Document:

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                             NOTE PURCHASE AGREEMENT

                           Dated as of March 15, 2000

                                      Among

                           CONTINENTAL AIRLINES, INC.,

                            WILMINGTON TRUST COMPANY,
                    as Pass Through Trustee under each of the
                          Pass Through Trust Agreements

                            WILMINGTON TRUST COMPANY,
                             as Subordination Agent

                  FIRST SECURITY BANK, NATIONAL ASSOCIATION,
                                 as Escrow Agent

                                       and

                            WILMINGTON TRUST COMPANY,
                                 as Paying Agent

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<PAGE>

                        INDEX TO NOTE PURCHASE AGREEMENT

                                                                         Page

SECTION 1.     Financing of New Aircraft...............................    3
SECTION 2.     Conditions Precedent....................................    8
SECTION 3.     Representations and Warranties..........................    8
SECTION 4.     Covenants...............................................    13
SECTION 5.     Notices.................................................    14
SECTION 6.     Expenses................................................    14
SECTION 7.     Further Assurances......................................    15
SECTION 8.     Miscellaneous...........................................    15
SECTION 9.     Governing Law...........................................    16

                                    SCHEDULES
                                    ---------

Schedule I        New Aircraft and Scheduled Delivery Months
Schedule II       Trust Supplements
Schedule III      Deposit Agreements
Schedule IV       Escrow and Paying Agent Agreements
Schedule V        Mandatory Document Terms
Schedule VI       Mandatory Economic Terms
Schedule VII      Aggregate Amortization Schedule

                                      ANNEX
                                      -----

Annex A           Definitions

                                    EXHIBITS
                                    --------

Exhibit A-1       Form of Leased Aircraft Participation Agreement
Exhibit A-2       Form of Lease
Exhibit A-3       Form of Leased Aircraft Indenture
Exhibit A-4       Form of Aircraft Purchase Agreement Assignment
Exhibit A-5       Form of Leased Aircraft Trust Agreement
Exhibit A-6       Form of Special Indenture
Exhibit B         Form of Delivery Notice
Exhibit C-1       Form of Owned Aircraft Participation Agreement
Exhibit C-2       Form of Owned Aircraft Indenture
Exhibit D         Form of Special Addition to Participation Agreement
Exhibit E         Special Revisions to Section 6.2 of the Participation
                  Agreement
Exhibit F         Additional Subordination Provision for Series D Equipment
                  Notes

<PAGE>

                             NOTE PURCHASE AGREEMENT

            This NOTE  PURCHASE  AGREEMENT,  dated as of March 15,  2000,  among
(i)CONTINENTAL   AIRLINES,   INC.,  a  Delaware   corporation  (the  "COMPANY"),
(ii)WILMINGTON TRUST COMPANY ("WTC"), a Delaware banking corporation, not in its
individual capacity except as otherwise expressly provided herein, but solely as
trustee (in such capacity  together with its  successors in such  capacity,  the
"PASS  THROUGH  TRUSTEE")  under each of the five  separate  Pass Through  Trust
Agreements  (as defined  below),  (iii)  WILMINGTON  TRUST  COMPANY,  a Delaware
banking  corporation,  as  subordination  agent and  trustee  (in such  capacity
together with its successors in such capacity,  the "SUBORDINATION AGENT") under
the  Intercreditor  Agreement  (as  defined  below),  (iv)FIRST  SECURITY  BANK,
NATIONAL ASSOCIATION,  a national banking association,  as Escrow Agent (in such
capacity  together with its  successors in such capacity,  the "ESCROW  AGENT"),
under each of the Escrow and Paying Agent  Agreements (as defined below) and (v)
WILMINGTON TRUST COMPANY,  a Delaware banking  corporation,  as Paying Agent (in
such capacity together with its successors in such capacity, the "PAYING AGENT")
under each of the Escrow and Paying Agent Agreements.

                             W I T N E S S E T H:
                             --------------------

            WHEREAS,  capitalized  terms used but not defined  herein shall have
the meanings ascribed to such terms in Annex A hereto;

            WHEREAS,  the Company has obtained commitments from the Manufacturer
pursuant to the Aircraft Purchase Agreements for the delivery of the 23 aircraft
listed in Schedule I hereto (together with any aircraft  substituted therefor in
accordance with an Aircraft  Purchase  Agreement prior to the delivery  thereof,
the "ELIGIBLE  AIRCRAFT"),  and the Company  wishes to finance  pursuant to this
Agreement a portion of the  purchase  price of  fourteen  of the sixteen  Boeing
737-824 aircraft, three Boeing 757-224 aircraft and four Boeing 767-424 aircraft
included in the Eligible Aircraft (such aircraft to be financed  hereunder,  the
"NEW AIRCRAFT");

            WHEREAS, pursuant to the Basic Pass Through Trust Agreement and each
of the Trust Supplements set forth in Schedule II hereto,  and concurrently with
the  execution  and  delivery  of  this  Agreement,   separate   grantor  trusts
(collectively,  the "PASS  THROUGH  TRUSTS" and,  individually,  a "PASS THROUGH
TRUST") have been created to facilitate certain of the transactions contemplated
hereby,  including,  without  limitation,  the issuance and sale of pass through

<PAGE>

certificates pursuant thereto (collectively,  the "CERTIFICATES") to provide for
a portion of the financing of the New Aircraft;

            WHEREAS,  the Company has entered  into the  Underwriting  Agreement
dated  as of March 1,  2000  (the  "UNDERWRITING  AGREEMENT")  with the  several
underwriters (the "UNDERWRITERS") named therein, which provides that the Company
will cause each Pass Through  Trustee to issue and sell the  Certificates to the
Underwriters;

            WHEREAS,  concurrently  with  the  execution  and  delivery  of this
Agreement,  (i) the Escrow  Agents and the  Depositary  entered into the Deposit
Agreements set forth in Schedule III hereto (the "DEPOSIT  AGREEMENTS")  whereby
the applicable  Escrow Agent agreed to direct the  Underwriters  to make certain
deposits  referred to therein on the Issuance Date (the "INITIAL  DEPOSITS") and
to permit the applicable Pass Through  Trustee to make additional  deposits from
time to time  thereafter  (the Initial  Deposits  together with such  additional
deposits  are  collectively  referred  to as the  "DEPOSITS")  and (ii) the Pass
Through  Trustees,  the  Underwriters,  the Paying  Agents and the Escrow Agents
entered  into the Escrow and Paying  Agent  Agreements  set forth in Schedule IV
hereto (the "ESCROW AND PAYING AGENT AGREEMENTS")  whereby,  among other things,
(a) the  Underwriters  agreed to  deliver  an amount  equal to the amount of the
Initial Deposits to the Depositary on behalf of the applicable  Escrow Agent and
(b) the applicable Escrow Agent, upon the Depositary  receiving such amount, has
agreed to deliver escrow receipts to be affixed to each Certificate;

            WHEREAS,  prior to the financing of each New  Aircraft,  the Company
will  determine  whether to enter into a leveraged  lease  transaction as lessee
with respect to such New Aircraft (a "LEASED  AIRCRAFT") or to purchase as owner
such New Aircraft (an "OWNED AIRCRAFT") and which series of Equipment Notes will
be issued with  respect to such New  Aircraft,  and the Company will give to the
Pass  Through  Trustee a  Delivery  Notice (as  defined  below)  specifying  its
election;

            WHEREAS,  upon  receipt of a Delivery  Notice with  respect to a New
Aircraft,  subject to the terms and conditions of this Agreement, the applicable
Pass  Through  Trustees  will enter  into the  applicable  Financing  Agreements
relating to such New Aircraft;

            WHEREAS,  upon the financing of each New Aircraft,  each  applicable
Pass Through Trustee will fund its purchase of Equipment Notes with the proceeds
of one or more  Deposits  withdrawn  by the  applicable  Escrow  Agent under the
related  Deposit  Agreement  bearing the same interest rate as the  Certificates

<PAGE>

issued by such Pass Through Trust (or, if financed on the Issuance Date,  with a
portion of the proceeds from the offering of the Certificates); and

            WHEREAS,  concurrently  with  the  execution  and  delivery  of this
Agreement,  (i) Credit Suisse First Boston,  New York branch, and Morgan Stanley
Capital  Services Inc.  (each a "LIQUIDITY  PROVIDER"),  have,  taken  together,
entered into five separate revolving credit agreements, one each for the benefit
of the  Certificateholders  of each Pass  Through  Trust,  in each case with the
Subordination  Agent,  as agent for the Pass  Through  Trustee on behalf of each
such Pass Through Trust (each such revolving credit agreement with the Liquidity
Provider,  a  "LIQUIDITY  FACILITY")  and (ii) the Pass  Through  Trustee,  each
Liquidity   Provider  and  the   Subordination   Agent  have  entered  into  the
Intercreditor  Agreement,  dated  as of  the  date  hereof  (the  "INTERCREDITOR
AGREEMENT");

            NOW,  THEREFORE,  in consideration of the foregoing premises and the
mutual  agreements  herein contained and other good and valuable  consideration,
the receipt and adequacy of which are hereby  acknowledged,  the parties  hereto
agree as follows:

            SECTION 1. FINANCING OF NEW AIRCRAFT.  (a) The Company confirms that
it has entered  into the  Aircraft  Purchase  Agreements  with the  Manufacturer
pursuant to which the Company has agreed to purchase,  and the  Manufacturer has
agreed to deliver,  the Eligible  Aircraft in the months specified in Schedule I
hereto,  all on and subject to terms and conditions  specified in the applicable
Aircraft Purchase  Agreement.  The Company agrees to finance the New Aircraft in
the manner  provided  herein,  all on and  subject  to the terms and  conditions
hereof and of the relevant Financing Agreements.

            (b) In furtherance of the foregoing,  the Company agrees to give the
parties hereto, the Depositary and each of the Rating Agencies not less than two
Business  Days' prior  notice  substantially  in the form of Exhibit B hereto (a
"DELIVERY  NOTICE") of the  scheduled  delivery date (or, in the case of the New
Aircraft  delivered  in  February  2000,  the  scheduled  financing  date)  (the
"SCHEDULED  DELIVERY  DATE") (or, in the case of a  substitute  Delivery  Notice
under Section 1(e) or (f) hereof, one Business Day's prior notice) in respect of
each New Aircraft under the applicable Aircraft Purchase Agreement, which notice
shall:

            (i)  specify  whether  the  Company  has  elected  to treat such New
      Aircraft as a Leased Aircraft or an Owned Aircraft;

<PAGE>

            (ii) specify the Scheduled Delivery Date of such New Aircraft (which
      shall be a Business Day before the Cut-off Date and, except as provided in
      Section 1(f) hereof,  the date (the "FUNDING DATE") on which the financing
      therefor in the manner provided herein shall be consummated);

            (iii) instruct each Pass Through Trustee being requested to purchase
      Equipment  Notes pursuant to such Delivery  Notice (the  "APPLICABLE  PASS
      THROUGH  TRUSTEES")  to instruct  the  relevant  Escrow Agent to provide a
      Notice of  Purchase  Withdrawal  to the  Depositary  with  respect  to the
      Equipment  Notes to be issued in connection with the financing of such New
      Aircraft (except in the case of any such financing on the Issuance Date);

            (iv) instruct each Applicable Pass Through Trustee to enter into the
      Participation  Agreement included in the Financing Agreements with respect
      to such  Aircraft in such form and at such a time on or before the Funding
      Date  specified  in such  Delivery  Notice and to perform its  obligations
      thereunder;

            (v)  specify  the  aggregate  principal  amount  of each  series  of
      Equipment  Notes,  if any, to be issued,  and purchased by the  Applicable
      Pass  Through  Trustees,  in  connection  with the  financing  of such New
      Aircraft  scheduled  to be  delivered on such Funding Date (which shall in
      all respects comply with the Mandatory Economic Terms); and

            (vi) if such New Aircraft is to be a Leased  Aircraft,  certify that
      the related Owner  Participant  (A) is not an Affiliate of the Company and
      (B) based on the representations of such Owner Participant,  is either (1)
      a Qualified  Owner  Participant or (2) any other person the obligations of
      which under the Owner Participant Agreements (as defined in the applicable
      Participation Agreement) are guaranteed by a Qualified Owner Participant.

Notwithstanding the foregoing, in the event the Issuance Date coincides with the
Scheduled  Delivery  Date of any  Aircraft to be financed  pursuant to the terms
hereof,  the Delivery  Notice therefor may be delivered to the parties hereto on
such Scheduled Delivery Date.

            (c) Upon receipt of a Delivery  Notice,  the Applicable Pass Through
Trustees  shall,  and shall  cause the  Subordination  Agent to,  enter into and
perform their obligations under the  Participation  Agreement  specified in such
Delivery Notice,  PROVIDED that such Participation Agreement and the other Lease
Financing  Agreements or Owner Financing  Agreements to be entered into pursuant

<PAGE>

to such Participation  Agreement shall be in the forms thereof annexed hereto in
all material  respects with such changes therein as shall have been requested by
the related Owner Participant (in the case of Lease Financing  Agreements) or by
the initial  purchasers of the Series D Equipment  Notes or Class D Pass Through
Certificates, agreed to by the Company and, if modified in any material respect,
as to which Rating Agency Confirmation shall have been obtained from each Rating
Agency by the Company (to be  delivered  by the Company to the  Applicable  Pass
Through  Trustees on or before the relevant  Funding Date,  it being  understood
that if Rating Agency  Confirmation shall have been received with respect to any
Financing  Agreements and such Financing  Agreements are utilized for subsequent
New  Aircraft  (or  Substitute  Aircraft)  without  material  modifications,  no
additional Rating Agency  Confirmation  shall be required);  PROVIDED,  HOWEVER,
that the relevant Financing  Agreements as executed and delivered shall not vary
the Mandatory  Economic  Terms and shall contain the Mandatory  Document  Terms.
Notwithstanding  the foregoing,  (i) if The Boeing  Company or General  Electric
Company,  or any of their respective  Affiliates,  is the Owner Participant with
respect to any Leased Aircraft, the Leased Aircraft  Participation  Agreement to
be entered  into  pursuant to the  Delivery  Notice with  respect to such Leased
Aircraft  may be modified,  if agreed to by the  Company,  from the form annexed
hereto (A) to add a Section 16  thereto  substantially  in the form of Exhibit D
hereto  and (B) in the  case of The  Boeing  Company  or any of its  Affiliates,
Section  6.2 may be changed as set forth in  Exhibit E hereto,  and such  Leased
Aircraft  Participation  Agreement,  as so  modified,  shall be deemed (1) to be
substantially  in the form  thereof  annexed  hereto  and (2) by  virtue of such
modification not to be inconsistent  with the Mandatory  Document Terms, (ii) if
any Financing  Agreement  annexed  hereto shall not have been reviewed by either
Rating  Agency prior to the  Issuance  Date,  then,  prior to the use thereof in
connection  with the  financing of any  Aircraft  hereunder,  the Company  shall
obtain from each Rating  Agency a  confirmation  that the use of such  Financing
Agreement  would not  result in (A) a  reduction  of the rating for any Class of
Certificates below the then current rating for such Class of Certificates or (B)
a withdrawal or suspension of the rating of any Class of Certificates, and (iii)
an Indenture may be modified to the extent required pursuant to Section 4(a)(vi)
of this  Agreement.  The Company shall pay the reasonable  costs and expenses of
the  Rating  Agencies  in  connection  with  obtaining  any such  Rating  Agency
Confirmation. With respect to each New Aircraft, the Company shall cause WTC (or
such other person that meets the eligibility requirements to act as loan trustee
under the  Leased  Aircraft  Indenture,  Owned  Aircraft  Indenture  or  Special
Indenture) to execute as Loan Trustee the Financing  Agreements relating to such
Aircraft  to which  such  Loan  Trustee  is  intended  to be a party,  and shall

<PAGE>

concurrently therewith execute such Financing Agreements to which the Company is
intended to be a party and perform its respective obligations  thereunder.  Upon
the request of either  Rating  Agency,  the Company shall deliver or cause to be
delivered  to each  Rating  Agency a true and  complete  copy of each  Financing
Agreement  relating to the  financing of each New Aircraft  together with a true
and  complete  set of  the  closing  documentation  (including  legal  opinions)
delivered  to the related  Loan  Trustee,  Subordination  Agent and Pass Through
Trustee under the related Participation Agreement.

            (d)   [Intentionally omitted.]

            (e) If after giving any Delivery  Notice,  there shall be a delay in
the  delivery  of  the  Eligible  Aircraft  referred  to  therein,  or if on the
Scheduled  Delivery Date of the Eligible  Aircraft the financing  thereof in the
manner  contemplated  hereby shall not be consummated for whatever  reason,  the
Company shall give the parties hereto prompt notice thereof.  Concurrently  with
the giving of such notice of  postponement  or  subsequently,  the Company shall
give the parties  hereto a substitute  Delivery  Notice  specifying  the date to
which  delivery and related  financing of such  Eligible  Aircraft or of another
Eligible  Aircraft of the same type in lieu thereof shall have been re-scheduled
(which  shall be a  Business  Day before  the  Cut-off  Date on which the Escrow
Agents  shall be  entitled to withdraw  one or more  Deposits  under each of the
applicable  Deposit Agreements to enable each Applicable Pass Through Trustee to
fund its  purchase of the related  Equipment  Notes).  Upon  receipt of any such
notice of  postponement,  each Applicable Pass Through Trustee shall comply with
its  obligations  under  Section  5.01  of  each of the  Trust  Supplements  and
thereafter  the  financing  of such  Eligible  Aircraft,  as  specified  in such
substitute Delivery Notice,  shall take place on the re-scheduled  Delivery Date
therefor  (all on and  subject  to the  terms  and  conditions  of the  relevant
Financing  Agreements  or other  financing  agreements  in the case of a Special
Structure) unless further postponed as provided herein.

            (f) Anything in this Section 1 to the contrary notwithstanding,  the
Company  shall  have the right at any time on or before the  Scheduled  Delivery
Date of any New  Aircraft,  and  subsequent  to its  giving  a  Delivery  Notice
therefor,  to postpone the Scheduled Delivery Date of such New Aircraft so as to
enable the Company to change its election to treat such New Aircraft as a Leased
Aircraft or an Owned  Aircraft  by written  notice of such  postponement  to the
other parties hereto.  The Company shall  subsequently give the parties hereto a
substitute  Delivery Notice complying with the provisions of Section 1(b) hereof
and specifying the new Funding Date for such postponed New Aircraft (which shall
be a Business  Day  occurring  before the  Cut-off  Date and on which the Escrow

<PAGE>

Agents  shall be  entitled  to withdraw  Deposits  under each of the  applicable
Deposit Agreements  sufficient to enable each Applicable Pass Through Trustee to
fund its purchase of the related  Equipment  Notes).  In  addition,  the Company
shall  have the  further  right,  anything  in this  Section  1 to the  contrary
notwithstanding,  to accept  delivery  of a New  Aircraft  under the  applicable
Aircraft  Purchase  Agreement on the Delivery  Date  thereof by  utilization  of
bridge  financing of such New Aircraft and promptly  thereafter give the parties
hereto a Delivery Notice  specifying a Funding Date not later than 30 days after
the  Delivery  Date of such New  Aircraft and no later than the Cut-off Date and
otherwise  complying with the provisions of Section 1(b) hereof. All other terms
and conditions of this Note Purchase  Agreement  shall apply to the financing of
any such New Aircraft on the  re-scheduled  Funding Date therefor except (i) the
re-scheduled Funding Date shall be deemed the Delivery Date of such New Aircraft
for all  purposes of this  Section 1 and (ii) the related  Financing  Agreements
shall be amended to reflect the  original  delivery of such New  Aircraft to the
Company.

            (g) If the  Scheduled  Delivery  Date for any  Eligible  Aircraft is
delayed  (a)  more  than 30 days  beyond  the last day of the  month  set  forth
opposite such Eligible Aircraft under the heading "Scheduled Delivery Months" in
Schedule I hereto or (b) beyond  March 31,  2001,  the Company may  identify for
delivery a substitute  aircraft  therefor  meeting the  following  conditions (a
"SUBSTITUTE  AIRCRAFT"):  (i) a Substitute  Aircraft  must be a Boeing  737-800,
757-200 or 767-400 aircraft manufactured after the date of this Agreement,  (ii)
one  or  more  Substitute  Aircraft  of  the  same  or  different  types  may be
substituted for one or more Eligible  Aircraft of the same or different types so
long as  after  giving  effect  thereto  such  substitution  does  not  vary the
Mandatory  Economic  Terms and (iii) the Company  shall be  obligated  to obtain
Rating  Agency  Confirmation  in  respect  of the  replacement  of any  Eligible
Aircraft by Substitute  Aircraft.  Upon the  satisfaction  of the conditions set
forth above with respect to a Substitute  Aircraft,  the Eligible Aircraft to be
replaced  shall  cease  to be  subject  to this  Agreement  and all  rights  and
obligations of the parties hereto concerning such Eligible Aircraft shall cease,
and such Substitute Aircraft shall become and thereafter be subject to the terms
and conditions of this Agreement to the same extent as such Eligible Aircraft.

            (h) The Company  shall have no liability for the failure of the Pass
Through Trustees to purchase Equipment Notes with respect to any New Aircraft or
Substitute Aircraft.

            (i) The parties agree that if, in connection  with the delivery of a
New Aircraft or Substitute Aircraft,  any Owner Participant who is to be a party
to any Lease  Financing  Agreement shall not be a "Citizen of the United States"

<PAGE>

within the meaning of Section 40102(a)(15) of the Act, then the applicable Lease
Financing  Agreements shall be modified,  consistent with the Mandatory Document
Terms,  to require such Owner  Participant to enter into a voting trust,  voting
powers or similar arrangement  satisfactory to the Company that (A) enables such
New Aircraft or  Substitute  Aircraft to be  registered in the United States and
(B) complies with the FAA regulations issued under the Act applicable thereto.

            (j)  Anything  herein to the contrary  notwithstanding,  the Company
shall not have the right, and shall not be entitled,  at any time to request the
issuance  of  Equipment  Notes of any series to any Pass  Through  Trustee in an
aggregate  principal  amount  in  excess  of the  amount  of the  Deposits  then
available for  withdrawal  by the Escrow Agent under and in accordance  with the
provisions of the related Deposit Agreement.

            SECTION 2. CONDITIONS PRECEDENT.  The obligation of the Pass Through
Trustees to enter into, and to cause the Subordination  Agent to enter into, any
Participation Agreement as directed pursuant to a Delivery Notice and to perform
its  obligations   thereunder  is  subject  to  satisfaction  of  the  following
conditions:

            (a)   no Triggering Event shall have occurred;

            (b) the Company shall have delivered a certificate to each such Pass
      Through  Trustee  and  each  Liquidity  Provider  stating  that  (i)  such
      Participation  Agreement and the other Financing  Agreements to be entered
      into  pursuant to such  Participation  Agreement do not vary the Mandatory
      Economic  Terms and contain the  Mandatory  Document  Terms,  and (ii) any
      substantive  modification  of such Financing  Agreements from the forms of
      Financing  Agreements  attached to this  Agreement do not  materially  and
      adversely affect the  Certificateholders,  and such certification shall be
      true and correct.

            Anything herein to the contrary  notwithstanding,  the obligation of
each Pass Through  Trustee to purchase  Equipment  Notes shall  terminate on the
Cut-off Date.

            SECTION  3.   REPRESENTATIONS   AND  WARRANTIES.   (a)  The  Company
represents and warrants that:

                  (i) the Company is duly incorporated,  validly existing and in
            good  standing  under  the laws of the  State of  Delaware  and is a
            "citizen of the United States" as defined in Section 40102(a)(15) of

<PAGE>

            the Act, and has the full corporate power, authority and legal right
            under the laws of the State of Delaware to execute and deliver  this
            Agreement and each  Financing  Agreement to which it will be a party
            and to carry out the obligations of the Company under this Agreement
            and each Financing Agreement to which it will be a party;

                  (ii)  the  execution  and  delivery  by the  Company  of  this
            Agreement  and the  performance  by the  Company of its  obligations
            under this  Agreement  have been duly  authorized by the Company and
            will not violate its Certificate of  Incorporation or by-laws or the
            provisions of any indenture,  mortgage,  contract or other agreement
            to which it is a party or by which it is bound; and

                  (iii) this Agreement  constitutes the legal, valid and binding
            obligation of the Company, enforceable against it in accordance with
            its  terms,  except  as  the  same  may  be  limited  by  applicable
            bankruptcy, insolvency,  reorganization,  moratorium or similar laws
            affecting   the  rights  of  creditors   generally  and  by  general
            principles of equity,  whether  considered in a proceeding at law or
            in equity.

            (b)   WTC represents and warrants that:

                  (i) WTC is duly  incorporated,  validly  existing  and in good
            standing  under the laws of the State of Delaware  and is a "citizen
            of the United States" as defined in Section 40102(a)(15) of the Act,
            and has the full  corporate  power,  authority and legal right under
            the laws of the State of Delaware and the United  States  pertaining
            to its banking,  trust and  fiduciary  powers to execute and deliver
            this  Agreement and each  Financing  Agreement to which it will be a
            party and to carry out the  obligations  of WTC, in its  capacity as
            Subordination  Agent,  Pass Through  Trustee or Paying Agent, as the
            case may be, under this  Agreement and each  Financing  Agreement to
            which it will be a party;

                  (ii) the  execution  and  delivery by WTC, in its  capacity as
            Subordination  Agent,  Pass Through  Trustee or Paying Agent, as the
            case may be, of this  Agreement and the  performance  by WTC, in its
            capacity as  Subordination  Agent,  Pass  Through  Trustee or Paying
            Agent, as the case may be, of its  obligations  under this Agreement
            have been duly  authorized by WTC, in its capacity as  Subordination
            Agent, Pass Through Trustee or Paying Agent, as the case may be, and

<PAGE>

            will not  violate  its  articles  of  association  or by-laws or the
            provisions of any indenture,  mortgage,  contract or other agreement
            to which it is a party or by which it is bound; and

                  (iii) this Agreement  constitutes the legal, valid and binding
            obligations  of WTC, in its capacity as  Subordination  Agent,  Pass
            Through  Trustee or Paying  Agent,  as the case may be,  enforceable
            against it in accordance  with its terms,  except as the same may be
            limited  by  applicable  bankruptcy,   insolvency,   reorganization,
            moratorium  or  similar  laws  affecting  the  rights  of  creditors
            generally and by general principles of equity, whether considered in
            a proceeding at law or in equity.

            (c) The Pass Through  Trustee  hereby  confirms to each of the other
parties hereto that its representations and warranties set forth in Section 7.15
of the Basic  Pass  Through  Trust  Agreement  and  Section  5.04 of each  Trust
Supplement are true and correct as of the date hereof.

            (d) The Subordination Agent represents and warrants that:

                  (i) the  Subordination  Agent  is duly  incorporated,  validly
            existing  and in  good  standing  under  the  laws of the  State  of
            Delaware,  and has the full  corporate  power,  authority  and legal
            right under the laws of the State of Delaware and the United  States
            pertaining to its banking, trust and fiduciary powers to execute and
            deliver this Agreement and each  Financing  Agreement to which it is
            or  will  be a party  and to  perform  its  obligations  under  this
            Agreement and each  Financing  Agreement to which it is or will be a
            party;

                  (ii) this  Agreement  has been duly  authorized,  executed and
            delivered by the Subordination Agent; this Agreement constitutes the
            legal,  valid and binding  obligations  of the  Subordination  Agent
            enforceable  against it in accordance with its terms,  except as the
            same  may  be  limited   by   applicable   bankruptcy,   insolvency,
            reorganization,  moratorium or similar laws  affecting the rights of
            creditors  generally and by general  principles  of equity,  whether
            considered in a proceeding at law or in equity;

                  (iii) none of the execution,  delivery and  performance by the
            Subordination  Agent of this Agreement  contravenes any law, rule or

<PAGE>

            regulation   of  the  State  of  Delaware   or  any  United   States
            governmental   authority  or  agency  regulating  the  Subordination
            Agent's banking,  trust or fiduciary powers or any judgment or order
            applicable  to or  binding  on the  Subordination  Agent  and do not
            contravene  the  Subordination  Agent's  articles of  association or
            by-laws or result in any breach of, or  constitute a default  under,
            any agreement or instrument  to which the  Subordination  Agent is a
            party or by which it or any of its properties may be bound;

                  (iv) neither the execution  and delivery by the  Subordination
            Agent of this Agreement nor the  consummation  by the  Subordination
            Agent of any of the  transactions  contemplated  hereby requires the
            consent or  approval  of, the giving of notice to, the  registration
            with,  or the  taking of any  other  action  with  respect  to,  any
            Delaware   governmental   authority   or  agency   or  any   federal
            governmental   authority  or  agency  regulating  the  Subordination
            Agent's banking, trust or fiduciary powers;

                  (v)  there are no Taxes  payable  by the  Subordination  Agent
            imposed by the State of Delaware  or any  political  subdivision  or
            taxing authority thereof in connection with the execution,  delivery
            and performance by the Subordination  Agent of this Agreement (other
            than  franchise  or other  taxes based on or measured by any fees or
            compensation  received  by  the  Subordination  Agent  for  services
            rendered in connection  with the  transactions  contemplated  by the
            Intercreditor  Agreement or any of the  Liquidity  Facilities),  and
            there are no Taxes payable by the Subordination Agent imposed by the
            State of Delaware or any political subdivision thereof in connection
            with the acquisition,  possession or ownership by the  Subordination
            Agent of any of the Equipment  Notes (other than  franchise or other
            taxes based on or measured by any fees or  compensation  received by
            the Subordination Agent for services rendered in connection with the
            transactions  contemplated by the Intercreditor  Agreement or any of
            the Liquidity Facilities); and

                  (vi) there are no pending or threatened actions or proceedings
            against the  Subordination  Agent before any court or administrative
            agency  which  individually  or  in  the  aggregate,  if  determined
            adversely to it, would  materially  adversely  affect the ability of
            the  Subordination  Agent to  perform  its  obligations  under  this
            Agreement.

<PAGE>

            (e) The Escrow Agent represents and warrants that:

                  (i) the Escrow Agent is a national  banking  association  duly
            incorporated,  validly  existing and in good standing under the laws
            of the United States and has the full corporate power, authority and
            legal right under the laws of the United  States  pertaining  to its
            banking,  trust and  fiduciary  powers to execute and  deliver  this
            Agreement,  each Deposit  Agreement and each Escrow and Paying Agent
            Agreement (collectively, the "ESCROW AGENT AGREEMENTS") and to carry
            out the  obligations  of the Escrow  Agent  under each of the Escrow
            Agent Agreements;

                  (ii) the execution and delivery by the Escrow Agent of each of
            the Escrow Agent  Agreements and the performance by the Escrow Agent
            of  its   obligations   hereunder  and  thereunder  have  been  duly
            authorized  by the Escrow Agent and will not violate its articles of
            association or by-laws or the provisions of any indenture, mortgage,
            contract or other agreement to which it is a party or by which it is
            bound; and

                  (iii)  each of the Escrow  Agent  Agreements  constitutes  the
            legal, valid and binding obligations of the Escrow Agent enforceable
            against it in accordance  with its terms,  except as the same may be
            limited  by  applicable  bankruptcy,   insolvency,   reorganization,
            moratorium  or  similar  laws  affecting  the  rights  of  creditors
            generally and by general principles of equity, whether considered in
            a proceeding at law or in equity.

            (f) The Paying Agent represents and warrants that:

                  (i) the Paying Agent is duly  incorporated,  validly  existing
            and in good standing under the laws of the State of Delaware and has
            the full corporate  power,  authority and legal right under the laws
            of the United States pertaining to its banking,  trust and fiduciary
            powers to execute  and  deliver  this  Agreement  and the Escrow and
            Paying Agent Agreement (collectively, the "PAYING AGENT AGREEMENTS")
            and to carry out the  obligations  of the Paying Agent under each of
            the Paying Agent Agreements;

                  (ii) the execution and delivery by the Paying Agent of each of
            the Paying Agent  Agreements and the performance by the Paying Agent
            of  its   obligations   hereunder  and  thereunder  have  been  duly
            authorized  by the Paying Agent and will not violate its articles of

<PAGE>

            association or by-laws or the provisions of any indenture, mortgage,
            contract or other agreement to which it is a party or by which it is
            bound; and

                  (iii)  each of the Paying  Agent  Agreements  constitutes  the
            legal, valid and binding obligations of the Paying Agent enforceable
            against it in accordance  with its terms,  except as the same may be
            limited  by  applicable  bankruptcy,   insolvency,   reorganization,
            moratorium  or  similar  laws  affecting  the  rights  of  creditors
            generally and by general principles of equity, whether considered in
            a proceeding at law or in equity.

            SECTION 4.  COVENANTS.  (a) The Company  covenants  with each of the
other parties hereto that:

            (i)  [Intentionally omitted];

            (ii)  subject to Section  4(a)(iv)  of this  Agreement,  the Company
      shall at all times maintain its corporate existence and shall not wind up,
      liquidate or dissolve or take any action, or fail to take any action, that
      would have the effect of any of the foregoing;

            (iii) the Company  shall at all times  remain a U.S. Air Carrier (as
      defined in the Financing  Agreements)  and shall at all times be otherwise
      certificated  and registered to the extent necessary to entitle (i) in the
      case of  Leased  Aircraft,  the Owner  Trustee  (and the Loan  Trustee  as
      assignee  of the Owner  Trustee's  rights  under each Lease) to the rights
      afforded to lessors of aircraft  equipment  under Section 1110 and (ii) in
      the case of Owned  Aircraft,  the Loan  Trustee to the rights  afforded to
      secured parties of aircraft equipment under Section 1110;

            (iv)  Section  13.2.1  of  each  Lease  is  hereby  incorporated  by
      reference herein;

            (v) the  Company  agrees to  provide  written  notice to each of the
      parties  hereto of the  occurrence  of the Cut-off  Date no later than one
      Business Day after the date thereof;  such notice to refer specifically to
      the Pass Through Trustee's obligation to assign,  transfer and deliver all
      of its right, title and interest to the Trust Property (as defined in each
      Pass  Through  Trust  Agreement)  to the trustee of the Related  Trust (as
      defined in each Pass Through Trust  Agreement) in accordance  with Section
      7.01 of each of the Trust Supplements; and

<PAGE>

            (vi) the Company shall not issue Series D Equipment  Notes  pursuant
      to any Indenture,  unless it shall have obtained written confirmation from
      each Rating Agency that the issuance of such Series D Equipment Notes will
      not result in (i) a reduction of the rating for any Class of  Certificates
      below the then  current  rating for such Class of  Certificates  or (ii) a
      withdrawal or suspension  of the rating of any Class of  Certificates.  If
      Series D  Equipment  Notes are  initially  issued  to other  than the pass
      through trustee for the Class D  Certificates,  the Company will cause (i)
      such  Series D  Equipment  Notes to be  subject to the  provisions  of the
      Intercreditor  Agreement that allow the "Controlling Party" (as defined in
      the  Intercreditor  Agreement),  during the  continuance  of an "Indenture
      Default" (as defined in the Intercreditor  Agreement),  to direct the Loan
      Trustee  in taking  action  under the  applicable  Indenture  and (ii) the
      Indenture  under which such Series D Equipment Notes are issued to include
      the provisions set forth in Exhibit F to this Agreement.

            (b) WTC,  in its  individual  capacity,  covenants  with each of the
other  parties  to this  Agreement  that it  will,  immediately  upon  obtaining
knowledge  of any facts that would  cast doubt upon its  continuing  status as a
"citizen of the United States" as defined in Section 40102(a)(15) of the Act and
promptly upon public  disclosure of  negotiations  in respect of any transaction
which would or might adversely affect such status, notify in writing all parties
hereto of all relevant matters in connection therewith. Upon WTC giving any such
notice,  WTC shall,  subject to Section 8.02 of any Indenture then entered into,
resign as Loan Trustee in respect of such Indenture.

            SECTION 5. NOTICES.  Unless otherwise  specifically provided herein,
all notices  required or  permitted by the terms of this  Agreement  shall be in
English and in writing,  and any such notice shall become  effective  upon being
delivered  personally  or, if promptly  confirmed by mail,  when  dispatched  by
facsimile or other written telecommunication,  addressed to such party hereto at
its address or facsimile  number set forth below the  signature of such party at
the foot of this Agreement.

            SECTION  6.  EXPENSES.   (a)  The  Company  agrees  to  pay  to  the
Subordination  Agent when due an amount or amounts  equal to the fees payable to
the Liquidity  Provider  under Section 2.03 of each  Liquidity  Facility and the
related Fee Letter (as defined in the Intercreditor  Agreement)  multiplied by a
fraction the numerator of which shall be the then  outstanding  aggregate amount
of the Deposits under the Deposit  Agreements and the denominator of which shall
be the sum of (x) the then outstanding  aggregate principal amount of the Series

<PAGE>

A-1 Equipment  Notes,  Series A-2  Equipment  Notes,  Series B Equipment  Notes,
Series C-1 Equipment  Notes and Series C-2  Equipment  Notes issued under all of
the Indentures  and (y) the then  outstanding  aggregate  amount of the Deposits
under the Deposit Agreements.

            (b) So long as no Equipment Notes have been issued in respect of any
Aircraft,  the Company agrees to pay (i) to the Subordination Agent when due (A)
the amount equal to interest on any  Downgrade  Advance  (other than any Applied
Downgrade  Advance) payable under Section 3.07 of each Liquidity  Facility minus
Investment  Earnings while such Downgrade Advance shall be outstanding,  (B) the
amount equal to interest on any  Non-Extension  Advance  (other than any Applied
Non-Extension  Advance)  payable under Section 3.07 of each  Liquidity  Facility
minus Investment Earnings while such Non-Extension  Advance shall be outstanding
and (C) any other  amounts owed to the Liquidity  Provider by the  Subordination
Agent as borrower  under each  Liquidity  Facility  (other  than  amounts due as
repayment of advances thereunder or as interest on such advances,  except to the
extent  payable  pursuant  to  clause  (A) or (B)),  (ii) all  compensation  and
reimbursement  of expenses,  disbursements  and advances  payable by the Company
under  the  Pass  Through  Trust   Agreements,   (iii)  all   compensation   and
reimbursement of expenses and disbursements  payable to the Subordination  Agent
under the Intercreditor Agreement except with respect to any income or franchise
taxes incurred by the  Subordination  Agent in connection with the  transactions
contemplated  by the  Intercreditor  Agreement and (iv) in the event the Company
requests any  amendment to any  Operative  Agreement,  all  reasonable  fees and
expenses (including,  without limitation,  fees and disbursements of counsel) of
the Escrow Agent and/or the Paying Agent in connection  therewith.  For purposes
of  this  Section  6(b),  the  terms  "Applied  Downgrade   Advance",   "Applied
Non-Extension   Advance",   "Downgrade  Advance",   "Investment   Earnings"  and
"Non-Extension  Advance"  shall have the meanings  specified  in each  Liquidity
Facility.

            SECTION 7. FURTHER ASSURANCES. Each party hereto shall duly execute,
acknowledge  and  deliver,  or shall  cause  to be  executed,  acknowledged  and
delivered, all such further agreements, instruments,  certificates or documents,
and shall do and cause to be done such further acts and things,  in any case, as
any  other  party  hereto  shall  reasonably  request  in  connection  with  its
administration  of,  or to carry out more  effectually  the  purposes  of, or to
better assure and confirm unto it the rights and benefits to be provided  under,
this Agreement.

            SECTION  8.  MISCELLANEOUS.   (a)  Provided  that  the  transactions
contemplated hereby have been consummated,  and except as otherwise provided for
herein,  the  representations,  warranties and agreements herein of the Company,

<PAGE>

the Subordination Agent, the Escrow Agent, the Paying Agent and the Pass Through
Trustee, and the Company's,  the Subordination  Agent's, the Escrow Agent's, the
Paying  Agent's and the Pass  Through  Trustee's  obligations  under any and all
thereof, shall survive the expiration or other termination of this Agreement and
the other agreements referred to herein.

            (b) This  Agreement  may be executed  in any number of  counterparts
(and each of the  parties  hereto  shall not be  required  to  execute  the same
counterpart).  Each  counterpart of this  Agreement,  including a signature page
executed by each of the parties hereto, shall be an original counterpart of this
Agreement,   but  all  of  such  counterparts   together  shall  constitute  one
instrument.  Neither  this  Agreement  nor  any  of  the  terms  hereof  may  be
terminated,  amended,  supplemented,  waived or modified orally,  but only by an
instrument in writing  signed by the party against which the  enforcement of the
termination,  amendment, supplement, waiver or modification is sought. The index
preceding  this  Agreement  and the  headings  of the  various  Sections of this
Agreement are for  convenience of reference  only and shall not modify,  define,
expand  or  limit  any of the  terms or  provisions  hereof.  The  terms of this
Agreement  shall be binding upon, and shall inure to the benefit of, the Company
and its  successors  and  permitted  assigns,  the Pass Through  Trustee and its
successors as Pass Through Trustee (and any additional  trustee appointed) under
any of the Pass Through Trust Agreements, the Escrow Agent and its successors as
Escrow Agent under the Escrow and Paying Agent Agreements,  the Paying Agent and
its  successors as Paying Agent under the Escrow and Paying Agent  Agreement and
the  Subordination  Agent and its  successors as  Subordination  Agent under the
Intercreditor Agreement.

            (c) This  Agreement is not  intended to, and shall not,  provide any
person  not a  party  hereto  (other  than  the  Underwriters  and  each  of the
beneficiaries  of Section 6 hereof)  with any  rights of any  nature  whatsoever
against any of the parties hereto,  and no person not a party hereto (other than
the Underwriters  and each of the  beneficiaries of Section 6 hereof) shall have
any right,  power or  privilege  in respect  of, or have any benefit or interest
arising out of, this Agreement.

            SECTION 9. GOVERNING  LAW. THIS AGREEMENT  SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE  WITH, THE LAWS OF THE STATE OF NEW YORK. THIS AGREEMENT
IS BEING DELIVERED IN THE STATE OF NEW YORK.

<PAGE>

            IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their  respective  officers  thereunto duly authorized as of
the day and year first above written.

                                    CONTINENTAL AIRLINES, INC.

                                    By__________________________________________
                                      Name:
                                      Title:

                                      Address:  1600 Smith Street
                                                Dept. HQS-FN
                                                Houston, TX  77002
                                                Attention:  Senior Vice
                                                  President-Finance
                                                Facsimile:  (713) 324-2447

                                    WILMINGTON   TRUST   COMPANY,
                                    not in its  individual  capacity,
                                    except as  otherwise  provided
                                    herein, but solely as Pass Through
                                    Trustee

                                    By__________________________________________
                                      Name:
                                      Title:

                                      Address:  Rodney Square North
                                                1100 North Market Street
                                                Wilmington, Delaware 19890
                                                Attention:  Corporate Trust
                                                  Administration
                                                Facsimile:  (302) 651-8882

<PAGE>

                                    WILMINGTON   TRUST   COMPANY,
                                    not in its  individual  capacity,
                                    except as  otherwise  provided
                                    herein, but solely as Subordination
                                    Agent

                                    By__________________________________________
                                      Name:
                                      Title:

                                      Address: Rodney Square North
                                               1100 North Market Street
                                               Wilmington, Delaware 19890
                                               Attention: Corporate Trust
                                                 Administration
                                     Facsimile:(302) 651-8882

                                    FIRST SECURITY BANK, NATIONAL ASSOCIATION,
                                    as Escrow Agent

                                    By__________________________________________
                                      Name:
                                      Title:

                                      Address:   79 South Main Street
                                                 Salt Lake City, Utah 84111
                                                 Attention:  Corporate Trust
                                                   Department, 3rd Floor
                                      Facsimile: (801) 246-5053

<PAGE>

                                    WILMINGTON TRUST COMPANY,
                                    as Paying Agent

                                    By__________________________________________
                                      Name:
                                      Title:

                                      Address:   Rodney Square North
                                                 1100 North Market Street
                                                 Wilmington, Delaware 19890
                                                 Attention:  Corporate Trust
                                                   Administration
                                      Facsimile: (302) 651-8882

<PAGE>

                                  SCHEDULE I to
                             NOTE PURCHASE AGREEMENT
                             -----------------------

                 ELIGIBLE AIRCRAFT AND SCHEDULED DELIVERY MONTHS

                          Expected          Manufacturer's       Scheduled
New Aircraft Type    Registration Number     Serial Number     Delivery Month
-----------------    -------------------     -------------     --------------

Boeing 737-824             N24202               30429              Jun-00

Boeing 737-824             N33203               30613              Jun-00

Boeing 737-824             N35204               30576              Jul-00

Boeing 737-824             N27205               30577              Jul-00

Boeing 737-824             N11206               30578              Jul-00

Boeing 737-824             N36207               30579              Aug-00

Boeing 737-824             N26208               30580              Aug-00

Boeing 737-824             N33209               30581              Aug-00

Boeing 737-824             N73251               30582              Sep-00

Boeing 737-824             N37252               30583              Sep-00

Boeing 737-824             N37253               30584              Sep-00

Boeing 737-824             N76254               30779              Sep-00

Boeing 737-824             N37255               30610              Oct-00

Boeing 737-824             N73256               30611              Oct-00

Boeing 737-824             N38257               30612              Nov-00

Boeing 737-824             N77258               30802              Nov-00

Boeing 757-224             N17139               30352              Feb-00

Boeing 757-224             N41140               30353              Feb-00

Boeing 757-224             N19141               30354              Jun-00

Boeing 767-424             N66051               29446              Jul-00

Boeing 767-424             N67052               29447              Aug-00

Boeing 767-424             N59053               29448              Oct-00

Boeing 767-424             N76054               29449              Dec-00

<PAGE>

                                 SCHEDULE II to
                             NOTE PURCHASE AGREEMENT
                             -----------------------

                                TRUST SUPPLEMENTS

Trust  Supplement dated as of the Issuance Date between the Company and the Pass
Through  Trustee in respect of Continental  Airlines Pass Through Trust,  Series
2000-1A-1-O.

Trust  Supplement dated as of the Issuance Date between the Company and the Pass
Through  Trustee in respect of Continental  Airlines Pass Through Trust,  Series
2000-1A-2-O.

Trust  Supplement dated as of the Issuance Date between the Company and the Pass
Through  Trustee in respect of Continental  Airlines Pass Through Trust,  Series
2000-1B-O.

Trust  Supplement dated as of the Issuance Date between the Company and the Pass
Through  Trustee in respect of Continental  Airlines Pass Through Trust,  Series
2000-1C-1-O.

Trust  Supplement dated as of the Issuance Date between the Company and the Pass
Through  Trustee in respect of Continental  Airlines Pass Through Trust,  Series
2000-1C-2-O.

<PAGE>

                                 SCHEDULE III to
                             NOTE PURCHASE AGREEMENT
                             -----------------------

                               DEPOSIT AGREEMENTS

Deposit  Agreement  (Class  A-1)  dated  as of the  Issuance  Date  between  the
Depositary and the Escrow Agent.

Deposit  Agreement  (Class  A-2)  dated  as of the  Issuance  Date  between  the
Depositary and the Escrow Agent.

Deposit Agreement (Class B) dated as of the Issuance Date between the Depositary
and the Escrow Agent.

Deposit  Agreement  (Class  C-1)  dated  as of the  Issuance  Date  between  the
Depositary and the Escrow Agent.

Deposit  Agreement  (Class  C-2)  dated  as of the  Issuance  Date  between  the
Depositary and the Escrow Agent.

<PAGE>

                                 SCHEDULE IV to
                             NOTE PURCHASE AGREEMENT
                             -----------------------

                       ESCROW AND PAYING AGENT AGREEMENTS

Escrow and Paying  Agent  Agreement  (Class A-1) dated as of the  Issuance  Date
among the Escrow  Agent,  the  Underwriters,  the Pass  Through  Trustee and the
Paying Agent.

Escrow and Paying  Agent  Agreement  (Class A-2) dated as of the  Issuance  Date
among the Escrow  Agent,  the  Underwriters,  the Pass  Through  Trustee and the
Paying Agent.

Escrow and Paying Agent Agreement  (Class B) dated as of the Issuance Date among
the Escrow  Agent,  the  Underwriters,  the Pass Through  Trustee and the Paying
Agent.

Escrow and Paying  Agent  Agreement  (Class C-1) dated as of the  Issuance  Date
among the Escrow  Agent,  the  Underwriters,  the Pass  Through  Trustee and the
Paying Agent.

Escrow and Paying  Agent  Agreement  (Class C-2) dated as of the  Issuance  Date
among the Escrow  Agent,  the  Underwriters,  the Pass  Through  Trustee and the
Paying Agent.

<PAGE>

                                  SCHEDULE V to
                             NOTE PURCHASE AGREEMENT
                             -----------------------

                            MANDATORY DOCUMENT TERMS

The terms "Trust  Indenture  Form,"  "Lease Form" and  "Participation  Agreement
Form" shall have the  respective  meanings  specified in Schedule VI to the Note
Purchase Agreement.

1.   May not modify in any material  adverse  respect the Granting Clause of the
     Trust  Indenture Form so as to deprive the Note Holders of a first priority
     security  interest in and mortgage lien on the Aircraft and the Lease or to
     eliminate any of the obligations secured thereby or otherwise modify in any
     material adverse respect as regards the interests of the Note Holders,  the
     Subordination   Agent,  the  Liquidity   Providers  or  the  Mortgagee  the
     provisions of Article II or III or Section 4.02,  4.03,  4.04,  5.02, 5.06,
     9.01(b), 10.04, 10.11 or 10.12 of the Trust Indenture Form.

2.   May not modify in any material adverse respect as regards the  interests of
     the Note Holders,  the Subordination Agent, the Liquidity Providers or  the
     Mortgagee  the  provisions  of Section  3.2.1(e),  3.3(c),  4.7, the  final
     sentence of 7.1.1,  10.3.1(d)(ii),  13.3, 16, 18.3 or 18.7(a) of  the Lease
     Form or otherwise  modify the terms of the Lease Form so as to  deprive the
     Mortgagee of rights expressly granted to the "Mortgagee" therein.

3.   May not modify in any material  adverse respect as regards the interests of
     the Note Holders,  the Subordination  Agent, the Liquidity Providers or the
     Mortgagee the provisions of Section 5.1.9, 5.1.10, 5.1.11, 5.1.12, 7.5, 12,
     15.8(a) or 15.9 of the Participation Agreement Form or of the provisions of
     Section  5.1.2(xxiii) or 10.1.1(a)(iv) of the Participation  Agreement Form
     so as to eliminate the  requirement  to deliver to the Loan  Participant or
     the  Mortgagee,  as the case may be, the legal  opinions  to be provided to
     such  Persons  thereunder  (recognizing  that the  lawyers  rendering  such
     opinions may be changed) or of the provisions of Section  7.6.11(a)(ii)  of
     the  Participation  Agreement  Form as regards the rights of the  Mortgagee
     thereunder  or otherwise  modify the terms of the  Participation  Agreement
     Form to deprive  the  Trustees,  the  Subordination  Agent,  the  Liquidity
     Providers or the  Mortgagee of any indemnity or right of  reimbursement  in
     its favor for Expenses or Taxes.

4.   May not modify, in any material adverse respect as regards the interests of
     the Note Holders,  the Subordination  Agent, the Liquidity Providers or the
     Mortgagee,  the  definition  of  "Make  Whole  Amount"  in  Annex  A to the
     Participation Agreement Form.

     Notwithstanding  the foregoing,  any such  Mandatory  Document Term  may be
     modified  to  correct  or  supplement  any  such  provision  which  may  be
     defective or to cure any  ambiguity or correct any mistake,  PROVIDED  that
     any such action shall not materially adversely affect the interests of  the
     Note  Holders,  the  Subordination  Agent,  the  Liquidity  Providers,  the
     Mortgagee or the Certificateholders.

<PAGE>

                                 SCHEDULE VI to
                             NOTE PURCHASE AGREEMENT
                             -----------------------

                            MANDATORY ECONOMIC TERMS

EQUIPMENT NOTES

Obligor:    Continental or an Owner Trust

Maximum Principal Amount:

The aggregate principal amount of all the Equipment Notes issued with respect to
an Aircraft shall not exceed the amounts set forth in the following table:

                                                                   MAXIMUM
                                             MANUFACTURER'S       PRINCIPAL
                                                 SERIAL           AMOUNT OF
AIRCRAFT TYPE                                    NUMBER        EQUIPMENT NOTES
-------------                                --------------    ---------------

Boeing 737-824                                    30429          $30,822,220

Boeing 737-824                                    30613           30,822,220

Boeing 737-824                                    30576           30,937,280

Boeing 737-824                                    30577           30,937,280

Boeing 737-824                                    30578           30,937,280

Boeing 737-824                                    30579           30,983,480

Boeing 737-824                                    30580           30,983,480

Boeing 737-824                                    30581           30,983,480

Boeing 737-824                                    30582           31,025,280

Boeing 737-824                                    30583           31,025,280

Boeing 737-824                                    30584           31,025,280

Boeing 737-824                                    30779           31,025,280

Boeing 737-824                                    30610           31,136,600

Boeing 737-824                                    30611           31,136,600

Boeing 737-824                                    30612           31,185,000

Boeing 737-824                                    30802           31,185,000

Boeing 757-224                                    30352           39,097,740

Boeing 757-224                                    30353           39,097,740

Boeing 757-224                                    30354           39,352,500

Boeing 767-424                                    29446           68,463,560

Boeing 767-424                                    29447           68,560,360

<PAGE>

                                                                   MAXIMUM
                                             MANUFACTURER'S       PRINCIPAL
                                                 SERIAL           AMOUNT OF
AIRCRAFT TYPE                                    NUMBER        EQUIPMENT NOTES
-------------                                --------------    ---------------

Boeing 767-424                                    29448           68,953,060

Boeing 767-424                                    29449           69,148,860

The  original  aggregate  principal  amount of all  Equipment  Notes (other than
Series D  Equipment  Notes,  if any)  for all  Aircraft  shall  not  exceed  the
aggregate  face amount of all  Certificates  issued on the  Issuance  Date.  The
original aggregate  principal amount of all Equipment Notes of any series (other
than Series D Equipment  Notes, if any) shall not exceed the original  aggregate
face amount of all  Certificates  of the related  Class  issued on the  Issuance
Date.

Initial  Loan to  Aircraft  Value  with  respect  to an  Aircraft  (with (i) the
principal  amount of the series of  Equipment  Notes that rank equally or senior
aggregated  for purposes of the  calculation  and (ii) the value of any Aircraft
for these purposes equal to the value ("the ASSUMED  APPRAISED  VALUE") for such
Aircraft  set  forth in the  Prospectus  Supplement  under  "Description  of the
Aircraft and the  Appraisals--The  Appraisals" in the column "Appraised  Value")
shall not exceed the percentages set forth in the following table:

  SERIES A-1       SERIES A-2       SERIES B       SERIES C-1      SERIES C-2
EQUIPMENT NOTES  EQUIPMENT NOTES EQUIPMENT NOTES EQUIPMENT NOTES EQUIPMENT NOTES
---------------  --------------- --------------- --------------- ---------------

     42.0%            42.0%           53.0%            66.0%           66.0%

The Loan to Aircraft Value for each series of Equipment  Notes issued in respect
of each Aircraft  (computed (i) after  aggregating  the principal  amount of the
series of Equipment Notes that rank equally or senior and (ii) as of the date of
the  issuance  thereof  on the  basis  of the  Assumed  Appraised  Value of such
Aircraft  and  the  Depreciation   Assumption  (as  defined  in  the  Prospectus
Supplement  in  "Description  of the  Equipment  Notes--Loan  to Value Ratios of
Equipment  Notes"))  will  not  exceed  as  of  any  Regular  Distribution  Date
thereafter  (assuming no default in the payment of the Equipment Notes and after
giving effect to scheduled  payments) the Loan to Aircraft Value for such series
of Equipment  Notes set forth in the  following  table for the  applicable  time
period:

<PAGE>

                        SERIES A-1  SERIES A-2  SERIES B  SERIES C-1  SERIES C-2
                        EQUIPMENT   EQUIPMENT   EQUIPMENT EQUIPMENT   EQUIPMENT
TIME PERIOD               NOTES       NOTES       NOTES     NOTES       NOTES
-----------             ----------  ----------  --------- ----------  ----------

Up to May 1, 2005.....     42.0%       42.0%      53.0%       66.0%      66.0%
May 2, 2005 - May 1,       42.0        42.0       51.0        66.0        NA
   2010...............
After May 1, 2010.....     40.0         NA        49.0        66.0        NA

As of the Delivery Period  Termination Date and each Regular  Distribution  Date
thereafter,  the Loan to Aircraft Value for each Class of Certificates (computed
(i) after  aggregating the principal  amount of the class of  Certificates  that
rank  equally or senior and (ii) as of any such date on the basis of the Assumed
Appraised  Value of all Aircraft that have been  delivered and the  Depreciation
Assumption) will not exceed (assuming no default in the payment of the Equipment
Notes and after giving effect to scheduled  payments) the  percentages set forth
in the following table for the applicable time period:

<TABLE>
<CAPTION>
                      CLASS A-1   CLASS A-2     CLASS B     CLASS C-1    CLASS C-2
                    CERTIFICATES CERTIFICATES CERTIFICATES CERTIFICATES CERTIFICATES
                    ------------ ------------ ------------ ------------ ------------
<S>                 <C>          <C>          <C>          <C>          <C>
TIME PERIOD
-----------
Up to May 1, 2005...    41.0%        41.0%        51.0%        63.0%        63.0%
May 2, 2005 -           41.0         41.0         49.0         63.0          NA
    May 1, 2010.....
After May 1, 2010...    39.0          NA          47.0         63.0          NA
</TABLE>

<PAGE>

Initial Average Life (in years) from the Issuance Date for any Aircraft:

            Series A-1:       not more than 14.6 years

            Series B:         not more than 13.2 years

            Series C-1:       not more than 8.5 years

AVERAGE LIFE (IN YEARS)

      As of the Delivery Period  Termination Date, the average life of the Class
      A-1 Certificates,  the Class B Certificates and the Class C-1 Certificates
      shall not be more than,  respectively,  12.6 years,  11.2  years,  and 7.0
      years from the Issuance Date (computed  without regard to the acceleration
      of any Equipment Notes and after giving effect to any special distribution
      on the Certificates thereafter required in respect of unused Deposits).

FINAL MATURITY DATE

      There shall be a payment of principal scheduled on at least one Series A-1
      Equipment Note on November 1, 2020, and no Series A-1 Equipment Note shall
      mature after such date.

      Series A-2:       May 1, 2010, with no scheduled amortization

      There shall be a payment of  principal  scheduled on at least one Series B
      Equipment  Note on November 1, 2020,  and no Series B Equipment Note shall
      mature after such date.

      There shall be a payment of principal scheduled on at least one Series C-1
      Equipment  Note on May 1,  2011,  and no Series C-1  Equipment  Note shall
      mature after such date.

      Series C-2:       May 1, 2005, with no scheduled amortization

As of the  Delivery  Period  Termination  Date  (assuming  Equipment  Notes  are
acquired by the Pass Through Trusts for all of the Aircraft),  (a) the aggregate
principal amount of the Series A-2 Equipment Notes shall equal the original face
amount of the Class A-2 Certificates  and (b) the aggregate  principal amount of
the Series C-2 Equipment Notes shall equal the original face amount of the Class
C-2 Certificates.

Debt Rate  (computed on the basis of a 360-day year  consisting of twelve 30-day
months, payable semi-annually in arrears)

<PAGE>

      Series A-1:   8.048%

      Series A-2:   7.918%

      Series B:     8.388%

      Series C-1:   8.499%

      Series C-2:   8.321%

Payment Due Rate:             Debt Rate plus 2% per annum

Payment Dates:                May 1 and November 1

Make-Whole Premiums:          As  provided  in  Article  II of the form of Trust
                              Indenture  marked as Exhibit A-3 or A-6 (whichever
                              shall be utilized  for a Leased  Aircraft)  of the
                              Note  Purchase  Agreement  (the  "TRUST  INDENTURE
                              FORM") or the Owned Aircraft  Indenture  marked as
                              Exhibit C-2 of the Note Purchase Agreement

Redemption and Purchase:      As provided  in Article II of the Trust  Indenture
                              Form

LEASE

Term:                         The Base Lease  Term shall  expire by its terms on
                              or  after  final   maturity  date  of  the  latest
                              maturity date of the related Equipment Notes

Lease Payment Dates:          May 1 and November 1

Minimum Rent:                 Basic Rent due and  payable on each  Payment  Date
                              shall be at least sufficient to pay in full, as of
                              such Payment Date (assuming  timely payment of the
                              related  Equipment Notes prior to such Date),  the
                              aggregate    principal    amount   of    scheduled
                              installments  due on the related  Equipment  Notes
                              outstanding  on such Payment  Date,  together with
                              accrued and unpaid interest thereon.

