SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                    FORM 8-K


                                 CURRENT REPORT
                     Pursuant to Section 13 or 15(d) of the
                         Securities Exchange Act of 1934


                Date of Report (Date of earliest event reported):
                                November 3, 1998


                           CONTINENTAL AIRLINES, INC.
             (Exact name of registrant as specified in its charter)


       Delaware                         0-09781                  74-2099724
(State or other jurisdiction     (Commission File Number)       (IRS Employer 
of incorporation)                                            Identification No.)


1600 Smith Street, Dept. HQSEO, Houston, Texas                      77002
(Address of principal executive offices)                          (Zip Code)


                                 (713) 324-5000
              (Registrant's telephone number, including area code)









Item 7.   Financial Statements and Exhibits.

          (c) Exhibits.  The Exhibit Index is hereby  incorporated by reference.
The documents  listed on the Exhibit Index are filed as Exhibits with  reference
to the  Registration  Statement  on Form S-3  (Registration  No.  333-61601)  of
Continental  Airlines,  Inc.  The  Registration  Statement  and  the  Prospectus
Supplement,  dated October 21, 1998, to the  Prospectus,  dated August 25, 1998,
relate  to  the   offering  of   Continental   Airlines,   Inc.'s  Pass  Through
Certificates, Series 1998-3.








                                    SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, Continental
Airlines,  Inc.  has duly  caused  this report to be signed on its behalf by the
undersigned hereunto duly authorized.

                                     CONTINENTAL AIRLINES, INC.


                                     By /S/ JEFFERY A. SMISEK
                                        ---------------------------------------
                                        Jeffery A. Smisek
                                        Executive Vice President, Secretary
                                        and General Counsel

November 13, 1998






                                  EXHIBIT INDEX

       1.1     Underwriting  Agreement,  dated  October 21,  1998,  among Morgan
               Stanley  &  Co.   Incorporated,   Credit   Suisse   First  Boston
               Corporation,  Chase Securities Inc., Donaldson, Lufkin & Jenrette
               Securities   Corporation   and  Salomon  Smith  Barney  Inc.,  as
               Underwriters,  Credit  Suisse First Boston,  New York Branch,  as
               Depositary, and Continental Airlines, Inc.

       4.1     Revolving Credit Agreement  (1998-3A-1),  dated as of November 3,
               1998, between Wilmington Trust Company,  as Subordination  Agent,
               as  Borrower,  and  Westdeutsche  Landesbank   Girozentrale,   as
               Liquidity Provider

       4.2     Revolving Credit Agreement  (1998-3A-2),  dated as of November 3,
               1998, between Wilmington Trust Company,  as Subordination  Agent,
               as  Borrower,  and  Westdeutsche  Landesbank   Girozentrale,   as
               Liquidity Provider

       4.3     Revolving  Credit  Agreement  (1998-3B),  dated as of November 3,
               1998, between Wilmington Trust Company,  as Subordination  Agent,
               as  Borrower,  and Morgan  Stanley  Capital  Services,  Inc.,  as
               Liquidity Provider

       4.4     Revolving Credit Agreement  (1998-3C-1),  dated as of November 3,
               1998, between Wilmington Trust Company,  as Subordination  Agent,
               as  Borrower,  and Morgan  Stanley  Capital  Services,  Inc.,  as
               Liquidity Provider

       4.5     Revolving Credit Agreement  (1998-3C-2),  dated as of November 3,
               1998, between Wilmington Trust Company,  as Subordination  Agent,
               as  Borrower,  and Morgan  Stanley  Capital  Services,  Inc.,  as
               Liquidity Provider

       4.6     Guarantee,  dated November 3, 1998, by Morgan Stanley Dean Witter
               & Co. relating to Revolving Credit Agreement (1998-3B)

       4.7     Guarantee,  dated November 3, 1998, by Morgan Stanley Dean Witter
               & Co. relating to Revolving Credit Agreement (1998-3C-1)

       4.8     Guarantee,  dated November 3, 1998, by Morgan Stanley Dean Witter
               & Co. relating to Revolving Credit Agreement (1998-3C-2)

       4.9     Trust Supplement No. 1998-3A-1-O, dated November 3, 1998, between
               Wilmington Trust Company, as Trustee,  and Continental  Airlines,
               Inc. to Pass Through Trust  Agreement,  dated as of September 25,
               1997




       4.10    Trust Supplement No. 1998-3A-1-S, dated November 3, 1998, between
               Wilmington Trust Company, as Trustee,  and Continental  Airlines,
               Inc. to Pass Through Trust  Agreement,  dated as of September 25,
               1997

       4.11    Trust Supplement No. 1998-3A-2-O, dated November 3, 1998, between
               Wilmington Trust Company, as Trustee,  and Continental  Airlines,
               Inc. to Pass Through Trust  Agreement,  dated as of September 25,
               1997

       4.12    Trust Supplement No. 1998-3A-2-S, dated November 3, 1998, between
               Wilmington Trust Company, as Trustee,  and Continental  Airlines,
               Inc. to Pass Through Trust  Agreement,  dated as of September 25,
               1997

       4.13    Trust Supplement No. 1998-3B-O,  dated November 3, 1998,  between
               Wilmington Trust Company, as Trustee,  and Continental  Airlines,
               Inc. to Pass Through Trust  Agreement,  dated as of September 25,
               1997

       4.14    Trust Supplement No. 1998-3B-S,  dated November 3, 1998,  between
               Wilmington Trust Company, as Trustee,  and Continental  Airlines,
               Inc. to Pass Through Trust  Agreement,  dated as of September 25,
               1997

       4.15    Trust Supplement No.  1998-3C-1-O dated November 3, 1998, between
               Wilmington Trust Company, as Trustee,  and Continental  Airlines,
               Inc. to Pass Through Trust  Agreement,  dated as of September 25,
               1997

       4.16    Trust Supplement No. 1998-3C-1-S, dated November 3, 1998, between
               Wilmington Trust Company, as Trustee,  and Continental  Airlines,
               Inc. to Pass Through Trust  Agreement,  dated as of September 25,
               1997

       4.17    Trust Supplement No. 1998-3C-2-O, dated November 3, 1998, between
               Wilmington Trust Company, as Trustee,  and Continental  Airlines,
               Inc. to Pass Through Trust  Agreement,  dated as of September 25,
               1997

       4.18    Trust Supplement No. 1998-3C-2-S, dated November 3, 1998, between
               Wilmington Trust Company, as Trustee,  and Continental  Airlines,
               Inc. to Pass Through Trust  Agreement,  dated as of September 25,
               1997

       4.19    Intercreditor  Agreement,  dated as of  November  3, 1998,  among
               Wilmington  Trust Company,  as Trustee,  Westdeutsche  Landesbank
               Girozentrale,  as Class  A-1  Liquidity  Provider  and  Class A-2
               Liquidity  Provider,  Morgan Stanley Capital  Services,  Inc., as
               Class B Liquidity  Provider,  Class C-1  Liquidity  Provider  and
               Class C-2 Liquidity  Provider,  and Wilmington Trust Company,  as
               Subordination Agent and Trustee

       4.20    Deposit  Agreement  (Class  A-1),  dated as of  November 3, 1998,
               between First  Security  Bank,  National  Association,  as Escrow
               Agent,  and Credit  Suisse  First  Boston,  New York  Branch,  as
               Depositary





       4.21    Deposit  Agreement  (Class  A-2),  dated as of  November 3, 1998,
               between First  Security  Bank,  National  Association,  as Escrow
               Agent,  and Credit  Suisse  First  Boston,  New York  Branch,  as
               Depositary

       4.22    Deposit  Agreement  (Class  B),  dated as of  November  3,  1998,
               between First  Security  Bank,  National  Association,  as Escrow
               Agent,  and Credit  Suisse  First  Boston,  New York  Branch,  as
               Depositary

       4.23    Deposit  Agreement  (Class  C-1),  dated as of  November 3, 1998,
               between First  Security  Bank,  National  Association,  as Escrow
               Agent,  and Credit  Suisse  First  Boston,  New York  Branch,  as
               Depositary

       4.24    Deposit  Agreement  (Class  C-2),  dated as of  November 3, 1998,
               between First  Security  Bank,  National  Association,  as Escrow
               Agent,  and Credit  Suisse  First  Boston,  New York  Branch,  as
               Depositary

       4.25    Escrow  and  Paying  Agent  Agreement  (Class  A-1),  dated as of
               November  3,  1998,   among   First   Security   Bank,   National
               Association,  as Escrow Agent, Morgan Stanley & Co. Incorporated,
               Credit Suisse First Boston  Corporation,  Chase  Securities Inc.,
               Donaldson,  Lufkin & Jenrette Securities  Corporation and Salomon
               Smith Barney Inc., as Underwriters,  Wilmington Trust Company, as
               Trustee, and Wilmington Trust Company, as Paying Agent

       4.26    Escrow  and  Paying  Agent  Agreement  (Class  A-2),  dated as of
               November  3,  1998,   among   First   Security   Bank,   National
               Association,  as Escrow Agent, Morgan Stanley & Co. Incorporated,
               Credit Suisse First Boston  Corporation,  Chase  Securities Inc.,
               Donaldson,  Lufkin & Jenrette Securities  Corporation and Salomon
               Smith Barney Inc., as Underwriters,  Wilmington Trust Company, as
               Trustee, and Wilmington Trust Company, as Paying Agent

       4.27    Escrow and Paying Agent Agreement (Class B), dated as of November
               3, 1998,  among First Security  Bank,  National  Association,  as
               Escrow Agent,  Morgan Stanley & Co.  Incorporated,  Credit Suisse
               First  Boston  Corporation,  Chase  Securities  Inc.,  Donaldson,
               Lufkin & Jenrette Securities Corporation and Salomon Smith Barney
               Inc., as Underwriters,  Wilmington Trust Company, as Trustee, and
               Wilmington Trust Company, as Paying Agent

       4.28    Escrow  and  Paying  Agent  Agreement  (Class  C-1),  dated as of
               November  3,  1998,   among   First   Security   Bank,   National
               Association,  as Escrow Agent, Morgan Stanley & Co. Incorporated,
               Credit Suisse First Boston  Corporation,  Chase  Securities Inc.,
               Donaldson,  Lufkin & Jenrette Securities  Corporation and Salomon




               Smith Barney Inc., as Underwriters,  Wilmington Trust Company, as
               Trustee, and Wilmington Trust Company, as Paying Agent

       4.29    Escrow  and  Paying  Agent  Agreement  (Class  C-2),  dated as of
               November  3,  1998,   among   First   Security   Bank,   National
               Association,  as Escrow Agent, Morgan Stanley & Co. Incorporated,
               Credit Suisse First Boston  Corporation,  Chase  Securities Inc.,
               Donaldson,  Lufkin & Jenrette Securities  Corporation and Salomon
               Smith Barney Inc., as Underwriters,  Wilmington Trust Company, as
               Trustee, and Wilmington Trust Company, as Paying Agent

       4.30    Note  Purchase  Agreement,  dated as of November  3, 1998,  among
               Continental Airlines, Inc., Wilmington Trust Company, as Trustee,
               Wilmington Trust Company, as Subordination  Agent, First Security
               Bank, National Association, as Escrow Agent, and Wilmington Trust
               Company, as Paying Agent

       4.31    Form of Leased Aircraft  Participation  Agreement  (Participation
               Agreement   among    Continental    Airlines,    Inc.,    Lessee,
               [______________],   Owner   Participant,   First  Security  Bank,
               National  Association,  Owner Trustee,  Wilmington Trust Company,
               Mortgagee  and Loan  Participant)  (Exhibit A-1 to Note  Purchase
               Agreement)

       4.32    Form of Lease  (Lease  Agreement  between  First  Security  Bank,
               National  Association,  Lessor, and Continental  Airlines,  Inc.,
               Lessee) (Exhibit A-2 to Note Purchase Agreement)

       4.33    Form of Leased Aircraft  Indenture  (Trust Indenture and Mortgage
               between First Security Bank, National Association, Owner Trustee,
               and  Wilmington  Trust Company,  Mortgagee)  (Exhibit A-3 to Note
               Purchase Agreement)

       4.34    Form of Leased Aircraft Trust Agreement (Trust Agreement  between
               [______________] and First Security Bank,  National  Association)
               (Exhibit A-5 to Note Purchase Agreement)

       4.35    Form of Special  Indenture  (Trust Indenture and Mortgage between
               First  Security  Bank,  National  Association,  Owner Trustee and
               Wilmington  Trust  Company,   Mortgagee)  (Exhibit  A-6  to  Note
               Purchase Agreement)

       4.36    Form of Owned  Aircraft  Participation  Agreement  (Participation
               Agreement among Continental Airlines, Inc., Owner, and Wilmington
               Trust  Company,  as Mortgagee,  Subordination  Agent and Trustee)
               (Exhibit C-1 to Note Purchase Agreement)





       4.37    Form of Owned Aircraft  Indenture  (Trust  Indenture and Mortgage
               between Continental  Airlines,  Inc., Owner, and Wilmington Trust
               Company, Mortgagee) (Exhibit C-2 to Note Purchase Agreement)

       4.38    6.82% Continental Airlines Pass Through Certificate  1998-3A-1-O,
               Certificate No. 1

       4.39    6.32% Continental Airlines Pass Through Certificate  1998-3A-2-O,
               Certificate No. 1

       4.40    7.02% Continental  Airlines Pass Through  Certificate  1998-3B-O,
               Certificate No. 1

       4.41    7.08% Continental Airlines Pass Through Certificate  1998-3C-1-O,
               Certificate No. 1

       4.42    7.25% Continental Airlines Pass Through Certificate  1998-3C-2-O,
               Certificate No. 1

       23.1    Consent of Aircraft Information Services, Inc., dated October 13,
               1998

       23.2    Consent of AvSOLUTIONS, Inc., dated October 13, 1998

       23.3    Consent of Morten Beyer and Agnew, Inc., dated October 13, 1998

                                                                  EXECUTION COPY


                       CONTINENTAL AIRLINES, INC., ISSUER

                    Pass Through Certificates, Series 1998-3

                             UNDERWRITING AGREEMENT

                                                                October 21, 1998

Morgan Stanley & Co. Incorporated
Credit Suisse First Boston Corporation
Chase Securities Inc.
Donaldson, Lufkin & Jenrette Securities Corporation
Salomon Smith Barney Inc.

c/o Morgan Stanley & Co. Incorporated
1585 Broadway
New York, New York  10036

Dear Sirs:

            Continental Airlines,  Inc., a Delaware corporation (the "Company"),
proposes that  Wilmington  Trust Company,  as trustee under each of the Original
Trusts (as defined below) (each a "Trustee"), issue and sell to the underwriters
named in  Schedule  II hereto its pass  through  certificates  in the  aggregate
principal amounts and with the interest rates and final  distribution  dates set
forth on  Schedule  I hereto  (the  "Offered  Certificates")  on the  terms  and
conditions stated herein.

            The Offered  Certificates  will be issued pursuant to a Pass Through
Trust Agreement dated as of September 25, 1997 (the "Basic Agreement"),  between
the Company and the  Trustee,  as  supplemented  with  respect to each series of
Offered  Certificates by a separate Pass Through Trust Supplement to be dated as
of the  Closing  Date (as  defined  below)  (individually,  an  "Original  Trust
Supplement"),  between  the  Company and the  Trustee  (the Basic  Agreement  as
supplemented  by each such Original  Trust  Supplement  being referred to herein
individually as an "Original Pass Through Trust Agreement").  The Original Trust
Supplements  are  related to the  creation  and  administration  of  Continental
Airlines  Pass  Through  Trust,  Series  1998-3A-1-O  (the  "Class A-1  Trust"),
Continental  Airlines Pass Through  Trust,  Series  1998-3A-2-O  (the "Class A-2
Trust"), Continental Airlines Pass Through Trust, Series 1998-3B-O (the "Class B
Trust"), Continental Airlines Pass Through Trust, Series 1998-3C-1-O (the "Class
C-1 Trust") and Continental Airlines Pass Through Trust, Series 1998-3C-2-O (the
"Class C-2 Trust";  together with the Class A-1 Trust,  the Class A-2 Trust, the
Class B Trust and the Class C-1 Trust, the "Original  Trusts").  As used herein,
unless the context otherwise requires,  the term  "Underwriters"  shall mean the
firms named as Underwriters in Schedule II, and the term "you" shall mean Morgan
Stanley & Co. Incorporated ("Morgan Stanley").




            The cash  proceeds of the offering of Offered  Certificates  by each
Original Trust will be paid to First  Security Bank,  N.A., as escrow agent (the
"Escrow  Agent"),  under an Escrow and Paying Agent  Agreement  among the Escrow
Agent, the Underwriters, the Trustee of such Original Trust and Wilmington Trust
Company, as paying agent (the "Paying Agent"), for the benefit of the holders of
Offered   Certificates   issued  by  such  Original  Trust  (each,   an  "Escrow
Agreement").  The  Escrow  Agent  will  deposit  such  cash  proceeds  (each,  a
"Deposit") with Credit Suisse First Boston, New York branch (the  "Depositary"),
in accordance with a Deposit Agreement  relating to such Original Trust (each, a
"Deposit  Agreement"),  and will  withdraw  Deposits  upon  request to allow the
Trustee to purchase  Equipment Notes (as defined in the Note Purchase  Agreement
referred  to herein)  referred  to herein  from time to time  pursuant to a Note
Purchase  Agreement  to be dated as of the  Closing  Date  (the  "Note  Purchase
Agreement") among the Company,  Wilmington Trust Company,  as Trustee of each of
the Original  Trusts,  as  Subordination  Agent (as hereinafter  defined) and as
Paying Agent, and the Escrow Agent.  Each Escrow Agent will issue receipts to be
attached to each related Offered Certificate  ("Escrow  Receipts")  representing
each  holder's  fractional  undivided  interest in amounts  deposited  with such
Escrow  Agent and will pay to such  holders  through  the related  Paying  Agent
interest  accrued on the Deposits and received by such Paying Agent  pursuant to
the related  Deposit  Agreement at a rate per annum equal to the  interest  rate
applicable to the corresponding Offered Certificates.

            On the earlier of (i) the first Business Day after July 31, 1999 or,
if later, the fifth Business Day after the Delivery Period  Termination Date (as
defined in the Note Purchase  Agreement)  and (ii) the fifth  Business Day after
the occurrence of a Triggering Event (as defined in the Intercreditor Agreement)
(such Business Day, the "Trust Transfer Date"), each of the Original Trusts will
transfer  and assign all of its assets and rights to a  newly-created  successor
trust with  substantially  identical terms except as described in the Prospectus
Supplement (as  hereinafter  defined) (each, a "Successor  Trust" and,  together
with the Original  Trusts,  the "Trusts")  governed by the Basic  Agreement,  as
supplemented  with  respect  to each  series of  Offered  Certificates  by a new
separate  Pass  Through  Trust  Supplement  (individually,  a  "Successor  Trust
Supplement"),  between  the Company and the  Trustee  (the Basic  Agreement,  as
supplemented by each such Successor Trust  Supplement,  being referred to herein
individually  as a "Successor Pass Through Trust  Agreement" and,  together with
the Original Pass Through Trust Agreements,  the "Designated Agreements").  Each
Offered  Certificate  outstanding  on the Trust Transfer Date will represent the
same interest in the Successor Trust as the Offered  Certificate  represented in
the Original Trust.  Wilmington Trust Company initially will also act as trustee
of the Successor Trusts (each, a "Successor Trustee").

            Certain amounts of interest payable on the Offered Certificates will
be entitled  to the  benefits of  separate  liquidity  facilities.  Westdeutsche
Landesbank  Girozentrale  ("West LB"), acting through its New York branch,  will
enter into  separate  revolving  credit  agreements  with respect to each of the
Class A-1 Trust and the Class A-2 Trust  (collectively,  the "West LB  Liquidity
Facilities")  to be dated as of the Closing  Date for the benefit of the holders
of the Offered  Certificates  issued by such  Original  Trusts.  Morgan  Stanley
Capital Services,  Inc.  ("MSCS",  and collectively with West LB, the "Liquidity
Providers") will enter into separate revolving credit agreements with respect to
each of the  Class B  Trust,  the  Class  C-1  Trust  and the  Class  C-2  Trust



(collectively,  the "MSCS Liquidity  Facilities",  and together with the West LB
Liquidity Facilities,  the "Liquidity Facilities") to be dated as of the Closing
Date for the benefit of the holders of the Offered  Certificates  issued by such
Original  Trusts.  The  Liquidity  Providers  and  the  holders  of the  Offered
Certificates  will be entitled to the benefits of an Intercreditor  Agreement to
be dated as of the  Closing  Date  (the  "Intercreditor  Agreement")  among  the
Trustees,   Wilmington  Trust  Company,   as  subordination  agent  and  trustee
thereunder (the "Subordination Agent"), and the Liquidity Providers.

            The Company has filed with the  Securities  and Exchange  Commission
(the  "Commission")  a shelf  registration  statement  on  Form  S-3  (File  No.
333-61601)  relating to pass through  certificates (such registration  statement
(including the respective exhibits thereto and the respective documents filed by
the Company with the Commission pursuant to the Securities Exchange Act of 1934,
as  amended,  and  the  rules  and  regulations  of  the  Commission  thereunder
(collectively, the "Exchange Act"), that are incorporated by reference therein),
as amended at the date  hereof,  being herein  referred to as the  "Registration
Statement")  and the offering  thereof from time to time in accordance with Rule
415 of the Securities Act of 1933, as amended,  and the rules and regulations of
the Commission thereunder (collectively, the "Securities Act"). The Registration
Statement  has been declared  effective by the  Commission.  A final  prospectus
supplement  reflecting the terms of the Offered  Certificates,  the terms of the
offering  thereof and other  matters  relating to the Offered  Certificates,  as
further  specified in Section 4(d) hereof,  will be prepared and filed  together
with the  basic  prospectus  referred  to below  pursuant  to Rule 424 under the
Securities Act (such prospectus supplement,  in the form first filed on or after
the  date  hereof  pursuant  to  Rule  424,  being  herein  referred  to as  the
"Prospectus  Supplement" and any such prospectus supplement in the form or forms
filed prior to the filing of the Prospectus  Supplement being herein referred to
as a "Preliminary Prospectus Supplement").  The basic prospectus included in the
Registration   Statement   and  relating  to  all   offerings  of  pass  through
certificates under the Registration Statement, as supplemented by the Prospectus
Supplement,  and including the documents  incorporated by reference therein,  is
herein called the "Prospectus", except that, if such basic prospectus is amended
or  supplemented  on or prior to the date on which the Prospectus  Supplement is
first filed  pursuant  to Rule 424,  the term  "Prospectus"  shall refer to such
basic  prospectus  as so  amended or  supplemented  and as  supplemented  by the
Prospectus  Supplement.  Any  reference  herein  to  the  terms  "amendment"  or
"supplement"  with  respect  to the  Prospectus  or any  Preliminary  Prospectus
Supplement  shall be deemed to refer to and include any documents filed with the
Commission  under the Exchange Act after the date the  Prospectus  is filed with
the Commission,  or the date of such Preliminary Prospectus  Supplement,  as the
case may be, and incorporated  therein by reference  pursuant to Item 12 of Form
S-3 under the Securities Act.

            Capitalized terms not otherwise defined in this Agreement shall have
the meanings specified therefor in the Original Pass Through Trust Agreements or
in the Note Purchase Agreement or the Intercreditor Agreement referred to in the
Designated  Agreements;  PROVIDED  that,  as used in this  Agreement,  the  term
"Operative Agreements" shall mean the Deposit Agreements, the Escrow Agreements,
the Intercreditor Agreement, the Liquidity Facilities, the Guarantee Agreements,



the Designated  Agreements,  the Assignment and Assumption  Agreements,  and the
Financing Agreements (as defined in the Note Purchase Agreement).

            1.  REPRESENTATIONS  AND WARRANTIES.  (a) The Company represents and
warrants to, and agrees with each Underwriter that:

            (i) The Company meets the requirements for use of Form S-3 under the
      Securities Act; the Registration  Statement has become effective;  and, on
      the  original   effective  date  of  the   Registration   Statement,   the
      Registration   Statement  complied  in  all  material  respects  with  the
      requirements  of  the  Securities  Act.  On  the  effective  date  of  the
      Registration  Statement,  the  Registration  Statement did not include any
      untrue  statement of a material  fact or omit to state any  material  fact
      required to be stated therein or necessary to make the statements  therein
      not  misleading,  and on the date  hereof  and on the  Closing  Date,  the
      Prospectus,  as  amended  and  supplemented,  if the  Company  shall  have
      furnished  any  amendment  or  supplement  thereto,  does not and will not
      include an untrue  statement of a material  fact and does not and will not
      omit to state a material  fact  necessary in order to make the  statements
      therein, in the light of the circumstances under which they were made, not
      misleading.  The preceding sentence does not apply to (x) statements in or
      omissions from the Registration  Statement,  the Preliminary Prospectus or
      the Prospectus based upon (A) written information furnished to the Company
      by any  Underwriter  through  Morgan  Stanley  expressly  for use  therein
      ("Underwriter   Information")  or  (B)  the  Depositary   Information  (as
      hereinafter  defined) or (y)  statements or omissions in that part of each
      Registration Statement which shall constitute the Statement of Eligibility
      of the Trustee  under the Trust  Indenture  Act of 1939,  as amended  (the
      "Trust Indenture Act"), on Form T-1.

            (ii) The  documents  incorporated  by  reference  in the  Prospectus
      pursuant to Item 12 of Form S-3 under the Securities Act, at the time they
      were or hereafter,  during the period  mentioned in paragraph  4(a) below,
      are filed with the  Commission,  complied  and will comply in all material
      respects with the requirements of the Exchange Act.

            (iii) The  Company  has been duly  incorporated  and is an  existing
      corporation in good standing under the laws of the State of Delaware, with
      corporate  power and authority to own,  lease and operate its property and
      to conduct its business as described in the Prospectus; and the Company is
      duly qualified to do business as a foreign corporation in good standing in
      all other jurisdictions in which its ownership or lease of property or the
      conduct of its  business  requires  such  qualification,  except where the
      failure to be so qualified would not have a material adverse effect on the
      condition  (financial or  otherwise),  business,  properties or results of
      operations  of the Company and its  consolidated  subsidiaries  taken as a
      whole (a "Continental Material Adverse Effect").

            (iv) Each of Continental  Micronesia,  Inc., Air Micronesia Inc. and
      Continental  Express,  Inc.  (together,  the "Subsidiaries") has been duly
      incorporated  and is an existing  corporation  in good standing  under the
      laws of the  jurisdiction of its  incorporation,  with corporate power and
      authority  to own,  lease and  operate its  properties  and to conduct its



      business as  described  in the  Prospectus;  and each  Subsidiary  is duly
      qualified to do business as a foreign  corporation in good standing in all
      other  jurisdictions  in which its  ownership  or lease of property or the
      conduct of its  business  requires  such  qualification,  except where the
      failure to be so qualified would not have a Continental  Material  Adverse
      Effect; all of the issued and outstanding capital stock of each Subsidiary
      has  been  duly  authorized  and  validly  issued  and is  fully  paid and
      nonassessable;   and,  except  as  described  in  the   Prospectus,   each
      Subsidiary's  capital  stock  owned by the  Company,  directly  or through
      subsidiaries, is owned free from liens, encumbrances and defects.

            (v) Except as  described  in the  Prospectus,  the Company is not in
      default in the  performance  or observance of any  obligation,  agreement,
      covenant or condition contained in any contract, indenture, mortgage, loan
      agreement,  note,  lease or other  instrument to which it is a party or by
      which it may be bound or to which any of its  properties  may be  subject,
      except  for such  defaults  that  would  not have a  Continental  Material
      Adverse Effect. The execution,  delivery and performance of this Agreement
      and the  Operative  Agreements  to which the Company is or will be a party
      and the consummation of the transactions  contemplated  herein and therein
      have been duly authorized by all necessary corporate action of the Company
      and will not  result in any  breach  of any of the  terms,  conditions  or
      provisions of, or constitute a default under, or result in the creation or
      imposition of any lien, charge or encumbrance (other than any lien, charge
      or encumbrance created under any Operative Agreement) upon any property or
      assets of the Company pursuant to any indenture, loan agreement, contract,
      mortgage,  note, lease or other instrument to which the Company is a party
      or by which the  Company  may be bound or to which any of the  property or
      assets of the Company is subject,  which breach,  default, lien, charge or
      encumbrance,  individually  or in the aggregate,  would have a Continental
      Material  Adverse  Effect,  nor  will  any  such  execution,  delivery  or
      performance  result in any  violation of the  provisions of the charter or
      by-laws of the Company or any statute,  any rule,  regulation  or order of
      any governmental  agency or body or any court having jurisdiction over the
      Company.

            (vi) No  consent,  approval,  authorization,  or order of, or filing
      with,  any  governmental  agency or body or any court is required  for the
      valid  authorization,  execution  and  delivery  by the  Company  of  this
      Agreement and the  Operative  Agreements to which it is or will be a party
      and for the  consummation  of the  transactions  contemplated  herein  and
      therein,  except (y) such as may be required under the Securities Act, the
      Trust  Indenture  Act, the securities or "blue sky" or similar laws of the
      various states and of foreign  jurisdictions  or rules and  regulations of
      the National  Association of Securities Dealers,  Inc., and (z) filings or
      recordings with the Federal Aviation  Administration (the "FAA") and under
      the  Uniform  Commercial  Code as is in effect in the State of Texas,  the
      State of  Delaware  and the State of Utah,  which  filings  or  recordings
      referred to in this  clause (z),  with  respect to any  particular  set of
      Financing  Agreements,  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  prior  to the  applicable  Funding  Date for the
      Aircraft related to such Financing Agreements.




            (vii)  This  Agreement  has  been  duly  authorized,   executed  and
      delivered by the Company and the Operative Agreements to which the Company
      will be a party will be duly  executed and  delivered by the Company on or
      prior to the Closing Date or the applicable  Funding Date, as the case may
      be.

            (viii) The Operative Agreements to which the Company is or will be a
      party, when duly executed and delivered by the Company, assuming that such
      Operative Agreements have been duly authorized, executed and delivered by,
      and constitute  the legal,  valid and binding  obligations  of, each other
      party  thereto,  will  constitute  valid and  binding  obligations  of the
      Company  enforceable  in  accordance  with  their  terms,  except  (w)  as
      enforcement thereof may be limited by bankruptcy,  insolvency  (including,
      without   limitation,   all  laws  relating  to   fraudulent   transfers),
      reorganization,  moratorium  or other  similar  laws now or  hereafter  in
      effect relating to creditors' rights generally, (x) as enforcement thereof
      is  subject  to  general  principles  of  equity  (regardless  of  whether
      enforcement  is considered in a proceeding in equity or at law),  (y) that
      the  enforceability  of the Leases may also be limited by applicable  laws
      which may affect the remedies provided therein but which do not affect the
      validity of the Leases or make such remedies  inadequate for the practical
      realization of the benefits  intended to be provided  thereby and (z) with
      respect to  indemnification  and contribution  provisions,  as enforcement
      thereof may be limited by applicable law, and subject,  in the case of the
      Successor  Pass Through  Trust  Agreements,  to the delayed  effectiveness
      thereof  as  set  forth  therein.  The  Basic  Agreement  as  executed  is
      substantially  in the form filed as an exhibit  to the  Company's  current
      report on Form 8-K dated  September  25, 1997 and has been duly  qualified
      under the Trust Indenture Act. The Offered Certificates and the Designated
      Agreements  to which the Company is, or is to be, a party will  conform in
      all material respects to the descriptions thereof in the Prospectus.

            (ix) The consolidated  financial statements included or incorporated
      by  reference in the  Registration  Statement,  together  with the related
      notes  thereto,  present  fairly in all material  respects  the  financial
      position  of the Company and its  consolidated  subsidiaries  at the dates
      indicated and the consolidated results of operations and cash flows of the
      Company and its consolidated  subsidiaries for the periods specified. Such
      financial  statements  have been  prepared in  conformity  with  generally
      accepted  accounting  principles  applied on a consistent basis throughout
      the periods  involved,  except as otherwise stated therein and except that
      the unaudited financial statements do not have all required footnotes. The
      financial  statement  schedules,  if  any,  included  or  incorporated  by
      reference in the Registration  Statement present the information  required
      to be stated therein.

            (x) The  Company is a  "citizen  of the  United  States"  within the
      meaning of Section  40102(a)(15) of Title 49 of the United States Code, as
      amended,  holding  an air  carrier  operating  certificate  issued  by the
      Secretary  of  Transportation  pursuant  to Chapter 447 of Title 49 of the
      United  States Code,  as amended,  for aircraft  capable of carrying 10 or
      more  individuals or 6,000 pounds or more of cargo. All of the outstanding



      shares of  capital  stock of the  Company  have been duly  authorized  and
      validly issued and are fully paid and non-assessable.

            (xi) On or prior to the Closing  Date,  the  issuance of the Offered
      Certificates  will be duly authorized by the Trustee.  When duly executed,
      authenticated,  issued and  delivered  in the manner  provided  for in the
      Original Pass Through Trust  Agreements  and sold and paid for as provided
      in this Agreement,  the Offered  Certificates  will be legally and validly
      issued and will be entitled to the benefits of the relevant  Original Pass
      Through Trust Agreements; based on applicable law as in effect on the date
      hereof,  upon the execution and delivery of the  Assignment and Assumption
      Agreements in accordance with the Original Pass Through Trust  Agreements,
      the Offered Certificates will be legally and validly outstanding under the
      related  Successor  Pass  Through  Trust  Agreements;  and when  executed,
      authenticated,  issued and  delivered  in the manner  provided  for in the
      Escrow Agreements,  the Escrow Receipts will be legally and validly issued
      and will be entitled to the benefits of the related Escrow Agreements.

            (xii)  Except as disclosed  in the  Prospectus,  the Company and the
      Subsidiaries have good and marketable title to all real properties and all
      other  properties  and assets owned by them, in each case free from liens,
      encumbrances and defects except where the failure to have such title would
      not have a Continental Material Adverse Effect; and except as disclosed in
      the Prospectus,  the Company and the Subsidiaries  hold any leased real or
      personal  property under valid and  enforceable  leases with no exceptions
      that would have a Continental Material Adverse Effect.

            (xiii)  Except as disclosed in the  Prospectus,  there is no action,
      suit or proceeding before or by any governmental  agency or body or court,
      domestic or foreign,  now pending  or, to the  knowledge  of the  Company,
      threatened  against the Company or any of its subsidiaries or any of their
      respective  properties that  individually (or in the aggregate in the case
      of any class of related lawsuits),  could reasonably be expected to result
      in a  Continental  Material  Adverse  Effect or that could  reasonably  be
      expected  to  materially  and  adversely  affect the  consummation  of the
      transactions contemplated by this Agreement or the Operative Agreements.

            (xiv) Except as disclosed in the  Prospectus,  no labor dispute with
      the employees of the Company or any subsidiary  exists or to the knowledge
      of the Company is  imminent  that could  reasonably  be expected to have a
      Continental Material Adverse Effect.

            (xv) Each of the  Company  and the  Subsidiaries  has all  necessary
      consents,  authorizations,  approvals, orders, certificates and permits of
      and from,  and has made all  declarations  and filings with,  all federal,
      state,  local  and other  governmental  authorities,  all  self-regulatory
      organizations and all courts and other tribunals,  to own, lease,  license
      and use its  properties  and  assets and to conduct  its  business  in the
      manner described in the Prospectus,  except to the extent that the failure
      to so  obtain,  declare  or file  would  not have a  Continental  Material
      Adverse Effect.




            (xvi) Except as disclosed in the Prospectus, (x) neither the Company
      nor  any  of the  Subsidiaries  is in  violation  of  any  statute,  rule,
      regulation,  decision or order of any  governmental  agency or body or any
      court,  domestic or foreign,  relating to the use,  disposal or release of
      hazardous or toxic substances  (collectively,  "environmental laws"), owns
      or operates any real  property  contaminated  with any  substance  that is
      subject to any environmental  laws, or is subject to any claim relating to
      any environmental laws, which violation, contamination, liability or claim
      individually  or in  the  aggregate  is  reasonably  expected  to  have  a
      Continental  Material Adverse Effect,  and (y) the Company is not aware of
      any  pending  investigation  which  might  lead to  such a  claim  that is
      reasonably expected to have a Continental Material Adverse Effect.

            (xvii) The accountants  that examined and issued an auditors' report
      with respect to the consolidated  financial  statements of the Company and
      the financial  statement  schedules,  if any,  included or incorporated by
      reference in the Registration Statement are independent public accountants
      within the meaning of the Securities Act.

            (xviii)  Neither the Company nor any of the Original  Trusts is, nor
      (based on applicable  law as in effect on the date hereof) will any of the
      Successor  Trusts be, as of the execution  and delivery of the  Assignment
      and  Assumption  Agreements in  accordance  with the Original Pass Through
      Trust Agreements, an "investment company", or an entity "controlled" by an
      "investment company",  within the meaning of the Investment Company Act of
      1940, as amended (the "Investment  Company Act"), in each case required to
      register under the Investment  Company Act; and after giving effect to the
      offering and sale of the Offered  Certificates  and the application of the
      proceeds  thereof as  described  in the  Prospectus,  neither the Original
      Trusts  will be,  nor  (based on  applicable  law as in effect on the date
      hereof)  will any of the  Successor  Trusts  be, as of the  execution  and
      delivery of the Assignment and  Assumption  Agreements in accordance  with
      the  Original  Pass  Through  Trust   Agreements,   nor  will  the  escrow
      arrangements  contemplated by the Escrow  Agreement result in the creation
      of, an "investment  company",  or an entity "controlled" by an "investment
      company",  as defined in the Investment Company Act, in each case required
      to register under the Investment Company Act.

            (xix) This Agreement and the other Operative Agreements to which the
      Company is or will be a party will,  upon execution and delivery  thereof,
      conform in all material respects to the descriptions  thereof contained in
      the Prospectus  (other than, in the case of the Financing  Agreements,  as
      described in the Prospectus).

            (xx)  No  Appraiser  is an  affiliate  of  the  Company  or,  to the
      knowledge of the Company, has a substantial interest,  direct or indirect,
      in the Company. To the knowledge of the Company,  none of the officers and
      directors of any of such  Appraisers are connected with the Company or any
      of its affiliates as an officer, employee, promoter, underwriter, trustee,
      partner, director or person performing similar functions.




            (b) The Depositary represents and warrants to, and agrees with, each
Underwriter and the Company that:

            (i) The information pertaining to the Depositary set forth under the
      caption   "Description   of  the   Deposit   Agreements   --   Depositary"
      (collectively,  the "Depositary Information") in the Prospectus as amended
      and  supplemented,  if the Company  shall have  furnished any amendment or
      supplement thereto, does not, and will not as of the Closing Date, contain
      any untrue statement of a material fact.

            (ii) The Depositary has been duly organized and is validly  existing
      in good standing  under the laws of  Switzerland  and is duly qualified to
      conduct  banking  business  in the State of New York  through its New York
      branch,  with corporate  power and authority to own, lease and operate its
      property,   to  conduct  its  business  as  described  in  the  Depositary
      Information  and to enter  into and  perform  its  obligations  under this
      Agreement and the Operative  Agreements to which the Depositary is or will
      be a party.

            (iii) No consent,  approval,  authorization,  or order of, or filing
      with any  governmental  agency  or body or any court is  required  for the
      valid  authorization,  execution  and delivery by the  Depositary  of this
      Agreement and the Operative  Agreements to which the Depositary is or will
      be a party  and  for the  consummation  of the  transactions  contemplated
      herein and therein, except such as may have been obtained.

            (iv) The execution and delivery by the  Depositary of this Agreement
      and the Operative Agreements to which the Depositary is or will be a party
      and the consummation of the transactions  contemplated  herein and therein
      have been duly  authorized by the Depositary and will not violate any law,
      governmental  rule or regulation or its articles of association or by-laws
      or any  order,  writ,  injunction  or decree of any court or  governmental
      agency  against it or the  provisions of any  indenture,  loan  agreement,
      contract or other instrument to which it is a party or is bound.

            (v) This  Agreement  has been duly  executed  and  delivered  by the
      Depositary, and the Operative Agreements to which the Depositary will be a
      party will be duly executed and delivered by the Depositary on or prior to
      the Closing Date.

            (vi) The Operative  Agreements to which the Depositary is or will be
      a party, when duly executed and delivered by the Depositary, assuming that
      such  Operative  Agreements  have  been  duly  authorized,   executed  and
      delivered by, and constitute the legal, valid and binding  obligations of,
      each other party thereto,  will  constitute  the legal,  valid and binding
      obligations of the Depositary  enforceable in accordance with their terms,
      except (x) as enforcement thereof may be limited by bankruptcy, insolvency
      (including,   without   limitation,   all  laws   relating  to  fraudulent
      transfers),  reorganization,  moratorium  or  other  similar  laws  now or
      hereinafter in effect relating to creditors'  rights  generally and (y) as
      enforcement thereof is subject to general principles of equity (regardless
      of whether enforcement is considered in a proceeding in equity or at law).




            (vi)  Payments of interest and  principal in respect of the Deposits
      are not subject under the laws of Switzerland or any political subdivision
      thereof to any withholdings or similar charges or deductions.

            (c)  The  parties  agree  that  any  certificate  signed  by a  duly
authorized officer of the Company and delivered to an Underwriter, or to counsel
for the Underwriters,  on the Closing Date and in connection with this Agreement
or the offering of the Offered  Certificates,  shall be deemed a  representation
and warranty by (and only by) the Company to the  Underwriters as to the matters
covered thereby.

            2. PURCHASE,  SALE AND DELIVERY OF OFFERED CERTIFICATES.  (a) On the
basis of the  representations,  warranties and agreements herein contained,  but
subject to the terms and the conditions  herein set forth, the Company agrees to
cause the Trustees to sell to each  Underwriter,  and each  Underwriter  agrees,
severally and not jointly, to purchase from the Trustees, at a purchase price of
100% of the principal amount thereof,  the aggregate principal amount of Offered
Certificates of each Pass Through Certificate Designation set forth opposite the
name of such Underwriter in Schedule II.  Concurrently  with the issuance of the
Offered Certificates,  the Escrow Agents shall issue and deliver to the Trustees
the Escrow Receipts in accordance with the terms of the Escrow Agreements, which
Escrow Receipts shall be attached to the related Offered Certificates.

            (b) The Company is advised by you that the  Underwriters  propose to
make a  public  offering  of  the  Offered  Certificates  as  set  forth  in the
Prospectus  Supplement as soon after this  Agreement has been entered into as in
your  judgment  is  advisable.  The  Company is further  advised by you that the
Offered  Certificates are to be offered to the public initially at 100% of their
principal amount -- the public offering price -- plus accrued interest,  if any,
and to certain dealers selected by the Underwriters at concessions not in excess
of the concessions set forth in the Prospectus,  and that the  Underwriters  may
allow,  and  such  dealers  may  reallow,  concessions  not  in  excess  of  the
concessions set forth in the Prospectus to certain other dealers.

            (c)  As  underwriting  commission  and  other  compensation  to  the
Underwriters  for their  respective  commitments  and  obligations  hereunder in
respect of the Offered Certificates,  including their respective undertakings to
distribute the Offered Certificates,  the Company will pay to Morgan Stanley for
the  accounts of the  Underwriters  the amount set forth in Schedule III hereto,
which amount shall be allocated among the Underwriters in the manner  determined
by Morgan Stanley and the other  Underwriters.  Such payment will be made on the
Closing  Date   simultaneously  with  the  issuance  and  sale  of  the  Offered
Certificates  (with attached Escrow  Receipts) to the  Underwriters.  Payment of
such  compensation  shall be made by Federal  funds  check or other  immediately
available funds.

            (d)  Delivery  of and payment  for the  Offered  Certificates  (with
attached Escrow Receipts) shall be made at the offices of Hughes, Hubbard & Reed
LLP at One  Battery  Park  Plaza,  New York,  New York  10004 at 10:00  A.M.  on
November 3, 1998 or such other date, time and place as may be agreed upon by the
Company  and you (such date and time of  delivery  and  payment  for the Offered
Certificates  (with attached  Escrow  Receipts) being herein called the "Closing



Date").  Delivery of the Offered  Certificates  (with attached Escrow  Receipts)
issued by each  Original  Trust shall be made to your account at The  Depository
Trust Company  ("DTC") for the respective  accounts of the several  Underwriters
against payment by the  Underwriters of the purchase price thereof.  Payment for
the Offered  Certificates  issued by each Original  Trust and the related Escrow
Receipts  attached thereto shall be made by the Underwriters by wire transfer of
immediately  available funds to the accounts and in the manner  specified in the
related Escrow Agreements (PROVIDED, that if the Company notifies Morgan Stanley
that a Delivery Date is occurring on the Closing Date, a portion of such payment
in the amount  specified by the Company shall be paid to the accounts and in the
manner  specified  in  the  related   Participation   Agreement).   The  Offered
Certificates (with attached Escrow Receipts) issued by each Original Trust shall
be in the form of one or more fully registered global certificates, and shall be
deposited  with the related  Trustee as custodian for DTC and  registered in the
name of Cede & Co.

            (e) The  Company  agrees  to have  the  Offered  Certificates  (with
attached  Escrow  Receipts)  available for inspection and checking by you in New
York, New York not later than 1:00 P.M. on the business day prior to the Closing
Date.

            (f) It is understood  that each  Underwriter  has authorized you, on
its behalf and for its account,  to accept  delivery  of,  receipt for, and make
payment of the  purchase  price for,  the Offered  Certificates  (with  attached
Escrow Receipts) that it has agreed to purchase.  You, individually and not as a
representative, may (but shall not be obligated to) make payment of the purchase
price for the Offered  Certificates  to be  purchased by any  Underwriter  whose
check or checks shall not have been received by the Closing Date.

            3. CONDITIONS OF UNDERWRITERS' OBLIGATIONS.  The several obligations
of the Underwriters to purchase and pay for the Offered Certificates pursuant to
this Agreement are subject to the following conditions:

            (a) On the Closing Date, no stop order suspending the  effectiveness
      of the Registration  Statement shall have been issued under the Securities
      Act and no proceedings  therefor shall have been  instituted or threatened
      by the Commission.

            (b) On the  Closing  Date,  you shall  have  received  an opinion of
      Hughes  Hubbard & Reed LLP, as counsel for the Company,  dated the Closing
      Date,  in  form  and  substance   reasonably   satisfactory   to  you  and
      substantially to the effect set forth in Exhibit A hereto.

            (c) On the Closing  Date,  you shall have received an opinion of the
      General  Counsel  of the  Company,  dated the  Closing  Date,  in form and
      substance  reasonably  satisfactory to you and substantially to the effect
      set forth in Exhibit B hereto.

            (d) On the  Closing  Date,  you shall  have  received  an opinion of
      Richards,   Layton  &  Finger,   counsel  for  Wilmington  Trust  Company,
      individually and as Trustee,  Subordination  Agent and Paying Agent, dated
      the Closing Date, in form and substance reasonably satisfactory to you and
      substantially to the effect set forth in Exhibit C hereto.




            (e) On the Closing Date,  you shall have received an opinion of Ray,
      Quinney & Nebeker,  counsel for the Escrow Agent,  dated the Closing Date,
      in form and substance reasonably  satisfactory to you and substantially to
      the effect set forth in Exhibit D hereto.

            (f) On the Closing  Date,  you shall have received an opinion of two
      members of the  central  legal  department  of West LB,  dated the Closing
      Date,  in  form  and  substance   reasonably   satisfactory   to  you  and
      substantially to the effect set forth in Exhibit E hereto.

            (g) On the Closing  Date,  you shall have received an opinion of the
      New York in-house  counsel of West LB, dated the Closing Date, in form and
      substance  reasonably  satisfactory to you and substantially to the effect
      set forth in Exhibit F hereto.

            (h) On the  Closing  Date,  you shall  have  received  an opinion of
      Shearman & Sterling, counsel for West LB and MSCS, dated the Closing Date,
      in form and substance reasonably  satisfactory to you and substantially to
      the effect set forth in Exhibit G hereto.

            (i) On the Closing  Date,  you shall have received an opinion of New
      York in-house  counsel to MSCS and the Guarantor,  dated the Closing Date,
      in form and substance reasonably  satisfactory to you and substantially to
      the effect set forth in Exhibit H hereto.

            (j) On the  Closing  Date,  you shall  have  received  an opinion of
      Giovanni  Peditto,  Swiss in-house  counsel for the Depositary,  dated the
      Closing  Date, in form and substance  reasonably  satisfactory  to you and
      substantially to the effect set forth in Exhibit I hereto.

            (k) On the  Closing  Date,  you shall  have  received  an opinion of
      Louise Firestone, New York in-house counsel for the Depositary,  dated the
      Closing  Date, in form and substance  reasonably  satisfactory  to you and
      substantially to the effect set forth in Exhibit J hereto.

            (l) On the  Closing  Date,  you shall  have  received  an opinion of
      Milbank, Tweed, Hadley & McCloy as counsel for the Underwriters,  dated as
      of the Closing Date,  with respect to the issuance and sale of the Offered
      Certificates, the Registration Statement, the Prospectus and other related
      matters as the Underwriters may reasonably require.

            (m)  Subsequent  to the  execution  and delivery of this  Agreement,
      there shall not have  occurred  any change,  or any  development  or event
      involving a prospective  change,  in the  condition  (financial or other),
      business,  properties  or results of  operations  of the  Company  and its
      subsidiaries  considered  as one  enterprise  that, in your  judgment,  is
      material and adverse and that makes it, in your judgment, impracticable to
      proceed  with  the  completion  of the  public  offering  of  the  Offered
      Certificates  on  the  terms  and  in  the  manner   contemplated  by  the
      Prospectus.




            (n) You shall have received on the Closing Date a certificate, dated
      the Closing Date and signed by the President or any Vice  President of the
      Company,  to the effect that the  representations  and  warranties  of the
      Company contained in this Agreement are true and correct as of the Closing
      Date as if made on the Closing Date (except to the extent that they relate
      solely to an earlier  date,  in which case they shall be true and accurate
      as of  such  earlier  date),  that  the  Company  has  performed  all  its
      obligations to be performed  hereunder on or prior to the Closing Date and
      that,  subsequent to the execution and delivery of this  Agreement,  there
      shall not have occurred any material adverse change, or any development or
      event involving a prospective  material  adverse change,  in the condition
      (financial or other), business, properties or results of operations of the
      Company and its subsidiaries  considered as one enterprise,  except as set
      forth in or contemplated by the Prospectus.

            (o) You shall have  received  from Ernst & Young LLP a letter  dated
      the date hereof, in form and substance satisfactory to you.

            (p)  Subsequent to the execution and delivery of this  Agreement and
      prior to the Closing Date,  there shall not have been any  downgrading  in
      the rating accorded any of the Company's  securities  (except for any pass
      through  certificates) by any "nationally  recognized  statistical  rating
      organization",  as such term is defined  for  purposes  of Rule  436(g)(2)
      under  the  Securities  Act,  or any  public  announcement  that  any such
      organization has under  surveillance or review,  in each case for possible
      change,  its  ratings  of any such  securities  other  than  pass  through
      certificates  (other than an announcement with positive  implications of a
      possible upgrading, and no implication of a possible downgrading,  of such
      rating).

            (q) Each of the Appraisers  shall have furnished to the Underwriters
      a letter  from such  Appraiser,  addressed  to the  Company  and dated the
      Closing Date, confirming that such Appraiser and each of its directors and
      officers (i) is not an affiliate of the Company or any of its  affiliates,
      (ii) does not have any substantial  interest,  direct or indirect,  in the
      Company  or any of its  affiliates  and  (iii) is not  connected  with the
      Company  or any of  its  affiliates  as an  officer,  employee,  promoter,
      underwriter,  trustee,  partner,  director  or person  performing  similar
      functions.

            (r) At the Closing  Date,  each of the Operative  Agreements  (other
      than  the  Assignment   and   Assumption   Agreements  and  the  Financing
      Agreements)  shall have been duly  executed  and  delivered by each of the
      parties  thereto;  and the  representations  and warranties of the Company
      contained in each of such executed Operative  Agreements shall be true and
      correct as of the  Closing  Date  (except to the extent  that they  relate
      solely to an earlier date, in which case they shall be true and correct as
      of  such  earlier  date)  and  the  Underwriters  shall  have  received  a
      certificate of the President or a Vice President of the Company,  dated as
      of the Closing Date, to such effect.

            (s) On the Closing Date, the Offered Certificates shall be rated (x)
      not lower than "AA+", in the case of the Offered Certificates of the Class



      A-1 Trust,  not lower than "AA+",  in the case of Offered  Certificates of
      the Class A-2 Trust,  not lower  than  "AA-",  in the case of the  Offered
      Certificates of the Class B Trust, not lower than "A-", in the case of the
      Offered  Certificates of the Class C-1 Trust,  and not lower than "A-", in
      the case of the Offered Certificates of the Class C-2 Trust, by Standard &
      Poor's Ratings  Service,  and (y) not lower than "Aa3", in the case of the
      Offered  Certificates of the Class A-1 Trust, not lower than "Aa3", in the
      case of the Offered  Certificates  in the Class A-2 Trust,  not lower than
      "A2", in the case of the Offered  Certificates  of the Class B Trust,  not
      lower than "Baa1",  in the case of the Offered  Certificates  of the Class
      C-1  Trust,  and  not  lower  than  "Baa1",  in the  case  of the  Offered
      Certificates of the Class C-2 Trust, by Moody's Investors Service, Inc.

            (t) On the Closing Date, the  representations  and warranties of the
      Depositary  contained  in this  Agreement  shall be true and correct as if
      made on the Closing Date (except to the extent that they relate  solely to
      an earlier  date,  in which case they shall be true and correct as of such
      earlier date).

            (u) You shall have  received  from Ernst & Young LLP a letter  dated
      the Closing Date which meets the  requirements  of subsection  (o) of this
      Section,  except that the specified  date  referred to in such  subsection
      will be a date not more than three business days prior to the Closing Date
      for the purposes of this subsection.

            The Company will furnish the Underwriters with such conformed copies
of such  opinions,  certificates,  letters  and  documents  as the  Underwriters
reasonably request.

            4. CERTAIN COVENANTS OF THE COMPANY. The Company covenants with each
Underwriter as follows:

            (a) During the period  described in the  following  sentence of this
      Section  4(a),  the Company  shall  advise you promptly of any proposal to
      amend or supplement the Registration  Statement or the Prospectus  (except
      by  documents  filed  under the  Exchange  Act) and will not  effect  such
      amendment or supplement (except by documents filed under the Exchange Act)
      without your consent, which consent will not be unreasonably withheld. If,
      at any time after the public  offering of the Offered  Certificates as the
      Prospectus is required by law to be delivered in connection  with sales of
      the Offered  Certificates  by an  Underwriter  or dealer,  any event shall
      occur as a  result  of which it is  necessary  to amend  the  Registration
      Statement  or  amend or  supplement  the  Prospectus  in order to make the
      statements  therein, in the light of the circumstances when the Prospectus
      is delivered to a purchaser, not misleading in any material respect, or if
      it is necessary to amend the Registration Statement or amend or supplement
      the  Prospectus to comply with law, the Company shall prepare and furnish,
      at its own expense,  to the  Underwriters  and to the dealers (whose names
      and   addresses  you  will  furnish  to  the  Company)  to  which  Offered
      Certificates  may have been sold by you on behalf of the  Underwriters and
      to any other dealers upon request, either amendments or supplements to the
      Prospectus  so that the  statements  in the  Prospectus  as so  amended or
      supplemented  will  not,  in the  light  of  the  circumstances  when  the



      Prospectus  is  delivered to a purchaser,  be  misleading  in any material
      respect or amendments or supplements to the Registration  Statement or the
      Prospectus so that the  Registration  Statement or the  Prospectus,  as so
      amended or supplemented, will comply with law and cause such amendments or
      supplements to be filed promptly with the Commission.

            (b) During the period  mentioned in paragraph (a) above, the Company
      shall notify each Underwriter  immediately of (i) the effectiveness of any
      amendment  to the  Registration  Statement,  (ii) the  transmittal  to the
      Commission  for filing of any supplement to the Prospectus or any document
      that  would  as a result  thereof  be  incorporated  by  reference  in the
      Prospectus,  (iii) the receipt of any comments  from the  Commission  with
      respect to the  Registration  Statement,  the Prospectus or the Prospectus
      Supplement,  (iv) any request by the  Commission  for any amendment to the
      Registration  Statement  or  any  supplement  to  the  Prospectus  or  for
      additional information relating thereto or to any document incorporated by
      reference in the  Prospectus  and (v) receipt by the Company of any notice
      of the  issuance  by the  Commission  of any  stop  order  suspending  the
      effectiveness  of  the  Registration  Statement,  the  suspension  of  the
      qualification  of the  Offered  Certificates  for  offering or sale in any
      jurisdiction,  or the institution or threatening of any proceeding for any
      of such purposes; and the Company agrees to use every reasonable effort to
      prevent  the  issuance  of any such stop order  and,  if any such order is
      issued,  to obtain the lifting thereof at the earliest possible moment and
      the Company shall  (subject to the proviso to Section 4(e))  endeavor,  in
      cooperation  with the  Underwriters,  to prevent the  issuance of any such
      stop order suspending such qualification and, if any such order is issued,
      to obtain the lifting thereof at the earliest possible moment.

            (c) During the period  mentioned in paragraph (a) above, the Company
      will furnish to each of the  Underwriters as many conformed  copies of the
      Registration  Statement  (as  originally  filed)  and all  amendments  and
      supplements to such documents  (excluding all exhibits and documents filed
      therewith  or  incorporated  by reference  therein) and as many  conformed
      copies of all consents and  certificates of experts,  in each case as soon
      as available and in such quantities as each of the Underwriters reasonably
      requests.

            (d) Promptly following the execution of this Agreement,  the Company
      will prepare a Prospectus Supplement that complies with the Securities Act
      and that sets forth the principal  amount of the Offered  Certificates and
      their terms (including,  without limitation,  terms of the Escrow Receipts
      attached to the  Offered  Certificates)  not  otherwise  specified  in the
      Preliminary  Prospectus Supplement or the basic prospectus included in the
      Registration Statement, the name of each Underwriter  participating in the
      offering and the principal  amount of the Offered  Certificates  that each
      severally has agreed to purchase,  the name of each  Underwriter,  if any,
      acting  as  representative  of the  Underwriters  in  connection  with the
      offering,  the price at which the Offered Certificates are to be purchased
      by the  Underwriters  from  the  Original  Trustees,  any  initial  public
      offering  price,  any selling  concession and  reallowance and any delayed
      delivery  arrangements,  and such other information as you and the Company



      deem   appropriate  in  connection   with  the  offering  of  the  Offered
      Certificates.  The Company will timely  transmit  copies of the Prospectus
      Supplement  to the  Commission  for filing  pursuant to Rule 424 under the
      Securities Act.

            (e)  The  Company  shall,  in  cooperation  with  the  Underwriters,
      endeavor to arrange for the qualification of the Offered  Certificates for
      offer and sale under the applicable  securities or "blue sky" laws of such
      jurisdictions in the United States as Morgan Stanley reasonably designates
      and will  endeavor to maintain  such  qualifications  in effect so long as
      required for the distribution of such Offered Certificates;  PROVIDED that
      the Company shall not be required to (i) qualify as a foreign  corporation
      or as a dealer in  securities,  (ii) file a general  consent to service of
      process or (iii) subject itself to taxation in any such state.

            (f) During  the  period of ten years  after the  Closing  Date,  the
      Company will promptly furnish to each of the  Underwriters,  upon request,
      copies  of all  Annual  Reports  on Form  10-K  and any  definitive  proxy
      statement of the Company filed with the Commission.

            (g) Between the date of this  Agreement  and the Closing  Date,  the
      Company shall not,  without your prior written  consent,  offer,  sell, or
      enter into any  agreement  to sell (as public debt  securities  registered
      under the Securities Act (other than the Offered  Certificates) or as debt
      securities  which  may  be  resold  in  a  transaction   exempt  from  the
      registration  requirements  of the Securities Act in reliance on Rule 144A
      thereunder and which are marketed through the use of a disclosure document
      containing  substantially the same information as a prospectus for similar
      debt securities registered under the Securities Act), any equipment notes,
      pass  through  certificates,  equipment  trust  certificates  or equipment
      purchase  certificates  secured by aircraft owned or leased by the Company
      (or rights relating thereto).

            5.  INDEMNIFICATION  AND  CONTRIBUTION.  (a) The  Company  agrees to
indemnify  and hold  harmless  each  Underwriter,  and each Person,  if any, who
controls  such  Underwriter  within  the  meaning  of either  Section  15 of the
Securities  Act or Section 20 of the  Exchange  Act from and against any and all
losses,  claims,  damages and liabilities  (including,  without limitation,  any
legal or other  expenses  reasonably  incurred  by any  Underwriter  or any such
controlling person in connection with defending or investigating any such action
or claim)  caused by any untrue  statement  or  alleged  untrue  statement  of a
material fact contained in the Registration  Statement or any amendment thereof,
the Preliminary  Prospectus or the Prospectus (as amended or supplemented if the
Company shall have furnished any amendments or supplements  thereto),  or caused
by any omission or alleged omission to state therein a material fact required to
be stated  therein or necessary to make the statements  therein not  misleading,
except insofar as such losses,  claims, damages or liabilities are caused by any
such untrue  statement or omission or alleged untrue statement or omission based
upon Underwriter Information or Depositary Information;  PROVIDED, HOWEVER, that
the foregoing  indemnity  agreement with respect to the  Preliminary  Prospectus
shall not inure to the benefit of any Underwriter from whom the person asserting
any  such  losses,   claims,   damages  or  liabilities  purchased  the  Offered



Certificates, or to the benefit of any person controlling such Underwriter, if a
copy of the  Prospectus  (as then amended or  supplemented  if the Company shall
have furnished any  amendments or supplements  thereto) was not sent or given by
or on behalf of such  Underwriter to such person,  if required by law so to have
been  delivered,  at or prior to the  written  confirmation  of the sale of such
Offered  Certificates  to such person,  and if the  Prospectus (as so amended or
supplemented)  would have cured the defect  giving rise to such losses,  claims,
damages or  liabilities  unless  such  failure to deliver the  Prospectus  was a
result of noncompliance by the Company with its delivery  requirements set forth
in Section 4(a).

            (b) Each Underwriter agrees, severally and not jointly, to indemnify
and hold harmless the Company,  its  directors,  each of the officers who signed
the  Registration  Statement and each person,  if any, who controls the Company,
within the meaning of either  Section 15 of the  Securities Act or Section 20 of
the Exchange Act, to the same extent as the foregoing indemnity from the Company
to such  Underwriter  but only with  reference  to the  Underwriter  Information
provided by such Underwriter.

            (c)   In   case   any   proceeding   (including   any   governmental
investigation)  shall be  instituted  involving  any  person in respect of which
indemnity  may be sought  pursuant to either  paragraph  (a) or (b) above,  such
person (the  "indemnified  party") shall promptly notify the person against whom
such  indemnity  may be  sought  (the  "indemnifying  party")  in  writing.  The
indemnifying  party,  upon  request of the  indemnified  party,  shall,  and the
indemnifying party may elect to, retain counsel  reasonably  satisfactory to the
indemnified  party  to  represent  the  indemnified  party  and any  others  the
indemnifying  party may designate in such proceeding and the indemnifying  party
shall pay the fees and disbursements of such counsel related to such proceeding.
In any such proceeding, any indemnified party shall have the right to retain its
own counsel,  but the fees and expenses of such counsel  shall be at the expense
of such indemnified party unless (i) the indemnifying  party and the indemnified
party shall have  mutually  agreed to the  retention of such  counsel,  (ii) the
named parties to any such proceeding  (including any impleaded  parties) include
both the indemnifying party and the indemnified party and representation of both
parties by the same counsel  would be  inappropriate  due to actual or potential
differing  interests  between them, or (iii) the  indemnifying  party shall have
failed to retain  counsel as required by the prior  sentence  to  represent  the
indemnified  party within a reasonable amount of time. It is understood that the
indemnifying  party  shall not, in  connection  with any  proceeding  or related
proceedings  in the same  jurisdiction,  be liable for the fees and  expenses of
more than one  separate  firm (in  addition to any local  counsel)  for all such
indemnified  parties and that all such fees and expenses  shall be reimbursed as
they are incurred. Such firm shall be designated in writing by Morgan Stanley in
the case of  parties  indemnified  pursuant  to  paragraph  (a) above and by the
Company in the case of parties indemnified  pursuant to paragraph (b) above. The
indemnifying  party  shall not be liable for any  settlement  of any  proceeding
effected  without its written  consent,  but if settled  with such consent or if
there be a final judgment for the plaintiff,  the  indemnifying  party agrees to
indemnify the indemnified party from and against any loss or liability by reason
of such settlement or judgment.  Notwithstanding the foregoing  sentence,  if at
any time an indemnified  party shall have  requested in writing an  indemnifying
party to  reimburse  the  indemnified  party for fees and expenses of counsel as
contemplated  by  the  second  and  third  sentences  of  this  paragraph,   the
indemnifying  party  agrees  that it shall be liable for any  settlement  of any



proceeding  effected  without  its  written  consent if (i) such  settlement  is
entered into more than 90 days after receipt by such  indemnifying  party of the
aforesaid request and (ii) such indemnifying party shall not have reimbursed the
indemnified  party in  accordance  with such  request  prior to the date of such
settlement,  unless such fees and expenses are being disputed in good faith. The
indemnifying party at any time may, subject to the last sentence of this Section
5(c),  settle or compromise  any  proceeding  described in this paragraph at the
expense of the  indemnifying  party.  No indemnifying  party shall,  without the
prior written  consent of the  indemnified  party,  effect any settlement of any
pending or threatened proceeding in respect of which any indemnified party is or
could have been a party and indemnity  could have been sought  hereunder by such
indemnified party, unless such settlement  includes an unconditional  release of
such indemnified  party from all liability on claims that are the subject matter
of such proceeding.

            (d) To the extent the indemnification  provided for in paragraph (a)
or (b) of this  Section  5 is  required  to be  made  but is  unavailable  to an
indemnified party or insufficient in respect of any losses,  claims,  damages or
liabilities,  then the applicable  indemnifying  party under such paragraph,  in
lieu of indemnifying such indemnified party thereunder,  shall contribute to the
amount  paid or payable by such  indemnified  party as a result of such  losses,
claims,  damages or  liabilities  (i) in such  proportion as is  appropriate  to
reflect the relative benefits received by the Company,  on the one hand, and the
Underwriters,  on the other hand, from the offering of such Offered Certificates
or (ii) if the  allocation  provided  by clause  (i) above is not  permitted  by
applicable  law, in such  proportion as is  appropriate  to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault of
the Company on the one hand and the Underwriters on the other hand in connection
with the statements or omissions that resulted in such losses,  claims,  damages
or  liabilities,  as well as any other relevant  equitable  considerations.  The
relative  benefits  received by the Company on the one hand and the Underwriters
on the other hand in connection  with the offering of such Offered  Certificates
shall be deemed to be in the same  respective  proportions  as the proceeds from
the  offering  of such  Offered  Certificates  received by the  Original  Trusts
(before deducting  expenses) less total  underwriting  discounts and commissions
paid to the Underwriters by the Company,  and the total  underwriting  discounts
and commissions  paid to the  Underwriters  by the Company,  in each case as set
forth in (or in the notes to) the table on the cover of the Prospectus,  bear to
the aggregate public offering price of such Offered  Certificates.  The relative
fault of the Company on the one hand and of the  Underwriters  on the other hand
shall be determined  by reference to, among other things,  whether the untrue or
alleged untrue  statement of a material fact or the omission or alleged omission
to state a material  fact  relates to  information  supplied  by the  Company or
information  supplied by the  Underwriters,  and the parties'  relative  intent,
knowledge,  access to  information  and  opportunity  to correct or prevent such
statement or omission.  The Underwriters'  respective  obligations to contribute
pursuant to this Section 5 are several in proportion to the respective principal
amount of Offered Certificates they have purchased hereunder, and not joint.

            (e) The Company and the Underwriters agree that it would not be just
or equitable if  contribution  pursuant to this Section 5 were determined by PRO
RATA allocation  (even if the  Underwriters  were treated as one entity for such
purpose) or by any other method of allocation  that does not take account of the
equitable  considerations referred to in paragraph (d) above. The amount paid or



payable by an indemnified party as a result of the losses,  claims,  damages and
liabilities  referred  to in  paragraph  (d) above  shall be deemed to  include,
subject  to the  limitations  set  forth  above,  any  legal or  other  expenses
reasonably  incurred by such indemnified party in connection with  investigating
or defending any such action or claim.  Notwithstanding  the  provisions of this
Section 5, no  Underwriter  shall be required to contribute any amount in excess
of the  amount  by which  the  total  price at which  the  Offered  Certificates
underwritten  by it and  distributed  to the public  were  offered to the public
exceeds the amount of any  damages  that such  Underwriter  has  otherwise  been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission.  No person guilty of fraudulent  misrepresentation  (within
the  meaning of  Section  11(f) of the  Securities  Act)  shall be  entitled  to
contribution   from  any  person   who  was  not   guilty  of  such   fraudulent
misrepresentation.  The indemnity and contribution  provisions contained in this
Section 5 and the  representations  and  warranties of the Company  contained in
this Agreement shall remain operative and in full force and effect regardless of
(i) any  termination of this  Agreement,  (ii) any  investigation  made by or on
behalf of any Underwriter or any person  controlling any Underwriter or by or on
behalf of the Company,  its officers or directors or any person  controlling the
Company,   and  (iii)   acceptance  of  and  payment  for  any  of  the  Offered
Certificates.  The remedies provided for in this Section 5 are not exclusive and
shall not limit any rights or remedies  which may  otherwise be available to any
indemnified party at law or in equity.

            6.  DEFAULT OF  UNDERWRITERS.  If any  Underwriter  or  Underwriters
defaults in their obligations to purchase Offered Certificates hereunder and the
aggregate  principal  amount of the Offered  Certificates  that such  defaulting
Underwriter or Underwriters agreed but failed to purchase does not exceed 10% of
the total principal amount of the Offered Certificates,  Morgan Stanley may make
arrangements  satisfactory  to the  Company  for the  purchase  of such  Offered
Certificates by other persons, including any of the Underwriters, but if no such
arrangements are made by the Closing Date, the non-defaulting Underwriters shall
be obligated severally, in proportion to their respective commitments hereunder,
to  purchase  the  Offered  Certificates  that such  defaulting  Underwriter  or
Underwriters  agreed but failed to purchase.  If any Underwriter or Underwriters
so default and the aggregate  principal amount of the Offered  Certificates with
respect  to which such  default  or  defaults  occurs  exceeds  10% of the total
principal amount of the Offered  Certificates  and arrangements  satisfactory to
Morgan  Stanley and the Company for  purchase of such  Offered  Certificates  by
other  persons are not made within 36 hours after such default,  this  Agreement
will terminate without liability on the part of any  non-defaulting  Underwriter
or the Company, except as provided in Section 5. As used in this Agreement,  the
term "Underwriter" includes any person substituted for an Underwriter under this
Section. Nothing herein will relieve a defaulting Underwriter from liability for
its default.

            7.  SURVIVAL  OF  CERTAIN   REPRESENTATIONS  AND  OBLIGATIONS.   The
respective  indemnities,  agreements,  representations,   warranties  and  other
statements of the Company or its officers and of the  Underwriters  set forth in
or made  pursuant  to this  Agreement  will  remain in full  force  and  effect,
regardless of any termination of this agreement, any investigation, or statement
as to the results thereof, made by or on behalf of any Underwriter,  the Company
or any  of  their  respective  representatives,  officers  or  directors  or any
controlling  person and will  survive  delivery  of and  payment for the Offered
Certificates.  If for any reason the purchase of the Offered Certificates by the
Underwriters is not  consummated,  the Company shall remain  responsible for the
expenses to be paid or reimbursed by it pursuant to Section 9 and the respective
obligations  of the  Company  and the  Underwriters  pursuant to Section 5 shall



remain  in  effect.  If  the  purchase  of  the  Offered   Certificates  by  the
Underwriters  is not consummated for any reason other than solely because of the
occurrence of the  termination of the Agreement  pursuant to Section 6 or 8, the
Company  will  reimburse  the  Underwriters  for  all   out-of-pocket   expenses
(including  reasonable fees and disbursements of counsel) reasonably incurred by
them in  connection  with the offering of such Offered  Certificates  and comply
with its obligations under Section 9.

            8.  TERMINATION.  This Agreement  shall be subject to termination by
notice given by Morgan  Stanley to the Company,  if (a) after the  execution and
delivery of this  Agreement and prior to the Closing Date (i) trading  generally
shall have been  suspended or  materially  limited on or by, as the case may be,
any of the New York Stock Exchange,  the American Stock Exchange or the National
Association of Securities  Dealers,  Inc., (ii) trading of any securities of the
Company  shall have been  suspended on any  exchange or in any  over-the-counter
market,  (iii) a general moratorium on commercial banking activities in New York
shall have been declared by either Federal or New York State authorities or (iv)
there shall have  occurred  any outbreak or  escalation  of  hostilities  or any
change in financial  markets or any calamity or crisis that, in Morgan Stanley's
judgment,  is  material  and  adverse  and (b) in the case of any of the  events
specified in clauses (a)(i) through (iv), such event singly or together with any
other such event makes it, in Morgan Stanley's judgment, impracticable to market
the  Offered  Certificates  on the terms and in the manner  contemplated  in the
Prospectus.

            9. PAYMENT OF EXPENSES. As between the Company and the Underwriters,
the Company shall pay all expenses  incident to the performance of the Company's
obligations under this Agreement, including the following:

            (i) expenses  incurred in connection with (A) qualifying the Offered
      Certificates  for offer and sale under the applicable  securities or "blue
      sky" laws of such  jurisdictions  in the United  States as Morgan  Stanley
      reasonably designates (including filing fees and fees and disbursements of
      counsel for the Underwriters in connection therewith),  (B) endeavoring to
      maintain  such  qualifications  in  effect  so  long as  required  for the
      distribution of such Offered Certificates,  (C) the review (if any) of the
      offering  of the  Offered  Certificates  by the  National  Association  of
      Securities Dealers,  Inc., (D) the determination of the eligibility of the
      Offered  Certificates for investment under the laws of such  jurisdictions
      as the Underwriters may designate and (E) the preparation and distribution
      of any blue sky or legal investment memorandum by Underwriters' Counsel;

            (ii)  expenses  incurred  in  connection  with the  preparation  and
      distribution  to  the  Underwriters  and  the  dealers  (whose  names  and
      addresses the  Underwriters  will furnish to the Company) to which Offered
      Certificates may have been sold by the Underwriters on their behalf and to
      any  other  dealers  upon  request,   either  of  (A)  amendments  to  the
      Registration  Statement or amendments or  supplements to the Prospectus in



      order to make the statements  therein,  in the light of the  circumstances
      when the Prospectus is delivered to a purchaser, not materially misleading
      or (B)  amendments or  supplements  to the  Registration  Statement or the
      Prospectus so that the  Registration  Statement or the  Prospectus,  as so
      amended or supplemented, will comply with law and the expenses incurred in
      connection  with  causing  such  amendments  or  supplements  to be  filed
      promptly with the Commission, all as set forth in Section 4(a) hereof;

            (iii) expenses incurred in connection with the preparation, printing
      and filing of the Registration  Statement  (including financial statements
      and  exhibits),  as  originally  filed  and as  amended,  the  Preliminary
      Prospectus and the Prospectus and any amendments  thereof and  supplements
      thereto, and the cost of furnishing copies thereof to the Underwriters;

            (iv) expenses incurred in connection with the preparation,  printing
      and  distribution  of this  Agreement,  the Offered  Certificates  and the
      Operative Agreements;

            (v) expenses incurred in connection with the delivery of the Offered
      Certificates to the Underwriters;

            (vi)   reasonable  fees  and   disbursements   of  the  counsel  and
      accountants for the Company;

            (vii) to the extent the Company is so required  under any  Operative
      Agreement  to  which it is a party,  the  fees  and  expenses  of the Loan
      Trustees,  the Subordination  Agent, the Paying Agents, the Trustees,  the
      Escrow Agents, the Depositary,  the Liquidity Providers and the reasonable
      fees and disbursements of their respective counsel;

            (viii)  fees  charged by rating  agencies  for  rating  the  Offered
      Certificates  (including  annual  surveillance fees related to the Offered
      Certificates as long as they are outstanding);

            (ix)   reasonable  fees  and   disbursements   of  counsel  for  the
      Underwriters;

            (x)   all fees and expenses relating to appraisals of the
      Aircraft; and

            (xi) all other  reasonable  out-of-pocket  expenses  incurred by the
      Underwriters  in connection  with the  transactions  contemplated  by this
      Agreement.

            10. NOTICES. All communications hereunder will be in writing and, if
sent  to the  Underwriters,  will be  mailed,  delivered  or  sent by  facsimile
transmission  and  confirmed  to the  Underwriters,  c/o  Morgan  Stanley  & Co.
Incorporated,  1585 Broadway, New York, N.Y. 10036, Attention: Equipment Finance
Group,  facsimile  number (212)  761-0786,  and if sent to the Company,  will be
mailed,  delivered or sent by facsimile transmission and confirmed to it at 2929
Allen Parkway, Houston, TX 77019, Attention: Chief Financial Officer and General
Counsel, facsimile number (713) 523-2831;  PROVIDED, HOWEVER, that any notice to
an Underwriter  pursuant to Section 5 will be sent by facsimile  transmission or
delivered and confirmed to such Underwriter.




            11.  SUCCESSORS.  This Agreement will inure to the benefit of and be
binding  upon  the  parties  hereto  and  their  respective  successors  and the
controlling  persons referred to in Section 5, and no other person will have any
right or obligation hereunder.

            12. REPRESENTATION OF UNDERWRITERS.  Morgan Stanley will act for the
several Underwriters in connection with this purchase, and any action under this
Agreement  taken  jointly  or by Morgan  Stanley  will be  binding  upon all the
Underwriters.

            13.  COUNTERPARTS.  This  Agreement may be executed in any number of
counterparts,  each of which  will be  deemed  to be an  original,  but all such
counterparts shall together constitute one and the same Agreement.

            14.  APPLICABLE  LAW.  THIS  AGREEMENT  SHALL  BE  GOVERNED  BY  AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO
PRINCIPLES OF CONFLICTS OF LAW.

            15.  JURISDICTION.  Each of the parties hereto agrees that any legal
suit,  action or proceeding  arising out of or relating to this Agreement or the
transactions  contemplated  hereby may be instituted in any U.S.  federal or New
York State  court in the  Borough of  Manhattan  in the City of New York (each a
"New York court") and each of the parties hereto hereby  irrevocably  waives any
objection  which it may now or hereafter have to the laying of venue of any such
proceeding,  and irrevocably  submits to the  jurisdiction of such courts,  with
respect  to actions  brought  against it as  defendant,  in any suit,  action or
proceeding.  Each of the parties to this Agreement  agrees that a final judgment
in any such suit,  action 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 in accordance with applicable law.



            If  the   foregoing  is  in   accordance   with  the   Underwriters'
understanding of our agreement, kindly sign and return to the Company one of the
counterparts  hereof,  whereupon  it will become a binding  agreement  among the
Underwriters, the Depositary and the Company in accordance with its terms.

                                Very truly yours,

                                CONTINENTAL AIRLINES, INC.


                                By:_____________________________________
                                   Name: Gerald Laderman
                                   Title: Vice President


The foregoing Underwriting Agreement
is hereby confirmed and accepted
as of the date first above written

MORGAN STANLEY & CO. INCORPORATED
CREDIT SUISSE FIRST BOSTON CORPORATION
CHASE SECURITIES INC.
DONALDSON, LUFKIN & JENRETTE SECURITIES 
  CORPORATION
SALOMON SMITH BARNEY INC.

By: MORGAN STANLEY & CO. INCORPORATED


    By:______________________________                             
       Name:
       Title:


CREDIT SUISSE FIRST BOSTON
New York Branch,
as Depositary


By:__________________________________                              
    Name:
    Title:


By:__________________________________                              
    Name:
    Title:



                                   SCHEDULE I

                 (1998 Pass Through Certificates, Series 1998-3)

                           CONTINENTAL AIRLINES, INC.

  Pass Through       Aggregate                                Final
   Certificate       Principal                              Maturity
  Designation          Amount        Interest Rate            Date
  -----------          ------        -------------            ----

   1998-3A-1         $96,000,000         6.82%         November 1, 2019

   1998-3A-2        $199,190,000         6.32%            May 1, 2010

    1998-3B          $59,197,000         7.02%         November 1, 2018

   1998-3C-1         $94,151,000         7.08%            May 1, 2006

   1998-3C-2         $75,863,000         7.25%            May 1, 2007



SCHEDULE II UNDERWRITERS 1998-3A-1 1998-3A-2 1998-3B 1998-3C-1 1998-3C-2 ------------ --------- --------- ------- --------- --------- Morgan Stanley & Co. $19,200,000 $39,838,000 $11,841,000 $18,831,000 $15,175,000 Incorporated 1585 Broadway New York, NY 10036 Credit Suisse First 19,200,000 39,838,000 11,839,000 18,830,000 15,172,000 Boston Corporation 11 Madison Avenue New York, NY 10010 Chase Securities Inc. 19,200,000 39,838,000 11,839,000 18,830,000 15,172,000 270 Park Avenue New York, NY 10017 Donaldson, Lufkin & 19,200,000 39,838,000 11,839,000 18,830,000 15,172,000 Jenrette Securities Corporation 277 Park Avenue New York, New York 10172 Salomon Smith Barney 19,200,000 39,838,000 11,839,000 18,830,000 15,172,000 Inc. Seven World Trade Center New York, New York 10048
SCHEDULE III CONTINENTAL AIRLINES, INC. Underwriting fees, discounts, commissions or other compensation: $4,719,609 Closing date, time and location: November 3, 1998 10:00 A.M., New York time Hughes Hubbard & Reed LLP One Battery Park Plaza New York, New York 10004

                                                                       EXECUTION



================================================================================




                           REVOLVING CREDIT AGREEMENT
                                   (1998-3A-1)


                          DATED AS OF NOVEMBER 3, 1998

                                     BETWEEN

                            WILMINGTON TRUST COMPANY,

                             AS SUBORDINATION AGENT,
                          AS AGENT AND TRUSTEE FOR THE
                CONTINENTAL AIRLINES PASS THROUGH TRUST 1998-3A-1

                                   AS BORROWER

                                       AND

                      WESTDEUTSCHE LANDESBANK GIROZENTRALE,
                       ACTING THROUGH ITS NEW YORK BRANCH

                              AS LIQUIDITY PROVIDER



================================================================================



                                   RELATING TO

                CONTINENTAL AIRLINES PASS THROUGH TRUST 1998-3A-1
              6.82% CONTINENTAL AIRLINES PASS THROUGH CERTIFICATES,
                                SERIES 1998-3A-1



                               TABLE OF CONTENTS
                                                                            PAGE
                                                                            ----

ARTICLE I  DEFINITIONS.........................................................1
      Section 1.01.   Certain Defined Terms....................................1

ARTICLE II  AMOUNT AND TERMS OF THE COMMITMENT.................................7
      Section 2.01.   The Advances.............................................7
      Section 2.02.   Making the Advances......................................7
      Section 2.03.   Fees.....................................................9
      Section 2.04.   Reductions or Termination of the Maximum Commitment......9
      Section 2.05.   Repayments of Interest Advances or the Final Advance....10
      Section 2.06.   Repayments of Provider Advances.........................10
      Section 2.07.   Payments to the Liquidity Provider Under the
                      Intercreditor Agreement.................................11
      Section 2.08.   Book Entries............................................11
      Section 2.09.   Payments from Available Funds Only......................12
      Section 2.10.   Extension of the Expiry Date; Non-Extension Advance.....12

ARTICLE III  OBLIGATIONS OF THE BORROWER......................................12
      Section 3.01.   Increased Costs.........................................12
      Section 3.02.   Capital Adequacy........................................13
      Section 3.03.   Payments Free of Deductions.............................14
      Section 3.04.   Payments................................................15
      Section 3.05.   Computations............................................15
      Section 3.06.   Payment on Non-Business Days............................15
      Section 3.07.   Interest................................................15
      Section 3.08.   Replacement of Borrower.................................17
      Section 3.09.   Funding Loss Indemnification............................17
      Section 3.10.   Illegality..............................................17

ARTICLE IV  CONDITIONS PRECEDENT..............................................18
      Section 4.01.   Conditions Precedent to Effectiveness of
                      Section 2.01............................................18
      Section 4.02.   Conditions Precedent to Borrowing.......................19

ARTICLE V  COVENANTS..........................................................19
      Section 5.01.   Affirmative Covenants of the Borrower...................20
      Section 5.02.   Negative Covenants of the Borrower......................20

ARTICLE VI  LIQUIDITY EVENTS OF DEFAULT.......................................20
      Section 6.01.   Liquidity Events of Default.............................20

ARTICLE VII  MISCELLANEOUS....................................................21
      Section 7.01.   Amendments, Etc.........................................21
      Section 7.02.   Notices, Etc............................................21
      Section 7.03.   No Waiver; Remedies.....................................22
      Section 7.04.   Further Assurances......................................22
      Section 7.05.   Indemnification; Survival of Certain Provisions.........22



                                                                            PAGE
                                                                            ----

      Section 7.06.   Liability of the Liquidity Provider.....................23
      Section 7.07.   Costs, Expenses and Taxes...............................23
      Section 7.08.   Binding Effect; Participations..........................24
      Section 7.09.   Severability............................................25
      Section 7.10.   GOVERNING LAW...........................................25
      Section 7.11.   Submission to Jurisdiction; Waiver of Jury Trial;
                      Waiver of Immunity......................................25
      Section 7.12.   Execution in Counterparts...............................26
      Section 7.13.   Entirety................................................26
      Section 7.14.   Headings................................................26
      Section 7.15.   Transfer................................................27
      Section 7.16.   LIQUIDITY PROVIDER'S OBLIGATION TO MAKE ADVANCES........27


ANNEX I    Interest Advance Notice of Borrowing

ANNEX II   Non-Extension Advance Notice of Borrowing

ANNEX III  Downgrade Advance Notice of Borrowing

ANNEX IV   Final Advance Notice of Borrowing

ANNEX V    Notice of Termination

ANNEX VI   Notice of Replacement Subordination Agent



                           REVOLVING CREDIT AGREEMENT


This REVOLVING CREDIT AGREEMENT dated as of November 3, 1998, between WILMINGTON
TRUST COMPANY, a Delaware corporation, not in its individual capacity but solely
as  Subordination  Agent  under the  Intercreditor  Agreement  (each as  defined
below),  as agent and trustee  for the Class A-1 Trust (as  defined  below) (the
"BORROWER"),  and WESTDEUTSCHE LANDESBANK  GIROZENTRALE,  a bank organized under
the laws of the State of North Rhine-Westphalia, Germany, acting through its New
York branch (the "LIQUIDITY PROVIDER").

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

          WHEREAS,  pursuant to the Class A-1 Trust Agreement (such term and all
other  capitalized terms used in these recitals having the meanings set forth or
referred  to in  Section  1.01),  the Class A-1 Trust is  issuing  the Class A-1
Certificates; and

          WHEREAS,  the  Borrower,  in order to support the timely  payment of a
portion of the interest on the Class A-1  Certificates  in accordance with their
terms,  has  requested  the  Liquidity  Provider  to enter into this  Agreement,
providing in part for the Borrower to request in  specified  circumstances  that
Advances be made hereunder.

          NOW, THEREFORE,  in consideration of the premises,  the parties hereto
agree as follows:

                                    ARTICLE I

                                   DEFINITIONS

          Section 1.01. CERTAIN DEFINED TERMS. (a) DEFINITIONS.  As used in this
Agreement  and unless  otherwise  expressly  indicated,  or unless  the  context
clearly  requires  otherwise,  the  following  capitalized  terms shall have the
following respective meanings for all purposes of this Agreement:

          "ADDITIONAL  COST" has the  meaning  assigned  to such term in Section
     3.01.

          "ADVANCE"  means an  Interest  Advance,  a Final  Advance,  a Provider
     Advance,  an Applied Provider Advance or an Unpaid Advance, as the case may
     be.

          "APPLICABLE  LIQUIDITY RATE" has the meaning  assigned to such term in
     Section 3.07(g).

          "APPLICABLE  MARGIN"  means (x) with respect to any Unpaid  Advance or
     Applied  Provider  Advance,  1.75% per  annum,  or (y) with  respect to any
     Unapplied Provider Advance,  the rate per annum specified in the Fee Letter
     applicable to this Agreement.



          "APPLIED  DOWNGRADE  ADVANCE" has the meaning assigned to such term in
     Section 2.06(a).

          "APPLIED  NON-EXTENSION ADVANCE" has the meaning assigned to such term
     in Section 2.06(a).

          "APPLIED  PROVIDER  ADVANCE" has the meaning  assigned to such term in
     Section 2.06(a).

          "ASSIGNMENT  AND  ASSUMPTION   AGREEMENT"  means  the  Assignment  and
     Assumption  to be entered  into between the Borrower and the trustee of the
     Successor  Trust,  substantially  in the  form of  Exhibit  C to the  Trust
     Supplement No.  1998-3A-1-O,  dated as of the date hereof,  relating to the
     Class A-1 Trust.

          "BASE RATE" means a fluctuating interest rate per annum in effect from
     time to time,  which rate per annum  shall at all times be equal to (a) the
     weighted average of the rates on overnight Federal funds  transactions with
     members of the Federal Reserve System arranged by Federal funds brokers, as
     published for such day (or, if such day is not a Business Day, for the next
     preceding Business Day) by the Federal Reserve Bank of New York, or if such
     rate is not so published for any day that is a Business Day, the average of
     the quotations for such day for such transactions received by the Liquidity
     Provider from three Federal funds brokers of recognized  standing  selected
     by it, plus (b) one-quarter of one percent (1/4 of 1%).

          "BASE RATE  ADVANCE"  means an Advance  that bears  interest at a rate
     based upon the Base Rate.

          "BORROWER"  has the  meaning  assigned  to such term in the recital of
     parties to this Agreement.

          "BORROWING"  means the making of Advances  requested  by delivery of a
     Notice of Borrowing.

          "BUSINESS  DAY" means any day other than a Saturday or Sunday or a day
     on which  commercial  banks are required or authorized to close in Houston,
     Texas,  New York,  New York or, so long as any  Class  A-1  Certificate  is
     outstanding,  the  city and  state in which  the  Class  A-1  Trustee,  the
     Borrower  or any Loan  Trustee  maintains  its  Corporate  Trust  Office or
     receives or disburses funds, and, if the applicable Business Day relates to
     any Advance or other amount  bearing  interest  based on the LIBOR Rate, on
     which dealings are carried on in the London interbank market.

          "DEPOSITS"  has the  meaning  assigned  to such  terms in the  Deposit
     Agreement.

          "DEPOSITARY"  has the  meaning  assigned  to such term in the  Deposit
     Agreement.



          "DEPOSIT AGREEMENT" means the Deposit Agreement dated November 3, 1998
     between First  Security  Bank,  National  Association,  as Escrow Agent and
     Credit Suisse First Boston,  New York Branch, as Depositary,  pertaining to
     the  Class  A-1  Certificates,  as the same  may be  amended,  modified  or
     supplemented from time to time in accordance with the terms thereof.

          "DOWNGRADE ADVANCE" means an Advance made pursuant to Section 2.02(c).

          "EFFECTIVE  DATE" has the  meaning  specified  in  Section  4.01.  The
     delivery of the  certificate  of the  Liquidity  Provider  contemplated  by
     Section  4.01(e) shall be conclusive  evidence that the Effective  Date has
     occurred.

          "EXCLUDED  TAXES" means (i) taxes imposed on the overall net income of
     the Liquidity  Provider or of its Lending Office by the jurisdiction  where
     such  Liquidity  Provider's  principal  office  or such  Lending  Office is
     located, and (ii) Excluded Withholding Taxes.

          "EXCLUDED  WITHHOLDING  TAXES" means (i) withholding  Taxes imposed by
     the United States except to the extent that such United States  withholding
     Taxes are imposed as a result of any change in  applicable  law  (excluding
     from change in  applicable  law for this purpose a change in an  applicable
     treaty or other  change in law  affecting  the  applicability  of a treaty)
     after the date  hereof,  or in the case of a successor  Liquidity  Provider
     (including a transferee of an Advance) or Lending Office, after the date on
     which such successor  Liquidity  Provider  obtains its interest or on which
     the Lending Office is changed,  and (ii) any  withholding  Taxes imposed by
     the  United  States  which  are  imposed  or  increased  as a result of the
     Liquidity  Provider  failing to deliver to the Borrower any  certificate or
     document  (which  certificate or document in the good faith judgment of the
     Liquidity  Provider it is legally  entitled to provide) which is reasonably
     requested by the Borrower to establish  that payments  under this Agreement
     are exempt from (or entitled to a reduced rate of) withholding Tax.

          "EXPENSES"  means  liabilities,   obligations,  damages,  settlements,
     penalties,  claims,  actions,  suits,  costs,  expenses,  and disbursements
     (including, without limitation,  reasonable fees and disbursements of legal
     counsel  and costs of  investigation),  provided  that  Expenses  shall not
     include any Taxes.

          "EXPIRY DATE" means November 1, 1999, initially,  or any date to which
     the Expiry Date is extended pursuant to Section 2.10.

          "FINAL ADVANCE" means an Advance made pursuant to Section 2.02(d).

          "INTERCREDITOR  AGREEMENT" means the Intercreditor Agreement dated the
     date hereof,  among the  Trustees,  the Liquidity  Provider,  the liquidity
     provider under each Liquidity  Facility (other than this Agreement) and the
     Subordination Agent, as the same may be amended,  supplemented or otherwise
     modified from time to time in accordance with its terms.



          "INTEREST ADVANCE" means an Advance made pursuant to Section 2.02(a).

          "INTEREST  PERIOD" means,  with respect to any LIBOR Advance,  each of
     the following periods:

               (i)  the period  beginning on the third  Business  Day  following
                    either (x) the Liquidity Provider's receipt of the Notice of
                    Borrowing  for such LIBOR  Advance or (y) the  withdrawal of
                    funds  from the Class A-1 Cash  Collateral  Account  for the
                    purpose of paying interest on the Class A-1  Certificates as
                    contemplated  by Section 2.06(a) hereof and, in either case,
                    ending on the next Regular Distribution Date; and

               (ii) each  subsequent  period  commencing  on the last day of the
                    immediately preceding Interest Period and ending on the next
                    Regular Distribution Date;

          provided, however, that if (x) the Final Advance shall have been made,
     or (y) other outstanding  Advances shall have been converted into the Final
     Advance, then the Interest Periods shall be successive periods of one month
     beginning on the third  Business Day  following  the  Liquidity  Provider's
     receipt of the Notice of Borrowing  for such Final  Advance (in the case of
     clause  (x)  above)  or  the  Regular   Distribution  Date  following  such
     conversion (in the case of clause (y) above).

          "LENDING  OFFICE" means the lending  office of the Liquidity  Provider
     presently  located at New York,  New York, or such other lending  office as
     the  Liquidity  Provider from time to time shall notify the Borrower as its
     lending office  hereunder;  PROVIDED that the Liquidity  Provider shall not
     change its Lending  Office to a Lending Office outside the United States of
     America except in accordance with Section 3.01, 3.02 or 3.03 hereof.

          "LIBOR ADVANCE" means an Advance bearing interest at a rate based upon
     the LIBOR Rate.

          "LIBOR RATE" means, with respect to any Interest Period,

               (i)  the rate per annum  appearing on display page 3750  (British
                    Bankers  Association-LIBOR) of the Dow Jones Markets Service
                    (or any successor or substitute  therefor) at  approximately
                    11:00 A.M.  (London time) two Business Days before the first
                    day of such Interest Period, as the rate for dollar deposits
                    with a maturity comparable to such Interest Period, or

               (ii) if the rate  calculated  pursuant to clause (i) above is not
                    available,  the average (rounded upwards,  if necessary,  to
                    the  next  1/16  of 1%) of the  rates  per  annum  at  which
                    deposits in dollars are  offered for the  relevant  Interest
                    Period by three banks of recognized standing selected by the



                    Liquidity   Provider  in  the  London  interbank  market  at
                    approximately  11:00 A.M.  (London  time) two Business  Days
                    before  the first day of such  Interest  Period in an amount
                    approximately  equal to the  principal  amount  of the LIBOR
                    Advance to which such Interest  Period is to apply and for a
                    period comparable to such Interest Period.

          "LIQUIDITY  EVENT OF DEFAULT"  means the  occurrence of either (a) the
     Acceleration  of all of the Equipment Notes (provided that, with respect to
     the period prior to the Delivery  Period Expiry Date,  such Equipment Notes
     have an aggregate  outstanding principal balance in excess of $300,000,000)
     or (b) a Continental Bankruptcy Event.

          "LIQUIDITY  INDEMNITEE"  means (i) the  Liquidity  Provider,  (ii) the
     directors,  officers,  employees and agents of the Liquidity Provider,  and
     (iii) the  successors  and  permitted  assigns of the persons  described in
     clauses (i) and (ii), inclusive.

          "LIQUIDITY  PROVIDER"  has the  meaning  assigned  to such term in the
     recital of parties to this Agreement.

          "MAXIMUM  AVAILABLE  COMMITMENT"  shall  mean,  subject to the proviso
     contained  in the  third  sentence  of  Section  2.02(a),  at any  time  of
     determination,  (a) the  Maximum  Commitment  at  such  time  LESS  (b) the
     aggregate  amount  of each  Interest  Advance  outstanding  at  such  time;
     PROVIDED that following a Provider Advance or a Final Advance,  the Maximum
     Available Commitment shall be zero.

          "MAXIMUM  COMMITMENT"  means  initially  $9,820,800 as the same may be
     reduced from time to time in accordance with Section 2.04(a).

          "NON-EXTENSION  ADVANCE"  means an Advance  made  pursuant  to Section
     2.02(b).

          "NOTICE OF BORROWING" has the meaning specified in Section 2.02(e).

          "NOTICE OF REPLACEMENT  SUBORDINATION AGENT" has the meaning specified
     in Section 3.08.

          "PERFORMING NOTE DEFICIENCY"  means any time that less than 65% of the
     then  aggregate  outstanding  principal  amount of all Equipment  Notes are
     Performing Equipment Notes.

          "PROSPECTUS  SUPPLEMENT" means the Prospectus Supplement dated October
     21, 1998 relating to the Certificates, as such Prospectus Supplement may be
     amended or supplemented.

          "PROVIDER  ADVANCE"  means  a  Downgrade  Advance  or a  Non-Extension
     Advance.

          "REGULATORY  CHANGE" has the meaning  assigned to such term in Section
     3.01.



          "REPLENISHMENT  AMOUNT"  has the  meaning  assigned  to  such  term in
     Section 2.06(b).

          "REQUIRED  AMOUNT" means, for any day, the sum of the aggregate amount
     of interest,  calculated at the rate per annum equal to the Stated Interest
     Rate for the Class A-1 Certificates, that would be payable on the Class A-1
     Certificates   on  each  of  the  three   successive   semiannual   Regular
     Distribution  Dates  immediately  following  such day or,  if such day is a
     Regular  Distribution  Date, on such day and the  succeeding two semiannual
     Regular  Distribution  Dates,  in each case  calculated on the basis of the
     Pool Balance of the Class A-1  Certificates  on such day and without regard
     to expected future payments of principal on the Class A-1 Certificates.

          "SUCCESSOR  TRUST"  means  Continental  Airlines  Pass  Through  Trust
     1998-3A-1-S.

          "TAX  LETTER"  means the  letter  dated the date  hereof  between  the
     Liquidity Provider and Continental pertaining to this Agreement.

          "TERMINATION  DATE" means the earliest to occur of the following:  (i)
     the  Expiry  Date;  (ii) the date on which  the  Borrower  delivers  to the
     Liquidity  Provider a certificate,  signed by a Responsible  Officer of the
     Borrower,  certifying that all of the Class A-1 Certificates have been paid
     in full (or provision has been made for such payment in accordance with the
     Intercreditor  Agreement  and the Trust  Agreements)  or are  otherwise  no
     longer entitled to the benefits of this Agreement;  (iii) the date on which
     the Borrower delivers to the Liquidity Provider a certificate,  signed by a
     Responsible  Officer  of  the  Borrower,   certifying  that  a  Replacement
     Liquidity Facility has been substituted for this Agreement in full pursuant
     to Section 3.6(e) of the Intercreditor  Agreement;  (iv) the fifth Business
     Day following the receipt by the Borrower of a Termination  Notice from the
     Liquidity  Provider  pursuant to Section 6.01  hereof;  and (v) the date on
     which no Advance is or may (including by reason of  reinstatement as herein
     provided) become available for a Borrowing hereunder.

          "TERMINATION NOTICE" means the Notice of Termination  substantially in
     the form of Annex V to this Agreement.

          "TRANSFEREE" has the meaning assigned to such term in Section 7.08(b).

          "UNAPPLIED  DOWNGRADE  ADVANCE" means any Downgrade Advance other than
     an Applied Downgrade Advance.

          "UNAPPLIED  NON-EXTENSION  ADVANCE"  means any  Non-Extension  Advance
     other than an Applied Non-Extension Advance.

          "UNAPPLIED  PROVIDER ADVANCE" means any Provider Advance other than an
     Applied Provider Advance.

          "UNPAID  ADVANCE"  has the  meaning  assigned  to such term in Section
     2.05.



          (b) TERMS DEFINED IN THE INTERCREDITOR  AGREEMENT. For all purposes of
this Agreement,  the following terms shall have the respective meanings assigned
to such terms in the Intercreditor Agreement:

     "ACCELERATION", "CERTIFICATES", "CLASS A-1 CASH COLLATERAL ACCOUNT", "CLASS
     A-1  CERTIFICATEHOLDERS",  "CLASS A-1  CERTIFICATES",  "CLASS  A-1  TRUST",
     "CLASS A-1 TRUST AGREEMENT", "CLASS A-1 TRUSTEE", "CLASS A-2 CERTIFICATES",
     "CLASS B CERTIFICATES", "CLASS C-1 CERTIFICATES", "CLASS C-2 CERTIFICATES",
     "CLOSING DATE", "CONTINENTAL", "CONTINENTAL BANKRUPTCY EVENT", "CONTROLLING
     PARTY",   "CORPORATE   TRUST  OFFICE",   "DELIVERY   PERIOD  EXPIRY  DATE",
     "DISTRIBUTION  DATE",   "DOWNGRADED  FACILITY",   "EQUIPMENT  NOTES",  "FEE
     LETTER",   "FINAL  LEGAL   DISTRIBUTION   DATE",   "FINANCING   AGREEMENT",
     "INDENTURE",   "INTEREST  PAYMENT  DATE",  "INVESTMENT  EARNINGS",  "LEASED
     AIRCRAFT", "LIQUIDITY FACILITY",  "LIQUIDITY OBLIGATIONS",  "LOAN TRUSTEE",
     "MOODY'S",  "NON-EXTENDED FACILITY", "NOTE PURCHASE AGREEMENT",  "OPERATIVE
     AGREEMENTS",  "OWNED  AIRCRAFT",   "PARTICIPATION  AGREEMENT",  "PERFORMING
     EQUIPMENT  NOTE",  "PERSON",  "POOL  BALANCE",  "RATING  AGENCY",  "RATINGS
     CONFIRMATION",   "REGULAR   DISTRIBUTION  DATE",   "REPLACEMENT   LIQUIDITY
     FACILITY",  "RESPONSIBLE OFFICER",  "SCHEDULED PAYMENT", "SPECIAL PAYMENT",
     "STANDARD  &  POOR'S",  "STATED  INTEREST  RATE",   "SUBORDINATION  AGENT",
     "TAXES",  "THRESHOLD RATING",  "TRANSFER",  "TRUST AGREEMENTS",  "TRUSTEE",
     "UNDERWRITERS", "UNDERWRITING AGREEMENT", and "WRITTEN NOTICE".

                                   ARTICLE II

                       AMOUNT AND TERMS OF THE COMMITMENT

          Section 2.01. THE ADVANCES.  The Liquidity Provider hereby irrevocably
agrees,  on the terms and conditions  hereinafter set forth, to make Advances to
the  Borrower  from time to time on any  Business Day during the period from the
Effective  Date until 12:00 Noon (New York City time) on the Expiry Date (unless
the  obligations  of the  Liquidity  Provider  shall be  earlier  terminated  in
accordance with the terms of Section 2.04(b)) in an aggregate amount at any time
outstanding not to exceed the Maximum Commitment.

          Section 2.02. MAKING THE ADVANCES. (a) Interest Advances shall be made
in one or more  Borrowings by delivery to the Liquidity  Provider of one or more
written and completed  Notices of Borrowing in substantially the form of Annex I
attached hereto,  signed by a Responsible Officer of the Borrower,  in an amount
not  exceeding the Maximum  Available  Commitment at such time and shall be used
solely for the payment when due of interest on the Class A-1 Certificates at the
Stated  Interest  Rate  therefor  in  accordance  with  Section  3.6(a)  of  the
Intercreditor   Agreement.   Each   Interest   Advance  made   hereunder   shall
automatically  reduce the Maximum Available  Commitment and the amount available
to be borrowed  hereunder by subsequent  Advances by the amount of such Interest
Advance  (subject  to  reinstatement  as provided  in the next  sentence).  Upon
repayment  to the  Liquidity  Provider  in full of the  amount  of any  Interest
Advance made pursuant to this Section  2.02(a),  together with accrued  interest
thereon  (as  provided  herein),  the  Maximum  Available  Commitment  shall  be
reinstated by the amount of such repaid Interest Advance,  but not to exceed the



Maximum Commitment;  PROVIDED,  HOWEVER,  that the Maximum Available  Commitment
shall not be so reinstated at any time if (i) a Liquidity Event of Default shall
have occurred and be continuing and (ii) there is a Performing Note Deficiency.

          (b) A  Non-Extension  Advance  shall be made in a single  Borrowing if
this  Agreement  is not  extended  in  accordance  with  Section  3.6(d)  of the
Intercreditor Agreement (unless a Replacement Liquidity Facility to replace this
Agreement  shall have been  delivered  to the Borrower as  contemplated  by said
Section 3.6(d) within the time period  specified in such Section) by delivery to
the  Liquidity  Provider  of a written  and  completed  Notice of  Borrowing  in
substantially  the form of Annex II  attached  hereto,  signed by a  Responsible
Officer of the Borrower,  in an amount equal to the Maximum Available Commitment
at such time, and shall be used to fund the Class A-1 Cash Collateral Account in
accordance  with said  Section  3.6(d) and Section  3.6(f) of the  Intercreditor
Agreement.

          (c) A Downgrade  Advance  shall be made in a single  Borrowing  upon a
downgrading of the Liquidity Provider's  short-term unsecured debt rating issued
by either Rating Agency below the applicable  Threshold  Rating (as provided for
in Section 3.6(c) of the Intercreditor Agreement) unless a Replacement Liquidity
Facility to replace this Agreement shall have been  previously  delivered to the
Borrower in accordance  with said Section  3.6(c),  by delivery to the Liquidity
Provider of a written and  completed  Notice of Borrowing in  substantially  the
form of Annex III  attached  hereto,  signed  by a  Responsible  Officer  of the
Borrower,  in an amount equal to the Maximum Available  Commitment at such time,
and shall be used to fund the Class A-1 Cash  Collateral  Account in  accordance
with said Section 3.6(c) and Section 3.6(f) of the Intercreditor Agreement.

          (d) A Final  Advance  shall  be made in a  single  Borrowing  upon the
receipt by the  Borrower of a  Termination  Notice from the  Liquidity  Provider
pursuant  to Section  6.01 hereof by  delivery  to the  Liquidity  Provider of a
written and completed Notice of Borrowing in substantially  the form of Annex IV
attached hereto,  signed by a Responsible Officer of the Borrower,  in an amount
equal to the Maximum  Available  Commitment  at such time,  and shall be used to
fund the Class A-1 Cash Collateral Account (in accordance with Section 3.6(i) of
the Intercreditor Agreement) and Section 3.6(f) of the Intercreditor Agreement.

          (e) Each  Borrowing  shall be made on notice in  writing (a "NOTICE OF
BORROWING")  in  substantially  the form required by Section  2.02(a),  2.02(b),
2.02(c) or 2.02(d),  as the case may be, given by the Borrower to the  Liquidity
Provider.  If a Notice of  Borrowing  is delivered by the Borrower in respect of
any  Borrowing no later than 1:00 p.m.  (New York City time) on a Business  Day,
upon  satisfaction  of the  conditions  precedent set forth in Section 4.02 with
respect to a requested Borrowing, the Liquidity Provider shall make available to
the Borrower,  in accordance with its payment  instructions,  the amount of such



Borrowing in U.S. dollars and immediately available funds, before 4:00 p.m. (New
York City time) on such Business Day or on such later  Business Day specified in
such Notice of Borrowing.  If a Notice of Borrowing is delivered by the Borrower
in respect of any  Borrowing  after 1:00 p.m. (New York City time) on a Business
Day, upon  satisfaction  of the  conditions  precedent set forth in Section 4.02
with  respect  to a  requested  Borrowing,  the  Liquidity  Provider  shall make
available to the Borrower,  in  accordance  with its payment  instructions,  the
amount of such  Borrowing in U.S.  dollars and in immediately  available  funds,
before 12:00 Noon (New York City time) on the first  Business Day next following
the day of receipt of such Notice of  Borrowing  or on such later  Business  Day
specified by the Borrower in such Notice of Borrowing. Payments of proceeds of a
Borrowing  shall be made by wire transfer of immediately  available funds to the
Borrower in  accordance  with such wire  transfer  instructions  as the Borrower
shall furnish from time to time to the Liquidity Provider for such purpose. Each
Notice of Borrowing shall be irrevocable and binding on the Borrower.

          (f) Upon the making of any Advance  requested  pursuant to a Notice of
Borrowing, in accordance with the Borrower's payment instructions, the Liquidity
Provider shall be fully  discharged of its obligation  hereunder with respect to
such Notice of Borrowing,  and the Liquidity  Provider  shall not  thereafter be
obligated  to make any further  Advances  hereunder in respect of such Notice of
Borrowing to the Borrower or to any other Person. Notwithstanding the provisions
of  Section  2.02(e),  if the  Liquidity  Provider  makes an  Advance  requested
pursuant to a Notice of Borrowing  before 12:00 noon (New York City time) on the
second Business Day after the date of payment specified in said Section 2.02(e),
the Liquidity  Provider shall have fully  discharged its  obligations  hereunder
with  respect to such Advance and shall not be in default  hereunder.  Following
the making of any Advance pursuant to Section 2.02(b), (c) or (d) hereof to fund
the Class A-1 Cash  Collateral  Account,  the Liquidity  Provider  shall have no
interest in or rights to the Class A-1 Cash Collateral Account,  such Advance or
any other amounts from time to time on deposit in the Class A-1 Cash  Collateral
Account;  PROVIDED that the foregoing shall not affect or impair the obligations
of the  Subordination  Agent to make the  distributions  contemplated by Section
3.6(e) or (f) of the Intercreditor Agreement. By paying to the Borrower proceeds
of Advances  requested by the Borrower in accordance with the provisions of this
Agreement,  the Liquidity Provider makes no representation as to, and assumes no
responsibility for, the correctness or sufficiency for any purpose of the amount
of the Advances so made and requested.

          Section  2.03.  FEES.  The  Borrower  agrees  to pay to the  Liquidity
Provider the fees set forth in the Fee Letter applicable to this Agreement.

          Section 2.04. REDUCTIONS OR TERMINATION OF THE MAXIMUM COMMITMENT.

          (a) AUTOMATIC  REDUCTION.  Promptly  following  each date on which the
Required Amount is reduced as a result of a reduction in the Pool Balance of the
Class A-1 Certificates or otherwise,  the Maximum Commitment shall automatically
be reduced to an amount equal to such reduced  Required Amount (as calculated by
the Borrower). The Borrower shall give notice of any such automatic reduction of
the Maximum  Commitment  to the  Liquidity  Provider  within two  Business  Days
thereof. The failure by the Borrower to furnish any such notice shall not affect
such automatic reduction of the Maximum Commitment.

          (b)  TERMINATION.  Upon the  making of any  Provider  Advance or Final
Advance  hereunder or the occurrence of the Termination  Date, the obligation of



the Liquidity  Provider to make further Advances  hereunder shall  automatically
and irrevocably terminate, and the Borrower shall not be entitled to request any
further Borrowing hereunder.

