MBIA INSURANCE CORPORATION

                       FINANCIAL GUARANTY INSURANCE POLICY

                                December 6, 2002

                                                                Policy No. 39753

Re:                 $200,000,000 CONTINENTAL AIRLINES FLOATING RATE SECURED
                    NOTES DUE 2007 (THE "NOTES")

Insured             PAYMENT OF INTEREST AT THE DEBT RATE FOR THE NOTES AND
Obligation:         PRINCIPAL ON THE NOTES AND PAYMENT FOR REIMBURSEMENT TO THE
                    LIQUIDITY PROVIDER PURSUANT TO CLAUSE (VII) OF THE
                    DEFINITION OF DEFICIENCY AMOUNT SET FORTH HEREIN.

Beneficiary:        WILMINGTON TRUST COMPANY, AS TRUSTEE AND AS AGENT FOR THE
                    LIQUIDITY PROVIDER (TOGETHER WITH ANY SUCCESSOR TRUSTEE DULY
                    APPOINTED AND QUALIFIED UNDER THE AGREEMENT (AS DEFINED
                    BELOW), THE "TRUSTEE")

          MBIA  INSURANCE  CORPORATION  ("MBIA"),  for  consideration  received,
hereby unconditionally,  absolutely and irrevocably and without the assertion of
any defenses to payment,  including fraud in the inducement or fact or any other
circumstances  (other  than  payment  in full)  that  would  have the  effect of
discharging a surety in law or in equity guarantees to the Trustee, subject only
to the terms of this Policy (the "POLICY"),  payment of the Insured  Obligation.
MBIA agrees to pay to the  Trustee,  in respect of each  Distribution  Date,  an
amount equal to (each a "DEFICIENCY AMOUNT"):

          (i) with respect to any Distribution  Date (other than the Final Legal
     Maturity  Date,  the  Non-Performance  Payment  Date,  the Final  Scheduled
     Payment Date or a Distribution Date established  pursuant to the succeeding
     clause  (ii),  clause (iv) or clause (v) below),  any  shortfall in amounts
     available  to  the  Trustee,  after  giving  effect  to  the  subordination
     provisions  of Section 3.2 of the  Agreement,  any  drawing  paid under the
     Liquidity  Facility  in  respect  of  interest  due on the  Notes  on  such
     Distribution  Date and any withdrawal from the Cash  Collateral  Account in
     respect  of  interest  due  on the  Notes  on  such  Distribution  Date  in
     accordance  with the  Agreement,  for the  payment  of  accrued  and unpaid
     interest  on the  Notes at the Debt  Rate  (without  giving  effect  to any
     Acceleration  and calculated  assuming that  Continental  will not cure the
     Default in the payment of interest);

          (ii) with respect to the Distribution Date (other than the Final Legal
     Maturity  Date,  the  Non-Performance  Payment  Date,  the Final  Scheduled
     Payment Date or a Distribution Date established  pursuant to the succeeding
     clause  (iv) or clause (v) below)  established  by the Trustee by reason of
     its receipt of a payment constituting the proceeds from the sale of Pledged
     Spare Parts  comprising  all of the Pledged Spare Parts subject to the lien
     of the Security  Agreement at the time of such sale,  any  shortfall in the
     amounts  available to the Trustee after giving effect to the  subordination
     provisions of Section 3.2 of the Agreement and, if such payment is received

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     prior to a Policy  Provider  Election,  the application of any drawing paid
     under the  Liquidity  Facility in respect of  interest  due on the Notes on
     such Distribution Date and any withdrawal from the Cash Collateral  Account
     in  respect  of  interest  due on the  Notes on such  Distribution  Date in
     accordance with the Agreement, required to pay in full the then outstanding
     principal  balance of the Notes  together with accrued and unpaid  interest
     thereon at the Debt Rate (excluding any accrued and unpaid Premium or Break
     Amount and calculated  assuming that  Continental will not cure the Default
     in the payment of interest) (the "OUTSTANDING AMOUNT");