Supplemental Rent:            Sufficient to cover the sums  described in clauses
                              (a) through (d) of such term as defined in Annex A
                              to the form of Lease (the "LEASE  FORM") marked as
                              Exhibit A-2 of the Note Purchase Agreement

<PAGE>

Stipulated Loss Value:        At all  times  equal to or  greater  than the then
                              outstanding   principal   amount  of  the  related
                              Equipment  Notes  together  with accrued  interest
                              thereon

Termination Value:            At all  times  equal to or  greater  than the then
                              outstanding   principal   amount  of  the  related
                              Equipment  Notes  together  with accrued  interest
                              thereon

All-risk hull insurance:      Not less than  Stipulated  Loss Value,  subject to
                              Lessee's  right  to  self-insure  on terms no more
                              favorable to Lessee in any  material  respect than
                              those  set  forth in  Section  G of Annex D to the
                              Lease Form.

Minimum Liability             As set forth  in  Schedule 1 to  the  Lease  Form.
Insurance Amount:

Payment Due Rate:             As set forth  in  Schedule 1 to  the  Lease  Form.

SLV Rate:                     As set forth  in  Schedule 1 Lease Form.

PARTICIPATION AGREEMENT

Mortgagee,  Subordination Agent, Liquidity Providers,  Liquidity Guarantor, Pass
Through Trustees,  Escrow Agents and Note Holders  indemnified  against Expenses
and Taxes to the extent set forth in Section 9 of the form of the  Participation
Agreement (the "PARTICIPATION AGREEMENT FORM") marked as Exhibit A-1 to the Note
Purchase Agreement

<PAGE>

 -----------------------------------------------------------------------------
|                               SCHEDULE VII to                               |
|                           NOTE PURCHASE AGREEMENT                           |
|                           -----------------------                           |
 -----------------------------------------------------------------------------

                         AGGREGATE AMORTIZATION SCHEDULE

<TABLE>
<CAPTION>

                           2000-1A-1 Trust        2000-1B        2000-1C-1 Trust
                              Scheduled       Trust Scheduled       Scheduled
          Date            Principal Payment  Principal Payment  Principal Payment
------------------------  -----------------  -----------------  -----------------
<S>                       <C>                <C>                <C>
May 1, 2000              $          0.00     $          0.00    $         0.00
November 1, 2000            2,185,117.82          537,840.36      1,551,104.30
May 1, 2001                 8,660,291.13        1,868,068.40      4,074,297.74
November 1, 2001            5,587,447.20          311,638.00        467,457.00
May 1, 2002                 7,881,447.60          534,309.00      1,744,899.46
November 1, 2002            6,610,130.16        1,645,397.40      5,386,938.33
May 1, 2003                 9,525,190.56        1,962,970.27     12,418,632.65
November 1, 2003            6,888,252.33        5,822,065.76          4,488.59
May 1, 2004                10,262,975.53        6,569,064.41        801,463.50
November 1, 2004            6,042,597.16        2,152,993.07              0.00
May 1, 2005                12,211,215.35        1,788,737.37              0.00
November 1, 2005            1,277,715.80        4,785,258.49              0.00
May 1, 2006                14,128,153.10        2,756,712.80      3,772,331.64
November 1, 2006            1,277,715.80          249,310.40              0.00
May 1, 2007                14,128,153.10        2,756,712.80      3,217,287.17
November 1, 2007            1,277,715.80          249,310.40              0.00
May 1, 2008                14,128,153.10        3,323,035.92      6,023,536.60
November 1, 2008            1,277,715.80          249,310.40              0.00
May 1, 2009                14,128,153.10        3,639,195.40      6,996,694.11
November 1, 2009            1,277,715.80          249,310.40              0.00
May 1, 2010                         0.00       16,467,768.24              0.00
November 1, 2010                    0.00                0.00              0.00
May 1, 2011                 3,425,350.93        5,089,737.00     24,159,868.91
November 1, 2011                    0.00                0.00              0.00
May 1, 2012                11,532,937.18        3,541,219.51              0.00
November 1, 2012                    0.00          847,339.36              0.00
May 1, 2013                14,642,872.82        5,901,769.31              0.00
November 1, 2013                    0.00                0.00              0.00
May 1, 2014                37,129,698.76        5,488,551.50              0.00
November 1, 2014                    0.00          299,122.69              0.00
May 1, 2015                42,083,979.58        4,904,761.24              0.00
November 1, 2015                    0.00                0.00              0.00
May 1, 2016                42,928,482.21        5,743,574.87              0.00
November 1, 2016                    0.00                0.00              0.00
May 1, 2017                12,103,479.75        4,612,794.28              0.00
November 1, 2017                    0.00                0.00              0.00
May 1, 2018                         0.00        1,602,702.56              0.00
November 1, 2018                    0.00          632,285.12              0.00
May 1, 2019                39,471,000.70        4,612,794.28              0.00
November 1, 2019            5,101,246.64        2,045,383.14              0.00
May 1, 2020                47,009,783.28        5,295,161.60              0.00
November 1, 2020            1,595,311.91        4,612,794.25              0.00

</TABLE>

<PAGE>

                                   ANNEX A to
                             NOTE PURCHASE AGREEMENT
                             -----------------------

                                   DEFINITIONS

"ACT" means 49 U.S.C. ss.ss. 40101-46507.

"AFFILIATE"  means,  with respect to any person,  any other  person  directly or
indirectly controlling,  controlled by or under common control with such person.
For  purposes  of this  definition,  "control"  means  the  power,  directly  or
indirectly,  to direct or cause the direction of the  management and policies of
such person,  whether through the ownership of voting  securities or by contract
or otherwise and "controlling,"  "controlled by" and "under common control with"
have correlative meanings.

"AIRCRAFT PURCHASE AGREEMENT" means, in the case of the Boeing 767-424 Aircraft,
the Purchase  Agreement No. 2060,  dated as of October 10, 1997, or, in the case
of the Boeing  757-224  Aircraft and the Boeing 737-824  Aircraft,  the Purchase
Agreement No. 1951 dated July 23, 1996, as amended, each between the Company and
the  Manufacturer  (including  all exhibits  thereto,  together  with all letter
agreements entered into that by their terms constitute part of any such Purchase
Agreement); and "AIRCRAFT PURCHASE AGREEMENTS" means all such agreements.

"AIRCRAFT PURCHASE  AGREEMENT  ASSIGNMENT" means a Purchase Agreement and Engine
Warranties  Assignment  substantially  in the form of Exhibit  A-4-I,  A-4-II or
A-4-III to the Note Purchase Agreement.

"ASSUMED  AMORTIZATION  SCHEDULE"  means  Schedule  VII  to  the  Note  Purchase
Agreement.

"BANKRUPTCY CODE" means the United States Bankruptcy Code, 11 U.S.C. ss.ss. 102
ET SEQ.

"BASIC PASS THROUGH TRUST  AGREEMENT"  means the Pass Through  Trust  Agreement,
dated September 25, 1997, between the Company and Pass Through Trustee,  as such
agreement  may be  supplemented,  amended or modified,  but does not include any
Trust Supplement.

"BUSINESS  DAY"  means any day,  other than a  Saturday,  Sunday or other day on
which  commercial  banks are authorized or required by law to close in New York,
New York, Houston, Texas, Wilmington, Delaware or Salt Lake City, Utah.

"CERTIFICATE"  has the  meaning  set  forth  in the  third  recital  to the Note
Purchase Agreement.

<PAGE>

"CERTIFICATEHOLDER"  means the Person in whose name a Certificate  is registered
in the Register.

"CLASS" means the class of Certificates issued by each Pass Through Trust.

"CLASS D CERTIFICATES" means pass through certificates issued by the Continental
Airlines Pass Through Trust, Series 2000-1D, if any.

"COMPANY" means Continental Airlines, Inc., a Delaware corporation.

"CORPORATE  TRUST  OFFICE" with respect to any Pass Through  Trustee or any Loan
Trustee, means the office of such trustee in the city at which at any particular
time its corporate trust business shall be principally administered.

"CUT-OFF  DATE"  means the  earlier  of (a) the day after  the  Delivery  Period
Termination Date and (b) the date on which a Triggering Event occurs.

"DELIVERY PERIOD  TERMINATION DATE" means the earlier of (a) March 31, 2001, or,
if the  Equipment  Notes  relating  to all of the New  Aircraft  (or  Substitute
Aircraft in lieu thereof) have not been  purchased by the Pass Through  Trustees
on or prior to such date due to any reason beyond the control of the Company and
not  occasioned  by the  Company's  fault  or  negligence,  September  30,  2001
(provided that, if a labor strike occurs or continues at the Manufacturer  after
the  Issuance  Date on or prior to either or both of such dates  referred  to in
this clause (a),  such date or dates on or following  the Issuance Date shall be
extended  by adding  thereto the number of days that such  strike  continued  in
effect after the Issuance Date) and (b) the date on which Equipment Notes issued
with respect to all of the New Aircraft (or Substitute Aircraft in lieu thereof)
have been  purchased by the Pass Through  Trustees in  accordance  with the Note
Purchase Agreement.

"DELIVERY  DATE" means the  Business Day on which a New Aircraft is delivered to
and accepted by the Company.

"DEPOSIT"  has the meaning set forth in the fifth  recital to the Note  Purchase
Agreement.

"DEPOSIT  AGREEMENT"  has the meaning set forth in the fifth recital to the Note
Purchase Agreement.

<PAGE>

"DEPOSITARY" means Credit Suisse First Boston, a banking  institution  organized
under the laws of Switzerland, acting through its New York branch.

"ELIGIBLE  AIRCRAFT" has the meaning set forth in the second recital to the Note
Purchase Agreement.

"EQUIPMENT  NOTES"  means and  includes  any  equipment  notes  issued under any
Indenture  in the form  specified  in Section  2.01 thereof (as such form may be
varied  pursuant to the terms of such  Indenture)  and any Equipment Note issued
under any Indenture in exchange for or replacement of any other Equipment Note.

"ESCROW  AGENT" has the  meaning  set forth in the first  paragraph  of the Note
Purchase Agreement.

"ESCROW  AND PAYING  AGENT  AGREEMENT"  has the  meaning  set forth in the fifth
recital to the Note Purchase Agreement.

"FAA" means the Federal Aviation Administration of the United States.

"FINAL  WITHDRAWAL" with respect to each Escrow and Paying Agent Agreement,  has
the meaning set forth in Section 1.02 thereof.

"FINANCING AGREEMENTS" means,  collectively,  the Lease Financing Agreements and
the Owner Financing Agreements.

"GOVERNMENT  ENTITY"  means  (a)  any  federal,  state,  provincial  or  similar
government,  and any  body,  board,  department,  commission,  court,  tribunal,
authority,  agency or other  instrumentality of any such government or otherwise
exercising any executive,  legislative,  judicial,  administrative or regulatory
functions  of  such  government  or  (b)  any  other  government  entity  having
jurisdiction  over  any  matter  contemplated  by the  Operative  Agreements  or
relating to the  observance  or  performance  of the  obligations  of any of the
parties to the Operative Agreements.

"GUARANTEE AGREEMENT" has the meaning set forth in the Intercreditor Agreement.

"GUARANTOR" has the meaning set forth in the Intercreditor Agreement.

"INDENTURES" means,  collectively,  the Leased Aircraft Indentures,  the Special
Indentures and the Owned Aircraft Indentures.

"INTERCREDITOR  AGREEMENT" has the meaning set forth in the ninth recital to the
Note Purchase Agreement.

<PAGE>

"ISSUANCE DATE" means the date of the original issuance of the Certificates.

"LAW" means (a) any  constitution,  treaty,  statute,  law, decree,  regulation,
order,  rule or  directive  of any  Government  Entity,  and (b) any judicial or
administrative  interpretation  or application of, or decision under, any of the
foregoing.

"LEASE" means a Lease Agreement  substantially in the form of Exhibit A-2 to the
Note Purchase Agreement.

"LEASE  FINANCING  AGREEMENTS"  means,   collectively,   the  Aircraft  Purchase
Agreement Assignment,  the Leased Aircraft Participation  Agreement,  the Lease,
the Leased Aircraft  Indenture (or, in a case where The Boeing Company or any of
its  Affiliates  is the Owner  Participant  and if so  specified in the Delivery
Notice,  the Special  Indenture),  the Equipment Notes issued thereunder and the
Trust Agreement relating to the financing of a Leased Aircraft.

"LEASED AIRCRAFT" means a New Aircraft subject to a Lease.

"LEASED AIRCRAFT  INDENTURE" means a Trust Indenture and Mortgage  substantially
in the form of Exhibit A-3 to the Note Purchase Agreement.

"LEASED  AIRCRAFT  PARTICIPATION  AGREEMENT"  means  a  Participation  Agreement
substantially in the form of Exhibit A-1 to the Note Purchase Agreement.

"LIQUIDITY  FACILITY" has the meaning set forth in the ninth recital to the Note
Purchase Agreement.

"LIQUIDITY  PROVIDER" has the meaning set forth in the ninth recital to the Note
Purchase Agreement.

"LOAN TRUSTEE" means the "Mortgagee" as defined in the Financing Agreements.

"MANDATORY  DOCUMENT  TERMS" means the terms set forth on Schedule V to the Note
Purchase Agreement.

"MANDATORY  ECONOMIC TERMS" means the terms set forth on Schedule VI to the Note
Purchase Agreement.

"MANUFACTURER" means The Boeing Company, a Delaware  corporation,  solely in its
capacity as manufacturer or seller of New Aircraft.

"NEW  AIRCRAFT"  has the  meaning  set forth in the  second  recital to the Note
Purchase Agreement.

<PAGE>

"NOTE PURCHASE  AGREEMENT" means the Note Purchase Agreement to which this Annex
A is attached.

"NOTICE OF PURCHASE WITHDRAWAL" with respect to each Deposit Agreement,  has the
meaning set forth in Section 2.3 thereof.

"OPERATIVE AGREEMENTS" means,  collectively,  the Pass Through Trust Agreements,
the Escrow and Paying Agent Agreements,  the Deposit  Agreements,  the Liquidity
Facilities,  the Guarantee Agreements,  the Intercreditor  Agreement,  the Trust
Agreements, the Equipment Notes, the Certificates and the Financing Agreements.

"OWNED AIRCRAFT" means a New Aircraft subject to an Owned Aircraft Indenture.

"OWNED AIRCRAFT INDENTURE" means a Trust Indenture and Mortgage substantially in
the form of Exhibit C-2 to the Note Purchase Agreement.

"OWNED  AIRCRAFT  PARTICIPATION   AGREEMENT"  means  a  Participation  Agreement
substantially in the form of Exhibit C-1 to the Note Purchase Agreement.

"OWNER   FINANCING   AGREEMENTS"   means,   collectively,   the  Owned  Aircraft
Participation  Agreement,  the Owned Aircraft  Indenture and the Equipment Notes
issued thereunder.

"OWNER PARTICIPANT" means, with respect to any Leased Aircraft, the Person named
as the Owner  Participant  in the  Participation  Agreement with respect to such
Leased Aircraft.

"OWNER  TRUST" means with respect to any Leased  Aircraft,  the trust created by
the "Trust  Agreement"  referred to in the Leased Aircraft  Indenture or Special
Indenture related thereto.

"OWNER TRUSTEE" means with respect to any Leased  Aircraft,  the "Owner Trustee"
party to the "Trust Agreement"  referred to in the Leased Aircraft  Indenture or
Special Indenture related thereto.

"PARTICIPATION   AGREEMENTS"   means,   collectively,    the   Leased   Aircraft
Participation Agreements and the Owned Aircraft Participation Agreements.

"PASS THROUGH  TRUST" has the meaning set forth in the third recital to the Note
Purchase Agreement.

"PASS  THROUGH  TRUST   AGREEMENT"   means  each  of  the  five  separate  Trust
Supplements,  together in each case with the Basic Pass Through Trust Agreement,

<PAGE>

each dated as of the Issuance  Date,  by and between the Lessee and Pass Through
Trustee.

"PASS THROUGH  TRUSTEE" has the meaning set forth in the first  paragraph of the
Note Purchase Agreement.

"PAYING  AGENT" has the  meaning  set forth in the first  paragraph  of the Note
Purchase Agreement.

"PERSON" means any individual, firm, partnership, joint venture, trust, trustee,
Government Entity,  organization,  association,  corporation,  limited liability
company,  government agency,  committee,  department,  authority and other body,
corporate or  incorporate,  whether having  distinct legal status or not, or any
member of any of the same.

"QUALIFIED OWNER PARTICIPANT" means any bank, trust company,  insurance company,
financial  institution,  partnership,  limited  liability company or corporation
(other  than,  without the  Company's  consent,  a  commercial  air  carrier,  a
commercial  aircraft  operator,  a freight  forwarder or Affiliate of any of the
foregoing),  in each case with a combined capital and surplus or net worth of at
least $50,000,000.

"RATING AGENCIES" means,  collectively,  at any time, each nationally recognized
rating agency which shall have been requested to rate the Certificates and which
shall then be rating the  Certificates.  The  initial  Rating  Agencies  will be
Moody's  Investors  Service,  Inc. and  Standard & Poor's  Ratings  Services,  a
division of The McGraw-Hill Companies, Inc.

"RATING AGENCY CONFIRMATION" means, with respect to any Financing Agreement that
has been modified in any material respect from the forms thereof attached to the
Note  Purchase  Agreement,  with  respect  to  Substitute  Aircraft,  a  written
confirmation  from each of the Rating  Agencies  that the use of such  Financing
Agreement  with  such  modifications  or the  substituting  of  such  Substitute
Aircraft  for an  Eligible  Aircraft,  whichever  of the  foregoing  shall  in a
particular  case require Rating Agency  Confirmation,  would not result in (i) a
reduction  of the rating for any Class of  Certificates  below the then  current
rating for such Class of  Certificates or (ii) a withdrawal or suspension of the
rating of any Class of Certificates.

"REGISTER" means the register  maintained  pursuant to Sections 3.04 and 7.12 of
the Basic Pass Through Trust Agreement with respect to each Pass Through Trust.

"REGULAR  DISTRIBUTION  DATES"  shall  mean May 1 and  November  1 of each year,
commencing May 1, 2000.

<PAGE>

"SECTION 1110" means 11 U.S.C.  ss. 1110 of the Bankruptcy Code or any successor
or analogous Section of the federal bankruptcy Law in effect from time to time.

"SERIES A-1 EQUIPMENT NOTES" means Equipment Notes issued under an Indenture and
designated as "Series A-1" thereunder.

"SERIES A-2 EQUIPMENT NOTES" means Equipment Notes issued under an Indenture and
designated as "Series A-2" thereunder.

"SERIES B EQUIPMENT  NOTES" means  Equipment Notes issued under an Indenture and
designated as "Series B" thereunder.

"SERIES C-1 EQUIPMENT NOTES" means Equipment Notes issued under an Indenture and
designated as "Series C-1" thereunder.

"SERIES C-2 EQUIPMENT NOTES" means Equipment Notes issued under an Indenture and
designated as "Series C-2" thereunder.

"SERIES D EQUIPMENT  NOTES" means  Equipment Notes issued under an Indenture and
designated as "Series D" thereunder, if any.

"SPECIAL  INDENTURE"  means a Trust Indenture and Mortgage  substantially in the
form of Exhibit A-6 to the Note Purchase Agreement.

"SUBORDINATION  AGENT" has the meaning set forth in the first  paragraph  of the
Note Purchase Agreement.

"SUBSTITUTE  AIRCRAFT"  has the  meaning  set forth in Section  1(g) of the Note
Purchase Agreement.

"TAXES"  means  all  license,  recording,  documentary,  registration  and other
similar fees and all taxes, levies,  imposts,  duties,  charges,  assessments or
withholdings of any nature whatsoever imposed by any Taxing Authority,  together
with any  penalties,  additions to tax,  fines or interest  thereon or additions
thereto.

"TAXING AUTHORITY" means any federal,  state or local government or other taxing
authority  in the  United  States,  any  foreign  government  or  any  political
subdivision or taxing authority thereof,  any international  taxing authority or
any  territory  or  possession  of the  United  States or any  taxing  authority
thereof.

"TRIGGERING  EVENT" has the meaning  assigned to such term in the  Intercreditor
Agreement.

"TRUST AGREEMENT" means a Trust Agreement substantially in the form of Exhibit E
to the Note Purchase Agreement.

<PAGE>

"TRUST  SUPPLEMENT"  means an agreement  supplemental  to the Basic Pass Through
Trust  Agreement  pursuant  to which (i) a  separate  trust is  created  for the
benefit of the holders of the Pass  Through  Certificates  of a class,  (ii) the
issuance of the Pass Through Certificates of such class representing  fractional
undivided  interests in such trust is authorized and (iii) the terms of the Pass
Through Certificates of such class are established.

"UNDERWRITERS"  has the  meaning  set forth in the  fourth  recital  to the Note
Purchase Agreement.

"WTC" has the  meaning  set forth in the first  paragraph  of the Note  Purchase
Agreement.

<PAGE>

                                 EXHIBIT A-1 to
                             NOTE PURCHASE AGREEMENT
                             -----------------------

                 FORM OF LEASED AIRCRAFT PARTICIPATION AGREEMENT

                               (Filed Separately)

<PAGE>

                                 EXHIBIT A-2 to
                             NOTE PURCHASE AGREEMENT
                             -----------------------

                                  FORM OF LEASE

                               (Filed Separately)

<PAGE>

                                 EXHIBIT A-3 to
                             NOTE PURCHASE AGREEMENT
                             -----------------------

                        FORM OF LEASED AIRCRAFT INDENTURE

                               (Filed Separately)

<PAGE>

                                EXHIBIT A-4-I to
                             NOTE PURCHASE AGREEMENT
                             -----------------------

             FORM OF AIRCRAFT PURCHASE AGREEMENT ASSIGNMENT - ROLLS

<PAGE>

 -----------------------------------------------------------------------------
|            CONFIDENTIAL: SUBJECT TO RESTRICTIONS ON DISSEMINATION           |
|   SET FORTH IN SECTION 8 OF THE PARTICIPATION AGREEMENT (AS DEFINED HEREIN) |
 -----------------------------------------------------------------------------

             PURCHASE AGREEMENT AND ENGINE WARRANTIES ASSIGNMENT ___

            PURCHASE AGREEMENT AND ENGINE WARRANTIES ASSIGNMENT ___, dated as of
____________,   between  Continental  Airlines,  Inc.,  a  Delaware  corporation
("Assignor"),  and First Security Bank, National Association, a national banking
association,  not in  its  individual  capacity  but  solely  as  Owner  Trustee
("Assignee")  under Trust  Agreement  ___ dated as of  ____________  (the "Trust
Agreement"),  between the Owner Participant  named therein and Assignee,  in its
individual capacity,  and otherwise not in its individual capacity but solely as
trustee thereunder.

            Assignor and Manufacturer (as such term and other  capitalized terms
are hereinafter defined) are parties to the Purchase Agreement, providing, among
other things,  for the manufacture  and sale by  Manufacturer or  Manufacturer's
wholly owned  subsidiary  to Assignor of certain  aircraft,  engines and related
equipment,  including the Aircraft. Assignor and Engine Manufacturer are parties
to the General Terms  Agreement,  containing,  among other terms and conditions,
the Engine Warranties.

            Assignee  wishes to acquire the Aircraft from Assignor and Assignor,
on the terms and  conditions  hereinafter  set  forth,  is  willing to assign to
Assignee certain of Assignor's rights and interests under the Purchase Agreement
and the  General  Terms  Agreement  and  Assignee  is  willing  to  accept  such
assignment, as hereinafter set forth.

                                   AGREEMENTS

            The parties hereto agree as follows:

            Section 1. DEFINITIONS. For all purposes of this Assignment,  except
as otherwise  expressly provided or unless the context otherwise  requires,  the
following terms shall have the following meanings:

            AIRCRAFT - The Boeing Model 757-224 aircraft bearing  Manufacturer's
Serial No. _________ and U.S. Registration No. ________, to be financed pursuant
to the Participation Agreement, including the Engines.

<PAGE>

            ENGINES - Two  Rolls-Royce  Model  RB211-535E4-B-37  series  engines
bearing  manufacturer's  serial  numbers  ________ and  ________,  respectively,
installed on the Aircraft.

            ENGINE MANUFACTURER - Rolls-Royce plc, a corporation organized under
the laws of England, and its successors and assigns.

            ENGINE  WARRANTIES  -  Engine   Manufacturer's   "Engine  and  Parts
Warranty"    reference   CE28,    "Nacelle   Warranty"   reference   CE49A   and
"Non-Installation Items Warranty" reference CE7/Audit 1, as set forth in Exhibit
C which  forms a part of the  General  Terms  Agreement,  and as  limited by the
applicable terms of the General Terms Agreement and such Exhibit C.

            GENERAL   TERMS   AGREEMENT  -  The  Purchase   Contract   reference
RR/CAL/DEG2124  dated December 7, 1993, by and between Engine  Manufacturer  and
Assignor,  including Exhibit C - "Warranties" thereto, insofar as such Exhibit C
relates  to the  Engine  Warranties,  but  excluding  any  and all  Side  Letter
Agreements  attached thereto, to the extent that such Purchase Contract and such
Exhibit  relate to the  Engines,  as such  Purchase  Contract  may  hereafter be
amended, supplemented and modified to the extent relating to the Engines.

            LEASE - The Lease Agreement ___, dated as of ____________, as at any
time  amended,  supplemented  and modified,  between  Assignee,  as lessor,  and
Assignor, as lessee, providing for the lease of the Aircraft.

            MANUFACTURER - The Boeing Company, a Delaware  corporation,  and its
successors and assigns.

            PARTICIPATION  AGREEMENT - The Participation Agreement ___, dated as
of ____________, among Assignor, the Participants, Assignee and Mortgagee, as at
any time amended, supplemented and modified.

            PURCHASE  AGREEMENT - Purchase  Agreement No. 1783,  dated March 18,
1993, between Manufacturer and Assignor,  providing, among other things, for the
manufacture  and sale by  Manufacturer  to Assignor of certain  Boeing Model 757
aircraft  (including the Aircraft) and including as part thereof  Exhibits A, B,
D, E and F thereto, but excluding all other exhibits and letter and supplemental
agreements,  to the extent that such Purchase Agreement and such Exhibits relate
to  the  Aircraft,   as  such  Purchase  Agreement  may  hereafter  be  amended,
supplemented  and  modified  to the  extent  permitted  by  the  terms  of  this
Assignment.

<PAGE>

            Capitalized  terms  used  but not  defined  herein  shall  have  the
respective  meanings  set  forth or  incorporated  by  reference,  and  shall be
construed  and  interpreted  in  the  manner  described,  in  the  Participation
Agreement.

            Section 2. ASSIGNMENT.  Assignor does hereby sell, assign,  transfer
and set over unto  Assignee  and its  successors  and  permitted  assigns all of
Assignor's rights and interests in and to the Purchase Agreement, as and only to
the extent  that the same  relates to the  Aircraft,  and in and to the  General
Terms Agreement,  as and only to the extent that the Engine Warranties contained
therein relate to the Engines,  except to the extent reserved  below,  including
without  limitation in such  assignment (a) all claims for damages in respect of
the Aircraft and the Engines  arising as a result of any default by Manufacturer
under the  Purchase  Agreement  or Engine  Manufacturer  or any other  vendor or
supplier of other parts or equipment installed on or in the Aircraft,  including
without  limitation  all warranty  service life policies,  aircraft  performance
guarantees and indemnity  provisions contained in the Purchase Agreement and the
Engine Warranties, and all claims arising thereunder, in respect of the Aircraft
and the Engines, (b) any and all rights of Assignor to compel performance of the
terms of the  Purchase  Agreement  in  respect  of the  Aircraft  and the Engine
Warranties  in respect of the  Engines  and (c) the right to  purchase  and take
title to the Aircraft pursuant to the Purchase Agreement; RESERVING TO ASSIGNOR,
HOWEVER, with respect to the Aircraft and each Engine, (i) all rights to receive
any credits due to Assignor  with respect to the purchase  price of the Aircraft
pursuant to the Purchase  Agreement  and of the Engines  pursuant to the General
Terms Agreement,  (ii) all of Assignor's  rights and interests in or arising out
of any  payments or  deposits  made  relating  to the  Aircraft or to be made by
Assignor  on amounts  credited  or to be  credited  or paid or to be paid by the
Manufacturer to Assignor in respect of the Aircraft, and, (iii) so long and only
so long as, the  Aircraft  and each Engine  shall be subject to the Lease and no
Lease Event of Default  shall have occurred and be  continuing  thereunder,  the
rights (A) to demand, accept and retain all rights in and to all property (other
than the Aircraft),  data and services that Manufacturer or Engine  Manufacturer
is obligated to provide or does  provide  pursuant to the Purchase  Agreement or
the General  Terms  Agreement,  as the case may be, and (B) to obtain  services,
training,  data and  demonstration  and test  flights  pursuant to the  Purchase
Agreement or the General Terms Agreement, as the case may be.

            Assignee hereby accepts such assignment subject to the terms hereof.
Assignor has furnished a true copy of the Purchase  Agreement and a true copy of
the General Terms Agreement to Assignee and has specifically directed Assignee's

<PAGE>

attention to Paragraph 10 of Part A,  Paragraph 5 of Part C, Paragraph 3 of Part
D,  Paragraph  2 of Part  D-1,  and  Paragraph  5 of Part F of  Exhibit B to the
Purchase Agreement.

            Section 3.  EXERCISE OF RIGHTS OF "BUYER" UNDER  PURCHASE  AGREEMENT
AND  OF  "CONTINENTAL"  UNDER  GENERAL  TERMS  AGREEMENT.   Notwithstanding  the
foregoing,  if and so long as no Lease Event of Default  shall have occurred and
be  continuing,  Assignee  authorizes  Assignor,  to the  exclusion of Assignee,
during the Term,  to  exercise in  Assignor's  name all rights and powers of the
"Buyer"  in  respect  of  the  Aircraft  under  the  Purchase  Agreement  and of
"Continental" in respect of each Engine under the General Terms  Agreement,  and
of  Assignee  in respect of a default  by any  vendor or  supplier  of parts and
equipment  (as  specified  in clause  (b) of  Section 2 above) and to retain any
recovery or benefit  resulting from the enforcement of any warranty or indemnity
under the Purchase  Agreement or the General  Terms  Agreement in respect of the
Aircraft or each Engine,  as the case may be, except that Assignor may not enter
into any change order or other  amendment,  modification  or  supplement  to the
Purchase Agreement without the written consent or  countersignature  of Assignee
if such change order, amendment,  modification or supplement would (i) result in
any rescission, cancellation or termination of the Purchase Agreement in respect
of the Aircraft or (ii)  materially  diminish the rights  assigned  hereunder to
Assignee.  Assignee agrees that, as between  Assignee and Manufacturer or Engine
Manufacturer,  as the case may be (and without  affecting  Assignor's  duties or
obligations   under  the   Participation   Agreement  or  the  Lease),   neither
Manufacturer  nor Engine  Manufacturer,  as the case may be,  shall be deemed to
have  knowledge of any Lease  Default,  Lease Event of Default,  declaration  of
default or the discontinuance or remedy thereof or the Aircraft or either Engine
being no longer  subject to the Lease or any change in the authority of Assignor
or  Assignee,  as the case may be, to  exercise  any of the  rights  established
hereunder  unless and until  Manufacturer  shall have  received  written  notice
thereof from Assignee or Mortgagee  addressed to its Treasurer at P.O. Box 3707,
Mail  Code  21-34,  Seattle,  Washington  98124-3707,  if by  mail,  or to (425)
237-1706,  if by  facsimile,  or,  in the case of  Engine  Manufacturer,  Engine
Manufacturer  shall have  received  written  notice  thereof  from  Assignee  or
Mortgagee  addressed  to its  Contract  Manager  RB211-535,  524 and Large Fleet
Engines  at  P.O.  Box  31,  Derby  DE24  8BJ,  England,   if  by  mail,  or  to
011-44-332-248514,   if  by  facsimile.  So  long  as  Manufacturer  and  Engine
Manufacturer act in good faith,  Manufacturer  and Engine  Manufacturer may rely
conclusively on any such notice without  inquiring as to the accuracy of, or the
entitlement of the party to give, such notice.

<PAGE>

            Section 4. CERTAIN AGREEMENTS. It is expressly agreed that, anything
herein contained to the contrary notwithstanding:

            (a) Assignor  shall at all times remain  liable (i) to  Manufacturer
      under the Purchase  Agreement to perform all the duties and obligations of
      the "Buyer"  thereunder and (ii) to Engine  Manufacturer under the General
      Terms  Agreement  to  perform  all  the  duties  and  obligations  of  the
      "Continental"  thereunder,  in each  case to the  same  extent  as if this
      Assignment had not been executed,

            (b) the exercise by Assignee of any of the rights assigned hereunder
      shall  not  release  Assignor  from any of its  duties or  obligations  to
      Manufacturer under the Purchase Agreement or to Engine  Manufacturer under
      the General  Terms  Agreement  except to the extent that such  exercise by
      Assignee shall constitute performance of such duties and obligations, and

            (c)  except as  provided  in the next  sentence,  none of  Assignee,
      Mortgagee or any Participant  shall have any obligation or liability under
      the  Purchase  Agreement or the General  Terms  Agreement by reason of, or
      arising  out of, this  Assignment  or be  obligated  to perform any of the
      obligations  or duties of Assignor  under the  Purchase  Agreement  or the
      General Terms  Agreement or to make any payment  thereunder or to make any
      inquiry as to the sufficiency of any payment received by any of them or to
      present  or file any  claim or to take any  other  action  to  collect  or
      enforce any claim for any payment assigned hereunder.

Anything  contained in this Assignment,  the Consent and Agreement or the Engine
Consent and  Agreement to the contrary  notwithstanding,  but without in any way
releasing  Assignor  from any of its duties or  obligations  under the  Purchase
Agreement,  the  General  Terms  Agreement  or  this  Assignment,  Assignee  and
Mortgagee  confirm  for the  benefit of  Manufacturer  and Engine  Manufacturer,
respectively,  that,  insofar as the provisions of the Purchase Agreement or the
Engine Warranties relate to the Aircraft or the Engines,  as the case may be, in
exercising any rights under the Purchase Agreement or the Engine Warranties,  or
in making any claim with  respect to the  Aircraft or other  goods and  services
delivered  or to be delivered  pursuant to the Purchase  Agreement or the Engine
Warranties,  the terms and  conditions of the Purchase  Agreement and the Engine
Warranties,  including without  limitation Exhibit C thereto shall apply to, and
be binding upon, Assignee and Mortgagee to the same extent as Assignor.  Each of

<PAGE>

Assignee and Mortgagee agree that, in the event it intends to sell,  re-lease or
otherwise  dispose  of one or more of the  Engines  to any  Person,  it will use
reasonable  efforts to ensure  that such Person  enters  into a direct  warranty
agreement with Engine  Manufacturer  prior to delivery of such Engine or Engines
to such Person.

            Section  5.  PRESERVATION  OF  RIGHTS.  Nothing  contained  in  this
Assignment  shall in any way  diminish  or limit the  provisions  of  Assignor's
indemnity  in  Section 9 of the  Participation  Agreement  with  respect  to any
liability of Assignee to  Manufacturer  in any way relating to or arising out of
the Purchase  Agreement.  Nothing  contained in this  Assignment  shall  subject
Manufacturer  or Engine  Manufacturer to any obligation or liability to which it
would not otherwise be subject under the Purchase Agreement or under the General
Terms  Agreement,  as the case may be,  or modify in any  respect  the  contract
rights of  Manufacturer  or  Engine  Manufacturer  thereunder,  except as may be
provided in their respective  consents attached hereto, or require  Manufacturer
to divest  itself of title to or  possession  of the Aircraft or other goods and
services until delivery thereof and payment therefor as provided in the Purchase
Agreement  or subject  Manufacturer  or Engine  Manufacturer  to any multiple or
duplicative  liability or obligation under the Purchase Agreement or the General
Terms  Agreement,  as the case  may be.  No  further  assignment  of the  Engine
Warranties,  including  without  limitation  assignments  for security  purposes
(other  than under the Trust  Indenture),  are  permitted  without  the  express
written consent of Engine Manufacturer.

            Section 6.  APPOINTMENT  OF  ATTORNEY.  Effective at any time when a
Lease  Event of  Default  shall  have  occurred  and be  continuing,  (i) unless
Assignee and Mortgagee (so long as the Lien of the Trust  Indenture has not been
discharged),  in their sole  discretion,  shall  notify  Manufacturer  or Engine
Manufacturer,  as the case may be, to the contrary,  the authorization  given to
Assignor  under  Section  3 hereof to  enforce  such  rights  and  claims  shall
henceforth  cease to be effective and Assignee and its  successors and permitted
assigns shall,  to the exclusion of Assignor,  be entitled to assert and enforce
such rights and claims as substitute party plaintiff or otherwise,  and Assignor
shall, at the request of Assignee or its successors or permitted  assigns and at
Assignor's  expense,  cooperate  with  and take  such  action  as is  reasonably
necessary to enable Assignee and its successors and permitted assigns to enforce
such rights and claims, and (ii) Assignor does hereby constitute  Assignee,  its
successors  and  permitted   assigns,   Assignor's  true  and  lawful  attorney,
irrevocably,  with full power (in the name of  Assignor  or  otherwise)  to ask,
require,  demand, receive,  compound and give acquittance for any and all monies

<PAGE>

and  claims for  monies  due and to become  due  under,  or arising  out of, the
Purchase  Agreement  in respect of the  Aircraft  or the  Engine  Warranties  in
respect of the  Engines,  as the case may be, to the  extent  that the same have
been assigned by this  Assignment  and, for such period as Assignee may exercise
rights with  respect  thereto  under this  Assignment,  to endorse any checks or
other  instruments  or orders in connection  therewith and to file any claims or
take any action or institute  (or, if previously  commenced,  assume control of)
any proceeding and to obtain any recovery in connection therewith which Assignee
may deem to be necessary or advisable in the premises.

            Section 7. OTHER ACTION.  Assignor  agrees that, at Assignor's  sole
cost and expense, at any time and from time to time, upon the written request of
Assignee or, so long as the Lien of the Trust Indenture has not been discharged,
Mortgagee,  Assignor will promptly and duly execute and deliver any and all such
further  instruments  and documents and take such further action as Assignee or,
so long as the Lien of the Trust Indenture has not been  discharged,  Mortgagee,
may reasonably  request in order to obtain the full benefits of this  Assignment
and of the rights and powers herein granted.

            Section 8. ASSIGNOR'S REPRESENTATIONS AND WARRANTIES.  Assignor does
hereby  represent and warrant that the Purchase  Agreement and the General Terms
Agreement  are in full  force and  effect  as to  Assignor  and are  enforceable
against Assignor in accordance with their respective terms. Assignor does hereby
further  represent and warrant that Assignor has, with the authorized  execution
of the Consent and Agreement and the Engine Consent and Agreement,  (i) received
all  necessary  consents to the  assignment  and  transfer  contemplated  herein
(including without limitation the assignment and transfer contemplated herein of
Assignor's rights under the Purchase  Agreement and the General Terms Agreement)
and (ii)  assuming  that the Consent and  Agreement  and the Engine  Consent and
Agreement  are in full force and  effect,  such  consents  are in full force and
effect and  Assignor  further  represents  and  warrants  that  Assignor has not
assigned  (except as  assigned  hereby) or pledged  (except  pursuant to the 757
Purchase  Agreement  Assignment  dated  February  7,  1994  between  Lessee  and
Manufacturer,  the Lien of which  will  have  been  released  at or prior to the
delivery of this  Agreement),  and hereby  covenants that it will not during the
Term  assign  (except as assigned  hereby) or pledge so long as this  Assignment
shall remain in effect,  the whole or any part of the rights hereby  assigned or
any of its rights with respect to the Aircraft  under the Purchase  Agreement or
with  respect to the Engines  under the General  Terms  Agreement  not  assigned
hereby to anyone other than Assignee.

<PAGE>

            Section 9. PAYMENTS.  Notwithstanding  this  Assignment and anything
herein to the contrary,  all amounts that Manufacturer or Engine Manufacturer is
obligated to pay to Assignor  under the Purchase  Agreement  with respect to the
Aircraft or under the  General  Terms  Agreement  with  respect to the  Engines,
including,  without limitation,  resulting from the enforcement of any warranty,
covenant,  representation,  indemnity or product support agreement thereunder or
the  enforcement  or exercise of any right or power  thereunder or hereunder (in
the case of  Manufacturer,  a "Manufacturer  Payment," and in the case of Engine
Manufacturer,  an  "Engine  Manufacturer  Payment")  (excluding,  however,  from
Manufacturer  Payments and Engine Manufacturer Payments any amounts Manufacturer
is obligated to pay to Assignor with respect to the rights  reserved to Assignor
in  Section  2  hereof),   will  be  payable  and  applicable  as  follows:  all
Manufacturer Payments and Engine Manufacturer Payments shall be paid to Assignor
unless and until Manufacturer or Engine Manufacturer,  as the case may be, shall
have received  written  notice as set forth in Section 3 hereof from Assignee or
Mortgagee  that a  Lease  Event  of  Default  has  occurred  and is  continuing,
whereupon  Manufacturer or Engine Manufacturer,  as the case may be, will, until
Manufacturer  or Engine  Manufacturer,  as the case may be, shall have  received
written  notice from Assignee or Mortgagee that all Lease Events of Default have
been cured or waived,  make any and all such payments  directly to Assignee (or,
so long as the Trust  Indenture  has not been  discharged  and  Manufacturer  or
Engine Manufacturer,  as the case may be, shall have received notice thereof, to
Mortgagee).  Any  amounts  received  by  Assignee  pursuant  to the  immediately
preceding sentence shall, to the extent not theretofore  applied in satisfaction
of sums  owing  to  Assignee  in  accordance  with the  terms  of the  Operative
Agreements, be held and invested as provided in Section 4.4 of the Lease.

            Section 10. ASSIGNEE'S  AGREEMENT.  Assignee agrees that, during the
Term,  except as otherwise  contemplated  by Section 2 hereof and unless a Lease
Event of Default shall have occurred and be  continuing,  it will not enter into
any agreement that would amend, modify, supplement, rescind, cancel or terminate
the Purchase Agreement or the General Terms Agreement in respect of the Aircraft
or the Engines without the prior written consent of Assignor.

            Section  11.  EXECUTION;   COUNTERPARTS,  ETC.  This  Assignment  is
executed by Assignor and Assignee  concurrently  with the execution and delivery
of the Lease.  This Assignment may be executed by the parties hereto in separate
counterparts,  each of which when so executed shall be deemed to be an original,
and both of which  counterparts,  taken together,  shall  constitute one and the

<PAGE>

same instrument.  The section headings in this Assignment are for convenience of
reference only and shall not modify, define, expand or limit any of the terms or
provisions hereof.

            Section 12. CONFIDENTIAL TREATMENT. Assignee agrees that it will not
disclose to any third party the terms of the  Purchase  Agreement or the General
Terms  Agreement  except  (i) as  required  by  applicable  law or  governmental
regulation,  (ii) in connection  with the  financing of the  Aircraft,  (iii) as
permitted under Section 8 of the  Participation  Agreement as if this Assignment
were  specifically  referred  to  therein,  (iv) with the  consent of  Assignor,
Manufacturer  and  the  Engine  Manufacturer  (as  the  case  may  be) or (v) in
connection with any sale or lease of the Aircraft.  Assignee further agrees that
in connection with any disclosures  made as contemplated by clauses (ii) (except
in connection with the financing  contemplated by the Participation  Agreement),
(iii)  (except  as  to  clauses  (C)  and  (E)  and  (F)  of  Section  8 of  the
Participation  Agreement)  or (iv) of the  preceding  sentence,  Assignee  shall
instruct  the  entity to which  such  information  is  disclosed  to treat  such
information as confidential on the terms set forth in this Section 12.

            Section 13. ASSIGNMENT TO MORTGAGEE.  The right,  title and interest
of Assignee in and to this  Assignment  has been assigned to and is subject to a
security  interest in favor of Wilmington Trust Company,  as Mortgagee under the
Trust  Indenture,   for  the  benefit  of  the  Noteholders  and  the  Indenture
Indemnitees  referred to in such Trust Indenture,  all to the extent provided in
such Trust  Indenture.  Assignor  hereby  consents to such assignment and to the
creation of such security interest in and to this Assignment.

            SECTION 14.  GOVERNING LAW. THIS ASSIGNMENT SHALL IN ALL RESPECTS BE
GOVERNED  BY THE  LAWS OF THE  STATE  OF NEW  YORK,  INCLUDING  ALL  MATTERS  OF
CONSTRUCTION,  VALIDITY AND PERFORMANCE,  WITHOUT GIVING EFFECT TO PRINCIPLES OF
CONFLICTS OF LAWS.

                     [This space intentionally left blank.]

<PAGE>

            IN WITNESS  WHEREOF,  the parties  hereto have caused this  Purchase
Agreement and Engine Warranties Assignment ___ to be duly executed as of the day
and year first above written.

                                    CONTINENTAL AIRLINES, INC.

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

                                    FIRST SECURITY BANK,
                                    NATIONAL ASSOCIATION,
                                      not in its individual capacity
                                      but solely as Owner Trustee

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

<PAGE>

            The  undersigned,  as Mortgagee  for the benefit of the Note Holders
and Indenture  Indemnitees and as assignee of, and holder of a security interest
in, the estate,  right,  title and interest of Assignee in and to the  foregoing
Assignment  pursuant to the terms of the Trust Indenture  agrees to the terms of
the foregoing Assignment and agrees that its rights and remedies under the Trust
Indenture  shall  be  subject  to the  terms  and  conditions  of the  foregoing
Assignment,  including  Sections 4 and 5 therein,  and of the Purchase Agreement
and the General Terms Agreement.

                                    WILMINGTON TRUST COMPANY,
                                     as Mortgagee

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

<PAGE>

                     MANUFACTURER CONSENT AND AGREEMENT ___

            The undersigned, THE BOEING COMPANY, a Delaware corporation,  hereby
acknowledges  notice of and  consents to all of the terms of Purchase  Agreement
and Engine  Warranties  Assignment  ___ (herein  called the  "Assignment")  (the
defined  terms  therein being  hereinafter  used with the same  meanings  unless
otherwise defined herein) between Continental Airlines,  Inc., as Assignor,  and
First Security Bank, National  Association,  as Owner Trustee, as Assignee,  and
hereby  confirms  to  Assignee  that:  (i)  all   representations,   warranties,
indemnities  and agreements of  Manufacturer  under the Purchase  Agreement with
respect to the  Aircraft  shall  inure to the  benefit of  Assignee  to the same
extent as if originally named the "Buyer" therein, except as provided by Section
2 of  the  Assignment;  (ii)  Assignee  shall  not  be  liable  for  any  of the
obligations  or duties of Assignor under the Purchase  Agreement,  nor shall the
Assignment  give rise to any  duties or  obligations  whatsoever  on the part of
Assignee  owing  to  Manufacturer,  except  as  provided  in  Section  4 of  the
Assignment; (iii) Manufacturer consents to the lease of the Aircraft by Assignee
to Assignor under the Lease, consents to the grant of a security interest in the
Aircraft  pursuant  to the Trust  Indenture  by  Assignee  and  agrees  that the
Assignment  constitutes  an agreement by Assignee as required by Article 10.2 of
the Purchase  Agreement;  and (iv) Manufacturer will continue to pay to Assignor
or its order all payments that  Manufacturer  may be required to make in respect
of the Aircraft under the Purchase Agreement unless and until Manufacturer shall
have received  written  notice from Assignee or Mortgagee  addressed to its Vice
President-Contracts  at P.O.  Box 3707,  Mail Code  21-34,  Seattle,  Washington
98124-3707,  if by mail, or to (425)  237-1706,  if by  facsimile,  that a Lease
Event of Default has occurred and is continuing, whereupon Manufacturer will not
be required  to make  further  inquiry  into the content of such notice and will
make any and all payments that it may be required  thereafter to make in respect
of the Aircraft  under the Purchase  Agreement and the right to receive that has
been assigned  under the  Assignment,  directly to Assignee at its address at 79
South Main Street,  Third Floor,  Salt Lake City,  Utah 84111,  Attn:  Corporate
Trust  Department (or, so long as the Trust  Indenture has not been  discharged,
directly to Mortgagee at its address at Rodney Square  North,  1100 North Market
Street,  Wilmington,  Delaware 19890,  Attn:  Corporate  Trust  Administration),
unless  and until  Manufacturer  shall  have  received  notice in  writing  from
Assignee or Mortgagee  that no Lease Event of Default is  continuing,  whereupon
Manufacturer  shall make all payments that  Manufacturer may be required to make
in respect of the  Aircraft  under the  Purchase  Agreement  to  Assignor or its
order, as aforesaid.

<PAGE>

            Manufacturer  hereby  represents and warrants that: (i) Manufacturer
is a corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware;  (ii) the making and  performance of the Purchase
Agreement  and this  Manufacturer  Consent  and  Agreement  ___ have  been  duly
authorized by all necessary corporate action on the part of Manufacturer, do not
require any stockholder approval and do not contravene  Manufacturer's  Restated
Certificate of  Incorporation  or By-laws or any indenture,  credit agreement or
other contractual  agreement to which  Manufacturer is a party or by which it is
bound and the making of the Purchase Agreement and this Manufacturer Consent and
Agreement ___, the giving of the warranty obligations thereunder,  do not, as to
such making or giving, contravene any law binding on Manufacturer; and (iii) the
Purchase  Agreement  constituted,  as of the  date  thereof  and  at  all  times
thereafter to and including the date of this Manufacturer  Consent and Agreement
___,  and this  Manufacturer  Consent and  Agreement  ___  constitutes,  binding
obligations of Manufacturer  enforceable against Manufacturer in accordance with
their respective terms subject to (A) the limitations of applicable  bankruptcy,
insolvency,  reorganization,  moratorium or similar laws affecting the rights of
creditors  generally and (B) general principles of equity (regardless of whether
such  enforceability  is considered in a proceeding in equity or at law),  which
principles  do not make the remedies  available at law or in equity with respect
to the  Purchase  Agreement  and this  Manufacturer  Consent and  Agreement  ___
inadequate for the practical realization of the benefits intended to be provided
thereby.  It is understood that the execution of this  Manufacturer  Consent and
Agreement ___ by  Manufacturer  is subject to the condition  that,  concurrently
with the delivery of the Aircraft to Assignee, Assignee shall lease the Aircraft
to Assignor under the Lease.

                     [This space intentionally left blank.]

<PAGE>

            THIS MANUFACTURER CONSENT AND AGREEMENT ___ SHALL IN ALL RESPECTS BE
GOVERNED BY THE INTERNAL LAWS OF THE STATE OF WASHINGTON,  INCLUDING ALL MATTERS
OF  CONSTRUCTION,  VALIDITY AND PERFORMANCE,  WITHOUT  REFERENCE TO CONFLICTS OF
LAWS PRINCIPLES.

            Dated as of _______________.

                                    THE BOEING COMPANY

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

<PAGE>

                  ENGINE MANUFACTURER CONSENT AND AGREEMENT ___

            The undersigned,  ROLLS-ROYCE plc, a corporation organized under the
laws of England whose registered  office is at 65 Buckingham  Gate,  London SWIE
6AT, England,  hereby acknowledges notice of and consents to all of the terms of
Purchase  Agreement  and Engine  Warranties  Assignment  ___ (herein  called the
"Assignment")  (the defined terms therein being  hereinafter  used with the same
meanings unless otherwise defined herein) between Continental Airlines, Inc., as
Assignor,  and First Security Bank, National  Association,  as Owner Trustee, as
Assignee.  Under the General Terms Agreement,  Engine Manufacturer has agreed to
support  certain  Rolls-Royce  Model  RB211-535E4-B-37  engines  and spare parts
therefor purchased by Assignor from Engine Manufacturer, as installed on certain
Boeing Model 757 aircraft.  Engine  Manufacturer hereby confirms to Assignor and
Assignee  that the Engine  Warranties,  as and to the extent that such relate to
the Engines,  shall inure to the benefit of Assignee  (and, so long as the Trust
Indenture  has  not  been  discharged,  Mortgagee)  to  the  same  extent  as if
originally named "Continental" in the General Terms Agreement and to the benefit
of Assignor (but only to the extent provided for in the Assignment) in each case
subject to the terms and  conditions of the  Assignment;  PROVIDED,  that Engine
Manufacturer  shall  not  owe any  liability  or  obligation  under  the  Engine
Warranties more than once in total.

            Engine Manufacturer represents and warrants that:

            1. It is a corporation  duly organized and validly  existing in good
standing under the laws of England;

            2. The making and  performance of this Engine  Manufacturer  Consent
and Agreement ___ in accordance  with its terms have been duly authorized by all
necessary  corporate action on the part of Engine  Manufacturer,  do not require
any  stockholder  approval and do not  contravene its Articles of Association or
by-laws or any debenture,  credit  agreement or other  contractual  agreement to
which Engine  Manufacturer is a party or by which it is bound or any law binding
on Engine Manufacturer;

            3. The making and performance of the Engine Warranties in accordance
with their terms have been duly authorized by all necessary  corporate action on
the part of Engine Manufacturer,  do not require any stockholder approval and do
not contravene Engine  Manufacturer's  Articles of Association or by-laws or any
debenture,  credit  agreement  or other  contractual  agreement  to which Engine
Manufacturer is a party or by which it is  bound, and do not, as  to the  making

<PAGE>

thereof,  contravene any law binding on Engine Manufacturer,  and to the best of
its knowledge,  do not as to the performance  thereof contravene any law binding
on Engine Manufacturer; and

            4. The Engine  Warranties  constituted  as of the date on which they
were made and at all times  thereafter  to and including the date of this Engine
Manufacturer Consent and Agreement ___, and this Engine Manufacturer Consent and
Agreement ___ constitute binding obligations of Engine Manufacturer  enforceable
against Engine  Manufacturer in accordance with their  respective  terms subject
to:

            (a)   the   limitations   of  applicable   bankruptcy,   insolvency,
                  reorganization,  moratorium  or  similar  laws  affecting  the
                  rights of creditors generally; and

            (b)   general  principles  of equity  (regardless  of  whether  such
                  enforceability  is  considered in a proceeding in equity or at
                  law).

                     [This space intentionally left blank.]

<PAGE>

            THIS  ENGINE  MANUFACTURER  CONSENT AND  AGREEMENT  ___ SHALL IN ALL
RESPECTS BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK, INCLUDING ALL MATTERS
OF CONSTRUCTION,  VALIDITY AND PERFORMANCE,  WITHOUT GIVING EFFECT TO PRINCIPLES
OF CONFLICTS OF LAWS.

            Dated as of ______________.

                                    ROLLS-ROYCE PLC

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

<PAGE>

                                EXHIBIT A-4-II to
                             NOTE PURCHASE AGREEMENT
                             -----------------------

              FORM OF AIRCRAFT PURCHASE AGREEMENT ASSIGNMENT - CFM

<PAGE>

 -----------------------------------------------------------------------------
|            CONFIDENTIAL: SUBJECT TO RESTRICTIONS ON DISSEMINATION           |
|   SET FORTH IN SECTION 8 OF THE PARTICIPATION AGREEMENT (AS DEFINED HEREIN) |
 -----------------------------------------------------------------------------

             PURCHASE AGREEMENT AND ENGINE WARRANTIES ASSIGNMENT ___

            PURCHASE AGREEMENT AND ENGINE WARRANTIES ASSIGNMENT ___, dated as of
__________,   between  Continental   Airlines,   Inc.,  a  Delaware  corporation
("Assignor"),  and First Security Bank, National Association, a national banking
association,  not in  its  individual  capacity  but  solely  as  Owner  Trustee
("Assignee")  under  Trust  Agreement  ___ dated as of  __________  (the  "Trust
Agreement"),  between the Owner Participant  named therein and Assignee,  in its
individual capacity,  and otherwise not in its individual capacity but solely as
trustee thereunder.

            Assignor and Manufacturer (as such term and other  capitalized terms
are hereinafter defined) are parties to the Purchase Agreement, providing, among
other things,  for the manufacture  and sale by  Manufacturer or  Manufacturer's
wholly owned  subsidiary  to Assignor of certain  aircraft,  engines and related
equipment,  including the Aircraft. Assignor and Engine Manufacturer are parties
to the General Terms  Agreement,  containing,  among other terms and conditions,
the Engine Warranties.

            Assignee  wishes to acquire the Aircraft and Assignor,  on the terms
and conditions  hereinafter set forth, is willing to assign to Assignee  certain
of Assignor's rights and interests under the Purchase  Agreement and the General
Terms  Agreement  and  Assignee  is  willing  to  accept  such  assignment,   as
hereinafter set forth.

                                   AGREEMENTS

            The parties hereto agree as follows:

            Section 1. DEFINITIONS. For all purposes of this Assignment,  except
as otherwise  expressly provided or unless the context otherwise  requires,  the
following terms shall have the following meanings:

            AIRCRAFT - The Boeing Model 737-___ aircraft bearing  Manufacturer's
Serial No. _______ and U.S. Registration No. __________, to be financed pursuant
to the Participation Agreement, including the Engines.

<PAGE>

            ENGINES   -  Two  CFM  Model   ________   series   engines   bearing
manufacturer's serial numbers ________ and ________, respectively,  installed on
the Aircraft.

            ENGINE   MANUFACTURER   -  CFM   International,   Inc.,  a  Delaware
corporation, and its successors and assigns.

            ENGINE  WARRANTIES - Engine  Manufacturer's  "New Engine  Warranty,"
"New Parts Warranty,"  "Ultimate Life Warranty" and "Campaign Change  Warranty,"
as set forth in the Engine  Manufacturer's  Engine  Product  Support  Plan which
forms a part of the General Terms  Agreement,  and as limited by the  applicable
terms of the General Terms Agreement and such Engine Product
Support Plan.

            GENERAL TERMS AGREEMENT - The Agreement No. 6-7075, dated as of June
10, 1985, by and between Engine Manufacturer and Assignor, including the "Engine
Product  Support  Plan" at Exhibit B thereto,  insofar  as such  Engine  Product
Support Plan relates to the Engine Warranties,  but excluding any and all letter
agreements attached thereto, to the extent that such General Terms Agreement and
such  Exhibit  relate  to the  Engines,  as such  General  Terms  Agreement  may
hereafter be amended,  supplemented  and modified to the extent permitted by the
terms of this Assignment to the extent relating to the Engines.

            LEASE - The Lease  Agreement ___, dated as of __________,  as at any
time  amended,  supplemented  and modified,  between  Assignee,  as lessor,  and
Assignor, as lessee, providing for the lease of the Aircraft.

            MANUFACTURER - The Boeing Company, a Delaware  corporation,  and its
successors and assigns.

            PARTICIPATION  AGREEMENT - The Participation Agreement ___, dated as
of ___________, among Assignor, the Participants,  Assignee and Mortgagee, as at
any time amended, supplemented and modified.

            PURCHASE  AGREEMENT - Purchase  Agreement  No. 1951,  dated July 23,
1996, between Manufacturer and Assignor,  providing, among other things, for the
manufacture  and sale by  Manufacturer  to Assignor of certain  Boeing Model 737
aircraft  (including the Aircraft) and including as part thereof  Exhibits A, B,
D, E and F thereto, but excluding all other exhibits and letter and supplemental
agreements,  to the extent that such Purchase Agreement and such Exhibits relate
to  the  Aircraft,   as  such  Purchase  Agreement  may  hereafter  be  amended,
supplemented  and  modified  to the  extent  permitted  by  the  terms  of  this
Assignment.

<PAGE>

            Capitalized  terms  used  but not  defined  herein  shall  have  the
respective  meanings  set  forth or  incorporated  by  reference,  and  shall be
construed  and  interpreted  in  the  manner  described,  in  the  Participation
Agreement.

