Objection Deadline: To be set on no fewer than 14 days notice.

James H.M. Sprayregen, P.C. Paul M. Basta KIRKLAND & ELLIS LLP 601 Lexington Avenue New York, New York 10022-4611 Telephone: (212) 446-4800 Facsimile: (212) 446-4900 and Anup Sathy, P.C. Marc J. Carmel (admitted pro hac vice) KIRKLAND & ELLIS LLP 300 North LaSalle Chicago, Illinois 60654-3406 Telephone: (312) 862-2000 Facsimile: (312) 862-2200 Counsel to the Debtors and Debtors in Possession UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF NEW YORK In re: INNKEEPERS USA TRUST, et al.,1 Debtors. ) ) ) ) ) ) ) Chapter 11 Case No. 10-13800 (SCC) Jointly Administered

FIRST INTERIM APPLICATION OF KIRKLAND & ELLIS LLP FOR (A) COMPENSATION FOR PROFESSIONAL SERVICES RENDERED AND (B) REIMBURSEMENT OF ACTUAL AND NECESSARY EXPENSES INCURRED DURING THE PERIOD JULY 19, 2010 THROUGH NOVEMBER 30, 2010

The list of Debtors in these Chapter 11 Cases along with the last four digits of each Debtors federal tax identification number can be found by visiting the Debtors restructuring website at www.omnimgt.com/innkeepers or by contacting Omni Management Group, LLC at Innkeepers USA Trust c/o Omni Management Group, LLC, 16161 Ventura Boulevard, Suite C, PMB 606, Encino, California 91436. The location of the Debtors corporate headquarters and the service address for their affiliates is: c/o Innkeepers USA, 340 Royal Poinciana Way, Suite 306, Palm Beach, Florida 33480.

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Table of Contents Table of Contents ............................................................................................................................. i Summary of First Interim Fee Application ......................................................................................1 Jurisdiction .......................................................................................................................................3 Background ......................................................................................................................................3 Reasonable and Necessary Services Rendered by K&E..................................................................3 Retention and Disinterestedness of Kirkland & Ellis LLP ..............................................................8 Compensation and Expenses Requested ........................................................................................10 Reasonable and Necessary Services Rendered by K&E Categorized by Subject Matter...........13 Actual and Necessary Expenses Incurred by Kirkland & Ellis LLP ............................................26 K&Es Requested Compensation and Reimbursement Should be Allowed ................................27 Notice .............................................................................................................................................30 No Prior Request ............................................................................................................................30 Conclusion .....................................................................................................................................31

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Summary of First Interim Fee Application

NAME OF APPLICANT: AUTHORIZED TO PROVIDE PROFESSIONAL SERVICES TO: DATE OF RETENTION: COMPENSATION & EXPENSE REIMBURSEMENT PERIOD: AMOUNT OF COMPENSATION REQUESTED: AMOUNT OF EXPENSE REIMBURSEMENT REQUESTED: TOTAL AMOUNT OF COMPENSATION & EXPENSE REIMBURSEMENT REQUESTED: TOTAL AMOUNT OF COMPENSATION & EXPENSE REIMBURSEMENT PREVIOUSLY REQUESTED AND AWARDED:

Kirkland & Ellis LLP Debtors and Debtors-in-Possession July 19, 2010 (Order entered August 12, 2010) July 19, 2010 through November 30, 2010 $6,276,488.50 $407,520.25 $6,684,008.75 $0.00

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Kirkland & Ellis LLP (K&E), counsel for the above-captioned debtors and debtors in possession (collectively, the Debtors), submits this first interim fee application (the First Interim Fee Application) pursuant to: sections 330 and 331 of title 11 of the United States Code (the Bankruptcy Code); Rule 2016 of the Federal Rules of Bankruptcy Procedure (the Bankruptcy Rules); Rule 2016-1 of the Local Rules for the United States Bankruptcy Court for the Southern District of New York (the Local Rules); General Order M-389, Amended Guidelines for Fees and Disbursements for Professionals in Southern District of New York Bankruptcy Cases (the Local Guidelines); the Order Authorizing the Establishment of Procedures for Interim Compensation and Reimbursement of Expenses for Professionals and Official Committee Members [Docket No. 189] (the Interim Compensation Order);2 and the United States Trustee Guidelines for Reviewing Applications for Compensation and Reimbursement of Expenses Filed Under 11 U.S.C. 330, effective January 30, 1996 (the UST Guidelines, and together with the Local Guidelines, the Guidelines), for allowance and approval of interim compensation for professional services rendered to the Debtors and for reimbursement of actual and necessary expenses incurred in connection with such services from July 19, 2010 through and including November 30, 2010 (the First Interim Fee Period). In support of this First Interim Fee Application, K&E respectfully represents as follows:

Capitalized terms used but not defined herein shall have the meanings assigned to them in the Interim Compensation Order.

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Jurisdiction 1. The Court has jurisdiction over this matter pursuant to 28 U.S.C. 1334. This

matter is a core proceeding within the meaning of 28 U.S.C. 157(b)(2). 2. 3. Venue is proper pursuant to 28 U.S.C. 1408 and 1409. The bases for the relief requested herein are sections 330 and 331 of the

Bankruptcy Code, Bankruptcy Rule 2016, Local Rule 2016-1, and the Guidelines. Pursuant to the Local Guidelines, a certification of compliance is attached hereto as Exhibit A. Background 4. On July 19, 2010 (the Petition Date), each of the Debtors filed a petition with

the Court under chapter 11 of the Bankruptcy Code (collectively, the Chapter 11 Cases). The Chapter 11 Cases have been consolidated for procedural purposes only and are being jointly administered pursuant to Bankruptcy Rule 1015(b). The Debtors are operating their business and managing their properties as debtors in possession pursuant to sections 1107(a) and 1108 of the Bankruptcy Code. On July 28, 2010, the United States Trustee for the Southern District of New York (the U.S. Trustee) appointed an official committee of unsecured creditors (the Creditors Committee). 5. Additional information regarding the Debtors business, capital structure, and the

circumstances leading to the Chapter 11 Cases is contained in the Amended Declaration of Dennis Craven, Chief Financial Officer of Innkeepers USA Trust, in Support of First-Day Pleadings [Docket No. 33, as supplemented by Docket No. 516]. Reasonable and Necessary Services Rendered by K&E 6. The administration of the Debtors Chapter 11 Cases has been a demanding and

complex undertaking. The Debtors complicated capital structure has brought together a number 3
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of sophisticated parties with frequently divergent interests. Many of these parties have disagreed with relief sought by the Debtors. After helping the Debtors transition into chapter 11 and stabilize their businesswhich included approval of the use of cash collateral to fund ongoing operations and the Debtors restructuring efforts as well as two separate debtor-in-possession financings to fund necessary capital expenditures to satisfy property improvement plans and other improvementsK&E assisted the Debtors in arranging the support for the Debtors restructuring goals from its largest franchisor and obtaining a meaningful extension of exclusivity. Those achievements, among others, laid the foundation for the Debtors to advance to the next phase of their restructuringthe solicitation of a stalking horse plan and a formal auction process to ensure the maximization of estate value.3 A. 7. The Debtors Transition into Chapter 11 Since the Petition Date, K&E has worked to ensure a smooth transition for the

Debtors into chapter 11. Specifically, K&E assisted the Debtors with implementation of the package of first day relief that K&E assisted the Debtors in seeking on the Petition Date. K&E also helped the Debtors address 13 objections to first day pleadings,4 with the Court granting all of the relief requested. In addition, K&E assisted the Debtors in negotiating a complex and comprehensive cash collateral arrangement involving a collection of secured parties. K&E spent

On January 14, 2011, the Debtors filed the Debtors Motion for Entry of an Order (I) Authorizing the Debtors to Enter into the Commitment Letter with Five Mile Capital II Pooling REIT LLC, Lehman ALI Inc., and Midland Loan Services, (II) Approving the New Party/Midland Commitment between the Debtors and Midland Loan Services, (III) Approving Bidding Procedures, (IV) Approving Bid Protections, (V) Authorizing an Expense Reimbursement to Bidder D, and (VI) Modifying Cash Collateral Order to Increase Expense Reserve [Docket No. 820] (the Stalking Horse Motion). Number of objections excludes objections to the Debtors motions for the final use of cash collateral, entry into the DIP Financings (as defined herein), and authority to assume the PSA (as defined herein). See Docket Nos. 38, 120, 134, 135, 136, 137, 138, 139, 142, 143, 144, 145, and 146.

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considerable efforts preparing to defend the Debtors rights to use cash on a contested basis. K&E also assisted the Debtors in negotiating and seeking authority to enter into two separate debtor-in-possession financings (the DIP Financings) to permit the Debtors to bring their hotel properties into compliance with certain conditions of the Debtors franchise agreements.5 B. 8. Key Matters K&E also spent considerable time during the First Interim Fee Period addressing

challenges to extending the Debtors exclusive periods under section 1121 of the Bankruptcy Code. In August and September, certain parties filed motions to terminate the Debtors K&E assisted the Debtors in

exclusivity (the Motions to Terminate Exclusivity).6

developing comprehensive responses to these motions. After adjournments of these motions, on October 27, 2010, the Debtors filed a motion to extend their exclusive periods and objection to the Motions to Terminate Exclusivity [Docket No. 610]. Given the complexity of the Chapter 11 Cases, resolution of the exclusivity pleadings required substantial time by K&E performing legal research, developing facts (including preparing for and taking depositions), and negotiating with multiple parties. In particular, K&E relied on its litigation group to assist K&Es restructuring attorneys with managing the discovery process and developing key facts and arguments. K&E ultimately assisted the Debtors in arriving at a resolution, supported by nearly all of the objectors, to extend the Debtors exclusive period for filing a chapter 11 plan to January 30, 2011 (a 75-day extension).

Parties in interest filed a number of objections to the Debtors final use of cash collateral [Docket No. 13] and to the Debtors entry into the DIP Financings [Docket Nos. 23 and 24]. See Docket Nos. 254, 255, 256, 257, 265, 267, 287, 279, and 311. See Docket Nos. 348, 437, 455, and 456.

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9.

K&E also spent time defending the Debtors against motions to appoint an

examiner in the Chapter 11 Cases [Docket No. 179] (the Examiner Motion) and to appoint an official committee of preferred shareholders [Docket No. 435] (the Equity Committee Motion). K&E researched and drafted response papers, developed facts and testimony

regarding relevant issues, and negotiated with counsel to the movants, resulting in a favorable resolution for the Debtors in which the Court denied the motions without prejudice. C. 10. Addressing Issues with the Debtors Largest Franchisor Both before the filing of the Chapter 11 Cases and during the First Interim Fee