          (iii) with respect to the  Distribution  Date that is the 25th day (or
     if such 25th day is not a Business Day, the next  Business  Day)  following
     (a) the Interest  Payment Date on which a Payment  Default  under the Notes
     (without giving effect to any Acceleration or any payments by the Liquidity
     Provider  or the  Policy  Provider)  exists  and is  continuing  for  eight
     consecutive Interest Periods (the  "NON-PERFORMING  PERIOD") (regardless of
     whether any proceeds from the sale of any Collateral are distributed by the
     Trustee  during  such  Non-Performing  Period)  or (b) if  applicable,  the
     Relevant  Date (the  "NON-PERFORMANCE  PAYMENT  DATE") any shortfall in the
     amounts available to the Trustee,  after giving effect to the subordination
     provisions of Section 3.2 of the Agreement,  the application of any drawing
     paid under the  Liquidity  Facility in respect of interest due on the Notes
     on such  Non-Performance  Payment  Date  and any  withdrawal  from the Cash
     Collateral  Account  in  respect  of  interest  due on the  Notes  on  such
     Non-Performance Payment Date in accordance with the Agreement,  required to
     pay in full the Outstanding Amount as of such Non-Performance Payment Date;
     PROVIDED,  HOWEVER,  if the  Non-Performance  Payment  Date is scheduled to
     occur before the Final  Scheduled  Payment Date and if MBIA shall have duly
     given a Policy  Provider  Election  (as  defined  below) at the end of such
     Non-Performing   Period   and  at  least  ten  (10)  days   prior  to  such
     Non-Performance  Payment  Date,  the  Deficiency  Amount shall be an amount
     equal to (A) with respect to such Non-Performance Payment Date, the accrued
     but unpaid  interest on the Notes at the Debt Rate (after  giving effect to
     the  application  of any drawing paid under the Liquidity  Facility and any
     withdrawal from the Cash Collateral Account,  attributable to such interest
     on the Notes) and (B) thereafter,  on each Distribution Date following such
     Non-Performance  Payment  Date as to which a Policy  Provider  Election has
     been given, and prior to the establishment of an Election Distribution Date
     or a Distribution Date pursuant to the immediately  succeeding clause (iv),
     an amount equal to the scheduled  principal (on the Final Scheduled Payment
     Date) and  interest  (without  regard to any  Acceleration)  payable on the
     Notes on the related payment date;

          (iv)  following  the  giving of any  Policy  Provider  Election,  with
     respect to any  Business  Day  elected by MBIA upon  twenty (20) days prior
     notice (which shall be a Distribution Date) and upon request by MBIA to the
     Trustee  to make a  drawing  under  this  Policy,  an  amount  equal to the
     Outstanding Amount as of such Distribution Date;

          (v)  with  respect  to any  Distribution  Date  which  is an  Election
     Distribution  Date,  an amount equal to the  Outstanding  Amount as of such
     Election Distribution Date;

          (vi) with respect to the Final Legal  Maturity Date, any shortfalls in
     amounts  available to the Trustee after giving effect to the  subordination
     provisions  of the  Agreement  and to the  application  of any drawing paid
     under the  Liquidity  Facility  in  respect  of  interest  included  in the
     Outstanding  Amount and any withdrawal from the Cash Collateral  Account in

<PAGE>

     respect of interest  included in the Outstanding  Amount in accordance with
     the  Agreement,   for  the  payment  in  full  of  the  Outstanding  Amount
     (calculated as of such date) on the Notes; and

          (vii) with respect to any Distribution  Date elected by the Trustee on
     behalf of the Liquidity  Provider upon twenty (20) days prior notice (which
     notice  can be given in  advance  of the  expiry of such  twenty-four-month
     period) to MBIA that is a Business Day which is no earlier than twenty-four
     (24) months from the earliest to occur of (1) the date on which an Interest
     Drawing was made under the Liquidity Facility and remains unreimbursed from
     payments made by Continental at the end of such  twenty-four-month  period,
     (2) the date on which any Downgrade Drawing, Non-Extension Drawing or Final
     Drawing  that  was  deposited  into the Cash  Collateral  Account  has been
     applied to pay any scheduled payment of interest for the Notes (each amount
     so applied, an "APPLIED DOWNGRADE ADVANCE", "APPLIED NON-EXTENSION ADVANCE"
     or  "APPLIED  FINAL  ADVANCE",  respectively,  and  together,  an  "APPLIED
     PROVIDER  ADVANCE") and is not reimbursed from payments made by Continental
     at the end of such  twenty-four-month  period and (3) the date on which all
     of the Notes have been  accelerated and remain unpaid by Continental at the
     end of such  twenty-four-month  period  (in  each  case,  disregarding  any
     reimbursements  from payments by the Policy Provider and from proceeds from
     the sale of the Spare Parts  Collateral  distributed  by the Trustee during
     such twenty-four-month period), the amount of all outstanding Drawings PLUS
     accrued  interest   thereon  (as  determined   pursuant  to  the  Liquidity
     Facility).

          For the avoidance of doubt, no Deficiency  Amount described in clauses
(i)-(vii) above or payment to be made in respect of an Avoided Payment described
below shall constitute an Accelerated or Acceleration payment.