            Section 2. ASSIGNMENT.  Assignor does hereby sell, assign,  transfer
and set over unto  Assignee  and its  successors  and  permitted  assigns all of
Assignor's rights and interests in and to the Purchase Agreement, as and only to
the extent  that the same  relates to the  Aircraft,  and in and to the  General
Terms Agreement,  as and only to the extent that the Engine Warranties contained
therein relate to the Engines,  except to the extent reserved  below,  including
without  limitation in such  assignment (a) all claims for damages in respect of
the Aircraft and the Engines  arising as a result of any default by Manufacturer
under the  Purchase  Agreement  or Engine  Manufacturer  or any other  vendor or
supplier of other parts or equipment installed on or in the Aircraft,  including
without  limitation  all warranty  service life policies,  aircraft  performance
guarantees and indemnity  provisions contained in the Purchase Agreement and the
Engine Warranties, and all claims arising thereunder, in respect of the Aircraft
and the Engines, (b) any and all rights of Assignor to compel performance of the
terms of the  Purchase  Agreement  in  respect  of the  Aircraft  and the Engine
Warranties  in respect of the  Engines  and (c) the right to  purchase  and take
title to the Aircraft pursuant to the Purchase Agreement; reserving to Assignor,
however, with respect to the Aircraft and each Engine, (i) all rights to receive
any credits due to Assignor  with respect to the purchase  price of the Aircraft
pursuant to the Purchase  Agreement  and of the Engines  pursuant to the General
Terms Agreement,  (ii) all of Assignor's  rights and interests in or arising out
of any  payments or  deposits  made  relating  to the  Aircraft or to be made by
Assignor  on amounts  credited  or to be  credited  or paid or to be paid by the
Manufacturer  to the  Assignor in respect of the  Aircraft and (iii) so long and
only so long as the  Aircraft  and each Engine shall be subject to the Lease and
no Lease Event of Default shall have occurred and be continuing thereunder,  the
rights (A) to demand, accept and retain all rights in and to all property (other
than the Aircraft),  data and services that Manufacturer or Engine  Manufacturer
is obligated to provide or does  provide  pursuant to the Purchase  Agreement or
the General  Terms  Agreement,  as the case may be, and (B) to obtain  services,
training,  data and  demonstration  and test  flights  pursuant to the  Purchase
Agreement or the General Terms Agreement, as the case may be.

            Assignee hereby accepts such assignment subject to the terms hereof.
Assignor has furnished a true copy of the Purchase  Agreement and a true copy of
the General Terms Agreement to Assignee and has specifically directed Assignee's

<PAGE>

attention to Paragraph 10 of Part A,  Paragraph 5 of Part C, Paragraph 3 of Part
D,  Paragraph 2 of Part D-1,  Paragraph 5 of Part F-1, and Paragraph 9 and 10 of
Part F-2 of Exhibit B to the Purchase Agreement.

            Section 3.  EXERCISE OF RIGHTS OF "BUYER" UNDER  PURCHASE  AGREEMENT
AND OF "AIRLINE" UNDER GENERAL TERMS AGREEMENT.  Notwithstanding  the foregoing,
if and so  long  as no  Lease  Event  of  Default  shall  have  occurred  and be
continuing,  Assignee authorizes Assignor, to the exclusion of Assignee,  during
the Term, to exercise in Assignor's name all rights and powers of the "Buyer" in
respect of the Aircraft  under the Purchase  Agreement  and of the  "Airline" in
respect of each Engine  under the General  Terms  Agreement,  and of Assignee in
respect  of a default  by any  vendor or  supplier  of parts and  equipment  (as
specified  in clause  (a) of  Section 2 above)  and to retain  any  recovery  or
benefit  resulting from the  enforcement of any warranty or indemnity  under the
Purchase  Agreement or the General Terms Agreement in respect of the Aircraft or
each  Engine,  as the case may be,  except that  Assignor may not enter into any
change order or other  amendment,  modification  or  supplement  to the Purchase
Agreement  without the written consent or  countersignature  of Assignee if such
change order,  amendment,  modification  or  supplement  would (i) result in any
rescission,  cancellation or termination of the Purchase Agreement in respect of
the  Aircraft or (ii)  materially  diminish  the rights  assigned  hereunder  to
Assignee.  Assignee agrees that, as between  Assignee and Manufacturer or Engine
Manufacturer,  as the case may be (and without  affecting  Assignor's  duties or
obligations   under  the   Participation   Agreement  or  the  Lease),   neither
Manufacturer  nor Engine  Manufacturer,  as the case may be,  shall be deemed to
have  knowledge of any Lease  Default,  Lease Event of Default,  declaration  of
default or the discontinuance or remedy thereof or the Aircraft or either Engine
being no longer  subject to the Lease or any change in the authority of Assignor
or  Assignee,  as the case may be, to  exercise  any of the  rights  established
hereunder  unless and until  Manufacturer  shall have  received  written  notice
thereof from Assignee or Mortgagee  addressed to its Vice  President - Contracts
at P.O. Box 3707, Mail Code 21-34, Seattle,  Washington 98124-2207,  if by mail,
or to (425) 237-1706,  if by facsimile,  or, in the case of Engine Manufacturer,
Engine  Manufacturer shall have received written notice thereof from Assignee or
Mortgagee  addressed  to its  Commercial  Contract  Director at P.O.  Box 15514,
Cincinnati,  Ohio 45215-6301, if by mail, or to (513) 243-1345, if by facsimile.
So long as Manufacturer and Engine Manufacturer act in good faith,  Manufacturer
and  Engine  Manufacturer  may  rely  conclusively  on any such  notice  without
inquiring as to the accuracy of, or the  entitlement of the party to give,  such
notice.

<PAGE>

            The Engine Manufacturer shall not be deemed to have knowledge of the
replacement of an Engine with another CFM engine,  until the Engine Manufacturer
has received written notice thereof. Such notice shall include the serial number
of the Engine being  replaced,  as well as the serial number of the  replacement
Engine and shall be sent to: Lease Pool Manager,  Customer Support Operation, GE
Aircraft Engines, 111 Merchant Street, Room 450, Cincinnati, Ohio 45246.

            Section 4. CERTAIN AGREEMENTS. It is expressly agreed that, anything
herein contained to the contrary notwithstanding:

            (a) Assignor  shall at all times remain  liable (i) to  Manufacturer
      under the Purchase  Agreement to perform all the duties and obligations of
      the "Buyer"  thereunder and (ii) to Engine  Manufacturer under the General
      Terms Agreement to perform all the duties and obligations of the "Airline"
      thereunder,  in each case to the same extent as if this Assignment had not
      been executed,

            (b) the exercise by Assignee of any of the rights assigned hereunder
      shall  not  release  Assignor  from any of its  duties or  obligations  to
      Manufacturer under the Purchase Agreement or to Engine  Manufacturer under
      the General  Terms  Agreement  except to the extent that such  exercise by
      Assignee shall constitute performance of such duties and obligations, and

            (c)  except as  provided  in the next  sentence,  none of  Assignee,
      Mortgagee or any Participant  shall have any obligation or liability under
      the  Purchase  Agreement or the General  Terms  Agreement by reason of, or
      arising  out of, this  Assignment  or be  obligated  to perform any of the
      obligations  or duties of Assignor  under the  Purchase  Agreement  or the
      General Terms  Agreement or to make any payment  thereunder or to make any
      inquiry as to the sufficiency of any payment received by any of them or to
      present  or file any  claim or to take any  other  action  to  collect  or
      enforce any claim for any payment assigned hereunder.

Anything  contained in this Assignment,  the Consent and Agreement or the Engine
Consent and  Agreement to the contrary  notwithstanding,  but without in any way
releasing  Assignor  from any of its duties or  obligations  under the  Purchase
Agreement,  the  General  Terms  Agreement  or  this  Assignment,  Assignee  and
Mortgagee  confirm  for the  benefit of  Manufacturer  and Engine  Manufacturer,
respectively,  that,  insofar as the provisions of the Purchase Agreement or the
Engine Warranties relate to the Aircraft or the Engines,  as the case may be, in

<PAGE>

exercising any rights under the Purchase Agreement or the Engine Warranties,  or
in making any claim with  respect to the  Aircraft or other  goods and  services
delivered  or to be delivered  pursuant to the Purchase  Agreement or the Engine
Warranties,  the terms and  conditions of the Purchase  Agreement and the Engine
Warranties  including,  without  limitation,  the  Disclaimer  and  Release  and
Exclusion of Liabilities  provisions of Article 12, including without limitation
Exhibit B (the  "Product  Assurance  Document")  and  Exhibit  C (the  "Customer
Support  Document")  of the  Purchase  Agreement  shall apply to, and be binding
upon, Assignee and Mortgagee to the same extent as Assignor.

            Section  5.  PRESERVATION  OF  RIGHTS.  Nothing  contained  in  this
Assignment  shall in any way  diminish  or limit the  provisions  of  Assignor's
indemnity  in  Section 9 of the  Participation  Agreement  with  respect  to any
liability of Assignee to  Manufacturer  in any way relating to or arising out of
the Purchase  Agreement.  Nothing  contained in this  Assignment  shall  subject
Manufacturer  or Engine  Manufacturer to any obligation or liability to which it
would not otherwise be subject under the Purchase Agreement or under the General
Terms  Agreement,  as the case may be,  or modify in any  respect  the  contract
rights of  Manufacturer  or  Engine  Manufacturer  thereunder,  except as may be
provided in the Consent and Agreement and the Engine Consent and  Agreement,  or
require  Manufacturer to divest itself of title to or possession of the Aircraft
or other goods and  services  until  delivery  thereof  and payment  therefor as
provided  in  the  Purchase   Agreement  or  subject   Manufacturer   or  Engine
Manufacturer  to any multiple or duplicative  liability or obligation  under the
Purchase  Agreement  or the  General  Terms  Agreement,  as the case may be.  No
further  assignment  of the  Engine  Warranties,  including  without  limitation
assignments for security  purposes (other than under the Trust  Indenture),  are
permitted without the express written consent of Engine Manufacturer.

            Section 6.  APPOINTMENT  OF  ATTORNEY.  Effective at any time when a
Lease  Event of  Default  shall  have  occurred  and be  continuing,  (i) unless
Assignee and Mortgagee (so long as the Lien of the Trust  Indenture has not been
discharged),  in their sole  discretion,  shall  notify  Manufacturer  or Engine
Manufacturer,  as the case may be, to the contrary,  the authorization  given to
Assignor  under  Section  3 hereof to  enforce  such  rights  and  claims  shall
henceforth  cease to be effective and Assignee and its  successors and permitted
assigns shall,  to the exclusion of Assignor,  be entitled to assert and enforce
such rights and claims as substitute party plaintiff or otherwise,  and Assignor
shall, at the request of Assignee or its successors or permitted  assigns and at
Assignor's  expense,  cooperate  with  and take  such  action  as is  reasonably
necessary to enable Assignee and its successors and permitted assigns to enforce

<PAGE>

such rights and claims, and (ii) Assignor does hereby constitute  Assignee,  its
successors  and  permitted   assigns,   Assignor's  true  and  lawful  attorney,
irrevocably,  with full power (in the name of  Assignor  or  otherwise)  to ask,
require,  demand, receive,  compound and give acquittance for any and all monies
and  claims for  monies  due and to become  due  under,  or arising  out of, the
Purchase  Agreement  in respect of the  Aircraft  or the  Engine  Warranties  in
respect of the  Engines,  as the case may be, to the  extent  that the same have
been assigned by this  Assignment  and, for such period as Assignee may exercise
rights with  respect  thereto  under this  Assignment,  to endorse any checks or
other  instruments  or orders in connection  therewith and to file any claims or
take any action or institute  (or, if previously  commenced,  assume control of)
any proceeding and to obtain any recovery in connection therewith which Assignee
may deem to be necessary or advisable in the premises.

            Section 7. OTHER ACTION.  Assignor  agrees that, at Assignor's  sole
cost and expense, at any time and from time to time, upon the written request of
Assignee or, so long as the Lien of the Trust Indenture has not been discharged,
Mortgagee,  Assignor will promptly and duly execute and deliver any and all such
further  instruments  and documents and take such further action as Assignee or,
so long as the Lien of the Trust Indenture has not been  discharged,  Mortgagee,
may reasonably  request in order to obtain the full benefits of this  Assignment
and of the rights and powers herein granted.

            Section 8. ASSIGNOR'S REPRESENTATIONS AND WARRANTIES.  Assignor does
hereby  represent and warrant that the Purchase  Agreement and the General Terms
Agreement  are in full  force and  effect  as to  Assignor  and are  enforceable
against Assignor in accordance with their respective terms. Assignor does hereby
further  represent and warrant that Assignor has, with the authorized  execution
of the Consent and Agreement and the Engine Consent and Agreement,  (i) received
all  necessary  consents to the  assignment  and  transfer  contemplated  herein
(including without limitation the assignment and transfer contemplated herein of
Assignor's rights under the Purchase  Agreement and the General Terms Agreement)
and (ii)  assuming  that the Consent and  Agreement  and the Engine  Consent and
Agreement  are in full force and  effect,  such  consents  are in full force and
effect and  Assignor  further  represents  and  warrants  that  Assignor has not
assigned  (except as  assigned  hereby) or pledged  (except  pursuant to the 737
Purchase  Agreement  Assignment dated as of November 27, 1996 between Lessee and
Manufacturer,  the Lien of which  will  have  been  released  at or prior to the
delivery of this  Agreement),  and hereby  covenants that it will not during the
Term  assign  (except as assigned  hereby) or pledge so long as this  Assignment
shall remain in effect,  the whole or any part of the rights hereby  assigned or

<PAGE>

any of its rights with respect to the Aircraft  under the Purchase  Agreement or
with  respect to the Engines  under the General  Terms  Agreement  not  assigned
hereby to anyone other than Assignee.

            Section 9. PAYMENTS.  Notwithstanding  this  Assignment and anything
herein to the contrary,  all amounts that Manufacturer or Engine Manufacturer is
obligated to pay to Assignor  under the Purchase  Agreement  with respect to the
Aircraft or under the  General  Terms  Agreement  with  respect to the  Engines,
including,  without limitation,  resulting from the enforcement of any warranty,
covenant,  representation,  indemnity or product support agreement thereunder or
the  enforcement  or exercise of any right or power  thereunder or hereunder (in
the case of  Manufacturer,  a "Manufacturer  Payment," and in the case of Engine
Manufacturer,  an  "Engine  Manufacturer  Payment")  (excluding,  however,  from
Manufacturer  Payments and Engine Manufacturer Payments any amounts Manufacturer
is obligated to pay to Assignor with respect to the rights  reserved to Assignor
in  Section  2  hereof),   will  be  payable  and  applicable  as  follows:  all
Manufacturer Payments and Engine Manufacturer Payments shall be paid to Assignor
unless and until Manufacturer or Engine Manufacturer,  as the case may be, shall
have received  written  notice as set forth in Section 3 hereof from Assignee or
Mortgagee  that a  Lease  Event  of  Default  has  occurred  and is  continuing,
whereupon  Manufacturer or Engine Manufacturer,  as the case may be, will, until
Manufacturer  or Engine  Manufacturer,  as the case may be, shall have  received
written  notice from Assignee or Mortgagee that all Lease Events of Default have
been cured or waived,  make any and all such payments  directly to Assignee (or,
so long as the Trust  Indenture  has not been  discharged  and  Manufacturer  or
Engine Manufacturer,  as the case may be, shall have received notice thereof, to
Mortgagee).  Any  amounts  received  by  Assignee  pursuant  to the  immediately
preceding sentence shall, to the extent not theretofore  applied in satisfaction
of sums  owing  to  Assignee  in  accordance  with the  terms  of the  Operative
Agreements, be held and invested as provided in Section 4.4 of the Lease.

            Section 10. ASSIGNEE'S  AGREEMENT.  Assignee agrees that, during the
Term,  except as otherwise  contemplated  by Section 2 hereof and unless a Lease
Event of Default shall have occurred and be  continuing,  it will not enter into
any agreement that would amend, modify, supplement, rescind, cancel or terminate
the Purchase Agreement or the General Terms Agreement in respect of the Aircraft
or the Engines without the prior written consent of Assignor.

            Section  11.  EXECUTION;   COUNTERPARTS,  ETC.  This  Assignment  is
executed by Assignor and Assignee  concurrently  with the execution and delivery

<PAGE>

of the Lease.  This Assignment may be executed by the parties hereto in separate
counterparts,  each of which when so executed shall be deemed to be an original,
and all of which counterparts, taken together, shall constitute one and the same
instrument.  The section  headings in this  Assignment  are for  convenience  of
reference only and shall not modify, define, expand or limit any of the terms or
provisions hereof.

            Section 12. CONFIDENTIAL TREATMENT. Assignee agrees that it will not
disclose to any third party the terms of the  Purchase  Agreement or the General
Terms  Agreement  except  (i) as  required  by  applicable  law or  governmental
regulation,  (ii) in connection  with the  financing of the  Aircraft,  (iii) as
permitted under Section 8 of the  Participation  Agreement as if this Assignment
were  specifically  referred  to  therein,  (iv) with the  consent of  Assignor,
Manufacturer  and  the  Engine  Manufacturer  (as  the  case  may  be) or (v) in
connection with any sale or lease of the Aircraft.  Assignee further agrees that
in connection with any disclosures  made as contemplated by clauses (ii) (except
in connection with the financing  contemplated by the Participation  Agreement),
(iii)  (except  as  to  clauses  (C)  and  (E)  and  (F)  of  Section  8 of  the
Participation  Agreement)  or (iv) of the  preceding  sentence,  Assignee  shall
instruct  the  entity to which  such  information  is  disclosed  to treat  such
information as confidential on the terms set forth in this Section 12.

            Section 13. ASSIGNMENT TO MORTGAGEE.  The right,  title and interest
of Assignee in and to this  Assignment  has been assigned to and is subject to a
security  interest in favor of Wilmington Trust Company,  as Mortgagee under the
Trust  Indenture,   for  the  benefit  of  the  Noteholders  and  the  Indenture
Indemnitees  referred to in such Trust Indenture,  all to the extent provided in
such Trust  Indenture.  Assignor  hereby  consents to such assignment and to the
creation of such security interest in and to this Assignment.

            SECTION 14.  GOVERNING LAW. THIS ASSIGNMENT SHALL IN ALL RESPECTS BE
GOVERNED  BY THE  LAWS OF THE  STATE  OF NEW  YORK,  INCLUDING  ALL  MATTERS  OF
CONSTRUCTION,  VALIDITY AND PERFORMANCE,  WITHOUT GIVING EFFECT TO PRINCIPLES OF
CONFLICTS OF LAWS.

                     [This space intentionally left blank.]

<PAGE>

            IN WITNESS  WHEREOF,  the parties  hereto have caused this  Purchase
Agreement and Engine Warranties Assignment ___ to be duly executed as of the day
and year first above written.

                                    CONTINENTAL AIRLINES, INC.

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

                                    FIRST SECURITY BANK, NATIONAL ASSOCIATION,
                                       not in its individual capacity but
                                       solely as Owner Trustee

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

<PAGE>

            The  undersigned,  as Mortgagee  for the benefit of the Note Holders
and Indenture  Indemnitees and as assignee of, and holder of a security interest
in, the estate,  right,  title and interest of Assignee in and to the  foregoing
Assignment  pursuant to the terms of the Trust Indenture  agrees to the terms of
the foregoing Assignment and agrees that its rights and remedies under the Trust
Indenture  shall  be  subject  to the  terms  and  conditions  of the  foregoing
Assignment,  including  Sections 4 and 5 therein,  and of the Purchase Agreement
and the General Terms Agreement.

                                    WILMINGTON TRUST COMPANY,
                                       as Mortgagee

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

<PAGE>

                     MANUFACTURER CONSENT AND AGREEMENT ___

            The undersigned, THE BOEING COMPANY, a Delaware corporation,  hereby
acknowledges  notice of and  consents to all of the terms of Purchase  Agreement
and Engine  Warranties  Assignment  ___ (herein  called the  "Assignment")  (the
defined  terms  therein being  hereinafter  used with the same  meanings  unless
otherwise defined herein) between Continental Airlines,  Inc., as Assignor,  and
First Security Bank, National  Association,  as Owner Trustee, as Assignee,  and
hereby  confirms  to  Assignee  that:  (i)  all   representations,   warranties,
indemnities  and agreements of  Manufacturer  under the Purchase  Agreement with
respect to the  Aircraft  shall  inure to the  benefit of  Assignee  to the same
extent as if originally named the "Buyer" therein, except as provided by Section
2 of  the  Assignment;  (ii)  Assignee  shall  not  be  liable  for  any  of the
obligations  or duties of Assignor under the Purchase  Agreement,  nor shall the
Assignment  give rise to any  duties or  obligations  whatsoever  on the part of
Assignee  owing  to  Manufacturer,  except  as  provided  in  Section  4 of  the
Assignment;  (iii) Manufacturer  consents to the grant of a security interest in
the  Aircraft  pursuant to the Trust  Indenture  by Assignee and agrees that the
Assignment  constitutes  an agreement by Assignee as required by Article 10.2 of
the Purchase  Agreement;  and (iv) Manufacturer will continue to pay to Assignor
or its order all payments that  Manufacturer  may be required to make in respect
of the Aircraft under the Purchase Agreement unless and until Manufacturer shall
have received written notice from Assignee or Mortgagee  addressed to its Vice -
President - Contracts at P.O.  Box 3707,  Mail Code 21-34,  Seattle,  Washington
98124-2207,  if by mail, or to (425)  237-1706,  if by  facsimile,  that a Lease
Event of Default has occurred and is continuing or the Lease has been terminated
(unless Assignor or its designee has acquired ownership of the Aircraft pursuant
to the Operative  Agreements  and Assignor has given written  notice  thereof to
Manufacturer),  whereupon  Manufacturer  will not be  required  to make  further
inquiry into the content of such notice and will make any and all payments  that
it may be  required  thereafter  to make in  respect of the  Aircraft  under the
Purchase  Agreement  and the right to receive that has been  assigned  under the
Assignment,  directly to Assignee at its address at 79 South Main Street,  Third
Floor, Salt Lake City, Utah 84111, Attn: Corporate Trust Department (or, so long
as the Trust  Indenture  has not been  discharged,  directly to Mortgagee at its
address at Rodney Square North, 1100 North Market Street,  Wilmington,  Delaware
19890,  Attn:  Corporate Trust  Administration),  unless and until  Manufacturer
shall have received  notice in writing from Assignee or Mortgagee  that no Lease
Event of Default is continuing,  whereupon  Manufacturer shall make all payments

<PAGE>

that  Manufacturer  may be required to make in respect of the Aircraft under the
Purchase Agreement to Assignor or its order, as aforesaid.

            Manufacturer  hereby  represents and warrants that: (i) Manufacturer
is a corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware;  (ii) the making and  performance of the Purchase
Agreement  and this  Manufacturer  Consent  and  Agreement  ___ have  been  duly
authorized by all necessary corporate action on the part of Manufacturer, do not
require any stockholder approval and do not contravene  Manufacturer's  Restated
Certificate of  Incorporation  or By-laws or any indenture,  credit agreement or
other contractual  agreement to which  Manufacturer is a party or by which it is
bound and the making of the Purchase Agreement and this Manufacturer Consent and
Agreement ___, the giving of the warranty obligations thereunder,  do not, as to
such making or giving, contravene any law binding on Manufacturer; and (iii) the
Purchase  Agreement  constituted,  as of the  date  thereof  and  at  all  times
thereafter to and including the date of this Manufacturer  Consent and Agreement
___,  and this  Manufacturer  Consent and  Agreement  ___  constitutes,  binding
obligations of Manufacturer  enforceable against Manufacturer in accordance with
their respective terms subject to (A) the limitations of applicable  bankruptcy,
insolvency,  reorganization,  moratorium or similar laws affecting the rights of
creditors  generally and (B) general principles of equity (regardless of whether
such  enforceability  is considered in a proceeding in equity or at law),  which
principles  do not make the remedies  available at law or in equity with respect
to the  Purchase  Agreement  and this  Manufacturer  Consent and  Agreement  ___
inadequate for the practical realization of the benefits intended to be provided
thereby.  It is understood that the execution of this  Manufacturer  Consent and
Agreement ___ by  Manufacturer  is subject to the condition  that,  concurrently
with the delivery of the Aircraft to Assignee, Assignee shall lease the Aircraft
to Assignor under the Lease.

<PAGE>

            THIS MANUFACTURER CONSENT AND AGREEMENT ___ SHALL IN ALL RESPECTS BE
GOVERNED BY THE INTERNAL LAWS OF THE STATE OF WASHINGTON,  INCLUDING ALL MATTERS
OF  CONSTRUCTION,  VALIDITY AND PERFORMANCE,  WITHOUT  REFERENCE TO CONFLICTS OF
LAWS PRINCIPLES.

            Dated as of ____________.

                                    THE BOEING COMPANY

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

<PAGE>

                  ENGINE MANUFACTURER CONSENT AND AGREEMENT ___

            The undersigned,  CFM  INTERNATIONAL  INC., a Delaware  corporation,
hereby  acknowledges  notice of and  consents  to all of the  terms of  Purchase
Agreement and Engine Warranties  Assignment ___ (herein called the "Assignment")
(the defined terms therein being  hereinafter used with the same meanings unless
otherwise defined herein) between Continental Airlines,  Inc., as Assignor,  and
First Security Bank, National Association,  as Owner Trustee, as Assignee. Under
the General Terms Agreement,  Engine  Manufacturer has agreed to support certain
CFM Model 56-7B26  engines and spare parts  therefor  purchased by Assignor from
Engine Manufacturer,  as installed on certain Boeing Model 737 aircraft.  Engine
Manufacturer   hereby   confirms  to  Assignor  and  Assignee  that  the  Engine
Warranties, as and to the extent that such relate to the Engines, shall inure to
the  benefit  of  Assignee  (and,  so long as the Trust  Indenture  has not been
discharged,  Mortgagee) to the same extent as if originally  named  "Airline" in
the General  Terms  Agreement  and to the  benefit of Assignor  (but only to the
extent  provided  for in the  Assignment)  in each case subject to the terms and
conditions of the Assignment;  PROVIDED,  that Engine Manufacturer shall not owe
any liability or obligation under the Engine Warranties more than once in total.

            Engine Manufacturer represents and warrants that:

            1. It is a corporation  duly organized and validly  existing in good
standing under the laws of the State of Delaware;

            2. The making and  performance of this Engine  Manufacturer  Consent
and Agreement ___ in accordance  with its terms have been duly authorized by all
necessary  corporate action on the part of Engine  Manufacturer,  do not require
any stockholder  approval and do not contravene its Certificate of Incorporation
or by-laws or any debenture,  credit agreement or other contractual agreement to
which Engine  Manufacturer is a party or by which it is bound or any law binding
on Engine Manufacturer;

            3. The making and performance of the Engine Warranties in accordance
with their terms have been duly authorized by all necessary  corporate action on
the part of Engine Manufacturer,  do not require any stockholder approval and do
not contravene Engine Manufacturer's  Certificate of Incorporation or by-laws or
any debenture,  credit agreement or other contractual  agreement to which Engine
Manufacturer  is a party or by which it is bound,  and do not,  as to the making

<PAGE>

thereof,  contravene any law binding on Engine Manufacturer,  and to the best of
its knowledge,  do not as to the performance  thereof contravene any law binding
on Engine Manufacturer; and

            4. The Engine  Warranties  constituted  as of the date on which they
were made and at all times  thereafter  to and including the date of this Engine
Manufacturer Consent and Agreement ___, and this Engine Manufacturer Consent and
Agreement ___ constitute binding obligations of Engine Manufacturer  enforceable
against Engine Manufacturer in accordance with their
respective terms subject to:

            (a)   the   limitations   of  applicable   bankruptcy,   insolvency,
                  reorganization,  moratorium  or  similar  laws  affecting  the
                  rights of creditors generally; and

            (b)   general  principles  of equity  (regardless  of  whether  such
                  enforceability  is  considered in a proceeding in equity or at
                  law).

                     [This space intentionally left blank.]

<PAGE>

            THIS  ENGINE  MANUFACTURER  CONSENT AND  AGREEMENT  ___ SHALL IN ALL
RESPECTS BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK, INCLUDING ALL MATTERS
OF CONSTRUCTION,  VALIDITY AND PERFORMANCE,  WITHOUT GIVING EFFECT TO PRINCIPLES
OF CONFLICTS OF LAWS.

            Dated as of _____________.

                                    CFM INTERNATIONAL, INC.

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

<PAGE>

                                 EXHIBIT A-4-III
                             NOTE PURCHASE AGREEMENT
                             -----------------------

               FORM OF AIRCRAFT PURCHASE AGREEMENT ASSIGNMENT - GE

<PAGE>

 -----------------------------------------------------------------------------
|            CONFIDENTIAL: SUBJECT TO RESTRICTIONS ON DISSEMINATION           |
|   SET FORTH IN SECTION 8 OF THE PARTICIPATION AGREEMENT (AS DEFINED HEREIN) |
 -----------------------------------------------------------------------------

             PURCHASE AGREEMENT AND ENGINE WARRANTIES ASSIGNMENT ___

            PURCHASE AGREEMENT AND ENGINE WARRANTIES ASSIGNMENT ___, dated as of
___________,   between  Continental  Airlines,   Inc.,  a  Delaware  corporation
("Assignor"),  and First Security Bank, National Association, a national banking
association,  not in  its  individual  capacity  but  solely  as  Owner  Trustee
("Assignee")  under  Trust  Agreement  ___ dated as of  ___________  (the "Trust
Agreement"),  between the Owner Participant  named therein and Assignee,  in its
individual capacity,  and otherwise not in its individual capacity but solely as
trustee thereunder.

            Assignor and Manufacturer (as such term and other  capitalized terms
are hereinafter defined) are parties to the Purchase Agreement, providing, among
other things,  for the manufacture  and sale by  Manufacturer or  Manufacturer's
wholly owned  subsidiary  to Assignor of certain  aircraft,  engines and related
equipment,  including the Aircraft. Assignor and Engine Manufacturer are parties
to the General Terms  Agreement,  containing,  among other terms and conditions,
the Engine Warranties.

            Assignee  wishes to acquire the Aircraft and Assignor,  on the terms
and conditions  hereinafter set forth, is willing to assign to Assignee  certain
of Assignor's rights and interests under the Purchase  Agreement and the General
Terms  Agreement  and  Assignee  is  willing  to  accept  such  assignment,   as
hereinafter set forth.

                                   AGREEMENTS

            The parties hereto agree as follows:

            Section 1.  DEFINITIONS.  For all purposes of this Assignment,
except as otherwise expressly provided or unless the context otherwise
requires, the following terms shall have the following meanings:

            AIRCRAFT - The Boeing Model 767-424 aircraft bearing
Manufacturer's Serial No. ______ and U.S. Registration No. N_________, to be
financed pursuant to the Participation Agreement, including the Engines.

<PAGE>

            AGTA - The Aircraft  General Terms  Agreement  AGTA-CAL  between the
Manufacturer and Lessee, dated October 10, 1997.

            ENGINES - Two General  Electric Company  CF6-80C2B8F  series engines
bearing manufacturer's serial numbers ______ and ______, respectively, installed
on the Aircraft.

            ENGINE   MANUFACTURER  -  General  Electric  Company,   a  New  York
corporation, and its successors and assigns.

            ENGINE  WARRANTIES - Engine  Manufacturer's  "New Engine  Warranty,"
"New Parts Warranty,"  "Ultimate Life Warranty" and "Campaign Change  Warranty,"
as set forth in the Engine  Manufacturer's  Engine  Product  Support  Plan which
forms a part of the General Terms  Agreement,  and as limited by the  applicable
terms of the General Terms Agreement and such Engine Product
Support Plan.

            GENERAL  TERMS  AGREEMENT - The Amended and Restated  General  Terms
Agreement  No.  6-8057,  dated as of  November 1, 1994,  by and  between  Engine
Manufacturer  and  Assignor,  including  the "Engine  Product  Support  Plan" at
Exhibit B thereto,  insofar as such Engine  Product  Support Plan relates to the
Engine Warranties, but excluding any and all letter agreements attached thereto,
to the extent that such General Terms  Agreement and such Exhibit  relate to the
Engine  Warranties,  as such General  Terms  Agreement may hereafter be amended,
supplemented  and  modified  to the  extent  permitted  by  the  terms  of  this
Assignment to the extent relating to the Engines.

            LEASE - The Lease Agreement ___, dated as of ___________,  as at any
time  amended,  supplemented  and modified,  between  Assignee,  as lessor,  and
Assignor, as lessee, providing for the lease of the Aircraft.

            MANUFACTURER - The Boeing Company, a Delaware  corporation,  and its
successors and assigns.

            PARTICIPATION  AGREEMENT - The Participation Agreement ___, dated as
of ___________, among Assignor, the Participants,  Assignee and Mortgagee, as at
any time amended, supplemented and modified.

            PURCHASE  AGREEMENT  -  Purchase  Agreement  No.  2060,  dated as of
October 10, 1997,  between  Manufacturer  and Assignor,  providing,  among other
things,  for the  manufacture  and sale by  Manufacturer  to Assignor of certain
Boeing Model  767-424  aircraft  (including  the Aircraft) and including as part
thereof  Exhibits A, B, BFE1,  EE1 and SLP1  thereto and the AGTA (as and to the

<PAGE>

extent incorporated by reference in the Purchase Agreement and including Exhibit
C to the AGTA and excluding the other  Exhibits and Letter  Agreements  hereto),
but excluding all other exhibits and letter and supplemental agreements,  to the
extent that such Purchase Agreement and such Exhibits relate to the Aircraft, as
such Purchase  Agreement may hereafter be amended,  supplemented and modified to
the extent permitted by the terms of this Assignment.

            Capitalized  terms  used  but not  defined  herein  shall  have  the
respective  meanings  set  forth or  incorporated  by  reference,  and  shall be
construed  and  interpreted  in  the  manner  described,  in  the  Participation
Agreement.

            Section 2. ASSIGNMENT.  Assignor does hereby sell, assign,  transfer
and set over unto  Assignee  and its  successors  and  permitted  assigns all of
Assignor's rights and interests in and to the Purchase Agreement, as and only to
the extent  that the same  relates to the  Aircraft,  and in and to the  General
Terms Agreement,  as and only to the extent that the Engine Warranties contained
therein relate to the Engines,  except to the extent reserved  below,  including
without  limitation in such  assignment (a) all claims for damages in respect of
the Aircraft and the Engines  arising as a result of any default by Manufacturer
under the  Purchase  Agreement  or Engine  Manufacturer  or any other  vendor or
supplier of other parts or equipment installed on or in the Aircraft,  including
without  limitation  all warranty  service life policies,  aircraft  performance
guarantees and indemnity  provisions contained in the Purchase Agreement and the
Engine Warranties, and all claims arising thereunder, in respect of the Aircraft
and the Engines, (b) any and all rights of Assignor to compel performance of the
terms of the  Purchase  Agreement  in  respect  of the  Aircraft  and the Engine
Warranties  in respect of the  Engines  and (c) the right to  purchase  and take
title to the Aircraft pursuant to the Purchase Agreement; reserving to Assignor,
however, with respect to the Aircraft and each Engine, (i) all rights to receive
any credits due to Assignor  with respect to the purchase  price of the Aircraft
pursuant to the Purchase  Agreement  and of the Engines  pursuant to the General
Terms Agreement,  (ii) all of Assignor's  rights and interests in or arising out
of any  payments or  deposits  made  relating  to the  Aircraft or to be made by
Assignor  or amounts  credited  or to be  credited  or paid or to be paid by the
Manufacturer  to the  Assignor in respect of the  Aircraft and (iii) so long and
only so long as the  Aircraft  and each Engine shall be subject to the Lease and
no Lease Event of Default shall have occurred and be continuing thereunder,  the
rights (A) to demand, accept and retain all rights in and to all property (other
than the Aircraft),  data and services that Manufacturer or Engine  Manufacturer

<PAGE>

is obligated to provide or does  provide  pursuant to the Purchase  Agreement or
the General  Terms  Agreement,  as the case may be, and (B) to obtain  services,
training,  data and  demonstration  and test  flights  pursuant to the  Purchase
Agreement or the General Terms Agreement, as the case may be.

            Assignee hereby accepts such assignment subject to the terms hereof.
Assignor has furnished a true copy of the Purchase  Agreement and a true copy of
the General Terms Agreement to Assignee and has specifically directed Assignee's
attention  to Section 12 of Part 2, Section 5 of Part 3, Section 6 of Part 5 and
Section 3 of Part 6 of Exhibit C to the AGTA.

            Section 3. EXERCISE OF RIGHTS OF "CUSTOMER" UNDER PURCHASE AGREEMENT
AND OF "AIRLINE" UNDER GENERAL TERMS AGREEMENT.  Notwithstanding  the foregoing,
if and so  long  as no  Lease  Event  of  Default  shall  have  occurred  and be
continuing,  Assignee authorizes Assignor, to the exclusion of Assignee,  during
the Term, to exercise in Assignor's name all rights and powers of the "Customer"
in respect of the Aircraft under the Purchase  Agreement and of the "Airline" in
respect of each Engine  under the General  Terms  Agreement,  and of Assignee in
respect  of a default  by any  vendor or  supplier  of parts and  equipment  (as
specified  in clause  (a) of  Section 2 above)  and to retain  any  recovery  or
benefit  resulting from the  enforcement of any warranty or indemnity  under the
Purchase  Agreement or the General Terms Agreement in respect of the Aircraft or
each  Engine,  as the case may be,  except that  Assignor may not enter into any
change order or other  amendment,  modification  or  supplement  to the Purchase
Agreement  without the written consent or  countersignature  of Assignee if such
change order,  amendment,  modification  or  supplement  would (i) result in any
rescission,  cancellation or termination of the Purchase Agreement in respect of
the  Aircraft or (ii)  materially  diminish  the rights  assigned  hereunder  to
Assignee.  Assignee agrees that, as between  Assignee and Manufacturer or Engine
Manufacturer,  as the case may be (and without  affecting  Assignor's  duties or
obligations   under  the   Participation   Agreement  or  the  Lease),   neither
Manufacturer  nor Engine  Manufacturer,  as the case may be,  shall be deemed to
have  knowledge of any Lease  Default,  Lease Event of Default,  declaration  of
default or the discontinuance or remedy thereof or the Aircraft or either Engine
being no longer  subject to the Lease or any change in the authority of Assignor
or  Assignee,  as the case may be, to  exercise  any of the  rights  established
hereunder  unless and until  Manufacturer  shall have  received  written  notice
thereof from Assignee or Mortgagee  addressed to its Vice  President - Contracts

<PAGE>

at P.O. Box 3707, Mail Code 21-34, Seattle,  Washington 98124-2207,  if by mail,
or to (425) 237-1706,  if by facsimile,  or, in the case of Engine Manufacturer,
Engine  Manufacturer shall have received written notice thereof from Assignee or
Mortgagee addressed to General Electric Company, GE Aircraft Engines, One Neuman
Way, Cincinnati, Ohio 45215-6301,  Attention: Director, Commercial Contracts, if
by facsimile. So long as Manufacturer and Engine Manufacturer act in good faith,
Manufacturer and Engine  Manufacturer  may rely  conclusively on any such notice
without  inquiring  as to the accuracy  of, or the  entitlement  of the party to
give, such notice.

            The Engine Manufacturer shall not be deemed to have knowledge of the
replacement  of an Engine  with  another  CF6-80C2B8F  engine,  until the Engine
Manufacturer has received written notice thereof.  Such notice shall include the
serial number of the Engine being replaced,  as well as the serial number of the
replacement  Engine and shall be sent to: Lease Pool Manager,  Customer  Support
Operation, GE Aircraft Engines, 111 Merchant Street, Room 450, Cincinnati,  Ohio
45246.

            Section 4. CERTAIN AGREEMENTS. It is expressly agreed that, anything
herein contained to the contrary notwithstanding:

            (a) Assignor  shall at all times remain  liable (i) to  Manufacturer
      under the Purchase  Agreement to perform all the duties and obligations of
      the  "Customer"  thereunder  and (ii) to  Engine  Manufacturer  under  the
      General Terms  Agreement to perform all the duties and  obligations of the
      "Airline"  thereunder,  in  each  case  to  the  same  extent  as if  this
      Assignment had not been executed,

            (b) the exercise by Assignee of any of the rights assigned hereunder
      shall  not  release  Assignor  from any of its  duties or  obligations  to
      Manufacturer under the Purchase Agreement or to Engine  Manufacturer under
      the General  Terms  Agreement  except to the extent that such  exercise by
      Assignee shall constitute performance of such duties and obligations, and

            (c)  except as  provided  in the next  sentence,  none of  Assignee,
      Mortgagee or any Participant  shall have any obligation or liability under
      the  Purchase  Agreement or the General  Terms  Agreement by reason of, or
      arising  out of, this  Assignment  or be  obligated  to perform any of the
      obligations  or duties of Assignor  under the  Purchase  Agreement  or the
      General Terms  Agreement or to make any payment  thereunder or to make any

<PAGE>

      inquiry as to the sufficiency of any payment received by any of them or to
      present  or file any  claim or to take any  other  action  to  collect  or
      enforce any claim for any payment assigned hereunder.

Anything  contained in this Assignment,  the Consent and Agreement or the Engine
Consent and  Agreement to the contrary  notwithstanding,  but without in any way
releasing  Assignor  from any of its duties or  obligations  under the  Purchase
Agreement,  the  General  Terms  Agreement  or  this  Assignment,  Assignee  and
Mortgagee  confirm  for the  benefit of  Manufacturer  and Engine  Manufacturer,
respectively,  that,  insofar as the provisions of the Purchase Agreement or the
Engine Warranties relate to the Aircraft or the Engines,  as the case may be, in
exercising any rights under the Purchase Agreement or the Engine Warranties,  or
in making any claim with  respect to the  Aircraft or other  goods and  services
delivered  or to be delivered  pursuant to the Purchase  Agreement or the Engine
Warranties,  the terms and  conditions of the Purchase  Agreement and the Engine
Warranties  including,  without  limitation,  the Disclaimer and Release and the
Exclusion of Consequential and Other Damages  provisions of Article 11 of Part 2
of Exhibit C and Article 8 to the AGTA,  including without  limitation Exhibit B
(the "Product Assurance Document") shall apply to, and be binding upon, Assignee
and Mortgagee to the same extent as Assignor.

            Section  5.  PRESERVATION  OF  RIGHTS.  Nothing  contained  in  this
Assignment  shall in any way  diminish  or limit the  provisions  of  Assignor's
indemnity  in  Section 9 of the  Participation  Agreement  with  respect  to any
liability of Assignee to  Manufacturer  in any way relating to or arising out of
the Purchase  Agreement.  Nothing  contained in this  Assignment  shall  subject
Manufacturer  or Engine  Manufacturer to any obligation or liability to which it
would not otherwise be subject under the Purchase Agreement or under the General
Terms  Agreement,  as the case may be,  or modify in any  respect  the  contract
rights of  Manufacturer  or  Engine  Manufacturer  thereunder,  except as may be
provided in the Consent and Agreement and the Engine Consent and  Agreement,  or
require  Manufacturer to divest itself of title to or possession of the Aircraft
or other goods and  services  until  delivery  thereof  and payment  therefor as
provided  in  the  Purchase   Agreement  or  subject   Manufacturer   or  Engine
Manufacturer  to any multiple or duplicative  liability or obligation  under the
Purchase  Agreement  or the  General  Terms  Agreement,  as the case may be.  No
further  assignment  of the  Engine  Warranties,  including  without  limitation
assignments for security  purposes (other than under the Trust  Indenture),  are
permitted without the express written consent of Engine Manufacturer.

<PAGE>

            Section 6.  APPOINTMENT  OF  ATTORNEY.  Effective at any time when a
Lease  Event of  Default  shall  have  occurred  and be  continuing,  (i) unless
Assignee and Mortgagee (so long as the Lien of the Trust  Indenture has not been
discharged),  in their sole  discretion,  shall  notify  Manufacturer  or Engine
Manufacturer,  as the case may be, to the contrary,  the authorization  given to
Assignor  under  Section  3 hereof to  enforce  such  rights  and  claims  shall
henceforth  cease to be effective and Assignee and its  successors and permitted
assigns shall,  to the exclusion of Assignor,  be entitled to assert and enforce
such rights and claims as substitute party plaintiff or otherwise,  and Assignor
shall, at the request of Assignee or its successors or permitted  assigns and at
Assignor's  expense,  cooperate  with  and take  such  action  as is  reasonably
necessary to enable Assignee and its successors and permitted assigns to enforce
such rights and claims, and (ii) Assignor does hereby constitute  Assignee,  its
successors  and  permitted   assigns,   Assignor's  true  and  lawful  attorney,
irrevocably,  with full power (in the name of  Assignor  or  otherwise)  to ask,
require,  demand, receive,  compound and give acquittance for any and all monies
and  claims for  monies  due and to become  due  under,  or arising  out of, the
Purchase  Agreement  in respect of the  Aircraft  or the  Engine  Warranties  in
respect of the  Engines,  as the case may be, to the  extent  that the same have
been assigned by this  Assignment  and, for such period as Assignee may exercise
rights with  respect  thereto  under this  Assignment,  to endorse any checks or
other  instruments  or orders in connection  therewith and to file any claims or
take any action or institute  (or, if previously  commenced,  assume control of)
any proceeding and to obtain any recovery in connection therewith which Assignee
may deem to be necessary or advisable in the premises.

            Section 7. OTHER ACTION.  Assignor  agrees that, at Assignor's  sole
cost and expense, at any time and from time to time, upon the written request of
Assignee or, so long as the Lien of the Trust Indenture has not been discharged,
Mortgagee,  Assignor will promptly and duly execute and deliver any and all such
further  instruments  and documents and take such further action as Assignee or,
so long as the Lien of the Trust Indenture has not been  discharged,  Mortgagee,
may reasonably  request in order to obtain the full benefits of this  Assignment
and of the rights and powers herein granted.

            Section 8. ASSIGNOR'S REPRESENTATIONS AND WARRANTIES.  Assignor does
hereby  represent and warrant that the Purchase  Agreement and the General Terms
Agreement  are in full  force and  effect  as to  Assignor  and are  enforceable
against Assignor in accordance with their respective terms. Assignor does hereby

<PAGE>

further  represent and warrant that Assignor has, with the authorized  execution
of the Consent and Agreement and the Engine Consent and Agreement,  (i) received
all  necessary  consents to the  assignment  and  transfer  contemplated  herein
(including without limitation the assignment and transfer contemplated herein of
Assignor's rights under the Purchase  Agreement and the General Terms Agreement)
and (ii)  assuming  that the Consent and  Agreement  and the Engine  Consent and
Agreement  are in full force and  effect,  such  consents  are in full force and
effect and  Assignor  further  represents  and  warrants  that  Assignor has not
assigned  (except as  assigned  hereby) or pledged  (except  pursuant to the 767
Purchase  Agreement  Assignment  dated as of October 10, 1997 between Lessee and
Manufacturer,  the Lien of which  will  have  been  released  at or prior to the
delivery of this  Agreement),  and hereby  covenants that it will not during the
Term  assign  (except as assigned  hereby) or pledge so long as this  Assignment
shall remain in effect,  the whole or any part of the rights hereby  assigned or
any of its rights with respect to the Aircraft  under the Purchase  Agreement or
with  respect to the Engines  under the General  Terms  Agreement  not  assigned
hereby to anyone other than Assignee.

            Section 9. PAYMENTS.  Notwithstanding  this  Assignment and anything
herein to the contrary,  all amounts that Manufacturer or Engine Manufacturer is
obligated to pay to Assignor  under the Purchase  Agreement  with respect to the
Aircraft or under the  General  Terms  Agreement  with  respect to the  Engines,
including,  without limitation,  resulting from the enforcement of any warranty,
covenant,  representation,  indemnity or product support agreement thereunder or
the  enforcement  or exercise of any right or power  thereunder or hereunder (in
the case of  Manufacturer,  a "Manufacturer  Payment," and in the case of Engine
Manufacturer,  an  "Engine  Manufacturer  Payment")  (excluding,  however,  from
Manufacturer  Payments and Engine Manufacturer Payments any amounts Manufacturer
is obligated to pay to Assignor with respect to the rights  reserved to Assignor
in  Section  2  hereof),   will  be  payable  and  applicable  as  follows:  all
Manufacturer Payments and Engine Manufacturer Payments shall be paid to Assignor
unless and until Manufacturer or Engine Manufacturer,  as the case may be, shall
have received  written  notice as set forth in Section 3 hereof from Assignee or
Mortgagee  that a  Lease  Event  of  Default  has  occurred  and is  continuing,
whereupon  Manufacturer or Engine Manufacturer,  as the case may be, will, until
Manufacturer  or Engine  Manufacturer,  as the case may be, shall have  received
written  notice from Assignee or Mortgagee that all Lease Events of Default have
been cured or waived,  make any and all such payments  directly to Assignee (or,
so long as the Trust  Indenture  has not been  discharged  and  Manufacturer  or

<PAGE>

Engine Manufacturer,  as the case may be, shall have received notice thereof, to
Mortgagee).  Any  amounts  received  by  Assignee  pursuant  to the  immediately
preceding sentence shall, to the extent not theretofore  applied in satisfaction
of sums  owing  to  Assignee  in  accordance  with the  terms  of the  Operative
Agreements, be held and invested as provided in Section 4.4 of the Lease.

            Section 10. ASSIGNEE'S  AGREEMENT.  Assignee agrees that, during the
Term,  except as otherwise  contemplated  by Section 2 hereof and unless a Lease
Event of Default shall have occurred and be  continuing,  it will not enter into
any agreement that would amend, modify, supplement, rescind, cancel or terminate
the Purchase Agreement or the General Terms Agreement in respect of the Aircraft
or the Engines without the prior written consent of Assignor.

            Section  11.  EXECUTION;   COUNTERPARTS,  ETC.  This  Assignment  is
executed by Assignor and Assignee  concurrently  with the execution and delivery
of the Lease.  This Assignment may be executed by the parties hereto in separate
counterparts,  each of which when so executed shall be deemed to be an original,
and all of which counterparts, taken together, shall constitute one and the same
instrument.  The section  headings in this  Assignment  are for  convenience  of
reference only and shall not modify, define, expand or limit any of the terms or
provisions hereof.

            Section 12. CONFIDENTIAL TREATMENT. Assignee agrees that it will not
disclose to any third party the terms of the  Purchase  Agreement or the General
Terms  Agreement  except  (i) as  required  by  applicable  law or  governmental
regulation,  (ii) in connection  with the  financing of the  Aircraft,  (iii) as
permitted under Section 8 of the  Participation  Agreement as if this Assignment
were  specifically  referred  to  therein,  (iv) with the  consent of  Assignor,
Manufacturer  and  the  Engine  Manufacturer  (as  the  case  may  be) or (v) in
connection with any sale or lease of the Aircraft.  Assignee further agrees that
in connection with any disclosures  made as contemplated by clauses (ii) (except
in connection with the financing  contemplated by the Participation  Agreement),
(iii)  (except  as  to  clauses  (C)  and  (E)  and  (F)  of  Section  8 of  the
Participation  Agreement)  or (iv) of the  preceding  sentence,  Assignee  shall
instruct  the  entity to which  such  information  is  disclosed  to treat  such
information as confidential on the terms set forth in this Section 12.

            Section 13. ASSIGNMENT TO MORTGAGEE.  The right,  title and interest
of Assignee in and to this  Assignment  has been assigned to and is subject to a

<PAGE>

security  interest in favor of Wilmington Trust Company,  as Mortgagee under the
Trust  Indenture,   for  the  benefit  of  the  Noteholders  and  the  Indenture
Indemnitees  referred to in such Trust Indenture,  all to the extent provided in
such Trust  Indenture.  Assignor  hereby  consents to such assignment and to the
creation of such security interest in and to this Assignment.

            SECTION 14.  GOVERNING LAW. THIS ASSIGNMENT SHALL IN ALL RESPECTS BE
GOVERNED  BY THE  LAWS OF THE  STATE  OF NEW  YORK,  INCLUDING  ALL  MATTERS  OF
CONSTRUCTION,  VALIDITY AND PERFORMANCE,  WITHOUT GIVING EFFECT TO PRINCIPLES OF
CONFLICTS OF LAWS.

                     [This space intentionally left blank.]

<PAGE>

            IN WITNESS  WHEREOF,  the parties  hereto have caused this  Purchase
Agreement and Engine Warranties Assignment ___ to be duly executed as of the day
and year first above written.

                                    CONTINENTAL AIRLINES, INC.

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

                                    FIRST SECURITY BANK, NATIONAL ASSOCIATION,
                                      not in its individual capacity
                                      but solely as Owner Trustee

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

<PAGE>

           The  undersigned,  as Mortgagee  for the benefit of the Note Holders
and Indenture  Indemnitees and as assignee of, and holder of a security interest
in, the estate,  right,  title and interest of Assignee in and to the  foregoing
Assignment  pursuant to the terms of the Trust Indenture  agrees to the terms of
the foregoing Assignment and agrees that its rights and remedies under the Trust
Indenture  shall  be  subject  to the  terms  and  conditions  of the  foregoing
Assignment,  including  Sections 4 and 5 therein,  and of the Purchase Agreement
and the General Terms Agreement.

                                    WILMINGTON TRUST COMPANY,
                                      as Mortgagee

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

<PAGE>

                       MANUFACTURER CONSENT AND AGREEMENT
                       ----------------------------------

            The undersigned, THE BOEING COMPANY, a Delaware corporation,  hereby
acknowledges  notice of and  consents to all of the terms of Purchase  Agreement
and Engine  Warranties  Assignment  ___ (herein  called the  "Assignment")  (the
defined  terms  therein being  hereinafter  used with the same  meanings  unless
otherwise defined herein) between Continental Airlines,  Inc., as Assignor,  and
First Security Bank, National  Association,  as Owner Trustee, as Assignee,  and
hereby  confirms  to  Assignee  that:  (i)  all   representations,   warranties,
indemnities  and agreements of  Manufacturer  under the Purchase  Agreement with
respect to the  Aircraft  shall  inure to the  benefit of  Assignee  to the same
extent as if  originally  named the  "Customer"  therein,  except as provided by
Section 2 of the  Assignment;  (ii) Assignee  shall not be liable for any of the
obligations  or duties of Assignor under the Purchase  Agreement,  nor shall the
Assignment  give rise to any  duties or  obligations  whatsoever  on the part of
Assignee  owing  to  Manufacturer,  except  as  provided  in  Section  4 of  the
Assignment;  (iii) Manufacturer  consents to the grant of a security interest in
the  Aircraft  pursuant to the Trust  Indenture  by Assignee and agrees that the
Assignment  constitutes  an  agreement by Assignee as required by Article 9.2 of
the AGTA;  and (iv)  Manufacturer  will continue to pay to Assignor or its order
all  payments  that  Manufacturer  may be  required  to make in  respect  of the
Aircraft under the Purchase  Agreement unless and until  Manufacturer shall have
received  written  notice from  Assignee or  Mortgagee  addressed  to its Vice -
President - Contracts at P.O.  Box 3707,  Mail Code 21-34,  Seattle,  Washington
98124-2207,  if by mail, or to (425)  237-1706,  if by  facsimile,  that a Lease
Event of Default has occurred and is continuing, whereupon Manufacturer will not
be required  to make  further  inquiry  into the content of such notice and will
make any and all payments that it may be required  thereafter to make in respect
of the Aircraft  under the Purchase  Agreement and the right to receive that has
been assigned  under the  Assignment,  directly to Assignee at its address at 79
South Main Street,  Third Floor,  Salt Lake City,  Utah 84111,  Attn:  Corporate
Trust  Department (or, so long as the Trust  Indenture has not been  discharged,
directly to Mortgagee at its address at Rodney Square  North,  1100 North Market
Street,  Wilmington,  Delaware 19890,  Attn:  Corporate  Trust  Administration),
unless  and until  Manufacturer  shall  have  received  notice in  writing  from
Assignee or Mortgagee  that no Lease Event of Default is  continuing,  whereupon
Manufacturer  shall make all payments that  Manufacturer may be required to make
in respect of the  Aircraft  under the  Purchase  Agreement  to  Assignor or its
order, as aforesaid.

<PAGE>

            Manufacturer  hereby  represents and warrants that: (i) Manufacturer
is a corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware;  (ii) the making and  performance of the Purchase
Agreement  and this  Manufacturer  Consent  and  Agreement  ___ have  been  duly
authorized by all necessary corporate action on the part of Manufacturer, do not
require any stockholder approval and do not contravene  Manufacturer's  Restated
Certificate of  Incorporation  or By-laws or any indenture,  credit agreement or
other contractual  agreement to which  Manufacturer is a party or by which it is
bound and the making of the Purchase Agreement and this Manufacturer Consent and
Agreement ___, the giving of the warranty obligations thereunder,  do not, as to
such making or giving, contravene any law binding on Manufacturer; and (iii) the
Purchase  Agreement  constituted,  as of the  date  thereof  and  at  all  times
thereafter to and including the date of this Manufacturer  Consent and Agreement
___,  and this  Manufacturer  Consent and  Agreement  ___  constitutes,  binding
obligations of Manufacturer  enforceable against Manufacturer in accordance with
their respective terms subject to (A) the limitations of applicable  bankruptcy,
insolvency,  reorganization,  moratorium or similar laws affecting the rights of
creditors  generally and (B) general principles of equity (regardless of whether
such  enforceability  is considered in a proceeding in equity or at law),  which
principles  do not make the remedies  available at law or in equity with respect
to the  Purchase  Agreement  and this  Manufacturer  Consent and  Agreement  ___
inadequate for the practical realization of the benefits intended to be provided
thereby.  It is understood that the execution of this  Manufacturer  Consent and
Agreement ___ by  Manufacturer  is subject to the condition  that,  concurrently
with the delivery of the Aircraft to Assignee, Assignee shall lease the Aircraft
to Assignor under the Lease.

<PAGE>

            THIS MANUFACTURER CONSENT AND AGREEMENT ___ SHALL IN ALL RESPECTS BE
GOVERNED BY THE INTERNAL LAWS OF THE STATE OF WASHINGTON,  INCLUDING ALL MATTERS
OF  CONSTRUCTION,  VALIDITY AND PERFORMANCE,  WITHOUT  REFERENCE TO CONFLICTS OF
LAWS PRINCIPLES.

            Dated as of _________ __, ____.

                                    THE BOEING COMPANY

                                    By
                                      -----------------------------------------
                                      Name:
                                      Title:
                                      MSN:  ______

<PAGE>

                    ENGINE MANUFACTURER CONSENT AND AGREEMENT
                    -----------------------------------------

            The undersigned,  GENERAL ELECTRIC COMPANY,  a New York corporation,
hereby  acknowledges  notice of and  consents  to all of the  terms of  Purchase
Agreement and Engine Warranties  Assignment ___ (herein called the "Assignment")
(the defined terms therein being  hereinafter used with the same meanings unless
otherwise defined herein) between Continental Airlines,  Inc., as Assignor,  and
First Security Bank, National Association,  as Owner Trustee, as Assignee. Under
the General Terms Agreement,  Engine  Manufacturer has agreed to support certain
CF6-80C2B8F  engines and spare parts therefor  purchased by Assignor from Engine
Manufacturer,  as installed on certain  Boeing Model  767-424  aircraft.  Engine
Manufacturer   hereby   confirms  to  Assignor  and  Assignee  that  the  Engine
Warranties, as and to the extent that such relate to the Engines, shall inure to
the  benefit  of  Assignee  (and,  so long as the Trust  Indenture  has not been
discharged,  Mortgagee) to the same extent as if originally  named  "Airline" in
the General  Terms  Agreement  and to the  benefit of Assignor  (but only to the
extent  provided  for in the  Assignment)  in each case subject to the terms and
conditions of the Assignment;  PROVIDED,  that Engine Manufacturer shall not owe
any liability or obligation under the Engine Warranties more than once in total.

            Engine Manufacturer represents and warrants that:

            1. It is a corporation  duly organized and validly  existing in good
standing under the laws of the State of Delaware;

            2. The making and  performance of this Engine  Manufacturer  Consent
and Agreement ___ in accordance  with its terms have been duly authorized by all
necessary  corporate action on the part of Engine  Manufacturer,  do not require
any stockholder  approval and do not contravene its Certificate of Incorporation
or by-laws or any debenture,  credit agreement or other contractual agreement to
which Engine  Manufacturer is a party or by which it is bound or any law binding
on Engine Manufacturer;

            3. The making and performance of the Engine Warranties in accordance
with their terms have been duly authorized by all necessary  corporate action on
the part of Engine Manufacturer,  do not require any stockholder approval and do
not contravene Engine Manufacturer's Certificate of Incorporation or  by-laws or

<PAGE>

any debenture,  credit agreement or other contractual  agreement to which Engine
Manufacturer  is a party or by which it is bound,  and do not,  as to the making
thereof,  contravene any law binding on Engine Manufacturer,  and to the best of
its knowledge,  do not as to the performance  thereof contravene any law binding
on Engine Manufacturer; and

            4. The Engine  Warranties  constituted  as of the date on which they
were made and at all times  thereafter  to and including the date of this Engine
Manufacturer Consent and Agreement ___, and this Engine Manufacturer Consent and
Agreement ___ constitute binding obligations of Engine Manufacturer  enforceable
against Engine  Manufacturer in accordance with their  respective  terms subject
to:

            (a)   the   limitations   of  applicable   bankruptcy,   insolvency,
                  reorganization,  moratorium  or  similar  laws  affecting  the
                  rights of creditors generally; and

            (b)   general  principles  of equity  (regardless  of  whether  such
                  enforceability  is  considered in a proceeding in equity or at
                  law).