Period, K&E assisted the Debtors in analyzing and addressing numerous issues related to the Debtors largest franchisor, Marriot International, Inc. (Marriott). As the Debtors largest franchisor, Marriott has played an integral role in the Debtors reorganization to date. Prior to the Petition Date, on June 25, 2010, the Debtors and Marriott entered into an Agreement for Adequate Assurance of Completion of Certain PIPs and Assumption of Agreements (the Marriott Adequate Assurance Agreement) extending the Debtors deadlines to comply with certain property improvement plans (PIPs) required under applicable franchise agreements with Marriott. Previously, Marriott had issued notices of default with respect to certain of the Debtors franchise agreements with Marriott relating to the Debtors alleged failure to perform certain PIP obligations. The Marriott Adequate Assurance Agreement

reflected a resolution of disputes over, among other things, the completion of certain PIPs, thus permitting the Debtors to maintain their valuable relationship with Marriott. With the Marriott Adequate Assurance Agreement, K&E permitted the Debtors to avoid Marriott seeking relief from the automatic stay with respect to its franchise agreements. As a result, the Debtors were able to focus their attention on negotiations with their key constituencies free from the 6
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uncertainty caused by potential litigation over the application of the automatic stay to many of the Debtors hotels. 11. The Debtors and Marriott were also involved in a dispute (the Troy Dispute)

over a particular hotel in Troy, Michigan (the Troy Hotel). On August 4, 2010, Marriott filed a motion for relief from the automatic stay with regard to the Troy Hotel [Docket No. 131], which was not part of the Marriott Adequate Assurance Agreement. In response, the Debtors sought to assume the franchise agreement between the Debtors and Marriott relating to the Troy Hotel [Docket No. 172]. Subsequently, K&E advised the Debtors of their alternatives with regard to resolution of the Troy Dispute. After an extensive discovery process, the Debtors determined that the estates were better served by settling with Marriott, which settlement included, among other provisions, the Debtors agreement to allow Marriott to de-identify the Troy Hotel in exchange for Marriott providing the Debtors with valuable rights documented in a confidential settlement agreement disclosed to the Court. K&E assisted the Debtors in arriving at this negotiated settlement and documented the agreement with Marriott (the Troy Stipulation) [Docket No. 357]. In consideration for the provisions in the Troy Stipulation, the Debtors also agreed to seek the assumption of the Marriott Adequate Assurance Agreement [Docket No. 446]. D. 12. Developing a Plan of Reorganization. On the Petition Date, the Debtors filed a motion to assume a plan support

agreement (PSA) with Lehman ALI Inc. (Lehman) [Docket No. 15]. Although the Court did not authorize the Debtors to assume the PSA, the Debtors responded by quickly restarting the plan development process. In September, the Debtors, K&E, and the Debtors other advisors implemented a process to identify a plan sponsor, which encouraged participation from all of the 7
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Debtors key constituencies. In fact, the Debtors pursued this redesigned plan process during a majority of the First Interim Fee Period. Beginning in September 2010, the Debtors engaged all key constituencies to solicit input regarding restructuring alternatives with the goal of proposing and filing a consensual plan. To promote meaningful plan development and dialogue, the Debtors created a virtual data room through which potential plan sponsors could perform necessary diligence. Working with K&E and their other advisors, the Debtors established a communication protocol to solicit, receive, and consider restructuring proposals. With advice from K&E, the Debtors also formed a committee of independent trustees of Debtor Innkeepers USA Trust to facilitate the plan process. K&E was actively involved in each of these steps, assisting and advising the Debtors as necessary and appropriate to ensure progress towards and resolution to the Chapter 11 Cases. As a result of K&Es efforts and as set forth in detail in the Stalking Horse Motion, the Debtors are now prepared to enter the next phase of the Chapter 11 Cases. Retention and Disinterestedness of Kirkland & Ellis LLP 13. As disclosed in the Declaration of Paul M. Basta in Support of the Debtors

Application for Entry of an Order Authorizing the Retention and Employment of Kirkland & Ellis LLP as Attorneys for the Debtors and Debtors in Possession Nunc Pro Tunc to the Petition Date [Docket No. 20, Ex. B]; the Supplemental Declaration of Paul M. Basta in Support of the Debtors Application for Entry of an Order Authorizing the Retention and Employment of Kirkland & Ellis LLP as Attorneys for the Debtors and Debtors in Possession Nunc Pro Tunc to the Petition Date [Docket No. 126]; and the Second Supplemental Declaration of Paul M. Basta in Support of the Debtors Application for Entry of an Order Authorizing the Retention and Employment of Kirkland & Ellis LLP as Attorneys for the Debtors and Debtors in Possession 8
K&E 18047816.13

Nunc Pro Tunc to the Petition Date [Docket No. 543] (collectively, the Declarations), K&E does not hold or represent any interest adverse to the Debtors estates and is a disinterested person as that term is defined in section 101(14) of the Bankruptcy Code as modified by section 1107(b) of the Bankruptcy Code. 14. K&E may have in the past represented, may currently represent, and likely in the

future will represent, parties in interest in connection with matters unrelated to the Debtors in the Chapter 11 Cases. In the Declarations, K&E disclosed its connections to parties in interest that it has been able to ascertain using its reasonable efforts. K&E will update the Declarations, as appropriate, if K&E becomes aware of relevant and material new information. 15. K&E performed the services for which it is seeking compensation on behalf of or

for the Debtors and their estates, and not on behalf of any committee, creditor, or other entity. 16. Except to the extent of the advance payments paid to K&E that K&E previously

disclosed to this Court in the Declarations, K&E has received no payment and no promises for payment from any source other than the Debtors for services rendered or to be rendered in any capacity whatsoever in connection with the Chapter 11 Cases. 17. Pursuant to Bankruptcy Rule 2016(b), K&E has not shared, nor has K&E agreed

to share, (a) any compensation it has received or may receive with another party or person other than with the partners, counsel, and associates of K&E or (b) any compensation another person or party has received or may receive. 18. At the hearing at which the Court approved the Debtors compensation of Fried,

Frank, Harris, Shriver & Jacobson LLP (Fried Frank), the Court directed K&E and Fried Frank to pay particular attention to avoiding the duplication of efforts. K&E is mindful of the

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Courts instructions and continues to take all actions appropriate to avoid any duplication of efforts. Compensation and Expenses Requested 19. K&E now files this First Interim Fee Application seeking allowance of

compensation for professional services rendered to the Debtors during the First Interim Fee Period in the aggregate amount of $6,276,488.50 and reimbursement of actual expenses incurred in connection with the rendition of such services in the aggregate amount of $407,520.25, for a total request of $6,684,008.75.7 20. In accordance with the Interim Compensation Order, K&E has served five

Monthly Applications, covering the First Interim Fee Period, on: (a) the Debtors; (b) the U.S. Trustee; (c) counsel to the Creditors Committee; (d) counsel to Midland Loan Services, Inc. (Midland); and (e) counsel to Certain Prepetition Lenders.8 Five responses were filed to

In accordance with the Second Supplemental Declaration of Paul M. Basta in Support of the Debtors Application for Entry of an Order Authorizing the Retention and Employment of Kirkland & Ellis LLP as Attorneys for the Debtors and Debtors in Possession Nunc Pro Tunc to the Petition Date [Docket No. 543], K&E will apply any remaining amounts of its prepetition retainer to the fees and expenses awarded pursuant to this Interim Fee Application before requesting payment from the Debtors. See Monthly Application of Kirkland & Ellis LLP for Compensation for Services and Reimbursement of Expenses as Attorneys for the Debtors and Debtors in Possession for the Period from July 19, 2010 through July 31, 2010, filed August 25, 2010 [Docket No. 318]; Monthly Application of Kirkland & Ellis LLP for Compensation for Services and Reimbursement of Expenses as Attorneys for the Debtors and Debtors in Possession for the Period from August 1, 2010 through August 31, 2010, filed October 13, 2010 [Docket No. 571]; Monthly Application of Kirkland & Ellis LLP for Compensation for Services and Reimbursement of Expenses as Attorneys for the Debtors and Debtors in Possession for the Period from September 1, 2010 through September 30, 2010, filed October 29, 2010 [Docket No. 632]; Monthly Application of Kirkland & Ellis LLP for Compensation for Services and Reimbursement of Expenses as Attorneys for the Debtors and Debtors in Possession for the Period from October 1, 2010 through October 31, 2010, filed November 24, 2010 [Docket No. 733]; and Monthly Application of Kirkland & Ellis LLP for Compensation for Services and Reimbursement of Expenses as Attorneys for the Debtors and Debtors in Possession for the Period from November 1, 2010 through November 30, 2010, filed December 30, 2010 [Docket No. 785].

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K&Es Monthly Applications.9 K&E will continue to work with the objecting parties to resolve their outstanding objections. K&E reserves its right to supplement this First Interim Fee

Application or otherwise reply, as necessary, to the Objections. 21. The Monthly Application for July 2010 included a voluntary waiver of fees in the

amount of $9,827.50. The Monthly Application for August 2010 included a voluntary waiver of fees in the amount of $38,223.50 and expenses in the amount of $8,375.97. The Monthly Application for September 2010 included a voluntary waiver of fees in the amount of $98,754.00 and expenses in the amount of $10,141.02. The Monthly Application for October 2010 included a voluntary waiver of fees in the amount of $2,345.50 and expenses in the amount of $1,404.69. The Monthly Application for November 2010 included a voluntary waiver of fees in the amount of $22,138.00 and expenses in the amount of $4,712.48. In total, K&E has voluntarily waived $171,288.50 in fees and $24,634.16 in expenses. 22. As of the date herein, K&E has received $3,895,379.87 from the Debtors for fees

and expenses incurred by K&E during the First Interim Fee Period. K&E has not yet received payment for: (a) $892,931.82, which represents the 20 percent holdback amount for the July through October Monthly Applications pursuant to paragraph 2(b) of the Interim Compensation Order; (b) $861,788.72, which represents the total fees and expenses requested in the November Monthly Application; (c) $853,016.18 for fees and expenses voluntarily deferred by K&E in the

See Docket Nos. 418, 451, 664, 728, and 775 (the Objections). K&E filed its Monthly Application for the month of November on December 30, 2010. Pursuant to the Interim Compensation Order, the objection deadline for the November Monthly Application is January 20, 2011. If a Notice Party files a timely objection to K&Es November Monthly Application after the date hereof, K&E reserves the right to file a supplement to this First Interim Fee Application.

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Monthly Applications; and (d) $180,891.86 for fees and expenses that were objected to in connection with K&Es August and September Monthly Applications. 23. For the convenience of the Court and all parties in interest, attached hereto as

Exhibit C is a schedule of the total amount of fees and expenses incurred under each internal K&E Subject Matter (as defined herein) during the First Interim Fee Period. 24. K&E is only seeking compensation for services rendered to the Debtors and their

estates in connection with the Chapter 11 Cases. The rates described herein are K&Es hourly rates for services of this type provided during the First Interim Fee Period. Based on these rates and the services performed by each individual, the total reasonable value of such services rendered during the First Interim Fee Period is $6,276,488.50. The K&E attorneys and

paraprofessionals expended a total of 11,369.70 hours working on the Chapter 11 Cases during the First Interim Fee Period, at a blended average hourly rate of $552.04 for attorneys and paraprofessionals. 25. K&E maintains computerized records of the time expended in the rendition of the

professional services required by the Debtors and their estates. These records are maintained in the ordinary course of K&Es practice. For the convenience of the Court and all parties in interest, attached hereto as Exhibit D is a summary for the First Interim Fee Period, setting forth the name of each attorney and paraprofessional for whose work on the Chapter 11 Cases compensation is sought, each attorneys year of bar admission and area of practice concentration, the aggregate time expended by each attorney and each paraprofessional during the First Interim Fee Period, the hourly billing rate for each attorney and each paraprofessional at K&Es current billing rates during the First Interim Fee Period, and an indication of the individual amounts

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requested as part of the total amount of compensation requested during the First Interim Fee Period. 26. K&E also maintains computerized records of all expenses incurred in connection

with the performance of professional services. A summary of the amounts and categories of expenses for which reimbursement is sought for the First Interim Fee Period is attached hereto as Exhibit E. 27. Copies of K&Es computerized records of fees and expenses in the format

specified by the Guidelines have been furnished to the Court, the U.S. Trustee, counsel to the Creditors Committee, and counsel to certain prepetition lenders are attached hereto as Exhibit F. 28. In accordance with the factors enumerated in section 330 of the Bankruptcy Code,

the amount of fees requested is fair and reasonable in light of: (a) the complexity of the Chapter 11 Cases; (b) the time expended by K&Es attorneys and paraprofessionals; (c) the nature and extent of the services rendered; (d) the value of such services; and (e) the costs of comparable services other than in a case under the Bankruptcy Code. Reasonable and Necessary Services Rendered by K&E Categorized by Subject Matter 29. The professional services that K&E rendered during the First Interim Fee Period

are grouped into the numbered and titled categories of the subject matters described in paragraphs 30 through 50 herein (each, a Subject Matter).

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30.