          If any amount  paid or  required  to be paid in respect of the Insured
Obligation is voided (a  "PREFERENCE  EVENT") under any  applicable  bankruptcy,
insolvency,  receivership or similar law in an Insolvency Proceeding,  and, as a
result of such a Preference  Event, the Beneficiary,  the Liquidity  Provider or
any Noteholder is required to return such voided payment, or any portion of such
voided  payment  made or to be made  in  respect  of the  Notes  (including  any
disgorgement from the Noteholders or the Liquidity  Provider  resulting from any
such Insolvency Proceeding,  whether such disgorgement is determined on a theory
of preferential  conveyance or otherwise) (an "AVOIDED PAYMENT"),  MBIA will pay
an amount  equal to each  such  Avoided  Payment,  irrevocably,  absolutely  and
unconditionally and without the assertion of any defenses to payment,  including
fraud in  inducement  or fact or any other  circumstances  that  would  have the
effect of  discharging  a surety in law or in equity,  upon receipt by MBIA from
the  Beneficiary,  the Liquidity  Provider or such Noteholder of (x) a certified
copy of a final  (non-appealable)  order of a court  exercising  jurisdiction in
such  Insolvency  Proceeding to the effect that the  Beneficiary,  the Liquidity
Provider or such  Noteholder  is required to return any such  payment or portion
thereof  because such payment was voided under  applicable  law, with respect to
which order the appeal  period has expired  without an appeal  having been filed
(the  "FINAL  ORDER"),  (y) an  assignment,  in the form of  EXHIBIT  D  hereto,
irrevocably  assigning  to MBIA all rights and  claims of the  Beneficiary,  the
Liquidity Provider or such Noteholder  relating to or arising under such Avoided
Payment  and (z) a Notice of  Avoided  Payment  in the form of  EXHIBIT B hereto
appropriately completed and executed by the Beneficiary,  the Liquidity Provider
or such Noteholder. Such payment shall be disbursed to the receiver,

<PAGE>

conservator,  debtor-in-possession  or trustee in bankruptcy  named in the Final
Order and not to the  Beneficiary,  the  Liquidity  Provider or such  Noteholder
directly  unless such  Beneficiary,  the Liquidity  Provider or  Noteholder  has
returned such payment to such  receiver,  conservator,  debtor-in-possession  or
trustee in  bankruptcy,  in which case such  payment  shall be disbursed to such
Noteholder, Liquidity Provider or the Beneficiary, as the case may be.

          Notwithstanding the foregoing,  in no event shall MBIA be obligated to
make any payment in respect of any Avoided Payment,  which payment  represents a
payment of the principal amount of the Notes,  prior to the time MBIA would have
been  required  to make a payment  in  respect  of such  principal  pursuant  to
sub-paragraphs  (ii)-(vi) of the definition of Deficiency Amount in this Policy;
PROVIDED,  FURTHER,  that no  payment  of  principal  under  this  Policy on any
Distribution  Date, other than with respect to an Avoided Payment,  shall exceed
the Net Principal Policy Amount (as defined below) for such  Distribution  Date;
PROVIDED,  FURTHER,  that no  payment,  other  than with  respect  to an Avoided
Payment,  of a Deficiency  Amount (not including any payment of accrued interest
on the outstanding  Advances of the Liquidity Provider pursuant to sub-paragraph
(vii) under this Policy)  shall be in excess of the then  outstanding  principal
balance of the Notes and  accrued and unpaid  interest  thereon at the Debt Rate
(calculated  assuming that  Continental will not cure the Default in the payment
of  interest).  This  Policy  does not  cover  (i) any  premium,  break  amount,
prepayment  penalty or other accelerated  payment,  which at any time may become
due on or with respect to any Note, (ii) shortfalls, if any, attributable to the
liability of the Trustee,  for withholding taxes, if any (including interest and
penalties in respect of any such  liability) or (iii) any failure of the Trustee
to make any payment due to the Noteholders.

          Capitalized  terms used herein and not otherwise  defined herein shall
have the meanings assigned to them in the Indenture (the "AGREEMENT"),  dated as
of December 6, 2002, among MBIA, as Policy Provider, Continental, Morgan Stanley
Capital Services Inc., as Liquidity Provider, and the Trustee, without regard to
any amendment or supplement thereto unless such amendment or supplement has been
executed, or otherwise approved in writing, by MBIA.

          "BUSINESS  DAY" shall mean any day other than a Saturday,  a Sunday or
other  day on which  insurance  companies  in New York,  New York or  commercial
banking  institutions  in the cities in which the corporate  trust office of the
Trustee, the Fiscal Agent (as defined herein) or the office of MBIA specified in
this Policy are located are authorized or obligated by law or executive order to
close.

          "CONTINENTAL" means Continental Airlines, Inc.

          "ELECTION   DISTRIBUTION   DATE"  shall  mean  any  Distribution  Date
established by the Trustee upon 20 days' notice to the Policy Provider by reason
of the occurrence and continuation of a Policy Provider Default  occurring after
a Policy Provider Election.

          "FINAL LEGAL MATURITY DATE" shall mean December 6, 2009.

<PAGE>

          "INSOLVENCY PROCEEDING" means the commencement, after the date hereof,
of any bankruptcy, insolvency, readjustment of debt, reorganization, marshalling
of assets and  liabilities or similar  proceedings by or against  Continental or
any  Liquidity  Provider and the  commencement,  after the date  hereof,  of any
proceedings  by  Continental  or any  Liquidity  Provider  for the winding up or
liquidation  of its  affairs  or the  consent,  after  the date  hereof,  to the
appointment  of  a  trustee,   conservator,   receiver,  or  liquidator  in  any
bankruptcy,  insolvency,  readjustment of debt,  reorganization,  marshalling of
assets and  liabilities or similar  proceedings of or relating to Continental or
any Liquidity Provider.

