemnify or otherwise assume or
succeed to the liability of any other Person.
"Third-Party Claim" means any claim, suit, arbitration, inquiry,
proceeding or investigation by or before any court, governmental or other
regulatory or administrative agency or commission or any arbitration tribunal
asserted by a Person other than Continental or any Continental Affiliate or
Holdings or any Holdings Affiliate which gives rise to a right of
indemnification hereunder.
"Underwriting Agreement" means the Underwriting Agreement to be entered
into among Holdings, Continental and the underwriters in connection with the
offering of Holdings Common Stock by each of Holdings and Continental in the
Initial Public Offering.
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"Voting Stock" means with respect to any Person, all classes and series
of the capital stock of such Person entitled to vote generally in the election
of directors.
2. The Initial Public Offering. Holdings shall (i) consult with, and
cooperate in all respects with, Continental in connection with the pricing of
the Common Stock to be offered in the Initial Public Offering, (ii) at
Continental's direction, execute and deliver the Underwriting Agreement in such
form and substance as is reasonably satisfactory to Continental and (iii) at
Continental's direction, promptly take any and all actions necessary or
desirable to consummate the Initial Public Offering as contemplated by the IPO
Registration Statement and the Underwriting Agreement.
3. Expenses.
3.1 General. Except as otherwise provided in this Agreement or any
other agreement between the parties relating to the Initial Public Offering, all
costs and expenses of either party hereto in connection with the Initial Public
Offering shall be paid by the party that incurs such costs and expenses.
3.2 Certain Expenses Relating to the Initial Public Offering. Holdings
shall be responsible for the payment of all of Holdings' and Continental's
costs, fees and expenses relating to the Initial Public Offering (excluding any
discounts or commissions paid to SSB in connection with the sale by Continental
of shares of Holdings Common Stock in the Initial Public Offering), including,
but not limited to, the payment of (a) the costs, fees and expenses of all of
Continental's financial, legal, accounting and other advisors incurred in
connection with the Initial Public Offering and (b) any internal fees, costs and
expenses incurred by Continental or any Continental Affiliate in connection with
the Initial Public Offering.
4. Certain Covenants.
4.1 Financial and Other Information.
(a) Financial Information. Holdings agrees that, for so long as
Continental is required to consolidate Holdings' results of operations and
financial position or to account for its investment in Holdings under the equity
method of accounting (determined in accordance with GAAP):
(i) Holdings shall, and shall cause each of its Subsidiaries to,
maintain a system of internal accounting controls that will provide reasonable
assurance that: (A) Holdings' and such Subsidiaries' books, records and accounts
fairly reflect all transactions and dispositions of assets and (B) the specific
objectives of accounting control are achieved.
(ii) Holdings shall, and shall cause each of its Subsidiaries to,
maintain a fiscal year which commences on January 1 and ends on December 31 of
each calendar year.
(iii) Holdings shall deliver to Continental a trial balance
submission, which shall include amounts relating to each of its Subsidiaries, in
such format and detail as Continental
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may request, with respect to each month, within five Business Days following the
last day of each such month.
(iv) As soon as practicable, and in any event within five
Business Days after the end of each quarter in each fiscal year of Holdings,
Holdings shall deliver to Continental a consolidated income statement and
balance sheet for Holdings and its Subsidiaries for such fiscal quarter.
(v) As soon as practicable, and in any event within 10 Business
Days after the end of each of the first three fiscal quarters in each fiscal
year of Holdings and no later than five days before Holdings intends to file its
Quarterly Financial Statements (as defined below) with the SEC, Holdings shall
deliver to Continental drafts of (A) the consolidated financial statements of
Holdings and its Subsidiaries (and notes thereto) for such periods and for the
period from the beginning of the current fiscal year to the end of such quarter,
setting forth in each case in comparative form for each such fiscal quarter of
Holdings the consolidated figures (and notes thereto) for the corresponding
quarter and periods of the previous fiscal year and all in reasonable detail and
prepared in accordance with Article 10 of Regulation S-X, and (B) a discussion
and analysis by management of Holdings' and its Subsidiaries' financial
condition and results of operations for such fiscal period, including, without
limitation, an explanation of any material adverse change, all in reasonable
detail and prepared in accordance with Item 303(b) of Regulation S-K. The
information set forth in (A) and (B) above is herein referred to as the
"Quarterly Financial Statements." No later than the earlier of (x) two Business
Days prior to the date Holdings publicly files the Quarterly Financial
Statements with the SEC or otherwise makes such Quarterly Financial Statements
publicly available or (y) two Business Days prior to the date on which
Continental intends to file its quarterly financial statements with the SEC (as
evidenced by written notice from Continental to Holdings of such intended filing
date at least 10 Business Days prior to such intended filing date), Holdings
shall deliver to Continental the final form of the Quarterly Financial
Statements certified by the chief financial officer of Holdings as presenting
fairly, in all material respects, the financial condition and results of
operations of Holdings and its Subsidiaries; provided that Holdings may continue
to revise such Quarterly Financial Statements prior to the filing thereof in
order to make corrections and non-substantive changes which corrections and
changes shall be delivered by Holdings to Continental as soon as practicable,
and in any event within eight hours after such filing; and, provided, further,
that Continental and Holdings financial representatives shall actively consult
with each other regarding any changes (whether or not substantive) which
Holdings may consider making to its Quarterly Financial Statements and related
disclosures during the three Business Days immediately prior to any anticipated
filing with the SEC, and Holdings shall obtain Continental's consent prior to
making any change to Holdings' Quarterly Financial Statements or related
disclosures which would have an effect upon Continental's financial statements
or related disclosures. In addition to the foregoing, no Quarterly Financial
Statement or any other document which refers, or contains information with
respect, to the ownership of Holdings by Continental or the separation of
Holdings from Continental shall be filed with the SEC or otherwise made public
by Holdings or any of its Subsidiaries without the prior written consent of
Continental, which consent will not be unreasonably withheld.
