Document:

<PAGE>

                                                                    EXHIBIT 10.1

                      LIMITED WAIVER AND THIRD AMENDMENT TO
                      AMENDED AND RESTATED CREDIT AGREEMENT

         This Limited Waiver and Third Amendment to Amended and Restated Credit
Agreement, dated as of November 8, 2001 (this "Amendment") is among PACKAGED
ICE, INC. (the "Borrower"), BANK OF AMERICA, N.A., individually as a Lender
("BofA") and as a co-agent and the administrative agent (the "Agent"), ANTARES
CAPITAL CORPORATION, as a Lender ("Antares") and as a co-agent, GMAC BUSINESS
CREDIT, LLC, as a Lender ("GMAC"), LASALLE BUSINESS CREDIT, INC., as a Lender
("LaSalle"), THE PROVIDENT BANK, as a Lender ("Provident"), and HARRIS TRUST AND
SAVINGS BANK, as a Lender ("Harris" and collectively with BofA, Antares, GMAC,
LaSalle and Provident, the "Lenders").

                                   WITNESSETH:

         WHEREAS, the Borrower, the Agent and the Lenders are parties to that
certain Amended and Restated Credit Agreement dated as of November 28, 2000 (as
amended, restated, modified and otherwise supplemented from time to time, the
"Credit Agreement"; capitalized terms not otherwise defined herein having the
definitions provided therefore in the Credit Agreement) and to certain other
documents executed in connection with the Credit Agreement;

         WHEREAS, the parties hereto wish to waive certain Defaults under the
Credit Agreement as provided herein; and

         WHEREAS, the parties hereto wish to amend the Credit Agreement as
provided herein;

         NOW, THEREFORE, the parties hereto agree as follows:

         1. Limited Waiver. Agent and Lenders hereby waive the Default under
Section 6.2 of the Credit Agreement solely to the extent that such provision was
violated for the twelve month period ending on September 30, 2001. This Limited
Waiver shall be limited precisely as written and shall not be deemed or
otherwise construed to (i) constitute a waiver of any other Default or Event of
Default or (ii) prejudice any right, power or remedy which Agent or Lenders may
now have or may have in the future under or in connection with the Credit
Agreement or any other Loan Document (after giving effect to this Limited
Waiver).

         2. Amendments to the Credit Agreement.

                  (a) Section 1.16(c) Prepayments of the Loans. Section 1.16(c)
is hereby amended and restated in its entirety to read as follows:

         If the Borrower or any of its Subsidiaries shall at any time or from
time to time:

                  (i) make a Disposition; or

                  (ii) suffer an Event of Loss;

         following the repayment of all reasonable expenses, if any, incurred by
         the Agent in the collection or handling thereof, the remaining Net
         Proceeds shall be applied in any manner determined by the Agent and the
         Majority Lenders, in their sole discretion; provided that, if the
         remaining Net Proceeds are less than $100,000, such remaining Net
         Proceeds shall be applied in any manner determined by the Agent in its
         sole discretion.

                  (b) Section 4.1 Financial Statements. Notwithstanding anything
in Sections 4.1(b) and (c) and 4.2(b) to the contrary, Borrower shall furnish
the December 31, 2001 financial statements and Compliance Certificate required
to be delivered pursuant to Sections 4.1(b) and (c) and 4.2(b) no later than
January 15, 2002.

<PAGE>

                  (c) Section 4.20 Appraisals. Section 4.20(c) is hereby amended
by inserting the following sentence at the end thereof:

                           Notwithstanding the foregoing, at any time upon
                           Agent's request, Borrower agrees to obtain and
                           deliver to Agent new appraisals in form and substance
                           reasonably satisfactory to Agent of all of the
                           Collateral requested by Agent.

                  (d) Availability. The definition of "Availability" set forth
in Article 11 of the Credit Agreement is hereby amended and restated in its
entirety to read as follows:

         "Availability" means, at any time:

                           (i) the lesser of

                           (a) the Maximum Revolver Amount or

                           (b) the lesser of (I) the Borrowing Base plus the
                  Seasonal Overadvance Amount or (II) $20,000,000,

         minus

                           (ii) the Aggregate Revolver Outstandings.