          "INSURANCE AGREEMENT" shall mean the Insurance and Indemnity Agreement
(as may be amended,  modified or  supplemented  from time to time),  dated as of
December 6, 2002 by and among MBIA, Continental and the Trustee.

          "INSURED  AMOUNTS" shall mean, with respect to any Distribution  Date,
the Deficiency Amount for such Distribution Date.

          "NET  PRINCIPAL  POLICY  AMOUNT"  shall mean the  aggregate  principal
balance of the Notes as of the Closing Date MINUS all amounts  previously  drawn
on this Policy with respect to principal.

          "NONPAYMENT"  shall mean,  with  respect to any  Distribution  Date, a
Deficiency  Amount owing to the Trustee for  distribution  to the Noteholders or
the Liquidity Provider.

          "NOTEHOLDER"  shall  mean any person  who is the  registered  owner or
beneficial  owner of any of the Notes and who,  on the  applicable  Distribution
Date, is entitled under the terms of the Notes to payment thereunder.

          "NOTICE OF AVOIDED  PAYMENT" shall mean the notice,  substantially  in
the form of EXHIBIT B hereto,  delivered pursuant to this Policy and sent to the
contact  person at the address  and/or fax number set forth in this Policy,  and
specifying  the Avoided  Payment which shall be due and owing on the  applicable
Distribution Date.

          "NOTICE OF  NONPAYMENT"  shall mean the notice,  substantially  in the
form of  EXHIBIT A hereto,  delivered  pursuant  to this  Policy and sent to the
contact  person at the  address  and/or  fax  numbers  set forth in this  Policy
specifying  the Insured  Amount  which shall be due and owing to the Trustee for
distribution  to the  Noteholders  or, in the case of a Deficiency  Amount under
clause (vii) of the definition of "Deficiency Amount", the Liquidity Provider on
the applicable Distribution Date.

          "POLICY  PROVIDER  ELECTION" shall mean a notice given by MBIA when no
Policy Provider Default shall have occurred and be continuing, stating that MBIA
elects to make  payments of  Deficiency  Amounts as defined under the proviso to
clause (iii) of the definition of Deficiency  Amount in lieu of applying  clause
(iii) (without the proviso) of the definition of Deficiency Amount, which notice
shall  be given  to the  Trustee  not  less  than  ten  (10)  days  prior to the
Distribution  Date  established for payment of a Deficiency  Amount under clause
(iii) of the definition thereof.

<PAGE>

          Payment of amounts  hereunder  shall be made in immediately  available
funds (x) with respect to Deficiency  Amounts no later than 3:00 p.m.,  New York
City  time,  on the  later  of (a) the  relevant  Distribution  Date and (b) the
Business Day of  presentation to Wilmington  Trust Company,  as fiscal agent for
MBIA or any successor fiscal agent appointed by MBIA (the "FISCAL AGENT"),  of a
Notice of Nonpayment,  appropriately  completed and executed by the  Beneficiary
(if such Notice of  Nonpayment  is  received by 1:00 p.m. on such day),  and (y)
with respect to Avoided  Payments,  prior to 3:00 p.m. New York City time (i) in
the case of any Noteholder,  on the third Business Day following  MBIA's receipt
of the documents  required under clauses (x) through (z) of the third  paragraph
of  this  Policy  and  (ii)  in the  case  of  the  Liquidity  Provider,  on the
Distribution  Date  determined  as  provided  above and  PROVIDED  that MBIA has
received such documents as referred to in (i) above at least three Business Days
prior to such Distribution  Date. Any such documents received by MBIA after 1:00
p.m. New York City time on any Business Day or on any day that is not a Business
Day shall be deemed to have been received by MBIA prior to 1:00 p.m. on the next
succeeding  Business  Day.  All  payments  made by MBIA  hereunder in respect of
Avoided  Payments will be made with MBIA's own funds.  A Notice of Nonpayment or
Notice of Avoided Payment under this Policy may be presented to the Fiscal Agent
on any  Business Day by (a) delivery of the  original  Notice of  Nonpayment  or
Notice of Avoided Payment to the Fiscal Agent at its address set forth below, or
(b)  facsimile  transmission  of the original  Notice of Nonpayment or Notice of
Avoided Payment to the Fiscal Agent at its facsimile  number set forth below. If
presentation  is made by  facsimile  transmission,  the  Beneficiary  shall  (i)
simultaneously  confirm  transmission  by  telephone  to the Fiscal Agent at its
telephone  number set forth below,  and (ii) as soon as reasonably  practicable,
deliver the original  Notice of Nonpayment  or Notice of Avoided  Payment to the
Fiscal Agent at its address set forth below. Each Notice of Nonpayment or Notice
of  Avoided   Payment   shall  be  delivered  by  facsimile  and  mail  to  MBIA
simultaneously with its delivery to the Fiscal Agent.