          Section 2.05.  REPAYMENTS OF INTEREST  ADVANCES OR THE FINAL  ADVANCE.
Subject to Sections  2.06,  2.07 and 2.09 hereof,  the Borrower  hereby  agrees,
without notice of an Advance or demand for repayment from the Liquidity Provider
(which notice and demand are hereby waived by the Borrower), to pay, or to cause
to be paid,  to the  Liquidity  Provider  on each  date on which  the  Liquidity
Provider shall make an Interest Advance or the Final Advance, an amount equal to
(a) the amount of such Advance (any such Advance,  until repaid,  is referred to
herein as an "Unpaid  Advance"),  plus (b)  interest  on the amount of each such
Unpaid  Advance as provided in Section  3.07  hereof;  provided  that if (i) the
Liquidity Provider shall make a Provider Advance at any time after making one or
more Interest  Advances which shall not have been repaid in accordance with this
Section 2.05 or (ii) this Liquidity Facility shall become a Downgraded  Facility
or Non-Extended  Facility at any time when  unreimbursed  Interest Advances have
reduced the Maximum  Available  Commitment to zero, then such Interest  Advances
shall  cease to  constitute  Unpaid  Advances  and  shall be deemed to have been
changed into an Applied Downgrade Advance or an Applied  Non-Extension  Advance,
as the case may be,  for all  purposes  of this  Agreement  (including,  without
limitation,  for the  purpose  of  determining  when such  Interest  Advance  is
required to be repaid to the Liquidity  Provider in accordance with Section 2.06
and for the  purposes  of  Section  2.06(b)).  The  Borrower  and the  Liquidity
Provider  agree that the  repayment in full of each  Interest  Advance and Final
Advance on the date such  Advance is made is  intended  to be a  contemporaneous
exchange for new value given to the Borrower by the Liquidity Provider.

          Section 2.06.  REPAYMENTS OF PROVIDER  ADVANCES.  (a) Amounts advanced
hereunder in respect of a Provider  Advance  shall be deposited in the Class A-1
Cash  Collateral  Account,  invested  and  withdrawn  from  the  Class  A-1 Cash
Collateral  Account  as  set  forth  in  Sections  3.6(c),  (d)  and  (f) of the
Intercreditor  Agreement.  The Borrower agrees to pay to the Liquidity Provider,
on each Regular Distribution Date,  commencing on the first Regular Distribution
Date after the making of a Provider Advance, interest on the principal amount of
any such Provider Advance as provided in Section 3.07; provided,  however,  that
amounts  in  respect of a  Provider  Advance  withdrawn  from the Class A-1 Cash
Collateral  Account  for  the  purpose  of  paying  interest  on the  Class  A-1
Certificates  in accordance with Section 3.6(f) of the  Intercreditor  Agreement
(the amount of any such withdrawal being (y) in the case of a Downgrade Advance,
an "Applied Downgrade  Advance" and (z) in the case of a Non-Extension  Advance,
an "Applied  Non-Extension  Advance"  and,  together  with an Applied  Downgrade
Advance,  an "Applied  Provider  Advance") shall thereafter  (subject to Section
2.06(b)) be treated as an Interest  Advance under this Agreement for purposes of
determining the Applicable Liquidity Rate for interest payable thereon; provided
further,  however,  that if,  following  the making of a Provider  Advance,  the
Liquidity  Provider  delivers a Termination  Notice to the Borrower  pursuant to
Section 6.01 hereof,  such  Provider  Advance  shall  thereafter be treated as a
Final Advance under this  Agreement for purposes of  determining  the Applicable
Liquidity Rate for interest payable  thereon.  Subject to Sections 2.07 and 2.09
hereof,  immediately  upon the withdrawal of any amounts from the Class A-1 Cash
Collateral  Account  on account  of a  reduction  in the  Required  Amount,  the
Borrower  shall  repay to the  Liquidity  Provider  a  portion  of the  Provider



Advances in a principal  amount equal to such  reduction,  plus  interest on the
principal amount prepaid as provided in Section 3.07 hereof.

          (b) At any time  when an  Applied  Provider  Advance  (or any  portion
thereof)  is  outstanding,  upon the  deposit  in the Class A-1 Cash  Collateral
Account  of any amount  pursuant  to clause  "THIRD"  of  Section  2.4(b) of the
Intercreditor  Agreement,  clause  "THIRD" of Section  3.2 of the  Intercreditor
Agreement or clause "FOURTH" of Section 3.3 of the Intercreditor  Agreement (any
such amount being a  "REPLENISHMENT  AMOUNT") for the purpose of replenishing or
increasing the balance  thereof up to the Required  Amount at such time, (i) the
aggregate  outstanding principal amount of all Applied Provider Advances (and of
Provider Advances treated as an Interest Advance for purposes of determining the
Applicable  Liquidity Rate for interest  payable thereon) shall be automatically
reduced  by the  amount  of such  Replenishment  Amount  and (ii) the  aggregate
outstanding  principal  amount  of all  Unapplied  Provider  Advances  shall  be
automatically increased by the amount of such Replenishment Amount.

          (c)  Upon  the  provision  of  a  Replacement  Liquidity  Facility  in
replacement  of  this  Agreement  in  accordance  with  Section  3.6(e)  of  the
Intercreditor  Agreement,  amounts  remaining  on  deposit in the Class A-1 Cash
Collateral  Account after giving effect to any Applied  Provider  Advance on the
date of such replacement shall be reimbursed to the Liquidity Provider, but only
to the extent  such  amounts  are  necessary  to repay in full to the  Liquidity
Provider all amounts owing to it hereunder.

          Section   2.07.   PAYMENTS  TO  THE  LIQUIDITY   PROVIDER   UNDER  THE
INTERCREDITOR  AGREEMENT.  In order to provide for payment or  repayment  to the
Liquidity  Provider  of  any  amounts  hereunder,  the  Intercreditor  Agreement
provides  that amounts  available  and referred to in Articles II and III of the
Intercreditor  Agreement,  to  the  extent  payable  to the  Liquidity  Provider
pursuant  to  the  terms  of the  Intercreditor  Agreement  (including,  without
limitation, Section 3.6(f) of the Intercreditor Agreement), shall be paid to the
Liquidity Provider in accordance with the terms thereof.  Amounts so paid to the
Liquidity  Provider  shall be applied by the  Liquidity  Provider  to  Liquidity
Obligations then due and payable in accordance with the Intercreditor  Agreement
or, if not provided for in the Intercreditor  Agreement,  then in such manner as
the Liquidity Provider shall deem appropriate.

          Section 2.08. BOOK ENTRIES.  The Liquidity  Provider shall maintain in
accordance  with its usual  practice  an  account  or  accounts  evidencing  the
indebtedness of the Borrower  resulting from Advances made from time to time and
the amounts of principal  and interest  payable  hereunder and paid from time to
time in respect thereof;  provided,  however,  that the failure by the Liquidity
Provider to maintain such account or accounts  shall not affect the  obligations
of the Borrower in respect of Advances.

          Section 2.09.  PAYMENTS FROM AVAILABLE  FUNDS ONLY. All payments to be
made by the Borrower  under this  Agreement  shall be made only from the amounts
that constitute  Scheduled Payments,  Special Payments or payments under Section
8.1 of the  Participation  Agreements with respect to Owned  Aircraft,  payments
under  Section  9.1 of the  Participation  Agreements  with  respect  to  Leased
Aircraft  and Section 6 of the Note  Purchase  Agreement  and only to the extent



that the Borrower shall have sufficient  income or proceeds  therefrom to enable
the Borrower to make payments in  accordance  with the terms hereof after giving
effect to the  priority of payments  provisions  set forth in the  Intercreditor
Agreement.  The  Liquidity  Provider  agrees  that it will  look  solely to such
amounts  to the extent  available  for  distribution  to it as  provided  in the
Intercreditor  Agreement  and  this  Agreement  and that  the  Borrower,  in its
individual  capacity,  is not personally liable to it for any amounts payable or
liability under this Agreement  except as expressly  provided in this Agreement,
the Intercreditor Agreement or any Participation  Agreement.  Amounts on deposit
in the Class A-1 Cash  Collateral  Account shall be available to the Borrower to
make  payments  under this  Agreement  only to the  extent and for the  purposes
expressly contemplated in Section 3.6(f) of the Intercreditor Agreement.

          Section 2.10. EXTENSION OF THE EXPIRY DATE;  NON-EXTENSION ADVANCE. No
earlier  than  the 60th  day and no  later  than the 40th day  prior to the then
effective  Expiry Date  (unless such Expiry Date is on or after the date that is
15 days after the Final Legal Distribution Date for the Class A-1 Certificates),
the Borrower  shall request that the Liquidity  Provider  extend the Expiry Date
for a period of 364 days  after  the then  effective  Expiry  Date  (unless  the
obligations of the Liquidity  Provider are earlier terminated in accordance with
the terms hereof). The Liquidity Provider shall advise the Borrower,  no earlier
than 40 days and no later than 25 days prior to the then effective  Expiry Date,
whether, in its sole discretion,  it agrees to so extend the Expiry Date. If the
Liquidity  Provider  advises the Borrower on or before the 25th day prior to the
Expiry Date then in effect that such  Expiry Date shall not be so  extended,  or
fails to irrevocably  and  unconditionally  advise the Borrower on or before the
25th day prior to the Expiry  Date then in effect that such Expiry Date shall be
so extended  (and, in each case, if the Liquidity  Provider  shall not have been
replaced in accordance with Section 3.6(e) of the Intercreditor Agreement),  the
Borrower  shall be  entitled  on and after  such 25th day (but prior to the then
effective  Expiry Date) to request a  Non-Extension  Advance in accordance  with
Section 2.02(b) hereof and Section 3.6(d) of the Intercreditor Agreement.

                                   ARTICLE III

                           OBLIGATIONS OF THE BORROWER

          Section 3.01. INCREASED COSTS. The Borrower shall pay to the Liquidity
Provider  from time to time such amounts as may be necessary to  compensate  the
Liquidity  Provider for any increased  costs incurred by the Liquidity  Provider
which are attributable to its making or maintaining any LIBOR Advances hereunder
or its obligation to make any such Advances  hereunder,  or any reduction in any
amount  receivable  by  the  Liquidity  Provider  under  this  Agreement  or the
Intercreditor Agreement in respect of any such Advances or such obligation (such
increases in costs and  reductions  in amounts  receivable  being herein  called
"ADDITIONAL Costs"),  resulting from any change after the date of this Agreement
in U.S. federal,  state,  municipal,  or foreign laws or regulations  (including
Regulation D of the Board of Governors of the Federal  Reserve  System),  or the
adoption  or making  after the date of this  Agreement  of any  interpretations,
directives, or requirements applying to a class of banks including the Liquidity
Provider  under any U.S.  federal,  state,  municipal,  or any  foreign  laws or
regulations  (whether or not having the force of law) by any court, central bank



or monetary authority charged with the interpretation or administration  thereof
(a "REGULATORY CHANGE"), which: (1) changes the basis of taxation of any amounts
payable to the Liquidity  Provider  under this  Agreement in respect of any such
Advances  (other than Excluded  Taxes);  or (2) imposes or modifies any reserve,
special  deposit,  compulsory  loan  or  similar  requirements  relating  to any
extensions of credit or other assets of, or any deposits with other  liabilities
of, the Liquidity Provider (including any such Advances or any deposits referred
to in the  definition  of LIBOR  Rate or  related  definitions).  The  Liquidity
Provider agrees to use reasonable efforts  (consistent with applicable legal and
regulatory  restrictions)  to change the  jurisdiction  of its Lending Office if
making such change would avoid the need for, or reduce the amount of, any amount
payable  under this  Section  that may  thereafter  accrue and would not, in the
reasonable judgment of the Liquidity Provider,  be otherwise  disadvantageous to
the Liquidity Provider.

          The Liquidity Provider will notify the Borrower of any event occurring
after the date of this  Agreement  that will entitle the  Liquidity  Provider to
compensation  pursuant to this Section 3.01 as promptly as practicable  after it
obtains  knowledge  thereof and determines to request such  compensation,  which
notice shall describe in reasonable  detail the  calculation of the amounts owed
under this Section.  Determinations  by the  Liquidity  Provider for purposes of
this Section 3.01 of the effect of any Regulatory  Change on its costs of making
or maintaining  Advances or on amounts  receivable by it in respect of Advances,
and of the additional  amounts required to compensate the Liquidity  Provider in
respect of any  Additional  Costs,  shall be prima facie  evidence of the amount
owed under this Section.

          Section 3.02.  CAPITAL ADEQUACY.  If (1) the adoption,  after the date
hereof, of any applicable governmental law, rule or regulation regarding capital
adequacy,  (2) any  change,  after the date  hereof,  in the  interpretation  or
administration  of any such law, rule or regulation by any central bank or other
governmental authority charged with the interpretation or administration thereof
or (3) compliance by the Liquidity  Provider or any corporation  controlling the
Liquidity  Provider  with  any  applicable   guideline  or  request  of  general
applicability,  issued  after  the date  hereof,  by any  central  bank or other
governmental authority (whether or not having the force of law) that constitutes
a change of the nature  described  in clause (2), has the effect of requiring an
increase in the amount of capital  required to be  maintained  by the  Liquidity
Provider  or any  corporation  controlling  the  Liquidity  Provider,  and  such
increase is based upon the Liquidity Provider's  obligations hereunder and other
similar obligations,  the Borrower shall pay to the Liquidity Provider from time
to time such  additional  amount or amounts as are necessary to  compensate  the
Liquidity  Provider  for such  portion of such  increase as shall be  reasonably
allocable to the Liquidity Provider's obligations to the Borrower hereunder. The
Liquidity Provider agrees to use reasonable efforts  (consistent with applicable
legal and regulatory  restrictions)  to change the  jurisdiction  of its Lending
Office if making such change  would avoid the need for, or reduce the amount of,
any amount payable under this Section that may thereafter  accrue and would not,
in the reasonable  judgment of the Liquidity Provider,  be otherwise  materially
disadvantageous to the Liquidity Provider.

          The Liquidity Provider will notify the Borrower of any event occurring
after the date of this  Agreement  that will entitle the  Liquidity  Provider to
compensation  pursuant to this Section 3.02 as promptly as practicable  after it



obtains  knowledge  thereof and determines to request such  compensation,  which
notice shall describe in reasonable  detail the  calculation of the amounts owed
under this Section.  Determinations  by the  Liquidity  Provider for purposes of
this  Section  3.02 of the  effect of any  increase  in the  amount  of  capital
required to be maintained by the Liquidity  Provider and of the amount allocable
to the Liquidity Provider's obligations to the Borrower hereunder shall be prima
facie evidence of the amounts owed under this Section.

          Section 3.03.  PAYMENTS FREE OF  DEDUCTIONS.  (a) All payments made by
the Borrower under this  Agreement  shall be made free and clear of, and without
reduction  for or on account  of, any  present or future  stamp or other  taxes,
levies, imposts, duties, charges, fees, deductions,  withholdings,  restrictions
or  conditions  of any  nature  whatsoever  now or  hereafter  imposed,  levied,
collected,  withheld or assessed,  excluding  Excluded Taxes (such  non-excluded
taxes  being  referred to herein,  collectively,  as  "NON-EXCLUDED  TAXES" and,
individually,  as a "NON-EXCLUDED  TAX"). If any Non-Excluded Taxes are required
to be withheld  from any amounts  payable to the Liquidity  Provider  under this
Agreement,  the amounts so payable to the Liquidity  Provider shall be increased
to the extent necessary to yield to the Liquidity Provider (after payment of all
Non-Excluded  Taxes)  interest  or any other  such  amounts  payable  under this
Agreement  at the  rates or in the  amounts  specified  in this  Agreement.  The
Liquidity  Provider  agrees  to use  reasonable  efforts  (consistent  with  its
internal   policy  and  legal  and  regulatory   restrictions)   to  change  the
jurisdiction  of its Lending  Office if making such change  would avoid the need
for, or reduce the amount of, any such  additional  amounts that may  thereafter
accrue and would not, in the reasonable judgment of the Liquidity  Provider,  be
otherwise  disadvantageous to the Liquidity Provider. From time to time upon the
reasonable request of the Borrower,  the Liquidity Provider agrees to provide to
the  Borrower  two  original  Internal  Revenue  Service  Form 1001 or 4224,  as
appropriate,  or any successor or other form prescribed by the Internal  Revenue
Service,  certifying that the Liquidity Provider is exempt from or entitled to a
reduced  rate of United  States  withholding  tax on  payments  pursuant to this
Agreement.

          (b) All payments (including, without limitation, Advances) made by the
Liquidity  Provider  under this  Agreement  shall be made free and clear of, and
without  reduction for or on account of, any Taxes. If any Taxes are required to
be withheld or deducted  from any  amounts  payable to the  Borrower  under this
Agreement,  the Liquidity Provider shall (i) within the time prescribed therefor
by applicable law pay to the appropriate  governmental  or taxing  authority the
full  amount of any such  Taxes  (and any  additional  Taxes in  respect  of the
payment  required  under clause (ii) hereof) and make such reports or returns in
connection  therewith  at the  time or times  and in the  manner  prescribed  by
applicable  law, and (ii) pay to the Borrower an additional  amount which (after
deduction  of all such Taxes) will be  sufficient  to yield to the  Borrower the
full amount  which would have been  received  by it had no such  withholding  or
deduction  been made.  Within 30 days after the date of each payment  hereunder,
the Liquidity Provider shall furnish to the Borrower the original or a certified
copy of (or other  documentary  evidence of) the payment of the Taxes applicable
to such payment.

          Section 3.04.  PAYMENTS.  The Borrower  shall make or cause to be made
each payment to the Liquidity  Provider  under this Agreement so as to cause the
same to be received by the Liquidity Provider not later than 1:00 P.M. (New York
City time) on the day when due.  The  Borrower  shall make all such  payments in



lawful  money of the United  States of  America,  to the  Liquidity  Provider in
immediately  available  funds, by wire transfer to The Chase Manhattan Bank, One
Chase  Manhattan  Plaza,  New York,  New York 10081,  ABA No.  021-000-021,  for
account of Westdeutsche  Landesbank  Girozentrale,  New York branch, Account No.
920-1-060663, Reference: Continental Airlines Liquidity Facility 1998-3A-1.

          Section 3.05. COMPUTATIONS.  All computations of interest based on the
Base Rate  shall be made on the basis of a year of 365 or 366 days,  as the case
may be, and all  computations  of interest based on the LIBOR Rate shall be made
on the basis of a year of 360 days,  in each case for the actual  number of days
(including the first day but excluding the last day) occurring in the period for
which such interest is payable.

          Section 3.06. PAYMENT ON NON-BUSINESS DAYS. Whenever any payment to be
made  hereunder  shall be stated to be due on a day other than a  Business  Day,
such payment shall be made on the next succeeding Business Day and no additional
interest shall be due as a result (and if so made,  shall be deemed to have been
made when  due).  If any  payment in  respect  of  interest  on an Advance is so
deferred to the next succeeding  Business Day, such deferral shall not delay the
commencement  of the next Interest Period for such Advance (if such Advance is a
LIBOR  Advance) or reduce the number of days for which  interest will be payable
on such Advance on the next interest payment date for such Advance.

          Section  3.07.  INTEREST.  (a) Subject to Section  2.09,  the Borrower
shall pay, or shall cause to be paid, without  duplication,  interest on (i) the
unpaid  principal  amount of each  Advance from and  including  the date of such
Advance (or, in the case of an Applied Provider Advance,  from and including the
date on  which  the  amount  thereof  was  withdrawn  from  the  Class  A-1 Cash
Collateral  Account  to pay  interest  on the  Class  A-1  Certificates)  to but
excluding the date such principal  amount shall be paid in full (or, in the case
of an Applied Provider Advance,  the date on which the Class A-1 Cash Collateral
Account is fully  replenished  in respect  of such  Advance)  and (ii) any other
amount due hereunder (whether fees,  commissions,  expenses or other amounts or,
to the extent permitted by law, installments of interest on Advances or any such
other  amount)  which is not paid  when due  (whether  at  stated  maturity,  by
acceleration  or  otherwise)  from and  including  the due date  thereof  to but
excluding  the  date  such  amount  is paid in full,  in each  such  case,  at a
fluctuating  interest  rate  per  annum  for each  day  equal to the  Applicable
Liquidity  Rate (as defined  below) for such  Advance or such other amount as in
effect  for such  day,  but in no event at a rate  per  annum  greater  than the
maximum rate permitted by applicable  law;  PROVIDED,  HOWEVER,  that, if at any
time the  otherwise  applicable  interest rate as set forth in this Section 3.07
shall exceed the maximum rate  permitted by applicable  law, then any subsequent
reduction  in such  interest  rate will not reduce the rate of interest  payable
pursuant to this Section 3.07 below the maximum rate permitted by applicable law
until the total amount of interest  accrued  equals the amount of interest  that
would have accrued if such  otherwise  applicable  interest rate as set forth in
this Section 3.07 had at all times been in effect.

          (b)  Except as  provided  in clause (e) below,  each  Advance  will be
either a Base Rate Advance or a LIBOR Advance as provided in this Section.  Each
such  Advance  will be a Base Rate  Advance  for the period from the date of its
borrowing to (but  excluding)  the third  Business Day  following  the Liquidity



Provider's receipt of the Notice of Borrowing for such Advance. Thereafter, such
Advance shall be a LIBOR  Advance;  provided that the Borrower (at the direction
of  the  Controlling  Party,  so  long  as the  Liquidity  Provider  is not  the
Controlling Party) may (x) convert the Final Advance into a Base Rate Advance on
the last day of an  Interest  Period for such  Advance  by giving the  Liquidity
Provider no less than four Business  Days' prior written notice of such election
or (y)  elect to  maintain  the Final  Advance  as a Base  Rate  Advance  by not
requesting a conversion of the Final Advance to a LIBOR Advance under Clause (5)
of the  applicable  Notice of Borrowing  (or, if such Final Advance is deemed to
have been made,  without  delivery of a Notice of Borrowing  pursuant to Section
2.06, by requesting,  prior to 11:00 A.M. on the first Business Day  immediately
following the Borrower's receipt of the applicable Termination Notice, that such
Final Advance not be converted from a Base Rate Advance to a LIBOR Advance).

          (c) Each LIBOR Advance shall bear interest during each Interest Period
at a rate per annum  equal to the LIBOR Rate for such  Interest  Period plus the
Applicable Margin for such LIBOR Advance,  payable in arrears on the last day of
such Interest Period and, in the event of the payment of principal of such LIBOR
Advance on a day other than such last day,  on the date of such  payment (to the
extent of interest accrued on the amount of principal repaid).

          (d) Each Base Rate  Advance  shall bear  interest  at a rate per annum
equal to the Base Rate plus the  Applicable  Margin for such Base Rate  Advance,
payable in arrears on each  Regular  Distribution  Date and, in the event of the
payment  of  principal  of such Base Rate  Advance on a day other than a Regular
Distribution  Date,  on the date of such  payment  (to the  extent  of  interest
accrued on the amount of principal repaid).

          (e) Each outstanding Unapplied Provider Advance shall bear interest in
an amount  equal to the  Investment  Earnings on amounts on deposit in the Class
A-1 Cash  Collateral  Account  plus the  Applicable  Margin  for such  Unapplied
Provider  Advance on the amount of such Unapplied  Provider Advance from time to
time, payable in arrears on each Regular Distribution Date.

          (f)  Each  amount  not  paid  when  due   hereunder   (whether   fees,
commissions, expenses or other amounts or, to the extent permitted by applicable
law,  installments  of interest on Advances but excluding  Advances)  shall bear
interest at a rate per annum equal to the Base Rate plus 2.00% until paid.

          (g) Each change in the Base Rate shall become  effective  immediately.
The rates of interest specified in this Section 3.07 with respect to any Advance
or other amount shall be referred to as the "APPLICABLE LIQUIDITY RATE".

          Section 3.08.  REPLACEMENT OF BORROWER.  From time to time and subject
to the successor  Borrower's  meeting the eligibility  requirements set forth in
Section  6.9 of the  Intercreditor  Agreement  applicable  to the  Subordination
Agent,  upon the  effective  date and time  specified in a written and completed
Notice of Replacement  Subordination Agent in substantially the form of Annex VI
attached hereto (a "Notice of Replacement Subordination Agent") delivered to the
Liquidity  Provider by the then  Borrower,  the  successor  Borrower  designated
therein shall be substituted for as the Borrower for all purposes hereunder.



          Section 3.09. FUNDING LOSS INDEMNIFICATION.  The Borrower shall pay to
the Liquidity Provider,  upon the request of the Liquidity Provider, such amount
or amounts as shall be sufficient  (in the  reasonable  opinion of the Liquidity
Provider) to compensate it for any loss,  cost, or expense incurred by reason of
the  liquidation  or  redeployment  of deposits  or other funds  acquired by the
Liquidity  Provider to fund or maintain any LIBOR Advance (but excluding loss of
anticipated profits) incurred as a result of:

          (1) Any repayment of a LIBOR Advance on a date other than the last day
     of the Interest Period for such Advance; or

          (2) Any failure by the Borrower to borrow a LIBOR  Advance on the date
     for borrowing specified in the relevant notice under Section 2.02.

          Section 3.10. ILLEGALITY.  Notwithstanding any other provision in this
Agreement,  if any change in any  applicable  law,  rule or  regulation,  or any
change in the  interpretation  or  administration  thereof  by any  governmental
authority,  central bank or comparable agency charged with the interpretation or
administration  thereof, or compliance by the Liquidity Provider (or its Lending
Office) with any request or  directive  (whether or not having the force of law)
of any such authority,  central bank or comparable agency shall make it unlawful
or impossible for the Liquidity  Provider (or its Lending Office) to maintain or
fund its LIBOR  Advances,  then upon  notice to the  Borrower  by the  Liquidity
Provider,  the  outstanding  principal  amount  of the LIBOR  Advances  shall be
converted to Base Rate  Advances (a)  immediately  upon demand of the  Liquidity
Provider, if such change or compliance with such request, in the judgment of the
Liquidity Provider,  requires immediate  repayment;  or (b) at the expiration of
the last Interest  Period to expire before the effective date of any such change
or request.

                                   ARTICLE IV

                              CONDITIONS PRECEDENT

          Section 4.01.  CONDITIONS  PRECEDENT TO EFFECTIVENESS OF SECTION 2.01.
Section 2.01 of this  Agreement  shall  become  effective on and as of the first
date (the  "Effective  Date") on which the following  conditions  precedent have
been satisfied or waived:

          (a) The  Liquidity  Provider  shall  have  received  on or before  the
     Closing  Date  each of the  following,  and in the  case  of each  document
     delivered  pursuant to  paragraphs  (i),  (ii) and (iii),  each in form and
     substance satisfactory to the Liquidity Provider:

               (i) This Agreement duly executed on behalf of the Borrower;

               (ii) The Intercreditor  Agreement duly executed on behalf of each
          of the parties thereto;

               (iii) Fully executed  copies of each of the Operative  Agreements
          executed and  delivered on or before the Closing Date (other than this
          Agreement and the Intercreditor Agreement);



               (iv) A copy of the Prospectus  Supplement and specimen  copies of
          the Class A-1 Certificates;

               (v) An executed copy of each  document,  instrument,  certificate
          and opinion  delivered on or before the Closing  Date  pursuant to the
          Class A-1 Trust Agreement,  the Intercreditor  Agreement and the other
          Operative Agreements (in the case of each such opinion, other than the
          opinion of  counsel  for the  Underwriters,  either  addressed  to the
          Liquidity  Provider  or  accompanied  by a  letter  from  the  counsel
          rendering  such opinion to the effect that the  Liquidity  Provider is
          entitled  to  rely  on  such  opinion  as of its  date  as if it  were
          addressed to the Liquidity Provider);

               (vi)  Evidence  that  there  shall have been made and shall be in
          full force and effect, all filings,  recordings and/or  registrations,
          and there  shall have been given or taken any notice or other  similar
          action as may be  reasonably  necessary  or, to the extent  reasonably
          requested by the Liquidity Provider, reasonably advisable, in order to
          establish,   perfect,  protect  and  preserve  the  right,  title  and
          interest,  remedies, powers, privileges,  liens and security interests
          of,  or for  the  benefit  of,  the  Trustees,  the  Borrower  and the
          Liquidity  Provider created by the Operative  Agreements  executed and
          delivered on or prior to the Closing Date;

               (vii) An  agreement  from  Continental,  pursuant  to  which  (i)
          Continental agrees to provide copies of quarterly financial statements
          and audited annual financial statements to the Liquidity Provider, and
          such other  information  as the Liquidity  Provider  shall  reasonably
          request with respect to the transactions contemplated by the Operative
          Agreements,  in each case,  only to the  extent  that  Continental  is
          obligated to provide such information pursuant to Section 8.2.1 of the
          Leases (related to Leased  Aircraft) or the  corresponding  section of
          the Indentures  (related to Owned Aircraft) to the parties thereto and
          (ii)  Continental  agrees to allow the  Liquidity  Provider to inspect
          Continental's  books and records regarding such  transactions,  and to
          discuss such  transactions with officers and employees of Continental;
          and

               (viii) Such other documents,  instruments, opinions and approvals
          pertaining  to the  transactions  contemplated  hereby or by the other
          Operative  Agreements as the Liquidity  Provider shall have reasonably
          requested.

          (b) The following  statement  shall be true on and as of the Effective
     Date:  no event has  occurred and is  continuing,  or would result from the
     entering  into  of this  Agreement  or the  making  of any  Advance,  which
     constitutes a Liquidity Event of Default.

          (c) The Liquidity  Provider shall have received payment in full of all
     fees  and  other  sums  required  to be paid to or for the  account  of the
     Liquidity Provider on or prior to the Effective Date.



          (d) All conditions precedent to the issuance of the Certificates under
     the Trust  Agreements  shall have been satisfied or waived,  all conditions
     precedent to the effectiveness of the other Liquidity Facilities shall have
     been satisfied or waived,  and all conditions  precedent to the purchase of
     the Certificates by the Underwriters under the Underwriting Agreement shall
     have been satisfied  (unless any of such  conditions  precedent  shall have
     been waived by the Underwriters).

          (e) The Borrower  shall have  received a  certificate,  dated the date
     hereof,  signed  by a  duly  authorized  representative  of  the  Liquidity
     Provider,  certifying that all conditions precedent to the effectiveness of
     Section 2.01 have been satisfied or waived.

          Section 4.02. CONDITIONS PRECEDENT TO BORROWING. The obligation of the
Liquidity Provider to make an Advance on the occasion of each Borrowing shall be
subject to the conditions  precedent that the Effective Date shall have occurred
and,  prior to the date of such  Borrowing,  the Borrower shall have delivered a
Notice of Borrowing which conforms to the terms and conditions of this Agreement
and has been  completed as may be required by the relevant form of the Notice of
Borrowing for the type of Advances requested.

                                    ARTICLE V

                                    COVENANTS

          Section 5.01.  AFFIRMATIVE  COVENANTS OF THE BORROWER.  So long as any
Advance  shall remain unpaid or the  Liquidity  Provider  shall have any Maximum
Commitment hereunder or the Borrower shall have any obligation to pay any amount
to the Liquidity  Provider  hereunder,  the Borrower will,  unless the Liquidity
Provider shall otherwise consent in writing:

          (a) PERFORMANCE OF THIS AND OTHER AGREEMENTS.  Punctually pay or cause
     to be paid all  amounts  payable by it under this  Agreement  and the other
     Operative  Agreements and observe and perform in all material  respects the
     conditions,  covenants and requirements  applicable to it contained in this
     Agreement and the other Operative Agreements.

          (b) REPORTING  REQUIREMENTS.  Furnish to the  Liquidity  Provider with
     reasonable promptness,  such other information and data with respect to the
     transactions  contemplated by the Operative Agreements as from time to time
     may be  reasonably  requested  by the  Liquidity  Provider;  and permit the
     Liquidity Provider, upon reasonable notice, to inspect the Borrower's books
     and records with respect to such transactions and to meet with officers and
     employees of the Borrower to discuss such transactions.

          (c) CERTAIN OPERATIVE  AGREEMENTS.  Furnish to the Liquidity  Provider
     with reasonable  promptness,  such Operative  Agreements entered into after
     the date  hereof as from time to time may be  reasonably  requested  by the
     Liquidity Provider.

          Section  5.02.  NEGATIVE  COVENANTS  OF THE  BORROWER.  So long as any
Advance  shall remain unpaid or the  Liquidity  Provider  shall have any Maximum



Commitment hereunder or the Borrower shall have any obligation to pay any amount
to the Liquidity Provider hereunder,  the Borrower will not appoint or permit or
suffer to be appointed any successor  Borrower without the prior written consent
of the Liquidity Provider,  which consent shall not be unreasonably  withheld or
delayed.

                                   ARTICLE VI

                           LIQUIDITY EVENTS OF DEFAULT

          Section 6.01.  LIQUIDITY EVENTS OF DEFAULT. If (a) any Liquidity Event
of Default has occurred  and is  continuing  and (b) there is a Performing  Note
Deficiency,  the  Liquidity  Provider  may,  in its  discretion,  deliver to the
Borrower a  Termination  Notice,  the effect of which  shall be to cause (i) the
obligation of the Liquidity Provider to make Advances hereunder to expire on the
fifth Business Day after the date on which such  Termination  Notice is received
by the  Borrower,  (ii) the  Borrower to  promptly  request,  and the  Liquidity
Provider to promptly  make, a Final Advance in accordance  with Section  2.02(d)
hereof  and  Section  3.6(i)  of the  Intercreditor  Agreement,  (iii) all other
outstanding  Advances to be  automatically  converted  into Final  Advances  for
purposes of  determining  the  Applicable  Liquidity  Rate for interest  payable
thereon,  and (iv)  subject  to  Sections  2.07 and 2.09  hereof,  all  Advances
(including,  without  limitation,  any  Provider  Advance and  Applied  Provider
Advance),  any  accrued  interest  thereon  and any  other  amounts  outstanding
hereunder to become immediately due and payable to the Liquidity Provider.

                                   ARTICLE VII

                                  MISCELLANEOUS

          Section 7.01. AMENDMENTS, ETC. No amendment or waiver of any provision
of this Agreement, nor consent to any departure by the Borrower therefrom, shall
in any event be effective  unless the same shall be in writing and signed by the
Liquidity  Provider,  and,  in the case of an  amendment  or of a waiver  by the
Borrower,  the Borrower, and then such waiver or consent shall be effective only
in the specific instance and for the specific purpose for which given.

          Section 7.02.  NOTICES,  ETC. Except as otherwise  expressly  provided
herein, all notices and other communications  provided for hereunder shall be in
writing (including telecopier and mailed or delivered or sent by telecopier):

               Borrower:           WILMINGTON TRUST COMPANY
                                   Rodney Square North
                                   1100 North Market Square
                                   Wilmington, DE 19890-0001
                                   Attention:  Corporate Trust Administration

                                   Telephone:  (302) 651-1000
                                   Telecopy:   (302) 651-8882



               Liquidity Provider: WESTDEUTSCHE LANDESBANK
                                    GIROZENTRALE
                                   Transportation Finance
                                   1211 Avenue of the Americas
                                   New York, NY 10036
                                   Attention:  Brigitte Thieme

                                   Telephone: (212) 852-6111
                                   Telecopy:  (212) 921-5947

               with a copy to:     WESTDEUTSCHE LANDESBANK
                                    GIROZENTRALE
                                   Loan Administration
                                   1211 Avenue of the Americas
                                   New York, NY 10036
                                   Attention:  Steve Nibur

                                   Telephone: (212) 852-6323
                                   Telecopy:  (212) 302-7946

or, as to each of the foregoing, at such other address as shall be designated by
such  Person  in  a  written  notice  to  the  others.   All  such  notices  and
communications  shall be effective (i) if given by telecopier,  when transmitted
to the telecopier  number specified above, (ii) if given by mail, when deposited
in the mails  addressed as specified  above,  and (iii) if given by other means,
when delivered at the address  specified  above,  except that written notices to
the Liquidity  Provider pursuant to the provisions of Articles II and III hereof
shall not be effective until received by the Liquidity  Provider.  A copy of all
notices  delivered  hereunder  to either party shall in addition be delivered to
each  of the  parties  to  the  Participation  Agreements  at  their  respective
addresses set forth therein.

          Section  7.03.  NO  WAIVER;  REMEDIES.  No  failure on the part of the
Liquidity Provider to exercise, and no delay in exercising, any right under this
Agreement  shall  operate as a waiver  thereof;  nor shall any single or partial
exercise  of any right  under  this  Agreement  preclude  any  other or  further
exercise  thereof  or the  exercise  of any other  right.  The  remedies  herein
provided are cumulative and not exclusive of any remedies provided by law.

          Section  7.04.  FURTHER  ASSURANCES.  The  Borrower  agrees to do such
further  acts and things and to execute  and deliver to the  Liquidity  Provider
such additional assignments, agreements, powers and instruments as the Liquidity
Provider  may  reasonably  require or deem  advisable  to carry into  effect the
purposes  of this  Agreement  and the other  Operative  Agreements  or to better
assure and confirm unto the Liquidity  Provider its rights,  powers and remedies
hereunder and under the other Operative Agreements.

          Section 7.05.  INDEMNIFICATION;  SURVIVAL OF CERTAIN  PROVISIONS.  The
Liquidity  Provider  shall be  indemnified  hereunder  to the  extent and in the
manner described in Section 8.1 of the Participation  Agreements with respect to



Owned Aircraft and Section 9.1 of the  Participation  Agreements with respect to
Leased Aircraft. In addition, the Borrower agrees to indemnify,  protect, defend
and hold harmless the Liquidity  Provider  from,  against and in respect of, and
shall pay on demand,  all Expenses of any kind or nature  whatsoever (other than
any Expenses of the nature  described in Section 3.01, 3.02 or 7.07 hereof or in
the Fee Letter applicable to this Agreement  (regardless of whether  indemnified
against pursuant to said Sections or in such Fee Letter)),  that may be imposed,
incurred by or asserted  against any Liquidity  Indemnitee,  in any way relating
to, resulting from, or arising out of or in connection with any action,  suit or
proceeding by any third party against such Liquidity  Indemnitee and relating to
this Agreement,  the Fee Letter applicable to this Agreement,  the Intercreditor
Agreement or any Financing Agreement; PROVIDED, HOWEVER, that the Borrower shall
not be required to  indemnify,  protect,  defend and hold harmless any Liquidity
Indemnitee in respect of any Expense of such Liquidity  Indemnitee to the extent
such Expense is (i) attributable to the gross  negligence or willful  misconduct
of such Liquidity  Indemnitee or any other Liquidity  Indemnitee,  (ii) ordinary
and usual operating  overhead expense,  or (iii)  attributable to the failure by
such  Liquidity  Indemnitee  or any other  Liquidity  Indemnitee  to  perform or
observe any  agreement,  covenant or  condition  on its part to be  performed or
observed  in  this  Agreement,  the  Intercreditor  Agreement,  the  Fee  Letter
applicable to this Agreement, the Tax Letter or any other Operative Agreement to
which it is a party.  The  indemnities  contained  in Section 8.1 or 9.1, as the
case may be, of the  Participation  Agreements,  and the  provisions of Sections
3.01, 3.02,  3.03, 3.09, 7.05 and 7.07 hereof,  shall survive the termination of
this Agreement.

          Section  7.06.  LIABILITY OF THE LIQUIDITY  PROVIDER.  (a) Neither the
Liquidity Provider nor any of its officers,  employees,  directors or affiliates
shall  be  liable  or  responsible  for:  (i) the use  which  may be made of the
Advances  or any  acts  or  omissions  of the  Borrower  or any  beneficiary  or
transferee  in  connection   therewith;   (ii)  the  validity,   sufficiency  or
genuineness of documents,  or of any endorsement thereon, even if such documents
should prove to be in any or all respects invalid,  insufficient,  fraudulent or
forged;  or (iii) the  making of  Advances  by the  Liquidity  Provider  against
delivery of a Notice of Borrowing and other  documents  which do not comply with
the terms  hereof;  PROVIDED,  HOWEVER,  that the  Borrower  shall  have a claim
against the Liquidity  Provider,  and the Liquidity  Provider shall be liable to
the Borrower,  to the extent of any damages  suffered by the Borrower which were
the result of (A) the Liquidity  Provider's  willful misconduct or negligence in
determining  whether documents presented hereunder comply with the terms hereof,
or (B)  any  breach  by the  Liquidity  Provider  of any of the  terms  of  this
Agreement,  including,  but not limited to, the Liquidity  Provider's failure to
make lawful  payment  hereunder  after the  delivery to it by the  Borrower of a
Notice of Borrowing strictly complying with the terms and conditions hereof.

          (b) Neither the Liquidity Provider nor any of its officers, employees,
directors or affiliates  shall be liable or  responsible  in any respect for (i)
any error, omission, interruption or delay in transmission, dispatch or delivery
of any message or advice, however transmitted, in connection with this Agreement
or any Notice of Borrowing delivered hereunder,  or (ii) any action, inaction or
omission which may be taken by it in good faith,  absent  willful  misconduct or
negligence  (in which  event the extent of the  Liquidity  Provider's  potential
liability  to the  Borrower  shall be  limited  as set forth in the  immediately
preceding  paragraph),  in  connection  with  this  Agreement  or any  Notice of
Borrowing.



          Section 7.07.  COSTS,  EXPENSES AND TAXES. The Borrower agrees to pay,
or cause to be paid (A) on the Effective Date and on such later date or dates on
which the Liquidity  Provider shall make demand,  all  reasonable  out-of-pocket
costs and expenses  (including,  without  limitation,  the  reasonable  fees and
expenses  of  outside  counsel  for the  Liquidity  Provider)  of the  Liquidity
Provider in connection with the preparation,  negotiation,  execution, delivery,
filing and recording of this Agreement,  any other  Operative  Agreement and any
other documents which may be delivered in connection with this Agreement and (B)
on demand, all reasonable costs and expenses (including  reasonable counsel fees
and expenses) of the Liquidity  Provider in connection  with (i) the enforcement
of this Agreement or any other  Operative  Agreement,  (ii) the  modification or
amendment of, or supplement to, this Agreement or any other Operative  Agreement
or such  other  documents  which may be  delivered  in  connection  herewith  or
therewith  (whether or not the same shall become  effective) or (iii) any action
or  proceeding  relating to any order,  injunction,  or other  process or decree
restraining or seeking to restrain the Liquidity Provider from paying any amount
under  this  Agreement,  the  Intercreditor  Agreement  or any  other  Operative
Agreement or otherwise  affecting the application of funds in the Class A-1 Cash
Collateral Accounts. In addition,  the Borrower shall pay any and all recording,
stamp and other  similar  taxes and fees payable or  determined to be payable in
connection with the execution, delivery, filing and recording of this Agreement,
any other Operative  Agreement and such other documents,  and agrees to save the
Liquidity  Provider  harmless  from and  against  any and all  liabilities  with
respect to or  resulting  from any delay in paying or omission to pay such taxes
or fees.

          Section 7.08. BINDING EFFECT; PARTICIPATIONS. (a) This Agreement shall
be binding  upon and inure to the  benefit  of the  Borrower  and the  Liquidity
Provider and their  respective  successors and assigns,  except that neither the
Liquidity  Provider  (except as  otherwise  provided in this  Section  7.08) nor
(except as  contemplated  by Section 3.08) the Borrower  shall have the right to
assign its rights or  obligations  hereunder or any interest  herein without the
prior written consent of the other party, subject to the requirements of Section
7.08(b). The Liquidity Provider may grant participations herein or in any of its
rights hereunder  (including,  without  limitation,  funded  participations  and
participations in rights to receive interest  payments  hereunder) and under the
other Operative  Agreements to such Persons as the Liquidity Provider may in its
sole discretion select,  subject to the requirements of Section 7.08(b). No such
participation  by the Liquidity  Provider,  however,  will relieve the Liquidity
Provider of its obligations  hereunder.  In connection with any participation or
any  proposed  participation,   the  Liquidity  Provider  may  disclose  to  the
participant or the proposed  participant  any  information  that the Borrower is
required to deliver or to disclose to the  Liquidity  Provider  pursuant to this
Agreement.  The Borrower  acknowledges and agrees that the Liquidity  Provider's
source  of  funds  may  derive  in  part  from  its  participants   (other  than
Continental).  Accordingly, references in this Agreement and the other Operative
Agreements  to  determinations,   reserve  and  capital  adequacy  requirements,
increased costs,  reduced receipts,  additional  amounts due pursuant to Section
3.03 and the like as they pertain to the Liquidity Provider shall be deemed also
to include  those of each of its  participants  (subject,  in each case,  to the
maximum amount that would have been incurred by or attributable to the Liquidity
Provider directly if the Liquidity  Provider,  rather than the participant,  had
held the interest participated).



          (b) If, pursuant to subsection (a) above, the Liquidity Provider sells
any  participation  in this  Agreement  to any bank or  other  entity  (each,  a
"TRANSFEREE"),  then, concurrently with the effectiveness of such participation,
the Transferee shall (i) represent to the Liquidity Provider (for the benefit of
the  Liquidity  Provider and the  Borrower)  either (A) that it is  incorporated
under  the laws of the  United  States  or a state  thereof  or (B)  that  under
applicable  law and  treaties,  no taxes will be required  to be  withheld  with
respect  to any  payments  to be made  to such  Transferee  in  respect  of this
Agreement,  (ii) furnish to the Liquidity Provider and the Borrower either (x) a
statement that it is incorporated under the laws of the United States or a state
thereof or (y) if it is not so incorporated,  two copies of a properly completed
United States  Internal  Revenue Service Form 4224 or Form 1001, as appropriate,
or other  applicable  form,  certificate or document  prescribed by the Internal
Revenue Service  certifying,  in each case, such  Transferee's  entitlement to a
complete exemption from United States federal  withholding tax in respect to any
and all payments to be made  hereunder,  and (iii) agree (for the benefit of the
Liquidity  Provider and the Borrower) to provide the Liquidity  Provider and the
Borrower a new Form 4224 or Form 1001, as appropriate, (A) on or before the date
that any such form expires or becomes  obsolete or (B) after the  occurrence  of
any event requiring a change in the most recent form previously  delivered by it
and prior to the  immediately  following due date of any payment by the Borrower
hereunder,  certifying  in the  case  of a Form  1001  or Form  4224  that  such
Transferee  is  entitled to a complete  exemption  from  United  States  federal
withholding  tax on  payments  under this  Agreement.  Unless the  Borrower  has
received forms or other documents reasonably satisfactory to it (and required by
applicable  law)  indicating  that payments  hereunder are not subject to United
States federal  withholding tax, the Borrower will withhold taxes as required by
law from such payments at the applicable statutory rate.

          (c)  Notwithstanding  the other  provisions of this Section 7.08,  the
Liquidity  Provider  may assign and  pledge all or any  portion of the  Advances
owing  to it to any  Federal  Reserve  Bank or the  United  States  Treasury  as
collateral  security  pursuant to  Regulation A of the Board of Governors of the
Federal Reserve System and any Operating Circular issued by such Federal Reserve
Bank, provided that any payment in respect of such assigned Advances made by the
Borrower  to the  Liquidity  Provider  in  accordance  with  the  terms  of this
Agreement shall satisfy the Borrower's  obligations hereunder in respect of such
assigned Advance to the extent of such payment. No such assignment shall release
the Liquidity Provider from its obligations hereunder.

          Section 7.09.  SEVERABILITY.  Any provision of this Agreement which is
prohibited,  unenforceable  or not authorized in any  jurisdiction  shall, as to
such   jurisdiction,   be  ineffective  to  the  extent  of  such   prohibition,
unenforceability  or   non-authorization   without  invalidating  the  remaining
provisions hereof or affecting the validity,  enforceability or legality of such
provision in any other jurisdiction.

          Section 7.10.  GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.



          Section 7.11. SUBMISSION TO JURISDICTION; WAIVER OF JURY TRIAL; WAIVER
OF  IMMUNITY.   (a)  Each  of  the  parties   hereto  hereby   irrevocably   and
unconditionally:

               (i)  submits for itself and its  property in any legal  action or
          proceeding   relating  to  this  Agreement  or  any  other   Operative
          Agreement,  or for  recognition  and  enforcement  of any  judgment in
          respect hereof or thereof, to the nonexclusive general jurisdiction of
          the courts of the State of New York,  the courts of the United  States
          of America for the Southern  District of New York,  and the  appellate
          courts from any thereof;

               (ii) consents  that any such action or proceeding  may be brought
          in such courts,  and waives any objection that it may now or hereafter
          have to the venue of any such action or  proceeding  in any such court
          or that such action or proceeding was brought in an inconvenient court
          and agrees not to plead or claim the same;

               (iii)  agrees  that  service  of  process  in any such  action or
          proceeding  may be effected by mailing a copy thereof by registered or
          certified mail (or any substantially  similar form and mail),  postage
          prepaid, to each party hereto at its address set forth in Section 7.02
          hereof, or at such other address of which the Liquidity Provider shall
          have been notified pursuant thereto; and

               (iv) agrees that nothing  herein shall affect the right to effect
          service of process in any other manner permitted by law or shall limit
          the right to sue in any other jurisdiction.

          (b) THE BORROWER AND THE LIQUIDITY PROVIDER EACH HEREBY AGREE TO WAIVE
THEIR  RESPECTIVE  RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION  BASED
UPON OR ARISING OUT OF THIS  AGREEMENT OR ANY DEALINGS  BETWEEN THEM RELATING TO
THE  SUBJECT  MATTER  OF THIS  AGREEMENT  AND  THE  RELATIONSHIP  THAT IS  BEING
ESTABLISHED, including, without limitation, contract claims, tort claims, breach
of duty claims and all other common law and statutory  claims.  The Borrower and
the  Liquidity  Provider  each warrant and  represent  that it has reviewed this
waiver with its legal counsel,  and that it knowingly and voluntarily waives its
jury trial rights following consultation with such legal counsel. THIS WAIVER IS
IRREVOCABLE, AND CANNOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND THIS WAIVER
SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS
TO THIS AGREEMENT.

          (c) The Liquidity Provider hereby waives any immunity it may have from
the  jurisdiction  of the courts of the United States or of any State and waives
any immunity any of its  properties  located in the United  States may have from
attachment  or  execution  upon a judgment  entered by any such court  under the
United States Foreign Sovereign  Immunities Act of 1976 or any similar successor
legislation.



          Section  7.12.  EXECUTION  IN  COUNTERPARTS.  This  Agreement  may  be
executed  in any  number of  counterparts  and by  different  parties  hereto on
separate  counterparts,  each  of  which  counterparts,  when  so  executed  and
delivered,  shall be deemed  to be an  original  and all of which  counterparts,
taken together, shall constitute but one and the same Agreement.

          Section 7.13. ENTIRETY.  This Agreement,  the Intercreditor  Agreement
and the other  Operative  Agreements to which the Liquidity  Provider is a party
constitute  the entire  agreement  of the  parties  hereto  with  respect to the
subject matter hereof and supersedes all prior  understandings and agreements of
such parties.

          Section  7.14.  HEADINGS.  Section  headings  in  this  Agreement  are
included  herein for  convenience  of reference  only and shall not constitute a
part of this Agreement for any other purpose.

          Section 7.15. TRANSFER. The Liquidity Provider hereby acknowledges and
consents  to  the  Transfer   contemplated  by  the  Assignment  and  Assumption
Agreement.

          Section 7.16. LIQUIDITY PROVIDER'S OBLIGATION TO MAKE ADVANCES. EXCEPT
AS EXPRESSLY  SET FORTH IN THIS  AGREEMENT,  THE  OBLIGATIONS  OF THE  LIQUIDITY
PROVIDER  TO MAKE  ADVANCES  HEREUNDER,  AND THE  BORROWER'S  RIGHTS TO  DELIVER
NOTICES OF  BORROWING  REQUESTING  THE MAKING OF  ADVANCES  HEREUNDER,  SHALL BE
UNCONDITIONAL  AND  IRREVOCABLE,  AND SHALL BE PAID OR  PERFORMED,  IN EACH CASE
STRICTLY IN ACCORDANCE WITH THE TERMS OF THIS AGREEMENT.



          IN WITNESS WHEREOF,  the parties have caused this Agreement to be duly
executed and delivered by their respective officers thereunto duly authorized as
of the date first set forth above.

                            WILMINGTON TRUST COMPANY,
                                not in its individual capacity but solely as
                                Subordination Agent, as agent and trustee for
                                the Class A-1 Trust, as Borrower



                            By:_________________________________
                               Name:
                               Title:


                            WESTDEUTSCHE LANDESBANK
                            GIROZENTRALE, acting through its
                            New York Branch,
                            as Liquidity Provider



                            By:_________________________________
                               Name:
                               Title:



                            By:_________________________________
                               Name:
                               Title:



                                                                      Annex I to
                                                      Revolving Credit Agreement

                      INTEREST ADVANCE NOTICE OF BORROWING


          The  undersigned,  a duly  authorized  signatory  of  the  undersigned
borrower  (the   "BORROWER"),   hereby  certifies  to  WESTDEUTSCHE   LANDESBANK
GIROZENTRALE,  acting  through its New York Branch (the  "LIQUIDITY  PROVIDER"),
with  reference  to the  Revolving  Credit  Agreement  (1998-3A-1)  dated  as of
November  3,  1998,  between  the  Borrower  and  the  Liquidity  Provider  (the
"LIQUIDITY  Agreement";  the terms  defined  therein and not  otherwise  defined
herein being used herein as therein defined or referenced), that:

          (1) The Borrower is the  Subordination  Agent under the  Intercreditor
     Agreement.

          (2) The Borrower is delivering this Notice of Borrowing for the making
     of an Interest  Advance by the  Liquidity  Provider to be used,  subject to
     clause  (3)(v)  below,  for  the  payment  of  interest  on the  Class  A-1
     Certificates  which was payable on  ____________,  ____ (the  "DISTRIBUTION
     DATE") in accordance  with the terms and  provisions of the Class A-1 Trust
     Agreement and the Class A-1 Certificates,  which Advance is requested to be
     made on ____________, ____.

          (3)  The  amount  of the  Interest  Advance  requested  hereby  (i) is
     $_______________.__,  to be  applied  in  respect  of  the  payment  of the
     interest  which was due and  payable on the Class A-1  Certificates  on the
     Distribution  Date,  (ii) does not include  any amount with  respect to the
     payment of  principal  of, or premium  on, the Class A-1  Certificates,  or
     principal  of, or interest or premium on, the Class A-2  Certificates,  the
     Class  B  Certificates,  the  Class  C-1  Certificates  or  the  Class  C-2
     Certificates,  (iii) was computed in accordance  with the provisions of the
     Class A-1 Certificates, the Class A-1 Trust Agreement and the Intercreditor
     Agreement (a copy of which  computation is attached  hereto as Schedule I),
     (iv) does not exceed the Maximum  Available  Commitment on the date hereof,
     (v) does not include  any amount of  interest  which was due and payable on
     the Class A-1  Certificates  on such  Distribution  Date but which  remains
     unpaid due to the  failure of the  Depositary  to pay any amount of accrued
     interest on the  Deposits on such  Distribution  Date and (vi) has not been
     and is not the subject of a prior or contemporaneous Notice of Borrowing.

          (4)  Upon  receipt  by or on  behalf  of the  Borrower  of the  amount
     requested  hereby,  (a) the Borrower will apply the same in accordance with
     the terms of Section 3.6(b) of the Intercreditor  Agreement, (b) no portion
     of such amount shall be applied by the  Borrower for any other  purpose and
     (c) no portion of such amount  until so applied  shall be  commingled  with
     other funds held by the Borrower.

          The  Borrower  hereby  acknowledges  that,  pursuant to the  Liquidity
Agreement,  the making of the  Interest  Advance as  requested by this Notice of
Borrowing shall  automatically  reduce,  subject to  reinstatement in accordance



with the terms of the Liquidity  Agreement,  the Maximum Available Commitment by
an amount  equal to the  amount of the  Interest  Advance  requested  to be made
hereby as set forth in clause (i) of paragraph (3) of this  Certificate and such
reduction shall automatically result in corresponding  reductions in the amounts
available to be borrowed pursuant to a subsequent Advance.

          IN WITNESS  WHEREOF,  the Borrower has  executed  and  delivered  this
Notice of Borrowing as of the ____ day of _________, ____.

                            WILMINGTON TRUST COMPANY,
                                not in its individual capacity but solely as
                                Subordination Agent, as Borrower



                            By:_________________________________
                               Name:
                               Title:



               SCHEDULE I TO INTEREST ADVANCE NOTICE OF BORROWING

                   [Insert Copy of Computations in accordance
                   with Interest Advance Notice of Borrowing]



                                                                     Annex II to
                                                      Revolving Credit Agreement


                   NON-EXTENSION ADVANCE NOTICE OF BORROWING


          The  undersigned,  a duly  authorized  signatory  of  the  undersigned
subordination   agent  (the   "BORROWER"),   hereby  certifies  to  WESTDEUTSCHE
LANDESBANK  GIROZENTRALE,  acting  through its New York  Branch (the  "LIQUIDITY
PROVIDER"),  with reference to the Revolving Credit Agreement  (1998-3A-1) dated
as of November 3, 1998,  between the Borrower and the  Liquidity  Provider  (the
"LIQUIDITY  AGREEMENT";  the terms  defined  therein and not  otherwise  defined
herein being used herein as therein defined or referenced), that:

          (1) The Borrower is the  Subordination  Agent under the  Intercreditor
     Agreement.

          (2) The Borrower is delivering this Notice of Borrowing for the making
     of the Non-Extension  Advance by the Liquidity  Provider to be used for the
     funding of the Class A-1 Cash Collateral Account in accordance with Section
     3.6(d) of the  Intercreditor  Agreement,  which  Advance is requested to be
     made on __________, ____.

          (3) The amount of the  Non-Extension  Advance  requested hereby (i) is
     $_______________.__,  which equals the Maximum Available  Commitment on the
     date hereof and is to be applied in respect of the funding of the Class A-1
     Cash   Collateral   Account  in  accordance  with  Section  3.6(d)  of  the
     Intercreditor  Agreement,  (ii) does not include any amount with respect to
     the payment of the principal of, or premium on, the Class A-1 Certificates,
     or principal of, or interest or premium on, the Class A-2 Certificates, the
     Class  B  Certificates,  the  Class  C-1  Certificates  or  the  Class  C-2
     Certificates,  (iii) was computed in accordance  with the provisions of the
     Class A-1 Certificates, the Class A-1 Trust Agreement and the Intercreditor
     Agreement (a copy of which  computation is attached  hereto as Schedule I),
     and (iv) has not been and is not the subject of a prior or  contemporaneous
     Notice of Borrowing under the Liquidity Agreement.

          (4)  Upon  receipt  by or on  behalf  of the  Borrower  of the  amount
     requested  hereby,  (a) the Borrower  will deposit such amount in the Class
     A-1 Cash Collateral Account and apply the same in accordance with the terms
     of Section 3.6(d) of the  Intercreditor  Agreement,  (b) no portion of such
     amount shall be applied by the  Borrower  for any other  purpose and (c) no
     portion of such  amount  until so applied  shall be  commingled  with other
     funds held by the Borrower.

          (5) The Borrower hereby requests that the Advance  requested hereby be
     a Base Rate  Advance and that such Base Rate  Advance be  converted  into a
     LIBOR  Advance on the third  Business  Day  following  your receipt of this
     notice.

          The  Borrower  hereby  acknowledges  that,  pursuant to the  Liquidity
Agreement,  (A) the making of the  Non-Extension  Advance as  requested  by this
Notice of Borrowing shall automatically and irrevocably terminate the obligation



of  the  Liquidity  Provider  to  make  further  Advances  under  the  Liquidity
Agreement;  and (B)  following  the  making  by the  Liquidity  Provider  of the
Non-Extension Advance requested by this Notice of Borrowing,  the Borrower shall
not be entitled to request any further Advances under the Liquidity Agreement.

          IN WITNESS  WHEREOF,  the Borrower has  executed  and  delivered  this
Notice of Borrowing as of the ____ day of _________, ____.

                                       WILMINGTON TRUST COMPANY,
                                           not in its individual capacity but
                                           solely as Subordination Agent, as
                                           Borrower


                                       By:_________________________________
                                          Name:
                                          Title:



             SCHEDULE I TO NON-EXTENSION ADVANCE NOTICE OF BORROWING


                   [Insert Copy of computations in accordance
                with Non-Extension Advance Notice of Borrowing]



                                                                    Annex III to
                                                      Revolving Credit Agreement

                     DOWNGRADE ADVANCE NOTICE OF BORROWING


          The  undersigned,  a duly  authorized  signatory  of  the  undersigned
subordination   agent  (the   "BORROWER"),   hereby  certifies  to  WESTDEUTSCHE
LANDESBANK  GIROZENTRALE,  acting  through its New York  Branch (the  "LIQUIDITY
PROVIDER"),  with reference to the Revolving Credit Agreement  (1998-3A-1) dated
as of November 3, 1998,  between the Borrower and the  Liquidity  Provider  (the
"LIQUIDITY  AGREEMENT";  the terms  defined  therein and not  otherwise  defined
herein being used herein as therein defined or referenced), that:

          (1) The Borrower is the  Subordination  Agent under the  Intercreditor
     Agreement.

          (2) The Borrower is delivering this Notice of Borrowing for the making
     of the  Downgrade  Advance  by the  Liquidity  Provider  to be used for the
     funding of the Class A-1 Cash Collateral Account in accordance with Section
     3.6(c) of the  Intercreditor  Agreement by reason of the downgrading of the
     short-term unsecured debt rating of the Liquidity Provider issued by either
     Rating Agency below the Threshold Rating,  which Advance is requested to be
     made on __________, ____.

          (3) The  amount  of the  Downgrade  Advance  requested  hereby  (i) is
     $_______________.__,  which equals the Maximum Available  Commitment on the
     date hereof and is to be applied in respect of the funding of the Class A-1
     Cash   Collateral   Account  in  accordance  with  Section  3.6(c)  of  the
     Intercreditor  Agreement,  (ii) does not include any amount with respect to
     the payment of the principal of, or premium on, the Class A-1 Certificates,
     or principal of, or interest or premium on, the Class A-2 Certificates, the
     Class  B  Certificates,  the  Class  C-1  Certificates  or  the  Class  C-2
     Certificates,  (iii) was computed in accordance  with the provisions of the
     Class A-1 Certificates, the Class A-1 Trust Agreement and the Intercreditor
     Agreement (a copy of which  computation is attached  hereto as Schedule I),
     and (iv) has not been and is not the subject of a prior or  contemporaneous
     Notice of Borrowing under the Liquidity Agreement.

          (4)  Upon  receipt  by or on  behalf  of the  Borrower  of the  amount
     requested  hereby,  (a) the Borrower  will deposit such amount in the Class
     A-1 Cash Collateral Account and apply the same in accordance with the terms
     of Section 3.6(c) of the  Intercreditor  Agreement,  (b) no portion of such
     amount shall be applied by the  Borrower  for any other  purpose and (c) no
     portion of such  amount  until so applied  shall be  commingled  with other
     funds held by the Borrower.

          The  Borrower  hereby  acknowledges  that,  pursuant to the  Liquidity
Agreement,  (A) the making of the Downgrade  Advance as requested by this Notice
of Borrowing shall automatically and irrevocably terminate the obligation of the



Liquidity Provider to make further Advances under the Liquidity  Agreement;  and
(B)  following the making by the  Liquidity  Provider of the  Downgrade  Advance
requested by this Notice of  Borrowing,  the  Borrower  shall not be entitled to
request any further Advances under the Liquidity Agreement.

          IN WITNESS  WHEREOF,  the Borrower has  executed  and  delivered  this
Notice of Borrowing as of the ____ day of ________, ____.

                                       WILMINGTON TRUST COMPANY,
                                           not in its individual capacity but
                                           solely as Subordination Agent, as
                                           Borrower



                                       By:________________________________
                                          Name:
                                          Title:



               SCHEDULE I TO DOWNGRADE ADVANCE NOTICE OF BORROWING


                   [Insert Copy of computations in accordance
                  with Downgrade Advance Notice of Borrowing]



                                                                     Annex IV to
                                                      Revolving Credit Agreement

                       FINAL ADVANCE NOTICE OF BORROWING

          The  undersigned,  a duly  authorized  signatory  of  the  undersigned
borrower  (the   "BORROWER"),   hereby  certifies  to  WESTDEUTSCHE   LANDESBANK
GIROZENTRALE,  acting  through its New York Branch (the  "LIQUIDITY  PROVIDER"),
with  reference  to the  Revolving  Credit  Agreement  (1998-3A-1)  dated  as of
November  3,  1998,  between  the  Borrower  and  the  Liquidity  Provider  (the
"LIQUIDITY  Agreement";  the terms  defined  therein and not  otherwise  defined
herein being used herein as therein defined or referenced), that:

          (1) The Borrower is the  Subordination  Agent under the  Intercreditor
     Agreement.

          (2) The Borrower is delivering this Notice of Borrowing for the making
     of the Final Advance by the  Liquidity  Provider to be used for the funding
     of the Class A-1 Cash Collateral  Account in accordance with Section 3.6(i)
     of the Intercreditor  Agreement by reason of the receipt by the Borrower of
     a  Termination  Notice  from the  Liquidity  Provider  with  respect to the
     Liquidity Agreement, which Advance is requested to be made on ____________,
     ____.

          (3)  The  amount  of  the  Final  Advance   requested  hereby  (i)  is
     $_________________.__, which equals the Maximum Available Commitment on the
     date hereof and is to be applied in respect of the funding of the Class A-1
     Cash   Collateral   Account  in  accordance  with  Section  3.6(i)  of  the
     Intercreditor  Agreement,  (ii) does not include any amount with respect to
     the payment of principal of, or premium on, the Class A-1 Certificates,  or
     principal  of, or interest or premium on, the Class A-2  Certificates,  the
     Class  B  Certificates,  the  Class  C-1  Certificates  or  the  Class  C-2
     Certificates,  (iii) was computed in accordance  with the provisions of the
     Class A-1 Certificates, the Class A-1 Trust Agreement and the Intercreditor
     Agreement (a copy of which  computation is attached  hereto as Schedule I),
     and (iv) has not been and is not the subject of a prior or  contemporaneous
     Notice of Borrowing.

          (4)  Upon  receipt  by or on  behalf  of the  Borrower  of the  amount
     requested  hereby,  (a) the Borrower  will deposit such amount in the Class
     A-1 Cash Collateral Account and apply the same in accordance with the terms
     of Section 3.6(i) of the  Intercreditor  Agreement,  (b) no portion of such
     amount shall be applied by the  Borrower  for any other  purpose and (c) no
     portion of such  amount  until so applied  shall be  commingled  with other
     funds held by the Borrower.

          (5) The Borrower hereby requests that the Advance  requested hereby be
     a Base Rate Advance  [and that such Base Rate  Advance be converted  into a
     LIBOR  Advance on the third  Business  Day  following  your receipt of this
     notice.]


- ----------

Bracketed language may be included at Borrower's option.



          The  Borrower  hereby  acknowledges  that,  pursuant to the  Liquidity
Agreement,  (A) the making of the Final  Advance as  requested by this Notice of
Borrowing shall  automatically  and irrevocably  terminate the obligation of the
Liquidity Provider to make further Advances under the Liquidity  Agreement;  and
(B)  following  the  making  by the  Liquidity  Provider  of the  Final  Advance
requested by this Notice of  Borrowing,  the  Borrower  shall not be entitled to
request any further Advances under the Liquidity Agreement.

          IN WITNESS  WHEREOF,  the Borrower has  executed  and  delivered  this
Notice of Borrowing as of the ____ day of _________, ____.

                                       WILMINGTON TRUST COMPANY,
                                           not in its individual capacity but
                                           solely as Subordination Agent, as
                                           Borrower



                                       By:_________________________________
                                          Name:
                                          Title:



                SCHEDULE I TO FINAL ADVANCE NOTICE OF BORROWING

                   [Insert Copy of Computations in accordance
                    with Final Advance Notice of Borrowing]



                                                                      Annex V to
                                                      Revolving Credit Agreement





                             NOTICE OF TERMINATION




                                                       [Date]


Wilmington Trust Company,
  as Subordination Agent, as Borrower
Rodney Square North
1100 North Market Square
Wilmington, DE 19890-0001

Attention:  Corporate Trust Administration

Revolving Credit  Agreement  dated as of November  3, 1998,  between  Wilmington
     Trust  Company,  as  Subordination  Agent,  as agent  and  trustee  for the
     Continental Airlines Pass Through Trust, 1998-3A-1-[O/S],  as Borrower, and
     Westdeutsche  Landesbank  Girozentrale,  acting through its New York Branch
     (the "LIQUIDITY AGREEMENT")


Ladies and Gentlemen:

          You are hereby notified that pursuant to Section 6.01 of the Liquidity
Agreement,  by reason of the occurrence of a Liquidity  Event of Default and the
existence of a Performing  Note  Deficiency  (each as defined  therein),  we are
giving this notice to you in order to cause (i) our obligations to make Advances
(as defined  therein) under such  Liquidity  Agreement to terminate on the fifth
Business  Day after the date on which you  receive  this  notice and (ii) you to
request a Final Advance under the Liquidity Agreement pursuant to Section 3.6(i)
of the  Intercreditor  Agreement  (as defined in the  Liquidity  Agreement) as a
consequence of your receipt of this notice.





          THIS  NOTICE IS THE  "NOTICE OF  TERMINATION"  PROVIDED  FOR UNDER THE
LIQUIDITY  AGREEMENT.  OUR  OBLIGATIONS  TO MAKE  ADVANCES  UNDER THE  LIQUIDITY
AGREEMENT  WILL  TERMINATE ON THE FIFTH BUSINESS DAY AFTER THE DATE ON WHICH YOU
RECEIVE THIS NOTICE.

                                       Very truly yours,

                                       WESTDEUTSCHE LANDESBANK
                                       GIROZENTRALE, acting through its New 
                                       York Branch,
                                         as Liquidity Provider


                                       By:___________________________
                                          Name:
                                          Title:


                                       By:___________________________
                                          Name:
                                          Title:

cc:   Wilmington Trust Company,
      as Class A-1 Trustee



                                                                     Annex VI to
                                                      Revolving Credit Agreement

                   NOTICE OF REPLACEMENT SUBORDINATION AGENT


[Date]
Attention:

     Revolving Credit Agreement dated as of November 3, 1998, between Wilmington
     Trust  Company,  as  Subordination  Agent,  as agent  and  trustee  for the
     Continental Airlines Pass Through Trust, 1998-3A-1-[O/S],  as Borrower, and
     Westdeutsche  Landesbank  Girozentrale,  acting through its New York Branch
     (the "LIQUIDITY AGREEMENT")


Ladies and Gentlemen:

          For value received,  the undersigned  beneficiary  hereby  irrevocably
transfers to:

                         ------------------------------
                              [Name of Transferee]


                         ------------------------------
                             [Address of Transferee]

all rights and  obligations  of the  undersigned as Borrower under the Liquidity
Agreement  referred to above.  The transferee  has succeeded the  undersigned as
Subordination  Agent under the Intercreditor  Agreement referred to in the first
paragraph of the  Liquidity  Agreement,  pursuant to the terms of Section 8.1 of
the Intercreditor Agreement.

          By this transfer,  all rights of the undersigned as Borrower under the
Liquidity  Agreement are transferred to the transferee and the transferee  shall
hereafter  have the sole  rights and  obligations  as Borrower  thereunder.  The
undersigned  shall pay any costs and expenses of such transfer,  including,  but
not limited to, transfer taxes or governmental charges.



          We ask that this transfer be effective as of _______________, ____.

                                       WILMINGTON TRUST COMPANY,
                                           not in its individual capacity but
                                           solely as Subordination Agent, as
                                           Borrower



                                       By:_________________________________
                                          Name:
                                          Title:


                                                                       EXECUTION


================================================================================


                          REVOLVING CREDIT AGREEMENT
                                 (1998-3A-2)


                         DATED AS OF NOVEMBER 3, 1998

                                   BETWEEN

                          WILMINGTON TRUST COMPANY,

                           AS SUBORDINATION AGENT,
                         AS AGENT AND TRUSTEE FOR THE
              CONTINENTAL AIRLINES PASS THROUGH TRUST 1998-3A-2

                                 AS BORROWER

                                     AND

                    WESTDEUTSCHE LANDESBANK GIROZENTRALE,
                      ACTING THROUGH ITS NEW YORK BRANCH

                            AS LIQUIDITY PROVIDER


================================================================================


                                 RELATING TO

              CONTINENTAL AIRLINES PASS THROUGH TRUST 1998-3A-2
            6.32% CONTINENTAL AIRLINES PASS THROUGH CERTIFICATES,
                               SERIES 1998-3A-2










                              TABLE OF CONTENTS

                                                                            PAGE
                                                                            ----

ARTICLE I  DEFINITIONS.......................................................  1
   Section 1.01.  Certain Defined Terms .....................................  1

ARTICLE II  AMOUNT AND TERMS OF THE COMMITMENT...............................  7
   Section 2.01.  The Advances ..............................................  7
   Section 2.02.  Making the Advances .......................................  7
   Section 2.03.  Fees ......................................................  9
   Section 2.04.  Reductions or Termination of the Maximum Commitment .......  9
   Section 2.05.  Repayments of Interest Advances or the Final Advance ...... 10
   Section 2.06.  Repayments of Provider Advances ........................... 10
   Section 2.07.  Payments to the Liquidity Provider Under the
                  Intercreditor Agreement ................................... 11
   Section 2.08.  Book Entries .............................................. 11
   Section 2.09.  Payments from Available Funds Only ........................ 11
   Section 2.10.  Extension of the Expiry Date; Non-Extension Advance ....... 12

ARTICLE III  OBLIGATIONS OF THE BORROWER..................................... 12
   Section 3.01.  Increased Costs ........................................... 12
   Section 3.02.  Capital Adequacy .......................................... 13
   Section 3.03.  Payments Free of Deductions ............................... 14
   Section 3.04.  Payments .................................................. 14
   Section 3.05.  Computations .............................................. 15
   Section 3.06.  Payment on Non-Business Days .............................. 15
   Section 3.07.  Interest .................................................. 15
   Section 3.08.  Replacement of Borrower ................................... 16
   Section 3.09.  Funding Loss Indemnification .............................. 17
   Section 3.10.  Illegality ................................................ 17

ARTICLE IV  CONDITIONS PRECEDENT............................................. 17
   Section 4.01.  Conditions Precedent to Effectiveness of Section 2.01...... 17
   Section 4.02.  Conditions Precedent to Borrowing ......................... 19

ARTICLE V  COVENANTS......................................................... 19
   Section 5.01.  Affirmative Covenants of the Borrower ..................... 19
   Section 5.02.  Negative Covenants of the Borrower ........................ 20

ARTICLE VI  LIQUIDITY EVENTS OF DEFAULT...................................... 20
   Section 6.01.  Liquidity Events of Default ............................... 20

ARTICLE VII  MISCELLANEOUS................................................... 20
   Section 7.01.  Amendments, Etc ........................................... 20
   Section 7.02.  Notices, Etc............................................... 20
   Section 7.03.  No Waiver; Remedies ....................................... 21
   Section 7.04.  Further Assurances ........................................ 21



                                                                            PAGE
                                                                            ----

   Section 7.05.  Indemnification; Survival of Certain Provisions ........... 22
   Section 7.06.  Liability of the Liquidity Provider ....................... 22
   Section 7.07.  Costs, Expenses and Taxes ................................. 23
   Section 7.08.  Binding Effect; Participations ............................ 23
   Section 7.09.  Severability .............................................. 24
   Section 7.10.  Governing Law ............................................. 25
   Section 7.11.  Submission to Jurisdiction; Waiver of Jury Trial;
                  Waiver of Immunity ........................................ 25
   Section 7.12.  Execution in Counterparts ................................. 26
   Section 7.13.  Entirety .................................................. 26
   Section 7.14.  Headings .................................................. 26
   Section 7.15.  Transfer .................................................. 26
   Section 7.16.  Liquidity Provider's Obligation To Make Advances .......... 26



ANNEX I     Interest Advance Notice of Borrowing

ANNEX II    Non-Extension Advance Notice of Borrowing

ANNEX III   Downgrade Advance Notice of Borrowing

ANNEX IV    Final Advance Notice of Borrowing

ANNEX V     Notice of Termination

ANNEX VI    Notice of Replacement Subordination Agent










                          REVOLVING CREDIT AGREEMENT

This REVOLVING CREDIT AGREEMENT dated as of November 3, 1998, between WILMINGTON
TRUST COMPANY, a Delaware corporation, not in its individual capacity but solely
as  Subordination  Agent  under the  Intercreditor  Agreement  (each as  defined
below),  as agent and trustee  for the Class A-2 Trust (as  defined  below) (the
"BORROWER"),  and WESTDEUTSCHE LANDESBANK  GIROZENTRALE,  a bank organized under
the laws of the State of North Rhine-Westphalia, Germany, acting through its New
York branch (the "LIQUIDITY PROVIDER").

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

          WHEREAS,  pursuant to the Class A-2 Trust Agreement (such term and all
other  capitalized terms used in these recitals having the meanings set forth or
referred  to in  Section  1.01),  the Class A-2 Trust is  issuing  the Class A-2
Certificates; and

          WHEREAS,  the  Borrower,  in order to support the timely  payment of a
portion of the interest on the Class A-2  Certificates  in accordance with their
terms,  has  requested  the  Liquidity  Provider  to enter into this  Agreement,
providing in part for the Borrower to request in  specified  circumstances  that
Advances be made hereunder.

          NOW, THEREFORE,  in consideration of the premises,  the parties hereto
agree as follows:


                                  ARTICLE I

                                 DEFINITIONS

          Section 1.01. CERTAIN DEFINED TERMS. (a) Definitions.  As used in this
Agreement  and unless  otherwise  expressly  indicated,  or unless  the  context
clearly  requires  otherwise,  the  following  capitalized  terms shall have the
following respective meanings for all purposes of this Agreement:

          "ADDITIONAL  COST" has the  meaning  assigned  to such term in Section
     3.01.

          "ADVANCE"  means an  Interest  Advance,  a Final  Advance,  a Provider
     Advance,  an Applied Provider Advance or an Unpaid Advance, as the case may
     be.

          "APPLICABLE  LIQUIDITY RATE" has the meaning  assigned to such term in
     Section 3.07(g).

          "APPLICABLE  MARGIN"  means (x) with respect to any Unpaid  Advance or
     Applied  Provider  Advance,  1.75% per  annum,  or (y) with  respect to any
     Unapplied Provider Advance,  the rate per annum specified in the Fee Letter
     applicable to this Agreement.





          "APPLIED  DOWNGRADE  ADVANCE" has the meaning assigned to such term in
     Section 2.06(a).

          "APPLIED  NON-EXTENSION ADVANCE" has the meaning assigned to such term
     in Section 2.06(a).

          "APPLIED  PROVIDER  ADVANCE" has the meaning  assigned to such term in
     Section 2.06(a).

          "ASSIGNMENT  AND  ASSUMPTION   AGREEMENT"  means  the  Assignment  and
     Assumption  to be entered  into between the Borrower and the trustee of the
     Successor  Trust,  substantially  in the  form of  Exhibit  C to the  Trust
     Supplement No.  1998-3A-2-O,  dated as of the date hereof,  relating to the
     Class A-2 Trust.

          "BASE RATE" means a fluctuating interest rate per annum in effect from
     time to time,  which rate per annum  shall at all times be equal to (a) the
     weighted average of the rates on overnight Federal funds  transactions with
     members of the Federal Reserve System arranged by Federal funds brokers, as
     published for such day (or, if such day is not a Business Day, for the next
     preceding Business Day) by the Federal Reserve Bank of New York, or if such
     rate is not so published for any day that is a Business Day, the average of
     the quotations for such day for such transactions received by the Liquidity
     Provider from three Federal funds brokers of recognized  standing  selected
     by it, plus (b) one-quarter of one percent (1/4 of 1%).

          "BASE RATE  ADVANCE"  means an Advance  that bears  interest at a rate
     based upon the Base Rate.

          "BORROWER"  has the  meaning  assigned  to such term in the recital of
     parties to this Agreement.

          "BORROWING"  means the making of Advances  requested  by delivery of a
     Notice of Borrowing.

          "BUSINESS  DAY" means any day other than a Saturday or Sunday or a day
     on which  commercial  banks are required or authorized to close in Houston,
     Texas,  New York,  New York or, so long as any  Class  A-2  Certificate  is
     outstanding,  the  city and  state in which  the  Class  A-2  Trustee,  the
     Borrower  or any Loan  Trustee  maintains  its  Corporate  Trust  Office or
     receives or disburses funds, and, if the applicable Business Day relates to
     any Advance or other amount  bearing  interest  based on the LIBOR Rate, on
     which dealings are carried on in the London interbank market.

          "DEPOSITS"  has the  meaning  assigned  to such  terms in the  Deposit
     Agreement.

          "DEPOSITARY"  has the  meaning  assigned  to such term in the  Deposit
     Agreement.





          "DEPOSIT AGREEMENT" means the Deposit Agreement dated November 3, 1998
     between First  Security  Bank,  National  Association,  as Escrow Agent and
     Credit Suisse First Boston,  New York Branch, as Depositary,  pertaining to
     the  Class  A-2  Certificates,  as the same  may be  amended,  modified  or
     supplemented from time to time in accordance with the terms thereof.

          "DOWNGRADE ADVANCE" means an Advance made pursuant to Section 2.02(c).

          "EFFECTIVE  DATE" has the  meaning  specified  in  Section  4.01.  The
     delivery of the  certificate  of the  Liquidity  Provider  contemplated  by
     Section  4.01(e) shall be conclusive  evidence that the Effective  Date has
     occurred.

          "EXCLUDED  TAXES" means (i) taxes imposed on the overall net income of
     the Liquidity  Provider or of its Lending Office by the jurisdiction  where
     such  Liquidity  Provider's  principal  office  or such  Lending  Office is
     located, and (ii) Excluded Withholding Taxes.

          "EXCLUDED  WITHHOLDING  TAXES" means (i) withholding  Taxes imposed by
     the United States except to the extent that such United States  withholding
     Taxes are imposed as a result of any change in  applicable  law  (excluding
     from change in  applicable  law for this purpose a change in an  applicable
     treaty or other  change in law  affecting  the  applicability  of a treaty)
     after the date  hereof,  or in the case of a successor  Liquidity  Provider
     (including a transferee of an Advance) or Lending Office, after the date on
     which such successor  Liquidity  Provider  obtains its interest or on which
     the Lending Office is changed,  and (ii) any  withholding  Taxes imposed by
     the  United  States  which  are  imposed  or  increased  as a result of the
     Liquidity  Provider  failing to deliver to the Borrower any  certificate or
     document  (which  certificate or document in the good faith judgment of the
     Liquidity  Provider it is legally  entitled to provide) which is reasonably
     requested by the Borrower to establish  that payments  under this Agreement
     are exempt from (or entitled to a reduced rate of) withholding Tax.

          "EXPENSES"  means  liabilities,   obligations,  damages,  settlements,
     penalties,  claims,  actions,  suits,  costs,  expenses,  and disbursements
     (including, without limitation,  reasonable fees and disbursements of legal
     counsel  and costs of  investigation),  provided  that  Expenses  shall not
     include any Taxes.

          "EXPIRY DATE" means November 1, 1999, initially,  or any date to which
     the Expiry Date is extended pursuant to Section 2.10.

          "FINAL ADVANCE" means an Advance made pursuant to Section 2.02(d).

          "INTERCREDITOR  AGREEMENT" means the Intercreditor Agreement dated the
     date hereof,  among the  Trustees,  the Liquidity  Provider,  the liquidity
     provider under each Liquidity  Facility (other than this Agreement) and the
     Subordination Agent, as the same may be amended,  supplemented or otherwise
     modified from time to time in accordance with its terms.





          "INTEREST ADVANCE" means an Advance made pursuant to Section 2.02(a).

          "INTEREST  PERIOD" means,  with respect to any LIBOR Advance,  each of
     the following periods:

          (i)  the period  beginning on the third Business Day following  either
               (x) the Liquidity  Provider's  receipt of the Notice of Borrowing
               for such LIBOR  Advance or (y) the  withdrawal  of funds from the
               Class  A-2 Cash  Collateral  Account  for the  purpose  of paying
               interest on the Class A-2 Certificates as contemplated by Section
               2.06(a)  hereof and, in either  case,  ending on the next Regular
               Distribution Date; and

          (ii) each  subsequent  period  commencing  on  the  last  day  of  the
               immediately  preceding  Interest  Period  and  ending on the next
               Regular Distribution Date;

     PROVIDED,  HOWEVER,  that if (x) the Final Advance shall have been made, or
     (y) other  outstanding  Advances  shall have been  converted into the Final
     Advance, then the Interest Periods shall be successive periods of one month
     beginning on the third  Business Day  following  the  Liquidity  Provider's
     receipt of the Notice of Borrowing  for such Final  Advance (in the case of
     clause  (x)  above)  or  the  Regular   Distribution  Date  following  such
     conversion (in the case of clause (y) above).

          "LENDING  OFFICE" means the lending  office of the Liquidity  Provider
     presently  located at New York,  New York, or such other lending  office as
     the  Liquidity  Provider from time to time shall notify the Borrower as its
     lending office  hereunder;  PROVIDED that the Liquidity  Provider shall not
     change its Lending  Office to a Lending Office outside the United States of
     America except in accordance with Section 3.01, 3.02 or 3.03 hereof.

          "LIBOR ADVANCE" means an Advance bearing interest at a rate based upon
     the LIBOR Rate.

          "LIBOR RATE" means, with respect to any Interest Period,

          (i)  the rate per  annum  appearing  on  display  page  3750  (British
               Bankers  Association-LIBOR)  of the Dow Jones Markets Service (or
               any successor or substitute therefor) at approximately 11:00 A.M.
               (London  time) two  Business  Days  before  the first day of such
               Interest Period,  as the rate for dollar deposits with a maturity
               comparable to such Interest Period, or

          (ii) if the  rate  calculated  pursuant  to  clause  (i)  above is not
               available,  the average (rounded  upwards,  if necessary,  to the
               next  1/16 of 1%) of the rates  per  annum at which  deposits  in
               dollars  are offered for the  relevant  Interest  Period by three
               banks of recognized  standing selected by the Liquidity  Provider
               in the  London  interbank  market  at  approximately  11:00  A.M.
               (London  time) two  Business  Days  before  the first day of such



               Interest Period in an amount approximately equal to the principal
               amount of the LIBOR Advance to which such  Interest  Period is to
               apply and for a period comparable to such Interest Period.

          "LIQUIDITY  EVENT OF DEFAULT"  means the  occurrence of either (a) the
     Acceleration  of all of the Equipment Notes (provided that, with respect to
     the period prior to the Delivery  Period Expiry Date,  such Equipment Notes
     have an aggregate  outstanding principal balance in excess of $300,000,000)
     or (b) a Continental Bankruptcy Event.

          "LIQUIDITY  INDEMNITEE"  means (i) the  Liquidity  Provider,  (ii) the
     directors,  officers,  employees and agents of the Liquidity Provider,  and
     (iii) the  successors  and  permitted  assigns of the persons  described in
     clauses (i) and (ii), inclusive.

          "LIQUIDITY  PROVIDER"  has the  meaning  assigned  to such term in the
     recital of parties to this Agreement.

          "MAXIMUM  AVAILABLE  COMMITMENT"  shall  mean,  subject to the proviso
     contained  in the  third  sentence  of  Section  2.02(a),  at any  time  of
     determination,  (a) the  Maximum  Commitment  at  such  time  LESS  (b) the
     aggregate  amount  of each  Interest  Advance  outstanding  at  such  time;
     PROVIDED that following a Provider Advance or a Final Advance,  the Maximum
     Available Commitment shall be zero.

          "MAXIMUM  COMMITMENT"  means initially  $18,883,212 as the same may be
     reduced from time to time in accordance with Section 2.04(a).

          "NON-EXTENSION  ADVANCE"  means an Advance  made  pursuant  to Section
     2.02(b).

          "NOTICE OF BORROWING" has the meaning specified in Section 2.02(e).

          "NOTICE OF REPLACEMENT  SUBORDINATION AGENT" has the meaning specified
     in Section 3.08.

          "PERFORMING NOTE DEFICIENCY"  means any time that less than 65% of the
     then  aggregate  outstanding  principal  amount of all Equipment  Notes are
     Performing Equipment Notes.

          "PROSPECTUS  SUPPLEMENT" means the Prospectus Supplement dated October
     21, 1998 relating to the Certificates, as such Prospectus Supplement may be
     amended or supplemented.

          "PROVIDER  ADVANCE"  means  a  Downgrade  Advance  or a  Non-Extension
     Advance.

          "REGULATORY  CHANGE" has the meaning  assigned to such term in Section
     3.01.

          "REPLENISHMENT  AMOUNT"  has the  meaning  assigned  to  such  term in
     Section 2.06(b).





          "REQUIRED  AMOUNT" means, for any day, the sum of the aggregate amount
     of interest,  calculated at the rate per annum equal to the Stated Interest
     Rate for the Class A-2 Certificates, that would be payable on the Class A-2
     Certificates   on  each  of  the  three   successive   semiannual   Regular
     Distribution  Dates  immediately  following  such day or,  if such day is a
     Regular  Distribution  Date, on such day and the  succeeding two semiannual
     Regular  Distribution  Dates,  in each case  calculated on the basis of the
     Pool Balance of the Class A-2  Certificates  on such day and without regard
     to expected future payments of principal on the Class A-2 Certificates.

          "SUCCESSOR  TRUST"  means  Continental  Airlines  Pass  Through  Trust
     1998-3A-2-S.

          "TAX  LETTER"  means the  letter  dated the date  hereof  between  the
     Liquidity Provider and Continental pertaining to this Agreement.

          "TERMINATION  DATE" means the earliest to occur of the following:  (i)
     the  Expiry  Date;  (ii) the date on which  the  Borrower  delivers  to the
     Liquidity  Provider a certificate,  signed by a Responsible  Officer of the
     Borrower,  certifying that all of the Class A-2 Certificates have been paid
     in full (or provision has been made for such payment in accordance with the
     Intercreditor  Agreement  and the Trust  Agreements)  or are  otherwise  no
     longer entitled to the benefits of this Agreement;  (iii) the date on which
     the Borrower delivers to the Liquidity Provider a certificate,  signed by a
     Responsible  Officer  of  the  Borrower,   certifying  that  a  Replacement
     Liquidity Facility has been substituted for this Agreement in full pursuant
     to Section 3.6(e) of the Intercreditor  Agreement;  (iv) the fifth Business
     Day following the receipt by the Borrower of a Termination  Notice from the
     Liquidity  Provider  pursuant to Section 6.01  hereof;  and (v) the date on
     which no Advance is or may (including by reason of  reinstatement as herein
     provided) become available for a Borrowing hereunder.

          "TERMINATION NOTICE" means the Notice of Termination  substantially in
     the form of Annex V to this Agreement.

          "TRANSFEREE" has the meaning assigned to such term in Section 7.08(b).

          "UNAPPLIED  DOWNGRADE  ADVANCE" means any Downgrade Advance other than
     an Applied Downgrade Advance.

          "UNAPPLIED  NON-EXTENSION  ADVANCE"  means any  Non-Extension  Advance
     other than an Applied Non-Extension Advance.

          "UNAPPLIED  PROVIDER ADVANCE" means any Provider Advance other than an
     Applied Provider Advance.

          "UNPAID  ADVANCE"  has the  meaning  assigned  to such term in Section
     2.05.




          (b) TERMS DEFINED IN THE INTERCREDITOR  AGREEMENT. For all purposes of
this Agreement,  the following terms shall have the respective meanings assigned
to such terms in the Intercreditor Agreement:

     "ACCELERATION",  "CERTIFICATES",  "CLASS A-1 CERTIFICATES", "CLASS A-2 CASH
     COLLATERAL   ACCOUNT",   "CLASS   A-2   CERTIFICATEHOLDERS",   "CLASS   A-2
     CERTIFICATES",  "CLASS A-2 TRUST", "CLASS A-2 TRUST AGREEMENT",  "CLASS A-2
     TRUSTEE",  "CLASS B  CERTIFICATES",  "CLASS C-1  CERTIFICATES",  "CLASS C-2
     CERTIFICATES",  "CLOSING  DATE",  "CONTINENTAL",   "CONTINENTAL  BANKRUPTCY
     EVENT",  "CONTROLLING  PARTY",  "CORPORATE TRUST OFFICE",  "DELIVERY PERIOD
     EXPIRY  DATE",  "DISTRIBUTION  DATE",  "DOWNGRADED  Facility",   "EQUIPMENT
     NOTES",  "FEE  LETTER",   "FINAL  LEGAL  DISTRIBUTION   DATE",   "FINANCING
     AGREEMENT",  "INDENTURE",  "INTEREST PAYMENT DATE",  "INVESTMENT EARNINGS",
     "LEASED AIRCRAFT",  "LIQUIDITY FACILITY",  "LIQUIDITY  OBLIGATIONS",  "LOAN
     TRUSTEE",  "MOODY'S",  "NON-EXTENDED FACILITY",  "NOTE PURCHASE AGREEMENT",
     "OPERATIVE  AGREEMENTS",   "OWNED  AIRCRAFT",   "PARTICIPATION  AGREEMENT",
     "PERFORMING  EQUIPMENT NOTE",  "PERSON",  "POOL BALANCE",  "RATING AGENCY",
     "RATINGS CONFIRMATION", "REGULAR DISTRIBUTION DATE", "REPLACEMENT LIQUIDITY
     FACILITY",  "RESPONSIBLE OFFICER",  "SCHEDULED PAYMENT", "SPECIAL PAYMENT",
     "STANDARD  &  POOR'S",  "STATED  INTEREST  RATE",   "SUBORDINATION  AGENT",
     "TAXES",  "THRESHOLD RATING",  "TRANSFER",  "TRUST AGREEMENTS",  "TRUSTEE",
     "UNDERWRITERS", "UNDERWRITING AGREEMENT", and "WRITTEN NOTICE".


                                  ARTICLE II

                      AMOUNT AND TERMS OF THE COMMITMENT

          Section 2.01. THE ADVANCES.  The Liquidity Provider hereby irrevocably
agrees,  on the terms and conditions  hereinafter set forth, to make Advances to
the  Borrower  from time to time on any  Business Day during the period from the
Effective  Date until 12:00 Noon (New York City time) on the Expiry Date (unless
the  obligations  of the  Liquidity  Provider  shall be  earlier  terminated  in
accordance with the terms of Section 2.04(b)) in an aggregate amount at any time
outstanding not to exceed the Maximum Commitment.

          Section 2.02. MAKING THE ADVANCES. (a) Interest Advances shall be made
in one or more  Borrowings by delivery to the Liquidity  Provider of one or more
written and completed  Notices of Borrowing in substantially the form of Annex I
attached hereto,  signed by a Responsible Officer of the Borrower,  in an amount
not  exceeding the Maximum  Available  Commitment at such time and shall be used
solely for the payment when due of interest on the Class A-2 Certificates at the
Stated  Interest  Rate  therefor  in  accordance  with  Section  3.6(a)  of  the
Intercreditor   Agreement.   Each   Interest   Advance  made   hereunder   shall
automatically  reduce the Maximum Available  Commitment and the amount available
to be borrowed  hereunder by subsequent  Advances by the amount of such Interest
Advance  (subject  to  reinstatement  as provided  in the next  sentence).  Upon
repayment  to the  Liquidity  Provider  in full of the  amount  of any  Interest
Advance made pursuant to this Section  2.02(a),  together with accrued  interest
thereon  (as  provided  herein),  the  Maximum  Available  Commitment  shall  be
reinstated by the amount of such repaid Interest Advance, but not to exceed the




Maximum Commitment;  PROVIDED,  HOWEVER,  that the Maximum Available  Commitment
shall not be so reinstated at any time if (i) a Liquidity Event of Default shall
have occurred and be continuing and (ii) there is a Performing Note Deficiency.

          (b) A  Non-Extension  Advance  shall be made in a single  Borrowing if
this  Agreement  is not  extended  in  accordance  with  Section  3.6(d)  of the
Intercreditor Agreement (unless a Replacement Liquidity Facility to replace this
Agreement  shall have been  delivered  to the Borrower as  contemplated  by said
Section 3.6(d) within the time period  specified in such Section) by delivery to
the  Liquidity  Provider  of a written  and  completed  Notice of  Borrowing  in
substantially  the form of Annex II  attached  hereto,  signed by a  Responsible
Officer of the Borrower,  in an amount equal to the Maximum Available Commitment
at such time, and shall be used to fund the Class A-2 Cash Collateral Account in
accordance  with said  Section  3.6(d) and Section  3.6(f) of the  Intercreditor
Agreement.

          (c) A Downgrade  Advance  shall be made in a single  Borrowing  upon a
downgrading of the Liquidity Provider's  short-term unsecured debt rating issued
by either Rating Agency below the applicable  Threshold  Rating (as provided for
in Section 3.6(c) of the Intercreditor Agreement) unless a Replacement Liquidity
Facility to replace this Agreement shall have been  previously  delivered to the
Borrower in accordance  with said Section  3.6(c),  by delivery to the Liquidity
Provider of a written and  completed  Notice of Borrowing in  substantially  the
form of Annex III  attached  hereto,  signed  by a  Responsible  Officer  of the
Borrower,  in an amount equal to the Maximum Available  Commitment at such time,
and shall be used to fund the Class A-2 Cash  Collateral  Account in  accordance
with said Section 3.6(c) and Section 3.6(f) of the Intercreditor Agreement.

          (d) A Final  Advance  shall  be made in a  single  Borrowing  upon the
receipt by the  Borrower of a  Termination  Notice from the  Liquidity  Provider
pursuant  to Section  6.01 hereof by  delivery  to the  Liquidity  Provider of a
written and completed Notice of Borrowing in substantially  the form of Annex IV
attached hereto,  signed by a Responsible Officer of the Borrower,  in an amount
equal to the Maximum  Available  Commitment  at such time,  and shall be used to
fund the Class A-2 Cash Collateral Account (in accordance with Section 3.6(i) of
the Intercreditor Agreement) and Section 3.6(f) of the Intercreditor Agreement.

          (e) Each  Borrowing  shall be made on notice in  writing (a "NOTICE OF
BORROWING")  in  substantially  the form required by Section  2.02(a),  2.02(b),
2.02(c) or 2.02(d),  as the case may be, given by the Borrower to the  Liquidity
Provider.  If a Notice of  Borrowing  is delivered by the Borrower in respect of
any  Borrowing no later than 1:00 p.m.  (New York City time) on a Business  Day,
upon  satisfaction  of the  conditions  precedent set forth in Section 4.02 with
respect to a requested Borrowing, the Liquidity Provider shall make available to
the Borrower,  in accordance with its payment  instructions,  the amount of such
Borrowing in U.S. dollars and immediately available funds, before 4:00 p.m. (New
York City time) on such Business Day or on such later  Business Day specified in
such Notice of Borrowing.  If a Notice of Borrowing is delivered by the Borrower
in respect of any  Borrowing  after 1:00 p.m. (New York City time) on a Business
Day, upon  satisfaction  of the  conditions  precedent set forth in Section 4.02
with  respect  to a  requested  Borrowing,  the  Liquidity  Provider  shall make



available to the Borrower,  in  accordance  with its payment  instructions,  the
amount of such  Borrowing in U.S.  dollars and in immediately  available  funds,
before 12:00 Noon (New York City time) on the first  Business Day next following
the day of receipt of such Notice of  Borrowing  or on such later  Business  Day
specified by the Borrower in such Notice of Borrowing. Payments of proceeds of a
Borrowing  shall be made by wire transfer of immediately  available funds to the
Borrower in  accordance  with such wire  transfer  instructions  as the Borrower
shall furnish from time to time to the Liquidity Provider for such purpose. Each
Notice of Borrowing shall be irrevocable and binding on the Borrower.

          (f) Upon the making of any Advance  requested  pursuant to a Notice of
Borrowing, in accordance with the Borrower's payment instructions, the Liquidity
Provider shall be fully  discharged of its obligation  hereunder with respect to
such Notice of Borrowing,  and the Liquidity  Provider  shall not  thereafter be
obligated  to make any further  Advances  hereunder in respect of such Notice of
Borrowing to the Borrower or to any other Person. Notwithstanding the provisions
of  Section  2.02(e),  if the  Liquidity  Provider  makes an  Advance  requested
pursuant to a Notice of Borrowing  before 12:00 noon (New York City time) on the
second Business Day after the date of payment specified in said Section 2.02(e),
the Liquidity  Provider shall have fully  discharged its  obligations  hereunder
with  respect to such Advance and shall not be in default  hereunder.  Following
the making of any Advance pursuant to Section 2.02(b), (c) or (d) hereof to fund
the Class A-2 Cash  Collateral  Account,  the Liquidity  Provider  shall have no
interest in or rights to the Class A-2 Cash Collateral Account,  such Advance or
any other amounts from time to time on deposit in the Class A-2 Cash  Collateral
Account;  PROVIDED that the foregoing shall not affect or impair the obligations
of the  Subordination  Agent to make the  distributions  contemplated by Section
3.6(e) or (f) of the Intercreditor Agreement. By paying to the Borrower proceeds
of Advances  requested by the Borrower in accordance with the provisions of this
Agreement,  the Liquidity Provider makes no representation as to, and assumes no
responsibility for, the correctness or sufficiency for any purpose of the amount
of the Advances so made and requested.

          Section  2.03.  FEES.  The  Borrower  agrees  to pay to the  Liquidity
Provider the fees set forth in the Fee Letter applicable to this Agreement.

          Section 2.04. REDUCTIONS OR TERMINATION OF THE MAXIMUM Commitment.

          (a) AUTOMATIC  REDUCTION.  Promptly  following  each date on which the
Required Amount is reduced as a result of a reduction in the Pool Balance of the
Class A-2 Certificates or otherwise,  the Maximum Commitment shall automatically
be reduced to an amount equal to such reduced  Required Amount (as calculated by
the Borrower). The Borrower shall give notice of any such automatic reduction of
the Maximum  Commitment  to the  Liquidity  Provider  within two  Business  Days
thereof. The failure by the Borrower to furnish any such notice shall not affect
such automatic reduction of the Maximum Commitment.

          (b)  TERMINATION.  Upon the  making of any  Provider  Advance or Final
Advance  hereunder or the occurrence of the Termination  Date, the obligation of



the Liquidity  Provider to make further Advances  hereunder shall  automatically
and irrevocably terminate, and the Borrower shall not be entitled to request any
further Borrowing hereunder.

          Section 2.05.  REPAYMENTS OF INTEREST  ADVANCES OR THE FINAL  ADVANCE.
Subject to Sections  2.06,  2.07 and 2.09 hereof,  the Borrower  hereby  agrees,
without notice of an Advance or demand for repayment from the Liquidity Provider
(which notice and demand are hereby waived by the Borrower), to pay, or to cause
to be paid,  to the  Liquidity  Provider  on each  date on which  the  Liquidity
Provider shall make an Interest Advance or the Final Advance, an amount equal to
(a) the amount of such Advance (any such Advance,  until repaid,  is referred to
herein as an "UNPAID  ADVANCE"),  plus (b)  interest  on the amount of each such
Unpaid  Advance as provided in Section  3.07  hereof;  PROVIDED  that if (i) the
Liquidity Provider shall make a Provider Advance at any time after making one or
more Interest  Advances which shall not have been repaid in accordance with this
Section 2.05 or (ii) this Liquidity Facility shall become a Downgraded  Facility
or Non-Extended  Facility at any time when  unreimbursed  Interest Advances have
reduced the Maximum  Available  Commitment to zero, then such Interest  Advances
shall  cease to  constitute  Unpaid  Advances  and  shall be deemed to have been
changed into an Applied Downgrade Advance or an Applied  Non-Extension  Advance,
as the case may be,  for all  purposes  of this  Agreement  (including,  without
limitation,  for the  purpose  of  determining  when such  Interest  Advance  is
required to be repaid to the Liquidity  Provider in accordance with Section 2.06
and for the  purposes  of  Section  2.06(b)).  The  Borrower  and the  Liquidity
Provider  agree that the  repayment in full of each  Interest  Advance and Final
Advance on the date such  Advance is made is  intended  to be a  contemporaneous
exchange for new value given to the Borrower by the Liquidity Provider.

          Section 2.06.  REPAYMENTS OF PROVIDER  ADVANCES.  (a) Amounts advanced
hereunder in respect of a Provider  Advance  shall be deposited in the Class A-2
Cash  Collateral  Account,  invested  and  withdrawn  from  the  Class  A-2 Cash
Collateral  Account  as  set  forth  in  Sections  3.6(c),  (d)  and  (f) of the
Intercreditor  Agreement.  The Borrower agrees to pay to the Liquidity Provider,
on each Regular Distribution Date,  commencing on the first Regular Distribution
Date after the making of a Provider Advance, interest on the principal amount of
any such Provider Advance as provided in Section 3.07; PROVIDED,  HOWEVER,  that
amounts  in  respect of a  Provider  Advance  withdrawn  from the Class A-2 Cash
Collateral  Account  for  the  purpose  of  paying  interest  on the  Class  A-2
Certificates  in accordance with Section 3.6(f) of the  Intercreditor  Agreement
(the amount of any such withdrawal being (y) in the case of a Downgrade Advance,
an "APPLIED DOWNGRADE  ADVANCE" and (z) in the case of a Non-Extension  Advance,
an "APPLIED  NON-EXTENSION  ADVANCE"  and,  together  with an Applied  Downgrade
Advance,  an "APPLIED  PROVIDER  ADVANCE") shall thereafter  (subject to Section
2.06(b)) be treated as an Interest  Advance under this Agreement for purposes of
determining the Applicable Liquidity Rate for interest payable thereon; PROVIDED
FURTHER,  HOWEVER,  that if,  following  the making of a Provider  Advance,  the
Liquidity  Provider  delivers a Termination  Notice to the Borrower  pursuant to
Section 6.01 hereof,  such  Provider  Advance  shall  thereafter be treated as a
Final Advance under this  Agreement for purposes of  determining  the Applicable
Liquidity Rate for interest payable  thereon.  Subject to Sections 2.07 and 2.09
hereof,  immediately  upon the withdrawal of any amounts from the Class A-2 Cash
Collateral  Account  on account  of a  reduction  in the  Required  Amount,  the
Borrower  shall  repay to the  Liquidity  Provider  a  portion  of the  Provider



Advances in a principal  amount equal to such  reduction,  plus  interest on the
principal amount prepaid as provided in Section 3.07 hereof.

          (b) At any time  when an  Applied  Provider  Advance  (or any  portion
thereof)  is  outstanding,  upon the  deposit  in the Class A-2 Cash  Collateral
Account  of any amount  pursuant  to clause  "THIRD"  of  Section  2.4(b) of the
Intercreditor  Agreement,  clause  "THIRD" of Section  3.2 of the  Intercreditor
Agreement or clause "FOURTH" of Section 3.3 of the Intercreditor  Agreement (any
such amount being a  "REPLENISHMENT  AMOUNT") for the purpose of replenishing or
increasing the balance  thereof up to the Required  Amount at such time, (i) the
aggregate  outstanding principal amount of all Applied Provider Advances (and of
Provider Advances treated as an Interest Advance for purposes of determining the
Applicable  Liquidity Rate for interest  payable thereon) shall be automatically
reduced  by the  amount  of such  Replenishment  Amount  and (ii) the  aggregate
outstanding  principal  amount  of all  Unapplied  Provider  Advances  shall  be
automatically increased by the amount of such Replenishment Amount.

          (c)  Upon  the  provision  of  a  Replacement  Liquidity  Facility  in
replacement  of  this  Agreement  in  accordance  with  Section  3.6(e)  of  the
Intercreditor  Agreement,  amounts  remaining  on  deposit in the Class A-2 Cash
Collateral  Account after giving effect to any Applied  Provider  Advance on the
date of such replacement shall be reimbursed to the Liquidity Provider, but only
to the extent  such  amounts  are  necessary  to repay in full to the  Liquidity
Provider all amounts owing to it hereunder.

          Section   2.07.   PAYMENTS  TO  THE  LIQUIDITY   PROVIDER   UNDER  THE
INTERCREDITOR  AGREEMENT.  In order to provide for payment or  repayment  to the
Liquidity  Provider  of  any  amounts  hereunder,  the  Intercreditor  Agreement
provides  that amounts  available  and referred to in Articles II and III of the
Intercreditor  Agreement,  to  the  extent  payable  to the  Liquidity  Provider
pursuant  to  the  terms  of the  Intercreditor  Agreement  (including,  without
limitation, Section 3.6(f) of the Intercreditor Agreement), shall be paid to the
Liquidity Provider in accordance with the terms thereof.  Amounts so paid to the
Liquidity  Provider  shall be applied by the  Liquidity  Provider  to  Liquidity
Obligations then due and payable in accordance with the Intercreditor  Agreement
or, if not provided for in the Intercreditor  Agreement,  then in such manner as
the Liquidity Provider shall deem appropriate.

          Section 2.08. BOOK ENTRIES.  The Liquidity  Provider shall maintain in
accordance  with its usual  practice  an  account  or  accounts  evidencing  the
indebtedness of the Borrower  resulting from Advances made from time to time and
the amounts of principal  and interest  payable  hereunder and paid from time to
time in respect thereof;  PROVIDED,  HOWEVER,  that the failure by the Liquidity
Provider to maintain such account or accounts  shall not affect the  obligations
of the Borrower in respect of Advances.

          Section 2.09.  PAYMENTS FROM AVAILABLE  FUNDS ONLY. All payments to be
made by the Borrower  under this  Agreement  shall be made only from the amounts
that constitute  Scheduled Payments,  Special Payments or payments under Section
8.1 of the  Participation  Agreements with respect to Owned  Aircraft,  payments
under  Section  9.1 of the  Participation  Agreements  with  respect  to  Leased
Aircraft  and Section 6 of the Note  Purchase  Agreement  and only to the extent



that the Borrower shall have sufficient  income or proceeds  therefrom to enable
the Borrower to make payments in  accordance  with the terms hereof after giving
effect to the  priority of payments  provisions  set forth in the  Intercreditor
Agreement.  The  Liquidity  Provider  agrees  that it will  look  solely to such
amounts  to the extent  available  for  distribution  to it as  provided  in the
Intercreditor  Agreement  and  this  Agreement  and that  the  Borrower,  in its
individual  capacity,  is not personally liable to it for any amounts payable or
liability under this Agreement  except as expressly  provided in this Agreement,
the Intercreditor Agreement or any Participation  Agreement.  Amounts on deposit
in the Class A-2 Cash  Collateral  Account shall be available to the Borrower to
make  payments  under this  Agreement  only to the  extent and for the  purposes
expressly contemplated in Section 3.6(f) of the Intercreditor Agreement.

          Section 2.10. EXTENSION OF THE EXPIRY DATE;  NON-EXTENSION Advance. No
earlier  than  the 60th  day and no  later  than the 40th day  prior to the then
effective  Expiry Date  (unless such Expiry Date is on or after the date that is
15 days after the Final Legal Distribution Date for the Class A-2 Certificates),
the Borrower  shall request that the Liquidity  Provider  extend the Expiry Date
for a period of 364 days  after  the then  effective  Expiry  Date  (unless  the
obligations of the Liquidity  Provider are earlier terminated in accordance with
the terms hereof). The Liquidity Provider shall advise the Borrower,  no earlier
than 40 days and no later than 25 days prior to the then effective  Expiry Date,
whether, in its sole discretion,  it agrees to so extend the Expiry Date. If the
Liquidity  Provider  advises the Borrower on or before the 25th day prior to the
Expiry Date then in effect that such  Expiry Date shall not be so  extended,  or
fails to irrevocably  and  unconditionally  advise the Borrower on or before the
25th day prior to the Expiry  Date then in effect that such Expiry Date shall be
so extended  (and, in each case, if the Liquidity  Provider  shall not have been
replaced in accordance with Section 3.6(e) of the Intercreditor Agreement),  the
Borrower  shall be  entitled  on and after  such 25th day (but prior to the then
effective  Expiry Date) to request a  Non-Extension  Advance in accordance  with
Section 2.02(b) hereof and Section 3.6(d) of the Intercreditor Agreement.

