Document:

Guarantee, dated as of June 9, 2006

    

    

    

    

    June
      9,
      2006

    

    

    WILMINGTON
      TRUST COMPANY

    in
      its
      capacity as Subordination Agent 

    on
      behalf
      of the Trustee under the 

    Pass
      Through Trust Agreement

    Rodney
      Square North

    1100
      North Market Street

    Wilmington,
      Delaware 19890-0001

    Attention:
      Corporate Trust Administration

    

    

    Ladies
      and Gentlemen:

    

    In
      consideration of that certain ISDA Master Agreement dated as of June 9, 2006
      between Morgan Stanley Capital Services Inc., a Delaware corporation
      (hereinafter "MSCS"), and Wilmington Trust Company, a Delaware banking
      corporation, in its capacity as Subordination Agent on behalf of the Trustee
      under the Continental Airlines Pass Through Trust 2006-1G (hereinafter
      "Counterparty") (such ISDA Master Agreement, together with the Schedule thereto
      and the Confirmation exchanged between the parties pursuant thereto, hereinafter
      the "Agreement"), Morgan Stanley, a Delaware corporation (hereinafter "MS"),
      hereby irrevocably and unconditionally guarantees to Counterparty, with effect
      from the date of the Agreement, the due and punctual payment of all amounts
      payable by MSCS under the Agreement when the same shall become due and payable,
      whether on Scheduled Payment Dates, upon demand, upon declaration of termination
      or otherwise, in accordance with the terms of the Agreement and giving effect
      to
      any applicable grace period under the Agreement. Upon failure of MSCS punctually
      to pay any such amounts, MS agrees to pay or cause to be paid such amounts.
      The
      Counterparty agrees to demand payments from MS in writing at its address set
      forth in the signature block of this Guarantee (or to such other address as
      MS
      may specify in writing), provided that delay by Counterparty in giving such
      demand shall in no event affect MS's obligations under this
      Guarantee.

    

    MS
      hereby
      agrees that its obligations hereunder shall be absolute and unconditional and
      will not be discharged except by complete payment of the amounts payable under
      the Agreement, irrespective of any claim as to the Agreement's validity,
      regularity or enforceability or the lack of authority of MSCS to execute or
      deliver the Agreement; any insolvency, bankruptcy, reorganization or dissolution
      or any proceeding of MSCS, including without limitation rejection of MSCS’s
      payment obligations under the Agreement in such bankruptcy; any waiver of or
      consent to any departure from or failure to enforce any other guarantee for
      any
      or all of MSCS’s payment obligations under the Agreement; or any change in or
      amendment to the Agreement; or any waiver or consent by Counterparty with
      respect to any provisions thereof; or the absence of any action to enforce
      the
      Agreement or the recovery of any judgment against MSCS or of any action to
      enforce a judgment against MSCS under the Agreement; or any similar circumstance
      which might otherwise constitute a legal or equitable discharge or defense
      of a
      guarantor generally. MS hereby waives diligence, presentment, demand on MSCS
      for
      payment or otherwise, filing of claims, requirement of a prior proceeding
      against MSCS and protest or notice. If at any time payment under the Agreement
      is rescinded or must be otherwise restored or returned by Counterparty upon
      the
      insolvency, bankruptcy or reorganization of MSCS or MS or otherwise, MS's
      obligations hereunder with respect to such payment shall be reinstated upon
      such
      restoration or return being made by Counterparty as though such payment had
      not
      been made.

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    MS
      represents to Counterparty as of the date hereof, which representations will
      be
      deemed to be repeated by MS on each date on which a Transaction is entered
      into,
      that:

    

    (1) it
      is
      duly organized and validly existing under the laws of the jurisdiction of its
      incorporation and has full power and legal right to execute and deliver this
      Guarantee and to perform the provisions of this Guarantee on its part to be
      performed;

    

    (2) its
      execution, delivery and performance of this Guarantee have been and remain
      duly
      authorized by all necessary corporate action and do not contravene any provision
      of its certificate of incorporation or by-laws or any law, regulation or
      contractual restriction binding on it or its assets;

    

    (3) all
      consents, authorizations, approvals and clearances (including, without
      limitation, any necessary exchange control approval) and notifications, reports
      and registrations requisite for its due execution, delivery and performance
      of
      this Guarantee have been obtained from or, as the case may be, filed with the
      relevant governmental authorities having jurisdiction and remain in full force
      and effect and all conditions thereof have been duly complied with and no other
      action by, and no notice to or filing with, any governmental authority having
      jurisdiction is required for such execution, delivery or performance; and

    

    (4) this
      Guarantee is its legal, valid and binding obligation enforceable against it
      in
      accordance with its terms except as enforcement hereof may be limited by
      bankruptcy, insolvency, reorganization or other similar laws applicable to
      MS
      affecting the enforcement of creditors' rights or by general equity
      principles.

    

    This
      Guarantee may not be amended, modified, or waived except in writing executed
      by
      each of MS and the Counterparty.

    

    MS
      agrees
      that its obligations hereunder shall not be subject to termination, offset
      or
      counterclaim (all of which are expressly waived by MS).

    

    This
      Guarantee is a guarantee of payment and not of collection. This Guarantee shall
      continue to be effective if MS merges or consolidates with or into another
      entity, loses its separate legal identity or ceases to exist. The rights and
      obligations of MS under this Guarantee shall inure to the benefit of, and be
      binding upon, its successors and permitted assigns. However, MS hereby agrees
      that, other than as a result of a merger or the sale of substantially all of
      the
      assets of MS in which the surviving entity assumes the obligations of MS, it
      shall not assign this Guarantee and all obligations arising from this Guarantee
      without prior written consent of Counterparty, such consent not to be
      unreasonably withheld.

    

    By
      accepting this Guarantee and entering into the Agreement, Counterparty agrees
      that MS shall be subrogated to all rights of Counterparty against MSCS in
      respect of any amounts paid by MS pursuant to this Guarantee, provided that
      MS
      shall be entitled to enforce or to receive any payment arising out of or based
      upon such right of subrogation only to the extent that it has paid all amounts
      payable by MSCS under the Agreement; and provided further that nothing in this
      paragraph shall affect the payment obligations of MS under this
      Guarantee.

    

    This
      Guarantee shall be governed by and construed in accordance with the laws of
      the
      State of New York. All capitalized terms not otherwise defined herein shall
      have
      the respective meanings assigned to them in the Agreement.

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    

    
      	 	
              MORGAN
                STANLEY

            
	 	 
	 	 
	 	
              By:

            	 
	 	
              Name:

            	 
	 	
              Title:

            	 
	 	
              Address:

            	
              1585
                Broadway

            
	 	 	
              New
                York, NY 10036

            
	 	
              Attention:

            	
              Treasurer

            
	 	
              Fax
                No.:

            	
              212-762-0337

            
	 	
              Phone:

            	
              (212)
                761-4000Insurance and Indemnity Agreement, dated as of June 9, 2006

    

       

      FINANCIAL
        GUARANTY INSURANCE COMPANY,

      as
        Policy
        Provider,

       

       

      CONTINENTAL
        AIRLINES, INC.,

      

       

       

       

      WILMINGTON
        TRUST COMPANY, 

      not
        in
        its individual capacity but solely as Subordination Agent 

      and

       

       

      WILMINGTON
        TRUST COMPANY, 

      as
        Trustee under the 

      CONTINENTAL
        AIRLINES PASS THROUGH TRUST 2006-1G

       

      

       

      INSURANCE
        AND INDEMNITY AGREEMENT

       

       

       

      CONTINENTAL
        AIRLINES PASS THROUGH TRUST CERTIFICATES, SERIES 2006-1G

       

      

       

       

       

       

       

      Dated
        as
        of June 9, 2006

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      (This
        Table of Contents is for convenience of reference only and shall not be deemed
        to be part of this Insurance Agreement. All capitalized terms used in this
        Insurance Agreement and not otherwise defined shall have the meanings set
        forth
        in Article I of this Insurance Agreement.)