          If any Notice of Nonpayment or Notice of Avoided  Payment  received by
the Fiscal  Agent is not in proper  form or is  otherwise  insufficient  for the
purpose  of  making  a claim  hereunder,  it shall be  deemed  not to have  been
received by the Fiscal Agent,  and MBIA or the Fiscal Agent, as the case may be,
shall  promptly so advise the  Beneficiary,  and the  Beneficiary  may submit an
amended Notice of Nonpayment or Notice of Avoided Payment, as the case may be.

          Payments  due  hereunder   unless  otherwise  stated  herein  will  be
disbursed by the Fiscal Agent to the Trustee for the benefit of the  Noteholders
or the Liquidity Provider by wire transfer of immediately available funds in the
amount of such  payment.  Other  than  amounts  payable  in  respect  of Avoided
Payments, MBIA's obligations under this Policy shall be discharged to the extent
funds to be applied to pay the Insured  Obligations under and in accordance with
the Indenture are received by the Trustee  (including funds disbursed by MBIA as
provided in this Policy and received by the  Trustee)  whether or not such funds
are properly  applied by the Trustee.  MBIA's  obligations  to make  payments in
respect of any Avoided  Payments shall be discharged to the extent such payments
are made by MBIA  hereunder  and are  received by the  Trustee,  the  applicable
Noteholder,    the   Liquidity   Provider   or   the   receiver,    conservator,
debtor-in-possession or trustee in bankruptcy as applicable, whether or not such
payments are properly applied by the Trustee.

<PAGE>

          The Fiscal Agent is the agent of MBIA only, and the Fiscal Agent shall
in no event be liable to  Noteholders  for any acts of the  Fiscal  Agent or any
failure  of MBIA to deposit or cause to be  deposited  sufficient  funds to make
payments due under this Policy.

          Any notice hereunder delivered to the Fiscal Agent or MBIA may be made
at the address  listed below for the Fiscal Agent or MBIA or such other  address
as MBIA shall specify in writing to the Trustee.

          The notice  address of the Fiscal Agent is Rodney Square  North,  1100
North Market Street, Wilmington, Delaware 19890-0001, Attention: Corporate Trust
Administration, Facsimile: (302) 636-4140, Telephone: (302) 651-1000.

          All   notices,    presentations,    transmissions,    deliveries   and
communications made by the Beneficiary to MBIA with respect to this Policy shall
specifically refer to the number of this Policy and shall be made to MBIA at:

               MBIA Insurance Corporation
               113 King Street
               Armonk, NY  10504
               Attention:    Insured Portfolio Management,
                             Structured Finance
               Telephone:    (914) 273-4949
               Facsimile:    (914) 765-3163

or such  other  address,  telephone  number  or  facsimile  number  as MBIA  may
designate to the  Beneficiary  in writing  from time to time.  Each such notice,
presentation,  transmission,  delivery and communication shall be effective only
upon actual receipt by MBIA.

          To the extent and in the manner specified in the Indenture, MBIA shall
be subrogated to the rights of each  Noteholder and the Liquidity  Provider,  as
the case may be,  to  receive  payments  under  the  Notes to the  extent of any
payment made by it hereunder.

          This Policy is neither  transferable  nor  assignable,  in whole or in
part,  except to a successor  Trustee duly  appointed  and  qualified  under the
Agreement.  Such transfer and assignment shall be effective upon receipt by MBIA
of a copy of the instrument effecting such transfer and assignment signed by the
transferor  and by the  transferee,  and a certificate,  properly  completed and
signed by the  transferor  and the  transferee,  in the form of EXHIBIT C hereto
(which shall be conclusive  evidence of such transfer and  assignment),  and, in
such case, the transferee instead of the transferor shall, without the necessity
of further  action,  be  entitled to all the  benefits of and rights  under this
Policy in the  transferor's  place,  PROVIDED  THAT, in such case, the Notice of
Nonpayment  presented  hereunder  shall be a certificate  of the  transferee and
shall be signed by one who states therein that he is a duly  authorized  officer
of the transferee.

          There shall be no  acceleration  payment due under this Policy  unless
such  acceleration  is at the  sole  option  of  MBIA,  in  accordance  with the
definition of Deficiency Amount in this Policy.

<PAGE>

          This Policy shall  terminate  and the  obligations  of MBIA  hereunder
shall be  discharged on the day (the  "TERMINATION  DATE") which is one year and
one day following the Distribution Date upon which the Outstanding Amount of the
Notes  is  paid  in  full.  The  foregoing  notwithstanding,  if  an  Insolvency
Proceeding  is existing  during the one year and one day period set forth above,
then this Policy and MBIA's  obligations  hereunder shall terminate on the later
of (i) the date of the  conclusion  or dismissal of such  Insolvency  Proceeding
without continuing jurisdiction by the court in such Insolvency Proceeding,  and
(ii) the date on which MBIA has made all payments  required to be made under the
terms of this Policy in respect of Avoided Payments.

          This Policy is not  covered by the  property/casualty  insurance  fund
specified in Article Seventy-Six of the New York State insurance law.