                                   ARTICLE III

                           OBLIGATIONS OF THE BORROWER

          Section 3.01. INCREASED COSTS. The Borrower shall pay to the Liquidity
Provider  from time to time such amounts as may be necessary to  compensate  the
Liquidity  Provider for any increased  costs incurred by the Liquidity  Provider
which are attributable to its making or maintaining any LIBOR Advances hereunder
or its obligation to make any such Advances  hereunder,  or any reduction in any
amount  receivable  by  the  Liquidity  Provider  under  this  Agreement  or the
Intercreditor Agreement in respect of any such Advances or such obligation (such
increases in costs and  reductions  in amounts  receivable  being herein  called
"ADDITIONAL COSTS"),  resulting from any change after the date of this Agreement
in U.S. federal,  state,  municipal,  or foreign laws or regulations  (including
Regulation D of the Board of Governors of the Federal  Reserve  System),  or the
adoption  or making  after the date of this  Agreement  of any  interpretations,
directives, or requirements applying to a class of banks including the Liquidity
Provider  under any U.S.  federal,  state,  municipal,  or any  foreign  laws or
regulations  (whether or not having the force of law) by any court, central bank
or monetary authority charged with the interpretation or administration  thereof



(a "REGULATORY CHANGE"), which: (1) changes the basis of taxation of any amounts
payable to the Liquidity  Provider  under this  Agreement in respect of any such
Advances  (other than Excluded  Taxes);  or (2) imposes or modifies any reserve,
special  deposit,  compulsory  loan  or  similar  requirements  relating  to any
extensions of credit or other assets of, or any deposits with other  liabilities
of, the Liquidity Provider (including any such Advances or any deposits referred
to in the  definition  of LIBOR  Rate or  related  definitions).  The  Liquidity
Provider agrees to use reasonable efforts  (consistent with applicable legal and
regulatory  restrictions)  to change the  jurisdiction  of its Lending Office if
making such change would avoid the need for, or reduce the amount of, any amount
payable  under this  Section  that may  thereafter  accrue and would not, in the
reasonable judgment of the Liquidity Provider,  be otherwise  disadvantageous to
the Liquidity Provider.

          The Liquidity Provider will notify the Borrower of any event occurring
after the date of this  Agreement  that will entitle the  Liquidity  Provider to
compensation  pursuant to this Section 3.01 as promptly as practicable  after it
obtains  knowledge  thereof and determines to request such  compensation,  which
notice shall describe in reasonable  detail the  calculation of the amounts owed
under this Section.  Determinations  by the  Liquidity  Provider for purposes of
this Section 3.01 of the effect of any Regulatory  Change on its costs of making
or maintaining  Advances or on amounts  receivable by it in respect of Advances,
and of the additional  amounts required to compensate the Liquidity  Provider in
respect of any  Additional  Costs,  shall be prima facie  evidence of the amount
owed under this Section.

          Section 3.02.  CAPITAL ADEQUACY.  If (1) the adoption,  after the date
hereof, of any applicable governmental law, rule or regulation regarding capital
adequacy,  (2) any  change,  after the date  hereof,  in the  interpretation  or
administration  of any such law, rule or regulation by any central bank or other
governmental authority charged with the interpretation or administration thereof
or (3) compliance by the Liquidity  Provider or any corporation  controlling the
Liquidity  Provider  with  any  applicable   guideline  or  request  of  general
applicability,  issued  after  the date  hereof,  by any  central  bank or other
governmental authority (whether or not having the force of law) that constitutes
a change of the nature  described  in clause (2), has the effect of requiring an
increase in the amount of capital  required to be  maintained  by the  Liquidity
Provider  or any  corporation  controlling  the  Liquidity  Provider,  and  such
increase is based upon the Liquidity Provider's  obligations hereunder and other
similar obligations,  the Borrower shall pay to the Liquidity Provider from time
to time such  additional  amount or amounts as are necessary to  compensate  the
Liquidity  Provider  for such  portion of such  increase as shall be  reasonably
allocable to the Liquidity Provider's obligations to the Borrower hereunder. The
Liquidity Provider agrees to use reasonable efforts  (consistent with applicable
legal and regulatory  restrictions)  to change the  jurisdiction  of its Lending
Office if making such change  would avoid the need for, or reduce the amount of,
any amount payable under this Section that may thereafter  accrue and would not,
in the reasonable  judgment of the Liquidity Provider,  be otherwise  materially
disadvantageous to the Liquidity Provider.

          The Liquidity Provider will notify the Borrower of any event occurring
after the date of this  Agreement  that will entitle the  Liquidity  Provider to
compensation  pursuant to this Section 3.02 as promptly as practicable  after it
obtains  knowledge  thereof and determines to request such  compensation,  which



notice shall describe in reasonable  detail the  calculation of the amounts owed
under this Section.  Determinations  by the  Liquidity  Provider for purposes of
this  Section  3.02 of the  effect of any  increase  in the  amount  of  capital
required to be maintained by the Liquidity  Provider and of the amount allocable
to the Liquidity Provider's obligations to the Borrower hereunder shall be prima
facie evidence of the amounts owed under this Section.

          Section 3.03.  PAYMENTS FREE OF  DEDUCTIONS.  (a) All payments made by
the Borrower under this  Agreement  shall be made free and clear of, and without
reduction  for or on account  of, any  present or future  stamp or other  taxes,
levies, imposts, duties, charges, fees, deductions,  withholdings,  restrictions
or  conditions  of any  nature  whatsoever  now or  hereafter  imposed,  levied,
collected,  withheld or assessed,  excluding  Excluded Taxes (such  non-excluded
taxes  being  referred to herein,  collectively,  as  "NON-EXCLUDED  TAXES" and,
individually,  as a "NON-EXCLUDED  TAX"). If any Non-Excluded Taxes are required
to be withheld  from any amounts  payable to the Liquidity  Provider  under this
Agreement,  the amounts so payable to the Liquidity  Provider shall be increased
to the extent necessary to yield to the Liquidity Provider (after payment of all
Non-Excluded  Taxes)  interest  or any other  such  amounts  payable  under this
Agreement  at the  rates or in the  amounts  specified  in this  Agreement.  The
Liquidity  Provider  agrees  to use  reasonable  efforts  (consistent  with  its
internal   policy  and  legal  and  regulatory   restrictions)   to  change  the
jurisdiction  of its Lending  Office if making such change  would avoid the need
for, or reduce the amount of, any such  additional  amounts that may  thereafter
accrue and would not, in the reasonable judgment of the Liquidity  Provider,  be
otherwise  disadvantageous to the Liquidity Provider. From time to time upon the
reasonable request of the Borrower,  the Liquidity Provider agrees to provide to
the  Borrower  two  original  Internal  Revenue  Service  Form 1001 or 4224,  as
appropriate,  or any successor or other form prescribed by the Internal  Revenue
Service,  certifying that the Liquidity Provider is exempt from or entitled to a
reduced  rate of United  States  withholding  tax on  payments  pursuant to this
Agreement.

          (b) All payments (including, without limitation, Advances) made by the
Liquidity  Provider  under this  Agreement  shall be made free and clear of, and
without  reduction for or on account of, any Taxes. If any Taxes are required to
be withheld or deducted  from any  amounts  payable to the  Borrower  under this
Agreement,  the Liquidity Provider shall (i) within the time prescribed therefor
by applicable law pay to the appropriate  governmental  or taxing  authority the
full  amount of any such  Taxes  (and any  additional  Taxes in  respect  of the
payment  required  under clause (ii) hereof) and make such reports or returns in
connection  therewith  at the  time or times  and in the  manner  prescribed  by
applicable  law, and (ii) pay to the Borrower an additional  amount which (after
deduction  of all such Taxes) will be  sufficient  to yield to the  Borrower the
full amount  which would have been  received  by it had no such  withholding  or
deduction  been made.  Within 30 days after the date of each payment  hereunder,
the Liquidity Provider shall furnish to the Borrower the original or a certified
copy of (or other  documentary  evidence of) the payment of the Taxes applicable
to such payment.

          Section 3.04.  PAYMENTS.  The Borrower  shall make or cause to be made
each payment to the Liquidity  Provider  under this Agreement so as to cause the
same to be received by the Liquidity Provider not later than 1:00 P.M. (New York
City time) on the day when due.  The  Borrower  shall make all such  payments in
lawful  money of the United  States of  America,  to the  Liquidity  Provider in



immediately  available  funds, by wire transfer to The Chase Manhattan Bank, One
Chase  Manhattan  Plaza,  New York,  New York 10081,  ABA No.  021-000-021,  for
account of Westdeutsche  Landesbank  Girozentrale,  New York branch, Account No.
920-1-060663, Reference: Continental Airlines Liquidity Facility 1998-3A-2.

          Section 3.05. COMPUTATIONS.  All computations of interest based on the
Base Rate  shall be made on the basis of a year of 365 or 366 days,  as the case
may be, and all  computations  of interest based on the LIBOR Rate shall be made
on the basis of a year of 360 days,  in each case for the actual  number of days
(including the first day but excluding the last day) occurring in the period for
which such interest is payable.

          Section 3.06. PAYMENT ON NON-BUSINESS DAYS. Whenever any payment to be
made  hereunder  shall be stated to be due on a day other than a  Business  Day,
such payment shall be made on the next succeeding Business Day and no additional
interest shall be due as a result (and if so made,  shall be deemed to have been
made when  due).  If any  payment in  respect  of  interest  on an Advance is so
deferred to the next succeeding  Business Day, such deferral shall not delay the
commencement  of the next Interest Period for such Advance (if such Advance is a
LIBOR  Advance) or reduce the number of days for which  interest will be payable
on such Advance on the next interest payment date for such Advance.

          Section  3.07.  INTEREST.  (a) Subject to Section  2.09,  the Borrower
shall pay, or shall cause to be paid, without  duplication,  interest on (i) the
unpaid  principal  amount of each  Advance from and  including  the date of such
Advance (or, in the case of an Applied Provider Advance,  from and including the
date on  which  the  amount  thereof  was  withdrawn  from  the  Class  A-2 Cash
Collateral  Account  to pay  interest  on the  Class  A-2  Certificates)  to but
excluding the date such principal  amount shall be paid in full (or, in the case
of an Applied Provider Advance,  the date on which the Class A-2 Cash Collateral
Account is fully  replenished  in respect  of such  Advance)  and (ii) any other
amount due hereunder (whether fees,  commissions,  expenses or other amounts or,
to the extent permitted by law, installments of interest on Advances or any such
other  amount)  which is not paid  when due  (whether  at  stated  maturity,  by
acceleration  or  otherwise)  from and  including  the due date  thereof  to but
excluding  the  date  such  amount  is paid in full,  in each  such  case,  at a
fluctuating  interest  rate  per  annum  for each  day  equal to the  Applicable
Liquidity  Rate (as defined  below) for such  Advance or such other amount as in
effect  for such  day,  but in no event at a rate  per  annum  greater  than the
maximum rate permitted by applicable  law;  PROVIDED,  HOWEVER,  that, if at any
time the  otherwise  applicable  interest rate as set forth in this Section 3.07
shall exceed the maximum rate  permitted by applicable  law, then any subsequent
reduction  in such  interest  rate will not reduce the rate of interest  payable
pursuant to this Section 3.07 below the maximum rate permitted by applicable law
until the total amount of interest  accrued  equals the amount of interest  that
would have accrued if such  otherwise  applicable  interest rate as set forth in
this Section 3.07 had at all times been in effect.

          (b)  Except as  provided  in clause (e) below,  each  Advance  will be
either a Base Rate Advance or a LIBOR Advance as provided in this Section.  Each
such  Advance  will be a Base Rate  Advance  for the period from the date of its
borrowing to (but  excluding)  the third  Business Day  following  the Liquidity
Provider's receipt of the Notice of Borrowing for such Advance. Thereafter, such




Advance shall be a LIBOR  Advance;  provided that the Borrower (at the direction
of  the  Controlling  Party,  so  long  as the  Liquidity  Provider  is not  the
Controlling Party) may (x) convert the Final Advance into a Base Rate Advance on
the last day of an  Interest  Period for such  Advance  by giving the  Liquidity
Provider no less than four Business  Days' prior written notice of such election
or (y)  elect to  maintain  the Final  Advance  as a Base  Rate  Advance  by not
requesting a conversion of the Final Advance to a LIBOR Advance under Clause (5)
of the  applicable  Notice of Borrowing  (or, if such Final Advance is deemed to
have been made,  without  delivery of a Notice of Borrowing  pursuant to Section
2.06, by requesting,  prior to 11:00 A.M. on the first Business Day  immediately
following the Borrower's receipt of the applicable Termination Notice, that such
Final Advance not be converted from a Base Rate Advance to a LIBOR Advance).

          (c) Each LIBOR Advance shall bear interest during each Interest Period
at a rate per annum  equal to the LIBOR Rate for such  Interest  Period plus the
Applicable Margin for such LIBOR Advance,  payable in arrears on the last day of
such Interest Period and, in the event of the payment of principal of such LIBOR
Advance on a day other than such last day,  on the date of such  payment (to the
extent of interest accrued on the amount of principal repaid).

          (d) Each Base Rate  Advance  shall bear  interest  at a rate per annum
equal to the Base Rate plus the  Applicable  Margin for such Base Rate  Advance,
payable in arrears on each  Regular  Distribution  Date and, in the event of the
payment  of  principal  of such Base Rate  Advance on a day other than a Regular
Distribution  Date,  on the date of such  payment  (to the  extent  of  interest
accrued on the amount of principal repaid).

          (e) Each outstanding Unapplied Provider Advance shall bear interest in
an amount  equal to the  Investment  Earnings on amounts on deposit in the Class
A-2 Cash  Collateral  Account  plus the  Applicable  Margin  for such  Unapplied
Provider  Advance on the amount of such Unapplied  Provider Advance from time to
time, payable in arrears on each Regular Distribution Date.

          (f)  Each  amount  not  paid  when  due   hereunder   (whether   fees,
commissions, expenses or other amounts or, to the extent permitted by applicable
law,  installments  of interest on Advances but excluding  Advances)  shall bear
interest at a rate per annum equal to the Base Rate plus 2.00% until paid.

          (g) Each change in the Base Rate shall become  effective  immediately.
The rates of interest specified in this Section 3.07 with respect to any Advance
or other amount shall be referred to as the "APPLICABLE LIQUIDITY RATE".

          Section 3.08.  REPLACEMENT OF BORROWER.  From time to time and subject
to the successor  Borrower's  meeting the eligibility  requirements set forth in
Section  6.9 of the  Intercreditor  Agreement  applicable  to the  Subordination
Agent,  upon the  effective  date and time  specified in a written and completed
Notice of Replacement  Subordination Agent in substantially the form of Annex VI
attached hereto (a "NOTICE OF REPLACEMENT SUBORDINATION Agent") delivered to the
Liquidity  Provider by the then  Borrower,  the  successor  Borrower  designated
therein shall be substituted for as the Borrower for all purposes hereunder.





          Section 3.09. FUNDING LOSS INDEMNIFICATION.  The Borrower shall pay to
the Liquidity Provider,  upon the request of the Liquidity Provider, such amount
or amounts as shall be sufficient  (in the  reasonable  opinion of the Liquidity
Provider) to compensate it for any loss,  cost, or expense incurred by reason of
the  liquidation  or  redeployment  of deposits  or other funds  acquired by the
Liquidity  Provider to fund or maintain any LIBOR Advance (but excluding loss of
anticipated profits) incurred as a result of:

          (1) Any repayment of a LIBOR Advance on a date other than the last day
     of the Interest Period for such Advance; or

          (2) Any failure by the Borrower to borrow a LIBOR  Advance on the date
     for borrowing specified in the relevant notice under Section 2.02.

          Section 3.10. ILLEGALITY.  Notwithstanding any other provision in this
Agreement,  if any change in any  applicable  law,  rule or  regulation,  or any
change in the  interpretation  or  administration  thereof  by any  governmental
authority,  central bank or comparable agency charged with the interpretation or
administration  thereof, or compliance by the Liquidity Provider (or its Lending
Office) with any request or  directive  (whether or not having the force of law)
of any such authority,  central bank or comparable agency shall make it unlawful
or impossible for the Liquidity  Provider (or its Lending Office) to maintain or
fund its LIBOR  Advances,  then upon  notice to the  Borrower  by the  Liquidity
Provider,  the  outstanding  principal  amount  of the LIBOR  Advances  shall be
converted to Base Rate  Advances (a)  immediately  upon demand of the  Liquidity
Provider, if such change or compliance with such request, in the judgment of the
Liquidity Provider,  requires immediate  repayment;  or (b) at the expiration of
the last Interest  Period to expire before the effective date of any such change
or request.


                                  ARTICLE IV

                             CONDITIONS PRECEDENT

          Section 4.01.  CONDITIONS  PRECEDENT TO EFFECTIVENESS OF SECTION 2.01.
Section 2.01 of this  Agreement  shall  become  effective on and as of the first
date (the  "Effective  Date") on which the following  conditions  precedent have
been satisfied or waived:

          (a) The  Liquidity  Provider  shall  have  received  on or before  the
     Closing  Date  each of the  following,  and in the  case  of each  document
     delivered  pursuant to  paragraphs  (i),  (ii) and (iii),  each in form and
     substance satisfactory to the Liquidity Provider:

               (i) This Agreement duly executed on behalf of the Borrower;

               (ii) The Intercreditor  Agreement duly executed on behalf of each
          of the parties thereto;

               (iii) Fully executed  copies of each of the Operative  Agreements
          executed and  delivered on or before the Closing Date (other than this
          Agreement and the Intercreditor Agreement);





               (iv) A copy of the Prospectus  Supplement and specimen  copies of
          the Class A-2 Certificates;

               (v) An executed copy of each  document,  instrument,  certificate
          and opinion  delivered on or before the Closing  Date  pursuant to the
          Class A-2 Trust Agreement,  the Intercreditor  Agreement and the other
          Operative Agreements (in the case of each such opinion, other than the
          opinion of  counsel  for the  Underwriters,  either  addressed  to the
          Liquidity  Provider  or  accompanied  by a  letter  from  the  counsel
          rendering  such opinion to the effect that the  Liquidity  Provider is
          entitled  to  rely  on  such  opinion  as of its  date  as if it  were
          addressed to the Liquidity Provider);

               (vi)  Evidence  that  there  shall have been made and shall be in
          full force and effect, all filings,  recordings and/or  registrations,
          and there  shall have been given or taken any notice or other  similar
          action as may be  reasonably  necessary  or, to the extent  reasonably
          requested by the Liquidity Provider, reasonably advisable, in order to
          establish,   perfect,  protect  and  preserve  the  right,  title  and
          interest,  remedies, powers, privileges,  liens and security interests
          of,  or for  the  benefit  of,  the  Trustees,  the  Borrower  and the
          Liquidity  Provider created by the Operative  Agreements  executed and
          delivered on or prior to the Closing Date;

               (vii) An  agreement  from  Continental,  pursuant  to  which  (i)
          Continental agrees to provide copies of quarterly financial statements
          and audited annual financial statements to the Liquidity Provider, and
          such other  information  as the Liquidity  Provider  shall  reasonably
          request with respect to the transactions contemplated by the Operative
          Agreements,  in each case,  only to the  extent  that  Continental  is
          obligated to provide such information pursuant to Section 8.2.1 of the
          Leases (related to Leased  Aircraft) or the  corresponding  section of
          the Indentures  (related to Owned Aircraft) to the parties thereto and
          (ii)  Continental  agrees to allow the  Liquidity  Provider to inspect
          Continental's  books and records regarding such  transactions,  and to
          discuss such  transactions with officers and employees of Continental;
          and

               (viii) Such other documents,  instruments, opinions and approvals
          pertaining  to the  transactions  contemplated  hereby or by the other
          Operative  Agreements as the Liquidity  Provider shall have reasonably
          requested.

          (b) The following  statement  shall be true on and as of the Effective
     Date:  no event has  occurred and is  continuing,  or would result from the
     entering  into  of this  Agreement  or the  making  of any  Advance,  which
     constitutes a Liquidity Event of Default.

          (c) The Liquidity  Provider shall have received payment in full of all
     fees  and  other  sums  required  to be paid to or for the  account  of the
     Liquidity Provider on or prior to the Effective Date.





          (d) All conditions precedent to the issuance of the Certificates under
     the Trust  Agreements  shall have been satisfied or waived,  all conditions
     precedent to the effectiveness of the other Liquidity Facilities shall have
     been satisfied or waived,  and all conditions  precedent to the purchase of
     the Certificates by the Underwriters under the Underwriting Agreement shall
     have been satisfied  (unless any of such  conditions  precedent  shall have
     been waived by the Underwriters).

          (e) The Borrower  shall have  received a  certificate,  dated the date
     hereof,  signed  by a  duly  authorized  representative  of  the  Liquidity
     Provider,  certifying that all conditions precedent to the effectiveness of
     Section 2.01 have been satisfied or waived.

          Section 4.02. CONDITIONS PRECEDENT TO BORROWING. The obligation of the
Liquidity Provider to make an Advance on the occasion of each Borrowing shall be
subject to the conditions  precedent that the Effective Date shall have occurred
and,  prior to the date of such  Borrowing,  the Borrower shall have delivered a
Notice of Borrowing which conforms to the terms and conditions of this Agreement
and has been  completed as may be required by the relevant form of the Notice of
Borrowing for the type of Advances requested.


                                  ARTICLE V

                                  COVENANTS

          Section 5.01.  AFFIRMATIVE  COVENANTS OF THE BORROWER.  So long as any
Advance  shall remain unpaid or the  Liquidity  Provider  shall have any Maximum
Commitment hereunder or the Borrower shall have any obligation to pay any amount
to the Liquidity  Provider  hereunder,  the Borrower will,  unless the Liquidity
Provider shall otherwise consent in writing:

          (a) PERFORMANCE OF THIS AND OTHER AGREEMENTS.  Punctually pay or cause
     to be paid all  amounts  payable by it under this  Agreement  and the other
     Operative  Agreements and observe and perform in all material  respects the
     conditions,  covenants and requirements  applicable to it contained in this
     Agreement and the other Operative Agreements.

          (b) REPORTING  REQUIREMENTS.  Furnish to the  Liquidity  Provider with
     reasonable promptness,  such other information and data with respect to the
     transactions  contemplated by the Operative Agreements as from time to time
     may be  reasonably  requested  by the  Liquidity  Provider;  and permit the
     Liquidity Provider, upon reasonable notice, to inspect the Borrower's books
     and records with respect to such transactions and to meet with officers and
     employees of the Borrower to discuss such transactions.

          (c) CERTAIN OPERATIVE  AGREEMENTS.  Furnish to the Liquidity  Provider
     with reasonable  promptness,  such Operative  Agreements entered into after
     the date  hereof as from time to time may be  reasonably  requested  by the
     Liquidity Provider.




          Section  5.02.  NEGATIVE  COVENANTS  OF THE  BORROWER.  So long as any
Advance  shall remain unpaid or the  Liquidity  Provider  shall have any Maximum
Commitment hereunder or the Borrower shall have any obligation to pay any amount
to the Liquidity Provider hereunder,  the Borrower will not appoint or permit or
suffer to be appointed any successor  Borrower without the prior written consent
of the Liquidity Provider,  which consent shall not be unreasonably  withheld or
delayed.


                                   ARTICLE VI

                           LIQUIDITY EVENTS OF DEFAULT

          Section 6.01.  LIQUIDITY EVENTS OF DEFAULT. If (a) any Liquidity Event
of Default has occurred  and is  continuing  and (b) there is a Performing  Note
Deficiency,  the  Liquidity  Provider  may,  in its  discretion,  deliver to the
Borrower a  Termination  Notice,  the effect of which  shall be to cause (i) the
obligation of the Liquidity Provider to make Advances hereunder to expire on the
fifth Business Day after the date on which such  Termination  Notice is received
by the  Borrower,  (ii) the  Borrower to  promptly  request,  and the  Liquidity
Provider to promptly  make, a Final Advance in accordance  with Section  2.02(d)
hereof  and  Section  3.6(i)  of the  Intercreditor  Agreement,  (iii) all other
outstanding  Advances to be  automatically  converted  into Final  Advances  for
purposes of  determining  the  Applicable  Liquidity  Rate for interest  payable
thereon,  and (iv)  subject  to  Sections  2.07 and 2.09  hereof,  all  Advances
(including,  without  limitation,  any  Provider  Advance and  Applied  Provider
Advance),  any  accrued  interest  thereon  and any  other  amounts  outstanding
hereunder to become immediately due and payable to the Liquidity Provider.


                                   ARTICLE VII

                                  MISCELLANEOUS

          Section 7.01. AMENDMENTS, ETC. No amendment or waiver of any provision
of this Agreement, nor consent to any departure by the Borrower therefrom, shall
in any event be effective  unless the same shall be in writing and signed by the
Liquidity  Provider,  and,  in the case of an  amendment  or of a waiver  by the
Borrower,  the Borrower, and then such waiver or consent shall be effective only
in the specific instance and for the specific purpose for which given.

          Section 7.02.  NOTICES,  ETC. Except as otherwise  expressly  provided
herein, all notices and other communications  provided for hereunder shall be in
writing (including telecopier and mailed or delivered or sent by telecopier):



             Borrower:              WILMINGTON TRUST COMPANY
                                    Rodney Square North
                                    1100 North Market Square
                                    Wilmington, DE 19890-0001
                                    Attention:  Corporate Trust Administration
                                    Telephone:  (302) 651-1000
                                    Telecopy:  (302) 651-8882

             Liquidity Provider:    WESTDEUTSCHE LANDESBANK
                                     GIROZENTRALE
                                    Transportation Finance
                                    1211 Avenue of the Americas
                                    New York, NY 10036
                                    Attention:  Brigitte Thieme
                                    Telephone: (212) 852-6111
                                    Telecopy: (212) 921-5947

             with a copy to:        WESTDEUTSCHE LANDESBANK
                                    GIROZENTRALE
                                    Loan Administration
                                    1211 Avenue of the Americas
                                    New York, NY 10036
                                    Attention:  Steve Nibur
                                    Telephone: (212) 852-6323
                                    Telecopy: (212) 302-7946

or, as to each of the foregoing, at such other address as shall be designated by
such  Person  in  a  written  notice  to  the  others.   All  such  notices  and
communications  shall be effective (i) if given by telecopier,  when transmitted
to the telecopier  number specified above, (ii) if given by mail, when deposited
in the mails  addressed as specified  above,  and (iii) if given by other means,
when delivered at the address  specified  above,  except that written notices to
the Liquidity  Provider pursuant to the provisions of Articles II and III hereof
shall not be effective until received by the Liquidity  Provider.  A copy of all
notices  delivered  hereunder  to either party shall in addition be delivered to
each  of the  parties  to  the  Participation  Agreements  at  their  respective
addresses set forth therein.

          Section  7.03.  NO  WAIVER;  REMEDIES.  No  failure on the part of the
Liquidity Provider to exercise, and no delay in exercising, any right under this
Agreement  shall  operate as a waiver  thereof;  nor shall any single or partial
exercise  of any right  under  this  Agreement  preclude  any  other or  further
exercise  thereof  or the  exercise  of any other  right.  The  remedies  herein
provided are cumulative and not exclusive of any remedies provided by law.

          Section  7.04.  FURTHER  ASSURANCES.  The  Borrower  agrees to do such
further  acts and things and to execute  and deliver to the  Liquidity  Provider
such additional assignments, agreements, powers and instruments as the Liquidity



Provider  may  reasonably  require or deem  advisable  to carry into  effect the
purposes  of this  Agreement  and the other  Operative  Agreements  or to better
assure and confirm unto the Liquidity  Provider its rights,  powers and remedies
hereunder and under the other Operative Agreements.

          Section 7.05.  INDEMNIFICATION;  SURVIVAL OF CERTAIN  PROVISIONS.  The
Liquidity  Provider  shall be  indemnified  hereunder  to the  extent and in the
manner described in Section 8.1 of the Participation  Agreements with respect to
Owned Aircraft and Section 9.1 of the  Participation  Agreements with respect to
Leased Aircraft. In addition, the Borrower agrees to indemnify,  protect, defend
and hold harmless the Liquidity  Provider  from,  against and in respect of, and
shall pay on demand,  all Expenses of any kind or nature  whatsoever (other than
any Expenses of the nature  described in Section 3.01, 3.02 or 7.07 hereof or in
the Fee Letter applicable to this Agreement  (regardless of whether  indemnified
against pursuant to said Sections or in such Fee Letter)),  that may be imposed,
incurred by or asserted  against any Liquidity  Indemnitee,  in any way relating
to, resulting from, or arising out of or in connection with any action,  suit or
proceeding by any third party against such Liquidity  Indemnitee and relating to
this Agreement,  the Fee Letter applicable to this Agreement,  the Intercreditor
Agreement or any Financing Agreement; PROVIDED, HOWEVER, that the Borrower shall
not be required to  indemnify,  protect,  defend and hold harmless any Liquidity
Indemnitee in respect of any Expense of such Liquidity  Indemnitee to the extent
such Expense is (i) attributable to the gross  negligence or willful  misconduct
of such Liquidity  Indemnitee or any other Liquidity  Indemnitee,  (ii) ordinary
and usual operating  overhead expense,  or (iii)  attributable to the failure by
such  Liquidity  Indemnitee  or any other  Liquidity  Indemnitee  to  perform or
observe any  agreement,  covenant or  condition  on its part to be  performed or
observed  in  this  Agreement,  the  Intercreditor  Agreement,  the  Fee  Letter
applicable to this Agreement, the Tax Letter or any other Operative Agreement to
which it is a party.  The  indemnities  contained  in Section 8.1 or 9.1, as the
case may be, of the  Participation  Agreements,  and the  provisions of Sections
3.01, 3.02,  3.03, 3.09, 7.05 and 7.07 hereof,  shall survive the termination of
this Agreement.

          Section  7.06.  LIABILITY OF THE LIQUIDITY  PROVIDER.  (a) Neither the
Liquidity Provider nor any of its officers,  employees,  directors or affiliates
shall  be  liable  or  responsible  for:  (i) the use  which  may be made of the
Advances  or any  acts  or  omissions  of the  Borrower  or any  beneficiary  or
transferee  in  connection   therewith;   (ii)  the  validity,   sufficiency  or
genuineness of documents,  or of any endorsement thereon, even if such documents
should prove to be in any or all respects invalid,  insufficient,  fraudulent or
forged;  or (iii) the  making of  Advances  by the  Liquidity  Provider  against
delivery of a Notice of Borrowing and other  documents  which do not comply with
the terms  hereof;  PROVIDED,  HOWEVER,  that the  Borrower  shall  have a claim
against the Liquidity  Provider,  and the Liquidity  Provider shall be liable to
the Borrower,  to the extent of any damages  suffered by the Borrower which were
the result of (A) the Liquidity  Provider's  willful misconduct or negligence in
determining  whether documents presented hereunder comply with the terms hereof,
or (B)  any  breach  by the  Liquidity  Provider  of any of the  terms  of  this
Agreement,  including,  but not limited to, the Liquidity  Provider's failure to
make lawful  payment  hereunder  after the  delivery to it by the  Borrower of a
Notice of Borrowing strictly complying with the terms and conditions hereof.



          (b) Neither the Liquidity Provider nor any of its officers, employees,
directors or affiliates  shall be liable or  responsible  in any respect for (i)
any error, omission, interruption or delay in transmission, dispatch or delivery
of any message or advice, however transmitted, in connection with this Agreement
or any Notice of Borrowing delivered hereunder,  or (ii) any action, inaction or
omission which may be taken by it in good faith,  absent  willful  misconduct or
negligence  (in which  event the extent of the  Liquidity  Provider's  potential
liability  to the  Borrower  shall be  limited  as set forth in the  immediately
preceding  paragraph),  in  connection  with  this  Agreement  or any  Notice of
Borrowing.

          Section 7.07.  COSTS,  EXPENSES AND TAXES. The Borrower agrees to pay,
or cause to be paid (A) on the Effective Date and on such later date or dates on
which the Liquidity  Provider shall make demand,  all  reasonable  out-of-pocket
costs and expenses  (including,  without  limitation,  the  reasonable  fees and
expenses  of  outside  counsel  for the  Liquidity  Provider)  of the  Liquidity
Provider in connection with the preparation,  negotiation,  execution, delivery,
filing and recording of this Agreement,  any other  Operative  Agreement and any
other documents which may be delivered in connection with this Agreement and (B)
on demand, all reasonable costs and expenses (including  reasonable counsel fees
and expenses) of the Liquidity  Provider in connection  with (i) the enforcement
of this Agreement or any other  Operative  Agreement,  (ii) the  modification or
amendment of, or supplement to, this Agreement or any other Operative  Agreement
or such  other  documents  which may be  delivered  in  connection  herewith  or
therewith  (whether or not the same shall become  effective) or (iii) any action
or  proceeding  relating to any order,  injunction,  or other  process or decree
restraining or seeking to restrain the Liquidity Provider from paying any amount
under  this  Agreement,  the  Intercreditor  Agreement  or any  other  Operative
Agreement or otherwise  affecting the application of funds in the Class A-2 Cash
Collateral Accounts. In addition,  the Borrower shall pay any and all recording,
stamp and other  similar  taxes and fees payable or  determined to be payable in
connection with the execution, delivery, filing and recording of this Agreement,
any other Operative  Agreement and such other documents,  and agrees to save the
Liquidity  Provider  harmless  from and  against  any and all  liabilities  with
respect to or  resulting  from any delay in paying or omission to pay such taxes
or fees.

          Section 7.08. BINDING EFFECT; PARTICIPATIONS. (a) This Agreement shall
be binding  upon and inure to the  benefit  of the  Borrower  and the  Liquidity
Provider and their  respective  successors and assigns,  except that neither the
Liquidity  Provider  (except as  otherwise  provided in this  Section  7.08) nor
(except as  contemplated  by Section 3.08) the Borrower  shall have the right to
assign its rights or  obligations  hereunder or any interest  herein without the
prior written consent of the other party, subject to the requirements of Section
7.08(b). The Liquidity Provider may grant participations herein or in any of its
rights hereunder  (including,  without  limitation,  funded  participations  and
participations in rights to receive interest  payments  hereunder) and under the
other Operative  Agreements to such Persons as the Liquidity Provider may in its
sole discretion select,  subject to the requirements of Section 7.08(b). No such
participation  by the Liquidity  Provider,  however,  will relieve the Liquidity
Provider of its obligations  hereunder.  In connection with any participation or
any  proposed  participation,   the  Liquidity  Provider  may  disclose  to  the
participant or the proposed  participant  any  information  that the Borrower is
required to deliver or to disclose to the  Liquidity  Provider  pursuant to this
Agreement.  The Borrower  acknowledges and agrees that the Liquidity  Provider's
source  of  funds  may  derive  in  part  from  its  participants   (other  than



Continental).  Accordingly, references in this Agreement and the other Operative
Agreements  to  determinations,   reserve  and  capital  adequacy  requirements,
increased costs,  reduced receipts,  additional  amounts due pursuant to Section
3.03 and the like as they pertain to the Liquidity Provider shall be deemed also
to include  those of each of its  participants  (subject,  in each case,  to the
maximum amount that would have been incurred by or attributable to the Liquidity
Provider directly if the Liquidity  Provider,  rather than the participant,  had
held the interest participated).

          (b) If, pursuant to subsection (a) above, the Liquidity Provider sells
any  participation  in this  Agreement  to any bank or  other  entity  (each,  a
"TRANSFEREE"),  then, concurrently with the effectiveness of such participation,
the Transferee shall (i) represent to the Liquidity Provider (for the benefit of
the  Liquidity  Provider and the  Borrower)  either (A) that it is  incorporated
under  the laws of the  United  States  or a state  thereof  or (B)  that  under
applicable  law and  treaties,  no taxes will be required  to be  withheld  with
respect  to any  payments  to be made  to such  Transferee  in  respect  of this
Agreement,  (ii) furnish to the Liquidity Provider and the Borrower either (x) a
statement that it is incorporated under the laws of the United States or a state
thereof or (y) if it is not so incorporated,  two copies of a properly completed
United States  Internal  Revenue Service Form 4224 or Form 1001, as appropriate,
or other  applicable  form,  certificate or document  prescribed by the Internal
Revenue Service  certifying,  in each case, such  Transferee's  entitlement to a
complete exemption from United States federal  withholding tax in respect to any
and all payments to be made  hereunder,  and (iii) agree (for the benefit of the
Liquidity  Provider and the Borrower) to provide the Liquidity  Provider and the
Borrower a new Form 4224 or Form 1001, as appropriate, (A) on or before the date
that any such form expires or becomes  obsolete or (B) after the  occurrence  of
any event requiring a change in the most recent form previously  delivered by it
and prior to the  immediately  following due date of any payment by the Borrower
hereunder,  certifying  in the  case  of a Form  1001  or Form  4224  that  such
Transferee  is  entitled to a complete  exemption  from  United  States  federal
withholding  tax on  payments  under this  Agreement.  Unless the  Borrower  has
received forms or other documents reasonably satisfactory to it (and required by
applicable  law)  indicating  that payments  hereunder are not subject to United
States federal  withholding tax, the Borrower will withhold taxes as required by
law from such payments at the applicable statutory rate.

          (c)  Notwithstanding  the other  provisions of this Section 7.08,  the
Liquidity  Provider  may assign and  pledge all or any  portion of the  Advances
owing  to it to any  Federal  Reserve  Bank or the  United  States  Treasury  as
collateral  security  pursuant to  Regulation A of the Board of Governors of the
Federal Reserve System and any Operating Circular issued by such Federal Reserve
Bank, provided that any payment in respect of such assigned Advances made by the
Borrower  to the  Liquidity  Provider  in  accordance  with  the  terms  of this
Agreement shall satisfy the Borrower's  obligations hereunder in respect of such
assigned Advance to the extent of such payment. No such assignment shall release
the Liquidity Provider from its obligations hereunder.

          Section 7.09.  SEVERABILITY.  Any provision of this Agreement which is
prohibited,  unenforceable  or not authorized in any  jurisdiction  shall, as to



such   jurisdiction,   be  ineffective  to  the  extent  of  such   prohibition,
unenforceability  or   non-authorization   without  invalidating  the  remaining
provisions hereof or affecting the validity,  enforceability or legality of such
provision in any other jurisdiction.

          Section 7.10.  GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

          Section 7.11. SUBMISSION TO JURISDICTION; WAIVER OF JURY TRIAL; WAIVER
OF  IMMUNITY.   (a)  Each  of  the  parties   hereto  hereby   irrevocably   and
unconditionally:

          (i)  submits  for  itself  and its  property  in any  legal  action or
     proceeding relating to this Agreement or any other Operative Agreement,  or
     for  recognition  and  enforcement  of any  judgment  in respect  hereof or
     thereof,  to the  nonexclusive  general  jurisdiction  of the courts of the
     State of New York,  the  courts of the  United  States of  America  for the
     Southern District of New York, and the appellate courts from any thereof;

          (ii)  consents  that any such action or  proceeding  may be brought in
     such courts,  and waives any objection that it may now or hereafter have to
     the venue of any such action or  proceeding  in any such court or that such
     action or proceeding was brought in an inconvenient court and agrees not to
     plead or claim the same;

          (iii) agrees that service of process in any such action or  proceeding
     may be effected by mailing a copy thereof by registered  or certified  mail
     (or any  substantially  similar form and mail),  postage  prepaid,  to each
     party hereto at its address set forth in Section  7.02  hereof,  or at such
     other  address of which the  Liquidity  Provider  shall have been  notified
     pursuant thereto; and

          (iv)  agrees  that  nothing  herein  shall  affect the right to effect
     service of process in any other manner  permitted by law or shall limit the
     right to sue in any other jurisdiction.

          (b) THE BORROWER AND THE LIQUIDITY PROVIDER EACH HEREBY AGREE TO WAIVE
THEIR  RESPECTIVE  RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION  BASED
UPON OR ARISING OUT OF THIS  AGREEMENT OR ANY DEALINGS  BETWEEN THEM RELATING TO
THE  SUBJECT  MATTER  OF THIS  AGREEMENT  AND  THE  RELATIONSHIP  THAT IS  BEING
ESTABLISHED, including, without limitation, contract claims, tort claims, breach
of duty claims and all other common law and statutory  claims.  The Borrower and
the  Liquidity  Provider  each warrant and  represent  that it has reviewed this
waiver with its legal counsel,  and that it knowingly and voluntarily waives its
jury trial rights following consultation with such legal counsel. THIS WAIVER IS
IRREVOCABLE, AND CANNOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND THIS WAIVER
SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS
TO THIS AGREEMENT.



          (c) The Liquidity Provider hereby waives any immunity it may have from
the  jurisdiction  of the courts of the United States or of any State and waives
any immunity any of its  properties  located in the United  States may have from
attachment  or  execution  upon a judgment  entered by any such court  under the
United States Foreign Sovereign  Immunities Act of 1976 or any similar successor
legislation.

          Section  7.12.  EXECUTION  IN  COUNTERPARTS.  This  Agreement  may  be
executed  in any  number of  counterparts  and by  different  parties  hereto on
separate  counterparts,  each  of  which  counterparts,  when  so  executed  and
delivered,  shall be deemed  to be an  original  and all of which  counterparts,
taken together, shall constitute but one and the same Agreement.

          Section 7.13. ENTIRETY.  This Agreement,  the Intercreditor  Agreement
and the other  Operative  Agreements to which the Liquidity  Provider is a party
constitute  the entire  agreement  of the  parties  hereto  with  respect to the
subject matter hereof and supersedes all prior  understandings and agreements of
such parties.

          Section  7.14.  HEADINGS.  Section  headings  in  this  Agreement  are
included  herein for  convenience  of reference  only and shall not constitute a
part of this Agreement for any other purpose.

          Section 7.15. TRANSFER. The Liquidity Provider hereby acknowledges and
consents  to  the  Transfer   contemplated  by  the  Assignment  and  Assumption
Agreement.

          Section 7.16. LIQUIDITY PROVIDER'S OBLIGATION TO MAKE ADVANCES. EXCEPT
AS EXPRESSLY  SET FORTH IN THIS  AGREEMENT,  THE  OBLIGATIONS  OF THE  LIQUIDITY
PROVIDER  TO MAKE  ADVANCES  HEREUNDER,  AND THE  BORROWER'S  RIGHTS TO  DELIVER
NOTICES OF  BORROWING  REQUESTING  THE MAKING OF  ADVANCES  HEREUNDER,  SHALL BE
UNCONDITIONAL  AND  IRREVOCABLE,  AND SHALL BE PAID OR  PERFORMED,  IN EACH CASE
STRICTLY IN ACCORDANCE WITH THE TERMS OF THIS AGREEMENT.



          IN WITNESS WHEREOF,  the parties have caused this Agreement to be duly
executed and delivered by their respective officers thereunto duly authorized as
of the date first set forth above.

                              WILMINGTON TRUST COMPANY,
                                    not in its individual capacity but solely
                                    as Subordination Agent, as agent and
                                    trustee for the Class A-2 Trust, as
                                    Borrower



                              By:_________________________________
                                 Name:
                                 Title:


                              WESTDEUTSCHE LANDESBANK
                              GIROZENTRALE, acting through its
                              New York Branch,
                              as Liquidity Provider



                              By:_________________________________
                                 Name:
                                 Title:



                              By:_________________________________
                                 Name:
                                 Title:



                                                                      Annex I to
                                                      Revolving Credit Agreement


                      INTEREST ADVANCE NOTICE OF BORROWING

          The  undersigned,  a duly  authorized  signatory  of  the  undersigned
borrower  (the   "BORROWER"),   hereby  certifies  to  WESTDEUTSCHE   LANDESBANK
GIROZENTRALE,  acting  through its New York Branch (the  "LIQUIDITY  PROVIDER"),
with  reference  to the  Revolving  Credit  Agreement  (1998-3A-2)  dated  as of
November  3,  1998,  between  the  Borrower  and  the  Liquidity  Provider  (the
"LIQUIDITY  AGREEMENT";  the terms  defined  therein and not  otherwise  defined
herein being used herein as therein defined or referenced), that:

          (1) The Borrower is the  Subordination  Agent under the  Intercreditor
     Agreement.

          (2) The Borrower is delivering this Notice of Borrowing for the making
     of an Interest  Advance by the  Liquidity  Provider to be used,  subject to
     clause  (3)(v)  below,  for  the  payment  of  interest  on the  Class  A-2
     Certificates  which was payable on  ____________,  ____ (the  "DISTRIBUTION
     DATE") in accordance  with the terms and  provisions of the Class A-2 Trust
     Agreement and the Class A-2 Certificates,  which Advance is requested to be
     made on ____________, ____.

          (3)  The  amount  of the  Interest  Advance  requested  hereby  (i) is
     $_______________.__,  to be  applied  in  respect  of  the  payment  of the
     interest  which was due and  payable on the Class A-2  Certificates  on the
     Distribution  Date,  (ii) does not include  any amount with  respect to the
     payment of  principal  of, or premium  on, the Class A-2  Certificates,  or
     principal  of, or interest or premium on, the Class A-1  Certificates,  the
     Class  B  Certificates,  the  Class  C-1  Certificates  or  the  Class  C-2
     Certificates,  (iii) was computed in accordance  with the provisions of the
     Class A-2 Certificates, the Class A-2 Trust Agreement and the Intercreditor
     Agreement (a copy of which  computation is attached  hereto as Schedule I),
     (iv) does not exceed the Maximum  Available  Commitment on the date hereof,
     (v) does not include  any amount of  interest  which was due and payable on
     the Class A-2  Certificates  on such  Distribution  Date but which  remains
     unpaid due to the  failure of the  Depositary  to pay any amount of accrued
     interest on the  Deposits on such  Distribution  Date and (vi) has not been
     and is not the subject of a prior or contemporaneous Notice of Borrowing.

          (4)  Upon  receipt  by or on  behalf  of the  Borrower  of the  amount
     requested  hereby,  (a) the Borrower will apply the same in accordance with
     the terms of Section 3.6(b) of the Intercreditor  Agreement, (b) no portion
     of such amount shall be applied by the  Borrower for any other  purpose and
     (c) no portion of such amount  until so applied  shall be  commingled  with
     other funds held by the Borrower.

          The  Borrower  hereby  acknowledges  that,  pursuant to the  Liquidity
Agreement,  the making of the  Interest  Advance as  requested by this Notice of



Borrowing shall  automatically  reduce,  subject to  reinstatement in accordance
with the terms of the Liquidity  Agreement,  the Maximum Available Commitment by
an amount  equal to the  amount of the  Interest  Advance  requested  to be made
hereby as set forth in clause (i) of paragraph (3) of this  Certificate and such
reduction shall automatically result in corresponding  reductions in the amounts
available to be borrowed pursuant to a subsequent Advance.

          IN WITNESS  WHEREOF,  the Borrower has  executed  and  delivered  this
Notice of Borrowing as of the ____ day of _________, ____.


                              WILMINGTON TRUST COMPANY,
                                    not in its individual capacity but solely
                                    as Subordination Agent, as Borrower


                              By:_________________________________
                                 Name:
                                 Title:



               SCHEDULE I TO INTEREST ADVANCE NOTICE OF BORROWING

                 [Insert Copy of Computations in accordance with
                     Interest Advance Notice of Borrowing]



                                                                     Annex II to
                                                      Revolving Credit Agreement

                    NON-EXTENSION ADVANCE NOTICE OF BORROWING

          The  undersigned,  a duly  authorized  signatory  of  the  undersigned
subordination   agent  (the   "BORROWER"),   hereby  certifies  to  WESTDEUTSCHE
LANDESBANK  GIROZENTRALE,  acting  through its New York  Branch (the  "LIQUIDITY
PROVIDER"),  with reference to the Revolving Credit Agreement  (1998-3A-2) dated
as of November 3, 1998,  between the Borrower and the  Liquidity  Provider  (the
"LIQUIDITY  AGREEMENT";  the terms  defined  therein and not  otherwise  defined
herein being used herein as therein defined or referenced), that:

          (1) The Borrower is the  Subordination  Agent under the  Intercreditor
     Agreement.

          (2) The Borrower is delivering this Notice of Borrowing for the making
     of the Non-Extension  Advance by the Liquidity  Provider to be used for the
     funding of the Class A-2 Cash Collateral Account in accordance with Section
     3.6(d) of the  Intercreditor  Agreement,  which  Advance is requested to be
     made on __________, ____.

          (3) The amount of the  Non-Extension  Advance  requested hereby (i) is
     $_______________.__,  which equals the Maximum Available  Commitment on the
     date hereof and is to be applied in respect of the funding of the Class A-2
     Cash   Collateral   Account  in  accordance  with  Section  3.6(d)  of  the
     Intercreditor  Agreement,  (ii) does not include any amount with respect to
     the payment of the principal of, or premium on, the Class A-2 Certificates,
     or principal of, or interest or premium on, the Class A-1 Certificates, the
     Class  B  Certificates,  the  Class  C-1  Certificates  or  the  Class  C-2
     Certificates,  (iii) was computed in accordance  with the provisions of the
     Class A-2 Certificates, the Class A-2 Trust Agreement and the Intercreditor
     Agreement (a copy of which  computation is attached  hereto as Schedule I),
     and (iv) has not been and is not the subject of a prior or  contemporaneous
     Notice of Borrowing under the Liquidity Agreement.

          (4)  Upon  receipt  by or on  behalf  of the  Borrower  of the  amount
     requested  hereby,  (a) the Borrower  will deposit such amount in the Class
     A-2 Cash Collateral Account and apply the same in accordance with the terms
     of Section 3.6(d) of the  Intercreditor  Agreement,  (b) no portion of such
     amount shall be applied by the  Borrower  for any other  purpose and (c) no
     portion of such  amount  until so applied  shall be  commingled  with other
     funds held by the Borrower.

          (5) The Borrower hereby requests that the Advance  requested hereby be
     a Base Rate  Advance and that such Base Rate  Advance be  converted  into a
     LIBOR  Advance on the third  Business  Day  following  your receipt of this
     notice.

          The  Borrower  hereby  acknowledges  that,  pursuant to the  Liquidity
Agreement,  (A) the making of the  Non-Extension  Advance as  requested  by this



Notice of Borrowing shall automatically and irrevocably terminate the obligation
of  the  Liquidity  Provider  to  make  further  Advances  under  the  Liquidity
Agreement;  and (B)  following  the  making  by the  Liquidity  Provider  of the
Non-Extension Advance requested by this Notice of Borrowing,  the Borrower shall
not be entitled to request any further Advances under the Liquidity Agreement.

          IN WITNESS  WHEREOF,  the Borrower has  executed  and  delivered  this
Notice of Borrowing as of the ____ day of _________, ____.

                                          WILMINGTON TRUST COMPANY,
                                                not in its individual
                                                capacity but solely as
                                                Subordination Agent, as
                                                Borrower


                                          By:_________________________________
                                             Name:
                                             Title:



             SCHEDULE I TO NON-EXTENSION ADVANCE NOTICE OF BORROWING

                   [Insert Copy of computations in accordance
                 with Non-Extension Advance Notice of Borrowing]



                                                                    Annex III to
                                                      Revolving Credit Agreement

                      DOWNGRADE ADVANCE NOTICE OF BORROWING

          The  undersigned,  a duly  authorized  signatory  of  the  undersigned
subordination   agent  (the   "BORROWER"),   hereby  certifies  to  WESTDEUTSCHE
LANDESBANK  GIROZENTRALE,  acting  through its New York  Branch (the  "LIQUIDITY
PROVIDER"),  with reference to the Revolving Credit Agreement  (1998-3A-2) dated
as of November 3, 1998,  between the Borrower and the  Liquidity  Provider  (the
"LIQUIDITY  AGREEMENT";  the terms  defined  therein and not  otherwise  defined
herein being used herein as therein defined or referenced), that:

          (1) The Borrower is the  Subordination  Agent under the  Intercreditor
     Agreement.

          (2) The Borrower is delivering this Notice of Borrowing for the making
     of the  Downgrade  Advance  by the  Liquidity  Provider  to be used for the
     funding of the Class A-2 Cash Collateral Account in accordance with Section
     3.6(c) of the  Intercreditor  Agreement by reason of the downgrading of the
     short-term unsecured debt rating of the Liquidity Provider issued by either
     Rating Agency below the Threshold Rating,  which Advance is requested to be
     made on __________, ____.

          (3) The  amount  of the  Downgrade  Advance  requested  hereby  (i) is
     $_______________.__,  which equals the Maximum Available  Commitment on the
     date hereof and is to be applied in respect of the funding of the Class A-2
     Cash   Collateral   Account  in  accordance  with  Section  3.6(c)  of  the
     Intercreditor  Agreement,  (ii) does not include any amount with respect to
     the payment of the principal of, or premium on, the Class A-2 Certificates,
     or principal of, or interest or premium on, the Class A-1 Certificates, the
     Class  B  Certificates,  the  Class  C-1  Certificates  or  the  Class  C-2
     Certificates,  (iii) was computed in accordance  with the provisions of the
     Class A-2 Certificates, the Class A-2 Trust Agreement and the Intercreditor
     Agreement (a copy of which  computation is attached  hereto as Schedule I),
     and (iv) has not been and is not the subject of a prior or  contemporaneous
     Notice of Borrowing under the Liquidity Agreement.

          (4)  Upon  receipt  by or on  behalf  of the  Borrower  of the  amount
     requested  hereby,  (a) the Borrower  will deposit such amount in the Class
     A-2 Cash Collateral Account and apply the same in accordance with the terms
     of Section 3.6(c) of the  Intercreditor  Agreement,  (b) no portion of such
     amount shall be applied by the  Borrower  for any other  purpose and (c) no
     portion of such  amount  until so applied  shall be  commingled  with other
     funds held by the Borrower.



          The  Borrower  hereby  acknowledges  that,  pursuant to the  Liquidity
Agreement,  (A) the making of the Downgrade  Advance as requested by this Notice
of Borrowing shall automatically and irrevocably terminate the obligation of the
Liquidity Provider to make further Advances under the Liquidity  Agreement;  and
(B)  following the making by the  Liquidity  Provider of the  Downgrade  Advance
requested by this Notice of  Borrowing,  the  Borrower  shall not be entitled to
request any further Advances under the Liquidity Agreement.

          IN WITNESS  WHEREOF,  the Borrower has  executed  and  delivered  this
Notice of Borrowing as of the ____ day of _________, ____.

                                          WILMINGTON TRUST COMPANY,
                                                not in its individual
                                                capacity but solely as
                                                Subordination Agent, as
                                                Borrower


                                          By:_________________________________
                                             Name:
                                             Title:



               SCHEDULE I TO DOWNGRADE ADVANCE NOTICE OF BORROWING

                   [Insert Copy of computations in accordance
                   with Downgrade Advance Notice of Borrowing]



                                                                     Annex IV to
                                                      Revolving Credit Agreement

                        FINAL ADVANCE NOTICE OF BORROWING

          The  undersigned,  a duly  authorized  signatory  of  the  undersigned
borrower  (the   "BORROWER"),   hereby  certifies  to  WESTDEUTSCHE   LANDESBANK
GIROZENTRALE,  acting  through its New York Branch (the  "LIQUIDITY  PROVIDER"),
with  reference  to the  Revolving  Credit  Agreement  (1998-3A-2)  dated  as of
November  3,  1998,  between  the  Borrower  and  the  Liquidity  Provider  (the
"LIQUIDITY  AGREEMENT";  the terms  defined  therein and not  otherwise  defined
herein being used herein as therein defined or referenced), that:

          (1) The Borrower is the  Subordination  Agent under the  Intercreditor
     Agreement.

          (2) The Borrower is delivering this Notice of Borrowing for the making
     of the Final Advance by the  Liquidity  Provider to be used for the funding
     of the Class A-2 Cash Collateral  Account in accordance with Section 3.6(i)
     of the Intercreditor  Agreement by reason of the receipt by the Borrower of
     a  Termination  Notice  from the  Liquidity  Provider  with  respect to the
     Liquidity Agreement, which Advance is requested to be made on ____________,
     ____.

          (3)  The  amount  of  the  Final  Advance   requested  hereby  (i)  is
     $_________________.__, which equals the Maximum Available Commitment on the
     date hereof and is to be applied in respect of the funding of the Class A-2
     Cash   Collateral   Account  in  accordance  with  Section  3.6(i)  of  the
     Intercreditor  Agreement,  (ii) does not include any amount with respect to
     the payment of principal of, or premium on, the Class A-2 Certificates,  or
     principal  of, or interest or premium on, the Class A-1  Certificates,  the
     Class  B  Certificates,  the  Class  C-1  Certificates  or  the  Class  C-2
     Certificates,  (iii) was computed in accordance  with the provisions of the
     Class A-2 Certificates, the Class A-2 Trust Agreement and the Intercreditor
     Agreement (a copy of which  computation is attached  hereto as Schedule I),
     and (iv) has not been and is not the subject of a prior or  contemporaneous
     Notice of Borrowing.

          (4)  Upon  receipt  by or on  behalf  of the  Borrower  of the  amount
     requested  hereby,  (a) the Borrower  will deposit such amount in the Class
     A-2 Cash Collateral Account and apply the same in accordance with the terms
     of Section 3.6(i) of the  Intercreditor  Agreement,  (b) no portion of such
     amount shall be applied by the  Borrower  for any other  purpose and (c) no
     portion of such  amount  until so applied  shall be  commingled  with other
     funds held by the Borrower.



          (5) The Borrower hereby requests that the Advance  requested hereby be
     a Base Rate Advance  [and that such Base Rate  Advance be converted  into a
     LIBOR  Advance on the third  Business  Day  following  your receipt of this
     notice.]

          The  Borrower  hereby  acknowledges  that,  pursuant to the  Liquidity
Agreement,  (A) the making of the Final  Advance as  requested by this Notice of
Borrowing shall  automatically  and irrevocably  terminate the obligation of the
Liquidity Provider to make further Advances under the Liquidity  Agreement;  and
(B)  following  the  making  by the  Liquidity  Provider  of the  Final  Advance
requested by this Notice of  Borrowing,  the  Borrower  shall not be entitled to
request any further Advances under the Liquidity Agreement.

          IN WITNESS  WHEREOF,  the Borrower has  executed  and  delivered  this
Notice of Borrowing as of the ____ day of _________, ____.

                                          WILMINGTON TRUST COMPANY,
                                                not in its individual
                                                capacity but solely as
                                                Subordination Agent, as
                                                Borrower


                                          By:_________________________________
                                             Name:
                                             Title:


- ----------

Bracketed language may be included at Borrower's option.



                 SCHEDULE I TO FINAL ADVANCE NOTICE OF BORROWING

                   [Insert Copy of Computations in accordance
                    with Final Advance Notice of Borrowing]



                                                                      Annex V to
                                                      Revolving Credit Agreement



                              NOTICE OF TERMINATION


                                                       [Date]

Wilmington Trust Company,
  as Subordination Agent, as Borrower
Rodney Square North
1100 North Market Square
Wilmington, DE 19890-0001

Attention: Corporate Trust Administration

Revolving Credit  Agreement  dated as of November  3, 1998,  between  Wilmington
     Trust  Company,  as  Subordination  Agent,  as agent  and  trustee  for the
     Continental Airlines Pass Through Trust, 1998-3A-2-[O/S],  as Borrower, and
     Westdeutsche  Landesbank  Girozentrale,  acting through its New York Branch
     (the "LIQUIDITY AGREEMENT")


Ladies and Gentlemen:

          You are hereby notified that pursuant to Section 6.01 of the Liquidity
Agreement,  by reason of the occurrence of a Liquidity  Event of Default and the
existence of a Performing  Note  Deficiency  (each as defined  therein),  we are
giving this notice to you in order to cause (i) our obligations to make Advances
(as defined  therein) under such  Liquidity  Agreement to terminate on the fifth
Business  Day after the date on which you  receive  this  notice and (ii) you to
request a Final Advance under the Liquidity Agreement pursuant to Section 3.6(i)
of the  Intercreditor  Agreement  (as defined in the  Liquidity  Agreement) as a
consequence of your receipt of this notice.



          THIS  NOTICE IS THE  "NOTICE OF  TERMINATION"  PROVIDED  FOR UNDER THE
LIQUIDITY  AGREEMENT.  OUR  OBLIGATIONS  TO MAKE  ADVANCES  UNDER THE  LIQUIDITY
AGREEMENT  WILL  TERMINATE ON THE FIFTH BUSINESS DAY AFTER THE DATE ON WHICH YOU
RECEIVE THIS NOTICE.

                                          Very truly yours,

                                          WESTDEUTSCHE LANDESBANK
                                          GIROZENTRALE, acting through its
                                          New York Branch,
                                             as Liquidity Provider


                                          By:___________________________
                                             Name:
                                             Title:


                                          By:___________________________
                                             Name:
                                             Title:
cc:   Wilmington Trust Company,
      as Class A-1 Trustee



                                                                     Annex VI to
                                                      Revolving Credit Agreement

                    NOTICE OF REPLACEMENT SUBORDINATION AGENT
[Date]
Attention:

     Revolving Credit Agreement dated as of November 3, 1998, between Wilmington
     Trust  Company,  as  Subordination  Agent,  as agent  and  trustee  for the
     Continental Airlines Pass Through Trust, 1998-3A-2-[O/S],  as Borrower, and
     Westdeutsche  Landesbank  Girozentrale,  acting through its New York Branch
     (the "LIQUIDITY AGREEMENT")


Ladies and Gentlemen:

          For value received,  the undersigned  beneficiary  hereby  irrevocably
transfers to:
                         ------------------------------
                              [Name of Transferee]


                         ------------------------------
                             [Address of Transferee]

all rights and  obligations  of the  undersigned as Borrower under the Liquidity
Agreement  referred to above.  The transferee  has succeeded the  undersigned as
Subordination  Agent under the Intercreditor  Agreement referred to in the first
paragraph of the  Liquidity  Agreement,  pursuant to the terms of Section 8.1 of
the Intercreditor Agreement.

          By this transfer,  all rights of the undersigned as Borrower under the
Liquidity  Agreement are transferred to the transferee and the transferee  shall
hereafter  have the sole  rights and  obligations  as Borrower  thereunder.  The
undersigned  shall pay any costs and expenses of such transfer,  including,  but
not limited to, transfer taxes or governmental charges.



          We ask that this transfer be effective as of _______________, ____.

                                          WILMINGTON TRUST COMPANY,
                                                not in its individual
                                                capacity but solely as
                                                Subordination Agent, as
                                                Borrower



                                          By:________________________________
                                             Name:
                                             Title:

                                                                       EXECUTION





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

                           REVOLVING CREDIT AGREEMENT
                                    (1998-3B)

                          Dated as of November 3, 1998

                                     between

                            WILMINGTON TRUST COMPANY,

                             as Subordination Agent,
                          as agent and trustee for the
                 Continental Airlines Pass Through Trust 1998-3B

                                   as Borrower

                                       and

                      MORGAN STANLEY CAPITAL SERVICES, INC.

                              as Liquidity Provider

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



                                   Relating to

                 Continental Airlines Pass Through Trust 1998-3B
              7.02% Continental Airlines Pass Through Certificates,
                                 Series 1998-3B






                                TABLE OF CONTENTS

                                                                            PAGE

                              ARTICLE I DEFINITIONS

Section 1.01.   Certain Defined Terms......................................... 1

                ARTICLE II AMOUNT AND TERMS OF THE COMMITMENT
Section 2.01.   The Advances.................................................. 7
Section 2.02.   Making the Advances........................................... 7
Section 2.03.   Fees.......................................................... 9
Section 2.04.   Reduction or Termination of the Maximum Commitment............ 9
Section 2.05.   Repayments of Interest Advances or the Final Advance..........10
Section 2.06.   Repayments of Provider Advances...............................10
Section 2.07.   Payments to the Liquidity Provider Under the Intercreditor
                Agreement.....................................................11
Section 2.08.   Book Entries..................................................11
Section 2.09.   Payments from Available Funds Only............................11
Section 2.10.   Extension of the Expiry Date; Non-Extension Advance...........12

                     ARTICLE III OBLIGATIONS OF THE BORROWER
Section 3.01.   Increased Costs...............................................12
Section 3.02.   Capital Adequacy..............................................13
Section 3.03.   Payments Free of Deductions...................................14
Section 3.04.   Payments......................................................14
Section 3.05.   Computations..................................................15
Section 3.06.   Payment on Non-Business Days..................................15
Section 3.07.   Interest......................................................15
Section 3.08.   Replacement of Borrower.......................................16
Section 3.09.   Funding Loss Indemnification..................................16
Section 3.10.   Illegality....................................................17

                         ARTICLE IV CONDITIONS PRECEDENT
Section 4.01.   Conditions Precedent to Effectiveness of Section 2.01.........17
Section 4.02.   Conditions Precedent to Borrowing.............................19

                               ARTICLE V COVENANTS
Section 5.01.   Affirmative Covenants of the Borrower.........................19
Section 5.02.   Negative Covenants of the Borrower............................19

                     ARTICLE VI LIQUIDITY EVENTS OF DEFAULT
Section 6.01.   Liquidity Events of Default...................................20

                            ARTICLE VII MISCELLANEOUS
Section 7.01.   Amendments, Etc...............................................20
Section 7.02.   Notices, Etc..................................................20




                                TABLE OF CONTENTS
                                   (CONTINUED)

Section 7.03.   No Waiver; Remedies...........................................21
Section 7.04.   Further Assurances............................................21
Section 7.05.   Indemnification; Survival of Certain Provisions...............21
Section 7.06.   Liability of the Liquidity Provider...........................22
Section 7.07.   Costs, Expenses and Taxes.....................................23
Section 7.08.   Binding Effect; Participations................................23
Section 7.09.   Severability..................................................24
Section 7.10.   Governing Law.................................................24
Section 7.11.   Submission to Jurisdiction; Waiver of Jury Trial; Waiver of
                Immunity..................................................... 25
Section 7.12.   Execution in Counterparts.....................................25
Section 7.13.   Entirety......................................................26
Section 7.14.   Headings......................................................26
Section 7.15.   Transfer......................................................26
Section 7.16.   Liquidity Provider's Obligation to Make Advances..............26




                                TABLE OF CONTENTS
                                   (CONTINUED)


ANNEX I          Interest Advance Notice of Borrowing

ANNEX II         Non-Extension Advance Notice of Borrowing

ANNEX III        Downgrade Advance Notice of Borrowing

ANNEX IV         Final Advance Notice of Borrowing

ANNEX V          Notice of Termination

ANNEX VI         Notice of Replacement Subordination Agent






                           REVOLVING CREDIT AGREEMENT

         This REVOLVING CREDIT  AGREEMENT dated as of November 3, 1998,  between
WILMINGTON TRUST COMPANY, a Delaware corporation, not in its individual capacity
but solely as  Subordination  Agent under the  Intercreditor  Agreement (each as
defined  below),  as agent and trustee for the Class B Trust (as defined  below)
(the  "BORROWER"),  and MORGAN  STANLEY  CAPITAL  SERVICES,  INC., a corporation
organized under the laws of the State of Delaware (the "LIQUIDITY PROVIDER").

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

         WHEREAS,  pursuant  to the Class B Trust  Agreement  (such term and all
other  capitalized terms used in these recitals having the meanings set forth or
referred  to in  Section  1.01),  the  Class  B Trust  is  issuing  the  Class B
Certificates; and

         WHEREAS,  the  Borrower,  in order to support  the timely  payment of a
portion of the interest on the Class B  Certificates  in  accordance  with their
terms,  has  requested  the  Liquidity  Provider  to enter into this  Agreement,
providing in part for the Borrower to request in  specified  circumstances  that
Advances be made hereunder.

         WHEREAS,  the  Liquidity  Provider has  requested  Morgan  Stanley Dean
Witter & Co. (the  "GUARANTOR") to enter into a Guarantee  Agreement,  providing
for the full and unconditional guarantee of the Liquidity Provider's obligations
under this Agreement (the "GUARANTEE AGREEMENT").

         NOW,  THEREFORE,  in consideration of the premises,  the parties hereto
agree as follows:

                                    ARTICLE I

                                   DEFINITIONS

         Section 1.01.  CERTAIN DEFINED TERMS. (a) DEFINITIONS.  As used in this
Agreement  and unless  otherwise  expressly  indicated,  or unless  the  context
clearly  requires  otherwise,  the  following  capitalized  terms shall have the
following respective meanings for all purposes of this Agreement:

          "ADDITIONAL  COST" has the  meaning  assigned  to such term in Section
     3.01.

          "ADVANCE"  means an  Interest  Advance,  a Final  Advance,  a Provider
     Advance,  an Applied Provider Advance or an Unpaid Advance, as the case may
     be.

          "APPLICABLE  LIQUIDITY RATE" has the meaning  assigned to such term in
     Section 3.07(g).



          "APPLICABLE  MARGIN"  means (x) with respect to any Unpaid  Advance or
     Applied  Provider  Advance,  1.75% per  annum,  or (y) with  respect to any
     Unapplied Provider Advance,  the rate per annum specified in the Fee Letter
     applicable to this Agreement.

          "APPLIED  DOWNGRADE  ADVANCE" has the meaning assigned to such term in
     Section 2.06(a).

          "APPLIED  NON-EXTENSION ADVANCE" has the meaning assigned to such term
     in Section 2.06(a).

          "APPLIED  PROVIDER  ADVANCE" has the meaning  assigned to such term in
     Section 2.06(a).

          "ASSIGNMENT  AND  ASSUMPTION   AGREEMENT"  means  the  Assignment  and
     Assumption  to be entered  into between the Borrower and the trustee of the
     Successor  Trust,  substantially  in the  form of  Exhibit  C to the  Trust
     Supplement  No.  1998-3B-O,  dated as of the date  hereof,  relating to the
     Class B Trust.

          "BASE RATE" means a fluctuating interest rate per annum in effect from
     time to time,  which rate per annum  shall at all times be equal to (a) the
     weighted average of the rates on overnight Federal funds  transactions with
     members of the Federal Reserve System arranged by Federal funds brokers, as
     published for such day (or, if such day is not a Business Day, for the next
     preceding Business Day) by the Federal Reserve Bank of New York, or if such
     rate is not so published for any day that is a Business Day, the average of
     the quotations for such day for such transactions received by the Liquidity
     Provider from three Federal funds brokers of recognized  standing  selected
     by it, plus (b) one-quarter of one percent (1/4 of 1%).

          "BASE RATE  ADVANCE"  means an Advance  that bears  interest at a rate
     based upon the Base Rate.

          "BORROWER"  has the  meaning  assigned  to such term in the recital of
     parties to this Agreement.

          "BORROWING"  means the making of Advances  requested  by delivery of a
     Notice of Borrowing.

          "BUSINESS  DAY" means any day other than a Saturday or Sunday or a day
     on which  commercial  banks are required or authorized to close in Houston,
     Texas,  New York,  New York,  or,  so long as any  Class B  Certificate  is
     outstanding,  the city and state in which the Class B Trustee, the Borrower
     or any Loan Trustee  maintains  its  Corporate  Trust Office or receives or
     disburses funds, and, if the applicable Business Day relates to any Advance
     or other amount bearing interest based on the LIBOR Rate, on which dealings
     are carried on in the London interbank market.

          "DEPOSITS"  has the  meaning  assigned  to such  terms in the  Deposit
     Agreement.





          "DEPOSITARY"  has the  meaning  assigned  to such term in the  Deposit
     Agreement.

          "DEPOSIT AGREEMENT" means the Deposit Agreement dated November 3, 1998
     between First  Security  Bank,  National  Association,  as Escrow Agent and
     Credit Suisse First Boston,  New York Branch, as Depositary,  pertaining to
     the  Class  B  Certificates,  as the  same  may  be  amended,  modified  or
     supplemented from time to time in accordance with the terms thereof.

          "DOWNGRADE ADVANCE" means an Advance made pursuant to Section 2.02(c).

          "EFFECTIVE  DATE" has the  meaning  specified  in  Section  4.01.  The
     delivery of the  certificate  of the  Liquidity  Provider  contemplated  by
     Section  4.01(e) shall be conclusive  evidence that the Effective  Date has
     occurred.

          "EXCLUDED  TAXES" means (i) taxes imposed on the overall net income of
     the Liquidity  Provider or of its Facility Office by the jurisdiction where
     such  Liquidity  Provider's  principal  office or such  Facility  Office is
     located, and (ii) Excluded Withholding Taxes.

          "EXCLUDED  WITHHOLDING  TAXES" means (i) withholding  Taxes imposed by
     the United  States  except (but only in the case of a  successor  Liquidity
     Provider  organized  under the laws of a  jurisdiction  outside  the United
     States) to the extent that such United States withholding Taxes are imposed
     as a result of any  change in  applicable  law  (excluding  from  change in
     applicable  law for this purpose a change in an applicable  treaty or other
     change in law  affecting  the  applicability  of a  treaty)  after the date
     hereof,  or in the case of a  successor  Liquidity  Provider  (including  a
     transferee of an Advance) or Facility Office,  after the date on which such
     successor  Liquidity Provider obtains its interest or on which the Facility
     Office is changed,  and (ii) any  withholding  Taxes  imposed by the United
     States which are imposed or increased as a result of the Liquidity Provider
     failing to deliver to the  Borrower  any  certificate  or  document  (which
     certificate  or  document  in the  good  faith  judgment  of the  Liquidity
     Provider it is legally  entitled to provide) which is reasonably  requested
     by the Borrower to establish  that payments under this Agreement are exempt
     from (or entitled to a reduced rate of) withholding Tax.

          "EXPENSES"  means  liabilities,   obligations,  damages,  settlements,
     penalties,  claims,  actions,  suits,  costs,  expenses,  and disbursements
     (including, without limitation,  reasonable fees and disbursements of legal
     counsel  and costs of  investigation),  provided  that  Expenses  shall not
     include any Taxes.

          "EXPIRY DATE" means November 1, 1999, initially,  or any date to which
     the Expiry Date is extended pursuant to Section 2.10.

          "FACILITY OFFICE" means the office of the Liquidity Provider presently
     located  at New  York,  New York,  or such  other  office as the  Liquidity
     Provider  from time to time shall  notify  the  Borrower  as its  "Facility
     Office"  hereunder;  PROVIDED that the Liquidity  Provider shall not change




     its  Facility  Office to a Facility  Office  outside  the United  States of
     America except in accordance with Section 3.01, 3.02 or 3.03 hereof.

          "FINAL ADVANCE" means an Advance made pursuant to Section 2.02(d).

          "GUARANTOR"  has the meaning  assigned to such term in the preliminary
     statements of this Agreement.

          "GUARANTEE  AGREEMENT"  has the  meaning  assigned to such term in the
     preliminary statements of this Agreement.

          "INTERCREDITOR  AGREEMENT" means the Intercreditor Agreement dated the
     date hereof,  among the  Trustees,  the Liquidity  Provider,  the liquidity
     provider under each Liquidity  Facility (other than this Agreement) and the
     Subordination Agent, as the same may be amended,  supplemented or otherwise
     modified from time to time in accordance with its terms.

          "INTEREST ADVANCE" means an Advance made pursuant to Section 2.02(a).

          "INTEREST  PERIOD" means,  with respect to any LIBOR Advance,  each of
     the following periods:

          (i)  the period  beginning on the third Business Day following  either
               (x) the Liquidity  Provider's  receipt of the Notice of Borrowing
               for such LIBOR  Advance or (y) the  withdrawal  of funds from the
               Class  B Cash  Collateral  Account  for  the  purpose  of  paying
               interest on the Class B Certificates  as  contemplated by Section
               2.06(a)  hereof and, in either  case,  ending on the next Regular
               Distribution Date; and

          (ii) each  subsequent  period  commencing  on  the  last  day  of  the
               immediately  preceding  Interest  Period  and  ending on the next
               Regular Distribution Date;

     PROVIDED,  HOWEVER,  that if (x) the Final Advance shall have been made, or
     (y) other  outstanding  Advances  shall have been  converted into the Final
     Advance, then the Interest Periods shall be successive periods of one month
     beginning on the third  Business Day  following  the  Liquidity  Provider's
     receipt of the Notice of Borrowing  for such Final  Advance (in the case of
     clause  (x)  above)  or  the  Regular   Distribution  Date  following  such
     conversion (in the case of clause (y) above).

          "LIBOR ADVANCE" means an Advance bearing interest at a rate based upon
     the LIBOR Rate.

          "LIBOR RATE" means, with respect to any Interest Period,

          (i)  the rate per  annum  appearing  on  display  page  3750  (British
               Bankers  Association-LIBOR)  of the Dow Jones Markets Service (or
               any successor or substitute therefor) at approximately 11:00 A.M.




               (London  time) two  Business  Days  before  the first day of such
               Interest Period,  as the rate for dollar deposits with a maturity
               comparable to such Interest Period, or

          (ii) if the  rate  calculated  pursuant  to  clause  (i)  above is not
               available,  the average (rounded  upwards,  if necessary,  to the
               next  1/16 of 1%) of the rates  per  annum at which  deposits  in
               dollars  are offered for the  relevant  Interest  Period by three
               banks of recognized  standing selected by the Liquidity  Provider
               in the  London  interbank  market  at  approximately  11:00  A.M.
               (London  time) two  Business  Days  before  the first day of such
               Interest Period in an amount approximately equal to the principal
               amount of the LIBOR Advance to which such  Interest  Period is to
               apply and for a period comparable to such Interest Period.

          "LIQUIDITY  EVENT OF DEFAULT"  means the  occurrence of either (a) the
     Acceleration  of all of the Equipment Notes (provided that, with respect to
     the period prior to the Delivery  Period Expiry Date,  such Equipment Notes
     have an aggregate  outstanding principal balance in excess of $300,000,000)
     or (b) a Continental Bankruptcy Event.

          "LIQUIDITY  INDEMNITEE"  means (i) the  Liquidity  Provider,  (ii) the
     Guarantor, (iii) the respective directors,  officers,  employees and agents
     of the Liquidity  Provider and the  Guarantor,  and (iv) the successors and
     permitted  assigns of the persons  described in clauses (i) through  (iii),
     inclusive.

          "LIQUIDITY  PROVIDER"  has the  meaning  assigned  to such term in the
     recital of parties to this Agreement.

          "MAXIMUM  AVAILABLE  COMMITMENT"  shall  mean,  subject to the proviso
     contained  in the  third  sentence  of  Section  2.02(a),  at any  time  of
     determination,  (a) the  Maximum  Commitment  at  such  time  LESS  (b) the
     aggregate  amount  of each  Interest  Advance  outstanding  at  such  time;
     PROVIDED that following a Provider Advance or a Final Advance,  the Maximum
     Available Commitment shall be zero.

          "MAXIMUM  COMMITMENT" means initially  $6,233,444,  as the same may be
     reduced from time to time in accordance with Section 2.04(a).

          "NON-EXTENSION  ADVANCE"  means an Advance  made  pursuant  to Section
     2.02(b).

          "NOTICE OF BORROWING" has the meaning specified in Section 2.02(e).

          "NOTICE OF REPLACEMENT  SUBORDINATION AGENT" has the meaning specified
     in Section 3.08.

          "PERFORMING NOTE DEFICIENCY"  means any time that less than 65% of the
     then  aggregate  outstanding  principal  amount of all Equipment  Notes are
     Performing Equipment Notes.





          "PROSPECTUS  SUPPLEMENT" means the Prospectus Supplement dated October
     21, 1998 relating to the Certificates, as such Prospectus Supplement may be
     amended or supplemented.

          "PROVIDER  ADVANCE"  means  a  Downgrade  Advance  or a  Non-Extension
     Advance.

          "REGULATORY  CHANGE" has the meaning  assigned to such term in Section
     3.01.

          "REPLENISHMENT  AMOUNT"  has the  meaning  assigned  to  such  term in
     Section 2.06(b).

          "REQUIRED  AMOUNT" means, for any day, the sum of the aggregate amount
     of interest,  calculated at the rate per annum equal to the Stated Interest
     Rate for the Class B  Certificates,  that  would be  payable on the Class B
     Certificates   on  each  of  the  three   successive   semiannual   Regular
     Distribution  Dates  immediately  following  such day or,  if such day is a
     Regular  Distribution  Date, on such day and the  succeeding two semiannual
     Regular  Distribution  Dates,  in each case  calculated on the basis of the
     Pool Balance of the Class B Certificates  on such day and without regard to
     expected future payments of principal on the Class B Certificates.

          "SUCCESSOR  TRUST"  means  Continental  Airlines  Pass  Through  Trust
     1998-3B-S.

          "TERMINATION  DATE" means the earliest to occur of the following:  (i)
     the  Expiry  Date;  (ii) the date on which  the  Borrower  delivers  to the
     Liquidity  Provider a certificate,  signed by a Responsible  Officer of the
     Borrower, certifying that all of the Class B Certificates have been paid in
     full (or provision  has been made for such payment in  accordance  with the
     Intercreditor  Agreement  and the Trust  Agreements)  or are  otherwise  no
     longer entitled to the benefits of this Agreement;  (iii) the date on which
     the Borrower delivers to the Liquidity Provider a certificate,  signed by a
     Responsible  Officer  of  the  Borrower,   certifying  that  a  Replacement
     Liquidity Facility has been substituted for this Agreement in full pursuant
     to Section 3.6(e) of the Intercreditor  Agreement;  (iv) the fifth Business
     Day following the receipt by the Borrower of a Termination  Notice from the
     Liquidity  Provider  pursuant to Section 6.01  hereof;  and (v) the date on
     which no Advance is or may (including by reason of  reinstatement as herein
     provided) become available for a Borrowing hereunder.

          "TERMINATION NOTICE" means the Notice of Termination  substantially in
     the form of Annex V to this Agreement.

          "TRANSFEREE" has the meaning assigned to such term in Section 7.08(b).

          "UNAPPLIED  DOWNGRADE  ADVANCE" means any Downgrade Advance other than
     an Applied Downgrade Advance.

          "UNAPPLIED  NON-EXTENSION  ADVANCE"  means any  Non-Extension  Advance
     other than an Applied Non-Extension Advance.




          "UNAPPLIED  PROVIDER ADVANCE" means any Provider Advance other than an
     Applied Provider Advance.

          "UNPAID  ADVANCE"  has the  meaning  assigned  to such term in Section
     2.05.

         (b) TERMS DEFINED IN THE INTERCREDITOR  AGREEMENT.  For all purposes of
this Agreement,  the following terms shall have the respective meanings assigned
to such terms in the Intercreditor Agreement:

     "ACCELERATION",   "CERTIFICATES",  "CLASS  A-1  CERTIFICATES",  "CLASS  A-2
     CERTIFICATES",  "CLASS B CASH COLLATERAL ACCOUNT",  "CLASS B CERTIFICATES",
     "CLASS B  CERTIFICATEHOLDERS",  "CLASS B TRUST", "CLASS B TRUST AGREEMENT",
     "CLASS B TRUSTEE", "CLASS B CERTIFICATES", "CLASS C-1 CERTIFICATES", "CLASS
     C-2 CERTIFICATES",  "CLOSING DATE", "CONTINENTAL",  "CONTINENTAL BANKRUPTCY
     EVENT",  "CONTROLLING  PARTY",  "CORPORATE TRUST OFFICE",  "DELIVERY PERIOD
     EXPIRY  DATE",  "DISTRIBUTION  DATE",  "DOWNGRADED  FACILITY",   "EQUIPMENT
     NOTES",  "FEE  LETTER",   "FINAL  LEGAL  DISTRIBUTION   DATE",   "FINANCING
     AGREEMENT",  "Indenture",  "INTEREST PAYMENT DATE",  "INVESTMENT EARNINGS",
     "LEASED AIRCRAFT",  "LIQUIDITY FACILITY",  "LIQUIDITY  OBLIGATIONS",  "LOAN
     TRUSTEE",  "MOODY'S",  "NON-EXTENDED FACILITY",  "NOTE PURCHASE AGREEMENT",
     "OPERATIVE  AGREEMENTS",   "OWNED  AIRCRAFT",   "PARTICIPATION  AGREEMENT",
     "PERFORMING  EQUIPMENT NOTE",  "PERSON",  "POOL BALANCE",  "RATING AGENCY",
     "RATINGS CONFIRMATION", "REGULAR DISTRIBUTION DATE", "REPLACEMENT LIQUIDITY
     FACILITY",  "RESPONSIBLE OFFICER",  "SCHEDULED PAYMENT", "SPECIAL PAYMENT",
     "STANDARD  &  POOR'S",  "STATED  INTEREST  RATE",   "SUBORDINATION  AGENT",
     "TAXES",  "THRESHOLD Rating",  "TRANSFER",  "TRUST AGREEMENTS",  "TRUSTEE",
     "UNDERWRITERS", "UNDERWRITING AGREEMENT", and "WRITTEN NOTICE".


                                   ARTICLE II

                       AMOUNT AND TERMS OF THE COMMITMENT

         Section 2.01. THE ADVANCES.  The Liquidity  Provider hereby irrevocably
agrees,  on the terms and conditions  hereinafter set forth, to make Advances to
the  Borrower  from time to time on any  Business Day during the period from the
Effective  Date until 12:00 Noon (New York City time) on the Expiry Date (unless
the  obligations  of the  Liquidity  Provider  shall be  earlier  terminated  in
accordance with the terms of Section 2.04(b)) in an aggregate amount at any time
outstanding not to exceed the Maximum Commitment.

         Section 2.02. MAKING THE ADVANCES.  (a) Interest Advances shall be made
in one or more  Borrowings by delivery to the Liquidity  Provider of one or more
written and completed  Notices of Borrowing in substantially the form of Annex I
attached hereto,  signed by a Responsible Officer of the Borrower,  in an amount
not  exceeding the Maximum  Available  Commitment at such time and shall be used
solely for the payment when due of interest on the Class B  Certificates  at the
Stated  Interest  Rate  therefor  in  accordance  with  Section  3.6(a)  of  the
Intercreditor   Agreement.   Each   Interest   Advance  made   hereunder   shall
automatically  reduce the Maximum Available  Commitment and the amount available




to be borrowed  hereunder by subsequent  Advances by the amount of such Interest
Advance  (subject  to  reinstatement  as provided  in the next  sentence).  Upon
repayment  to the  Liquidity  Provider  in full of the  amount  of any  Interest
Advance made pursuant to this Section  2.02(a),  together with accrued  interest
thereon  (as  provided  herein),  the  Maximum  Available  Commitment  shall  be
reinstated by the amount of such repaid Interest Advance,  but not to exceed the
Maximum Commitment;  PROVIDED,  HOWEVER,  that the Maximum Available  Commitment
shall not be so reinstated at any time if (i) a Liquidity Event of Default shall
have occurred and be continuing and (ii) there is a Performing Note Deficiency.

         (b) A Non-Extension Advance shall be made in a single Borrowing if this
Agreement is not extended in accordance with Section 3.6(d) of the Intercreditor
Agreement  (unless a Replacement  Liquidity  Facility to replace this  Agreement
shall have been delivered to the Borrower as contemplated by said Section 3.6(d)
within the time period  specified in such  Section) by delivery to the Liquidity
Provider of a written and  completed  Notice of Borrowing in  substantially  the
form of Annex  II  attached  hereto,  signed  by a  Responsible  Officer  of the
Borrower,  in an amount equal to the Maximum Available  Commitment at such time,
and shall be used to fund the Class B Cash Collateral Account in accordance with
said Section 3.6(d) and Section 3.6(f) of the Intercreditor Agreement.

         (c) A  Downgrade  Advance  shall be made in a single  Borrowing  upon a
downgrading of the Guarantor's short-term unsecured debt rating issued by either
Rating Agency below the applicable  Threshold Rating or the Guarantee  Agreement
ceasing to be in full force and effect or becoming  invalid or  unenforceable or
the  Guarantor  denying its  liability  thereunder  (as  provided for in Section
3.6(c) of the Intercreditor  Agreement) unless a Replacement  Liquidity Facility
to replace this Agreement shall have been  previously  delivered to the Borrower
in accordance with said Section 3.6(c), by delivery to the Liquidity Provider of
a written and completed Notice of Borrowing in  substantially  the form of Annex
III attached  hereto,  signed by a Responsible  Officer of the  Borrower,  in an
amount equal to the Maximum Available Commitment at such time, and shall be used
to fund the Class B Cash  Collateral  Account in  accordance  with said  Section
3.6(c) and Section 3.6(f) of the Intercreditor Agreement.

         (d) A Final  Advance  shall  be made in a  single  Borrowing  upon  the
receipt by the  Borrower of a  Termination  Notice from the  Liquidity  Provider
pursuant  to Section  6.01 hereof by  delivery  to the  Liquidity  Provider of a
written and completed Notice of Borrowing in substantially  the form of Annex IV
attached hereto,  signed by a Responsible Officer of the Borrower,  in an amount
equal to the Maximum  Available  Commitment  at such time,  and shall be used to
fund the Class B Cash  Collateral  Account (in accordance with Section 3.6(i) of
the Intercreditor Agreement) and Section 3.6(f) of the Intercreditor Agreement.

         (e) Each  Borrowing  shall be made on notice in  writing  (a "NOTICE OF
BORROWING")  in  substantially  the form required by Section  2.02(a),  2.02(b),
2.02(c) or 2.02(d),  as the case may be, given by the Borrower to the  Liquidity
Provider.  If a Notice of  Borrowing  is delivered by the Borrower in respect of
any  Borrowing no later than 1:00 p.m.  (New York City time) on a Business  Day,
upon  satisfaction  of the  conditions  precedent set forth in Section 4.02 with
respect to a requested Borrowing, the Liquidity Provider shall make available to
the Borrower,  in accordance with its payment  instructions,  the amount of such




Borrowing in U.S. dollars and immediately available funds, before 4:00 p.m. (New
York City time) on such Business Day or on such later  Business Day specified in
such Notice of Borrowing.  If a Notice of Borrowing is delivered by the Borrower
in respect of any  Borrowing  after 1:00 p.m. (New York City time) on a Business
Day, upon  satisfaction  of the  conditions  precedent set forth in Section 4.02
with  respect  to a  requested  Borrowing,  the  Liquidity  Provider  shall make
available to the Borrower,  in  accordance  with its payment  instructions,  the
amount of such  Borrowing in U.S.  dollars and in immediately  available  funds,
before 12:00 Noon (New York City time) on the first  Business Day next following
the day of receipt of such Notice of  Borrowing  or on such later  Business  Day
specified by the Borrower in such Notice of Borrowing. Payments of proceeds of a
Borrowing  shall be made by wire transfer of immediately  available funds to the
Borrower in  accordance  with such wire  transfer  instructions  as the Borrower
shall furnish from time to time to the Liquidity Provider for such purpose. Each
Notice of Borrowing shall be irrevocable and binding on the Borrower.

         (f) Upon the making of any  Advance  requested  pursuant to a Notice of
Borrowing, in accordance with the Borrower's payment instructions, the Liquidity
Provider shall be fully  discharged of its obligation  hereunder with respect to
such Notice of Borrowing,  and the Liquidity  Provider  shall not  thereafter be
obligated  to make any further  Advances  hereunder in respect of such Notice of
Borrowing to the Borrower or to any other Person. Notwithstanding the provisions
of  Section  2.02(e),  if the  Liquidity  Provider  makes an  Advance  requested
pursuant to a Notice of Borrowing  before 12:00 noon (New York City time) on the
second Business Day after the date of payment specified in said Section 2.02(e),
the Liquidity  Provider shall have fully  discharged its  obligations  hereunder
with  respect to such Advance and shall not be in default  hereunder.  Following
the making of any Advance pursuant to Section 2.02(b), (c) or (d) hereof to fund
the Class B Cash  Collateral  Account,  the  Liquidity  Provider  shall  have no
interest in or rights to the Class B Cash  Collateral  Account,  such Advance or
any other  amounts  from time to time on deposit in the Class B Cash  Collateral
Account;  PROVIDED that the foregoing shall not affect or impair the obligations
of the  Subordination  Agent to make the  distributions  contemplated by Section
3.6(e) or (f) of the Intercreditor Agreement. By paying to the Borrower proceeds
of Advances  requested by the Borrower in accordance with the provisions of this
Agreement,  the Liquidity Provider makes no representation as to, and assumes no
responsibility for, the correctness or sufficiency for any purpose of the amount
of the Advances so made and requested.

         Section  2.03.  FEES.  The  Borrower  agrees  to pay  to the  Liquidity
Provider the fees set forth in the Fee Letter applicable to this Agreement.

         Section 2.04. REDUCTION OR TERMINATION OF THE MAXIMUM COMMITMENT.

         (a)  AUTOMATIC  REDUCTION.  Promptly  following  each date on which the
Required Amount is reduced as a result of a reduction in the Pool Balance of the
Class B Certificates or otherwise, the Maximum Commitment shall automatically be
reduced to an amount equal to such reduced Required Amount (as calculated by the
Borrower). The Borrower shall give notice of any such automatic reduction of the
Maximum  Commitment to the Liquidity  Provider within two Business Days thereof.
The failure by the  Borrower  to furnish  any such notice  shall not affect such
automatic reduction of the Maximum Commitment.





         (b)  TERMINATION.  Upon the  making of any  Provider  Advance  or Final
Advance  hereunder or the occurrence of the Termination  Date, the obligation of
the Liquidity  Provider to make further Advances  hereunder shall  automatically
and irrevocably terminate, and the Borrower shall not be entitled to request any
further Borrowing hereunder.

         Section  2.05.  REPAYMENTS OF INTEREST  ADVANCES OR THE FINAL  ADVANCE.
Subject to Sections  2.06,  2.07 and 2.09 hereof,  the Borrower  hereby  agrees,
without notice of an Advance or demand for repayment from the Liquidity Provider
(which notice and demand are hereby waived by the Borrower), to pay, or to cause
to be paid,  to the  Liquidity  Provider  on each  date on which  the  Liquidity
Provider shall make an Interest Advance or the Final Advance, an amount equal to
(a) the amount of such Advance (any such Advance,  until repaid,  is referred to
herein as an "UNPAID  ADVANCE"),  plus (b)  interest  on the amount of each such
Unpaid  Advance as provided in Section  3.07  hereof;  PROVIDED  that if (i) the
Liquidity Provider shall make a Provider Advance at any time after making one or
more Interest  Advances which shall not have been repaid in accordance with this
Section 2.05 or (ii) this Liquidity Facility shall become a Downgraded  Facility
or Non-Extended  Facility at any time when  unreimbursed  Interest Advances have
reduced the Maximum  Available  Commitment to zero, then such Interest  Advances
shall  cease to  constitute  Unpaid  Advances  and  shall be deemed to have been
changed into an Applied Downgrade Advance or an Applied  Non-Extension  Advance,
as the case may be,  for all  purposes  of this  Agreement  (including,  without
limitation,  for the  purpose  of  determining  when such  Interest  Advance  is
required to be repaid to the Liquidity  Provider in accordance with Section 2.06
and for the  purposes  of  Section  2.06(b)).  The  Borrower  and the  Liquidity
Provider  agree that the  repayment in full of each  Interest  Advance and Final
Advance on the date such  Advance is made is  intended  to be a  contemporaneous
exchange for new value given to the Borrower by the Liquidity Provider.

         Section 2.06.  REPAYMENTS OF PROVIDER  ADVANCES.  (a) Amounts  advanced
hereunder  in respect of a Provider  Advance  shall be  deposited in the Class B
Cash Collateral Account, invested and withdrawn from the Class B Cash Collateral
Account  as set  forth  in  Sections  3.6(c),  (d) and (f) of the  Intercreditor
Agreement. The Borrower agrees to pay to the Liquidity Provider, on each Regular
Distribution Date,  commencing on the first Regular  Distribution Date after the
making of a  Provider  Advance,  interest  on the  principal  amount of any such
Provider Advance as provided in Section 3.07; PROVIDED, HOWEVER, that amounts in
respect of a Provider Advance withdrawn from the Class B Cash Collateral Account
for the purpose of paying  interest on the Class B  Certificates  in  accordance
with  Section  3.6(f) of the  Intercreditor  Agreement  (the  amount of any such
withdrawal being (y) in the case of a Downgrade  Advance,  an "APPLIED DOWNGRADE
ADVANCE"  and  (z)  in  the  case  of  a  Non-Extension   Advance,  an  "APPLIED
NON-EXTENSION  ADVANCE" and,  together  with an Applied  Downgrade  Advance,  an
"APPLIED  PROVIDER  ADVANCE") shall  thereafter  (subject to Section 2.06(b)) be
treated as an Interest  Advance under this Agreement for purposes of determining
the Applicable  Liquidity Rate for interest payable thereon;  PROVIDED  FURTHER,
HOWEVER,  that if,  following  the making of a Provider  Advance,  the Liquidity
Provider delivers a Termination  Notice to the Borrower pursuant to Section 6.01
hereof,  such Provider  Advance  shall  thereafter be treated as a Final Advance
under this Agreement for purposes of determining  the Applicable  Liquidity Rate
for  interest  payable  thereon.  Subject  to  Sections  2.07 and  2.09  hereof,
immediately  upon the withdrawal of any amounts from the Class B Cash Collateral
Account on account of a reduction in the  Required  Amount,  the Borrower  shall



repay  to the  Liquidity  Provider  a  portion  of the  Provider  Advances  in a
principal amount equal to such reduction,  plus interest on the principal amount
prepaid as provided in Section 3.07 hereof.

         (b) At any  time  when an  Applied  Provider  Advance  (or any  portion
thereof) is outstanding, upon the deposit in the Class B Cash Collateral Account
of any amount pursuant to clause "THIRD" of Section 2.4(b) of the  Intercreditor
Agreement,  clause  "THIRD" of Section  3.2 of the  Intercreditor  Agreement  or
clause "FOURTH" of Section 3.3 of the  Intercreditor  Agreement (any such amount
being a  "REPLENISHMENT  AMOUNT") for the purpose of  replenishing or increasing
the balance  thereof up to the Required  Amount at such time,  (i) the aggregate
outstanding  principal amount of all Applied Provider  Advances (and of Provider
Advances  treated  as an  Interest  Advance  for  purposes  of  determining  the
Applicable  Liquidity Rate for interest  payable thereon) shall be automatically
reduced  by the  amount  of such  Replenishment  Amount  and (ii) the  aggregate
outstanding  principal  amount  of all  Unapplied  Provider  Advances  shall  be
automatically increased by the amount of such Replenishment Amount.

         (c)  Upon  the  provision  of  a  Replacement   Liquidity  Facility  in
replacement  of  this  Agreement  in  accordance  with  Section  3.6(e)  of  the
Intercreditor  Agreement,  amounts  remaining  on  deposit  in the  Class B Cash
Collateral  Account after giving effect to any Applied  Provider  Advance on the
date of such replacement shall be reimbursed to the Liquidity Provider, but only
to the extent  such  amounts  are  necessary  to repay in full to the  Liquidity
Provider all amounts owing to it hereunder.

         Section   2.07.   PAYMENTS  TO  THE   LIQUIDITY   PROVIDER   UNDER  THE
INTERCREDITOR  AGREEMENT.  In order to provide for payment or  repayment  to the
Liquidity  Provider  of  any  amounts  hereunder,  the  Intercreditor  Agreement
provides  that amounts  available  and referred to in Articles II and III of the
Intercreditor  Agreement,  to  the  extent  payable  to the  Liquidity  Provider
pursuant  to  the  terms  of the  Intercreditor  Agreement  (including,  without
limitation, Section 3.6(f) of the Intercreditor Agreement), shall be paid to the
Liquidity Provider in accordance with the terms thereof.  Amounts so paid to the
Liquidity  Provider  shall be applied by the  Liquidity  Provider  to  Liquidity
Obligations then due and payable in accordance with the Intercreditor  Agreement
or, if not provided for in the Intercreditor  Agreement,  then in such manner as
the Liquidity Provider shall deem appropriate.

         Section 2.08.  BOOK ENTRIES.  The Liquidity  Provider shall maintain in
accordance  with its usual  practice  an  account  or  accounts  evidencing  the
indebtedness of the Borrower  resulting from Advances made from time to time and
the amounts of principal  and interest  payable  hereunder and paid from time to
time in respect thereof;  PROVIDED,  HOWEVER,  that the failure by the Liquidity
Provider to maintain such account or accounts  shall not affect the  obligations
of the Borrower in respect of Advances.

         Section 2.09.  PAYMENTS FROM  AVAILABLE  FUNDS ONLY. All payments to be
made by the Borrower  under this  Agreement  shall be made only from the amounts
that constitute  Scheduled Payments,  Special Payments or payments under Section
8.1 of the  Participation  Agreements with respect to Owned  Aircraft,  payments
under  Section  9.1 of the  Participation  Agreements  with  respect  to  Leased
Aircraft  and Section 6 of the Note  Purchase  Agreement  and only to the extent




that the Borrower shall have sufficient  income or proceeds  therefrom to enable
the Borrower to make payments in  accordance  with the terms hereof after giving
effect to the  priority of payments  provisions  set forth in the  Intercreditor
Agreement.  The  Liquidity  Provider  agrees  that it will  look  solely to such
amounts  to the extent  available  for  distribution  to it as  provided  in the
Intercreditor  Agreement  and  this  Agreement  and that  the  Borrower,  in its
individual  capacity,  is not personally liable to it for any amounts payable or
liability under this Agreement  except as expressly  provided in this Agreement,
the Intercreditor Agreement or any Participation  Agreement.  Amounts on deposit
in the Class B Cash  Collateral  Account  shall be  available to the Borrower to
make  payments  under this  Agreement  only to the  extent and for the  purposes
expressly contemplated in Section 3.6(f) of the Intercreditor Agreement.

         Section 2.10. EXTENSION OF THE EXPIRY DATE;  NON-EXTENSION ADVANCE. The
Expiry Date shall be automatically extended,  effective on the 25th day prior to
each  Expiry  Date  (unless  such Expiry Date is on or after the date that is 15
days after the Final Legal Distribution Date for the Class B Certificates),  for
a period of 364 days after such  Expiry  Date  (unless  the  obligations  of the
Liquidity  Provider are earlier terminated in accordance with the terms hereof),
without the  necessity of any act on the part of the  Borrower or the  Liquidity
Provider,  unless the Liquidity Provider shall advise the Borrower prior to such
25th day that it does not agree to such  extension of such Expiry Date, in which
event (and if the Liquidity  Provider shall not have been replaced in accordance
with Section  3.6(e) of the  Intercreditor  Agreement),  the  Borrower  shall be
entitled on and after such 25th day (but prior to such Expiry Date) to request a
Non-Extension  Advance in  accordance  with Section  2.02(b)  hereof and Section
3.6(d) of the Intercreditor Agreement.

                                   ARTICLE III

                           OBLIGATIONS OF THE BORROWER

         Section 3.01.  INCREASED COSTS. The Borrower shall pay to the Liquidity
Provider  from time to time such amounts as may be necessary to  compensate  the
Liquidity  Provider for any increased  costs incurred by the Liquidity  Provider
which are attributable to its making or maintaining any LIBOR Advances hereunder
or its obligation to make any such Advances  hereunder,  or any reduction in any
amount  receivable  by  the  Liquidity  Provider  under  this  Agreement  or the
Intercreditor Agreement in respect of any such Advances or such obligation (such
increases in costs and  reductions  in amounts  receivable  being herein  called
"ADDITIONAL COSTS"),  resulting from any change after the date of this Agreement
in U.S. federal,  state,  municipal,  or foreign laws or regulations  (including
Regulation D of the Board of Governors of the Federal  Reserve  System),  or the
adoption  or making  after the date of this  Agreement  of any  interpretations,
directives, or requirements applying to a class of banks including the Liquidity
Provider  under any U.S.  federal,  state,  municipal,  or any  foreign  laws or
regulations  (whether or not having the force of law) by any court, central bank
or monetary authority charged with the interpretation or administration  thereof
(a "REGULATORY CHANGE"), which: (1) changes the basis of taxation of any amounts
payable to the Liquidity  Provider  under this  Agreement in respect of any such
Advances  (other than Excluded  Taxes);  or (2) imposes or modifies any reserve,
special  deposit,  compulsory  loan  or  similar  requirements  relating  to any
extensions of credit or other assets of, or any deposits with other  liabilities




of, the Liquidity Provider (including any such Advances or any deposits referred
to in the  definition  of LIBOR  Rate or  related  definitions).  The  Liquidity
Provider agrees to use reasonable efforts  (consistent with applicable legal and
regulatory  restrictions)  to change the  jurisdiction of its Facility Office if
making such change would avoid the need for, or reduce the amount of, any amount
payable  under this  Section  that may  thereafter  accrue and would not, in the
reasonable judgment of the Liquidity Provider,  be otherwise  disadvantageous to
the Liquidity Provider.

         The Liquidity  Provider will notify the Borrower of any event occurring
after the date of this  Agreement  that will entitle the  Liquidity  Provider to
compensation  pursuant to this Section 3.01 as promptly as practicable  after it
obtains  knowledge  thereof and determines to request such  compensation,  which
notice shall describe in reasonable  detail the  calculation of the amounts owed
under this Section.  Determinations  by the  Liquidity  Provider for purposes of
this Section 3.01 of the effect of any Regulatory  Change on its costs of making
or maintaining  Advances or on amounts  receivable by it in respect of Advances,
and of the additional  amounts required to compensate the Liquidity  Provider in
respect of any  Additional  Costs,  shall be prima facie  evidence of the amount
owed under this Section.

         Notwithstanding  the preceding two paragraphs,  the Liquidity  Provider
and the  Subordination  Agent agree that the initial  Liquidity  Provider (i.e.,
Morgan Stanley Capital Services,  Inc.) shall not be entitled to the benefits of
the preceding  two  paragraphs,  PROVIDED,  however,  any permitted  assignee or
participant of the initial  Liquidity  Provider which is a bank organized  under
the laws of the United  States or any State  thereof  shall be  entitled  to the
benefits of the preceding two paragraphs (subject,  in the case of any permitted
participant, to the limitation set forth in Section 7.08 hereof).

         Section 3.02.  CAPITAL  ADEQUACY.  If (1) the adoption,  after the date
hereof, of any applicable governmental law, rule or regulation regarding capital
adequacy,  (2) any  change,  after the date  hereof,  in the  interpretation  or
administration  of any such law, rule or regulation by any central bank or other
governmental authority charged with the interpretation or administration thereof
or (3) compliance by the Liquidity  Provider or any corporation  controlling the
Liquidity  Provider  with  any  applicable   guideline  or  request  of  general
applicability,  issued  after  the date  hereof,  by any  central  bank or other
governmental authority (whether or not having the force of law) that constitutes
a change of the nature  described  in clause (2), has the effect of requiring an
increase in the amount of capital  required to be  maintained  by the  Liquidity
Provider  or any  corporation  controlling  the  Liquidity  Provider,  and  such
increase is based upon the Liquidity Provider's  obligations hereunder and other
similar obligations,  the Borrower shall pay to the Liquidity Provider from time
to time such  additional  amount or amounts as are necessary to  compensate  the
Liquidity  Provider  for such  portion of such  increase as shall be  reasonably
allocable to the Liquidity Provider's obligations to the Borrower hereunder. The
Liquidity Provider agrees to use reasonable efforts  (consistent with applicable
legal and regulatory  restrictions)  to change the  jurisdiction of its Facility
Office if making such change  would avoid the need for, or reduce the amount of,
any amount payable under this Section that may thereafter  accrue and would not,
in the reasonable  judgment of the Liquidity Provider,  be otherwise  materially
disadvantageous to the Liquidity Provider.





         The Liquidity  Provider will notify the Borrower of any event occurring
after the date of this  Agreement  that will entitle the  Liquidity  Provider to
compensation  pursuant to this Section 3.02 as promptly as practicable  after it
obtains  knowledge  thereof and determines to request such  compensation,  which
notice shall describe in reasonable  detail the  calculation of the amounts owed
under this Section.  Determinations  by the  Liquidity  Provider for purposes of
this  Section  3.02 of the  effect of any  increase  in the  amount  of  capital
required to be maintained by the Liquidity  Provider and of the amount allocable
to the Liquidity Provider's obligations to the Borrower hereunder shall be prima
facie evidence of the amounts owed under this Section.

         Notwithstanding  the preceding two paragraphs,  the Liquidity  Provider
and the  Subordination  Agent agree that the initial  Liquidity  Provider (i.e.,
Morgan Stanley Capital Services,  Inc.) shall not be entitled to the benefits of
the preceding  two  paragraphs,  PROVIDED,  however,  any permitted  assignee or
participant of the initial  Liquidity  Provider which is a bank organized  under
the laws of the United  States or any State  thereof  shall be  entitled  to the
benefits of the preceding two paragraphs (subject,  in the case of any permitted
participant, to the limitation set forth in Section 7.08 hereof).

         Section  3.03.  PAYMENTS FREE OF  DEDUCTIONS.  All payments made by the
Borrower  under  this  Agreement  shall be made free and clear of,  and  without
reduction  for or on account  of, any  present or future  stamp or other  taxes,
levies, imposts, duties, charges, fees, deductions,  withholdings,  restrictions
or  conditions  of any  nature  whatsoever  now or  hereafter  imposed,  levied,
collected,  withheld or assessed,  excluding  Excluded Taxes (such  non-excluded
taxes  being  referred to herein,  collectively,  as  "NON-EXCLUDED  TAXES" and,
individually,  as a "NON-EXCLUDED  TAX"). If any Non-Excluded Taxes are required
to be withheld  from any amounts  payable to the Liquidity  Provider  under this
Agreement,  the amounts so payable to the Liquidity  Provider shall be increased
to the extent necessary to yield to the Liquidity Provider (after payment of all
Non-Excluded  Taxes)  interest  or any other  such  amounts  payable  under this
Agreement  at the  rates or in the  amounts  specified  in this  Agreement.  The
Liquidity  Provider  agrees  to use  reasonable  efforts  (consistent  with  its
internal   policy  and  legal  and  regulatory   restrictions)   to  change  the
jurisdiction  of its Facility  Office if making such change would avoid the need
for, or reduce the amount of, any such  additional  amounts that may  thereafter
accrue and would not, in the reasonable judgment of the Liquidity  Provider,  be
otherwise  disadvantageous to the Liquidity Provider. From time to time upon the
reasonable  request of the Borrower,  if the Liquidity Provider is not organized
under the laws of the United States or any State thereof, the Liquidity Provider
agrees to provide to the Borrower two original  Internal  Revenue  Service Forms
1001 or 4224, as  appropriate,  or any successor or other form prescribed by the
Internal Revenue Service,  certifying that the Liquidity Provider is exempt from
or  entitled  to a reduced  rate of United  States  withholding  tax on payments
pursuant to this Agreement.

         Section  3.04.  PAYMENTS.  The Borrower  shall make or cause to be made
each payment to the Liquidity  Provider  under this Agreement so as to cause the
same to be received by the Liquidity Provider not later than 1:00 P.M. (New York
City time) on the day when due.  The  Borrower  shall make all such  payments in
lawful  money of the United  States of  America,  to the  Liquidity  Provider in
immediately  available funds, by wire transfer to Citibank,  N.A., New York, New
York, ABA  #021000089,  Account Name:  Morgan Stanley  Capital  Services,  Inc.,
Account No. 4072-4601, Account Reference: Continental Airlines, Inc. 1998-3B.





         Section 3.05.  COMPUTATIONS.  All computations of interest based on the
Base Rate  shall be made on the basis of a year of 365 or 366 days,  as the case
may be, and all  computations  of interest based on the LIBOR Rate shall be made
on the basis of a year of 360 days,  in each case for the actual  number of days
(including the first day but excluding the last day) occurring in the period for
which such interest is payable.

         Section 3.06. PAYMENT ON NON-BUSINESS DAYS.  Whenever any payment to be
made  hereunder  shall be stated to be due on a day other than a  Business  Day,
such payment shall be made on the next succeeding Business Day and no additional
interest shall be due as a result (and if so made,  shall be deemed to have been
made when  due).  If any  payment in  respect  of  interest  on an Advance is so
deferred to the next succeeding  Business Day, such deferral shall not delay the
commencement  of the next Interest Period for such Advance (if such Advance is a
LIBOR  Advance) or reduce the number of days for which  interest will be payable
on such Advance on the next interest payment date for such Advance.

         Section 3.07. INTEREST. (a) Subject to Section 2.09, the Borrower shall
pay, or shall cause to be paid, without duplication,  interest on (i) the unpaid
principal  amount of each  Advance from and  including  the date of such Advance
(or, in the case of an Applied Provider Advance,  from and including the date on
which the amount thereof was withdrawn from the Class B Cash Collateral  Account
to pay  interest on the Class B  Certificates)  to but  excluding  the date such
principal  amount shall be paid in full (or, in the case of an Applied  Provider
Advance,  the  date on  which  the  Class B Cash  Collateral  Account  is  fully
replenished  in respect of such Advance) and (ii) any other amount due hereunder
(whether  fees,  commissions,  expenses  or  other  amounts  or,  to the  extent
permitted by law, installments of interest on Advances or any such other amount)
which is not paid when due  (whether  at stated  maturity,  by  acceleration  or
otherwise)  from and  including  the due date thereof to but  excluding the date
such amount is paid in full, in each such case,  at a fluctuating  interest rate
per annum for each day equal to the Applicable Liquidity Rate (as defined below)
for such Advance or such other amount as in effect for such day, but in no event
at a rate per annum greater than the maximum rate  permitted by applicable  law;
PROVIDED,  HOWEVER,  that, if at any time the otherwise applicable interest rate
as set forth in this Section  3.07 shall  exceed the maximum  rate  permitted by
applicable  law,  then any  subsequent  reduction in such interest rate will not
reduce the rate of  interest  payable  pursuant to this  Section  3.07 below the
maximum  rate  permitted  by  applicable  law until the total amount of interest
accrued  equals the amount of interest that would have accrued if such otherwise
applicable interest rate as set forth in this Section 3.07 had at all times been
in effect.