Chapter 11 Bankruptcy Filing Issues (Matter 2) (Fees: $39,761.00; Expenses: $1,060.52; Hours: 81.00) This Subject Matter includes filing the Chapter 11 Cases and preparing for the

first day hearing, including drafting notices, proposed orders, and preparation materials for the first day hearing. 31. Adversary Proceedings and Contested Matters (Matter 3) (Fees: $1,172,692.50; Expenses: $75,369.63; Hours: 2,079.80) This Subject Matter includes time spent by K&E attorneys and paraprofessionals addressing contested matters throughout the First Interim Fee Period. The Debtors Chapter 11 Cases are large and complex, with a number of sophisticated secured and other parties who are actively participating throughout the Chapter 11 Cases. These parties have pursued vigorously their parochial interests in motion practice and discovery from the outset of the Chapter 11 Cases. This Subject Matter includes, among other things, activity by K&E attorneys and

paraprofessionals supporting the Debtors in various disputes in the Chapter 11 Cases during the First Interim Fee Period, including the preparation of tens of thousands of documents sought by multiple parties in interest through formal and informal discovery, as well as preparing for, taking, defending, or participating in a number of depositions. Specifically, during the First Interim Fee Period, K&E spent considerable time: reviewing and responding to objections to first day and second day relief not categorized in other Subject Matters; negotiating and drafting a stipulated protective order [Docket No. 203], which has governed all of the discovery-related activities of all of the key constituencies throughout the Chapter 11 Cases; addressing the Examiner Motion [Docket No. 179] and the Equity Committee Motion [Docket No. 435], both of which included researching, drafting, and 14
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reviewing pleadings, preparing for multiple hearings, preparing relevant witnesses and developing facts, and successfully arguing against the relief requested; responding to the Creditors Committees motion to conduct Rule 2004 discovery [Docket No. 222] and attending hearings and negotiations related thereto, as well as reviewing, processing, and responding to discovery requests pursuant to that motion; seeking an extension of the Debtors exclusive periods under section 1121 of the Bankruptcy Code, which included drafting various pleadings related to the extension of the Debtors exclusive periods and in response to the Motions to Terminate Exclusivity, preparing for and taking depositions, and negotiating with numerous parties in interest regarding a consensual resolution thereof; and analyzing issues regarding the state court litigation between LNR and Midland over the servicing of the fixed rate mortgage loan. Automatic Stay Issues (Matter 4) (Fees: $55,565.00; Expenses: $1,817.45; Hours: 101.30) This Subject Matter comprises work that K&E attorneys and paraprofessionals performed during the First Interim Fee Period resulting from the imposition of the automatic stay. Work included researching issues related to the automatic stay, drafting suggestions of bankruptcy, negotiating resolutions to motions for relief from the automatic stay by certain litigation counterparties, and analyzing and negotiating an interim resolution to TriMont Real Estate Advisors, Inc.s motion for relief from the automatic stay [Docket No. 359]. 33. Business Operations (Matter 5) (Fees: $74,148.50; Expenses: $573.09; Hours: 113.90) This Subject Matter includes the time K&E attorneys and paraprofessionals spent on substantive and procedural issues related to the Debtors business operations during the First Interim Fee Period. In particular, K&E addressed issues related to the Debtors property

32.

management arrangements, intellectual property, and general business issues.

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34.

Case Administration (Matter 6) (Fees: $189,663.00; Expenses: $83,507.59; Hours: 507.20) This Subject Matter encompasses a number of activities undertaken by K&E

attorneys and paraprofessionals in the general administration of the Chapter 11 Cases during the First Interim Fee Period. To the extent possible, K&Es paraprofessionals attended to these general administrative matters. The Debtors filed numerous pleadings in the Chapter 11 Cases during the First Interim Fee Period. In connection with these filings, K&E typically prepared notices of motions, proposed orders, exhibits, and schedules, as applicable. Additionally, K&E coordinated the delivery of such pleadings to the Court and to the U.S. Trustee. K&E paraprofessionals spent a significant amount of time monitoring the dockets for the Chapter 11 Cases to track the filing of pleadings and to remain apprised of critical dates, including those related to such pleadings. For each pleading filed, K&E paraprofessionals ensured that the appropriate attorneys and personnel of the Debtors and the Debtors other advisors remained apprised of the filed documents and relevant objection and response deadlines, hearing dates, and other critical dates. The Debtors Chapter 11 Cases are especially complex, requiring coordination of detailed documents and analyses across K&E professionals, the Debtors, and the Debtors other advisors. K&E utilizes certain processes and practices to ensure the effective and efficient management of legal issues in the Chapter 11 Cases. 35. Cash Collateral (Matter 7) (Fees: $648,414.00; Expenses: $3,166.50; Hours: 1,081.60)

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Both prior to and after the filing of the Chapter 11 Cases, K&E attorneys advised the Debtors and assisted them with complex negotiations, analyses, and discussions related to the Debtors use of their secured lenders cash collateral to permit the orderly continuation of the operation of the Debtors business and their restructuring. The Debtors right to use cash collateral received objections on the evening of the Petition Date.10 K&E attorneys spent

considerable time negotiating and drafting both the interim and final cash collateral orders, which included the nature and scope of secured parties adequate protection. Negotiations for the use of cash collateral were particularly challenging in the Chapter 11 Cases, as the Debtors capital structure required resolving the concerns of a number of entities with different interests in the Debtors capital structure. K&E also assisted the Debtors in addressing complicated cash management issues and in defending their cash reporting system. In addition, this Subject Matter includes K&Es time spent objecting to a motion to reconsider the use of cash collateral [Docket No. 441]. Specifically, this Subject Matter included time spent: conferring with the Debtors and their other advisors with respect to the Debtors cash needs; reviewing and analyzing the Debtors credit agreements and other loan documents; researching, drafting, and reviewing pleadings related to the use of cash collateral during the First Interim Fee Period; analyzing and developing facts in response to objections of secured creditors; preparing for contesting hearings before the Court; and reviewing and assisting with the Debtors cash reporting obligations.

10

See Docket Nos. 36, 254, 255, 257, 265, and 279.

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36.

Claims Administration and Objections (Matter 8) (Fees: $95,978.00; Expenses: $663.61; Hours: 171.60) This Subject Matter includes time K&E attorneys and paraprofessionals spent on

matters related to claims administration and claims-related issues. Specifically, K&E spent time: (a) drafting the claims bar date motion and attending to related service and publication issues; (b) researching and analyzing claim treatment issues; and (c) negotiating, drafting, and filing stipulations resolving claim disputes. 37. Corporate and Securities Issues (Matter 9) (Fees: $667,072.00; Expenses: $35,858.23; Hours: 1,000.90) This Subject Matter comprises services that K&E attorneys and paraprofessionals performed on behalf of the Debtors during the First Interim Fee Period in connection with the Debtors corporate structure, ensuring the Debtors compliance with their corporate obligations, and addressing various corporate governance issues. During the First Interim Fee Period, K&E assisted the Debtors and certain of their advisors with the development and implementation of a protocol to solicit proposals for an enterprise-level plan of reorganization (that process is described at length in the Debtors motion to extend their exclusive periods and the associated reply [Docket Nos. 610 and 691]). The solicitation-of-interests phase of the plan process began in earnest in October 2010, when the Debtors, in consultation with K&E and their financial advisor, Moelis & Company LLC (Moelis), identified Five Mile and four other potential stalking horse candidates from a list of several dozen potential investors that included, among others, large private equity firms and real estate-focused investors. The Debtors provided

stalking horse candidates with access to diligence information and, ultimately, four of the five stalking horse candidates submitted stalking horse proposals during the First Interim Fee Period, 18
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each of which contemplated an enterprise-level restructuring. Subsequently, K&E advised the Debtors regarding their initial discussions with potential stalking horse bidders. Specifically, K&Es work included: advising the Debtors and the board of trustees of Innkeepers USA Trust with respect to the corporate and financial aspects of the Chapter 11 Cases, including obligations with regard to restructuring proposals; analyzing corporate organization and financing issues; drafting and negotiating agreements regarding the transmission and use of confidential information about the Debtors business; advising the Debtors regarding the design and implementation of a protocol for a process that is intended to result in the confirmation of a plan of reorganization; assisting the Debtors and Moelis in the development of a data room containing the Debtors corporate documents; assisting the Debtors and their other professional advisors regarding restructuring negotiations with outside parties; and drafting pleadings and negotiating with objectors regarding the compensation of Fried Frank and the independent trustees of Innkeepers USA Trust. Creditor and Interest Holder Communication (Matter 10) (Fees: $334,897.00; Expenses: $1,776.11; Hours: 550.50) This Subject Matter comprises K&Es efforts to keep the Debtors creditors and equity holders apprised of important information during the course of the Chapter 11 Cases. During the First Interim Fee Period, K&E attorneys and paraprofessionals: (a) reviewed and responding to general creditor inquiries; (b) drafted a confidentiality agreement with the Creditors Committee; and (c) responded to the Equity Committee Motion, which included the research and drafting of pleadings, preparing for evidentiary hearings, and preparing for, taking, and defending depositions regarding valuation issues. In addition, this Subject Matter captures

38.

19
K&E 18047816.13

time spent communicating with the Debtors various constituencies.11 These constituencies have a variety of concerns, many individualized, requiring a great deal of individual attention on the part of K&E attorneys. 39. DIP and Exit Financing Issues (Matter 11) (Fees: $721,265.50; Expenses: $46,415.97; Hours: 1,318.60) This Subject Matter includes time K&E attorneys and paraprofessionals spent on matters related to the two separate secured DIP Financings negotiated with Lehman and Five Mile Capital II Pooling International LLC (Five Mile). Both before and after the Petition Date, K&E attorneys negotiated and drafted commitment letters and term sheets for committed DIP financing and two separate credit agreements providing for the DIP Financings. K&E also prepared and negotiated materials in support of the DIP Financings, including security documents, account control agreements, and other collateral documentation. After filing the initial motions for approval to enter into the two DIP Financings [Docket Nos. 23 and 24], K&E attorneys spent considerable time assisting the Debtors in negotiating and drafting proposed final orders. Those orders involved the resolution of a host of challenging issues involving the Debtors capital structure and the requirements of the Debtors franchisors. Subsequently, certain parties filed objections to the motions to enter into the DIP Financings.12 K&E attorneys analyzed and prepared responses to objections and spent considerable time negotiating resolutions to others. K&Es work regarding the two DIP Financings involved substantial efforts

11

The constituencies include, but are not limited to, four special servicers (Midland, LNR Partners, Inc., C-III Asset Management LLC, and CWCapital Asset Management LLC), Lehman, the Creditors Committee, and an ad hoc committee of preferred shareholders. See Docket Nos. 265, 267, 269, 287, and 311.

12

20
K&E 18047816.13

on the part of attorneys and paraprofessionals in K&Es corporate group in drafting and revising key agreements and performing important collateral reviews required for closing these important credit agreements and releasing the funds required to begin the rehabilitation of the Debtors business. 40. Disclosure Statement and Plan of Reorganization (Matter 12) (Fees: $846,418.00; Expenses: $6,598.18; Hours: 1,615.10) This Subject Matter includes time spent by K&E attorneys and paraprofessionals working with the Debtors regarding the assumption of the PSA and the preparation of a plan of reorganization. During the First Interim Fee Period, K&E spent considerable time: researching and analyzing substantive disclosure statement and plan of reorganization issues; developing related solicitation and confirmation documentation to support the contemplated restructuring; formulating and drafting a plan of reorganization, as well as a disclosure statement, a disclosure statement order, and other pleadings related to thereto; reviewing, analyzing, and responding to objections to the Debtors motion to assume the PSA, including extensive fact discovery, depositions, and legal research; and preparing for hearings regarding the foregoing. Executory Contracts and Unexpired Leases (Matter 14) (Fees: $25,498.00; Expenses: $1,411.24; Hours: 44.20) This Subject Matter includes legal services rendered to examine issues related to the Debtors executory contracts and unexpired leases. Among other issues addressed during the First Interim Fee Period, K&E attorneys spent time drafting pleadings relating to the extension of

41.

