AMENDMENT NO



EXHIBIT 10.2

AMENDMENT NO. 1

TO CREDIT AND GUARANTY AGREEMENT 

Amendment No. 1, dated as of May 30, 2006 (this "Amendment"), to Credit and Guaranty Agreement, dated as of June 1, 2005 (the "Agreement"), among Continental Airlines, Inc., a Delaware corporation, Continental Micronesia, Inc., a Delaware corporation, Air Micronesia, Inc., a Delaware corporation, each of the Lenders party to the Agreement, and Merrill Lynch Mortgage Capital Inc., a Delaware corporation, as Administrative Agent.  Certain terms used herein have the defined meanings referred to in Section 1 hereof.

WHEREAS, the Credit Parties, the Majority Lenders and the Administrative Agent wish to amend the definition of "Borrowing Base" for purposes of the Agreement and modify certain other provisions of the Agreement as set forth below; and 

WHEREAS, the Administrative Agent and the Lenders listed on the signature page to this Amendment confirm that such Lenders constitute the Majority Lenders. 

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

Section 1.Definitions.  Unless otherwise defined herein, terms used herein that are defined in the Agreement have such respective defined meanings.

Section 2.Amendment.  Effective as of the date hereof, the Agreement shall be amended as follows:

Section 2.1Borrowing Base.  The definition of "Borrowing Base" in Section 1.01 shall be amended by deleting clause (a) and substituting in lieu thereof the following:  

(a)with respect to the Collateral other than Cash Collateral 48% (or, in the case of any Appraisal Report delivered after May 15, 2006 and before September 30, 2006, 52.5%) of the Current Market Value of the CAL Collateral and the CMI Business, as reflected in the Appraisal Report(s) with respect thereto then most recently delivered to the Administrative Agent; and 

Section 2.2Appraisal Reports.  Section 5.11(b) shall be amended by inserting the following after the first sentence thereof: 

If the Borrowing Base (without giving effect to the parenthetical phrase in clause (a) of the definition of such term) determined as of October 2, 2006, utilizing the Current Market Values set forth in the Appraisal Report(s) most recently delivered to the Administrative Agent pursuant to Section 5.11(a), is less than the outstanding principal amount of the Loans on October 2, 2006, one or more of the Credit Parties shall, within one (1) Business Day thereafter, take one or more Remedial Actions such that, after giving effect to such Remedial Actions, the Borrowing Base (without giving effect to the parenthetical phrase in clause (a) of the definition of such term) is not less than the outstanding principal amount of the Loans after the Credit Parties have completed such Remedial Actions.

Section 3.Instruction.  The Lenders listed on the signature page of this Amendment hereby consent to the execution and delivery of this Amendment by the Administrative Agent.  

Section 4.Construction.  All references in the Agreement to the "Agreement" shall be deemed to refer to the Agreement as amended by this Amendment, and the parties hereto confirm their respective obligations thereunder.  Except as otherwise specified in this Amendment, the Agreement is hereby ratified by the parties hereto and shall remain in all respects unchanged and in full force and effect.

Section 5.Governing Law.  This Amendment shall be governed by, and construed in accordance with, the law of the State of New York.

Section 6.Counterparts.  This Amendment may be executed by the parties hereto in separate counterparts, each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute but one and the same instrument.

[Remainder of this page is blank.]


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

By  /s/ Jacques Lapointe
Name:  Jacques Lapointe

Title:   Vice President-Finance


CONTINENTAL MICRONESIA, INC.

By  /s/ Jeffery A. Smisek
Name:  Jeffery A. Smisek


Title:    Vice Chairman of the Board

AIR MICRONESIA, INC.

By  /s/ Jeffery A. Smisek
Name: Jeffery A. Smisek


Title:   Vice Chairman of the Board

MERRILL LYNCH CREDIT PRODUCTS, LLC

By  /s/ Brandt Wilson
Name:  Brandt Wilson


Title:    Vice President


MERRILL LYNCH MORTGAGE 

CAPITAL INC.

By  /s/ Peter M. Carter  
Name:  Peter M. Carter


Title:    Vice President















GALAXY  CLO 2003-1, LTD. 
By: AIG GLOBAL INVESTMENT CORP, INC., its Collateral Manager

By  /s/ W. Jeffrey Baxter  
Name:  W. Jeffrey Baxter


Title:     Managing Director

GALAXY III CLO, LTD. 

By: AIG GLOBAL INVESTMENT CORP., its Collateral Manager

By  /s/ W. Jeffrey Baxter       
Name:  W. Jeffrey Baxter

Title:     Managing Director


GALAXY IV CLO, LTD 

By: AIG GLOBAL INVESTMENT CORP., its Collateral Manager

By  /s/ W. Jeffrey Baxter 
Name:  W. Jeffrey Baxter

Title:    Managing Director


GALAXY V CLO, LTD 

By: AIG GLOBAL INVESTMENT CORP. its Collateral Manager

By  /s/ W. Jeffrey Baxter 
Name:  W. Jeffrey Baxter

Title:    Managing Director



SEMINOLE FUNDING LLC

By  /s/ Christina L. Ramseur
Name: Christina L. Ramseur

Title:   Assistant Vice President



RED FOX FUNDING LLC

By  /s/ Christina L. Ramseur  
Name: Christina L. Ramseur


Title:   Assistant Vice President


BOLDWATER CAPITAL PARTNERS MASTER FUND LP 


By: Boldwater Capital Management LP, Its Investment Manager 

By  /s/ Barry J. Coffman
Name: Barry J. Coffman


Title:   Managing Partner


CANPARTNERS INVESTMENT IV, LLC


By: Canpartners Investments IV, LLC,

       a California limited liability company 

By  /s/ Mitchell L. Julis
Name: Mitchell L. Julis


Title:   Managing Director


CANYON CAPITAL CDO 2002-1 LTD.


