1ST Amend. Sub. Unsecured Term Loan Agreement

Exhibit 10.6.1

FIRST AMENDMENT TO
SUBORDINATE UNSECURED TERM LOAN AGREEMENT

THIS FIRST AMENDMENT TO SUBORDINATE UNSECURED TERM LOAN AGREEMENT (this " Amendment" ), dated as of July 31, 2003 (the " Amendment Date" ), is among INTERSTATE OPERATING COMPANY, L.P. (fka MeriStar H & R Operating Company, L.P.), a Delaware limited partnership, as the Borrower (" Borrower" ); the Guarantors; LEHMAN COMMERCIAL PAPER, INC., as the Administrative Agent (" Administrative Agent" ); LEHMAN BROTHERS, INC., as Sole Lead Arranger and Book Runner (" Lead Arranger" ); LEHMAN BROTHERS, INC., as Lender (" Lehman" ); and the Lenders a party hereto.

RECITALS:

A. The Borrower, the Administrative Agent, Lehman and the Lenders are party to that certain Subordinate Unsecured Term Loan Agreement dated as of January 10, 2003, (the " Original Loan Agreement" ).

B. The parties hereto desire to amend the Original Loan Agreement and the other Credit Documents (as defined in the Original Loan Agreement) as hereinafter provided.

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

1. All terms used in this Amendment, but not defined herein, shall have the meaning given such terms in the Original Loan Agreement.

2. This Amendment shall become effective as of the Amendment Date if on or prior to the close of business on August 15, 2003 (the " Termination Date" ) the following conditions precedent have been satisfied:

a. Documentation. The Administrative Agent shall have received counterparts of this Amendment executed by the Borrower, the Guarantors and the Required Lenders.

b. Representations and Warranties. The representations and warranties contained in this Amendment, and in each Credit Document shall be true and correct in all material respects both as of the Amendment Date and the date the other conditions to this Amendment' s effectiveness are satisfied except for changes which individually or in the aggregate do not constitute a Material Adverse Change.


c. No Default. No Default or Event of Default shall exist as of either the Amendment Date or the date the other conditions to this Amendment' s effectiveness are satisfied.

d. Senior Credit Facility. The Administrative Agent shall have received counterparts of the " Third Amendment to the Senior Secured Credit Agreement" in the form attached hereto as Exhibit A with respect to the Senior Credit Facility, fully executed by Borrower, Senior Guarantors, Socie9te9 Ge9ne9rale as Administrative Agent, SG Cowen Securities Corporation as Joint Lead Arranger and Book Runner, Salomon Smith Barney Inc. as Joint Lead Arranger, Book Runner, and Co-Syndication Agent, Lehman Brothers, Inc. as Joint Lead Arranger, Book Runner, and Co-Syndication Agent, Credit Lyonnais New York Branch as Documentation Agent, and various other lenders that are a party to the Senior Credit Facility.

e. Fees. The Administrative Agent shall have received for the benefit of each Lender that executes and delivers this Amendment to the Administrative Agent' s counsel by 5:00 p.m. EST on August 13, 2003 an amendment fee equal to fifteen (15) basis points times such Lender' s Commitment.

If this Amendment does not become effective prior to the Termination Date, this Amendment shall be null and void; provided however that the Borrower shall still be obligated to reimburse Administrative Agent for costs and expenses incurred in connection with this Amendment.

3. The term " Loan Agreement" as used in the Credit Documents, shall mean the Original Loan Agreement, as amended by this Amendment.

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4. From and after the Amendment Date, the chart set forth in Section 7.03(a) of the Loan Agreement is deleted in its entirety and replaced with the following chart: Beginning Date of Ending Date of Applicable Applicable Period Period Leverage Ratio Closing Date The day immediately prior to the Status Reset Date during the Fiscal Quarter commencing October 1, 2002 5.75 to 1.00 The Status Reset Date during the Fiscal Quarter commencing October 1, 2002 The day immediately prior to the Status Reset Date during the Fiscal Quarter commencing January 1, 2003 5.25 to 1.00 The Status Reset Date during the Fiscal Quarter commencing January 1, 2003 The day immediately prior to the Status Reset Date during the Fiscal Quarter commencing July 1, 2003 5.00 to 1.00 The Status Reset Date during the Fiscal Quarter commencing July 1, 2003 The day immediately prior to the Status Reset Date during the Fiscal Quarter commencing October 1, 2003 4.70 to 1.00 The Status Reset Date during the Fiscal Quarter commencing October 1, 2003 The day immediately prior to the Status Reset Date during the Fiscal Quarter commencing April 1, 2004 4.50 to 1.00 The Status Reset Date during the Fiscal Quarter commencing April 1, 2004 The day immediately prior to the Status Reset Date during the Fiscal Quarter commencing January 1, 2005 4.25 to 1.00 The Status Reset Date during the Fiscal Quarter commencing January 1, 2005 No ending date 3.75 to 1.00

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5. In accordance with Section 7.06 of the Loan Agreement, from and after the Amendment Date, the chart set forth in Section 7.04 of the Loan Agreement is deleted in its entirety and replaced with the following chart: Beginning Date of Ending Date of Applicable Period Applicable Period Senior Leverage Ratio Closing Date The day immediately prior to the Status Reset Date during the Fiscal Quarter commencing January 1, 2003 4.00 to 1.00 The Status Reset Date during the Fiscal Quarter commencing January 1, 2003 The day immediately prior to the Status Reset Date during the Fiscal Quarter commencing January 1, 2004 3.25 to 1.00 The Status Reset Date during the Fiscal Quarter commencing January 1, 2004 The day immediately prior to the Status Reset Date during the Fiscal Quarter commencing April 1, 2004 3.00 to 1.00 The Status Reset Date during the Fiscal Quarter commencing April 1, 2004 The day immediately prior to the Status Reset Date during the Fiscal Quarter commencing October 1, 2004 2.75 to 1.00 The Status Reset Date during the Fiscal Quarter commencing October 1, 2004 No ending date 2.50 to 1.00

6. Each party hereto represents to the other parties hereto that such party is authorized to execute this Amendment. In addition, the Borrower and the Guarantors represent and warrant to the Lenders and the Administrative Agent that (a) the representations and warranties contained in this Amendment, and in each Credit Document are true and correct in all material respects as of the Amendment Date except for changes which individually or in the aggregate do not constitute a Material Adverse Change, (b) no Default or Event of Default exists as of the Amendment Date except for any such Default or Event of Default as is expressly waived or eliminated by this Amendment, and (c) such Persons have no claims, offsets, or

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counterclaims with respect to their respective obligations under the Credit Documents as of the Amendment Date.

7. This Amendment may be executed in multiple counterparts, each of which shall be an original, but all of which shall constitute but one Amendment.

8. Borrower shall pay all costs and expenses of Lender in connection with this Modification, including without limitation, the fees and disbursements of Lender' s counsel.

9. This Modification may not be modified, amended, waived, changed or terminated orally, but only by an agreement in writing signed by the party against whom the enforcement of the modification, amendment, waiver, change or termination is sought.

10. This Modification shall be binding upon and inure to the benefit of Borrower, Indemnitor, Lender, and all future holders of the Secured Note and their respective successors and assigns..

11. If any term, covenant or condition of this Modification shall be held to be invalid, illegal or unenforceable in any respect, this Modification shall be construed without such provision.

12. This Modification shall be governed by and construed in accordance with the laws of the State of New York and the applicable laws of the United States of America.

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