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(vi) Holdings shall deliver to Continental as soon as
practicable, and in any event within 20 Business Days after the end of each
fiscal year of Holdings and no later than 10 days before Holdings intends to
file its Annual Financial Statements (as defined below) with the SEC, (A) drafts
of the consolidated financial statements of Holdings (and notes thereto) for
such year, setting forth in each case in comparative form the consolidated
figures (and notes thereto) for the previous fiscal year and all in reasonable
detail and prepared in accordance with Regulation S-X and (B) a discussion and
analysis by management of Holdings' and its Subsidiaries' financial condition
and results of operations for such year, including, without limitation, an
explanation of any material adverse change, all in reasonable detail and
prepared in accordance with Item 303(a) of Regulation S-K. The information set
forth in (A) and (B) above is herein referred to as the "Annual Financial
Statements." No later than the earlier of (1) five Business Days prior to the
date Holdings publicly files the Annual Financial Statements with the SEC or
otherwise makes such Annual Financial Statements publicly available or (2) five
Business Days prior to the date on which Continental intends to file its annual
financial statements with the SEC (as evidenced by written notice from
Continental to Holdings of such intended filing date at least ten Business Days
prior to such intended filing date), Holdings shall deliver to Continental the
final form of the Annual Financial Statements certified by the chief financial
officer of Holdings as presenting fairly, in all material respects, the
financial condition and results of operations of Holdings and its Subsidiaries;
provided that Holdings may continue to revise such Annual Financial Statements
prior to the filing thereof in order to make corrections and non-substantive
changes which corrections and changes shall be delivered by Holdings to
Continental as soon as practicable, and in any event within eight hours after
such filing; and, provided, further, that Continental and Holdings financial
representatives shall actively consult with each other regarding any changes
(whether or not substantive) which Holdings may consider making to its Annual
Financial Statements and related disclosures during the three Business Days
immediately prior to any anticipated filing with the SEC, and Holdings shall
obtain Continental's consent prior to making any change to Holdings' Annual
Financial Statements or related disclosures which would have an effect upon
Continental's financial statements or related disclosures. In addition to the
foregoing, no Annual Financial Statement or any other document which refers, or
contains information with respect, to the ownership of Holdings by Continental
or the separation of Holdings from Continental shall be filed with the SEC or
otherwise made public by Holdings or any of its Subsidiaries without the prior
written consent of Continental, which consent will not be unreasonably withheld.
In any event, Holdings shall deliver to Continental, no later than 20 Business
Days after the end of each fiscal year of Holdings, the final form of the Annual
Financial Statements accompanied by an opinion thereon by Holdings' independent
certified public accountants.
(vii) Holdings shall deliver to Continental all Quarterly and
Annual Financial Statements of each Subsidiary of Holdings which is itself
required to file financial statements with the SEC or otherwise make such
financial statements publicly available, with such financial statements to be
provided in the same manner and detail and on the same time schedule as those
financial statements of Holdings required to be delivered to Continental
pursuant to this Section 4.1(a).
(viii) All information provided by Holdings or any of its
Subsidiaries to Continental pursuant to Sections 4.1(a)(iii) through (vii)
inclusive shall be consistent in terms of
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format and detail and otherwise with the procedures in effect on the date hereof
with respect to the provision of such financial information by Holdings and its
Subsidiaries, as applicable, to Continental (and, where appropriate, as
presently presented in financial reports to Continental's Board of Directors),
with such changes therein as may be requested by Continental from time to time
consistent with changes in reporting by sectors and Subsidiaries of Continental.
(ix) Holdings and each of its Subsidiaries which files
information with the SEC shall deliver to Continental: (A) as soon as the same
are prepared, substantially final drafts of: (x) all reports, notices and proxy
and information statements to be sent or made available by Holdings or any of
its Subsidiaries to their security holders, (y) all regular, periodic and other
reports to be filed or furnished under Sections 13, 14 and 15 of the Exchange
Act (including Reports on Forms 10-K, 10-Q and 8-K and Annual Reports to
Shareholders), and (z) all registration statements and prospectuses to be filed
by Holdings or any of its Subsidiaries with the SEC or any securities exchange
or interdealer quotation system pursuant to the listed company manual (or
similar requirements) of such exchange or quotation system (collectively, the
documents identified in clauses (x), (y) and (z) are referred to herein as
"Holdings Public Documents"), and (B) as soon as practicable, but in no event
later than four Business Days (except where impracticable in the case of a
report on Form 8-K) prior to the date the same are printed, sent or filed,
whichever is earliest, final copies of all such Holdings Public Documents;
provided that Holdings may continue to revise such Holdings Public Documents
prior to the filing thereof in order to make corrections and non-substantive
changes which corrections and changes shall be delivered by Holdings to
Continental as soon as practicable, and in any event within eight hours after
such filing; and, provided, further, that Continental and Holdings financial
representatives shall actively consult with each other regarding any changes
(whether or not substantive) which Holdings may consider making to any of its
Holdings Public Documents and related disclosures prior to any anticipated
filing with the SEC, and Holdings shall obtain Continental's consent prior to
making any change to its Holdings Public Documents or related disclosures which
would have an effect upon Continental's financial statements or related
disclosures. In addition to the foregoing, no Holdings Public Document or any
other document which refers, or contains information with respect, to the
ownership of Holdings by Continental or the separation of Holdings from
Continental shall be filed with the SEC or otherwise made public by Holdings or
any of its Subsidiaries without the prior written consent of Continental, which
consent will not be unreasonably withheld.