       

      TABLE
        OF CONTENTS

       

      Page

       

      
        	
                 

                ARTICLE
                  I. DEFINITIONS

              	
                 

                2

              
	 	
                Section
                  1.01

              	
                Defined
                  Terms

              	
                2

              
	 	
                Section
                  1.02

              	
                Other
                  Definitional Provisions

              	
                5

              
	
                 

                ARTICLE
                  II. REPRESENTATIONS, WARRANTIES AND
                  COVENANTS

              	
                 

                6

              
	 	
                Section
                  2.01

              	
                Representations
                  and Warranties of
                  Continental

              	
                6

              
	 	
                Section
                  2.02

              	
                Covenants
                  of Continental

              	
                9

              
	 	
                Section
                  2.03

              	
                Covenants
                  of the Class G Trustee and Subordination
                  Agent

              	
                9

              
	 	
                Section
                  2.04

              	
                Representations,
                  Warranties and Covenants of the Policy
                  Provider

              	
                9

              
	
                 

                ARTICLE
                  III. THE POLICY; REIMBURSEMENT;
                  INDEMNIFICATION

              	
                 

                11

              
	 	
                Section
                  3.01

              	
                Issuance
                  of the Policy

              	
                11

              
	 	
                Section
                  3.02

              	
                Payment
                  of Fees and Premium

              	
                13

              
	 	
                Section
                  3.03

              	
                Reimbursement
                  Obligation

              	
                14

              
	 	
                Section
                  3.04

              	
                [Reserved]

              	
                14

              
	 	
                Section
                  3.05

              	
                Procedure
                  for Payment of Fees and Premium

              	
                14

              
	 	
                Section
                  3.06

              	
                Payment
                  by Subordination Agent

              	
                15

              
	
                 

                ARTICLE
                  IV. FURTHER AGREEMENTS

              	
                 

                15

              
	 	
                Section
                  4.01

              	
                Effective
                  Date; Term of the Insurance
                  Agreement

              	
                15

              
	 	
                Section
                  4.02

              	
                Further
                  Assurances and Corrective
                  Instruments

              	
                16

              
	 	
                Section
                  4.03

              	
                Obligations
                  Absolute

              	
                16

              
	 	
                Section
                  4.04

              	
                Assignments;
                  Reinsurance; Third-Party
                  Rights

              	
                17

              
	 	
                Section
                  4.05

              	
                Liability
                  of the Policy Provider

              	
                18

              
	
                 

                ARTICLE
                  V. MISCELLANEOUS

              	
                 

                18

              
	 	
                Section
                  5.01

              	
                Amendments,
                  Etc.

              	
                18

              
	 	
                Section
                  5.02

              	
                Notices

              	
                18

              
	 	
                Section
                  5.03

              	
                Severability

              	
                19

              
	 	
                Section
                  5.04

              	
                Governing
                  Law

              	
                20

              
	 	
                Section
                  5.05

              	
                Consent
                  to Jurisdiction

              	
                20

              
	 	
                Section
                  5.06

              	
                Consent
                  of the Policy Provider

              	
                20

              
	 	
                Section
                  5.07

              	
                Counterparts

              	
                21

              
	 	
                Section
                  5.08

              	
                Headings

              	
                21

              

      

      
        
          
          

        

        
          -i-

          
            

          

        

        
          
          

        

      

      

      
        	 	
                Section
                  5.09

              	
                Trial
                  by Jury Waived

              	
                21

              
	 	
                Section
                  5.10

              	
                Limited
                  Liability

              	
                21

              
	 	
                Section
                  5.11

              	
                Entire
                  Agreement

              	
                21

              
	 	
                Section
                  5.12

              	
                Independent
                  Agreements

              	
                21

              
	 	
                Section
                  5.13

              	
                Successors
                  and Assigns

              	
                21

              

      

      

      

      
        
          
            

          

          
          

        

        
          -ii-

          
            

          

        

        
          BACK

          
            

          

        

      

      INSURANCE
        AND INDEMNITY AGREEMENT (as may be amended, modified or supplemented from
        time
        to time, this “Insurance
        Agreement”),
        dated
        as of June 9, 2006, by and among FINANCIAL GUARANTY INSURANCE COMPANY, as
        Policy
        Provider (“FGIC”
or
        the
“Policy
        Provider”),
        CONTINENTAL AIRLINES, INC. (“Continental”),
        WILMINGTON TRUST COMPANY, not in its individual capacity but solely as
        Subordination Agent (the “Subordination
        Agent”),
        and
        WILMINGTON TRUST COMPANY, as Class G Trustee (the “Class
        G Trustee”).

       

      

      W
        I T N E S S E T H :

       

      WHEREAS,
        Continental is the owner of certain Pledged Spare Parts;

       

      WHEREAS,
        pursuant to the Trust Indenture, Continental will issue, on a recourse basis,
        two series of Equipment Notes which are to be secured by a security interest
        in
        all right, title and interest of Continental in and to certain Pledged Spare
        Parts and certain other property described in the Trust Indenture;

       

      WHEREAS,
        the Trustee under each of the Trust Agreements, will create the Trusts, which
        will acquire the Equipment Notes;

       

      WHEREAS,
        pursuant to each Trust Agreement, a separate Trust has been created to
        facilitate the sale of the Certificates;

       

      WHEREAS,
        (i) the Primary Liquidity Provider and the Subordination Agent, as agent
        for the
        Class G Trustee, have entered into the Primary Liquidity Facility for the
        benefit of the Class G Certificateholders, (ii) the Above-Cap Liquidity Provider
        and the Subordination Agent, as agent for the Class G Trustee, have entered
        into
        the Above-Cap Liquidity Facility for the benefit of the Class G
        Certificateholders, (iii) the Trustee on behalf of each Trust, the Primary
        Liquidity Provider, the Above-Cap Liquidity Provider, the Policy Provider
        and
        the Subordination Agent have entered into the Intercreditor Agreement and
        (iv)
        Continental, the Mortgagee and the Policy Provider have entered into the
        Collateral Maintenance Agreement;

       

      WHEREAS,
        the Policy Provider has issued a Policy in respect of the Class G Certificates,
        pursuant to which it has agreed to guarantee the payment of interest to the
        Subordination Agent for the benefit of the Class G Trustee and the Class G
        Certificateholders and the payment of principal of the Class G Certificates
        on the Final Distribution Date for the Class G Certificates and as
        otherwise provided therein; and

       

      WHEREAS,
        each of Continental, the Class G Trustee and the Subordination Agent has
        agreed
        to undertake certain obligations in consideration for the Policy Provider’s
        issuance of the Policy;

       

      NOW,
        THEREFORE, in consideration of the premises and the mutual agreements herein
        contained, the parties hereto agree as follows:

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          BACK

        

      

       

      ARTICLE
        I.

DEFINITIONS

       

      Section
        1.01  Defined
        Terms.
        Unless
        the context clearly requires otherwise, all capitalized terms used but not
        defined herein shall have the respective meanings assigned to them in the
        Intercreditor Agreement or, if not defined therein, in the Policy described
        below. For purposes of this Insurance Agreement, the following terms shall
        have
        the following meanings:

       

      “Act”
means
        Part A of subtitle VII of title 49, United States Code, as amended from time
        to
        time, or any similar legislation of the United States enacted in substitution
        or
        replacement thereof.

       

      “Applicable
        Time”
means
        5
        p.m., Eastern Time on the Offer Date.

       

      “Bankruptcy
        Code”
means
        the United States Bankruptcy Code, 11 U.S.C. Section 101 et seq.

       

      “Base
        Prospectus”
means
        the base prospectus of Continental, dated as of April 10, 2006, covering
        pass
        through certificates.

       

      “Citizen
        of the United States”
is
        defined in Section 40102(a)(15) of the Act and in the FAA
        Regulations.

       

      “Closing
        Date”
means
        June 9, 2006.

       

      “Continental”
has
        the
        meaning given such term in the preamble hereto. 

       

      “Collateral
        Maintenance Agreement”
means
        the Collateral Maintenance Agreement, dated as the date hereof by and among
        Continental, the Mortgagee and the Policy Provider.

       

      “Event
        of Loss”
has
        the
        meaning given such term in the Trust Indenture.

       

      “Expenses”
means
        any and all liabilities, obligations, losses (other than losses from
        non-reimbursement of amounts paid by FGIC under the Policy), damages,
        settlements, penalties, claims, actions, suits, costs, out-of-pocket 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 of America or any
        Government Entity succeeding to the functions of such Federal Aviation
        Administration.

       

      “FGIC”
has
        the
        meaning given such term in the preamble hereto.

       

      “Final
        Dissolution Date”
means
        following the occurrence of a Triggering Event, the Distribution Date next
        succeeding the date of receipt by the Subordination Agent of the 

       

      

      
        
          
            
            

          

          
            2

            
              

            

          

          
            BACK

          

        

      

      

      proceeds
        of the sale of the Series G Equipment Note or the Pledged Spare Parts comprising
        all of the Pledged Spare Parts then subject to the Lien of the Trust Indenture.
        

       

      “Final
        Distribution Date”
means
        the date which is the earlier of the (i) Final Legal Distribution Date or
        (ii) Final Dissolution Date.

       

      “Final
        Prospectus”
means
        the Base Prospectus as supplemented by the Final Prospectus Supplement.