                  (e) LIBOR Borrowings. Unless the Agent and the Majority
Lenders consent in writing and notwithstanding any other provision in the Credit
Agreement to the contrary, from and after November 8, 2001 Borrower may not
request or elect any LIBOR Rate Loans.

         3. Conditions Precedent. The effectiveness of this Amendment is subject
to the satisfaction of the following conditions precedent:

                  (a) Amendment. The Borrower shall have executed and delivered
this Amendment.

                  (b) Amendment Fee. The Borrower shall have paid to the Agent,
for the ratable benefit of the Lenders, an amendment fee in the amount of
$200,000.

                  (c) Payment of Fees. The Borrower shall pay all accrued and
unpaid fees, costs and expenses to the extent then due and payable, together
with Attorney Costs of the Agent, including, without limitation, costs and
expenses incurred in connection with this Amendment.

                  (d) Other Documents. The Borrower shall, and shall cause its
Subsidiaries to, execute and deliver such other approvals, opinions, documents
or materials as the Agent may reasonably request.

                  (e) No Existing Default. After giving effect to this
Amendment, no Default or Event of Default shall exist as of the date hereof.

         4. Miscellaneous

                  (a) Captions. Section captions used in this Amendment are for
convenience only, and shall not affect the construction of this Amendment.

                  (b) Governing Law. This Amendment shall be a contract made
under and governed by the laws of the State of Texas, without regard to conflict
of laws principles.

                  (c) Counterparts. This Amendment may be executed in any number
of counterparts and by the different parties on separate counterparts, and each
such counterpart shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same Amendment.

                  (d) Successors and Assigns. This Amendment shall be binding
upon the Borrower, the Agent and the Lenders and their respective successors and
assigns, and shall inure to the sole benefit of the Borrower, the Agent and the
Lenders and the successors and assigns of the Borrower, the Agent and the
Lenders.

<PAGE>

                  (e) References. Any reference to the Credit Agreement
contained in any notice, request, certificate, or other document executed
concurrently with or after the execution and delivery of this Amendment shall be
deemed to include this Amendment unless the context shall otherwise require.

                  (f) Continued Effectiveness. Notwithstanding anything
contained herein, the terms of this Amendment are not intended to and do not
serve to effect a novation as to the Credit Agreement. The Credit Agreement as
amended hereby and each of the Loan Documents remain in full force and effect.

                     [REMAINDER OF PAGE INTENTIONALLY BLANK]

<PAGE>

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

                               PACKAGED ICE, INC., as the Borrower

                               By:
                                   -------------------------------
                               Its:
                                    ------------------------------

                               BANK OF AMERICA, N.A., as the Agent and a Lender

                               By:
                                   -------------------------------
                               Its:
                                    ------------------------------

                               ANTARES CAPITAL CORPORATION, as a Lender

                               By:
                                   -------------------------------
                               Its:
                                    ------------------------------

                               GMAC BUSINESS CREDIT, LLC, as a Lender

                               By:
                                   -------------------------------
                               Its:
                                    ------------------------------

                               LASALLE BUSINESS CREDIT, INC., as a Lender

                               By:
                                   -------------------------------
                               Its:
                                    ------------------------------

                               HARRIS TRUST AND SAVINGS BANK, as a Lender

                               By:
                                   -------------------------------
                               Its:
                                    ------------------------------

                               THE PROVIDENT BANK, as a Lender

                               By:
                                   -------------------------------
                               Its:
                                    ------------------------------<PAGE>
                                FIRST AMENDMENT

         FIRST AMENDMENT (the "First Amendment"), dated as of November 6, 2001,
among FELCOR LODGING TRUST INCORPORATED (f/k/a FelCor Suite Hotels, Inc.), a
Maryland corporation ("FelCor"), FELCOR LODGING LIMITED PARTNERSHIP (f/k/a
FelCor Suites Limited Partnership), a Delaware limited partnership ("FelCor LP"
and collectively with FelCor, the "US Borrower"), FELCOR CANADA CO., a Nova
Scotia unlimited liability company (the "Canadian Borrower" and collectively
with the US Borrower, the "Borrower"), the Lenders from time to time party
thereto, Bankers Trust Company, as Syndication Agent (the "Syndication Agent")
and THE CHASE MANHATTAN BANK ("Chase") and The Chase Manhattan Bank of Canada
("Chase Canada") as Administrative Agent for the Lenders. Unless otherwise
defined herein, capitalized terms used herein and defined in the Credit
Agreement referred to below are used herein as so defined.