          This Policy sets forth in full the undertaking of MBIA, and, except as
expressly  provided in the Insurance  Agreement and the Agreement,  shall not be
modified,  altered or affected by any other  agreement or instrument,  including
any  modification or amendment to any other  agreement or instrument,  or by the
merger,  consolidation or dissolution of Continental or any other Person and may
not be  canceled  or  revoked  by MBIA  prior  to the time it is  terminated  in
accordance  with the  express  terms  hereof.  The Premium on this Policy is not
refundable for any reason.

          This Policy shall be returned to MBIA upon termination.

          THIS  POLICY  SHALL BE  CONSTRUED,  AND THE  OBLIGATIONS,  RIGHTS  AND
REMEDIES OF THE PARTIES  HEREUNDER  SHALL BE DETERMINED,  IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK,  WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES OR
THE APPLICATION OF THE LAWS OF ANY OTHER JURISDICTION.

<PAGE>

          IN WITNESS WHEREOF, MBIA has caused this Policy to be duly executed on
the date first written above.


                                                MBIA INSURANCE CORPORATION


                                                --------------------------------
                                                President


                                                --------------------------------
                                                Assistant Secretary

<PAGE>

                                                EXHIBIT A TO POLICY NUMBER 39753

                         NOTICE OF NONPAYMENT AND DEMAND
                         FOR PAYMENT OF INSURED AMOUNTS

                                                 Date:    [____________]

MBIA Insurance Corporation
113 King Street
Armonk, New York 10504
Attention:     Insured Portfolio Management,
               Structured Finance
Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, Delaware  19890-0001
Attention:     Corporate Trust Administration

                  Reference is made to Policy No. 39753,  dated December 6, 2002
(the "POLICY"),  issued by MBIA Insurance  Corporation  ("MBIA") with respect to
the  $200,000,000  Continental  Airlines  Floating  Rate Secured Notes due 2007.
Terms  capitalized  herein and not  otherwise  defined  shall have the  meanings
ascribed to such terms in or pursuant to the Policy unless the context otherwise
requires.

          The Trustee hereby certifies as follows:

               1. The Trustee is the trustee under the Agreement.

               2.  The  relevant   Distribution   Date  is  [__________].   Such
     Distribution Date is a [Scheduled  Payment Date, a Non-Performance  Payment
     Date, an Election Distribution Date or the Final Legal Maturity Date].

          [3.  Payment of accrued  and unpaid  interest on the Notes at the Debt
Rate  on  the  outstanding  principal  balance  of the  Notes  accrued  to  such
Distribution  Date which is a Scheduled  Payment Date as determined  pursuant to
paragraph  (i) of the  definition  of  "Deficiency  Amount"  in the Policy is an
amount equal to $____________.]

          [3. The amount  determined for payment to the Noteholders  pursuant to
paragraph (ii) of the  definition of  "Deficiency  Amount" in the Policy on such
Distribution Date in respect of the outstanding  principal balance of such Notes
and   accrued   and  unpaid   interest  at  the  Debt  Rate  for  the  Notes  is
$____________.]

          [3. The Trustee has not  received a timely  Policy  Provider  Election
pursuant to the Policy and the amount  determined for payment to the Noteholders
pursuant to paragraph  (iii) of the  definition  of  "Deficiency  Amount" in the
Policy on the  Distribution  Date  which is a  Non-Performance  Payment  Date in
respect of the outstanding principal balance of the Notes and accrued and unpaid
interest accrued thereon at the Debt Rate for the Notes is $________.]

<PAGE>

          [3.  The  Trustee  has  received  a timely  Policy  Provider  Election
pursuant to the Policy and the amount  determined for payment to the Noteholders
pursuant to the provision in paragraph (iii)(A) of the definition of "Deficiency
Amount"  in the  Policy  on the  Distribution  Date  which is a  Non-Performance
Payment  Date in  respect  of  accrued  interest  at the Debt Rate for the Notes
payable but not paid on the Notes is $_________.]

          [3.  The  Trustee  has  received  a timely  Policy  Provider  Election
pursuant  to the  Policy,  no Election  Distribution  Date has been  established
pursuant to the Policy,  no Distribution  Date has been established  pursuant to
clause (iv) of the definition of "Deficiency  Amount" and the amount  determined
for payment to the Noteholders  pursuant to paragraph (iii)(B) of the definition
of  "Deficiency  Amount"  in the  Policy  on the  Distribution  Date  which is a
Scheduled  Payment Date in respect of scheduled  interest (without regard to any
Acceleration  thereof)  payable  at the  Debt  Rate  for the  Notes  due on such
Distribution Date on the Notes is  $____________]  [and on the Distribution Date
which is the Final  Scheduled  Payment  Date in respect of  scheduled  principal
payable on the Notes on such Distribution Date is $_____________].]