       

      “Final
        Prospectus Supplement”
means
        the final prospectus supplement, dated as of May 24, 2006, with respect to
        the
        Certificates. 

       

      “Financing
        Statements”
means
        collectively, UCC-1 (and, where appropriate, UCC-3) financing statements
        covering the related Collateral, naming Continental as debtor, showing Mortgagee
        as secured party, for filing in Delaware and each other jurisdiction in which
        such filing is made on or before the Closing Date. 

       

      “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 Documents or relating to the observance or
        performance of the obligations of any of the parties to the Operative
        Documents.

       

      “Indemnification
        Agreement”
means
        the Indemnification Agreement, dated as of May 24, 2006, among FGIC, Continental
        and the Underwriter, as amended, supplemented or otherwise modified from
        time to
        time in accordance with its terms. 

       

      “Insurance
        Agreement”
has
        the
        meaning given such term in the initial paragraph hereof.

       

      “Intercreditor
        Agreement”
means
        the Intercreditor Agreement, dated as of June 9, 2006, among Wilmington Trust
        Company, as Trustee under each Trust, the Primary Liquidity Provider, the
        Above-Cap Liquidity Provider, the Subordination Agent and the Policy
        Provider.

       

      “Investment
        Company Act”
means
        the United States Investment Company Act of 1940, including, unless the context
        otherwise requires, the rules and regulations thereunder, as amended from
        time
        to time.

       

      

      
        
          
            
            

          

          
            3

            
              

            

          

          
            BACK

          

        

      

      

      “Lien”
means
        any mortgage, pledge, lien, charge, encumbrance or security interest affecting
        the title to or any interest in property.

       

      “Material
        Adverse Change”
means,
        in respect of any Person as at any date, a material adverse change in the
        ability of such Person to perform its obligations under any of the Operative
        Documents to which it is a party as of such date, including any material
        adverse
        change in the business, financial condition, results of operations or properties
        of such Person on a consolidated basis with its subsidiaries which is reasonably
        likely to have such effect.

       

      “Mortgagee”
means
        Wilmington Trust Company in its capacity as Mortgagee under the Trust
        Indenture.

       

      “Offer
        Date”
means
        May 24, 2006.

       

      “Operative
        Documents”
means
        this Insurance Agreement, the Policy, the Indemnification Agreement, the
        Intercreditor Agreement, the Trust Indenture, the Note Purchase Agreement,
        the
        Series G Equipment Note, the Class G Certificates, the Primary Liquidity
        Facility, the Above-Cap Liquidity Facility, the Class G Trust Agreement,
        the Collateral Maintenance Agreement and the Policy Fee Letter, together
        with
        all exhibits and schedules included with any of the foregoing.

       

      “Person”
means
        an individual, joint stock company, trust, unincorporated association, joint
        venture, corporation, business or owner trust, partnership or other organization
        or entity (whether governmental or private).

       

      “Policy”
means
        the Financial Guaranty Insurance Policy No. 06030067, together with all
        endorsements thereto, issued by the Policy Provider in favor of the
        Subordination Agent, for the benefit of the Class G Certificateholders, as
        each
        of the same may be amended from time to time in accordance with the terms
        of the
        Intercreditor Agreement.

       

      “Policy
        Fee Letter”
means
        the fee letter, dated as of June 9, 2006 from the Policy Provider to Continental
        and the Subordination Agent setting forth the Premium and certain other amounts
        payable in respect of the Policy.

       

      “Policy
        Provider”
means
        Financial Guaranty Insurance Company, or any successor thereto, as issuer
        of the
        Policy.

       

      “Policy
        Provider Information”
means
        the information set forth (or incorporated by reference) under the caption
        “Description of the Policy Provider” in the Preliminary Prospectus Supplement
        and the Final Prospectus Supplement and in Appendix III of the Preliminary
        Prospectus Supplement and the Final Prospectus Supplement. 

       

      “Preliminary
        Prospectus Supplement”
means
        the preliminary prospectus supplement, dated as of May 24, 2006, with respect
        to
        the Certificates. 

       

      “Premium”
has
        the
        meaning given such term in the Policy Fee Letter.

       

      

      
        
          
            
            

          

          
            4

            
              

            

          

          
            BACK

          

        

      

      

      “SEC”
means
        the Securities and Exchange Commission of the United States of America, or
        any
        successor thereto.

       

      “Section
        1110”
means
        11 U.S.C. § 1110 of the Bankruptcy Code or any successor or analogous section of
        the federal bankruptcy law in effect from time to time.

       

      “Securities
        Act”
means
        the Securities Act of 1933, including, unless the context otherwise requires,
        the rules and regulations thereunder, as amended from time to time.

       

      “Security”
means
        a
“security” as defined in Section 2(a)(1) of the Securities Act.

       

      “Subordination
        Agent”
has
        the
        meaning given such term in the preamble hereto.

       

      “Time
        of Sale Prospectus”
has
        the
        meaning given to such term in the Underwriting Agreement. 

       

      “Transactions”
means
        the transactions contemplated by the Operative Documents.

       

      “Trust
        Indenture”
means
        the Trust Indenture and Mortgage, dated as of the date hereof, between
        Continental and the Mortgagee, as amended, supplemented or otherwise modified
        from time to time in accordance with its terms. 

       

      “UCC”
means
        the Uniform Commercial Code as in effect in any applicable
        jurisdiction.

       

      “Underwriter
        Information”
has
        the
        meaning given such term in the Indemnification Agreement.

       

      “Underwriting
        Agreement”
means
        the Underwriting Agreement, dated as of May 24, 2006, by and between the
        Underwriter and Continental relating to the purchase of the Class G Certificates
        and the Class B Certificates by the Underwriter, as the same may be amended,
        supplemented or otherwise modified from time to time in accordance with its
        terms.

       

      “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 the Act 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.

       

      Section
        1.02  Other
        Definitional Provisions.
        The
        words “hereof,” “herein” and “hereunder” and words of similar import when used
        in this Insurance Agreement shall refer to this Insurance Agreement as a
        whole
        and not to any particular provision of this Insurance Agreement, and Section,
        subsection, Schedule and Exhibit references are to this Insurance Agreement
        unless otherwise specified. The meanings given to terms defined herein shall
        be
        equally applicable to both the singular and plural forms of such terms. The
        words “include” and “including” shall be deemed to be followed by the phrase
“without limitation.”

       

       

      
        
          
          

        

        
          5

          
            

          

        

        
          BACK

        

      

       

      ARTICLE
        II.

       

      REPRESENTATIONS,
        WARRANTIES AND COVENANTS

       

      Section
        2.01  Representations
        and Warranties of Continental.
        Continental represents and warrants as of the Closing Date as
        follows:

       

      (a)  Organization;
        Qualification.
        Continental 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
        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 Operative Documents to which it is a party as of such date.
        Continental 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 Continental.

       

      (b)  Corporate
        Authorization.
        Continental 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 Operative Documents to
        which
        it is a party as of such date, and the performance of its obligations
        thereunder.

       

      (c)  No
        Violation.
        The
        execution and delivery by Continental of the Operative Documents to which
        it is
        a party as of such date, the performance by Continental of its obligations
        thereunder and the consummation by Continental of the Transactions contemplated
        thereby, do not and will not (a) violate any provision of the certificate
        of
        incorporation or by-laws of Continental, (b) violate any law, regulation,
        rule
        or order applicable to or binding on Continental or (c) violate or constitute
        any default under (other than any violation or default that would not result
        in
        a Material Adverse Change to Continental), or result in the creation of any
        Lien
        (other than Permitted Liens, as defined in the Trust Indenture) upon the
        Collateral under, any indenture, mortgage, chattel mortgage, deed of trust,
        conditional sales contract, lease, loan or other material agreement, instrument
        or document to which Continental is a party or by which it or any of its
        properties is bound.

       

      (d)  Approvals.
        The
        execution and delivery by Continental of the Operative Documents to which
        it is
        a party as of such date, the performance by Continental of its obligations
        thereunder and the consummation by Continental 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
        creditor of Continental and (b) any Government Entity, other than (i) such
        as
        are required under the Securities Act, the Trust Indenture Act of 1939, as
        amended, the securities and Blue Sky laws of the various states and of foreign
        jurisdictions or rules and regulations of the National Association of Securities
        Dealers, Inc., (ii) filings or recordings with the FAA and under the UCC
        or
        other laws in effect in any applicable jurisdiction governing the perfection
        of

       

      

      
        
          
            
            

          

          
            6

            
              

            

          

          
            BACK

          

        

      

      

      security
        interests in the Collateral, which filings or recordings shall have been
        made,
        or duly presented for filing or recordation, or shall be in the process of
        being
        duly filed or filed for recordation, on or before such date (and continuation
        statements periodically), (iii) filings, recordings, notices or other
        ministerial actions pursuant to any routine recording, contractual or regulatory
        requirements applicable to it and (iv) filings, recordings, notices or other
        actions contemplated by the Operative Documents in connection with the lease
        or
        sale of the Pledged Spare Parts.