                                   WITNESSETH:

         WHEREAS, the Borrower, the Lenders, the Syndication Agent and the
Administrative Agent are party to the Seventh Amended and Restated Credit
Agreement, dated as of July 26, 2001 (as the same has been amended, modified or
supplemented to, but not including, the date hereof, the "Credit Agreement");
and

         WHEREAS, subject to the terms and conditions set forth below, the
parties hereto wish to amend and waive certain provisions the Credit Agreement
as provided herein;

         NOW, THEREFORE, it is agreed;

I.       Amendments

         1. Section 1.1 of the Credit Agreement is hereby amended by deleting
the definitions of "Applicable Margin" and "Status" and inserting the following
new definitions in lieu thereof:

                  "Applicable Margin" means, with respect to each Revolving
         Credit Loan, the applicable percentage per annum set forth below based
         upon (i) with respect to Level I through IV Status, the Status then in
         effect and (ii) with respect to Level V THROUGH XII Status, the Status
         in effect on the most recent Applicable Margin Reset Date, it being
         understood that the Applicable Margin for (i) Base Rate Loans, Swing
         Advances and Canadian Prime Rate Loans shall be the percentage set
         forth under the column "Base Rate/Canadian Prime Rate Loans", (ii)
         Eurodollar Rate Loans shall be the percentage set forth under the
         column "Eurodollar Rate Loans", and (iii) the Commitment Fee shall be
         the percentage set forth under the column "Commitment Fee":

<PAGE>

<Table>
<Caption>
                                    Base Rate/Canadian
                                        Prime Rate                 Eurodollar Rate                Commitment
                                           Loans                        Loans                         Fee
                                    -------------------            ---------------                ----------
<S>                                 <C>                            <C>                            <C>
Level I Status                            0.0%                         .875%                         0.125%
Level II Status                           0.0%                        1.000%                         0.150%
Level III Status                          0.0%                        1.125%                         0.150%
Level IV Status                           0.0%                        1.250%                         0.200%
Level V Status                            0.0%                        1.375%                         0.200%
Level VI Status                           0.250%                      1.750%                         0.250%
Level VII Status                          0.375%                      1.875%                         0.250%
Level VIII Status                         0.500%                      2.000%                         0.300%
Level IX Status                           0.625%                      2.125%                         0.375%
Level X Status                            1.000%                      2.500%                         0.500%
LEVEL XI STATUS                           1.375%                      2.875%                         0.500%
LEVEL XII STATUS                          1.750%                      3.250%                         0.500%
</Table>

                  "Status" means the existence of Level I Status, Level II
Status, Level III Status, Level IV Status, Level V Status, Level VI Status,
Level VII Status, Level VIII Status, Level IX Status, Level X Status, LEVEL XI
STATUS OR LEVEL XII Status, as the case may be.

                  As used in this definition:

                  "Level I Status" exists on any date if, on such date, either
         US Borrower has a long-term senior unsecured actual debt rating of A-
         or better by S&P and A3 or better by Moody's Investor Service, Inc.
         ("Moody's");

                  "Level II Status" exists on any date if, on such date, either
         US Borrower has a long-term senior unsecured actual debt rating of BBB+
         by S&P and Baa1 by Moody's;

                  "Level III Status" exists on any date if, on such date, either
         US Borrower has a long-term senior unsecured actual debt rating of BBB
         by S&P and Baa2 by Moody's;

                  "Level IV Status" exists on any date if, on such date, either
         US Borrower has a long-term senior unsecured debt rating of BBB- by S&P
         and Baa3 by Moody's;

                  "Level V Status" exists on any date if, on such date (y) none
         of Level I Status through Level IV Status exists and (z) the Leverage
         Ratio is less than 25%;

                  "Level VI Status" exists on any date if, on such date (y) none
         of Level I Status through Level IV Status exists and (z) the Leverage
         Ratio is equal to or greater than 25% but less than 35%;