(x) Holdings shall, as promptly as practicable, deliver to
Continental copies of all annual and other budgets and financial projections
(consistent in terms of format and detail and otherwise with the procedures in
effect on the date hereof) relating to Holdings or any of its Subsidiaries and
shall provide Continental an opportunity to meet with management of Holdings to
discuss such budgets and projections, which obligations may be satisfied by
delivery of such copies to Continental's designees to Holdings' Board of
Directors, if any.
(xi) With reasonable promptness, Holdings shall deliver to
Continental such additional financial and other information and data with
respect to Holdings and its Subsidiaries and their business, properties,
financial positions, results of operations and prospects as from time to time
may be reasonably requested by Continental.
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(xii) A reasonable period of time prior to issuance, Holdings
shall deliver to Continental copies of substantially final drafts of all press
releases and other statements to be made available by Holdings or any of its
Subsidiaries to employees of Holdings or any of its Subsidiaries or to the
public concerning material developments in the business, properties, earnings,
results of operations, financial condition or prospects of Holdings or any of
its Subsidiaries or the relationship between (A) Holdings or any of its
Subsidiaries and (B) Continental or any of its Affiliates. Continental shall
have the right to review and comment on such press releases and other
statements. Holdings shall include in any final press release or other statement
all reasonable comments of Continental. In addition, prior to the issuance of
any such press release or public statement, Holdings shall consult with
Continental regarding any changes (other than typographical or other similar
minor changes) to such substantially final drafts. Immediately following the
issuance thereof, Holdings shall deliver to Continental copies of final drafts
of all press releases and other public statements. Holdings and Continental will
consult with each other as to the timing of their annual and quarterly earnings
releases and will give each other an opportunity to review the information
therein relating to Holdings and its Subsidiaries and to comment thereon.
(xiii) Holdings shall cooperate fully, and cause its accountants
to cooperate fully, with Continental to the extent requested by Continental in
the preparation of Continental's public earnings releases, quarterly reports on
Form 10-Q, Annual Reports to Securityholders, Annual Reports on Form 10-K, any
Current Reports on Form 8-K and any other proxy, information and registration
statements, reports, notices, prospectuses and any other filings made by
Continental with the SEC, any national securities exchange or otherwise made
publicly available (collectively, "Continental Public Filings"). Holdings agrees
to provide to Continental all information that Continental reasonably requests
in connection with any Continental Public Filings or that, in the judgment of
Continental's legal department, is required to be disclosed or incorporated by
reference therein under any law, rule or regulation. Such information shall be
provided by Holdings in a timely manner on the dates requested by Continental
(which may be earlier than the dates on which Holdings otherwise would be
required hereunder to have such information available) to enable Continental to
prepare, print and release all Continental Public Filings on such dates as
Continental shall determine. Holdings shall cause its accountants to consent to
any reference to them as experts in any Continental Public Filings required
under any law, rule or regulation. If and to the extent requested by
Continental, Holdings shall diligently and promptly review all drafts of such
Continental Public Filings and prepare in a diligent and timely fashion any
portion of such Continental Public Filing pertaining to Holdings. Prior to any
printing or public release of any Continental Public Filing, an appropriate
executive officer of Holdings shall, if requested by Continental, certify that
the information relating to Holdings, any Holdings Affiliate or the Holdings
Business in such Continental Public Filing is accurate, true and correct in all
material respects. Unless required by law, rule or regulation, Holdings shall
not publicly release any financial or other information which conflicts with the
information with respect to Holdings, any Holdings Affiliate or the Holdings
Business that is included in any Continental Public Filing without Continental's
prior written consent. Prior to the release or filing thereof, Continental shall
provide Holdings with a draft of any portion of a Continental Public Filing
containing information relating to Holdings and its Subsidiaries and shall give
Holdings an opportunity to review such information and comment thereon; provided
that
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Continental shall determine in its sole discretion the final form and content of
all Continental Public Filings.
(b) Auditors and Audits; Annual Statements and Accounting. Holdings
agrees that, for so long as Continental is required to consolidate Holdings'
results of operations and financial position or to account for its investment in
Holdings under the equity method of accounting (in accordance with GAAP):
(i) Holdings shall not select a different accounting firm than
Ernst & Young LLP to serve as its (and its Subsidiaries') independent certified
public accountants ("Holdings' Auditors") without Continental's prior written
consent (which shall not be unreasonably withheld).
(ii) Holdings shall use its best efforts to enable the Holdings
Auditors to complete their audit such that they will date their opinion on
Holdings' audited annual financial statements on the same date that
Continental's independent certified public accountants ("Continental's
Auditors") date their opinion on Continental's audited annual financial
statements (the "Continental Annual Statements"), and to enable Continental to
meet its timetable for the printing, filing and public dissemination of the
Continental Annual Statements.
(iii) Holdings shall provide to Continental on a timely basis all
information that Continental reasonably requires to meet its schedule for the
preparation, printing, filing, and public dissemination of the Continental
Annual Statements. Without limiting the generality of the foregoing, Holdings
will provide all required financial information with respect to Holdings and its
Subsidiaries to Holdings' Auditors in a sufficient and reasonable time and in
sufficient detail to permit Holdings' Auditors to take all steps and perform all
reviews necessary to provide sufficient assistance to Continental's Auditors
with respect to information to be included or contained in the Continental
Annual Statements. Continental will provide in a timely manner to Holdings all
information that is reasonably necessary for Holdings to comply with this
Section 4.1(b)(iii).