                     [This space intentionally left blank.]

<PAGE>

            THIS  ENGINE  MANUFACTURER  CONSENT AND  AGREEMENT  ___ SHALL IN ALL
RESPECTS BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK, INCLUDING ALL MATTERS
OF CONSTRUCTION,  VALIDITY AND PERFORMANCE,  WITHOUT GIVING EFFECT TO PRINCIPLES
OF CONFLICTS OF LAWS.

            Dated as of _________ __, ____.

                                    GENERAL ELECTRIC COMPANY

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

<PAGE>

                                 EXHIBIT A-5 to
                             NOTE PURCHASE AGREEMENT
                             -----------------------

                     FORM OF LEASED AIRCRAFT TRUST AGREEMENT

                               (Filed Separately)

<PAGE>

                                 EXHIBIT A-6 to
                             NOTE PURCHASE AGREEMENT
                             -----------------------

                            FORM OF SPECIAL INDENTURE

                               (Filed Separately)

<PAGE>

                                  EXHIBIT B to
                             NOTE PURCHASE AGREEMENT
                             -----------------------

                             FORM OF DELIVERY NOTICE

<PAGE>

                                    EXHIBIT B
                                       TO
                             NOTE PURCHASE AGREEMENT

                                 DELIVERY NOTICE
                                 ---------------

                            Dated as of [__________]

To each of the addressees listed
      in Schedule A hereto

            RE:   DELIVERY NOTICE IN ACCORDANCE WITH NOTE
                  PURCHASE AGREEMENT REFERRED TO BELOW

Gentlemen:

      Reference is made to the Note  Purchase  Agreement,  dated as of March 15,
2000,  among  Continental  Airlines,  Inc.  (the  "COMPANY"),  Wilmington  Trust
Company, as Pass Through Trustee under each of the Pass Through Trust Agreements
(as defined therein) (the "PASS THROUGH TRUSTEE"),  Wilmington Trust Company, as
Subordination Agent (the "SUBORDINATION  AGENT"),  First Security Bank, National
Association,  as Escrow Agent (the "ESCROW AGENT") and Wilmington Trust Company,
as Paying Agent (the "PAYING  AGENT") (as in effect from time to time, the "NOTE
PURCHASE  AGREEMENT").  Unless otherwise defined herein,  capitalized terms used
herein shall have the meanings set forth in the Note  Purchase  Agreement or, to
the extent not defined therein, the Intercreditor Agreement.

      Pursuant to Sections 1(b) of the Note Purchase Agreement,  the undersigned
hereby  notifies  you,  in  respect  of  the  Boeing  [_______]   aircraft  with
manufacturer's serial number [______] (the "AIRCRAFT"), of the following:

(1)   The Company has elected to treat the Aircraft as [a Leased  Aircraft]  [an
      Owned Aircraft];

(2)   The Scheduled Delivery Date of the Aircraft is [_________];

(3)   The Funding Date for the Aircraft shall be [__________]; and

<PAGE>

(4)   The aggregate  amount of each series of Equipment Notes to be issued,  and
      purchased by the respective Pass Through Trustees referred to below (each,
      an "APPLICABLE PASS THROUGH TRUSTEE"),  on the Funding Date, in connection
      with the financing of such Aircraft is as follows:<F1>

      (a)   the Class A-1 Trustee shall purchase  Series A-1 Equipment  Notes in
            the amount of $[__________];

      (b)   The Class A-2 Trustee shall purchase  Series A-2 Equipment  Notes in
            the amount of $[__________];

      (c)   the Class B Trustee shall purchase  Series B Equipment  Notes in the
            amount of $[__________];

      (d)   the Class C-1 Trustee shall purchase  Series C-1 Equipment  Notes in
            the amount of $[__________]; and

      (e)   The Class C-2 Trustee shall purchase  Series C-2 Equipment  Notes in
            the amount of $[__________].

      The  Company  hereby  instructs  the Class A-1  Trustee  to (i)  execute a
Withdrawal  Certificate  in the form of Annex A hereto dated as of  [__________]
and attach thereto a Notice of Purchase  Withdrawal dated such date completed as
set forth on Exhibit A-1 hereto and (ii) deliver such Withdrawal Certificate and
Notice of Purchase Withdrawal to the applicable Escrow Agent.<F2>

      The  Company  hereby  instructs  the Class A-2  Trustee  to (i)  execute a
Withdrawal  Certificate  in the form of Annex A hereto dated as of  [__________]
and attach thereto a Notice of Purchase  Withdrawal dated such date completed as
set forth on Exhibit A-2 hereto and (ii) deliver such Withdrawal Certificate and
Notice of Purchase Withdrawal to the applicable Escrow Agent.<F3>

      The  Company  hereby  instructs  the  Class B  Trustee  to (i)  execute  a
Withdrawal  Certificate  in the form of Annex A hereto dated as of  [__________]
and attach thereto a Notice of Purchase  Withdrawal dated such date completed as
set forth on Exhibit B hereto and (ii) deliver such  Withdrawal  Certificate and
Notice of Purchase Withdrawal to the applicable Escrow Agent.<F4>

---------------
<F1>
Eliminate each applicable  clause if the specified Pass Through Trustee will not
purchase Equipment Notes for the Aircraft.

<F2>
Eliminate  if the  specified  Pass Through  Trustee will not purchase  Equipment
Notes for the Aircraft or if the Funding Date is the Issuance Date.

<F3>
Eliminate  if the  specified  Pass Through  Trustee will not purchase  Equipment
Notes for the Aircraft or if the Funding Date is the Issuance Date.

<F4>
Eliminate  if the  specified  Pass Through  Trustee will not purchase  Equipment
Notes for the Aircraft or if the Funding Date is the Issuance Date.

<PAGE>

      The  Company  hereby  instructs  the Class C-1  Trustee  to (i)  execute a
Withdrawal  Certificate  in the form of Annex A hereto dated as of  [__________]
and attach thereto a Notice of Purchase  Withdrawal dated such date completed as
set forth on Exhibit C-1 hereto and (ii) deliver such Withdrawal Certificate and
Notice of Purchase Withdrawal to the applicable Escrow Agent.<F5>

      The  Company  hereby  instructs  the Class C-2  Trustee  to (i)  execute a
Withdrawal  Certificate  in the form of Annex A hereto dated as of  [__________]
and attach thereto a Notice of Purchase  Withdrawal dated such date completed as
set forth on Exhibit C-2 hereto and (ii) deliver such Withdrawal Certificate and
Notice of Purchase Withdrawal to the applicable Escrow Agent.<F6>

      The Company hereby  instructs each  Applicable Pass Through Trustee to (i)
purchase  Equipment  Notes of a series and in an amount set forth  opposite such
Pass Through  Trustee in clause (4) above with a portion of the proceeds [of the
withdrawals  of  Deposits  referred  to in the  applicable  Notice  of  Purchase
Withdrawal  referred to above]  [received by it from the sale of Certificates on
the Issuance Date] and (ii) re-deposit  with the Depositary the excess,  if any,
of the amount so withdrawn OVER the purchase price of such Equipment Notes.

      The Company hereby  instructs each  Applicable Pass Through Trustee to (a)
enter into the Participation Agreement [____] dated as of [__________] among the
Company, as Lessee, Wilmington Trust Company, as Mortgagee and Loan Participant,
First Security Bank, National  Association,  as Owner Trustee, and [__________],
as Owner  Participant,  (b) perform its  obligations  thereunder and (c) deliver
such  certificates,  documents and legal opinions  relating to such Pass Through
Trustee as required  thereby.  [The Company confirms that the Special  Indenture
shall be utilized in lieu of the Leased Aircraft Indenture.]

      The Company hereby  certifies that the Owner  Participant  with respect to
the  Aircraft  (A) is not an  Affiliate  of the  Company  and (B)  based  on the
representations  of  such  Owner  Participant,   is  either  a  Qualified  Owner
Participant or a person whose obligations under the Owner Participant Agreements
(as defined in the Participation  Agreement) are guaranteed by a Qualified Owner
Participant.

Yours faithfully,

Continental Airlines, Inc.

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

---------------
<F5>
Eliminate  if the  specified  Pass Through  Trustee will not purchase  Equipment
Notes for the Aircraft or if the Funding Date is the Issuance Date.

<F6>
Eliminate  if the  specified  Pass Through  Trustee will not purchase  Equipment
Notes for the Aircraft or if the Funding Date is the Issuance Date.

<PAGE>

                                   SCHEDULE A

Wilmington Trust Company, as
   Pass Through Trustee, Subordination
   Agent and Mortgagee
Rodney Square North
1100 North Market Street
Wilmington, Delaware  19890
Attention:  Corporate Trust Administration
Facsimile:  (302) 651-8882

First Security Bank, National Association,
   as Escrow Agent
79 South Main Street, 3rd Floor
Salt Lake City, Utah  84111
Attention:  Corporate Trust Department
Facsimile:  (801) 246-5053

Standard & Poor's Ratings Services
55 Water Street, 35th Floor
New York, New York 10004
Attention:  Michael K. Vernier
Facsimile:  (212) 438-6632

Moody's Investors Service, Inc.
99 Church Street
New York, New York 10007
Attention:  Richard Bittenbender
Facsimile:  (212) 553-3855

<PAGE>

                                                                         Annex A

                             WITHDRAWAL CERTIFICATE
                                   (Class ___)

First Security Bank, National Association,
as Escrow Agent

Ladies and Gentlemen:

            Reference is made to the Escrow and Paying Agent Agreement, dated as
of  March  15,  2000  (the  "Agreement").  We  hereby  certify  to you  that the
conditions to the  obligations  of the  undersigned  to execute a  Participation
Agreement pursuant to the Note Purchase Agreement have been satisfied.  Pursuant
to Section  1.02(c) of the  Agreement,  please  execute the  attached  Notice of
Withdrawal and  immediately  transmit by facsimile to the  Depositary,  at (212)
325-8319.

            Capitalized  terms used herein but not defined herein shall have the
meanings set forth in the Agreement.

                                    Very truly yours,

                                    WILMINGTON TRUST COMPANY,
                                    not in its individual capacity by solely
                                     as Pass
                                    Through Trustee

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

Dated: As of [__________]

<PAGE>
                                                                     Exhibit A-1

                          NOTICE OF PURCHASE WITHDRAWAL

CREDIT  SUISSE FIRST  BOSTON
New  York  Branch
11  Madison  Avenue
New  York,  NY 10010
Attention:  Robert Finney
Telecopier: 212-325-8319

Gentlemen:

            Reference is made to the Deposit  Agreement  (Class A-1) dated as of
March 15, 2000 (the "DEPOSIT  AGREEMENT")  between First Security Bank, National
Association,  as Escrow Agent, and Credit Suisse First Boston,  New York branch,
as Depositary (the "DEPOSITARY").

            In  accordance  with Section  2.3(a) of the Deposit  Agreement,  the
undersigned  hereby requests the withdrawal of the entire amount of the Deposit,
$[_______], Account No. [____].

            The undersigned hereby directs the Depositary to pay the proceeds of
the Deposit to [___________________], Account No. ____, Reference: _________] on
________ __, 20___, upon the telephonic  request of a representative of the Pass
Through Trustee.

                                    FIRST SECURITY BANK,
                                      NATIONAL ASSOCIATION,
                                      as Escrow Agent

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

Dated: As of [__________]

<PAGE>

                                                                     Exhibit A-2

                          NOTICE OF PURCHASE WITHDRAWAL

CREDIT  SUISSE FIRST  BOSTON
New  York  Branch
11  Madison  Avenue
New  York,  NY 10010
Attention:  Robert Finney
Telecopier: 212-325-8319

Gentlemen:

            Reference is made to the Deposit  Agreement  (Class A-2) dated as of
March 15, 2000 (the "DEPOSIT  AGREEMENT")  between First Security Bank, National
Association,  as Escrow Agent, and Credit Suisse First Boston,  New York branch,
as Depositary (the "DEPOSITARY").

            In  accordance  with Section  2.3(a) of the Deposit  Agreement,  the
undersigned  hereby requests the withdrawal of the entire amount of the Deposit,
$[_______], Account No. [____].

            The undersigned hereby directs the Depositary to pay the proceeds of
the Deposit to [___________________], Account No. ____, Reference: _________] on
________ __, 20__, upon the telephonic  request of a representative  of the Pass
Through Trustee.

                                    FIRST SECURITY BANK,
                                      NATIONAL ASSOCIATION,
                                      as Escrow Agent

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

Dated: As of [__________]

<PAGE>
                                                                       Exhibit B

                          NOTICE OF PURCHASE WITHDRAWAL

CREDIT  SUISSE FIRST  BOSTON
New  York  Branch
11  Madison  Avenue
New  York,  NY 10010
Attention:  Robert Finney
Telecopier: 212-325-8319

Gentlemen:

            Reference  is made to the  Deposit  Agreement  (Class B) dated as of
March 15, 2000 (the "DEPOSIT  AGREEMENT")  between First Security Bank, National
Association,  as Escrow Agent, and Credit Suisse First Boston,  New York branch,
as Depositary (the "DEPOSITARY").

            In  accordance  with Section  2.3(a) of the Deposit  Agreement,  the
undersigned  hereby requests the withdrawal of the entire amount of the Deposit,
$[_______], Account No. [_____].

            The undersigned hereby directs the Depositary to pay the proceeds of
the Deposit to ___________________],  Account No. ____, Reference: _________] on
________ __, 20__, upon the telephonic  request of a representative  of the Pass
Through Trustee.

                                    FIRST SECURITY BANK,
                                      NATIONAL ASSOCIATION,
                                      as Escrow Agent

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

Dated: As of [__________]

<PAGE>

                                                                     Exhibit C-1

                          NOTICE OF PURCHASE WITHDRAWAL

CREDIT  SUISSE FIRST  BOSTON
New  York  Branch
11  Madison  Avenue
New  York,  NY 10010
Attention:  Robert Finney
Telecopier: 212-325-8319

Gentlemen:

            Reference is made to the Deposit  Agreement  (Class C-1) dated as of
March 15, 2000 (the "DEPOSIT  AGREEMENT")  between First Security Bank, National
Association,  as Escrow Agent, and Credit Suisse First Boston,  New York branch,
as Depositary (the "DEPOSITARY").

            In  accordance  with Section  2.3(a) of the Deposit  Agreement,  the
undersigned  hereby requests the withdrawal of the entire amount of the Deposit,
$[_______], Account No. [_____].

            The undersigned  hereby directs the Depositary to pay the proceeds
of  the  Deposit  to   ___________________],   Account  No.  ____,  Reference:
_________]  on  ________  __,  20___,   upon  the  telephonic   request  of  a
representative of the Pass Through Trustee.

                                    FIRST SECURITY BANK,
                                      NATIONAL ASSOCIATION,
                                      as Escrow Agent

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

Dated: As of [__________]

<PAGE>

                                                                     Exhibit C-2

                          NOTICE OF PURCHASE WITHDRAWAL

CREDIT  SUISSE FIRST  BOSTON
New  York  Branch
11  Madison  Avenue
New  York,  NY 10010
Attention:  Robert Finney
Telecopier: 212-325-8319

Gentlemen:

            Reference is made to the Deposit  Agreement  (Class C-2) dated as of
March 15, 2000 (the "DEPOSIT  AGREEMENT")  between First Security Bank, National
Association,  as Escrow Agent, and Credit Suisse First Boston,  New York branch,
as Depositary (the "DEPOSITARY").

            In  accordance  with Section  2.3(a) of the Deposit  Agreement,  the
undersigned  hereby requests the withdrawal of the entire amount of the Deposit,
$[_______], Account No. [_____].

            The undersigned hereby directs the Depositary to pay the proceeds of
the Deposit to ___________________],  Account No. ____, Reference: _________] on
________ __, 20___, upon the telephonic  request of a representative of the Pass
Through Trustee.

                                    FIRST SECURITY BANK,
                                      NATIONAL ASSOCIATION,
                                      as Escrow Agent

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

Dated: As of [__________]

<PAGE>

                                 EXHIBIT C-1 to
                             NOTE PURCHASE AGREEMENT
                             -----------------------

                 FORM OF OWNED AIRCRAFT PARTICIPATION AGREEMENT

                               (Filed Separately)

<PAGE>

                                 EXHIBIT C-2 to
                             NOTE PURCHASE AGREEMENT
                             -----------------------

                        FORM OF OWNED AIRCRAFT INDENTURE

                               (Filed Separately)

<PAGE>

                                  EXHIBIT D to
                             NOTE PURCHASE AGREEMENT
                             -----------------------

SECTION 16.       OWNER PARTICIPANT'S RIGHT TO RESTRUCTURE

            16.1  GENERAL RIGHT TO RESTRUCTURE

            Lessee,  Loan  Participant and each Note Holder agree that after the
Delivery Date and subject to the limitations of Section 16.2, the original Owner
Participant  (or any transferee  Owner  Participant  that is an Affiliate of the
original Owner Participant) shall have the right to restructure the Transactions
using (a) a "cross-border lease," a tax lease or a head-lease/sublease structure
and (b) any other type of  transaction,  which may  involve  special  structural
arrangements,  as such Owner Participant may elect (any such structure described
above, a "Special  Structure").  Any Special  Structure may result in additional
persons  participating  in  the  Transactions,  which  persons  shall  agree  to
provisions comparable to Sections 7.6.4(a) and 7.6.13. Subject to the provisions
of Sections 16.2 and 16.3,  Lessee,  Loan Participant and each Note Holder agree
to  cooperate  in the  implementation  of any such  restructuring  and take such
action as may  reasonably  be  requested by the original  Owner  Participant  to
accomplish  such  restructuring,   including  taking  such  actions  as  may  be
reasonable or customary in the type of Special Structure selected. In connection
with any  proposed  Special  Structure,  Owner  Participant  shall  provide  all
information  reasonably requested by Lessee, Loan Participant or any Note Holder
with respect thereto. The original Owner Participant shall be entitled to retain
all of the benefits of any such transaction.

            16.2  LIMITATIONS ON RESTRUCTURING PROVISIONS; ADDITIONAL TERMS

                  16.2.1   LESSEE

            (a) Notwithstanding Section 16.1 or 16.2.1(b), in no event shall any
such Special  Structure (a) change the terms and  conditions of Lessee's  rights
and obligations,  from those which Lessee would otherwise  possess or be subject
to in the absence of any such Special Structure, in a manner which is materially
adverse to Lessee,  (b) expose Lessee to any additional risks (including overall
tax risks)  beyond  those to which Lessee would be exposed in the absence of any
such Special  Structure unless Lessee shall have been  indemnified  against such
additional  risks by the original Owner  Participant,  or other  participants in
such  transaction  (so  long  as  such  original  Owner   Participant  or  other
participants shall, as to their  creditworthiness at the time any such indemnity
is  given,  be  reasonably   acceptable  to  Lessee)  in  a  manner   reasonably

<PAGE>

satisfactory  to Lessee.  In no event  shall  Lessee be  required  to provide an
indemnity  with respect to any foreign tax benefit of a Special  Structure or to
indemnify against the failure of a head-lease not to constitute a true lease for
U.S. federal income tax purposes.

            (b) In any Special  Structure  that may be entered into  pursuant to
this  Section  16, the  Termination  Values  under the Lease (as the same may be
restructured)  shall  not  be  affected  by the  termination  values  under  any
head-lease, except that any prepayment premiums and any funding or swap breakage
costs under such head-lease or similar  arrangement will be added in calculating
the  Termination  Values and Stipulated Loss Values under the Lease (as the same
may be restructured). Further, upon implementation of any Special Structure, the
Stipulated  Loss  Values  payable by Lessee  under the Lease (as the same may be
restructured)  shall in no event be less than the stipulated loss values payable
under the applicable head-lease or similar arrangement.

                  16.2.2   LOAN PARTICIPANT AND CERTIFICATE HOLDERS

            Notwithstanding  Section 16.1, any such Special Structure shall not,
and prior to the exercise of its rights thereunder,  the Owner Participant shall
deliver an officer's  certificate to the Pass Through Trustee that provides that
any such Special  Structure  shall not, (a) change the terms and  conditions  of
Loan  Participant's,  any Note Holder's or any Pass Through  Indemnitee's rights
and  obligations  under the Operative  Agreements or rights and  obligations  of
holders of Pass Through  Certificates,  from those which Loan Participant,  Note
Holders,  Pass Through  Indemnitees  and such Pass Through  Certificate  holders
would  otherwise  possess  or be  subject  to in the  absence  of  such  Special
Structure (including,  without limitation,  the amount and timing of any payment
of principal,  interest and  Make-Whole  Amount under the Equipment  Notes,  the
relative  rights of the Note  Holders  with  respect to such  payments  and such
holder of Pass Through  Certificates and the priority of Mortgagee's Lien on the
Trust  Indenture   Estate  under  the  Trust   Indenture)  or  (b)  expose  Loan
Participant,  any such Note Holder, any such Pass Through Indemnitee or any such
holder of Pass  Through  Certificates  to any  additional  risks beyond those to
which Loan Participant, such Note Holder, Pass Through Indemnitee or such holder
of such Pass  Through  Certificates  would be  exposed  in the  absence  of such
Special  Structure.  In  addition,  in no event shall any Special  Structure  be
permitted unless a written  confirmation from the Rating Agencies (as defined in
the Note Purchase  Agreement) is obtained  prior to the  implementation  of such

<PAGE>

Special  Structure to the effect that such Special  Structure will not adversely
affect the ratings of the Pass Through Certificates.

            16.3  TRANSACTION EXPENSES

            Whether or not any  proposed  restructuring  transaction  under this
Section 16 is consummated, the original Owner Participant shall pay (or cause to
be paid) the reasonable costs and expenses incurred by all parties in connection
therewith and shall pay the reasonable costs and expenses of the Rating Agencies
in connection  with obtaining the  confirmations  referred to in Section 16.2.2;
PROVIDED, that, only in connection with a consummated transaction (unless Lessee
shall have,  by failing to act in good  faith,  caused a  transaction  not to be
consummated),  Lessee shall pay or reimburse such original Owner Participant for
the original Owner  Participant's  reasonable estimate of the costs and expenses
that would  have been  incurred  by all  parties  if the  Transactions  had been
restructured  as a  head-lease/sublease  transaction in which the original Owner
Participant, or an Affiliate or designee thereof, were the head-lessee/sublessor
and Lessee were the sublessee.

<PAGE>

                                  EXHIBIT E to
                             NOTE PURCHASE AGREEMENT
                             -----------------------

            Section 6.2 may be amended to delete Section 6.2.9 in its entirety.

<PAGE>

                      EXHIBIT F TO NOTE PURCHASE AGREEMENT
                      ------------------------------------

            Subordination. (a) As between the Note Holders, this Trust Indenture
shall be a  subordination  agreement  for  purposes of Section 510 of the United
States Bankruptcy Code, as amended from time to time.

            (b) If any Note  Holder  receives  any  payment  in  respect  of any
obligations  owing  hereunder,  which  is  subsequently  invalidated,   declared
preferential,  set aside and/or required to be repaid to a trustee,  receiver or
other party, then, to the extent of such payment,  such obligations  intended to
be  satisfied  shall be revived and continue in full force and effect as if such
payment had not been received.

            (c) Each of the Note Holders may take any of the  following  actions
without impairing its rights under this Trust Indenture:

            (i) obtain a Lien on any property to secure any amounts  owing to it
      hereunder,

            (ii) obtain the primary or secondary obligation of any other obligor
      with respect to any amounts owing to it hereunder,

            (iii) renew, extend,  increase,  alter or exchange any amounts owing
      to it hereunder,  or release or compromise  any  obligation of any obligor
      with respect thereto,

            (iv)  refrain  from  exercising  any  right or  remedy,  or delay in
      exercising such right or remedy, which it may have, or

            (v) take any other action which might discharge a subordinated party
      or a surety under applicable law;

provided,  however,  that  the  taking  of any such  actions  by any of the Note
Holders shall not prejudice the rights or adversely  affect the  obligations  of
any other party under this Trust Indenture.--------------------------------------------------------------------
     |       CONFIDENTIAL: SUBJECT TO RESTRICTIONS ON DISSEMINATION       |
     |              SET FORTH IN SECTION 8 OF THIS AGREEMENT              |
      --------------------------------------------------------------------

--------------------------------------------------------------------------------

                          PARTICIPATION AGREEMENT [___]
                           Dated as of [____________]

                                      Among

                           CONTINENTAL AIRLINES, INC.,
                                     Lessee,

                                 [____________],
                               Owner Participant,

                              FIRST SECURITY BANK,
                              NATIONAL ASSOCIATION,
                         Not in its individual capacity
                      except as expressly provided herein,
                          but solely as Owner Trustee,

                                 Owner Trustee,
                                       and

                            WILMINGTON TRUST COMPANY,
                         Not in its individual capacity
                      except as expressly provided herein,
                  but solely as Mortgagee, Subordination Agent
           under the Intercreditor Agreement and Pass Through Trustee
           under each of the Applicable Pass Through Trust Agreements,

                         Mortgagee and Loan Participant

                          ----------------------------

                         One Boeing Model [___] Aircraft
                     Bearing Manufacturer's Serial No. [___]
                         and U.S. Registration No. [___]

--------------------------------------------------------------------------------

<PAGE>

CONTENTS

SECTION 1.    DEFINITIONS AND CONSTRUCTION..............................     2

SECTION 2.    PARTICIPATION IN LESSOR'S COST; ISSUANCE OF
              EQUIPMENT NOTES; TERMINATION OF OBLIGATION TO
              PARTICIPATE...............................................     2
      2.1     Participation in Lessor's Cost............................     3
      2.2     Nature of Obligations of Participants.....................     3
      2.3     Termination of Obligation to Participate..................     3

SECTION 3.    COMMITMENT TO LEASE AIRCRAFT..............................     3

SECTION 4.    PROCEDURE FOR PARTICIPATION IN PAYMENT OF LESSOR'S
              COST; POSTPONEMENT OF SCHEDULED DELIVERY DATE.............     4
      4.1     Notices of Scheduled Delivery Date........................     4
      4.2     Payment of Lessor's Cost..................................     4
      4.3     Postponement of Scheduled Delivery Date...................     5
      4.4     Closing...................................................     6

SECTION 5.    CONDITIONS PRECEDENT......................................     6
      5.1     Conditions Precedent to Obligations of Participants.......     6
      5.2     Conditions Precedent to Obligations of Owner Trustee......    13
      5.3     Conditions Precedent to Obligations of Mortgagee..........    13
      5.4     Conditions Precedent to Obligations of Lessee.............    14
      5.5     Post-Registration Opinion.................................    15

SECTION 6.    REPRESENTATIONS AND WARRANTIES............................    15
      6.1     Lessee's Representations and Warranties...................    15
      6.2     Owner Participant's Representations and Warranties........    19
      6.3     First Security's Representations and Warranties...........    22
      6.4     WTC's Representations and Warranties......................    25

SECTION 7.    COVENANTS, UNDERTAKINGS AND AGREEMENTS....................    29
      7.1     Covenants of Lessee.......................................    29
      7.2     Covenants of Owner Participant............................    31
      7.3     Covenants of First Security and Owner Trustee.............    33
      7.4     Covenants of WTC..........................................    35
      7.5     Covenants of Note Holders.................................    37
      7.6     Agreements................................................    38

<PAGE>

SECTION 8.    CONFIDENTIALITY...........................................    45

SECTION 9.    INDEMNIFICATION AND EXPENSES..............................    46
      9.1     General Indemnity.........................................    46
      9.2     Expenses..................................................    53
      9.3     General Tax Indemnity.....................................    54
      9.4     Payments..................................................    65
      9.5     Interest..................................................    66
      9.6     Benefit of Indemnities....................................    66

SECTION 10.   ASSIGNMENT OR TRANSFER OF INTERESTS.......................    66
      10.1    Participants, Owner Trustee and Note Holders..............    66
      10.2    Effect of Transfer........................................    68

SECTION 11.   REFUNDING AND CERTAIN OTHER MATTERS.......................    69
      11.1    Refunding Generally.......................................    69
      11.2    Limitations on Obligation to Refund.......................    71
      11.3    Execution of Certain Documents............................    71
      11.4    ERISA.....................................................    72
      11.5    Consent to Optional Redemptions...........................    72

SECTION 12.   SECTION 1110..............................................    72

SECTION 13.   CHANGE OF CITIZENSHIP.....................................    72
      13.1    Generally.................................................    72
      13.2    Owner Participant.........................................    73
      13.3    Owner Trustee.............................................    73
      13.4    Mortgagee.................................................    74

SECTION 14.   CONCERNING OWNER TRUSTEE..................................    74

SECTION 15.   MISCELLANEOUS.............................................    74
      15.1    Amendments................................................    74
      15.2    Severability..............................................    75
      15.3    Survival..................................................    75
      15.4    Reproduction of Documents.................................    75
      15.5    Counterparts..............................................    75
      15.6    No Waiver.................................................    76
      15.7    Notices...................................................    76
      15.8    GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE..........    77
      15.9    Third-Party Beneficiary...................................    77
      15.10   Entire Agreement..........................................    78
      15.11   Further Assurances........................................    78

<PAGE>

ANNEX, SCHEDULES AND EXHIBITS
ANNEX A - Definitions

SCHEDULE 1 -      Accounts; Addresses
SCHEDULE 2 -      Commitments
SCHEDULE 3 -      Certain Terms

EXHIBIT A  -      Opinion of special counsel to Lessee
EXHIBIT B  -      Opinion of counsel to Lessee
EXHIBIT C  -      Opinion of corporate counsel to Airframe Manufacturer
EXHIBIT D  -      Opinion of special counsel to Owner Trustee
EXHIBIT E  -      Opinion of special counsel to Mortgagee and the Loan
                  Participants
EXHIBIT F  -      Opinion of special counsel to Owner Participant
EXHIBIT G  -      Opinion of special counsel in Oklahoma City, Oklahoma

<PAGE>

                             PARTICIPATION AGREEMENT

      PARTICIPATION   AGREEMENT  [___],   dated  as  of   [____________]   (this
"Agreement"),  among (a)  CONTINENTAL  AIRLINES,  INC.,  a Delaware  corporation
("Lessee"), (b) [____________________] a corporation organized under the laws of
the OP Jurisdiction  ("Owner  Participant"),  (c) FIRST SECURITY BANK,  NATIONAL
ASSOCIATION,  a national banking  association,  not in its individual  capacity,
except as expressly  provided herein,  but solely as Owner Trustee (this and all
other  capitalized  terms used but not defined  herein shall have the respective
meanings  ascribed  thereto  in Section 1) (in its  capacity  as Owner  Trustee,
"Owner Trustee" or "Lessor," and in its individual capacity,  "First Security"),
(d)  WILMINGTON  TRUST  COMPANY,  a  Delaware  banking  corporation,  not in its
individual  capacity,  except  as  expressly  provided  herein,  but  solely  as
Mortgagee  (in its  capacity as  Mortgagee,  "Mortgagee"  and in its  individual
capacity,  "WTC"), (e) WILMINGTON TRUST COMPANY, not in its individual capacity,
except as expressly  provided  herein,  but solely as Pass Through Trustee under
each of the Applicable Pass Through Trust Agreements, (each, an "Applicable Pass
Through  Trustee")  and (f)  WILMINGTON  TRUST  COMPANY,  not in its  individual
capacity, except as expressly provided herein, but solely as Subordination Agent
under the Intercreditor Agreement ("Subordination Agent").

                                   RECITALS

      A.    Owner  Participant and First Security,  concurrently  herewith,  are
entering into the Trust Agreement,  pursuant to which, among other things, Owner
Trustee  agrees  to hold  the  Trust  Estate  for the use and  benefit  of Owner
Participant upon and subject to the terms and conditions set forth therein.

      B.    Lessee  and  Airframe  Manufacturer  have  entered into the Purchase
Agreement,  pursuant to which,  among other things,  Airframe  Manufacturer  has
agreed to manufacture  and sell to Lessee and Lessee has agreed to purchase from
Airframe Manufacturer, certain aircraft, including the Aircraft.

      C.    On the Delivery  Date,  Lessee and Owner Trustee will enter into the
Purchase Agreement  Assignment,  pursuant to which,  among other things,  Lessee
will assign to Owner  Trustee its right to purchase the Aircraft  from  Airframe
Manufacturer  upon and  subject  to the  terms and  conditions  set forth in the
Purchase Agreement and the Purchase Agreement Assignment.

<PAGE>

      D.    Pursuant  to each  of the  Pass  Through  Trust  Agreements,  on the
Issuance  Date  the Pass  Through  Trusts  were  created  and the  Pass  Through
Certificates were issued and sold.

      E.    Pursuant  to the  Note  Purchase  Agreement,  each  Applicable  Pass
Through  Trustee has agreed to use a portion of the  proceeds  from the issuance
and sale of the Pass Through Certificates issued by each Applicable Pass Through
Trust to purchase from the Owner  Trustee,  on behalf of the related  Applicable
Pass Through  Trust,  the  Equipment  Note bearing the same interest rate as the
Pass Through Certificates issued by such Pass Through Trust.

      F.    Owner  Trustee and  Mortgagee,  concurrently  with the execution and
delivery  hereof,  have entered into the Trust  Indenture for the benefit of the
Note Holders, pursuant to which, among other things, Owner Trustee agrees (1) to
issue  Equipment  Notes,  in the amounts and  otherwise as provided in the Trust
Indenture,  the proceeds of which will be used to pay a portion of Lessor's Cost
and (2) to  mortgage,  pledge and  assign to  Mortgagee  all of Owner  Trustee's
right,  title and interest in the Trust  Indenture  Estate to secure the Secured
Obligations,  including,  without limitation,  Owner Trustee's obligations under
the Equipment Notes.

      G.    On the Delivery  Date,  Lessor and Lessee will enter into the Lease,
pursuant to which, among other things, Lessor shall lease the Aircraft to Lessee
and Lessee  shall lease the  Aircraft  from Lessor upon and subject to the terms
and conditions set forth therein.

      H.    The parties hereto wish to set forth in this Agreement the terms and
conditions  upon  and  subject  to which  the  aforesaid  transactions  shall be
effected.

      NOW, THEREFORE, in consideration of the premises and the mutual agreements
contained herein and for other good and valuable consideration,  the receipt and
sufficiency  of which are  hereby  acknowledged,  the  parties  hereto  agree as
follows:

SECTION 1.       DEFINITIONS AND CONSTRUCTION

      Capitalized  terms used but not defined  herein shall have the  respective
meanings set forth or  incorporated  by  reference,  and shall be construed  and
interpreted in the manner described, in Annex A.

SECTION 2.       PARTICIPATION IN LESSOR'S COST; ISSUANCE OF EQUIPMENT NOTES;
                 TERMINATION OF OBLIGATION TO PARTICIPATE

<PAGE>

      2.1        PARTICIPATION IN LESSOR'S COST

      Subject to the terms and  conditions  of this  Agreement,  on the Delivery
Date,  Owner   Participant  and  each  Applicable  Pass  Through  Trustee  shall
participate in the payment of Lessor's Cost as follows:

      (a)   Owner  Participant shall participate in the payment of Lessor's Cost
            for the Aircraft by making an equity  investment  in the  beneficial
            ownership  of the  Aircraft in the amount in Dollars  equal to Owner
            Participant's Percentage multiplied by Lessor's Cost; and

      (b)   Each  Applicable  Pass  Through  Trustee  shall make a  non-recourse
            secured  loan to  Owner  Trustee  to  finance,  in part,  the  Owner
            Trustee's payment of Lessor's Cost in the amount in Dollars equal to
            such Applicable Pass Through Trustee's PTT Percentage  multiplied by
            Lessor's  Cost,  such loan to be evidenced by one or more  Equipment
            Notes, dated the Delivery Date, issued to the Subordination Agent as
            the registered holder on behalf of each such Applicable Pass Through
            Trustee  for the  related  Applicable  Pass  Through  Trust by Owner
            Trustee in accordance  with this Agreement and the Trust  Indenture,
            in an aggregate  principal  amount equal to the  Commitment  of each
            such Applicable Pass Through Trustee.

      2.2        NATURE OF OBLIGATIONS OF PARTICIPANTS

      The obligations  hereunder of each Participant are several, and not joint,
and a Participant  shall have no  obligation to make  available to Owner Trustee
any  portion of any  amount not paid  hereunder  by any other  Participant.  The
failure by either  Participant to perform its  obligations  hereunder  shall not
affect the  obligations  of Lessee toward the other  Participant,  except to the
extent provided in Section 5.4.

      2.3        TERMINATION OF OBLIGATION TO PARTICIPATE

      Notwithstanding any other provision of this Agreement, if the Closing does
not occur on or before the Commitment  Termination  Date, the Commitment of each
Participant  and its  obligation to  participate in the payment of Lessor's Cost
shall expire and be of no further force and effect; PROVIDED, that the liability
of any Participant that has defaulted in the payment of its Commitment shall not
be released.

<PAGE>

SECTION 3.       COMMITMENT TO LEASE AIRCRAFT

      Subject to the terms and conditions of this Agreement,  concurrently  with
the issuance of the Equipment  Notes on the Delivery  Date,  Owner Trustee shall
purchase and accept  delivery of the Aircraft under and pursuant to the Purchase
Agreement and the Purchase  Agreement  Assignment,  and thereupon  Owner Trustee
shall lease the Aircraft to Lessee,  and Lessee  shall lease the  Aircraft  from
Owner Trustee, under the Lease.

SECTION 4.       PROCEDURE FOR PARTICIPATION IN PAYMENT OF LESSOR'S COST;
                 POSTPONEMENT OF SCHEDULED DELIVERY DATE

      4.1        NOTICES OF SCHEDULED DELIVERY DATE

      Without  limiting its  obligations to the Loan  Participant  under Section
1(b) of the Note Purchase Agreement,  Lessee agrees to give Participants,  Owner
Trustee,  and  Mortgagee  at least  one  Business  Day's  written  notice of the
Scheduled  Delivery  Date,  which notice shall set forth  Lessor's  Cost and the
amount of each  Participant's  Commitment.  Each Participant  agrees that making
available its respective  Commitment  shall  constitute a waiver of such notice.
Owner  Trustee  and  Mortgagee  shall be deemed to have  waived  such  notice if
Mortgagee shall have received from each Participant  funds in the full amount of
its respective Commitment.

      4.2        PAYMENT OF LESSOR'S COST

      (a)   Each Participant agrees, subject to the terms and conditions of this
Agreement,  to make the Dollar amount of its respective Commitment available, by
wire transfer of immediately available funds to WTC's account at Citibank, N.A.,
ABA No. 021000089, Account No. 0016-1728,  reference Continental Lease [___], at
or before 12:00 Noon,  New York City time, on the Scheduled  Delivery  Date. All
such funds made  available  by each  Participant  to WTC  shall,  until  payment
thereof to Airframe Manufacturer and Lessee as provided in Section 4.2(b)(ii) or
return  thereof to the respective  Participant as provided in Section 4.3.2,  be
held by WTC in trust for the benefit of the respective Participant,  as the sole
and  exclusive  property of the  respective  Participant  and not as part of the
Trust Estate or the Trust Indenture Estate.

      (b)   Subject to the  satisfaction,  or waiver by the applicable party, of
the  conditions  precedent set forth in Section 5, and  simultaneously  with the
receipt by the parties  hereto of all amounts to be paid to them on the Delivery
Date pursuant to this Section 4.2, Owner Trustee shall:

            (i) purchase, take title to, and accept delivery of, the Aircraft;

<PAGE>

            (ii) in  consideration  of the  transfer of title to the Aircraft to
      Owner  Trustee,  direct WTC to pay,  from the funds made  available to WTC
      hereunder  by  the  Participants,  all  or  a  specified  portion  of  its
      Commitment  either to (A)  Airframe  Manufacturer,  which  payments in the
      aggregate  shall  be  equal  to  Manufacturer's  Purchase  Price,  by wire
      transfer of immediately available funds to Airframe Manufacturer's account
      set forth in Schedule 1 and (B) Lessee,  which  payments in the  aggregate
      shall be equal to Lessor's Cost minus  Manufacturer's  Purchase  Price, by
      wire transfer of immediately available funds to Lessee's account set forth
      in Schedule 1 or as otherwise directed by Lessee;

            (iii) execute an application  for  registration of the Aircraft with
      the FAA and Lease  Supplement  No. 1, in each  case  with  respect  to the
      Aircraft;

            (iv) execute the Trust  Indenture  and the initial  Trust  Indenture
      Supplement  and issue the Equipment  Notes to the  Subordination  Agent in
      accordance with Section 2.1(b);

            (v) lease the Aircraft to Lessee, pursuant to the Lease; and

            (vi) take such other  action as may be  required  to be taken by the
      Owner  Trustee  on the  Delivery  Date  by  the  terms  of  any  Operative
      Agreement.

      4.3        POSTPONEMENT OF SCHEDULED DELIVERY DATE

               4.3.1       POSTPONEMENT

      If for  any  reason  whatsoever  the  Closing  is not  consummated  on the
Scheduled  Delivery Date,  Lessee may,  subject to the provisions of 1(e) of the
Note Purchase Agreement, by telephonic notice, given by 5:00 p.m., New York City
time (such  telephonic  notice to be promptly  confirmed  in writing by personal
delivery or  facsimile),  on the Scheduled  Delivery  Date to each  Participant,
Owner Trustee and  Mortgagee,  designate a Delayed  Delivery Date, in which case
the Owner  Participant will keep its funds available,  and each Loan Participant
shall comply with its obligations  under Section 5.01 of each  applicable  Trust
Supplement.

               4.3.2       RETURN OF FUNDS

      WTC shall promptly return to each  Participant  that makes funds available
to it in accordance  with Section  4.2(a) such funds,  together with interest or
income earned thereon,  if the Closing fails to occur on the Scheduled  Delivery

<PAGE>

Date,  PROVIDED that any funds made available by the Loan  Participant  shall be
returned on such Scheduled Delivery Date.

      4.4        CLOSING

      The Closing  shall occur at the offices of Hughes  Hubbard & Reed LLP, One
Battery Park Plaza, New York, New York 10004, or such other place as the parties
shall agree.

SECTION 5.       CONDITIONS PRECEDENT

      5.1        CONDITIONS PRECEDENT TO OBLIGATIONS OF PARTICIPANTS

      The  obligation  of each  Participant  to make the  Dollar  amount  of its
respective  Commitment available for payment as directed by the Owner Trustee on
the Delivery Date is subject to satisfaction or waiver by each such Participant,
on or prior to the Delivery Date, of the conditions precedent set forth below in
this Section 5.1;  PROVIDED,  that it shall not be a condition  precedent to the
obligation of any Participant that any document be produced or action taken that
is to be  produced  or taken by such  Participant  or by a  Person  within  such
Participant's  control;  PROVIDED,  FURTHER, that Sections 5.1.2(iii),  (xv) and
(xxiii)  (H)  shall  not be  conditions  precedent  to the  obligation  of  Loan
Participants and Sections 5.1.15 and 5.1.16 shall not be conditions precedent to
the obligation of Owner Participant.

               5.1.1       NOTICE

      Such  Participant  shall have received the notice described in Section 4.1
or, in the case of a Delayed  Delivery Date, 4.3, when and as required  thereby,
or shall have waived such notice.

               5.1.2       DELIVERY OF DOCUMENTS

      Such  Participant  shall,  except as noted below,  have received  executed
counterparts  of  the  following   agreements,   instruments,   certificates  or
documents,  and such counterparts (a) shall have been duly authorized,  executed
and  delivered  by the  respective  party  or  parties  thereto,  (b)  shall  be
reasonably  satisfactory in form and substance to such Participant and (c) shall
be in full force and effect:

           (i) the Lease;  provided,  that only Mortgagee shall receive the sole
      executed chattel paper original thereof;

           (ii) Lease  Supplement  No. 1; PROVIDED,  that only  Mortgagee  shall
      receive the sole executed chattel paper original thereof;

<PAGE>

           (iii)  the  Tax  Indemnity  Agreement;   PROVIDED,  that  only  Owner
      Participant   and  Lessee  shall  receive  copies  of  the  Tax  Indemnity
      Agreement;

           (iv)   the Trust Agreement;

           (v)    the Trust Indenture;

           (vi)   the initial Trust Indenture Supplement;

           (vii)  the Purchase Agreement Assignment;

          (viii)  the  Consent  and  Agreement   and  the  Engine   Consent  and
      Agreement;

           (ix) the Equipment Notes dated the Delivery Date; PROVIDED, that only
      the Subordination Agent shall receive the authenticated Equipment Notes;

           (x)  an  excerpted  copy  of the  Purchase  Agreement  to the  extent
      relating to Airframe  Manufacturer's or Engine  Manufacturer's  respective
      warranties or related  obligations or any right in the Purchase  Agreement
      assigned to Owner Trustee pursuant to the Purchase  Agreement  Assignment;
      PROVIDED,  that only Owner Trustee and Mortgagee  shall receive  copies of
      such  agreements  (copies of which may be  inspected by  Participants  and
      their  respective  special  counsel on the  Delivery  Date,  but after the
      Delivery Date such copies shall be retained by Owner Trustee and Mortgagee
      and may be inspected and reviewed by Owner Participant or Loan Participant
      or their  respective  counsel if and only if there shall have occurred and
      be continuing a Lease Default or Lease Event of Default);

           (xi)   the Bills of Sale;

           (xii) an  invoice  from  Airframe  Manufacturer  to Owner  Trustee in
      respect of the Aircraft  (except for the BFE) specifying the amount of the
      Manufacturer's  Purchase  Price and an invoice from Lessee  specifying the
      amount  due to  Lessee  in  respect  of the  Aircraft  and the BFE,  which
      amounts, in the aggregate, shall equal Lessor's Cost of the Aircraft;

           (xiii) an appointment of authorized representatives by Owner Trustee,
      and an acceptance thereof by such  representatives in each case, dated the
      Delivery Date;

           (xiv) the  broker's  report and  insurance  certificates  required by
      Section 11 of the Lease;

<PAGE>

           (xv) an appraisal or appraisals from an Appraiser, which appraisal or
      appraisals shall be reasonably satisfactory in form and substance to Owner
      Participant;  PROVIDED,  that only  Owner  Participant  and  Lessee  shall
      receive copies of such appraisal or appraisals;

           (xvi) (A) a copy of the Certificate of  Incorporation  and By-Laws of
      Lessee and  resolutions  of the board of  directors  of Lessee  and/or the
      executive  committee  thereof,  in each case  certified as of the Delivery
      Date,  by  the  Secretary  or  an  Assistant  Secretary  of  Lessee,  duly
      authorizing  the  execution,  delivery  and  performance  by Lessee of the
      Lessee  Operative  Agreements  required to be executed  and  delivered  by
      Lessee on or prior to the Delivery Date in accordance  with the provisions
      hereof  and  thereof;  (B) an  incumbency  certificate  of  Lessee,  Owner
      Participant, First Security and WTC as to the person or persons authorized
      to execute and deliver the relevant Operative Agreements on behalf of such
      party;  and (C) a copy of the Certificate of  Incorporation or Articles of
      Incorporation  and  By-Laws  and general  authorizing  resolutions  of the
      boards  of  directors  (or  executive  committees)  or other  satisfactory
      evidence of  authorization of Owner  Participant,  First Security and WTC,
      certified  as of the  Delivery  Date by the  Secretary  or an Assistant or
      Attesting  Secretary  of  Owner  Participant,   First  Security  and  WTC,
      respectively,  which authorize the execution,  delivery and performance by
      Owner Participant,  First Security and WTC,  respectively,  of each of the
      Operative  Agreements  to which it is a party,  together  with such  other
      documents and evidence with respect to it as Lessee or any Participant may
      reasonably   request  in  order  to  establish  the  consummation  of  the
      transactions  contemplated  by  this  Agreement  and  the  taking  of  all
      corporate proceedings in connection therewith;

           (xvii) an Officer's  Certificate of Lessee,  dated as of the Delivery
      Date,  stating that its  representations  and warranties set forth in this
      Agreement  are true and correct as of the Delivery Date (or, to the extent
      that any such  representation and warranty expressly relates to an earlier
      date, true and correct as of such earlier date);

           (xviii) an Officer's  Certificate of First Security,  dated as of the
      Delivery Date,  stating that its  representations  and warranties,  in its
      individual capacity and as Owner Trustee,  set forth in this Agreement are
      true and correct as of the Delivery  Date (or, to the extent that any such
      representation and warranty expressly relates to an earlier date, true and
      correct as of such earlier date);

<PAGE>

           (xix) an Officer's Certificate of Owner Participant,  dated as of the
      Delivery Date, stating that its  representations  and warranties set forth
      in this Agreement are true and correct as of the Delivery Date (or, to the
      extent that any such  representation  and warranty expressly relates to an
      earlier date, true and correct as of such earlier date);

           (xx) an Officer's  Certificate of WTC, dated as of the Delivery Date,
      stating  that  its  representations  and  warranties,  in  its  individual
      capacity or as Mortgagee,  a Pass Through Trustee or Subordination  Agent,
      as the case may be, set forth in this Agreement are true and correct as of
      the  Delivery  Date (or,  to the extent that any such  representation  and
      warranty expressly relates to an earlier date, true and correct as of such
      earlier date);

           (xxi) an application for registration of the Aircraft with the FAA in
      the name of Owner Trustee; PROVIDED, that only special counsel in Oklahoma
      City,  Oklahoma  shall  receive the sole  executed copy thereof for filing
      with the FAA;

           (xxii) the Financing Statements;

           (xxiii) the  following  opinions of  counsel,  in each case dated the
      Delivery Date:

                  (A) an opinion of Hughes Hubbard & Reed LLP,  special  counsel
            to Lessee, substantially in the form of Exhibit A;

                  (B) an opinion of Lessee's Legal Department,  substantially in
            the form of Exhibit B;

                  (C) an opinion of [________  ________,]  corporate  counsel to
            Airframe Manufacturer, substantially in the form of Exhibit C;

                  (D) an opinion of Ray,  Quinney & Nebeker,  special counsel to
            Owner Trustee, substantially in the form of Exhibit D;

                  (E) an opinion of Richards,  Layton & Finger,  special counsel
            to Mortgagee and the Loan Participants, substantially in the form of
            Exhibit E;

                  (F) an  opinion  of  [__________,]  special  counsel  to Owner
            Participant, substantially in the form of Exhibit F;

<PAGE>

                  (G) an opinion  of Lytle  Soule & Curlee,  special  counsel in
            Oklahoma City, Oklahoma, substantially in the form of Exhibit G; and

                  (H) an opinion of [___________,]  special tax counsel to Owner
            Participant,  with  respect  to  certain  tax  consequences  of  the
            transactions   contemplated  hereby;   PROVIDED,   that  only  Owner
            Participant shall receive such opinion;

           (xxiv)  a  copy  of  a  current,   valid   Standard   Certificate  of
      Airworthiness for the Aircraft duly issued by the FAA;

           (xxv)  the  Participants  and their  respective  counsel  shall  have
      received  copies of such  documents  and papers as such  Participants  may
      reasonably  request,  other than (A) in the case of the Loan Participants,
      copies of the Purchase  Agreement,  provided that special  counsel for the
      Loan  Participants  may inspect the Purchase  Agreement in connection with
      the  transactions  contemplated  hereby or as a basis  for such  counsel's
      closing  opinion,  and  (B)  in the  case  of  parties  other  than  Owner
      Participant and its special counsel, the Tax Indemnity Agreement.

               5.1.3       OTHER COMMITMENTS

      Each other  Participant shall have made available the Dollar amount of its
Commitment as directed by Owner Trustee in accordance with Section 4.

               5.1.4       VIOLATION OF LAW

      No change  shall have  occurred  after the date of this  Agreement  in any
applicable Law that makes it a violation of Law for (a) Lessee, any Participant,
Subordination Agent, Owner Trustee or Mortgagee to execute,  deliver and perform
the Operative  Agreements to which any of them is a party or (b) any Participant
to make the Dollar  amount of its  Commitment  available  or, in the case of any
Loan Participant, to acquire an Equipment Note or to realize the benefits of the
security afforded by the Trust Indenture.

               5.1.5       TAX LAW CHANGE

      In respect of Owner  Participant,  no Adverse Change in Tax Law shall have
been  enacted,  promulgated  or issued on or prior to the Delivery  Date.  Owner
Participant agrees to consider  promptly,  and to consult with Lessee concerning
any such  Adverse  Change in Tax Law and to advise  Lessee and Loan  Participant
promptly if Owner Participant determines that an Adverse Change in Tax Law which

<PAGE>

has been enacted or promulgated or, if proposed, has a substantial likelihood of
becoming  effective,  would cause Owner  Participant  to elect not to close with
respect to the  Aircraft.  At any time on or before  the  Delivery  Date,  Owner
Participant may notify Lessee and Loan Participant that Owner Participant elects
not to close as a result  of the  enactment,  promulgation  or  issuance  of any
Adverse  Change in Tax Law on or  before  the  Delivery  Date,  specifying  such
Adverse  Change in Tax Law;  and  failure  to give such  notice on or before the
Delivery Date shall preclude Owner  Participant from not closing with respect to
such Aircraft as a result of any Adverse Change in Tax Law.

               5.1.6       REPRESENTATIONS, WARRANTIES AND COVENANTS

      The  representations  and warranties of each other party to this Agreement
made, in each case, in this  Agreement and in any other  Operative  Agreement to
which it is a party,  shall be true and accurate in all material  respects as of
the Delivery Date (unless any such  representation  and warranty shall have been
made with reference to a specified date, in which case such  representation  and
warranty  shall be true and accurate as of such  specified  date) and each other
party to this  Agreement  shall have  performed  and  observed,  in all material
respects, all of its covenants, obligations and agreements in this Agreement and
in any  other  Operative  Agreement  to which it is a party  to be  observed  or
performed by it as of the Delivery Date.

               5.1.7       NO EVENT OF DEFAULT

      On the Delivery Date, no event shall have occurred and be  continuing,  or
would result from the sale, mortgage or lease of the Aircraft, which constitutes
a Lease Default or Lease Event of Default,  or an Indenture Default or Indenture
Event of Default.

               5.1.8       NO EVENT OF LOSS

      No Event of Loss with  respect to the  Airframe  or any Engine  shall have
occurred and no circumstance,  condition,  act or event that, with the giving of
notice or lapse of time or both,  would give rise to or  constitute  an Event of
Loss with respect to the Airframe or any Engine shall have occurred.

               5.1.9       TITLE

      Owner Trustee shall have good title (subject to filing and  recordation of
the FAA Bill of Sale  with the FAA) to the  Aircraft,  free and  clear of Liens,
except (a) the rights of Lessee under the Lease and Lease  Supplement No. 1, (b)
the  Lien  created  by the  Trust  Indenture  and the  initial  Trust  Indenture

<PAGE>

Supplement,  (c) the  beneficial  interest of Owner  Participant  created by the
Trust  Agreement,  (d) Liens  permitted  by clause (d) (solely for taxes not yet
due) of Section 6 of the Lease and (e) Liens  permitted by clause (e) of Section
6 of the Lease.

               5.1.10      CERTIFICATION

      The Aircraft shall have been duly  certificated  by the FAA as to type and
airworthiness in accordance with the terms of the Purchase Agreement.

               5.1.11      SECTION 1110

      Owner Trustee,  as lessor under the Lease (and  Mortgagee,  as assignee of
Owner Trustee under the Trust  Indenture),  shall be entitled to the benefits of
Section  1110  (as  currently  in  effect)  with  respect  to the  right to take
possession  of the Airframe and Engines as provided in the Lease in the event of
a case under Chapter 11 of the Bankruptcy Code in which Lessee is a debtor.

               5.1.12      FILING

      On the  Delivery  Date (a) the FAA Filed  Documents  shall  have been duly
filed for  recordation  (or shall be in the  process  of being so duly filed for
recordation)  with the FAA in  accordance  with  the Act and (b) each  Financing
Statement  shall  have been duly  filed (or shall be in the  process of being so
duly filed) in the appropriate jurisdiction.

               5.1.13      NO PROCEEDINGS

      No action or proceeding shall have been  instituted,  nor shall any action
be threatened in writing,  before any  Government  Entity,  nor shall any order,
judgment or decree  have been issued or proposed to be issued by any  Government
Entity,  to  set  aside,   restrain,   enjoin  or  prevent  the  completion  and
consummation  of  this  Agreement  or  any  other  Operative  Agreement  or  the
transactions contemplated hereby or thereby.

               5.1.14      GOVERNMENTAL ACTION

      All  appropriate  action required to have been taken prior to the Delivery
Date by the  FAA,  or any  governmental  or  political  agency,  subdivision  or
instrumentality  of the  United  States,  in  connection  with the  transactions
contemplated by this Agreement shall have been taken,  and all orders,  permits,
waivers,  authorizations,  exemptions and approvals of such entities required to
be  in  effect  on  the  Delivery  Date  in  connection  with  the  transactions
contemplated by this Agreement shall have been issued.

<PAGE>

               5.1.15      NOTE PURCHASE AGREEMENT

      The conditions  precedent to the obligations of the Loan  Participants and
the other  requirements  relating to the  Aircraft and the  Equipment  Notes set
forth in the Note Purchase Agreement shall have been satisfied.

               5.1.16      PERFECTED SECURITY INTEREST

      On the Delivery  Date,  after giving effect to the filing of the FAA Filed
Documents and the  Financing  Statements,  Mortgagee  shall have received a duly
perfected  first priority  security  interest in all of Owner  Trustee's  right,
title and  interest in the  Aircraft  and the Lease,  subject  only to Permitted
Liens.

      5.2        CONDITIONS PRECEDENT TO OBLIGATIONS OF OWNER TRUSTEE

      The  obligation of Owner Trustee to direct the  Participants  to apply the
Commitments to pay Lessor's Cost on the Delivery Date is subject to satisfaction
or waiver by Owner Trustee,  on or prior to the Delivery Date, of the conditions
precedent set forth below in this Section 5.2.

               5.2.1       NOTICE

      Owner Trustee shall have received the notice  described in Section 4.1 or,
in the case of a Delayed  Delivery Date, 4.3, when and as required  thereby,  or
shall have waived such notice.

               5.2.2       DOCUMENTS

      Executed  originals  of  the  agreements,  instruments,   certificates  or
documents  described in Section 5.1.2 shall have been received by Owner Trustee,
except as specifically provided therein,  unless the failure to receive any such
agreement,  instrument,  certificate  or document is the result of any action or
inaction by Owner Trustee.

               5.2.3       OTHER CONDITIONS PRECEDENT

      Each of the  conditions  set forth in  Sections  5.1.4,  5.1.6,  5.1.7 and
5.1.11 shall have been satisfied  unless the failure of any such condition to be
satisfied is the result of any action or inaction by Owner Trustee.

      5.3        CONDITIONS PRECEDENT TO OBLIGATIONS OF MORTGAGEE

      The  obligation of Mortgagee to  authenticate  the Equipment  Notes on the
Delivery Date is subject to the satisfaction or waiver by Mortgagee, on or prior

<PAGE>

to the  Delivery  Date,  of the  conditions  precedent  set forth  below in this
Section 5.3.

               5.3.1       NOTICE

      Mortgagee  shall have received the notice  described in Section 4.1 or, in
the case of a Delayed Delivery Date, 4.3, when and as required thereby, or shall
have waived such notice.

               5.3.2       DOCUMENTS

      Executed  originals  of  the  agreements,  instruments,   certificates  or
documents  described  in Section  5.1.2 shall have been  received by  Mortgagee,
except as specifically provided therein,  unless the failure to receive any such
agreement,  instrument,  certificate  or document is the result of any action or
inaction by Mortgagee.

               5.3.3       OTHER CONDITIONS PRECEDENT

      Each of the  conditions  set forth in  Sections  5.1.4,  5.1.6,  5.1.7 and
5.1.11 shall have been satisfied  unless the failure of any such condition to be
satisfied is the result of any action or inaction by Mortgagee.

      5.4        CONDITIONS PRECEDENT TO OBLIGATIONS OF LESSEE

      The  obligation  of Lessee to lease the Aircraft on the  Delivery  Date is
subject to the  satisfaction  or waiver by Lessee,  on or prior to the  Delivery
Date, of the conditions precedent set forth below in this Section 5.4.

               5.4.1       DOCUMENTS

      Executed  originals  of  the  agreements,  instruments,   certificates  or
documents described in Section 5.1.2 shall have been received by Lessee,  except
as specifically  provided therein,  and shall be satisfactory to Lessee,  unless
the failure to receive any such agreement,  instrument,  certificate or document
is the result of any action or inaction by Lessee.

               5.4.2       SALES TAX

      Lessee  shall be satisfied  that no sales,  use,  value  added,  goods and
services  or like tax,  and no stamp tax duty,  is payable  with  respect to the
delivery  of the  Aircraft  on the  Delivery  Date to the extent that Lessee has
liability therefor under Section 9.3.