                  "Level VII Status" exists on any date if, on such date (y)
         none of Level I Status through Level IV Status exists and (z) the
         Leverage Ratio is equal to or greater than 35% but less than 40%;

                                      -2-
<PAGE>

                  "Level VIII Status" exists on any date if, on such date (y)
         none of Level I Status through Level IV Status exists and (z) the
         Leverage Ratio is equal to or greater than 40% but less than 45%;

                  "Level IX Status" exists on any date if, on such date (y) none
         of the Level I Status through Level IV Status exists and (z) the
         Leverage Ratio is equal to or greater than 45% but less than 50%;

                  "Level X Status" exists on any date if, on such date (y) none
         of Level I Status through Level IV Status exists and (z) the Leverage
         Ratio is equal to or greater than 50% but less than 55%;

                  "Level XI Status" exists on any date if, on such date (y) none
         of Level I Status through Level IV Status exists and (Z) the Leverage
         Ratio is equal to or greater than 55% but less than 60%.

                  "Level XII Status" exists on any date if, on such date (y)
         none of Level I Status through Level IV Status exists and (Z) the
         Leverage Ratio is equal to or greater than 60%.

                  If S&P and/or Moody's shall cease to issue ratings of debt
securities of real estate investment trusts generally, then the Administrative
Agent and the US Borrower shall negotiate in good faith to agree upon a
substitute rating agency or agencies (and to correlate the system of ratings of
each substitute rating agency with that of the rating agency for which it is
substituting) and (a) until such substitute rating agency or agencies are agreed
upon, Status shall be determined on the basis of the rating assigned by the
other rating agency (or, if both S&P and Moody's shall have so ceased to issue
such ratings, on the basis of the Status in effect immediately prior thereto)
and (b) after such substitute rating agency or agencies are agreed upon, Status
shall be determined on the basis of the rating assigned by the other rating
agency and such substitute rating agency or the two substitute rating agencies,
as the case may be. If the long term senior unsecured actual debt ratings of
either US Borrower by S&P and Moody's are not equivalent, the higher rating will
apply for the purposes of determining Status. If the long term senior unsecured
actual debt ratings of either US Borrower by S&P and Moody's are two or more
Levels apart, the rating one Level below the higher rating will apply for the
purposes of determining Status."

         2. Section 1.1 of the Credit Agreement is hereby further amended by
inserting in the appropriate alphabetical order the following new definitions:

                  "Discretionary Capital Expenditures" shall mean and refer to
         Capital Expenditures (including Capital Expenditures to expand existing
         Hotels) in excess of (A) those required under applicable law, rule or
         regulation and (B) those funded from the FF&E Reserve.

                  "First Amendment" shall mean the First Amendment, dated as of
         November 6, 2001, among the Borrowers, the Lenders party thereto, the
         Syndication Agent and the Administrative Agent.

                                      -3-
<PAGE>

                  "First Amendment Effective Date" shall have the meaning
         provided in the First Amendment.

                  "Specified Acquisition Amount" shall mean (A) the sum of (i)
         $50,000,000, (ii) the aggregate amount of net cash proceeds received
         from any Asset Sale consummated during the period from the First
         Amendment Effective Date to September 30, 2002, in an aggregate amount
         up to $20,000,000, less the aggregate amount of net cash proceeds
         received from any such Asset Sale consummated during such period that
         have been added to either the Specified Investment Amount or the
         Specified Discretionary Capital Expenditure Amount by the US Borrower
         pursuant to Section 6.12(l) and (iii) the aggregate amount of the net
         cash proceeds received from the sale or issuance of equity by FelCor LP
         during the period from the First Amendment Effective Date to September
         30, 2002, less the aggregate amount of net cash proceeds received from
         such sale or issuance of equity during such period that have been added
         by the US Borrower pursuant to Section 6.12(m) to either the Specified
         Investment Amount or the Specified Discretionary Capital Expenditure
         Amount less (B) the aggregate amount of any acquisition of existing
         Hotel properties during the period from January 1, 2002 through
         September 30, 2002.