21
K&E 18047816.13

the deadline by which the Debtors must assume or reject unexpired nonresidential real property leases under which certain Debtors are lessees. 42. Franchise Issues (Matter 15) (Fees: $464,388.00; Expenses: $1,283.51; Hours: 851.50) This Subject Matter includes time K&E attorneys and paraprofessionals spent on matters related to the Debtors franchise agreements and franchisors. As previously set forth herein, K&E attorneys and paraprofessionals spent considerable efforts responding to a motion to lift the automatic stay to de-identify the Troy Hotel, including preparation of pleadings, processing of discovery, and negotiating with Marriott, all of which led to a favorable resolution for the Debtors. In addition, K&E assisted the Debtors by preparing pleadings, addressing discovery, and negotiating with Marriott regarding the assumption of the Marriott Adequate Assurance Agreement, including the PIP schedule reflected therein. The Marriott Adequate Assurance Agreement is a critical element of the successful reorganization of the Debtors business because it provides for the terms under which the Debtors hotel properties will maintain their premium branding. Consequently, K&Es efforts in this Subject Matter were of particular importance to the Chapter 11 Cases. In addition to addressing issues with Marriott, K&E assisted the Debtors in responding to the motions of Best Western International, Inc. (Best Western) to shorten the time by which the Debtors must assume or reject the Best Western membership agreement [Docket No. 162, as amended by Docket No. 219] and for relief from the automatic stay [Docket No. 655]. By successfully pleading for the denial of the relief sought by Best Western, K&E allowed the Debtors to maintain operations at the hotel in question while they evaluated their

22
K&E 18047816.13

business operations and also avoided triggering an avalanche of similarly disruptive motions from other contract counterparties. 43. Hearings and Court Issues (Matter 16) (Fees: $203,404.50; Expenses: $12,972.84; Hours: 375.80) This Subject Matter includes time spent by K&E attorneys and paraprofessionals preparing for and attending various hearings in connection with the Chapter 11 Cases. As part of any large case, there are often multiple matters scheduled for each hearing that require the expertise of a number of K&E attorneys. K&E is cognizant of this fact and uses its best efforts to minimize the number of attorneys present at each hearing. During the First Interim Fee Period, K&E attorneys prepared for and attended a number of hearings, including those on: (a) July 20, 2010, pertaining to first day relief; (b) August 12, 2010, pertaining to second day relief; (c) August 30, 2010 and September 1, 2010, pertaining to the use of cash collateral, the approval of the two separate DIP Financings, and the assumption of the PSA; (d) September 30, 2010, pertaining to the appointment of an examiner, the appointment of an equity committee, and the assumption of the Marriott Adequate Assurance Agreement; and (e) November 10, 2010, pertaining to the extension of exclusivity, the compensation of Fried Frank and the independent trustees of Innkeepers USA Trust, and the extension of the deadline under section 365(d)(4) of the Bankruptcy Code. 44. Insurance Issues (Matter 17) (Fees: $51,545.00; Expenses: $355.58; Hours: 91.40) This Subject Matter includes legal services rendered to examine issues related to the Debtors insurance agreements. K&E attorneys spent time reviewing key insurance

23
K&E 18047816.13

documents and drafting pleadings seeking approval for the Debtors to enter into premium financing agreements. 45. Retention and Fee Application Issues (Matter 18) (Fees: $298,975.50; Expenses: $4,539.56; Hours: 679.30) This Subject Matter includes time spent by K&E attorneys and paraprofessionals: (a) preparing the K&E Monthly Applications to ensure compliance with the Bankruptcy Code, the Bankruptcy Rules, the Guidelines, and the Interim Compensation Order; (b) conducting searches of K&Es database for connections to parties in interest to comply with the K&E Retention Order, the Bankruptcy Code, the Bankruptcy Rules, and the Local Rules; (c) preparing K&E supplemental declarations; (d) responding to objections to certain retention applications filed on the first day of the Chapter 11 Cases; (e) assisting the Debtors with their use of ordinary course professionals pursuant to the Courts Order Authorizing the Debtors Retention and Compensation of Certain Professionals Utilized in the Ordinary Course of Business [Docket No. 187]; and (f) addressing issues related to the Debtors other retained professionals and advisors. 46. Schedules of Assets and Liabilities, Statements of Financial Affairs, and Monthly Operating Reports (Matter 19) (Fees: $87,429.50; Expenses: $1,434.50; Hours: 181.10) This Subject Matter includes time spent by K&E attorneys and paraprofessionals advising the Debtors and other advisors in connection with the preparation and filing of the Debtors schedules of assets and liabilities, statements of financial affairs, and monthly operating reports.

24
K&E 18047816.13

47.

Tax Issues (Matter 20) (Fees: $57,927.50; Expenses: $351.72; Hours: 89.60) This Subject Matter includes time spent by K&E attorneys and paraprofessionals

in connection with the Debtors tax issues during the First Interim Fee Period, including researching and analyzing tax issues and communicating with the Debtors regarding the foregoing. 48. Travel (Matter 21) (Fees: $93,226.00; Expenses: $127,146.41; Hours: 165.40) This Subject Matter includes time K&E attorneys and paraprofessionals spent traveling while representing the Debtors. K&E billed the Debtors for one-half of the total time that K&E spent for non-working travel. 49. U.S. Trustee Issues (Matter 22) (Fees: $105,256.00; Expenses: $75.43; Hours: 190.50) This Subject Matter includes the services that K&E attorneys and

paraprofessionals rendered in connection with the UST Guidelines and requirements in connection with the Chapter 11 Cases. Specifically, K&E spent time addressing the concerns of the U.S. Trustee and complying with the UST Guidelines, including with respect to the Debtors initial interview with the U.S. Trustee pursuant to section 341 of the Bankruptcy Code and communicating with the U.S. Trustee regarding the Equity Committee Motion. 50. Utility Issues (Matter 24) (Fees: $42,964.00; Expenses: $1,142.58; Hours: 79.40) This Subject Matter includes time spent by K&E addressing utilities issues in connection with the Chapter 11 Cases during the First Interim Fee Period. Specifically, time was 25
K&E 18047816.13

spent negotiating and drafting agreements with certain of the Debtors utility providers to address their requests for adequate assurance, as well as communicating with utility providers to avoid disruption to the Debtors business. Actual and Necessary Expenses Incurred by Kirkland & Ellis LLP 51. As set forth in Exhibit E attached hereto, K&E has incurred a total of

$407,520.25 in expenses on behalf of the Debtors during the Chapter 11 Cases. Each of these expenses does not exceed, and, in some instances, is well below, the maximum rate set forth in the Guidelines. These charges are intended to reimburse K&Es direct operating costs, which are not incorporated into the K&E hourly billing rates. K&E charges external copying and computer research at the providers cost without markup. Only clients who actually use services of the types set forth in Exhibit E of this First Interim Fee Application are separately charged for such services. The effect of including such expenses as part of the hourly billing rates would impose that cost upon clients who do not require extensive photocopying and other facilities and services. 52. The time constraints imposed by the circumstances of the Chapter 11 Cases

required K&E attorneys and other employees to devote substantial time during the evenings and on weekends to perform services on behalf of the Debtors. These services were essential to meet deadlines, to respond to daily inquiries from various creditors and other parties in interest on a timely basis, and to satisfy the demands of the Debtors business and ensure the orderly administration of their estates given the exigent circumstances of the Chapter 11 Cases. Consistent with K&Es firm policy and as further disclosed in the K&E retention application, attorneys and other K&E employees who worked late in the evenings or on weekends were 26
K&E 18047816.13

reimbursed for their reasonable meal and transportation costs. K&Es regular practice is not to include components for those charges in overhead when establishing billing rates, but rather to charge its clients for these and all other out-of-pocket disbursements incurred during the regular course of the rendition of legal services. The reimbursement amounts do not exceed those set forth in the Guidelines. 53. In addition, due to the location of the Debtors management, creditors, and other

parties in interest in relation to K&Es offices, frequent telephone conferences involving numerous parties were required. On many occasions, overnight delivery of documents and other materials was required as a result of the exigencies and circumstances of the Chapter 11 Cases. The disbursements for such services are not included in K&Es overhead for the purpose of setting billing rates, and K&E has made efforts to minimize its disbursements in the Chapter 11 Cases. The actual expenses incurred in providing professional services were

necessary, reasonable, and justified under the circumstances to serve the needs of the Debtors in the Chapter 11 Cases. 54. K&E scrutinizes its expenses to ensure that all expenses meet the requirements set

forth in the Guidelines. Among other things, K&E makes sure that all overtime meals, travel meals, hotel rates, and airfares are reasonable and appropriate expenses for which to seek reimbursement. As mentioned above, K&E voluntarily has reduced the expenses requested by $24,634.16. K&Es Requested Compensation and Reimbursement Should be Allowed 55. Section 331 of the Bankruptcy Code provides for interim compensation of

professionals and incorporates the substantive standards of section 330 to govern the Courts 27
K&E 18047816.13

award of such compensation. See 11 U.S.C. 331. Section 330 provides that a court may award a professional employed under section 327 of the Bankruptcy Code reasonable compensation for actual necessary services rendered . . . and reimbursement for actual, necessary expenses. 11 U.S.C. 330(a)(1). Section 330 also sets forth the criteria for the award of such

compensation and reimbursement: In determining the amount of reasonable compensation to be awarded, the court should consider the nature, extent, and the value of such services, taking into account all relevant factors, including (A) (B) (C) the time spent on such services; the rates charged for such services; whether the services were necessary to the administration of, or beneficial at the time at which the service was rendered toward the completion of, a case under this title; whether the services were performed within a reasonable amount of time commensurate with the complexity, importance, and nature of the problem, issue, or task addressed; and whether the compensation is reasonable based on the customary compensation charged by comparably skilled practitioners in cases other than cases under this title.

(D)

(E)

11 U.S.C. 330(a)(3). 56. In the Chapter 11 Cases, K&E respectfully submits that the services for which it

seeks compensation in this First Interim Fee Application were, at the time rendered, necessary for and beneficial to the Debtors and their estates and were rendered to protect and preserve the Debtors estates. K&E believes that the services rendered to the Debtors were performed economically, effectively, and efficiently and the results obtained benefited not only the Debtors, but also the Debtors estates and constituents. K&E further submits that the compensation

28
K&E 18047816.13

requested herein is reasonable in light of the nature, extent, and value of such services to the Debtors, their estates, and all parties in interest. 57. During the course of the First Interim Fee Period, K&Es hourly billing rates for

attorneys ranged from $385 to $995. The hourly rates and corresponding rate structure utilized by K&E in the Chapter 11 Cases are equivalent to the hourly rates and corresponding rate structure predominantly used by K&E for restructuring, workout, bankruptcy, insolvency, and comparable matters, and similar complex corporate, securities, and litigation matters, whether in court or otherwise, regardless of whether a fee application is required. These rates and the rate structure reflect that such matters are typically national in scope and involve great complexity, high stakes, and severe time pressuresall of which were present in the Chapter 11 Cases. 58. Moreover, K&Es hourly rates are set at a level designed to compensate K&E

fairly for the work of its attorneys and paraprofessionals and to cover certain fixed and routine overhead expenses. Hourly rates vary with the experience and seniority of the individuals assigned. These hourly rates are subject to periodic adjustments to reflect economic and other conditions and are consistent with the rates charged elsewhere. 59. The great majority of the services performed by partners and associates of K&E K&E enjoys a national and international

were rendered by K&Es Restructuring Group.

reputation for its expertise in financial reorganizations and restructurings of troubled companies, with more than 100 attorneys specializing in this area of law. The attorneys at K&E have represented debtors in many bankruptcy cases in this and other jurisdictions, including, among others: General Growth Properties, Inc.; Chemtura Corp.; Charter Communications, Inc.;

Masonite Corp.; Tronox, Inc.; Flying J, Inc.; Calpine Corp.; Visteon Corp.; and Solutia, Inc. As

29
K&E 18047816.13

a consequence, K&E brings a particularly high level of expertise to the Chapter 11 Cases, which inures to the benefit of the Debtors, their estates, and all parties in interest. 60. K&E respectfully submits that the professional services rendered by K&E on

behalf of the Debtors and their estates during the Chapter 11 Cases were necessary and appropriate given the complexity of the Chapter 11 Cases, the time expended by K&E, the nature and extent of K&Es services rendered, the value of K&Es services, and the cost of comparable services outside of bankruptcy, which are relevant factors set forth in section 330 of the Bankruptcy Code, and thus should be approved. Notice 1. K&E has provided notice of this Application to: (a) the entities on the Master

Service List (as such term is defined in the Notice, Case Management, and Administrative Procedures [Docket No. 68]), which is available at www.omnimgt.com/innkeepers, the website maintained by Omni Management Group, LLC, the Debtors notice and claims agent; and (b) counsel to the Lenders Seeking to Terminate Exclusivity. The Debtors respectfully submit that no further notice is necessary. No Prior Request 61. No prior request for the relief sought in this First Interim Fee Application has

been made to this or any other court.