<PAGE>

               5.4.3       OTHER CONDITIONS PRECEDENT

      Each  of  the   conditions   set  forth  in  Sections  5.1.3  (as  to  all
Participants), 5.1.4, 5.1.5, 5.1.6, 5.1.7 (as to Indenture Defaults or Indenture
Events of Default not  constituting  Lease  Defaults or Lease Events of Default,
respectively),  5.1.8, 5.1.9, 5.1.10,  5.1.11,  5.1.12,  5.1.13 and 5.1.14 shall
have  been  satisfied  or waived  by  Lessee,  unless  the  failure  of any such
condition to be satisfied is the result of any action or inaction by Lessee.

               5.4.4       TAX LAW CHANGE

      No  Adverse  Change in Tax Law shall  have been  enacted,  promulgated  or
proposed on or prior to the Delivery Date.  Lessee agrees to consider  promptly,
and to consult with Owner Participant concerning, any such Adverse Change in Tax
Law and to advise  Owner  Participant  and Loan  Participant  promptly if Lessee
determines  that an  Adverse  Change  in Tax  Law  which  has  been  enacted  or
promulgated or, if proposed, has a substantial likelihood of becoming effective,
would cause Lessee to elect not to close the  transactions  contemplated  by the
Lease and this Agreement. At any time on or before the Delivery Date, Lessee may
notify Owner  Participant and Loan  Participant  that Lessee elects not to close
the transactions contemplated by the Lease and this Agreement as a result of the
enactment,  promulgation  or  proposal  of any  Adverse  Change in Tax Law on or
before the Delivery Date, specifying such Adverse Change in Tax Law.

      5.5        POST-REGISTRATION OPINION

      Promptly upon the  registration of the Aircraft and the recordation of the
FAA Filed Documents pursuant to the Act, Lessee will cause Lytle Soule & Curlee,
special  counsel  in  Oklahoma  City,  Oklahoma,  to  deliver  to  Lessee,  each
Participant,  Owner  Trustee  and  Mortgagee  a  favorable  opinion or  opinions
addressed to each of them with respect to such registration and recordation.

SECTION 6.       REPRESENTATIONS AND WARRANTIES

      6.1        LESSEE'S REPRESENTATIONS AND WARRANTIES

      Lessee represents and warrants to each Participant,  Subordination  Agent,
Owner Trustee and Mortgagee that:

               6.1.1       ORGANIZATION; QUALIFICATION

      Lessee is a corporation  duly  incorporated,  validly existing and in good
standing under the Laws of the State of Delaware and has the corporate power and

<PAGE>

authority to conduct the business in which it is currently engaged and to own or
hold under lease its  properties  and to enter into and perform its  obligations
under the Lessee Operative  Agreements.  Lessee is duly qualified to do business
as a foreign  corporation  in good  standing in each  jurisdiction  in which the
nature and  extent of the  business  conducted  by it, or the  ownership  of its
properties,  requires  such  qualification,  except  where the  failure to be so
qualified would not give rise to a Material Adverse Change to Lessee.

               6.1.2       CORPORATE AUTHORIZATION

      Lessee has taken, or caused to be taken,  all necessary  corporate  action
(including,  without  limitation,  the  obtaining  of any consent or approval of
stockholders  required  by its  Certificate  of  Incorporation  or  By-Laws)  to
authorize the execution and delivery of each of the Lessee Operative Agreements,
and the performance of its obligations thereunder.

               6.1.3       NO VIOLATION

      The execution and delivery by Lessee of the Lessee  Operative  Agreements,
the performance by Lessee of its obligations  thereunder and the consummation by
Lessee on the Delivery Date of the transactions contemplated thereby, do not and
will not (a)  violate any  provision  of the  Certificate  of  Incorporation  or
By-Laws of Lessee, (b) violate any Law applicable to or binding on Lessee or (c)
violate or  constitute  any default  under (other than any  violation or default
that would not result in a Material Adverse Change to Lessee),  or result in the
creation of any Lien (other than as permitted under the Lease) upon the Aircraft
under, any indenture,  mortgage,  chattel mortgage,  deed of trust,  conditional
sales contract, lease, loan or other material agreement,  instrument or document
to which Lessee is a party or by which Lessee or any of its properties is bound.

               6.1.4       APPROVALS

      The execution and delivery by Lessee of the Lessee  Operative  Agreements,
the performance by Lessee of its obligations  thereunder and the consummation by
Lessee on the Delivery Date of the transactions  contemplated thereby do not and
will not require the consent or approval  of, or the giving of notice to, or the
registration  with,  or the  recording or filing of any  documents  with, or the
taking of any other action in respect of, (a) any trustee or other holder of any
Debt of Lessee and (b) any Government  Entity,  other than the filing of (x) the
FAA Filed Documents and the Financing  Statements (and  continuation  statements
periodically) and (y) filings, recordings,  notices or other ministerial actions

<PAGE>

pursuant  to any  routine  recording,  contractual  or  regulatory  requirements
applicable to it.

               6.1.5       VALID AND BINDING AGREEMENTS

      The Lessee Operative  Agreements have been duly  authorized,  executed and
delivered by Lessee and, assuming the due authorization,  execution and delivery
thereof by the other party or parties thereto,  constitute the legal,  valid and
binding  obligations of Lessee and are enforceable  against Lessee in accordance
with the respective terms thereof,  except as such enforceability may be limited
by bankruptcy, insolvency,  reorganization,  receivership,  moratorium and other
similar Laws affecting the rights of creditors  generally and general principles
of equity, whether considered in a proceeding at law or in equity.

               6.1.6       LITIGATION

      Except as set forth in Lessee's most recent Annual Report on Form 10-K, as
amended,  filed by Lessee with the SEC on or prior to the Delivery  Date,  or in
any Quarterly  Report on Form 10-Q or Current Report on Form 8-K filed by Lessee
with the SEC  subsequent to such Form 10-K and on or prior to the Delivery Date,
no action,  claim or  proceeding  is now pending or, to the Actual  Knowledge of
Lessee,  threatened,  against  Lessee,  before  any  court,  governmental  body,
arbitration board, tribunal or administrative agency, which is reasonably likely
to be determined adversely to Lessee and if determined adversely to Lessee would
result in a Material Adverse Change.

               6.1.7       FINANCIAL CONDITION

      The audited  consolidated balance sheet of Lessee with respect to Lessee's
most recent  fiscal year  included in Lessee's most recent Annual Report on Form
10-K,  as amended,  filed by Lessee with the SEC,  and the related  consolidated
statements  of  operations  and cash flows for the  period  then ended have been
prepared in accordance with GAAP and fairly present in all material respects the
financial condition of Lessee and its consolidated  subsidiaries as of such date
and the results of its operations and cash flows for such period,  and since the
date of such balance  sheet,  there has been no material  adverse change in such
financial condition or operations of Lessee, except for matters disclosed in (a)
the  financial  statements  referred  to above or (b) any  subsequent  Quarterly
Report on Form 10-Q or Current  Report on Form 8-K filed by Lessee  with the SEC
on or prior to the date hereof.

<PAGE>

               6.1.8       REGISTRATION AND RECORDATION

      Except for (a) the  registration  of the Aircraft with the FAA pursuant to
the Act in the  name of Owner  Trustee,  (b) the  filing  for  recordation  (and
recordation)  of the FAA  Filed  Documents,  (c)  the  filing  of the  Financing
Statements (and continuation statements relating thereto at periodic intervals),
(d) the  taking  of  possession  and  retention  by  Mortgagee  of the  original
counterparts  of the Lease and Lease  Supplement No. 1 and (e) the affixation of
the  placards  referred  to in Section  7.1.3 of the Lease,  no further  action,
including  any filing or  recording  of any document  (including  any  financing
statement in respect  thereof  under Article 9 of the UCC) is necessary in order
to establish and perfect the right, title or interest of Owner Trustee,  and the
Mortgagee's security interest,  in the Aircraft and the Lease, as against Lessee
and any other  Person,  in each case,  in any  applicable  jurisdictions  in the
United States.

               6.1.9       CHIEF EXECUTIVE OFFICE

      The chief  executive  office  (as such term is defined in Article 9 of the
UCC) of Lessee is located at 1600 Smith Street, Houston, Texas 77002.

               6.1.10      NO DEFAULT

      No event which,  if the Aircraft were subject to the Lease,  constitutes a
Lease Default or Lease Event of Default has occurred and is continuing.

               6.1.11      NO EVENT OF LOSS

      No Event of Loss has occurred  with respect to the Airframe or any Engine,
and, to the Actual Knowledge of Lessee, no circumstance, condition, act or event
has occurred that, with the giving of notice or lapse of time or both gives rise
to or constitutes an Event of Loss with respect to the Airframe or any Engine.

               6.1.12      COMPLIANCE WITH LAWS

      (a)   Lessee is a Citizen of the United States and a U.S. Air Carrier.

      (b)   Lessee   holds  all  licenses,   permits  and  franchises  from  the
appropriate Government Entities necessary to authorize Lessee to lawfully engage
in air transportation and to carry on scheduled  commercial passenger service as

<PAGE>

currently  conducted,  except  where the  failure  to so hold any such  license,
permit or franchise would not give rise to a Material Adverse Change to Lessee.

      (c)   Lessee is not an "investment  company" or a company controlled by an
"investment  company" within the meaning of the Investment  Company Act of 1940,
as amended.

               6.1.13      SECURITIES LAWS

      Neither Lessee nor any person authorized to act on its behalf has directly
or  indirectly  offered any  beneficial  interest  or  Security  relating to the
ownership  of the  Aircraft or the Lease or any interest in the Trust Estate and
Trust  Agreement,  or any of the  Equipment  Notes or any other  interest  in or
security  under the Trust  Indenture,  for sale to,  or  solicited  any offer to
acquire any such  interest or security  from,  or has sold any such  interest or
security to, any person in violation of the Securities Act.

               6.1.14      BROKER'S FEES

      No  Person  acting on  behalf  of  Lessee  is or will be  entitled  to any
broker's fee,  commission or finder's fee in connection  with the  Transactions,
except for fees payable to Lessee's Advisor, if any.

               6.1.15      SECTION 1110

      Owner Trustee, as lessor under the Lease (and Mortgagee, as assignee under
the Trust Indenture),  is entitled to the benefits of Section 1110 (as currently
in effect)  with  respect to the right to take  possession  of the  Airframe and
Engines as provided in the Lease in the event of a case under  Chapter 11 of the
Bankruptcy Code in which Lessee is a debtor.

      6.2        OWNER PARTICIPANT'S REPRESENTATIONS AND WARRANTIES

      Owner Participant  represents and warrants to Lessee,  Loan  Participants,
Subordination Agent, Owner Trustee and Mortgagee that:

               6.2.1       ORGANIZATION, ETC.

      Owner Participant is a corporation duly incorporated, validly existing and
in good standing under the Laws of the OP Jurisdiction,  has the corporate power
and  authority to conduct the  business in which it is currently  engaged and to
own or hold under  lease its  properties  and to enter  into,  and  perform  its

<PAGE>

obligations under the Owner Participant Agreements, and has a tangible net worth
(exclusive of goodwill) greater than $75,000,000.

               6.2.2       CORPORATE AUTHORIZATION

      Owner  Participant  has  taken,  or  caused  to be  taken,  all  necessary
corporate action (including, without limitation, the obtaining of any consent or
approval  of  stockholders  required  by its  Certificate  of  Incorporation  or
By-Laws)  to  authorize  the  execution  and  delivery  of  each  of  the  Owner
Participant Agreements, and the performance of its obligations thereunder.

               6.2.3       NO VIOLATION

      The execution and delivery by Owner  Participant of the Owner  Participant
Agreements,  the performance by Owner Participant of its obligations  thereunder
and  the  consummation  by  Owner  Participant  on  the  Delivery  Date  of  the
transactions contemplated thereby, do not and will not (a) violate any provision
of the Certificate of Incorporation or By-Laws of Owner Participant, (b) violate
any Law  applicable  to or  binding  on  Owner  Participant  or (c)  violate  or
constitute any default under (other than any violation or default that would not
result in a  Material  Adverse  Change to Owner  Participant),  or result in the
creation of any Lien (other than as provided for or  otherwise  permitted in the
Operative  Agreements)  upon the Trust Estate under,  any  indenture,  mortgage,
chattel  mortgage,  deed of trust,  conditional  sales contract,  lease, loan or
other material agreement, instrument or document to which Owner Participant is a
party or by which Owner Participant or any of its properties is bound.

               6.2.4       APPROVALS

      The execution and delivery by Owner  Participant of the Owner  Participant
Agreements,  the performance by Owner Participant of its obligations  thereunder
and  the  consummation  by  Owner  Participant  on  the  Delivery  Date  of  the
transactions  contemplated  thereby do not and will not  require  the consent or
approval  of, or the  giving of notice  to,  or the  registration  with,  or the
recording or filing of any documents  with, or the taking of any other action in
respect of, (a) any trustee or other holder of any Debt of Owner Participant and
(b) any Government Entity,  other than the filing of the FAA Filed Documents and
the Financing Statements.

               6.2.5       VALID AND BINDING AGREEMENTS

      The Owner Participant  Agreements have been duly authorized,  executed and
delivered by Owner  Participant and, assuming the due  authorization,  execution
and delivery by the other party or parties thereto,  constitute the legal, valid

<PAGE>

and binding  obligations of Owner Participant and are enforceable  against Owner
Participant  in accordance  with the respective  terms  thereof,  except as such
enforceability  may  be  limited  by  bankruptcy,  insolvency,   reorganization,
receivership,  moratorium  and  other  similar  Laws  affecting  the  rights  of
creditors  generally and general  principles of equity,  whether considered in a
proceeding at law or in equity.

               6.2.6       CITIZENSHIP

      On the Delivery Date, Owner Participant is a Citizen of the United States.

               6.2.7       NO LIENS

      On the  Delivery  Date,  there are no Lessor Liens  attributable  to Owner
Participant in respect of all or any part of the Trust Estate.

               6.2.8       INVESTMENT BY OWNER PARTICIPANT

      Owner  Participant's  beneficial  interest  in the  Trust  Estate is being
acquired by it for its own account,  for  investment  and not with a view to any
resale or  distribution  thereof,  except that,  subject to the  restrictions on
transfer set forth in Section 10, the  disposition  by Owner  Participant of its
beneficial  interest  in the  Trust  Estate  shall at all  times be  within  its
control.

               6.2.9       ERISA

      No part of the funds to be used by Owner  Participant  to  acquire or hold
its  interests  in the Trust  Estate to be acquired  by it under this  Agreement
directly or indirectly constitutes assets of a Plan.

               6.2.10      LITIGATION

      There are no pending  or, to the Actual  Knowledge  of Owner  Participant,
threatened  actions or proceedings  against Owner Participant  before any court,
governmental body,  arbitration board,  administrative agency or tribunal which,
if determined adversely to Owner Participant,  would materially adversely affect
the  ability of Owner  Participant  to perform its  obligations  under the Owner
Participant Agreements.

<PAGE>

               6.2.11      SECURITIES LAWS

      Neither Owner  Participant nor any person Owner Participant has authorized
to act on its behalf has directly or indirectly offered any beneficial  interest
in or Security  relating to the ownership of the Aircraft or any interest in the
Trust Estate, or any of the Equipment Notes or any other interest in or Security
under the Trust  Indenture for sale to, or solicited any offer to acquire any of
the same from, any Person in violation of the Securities Act or applicable state
securities Laws.

                     6.2.12   BROKER'S FEES

      No Person acting on behalf of Owner  Participant is or will be entitled to
any  broker's  fee,   commission   or  finder's  fee  in  connection   with  the
Transactions.

      6.3        FIRST SECURITY'S REPRESENTATIONS AND WARRANTIES

      First Security represents and warrants to Lessee, Owner Participant,  Loan
Participants, Subordination Agent and Mortgagee that:

               6.3.1       ORGANIZATION, ETC.

      First Security is a national banking  association duly organized,  validly
existing and in good  standing  under the Laws of the United  States,  holding a
valid certificate to do business as a national banking  association with banking
authority to execute and deliver,  and perform its obligations  under, the Owner
Trustee Agreements.

               6.3.2       CORPORATE AUTHORIZATION

      First Security has taken, or caused to be taken,  all necessary  corporate
action (including,  without limitation, the obtaining of any consent or approval
of stockholders required by Law or by its Articles of Association or By-Laws) to
authorize  the  execution  and  delivery by First  Security,  in its  individual
capacity and as Owner Trustee, of each of the Owner Trustee Agreements,  and the
performance of its obligations thereunder.

               6.3.3       NO VIOLATION

      The execution and delivery by First Security,  in its individual  capacity
and as Owner Trustee of the Owner Trustee  Agreements,  the performance by First
Security,  in its individual  capacity and as Owner Trustee,  of its obligations
thereunder and the consummation by First Security in its individual capacity and
as Owner Trustee on the Delivery Date of the transactions  contemplated thereby,

<PAGE>

do not and will not (a) violate any provision of the Articles of  Association or
By-Laws of First  Security,  (b) violate any Law of the State of Utah or federal
banking Law  applicable to or binding on Owner Trustee or First  Security or (c)
violate or constitute any default under(other than any violation or default that
would  not  result  in a  Material  Adverse  Change  to First  Security,  in its
individual capacity or as Owner Trustee),  or result in the creation of any Lien
(other  than  the  Lien of the  Trust  Indenture)  upon  any  property  of First
Security,  in its  individual  capacity  and  as  Owner  Trustee,  or any of its
subsidiaries under, any indenture,  mortgage,  chattel mortgage,  deed of trust,
conditional sales contract, lease, loan or other material agreement,  instrument
or document to which First  Security,  in its  individual  capacity and as Owner
Trustee,  is a party or by which First Security,  in its individual capacity and
as Owner Trustee, or any of its properties is or may be bound or affected.

               6.3.4       APPROVALS

      The execution and delivery by First Security,  in its individual  capacity
and as Owner Trustee, of the Owner Trustee Agreements,  the performance by First
Security,  in its individual  capacity and as Owner Trustee,  of its obligations
thereunder and the  consummation by First Security,  in its individual  capacity
and as Owner  Trustee,  on the Delivery  Date of the  transactions  contemplated
thereby do not and will not require the consent,  approval or authorization  of,
or the giving of notice to, or the registration with, or the recording or filing
of any documents  with, or the taking of any other action in respect of, (a) any
trustee  or other  holder of any Debt of First  Security  or (b) any  Government
Entity  governing  banking  and trust  powers,  other than the filing of the FAA
Filed Documents and the Financing Statements.

               6.3.5       VALID AND BINDING AGREEMENTS

      The Owner  Trustee  Agreements  have been duly  authorized,  executed  and
delivered by First Security,  in its individual capacity or as Owner Trustee, as
the case may be, and  constitute  the legal,  valid and binding  obligations  of
First Security,  in its individual capacity and as Owner Trustee,  and, assuming
the due  authorization,  execution  and  delivery  thereof by the other party or
parties  thereto,  are  enforceable  against First  Security,  in its individual
capacity and as Owner Trustee,  in accordance with the respective terms thereof,
except  as  such  enforceability  may  be  limited  by  bankruptcy,  insolvency,
reorganization,  receivership,  moratorium  and other similar Laws affecting the
rights  of  creditors  generally  and  general  principles  of  equity,  whether
considered in a proceeding at law or in equity.

<PAGE>

               6.3.6       CITIZENSHIP

      On the Delivery Date, First Security is a Citizen of the United States.

               6.3.7       CHIEF EXECUTIVE OFFICE

      The chief  executive  office  (as such term is defined in Article 9 of the
UCC) of Owner Trustee is located at 79 South Main Street,  Salt Lake City,  Utah
84111.

               6.3.8       TITLE

      On the Delivery Date, Owner Trustee shall have received whatever title (a)
to the  Aircraft  (other  than  the  BFE)  as  was  conveyed  to it by  Airframe
Manufacturer and (b) to the BFE as was conveyed to it by Lessee.

               6.3.9       NO LIENS; FINANCING STATEMENTS

      On the  Delivery  Date,  there are no Lessor Liens  attributable  to First
Security or Owner Trustee in respect of all or any part of the  Aircraft,  Trust
Estate or the Trust Indenture Estate.  Except for the Financing  Statements,  it
has not, either in its individual capacity or as Owner Trustee, executed any UCC
financing statements relating to the Aircraft or the Lease.

               6.3.10      LITIGATION

      There  are no  pending  or, to the  Actual  Knowledge  of First  Security,
threatened actions or proceedings against First Security or Owner Trustee before
any  court,  governmental  body,  arbitration  board,  administrative  agency or
tribunal which,  if determined  adversely to First  Security,  would  materially
adversely  affect the ability of First  Security or Owner Trustee to perform its
obligations under the Owner Trustee Agreements.

               6.3.11      SECURITIES LAWS

      Neither First  Security,  nor any person  authorized to act on its behalf,
has directly or indirectly offered any beneficial  interest or Security relating
to the  ownership  of the Aircraft or any interest in the Trust Estate or any of
the  Equipment  Notes or any  other  interest  in or  security  under  the Trust
Indenture  for sale to, or solicited  any offer to acquire any such  interest or
security  from,  or has sold any such  interest or security to, any person other
than the  Participants,  except for the  offering  and sale of the Pass  Through
Certificates.

<PAGE>

               6.3.12      EXPENSES AND TAXES

      There are no Expenses or Taxes that may be imposed on or asserted  against
the Trust,  the Trust Estate or any part thereof or any  interest  therein,  the
Trust Indenture Estate,  Lessee, Owner Participant,  any Applicable Pass Through
Trustee,  Subordination  Agent,  Owner Trustee or Mortgagee  (except as to Owner
Trustee,  Taxes imposed on the fees payable to Owner  Trustee) under the laws of
Utah in connection with the execution,  delivery or performance of any Operative
Agreement by Owner Trustee or in  connection  with the issuance of the Equipment
Notes,  which Expenses or Taxes would not have been imposed if Owner Trustee had
not (x) had its principal place of business in, (y) performed (in its individual
capacity  or as Owner  Trustee)  any or all of its  duties  under the  Operative
Agreements  in or (z) engaged in any  activities  unrelated to the  transactions
contemplated by the Operative Agreements in, the State of Utah.

      6.4        WTC'S REPRESENTATIONS AND WARRANTIES

      WTC represents and warrants (with respect to Section 6.4.10, solely in its
capacity as Subordination  Agent) to Lessee, Owner Participant and Owner Trustee
that:

               6.4.1       ORGANIZATION, ETC.

      WTC is a Delaware banking corporation duly organized, validly existing and
in good  standing  under  the Laws of the  State of  Delaware,  holding  a valid
certificate  to do  business  as a Delaware  banking  corporation  with  banking
authority  to execute  and  deliver,  and  perform its  obligations  under,  the
Mortgagee Agreements, the Pass Through Trustee Agreements and the
Subordination Agent Agreements.

               6.4.2       CORPORATE AUTHORIZATION

      WTC has  taken,  or caused to be taken,  all  necessary  corporate  action
(including,  without  limitation,  the  obtaining  of any consent or approval of
stockholders  required by Law or by its Certificate of Incorporation or By-Laws)
to authorize the execution and delivery by WTC, in its individual capacity or as
Mortgagee, a Pass Through Trustee or Subordination Agent, as the case may be, of
the  Mortgagee   Agreements,   the  Pass  Through  Trustee  Agreements  and  the
Subordination   Agent   Agreements  and  the   performance  of  its  obligations
thereunder.

               6.4.3       NO VIOLATION

      The  execution  and  delivery  by WTC,  in its  individual  capacity or as
Mortgagee, a Pass Through Trustee or Subordination Agent, as the case may be, of

<PAGE>

the  Mortgagee   Agreements,   the  Pass  Through  Trustee  Agreements  and  the
Subordination  Agent  Agreements,  the  performance  by WTC,  in its  individual
capacity or as Mortgagee,  a Pass Through Trustee or Subordination Agent, as the
case may be, of its obligations  thereunder and the consummation on the Delivery
Date of the transactions  contemplated  thereby, do not and will not (a) violate
any provision of the Certificate of Incorporation or By-Laws of WTC, (b) violate
any Law applicable to or binding on WTC, in its  individual  capacity or (except
in the case of any Law  relating  to any  Plan)  as  Mortgagee,  a Pass  Through
Trustee or  Subordination  Agent, or (c) violate or constitute any default under
(other than any violation or default that would not result in a Material Adverse
Change to WTC, in its individual  capacity or Mortgagee,  a Pass Through Trustee
or Subordination  Agent),  or result in the creation of any Lien (other than the
Lien of the  Trust  Indenture)  upon  any  property  of WTC,  in its  individual
capacity or as Mortgagee,  a Pass Through Trustee or Subordination Agent, or any
of WTC's subsidiaries under, any indenture,  mortgage, chattel mortgage, deed of
trust, conditional sales contract, lease, loan or other agreement, instrument or
document  to which WTC,  in its  individual  capacity  or as  Mortgagee,  a Pass
Through  Trustee or  Subordination  Agent,  is a party or by which  WTC,  in its
individual  capacity or as Mortgagee,  a Pass Through  Trustee or  Subordination
Agent, or any of their respective properties is bound.

               6.4.4       APPROVALS

      The  execution  and  delivery  by WTC,  in its  individual  capacity or as
Mortgagee, a Pass Through Trustee or Subordination Agent, as the case may be, of
the  Mortgagee   Agreements,   the  Pass  Through  Trustee  Agreements  and  the
Subordination  Agent  Agreements,  the  performance  by WTC,  in its  individual
capacity or as Mortgagee,  a Pass Through Trustee or Subordination Agent, as the
case may be, of its obligations  thereunder and the consummation on the Delivery
Date by WTC, in its individual capacity or as Mortgagee,  a Pass Through Trustee
or  Subordination  Agent, as the case may be, of the  transactions  contemplated
thereby do not and will not require the consent,  approval or authorization  of,
or the giving of notice to, or the registration with, or the recording or filing
of any documents  with, or the taking of any other action in respect of, (a) any
trustee or other holder of any Debt of WTC or (b) any Government  Entity,  other
than the filing of the FAA Filed Documents and the Financing Statements.

<PAGE>

               6.4.5       VALID AND BINDING AGREEMENTS

      The Mortgagee  Agreements,  the Pass Through  Trustee  Agreements  and the
Subordination Agent Agreements have been duly authorized, executed and delivered
by WTC and, assuming the due authorization,  execution and delivery by the other
party or parties thereto, constitute the legal, valid and binding obligations of
WTC, in its  individual  capacity or as  Mortgagee,  a Pass  Through  Trustee or
Subordination Agent, as the case may be, and are enforceable against WTC, in its
individual  capacity or as Mortgagee,  a Pass Through  Trustee or  Subordination
Agent,  as the case may be, in accordance  with the  respective  terms  thereof,
except  as  such  enforceability  may  be  limited  by  bankruptcy,  insolvency,
reorganization,  receivership,  moratorium or other  similar Laws  affecting the
rights  of  creditors  generally  and  general  principles  of  equity,  whether
considered in a proceeding at law or in equity.

               6.4.6       CITIZENSHIP

      WTC is a Citizen of the United States.

               6.4.7       NO LIENS

      On the Delivery  Date,  there are no Lessor Liens  attributable  to WTC in
respect of all or any part of the Trust Estate or the Trust Indenture Estate.

               6.4.8       LITIGATION

      There  are no  pending  or, to the  Actual  Knowledge  of WTC,  threatened
actions or proceedings  against WTC, in its individual capacity or as Mortgagee,
a Pass Through Trustee or Subordination Agent, before any court,  administrative
agency or tribunal  which,  if  determined  adversely to WTC, in its  individual
capacity or as Mortgagee,  a Pass Through Trustee or Subordination Agent, as the
case may be,  would  materially  adversely  affect the  ability  of WTC,  in its
individual  capacity or as Mortgagee,  a Pass Through  Trustee or  Subordination
Agent, as the case may be, to perform its obligations under any of the Mortgagee
Agreements,  the Pass Through  Trustee  Agreements  or the  Subordination  Agent
Agreements.

               6.4.9       SECURITIES LAWS

      Neither WTC nor any person authorized to act on its behalf has directly or
indirectly offered any beneficial interest or Security relating to the ownership
of the  Aircraft  or any  interest in the Trust  Indenture  Estate or any of the
Equipment  Notes or any other interest in or security under the Trust  Indenture

<PAGE>

for sale to, or  solicited  any offer to acquire  any such  interest or security
from,  or has sold any such  interest or security  to, any Person other than the
Participants, except for the offering and sale of the Pass Through Certificates.

               6.4.10      INVESTMENT

      The Equipment  Notes to be acquired by the  Subordination  Agent are being
acquired by it for the account of the  Applicable  Pass  Through  Trustees,  for
investment  and not with a view to any resale or  distribution  thereof,  except
that,  subject to the restrictions on transfer set forth in Section 10.1.3,  the
disposition  by it of its  Equipment  Notes  shall at all  times be  within  its
control.

               6.4.11      TAXES

      There are no Taxes payable by any Applicable  Pass Through Trustee or WTC,
as the  case  may  be,  imposed  by  the  State  of  Delaware  or any  political
subdivision  or taxing  authority  thereof  in  connection  with the  execution,
delivery and  performance  by such Pass Through  Trustee or WTC, as the case may
be, of this Agreement or any of the Pass Through Trustee  Agreements (other than
franchise  or other  taxes  based  on or  measured  by any fees or  compensation
received  by any such  Pass  Through  Trustee  or WTC,  as the case may be,  for
services rendered in connection with the transactions contemplated by any of the
Pass Through Trust Agreements), and there are no Taxes payable by any Applicable
Pass  Through  Trustee  or WTC,  as the case  may be,  imposed  by the  State of
Delaware  or  any  political   subdivision   thereof  in  connection   with  the
acquisition,  possession or ownership by any such Pass Through Trustee of any of
the Equipment Notes (other than franchise or other taxes based on or measured by
any fees or  compensation  received by any such Pass Through  Trustee or WTC, as
the case may be, for  services  rendered  in  connection  with the  transactions
contemplated by any of the Pass Through Trust  Agreements),  and,  assuming that
the trusts created by the Pass Through Trust  Agreements  will not be taxable as
corporations,  but, rather,  each will be characterized as a grantor trust under
subpart  E,  Part  I of  Subchapter  J of the  Code  or as a  partnership  under
Subchapter K of the Code,  such trusts will not be subject to any Taxes  imposed
by the State of Delaware or any political subdivision thereof;

               6.4.12      CONTROL

      WTC is not an Affiliate of the Owner Participant or the Owner Trustee.

<PAGE>

               6.4.13      BROKER'S FEES

      No  Person  acting  on behalf of WTC,  in its  individual  capacity  or as
Mortgagee,  any Applicable  Pass Through Trustee or  Subordination  Agent, is or
will be entitled to any broker's  fee,  commission or finder's fee in connection
with the Transactions.

SECTION 7.       COVENANTS, UNDERTAKINGS AND AGREEMENTS

      7.1        COVENANTS OF LESSEE

      Lessee  covenants  and  agrees,  at its own cost and  expense,  with Owner
Participant, Loan Participants, Owner Trustee and Mortgagee as follows:

               7.1.1       CORPORATE EXISTENCE; U.S. AIR CARRIER

      Lessee shall at all times  maintain  its  corporate  existence,  except as
permitted by Section 13.2 of the Lease, and shall at all times remain a U.S.
Air Carrier.

               7.1.2       NOTICE OF CHANGE OF CHIEF EXECUTIVE OFFICE

      Lessee will give Owner  Participant,  Owner Trustee and  Mortgagee  timely
written  notice (but in any event within 30 days prior to the  expiration of the
period of time specified under applicable Law to prevent lapse of perfection) of
any relocation of its chief executive office (as such term is defined in Article
9 of the UCC) from its then present  location and will  promptly take any action
required by Section 7.1.3(c) as a result of such relocation.

            7.1.3          CERTAIN ASSURANCES

      (a)   Lessee shall duly execute,  acknowledge and deliver,  or shall cause
to be  executed,  acknowledged  and  delivered,  all  such  further  agreements,
instruments,  certificates or documents,  and shall do and cause to be done such
further acts and things,  in any case,  as Owner  Participant,  Owner Trustee or
Mortgagee  shall  reasonably  request  for  accomplishing  the  purposes of this
Agreement and the other  Operative  Agreements,  PROVIDED THAT any instrument or
other  document so executed by Lessee will not expand any  obligations  or limit
any  rights  of  Lessee  in  respect  of the  transactions  contemplated  by any
Operative Agreement.

      (b)   Lessee   shall  promptly  take  such  action  with  respect  to  the
recording,  filing,  re-recording and refiling of the Lease, the Trust Agreement
and the Trust  Indenture  and the  respective  supplements  thereto,  including,
without  limitation,  Lease  Supplement  No. 1 and the initial  Trust  Indenture

<PAGE>

Supplement,  as shall  be  necessary  to  establish,  perfect  and  protect  the
interests and rights of Owner Trustee in and to the Aircraft and under the Lease
and the  perfection  and  priority of the Lien  created by the Trust  Indenture.
Lessee shall  furnish to Owner  Participant  or Owner  Trustee such  information
(other  than with  respect to the  citizenship  of Owner  Participant  and Owner
Trustee) in Lessee's possession or otherwise  reasonably  available to Lessee as
may be required to enable Owner Participant or Owner Trustee to make application
for registration of the Aircraft under the Act (subject to Lessee's rights under
Section 7.1.2 of the Lease) and shall pay or cause to be paid all  out-of-pocket
costs and expenses thereof (including, without limitation, reasonable attorneys'
fees and disbursements).

      (c)   Lessee,  at its sole  cost and  expense,  will  cause  the FAA Filed
Documents,  the Financing  Statements and all  continuation  statements (and any
amendments necessitated by any combination,  consolidation or merger pursuant to
Section 13.2 of the Lease, or any relocation of its chief  executive  office) in
respect of the  Financing  Statements  to be prepared  and,  subject only to the
execution and delivery  thereof by Owner Trustee and  Mortgagee,  as applicable,
duly and timely  filed and  recorded,  or filed for  recordation,  to the extent
permitted under the Act (with respect to the FAA Filed  Documents) or the UCC or
similar law of any other  applicable  jurisdiction  (with  respect to such other
documents).

      (d)   If  the  Aircraft has been  registered  in a country  other than the
United  States  pursuant to Section  7.1.2 of the Lease,  Lessee will furnish to
Owner Trustee,  Mortgagee and each Participant annually after such registration,
commencing  with the  calendar  year after such  registration  is  effected,  an
opinion  of  special  counsel  reasonably  satisfactory  to  Owner  Trustee  and
Mortgagee  stating that,  in the opinion of such  counsel,  either that (i) such
action has been taken with respect to the  recording,  filing,  rerecording  and
refiling of the Operative  Agreements and any supplements and amendments thereto
as  is  necessary  to  establish,   perfect  and  protect  Owner  Trustee's  and
Mortgagee's  respective right, title and interest in and to the Aircraft and the
Operative  Agreements,  reciting  the details of such  actions,  or (ii) no such
action  is  necessary  to  maintain  the  perfection  of such  right,  title and
interest.

               7.1.4       SECURITIES LAWS

      Neither  Lessee  nor  any  person  authorized  to act on its  behalf  will
directly or indirectly offer any beneficial interest or Security relating to the
ownership  of the  Aircraft or the Lease or any interest in the Trust Estate and
Trust  Agreement  or any of the  Equipment  Notes or any  other  interest  in or

<PAGE>

security under the Trust Indenture, for sale to, or solicit any offer to acquire
any such  interest or security  from,  or sell any such interest or security to,
any person in violation of the  Securities  Act or  applicable  state or foreign
securities Laws.

      7.2        COVENANTS OF OWNER PARTICIPANT

      Owner  Participant  covenants  and agrees  with  Lessee,  and except  with
respect to Section  7.2.4,  Loan  Participants,  Owner  Trustee and Mortgagee as
follows:

               7.2.1       LIENS

      Owner  Participant  (a) will not  directly or  indirectly  create,  incur,
assume or suffer to exist any Lessor Lien  attributable to it on or with respect
to all or any part of the  Trust  Estate,  the  Trust  Indenture  Estate  or the
Aircraft,  (b) will,  at its own cost and expense,  promptly take such action as
may be necessary to discharge any Lessor Lien  attributable to Owner Participant
on all or any part of the  Trust  Estate,  the  Trust  Indenture  Estate  or the
Aircraft and (c) will hold harmless and indemnify  Lessee,  Owner Trustee,  each
Note Holder,  Mortgagee,  each of their  respective  Affiliates,  successors and
permitted  assigns,  the Trust  Estate and the Trust  Indenture  Estate from and
against (i) any and all Expenses,  (ii) any reduction in the amount  payable out
of the Trust  Estate or the Trust  Indenture  Estate and (iii) any  interference
with the  possession,  operation or other use of all or any part of the Aircraft
imposed  on,  incurred  by  or  asserted  against  any  of  the  foregoing  as a
consequence of any such Lessor Lien.

               7.2.2       REVOCATION OF TRUST AGREEMENT

      (a)   Owner  Participant  will  comply  with the  provisions  of the Trust
Agreement applicable to it, and will not terminate or revoke the Trust Agreement
or the trusts created thereunder without the prior written consent of Lessee and
Mortgagee and will not amend, modify or supplement the Trust Agreement, or waive
any of the provisions  thereof, if such amendment,  modification,  supplement or
waiver would have a material  adverse  effect on Lessee,  without the consent of
Lessee, or on Mortgagee or any Note Holder, without the consent of Mortgagee.

      (b)   Notwithstanding  Section 7.2.2(a), Owner Participant may at any time
remove Owner Trustee pursuant to Section 9.1 of the Trust Agreement or terminate
the Trust Agreement pursuant to Section 11.2 of the Trust Agreement.

<PAGE>

               7.2.3       CHANGE OF SITUS OF OWNER TRUST

      If, at any time, any Tax Indemnitee or the Trust Estate becomes subject to
any Taxes for which it is indemnified  pursuant to Section 9.3 of this Agreement
and if, as a consequence  thereof,  Lessee should  request that the situs of the
Trust be moved to another  state in the United States from the state in which it
is then located, the situs of the Trust may be moved with the written consent of
Owner Participant  (which consent shall not be unreasonably  withheld) and Owner
Participant will take whatever action may be reasonably  necessary to accomplish
such  removal;  PROVIDED,  that,  in any event,  (a) Lessee  shall  provide such
additional tax  indemnification as Owner Participant and the Note Holders or the
Pass  Through   Trustees  may   reasonably   request  to  cover  any  additional
unindemnified  Taxes or loss of Tax benefits described in the assumptions in the
Tax Indemnity  Agreement  resulting  from such change in the situs of the Trust,
(b)  the  rights  and  obligations  under  the  Operative  Agreements  of  Owner
Participant,  the Note Holders, Pass Through Trustees and Mortgagee shall not be
adversely affected as a result of the taking of such action, (c) the Lien of the
Trust Indenture on the Trust Indenture Estate shall not be adversely affected by
such  action,  and Lessee and Owner  Trustee  shall  execute  and  deliver  such
documents  as may  reasonably  be requested by Mortgagee to protect and maintain
the perfection and priority of such Lien,  (d) Owner  Participant,  Pass Through
Trustees  and  Mortgagee  shall have  received an opinion or opinions of counsel
(which counsel is reasonably  satisfactory  to Owner  Participant,  Pass Through
Trustees and Mortgagee) in scope, form and substance reasonably  satisfactory to
Owner  Participant,  Pass Through  Trustees and Mortgagee to the effect that (i)
the Trust, as thus removed,  shall remain a validly  established trust, (ii) any
amendments to the Trust  Agreement  necessitated by such removal shall have been
duly  authorized,  executed  and  delivered  by the  parties  thereto  and shall
constitute  the valid and binding  obligations  of such parties,  enforceable in
accordance  with  their  terms,  (iii)  covering  such  other  matters  as Owner
Participant,  Pass Through Trustees or Mortgagee may reasonably request,  (e) if
such removal involves the replacement of Owner Trustee,  then Owner Participant,
Pass Through Trustees and Mortgagee shall have received an opinion of counsel to
such successor  Owner Trustee in form and substance  reasonably  satisfactory to
Owner  Participant,  Pass Through  Trustees and  Mortgagee  covering the matters
described in the opinion delivered pursuant to Section  5.1.2(xxiii)(D)  and (f)
Lessee shall indemnify and hold harmless Owner Participant,  Note Holders,  Pass
Through  Trustees and First  Security,  in its individual  capacity and as Owner
Trustee,  on a net after-tax basis against any and all reasonable  out-of-pocket
costs  and  expenses  including  attorneys'  fees  and  disbursements,  fees and

<PAGE>

expenses of any new owner  trustee,  registration,  recording or filing fees and
taxes  incurred by Owner  Participant,  Note Holders,  Pass Through  Trustees or
Owner Trustee in connection with such change of situs.  Owner Participant agrees
with  Lessee  that it will not consent to or direct a change in the situs of the
Trust Estate without the prior written consent of Lessee.

               7.2.4       COMPLIANCE WITH LEASE PROVISIONS

      Owner Participant will, solely for the benefit of Lessee,  comply with the
express provisions applicable to it contained in the Lease.

               7.2.5       SECURITIES ACT

      Owner  Participant  will not directly or indirectly  offer any  beneficial
interest or security  relating to the  ownership of the Aircraft or any interest
in the Trust Estate or any of the  Equipment  Notes or any other  interest in or
security under the Trust  Indenture for sale to, or solicit any offer to acquire
any such  interest or security  from,  or sell any such interest or security to,
any Person in violation of the  Securities  Act or  applicable  state or foreign
securities  Laws,  provided that the foregoing  shall not be deemed to impose on
Owner  Participant any  responsibility  with respect to any such offer,  sale or
solicitation by any other party hereto.

               7.2.6       REGARDING THE OWNER TRUSTEE

      Owner  Participant  will cause Owner  Trustee to perform  its  obligations
under each Owner Trustee Agreement.

      7.3        COVENANTS OF FIRST SECURITY AND OWNER TRUSTEE

      First Security,  in its individual  capacity  and/or as Owner Trustee,  as
provided below,  covenants and agrees with Lessee, Owner Participant,  each Note
Holder and Mortgagee as follows:

               7.3.1       LIENS

      First Security (a) will not directly or indirectly create,  incur,  assume
or suffer to exist any Lessor  Lien  attributable  to it or Owner  Trustee  with
respect to all or any part of the Trust Estate,  the Trust  Indenture  Estate or
the Aircraft,  (b) will, at its own cost and expense,  promptly take such action
as may be necessary to discharge any Lessor Lien  attributable to First Security
or Owner  Trustee on all or any part of the Trust  Estate,  the Trust  Indenture
Estate or the  Aircraft and (c) will  personally  hold  harmless  and  indemnify
Lessee, Owner Participant, each Note Holder, Mortgagee, each of their respective

<PAGE>

Affiliates,  successors  and permitted  assigns,  the Trust Estate and the Trust
Indenture  Estate from and against (i) any and all Expenses,  (ii) any reduction
in the amount payable out of the Trust Estate or the Trust Indenture  Estate and
(iii) any interference with the possession, operation or other use of all or any
part of the  Aircraft  imposed on,  incurred  by or asserted  against any of the
foregoing as a consequence of any such Lessor Lien.

               7.3.2       OTHER BUSINESS

      Owner Trustee will not enter into any business or other activity except as
contemplated by the Operative Agreements.

               7.3.3       NOTICE OF CHANGE OF CHIEF EXECUTIVE OFFICE

      First Security, in its individual capacity and as Owner Trustee, will give
Lessee,  each  Participant  and Mortgagee 30 days' prior  written  notice of any
relocation of its chief  executive  office (as such term is defined in Article 9
of the UCC) from its then  present  location and will  promptly  take any action
required by Section 7.3.8 as a result of such relocation.

               7.3.4       SECURITIES ACT

      First Security,  in its individual capacity and as Owner Trustee, will not
directly or indirectly offer any beneficial interest or Security relating to the
ownership  of the  Aircraft or any  interest  in the Trust  Estate or any of the
Equipment  Notes or any other interest in or security under the Trust  Indenture
for sale to, or solicit any offer to acquire any such interest or security from,
or sell any such  interest  or  security  to,  any  Person in  violation  of the
Securities Act or applicable state or foreign securities Laws, provided that the
foregoing  shall not be deemed to  impose on First  Security  in its  individual
capacity or as Owner Trustee, any responsibility with respect to any such offer,
sale or solicitation by any other party hereto.

               7.3.5       PERFORMANCE OF AGREEMENTS

      Owner  Trustee  shall  perform  its  obligations  under the Owner  Trustee
Agreements in accordance with the terms thereof.

               7.3.6       RELEASE OF LIEN OF TRUST INDENTURE

      Owner  Trustee,  in each  instance  referred  to in the  Lease  in which a
transfer of any  property  is required to be made by Owner  Trustee to Lessee or
any other Person (other than Mortgagee or Owner Participant), shall, at Lessee's

<PAGE>

request and expense,  use its  reasonable  efforts to procure from Mortgagee the
prompt release of the Lien of the Trust Indenture with respect to such property.

               7.3.7       NOTICES; DOCUMENTS

      In the event any claim with respect to any  liabilities  is filed  against
the Owner  Trustee in its capacity as such and Owner  Trustee  shall have Actual
Knowledge  thereof,  the Owner Trustee shall  promptly  notify Lessee in writing
thereof.  Owner  Trustee  further  agrees  to  provide  to Lessee  promptly  any
documents (including the certificate of aircraft  registration) that it receives
from the FAA with respect to the Aircraft.

               7.3.8       FILINGS

      After the Delivery  Date,  Owner Trustee shall duly execute and deliver to
Lessee all filings and recordings  (including,  without limitation,  all filings
and UCC financing statements under the Act and the UCC and any amendments to UCC
financing  statements  necessitated  by any  relocation  of its chief  executive
office),  prepared  and  delivered  to it by Lessee  required  to perfect  Owner
Trustee's title to the Aircraft and the liens of and security  interests granted
by the Trust Indenture (or to maintain such  perfection) and to make such title,
liens and security interests valid and enforceable.

               7.3.9       TRUST AGREEMENT

      Each of First  Security and Owner  Trustee  hereby (i) agrees with Lessee,
Loan Participants and Mortgagee not to amend, supplement, terminate or otherwise
modify any  provision  of the Trust  Agreement  in such a manner as to adversely
affect the rights of any such party  without the prior  written  consent of such
party and (ii) agrees with Lessee,  Loan Participant and Mortgagee not to revoke
the trust created by the Trust Agreement so long as the Trust Indenture  remains
undischarged or if such  revocation  would have an adverse effect on the Lessee.
Nothing  contained  in this  Agreement  shall  impair any right  under the Trust
Agreement of First  Security to resign as Owner Trustee in  accordance  with the
provisions of the Trust Agreement.

      7.4        COVENANTS OF WTC

      WTC in its  individual  capacity or as  Mortgagee,  each  Applicable  Pass
Through Trustee or Subordination Agent, as the case may be, covenants and agrees
with Lessee, Owner Participant and Owner Trustee as follows:

<PAGE>

               7.4.1       LIENS

      WTC (a) will not directly or indirectly create, incur, assume or suffer to
exist any Lessor Lien  attributable  to it on or with respect to all or any part
of the Trust Estate,  the Trust Indenture  Estate or the Aircraft,  (b) will, at
its own cost and  expense,  promptly  take such  action as may be  necessary  to
discharge  any Lessor Lien  attributable  to WTC on all or any part of the Trust
Estate,  the Trust Indenture Estate or the Aircraft and (c) will personally hold
harmless and  indemnify  Lessee,  Owner  Participant,  each Note  Holder,  Owner
Trustee, each of their respective Affiliates,  successors and permitted assigns,
the Trust Estate and the Trust Indenture Estate from and against (i) any and all
Expenses,  (ii) any  reduction in the amount  payable out of the Trust Estate or
the Trust  Indenture  Estate  and (iii) any  interference  with the  possession,
operation or other use of all or any part of the Aircraft,  imposed on, incurred
by or asserted  against any of the foregoing as a consequence of any such Lessor
Lien.

               7.4.2       SECURITIES ACT

      WTC in its individual capacity or as Mortgagee, an Applicable Pass Through
Trustee  or  Subordination  Agent,  will not offer any  beneficial  interest  or
Security  relating to the ownership of the Aircraft or any interest in the Trust
Indenture  Estate,  or any of the  Equipment  Notes or any other  interest in or
security under the Trust  Indenture for sale to, or solicit any offer to acquire
any such  interest or security  from,  or sell any such interest or security to,
any Person in violation of the  Securities  Act or  applicable  state or foreign
securities  Laws,  provided that the foregoing  shall not be deemed to impose on
WTC any  responsibility  with respect to any such offer, sale or solicitation by
any other party hereto.

               7.4.3       PERFORMANCE OF AGREEMENTS

      WTC, in its  individual  capacity and as  Mortgagee,  an  Applicable  Pass
Through  Trustee or  Subordination  Agent, as the case may be, shall perform its
obligations under the Indenture Agreements,  the Pass Through Trustee Agreements
and the Subordination Agent Agreements in accordance with the terms thereof.

               7.4.4       WITHHOLDING TAXES

      WTC shall  indemnify  (on an after-tax  basis) and hold  harmless  Lessee,
Lessor and Owner  Participant  against any United States  withholding taxes (and
related interest,  penalties and additions to tax) as a result of the failure by

<PAGE>

WTC to withhold  on  payments  to any Note Holder if such Note Holder  failed to
provide to Mortgagee  necessary  certificates or forms to substantiate the right
to exemption from such withholding tax.

      7.5        COVENANTS OF NOTE HOLDERS

      Each  Note  Holder  (including  Subordination  Agent)  as to  itself  only
covenants and agrees with Lessee, Owner Participant, Owner Trustee and Mortgagee
as follows:

               7.5.1       WITHHOLDING TAXES

      Such Note Holder (if it is a Non-U.S.  Person)  agrees to indemnify (on an
after-tax  basis)  and hold  harmless  Lessee,  Lessor,  Owner  Participant  and
Mortgagee  against any United States  withholding  taxes (and related  interest,
penalties and  additions to tax) as a result of the  inaccuracy or invalidity of
any  certificate or form provided by such Note Holder to Mortgagee in connection
with such withholding  taxes. Any amount payable  hereunder shall be paid within
30 days after receipt by a Note Holder of a written demand therefor.

               7.5.2       TRANSFER; COMPLIANCE

      (a)   Such  Note  Holder  will  (i) not  transfer  any  Equipment  Note or
interest  therein in  violation of the  Securities  Act or  applicable  state or
foreign securities Law; PROVIDED,  that the foregoing provisions of this section
shall  not be deemed to impose  on such  Note  Holder  any  responsibility  with
respect to any such offer,  sale or solicitation by any other party hereto,  and
(ii) perform and comply with the obligations specified to be imposed on it (as a
Note Holder) under each of the Trust  Indenture  and the form of Equipment  Note
set forth in the Trust Indenture.

      (b)   Except  for the transfer of the  interests of each  Applicable  Pass
Through  Trustee in the Equipment  Notes to the trustee of the Related Trust (as
defined in each Applicable Pass Through Trust  Agreement) in accordance with the
related Applicable Pass Through Trust Agreement and except as otherwise required
by the terms of Section 2.13 of the Trust  Indenture or Section 11 hereof,  each
Note Holder will not sell,  assign,  convey,  exchange or otherwise transfer any
Equipment  Note or any interest in, or  represented  by, any Equipment  Note (it
being  understood  that this  provision  is not  applicable  to the Pass Through
Certificates)  unless the proposed  transferee thereof first provides Lessee and
Owner Participant with both of the following:

<PAGE>

            (i) a written representation and covenant that either (a) no portion
      of the funds it uses to purchase,  acquire and hold such Equipment Note or
      interest  directly or indirectly  constitutes,  or may be deemed under the
      Code or ERISA or any rulings, regulations or court decisions thereunder to
      constitute,  the assets of any Plan or (b) the  transfer,  and  subsequent
      holding, of such Equipment Note or interest shall not involve or give rise
      to a  transaction  that  constitutes a prohibited  transaction  within the
      meaning  of  Section  406 of  ERISA  or  Section  4975(c)(1)  of the  Code
      involving  Lessee,   Owner  Participant,   a  Pass  Through  Trustee,  the
      Subordination  Agent or the proposed  transferee (other than a transaction
      that is exempted  from the  prohibitions  of such  sections by  applicable
      provisions  of  ERISA  or  the  Code  or   administrative   exemptions  or
      regulations issued thereunder); and

            (ii) a written covenant that it will not transfer any Equipment Note
      or any  interest  in, or  represented  by, any  Equipment  Note unless the
      subsequent  transferee also makes the  representation  described in clause
      (i) above and agrees to comply with this clause (ii).

      7.6        AGREEMENTS

               7.6.1       OWNER TRUSTEE IS OWNER FOR ALL PURPOSES

      Lessee,  the  Owner  Participant  and  Owner  Trustee  agree  that for all
purposes,  after the  Closing,  Owner  Trustee will be the owner of the Aircraft
(except that Owner  Participant  will be the owner for income tax  purposes) and
Lessee  will  be  the  lessee  thereof.  No  transfer,  by  operation  of Law or
otherwise,  of the beneficial  interest of Owner Participant in and to the Trust
Estate shall operate to transfer  legal title to any part of the Trust Estate to
any transferee thereof.

               7.6.2       COMMENCEMENT OF BANKRUPTCY PROCEEDINGS

      Lessee, each Participant, each Note Holder, First Security, Owner Trustee,
WTC and  Mortgagee  agree for the benefit of each of the others that it will not
commence or join in any proceeding  under the Bankruptcy Code to commence a case
under  Section 303 of the  Bankruptcy  Code  against the Trust  Estate.  Nothing
contained herein shall be deemed to preclude any  Participant,  any Note Holder,
First  Security,  Owner Trustee,  WTC or Mortgagee from filing any claim against
the Trust Estate in any case commenced against the Trust Estate.

<PAGE>

               7.6.3       CERTAIN BANKRUPTCY MATTERS

      If (a) all or any part of the Trust  Estate  becomes the  property  of, or
Owner  Trustee  or  Owner   Participant   becomes,   a  debtor  subject  to  the
reorganization   provisions  of  the  Bankruptcy  Code,  (b)  pursuant  to  such
reorganization  provisions,  including  Section 1111(b) of the Bankruptcy  Code,
First Security or Owner Participant is required,  by reason of First Security or
Owner  Participant  being held to have recourse  liability to any Note Holder or
Mortgagee  directly or  indirectly  (other than the recourse  liability of First
Security or Owner  Participant  under this Agreement,  the Trust Indenture or by
separate  agreement),  to make  payment  on  account  of any  amount  payable as
principal, Make-Whole Amount, if any, interest or other amounts on the Equipment
Notes, and (c) any Note Holder or Mortgagee actually receives any Excess Amount,
as  defined  below,  which  reflects  any  payment  by First  Security  or Owner
Participant on account of (b) above, then such Note Holder or Mortgagee,  as the
case may be,  shall  promptly  refund  to First  Security  or Owner  Participant
(whichever shall have made such payment) such Excess Amount.

      For purposes of this Section  7.6.3,  "Excess  Amount" means the amount by
which such  payment  exceeds the amount that would have been  received by a Note
Holder or  Mortgagee  if First  Security  or Owner  Participant  had not  become
subject to the  recourse  liability  referred  to in clause  (b) above.  Nothing
contained in this Section  7.6.3 shall  prevent a Note Holder or Mortgagee  from
enforcing any personal recourse  obligation (and retaining the proceeds thereof)
of First  Security  or Owner  Participant  under this  Agreement  (other than as
referred  to in clause (b) above) or the Trust  Indenture  (and any  exhibits or
annexes  thereto) or from retaining any amount paid by Owner  Participant  under
Sections 2.13 or 4.03 of the Trust Indenture.

               7.6.4       QUIET ENJOYMENT; SALE BY OWNER TRUSTEE BINDING

      (a)   Owner   Participant,   each   Applicable   Pass   Through   Trustee,
Subordination  Agent, each Note Holder, Owner Trustee and Mortgagee agrees as to
itself  with  Lessee  that,  so long as no Lease  Event of  Default  shall  have
occurred  and be  continuing,  such  Person  shall not (and shall not permit any
Affiliate or other Person  claiming by,  through or under it to) interfere  with
Lessee's rights in accordance with the Lease to the quiet enjoyment,  possession
and use of the Aircraft during the Term.

      (b)   Any  assignment,  sale, transfer or other conveyance of the Aircraft
by Owner Trustee made pursuant to the terms of this Agreement or the Lease shall
bind Owner  Participant  and shall be effective to transfer or convey all right,

<PAGE>

title  and  interest  of  Owner  Trustee  and  Owner  Participant  in and to the
Aircraft.  No purchaser or other  grantee shall be required to inquire as to the
authorization,  necessity,  expediency or regularity of such  assignment,  sale,
transfer or conveyance,  or as to the  application of any sale or other proceeds
with respect thereto by Owner Trustee, as regards Owner Participant.

               7.6.5       RELEASE OF LIEN OF TRUST INDENTURE

      Each of Lessee, Lessor and Mortgagee agrees that in each instance referred
to in the Lease in which a transfer  of any  property  is required to be made by
Lessor to Lessee or any other Person (other than  Mortgagee),  Mortgagee  shall,
upon request of Lessor and  compliance  with the  applicable  provisions  of the
Lease and the Trust  Indenture,  including  payment of all amounts  then due and
payable to each Liquidity  Provider as Supplemental  Rent,  promptly execute (at
Lessee's cost and expense) such  instruments  as Lessor or Lessee may reasonably
request to evidence the release of the Lien of the Trust  Indenture with respect
to such property.

               7.6.6       NON-RECOURSE

      Loan Participant and Mortgagee agree that (a) obligations of Owner Trustee
under the Trust Indenture or any other  Operative  Agreement and with respect to
the Equipment  Notes shall be  non-recourse  to Owner  Participant  and to First
Security and (b) they will look solely to the income and proceeds from the Trust
Estate and the Trust Indenture  Estate to the extent  available for distribution
to Note Holder or Mortgagee as provided in the Trust  Indenture and that neither
Owner  Participant  nor  First  Security  will  be  personally  liable  to  Loan
Participant  or Mortgagee  for any amounts  payable by Owner  Trustee  under the
Trust Indenture or any other Operative Agreement;  PROVIDED,  HOWEVER,  that the
foregoing  is not  intended  nor shall it be  construed  to limit  any  recourse
liability  of Owner  Participant  or First  Security  to the  extent  that  such
liability is expressly  set forth in this  Agreement or in any of the  Operative
Agreements or arises by reason of the breach of any  representation  or warranty
or  covenant  given  by such  Person  (in the  case of  First  Security,  in its
individual capacity).

               7.6.7       OTHER DOCUMENTS; AMENDMENT

      (a)   Each  of the Owner  Participant  and the Owner  Trustee  hereby  (A)
agrees  with  Lessee,  the Loan  Participants  and the  Mortgagee  not to amend,
supplement or otherwise  modify any provision of the Trust Agreement in a manner
that could adversely affect such party without the prior written consent of such
party.  Notwithstanding  the  foregoing,  so long  as the  Lease  has  not  been

<PAGE>

terminated  or expired,  each  Participant,  the Mortgagee and the Owner Trustee
hereby  agree for the benefit of Lessee that  without the consent of Lessee they
will not amend,  supplement or otherwise  modify (i) Article III,  Article IX or
Section  2.05 of the  Trust  Indenture,  (ii)  any  provision  of any  Operative
Agreement that will affect the stated principal amount of or premium or interest
on the Equipment  Notes or (iii) any other  provision of the Trust  Indenture or
Equipment  Notes in a manner that could adversely  affect Lessee.  Mortgagee and
Owner  Trustee  agree to promptly  furnish to Lessee  copies of any  supplement,
amendment,  waiver or modification  of any of the Operative  Agreements to which
Lessee is not a party.  Each Loan  Participant  agrees that it will not take any
action in respect of the Trust  Indenture  Estate  except  through the Mortgagee
pursuant to the Trust Indenture or as otherwise permitted by Trust Indenture.

      (b)   Owner  Trustee  agrees to join with Lessee to the extent that action
on its part is necessary or  appropriate  (i) to cause the  following to be duly
accomplished in accordance with applicable United States federal Law by the time
the  Aircraft  is  delivered  under  this  Agreement  and  the  Lease:  (A)  the
application  for  registration  of the Aircraft in the name of Owner Trustee and
(B) all  related  action  necessary  in order for  Lessee to have  temporary  or
permanent  authority  to operate the Aircraft as  contemplated  by the Lease and
(ii) forthwith upon delivery of the Aircraft under this Agreement and the Lease,
to cause all  necessary  documents to be duly filed for  recording in accordance
with applicable United States federal Law.