                  "Specified Discretionary Capital Expenditure Amount" shall
         mean the sum of (A) $20,000,000, (B) the aggregate amount of net cash
         proceeds received from any Asset Sale consummated during the period
         from the First Amendment Effective Date to September 30, 2002, up to an
         aggregate amount not to exceed $20,000,000 less the aggregate amount of
         net cash proceeds received from any such asset sale consummated during
         such period that have been added by the US Borrower pursuant to Section
         6.12(l) to either the Specified Acquisition Amount or the Specified
         Investment Amount and (C) the aggregate amount of the net cash proceeds
         received from the sale or issuance of equity by FelCor LP during the
         period from the First Amendment Effective Date to September 30, 2002,
         less the aggregate amount of net cash proceeds from such sale or
         issuance of equity during such period that have been added by the US
         Borrower pursuant to Section 6.12(m) to either the Specified
         Acquisition Amount or the Specified Investment Amount.

                  "Specified Investment Amount" shall mean (A) the sum of (i)
         $20,000,000, (ii) the aggregate amount of net cash proceeds received
         from any Asset Sale consummated during the period from the First
         Amendment Effective Date to September 30, 2002, up to an aggregate
         amount not to exceed $20,000,000 less the aggregate amount of net cash
         proceeds received from any such Asset Sale consummated during such
         period that have been added by the US Borrower pursuant to Section
         6.12(l) to either the Specified Acquisition Amount or the Specified
         Discretionary Capital Expenditure Amount and (iii) the aggregate amount
         of the net cash proceeds received from the sale or issuance of equity
         by FelCor LP during the period from the First Amendment Effective Date
         to September 30, 2002 less the aggregate amount of net cash proceeds
         from such sale or issuance of equity during such period that have been
         added by the US Borrower pursuant to Section 6.12(m) to either the
         Specified Acquisition Amount or the Specified Discretionary Capital
         Expenditure Amount, less (B) the aggregate amount of any investment in
         any Joint Enterprise during the period from January 1, 2002 through
         September 30, 2002.

                                      -4-
<PAGE>

         3. Section 5.1 of the Credit Agreement is hereby amended to read in its
entirety as follows:

                  "5.1. Unsecured Interest Expense Coverage. The US Borrower
         shall maintain at the end of each Fiscal Quarter, commencing with the
         Fiscal Quarter ending on June 30, 2000, a ratio of (a) Unencumbered NOI
         to (b) Unsecured Interest Expense, in each case determined on the basis
         of the four (4) Fiscal Quarters ending on the date of determination, of
         not less than 2.25:1.0, provided that, the minimum ratio set forth
         above shall be (i) 1.65:1.0 for the Fiscal Quarters ending December 31,
         2001 through September 30, 2002 and (ii) 2.0:1.0 for the Fiscal Quarter
         ending on December 31, 2002."

         4. Section 5.2 of the Credit Agreement is hereby amended to read in its
entirety as follows:

                  "5.2. Fixed Charge Coverage Ratio. The US Borrower shall
         maintain at the end of each Fiscal Quarter, commencing with the Fiscal
         Quarter ending on June 30, 2000, a ratio of (a) Adjusted EDITDA to (b)
         Fixed Charges, in each case determined on the basis of the four (4)
         Fiscal Quarters ending on the date of determination, of not less than
         1.75:1.0, provided that, the minimum ratio set forth above shall be (i)
         1.35:1.0 for the Fiscal Quarters ending December 31, 2001 through
         September 30, 2002 and (ii) 1.65:1.0 for the Fiscal Quarter ending on
         December 31, 2002."

         5. Section 5.4 of the Credit Agreement is hereby amended to read in its
entirety as follows:

                  "5.4. Limitations on Total Indebtedness. The US Borrower shall
         not, during each Fiscal Quarter on a consolidated basis, permit the
         Total Indebtedness (including, without limitation, the Obligations and
         all Capitalized Lease Obligations) of the US Borrower for borrowed
         money to exceed (i) 65% of Total Value from and including the First
         Amendment Effective Date through September 30, 2002 and (ii) 55% of
         Total Value at all other times."