30
K&E 18047816.13

Conclusion WHEREFORE, K&E respectfully requests entry of an order: (a) allowing and awarding compensation for professional services rendered during the First Interim Fee Period in the amount of $6,276,488.50 and reimbursement of all actual and necessary expenses incurred by K&E during the First Interim Fee Period in the amount of $407,520.25, without prejudice to K&Es right to seek additional compensation for services performed and expenses incurred during this First Interim Fee Period; and (b) granting K&E such other and further relief as just and proper. New York, New York Dated: January 14, 2011 /s/ Paul M. Basta James H.M. Sprayregen, P.C. Paul M. Basta KIRKLAND & ELLIS LLP 601 Lexington Avenue New York, New York 10022-4611 Telephone: (212) 446-4800 Facsimile: (212) 446-4900 and Anup Sathy, P.C. Marc J. Carmel (admitted pro hac vice) KIRKLAND & ELLIS LLP 300 North LaSalle Chicago, Illinois 60654-3406 Telephone: (312) 862-2000 Facsimile: (312) 862-2200 Counsel to the Debtors and Debtors in Possession

31
K&E 18047816.13

Exhibit A Certification

K&E 18047816.13

James H.M. Sprayregen, P.C. Paul M. Basta KIRKLAND & ELLIS LLP 601 Lexington Avenue New York, New York 10022-4611 Telephone: (212) 446-4800 Facsimile: (212) 446-4900 and Anup Sathy, P.C. Marc J. Carmel (admitted pro hac vice) KIRKLAND & ELLIS LLP 300 North LaSalle Chicago, Illinois 60654-3406 Telephone: (312) 862-2000 Facsimile: (312) 862-2200 Counsel to the Debtors and Debtors in Possession UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF NEW YORK In re: INNKEEPERS USA TRUST, et al.,1 Debtors. ) ) ) ) ) ) ) Chapter 11 Case No. 10-13800 (SCC) Jointly Administered

CERTIFICATION OF ANUP SATHY, P.C. FOR THE FIRST INTERIM APPLICATION OF KIRKLAND & ELLIS LLP FOR (A) COMPENSATION FOR PROFESSIONAL SERVICES RENDERED AND (B) REIMBURSEMENT OF ACTUAL AND NECESSARY EXPENSES INCURRED DURING THE PERIOD JULY 19, 2010 THROUGH NOVEMBER 30, 2010

The list of Debtors in these Chapter 11 Cases along with the last four digits of each Debtors federal tax identification number can be found by visiting the Debtors restructuring website at www.omnimgt.com/innkeepers or by contacting Omni Management Group, LLC at Innkeepers USA Trust c/o Omni Management Group, LLC, 16161 Ventura Boulevard, Suite C, PMB 606, Encino, California 91436. The location of the Debtors corporate headquarters and the service address for their affiliates is: c/o Innkeepers USA, 340 Royal Poinciana Way, Suite 306, Palm Beach, Florida 33480.

K&E 18047816.13

I, Anup Sathy, P.C., certify as follows: 1. I am a partner in the law firm of Kirkland & Ellis LLP (K&E). I submit this

certification with respect to the first interim application of Kirkland & Ellis LLP for (a) compensation for professional services rendered and (b) reimbursement of actual and necessary expenses incurred during the period July 19, 2010 through November 30, 2010 (the First Interim Fee Application).2 2. I make this certification in accordance with General Order M-389, Amended

Guidelines for Fees and Disbursements for Professionals in Southern District of New York Bankruptcy Cases, adopted by the United States Bankruptcy Court for the Southern District of New York on November 25, 2009 (the Local Guidelines). 3. In connection therewith, I hereby certify that: (a) (b) I have read the First Interim Fee Application; To the best of my knowledge, information, and belief formed after

reasonable inquiry, the fees and disbursements sought in the First Interim Fee Application fall within the Guidelines, except as specifically set forth herein; (c) Except to the extent that fees or disbursements are prohibited by the

Guidelines, the fees and disbursements sought in the First Interim Fee Application are billed at rates customarily employed by K&E and generally accepted by K&Es clients; (d) In providing a reimbursable expense, K&E does not make a profit on that

expense, whether the service is performed by K&E in-house or through a third party;

Capitalized terms used but not defined herein have the meanings set forth in the First Interim Fee Application.

2
K&E 18047816.13

(e)

In accordance with the Interim Compensation Order, K&E has served five

Monthly Applications covering the First Interim Fee Period on: (i) the Debtors; (ii) the U.S. Trustee; (iii) counsel to the Creditors Committee; (iv) counsel to Midland; and (v) counsel to Certain Prepetition Lenders; and (f) Pursuant to the Local Guidelines, the Debtors, the U.S. Trustee, and the

Creditors Committee will each be provided with a copy of the First Interim Fee Application simultaneously with the filing thereof and will have at least 14 days to review such First Interim Fee Application prior to any objection deadline with respect thereto. Dated: January 14, 2011 /s/ Anup Sathy Anup Sathy, P.C.

3
K&E 18047816.13

Exhibit B Retention Order

4
K&E 18047816.13

UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF NEW YORK In re: INNKEEPERS USA TRUST, et al.,1 Debtors. ) ) ) ) ) ) ) Chapter 11 Case No. 10-13800 (SCC) Jointly Administered

ORDER AUTHORIZING THE RETENTION AND EMPLOYMENT OF KIRKLAND & ELLIS LLP AS ATTORNEYS FOR THE DEBTORS AND DEBTORS IN POSSESSION NUNC PRO TUNC TO THE PETITION DATE1
1

The Debtors in these Chapter 11 Cases, along with the last four digits of each Debtors federal tax identification number, are: GP AC Sublessee LLC (5992); Grand Prix Addison (RI) LLC (3740); Grand Prix Addison (SS) LLC (3656); Grand Prix Albany LLC (3654); Grand Prix Altamonte LLC (3653); Grand Prix Anaheim Orange Lessee LLC (5925); Grand Prix Arlington LLC (3651); Grand Prix Atlanta (Peachtree Corners) LLC (3650); Grand Prix Atlanta LLC (3649); Grand Prix Atlantic City LLC (3648); Grand Prix Bellevue LLC (3645); Grand Prix Belmont LLC (3643); Grand Prix Binghamton LLC (3642); Grand Prix Bothell LLC (3641); Grand Prix Bulfinch LLC (3639); Grand Prix Campbell / San Jose LLC (3638); Grand Prix Cherry Hill LLC (3634); Grand Prix Chicago LLC (3633); Grand Prix Columbia LLC (3631); Grand Prix Denver LLC (3630); Grand Prix East Lansing LLC (3741); Grand Prix El Segundo LLC (3707); Grand Prix Englewood / Denver South LLC (3701); Grand Prix Fixed Lessee LLC (9979); Grand Prix Floating Lessee LLC (4290); Grand Prix Fremont LLC (3703); Grand Prix Ft. Lauderdale LLC (3705); Grand Prix Ft. Wayne LLC (3704); Grand Prix Gaithersburg LLC (3709); Grand Prix General Lessee LLC (9182); Grand Prix Germantown LLC (3711); Grand Prix Grand Rapids LLC (3713); Grand Prix Harrisburg LLC (3716); Grand Prix Holdings LLC (9317); Grand Prix Horsham LLC (3728); Grand Prix IHM, Inc. (7254); Grand Prix Indianapolis LLC (3719); Grand Prix Islandia LLC (3720); Grand Prix Las Colinas LLC (3722); Grand Prix Lexington LLC (3725); Grand Prix Livonia LLC (3730); Grand Prix Lombard LLC (3696); Grand Prix Louisville (RI) LLC (3700); Grand Prix Lynnwood LLC (3702); Grand Prix Mezz Borrower Fixed, LLC (0252); Grand Prix Mezz Borrower Floating, LLC (5924); Grand Prix Mezz Borrower Floating 2, LLC (9972); Grand Prix Mezz Borrower Term LLC (4285); Grand Prix Montvale LLC (3706); Grand Prix Morristown LLC (3738); Grand Prix Mountain View LLC (3737); Grand Prix Mt. Laurel LLC (3735); Grand Prix Naples LLC (3734); Grand Prix Ontario Lessee LLC (9976); Grand Prix Ontario LLC (3733); Grand Prix Portland LLC (3732); Grand Prix Richmond (Northwest) LLC (3731); Grand Prix Richmond LLC (3729); Grand Prix RIGG Lessee LLC (4960); Grand Prix RIMV Lessee LLC (4287); Grand Prix Rockville LLC (2496); Grand Prix Saddle River LLC (3726); Grand Prix San Jose LLC (3724); Grand Prix San Mateo LLC (3723); Grand Prix Schaumburg LLC (3721); Grand Prix Shelton LLC (3718); Grand Prix Sili I LLC (3714); Grand Prix Sili II LLC (3712); Grand Prix Term Lessee LLC (9180); Grand Prix Troy (Central) LLC (9061); Grand Prix Troy (SE) LLC (9062); Grand Prix Tukwila LLC (9063); Grand Prix West Palm Beach LLC (9065); Grand Prix Westchester LLC (3694); Grand Prix Willow Grove LLC (3697); Grand Prix Windsor LLC (3698); Grand Prix Woburn LLC (3699); Innkeepers Financial Corporation (0715); Innkeepers USA Limited Partnership (3956); Innkeepers USA Trust (3554); KPA HI Ontario LLC (6939); KPA HS Anaheim, LLC (0302); KPA Leaseco Holding Inc. (2887); KPA Leaseco, Inc. (7426); KPA RIGG, LLC (6706); KPA RIMV, LLC (6804); KPA San Antonio, LLC (1251); KPA Tysons Corner RI, LLC (1327); KPA Washington DC, LLC (1164); KPA/GP Ft. Walton LLC (3743); KPA/GP Louisville (HI) LLC (3744); KPA/GP Valencia LLC (9816). The location of the Debtors corporate headquarters and the service address for their affiliates is: c/o Innkeepers USA, 340 Royal Poinciana Way, Suite 306, Palm Beach, Florida 33480.

K&E 17448123

Upon the application (the Application)2 of the Debtors, as debtors and debtors in possession (collectively, the Debtors), for the entry of an order (this Order) authorizing the Debtors to retain and employ Kirkland & Ellis LLP (K&E) as their attorneys in connection with their Chapter 11 Cases nunc pro tunc to the Petition Date, all as more fully set forth in the Application; and upon the First Day Declaration; and upon the Declaration of Paul M. Basta, a partner at K&E, attached to the filed Application (the Initial Disclosure Declaration); and upon the Supplemental Declaration of Paul M. Basta in support of the Application [Docket No. 126] (the Supplemental Declaration, and together with the Initial Disclosure Declaration, the Basta Declarations); and the Court having found that the Court has jurisdiction over this matter pursuant to 28 U.S.C. 157 and 1334; and the Court having found that this is a core proceeding pursuant to 28 U.S.C. 157(b)(2); and the Court having found that venue of this proceeding and the Application in this district is proper pursuant to 28 U.S.C. 1408 and 1409; and the Court having found that the relief requested in the Application is in the best interests of the Debtors estates, their creditors, and other parties in interest; and the Debtors having provided appropriate notice of the Application and the opportunity for a hearing on the Application under the circumstances; and the Court having reviewed the Application and having heard the statements in support of the relief requested therein before the Court (the Hearing); and the Court having determined that the legal and factual bases set forth in the Application and at the Hearing establish just cause for the relief granted herein; and any objections to the requested relief having been resolved as set forth in this Order; and upon all of the proceedings had before the Court; and after due deliberation and sufficient cause appearing therefor, it is HEREBY ORDERED THAT:
2

All capitalized terms used but otherwise not defined herein shall have the meanings set forth in the Application.