(iv) Holdings shall authorize Holdings' Auditors to make
available to Continental's Auditors both the personnel who performed or are
performing the annual audit of Holdings and work papers related to the annual
audit of Holdings, in all cases within a reasonable time prior to Holdings'
Auditors' opinion date, so that Continental's Auditors are able to perform the
procedures they consider necessary to take responsibility for the work of
Holdings' Auditors as it relates to Continental's Auditors' report on the
Continental Annual Statements, all within sufficient time to enable Continental
to meet its timetable for the printing, filing and public dissemination of the
Continental Annual Statements.
(v) Holdings shall provide Continental's internal auditors access
to Holdings' and its Subsidiaries' books and records so that Continental may
conduct reasonable audits relating to the financial statements provided by
Holdings pursuant hereto as well as to the internal accounting controls and
operations of Holdings and its Subsidiaries.
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(vi) Holdings shall give Continental as much prior notice as
reasonably practical of any proposed determination of, or any significant
changes in, its accounting estimates or accounting principles from those in
effect on the date hereof. Holdings will consult with Continental and, if
requested by Continental, Holdings will consult with Continental's auditors with
respect thereto. Holdings will not make any such determination or changes
without Continental's prior written consent if such a determination or a change
would be sufficiently material to be required to be disclosed in Holdings'
financial statements as filed with the SEC or otherwise publicly disclosed
therein.
(vii) Notwithstanding clause (vi) above, Holdings shall make any
changes in its accounting estimates or accounting principles that are requested
by Continental in order for Holdings' accounting estimates and principles to be
consistent with those of Continental.
Nothing in this Section 4.1 shall require Holdings to violate any
agreement with any of its customers regarding the confidentiality of
commercially sensitive information relating to that customer or its business;
provided that in the event that Holdings is required under this Section 4.1 to
disclose any such information, Holdings shall use all commercially reasonable
efforts to seek to obtain such customer's consent to the disclosure of such
information.
4.2 Covenants Against Taking Certain Actions Affecting Continental.
Holdings hereby covenants and agrees that, for so long as Continental
beneficially owns at least 50% of the value of all outstanding shares of
Holdings Capital Stock or 50% of the total combined voting power of all
outstanding shares of Voting Stock of Holdings:
(a) Holdings shall not, without the prior written consent of
Continental (which it may withhold in its sole and absolute discretion), take,
or cause to be taken, directly or indirectly, any action, including making or
failing to make any election under the law of any state, which has the effect,
directly or indirectly, of restricting or limiting the ability of Continental to
freely sell, transfer, assign, pledge or otherwise dispose of shares of Holdings
Common Stock or would restrict or limit the rights of any transferee of
Continental as a holder of Holdings Common Stock. Without limiting the
generality of the foregoing, Holdings shall not, without the prior written
consent of Continental (which it may withhold in its sole and absolute
discretion), take any action, or recommend to its stockholders any action, which
would among other things, limit the legal rights of, or deny any benefit to,
Continental as a Holdings stockholder in a manner not applicable to Holdings
stockholders generally.
(b) To the extent that Continental is a party to any contract or
agreement with a third party (i) that provides that certain actions of
Continental's Subsidiaries may result in Continental being in breach of or in
default under such agreement and Continental has advised Holdings of the
existence, and has made available to Holdings copies, of such contract or
agreement (or the relevant portions thereof), (ii) to which Holdings or any of
its Subsidiaries is a party or (iii) under which Holdings or any of its
Subsidiaries has performed any obligations on or before the date hereof,
Holdings shall not take, and shall cause its Subsidiaries not to take, any
actions that reasonably could result in Continental being in breach of or in
default under any such contract or agreement. As of the date hereof, the
contracts and agreements described in clause (i) above are set forth or
generally described on Exhibit A attached hereto. Holdings hereby acknowledges
11
and agrees that Continental has made available to Holdings copies of each
contract or agreement (or the relevant portion thereof) described on Exhibit A.
The parties acknowledge and agree that, after the date hereof, Continental may
in good faith (and not solely with the intention of imposing restrictions on
Holdings pursuant to this covenant) amend the referenced agreements or enter
into additional contracts or agreements that provide that certain actions of
Continental's Subsidiaries may result in Continental being in breach of or in
default under such agreements. In such event, Exhibit A shall be deemed to be
automatically amended to reflect the addition of any other contracts or
agreements (or relevant portions thereof) of which Continental advises Holdings
after the date hereof in accordance with this Section 4.2(b).
4.3 Covenant Regarding Continental Preferred Stock. For so long as
Holdings shall constitute a Subsidiary or Affiliate of Continental, in each case
as such terms are defined in the Certificate of Designations of Series B
Preferred Stock, par value $0.01, of Continental, Holdings shall not take any
actions that reasonably could result in the occurrence of any event of the type
(i) described in Section 4(2) of such Certificate of Designations in respect of
which the holder of the Series B Preferred Stock would be entitled to vote, or
(ii) which would constitute a CO Change of Control as defined in Section 8 of
such Certificate of Designations.
4.4 Covenant and Representation Regarding XJT Holdings and ExpressJet.
There is no current plan or intention on the part of Holdings, XJT Holdings,
Inc., a Delaware corporation and a wholly owned subsidiary of Holdings ("XJT
Holdings") or ExpressJet Airlines, Inc., a Delaware corporation and a wholly
owned subsidiary of XJT Holdings ("ExpressJet"), to enter into any merger or
consolidation or any transaction that would be treated for federal income tax
purposes as a liquidation of either XJT Holdings or ExpressJet (or would result
in XJT Holdings or ExpressJet being deemed liquidated for federal income tax
purposes), and Holdings shall not permit XJT Holdings or ExpressJet to enter
into, or agree to enter into, any such transaction that would be treated as, or
result in, a liquidation of XJT Holdings or ExpressJet into Holdings, XJT
Holdings, or any of their Affiliates, within two years of the Initial Public
Offering.