         (b) Except as provided in clause (e) below, each Advance will be either
a Base Rate Advance or a LIBOR  Advance as provided in this  Section.  Each such
Advance  will  be a Base  Rate  Advance  for the  period  from  the  date of its
borrowing to (but  excluding)  the third  Business Day  following  the Liquidity
Provider's receipt of the Notice of Borrowing for such Advance. Thereafter, such
Advance shall be a LIBOR  Advance;  provided that the Borrower (at the direction
of  the  Controlling  Party,  so  long  as the  Liquidity  Provider  is not  the
Controlling Party) may (x) convert the Final Advance into a Base Rate Advance on
the last day of an  Interest  Period for such  Advance  by giving the  Liquidity
Provider no less than four Business  Days' prior written notice of such election
or (y)  elect to  maintain  the Final  Advance  as a Base  Rate  Advance  by not
requesting a conversion of the Final Advance to a LIBOR Advance under Clause (5)




of the  applicable  Notice of Borrowing  (or, if such Final Advance is deemed to
have been made,  without  delivery of a Notice of Borrowing  pursuant to Section
2.06, by requesting,  prior to 11:00 a.m. on the first Business Day  immediately
following the Borrower's receipt of the applicable Termination Notice, that such
Final Advance not be converted from a Base Rate Advance to a LIBOR Advance).

         (c) Each LIBOR Advance shall bear interest  during each Interest Period
at a rate per annum  equal to the LIBOR Rate for such  Interest  Period plus the
Applicable Margin for such LIBOR Advance,  payable in arrears on the last day of
such Interest Period and, in the event of the payment of principal of such LIBOR
Advance on a day other than such last day,  on the date of such  payment (to the
extent of interest accrued on the amount of principal repaid).

         (d) Each Base Rate  Advance  shall  bear  interest  at a rate per annum
equal to the Base Rate plus the  Applicable  Margin for such Base Rate  Advance,
payable in arrears on each  Regular  Distribution  Date and, in the event of the
payment  of  principal  of such Base Rate  Advance on a day other than a Regular
Distribution  Date,  on the date of such  payment  (to the  extent  of  interest
accrued on the amount of principal repaid).

         (e) Each outstanding  Unapplied Provider Advance shall bear interest in
an amount equal to the Investment  Earnings on amounts on deposit in the Class B
Cash Collateral  Account plus the Applicable Margin for such Unapplied  Provider
Advance  on the amount of such  Unapplied  Provider  Advance  from time to time,
payable in arrears on each Regular Distribution Date.

         (f) Each amount not paid when due hereunder (whether fees, commissions,
expenses  or other  amounts  or, to the  extent  permitted  by  applicable  law,
installments of interest on Advances but excluding Advances) shall bear interest
at a rate per annum equal to the Base Rate plus 2.00% until paid.

         (g) Each change in the Base Rate shall  become  effective  immediately.
The rates of interest specified in this Section 3.07 with respect to any Advance
or other amount shall be referred to as the "APPLICABLE LIQUIDITY RATE".

         Section 3.08. REPLACEMENT OF BORROWER. From time to time and subject to
the  successor  Borrower's  meeting the  eligibility  requirements  set forth in
Section  6.9 of the  Intercreditor  Agreement  applicable  to the  Subordination
Agent,  upon the  effective  date and time  specified in a written and completed
Notice of Replacement  Subordination Agent in substantially the form of Annex VI
attached hereto (a "NOTICE OF REPLACEMENT SUBORDINATION AGENT") delivered to the
Liquidity  Provider by the then  Borrower,  the  successor  Borrower  designated
therein shall be substituted for as the Borrower for all purposes hereunder.

         Section 3.09. FUNDING LOSS  INDEMNIFICATION.  The Borrower shall pay to
the Liquidity Provider,  upon the request of the Liquidity Provider, such amount
or amounts as shall be sufficient  (in the  reasonable  opinion of the Liquidity
Provider) to compensate it for any loss,  cost, or expense incurred by reason of
the  liquidation  or  redeployment  of deposits  or other funds  acquired by the




Liquidity  Provider to fund or maintain any LIBOR Advance (but excluding loss of
anticipated profits) incurred as a result of:

          (1) Any repayment of a LIBOR Advance on a date other than the last day
     of the Interest Period for such Advance; or

          (2) Any failure by the Borrower to borrow a LIBOR  Advance on the date
     for borrowing specified in the relevant notice under Section 2.02.

         Section 3.10.  ILLEGALITY.  Notwithstanding any other provision in this
Agreement,  if any change in any  applicable  law,  rule or  regulation,  or any
change in the  interpretation  or  administration  thereof  by any  governmental
authority,  central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by the Liquidity Provider (or its Facility
Office) with any request or  directive  (whether or not having the force of law)
of any such authority,  central bank or comparable agency shall make it unlawful
or impossible for the Liquidity Provider (or its Facility Office) to maintain or
fund its LIBOR  Advances,  then upon  notice to the  Borrower  by the  Liquidity
Provider,  the  outstanding  principal  amount  of the LIBOR  Advances  shall be
converted to Base Rate  Advances (a)  immediately  upon demand of the  Liquidity
Provider, if such change or compliance with such request, in the judgment of the
Liquidity Provider,  requires immediate  repayment;  or (b) at the expiration of
the last Interest  Period to expire before the effective date of any such change
or request.

                                   ARTICLE IV

                              CONDITIONS PRECEDENT

         Section 4.01.  CONDITIONS  PRECEDENT TO  EFFECTIVENESS OF SECTION 2.01.
Section 2.01 of this  Agreement  shall  become  effective on and as of the first
date (the  "EFFECTIVE  DATE") on which the following  conditions  precedent have
been satisfied or waived:

          (a) The  Liquidity  Provider  shall  have  received  on or before  the
     Closing  Date  each of the  following,  and in the  case  of each  document
     delivered  pursuant to  paragraphs  (i),  (ii) and (iii),  each in form and
     substance satisfactory to the Liquidity Provider:

               (i) This Agreement duly executed on behalf of the Borrower;

               (ii) The Intercreditor  Agreement duly executed on behalf of each
          of the parties thereto;

               (iii) Fully executed  copies of each of the Operative  Agreements
          executed and  delivered on or before the Closing Date (other than this
          Agreement and the Intercreditor Agreement);

               (iv) A copy of the Prospectus  Supplement and specimen  copies of
          the Class B Certificates;




               (v) An executed copy of each  document,  instrument,  certificate
          and opinion  delivered on or before the Closing  Date  pursuant to the
          Class B Trust  Agreement,  the  Intercreditor  Agreement and the other
          Operative Agreements (in the case of each such opinion, other than the
          opinion of  counsel  for the  Underwriters,  either  addressed  to the
          Liquidity  Provider  or  accompanied  by a  letter  from  the  counsel
          rendering  such opinion to the effect that the  Liquidity  Provider is
          entitled  to  rely  on  such  opinion  as of its  date  as if it  were
          addressed to the Liquidity Provider);

               (vi)  Evidence  that  there  shall have been made and shall be in
          full force and effect, all filings,  recordings and/or  registrations,
          and there  shall have been given or taken any notice or other  similar
          action as may be  reasonably  necessary  or, to the extent  reasonably
          requested by the Liquidity Provider, reasonably advisable, in order to
          establish,   perfect,  protect  and  preserve  the  right,  title  and
          interest,  remedies, powers, privileges,  liens and security interests
          of,  or for  the  benefit  of,  the  Trustees,  the  Borrower  and the
          Liquidity  Provider created by the Operative  Agreements  executed and
          delivered on or prior to the Closing Date;

               (vii) An  agreement  from  Continental,  pursuant  to  which  (i)
          Continental agrees to provide copies of quarterly financial statements
          and audited annual financial statements to the Liquidity Provider, and
          such other  information  as the Liquidity  Provider  shall  reasonably
          request with respect to the transactions contemplated by the Operative
          Agreements,  in each case,  only to the  extent  that  Continental  is
          obligated to provide such information pursuant to Section 8.2.1 of the
          Leases (related to Leased  Aircraft) or the  corresponding  section of
          the Indentures  (related to Owned Aircraft) to the parties thereto and
          (ii)  Continental  agrees to allow the  Liquidity  Provider to inspect
          Continental's  books and records regarding such  transactions,  and to
          discuss such  transactions with officers and employees of Continental;
          and

               (viii) Such other documents,  instruments, opinions and approvals
          pertaining  to the  transactions  contemplated  hereby or by the other
          Operative  Agreements as the Liquidity  Provider shall have reasonably
          requested.

          (b) The following  statement  shall be true on and as of the Effective
     Date:  no event has  occurred and is  continuing,  or would result from the
     entering  into  of this  Agreement  or the  making  of any  Advance,  which
     constitutes a Liquidity Event of Default.

          (c) The Liquidity  Provider shall have received payment in full of all
     fees  and  other  sums  required  to be paid to or for the  account  of the
     Liquidity Provider on or prior to the Effective Date.

          (d) All conditions precedent to the issuance of the Certificates under
     the Trust  Agreements  shall have been satisfied or waived,  all conditions
     precedent to the effectiveness of the other Liquidity Facilities shall have
     been satisfied or waived,  and all conditions  precedent to the purchase of
     the Certificates by the Underwriters under the Underwriting Agreement shall




     have been satisfied  (unless any of such  conditions  precedent  shall have
     been waived by the Underwriters).

          (e) The Borrower  shall have  received a  certificate,  dated the date
     hereof,  signed  by a  duly  authorized  representative  of  the  Liquidity
     Provider,  certifying that all conditions precedent to the effectiveness of
     Section 2.01 have been satisfied or waived.

         Section 4.02. CONDITIONS PRECEDENT TO BORROWING.  The obligation of the
Liquidity Provider to make an Advance on the occasion of each Borrowing shall be
subject to the conditions  precedent that the Effective Date shall have occurred
and,  prior to the date of such  Borrowing,  the Borrower shall have delivered a
Notice of Borrowing which conforms to the terms and conditions of this Agreement
and has been  completed as may be required by the relevant form of the Notice of
Borrowing for the type of Advances requested.

                                    ARTICLE V

                                    COVENANTS

         Section 5.01.  AFFIRMATIVE  COVENANTS OF THE  BORROWER.  So long as any
Advance  shall remain unpaid or the  Liquidity  Provider  shall have any Maximum
Commitment hereunder or the Borrower shall have any obligation to pay any amount
to the Liquidity  Provider  hereunder,  the Borrower will,  unless the Liquidity
Provider shall otherwise consent in writing:

          (a) PERFORMANCE OF THIS AND OTHER AGREEMENTS.  Punctually pay or cause
     to be paid all  amounts  payable by it under this  Agreement  and the other
     Operative  Agreements and observe and perform in all material  respects the
     conditions,  covenants and requirements  applicable to it contained in this
     Agreement and the other Operative Agreements.

          (b) REPORTING  REQUIREMENTS.  Furnish to the  Liquidity  Provider with
     reasonable promptness,  such other information and data with respect to the
     transactions  contemplated by the Operative Agreements as from time to time
     may be  reasonably  requested  by the  Liquidity  Provider;  and permit the
     Liquidity Provider, upon reasonable notice, to inspect the Borrower's books
     and records with respect to such transactions and to meet with officers and
     employees of the Borrower to discuss such transactions.

          (c) CERTAIN OPERATIVE  AGREEMENTS.  Furnish to the Liquidity  Provider
     with reasonable  promptness,  such Operative  Agreements entered into after
     the date  hereof as from time to time may be  reasonably  requested  by the
     Liquidity Provider.

         Section  5.02.  NEGATIVE  COVENANTS  OF THE  BORROWER.  So  long as any
Advance  shall remain unpaid or the  Liquidity  Provider  shall have any Maximum
Commitment hereunder or the Borrower shall have any obligation to pay any amount
to the Liquidity Provider hereunder,  the Borrower will not appoint or permit or
suffer to be appointed any successor  Borrower without the prior written consent
of the Liquidity Provider,  which consent shall not be unreasonably  withheld or
delayed.





                                   ARTICLE VI

                           LIQUIDITY EVENTS OF DEFAULT

         Section 6.01.  LIQUIDITY EVENTS OF DEFAULT.  If (a) any Liquidity Event
of Default has occurred  and is  continuing  and (b) there is a Performing  Note
Deficiency,  the  Liquidity  Provider  may,  in its  discretion,  deliver to the
Borrower a  Termination  Notice,  the effect of which  shall be to cause (i) the
obligation of the Liquidity Provider to make Advances hereunder to expire on the
fifth Business Day after the date on which such  Termination  Notice is received
by the  Borrower,  (ii) the  Borrower to  promptly  request,  and the  Liquidity
Provider to promptly  make, a Final Advance in accordance  with Section  2.02(d)
hereof  and  Section  3.6(i)  of the  Intercreditor  Agreement,  (iii) all other
outstanding  Advances to be  automatically  converted  into Final  Advances  for
purposes of  determining  the  Applicable  Liquidity  Rate for interest  payable
thereon,  and (iv)  subject  to  Sections  2.07 and 2.09  hereof,  all  Advances
(including,  without  limitation,  any  Provider  Advance and  Applied  Provider
Advance),  any  accrued  interest  thereon  and any  other  amounts  outstanding
hereunder to become immediately due and payable to the Liquidity Provider.

                                   ARTICLE VII

                                  MISCELLANEOUS

         Section 7.01. AMENDMENTS,  ETC. No amendment or waiver of any provision
of this Agreement, nor consent to any departure by the Borrower therefrom, shall
in any event be effective  unless the same shall be in writing and signed by the
Liquidity  Provider,  and,  in the case of an  amendment  or of a waiver  by the
Borrower,  the Borrower, and then such waiver or consent shall be effective only
in the specific instance and for the specific purpose for which given.

         Section 7.02.  NOTICES,  ETC.  Except as otherwise  expressly  provided
herein, all notices and other communications  provided for hereunder shall be in
writing (including telecopier and mailed or delivered or sent by telecopier):




          Borrower:

          Wilmington Trust Company
          Rodney Square North
          1100 North Market Square
          Wilmington, DE  19890-0001
          Attn:  Corporate Trust Administration

          Telephone:302-651-1000
          Telecopy: 302-651-8882

          Liquidity Provider:

          Morgan Stanley Capital Services, Inc.
          1585 Broadway
          New York, New York  10036
          Attn:  Jonathan Schwartz

          Telephone:212-761-2580
          Telecopy: 212-761-0580

or, as to each of the foregoing, at such other address as shall be designated by
such  Person  in  a  written  notice  to  the  others.   All  such  notices  and
communications  shall be effective (i) if given by telecopier,  when transmitted
to the telecopier  number specified above, (ii) if given by mail, when deposited
in the mails  addressed as specified  above,  and (iii) if given by other means,
when delivered at the address  specified  above,  except that written notices to
the Liquidity  Provider pursuant to the provisions of Articles II and III hereof
shall not be effective until received by the Liquidity  Provider.  A copy of all
notices  delivered  hereunder  to either party shall in addition be delivered to
each  of the  parties  to  the  Participation  Agreements  at  their  respective
addresses set forth therein.

         Section  7.03.  NO  WAIVER;  REMEDIES.  No  failure  on the part of the
Liquidity Provider to exercise, and no delay in exercising, any right under this
Agreement  shall  operate as a waiver  thereof;  nor shall any single or partial
exercise  of any right  under  this  Agreement  preclude  any  other or  further
exercise  thereof  or the  exercise  of any other  right.  The  remedies  herein
provided are cumulative and not exclusive of any remedies provided by law.

         Section  7.04.  FURTHER  ASSURANCES.  The  Borrower  agrees  to do such
further  acts and things and to execute  and deliver to the  Liquidity  Provider
such additional assignments, agreements, powers and instruments as the Liquidity
Provider  may  reasonably  require or deem  advisable  to carry into  effect the
purposes  of this  Agreement  and the other  Operative  Agreements  or to better
assure and confirm unto the Liquidity  Provider its rights,  powers and remedies
hereunder and under the other Operative Agreements.

         Section  7.05.  INDEMNIFICATION;  SURVIVAL OF CERTAIN  PROVISIONS.  The
Liquidity  Provider  shall be  indemnified  hereunder  to the  extent and in the
manner described in Section 8.1 of the Participation  Agreements with respect to
Owned Aircraft and Section 9.1 of the  Participation  Agreements with respect to




Leased Aircraft. In addition, the Borrower agrees to indemnify,  protect, defend
and hold harmless the Liquidity  Provider  from,  against and in respect of, and
shall pay on demand,  all Expenses of any kind or nature  whatsoever (other than
any Expenses of the nature  described in Section 3.01, 3.02 or 7.07 hereof or in
the Fee Letter applicable to this Agreement  (regardless of whether  indemnified
against pursuant to said Sections or in such Fee Letter)),  that may be imposed,
incurred by or asserted  against any Liquidity  Indemnitee,  in any way relating
to, resulting from, or arising out of or in connection with any action,  suit or
proceeding by any third party against such Liquidity  Indemnitee and relating to
this Agreement,  the Fee Letter applicable to this Agreement,  the Intercreditor
Agreement or any Financing Agreement; PROVIDED, HOWEVER, that the Borrower shall
not be required to  indemnify,  protect,  defend and hold harmless any Liquidity
Indemnitee in respect of any Expense of such Liquidity  Indemnitee to the extent
such Expense is (i) attributable to the gross  negligence or willful  misconduct
of such Liquidity  Indemnitee or any other Liquidity  Indemnitee,  (ii) ordinary
and usual operating  overhead expense,  or (iii)  attributable to the failure by
such  Liquidity  Indemnitee  or any other  Liquidity  Indemnitee  to  perform or
observe any  agreement,  covenant or  condition  on its part to be  performed or
observed  in  this  Agreement,  the  Intercreditor  Agreement,  the  Fee  Letter
applicable to this Agreement or any other  Operative  Agreement to which it is a
party.  The indemnities  contained in Section 8.1 or 9.1, as the case may be, of
the Participation  Agreements,  and the provisions of Sections 3.01, 3.02, 3.03,
3.09, 7.05 and 7.07 hereof, shall survive the termination of this Agreement.

         Section  7.06.  LIABILITY OF THE  LIQUIDITY  PROVIDER.  (a) Neither the
Liquidity Provider nor any of its officers,  employees,  directors or affiliates
shall  be  liable  or  responsible  for:  (i) the use  which  may be made of the
Advances  or any  acts  or  omissions  of the  Borrower  or any  beneficiary  or
transferee  in  connection   therewith;   (ii)  the  validity,   sufficiency  or
genuineness of documents,  or of any endorsement thereon, even if such documents
should prove to be in any or all respects invalid,  insufficient,  fraudulent or
forged;  or (iii) the  making of  Advances  by the  Liquidity  Provider  against
delivery of a Notice of Borrowing and other  documents  which do not comply with
the terms  hereof;  PROVIDED,  HOWEVER,  that the  Borrower  shall  have a claim
against the Liquidity  Provider,  and the Liquidity  Provider shall be liable to
the Borrower,  to the extent of any damages  suffered by the Borrower which were
the result of (A) the Liquidity  Provider's  willful misconduct or negligence in
determining  whether documents presented hereunder comply with the terms hereof,
or (B)  any  breach  by the  Liquidity  Provider  of any of the  terms  of  this
Agreement,  including,  but not limited to, the Liquidity  Provider's failure to
make lawful  payment  hereunder  after the  delivery to it by the  Borrower of a
Notice of Borrowing strictly complying with the terms and conditions hereof.

         (b) Neither the Liquidity Provider nor any of its officers,  employees,
directors or affiliates  shall be liable or  responsible  in any respect for (i)
any error, omission, interruption or delay in transmission, dispatch or delivery
of any message or advice, however transmitted, in connection with this Agreement
or any Notice of Borrowing delivered hereunder,  or (ii) any action, inaction or
omission which may be taken by it in good faith,  absent  willful  misconduct or
negligence  (in which  event the extent of the  Liquidity  Provider's  potential
liability  to the  Borrower  shall be  limited  as set forth in the  immediately
preceding  paragraph),  in  connection  with  this  Agreement  or any  Notice of
Borrowing.





         Section 7.07. COSTS, EXPENSES AND TAXES. The Borrower agrees to pay, or
cause to be paid (A) on the  Effective  Date and on such  later date or dates on
which the Liquidity  Provider shall make demand,  all  reasonable  out-of-pocket
costs and expenses  (including,  without  limitation,  the  reasonable  fees and
expenses  of  outside  counsel  for the  Liquidity  Provider)  of the  Liquidity
Provider in connection with the preparation,  negotiation,  execution, delivery,
filing and recording of this Agreement,  any other  Operative  Agreement and any
other documents which may be delivered in connection with this Agreement and (B)
on demand, all reasonable costs and expenses (including  reasonable counsel fees
and expenses) of the Liquidity  Provider in connection  with (i) the enforcement
of this Agreement or any other  Operative  Agreement,  (ii) the  modification or
amendment of, or supplement to, this Agreement or any other Operative  Agreement
or such  other  documents  which may be  delivered  in  connection  herewith  or
therewith  (whether or not the same shall become  effective) or (iii) any action
or  proceeding  relating to any order,  injunction,  or other  process or decree
restraining or seeking to restrain the Liquidity Provider from paying any amount
under  this  Agreement,  the  Intercreditor  Agreement  or any  other  Operative
Agreement or otherwise  affecting the  application  of funds in the Class B Cash
Collateral Accounts. In addition,  the Borrower shall pay any and all recording,
stamp and other  similar  taxes and fees payable or  determined to be payable in
connection with the execution, delivery, filing and recording of this Agreement,
any other Operative  Agreement and such other documents,  and agrees to save the
Liquidity  Provider  harmless  from and  against  any and all  liabilities  with
respect to or  resulting  from any delay in paying or omission to pay such taxes
or fees.

         Section 7.08. BINDING EFFECT; PARTICIPATIONS.  (a) This Agreement shall
be binding  upon and inure to the  benefit  of the  Borrower  and the  Liquidity
Provider and their  respective  successors and assigns,  except that neither the
Liquidity  Provider  (except as  otherwise  provided in this  Section  7.08) nor
(except as  contemplated  by Section 3.08) the Borrower  shall have the right to
assign its rights or  obligations  hereunder or any interest  herein without the
prior written consent of the other party, subject to the requirements of Section
7.08(b). The Liquidity Provider may grant participations herein or in any of its
rights hereunder  (including,  without  limitation,  funded  participations  and
participations in rights to receive interest  payments  hereunder) and under the
other Operative  Agreements to such Persons as the Liquidity Provider may in its
sole discretion select,  subject to the requirements of Section 7.08(b). No such
participation  by the Liquidity  Provider,  however,  will relieve the Liquidity
Provider of its obligations  hereunder.  In connection with any participation or
any  proposed  participation,   the  Liquidity  Provider  may  disclose  to  the
participant or the proposed  participant  any  information  that the Borrower is
required to deliver or to disclose to the  Liquidity  Provider  pursuant to this
Agreement.  The Borrower  acknowledges and agrees that the Liquidity  Provider's
source  of  funds  may  derive  in  part  from  its  participants   (other  than
Continental).  Accordingly, references in this Agreement and the other Operative
Agreements  to  determinations,   reserve  and  capital  adequacy  requirements,
increased costs,  reduced receipts,  additional  amounts due pursuant to Section
3.03 and the like as they pertain to the Liquidity Provider shall be deemed also
to include those of each of its  participants  that are banks (subject,  in each
case, if any such participant is not a bank that is (i) organized under the laws
of the United  States or any State thereof and (ii) a member bank of the Federal
Reserve System with deposits exceeding $1,000,000,000 (such a bank, a "Reference
Bank"),  to the  maximum  amount that would have been  directly  incurred by any




Reference  Bank  organized  under  the laws of the  United  States  or any State
thereof  if such  Reference  Bank,  rather  than the  participant,  had held the
interest participated).

         (b) If, pursuant to subsection (a) above, the Liquidity  Provider sells
any  participation  in this  Agreement  to any bank or  other  entity  (each,  a
"TRANSFEREE"),  then, concurrently with the effectiveness of such participation,
the Transferee shall (i) represent to the Liquidity Provider (for the benefit of
the  Liquidity  Provider and the  Borrower)  either (A) that it is  incorporated
under  the laws of the  United  States  or a state  thereof  or (B)  that  under
applicable  law and  treaties,  no taxes will be required  to be  withheld  with
respect  to any  payments  to be made  to such  Transferee  in  respect  of this
Agreement,  (ii) furnish to the Liquidity Provider and the Borrower either (x) a
statement that it is incorporated under the laws of the United States or a state
thereof or (y) if it is not so incorporated,  two copies of a properly completed
United States  Internal  Revenue Service Form 4224 or Form 1001, as appropriate,
or other  applicable  form,  certificate or document  prescribed by the Internal
Revenue Service  certifying,  in each case, such  Transferee's  entitlement to a
complete exemption from United States federal  withholding tax in respect to any
and all payments to be made  hereunder,  and (iii) agree (for the benefit of the
Liquidity  Provider and the Borrower) to provide the Liquidity  Provider and the
Borrower a new Form 4224 or Form 1001, as appropriate, (A) on or before the date
that any such form expires or becomes  obsolete or (B) after the  occurrence  of
any event requiring a change in the most recent form previously  delivered by it
and prior to the  immediately  following due date of any payment by the Borrower
hereunder,  certifying  in the  case  of a Form  1001  or Form  4224  that  such
Transferee  is  entitled to a complete  exemption  from  United  States  federal
withholding  tax on  payments  under this  Agreement.  Unless the  Borrower  has
received forms or other documents reasonably satisfactory to it (and required by
applicable  law)  indicating  that payments  hereunder are not subject to United
States federal  withholding tax, the Borrower will withhold taxes as required by
law from such payments at the applicable statutory rate.

         (c)  Notwithstanding  the other  provisions of this Section  7.08,  the
Liquidity  Provider  may assign and  pledge all or any  portion of the  Advances
owing  to it to any  Federal  Reserve  Bank or the  United  States  Treasury  as
collateral  security  pursuant to  Regulation A of the Board of Governors of the
Federal Reserve System and any Operating Circular issued by such Federal Reserve
Bank, provided that any payment in respect of such assigned Advances made by the
Borrower  to the  Liquidity  Provider  in  accordance  with  the  terms  of this
Agreement shall satisfy the Borrower's  obligations hereunder in respect of such
assigned Advance to the extent of such payment. No such assignment shall release
the Liquidity Provider from its obligations hereunder.

         Section 7.09.  SEVERABILITY.  Any provision of this Agreement  which is
prohibited,  unenforceable  or not authorized in any  jurisdiction  shall, as to
such   jurisdiction,   be  ineffective  to  the  extent  of  such   prohibition,
unenforceability  or   non-authorization   without  invalidating  the  remaining
provisions hereof or affecting the validity,  enforceability or legality of such
provision in any other jurisdiction.

         Section 7.10.  GOVERNING LAW. THIS AGREEMENT  SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.





         Section 7.11. SUBMISSION TO JURISDICTION;  WAIVER OF JURY TRIAL; WAIVER
OF  IMMUNITY.   (a)  Each  of  the  parties   hereto  hereby   irrevocably   and
unconditionally:

          (i)  submits  for  itself  and its  property  in any  legal  action or
     proceeding relating to this Agreement or any other Operative Agreement,  or
     for  recognition  and  enforcement  of any  judgment  in respect  hereof or
     thereof,  to the  nonexclusive  general  jurisdiction  of the courts of the
     State of New York,  the  courts of the  United  States of  America  for the
     Southern District of New York, and the appellate courts from any thereof;

          (ii)  consents  that any such action or  proceeding  may be brought in
     such courts,  and waives any objection that it may now or hereafter have to
     the venue of any such action or  proceeding  in any such court or that such
     action or proceeding was brought in an inconvenient court and agrees not to
     plead or claim the same;

          (iii) agrees that service of process in any such action or  proceeding
     may be effected by mailing a copy thereof by registered  or certified  mail
     (or any  substantially  similar form and mail),  postage  prepaid,  to each
     party hereto at its address set forth in Section  7.02  hereof,  or at such
     other  address of which the  Liquidity  Provider  shall have been  notified
     pursuant thereto; and

          (iv)  agrees  that  nothing  herein  shall  affect the right to effect
     service of process in any other manner  permitted by law or shall limit the
     right to sue in any other jurisdiction.

         (b) THE BORROWER AND THE LIQUIDITY  PROVIDER EACH HEREBY AGREE TO WAIVE
THEIR  RESPECTIVE  RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION  BASED
UPON OR ARISING OUT OF THIS  AGREEMENT OR ANY DEALINGS  BETWEEN THEM RELATING TO
THE  SUBJECT  MATTER  OF THIS  AGREEMENT  AND  THE  RELATIONSHIP  THAT IS  BEING
ESTABLISHED, including, without limitation, contract claims, tort claims, breach
of duty claims and all other common law and statutory  claims.  The Borrower and
the  Liquidity  Provider  each warrant and  represent  that it has reviewed this
waiver with its legal counsel,  and that it knowingly and voluntarily waives its
jury trial rights following consultation with such legal counsel. THIS WAIVER IS
IRREVOCABLE, AND CANNOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND THIS WAIVER
SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS
TO THIS AGREEMENT.

         (c) The Liquidity  Provider hereby waives any immunity it may have from
the  jurisdiction  of the courts of the United States or of any State and waives
any immunity any of its  properties  located in the United  States may have from
attachment  or  execution  upon a judgment  entered by any such court  under the
United States Foreign Sovereign  Immunities Act of 1976 or any similar successor
legislation.

         Section 7.12. EXECUTION IN COUNTERPARTS. This Agreement may be executed
in any  number of  counterparts  and by  different  parties  hereto on  separate
counterparts,  each of which counterparts, when so executed and delivered, shall




be deemed to be an original and all of which counterparts, taken together, shall
constitute but one and the same Agreement.

         Section 7.13. ENTIRETY. This Agreement, the Intercreditor Agreement and
the other  Operative  Agreements  to which  the  Liquidity  Provider  is a party
constitute  the entire  agreement  of the  parties  hereto  with  respect to the
subject matter hereof and supersedes all prior  understandings and agreements of
such parties.

         Section 7.14. HEADINGS. Section headings in this Agreement are included
herein for convenience of reference only and shall not constitute a part of this
Agreement for any other purpose.

         Section 7.15. TRANSFER.  The Liquidity Provider hereby acknowledges and
consents  to  the  Transfer   contemplated  by  the  Assignment  and  Assumption
Agreement.

         Section 7.16. LIQUIDITY PROVIDER'S OBLIGATION TO MAKE ADVANCES.  EXCEPT
AS EXPRESSLY  SET FORTH IN THIS  AGREEMENT,  THE  OBLIGATIONS  OF THE  LIQUIDITY
PROVIDER  TO MAKE  ADVANCES  HEREUNDER,  AND THE  BORROWER'S  RIGHTS TO  DELIVER
NOTICES OF  BORROWING  REQUESTING  THE MAKING OF  ADVANCES  HEREUNDER,  SHALL BE
UNCONDITIONAL  AND  IRREVOCABLE,  AND SHALL BE PAID OR  PERFORMED,  IN EACH CASE
STRICTLY IN ACCORDANCE WITH THE TERMS OF THIS AGREEMENT.










         IN WITNESS  WHEREOF,  the parties have caused this Agreement to be duly
executed and delivered by their respective officers thereunto duly authorized as
of the date first set forth above.

                      WILMINGTON TRUST COMPANY,
                      not in its individual capacity but solely as Subordination
                      Agent, as agent and trustee for the Class B Trust, as
                      Borrower



                      By:__________________________________________
                         Name
                         Title


                      MORGAN STANLEY CAPITAL SERVICES, INC.,
                      as Liquidity Provider



                      By:__________________________________________
                         Name
                         Title



                                                                      Annex I to
                                                      Revolving Credit Agreement



                      INTEREST ADVANCE NOTICE OF BORROWING

         The  undersigned,  a  duly  authorized  signatory  of  the  undersigned
borrower (the "BORROWER"),  hereby certifies to Morgan Stanley Capital Services,
Inc.  (the  "LIQUIDITY  PROVIDER"),  with  reference  to  the  Revolving  Credit
Agreement  (1998-3B) dated as of November 3, 1998,  between the Borrower and the
Liquidity Provider (the "LIQUIDITY AGREEMENT"; the terms defined therein and not
otherwise  defined herein being used herein as therein  defined or  referenced),
that:

          (1) The Borrower is the  Subordination  Agent under the  Intercreditor
     Agreement.

          (2) The Borrower is delivering this Notice of Borrowing for the making
     of an Interest  Advance by the  Liquidity  Provider to be used,  subject to
     clause  (3)(v)  below,   for  the  payment  of  interest  on  the  Class  B
     Certificates  which was payable on  ____________,  ____ (the  "DISTRIBUTION
     DATE") in  accordance  with the terms and  provisions  of the Class B Trust
     Agreement  and the Class B  Certificates,  which Advance is requested to be
     made on ____________, ____.

          (3)  The  amount  of the  Interest  Advance  requested  hereby  (i) is
     $_______________.__,  to be  applied  in  respect  of  the  payment  of the
     interest  which  was due and  payable  on the Class B  Certificates  on the
     Distribution  Date,  (ii) does not include  any amount with  respect to the
     payment of  principal  of, or  premium  on,  the Class B  Certificates,  or
     principal  of, or interest or premium on, the Class A-1  Certificates,  the
     Class  A-2  Certificates,  the  Class  C-1  Certificates  or the  Class C-2
     Certificates,  (iii) was computed in accordance  with the provisions of the
     Class B  Certificates,  the Class B Trust  Agreement and the  Intercreditor
     Agreement (a copy of which  computation is attached  hereto as Schedule I),
     (iv) does not exceed the Maximum  Available  Commitment on the date hereof,
     (v) does not include  any amount of  interest  which was due and payable on
     the Class B Certificates on such Distribution Date but which remains unpaid
     due to the failure of the Depositary to pay any amount of accrued  interest
     on the Deposits on such  Distribution Date and (vi) has not been and is not
     the subject of a prior or contemporaneous Notice of Borrowing.

          (4)  Upon  receipt  by or on  behalf  of the  Borrower  of the  amount
     requested  hereby,  (a) the Borrower will apply the same in accordance with
     the terms of Section 3.6(b) of the Intercreditor  Agreement, (b) no portion
     of such amount shall be applied by the  Borrower for any other  purpose and
     (c) no portion of such amount  until so applied  shall be  commingled  with
     other funds held by the Borrower.

         The  Borrower  hereby  acknowledges  that,  pursuant  to the  Liquidity
Agreement,  the making of the  Interest  Advance as  requested by this Notice of
Borrowing shall  automatically  reduce,  subject to  reinstatement in accordance
with the terms of the Liquidity  Agreement,  the Maximum Available Commitment by
an amount  equal to the  amount of the  Interest  Advance  requested  to be made
hereby as set forth in clause (i) of paragraph (3) of this  Certificate and such




reduction shall automatically result in corresponding  reductions in the amounts
available to be borrowed pursuant to a subsequent Advance.

         IN WITNESS WHEREOF, the Borrower has executed and delivered this Notice
of Borrowing as of the ____ day of ___________, ____.


                                WILMINGTON TRUST COMPANY,
                                    not in its individual capacity but solely as
                                    Subordination Agent, as Borrower



                                By:_________________________________
                                   Name:
                                   Title:




               SCHEDULE I TO INTEREST ADVANCE NOTICE OF BORROWING

[Insert  Copy  of  Computations  in  accordance with Interest  Advance Notice of
Borrowing]






                                                                     Annex II to
                                                      Revolving Credit Agreement


                    NON-EXTENSION ADVANCE NOTICE OF BORROWING

         The  undersigned,  a  duly  authorized  signatory  of  the  undersigned
subordination agent (the "BORROWER"), hereby certifies to Morgan Stanley Capital
Services,  Inc.  (the  "LIQUIDITY  PROVIDER"),  with  reference to the Revolving
Credit  Agreement  (1998-3B) dated as of November 3, 1998,  between the Borrower
and the Liquidity Provider (the "LIQUIDITY AGREEMENT"; the terms defined therein
and not  otherwise  defined  herein  being  used  herein as  therein  defined or
referenced), that:

          (1) The Borrower is the  Subordination  Agent under the  Intercreditor
     Agreement.

          (2) The Borrower is delivering this Notice of Borrowing for the making
     of the Non-Extension  Advance by the Liquidity  Provider to be used for the
     funding of the Class B Cash  Collateral  Account in accordance with Section
     3.6(d) of the  Intercreditor  Agreement,  which  Advance is requested to be
     made on __________, ____.

          (3) The amount of the  Non-Extension  Advance  requested hereby (i) is
     $_______________.__,  which equals the Maximum Available  Commitment on the
     date  hereof and is to be applied in respect of the  funding of the Class B
     Cash   Collateral   Account  in  accordance  with  Section  3.6(d)  of  the
     Intercreditor  Agreement,  (ii) does not include any amount with respect to
     the payment of the principal  of, or premium on, the Class B  Certificates,
     or principal of, or interest or premium on, the Class A-1 Certificates, the
     Class  A-2  Certificates,  the  Class  C-1  Certificates  or the  Class C-2
     Certificates,  (iii) was computed in accordance  with the provisions of the
     Class B  Certificates,  the Class B Trust  Agreement and the  Intercreditor
     Agreement (a copy of which  computation is attached  hereto as Schedule I),
     and (iv) has not been and is not the subject of a prior or  contemporaneous
     Notice of Borrowing under the Liquidity Agreement.

          (4)  Upon  receipt  by or on  behalf  of the  Borrower  of the  amount
     requested hereby,  (a) the Borrower will deposit such amount in the Class B
     Cash Collateral  Account and apply the same in accordance with the terms of
     Section  3.6(d) of the  Intercreditor  Agreement,  (b) no  portion  of such
     amount shall be applied by the  Borrower  for any other  purpose and (c) no
     portion of such  amount  until so applied  shall be  commingled  with other
     funds held by the Borrower.

          (5) The Borrower hereby requests that the Advance  requested hereby be
     a Base Rate  Advance and that such Base Rate  Advance be  converted  into a
     LIBOR  Advance on the third  Business  Day  following  your receipt of this
     notice.

         The  Borrower  hereby  acknowledges  that,  pursuant  to the  Liquidity
Agreement,  (A) the making of the  Non-Extension  Advance as  requested  by this
Notice of Borrowing shall automatically and irrevocably terminate the obligation
of  the  Liquidity  Provider  to  make  further  Advances  under  the  Liquidity
Agreement;  and (B)  following  the  making  by the  Liquidity  Provider  of the




Non-Extension Advance requested by this Notice of Borrowing,  the Borrower shall
not be entitled to request any further Advances under the Liquidity Agreement.

         IN WITNESS WHEREOF, the Borrower has executed and delivered this Notice
of Borrowing as of the ____ day of _____________, ____.


                                WILMINGTON TRUST COMPANY,
                                    not in its individual capacity but solely as
                                    Subordination Agent, as Borrower



                                By:_________________________________
                                   Name:
                                   Title:






             SCHEDULE I TO NON-EXTENSION ADVANCE NOTICE OF BORROWING

[Insert  Copy of computations in accordance with Non-Extension Advance Notice of
Borrowing]




                                                                    Annex III to
                                                      Revolving Credit Agreement


                      DOWNGRADE ADVANCE NOTICE OF BORROWING

         The  undersigned,  a  duly  authorized  signatory  of  the  undersigned
subordination agent (the "BORROWER"), hereby certifies to Morgan Stanley Capital
Services,  Inc.  (the  "LIQUIDITY  PROVIDER"),  with  reference to the Revolving
Credit  Agreement  (1998-3B) dated as of November 3, 1998,  between the Borrower
and the Liquidity Provider (the "LIQUIDITY AGREEMENT"; the terms defined therein
and not  otherwise  defined  herein  being  used  herein as  therein  defined or
referenced), that:

          (1) The Borrower is the  Subordination  Agent under the  Intercreditor
     Agreement.

          (2) The Borrower is delivering this Notice of Borrowing for the making
     of the  Downgrade  Advance  by the  Liquidity  Provider  to be used for the
     funding of the Class B Cash  Collateral  Account in accordance with Section
     3.6(c) of the  Intercreditor  Agreement (i) by reason of the downgrading of
     the  short-term  unsecured  debt rating of the  Guarantor  issued by either
     Rating  Agency below the  Threshold  Rating or (ii)  because the  Guarantee
     Agreement  has ceased to be in full force and effect or has become  invalid
     or  unenforceable  or the Guarantor  has denied its  liability  thereunder,
     which Advance is requested to be made on __________, ____.

          (3) The  amount  of the  Downgrade  Advance  requested  hereby  (i) is
     $_______________.__,  which equals the Maximum Available  Commitment on the
     date  hereof and is to be applied in respect of the  funding of the Class B
     Cash   Collateral   Account  in  accordance  with  Section  3.6(c)  of  the
     Intercreditor  Agreement,  (ii) does not include any amount with respect to
     the payment of the principal  of, or premium on, the Class B  Certificates,
     or principal of, or interest or premium on, the Class A-1 Certificates, the
     A-2 Certificates, the Class C-1 Certificates or the Class C-2 Certificates,
     (iii)  was  computed  in  accordance  with the  provisions  of the  Class B
     Certificates,  the Class B Trust Agreement and the Intercreditor  Agreement
     (a copy of which  computation  is attached  hereto as Schedule I), and (iv)
     has not been and is not the subject of a prior or contemporaneous Notice of
     Borrowing under the Liquidity Agreement.

          (4)  Upon  receipt  by or on  behalf  of the  Borrower  of the  amount
     requested hereby,  (a) the Borrower will deposit such amount in the Class B
     Cash Collateral  Account and apply the same in accordance with the terms of
     Section  3.6(c) of the  Intercreditor  Agreement,  (b) no  portion  of such
     amount shall be applied by the  Borrower  for any other  purpose and (c) no
     portion of such  amount  until so applied  shall be  commingled  with other
     funds held by the Borrower.

         The  Borrower  hereby  acknowledges  that,  pursuant  to the  Liquidity
Agreement,  (A) the making of the Downgrade  Advance as requested by this Notice
of Borrowing shall automatically and irrevocably terminate the obligation of the
Liquidity Provider to make further Advances under the Liquidity  Agreement;  and
(B)  following the making by the  Liquidity  Provider of the  Downgrade  Advance




requested by this Notice of  Borrowing,  the  Borrower  shall not be entitled to
request any further Advances under the Liquidity Agreement.

         IN WITNESS WHEREOF, the Borrower has executed and delivered this Notice
of Borrowing as of the ____ day of __________, ____.


                                     WILMINGTON TRUST COMPANY,
                                         not in its individual capacity but
                                         solely as Subordination Agent, as
                                         Borrower



                                     By:_________________________________
                                        Name:
                                        Title:






               SCHEDULE I TO DOWNGRADE ADVANCE NOTICE OF BORROWING

[Insert  Copy  of  computations  in  accordance with Downgrade Advance Notice of
Borrowing]





                                                                     Annex IV to
                                                      Revolving Credit Agreement



                        FINAL ADVANCE NOTICE OF BORROWING

         The  undersigned,  a  duly  authorized  signatory  of  the  undersigned
borrower (the "BORROWER"),  hereby certifies to Morgan Stanley Capital Services,
Inc.  (the  "LIQUIDITY  PROVIDER"),  with  reference  to  the  Revolving  Credit
Agreement  (1998-3B) dated as of November 3, 1998,  between the Borrower and the
Liquidity Provider (the "LIQUIDITY AGREEMENT"; the terms defined therein and not
otherwise  defined herein being used herein as therein  defined or  referenced),
that:

          (1) The Borrower is the  Subordination  Agent under the  Intercreditor
     Agreement.

          (2) The Borrower is delivering this Notice of Borrowing for the making
     of the Final Advance by the  Liquidity  Provider to be used for the funding
     of the Class B Cash Collateral Account in accordance with Section 3.6(i) of
     the  Intercreditor  Agreement by reason of the receipt by the Borrower of a
     Termination  Notice  from  the  Liquidity  Provider  with  respect  to  the
     Liquidity Agreement, which Advance is requested to be made on ____________,
     ____.

          (3)  The  amount  of  the  Final  Advance   requested  hereby  (i)  is
     $_________________.__, which equals the Maximum Available Commitment on the
     date  hereof and is to be applied in respect of the  funding of the Class B
     Cash   Collateral   Account  in  accordance  with  Section  3.6(i)  of  the
     Intercreditor  Agreement,  (ii) does not include any amount with respect to
     the payment of principal  of, or premium on, the Class B  Certificates,  or
     principal  of, or interest or premium on, the Class A-1  Certificates,  the
     Class  A-2  Certificates,  the  Class  C-1  Certificates  or the  Class C-2
     Certificates,  (iii) was computed in accordance  with the provisions of the
     Class B  Certificates,  the Class B Trust  Agreement and the  Intercreditor
     Agreement (a copy of which  computation is attached  hereto as Schedule I),
     and (iv) has not been and is not the subject of a prior or  contemporaneous
     Notice of Borrowing.

          (4)  Upon  receipt  by or on  behalf  of the  Borrower  of the  amount
     requested hereby,  (a) the Borrower will deposit such amount in the Class B
     Cash Collateral  Account and apply the same in accordance with the terms of
     Section  3.6(i) of the  Intercreditor  Agreement,  (b) no  portion  of such
     amount shall be applied by the  Borrower  for any other  purpose and (c) no
     portion of such  amount  until so applied  shall be  commingled  with other
     funds held by the Borrower.





          (5) The Borrower hereby requests that the Advance  requested hereby be
     a Base Rate Advance  [and that such Base Rate  Advance be converted  into a
     LIBOR  Advance on the third  Business  Day  following  your receipt of this
     notice.]

         The  Borrower  hereby  acknowledges  that,  pursuant  to the  Liquidity
Agreement,  (A) the making of the Final  Advance as  requested by this Notice of
Borrowing shall  automatically  and irrevocably  terminate the obligation of the
Liquidity Provider to make further Advances under the Liquidity  Agreement;  and
(B)  following  the  making  by the  Liquidity  Provider  of the  Final  Advance
requested by this Notice of  Borrowing,  the  Borrower  shall not be entitled to
request any further Advances under the Liquidity Agreement.

         IN WITNESS WHEREOF, the Borrower has executed and delivered this Notice
of Borrowing as of the ____ day of ___________, ____.


                                WILMINGTON TRUST COMPANY,
                                    not in its individual capacity but solely as
                                    Subordination Agent, as Borrower



                                By:_________________________________
                                   Name:
                                   Title:







- ----------

 Bracketed language may be included at Borrower's option.






                 SCHEDULE I TO FINAL ADVANCE NOTICE OF BORROWING

[Insert  Copy  of  Computations  in  accordance  with  Final  Advance  Notice of
Borrowing]



                                                                      Annex V to
                                                      Revolving Credit Agreement



                              NOTICE OF TERMINATION



                                                      [Date]

Wilmington Trust Company,
  as Subordination Agent, as Borrower
Rodney Square North
1100 North Market Square
Wilmington, DE 19890-0001

Attention:  Corporate Trust Administration

           Revolving  Credit  Agreement  dated as of November  3, 1998,  between
           Wilmington  Trust  Company,  as  Subordination  Agent,  as agent  and
           trustee   for   the   Continental   Airlines   Pass   Through   Trust
           1998-3B-[O/S], as Borrower, and Morgan Stanley Capital Services, Inc.
           (the "LIQUIDITY AGREEMENT")

Ladies and Gentlemen:

         You are hereby  notified that pursuant to Section 6.01 of the Liquidity
Agreement,  by reason of the occurrence of a Liquidity  Event of Default and the
existence of a Performing  Note  Deficiency  (each as defined  therein),  we are
giving this notice to you in order to cause (i) our obligations to make Advances
(as defined  therein) under such  Liquidity  Agreement to terminate on the fifth
Business  Day after the date on which you  receive  this  notice and (ii) you to
request a Final Advance under the Liquidity Agreement pursuant to Section 3.6(i)
of the  Intercreditor  Agreement  (as defined in the  Liquidity  Agreement) as a
consequence of your receipt of this notice.






         THIS  NOTICE IS THE  "NOTICE  OF  TERMINATION"  PROVIDED  FOR UNDER THE
LIQUIDITY  AGREEMENT.  OUR  OBLIGATIONS  TO MAKE  ADVANCES  UNDER THE  LIQUIDITY
AGREEMENT  WILL  TERMINATE ON THE FIFTH BUSINESS DAY AFTER THE DATE ON WHICH YOU
RECEIVE THIS NOTICE.

                                              Very truly yours,

                                              MORGAN STANLEY
                                               CAPITAL SERVICES, INC.,
                                                as Liquidity Provider



                                              By:___________________________
                                                 Name:
                                                 Title:

cc:   Wilmington Trust Company,
      as Class B Trustee




                                                                     Annex VI to
                                                      Revolving Credit Agreement


                    NOTICE OF REPLACEMENT SUBORDINATION AGENT

[Date]
Attention:

           Revolving  Credit  Agreement  dated as of November  3, 1998,  between
           Wilmington  Trust  Company,  as  Subordination  Agent,  as agent  and
           trustee   for   the   Continental   Airlines   Pass   Through   Trust
           1998-3B-[O/S], as Borrower, and Morgan Stanley Capital Services, Inc.
           (the "LIQUIDITY AGREEMENT")

Ladies and Gentlemen:

         For value received,  the  undersigned  beneficiary  hereby  irrevocably
transfers to:

                         ------------------------------
                              [Name of Transferee]


                         ------------------------------
                             [Address of Transferee]

all rights and  obligations  of the  undersigned as Borrower under the Liquidity
Agreement  referred to above.  The transferee  has succeeded the  undersigned as
Subordination  Agent under the Intercreditor  Agreement referred to in the first
paragraph of the  Liquidity  Agreement,  pursuant to the terms of Section 8.1 of
the Intercreditor Agreement.

         By this transfer,  all rights of the  undersigned as Borrower under the
Liquidity  Agreement are transferred to the transferee and the transferee  shall
hereafter  have the sole  rights and  obligations  as Borrower  thereunder.  The
undersigned  shall pay any costs and expenses of such transfer,  including,  but
not limited to, transfer taxes or governmental charges.






         We ask that this transfer be effective as of _______________, ____.

                                WILMINGTON TRUST COMPANY,
                                    not in its individual capacity but solely as
                                    Subordination Agent, as Borrower



                                By:_________________________________
                                   Name:
                                   Title:



                                                                       EXECUTION


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

                           REVOLVING CREDIT AGREEMENT
                                   (1998-3C-1)


                          Dated as of November 3, 1998

                                     between

                            WILMINGTON TRUST COMPANY,

                             as Subordination Agent,
                          as agent and trustee for the
                Continental Airlines Pass Through Trust 1998-3C-1

                                   as Borrower

                                       and

                      MORGAN STANLEY CAPITAL SERVICES, INC.

                              as Liquidity Provider

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

                                   Relating to

                Continental Airlines Pass Through Trust 1998-3C-1
              7.08% Continental Airlines Pass Through Certificates,
                                Series 1998-3C-1



                               TABLE OF CONTENTS

                                                                            PAGE
                                                                            ----


                             ARTICLE I DEFINITIONS
      Section 1.01.  Certain Defined Terms.....................................1

                  ARTICLE II AMOUNT AND TERMS OF THE COMMITMENT
      Section 2.01.  The Advances..............................................7
      Section 2.02.  Making the Advances.......................................7
      Section 2.03.  Fees    9
      Section 2.04.  Reduction or Termination of the Maximum Commitment........9
      Section 2.05.  Repayments of Interest Advances or the Final Advance.....10
      Section 2.06.  Repayments of Provider Advances..........................10
      Section 2.07.  Payments to the Liquidity Provider Under the
                     Intercreditor Agreement..................................11
      Section 2.08.  Book Entries.............................................12
      Section 2.09.  Payments from Available Funds Only.......................12
      Section 2.10.  Extension of the Expiry Date; Non-Extension Advance......12

                     ARTICLE III OBLIGATIONS OF THE BORROWER
      Section 3.01.  Increased Costs..........................................12
      Section 3.02.  Capital Adequacy.........................................13
      Section 3.03.  Payments Free of Deductions..............................14
      Section 3.04.  Payments.................................................15
      Section 3.05.  Computations.............................................15
      Section 3.06.  Payment on Non-Business Days.............................15
      Section 3.07.  Interest15
      Section 3.08.  Replacement of Borrower..................................17
      Section 3.09.  Funding Loss Indemnification.............................17
      Section 3.10.  Illegality...............................................17

                         ARTICLE IV CONDITIONS PRECEDENT
      Section 4.01.  Conditions Precedent to Effectiveness of Section 2.01....18
      Section 4.02.  Conditions Precedent to Borrowing........................19

                               ARTICLE V COVENANTS
      Section 5.01.  Affirmative Covenants of the Borrower....................20
      Section 5.02.  Negative Covenants of the Borrower.......................20

                     ARTICLE VI LIQUIDITY EVENTS OF DEFAULT
      Section 6.01.  Liquidity Events of Default..............................20

                            ARTICLE VII MISCELLANEOUS
      Section 7.01.  Amendments, Etc..........................................21
      Section 7.02.  Notices, Etc.............................................21
      Section 7.03.  No Waiver; Remedies......................................22
      Section 7.04.  Further Assurances.......................................22



                                TABLE OF CONTENTS
                                   (CONTINUED)

      Section 7.05.  Indemnification; Survival of Certain Provisions..........22
      Section 7.06.  Liability of the Liquidity Provider......................23
      Section 7.07.  Costs, Expenses and Taxes................................23
      Section 7.08.  Binding Effect; Participations...........................24
      Section 7.09.  Severability.............................................25
      Section 7.10.  Governing Law............................................25
      Section 7.11.  Submission to Jurisdiction; Waiver of Jury Trial;
                     Waiver of Immunity.......................................26
      Section 7.12.  Execution in Counterparts................................27
      Section 7.13.  Entirety.................................................27
      Section 7.14.  Headings.................................................27
      Section 7.15.  Transfer.................................................27
      Section 7.16.  Liquidity Provider's Obligation To Make Advances.........27



                                TABLE OF CONTENTS
                                   (CONTINUED)


ANNEX I        Interest Advance Notice of Borrowing

ANNEX II       Non-Extension Advance Notice of Borrowing

ANNEX III      Downgrade Advance Notice of Borrowing

ANNEX IV       Final Advance Notice of Borrowing

ANNEX V        Notice of Termination

ANNEX VI       Notice of Replacement Subordination Agent



                           REVOLVING CREDIT AGREEMENT

          This REVOLVING CREDIT AGREEMENT dated as of November 3, 1998,  between
WILMINGTON TRUST COMPANY, a Delaware corporation, not in its individual capacity
but solely as  Subordination  Agent under the  Intercreditor  Agreement (each as
defined below),  as agent and trustee for the Class C-1 Trust (as defined below)
(the  "BORROWER"),  and MORGAN  STANLEY  CAPITAL  SERVICES,  INC., a corporation
organized under the laws of the State of Delaware (the "LIQUIDITY PROVIDER").

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

          WHEREAS,  pursuant to the Class C-1 Trust Agreement (such term and all
other  capitalized terms used in these recitals having the meanings set forth or
referred  to in  Section  1.01),  the Class C-1 Trust is  issuing  the Class C-1
Certificates; and

          WHEREAS,  the  Borrower,  in order to support the timely  payment of a
portion of the interest on the Class C-1  Certificates  in accordance with their
terms,  has  requested  the  Liquidity  Provider  to enter into this  Agreement,
providing in part for the Borrower to request in  specified  circumstances  that
Advances be made hereunder.

          WHEREAS,  the  Liquidity  Provider has requested  Morgan  Stanley Dean
Witter & Co. (the  "GUARANTOR") to enter into a Guarantee  Agreement,  providing
for the full and unconditional guarantee of the Liquidity Provider's obligations
under this Agreement (the "GUARANTEE AGREEMENT").

          NOW, THEREFORE,  in consideration of the premises,  the parties hereto
agree as follows:

                                    ARTICLE I

                                   DEFINITIONS

          Section 1.01. CERTAIN DEFINED TERMS. (a) DEFINITIONS.  As used in this
Agreement  and unless  otherwise  expressly  indicated,  or unless  the  context
clearly  requires  otherwise,  the  following  capitalized  terms shall have the
following respective meanings for all purposes of this Agreement:

          "ADDITIONAL  COST" has the  meaning  assigned  to such term in Section
     3.01.

          "ADVANCE"  means an  Interest  Advance,  a Final  Advance,  a Provider
     Advance,  an Applied Provider Advance or an Unpaid Advance, as the case may
     be.

          "APPLICABLE  LIQUIDITY RATE" has the meaning  assigned to such term in
     Section 3.07(g).



          "APPLICABLE  MARGIN"  means (x) with respect to any Unpaid  Advance or
     Applied  Provider  Advance,  1.75% per  annum,  or (y) with  respect to any
     Unapplied Provider Advance,  the rate per annum specified in the Fee Letter
     applicable to this Agreement.

          "APPLIED  DOWNGRADE  ADVANCE" has the meaning assigned to such term in
     Section 2.06(a).

          "APPLIED  NON-EXTENSION ADVANCE" has the meaning assigned to such term
     in Section 2.06(a).

          "APPLIED  PROVIDER  ADVANCE" has the meaning  assigned to such term in
     Section 2.06(a).

          "ASSIGNMENT  AND  ASSUMPTION   AGREEMENT"  means  the  Assignment  and
     Assumption  to be entered  into between the Borrower and the trustee of the
     Successor  Trust,  substantially  in the  form of  Exhibit  C to the  Trust
     Supplement No.  1998-3C-1-O,  dated as of the date hereof,  relating to the
     Class C-1 Trust.

          "BASE RATE" means a fluctuating interest rate per annum in effect from
     time to time,  which rate per annum  shall at all times be equal to (a) the
     weighted average of the rates on overnight Federal funds  transactions with
     members of the Federal Reserve System arranged by Federal funds brokers, as
     published for such day (or, if such day is not a Business Day, for the next
     preceding Business Day) by the Federal Reserve Bank of New York, or if such
     rate is not so published for any day that is a Business Day, the average of
     the quotations for such day for such transactions received by the Liquidity
     Provider from three Federal funds brokers of recognized  standing  selected
     by it, plus (b) one-quarter of one percent (1/4 of 1%).

          "BASE RATE  ADVANCE"  means an Advance  that bears  interest at a rate
     based upon the Base Rate.

          "BORROWER"  has the  meaning  assigned  to such term in the recital of
     parties to this Agreement.

          "BORROWING"  means the making of Advances  requested  by delivery of a
     Notice of Borrowing.

          "BUSINESS  DAY" means any day other than a Saturday or Sunday or a day
     on which  commercial  banks are required or authorized to close in Houston,
     Texas,  New York,  New York,  or, so long as any Class C-1  Certificate  is
     outstanding,  the  city and  state in which  the  Class  C-1  Trustee,  the
     Borrower  or any Loan  Trustee  maintains  its  Corporate  Trust  Office or
     receives or disburses funds, and, if the applicable Business Day relates to
     any Advance or other amount  bearing  interest  based on the LIBOR Rate, on
     which dealings are carried on in the London interbank market.

          "DEPOSITS"  has the  meaning  assigned  to such  terms in the  Deposit
     Agreement.



          "DEPOSITARY"  has the  meaning  assigned  to such term in the  Deposit
     Agreement.

          "DEPOSIT AGREEMENT" means the Deposit Agreement dated November 3, 1998
     between First  Security  Bank,  National  Association,  as Escrow Agent and
     Credit Suisse First Boston,  New York Branch, as Depositary,  pertaining to
     the  Class  C-1  Certificates,  as the same  may be  amended,  modified  or
     supplemented from time to time in accordance with the terms thereof.

          "DOWNGRADE ADVANCE" means an Advance made pursuant to Section 2.02(c).

          "EFFECTIVE  DATE" has the  meaning  specified  in  Section  4.01.  The
     delivery of the  certificate  of the  Liquidity  Provider  contemplated  by
     Section  4.01(e) shall be conclusive  evidence that the Effective  Date has
     occurred.

          "EXCLUDED  TAXES" means (i) taxes imposed on the overall net income of
     the Liquidity  Provider or of its Facility Office by the jurisdiction where
     such  Liquidity  Provider's  principal  office or such  Facility  Office is
     located, and (ii) Excluded Withholding Taxes.

          "EXCLUDED  WITHHOLDING  TAXES" means (i) withholding  Taxes imposed by
     the United  States  except (but only in the case of a  successor  Liquidity
     Provider  organized  under the laws of a  jurisdiction  outside  the United
     States) to the extent that such United States withholding Taxes are imposed
     as a result of any  change in  applicable  law  (excluding  from  change in
     applicable  law for this purpose a change in an applicable  treaty or other
     change in law  affecting  the  applicability  of a  treaty)  after the date
     hereof,  or in the case of a  successor  Liquidity  Provider  (including  a
     transferee of an Advance) or Facility Office,  after the date on which such
     successor  Liquidity Provider obtains its interest or on which the Facility
     Office is changed,  and (ii) any  withholding  Taxes  imposed by the United
     States which are imposed or increased as a result of the Liquidity Provider
     failing to deliver to the  Borrower  any  certificate  or  document  (which
     certificate  or  document  in the  good  faith  judgment  of the  Liquidity
     Provider it is legally  entitled to provide) which is reasonably  requested
     by the Borrower to establish  that payments under this Agreement are exempt
     from (or entitled to a reduced rate of) withholding Tax.

          "EXPENSES"  means  liabilities,   obligations,  damages,  settlements,
     penalties,  claims,  actions,  suits,  costs,  expenses,  and disbursements
     (including, without limitation,  reasonable fees and disbursements of legal
     counsel  and costs of  investigation),  provided  that  Expenses  shall not
     include any Taxes.

          "EXPIRY DATE" means November 1, 1999, initially,  or any date to which
     the Expiry Date is extended pursuant to Section 2.10.

          "FACILITY OFFICE" means the office of the Liquidity Provider presently
     located  at New  York,  New York,  or such  other  office as the  Liquidity
     Provider  from time to time shall  notify  the  Borrower  as its  "Facility
     Office"  hereunder;  PROVIDED that the Liquidity  Provider shall not change



     its  Facility  Office to a Facility  Office  outside  the United  States of
     America except in accordance with Section 3.01, 3.02 or 3.03 hereof.

          "FINAL ADVANCE" means an Advance made pursuant to Section 2.02(d).

          "GUARANTOR"  has the meaning  assigned to such term in the preliminary
     statements of this Agreement.

          "GUARANTEE  AGREEMENT"  has the  meaning  assigned to such term in the
     preliminary statements of this Agreement.

          "INTERCREDITOR  AGREEMENT" means the Intercreditor Agreement dated the
     date hereof,  among the  Trustees,  the Liquidity  Provider,  the liquidity
     provider under each Liquidity  Facility (other than this Agreement) and the
     Subordination Agent, as the same may be amended,  supplemented or otherwise
     modified from time to time in accordance with its terms.

          "INTEREST ADVANCE" means an Advance made pursuant to Section 2.02(a).

          "INTEREST  PERIOD" means,  with respect to any LIBOR Advance,  each of
     the following periods:

          (i)  the period  beginning on the third Business Day following  either
               (x) the Liquidity  Provider's  receipt of the Notice of Borrowing
               for such LIBOR  Advance or (y) the  withdrawal  of funds from the
               Class  C-1 Cash  Collateral  Account  for the  purpose  of paying
               interest on the Class C-1 Certificates as contemplated by Section
               2.06(a)  hereof and, in either  case,  ending on the next Regular
               Distribution Date; and

          (ii) each  subsequent  period  commencing  on  the  last  day  of  the
               immediately  preceding  Interest  Period  and  ending on the next
               Regular Distribution Date;

     PROVIDED,  HOWEVER,  that if (x) the Final Advance shall have been made, or
     (y) other  outstanding  Advances  shall have been  converted into the Final
     Advance, then the Interest Periods shall be successive periods of one month
     beginning on the third  Business Day  following  the  Liquidity  Provider's
     receipt of the Notice of Borrowing  for such Final  Advance (in the case of
     clause  (x)  above)  or  the  Regular   Distribution  Date  following  such
     conversion (in the case of clause (y) above).

          "LIBOR ADVANCE" means an Advance bearing interest at a rate based upon
     the LIBOR Rate.

          "LIBOR RATE" means, with respect to any Interest Period,

          (i)  the rate per  annum  appearing  on  display  page  3750  (British
               Bankers  Association-LIBOR)  of the Dow Jones Markets Service (or



               any successor or substitute therefor) at approximately 11:00 A.M.
               (London  time) two  Business  Days  before  the first day of such
               Interest Period,  as the rate for dollar deposits with a maturity
               comparable to such Interest Period, or

          (ii) if the  rate  calculated  pursuant  to  clause  (i)  above is not
               available,  the average (rounded  upwards,  if necessary,  to the
               next  1/16 of 1%) of the rates  per  annum at which  deposits  in
               dollars  are offered for the  relevant  Interest  Period by three
               banks of recognized  standing selected by the Liquidity  Provider
               in the  London  interbank  market  at  approximately  11:00  A.M.
               (London  time) two  Business  Days  before  the first day of such
               Interest Period in an amount approximately equal to the principal
               amount of the LIBOR Advance to which such  Interest  Period is to
               apply and for a period comparable to such Interest Period.

          "LIQUIDITY  EVENT OF DEFAULT"  means the  occurrence of either (a) the
     Acceleration  of all of the Equipment Notes (provided that, with respect to
     the period prior to the Delivery  Period Expiry Date,  such Equipment Notes
     have an aggregate  outstanding principal balance in excess of $300,000,000)
     or (b) a Continental Bankruptcy Event.

          "LIQUIDITY  INDEMNITEE"  means (i) the  Liquidity  Provider,  (ii) the
     Guarantor, (iii) the respective directors,  officers,  employees and agents
     of the Liquidity  Provider and the  Guarantor,  and (iv) the successors and
     permitted  assigns of the persons  described in clauses (i) through  (iii),
     inclusive.

          "LIQUIDITY  PROVIDER"  has the  meaning  assigned  to such term in the
     recital of parties to this Agreement.

          "MAXIMUM  AVAILABLE  COMMITMENT"  shall  mean,  subject to the proviso
     contained  in the  third  sentence  of  Section  2.02(a),  at any  time  of
     determination,  (a) the  Maximum  Commitment  at  such  time  LESS  (b) the
     aggregate  amount  of each  Interest  Advance  outstanding  at  such  time;
     PROVIDED that following a Provider Advance or a Final Advance,  the Maximum
     Available Commitment shall be zero.

          "MAXIMUM  COMMITMENT" means initially  $9,998,836,  as the same may be
     reduced from time to time in accordance with Section 2.04(a).

          "NON-EXTENSION  ADVANCE"  means an Advance  made  pursuant  to Section
     2.02(b).

          "NOTICE OF BORROWING" has the meaning specified in Section 2.02(e).

          "NOTICE OF REPLACEMENT  SUBORDINATION AGENT" has the meaning specified
     in Section 3.08.

          "PERFORMING NOTE DEFICIENCY"  means any time that less than 65% of the
     then  aggregate  outstanding  principal  amount of all Equipment  Notes are
     Performing Equipment Notes.



          "PROSPECTUS  SUPPLEMENT" means the Prospectus Supplement dated October
     21, 1998 relating to the Certificates, as such Prospectus Supplement may be
     amended or supplemented.

          "PROVIDER  ADVANCE"  means  a  Downgrade  Advance  or a  Non-Extension
     Advance.

          "REGULATORY  CHANGE" has the meaning  assigned to such term in Section
     3.01.

          "REPLENISHMENT  AMOUNT"  has the  meaning  assigned  to  such  term in
     Section 2.06(b).

          "REQUIRED  AMOUNT" means, for any day, the sum of the aggregate amount
     of interest,  calculated at the rate per annum equal to the Stated Interest
     Rate for the Class C-1 Certificates, that would be payable on the Class C-1
     Certificates   on  each  of  the  three   successive   semiannual   Regular
     Distribution  Dates  immediately  following  such day or,  if such day is a
     Regular  Distribution  Date, on such day and the  succeeding two semiannual
     Regular  Distribution  Dates,  in each case  calculated on the basis of the
     Pool Balance of the Class C-1  Certificates  on such day and without regard
     to expected future payments of principal on the Class C-1 Certificates.

          "SUCCESSOR  TRUST"  means  Continental  Airlines  Pass  Through  Trust
     1998-3C-1-S.

          "TERMINATION  DATE" means the earliest to occur of the following:  (i)
     the  Expiry  Date;  (ii) the date on which  the  Borrower  delivers  to the
     Liquidity  Provider a certificate,  signed by a Responsible  Officer of the
     Borrower,  certifying that all of the Class C-1 Certificates have been paid
     in full (or provision has been made for such payment in accordance with the
     Intercreditor  Agreement  and the Trust  Agreements)  or are  otherwise  no
     longer entitled to the benefits of this Agreement;  (iii) the date on which
     the Borrower delivers to the Liquidity Provider a certificate,  signed by a
     Responsible  Officer  of  the  Borrower,   certifying  that  a  Replacement
     Liquidity Facility has been substituted for this Agreement in full pursuant
     to Section 3.6(e) of the Intercreditor  Agreement;  (iv) the fifth Business
     Day following the receipt by the Borrower of a Termination  Notice from the
     Liquidity  Provider  pursuant to Section 6.01  hereof;  and (v) the date on
     which no Advance is or may (including by reason of  reinstatement as herein
     provided) become available for a Borrowing hereunder.

          "TERMINATION NOTICE" means the Notice of Termination  substantially in
     the form of Annex V to this Agreement.

          "TRANSFEREE" has the meaning assigned to such term in Section 7.08(b).

          "UNAPPLIED  DOWNGRADE  ADVANCE" means any Downgrade Advance other than
     an Applied Downgrade Advance.

          "UNAPPLIED  NON-EXTENSION  ADVANCE"  means any  Non-Extension  Advance
     other than an Applied Non-Extension Advance.



          "UNAPPLIED  PROVIDER ADVANCE" means any Provider Advance other than an
     Applied Provider Advance.

          "UNPAID  ADVANCE"  has the  meaning  assigned  to such term in Section
     2.05.

          (b) TERMS DEFINED IN THE INTERCREDITOR  AGREEMENT. For all purposes of
this Agreement,  the following terms shall have the respective meanings assigned
to such terms in the Intercreditor Agreement:

     "ACCELERATION",   "CERTIFICATES",  "CLASS  A-1  CERTIFICATES",  "CLASS  A-2
     CERTIFICATES", "CLASS B CERTIFICATES", "CLASS C-1 CASH COLLATERAL ACCOUNT",
     "CLASS  C-1  CERTIFICATES",  "CLASS  C-1  CERTIFICATEHOLDERS",  "CLASS  C-1
     TRUST",  "CLASS  C-1 TRUST  AGREEMENT",  "CLASS  C-1  TRUSTEE",  "CLASS C-2
     CERTIFICATES",  "CLOSING  DATE",  "CONTINENTAL",   "CONTINENTAL  BANKRUPTCY
     EVENT",  "CONTROLLING  PARTY",  "CORPORATE TRUST OFFICE",  "DELIVERY PERIOD
     EXPIRY  DATE",  "DISTRIBUTION  DATE",  "DOWNGRADED  FACILITY",   "EQUIPMENT
     NOTES",  "FEE  LETTER",   "FINAL  LEGAL  DISTRIBUTION   DATE",   "FINANCING
     AGREEMENT",  "INDENTURE",  "INTEREST PAYMENT DATE",  "INVESTMENT EARNINGS",
     "LEASED AIRCRAFT",  "LIQUIDITY FACILITY",  "LIQUIDITY  OBLIGATIONS",  "LOAN
     TRUSTEE",  "MOODY'S",  "NON-EXTENDED FACILITY",  "NOTE PURCHASE AGREEMENT",
     "OPERATIVE  AGREEMENTS",   "OWNED  AIRCRAFT",   "PARTICIPATION  AGREEMENT",
     "PERFORMING  EQUIPMENT NOTE",  "PERSON",  "POOL BALANCE",  "RATING AGENCY",
     "RATINGS CONFIRMATION", "REGULAR DISTRIBUTION Date", "REPLACEMENT LIQUIDITY
     FACILITY",  "RESPONSIBLE OFFICER",  "SCHEDULED PAYMENT", "SPECIAL PAYMENT",
     "STANDARD  &  Poor's",  "STATED  INTEREST  RATE",   "SUBORDINATION  AGENT",
     "TAXES",  "THRESHOLD RATING",  "TRANSFER",  "TRUST AGREEMENTS",  "TRUSTEE",
     "UNDERWRITERS", "UNDERWRITING AGREEMENT", and "WRITTEN NOTICE".

                                   ARTICLE II

                       AMOUNT AND TERMS OF THE COMMITMENT

          Section 2.01. THE ADVANCES.  The Liquidity Provider hereby irrevocably
agrees,  on the terms and conditions  hereinafter set forth, to make Advances to
the  Borrower  from time to time on any  Business Day during the period from the
Effective  Date until 12:00 Noon (New York City time) on the Expiry Date (unless
the  obligations  of the  Liquidity  Provider  shall be  earlier  terminated  in
accordance with the terms of Section 2.04(b)) in an aggregate amount at any time
outstanding not to exceed the Maximum Commitment.

          Section 2.02. MAKING THE ADVANCES. (a) Interest Advances shall be made
in one or more  Borrowings by delivery to the Liquidity  Provider of one or more
written and completed  Notices of Borrowing in substantially the form of Annex I
attached hereto,  signed by a Responsible Officer of the Borrower,  in an amount
not  exceeding the Maximum  Available  Commitment at such time and shall be used
solely for the payment when due of interest on the Class C-1 Certificates at the
Stated  Interest  Rate  therefor  in  accordance  with  Section  3.6(a)  of  the
Intercreditor   Agreement.   Each   Interest   Advance  made   hereunder   shall
automatically  reduce the Maximum Available  Commitment and the amount available
to be borrowed  hereunder by subsequent  Advances by the amount of such Interest



Advance  (subject  to  reinstatement  as provided  in the next  sentence).  Upon
repayment  to the  Liquidity  Provider  in full of the  amount  of any  Interest
Advance made pursuant to this Section  2.02(a),  together with accrued  interest
thereon  (as  provided  herein),  the  Maximum  Available  Commitment  shall  be
reinstated by the amount of such repaid Interest Advance,  but not to exceed the
Maximum Commitment;  PROVIDED,  HOWEVER,  that the Maximum Available  Commitment
shall not be so reinstated at any time if (i) a Liquidity Event of Default shall
have occurred and be continuing and (ii) there is a Performing Note Deficiency.

          (b) Non-Extension  Advance shall be made in a single Borrowing if this
Agreement is not extended in accordance with Section 3.6(d) of the Intercreditor
Agreement  (unless a Replacement  Liquidity  Facility to replace this  Agreement
shall have been delivered to the Borrower as contemplated by said Section 3.6(d)
within the time period  specified in such  Section) by delivery to the Liquidity
Provider of a written and  completed  Notice of Borrowing in  substantially  the
form of Annex  II  attached  hereto,  signed  by a  Responsible  Officer  of the
Borrower,  in an amount equal to the Maximum Available  Commitment at such time,
and shall be used to fund the Class C-1 Cash  Collateral  Account in  accordance
with said Section 3.6(d) and Section 3.6(f) of the Intercreditor Agreement.

          (c) A Downgrade  Advance  shall be made in a single  Borrowing  upon a
downgrading of the Guarantor's short-term unsecured debt rating issued by either
Rating Agency below the applicable  Threshold Rating or the Guarantee  Agreement
ceasing to be in full force and effect or becoming  invalid or  unenforceable or
the  Guarantor  denying its  liability  thereunder  (as  provided for in Section
3.6(c) of the Intercreditor  Agreement) unless a Replacement  Liquidity Facility
to replace this Agreement shall have been  previously  delivered to the Borrower
in accordance with said Section 3.6(c), by delivery to the Liquidity Provider of
a written and completed Notice of Borrowing in  substantially  the form of Annex
III attached  hereto,  signed by a Responsible  Officer of the  Borrower,  in an
amount equal to the Maximum Available Commitment at such time, and shall be used
to fund the Class C-1 Cash  Collateral  Account in accordance  with said Section
3.6(c) and Section 3.6(f) of the Intercreditor Agreement.

          (d) A Final  Advance  shall  be made in a  single  Borrowing  upon the
receipt by the  Borrower of a  Termination  Notice from the  Liquidity  Provider
pursuant  to Section  6.01 hereof by  delivery  to the  Liquidity  Provider of a
written and completed Notice of Borrowing in substantially  the form of Annex IV
attached hereto,  signed by a Responsible Officer of the Borrower,  in an amount
equal to the Maximum  Available  Commitment  at such time,  and shall be used to
fund the Class C-1 Cash Collateral Account (in accordance with Section 3.6(i) of
the Intercreditor Agreement) and Section 3.6(f) of the Intercreditor Agreement.

          (e) Each  Borrowing  shall be made on notice in  writing (a "NOTICE OF
BORROWING")  in  substantially  the form required by Section  2.02(a),  2.02(b),
2.02(c) or 2.02(d),  as the case may be, given by the Borrower to the  Liquidity
Provider.  If a Notice of  Borrowing  is delivered by the Borrower in respect of
any  Borrowing no later than 1:00 p.m.  (New York City time) on a Business  Day,
upon  satisfaction  of the  conditions  precedent set forth in Section 4.02 with
respect to a requested Borrowing, the Liquidity Provider shall make available to
the Borrower,  in accordance with its payment  instructions,  the amount of such



Borrowing in U.S. dollars and immediately available funds, before 4:00 p.m. (New
York City time) on such Business Day or on such later  Business Day specified in
such Notice of Borrowing.  If a Notice of Borrowing is delivered by the Borrower
in respect of any  Borrowing  after 1:00 p.m. (New York City time) on a Business
Day, upon  satisfaction  of the  conditions  precedent set forth in Section 4.02
with  respect  to a  requested  Borrowing,  the  Liquidity  Provider  shall make
available to the Borrower,  in  accordance  with its payment  instructions,  the
amount of such  Borrowing in U.S.  dollars and in immediately  available  funds,
before 12:00 Noon (New York City time) on the first  Business Day next following
the day of receipt of such Notice of  Borrowing  or on such later  Business  Day
specified by the Borrower in such Notice of Borrowing. Payments of proceeds of a
Borrowing  shall be made by wire transfer of immediately  available funds to the
Borrower in  accordance  with such wire  transfer  instructions  as the Borrower
shall furnish from time to time to the Liquidity Provider for such purpose. Each
Notice of Borrowing shall be irrevocable and binding on the Borrower.

          (f) Upon the making of any Advance  requested  pursuant to a Notice of
Borrowing, in accordance with the Borrower's payment instructions, the Liquidity
Provider shall be fully  discharged of its obligation  hereunder with respect to
such Notice of Borrowing,  and the Liquidity  Provider  shall not  thereafter be
obligated  to make any further  Advances  hereunder in respect of such Notice of
Borrowing to the Borrower or to any other Person. Notwithstanding the provisions
of  Section  2.02(e),  if the  Liquidity  Provider  makes an  Advance  requested
pursuant to a Notice of Borrowing  before 12:00 noon (New York City time) on the
second Business Day after the date of payment specified in said Section 2.02(e),
the Liquidity  Provider shall have fully  discharged its  obligations  hereunder
with  respect to such Advance and shall not be in default  hereunder.  Following
the making of any Advance pursuant to Section 2.02(b), (c) or (d) hereof to fund
the Class C-1 Cash  Collateral  Account,  the Liquidity  Provider  shall have no
interest in or rights to the Class C-1 Cash Collateral Account,  such Advance or
any other amounts from time to time on deposit in the Class C-1 Cash  Collateral
Account;  PROVIDED that the foregoing shall not affect or impair the obligations
of the  Subordination  Agent to make the  distributions  contemplated by Section
3.6(e) or (f) of the Intercreditor Agreement. By paying to the Borrower proceeds
of Advances  requested by the Borrower in accordance with the provisions of this
Agreement,  the Liquidity Provider makes no representation as to, and assumes no
responsibility for, the correctness or sufficiency for any purpose of the amount
of the Advances so made and requested.

          Section  2.03.  FEES.  The  Borrower  agrees  to pay to the  Liquidity
Provider the fees set forth in the Fee Letter applicable to this Agreement.

          Section 2.04. REDUCTION OR TERMINATION OF THE MAXIMUM COMMITMENT.

          (a) AUTOMATIC  REDUCTION.  Promptly  following  each date on which the
Required Amount is reduced as a result of a reduction in the Pool Balance of the
Class C-1 Certificates or otherwise,  the Maximum Commitment shall automatically
be reduced to an amount equal to such reduced  Required Amount (as calculated by
the Borrower). The Borrower shall give notice of any such automatic reduction of
the Maximum  Commitment  to the  Liquidity  Provider  within two  Business  Days



thereof. The failure by the Borrower to furnish any such notice shall not affect
such automatic reduction of the Maximum Commitment.

          (b)  TERMINATION.  Upon the  making of any  Provider  Advance or Final
Advance  hereunder or the occurrence of the Termination  Date, the obligation of
the Liquidity  Provider to make further Advances  hereunder shall  automatically
and irrevocably terminate, and the Borrower shall not be entitled to request any
further Borrowing hereunder.

          Section 2.05.  REPAYMENTS OF INTEREST  ADVANCES OR THE FINAL  ADVANCE.
Subject to Sections  2.06,  2.07 and 2.09 hereof,  the Borrower  hereby  agrees,
without notice of an Advance or demand for repayment from the Liquidity Provider
(which notice and demand are hereby waived by the Borrower), to pay, or to cause
to be paid,  to the  Liquidity  Provider  on each  date on which  the  Liquidity
Provider shall make an Interest Advance or the Final Advance, an amount equal to
(a) the amount of such Advance (any such Advance,  until repaid,  is referred to
herein as an "UNPAID  ADVANCE"),  plus (b)  interest  on the amount of each such
Unpaid  Advance as provided in Section  3.07  hereof;  PROVIDED  that if (i) the
Liquidity Provider shall make a Provider Advance at any time after making one or
more Interest  Advances which shall not have been repaid in accordance with this
Section 2.05 or (ii) this Liquidity Facility shall become a Downgraded  Facility
or Non-Extended  Facility at any time when  unreimbursed  Interest Advances have
reduced the Maximum  Available  Commitment to zero, then such Interest  Advances
shall  cease to  constitute  Unpaid  Advances  and  shall be deemed to have been
changed into an Applied Downgrade Advance or an Applied  Non-Extension  Advance,
as the case may be,  for all  purposes  of this  Agreement  (including,  without
limitation,  for the  purpose  of  determining  when such  Interest  Advance  is
required to be repaid to the Liquidity  Provider in accordance with Section 2.06
and for the  purposes  of  Section  2.06(b)).  The  Borrower  and the  Liquidity
Provider  agree that the  repayment in full of each  Interest  Advance and Final
Advance on the date such  Advance is made is  intended  to be a  contemporaneous
exchange for new value given to the Borrower by the Liquidity Provider.

          Section 2.06.  REPAYMENTS OF PROVIDER  ADVANCES.  (a) Amounts advanced
hereunder in respect of a Provider  Advance  shall be deposited in the Class C-1
Cash  Collateral  Account,  invested  and  withdrawn  from  the  Class  C-1 Cash
Collateral  Account  as  set  forth  in  Sections  3.6(c),  (d)  and  (f) of the
Intercreditor  Agreement.  The Borrower agrees to pay to the Liquidity Provider,
on each Regular Distribution Date,  commencing on the first Regular Distribution
Date after the making of a Provider Advance, interest on the principal amount of
any such Provider Advance as provided in Section 3.07; PROVIDED,  HOWEVER,  that
amounts  in  respect of a  Provider  Advance  withdrawn  from the Class C-1 Cash
Collateral  Account  for  the  purpose  of  paying  interest  on the  Class  C-1
Certificates  in accordance with Section 3.6(f) of the  Intercreditor  Agreement
(the amount of any such withdrawal being (y) in the case of a Downgrade Advance,
an "APPLIED DOWNGRADE  ADVANCE" and (z) in the case of a Non-Extension  Advance,
an "APPLIED  NON-EXTENSION  ADVANCE"  and,  together  with an Applied  Downgrade
Advance,  an "APPLIED  PROVIDER  ADVANCE") shall thereafter  (subject to Section
2.06(b)) be treated as an Interest  Advance under this Agreement for purposes of
determining the Applicable Liquidity Rate for interest payable thereon; PROVIDED
FURTHER,  HOWEVER,  that if,  following  the making of a Provider  Advance,  the
Liquidity  Provider  delivers a Termination  Notice to the Borrower  pursuant to
Section 6.01 hereof,  such  Provider  Advance  shall  thereafter be treated as a



Final Advance under this  Agreement for purposes of  determining  the Applicable
Liquidity Rate for interest payable  thereon.  Subject to Sections 2.07 and 2.09
hereof,  immediately  upon the withdrawal of any amounts from the Class C-1 Cash
Collateral  Account  on account  of a  reduction  in the  Required  Amount,  the
Borrower  shall  repay to the  Liquidity  Provider  a  portion  of the  Provider
Advances in a principal  amount equal to such  reduction,  plus  interest on the
principal amount prepaid as provided in Section 3.07 hereof.

          (b) At any time  when an  Applied  Provider  Advance  (or any  portion
thereof)  is  outstanding,  upon the  deposit  in the Class C-1 Cash  Collateral
Account  of any amount  pursuant  to clause  "THIRD"  of  Section  2.4(b) of the
Intercreditor  Agreement,  clause  "THIRD" of Section  3.2 of the  Intercreditor
Agreement or clause "FOURTH" of Section 3.3 of the Intercreditor  Agreement (any
such amount being a  "REPLENISHMENT  AMOUNT") for the purpose of replenishing or
increasing the balance  thereof up to the Required  Amount at such time, (i) the
aggregate  outstanding principal amount of all Applied Provider Advances (and of
Provider Advances treated as an Interest Advance for purposes of determining the
Applicable  Liquidity Rate for interest  payable thereon) shall be automatically
reduced  by the  amount  of such  Replenishment  Amount  and (ii) the  aggregate
outstanding  principal  amount  of all  Unapplied  Provider  Advances  shall  be
automatically increased by the amount of such Replenishment Amount.

          (c)  Upon  the  provision  of  a  Replacement  Liquidity  Facility  in
replacement  of  this  Agreement  in  accordance  with  Section  3.6(e)  of  the
Intercreditor  Agreement,  amounts  remaining  on  deposit in the Class C-1 Cash
Collateral  Account after giving effect to any Applied  Provider  Advance on the
date of such replacement shall be reimbursed to the Liquidity Provider, but only
to the extent  such  amounts  are  necessary  to repay in full to the  Liquidity
Provider all amounts owing to it hereunder.

          Section   2.07.   PAYMENTS  TO  THE  LIQUIDITY   PROVIDER   UNDER  THE
INTERCREDITOR  AGREEMENT.  In order to provide for payment or  repayment  to the
Liquidity  Provider  of  any  amounts  hereunder,  the  Intercreditor  Agreement
provides  that amounts  available  and referred to in Articles II and III of the
Intercreditor  Agreement,  to  the  extent  payable  to the  Liquidity  Provider
pursuant  to  the  terms  of the  Intercreditor  Agreement  (including,  without
limitation, Section 3.6(f) of the Intercreditor Agreement), shall be paid to the
Liquidity Provider in accordance with the terms thereof.  Amounts so paid to the
Liquidity  Provider  shall be applied by the  Liquidity  Provider  to  Liquidity
Obligations then due and payable in accordance with the Intercreditor  Agreement
or, if not provided for in the Intercreditor  Agreement,  then in such manner as
the Liquidity Provider shall deem appropriate.

          Section 2.08. BOOK ENTRIES.  The Liquidity  Provider shall maintain in
accordance  with its usual  practice  an  account  or  accounts  evidencing  the
indebtedness of the Borrower  resulting from Advances made from time to time and
the amounts of principal  and interest  payable  hereunder and paid from time to
time in respect thereof;  PROVIDED,  HOWEVER,  that the failure by the Liquidity
Provider to maintain such account or accounts  shall not affect the  obligations
of the Borrower in respect of Advances.



          Section 2.09.  PAYMENTS FROM AVAILABLE  FUNDS ONLY. All payments to be
made by the Borrower  under this  Agreement  shall be made only from the amounts
that constitute  Scheduled Payments,  Special Payments or payments under Section
8.1 of the  Participation  Agreements with respect to Owned  Aircraft,  payments
under  Section  9.1 of the  Participation  Agreements  with  respect  to  Leased
Aircraft  and Section 6 of the Note  Purchase  Agreement  and only to the extent
that the Borrower shall have sufficient  income or proceeds  therefrom to enable
the Borrower to make payments in  accordance  with the terms hereof after giving
effect to the  priority of payments  provisions  set forth in the  Intercreditor
Agreement.  The  Liquidity  Provider  agrees  that it will  look  solely to such
amounts  to the extent  available  for  distribution  to it as  provided  in the
Intercreditor  Agreement  and  this  Agreement  and that  the  Borrower,  in its
individual  capacity,  is not personally liable to it for any amounts payable or
liability under this Agreement  except as expressly  provided in this Agreement,
the Intercreditor Agreement or any Participation  Agreement.  Amounts on deposit
in the Class C-1 Cash  Collateral  Account shall be available to the Borrower to
make  payments  under this  Agreement  only to the  extent and for the  purposes
expressly contemplated in Section 3.6(f) of the Intercreditor Agreement.

          Section 2.10. EXTENSION OF THE EXPIRY DATE; NON-EXTENSION ADVANCE. The
Expiry Date shall be automatically extended,  effective on the 25th day prior to
each  Expiry  Date  (unless  such Expiry Date is on or after the date that is 15
days after the Final Legal  Distribution  Date for the Class C-1  Certificates),
for a period of 364 days after such Expiry Date (unless the  obligations  of the
Liquidity  Provider are earlier terminated in accordance with the terms hereof),
without the  necessity of any act on the part of the  Borrower or the  Liquidity
Provider,  unless the Liquidity Provider shall advise the Borrower prior to such
25th day that it does not agree to such  extension of such Expiry Date, in which
event (and if the Liquidity  Provider shall not have been replaced in accordance
with Section  3.6(e) of the  Intercreditor  Agreement),  the  Borrower  shall be
entitled on and after such 25th day (but prior to such Expiry Date) to request a
Non-Extension  Advance in  accordance  with Section  2.02(b)  hereof and Section
3.6(d) of the Intercreditor Agreement.

                                   ARTICLE III

                           OBLIGATIONS OF THE BORROWER

          Section 3.01. INCREASED COSTS. The Borrower shall pay to the Liquidity
Provider  from time to time such amounts as may be necessary to  compensate  the
Liquidity  Provider for any increased  costs incurred by the Liquidity  Provider
which are attributable to its making or maintaining any LIBOR Advances hereunder
or its obligation to make any such Advances  hereunder,  or any reduction in any
amount  receivable  by  the  Liquidity  Provider  under  this  Agreement  or the
Intercreditor Agreement in respect of any such Advances or such obligation (such
increases in costs and  reductions  in amounts  receivable  being herein  called
"ADDITIONAL Costs"),  resulting from any change after the date of this Agreement
in U.S. federal,  state,  municipal,  or foreign laws or regulations  (including
Regulation D of the Board of Governors of the Federal  Reserve  System),  or the
adoption  or making  after the date of this  Agreement  of any  interpretations,
directives, or requirements applying to a class of banks including the Liquidity
Provider  under any U.S.  federal,  state,  municipal,  or any  foreign  laws or
regulations  (whether or not having the force of law) by any court, central bank



or monetary authority charged with the interpretation or administration  thereof
(a "REGULATORY CHANGE"), which: (1) changes the basis of taxation of any amounts
payable to the Liquidity  Provider  under this  Agreement in respect of any such
Advances  (other than Excluded  Taxes);  or (2) imposes or modifies any reserve,
special  deposit,  compulsory  loan  or  similar  requirements  relating  to any
extensions of credit or other assets of, or any deposits with other  liabilities
of, the Liquidity Provider (including any such Advances or any deposits referred
to in the  definition  of LIBOR  Rate or  related  definitions).  The  Liquidity
Provider agrees to use reasonable efforts  (consistent with applicable legal and
regulatory  restrictions)  to change the  jurisdiction of its Facility Office if
making such change would avoid the need for, or reduce the amount of, any amount
payable  under this  Section  that may  thereafter  accrue and would not, in the
reasonable judgment of the Liquidity Provider,  be otherwise  disadvantageous to
the Liquidity Provider.

          The Liquidity Provider will notify the Borrower of any event occurring
after the date of this  Agreement  that will entitle the  Liquidity  Provider to
compensation  pursuant to this Section 3.01 as promptly as practicable  after it
obtains  knowledge  thereof and determines to request such  compensation,  which
notice shall describe in reasonable  detail the  calculation of the amounts owed
under this Section.  Determinations  by the  Liquidity  Provider for purposes of
this Section 3.01 of the effect of any Regulatory  Change on its costs of making
or maintaining  Advances or on amounts  receivable by it in respect of Advances,
and of the additional  amounts required to compensate the Liquidity  Provider in
respect of any  Additional  Costs,  shall be prima facie  evidence of the amount
owed under this Section.

          Notwithstanding  the preceding two paragraphs,  the Liquidity Provider
and the  Subordination  Agent agree that the initial  Liquidity  Provider (i.e.,
Morgan Stanley Capital Services,  Inc.) shall not be entitled to the benefits of
the preceding  two  paragraphs,  PROVIDED,  however,  any permitted  assignee or
participant of the initial  Liquidity  Provider which is a bank organized  under
the laws of the United  States or any State  thereof  shall be  entitled  to the
benefits of the preceding two paragraphs (subject,  in the case of any permitted
participant, to the limitation set forth in Section 7.08 hereof).

          Section 3.02.  CAPITAL ADEQUACY.  If (1) the adoption,  after the date
hereof, of any applicable governmental law, rule or regulation regarding capital
adequacy,  (2) any  change,  after the date  hereof,  in the  interpretation  or
administration  of any such law, rule or regulation by any central bank or other
governmental authority charged with the interpretation or administration thereof
or (3) compliance by the Liquidity  Provider or any corporation  controlling the
Liquidity  Provider  with  any  applicable   guideline  or  request  of  general
applicability,  issued  after  the date  hereof,  by any  central  bank or other
governmental authority (whether or not having the force of law) that constitutes
a change of the nature  described  in clause (2), has the effect of requiring an
increase in the amount of capital  required to be  maintained  by the  Liquidity
Provider  or any  corporation  controlling  the  Liquidity  Provider,  and  such
increase is based upon the Liquidity Provider's  obligations hereunder and other
similar obligations,  the Borrower shall pay to the Liquidity Provider from time
to time such  additional  amount or amounts as are necessary to  compensate  the
Liquidity  Provider  for such  portion of such  increase as shall be  reasonably
allocable to the Liquidity Provider's obligations to the Borrower hereunder. The



Liquidity Provider agrees to use reasonable efforts  (consistent with applicable
legal and regulatory  restrictions)  to change the  jurisdiction of its Facility
Office if making such change  would avoid the need for, or reduce the amount of,
any amount payable under this Section that may thereafter  accrue and would not,
in the reasonable  judgment of the Liquidity Provider,  be otherwise  materially
disadvantageous to the Liquidity Provider.

          The Liquidity Provider will notify the Borrower of any event occurring
after the date of this  Agreement  that will entitle the  Liquidity  Provider to
compensation  pursuant to this Section 3.02 as promptly as practicable  after it
obtains  knowledge  thereof and determines to request such  compensation,  which
notice shall describe in reasonable  detail the  calculation of the amounts owed
under this Section.  Determinations  by the  Liquidity  Provider for purposes of
this  Section  3.02 of the  effect of any  increase  in the  amount  of  capital
required to be maintained by the Liquidity  Provider and of the amount allocable
to the Liquidity Provider's obligations to the Borrower hereunder shall be prima
facie evidence of the amounts owed under this Section.

          Notwithstanding  the preceding two paragraphs,  the Liquidity Provider
and the  Subordination  Agent agree that the initial  Liquidity  Provider (i.e.,
Morgan Stanley Capital Services,  Inc.) shall not be entitled to the benefits of
the preceding  two  paragraphs,  PROVIDED,  however,  any permitted  assignee or
participant of the initial  Liquidity  Provider which is a bank organized  under
the laws of the United  States or any State  thereof  shall be  entitled  to the
benefits of the preceding two paragraphs (subject,  in the case of any permitted
participant, to the limitation set forth in Section 7.08 hereof).

          Section 3.03.  PAYMENTS FREE OF  DEDUCTIONS.  All payments made by the
Borrower  under  this  Agreement  shall be made free and clear of,  and  without
reduction  for or on account  of, any  present or future  stamp or other  taxes,
levies, imposts, duties, charges, fees, deductions,  withholdings,  restrictions
or  conditions  of any  nature  whatsoever  now or  hereafter  imposed,  levied,
collected,  withheld or assessed,  excluding  Excluded Taxes (such  non-excluded
taxes  being  referred to herein,  collectively,  as  "NON-EXCLUDED  TAXES" and,
individually,  as a "NON-EXCLUDED  TAX"). If any Non-Excluded Taxes are required
to be withheld  from any amounts  payable to the Liquidity  Provider  under this
Agreement,  the amounts so payable to the Liquidity  Provider shall be increased
to the extent necessary to yield to the Liquidity Provider (after payment of all
Non-Excluded  Taxes)  interest  or any other  such  amounts  payable  under this
Agreement  at the  rates or in the  amounts  specified  in this  Agreement.  The
Liquidity  Provider  agrees  to use  reasonable  efforts  (consistent  with  its
internal   policy  and  legal  and  regulatory   restrictions)   to  change  the
jurisdiction  of its Facility  Office if making such change would avoid the need
for, or reduce the amount of, any such  additional  amounts that may  thereafter
accrue and would not, in the reasonable judgment of the Liquidity  Provider,  be
otherwise  disadvantageous to the Liquidity Provider. From time to time upon the
reasonable  request of the Borrower,  if the Liquidity Provider is not organized
under the laws of the United States or any State thereof, the Liquidity Provider
agrees to provide to the Borrower two original  Internal  Revenue  Service Forms
1001 or 4224, as  appropriate,  or any successor or other form prescribed by the
Internal Revenue Service,  certifying that the Liquidity Provider is exempt from
or  entitled  to a reduced  rate of United  States  withholding  tax on payments
pursuant to this Agreement.



          Section 3.04.  PAYMENTS.  The Borrower  shall make or cause to be made
each payment to the Liquidity  Provider  under this Agreement so as to cause the
same to be received by the Liquidity Provider not later than 1:00 P.M. (New York
City time) on the day when due.  The  Borrower  shall make all such  payments in
lawful  money of the United  States of  America,  to the  Liquidity  Provider in
immediately  available funds, by wire transfer to Citibank,  N.A., New York, New
York, ABA  #021000089,  Account Name:  Morgan Stanley  Capital  Services,  Inc.,
Account No. 4072-4601, Account Reference: Continental Airlines, Inc. 1998-3C-1.

          Section 3.05. COMPUTATIONS.  All computations of interest based on the
Base Rate  shall be made on the basis of a year of 365 or 366 days,  as the case
may be, and all  computations  of interest based on the LIBOR Rate shall be made
on the basis of a year of 360 days,  in each case for the actual  number of days
(including the first day but excluding the last day) occurring in the period for
which such interest is payable.

          Section 3.06. PAYMENT ON NON-BUSINESS DAYS. Whenever any payment to be
made  hereunder  shall be stated to be due on a day other than a  Business  Day,
such payment shall be made on the next succeeding Business Day and no additional
interest shall be due as a result (and if so made,  shall be deemed to have been
made when  due).  If any  payment in  respect  of  interest  on an Advance is so
deferred to the next succeeding  Business Day, such deferral shall not delay the
commencement  of the next Interest Period for such Advance (if such Advance is a
LIBOR  Advance) or reduce the number of days for which  interest will be payable
on such Advance on the next interest payment date for such Advance.

          Section  3.07.  INTEREST.  (a) Subject to Section  2.09,  the Borrower
shall pay, or shall cause to be paid, without  duplication,  interest on (i) the
unpaid  principal  amount of each  Advance from and  including  the date of such
Advance (or, in the case of an Applied Provider Advance,  from and including the
date on  which  the  amount  thereof  was  withdrawn  from  the  Class  C-1 Cash
Collateral  Account  to pay  interest  on the  Class  C-1  Certificates)  to but
excluding the date such principal  amount shall be paid in full (or, in the case
of an Applied Provider Advance,  the date on which the Class C-1 Cash Collateral
Account is fully  replenished  in respect  of such  Advance)  and (ii) any other
amount due hereunder (whether fees,  commissions,  expenses or other amounts or,
to the extent permitted by law, installments of interest on Advances or any such
other  amount)  which is not paid  when due  (whether  at  stated  maturity,  by
acceleration  or  otherwise)  from and  including  the due date  thereof  to but
excluding  the  date  such  amount  is paid in full,  in each  such  case,  at a
fluctuating  interest  rate  per  annum  for each  day  equal to the  Applicable
Liquidity  Rate (as defined  below) for such  Advance or such other amount as in
effect  for such  day,  but in no event at a rate  per  annum  greater  than the
maximum rate permitted by applicable  law;  PROVIDED,  HOWEVER,  that, if at any
time the  otherwise  applicable  interest rate as set forth in this Section 3.07
shall exceed the maximum rate  permitted by applicable  law, then any subsequent
reduction  in such  interest  rate will not reduce the rate of interest  payable
pursuant to this Section 3.07 below the maximum rate permitted by applicable law
until the total amount of interest  accrued  equals the amount of interest  that
would have accrued if such  otherwise  applicable  interest rate as set forth in
this Section 3.07 had at all times been in effect.



          (b)  Except as  provided  in clause (e) below,  each  Advance  will be
either a Base Rate Advance or a LIBOR Advance as provided in this Section.  Each
such  Advance  will be a Base Rate  Advance  for the period from the date of its
borrowing to (but  excluding)  the third  Business Day  following  the Liquidity
Provider's receipt of the Notice of Borrowing for such Advance. Thereafter, such
Advance shall be a LIBOR  Advance;  provided that the Borrower (at the direction
of  the  Controlling  Party,  so  long  as the  Liquidity  Provider  is not  the
Controlling Party) may (x) convert the Final Advance into a Base Rate Advance on
the last day of an  Interest  Period for such  Advance  by giving the  Liquidity
Provider no less than four Business  Days' prior written notice of such election
or (y)  elect to  maintain  the Final  Advance  as a Base  Rate  Advance  by not
requesting a conversion of the Final Advance to a LIBOR Advance under Clause (5)
of the  applicable  Notice of Borrowing  (or, if such Final Advance is deemed to
have been made,  without  delivery of a Notice of Borrowing  pursuant to Section
2.06, by requesting,  prior to 11:00 a.m. on the first Business Day  immediately
following the Borrower's receipt of the applicable Termination Notice, that such
Final Advance not be converted from a Base Rate Advance to a LIBOR Advance).

          (c) Each LIBOR Advance shall bear interest during each Interest Period
at a rate per annum  equal to the LIBOR Rate for such  Interest  Period plus the
Applicable Margin for such LIBOR Advance,  payable in arrears on the last day of
such Interest Period and, in the event of the payment of principal of such LIBOR
Advance on a day other than such last day,  on the date of such  payment (to the
extent of interest accrued on the amount of principal repaid).

          (d) Each Base Rate  Advance  shall bear  interest  at a rate per annum
equal to the Base Rate plus the  Applicable  Margin for such Base Rate  Advance,
payable in arrears on each  Regular  Distribution  Date and, in the event of the
payment  of  principal  of such Base Rate  Advance on a day other than a Regular
Distribution  Date,  on the date of such  payment  (to the  extent  of  interest
accrued on the amount of principal repaid).

          (e) Each outstanding Unapplied Provider Advance shall bear interest in
an amount  equal to the  Investment  Earnings on amounts on deposit in the Class
C-1 Cash  Collateral  Account  plus the  Applicable  Margin  for such  Unapplied
Provider  Advance on the amount of such Unapplied  Provider Advance from time to
time, payable in arrears on each Regular Distribution Date.

          (f)  Each  amount  not  paid  when  due   hereunder   (whether   fees,
commissions, expenses or other amounts or, to the extent permitted by applicable
law,  installments  of interest on Advances but excluding  Advances)  shall bear
interest at a rate per annum equal to the Base Rate plus 2.00% until paid.

          (g) Each change in the Base Rate shall become  effective  immediately.
The rates of interest specified in this Section 3.07 with respect to any Advance
or other amount shall be referred to as the "APPLICABLE LIQUIDITY RATE".

          Section 3.08.  REPLACEMENT OF BORROWER.  From time to time and subject
to the successor  Borrower's  meeting the eligibility  requirements set forth in
Section  6.9 of the  Intercreditor  Agreement  applicable  to the  Subordination



Agent,  upon the  effective  date and time  specified in a written and completed
Notice of Replacement  Subordination Agent in substantially the form of Annex VI
attached hereto (a "NOTICE OF REPLACEMENT SUBORDINATION AGENT") delivered to the
Liquidity  Provider by the then  Borrower,  the  successor  Borrower  designated
therein shall be substituted for as the Borrower for all purposes hereunder.

          Section 3.09. FUNDING LOSS INDEMNIFICATION.  The Borrower shall pay to
the Liquidity Provider,  upon the request of the Liquidity Provider, such amount
or amounts as shall be sufficient  (in the  reasonable  opinion of the Liquidity
Provider) to compensate it for any loss,  cost, or expense incurred by reason of
the  liquidation  or  redeployment  of deposits  or other funds  acquired by the
Liquidity  Provider to fund or maintain any LIBOR Advance (but excluding loss of
anticipated profits) incurred as a result of:

          (1) Any repayment of a LIBOR Advance on a date other than the last day
     of the Interest Period for such Advance; or

          (2) Any failure by the Borrower to borrow a LIBOR  Advance on the date
     for borrowing specified in the relevant notice under Section 2.02.

          Section 3.10. ILLEGALITY.  Notwithstanding any other provision in this
Agreement,  if any change in any  applicable  law,  rule or  regulation,  or any
change in the  interpretation  or  administration  thereof  by any  governmental
authority,  central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by the Liquidity Provider (or its Facility
Office) with any request or  directive  (whether or not having the force of law)
of any such authority,  central bank or comparable agency shall make it unlawful
or impossible for the Liquidity Provider (or its Facility Office) to maintain or
fund its LIBOR  Advances,  then upon  notice to the  Borrower  by the  Liquidity
Provider,  the  outstanding  principal  amount  of the LIBOR  Advances  shall be
converted to Base Rate  Advances (a)  immediately  upon demand of the  Liquidity
Provider, if such change or compliance with such request, in the judgment of the
Liquidity Provider,  requires immediate  repayment;  or (b) at the expiration of
the last Interest  Period to expire before the effective date of any such change
or request.

                                   ARTICLE IV

                              CONDITIONS PRECEDENT

          Section 4.01.  CONDITIONS  PRECEDENT TO EFFECTIVENESS OF SECTION 2.01.
Section 2.01 of this  Agreement  shall  become  effective on and as of the first
date (the  "EFFECTIVE  DATE") on which the following  conditions  precedent have
been satisfied or waived:

          (a) The  Liquidity  Provider  shall  have  received  on or before  the
     Closing  Date  each of the  following,  and in the  case  of each  document
     delivered  pursuant to  paragraphs  (i),  (ii) and (iii),  each in form and
     substance satisfactory to the Liquidity Provider:

               (i) This Agreement duly executed on behalf of the Borrower;



               (ii) The Intercreditor  Agreement duly executed on behalf of each
          of the parties thereto;

               (iii) Fully executed  copies of each of the Operative  Agreements
          executed and  delivered on or before the Closing Date (other than this
          Agreement and the Intercreditor Agreement);

               (iv) A copy of the Prospectus  Supplement and specimen  copies of
          the Class C-1 Certificates;

               (v) An executed copy of each  document,  instrument,  certificate
          and opinion  delivered on or before the Closing  Date  pursuant to the
          Class C-1 Trust Agreement,  the Intercreditor  Agreement and the other
          Operative Agreements (in the case of each such opinion, other than the
          opinion of  counsel  for the  Underwriters,  either  addressed  to the
          Liquidity  Provider  or  accompanied  by a  letter  from  the  counsel
          rendering  such opinion to the effect that the  Liquidity  Provider is
          entitled  to  rely  on  such  opinion  as of its  date  as if it  were
          addressed to the Liquidity Provider);

               (vi)  Evidence  that  there  shall have been made and shall be in
          full force and effect, all filings,  recordings and/or  registrations,
          and there  shall have been given or taken any notice or other  similar
          action as may be  reasonably  necessary  or, to the extent  reasonably
          requested by the Liquidity Provider, reasonably advisable, in order to
          establish,   perfect,  protect  and  preserve  the  right,  title  and
          interest,  remedies, powers, privileges,  liens and security interests
          of,  or for  the  benefit  of,  the  Trustees,  the  Borrower  and the
          Liquidity  Provider created by the Operative  Agreements  executed and
          delivered on or prior to the Closing Date;

               (vii) An  agreement  from  Continental,  pursuant  to  which  (i)
          Continental agrees to provide copies of quarterly financial statements
          and audited annual financial statements to the Liquidity Provider, and
          such other  information  as the Liquidity  Provider  shall  reasonably
          request with respect to the transactions contemplated by the Operative
          Agreements,  in each case,  only to the  extent  that  Continental  is
          obligated to provide such information pursuant to Section 8.2.1 of the
          Leases (related to Leased  Aircraft) or the  corresponding  section of
          the Indentures  (related to Owned Aircraft) to the parties thereto and
          (ii)  Continental  agrees to allow the  Liquidity  Provider to inspect
          Continental's  books and records regarding such  transactions,  and to
          discuss such  transactions with officers and employees of Continental;
          and

               (viii) Such other documents,  instruments, opinions and approvals
          pertaining  to the  transactions  contemplated  hereby or by the other
          Operative  Agreements as the Liquidity  Provider shall have reasonably
          requested.

          (b) The following  statement  shall be true on and as of the Effective
     Date:  no event has  occurred and is  continuing,  or would result from the



     entering  into  of this  Agreement  or the  making  of any  Advance,  which
     constitutes a Liquidity Event of Default.

          (c) The Liquidity  Provider shall have received payment in full of all
     fees  and  other  sums  required  to be paid to or for the  account  of the
     Liquidity Provider on or prior to the Effective Date.

          (d) All conditions precedent to the issuance of the Certificates under
     the Trust  Agreements  shall have been satisfied or waived,  all conditions
     precedent to the effectiveness of the other Liquidity Facilities shall have
     been satisfied or waived,  and all conditions  precedent to the purchase of
     the Certificates by the Underwriters under the Underwriting Agreement shall
     have been satisfied  (unless any of such  conditions  precedent  shall have
     been waived by the Underwriters).

          (e) The Borrower  shall have  received a  certificate,  dated the date
     hereof,  signed  by a  duly  authorized  representative  of  the  Liquidity
     Provider,  certifying that all conditions precedent to the effectiveness of
     Section 2.01 have been satisfied or waived.

          Section 4.02. CONDITIONS PRECEDENT TO BORROWING. The obligation of the
Liquidity Provider to make an Advance on the occasion of each Borrowing shall be
subject to the conditions  precedent that the Effective Date shall have occurred
and,  prior to the date of such  Borrowing,  the Borrower shall have delivered a
Notice of Borrowing which conforms to the terms and conditions of this Agreement
and has been  completed as may be required by the relevant form of the Notice of
Borrowing for the type of Advances requested.