               7.6.8       CONSENTS

      Each  Participant,  each  Applicable Pass Through  Trustee,  Subordination
Agent,  Owner  Trustee and Mortgagee  covenants  and agrees,  for the benefit of
Lessee,  that it shall not  unreasonably  withhold its consent to any consent or
approval requested of it or of Owner Trustee or Mortgagee under the terms of any
of the  Operative  Agreements  which  by  its  terms  is not to be  unreasonably
withheld.

               7.6.9       INSURANCE

      Each of Owner  Participant,  the Pass Through Trustees,  the Subordination
Agent and the Owner Trustee  agrees not to obtain or maintain  insurance for its
own account as permitted by Section  11.2 of the Lease if such  insurance  would
limit or otherwise adversely affect the coverage of any insurance required to be
obtained  or  maintained  by Lessee  pursuant  to  Section 11 and Annex D of the
Lease.

<PAGE>

               7.6.10      EXTENT OF INTEREST OF NOTE HOLDERS

      A Note Holder shall not, as such,  have any further  interest in, or other
right with respect to, the Trust Estate or the Trust  Indenture  Estate when and
if the principal and Make-Whole Amount, if any, of and interest on the Equipment
Note held by such Note Holder,  and all other sums, then due and payable to such
Note Holder hereunder and under any other Operative  Agreement,  shall have been
paid in full.

               7.6.11      FOREIGN REGISTRATION

      Each  Participant,  Owner  Trustee and  Mortgagee  hereby  agree,  for the
benefit of Lessee but subject to the provisions of Section 7.1.2 of the Lease:

      (a)   that  Lessee shall be entitled to register the Aircraft or cause the
Aircraft to be registered  in a country other than the United States  subject to
compliance with the following:

            (i)   each of the following requirements is satisfied:

            (A)   such  registration  shall be made only after the Tax Attribute
                  Period,  unless  Lessee  prepays  on  a  lump  sum  basis  any
                  liability due under the Tax Indemnity Agreement as a result of
                  such   registration   based  upon  the  assumption  that  such
                  registration  would  continue for the remainder of the term of
                  the Permitted Sublease described in clause (C) below;

            (B)   no  Lease  Event  of  Default   shall  have  occurred  and  be
                  continuing at the time of such registration;

            (C)   such  proposed  change of  registration  is made in connection
                  with a Permitted Sublease to a Permitted Air Carrier;

            (D)   such  country is a country  with which the United  States then
                  maintains  normal  diplomatic  relations  or, if  Taiwan,  the
                  United States then maintains  diplomatic relations at least as
                  good as those in effect on the Delivery Date;

            (ii) the Owner Trustee and Mortgagee  shall have received an opinion
      of counsel (subject to customary  exceptions)  reasonably  satisfactory to
      the Owner Participant addressed to each such party as to the effect that:

                  (A) such country would recognize the Owner Trustee's ownership
            interest in the Aircraft;

<PAGE>

                  (B) the obligations of Lessee,  and the rights and remedies of
            Owner Trustee,  under the Lease are valid,  binding and  enforceable
            under the laws of such jurisdiction (or the laws of the jurisdiction
            to which the laws of such jurisdiction would refer as the applicable
            governing law);

                  (C) after giving  effect to such change in  registration,  the
            Lien of the Trust Indenture on the Owner Trustee's right,  title and
            interest in and to the  Aircraft  and the Lease shall  continue as a
            valid and duly perfected  first priority  security  interest and all
            filing,  recording  or other  action  necessary  to protect the same
            shall have been accomplished (or, if such opinion cannot be given at
            the time of such proposed change in registration because such change
            in registration  is not yet effective,  (1) the opinion shall detail
            what filing,  recording  or other  action is  necessary  and (2) the
            Owner  Trustee and the  Mortgagee  shall have received a certificate
            from  Lessee  that all  possible  preparations  to  accomplish  such
            filing,  recording  and other action shall have been done,  and such
            filing,  recording  and other  action  shall be  accomplished  and a
            supplemental  opinion to that effect shall be delivered to the Owner
            Trustee and the Mortgagee on or prior to the effective  date of such
            change in registration;

                  (D) it is not  necessary,  solely  as a  consequence  of  such
            change  in  registration  and  without  giving  effect  to any other
            activity  of  the  Owner  Trustee,  the  Owner  Participant  or  the
            Mortgagee  (or any Affiliate  thereof),  as the case may be, for the
            Owner Trustee,  the Owner Participant or the Mortgagee to qualify to
            do business in such jurisdiction as a result of such  reregistration
            in order to  exercise  any rights or  remedies  with  respect to the
            Aircraft pursuant to the Lease;

                  (E)  there is no tort  liability  of the owner or lessor of an
            aircraft  not  in   possession   thereof  under  the  laws  of  such
            jurisdiction (it being agreed that, in the event such latter opinion
            cannot be given in a form  satisfactory  to the  Owner  Participant,
            such opinion shall be waived if insurance reasonably satisfactory to
            the Owner Participant is provided to cover such risk); and

                  (F)  unless  Lessee  shall have  agreed to  provide  insurance
            covering  the  risk of  requisition  of use of the  Aircraft  by the

<PAGE>

            government  of such country (so long as the  Aircraft is  registered
            under the laws of such  country),  the laws of such country  require
            fair  compensation  by the  government  of such  country  payable in
            currency freely  convertible  into Dollars and freely removable from
            such country (without license or permit, unless Lessee prior to such
            proposed reregistration has obtained such license or permit) for the
            taking or requisition by such government of such use;

      (b)   In addition,  as a condition precedent to any change in registration
Lessee  shall  have  given  to  Lessor  and  Mortgagee   assurances   reasonably
satisfactory to each of them:

            (i)   to the effect that the  provisions  of Section 11 of the Lease
                  have been  complied with after giving effect to such change of
                  registration;

            (ii)  of the  payment  by  Lessee  of all  reasonable  out-of-pocket
                  expenses  of  Lessor,   each   Participant  and  Mortgagee  in
                  connection  with such change of registry,  including,  without
                  limitation  (1)  the  reasonable  fees  and  disbursements  of
                  counsel to Lessee,  Lessor  and  Mortgagee,  (2) any filing or
                  recording  fees,  Taxes  or  similar   payments   incurred  in
                  connection with the change of registration of the Aircraft and
                  the creation and perfection of the security  interest  therein
                  in favor of Mortgagee for the benefit of Note Holders, and (3)
                  all costs and expenses incurred in connection with any filings
                  necessary to continue in the United  States the  perfection of
                  the  security  interest in the Aircraft and the Lease in favor
                  of Mortgagee for the benefit of Note Holders; and

            (iii) to the effect that the tax and other  indemnities  in favor of
                  each person named as an indemnitee  under any other  Operative
                  Agreement  afford  each  such  person  substantially  the same
                  protection  as provided  prior to such change of  registration
                  (or Lessee shall have agreed upon additional indemnities that,
                  together with such  original  indemnities,  in the  reasonable
                  judgment of Lessor and Mortgagee, afford such protection).

               7.6.12      OTHER COMMERCIAL RELATIONS UNAFFECTED

      Notwithstanding  anything  to the  contrary  set  forth  in any  Operative
Agreement:

<PAGE>

      (a)   Except as set forth in the Purchase  Agreement  Assignment,  nothing
contained in the  Operative  Agreements  shall  constitute  or be deemed to be a
waiver by Lessee of any rights,  remedies or claims it may have against Airframe
Manufacturer or Engine  Manufacturer or any subcontractor or supplier of either;
and the  Operative  Agreements  do not and shall not be  construed  or deemed to
create any  rights,  waivers,  immunities  or  indemnities  in favor of Airframe
Manufacturer,  Engine  Manufacturer or any  subcontractor  or supplier of either
with respect to any such rights, remedies or claims of Lessee; and

      (b)   None of Airframe Manufacturer,  by its execution and delivery of the
Consent and Agreement, and Engine Manufacturer, by its execution and delivery of
the Engine  Consent  and  Agreement,  shall be deemed to have waived any rights,
remedies or claims which Airframe  Manufacturer or Engine  Manufacturer  (or any
subcontractor  or  supplier  of  either),  as the case may be, may have  against
Lessee; and the Operative Agreements do not and shall not be construed or deemed
to create any rights, waivers, immunities or indemnities in favor of Lessee with
respect to any such  rights,  remedies  or claims of  Airframe  Manufacturer  or
Engine Manufacturer (or any subcontractor or supplier of either).

               7.6.13      INTEREST IN CERTAIN ENGINES

      Each Participant,  Owner Trustee,  and Mortgagee agree, for the benefit of
each of the  lessor,  conditional  seller,  mortgagee  or  secured  party of any
airframe or engine leased to, or purchased by, Lessee or any Permitted Sublessee
subject  to a  lease,  conditional  sale,  trust  indenture  or  other  security
agreement that it will not acquire or claim, as against such lessor, conditional
seller,  mortgagee or secured party, any right,  title or interest in any engine
as the result of such engine  being  installed on the Airframe at any time while
such engine is subject to such lease, conditional sale, trust indenture or other
security  agreement and owned by such lessor or conditional seller or subject to
a trust  indenture  or security  interest in favor of such  mortgagee or secured
party.

SECTION 8.       CONFIDENTIALITY

      Lessee, Owner Participant, Note Holders, Owner Trustee and Mortgagee shall
keep  Annexes  B,  C and D and  Schedules  1,  2,  3  and 4 to  the  Lease,  the
Participation Agreement, the Purchase Agreement Assignment and the Tax Indemnity
Agreement  confidential  and shall not disclose,  or cause to be disclosed,  the
same to any Person,  except (A) to  prospective  and  permitted  transferees  of
Lessee's,  Owner Participant's,  a Note Holder's,  Liquidity  Provider's,  Owner
Trustee's,  Mortgagee's  or  other  Indenture  Indemnitee's  interest  or  their

<PAGE>

respective counsel or special counsel,  independent insurance brokers, auditors,
or  other  agents  who  agree  to hold  such  information  confidential,  (B) to
Lessee's,  Owner Participant's,  a Note Holder's,  Liquidity Provider's,  a Pass
Through Trustee's, Owner Trustee's,  Mortgagee's or other Indenture Indemnitee's
counsel or special counsel,  independent  insurance brokers,  auditors, or other
agents, Affiliates or investors who agree to hold such information confidential,
(C) as may be required by any statute,  court or administrative order or decree,
legal  process or  governmental  ruling or  regulation,  including  those of any
applicable  insurance  regulatory bodies  (including,  without  limitation,  the
National  Association  of  Insurance  Commissioners),  federal or state  banking
examiners,  Internal  Revenue Service  auditors or any stock exchange,  (D) with
respect to Lessee and Owner  Participant,  by mutual  agreement of such parties,
(E) with respect to a Note Holder or any Pass Through  Trustee,  to a nationally
recognized  rating agency for the purpose of obtaining a rating on the Equipment
Notes or the Pass Through  Trust  Certificates  or to support an NAIC rating for
the Equipment Notes or (F) such other Persons as are reasonably deemed necessary
by the  disclosing  party in order to protect the interests of such party or for
the purposes of enforcing such documents by such party;  PROVIDED,  that any and
all  disclosures  permitted by clauses (C),  (D), (E) or (F) above shall be made
only to the extent  necessary to meet the specific  requirements or needs of the
Persons making such disclosures.

SECTION 9.       INDEMNIFICATION AND EXPENSES

      9.1        GENERAL INDEMNITY

               9.1.1       INDEMNITY

      Whether  or  not  any  of  the   transactions   contemplated   hereby  are
consummated,  Lessee shall  indemnify,  protect,  defend and hold  harmless each
Indemnitee  from,  against and in respect  of, and shall pay on a net  after-tax
basis, any and all Expenses of any kind or nature whatsoever that may be imposed
on, incurred by or asserted against any Indemnitee, relating to, resulting from,
or arising out of or in connection with, any one or more of the following:

      (a)  The  Operative  Agreements,  the  Pass  Through  Agreements,  or  the
enforcement  of any of the terms of any of the Operative  Agreements or the Pass
Through Agreements;

      (b)   The  Aircraft,  the  Airframe,  any  Engine or any Part,  including,
without limitation, with respect thereto, (i) the manufacture, design, purchase,
acceptance, nonacceptance or rejection, ownership, registration, reregistration,
deregistration,  delivery, nondelivery, lease, sublease, assignment, possession,

<PAGE>

use or non-use, operation,  maintenance,  testing, repair, overhaul,  condition,
alteration,   modification,   addition,  improvement,   storage,  airworthiness,
replacement,  repair, sale,  substitution,  return,  abandonment,  redelivery or
other  disposition  of the Aircraft,  any Engine or any Part,  (ii) any claim or
penalty arising out of violations of applicable Laws by Lessee (or any Permitted
Sublessee),  (iii) tort liability,  whether or not arising out of the negligence
of any Indemnitee (whether active,  passive or imputed),  (iv) death or property
damage of passengers,  shippers or others, (v) environmental  control,  noise or
pollution and (vi) any Liens in respect of the Aircraft, any Engine or any Part;

      (c)  The offer, sale,  or delivery of any  Equipment  Notes,  Pass Through
Certificates or any interest therein or represented thereby; and

      (d)   Any  breach  of or  failure  to  perform  or  observe,  or any other
noncompliance  with,  any  covenant  or  agreement  or  other  obligation  to be
performed  by Lessee  under any Lessee  Operative  Agreement or any Pass Through
Agreement  or the  falsity of any  representation  or  warranty of Lessee in any
Lessee Operative  Agreement or any Pass Through  Agreement other than in the Tax
Indemnity Agreement.

               9.1.2       EXCEPTIONS

      Notwithstanding  anything contained in Section 9.1.1,  Lessee shall not be
required to indemnify, protect, defend and hold harmless any Indemnitee pursuant
to Section 9.1.1 in respect of any Expense of such Indemnitee:

      (a)   For  any Taxes or a loss of Tax  benefit,  whether  or not Lessee is
required to  indemnify  therefor  pursuant  to Section 9.3 or the Tax  Indemnity
Agreement;

      (b)   Except to the extent  attributable to acts or events occurring prior
thereto, acts or events (other than acts or events related to the performance by
Lessee  of its  obligations  pursuant  to the  terms  of  the  Lessee  Operative
Agreements)  that occur after the earliest of: (i) with respect to the Airframe,
any Engine or any Part, the return of possession (it being  understood  that the
date of the placement of the Aircraft in storage as provided in Section 5 of the
Lease  constitutes  the date of return of the Aircraft  under the Lease) of such
Airframe,  Engine or Part  pursuant to the terms of and in  compliance  with the
Lease  (other  than  pursuant  to Section  15  thereof,  in which case  Lessee's
liability  under this  Section 9.1 shall  survive for so long as Lessor shall be

<PAGE>

entitled to exercise  remedies under such Section 15) or (ii) the termination of
the Term in accordance with the Lease;

      (c)   To  the  extent   attributable   to  any  Transfer   (voluntary   or
involuntary)  by or on  behalf  of  such  Indemnitee  of any  Equipment  Note or
interest therein,  except (i) for out-of-pocket costs and expenses incurred as a
result of any such  Transfer  pursuant to the  exercise  of  remedies  under any
Operative  Agreement  resulting  from a  Lease  Event  of  Default  and  (ii) as
otherwise  required  by the  terms of  Section  2.13 of the Trust  Indenture  or
Section 11 hereof;

      (d)   To  the  extent   attributable   to  any  Transfer   (voluntary   or
involuntary)  by or on  behalf  of  Owner  Participant  of any  interest  in the
Aircraft,  or the Trust  Estate  except  for  out-of-pocket  costs and  expenses
incurred as a result of any such  Transfer in  connection  with the  exercise of
remedies attributable to the occurrence of an Indenture Event of Default that is
a Lease Event of Default;

      (e)   To  the  extent  attributable  to the gross  negligence  or  willful
misconduct  of such  Indemnitee  or any related  Indemnitee  (as defined  below)
(other than gross  negligence  or willful  misconduct  imputed to such person by
reason of its interest in the Aircraft or any Operative Agreement);

      (f)  In the case of First Security,  to the extent attributable to matters
enumerated in the proviso to Section 14;

      (g)   To the extent  attributable  to the  incorrectness  or breach of any
representation  or  warranty  of  such  Indemnitee  or  any  related  Indemnitee
contained  in or made  pursuant to any  Operative  Agreement or any Pass Through
Agreement;

      (h)   To the extent  attributable to the failure by such Indemnitee or any
related Indemnitee to perform or observe any agreement, covenant or condition on
its part to be  performed  or observed in any  Operative  Agreement  or any Pass
Through Agreement;

      (i)   To the extent  attributable  to the offer or sale by such Indemnitee
or any related Indemnitee of any interest in the Aircraft,  the Equipment Notes,
the Pass Through Trust Certificates,  the Trust Estate or the Trust Agreement or
any similar  interest,  in violation of the Securities  Act or other  applicable
federal,  state or foreign securities Laws (other than any thereof caused by the
acts or omissions of Lessee);

      (j)   (i) With respect to any Indemnitee  (other than  Mortgagee),  to the
extent attributable to the failure of the Mortgagee to distribute funds received

<PAGE>

and  distributable  by it in  accordance  with the  Trust  Indenture,  (ii) with
respect  to any  Indemnitee  (other  than  the  Owner  Trustee),  to the  extent
attributable  to the failure of the Owner Trustee to distribute  funds  received
and  distributable  by it in  accordance  with the Trust  Agreement,  (iii) with
respect to any Indemnitee  (other than the  Subordination  Agent), to the extent
attributable  to the  failure of the  Subordination  Agent to  distribute  funds
received and distributable by it in accordance with the Intercreditor Agreement,
(iv) with respect to any Indemnitee (other than the Pass Through  Trustees),  to
the extent  attributable  to the failure of a Pass Through Trustee to distribute
funds received and distributable by it in accordance with the Pass Through Trust
Agreements, (v) with respect to any Indemnitee (other than the Escrow Agent), to
the extent attributable to the failure of the Escrow Agent to pay funds received
and payable by it in accordance with any Escrow Agreement,  (vi) with respect to
any Indemnitee (other than the Paying Agent), to the extent  attributable to the
failure of the Paying Agent to distribute funds received and distributable by it
in accordance with any Escrow Agreement, (vii) to the extent attributable to the
failure of the  Depositary  to pay funds  payable by it in  accordance  with any
Deposit Agreement,  (viii) with respect to Mortgagee, to the extent attributable
to the  negligence  or willful  misconduct of Mortgagee in the  distribution  of
funds received and  distributable  by it in accordance with the Trust Indenture,
(ix) with respect to Owner Trustee, to the extent attributable to the negligence
or willful misconduct of Owner Trustee in the distribution of funds received and
distributable by it in accordance with the Trust Agreement,  (x) with respect to
the Subordination Agent, to the extent attributable to the negligence or willful
misconduct of the Subordination  Agent in the distribution of funds received and
distributable by it in accordance with the  Intercreditor  Agreement,  (xi) with
respect  to the  Pass  Through  Trustees,  to  the  extent  attributable  to the
negligence or willful  misconduct of a Pass Through Trustee in the  distribution
of funds received and  distributable  by it in accordance  with the Pass Through
Trust  Agreements,  (xii)  with  respect  to the  Escrow  Agent,  to the  extent
attributable to the negligence or willful  misconduct of the Escrow Agent in the
payment  of funds  received  and  payable  by it in  accordance  with any Escrow
Agreement,  and  (xiii)  with  respect  to  the  Paying  Agent,  to  the  extent
attributable to the negligence or willful  misconduct of the Paying Agent in the
distribution  of funds received and  distributable  by it in accordance with any
Escrow Agreement.

      (k)   Other than during the  continuation of a Lease Event of Default,  to
the extent  attributable  to the  authorization  or giving or withholding of any
future  amendments,  supplements,  waivers  or  consents  with  respect  to  any
Operative  Agreement  or Pass  Through  Agreement  other  than such as have been

<PAGE>

requested by Lessee or as are  required by or made  pursuant to the terms of the
Operative Agreements or Pass Through Agreements (unless such requirement results
from the  actions of an  Indemnitee  not  required  by or made  pursuant  to the
Operative Agreements or the Pass Through Agreements);

      (l)   To  the  extent  attributable  to any  amount  which any  Indemnitee
expressly agrees to pay or such Indemnitee expressly agrees shall not be paid by
or be reimbursed by Lessee;

      (m)   To the extent that it is an ordinary and usual operating or
overhead expense;

      (n)   With  respect to the Owner Participant or the Owner Trustee,  or any
related  Indemnitee,  to the extent  attributable to the  deregistration  of the
Aircraft under the Act as a result of Owner Participant's or Owner Trustee's (or
any related  Indemnitee of either) not being a Citizen of the United States as a
result of any act (other than reregistration of the Aircraft pursuant to Section
7.1.2 of the  Lease)  of Owner  Participant  or Owner  Trustee,  or any  related
Indemnitee of either of the foregoing (not taken at the request of the Lessee);

      (o)   For any Lessor Lien attributable to such  Indemnitee  or any related
Indemnitee;

      (p)   If  another  provision of an  Operative  Agreement or a Pass Through
Agreement  specifies the extent of Lessee's  responsibility  or obligation  with
respect to such Expense, to the extent arising from other than failure of Lessee
to comply with such specified responsibility or obligation;

      (q)   To the extent constituting principal,  Make-Whole Amount or interest
on  the  Equipment  Notes  attributable  solely  to  an  Event  of  Default  not
constituting a Lease Event of Default;

      (r)   To the extent  incurred by or asserted  against an  Indemnitee  as a
result of any  "prohibited  transaction",  within the  meaning of Section 406 of
ERISA or Section 4975(c)(1) of the Code; or

      (s)   To the extent not included in the definition of Supplemental Rent as
a result of the provisions of clause (e) of such definition.

      For purposes of this Section 9.1, a Person shall be considered a "related"
Indemnitee  with  respect to an  Indemnitee  if such Person is an  Affiliate  or
employer of such Indemnitee, a director, officer, employee, agent, or servant of

<PAGE>

such  Indemnitee or any such  Affiliate or a successor or permitted  assignee of
any of the foregoing.

               9.1.3       SEPARATE AGREEMENT

      This  Agreement  constitutes  a separate  agreement  with  respect to each
Indemnitee and is enforceable directly by each such Indemnitee.

               9.1.4       NOTICE

      If a claim for any Expense that an Indemnitee shall be indemnified against
under this Section 9.1 is made, such Indemnitee shall give prompt written notice
thereof to Lessee.  Notwithstanding the foregoing, the failure of any Indemnitee
to notify Lessee as provided in this Section 9.1.4,  or in Section 9.1.5,  shall
not release  Lessee from any of its  obligations  to indemnify  such  Indemnitee
hereunder,  except to the extent  that such  failure  results  in an  additional
Expense to Lessee  (in which  event  Lessee  shall not be  responsible  for such
additional  expense) or  materially  impairs  Lessee's  ability to contest  such
claim.

               9.1.5       NOTICE OF PROCEEDINGS; DEFENSE OF CLAIMS;
                           LIMITATIONS

      (a)   In case any action,  suit or proceeding shall be brought against any
Indemnitee  for  which  Lessee is  responsible  under  this  Section  9.1,  such
Indemnitee  shall notify Lessee of the  commencement  thereof and Lessee may, at
its expense, participate in and to the extent that it shall wish (subject to the
provisions of the following  paragraph),  assume and control the defense thereof
and, subject to Section 9.1.5(c), settle or compromise the same.

      (b)   Lessee  or its  insurer(s)  shall  have the  right,  at its or their
expense,  to  investigate  or, if Lessee or its  insurer(s)  shall  agree not to
dispute  liability  to the  Indemnitee  giving  notice of such  action,  suit or
proceeding under this Section 9.1.5 for  indemnification  hereunder or under any
insurance policies pursuant to which coverage is sought, control the defense of,
any   action,   suit  or   proceeding,   relating   to  any  Expense  for  which
indemnification  is sought  pursuant to this Section  9.1,  and each  Indemnitee
shall  cooperate with Lessee or its insurer(s) with respect  thereto;  PROVIDED,
that Lessee  shall not be  entitled  to control the defense of any such  action,
suit,  proceeding or compromise any such Expense  during the  continuance of any
Lease Event of Default  arising under  Section 14.1 of the Lease.  In connection
with any such  action,  suit or  proceeding  being  controlled  by Lessee,  such

<PAGE>

Indemnitee  shall have the right to  participate  therein,  at its sole cost and
expense,  with counsel reasonably  satisfactory to Lessee;  PROVIDED,  that such
Indemnitee's   participation   does  not,  in  the  reasonable  opinion  of  the
independent  counsel  appointed  by the Lessee or its  insurers to conduct  such
proceedings, interfere with the defense of such case.

      (c)   In no event shall any  Indemnitee  enter into a settlement  or other
compromise  with  respect to any Expense  without the prior  written  consent of
Lessee, which consent shall not be unreasonably withheld or delayed, unless such
Indemnitee waives its right to be indemnified with respect to such Expense under
this Section 9.1.

      (d)   In the case of any Expense indemnified by the Lessee hereunder which
is covered by a policy of insurance  maintained by Lessee pursuant to Section 11
of the Lease, at Lessee's expense,  each Indemnitee agrees to cooperate with the
insurers in the exercise of their rights to  investigate,  defend or  compromise
such  Expense as may be required to retain the benefits of such  insurance  with
respect to such Expense.

      (e)   If  an  Indemnitee  is not a party  to this  Agreement,  Lessee  may
require such  Indemnitee  to agree in writing to the terms of this Section 9 and
Section 15.8 prior to making any payment to such  Indemnitee  under this Section
9.

      (f)   Nothing  herein  shall be  deemed to be an  assumption  by Lessee of
obligations  of Owner  Trustee with respect to, or a guarantee by Lessee of, any
amounts  payable by Owner  Trustee  upon  Equipment  Notes or a guarantee of any
residual value of the Aircraft.

      (g)   Nothing  contained in this Section  9.1.5 shall be deemed to require
an Indemnitee to contest any Expense or to assume  responsibility for or control
of any judicial proceeding with respect thereto.

               9.1.6       INFORMATION

      Lessee will  provide the relevant  Indemnitee  with such  information  not
within  the  control  of  such  Indemnitee,  as is  in  Lessee's  control  or is
reasonably available to Lessee, which such Indemnitee may reasonably request and
will otherwise cooperate with such Indemnitee so as to enable such Indemnitee to
fulfill its obligations  under Section 9.1.5. The Indemnitee shall supply Lessee
with  such  information  not  within  the  control  of  Lessee,  as is  in  such
Indemnitee's control or is reasonably available to such Indemnitee, which Lessee

<PAGE>

may reasonably request to control or participate in any proceeding to the extent
permitted by Section 9.1.5.

               9.1.7       EFFECT OF OTHER INDEMNITIES; SUBROGATION; FURTHER
                           ASSURANCES

      Upon the  payment in full by Lessee of any  indemnity  provided  for under
this  Agreement,  Lessee,  without  any  further  action and to the full  extent
permitted by Law,  will be  subrogated  to all rights and remedies of the person
indemnified  (other  than with  respect  to any of such  Indemnitee's  insurance
policies or in connection  with any  indemnity  claim such  Indemnitee  may have
under Section 5.03 or Article VII of the Trust  Indenture or Section 5.3 or 7 of
the Trust  Agreement)  in respect of the matter as to which such  indemnity  was
paid.  Each  Indemnitee  will give such further  assurances  or  agreements  and
cooperate  with Lessee to permit  Lessee to pursue such  claims,  if any, to the
extent reasonably requested by Lessee and at Lessee's expense.

               9.1.8       REFUNDS

      If an Indemnitee receives any refund, in whole or in part, with respect to
any Expense paid by Lessee  hereunder,  it will promptly pay the amount refunded
(but not an amount in excess of the  amount  Lessee or any of its  insurers  has
paid in respect of such  Expense) over to Lessee unless a Lease Event of Default
shall have occurred and be continuing,  in which case such amounts shall be paid
over to Owner  Trustee (or, so long as the Trust  Indenture  shall not have been
discharged, to Mortgagee) to hold as security for Lessee's obligations under the
Lessee Operative Agreements or, if requested by Lessee,  applied to satisfy such
obligations.

      9.2        EXPENSES

               9.2.1       INVOICES AND PAYMENT

      Each of the Owner Trustee,  Mortgagee, the Owner Participant,  Lessee, the
Applicable Pass Through  Trustees,  and the  Subordination  Agent shall promptly
submit  to Lessee  for its  prompt  approval  (which  shall not be  unreasonably
withheld)  copies of invoices in reasonable  detail of the Transaction  Expenses
for which it is responsible for providing  information as they are received (but
in no event later than the 90th day after the  Delivery  Date).  If so submitted
and approved,  the Owner Participant agrees promptly,  but in any event no later
than the 105th day after the Delivery  Date,  to pay (but not in excess of 1% of
Lessor's Cost) Transaction  Expenses.  Notwithstanding the foregoing,  Lessee at
its sole option  shall have the right to pay  directly  any and all  Transaction

<PAGE>

Expenses.  Lessee shall be  obligated  to pay  directly any and all  Transaction
Expenses which are in excess of 1% of Lessor's Cost. If Owner  Participant shall
fail to pay any  Transaction  Expense  that it is  obligated  to pay  hereunder,
Lessee shall pay such Transaction  Expense. Any such payment by Lessee shall not
affect  Owner  Participant's   obligations  or  Lessee's  rights  against  Owner
Participant for its failure to make any such payment.

               9.2.2       PAYMENT OF OTHER EXPENSES

      Lessee shall pay (i) the ongoing  fees and  expenses of Owner  Trustee and
Mortgagee,  and (ii) all reasonable  out-of-pocket costs and expenses (including
the reasonable fees and  disbursements  of counsel)  incurred by any Participant
attributable  to (A)  any  transfer  of  title  to the  Aircraft  or any  Engine
contemplated  by  Section  4.5 of the  Lease  or (B) any  waiver,  amendment  or
modification of any Operative Agreement to the extent requested by Lessee.

               9.2.3       PAYMENTS IF TRANSACTIONS DO NOT CLOSE

      In the event that the transaction  contemplated by this Agreement fails to
close  as a  result  of the  Owner  Participant's  failure  to  comply  with its
obligations  under this Agreement or any breach of a representation  or warranty
of  Owner   Participant  made  in  or  pursuant  to  any  Operative   Agreement,
notwithstanding any other rights and remedies that the parties hereto shall have
against Owner Participant,  the Owner Participant will be responsible for all of
its fees and  expenses,  including  but not  limited to the fees,  expenses  and
disbursements  of its special counsel and the fees of the Appraiser  referred to
in Section 5.1.2(xv).

      9.3        GENERAL TAX INDEMNITY

               9.3.1       GENERAL

      Except as provided in Section  9.3.2,  Lessee  agrees that each payment of
Rent paid by Lessee  pursuant to the Lease,  and any other  payment or indemnity
paid by Lessee to a Tax Indemnitee under any Operative Agreement,  shall be free
of all  withholdings  or  deductions  with respect to Taxes of any nature (other
than U.S. federal,  state or local withholding taxes on, based on or measured by
gross  or net  income),  and in the  event  that  Lessee  shall be  required  by
applicable  law to make any such  withholding  or deduction for any such payment
(x)  Lessee  shall  make all such  withholdings  or  deductions,  (y) the amount
payable  by  Lessee  shall  be  increased  so that  after  making  all  required
withholdings or deductions such Tax Indemnitee  receives the same amount that it
would have received had no such  withholdings  or deductions  been made, and (z)

<PAGE>

Lessee  shall pay the full amount  withheld or deducted to the  relevant  Taxing
Authority in accordance  with applicable law. Lessee further agrees that, in the
event it is required to withhold from any payment of Basic Rent, Stipulated Loss
Value (and amounts  determined by reference  thereto),  and amounts payable upon
exercise of Lessee's  purchase option pursuant to Section 17.3 of the Lease, any
Tax imposed upon Owner  Participant or Owner Trustee  (including any withholding
Tax based on income or receipts of Owner  Participant or Owner Trustee) and such
Tax is excluded from indemnification pursuant to Section 9.3.2, Lessee shall pay
such additional amount, if any, required so that the total amount paid by Lessee
(after making all required withholdings) is equal to (assuming timely payment of
the Equipment Notes prior to the relevant Payment Date) the aggregate  principal
amount of scheduled  installments due on the Equipment Notes  outstanding on the
relevant  Payment Date,  together with accrued and unpaid  interest,  due on the
Equipment Notes;  Owner Participant or Owner Trustee,  as the case may be, shall
reimburse Lessee for any such additional  amounts within two Business Days after
demand  therefor.  Except as provided in Section 9.3.2 and whether or not any of
the  transactions  contemplated  hereby  are  consummated,   Lessee  shall  pay,
indemnify,  protect, defend and hold each Tax Indemnitee harmless from all Taxes
imposed  by any  Taxing  Authority  that may from time to time be  imposed on or
asserted against any Tax Indemnitee or the Aircraft, the Airframe, any Engine or
any Part or any  interest in any of the  foregoing  (whether or not  indemnified
against by any other Person),  upon or with respect to the Operative  Agreements
or the transactions or payments contemplated thereby,  including but not limited
to any Tax imposed upon or with respect to (x) the Aircraft,  the Airframe,  any
Engine,  any Part, any Operative  Agreement  (including  without  limitation any
Equipment  Notes) or any data or any other thing  delivered  or to be  delivered
under  an  Operative  Agreement,  (y)  the  purchase,  manufacture,  acceptance,
rejection,  sale, transfer of title, return,  ownership,  mortgaging,  delivery,
transport, charter, rental, lease, re-lease, sublease,  assignment,  possession,
repossession,  presence,  use,  condition,  storage,  preparation,  maintenance,
modification,  alteration,  improvement,  operation,  registration,  transfer or
change of registration, reregistration, repair, replacement, overhaul, location,
control,  the  imposition  of any Lien  (other than a Lessor  Lien),  financing,
refinancing  requested by the Lessee,  abandonment  or other  disposition of the
Aircraft,  the  Airframe,  any  Engine,  any Part,  any data or any other  thing
delivered or to be delivered under an Operative Agreement or (z) rent, interest,
fees or any other  income,  proceeds,  receipts or earnings,  whether  actual or
deemed, arising upon, in connection with, or in respect of, any of the Operative
Agreements  (including  the property or income or other proceeds with respect to

<PAGE>

property  held as part of the Trust  Estate)  or the  transactions  contemplated
thereby.

               9.3.2       CERTAIN EXCEPTIONS

      The  provisions of Section 9.3.1 shall not apply to, and Lessee shall have
no liability hereunder for, Taxes:

      (a)   imposed on a Tax Indemnitee by the federal  government of the United
States or any Taxing Authority or governmental  subdivision of the United States
or therein  (including any state or local Taxing Authority) (i) on, based on, or
measured by,  gross or net income or gross or net  receipts,  including  capital
gains  taxes,  excess  profits  taxes,   minimum  taxes  from  tax  preferences,
alternative  minimum taxes,  branch profits taxes,  accumulated  earnings taxes,
personal  holding  company  taxes,  succession  taxes and estate taxes,  and any
withholding taxes on, based on or measured by gross or net income or receipts or
(ii) on, or with  respect  to, or  measured  by,  capital or net worth or in the
nature of a franchise  tax or a tax for the privilege of doing  business  (other
than, in the case of clause (i) or (ii), sales, use, license or property Taxes);

      (b)   imposed  on a Tax Indemnitee by any Taxing Authority or governmental
subdivision  thereof or therein  outside of the  United  States  (including  any
Taxing Authority in or of a territory,  possession or commonwealth of the United
States) (i) on,  based on, or measured  by,  gross or net income or gross or net
receipts,  including  capital gains taxes,  excess profits taxes,  minimum taxes
from  tax  preferences,   alternative   minimum  taxes,  branch  profits  taxes,
accumulated earnings taxes, personal holding company taxes, succession taxes and
estate taxes, and any withholding taxes on, based on or measured by gross or net
income or receipts or (ii) on, or with  respect to, or measured  by,  capital or
net worth or in the  nature of a  franchise  tax or a tax for the  privilege  of
doing business  (other than, in the case of clause (i) or (ii), (A) sales,  use,
license or  property  Taxes,  or (B) any Taxes  imposed by any Taxing  Authority
(other than a Taxing Authority within whose  jurisdiction such Tax Indemnitee is
incorporated  or organized or maintains its principal place of business) if such
Tax  Indemnitee  would  not have  been  subject  to  Taxes of such  type by such
jurisdiction  but for (I) the location,  use or operation of the  Aircraft,  the
Airframe,  any  Engine  or any  Part  thereof  by a  Lessee  Person  within  the
jurisdiction of the Taxing  Authority  imposing such Tax, or (II) the activities
of any Lessee  Person  (except for  activities of a Lessee Person that is not an
Affiliate,  successor or assign of the Lessee, which activities are unrelated to
the transactions contemplated by the Operative Agreements) in such jurisdiction,
including,  but not  limited  to,  use of any other  aircraft  by Lessee in such
jurisdiction, (III) the status of any Lessee Person as a foreign entity or as an
entity owned in whole or in part by foreign persons, (IV) Lessee having made (or
having  been  deemed to have  made)  payments  to such Tax  Indemnitee  from the
relevant  jurisdiction  or (V) in the case of the  Pass  Through  Trustees,  any
Participant  or any  related  Tax  Indemnitee,  the Lessee  being  incorporated,
organized,  maintaining  a place of business or  conducting  activities  in such
jurisdiction);

<PAGE>

      (c)   on,   or  with  respect  to,  or  measured  by,  any  trustee  fees,
commissions or  compensation  received by Owner Trustee,  Pass Through  Trustee,
Subordination Agent or Mortgagee;

      (d)   on the Trust or the Trust  Estate that result from  treatment of the
Trust or the Trust  Estate as an entity,  such as a  corporation,  separate  and
apart from the Owner Participant;

      (e)   that are being contested as provided in Section 9.3.4 hereof;

      (f)   imposed  on any Tax  Indemnitee to the extent that such Taxes result
from the gross  negligence or willful  misconduct of such Tax  Indemnitee or any
Affiliate thereof;

      (g)   imposed  on or  with  respect  to a Tax  Indemnitee  (including  the
transferee  in those  cases in which the Tax on  transfer  is imposed  on, or is
collected from, the  transferee) as a result of a transfer or other  disposition
(including a deemed transfer or disposition) by such Tax Indemnitee or a related
Tax Indemnitee (or, in the case of the Owner Participant,  by Owner Trustee, or,
in the case of Taxes imposed on a transferee, by the transferor) of any interest
in the Aircraft,  the Airframe, any Engine or any Part, the Rent (other than the
assignment of Rent to the Mortgagee pursuant to the Trust Indenture), the Trust,
the Trust Estate,  the Trust Indenture Estate, the Lease or any interest arising
under  the  Operative  Agreements  or  any  Equipment  Note  or  a  transfer  or
disposition  (including a deemed  transfer or  disposition) of any interest in a
Tax Indemnitee  (other than (A) a  substitution  or replacement of the Aircraft,
the Airframe,  any Engine or any Part by a Lessee Person that is treated for Tax
purposes as a transfer or disposition, (B) a transfer pursuant to an exercise of
remedies  upon a Lease Event of Default  that shall have  occurred and have been
continuing, or (C) a transfer to Lessee pursuant to Section 17.3 of the Lease);

      (h)   Taxes  in excess of those that would have been imposed had there not
been a transfer or other  disposition  by or to such Tax Indemnitee or a related
Tax Indemnitee described in paragraph (g) above;

<PAGE>

      (i)   imposed on the Owner Participant and indemnified by Lessee  pursuant
to the Tax Indemnity Agreement;

      (j)   imposed  with respect to any period after the  expiration or earlier
termination of the Term and, if required pursuant to the terms of the Lease, the
return of  possession  of the  Aircraft to Lessor or placement in storage at the
request of Lessor in accordance with the Lease (provided that this exclusion (j)
shall  not apply to Taxes  imposed  after  such  period  arising  as a result of
payments by Lessee under the Operative Agreements after such period);

      (k)   consisting of any interest, penalties or additions to tax imposed on
a Tax  Indemnitee  as a result  of (in  whole or in  part)  failure  of such Tax
Indemnitee or a related Tax  Indemnitee to file any return  properly and timely,
unless  such  failure  shall be caused by the  failure of Lessee to fulfill  its
obligations, if any, under Section 9.3.6 with respect to such return;

      (l)   resulting  from,  or that would not have been  imposed but for,  any
Lessor Liens arising as a result of claims against,  or acts or omissions of, or
otherwise attributable to such Tax Indemnitee or a related Tax Indemnitee;

      (m)   imposed  on any Tax Indemnitee as a result of the breach by such Tax
Indemnitee or a related Tax Indemnitee of any covenant of such Tax Indemnitee or
any Affiliate thereof contained in any Operative  Agreement or the inaccuracy of
any  representation  or warranty by such Tax Indemnitee or any Affiliate thereof
in any Operative Agreement;

      (n)   in  the  nature of an  intangible  or  similar  Tax (i) upon or with
respect to the value or principal amount of the interest of any Loan Participant
or any Note Holder in any Equipment Note or the loan  evidenced  thereby or (ii)
upon or with  respect to the value of the interest of the Owner  Participant  in
the Trust Estate or the Trust, in each case only if such Taxes are in the nature
of  franchise  Taxes or result  from the Tax  Indemnitee  doing  business in the
taxing jurisdiction and are imposed because of the place of incorporation or the
activities   unrelated  to  the  transactions   contemplated  by  the  Operative
Agreements in the taxing jurisdiction of such Tax Indemnitee;

      (o) that is included in Lessor's Cost and paid to the  appropriate  Taxing
Authority;

      (p)   imposed  on a Tax Indemnitee by a Taxing Authority of a jurisdiction
outside  the  United  States to the extent  that such Taxes  would not have been
imposed  but for a  connection  between  the Tax  Indemnitee  or a  related  Tax

<PAGE>

Indemnitee and such jurisdiction imposing such Tax unrelated to the transactions
contemplated by the Operative Agreements; or

      (q)   Taxes relating to ERISA or Section 4975 of the Code.

      For purposes  hereof,  a Tax Indemnitee and any other Tax Indemnitees that
are successors,  assigns,  agents, servants or Affiliates of such Tax Indemnitee
shall be related Tax Indemnitees.

               9.3.3       PAYMENT

      (a)   Lessee's indemnity obligation to a Tax Indemnitee under this Section
9.3 shall equal the amount which, after taking into account any Tax imposed upon
the receipt or accrual of the amounts payable under this Section 9.3 and any tax
benefits  actually  recognized  by  such  Tax  Indemnitee  as a  result  of  the
indemnifiable Tax (including,  without limitation,  any benefits recognized as a
result of an indemnifiable Tax being utilized by such Tax Indemnitee as a credit
against Taxes not indemnifiable  under this Section 9.3), shall equal the amount
of the Tax indemnifiable under this Section 9.3.

      (b)   At Lessee's request,  the computation of the amount of any indemnity
payment owed by Lessee or any amount owed by a Tax Indemnitee to Lessee pursuant
to this Section 9.3 shall be verified and  certified  by an  independent  public
accounting  firm selected by such Tax Indemnitee and reasonably  satisfactory to
Lessee.  Such  verification  shall be  binding.  The costs of such  verification
(including  the fee of such  public  accounting  firm)  shall be borne by Lessee
unless such  verification  shall result in an adjustment in Lessee's favor of 5%
or more of the  net  present  value  of the  payment  as  computed  by such  Tax
Indemnitee, in which case the costs shall be paid by such Tax Indemnitee.

      (c)   Each Tax Indemnitee  shall provide Lessee with such  certifications,
information and  documentation as shall be in such Tax  Indemnitee's  possession
and as shall be reasonably requested by Lessee to minimize any indemnity payment
pursuant to this Section 9.3;  provided,  that  notwithstanding  anything to the
contrary contained herein, no Tax Indemnitee shall be required to provide Lessee
with any Tax returns.

      (d)   Each  Tax Indemnitee  shall  promptly  forward to Lessee any written
notice,  bill or advice received by it from any Taxing Authority  concerning any
Tax for which it seeks  indemnification under this Section 9.3. Lessee shall pay
any amount for which it is liable  pursuant to this  Section 9.3 directly to the
appropriate  Taxing  Authority  if legally  permissible  or upon demand of a Tax
Indemnitee,  to such Tax  Indemnitee  within 30 days of such  demand  (or,  if a

<PAGE>

contest occurs in accordance  with Section  9.3.4,  within 30 days after a Final
Determination  (as defined  below)),  but in no event more than one Business Day
prior to the date the Tax to which such amount payable hereunder relates is due.
If  requested  by a Tax  Indemnitee  in  writing,  Lessee  shall  furnish to the
appropriate  Tax  Indemnitee  the original or a certified  copy of a receipt for
Lessee's  payment of any Tax paid by Lessee or such other evidence of payment of
such Tax as is  acceptable  to such Tax  Indemnitee.  Lessee  shall also furnish
promptly upon written  request such data as any Tax  Indemnitee  may  reasonably
require to enable such Tax  Indemnitee  to comply with the  requirements  of any
taxing jurisdiction  unless such data is not reasonably  available to Lessee or,
unless  such  data is  specifically  requested  by a  Taxing  Authority,  is not
customarily furnished by domestic air carriers under similar circumstances.  For
purposes of this Section 9.3, a "Final Determination" shall mean (i) a decision,
judgment,  decree or other  order by any court of  competent  jurisdiction  that
occurs pursuant to the provisions of Section 9.3.4,  which  decision,  judgment,
decree  or other  order  has  become  final  and  unappealable,  (ii) a  closing
agreement or settlement  agreement entered into in accordance with Section 9.3.4
that has become  binding and is not subject to further  review or appeal (absent
fraud,  misrepresentation,  etc.),  or (iii) the  termination of  administrative
proceedings  and the  expiration of the time for  instituting a claim in a court
proceeding.

      (e)   If any Tax Indemnitee shall actually realize a tax savings by reason
of any Tax paid or indemnified  by Lessee  pursuant to this Section 9.3 (whether
such tax savings shall be by means of a foreign tax credit, depreciation or cost
recovery  deduction or otherwise)  and such savings is not otherwise  taken into
account in computing such payment or indemnity such Tax Indemnitee  shall pay to
Lessee an amount equal to the lesser of (i) the amount of such tax savings, plus
any additional tax savings recognized as the result of any payment made pursuant
to this sentence,  when, as, if, and to the extent,  realized or (ii) the amount
of all payments  pursuant to this  Section 9.3 by Lessee to such Tax  Indemnitee
(less any payments  previously made by such Tax Indemnitee to Lessee pursuant to
this  Section  9.3.3 (e)) (and the excess,  if any, of the amount  described  in
clause (i) over the amount described in clause (ii) shall be carried forward and
applied  to  reduce  pro  tanto  any  subsequent  obligations  of Lessee to make
payments to such Tax Indemnitee  pursuant to this Section 9.3);  provided,  that
such Tax Indemnitee  shall not be required to make any payment  pursuant to this
sentence so long as a Lease Event of Default of a monetary  nature has  occurred
and  is  continuing.  If a tax  benefit  is  later  disallowed  or  denied,  the
disallowance  or denial shall be treated as a Tax  indemnifiable  under  Section

<PAGE>

9.3.1  without  regard to the  provisions  of Section  9.3.2 (other than Section
9.3.2 (f)). Each such Tax Indemnitee shall in good faith use reasonable  efforts
in filing its tax returns and in dealing  with  Taxing  Authorities  to seek and
claim any such tax benefit.

               9.3.4       CONTEST

      (a)   If a written claim is made against a Tax  Indemnitee  for Taxes with
respect to which Lessee could be liable for payment or indemnity  hereunder,  or
if a Tax  Indemnitee  makes a  determination  that a Tax is due for which Lessee
could have an indemnity obligation hereunder, such Tax Indemnitee shall promptly
give Lessee notice in writing of such claim (provided, that failure to so notify
Lessee shall not relieve Lessee of its indemnity  obligations  hereunder  unless
such  failure  to notify  effectively  forecloses  Lessee's  rights to require a
contest  of such  claim)  and shall  take no action  with  respect to such claim
without the prior written consent of Lessee for 30 days following the receipt of
such notice by Lessee; provided, that, in the case of a claim made against a Tax
Indemnitee, if such Tax Indemnitee shall be required by law to take action prior
to the end of such 30-day period,  such Tax Indemnitee  shall, in such notice to
Lessee,  so inform Lessee,  and such Tax Indemnitee  shall take no action for as
long as it is legally able to do so (it being  understood  that a Tax Indemnitee
shall be entitled  to pay the Tax claimed and sue for a refund  prior to the end
of such 30-day  period if (i)(A) the  failure to so pay the Tax would  result in
substantial  penalties (unless immediately  reimbursed by Lessee) and the act of
paying the Tax would not  materially  prejudice  the right to contest or (B) the
failure  to so pay  would  result  in  criminal  penalties  and  (ii)  such  Tax
Indemnitee  shall take any action so required in  connection  with so paying the
Tax in a manner that is the least prejudicial to the pursuit of the contest). In
addition, such Tax Indemnitee shall (provided,  that Lessee shall have agreed to
keep such information  confidential  other than to the extent necessary in order
to contest the claim) furnish Lessee with copies of any requests for information
from any Taxing  Authority  relating to such Taxes with  respect to which Lessee
may be required to indemnify hereunder. If requested by Lessee in writing within
30 days after its receipt of such  notice,  such Tax  Indemnitee  shall,  at the
expense of Lessee (including, without limitation, all reasonable costs, expenses
and reasonable  attorneys' and  accountants'  fees and  disbursements),  in good
faith  contest  (or, if permitted by  applicable  law,  allow Lessee to contest)
through  appropriate  administrative  and  judicial  proceedings  the  validity,
applicability or amount of such Taxes by (I) resisting payment thereof, (II) not
paying the same except under protest if protest is necessary and proper or (III)
if the payment is made, using  reasonable  efforts to obtain a refund thereof in
an appropriate  administrative and/or judicial proceeding. If requested to do so

<PAGE>

by Lessee,  the Tax  Indemnitee  shall  appeal  any  adverse  administrative  or
judicial  decision,  except  that the Tax  Indemnitee  shall not be  required to
pursue any appeals to the United States Supreme Court.  If and to the extent the
Tax  Indemnitee  is able to separate  the  contested  issue or issues from other
issues  arising  in the same  administrative  or  judicial  proceeding  that are
unrelated to the transactions  contemplated by the Operative Agreements without,
in the good faith judgment of such Tax Indemnitee,  adversely affecting such Tax
Indemnitee,  such Tax  Indemnitee  shall permit Lessee to control the conduct of
any such  proceeding  and shall provide to Lessee (at Lessee's cost and expense)
with  such  information  or data  that is in such Tax  Indemnitee's  control  or
possession that is reasonably  necessary to conduct such contest. In the case of
a contest controlled by a Tax Indemnitee, such Tax Indemnitee shall consult with
Lessee in good faith  regarding  the manner of  contesting  such claim and shall
keep Lessee reasonably  informed  regarding the progress of such contest.  A Tax
Indemnitee shall not fail to take any action expressly  required by this Section
9.3.4  (including,  without  limitation,  any action  regarding any appeal of an
adverse  determination  with respect to any claim) or settle or  compromise  any
claim without the prior written consent of the Lessee (except as contemplated by
Section 9.3.4(b) or (c)).

      (b)   Notwithstanding the foregoing, in no event shall a Tax Indemnitee be
required  to pursue any  contest  (or to permit  Lessee to pursue  any  contest)
unless (i) Lessee  shall have  agreed to pay such Tax  Indemnitee  on demand all
reasonable costs and expenses incurred by such Tax Indemnitee in connection with
contesting  such Taxes,  including,  without  limitation,  all reasonable out of
pocket costs and expenses and reasonable  attorneys' and  accountants'  fees and
disbursements,  (ii) if such  contest  shall  involve  the payment of the claim,
Lessee shall advance the amount  thereof (to the extent  indemnified  hereunder)
plus  interest,  penalties  and  additions to tax with respect  thereto that are
required  to  be  paid  prior  to  the   commencement  of  such  contest  on  an
interest-free  after-Tax  basis to such Tax Indemnitee  (and such Tax Indemnitee
shall  promptly pay to the Lessee any net realized tax benefits  resulting  from
such advance  including any tax benefits  resulting  from making such  payment),
(iii) such Tax Indemnitee shall have reasonably determined that the action to be
taken will not result in any material  risk of  forfeiture,  sale or loss of the
Aircraft  (unless Lessee shall have made  provisions to protect the interests of
any  such  Tax  Indemnitee  in a  manner  reasonably  satisfactory  to such  Tax
Indemnitee)  (provided,  that such Tax  Indemnitee  agrees  to notify  Lessee in
writing  promptly after it becomes aware of any such risk),  (iv) no Lease Event
of Default  shall have  occurred and be  continuing  unless  Lessee has provided
security for its  obligations  hereunder  by  advancing  to such Tax  Indemnitee

<PAGE>

before  proceeding or continuing with such contest,  the amount of the Tax being
contested, plus any interest and penalties and an amount estimated in good faith
by such Tax  Indemnitee  for expenses,  and (v) prior to commencing any judicial
action  controlled by Lessee,  Lessee shall have  acknowledged its liability for
such  claim  hereunder,   provided  that  Lessee  shall  not  be  bound  by  its
acknowledgment  if the Final  Determination  articulates  conclusions of law and
fact that  demonstrate  that Lessee has no liability for the  contested  amounts
hereunder.  Notwithstanding the foregoing,  if any Tax Indemnitee shall release,
waive,  compromise  or settle  any claim  which may be  indemnifiable  by Lessee
pursuant to this Section 9.3 without the written permission of Lessee,  Lessee's
obligation to indemnify such Tax Indemnitee  with respect to such claim (and all
directly  related  claims and claims  based on the outcome of such claim)  shall
terminate,  subject to Section 9.3.4(c),  and subject to Section 9.3.4(c),  such
Tax Indemnitee  shall repay to Lessee any amount  previously paid or advanced to
such Tax Indemnitee  with respect to such claim,  plus interest at the rate that
would have been  payable by the  relevant  Taxing  Authority  with  respect to a
refund of such Tax.

      (c)   Notwithstanding  anything  contained  in  this  Section  9.3,  a Tax
Indemnitee  will not be required to contest the  imposition of any Tax and shall
be permitted to settle or compromise any claim without  Lessee's consent if such
Tax  Indemnitee  (i) shall waive its right to  indemnity  under this Section 9.3
with  respect  to such Tax (and any  directly  related  claim  and any claim the
outcome of which is determined based upon the outcome of such claim), (ii) shall
pay to Lessee any amount  previously paid or advanced by Lessee pursuant to this
Section 9.3 with respect to such Tax,  plus interest at the rate that would have
been payable by the relevant  Taxing  Authority with respect to a refund of such
Tax,  and (iii) shall agree to discuss with Lessee the views or positions of any
relevant Taxing Authority with respect to the imposition of such Tax.

               9.3.5       REFUND

      If any Tax  Indemnitee  shall  receive a refund  of, or be  entitled  to a
credit  against  other  liability  for,  all or any  part  of  any  Taxes  paid,
reimbursed or advanced by Lessee, such Tax Indemnitee shall pay to Lessee within
30 days of such  receipt an amount equal to the lesser of (a) the amount of such
refund  or  credit  plus any net tax  benefit  (taking  into  account  any Taxes
incurred  by such Tax  Indemnitee  by reason of the  receipt  of such  refund or
realization of such credit) actually realized by such Tax Indemnitee as a result
of any payment by such Tax Indemnitee made pursuant to this sentence  (including
this clause (a)) and (b) such tax payment, reimbursement or advance by Lessee to

<PAGE>

such Tax  Indemnitee  theretofore  made  pursuant  to this  Section 9.3 (and the
excess,  if any, of the amount described in clause (a) over the amount described
in clause  (b) shall be  carried  forward  and  applied  to reduce pro tanto any
subsequent obligation of Lessee to make payments to such Tax Indemnitee pursuant
to this  Section  9.3).  If, in  addition  to such  refund or  credit,  such Tax
Indemnitee shall receive (or be credited with) an amount  representing  interest
on the amount of such refund or credit,  such Tax Indemnitee shall pay to Lessee
within 30 days of such receipt or realization of such credit that  proportion of
such interest  that shall be fairly  attributable  to Taxes paid,  reimbursed or
advanced by Lessee  prior to the receipt of such refund or  realization  of such
credit.

               9.3.6       TAX FILING

      If any report, return or statement is required to be filed with respect to
any Tax which is subject to indemnification under this Section 9.3, Lessee shall
timely file the same  (except for any such report,  return or statement  which a
Tax  Indemnitee  has  timely  notified  the  Lessee  in  writing  that  such Tax
Indemnitee  intends to file, or for which such Tax Indemnitee is required by law
to file,  in its own name);  provided,  that the relevant Tax  Indemnitee  shall
furnish  Lessee with any  information  in such Tax  Indemnitee's  possession  or
control  that is  reasonably  necessary  to file  any  such  return,  report  or
statement and is reasonably  requested in writing by Lessee (it being understood
that the Tax  Indemnitee  shall not be required to furnish  copies of its actual
tax  returns,  although  it may be  required  to  furnish  relevant  information
contained  therein).  Lessee shall either file such report,  return or statement
and send a copy of such report, return or statement to such Tax Indemnitee,  and
Owner Trustee if the Tax  Indemnitee is not Owner  Trustee,  or, where Lessee is
not permitted to file such report, return or statement, it shall notify such Tax
Indemnitee of such  requirement  and prepare and deliver such report,  return or
statement to such Tax Indemnitee in a manner satisfactory to such Tax Indemnitee
within a reasonable  time prior to the time such report,  return or statement is
to be filed.

               9.3.7       FORMS

      Each Tax  Indemnitee  agrees  to  furnish  from  time to time to Lessee or
Mortgagee  or to such other  person as Lessee or  Mortgagee  may  designate,  at
Lessee's or Mortgagee's request, such duly executed and properly completed forms
as may be  necessary  or  appropriate  in  order to claim  any  reduction  of or
exemption from any withholding or other Tax imposed by any Taxing Authority,  if
(x) such  reduction or exemption  is  available to such Tax  Indemnitee  and (y)

<PAGE>

Lessee has  provided  such Tax  Indemnitee  with any  information  necessary  to
complete such form not otherwise reasonably available to such Tax Indemnitee.

               9.3.8       NON-PARTIES

      If a Tax Indemnitee is not a party to this  Agreement,  Lessee may require
the Tax  Indemnitee  to agree in writing,  in a form  reasonably  acceptable  to
Lessee,  to the terms of this  Section 9.3 and Section  15.8 prior to making any
payment to such Tax Indemnitee under this Section 9.3.

               9.3.9       SUBROGATION

      Upon  payment of any Tax by Lessee  pursuant to this  Section 9.3 to or on
behalf  of a Tax  Indemnitee,  Lessee,  without  any  further  action,  shall be
subrogated to any claims that such Tax  Indemnitee  may have  relating  thereto.
Such Tax Indemnitee  shall cooperate with Lessee (to the extent such cooperation
does not  result in any  unreimbursed  cost,  expense or  liability  to such Tax
Indemnitee) to permit Lessee to pursue such claims.

               9.3.10      FOREIGN TAX ON LOAN PAYMENTS

      If an Owner Participant is incorporated or organized, or maintains a place
of business or conducts activities in, a country other than the United States or
in a territory,  possession or  commonwealth  of the United  States  (within the
meaning of the tax law of that foreign  jurisdiction) and if as a result thereof
any foreign Taxes (including  withholding Taxes) are imposed on the Pass Through
Trustees,  Pass Through Trusts,  or Note Holders,  then Owner  Participant shall
reimburse  Lessee for any payments Lessee is required to make to or on behalf of
any Pass Through Trustee,  Pass Through Trust, or Note Holder under this Section
9.3 as a result of the  imposition  of such Taxes.  The amount  payable by Owner
Participant  to Lessee shall be an amount  which,  after taking into account any
such  Taxes,  any Tax  imposed  upon the  receipt  or  accrual by Lessee of such
payment by Owner  Participant  and any tax  benefits or tax savings  realized by
Lessee  with  respect to the  payment  of such  withholding  Tax or the  payment
hereunder,  shall equal the amount of  Lessee's  payment to or on behalf of such
Pass Through Trustee, or Note Holder.