4.5 Representation and Covenant Regarding Preferred Stock. Holdings and
its Affiliates will treat the Series A Cumulative Redeemable Preferred Stock of
ExpressJet (the "Preferred Stock") as equity for financial reporting and tax
purposes. Neither Holdings nor any of its Affiliates shall (i) acquire or redeem
any shares of the Preferred Stock, other than upon redemption of such Preferred
Stock in accordance with the Mandatory Redemption or Optional Redemption
provisions of the certificate of designation relating to the Preferred Stock,
(ii) enter into any arrangement that reduces the risk of loss of the holders of
the Preferred Stock with respect to their interest therein (including agreeing
in advance to exercise ExpressJet's rights under the Optional Redemption
provisions) or (iii) take any action that could result in the holders of the
Preferred Stock acquiring voting rights other than pursuant to the terms of the
certificate of designation relating to the Preferred Stock as currently in
effect.
4.6 Covenant and Representation Regarding Issuance of Subsidiary Stock.
There is no current plan or intention on the part of Holdings, XJT Holdings or
ExpressJet, to cause ExpressJet to issue or sell or to agree to issue or sell,
any additional shares of Preferred Stock (or any other securities of ExpressJet
that for purposes of the section 368(c) of the Code, would be treated as part of
the same class of stock as the Preferred Stock), and neither Holdings nor XJT
Holdings shall permit ExpressJet to issue or sell, or to
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agree to issue or sell, any such shares or securities within one year of the
consummation of the Initial Public Offering. There is no current plan or
intention on the part of Holdings, XJT Holdings or ExpressJet, to sell or issue
common equity in XJT Holdings or ExpressJet to any Person other than Holdings or
XJT Holdings.
4.7 Representation and Covenants regarding ExpressJet Stock and
Purchaser Note. XJT Holdings has no plan or intention to transfer, distribute or
otherwise dispose of the common stock of ExpressJet. XJT Holdings has no current
plan or intention to transfer or dispose of the promissory note received in
connection with its sale of the Preferred Stock and shall not transfer or
dispose of such note within one year of the Initial Public Offering.
4.8 Tax Opinions. Holdings shall, and shall cause its Affiliates to,
cooperate with, and provide any representations reasonably requested by,
Continental's tax advisers in connection with any opinions to be rendered with
respect to the transactions contemplated hereby, including without limitation
the transfer of assets from XJT Holdings to ExpressJet and the issuance and sale
of the Preferred Stock, and hereby agrees that any representations made to such
advisers shall be for the benefit of Continental and shall have the same effect
as if made herein.
5. Indemnification.
5.1 Indemnification by Holdings. Holdings shall indemnify, defend and
hold harmless Continental, all Continental Affiliates and each of their
respective directors, officers and employees (in their capacities as such), from
and against:
(a) all Losses, including any resulting reduction in payments by
Holdings to Continental pursuant to that certain Tax Agreement by and between
Continental and Holdings dated as of the date hereof, relating to, arising out
of, or due to, directly or indirectly, any breach by Holdings or any Holdings
Affiliate of any of the provisions of this Agreement;
(b) all Losses relating to, arising out of, or due to, directly or
indirectly, any incorrect, inaccurate or incomplete financial and other
information provided by Holdings or any Holdings Affiliate to Continental
pursuant to Section 4.1 of this Agreement; and
(c) all Losses relating to, arising out of, or due to any untrue
statement or alleged untrue statement of a material fact contained in, or
incorporated by reference into, the IPO Registration Statement or the omission
or alleged omission to state (whether pursuant to direct statement or
incorporation by reference) in the IPO Registration Statement a material fact
required to be stated therein or necessary to make the statements therein not
misleading other than with respect to the Continental Disclosure Portions.
5.2 Indemnification by Continental. Continental shall indemnify,
defend, and hold harmless Holdings, all Holdings Affiliates, and each of their
respective directors, officers and employees (in their capacities as such), from
and against:
(a) all Losses relating to, arising out of, or due to, directly or
indirectly, any breach by Continental or any Continental Affiliate of any of the
provisions of this Agreement; and
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(b) all Losses relating to, arising out of, or due to any untrue
statement or alleged untrue statement of a material fact contained in, or
incorporated by reference into, the Continental Disclosure Portions of the IPO
Registration Statement or the omission or alleged omission to state (whether
pursuant to direct statement or incorporation by reference) in the Continental
Disclosure Portions of the IPO Registration Statement a material fact required
to be stated therein or necessary to make the statements therein not misleading.
(c) any final and non-appealable reduction by the federal government or
any agency thereof in the amount of the $24,899,649 federal grant to Holdings
pursuant to the Air Transportation and System Stabilization Act, following an
audit conducted pursuant to such act, which reduction shall be deemed to be a
Loss for purposes of this Section 5.