       

      (e)  Valid
        and Binding Agreements.
        The
        Operative Documents executed and delivered by Continental on or prior to
        such
        date have been duly executed and delivered by Continental and, assuming the
        due
        authorization, execution and delivery thereof by the other party or parties
        thereto (and, in the case of the Equipment Notes, when issued and authenticated
        in the manner provided for in the Trust Indenture and delivered against payment
        of the consideration therefor specified in the Note Purchase Agreement),
        constitute the legal, valid and binding obligations of Continental and are
        enforceable against Continental 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, and subject to principles
        of
        public policy limiting the right to enforce the indemnification and contribution
        provisions contained therein, insofar as such provisions relate to
        indemnification and contribution for liabilities arising under federal
        securities laws.

       

      (f)  Litigation.
        Except
        as set forth in the Time of Sale Prospectus, Continental’s most recent Annual
        Report on Form 10-K, as amended, filed by Continental with the SEC on or
        prior
        to the Closing Date or in any Quarterly Report on Form 10-Q or Current Report
        on
        Form 8-K filed by Continental with the SEC subsequent to such Form 10-K,
        no
        action, claim or proceeding is now pending or, to the actual knowledge of
        Continental, threatened against Continental before any court, governmental
        body,
        arbitration board, tribunal or administrative agency, which is reasonably
        likely
        to be determined adversely to Continental and if determined adversely to
        Continental is reasonably likely to result in a Material Adverse Change to
        Continental.

       

      (g)  Financial
        Condition.
        The
        audited consolidated balance sheet of Continental with respect to Continental’s
        most recent fiscal year included in Continental’s most recent Annual Report on
        Form 10-K, as amended, filed by Continental with the SEC, and the related
        consolidated statements of operations and cash flows for the fiscal year
        then
        ended have been prepared in conformity with GAAP and present fairly in all
        material respects the consolidated financial condition of Continental and
        its
        consolidated subsidiaries as of such date and their consolidated results
        of
        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
        results of operations of Continental, except for matters disclosed in (a)
        the
        Time of Sale Prospectus, (b) the financial statements referred to above or
        (c)
        any subsequent Quarterly Report on Form 10-Q or Current Report on Form 8-K
        filed
        by Continental with the SEC on or prior to the Closing Date.

       

       

      
        
          
          

        

        
          7

          
            

          

        

        
          BACK

        

      

       

      (h)  Registration
        and Recordation.
        Except
        for (a) the filing for recordation (and recordation) of the Trust Indenture
        with
        the FAA pursuant to the Act and (b) the filing of the Financing Statements
        (and
        continuation statements relating thereto at periodic intervals), 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 Mortgagee’s first priority perfected
        security interest in the Pledged Spare Parts and the Spare Parts Documents
        (as
        defined in the Trust Indenture) (subject only to Permitted Liens as defined
        in
        the Trust Indenture), as against Continental and any other Person claiming
        by or
        through Continental in any applicable jurisdiction in the United
        States.

       

      (i)  Location.
        Continental’s location (as such term is used in Section 9-307 of Article 9 of
        the UCC) is the State of Delaware.

       

      (j)  No
        Default.
        On the
        Closing Date, no event which would constitute an Event of Default (as defined
        in
        the Trust Indenture) and no event or condition that with the giving of notice
        or
        the lapse of time or both would become such an Event of Default has occurred
        and
        is continuing.

       

      (k)  No
        Event of Loss.
        As of
        the Closing Date, no Event of Loss has occurred with respect to Pledged Spare
        Parts having an Appraised Value of more than $2,000,000, and to the actual
        knowledge of Continental, no circumstance, condition, act or event has occurred
        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 Pledged Spare Parts having an
        Appraised Value of more than $2,000,000.

       

      (l)  Compliance
        with Laws.

       

      
        

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

           

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

           

          (c) Neither
            Continental nor the Class G Trust is an “investment company” or a company
            controlled by an “investment company” within the meaning of the Investment
            Company Act.

           

        

      

      (m)   Securities
        Laws.
        Neither
        Continental 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 Collateral, 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.

       

       

      
        
          
          

        

        
          8

          
            

          

        

        
          BACK

        

      

       

      (n)  Section
        1110.
        The
        Mortgagee is entitled to the benefits of Section 1110 (as in effect on such
        date) with respect to the right to take possession of the Pledged Spare Parts
        and to enforce any of its other rights or remedies as provided in the Trust
        Indenture in the event of a case under Chapter 11 of the Bankruptcy Code
        in
        which Continental is a debtor. 

       

      (o)  Accuracy
        of Information.
        Continental has no knowledge of any circumstances that could reasonably be
        expected to cause a Material Adverse Change with respect to Continental except
        for matters (i) disclosed in (A) the Time of Sale Prospectus, (B) the
        financial statements referred to above or (C) any subsequent Quarterly
        Report on Form 10-Q, Current Report on Form 8-K or any press release issued
        by Continental filed by Continental with the SEC or (ii) otherwise disclosed
        in
        writing to FGIC, in each case, on or prior to the Closing Date. Except for
        the
        Policy Provider Information and the Underwriter Information, in each case,
        included in the Time of Sale Prospectus, the Time of Sale Prospectus, as
        of the
        Applicable Time, did not, and as of the Closing Date, does not, contain any
        untrue statement of a material fact or omit to state a material fact necessary
        to make the statements therein, in the light of the circumstances under which
        they were made, not misleading.
        Except
        for the Policy Provider Information and the Underwriter Information, in each
        case, included in the Final Prospectus, the Final Prospectus, on the date
        thereof, did not, and as of the Closing Date, does not, contain any untrue
        statement of a material fact or omit to state a material fact necessary to
        make
        the statements therein, in the light of the circumstances under which they
        were
        made, not misleading.

       

      Section
        2.02  Covenants
        of Continental.
        Continental covenants and agrees with the Policy Provider that, so
        long
        as the Policy Provider is the Controlling Party, Continental shall comply
        with
        the provisions of the Operative Documents relating to maintenance, operation,
        insurance, leasing and sale of the Pledged Spare Parts.

       

      Section
        2.03  Covenants
        of the Class
        G Trustee and Subordination Agent.
        The
        Class G Trustee and the Subordination Agent shall perform and observe, in
        all
        material respects, all of its covenants, obligations and agreements in any
        Operative Document to which it is a party to be observed or performed by
        it.

       

      Section
        2.04  Representations,
        Warranties and Covenants of the Policy Provider.
        The
        Policy Provider represents, warrants and covenants to Continental and the
        Subordination Agent as follows:

       

      (a)  Organization
        and Licensing.
        The
        Policy Provider is duly organized, validly existing and in good standing
        as a
        stock insurance corporation under the laws of the State of New York duly
        qualified to conduct an insurance business in every jurisdiction where
        qualification may be necessary to accomplish the Transactions.

       

      (b)  Corporate
        Power.
        The
        Policy Provider has the corporate power and authority to issue the Policy,
        to
        execute and deliver this Insurance Agreement and the other Operative Documents
        to which it is a party and to perform all of its obligations hereunder and
        thereunder.

       

       

      
        
          
          

        

        
          9

          
            

          

        

        
          BACK

        

      

       

      (c)  Authorization;
        Approvals.
        All
        proceedings legally required for the issuance, execution, delivery and
        performance of the Policy and the execution, delivery and performance of
        this
        Insurance Agreement and the other Operative Documents to which the Policy
        Provider is a party have been taken and licenses, orders, consents or other
        authorizations or approvals of any Government Entities legally required for
        the
        enforceability of the Policy have been obtained; any proceedings not taken
        and
        any licenses, authorizations or approvals not obtained are not material to
        the
        enforceability of the Policy.

       

      (d)  Enforceability.
        This
        Insurance Agreement and the other Operative Documents (other than the Policy)
        to
        which the Policy Provider is a party constitute, and the Policy, when issued,
        will constitute, the legal, valid and binding obligations of the Policy Provider
        and are enforceable in accordance with the respective terms thereof, subject
        to
        bankruptcy, insolvency, reorganization, moratorium, receivership and other
        similar laws affecting creditors’ rights generally as they would apply in the
        event of the bankruptcy, receivership, insolvency or similar proceeding of
        FGIC
        and to general principles of equity, whether considered in a proceeding at
        law
        or in equity, and subject to principles of public policy limiting the right
        to
        enforce the indemnification provisions contained herein, insofar as such
        provisions relate to indemnification for liabilities arising under federal
        securities laws.