K&E 17448123

1. 2.

The Application is granted to the extent provided herein. The Debtors are authorized to retain and employ K&E as their attorneys in

accordance with the terms and conditions set forth in the Application and in that certain engagement letter attached hereto as Schedule 1 (the Engagement Letter), as modified by the representations set forth in the Basta Declarations, effective nunc pro tunc to the Petition Date. 3. K&E is authorized to provide the Debtors with the professional services described

in the Application and the Engagement Letter. Specifically, but without limitation, K&E will render the following legal services: a. advise the Debtors with respect to their powers and duties as debtors in possession in the continued management and operation of the Debtors business and properties; advise the Debtors on the conduct of the Chapter 11 Cases, including all of the legal and administrative requirements of operating in chapter 11; attend meetings and negotiate with the representatives of creditors and other parties in interest; prosecute actions on the Debtors behalf, defend any action commenced against the Debtors and represent the Debtors interests in negotiations concerning litigation in which the Debtors are involved, including objections to claims filed against the Debtors estates; prepare pleadings in connection with the Chapter 11 Cases, including motions, applications, answers, orders, reports, and papers necessary, or otherwise beneficial to the administration of the Debtors estates; represent the Debtors in connection with obtaining postpetition financing; advise the Debtors in connection with any potential sale of assets; appear before the Court and any appellate courts to represent the interests of the Debtors estates before those courts; advise the Debtors regarding tax matters; assist the Debtors in obtaining approval of a disclosure statement and confirmation of a chapter 11 plan and all documents related thereto; and

b. c. d.

e.

f. g. h. i. j.

K&E 17448123

k.

perform all other necessary legal services for the Debtors in connection with the prosecution of the Chapter 11 Cases, including: (i) analyzing the Debtors leases and contracts and the assumptions, rejections or assignments thereof; (ii) analyzing the validity of liens against the Debtors; and (iii) advising the Debtors on corporate and litigation matters.

4.

K&E shall apply for compensation for professional services rendered and

reimbursement of expenses incurred in connection with the Debtors Chapter 11 Cases in compliance with the applicable provisions of the Bankruptcy Code, the Bankruptcy Rules, the Local Bankruptcy Rules, the guidelines established by the U.S. Trustee, and any other applicable procedures and orders of the Court. 5. Approval of the retention of K&E is pursuant to the representations made in

paragraphs 21, 22, and 23 of the Supplemental Declaration with respect to (a) compliance with provisions of this Courts order regarding interim compensation to professionals, (b) providing specific disclosure in the applicable monthly fee statement of any across-the-board billing rate increase, (c) not charging a markup to the Debtors with respect to fees billed by contract attorneys or non-attorneys who are hired by K&E to provide services to the Debtors (Contract Professionals), and (d) ensuring that any Contract Professionals are subject to conflict checks and disclosures in accordance with the requirements of the Bankruptcy Code. 6. This Order shall neither authorize the Debtors to use any cash collateral (as

defined in section 363(a) of the Bankruptcy Code) nor prejudice any entities rights with respect to any request by the Debtors to use cash collateral. Nothing in this Order shall affect in any way the Interim Order (A) Authorizing the Debtors to (i) Use the Adequate Protection Parties Cash Collateral and (ii) Provide Adequate Protection to the Adequate Protection Parties Pursuant to 11 U.S.C. 361, 362, and 363, and (B) Scheduling a Final Hearing Pursuant to Bankruptcy Rule 4001(b) [Docket No. 54] or any subsequent order entered granting the relief requested in the Debtors Motion for the Entry of Interim and Final Orders (A) Authorizing the Debtors to

K&E 17448123

(i) Use the Adequate Protection Parties' Cash Collateral and (ii) Provide Adequate Protection to the Adequate Protection Parties Pursuant to 11 U.S.C. 361, 362, and 363, (B) to the Extent Approved in the Final Order, Granting Senior Secured, Priming Liens on Certain Postpetition Intercompany Claims, (C) to the Extent Approved in the Final Order, Granting Administrative Priority Status to Certain Postpetition Intercompany Claims, and (D) Scheduling a Final Hearing Pursuant to Bankruptcy Rule 4001(b) [Docket No. 13]. Further, nothing in this Order shall affect in any way any special servicers right to object to the use of its cash collateral to fund all or part of the fees and expenses of professionals compensated from the Debtors bankruptcy estates in monthly, interim, or final fee requests nor rule on the appropriateness of such cash collateral use or any entities rights with respect thereto. 7. notice. 8. The terms and conditions of this Order shall be immediately effective and Notice of the Application as provided therein shall be deemed good and sufficient

enforceable upon its entry. 9. All time periods set forth in this Order shall be calculated in accordance with

Bankruptcy Rule 9006(a). 10. The Debtors are authorized to take all actions necessary to effectuate the relief

granted pursuant to this Order in accordance with the Application. 11. This Court retains jurisdiction with respect to all matters arising from or related to

the implementation of this Order. New York, New York Date: August 12, 2010 /s/Shelley C. Chapman United States Bankruptcy Judge

K&E 17448123

Schedule 1 K&E Engagement Letter

K&E 17448123

KIRKLAND &.. ELLIS LLP

AND AFFILIATED PARTNERSHIPS

300 North LaSalle Chicago, Illinois 60654 (312) 862-2000 www.kirkland.com Facsimile: (312) 862-2200

To Call Writer Directly: (312) 862-2046 anup.sathy@kirkland.com

March 29, 2010

PRIVILEGED & CONFIDENTIAL FOR ADDRESSEE'S EYES ONLY

Marc A. Beilinson Chief Restructuring Officer Innkeepers USA 340 Royal Poinciana Way Suite 306 Palm Beach, Florida 33480 Re: Dear Mr. Beilinson: We are very pleased that you have asked us to represent Innkeepers USA, and its subsidiaries (collectively, "you" or the "Company") in connection with a potential restructuring. Please note that the Firm's representation is only of the Company. The Firm does not and will not represent any shareholder, director, officer, partner, or joint venturer of the Company. General Terms. This retention letter (the "Agreement") sets forth the terms ofyour retention of Kirkland & Ellis LLP (and its affiliated entity Kirkland & Ellis International LLP (collectively, "K&E LLP")) to provide legal services and constitutes an agreement between us. The Agreement sets forth our entire agreement for rendering professional services for the current matter, as well as for all other existing or future matters (collectively, the "Engagement"), except where we otherwise agree in writing. Personnel. I, along with my partners, James H.M. Sprayregen, Paul Basta, Marc Carmel and Gary Axelrod, will be primarily responsible for this engagement. Other attorneys and legal assistants also will perform services during the course of this engagement. We will involve such other lawyers and legal assistants in K&E LLP to the extent that your needs make such involvement desirable and acceptable to you. Fees. The Firm will bill the Company for fees incurred at its regular hourly rates and in quarterly increments of an hour (or in smaller time increments otherwise required by a court). We reserve the right to adjust the Firm's billing rates from time to time in the ordinary course of the Firm's representation of the Company to the extent that such adjustment is part of a generally applicable increase in rates at the Firm. Retention to Provide Legal Services

Hong Kong
K&E 16525970.5

London

Los Angeles

Munich

New York

Palo Alto

San Francisco

Shanghai

Washington, D.C.

Although we will attempt to estimate fees to assist you in your planning if requested, such estimates are subject to change and are not binding unless otherwise expressly and unequivocally stated in writing.

Expenses. Expenses related to providing services shall be included in our statements as disbursements advanced by us on your behalf. Such expenses include photocopying, printing, scanning, witness fees, travel expenses, filing and recording fees, certain long distance telephone calls, certain secretarial overtime and other overtime expenses, postage, express mail and messenger charges, deposition costs, computerized legal research charges and other computer services, and miscellaneous other charges. Our clients pay directly (and are solely responsible for) certain larger costs, such as consultant or expert witness fees and expenses, and outside suppliers or contractors' charges. Attached hereto as Schedule I is K&E LLP's current schedule of charges, which is subject to change. Billing Statements. Our statements for fees and expenses are typically rendered monthly and, unless other arrangements are made, payment in full is due within thirty days of your receipt ofthe statement. If you have any question concerning any statement, we ask that you raise it within that thirty-day period. Retainer. The Company will provide to K&E LLP a "classic retainer," as defined in In reProduction Associates, Ltd., 264 B.R. 180, 184-85 (Bankr. N.D. Ill. 2001 ), and In re McDonald Bros. Construction, Inc., 114 B.R. 989, 997-99 (Bankr. N.D. Ill. 1990), in the amount ofUS $1,000,000. As such, the classic retainer was earned by K&E LLP upon receipt. The initial amount of the classic retainer was set to approximate our estimate of fees and expenses expected to be accrued and unpaid by the Company between payment cycles. K&E LLP' s estimate of expected fees and expenses may change based upon actual or expected fees and expenses incurred or expected to be incurred, as applicable. Further, the Company agrees to replenish the classic retainer upon receiving invoices from K&E LLP so that the classic retainer amount remains at or above K&E LLP's estimated fees and expenses expected to be accrued and unpaid by the Company between payment cycles.
The classic retainer will be placed into K&E LLP's general cash account, will not be held in a separate account on your behalf, and you will not receive any interest on these monies. You have no interest in the classic retainer. This amount does not constitute a security deposit.

Termination. Our retention may be terminated by either of us at any time by written notice by or to you. Such written notice may be (a) your notification to us of your termination of our representation, (b) our confirmation to you ofthe completion of our representation or (c) our notification to you of our withdrawal. We normally do not withdraw from a representation unless the client misrepresents or fails to disclose material facts, fails to pay fees or expenses, or makes it unethical or unreasonably difficult for us to continue to represent the client, or unless other just cause exists. If permission for withdrawal is required by a court, we shall apply promptly for such permission and termination shall coincide with the court order for withdrawal. Our representation also will end, regardless of whether or when written notice was sent by or to you, upon the constructive completion of our work. When constructive completion of our work shall have occurred will depend on the particular facts of our representation. If this Agreement or our services are terminated for any reason, such termination shall be effective only to
2

terminate our services prospectively and all the other terms ofthis Agreement shall survive any such termination. Upon cessation of our active involvement in a particular matter (even if we continue active involvement in other matters on your behalf), we will have no further duty to inform you of future developments or changes in law as may be relevant to such matter. Further, unless you and we mutually agree in writing to the contrary, we will have no obligation to monitor renewal or notice dates or similar deadlines that may arise from the matters for which we had been retained.

Cell Phone and E-Mail Communication. K&E LLP hereby informs you and you hereby acknowledge that K&E LLP's attorneys sometimes communicate with their clients and their clients' professionals and agents by cell telephone, that such communications are capable of being intercepted by others and therefore may be deemed no longer protected by the attorneyclient privilege, and that you must inform K&E LLP if you do not wish K&E LLP to discuss privileged matters on cell telephones with you or your professionals or agents.
K&E LLP hereby informs you and you hereby acknowledge that K&E LLP's attorneys sometimes communicate with their clients and their clients' professionals and agents by unencrypted e-mail, that such communications are capable ofbeing intercepted by others and therefore may be deemed no longer protected by the attorney-client privilege, and that you must inform K&E LLP if you wish to institute a system to encode all e-mail between K&E LLP and you or your professionals or agents.