5.3 Tax Effects of Indemnification. The amount of any Loss for which
indemnification is provided under this Agreement shall be (i) increased to take
account of net Tax cost, if any, incurred by the Indemnitee arising from the
receipt or accrual of an Indemnity Payment hereunder (grossed up for such
increase) and (ii) reduced to take account of net Tax benefit, if any, realized
by the Indemnitee arising from incurring or paying such Loss. In computing the
amount of any such Tax cost or Tax benefit, the Indemnitee shall be deemed to
recognize all other items of income, gain, loss, deduction or credit before
recognizing any item arising from the receipt or accrual of any Indemnity
Payment hereunder or incurring or paying any indemnified Loss. Any Indemnity
Payment hereunder shall initially be made without regard to this Section 5.3 and
shall be increased or reduced to reflect any such net Tax cost (including
gross-up) or net Tax benefit only after the Indemnitee has actually realized
such cost or benefit. For purposes of this Agreement, an Indemnitee shall be
deemed to have "actually realized" a net Tax cost or a net Tax benefit to the
extent that, and at such time as, the amount of Taxes payable by such Indemnitee
is increased above or reduced below, as the case may be, the amount of Taxes
that such Indemnitee would be required to pay but for the receipt or accrual of
the Indemnity Payment or the incurrence or payment of such Loss. The amount of
any increase or reduction hereunder shall be adjusted to reflect any final
determination (which shall include the execution of Form 870-AD or successor
form) with respect to the Indemnitee's liability for Taxes, and payments between
Continental and Holdings to reflect such adjustment shall be made if necessary.
5.4 Effect of Insurance Upon Indemnification. The amount which an
Indemnifying Party is required to pay to any Indemnitee pursuant to this Section
5 shall be reduced (including retroactively) by any Insurance Proceeds and other
amounts actually recovered by such Indemnitee in reduction of the related Loss,
it being understood and agreed that each of Holdings and Continental shall use
commercially reasonable efforts to collect any such proceeds or other amounts to
which it or any of its Affiliates is entitled, without regard to whether it is
the Indemnifying Party hereunder. No Indemnitee shall be required, however, to
collect any such proceeds or other amounts prior to being entitled to
indemnification from an Indemnifying Party hereunder. If an Indemnitee receives
an Indemnity Payment in respect of a Loss and subsequently receives Insurance
Proceeds or other amounts in respect of such Loss, then such Indemnitee shall
pay to such Indemnifying Party an amount equal to the difference between (a) the
sum of the amount of such Indemnity Payment and the amount of such Insurance
Proceeds or
14
other amounts actually received and (b) the amount of such Loss, in each case
adjusted (at such time as appropriate adjustment can be determined) to reflect
any premium adjustment attributable to such claim.
5.5 Procedure for Indemnification Involving Third-party Claims.
(a) Notice of Claim. If any Indemnitee receives notice of the assertion
of any Third-Party Claim with respect to which an Indemnifying Party is
obligated under this Agreement to provide indemnification, such Indemnitee shall
give such Indemnifying Party notice thereof (together with a copy of such
Third-Party Claim, process or other legal pleading) promptly after becoming
aware of such Third-Party Claim; provided, however, that the failure of any
Indemnitee to give notice as provided in this Section shall not relieve any
Indemnifying Party of its obligations under this Section 5, except to the extent
that such Indemnifying Party is actually prejudiced by such failure to give
notice. Such notice shall describe such Third-Party Claim in reasonable detail.
(b) Obligation of Indemnifying Party. An Indemnifying Party, at such
Indemnifying Party's own expense and through counsel chosen by such Indemnifying
Party (which counsel shall be reasonably acceptable to the Indemnitee), may
elect to defend any Third-Party Claim. If an Indemnifying Party elects to defend
a Third-Party Claim, then, within ten Business Days after receiving notice of
such Third-Party Claim (or sooner, if the nature of such Third-Party Claim so
requires), such Indemnifying Party shall notify the Indemnitee of its intent to
do so, and such Indemnitee shall cooperate in the defense of such Third-Party
Claim. Such Indemnifying Party shall pay such Indemnitee's reasonable
out-of-pocket expenses incurred in connection with such cooperation. Such
Indemnifying Party shall keep the Indemnitee reasonably informed as to the
status of the defense of such Third-Party Claim. After notice from an
Indemnifying Party to an Indemnitee of its election to assume the defense of a
Third-Party Claim, such Indemnifying Party shall not be liable to such
Indemnitee under this Section 5 for any legal or other expenses subsequently
incurred by such Indemnitee in connection with the defense thereof other than
those expenses referred to in the preceding sentence; provided, however, that
such Indemnitee shall have the right to employ one law firm as counsel, together
with a separate local law firm in each applicable jurisdiction ("Separate
Counsel"), to represent such Indemnitee in any action or group of related
actions (which firm or firms shall be reasonably acceptable to the Indemnifying
Party) if, in such Indemnitee's reasonable judgment at any time, either a
conflict of interest between such Indemnitee and such Indemnifying Party exists
in respect of such claim, or there may be defenses available to such Indemnitee
that are different from or in addition to those available to such Indemnifying
Party and the representation of both parties by the same counsel would be
inappropriate, and in that event (i) the reasonable fees and expenses of such
Separate Counsel shall be paid by such Indemnifying Party (it being understood,
however, that the Indemnifying Party shall not be liable for the expenses of
more than one Separate Counsel (excluding local counsel) with respect to any
Third-Party Claim (even if against multiple Indemnitees)) and (ii) each of such
Indemnifying Party and such Indemnitee shall have the right to conduct its own
defense in respect of such claim. If an Indemnifying Party elects not to defend
against a Third-Party Claim, or fails to notify an Indemnitee of its election as
provided in this Section 5 within the period of ten Business Days described
above, the Indemnitee may defend, compromise, and settle such Third-Party Claim
and shall be entitled to indemnification
15
hereunder (to the extent permitted hereunder); provided, however, that no such
Indemnitee may compromise or settle any such Third-Party Claim without the prior
written consent of the Indemnifying Party, which consent shall not be
unreasonably withheld or delayed. Notwithstanding the foregoing, the
Indemnifying Party shall not, without the prior written consent of the
Indemnitee, (i) settle or compromise any Third-Party Claim or consent to the
entry of any judgment which does not include as an unconditional term thereof
the delivery by the claimant or plaintiff to the Indemnitee of a written release
from all liability in respect of such Third-Party Claim or (ii) settle or
compromise any Third-Party Claim in any manner that would be reasonably likely
to have a material adverse effect on the Indemnitee.