                                    ARTICLE V

                                    COVENANTS

          Section 5.01.  AFFIRMATIVE  COVENANTS OF THE BORROWER.  So long as any
Advance  shall remain unpaid or the  Liquidity  Provider  shall have any Maximum
Commitment hereunder or the Borrower shall have any obligation to pay any amount
to the Liquidity  Provider  hereunder,  the Borrower will,  unless the Liquidity
Provider shall otherwise consent in writing:

          (a) PERFORMANCE OF THIS AND OTHER AGREEMENTS.  Punctually pay or cause
     to be paid all  amounts  payable by it under this  Agreement  and the other
     Operative  Agreements and observe and perform in all material  respects the
     conditions,  covenants and requirements  applicable to it contained in this
     Agreement and the other Operative Agreements.

          (b) REPORTING  REQUIREMENTS.  Furnish to the  Liquidity  Provider with
     reasonable promptness,  such other information and data with respect to the
     transactions  contemplated by the Operative Agreements as from time to time
     may be  reasonably  requested  by the  Liquidity  Provider;  and permit the
     Liquidity Provider, upon reasonable notice, to inspect the Borrower's books
     and records with respect to such transactions and to meet with officers and
     employees of the Borrower to discuss such transactions.



          (c) CERTAIN OPERATIVE  AGREEMENTS.  Furnish to the Liquidity  Provider
     with reasonable  promptness,  such Operative  Agreements entered into after
     the date  hereof as from time to time may be  reasonably  requested  by the
     Liquidity Provider.

          Section  5.02.  NEGATIVE  COVENANTS  OF THE  BORROWER.  So long as any
Advance  shall remain unpaid or the  Liquidity  Provider  shall have any Maximum
Commitment hereunder or the Borrower shall have any obligation to pay any amount
to the Liquidity Provider hereunder,  the Borrower will not appoint or permit or
suffer to be appointed any successor  Borrower without the prior written consent
of the Liquidity Provider,  which consent shall not be unreasonably  withheld or
delayed.

                                   ARTICLE VI

                           LIQUIDITY EVENTS OF DEFAULT

          Section 6.01.  LIQUIDITY EVENTS OF DEFAULT. If (a) any Liquidity Event
of Default has occurred  and is  continuing  and (b) there is a Performing  Note
Deficiency,  the  Liquidity  Provider  may,  in its  discretion,  deliver to the
Borrower a  Termination  Notice,  the effect of which  shall be to cause (i) the
obligation of the Liquidity Provider to make Advances hereunder to expire on the
fifth Business Day after the date on which such  Termination  Notice is received
by the  Borrower,  (ii) the  Borrower to  promptly  request,  and the  Liquidity
Provider to promptly  make, a Final Advance in accordance  with Section  2.02(d)
hereof  and  Section  3.6(i)  of the  Intercreditor  Agreement,  (iii) all other
outstanding  Advances to be  automatically  converted  into Final  Advances  for
purposes of  determining  the  Applicable  Liquidity  Rate for interest  payable
thereon,  and (iv)  subject  to  Sections  2.07 and 2.09  hereof,  all  Advances
(including,  without  limitation,  any  Provider  Advance and  Applied  Provider
Advance),  any  accrued  interest  thereon  and any  other  amounts  outstanding
hereunder to become immediately due and payable to the Liquidity Provider.

                                   ARTICLE VII

                                  MISCELLANEOUS

          Section 7.01. AMENDMENTS, ETC. No amendment or waiver of any provision
of this Agreement, nor consent to any departure by the Borrower therefrom, shall
in any event be effective  unless the same shall be in writing and signed by the
Liquidity  Provider,  and,  in the case of an  amendment  or of a waiver  by the
Borrower,  the Borrower, and then such waiver or consent shall be effective only
in the specific instance and for the specific purpose for which given.

          Section 7.02.  NOTICES,  ETC. Except as otherwise  expressly  provided
herein, all notices and other communications  provided for hereunder shall be in
writing (including telecopier and mailed or delivered or sent by telecopier):



                     Borrower:

                     Wilmington Trust Company
                     Rodney Square North
                     1100 North Market Square
                     Wilmington, DE  19890-0001
                     Attn:  Corporate Trust Administration

                     Telephone:     302-651-1000
                     Telecopy:      302-651-8882

                     Liquidity Provider:

                     Morgan Stanley Capital Services, Inc.
                     1585 Broadway
                     New York, New York  10036
                     Attn:  Jonathan Schwartz

                     Telephone:     212-761-2580
                     Telecopy:      212-761-0580

or, as to each of the foregoing, at such other address as shall be designated by
such  Person  in  a  written  notice  to  the  others.   All  such  notices  and
communications  shall be effective (i) if given by telecopier,  when transmitted
to the telecopier  number specified above, (ii) if given by mail, when deposited
in the mails  addressed as specified  above,  and (iii) if given by other means,
when delivered at the address  specified  above,  except that written notices to
the Liquidity  Provider pursuant to the provisions of Articles II and III hereof
shall not be effective until received by the Liquidity  Provider.  A copy of all
notices  delivered  hereunder  to either party shall in addition be delivered to
each  of the  parties  to  the  Participation  Agreements  at  their  respective
addresses set forth therein.

          Section  7.03.  NO  WAIVER;  REMEDIES.  No  failure on the part of the
Liquidity Provider to exercise, and no delay in exercising, any right under this
Agreement  shall  operate as a waiver  thereof;  nor shall any single or partial
exercise  of any right  under  this  Agreement  preclude  any  other or  further
exercise  thereof  or the  exercise  of any other  right.  The  remedies  herein
provided are cumulative and not exclusive of any remedies provided by law.

          Section  7.04.  FURTHER  ASSURANCES.  The  Borrower  agrees to do such
further  acts and things and to execute  and deliver to the  Liquidity  Provider
such additional assignments, agreements, powers and instruments as the Liquidity
Provider  may  reasonably  require or deem  advisable  to carry into  effect the
purposes  of this  Agreement  and the other  Operative  Agreements  or to better
assure and confirm unto the Liquidity  Provider its rights,  powers and remedies
hereunder and under the other Operative Agreements.

          Section 7.05.  INDEMNIFICATION;  SURVIVAL OF CERTAIN  PROVISIONS.  The
Liquidity  Provider  shall be  indemnified  hereunder  to the  extent and in the



manner described in Section 8.1 of the Participation  Agreements with respect to
Owned Aircraft and Section 9.1 of the  Participation  Agreements with respect to
Leased Aircraft. In addition, the Borrower agrees to indemnify,  protect, defend
and hold harmless the Liquidity  Provider  from,  against and in respect of, and
shall pay on demand,  all Expenses of any kind or nature  whatsoever (other than
any Expenses of the nature  described in Section 3.01, 3.02 or 7.07 hereof or in
the Fee Letter applicable to this Agreement  (regardless of whether  indemnified
against pursuant to said Sections or in such Fee Letter)),  that may be imposed,
incurred by or asserted  against any Liquidity  Indemnitee,  in any way relating
to, resulting from, or arising out of or in connection with any action,  suit or
proceeding by any third party against such Liquidity  Indemnitee and relating to
this Agreement,  the Fee Letter applicable to this Agreement,  the Intercreditor
Agreement or any Financing Agreement; PROVIDED, HOWEVER, that the Borrower shall
not be required to  indemnify,  protect,  defend and hold harmless any Liquidity
Indemnitee in respect of any Expense of such Liquidity  Indemnitee to the extent
such Expense is (i) attributable to the gross  negligence or willful  misconduct
of such Liquidity  Indemnitee or any other Liquidity  Indemnitee,  (ii) ordinary
and usual operating  overhead expense,  or (iii)  attributable to the failure by
such  Liquidity  Indemnitee  or any other  Liquidity  Indemnitee  to  perform or
observe any  agreement,  covenant or  condition  on its part to be  performed or
observed  in  this  Agreement,  the  Intercreditor  Agreement,  the  Fee  Letter
applicable to this Agreement or any other  Operative  Agreement to which it is a
party.  The indemnities  contained in Section 8.1 or 9.1, as the case may be, of
the Participation  Agreements,  and the provisions of Sections 3.01, 3.02, 3.03,
3.09, 7.05 and 7.07 hereof, shall survive the termination of this Agreement.

          Section  7.06.  LIABILITY OF THE LIQUIDITY  PROVIDER.  (a) Neither the
Liquidity Provider nor any of its officers,  employees,  directors or affiliates
shall  be  liable  or  responsible  for:  (i) the use  which  may be made of the
Advances  or any  acts  or  omissions  of the  Borrower  or any  beneficiary  or
transferee  in  connection   therewith;   (ii)  the  validity,   sufficiency  or
genuineness of documents,  or of any endorsement thereon, even if such documents
should prove to be in any or all respects invalid,  insufficient,  fraudulent or
forged;  or (iii) the  making of  Advances  by the  Liquidity  Provider  against
delivery of a Notice of Borrowing and other  documents  which do not comply with
the terms  hereof;  PROVIDED,  HOWEVER,  that the  Borrower  shall  have a claim
against the Liquidity  Provider,  and the Liquidity  Provider shall be liable to
the Borrower,  to the extent of any damages  suffered by the Borrower which were
the result of (A) the Liquidity  Provider's  willful misconduct or negligence in
determining  whether documents presented hereunder comply with the terms hereof,
or (B)  any  breach  by the  Liquidity  Provider  of any of the  terms  of  this
Agreement,  including,  but not limited to, the Liquidity  Provider's failure to
make lawful  payment  hereunder  after the  delivery to it by the  Borrower of a
Notice of Borrowing strictly complying with the terms and conditions hereof.

          (b) Neither the Liquidity Provider nor any of its officers, employees,
directors or affiliates  shall be liable or  responsible  in any respect for (i)
any error, omission, interruption or delay in transmission, dispatch or delivery
of any message or advice, however transmitted, in connection with this Agreement
or any Notice of Borrowing delivered hereunder,  or (ii) any action, inaction or
omission which may be taken by it in good faith,  absent  willful  misconduct or
negligence  (in which  event the extent of the  Liquidity  Provider's  potential
liability  to the  Borrower  shall be  limited  as set forth in the  immediately



preceding  paragraph),  in  connection  with  this  Agreement  or any  Notice of
Borrowing.

          Section 7.07.  COSTS,  EXPENSES AND TAXES. The Borrower agrees to pay,
or cause to be paid (A) on the Effective Date and on such later date or dates on
which the Liquidity  Provider shall make demand,  all  reasonable  out-of-pocket
costs and expenses  (including,  without  limitation,  the  reasonable  fees and
expenses  of  outside  counsel  for the  Liquidity  Provider)  of the  Liquidity
Provider in connection with the preparation,  negotiation,  execution, delivery,
filing and recording of this Agreement,  any other  Operative  Agreement and any
other documents which may be delivered in connection with this Agreement and (B)
on demand, all reasonable costs and expenses (including  reasonable counsel fees
and expenses) of the Liquidity  Provider in connection  with (i) the enforcement
of this Agreement or any other  Operative  Agreement,  (ii) the  modification or
amendment of, or supplement to, this Agreement or any other Operative  Agreement
or such  other  documents  which may be  delivered  in  connection  herewith  or
therewith  (whether or not the same shall become  effective) or (iii) any action
or  proceeding  relating to any order,  injunction,  or other  process or decree
restraining or seeking to restrain the Liquidity Provider from paying any amount
under  this  Agreement,  the  Intercreditor  Agreement  or any  other  Operative
Agreement or otherwise  affecting the application of funds in the Class C-1 Cash
Collateral Accounts. In addition,  the Borrower shall pay any and all recording,
stamp and other  similar  taxes and fees payable or  determined to be payable in
connection with the execution, delivery, filing and recording of this Agreement,
any other Operative  Agreement and such other documents,  and agrees to save the
Liquidity  Provider  harmless  from and  against  any and all  liabilities  with
respect to or  resulting  from any delay in paying or omission to pay such taxes
or fees.

          Section 7.08. BINDING EFFECT; PARTICIPATIONS. (a) This Agreement shall
be binding  upon and inure to the  benefit  of the  Borrower  and the  Liquidity
Provider and their  respective  successors and assigns,  except that neither the
Liquidity  Provider  (except as  otherwise  provided in this  Section  7.08) nor
(except as  contemplated  by Section 3.08) the Borrower  shall have the right to
assign its rights or  obligations  hereunder or any interest  herein without the
prior written consent of the other party, subject to the requirements of Section
7.08(b). The Liquidity Provider may grant participations herein or in any of its
rights hereunder  (including,  without  limitation,  funded  participations  and
participations in rights to receive interest  payments  hereunder) and under the
other Operative  Agreements to such Persons as the Liquidity Provider may in its
sole discretion select,  subject to the requirements of Section 7.08(b). No such
participation  by the Liquidity  Provider,  however,  will relieve the Liquidity
Provider of its obligations  hereunder.  In connection with any participation or
any  proposed  participation,   the  Liquidity  Provider  may  disclose  to  the
participant or the proposed  participant  any  information  that the Borrower is
required to deliver or to disclose to the  Liquidity  Provider  pursuant to this
Agreement.  The Borrower  acknowledges and agrees that the Liquidity  Provider's
source  of  funds  may  derive  in  part  from  its  participants   (other  than
Continental).  Accordingly, references in this Agreement and the other Operative
Agreements  to  determinations,   reserve  and  capital  adequacy  requirements,
increased costs,  reduced receipts,  additional  amounts due pursuant to Section
3.03 and the like as they pertain to the Liquidity Provider shall be deemed also
to include those of each of its  participants  that are banks (subject,  in each
case, if any such participant is not a bank that is (i) organized under the laws
of the United  States or any State thereof and (ii) a member bank of the Federal



Reserve System with deposits exceeding $1,000,000,000 (such a bank, a "Reference
Bank"),  to the  maximum  amount that would have been  directly  incurred by any
Reference  Bank  organized  under  the laws of the  United  States  or any State
thereof  if such  Reference  Bank,  rather  than the  participant,  had held the
interest participated).

          (b) If, pursuant to subsection (a) above, the Liquidity Provider sells
any  participation  in this  Agreement  to any bank or  other  entity  (each,  a
"TRANSFEREE"),  then, concurrently with the effectiveness of such participation,
the Transferee shall (i) represent to the Liquidity Provider (for the benefit of
the  Liquidity  Provider and the  Borrower)  either (A) that it is  incorporated
under  the laws of the  United  States  or a state  thereof  or (B)  that  under
applicable  law and  treaties,  no taxes will be required  to be  withheld  with
respect  to any  payments  to be made  to such  Transferee  in  respect  of this
Agreement,  (ii) furnish to the Liquidity Provider and the Borrower either (x) a
statement that it is incorporated under the laws of the United States or a state
thereof or (y) if it is not so incorporated,  two copies of a properly completed
United States  Internal  Revenue Service Form 4224 or Form 1001, as appropriate,
or other  applicable  form,  certificate or document  prescribed by the Internal
Revenue Service  certifying,  in each case, such  Transferee's  entitlement to a
complete exemption from United States federal  withholding tax in respect to any
and all payments to be made  hereunder,  and (iii) agree (for the benefit of the
Liquidity  Provider and the Borrower) to provide the Liquidity  Provider and the
Borrower a new Form 4224 or Form 1001, as appropriate, (A) on or before the date
that any such form expires or becomes  obsolete or (B) after the  occurrence  of
any event requiring a change in the most recent form previously  delivered by it
and prior to the  immediately  following due date of any payment by the Borrower
hereunder,  certifying  in the  case  of a Form  1001  or Form  4224  that  such
Transferee  is  entitled to a complete  exemption  from  United  States  federal
withholding  tax on  payments  under this  Agreement.  Unless the  Borrower  has
received forms or other documents reasonably satisfactory to it (and required by
applicable  law)  indicating  that payments  hereunder are not subject to United
States federal  withholding tax, the Borrower will withhold taxes as required by
law from such payments at the applicable statutory rate.

          (c)  Notwithstanding  the other  provisions of this Section 7.08,  the
Liquidity  Provider  may assign and  pledge all or any  portion of the  Advances
owing  to it to any  Federal  Reserve  Bank or the  United  States  Treasury  as
collateral  security  pursuant to  Regulation A of the Board of Governors of the
Federal Reserve System and any Operating Circular issued by such Federal Reserve
Bank, provided that any payment in respect of such assigned Advances made by the
Borrower  to the  Liquidity  Provider  in  accordance  with  the  terms  of this
Agreement shall satisfy the Borrower's  obligations hereunder in respect of such
assigned Advance to the extent of such payment. No such assignment shall release
the Liquidity Provider from its obligations hereunder.

          Section 7.09.  SEVERABILITY.  Any provision of this Agreement which is
prohibited,  unenforceable  or not authorized in any  jurisdiction  shall, as to
such   jurisdiction,   be  ineffective  to  the  extent  of  such   prohibition,
unenforceability  or   non-authorization   without  invalidating  the  remaining
provisions hereof or affecting the validity,  enforceability or legality of such
provision in any other jurisdiction.



          Section 7.10.  GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

          Section 7.11. SUBMISSION TO JURISDICTION; WAIVER OF JURY TRIAL; WAIVER
OF  IMMUNITY.   (a)  Each  of  the  parties   hereto  hereby   irrevocably   and
unconditionally:

          (i)  submits  for  itself  and its  property  in any  legal  action or
     proceeding relating to this Agreement or any other Operative Agreement,  or
     for  recognition  and  enforcement  of any  judgment  in respect  hereof or
     thereof,  to the  nonexclusive  general  jurisdiction  of the courts of the
     State of New York,  the  courts of the  United  States of  America  for the
     Southern District of New York, and the appellate courts from any thereof;

          (ii)  consents  that any such action or  proceeding  may be brought in
     such courts,  and waives any objection that it may now or hereafter have to
     the venue of any such action or  proceeding  in any such court or that such
     action or proceeding was brought in an inconvenient court and agrees not to
     plead or claim the same;

          (iii) agrees that service of process in any such action or  proceeding
     may be effected by mailing a copy thereof by registered  or certified  mail
     (or any  substantially  similar form and mail),  postage  prepaid,  to each
     party hereto at its address set forth in Section  7.02  hereof,  or at such
     other  address of which the  Liquidity  Provider  shall have been  notified
     pursuant thereto; and

          (iv)  agrees  that  nothing  herein  shall  affect the right to effect
     service of process in any other manner  permitted by law or shall limit the
     right to sue in any other jurisdiction.

          (b) THE BORROWER AND THE LIQUIDITY PROVIDER EACH HEREBY AGREE TO WAIVE
THEIR  RESPECTIVE  RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION  BASED
UPON OR ARISING OUT OF THIS  AGREEMENT OR ANY DEALINGS  BETWEEN THEM RELATING TO
THE  SUBJECT  MATTER  OF THIS  AGREEMENT  AND  THE  RELATIONSHIP  THAT IS  BEING
ESTABLISHED, including, without limitation, contract claims, tort claims, breach
of duty claims and all other common law and statutory  claims.  The Borrower and
the  Liquidity  Provider  each warrant and  represent  that it has reviewed this
waiver with its legal counsel,  and that it knowingly and voluntarily waives its
jury trial rights following consultation with such legal counsel. THIS WAIVER IS
IRREVOCABLE, AND CANNOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND THIS WAIVER
SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS
TO THIS AGREEMENT.

          (c) The Liquidity Provider hereby waives any immunity it may have from
the  jurisdiction  of the courts of the United States or of any State and waives
any immunity any of its  properties  located in the United  States may have from



attachment  or  execution  upon a judgment  entered by any such court  under the
United States Foreign Sovereign  Immunities Act of 1976 or any similar successor
legislation.

          Section  7.12.  EXECUTION  IN  COUNTERPARTS.  This  Agreement  may  be
executed  in any  number of  counterparts  and by  different  parties  hereto on
separate  counterparts,  each  of  which  counterparts,  when  so  executed  and
delivered,  shall be deemed  to be an  original  and all of which  counterparts,
taken together, shall constitute but one and the same Agreement.

          Section 7.13. ENTIRETY.  This Agreement,  the Intercreditor  Agreement
and the other  Operative  Agreements to which the Liquidity  Provider is a party
constitute  the entire  agreement  of the  parties  hereto  with  respect to the
subject matter hereof and supersedes all prior  understandings and agreements of
such parties.

          Section  7.14.  HEADINGS.  Section  headings  in  this  Agreement  are
included  herein for  convenience  of reference  only and shall not constitute a
part of this Agreement for any other purpose.

          Section 7.15. TRANSFER. The Liquidity Provider hereby acknowledges and
consents  to  the  Transfer   contemplated  by  the  Assignment  and  Assumption
Agreement.

          Section 7.16. LIQUIDITY PROVIDER'S OBLIGATION TO MAKE ADVANCES. EXCEPT
AS EXPRESSLY  SET FORTH IN THIS  AGREEMENT,  THE  OBLIGATIONS  OF THE  LIQUIDITY
PROVIDER  TO MAKE  ADVANCES  HEREUNDER,  AND THE  BORROWER'S  RIGHTS TO  DELIVER
NOTICES OF  BORROWING  REQUESTING  THE MAKING OF  ADVANCES  HEREUNDER,  SHALL BE
UNCONDITIONAL  AND  IRREVOCABLE,  AND SHALL BE PAID OR  PERFORMED,  IN EACH CASE
STRICTLY IN ACCORDANCE WITH THE TERMS OF THIS AGREEMENT.



          IN WITNESS WHEREOF,  the parties have caused this Agreement to be duly
executed and delivered by their respective officers thereunto duly authorized as
of the date first set forth above.


                            WILMINGTON TRUST COMPANY,
                            not in its individual capacity but solely as
                            Subordination Agent, as agent and trustee for
                            the Class C-1 Trust, as Borrower



                            By:_________________________________
                               Name:
                               Title:


                            MORGAN STANLEY CAPITAL SERVICES, INC.,
                            as Liquidity Provider



                            By:_________________________________
                               Name:
                               Title:



                                                                      Annex I to
                                                      Revolving Credit Agreement

                      INTEREST ADVANCE NOTICE OF BORROWING

          The  undersigned,  a duly  authorized  signatory  of  the  undersigned
borrower (the "BORROWER"),  hereby certifies to Morgan Stanley Capital Services,
Inc.  (the  "LIQUIDITY  PROVIDER"),  with  reference  to  the  Revolving  Credit
Agreement (1998-3C-1) dated as of November 3, 1998, between the Borrower and the
Liquidity Provider (the "LIQUIDITY AGREEMENT"; the terms defined therein and not
otherwise  defined herein being used herein as therein  defined or  referenced),
that:

          (1) The Borrower is the  Subordination  Agent under the  Intercreditor
     Agreement.

          (2) The Borrower is delivering this Notice of Borrowing for the making
     of an Interest  Advance by the  Liquidity  Provider to be used,  subject to
     clause  (3)(v)  below,  for  the  payment  of  interest  on the  Class  C-1
     Certificates  which was payable on  ____________,  ____ (the  "DISTRIBUTION
     DATE") in accordance  with the terms and  provisions of the Class C-1 Trust
     Agreement and the Class C-1 Certificates,  which Advance is requested to be
     made on ____________, ____.

          (3)  The  amount  of the  Interest  Advance  requested  hereby  (i) is
     $_______________.__,  to be  applied  in  respect  of  the  payment  of the
     interest  which was due and  payable on the Class C-1  Certificates  on the
     Distribution  Date,  (ii) does not include  any amount with  respect to the
     payment of  principal  of, or premium  on, the Class C-1  Certificates,  or
     principal  of, or interest or premium on, the Class A-1  Certificates,  the
     Class  A-2  Certificates,  the  Class  B  Certificates  or  the  Class  C-2
     Certificates,  (iii) was computed in accordance  with the provisions of the
     Class C-1 Certificates, the Class C-1 Trust Agreement and the Intercreditor
     Agreement (a copy of which  computation is attached  hereto as Schedule I),
     (iv) does not exceed the Maximum  Available  Commitment on the date hereof,
     (v) does not include  any amount of  interest  which was due and payable on
     the Class C-1  Certificates  on such  Distribution  Date but which  remains
     unpaid due to the  failure of the  Depositary  to pay any amount of accrued
     interest on the  Deposits on such  Distribution  Date and (vi) has not been
     and is not the subject of a prior or contemporaneous Notice of Borrowing.

          (4)  Upon  receipt  by or on  behalf  of the  Borrower  of the  amount
     requested  hereby,  (a) the Borrower will apply the same in accordance with
     the terms of Section 3.6(b) of the Intercreditor  Agreement, (b) no portion
     of such amount shall be applied by the  Borrower for any other  purpose and
     (c) no portion of such amount  until so applied  shall be  commingled  with
     other funds held by the Borrower.

          The  Borrower  hereby  acknowledges  that,  pursuant to the  Liquidity
Agreement,  the making of the  Interest  Advance as  requested by this Notice of
Borrowing shall  automatically  reduce,  subject to  reinstatement in accordance



with the terms of the Liquidity  Agreement,  the Maximum Available Commitment by
an amount  equal to the  amount of the  Interest  Advance  requested  to be made
hereby as set forth in clause (i) of paragraph (3) of this  Certificate and such
reduction shall automatically result in corresponding  reductions in the amounts
available to be borrowed pursuant to a subsequent Advance.

          IN WITNESS  WHEREOF,  the Borrower has  executed  and  delivered  this
Notice of Borrowing as of the ____ day of _________, ____.


                            WILMINGTON TRUST COMPANY,
                              not in its individual capacity but solely as
                              Subordination Agent, as Borrower



                            By:_________________________________
                               Name:
                               Title:



               SCHEDULE I TO INTEREST ADVANCE NOTICE OF BORROWING


                   [Insert Copy of Computations in accordance
                   with Interest Advance Notice of Borrowing]



                                                                     Annex II to
                                                      Revolving Credit Agreement

                   NON-EXTENSION ADVANCE NOTICE OF BORROWING


          The  undersigned,  a duly  authorized  signatory  of  the  undersigned
subordination agent (the "BORROWER"), hereby certifies to Morgan Stanley Capital
Services,  Inc.  (the  "LIQUIDITY  PROVIDER"),  with  reference to the Revolving
Credit Agreement  (1998-3C-1) dated as of November 3, 1998, between the Borrower
and the Liquidity Provider (the "LIQUIDITY AGREEMENT"; the terms defined therein
and not  otherwise  defined  herein  being  used  herein as  therein  defined or
referenced), that:

          (1) The Borrower is the  Subordination  Agent under the  Intercreditor
     Agreement.

          (2) The Borrower is delivering this Notice of Borrowing for the making
     of the Non-Extension  Advance by the Liquidity  Provider to be used for the
     funding of the Class C-1 Cash Collateral Account in accordance with Section
     3.6(d) of the  Intercreditor  Agreement,  which  Advance is requested to be
     made on __________, ____.

          (3) The amount of the  Non-Extension  Advance  requested hereby (i) is
     $_______________.__,  which equals the Maximum Available  Commitment on the
     date hereof and is to be applied in respect of the funding of the Class C-1
     Cash   Collateral   Account  in  accordance  with  Section  3.6(d)  of  the
     Intercreditor  Agreement,  (ii) does not include any amount with respect to
     the payment of the principal of, or premium on, the Class C-1 Certificates,
     or principal of, or interest or premium on, the Class A-1 Certificates, the
     Class  A-2  Certificates,  the  Class  B  Certificates  or  the  Class  C-2
     Certificates,  (iii) was computed in accordance  with the provisions of the
     Class C-1 Certificates, the Class C-1 Trust Agreement and the Intercreditor
     Agreement (a copy of which  computation is attached  hereto as Schedule I),
     and (iv) has not been and is not the subject of a prior or  contemporaneous
     Notice of Borrowing under the Liquidity Agreement.

          (4)  Upon  receipt  by or on  behalf  of the  Borrower  of the  amount
     requested  hereby,  (a) the Borrower  will deposit such amount in the Class
     C-1 Cash Collateral Account and apply the same in accordance with the terms
     of Section 3.6(d) of the  Intercreditor  Agreement,  (b) no portion of such
     amount shall be applied by the  Borrower  for any other  purpose and (c) no
     portion of such  amount  until so applied  shall be  commingled  with other
     funds held by the Borrower.

          (5) The Borrower hereby requests that the Advance  requested hereby be
     a Base Rate  Advance and that such Base Rate  Advance be  converted  into a
     LIBOR  Advance on the third  Business  Day  following  your receipt of this
     notice.



          The  Borrower  hereby  acknowledges  that,  pursuant to the  Liquidity
Agreement,  (A) the making of the  Non-Extension  Advance as  requested  by this
Notice of Borrowing shall automatically and irrevocably terminate the obligation
of  the  Liquidity  Provider  to  make  further  Advances  under  the  Liquidity
Agreement;  and (B)  following  the  making  by the  Liquidity  Provider  of the
Non-Extension Advance requested by this Notice of Borrowing,  the Borrower shall
not be entitled to request any further Advances under the Liquidity Agreement.

          IN WITNESS  WHEREOF,  the Borrower has  executed  and  delivered  this
Notice of Borrowing as of the ____ day of _________, ____.


                            WILMINGTON TRUST COMPANY,
                              not in its individual capacity but solely as
                              Subordination Agent, as Borrower



                            By:_________________________________
                               Name:
                               Title:


             SCHEDULE I TO NON-EXTENSION ADVANCE NOTICE OF BORROWING


                   [Insert Copy of computations in accordance
                with Non-Extension Advance Notice of Borrowing]



                                                                    Annex III to
                                                      Revolving Credit Agreement

                     DOWNGRADE ADVANCE NOTICE OF BORROWING

          The  undersigned,  a duly  authorized  signatory  of  the  undersigned
subordination agent (the "BORROWER"), hereby certifies to Morgan Stanley Capital
Services,  Inc.  (the  "LIQUIDITY  PROVIDER"),  with  reference to the Revolving
Credit Agreement  (1998-3C-1) dated as of November 3, 1998, between the Borrower
and the Liquidity Provider (the "LIQUIDITY AGREEMENT"; the terms defined therein
and not  otherwise  defined  herein  being  used  herein as  therein  defined or
referenced), that:

          (1) The Borrower is the  Subordination  Agent under the  Intercreditor
     Agreement.

          (2) The Borrower is delivering this Notice of Borrowing for the making
     of the  Downgrade  Advance  by the  Liquidity  Provider  to be used for the
     funding of the Class C-1 Cash Collateral Account in accordance with Section
     3.6(c) of the  Intercreditor  Agreement (i) by reason of the downgrading of
     the  short-term  unsecured  debt rating of the  Guarantor  issued by either
     Rating  Agency below the  Threshold  Rating or (ii)  because the  Guarantee
     Agreement  has ceased to be in full force and effect or has become  invalid
     or  unenforceable  or the Guarantor  has denied its  liability  thereunder,
     which Advance is requested to be made on __________, ____.

          (3) The  amount  of the  Downgrade  Advance  requested  hereby  (i) is
     $_______________.__,  which equals the Maximum Available  Commitment on the
     date hereof and is to be applied in respect of the funding of the Class C-1
     Cash   Collateral   Account  in  accordance  with  Section  3.6(c)  of  the
     Intercreditor  Agreement,  (ii) does not include any amount with respect to
     the payment of the principal of, or premium on, the Class C-1 Certificates,
     or principal of, or interest or premium on, the Class A-1 Certificates, the
     A-2  Certificates,  the Class B Certificates or the Class C-2 Certificates,
     (iii) was  computed  in  accordance  with the  provisions  of the Class C-1
     Certificates, the Class C-1 Trust Agreement and the Intercreditor Agreement
     (a copy of which  computation  is attached  hereto as Schedule I), and (iv)
     has not been and is not the subject of a prior or contemporaneous Notice of
     Borrowing under the Liquidity Agreement.

          (4)  Upon  receipt  by or on  behalf  of the  Borrower  of the  amount
     requested  hereby,  (a) the Borrower  will deposit such amount in the Class
     C-1 Cash Collateral Account and apply the same in accordance with the terms
     of Section 3.6(c) of the  Intercreditor  Agreement,  (b) no portion of such
     amount shall be applied by the  Borrower  for any other  purpose and (c) no
     portion of such  amount  until so applied  shall be  commingled  with other
     funds held by the Borrower.

          The  Borrower  hereby  acknowledges  that,  pursuant to the  Liquidity
Agreement,  (A) the making of the Downgrade  Advance as requested by this Notice
of Borrowing shall automatically and irrevocably terminate the obligation of the



Liquidity Provider to make further Advances under the Liquidity  Agreement;  and
(B)  following the making by the  Liquidity  Provider of the  Downgrade  Advance
requested by this Notice of  Borrowing,  the  Borrower  shall not be entitled to
request any further Advances under the Liquidity Agreement.

          IN WITNESS  WHEREOF,  the Borrower has  executed  and  delivered  this
Notice of Borrowing as of the ____ day of _________, ____.

                            WILMINGTON TRUST COMPANY,
                              not in its individual capacity but solely as
                              Subordination Agent, as Borrower



                            By:_________________________________
                               Name:
                               Title:



               SCHEDULE I TO DOWNGRADE ADVANCE NOTICE OF BORROWING

                   [Insert Copy of computations in accordance
                  with Downgrade Advance Notice of Borrowing]



                                                                     Annex IV to
                                                      Revolving Credit Agreement

                       FINAL ADVANCE NOTICE OF BORROWING


          The  undersigned,  a duly  authorized  signatory  of  the  undersigned
borrower (the "BORROWER"),  hereby certifies to Morgan Stanley Capital Services,
Inc.  (the  "LIQUIDITY  PROVIDER"),  with  reference  to  the  Revolving  Credit
Agreement (1998-3C-1) dated as of November 3, 1998, between the Borrower and the
Liquidity Provider (the "LIQUIDITY AGREEMENT"; the terms defined therein and not
otherwise  defined herein being used herein as therein  defined or  referenced),
that:

          (1) The Borrower is the  Subordination  Agent under the  Intercreditor
     Agreement.

          (2) The Borrower is delivering this Notice of Borrowing for the making
     of the Final Advance by the  Liquidity  Provider to be used for the funding
     of the Class C-1 Cash Collateral  Account in accordance with Section 3.6(i)
     of the Intercreditor  Agreement by reason of the receipt by the Borrower of
     a  Termination  Notice  from the  Liquidity  Provider  with  respect to the
     Liquidity Agreement, which Advance is requested to be made on ____________,
     ____.

          (3)  The  amount  of  the  Final  Advance   requested  hereby  (i)  is
     $_________________.__, which equals the Maximum Available Commitment on the
     date hereof and is to be applied in respect of the funding of the Class C-1
     Cash   Collateral   Account  in  accordance  with  Section  3.6(i)  of  the
     Intercreditor  Agreement,  (ii) does not include any amount with respect to
     the payment of principal of, or premium on, the Class C-1 Certificates,  or
     principal  of, or interest or premium on, the Class A-1  Certificates,  the
     Class  A-2  Certificates,  the  Class  B  Certificates  or  the  Class  C-2
     Certificates,  (iii) was computed in accordance  with the provisions of the
     Class C-1 Certificates, the Class C-1 Trust Agreement and the Intercreditor
     Agreement (a copy of which  computation is attached  hereto as Schedule I),
     and (iv) has not been and is not the subject of a prior or  contemporaneous
     Notice of Borrowing.

          (4)  Upon  receipt  by or on  behalf  of the  Borrower  of the  amount
     requested  hereby,  (a) the Borrower  will deposit such amount in the Class
     C-1 Cash Collateral Account and apply the same in accordance with the terms
     of Section 3.6(i) of the  Intercreditor  Agreement,  (b) no portion of such
     amount shall be applied by the  Borrower  for any other  purpose and (c) no
     portion of such  amount  until so applied  shall be  commingled  with other
     funds held by the Borrower.



          (5) The Borrower hereby requests that the Advance  requested hereby be
     a Base Rate Advance  [and that such Base Rate  Advance be converted  into a
     LIBOR  Advance on the third  Business  Day  following  your receipt of this
     notice.]

          The  Borrower  hereby  acknowledges  that,  pursuant to the  Liquidity
Agreement,  (A) the making of the Final  Advance as  requested by this Notice of
Borrowing shall  automatically  and irrevocably  terminate the obligation of the
Liquidity Provider to make further Advances under the Liquidity  Agreement;  and
(B)  following  the  making  by the  Liquidity  Provider  of the  Final  Advance
requested by this Notice of  Borrowing,  the  Borrower  shall not be entitled to
request any further Advances under the Liquidity Agreement.

          IN WITNESS  WHEREOF,  the Borrower has  executed  and  delivered  this
Notice of Borrowing as of the ____ day of _________, ____.


                            WILMINGTON TRUST COMPANY,
                              not in its individual capacity but solely as
                              Subordination Agent, as Borrower



                            By:_________________________________
                               Name:
                               Title:


- ----------

Bracketed language may be included at Borrower's option.



                 SCHEDULE I TO FINAL ADVANCE NOTICE OF BORROWING


                   [Insert Copy of Computations in accordance
                    with Final Advance Notice of Borrowing]



                                                                      Annex V to
                                                      Revolving Credit Agreement





                             NOTICE OF TERMINATION




                                                       [Date]

Wilmington Trust Company,
  as Subordination Agent, as Borrower
Rodney Square North
1100 North Market Square
Wilmington, DE 19890-0001

Attention:  Corporate Trust Administration

     Revolving Credit Agreement dated as of November 3, 1998, between Wilmington
     Trust  Company,  as  Subordination  Agent,  as agent  and  trustee  for the
     Continental Airlines Pass Through Trust  1998-3C-1-[O/S],  as Borrower, and
     Morgan Stanley Capital Services, Inc. (the "LIQUIDITY AGREEMENT")


Ladies and Gentlemen:

          You are hereby notified that pursuant to Section 6.01 of the Liquidity
Agreement,  by reason of the occurrence of a Liquidity  Event of Default and the
existence of a Performing  Note  Deficiency  (each as defined  therein),  we are
giving this notice to you in order to cause (i) our obligations to make Advances
(as defined  therein) under such  Liquidity  Agreement to terminate on the fifth
Business  Day after the date on which you  receive  this  notice and (ii) you to
request a Final Advance under the Liquidity Agreement pursuant to Section 3.6(i)
of the  Intercreditor  Agreement  (as defined in the  Liquidity  Agreement) as a
consequence of your receipt of this notice.



          THIS  NOTICE IS THE  "NOTICE OF  TERMINATION"  PROVIDED  FOR UNDER THE
LIQUIDITY  AGREEMENT.  OUR  OBLIGATIONS  TO MAKE  ADVANCES  UNDER THE  LIQUIDITY
AGREEMENT  WILL  TERMINATE ON THE FIFTH BUSINESS DAY AFTER THE DATE ON WHICH YOU
RECEIVE THIS NOTICE.


                            Very truly yours,

                            MORGAN STANLEY
                             CAPITAL SERVICES, INC.,
                              as Liquidity Provider



                            By:___________________________
                               Name:
                               Title:



cc:    Wilmington Trust Company,
       as Class C-1 Trustee



                                                                     Annex VI to
                                                      Revolving Credit Agreement

                   NOTICE OF REPLACEMENT SUBORDINATION AGENT


[Date]
Attention:

     Revolving Credit Agreement dated as of November 3, 1998, between Wilmington
     Trust  Company,  as  Subordination  Agent,  as agent  and  trustee  for the
     Continental Airlines Pass Through Trust  1998-3C-1-[O/S],  as Borrower, and
     Morgan Stanley Capital Services, Inc. (the "LIQUIDITY AGREEMENT")


Ladies and Gentlemen:

          For value received,  the undersigned  beneficiary  hereby  irrevocably
transfers to:



                         ------------------------------
                              [Name of Transferee]


                         ------------------------------
                             [Address of Transferee]


all rights and  obligations  of the  undersigned as Borrower under the Liquidity
Agreement  referred to above.  The transferee  has succeeded the  undersigned as
Subordination  Agent under the Intercreditor  Agreement referred to in the first
paragraph of the  Liquidity  Agreement,  pursuant to the terms of Section 8.1 of
the Intercreditor Agreement.

          By this transfer,  all rights of the undersigned as Borrower under the
Liquidity  Agreement are transferred to the transferee and the transferee  shall
hereafter  have the sole  rights and  obligations  as Borrower  thereunder.  The
undersigned  shall pay any costs and expenses of such transfer,  including,  but
not limited to, transfer taxes or governmental charges.



          We ask that this transfer be effective as of _______________, ____.


                            WILMINGTON TRUST COMPANY,
                              not in its individual capacity but solely as
                              Subordination Agent, as Borrower



                            By:_________________________________
                               Name:
                               Title:


                                                                       EXECUTION


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

                           REVOLVING CREDIT AGREEMENT
                                   (1998-3C-2)


                          Dated as of November 3, 1998

                                     between

                            WILMINGTON TRUST COMPANY,

                             as Subordination Agent,
                          as agent and trustee for the
                Continental Airlines Pass Through Trust 1998-3C-2

                                   as Borrower

                                       and

                      MORGAN STANLEY CAPITAL SERVICES, INC.

                              as Liquidity Provider

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

                                   Relating to

                Continental Airlines Pass Through Trust 1998-3C-2
              7.25% Continental Airlines Pass Through Certificates,
                                Series 1998-3C-2



                                TABLE OF CONTENTS

                                                                           PAGE
                                                                           ----

                              ARTICLE I DEFINITIONS
Section 1.01.  Certain Defined Terms........................................  1

                  ARTICLE II AMOUNT AND TERMS OF THE COMMITMENT
Section 2.01.  The Advances.................................................  7
Section 2.02.  Making the Advances..........................................  7
Section 2.03.  Fees.........................................................  9
Section 2.04.  Reduction or Termination of the Maximum Commitment...........  9
Section 2.05.  Repayments of Interest Advances or the Final
               Advance......................................................  10
Section 2.06.  Repayments of Provider Advances..............................  10
Section 2.07.  Payments to the Liquidity Provider Under the
               Intercreditor Agreement......................................  11
Section 2.08.  Book Entries.................................................  11
Section 2.09.  Payments from Available Funds Only...........................  12
Section 2.10.  Extension of the Expiry Date; Non-Extension Advance..........  12

                     ARTICLE III OBLIGATIONS OF THE BORROWER
Section 3.01.  Increased Costs..............................................  12
Section 3.02.  Capital Adequacy.............................................  13
Section 3.03.  Payments Free of Deductions..................................  14
Section 3.04.  Payments ....................................................  15
Section 3.05.  Computations.................................................  15
Section 3.06.  Payment on Non-Business Days.................................  15
Section 3.07.  Interest ....................................................  15
Section 3.08.  Replacement of Borrower......................................  16
Section 3.09.  Funding Loss Indemnification.................................  17
Section 3.10.  Illegality...................................................  17

                         ARTICLE IV CONDITIONS PRECEDENT
Section 4.01.  Conditions Precedent to Effectiveness of Section 2.01........  17
Section 4.02.  Conditions Precedent to Borrowing............................  19

                               ARTICLE V COVENANTS
Section 5.01.  Affirmative Covenants of the Borrower........................  19
Section 5.02.  Negative Covenants of the Borrower...........................  20

                     ARTICLE VI LIQUIDITY EVENTS OF DEFAULT
Section 6.01.  Liquidity Events of Default..................................  20

                            ARTICLE VII MISCELLANEOUS
Section 7.01.  Amendments, Etc..............................................  20



                                TABLE OF CONTENTS
                                   (CONTINUED)

Section 7.02.  Notices, Etc.................................................  21
Section 7.03.  No Waiver; Remedies..........................................  21
Section 7.04.  Further Assurances...........................................  21
Section 7.05.  Indemnification; Survival of Certain Provisions..............  22
Section 7.06.  Liability of the Liquidity Provider..........................  22
Section 7.07.  Costs, Expenses and Taxes....................................  23
Section 7.08.  Binding Effect; Participations...............................  23
Section 7.09.  Severability.................................................  25
Section 7.10.  GOVERNING LAW................................................  25
Section 7.11.  Submission to Jurisdiction; Waiver of Jury Trial;
               Waiver of Immunity...........................................  25
Section 7.12.  Execution in Counterparts....................................  26
Section 7.13.  Entirety ....................................................  26
Section 7.14.  Headings ....................................................  26
Section 7.15.  Transfer ....................................................  26
Section 7.16.  Liquidity Provider's Obligation To
               Make Advances................................................  26




                                TABLE OF CONTENTS
                                   (CONTINUED)

ANNEX I        Interest Advance Notice of Borrowing

ANNEX II       Non-Extension Advance Notice of Borrowing

ANNEX III      Downgrade Advance Notice of Borrowing

ANNEX IV       Final Advance Notice of Borrowing

ANNEX V        Notice of Termination

ANNEX VI       Notice of Replacement Subordination Agent



                           REVOLVING CREDIT AGREEMENT

          This REVOLVING CREDIT AGREEMENT dated as of November 3, 1998,  between
WILMINGTON TRUST COMPANY, a Delaware corporation, not in its individual capacity
but solely as  Subordination  Agent under the  Intercreditor  Agreement (each as
defined below),  as agent and trustee for the Class C-2 Trust (as defined below)
(the  "BORROWER"),  and MORGAN  STANLEY  CAPITAL  SERVICES,  INC., a corporation
organized under the laws of the State of Delaware (the "LIQUIDITY PROVIDER").

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

          WHEREAS,  pursuant to the Class C-2 Trust Agreement (such term and all
other  capitalized terms used in these recitals having the meanings set forth or
referred  to in  Section  1.01),  the Class C-2 Trust is  issuing  the Class C-2
Certificates; and

          WHEREAS,  the  Borrower,  in order to support the timely  payment of a
portion of the interest on the Class C-2  Certificates  in accordance with their
terms,  has  requested  the  Liquidity  Provider  to enter into this  Agreement,
providing in part for the Borrower to request in  specified  circumstances  that
Advances be made hereunder.

          WHEREAS,  the  Liquidity  Provider has requested  Morgan  Stanley Dean
Witter & Co. (the  "GUARANTOR") to enter into a Guarantee  Agreement,  providing
for the full and unconditional guarantee of the Liquidity Provider's obligations
under this Agreement (the "GUARANTEE AGREEMENT").

          NOW, THEREFORE,  in consideration of the premises,  the parties hereto
agree as follows:

                                    ARTICLE I

                                   DEFINITIONS

          Section 1.01. CERTAIN DEFINED TERMS. (a) DEFINITIONS.  As used in this
Agreement  and unless  otherwise  expressly  indicated,  or unless  the  context
clearly  requires  otherwise,  the  following  capitalized  terms shall have the
following respective meanings for all purposes of this Agreement:

          "ADDITIONAL  COST" has the  meaning  assigned  to such term in Section
     3.01.

          "ADVANCE"  means an  Interest  Advance,  a Final  Advance,  a Provider
     Advance,  an Applied Provider Advance or an Unpaid Advance, as the case may
     be.

          "APPLICABLE  LIQUIDITY RATE" has the meaning  assigned to such term in
     Section 3.07(g).



          "APPLICABLE  MARGIN"  means (x) with respect to any Unpaid  Advance or
     Applied  Provider  Advance,  1.75% per  annum,  or (y) with  respect to any
     Unapplied Provider Advance,  the rate per annum specified in the Fee Letter
     applicable to this Agreement.

          "APPLIED  DOWNGRADE  ADVANCE" has the meaning assigned to such term in
     Section 2.06(a).

          "APPLIED  NON-EXTENSION ADVANCE" has the meaning assigned to such term
     in Section 2.06(a).

          "APPLIED  PROVIDER  ADVANCE" has the meaning  assigned to such term in
     Section 2.06(a).

          "ASSIGNMENT  AND  ASSUMPTION   AGREEMENT"  means  the  Assignment  and
     Assumption  to be entered  into between the Borrower and the trustee of the
     Successor  Trust,  substantially  in the  form of  Exhibit  C to the  Trust
     Supplement No.  1998-3C-2-O,  dated as of the date hereof,  relating to the
     Class C-2 Trust.

          "BASE RATE" means a fluctuating interest rate per annum in effect from
     time to time,  which rate per annum  shall at all times be equal to (a) the
     weighted average of the rates on overnight Federal funds  transactions with
     members of the Federal Reserve System arranged by Federal funds brokers, as
     published for such day (or, if such day is not a Business Day, for the next
     preceding Business Day) by the Federal Reserve Bank of New York, or if such
     rate is not so published for any day that is a Business Day, the average of
     the quotations for such day for such transactions received by the Liquidity
     Provider from three Federal funds brokers of recognized  standing  selected
     by it, plus (b) one-quarter of one percent (1/4 of 1%).

          "BASE RATE  ADVANCE"  means an Advance  that bears  interest at a rate
     based upon the Base Rate.

          "BORROWER"  has the  meaning  assigned  to such term in the recital of
     parties to this Agreement.

          "BORROWING"  means the making of Advances  requested  by delivery of a
     Notice of Borrowing.

          "BUSINESS  DAY" means any day other than a Saturday or Sunday or a day
     on which  commercial  banks are required or authorized to close in Houston,
     Texas,  New York,  New York,  or, so long as any Class C-2  Certificate  is
     outstanding,  the  city and  state in which  the  Class  C-2  Trustee,  the
     Borrower  or any Loan  Trustee  maintains  its  Corporate  Trust  Office or
     receives or disburses funds, and, if the applicable Business Day relates to
     any Advance or other amount  bearing  interest  based on the LIBOR Rate, on
     which dealings are carried on in the London interbank market.

          "DEPOSITS"  has the  meaning  assigned  to such  terms in the  Deposit
     Agreement.



          "DEPOSITARY"  has the  meaning  assigned  to such term in the  Deposit
     Agreement.

          "DEPOSIT AGREEMENT" means the Deposit Agreement dated November 3, 1998
     between First  Security  Bank,  National  Association,  as Escrow Agent and
     Credit Suisse First Boston,  New York Branch, as Depositary,  pertaining to
     the  Class  C-2  Certificates,  as the same  may be  amended,  modified  or
     supplemented from time to time in accordance with the terms thereof.

          "DOWNGRADE ADVANCE" means an Advance made pursuant to Section 2.02(c).

          "EFFECTIVE  DATE" has the  meaning  specified  in  Section  4.01.  The
     delivery of the  certificate  of the  Liquidity  Provider  contemplated  by
     Section  4.01(e) shall be conclusive  evidence that the Effective  Date has
     occurred.

          "EXCLUDED  TAXES" means (i) taxes imposed on the overall net income of
     the Liquidity  Provider or of its Facility Office by the jurisdiction where
     such  Liquidity  Provider's  principal  office or such  Facility  Office is
     located, and (ii) Excluded Withholding Taxes.

          "EXCLUDED  WITHHOLDING  TAXES" means (i) withholding  Taxes imposed by
     the United  States  except (but only in the case of a  successor  Liquidity
     Provider  organized  under the laws of a  jurisdiction  outside  the United
     States) to the extent that such United States withholding Taxes are imposed
     as a result of any  change in  applicable  law  (excluding  from  change in
     applicable  law for this purpose a change in an applicable  treaty or other
     change in law  affecting  the  applicability  of a  treaty)  after the date
     hereof,  or in the case of a  successor  Liquidity  Provider  (including  a
     transferee of an Advance) or Facility Office,  after the date on which such
     successor  Liquidity Provider obtains its interest or on which the Facility
     Office is changed,  and (ii) any  withholding  Taxes  imposed by the United
     States which are imposed or increased as a result of the Liquidity Provider
     failing to deliver to the  Borrower  any  certificate  or  document  (which
     certificate  or  document  in the  good  faith  judgment  of the  Liquidity
     Provider it is legally  entitled to provide) which is reasonably  requested
     by the Borrower to establish  that payments under this Agreement are exempt
     from (or entitled to a reduced rate of) withholding Tax.

          "EXPENSES"  means  liabilities,   obligations,  damages,  settlements,
     penalties,  claims,  actions,  suits,  costs,  expenses,  and disbursements
     (including, without limitation,  reasonable fees and disbursements of legal
     counsel  and costs of  investigation),  provided  that  Expenses  shall not
     include any Taxes.

          "EXPIRY DATE" means November 1, 1999, initially,  or any date to which
     the Expiry Date is extended pursuant to Section 2.10.

          "FACILITY OFFICE" means the office of the Liquidity Provider presently
     located  at New  York,  New York,  or such  other  office as the  Liquidity
     Provider  from time to time shall  notify  the  Borrower  as its  "Facility



     Office"  hereunder;  PROVIDED that the Liquidity  Provider shall not change
     its  Facility  Office to a Facility  Office  outside  the United  States of
     America except in accordance with Section 3.01, 3.02 or 3.03 hereof.

          "FINAL ADVANCE" means an Advance made pursuant to Section 2.02(d).

          "GUARANTOR"  has the meaning  assigned to such term in the preliminary
     statements of this Agreement.

          "GUARANTEE  AGREEMENT"  has the  meaning  assigned to such term in the
     preliminary statements of this Agreement.

          "INTERCREDITOR  AGREEMENT" means the Intercreditor Agreement dated the
     date hereof,  among the  Trustees,  the Liquidity  Provider,  the liquidity
     provider under each Liquidity  Facility (other than this Agreement) and the
     Subordination Agent, as the same may be amended,  supplemented or otherwise
     modified from time to time in accordance with its terms.

          "INTEREST ADVANCE" means an Advance made pursuant to Section 2.02(a).

          "INTEREST  PERIOD" means,  with respect to any LIBOR Advance,  each of
     the following periods:

          (i)  the period  beginning on the third Business Day following  either
               (x) the Liquidity  Provider's  receipt of the Notice of Borrowing
               for such LIBOR  Advance or (y) the  withdrawal  of funds from the
               Class  C-2 Cash  Collateral  Account  for the  purpose  of paying
               interest on the Class C-2 Certificates as contemplated by Section
               2.06(a)  hereof and, in either  case,  ending on the next Regular
               Distribution Date; and

          (ii) each  subsequent  period  commencing  on  the  last  day  of  the
               immediately  preceding  Interest  Period  and  ending on the next
               Regular Distribution Date;

          PROVIDED, HOWEVER, that if (x) the Final Advance shall have been made,
          or (y) other  outstanding  Advances shall have been converted into the
          Final Advance,  then the Interest Periods shall be successive  periods
          of one  month  beginning  on the  third  Business  Day  following  the
          Liquidity Provider's receipt of the Notice of Borrowing for such Final
          Advance (in the case of clause (x) above) or the Regular  Distribution
          Date following such conversion (in the case of clause (y) above).

          "LIBOR ADVANCE" means an Advance bearing interest at a rate based upon
     the LIBOR Rate.

          "LIBOR RATE" means, with respect to any Interest Period,

          (i)  the rate per  annum  appearing  on  display  page  3750  (British
               Bankers  Association-LIBOR)  of the Dow Jones Markets Service (or



               any successor or substitute therefor) at approximately 11:00 A.M.
               (London  time) two  Business  Days  before  the first day of such
               Interest Period,  as the rate for dollar deposits with a maturity
               comparable to such Interest Period, or

          (ii) if the  rate  calculated  pursuant  to  clause  (i)  above is not
               available,  the average (rounded  upwards,  if necessary,  to the
               next  1/16 of 1%) of the rates  per  annum at which  deposits  in
               dollars  are offered for the  relevant  Interest  Period by three
               banks of recognized  standing selected by the Liquidity  Provider
               in the  London  interbank  market  at  approximately  11:00  A.M.
               (London  time) two  Business  Days  before  the first day of such
               Interest Period in an amount approximately equal to the principal
               amount of the LIBOR Advance to which such  Interest  Period is to
               apply and for a period comparable to such Interest Period.

          "LIQUIDITY  EVENT OF DEFAULT"  means the  occurrence of either (a) the
     Acceleration  of all of the Equipment Notes (provided that, with respect to
     the period prior to the Delivery  Period Expiry Date,  such Equipment Notes
     have an aggregate  outstanding principal balance in excess of $300,000,000)
     or (b) a Continental Bankruptcy Event.

          "LIQUIDITY  INDEMNITEE"  means (i) the  Liquidity  Provider,  (ii) the
     Guarantor, (iii) the respective directors,  officers,  employees and agents
     of the Liquidity  Provider and the  Guarantor,  and (iv) the successors and
     permitted  assigns of the persons  described in clauses (i) through  (iii),
     inclusive.

          "LIQUIDITY  PROVIDER"  has the  meaning  assigned  to such term in the
     recital of parties to this Agreement.

          "MAXIMUM  AVAILABLE  COMMITMENT"  shall  mean,  subject to the proviso
     contained  in the  third  sentence  of  Section  2.02(a),  at any  time  of
     determination,  (a) the  Maximum  Commitment  at  such  time  LESS  (b) the
     aggregate  amount  of each  Interest  Advance  outstanding  at  such  time;
     PROVIDED that following a Provider Advance or a Final Advance,  the Maximum
     Available Commitment shall be zero.

          "MAXIMUM  COMMITMENT" means initially  $8,250,101,  as the same may be
     reduced from time to time in accordance with Section 2.04(a).

          "NON-EXTENSION  ADVANCE"  means an Advance  made  pursuant  to Section
     2.02(b).

          "NOTICE OF BORROWING" has the meaning specified in Section 2.02(e).

          "NOTICE OF REPLACEMENT  SUBORDINATION AGENT" has the meaning specified
     in Section 3.08.

          "PERFORMING NOTE DEFICIENCY"  means any time that less than 65% of the
     then  aggregate  outstanding  principal  amount of all Equipment  Notes are
     Performing Equipment Notes.



          "PROSPECTUS  SUPPLEMENT" means the Prospectus Supplement dated October
     21, 1998 relating to the Certificates, as such Prospectus Supplement may be
     amended or supplemented.

          "PROVIDER  ADVANCE"  means  a  Downgrade  Advance  or a  Non-Extension
     Advance.

          "REGULATORY  CHANGE" has the meaning  assigned to such term in Section
     3.01.

          "REPLENISHMENT  AMOUNT"  has the  meaning  assigned  to  such  term in
     Section 2.06(b).

          "REQUIRED  AMOUNT" means, for any day, the sum of the aggregate amount
     of interest,  calculated at the rate per annum equal to the Stated Interest
     Rate for the Class C-2 Certificates, that would be payable on the Class C-2
     Certificates   on  each  of  the  three   successive   semiannual   Regular
     Distribution  Dates  immediately  following  such day or,  if such day is a
     Regular  Distribution  Date, on such day and the  succeeding two semiannual
     Regular  Distribution  Dates,  in each case  calculated on the basis of the
     Pool Balance of the Class C-2  Certificates  on such day and without regard
     to expected future payments of principal on the Class C-2 Certificates.

          "SUCCESSOR  TRUST"  means  Continental  Airlines  Pass  Through  Trust
     1998-3C-2-S.

          "TERMINATION  DATE" means the earliest to occur of the following:  (i)
     the  Expiry  Date;  (ii) the date on which  the  Borrower  delivers  to the
     Liquidity  Provider a certificate,  signed by a Responsible  Officer of the
     Borrower,  certifying that all of the Class C-2 Certificates have been paid
     in full (or provision has been made for such payment in accordance with the
     Intercreditor  Agreement  and the Trust  Agreements)  or are  otherwise  no
     longer entitled to the benefits of this Agreement;  (iii) the date on which
     the Borrower delivers to the Liquidity Provider a certificate,  signed by a
     Responsible  Officer  of  the  Borrower,   certifying  that  a  Replacement
     Liquidity Facility has been substituted for this Agreement in full pursuant
     to Section 3.6(e) of the Intercreditor  Agreement;  (iv) the fifth Business
     Day following the receipt by the Borrower of a Termination  Notice from the
     Liquidity  Provider  pursuant to Section 6.01  hereof;  and (v) the date on
     which no Advance is or may (including by reason of  reinstatement as herein
     provided) become available for a Borrowing hereunder.

          "TERMINATION NOTICE" means the Notice of Termination  substantially in
     the form of Annex V to this Agreement.

          "TRANSFEREE" has the meaning assigned to such term in Section 7.08(b).

          "UNAPPLIED  DOWNGRADE  ADVANCE" means any Downgrade Advance other than
     an Applied Downgrade Advance.

          "UNAPPLIED  NON-EXTENSION  ADVANCE"  means any  Non-Extension  Advance
     other than an Applied Non-Extension Advance.



          "UNAPPLIED  PROVIDER ADVANCE" means any Provider Advance other than an
     Applied Provider Advance.

          "UNPAID  ADVANCE"  has the  meaning  assigned  to such term in Section
     2.05.

          (b) TERMS DEFINED IN THE INTERCREDITOR  AGREEMENT. For all purposes of
this Agreement,  the following terms shall have the respective meanings assigned
to such terms in the Intercreditor Agreement:

     "ACCELERATION",   "CERTIFICATES",  "CLASS  A-1  CERTIFICATES",  "CLASS  A-2
     CERTIFICATES", "CLASS B CERTIFICATES", "CLASS C-1 CERTIFICATES", "CLASS C-2
     CASH   COLLATERAL   ACCOUNT",   "CLASS   C-2   CERTIFICATES",   "CLASS  C-2
     CERTIFICATEHOLDERS", "CLASS C-2 TRUST", "CLASS C-2 TRUST AGREEMENT", "CLASS
     C-2  TRUSTEE",  "CLOSING  DATE",  "CONTINENTAL",   "CONTINENTAL  BANKRUPTCY
     EVENT",  "CONTROLLING  PARTY",  "CORPORATE TRUST OFFICE",  "DELIVERY PERIOD
     EXPIRY  DATE",  "DISTRIBUTION  DATE",  "DOWNGRADED  FACILITY",   "EQUIPMENT
     NOTES",  "FEE  LETTER",   "FINAL  LEGAL  DISTRIBUTION   DATE",   "FINANCING
     AGREEMENT",  "INDENTURE",  "INTEREST PAYMENT DATE",  "INVESTMENT EARNINGS",
     "LEASED AIRCRAFT",  "LIQUIDITY FACILITY",  "LIQUIDITY  OBLIGATIONS",  "LOAN
     TRUSTEE",  "MOODY'S",  "NON-EXTENDED FACILITY",  "NOTE PURCHASE AGREEMENT",
     "OPERATIVE  AGREEMENTS",   "OWNED  AIRCRAFT",   "PARTICIPATION  AGREEMENT",
     "PERFORMING  EQUIPMENT NOTE",  "PERSON",  "POOL BALANCE",  "RATING AGENCY",
     "RATINGS CONFIRMATION", "REGULAR DISTRIBUTION Date", "REPLACEMENT LIQUIDITY
     FACILITY",  "RESPONSIBLE OFFICER",  "SCHEDULED PAYMENT", "SPECIAL PAYMENT",
     "STANDARD  &  Poor's",  "STATED  INTEREST  RATE",   "SUBORDINATION  AGENT",
     "TAXES",  "THRESHOLD RATING",  "TRANSFER",  "TRUST AGREEMENTS",  "TRUSTEE",
     "UNDERWRITERS", "UNDERWRITING AGREEMENT", and "WRITTEN NOTICE".

                                   ARTICLE II

                       AMOUNT AND TERMS OF THE COMMITMENT

          Section 2.01. THE ADVANCES.  The Liquidity Provider hereby irrevocably
agrees,  on the terms and conditions  hereinafter set forth, to make Advances to
the  Borrower  from time to time on any  Business Day during the period from the
Effective  Date until 12:00 Noon (New York City time) on the Expiry Date (unless
the  obligations  of the  Liquidity  Provider  shall be  earlier  terminated  in
accordance with the terms of Section 2.04(b)) in an aggregate amount at any time
outstanding not to exceed the Maximum Commitment.

          Section 2.02. MAKING THE ADVANCES. (a) Interest Advances shall be made
in one or more  Borrowings by delivery to the Liquidity  Provider of one or more
written and completed  Notices of Borrowing in substantially the form of Annex I
attached hereto,  signed by a Responsible Officer of the Borrower,  in an amount
not  exceeding the Maximum  Available  Commitment at such time and shall be used
solely for the payment when due of interest on the Class C-2 Certificates at the
Stated  Interest  Rate  therefor  in  accordance  with  Section  3.6(a)  of  the
Intercreditor   Agreement.   Each   Interest   Advance  made   hereunder   shall
automatically  reduce the Maximum Available  Commitment and the amount available
to be borrowed  hereunder by subsequent  Advances by the amount of such Interest



Advance  (subject  to  reinstatement  as provided  in the next  sentence).  Upon
repayment  to the  Liquidity  Provider  in full of the  amount  of any  Interest
Advance made pursuant to this Section  2.02(a),  together with accrued  interest
thereon  (as  provided  herein),  the  Maximum  Available  Commitment  shall  be
reinstated by the amount of such repaid Interest Advance,  but not to exceed the
Maximum Commitment;  PROVIDED,  HOWEVER,  that the Maximum Available  Commitment
shall not be so reinstated at any time if (i) a Liquidity Event of Default shall
have occurred and be continuing and (ii) there is a Performing Note Deficiency.

          (b) A  Non-Extension  Advance  shall be made in a single  Borrowing if
this  Agreement  is not  extended  in  accordance  with  Section  3.6(d)  of the
Intercreditor Agreement (unless a Replacement Liquidity Facility to replace this
Agreement  shall have been  delivered  to the Borrower as  contemplated  by said
Section 3.6(d) within the time period  specified in such Section) by delivery to
the  Liquidity  Provider  of a written  and  completed  Notice of  Borrowing  in
substantially  the form of Annex II  attached  hereto,  signed by a  Responsible
Officer of the Borrower,  in an amount equal to the Maximum Available Commitment
at such time, and shall be used to fund the Class C-2 Cash Collateral Account in
accordance  with said  Section  3.6(d) and Section  3.6(f) of the  Intercreditor
Agreement.

          (c) A Downgrade  Advance  shall be made in a single  Borrowing  upon a
downgrading of the Guarantor's short-term unsecured debt rating issued by either
Rating Agency below the applicable  Threshold Rating or the Guarantee  Agreement
ceasing to be in full force and effect or becoming  invalid or  unenforceable or
the  Guarantor  denying its  liability  thereunder  (as  provided for in Section
3.6(c) of the Intercreditor  Agreement) unless a Replacement  Liquidity Facility
to replace this Agreement shall have been  previously  delivered to the Borrower
in accordance with said Section 3.6(c), by delivery to the Liquidity Provider of
a written and completed Notice of Borrowing in  substantially  the form of Annex
III attached  hereto,  signed by a Responsible  Officer of the  Borrower,  in an
amount equal to the Maximum Available Commitment at such time, and shall be used
to fund the Class C-2 Cash  Collateral  Account in accordance  with said Section
3.6(c) and Section 3.6(f) of the Intercreditor Agreement.

          (d) A Final  Advance  shall  be made in a  single  Borrowing  upon the
receipt by the  Borrower of a  Termination  Notice from the  Liquidity  Provider
pursuant  to Section  6.01 hereof by  delivery  to the  Liquidity  Provider of a
written and completed Notice of Borrowing in substantially  the form of Annex IV
attached hereto,  signed by a Responsible Officer of the Borrower,  in an amount
equal to the Maximum  Available  Commitment  at such time,  and shall be used to
fund the Class C-2 Cash Collateral Account (in accordance with Section 3.6(i) of
the Intercreditor Agreement) and Section 3.6(f) of the Intercreditor Agreement.

          (e) Each  Borrowing  shall be made on notice in  writing (a "NOTICE OF
BORROWING")  in  substantially  the form required by Section  2.02(a),  2.02(b),
2.02(c) or 2.02(d),  as the case may be, given by the Borrower to the  Liquidity
Provider.  If a Notice of  Borrowing  is delivered by the Borrower in respect of
any  Borrowing no later than 1:00 p.m.  (New York City time) on a Business  Day,
upon  satisfaction  of the  conditions  precedent set forth in Section 4.02 with
respect to a requested Borrowing, the Liquidity Provider shall make available to



the Borrower,  in accordance with its payment  instructions,  the amount of such
Borrowing in U.S. dollars and immediately available funds, before 4:00 p.m. (New
York City time) on such Business Day or on such later  Business Day specified in
such Notice of Borrowing.  If a Notice of Borrowing is delivered by the Borrower
in respect of any  Borrowing  after 1:00 p.m. (New York City time) on a Business
Day, upon  satisfaction  of the  conditions  precedent set forth in Section 4.02
with  respect  to a  requested  Borrowing,  the  Liquidity  Provider  shall make
available to the Borrower,  in  accordance  with its payment  instructions,  the
amount of such  Borrowing in U.S.  dollars and in immediately  available  funds,
before 12:00 Noon (New York City time) on the first  Business Day next following
the day of receipt of such Notice of  Borrowing  or on such later  Business  Day
specified by the Borrower in such Notice of Borrowing. Payments of proceeds of a
Borrowing  shall be made by wire transfer of immediately  available funds to the
Borrower in  accordance  with such wire  transfer  instructions  as the Borrower
shall furnish from time to time to the Liquidity Provider for such purpose. Each
Notice of Borrowing shall be irrevocable and binding on the Borrower.

          (f) Upon the making of any Advance  requested  pursuant to a Notice of
Borrowing, in accordance with the Borrower's payment instructions, the Liquidity
Provider shall be fully  discharged of its obligation  hereunder with respect to
such Notice of Borrowing,  and the Liquidity  Provider  shall not  thereafter be
obligated  to make any further  Advances  hereunder in respect of such Notice of
Borrowing to the Borrower or to any other Person. Notwithstanding the provisions
of  Section  2.02(e),  if the  Liquidity  Provider  makes an  Advance  requested
pursuant to a Notice of Borrowing  before 12:00 noon (New York City time) on the
second Business Day after the date of payment specified in said Section 2.02(e),
the Liquidity  Provider shall have fully  discharged its  obligations  hereunder
with  respect to such Advance and shall not be in default  hereunder.  Following
the making of any Advance pursuant to Section 2.02(b), (c) or (d) hereof to fund
the Class C-2 Cash  Collateral  Account,  the Liquidity  Provider  shall have no
interest in or rights to the Class C-2 Cash Collateral Account,  such Advance or
any other amounts from time to time on deposit in the Class C-2 Cash  Collateral
Account;  PROVIDED that the foregoing shall not affect or impair the obligations
of the  Subordination  Agent to make the  distributions  contemplated by Section
3.6(e) or (f) of the Intercreditor Agreement. By paying to the Borrower proceeds
of Advances  requested by the Borrower in accordance with the provisions of this
Agreement,  the Liquidity Provider makes no representation as to, and assumes no
responsibility for, the correctness or sufficiency for any purpose of the amount
of the Advances so made and requested.

          Section  2.03.  FEES.  The  Borrower  agrees  to pay to the  Liquidity
Provider the fees set forth in the Fee Letter applicable to this Agreement.

          Section 2.04. REDUCTION OR TERMINATION OF THE MAXIMUM COMMITMENT.

          (a) AUTOMATIC  REDUCTION.  Promptly  following  each date on which the
Required Amount is reduced as a result of a reduction in the Pool Balance of the
Class C-2 Certificates or otherwise,  the Maximum Commitment shall automatically
be reduced to an amount equal to such reduced  Required Amount (as calculated by
the Borrower). The Borrower shall give notice of any such automatic reduction of
the Maximum  Commitment  to the  Liquidity  Provider  within two  Business  Days



thereof. The failure by the Borrower to furnish any such notice shall not affect
such automatic reduction of the Maximum Commitment.

          (b)  TERMINATION.  Upon the  making of any  Provider  Advance or Final
Advance  hereunder or the occurrence of the Termination  Date, the obligation of
the Liquidity  Provider to make further Advances  hereunder shall  automatically
and irrevocably terminate, and the Borrower shall not be entitled to request any
further Borrowing hereunder.

          Section 2.05.  REPAYMENTS OF INTEREST  ADVANCES OR THE FINAL  ADVANCE.
Subject to Sections  2.06,  2.07 and 2.09 hereof,  the Borrower  hereby  agrees,
without notice of an Advance or demand for repayment from the Liquidity Provider
(which notice and demand are hereby waived by the Borrower), to pay, or to cause
to be paid,  to the  Liquidity  Provider  on each  date on which  the  Liquidity
Provider shall make an Interest Advance or the Final Advance, an amount equal to
(a) the amount of such Advance (any such Advance,  until repaid,  is referred to
herein as an "UNPAID  ADVANCE"),  plus (b)  interest  on the amount of each such
Unpaid  Advance as provided in Section  3.07  hereof;  PROVIDED  that if (i) the
Liquidity Provider shall make a Provider Advance at any time after making one or
more Interest  Advances which shall not have been repaid in accordance with this
Section 2.05 or (ii) this Liquidity Facility shall become a Downgraded  Facility
or Non-Extended  Facility at any time when  unreimbursed  Interest Advances have
reduced the Maximum  Available  Commitment to zero, then such Interest  Advances
shall  cease to  constitute  Unpaid  Advances  and  shall be deemed to have been
changed into an Applied Downgrade Advance or an Applied  Non-Extension  Advance,
as the case may be,  for all  purposes  of this  Agreement  (including,  without
limitation,  for the  purpose  of  determining  when such  Interest  Advance  is
required to be repaid to the Liquidity  Provider in accordance with Section 2.06
and for the  purposes  of  Section  2.06(b)).  The  Borrower  and the  Liquidity
Provider  agree that the  repayment in full of each  Interest  Advance and Final
Advance on the date such  Advance is made is  intended  to be a  contemporaneous
exchange for new value given to the Borrower by the Liquidity Provider.

          Section 2.06.  REPAYMENTS OF PROVIDER  ADVANCES.  (a) Amounts advanced
hereunder in respect of a Provider  Advance  shall be deposited in the Class C-2
Cash  Collateral  Account,  invested  and  withdrawn  from  the  Class  C-2 Cash
Collateral  Account  as  set  forth  in  Sections  3.6(c),  (d)  and  (f) of the
Intercreditor  Agreement.  The Borrower agrees to pay to the Liquidity Provider,
on each Regular Distribution Date,  commencing on the first Regular Distribution
Date after the making of a Provider Advance, interest on the principal amount of
any such Provider Advance as provided in Section 3.07; PROVIDED,  HOWEVER,  that
amounts  in  respect of a  Provider  Advance  withdrawn  from the Class C-2 Cash
Collateral  Account  for  the  purpose  of  paying  interest  on the  Class  C-2
Certificates  in accordance with Section 3.6(f) of the  Intercreditor  Agreement
(the amount of any such withdrawal being (y) in the case of a Downgrade Advance,
an "APPLIED DOWNGRADE  ADVANCE" and (z) in the case of a Non-Extension  Advance,
an "APPLIED  NON-EXTENSION  ADVANCE"  and,  together  with an Applied  Downgrade
Advance,  an "APPLIED  PROVIDER  ADVANCE") shall thereafter  (subject to Section
2.06(b)) be treated as an Interest  Advance under this Agreement for purposes of
determining the Applicable Liquidity Rate for interest payable thereon; PROVIDED
FURTHER,  HOWEVER,  that if,  following  the making of a Provider  Advance,  the
Liquidity  Provider  delivers a Termination  Notice to the Borrower  pursuant to
Section 6.01 hereof,  such  Provider  Advance  shall  thereafter be treated as a



Final Advance under this  Agreement for purposes of  determining  the Applicable
Liquidity Rate for interest payable  thereon.  Subject to Sections 2.07 and 2.09
hereof,  immediately  upon the withdrawal of any amounts from the Class C-2 Cash
Collateral  Account  on account  of a  reduction  in the  Required  Amount,  the
Borrower  shall  repay to the  Liquidity  Provider  a  portion  of the  Provider
Advances in a principal  amount equal to such  reduction,  plus  interest on the
principal amount prepaid as provided in Section 3.07 hereof.

          (b) At any time  when an  Applied  Provider  Advance  (or any  portion
thereof)  is  outstanding,  upon the  deposit  in the Class C-2 Cash  Collateral
Account  of any amount  pursuant  to clause  "THIRD"  of  Section  2.4(b) of the
Intercreditor  Agreement,  clause  "THIRD" of Section  3.2 of the  Intercreditor
Agreement or clause "FOURTH" of Section 3.3 of the Intercreditor  Agreement (any
such amount being a  "REPLENISHMENT  AMOUNT") for the purpose of replenishing or
increasing the balance  thereof up to the Required  Amount at such time, (i) the
aggregate  outstanding principal amount of all Applied Provider Advances (and of
Provider Advances treated as an Interest Advance for purposes of determining the
Applicable  Liquidity Rate for interest  payable thereon) shall be automatically
reduced  by the  amount  of such  Replenishment  Amount  and (ii) the  aggregate
outstanding  principal  amount  of all  Unapplied  Provider  Advances  shall  be
automatically increased by the amount of such Replenishment Amount.

          (c)  Upon  the  provision  of  a  Replacement  Liquidity  Facility  in
replacement  of  this  Agreement  in  accordance  with  Section  3.6(e)  of  the
Intercreditor  Agreement,  amounts  remaining  on  deposit in the Class C-2 Cash
Collateral  Account after giving effect to any Applied  Provider  Advance on the
date of such replacement shall be reimbursed to the Liquidity Provider, but only
to the extent  such  amounts  are  necessary  to repay in full to the  Liquidity
Provider all amounts owing to it hereunder.

          Section   2.07.   PAYMENTS  TO  THE  LIQUIDITY   PROVIDER   UNDER  THE
INTERCREDITOR  AGREEMENT.  In order to provide for payment or  repayment  to the
Liquidity  Provider  of  any  amounts  hereunder,  the  Intercreditor  Agreement
provides  that amounts  available  and referred to in Articles II and III of the
Intercreditor  Agreement,  to  the  extent  payable  to the  Liquidity  Provider
pursuant  to  the  terms  of the  Intercreditor  Agreement  (including,  without
limitation, Section 3.6(f) of the Intercreditor Agreement), shall be paid to the
Liquidity Provider in accordance with the terms thereof.  Amounts so paid to the
Liquidity  Provider  shall be applied by the  Liquidity  Provider  to  Liquidity
Obligations then due and payable in accordance with the Intercreditor  Agreement
or, if not provided for in the Intercreditor  Agreement,  then in such manner as
the Liquidity Provider shall deem appropriate.

          Section 2.08. BOOK ENTRIES.  The Liquidity  Provider shall maintain in
accordance  with its usual  practice  an  account  or  accounts  evidencing  the
indebtedness of the Borrower  resulting from Advances made from time to time and
the amounts of principal  and interest  payable  hereunder and paid from time to
time in respect thereof;  PROVIDED,  HOWEVER,  that the failure by the Liquidity
Provider to maintain such account or accounts  shall not affect the  obligations
of the Borrower in respect of Advances.



          Section 2.09.  PAYMENTS FROM AVAILABLE  FUNDS ONLY. All payments to be
made by the Borrower  under this  Agreement  shall be made only from the amounts
that constitute  Scheduled Payments,  Special Payments or payments under Section
8.1 of the  Participation  Agreements with respect to Owned  Aircraft,  payments
under  Section  9.1 of the  Participation  Agreements  with  respect  to  Leased
Aircraft  and Section 6 of the Note  Purchase  Agreement  and only to the extent
that the Borrower shall have sufficient  income or proceeds  therefrom to enable
the Borrower to make payments in  accordance  with the terms hereof after giving
effect to the  priority of payments  provisions  set forth in the  Intercreditor
Agreement.  The  Liquidity  Provider  agrees  that it will  look  solely to such
amounts  to the extent  available  for  distribution  to it as  provided  in the
Intercreditor  Agreement  and  this  Agreement  and that  the  Borrower,  in its
individual  capacity,  is not personally liable to it for any amounts payable or
liability under this Agreement  except as expressly  provided in this Agreement,
the Intercreditor Agreement or any Participation  Agreement.  Amounts on deposit
in the Class C-2 Cash  Collateral  Account shall be available to the Borrower to
make  payments  under this  Agreement  only to the  extent and for the  purposes
expressly contemplated in Section 3.6(f) of the Intercreditor Agreement.

          Section 2.10. EXTENSION OF THE EXPIRY DATE; NON-EXTENSION ADVANCE. The
Expiry Date shall be automatically extended,  effective on the 25th day prior to
each  Expiry  Date  (unless  such Expiry Date is on or after the date that is 15
days after the Final Legal  Distribution  Date for the Class C-2  Certificates),
for a period of 364 days after such Expiry Date (unless the  obligations  of the
Liquidity  Provider are earlier terminated in accordance with the terms hereof),
without the  necessity of any act on the part of the  Borrower or the  Liquidity
Provider,  unless the Liquidity Provider shall advise the Borrower prior to such
25th day that it does not agree to such  extension of such Expiry Date, in which
event (and if the Liquidity  Provider shall not have been replaced in accordance
with Section  3.6(e) of the  Intercreditor  Agreement),  the  Borrower  shall be
entitled on and after such 25th day (but prior to such Expiry Date) to request a
Non-Extension  Advance in  accordance  with Section  2.02(b)  hereof and Section
3.6(d) of the Intercreditor Agreement.

                                   ARTICLE III

                           OBLIGATIONS OF THE BORROWER

          Section 3.01. INCREASED COSTS. The Borrower shall pay to the Liquidity
Provider  from time to time such amounts as may be necessary to  compensate  the
Liquidity  Provider for any increased  costs incurred by the Liquidity  Provider
which are attributable to its making or maintaining any LIBOR Advances hereunder
or its obligation to make any such Advances  hereunder,  or any reduction in any
amount  receivable  by  the  Liquidity  Provider  under  this  Agreement  or the
Intercreditor Agreement in respect of any such Advances or such obligation (such
increases in costs and  reductions  in amounts  receivable  being herein  called
"ADDITIONAL Costs"),  resulting from any change after the date of this Agreement
in U.S. federal,  state,  municipal,  or foreign laws or regulations  (including
Regulation D of the Board of Governors of the Federal  Reserve  System),  or the
adoption  or making  after the date of this  Agreement  of any  interpretations,
directives, or requirements applying to a class of banks including the Liquidity
Provider  under any U.S.  federal,  state,  municipal,  or any  foreign  laws or
regulations  (whether or not having the force of law) by any court, central bank



or monetary authority charged with the interpretation or administration  thereof
(a "REGULATORY CHANGE"), which: (1) changes the basis of taxation of any amounts
payable to the Liquidity  Provider  under this  Agreement in respect of any such
Advances  (other than Excluded  Taxes);  or (2) imposes or modifies any reserve,
special  deposit,  compulsory  loan  or  similar  requirements  relating  to any
extensions of credit or other assets of, or any deposits with other  liabilities
of, the Liquidity Provider (including any such Advances or any deposits referred
to in the  definition  of LIBOR  Rate or  related  definitions).  The  Liquidity
Provider agrees to use reasonable efforts  (consistent with applicable legal and
regulatory  restrictions)  to change the  jurisdiction of its Facility Office if
making such change would avoid the need for, or reduce the amount of, any amount
payable  under this  Section  that may  thereafter  accrue and would not, in the
reasonable judgment of the Liquidity Provider,  be otherwise  disadvantageous to
the Liquidity Provider.

          The Liquidity Provider will notify the Borrower of any event occurring
after the date of this  Agreement  that will entitle the  Liquidity  Provider to
compensation  pursuant to this Section 3.01 as promptly as practicable  after it
obtains  knowledge  thereof and determines to request such  compensation,  which
notice shall describe in reasonable  detail the  calculation of the amounts owed
under this Section.  Determinations  by the  Liquidity  Provider for purposes of
this Section 3.01 of the effect of any Regulatory  Change on its costs of making
or maintaining  Advances or on amounts  receivable by it in respect of Advances,
and of the additional  amounts required to compensate the Liquidity  Provider in
respect of any  Additional  Costs,  shall be prima facie  evidence of the amount
owed under this Section.

          Notwithstanding  the preceding two paragraphs,  the Liquidity Provider
and the  Subordination  Agent agree that the initial  Liquidity  Provider (i.e.,
Morgan Stanley Capital Services,  Inc.) shall not be entitled to the benefits of
the preceding  two  paragraphs,  PROVIDED,  however,  any permitted  assignee or
participant of the initial  Liquidity  Provider which is a bank organized  under
the laws of the United  States or any State  thereof  shall be  entitled  to the
benefits of the preceding two paragraphs (subject,  in the case of any permitted
participant, to the limitation set forth in Section 7.08 hereof).

          Section 3.02.  CAPITAL ADEQUACY.  If (1) the adoption,  after the date
hereof, of any applicable governmental law, rule or regulation regarding capital
adequacy,  (2) any  change,  after the date  hereof,  in the  interpretation  or
administration  of any such law, rule or regulation by any central bank or other
governmental authority charged with the interpretation or administration thereof
or (3) compliance by the Liquidity  Provider or any corporation  controlling the
Liquidity  Provider  with  any  applicable   guideline  or  request  of  general
applicability,  issued  after  the date  hereof,  by any  central  bank or other
governmental authority (whether or not having the force of law) that constitutes
a change of the nature  described  in clause (2), has the effect of requiring an
increase in the amount of capital  required to be  maintained  by the  Liquidity
Provider  or any  corporation  controlling  the  Liquidity  Provider,  and  such
increase is based upon the Liquidity Provider's  obligations hereunder and other
similar obligations,  the Borrower shall pay to the Liquidity Provider from time
to time such  additional  amount or amounts as are necessary to  compensate  the
Liquidity  Provider  for such  portion of such  increase as shall be  reasonably
allocable to the Liquidity Provider's obligations to the Borrower hereunder. The



Liquidity Provider agrees to use reasonable efforts  (consistent with applicable
legal and regulatory  restrictions)  to change the  jurisdiction of its Facility
Office if making such change  would avoid the need for, or reduce the amount of,
any amount payable under this Section that may thereafter  accrue and would not,
in the reasonable  judgment of the Liquidity Provider,  be otherwise  materially
disadvantageous to the Liquidity Provider.

          The Liquidity Provider will notify the Borrower of any event occurring
after the date of this  Agreement  that will entitle the  Liquidity  Provider to
compensation  pursuant to this Section 3.02 as promptly as practicable  after it
obtains  knowledge  thereof and determines to request such  compensation,  which
notice shall describe in reasonable  detail the  calculation of the amounts owed
under this Section.  Determinations  by the  Liquidity  Provider for purposes of
this  Section  3.02 of the  effect of any  increase  in the  amount  of  capital
required to be maintained by the Liquidity  Provider and of the amount allocable
to the Liquidity Provider's obligations to the Borrower hereunder shall be prima
facie evidence of the amounts owed under this Section.

          Notwithstanding  the preceding two paragraphs,  the Liquidity Provider
and the  Subordination  Agent agree that the initial  Liquidity  Provider (i.e.,
Morgan Stanley Capital Services,  Inc.) shall not be entitled to the benefits of
the preceding  two  paragraphs,  PROVIDED,  however,  any permitted  assignee or
participant of the initial  Liquidity  Provider which is a bank organized  under
the laws of the United  States or any State  thereof  shall be  entitled  to the
benefits of the preceding two paragraphs (subject,  in the case of any permitted
participant, to the limitation set forth in Section 7.08 hereof).

          Section 3.03.  PAYMENTS FREE OF  DEDUCTIONS.  All payments made by the
Borrower  under  this  Agreement  shall be made free and clear of,  and  without
reduction  for or on account  of, any  present or future  stamp or other  taxes,
levies, imposts, duties, charges, fees, deductions,  withholdings,  restrictions
or  conditions  of any  nature  whatsoever  now or  hereafter  imposed,  levied,
collected,  withheld or assessed,  excluding  Excluded Taxes (such  non-excluded
taxes  being  referred to herein,  collectively,  as  "NON-EXCLUDED  TAXES" and,
individually,  as a "NON-EXCLUDED  TAX"). If any Non-Excluded Taxes are required
to be withheld  from any amounts  payable to the Liquidity  Provider  under this
Agreement,  the amounts so payable to the Liquidity  Provider shall be increased
to the extent necessary to yield to the Liquidity Provider (after payment of all
Non-Excluded  Taxes)  interest  or any other  such  amounts  payable  under this
Agreement  at the  rates or in the  amounts  specified  in this  Agreement.  The
Liquidity  Provider  agrees  to use  reasonable  efforts  (consistent  with  its
internal   policy  and  legal  and  regulatory   restrictions)   to  change  the
jurisdiction  of its Facility  Office if making such change would avoid the need
for, or reduce the amount of, any such  additional  amounts that may  thereafter
accrue and would not, in the reasonable judgment of the Liquidity  Provider,  be
otherwise  disadvantageous to the Liquidity Provider. From time to time upon the
reasonable  request of the Borrower,  if the Liquidity Provider is not organized
under the laws of the United States or any State thereof, the Liquidity Provider
agrees to provide to the Borrower two original  Internal  Revenue  Service Forms
1001 or 4224, as  appropriate,  or any successor or other form prescribed by the
Internal Revenue Service,  certifying that the Liquidity Provider is exempt from
or  entitled  to a reduced  rate of United  States  withholding  tax on payments
pursuant to this Agreement.



          Section 3.04.  PAYMENTS.  The Borrower  shall make or cause to be made
each payment to the Liquidity  Provider  under this Agreement so as to cause the
same to be received by the Liquidity Provider not later than 1:00 P.M. (New York
City time) on the day when due.  The  Borrower  shall make all such  payments in
lawful  money of the United  States of  America,  to the  Liquidity  Provider in
immediately  available funds, by wire transfer to Citibank,  N.A., New York, New
York, ABA  #021000089,  Account Name:  Morgan Stanley  Capital  Services,  Inc.,
Account No. 4072-4601, Account Reference: Continental Airlines, Inc. 1998-3C-2.

          Section 3.05. COMPUTATIONS.  All computations of interest based on the
Base Rate  shall be made on the basis of a year of 365 or 366 days,  as the case
may be, and all  computations  of interest based on the LIBOR Rate shall be made
on the basis of a year of 360 days,  in each case for the actual  number of days
(including the first day but excluding the last day) occurring in the period for
which such interest is payable.

          Section 3.06. PAYMENT ON NON-BUSINESS DAYS. Whenever any payment to be
made  hereunder  shall be stated to be due on a day other than a  Business  Day,
such payment shall be made on the next succeeding Business Day and no additional
interest shall be due as a result (and if so made,  shall be deemed to have been
made when  due).  If any  payment in  respect  of  interest  on an Advance is so
deferred to the next succeeding  Business Day, such deferral shall not delay the
commencement  of the next Interest Period for such Advance (if such Advance is a
LIBOR  Advance) or reduce the number of days for which  interest will be payable
on such Advance on the next interest payment date for such Advance.

          Section  3.07.  INTEREST.  (a) Subject to Section  2.09,  the Borrower
shall pay, or shall cause to be paid, without  duplication,  interest on (i) the
unpaid  principal  amount of each  Advance from and  including  the date of such
Advance (or, in the case of an Applied Provider Advance,  from and including the
date on  which  the  amount  thereof  was  withdrawn  from  the  Class  C-2 Cash
Collateral  Account  to pay  interest  on the  Class  C-2  Certificates)  to but
excluding the date such principal  amount shall be paid in full (or, in the case
of an Applied Provider Advance,  the date on which the Class C-2 Cash Collateral
Account is fully  replenished  in respect  of such  Advance)  and (ii) any other
amount due hereunder (whether fees,  commissions,  expenses or other amounts or,
to the extent permitted by law, installments of interest on Advances or any such
other  amount)  which is not paid  when due  (whether  at  stated  maturity,  by
acceleration  or  otherwise)  from and  including  the due date  thereof  to but
excluding  the  date  such  amount  is paid in full,  in each  such  case,  at a
fluctuating  interest  rate  per  annum  for each  day  equal to the  Applicable
Liquidity  Rate (as defined  below) for such  Advance or such other amount as in
effect  for such  day,  but in no event at a rate  per  annum  greater  than the
maximum rate permitted by applicable  law;  PROVIDED,  HOWEVER,  that, if at any
time the  otherwise  applicable  interest rate as set forth in this Section 3.07
shall exceed the maximum rate  permitted by applicable  law, then any subsequent
reduction  in such  interest  rate will not reduce the rate of interest  payable
pursuant to this Section 3.07 below the maximum rate permitted by applicable law
until the total amount of interest  accrued  equals the amount of interest  that
would have accrued if such  otherwise  applicable  interest rate as set forth in
this Section 3.07 had at all times been in effect.



          (b)  Except as  provided  in clause (e) below,  each  Advance  will be
either a Base Rate Advance or a LIBOR Advance as provided in this Section.  Each
such  Advance  will be a Base Rate  Advance  for the period from the date of its
borrowing to (but  excluding)  the third  Business Day  following  the Liquidity
Provider's receipt of the Notice of Borrowing for such Advance. Thereafter, such
Advance shall be a LIBOR  Advance;  provided that the Borrower (at the direction
of  the  Controlling  Party,  so  long  as the  Liquidity  Provider  is not  the
Controlling Party) may (x) convert the Final Advance into a Base Rate Advance on
the last day of an  Interest  Period for such  Advance  by giving the  Liquidity
Provider no less than four Business  Days' prior written notice of such election
or (y)  elect to  maintain  the Final  Advance  as a Base  Rate  Advance  by not
requesting a conversion of the Final Advance to a LIBOR Advance under Clause (5)
of the  applicable  Notice of Borrowing  (or, if such Final Advance is deemed to
have been made,  without  delivery of a Notice of Borrowing  pursuant to Section
2.06, by requesting,  prior to 11:00 a.m. on the first Business Day  immediately
following the Borrower's receipt of the applicable Termination Notice, that such
Final Advance not be converted from a Base Rate Advance to a LIBOR Advance).

          (c) Each LIBOR Advance shall bear interest during each Interest Period
at a rate per annum  equal to the LIBOR Rate for such  Interest  Period plus the
Applicable Margin for such LIBOR Advance,  payable in arrears on the last day of
such Interest Period and, in the event of the payment of principal of such LIBOR
Advance on a day other than such last day,  on the date of such  payment (to the
extent of interest accrued on the amount of principal repaid).

          (d) Each Base Rate  Advance  shall bear  interest  at a rate per annum
equal to the Base Rate plus the  Applicable  Margin for such Base Rate  Advance,
payable in arrears on each  Regular  Distribution  Date and, in the event of the
payment  of  principal  of such Base Rate  Advance on a day other than a Regular
Distribution  Date,  on the date of such  payment  (to the  extent  of  interest
accrued on the amount of principal repaid).

          (e) Each outstanding Unapplied Provider Advance shall bear interest in
an amount  equal to the  Investment  Earnings on amounts on deposit in the Class
C-2 Cash  Collateral  Account  plus the  Applicable  Margin  for such  Unapplied
Provider  Advance on the amount of such Unapplied  Provider Advance from time to
time, payable in arrears on each Regular Distribution Date.

          (f)  Each  amount  not  paid  when  due   hereunder   (whether   fees,
commissions, expenses or other amounts or, to the extent permitted by applicable
law,  installments  of interest on Advances but excluding  Advances)  shall bear
interest at a rate per annum equal to the Base Rate plus 2.00% until paid.

          (g) Each change in the Base Rate shall become  effective  immediately.
The rates of interest specified in this Section 3.07 with respect to any Advance
or other amount shall be referred to as the "APPLICABLE LIQUIDITY RATE".

          Section 3.08.  REPLACEMENT OF BORROWER.  From time to time and subject
to the successor  Borrower's  meeting the eligibility  requirements set forth in
Section  6.9 of the  Intercreditor  Agreement  applicable  to the  Subordination



Agent,  upon the  effective  date and time  specified in a written and completed
Notice of Replacement  Subordination Agent in substantially the form of Annex VI
attached hereto (a "NOTICE OF REPLACEMENT SUBORDINATION AGENT") delivered to the
Liquidity  Provider by the then  Borrower,  the  successor  Borrower  designated
therein shall be substituted for as the Borrower for all purposes hereunder.

          Section 3.09. FUNDING LOSS INDEMNIFICATION.  The Borrower shall pay to
the Liquidity Provider,  upon the request of the Liquidity Provider, such amount
or amounts as shall be sufficient  (in the  reasonable  opinion of the Liquidity
Provider) to compensate it for any loss,  cost, or expense incurred by reason of
the  liquidation  or  redeployment  of deposits  or other funds  acquired by the
Liquidity  Provider to fund or maintain any LIBOR Advance (but excluding loss of
anticipated profits) incurred as a result of:

          (1) Any repayment of a LIBOR Advance on a date other than the last day
     of the Interest Period for such Advance; or

          (2) Any failure by the Borrower to borrow a LIBOR  Advance on the date
     for borrowing specified in the relevant notice under Section 2.02.

          Section 3.10. ILLEGALITY.  Notwithstanding any other provision in this
Agreement,  if any change in any  applicable  law,  rule or  regulation,  or any
change in the  interpretation  or  administration  thereof  by any  governmental
authority,  central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by the Liquidity Provider (or its Facility
Office) with any request or  directive  (whether or not having the force of law)
of any such authority,  central bank or comparable agency shall make it unlawful
or impossible for the Liquidity Provider (or its Facility Office) to maintain or
fund its LIBOR  Advances,  then upon  notice to the  Borrower  by the  Liquidity
Provider,  the  outstanding  principal  amount  of the LIBOR  Advances  shall be
converted to Base Rate  Advances (a)  immediately  upon demand of the  Liquidity
Provider, if such change or compliance with such request, in the judgment of the
Liquidity Provider,  requires immediate  repayment;  or (b) at the expiration of
the last Interest  Period to expire before the effective date of any such change
or request.

                                   ARTICLE IV

                              CONDITIONS PRECEDENT

          Section 4.01.  CONDITIONS  PRECEDENT TO EFFECTIVENESS OF SECTION 2.01.
Section 2.01 of this  Agreement  shall  become  effective on and as of the first
date (the  "EFFECTIVE  DATE") on which the following  conditions  precedent have
been satisfied or waived:

          (a) The  Liquidity  Provider  shall  have  received  on or before  the
     Closing  Date  each of the  following,  and in the  case  of each  document
     delivered  pursuant to  paragraphs  (i),  (ii) and (iii),  each in form and
     substance satisfactory to the Liquidity Provider:

               (i) This Agreement duly executed on behalf of the Borrower;



               (ii) The Intercreditor  Agreement duly executed on behalf of each
          of the parties thereto;

               (iii) Fully executed  copies of each of the Operative  Agreements
          executed and  delivered on or before the Closing Date (other than this
          Agreement and the Intercreditor Agreement);

               (iv) A copy of the Prospectus  Supplement and specimen  copies of
          the Class C-2 Certificates;

               (v) An executed copy of each  document,  instrument,  certificate
          and opinion  delivered on or before the Closing  Date  pursuant to the
          Class C-2 Trust Agreement,  the Intercreditor  Agreement and the other
          Operative Agreements (in the case of each such opinion, other than the
          opinion of  counsel  for the  Underwriters,  either  addressed  to the
          Liquidity  Provider  or  accompanied  by a  letter  from  the  counsel
          rendering  such opinion to the effect that the  Liquidity  Provider is
          entitled  to  rely  on  such  opinion  as of its  date  as if it  were
          addressed to the Liquidity Provider);

               (vi)  Evidence  that  there  shall have been made and shall be in
          full force and effect, all filings,  recordings and/or  registrations,
          and there  shall have been given or taken any notice or other  similar
          action as may be  reasonably  necessary  or, to the extent  reasonably
          requested by the Liquidity Provider, reasonably advisable, in order to
          establish,   perfect,  protect  and  preserve  the  right,  title  and
          interest,  remedies, powers, privileges,  liens and security interests
          of,  or for  the  benefit  of,  the  Trustees,  the  Borrower  and the
          Liquidity  Provider created by the Operative  Agreements  executed and
          delivered on or prior to the Closing Date;

               (vii) An  agreement  from  Continental,  pursuant  to  which  (i)
          Continental agrees to provide copies of quarterly financial statements
          and audited annual financial statements to the Liquidity Provider, and
          such other  information  as the Liquidity  Provider  shall  reasonably
          request with respect to the transactions contemplated by the Operative
          Agreements,  in each case,  only to the  extent  that  Continental  is
          obligated to provide such information pursuant to Section 8.2.1 of the
          Leases (related to Leased  Aircraft) or the  corresponding  section of
          the Indentures  (related to Owned Aircraft) to the parties thereto and
          (ii)  Continental  agrees to allow the  Liquidity  Provider to inspect
          Continental's  books and records regarding such  transactions,  and to
          discuss such  transactions with officers and employees of Continental;
          and

               (viii) Such other documents,  instruments, opinions and approvals
          pertaining  to the  transactions  contemplated  hereby or by the other
          Operative  Agreements as the Liquidity  Provider shall have reasonably
          requested.

          (b) The following  statement  shall be true on and as of the Effective
     Date:  no event has  occurred and is  continuing,  or would result from the



     entering  into  of this  Agreement  or the  making  of any  Advance,  which
     constitutes a Liquidity Event of Default.

          (c) The Liquidity  Provider shall have received payment in full of all
     fees  and  other  sums  required  to be paid to or for the  account  of the
     Liquidity Provider on or prior to the Effective Date.

          (d) All conditions precedent to the issuance of the Certificates under
     the Trust  Agreements  shall have been satisfied or waived,  all conditions
     precedent to the effectiveness of the other Liquidity Facilities shall have
     been satisfied or waived,  and all conditions  precedent to the purchase of
     the Certificates by the Underwriters under the Underwriting Agreement shall
     have been satisfied  (unless any of such  conditions  precedent  shall have
     been waived by the Underwriters).

          (e) The Borrower  shall have  received a  certificate,  dated the date
     hereof,  signed  by a  duly  authorized  representative  of  the  Liquidity
     Provider,  certifying that all conditions precedent to the effectiveness of
     Section 2.01 have been satisfied or waived.

          Section 4.02. CONDITIONS PRECEDENT TO BORROWING. The obligation of the
Liquidity Provider to make an Advance on the occasion of each Borrowing shall be
subject to the conditions  precedent that the Effective Date shall have occurred
and,  prior to the date of such  Borrowing,  the Borrower shall have delivered a
Notice of Borrowing which conforms to the terms and conditions of this Agreement
and has been  completed as may be required by the relevant form of the Notice of
Borrowing for the type of Advances requested.

                                    ARTICLE V

                                    COVENANTS

          Section 5.01.  AFFIRMATIVE  COVENANTS OF THE BORROWER.  So long as any
Advance  shall remain unpaid or the  Liquidity  Provider  shall have any Maximum
Commitment hereunder or the Borrower shall have any obligation to pay any amount
to the Liquidity  Provider  hereunder,  the Borrower will,  unless the Liquidity
Provider shall otherwise consent in writing:

          (a) PERFORMANCE OF THIS AND OTHER AGREEMENTS.  Punctually pay or cause
     to be paid all  amounts  payable by it under this  Agreement  and the other
     Operative  Agreements and observe and perform in all material  respects the
     conditions,  covenants and requirements  applicable to it contained in this
     Agreement and the other Operative Agreements.

          (b) REPORTING  REQUIREMENTS.  Furnish to the  Liquidity  Provider with
     reasonable promptness,  such other information and data with respect to the
     transactions  contemplated by the Operative Agreements as from time to time
     may be  reasonably  requested  by the  Liquidity  Provider;  and permit the
     Liquidity Provider, upon reasonable notice, to inspect the Borrower's books



     and records with respect to such transactions and to meet with officers and
     employees of the Borrower to discuss such transactions.

          (c) CERTAIN OPERATIVE  AGREEMENTS.  Furnish to the Liquidity  Provider
     with reasonable  promptness,  such Operative  Agreements entered into after
     the date  hereof as from time to time may be  reasonably  requested  by the
     Liquidity Provider.

          Section  5.02.  NEGATIVE  COVENANTS  OF THE  BORROWER.  So long as any
Advance  shall remain unpaid or the  Liquidity  Provider  shall have any Maximum
Commitment hereunder or the Borrower shall have any obligation to pay any amount
to the Liquidity Provider hereunder,  the Borrower will not appoint or permit or
suffer to be appointed any successor  Borrower without the prior written consent
of the Liquidity Provider,  which consent shall not be unreasonably  withheld or
delayed.

                                   ARTICLE VI

                           LIQUIDITY EVENTS OF DEFAULT

          Section 6.01.  LIQUIDITY EVENTS OF DEFAULT. If (a) any Liquidity Event
of Default has occurred  and is  continuing  and (b) there is a Performing  Note
Deficiency,  the  Liquidity  Provider  may,  in its  discretion,  deliver to the
Borrower a  Termination  Notice,  the effect of which  shall be to cause (i) the
obligation of the Liquidity Provider to make Advances hereunder to expire on the
fifth Business Day after the date on which such  Termination  Notice is received
by the  Borrower,  (ii) the  Borrower to  promptly  request,  and the  Liquidity
Provider to promptly  make, a Final Advance in accordance  with Section  2.02(d)
hereof  and  Section  3.6(i)  of the  Intercreditor  Agreement,  (iii) all other
outstanding  Advances to be  automatically  converted  into Final  Advances  for
purposes of  determining  the  Applicable  Liquidity  Rate for interest  payable
thereon,  and (iv)  subject  to  Sections  2.07 and 2.09  hereof,  all  Advances
(including,  without  limitation,  any  Provider  Advance and  Applied  Provider
Advance),  any  accrued  interest  thereon  and any  other  amounts  outstanding
hereunder to become immediately due and payable to the Liquidity Provider.

                                   ARTICLE VII

                                  MISCELLANEOUS

          Section 7.01. AMENDMENTS, ETC. No amendment or waiver of any provision
of this Agreement, nor consent to any departure by the Borrower therefrom, shall
in any event be effective  unless the same shall be in writing and signed by the
Liquidity  Provider,  and,  in the case of an  amendment  or of a waiver  by the
Borrower,  the Borrower, and then such waiver or consent shall be effective only
in the specific instance and for the specific purpose for which given.



          Section 7.02.  NOTICES,  ETC. Except as otherwise  expressly  provided
herein, all notices and other communications  provided for hereunder shall be in
writing (including telecopier and mailed or delivered or sent by telecopier):

          Borrower:

          Wilmington Trust Company
          Rodney Square North
          1100 North Market Square
          Wilmington, DE 19890-0001
          Attn: Corporate Trust Administration

          Telephone:  302-651-1000
          Telecopy:   302-651-8882

          Liquidity Provider:

          Morgan Stanley Capital Services, Inc.
          1585 Broadway
          New York, New York 10036
          Attn: Jonathan Schwartz

          Telephone:  212-761-2580
          Telecopy:   212-761-0580

or, as to each of the foregoing, at such other address as shall be designated by
such  Person  in  a  written  notice  to  the  others.   All  such  notices  and
communications  shall be effective (i) if given by telecopier,  when transmitted
to the telecopier  number specified above, (ii) if given by mail, when deposited
in the mails  addressed as specified  above,  and (iii) if given by other means,
when delivered at the address  specified  above,  except that written notices to
the Liquidity  Provider pursuant to the provisions of Articles II and III hereof
shall not be effective until received by the Liquidity  Provider.  A copy of all
notices  delivered  hereunder  to either party shall in addition be delivered to
each  of the  parties  to  the  Participation  Agreements  at  their  respective
addresses set forth therein.

          Section  7.03.  NO  WAIVER;  REMEDIES.  No  failure on the part of the
Liquidity Provider to exercise, and no delay in exercising, any right under this
Agreement  shall  operate as a waiver  thereof;  nor shall any single or partial
exercise  of any right  under  this  Agreement  preclude  any  other or  further
exercise  thereof  or the  exercise  of any other  right.  The  remedies  herein
provided are cumulative and not exclusive of any remedies provided by law.

          Section  7.04.  FURTHER  ASSURANCES.  The  Borrower  agrees to do such
further  acts and things and to execute  and deliver to the  Liquidity  Provider
such additional assignments, agreements, powers and instruments as the Liquidity
Provider  may  reasonably  require or deem  advisable  to carry into  effect the
purposes  of this  Agreement  and the other  Operative  Agreements  or to better



assure and confirm unto the Liquidity  Provider its rights,  powers and remedies
hereunder and under the other Operative Agreements.

          Section 7.05.  INDEMNIFICATION;  SURVIVAL OF CERTAIN  PROVISIONS.  The
Liquidity  Provider  shall be  indemnified  hereunder  to the  extent and in the
manner described in Section 8.1 of the Participation  Agreements with respect to
Owned Aircraft and Section 9.1 of the  Participation  Agreements with respect to
Leased Aircraft. In addition, the Borrower agrees to indemnify,  protect, defend
and hold harmless the Liquidity  Provider  from,  against and in respect of, and
shall pay on demand,  all Expenses of any kind or nature  whatsoever (other than
any Expenses of the nature  described in Section 3.01, 3.02 or 7.07 hereof or in
the Fee Letter applicable to this Agreement  (regardless of whether  indemnified
against pursuant to said Sections or in such Fee Letter)),  that may be imposed,
incurred by or asserted  against any Liquidity  Indemnitee,  in any way relating
to, resulting from, or arising out of or in connection with any action,  suit or
proceeding by any third party against such Liquidity  Indemnitee and relating to
this Agreement,  the Fee Letter applicable to this Agreement,  the Intercreditor
Agreement or any Financing Agreement; PROVIDED, HOWEVER, that the Borrower shall
not be required to  indemnify,  protect,  defend and hold harmless any Liquidity
Indemnitee in respect of any Expense of such Liquidity  Indemnitee to the extent
such Expense is (i) attributable to the gross  negligence or willful  misconduct
of such Liquidity  Indemnitee or any other Liquidity  Indemnitee,  (ii) ordinary
and usual operating  overhead expense,  or (iii)  attributable to the failure by
such  Liquidity  Indemnitee  or any other  Liquidity  Indemnitee  to  perform or
observe any  agreement,  covenant or  condition  on its part to be  performed or
observed  in  this  Agreement,  the  Intercreditor  Agreement,  the  Fee  Letter
applicable to this Agreement or any other  Operative  Agreement to which it is a
party.  The indemnities  contained in Section 8.1 or 9.1, as the case may be, of
the Participation  Agreements,  and the provisions of Sections 3.01, 3.02, 3.03,
3.09, 7.05 and 7.07 hereof, shall survive the termination of this Agreement.

          Section  7.06.  LIABILITY OF THE LIQUIDITY  PROVIDER.  (a) Neither the
Liquidity Provider nor any of its officers,  employees,  directors or affiliates
shall  be  liable  or  responsible  for:  (i) the use  which  may be made of the
Advances  or any  acts  or  omissions  of the  Borrower  or any  beneficiary  or
transferee  in  connection   therewith;   (ii)  the  validity,   sufficiency  or
genuineness of documents,  or of any endorsement thereon, even if such documents
should prove to be in any or all respects invalid,  insufficient,  fraudulent or
forged;  or (iii) the  making of  Advances  by the  Liquidity  Provider  against
delivery of a Notice of Borrowing and other  documents  which do not comply with
the terms  hereof;  PROVIDED,  HOWEVER,  that the  Borrower  shall  have a claim
against the Liquidity  Provider,  and the Liquidity  Provider shall be liable to
the Borrower,  to the extent of any damages  suffered by the Borrower which were
the result of (A) the Liquidity  Provider's  willful misconduct or negligence in
determining  whether documents presented hereunder comply with the terms hereof,
or (B)  any  breach  by the  Liquidity  Provider  of any of the  terms  of  this
Agreement,  including,  but not limited to, the Liquidity  Provider's failure to
make lawful  payment  hereunder  after the  delivery to it by the  Borrower of a
Notice of Borrowing strictly complying with the terms and conditions hereof.

          (b) Neither the Liquidity Provider nor any of its officers, employees,
directors or affiliates  shall be liable or  responsible  in any respect for (i)



any error, omission, interruption or delay in transmission, dispatch or delivery
of any message or advice, however transmitted, in connection with this Agreement
or any Notice of Borrowing delivered hereunder,  or (ii) any action, inaction or
omission which may be taken by it in good faith,  absent  willful  misconduct or
negligence  (in which  event the extent of the  Liquidity  Provider's  potential
liability  to the  Borrower  shall be  limited  as set forth in the  immediately
preceding  paragraph),  in  connection  with  this  Agreement  or any  Notice of
Borrowing.

          Section 7.07.  COSTS,  EXPENSES AND TAXES. The Borrower agrees to pay,
or cause to be paid (A) on the Effective Date and on such later date or dates on
which the Liquidity  Provider shall make demand,  all  reasonable  out-of-pocket
costs and expenses  (including,  without  limitation,  the  reasonable  fees and
expenses  of  outside  counsel  for the  Liquidity  Provider)  of the  Liquidity
Provider in connection with the preparation,  negotiation,  execution, delivery,
filing and recording of this Agreement,  any other  Operative  Agreement and any
other documents which may be delivered in connection with this Agreement and (B)
on demand, all reasonable costs and expenses (including  reasonable counsel fees
and expenses) of the Liquidity  Provider in connection  with (i) the enforcement
of this Agreement or any other  Operative  Agreement,  (ii) the  modification or
amendment of, or supplement to, this Agreement or any other Operative  Agreement
or such  other  documents  which may be  delivered  in  connection  herewith  or
therewith  (whether or not the same shall become  effective) or (iii) any action
or  proceeding  relating to any order,  injunction,  or other  process or decree
restraining or seeking to restrain the Liquidity Provider from paying any amount
under  this  Agreement,  the  Intercreditor  Agreement  or any  other  Operative
Agreement or otherwise  affecting the application of funds in the Class C-2 Cash
Collateral Accounts. In addition,  the Borrower shall pay any and all recording,
stamp and other  similar  taxes and fees payable or  determined to be payable in
connection with the execution, delivery, filing and recording of this Agreement,
any other Operative  Agreement and such other documents,  and agrees to save the
Liquidity  Provider  harmless  from and  against  any and all  liabilities  with
respect to or  resulting  from any delay in paying or omission to pay such taxes
or fees.