          [3.  The  Trustee  has  received  a timely  Policy  Provider  Election
pursuant to the Policy,  the Distribution  Date related hereto is a Business Day
elected by MBIA upon 20 days prior notice and the amount  determined for payment
to the  Noteholders  pursuant to paragraph (iv) of the definition of "Deficiency
Amount"  in the  Policy in respect  of  outstanding  principal  on the Notes and
accrued and unpaid interest thereon at the Debt Rate is $__________.]

          [3. The amount  determined for payment to the Noteholders  pursuant to
paragraph  (v) of the  definition  of  "Deficiency  Amount" in the Policy on the
Distribution  Date  which is an  Election  Distribution  Date in  respect of the
outstanding  principal  balance of the Notes and  accrued  and  unpaid  interest
thereon at the Debt Rate for the Notes as of such Election  Distribution Date is
$___________.]

          [3. The amount  determined for payment to the Noteholders  pursuant to
paragraph  (vi) of the  definition of  "Deficiency  Amount" in the Policy on the
Distribution  Date which is the Final Legal  Maturity Date in respect of payment
in full of the Outstanding Amount of the Notes is $__________.]

          [3. The  amount  determined  for  payment  to the  Liquidity  Provider
pursuant to paragraph  (vii) of the  definition  of  "Deficiency  Amount" in the
Policy  on the  Distribution  Date  elected  by the  Trustee  on  behalf  of the
Liquidity Provider upon twenty (20) days prior notice to MBIA is $___________.]

          4. The sum of $_________________ is the Insured Amount that is due.

          5. The Trustee has not heretofore made a demand for the Insured Amount
in respect of such Distribution Date.

<PAGE>

          6. The Trustee hereby requests  payment of such Insured Amount that is
due for payment be made by MBIA under the Policy and directs that payment  under
the Policy be made to the following  account by bank wire transfer of federal or
other immediately available funds in accordance with the terms of the Policy to:

               [_____]
               ABA #:  [_____]
               Acct #: [_____]
               FBO:    [_____]
               [Policy Account number]

          7. The Trustee  hereby agrees that,  following  receipt of the Insured
Amount from MBIA,  it shall (a) cause such funds to be  deposited  in the Policy
Account  and not permit  such funds to be held in any other  account,  (b) cause
such funds paid by MBIA pursuant to paragraphs (i) through (vi) of the Policy to
be paid to the  Trustee  for  distribution  to the  Noteholders  in  payment  of
interest on, or principal of, the Notes (as applicable) and not apply such funds
for any other  purpose,  (c) cause such funds paid by MBIA pursuant to paragraph
(vii) of the Policy to be paid to the Liquidity  Provider for  reimbursement  of
payments  made by the  Liquidity  Provider  with  respect  to the  Notes and (d)
maintain an accurate  record of such  payments with respect to the Notes and the
corresponding claim on the Policy and proceeds thereof.


                                       WILMINGTON TRUST COMPANY,
                                         as Trustee



                                       By:
                                             -----------------------------------
                                       Name:
                                             -----------------------------------
                                       Title:
                                             -----------------------------------

<PAGE>

                                                EXHIBIT B TO POLICY NUMBER 39753

                      NOTICE OF AVOIDED PAYMENT AND DEMAND
                         FOR PAYMENT OF AVOIDED PAYMENTS

                                                 Date:    [____________]

MBIA Insurance Corporation
113 King Street
Armonk, New York 10504
Attention:     Insured Portfolio Management,
               Structured Finance

Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, Delaware  19890-0001
Attention:    Corporate Trust Administration

          Reference  is made to Policy No.  39753,  dated  December 6, 2002 (the
"POLICY"),  issued by MBIA  Insurance  Corporation  ("MBIA") with respect to the
$200,000,000  Continental  Airlines  Floating Rate Secured Notes due 2007. Terms
capitalized herein and not otherwise defined shall have the meanings ascribed to
such terms in or pursuant to the Policy unless the context otherwise requires.

          The   [Noteholder/Trustee/Liquidity   Provider]  hereby  certifies  as
follows:

          1. The Trustee is the trustee under the Agreement.

          [2. The Trustee has established  ______________ as a Distribution Date
pursuant to the Agreement for amounts claimed hereunder.]

          3. A Final Order  providing for the recovery of an Avoided  Payment of
$________________ has been issued.

          4.  $_________________ of the amount set forth in item No. 3 above has
been paid by the [Noteholder/Trustee/Liquidity  Provider] and $_________________
is required to be paid to the  receiver,  conservator,  debtor-in-possession  or
trustee in bankruptcy named in the Final Order.

          5. The [Noteholder/Trustee/Liquidity Provider] has not heretofore made
a demand for such Avoided Payment.

          6. The  [Noteholder/Trustee/Liquidity  Provider] has delivered to MBIA
or has attached  hereto all documents  required by the Policy to be delivered in
connection with such Avoided Payment.