         6. Section 5.5 of the Credit Agreement is hereby amended to read in its
entirety as follows:

                  "5.5. Limitations on Total Secured Indebtedness. The US
         Borrower shall not, during each Fiscal Quarter on a consolidated basis,
         permit the Total Secured Indebtedness (including, without limitation,
         secured Obligations and Capitalized Lease Obligations) of the US
         Borrower, to exceed 25% of Total Value, provided that, Total Secured
         Indebtedness shall not exceed (i) 30% of Total Value from January 1,
         2002 through September 30, 2002 and (B) 27.5% of Total Value from
         October 1, 2002 through December 31, 2002."

         7. Section 6.12 of the Credit Agreement is hereby amended by (i)
deleting the word "and" at the end of clause (j) thereof, (ii) deleting the
period at the end of clause (k) thereof and inserting a semicolon in lieu
thereof and (iii) inserting the following clauses (l) and (m) immediately
following the end of clause (k) thereof.

                                      -5-
<PAGE>

                  "(l) promptly, and in any event within ten days, after the
         designation by the US Borrower (which such designation shall be in the
         US Borrower's sole discretion), written notice to the Administrative
         Agent of the designation of the amount of net cash proceeds received
         from any Asset Sales during the period from the First Amendment
         Effective Date to September 30, 2002, as a Specified Acquisition
         Amount, a Specified Discretionary Capital Expenditure Amount or a
         Specified Investment Amount; and

                  (m) promptly, and in any event within ten days, after the
         designation by the US Borrower (which such designation shall be in the
         US Borrower's sole discretion), written notice to the Administrative
         Agent of the designation of the amount of net cash proceeds received
         from any equity issuances during the period from the First Amendment
         Effective Date to September 30, 2002, as a Specified Acquisition
         Amount, a Specified Discretionary Capital Expenditure Amount or a
         Specified Investment Amount."

         8. Section 7.4 of the Credit Agreement is hereby amended by (i)
inserting the reference "(a)" at the beginning of said section and (ii)
inserting the following new clause (b) immediately following the period at the
end of clause (a):

                  "(b) Notwithstanding anything to the contrary contained in
         clause (a) of this Section 7.4, other than Restricted Payments made in
         accordance with clauses (a)(i) and (a)(ii) of this Section 7.4, the US
         Borrower shall not make Restricted Payments under such clause (a)
         during the Fiscal Quarters ending from and including December 31, 2001
         through December 31, 2002 that exceed: (A) for the Fiscal Quarter ended
         December 31, 2001, an amount equal to the lesser of 85% of the
         consolidated Adjusted Funds From Operations and 100% of the Free Cash
         Flow of the US Borrower for such Fiscal Quarter, plus an amount equal
         to $5,000,000; provided, however, that notwithstanding the foregoing
         limitation on Restricted Payments, the US Borrower shall be permitted
         to declare or authorize the payment of (I) current dividends on its
         preferred stock during such Fiscal Quarter in an aggregate amount not
         to exceed $6,150,000 and (II) current dividends on its common stock and
         units during such Fiscal Quarter in an amount equal to $0.01 multiplied
         by the number of shares and units of the US Borrower's common stock
         and/or units outstanding as of the record date declared by the US
         Borrower's Board of Directors for such fiscal quarter; (B) for the
         Fiscal Quarter ended March 31, 2002, an amount equal to the lesser of
         (I) 85% of the consolidated Adjusted Funds From Operations and (II) (i)
         100% of the Free Cash Flow of the US Borrower for such Fiscal Quarter
         or (ii) 85% of the Free Cash Flow of the US Borrower for such Fiscal
         Quarter to the extent that the US Borrower's Total Indebtedness for
         borrowed money is equal to or exceeds 55% of Total Value at the time of
         and after giving effect to such Restricted Payments, plus an amount
         equal to $5,000,000; (C) for the Fiscal Quarter ended June 30, 2002, an
         amount equal to the lesser of (I) 85% of the consolidated Adjusted
         Funds From Operations and (II) (i) 100% of the Free Cash Flow of the US
         Borrower or (ii) 85% of the Free Cash Flow of the US Borrower for such
         Fiscal Quarter to the extent that the US Borrower's Total Indebtedness
         for borrowed money is equal to or exceeds 55% of Total Value at the
         time of and after giving effect to such Restricted Payments, for the
         two consecutive Fiscal Quarters ended June 30, 2002 minus the
         Restricted Payments made by it during the Fiscal Quarter ended March
         31, 2002; (D) for the Fiscal Quarter ended September 30, 2002, an
         amount equal to the lesser of (I) 85% of the consolidated