      9.4        PAYMENTS

      Any payments  made pursuant to Section 9.1 or 9.3 shall be due on the 60th
day after demand therefor and shall be made directly to the relevant  Indemnitee
or Tax Indemnitee or to Lessee,  in immediately  available funds at such bank or
to such account as specified by such Indemnitee or Tax Indemnitee or Lessee,  as

<PAGE>

the case may be, in written  directives to the payor,  or, if no such  direction
shall have been given, by check of the payor payable to the order of, and mailed
to,  such  Indemnitee  or Tax  Indemnitee  or  Lessee,  as the case  may be,  by
certified mail, postage prepaid, at its address as set forth in this Agreement.

      9.5        INTEREST

      If any amount,  payable by Lessee,  any  Indemnitee or any Tax  Indemnitee
under Section 9.1 or 9.3 is not paid when due, the person obligated to make such
payment  shall pay on demand,  to the  extent  permitted  by Law,  to the person
entitled thereto,  interest on any such amount for the period from and including
the due date for such amount to but  excluding the date the same is paid, at the
Payment Due Rate.  Such interest  shall be paid in the same manner as the unpaid
amount in respect of which such interest is due.

      9.6        BENEFIT OF INDEMNITIES

      The  obligations  of Lessee in  respect of all  indemnities,  obligations,
adjustments  and  payments  in  Section  9.1 or 9.3 are  expressly  made for the
benefit  of, and shall be  enforceable  by,  the  Indemnitee  or Tax  Indemnitee
entitled  thereto,  without declaring the Lease to be in default or taking other
action thereunder, and notwithstanding any provision of the Trust Indenture.

SECTION 10.      ASSIGNMENT OR TRANSFER OF INTERESTS

      10.1       PARTICIPANTS, OWNER TRUSTEE AND NOTE HOLDERS

               10.1.1      OWNER PARTICIPANT

      (a)   During the Term, Owner  Participant shall not Transfer any or all of
its right,  title or interest in the Trust Estate or the Trust  Agreement and to
this Agreement unless:

           (i) The Transferee  shall have full power,  authority and legal right
      to execute and deliver and to perform the obligations of Owner Participant
      under this Agreement and the other Owner Participant  Agreements and shall
      provide  reasonably  satisfactory  evidence of such power and authority to
      Lessee, Owner Trustee and Mortgagee;

           (ii)  The  Transferee  shall  enter  into one or more  legal,  valid,
      binding  and  enforceable   agreements  effective  to  confirm  that  such
      Transferee agrees to be bound by all the terms of, and to undertake all of
      the  obligations  arising after such transfer of, the  transferring  Owner
      Participant contained in the Owner Participant  Agreements and in which it

<PAGE>

      makes  representations  and  warranties  substantially  the  same as those
      contained in Section 6.2 of the Participation Agreement;

           (iii)  Lessee  shall not be  obligated  to pay any greater  amount or
      incur any greater obligation than that which it would have been obliged to
      pay or incur under the Lease or other  Lessee  Operative  Agreement  if no
      transfer or assignment  had taken place,  and the terms and  conditions of
      this  Lease and the other  Lessee  Operative  Agreements  insofar  as they
      relate to the rights  and  obligations  of Lessee or the Loan  Participant
      shall not be altered;

           (iv) Owner  Participant  shall  deliver to Lessee,  Owner Trustee and
      Mortgagee an opinion of counsel reasonably satisfactory to each of them to
      the  effect  that such  agreement  or  agreements  referred  to in Section
      10.1.1(a)(ii)  and, if applicable,  10.1.1(a)(vi)  are legal,  binding and
      enforceable  in accordance  with its or their terms and that such transfer
      will not violate the Act, the  registration  provisions of the  Securities
      Act, or any other applicable Federal law;

           (v) The  Transfer  shall  relate  to the Owner  Participant's  entire
      interest as Owner Participant;

           (vi) The  Transferee  is a Citizen  of the  United  States  (it being
      understood that the existence of any such  requirement is to be determined
      without giving consideration to Section 47.9 of the FAA Regulations or any
      other  provision  that  may  restrict  Lessee's  use or  operation  of the
      Aircraft),  or shall use a voting powers trust or similar  arrangement  in
      order to hold an interest in the Trust  Estate such that the  Aircraft can
      be  registered  in the United  States  (without  giving  consideration  to
      Section  47.9 of the FAA  Regulations  or any  other  provision  that  may
      restrict Lessee's use or operation of the Aircraft); and

           (vii) The Transferee shall be a single person and shall be either (A)
      a Permitted  Institution  or (B) any other  person  (other  than,  without
      Lessee's  consent,  a  commercial  air  carrier,  a  commercial   aircraft
      operator, a freight forwarder or an Affiliate of any of the foregoing) the
      obligations of which under the Owner Participant Agreements are guaranteed
      by a Permitted Institution in any case, pursuant to a written guaranty, in
      form and substance  reasonably  satisfactory to Lessee,  Owner Trustee and
      Mortgagee.

<PAGE>

      (b)   Owner Participant shall give written notice to Lessee, Mortgagee and
Owner Trustee at least 10 days prior to any such  Transfer,  specifying the name
and address of the proposed  Transferee,  and providing financial  statements of
the proposed Transferee evidencing satisfaction of the requirements described in
Section 10.1.1(a)(vi)(A) or (B) above.

      (c)   Any fees, charges and expenses, including the reasonable legal fees,
charges and expenses incurred by Lessee, Owner Participant,  Mortgagee, any Note
Holder or Owner  Trustee in  connection  with any Transfer by Owner  Participant
permitted by this Section 10.1.1, or by the Transferee in any such case, will be
paid for by Owner Participant.

               10.1.2      OWNER TRUSTEE

      Owner Trustee may transfer its interests in the Trust  Agreement  pursuant
to Section 9 thereof.

               10.1.3      NOTE HOLDERS

      Subject to Section  7.5.2 hereof and Section 2.07 of the Trust  Indenture,
any Note  Holder  may,  at any time and  from  time to time,  Transfer  or grant
participations  in all or any portion of the  Equipment  Notes and/or all or any
portion  of its  beneficial  interest  in its  Equipment  Notes  and  the  Trust
Indenture Estate to any person (it being understood that the sale or issuance of
Pass Through  Certificates  by a Pass Through  Trustee shall not be considered a
Transfer  or  participation);   provided,  that  any  participant  in  any  such
participations  shall not have any direct rights under the Operative  Agreements
or any Lien on all or any part of the  Aircraft  or Trust  Indenture  Estate and
Lessee shall not have any increased  liability or obligations as a result of any
such  participation.  In the  case of any  such  Transfer,  the  Transferee,  by
acceptance of Equipment Notes in connection with such Transfer,  shall be deemed
to be bound by all of the  covenants of Note Holders  contained in the Operative
Agreements.

      10.2       EFFECT OF TRANSFER

      Upon any  Transfer in  accordance  with Section  10.1.1,  10.1.2 or 10.1.3
(other  than any  Transfer  by any Note  Holder,  to the  extent it only  grants
participations  in  Equipment  Notes  or in its  beneficial  interest  therein),
Transferee  shall be deemed an "Owner  Participant,"  "Owner Trustee" or a "Note
Holder,"  respectively,  for all  purposes  of  this  Agreement  and  the  other
Operative Agreements and, in the case of a Transferee of any Participant or Note
Holder,  shall be deemed to have  paid its  ratable  portion  of  Lessor's  Cost

<PAGE>

previously made by Owner Participant or Loan Participant,  respectively,  making
such  conveyance  and  represented  by the  interest  being  conveyed,  and each
reference   herein  to  Owner   Participant,   Owner  Trustee  or  Note  Holder,
respectively,  shall thereafter be deemed a reference to such Transferee for all
purposes,   and  the  transferring  Owner  Participant,   Owner  Trustee,   Loan
Participant  or Note  Holder  shall be  released  (except,  in the case of Owner
Participant,  to the  extent  of  any  guaranty  provided  by it  under  Section
10.1.1(a)(vi))  from all of its liabilities and obligations under this Agreement
and  any  other  Operative   Agreements  to  the  extent  such  liabilities  and
obligations  arise after such  Transfer  and,  in each case,  to the extent such
liabilities and obligations are assumed by the Transferee;  PROVIDED,  that such
transferring Owner Participant, Owner Trustee or Note Holder (and its respective
Affiliates,  successors, assigns, agents, servants,  representatives,  directors
and  officers)  will  continue to have the benefit of any rights or  indemnities
under any Operative  Agreement vested or relating to circumstances,  conditions,
acts or events prior to such Transfer.

SECTION 11.       REFUNDING AND CERTAIN OTHER MATTERS

      11.1       REFUNDING GENERALLY

      Subject to  Sections  11.2 and 11.4,  in the event that at any time Lessee
shall  have  given  written  notice to Owner  Participant,  Owner  Trustee,  and
Mortgagee that Lessee is requesting a voluntary  redemption of all, but not less
than all, of the outstanding  Equipment Notes (in compliance with the provisions
of Sections 2.11 and 2.12 of the Trust  Indenture) by Owner Trustee as part of a
refunding  transaction,  Owner Participant agrees to negotiate in good faith and
promptly  conclude an  agreement  with Lessee as to the terms of such  refunding
transaction  (including  the terms of any debt to be issued in  connection  with
such refunding  transaction and the  documentation  to be executed in connection
therewith),  and after Lessee and Owner Participant shall have concluded such an
agreement:

               11.1.1      REFUNDING CERTIFICATE

      Within ten Business Days after reaching such agreement,  Owner Participant
will deliver to Lessee a Refunding Certificate.  Within ten Business Days of its
receipt of the Refunding Certificate,  Lessee may demand a verification pursuant
to Section  3.2.1(d) of the Lease of the  information set forth in the Refunding
Certificate.  Upon the  acceptance by Lessee of the accuracy of the  information
set forth in the Refunding  Certificate  or the  determination  pursuant to such

<PAGE>

verification  procedures of the Refunding  Information,  the appropriate parties
will take the actions specified in Sections 11.1.2 through 11.1.7 below.

               11.1.2      FINANCING AGREEMENTS

      The appropriate parties will enter into appropriate  documentation  (which
may include an underwriting  agreement or similar private  placement  agreement)
with the institution or  institutions to be named therein  providing for (a) the
issuance and sale by Owner Trustee to such  institution or  institutions  on the
Refunding  Date of the New Debt and (b) the  application  of the proceeds of the
sale of the New  Debt to the  redemption  of all  such  Equipment  Notes  on the
Refunding Date. Lessee, acting on behalf of Owner Trustee,  shall give Mortgagee
at least 30 days'  revocable  prior  written  notice of the proposed date of the
optional redemption.

               11.1.3      LEASE AMENDMENTS

      As a condition  to the closing of the  refunding  transaction,  Lessee and
Owner Trustee will amend the Lease, as  contemplated by Section  3.2.1(b) of the
Lease,  to provide  that (a) Basic Rent in respect of the period  from and after
the  Refunding  Date shall be as provided in the Refunding  Information  and (b)
amounts payable in respect of Stipulated Loss Value and Termination  Value, from
and after the Refunding Date shall be as provided in the Refunding Information.

               11.1.4      SECURITY AGREEMENTS

      Owner  Trustee  will enter into an  agreement  to provide for the securing
thereunder of the New Debt in like manner as the Equipment  Notes and will enter
into  such  amendments  and  supplements  to the  Trust  Indenture  (or such new
indenture or other security agreement) and the other Operative Agreements as may
be necessary to effect such refunding.

               11.1.5      EXPENSES

      Whether or not such refunding transaction is consummated, Lessee shall pay
or reimburse all of the reasonable out-of-pocket expenses of all parties to such
refunding  transaction,  including,  without  limitation,  any  underwriting  or
placement fees and the reasonable fees and expenses of such parties' counsel and
any related loan or commitment fees.

               11.1.6      MAKE WHOLE AMOUNT

      At the closing of such refunding, Owner Trustee shall pay, upon receipt of
the same from Lessee (which Lessee shall pay as Supplemental Rent as a condition

<PAGE>

to the closing to the refunding  transaction),  to the Mortgagee for the account
of each Note Holder,  the Make-Whole Amount, if any, payable to such Note Holder
under Section 2.11 of the Trust Indenture.

               11.1.7      RETURN OF EQUIPMENT NOTES

      Subject to  compliance  by Owner  Trustee and Lessee  with all  applicable
terms and conditions for voluntary prepayment under the Trust Indenture and this
Agreement,  each Note Holder will transfer to Owner Trustee the Equipment  Notes
held by it for cancellation  (and Owner Trustee shall cancel the same),  against
receipt by such Note  Holder of the  then-outstanding  principal  amount of such
Equipment  Notes,  accrued and unpaid  interest and Make-Whole  Amount,  if any,
thereon, together with payment in full of all other amounts then payable to such
Note Holder and Mortgagee hereunder or under the Trust Indenture.

      11.2       LIMITATIONS ON OBLIGATION TO REFUND

      Notwithstanding the foregoing,  Owner Participant shall have no obligation
to proceed with any refunding transaction as contemplated by this Section 11:

      (a)   If  such  transaction  would have, or creates a material risk of, an
adverse tax consequence to Owner  Participant  unless Lessee agrees to indemnify
Owner Participant against such adverse tax consequence;

      (b)   Unless  Lessee  indemnifies  Owner  Participant  for any  liability,
obligation  (other than the obligation to pay principal and interest and related
payments  in  respect  of the New Debt),  cost or  expense  (including,  without
limitation,  reasonable  attorneys'  fees) related to or arising out of any such
refunding transaction;

      (c)   If a Lease Event of Default shall have occurred and be continuing;
or

      (d)   If there shall have  previously  been  consummated  three  refunding
transactions at Lessee's request pursuant to this Section 11.

      11.3       EXECUTION OF CERTAIN DOCUMENTS

      Lessee,  Owner  Participant,  Owner  Trustee and  Mortgagee  each agree to
execute any  document  necessary  or  advisable  to  implement  this  Section 11
(including,  without limitation, the execution, delivery and/or provision of any
appropriate   additional  or  modified  amendment,   representation,   warranty,

<PAGE>

certificate,  opinion or other  document  that may  reasonably  be  requested by
Lessee or any other person).

      11.4       ERISA

      Owner  Participant  shall  not  be  obligated  to  conclude  the  proposed
refunding  transaction  unless the agreements  utilized to effect such refunding
contain an agreement by the initial  holders of the New Debt  substantially  the
same as Section 7.5.2(b) of this Agreement,  except in the case of any refunding
transaction where the New Debt is sold in a public offering under the Securities
Act or a private  placement  intended for resale pursuant to Rule 144A under the
Securities  Act,  in which case the  holders of the New Debt shall be subject to
the restrictions relating to ERISA substantially the same as those applicable to
the purchasers of the Pass Through Certificates,  as described in the Prospectus
Supplement  relating  to the  initial  issuance  and  sale of the  Pass  Through
Certificates.

      11.5       CONSENT TO OPTIONAL REDEMPTIONS

      Each of Owner Participant,  Owner Trustee and Mortgagee agrees with Lessee
not to cause an optional  redemption  of the Equipment  Notes  without  Lessee's
consent except as set forth in Section 2.13 of the Trust Indenture.

SECTION 12.      SECTION 1110

      It  is  the  intention  of  each  of  Lessee,   Owner  Participant,   Loan
Participants,  the Note Holders (such intention being evidenced by each of their
acceptance  of an  Equipment  Note),  Owner  Trustee  and  Mortgagee  that Owner
Trustee,  as lessor under the Lease (and  Mortgagee as assignee of Owner Trustee
under the Trust Indenture), shall be entitled to the benefits of Section 1110 in
the event of a case under Chapter 11 of the Bankruptcy Code in which Lessee is a
debtor.

SECTION 13.      CHANGE OF CITIZENSHIP

      13.1       GENERALLY

      Without  prejudice  to  the   representations,   warranties  or  covenants
regarding the status of any party hereto as a Citizen of the United States:

      (a)   Each of Lessee,  First  Security,  WTC and Mortgagee  agrees that it
will,  immediately  upon obtaining  knowledge of any facts that would cast doubt
upon its  continuing  status as a Citizen of the United States and promptly upon
public  disclosure of negotiations in respect of any transaction  which would or

<PAGE>

might adversely affect such status,  notify in writing all parties hereto of all
relevant matters in connection therewith; and

      (b)   Owner  Participant agrees that, in the event its status is to change
or has changed as a Citizen of the United States,  or it makes public disclosure
of  circumstances as a result of which it believes that such status is likely to
change, it will notify all the other parties to this Participation  Agreement of
(i) such change in status promptly after obtaining Actual  Knowledge  thereof or
(ii) such belief as soon as practicable  after such public disclosure but in any
event within ten Business Days after such public disclosure.

      13.2       OWNER PARTICIPANT

      Owner  Participant  agrees,  solely for the benefit of Lessee and the Note
Holders that if,  during such time as the Aircraft is  registered  in the United
States,  (a) it shall not be a Citizen of the United States and (b) the Aircraft
shall be, or would therefore become,  ineligible for registration in the name of
Owner Trustee under the Act and regulations then applicable  thereunder (without
giving  consideration  to  Section  47.9 of the  FAA  Regulations  or any  other
provision  that may restrict  Lessee's use or operation of the  Aircraft),  then
Owner Participant shall as soon as is reasonably  practicable,  but in any event
within 30 days after obtaining  Actual  Knowledge of such  ineligibility  and of
such loss of citizenship,  (y) effect voting trust or other similar arrangements
(in which case any provisions contained in the Operative Agreements  restricting
Owner  Participant's  or Owner  Trustee's  ability to amend the Trust  Agreement
shall not apply to the extent necessary to permit the use of such a voting trust
or other  similar  arrangement)  or take any other action as may be necessary to
prevent any  deregistration  or maintain the United States  registration  of the
Aircraft or (z) transfer in accordance  with the terms of this Agreement all its
right,  title and  interest in and to this  Agreement,  the Trust Estate and the
Trust Agreement in accordance with Section 10.1.

      13.3       OWNER TRUSTEE

      Upon First Security giving any notice in accordance with Section  13.1(a),
Owner Trustee shall, subject to Section 9.1.1 of the Trust Agreement,  resign as
Owner  Trustee.  Upon its receipt of such  notice,  Owner  Participant  shall as
promptly  as  practicable  appoint a Citizen of the United  States as  successor
Owner Trustee pursuant to Section 9.1 of the Trust Agreement.

<PAGE>

      13.4       MORTGAGEE

      Upon WTC giving any notice in accordance with Section  13.1(a),  Mortgagee
shall  (if and so long as such  citizenship  is  necessary  under  the Act as in
effect at such time or, if it is not  necessary,  if and so long as  Mortgagee's
citizenship could have any adverse effect on Lessee, any Participant or any Note
Holder),  subject to Section  8.02 of the Trust  Indenture,  resign as Mortgagee
promptly upon its ceasing to be such a citizen.

SECTION 14.      CONCERNING OWNER TRUSTEE

      It is understood and agreed that, except as otherwise  expressly  provided
herein or in the  Trust  Agreement  or the Trust  Indenture,  Owner  Trustee  is
entering  into this  Agreement  solely in its capacity as trustee as provided in
the Trust Agreement and not in its individual capacity and in no case whatsoever
will it be liable  or  accountable  in its  individual  capacity  for any of the
statements,  representations,  warranties,  agreements or  obligations  of Owner
Trustee  hereunder,  or for any loss in respect thereof,  as to all of which the
parties agree to look solely to the Trust Estate; PROVIDED, that nothing in this
Section 14 shall be deemed to limit in scope or substance the personal liability
of First  Security (a) to Owner  Participant as expressly set forth in the Trust
Agreement,  (b) in respect of the representations,  warranties and agreements of
First Security expressly made as such herein or in any other Operative Agreement
to  which  it is a  party,  and  (c)  for  the  consequences  of its  own  gross
negligence,  willful  misconduct,  and, in  receiving,  handling or remitting of
funds only, its willful misconduct or simple negligence as a trustee.

SECTION 15.      MISCELLANEOUS

      15.1       AMENDMENTS

      No  provision  of this  Agreement  may be amended,  supplemented,  waived,
modified,  discharged,  terminated or otherwise  varied  orally,  but only by an
instrument  in  writing  that  specifically  identifies  the  provision  of this
Agreement  that it  purports to amend,  supplement,  waive,  modify,  discharge,
terminate  or  otherwise  vary and is  signed  by the  party  against  which the
enforcement  of the  amendment,  supplement,  waiver,  modification,  discharge,
termination  or variance is sought.  Each such  amendment,  supplement,  waiver,
modification,  discharge, termination or variance shall be effective only in the
specific  instance  and for the  specific  purpose  for  which it is  given.  No
provision  of  this  Agreement   shall  be  varied  or   contradicted   by  oral
communication, course of dealing or performance or other manner not set forth in

<PAGE>

an agreement,  document or instrument in writing and signed by the party against
which enforcement of the same is sought.

      15.2       SEVERABILITY

      If any provision hereof shall be held invalid, illegal or unenforceable in
any respect in any  jurisdiction,  then, to the extent permitted by Law, (a) all
other  provisions  hereof  shall  remain  in  full  force  and  effect  in  such
jurisdiction and (b) such invalidity,  illegality or unenforceability  shall not
affect the validity,  legality or  enforceability of such provision in any other
jurisdiction.  If,  however,  any Law pursuant to which such provisions are held
invalid,  illegal or unenforceable  may be waived,  such Law is hereby waived by
the parties hereto to the full extent permitted,  to the end that this Agreement
shall be deemed to be a valid and binding agreement in all respects, enforceable
in accordance with its terms.

      15.3       SURVIVAL

      The  indemnities  set forth herein shall survive the delivery or return of
the  Aircraft,  the  Transfer  of any  interest  of  Owner  Participant  in this
Agreement,  the  Trust  Estate  and the Trust  Agreement,  the  Transfer  of any
interest by any Note Holder of its  Equipment  Note and the  expiration or other
termination of this Agreement or any other Operative Agreement.

      15.4       REPRODUCTION OF DOCUMENTS

      This  Agreement,  all  annexes,  schedules  and  exhibits  hereto  and all
agreements,  instruments  and  documents  relating  hereto,  including,  without
limitation,  (a)  consents,  waivers and  modifications  that may  hereafter  be
executed  and (b)  financial  statements,  certificates  and  other  information
previously or hereafter furnished to any party hereto, may be reproduced by such
party  by  any  photographic,   photostatic,  microfilm,  micro-card,  miniature
photographic or other similar  process,  and such party may destroy any original
documents  so  reproduced.  Any  such  reproduction  shall be as  admissible  in
evidence as the  original  itself in any judicial or  administrative  proceeding
(whether  or  not  the  original  is  in  existence  and  whether  or  not  such
reproduction  was made by such party in the regular  course of business) and any
enlargement,  facsimile or further reproduction of such reproduction likewise is
admissible in evidence.

      15.5       COUNTERPARTS

      This Agreement and any amendments, waivers, consents or supplements hereto
may be executed in any number of counterparts (or upon separate  signature pages

<PAGE>

bound  together into one or more  counterparts),  each of which when so executed
shall  be  deemed  to be an  original,  and  all of  which  counterparts,  taken
together, shall constitute one and the same instrument.

      15.6       NO WAIVER

      No failure on the part of any party  hereto to  exercise,  and no delay by
any party hereto in exercising,  any of its respective rights, powers,  remedies
or  privileges  under this  Agreement or provided at Law, in equity or otherwise
shall impair,  prejudice or constitute a waiver of any such right, power, remedy
or  privilege  or be  construed  as a waiver of any  breach  hereof  or  default
hereunder or as an acquiescence therein nor shall any single or partial exercise
of any such right,  power,  remedy or  privilege  preclude  any other or further
exercise  thereof by it or the  exercise of any other  right,  power,  remedy or
privilege  by it. No notice to or demand on any party  hereto in any case shall,
unless otherwise required under this Agreement,  entitle such party to any other
or further  notice or demand in similar or other  circumstances  or constitute a
waiver of the rights of any party  hereto to any other or further  action in any
circumstances without notice or demand.

      15.7       NOTICES

      Unless  otherwise  expressly  permitted by the terms hereof,  all notices,
requests,  demands,  authorizations,  directions,  consents,  waivers  and other
communications  required or  permitted  to be made,  given,  furnished  or filed
hereunder shall be in writing (it being  understood that the  specification of a
writing in certain  instances and not in others does not imply an intention that
a writing is not required as to the latter),  shall refer  specifically  to this
Agreement  or other  applicable  Operative  Agreement,  and shall be  personally
delivered, sent by facsimile or telecommunication  transmission (which in either
case  provides  written  confirmation  to the sender of its  delivery),  sent by
registered mail or certified mail, return receipt requested, postage prepaid, or
sent by overnight courier service,  in each case to the respective  address,  or
facsimile  number  set  forth for such  party in  Schedule  1, or to such  other
address, facsimile or other number as each party hereto may hereafter specify by
notice  to  the  other  parties  hereto.  Each  such  notice,  request,  demand,
authorization,  direction,  consent,  waiver  or  other  communication  shall be
effective when received or, if made, given,  furnished or filed (a) by facsimile
or  telecommunication  transmission,  when  confirmed,  or (b) by  registered or
certified mail, three Business Days after being deposited,  properly  addressed,
with the U.S. Postal Service.

<PAGE>

      15.8       GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE

      (A)   THIS  AGREEMENT SHALL IN ALL RESPECTS BE GOVERNED BY THE LAWS OF THE
STATE  OF  NEW  YORK,  INCLUDING  ALL  MATTERS  OF  CONSTRUCTION,  VALIDITY  AND
PERFORMANCE. THIS AGREEMENT IS BEING DELIVERED IN THE STATE OF NEW YORK.

      (B)   EACH  PARTY HERETO HEREBY  IRREVOCABLY  AGREES,  ACCEPTS AND SUBMITS
ITSELF TO THE NON-EXCLUSIVE  JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK
IN THE CITY AND  COUNTY OF NEW YORK AND OF THE UNITED  STATES  FOR THE  SOUTHERN
DISTRICT OF NEW YORK,  IN CONNECTION  WITH ANY LEGAL ACTION,  SUIT OR PROCEEDING
WITH RESPECT TO ANY MATTER  RELATING TO OR ARISING OUT OF OR IN CONNECTION  WITH
THIS AGREEMENT.

      (C)   EACH  PARTY  HERETO  HEREBY  IRREVOCABLY  CONSENTS AND AGREES TO THE
SERVICE OF ANY AND ALL LEGAL PROCESS,  SUMMONS,  NOTICES AND DOCUMENTS OF ANY OF
THE AFOREMENTIONED  COURTS IN ANY SUCH SUIT, ACTION OR PROCEEDING MAY BE MADE BY
MAILING COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID,  AT THE
ADDRESS SET FORTH PURSUANT TO SECTION 15.7. EACH PARTY HERETO HEREBY AGREES THAT
SERVICE  UPON IT, OR ANY OF ITS  AGENTS,  IN EACH CASE IN  ACCORDANCE  WITH THIS
SECTION 15.8(C), SHALL CONSTITUTE VALID AND EFFECTIVE PERSONAL SERVICE UPON SUCH
PARTY, AND EACH PARTY HERETO HEREBY AGREES THAT THE FAILURE OF ANY OF ITS AGENTS
TO GIVE ANY NOTICE OF SUCH  SERVICE TO ANY SUCH PARTY SHALL NOT IMPAIR OR AFFECT
IN ANY WAY THE VALIDITY OF SUCH  SERVICE ON SUCH PARTY OR ANY JUDGMENT  RENDERED
IN ANY ACTION OR PROCEEDING BASED THEREON.

      (D)   EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE EXTENT PERMITTED
BY APPLICABLE LAW, AND AGREES NOT TO ASSERT, BY WAY OF MOTION, AS A DEFENSE,  OR
OTHERWISE,  IN ANY LEGAL ACTION OR  PROCEEDING  BROUGHT  HEREUNDER IN ANY OF THE
ABOVE-NAMED COURTS, THAT SUCH ACTION OR PROCEEDING IS BROUGHT IN AN INCONVENIENT
FORUM,  THAT  VENUE  FOR THE  ACTION  OR  PROCEEDING  IS  IMPROPER  OR THAT THIS
AGREEMENT  OR ANY OTHER  OPERATIVE  AGREEMENT  MAY NOT BE ENFORCED IN OR BY SUCH
COURTS.

      (E) EACH PARTY HERETO HEREBY WAIVES ITS RESPECTIVE  RIGHTS TO A JURY TRIAL
OF ANY CLAIM OR CAUSE OF ACTION IN ANY COURT IN ANY  JURISDICTION  BASED UPON OR
ARISING OUT OF OR RELATING TO THIS AGREEMENT.

      15.9       THIRD-PARTY BENEFICIARY

      This Agreement is not intended to, and shall not, provide any person not a
party hereto (other than the Liquidity  Providers,  The Liquidity  Guarantor the

<PAGE>

Escrow  Agent and the Paying  Agent,  each of which is an  intended  third party
beneficiary  with respect to the  provisions  of Section 9.1) with any rights of
any nature  whatsoever  against  any of the  parties  hereto and no person not a
party hereto (other than the Liquidity  Providers,  The Liquidity  Guarantor the
Escrow Agent and the Paying  Agent,  with respect to the  provisions  of Section
9.1) shall have any right, power or privilege in respect of any party hereto, or
have any benefit or interest, arising out of this Agreement.

      15.10      ENTIRE AGREEMENT

      This Agreement, together with the other Operative Agreements, on and as of
the date hereof,  constitutes  the entire  agreement of the parties  hereto with
respect  to  the  subject  matter  hereof,  and  all  prior  or  contemporaneous
understandings or agreements,  whether written or oral, among any of the parties
hereto  with  respect to such  subject  matter are  hereby  superseded  in their
entireties.

      15.11      FURTHER ASSURANCES

      Each party hereto shall execute, acknowledge and deliver or shall cause to
be  executed,   acknowledged  and  delivered,   all  such  further   agreements,
instruments,  certificates or documents,  and shall do and cause to be done such
further acts and things, in any case, as any other party hereto shall reasonably
request  in  connection  with  the  administration  of,  or to  carry  out  more
effectively  the  purposes  of, or to better  assure and confirm into such other
party the rights and benefits to be provided  under this Agreement and the other
Operative Agreements.

                    [This space intentionally left blank]

<PAGE>

      IN WITNESS  WHEREOF,  each of the parties  has caused  this  Participation
Agreement to be duly  executed and  delivered as of the day and year first above
written.

                                          CONTINENTAL AIRLINES, INC.,
                                            Lessee

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

                                          [____________,]
                                            Owner Participant

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

                                          FIRST SECURITY BANK, NATIONAL
                                          ASSOCIATION,
                                            not  in  its  individual   capacity,
                                            except as expressly provided herein,
                                            but solely as Owner Trustee

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

<PAGE>

                                          WILMINGTON TRUST COMPANY,
                                            not in its individual capacity,
                                            except as expressly provided
                                            herein, but solely as Mortgagee

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

                                          WILMINGTON TRUST  COMPANY,  not in its
                                             individual   capacity,   except  as
                                             expressly   provided  herein,   but
                                             solely  as  Pass  Through   Trustee
                                             under   the  Pass   Through   Trust
                                             Agreement   for   the   Continental
                                             Airlines   Pass   Through    Trust,
                                             2000-1A-1-0

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

<PAGE>

                                          WILMINGTON TRUST  COMPANY,  not in its
                                             individual   capacity,   except  as
                                             expressly   provided  herein,   but
                                             solely  as  Pass  Through   Trustee
                                             under   the  Pass   Through   Trust
                                             Agreement   for   the   Continental
                                             Airlines   Pass   Through    Trust,
                                             2000-1A-2-0

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

                                          WILMINGTON TRUST  COMPANY,  not in its
                                             individual   capacity,   except  as
                                             expressly   provided  herein,   but
                                             solely  as  Pass  Through   Trustee
                                             under   the  Pass   Through   Trust
                                             Agreement   for   the   Continental
                                             Airlines   Pass   Through    Trust,
                                             2000-1B-0

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

<PAGE>

                                          WILMINGTON TRUST  COMPANY,  not in its
                                             individual   capacity,   except  as
                                             expressly   provided  herein,   but
                                             solely  as  Pass  Through   Trustee
                                             under   the  Pass   Through   Trust
                                             Agreement   for   the   Continental
                                             Airlines   Pass   Through    Trust,
                                             2000-1C-1-0

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

                                          WILMINGTON TRUST  COMPANY,  not in its
                                             individual   capacity,   except  as
                                             expressly   provided  herein,   but
                                             solely  as  Pass  Through   Trustee
                                             under   the  Pass   Through   Trust
                                             Agreement   for   the   Continental
                                             Airlines   Pass   Through    Trust,
                                             2000-1C-2-0

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

                                          WILMINGTON TRUST  COMPANY,  not in its
                                             individual   capacity,   except  as
                                             expressly   provided  herein,   but
                                             solely as Subordination Agent

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

<PAGE>

                                   ANNEX A

DEFINITIONS

GENERAL PROVISIONS

      (a) In each Operative  Agreement,  unless otherwise expressly provided,  a
reference to:

            (i) each of "Lessee," "Lessor," "Loan Participant," "Owner Trustee,"
      "Owner  Participant,"  "Mortgagee,"  "Note  Holder"  or any  other  person
      includes,  without prejudice to the provisions of any Operative Agreement,
      any  successor in interest to it and any permitted  transferee,  permitted
      purchaser or permitted assignee of it;

            (ii) words  importing  the plural  include  the  singular  and words
      importing the singular include the plural;

            (iii) any agreement,  instrument or document, or any annex, schedule
      or exhibit thereto, or any other part thereof, includes, without prejudice
      to the provisions of any Operative Agreement,  that agreement,  instrument
      or document,  or annex,  schedule or exhibit,  or part,  respectively,  as
      amended, modified or supplemented from time to time in accordance with its
      terms and in accordance with the Operative Agreements,  and any agreement,
      instrument  or  document  entered  into  in  substitution  or  replacement
      therefor (including,  without limitation, in the case of each Pass Through
      Trust  Agreement,  the "Related Pass Through  Trust  Agreement" as defined
      therein);

            (iv)  any  provision  of any Law  includes  any  such  provision  as
      amended, modified, supplemented,  substituted, reissued or reenacted prior
      to the Delivery Date, and thereafter from time to time;

            (v) the words  "Agreement,"  "this Agreement,"  "hereby,"  "herein,"
      "hereto,"  "hereof" and  "hereunder" and words of similar import when used
      in any Operative  Agreement  refer to such Operative  Agreement as a whole
      and not to any particular provision of such Operative Agreement;

            (vi)  the  words  "including,"   "including,   without  limitation,"
      "including,  but not limited  to," and terms or phrases of similar  import

<PAGE>

      when used in any Operative Agreement, with respect to any matter or thing,
      mean including, without limitation, such matter or thing; and

            (vii) a "Section,"  an  "Exhibit," an "Annex" or a "Schedule" in any
      Operative Agreement,  or in any annex thereto, is a reference to a section
      of, or an exhibit,  an annex or a schedule to, such Operative Agreement or
      such annex, respectively.

      (b)   Each  exhibit,  annex and  schedule to each  Operative  Agreement is
incorporated in, and shall be deemed to be a part of, such Operative Agreement.

      (c)   Unless  otherwise  defined or specified in any Operative  Agreement,
all   accounting   terms  therein   shall  be  construed   and  all   accounting
determinations thereunder shall be made in accordance with GAAP.

      (d)   Headings  used in any Operative  Agreement are for convenience  only
and  shall  not  in any  way  affect  the  construction  of,  or be  taken  into
consideration in interpreting, such Operative Agreement.

      (e)   For  purposes  of  each  Operative  Agreement,  the  occurrence  and
continuance of a Lease Default or Lease Event of Default  referred to in Section
14.5  shall not be deemed to  prohibit  the  Lessee  from  taking  any action or
exercising  any right that is  conditioned  on no Lease Event of Default,  Lease
Default or Special  Default  having  occurred  and be  continuing  if such Lease
Default or Lease Event of Default consists of the institution of  reorganization
proceedings  with respect to Lessee under Chapter 11 of the Bankruptcy  Code and
the trustee or debtor-in-possession in such proceedings shall have (i) agreed to
perform its  obligations  under the Lease with the  approval  of the  applicable
court and  thereafter  shall have  continued  to  perform  such  obligations  in
accordance  with  Section  1110 or (ii)  shall have  assumed  the Lease with the
approval of the relevant  court and  thereafter  shall have continued to perform
its obligations under the Lease.

DEFINED TERMS

      "ACT" means part A of subtitle VII of title 49, United States Code.

      "ACTUAL  KNOWLEDGE" means (a) as it applies to Owner Trustee or Mortgagee,
as the case may be, actual  knowledge of a responsible  officer in the Corporate
Trust  Department or the Corporate  Trust  Office,  respectively,  and (b) as it
applies to Owner Participant or Lessee,  actual knowledge of a Vice President or

<PAGE>

more senior officer of Owner Participant or Lessee,  respectively,  or any other
officer of Owner Participant or Lessee, respectively,  having responsibility for
the transactions contemplated by the Operative Agreements; PROVIDED that each of
Lessee,  Owner Participant,  Owner Trustee and Mortgagee shall be deemed to have
"Actual Knowledge" of any matter as to which it has received notice from Lessee,
Owner  Participant,  any Note Holder,  Owner Trustee or  Mortgagee,  such notice
having been given pursuant to Section 15.7 of the Participation Agreement.

      "ADDITIONAL INSURED" is defined in Section D of Annex D to the Lease.

      "ADVERSE CHANGE IN TAX LAW" means (a) for Lessee, a Change in Tax Law that
Lessee regards as one that could adversely  affect the economic  consequences of
the  transactions  contemplated  by the  Participation  Agreement  and the other
Operative   Agreements   that  are  anticipated  by  Lessee  or  (b)  for  Owner
Participant,  any  Change  in Tax Law that  would  adversely  affect  any of the
following tax assumptions:

            (i) For  federal  income  tax  purposes,  the Lease will be a "true"
      lease for  purposes of the Code and Owner  Participant  will be treated as
      the  owner of the  Aircraft  and  Lessee  will be  treated  as the  lessee
      thereof;

            (ii) For federal  income tax  purposes,  Owner  Participant  will be
      entitled to  depreciation  or cost  recovery  deductions  with  respect to
      Lessor' s Cost of the Aircraft; and

            (iii) For federal  income tax purposes,  Owner  Participant  will be
      entitled to deductions for interest payments on the Equipment Notes.

      "AFFILIATE"  means, with respect to any person,  any other person directly
or  indirectly  controlling,  controlled  by or under  common  control with such
person. For purposes of this definition,  "control" means the power, directly or
indirectly,  to direct or cause the direction of the  management and policies of
such person,  whether through the ownership of voting  securities or by contract
or otherwise and "controlling,"  "controlled by" and "under common control with"
have correlative meanings.

      "AIRCRAFT" means, collectively, the Airframe and Engines.

      "AIRCRAFT  BILL OF SALE" means the full warranty bill of sale covering the
Aircraft  delivered by Airframe  Manufacturer  to Owner  Trustee on the Delivery
Date.

<PAGE>

      "AIRCRAFT  DOCUMENTS" means all technical data, manuals and log books, and
all inspection,  modification  and overhaul  records and other service,  repair,
maintenance and technical  records that are required by the FAA (or the relevant
Aviation  Authority),  to be maintained with respect to the Aircraft,  Airframe,
Engines or Parts; and such term shall include all additions, renewals, revisions
and replacements of any such materials from time to time made, or required to be
made, by the FAA (or other Aviation Authority) regulations,  and in each case in
whatever form and by whatever means or medium  (including,  without  limitation,
microfiche,  microfilm, paper or computer disk) such materials may be maintained
or retained by or on behalf of Lessee  (PROVIDED,  that all such materials shall
be maintained in the English language).

      "AIRFRAME" means (a) the aircraft  (excluding Engines or engines from time
to time installed thereon)  manufactured by Airframe Manufacturer and identified
by Airframe  Manufacturer's model number,  United States registration number and
Airframe  Manufacturer's  serial number set forth in Lease  Supplement No. 1 and
any Replacement  Airframe and (b) any and all Parts incorporated or installed in
or attached or appurtenant to such airframe,  and any and all Parts removed from
such  airframe,  unless  title to such  Parts  shall  not be vested in Lessor in
accordance  with Section 8.1 and Annex C of the Lease.  Upon  substitution  of a
Replacement  Airframe under and in accordance with the Lease,  such  Replacement
Airframe  shall become  subject to the Lease and shall be the "Airframe" for all
purposes  of the Lease and the other  Operative  Agreements  and  thereupon  the
Airframe  for which the  substitution  is made shall no longer be subject to the
Lease, and such replaced Airframe shall cease to be the "Airframe."

      "AIRFRAME MANUFACTURER" means The Boeing Company, a Delaware corporation.

      "AMORTIZATION AMOUNT" means, with respect to any Equipment Note, as of any
Payment Date,  the amount  determined by  multiplying  the  percentage set forth
opposite such Payment Date on the  Amortization  Schedule by the Original Amount
of such Equipment Note.

      "AMORTIZATION  SCHEDULE"  means,  with respect to each Equipment Note, the
amortization schedule for such Equipment Note delivered pursuant to Section 2.02
of the Trust Indenture.

      "APPLICABLE  PASS THROUGH  TRUST" means each of the separate  pass through
trusts created under the Applicable Pass Through Trust Agreements.

<PAGE>

      "APPLICABLE  PASS THROUGH TRUST AGREEMENT" means each of the separate Pass
Through  Trust  Agreements  by and  between  the Lessee and an  Applicable  Pass
Through Trustee.

      "APPLICABLE  PASS THROUGH TRUSTEE" means each Pass Through Trustee that is
a party to the Participation Agreement.

      "APPRAISER"  means  a  firm  of  internationally  recognized,  independent
aircraft appraisers.

      "AVERAGE LIFE DATE" for any Equipment Note shall be the date which follows
the time of  determination  by a period equal to the Remaining  Weighted Average
Life of such Equipment Note.  "Remaining  Weighted Average Life" on a given date
with  respect  to any  Equipment  Note  shall be the number of days equal to the
quotient  obtained by dividing (a) the sum of each of the  products  obtained by
multiplying (i) the amount of each then remaining scheduled payment of principal
of such  Equipment  Note by (ii) the  number  of days  from and  including  such
determination  date to but excluding the date on which such payment of principal
is scheduled to be made, by (b) the then  outstanding  principal  amount of such
Equipment Note.

      "AVIATION AUTHORITY" means the FAA or, if the Aircraft is permitted to be,
and is, registered with any other Government Entity under and in accordance with
Section 7.1.2 of the Lease, such other Government Entity.

      "BANKRUPTCY  CODE" means the United States  Bankruptcy Code, 11 U.S.C. ss.
101 eT SEq.

      "BASE  LEASE  TERM"  means  the  period  beginning  on and  including  the
Commencement  Date and ending on the Scheduled  Expiration Date, or such earlier
date on which the Term  terminates  in  accordance  with the  provisions  of the
Lease.

      "BASIC  PASS  THROUGH  TRUST  AGREEMENT"  means  the  Pass  Through  Trust
Agreement,  dated September 25, 1997,  between Lessee and Pass Through  Trustee,
but does not include any Trust Supplement.

      "BASIC RENT" means the rent  payable for the Aircraft  pursuant to Section
3.2.1(a) of the Lease.

      "BENEFICIAL  OWNER"  when used in relation  to an  Equipment  Note means a
Person  that,  by reason of  direct  ownership,  contract,  share  ownership  or
otherwise,  has the right to receive or  participate  in receiving,  directly or
indirectly,  payments of principal,  interest or Make-Whole Amount in respect of
such  Equipment  Note;  provided  that a  Person  shall  not be  deemed  to be a

<PAGE>

Beneficial  Owner of an Equipment  Note solely  because  another Person in which
such a Person owns  common  stock or other  equity  securities  is a  registered
holder or  Beneficial  Owner of such  Equipment  Note  unless  such Person is an
Affiliate of such other Person.

      "BFE"   means   all   appliances,   parts,   instruments,   appurtenances,
accessories, furnishings or other equipment of whatever nature sold by Lessee to
Owner Trustee pursuant to the BFE Bill of Sale.

      "BFE AMOUNT"  means the amount paid by Owner Trustee to Lessee to purchase
the BFE, and is designated  by Dollar amount in Schedule 3 to the  Participation
Agreement.

      "BFE BILL OF SALE" means the full warranty bill of sale executed by Lessee
in favor of Owner Trustee, dated the Delivery Date, identifying and covering the
BFE.

      "BILLS OF SALE" means the FAA Bill of Sale,  the Aircraft Bill of Sale and
the BFE Bill of Sale.

      "BUSINESS DAY" means any day other than a Saturday, Sunday or other day on
which  commercial  banks are authorized or required by law to close in New York,
New York, Houston, Texas, Wilmington, Delaware, or Salt Lake City, Utah.

      "CASH  EQUIVALENTS"  means the  following  securities  (which shall mature
within 90 days of the date of purchase  thereof):  (a) direct obligations of the
U.S. Government;  (b) obligations fully guaranteed by the U.S.  Government;  (c)
certificates of deposit issued by, or bankers'  acceptances of, or time deposits
or a deposit account with,  Owner Trustee,  Mortgagee or any bank, trust company
or national banking association incorporated or doing business under the laws of
the United States or any state thereof having a combined capital and surplus and
retained  earnings of at least  $500,000,000  and having a rate of "C" or better
from the Thomson BankWatch Service;  or (d) commercial paper of any issuer doing
business under the laws of the United States or one of the states thereof and in
each case having a rating assigned to such commercial paper by Standard & Poor's
or Moody's equal to A1 or higher.

      "CHANGE IN TAX LAW" means any amendment, modification,  addition or change
in or to the  provisions  of the  Code,  any other  federal  tax  statutes,  the
Treasury  Regulations  promulgated  thereunder,  the  Internal  Revenue  Service
Revenue  Rulings,   Revenue  Procedures  or  other  administrative  or  judicial
interpretations  of the Code or the federal tax  statutes  that  affects the tax
assumptions set forth in the Tax Indemnity  Agreement or otherwise affects Owner

<PAGE>

Participant's  anticipated  Net  Economic  Return  (other  than a change  in the
alternative  minimum tax or other change that results in Owner Participant being
subject to  alternative  minimum  tax or unable to fully  utilize  tax  benefits
because of its particular tax situation).

      "CITIZEN OF THE UNITED STATES" is defined in Section  40102(a)(15)  of the
Act and in the FAA Regulations.

      "CLOSING"  means  the  closing  of the  transactions  contemplated  by the
Participation Agreement on the Delivery Date.

      "CODE" means the Internal Revenue Code of 1986, as amended; PROVIDED, that
when used in relation to a Plan,  "Code" shall mean the Internal Revenue Code of
1986 and any  regulations and rulings issued  thereunder,  all as amended and in
effect from time to time.

      "COMMENCEMENT DATE" is defined in Schedule 1 to the Lease.

      "COMMITMENT"  means, for any Participant,  the amount of its participation
in the payment of Lessor's Cost.

      "COMMITMENT   TERMINATION   DATE"  is  defined   in   Schedule  3  to  the
Participation Agreement.

      "CONSENT  AND  AGREEMENT"  means the  Manufacturer  Consent and  Agreement
[________],  dated as of even date with the Participation Agreement, of Airframe
Manufacturer.

      "CONTINUOUS  STAY  PERIOD"  is  defined  in  Section  4.04(a) of the Trust
Indenture.

      "CORPORATE  TRUST  DEPARTMENT"  or  "TRUST  OFFICE"  means  the  principal
corporate  trust  office  of Owner  Trustee  located  from time to time at Owner
Trustee's  address for notices under the  Participation  Agreement or such other
office at which Owner  Trustee's  corporate trust business shall be administered
which  Owner  Trustee  shall  have  specified  by notice in  writing  to Lessee,
Mortgagee and each Note Holder.

      "CORPORATE TRUST OFFICE" means the principal  office of Mortgagee  located
at  Mortgagee's  address for notices under the  Participation  Agreement or such
other office at which Mortgagee's corporate trust business shall be administered
which  Mortgagee  shall have  specified  by notice in  writing to Lessee,  Owner
Trustee and each Note Holder.

      "CRAF" means the Civil Reserve Air Fleet Program  established  pursuant to
10 U.S.C. ss. 9511-13 or any similar substitute program.

<PAGE>

      "DEBT" means any  liability for borrowed  money,  or any liability for the
payment  of money in  connection  with any letter of credit  transaction  or any
other liabilities  evidenced or to be evidenced by bonds,  debentures,  notes or
other similar instruments.

      "DEBT RATE"  means,  with  respect to (i) any  Series,  the rate per annum
specified for such Series under the heading "Interest Rate" in Schedule I to the
Trust  Indenture  and (ii) any other  purpose,  with respect to any period,  the
weighted  average  interest  rate per  annum  during  such  period  borne by the
outstanding  Equipment Notes,  excluding any interest payable at the Payment Due
Rate.

      "DEFAULT"  means any event or condition  that with the giving of notice or
the lapse of time or both would become an Event of Default.

      "DELAYED  DELIVERY  DATE" means a delayed  Delivery  Date notified to each
Participant,  Owner Trustee and  Mortgagee by Lessee  pursuant to Section 4.3 of
the Participation Agreement, which delayed Delivery Date shall be a Business Day
not later than the Commitment Termination Date.

      "DELIVERY DATE" means the Business Day specified in Lease Supplement No. 1
as the date on which,  among other  things,  the  Aircraft is  delivered  to and
accepted by Lessee under the Lease and the Closing occurs.

      "DEPOSIT  AGREEMENT" means each of the five Deposit Agreements between the
Depositary and the Escrow Agent,  dated as of the Issuance  Date,  each of which
relates to one of the Pass Through  Trusts,  PROVIDED  that, for purposes of any
obligation  of  Lessee,   no  amendment,   modification  or  supplement  to,  or
substitution  or replacement  of, any such Deposit  Agreement shall be effective
unless consented to by Lessee.

      "DEPOSITARY"  means  Credit  Suisse  First  Boston,  New York  branch,  as
Depositary under each Deposit Agreement.

      "DOLLARS," "UNITED STATES DOLLARS" or "$" means the lawful currency of the
United States.

      "DOT" means the Department of  Transportation  of the United States or any
Government   Entity   succeeding  to  the   functions  of  such   Department  of
Transportation.

      "ELIGIBLE  ACCOUNT"  means an account  established by and with an Eligible
Institution at the request of the Mortgagee,  which institution  agrees, for all

<PAGE>

purposes of the UCC including Article 8 thereof,  that (a) such account shall be
a  "securities  account"  (as  defined  in  Section  8-501 of the UCC),  (b) all
property  (other  than  cash)  credited  to such  account  shall be treated as a
"financial asset" (as defined in Section 8-102(9) of the UCC), (c) the Mortgagee
shall be the "entitlement holder" (as defined in Section 8-102(7) of the UCC) in
respect of such account,  (d) it will comply with all entitlement  orders issued
by the Mortgagee to the exclusion of the Lessee and the Owner  Trustee,  and (e)
the "securities  intermediary  jurisdiction" (under Section 8-110(e) of the UCC)
shall be the State of New York.

      "ELIGIBLE  INSTITUTION"  means  the  corporate  trust  department  of  (a)
Wilmington  Trust  Company,  acting  solely  in its  capacity  as a  "securities
intermediary"  (as defined in Section 8-102(14) of the UCC), or (b) a depository
institution  organized under the laws of the United States of America or any one
of the states  thereof or the  District  of  Columbia  (or any U.S.  branch of a
foreign  bank),  which has a long-term  unsecured  debt rating from  Moody's and
Standard & Poor's of at least A-3 or its equivalent.

      "ENFORCEMENT DATE" is defined in Section 4.03 of the Trust Indenture.

      "ENGINE" means (a) each of the engines manufactured by Engine Manufacturer
and identified by Engine  Manufacturer's model number and Engine  Manufacturer's
serial number set forth in Lease  Supplement No. 1 and  originally  installed on
the  Airframe on delivery  thereof  pursuant to the Lease,  and any  Replacement
Engine,  in any case whether or not from time to time installed on such Airframe
or  installed  on any  other  airframe  or  aircraft,  and (b) any and all Parts
incorporated or installed in or attached or appurtenant to such engine,  and any
and all Parts removed from such engine,  unless title to such Parts shall not be
vested in Lessor in accordance  with Section 8.1 and Annex C of the Lease.  Upon
substitution  of a Replacement  Engine under and in  accordance  with the Lease,
such  Replacement  Engine  shall  become  subject  to the  Lease and shall be an
"Engine" for all purposes of the Lease and the other  Operative  Agreements  and
thereupon  the  Engine  for which the  substitution  is made  shall no longer be
subject to the Lease, and such replaced Engine shall cease to be an "Engine."

      "ENGINE CONSENT AND AGREEMENT" means the Engine  Manufacturer  Consent and
Agreement [________] dated as of even date with the Participation  Agreement, of
Engine Manufacturer.

      "ENGINE MANUFACTURER" means [CFM International,  a Delaware  corporation.]
[General  Electric  Company,  a  New  York  corporation.]  [Rolls-Royce  plc,  a
corporation organized under the laws of England.]

<PAGE>

      "EQUIPMENT  NOTE  REGISTER"  is  defined  in  Section  2.07  of the  Trust
Indenture.

      "EQUIPMENT  NOTES" means and includes any equipment notes issued under the
Trust  Indenture in the form specified in Section 2.01 thereof (as such form may
be varied  pursuant to the terms of the Trust  Indenture) and any Equipment Note
issued under the Trust Indenture in exchange for or replacement of any Equipment
Note.

      "ERISA" means the Employee  Retirement Income Security Act of 1974 and any
regulations and rulings issued thereunder all as amended and in effect from time
to time.

      "ESCROW AGENT" means First Security Bank, National Association,  as Escrow
Agent under each of the Escrow Agreements.

      "ESCROW  AGREEMENT"  means  each  of the  five  Escrow  and  Paying  Agent
Agreements, among the Escrow Agent, the Paying Agent, certain initial purchasers
of the Pass  Through  Certificates  named  therein  and one of the Pass  Through
Trustees,  dated as of the Issuance  Date,  each of which  relates to one of the
Pass Through Trusts, PROVIDED that, for purposes of any obligation of Lessee, no
amendment, modification or supplement to, or substitution or replacement of, any
such Escrow Agreement shall be effective unless consented to by Lessee.

      "EVENT OF DEFAULT" is defined in Section 4.02 of the Trust Indenture.

      "EVENT OF LOSS"  means,  with  respect to the  Aircraft,  Airframe  or any
Engine, any of the following circumstances, conditions or events with respect to
such property, for any reason whatsoever:

      (a)   the  destruction  of such property,  damage to such property  beyond
            economic repair or rendition of such property  permanently unfit for
            normal use by Lessee;

      (b)   the actual or constructive total loss of such property or any damage
            to such  property,  or requisition of title or use of such property,
            which  results  in an  insurance  settlement  with  respect  to such
            property on the basis of a total loss or constructive or compromised
            total loss;

      (c)   any theft,  hijacking or disappearance of such property for a period
            of 180 consecutive days or more;

<PAGE>

      (d)   any  seizure,  condemnation,  confiscation,  taking  or  requisition
            (including loss of title) of such property by any Government  Entity
            or purported Government Entity (other than a requisition of use by a
            Permitted  Government Entity) for a period exceeding 180 consecutive
            days or, if earlier, at the end of the Term;

      (e)   any seizure,  condemnation,  confiscation,  taking or requisition of
            use  of  such  property  by any  Permitted  Government  Entity  that
            continues  until  the 30th  day  after  the  last  day of the  Term,
            PROVIDED that no such Event of Loss shall exist if Lessor shall have
            elected  not to treat  such  event as an Event of Loss  pursuant  to
            Section 10.6 of the Lease; and

      (f)   as a result of any law, rule,  regulation,  order or other action by
            the Aviation Authority or by any Government Entity of the government
            of registry of the Aircraft or by any  Government  Entity  otherwise
            having  jurisdiction over the operation or use of the Aircraft,  the
            use of such  property in the normal  course of Lessee's  business of
            passenger  air  transportation  is  prohibited  for a period  of 180
            consecutive days, unless Lessee, prior to the expiration of such 180
            day period,  shall have undertaken and shall be diligently  carrying
            forward  such steps as may be  necessary  or desirable to permit the
            normal use of such property by Lessee,  but in any event if such use
            shall have been  prohibited for a period of two  consecutive  years,
            provided  that no Event of Loss shall be deemed to have  occurred if
            such  prohibition  has been applicable to Lessee's entire U.S. fleet
            of  such  property  and  Lessee,  prior  to the  expiration  of such
            two-year  period,  shall  have  conformed  at least one unit of such
            property  in its fleet to the  requirements  of any such law,  rule,
            regulation,  order or other action and commenced regular  commercial
            use of the  same  in  such  jurisdiction  and  shall  be  diligently
            carrying  forward,  in a manner which does not discriminate  against
            such  property  in so  conforming  such  property,  steps  which are
            necessary  or  desirable to permit the normal use of the Aircraft by
            Lessee,  but in any event if such use shall have been prohibited for
            a period  of three  years or such  use  shall be  prohibited  at the
            expiration of the Term.

      "EXCLUDED PAYMENTS" means (i) indemnity payments paid or payable by Lessee
to or in  respect  of Owner  Participant,  or Owner  Trustee  in its  individual
capacity,  their  respective  Affiliates,  successors and permitted  assigns and
their directors,  officers, employees, servants and agents pursuant to Section 9

<PAGE>

of the Participation  Agreement or any  corresponding  payments under the Lease,
(ii)  proceeds  of public  liability  insurance  paid or  payable as a result of
insurance  claims made, or losses  suffered,  by Owner Trustee in its individual
capacity or by Owner Participant,  that are payable directly to Owner Trustee in
its  individual  capacity,  or Owner  Participant,  respectively,  for their own
account,  (iii) proceeds of insurance maintained with respect to the Aircraft by
Owner  Participant  or any  Affiliate  thereof  for its or their own  account or
benefit (whether  directly or through Owner Trustee) and permitted under Section
11.2 of the Lease, (iv) all payments required to be made under the Tax Indemnity
Agreement by Lessee  whether or not  denominated as  Supplemental  Rent, (v) any
Transaction  Expenses paid or payable by the Lessee to the Owner Trustee (to the
extent for its sole benefit) or the Owner  Participant  pursuant to the Lease or
the Participation Agreement, (vi) any amount payable to the Owner Participant by
any transferee as the purchase price of the Owner Participant's  interest in the
Trust Estate,  (vii) any interest that pursuant to the Operative  Agreements may
from time to time accrue in respect of any of the amounts  described  in clauses
(i) through  (vi)  above,  (viii) any right to enforce the payment of any amount
described in clauses (i) through (vii) above (PROVIDED, that the rights referred
to in this  clause  (viii)  shall not be deemed to include  the  exercise of any
remedies  provided  for in the Lease  other  than the right to sue for  specific
performance  of any  covenant  to make such  payment  or to sue for  damages  in
respect of the breach of any such  covenant)  and (ix) any right to exercise any
election or option or make any decision or determination,  or to give or receive
any notice,  consent, waiver or approval, or to take any other action in respect
of, but in each case, only to the extent relating to, any Excluded Payments.

      "EXPENSES" means any and all liabilities,  obligations,  losses,  damages,
settlements,   penalties,   claims,   actions,   suits,   costs,   expenses  and
disbursements (including, without limitation,  reasonable fees and disbursements
of legal counsel,  accountants,  appraisers,  inspectors or other professionals,
and costs of investigation).

      "FAA" means the Federal  Aviation  Administration  of the United States or
any  Government  Entity  succeeding  to the  functions of such Federal  Aviation
Administration.

      "FAA BILL OF SALE" means a bill of sale for the Aircraft on AC Form 8050-2
(or such other form as may be approved by the FAA) delivered to Owner Trustee on
the Delivery Date by Airframe Manufacturer.

<PAGE>

      "FAA FILED DOCUMENTS"  means the Lease,  Lease Supplement No. 1, the Trust
Indenture, the Trust Agreement, the initial Trust Indenture Supplement,  the FAA
Bill of Sale and an application for registration of the Aircraft with the FAA in
the name of Owner Trustee.

      "FAA  REGULATIONS"  means  the  Federal  Aviation  Regulations  issued  or
promulgated pursuant to the Act from time to time.

      "FAIR MARKET  RENTAL  VALUE" means the fair market rental value in Dollars
for the  Aircraft  that would apply in an  arm's-length  transaction  between an
informed and willing  lessee under no compulsion  to lease,  and an informed and
willing  lessor under no compulsion to lease,  the Aircraft,  for the applicable
Renewal  Lease Term,  assuming  that (a) the  Aircraft  has been  maintained  in
accordance with, and is in the condition required by, the Lease, (b) payments of
rent would be made semiannually, and (c) the Aircraft would be leased during any
such Renewal Lease Term on the same terms and conditions as are set forth in the
Lease with respect to the Base Lease Term.