<PAGE>

          [7.  The   [Noteholder/Trustee]   hereby   requests  that  payment  of
$______________  of such Avoided  Payment be made to the receiver,  conservator,
debtor-in-possession  or  trustee  in  bankruptcy  named in the Final  Order and
$________________  of such Avoided Payment be paid to the [Noteholder]  [Trustee
for distribution to the Noteholder],  in each case, by MBIA under the Policy and
directs that payment under the Policy be made to the  following  account by bank
wire transfer of federal or other immediately available funds in accordance with
the terms of the Policy to:

          For  the   portion   to  be  paid   to  the   receiver,   conservator,
debtor-in-possession or trustee, to ________________:

               ABA #:  [_____]
               Acct #: [_____]
               FBO:    [_____]

          [relevant account number]

          For the portion to be paid to the [Noteholder/Trustee]:

               ABA #:  [_____]
               Acct #: [_____]
               FBO:    [_____]

          [Policy Account Number]]


     [7.  The Liquidity  Provider hereby requests that payment of  $____________
          of such  Avoided  Payment be made to the  Liquidity  Provider  by MBIA
          under the Policy and directs that payment  under the Policy be made to
          the  following  account  by bank wire  transfer  of  federal  or other
          immediately available funds in accordance with the terms of the Policy
          to:

               [____________]:

               ABA #     [  ]
               Acct #    [  ]
               FBO:      [  ]

     [relevant account number]]

<PAGE>

                                       [Name of Trustee]


                                       By:
                                              ----------------------------------
                                       Name:
                                       Title: (Officer)

<PAGE>

                                                EXHIBIT C TO POLICY NUMBER 39753

MBIA Insurance Corporation
113 King Street
Armonk, New York 10504
Attention:     Insured Portfolio Management, Structured Finance

Dear Sirs:

          Reference is made to that certain Policy, Number 39753, dated December
6, 2002 (the "POLICY"),  which has been issued by MBIA Insurance  Corporation in
favor of the  Trustee  with  respect to the  $200,000,000  Continental  Airlines
Floating Rate Secured Notes due 2007.

          The undersigned [Name of Transferor] has transferred and assigned (and
hereby  confirms to you said transfer and  assignment)  all of its rights in and
under said Policy to [Name of Transferee] and confirms that [Name of Transferor]
no longer has any rights under or interest in said Policy.

          Transferor  and  Transferee  have indicated on the face of said Policy
that it has been transferred and assigned to Transferee.

          Transferee  hereby  certifies that it is a duly authorized  transferee
under the terms of said Policy and is accordingly entitled, upon presentation of
the document(s) called for therein, to receive payment thereunder.



                                                --------------------------------
                                                [Name of Transferor]



                                                  By:
                                                     ---------------------------
                                                  [Name and Title of Authorized
                                                  Officer of Transferor]

<PAGE>

                                                EXHIBIT D TO POLICY NUMBER 39753

                               FORM OF ASSIGNMENT

          Reference is made to that certain Policy No. 39753,  dated December 6,
2002 (the "POLICY"),  issued by MBIA Insurance  Corporation ("MBIA") relating to
the  $200,000,000  Continental  Airlines  Floating  Rate Secured Notes due 2007.
Unless otherwise defined herein, capitalized terms used in this Assignment shall
have the meanings  assigned  thereto in the Policy as  incorporated by reference
therein.  In connection  with the Avoided  Payment of  [$_________]  paid by the
undersigned (the "[NOTEHOLDER/BENEFICIARY/Liquidity  Provider]") on [______] and
the payment by MBIA in respect of such Avoided  Payment  pursuant to the Policy,
the   [Noteholder/Beneficiary/Liquidity   Provider]   hereby   irrevocably   and
unconditionally,   without  recourse,  representation  or  warranty  (except  as
provided below), sells, assigns, transfers,  conveys and delivers to MBIA all of
such   [Noteholder's/Beneficiary's/Liquidity   Provider's]  rights,   title  and
interest  in and  to any  rights  or  claims,  whether  accrued,  contingent  or
otherwise, which the [Noteholder/Beneficiary/Liquidity  Provider] now has or may
hereafter  acquire,  against  any  person  relating  to,  arising  out  of or in
connection  with such  Avoided  Payment.  The  [Noteholder/Beneficiary/Liquidity
Provider] represents and warrants that such claims and rights are free and clear
of   any    lien    or    encumbrance    created    or    incurred    by    such
[Noteholder/Beneficiary/Liquidity Provider].<F1>


                                     [Noteholder/Beneficiary/Liquidity Provider]
                                     WILMINGTON TRUST COMPANY,
                                     as Trustee



                                     By:
                                        -----------------------------------
                                     Name:
                                     Title:


--------
<F1>
In the event that the terms of this form of assignment are reasonably determined
to be  insufficient  solely as a result of a change of law or  applicable  rules
after    the   date   of   the    Policy    to    fully    vest   all   of   the
[Noteholder's/Beneficiary's/Liquidity  Provider's]  right, title and interest in
such rights and claims, the [Noteholder/Beneficiary/Liquidity Provider] and MBIA
shall  agree on such  other  form as is  reasonably  necessary  to  effect  such
assignment,  which  assignment  shall be  without  recourse,  representation  or
warranty except as provided above.