                                      -6-
<PAGE>
         Adjusted Funds From Operations and (II) (i) 100% of the Free Cash Flow
         of the US Borrower or (ii) 85% of the Free Cash Flow of the US Borrower
         for such Fiscal Quarter to the extent that the US Borrower's Total
         Indebtedness for borrowed money is equal to or exceeds 55% of Total
         Value at the time of and after giving effect to such Restricted
         Payments, for the three consecutive Fiscal Quarters ended September 30,
         2002 minus the Restricted Payments made by it during the two
         consecutive Fiscal Quarters ended June 30, 2002; and (E) for the Fiscal
         Quarter ended December 31, 2002, an amount equal to the lesser of 85%
         of the consolidated Adjusted Funds From Operations and 100% of the Free
         Cash Flow of the US Borrower for the four consecutive Fiscal Quarters
         ended December 31, 2002 minus the Restricted Payments made by it during
         the three consecutive Fiscal Quarters ended September 30, 2002."

         9. Section 7.5 of the Credit Agreement is hereby amended by inserting
the following new clause (d), immediately following the end of clause (c)
thereof:

                  "(d) Notwithstanding anything to the contrary contained in
         this Agreement, (i) the US Borrower shall not and shall not permit any
         of its Subsidiaries or Eligible Joint Ventures to acquire any existing
         Hotel properties during the period from the First Amendment Effective
         Date through December 31, 2001 and (ii) for the period from January 1,
         2002 through September 30, 2002, the US Borrower may acquire existing
         Hotel properties, so long as (I) the Total Indebtedness for borrowed
         money of the US Borrower does not exceed 60% of Total Value both before
         and after giving effect to such acquisition and (II) at least 10
         Business Days prior to the consummation of any such acquisition the US
         Borrower shall deliver to the Administrative Agent a certificate of the
         US Borrower's chief financial officer or treasurer certifying (and
         showing calculations in reasonable detail) that the US Borrower would
         have been in compliance with the financial covenants set forth in
         Sections 5.1, 5.2, 5.3, 5.4, 5.5, 5.6, and 5.7, as amended hereby, for
         the most recently ended four (4) Fiscal Quarters prior to the date of
         such acquisition, in each case with such financial covenants to be
         determined on a pro forma basis as if such acquisition had been
         consummated on the first day of such four (4) Fiscal Quarter period
         (and assuming that any Indebtedness incurred, issued or assumed in
         connection therewith had been incurred, issued or assumed on the first
         day of such four (4) Fiscal Quarter period); provided that to the
         extent that the US Borrower's Total Indebtedness for borrowed money
         exceeds 60% of Total Value either at the time of or after giving effect
         to such acquisition, the US Borrower may only acquire existing Hotel
         properties in an aggregate amount not to exceed the Specified
         Acquisition Amount at the time of such acquisition.

         10. Section 7.6 of the Credit Agreement is hereby amended by inserting
the following new clause (c), immediately following the end of clause (b)
thereof:

                  "(c) Notwithstanding anything to the contrary contained in
         this Agreement, during the period from the First Amendment Effective
         Date to December 31, 2002, the US Borrower shall not, and shall not
         permit any of its Subsidiaries or Eligible Joint Ventures to engage in
         the construction of new hotels, enter into any commitments or
         agreements to purchase any Hotels under or to be under, original
         construction or to acquire any additional budget hotels, limited
         service hotels or extended stay hotels other

                                      -7-
<PAGE>
         than (A) to engage in or continue the construction of the Margate
         complex and (B) to invest an aggregate amount not to exceed $10,000,000
         in a Holiday Inn prototype to be located in Denver, Colorado."