          Section 7.08. BINDING EFFECT; PARTICIPATIONS. (a) This Agreement shall
be binding  upon and inure to the  benefit  of the  Borrower  and the  Liquidity
Provider and their  respective  successors and assigns,  except that neither the
Liquidity  Provider  (except as  otherwise  provided in this  Section  7.08) nor
(except as  contemplated  by Section 3.08) the Borrower  shall have the right to
assign its rights or  obligations  hereunder or any interest  herein without the
prior written consent of the other party, subject to the requirements of Section
7.08(b). The Liquidity Provider may grant participations herein or in any of its
rights hereunder  (including,  without  limitation,  funded  participations  and
participations in rights to receive interest  payments  hereunder) and under the
other Operative  Agreements to such Persons as the Liquidity Provider may in its
sole discretion select,  subject to the requirements of Section 7.08(b). No such
participation  by the Liquidity  Provider,  however,  will relieve the Liquidity
Provider of its obligations  hereunder.  In connection with any participation or
any  proposed  participation,   the  Liquidity  Provider  may  disclose  to  the
participant or the proposed  participant  any  information  that the Borrower is
required to deliver or to disclose to the  Liquidity  Provider  pursuant to this
Agreement.  The Borrower  acknowledges and agrees that the Liquidity  Provider's
source  of  funds  may  derive  in  part  from  its  participants   (other  than
Continental).  Accordingly, references in this Agreement and the other Operative



Agreements  to  determinations,   reserve  and  capital  adequacy  requirements,
increased costs,  reduced receipts,  additional  amounts due pursuant to Section
3.03 and the like as they pertain to the Liquidity Provider shall be deemed also
to include those of each of its  participants  that are banks (subject,  in each
case, if any such participant is not a bank that is (i) organized under the laws
of the United  States or any State thereof and (ii) a member bank of the Federal
Reserve System with deposits exceeding $1,000,000,000 (such a bank, a "Reference
Bank"),  to the  maximum  amount that would have been  directly  incurred by any
Reference  Bank  organized  under  the laws of the  United  States  or any State
thereof  if such  Reference  Bank,  rather  than the  participant,  had held the
interest participated).

          (b) If, pursuant to subsection (a) above, the Liquidity Provider sells
any  participation  in this  Agreement  to any bank or  other  entity  (each,  a
"TRANSFEREE"),  then, concurrently with the effectiveness of such participation,
the Transferee shall (i) represent to the Liquidity Provider (for the benefit of
the  Liquidity  Provider and the  Borrower)  either (A) that it is  incorporated
under  the laws of the  United  States  or a state  thereof  or (B)  that  under
applicable  law and  treaties,  no taxes will be required  to be  withheld  with
respect  to any  payments  to be made  to such  Transferee  in  respect  of this
Agreement,  (ii) furnish to the Liquidity Provider and the Borrower either (x) a
statement that it is incorporated under the laws of the United States or a state
thereof or (y) if it is not so incorporated,  two copies of a properly completed
United States  Internal  Revenue Service Form 4224 or Form 1001, as appropriate,
or other  applicable  form,  certificate or document  prescribed by the Internal
Revenue Service  certifying,  in each case, such  Transferee's  entitlement to a
complete exemption from United States federal  withholding tax in respect to any
and all payments to be made  hereunder,  and (iii) agree (for the benefit of the
Liquidity  Provider and the Borrower) to provide the Liquidity  Provider and the
Borrower a new Form 4224 or Form 1001, as appropriate, (A) on or before the date
that any such form expires or becomes  obsolete or (B) after the  occurrence  of
any event requiring a change in the most recent form previously  delivered by it
and prior to the  immediately  following due date of any payment by the Borrower
hereunder,  certifying  in the  case  of a Form  1001  or Form  4224  that  such
Transferee  is  entitled to a complete  exemption  from  United  States  federal
withholding  tax on  payments  under this  Agreement.  Unless the  Borrower  has
received forms or other documents reasonably satisfactory to it (and required by
applicable  law)  indicating  that payments  hereunder are not subject to United
States federal  withholding tax, the Borrower will withhold taxes as required by
law from such payments at the applicable statutory rate.

          (c)  Notwithstanding  the other  provisions of this Section 7.08,  the
Liquidity  Provider  may assign and  pledge all or any  portion of the  Advances
owing  to it to any  Federal  Reserve  Bank or the  United  States  Treasury  as
collateral  security  pursuant to  Regulation A of the Board of Governors of the
Federal Reserve System and any Operating Circular issued by such Federal Reserve
Bank, provided that any payment in respect of such assigned Advances made by the
Borrower  to the  Liquidity  Provider  in  accordance  with  the  terms  of this
Agreement shall satisfy the Borrower's  obligations hereunder in respect of such
assigned Advance to the extent of such payment. No such assignment shall release
the Liquidity Provider from its obligations hereunder.



          Section 7.09.  SEVERABILITY.  Any provision of this Agreement which is
prohibited,  unenforceable  or not authorized in any  jurisdiction  shall, as to
such   jurisdiction,   be  ineffective  to  the  extent  of  such   prohibition,
unenforceability  or   non-authorization   without  invalidating  the  remaining
provisions hereof or affecting the validity,  enforceability or legality of such
provision in any other jurisdiction.

          Section 7.10.  GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

          Section 7.11. SUBMISSION TO JURISDICTION; WAIVER OF JURY TRIAL; WAIVER
OF  IMMUNITY.   (a)  Each  of  the  parties   hereto  hereby   irrevocably   and
unconditionally:

          (i)  submits  for  itself  and its  property  in any  legal  action or
     proceeding relating to this Agreement or any other Operative Agreement,  or
     for  recognition  and  enforcement  of any  judgment  in respect  hereof or
     thereof,  to the  nonexclusive  general  jurisdiction  of the courts of the
     State of New York,  the  courts of the  United  States of  America  for the
     Southern District of New York, and the appellate courts from any thereof;

          (ii)  consents  that any such action or  proceeding  may be brought in
     such courts,  and waives any objection that it may now or hereafter have to
     the venue of any such action or  proceeding  in any such court or that such
     action or proceeding was brought in an inconvenient court and agrees not to
     plead or claim the same;

          (iii) agrees that service of process in any such action or  proceeding
     may be effected by mailing a copy thereof by registered  or certified  mail
     (or any  substantially  similar form and mail),  postage  prepaid,  to each
     party hereto at its address set forth in Section  7.02  hereof,  or at such
     other  address of which the  Liquidity  Provider  shall have been  notified
     pursuant thereto; and

          (iv)  agrees  that  nothing  herein  shall  affect the right to effect
     service of process in any other manner  permitted by law or shall limit the
     right to sue in any other jurisdiction.

          (b) THE BORROWER AND THE LIQUIDITY PROVIDER EACH HEREBY AGREE TO WAIVE
THEIR  RESPECTIVE  RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION  BASED
UPON OR ARISING OUT OF THIS  AGREEMENT OR ANY DEALINGS  BETWEEN THEM RELATING TO
THE  SUBJECT  MATTER  OF THIS  AGREEMENT  AND  THE  RELATIONSHIP  THAT IS  BEING
ESTABLISHED, including, without limitation, contract claims, tort claims, breach
of duty claims and all other common law and statutory  claims.  The Borrower and
the  Liquidity  Provider  each warrant and  represent  that it has reviewed this
waiver with its legal counsel,  and that it knowingly and voluntarily waives its
jury trial rights following consultation with such legal counsel. THIS WAIVER IS
IRREVOCABLE, AND CANNOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND THIS WAIVER



SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS
TO THIS AGREEMENT.

          (c) The Liquidity Provider hereby waives any immunity it may have from
the  jurisdiction  of the courts of the United States or of any State and waives
any immunity any of its  properties  located in the United  States may have from
attachment  or  execution  upon a judgment  entered by any such court  under the
United States Foreign Sovereign  Immunities Act of 1976 or any similar successor
legislation.

          Section  7.12.  EXECUTION  IN  COUNTERPARTS.  This  Agreement  may  be
executed  in any  number of  counterparts  and by  different  parties  hereto on
separate  counterparts,  each  of  which  counterparts,  when  so  executed  and
delivered,  shall be deemed  to be an  original  and all of which  counterparts,
taken together, shall constitute but one and the same Agreement.

          Section 7.13. ENTIRETY.  This Agreement,  the Intercreditor  Agreement
and the other  Operative  Agreements to which the Liquidity  Provider is a party
constitute  the entire  agreement  of the  parties  hereto  with  respect to the
subject matter hereof and supersedes all prior  understandings and agreements of
such parties.

          Section  7.14.  HEADINGS.  Section  headings  in  this  Agreement  are
included  herein for  convenience  of reference  only and shall not constitute a
part of this Agreement for any other purpose.

          Section 7.15. TRANSFER. The Liquidity Provider hereby acknowledges and
consents  to  the  Transfer   contemplated  by  the  Assignment  and  Assumption
Agreement.

          Section 7.16. LIQUIDITY PROVIDER'S OBLIGATION TO MAKE ADVANCES. EXCEPT
AS EXPRESSLY  SET FORTH IN THIS  AGREEMENT,  THE  OBLIGATIONS  OF THE  LIQUIDITY
PROVIDER  TO MAKE  ADVANCES  HEREUNDER,  AND THE  BORROWER'S  RIGHTS TO  DELIVER
NOTICES OF  BORROWING  REQUESTING  THE MAKING OF  ADVANCES  HEREUNDER,  SHALL BE
UNCONDITIONAL  AND  IRREVOCABLE,  AND SHALL BE PAID OR  PERFORMED,  IN EACH CASE
STRICTLY IN ACCORDANCE WITH THE TERMS OF THIS AGREEMENT.



          IN WITNESS WHEREOF,  the parties have caused this Agreement to be duly
executed and delivered by their respective officers thereunto duly authorized as
of the date first set forth above.


                            WILMINGTON TRUST COMPANY,
                              not in its individual capacity but solely as
                              Subordination Agent, as agent and trustee for the
                              Class C-2 Trust, as Borrower


                            By:_________________________________
                               Name:
                               Title:


                               MORGAN STANLEY CAPITAL SERVICES, INC.,
                                 as Liquidity Provider


                            By:_________________________________
                               Name:
                               Title:



                                                                      Annex I to
                                                      Revolving Credit Agreement


                      INTEREST ADVANCE NOTICE OF BORROWING

          The  undersigned,  a duly  authorized  signatory  of  the  undersigned
borrower (the "BORROWER"),  hereby certifies to Morgan Stanley Capital Services,
Inc.  (the  "LIQUIDITY  PROVIDER"),  with  reference  to  the  Revolving  Credit
Agreement (1998-3C-2) dated as of November 3, 1998, between the Borrower and the
Liquidity Provider (the "LIQUIDITY AGREEMENT"; the terms defined therein and not
otherwise  defined herein being used herein as therein  defined or  referenced),
that:

          (1) The Borrower is the  Subordination  Agent under the  Intercreditor
     Agreement.

          (2) The Borrower is delivering this Notice of Borrowing for the making
     of an Interest  Advance by the  Liquidity  Provider to be used,  subject to
     clause  (3)(v)  below,  for  the  payment  of  interest  on the  Class  C-2
     Certificates  which was payable on  ____________,  ____ (the  "DISTRIBUTION
     DATE") in accordance  with the terms and  provisions of the Class C-2 Trust
     Agreement and the Class C-2 Certificates,  which Advance is requested to be
     made on ____________, ____.

          (3)  The  amount  of the  Interest  Advance  requested  hereby  (i) is
     $_______________.__,  to be  applied  in  respect  of  the  payment  of the
     interest  which was due and  payable on the Class C-2  Certificates  on the
     Distribution  Date,  (ii) does not include  any amount with  respect to the
     payment of  principal  of, or premium  on, the Class C-2  Certificates,  or
     principal  of, or interest or premium on, the Class A-1  Certificates,  the
     Class  A-2  Certificates,  the  Class  B  Certificates  or  the  Class  C-1
     Certificates,  (iii) was computed in accordance  with the provisions of the
     Class C-2 Certificates, the Class C-2 Trust Agreement and the Intercreditor
     Agreement (a copy of which  computation is attached  hereto as Schedule I),
     (iv) does not exceed the Maximum  Available  Commitment on the date hereof,
     (v) does not include  any amount of  interest  which was due and payable on
     the Class C-2  Certificates  on such  Distribution  Date but which  remains
     unpaid due to the  failure of the  Depositary  to pay any amount of accrued
     interest on the  Deposits on such  Distribution  Date and (vi) has not been
     and is not the subject of a prior or contemporaneous Notice of Borrowing.

          (4)  Upon  receipt  by or on  behalf  of the  Borrower  of the  amount
     requested  hereby,  (a) the Borrower will apply the same in accordance with
     the terms of Section 3.6(b) of the Intercreditor  Agreement, (b) no portion
     of such amount shall be applied by the  Borrower for any other  purpose and
     (c) no portion of such amount  until so applied  shall be  commingled  with
     other funds held by the Borrower.

          The  Borrower  hereby  acknowledges  that,  pursuant to the  Liquidity
Agreement,  the making of the  Interest  Advance as  requested by this Notice of



Borrowing shall  automatically  reduce,  subject to  reinstatement in accordance
with the terms of the Liquidity  Agreement,  the Maximum Available Commitment by
an amount  equal to the  amount of the  Interest  Advance  requested  to be made
hereby as set forth in clause (i) of paragraph (3) of this  Certificate and such
reduction shall automatically result in corresponding  reductions in the amounts
available to be borrowed pursuant to a subsequent Advance.

          IN WITNESS  WHEREOF,  the Borrower has  executed  and  delivered  this
Notice of Borrowing as of the ____ day of _________, ____.


                            WILMINGTON TRUST COMPANY,
                              not in its individual capacity but solely as
                              Subordination Agent, as Borrower


                            By:_________________________________
                               Name:
                               Title:



               SCHEDULE I TO INTEREST ADVANCE NOTICE OF BORROWING

                   [Insert Copy of Computations in accordance
                   with Interest Advance Notice of Borrowing]



                                                                     Annex II to
                                                      Revolving Credit Agreement


                   NON-EXTENSION ADVANCE NOTICE OF BORROWING

          The  undersigned,  a duly  authorized  signatory  of  the  undersigned
subordination agent (the "BORROWER"), hereby certifies to Morgan Stanley Capital
Services,  Inc.  (the  "LIQUIDITY  PROVIDER"),  with  reference to the Revolving
Credit Agreement  (1998-3C-2) dated as of November 3, 1998, between the Borrower
and the Liquidity Provider (the "LIQUIDITY AGREEMENT"; the terms defined therein
and not  otherwise  defined  herein  being  used  herein as  therein  defined or
referenced), that:

          (1) The Borrower is the  Subordination  Agent under the  Intercreditor
     Agreement.

          (2) The Borrower is delivering this Notice of Borrowing for the making
     of the Non-Extension  Advance by the Liquidity  Provider to be used for the
     funding of the Class C-2 Cash Collateral Account in accordance with Section
     3.6(d) of the  Intercreditor  Agreement,  which  Advance is requested to be
     made on __________, ____.

          (3) The amount of the  Non-Extension  Advance  requested hereby (i) is
     $_______________.__,  which equals the Maximum Available  Commitment on the
     date hereof and is to be applied in respect of the funding of the Class C-2
     Cash   Collateral   Account  in  accordance  with  Section  3.6(d)  of  the
     Intercreditor  Agreement,  (ii) does not include any amount with respect to
     the payment of the principal of, or premium on, the Class C-2 Certificates,
     or principal of, or interest or premium on, the Class A-1 Certificates, the
     Class  A-2  Certificates,  the  Class  B  Certificates  or  the  Class  C-1
     Certificates,  (iii) was computed in accordance  with the provisions of the
     Class C-2 Certificates, the Class C-2 Trust Agreement and the Intercreditor
     Agreement (a copy of which  computation is attached  hereto as Schedule I),
     and (iv) has not been and is not the subject of a prior or  contemporaneous
     Notice of Borrowing under the Liquidity Agreement.

          (4)  Upon  receipt  by or on  behalf  of the  Borrower  of the  amount
     requested  hereby,  (a) the Borrower  will deposit such amount in the Class
     C-2 Cash Collateral Account and apply the same in accordance with the terms
     of Section 3.6(d) of the  Intercreditor  Agreement,  (b) no portion of such
     amount shall be applied by the  Borrower  for any other  purpose and (c) no
     portion of such  amount  until so applied  shall be  commingled  with other
     funds held by the Borrower.

          (5) The Borrower hereby requests that the Advance  requested hereby be
     a Base Rate  Advance and that such Base Rate  Advance be  converted  into a
     LIBOR  Advance on the third  Business  Day  following  your receipt of this
     notice.



          The  Borrower  hereby  acknowledges  that,  pursuant to the  Liquidity
Agreement,  (A) the making of the  Non-Extension  Advance as  requested  by this
Notice of Borrowing shall automatically and irrevocably terminate the obligation
of  the  Liquidity  Provider  to  make  further  Advances  under  the  Liquidity
Agreement;  and (B)  following  the  making  by the  Liquidity  Provider  of the
Non-Extension Advance requested by this Notice of Borrowing,  the Borrower shall
not be entitled to request any further Advances under the Liquidity Agreement.

          IN WITNESS  WHEREOF,  the Borrower has  executed  and  delivered  this
Notice of Borrowing as of the ____ day of ---------, ----.


                            WILMINGTON TRUST COMPANY,
                              not in its individual capacity but solely as
                              Subordination Agent, as Borrower


                            By:_________________________________
                               Name:
                               Title:



            SCHEDULE I TO NON-EXTENSION ADVANCE NOTICE OF BORROWING

                   [Insert Copy of computations in accordance
                with Non-Extension Advance Notice of Borrowing]



                                                                    Annex III to
                                                      Revolving Credit Agreement


                     DOWNGRADE ADVANCE NOTICE OF BORROWING

          The  undersigned,  a duly  authorized  signatory  of  the  undersigned
subordination agent (the "BORROWER"), hereby certifies to Morgan Stanley Capital
Services,  Inc.  (the  "LIQUIDITY  PROVIDER"),  with  reference to the Revolving
Credit Agreement  (1998-3C-2) dated as of November 3, 1998, between the Borrower
and the Liquidity Provider (the "LIQUIDITY AGREEMENT"; the terms defined therein
and not  otherwise  defined  herein  being  used  herein as  therein  defined or
referenced), that:

          (1) The Borrower is the  Subordination  Agent under the  Intercreditor
     Agreement.

          (2) The Borrower is delivering this Notice of Borrowing for the making
     of the  Downgrade  Advance  by the  Liquidity  Provider  to be used for the
     funding of the Class C-2 Cash Collateral Account in accordance with Section
     3.6(c) of the  Intercreditor  Agreement (i) by reason of the downgrading of
     the  short-term  unsecured  debt rating of the  Guarantor  issued by either
     Rating  Agency below the  Threshold  Rating or (ii)  because the  Guarantee
     Agreement  has ceased to be in full force and effect or has become  invalid
     or  unenforceable  or the Guarantor  has denied its  liability  thereunder,
     which Advance is requested to be made on __________, ____.

          (3) The  amount  of the  Downgrade  Advance  requested  hereby  (i) is
     $_______________.__,  which equals the Maximum Available  Commitment on the
     date hereof and is to be applied in respect of the funding of the Class C-2
     Cash   Collateral   Account  in  accordance  with  Section  3.6(c)  of  the
     Intercreditor  Agreement,  (ii) does not include any amount with respect to
     the payment of the principal of, or premium on, the Class C-2 Certificates,
     or principal of, or interest or premium on, the Class A-1 Certificates, the
     A-2  Certificates,  the Class B Certificates or the Class C-1 Certificates,
     (iii) was  computed  in  accordance  with the  provisions  of the Class C-2
     Certificates, the Class C-2 Trust Agreement and the Intercreditor Agreement
     (a copy of which  computation  is attached  hereto as Schedule I), and (iv)
     has not been and is not the subject of a prior or contemporaneous Notice of
     Borrowing under the Liquidity Agreement.

          (4)  Upon  receipt  by or on  behalf  of the  Borrower  of the  amount
     requested  hereby,  (a) the Borrower  will deposit such amount in the Class
     C-2 Cash Collateral Account and apply the same in accordance with the terms
     of Section 3.6(c) of the  Intercreditor  Agreement,  (b) no portion of such
     amount shall be applied by the  Borrower  for any other  purpose and (c) no
     portion of such  amount  until so applied  shall be  commingled  with other
     funds held by the Borrower.

          The  Borrower  hereby  acknowledges  that,  pursuant to the  Liquidity
Agreement,  (A) the making of the Downgrade  Advance as requested by this Notice



of Borrowing shall automatically and irrevocably terminate the obligation of the
Liquidity Provider to make further Advances under the Liquidity  Agreement;  and
(B)  following the making by the  Liquidity  Provider of the  Downgrade  Advance
requested by this Notice of  Borrowing,  the  Borrower  shall not be entitled to
request any further Advances under the Liquidity Agreement.

          IN WITNESS  WHEREOF,  the Borrower has  executed  and  delivered  this
Notice of Borrowing as of the ____ day of _________, ____.


                            WILMINGTON TRUST COMPANY,
                              not in its individual capacity but solely as
                              Subordination Agent, as Borrower


                            By:_________________________________
                               Name:
                               Title:



              SCHEDULE I TO DOWNGRADE ADVANCE NOTICE OF BORROWING

                   [Insert Copy of computations in accordance
                  with Downgrade Advance Notice of Borrowing]



                                                                     Annex IV to
                                                      Revolving Credit Agreement


                       FINAL ADVANCE NOTICE OF BORROWING

          The  undersigned,  a duly  authorized  signatory  of  the  undersigned
borrower (the "BORROWER"),  hereby certifies to Morgan Stanley Capital Services,
Inc.  (the  "LIQUIDITY  PROVIDER"),  with  reference  to  the  Revolving  Credit
Agreement (1998-3C-2) dated as of November 3, 1998, between the Borrower and the
Liquidity Provider (the "LIQUIDITY AGREEMENT"; the terms defined therein and not
otherwise  defined herein being used herein as therein  defined or  referenced),
that:

          (1) The Borrower is the  Subordination  Agent under the  Intercreditor
     Agreement.

          (2) The Borrower is delivering this Notice of Borrowing for the making
     of the Final Advance by the  Liquidity  Provider to be used for the funding
     of the Class C-2 Cash Collateral  Account in accordance with Section 3.6(i)
     of the Intercreditor  Agreement by reason of the receipt by the Borrower of
     a  Termination  Notice  from the  Liquidity  Provider  with  respect to the
     Liquidity Agreement, which Advance is requested to be made on ____________,
     ____.

          (3)  The  amount  of  the  Final  Advance   requested  hereby  (i)  is
     $_________________.__, which equals the Maximum Available Commitment on the
     date hereof and is to be applied in respect of the funding of the Class C-2
     Cash   Collateral   Account  in  accordance  with  Section  3.6(i)  of  the
     Intercreditor  Agreement,  (ii) does not include any amount with respect to
     the payment of principal of, or premium on, the Class C-2 Certificates,  or
     principal  of, or interest or premium on, the Class A-1  Certificates,  the
     Class  A-2  Certificates,  the  Class  B  Certificates  or  the  Class  C-1
     Certificates,  (iii) was computed in accordance  with the provisions of the
     Class C-2 Certificates, the Class C-2 Trust Agreement and the Intercreditor
     Agreement (a copy of which  computation is attached  hereto as Schedule I),
     and (iv) has not been and is not the subject of a prior or  contemporaneous
     Notice of Borrowing.

          (4)  Upon  receipt  by or on  behalf  of the  Borrower  of the  amount
     requested  hereby,  (a) the Borrower  will deposit such amount in the Class
     C-2 Cash Collateral Account and apply the same in accordance with the terms
     of Section 3.6(i) of the  Intercreditor  Agreement,  (b) no portion of such
     amount shall be applied by the  Borrower  for any other  purpose and (c) no
     portion of such  amount  until so applied  shall be  commingled  with other
     funds held by the Borrower.



          (5) The Borrower hereby requests that the Advance  requested hereby be
     a Base Rate Advance  [and that such Base Rate  Advance be converted  into a
     LIBOR  Advance on the third  Business  Day  following  your receipt of this
     notice.]

          The  Borrower  hereby  acknowledges  that,  pursuant to the  Liquidity
Agreement,  (A) the making of the Final  Advance as  requested by this Notice of
Borrowing shall  automatically  and irrevocably  terminate the obligation of the
Liquidity Provider to make further Advances under the Liquidity  Agreement;  and
(B)  following  the  making  by the  Liquidity  Provider  of the  Final  Advance
requested by this Notice of  Borrowing,  the  Borrower  shall not be entitled to
request any further Advances under the Liquidity Agreement.

          IN WITNESS  WHEREOF,  the Borrower has  executed  and  delivered  this
Notice of Borrowing as of the ____ day of _________, ____.


                            WILMINGTON TRUST COMPANY,
                              not in its individual capacity but solely
                              as Subordination Agent, as Borrower


                            By:_________________________________
                               Name:
                               Title:

- ----------

Bracketed language may be included at Borrower's option.




                SCHEDULE I TO FINAL ADVANCE NOTICE OF BORROWING

                   [Insert Copy of Computations in accordance
                    with Final Advance Notice of Borrowing]



                                                                      Annex V to
                                                      Revolving Credit Agreement


                             NOTICE OF TERMINATION



                                                       [Date]


Wilmington Trust Company,
  as Subordination Agent, as Borrower
Rodney Square North
1100 North Market Square
Wilmington, DE 19890-0001

Attention:  Corporate Trust Administration

     Revolving Credit Agreement dated as of November 3, 1998, between Wilmington
     Trust  Company,  as  Subordination  Agent,  as agent  and  trustee  for the
     Continental Airlines Pass Through Trust  1998-3C-2-[O/S],  as Borrower, and
     Morgan Stanley Capital Services, Inc. (the "LIQUIDITY AGREEMENT")


Ladies and Gentlemen:


          You are hereby notified that pursuant to Section 6.01 of the Liquidity
Agreement,  by reason of the occurrence of a Liquidity  Event of Default and the
existence of a Performing  Note  Deficiency  (each as defined  therein),  we are
giving this notice to you in order to cause (i) our obligations to make Advances
(as defined  therein) under such  Liquidity  Agreement to terminate on the fifth
Business  Day after the date on which you  receive  this  notice and (ii) you to
request a Final Advance under the Liquidity Agreement pursuant to Section 3.6(i)
of the  Intercreditor  Agreement  (as defined in the  Liquidity  Agreement) as a
consequence of your receipt of this notice.



          THIS  NOTICE IS THE  "NOTICE OF  TERMINATION"  PROVIDED  FOR UNDER THE
LIQUIDITY  AGREEMENT.  OUR  OBLIGATIONS  TO MAKE  ADVANCES  UNDER THE  LIQUIDITY
AGREEMENT  WILL  TERMINATE ON THE FIFTH BUSINESS DAY AFTER THE DATE ON WHICH YOU
RECEIVE THIS NOTICE.


                             Very truly yours,


                             MORGAN STANLEY
                               CAPITAL SERVICES, INC.,
                               as Liquidity Provider


                            By:___________________________
                               Name:
                               Title:

cc:    Wilmington Trust Company,
       as Class C-2 Trustee



                                                                     Annex VI to
                                                      Revolving Credit Agreement


                   NOTICE OF REPLACEMENT SUBORDINATION AGENT

[Date]
Attention:

     Revolving Credit Agreement dated as of November 3, 1998, between Wilmington
     Trust  Company,  as  Subordination  Agent,  as agent  and  trustee  for the
     Continental Airlines Pass Through Trust  1998-3C-2-[O/S],  as Borrower, and
     Morgan Stanley Capital Services, Inc. (the "LIQUIDITY AGREEMENT")


Ladies and Gentlemen:


          For value received,  the undersigned  beneficiary  hereby  irrevocably
transfers to:


                         ------------------------------
                              [Name of Transferee]


                         ------------------------------
                             [Address of Transferee]

all rights and  obligations  of the  undersigned as Borrower under the Liquidity
Agreement  referred to above.  The transferee  has succeeded the  undersigned as
Subordination  Agent under the Intercreditor  Agreement referred to in the first
paragraph of the  Liquidity  Agreement,  pursuant to the terms of Section 8.1 of
the Intercreditor Agreement.

          By this transfer,  all rights of the undersigned as Borrower under the
Liquidity  Agreement are transferred to the transferee and the transferee  shall
hereafter  have the sole  rights and  obligations  as Borrower  thereunder.  The
undersigned  shall pay any costs and expenses of such transfer,  including,  but
not limited to, transfer taxes or governmental charges.



          We ask that this transfer be effective as of _______________, ____.


                            WILMINGTON TRUST COMPANY,
                              not in its individual capacity but solely as
                              Subordination Agent, as Borrower


                            By:_________________________________
                               Name:
                               Title:


MORGAN STANLEY DEAN WITTER


                                                        1585 BROADWAY
                                                        NEW YORK, NEW YORK 10036
                                                        (212) 761-4000


                                                        November 3, 1998


Wilmington Trust Company,
  not in its individual capacity
  but as Subordination Agent
  for the Continental Airlines Pass Through Trust 1998-3B
  (the "Counterparty")



Ladies and Gentlemen:

     In  consideration  of  the  Revolving  Credit  Agreement  (hereinafter  the
"Agreement")  dated as of  November  3,  1998  between  Morgan  Stanley  Capital
Services Inc., a Delaware  corporation  (hereinafter  "MSCS") and  Counterparty,
Morgan Stanley Dean Witter & Co., a Delaware corporation  (hereinafter  "MSDW"),
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 express  terms of the  Agreement.  Upon
failure of MSCS punctually to pay any such amounts,  MSDW agrees to pay or cause
to be paid such  amounts;  provided  that delay by  Counterparty  in giving such
demand shall in no event affect MSDW's  obligations under this Guarantee.  It is
understood  and agreed that the  obligations of MSCS under the Agreement to make
Advances  (as defined in the  Agreement)  are,  and shall in any event,  for all
purposes of this  Guarantee,  be deemed to constitute,  amounts  payable by MSCS
under the Agreement.

     MSDW hereby agrees that its obligations  hereunder  shall be  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;  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.  MSDW hereby waives
diligence,  presentment, demand on MSDW or MSCS for payment or otherwise, filing
of claims, requirement of a prior proceeding against MSCS and protest or notice,
except as provided for in the Agreement with respect to amounts payable by MSCS.





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 MSDW or otherwise,  MSDW's obligations  hereunder with
respect to such payment  shall be  reinstated  upon such  restoration  or return
being made by Counterparty.

     MSDW represents to Counterparty as of the date hereof:

     (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 applicable  bankruptcy,  insolvency,  reorganization or other similar
laws  affecting  the  enforcement  of  creditors'  rights or by  general  equity
principles.

     By accepting this  Guarantee and entering into the Agreement,  Counterparty
agrees that MSDW shall be subrogated to all rights of Counterparty  against MSCS
in respect of any amounts paid by MSDW pursuant to this Guarantee, provided that
MSDW 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.







     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.

                                         MORGAN STANLEY DEAN WITTER & CO.



                                         By: _______________________________
                                             Name:
                                             Title:
                                             Address:   1585 Broadway
                                                        3rd Floor
                                                        New York, NY 10036
                                             Attention: Swap Group
                                             Fax No.:   (212) 761-0580



MORGAN STANLEY DEAN WITTER


                                                        1585 BROADWAY
                                                        NEW YORK, NEW YORK 10036
                                                        (212) 761-4000


                                                        November 3, 1998


Wilmington Trust Company,
   not in its individual capacity
   but as Subordination Agent
   for the Continental Airlines Pass Through Trust 1998-3C-1
   (the "Counterparty")



Ladies and Gentlemen:

     In  consideration  of  the  Revolving  Credit  Agreement  (hereinafter  the
"Agreement")  dated as of  November  3,  1998  between  Morgan  Stanley  Capital
Services Inc., a Delaware  corporation  (hereinafter  "MSCS") and  Counterparty,
Morgan Stanley Dean Witter & Co., a Delaware corporation  (hereinafter  "MSDW"),
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 express  terms of the  Agreement.  Upon
failure of MSCS punctually to pay any such amounts,  MSDW agrees to pay or cause
to be paid such  amounts;  provided  that delay by  Counterparty  in giving such
demand shall in no event affect MSDW's  obligations under this Guarantee.  It is
understood  and agreed that the  obligations of MSCS under the Agreement to make
Advances  (as defined in the  Agreement)  are,  and shall in any event,  for all
purposes of this  Guarantee,  be deemed to constitute,  amounts  payable by MSCS
under the Agreement.

     MSDW hereby agrees that its obligations  hereunder  shall be  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;  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.  MSDW hereby waives
diligence,  presentment, demand on MSDW or MSCS for payment or otherwise, filing
of claims, requirement of a prior proceeding against MSCS and protest or notice,
except as provided for in the Agreement with respect to amounts payable by MSCS.




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 MSDW or otherwise,  MSDW's obligations  hereunder with
respect to such payment  shall be  reinstated  upon such  restoration  or return
being made by Counterparty.

     MSDW represents to Counterparty as of the date hereof:

     (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 applicable  bankruptcy,  insolvency,  reorganization or other similar
laws  affecting  the  enforcement  of  creditors'  rights or by  general  equity
principles.

     By accepting this  Guarantee and entering into the Agreement,  Counterparty
agrees that MSDW shall be subrogated to all rights of Counterparty  against MSCS
in respect of any amounts paid by MSDW pursuant to this Guarantee, provided that
MSDW 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.






     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.

                                         MORGAN STANLEY DEAN WITTER & CO.



                                         By: _______________________________
                                             Name:
                                             Title:
                                             Address:   1585 Broadway
                                                        3rd Floor
                                                        New York, NY 10036
                                             Attention: Swap Group
                                             Fax No.:   (212) 761-0580



MORGAN STANLEY DEAN WITTER


                                                        1585 BROADWAY
                                                        NEW YORK, NEW YORK 10036
                                                        (212) 761-4000


                                                        November 3, 1998


Wilmington Trust Company,
  not in its individual capacity
  but as Subordination Agent
  for the Continental Airlines Pass Through Trust 1998-3C-2
  (the "Counterparty")



Ladies and Gentlemen:

     In  consideration  of  the  Revolving  Credit  Agreement  (hereinafter  the
"Agreement")  dated as of  November  3,  1998  between  Morgan  Stanley  Capital
Services Inc., a Delaware  corporation  (hereinafter  "MSCS") and  Counterparty,
Morgan Stanley Dean Witter & Co., a Delaware corporation  (hereinafter  "MSDW"),
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 express  terms of the  Agreement.  Upon
failure of MSCS punctually to pay any such amounts,  MSDW agrees to pay or cause
to be paid such  amounts;  provided  that delay by  Counterparty  in giving such
demand shall in no event affect MSDW's  obligations under this Guarantee.  It is
understood  and agreed that the  obligations of MSCS under the Agreement to make
Advances  (as defined in the  Agreement)  are,  and shall in any event,  for all
purposes of this  Guarantee,  be deemed to constitute,  amounts  payable by MSCS
under the Agreement.

     MSDW hereby agrees that its obligations  hereunder  shall be  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;  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.  MSDW hereby waives
diligence,  presentment, demand on MSDW or MSCS for payment or otherwise, filing
of claims, requirement of a prior proceeding against MSCS and protest or notice,
except as provided for in the Agreement with respect to amounts payable by MSCS.



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 MSDW or otherwise,  MSDW's obligations  hereunder with
respect to such payment  shall be  reinstated  upon such  restoration  or return
being made by Counterparty.

     MSDW represents to Counterparty as of the date hereof:

     (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 applicable  bankruptcy,  insolvency,  reorganization or other similar
laws  affecting  the  enforcement  of  creditors'  rights or by  general  equity
principles.

     By accepting this  Guarantee and entering into the Agreement,  Counterparty
agrees that MSDW shall be subrogated to all rights of Counterparty  against MSCS
in respect of any amounts paid by MSDW pursuant to this Guarantee, provided that
MSDW 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.







     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.

                                         MORGAN STANLEY DEAN WITTER & CO.



                                         By: _______________________________
                                             Name:
                                             Title:
                                             Address:   1585 Broadway
                                                        3rd Floor
                                                        New York, NY 10036
                                             Attention: Swap Group
                                             Fax No.:   (212) 761-0580



                        TRUST SUPPLEMENT No. 1998-3A-1-O

                             Dated November 3, 1998


                                     between

                            WILMINGTON TRUST COMPANY
                                   as Trustee,


                                       and


                           CONTINENTAL AIRLINES, INC.

                                       to

                          PASS THROUGH TRUST AGREEMENT
                         Dated as of September 25, 1997


                                   $96,000,000

               Continental Airlines Pass Through Trust 1998-3A-1-O
                           6.82% Continental Airlines
                           Pass Through Certificates,
                               Series 1998-3A-1-O



            This Trust Supplement No. 1998-3A-1-O,  dated as of November 3, 1998
(herein called the "TRUST SUPPLEMENT"),  between Continental  Airlines,  Inc., a
Delaware  corporation  (the  "COMPANY"),   and  Wilmington  Trust  Company  (the
"TRUSTEE"), to the Pass Through Trust Agreement, dated as of September 25, 1997,
between the Company and the Trustee (the "BASIC AGREEMENT").

                             W I T N E S S E T H:

            WHEREAS,  the  Basic  Agreement,   unlimited  as  to  the  aggregate
principal amount of Certificates (unless otherwise specified herein, capitalized
terms used herein without definition having the respective meanings specified in
the Basic  Agreement)  which  may be  issued  thereunder,  has  heretofore  been
executed and delivered;

            WHEREAS, the Company has obtained commitments from Boeing for the
delivery of certain Aircraft;

            WHEREAS, the Company intends to finance the acquisition of each such
Aircraft either (i) through separate leveraged lease transactions, in which case
the Company will lease such Aircraft (collectively,  the "LEASED AIRCRAFT"),  or
(ii) through separate secured loan transactions,  in which case the Company will
own such Aircraft (collectively, the "OWNED AIRCRAFT");

            WHEREAS,  in the case of each Leased  Aircraft,  each Owner Trustee,
acting on behalf of the corresponding Owner Participant,  will issue pursuant to
an Indenture,  on a non-recourse  basis,  Equipment  Notes in order to finance a
portion of its purchase price of such Leased Aircraft;

            WHEREAS, in the case of each Owned Aircraft,  the Company will issue
pursuant to an  Indenture,  on a recourse  basis,  Equipment  Notes to finance a
portion of the purchase price of such Owned Aircraft;

            WHEREAS,   the  Trustee   hereby   declares  the  creation  of  this
Continental Airlines Pass Through Trust 1998-3A-1-O (the "APPLICABLE TRUST") for
the benefit of the  Applicable  Certificateholders,  and the initial  Applicable
Certificateholders  as the grantors of the Applicable Trust, by their respective
acceptances  of  the  Applicable  Certificates,  join  in  the  creation  of the
Applicable Trust with the Trustee;

            WHEREAS,  all Certificates to be issued by the Applicable Trust will
evidence fractional  undivided interests in the Applicable Trust and will convey
no rights, benefits or interests in respect of any property other than the Trust
Property  except  for those  Certificates  to which an Escrow  Receipt  has been
affixed;

            WHEREAS,    the   Escrow   Agent   and   the    Underwriters    have
contemporaneously  herewith  entered  into an Escrow  Agreement  with the Escrow
Paying Agent  pursuant to which the  Underwriters  have  delivered to the Escrow
Agent  the  proceeds  from  the  sale of the  Applicable  Certificates  and have



irrevocably  instructed  the Escrow  Agent to  withdraw  and pay funds from such
proceeds  upon  request  and proper  certification  by the  Trustee to  purchase
Equipment  Notes as the  Aircraft  are  delivered  by Boeing  under the Aircraft
Purchase  Agreement from time to time prior to the Delivery  Period  Termination
Date;

            WHEREAS,   the   Escrow   Agent   on   behalf   of  the   Applicable
Certificateholders  has  contemporaneously   herewith  entered  into  a  Deposit
Agreement with the Depositary under which the Deposits  referred to therein will
be made and from which it will  withdraw  funds to allow the Trustee to purchase
Equipment Notes from time to time prior to the Delivery Period Termination Date;

            WHEREAS, pursuant to the terms and conditions of the Basic Agreement
as supplemented by this Trust Supplement (the  "AGREEMENT") and the NPA, upon or
shortly  following  delivery  of an  Aircraft,  the  Trustee  on  behalf  of the
Applicable  Trust,  using  funds  withdrawn  under the Escrow  Agreement,  shall
purchase one or more Equipment Notes having the same interest rate as, and final
maturity  date not  later  than the  final  Regular  Distribution  Date of,  the
Applicable  Certificates issued hereunder and shall hold such Equipment Notes in
trust for the benefit of the Applicable Certificateholders;

            WHEREAS,  all of the conditions and  requirements  necessary to make
this Trust Supplement,  when duly executed and delivered,  a valid,  binding and
legal  instrument  in  accordance  with its  terms and for the  purposes  herein
expressed,  have been done,  performed  and  fulfilled,  and the  execution  and
delivery  of this Trust  Supplement  in the form and with the terms  hereof have
been in all respects duly authorized;

            WHEREAS,  this Trust  Supplement is subject to the provisions of the
Trust Indenture Act of 1939, as amended, and shall, to the extent applicable, be
governed by such provisions;

            NOW THEREFORE, in consideration of the premises herein, it is agreed
between the Company and the Trustee as follows:

                                    ARTICLE I
                                THE CERTIFICATES

            Section 1.01. THE CERTIFICATES.  There is hereby created a series of
Certificates to be issued under the Agreement to be  distinguished  and known as
"6.82%  Continental  Airlines  Pass Through  Certificates,  Series  1998-3A-1-O"
(hereinafter  defined  as  the  "APPLICABLE   CERTIFICATES").   Each  Applicable
Certificate  represents a fractional  undivided interest in the Applicable Trust
created  hereby.  The  Applicable  Certificates  shall be the  only  instruments
evidencing a fractional undivided interest in the Applicable Trust.

            The terms and conditions  applicable to the Applicable  Certificates
are as follows:




            (a) The aggregate  principal  amount of the Applicable  Certificates
      that shall be  authenticated  under the Agreement  (except for  Applicable
      Certificates  authenticated and delivered  pursuant to Sections 3.03, 3.04
      and 3.06 of the Basic Agreement) is $96,000,000.

            (b) The Regular  Distribution  Dates with  respect to any payment of
      Scheduled Payments means May 1 and November 1 of each year,  commencing on
      May 1, 1999,  until  payment of all of the  Scheduled  Payments to be made
      under the Equipment Notes has been made.

            (c) The Special  Distribution  Dates with respect to the  Applicable
      Certificates  means any Business  Day on which a Special  Payment is to be
      distributed pursuant to the Agreement.

            (d) At the Escrow Agent's  request under the Escrow  Agreement,  the
      Trustee shall affix the  corresponding  Escrow Receipt to each  Applicable
      Certificate.  In any event,  any  transfer or  exchange of any  Applicable
      Certificate shall also effect a transfer or exchange of the related Escrow
      Receipt.  Prior to the Final  Withdrawal  Date, no transfer or exchange of
      any Applicable  Certificate  shall be permitted  unless the  corresponding
      Escrow  Receipt  is  attached  thereto  and  also  is  so  transferred  or
      exchanged.  By acceptance of any Applicable Certificate to which an Escrow
      Receipt  is  attached,  each  Holder  of  such an  Applicable  Certificate
      acknowledges  and  accepts  the  restrictions  on  transfer  of the Escrow
      Receipt set forth herein and in the Escrow Agreement.

            (e) (i) The  Applicable  Certificates  shall be in the form attached
      hereto as Exhibit A. Any  Person  acquiring  or  accepting  an  Applicable
      Certificate  or  an  interest   therein  will,  by  such   acquisition  or
      acceptance,  be deemed to represent  and warrant to and for the benefit of
      each Owner  Participant  and the Company  that either (i) the assets of an
      employee benefit plan subject to Title I of the Employee Retirement Income
      Security  Act of 1974,  as  amended  ("ERISA"),  or of a plan  subject  to
      Section  4975 of the  Internal  Revenue  Code of  1986,  as  amended  (the
      "CODE"),  have not been used to  purchase  Applicable  Certificates  or an
      interest   therein  or  (ii)  the  purchase  and  holding  of   Applicable
      Certificates  or  an  interest  therein  is  exempt  from  the  prohibited
      transaction  restrictions  of ERISA and the Code  pursuant  to one or more
      prohibited transaction statutory or administrative exemptions.

            (ii) The Applicable  Certificates  shall be Book-Entry  Certificates
      and  shall  be  subject  to the  conditions  set  forth in the  Letter  of
      Representations  between  the  Company and the  Clearing  Agency  attached
      hereto as Exhibit B.

            (f)  the  "Participation   Agreements"  as  defined  in  this  Trust
      Supplement  are the "Note  Purchase  Agreements"  referred to in the Basic
      Agreement.

            (g) The  Applicable  Certificates  are subject to the  Intercreditor
      Agreement, the Deposit Agreement, and the Escrow Agreement.




            (h)  The  Applicable  Certificates  will  have  the  benefit  of the
      Liquidity Facility.

            (i)   The Responsible Party is the Company.

            (j) The date referred to in clause (i) of the definition of the term
      "PTC Event of Default" in the Basic Agreement is the Final Maturity Date.

            (k) The particular  "sections of the Note Purchase  Agreement",  for
      purposes of clause (3) of Section 7.07 of the Basic Agreement, are Section
      8.1 (with  respect to Owned  Aircraft)  and Section  9.1 (with  respect to
      Leased Aircraft) of each Participation Agreement.

            (l) The  Equipment  Notes to be acquired and held in the  Applicable
      Trust, and the related  Aircraft and Note Documents,  are described in the
      NPA.

                                   ARTICLE II
                                   DEFINITIONS

            Section 2.01.  DEFINITIONS.  For all purposes of the Basic Agreement
as supplemented by this Trust Supplement,  the following  capitalized terms have
the following meanings (any term used herein which is defined in both this Trust
Supplement and the Basic  Agreement shall have the meaning  assigned  thereto in
this Trust  Supplement for purposes of the Basic  Agreement as  supplemented  by
this Trust Supplement):

            AGREEMENT:  Has the meaning specified in the recitals hereto.

            AIRCRAFT:  Means each of the New Aircraft or Substitute  Aircraft in
      respect of which a Participation Agreement is to be or is, as the case may
      be, entered into in accordance  with the NPA (or any substitute  aircraft,
      including engines therefor, owned by or leased to the Company and securing
      one or more Equipment Notes).

            AIRCRAFT PURCHASE AGREEMENT: Has the meaning specified in the NPA.

            APPLICABLE CERTIFICATE: Has the meaning specified in Section 1.01 of
      this Trust Supplement.

            APPLICABLE  CERTIFICATEHOLDER:  Means the  Person  in whose  name an
      Applicable  Certificate  is registered on the Register for the  Applicable
      Certificates.

            APPLICABLE  DELIVERY  DATE:  Has the  meaning  specified  in Section
      5.01(b) of this Trust Supplement.

            APPLICABLE  PARTICIPATION  AGREEMENT:  Has the meaning  specified in
      Section 5.01(b) of this Trust Supplement.

            APPLICABLE TRUST: Has the meaning specified in the recitals hereto.



                                       1


            ASSIGNMENT  AND  ASSUMPTION  AGREEMENT:  Means  the  assignment  and
      assumption  agreement  substantially  in the  form  of  Exhibit  C  hereto
      executed  and  delivered  in  accordance  with  Section 7.01 of this Trust
      Supplement.

            BASIC AGREEMENT: Has the meaning specified in the first paragraph of
      this Trust Supplement.

            BOEING:  Means The Boeing Company.

            BUSINESS DAY: Means any day other than a Saturday, a Sunday or a day
      on which  commercial banks are required or authorized to close in Houston,
      Texas,  New  York,  New  York,  Salt  Lake  City,  Utah or, so long as any
      Applicable  Certificate  is  Outstanding,  the city and state in which the
      Trustee  or any Loan  Trustee  maintains  its  Corporate  Trust  Office or
      receives and disburses funds.

            CLASS C  CERTIFICATEHOLDER:  Has the  meaning  specified  in Section
      4.01(b)(iii) of this Trust Supplement.

            CLASS  C  FRACTIONAL  UNDIVIDED  INTEREST:  Means,  at any  date  of
      computation, the fractional interest in the relevant Trust held by a Class
      C  Certificateholder  multiplied  by the Pool  Balance  (as defined in the
      Intercreditor  Agreement) of such Trust and divided by the aggregate  Pool
      Balances  (as  defined in the  Intercreditor  Agreement)  of the Class C-1
      Trust and the Class C-2 Trust, all determined at such date.

            CLASS D  CERTIFICATEHOLDER:  Has the  meaning  specified  in Section
      4.01(b)(iv) of this Trust Supplement.

            COMPANY:  Has the meaning  specified in the first  paragraph of this
      Trust Supplement.

            CONTROLLING  PARTY: Has the meaning  specified in the  Intercreditor
      Agreement.

            CUT-OFF  DATE:   Means  the  earlier  of  (a)  the  Delivery  Period
      Termination Date and (b) the date on which a Triggering Event occurs.

            DELIVERY NOTICE:  Has the meaning specified in the NPA.

            DELIVERY PERIOD  TERMINATION DATE: Means the earlier of (a) July 31,
      1999,  or, if the Equipment  Notes relating to all of the New Aircraft (or
      Substitute  Aircraft  in lieu  thereof)  have  not been  purchased  by the
      Applicable  Trust and the Other Trusts on or prior to such date due to any
      reason  beyond  the  control  of the  Company  and not  occasioned  by the
      Company's  fault or  negligence,  December 31, 1999  (PROVIDED  that, if a
      labor strike  occurs at Boeing on or prior to either or both of such dates
      referred  to in this clause (a),  such date or dates on or  following  the
      commencement of such strike shall be extended by adding thereto the number
      of days that such  strike  continued  in effect) and (b) the date on which
      Equipment  Notes  issued  with  respect  to all of the  New  Aircraft  (or




      Substitute Aircraft in lieu thereof) have been purchased by the Applicable
      Trust and the Other Trusts in accordance with the NPA.

            DEPOSITS:  Has the meaning specified in the Deposit Agreement.

            DEPOSIT AGREEMENT:  Means the Deposit Agreement dated as of November
      3, 1998 relating to the Applicable Certificates between the Depositary and
      the Escrow Agent,  as the same may be amended,  supplemented  or otherwise
      modified from time to time in accordance with its terms.

            DEPOSITARY:  Means Credit Suisse First Boston, a Swiss bank,  acting
      through its New York branch.

            DISTRIBUTION  DATE: Means any Regular  Distribution  Date or Special
      Distribution Date as the context requires.

            ESCROW  AGENT:  Means,  initially,  First  Security  Bank,  National
      Association,  and any  replacement  or  successor  therefor  appointed  in
      accordance with the Escrow Agreement.

            ESCROW AGREEMENT:  Means the Escrow and Paying Agent Agreement dated
      as of November 3, 1998 relating to the Applicable Certificates,  among the
      Escrow Agent,  the Escrow Paying Agent, the Trustee and  Underwriters,  as
      the same may be amended,  supplemented or otherwise  modified from time to
      time in accordance with its terms.

            ESCROW PAYING  AGENT:  Means the Person acting as paying agent under
      the Escrow Agreement.

            ESCROW RECEIPT:  Means the receipt substantially in the form annexed
      to the Escrow Agreement  representing a fractional  undivided  interest in
      the funds held in escrow thereunder.

            FINAL MATURITY DATE:  Means November 1, 2019.

            FINAL WITHDRAWAL: Has the meaning specified in the Escrow Agreement.

            FINAL  WITHDRAWAL  DATE:  Has the  meaning  specified  in the Escrow
      Agreement.

            FINAL WITHDRAWAL  NOTICE:  Has the meaning specified in Section 5.02
      of this Trust Supplement.

            INDENTURE: Means each of the separate trust indentures and mortgages
      relating to the  Aircraft,  each as  specified  or described in a Delivery
      Notice  delivered  pursuant  to  the  NPA  or  the  related  Participation
      Agreement,  in each  case as the  same  may be  amended,  supplemented  or
      otherwise modified from time to time in accordance with its terms.




            INTERCREDITOR AGREEMENT:  Means the Intercreditor Agreement dated as
      of November 3, 1998 among the Trustee,  the Other Trustees,  the Liquidity
      Provider,  the liquidity  providers  relating to the  Certificates  issued
      under (and as defined  in) each of the Other  Agreements,  and  Wilmington
      Trust  Company,  as  Subordination  Agent and as  trustee  thereunder,  as
      amended,   supplemented  or  otherwise  modified  from  time  to  time  in
      accordance with its terms.

            INVESTORS:  Means  the  Underwriters  together  with all  subsequent
      beneficial owners of the Applicable Certificates.

            LEASE:  Means,  with  respect  to each  Leased  Aircraft,  the lease
      between an Owner Trustee,  as the lessor, and the Company,  as the lessee,
      referred  to in the  related  Indenture,  as such  lease  may be  amended,
      supplemented or otherwise modified in accordance with its terms.

            LEASED AIRCRAFT:  Has the meaning  specified in the third recital to
      this Trust Supplement.

            LEASED  AIRCRAFT  INDENTURE:   Has  the  meaning  specified  in  the
      Intercreditor Agreement.

            LIQUIDITY FACILITY: Means, initially, the Revolving Credit Agreement
      dated as of November  3, 1998  relating  to the  Applicable  Certificates,
      between  the  Liquidity   Provider  and  Wilmington   Trust  Company,   as
      Subordination  Agent, as agent and trustee for the Applicable  Trust, and,
      from  and  after  the  replacement  of  such  agreement  pursuant  to  the
      Intercreditor  Agreement,  the replacement liquidity facility therefor, in
      each case as amended, supplemented or otherwise modified from time to time
      in accordance with their respective terms.

            LIQUIDITY  PROVIDER:   Means,  initially,   Westdeutsche  Landesbank
      Girozentrale,   a  German   public  law  banking   institution,   and  any
      replacements  or  successors  therefor  appointed in  accordance  with the
      Intercreditor Agreement.

            NEW AIRCRAFT:  Has the meaning specified in the NPA.

            NOTE  DOCUMENTS:  Means the  Equipment  Notes  with  respect  to the
      Applicable  Certificates and, with respect to any such Equipment Note, (i)
      the Indenture and the Participation  Agreement  relating to such Equipment
      Note,  and  (ii) in the case of any  Equipment  Note  related  to a Leased
      Aircraft, the Lease relating to such Leased Aircraft.

            NOTICE OF  PURCHASE  WITHDRAWAL:  Has the meaning  specified  in the
      Deposit Agreement.

            NPA: Means the Note Purchase  Agreement dated as of November 3, 1998
      among the Trustee, the Other Trustees,  the Company, the Escrow Agent, the
      Escrow Paying Agent and the  Subordination  Agent,  providing  for,  among



      other things,  the purchase of Equipment Notes by the Trustee on behalf of
      the Trust, as the same may be amended,  supplemented or otherwise modified
      from time to time, in accordance with its terms.

            OTHER  AGREEMENTS:  Means (i) the Basic Agreement as supplemented by
      Trust  Supplement  No.  1998-3A-2-O  dated  the date  hereof  relating  to
      Continental  Airlines  Pass  Through  Trust  1998-3A-2-O,  (ii) the  Basic
      Agreement as supplemented by Trust Supplement No. 1998-3B-O dated the date
      hereof  relating to  Continental  Airlines Pass Through  Trust  1998-3B-O,
      (iii)  the  Basic  Agreement  as  supplemented  by  Trust  Supplement  No.
      1998-3C-1-O  dated the date hereof  relating to Continental  Airlines Pass
      Through Trust  1998-3C-1-O and (iv) the Basic Agreement as supplemented by
      Trust  Supplement  No.  1998-3C-2-O  dated  the date  hereof  relating  to
      Continental Airlines Pass Through Trust 1998-3C-2-O.

            OTHER TRUSTEES:  Means the trustees under the Other Agreements,  and
      any successor or other trustee appointed as provided therein.

            OTHER  TRUSTS:  Means the  Continental  Airlines  Pass Through Trust
      1998-3A-2-O,  the Continental  Airlines Pass Through Trust 1998-3B-O,  the
      Continental  Airlines Pass Through Trust  1998-3C-1-O  and the Continental
      Airlines Pass Through Trust 1998-3C-2-O, each created on the date hereof.

            OWNED  AIRCRAFT:  Has the meaning  specified in the third recital to
      this Trust Supplement.

            OWNED  AIRCRAFT   INDENTURE:   Has  the  meaning  specified  in  the
      Intercreditor Agreement.

            OWNER PARTICIPANT:  With respect to any Equipment Note relating to a
      Leased  Aircraft,  means the "Owner  Participant"  as  referred  to in the
      Indenture  pursuant  to  which  such  Equipment  Note  is  issued  and any
      permitted  successor  or  assign  of such  Owner  Participant;  and  OWNER
      PARTICIPANTS  at  any  time  of  determination  means  all  of  the  Owner
      Participants thus referred to in the Indentures.

            OWNER  TRUSTEE:  With respect to any  Equipment  Note  relating to a
      Leased  Aircraft,  means  the  "Owner  Trustee",  as  referred  to in  the
      Indenture  pursuant  to which such  Equipment  Note is issued,  not in its
      individual capacity but solely as trustee; and OWNER TRUSTEES means all of
      the Owner Trustees party to any of the Indentures.

            OWNER  TRUSTEE'S  PURCHASE  AGREEMENT:  Means,  with  respect to any
      Leased Aircraft,  the agreement between the Company and the relevant Owner
      Trustee  pursuant to which,  INTER ALIA, the Company  assigns to the Owner
      Trustee  certain  rights  of  the  Company  under  the  aircraft  purchase
      agreement with respect to such Leased Aircraft.

            PARTICIPATION  AGREEMENT:  Means each Participation  Agreement to be
      entered  into,  or  entered  into (as the case  may  be),  by the  Trustee
      pursuant to the NPA, as the same may be amended, supplemented or otherwise
      modified in accordance with its terms.



            POOL BALANCE: Means, as of any date, (i) the original aggregate face
      amount of the Applicable  Certificates  less (ii) the aggregate  amount of
      all payments made in respect of such Applicable Certificates or in respect
      of  Deposits  other than  payments  made in respect of interest or premium
      thereon or reimbursement  of any costs or expenses  incurred in connection
      therewith.  The Pool Balance as of any Distribution Date shall be computed
      after  giving  effect to any special  distribution  with respect to unused
      Deposits,  payment of  principal  of the  Equipment  Notes or payment with
      respect to other Trust Property and the distribution thereof to be made on
      that date.

            POOL  FACTOR:  Means,  as of any  Distribution  Date,  the  quotient
      (rounded to the seventh  decimal place)  computed by dividing (i) the Pool
      Balance  by (ii) the  original  aggregate  face  amount of the  Applicable
      Certificates.  The  Pool  Factor  as of any  Distribution  Date  shall  be
      computed after giving effect to any special  distribution  with respect to
      unused  Deposits,  payment of principal of the Equipment Notes or payments
      with respect to other Trust  Property and the  distribution  thereof to be
      made on that date.

            PROSPECTUS SUPPLEMENT: Means the Prospectus Supplement dated October
      21, 1998 relating to the offering of the Certificates.

            RELATED PASS THROUGH TRUST  AGREEMENT:  Means the Basic Agreement as
      supplemented by the Trust Supplement No. 1998-3A-1-S dated the date hereof
      relating to the  Continental  Airlines Pass Through Trust  1998-3A-1-S and
      entered  into by the  Company and the  Trustee,  which  agreement  becomes
      effective upon the execution and delivery of the Assignment and Assumption
      Agreement pursuant to Section 7.01 of this Trust Supplement.

            RELATED TRUST: Means the Continental Pass Through Trust 1998-3A-1-S,
      to be formed under the Related Pass Through Trust Agreement.

            RELATED  TRUSTEE:  Means the trustee  under the Related Pass Through
      Trust Agreement.

            SCHEDULED DELIVERY DATE:  Has the meaning specified in the NPA.

            SPECIAL PAYMENT:  Means any payment (other than a Scheduled Payment)
      in respect of, or any proceeds of, any  Equipment  Note,  Trust  Indenture
      Estate (as defined in each Leased  Aircraft  Indenture) or Collateral  (as
      defined in each Owned Aircraft Indenture).

            SUBSTITUTE AIRCRAFT:  Has the meaning specified in the NPA.

            TRANSFER  DATE:  Has the meaning  specified  in Section 7.01 of this
      Trust Supplement.

            TRIGGERING  EVENT:  Has the  meaning  assigned  to such  term in the
      Intercreditor Agreement.




            TRUST PROPERTY:  Means (i) subject to the  Intercreditor  Agreement,
      the  Equipment  Notes held as the property of the  Applicable  Trust,  all
      monies at any time  paid  thereon  and all  monies  due and to become  due
      thereunder,  (ii) funds  from time to time  deposited  in the  Certificate
      Account and the Special Payments Account and, subject to the Intercreditor
      Agreement,  any proceeds from the sale by the Trustee  pursuant to Article
      VI of the Basic  Agreement of any  Equipment  Note and (iii) all rights of
      the Applicable Trust and the Trustee,  on behalf of the Applicable  Trust,
      under the Intercreditor  Agreement,  the Escrow Agreement, the NPA and the
      Liquidity Facility,  including,  without limitation, all rights to receive
      certain payments thereunder,  and all monies paid to the Trustee on behalf
      of the  Applicable  Trust pursuant to the  Intercreditor  Agreement or the
      Liquidity  Facility,  PROVIDED that rights with respect to the Deposits or
      under the Escrow Agreement, except for the right to direct withdrawals for
      the purchase of Equipment  Notes to be held  herein,  will not  constitute
      Trust Property.

            TRUST  SUPPLEMENT:  Has the meaning specified in the first paragraph
      of this trust supplement.

            UNDERWRITERS:    Means,   collectively,   Morgan   Stanley   &   Co.
      Incorporated,  Credit Suisse First Boston  Corporation,  Chase  Securities
      Inc.,  Donaldson,  Lufkin & Jenrette  Securities  Corporation  and Salomon
      Smith Barney Inc.

            UNDERWRITING  AGREEMENT:  Means  the  Underwriting  Agreement  dated
      October 21, 1998 among the  Underwriters,  the Company and the Depositary,
      as the same may be amended,  supplemented or otherwise  modified from time
      to time in accordance with its terms.

                                   ARTICLE III
                        STATEMENTS TO CERTIFICATEHOLDERS

            Section 3.01.  STATEMENTS TO APPLICABLE  CERTIFICATEHOLDERS.  (a) On
each  Distribution  Date,  the Trustee will include  with each  distribution  to
Applicable  Certificateholders of a Scheduled Payment or Special Payment, as the
case may be, a statement  setting forth the  information  provided below (in the
case of a Special  Payment,  reflecting in part the information  provided by the
Escrow Paying Agent under the Escrow Agreement).  Such statement shall set forth
(per $1,000 face amount  Applicable  Certificate as to (ii), (iii), (iv) and (v)
below) the following information:

            (i) the aggregate amount of funds  distributed on such  Distribution
      Date under the Agreement and under the Escrow  Agreement,  indicating  the
      amount allocable to each source;

            (ii) the amount of such distribution  under the Agreement  allocable
      to principal and the amount allocable to premium, if any;

            (iii) the amount of such distribution under the Agreement  allocable
      to interest;




            (iv) the  amount of such  distribution  under the  Escrow  Agreement
      allocable to interest;

            (v) the  amount  of such  distribution  under the  Escrow  Agreement
      allocable to unused Deposits, if any; and

            (vi) the Pool Balance and the Pool Factor.

            With respect to the Applicable  Certificates  registered in the name
of a Clearing Agency,  on the Record Date prior to each  Distribution  Date, the
Trustee will request from such  Clearing  Agency a securities  position  listing
setting forth the names of all Clearing  Agency  Participants  reflected on such
Clearing Agency's books as holding  interests in the Applicable  Certificates on
such Record Date. On each Distribution  Date, the Trustee will mail to each such
Clearing  Agency  Participant  the  statement  described  above  and  will  make
available additional copies as requested by such Clearing Agency Participant for
forwarding to holders of interests in the Applicable Certificates.

            (b)  Within  a  reasonable  period  of  time  after  the end of each
calendar  year but not later than the latest date  permitted by law, the Trustee
shall  furnish to each Person who at any time during such  calendar  year was an
Applicable  Certificateholder  of record a statement  containing  the sum of the
amounts determined pursuant to clauses (a)(i),  (a)(ii),  (a)(iii),  (a)(iv) and
(a)(v)  above  for such  calendar  year or,  in the  event  such  Person  was an
Applicable  Certificateholder  of record during a portion of such calendar year,
for such portion of such year, and such other items as are readily  available to
the Trustee and which an Applicable  Certificateholder  shall reasonably request
as necessary for the purpose of such Applicable Certificateholder's  preparation
of its federal income tax returns.  Such statement and such other items shall be
prepared on the basis of  information  supplied  to the Trustee by the  Clearing
Agency  Participants  and shall be  delivered  by the  Trustee to such  Clearing
Agency  Participants  to be available for  forwarding  by such  Clearing  Agency
Participants  to the holders of interests in the Applicable  Certificates in the
manner described in Section 3.02(a) of this Trust Supplement.

            (c) If the aggregate  principal  payments scheduled for May 1, 1999,
on the Equipment Notes held as Trust Property as of April 9, 1999,  differs from
the amount thereof set forth for the Applicable Certificates on page S-34 of the
Prospectus  Supplement,  by no later than April 15, 1999 the Trustee  shall mail
written notice of the actual amount of such scheduled payments to the Applicable
Certificateholders  of record as of a date within 10 Business  Days prior to the
date of mailing.

            (d) Promptly  following (i) the Delivery Period Termination Date, if
there has been any change in the  information  set forth in clauses (x), (y) and
(z) below  from that set forth in page S-34 of the  Prospectus  Supplement,  and
(ii) any early  redemption  or  purchase  of, or any  default in the  payment of
principal  or  interest in respect  of, any of the  Equipment  Notes held in the
Applicable  Trust,  or any  Final  Withdrawal,  the  Trustee  shall  furnish  to
Applicable  Certificateholders  of record on such date a statement setting forth
(x) the expected Pool Balances for each  subsequent  Regular  Distribution  Date
following the Delivery Period Termination Date, (y) the related Pool Factors for
such  Regular  Distribution  Dates and (z) the expected  principal  distribution



schedule of the Equipment Notes, in the aggregate, held as Trust Property at the
date of such notice. With respect to the Applicable  Certificates  registered in
the name of a Clearing  Agency,  on the Delivery  Period  Termination  Date, the
Trustee will request from such  Clearing  Agency a securities  position  listing
setting forth the names of all Clearing  Agency  Participants  reflected on such
Clearing Agency's books as holding  interests in the Applicable  Certificates on
such date. The Trustee will mail to each such Clearing  Agency  Participant  the
statement described above and will make available additional copies as requested
by such Clearing  Agency  Participant  for forwarding to holders of interests in
the Applicable Certificates.

            (e) This Section 3.01  supersedes  and replaces  Section 4.03 of the
Basic Agreement, with respect to the Applicable Trust.

                                   ARTICLE IV
                                     DEFAULT

            Section 4.01. PURCHASE RIGHTS OF CERTIFICATEHOLDERS. (a) At any time
after the occurrence and during the  continuance of a Triggering  Event,  if the
Class   A-2   Trustee   is  then  the   Controlling   Party,   each   Applicable
Certificateholder  shall have the right to purchase,  for the purchase price set
forth in the Class A-2 Trust Agreement, all, but not less than all, of the Class
A-2 Certificates upon ten days' written notice to the Class A-2 Trustee and each
other  Applicable  Certificateholder,  PROVIDED  that (i) if prior to the end of
such  ten-day  period  any  other  Applicable  Certificateholder  notifies  such
purchasing   Applicable    Certificateholder    that   such   other   Applicable
Certificateholder  wants  to  participate  in such  purchase,  then  such  other
Applicable   Certificateholder   may  join   with  the   purchasing   Applicable
Certificateholder  to  purchase  all,  but not less than  all,  of the Class A-2
Certificates  pro  rata  based  on  the  Fractional  Undivided  Interest  in the
Applicable  Trust  held by each such  Applicable  Certificateholder  and (ii) if
prior to the end of such ten-day period any other  Applicable  Certificateholder
fails to  notify  the  purchasing  Applicable  Certificateholder  of such  other
Applicable  Certificateholder's  desire to participate in such a purchase,  then
such other  Applicable  Certificateholder  shall lose its right to purchase  the
Class A-2 Certificates pursuant to this Section 4.01(a).

            (b) By acceptance of its  Applicable  Certificate,  each  Applicable
Certificateholder  agrees that at any time after the  occurrence  and during the
continuation of a Triggering Event,

            (i) if the  Trustee is then the  Controlling  Party,  each Class A-2
      Certificateholder  shall have the right to purchase all, but not less than
      all, of the Applicable  Certificates  upon ten days' written notice to the
      Trustee and each other Class A-2  Certificateholder,  PROVIDED that (A) if
      prior  to  the  end  of  such   ten-day   period   any  other   Class  A-2
      Certificateholder  notifies such  purchasing  Class A-2  Certificateholder
      that such other Class A-2  Certificateholder  wants to participate in such
      purchase,  then such other Class A-2  Certificateholder  may join with the
      purchasing Class A-2  Certificateholder to purchase all, but not less than
      all,  of the  Applicable  Certificates  pro rata  based on the  Fractional
      Undivided  Interest  in the Class A-2  Trust  held by each such  Class A-2
      Certificateholder  and (B) if prior to the end of such ten-day  period any



      other Class A-2 Certificateholder fails to notify the purchasing Class A-2
      Certificateholder  of such other Class A-2  Certificateholder's  desire to
      participate   in   such  a   purchase,   then   such   other   Class   A-2
      Certificateholder   shall  lose  its  right  to  purchase  the  Applicable
      Certificates pursuant to this Section 4.01(b);

            (ii) each  Class B  Certificateholder  shall  have the right  (which
      shall not expire upon any purchase of certificates  pursuant to clause (a)
      or (b)(i) above) to purchase all, but not less than all, of the Applicable
      Certificates and the Class A-2 Certificates  upon ten days' written notice
      to  the   Trustee,   the  Class  A-2   Trustee  and  each  other  Class  B
      Certificateholder,  PROVIDED  that (A) if prior to the end of such ten-day
      period any other Class B Certificateholder  notifies such purchasing Class
      B  Certificateholder  that such other Class B  Certificateholder  wants to
      participate  in such purchase,  then such other Class B  Certificateholder
      may join with the purchasing  Class B  Certificateholder  to purchase all,
      but not less than all, of the  Applicable  Certificates  and the Class A-2
      Certificates  pro rata based on the Fractional  Undivided  Interest in the
      Class B Trust held by each such Class B Certificateholder and (B) if prior
      to the end of such  ten-day  period  any other  Class B  Certificateholder
      fails to notify the  purchasing  Class B  Certificateholder  of such other
      Class B Certificateholder's desire to participate in such a purchase, then
      such other Class B Certificateholder  shall lose its right to purchase the
      Applicable  Certificates and the Class A-2  Certificates  pursuant to this
      Section 4.01(b);

            (iii)   each   Class   C-1    Certificateholder    and   Class   C-2
      Certificateholder  (each a "CLASS  C  CERTIFICATEHOLDER")  shall  have the
      right (which shall not expire upon any purchase of  certificates  pursuant
      to clause (a), (b)(i) or (b)(ii) above) to purchase all, but not less than
      all, of the Applicable  Certificates,  the Class A-2  Certificates and the
      Class B  Certificates  upon ten days' written  notice to the Trustee,  the
      Class A-2 Trustee,  the Class B Trustee and (x) if such purchasing Class C
      Certificateholder is a Class C-1  Certificateholder,  each other Class C-1
      Certificateholder  and either (I) if the Class C-2 Trustee shall have made
      a  current  list  of  Class  C-2  Certificateholders   available  to  such
      purchasing Class C Certificateholder  upon a request therefor,  each Class
      C-2 Certificateholder,  or (II) if clause (I) is not applicable, the Class
      C-2 Trustee,  or (y) if such  purchasing  Class C  Certificateholder  is a
      Class C-2  Certificateholder,  each other Class C-2  Certificateholder and
      either  (I) if the Class C-1  Trustee  shall  have made a current  list of
      Class  C-1  Certificateholders   available  to  such  purchasing  Class  C
      Certificateholder    upon   a   request    therefor,    each   Class   C-1
      Certificateholder,  or (II) if clause (I) is not applicable, the Class C-1
      Trustee,  PROVIDED that (A) if prior to the end of such ten-day period any
      other  Class  C   Certificateholder   notifies  such  purchasing  Class  C
      Certificateholder  that  such  other  Class C  Certificateholder  wants to
      participate  in such purchase,  then such other Class C  Certificateholder
      may join with the purchasing  Class C  Certificateholder  to purchase all,
      but not less  than  all,  of the  Applicable  Certificates,  the Class A-2
      Certificates  and the Class B  Certificates  pro rata based on the Class C
      Fractional  Undivided Interest held by each such Class C Certificateholder
      and (B) if prior  to the end of such  ten-day  period  any  other  Class C
      Certificateholder fails to notify the purchasing Class C Certificateholder
      of such other Class C Certificateholder's  desire to participate in such a
      purchase,  then such other Class C Certificateholder  shall lose its right



      to purchase the Applicable  Certificates,  the Class A-2  Certificates and
      the Class B Certificates pursuant to this Section 4.01(b); and

            (iv)   each   holder   of  a  Class  D   Certificate   (a  "CLASS  D
      CERTIFICATEHOLDER")  shall have the right (which shall not expire upon any
      purchase  of  certificates  pursuant  to clause  (a),  (b)(i),  (b)(ii) or
      (b)(iii)  above) to purchase all, but not less than all, of the Applicable
      Certificates,  the Class A-2 Certificates,  the Class B Certificates,  the
      Class  C-1  Certificates  and the Class  C-2  Certificates  upon ten days'
      written notice to the Trustee, the Class A-2 Trustee, the Class B Trustee,
      the  Class C-1  Trustee,  the Class C-2  Trustee  and each  other  Class D
      Certificateholder,  PROVIDED  that (A) if prior to the end of such ten-day
      period any other Class D Certificateholder  notifies such purchasing Class
      D  Certificateholder  that such other Class D  Certificateholder  wants to
      participate  in such purchase,  then such other Class D  Certificateholder
      may join with the purchasing  Class D  Certificateholder  to purchase all,
      but not less  than  all,  of the  Applicable  Certificates,  the Class A-2
      Certificates, the Class B Certificates, the Class C-1 Certificates and the
      Class C-2 Certificates pro rata based on the Fractional Undivided Interest
      in the Class D Trust held by each such Class D  Certificateholder  and (B)
      if  prior  to  the  end  of  such   ten-day   period  any  other  Class  D
      Certificateholder fails to notify the purchasing Class D Certificateholder
      of such other Class D Certificateholder's  desire to participate in such a
      purchase,  then such other Class D Certificateholder  shall lose its right
      to purchase the Applicable Certificates,  the Class A-2 Certificates,  the
      Class B  Certificates,  the  Class  C-1  Certificates  and the  Class  C-2
      Certificates pursuant to this Section 4.01(b).

            The purchase price with respect to the Applicable Certificates shall
be equal to the Pool  Balance  of the  Applicable  Certificates,  together  with
accrued  and  unpaid  interest  thereon  to the date of such  purchase,  without
premium,  but including any other amounts then due and payable to the Applicable
Certificateholders under this Agreement, the Intercreditor Agreement, the Escrow
Agreement  or  any  Note  Document  or  on  or  in  respect  of  the  Applicable
Certificates; PROVIDED, HOWEVER, that (x) if such purchase occurs after a record
date  specified  in  Section  2.03  of  the  Escrow  Agreement  relating  to the
distribution  of unused  Deposits and/or accrued and unpaid interest on Deposits
and prior to or on the related distribution date thereunder, such purchase price
shall be reduced by the aggregate  amount of unused  Deposits and/or interest to
be distributed  under the Escrow  Agreement (which deducted amounts shall remain
distributable to, and may be retained by, the Applicable Certificateholder as of
such record date) and (y) if such purchase  occurs after a Record Date and prior
to or on the related  Distribution Date, such purchase price shall be reduced by
the amount to be distributed  under this  Agreement on the related  Distribution
Date (which deducted amounts shall remain  distributable to, and may be retained
by, the Applicable  Certificateholder as of such Record Date);  PROVIDED FURTHER
that no such purchase of Applicable  Certificates  shall be effective unless the
purchaser(s)  shall  certify to the  Trustee  that  contemporaneously  with such
purchase,  such purchaser(s) is (are) purchasing,  pursuant to the terms of this
Agreement  and the  Other  Agreements,  (A) in the case of any  purchase  of the
Applicable  Certificates  pursuant to clause (b)(i) above, all of the Applicable
Certificates, or (B) in all other cases, the Applicable Certificates,  the Class
A-2 Certificates,  the Class B Certificates,  the Class C-1 Certificates and the
Class  C-2  Certificates  which  are  senior  to the  securities  held  by  such
purchaser(s).  Each payment of the purchase price of the Applicable Certificates



referred to in the first sentence hereof shall be made to an account or accounts
designated by the Trustee and each such  purchase  shall be subject to the terms
of  this  Section  4.01(b).  Each  Applicable  Certificateholder  agrees  by its
acceptance of its Applicable  Certificate that (at any time after the occurrence
and during the  continuance  of a Triggering  Event) it will,  upon payment from
such  Class  A-2  Certificateholder(s),  Class B  Certificateholder(s),  Class C
Certificateholder(s) or Class D Certificateholder(s), as the case may be, of the
purchase  price set forth in the first  sentence  of this  paragraph,  forthwith
sell, assign, transfer and convey to the purchaser(s) thereof (without recourse,
representation  or  warranty  of any kind  except for its own acts),  all of the
right, title,  interest and obligation of such Applicable  Certificateholder  in
this Agreement,  the Escrow Agreement,  the Deposit Agreement, the Intercreditor
Agreement,  the  Liquidity  Facility,  the  NPA,  the  Note  Documents  and  all
Applicable   Certificates   and  Escrow   Receipts   held  by  such   Applicable
Certificateholder  (subject to clauses (x) and (y) in the first sentence of this
paragraph and excluding all right, title and interest under any of the foregoing
to the extent such right, title or interest is with respect to an obligation not
then due and  payable as  respects  any action or  inaction  or state of affairs
occurring  prior  to such  sale)  and the  purchaser  shall  assume  all of such
Applicable  Certificateholder's  obligations  under this  Agreement,  the Escrow
Agreement,  the Deposit Agreement,  the Intercreditor  Agreement,  the Liquidity
Facility,  the NPA, the Note Documents and all such Applicable  Certificates and
Escrow Receipts.  The Applicable  Certificates will be deemed to be purchased on
the date payment of the purchase  price is made  notwithstanding  the failure of
the Applicable  Certificateholders  to deliver any Applicable  Certificates and,
upon such a purchase,  (I) the only rights of the Applicable  Certificateholders
will be to deliver the Applicable  Certificates to the  purchaser(s) and receive
the purchase price for such Applicable Certificates and (II) if the purchaser(s)
shall so request,  such  Applicable  Certificateholder  will comply with all the
provisions  of Section  3.04 of the Basic  Agreement  to enable  new  Applicable
Certificates  to be issued to the  purchaser in such  denominations  as it shall
request.  All charges and expenses in  connection  with the issuance of any such
new Applicable Certificates shall be borne by the purchaser thereof.

            As used in this Section 4.01 and elsewhere in this Trust Supplement,
the terms "Class A-2  Certificate",  "Class A-2  Certificateholder",  "Class A-2
Trust", "Class A-2 Trust Agreement", "Class A-2 Trustee", "Class B Certificate",
"Class B  Certificateholder",  "Class B Trust",  "Class B  Trustee",  "Class C-1
Certificate",  "Class  C-1  Certificateholder",  "Class C-1  Trust",  "Class C-1
Trustee",  "Class C-2 Certificate",  "Class C-2  Certificateholder",  "Class C-2
Trust",  "Class C-2 Trustee",  "Class D Certificate" and "Class D Trust",  shall
have  the  respective  meanings  assigned  to such  terms  in the  Intercreditor
Agreement.

            (c) This Section 4.01 supersedes and replaces Section 6.01(b) of the
Basic Agreement,  with respect to the Applicable Trust.

          Section  4.02.  AMENDMENT  OF  SECTION  6.05 OF THE  BASIC  AGREEMENT.
Section  6.05 of the Basic  Agreement  shall be  amended,  with  respect  to the
Applicable  Trust, by deleting the phrase "and thereby annul any Direction given
by such  Certificateholders  or the Trustee to such Loan  Trustee  with  respect
thereto," set forth in the first sentence thereof.




                                    ARTICLE V
                                   THE TRUSTEE

            Section 5.01. DELIVERY OF DOCUMENTS; DELIVERY DATES. (a) The Trustee
is hereby directed (i) to execute and deliver the Intercreditor  Agreement,  the
Escrow  Agreement and the NPA on or prior to the Issuance Date, each in the form
delivered to the Trustee by the Company and (ii) subject to the respective terms
thereof, to perform its obligations thereunder.  Upon request of the Company and
the  satisfaction  or  waiver  of  the  closing  conditions   specified  in  the
Underwriting Agreement, the Trustee shall execute, deliver, authenticate,  issue
and sell  Applicable  Certificates in authorized  denominations  equaling in the
aggregate  the amount set  forth,  with  respect  to the  Applicable  Trust,  in
Schedule  II to the  Underwriting  Agreement  evidencing  the  entire  ownership
interest in the  Applicable  Trust,  which amount  equals the maximum  aggregate
principal  amount of  Equipment  Notes  which may be  purchased  by the  Trustee
pursuant to the NPA. Except as provided in Sections 3.03, 3.04, 3.05 and 3.06 of
the Basic  Agreement,  the Trustee  shall not execute,  authenticate  or deliver
Applicable  Certificates  in excess of the  aggregate  amount  specified in this
paragraph.  The  provisions  of this Section  5.01(a)  supersede and replace the
first sentence of Section  3.02(a) of the Basic  Agreement,  with respect to the
Applicable Trust.

            (b) On or after the Issuance Date, the Company may deliver from time
to time to the  Trustee a  Delivery  Notice  relating  to one or more  Equipment
Notes.  After  receipt  of a  Delivery  Notice and in any case no later than one
Business Day prior to a Scheduled Delivery Date as to which such Delivery Notice
relates  (the  "APPLICABLE  DELIVERY  DATE"),  the  Trustee  shall  (as and when
specified in the Delivery  Notice) instruct the Escrow Agent to provide a Notice
of Purchase Withdrawal to the Depositary requesting (A) the withdrawal of one or
more Deposits on the  Applicable  Delivery  Date in  accordance  with and to the
extent permitted by the terms of the Escrow Agreement and the Deposit  Agreement
and (B) the  payment of all,  or a portion,  of such  Deposit or  Deposits in an
amount equal in the aggregate to the purchase price of such  Equipment  Notes to
or on behalf of the Owner  Trustee or the Company,  as the case may be,  issuing
such  Equipment  Notes,  all as shall be described in the Delivery  Notice.  The
Trustee shall (as and when  specified in such Delivery  Notice),  subject to the
conditions  set  forth in  Section  2 of the NPA,  enter  into and  perform  its
obligations under the Participation  Agreement specified in such Delivery Notice
(the  "APPLICABLE   PARTICIPATION   AGREEMENT")  and  cause  such  certificates,
documents  and legal  opinions  relating to the Trustee to be duly  delivered as
required by the Applicable  Participation Agreement. If at any time prior to the
Applicable Delivery Date, the Trustee receives a notice of postponement pursuant
to Section 1(e) or 1(f) of the NPA, then the Trustee  shall give the  Depositary
(with a copy to the Escrow  Agent) a notice of  cancellation  of such  Notice of
Purchase  Withdrawal  relating to such  Deposit or  Deposits on such  Applicable



Delivery Date. Upon satisfaction of the conditions  specified in the NPA and the
Applicable  Participation  Agreement,  the Trustee shall purchase the applicable
Equipment  Notes with the proceeds of the  withdrawals  of one or more  Deposits
made on the Applicable Delivery Date in accordance with the terms of the Deposit
Agreement and the Escrow  Agreement.  The purchase price of such Equipment Notes
shall equal the principal amount of such Equipment Notes. Amounts withdrawn from
such Deposit or Deposits in excess of the purchase price of the Equipment  Notes
or to the extent not applied on the  Applicable  Delivery  Date to the  purchase
price of the  Equipment  Notes,  shall be  re-deposited  by the Trustee with the
Depositary on the Applicable  Delivery Date in accordance  with the terms of the
Deposit Agreement.  The provisions of this Section 5.01(b) supersede and replace
the  provisions  of  Section  2.02 of the Basic  Agreement  with  respect to the
Applicable  Trust,  and  all  provisions  of the  Basic  Agreement  relating  to
Postponed  Notes and Section 2.02 of the Basic  Agreement shall not apply to the
Applicable Trust.

            (c) The Trustee  acknowledges its acceptance of all right, title and
interest in and to the Trust Property to be acquired pursuant to Section 5.01(b)
of this Trust Supplement,  the NPA and each Applicable  Participation Agreement,
and declares that it holds and will hold such right,  title and interest for the
benefit of all present and future Applicable Certificateholders, upon the trusts
set forth in this  Agreement.  By its  acceptance of an Applicable  Certificate,
each initial Applicable Certificateholder, as a grantor of the Applicable Trust,
joins with the Trustee in the creation of the Applicable  Trust.  The provisions
of this Section 5.01(c)  supersede and replace the provisions of Section 2.03 of
the Basic Agreement, with respect to the Applicable Trust.

            Section  5.02.  WITHDRAWAL  OF  DEPOSITS.  If  any  Deposits  remain
outstanding  on the Business Day next  succeeding  the Cut-off Date, the Trustee
shall give the Escrow Agent  notice that the  Trustee's  obligation  to purchase
Equipment  Notes under the NPA has  terminated  and instruct the Escrow Agent to
provide a notice of Final Withdrawal to the Depositary substantially in the form
of Exhibit B to the Deposit Agreement (the "FINAL WITHDRAWAL NOTICE").

            Section 5.03. THE TRUSTEE. (a) Subject to Section 5.04 of this Trust
Supplement  and Section 7.15 of the Basic  Agreement,  the Trustee  shall not be
responsible  in any  manner  whatsoever  for or in respect  of the  validity  or
sufficiency  of this Trust  Supplement,  the Deposit  Agreement,  the NPA or the
Escrow  Agreement or the due  execution  hereof or thereof by the Company or the
other  parties  thereto  (other than the  Trustee),  or for or in respect of the
recitals and statements  contained herein or therein,  all of which recitals and
statements  are made  solely by the  Company,  except  that the  Trustee  hereby
represents and warrants that each of this Trust Supplement, the Basic Agreement,
each Applicable Certificate, the Intercreditor Agreement, the NPA and the Escrow
Agreement  has been  executed  and  delivered by one of its officers who is duly
authorized to execute and deliver such document on its behalf.

            (b)  Except as herein  otherwise  provided  and  except  during  the
continuance  of an Event of Default in respect of the  Applicable  Trust created
hereby,  no duties,  responsibilities  or liabilities  are assumed,  or shall be
construed to be assumed, by the Trustee by reason of this Trust Supplement other
than as set forth in the  Agreement,  and this Trust  Supplement is executed and
accepted on behalf of the Trustee,  subject to all the terms and  conditions set
forth in the  Agreement,  as fully to all intents as if the same were herein set
forth at length.

          Section  5.04.  REPRESENTATIONS  AND  WARRANTIES  OF THE TRUSTEE.  The
Trustee hereby represents and warrants that:

            (a) the  Trustee  has  full  power,  authority  and  legal  right to
      execute, deliver and perform this Trust Supplement,  the Escrow Agreement,



      the NPA and the Note  Documents to which it is or is to become a party and
      has taken all necessary  action to authorize the  execution,  delivery and
      performance by it of this Trust Supplement,  the Escrow Agreement, the NPA
      and the Note Documents to which it is or is to become a party;

            (b) the execution,  delivery and  performance by the Trustee of this
      Trust Supplement,  the Escrow Agreement and the Note Documents to which it
      is a party (i) will not violate any provision of any United States federal
      law or the law of the  state of the  United  States  where  it is  located
      governing the banking and trust powers of the Trustee or any order,  writ,
      judgment,  or decree of any court,  arbitrator or  governmental  authority
      applicable to the Trustee or any of its assets,  (ii) will not violate any
      provision of the articles of  association  or by-laws of the Trustee,  and
      (iii) will not violate any  provision of, or  constitute,  with or without
      notice or lapse of time,  a default  under,  or result in the  creation or
      imposition of any lien on any  properties  included in the Trust  Property
      pursuant to the provisions of any mortgage, indenture, contract, agreement
      or other undertaking to which it is a party,  which violation,  default or
      lien  could  reasonably  be  expected  to have an  adverse  effect  on the
      Trustee's  performance  or  ability to perform  its  duties  hereunder  or
      thereunder or on the transactions contemplated herein or therein;

            (c) the execution,  delivery and  performance by the Trustee of this
      Trust Supplement,  the Escrow Agreement, the NPA and the Note Documents to
      which it is or is to become a party will not  require  the  authorization,
      consent,  or  approval  of,  the  giving  of  notice  to,  the  filing  or
      registration  with,  or the taking of any other  action in respect of, any
      governmental  authority or agency of the United States or the state of the
      United  States where it is located  regulating  the banking and  corporate
      trust activities of the Trustee; and

            (d) this Trust  Supplement,  the Escrow  Agreement,  the NPA and the
      Note  Documents to which it is or is to become a party have been,  or will
      be,  as  applicable,  duly  executed  and  delivered  by the  Trustee  and
      constitute,  or will  constitute,  as  applicable,  the  legal,  valid and
      binding  agreements of the Trustee,  enforceable  against it in accordance
      with their respective terms; PROVIDED, HOWEVER, that enforceability may be
      limited  by  (i)  applicable   bankruptcy,   insolvency,   reorganization,
      moratorium or similar laws affecting the rights of creditors generally and
      (ii) general principles of equity.

            Section 5.05. TRUSTEE LIENS. The Trustee in its individual  capacity
agrees,  in addition to the  agreements  contained  in Section 7.17 of the Basic
Agreement,  that it will at its own cost and expense promptly take any action as
may be necessary to duly discharge and satisfy in full any Trustee's Liens on or
with respect to the Trust Property which is  attributable  to the Trustee in its
individual  capacity and which is unrelated to the transactions  contemplated by
the Intercreditor Agreement or the NPA.


                                   ARTICLE VI
                  ADDITIONAL AMENDMENT; SUPPLEMENTAL AGREEMENTS

            Section  6.01.  AMENDMENT  OF SECTION  5.02 OF THE BASIC  Agreement.
Section  5.02 of the Basic  Agreement  shall be  amended,  with  respect  to the
Applicable Trust, by (i) replacing the phrase "of the Note Documents and of this
Agreement"  set forth in  paragraph  (b)  thereof  with the  phrase "of the Note
Documents,  of the NPA and of this  Agreement" and (ii) replacing the phrase "of
this Agreement and any Note Document" set forth in the last paragraph of Section
5.02 with the phrase "of this Agreement, the NPA and any Note Document".

            Section 6.02.  SUPPLEMENTAL AGREEMENTS WITHOUT CONSENT OF APPLICABLE
CERTIFICATEHOLDERS.  Without  limitation of Section 9.01 of the Basic Agreement,
under the terms of, and subject to the limitations contained in, Section 9.01 of
the Basic  Agreement,  the Company may (but will not be  required  to),  and the
Trustee (subject to Section 9.03 of the Basic Agreement) shall, at the Company's
request,  at any  time  and  from  time to  time,  (i)  enter  into  one or more
agreements  supplemental  to the  Escrow  Agreement,  the  NPA  or  the  Deposit
Agreement,  for any of the purposes set forth in clauses (1) through (9) of such
Section  9.01,  except that (a) clause (2) and (3) of such Section 9.01 shall be
deemed to include the Company's  obligations  under (in the case of clause (2)),
and the  Company's  rights and powers  conferred by (in the case of clause (3)),
the NPA,  (b)  clause  (4) of such  Section  9.01  shall be  deemed  to  include
corrections or supplements to provisions of the Escrow Agreement, the NPA or the
Deposit  Agreement  which  may be  defective  or  inconsistent  with  any  other
provision of this  Agreement or contained in any  agreement  referred to in such
clause  (4) and the curing of any  ambiguity  or the  modification  of any other
provision  with  respect  to  matters  or  questions  arising  under the  Escrow
Agreement,  the NPA or the Deposit  Agreement and (c)  references in clauses (6)
and (7) of such Section 9.01 to "any  Intercreditor  Agreement or any  Liquidity
Facility"  shall  be  deemed  to  refer  to "the  Intercreditor  Agreement,  the
Liquidity Facility, the Escrow Agreement,  the NPA or the Deposit Agreement" and
(ii) enter into one or more agreements supplemental to this Agreement to provide
for the formation of a Class D Trust, the issuance of Class D Certificates,  the
purchase by the Class D Trust of Equipment  Notes and other  matters  incidental
thereto or otherwise contemplated by Section 2.01(b) of the Basic Agreement.

            Section  6.03.  SUPPLEMENTAL  AGREEMENTS  WITH CONSENT OF APPLICABLE
CERTIFICATEHOLDERS.  Without  limitation of Section 9.02 of the Basic Agreement,
the provisions of Section 9.02 of the Basic  Agreement shall apply to agreements
or  amendments  for the purpose of adding any  provisions  to or changing in any
manner or eliminating any of the provisions of the Escrow Agreement, the Deposit
Agreement   or  the   NPA   to  the   extent   applicable   to  the   Applicable
Certificateholders  approving  such  agreement  or amendment or modifying in any
manner the rights and  obligations of such Applicable  Certificateholders  under
the Escrow  Agreement,  the  Deposit  Agreement  or the NPA;  provided  that the
provisions of Section  9.02(1) of the Basic Agreement shall be deemed to include
reductions  in any manner  of, or delay in the  timing  of,  any  receipt by the
Applicable Certificateholders of payments upon the Deposits.



                                   ARTICLE VII
                              TERMINATION OF TRUST

            Section  7.01.   TERMINATION  OF  THE  APPLICABLE   TRUST.  (a)  The
respective  obligations and responsibilities of the Company and the Trustee with
respect to the  Applicable  Trust  shall  terminate  upon the earlier of (A) the
completion  of the  assignment,  transfer and  discharge  described in the first
sentence of the  immediately  following  paragraph and (B)  distribution  to all
Applicable  Certificateholders  and the  Trustee of all  amounts  required to be
distributed  to them  pursuant  to this  Agreement  and the  disposition  of all
property held as part of the Trust Property; PROVIDED, HOWEVER, that in no event
shall the Applicable Trust continue beyond one hundred ten (110) years following
the date of the execution of this Trust Supplement.

            Upon the earlier of (i) the first  Business Day  following  July 31,
1999,  or, if later,  the fifth  Business  Day  following  the  Delivery  Period
Termination  Date and (ii) the fifth  Business Day following the date on which a
Triggering Event occurs (such date, the "TRANSFER DATE"), or, if later, the date
on which all of the conditions set forth in the immediately  following  sentence
have been  satisfied,  the  Trustee  is  hereby  directed  (subject  only to the
immediately following sentence) to, and the Company shall direct the institution
that will serve as the Related  Trustee  under the Related  Pass  Through  Trust
Agreement  to,  execute and deliver the  Assignment  and  Assumption  Agreement,
pursuant  to which the Trustee  shall  assign,  transfer  and deliver all of the
Trustee's right, title and interest to the Trust Property to the Related Trustee
under the Related  Pass  Through  Trust  Agreement.  The Trustee and the Related
Trustee shall execute and deliver the Assignment  and Assumption  Agreement upon
the satisfaction of the following conditions:

            (i) The Trustee, the Related Trustee and each of the Rating Agencies
      then rating the Applicable  Certificates  shall have received an Officer's
      Certificate and an Opinion of Counsel dated the date of the Assignment and
      Assumption  Agreement and each satisfying the requirements of Section 1.02
      of the Basic Agreement, which Opinion of Counsel shall be substantially to
      the effect set forth below and may be relied upon by the Beneficiaries (as
      defined in the Assignment and Assumption Agreement):

                  (I) upon the  execution  and  delivery  thereof by the parties
            thereto  in  accordance  with the  terms of this  Agreement  and the
            Related Pass Through Trust Agreement,  the Assignment and Assumption
            Agreement will  constitute the valid and binding  obligation of each
            of the  parties  thereto  enforceable  against  each  such  party in
            accordance with its terms;

                  (II) upon the  execution  and delivery of the  Assignment  and
            Assumption  Agreement in accordance with the terms of this Agreement
            and the Related Pass Through Trust Agreement, each of the Applicable
            Certificates  then  Outstanding  will be entitled to the benefits of
            the Related Pass Through Trust Agreement;

                  (III) the Related Trust is not required to be registered as an
            investment  company  under the  Investment  Company Act of 1940,  as
            amended;




                  (IV) the Related Pass Through Trust Agreement  constitutes the
            valid and binding obligation of the Company  enforceable against the
            Company in accordance with its terms; and

                  (V) neither the execution and delivery of the  Assignment  and
            Assumption  Agreement in accordance with the terms of this Agreement
            and the Related Pass Through Trust  Agreement,  nor the consummation
            by the  parties  thereto  of  the  transactions  contemplated  to be
            consummated  thereunder on the date thereof, will violate any law or
            governmental  rule or  regulation  of the  State  of New York or the
            United  States of America  known to such counsel to be applicable to
            the  transactions  contemplated  by the  Assignment  and  Assumption
            Agreement.

            (ii) The Trustee and the Company  shall have  received (x) a copy of
      the articles of incorporation  and bylaws of the Related Trustee certified
      as of the Transfer  Date by the  Secretary or Assistant  Secretary of such
      institution  and  (y) a copy  of the  filing  (including  all  attachments
      thereto) made by the  institution  serving as the Related Trustee with the
      Office of the Superintendent, State of New York Banking Department for the
      qualification  of the Related Trustee under Section 131(3) of the New York
      Banking Law.

Upon the execution of the  Assignment  and  Assumption  Agreement by the parties
thereto,   the   Applicable   Trust   shall  be   terminated,   the   Applicable
Certificateholders  shall receive  beneficial  interests in the Related Trust in
exchange for their interests in the Applicable  Trust equal to their  respective
beneficial  interests in the Applicable  Trust,  and the Outstanding  Applicable
Certificates representing Fractional Undivided Interests in the Applicable Trust
shall be deemed for all purposes of this  Agreement and the Related Pass Through
Trust Agreement,  without further signature or action of any party or Applicable
Certificateholder, to be certificates representing the same fractional undivided
interests in the Related  Trust and its trust  property.  By  acceptance  of its
Applicable  Certificate,  each  Applicable  Certificateholder  consents  to such
assignment,  transfer and  delivery of the Trust  Property to the trustee of the
Related Trust upon the execution and delivery of the  Assignment  and Assumption
Agreement.

            In connection  with the  occurrence of the event set forth in clause
(B) above,  notice of such  termination,  specifying the Distribution  Date upon
which  the  Applicable   Certificateholders   may  surrender  their   Applicable
Certificates  to  the  Trustee  for  payment  of  the  final   distribution  and
cancellation,   shall  be  mailed   promptly  by  the   Trustee  to   Applicable
Certificateholders not earlier than the 60th day and not later than the 15th day
next preceding such final Distribution Date specifying (A) the Distribution Date
upon which the proposed  final payment of the  Applicable  Certificates  will be
made upon presentation and surrender of Applicable Certificates at the office or
agency of the Trustee  therein  specified,  (B) the amount of any such  proposed
final  payment,  and (C) that  the  Record  Date  otherwise  applicable  to such
Distribution Date is not applicable,  payments being made only upon presentation
and  surrender  of the  Applicable  Certificates  at the office or agency of the
Trustee therein  specified.  The Trustee shall give such notice to the Registrar
at the  time  such  notice  is  given  to  Applicable  Certificateholders.  Upon
presentation  and surrender of the Applicable  Certificates  in accordance  with



such  notice,   the  Trustee  shall  cause  to  be   distributed  to  Applicable
Certificateholders such final payments.

            In the event that all of the Applicable Certificateholders shall not
surrender their Applicable Certificates for cancellation within six months after
the date specified in the above-mentioned written notice, the Trustee shall give
a second  written  notice  to the  remaining  Applicable  Certificateholders  to
surrender their  Applicable  Certificates for cancellation and receive the final
distribution  with respect thereto.  No additional  interest shall accrue on the
Applicable  Certificates  after the  Distribution  Date  specified  in the first
written notice.  In the event that any money held by the Trustee for the payment
of distributions on the Applicable  Certificates  shall remain unclaimed for two
years (or such lesser time as the Trustee shall be satisfied,  after sixty days'
notice from the Company, is one month prior to the escheat period provided under
applicable  law) after the final  distribution  date with respect  thereto,  the
Trustee shall pay to each Loan Trustee the appropriate  amount of money relating
to such Loan Trustee and shall give written  notice thereof to the related Owner
Trustees, the Owner Participants and the Company.

            (b) The  provisions  of this Section 7.01  supersede and replace the
provisions of Section 11.01 of the Basic Agreement in its entirety, with respect
to the Applicable Trust.

                                  ARTICLE VIII
                            MISCELLANEOUS PROVISIONS

            Section 8.01. BASIC AGREEMENT RATIFIED.  Except and so far as herein
expressly  provided,  all of the  provisions,  terms and conditions of the Basic
Agreement are in all respects  ratified and confirmed;  and the Basic  Agreement
and this Trust Supplement shall be taken, read and construed as one and the same
instrument.  All  replacements of provisions of, and other  modifications of the
Basic  Agreement set forth in this Trust  Supplement  are solely with respect to
the Applicable Trust.

            SECTION 8.02.  GOVERNING  LAW. THE AGREEMENT AND, UNTIL THE TRANSFER
DATE,  THE  APPLICABLE  CERTIFICATES  SHALL  BE  GOVERNED  BY AND  CONSTRUED  IN
ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE.  THIS SECTION 8.02 SUPERSEDES
AND  REPLACES  SECTION  12.05  OF  THE  BASIC  AGREEMENT,  WITH  RESPECT  TO THE
APPLICABLE TRUST.

          Section 8.03. EXECUTION IN COUNTERPARTS.  This Trust Supplement may be
executed in any number of counterparts,  each of which shall be an original, but
such counterparts shall together constitute but one and the same instrument.

            Section 8.04.  INTENTION OF PARTIES.  The parties hereto intend that
the  Applicable  Trust be classified  for U.S.  federal income tax purposes as a
grantor trust under  Subpart E, Part I of  Subchapter J of the Internal  Revenue
Code of  1986,  as  amended,  and not as a trust  or  association  taxable  as a
corporation or as a partnership. Each Applicable Certificateholder and Investor,



by its  acceptance  of  its  Applicable  Certificate  or a  beneficial  interest
therein,  agrees to treat the  Applicable  Trust as a grantor trust for all U.S.
federal, state and local income tax purposes. The powers granted and obligations
undertaken pursuant to the Agreement shall be so construed so as to further such
intent.



            IN WITNESS  WHEREOF,  the Company  and the Trustee  have caused this
Trust Supplement to be duly executed by their  respective  officers thereto duly
authorized, as of the day and year first written above.

                                          CONTINENTAL AIRLINES, INC.



                                          By:______________________________
                                              Name: Gerald Laderman
                                              Title:  Vice President


                                          WILMINGTON TRUST COMPANY,
                                                as Trustee


                                          By:______________________________
                                              Name:
                                              Title:



                                    EXHIBIT A

                               FORM OF CERTIFICATE

Certificate
No. ____    

            [Unless   this   certificate   is   presented   by   an   authorized
representative of The Depository Trust Company, a New York corporation  ("DTC"),
to Issuer or its agent for  registration of transfer,  exchange or payment,  and
any certificate  issued is registered in the name of Cede & Co. or in such other
name as is requested by an authorized  representative of DTC (and any payment is
made to Cede & Co. or to such  other  entity as is  requested  by an  authorized
representative  of DTC),  ANY TRANSFER,  PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL  inasmuch the registered owner hereof,
Cede & Co., has an interest herein.]

               CONTINENTAL AIRLINES PASS THROUGH TRUST 1998-3A-1-O

     6.82% Continental Airlines Pass Through Certificate, Series 1998-3A-1-O
                         Issuance Date: November 3, 1998

                      Final Maturity Date: November 1, 2019

          Evidencing A Fractional Undivided Interest In The Continental
         Airlines Pass Through Trust 1998-3A-1-O, The Property Of Which
       Includes Certain Equipment Notes Each Secured By An Aircraft Leased
                    To Or Owned By Continental Airlines, Inc.

                         $ Fractional Undivided Interest
          representing .001041667% of the Trust per $1,000 face amount

            THIS CERTIFIES THAT , for value received, is the registered owner of
a $ ( dollars)  Fractional  Undivided Interest in the Continental  Airlines Pass
Through Trust 1998-3A-1-O (the "TRUST") created by Wilmington Trust Company,  as
trustee (the "Trustee"), pursuant to a Pass Through Trust Agreement, dated as of
September 25, 1997 (the "BASIC AGREEMENT"),  between the Trustee and Continental
Airlines, Inc., a Delaware corporation (the "COMPANY"), as supplemented by Trust
Supplement  No.  1998-3A-1-O  thereto,  dated as of November 3, 1998 (the "TRUST
SUPPLEMENT" and, together with the Basic Agreement,  the  "AGREEMENT"),  between

- ----------

This  legend to appear  on  Book-Entry  Certificates  to be  deposited  with the
Depository Trust Company.



the Trustee and the Company, a summary of certain of the pertinent provisions of
which is set forth  below.  To the  extent not  otherwise  defined  herein,  the
capitalized  terms  used  herein  have  the  meanings  assigned  to  them in the
Agreement.   This  Certificate  is  one  of  the  duly  authorized  Certificates
designated  as "6.82%  Continental  Airlines Pass Through  Certificates,  Series
1998-3A-1-O"  (herein  called the  "CERTIFICATES").  This  Certificate is issued
under and is subject to the terms,  provisions  and conditions of the Agreement.
By  virtue  of its  acceptance  hereof,  the  holder  of this  Certificate  (the
"CERTIFICATEHOLDER"  and, together with all other holders of Certificates issued
by the Trust, the "CERTIFICATEHOLDERS") assents to and agrees to be bound by the
provisions of the Agreement and the Intercreditor Agreement. The property of the
Trust includes  certain  Equipment  Notes and all rights of the Trust to receive
payments  under the  Intercreditor  Agreement  and the  Liquidity  Facility (the
"TRUST PROPERTY").  Each issue of the Equipment Notes is secured by, among other
things, a security interest in an Aircraft leased to or owned by the Company.

            The Certificates  represent  Fractional  Undivided  Interests in the
Trust and the Trust Property and have no rights, benefits or interest in respect
of any  other  separate  trust  established  pursuant  to the terms of the Basic
Agreement for any other series of certificates issued pursuant thereto.

            Subject to and in accordance with the terms of the Agreement and the
Intercreditor Agreement, from funds then available to the Trustee, there will be
distributed  on  each  May 1 and  November  1 (a  "REGULAR  DISTRIBUTION  Date")
commencing  May 1,  1999,  to the  Person  in whose  name  this  Certificate  is
registered  at the  close of  business  on the 15th day  preceding  the  Regular
Distribution  Date,  an amount  in  respect  of the  Scheduled  Payments  on the
Equipment Notes due on such Regular  Distribution Date, the receipt of which has
been confirmed by the Trustee,  equal to the product of the percentage  interest
in the Trust  evidenced  by this  Certificate  and an amount equal to the sum of
such  Scheduled  Payments.  Subject to and in  accordance  with the terms of the
Agreement and the Intercreditor Agreement, in the event that Special Payments on
the Equipment  Notes are received by the Trustee,  from funds then  available to
the Trustee,  there shall be distributed on the applicable Special  Distribution
Date, to the Person in whose name this Certificate is registered at the close of
business on the 15th day preceding the Special  Distribution  Date, an amount in
respect of such Special  Payments on the Equipment  Notes,  the receipt of which
has been  confirmed  by the  Trustee,  equal to the  product  of the  percentage
interest in the Trust  evidenced by this  Certificate and an amount equal to the
sum of such Special  Payments so  received.  If a Regular  Distribution  Date or
Special  Distribution Date is not a Business Day,  distribution shall be made on
the immediately following Business Day with the same force and effect as if made
on such Regular  Distribution Date or Special  Distribution Date and no interest
shall accrue  during the  intervening  period.  The Trustee shall mail notice of
each  Special  Payment  and  the  Special  Distribution  Date  therefor  to  the
Certificateholder of this Certificate.

            Distributions  on this  Certificate  will be made by the  Trustee by
check mailed to the Person entitled thereto,  without  presentation or surrender
of this  Certificate  or the making of any  notation  hereon,  except  that with
respect to Certificates  registered on the Record Date in the name of a Clearing
Agency  (or its  nominee),  such  distribution  shall be made by wire  transfer.
Except as otherwise provided in the Agreement and notwithstanding the above, the
final  distribution on this  Certificate will be made after notice mailed by the
Trustee of the  pendency of such  distribution  and only upon  presentation  and



surrender of this  Certificate at the office or agency of the Trustee  specified
in such notice.

            The  Certificates  do not  represent a direct  obligation  of, or an
obligation  guaranteed  by, or an interest in, the Company or the Trustee or any
affiliate thereof. The Certificates are limited in right of payment, all as more
specifically set forth on the face hereof and in the Agreement.  All payments or
distributions made to Certificateholders  under the Agreement shall be made only
from the Trust  Property  and only to the  extent  that the  Trustee  shall have
sufficient  income or proceeds from the Trust  Property to make such payments in
accordance  with the  terms of the  Agreement.  Each  Certificateholder  of this
Certificate,  by its acceptance  hereof,  agrees that it will look solely to the
income  and  proceeds  from the  Trust  Property  to the  extent  available  for
distribution  to such  Certificateholder  as  provided  in the  Agreement.  This
Certificate does not purport to summarize the Agreement and reference is made to
the Agreement for information with respect to the interests,  rights,  benefits,
obligations,  proceeds, and duties evidenced hereby. A copy of the Agreement may
be examined during normal business hours at the principal office of the Trustee,
and  at  such  other  places,  if  any,   designated  by  the  Trustee,  by  any
Certificateholder upon request.

            The Agreement permits, with certain exceptions therein provided, the
amendment  thereof and the  modification  of the rights and  obligations  of the
Company and the rights of the Certificateholders under the Agreement at any time
by the  Company  and the  Trustee  with the  consent  of the  Certificateholders
holding Certificates  evidencing  Fractional Undivided Interests aggregating not
less  than a  majority  in  interest  in the  Trust.  Any  such  consent  by the
Certificateholder  of this  Certificate  shall be conclusive and binding on such
Certificateholder and upon all future Certificateholders of this Certificate and
of any  Certificate  issued upon the transfer hereof or in exchange hereof or in
lieu  hereof  whether  or not  notation  of  such  consent  is  made  upon  this
Certificate.  The  Agreement  also  permits the  amendment  thereof,  in certain
limited  circumstances,  without the consent of the Certificateholders of any of
the Certificates.

            As provided in the Agreement and subject to certain  limitations set
forth therein,  the transfer of this  Certificate is registrable in the Register
upon surrender of this  Certificate for  registration of transfer at the offices
or agencies  maintained by the Trustee in its capacity as  Registrar,  or by any
successor  Registrar,  duly endorsed or accompanied  by a written  instrument of
transfer in form satisfactory to the Trustee and the Registrar, duly executed by
the  Certificateholder   hereof  or  such   Certificateholder's   attorney  duly
authorized in writing,  and thereupon one or more new Certificates of authorized
denominations evidencing the same aggregate Fractional Undivided Interest in the
Trust will be issued to the designated transferee or transferees.