File Retention. All records and files will be retained and disposed of in compliance with our policy in effect from time to time. Subject to future changes, it is our current policy generally not to retain records relating to a matter for more than five years. Upon your prior written request, we will return client records to you prior to their destruction. We recommend that you maintain your own files for reference or submit a written request for your client files promptly upon conclusion of a matter. Conflicts of Interest. As is customary for a law firm of our size, you currently have relationships with numerous business entities that K&E LLP has represented or currently represents in matters unrelated to you. For instance, we note that K&E LLP currently or has represented, among other parties, Hyatt Corporation, Lehman (as defined below), Starwood Capital Group, L.L.C., Starwood Hotels & Resorts Worldwide Inc., Apollo Management International LLP, and each oftheir affiliates (collectively, the "Interested Parties") and will continue to do so in unrelated matters. Because you are engaged in activities (and may in the future engage in additional activities) in which your interests may diverge from those of the Interested Parties or our other clients, the possibility exists that the Interested Parties or one of our clients may take positions adverse to you. Notwithstanding anything to the contrary above, please note that the provisions in the following paragraph also apply to Interested Parties.
We currently have clients and expect in the future will have additional clients who, from time to time, have asked or will ask us to represent them in matters involving or relating to Lehman Brothers, its affiliates, subsidiaries or related parties (collectively, "Lehman"), including Lehman and/or clients who may have claims (including litigation and arbitration matters) against 3

Lehman or wish to participate as bidders, buyers or investors with respect to certain assets, securities or businesses of or related to Lehman. In such case, we may in our judgment establish appropriate screening procedures to ensure that there is no disclosure of confidential information concerning Lehman between attorneys. Notwithstanding anything in this letter to the contrary, you agree to waive prospectively any actual or perceived conflict of interest or other objection that would preclude our current or future representation of another client(s) (including Lehman) with respect or related to Lehman. Such waiver will, for the avoidance of doubt, include engagements where another client has asked us to represent it in current matters related to those described in this engagement letter. Further, in undertaking our representation of the Company, we want to be fair not only to the Company's interests but also to those of our other clients. Because the Company is engaged in activities (and may in the future engage in additional activities) in which its interests may diverge from those of our other clients, the possibility exists that one of our current or future clients may take positions adverse to the Company (including litigation or other dispute resolution mechanisms) in a matter in which K&E LLP may be retained. In the event a present conflict of interest exists between the Company and our other clients or in the event one arises in the future, the Company agrees to waive any such conflict of interest or other objection that would preclude our representation of another client: (a) in other current or future matters not substantially related to the Firm's representation of the Company; (b) in corporate or restructuring matters related (including substantially related) to the Company provided such representation is not substantially related to the Company's restructuring; and (c) other than during a Restructuring Case(s) (defined below), in matters related (including substantially related) to the Company provided such representation is not substantially related to the Company's restructuring, including litigation or other dispute resolution mechanisms. The Company also agrees that our representation is solely of the Company and that no member or other entity or person related to it (such as directors, officers or employees) has the status of a client for conflict of interest purposes.

Restructuring Cases. If it becomes necessary for you to commence a restructuring case under chapter 11 ofthe U.S. Bankruptcy Code (a "Restructuring Case"), our ongoing employment by you will be subject to the approval of the court with jurisdiction over the petition. If necessary, K&E LLP will take steps necessary to prepare the disclosure materials required in connection with K&E LLP's retention as lead restructuring counsel. In the near term, K&E LLP will begin conflicts checks on a list of potentially interested parties provided by you.
If necessary, we will prepare a preliminary draft of a schedule describing K&E LLP's relationships with certain interested parties (the "Disclosure Schedule"). We will provide to you a draft of the Disclosure Schedule once it is available. Although K&E LLP believes that these relationships do not constitute actual conflicts of interest, these relationships must be described and disclosed in your application to the court to retain K&E LLP. If actual conflicts of interest arise in the Company's restructuring cases, the Company will be required to use separate conflicts counsel in those matters, and K&E LLP will not participate in those matters.

No Guarantee of Success. It is impossible to provide any promise or guarantee about the outcome of your matters. Nothing in this Agreement or any statement by our staff or attorneys constitutes a promise or guarantee. Any comments about the outcome of your matter are simply expressions of judgment and are not binding on us. Consent to Use of Information. In connection with future materials that, for marketing purposes, describe facets of our law practice and recite examples of matters we handle on behalf of clients, you agree that, if those materials avoid disclosing your confidences and secrets as defined by applicable ethical rules, they may identify you as a client, may contain factual synopses of your matters, and may indicate generally the results achieved. Reimbursement of Fees and Expenses. You agree promptly to reimburse us for all fees and expenses, including the amount of our attorney and paralegal time at normal billing rates, as incurred by us in connection with participating in, preparing for, or responding to any action, claim, suit or proceeding brought by or against any third-party that relates to the legal services provided by us under the Agreement; provided, however, that we agree that we will not be entitled to reimbursement for fees and expenses incurred by us in response to an actual lawsuit filed against K&E LLP for a conflict resulting from our representation of you. Without limiting the scope of the foregoing, and by way of example only, this paragraph extends to all such fees and expenses incurred by us in responding to document subpoenas, and preparing for and testifying at depositions and trials. LLP. Kirkland & Ellis LLP is a limited liability partnership organized under the laws of Illinois, and Kirkland & Ellis International LLP is a limited liability partnership organized under the laws of Delaware. Pursuant to those statutory provisions, an obligation incurred by a limited liability partnership, whether arising in tort, contract or otherwise, is solely the obligation of the limited liability partnership, and partners are not personally liable, directly or indirectly, by way of indemnification, contribution, assessment or otherwise, for such obligation solely by reason of being or so acting as a partner. Miscellaneous. This Agreement sets forth our entire agreement for rendering professional services. It can be amended or modified only in a writing signed by both parties and not orally or by course of conduct. Each party signing below is jointly and severally responsible for all obligations due us and represents that each has full authority to execute this Agreement so that it is binding. This Agreement may be signed in one or more counterparts and binds each party countersigning below, whether or not any other proposed signatory ever executes it. If any provision ofthis Agreement or the application thereof is held invalid or unenforceable, the invalidity or unenforceability shall not affect other provisions or applications of this Agreement which can be given effect without such provisions or application, and to this end the provisions ofthis Agreement are declared to be severable. We are not advising you with respect to this Agreement because we would have a conflict of interest in doing so. Ifyou wish to receive such advice, you should consult independent counsel of your choice.

Please confirm your agreement with the arrangements described in this letter by signing the enclosed copy of this letter in the space provided below and returning it to us.

a e: Anup Sathy e: Partner

Agreed to and accepted this ~day of

!VIc%

'2010.

INNKEEPERS USA

Schedule I KIRKLAND & ELLIS LLP CLIENT-REIMBURSABLE EXPENSES AND OTHER CHARGEs

Effective 111110
The following outlines Kirkland & Ellis LLP's ("K&E LLP") policies and standard charges for various services performed by K&E LLP and/or by other third parties on behalf of the client which are often ancillary to our legal services. Services provided by in-house K&E LLP personnel are for the convenience of our clients. Given that these services are often ancillary to our legal services, in certain instances, it may be appropriate and/or more cost efficient for these services to be outsourced to a third-party vendor. If services are provided beyond those outlined below, pricing will be based on the K&E LLP's approximate cost and/or comparable market pncmg. Duplicating, Reprographics and Printing: The following list details K&E LLP's charges for duplicating, reprographics and printing services: Black and White Copy or Print (all sizes of paper): $0.15 per impression for all U.S. offices 0.1 0 per impression in Munich 0.12 per impression in London HK$0. 75 per impression in Hong Kong RMBO. 75 per impression in Shanghai Color Copy or Print (all sizes of paper): $0.50 per impression Scanned Images: $0.15 per page for black and white or color scans Other Services: CD/DVD Duplicating or Mastering- $7/$10 per CD/DVD Binding - $0.70 per binding Large or specialized binders - $8/$1 7 Labels and Tabs- $0.03-$0.10 per item based on service Black and White or Color Transparency- $0.15 or $0.65 per page Secretarial and Word Processing: Clients are not charged for secretarial and word processing activities incurred on their matters during standard business hours. Overtime Charges: Secretarial and word processing overtime costs are not passed on to clients unless either (i) the client has specifically requested the afterhours work or (ii) the nature of the work being done for the client necessitates the overtime and such work could not have been done during normal working hours. Costs for related overtime meals and transportation are charged to the client under the same conditions and subject to any applicable regulations or guidelines.

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Travel Expenses: We charge clients our out-of-pocket costs for travel expenses including associated travel agency fees. We charge coach fares (business class for international flights) unless the client has approved first-class or an upgrade. K&E LLP personnel are instructed to incur only reasonable airfare, hotel and meal expenses. K&E LLP negotiates, uses, and passes along volume discount hotel and air rates whenever practicable. However, certain retrospective rebates may not be passed along. Communication Expenses: We do not charge clients for telephone calls or faxes made from K&E LLP's offices with the exception of third-party conference calls and videoconferences. Charges incurred for conference calls, videoconferences, cellular telephones, and calls made from other third-party locations will be charged to the client at the actual cost incurred. Further, other telecommunication expenses incurred at thirdparty locations (e.g., phone lines at trial sites, Internet access, etc.) will be charged to the client at the actual cost incurred.

Overnight Delivery/Postage: We charge clients for the actual cost of overnight and special delivery (e.g., Express Mai~ FedEx, and DHL), and U.S. postage for materials mailed on the client's behalf. K&E LLP negotiates, uses, and passes along volume discount rates whenever practicable. Messengers: We charge clients for the actual cost of a third party vendor messenger. Where a K&E LLP in-house messenger is used, we charge clients a standard transaction charge plus applicable cab fare. Computerized Research Services: Client charges are limited to K&E LLP's actual third-party costs and do not include any surcharges for related overhead. K&E LLP negotiates, uses, and passes along volume discount rates whenever practicable. As discounts are customarily based on overall volume, the amount of the discount may vary from month to month. Off-Site Legal Files Storage: Clients are not charged for off-site storage of files unless the storage charge is approved in advance.Electronic Data Storage: K&E LLP will not charge clients for costs to store electronic data and files related to cases on the K&E LLP's systems if the data stored does not exceed 250 gigabytes (GB). Ifthe data stored for a specific client exceeds 250GB, the K&E LLP will charge clients $1.25 per month/per GB until the data is either returned to the client or properly disposed of.Document Procurement: Our standard client charge for document retrieval when a K&E LLP library employee obtains a document from an outside source is $25 per document. There is no client charge for retrieving documents from K&E LLP libraries in other cities or from other collections when the document is part of the K&E LLP collection but unavailable.

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Calendar Court Services: Our standard charge is $25 for a court filing and other court services or transactions. Library and Business/Industry Research Services: Research specialists perform computerized research services at the request of attorneys, and clients are charged per hour for these services. Supplies: There is no client charge for standard office supplies. Clients are charged for special items (e.g., a minute book, exhibit tabs/indexes/dividers, binding, etc.) and then at K&E LLP's actual cost. Contract Attorneys and Contract Non-Attorney Billers: Ifthere is a need to utilize a contract attorney or contract non-attorney on a client engagement, clients will be charged a standard hourly rate for these billers unless other specific billing arrangements are agreed between K&E LLP and client. Expert Witnesses, Experts of Other Types, and Other Third Party Consultants: If there is a need to utilize an expert witness, expert of other type, or other third party consultant such as accountants, investment bankers, academicians, other attorneys, etc. on a client engagement, clients will be requested to retain or pay these individuals directly unless specific billing arrangements are agreed between the K&E LLP and client. Third Party Expenditures: Third party expenditures (e.g., corporate document and lien searches, lease of office space at Trial location, IT equipment renta~ SEC and regulatory filings, etc.) incurred on behalf of a client, will be passed through to the client at actual cost. If the invoice exceeds $50,000, it is K&E LLP's policy that wherever possible such charges will be directly billed to the client. In those circumstances where this is not possible, K&E LLP will seek reimbursement from our client prior to paying the vendor.

Unless otherwise noted, charges billed in foreign currencies are determined annually based on current U.S. charges at an appropriate exchange rate.