       

      (e)  Exemption
        from Registration.
        The
        Policy is exempt from registration under the Securities Act.

       

      (f)  No
        Conflicts.
        Neither
        the execution or delivery by FGIC of the Policy and the Operative Documents
        to
        which it is a party, nor the performance by FGIC of its obligations thereunder,
        will conflict with any provision of the certificate of incorporation or the
        bylaws of FGIC nor result in a breach of, or constitute a default under,
        any
        material agreement or other instrument to which FGIC is a party or by which
        any
        of its property is bound nor violate any judgment, order or decree applicable
        to
        FGIC of any governmental or regulatory body, administrative agency, court
        or
        arbitrator having jurisdiction over FGIC to the extent any such conflict,
        breach, default or violation would result in a Material Adverse Change in
        the
        financial results or operations of FGIC or impairs FGIC’s ability to perform its
        obligations under the Policy or any of the Operative Documents.

       

      (g)  Financial
        Information.
        The
        consolidated financial statements of the Policy Provider and its subsidiaries
        as
        of December 31, 2005 and December 31, 2004 and for the years ended
        December 31, 2005 and December 31, 2004 and the periods from December 18,
        2003 through December 31, 2003 and from January 1, 2003 through December
        17,
        2003, and the accompanying footnotes, together with the reports thereon of
        Ernst
& Young LLP, independent certified public accountant, included in Appendix
        III of the Preliminary Prospectus Supplement and the Final Prospectus
        Supplement, fairly present in all material respects the financial condition
        of
        the Policy Provider and its subsidiaries as of such dates and for the periods
        covered by such statements in accordance with GAAP consistently applied.
        The
        consolidated financial statements of the Policy Provider and its subsidiaries
        as
        of March 31, 2006 and for the three-month period ended March 31, 

       

      

      
        
          
            
            

          

          
            10

            
              

            

          

          
            BACK

          

        

      

      

      2006,
        included in Appendix III of the Preliminary Prospectus Supplement and the
        Final
        Prospectus Supplement, present fairly in all material respects the financial
        condition of the Policy Provider and its subsidiaries as of such date and
        for
        such three-month period in accordance with GAAP consistently applied. Since
        March 31, 2006, there has been no change in the financial condition and results
        of operations of the Policy Provider and its subsidiaries that would materially
        and adversely affect the Policy Provider’s ability to perform its obligations
        under the Policy.

       

      (h)  Policy
        Provider Information.
        The
        information with respect to the Policy Provider in the section of the
        Preliminary Prospectus Supplement and the Final Prospectus Supplement, in
        each
        case, contained therein captioned “Description of the Policy Provider” does not
        purport to provide the scope of disclosure required to be included by the
        Securities Act with respect to a registrant in connection with the offer
        and
        sale of securities of such registrant. However, such sections do not, as
        of
        their respective dates or, in the case of the Final Prospectus Supplement,
        as of
        the Closing Date, contain any untrue statement of a material fact and do
        not
        omit to state any material fact required to be stated therein or necessary
        to
        make the statements therein, in light of the circumstances under which they
        were
        made, not misleading.

       

      (i)  No
        Litigation.
        There
        are no actions, suits, proceedings or investigations pending or, to the best
        of
        the Policy Provider’s knowledge, threatened against it at law or in equity or
        before or by any court, governmental agency, board or commission or any
        arbitrator which, if decided adversely, would materially and adversely affect
        its ability to perform its obligations under the Policy or the Operative
        Documents to which it is a party.

       

      (j)  Compliance
        with Law, Etc.
        No
        practice, procedure or policy employed, or proposed to be employed, by the
        Policy Provider in the conduct of its business violates any law, regulation,
        judgment, agreement, order or decree applicable to the Policy Provider that,
        if
        enforced, could result in a Material Adverse Change with respect to the Policy
        Provider.

       

      (k)  The
        Policy Provider is not an “investment company” within the meaning of the
        Investment Company Act.

       

      ARTICLE
        III.

       

      THE
        POLICY; REIMBURSEMENT; INDEMNIFICATION

       

      Section
        3.01  Issuance
        of the Policy.
        The
        Policy Provider agrees to issue the Policy on the Closing Date subject to
        satisfaction of the conditions precedent set forth below on or prior to the
        Closing Date:

       

      (a)  Operative
        Documents.
        The
        Policy Provider shall have received a copy of (i) each of the Operative
        Documents, with the exception of the Policy, to be executed and delivered
        on or
        prior to the Closing Date, in form and substance reasonably satisfactory
        to the
        Policy Provider, duly authorized, executed and delivered by each party thereto
        

       

       

      
        
          
          

        

        
          11

          
            

          

        

        
          BACK

        

      

       

      (other
        than the Policy Provider) and (ii) a copy of the Time of Sale Prospectus
        and the
        Final Prospectus;

       

      (b)  Certified
        Documents and Resolutions.
        The
        Policy Provider shall have received (i) a copy of the certificate of
        incorporation and by-laws of Continental and (ii) a certificate of the Secretary
        or Assistant Secretary of Continental dated the Closing Date stating that
        attached thereto is a true, complete and correct copy of resolutions duly
        adopted by the Board of Directors of Continental authorizing the execution,
        delivery and performance by Continental of the Operative Documents to which
        it
        is a party and the consummation of the Transactions and that such certificate
        of
        incorporation, by-laws and resolutions are in full force and effect without
        amendment or modification on the Closing Date;

       

      (c)  Incumbency
        Certificate.
        The
        Policy Provider shall have received a certificate of the Secretary or an
        Assistant Secretary of each of Continental and the Subordination Agent
        certifying the names and signatures of the officers of Continental and the
        Subordination Agent authorized to execute and deliver the Operative Documents
        to
        which it is a party on or prior to Closing Date;

       

      (d)  Representations
        and Warranties.
        The
        representations and warranties of Continental set forth in this Insurance
        Agreement and in the Note Purchase Agreement shall be true and correct on
        and as
        of the Closing Date;

       

      (e)  Documentation.
        The
        Policy Provider shall have received a copy of each document, instrument,
        certificate and opinion delivered on or before the Closing Date pursuant
        to the
        Operative Documents and the Underwriting Agreement (except for (i) the opinion
        of counsel to the Underwriter addressed only to the Underwriter and (ii)
        the
        opinion of counsel to Continental addressed only to the Underwriter with
        respect
        to the 10b-5 opinion contained therein), including each opinion of counsel
        addressed to any of Moody’s, Standard & Poor’s, the Mortgagee, the Class G
        Trustee, Continental and the Subordination Agent, in respect of any of the
        parties to the Operative Documents and the Transactions in form and substance
        reasonably satisfactory to the Policy Provider, addressed to the Policy Provider
        (or accompanied by a letter from the counsel rendering such opinion to the
        effect that the Policy Provider is entitled to rely on such opinion as of
        its
        date as if it were addressed to the Policy Provider) and addressing such
        matters
        as the Policy Provider may reasonably request, and the counsel providing
        each
        such opinion shall have been instructed by its client to deliver such opinion
        to
        the addressees thereof. 

       

      (f)  Approvals,
        Etc.
        The
        Policy Provider shall have received true and correct copies of all approvals,
        licenses and consents, if any, required in connection with the
        Transactions;

       

      (g)  No
        Litigation, Etc.
        No
        suit, action or other proceeding, investigation or injunction, or final judgment
        relating thereto, shall be pending or threatened before any court, governmental
        or administrative agency or arbitrator in which it is sought to restrain
        or
        prohibit or to obtain damages or other relief in connection with any of the
        Operative Documents or the consummation of the Transactions;

       

      
         

        
          
            
            

          

          
            12

            
              

            

          

          
            BACK

          

        

         

      

      (h)  Legality.
        No
        statute, rule, regulation or order shall have been enacted, entered or deemed
        applicable by any government or governmental or administrative agency or
        court
        that would make the Transactions illegal or otherwise prevent the consummation
        thereof;

       

      (i)  Issuance
        of Ratings.
        The
        Policy Provider shall have received confirmation that the risk insured by
        the
        Policy is rated no lower than “Baa3” by Moody’s and “BBB” by Standard &
Poor’s (in each case, without regard to the Policy) and that the Class G
        Certificates, when issued, will be rated “Aaa” by Moody’s and “AAA” by Standard
& Poor’s;

       

      (j)  Satisfactory
        Documentation.
        The
        Policy Provider and its counsel shall have reasonably determined that all
        documents, certificates and opinions to be delivered in connection with the
        Certificates conform to the terms of the related Trust Agreement, the Time
        of
        Sale Prospectus, the Final Prospectus, this Insurance Agreement and the
        Intercreditor Agreement;

       

      (k)  Filings.
        The
        Policy Provider shall have received evidence that there shall have been made,
        and shall be in full force and effect, all filings, recordings and
        registrations, and there shall have been given or taken any notice or similar
        action as is necessary in order to establish, perfect, protect and preserve
        the
        right, title and interest of the Policy Provider created by the Operative
        Documents executed and delivered on or prior to the Closing Date;

       

      (l)  Conditions
        Precedent.
        All
        conditions precedent to the issuance of the Certificates under the Trust
        Agreements shall have been satisfied or waived (with the consent of the Policy
        Provider). All conditions precedent to the effectiveness of the Liquidity
        Facilities shall have been satisfied or waived; and 

       

      (m)  Expenses.
        The
        Policy Provider shall have received payment in full of all amounts required
        to
        be paid by Continental to or for account of the Policy Provider on or prior
        to
        the Closing Date.