By: Canyon Capital Advisors LLC,

       a Delaware limited liability company,

   its Collateral Manager. 

By  /s/  Patrick Dooley
Name: Patrick Dooley


Title:   Authorized Signatory


CANYON CAPITAL CDO 2004-LTD.


By: Canyon Capital Advisors LLC,

       a Delaware limited liability company,

   its Collateral Manager

By  /s/  Dominique Mielle
Name: Dominique Mielle


Title:   Authorized Signatory


LISPENARD STREET CREDIT (MASTER), LTD.


By: DiMaio Ahmad Capital LLC, 

As Investment Manager

By  /s/ Lawrence Wolfson
Name: Lawrence Wolfson


Title:   Authorized Signatory


DUANE  STREET CLO 1, LTD.


By: DiMaio Ahmad Capital LLC, 

As Collateral Manager

By  /s/ Paul Travers 
Name:  Paul Travers


Title:   Managing Director


JAY STREET MARKET VALUE CLO I LTD.


By: DiMaio Ahmad Capital LLC, 

As Manager

By  /s/ Lawrence Wolfson
Name:  Lawrence Wolfson


Title:   Authorized Signatory


JASPER CLO, LTD.


By: Highland Capital Management, L.P., 

As Collateral Manager


By: Strand Advisors, Inc., Its General Partner

By  /s/ Chad Schramek
Name:  Chad Schramek

Title:   Assistant Treasurer 

Strand Advisors, Inc., General Partner of Highland Capital Management, L.P. 



GLENEAGLES CLO, LTD.


By: Highland Capital Management, L.P., 

As Collateral Manager


By: Strand Advisors, Inc., Its General Partner

By  /s/ Chad Schramek
Name:  Chad Schramek

Title:   Assistant Treasurer 

Strand Advisors, Inc., General Partner of Highland Capital Management, L.P. 



SOUTHFORK CLO, LTD.


By: Highland Capital Management, L.P., 

As Collateral Manager


By: Strand Advisors, Inc., Its General Partner

By  /s/ Chad Schramek
Name:  Chad Schramek

Title:   Assistant Treasurer 

Strand Advisors, Inc., General Partner of Highland Capital Management, L.P. 



LOAN FUNDING IV, LLC


By: Highland Capital Management, L.P., 

As Collateral Manager


By: Strand Advisors, Inc., Its General Partner

By  /s/ Chad Schramek
Name:  Chad Schramek

Title:   Assistant Treasurer

Strand Advisors, Inc., General Partner of Highland Capital Management, L.P. 



LOAN FUNDING VII, LLC


By: Highland Capital Management, L.P., As Collateral Manager


By:  Strand Advisors, Inc., Its General Partner

By  /s/ Chad Schramek
Name:  Chad Schramek

Title:   Assistant Treasurer 

Strand Advisors, Inc., General Partner of Highland Capital Management, L.P. 


 


HIGHLAND LOAN FUNDING V, LTD.


By: Highland Capital Management, L.P., 

As Collateral Manager


By: Strand Advisors, Inc., Its General Partner

By  /s/ Chad Schramek
Name:  Chad Schramek

Title:   Assistant Treasurer 

Strand Advisors, Inc., General Partner of Highland Capital Management, L.P. 



RESTORATION  FUNDING CLO, LTD 


By: Highland Capital Management, L.P., 

As Collateral Manager


By: Strand Advisors, Inc., Its General Partner

By  /s/ Chad Schramek
Name:  Chad Schramek

Title:   Assistant Treasurer 

Strand Advisors, Inc., General Partner of Highland Capital Management, L.P. 



HIGHLAND FLOATING RATE 

By  /s/ M. Jason Blackburn
Name:  M. Jason Blackburn

Title:   Treasurer  



HIGHLAND FLOATING RATE  ADVANTAGE FUND

By  /s/ M. Jason Blackburn
Name:  M. Jason Blackburn


      Title:   Treasurer 


FIRST TRUST/HIGHLAND CAPITAL FLOATING RATE INCOME FUND II

By  /s/ Mark Okada
Name: Mark Okada 

Title:   Executive Vice President



KKR FINANCIAL CORP.

By  /s/ Morgan W. Gillette
Name: Morgan W. Gillette

Title:   Authorized Signatory


 


STK CBNA LOAN FUNDING LLC

By  /s/ Jason Trala
Name:  Jason Trala


Title:  Attorney-In-Fact


 

TRS STARK LLC

By  /s/ Alice L. Wagner
Name:  Alice L. Wagner


Title:  Vice President


 

GRAND CENTRAL ASSET TRUST, STK SERIES

By  /s/ Mikus N. Kins
Name:  Mikus N. Kins


Title:    Attorney-In-Fact


 

UBS AG, STAMFORD BRANCH

By  /s/ Christopher M. Altkin
Name:  Christopher M. Altkin
















Title:    Associate Director
      Banking Products Services, US



By  /s/ Pamela Oh
Name:  Pamela Oh
















Title:   Associate Director
      Banking Products Services, US