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Exhibit C Summary of Legal Fees and Expenses for the First Interim Fee Period
Matter Number 2 3 4 5 6 7 8 9 10 11 12 14 15 16 17 18 19 20 21 22 24 Totals Matter Description Chapter 11 Bankruptcy Filing Issues Adversary Proceedings and Contested Matter Automatic Stay Issues Business Operations Case Administration Cash Collateral Issues Claims Administration and Objections Corporate and Securities Issues Creditor and Interest Holder Communication DIP and Exit Financing Issues Disclosure Statement and Plan of Reorganization Executory Contracts and Unexpired Leases Franchise Issues Hearings and Court Issues Insurance Issues Retention and Fee Application Issues Schedule of Assets and Liabilities, Statement of Financial Affairs, and Monthly Operating Report Issues Tax Issues Travel U.S. Trustee Issues Utility Issues Total Billed Hours 81.00 2,079.80 101.30 113.90 507.20 1,081.60 171.60 1,000.90 550.50 1,318.60 1,615.10 44.20 851.50 375.80 91.40 679.30 181.10 89.60 165.40 190.50 79.40 11,369.70 Total Fees Requested $39,761.00 $1,172,692.50 $55,565.00 $74,148.50 $189,663.00 $648,414.00 $95,978.00 $667,072.00 $334,897.00 $721,265.50 $846,418.00 $25,498.00 $464,388.00 $203,404.50 $51,545.00 $298,975.50 $87,429.50 $57,927.50 $93,226.00 $105,256.00 $42,964.00 $6,276,488.50 Total Expenses Requested $1,060.52 $75,369.63 $1,817.45 $573.09 $83,507.59 $3,166.50 $663.61 $35,858.23 $1,776.11 $46,415.97 $6,598.18 $1,411.24 $1,283.51 $12,972.84 $355.58 $4,539.56 $1,434.50 $351.72 $127,146.41 $75.43 $1,142.58 $407,520.25 Total Compensation $40,821.52 $1,248,062.13 $57,382.45 $74,721.59 $273,170.59 $651,580.50 $96,641.61 $702,930.23 $336,673.11 $767,681.47 $853,016.18 $26,909.24 $465,671.51 $216,377.34 $51,900.58 $303,515.06 $88,864.00 $58,279.22 $220,372.41 $105,331.43 $44,106.58 $6,684,008.75

K&E 18047816.13

Exhibit D Summary of Total Hours and Total Fees for Attorneys and Paraprofessionals for the First Interim Fee Period
Attorney Gary E. Axelrod, P.C. Robert C. Baca Paul Basta Raymond Bogenrief Patrick M. Bryan Marc J. Carmel Tobias D. Chun Richard M. Cieri Keith S. Crow, P.C. Jennifer L. Curfman Thad Davis Daniel T. Donovan Melissa Gauger Thomas A. Geraghty, P.C. Bradley T. Giordano Adam Goldstein Jeffrey M. Gould Anthony Grossi William Guerrieri Savaria B. Harris Sarah M. Hawkins Brendan P. Herron Vicki V. Hood Meredith L. Hussein Andrew M. Kaufman, P.C. Jonathan Kidwell Patrick J. King Leonard Klingbaum Arun Kurichety Jeffrey G. Landis Christopher H. Langbein Brian S. Lennon Jennifer Marines Todd F. Maynes, P.C. Joshua R. McLane Wendy T. Newkirk Ahmad S. Nofal Jeffrey Pawlitz Theodore A. Peto Carl Pickerill Position with the Applicant and Year Admitted Partner 1997 Associate 2009 Partner 1992 Associate 2007 Partner 2002 Partner 2000 Partner 1996 Partner 1981 Partner 1986 Associate 2009 Associate 2005 Partner 1997 Associate Pending Partner Associate Associate Associate Associate Associate Associate Associate Associate Partner Associate Partner Associate Associate Partner Associate Partner Associate Partner Associate Partner Associate Associate Associate Associate Partner Associate 1997 2009 2006 2006 2010 2008 2007 2008 2009 1977 2006 1974 2009 2007 2000 2006 2003 2009 2004 2005 1988 2009 1999 2010 2007 2002 2008 Department Real Estate Corporate Restructuring Corporate Litigation Restructuring Environmental Restructuring Corporate Real Estate Taxation Litigation Restructuring Taxation Restructuring Restructuring Litigation Restructuring Restructuring Litigation Litigation Corporate Employee Benefits Restructuring Corporate Environmental Litigation Corporate Restructuring Litigation Restructuring Restructuring Restructuring Taxation Taxation Real Estate Real Estate Restructuring Corporate Restructuring Hourly Billing Rate $725.00 $505.00 $955.00 $495.00 $600.00 $735.00 $640.00 $995.00 $915.00 $405.00 $620.00 $695.00 $385.00 $795.00 $445.00 $600.00 $545.00 $445.00 $505.00 $545.00 $455.00 $405.00 $920.00 $550.00 $935.00 $455.00 $495.00 $725.00 $600.00 $580.00 $505.00 $660.00 $640.00 $995.00 $415.00 $570.00 $340.00 $550.00 $610.00 $505.00 Total Billed Hours 13.00 56.20 321.90 12.50 194.70 788.80 5.00 0.50 33.10 10.50 2.50 331.00 7.80 47.70 2.20 215.70 334.40 36.70 691.70 3.50 0.40 2.80 0.80 40.40 2.00 7.10 458.00 210.10 39.60 61.90 611.60 27.30 571.40 0.50 43.20 16.10 3.50 234.10 5.50 41.50 Total Compensation $9,425.00 $28,381.00 $307,414.50 $6,187.50 $116,820.00 $579,768.00 $3,200.00 $497.50 $30,286.50 $4,252.50 $1,550.00 $230,045.00 $3,003.00 $37,921.50 $979.00 $129,420.00 $182,248.00 $16,331.50 $349,308.50 $1,907.50 $182.00 $1,134.00 $736.00 $22,220.00 $1,870.00 $3,230.50 $226,710.00 $152,322.50 $23,760.00 $35,902.00 $308,858.00 $18,018.00 $365,696.00 $497.50 $17,928.00 $9,177.00 $1,190.00 $128,755.00 $3,355.00 $20,957.50

K&E 18047816.13

Attorney Jeffrey S. Powell Joseph W. Price William T. Pruitt Anup Sathy, P.C. Robert H. Scheibe Jessica H. Schultz Todd M. Schwartz David Seligman, P.C. John V. Shivickas Janet S. Siegel Ellen M. Snare James H.M. Sprayregen, P.C. Peter Tsao Wilson Tsu Rafael J. Valdes Brad Weiland Ipek S. Yakut Clement Yee Jonathan Zinman Robert R. Zitko David Zubkis Totals for Attorneys

Position with the Applicant and Year Admitted Partner 1986 Partner 2002 Partner 2004 Partner 1995 Of Counsel 1971 Associate 2009 Associate 2007 Partner 1996 Associate 2006 Of Counsel 1987 Partner 2004 Partner Associate Associate Associate Associate Associate Associate Associate Partner Associate 1985 2009 2008 2007 2008 2010 2009 2008 1994 2009

Department Litigation Corporate Litigation Restructuring Corporate Real Estate Restructuring Restructuring Real Estate Restructuring Corporate Restructuring Restructuring Restructuring Restructuring Restructuring Corporate Restructuring Restructuring Employee Benefits Restructuring

Hourly Billing Rate $845.00 $660.00 $580.00 $895.00 $995.00 $405.00 $550.00 $885.00 $545.00 $545.00 $660.00 $995.00 $505.00 $505.00 $550.00 $505.00 $445.00 $505.00 $550.00 $760.00 $505.00

Total Billed Hours 69.00 237.70 3.30 568.80 14.60 3.20 802.30 1.00 59.20 42.20 30.30 149.30 182.70 10.60 163.20 170.50 237.90 423.00 740.80 2.80 4.50 9,404.10

Total Compensation $58,305.00 $156,882.00 $1,914.00 $509,076.00 $14,527.00 $1,296.00 $441,265.00 $885.00 $32,264.00 $22,999.00 $19,998.00 $148,553.50 $92,263.50 $5,353.00 $89,760.00 $86,102.50 $105,865.50 $213,615.00 $407,440.00 $2,128.00 $2,272.50 $5,794,210.00

Paraprofessional April B. Abrams Deborah L. Bibbs Shaun Booth Andrew Brniak Cara C. Cullin Anna O. del Rosario Eric M. Dellon Mahmood Dualeh Paul Fraumann Beth Friedman Stephanie D. Frye Jacob Goldfinger Terence Herlihy Benjamin J. Jones

Position with the Applicant Legal Assistant Legal Assistant Case Assistant Case Assistant Conflicts Specialist Legal Assistant Case Assistant Litigation Support Consultant Legal Assistant Legal Assistant Conflicts Coordinator Legal Assistant Litigation Support Consultant Legal Assistant

Department Real Estate Restructuring Restructuring Restructuring Administrative Services Restructuring Intellectual Property Litigation Restructuring Restructuring Administrative Services Restructuring Litigation Litigation

Hourly Billing Rate $285.00 $215.00 $180.00 $155.00 $235.00 $245.00 $180.00 $235.00 $215.00 $285.00 $215.00 $270.00 $235.00 $200.00

Total Billed Hours 10.00 65.70 53.00 19.40 8.90 0.60 2.10 9.00 27.50 77.60 34.30 93.30 1.00 143.00

Total Compensation $2,850.00 $14,125.50 $9,540.00 $3,007.00 $2,091.50 $147.00 $378.00 $2,115.00 $5,912.50 $22,116.00 $7,374.50 $25,191.00 $235.00 $28,600.00

K&E 18047816.13

Paraprofessional Ellen J. Kratofil Jocelyn C. Kuo Travis J. Langenkamp Anne R. Lubinsky Thomas Mangne Maureen McCarthy Mathias M. Mondino Robert E. Moore Caitlin OConnell Emily S. OConnor Robert Orren Muhammad A. Rashid Michael Robinson Anne Rogers Henry Rosas Linda A. Scussel Sofia Sheth Carrie Sroka Rafael M. Suarez Elizabeth A. Suehr Patrick Tucker Gary M. Vogt Rebecca E. Weinstein Nathaniel F. West Library Research

Position with the Applicant Conflicts Specialist Legal Assistant Legal Assistant Litigation Support Specialist Litigation Support Consultant Legal Assistant Case Assistant Litigation Support Consultant Case Assistant Project Assistant Legal Assistant Litigation Support Specialist Case Assistant Conflicts Specialist Legal Assistant Conflicts Specialist Case Assistant Legal Assistant Litigation Support Consultant Conflicts Specialist Legal Assistant Legal Assistant Case Assistant Case Assistant Research Specialist

Department Administrative Services Restructuring Litigation Litigation Litigation Restructuring Litigation Litigation Intellectual Property Restructuring Restructuring Litigation Restructuring Administrative Services Corporate Administrative Services Restructuring Restructuring Litigation Administrative Services Corporate Litigation Litigation Litigation Administrative Services

Hourly Billing Rate $235.00 $245.00 $270.00 $195.00 $235.00 $245.00 $155.00 $235.00 $170.00 $160.00 $190.00 $215.00 $195.00 $180.00 $235.00 $285.00 $235.00 $180.00 $215.00 $235.00 $215.00 $215.00 $280.00 $155.00 $155.00 $220.00

Total Billed Hours 41.90 29.60 139.40 3.00 1.80 28.40 8.80 1.50 2.00 16.10 17.70 2.50 117.20 16.90 44.50 89.50 52.00 50.10 0.20 27.00 2.00 75.00 636.80 8.30 0.50 7.50 1,965.60

Total Compensation $9,846.50 $7,252.00 $37,638.00 $585.00 $423.00 $6,958.00 $1,364.00 $352.50 $340.00 $2,576.00 $3,900.50 $22,854.00 $3,042.00 $10,457.50 $25,507.50 $12,220.00 $9,018.00 $43.00 $6,345.00 $430.00 $16,125.00 $178,304.00 $1,286.50 $77.50 $1,650.00 $482,278.50

Totals for Paraprofessionals

Total Hours Billed During the Final Fee Period Total Fees Requested During the Final Fee Period Blended Rate (Including Paraprofessionals) Blended Rate (Excluding Paraprofessionals)

11,369.70 $6,276,488.50 $616.14 $552.04

K&E 18047816.13

Exhibit E Summary of Disbursements for the First Interim Fee Period Expense Categories Computer Database Research Copying and Binding Filing Fees Meals Postage, Overnight Delivery, and Messenger Service Professional Fees Secretarial Overtime Telephone Travel, Airfare, and Other Transportation Trial, Office, and Rental Expenses Total Amount $119,685.16 $95,529.78 $369.60 $15,393.32 $4,686.01 $9,206.95 $11,076.64 $3,479.40 $122,503.64 $25,589.75 $407,520.25

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K&E 18047816.13