       

      Section
        3.02  Payment
        of Fees and Premium.
        

       

      (a)  Legal
        Fees.  The
        Policy Provider shall be entitled to payment of the Policy Provider’s attorneys’
fees (in an amount not to exceed $175,000) and all other reasonable and actual
        fees, expenses and disbursements (including without limitation accountants’
fees) incurred by the Policy Provider in connection with the negotiation,
        preparation, execution and delivery of the Time of Sale Prospectus, the Final
        Prospectus Supplement, the Operative Documents and all other documents delivered
        with respect thereto. Such attorney’s fees and expenses shall be payable by
        Continental on the Closing Date, to the extent that the invoice thereof shall
        have been presented at least one Business Day prior to the Closing Date,
        and
        within 15 days after presentation of an invoice therefor, to the extent that
        the
        invoice thereof shall not have been presented at least one Business Day prior
        to
        the Closing Date.

       

      (b)  [Reserved]

       

      
        
          
          

        

        
          13

          
            

          

        

        
          BACK

        

      

      (c)  [Reserved]

       

      (d)  Premium
        and Other Payments.

       

      (i)  In
        consideration of the issuance by the Policy Provider of the Policy, Continental
        shall pay or cause to be paid to the Policy Provider the Premium as provided
        in
        the Policy Fee Letter. Continental shall also pay such additional amounts,
        as
        and when due, in accordance with the Policy Fee Letter.

       

      (ii)  No
        portion of the Premium paid shall be refundable without regard to whether
        the
        Policy Provider makes any payment under the Policy or any other circumstances
        relating to the Class G Certificates or provision being made for payment
        of the
        Class G Certificates prior to maturity. 

       

      Section
        3.03  Reimbursement
        Obligation.
        

       

      (a)  As
        and
        when due in accordance with and from the funds specified in Section 3.2 of
        the
        Intercreditor Agreement, the Policy Provider shall be entitled to reimbursement
        for any payment made by the Policy Provider to the Subordination Agent under
        the
        Policy or to the Primary Liquidity Provider under Section 2.6(c) or Section
        3.6(d) of the Intercreditor Agreement, which reimbursement shall be due and
        payable on the applicable date provided therein, in an amount equal to the
        sum
        of the amount to be so paid and all amounts previously paid that remain
        unreimbursed, plus accrued and unpaid interest thereon from the date such
        amounts became due until paid in full (as well as before judgment), at a
        rate of
        interest equal to the
        applicable Stated Interest Rate for the Class G Certificates plus 2%. In
        addition, to the extent that any such payment by the Policy Provider shall
        have
        been made as a result of a default by the Primary Liquidity Provider in its
        obligation to make an Advance, as provided in the Intercreditor Agreement,
        the
        Policy Provider shall be entitled to the payment of interest on such amounts
        to
        the extent, at the time and in the priority specified in Section 3.2 of the
        Intercreditor Agreement. 

       

      (b)  [Reserved]

       

      (c)  [Reserved]

       

      (d)  The
        Policy Provider agrees that with respect to any amendment to the Policy that
        would increase the reimbursement obligations to the Policy Provider hereunder
        above the level set at the Closing Date (“Increased
        Obligation Amounts”),
        reimbursement to the Policy Provider for such Increased Obligation Amounts
        shall
        not be required, unless Continental shall have consented to such
        amendment.

       

      Section
        3.04  [Reserved]

       

      Section
        3.05  Procedure
        for Payment of Fees and Premium.

       

      (a)  All
        payments to be made to the Policy Provider hereunder shall be made in lawful
        currency of the United States and in immediately available funds on the date
        such payment is due by wire transfer to JP Morgan Chase Bank, ABA #021000021
        for
        credit to 

       

      

      
        
          
            
            

          

          
            14

            
              

            

          

          
            BACK

          

        

      

      

      Financial
        Guaranty Insurance Company, Account No. 904951812, Re: Continental Airlines
        FGIC Policy #06030067 or to such other office or account as FGIC may direct
        by
        written notice given at least one Business Day prior to such date to
        Continental. In the event that the date of any payment to the Policy Provider
        or
        the expiration of any time period hereunder occurs on a day that is not a
        Business Day, then such payment shall be made, or such expiration of time
        period
        shall occur, on the next succeeding Business Day with the same force and
        effect
        as if such payment was made or time period expired on the scheduled date
        of
        payment or expiration date, as applicable. 

       

      (b)  Unless
        otherwise specified herein, the Policy Provider shall be entitled to interest
        on
        all amounts owed to the Policy Provider under this Insurance Agreement, from
        the
        date such amounts become due and payable until paid in full, at a rate of
        interest equal to the
        applicable Stated Interest Rate for the Class G Certificates plus
        2%.

       

      (c)  Unless
        otherwise specified herein, interest payable to the Policy Provider under
        this
        Insurance Agreement shall be calculated on the basis of a 360 day year and
        the
        actual number of days elapsed during the period for which such interest
        accrues.

       

      Section
        3.06  Payment
        by Subordination Agent.  (a)  All
        of the fees, expenses and disbursements set forth in Section 3.02 shall be
        payable by Continental as provided in such Section. To the extent of
        Continental’s failure to pay any such fees, expenses and
        disbursements,
        the Subordination Agent shall pay such amounts pursuant to the Operative
        Documents.

       

      (b)  Notwithstanding
        anything herein to the contrary, all payments to be made by the Subordination
        Agent under this Section 3.06 shall be made only from the amounts that
        constitute Scheduled Payments, Special Payments or payments to which FGIC
        is
        entitled under Section 8 of the Note Purchase Agreement and only to the
        extent that the Subordination Agent shall have sufficient income or proceeds
        therefrom to enable the Subordination Agent to make payments in accordance
        with
        the terms of the Intercreditor Agreement. The Policy Provider agrees that
        with
        respect to payments to be made by the Subordination Agent (i) it will look
        solely to such amount to the extent available for distribution to it as provided
        in the Intercreditor Agreement and (ii) the Subordination Agent, in its
        individual capacity, is not personally liable to it for any amounts payable
        or
        liability under this Insurance Agreement except as expressly provided in
        the
        Intercreditor Agreement.

       

      ARTICLE
        IV.

       

      FURTHER
        AGREEMENTS

       

      Section
        4.01  Effective
        Date; Term of the Insurance Agreement.
        This
        Insurance Agreement shall take effect on the Closing Date and shall remain
        in
        effect until the later of (a) such
        time
        as the Policy Provider is no longer subject to a claim under the Policy and
        the
        Policy shall have been surrendered to the Policy Provider for cancellation
        and
        (b) all amounts payable to
        the
        Policy Provider by Continental or the Subordination Agent hereunder or from
        any
        other source hereunder or under the Operative Documents and all amounts payable
        under the Class
        G
        Certificates have been paid in full;
        provided,
        however,
        that
        the provisions of Section 3.04 hereof shall survive any termination of this
        Insurance Agreement.

       

       

      
        
          
          

        

        
          15

          
            

          

        

        
          BACK

        

      

       

      Section
        4.02  Further
        Assurances and Corrective Instruments.
        

       

      (a)  Neither
        Continental nor the Subordination Agent shall grant any waiver of rights
        or
        agree to any amendment or modification to any of the Operative Documents
        to
        which either of them is a party which waiver, amendment, or modification
        would
        have an adverse effect on the rights or remedies of the Policy Provider without
        the prior written consent of the Policy Provider so long as the Policy Provider
        shall be the Controlling Party, and any such waiver without prior written
        consent of the Policy Provider shall be null and void and of no force or
        effect.