            Under certain  circumstances  set forth in Section 7.01 of the Trust
Supplement, all of the Trustee's right, title and interest to the Trust Property
may be assigned, transferred and delivered to the Related Trustee of the Related
Trust  pursuant  to  the  Assignment   and   Assumption   Agreement.   Upon  the
effectiveness of such Assignment and Assumption Agreement (the "Transfer"),  the
Trust shall be  terminated,  the  Certificateholders  shall  receive  beneficial
interests  in the Related  Trust in exchange  for their  interests  in the Trust
equal to their  respective  beneficial  interests in the Trust, the Certificates
representing Fractional Undivided Interests in the Trust shall be deemed for all



purposes of the  Agreement  and the Related Pass Through  Trust  Agreement to be
certificates representing the same fractional undivided interests in the Related
Trust and its trust property. Each Certificateholder,  by its acceptance of this
Certificate  or a  beneficial  interest  herein,  agrees  to  be  bound  by  the
Assignment and Assumption Agreement and subject to the terms of the Related Pass
Through Trust Agreement as a  Certificateholder  thereunder.  From and after the
Transfer,  unless and to the extent the context otherwise  requires,  references
herein to the Trust, the Agreement and the Trustee shall  constitute  references
to the Related  Trust,  the Related Pass Through Trust  Agreement and trustee of
the Related Trust, respectively.

            The  Certificates  are  issuable  only  as  registered  Certificates
without coupons in minimum denominations of $1,000 Fractional Undivided Interest
and integral  multiples  thereof except that one  Certificate may be issued in a
different  denomination.  As  provided in the  Agreement  and subject to certain
limitations  therein  set  forth,  the  Certificates  are  exchangeable  for new
Certificates   of  authorized   denominations   evidencing  the  same  aggregate
Fractional   Undivided   Interest   in   the   Trust,   as   requested   by  the
Certificateholder surrendering the same.

            No service charge will be made for any such registration of transfer
or exchange,  but the Trustee shall require payment of a sum sufficient to cover
any tax or governmental charge payable in connection therewith.

            Each  Certificateholder  and  Investor,  by its  acceptance  of this
Certificate  or a  beneficial  interest  herein,  agrees to treat the Trust as a
grantor trust for all U.S. federal, state and local income tax purposes.

            The  Trustee,  the  Registrar,  and any agent of the  Trustee or the
Registrar may treat the person in whose name this  Certificate  is registered as
the owner hereof for all purposes,  and neither the Trustee, the Registrar,  nor
any such agent shall be affected by any notice to the contrary.

            The  obligations and  responsibilities  created by the Agreement and
the  Trust  created   thereby  shall   terminate   upon  the   distribution   to
Certificateholders of all amounts required to be distributed to them pursuant to
the  Agreement  and the  disposition  of all property  held as part of the Trust
Property.

            Any Person  acquiring or accepting  this  Certificate or an interest
herein will, by such  acquisition or acceptance,  be deemed to have  represented
and warranted to and for the benefit of each Owner  Participant  and the Company
that  either:  (i) the assets of an employee  benefit plan subject to Title I of
the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), or of
a plan subject to Section 4975 of the Internal  Revenue Code of 1986, as amended
(the  "CODE"),  have not been used to purchase this  Certificate  or an interest
herein or (ii) the  purchase  and  holding of this  Certificate  or an  interest
herein are exempt from the prohibited transaction  restrictions of ERISA and the
Code pursuant to one or more prohibited  transaction statutory or administrative
exemptions.




            THE AGREEMENT AND,  UNTIL THE TRANSFER,  THIS  CERTIFICATE  SHALL BE
GOVERNED BY AND CONSTRUED IN  ACCORDANCE  WITH THE LAWS OF THE STATE OF DELAWARE
AND THE  OBLIGATIONS,  RIGHTS AND  REMEDIES  OF THE PARTIES  HEREUNDER  SHALL BE
DETERMINED  IN  ACCORDANCE  WITH SUCH  LAWS.  THE  RELATED  PASS  THROUGH  TRUST
AGREEMENT AND, FROM AND AFTER THE TRANSFER,  THIS CERTIFICATE  SHALL BE GOVERNED
AND  CONSTRUED  IN  ACCORDANCE  WITH THE  LAWS OF THE  STATE OF NEW YORK AND THE
OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS.

            Unless the certificate of authentication hereon has been executed by
the Trustee, by manual signature,  this Certificate shall not be entitled to any
benefit under the Agreement or be valid for any purpose.

            IN WITNESS  WHEREOF,  the Trustee has caused this  Certificate to be
duly executed.

                                      CONTINENTAL AIRLINES PASS THROUGH TRUST
                                      1998-3A-1-O

                                      By: WILMINGTON TRUST COMPANY,
                                          as Trustee



                                          By:_________________________________
                                              Name:
                                              Title:



             FORM OF THE TRUSTEE'S CERTIFICATE OF AUTHENTICATION

This is one of the Certificates referred to in the within-mentioned Agreement.


                                          WILMINGTON TRUST COMPANY,
                                                as Trustee



                                          By:_________________________________
                                              Name:
                                              Title:



                                    EXHIBIT B

                         [DTC Letter of Representations]



                                    EXHIBIT C

             FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT Continental
                     Airlines Pass Through Trust 1998-3A-1-O

            ASSIGNMENT AND ASSUMPTION AGREEMENT,  dated ____________,  ____ (the
"ASSIGNMENT  AGREEMENT"),  between  Wilmington Trust Company, a Delaware banking
corporation ("WTC"), not in its individual capacity except as expressly provided
herein, but solely as trustee under the Pass Through Trust Agreement dated as of
September  25,  1997 (as  amended  or  modified  from time to time,  the  "BASIC
AGREEMENT"),  as  supplemented  by the Trust  Supplement No.  1998-3A-1-O  dated
November 3, 1998 (the "TRUST  SUPPLEMENT" and together with the Basic Agreement,
the  "AGREEMENT")  in respect of the  Continental  Airlines  Pass Through  Trust
1998-3A-1-O (the "ASSIGNOR"),  and Wilmington Trust Company,  a Delaware banking
corporation, not in its individual capacity except as expressly provided herein,
but solely as trustee  under the Basic  Agreement as  supplemented  by the Trust
Supplement No.  1998-3A-1-S dated November 3, 1998 (the "NEW  SUPPLEMENT",  and,
together  with the Basic  Agreement,  the "NEW  AGREEMENT")  in  respect  of the
Continental Airlines Pass Through Trust 1998-3A-1-S (the "ASSIGNEE").

                              W I T N E S S E T H:

            WHEREAS, the parties hereto desire to effect on the date hereof (the
"TRANSFER  DATE") (a) the transfer by the Assignor to the Assignee of all of the
right,  title and  interest of the Assignor in, under and with respect to, among
other things,  the Trust Property and each of the documents listed in Schedule I
hereto (the "SCHEDULED DOCUMENTS") and (b) the assumption by the Assignee of the
obligations  of the  Assignor  (i) under  the  Scheduled  Documents  and (ii) in
respect of the Applicable Certificates issued under the Agreement; and

            WHEREAS,   the  Scheduled   Documents   permit  such  transfer  upon
satisfaction of certain  conditions  heretofore or  concurrently  herewith being
complied with;

            NOW,  THEREFORE,  in consideration of the premises and of the mutual
covenants and agreements herein contained, the parties hereto do hereby agree as
follows  (capitalized  terms used herein without  definition  having the meaning
ascribed thereto in the Agreement):

            1.  ASSIGNMENT.  The  Assignor  does hereby  sell,  assign,  convey,
transfer  and set over  unto the  Assignee  as of the  Transfer  Date all of its
present and future  right,  title and interest in, under and with respect to the
Trust Property and the Scheduled  Documents and each other contract,  agreement,
document or instrument relating to the Trust Property or the Scheduled Documents
(such other contracts, agreements,  documents or instruments,  together with the
Scheduled  Documents,  to be referred to as the "ASSIGNED  DOCUMENTS"),  and any
proceeds therefrom,  together with all documents and instruments  evidencing any
of such right, title and interest.




            2.  ASSUMPTION.  The Assignee  hereby assumes for the benefit of the
Assignor and each of the parties listed in Schedule II hereto (collectively, the
"BENEFICIARIES")  all of the duties and  obligations  of the Assignor,  whenever
accrued, pursuant to the Assigned Documents and hereby confirms that it shall be
deemed a party to each of the  Assigned  Documents  to which the  Assignor  is a
party and shall be bound by all the terms thereof  (including the agreements and
obligations  of the  Assignor  set forth  therein)  as if  therein  named as the
Assignor.  Further,  the Assignee hereby assumes for the benefit of the Assignor
and the  Beneficiaries  all of the duties and  obligations of the Assignor under
the Outstanding Applicable  Certificates and hereby confirms that the Applicable
Certificates  representing  Fractional  Undivided  Interests under the Agreement
shall be deemed for all purposes of the  Agreement  and the New  Agreement to be
certificates  representing the same fractional undivided interests under the New
Agreement equal to their  respective  beneficial  interests in the trust created
under the Agreement.

            3. EFFECTIVENESS.  This Assignment Agreement shall be effective upon
the execution and delivery  hereof by the parties  hereto,  and each  Applicable
Certificateholder,  by  its  acceptance  of  its  Applicable  Certificate  or  a
beneficial interest therein,  agrees to be bound by the terms of this Assignment
Agreement.

            4. PAYMENTS. The Assignor hereby covenants and agrees to pay over to
the Assignee,  if and when received  following  the Transfer  Date,  any amounts
(including  any sums payable as interest in respect  thereof) paid to or for the
benefit of the Assignor that, under Section 1 hereof, belong to the Assignee.

            5. FURTHER ASSURANCES. The Assignor shall, at any time and from time
to time, upon the request of the Assignee, promptly and duly execute and deliver
any and all such further  instruments and documents and take such further action
as the  Assignee  may  reasonably  request to obtain the full  benefits  of this
Assignment  Agreement and of the right and powers herein  granted.  The Assignor
agrees to deliver any Applicable  Certificates,  and all Trust Property, if any,
then in the physical possession of the Assignor, to the Assignee.

            6.  REPRESENTATIONS AND WARRANTIES.  (a) The Assignee represents and
warrants to the Assignor and each of the Beneficiaries that:

            (i) it has all  requisite  power and  authority  and legal  right to
      enter into and carry out the transactions contemplated hereby and to carry
      out and perform the  obligations  of the "Pass Through  Trustee" under the
      Assigned Documents;

            (ii)  on  and  as  of  the  date  hereof,  the  representations  and
      warranties  of the  Assignee  set  forth  in  Section  7.15  of the  Basic
      Agreement and Section 5.04 of the New Supplement are true and correct.

            (b) The Assignor represents and warrants to the Assignee that:

            (i) it is duly  incorporated,  validly existing and in good standing
      under  the laws of the State of  Delaware  and has the full  trust  power,



      authority  and legal right under the laws of the State of Delaware and the
      United States  pertaining to its trust and fiduciary powers to execute and
      deliver this Assignment Agreement;

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

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

            7. GOVERNING LAW. THIS ASSIGNMENT AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK INCLUDING MATTERS
OF CONSTRUCTION, VALIDITY AND PERFORMANCE.

            8.  COUNTERPARTS.  This Assignment  Agreement may be executed in any
number  of  counterparts,  all of  which  together  shall  constitute  a  single
instrument.  It shall not be necessary  that any  counterpart  be signed by both
parties so long as each party shall sign at least one counterpart.

            9. THIRD PARTY  BENEFICIARIES.  The Assignee hereby agrees,  for the
benefit of the Beneficiaries, that its representations, warranties and covenants
contained  herein are also  intended to be for the benefit of each  Beneficiary,
and each  Beneficiary  shall be deemed to be an express third party  beneficiary
with  respect  thereto,  entitled  to enforce  directly  and in its own name any
rights or claims it may have against such party as such beneficiary.



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

                                          ASSIGNOR:
                                          WILMINGTON TRUST  COMPANY,  not in its
                                            individual    capacity   except   as
                                            expressly   provided   herein,   but
                                            solely  as  trustee  under  the Pass
                                            Through  Trust  Agreement  and Trust
                                            Supplement   in   respect   of   the
                                            Continental  Airlines  Pass  Through
                                            Trust 1998-3A-1-O



                                          By:_________________________________
                                              Title:


                                          ASSIGNEE:
                                          WILMINGTON TRUST  COMPANY,  not in its
                                            individual    capacity   except   as
                                            expressly   provided   herein,   but
                                            solely  as  trustee  under  the Pass
                                            Through  Trust  Agreement  and Trust
                                            Supplement   in   respect   of   the
                                            Continental  Airlines  Pass  Through
                                            Trust 1998-3A-1-S



                                          By:_________________________________
                                              Title:



                                   Schedule I

                         Schedule of Assigned Documents

            (1)  Intercreditor  Agreement dated as of November 3, 1998 among the
Trustee, the Other Trustees,  the Liquidity Provider, the liquidity provider, if
any,  relating to the Certificates  issued under (and as defined in) each of the
Other Agreements and the Subordination Agent.

            (2)  Escrow  and  Paying  Agent  Agreement  (Class  A-1) dated as of
November 3, 1998 among the Escrow Agent, the  Underwriters,  the Trustee and the
Paying Agent.

            (3) Note Purchase  Agreement  dated as of November 3, 1998 among the
Company, the Trustee, the Other Trustees, the Depositary,  the Escrow Agent, the
Paying Agent and the Subordination Agent.

            (4)  Deposit  Agreement  (Class  A-1) dated as of  November  3, 1998
between the Escrow Agent and the Depositary.

            (5)  Each  of  the   Operative   Agreements   (as   defined  in  the
Participation Agreement for each Aircraft) in effect as of the Transfer Date.



                                   Schedule II

                            Schedule of Beneficiaries

Wilmington  Trust  Company,  not  in  its  individual  capacity  but  solely  as
Subordination Agent

Wilmington  Trust Company,  not in its individual  capacity but solely as Paying
Agent

Westdeutsche Landesbank Girozentrale, as Liquidity Provider

Continental Airlines, Inc.

Morgan Stanley & Co. Incorporated, as Underwriter

Credit Suisse First Boston Corporation, as Underwriter

Chase Securities Inc., as Underwriter

Donaldson, Lufkin & Jenrette Securities Corporation, as Underwriter

Salomon Smith Barney Inc., as Underwriter

First Security Bank, National Association, as Escrow Agent

Each of the other parties to the Assigned Documents

                        TRUST SUPPLEMENT No. 1998-3A-1-S

                             Dated November 3, 1998


                                     between

                            WILMINGTON TRUST COMPANY
                                   as Trustee,


                                       and


                           CONTINENTAL AIRLINES, INC.

                                       to

                          PASS THROUGH TRUST AGREEMENT
                         Dated as of September 25, 1997


                                   $96,000,000

               Continental Airlines Pass Through Trust 1998-3A-1-S
                           6.82% Continental Airlines
                           Pass Through Certificates,
                               Series 1998-3A-1-S



            This Trust Supplement No. 1998-3A-1-S,  dated as of November 3, 1998
(herein called the "TRUST SUPPLEMENT"),  between Continental  Airlines,  Inc., a
Delaware  corporation  (the  "COMPANY"),   and  Wilmington  Trust  Company  (the
"TRUSTEE"), to the Pass Through Trust Agreement, dated as of September 25, 1997,
between the Company and the Trustee (the "BASIC AGREEMENT").

                              W I T N E S S E T H:

            WHEREAS,  the  Basic  Agreement,   unlimited  as  to  the  aggregate
principal amount of Certificates (unless otherwise specified herein, capitalized
terms used herein without definition having the respective meanings specified in
the Basic  Agreement)  which  may be  issued  thereunder,  has  heretofore  been
executed and delivered;

            WHEREAS,  the Company has obtained  commitments  from Boeing for the
delivery of certain Aircraft;

            WHEREAS,  as of the Transfer  Date (as defined  below),  the Company
will have financed the  acquisition of all or a portion of such Aircraft  either
(i) through  separate  leveraged lease  transactions,  in which case the Company
leases such  Aircraft  (collectively,  the "LEASED  AIRCRAFT"),  or (ii) through
separate secured loan transactions, in which case the Company owns such Aircraft
(collectively, the "OWNED AIRCRAFT");

            WHEREAS,  as of the  Transfer  Date,  in the  case  of  each  Leased
Aircraft,  each  Owner  Trustee,  acting on behalf  of the  corresponding  Owner
Participant, will have issued pursuant to an Indenture, on a non-recourse basis,
Equipment  Notes in order to  finance a portion  of its  purchase  price of such
Leased Aircraft;

            WHEREAS,  as of  the  Transfer  Date,  in the  case  of  each  Owned
Aircraft,  the Company will have issued pursuant to an Indenture,  on a recourse
basis,  Equipment Notes to finance a portion of the purchase price of such Owned
Aircraft;

            WHEREAS,  as of the Transfer Date, the Related  Trustee will assign,
transfer  and deliver all of such  trustee's  right,  title and  interest to the
trust  property  held by the  Related  Trustee to the  Trustee  pursuant  to the
Assignment and Assumption Agreement (as defined below);

            WHEREAS,  the  Trustee,  effective  only,  but  automatically,  upon
execution  and delivery of the  Assignment  and  Assumption  Agreement,  will be
deemed to have  declared the creation of the  Continental  Airlines Pass Through
Trust  1998-3A-1-S  (the  "APPLICABLE  Trust") for the benefit of the Applicable
Certificateholders, and each Holder of Applicable Certificates outstanding as of
the Transfer Date, as the grantors of the Applicable  Trust, by their respective
acceptances of such Applicable  Certificates,  will join in the creation of this
Applicable Trust with the Trustee;




            WHEREAS, all Applicable Certificates deemed issued by the Applicable
Trust will evidence  fractional  undivided interests in the Applicable Trust and
will convey no rights,  benefits or interests  in respect of any property  other
than the Trust Property  except for those  Applicable  Certificates  to which an
Escrow Receipt (as defined below) has been affixed;

            WHEREAS,  upon the  execution  and  delivery of the  Assignment  and
Assumption Agreement,  all of the conditions and requirements  necessary to make
this Trust Supplement,  when duly executed and delivered,  a valid,  binding and
legal  instrument  in  accordance  with its  terms and for the  purposes  herein
expressed,  have been done,  performed  and  fulfilled,  and the  execution  and
delivery  of this Trust  Supplement  in the form and with the terms  hereof have
been in all respects duly authorized;

            WHEREAS,  this Trust  Supplement is subject to the provisions of the
Trust Indenture Act of 1939, as amended, and shall, to the extent applicable, be
governed by such provisions;

            NOW THEREFORE, in consideration of the premises herein, it is agreed
between the Company and the Trustee as follows:

                                    ARTICLE I
                                THE CERTIFICATES

            Section 1.01. THE CERTIFICATES. The Applicable Certificates shall be
known  as  "6.82%  Continental  Airlines  Pass  Through   Certificates,   Series
1998-3A-1-S".  Each  Applicable  Certificate  represents a fractional  undivided
interest in the Applicable  Trust created  hereby.  The Applicable  Certificates
shall be the only instruments  evidencing a fractional undivided interest in the
Applicable Trust.

            The terms and conditions  applicable to the Applicable  Certificates
are as follows:

            (a) The aggregate  principal  amount of the Applicable  Certificates
      that shall be initially  deemed issued under the Agreement  shall be equal
      to  the  aggregate   principal  amount  of   "Outstanding"   pass  through
      certificates  representing  fractional  undivided interests in the Related
      Trust on the Transfer Date.

            (b) The Regular  Distribution  Dates with  respect to any payment of
      Scheduled Payments means May 1 and November 1 of each year,  commencing on
      May 1, 1999,  until  payment of all of the  Scheduled  Payments to be made
      under the Equipment Notes has been made.

            (c) The Special  Distribution  Dates with respect to the  Applicable
      Certificates  means any Business  Day on which a Special  Payment is to be
      distributed pursuant to the Agreement.




            (d) At the Escrow Agent's  request under the Escrow  Agreement,  the
      Trustee shall affix the  corresponding  Escrow Receipt to each  Applicable
      Certificate.  In any event,  any  transfer or  exchange of any  Applicable
      Certificate shall also effect a transfer or exchange of the related Escrow
      Receipt.  Prior to the Final  Withdrawal  Date, no transfer or exchange of
      any Applicable  Certificate  shall be permitted  unless the  corresponding
      Escrow  Receipt  is  attached  thereto  and  also  is  so  transferred  or
      exchanged.  By acceptance of any Applicable Certificate to which an Escrow
      Receipt  is  attached,  each  Holder  of  such an  Applicable  Certificate
      acknowledges  and  accepts  the  restrictions  on  transfer  of the Escrow
      Receipt set forth herein and in the Escrow Agreement.

            (e) (i) The Applicable Certificates shall be in the form attached as
      Exhibit  A to  the  Related  Pass  Through  Trust  Supplement,  with  such
      appropriate insertions,  omissions,  substitutions and other variations as
      are required or permitted by the Related Pass Through  Trust  Agreement or
      the Agreement, as the case may be, or as the Trustee may deem appropriate,
      to reflect  the fact that the  Applicable  Certificates  are being  issued
      under the  Agreement as opposed to under the Related  Pass  Through  Trust
      Agreement.  Any Person acquiring or accepting an Applicable Certificate or
      an interest therein will, by such acquisition or acceptance,  be deemed to
      represent and warrant to and for the benefit of each Owner Participant and
      the Company that either (i) the assets of an employee benefit plan subject
      to Title I of the Employee  Retirement  Income  Security  Act of 1974,  as
      amended  ("ERISA"),  or of a plan  subject to Section 4975 of the Internal
      Revenue  Code of 1986,  as  amended  (the  "Code"),  have not been used to
      purchase  Applicable  Certificates  or an  interest  therein  or (ii)  the
      purchase and holding of Applicable  Certificates or an interest therein is
      exempt from the prohibited transaction  restrictions of ERISA and the Code
      pursuant to one or more prohibited transaction statutory or administrative
      exemptions.

                  (ii)  The   Applicable   Certificates   shall  be   Book-Entry
      Certificates  and  shall be  subject  to the  conditions  set forth in the
      Letter of  Representations  between the Company  and the  Clearing  Agency
      attached as Exhibit B to the Related Pass Through Trust Supplement.

            (f)  the  "Participation   Agreements"  as  defined  in  this  Trust
      Supplement  are the "Note  Purchase  Agreements"  referred to in the Basic
      Agreement.

            (g) The  Applicable  Certificates  are subject to the  Intercreditor
      Agreement, the Deposit Agreement and the Escrow Agreement.

            (h) The Applicable  Certificates are entitled to the benefits of the
      Liquidity Facility.

            (i)   The Responsible Party is the Company.

            (j) The date referred to in clause (i) of the definition of the term
      "PTC Event of Default" in the Basic Agreement is the Final Maturity Date.




            (k) The particular  "sections of the Note Purchase  Agreement",  for
      purposes of clause (3) of Section 7.07 of the Basic  Agreement are Section
      8.1 (with  respect to Owned  Aircraft)  and Section  9.1 (with  respect to
      Leased Aircraft) of each Participation Agreement.

            (l) The  Equipment  Notes to be acquired and held in the  Applicable
      Trust, and the related  Aircraft and Note Documents,  are described in the
      NPA.

                                   ARTICLE II
                                   DEFINITIONS

            Section 2.01.  DEFINITIONS.  For all purposes of the Basic Agreement
as supplemented by this Trust Supplement,  the following  capitalized terms have
the following meanings (any term used herein which is defined in both this Trust
Supplement and the Basic  Agreement shall have the meaning  assigned  thereto in
this Trust  Supplement for purposes of the Basic  Agreement as  supplemented  by
this Trust Supplement):

           AGREEMENT:  Means the Basic  Agreement, as supplemented by this Trust
     Supplement.

           AIRCRAFT:  Means each of the New Aircraft or  Substitute  Aircraft in
     respect of which a  Participation  Agreement is entered into in  accordance
     with the NPA (or any substitute aircraft, including engines therefor, owned
     by or leased to the Company and securing one or more Equipment Notes).

          APPLICABLE  CERTIFICATE:  Means any of the  "Applicable  Certificates"
     issued by the Related Trust and that are  "Outstanding"  (as defined in the
     Related  Pass  Through  Trust  Agreement)  as of  the  Transfer  Date  (the
     "TRANSFER  DATE  CERTIFICATES")  and any  Certificate  issued  in  exchange
     therefor or replacement thereof pursuant to the Agreement.

          APPLICABLE  CERTIFICATEHOLDER:  Means  the  Person  in  whose  name an
     Applicable  Certificate  is registered  on the Register for the  Applicable
     Certificates.

          APPLICABLE TRUST: Has the meaning specified in the recitals hereto.

          ASSIGNMENT  AND  ASSUMPTION   AGREEMENT:   Means  the  assignment  and
     assumption agreement  substantially in the form of Exhibit C to the Related
     Pass Through Trust  Supplement  executed and  delivered in accordance  with
     Section 7.01 of the Related Trust Supplement.

          BASIC AGREEMENT:  Has the meaning  specified in the first paragraph of
     this Trust Supplement.

          BOEING: Means The Boeing Company.




          BUSINESS DAY:  Means any day other than a Saturday,  a Sunday or a day
     on which  commercial  banks are required or authorized to close in Houston,
     Texas,  New  York,  New  York,  Salt  Lake  City,  Utah or,  so long as any
     Applicable  Certificate  is  Outstanding,  the city and  state in which the
     Trustee  or any Loan  Trustee  maintains  its  Corporate  Trust  Office  or
     receives and disburses funds.

          CLASS  C  CERTIFICATEHOLDER:  Has the  meaning  specified  in  Section
     4.01(b)(iii) of this Trust Supplement.

          CLASS  C  FRACTIONAL  UNDIVIDED  INTEREST:   Means,  at  any  date  of
     computation,  the fractional interest in the relevant Trust held by a Class
     C  Certificateholder  multiplied  by the Pool  Balance  (as  defined in the
     Intercreditor  Agreement) of such Trust and divided by the  aggregate  Pool
     Balances (as defined in the Intercreditor Agreement) of the Class C-1 Trust
     and the Class C-2 Trust, all determined at such date.

          CLASS  D  CERTIFICATEHOLDER:  Has the  meaning  specified  in  Section
     4.01(b)(iv) of this Trust Supplement.

          COMPANY:  Has the meaning  specified  in the first  paragraph  of this
     Trust Supplement.

          CONTROLLING  PARTY:  Has the meaning  specified  in the  Intercreditor
     Agreement.

          DELIVERY NOTICE: Has the meaning specified in the NPA.

          DELIVERY  PERIOD  TERMINATION  DATE: Has the meaning  specified in the
     Related Pass Through Trust Supplement.

          DEPOSITS: Has the meaning specified in the Deposit Agreement.

          DEPOSIT AGREEMENT: Means the Deposit Agreement dated as of November 3,
     1998 relating to the Applicable Certificates between the Depositary and the
     Escrow  Agent,  as the  same  may be  amended,  supplemented  or  otherwise
     modified from time to time in accordance with its terms.

          DEPOSITARY:  Means Credit  Suisse First Boston,  a Swiss bank,  acting
     through its New York branch.

          DISTRIBUTION  DATE:  Means any  Regular  Distribution  Date or Special
     Distribution Date as the context requires.

          ESCROW  AGENT:  Means,   initially,   First  Security  Bank,  National
     Association,  and  any  replacement  or  successor  therefor  appointed  in
     accordance with the Escrow Agreement.

          ESCROW AGREEMENT: Means the Escrow and Paying Agent Agreement dated as
     of November  3, 1998  relating to the  Applicable  Certificates,  among the



     Escrow Agent,  the Escrow Paying Agent,  the Related Trustee (and after the
     Transfer  Date,  the  Trustee)  and the  Underwriters,  as the  same may be
     amended, supplemented or otherwise modified from time to time in accordance
     with its terms.

          ESCROW PAYING AGENT: Means the Person acting as paying agent under the
     Escrow Agreement.

          ESCROW RECEIPT: Means the receipt substantially in the form annexed to
     the Escrow Agreement  representing a fractional  undivided  interest in the
     funds held in escrow thereunder.

          FINAL MATURITY DATE: Means November 1, 2019.

          FINAL WITHDRAWAL: Has the meaning specified in the Escrow Agreement.

          FINAL  WITHDRAWAL  DATE:  Has  the  meaning  specified  in the  Escrow
     Agreement.

          INDENTURE:  Means each of the separate trust  indentures and mortgages
     relating to the  Aircraft,  each as  specified  or  described in a Delivery
     Notice  delivered  pursuant  to  the  NPA  or  the  related   Participation
     Agreement,  in each  case  as the  same  may be  amended,  supplemented  or
     otherwise modified from time to time in accordance with its terms.

          INTERCREDITOR AGREEMENT: Means the Intercreditor Agreement dated as of
     November 3, 1998 among the Related  Trustee (and after the  Transfer  Date,
     the Trustee),  the Related Other Trustees (and after the Transfer Date, the
     Other Trustees),  the Liquidity Provider,  the liquidity providers relating
     to the  Certificates  issued  under (and as defined in) each of the Related
     Other Agreements,  and Wilmington Trust Company, as Subordination Agent and
     as trustee thereunder, as amended,  supplemented or otherwise modified from
     time to time in accordance with its terms.

          INVESTORS:   Means  the  Underwriters  together  with  all  subsequent
     beneficial owners of the Applicable Certificates.

          LEASE: Means, with respect to each Leased Aircraft,  the lease between
     an Owner Trustee, as the lessor, and the Company,  as the lessee,  referred
     to in the related Indenture, as such lease may be amended,  supplemented or
     otherwise modified in accordance with its terms.

          LEASED  AIRCRAFT:  Has the meaning  specified in the third  recital to
     this Trust Supplement.

          LEASED  AIRCRAFT   INDENTURE:   Has  the  meaning   specified  in  the
     Intercreditor Agreement.

          LIQUIDITY FACILITY:  Means, initially,  the Revolving Credit Agreement
     dated as of  November  3, 1998  relating  to the  Applicable  Certificates,
     between  the  Liquidity   Provider  and  Wilmington   Trust   Company,   as



     Subordination  Agent,  as agent and trustee for the Applicable  Trust,  and
     from  and  after  the  replacement  of  such  agreement   pursuant  to  the
     Intercreditor  Agreement,  the replacement  liquidity facility therefor, in
     each case as amended,  supplemented or otherwise modified from time to time
     in accordance with their respective terms.

          LIQUIDITY  PROVIDER:   Means,   initially,   Westdeutsche   Landesbank
     Girozentrale, a German public law banking institution, and any replacements
     or  successors  therefor  appointed in  accordance  with the  Intercreditor
     Agreement.

          NEW AIRCRAFT: Has the meaning specified in the NPA.

          NOTE  DOCUMENTS:  Means  the  Equipment  Notes  with  respect  to  the
     Applicable  Certificates  and, with respect to any such Equipment Note, (i)
     the Indenture and the  Participation  Agreement  relating to such Equipment
     Note,  and  (ii) in the  case of any  Equipment  Note  related  to a Leased
     Aircraft, the Lease relating to such Leased Aircraft.

          NPA:  Means the Note Purchase  Agreement  dated as of November 3, 1998
     among the Related  Trustee (and after the Transfer Date, the Trustee),  the
     Related Other Trustees (and after the Transfer  Date, the Other  Trustees),
     the  Company,   the  Escrow   Agent,   the  Escrow  Paying  Agent  and  the
     Subordination Agent, as the same may be amended,  supplemented or otherwise
     modified from time to time, in accordance with its terms.

          OTHER  AGREEMENTS:  Means (i) the Basic  Agreement as  supplemented by
     Trust  Supplement  No.  1998-3A-2-S  dated  the  date  hereof  relating  to
     Continental  Airlines  Pass  Through  Trust  1998-3A-2-S,  (ii)  the  Basic
     Agreement as supplemented by Trust  Supplement No. 1998-3B-S dated the date
     hereof relating to Continental Airlines Pass Through Trust 1998-3B-S, (iii)
     the Basic  Agreement as supplemented  by Trust  Supplement No.  1998-3C-1-S
     dated the date hereof  relating to Continental  Airlines Pass Through Trust
     1998-3C-1-S   and  (iv)  the  Basic  Agreement  as  supplemented  by  Trust
     Supplement No.  1998-3C-2-S  dated the date hereof  relating to Continental
     Airlines Pass Through Trust 1998-3C-2-S.

          OTHER TRUSTEES: Means the trustees under the Other Agreements, and any
     successor or other trustee appointed as provided therein.

          OTHER  TRUSTS:  Means the  Continental  Airlines  Pass  Through  Trust
     1998-3A-2-S,  the Continental  Airlines Pass Through Trust  1998-3B-S,  the
     Continental  Airlines Pass Through Trust  1998-3C-1-S  and the  Continental
     Airlines Pass Through Trust 1998-3C-2-S, created by the Other Agreements.

          OUTSTANDING: When used with respect to Applicable Certificates, means,
     as of the date of determination,  all Transfer Date  Certificates,  and all
     other Applicable Certificates theretofore authenticated and delivered under
     this Agreement, in each case except:

               (i) Applicable Certificates theretofore canceled by the Registrar
          or delivered to the Trustee or the Registrar for cancellation;




               (ii) Applicable  Certificates  for which money in the full amount
          required  to  make  the  final   distribution  with  respect  to  such
          Applicable  Certificates  pursuant  to  Section  11.01  of  the  Basic
          Agreement has been theretofore deposited with the Trustee in trust for
          the Applicable  Certificateholders  as provided in Section 4.01 of the
          Basic Agreement pending  distribution of such money to such Applicable
          Certificateholders pursuant to payment of such final distribution; and

               (iii) Applicable Certificates in exchange for or in lieu of which
          other Applicable  Certificates  have been  authenticated and delivered
          pursuant to this Agreement.

          OWNED AIRCRAFT: Has the meaning specified in the third recital to this
     Trust Supplement.

          OWNED   AIRCRAFT   INDENTURE:   Has  the  meaning   specified  in  the
     Intercreditor Agreement.

          OWNER  PARTICIPANT:  With respect to any Equipment  Note relating to a
     Leased  Aircraft,  means the  "Owner  Participant"  as  referred  to in the
     Indenture pursuant to which such Equipment Note is issued and any permitted
     successor or assign of such Owner  Participant;  and OWNER  PARTICIPANTS at
     any time of determination means all of the Owner Participants thus referred
     to in the Indentures.

          OWNER TRUSTEE: With respect to any Equipment Note relating to a Leased
     Aircraft,  means the  "Owner  Trustee",  as  referred  to in the  Indenture
     pursuant  to which such  Equipment  Note is issued,  not in its  individual
     capacity but solely as trustee;  and OWNER  TRUSTEES means all of the Owner
     Trustees party to any of the Indentures.

          OWNER TRUSTEE'S PURCHASE AGREEMENT:  Means, with respect to any Leased
     Aircraft,  the agreement between the Company and the relevant Owner Trustee
     pursuant to which,  INTER ALIA,  the Company  assigns to the Owner  Trustee
     certain  rights of the Company under the aircraft  purchase  agreement with
     respect to such Leased Aircraft.

          PARTICIPATION  AGREEMENT:  Means each Participation  Agreement entered
     into by the  Trustee  pursuant  to the NPA,  as the  same  may be  amended,
     supplemented or otherwise modified in accordance with its terms.

          POOL BALANCE:  Means, as of any date, (i) the original  aggregate face
     amount of the  "Applicable  Certificates"  as defined in the  Related  Pass
     Through Trust  Agreement,  less (ii) the  aggregate  amount of all payments
     made in respect of such  Certificates  or in respect of Deposits other than
     payments made in respect of interest or premium thereon or reimbursement of
     any costs or expenses incurred in connection therewith. The Pool Balance as
     of any  Distribution  Date shall be  computed  after  giving  effect to any
     special distribution with respect to unused Deposits,  payment of principal
     of the Equipment  Notes or payment with respect to other Trust Property and
     the distribution thereof to be made on that date.




            POOL  FACTOR:  Means,  as of any  Distribution  Date,  the  quotient
      (rounded to the seventh  decimal place)  computed by dividing (i) the Pool
      Balance by (ii) the  original  aggregate  face  amount of the  "Applicable
      Certificates" as defined in the Related Pass Through Trust Agreement.  The
      Pool Factor as of any  Distribution  Date shall be computed  after  giving
      effect to any  special  distribution  with  respect  to  unused  Deposits,
      payment of principal of the  Equipment  Notes or payments  with respect to
      other Trust Property and the distribution thereof to be made on that date.

          PROSPECTUS  SUPPLEMENT:  Means the Prospectus Supplement dated October
     21, 1998 relating to the offering of the Certificates.

          RELATED  OTHER  PASS  THROUGH  TRUST  AGREEMENTS:   Means  the  "Other
     Agreements" as defined in the Related Pass Through Trust Agreement.

          RELATED OTHER TRUSTEES:  Means the "Other  Trustees" as defined in the
     Related Pass Through Trust Agreement.

          RELATED  OTHER  TRUSTS:  Means the  "Other  Trusts"  as defined in the
     Related Pass Through Trust Agreement.

          RELATED PASS THROUGH  TRUST  AGREEMENT:  Means the Basic  Agreement as
     supplemented by the Trust Supplement No.  1998-3A-1-O dated the date hereof
     (the "RELATED PASS THROUGH TRUST SUPPLEMENT"),  relating to the Continental
     Airlines Pass Through Trust 1998-3A-1-O and entered into by the Company and
     the Trustee,  as amended,  supplemented or otherwise  modified from time to
     time in accordance with its terms.

          RELATED TRUST:  Means the Continental Pass Through Trust  1998-3A-1-O,
     formed under the Related Pass Through Trust Agreement.

          RELATED  TRUSTEE:  Means the trustee  under the Related  Pass  Through
     Trust Agreement.

            SPECIAL PAYMENT:  Means any payment (other than a Scheduled Payment)
      in respect of, or any proceeds of, any  Equipment  Note,  Trust  Indenture
      Estate (as defined in each Leased  Aircraft  Indenture) or Collateral  (as
      defined in each Owned Aircraft Indenture).

            SUBSTITUTE AIRCRAFT:  Has the meaning specified in the NPA.

          TRANSFER  DATE:  Means the moment of  execution  and  delivery  of the
     Assignment and Assumption Agreement by each of the parties thereto.

          TRANSFER  DATE   CERTIFICATES:   Has  the  meaning  specified  in  the
     definition of "Applicable Certificates".




          TRIGGERING  EVENT:  Has  the  meaning  assigned  to  such  term in the
     Intercreditor Agreement.

          TRUST PROPERTY:  Means (i) subject to the Intercreditor Agreement, the
     Equipment Notes held as the property of the Applicable Trust, all monies at
     any time paid thereon and all monies due and to become due thereunder, (ii)
     funds  from  time to time  deposited  in the  Certificate  Account  and the
     Special Payments Account and, subject to the Intercreditor  Agreement,  any
     proceeds  from the sale by the Trustee  pursuant to Article VI of the Basic
     Agreement  of any  Equipment  Note and (iii) all  rights of the  Applicable
     Trust  and the  Trustee,  on  behalf  of the  Applicable  Trust,  under the
     Intercreditor  Agreement,  the Escrow Agreement,  the NPA and the Liquidity
     Facility,  including,  without  limitation,  all rights to receive  certain
     payments  thereunder,  and all monies  paid to the Trustee on behalf of the
     Applicable Trust pursuant to the  Intercreditor  Agreement or the Liquidity
     Facility,  PROVIDED  that rights with  respect to the Deposits or under the
     Escrow Agreement will not constitute Trust Property.

          TRUST SUPPLEMENT:  Has the meaning specified in the first paragraph of
     this trust supplement.

          UNDERWRITERS:  Means, collectively, Morgan Stanley & Co. Incorporated,
     Credit Suisse First Boston Corporation,  Chase Securities Inc.,  Donaldson,
     Lufkin & Jenrette Securities Corporation and Salomon Smith Barney Inc.

          UNDERWRITING AGREEMENT: Means the Underwriting Agreement dated October
     21, 1998 among the  Underwriters,  the Company and the  Depositary,  as the
     same may be amended,  supplemented or otherwise  modified from time to time
     in accordance with its terms.

                                   ARTICLE III
                        STATEMENTS TO CERTIFICATEHOLDERS

            Section 3.01.  STATEMENTS TO APPLICABLE  CERTIFICATEHOLDERS.  (a) On
each  Distribution  Date,  the Trustee will include  with each  distribution  to
Applicable  Certificateholders of a Scheduled Payment or Special Payment, as the
case may be, a statement  setting forth the  information  provided below (in the
case of a Special  Payment,  reflecting in part the information  provided by the
Escrow Paying Agent under the Escrow Agreement).  Such statement shall set forth
(per $1,000 face amount  Applicable  Certificate as to (ii), (iii), (iv) and (v)
below) the following information:

          (i) the aggregate  amount of funds  distributed  on such  Distribution
     Date under the Agreement  and under the Escrow  Agreement,  indicating  the
     amount allocable to each source;




          (ii) the amount of such distribution under the Agreement  allocable to
     principal and the amount allocable to premium, if any;

          (iii) the amount of such distribution under the Agreement allocable to
     interest;

          (iv) the  amount  of such  distribution  under  the  Escrow  Agreement
     allocable to interest;

          (v) the  amount  of  such  distribution  under  the  Escrow  Agreement
     allocable to unused Deposits, if any; and

          (vi) the Pool Balance and the Pool Factor.

            With respect to the Applicable  Certificates  registered in the name
of a Clearing Agency,  on the Record Date prior to each  Distribution  Date, the
Trustee will request from such  Clearing  Agency a securities  position  listing
setting forth the names of all Clearing  Agency  Participants  reflected on such
Clearing Agency's books as holding  interests in the Applicable  Certificates on
such Record Date. On each Distribution  Date, the Trustee will mail to each such
Clearing  Agency  Participant  the  statement  described  above  and  will  make
available additional copies as requested by such Clearing Agency Participant for
forwarding to holders of interests in the Applicable Certificates.

            (b)  Within  a  reasonable  period  of  time  after  the end of each
calendar  year but not later than the latest date  permitted by law, the Trustee
shall  furnish to each Person who at any time during such  calendar  year was an
Applicable  Certificateholder  of record a statement  containing  the sum of the
amounts determined pursuant to clauses (a)(i),  (a)(ii),  (a)(iii),  (a)(iv) and
(a)(v)  above  for such  calendar  year or,  in the  event  such  Person  was an
Applicable  Certificateholder  of record during a portion of such calendar year,
for such portion of such year, and such other items as are readily  available to
the Trustee and which an Applicable  Certificateholder  shall reasonably request
as necessary for the purpose of such Applicable Certificateholder's  preparation
of its federal income tax returns.  Such statement and such other items shall be
prepared on the basis of  information  supplied  to the Trustee by the  Clearing
Agency  Participants  and shall be  delivered  by the  Trustee to such  Clearing
Agency  Participants  to be available for  forwarding  by such  Clearing  Agency
Participants  to the holders of interests in the Applicable  Certificates in the
manner described in Section 3.02(a) of this Trust Supplement.

            (c) If the aggregate  principal  payments scheduled for May 1, 1999,
on the Equipment Notes held as Trust Property as of April 9, 1999,  differs from
the amount thereof set forth for the Applicable Certificates on page S-34 of the
Prospectus  Supplement,  by no later than April 15, 1999 the Trustee  shall mail
written notice of the actual amount of such scheduled payments to the Applicable
Certificateholders  of record as of a date within 10 Business  Days prior to the
date of mailing.

            (d) Promptly  following (i) the Delivery Period Termination Date, if
there has been any change in the  information  set forth in clauses (x), (y) and
(z) below  from that set forth in page S-34 of the  Prospectus  Supplement,  and



(ii) any early  redemption  or  purchase  of, or any  default in the  payment of
principal  or  interest in respect  of, any of the  Equipment  Notes held in the
Applicable Trust, or any Final  Withdrawal,  the Trustee (if the Related Trustee
has not  already  done so) shall  furnish to  Applicable  Certificateholders  of
record on such date a statement setting forth (x) the expected Pool Balances for
each  subsequent  Regular   Distribution  Date  following  the  Delivery  Period
Termination  Date,  (y) the related Pool  Factors for such Regular  Distribution
Dates and (z) the  expected  principal  distribution  schedule of the  Equipment
Notes, in the aggregate, held as Trust Property at the date of such notice. With
respect  to the  Applicable  Certificates  registered  in the name of a Clearing
Agency,  on the  Transfer  Date,  the Trustee  (if the  Related  Trustee has not
already done so) will request from such  Clearing  Agency a securities  position
listing setting forth the names of all Clearing Agency Participants reflected on
such  Clearing   Agency's  books  as  holding   interests  in  the   "Applicable
Certificates"  (as defined in the Related Pass Through  Trust  Agreement) on the
Delivery  Period  Termination  Date. The Trustee (if the Related Trustee has not
already  done  so)  will  mail to each  such  Clearing  Agency  Participant  the
statement described above and will make available additional copies as requested
by such Clearing  Agency  Participant  for forwarding to holders of interests in
the Applicable Certificates.

            (e) This Section 3.01  supersedes  and replaces  Section 4.03 of the
Basic Agreement, with respect to the Applicable Trust.

                                   ARTICLE IV
                                     DEFAULT

            Section 4.01. PURCHASE RIGHTS OF CERTIFICATEHOLDERS. (a) At any time
after the occurrence and during the  continuance of a Triggering  Event,  if the
Class   A-2   Trustee   is  then  the   Controlling   Party,   each   Applicable
Certificateholder  shall have the right to purchase,  for the purchase price set
forth in the Class A-2 Trust Agreement, all, but not less than all, of the Class
A-2 Certificates upon ten days' written notice to the Class A-2 Trustee and each
other  Applicable  Certificateholder,  PROVIDED  that (i) if prior to the end of
such  ten-day  period  any  other  Applicable  Certificateholder  notifies  such
purchasing   Applicable    Certificateholder    that   such   other   Applicable
Certificateholder  wants  to  participate  in such  purchase,  then  such  other
Applicable   Certificateholder   may  join   with  the   purchasing   Applicable
Certificateholder  to  purchase  all,  but not less than  all,  of the Class A-2
Certificates  pro  rata  based  on  the  Fractional  Undivided  Interest  in the
Applicable  Trust  held by each such  Applicable  Certificateholder  and (ii) if
prior to the end of such ten-day period any other  Applicable  Certificateholder
fails to  notify  the  purchasing  Applicable  Certificateholder  of such  other
Applicable  Certificateholder's  desire to participate in such a purchase,  then
such other  Applicable  Certificateholder  shall lose its right to purchase  the
Class A-2 Certificates pursuant to this Section 4.01(a).

            (b) By acceptance of its  Applicable  Certificate,  each  Applicable
Certificateholder  agrees that at any time after the  occurrence  and during the
continuation of a Triggering Event,




            (i) if the  Trustee is then the  Controlling  Party,  each Class A-2
      Certificateholder  shall have the right to purchase all, but not less than
      all, of the Applicable  Certificates  upon ten days' written notice to the
      Trustee and each other Class A-2  Certificateholder,  PROVIDED that (A) if
      prior  to  the  end  of  such   ten-day   period   any  other   Class  A-2
      Certificateholder  notifies such  purchasing  Class A-2  Certificateholder
      that such other Class A-2  Certificateholder  wants to participate in such
      purchase,  then such other Class A-2  Certificateholder  may join with the
      purchasing Class A-2  Certificateholder to purchase all, but not less than
      all,  of the  Applicable  Certificates  pro rata  based on the  Fractional
      Undivided  Interest  in the Class A-2  Trust  held by each such  Class A-2
      Certificateholder  and (B) if prior to the end of such ten-day  period any
      other Class A-2 Certificateholder fails to notify the purchasing Class A-2
      Certificateholder  of such other Class A-2  Certificateholder's  desire to
      participate   in   such  a   purchase,   then   such   other   Class   A-2
      Certificateholder   shall  lose  its  right  to  purchase  the  Applicable
      Certificates pursuant to this Section 4.01(b);

            (ii) each  Class B  Certificateholder  shall  have the right  (which
      shall not expire upon any purchase of certificates  pursuant to clause (a)
      or (b)(i) above) to purchase all, but not less than all, of the Applicable
      Certificates and the Class A-2 Certificates  upon ten days' written notice
      to  the   Trustee,   the  Class  A-2   Trustee  and  each  other  Class  B
      Certificateholder,  PROVIDED  that (A) if prior to the end of such ten-day
      period any other Class B Certificateholder  notifies such purchasing Class
      B  Certificateholder  that such other Class B  Certificateholder  wants to
      participate  in such purchase,  then such other Class B  Certificateholder
      may join with the purchasing  Class B  Certificateholder  to purchase all,
      but not less than all, of the  Applicable  Certificates  and the Class A-2
      Certificates  pro rata based on the Fractional  Undivided  Interest in the
      Class B Trust held by each such Class B Certificateholder and (B) if prior
      to the end of such  ten-day  period  any other  Class B  Certificateholder
      fails to notify the  purchasing  Class B  Certificateholder  of such other
      Class B Certificateholder's desire to participate in such a purchase, then
      such other Class B Certificateholder  shall lose its right to purchase the
      Applicable  Certificates and the Class A-2  Certificates  pursuant to this
      Section 4.01(b);

            (iii)   each   Class   C-1    Certificateholder    and   Class   C-2
      Certificateholder  (each a "CLASS  C  CERTIFICATEHOLDER")  shall  have the
      right (which shall not expire upon any purchase of  certificates  pursuant
      to clause (a), (b)(i) or (b)(ii) above) to purchase all, but not less than
      all, of the Applicable  Certificates,  the Class A-2  Certificates and the
      Class B  Certificates  upon ten days' written  notice to the Trustee,  the
      Class A-2 Trustee,  the Class B Trustee and (x) if such purchasing Class C
      Certificateholder is a Class C-1  Certificateholder,  each other Class C-1
      Certificateholder  and either (I) if the Class C-2 Trustee shall have made
      a  current  list  of  Class  C-2  Certificateholders   available  to  such
      purchasing Class C Certificateholder  upon a request therefor,  each Class
      C-2 Certificateholder,  or (II) if clause (I) is not applicable, the Class
      C-2 Trustee,  or (y) if such  purchasing  Class C  Certificateholder  is a
      Class C-2  Certificateholder,  each other Class C-2  Certificateholder and
      either  (I) if the Class C-1  Trustee  shall  have made a current  list of
      Class  C-1  Certificateholders   available  to  such  purchasing  Class  C
      Certificateholder    upon   a   request    therefor,    each   Class   C-1
      Certificateholder,  or (II) if clause (I) is not applicable, the Class C-1



      Trustee,  PROVIDED that (A) if prior to the end of such ten-day period any
      other  Class  C   Certificateholder   notifies  such  purchasing  Class  C
      Certificateholder  that  such  other  Class C  Certificateholder  wants to
      participate  in such purchase,  then such other Class C  Certificateholder
      may join with the purchasing  Class C  Certificateholder  to purchase all,
      but not less  than  all,  of the  Applicable  Certificates,  the Class A-2
      Certificates  and the Class B  Certificates  pro rata based on the Class C
      Fractional  Undivided Interest held by each such Class C Certificateholder
      and (B) if prior  to the end of such  ten-day  period  any  other  Class C
      Certificateholder fails to notify the purchasing Class C Certificateholder
      of such other Class C Certificateholder's  desire to participate in such a
      purchase,  then such other Class C Certificateholder  shall lose its right
      to purchase the Applicable  Certificates,  the Class A-2  Certificates and
      the Class B Certificates pursuant to this Section 4.01(b); and

            (iv)   each   holder   of  a  Class  D   Certificate   (a  "CLASS  D
      CERTIFICATEHOLDER")  shall have the right (which shall not expire upon any
      purchase  of  certificates  pursuant  to clause  (a),  (b)(i),  (b)(ii) or
      (b)(iii)  above) to purchase all, but not less than all, of the Applicable
      Certificates,  the Class A-2 Certificates,  the Class B Certificates,  the
      Class  C-1  Certificates  and the Class  C-2  Certificates  upon ten days'
      written notice to the Trustee, the Class A-2 Trustee, the Class B Trustee,
      the  Class C-1  Trustee,  the Class C-2  Trustee  and each  other  Class D
      Certificateholder,  PROVIDED  that (A) if prior to the end of such ten-day
      period any other Class D Certificateholder  notifies such purchasing Class
      D  Certificateholder  that such other Class D  Certificateholder  wants to
      participate  in such purchase,  then such other Class D  Certificateholder
      may join with the purchasing  Class D  Certificateholder  to purchase all,
      but not less  than  all,  of the  Applicable  Certificates,  the Class A-2
      Certificates, the Class B Certificates, the Class C-1 Certificates and the
      Class C-2 Certificates pro rata based on the Fractional Undivided Interest
      in the Class D Trust held by each such Class D  Certificateholder  and (B)
      if  prior  to  the  end  of  such   ten-day   period  any  other  Class  D
      Certificateholder fails to notify the purchasing Class D Certificateholder
      of such other Class D Certificateholder's  desire to participate in such a
      purchase,  then such other Class D Certificateholder  shall lose its right
      to purchase the Applicable Certificates,  the Class A-2 Certificates,  the
      Class B  Certificates,  the  Class  C-1  Certificates  and the  Class  C-2
      Certificates pursuant to this Section 4.01(b).

            The purchase price with respect to the Applicable Certificates shall
be equal to the Pool  Balance  of the  Applicable  Certificates,  together  with
accrued  and  unpaid  interest  thereon  to the date of such  purchase,  without
premium,  but including any other amounts then due and payable to the Applicable
Certificateholders under this Agreement, the Intercreditor Agreement, the Escrow
Agreement  or  any  Note  Document  or  on  or  in  respect  of  the  Applicable
Certificates; PROVIDED, HOWEVER, that (x) if such purchase occurs after a record
date  specified  in  Section  2.03  of  the  Escrow  Agreement  relating  to the
distribution  of unused  Deposits and/or accrued and unpaid interest on Deposits
and prior to or on the related distribution date thereunder, such purchase price
shall be reduced by the aggregate  amount of unused  Deposits and/or interest to
be distributed  under the Escrow  Agreement (which deducted amounts shall remain
distributable to, and may be retained by, the Applicable Certificateholder as of
such record date) and (y) if such purchase  occurs after a Record Date and prior
to or on the related  Distribution Date, such purchase price shall be reduced by



the amount to be distributed  under this  Agreement on the related  Distribution
Date (which deducted amounts shall remain  distributable to, and may be retained
by, the Applicable  Certificateholder as of such Record Date);  PROVIDED FURTHER
that no such purchase of Applicable  Certificates  shall be effective unless the
purchaser(s)  shall  certify to the  Trustee  that  contemporaneously  with such
purchase,  such purchaser(s) is (are) purchasing,  pursuant to the terms of this
Agreement  and the  Other  Agreements,  (A) in the case of any  purchase  of the
Applicable  Certificates  pursuant to clause (b)(i) above, all of the Applicable
Certificates, or (B) in all other cases, the Applicable Certificates,  the Class
A-2 Certificates,  the Class B Certificates,  the Class C-1 Certificates and the
Class  C-2  Certificates  which  are  senior  to the  securities  held  by  such
purchaser(s).  Each payment of the purchase price of the Applicable Certificates
referred to in the first sentence hereof shall be made to an account or accounts
designated by the Trustee and each such  purchase  shall be subject to the terms
of  this  Section  4.01(b).  Each  Applicable  Certificateholder  agrees  by its
acceptance of its Applicable  Certificate that (at any time after the occurrence
and during the  continuance  of a Triggering  Event) it will,  upon payment from
such  Class  A-2  Certificateholder(s),  Class B  Certificateholder(s),  Class C
Certificateholder(s) or Class D Certificateholder(s), as the case may be, of the
purchase  price set forth in the first  sentence  of this  paragraph,  forthwith
sell, assign, transfer and convey to the purchaser(s) thereof (without recourse,
representation  or  warranty  of any kind  except for its own acts),  all of the
right, title,  interest and obligation of such Applicable  Certificateholder  in
this Agreement,  the Escrow Agreement,  the Deposit Agreement, the Intercreditor
Agreement,  the  Liquidity  Facility,  the  Note  Documents,  the  NPA  and  all
Applicable   Certificates   and  Escrow   Receipts   held  by  such   Applicable
Certificateholder  (subject to clauses (x) and (y) in the first sentence of this
paragraph and excluding all right, title and interest under any of the foregoing
to the extent such right, title or interest is with respect to an obligation not
then due and  payable as  respects  any action or  inaction  or state of affairs
occurring  prior  to such  sale)  and the  purchaser  shall  assume  all of such
Applicable  Certificateholder's  obligations  under this  Agreement,  the Escrow
Agreement,  the Deposit Agreement,  the Intercreditor  Agreement,  the Liquidity
Facility,  the NPA, the Note Documents and all such Applicable  Certificates and
Escrow Receipts.  The Applicable  Certificates will be deemed to be purchased on
the date payment of the purchase  price is made  notwithstanding  the failure of
the Applicable  Certificateholders  to deliver any Applicable  Certificates and,
upon such a purchase,  (I) the only rights of the Applicable  Certificateholders
will be to deliver the Applicable  Certificates to the  purchaser(s) and receive
the purchase price for such Applicable Certificates and (II) if the purchaser(s)
shall so request,  such  Applicable  Certificateholder  will comply with all the
provisions  of Section  3.04 of the Basic  Agreement  to enable  new  Applicable
Certificates  to be issued to the  purchaser in such  denominations  as it shall
request.  All charges and expenses in  connection  with the issuance of any such
new Applicable Certificates shall be borne by the purchaser thereof.

            As used in this Section 4.01 and elsewhere in this Trust Supplement,
the terms "Class A-2  Certificate",  "Class A-2  Certificateholder",  "Class A-2
Trust", "Class A-2 Trust Agreement", "Class A-2 Trustee", "Class B Certificate",
"Class B  Certificateholder",  "Class B Trust",  "Class B  Trustee",  "Class C-1
Certificate",  "Class  C-1  Certificateholder",  "Class C-1  Trust",  "Class C-1
Trustee",  "Class C-2 Certificate",  "Class C-2  Certificateholder",  "Class C-2
Trust",  "Class C-2 Trustee",  "Class D Certificate" and "Class D Trust",  shall
have  the  respective  meanings  assigned  to such  terms  in the  Intercreditor
Agreement.




            (c) This Section 4.01 supersedes and replaces Section 6.01(b) of the
Basic Agreement, with respect to the Applicable Trust.

            Section  4.02.  AMENDMENT  OF SECTION  6.05 OF THE BASIC  AGREEMENT.
Section  6.05 of the Basic  Agreement  shall be  amended,  with  respect  to the
Applicable  Trust, by deleting the phrase "and thereby annul any Direction given
by such  Certificateholders  or the Trustee to such Loan  Trustee  with  respect
thereto," set forth in the first sentence thereof.

                                    ARTICLE V
                                   THE TRUSTEE

            Section  5.01.  ACQUISITION  OF TRUST  PROPERTY.  (a) The Trustee is
hereby irrevocably authorized and directed to execute and deliver the Assignment
and  Assumption  Agreement on the date  specified in Section 7.01 of the Related
Pass  Through  Trust  Supplement,  subject  only  to  the  satisfaction  of  the
conditions set forth in said Section 7.01. This Agreement  (except only for this
sentence and the immediately preceding sentence hereof, which are effective upon
execution  and delivery  hereof) shall become  effective  upon the execution and
delivery  of the  Assignment  and  Assumption  Agreement  by the Trustee and the
Related Trustee,  automatically  and without any further  signature or action on
the part of the Company and the  Trustee,  and shall  thereupon  constitute  the
legal, valid and binding  obligation of the parties hereto  enforceable  against
each of the parties hereto in accordance with its terms. Upon such execution and
delivery of the Assignment and Assumption Agreement,  the Related Trust shall be
terminated, the Applicable Certificateholders shall receive beneficial interests
in the  Applicable  Trust in exchange for their  interests in the Related  Trust
equal to their  respective  beneficial  interests  in the Related  Trust and the
"Outstanding"  (as defined in the Related Pass  Through  Trust  Agreement)  pass
through certificates  representing fractional undivided interests in the Related
Trust  shall be deemed  for all  purposes  of this  Agreement,  without  further
signature  or  action  of any  party or  Certificateholder,  to be  Certificates
representing  the same  Fractional  Undivided  Interests  in the Trust and Trust
Property.  By  acceptance  of  its  Applicable   Certificate,   each  Applicable
Certificateholder  consents  to  and  ratifies  such  assignment,  transfer  and
delivery  of the trust  property of the  Related  Trust to the Trustee  upon the
execution  and  delivery  of  the  Assignment  and  Assumption  Agreement.   The
provisions  of this Section  5.01(a)  supersede  and replace the  provisions  of
Section 2.02 of the Basic  Agreement with respect to the Applicable  Trust,  and
all  provisions of the Basic  Agreement  relating to Postponed  Notes or Section
2.02 of the Basic Agreement shall not apply to the Applicable Trust.

            (b) The Trustee,  upon the execution and delivery of the  Assignment
and Assumption  Agreement,  acknowledges its acceptance of all right,  title and
interest in and to the Trust  Property and declares  that the Trustee  holds and
will hold such right, title and interest for the benefit of all then present and
future  Applicable  Certificateholders,  upon the trusts herein and in the Basic
Agreement set forth. By the acceptance of each Applicable  Certificate issued to
it under the Related Pass Through  Trust  Agreement and deemed issued under this
Agreement,  each  Holder of any such  Applicable  Certificate  as grantor of the
Applicable Trust thereby joins in the creation and declaration of the Applicable



Trust.  The  provisions  of this  Section  5.01(b)  supersede  and  replace  the
provisions  of  Section  2.03  of  the  Basic  Agreement,  with  respect  to the
Applicable Trust.

            Section 5.02.     [Intentionally Omitted]

            Section 5.03. THE TRUSTEE. (a) Subject to Section 5.04 of this Trust
Supplement  and Section 7.15 of the Basic  Agreement,  the Trustee  shall not be
responsible  in any  manner  whatsoever  for or in respect  of the  validity  or
sufficiency  of this Trust  Supplement,  the Deposit  Agreement,  the NPA or the
Escrow  Agreement or the due  execution  hereof or thereof by the Company or the
other  parties  thereto  (other than the  Trustee),  or for or in respect of the
recitals and statements  contained herein or therein,  all of which recitals and
statements  are made  solely by the  Company,  except  that the  Trustee  hereby
represents and warrants that each of this Trust Supplement, the Basic Agreement,
each Applicable Certificate, the Intercreditor Agreement, the NPA and the Escrow
Agreement  has been  executed  and  delivered by one of its officers who is duly
authorized to execute and deliver such document on its behalf.

            (b)  Except as herein  otherwise  provided  and  except  during  the
continuance  of an Event of Default in respect of the  Applicable  Trust created
hereby,  no duties,  responsibilities  or liabilities  are assumed,  or shall be
construed to be assumed, by the Trustee by reason of this Trust Supplement other
than as set forth in the  Agreement,  and this Trust  Supplement is executed and
accepted on behalf of the Trustee,  subject to all the terms and  conditions set
forth in the  Agreement  as fully to all  intents as if the same were herein set
forth at length.

            Section 5.04.  REPRESENTATIONS  AND  WARRANTIES OF THE TRUSTEE.  The
Trustee hereby represents and warrants, on the Transfer Date, that:

            (a) the Trustee has full power, authority and legal right to receive
      the Trust Property assigned by the Related Trustee, assume the obligations
      under, and perform,  the Assignment and Assumption  Agreement,  this Trust
      Supplement, the Intercreditor Agreement, the Escrow Agreement and the Note
      Documents  to which it is a party and has taken  all  necessary  action to
      authorize  such receipt,  assumption  and  performance by it of this Trust
      Supplement, the Intercreditor Agreement, the Escrow Agreement and the Note
      Documents to which it is a party;

            (b) the  receipt  of the Trust  Property  under the  Assignment  and
      Assumption  Agreement and the performance by the Trustee of the Assignment
      and  Assumption  Agreement,  this  Trust  Supplement,   the  Intercreditor
      Agreement,  the Escrow  Agreement and the Note  Documents to which it is a
      party (i) will not violate any provision of any United States  federal law
      or the law of the state of the United States where it is located governing
      the banking and trust powers of the Trustee or any order, writ,  judgment,
      or decree of any court, arbitrator or governmental authority applicable to
      the Trustee or any of its assets,  (ii) will not violate any  provision of
      the articles of association or by-laws of the Trustee,  and (iii) will not
      violate any provision of, or  constitute,  with or without notice or lapse
      of time, a default  under,  or result in the creation or imposition of any
      lien on any  properties  included  in the Trust  Property  pursuant to the
      provisions  of any  mortgage,  indenture,  contract,  agreement  or  other



      undertaking to which it is a party, which violation, default or lien could
      reasonably  be  expected  to  have  an  adverse  effect  on the  Trustee's
      performance or ability to perform its duties hereunder or thereunder or on
      the transactions contemplated herein or therein;

            (c) the  receipt  of the Trust  Property  under the  Assignment  and
      Assumption  Agreement and the performance by the Trustee of the Assignment
      and  Assumption  Agreement,  this  Trust  Supplement,   the  Intercreditor
      Agreement,  the Escrow  Agreement and the Note  Documents to which it is a
      party will not require the  authorization,  consent,  or approval  of, the
      giving of notice to, the filing or registration with, or the taking of any
      other  action in respect of, any  governmental  authority or agency of the
      United  States  or the  state of the  United  States  where it is  located
      regulating the banking and corporate trust activities of the Trustee; and

            (d) The Assignment  and Assumption  Agreement has been duly executed
      and delivered by the Trustee and this Trust Supplement,  the Intercreditor
      Agreement,  the Escrow  Agreement and the Note  Documents to which it is a
      party have been, or will be, as applicable, duly executed and delivered by
      the Trustee and constitute, or will constitute, as applicable,  the legal,
      valid and binding  agreements  of the Trustee,  enforceable  against it in
      accordance  with  their  respective   terms;   PROVIDED,   HOWEVER,   that
      enforceability  may be limited by (i) applicable  bankruptcy,  insolvency,
      reorganization,  moratorium  or  similar  laws  affecting  the  rights  of
      creditors generally and (ii) general principles of equity.

            Section 5.05. TRUSTEE LIENS. The Trustee in its individual  capacity
agrees,  in addition to the  agreements  contained  in Section 7.17 of the Basic
Agreement,  that it will at its own cost and expense promptly take any action as
may be necessary to duly discharge and satisfy in full any Trustee's Liens on or
with respect to the Trust Property which is  attributable  to the Trustee in its
individual  capacity and which is unrelated to the transactions  contemplated by
the Intercreditor Agreement or the NPA.

                                   ARTICLE VI
                  ADDITIONAL AMENDMENT; SUPPLEMENTAL AGREEMENTS

            Section  6.01.  AMENDMENT  OF SECTION  5.02 OF THE BASIC  AGREEMENT.
Section  5.02 of the Basic  Agreement  shall be  amended,  with  respect  to the
Applicable Trust, by (i) replacing the phrase "of the Note Documents and of this
Agreement"  set forth in  paragraph  (b)  thereof  with the  phrase "of the Note
Documents,  of the NPA and of this  Agreement" and (ii) replacing the phrase "of
this Agreement and any Note Document" set forth in the last paragraph of Section
5.02 with the phrase "of this Agreement, the NPA and any Note Document".

            Section 6.02.  SUPPLEMENTAL AGREEMENTS WITHOUT CONSENT OF APPLICABLE
CERTIFICATEHOLDERS.  Without  limitation of Section 9.01 of the Basic Agreement,
under the terms of, and subject to the limitations contained in, Section 9.01 of
the Basic  Agreement,  the Company may (but will not be  required  to),  and the



Trustee (subject to Section 9.03 of the Basic Agreement) shall, at the Company's
request,  at any  time  and  from  time to  time,  (i)  enter  into  one or more
agreements  supplemental  to the  Escrow  Agreement,  the  NPA  or  the  Deposit
Agreement,  for any of the purposes set forth in clauses (1) through (9) of such
Section  9.01,  except that (a) clause (2) and (3) of such Section 9.01 shall be
deemed to include the Company's  obligations  under (in the case of clause (2)),
and the  Company's  rights and powers  conferred by (in the case of clause (3)),
the NPA,  (b)  clause  (4) of such  Section  9.01  shall be  deemed  to  include
corrections or supplements to provisions of the Escrow Agreement, the NPA or the
Deposit  Agreement  which  may be  defective  or  inconsistent  with  any  other
provision of this  Agreement or contained in any  agreement  referred to in such
clause  (4) and the curing of any  ambiguity  or the  modification  of any other
provision  with  respect  to  matters  or  questions  arising  under the  Escrow
Agreement,  the NPA or the Deposit  Agreement and (c)  references in clauses (6)
and (7) of such Section 9.01 to "any  Intercreditor  Agreement or any  Liquidity
Facility"  shall  be  deemed  to  refer  to "the  Intercreditor  Agreement,  the
Liquidity Facility, the Escrow Agreement,  the NPA or the Deposit Agreement" and
(ii) enter into one or more agreements supplemental to this Agreement to provide
for the formation of a Class D Trust, the issuance of Class D Certificates,  the
purchase by the Class D Trust of Equipment  Notes and other  matters  incidental
thereto or otherwise contemplated by Section 2.01(b) of the Basic Agreement.

            Section  6.03.  SUPPLEMENTAL  AGREEMENTS  WITH CONSENT OF APPLICABLE
CERTIFICATEHOLDERS.  Without  limitation of Section 9.02 of the Basic Agreement,
the provisions of Section 9.02 of the Basic  Agreement shall apply to agreements
or  amendments  for the purpose of adding any  provisions  to or changing in any
manner or eliminating any of the provisions of the Escrow Agreement, the Deposit
Agreement   or  the   NPA   to  the   extent   applicable   to  the   Applicable
Certificateholders  approving  such  agreement  or amendment or modifying in any
manner the rights and  obligations of such Applicable  Certificateholders  under
the Escrow  Agreement,  the  Deposit  Agreement  or the NPA;  provided  that the
provisions of Section  9.02(1) of the Basic Agreement shall be deemed to include
reductions  in any manner  of, or delay in the  timing  of,  any  receipt by the
Applicable Certificateholders of payments upon the Deposits.

                                   ARTICLE VII
                              TERMINATION OF TRUST

            Section  7.01.   TERMINATION  OF  THE  APPLICABLE   TRUST.  (a)  The
respective  obligations and responsibilities of the Company and the Trustee with
respect to the Applicable  Trust shall  terminate upon the  distribution  to all
Applicable  Certificateholders  and the  Trustee of all  amounts  required to be
distributed  to them  pursuant  to this  Agreement  and the  disposition  of all
property held as part of the Trust Property; PROVIDED, HOWEVER, that in no event
shall the Applicable Trust continue beyond one hundred ten (110) years following
the date of the execution of this Trust Supplement.

            Notice of any  termination,  specifying the  Distribution  Date upon
which  the  Applicable   Certificateholders   may  surrender  their   Applicable
Certificates  to  the  Trustee  for  payment  of  the  final   distribution  and
cancellation,   shall  be  mailed   promptly  by  the   Trustee  to   Applicable
Certificateholders not earlier than the 60th day and not later than the 15th day



next preceding such final Distribution Date specifying (A) the Distribution Date
upon which the proposed  final payment of the  Applicable  Certificates  will be
made upon presentation and surrender of Applicable Certificates at the office or
agency of the Trustee  therein  specified,  (B) the amount of any such  proposed
final  payment,  and (C) that  the  Record  Date  otherwise  applicable  to such
Distribution Date is not applicable,  payments being made only upon presentation
and  surrender  of the  Applicable  Certificates  at the office or agency of the
Trustee therein  specified.  The Trustee shall give such notice to the Registrar
at the  time  such  notice  is  given  to  Applicable  Certificateholders.  Upon
presentation  and surrender of the Applicable  Certificates  in accordance  with
such  notice,   the  Trustee  shall  cause  to  be   distributed  to  Applicable
Certificateholders such final payments.

            In the event that all of the Applicable Certificateholders shall not
surrender their Applicable Certificates for cancellation within six months after
the date specified in the above-mentioned written notice, the Trustee shall give
a second  written  notice  to the  remaining  Applicable  Certificateholders  to
surrender their  Applicable  Certificates for cancellation and receive the final
distribution  with respect thereto.  No additional  interest shall accrue on the
Applicable  Certificates  after the  Distribution  Date  specified  in the first
written notice.  In the event that any money held by the Trustee for the payment
of distributions on the Applicable  Certificates  shall remain unclaimed for two
years (or such lesser time as the Trustee shall be satisfied,  after sixty days'
notice from the Company, is one month prior to the escheat period provided under
applicable  law) after the final  distribution  date with respect  thereto,  the
Trustee shall pay to each Loan Trustee the appropriate  amount of money relating
to such Loan Trustee and shall give written  notice thereof to the related Owner
Trustees, the Owner Participants and the Company.

            (b) The  provisions  of this Section 7.01  supersede and replace the
provisions of Section 11.01 of the Basic Agreement in its entirety, with respect
to the Applicable Trust.

                                  ARTICLE VIII
                            MISCELLANEOUS PROVISIONS

            Section 8.01. BASIC AGREEMENT RATIFIED.  Except and so far as herein
expressly  provided,  all of the  provisions,  terms and conditions of the Basic
Agreement are in all respects  ratified and confirmed;  and the Basic  Agreement
and this Trust Supplement shall be taken, read and construed as one and the same
instrument.  All  replacements of provisions of, and other  modifications of the
Basic  Agreement set forth in this Trust  Supplement  are solely with respect to
the Applicable Trust.

            SECTION  8.02.  GOVERNING  LAW.  THE  AGREEMENT  AND THE  APPLICABLE
CERTIFICATES  SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE  WITH THE LAWS OF
THE STATE OF NEW YORK. THIS SECTION 8.02  SUPERSEDES AND REPLACES  SECTION 12.05
OF THE BASIC AGREEMENT, WITH RESPECT TO THE APPLICABLE TRUST.



            Section 8.03.  EXECUTION IN COUNTERPARTS.  This Trust Supplement may
be executed in any number of  counterparts,  each of which shall be an original,
but such counterparts shall together constitute but one and the same instrument.

            Section 8.04.  INTENTION OF PARTIES.  The parties hereto intend that
the  Applicable  Trust be classified  for U.S.  federal income tax purposes as a
grantor trust under  Subpart E, Part I of  Subchapter J of the Internal  Revenue
Code of  1986,  as  amended,  and not as a trust  or  association  taxable  as a
corporation or as a partnership. Each Applicable Certificateholder and Investor,
by its  acceptance  of  its  Applicable  Certificate  or a  beneficial  interest
therein,  agrees to treat the  Applicable  Trust as a grantor trust for all U.S.
federal, state and local income tax purposes. The powers granted and obligations
undertaken pursuant to the Agreement shall be so construed so as to further such
intent.



            IN WITNESS  WHEREOF,  the Company  and the Trustee  have caused this
Trust Supplement to be duly executed by their  respective  officers thereto duly
authorized, as of the day and year first written above.

                                   CONTINENTAL AIRLINES, INC.


                                   By:_________________________
                                       Name:  Gerald Laderman
                                       Title:  Vice President



                                   WILMINGTON TRUST COMPANY,
                                     as Trustee


                                   By:_________________________
                                       Name:
                                       Title:

                        TRUST SUPPLEMENT No. 1998-3A-2-O

                             Dated November 3, 1998


                                     between

                            WILMINGTON TRUST COMPANY
                                   as Trustee,


                                       and


                           CONTINENTAL AIRLINES, INC.

                                       to

                          PASS THROUGH TRUST AGREEMENT
                         Dated as of September 25, 1997


                                  $199,190,000

               Continental Airlines Pass Through Trust 1998-3A-2-O
                           6.32 % Continental Airlines
                           Pass Through Certificates,
                               Series 1998-3A-2-O



            This Trust Supplement No. 1998-3A-2-O,  dated as of November 3, 1998
(herein called the "TRUST SUPPLEMENT"),  between Continental  Airlines,  Inc., a
Delaware  corporation  (the  "COMPANY"),   and  Wilmington  Trust  Company  (the
"TRUSTEE"), to the Pass Through Trust Agreement, dated as of September 25, 1997,
between the Company and the Trustee (the "BASIC AGREEMENT").

                              W I T N E S S E T H:

            WHEREAS,  the  Basic  Agreement,   unlimited  as  to  the  aggregate
principal amount of Certificates (unless otherwise specified herein, capitalized
terms used herein without definition having the respective meanings specified in
the Basic  Agreement)  which  may be  issued  thereunder,  has  heretofore  been
executed and delivered;

            WHEREAS,  the Company has obtained  commitments  from Boeing for the
delivery of certain Aircraft;

            WHEREAS, the Company intends to finance the acquisition of each such
Aircraft either (i) through separate leveraged lease transactions, in which case
the Company will lease such Aircraft (collectively,  the "LEASED AIRCRAFT"),  or
(ii) through separate secured loan transactions,  in which case the Company will
own such Aircraft (collectively, the "OWNED AIRCRAFT");

            WHEREAS,  in the case of each Leased  Aircraft,  each Owner Trustee,
acting on behalf of the corresponding Owner Participant,  will issue pursuant to
an Indenture,  on a non-recourse  basis,  Equipment  Notes in order to finance a
portion of its purchase price of such Leased Aircraft;

            WHEREAS, in the case of each Owned Aircraft,  the Company will issue
pursuant to an  Indenture,  on a recourse  basis,  Equipment  Notes to finance a
portion of the purchase price of such Owned Aircraft;

            WHEREAS,   the  Trustee   hereby   declares  the  creation  of  this
Continental Airlines Pass Through Trust 1998-3A-2-O (the "APPLICABLE TRUST") for
the benefit of the  Applicable  Certificateholders,  and the initial  Applicable
Certificateholders  as the grantors of the Applicable Trust, by their respective
acceptances  of  the  Applicable  Certificates,  join  in  the  creation  of the
Applicable Trust with the Trustee;

            WHEREAS,  all Certificates to be issued by the Applicable Trust will
evidence fractional  undivided interests in the Applicable Trust and will convey
no rights, benefits or interests in respect of any property other than the Trust
Property  except  for those  Certificates  to which an Escrow  Receipt  has been
affixed;

            WHEREAS,    the   Escrow   Agent   and   the    Underwriters    have
contemporaneously  herewith  entered  into an Escrow  Agreement  with the Escrow
Paying Agent  pursuant to which the  Underwriters  have  delivered to the Escrow



Agent  the  proceeds  from  the  sale of the  Applicable  Certificates  and have
irrevocably  instructed  the Escrow  Agent to  withdraw  and pay funds from such
proceeds  upon  request  and proper  certification  by the  Trustee to  purchase
Equipment  Notes as the  Aircraft  are  delivered  by Boeing  under the Aircraft
Purchase  Agreement from time to time prior to the Delivery  Period  Termination
Date;

            WHEREAS,   the   Escrow   Agent   on   behalf   of  the   Applicable
Certificateholders  has  contemporaneously   herewith  entered  into  a  Deposit
Agreement with the Depositary under which the Deposits  referred to therein will
be made and from which it will  withdraw  funds to allow the Trustee to purchase
Equipment Notes from time to time prior to the Delivery Period Termination Date;

            WHEREAS, pursuant to the terms and conditions of the Basic Agreement
as supplemented by this Trust Supplement (the  "AGREEMENT") and the NPA, upon or
shortly  following  delivery  of an  Aircraft,  the  Trustee  on  behalf  of the
Applicable  Trust,  using  funds  withdrawn  under the Escrow  Agreement,  shall
purchase one or more Equipment Notes having the same interest rate as, and final
maturity  date not  later  than the  final  Regular  Distribution  Date of,  the
Applicable  Certificates issued hereunder and shall hold such Equipment Notes in
trust for the benefit of the Applicable Certificateholders;

            WHEREAS,  all of the conditions and  requirements  necessary to make
this Trust Supplement,  when duly executed and delivered,  a valid,  binding and
legal  instrument  in  accordance  with its  terms and for the  purposes  herein
expressed,  have been done,  performed  and  fulfilled,  and the  execution  and
delivery  of this Trust  Supplement  in the form and with the terms  hereof have
been in all respects duly authorized;

            WHEREAS,  this Trust  Supplement is subject to the provisions of the
Trust Indenture Act of 1939, as amended, and shall, to the extent applicable, be
governed by such provisions;

            NOW THEREFORE, in consideration of the premises herein, it is agreed
between the Company and the Trustee as follows:

                                    ARTICLE I
                                THE CERTIFICATES

            Section 1.01. THE CERTIFICATES.  There is hereby created a series of
Certificates to be issued under the Agreement to be  distinguished  and known as
"6.32%  Continental  Airlines  Pass Through  Certificates,  Series  1998-3A-2-O"
(hereinafter  defined  as  the  "APPLICABLE   CERTIFICATES").   Each  Applicable
Certificate  represents a fractional  undivided interest in the Applicable Trust
created  hereby.  The  Applicable  Certificates  shall be the  only  instruments
evidencing a fractional undivided interest in the Applicable Trust.

            The terms and conditions  applicable to the Applicable  Certificates
are as follows:




            (a) The aggregate  principal  amount of the Applicable  Certificates
      that shall be  authenticated  under the Agreement  (except for  Applicable
      Certificates  authenticated and delivered  pursuant to Sections 3.03, 3.04
      and 3.06 of the Basic Agreement) is $199,190,000.

            (b) The Regular  Distribution  Dates with  respect to any payment of
      Scheduled Payments means May 1 and November 1 of each year,  commencing on
      May 1, 1999,  until  payment of all of the  Scheduled  Payments to be made
      under the Equipment Notes has been made.

            (c) The Special  Distribution  Dates with respect to the  Applicable
      Certificates  means any Business  Day on which a Special  Payment is to be
      distributed pursuant to the Agreement.

            (d) At the Escrow Agent's  request under the Escrow  Agreement,  the
      Trustee shall affix the  corresponding  Escrow Receipt to each  Applicable
      Certificate.  In any event,  any  transfer or  exchange of any  Applicable
      Certificate shall also effect a transfer or exchange of the related Escrow
      Receipt.  Prior to the Final  Withdrawal  Date, no transfer or exchange of
      any Applicable  Certificate  shall be permitted  unless the  corresponding
      Escrow  Receipt  is  attached  thereto  and  also  is  so  transferred  or
      exchanged.  By acceptance of any Applicable Certificate to which an Escrow
      Receipt  is  attached,  each  Holder  of  such an  Applicable  Certificate
      acknowledges  and  accepts  the  restrictions  on  transfer  of the Escrow
      Receipt set forth herein and in the Escrow Agreement.

            (e) (i) The  Applicable  Certificates  shall be in the form attached
      hereto as Exhibit A. Any  Person  acquiring  or  accepting  an  Applicable
      Certificate  or  an  interest   therein  will,  by  such   acquisition  or
      acceptance,  be deemed to represent  and warrant to and for the benefit of
      each Owner  Participant  and the Company  that either (i) the assets of an
      employee benefit plan subject to Title I of the Employee Retirement Income
      Security  Act of 1974,  as  amended  ("ERISA"),  or of a plan  subject  to
      Section  4975 of the  Internal  Revenue  Code of  1986,  as  amended  (the
      "Code"),  have not been used to  purchase  Applicable  Certificates  or an
      interest   therein  or  (ii)  the  purchase  and  holding  of   Applicable
      Certificates  or  an  interest  therein  is  exempt  from  the  prohibited
      transaction  restrictions  of ERISA and the Code  pursuant  to one or more
      prohibited transaction statutory or administrative exemptions.

            (ii) The Applicable  Certificates  shall be Book-Entry  Certificates
      and  shall  be  subject  to the  conditions  set  forth in the  Letter  of
      Representations  between  the  Company and the  Clearing  Agency  attached
      hereto as Exhibit B.

            (f)  the  "Participation   Agreements"  as  defined  in  this  Trust
      Supplement  are the "Note  Purchase  Agreements"  referred to in the Basic
      Agreement.

            (g) The  Applicable  Certificates  are subject to the  Intercreditor
      Agreement, the Deposit Agreement, and the Escrow Agreement.




            (h)  The  Applicable  Certificates  will  have  the  benefit  of the
      Liquidity Facility.

            (i)   The Responsible Party is the Company.

            (j) The date referred to in clause (i) of the definition of the term
      "PTC Event of Default" in the Basic Agreement is the Final Maturity Date.

            (k) The particular  "sections of the Note Purchase  Agreement",  for
      purposes of clause (3) of Section 7.07 of the Basic Agreement, are Section
      8.1 (with  respect to Owned  Aircraft)  and Section  9.1 (with  respect to
      Leased Aircraft) of each Participation Agreement.

            (l) The  Equipment  Notes to be acquired and held in the  Applicable
      Trust, and the related  Aircraft and Note Documents,  are described in the
      NPA.

                                   ARTICLE II
                                   DEFINITIONS

            Section 2.01.  DEFINITIONS.  For all purposes of the Basic Agreement
as supplemented by this Trust Supplement,  the following  capitalized terms have
the following meanings (any term used herein which is defined in both this Trust
Supplement and the Basic  Agreement shall have the meaning  assigned  thereto in
this Trust  Supplement for purposes of the Basic  Agreement as  supplemented  by
this Trust Supplement):

            AGREEMENT:  Has the meaning specified in the recitals hereto.

            AIRCRAFT:  Means each of the New Aircraft or Substitute  Aircraft in
      respect of which a Participation Agreement is to be or is, as the case may
      be, entered into in accordance  with the NPA (or any substitute  aircraft,
      including engines therefor, owned by or leased to the Company and securing
      one or more Equipment Notes).

            AIRCRAFT PURCHASE AGREEMENT:  Has the meaning specified in the NPA.

            APPLICABLE CERTIFICATE: Has the meaning specified in Section 1.01 of
      this Trust Supplement.

            APPLICABLE  CERTIFICATEHOLDER:  Means the  Person  in whose  name an
      Applicable  Certificate  is registered on the Register for the  Applicable
      Certificates.

            APPLICABLE  DELIVERY  DATE:  Has the  meaning  specified  in Section
      5.01(b) of this Trust Supplement.

            APPLICABLE  PARTICIPATION  AGREEMENT:  Has the meaning  specified in
      Section 5.01(b) of this Trust Supplement.

            APPLICABLE TRUST:  Has the meaning specified in the recitals hereto.




            ASSIGNMENT  AND  ASSUMPTION  AGREEMENT:  Means  the  assignment  and
      assumption  agreement  substantially  in the  form  of  Exhibit  C  hereto
      executed  and  delivered  in  accordance  with  Section 7.01 of this Trust
      Supplement.

            BASIC AGREEMENT: Has the meaning specified in the first paragraph of
      this Trust Supplement.

            BOEING:  Means The Boeing Company.

            BUSINESS DAY: Means any day other than a Saturday, a Sunday or a day
      on which  commercial banks are required or authorized to close in Houston,
      Texas,  New  York,  New  York,  Salt  Lake  City,  Utah or, so long as any
      Applicable  Certificate  is  Outstanding,  the city and state in which the
      Trustee  or any Loan  Trustee  maintains  its  Corporate  Trust  Office or
      receives and disburses funds.

            CLASS C  CERTIFICATEHOLDER:  Has the  meaning  specified  in Section
      4.01(b)(iii) of this Trust Supplement.

            CLASS  C  FRACTIONAL  UNDIVIDED  INTEREST:  Means,  at any  date  of
      computation, the fractional interest in the relevant Trust held by a Class
      C  Certificateholder  multiplied  by the Pool  Balance  (as defined in the
      Intercreditor  Agreement) of such Trust and divided by the aggregate  Pool
      Balances  (as  defined in the  Intercreditor  Agreement)  of the Class C-1
      Trust and the Class C-2 Trust, all determined at such date.

            CLASS D  CERTIFICATEHOLDER:  Has the  meaning  specified  in Section
      4.01(b)(iv) of this Trust Supplement.

            COMPANY:  Has the meaning  specified in the first  paragraph of this
      Trust Supplement.

            CONTROLLING  PARTY: Has the meaning  specified in the  Intercreditor
      Agreement.

            CUT-OFF  DATE:   Means  the  earlier  of  (a)  the  Delivery  Period
      Termination Date and (b) the date on which a Triggering Event occurs.

            DELIVERY NOTICE:  Has the meaning specified in the NPA.

            DELIVERY PERIOD  TERMINATION DATE: Means the earlier of (a) July 31,
      1999,  or, if the Equipment  Notes relating to all of the New Aircraft (or
      Substitute  Aircraft  in lieu  thereof)  have  not been  purchased  by the
      Applicable  Trust and the Other Trusts on or prior to such date due to any
      reason  beyond  the  control  of the  Company  and not  occasioned  by the
      Company's  fault or  negligence,  December 31, 1999  (PROVIDED  that, if a
      labor strike  occurs at Boeing on or prior to either or both of such dates
      referred  to in this clause (a),  such date or dates on or  following  the
      commencement of such strike shall be extended by adding thereto the number
      of days that such  strike  continued  in effect) and (b) the date on which
      Equipment  Notes  issued  with  respect  to all of the  New  Aircraft  (or



      Substitute Aircraft in lieu thereof) have been purchased by the Applicable
      Trust and the Other Trusts in accordance with the NPA.

            DEPOSITS:  Has the meaning specified in the Deposit Agreement.

            DEPOSIT AGREEMENT:  Means the Deposit Agreement dated as of November
      3, 1998 relating to the Applicable Certificates between the Depositary and
      the Escrow Agent,  as the same may be amended,  supplemented  or otherwise
      modified from time to time in accordance with its terms.

            DEPOSITARY:  Means Credit Suisse First Boston, a Swiss bank,  acting
      through its New York branch.
     
            DISTRIBUTION  DATE: Means any Regular  Distribution  Date or Special
      Distribution Date as the context requires.

            ESCROW  AGENT:  Means,  initially,  First  Security  Bank,  National
      Association,  and any  replacement  or  successor  therefor  appointed  in
      accordance with the Escrow Agreement.

            ESCROW AGREEMENT:  Means the Escrow and Paying Agent Agreement dated
      as of November 3, 1998 relating to the Applicable Certificates,  among the
      Escrow Agent,  the Escrow Paying Agent, the Trustee and  Underwriters,  as
      the same may be amended,  supplemented or otherwise  modified from time to
      time in accordance with its terms.

            ESCROW PAYING  AGENT:  Means the Person acting as paying agent under
      the Escrow Agreement.

            ESCROW RECEIPT:  Means the receipt substantially in the form annexed
      to the Escrow Agreement  representing a fractional  undivided  interest in
      the funds held in escrow thereunder.

            FINAL MATURITY DATE:  Means May 1, 2010.

            FINAL WITHDRAWAL: Has the meaning specified in the Escrow Agreement.

            FINAL  WITHDRAWAL  DATE:  Has the  meaning  specified  in the Escrow
      Agreement.

            FINAL WITHDRAWAL  NOTICE:  Has the meaning specified in Section 5.02
      of this Trust Supplement.

            INDENTURE: Means each of the separate trust indentures and mortgages
      relating to the  Aircraft,  each as  specified  or described in a Delivery
      Notice  delivered  pursuant  to  the  NPA  or  the  related  Participation
      Agreement,  in each  case as the  same  may be  amended,  supplemented  or
      otherwise modified from time to time in accordance with its terms.




            INTERCREDITOR AGREEMENT:  Means the Intercreditor Agreement dated as
      of November 3, 1998 among the Trustee,  the Other Trustees,  the Liquidity
      Provider,  the liquidity  providers  relating to the  Certificates  issued
      under (and as defined  in) each of the Other  Agreements,  and  Wilmington
      Trust  Company,  as  Subordination  Agent and as  trustee  thereunder,  as
      amended,   supplemented  or  otherwise  modified  from  time  to  time  in
      accordance with its terms.

            INVESTORS:  Means  the  Underwriters  together  with all  subsequent
      beneficial owners of the Applicable Certificates.

            LEASE:  Means,  with  respect  to each  Leased  Aircraft,  the lease
      between an Owner Trustee,  as the lessor, and the Company,  as the lessee,
      referred  to in the  related  Indenture,  as such  lease  may be  amended,
      supplemented or otherwise modified in accordance with its terms.

            LEASED AIRCRAFT:  Has the meaning  specified in the third recital to
      this Trust Supplement.

            LEASED  AIRCRAFT  INDENTURE:   Has  the  meaning  specified  in  the
      Intercreditor Agreement.

            LIQUIDITY FACILITY: Means, initially, the Revolving Credit Agreement
      dated as of November  3, 1998  relating  to the  Applicable  Certificates,
      between  the  Liquidity   Provider  and  Wilmington   Trust  Company,   as
      Subordination  Agent, as agent and trustee for the Applicable  Trust, and,
      from  and  after  the  replacement  of  such  agreement  pursuant  to  the
      Intercreditor  Agreement,  the replacement liquidity facility therefor, in
      each case as amended, supplemented or otherwise modified from time to time
      in accordance with their respective terms.

            LIQUIDITY  PROVIDER:   Means,  initially,   Westdeutsche  Landesbank
      Girozentrale,   a  German   public  law  banking   institution,   and  any
      replacements  or  successors  therefor  appointed in  accordance  with the
      Intercreditor Agreement.

            NEW AIRCRAFT:  Has the meaning specified in the NPA.

            NOTE  DOCUMENTS:  Means the  Equipment  Notes  with  respect  to the
      Applicable  Certificates and, with respect to any such Equipment Note, (i)
      the Indenture and the Participation  Agreement  relating to such Equipment
      Note,  and  (ii) in the case of any  Equipment  Note  related  to a Leased
      Aircraft, the Lease relating to such Leased Aircraft.

            NOTICE OF  PURCHASE  WITHDRAWAL:  Has the meaning  specified  in the
      Deposit Agreement.

            NPA: Means the Note Purchase  Agreement dated as of November 3, 1998
      among the Trustee, the Other Trustees,  the Company, the Escrow Agent, the
      Escrow Paying Agent and the  Subordination  Agent,  providing  for,  among



      other things,  the purchase of Equipment Notes by the Trustee on behalf of
      the Trust, as the same may be amended,  supplemented or otherwise modified
      from time to time, in accordance with its terms.

            OTHER  AGREEMENTS:  Means (i) the Basic Agreement as supplemented by
      Trust  Supplement  No.  1998-3A-1-O  dated  the date  hereof  relating  to
      Continental  Airlines  Pass  Through  Trust  1998-3A-1-O,  (ii) the  Basic
      Agreement as supplemented by Trust Supplement No. 1998-3B-O dated the date
      hereof  relating to  Continental  Airlines Pass Through  Trust  1998-3B-O,
      (iii)  the  Basic  Agreement  as  supplemented  by  Trust  Supplement  No.
      1998-3C-1-O  dated the date hereof  relating to Continental  Airlines Pass
      Through Trust  1998-3C-1-O and (iv) the Basic Agreement as supplemented by
      Trust  Supplement  No.  1998-3C-2-O  dated  the date  hereof  relating  to
      Continental Airlines Pass Through Trust 1998-3C-2-O.

            OTHER TRUSTEES:  Means the trustees under the Other Agreements,  and
      any successor or other trustee appointed as provided therein.

            OTHER  TRUSTS:  Means the  Continental  Airlines  Pass Through Trust
      1998-3A-1-O,  the Continental  Airlines Pass Through Trust 1998-3B-O,  the
      Continental  Airlines Pass Through Trust  1998-3C-1-O  and the Continental
      Airlines Pass Through Trust 1998-3C-2-O, each created on the date hereof.

            OWNED  AIRCRAFT:  Has the meaning  specified in the third recital to
      this Trust Supplement.

            OWNED  AIRCRAFT   INDENTURE:   Has  the  meaning  specified  in  the
      Intercreditor Agreement.

            OWNER PARTICIPANT:  With respect to any Equipment Note relating to a
      Leased  Aircraft,  means the "Owner  Participant"  as  referred  to in the
      Indenture  pursuant  to  which  such  Equipment  Note  is  issued  and any
      permitted  successor  or  assign  of such  Owner  Participant;  and  OWNER
      PARTICIPANTS  at  any  time  of  determination  means  all  of  the  Owner
      Participants thus referred to in the Indentures.

            OWNER  TRUSTEE:  With respect to any  Equipment  Note  relating to a
      Leased  Aircraft,  means  the  "Owner  Trustee",  as  referred  to in  the
      Indenture  pursuant  to which such  Equipment  Note is issued,  not in its
      individual capacity but solely as trustee; and OWNER TRUSTEES means all of
      the Owner Trustees party to any of the Indentures.

            OWNER  TRUSTEE'S  PURCHASE  AGREEMENT:  Means,  with  respect to any
      Leased Aircraft,  the agreement between the Company and the relevant Owner
      Trustee  pursuant to which,  INTER ALIA, the Company  assigns to the Owner
      Trustee  certain  rights  of  the  Company  under  the  aircraft  purchase
      agreement with respect to such Leased Aircraft.

            PARTICIPATION  AGREEMENT:  Means each Participation  Agreement to be
      entered  into,  or  entered  into (as the case  may  be),  by the  Trustee
      pursuant to the NPA, as the same may be amended, supplemented or otherwise
      modified in accordance with its terms.



                                       1


            POOL BALANCE: Means, as of any date, (i) the original aggregate face
      amount of the Applicable  Certificates  less (ii) the aggregate  amount of
      all payments made in respect of such Applicable Certificates or in respect
      of  Deposits  other than  payments  made in respect of interest or premium
      thereon or reimbursement  of any costs or expenses  incurred in connection
      therewith.  The Pool Balance as of any Distribution Date shall be computed
      after  giving  effect to any special  distribution  with respect to unused
      Deposits,  payment of  principal  of the  Equipment  Notes or payment with
      respect to other Trust Property and the distribution thereof to be made on
      that date.

            POOL  FACTOR:  Means,  as of any  Distribution  Date,  the  quotient
      (rounded to the seventh  decimal place)  computed by dividing (i) the Pool
      Balance  by (ii) the  original  aggregate  face  amount of the  Applicable
      Certificates.  The  Pool  Factor  as of any  Distribution  Date  shall  be
      computed after giving effect to any special  distribution  with respect to
      unused  Deposits,  payment of principal of the Equipment Notes or payments
      with respect to other Trust  Property and the  distribution  thereof to be
      made on that date.

            PROSPECTUS SUPPLEMENT: Means the Prospectus Supplement dated October
      21, 1998 relating to the offering of the Certificates.

            RELATED PASS THROUGH TRUST  AGREEMENT:  Means the Basic Agreement as
      supplemented by the Trust Supplement No. 1998-3A-2-S dated the date hereof
      relating to the  Continental  Airlines Pass Through Trust  1998-3A-2-S and
      entered  into by the  Company and the  Trustee,  which  agreement  becomes
      effective upon the execution and delivery of the Assignment and Assumption
      Agreement pursuant to Section 7.01 of this Trust Supplement.

            RELATED TRUST: Means the Continental Pass Through Trust 1998-3A-2-S,
      to be formed under the Related Pass Through Trust Agreement.

            RELATED  TRUSTEE:  Means the trustee  under the Related Pass Through
      Trust Agreement.

            SCHEDULED DELIVERY DATE:  Has the meaning specified in the NPA.

            SPECIAL PAYMENT:  Means any payment (other than a Scheduled Payment)
      in respect of, or any proceeds of, any  Equipment  Note,  Trust  Indenture
      Estate (as defined in each Leased  Aircraft  Indenture) or Collateral  (as
      defined in each Owned Aircraft Indenture).

            SUBSTITUTE AIRCRAFT:  Has the meaning specified in the NPA.

            TRANSFER  DATE:  Has the meaning  specified  in Section 7.01 of this
      Trust Supplement.

            TRIGGERING  EVENT:  Has the  meaning  assigned  to such  term in the
      Intercreditor Agreement.



            TRUST PROPERTY:  Means (i) subject to the  Intercreditor  Agreement,
      the  Equipment  Notes held as the property of the  Applicable  Trust,  all
      monies at any time  paid  thereon  and all  monies  due and to become  due
      thereunder,  (ii) funds  from time to time  deposited  in the  Certificate
      Account and the Special Payments Account and, subject to the Intercreditor
      Agreement,  any proceeds from the sale by the Trustee  pursuant to Article
      VI of the Basic  Agreement of any  Equipment  Note and (iii) all rights of
      the Applicable Trust and the Trustee,  on behalf of the Applicable  Trust,
      under the Intercreditor  Agreement,  the Escrow Agreement, the NPA and the
      Liquidity Facility,  including,  without limitation, all rights to receive
      certain payments thereunder,  and all monies paid to the Trustee on behalf
      of the  Applicable  Trust pursuant to the  Intercreditor  Agreement or the
      Liquidity  Facility,  PROVIDED that rights with respect to the Deposits or
      under the Escrow Agreement, except for the right to direct withdrawals for
      the purchase of Equipment  Notes to be held  herein,  will not  constitute
      Trust Property.

            TRUST  SUPPLEMENT:  Has the meaning specified in the first paragraph
      of this trust supplement.

            UNDERWRITERS:    Means,   collectively,   Morgan   Stanley   &   Co.
      Incorporated,  Credit Suisse First Boston  Corporation,  Chase  Securities
      Inc.,  Donaldson,  Lufkin & Jenrette  Securities  Corporation  and Salomon
      Smith Barney Inc.

            UNDERWRITING  AGREEMENT:  Means  the  Underwriting  Agreement  dated
      October 21, 1998 among the  Underwriters,  the Company and the Depositary,
      as the same may be amended,  supplemented or otherwise  modified from time
      to time in accordance with its terms.

                                   ARTICLE III
                        STATEMENTS TO CERTIFICATEHOLDERS

            Section 3.01.  STATEMENTS TO APPLICABLE  CERTIFICATEHOLDERS.  (a) On
each  Distribution  Date,  the Trustee will include  with each  distribution  to
Applicable  Certificateholders of a Scheduled Payment or Special Payment, as the
case may be, a statement  setting forth the  information  provided below (in the
case of a Special  Payment,  reflecting in part the information  provided by the
Escrow Paying Agent under the Escrow Agreement).  Such statement shall set forth
(per $1,000 face amount  Applicable  Certificate as to (ii), (iii), (iv) and (v)
below) the following information:

            (i) the aggregate amount of funds  distributed on such  Distribution
      Date under the Agreement and under the Escrow  Agreement,  indicating  the
      amount allocable to each source;

            (ii) the amount of such distribution  under the Agreement  allocable
      to principal and the amount allocable to premium, if any;

            (iii) the amount of such distribution under the Agreement  allocable
      to interest;




            (iv) the  amount of such  distribution  under the  Escrow  Agreement
      allocable to interest;

            (v) the  amount  of such  distribution  under the  Escrow  Agreement
      allocable to unused Deposits, if any; and

            (vi) the Pool Balance and the Pool Factor.

            With respect to the Applicable  Certificates  registered in the name
of a Clearing Agency,  on the Record Date prior to each  Distribution  Date, the
Trustee will request from such  Clearing  Agency a securities  position  listing
setting forth the names of all Clearing  Agency  Participants  reflected on such
Clearing Agency's books as holding  interests in the Applicable  Certificates on
such Record Date. On each Distribution  Date, the Trustee will mail to each such
Clearing  Agency  Participant  the  statement  described  above  and  will  make
available additional copies as requested by such Clearing Agency Participant for
forwarding to holders of interests in the Applicable Certificates.

            (b)  Within  a  reasonable  period  of  time  after  the end of each
calendar  year but not later than the latest date  permitted by law, the Trustee
shall  furnish to each Person who at any time during such  calendar  year was an
Applicable  Certificateholder  of record a statement  containing  the sum of the
amounts determined pursuant to clauses (a)(i),  (a)(ii),  (a)(iii),  (a)(iv) and
(a)(v)  above  for such  calendar  year or,  in the  event  such  Person  was an
Applicable  Certificateholder  of record during a portion of such calendar year,
for such portion of such year, and such other items as are readily  available to
the Trustee and which an Applicable  Certificateholder  shall reasonably request
as necessary for the purpose of such Applicable Certificateholder's  preparation
of its federal income tax returns.  Such statement and such other items shall be
prepared on the basis of  information  supplied  to the Trustee by the  Clearing
Agency  Participants  and shall be  delivered  by the  Trustee to such  Clearing
Agency  Participants  to be available for  forwarding  by such  Clearing  Agency
Participants  to the holders of interests in the Applicable  Certificates in the
manner described in Section 3.02(a) of this Trust Supplement.

            (c) If the aggregate  principal  payments scheduled for May 1, 1999,
on the Equipment Notes held as Trust Property as of April 9, 1999,  differs from
the amount thereof set forth for the Applicable Certificates on page S-34 of the
Prospectus  Supplement,  by no later than April 15, 1999 the Trustee  shall mail
written notice of the actual amount of such scheduled payments to the Applicable
Certificateholders  of record as of a date within 10 Business  Days prior to the
date of mailing.

            (d) Promptly  following (i) the Delivery Period Termination Date, if
there has been any change in the  information  set forth in clauses (x), (y) and
(z) below  from that set forth in page S-34 of the  Prospectus  Supplement,  and
(ii) any early  redemption  or  purchase  of, or any  default in the  payment of
principal  or  interest in respect  of, any of the  Equipment  Notes held in the
Applicable  Trust,  or any  Final  Withdrawal,  the  Trustee  shall  furnish  to
Applicable  Certificateholders  of record on such date a statement setting forth
(x) the expected Pool Balances for each  subsequent  Regular  Distribution  Date
following the Delivery Period Termination Date, (y) the related Pool Factors for
such  Regular  Distribution  Dates and (z) the expected  principal  distribution



schedule of the Equipment Notes, in the aggregate, held as Trust Property at the
date of such notice. With respect to the Applicable  Certificates  registered in
the name of a Clearing  Agency,  on the Delivery  Period  Termination  Date, the
Trustee will request from such  Clearing  Agency a securities  position  listing
setting forth the names of all Clearing  Agency  Participants  reflected on such
Clearing Agency's books as holding  interests in the Applicable  Certificates on
such date. The Trustee will mail to each such Clearing  Agency  Participant  the
statement described above and will make available additional copies as requested
by such Clearing  Agency  Participant  for forwarding to holders of interests in
the Applicable Certificates.

            (e) This Section 3.01  supersedes  and replaces  Section 4.03 of the
Basic Agreement, with respect to the Applicable Trust.

                                   ARTICLE IV
                                     DEFAULT

            Section 4.01. PURCHASE RIGHTS OF CERTIFICATEHOLDERS. (a) At any time
after the occurrence and during the  continuance of a Triggering  Event,  if the
Class   A-1   Trustee   is  then  the   Controlling   Party,   each   Applicable
Certificateholder  shall have the right to purchase,  for the purchase price set
forth in the Class A-1 Trust Agreement, all, but not less than all, of the Class
A-1 Certificates upon ten days' written notice to the Class A-1 Trustee and each
other  Applicable  Certificateholder,  PROVIDED  that (i) if prior to the end of
such  ten-day  period  any  other  Applicable  Certificateholder  notifies  such
purchasing   Applicable    Certificateholder    that   such   other   Applicable
Certificateholder  wants  to  participate  in such  purchase,  then  such  other
Applicable   Certificateholder   may  join   with  the   purchasing   Applicable
Certificateholder  to  purchase  all,  but not less than  all,  of the Class A-1
Certificates  pro  rata  based  on  the  Fractional  Undivided  Interest  in the
Applicable  Trust  held by each such  Applicable  Certificateholder  and (ii) if
prior to the end of such ten-day period any other  Applicable  Certificateholder
fails to  notify  the  purchasing  Applicable  Certificateholder  of such  other
Applicable  Certificateholder's  desire to participate in such a purchase,  then
such other  Applicable  Certificateholder  shall lose its right to purchase  the
Class A-1 Certificates pursuant to this Section 4.01(a).

            (b) By acceptance of its  Applicable  Certificate,  each  Applicable
Certificateholder  agrees that at any time after the  occurrence  and during the
continuation of a Triggering Event,

            (i) if the  Trustee is then the  Controlling  Party,  each Class A-1
      Certificateholder  shall have the right to purchase all, but not less than
      all, of the Applicable  Certificates  upon ten days' written notice to the
      Trustee and each other Class A-1  Certificateholder,  PROVIDED that (A) if
      prior  to  the  end  of  such   ten-day   period   any  other   Class  A-1
      Certificateholder  notifies such  purchasing  Class A-1  Certificateholder
      that such other Class A-1  Certificateholder  wants to participate in such
      purchase,  then such other Class A-1  Certificateholder  may join with the
      purchasing Class A-1  Certificateholder to purchase all, but not less than
      all,  of the  Applicable  Certificates  pro rata  based on the  Fractional
      Undivided  Interest  in the Class A-1  Trust  held by each such  Class A-1
      Certificateholder  and (B) if prior to the end of such ten-day  period any
      other Class A-1 Certificateholder fails to notify the purchasing Class A-1



      Certificateholder  of such other Class A-1  Certificateholder's  desire to
      participate   in   such  a   purchase,   then   such   other   Class   A-1
      Certificateholder   shall  lose  its  right  to  purchase  the  Applicable
      Certificates pursuant to this Section 4.01(b);

            (ii) each  Class B  Certificateholder  shall  have the right  (which
      shall not expire upon any purchase of certificates  pursuant to clause (a)
      or (b)(i) above) to purchase all, but not less than all, of the Applicable
      Certificates and the Class A-1 Certificates  upon ten days' written notice
      to  the   Trustee,   the  Class  A-1   Trustee  and  each  other  Class  B
      Certificateholder,  PROVIDED  that (A) if prior to the end of such ten-day
      period any other Class B Certificateholder  notifies such purchasing Class
      B  Certificateholder  that such other Class B  Certificateholder  wants to
      participate  in such purchase,  then such other Class B  Certificateholder
      may join with the purchasing  Class B  Certificateholder  to purchase all,
      but not less than all, of the  Applicable  Certificates  and the Class A-1
      Certificates  pro rata based on the Fractional  Undivided  Interest in the
      Class B Trust held by each such Class B Certificateholder and (B) if prior
      to the end of such  ten-day  period  any other  Class B  Certificateholder
      fails to notify the  purchasing  Class B  Certificateholder  of such other
      Class B Certificateholder's desire to participate in such a purchase, then
      such other Class B Certificateholder  shall lose its right to purchase the
      Applicable  Certificates and the Class A-1  Certificates  pursuant to this
      Section 4.01(b);

            (iii)   each   Class   C-1    Certificateholder    and   Class   C-2
      Certificateholder  (each a "CLASS  C  CERTIFICATEHOLDER")  shall  have the
      right (which shall not expire upon any purchase of  certificates  pursuant
      to clause (a), (b)(i) or (b)(ii) above) to purchase all, but not less than
      all, of the Applicable  Certificates,  the Class A-1  Certificates and the
      Class B  Certificates  upon ten days' written  notice to the Trustee,  the
      Class A-1 Trustee,  the Class B Trustee and (x) if such purchasing Class C
      Certificateholder is a Class C-1  Certificateholder,  each other Class C-1
      Certificateholder  and either (I) if the Class C-2 Trustee shall have made
      a  current  list  of  Class  C-2  Certificateholders   available  to  such
      purchasing Class C Certificateholder  upon a request therefor,  each Class
      C-2 Certificateholder,  or (II) if clause (I) is not applicable, the Class
      C-2 Trustee,  or (y) if such  purchasing  Class C  Certificateholder  is a
      Class C-2  Certificateholder,  each other Class C-2  Certificateholder and
      either  (I) if the Class C-1  Trustee  shall  have made a current  list of
      Class  C-1  Certificateholders   available  to  such  purchasing  Class  C
      Certificateholder    upon   a   request    therefor,    each   Class   C-1
      Certificateholder,  or (II) if clause (I) is not applicable, the Class C-1
      Trustee,  PROVIDED that (A) if prior to the end of such ten-day period any
      other  Class  C   Certificateholder   notifies  such  purchasing  Class  C
      Certificateholder  that  such  other  Class C  Certificateholder  wants to
      participate  in such purchase,  then such other Class C  Certificateholder
      may join with the purchasing  Class C  Certificateholder  to purchase all,
      but not less  than  all,  of the  Applicable  Certificates,  the Class A-1
      Certificates  and the Class B  Certificates  pro rata based on the Class C
      Fractional  Undivided Interest held by each such Class C Certificateholder
      and (B) if prior  to the end of such  ten-day  period  any  other  Class C
      Certificateholder fails to notify the purchasing Class C Certificateholder
      of such other Class C Certificateholder's  desire to participate in such a
      purchase,  then such other Class C Certificateholder  shall lose its right



      to purchase the Applicable  Certificates,  the Class A-1  Certificates and
      the Class B Certificates pursuant to this Section 4.01(b); and

            (iv)   each   holder   of  a  Class  D   Certificate   (a  "CLASS  D
      CERTIFICATEHOLDER")  shall have the right (which shall not expire upon any
      purchase  of  certificates  pursuant  to clause  (a),  (b)(i),  (b)(ii) or
      (b)(iii)  above) to purchase all, but not less than all, of the Applicable
      Certificates,  the Class A-1 Certificates,  the Class B Certificates,  the
      Class  C-1  Certificates  and the Class  C-2  Certificates  upon ten days'
      written notice to the Trustee, the Class A-1 Trustee, the Class B Trustee,
      the  Class C-1  Trustee,  the Class C-2  Trustee  and each  other  Class D
      Certificateholder,  PROVIDED  that (A) if prior to the end of such ten-day
      period any other Class D Certificateholder  notifies such purchasing Class
      D  Certificateholder  that such other Class D  Certificateholder  wants to
      participate  in such purchase,  then such other Class D  Certificateholder
      may join with the purchasing  Class D  Certificateholder  to purchase all,
      but not less  than  all,  of the  Applicable  Certificates,  the Class A-1
      Certificates, the Class B Certificates, the Class C-1 Certificates and the
      Class C-2 Certificates pro rata based on the Fractional Undivided Interest
      in the Class D Trust held by each such Class D  Certificateholder  and (B)
      if  prior  to  the  end  of  such   ten-day   period  any  other  Class  D
      Certificateholder fails to notify the purchasing Class D Certificateholder
      of such other Class D Certificateholder's  desire to participate in such a
      purchase,  then such other Class D Certificateholder  shall lose its right
      to purchase the Applicable Certificates,  the Class A-1 Certificates,  the
      Class B  Certificates,  the  Class  C-1  Certificates  and the  Class  C-2
      Certificates pursuant to this Section 4.01(b).