      "FAIR MARKET SALES VALUE" means the fair market sales value in Dollars for
the Aircraft that would apply in an arm's-length transaction between an informed
and willing buyer under no compulsion to buy, and an informed and willing seller
under no compulsion to sell, the Aircraft,  in a transaction that would close on
or about the relevant time of determination,  assuming that (a) the Aircraft has
been  maintained in accordance  with,  and is in the condition  required by, the
Lease and (b) the Aircraft would be delivered to such informed and willing buyer
in the return condition required by the Lease.

      "FINANCING STATEMENTS" means, collectively, UCC-1 (and, where appropriate,
UCC-3) financing  statements (a) covering the Trust Indenture  Estate,  by Owner
Trustee,  as debtor,  showing Mortgagee as secured party, for filing in Utah and
each other  jurisdiction  that,  in the opinion of  Mortgagee,  is  necessary to
perfect its Lien on the Trust  Indenture  Estate and (b)  covering the Lease and
the Aircraft,  as a precautionary  matter, by Lessee,  as lessee,  showing Owner
Trustee as lessor and  Mortgagee  as  assignee of Owner  Trustee,  for filing in
Texas and each other  jurisdiction  that,  in the  opinion of Owner  Trustee and
Mortgagee, is reasonably desirable.

      "FIRST  SECURITY"  means First  Security  Bank,  National  Association,  a
national  banking  association,  not in its capacity as Owner  Trustee under the
Trust Agreement, but in its individual capacity.

<PAGE>

      "FIXED RENEWAL LEASE TERM" means each term for which the Lease is extended
by  Lessee,  if any,  pursuant  to the  first  and  second  such  extensions  in
accordance with Section 17 of the Lease.

      "GAAP" means generally accepted accounting  principles as set forth in the
statements of financial  accounting standards issued by the Financial Accounting
Standards Board of the American  Institute of Certified Public  Accountants,  as
such principles may at any time or from time to time be varied by any applicable
financial accounting rules or regulations issued by the SEC and, with respect to
any person,  shall mean such principles applied on a basis consistent with prior
periods except as may be disclosed in such person's financial statements.

      "GOVERNMENT  ENTITY" means (a) any federal,  state,  provincial or similar
government,  and any  body,  board,  department,  commission,  court,  tribunal,
authority,  agency or other  instrumentality of any such government or otherwise
exercising any executive,  legislative,  judicial,  administrative or regulatory
functions  of  such  government  or  (b)  any  other  government  entity  having
jurisdiction  over  any  matter  contemplated  by the  Operative  Agreements  or
relating to the  observance  or  performance  of the  obligations  of any of the
parties to the Operative Agreements.

      "GTA"  means the  General  Terms  Agreement  as  defined  in the  Purchase
Agreement Assignment.

      "INDEMNITEE"  means (i) First  Security  and Owner  Trustee,  (ii) WTC and
Mortgagee,  (iii) each separate or additional  trustee appointed pursuant to the
Trust Agreement or the Trust  Indenture,  (iv) each  Participant,  (v) the Trust
Estate  and the Trust  Indenture  Estate,  (vi) each  Affiliate  of the  persons
described  in  clauses  (i)  through  (iv),  inclusive,   (vii)  the  respective
directors,  officers,  employees,  agents and  servants  of each of the  persons
described in clauses (i) through (iv)  inclusive and in clause (vi),  (viii) the
successors and permitted assigns of the persons described in clauses (i) through
(iv),  inclusive,  and in  clauses  (vi) and  (vii)  and  (ix) the Pass  Through
Indemnitees; PROVIDED THAT the Pass Through Indemnitees are Indemnitees only for
purposes of Section 9.1 of the  Participation  Agreement.  If any  Indemnitee is
Airframe Manufacturer or Engine Manufacturer or any subcontractor or supplier of
either thereof, such Person shall be an Indemnitee only in its capacity as Owner
Participant, Loan Participant or Note Holder.

      "INDENTURE AGREEMENTS" means the Participation  Agreement,  the Lease, the
Purchase  Agreement,   the  Purchase  Agreement  Assignment,   the  Consent  and
Agreement,  the Engine  Consent and  Agreement,  the Bills of Sale and any other

<PAGE>

contract,  agreement or  instrument  from time to time assigned or pledged under
the Trust Indenture.

      "INDENTURE DEFAULT" means any condition,  circumstance, act or event that,
with the  giving of  notice,  the  lapse of time or both,  would  constitute  an
Indenture Event of Default.

      "INDENTURE  EVENT OF  DEFAULT"  means  any one or more of the  conditions,
circumstances, acts or events set forth in Section 4.02 of the Trust Indenture.

      "INDENTURE INDEMNITEE" means (i) WTC and the Mortgagee, (ii) each separate
or  additional  trustee  appointed  pursuant to the Trust  Indenture,  (iii) the
Subordination  Agent, (iv) each Liquidity Provider and the Liquidity  Guarantor,
(v) each Pass Through Trustee, (vi) the Paying Agent, (vii) the Escrow Agent and
(viii)  each  of the  respective  directors,  officers,  employees,  agents  and
servants of each of the persons described in clauses (i) through (vii) inclusive
above.

      "INTERCREDITOR AGREEMENT" means that certain Intercreditor Agreement among
the Pass Through Trustees,  the Liquidity Providers and the Subordination Agent,
dated as of the Issuance Date,  PROVIDED that, for purposes of any obligation of
Lessee,  no  amendment,  modification  or  supplement  to,  or  substitution  or
replacement of, such Intercreditor Agreement shall be effective unless consented
to by Lessee.

      "INTERIM  LEASE TERM" means the period  commencing  on and  including  the
Delivery  Date,  and ending on and including the day  immediately  preceding the
Commencement  Date  or such  earlier  date  on  which  the  Term  terminates  in
accordance with the provisions of the Lease.

      "INTERIM RENT" is defined in Schedule 1 to the Lease.

      "IRS"  means the  Internal  Revenue  Service of the  United  States or any
Government Entity succeeding to the functions of such Internal Revenue Service.

      "ISSUANCE DATE" means March 15, 2000.

      "LAW"  means  (a)  any  constitution,   treaty,   statute,   law,  decree,
regulation,  order,  rule or directive  of any  Government  Entity,  and (b) any
judicial or administrative  interpretation or application of, or decision under,
any of the foregoing.

<PAGE>

      "LEASE" or "LEASE AGREEMENT" means the Lease Agreement  [________],  dated
as of even date with the  Participation  Agreement,  between  Owner  Trustee and
Lessee.

      "LEASE DEFAULT" means any condition, circumstance, act or event that, with
the giving of notice,  the lapse of time or both, would constitute a Lease Event
of Default.

      "LEASE  EVENT  OF  DEFAULT"  means  any  one or  more  of the  conditions,
circumstances, acts or events set forth in Section 14 of the Lease.

      "LEASE SUPPLEMENT" means a supplement to the Lease, in the form of Exhibit
A to the Lease.

      "LEASE  SUPPLEMENT  NO. 1" means the initial Lease  Supplement,  dated the
Delivery Date.

      "LESSEE" means Continental Airlines, Inc., a Delaware corporation.

      "LESSEE  OPERATIVE  AGREEMENTS"  means the  Participation  Agreement,  the
Lease,  Lease  Supplement  No. 1, the Tax Indemnity  Agreement,  the BFE Bill of
Sale, the Purchase Agreement  Assignment and each other agreement between Lessee
and  any  other  party  to  the   Participation   Agreement,   relating  to  the
Transactions, delivered on the Delivery Date.

      "LESSEE PERSON" means Lessee, any sublessee,  assignee, successor or other
user or person in  possession  of the  Aircraft,  Airframe  or an Engine with or
without color of right, or any Affiliate of any of the foregoing  (excluding any
Tax Indemnitee or any related Tax Indemnitee with respect thereto, or any person
using or claiming any rights with respect to the Aircraft, Airframe or an Engine
directly  by or  through  any of the  persons  in  this  parenthetical,  but not
excluding  any  Person  claiming  directly  or  indirectly  through or under the
Lease).

      "LESSEE'S   ADVISOR"  is  defined  in  Schedule  3  to  the  Participation
Agreement.

      "LESSOR" means Owner Trustee in its capacity as lessor under the Lease.

      "LESSOR  LIEN"  means,  with  respect  to any person and in respect of any
property (including,  without limitation,  the Trust Estate, the Trust Indenture
Estate, the Aircraft,  Airframe,  Engines,  Parts or Aircraft  Documents) or any
payments,  any Lien on such  property or  payments  which (a) arises from claims
against  such  person (if such  person is a trustee,  whether in its  individual

<PAGE>

capacity or in its capacity as a trustee) not related to any of the transactions
contemplated by the Operative Agreements,  (b) results from acts or omissions of
such person (if such person is a trustee,  whether in its individual capacity or
in its capacity as a trustee) in violation of such  person's  obligations  under
any of the terms of the Operative Agreements, or not related to the transactions
contemplated  by the Operative  Agreements,  (c) is imposed as a result of Taxes
against  such  person (if such  person is a trustee,  whether in its  individual
capacity or in its capacity as a trustee) or any of its  Affiliates not required
to be indemnified  by Lessee under the  Participation  Agreement,  or (d) claims
against  such person  arising out of any transfer by such person of its interest
in the  Aircraft,  the Trust Estate or the  Operative  Agreements,  other than a
Transfer  permitted by the terms of the Operative  Agreements or pursuant to the
exercise of remedies set forth in Section 15 of the Lease.

      "LESSOR'S  COST" means the  aggregate of the amounts paid by Owner Trustee
to Airframe Manufacturer and Lessee to purchase the Aircraft and BFE pursuant to
the  Purchase  Agreement  Assignment  and the  Participation  Agreement,  and is
designated by Dollar amount in Schedule 3 to the Participation Agreement.

      "LIEN" means any mortgage, pledge, lien, charge, claim, encumbrance, lease
or security interest affecting the title to or any interest in property.

      "LIQUIDITY   FACILITIES"   means  the  five  Revolving  Credit  Agreements
(consisting of a separate Revolving Credit Agreement with the Liquidity Provider
with respect to each Pass Through Trust)  between the  Subordination  Agent,  as
borrower,  and the  Liquidity  Provider,  each  dated as of the  Issuance  Date,
PROVIDED  that,  for  purposes  of  any  obligation  of  Lessee,  no  amendment,
modification  or supplement  to, or  substitution  or  replacement  of, any such
Liquidity Facility shall be effective unless consented to by Lessee.

      "LIQUIDITY  GUARANTEES" means the Guarantee  Agreements,  each dated as of
the Issuance  Date,  providing for the  guarantee by the Liquidity  Guarantor of
certain  obligations  of Morgan  Stanley  Capital  Services Inc., as a Liquidity
Provider; PROVIDED that, for purposes of any obligation of Lessee, no amendment,
modification  or supplement  to, or  substitution  or  replacement  of, any such
Agreement shall be effective unless consented to by Lessee.

      "LIQUIDITY GUARANTOR" means Morgan Stanley Dean Witter & Co., as guarantor
of the  obligations  of Morgan  Stanley  Capital  Services  Inc.  as a Liquidity
Provider.

<PAGE>

      "LIQUIDITY  PROVIDER"  means each of (i) Credit  Suisse  First  Boston,  a
banking institution organized under the laws of Switzerland,  acting through its
New York  branch,  as "Class  A-1  Liquidity  Provider,"  "Class  A-2  Liquidity
Provider"  and "Class B Liquidity  Provider,"  and (ii) Morgan  Stanley  Capital
Services  Inc., a Delaware  corporation,  as "Class C-1 Liquidity  Provider" and
"Class C-2 Liquidity  Provider" (as such terms are defined in the  Intercreditor
Agreement).

      "LOAN  PARTICIPANTS"  mean, until the Closing shall have been consummated,
the  Applicable  Pass Through  Trustees,  and after the Closing  shall have been
consummated, each Note Holder.

      "LOSS  PAYMENT  DATE" means the date on which  payment is due  pursuant to
Section 10.1.2(a)(i) of the Lease.

      "MAINTENANCE PROGRAM" is defined in Annex C to the Lease.

      "MAJORITY IN INTEREST OF NOTE  HOLDERS"  means as of a particular  date of
determination,  the holders of a majority in aggregate unpaid Original Amount of
all Equipment  Notes  outstanding as of such date (excluding any Equipment Notes
held by Owner Trustee, Lessee, or Owner Participant or any Affiliate of any such
party or any interests of Owner Trustee or Owner  Participant  therein by reason
of  subrogation  pursuant  to Section  4.03 of the Trust  Indenture  (unless all
Equipment Notes then outstanding shall be held by Owner Trustee,  Lessee,  Owner
Participant or any Affiliate of any thereof)); PROVIDED that for the purposes of
directing  any  action or  casting  any vote or giving  any  consent,  waiver or
instruction  hereunder any Note Holder of an Equipment  Note or Equipment  Notes
may allocate,  in such Note Holder's sole discretion,  any fractional portion of
the principal amount of such Equipment Note or Equipment Notes in favor of or in
opposition to any such action, vote, consent, waiver or instruction.

      "MAKE-WHOLE  AMOUNT" means,  with respect to any Equipment Note, an amount
(as determined by an independent  investment bank of national standing) equal to
the excess, if any, of (a) the present value of the remaining scheduled payments
of  principal  and  interest  to  maturity of such  Equipment  Note  computed by
discounting such payments on a semiannual basis on each Payment Date (assuming a
360-day  year of  twelve  30-day  months)  using a  discount  rate  equal to the
Treasury Yield over (b) the outstanding  principal amount of such Equipment Note
plus accrued interest to the date of determination.  For purposes of determining
the Make-Whole Amount, "Treasury Yield" means, at the date of determination with
respect to any Equipment Note, the interest rate (expressed as a decimal and, in
the case of United States Treasury bills,  converted to a bond equivalent yield)

<PAGE>

determined to be the per annum rate equal to the  semi-annual  yield to maturity
for United States Treasury  securities maturing on the Average Life Date of such
Equipment Note and trading in the public securities markets either as determined
by  interpolation  between the most recent weekly  average yield to maturity for
two  series  of  United  States  Treasury  securities,  trading  in  the  public
securities markets,  (A) one maturing as close as possible to, but earlier than,
the Average Life Date of such Equipment Note and (B) the other maturing as close
as possible to, but later than, the Average Life Date of such Equipment Note, in
each case as  published  in the most recent  H.15(519)  or, if a weekly  average
yield to maturity for United States Treasury  securities maturing on the Average
Life Date of such Equipment Note is reported on the most recent H.15(519),  such
weekly  average  yield to maturity as  published in such  H.15(519)  "H.15(519)"
means the  weekly  statistical  release  designated  as such,  or any  successor
publication,  published by the Board of Governors of the Federal Reserve System.
The date of determination of a Make-Whole Amount shall be the third Business Day
prior  to the  applicable  payment  or  redemption  date  and the  "most  recent
H.15(519)"  means the H.15(519)  published prior to the close of business on the
third Business Day prior to the applicable payment or redemption date.

      "MANUFACTURER'S  PURCHASE  PRICE" means the amount  required to be paid to
the Airframe  Manufacturer  to purchase  the  Aircraft  pursuant to the Purchase
Agreement Assignment.

      "MATERIAL  ADVERSE CHANGE" means,  with respect to any person,  any event,
condition or circumstance  that  materially and adversely  affects such person's
business  or  consolidated  financial  condition,  or its  ability to observe or
perform  its  obligations,   liabilities  and  agreements  under  the  Operative
Agreements.

      "MINIMUM  LIABILITY  INSURANCE  AMOUNT" is  defined  in  Schedule 1 to the
Lease.

      "MOODY'S" means Moody's Investors Service, Inc.

      "MORTGAGED PROPERTY" is defined in Section 3.03 of the Trust Indenture.

      "MORTGAGEE"   means   Wilmington   Trust  Company,   a  Delaware   banking
corporation, not in its individual capacity but solely as loan trustee under the
Trust Indenture.

      "MORTGAGEE AGREEMENTS" means,  collectively,  the Participation Agreement,
the Trust  Indenture and each other  agreement  between  Mortgagee and any other

<PAGE>

party to the Participation Agreement, relating to the Transactions, delivered on
the Delivery Date.

      "MORTGAGEE  EVENT" means (i) in the event of a  reorganization  proceeding
involving the Lessee under Chapter 11 of the Bankruptcy Code, (A) the trustee in
such  proceeding  or  the  Lessee  not  assuming  or  agreeing  to  perform  its
obligations  under the Lease,  as  contemplated  under Section 1110,  during the
60-day period under Section 1110(a)(1)(A) of the Bankruptcy Code (or such longer
period as may apply under Section 1110(b) of the Bankruptcy  Code) or (B) at any
time after agreeing to perform or assuming such obligations, such trustee or the
Lessee ceasing to perform such  obligations  with the result that the Continuous
Stay Period comes to an end or (ii) either the Equipment Notes shall have become
due and payable  pursuant to Section 4.04(b) of the Trust Indenture or Mortgagee
has taken  action or notified  Owner  Trustee  that it intends to take action to
foreclose the Lien of the Trust Indenture or otherwise  commence the exercise of
any  significant  remedy  in  accordance  with  Section  4.04(a)  of  the  Trust
Indenture.

      "NET ECONOMIC  RETURN" means the Owner  Participant's  net after-tax yield
utilizing the multiple  investment sinking fund method of analysis and aggregate
net  after-tax  cash flow,  computed  on the basis of the same  methodology  and
assumptions  as were utilized by the initial Owner  Participant  in  determining
Basic Rent, Stipulated Loss Value percentages and Termination Value percentages,
as of the Delivery  Date,  as such  assumptions  may be adjusted for events that
have been the basis for  adjustments to Basic Rent pursuant to Section  3.2.1(b)
of the Lease or events giving rise to indemnity  payments  pursuant to Section 5
of the Tax Indemnity Agreement; PROVIDED, that, if the initial Owner Participant
shall have transferred its interest,  Net Economic Return shall be calculated as
if the initial Owner  Participant had retained its interest;  PROVIDED  FURTHER,
that,  notwithstanding the preceding proviso,  solely for purposes of Section 11
of the  Participation  Agreement and  calculating any adjustments to Basic Rent,
Stipulated  Loss Values and  Termination  Values in connection  with a refunding
pursuant to such  Section 11 at a time when Owner  Participant  is a  transferee
(other than an Affiliate of the initial Owner Participant),  the after-tax yield
(but not the  after-tax  cash flow)  component of Net  Economic  Return shall be
calculated  on the basis of the  methodology  and  assumptions  utilized  by the
transferee Owner Participant as of the date on which it acquired its interest.

      "NET PRESENT  VALUE OF RENTS" means the present  value,  as of the date of
determination,  discounted at 10% per annum, compounded semiannually to the date

<PAGE>

of  determination,  of all unpaid Basic Rent payments during the  then-remaining
portion of the Base Lease Term, expressed as a percentage of Lessor's Cost.

      "NET WORTH" means, for any person, the excess of its total assets over its
total liabilities.

      "NEW  DEBT"  means  debt  securities  in  an  aggregate  principal  amount
specified in the Refunding Information.

      "NON-U.S.  PERSON" means any Person other than a United States person,  as
defined in Section 7701(a)(30) of the Code.

      "NOTE  HOLDER"  means at any time  each  registered  holder of one or more
Equipment Notes.

      "NOTE PURCHASE AGREEMENT" means the Note Purchase  Agreement,  dated as of
the Issuance Date, among Continental  Airlines,  Inc., the Subordination  Agent,
the Escrow Agent,  the Paying Agent and the Pass Through Trustee under each Pass
Through Trust Agreement providing for, among other things, the issuance and sale
of certain  equipment  notes,  PROVIDED  that, for purposes of any obligation of
Lessee,  no  amendment,  modification  or  supplement  to,  or  substitution  or
replacement of, such Agreement shall be effective unless consented to by Lessee.

      "OFFICER'S   CERTIFICATE"   means,   in   respect  of  any  party  to  the
Participation  Agreement,  a certificate signed by the Chairman,  the President,
any Vice  President  (including  those with  varying  ranks  such as  Executive,
Senior,  Assistant or Staff Vice  President),  the Treasurer or the Secretary of
such party.

      "OPERATIVE AGREEMENTS" means,  collectively,  the Participation Agreement,
the  Trust  Agreement,  the  Purchase  Agreement  Assignment,  the  Consent  and
Agreement,  the Engine Consent and Agreement, the Lease, Lease Supplement No. 1,
the Trust Indenture, the initial Trust Indenture Supplement,  the Bills of Sale,
the Tax Indemnity Agreement and the Equipment
Notes.

      "OPERATIVE INDENTURES" means each of the indentures under which notes have
been issued and  purchased  by the Pass  Through  Trustees  pursuant to the Note
Purchase Agreement.

      "OP JURISDICTION" is defined in Schedule 3 to the Participation Agreement.

      "ORIGINAL  AMOUNT,"  with respect to an Equipment  Note,  means the stated
original  principal  amount of such  Equipment  Note and,  with  respect  to all
Equipment Notes,  means the aggregate stated original  principal  amounts of all
Equipment Notes.

<PAGE>

      "OWNER PARTICIPANT" means the person executing the Participation Agreement
as "Owner  Participant";  PROVIDED  that if an Owner  Participant  Transfers its
interest to a successor Owner  Participant,  such transferring Owner Participant
shall thereafter no longer be considered an "Owner Participant".

      "OWNER  PARTICIPANT  AGREEMENTS"  means,  collectively,  the Participation
Agreement,  the Tax  Indemnity  Agreement,  the Trust  Agreement  and each other
agreement  between Owner  Participant  and any other party to the  Participation
Agreement relating to the Transactions, delivered on the Delivery Date.

      "OWNER  PARTICIPANT'S  PERCENTAGE"  means the  percentage of Lessor's Cost
allocated to the Owner Participant in Schedule 2 to the Participation Agreement.

      "OWNER  TRUSTEE"  means  First  Security  Bank,  National  Association,  a
national  banking  association,  not  in  its  individual  capacity,  except  as
expressly provided in any Operative Agreement, but solely as Owner Trustee under
the Trust Agreement.

      "OWNER  TRUSTEE   AGREEMENTS"  means,   collectively,   the  Participation
Agreement,  the Lease,  Lease Supplement No. 1, the Trust  Agreement,  the Trust
Indenture,  the initial Trust Indenture  Supplement,  the Equipment  Notes,  the
Purchase  Agreement  Assignment,  and each other agreement between Owner Trustee
and  any  other  party  to  the   Participation   Agreement,   relating  to  the
Transactions, delivered on the Delivery Date.

      "PARTICIPANTS"  means,  collectively,  Owner  Participant  and  each  Loan
Participant and  "Participant"  means Owner  Participant or a Loan  Participant,
individually.

      "PARTICIPATION  AGREEMENT" means the  Participation  Agreement  [________]
dated as of [________]  among Lessee,  Owner  Participant,  Owner  Trustee,  the
Applicable Pass Through Trustees, Subordination Agent and Mortgagee.

      "PARTS"   means   all   appliances,   parts,   components,    instruments,
appurtenances,  accessories,  furnishings, seats and other equipment of whatever
nature  (other than (a) Engines or engines,  and (b) any items  leased by Lessee
from a third party other than Lessor)),  that may from time to time be installed
or incorporated in or attached or appurtenant to the Airframe or any Engine.

      "PASS THROUGH  AGREEMENTS"  means the Pass Through Trust  Agreements,  the
Note Purchase  Agreement,  the Deposit  Agreements,  the Escrow Agreements,  the

<PAGE>

Intercreditor Agreement, the Liquidity Facilities,  the Liquidity Guarantees and
the Fee Letters referred to in Section 2.03 of each of the Liquidity Facilities,
PROVIDED,  that no amendment,  modification or supplement to, or substitution or
replacement  of, any such Fee Letter  shall be  effective  for  purposes  of any
obligation of Lessee, unless consented to by Lessee.

      "PASS THROUGH  CERTIFICATES" means the pass through certificates issued by
the Pass Through Trusts (and any other pass through  certificates for which such
pass through certificates may be exchanged).

      "PASS THROUGH  INDEMNITEES" means (i) the Subordination  Agent, the Paying
Agent, the Escrow Agent, the Liquidity  Providers,  the Liquidity  Guarantor and
the Pass Through  Trustees,  (ii) each  Affiliate  of a person  described in the
preceding  clause (i),  (iii) the  respective  directors,  officers,  employees,
agents and servants of each of the persons  described in the  preceding  clauses
(i) and (ii) and  (iv) the  successors  and  permitted  assigns  of the  persons
described in the preceding clauses (i), (ii) and (iii).

      "PASS THROUGH  TRUST" means each of the five separate pass through  trusts
created under the Pass Through Trust Agreements.

      "PASS  THROUGH  TRUST  AGREEMENT"  means each of the five  separate  Trust
Supplements,  together in each case with the Basic Pass Through Trust Agreement,
each dated as of the Issuance  Date,  by and between the Lessee and Pass Through
Trustee, PROVIDED, that, for purposes of any obligation of Lessee, no amendment,
modification  or supplement  to, or  substitution  or  replacement  of, any such
Agreement shall be effective unless consented to by Lessee.

      "PASS THROUGH TRUSTEE" means Wilmington Trust Company,  a Delaware banking
corporation, in its capacity as trustee under each Pass Through Trust Agreement.

      "PASS THROUGH TRUSTEE AGREEMENTS" means the Participation  Agreement,  the
Pass  Through  Trust  Agreements,  the  Note  Purchase  Agreement,  the  Deposit
Agreements, the Escrow Agreements, and the Intercreditor Agreement.

      "PAYMENT  DATE"  means  (i) each May 1 and  November  1 during  the  Term,
commencing with the first such date to occur after the  Commencement  Date, (ii)
the Scheduled  Expiration Date and (iii) each Scheduled  Renewal Term Expiration
Date, if any.

      "PAYMENT DUE RATE" is defined in Schedule 1 to the Lease.

<PAGE>

      "PAYMENT PERIOD" means each of the consecutive semiannual periods (or such
applicable  shorter period ended on the Scheduled  Expiration Date and the first
and last Payment  Dates of any Renewal Term) during the Term ending on a Payment
Date, the first such period commencing on and including the Commencement Date.

      "PAYING AGENT" means Wilmington Trust Company,  as Paying Agent under each
of the Escrow Agreements.

      "PERMITTED  AIR  CARRIER"  means  (i) any  manufacturer  of  airframes  or
aircraft  engines,  or any Affiliate of a manufacturer  of airframes or aircraft
engines,  (ii) any Permitted  Foreign Air Carrier,  (iii) any person approved in
writing by Lessor or (iv) any U.S. Air Carrier.

      "PERMITTED COUNTRY" means any country listed on Schedule 5 to the Lease.

      "PERMITTED  FOREIGN AIR CARRIER"  means any air carrier with its principal
executive  offices in any  Permitted  Country and which is authorized to conduct
commercial  airline  operations  and to  operate  jet  aircraft  similar  to the
Aircraft under the applicable Laws of such Permitted Country.

      "PERMITTED  GOVERNMENT  ENTITY" means (i) the U.S.  Government or (ii) any
Government  Entity  if the  Aircraft  is then  registered  under the laws of the
country of such Government Entity.

      "PERMITTED  INSTITUTION"  means (a) any  bank,  trust  company,  insurance
company,  financial  institution or corporation  (other than,  without  Lessee's
consent,  a commercial air carrier, a commercial  aircraft  operator,  a freight
forwarder or Affiliate  of any of the  foregoing),  in each case with a combined
capital and surplus or net worth of at least $50,000,000.

      "PERMITTED  LIEN" means any Lien  described  in clauses  (a) through  (g),
inclusive, of Section 6 of the Lease.

      "PERMITTED SUBLEASE" means a sublease permitted under Section 7.2.7 of the
Lease.

      "PERMITTED SUBLESSEE" means the sublessee under a Permitted Sublease.

      "PERSONS" or  "PERSONS"  means  individuals,  firms,  partnerships,  joint
ventures, trusts, trustees,  Government Entities,  organizations,  associations,
corporations,  government  agencies,  committees,  departments,  authorities and
other bodies, corporate or incorporate,  whether having distinct legal status or
not, or any member of any of the same.

<PAGE>

      "PLAN" means any employee  benefit plan within the meaning of Section 3(3)
of ERISA, or any plan within the meaning of Section 4975(e)(1) of the Code.

      "PRELIMINARY NOTICE" is defined in Section 17.1 of the Lease.

      "PTT  PERCENTAGE"  means,  with  respect to each  Applicable  Pass Through
Trustee,  the percentage of Lessor's Cost allocated to such Pass Through Trustee
in Schedule 2 to the Participation Agreement.

      "PURCHASE  AGREEMENT"  means the  Purchase  Agreement  [________]  between
Airframe Manufacturer and Lessee (including all exhibits thereto,  together with
all letter  agreements  entered into that by their terms constitute part of such
Purchase  Agreement),  to the extent assigned pursuant to the Purchase Agreement
Assignment.

      "PURCHASE  AGREEMENT  ASSIGNMENT" means the Purchase  Agreement and Engine
Warranties Assignment  [________],  dated as of even date with the Participation
Agreement, between Lessee and Owner Trustee.

      "PURCHASE  DATE" means the last Business Day of the Base Lease Term or any
Renewal Lease Term, as specified in any Purchase Notice.

      "PURCHASE NOTICE" is defined in Section 17.3.1 of the Lease.

      "QIB" is defined in Section 2.08 of the Trust Indenture.

      "REFUNDING   CERTIFICATE"   means   a   certificate   of   an   authorized
representative of Owner Participant  delivered pursuant to Section 11.1.1 of the
Participation  Agreement,  setting  forth  (a) the  Refunding  Date  and (b) the
following information, subject to the limitations set forth in Section 11 of the
Participation  Agreement: (i) the principal amount of debt to be issued by Owner
Trustee on the Refunding Date, (ii) the proposed adjusted  debt/equity ratio and
(iii) the  proposed  revised  schedules  of Basic  Rent,  Stipulated  Loss Value
percentages and Termination  Value  percentages,  and the proposed  Amortization
Schedules, calculated in accordance with Section 3.2.1 of the Lease.

      "REFUNDING  DATE"  means  the  proposed  date  on  which  the  outstanding
Equipment  Notes will be redeemed and  refinanced  pursuant to Section 11 of the
Participation Agreement.

      "REFUNDING  INFORMATION"  means the information set forth in the Refunding
Certificate  (other than the Refunding  Date) as such  information may have been

<PAGE>

revised by any  verification  procedures  demanded by Lessee pursuant to Section
3.2.1(d) of the Lease.

      "REMOVABLE PARTS" is defined in Section D of Annex C to the Lease.

      "RENEWAL  LEASE TERM" means,  collectively,  the Fixed Renewal Lease Terms
and the Subsequent Renewal Lease Terms, in each case, if any.

      "RENEWAL NOTICE" is defined in Section 17.2.1 of the Lease.

      "RENEWAL RENT" for the Aircraft means the rent payable therefor in respect
of a Renewal Lease Term determined pursuant to Section 17.2.2 of the Lease.

      "RENEWAL RENT LIMIT" is defined in Schedule 1 to the Lease.

      "RENT" means,  collectively,  Interim Rent,  Basic Rent,  Renewal Rent and
Supplemental Rent.

      "REPLACEMENT  AIRFRAME"  means any airframe  substituted  for the Airframe
pursuant to Section 10 of the Lease.

      "REPLACEMENT ENGINE" means an engine substituted for an Engine pursuant to
the Lease.

      "RETURN ACCEPTANCE SUPPLEMENT" means a Return Acceptance Supplement, dated
as of the date the  Aircraft is returned to Lessor  pursuant to Section 5 of the
Lease, by Lessor and Lessee substantially in the form of Exhibit B to the Lease.

      "SCHEDULED  DELIVERY  DATE" means the expected  Delivery  Date notified to
each Participant,  Owner Trustee and Mortgagee by Lessee pursuant to Section 4.1
of the Participation Agreement, which expected Delivery Date shall be a Business
Day not later than the Commitment Termination Date.

      "SCHEDULED EXPIRATION DATE" is defined in Schedule 1 to the Lease.

      "SCHEDULED  RENEWAL TERM EXPIRATION  DATE" means, in the case of the first
Fixed Renewal Lease Term,  the second  anniversary  of the Scheduled  Expiration
Date, in the case of the second Fixed Renewal Lease Term, the fourth anniversary
of the  Scheduled  Expiration  Date and, in the case of any  Subsequent  Renewal
Lease Term, the day preceding the first  anniversary of the commencement date of
such Subsequent Renewal Lease Term.

<PAGE>

      "SEC" means the Securities  and Exchange  Commission of the United States,
or any  Government  Entity  succeeding to the functions of such  Securities  and
Exchange Commission.

      "SECTION  1110"  means 11 U.S.C.  ss. 1110 of the  Bankruptcy  Code or any
successor or analogous section of the federal bankruptcy Law in effect from time
to time.

      "SECURED OBLIGATIONS" is defined in Section 2.06 of the Trust Indenture.

      "SECURITIES ACT" means the Securities Act of 1933, as amended.

      "SECURITY" means a "security" as defined in Section 2(1) of the Securities
Act.

      "SENIOR HOLDER" is defined in Section 2.14(c) of the Trust Indenture.

      "SERIES" means any of Series A-1, Series A-2, Series B, Series C-1, Series
C-2 or Series D.

      "SERIES A-1" or "SERIES A-1 EQUIPMENT  NOTES" means Equipment Notes issued
under the Trust  Indenture  and  designated as "Series A-1"  thereunder,  in the
Original  Amount and maturities and bearing  interest as specified in Schedule I
to the Trust Indenture under the heading "Series A-1."

      "SERIES A-2" or "SERIES A-2 EQUIPMENT  NOTES" means Equipment Notes issued
under the Trust  Indenture  and  designated as "Series A-2"  thereunder,  in the
Original  Amount and maturities and bearing  interest as specified in Schedule I
to the Trust Indenture under the heading "Series A-2."

      "SERIES B" or "SERIES B EQUIPMENT  NOTES"  means  Equipment  Notes  issued
under the Trust  Indenture  and  designated  as  "Series B"  thereunder,  in the
Original  Amount and maturities and bearing  interest as specified in Schedule I
to the Trust Indenture under the heading "Series B."

      "SERIES C-1" or "SERIES C-1 EQUIPMENT  NOTES" means Equipment Notes issued
under the Trust  Indenture  and  designated as "Series C-1"  thereunder,  in the
Original  Amount and maturities and bearing  interest as specified in Schedule I
to the Trust Indenture under the heading "Series C-1."

      "SERIES C-2" or "SERIES C-2 EQUIPMENT  NOTES" means Equipment Notes issued
under the Trust  Indenture  and  designated as "Series C-2"  thereunder,  in the

<PAGE>

Original  Amount and maturities and bearing  interest as specified in Schedule I
to the Trust Indenture under the heading "Series C-2."

      "SERIES D" or "SERIES D EQUIPMENT  NOTES"  means  Equipment  Notes  issued
under the Trust  Indenture  and  designated  as  "Series D"  thereunder,  in the
Original  Amount and maturities and bearing  interest as specified in Schedule I
to the Trust Indenture under the heading "Series D."

      "SIMILAR AIRCRAFT" is defined in Schedule 1 to the Lease.

      "SLV RATE" is defined in Schedule 1 to the Lease.

      "SPECIAL  DEFAULT"  means (i) the  failure  by Lessee to pay any amount of
Interim Rent,  Basic Rent,  Renewal Rent,  Stipulated  Loss Value or Termination
Value when due or (ii) the  occurrence  of any Lease  Default or Lease  Event of
Default referred to in Section 14.5 of the Lease.

      "STANDARD & POOR'S" means Standard & Poor's Ratings  Services,  a division
of the McGraw-Hill Companies, Inc.

      "STIPULATED  LOSS VALUE" means,  with respect to the Aircraft,  (a) during
the Base Lease Term, the amount determined by multiplying (i) the percentage set
forth in Schedule 3 to the Lease (as  adjusted  from time to time in  accordance
with Section 3.2.1 of the Lease) opposite the Stipulated Loss Value Date by (ii)
Lessor's  Cost and (b) during any  Renewal  Lease  Term,  the amount  determined
pursuant  to  Section  17.2.3  of the  Lease.  Notwithstanding  anything  to the
contrary in any  Operative  Agreement,  Stipulated  Loss Value  shall  always be
sufficient to pay in full, as of the date of payment  thereof  (assuming  timely
payment  of the  Equipment  Notes  prior to such  date),  the  aggregate  unpaid
principal  amount of all Equipment Notes  outstanding as of such date,  together
with accrued and unpaid interest on all such Equipment Notes as of such date.

      "STIPULATED  LOSS VALUE DATE" means,  for any month, the day in such month
specified in Schedule 3 to the Lease or, if such day is not a Business  Day, the
immediately succeeding Business Day.

      "SUBORDINATION  AGENT" means  Wilmington  Trust Company,  as subordination
agent under the Intercreditor Agreement.

      "SUBORDINATION  AGENT AGREEMENTS" means the Participation  Agreement,  the
Liquidity Facilities and the Intercreditor Agreement.

<PAGE>

      "SUBSEQUENT  RENEWAL  LEASE  TERM"  means each term for which the Lease is
extended by Lessee, if any, after the second Fixed Renewal Lease Term.

      "SUPPLEMENTAL   RENT"  means,   without   duplication   (a)  all  amounts,
liabilities, indemnities and obligations (other than Interim Rent, Basic Rent or
Renewal Rent but including  Make-Whole  Amount,  if any) that Lessee  assumes or
becomes obligated to or agrees to pay under any Lessee Operative Agreement to or
on behalf of Lessor or any other person, including, without limitation, payments
of Stipulated Loss Value,  Termination  Value and payments of indemnities  under
Section 9 of the Participation  Agreement,  but excluding any amount as to which
Lessee is  obligated  to pay a pro rata  share  pursuant  to clause  (e) of this
definition,  (b) (i) to the extent  not  payable  (whether  or not in fact paid)
under  Section 6(a) of the Note Purchase  Agreement (as  originally in effect or
amended with the consent of the Owner  Participant),  an amount or amounts equal
to the  fees  payable  to the  Liquidity  Provider  under  Section  2.03 of each
Liquidity  Facility and the related Fee Letter (as defined in the  Intercreditor
Agreement)  multiplied  by a fraction  the  numerator of which shall be the then
outstanding aggregate principal amount of the Series A-1 Equipment Notes, Series
A-2 Equipment Notes,  Series B Equipment  Notes,  Series C-1 Equipment Notes and
Series  C-2  Equipment  Notes  and the  denominator  of which  shall be the then
outstanding  aggregate  principal  amount of all "Series A-1  Equipment  Notes",
"Series A-2 Equipment Notes",  "Series B Equipment Notes", "Series C-1 Equipment
Notes" and "Series C-2  Equipment  Notes" (each as defined in the Note  Purchase
Agreement);  (ii) (x) the amount  equal to  interest  on any  Downgrade  Advance
(other than any Applied  Downgrade  Advance)  payable under Section 3.07 of each
Liquidity  Facility  minus  Investment  Earnings  from  such  Downgrade  Advance
multiplied by (y) the fraction  specified in the foregoing clause (i); (iii) (x)
the amount  equal to  interest  on any  Non-Extension  Advance  (other  than any
Applied  Non-Extension  Advance)  payable under  Section 3.07 of each  Liquidity
Facility minus Investment Earnings from such Non-Extension Advance multiplied by
(y) the  fraction  specified  in the  forgoing  clause (i);  (iv) if any payment
default shall have  occurred and be  continuing  with respect to interest on any
Series A-1  Equipment  Notes,  Series A-2  Equipment  Notes,  Series B Equipment
Notes, Series C-1 Equipment Notes or Series C-2 Equipment Notes, (x) the excess,
if any,  of (1) an amount  equal to  interest  on any  Unpaid  Advance,  Applied
Downgrade Advance or Applied Non-Extension Advance payable under Section 3.07 of
each Liquidity  Facility over (2) the sum of Investment  Earnings from any Final
Advance  plus any amount of interest at the  Payment Due Rate  actually  payable
(whether  or not in fact  paid) by Lessee in respect  of the  overdue  scheduled

<PAGE>

interest on the Equipment Notes in respect of which such Unpaid Advance, Applied
Downgrade Advance or Applied  Non-Extension Advance was made multiplied by (y) a
fraction the numerator of which shall be the then aggregate  overdue  amounts of
interest on the Series A-1 Equipment Notes, Series A-2 Equipment Notes, Series B
Equipment  Notes,  Series C-1  Equipment  Notes and Series C-2  Equipment  Notes
(other than interest becoming due and payable solely as a result of acceleration
of any such  Equipment  Notes) and the  denominator  of which  shall be the then
aggregate  overdue  amounts of interest on all  "Series  A-1  Equipment  Notes",
"Series A-2 Equipment Notes",  "Series B Equipment Notes", "Series C-1 Equipment
Notes" and "Series C-2  Equipment  Notes" (each as defined in the Note  Purchase
Agreement)  (other than interest  becoming due and payable solely as a result of
acceleration of any such "Equipment Notes");  and (v) Lessee's pro rata share of
any other amounts owed to the Liquidity  Provider by the Subordination  Agent as
borrower under each Liquidity  Facility  (other than amounts due as repayment of
advances  thereunder  or as  interest  on such  advances),  except to the extent
payable pursuant to clause (i), (ii), (iii) or (iv) above, (c) Lessee's pro rata
share of all  compensation  and  reimbursement  of expenses,  disbursements  and
advances payable by Lessee under the Pass Through Trust Agreements, (d) Lessee's
pro  rata  share  of  all  compensation   and   reimbursement  of  expenses  and
disbursements  payable  to  the  Subordination  Agent  under  the  Intercreditor
Agreement  except with respect to any income or franchise  taxes incurred by the
Subordination  Agent in connection  with the  transactions  contemplated  by the
Intercreditor Agreement, (e) Lessee's pro rata share of any amount payable under
Section 9.1 (and, if  attributable  thereto,  Section 9.5) of the  Participation
Agreement to any Pass Through  Indemnitee to the extent such amount  relates to,
results  from or  arises  out of or in  connection  with  (i) the  Pass  Through
Agreements  or the  enforcement  of any of the terms of any of the Pass  Through
Agreements,  (ii) the offer, sale, or delivery or the Pass Through  Certificates
or any interest therein or represented thereby or (iii) any breach of or failure
to  perform  or  observe,  or any other  noncompliance  with,  any  covenant  or
agreement or other  obligation  to be performed by Lessee under any Pass Through
Agreement or the falsity of any representation or warranty of Lessee in any Pass
Through  Agreement  and (f) in the event Lessee  requests  any  amendment to any
Operative  Agreement or Pass Through  Agreement,  Lessee's pro rata share of all
reasonable  fees  and  expenses   (including,   without  limitation,   fees  and
disbursements  of  counsel)  of the  Escrow  Agents  and the  Paying  Agents  in
connection  therewith  payable  by the Pass  Through  Trustees  under the Escrow
Agreements.  As used  herein,  "Lessee's  pro rata share" means as of any time a
fraction,  the numerator of which is the principal  balance then  outstanding of
Equipment Notes  (excluding the Series D Equipment Notes) and the denominator of

<PAGE>

which is the aggregate  principal  balance then  outstanding  of all  "Equipment
Notes"  (excluding the "Series D Equipment Notes") (as each such term is defined
in each of the Operative Indentures). For purposes of this definition, the terms
"Applied Downgrade Advance",  "Applied Non-Extension Advance",  "Cash Collateral
Account",   "Downgrade  Advance",   "Final  Advance",   "Investment   Earnings",
"Non-Extension  Advance" and "Unpaid Advance" shall have the meanings  specified
in each Liquidity Facility.

      "TAX  ATTRIBUTE  PERIOD" is defined in Section  1(e) of the Tax  Indemnity
Agreement.

      "TAX INDEMNITEE"  means (a) First Security and Owner Trustee,  (b) WTC and
Mortgagee,  (c) each separate or additional  trustee  appointed  pursuant to the
Trust  Agreement or the Trust  Indenture,  (d) each  Participant,  (e) the Trust
Estate  and the  Trust  Indenture  Estate  and (f)  the  respective  successors,
assigns, agents and servants of the foregoing.  For purposes of this definition,
the term "Owner  Participant"  shall include any member of an  affiliated  group
(within the meaning of Section 1504 of the Code) of which Owner  Participant is,
or may become, a member if consolidated, joint or combined returns are filed for
such affiliated group for federal, state or local income tax purposes.

      "TAX INDEMNITY  AGREEMENT" means the Tax Indemnity Agreement [____], dated
as of even date  with the  Participation  Agreement,  between  Lessee  and Owner
Participant.

      "TAXES" means all license, recording, documentary,  registration and other
similar fees and all taxes, levies,  imposts,  duties,  charges,  assessments or
withholdings of any nature whatsoever imposed by any Taxing Authority,  together
with any  penalties,  additions to tax,  fines or interest  thereon or additions
thereto.

      "TAXING  AUTHORITY" means any federal,  state or local government or other
taxing authority in the United States,  any foreign  government or any political
subdivision or taxing authority thereof,  any international  taxing authority or
any  territory  or  possession  of the  United  States or any  taxing  authority
thereof.

      "TERM"  means the term,  commencing  on the Delivery  Date,  for which the
Aircraft  is leased  pursuant to Section 3 of the Lease,  and shall  include the
Interim Lease Term,  the Base Lease Term and, if  applicable,  any Renewal Lease
Term; PROVIDED that if at the scheduled end of the Term the Aircraft or Airframe
is being used,  or was within six (6) months prior  thereto  being used,  by the
U.S.  Government  pursuant to CRAF,  the Term shall be deemed  extended  for the
period  necessary to accommodate  usage of the Aircraft or Airframe  pursuant to

<PAGE>

CRAF plus six months thereafter, and Lessee shall be obligated to pay Basic Rent
with respect to any such period of  extension at a semiannual  rate equal to the
average  of the Basic Rent paid  during  the Base  Lease Term or the  applicable
Renewal  Lease  Term,  whichever  shall  have  ended  immediately  prior to such
extension.

      "TERMINATION  DATE"  means  any  Payment  Date  occurring  after the fifth
anniversary  of the  Delivery  Date  on  which  the  Lease  shall  terminate  in
accordance with Section 9 of the Lease.

      "TERMINATION  VALUE"  means,  with  respect  to the  Aircraft,  the amount
determined  by  multiplying  (a) the  percentage  set forth in Schedule 4 to the
Lease (as adjusted  from time to time in  accordance  with Section  3.2.1 of the
Lease) opposite the Termination Value Date by (b) Lessor's Cost. Notwithstanding
anything to the contrary in any  Operative  Agreement,  Termination  Value shall
always be sufficient to pay in full, as of the date of payment thereof (assuming
timely payment of the Equipment Notes prior to such date),  the aggregate unpaid
principal  amount of all Equipment Notes  outstanding as of such date,  together
with accrued and unpaid interest on all such Equipment Notes as of such date.

      "TERMINATION  VALUE  DATE"  means,  for any  month,  the day in such month
specified in Schedule 4 to the Lease or, if such day is not a Business  Day, the
immediately succeeding Business Day.

      "TRANSACTIONS"  means the transactions  contemplated by the  Participation
Agreement and the other Operative Agreements.

      "TRANSACTION EXPENSES" means: (i) the reasonable and actual fees, expenses
and  disbursements  incurred in connection with the  negotiation,  execution and
delivery of the Operative Agreements of (1) Richards,  Layton & Finger,  special
counsel  for  Mortgagee  and  the  Loan  Participants,  such  information  to be
furnished by Mortgagee and the Subordination  Agent, (2) Ray, Quinney & Nebeker,
special  counsel  for  the  Owner  Trustee  under  the  Trust  Agreement,   such
information  to be furnished by Owner  Trustee,  and(3)  Lytle,  Soule & Curlee,
special counsel in Oklahoma City, Oklahoma,  such information to be furnished by
Lessee,  (ii) all fees,  taxes and other charges  payable in connection with the
recording or filing of instruments and financing statements, such information to
be  furnished  by  Lessee,  (iii) the  initial  fee and  reasonable  and  actual
disbursements of Owner Trustee under the Trust Agreement, such information to be
furnished by the Owner  Trustee,  (iv) the initial fee and reasonable and actual
disbursements  of Mortgagee under the Trust  Indenture,  such  information to be
furnished  by  Mortgagee,  (v)  the fee of the  Appraiser  with  respect  to the
appraisal of the Aircraft  referred to in Section 5.1.2(xv) of the Participation

<PAGE>

Agreement,  such information to be furnished by the Owner Participant,  (vi) the
reasonable and actual fees,  out-of-pocket expenses and disbursements of special
counsel to the Owner  Participant (as defined in Schedule 3 to the Participation
Agreement), such information to be furnished by the Owner Participant, (vii) the
equity  placement fee and reasonable  disbursements  of Lessee's  Advisor,  such
information  to be furnished  by Lessee and (viii) an  allocable  portion of the
underwriting fee and other expenses  relating to the public offering of the Pass
Through Certificates, such information to be furnished by Lessee.

      "TRANSFER" means the transfer, sale, assignment or other conveyance of all
or any interest in any property, right or interest.

      "TRANSFEREE" means a person to which any Owner Participant,  Owner Trustee
or any Loan  Participant  or Note Holder  purports or intends to Transfer any or
all of its right, title or interest in the Trust Estate or in its Equipment Note
and the Trust Indenture Estate, respectively, as described in Section 10.1.1(a),
10.1.2 or 10.1.3 (but excluding participants in any participation referred to in
Section 10.1.3), respectively, of the Participation Agreement.

      "TRUST" means the trust created by the Trust Agreement.

      "TRUST AGREEMENT" means the Trust Agreement  [________],  dated as of even
date with the  Participation  Agreement,  between  Owner  Participant  and Owner
Trustee.

      "TRUST  ESTATE"  means all  estate,  right,  title and  interest  of Owner
Trustee in and to the Aircraft, the Lease, any Lease Supplement and the Purchase
Agreement  including,   without  limitation,  all  amounts  of  Basic  Rent  and
Supplemental  Rent  including,   without  limitation,   insurance  proceeds  and
requisition,  indemnity or other payments of any kind for of with respect to the
Aircraft.  Notwithstanding  the foregoing,  "Trust Estate" shall not include any
Excluded Payment.

      "TRUST INDENTURE" means the Trust Indenture and Mortgage  [_____________],
dated as of even date with the  Participation  Agreement,  between Owner Trustee
and Mortgagee.

      "TRUST INDENTURE  ESTATE" is defined in the "Granting Clause" of the Trust
Indenture.

      "TRUST  INDENTURE   SUPPLEMENT"  means  a  Trust  Indenture  and  Mortgage
[_____________] Supplement,  substantially in the form of Exhibit A to the Trust
Indenture, with appropriate modifications to reflect the purpose for which it is
being used.

<PAGE>

      "TRUST  SUPPLEMENT"  means an  agreement  supplemental  to the Basic  Pass
Through Trust  Agreement  pursuant to which (i) a separate  trust is created for
the benefit of the holders of the Pass Through Certificates of a class, (ii) the
issuance of the Pass Through Certificates of such class representing  fractional
undivided  interests in such trust is authorized and (iii) the terms of the Pass
Through Certificates of such class are established.

      "UCC" means the  Uniform  Commercial  Code as in effect in any  applicable
jurisdiction.

      "UNITED  STATES" or "U.S." means the United  States of America;  PROVIDED,
that for geographic purposes, "United States" means, in aggregate, the 50 states
and the District of Columbia of the United States of America.

      "U.S.  AIR CARRIER"  means any United States air carrier that is a Citizen
of the United States holding an air carrier operating  certificate issued by the
Secretary  of  Transportation  pursuant to chapter 447 of title 49 of the United
States Code for  aircraft  capable of carrying  10 or more  individuals  or 6000
pounds  or more of  cargo,  and as to which  there  is in  force an air  carrier
operating  certificate  issued pursuant to Part 121 of the FAA  Regulations,  or
which may  operate as an air carrier by  certification  or  otherwise  under any
successor or substitute provisions therefor or in the absence thereof.

      "U.S.  PERSON" means any Person  described in Section  7701(a)(30)  of the
Code.

      "U.S.  GOVERNMENT"  means the federal  government of the United States, or
any instrumentality or agency thereof the obligations of which are guaranteed by
the full faith and credit of the federal government of the United States.

      "WEIGHTED  AVERAGE LIFE TO MATURITY" means,  with respect to any specified
Debt, at the time of the  determination  thereof the number of years obtained by
dividing the then Remaining  Dollar-years  of such Debt by the then  outstanding
principal amount of such Debt. The term "Remaining  Dollar-years" shall mean the
amount obtained by (1) multiplying the amount of each  then-remaining  principal
payment  on  such  Debt  by the  number  of  years  (calculated  at the  nearest
one-twelfth)  that will elapse between the date of determination of the Weighted
Average Life to Maturity of such Debt and the date of that required  payment and
(2) totaling all the products obtained in clause (1) above.

      "WET LEASE" means any arrangement  whereby Lessee or a Permitted Sublessee
agrees to furnish the Aircraft, Airframe or any Engine to a third party pursuant

<PAGE>

to  which  the  Aircraft,  Airframe  or  Engine  shall  at all  times  be in the
operational control of Lessee or a Permitted  Sublessee,  provided that Lessee's
obligations   under  this  Lease  shall   continue  in  full  force  and  effect
notwithstanding any such arrangement.

      "WTC" means Wilmington Trust Company, a Delaware banking corporation,  not
in its capacity as Mortgagee  under the Trust  Indenture,  but in its individual
capacity.

<PAGE>

                                               ---------------------------------
                                               |           SCHEDULE 1          |
                                               |               TO              |
                                               |    Participation Agreement    |
                                               ---------------------------------

                               ACCOUNTS; ADDRESSES

<TABLE>
<CAPTION>

                   ACCOUNT FOR PAYMENTS                ADDRESS FOR NOTICES
                   --------------------                -------------------
<S>                <C>                                 <C>
CONTINENTAL        The Chase Manhattan Bank            Continental Airlines, Inc.
AIRLINES, INC.     New York, New York 10081            1600 Smith Street
                   Account No.: 910-2-499291           Dept. HQS-FN
                   ABA#: 021-000021                    Houston, Texas 77002
                   Attention: Darlene Cafferata        Attention: Senior Vice President -
                   Voice: 312-807-4084                 Finance
                   Facsimile: 312-807-4501             Facsimile: (713) 324-2447
                   Reference: Continental
                    Lease [_____]
OWNER
PARTICIPANT        [------]                            [------]

THE BOEING COMPANY The Chase Manhattan Bank            The Boeing Company
                   New York, New York 10081            P.O. Box 3707
                   Account No.: 910-1-012764           Seattle, Washington 98124-3707
                   ABA#: 021-000021                    Attention: Treasurer
                   Attention: Paul Trupia               M/S 68-34
                   Voice: 212-552-2829                 Facsimile: (206) 237-8746
                   Facsimile: 212-552-0107
                   Reference: Continental
                    Lease [___]

FIRST SECURITY      First Security Bank,               First Security Bank,
BANK, NATIONAL      National Association               National Association
ASSOCIATION         79 South Main Street               79 South Main Street
                    Salt Lake City, Utah  84111        Salt Lake City, Utah  84111
                    Account No.: 051-0922115           Attention: Corporate Trust
                    Corporate Trust Department         Department
                    ABA#: 124-0000-12                  Facsimile: (801) 246-5053
                    Reference: Continental
                     Lease[____]

WILMINGTON TRUST    The Chase Manhattan Bank           Wilmington Trust Company
COMPANY, AS         New York, New York  10081          Rodney Square North
MORTGAGEE           Account No.: 920-1-014363          1100 North Market Street
                    ABA#: 021-000021                   Wilmington, Delaware  19890
                    Attention: Corporate Trust         Attention: Corporate Trust
                    Administration                     Administration
                    Reference: Continental             Facsimile: (302) 651-8882
                     Lease [----]

</TABLE>

<PAGE>

<TABLE>
<CAPTION>

                   ACCOUNT FOR PAYMENTS                ADDRESS FOR NOTICES
                   --------------------                -------------------
<S>                <C>                                 <C>
WILMINGTON TRUST    The Chase Manhattan Bank           Wilmington Trust Company
COMPANY, AS         New York, New York 10081           Rodney Square North
SUBORDINATION AGENT Account No.: 920-1-014363          1100 North Market Street
                    ABA#: 021-000021                   Wilmington, Delaware 19890
                    Attention: Corporate Trust         Attention: Corporate Trust
                     Administration                     Administration
                    Reference: Continental             Facsimile: (302) 651-8882
                     Lease [___]

WILMINGTON TRUST    The Chase Manhattan Bank           Wilmington Trust Company
COMPANY, AS PASS    New York, New York 10081           Rodney Square North
THROUGH TRUSTEE     Account No.: 920-1-014363          1100 North Market Street
FOR THE 2000-1A-1   ABA#: 021-000021                   Wilmington, Delaware 19890
PASS THROUGH TRUST  Attention: Corporate Trust         Attention: Corporate Trust
                     Administration                     Administration
                    Reference: Continental             Facsimile: (302) 651-8882
                     Lease [___]

WILMINGTON TRUST    The Chase Manhattan Bank           Wilmington Trust Company
COMPANY, AS PASS    New York, New York 10081           Rodney Square North
THROUGH TRUSTEE     Account No.: 920-1-014363          1100 North Market Street
FOR THE 2000-1A-2   ABA#: 021-000021                   Wilmington, Delaware 19890
PASS THROUGH TRUST  Attention: Corporate Trust         Attention: Corporate Trust
                     Administration                     Administration
                    Reference: Continental             Facsimile: (302) 651-8882
                     Lease [___]

WILMINGTON TRUST    The Chase Manhattan Bank           Wilmington Trust Company
COMPANY, AS PASS    New York, New York 10081           Rodney Square North
THROUGH TRUSTEE     Account No.: 920-1-014363          1100 North Market Street
FOR THE 2000-1B     ABA#: 021-000021                   Wilmington, Delaware 19890
PASS THROUGH TRUST  Attention: Corporate Trust         Attention: Corporate Trust
                     Administration                     Administration
                    Reference: Continental             Facsimile: (302) 651-8882
                     Lease [___]

WILMINGTON TRUST    The Chase Manhattan Bank           Wilmington Trust Company
COMPANY, AS PASS    New York, New York 10081           Rodney Square North
THROUGH TRUSTEE     Account No.: 920-1-014363          1100 North Market Street
FOR THE 2000-1C-1   ABA#: 021-000021                   Wilmington, Delaware 19890
PASS THROUGH TRUST  Attention: Corporate Trust         Attention: Corporate Trust
                     Administration                     Administration
                    Reference: Continental             Facsimile: (302) 651-8882
                     Lease [___]

</TABLE>

<PAGE>

<TABLE>
<CAPTION>

                   ACCOUNT FOR PAYMENTS                ADDRESS FOR NOTICES
                   --------------------                -------------------
<S>                <C>                                 <C>
WILMINGTON TRUST    The Chase Manhattan Bank           Wilmington Trust Company
COMPANY, AS PASS    New York, New York 10081           Rodney Square North
THROUGH TRUSTEE     Account No.: 920-1-014363          1100 North Market Street
FOR THE 2000-1C-2   ABA#: 021-000021                   Wilmington, Delaware 19890
PASS THROUGH TRUST  Attention: Corporate Trust         Attention: Corporate Trust
                     Administration                     Administration
                    Reference: Continental             Facsimile: (302) 651-8882
                     Lease [___]

</TABLE>

<PAGE>

                                               ---------------------------------
                                               |           SCHEDULE 2          |
                                               |               TO              |
                                               |    Participation Agreement    |
                                               ---------------------------------

                                 COMMITMENTS

                             PERCENTAGE OF LESSOR'S
PARTICIPANT                  COST                                DOLLAR AMOUNT
-----------                  ----------------------              -------------

OWNER PARTICIPANT            OWNER PARTICIPANT'S
                             PERCENTAGE

PASS THROUGH TRUSTEE         LOAN PARTICIPANT'S
                             PTT PERCENTAGE

TOTAL                        100%

<PAGE>

                                               ---------------------------------
                                               |           SCHEDULE 3          |
                                               |               TO              |
                                               |    Participation Agreement    |
                                               ---------------------------------

                                CERTAIN TERMS

DEFINED TERM                                  DEFINITION
BFE Amount                                    [_______________]
Commitment Termination Date                   [_______________]
Lessor's Cost                                 [_______________]
Lessee's Advisor
OP Jurisdiction                               [_______________]
Special counsel to the Owner
Participant                                   [_______________]

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00006-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00006-of-00352.parquet"}]]