       

      (b)  To
        the
        extent permitted by law, each of Continental and the Subordination Agent
        agrees
        that it will, from time to time, execute, acknowledge and deliver, or cause
        to
        be executed, acknowledged and delivered, such supplements hereto and such
        further instruments as the Policy Provider may reasonably request and as
        may be
        required in the Policy Provider’s reasonable judgment to effectuate the
        intention of or facilitate the performance of this Insurance
        Agreement.

       

      Section
        4.03  Obligations
        Absolute.
        

       

      (a)  The
        obligations of Continental, the Subordination Agent and the Class G Trustee
        hereunder shall be absolute and unconditional and shall be paid or performed
        strictly in accordance with this Insurance Agreement under all circumstances
        irrespective of:

       

      (i)  any
        lack
        of validity or enforceability of, or any amendment or other modifications
        of, or
        waiver, with respect to any of the Operative Documents (other than the Policy)
        or the Certificates;

       

      (ii)  any
        exchange or release of any other obligations hereunder;

       

      (iii)  the
        existence of any claim, setoff, defense, reduction, abatement or other right
        that any Person may have at any time against the Policy Provider or any other
        Person;

       

      (iv)  any
        document presented in connection with the Policy proving to be forged,
        fraudulent, invalid or insufficient in any respect or any statement therein
        being untrue or inaccurate in any respect;

       

      (v)  any
        payment by the Policy Provider under the Policy against presentation of a
        certificate or other document that does not strictly comply with the terms
        of
        the Policy;

       

      (vi)  any
        failure of Continental to receive the proceeds from the sale of the
        Certificates; and

       

      (vii)  any
        other
        circumstances, other than payment in full, that might otherwise constitute
        a
        defense available to, or discharge of, any Person in respect of any Operative
        Documents.

       

       

      
        
          
          

        

        
          16

          
            

          

        

        
          BACK

        

      

       

      (b)  Each
        of
        the parties hereto renounces the right to assert as a defense to the performance
        of their respective obligations herein each of the following: (i) to the
        extent
        permitted by law, any and all redemption and exemption rights and the benefit
        of
        all valuation and appraisement privileges against the indebtedness and
        obligations evidenced by any Operative Documents or by any extension or renewal
        thereof; (ii) presentment and demand for payment, notices of nonpayment and
        of
        dishonor, protest of dishonor and notice of protest; (iii) all notices in
        connection with the delivery and acceptance hereof and all other notices
        in
        connection with the performance, default or enforcement of any payment
        hereunder, except as required by the Operative Documents; and (iv) all rights
        of
        abatement, diminution, postponement or deduction, or to any defense, or to
        any
        right of setoff or recoupment arising out of any breach under any of the
        Operative Documents, by any party thereto or any beneficiary thereof, or
        out of
        any obligation at any time owing to Continental.

       

      (c)  Continental
        (i) agrees that any consent, waiver or forbearance hereunder or under the
        Operative Documents with respect to an event shall operate only for such
        event
        and not for any subsequent event; (ii) consents to any and all extensions
        of
        time that may be granted to Continental by the Policy Provider with respect
        to
        any payment hereunder or other provisions hereof; and (iii) consents to the
        addition of any and all other makers, endorsers, guarantors and other obligors
        for any payment hereunder, and to the acceptance of any and all other security
        for any payment hereunder, and agree that the addition of any such obligors
        or
        security shall not affect the liability of Continental for any payment
        hereunder.

       

      (d)  No
        failure by the Policy Provider to exercise, and no delay by the Policy Provider
        in exercising, any right hereunder or under the Operative Documents shall
        operate as a waiver thereof. The exercise by the Policy Provider of any right
        hereunder shall not preclude the exercise of any other right, and the remedies
        provided herein to the Policy Provider are declared in every case to be
        cumulative and not exclusive of any remedies provided by law or equity.

       

      (e)  Nothing
        herein shall be construed as prohibiting any party hereto from pursuing any
        rights or remedies it may have against any Person in a separate legal
        proceeding.

       

      Section
        4.04  Assignments;
        Reinsurance; Third-Party Rights.
        

       

      (a)  This
        Insurance Agreement shall be a continuing obligation of the parties hereto
        and
        shall be binding upon and inure to the benefit of the parties hereto and
        their
        respective successors and permitted assigns. The Subordination Agent, except
        for
        any transaction expressly permitted by Section 8.1 of the Intercreditor
        Agreement, and, except for any transaction expressly permitted by Section
        4.07
        of the Trust Indenture, Continental may not assign their respective rights
        under
        this Insurance Agreement, or delegate any of their duties hereunder, without
        the
        prior written consent of the other parties hereto. Any assignments made in
        violation of this Insurance Agreement shall be null and void.

       

      (b)  The
        Policy Provider shall have the right to grant participation rights in its
        rights
        under this Insurance Agreement and to enter into contracts of reinsurance
        with
        respect to the Policy upon such terms and conditions as the Policy Provider
        may
        in its discretion determine; provided,
        however,
        that no
        such participation or reinsurance agreement or arrangement shall 

       

      

      
        
          
            
            

          

          
            17

            
              

            

          

          
            BACK

          

        

      

      

      relieve
        the Policy Provider of any of its obligations hereunder or under the Policy
        or
        grant to any participant or reinsurer any rights hereunder or under any
        Operative Document.

       

      (c)  Except
        as
        provided herein with respect to participants and reinsurers, nothing in this
        Insurance Agreement shall confer any right, remedy or claim, express or implied,
        upon any Person, including, particularly, any Class G Certificateholder,
        other
        than upon the Policy Provider against Continental, or upon Continental against
        the Policy Provider, and all the terms, covenants, conditions, promises and
        agreements contained herein shall be for the sole and exclusive benefit of
        the
        parties hereto and their successors and permitted assigns. None of the
        Subordination Agent, the Primary Liquidity Provider, the Class G Trustee
        or any
        Class G Certificateholder shall have any right to payment from the Premium
        paid
        or payable hereunder or from any amounts paid by Continental pursuant to
        Sections 3.02 or 3.03.

       

      Section
        4.05  Liability
        of the Policy Provider.
        Neither
        the Policy Provider nor any of its officers, directors or employees shall
        be
        liable or responsible for: (a) the use that may be made of the Policy by
        the
        Class G Trustee or for any acts or omissions of the Class G Trustee in
        connection therewith; or (b) the validity, sufficiency, accuracy or genuineness
        of documents delivered to the Policy
        Provider in connection with any claim under the Policy, or of any signatures
        thereon, even if such documents or signatures should in fact prove to be
        in any
        or all respects invalid, insufficient,
        fraudulent or forged (unless the Policy Provider shall have actual knowledge
        thereof). In furtherance and not in limitation of the foregoing, the Policy
        Provider may accept documents that appear on their face to be in order, without
        responsibility for further investigation.

       

      ARTICLE
        V.

       

      MISCELLANEOUS

       

      Section
        5.01  Amendments,
        Etc.
        This
        Insurance Agreement may be amended, modified, supplemented or terminated
        only by
        written instrument or written instruments signed by
        the
        parties hereto; provided
        that if
        such amendment, modification, supplement or termination would have a material
        adverse affect on the interests of the Subordination Agent, the Class G Trustee
        or any Class G Certificateholder, Ratings Confirmation shall also be obtained
        prior to such amendment, modification, supplement or termination being
        effective. Continental agrees to provide a copy of any amendment to this
        Insurance
        Agreement
        promptly to the Subordination Agent and any rating agency maintaining a rating
        on the Class G Certificates. No act or course of dealing shall be deemed
        to
        constitute an amendment, modification, supplement or termination
        hereof.

       

      Section
        5.02  Notices.
        All
        demands, notices and other communications to be given hereunder shall be
        in
        writing (except as otherwise specifically provided herein) and shall be mailed
        by registered mail or personally delivered and telecopied to the recipient
        as
        follows:

       

       

      
        
          
          

        

        
          18

          
            

          

        

        
          BACK

        

      

       

      (a)  To
        the
        Policy Provider:

       

      Financial
        Guaranty Insurance Company

      125
        Park
        Avenue

      New
        York,
        New York 10017

      Attention:
        SF Surveillance 

      Facsimile:  (212)
        312-3222

      Confirmation:  (212)
        312-3029

       

      (in
        each
        case in which notice or other communication to the Policy Provider refers
        to an
        event of default under any Operative Document or a claim on the Policy shall
        be
        deemed to constitute consent or acceptance, then a copy of such notice or
        other
        communication should also be sent to the attention of the general counsel
        of
        each of Continental, the Subordination Agent and the Class G Trustee at its
        respective address set forth below and, in all cases, both any original and
        all
        copies shall be marked to indicate “URGENT MATERIAL ENCLOSED.”)