         11. Section 7.13 of the Credit Agreement is hereby amended by (i)
inserting the reference "(a)" at the beginning of said section and (ii)
inserting the following new clause (b) immediately following the period at the
end of clause (a):

                  "(b) Notwithstanding anything to the contrary contained in
         this Agreement, (i) the US Borrower shall not, and shall not permit any
         of its Subsidiaries or Eligible Joint Ventures to invest in any Joint
         Enterprises for the period from and including the First Amendment
         Effective Date through December 31, 2001 and (ii) for the period from
         January 1, 2002 until September 30, 2002, the US Borrower may invest in
         Joint Enterprises, so long as (I) the Total Indebtedness for borrowed
         money of the US Borrower does not exceed 60% of Total Value both before
         and after giving effect to such investment and (II) at least 10
         Business Days prior to the consummation of any such investment the US
         Borrower shall deliver to the Administrative Agent a certificate of the
         US Borrower's chief financial officer or treasurer certifying (and
         showing calculations in reasonable detail) that the US Borrower would
         have been in compliance with the financial covenants set forth in
         Sections 5.1, 5.2, 5.3, 5.4, 5.5, 5.6, and 5.7, as amended hereby, for
         the most recently ended four (4) Fiscal Quarters prior to the date of
         such investment, in each case with such financial covenants to be
         determined on a pro forma basis as if such investment had been
         consummated on the first day of such four (4) Fiscal Quarter period
         (and assuming that any Indebtedness incurred, issued or assumed in
         connection therewith had been incurred, issued or assumed on the first
         day of such four (4) Fiscal Quarter period); provided that to the
         extent that the US Borrower's Total Indebtedness for borrowed money
         exceeds 60% of Total Value either at the time of or after giving effect
         to such investment, the US Borrower may only invest in a Joint
         Enterprise in an aggregate amount not to exceed the Specified
         Investment Amount at the time of such investment.

         12. The Credit Agreement is hereby amended by inserting the following
new Section 7.17, immediately following the end of Section 7.16:

                  "7.17. Limitation on Capital Expenditures. The US Borrower
         shall not, and shall not permit any of its Subsidiaries or Eligible
         Joint Ventures to, incur any Discretionary Capital Expenditures during
         the period from the First Amendment Effective Date until September 30,
         2002, other than Discretionary Capital Expenditures for the expansion
         or renovation of Hotels in an aggregate amount not to exceed the
         Specified Discretionary Capital Expenditure Amount at the time of such
         Discretionary Capital Expenditure.

II.      Miscellaneous Provisions

         1. In order to induce the Lenders to enter into this First Amendment,
each Borrower hereby represents and warrants on behalf of itself and its
respective Subsidiaries that (i) the representations and warranties of contained
in Article IV of the Credit Agreement are true and correct in all material
respects on and as of the First Amendment Effective Date (as defined

                                      -8-
<PAGE>
below) (except with respect to any representations and warranties limited by
their terms to a specific date, which shall be true and correct in all material
respects as of such date), and (ii) there exists no Default or Event of Default
under the Credit Agreement on the First Amendment Effective Date, in each case
after giving effect to this First Amendment.

         2. All of the parties hereby acknowledge and agree that since the
Meristar Merger has not been consummated, Dresdner Bank AG, New York Branch and
Grand Cayman Branch and Societe General are each hereby released as parties
under the Credit Agreement and each hereby released of any and all obligations
thereunder.

         3. The US Borrower hereby agrees to pay each Lender which delivers an
executed copy of this First Amendment (by hard copy or facsimile) to the
Administrative Agent by no later than 12:00 (Noon) (New York time) on November
8, 2001, a fee (the "Amendment Fee") in an amount equal to 0.075% of such
Lender's Revolving Credit Commitment, which Amendment Fee shall be due and
payable on the first Business Day following the date on which the Super Majority
Lenders shall have executed and delivered this First Amendment.

         4. This First Amendment is limited as specified and shall not
constitute an amendment, modification, acceptance or waiver of any other
provision of the Credit Agreement or any other Loan Document.

         5. THIS FIRST AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE
STATE OF NEW YORK.

         6. This First Amendment shall become effective on the date (the "First
Amendment Effective Date") when each Borrower and the Super Majority Lenders
shall have signed a counterpart hereof (whether the same or different
counterparts) and shall have delivered (including by way of telecopier) the same
to the Administrative Agent.

         7. From and after the First Amendment Effective Date, all references in
the Credit Agreement and in the other Loan Documents shall be deemed to be
referenced to the Credit Agreement as modified hereby.

                                      * * *

                              [Signatures Omitted]

                                      -9-

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