            The purchase price with respect to the Applicable Certificates shall
be equal to the Pool  Balance  of the  Applicable  Certificates,  together  with
accrued  and  unpaid  interest  thereon  to the date of such  purchase,  without
premium,  but including any other amounts then due and payable to the Applicable
Certificateholders under this Agreement, the Intercreditor Agreement, the Escrow
Agreement  or  any  Note  Document  or  on  or  in  respect  of  the  Applicable
Certificates; PROVIDED, HOWEVER, that (x) if such purchase occurs after a record
date  specified  in  Section  2.03  of  the  Escrow  Agreement  relating  to the
distribution  of unused  Deposits and/or accrued and unpaid interest on Deposits
and prior to or on the related distribution date thereunder, such purchase price
shall be reduced by the aggregate  amount of unused  Deposits and/or interest to
be distributed  under the Escrow  Agreement (which deducted amounts shall remain
distributable to, and may be retained by, the Applicable Certificateholder as of
such record date) and (y) if such purchase  occurs after a Record Date and prior
to or on the related  Distribution Date, such purchase price shall be reduced by
the amount to be distributed  under this  Agreement on the related  Distribution
Date (which deducted amounts shall remain  distributable to, and may be retained
by, the Applicable  Certificateholder as of such Record Date);  PROVIDED FURTHER
that no such purchase of Applicable  Certificates  shall be effective unless the
purchaser(s)  shall  certify to the  Trustee  that  contemporaneously  with such
purchase,  such purchaser(s) is (are) purchasing,  pursuant to the terms of this
Agreement  and the  Other  Agreements,  (A) in the case of any  purchase  of the
Applicable  Certificates  pursuant to clause (b)(i) above, all of the Applicable
Certificates, or (B) in all other cases, the Applicable Certificates,  the Class
A-1 Certificates,  the Class B Certificates,  the Class C-1 Certificates and the
Class  C-2  Certificates  which  are  senior  to the  securities  held  by  such
purchaser(s).  Each payment of the purchase price of the Applicable Certificates



referred to in the first sentence hereof shall be made to an account or accounts
designated by the Trustee and each such  purchase  shall be subject to the terms
of  this  Section  4.01(b).  Each  Applicable  Certificateholder  agrees  by its
acceptance of its Applicable  Certificate that (at any time after the occurrence
and during the  continuance  of a Triggering  Event) it will,  upon payment from
such  Class  A-2  Certificateholder(s),  Class B  Certificateholder(s),  Class C
Certificateholder(s) or Class D Certificateholder(s), as the case may be, of the
purchase  price set forth in the first  sentence  of this  paragraph,  forthwith
sell, assign, transfer and convey to the purchaser(s) thereof (without recourse,
representation  or  warranty  of any kind  except for its own acts),  all of the
right, title,  interest and obligation of such Applicable  Certificateholder  in
this Agreement,  the Escrow Agreement,  the Deposit Agreement, the Intercreditor
Agreement,  the  Liquidity  Facility,  the  NPA,  the  Note  Documents  and  all
Applicable   Certificates   and  Escrow   Receipts   held  by  such   Applicable
Certificateholder  (subject to clauses (x) and (y) in the first sentence of this
paragraph and excluding all right, title and interest under any of the foregoing
to the extent such right, title or interest is with respect to an obligation not
then due and  payable as  respects  any action or  inaction  or state of affairs
occurring  prior  to such  sale)  and the  purchaser  shall  assume  all of such
Applicable  Certificateholder's  obligations  under this  Agreement,  the Escrow
Agreement,  the Deposit Agreement,  the Intercreditor  Agreement,  the Liquidity
Facility,  the NPA, the Note Documents and all such Applicable  Certificates and
Escrow Receipts.  The Applicable  Certificates will be deemed to be purchased on
the date payment of the purchase  price is made  notwithstanding  the failure of
the Applicable  Certificateholders  to deliver any Applicable  Certificates and,
upon such a purchase,  (I) the only rights of the Applicable  Certificateholders
will be to deliver the Applicable  Certificates to the  purchaser(s) and receive
the purchase price for such Applicable Certificates and (II) if the purchaser(s)
shall so request,  such  Applicable  Certificateholder  will comply with all the
provisions  of Section  3.04 of the Basic  Agreement  to enable  new  Applicable
Certificates  to be issued to the  purchaser in such  denominations  as it shall
request.  All charges and expenses in  connection  with the issuance of any such
new Applicable Certificates shall be borne by the purchaser thereof.

            As used in this Section 4.01 and elsewhere in this Trust Supplement,
the terms "Class A-1  Certificate",  "Class A-1  Certificateholder",  "Class A-1
Trust", "Class A-1 Trust Agreement", "Class A-1 Trustee", "Class B Certificate",
"Class B  Certificateholder",  "Class B Trust",  "Class B  Trustee",  "Class C-1
Certificate",  "Class  C-1  Certificateholder",  "Class C-1  Trust",  "Class C-1
Trustee",  "Class C-2 Certificate",  "Class C-2  Certificateholder",  "Class C-2
Trust",  "Class C-2 Trustee",  "Class D Certificate" and "Class D Trust",  shall
have  the  respective  meanings  assigned  to such  terms  in the  Intercreditor
Agreement.

            (c) This Section 4.01 supersedes and replaces Section 6.01(b) of the
Basic Agreement, with respect to the Applicable Trust.

            Section  4.02.  AMENDMENT  OF SECTION  6.05 OF THE BASIC  AGREEMENT.
Section  6.05 of the Basic  Agreement  shall be  amended,  with  respect  to the
Applicable  Trust, by deleting the phrase "and thereby annul any Direction given
by such  Certificateholders  or the Trustee to such Loan  Trustee  with  respect
thereto," set forth in the first sentence thereof.




                                    ARTICLE V
                                   THE TRUSTEE

            Section 5.01. DELIVERY OF DOCUMENTS; DELIVERY DATES. (a) The Trustee
is hereby directed (i) to execute and deliver the Intercreditor  Agreement,  the
Escrow  Agreement and the NPA on or prior to the Issuance Date, each in the form
delivered to the Trustee by the Company and (ii) subject to the respective terms
thereof, to perform its obligations thereunder.  Upon request of the Company and
the  satisfaction  or  waiver  of  the  closing  conditions   specified  in  the
Underwriting Agreement, the Trustee shall execute, deliver, authenticate,  issue
and sell  Applicable  Certificates in authorized  denominations  equaling in the
aggregate  the amount set  forth,  with  respect  to the  Applicable  Trust,  in
Schedule  II to the  Underwriting  Agreement  evidencing  the  entire  ownership
interest in the  Applicable  Trust,  which amount  equals the maximum  aggregate
principal  amount of  Equipment  Notes  which may be  purchased  by the  Trustee
pursuant to the NPA. Except as provided in Sections 3.03, 3.04, 3.05 and 3.06 of
the Basic  Agreement,  the Trustee  shall not execute,  authenticate  or deliver
Applicable  Certificates  in excess of the  aggregate  amount  specified in this
paragraph.  The  provisions  of this Section  5.01(a)  supersede and replace the
first sentence of Section  3.02(a) of the Basic  Agreement,  with respect to the
Applicable Trust.

            (b) On or after the Issuance Date, the Company may deliver from time
to time to the  Trustee a  Delivery  Notice  relating  to one or more  Equipment
Notes.  After  receipt  of a  Delivery  Notice and in any case no later than one
Business Day prior to a Scheduled Delivery Date as to which such Delivery Notice
relates  (the  "APPLICABLE  DELIVERY  DATE"),  the  Trustee  shall  (as and when
specified in the Delivery  Notice) instruct the Escrow Agent to provide a Notice
of Purchase Withdrawal to the Depositary requesting (A) the withdrawal of one or
more Deposits on the  Applicable  Delivery  Date in  accordance  with and to the
extent permitted by the terms of the Escrow Agreement and the Deposit  Agreement
and (B) the  payment of all,  or a portion,  of such  Deposit or  Deposits in an
amount equal in the aggregate to the purchase price of such  Equipment  Notes to
or on behalf of the Owner  Trustee or the Company,  as the case may be,  issuing
such  Equipment  Notes,  all as shall be described in the Delivery  Notice.  The
Trustee shall (as and when  specified in such Delivery  Notice),  subject to the
conditions  set  forth in  Section  2 of the NPA,  enter  into and  perform  its
obligations under the Participation  Agreement specified in such Delivery Notice
(the  "APPLICABLE   PARTICIPATION   AGREEMENT")  and  cause  such  certificates,
documents  and legal  opinions  relating to the Trustee to be duly  delivered as
required by the Applicable  Participation Agreement. If at any time prior to the
Applicable Delivery Date, the Trustee receives a notice of postponement pursuant
to Section 1(e) or 1(f) of the NPA, then the Trustee  shall give the  Depositary
(with a copy to the Escrow  Agent) a notice of  cancellation  of such  Notice of
Purchase  Withdrawal  relating to such  Deposit or  Deposits on such  Applicable
Delivery Date. Upon satisfaction of the conditions  specified in the NPA and the
Applicable  Participation  Agreement,  the Trustee shall purchase the applicable
Equipment  Notes with the proceeds of the  withdrawals  of one or more  Deposits
made on the Applicable Delivery Date in accordance with the terms of the Deposit
Agreement and the Escrow  Agreement.  The purchase price of such Equipment Notes
shall equal the principal amount of such Equipment Notes. Amounts withdrawn from
such Deposit or Deposits in excess of the purchase price of the Equipment  Notes



or to the extent not applied on the  Applicable  Delivery  Date to the  purchase
price of the  Equipment  Notes,  shall be  re-deposited  by the Trustee with the
Depositary on the Applicable  Delivery Date in accordance  with the terms of the
Deposit Agreement.  The provisions of this Section 5.01(b) supersede and replace
the  provisions  of  Section  2.02 of the Basic  Agreement  with  respect to the
Applicable  Trust,  and  all  provisions  of the  Basic  Agreement  relating  to
Postponed  Notes and Section 2.02 of the Basic  Agreement shall not apply to the
Applicable Trust.

            (c) The Trustee  acknowledges its acceptance of all right, title and
interest in and to the Trust Property to be acquired pursuant to Section 5.01(b)
of this Trust Supplement,  the NPA and each Applicable  Participation Agreement,
and declares that it holds and will hold such right,  title and interest for the
benefit of all present and future Applicable Certificateholders, upon the trusts
set forth in this  Agreement.  By its  acceptance of an Applicable  Certificate,
each initial Applicable Certificateholder, as a grantor of the Applicable Trust,
joins with the Trustee in the creation of the Applicable  Trust.  The provisions
of this Section 5.01(c)  supersede and replace the provisions of Section 2.03 of
the Basic Agreement, with respect to the Applicable Trust.

            Section  5.02.  WITHDRAWAL  OF  DEPOSITS.  If  any  Deposits  remain
outstanding  on the Business Day next  succeeding  the Cut-off Date, the Trustee
shall give the Escrow Agent  notice that the  Trustee's  obligation  to purchase
Equipment  Notes under the NPA has  terminated  and instruct the Escrow Agent to
provide a notice of Final Withdrawal to the Depositary substantially in the form
of Exhibit B to the Deposit Agreement (the "FINAL WITHDRAWAL NOTICE").

            Section 5.03. THE TRUSTEE. (a) Subject to Section 5.04 of this Trust
Supplement  and Section 7.15 of the Basic  Agreement,  the Trustee  shall not be
responsible  in any  manner  whatsoever  for or in respect  of the  validity  or
sufficiency  of this Trust  Supplement,  the Deposit  Agreement,  the NPA or the
Escrow  Agreement or the due  execution  hereof or thereof by the Company or the
other  parties  thereto  (other than the  Trustee),  or for or in respect of the
recitals and statements  contained herein or therein,  all of which recitals and
statements  are made  solely by the  Company,  except  that the  Trustee  hereby
represents and warrants that each of this Trust Supplement, the Basic Agreement,
each Applicable Certificate, the Intercreditor Agreement, the NPA and the Escrow
Agreement  has been  executed  and  delivered by one of its officers who is duly
authorized to execute and deliver such document on its behalf.

            (b)  Except as herein  otherwise  provided  and  except  during  the
continuance  of an Event of Default in respect of the  Applicable  Trust created
hereby,  no duties,  responsibilities  or liabilities  are assumed,  or shall be
construed to be assumed, by the Trustee by reason of this Trust Supplement other
than as set forth in the  Agreement,  and this Trust  Supplement is executed and
accepted on behalf of the Trustee,  subject to all the terms and  conditions set
forth in the  Agreement,  as fully to all intents as if the same were herein set
forth at length.

            Section 5.04.  REPRESENTATIONS  AND  WARRANTIES OF THE TRUSTEE.  The
Trustee hereby represents and warrants that:

            (a) the  Trustee  has  full  power,  authority  and  legal  right to
      execute, deliver and perform this Trust Supplement,  the Escrow Agreement,



      the NPA and the Note  Documents to which it is or is to become a party and
      has taken all necessary  action to authorize the  execution,  delivery and
      performance by it of this Trust Supplement,  the Escrow Agreement, the NPA
      and the Note Documents to which it is or is to become a party;

            (b) the execution,  delivery and  performance by the Trustee of this
      Trust Supplement,  the Escrow Agreement and the Note Documents to which it
      is a party (i) will not violate any provision of any United States federal
      law or the law of the  state of the  United  States  where  it is  located
      governing the banking and trust powers of the Trustee or any order,  writ,
      judgment,  or decree of any court,  arbitrator or  governmental  authority
      applicable to the Trustee or any of its assets,  (ii) will not violate any
      provision of the articles of  association  or by-laws of the Trustee,  and
      (iii) will not violate any  provision of, or  constitute,  with or without
      notice or lapse of time,  a default  under,  or result in the  creation or
      imposition of any lien on any  properties  included in the Trust  Property
      pursuant to the provisions of any mortgage, indenture, contract, agreement
      or other undertaking to which it is a party,  which violation,  default or
      lien  could  reasonably  be  expected  to have an  adverse  effect  on the
      Trustee's  performance  or  ability to perform  its  duties  hereunder  or
      thereunder or on the transactions contemplated herein or therein;

            (c) the execution,  delivery and  performance by the Trustee of this
      Trust Supplement,  the Escrow Agreement, the NPA and the Note Documents to
      which it is or is to become a party will not  require  the  authorization,
      consent,  or  approval  of,  the  giving  of  notice  to,  the  filing  or
      registration  with,  or the taking of any other  action in respect of, any
      governmental  authority or agency of the United States or the state of the
      United  States where it is located  regulating  the banking and  corporate
      trust activities of the Trustee; and

            (d) this Trust  Supplement,  the Escrow  Agreement,  the NPA and the
      Note  Documents to which it is or is to become a party have been,  or will
      be,  as  applicable,  duly  executed  and  delivered  by the  Trustee  and
      constitute,  or will  constitute,  as  applicable,  the  legal,  valid and
      binding  agreements of the Trustee,  enforceable  against it in accordance
      with their respective terms; PROVIDED, HOWEVER, that enforceability may be
      limited  by  (i)  applicable   bankruptcy,   insolvency,   reorganization,
      moratorium or similar laws affecting the rights of creditors generally and
      (ii) general principles of equity.

            Section 5.05. TRUSTEE LIENS. The Trustee in its individual  capacity
agrees,  in addition to the  agreements  contained  in Section 7.17 of the Basic
Agreement,  that it will at its own cost and expense promptly take any action as
may be necessary to duly discharge and satisfy in full any Trustee's Liens on or
with respect to the Trust Property which is  attributable  to the Trustee in its
individual  capacity and which is unrelated to the transactions  contemplated by
the Intercreditor Agreement or the NPA.




                                   ARTICLE VI
                  ADDITIONAL AMENDMENT; SUPPLEMENTAL AGREEMENTS

            Section  6.01.  AMENDMENT  OF SECTION  5.02 OF THE BASIC  AGREEMENT.
Section  5.02 of the Basic  Agreement  shall be  amended,  with  respect  to the
Applicable Trust, by (i) replacing the phrase "of the Note Documents and of this
Agreement"  set forth in  paragraph  (b)  thereof  with the  phrase "of the Note
Documents,  of the NPA and of this  Agreement" and (ii) replacing the phrase "of
this Agreement and any Note Document" set forth in the last paragraph of Section
5.02 with the phrase "of this Agreement, the NPA and any Note Document".

            Section 6.02.  SUPPLEMENTAL AGREEMENTS WITHOUT CONSENT OF APPLICABLE
CERTIFICATEHOLDERS.  Without  limitation of Section 9.01 of the Basic Agreement,
under the terms of, and subject to the limitations contained in, Section 9.01 of
the Basic  Agreement,  the Company may (but will not be  required  to),  and the
Trustee (subject to Section 9.03 of the Basic Agreement) shall, at the Company's
request,  at any  time  and  from  time to  time,  (i)  enter  into  one or more
agreements  supplemental  to the  Escrow  Agreement,  the  NPA  or  the  Deposit
Agreement,  for any of the purposes set forth in clauses (1) through (9) of such
Section  9.01,  except that (a) clause (2) and (3) of such Section 9.01 shall be
deemed to include the Company's  obligations  under (in the case of clause (2)),
and the  Company's  rights and powers  conferred by (in the case of clause (3)),
the NPA,  (b)  clause  (4) of such  Section  9.01  shall be  deemed  to  include
corrections or supplements to provisions of the Escrow Agreement, the NPA or the
Deposit  Agreement  which  may be  defective  or  inconsistent  with  any  other
provision of this  Agreement or contained in any  agreement  referred to in such
clause  (4) and the curing of any  ambiguity  or the  modification  of any other
provision  with  respect  to  matters  or  questions  arising  under the  Escrow
Agreement,  the NPA or the Deposit  Agreement and (c)  references in clauses (6)
and (7) of such Section 9.01 to "any  Intercreditor  Agreement or any  Liquidity
Facility"  shall  be  deemed  to  refer  to "the  Intercreditor  Agreement,  the
Liquidity Facility, the Escrow Agreement,  the NPA or the Deposit Agreement" and
(ii) enter into one or more agreements supplemental to this Agreement to provide
for the formation of a Class D Trust, the issuance of Class D Certificates,  the
purchase by the Class D Trust of Equipment  Notes and other  matters  incidental
thereto or otherwise contemplated by Section 2.01(b) of the Basic Agreement.

            Section  6.03.  SUPPLEMENTAL  AGREEMENTS  WITH CONSENT OF APPLICABLE
CERTIFICATEHOLDERS.  Without  limitation of Section 9.02 of the Basic Agreement,
the provisions of Section 9.02 of the Basic  Agreement shall apply to agreements
or  amendments  for the purpose of adding any  provisions  to or changing in any
manner or eliminating any of the provisions of the Escrow Agreement, the Deposit
Agreement   or  the   NPA   to  the   extent   applicable   to  the   Applicable
Certificateholders  approving  such  agreement  or amendment or modifying in any
manner the rights and  obligations of such Applicable  Certificateholders  under
the Escrow  Agreement,  the  Deposit  Agreement  or the NPA;  provided  that the
provisions of Section  9.02(1) of the Basic Agreement shall be deemed to include
reductions  in any manner  of, or delay in the  timing  of,  any  receipt by the
Applicable Certificateholders of payments upon the Deposits.




                                   ARTICLE VII
                              TERMINATION OF TRUST

            Section  7.01.   TERMINATION  OF  THE  APPLICABLE   TRUST.  (a)  The
respective  obligations and responsibilities of the Company and the Trustee with
respect to the  Applicable  Trust  shall  terminate  upon the earlier of (A) the
completion  of the  assignment,  transfer and  discharge  described in the first
sentence of the  immediately  following  paragraph and (B)  distribution  to all
Applicable  Certificateholders  and the  Trustee of all  amounts  required to be
distributed  to them  pursuant  to this  Agreement  and the  disposition  of all
property held as part of the Trust Property; PROVIDED, HOWEVER, that in no event
shall the Applicable Trust continue beyond one hundred ten (110) years following
the date of the execution of this Trust Supplement.

            Upon the earlier of (i) the first  Business Day  following  July 31,
1999,  or, if later,  the fifth  Business  Day  following  the  Delivery  Period
Termination  Date and (ii) the fifth  Business Day following the date on which a
Triggering Event occurs (such date, the "TRANSFER DATE"), or, if later, the date
on which all of the conditions set forth in the immediately  following  sentence
have been  satisfied,  the  Trustee  is  hereby  directed  (subject  only to the
immediately following sentence) to, and the Company shall direct the institution
that will serve as the Related  Trustee  under the Related  Pass  Through  Trust
Agreement  to,  execute and deliver the  Assignment  and  Assumption  Agreement,
pursuant  to which the Trustee  shall  assign,  transfer  and deliver all of the
Trustee's right, title and interest to the Trust Property to the Related Trustee
under the Related  Pass  Through  Trust  Agreement.  The Trustee and the Related
Trustee shall execute and deliver the Assignment  and Assumption  Agreement upon
the satisfaction of the following conditions:

            (i) The Trustee, the Related Trustee and each of the Rating Agencies
      then rating the Applicable  Certificates  shall have received an Officer's
      Certificate and an Opinion of Counsel dated the date of the Assignment and
      Assumption  Agreement and each satisfying the requirements of Section 1.02
      of the Basic Agreement, which Opinion of Counsel shall be substantially to
      the effect set forth below and may be relied upon by the Beneficiaries (as
      defined in the Assignment and Assumption Agreement):

                  (I) upon the  execution  and  delivery  thereof by the parties
            thereto  in  accordance  with the  terms of this  Agreement  and the
            Related Pass Through Trust Agreement,  the Assignment and Assumption
            Agreement will  constitute the valid and binding  obligation of each
            of the  parties  thereto  enforceable  against  each  such  party in
            accordance with its terms;

                  (II) upon the  execution  and delivery of the  Assignment  and
            Assumption  Agreement in accordance with the terms of this Agreement
            and the Related Pass Through Trust Agreement, each of the Applicable
            Certificates  then  Outstanding  will be entitled to the benefits of
            the Related Pass Through Trust Agreement;

                  (III) the Related Trust is not required to be registered as an
            investment  company  under the  Investment  Company Act of 1940,  as
            amended;




                  (IV) the Related Pass Through Trust Agreement  constitutes the
            valid and binding obligation of the Company  enforceable against the
            Company in accordance with its terms; and

                  (V) neither the execution and delivery of the  Assignment  and
            Assumption  Agreement in accordance with the terms of this Agreement
            and the Related Pass Through Trust  Agreement,  nor the consummation
            by the  parties  thereto  of  the  transactions  contemplated  to be
            consummated  thereunder on the date thereof, will violate any law or
            governmental  rule or  regulation  of the  State  of New York or the
            United  States of America  known to such counsel to be applicable to
            the  transactions  contemplated  by the  Assignment  and  Assumption
            Agreement.

            (ii) The Trustee and the Company  shall have  received (x) a copy of
      the articles of incorporation  and bylaws of the Related Trustee certified
      as of the Transfer  Date by the  Secretary or Assistant  Secretary of such
      institution  and  (y) a copy  of the  filing  (including  all  attachments
      thereto) made by the  institution  serving as the Related Trustee with the
      Office of the Superintendent, State of New York Banking Department for the
      qualification  of the Related Trustee under Section 131(3) of the New York
      Banking Law.

Upon the execution of the  Assignment  and  Assumption  Agreement by the parties
thereto,   the   Applicable   Trust   shall  be   terminated,   the   Applicable
Certificateholders  shall receive  beneficial  interests in the Related Trust in
exchange for their interests in the Applicable  Trust equal to their  respective
beneficial  interests in the Applicable  Trust,  and the Outstanding  Applicable
Certificates representing Fractional Undivided Interests in the Applicable Trust
shall be deemed for all purposes of this  Agreement and the Related Pass Through
Trust Agreement,  without further signature or action of any party or Applicable
Certificateholder, to be certificates representing the same fractional undivided
interests in the Related  Trust and its trust  property.  By  acceptance  of its
Applicable  Certificate,  each  Applicable  Certificateholder  consents  to such
assignment,  transfer and  delivery of the Trust  Property to the trustee of the
Related Trust upon the execution and delivery of the  Assignment  and Assumption
Agreement.

            In connection  with the  occurrence of the event set forth in clause
(B) above,  notice of such  termination,  specifying the Distribution  Date upon
which  the  Applicable   Certificateholders   may  surrender  their   Applicable
Certificates  to  the  Trustee  for  payment  of  the  final   distribution  and
cancellation,   shall  be  mailed   promptly  by  the   Trustee  to   Applicable
Certificateholders not earlier than the 60th day and not later than the 15th day
next preceding such final Distribution Date specifying (A) the Distribution Date
upon which the proposed  final payment of the  Applicable  Certificates  will be
made upon presentation and surrender of Applicable Certificates at the office or
agency of the Trustee  therein  specified,  (B) the amount of any such  proposed
final  payment,  and (C) that  the  Record  Date  otherwise  applicable  to such
Distribution Date is not applicable,  payments being made only upon presentation
and  surrender  of the  Applicable  Certificates  at the office or agency of the
Trustee therein  specified.  The Trustee shall give such notice to the Registrar
at the  time  such  notice  is  given  to  Applicable  Certificateholders.  Upon
presentation  and surrender of the Applicable  Certificates  in accordance  with



such  notice,   the  Trustee  shall  cause  to  be   distributed  to  Applicable
Certificateholders such final payments.

            In the event that all of the Applicable Certificateholders shall not
surrender their Applicable Certificates for cancellation within six months after
the date specified in the above-mentioned written notice, the Trustee shall give
a second  written  notice  to the  remaining  Applicable  Certificateholders  to
surrender their  Applicable  Certificates for cancellation and receive the final
distribution  with respect thereto.  No additional  interest shall accrue on the
Applicable  Certificates  after the  Distribution  Date  specified  in the first
written notice.  In the event that any money held by the Trustee for the payment
of distributions on the Applicable  Certificates  shall remain unclaimed for two
years (or such lesser time as the Trustee shall be satisfied,  after sixty days'
notice from the Company, is one month prior to the escheat period provided under
applicable  law) after the final  distribution  date with respect  thereto,  the
Trustee shall pay to each Loan Trustee the appropriate  amount of money relating
to such Loan Trustee and shall give written  notice thereof to the related Owner
Trustees, the Owner Participants and the Company.

            (b) The  provisions  of this Section 7.01  supersede and replace the
provisions of Section 11.01 of the Basic Agreement in its entirety, with respect
to the Applicable Trust.

                                  ARTICLE VIII
                            MISCELLANEOUS PROVISIONS

            Section 8.01. BASIC AGREEMENT RATIFIED.  Except and so far as herein
expressly  provided,  all of the  provisions,  terms and conditions of the Basic
Agreement are in all respects  ratified and confirmed;  and the Basic  Agreement
and this Trust Supplement shall be taken, read and construed as one and the same
instrument.  All  replacements of provisions of, and other  modifications of the
Basic  Agreement set forth in this Trust  Supplement  are solely with respect to
the Applicable Trust.

            SECTION 8.02.  GOVERNING  LAW. THE AGREEMENT AND, UNTIL THE TRANSFER
DATE,  THE  APPLICABLE  CERTIFICATES  SHALL  BE  GOVERNED  BY AND  CONSTRUED  IN
ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE.  THIS SECTION 8.02 SUPERSEDES
AND  REPLACES  SECTION  12.05  OF  THE  BASIC  AGREEMENT,  WITH  RESPECT  TO THE
APPLICABLE TRUST.

            Section 8.03.  EXECUTION IN COUNTERPARTS.  This Trust Supplement may
be executed in any number of  counterparts,  each of which shall be an original,
but such counterparts shall together constitute but one and the same instrument.

            Section 8.04.  INTENTION OF PARTIES.  The parties hereto intend that
the  Applicable  Trust be classified  for U.S.  federal income tax purposes as a
grantor trust under  Subpart E, Part I of  Subchapter J of the Internal  Revenue
Code of  1986,  as  amended,  and not as a trust  or  association  taxable  as a
corporation or as a partnership. Each Applicable Certificateholder and Investor,



by its  acceptance  of  its  Applicable  Certificate  or a  beneficial  interest
therein,  agrees to treat the  Applicable  Trust as a grantor trust for all U.S.
federal, state and local income tax purposes. The powers granted and obligations
undertaken pursuant to the Agreement shall be so construed so as to further such
intent.



            IN WITNESS  WHEREOF,  the Company  and the Trustee  have caused this
Trust Supplement to be duly executed by their  respective  officers thereto duly
authorized, as of the day and year first written above.

                                          CONTINENTAL AIRLINES, INC.



                                          By:____________________________
                                              Name: Gerald Laderman
                                              Title:  Vice President


                                          WILMINGTON TRUST COMPANY,
                                                as Trustee



                                          By:____________________________
                                              Name:
                                              Title:



                                    EXHIBIT A

                               FORM OF CERTIFICATE

Certificate
No. ___

            [Unless   this   certificate   is   presented   by   an   authorized
representative of The Depository Trust Company, a New York corporation  ("DTC"),
to Issuer or its agent for  registration of transfer,  exchange or payment,  and
any certificate  issued is registered in the name of Cede & Co. or in such other
name as is requested by an authorized  representative of DTC (and any payment is
made to Cede & Co. or to such  other  entity as is  requested  by an  authorized
representative  of DTC),  ANY TRANSFER,  PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL  inasmuch the registered owner hereof,
Cede & Co., has an interest herein.]

               CONTINENTAL AIRLINES PASS THROUGH TRUST 1998-3A-2-O

     6.32% Continental Airlines Pass Through Certificate, Series 1998-3A-2-O
                         Issuance Date: November 3, 1998

                        Final Maturity Date: May 1, 2010

          Evidencing A Fractional Undivided Interest In The Continental
         Airlines Pass Through Trust 1998-3A-2-O, The Property Of Which
       Includes Certain Equipment Notes Each Secured By An Aircraft Leased
                    To Or Owned By Continental Airlines, Inc.

                   $___________ Fractional Undivided Interest
          representing .000502033% of the Trust per $1,000 face amount

            THIS CERTIFIES THAT  __________________,  for value received, is the
registered  owner  of  a  $_____________   (_____________   dollars)  Fractional
Undivided  Interest in the Continental  Airlines Pass Through Trust  1998-3A-2-O
(the "TRUST") created by Wilmington  Trust Company,  as trustee (the "TRUSTEE"),
pursuant to a Pass Through Trust Agreement,  dated as of September 25, 1997 (the
"BASIC  AGREEMENT"),  between the  Trustee and  Continental  Airlines,  Inc.,  a
Delaware  corporation (the  "Company"),  as supplemented by Trust Supplement No.

- ----------

This  legend to appear  on  Book-Entry  Certificates  to be  deposited  with the
Depository Trust Company.



1998-3A-2-O  thereto,  dated as of November 3, 1998 (the "Trust Supplement" and,
together with the Basic Agreement, the "AGREEMENT"), between the Trustee and the
Company, a summary of certain of the pertinent  provisions of which is set forth
below. To the extent not otherwise  defined herein,  the capitalized  terms used
herein have the meanings assigned to them in the Agreement.  This Certificate is
one of  the  duly  authorized  Certificates  designated  as  "6.32%  Continental
Airlines  Pass Through  Certificates,  Series  1998-3A-2-O"  (herein  called the
"CERTIFICATES").  This  Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement.  By virtue of its acceptance hereof,
the holder of this Certificate (the  "CERTIFICATEHOLDER"  and, together with all
other holders of  Certificates  issued by the Trust,  the  "CERTIFICATEHOLDERS")
assents to and agrees to be bound by the  provisions  of the  Agreement  and the
Intercreditor  Agreement.  The property of the Trust includes certain  Equipment
Notes and all rights of the Trust to receive  payments  under the  Intercreditor
Agreement and the Liquidity Facility (the "TRUST  PROPERTY").  Each issue of the
Equipment  Notes is secured by, among other  things,  a security  interest in an
Aircraft leased to or owned by the Company.

            The Certificates  represent  Fractional  Undivided  Interests in the
Trust and the Trust Property and have no rights, benefits or interest in respect
of any  other  separate  trust  established  pursuant  to the terms of the Basic
Agreement for any other series of certificates issued pursuant thereto.

            Subject to and in accordance with the terms of the Agreement and the
Intercreditor Agreement, from funds then available to the Trustee, there will be
distributed  on  each  May 1 and  November  1 (a  "REGULAR  DISTRIBUTION  DATE")
commencing  May 1,  1999,  to the  Person  in whose  name  this  Certificate  is
registered  at the  close of  business  on the 15th day  preceding  the  Regular
Distribution  Date,  an amount  in  respect  of the  Scheduled  Payments  on the
Equipment Notes due on such Regular  Distribution Date, the receipt of which has
been confirmed by the Trustee,  equal to the product of the percentage  interest
in the Trust  evidenced  by this  Certificate  and an amount equal to the sum of
such  Scheduled  Payments.  Subject to and in  accordance  with the terms of the
Agreement and the Intercreditor Agreement, in the event that Special Payments on
the Equipment  Notes are received by the Trustee,  from funds then  available to
the Trustee,  there shall be distributed on the applicable Special  Distribution
Date, to the Person in whose name this Certificate is registered at the close of
business on the 15th day preceding the Special  Distribution  Date, an amount in
respect of such Special  Payments on the Equipment  Notes,  the receipt of which
has been  confirmed  by the  Trustee,  equal to the  product  of the  percentage
interest in the Trust  evidenced by this  Certificate and an amount equal to the
sum of such Special  Payments so  received.  If a Regular  Distribution  Date or
Special  Distribution Date is not a Business Day,  distribution shall be made on
the immediately following Business Day with the same force and effect as if made
on such Regular  Distribution Date or Special  Distribution Date and no interest
shall accrue  during the  intervening  period.  The Trustee shall mail notice of
each  Special  Payment  and  the  Special  Distribution  Date  therefor  to  the
Certificateholder of this Certificate.

            Distributions  on this  Certificate  will be made by the  Trustee by
check mailed to the Person entitled thereto,  without  presentation or surrender
of this  Certificate  or the making of any  notation  hereon,  except  that with



respect to Certificates  registered on the Record Date in the name of a Clearing
Agency  (or its  nominee),  such  distribution  shall be made by wire  transfer.
Except as otherwise provided in the Agreement and notwithstanding the above, the
final  distribution on this  Certificate will be made after notice mailed by the
Trustee of the  pendency of such  distribution  and only upon  presentation  and
surrender of this  Certificate at the office or agency of the Trustee  specified
in such notice.

            The  Certificates  do not  represent a direct  obligation  of, or an
obligation  guaranteed  by, or an interest in, the Company or the Trustee or any
affiliate thereof. The Certificates are limited in right of payment, all as more
specifically set forth on the face hereof and in the Agreement.  All payments or
distributions made to Certificateholders  under the Agreement shall be made only
from the Trust  Property  and only to the  extent  that the  Trustee  shall have
sufficient  income or proceeds from the Trust  Property to make such payments in
accordance  with the  terms of the  Agreement.  Each  Certificateholder  of this
Certificate,  by its acceptance  hereof,  agrees that it will look solely to the
income  and  proceeds  from the  Trust  Property  to the  extent  available  for
distribution  to such  Certificateholder  as  provided  in the  Agreement.  This
Certificate does not purport to summarize the Agreement and reference is made to
the Agreement for information with respect to the interests,  rights,  benefits,
obligations,  proceeds, and duties evidenced hereby. A copy of the Agreement may
be examined during normal business hours at the principal office of the Trustee,
and  at  such  other  places,  if  any,   designated  by  the  Trustee,  by  any
Certificateholder upon request.

            The Agreement permits, with certain exceptions therein provided, the
amendment  thereof and the  modification  of the rights and  obligations  of the
Company and the rights of the Certificateholders under the Agreement at any time
by the  Company  and the  Trustee  with the  consent  of the  Certificateholders
holding Certificates  evidencing  Fractional Undivided Interests aggregating not
less  than a  majority  in  interest  in the  Trust.  Any  such  consent  by the
Certificateholder  of this  Certificate  shall be conclusive and binding on such
Certificateholder and upon all future Certificateholders of this Certificate and
of any  Certificate  issued upon the transfer hereof or in exchange hereof or in
lieu  hereof  whether  or not  notation  of  such  consent  is  made  upon  this
Certificate.  The  Agreement  also  permits the  amendment  thereof,  in certain
limited  circumstances,  without the consent of the Certificateholders of any of
the Certificates.

            As provided in the Agreement and subject to certain  limitations set
forth therein,  the transfer of this  Certificate is registrable in the Register
upon surrender of this  Certificate for  registration of transfer at the offices
or agencies  maintained by the Trustee in its capacity as  Registrar,  or by any
successor  Registrar,  duly endorsed or accompanied  by a written  instrument of
transfer in form satisfactory to the Trustee and the Registrar, duly executed by
the  Certificateholder   hereof  or  such   Certificateholder's   attorney  duly
authorized in writing,  and thereupon one or more new Certificates of authorized
denominations evidencing the same aggregate Fractional Undivided Interest in the
Trust will be issued to the designated transferee or transferees.

            Under certain  circumstances  set forth in Section 7.01 of the Trust
Supplement, all of the Trustee's right, title and interest to the Trust Property
may be assigned, transferred and delivered to the Related Trustee of the Related



Trust  pursuant  to  the  Assignment   and   Assumption   Agreement.   Upon  the
effectiveness of such Assignment and Assumption Agreement (the "Transfer"),  the
Trust shall be  terminated,  the  Certificateholders  shall  receive  beneficial
interests  in the Related  Trust in exchange  for their  interests  in the Trust
equal to their  respective  beneficial  interests in the Trust, the Certificates
representing Fractional Undivided Interests in the Trust shall be deemed for all
purposes of the  Agreement  and the Related Pass Through  Trust  Agreement to be
certificates representing the same fractional undivided interests in the Related
Trust and its trust property. Each Certificateholder,  by its acceptance of this
Certificate  or a  beneficial  interest  herein,  agrees  to  be  bound  by  the
Assignment and Assumption Agreement and subject to the terms of the Related Pass
Through Trust Agreement as a  Certificateholder  thereunder.  From and after the
Transfer,  unless and to the extent the context otherwise  requires,  references
herein to the Trust, the Agreement and the Trustee shall  constitute  references
to the Related  Trust,  the Related Pass Through Trust  Agreement and trustee of
the Related Trust, respectively.

            The  Certificates  are  issuable  only  as  registered  Certificates
without coupons in minimum denominations of $1,000 Fractional Undivided Interest
and integral  multiples  thereof except that one  Certificate may be issued in a
different  denomination.  As  provided in the  Agreement  and subject to certain
limitations  therein  set  forth,  the  Certificates  are  exchangeable  for new
Certificates   of  authorized   denominations   evidencing  the  same  aggregate
Fractional   Undivided   Interest   in   the   Trust,   as   requested   by  the
Certificateholder surrendering the same.

            No service charge will be made for any such registration of transfer
or exchange,  but the Trustee shall require payment of a sum sufficient to cover
any tax or governmental charge payable in connection therewith.

            Each  Certificateholder  and  Investor,  by its  acceptance  of this
Certificate  or a  beneficial  interest  herein,  agrees to treat the Trust as a
grantor trust for all U.S. federal, state and local income tax purposes.

            The  Trustee,  the  Registrar,  and any agent of the  Trustee or the
Registrar may treat the person in whose name this  Certificate  is registered as
the owner hereof for all purposes,  and neither the Trustee, the Registrar,  nor
any such agent shall be affected by any notice to the contrary.

            The  obligations and  responsibilities  created by the Agreement and
the  Trust  created   thereby  shall   terminate   upon  the   distribution   to
Certificateholders of all amounts required to be distributed to them pursuant to
the  Agreement  and the  disposition  of all property  held as part of the Trust
Property.

            Any Person  acquiring or accepting  this  Certificate or an interest
herein will, by such  acquisition or acceptance,  be deemed to have  represented
and warranted to and for the benefit of each Owner  Participant  and the Company
that  either:  (i) the assets of an employee  benefit plan subject to Title I of
the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), or of
a plan subject to Section 4975 of the Internal  Revenue Code of 1986, as amended
(the  "CODE"),  have not been used to purchase this  Certificate  or an interest
herein or (ii) the  purchase  and  holding of this  Certificate  or an  interest



herein are exempt from the prohibited transaction  restrictions of ERISA and the
Code pursuant to one or more prohibited  transaction statutory or administrative
exemptions.

            THE AGREEMENT AND,  UNTIL THE TRANSFER,  THIS  CERTIFICATE  SHALL BE
GOVERNED BY AND CONSTRUED IN  ACCORDANCE  WITH THE LAWS OF THE STATE OF DELAWARE
AND THE  OBLIGATIONS,  RIGHTS AND  REMEDIES  OF THE PARTIES  HEREUNDER  SHALL BE
DETERMINED  IN  ACCORDANCE  WITH SUCH  LAWS.  THE  RELATED  PASS  THROUGH  TRUST
AGREEMENT AND, FROM AND AFTER THE TRANSFER,  THIS CERTIFICATE  SHALL BE GOVERNED
AND  CONSTRUED  IN  ACCORDANCE  WITH THE  LAWS OF THE  STATE OF NEW YORK AND THE
OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS.

            Unless the certificate of authentication hereon has been executed by
the Trustee, by manual signature,  this Certificate shall not be entitled to any
benefit under the Agreement or be valid for any purpose.

            IN WITNESS  WHEREOF,  the Trustee has caused this  Certificate to be
duly executed.

                                   CONTINENTAL AIRLINES PASS THROUGH 
                                   TRUST 1998-3A-2-O

                                   By:  WILMINGTON TRUST COMPANY,
                                        as Trustee



                                        By:_______________________________ 
                                           Name:
                                           Title:



               FORM OF THE TRUSTEE'S CERTIFICATE OF AUTHENTICATION

            This is one of the Certificates  referred to in the within-mentioned
Agreement.

                                   WILMINGTON TRUST COMPANY,
                                        as Trustee



                                   By:__________________________________  
                                      Name:
                                      Title:



                                    EXHIBIT B

                         [DTC Letter of Representations]



                                    EXHIBIT C

                   FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT
               Continental Airlines Pass Through Trust 1998-3A-2-O

            ASSIGNMENT AND ASSUMPTION AGREEMENT,  dated ____________,  ____ (the
"ASSIGNMENT  AGREEMENT"),  between  Wilmington Trust Company, a Delaware banking
corporation ("WTC"), not in its individual capacity except as expressly provided
herein, but solely as trustee under the Pass Through Trust Agreement dated as of
September  25,  1997 (as  amended  or  modified  from time to time,  the  "BASIC
AGREEMENT"),  as  supplemented  by the Trust  Supplement No.  1998-3A-2-O  dated
November 3, 1998 (the "TRUST  SUPPLEMENT" and together with the Basic Agreement,
the  "AGREEMENT")  in respect of the  Continental  Airlines  Pass Through  Trust
1998-3A-2-O (the "ASSIGNOR"),  and Wilmington Trust Company,  a Delaware banking
corporation, not in its individual capacity except as expressly provided herein,
but solely as trustee  under the Basic  Agreement as  supplemented  by the Trust
Supplement No.  1998-3A-2-S dated November 3, 1998 (the "NEW  SUPPLEMENT",  and,
together  with the Basic  Agreement,  the "NEW  AGREEMENT")  in  respect  of the
Continental Airlines Pass Through Trust 1998-3A-2-S (the "ASSIGNEE").

                              W I T N E S S E T H:

            WHEREAS, the parties hereto desire to effect on the date hereof (the
"TRANSFER  DATE") (a) the transfer by the Assignor to the Assignee of all of the
right,  title and  interest of the Assignor in, under and with respect to, among
other things,  the Trust Property and each of the documents listed in Schedule I
hereto (the "SCHEDULED DOCUMENTS") and (b) the assumption by the Assignee of the
obligations  of the  Assignor  (i) under  the  Scheduled  Documents  and (ii) in
respect of the Applicable Certificates issued under the Agreement; and

            WHEREAS,   the  Scheduled   Documents   permit  such  transfer  upon
satisfaction of certain  conditions  heretofore or  concurrently  herewith being
complied with;

            NOW,  THEREFORE,  in consideration of the premises and of the mutual
covenants and agreements herein contained, the parties hereto do hereby agree as
follows  (capitalized  terms used herein without  definition  having the meaning
ascribed thereto in the Agreement):

            1.  ASSIGNMENT.  The  Assignor  does hereby  sell,  assign,  convey,
transfer  and set over  unto the  Assignee  as of the  Transfer  Date all of its
present and future  right,  title and interest in, under and with respect to the
Trust Property and the Scheduled  Documents and each other contract,  agreement,
document or instrument relating to the Trust Property or the Scheduled Documents
(such other contracts, agreements,  documents or instruments,  together with the
Scheduled  Documents,  to be referred to as the "ASSIGNED  DOCUMENTS"),  and any
proceeds therefrom,  together with all documents and instruments  evidencing any
of such right, title and interest.




            2.  ASSUMPTION.  The Assignee  hereby assumes for the benefit of the
Assignor and each of the parties listed in Schedule II hereto (collectively, the
"BENEFICIARIES")  all of the duties and  obligations  of the Assignor,  whenever
accrued, pursuant to the Assigned Documents and hereby confirms that it shall be
deemed a party to each of the  Assigned  Documents  to which the  Assignor  is a
party and shall be bound by all the terms thereof  (including the agreements and
obligations  of the  Assignor  set forth  therein)  as if  therein  named as the
Assignor.  Further,  the Assignee hereby assumes for the benefit of the Assignor
and the  Beneficiaries  all of the duties and  obligations of the Assignor under
the Outstanding Applicable  Certificates and hereby confirms that the Applicable
Certificates  representing  Fractional  Undivided  Interests under the Agreement
shall be deemed for all purposes of the  Agreement  and the New  Agreement to be
certificates  representing the same fractional undivided interests under the New
Agreement equal to their  respective  beneficial  interests in the trust created
under the Agreement.

            3. EFFECTIVENESS.  This Assignment Agreement shall be effective upon
the execution and delivery  hereof by the parties  hereto,  and each  Applicable
Certificateholder,  by  its  acceptance  of  its  Applicable  Certificate  or  a
beneficial interest therein,  agrees to be bound by the terms of this Assignment
Agreement.

            4. PAYMENTS. The Assignor hereby covenants and agrees to pay over to
the Assignee,  if and when received  following  the Transfer  Date,  any amounts
(including  any sums payable as interest in respect  thereof) paid to or for the
benefit of the Assignor that, under Section 1 hereof, belong to the Assignee.

            5. FURTHER ASSURANCES. The Assignor shall, at any time and from time
to time, upon the request of the Assignee, promptly and duly execute and deliver
any and all such further  instruments and documents and take such further action
as the  Assignee  may  reasonably  request to obtain the full  benefits  of this
Assignment  Agreement and of the right and powers herein  granted.  The Assignor
agrees to deliver any Applicable  Certificates,  and all Trust Property, if any,
then in the physical possession of the Assignor, to the Assignee.

            6.  REPRESENTATIONS AND WARRANTIES.  (a) The Assignee represents and
warrants to the Assignor and each of the Beneficiaries that:

            (i) it has all  requisite  power and  authority  and legal  right to
      enter into and carry out the transactions contemplated hereby and to carry
      out and perform the  obligations  of the "Pass Through  Trustee" under the
      Assigned Documents;

            (ii)  on  and  as  of  the  date  hereof,  the  representations  and
      warranties  of the  Assignee  set  forth  in  Section  7.15  of the  Basic
      Agreement and Section 5.04 of the New Supplement are true and correct.

            (b) The Assignor represents and warrants to the Assignee that:

            (i) it is duly  incorporated,  validly existing and in good standing
      under  the laws of the State of  Delaware  and has the full  trust  power,



      authority  and legal right under the laws of the State of Delaware and the
      United States  pertaining to its trust and fiduciary powers to execute and
      deliver this Assignment Agreement;

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

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

            7. GOVERNING LAW. THIS ASSIGNMENT AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK INCLUDING MATTERS
OF CONSTRUCTION, VALIDITY AND PERFORMANCE.

            8.  COUNTERPARTS.  This Assignment  Agreement may be executed in any
number  of  counterparts,  all of  which  together  shall  constitute  a  single
instrument.  It shall not be necessary  that any  counterpart  be signed by both
parties so long as each party shall sign at least one counterpart.

            9. THIRD PARTY  BENEFICIARIES.  The Assignee hereby agrees,  for the
benefit of the Beneficiaries, that its representations, warranties and covenants
contained  herein are also  intended to be for the benefit of each  Beneficiary,
and each  Beneficiary  shall be deemed to be an express third party  beneficiary
with  respect  thereto,  entitled  to enforce  directly  and in its own name any
rights or claims it may have against such party as such beneficiary.



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

                                   ASSIGNOR:
                                   WILMINGTON TRUST  COMPANY,  not in its
                                      individual    capacity   except   as
                                      expressly   provided   herein,   but
                                      solely  as  trustee  under  the Pass
                                      Through  Trust  Agreement  and Trust
                                      Supplement   in   respect   of   the
                                      Continental  Airlines  Pass  Through
                                      Trust 1998-3A-2-O



                                   By:_____________________________________
                                      Title:


                                   ASSIGNEE:
                                   WILMINGTON TRUST  COMPANY,  not in its
                                      individual    capacity   except   as
                                      expressly   provided   herein,   but
                                      solely  as  trustee  under  the Pass
                                      Through  Trust  Agreement  and Trust
                                      Supplement   in   respect   of   the
                                      Continental  Airlines  Pass  Through
                                      Trust 1998-3A-2-S



                                   By:_____________________________________
                                      Title:


                                   Schedule I

                         Schedule of Assigned Documents

            (1)  Intercreditor  Agreement dated as of November 3, 1998 among the
Trustee, the Other Trustees,  the Liquidity Provider, the liquidity provider, if
any,  relating to the Certificates  issued under (and as defined in) each of the
Other Agreements and the Subordination Agent.

            (2)  Escrow  and  Paying  Agent  Agreement  (Class  A-2) dated as of
November 3, 1998 among the Escrow Agent, the  Underwriters,  the Trustee and the
Paying Agent.

            (3) Note Purchase  Agreement  dated as of November 3, 1998 among the
Company, the Trustee, the Other Trustees, the Depositary,  the Escrow Agent, the
Paying Agent and the Subordination Agent.

            (4)  Deposit  Agreement  (Class  A-2) dated as of  November  3, 1998
between the Escrow Agent and the Depositary.

            (5)  Each  of  the   Operative   Agreements   (as   defined  in  the
Participation Agreement for each Aircraft) in effect as of the Transfer Date.



                                   Schedule II

                            Schedule of Beneficiaries

Wilmington  Trust  Company,  not  in  its  individual  capacity  but  solely  as
Subordination Agent

Wilmington  Trust Company,  not in its individual  capacity but solely as Paying
Agent

Westdeutsche Landesbank Girozentrale, as Liquidity Provider

Continental Airlines, Inc.

Morgan Stanley & Co. Incorporated, as Underwriter

Credit Suisse First Boston Corporation, as Underwriter

Chase Securities Inc., as Underwriter

Donaldson, Lufkin & Jenrette Securities Corporation, as Underwriter

Salomon Smith Barney Inc., as Underwriter

First Security Bank, National Association, as Escrow Agent

Each of the other parties to the Assigned Documents


                        TRUST SUPPLEMENT No. 1998-3A-2-S

                             Dated November 3, 1998


                                     between

                            WILMINGTON TRUST COMPANY
                                   as Trustee,


                                       and


                           CONTINENTAL AIRLINES, INC.

                                       to

                          PASS THROUGH TRUST AGREEMENT
                         Dated as of September 25, 1997


                                  $199,190,000

               Continental Airlines Pass Through Trust 1998-3A-2-S
                           6.32% Continental Airlines
                           Pass Through Certificates,
                               Series 1998-3A-2-S



            This Trust Supplement No. 1998-3A-2-S,  dated as of November 3, 1998
(herein called the "TRUST SUPPLEMENT"),  between Continental  Airlines,  Inc., a
Delaware  corporation  (the  "COMPANY"),   and  Wilmington  Trust  Company  (the
"TRUSTEE"), to the Pass Through Trust Agreement, dated as of September 25, 1997,
between the Company and the Trustee (the "BASIC Agreement").

                              W I T N E S S E T H:

            WHEREAS,  the  Basic  Agreement,   unlimited  as  to  the  aggregate
principal amount of Certificates (unless otherwise specified herein, capitalized
terms used herein without definition having the respective meanings specified in
the Basic  Agreement)  which  may be  issued  thereunder,  has  heretofore  been
executed and delivered;

            WHEREAS, the Company has obtained commitments from Boeing for the
delivery of certain Aircraft;

            WHEREAS,  as of the Transfer  Date (as defined  below),  the Company
will have financed the  acquisition of all or a portion of such Aircraft  either
(i) through  separate  leveraged lease  transactions,  in which case the Company
leases such  Aircraft  (collectively,  the "LEASED  AIRCRAFT"),  or (ii) through
separate secured loan transactions, in which case the Company owns such Aircraft
(collectively, the "OWNED AIRCRAFT");

            WHEREAS,  as of the  Transfer  Date,  in the  case  of  each  Leased
Aircraft,  each  Owner  Trustee,  acting on behalf  of the  corresponding  Owner
Participant, will have issued pursuant to an Indenture, on a non-recourse basis,
Equipment  Notes in order to  finance a portion  of its  purchase  price of such
Leased Aircraft;

            WHEREAS,  as of  the  Transfer  Date,  in the  case  of  each  Owned
Aircraft,  the Company will have issued pursuant to an Indenture,  on a recourse
basis,  Equipment Notes to finance a portion of the purchase price of such Owned
Aircraft;

            WHEREAS,  as of the Transfer Date, the Related  Trustee will assign,
transfer  and deliver all of such  trustee's  right,  title and  interest to the
trust  property  held by the  Related  Trustee to the  Trustee  pursuant  to the
Assignment and Assumption Agreement (as defined below);

            WHEREAS,  the  Trustee,  effective  only,  but  automatically,  upon
execution  and delivery of the  Assignment  and  Assumption  Agreement,  will be
deemed to have  declared the creation of the  Continental  Airlines Pass Through
Trust  1998-3A-2-S  (the  "APPLICABLE  TRUST") for the benefit of the Applicable
Certificateholders, and each Holder of Applicable Certificates outstanding as of
the Transfer Date, as the grantors of the Applicable  Trust, by their respective
acceptances of such Applicable  Certificates,  will join in the creation of this
Applicable Trust with the Trustee;




            WHEREAS, all Applicable Certificates deemed issued by the Applicable
Trust will evidence  fractional  undivided interests in the Applicable Trust and
will convey no rights,  benefits or interests  in respect of any property  other
than the Trust Property  except for those  Applicable  Certificates  to which an
Escrow Receipt (as defined below) has been affixed;

            WHEREAS,  upon the  execution  and  delivery of the  Assignment  and
Assumption Agreement,  all of the conditions and requirements  necessary to make
this Trust Supplement,  when duly executed and delivered,  a valid,  binding and
legal  instrument  in  accordance  with its  terms and for the  purposes  herein
expressed,  have been done,  performed  and  fulfilled,  and the  execution  and
delivery  of this Trust  Supplement  in the form and with the terms  hereof have
been in all respects duly authorized;

            WHEREAS,  this Trust  Supplement is subject to the provisions of the
Trust Indenture Act of 1939, as amended, and shall, to the extent applicable, be
governed by such provisions;

            NOW THEREFORE, in consideration of the premises herein, it is agreed
between the Company and the Trustee as follows:

                                    ARTICLE I
                                THE CERTIFICATES

            Section 1.01. THE CERTIFICATES. The Applicable Certificates shall be
known  as  "6.32%  Continental  Airlines  Pass  Through   Certificates,   Series
1998-3A-2-S".  Each  Applicable  Certificate  represents a fractional  undivided
interest in the Applicable  Trust created  hereby.  The Applicable  Certificates
shall be the only instruments  evidencing a fractional undivided interest in the
Applicable Trust.

            The terms and conditions  applicable to the Applicable  Certificates
are as follows:

            (a) The aggregate  principal  amount of the Applicable  Certificates
      that shall be initially  deemed issued under the Agreement  shall be equal
      to  the  aggregate   principal  amount  of   "Outstanding"   pass  through
      certificates  representing  fractional  undivided interests in the Related
      Trust on the Transfer Date.

            (b) The Regular  Distribution  Dates with  respect to any payment of
      Scheduled Payments means May 1 and November 1 of each year,  commencing on
      May 1, 1999,  until  payment of all of the  Scheduled  Payments to be made
      under the Equipment Notes has been made.

            (c) The Special  Distribution  Dates with respect to the  Applicable
      Certificates  means any Business  Day on which a Special  Payment is to be
      distributed pursuant to the Agreement.

            (d) At the Escrow Agent's  request under the Escrow  Agreement,  the
      Trustee shall affix the  corresponding  Escrow Receipt to each  Applicable



      Certificate.  In any event,  any  transfer or  exchange of any  Applicable
      Certificate shall also effect a transfer or exchange of the related Escrow
      Receipt.  Prior to the Final  Withdrawal  Date, no transfer or exchange of
      any Applicable  Certificate  shall be permitted  unless the  corresponding
      Escrow  Receipt  is  attached  thereto  and  also  is  so  transferred  or
      exchanged.  By acceptance of any Applicable Certificate to which an Escrow
      Receipt  is  attached,  each  Holder  of  such an  Applicable  Certificate
      acknowledges  and  accepts  the  restrictions  on  transfer  of the Escrow
      Receipt set forth herein and in the Escrow Agreement.

            (e) (i) The Applicable Certificates shall be in the form attached as
      Exhibit  A to  the  Related  Pass  Through  Trust  Supplement,  with  such
      appropriate insertions,  omissions,  substitutions and other variations as
      are required or permitted by the Related Pass Through  Trust  Agreement or
      the Agreement, as the case may be, or as the Trustee may deem appropriate,
      to reflect  the fact that the  Applicable  Certificates  are being  issued
      under the  Agreement as opposed to under the Related  Pass  Through  Trust
      Agreement.  Any Person acquiring or accepting an Applicable Certificate or
      an interest therein will, by such acquisition or acceptance,  be deemed to
      represent and warrant to and for the benefit of each Owner Participant and
      the Company that either (i) the assets of an employee benefit plan subject
      to Title I of the Employee  Retirement  Income  Security  Act of 1974,  as
      amended  ("ERISA"),  or of a plan  subject to Section 4975 of the Internal
      Revenue  Code of 1986,  as  amended  (the  "Code"),  have not been used to
      purchase  Applicable  Certificates  or an  interest  therein  or (ii)  the
      purchase and holding of Applicable  Certificates or an interest therein is
      exempt from the prohibited transaction  restrictions of ERISA and the Code
      pursuant to one or more prohibited transaction statutory or administrative
      exemptions.

                  (ii)  The   Applicable   Certificates   shall  be   Book-Entry
      Certificates  and  shall be  subject  to the  conditions  set forth in the
      Letter of  Representations  between the Company  and the  Clearing  Agency
      attached as Exhibit B to the Related Pass Through Trust Supplement.

            (f)  the  "Participation   Agreements"  as  defined  in  this  Trust
      Supplement  are the "Note  Purchase  Agreements"  referred to in the Basic
      Agreement.

            (g) The  Applicable  Certificates  are subject to the  Intercreditor
      Agreement, the Deposit Agreement and the Escrow Agreement.

            (h) The Applicable  Certificates are entitled to the benefits of the
      Liquidity Facility.

            (i)   The Responsible Party is the Company.

            (j) The date referred to in clause (i) of the definition of the term
      "PTC Event of Default" in the Basic Agreement is the Final Maturity Date.

            (k) The particular  "sections of the Note Purchase  Agreement",  for
      purposes of clause (3) of Section 7.07 of the Basic  Agreement are Section
      8.1 (with  respect to Owned  Aircraft)  and Section  9.1 (with  respect to
      Leased Aircraft) of each Participation Agreement.




            (l) The  Equipment  Notes to be acquired and held in the  Applicable
      Trust, and the related  Aircraft and Note Documents,  are described in the
      NPA.

                                   ARTICLE II
                                   DEFINITIONS

            Section 2.01.  DEFINITIONS.  For all purposes of the Basic Agreement
as supplemented by this Trust Supplement,  the following  capitalized terms have
the following meanings (any term used herein which is defined in both this Trust
Supplement and the Basic  Agreement shall have the meaning  assigned  thereto in
this Trust  Supplement for purposes of the Basic  Agreement as  supplemented  by
this Trust Supplement):

            AGREEMENT:  Means the Basic Agreement, as supplemented by this Trust
      Supplement.

            AIRCRAFT:  Means each of the New Aircraft or Substitute  Aircraft in
      respect of which a  Participation  Agreement is entered into in accordance
      with the NPA (or any  substitute  aircraft,  including  engines  therefor,
      owned by or leased  to the  Company  and  securing  one or more  Equipment
      Notes).

            APPLICABLE CERTIFICATE:  Means any of the "Applicable  Certificates"
      issued by the Related Trust and that are  "Outstanding" (as defined in the
      Related  Pass  Through  Trust  Agreement)  as of the  Transfer  Date  (the
      "TRANSFER  DATE  CERTIFICATES")  and any  Certificate  issued in  exchange
      therefor or replacement thereof pursuant to the
      Agreement.

            APPLICABLE CERTIFICATEHOLDER:  Means the Person in whose name an
      Applicable Certificate is registered on the Register for the Applicable
      Certificates.

            APPLICABLE TRUST: Has the meaning specified in the recitals hereto.

            ASSIGNMENT  AND  ASSUMPTION  AGREEMENT:  Means  the  assignment  and
      assumption agreement substantially in the form of Exhibit C to the Related
      Pass Through Trust  Supplement  executed and delivered in accordance  with
      Section 7.01 of the Related Trust Supplement.

            BASIC AGREEMENT: Has the meaning specified in the first paragraph of
      this Trust Supplement.

            BOEING:  Means The Boeing Company.

            BUSINESS DAY: Means any day other than a Saturday, a Sunday or a day
      on which  commercial banks are required or authorized to close in Houston,
      Texas,  New  York,  New  York,  Salt  Lake  City,  Utah or, so long as any
      Applicable  Certificate  is  Outstanding,  the city and state in which the



      Trustee  or any Loan  Trustee  maintains  its  Corporate  Trust  Office or
      receives and disburses funds.

            CLASS C  CERTIFICATEHOLDER:  Has the  meaning  specified  in Section
      4.01(b)(iii) of this Trust Supplement.

            CLASS  C  FRACTIONAL  UNDIVIDED  INTEREST:  Means,  at any  date  of
      computation, the fractional interest in the relevant Trust held by a Class
      C  Certificateholder  multiplied  by the Pool  Balance  (as defined in the
      Intercreditor  Agreement) of such Trust and divided by the aggregate  Pool
      Balances  (as  defined in the  Intercreditor  Agreement)  of the Class C-1
      Trust and the Class C-2 Trust, all determined at such date.

            CLASS D  CERTIFICATEHOLDER:  Has the  meaning  specified  in Section
      4.01(b)(iv) of this Trust Supplement.

            COMPANY:  Has the meaning  specified in the first  paragraph of this
      Trust Supplement.

            CONTROLLING  PARTY: Has the meaning  specified in the  Intercreditor
      Agreement.

            DELIVERY NOTICE:  Has the meaning specified in the NPA.

            DELIVERY PERIOD  TERMINATION  DATE: Has the meaning specified in the
      Related Pass Through Trust Supplement.

            DEPOSITS:  Has the meaning specified in the Deposit Agreement.

            DEPOSIT AGREEMENT:  Means the Deposit Agreement dated as of November
      3, 1998 relating to the Applicable Certificates between the Depositary and
      the Escrow Agent,  as the same may be amended,  supplemented  or otherwise
      modified from time to time in accordance with its terms.

            DEPOSITARY:  Means Credit Suisse First Boston, a Swiss bank,  acting
      through its New York branch.

            DISTRIBUTION  DATE: Means any Regular  Distribution  Date or Special
      Distribution Date as the context requires.

            ESCROW  AGENT:  Means,  initially,  First  Security  Bank,  National
      Association,  and any  replacement  or  successor  therefor  appointed  in
      accordance with the Escrow Agreement.

            ESCROW AGREEMENT:  Means the Escrow and Paying Agent Agreement dated
      as of November 3, 1998 relating to the Applicable Certificates,  among the
      Escrow Agent,  the Escrow Paying Agent, the Related Trustee (and after the
      Transfer  Date,  the  Trustee)  and the  Underwriters,  as the same may be
      amended,   supplemented  or  otherwise  modified  from  time  to  time  in
      accordance with its terms.




            ESCROW PAYING  AGENT:  Means the Person acting as paying agent under
      the Escrow Agreement.

            ESCROW RECEIPT:  Means the receipt substantially in the form annexed
      to the Escrow Agreement  representing a fractional  undivided  interest in
      the funds held in escrow thereunder.

            FINAL MATURITY DATE:  Means May 1, 2010.

            FINAL WITHDRAWAL: Has the meaning specified in the Escrow Agreement.

            FINAL  WITHDRAWAL  DATE:  Has the  meaning  specified  in the Escrow
      Agreement.

            INDENTURE: Means each of the separate trust indentures and mortgages
      relating to the  Aircraft,  each as  specified  or described in a Delivery
      Notice  delivered  pursuant  to  the  NPA  or  the  related  Participation
      Agreement,  in each  case as the  same  may be  amended,  supplemented  or
      otherwise modified from time to time in accordance with its terms.

            INTERCREDITOR AGREEMENT:  Means the Intercreditor Agreement dated as
      of  November  3, 1998 among the Related  Trustee  (and after the  Transfer
      Date,  the Trustee),  the Related  Other  Trustees (and after the Transfer
      Date, the Other Trustees), the Liquidity Provider, the liquidity providers
      relating to the Certificates  issued under (and as defined in) each of the
      Related Other Agreements,  and Wilmington Trust Company,  as Subordination
      Agent and as trustee  thereunder,  as amended,  supplemented  or otherwise
      modified from time to time in accordance with its terms.

            INVESTORS:  Means  the  Underwriters  together  with all  subsequent
      beneficial owners of the Applicable Certificates.

            LEASE:  Means,  with  respect  to each  Leased  Aircraft,  the lease
      between an Owner Trustee,  as the lessor, and the Company,  as the lessee,
      referred  to in the  related  Indenture,  as such  lease  may be  amended,
      supplemented or otherwise modified in accordance with its terms.

            LEASED AIRCRAFT:  Has the meaning  specified in the third recital to
      this Trust Supplement.

            LEASED  AIRCRAFT  INDENTURE:   Has  the  meaning  specified  in  the
      Intercreditor Agreement.

            LIQUIDITY FACILITY: Means, initially, the Revolving Credit Agreement
      dated as of November  3, 1998  relating  to the  Applicable  Certificates,
      between  the  Liquidity   Provider  and  Wilmington   Trust  Company,   as
      Subordination  Agent, as agent and trustee for the Applicable  Trust, and,
      from  and  after  the  replacement  of  such  agreement  pursuant  to  the
      Intercreditor  Agreement,  the replacement liquidity facility therefor, in
      each case as amended, supplemented or otherwise modified from time to time
      in accordance with their respective terms.




            LIQUIDITY  PROVIDER:   Means,  initially,   Westdeutsche  Landesbank
      Girozentrale,   a  German   public  law  banking   institution,   and  any
      replacements  or  successors  therefor  appointed in  accordance  with the
      Intercreditor Agreement.

            NEW AIRCRAFT:  Has the meaning specified in the NPA.

            NOTE  DOCUMENTS:  Means the  Equipment  Notes  with  respect  to the
      Applicable  Certificates and, with respect to any such Equipment Note, (i)
      the Indenture and the Participation  Agreement  relating to such Equipment
      Note,  and  (ii) in the case of any  Equipment  Note  related  to a Leased
      Aircraft, the Lease relating to such Leased Aircraft.

            NPA: Means the Note Purchase  Agreement dated as of November 3, 1998
      among the Related Trustee (and after the Transfer Date, the Trustee),  the
      Related Other Trustees (and after the Transfer Date, the Other  Trustees),
      the  Company,   the  Escrow  Agent,   the  Escrow  Paying  Agent  and  the
      Subordination Agent, as the same may be amended, supplemented or otherwise
      modified from time to time, in accordance with its terms.

            OTHER  AGREEMENTS:  Means (i) the Basic Agreement as supplemented by
      Trust  Supplement  No.  1998-3A-1-S  dated  the date  hereof  relating  to
      Continental  Airlines  Pass  Through  Trust  1998-3A-1-S,  (ii) the  Basic
      Agreement as supplemented by Trust Supplement No. 1998-3B-S dated the date
      hereof  relating to  Continental  Airlines Pass Through  Trust  1998-3B-S,
      (iii)  the  Basic  Agreement  as  supplemented  by  Trust  Supplement  No.
      1998-3C-1-S  dated the date hereof  relating to Continental  Airlines Pass
      Through Trust  1998-3C-1-S and (iv) the Basic Agreement as supplemented by
      Trust  Supplement  No.  1998-3C-2-S  dated  the date  hereof  relating  to
      Continental Airlines Pass Through Trust 1998-3C-2-S.

            OTHER TRUSTEES:  Means the trustees under the Other Agreements,  and
      any successor or other trustee appointed as provided therein.

            OTHER  TRUSTS:  Means the  Continental  Airlines  Pass Through Trust
      1998-3A-1-S,  the Continental  Airlines Pass Through Trust 1998-3B-S,  the
      Continental  Airlines Pass Through Trust  1998-3C-1-S  and the Continental
      Airlines Pass Through Trust 1998-3C-2-S, created by the Other Agreements.

            OUTSTANDING:  When used with  respect  to  Applicable  Certificates,
      means, as of the date of  determination,  all Transfer Date  Certificates,
      and  all  other  Applicable  Certificates  theretofore  authenticated  and
      delivered under this Agreement, in each case except:

                  (i)  Applicable  Certificates   theretofore  canceled  by  the
            Registrar  or  delivered  to  the  Trustee  or  the   Registrar  for
            cancellation;

                 (ii) Applicable Certificates for which money in the full amount
            required  to  make  the  final  distribution  with  respect  to such
            Applicable  Certificates  pursuant  to  Section  11.01 of the  Basic
            Agreement has been  theretofore  deposited with the Trustee in trust
            for the Applicable Certificateholders as provided in Section 4.01 of



            the  Basic  Agreement  pending  distribution  of such  money to such
            Applicable  Certificateholders  pursuant  to  payment  of such final
            distribution; and

                (iii)  Applicable  Certificates  in  exchange  for or in lieu of
            which other  Applicable  Certificates  have been  authenticated  and
            delivered pursuant to this Agreement.

            OWNED  AIRCRAFT:  Has the meaning  specified in the third recital to
      this Trust Supplement.

            OWNED  AIRCRAFT   INDENTURE:   Has  the  meaning  specified  in  the
      Intercreditor Agreement.

            OWNER PARTICIPANT:  With respect to any Equipment Note relating to a
      Leased  Aircraft,  means the "Owner  Participant"  as  referred  to in the
      Indenture  pursuant  to  which  such  Equipment  Note  is  issued  and any
      permitted  successor  or  assign  of such  Owner  Participant;  and  OWNER
      PARTICIPANTS  at  any  time  of  determination  means  all  of  the  Owner
      Participants thus referred to in the Indentures.

            OWNER  TRUSTEE:  With respect to any  Equipment  Note  relating to a
      Leased  Aircraft,  means  the  "Owner  Trustee",  as  referred  to in  the
      Indenture  pursuant  to which such  Equipment  Note is issued,  not in its
      individual capacity but solely as trustee; and OWNER TRUSTEES means all of
      the Owner Trustees party to any of the Indentures.

            OWNER  TRUSTEE'S  PURCHASE  AGREEMENT:  Means,  with  respect to any
      Leased Aircraft,  the agreement between the Company and the relevant Owner
      Trustee  pursuant to which,  INTER ALIA, the Company  assigns to the Owner
      Trustee  certain  rights  of  the  Company  under  the  aircraft  purchase
      agreement with respect to such Leased Aircraft.

            PARTICIPATION AGREEMENT:  Means each Participation Agreement entered
      into by the  Trustee  pursuant  to the NPA,  as the  same may be  amended,
      supplemented or otherwise modified in accordance with its terms.

            POOL BALANCE: Means, as of any date, (i) the original aggregate face
      amount of the  "Applicable  Certificates"  as defined in the Related  Pass
      Through Trust  Agreement,  less (ii) the aggregate  amount of all payments
      made in respect of such  Certificates or in respect of Deposits other than
      payments made in respect of interest or premium  thereon or  reimbursement
      of any  costs or  expenses  incurred  in  connection  therewith.  The Pool
      Balance as of any Distribution  Date shall be computed after giving effect
      to any special  distribution  with respect to unused Deposits,  payment of
      principal  of the  Equipment  Notes or payment with respect to other Trust
      Property and the distribution thereof to be made on that date.

            POOL  FACTOR:  Means,  as of any  Distribution  Date,  the  quotient
      (rounded to the seventh  decimal place)  computed by dividing (i) the Pool
      Balance by (ii) the  original  aggregate  face  amount of the  "Applicable
      Certificates" as defined in the Related Pass Through Trust Agreement.  The
      Pool Factor as of any  Distribution  Date shall be computed  after  giving



      effect to any  special  distribution  with  respect  to  unused  Deposits,
      payment of principal of the  Equipment  Notes or payments  with respect to
      other Trust Property and the distribution thereof to be made on that date.

            PROSPECTUS SUPPLEMENT: Means the Prospectus Supplement dated October
      21, 1998 relating to the offering of the Certificates.

            RELATED  OTHER  PASS  THROUGH  TRUST  AGREEMENTS:  Means the  "Other
      Agreements" as defined in the Related Pass Through Trust Agreement.

            RELATED OTHER TRUSTEES: Means the "Other Trustees" as defined in the
      Related Pass Through Trust Agreement.

            RELATED  OTHER  TRUSTS:  Means the "Other  Trusts" as defined in the
      Related Pass Through Trust Agreement.

            RELATED PASS THROUGH TRUST  AGREEMENT:  Means the Basic Agreement as
      supplemented by the Trust Supplement No. 1998-3A-2-O dated the date hereof
      (the "RELATED PASS THROUGH TRUST SUPPLEMENT"), relating to the Continental
      Airlines  Pass Through Trust  1998-3A-2-O  and entered into by the Company
      and the Trustee, as amended,  supplemented or otherwise modified from time
      to time in accordance with its terms.

            RELATED TRUST: Means the Continental Pass Through Trust 1998-3A-2-O,
      formed under the Related Pass Through Trust Agreement.

            RELATED  TRUSTEE:  Means the trustee  under the Related Pass Through
      Trust Agreement.

            SPECIAL PAYMENT:  Means any payment (other than a Scheduled Payment)
      in respect of, or any proceeds of, any  Equipment  Note,  Trust  Indenture
      Estate (as defined in each Leased  Aircraft  Indenture) or Collateral  (as
      defined in each Owned Aircraft Indenture).

            SUBSTITUTE AIRCRAFT:  Has the meaning specified in the NPA.

            TRANSFER  DATE:  Means the moment of  execution  and delivery of the
      Assignment and Assumption Agreement by each of the parties thereto.

            TRANSFER  DATE  CERTIFICATES:  Has  the  meaning  specified  in  the
      definition of "Applicable Certificates".

            TRIGGERING  EVENT:  Has the  meaning  assigned  to such  term in the
      Intercreditor Agreement.

            TRUST PROPERTY:  Means (i) subject to the  Intercreditor  Agreement,
      the  Equipment  Notes held as the property of the  Applicable  Trust,  all



      monies at any time  paid  thereon  and all  monies  due and to become  due
      thereunder,  (ii) funds  from time to time  deposited  in the  Certificate
      Account and the Special Payments Account and, subject to the Intercreditor
      Agreement,  any proceeds from the sale by the Trustee  pursuant to Article
      VI of the Basic  Agreement of any  Equipment  Note and (iii) all rights of
      the Applicable Trust and the Trustee,  on behalf of the Applicable  Trust,
      under the Intercreditor  Agreement,  the Escrow Agreement, the NPA and the
      Liquidity Facility,  including,  without limitation, all rights to receive
      certain payments thereunder,  and all monies paid to the Trustee on behalf
      of the  Applicable  Trust pursuant to the  Intercreditor  Agreement or the
      Liquidity  Facility,  PROVIDED that rights with respect to the Deposits or
      under the Escrow Agreement will not constitute Trust Property.

            TRUST  SUPPLEMENT:  Has the meaning specified in the first paragraph
      of this trust supplement.

            UNDERWRITERS:    Means,   collectively,   Morgan   Stanley   &   Co.
      Incorporated,  Credit Suisse First Boston  Corporation,  Chase  Securities
      Inc.,  Donaldson,  Lufkin & Jenrette  Securities  Corporation  and Salomon
      Smith Barney Inc.

            UNDERWRITING  AGREEMENT:  Means  the  Underwriting  Agreement  dated
      October 21, 1998 among the  Underwriters,  the Company and the Depositary,
      as the same may be amended,  supplemented or otherwise  modified from time
      to time in accordance with its terms.

                                   ARTICLE III
                        STATEMENTS TO CERTIFICATEHOLDERS

            Section 3.01.  STATEMENTS TO APPLICABLE  CERTIFICATEHOLDERS.  (a) On
each  Distribution  Date,  the Trustee will include  with each  distribution  to
Applicable  Certificateholders of a Scheduled Payment or Special Payment, as the
case may be, a statement  setting forth the  information  provided below (in the
case of a Special  Payment,  reflecting in part the information  provided by the
Escrow Paying Agent under the Escrow Agreement).  Such statement shall set forth
(per $1,000 face amount  Applicable  Certificate as to (ii), (iii), (iv) and (v)
below) the following information:

            (i) the aggregate amount of funds  distributed on such  Distribution
      Date under the Agreement and under the Escrow  Agreement,  indicating  the
      amount allocable to each source;

            (ii) the amount of such distribution  under the Agreement  allocable
      to principal and the amount allocable to premium, if any;

            (iii) the amount of such distribution under the Agreement  allocable
      to interest;

            (iv) the  amount of such  distribution  under the  Escrow  Agreement
      allocable to interest;




            (v) the  amount  of such  distribution  under the  Escrow  Agreement
      allocable to unused Deposits, if any; and

            (vi) the Pool Balance and the Pool Factor.

            With respect to the Applicable  Certificates  registered in the name
of a Clearing Agency,  on the Record Date prior to each  Distribution  Date, the
Trustee will request from such  Clearing  Agency a securities  position  listing
setting forth the names of all Clearing  Agency  Participants  reflected on such
Clearing Agency's books as holding  interests in the Applicable  Certificates on
such Record Date. On each Distribution  Date, the Trustee will mail to each such
Clearing  Agency  Participant  the  statement  described  above  and  will  make
available additional copies as requested by such Clearing Agency Participant for
forwarding to holders of interests in the Applicable Certificates.

            (b)  Within  a  reasonable  period  of  time  after  the end of each
calendar  year but not later than the latest date  permitted by law, the Trustee
shall  furnish to each Person who at any time during such  calendar  year was an
Applicable  Certificateholder  of record a statement  containing  the sum of the
amounts determined pursuant to clauses (a)(i),  (a)(ii),  (a)(iii),  (a)(iv) and
(a)(v)  above  for such  calendar  year or,  in the  event  such  Person  was an
Applicable  Certificateholder  of record during a portion of such calendar year,
for such portion of such year, and such other items as are readily  available to
the Trustee and which an Applicable  Certificateholder  shall reasonably request
as necessary for the purpose of such Applicable Certificateholder's  preparation
of its federal income tax returns.  Such statement and such other items shall be
prepared on the basis of  information  supplied  to the Trustee by the  Clearing
Agency  Participants  and shall be  delivered  by the  Trustee to such  Clearing
Agency  Participants  to be available for  forwarding  by such  Clearing  Agency
Participants  to the holders of interests in the Applicable  Certificates in the
manner described in Section 3.02(a) of this Trust Supplement.

            (c) If the aggregate  principal  payments scheduled for May 1, 1999,
on the Equipment Notes held as Trust Property as of April 9, 1999,  differs from
the amount thereof set forth for the Applicable Certificates on page S-34 of the
Prospectus  Supplement,  by no later than April 15, 1999 the Trustee  shall mail
written notice of the actual amount of such scheduled payments to the Applicable
Certificateholders  of record as of a date within 10 Business  Days prior to the
date of mailing.

            (d) Promptly  following (i) the Delivery Period Termination Date, if
there has been any change in the  information  set forth in clauses (x), (y) and
(z) below  from that set forth in page S-34 of the  Prospectus  Supplement,  and
(ii) any early  redemption  or  purchase  of, or any  default in the  payment of
principal  or  interest in respect  of, any of the  Equipment  Notes held in the
Applicable Trust, or any Final  Withdrawal,  the Trustee (if the Related Trustee
has not  already  done so) shall  furnish to  Applicable  Certificateholders  of
record on such date a statement setting forth (x) the expected Pool Balances for
each  subsequent  Regular   Distribution  Date  following  the  Delivery  Period
Termination  Date,  (y) the related Pool  Factors for such Regular  Distribution
Dates and (z) the  expected  principal  distribution  schedule of the  Equipment
Notes, in the aggregate, held as Trust Property at the date of such notice. With
respect  to the  Applicable  Certificates  registered  in the name of a Clearing



Agency,  on the  Transfer  Date,  the Trustee  (if the  Related  Trustee has not
already done so) will request from such  Clearing  Agency a securities  position
listing setting forth the names of all Clearing Agency Participants reflected on
such  Clearing   Agency's  books  as  holding   interests  in  the   "Applicable
Certificates"  (as defined in the Related Pass Through  Trust  Agreement) on the
Delivery  Period  Termination  Date. The Trustee (if the Related Trustee has not
already  done  so)  will  mail to each  such  Clearing  Agency  Participant  the
statement described above and will make available additional copies as requested
by such Clearing  Agency  Participant  for forwarding to holders of interests in
the Applicable Certificates.

            (e) This Section 3.01  supersedes  and replaces  Section 4.03 of the
Basic Agreement, with respect to the Applicable Trust.

                                   ARTICLE IV
                                     DEFAULT

            Section 4.01. PURCHASE RIGHTS OF CERTIFICATEHOLDERS. (a) At any time
after the occurrence and during the  continuance of a Triggering  Event,  if the
Class   A-1   Trustee   is  then  the   Controlling   Party,   each   Applicable
Certificateholder  shall have the right to purchase,  for the purchase price set
forth in the Class A-1 Trust Agreement, all, but not less than all, of the Class
A-1 Certificates upon ten days' written notice to the Class A-1 Trustee and each
other  Applicable  Certificateholder,  PROVIDED  that (i) if prior to the end of
such  ten-day  period  any  other  Applicable  Certificateholder  notifies  such
purchasing   Applicable    Certificateholder    that   such   other   Applicable
Certificateholder  wants  to  participate  in such  purchase,  then  such  other
Applicable   Certificateholder   may  join   with  the   purchasing   Applicable
Certificateholder  to  purchase  all,  but not less than  all,  of the Class A-1
Certificates  pro  rata  based  on  the  Fractional  Undivided  Interest  in the
Applicable  Trust  held by each such  Applicable  Certificateholder  and (ii) if
prior to the end of such ten-day period any other  Applicable  Certificateholder
fails to  notify  the  purchasing  Applicable  Certificateholder  of such  other
Applicable  Certificateholder's  desire to participate in such a purchase,  then
such other  Applicable  Certificateholder  shall lose its right to purchase  the
Class A-1 Certificates pursuant to this Section 4.01(a).

            (b) By acceptance of its  Applicable  Certificate,  each  Applicable
Certificateholder  agrees that at any time after the  occurrence  and during the
continuation of a Triggering Event,

            (i) if the  Trustee is then the  Controlling  Party,  each Class A-1
      Certificateholder  shall have the right to purchase all, but not less than
      all, of the Applicable  Certificates  upon ten days' written notice to the
      Trustee and each other Class A-1  Certificateholder,  PROVIDED that (A) if
      prior  to  the  end  of  such   ten-day   period   any  other   Class  A-1
      Certificateholder  notifies such  purchasing  Class A-1  Certificateholder
      that such other Class A-1  Certificateholder  wants to participate in such
      purchase,  then such other Class A-1  Certificateholder  may join with the
      purchasing Class A-1  Certificateholder to purchase all, but not less than
      all,  of the  Applicable  Certificates  pro rata  based on the  Fractional
      Undivided  Interest  in the Class A-1  Trust  held by each such  Class A-1
      Certificateholder  and (B) if prior to the end of such ten-day  period any



      other Class A-1 Certificateholder fails to notify the purchasing Class A-1
      Certificateholder  of such other Class A-1  Certificateholder's  desire to
      participate   in   such  a   purchase,   then   such   other   Class   A-1
      Certificateholder   shall  lose  its  right  to  purchase  the  Applicable
      Certificates pursuant to this Section 4.01(b); and

            (ii) each  Class B  Certificateholder  shall  have the right  (which
      shall not expire upon any purchase of certificates  pursuant to clause (a)
      or (b)(i) above) to purchase all, but not less than all, of the Applicable
      Certificates and Class A-1  Certificates  upon ten days' written notice to
      the   Trustee,   the   Class  A-1   Trustee   and  each   other   Class  B
      Certificateholder,  PROVIDED  that (A) if prior to the end of such ten-day
      period any other Class B Certificateholder  notifies such purchasing Class
      B  Certificateholder  that such other Class B  Certificateholder  wants to
      participate  in such purchase,  then such other Class B  Certificateholder
      may join with the purchasing  Class B  Certificateholder  to purchase all,
      but not less than all, of the  Applicable  Certificates  and the Class A-1
      Certificates  pro rata based on the Fractional  Undivided  Interest in the
      Class B Trust held by each such Class B Certificateholder and (B) if prior
      to the end of such  ten-day  period  any other  Class B  Certificateholder
      fails to notify the  purchasing  Class B  Certificateholder  of such other
      Class B Certificateholder's desire to participate in such a purchase, then
      such other Class B Certificateholder  shall lose its right to purchase the
      Applicable  Certificates and the Class A-1  Certificates  pursuant to this
      Section 4.01(b);

            (iii)   each   Class   C-1    Certificateholder    and   Class   C-2
      Certificateholder  (each a "CLASS  C  CERTIFICATEHOLDER")  shall  have the
      right (which shall not expire upon any purchase of  certificates  pursuant
      to clause (a),  (b)(ii)  above) to purchase all, but not less than all, of
      the Applicable  Certificates,  the Class A-1  Certificates and the Class B
      Certificates  upon ten days' written notice to the Trustee,  the Class A-1
      Trustee,  the  Class  B  Trustee  and  (x)  if  such  purchasing  Class  C
      Certificateholder is a Class C-1  Certificateholder,  each other Class C-1
      Certificateholder  and either (I) if the Class C-2 Trustee shall have made
      a  current  list  of  Class  C-2  Certificateholders   available  to  such
      purchasing Class C Certificateholder  upon a request therefor,  each Class
      C-2 Certificateholdler, or (II) if clause (I) is not applicable, the Class
      C-2 Trustee,  or (y) if such  purchasing  Class C  Certificateholder  is a
      Class C-2  Certificateholder,  each other Class C-2  Certificateholder and
      either  (I) if the Class C-1  Trustee  shall  have made a current  list of
      Class  C-1  Certificateholders   available  to  such  purchasing  Class  C
      Certificateholder    upon   a   request    therefor,    each   Class   C-1
      Certificateholder,  or (II) if clause (I) is not applicable, the Class C-1
      Trustee,  PROVIDED that (A) if prior to the end of such ten-day period any
      other  Class  C   Certificateholder   notifies  such  purchasing  Class  C
      Certificateholder  that  such  other  Class C  Certificateholder  wants to
      participate  in such purchase,  then such other Class C  Certificateholder
      may join with the purchasing  Class C  Certificateholder  to purchase all,
      but not less  than  all,  of the  Applicable  Certificates,  the Class A-1
      Certificates  and the Class B  Certificates  pro rata based on the Class C
      Fractional  Undivided Interest held by each such Class C Certificateholder
      and (B) if prior  to the end of such  ten-day  period  any  other  Class C
      Certificateholder fails to notify the purchasing Class C Certificateholder
      of such other Class C Certificateholder's  desire to participate in such a
      purchase,  then such other Class C Certificateholder  shall lose its right



      to purchase the Applicable  Certificates,  the Class A-1  Certificates and
      the Class B Certificates pursuant to this Section 4.01(b); and

            (iv)   each   holder   of  a  Class  D   Certificate   (a  "CLASS  D
      CERTIFICATEHOLDER")  shall have the right (which shall not expire upon any
      purchase  of  certificates  pursuant  to clause  (a),  (b)(i),  (b)(ii) or
      (b)(iii)  above) to purchase all, but not less than all, of the Applicable
      Certificates,  the Class A-1 Certificates,  the Class B Certificates,  the
      Class  C-1  Certificates  and the Class  C-2  Certificates  upon ten days'
      written notice to the Trustee, the Class A-1 Trustee, the Class B Trustee,
      the  Class C-1  Trustee,  the Class C-2  Trustee  and each  other  Class D
      Certificateholder,  PROVIDED  that (A) if prior to the end of such ten-day
      period and other Class D Certificateholder  notifies such purchasing Class
      D  Certificateholder  that such other Class D  Certificateholder  wants to
      participate  in such purchase,  then such other Class D  Certificateholder
      may join with the purchasing  Class D  Certificateholder  to purchase all,
      but not less  than  all,  of the  Applicable  Certificates,  the Class A-1
      Certificates, the Class B Certificates, the Class C-1 Certificates and the
      Class C-2 Certificates pro rata based on the Fractional Undivided Interest
      in the Class D Trust held by each such Class D  Certificateholder  and (B)
      if  prior  to  the  end  of  such   ten-day   period  any  other  Class  D
      Certificateholder fails to notify the purchasing Class D Certificateholder
      of such other Class D Certificateholder's  desire to participate in such a
      purchase,  then such other Class D Certificateholder  shall lose its right
      to purchase the Applicable Certificates,  the Class A-1 Certificates,  the
      Class B  Certificates,  the  Class  C-1  Certificates  and the  Class  C-2
      Certificates pursuant to this Section 4.01(b)

            The purchase price with respect to the Applicable Certificates shall
be equal to the Pool  Balance  of the  Applicable  Certificates,  together  with
accrued  and  unpaid  interest  thereon  to the date of such  purchase,  without
premium,  but including any other amounts then due and payable to the Applicable
Certificateholders under this Agreement, the Intercreditor Agreement, the Escrow
Agreement  or  any  Note  Document  or  on  or  in  respect  of  the  Applicable
Certificates; PROVIDED, HOWEVER, that (x) if such purchase occurs after a record
date  specified  in  Section  2.03  of  the  Escrow  Agreement  relating  to the
distribution  of unused  Deposits and/or accrued and unpaid interest on Deposits
and prior to or on the related distribution date thereunder, such purchase price
shall be reduced by the aggregate  amount of unused  Deposits and/or interest to
be distributed  under the Escrow  Agreement (which deducted amounts shall remain
distributable to, and may be retained by, the Applicable Certificateholder as of
such record date) and (y) if such purchase  occurs after a Record Date and prior
to or on the related  Distribution Date, such purchase price shall be reduced by
the amount to be distributed  under this  Agreement on the related  Distribution
Date (which deducted amounts shall remain  distributable to, and may be retained
by, the Applicable  Certificateholder as of such Record Date);  PROVIDED FURTHER
that no such purchase of Applicable  Certificates  shall be effective unless the
purchaser(s)  shall  certify to the  Trustee  that  contemporaneously  with such
purchase,  such purchaser(s) is (are) purchasing,  pursuant to the terms of this
Agreement  and the  Other  Agreements,  (A) in the case of any  purchase  of the
Applicable  Certificates  pursuant to clause (b)(i) above, all of the Applicable
Certificates, or (B) in all other cases, the Applicable Certificates,  the Class
A-1 Certificates,  the Class B Certificates,  the Class C-1 Certificates and the
Class  C-2  Certificates  which  are  senior  to the  securities  held  by  such
purchaser(s).  Each payment of the purchase price of the Applicable Certificates
referred to in the first sentence hereof shall be made to an account or accounts



designated by the Trustee and each such  purchase  shall be subject to the terms
of  this  Section  4.01(b).  Each  Applicable  Certificateholder  agrees  by its
acceptance of its Applicable  Certificate that (at any time after the occurrence
and during the  continuance  of a Triggering  Event) it will,  upon payment from
such  Class  A-1  Certificateholder(s),  Class B  Certificateholder(s),  Class C
Certificateholder(s) or Class D Certificateholder(s), as the case may be, of the
purchase  price set forth in the first  sentence  of this  paragraph,  forthwith
sell, assign, transfer and convey to the purchaser(s) thereof (without recourse,
representation  or  warranty  of any kind  except for its own acts),  all of the
right, title,  interest and obligation of such Applicable  Certificateholder  in
this Agreement,  the Escrow Agreement,  the Deposit Agreement, the Intercreditor
Agreement,  the  Liquidity  Facility,  the  Note  Documents,  the  NPA  and  all
Applicable   Certificates   and  Escrow   Receipts   held  by  such   Applicable
Certificateholder  (subject to clauses (x) and (y) in the first sentence of this
paragraph and excluding all right, title and interest under any of the foregoing
to the extent such right, title or interest is with respect to an obligation not
then due and  payable as  respects  any action or  inaction  or state of affairs
occurring  prior  to such  sale)  and the  purchaser  shall  assume  all of such
Applicable  Certificateholder's  obligations  under this  Agreement,  the Escrow
Agreement,  the Deposit Agreement,  the Intercreditor  Agreement,  the Liquidity
Facility,  the NPA, the Note Documents and all such Applicable  Certificates and
Escrow Receipts.  The Applicable  Certificates will be deemed to be purchased on
the date payment of the purchase  price is made  notwithstanding  the failure of
the Applicable  Certificateholders  to deliver any Applicable  Certificates and,
upon such a purchase,  (I) the only rights of the Applicable  Certificateholders
will be to deliver the Applicable  Certificates to the  purchaser(s) and receive
the purchase price for such Applicable Certificates and (II) if the purchaser(s)
shall so request,  such  Applicable  Certificateholder  will comply with all the
provisions  of Section  3.04 of the Basic  Agreement  to enable  new  Applicable
Certificates  to be issued to the  purchaser in such  denominations  as it shall
request.  All charges and expenses in  connection  with the issuance of any such
new Applicable Certificates shall be borne by the purchaser thereof.

            As used in this Section 4.01 and elsewhere in this Trust Supplement,
the terms "Class A-1  Certificate",  "Class A-1  Certificateholder",  "Class A-1
Trust", "Class A-1 Trust Agreement", "Class A-1 Trustee", "Class B Certificate",
"Class B  Certificateholder",  "Class B Trust",  "Class B  Trustee",  "Class C-1
Certificate",  "Class  C-1  Certificateholder",  "Class C-1  Trust",  "Class C-1
Trustee",  "Class C-2 Certificate",  "Class C-2  Certificateholder",  "Class C-2
Trust", "Class C-2 Trustee",  "Class D Certificate",  and "Class D Trust", shall
have  the  respective  meanings  assigned  to such  terms  in the  Intercreditor
Agreement.

            (c) This Section 4.01 supersedes and replaces Section 6.01(b) of the
Basic Agreement, with respect to the Applicable Trust.

            Section  4.02.  AMENDMENT  OF SECTION  6.05 OF THE BASIC  AGREEMENT.
Section  6.05 of the Basic  Agreement  shall be  amended,  with  respect  to the
Applicable  Trust, by deleting the phrase "and thereby annul any Direction given
by such  Certificateholders  or the Trustee to such Loan  Trustee  with  respect
thereto," set forth in the first sentence thereof.




                                    ARTICLE V
                                   THE TRUSTEE

            Section  5.01.  ACQUISITION  OF TRUST  PROPERTY.  (a) The Trustee is
hereby irrevocably authorized and directed to execute and deliver the Assignment
and  Assumption  Agreement on the date  specified in Section 7.01 of the Related
Pass  Through  Trust  Supplement,  subject  only  to  the  satisfaction  of  the
conditions set forth in said Section 7.01. This Agreement  (except only for this
sentence and the immediately preceding sentence hereof, which are effective upon
execution  and delivery  hereof) shall become  effective  upon the execution and
delivery  of the  Assignment  and  Assumption  Agreement  by the Trustee and the
Related Trustee,  automatically  and without any further  signature or action on
the part of the Company and the  Trustee,  and shall  thereupon  constitute  the
legal, valid and binding  obligation of the parties hereto  enforceable  against
each of the parties hereto in accordance with its terms. Upon such execution and
delivery of the Assignment and Assumption Agreement,  the Related Trust shall be
terminated, the Applicable Certificateholders shall receive beneficial interests
in the  Applicable  Trust in exchange for their  interests in the Related  Trust
equal to their  respective  beneficial  interests  in the Related  Trust and the
"Outstanding"  (as defined in the Related Pass  Through  Trust  Agreement)  pass
through certificates  representing fractional undivided interests in the Related
Trust  shall be deemed  for all  purposes  of this  Agreement,  without  further
signature  or  action  of any  party or  Certificateholder,  to be  Certificates
representing  the same  Fractional  Undivided  Interests  in the Trust and Trust
Property.  By  acceptance  of  its  Applicable   Certificate,   each  Applicable
Certificateholder  consents  to  and  ratifies  such  assignment,  transfer  and
delivery  of the trust  property of the  Related  Trust to the Trustee  upon the
execution  and  delivery  of  the  Assignment  and  Assumption  Agreement.   The
provisions  of this Section  5.01(a)  supersede  and replace the  provisions  of
Section 2.02 of the Basic  Agreement with respect to the Applicable  Trust,  and
all  provisions of the Basic  Agreement  relating to Postponed  Notes or Section
2.02 of the Basic Agreement shall not apply to the Applicable Trust.

            (b) The Trustee,  upon the execution and delivery of the  Assignment
and Assumption  Agreement,  acknowledges its acceptance of all right,  title and
interest in and to the Trust  Property and declares  that the Trustee  holds and
will hold such right, title and interest for the benefit of all then present and
future  Applicable  Certificateholders,  upon the trusts herein and in the Basic
Agreement set forth. By the acceptance of each Applicable  Certificate issued to
it under the Related Pass Through  Trust  Agreement and deemed issued under this
Agreement,  each  Holder of any such  Applicable  Certificate  as grantor of the
Applicable Trust thereby joins in the creation and declaration of the Applicable
Trust.  The  provisions  of this  Section  5.01(b)  supersede  and  replace  the
provisions  of  Section  2.03  of  the  Basic  Agreement,  with  respect  to the
Applicable Trust.

            Section 5.02.     [Intentionally Omitted]

            Section 5.03. THE TRUSTEE. (a) Subject to Section 5.04 of this Trust
Supplement  and Section 7.15 of the Basic  Agreement,  the Trustee  shall not be
responsible  in any  manner  whatsoever  for or in respect  of the  validity  or
sufficiency  of this Trust  Supplement,  the Deposit  Agreement,  the NPA or the
Escrow  Agreement or the due  execution  hereof or thereof by the Company or the
other  parties  thereto  (other than the  Trustee),  or for or in respect of the



recitals and statements  contained herein or therein,  all of which recitals and
statements  are made  solely by the  Company,  except  that the  Trustee  hereby
represents and warrants that each of this Trust Supplement, the Basic Agreement,
each Applicable Certificate, the Intercreditor Agreement, the NPA and the Escrow
Agreement  has been  executed  and  delivered by one of its officers who is duly
authorized to execute and deliver such document on its behalf.

            (b)  Except as herein  otherwise  provided  and  except  during  the
continuance  of an Event of Default in respect of the  Applicable  Trust created
hereby,  no duties,  responsibilities  or liabilities  are assumed,  or shall be
construed to be assumed, by the Trustee by reason of this Trust Supplement other
than as set forth in the  Agreement,  and this Trust  Supplement is executed and
accepted on behalf of the Trustee,  subject to all the terms and  conditions set
forth in the  Agreement  as fully to all  intents as if the same were herein set
forth at length.

            Section 5.04.  REPRESENTATIONS  AND  WARRANTIES OF THE TRUSTEE.  The
Trustee hereby represents and warrants, on the Transfer Date, that:

            (a) the Trustee has full power, authority and legal right to receive
      the Trust Property assigned by the Related Trustee, assume the obligations
      under, and perform,  the Assignment and Assumption  Agreement,  this Trust
      Supplement, the Intercreditor Agreement, the Escrow Agreement and the Note
      Documents  to which it is a party and has taken  all  necessary  action to
      authorize  such receipt,  assumption  and  performance by it of this Trust
      Supplement, the Intercreditor Agreement, the Escrow Agreement and the Note
      Documents to which it is a party;

            (b) the  receipt  of the Trust  Property  under the  Assignment  and
      Assumption  Agreement and the performance by the Trustee of the Assignment
      and  Assumption  Agreement,  this  Trust  Supplement,   the  Intercreditor
      Agreement,  the Escrow  Agreement and the Note  Documents to which it is a
      party (i) will not violate any provision of any United States  federal law
      or the law of the state of the United States where it is located governing
      the banking and trust powers of the Trustee or any order, writ,  judgment,
      or decree of any court, arbitrator or governmental authority applicable to
      the Trustee or any of its assets,  (ii) will not violate any  provision of
      the articles of association or by-laws of the Trustee,  and (iii) will not
      violate any provision of, or  constitute,  with or without notice or lapse
      of time, a default  under,  or result in the creation or imposition of any
      lien on any  properties  included  in the Trust  Property  pursuant to the
      provisions  of any  mortgage,  indenture,  contract,  agreement  or  other
      undertaking to which it is a party, which violation, default or lien could
      reasonably  be  expected  to  have  an  adverse  effect  on the  Trustee's
      performance or ability to perform its duties hereunder or thereunder or on
      the transactions contemplated herein or therein;

            (c) the  receipt  of the Trust  Property  under the  Assignment  and
      Assumption  Agreement and the performance by the Trustee of the Assignment
      and  Assumption  Agreement,  this  Trust  Supplement,   the  Intercreditor
      Agreement,  the Escrow  Agreement and the Note  Documents to which it is a
      party will not require the  authorization,  consent,  or approval  of, the
      giving of notice to, the filing or registration with, or the taking of any
      other  action in respect of, any  governmental  authority or agency of the



      United  States  or the  state of the  United  States  where it is  located
      regulating the banking and corporate trust activities of the Trustee; and

            (d) The Assignment  and Assumption  Agreement has been duly executed
      and delivered by the Trustee and this Trust Supplement,  the Intercreditor
      Agreement,  the Escrow  Agreement and the Note  Documents to which it is a
      party have been, or will be, as applicable, duly executed and delivered by
      the Trustee and constitute, or will constitute, as applicable,  the legal,
      valid and binding  agreements  of the Trustee,  enforceable  against it in
      accordance  with  their  respective   terms;   PROVIDED,   HOWEVER,   that
      enforceability  may be limited by (i) applicable  bankruptcy,  insolvency,
      reorganization,  moratorium  or  similar  laws  affecting  the  rights  of
      creditors generally and (ii) general principles of equity.

            Section 5.05. TRUSTEE LIENS. The Trustee in its individual  capacity
agrees,  in addition to the  agreements  contained  in Section 7.17 of the Basic
Agreement,  that it will at its own cost and expense promptly take any action as
may be necessary to duly discharge and satisfy in full any Trustee's Liens on or
with respect to the Trust Property which is  attributable  to the Trustee in its
individual  capacity and which is unrelated to the transactions  contemplated by
the Intercreditor Agreement or the NPA.

                                   ARTICLE VI
                  ADDITIONAL AMENDMENT; SUPPLEMENTAL AGREEMENTS

            Section  6.01.  AMENDMENT  OF SECTION  5.02 OF THE BASIC  AGREEMENT.
Section  5.02 of the Basic  Agreement  shall be  amended,  with  respect  to the
Applicable Trust, by (i) replacing the phrase "of the Note Documents and of this
Agreement"  set forth in  paragraph  (b)  thereof  with the  phrase "of the Note
Documents,  of the NPA and of this  Agreement" and (ii) replacing the phrase "of
this Agreement and any Note Document" set forth in the last paragraph of Section
5.02 with the phrase "of this Agreement, the NPA and any Note Document".

            Section 6.02.  SUPPLEMENTAL AGREEMENTS WITHOUT CONSENT OF APPLICABLE
CERTIFICATEHOLDERS.  Without  limitation of Section 9.01 of the Basic Agreement,
under the terms of, and subject to the limitations contained in, Section 9.01 of
the Basic  Agreement,  the Company may (but will not be  required  to),  and the
Trustee (subject to Section 9.03 of the Basic Agreement) shall, at the Company's
request,  at any  time  and  from  time to  time,  (i)  enter  into  one or more
agreements  supplemental  to the  Escrow  Agreement,  the  NPA  or  the  Deposit
Agreement,  for any of the purposes set forth in clauses (1) through (9) of such
Section  9.01,  except that (a) clause (2) and (3) of such Section 9.01 shall be
deemed to include the Company's  obligations  under (in the case of clause (2)),
and the  Company's  rights and powers  conferred by (in the case of clause (3)),
the NPA,  (b)  clause  (4) of such  Section  9.01  shall be  deemed  to  include
corrections or supplements to provisions of the Escrow Agreement, the NPA or the
Deposit  Agreement  which  may be  defective  or  inconsistent  with  any  other
provision of this  Agreement or contained in any  agreement  referred to in such
clause  (4) and the curing of any  ambiguity  or the  modification  of any other
provision  with  respect  to  matters  or  questions  arising  under the  Escrow
Agreement,  the NPA or the Deposit  Agreement and (c)  references in clauses (6)
and (7) of such Section 9.01 to "any  Intercreditor  Agreement or any  Liquidity



Facility"  shall  be  deemed  to  refer  to "the  Intercreditor  Agreement,  the
Liquidity Facility, the Escrow Agreement,  the NPA or the Deposit Agreement" and
(ii) enter into one or more agreements supplemental to this Agreement to provide
for the formation of a Class D Trust, the issuance of Class D Certificates,  the
purchase by the Class D Trust of Equipment  Notes and other  matters  incidental
thereto or otherwise contemplated by Section 2.01(b) of the Basic Agreement.

            Section  6.03.  SUPPLEMENTAL  AGREEMENTS  WITH CONSENT OF APPLICABLE
CERTIFICATEHOLDERS.  Without  limitation of Section 9.02 of the Basic Agreement,
the provisions of Section 9.02 of the Basic  Agreement shall apply to agreements
or  amendments  for the purpose of adding any  provisions  to or changing in any
manner or eliminating any of the provisions of the Escrow Agreement, the Deposit
Agreement   or  the   NPA   to  the   extent   applicable   to  the   Applicable
Certificateholders  approving  such  agreement  or amendment or modifying in any
manner the rights and  obligations of such Applicable  Certificateholders  under
the Escrow  Agreement,  the  Deposit  Agreement  or the NPA;  provided  that the
provisions of Section  9.02(1) of the Basic Agreement shall be deemed to include
reductions  in any manner  of, or delay in the  timing  of,  any  receipt by the
Applicable Certificateholders of payments upon the Deposits.

                                  ARTICLE VII
                              TERMINATION OF TRUST

            Section  7.01.   TERMINATION  OF  THE  APPLICABLE   TRUST.  (a)  The
respective  obligations and responsibilities of the Company and the Trustee with
respect to the Applicable  Trust shall  terminate upon the  distribution  to all
Applicable  Certificateholders  and the  Trustee of all  amounts  required to be
distributed  to them  pursuant  to this  Agreement  and the  disposition  of all
property held as part of the Trust Property; PROVIDED, HOWEVER, that in no event
shall the Applicable Trust continue beyond one hundred ten (110) years following
the date of the execution of this Trust Supplement.

            Notice of any  termination,  specifying the  Distribution  Date upon
which  the  Applicable   Certificateholders   may  surrender  their   Applicable
Certificates  to  the  Trustee  for  payment  of  the  final   distribution  and
cancellation,   shall  be  mailed   promptly  by  the   Trustee  to   Applicable
Certificateholders not earlier than the 60th day and not later than the 15th day
next preceding such final Distribution Date specifying (A) the Distribution Date
upon which the proposed  final payment of the  Applicable  Certificates  will be
made upon presentation and surrender of Applicable Certificates at the office or
agency of the Trustee  therein  specified,  (B) the amount of any such  proposed
final  payment,  and (C) that  the  Record  Date  otherwise  applicable  to such
Distribution Date is not applicable,  payments being made only upon presentation
and  surrender  of the  Applicable  Certificates  at the office or agency of the
Trustee therein  specified.  The Trustee shall give such notice to the Registrar
at the  time  such  notice  is  given  to  Applicable  Certificateholders.  Upon
presentation  and surrender of the Applicable  Certificates  in accordance  with
such  notice,   the  Trustee  shall  cause  to  be   distributed  to  Applicable
Certificateholders such final payments.




            In the event that all of the Applicable Certificateholders shall not
surrender their Applicable Certificates for cancellation within six months after
the date specified in the above-mentioned written notice, the Trustee shall give
a second  written  notice  to the  remaining  Applicable  Certificateholders  to
surrender their  Applicable  Certificates for cancellation and receive the final
distribution  with respect thereto.  No additional  interest shall accrue on the
Applicable  Certificates  after the  Distribution  Date  specified  in the first
written notice.  In the event that any money held by the Trustee for the payment
of distributions on the Applicable  Certificates  shall remain unclaimed for two
years (or such lesser time as the Trustee shall be satisfied,  after sixty days'
notice from the Company, is one month prior to the escheat period provided under
applicable  law) after the final  distribution  date with respect  thereto,  the
Trustee shall pay to each Loan Trustee the appropriate  amount of money relating
to such Loan Trustee and shall give written  notice thereof to the related Owner
Trustees, the Owner Participants and the Company.

            (b) The  provisions  of this Section 7.01  supersede and replace the
provisions of Section 11.01 of the Basic Agreement in its entirety, with respect
to the Applicable Trust.

                                  ARTICLE VIII
                            MISCELLANEOUS PROVISIONS

            Section 8.01. BASIC AGREEMENT RATIFIED.  Except and so far as herein
expressly  provided,  all of the  provisions,  terms and conditions of the Basic
Agreement are in all respects  ratified and confirmed;  and the Basic  Agreement
and this Trust Supplement