       

      (b)  To
        Continental:

       

      Continental
        Airlines, Inc.

      1600
        Smith Street

      Dept.
        HQS-FN

      Houston,
        TX 77002

      Attention:
        Treasurer

      Facsimile:
        (713) 324-2447

       

      (c)  To
        the
        Subordination Agent or the Class G Trustee:

       

      Wilmington
        Trust Company 

      Rodney
        Square North

      1100
        North Market Street

      Wilmington,
        DE 19890

      Attention:
        Corporate Trust Administration

      Facsimile:
        (302) 651-8882

       

      A
        party
        may specify an additional or different address or addresses by writing mailed
        or
        delivered to the other parties as aforesaid. All such notices and other
        communications shall be effective upon receipt unless received after business
        hours on any day, in which case on the opening of business
        on
        the next Business Day. 

       

      Section
        5.03  Severability.
        In the
        event that any provision of this Insurance Agreement shall be held invalid
        or
        unenforceable by any court of competent jurisdiction, the parties hereto
        agree
        that such holding shall not invalidate or render unenforceable any other
        provision hereof. The parties hereto further agree that the holding by any
        court
        of competent jurisdiction
        that any remedy pursued by any party hereto is unavailable or unenforceable
        shall not affect in any way the ability of such party to pursue any other
        remedy
        available to it.

       

       

      
        
          
          

        

        
          19

          
            

          

        

        
          BACK

        

      

       

      Section
        5.04  Governing
        Law.
        This
        Insurance Agreement shall be governed by and construed in accordance with
        the
        laws of the State of New York, including all matters of construction, validity
        and performance. This Insurance Agreement is being delivered in New
        York.

       

      Section
        5.05  Consent
        to Jurisdiction. 

       

      (a)  The
        parties hereto hereby irrevocably submit to the non-exclusive jurisdiction
        of
        the United States District Court for the Southern District of New York and
        any
        court of appropriate jurisdiction in the State of New York located in the
        City
        and County of New York, and any appellate court from any thereof, in any
        action,
        suit or proceeding brought against it or in connection with any of the Operative
        Documents or the Transactions or for recognition or enforcement of any judgment,
        and the parties hereto hereby irrevocably and unconditionally agree that
        all
        claims in respect of any such action or proceeding may be heard or determined
        in
        such New York state court or, to the extent permitted by law, in such federal
        court. The parties hereto agree that a final unappealable judgment in any
        such
        action, suit or proceeding shall be conclusive and may be enforced in other
        jurisdictions by suit on the judgment or in any other manner provided by
        law. To
        the extent permitted by applicable law, the parties hereto hereby waive and
        agree not to assert by way of motion, as a defense or otherwise in any such
        suit, action or proceeding, any claim that it is not personally subject to
        the
        jurisdiction of such courts, that the suit, action or proceeding is brought
        in
        an inconvenient forum, that the venue of the suit, action or proceeding is
        improper or that the related documents or the subject matter thereof may
        not be
        litigated in or by such courts.

       

      (b)  To
        the
        extent permitted by applicable law, the parties hereto shall not seek and
        hereby
        waive the right to any review of the judgment of any such court by any court
        of
        any other nation or jurisdiction which may be called upon to grant an
        enforcement of such judgment.

       

      (c)  Service
        on any party may be made by delivering, by U.S. registered mail, messenger
        or
        courier service, copies of the summons and complaint and other process which
        may
        be served in any suit, action or proceeding to such party addressed to its
        street address shown in Section 5.02, Attention: General Counsel, and such
        service shall be effective service of process for any litigation brought
        against
        such party in any court. Such address may be changed by such party by written
        notice to the other parties hereto.

       

      (d)  Nothing
        contained in this Insurance Agreement shall limit or affect any party’s right to
        serve process in any other manner permitted by law or to start legal proceedings
        relating to any of the Operative Documents against any other party or its
        properties in the courts of any jurisdiction.

       

      Section
        5.06  Consent
        of the Policy Provider.
        No
        disclosure relating to the Policy Provider contained in the Preliminary
        Prospectus Supplement or the Final Prospectus Supplement, which disclosure
        modifies, alters, changes, amends or supplements the disclosure relating
        to the
        Policy Provider provided by the Policy Provider for use therein, shall be
        made
        without the Policy Provider’s prior
        written consent. In the event that the consent of the Policy Provider is
        required under any of the Operative Documents, the determination whether
        to
grant
        

       

      

      
        
          
            
            

          

          
            20

            
              

            

          

          
            BACK

          

        

      

      

      or
        withhold such consent shall be made by the Policy Provider in its
        sole
        discretion without any implied duty towards any other Person, except as
        otherwise expressly provided therein.

       

      Section
        5.07  Counterparts.
        This
        Insurance Agreement may be executed in counterparts by the parties hereto,
        and
        all such counterparts shall constitute one and the same instrument.

       

      Section
        5.08  Headings.
        The
        headings of Articles and Sections and the Table of Contents contained in
        this
        Insurance Agreement are provided for convenience only. They form no part
        of this
        Insurance Agreement and shall not affect its construction or
        interpretation.

       

      Section
        5.09  Trial
        by Jury Waived.
        Each
        party hereby waives, to the fullest extent permitted by law, any right to
        a
        trial by jury in respect of any litigation arising directly or indirectly
        out
        of, under or in connection with this Insurance Agreement.
        Each
        party hereto (A) certifies that no representative, agent or attorney of any
        party hereto has represented, expressly or otherwise, that it would not,
        in the
        event of litigation, seek to enforce the foregoing waiver and (B) acknowledges
        that it has been induced to enter into the Operative Documents to which it
        is a
        party by, among other things, this waiver.

       

      Section
        5.10  Limited
        Liability.
        No
        recourse under any Operative Document shall be had against, and no personal
        liability shall attach to, any officer, employee, director, affiliate or
        shareholder of any party hereto, as such, by the enforcement of any assessment
        or by any legal or equitable proceeding, by virtue of any statute or otherwise
        in respect
        of any of the Operative Documents, the Certificates or the Policy, it being
        expressly agreed and understood that
        each
        Operative Document is solely an obligation of each party hereto, and
        that
        any and all personal liability, either at common law or in equity, or by
        statute
        or constitution, of every such officer, employee, director, affiliate or
        shareholder for breaches of any party hereto of any obligations under any
        Operative Document is
        hereby
        expressly waived as a condition of and in consideration for the execution
        and
        delivery of this Insurance Agreement.

       

      Section
        5.11  Entire
        Agreement.
        This
        Insurance Agreement, the Policy, the Policy Fee Letter and the other Operative
        Documents set forth the entire agreement between the parties with respect
        to the
        subject matter hereof and thereof,
        and supersede and replace any agreement or understanding that may have existed
        between the parties prior to the date hereof in respect of such subject
        matter.

       

      Section
        5.12  Independent
        Agreements.
        This
        Insurance Agreement and the Policy are separate and independent agreements
        and
        nothing herein shall be construed to vary or otherwise modify any term of
        the
        Policy. No breach by any party hereto of any representation, warranty, covenant,
        agreement or undertaking contained herein shall in any way affect the
        obligations of the Policy Provider under the Policy.

       

      Section
        5.13  Successors
        and Assigns.
        This
        Insurance Agreement shall be binding upon and inure to the benefit of the
        parties hereto and their respective successors and permitted
        assigns.

       

      

      
        
          
            
            

          

          
            21

            
              

            

          

          
            BACK

          

        

      

      

      

      IN
        WITNESS WHEREOF, the parties hereto have executed this Agreement, all as
        of the
        day and year first above mentioned.

       

      
        

        
          	 	
                  FINANCIAL
                    GUARANTY INSURANCE

                         
COMPANY,

                  as
                    Policy Provider

                
	 	 
	 	 
	 	
                  By:

                	 
	 	 	
                  Name:

                	 
	 	 	
                  Title: 

                	 
	 	 
	 	 
	 	
                  WILMINGTON
                    TRUST COMPANY,

                  not
                    in its individual capacity but solely as 

                  Subordination
                    Agent and Class G Trustee

                
	 	 
	 	 
	 	
                  By:

                	 
	 	 	
                  Name:

                	 
	 	 	
                  Title: 

                	 
	 	 
	 	 
	 	
                  CONTINENTAL
                    AIRLINES, INC.

                
	 	 
	 	 
	 	
                  By:

                	 
	 	 	
                  Name:

                	 
	 	 	
                  Title:

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00105-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00105-of-00352.parquet"}]]