(c) Joint Defense of Certain Claims. Notwithstanding the provisions of
Section 5.5(b), Continental and Holdings shall jointly control the defense of,
and cooperate with each other with respect to defending, any Third-Party Claim
with respect to which each party is claiming that it is entitled to
indemnification under Section 5.1 or 5.2. If either Continental or Holdings
fails to defend jointly any such Third-Party Claim, the other party shall solely
defend such Third-Party Claim and the party failing to defend jointly shall use
all commercially reasonable efforts to cooperate with the other party in its
defense of such Third-Party Claim; provided, however, that neither party may
compromise or settle any such Third-Party Claim without the prior written
consent of the other party, which consent shall not be unreasonably withheld or
delayed. All costs and expenses of either party in connection with, and during
the course of, the joint control of the defense of any such Third-Party Claim
shall be initially paid by the party that incurs such costs and expenses. Such
costs and expenses shall be reallocated and reimbursed in accordance with the
respective indemnification obligations of the parties at the conclusion of the
defense of such Third-Party Claim.
5.6 Procedure for Indemnification Not Involving Third-Party Claims. If
any Indemnitee desires to assert against an Indemnifying Party any claim for
indemnification under this Section 5 other than a Third-Party Claim (a "Claim"),
the Indemnitee shall deliver to the Indemnifying Party notice of its demand for
satisfaction of such Claim (a "Request"), specifying in reasonable detail the
amount of such Claim and the basis for asserting such Claim. Within 30 days
after the Indemnifying Party has been given a Request, the Indemnifying Party
shall either (i) satisfy the Claim requested to be satisfied in such Request by
delivering to the Indemnitee payment by wire transfer or a certified or bank
cashier's check payable to the Indemnified Party in immediately available funds
in an amount equal to the amount of such Claim, or (ii) notify the Indemnitee
that the Indemnifying Party contests such Claim by delivering to the Indemnitee
a Dispute Notice, stating that the Indemnifying Party objects to such Claim and
specifying in reasonable detail the basis for contesting such Claim.
5.7 Exclusive Remedies. Except for the right to pursue equitable
remedies, the remedies provided in this Section 5 shall be deemed the sole and
exclusive remedies of the parties with respect to the subject matters of the
indemnification provisions of this Section 5.
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6. Miscellaneous.
6.1 Survival. The representations and warranties contained in this
Agreement shall survive the execution and delivery hereof until the expiration
of all applicable statutes of limitations.
6.2 Complete Agreement. Except as otherwise set forth in this
Agreement, this Agreement and the exhibits hereto shall constitute the entire
agreement between the parties hereto with respect to the subject matter hereof
and shall supersede all prior agreements and understandings, whether written or
oral, between the parties with respect to such subject matter.
6.3 Authority. Each of the parties hereto represents to the other that
(a) it has the corporate power and authority to execute, deliver and perform
this Agreement, (b) the execution, delivery and performance of this Agreement by
it has been duly authorized by all necessary corporate action, (c) it has duly
and validly executed and delivered this Agreement, and (d) this Agreement is a
legal, valid and binding obligation, enforceable against it in accordance with
its terms subject to applicable bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting creditors' rights generally and
general equity principles.
6.4 Governing Law This Agreement shall be governed by and construed in
accordance with the laws of the State of
Texas (other than the laws regarding
conflicts of laws) as to all matters, including matters of validity,
construction, effect, performance and remedies.
6.5 Consent to Exclusive Jurisdiction. Any action, suit or proceeding
arising out of any claim that the parties cannot settle through good faith
negotiations shall be litigated exclusively in the state courts of Xxxxxx County
of the State of
Texas. Each of the parties hereto hereby irrevocably and
unconditionally (a) submits to the jurisdiction of such state courts of
Texas
for any such action, suit or proceeding, (b) agrees not to commence any such
action, suit or proceeding except in such state courts of
Texas, (c) waives, and
agrees not to plead or to make, any objection to the venue of any such action,
suit or proceeding in such state courts of
Texas, (d) waives, and agrees not to
plead or to make, any claim that any such action, suit or proceeding brought in
such state courts of
Texas has been brought in an improper or otherwise
inconvenient forum, (e) waives, and agrees not to plead or to make, any claim
that such state courts of
Texas lack personal jurisdiction over it, and (f)
waives its right to remove any such action, suit or proceeding to the federal
courts except when such courts are vested with sole and exclusive jurisdiction
by statute. Continental and Holdings shall cooperate with each other in
connection with any such action, suit or proceeding to obtain reliable
assurances that confidential treatment will be accorded any information that
either party shall reasonably deem to be confidential or proprietary. Each of
the parties hereto further covenants and agrees that, until the expiration of
all applicable statutes of limitations relating to potential claims under this
Agreement, each such party shall maintain a duly appointed agent for the service
of summonses and other legal process in the State of
Texas.
6.6 Notices. All Notices shall be in writing and shall be deemed given
upon (a) a transmitter's confirmation of a receipt of a facsimile transmission
(but only if followed by confirmed delivery by a standard overnight courier the
following Business Day or if delivered by
17
hand the following Business Day), or (b) confirmed delivery by a standard
overnight courier or delivered by hand, to the parties at the following
addresses:
if to Continental:
Continental Airlines, Inc.
0000 Xxxxx Xxxxxx, XXXXX
Xxxxxxx, Xxxxx 00000
Attention: Senior Vice President - Corporate Development
Telecopy No.: (000) 000-0000
with a copy to:
Continental Airlines, Inc.
0000 Xxxxx Xxxxxx, XXXXX
Xxxxxxx, Xxxxx 00000
Attention: General Counsel
Telecopy No.: (000) 000-0000
if to Holdings, to:
ExpressJet Holdings, Inc.
0000 Xxxxx Xxxxxx, XXXXX
Xxxxxxx, Xxxxx 00000
Attention: Chief Financial Officer
Telecopy No.: (000) 000-0000
or to such other address as either party hereto may have furnished to the other
party by a Notice in writing in accordance with this Section 6.6.
6.7 Amendment and Modification. This Agreement may not be amended or
modified in any respect except by a written agreement signed by both of the
parties hereto.
6.8 Binding Effect; Assignment. This Agreement and all of the
provisions hereof shall be binding upon the parties hereto and inure to the
benefit of the parties hereto and their respective successors and permitted
assigns. Except with respect to a merger of either party with another Person,
neither this Agreement nor any of the rights, interests or obligations hereunder
shall be assigned by either party hereto without the prior written consent of
the other party, which consent shall not be unreasonably withheld or delayed.
6.9 Third Party Beneficiaries. The Indemnitees and their respective
successors shall be third party beneficiaries of the indemnification provisions
of Section 5, as applicable, and shall be entitled to enforce those provisions
and in connection with such enforcement shall be subject to Section 6.5 in each
such case as fully and to the same extent as if they were parties to this
Agreement. Except as provided in the previous sentence, nothing in this
Agreement, express or implied, is intended to or shall confer upon any Person
any legal or equitable right, benefit or
18
remedy of any nature whatsoever under or by reason of this Agreement, and no
Person (other than as provided in the previous sentence) shall be deemed a third
party beneficiary under or by reason of this Agreement.
6.10 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. The Agreement may be
executed by facsimile signature.
6.11 Waiver. The observance of any term of this Agreement may be waived
(either generally or in a particular instance and either retroactively or
prospectively) by the party entitled to enforce such term, but such waiver shall
be effective only if it is in writing signed by the party against which such
waiver is to be asserted. Unless otherwise expressly provided in this Agreement,
no delay or omission on the part of any party in exercising any right or
privilege under this Agreement shall operate as a waiver thereof, nor shall any
waiver on the part of any party of any right or privilege under this Agreement
operate as a waiver of any other right or privilege under this Agreement nor
shall any single or partial exercise of any right or privilege preclude any
other or further exercise thereof or the exercise of any other right or
privilege under this Agreement. No failure by either party to take any action or
assert any right or privilege hereunder shall be deemed to be a waiver of such
right or privilege in the event of the continuation or repetition of the
circumstances giving rise to such right unless expressly waived in writing by
the party against whom the existence of such waiver is asserted.
6.12 Severability. 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.
6.13 Remedies. Except as otherwise provided herein, each of Continental
and Holdings shall be entitled to enforce its rights under this Agreement
specifically, to recover damages and costs (including reasonable attorneys'
fees) caused by any breach of any provision of this Agreement and to exercise
all other rights existing in its favor. Each of Continental and Holdings
acknowledges and agrees that under certain circumstances the breach by
Continental or any of its Affiliates or Holdings or any of its Affiliates of a
term or provision of this Agreement will materially and irreparably harm the
other party, that money damages will accordingly not be an adequate remedy for
such breach and that the non-defaulting party, in its sole discretion and in
addition to its rights under this Agreement and any other remedies it may have
at law or in equity and notwithstanding Section 6.5, may apply to any court of
law or equity of competent jurisdiction (without posting any bond or deposit)
for specific performance and/or other injunctive relief in order to enforce or
prevent any breach of the provisions of this Agreement.
6.14 Performance. Unless a higher standard of effort is otherwise
required herein, each of the parties hereto shall use all commercially
reasonable efforts to cause to be performed all actions, agreements and
obligations set forth herein to be performed by any Affiliate of such party.
19
6.15 References; Construction. The table of contents and the section
and other headings and subheadings contained in this Agreement and the exhibits
hereto are solely for the purpose of reference, are not part of the agreement of
the parties hereto, and shall not in any way affect the meaning or
interpretation of this Agreement or any exhibit hereto. All references to days
or months shall be deemed references to calendar days or months. All references
to "$" shall be deemed references to United States dollars. Unless the context
otherwise requires, any reference to a "Section" or an "Exhibit" shall be deemed
to refer to a section of this Agreement or an exhibit to this Agreement, as
applicable. The words "hereof," "herein" and "hereunder" and words of similar
import referring to this Agreement refer to this Agreement as a whole and not to
any particular provision of this Agreement. Whenever the words "include,"
"includes" or "including" are used in this Agreement, unless otherwise
specifically provided, they shall be deemed to be followed by the words "without
limitation." This Agreement shall be construed without regard to any presumption
or rule requiring construction or interpretation against the party drafting or
causing the document to be drafted.
20
IN WITNESS WHEREOF, the parties hereto have caused this
Initial Public
Offering Agreement to be duly executed and delivered as of the date and year
first written above.
CONTINENTAL AIRLINES, INC.
By:
------------------------
Name:
----------------------
Title:
---------------------
EXPRESSJET HOLDINGS, INC.
By:
------------------------
Name:
----------------------
Title:
---------------------
21
