UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF NEW YORK In re: INNKEEPERS USA TRUST, et al., Debtors.

MIDLAND LOAN SERVICES Movants, -againstTHE OBJECTORS 1 Respondents. ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) Chapter 11 Case No. Case No. 10 13800 (SCC) (Jointly Administered)

CONSOLIDATED OPPOSITION OF THE OBJECTORS TO THE MOTION OF MIDLAND LOAN SERVICES FOR A PROTECTIVE ORDER AND THE OBJECTIONS OF LEHMAN ALI INC.

Wells Fargo Bank, N.A., as Trustee for the Registered Holders of Credit Suisse First Boston Mortgage Securities Corp. Commercial Pass-Through Certificates, Series 2007-C1 and U.S. Bank National Association, as Successor to LaSalle Bank N.A., formerly known as LaSalle National Bank, as Trustee for the Registered Holders of ML-CFC Commercial Mortgage Trust 2006-4, Commercial Mortgage Pass-Through Certificates, Series 2006-4 (Trusts) and LNR Securities Holdings, LLC (LNR Securities), TriMont Real Estate Advisors, Inc., as Special Servicer tor the Benefit of SASCO 2008-C2, LLC (TriMont), The Ad Hoc Committee of Preferred Shareholders (The Ad Hoc Committee), and Appaloosa Investments L.P. I, Palomino Fund Ltd., Thoroughbred Fund L.P., and Thoroughbred Master Ltd. (together, Appaloosa or The Appaloosa Funds) (collectively, the Objectors).

The Objectors, all parties in interest, by and through their respective counsel, respectfully submit this consolidated Opposition to the Motion of Midland Loan Services for Protective Order, dated February 4, 2011 (Midland Motion) and the Responses and Objections of Lehman ALI Inc. to the First Set of Requests by the Objectors (Lehman Objections). PRELIMINARY STATEMENT On January 14, 2011, the Debtors submitted the Motion for 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 Productions, (V) Authorizing an Expense Reimbursement to Bidder D, and (VI) Modifying Cash Collateral Order to Increase Expense Reserve (the Stalking Horse Motion) [Docket No. 820] 2 for the Courts approval. The Stalking Horse Motion reveals, inter alia, that (i) Midland Loan Services (Midland) and Lehman ALI Inc. (Lehman) are parties to the Commitment Letter that forms the core of the Stalking Horse Bid (Stalking Horse Motion Exh. A, Exh. 1), (ii) Midland is a party to a separate agreement with the Debtors to provide so-called stapled financing (id., Exh. C) as well as a party to yet another agreement with Five Mile related to and supporting the Stalking Horse Bid (id., Exh. G), (iii) Midland has agreed to release Apollo Investment Corporation (Apollo) from the Apollo Guaranty benefitting the Fixed Rate Mortgage Pool in order to, inter alia, enhance[] recoveries for holders of the Series C Preferred Shares (id. 57), (iv) Midland will receive millions of

Capitalized terms not otherwise defined herein shall have the meaning ascribed to them in the Stalking Horse Motion.

dollars for its participation in, and support of, these and related transactions (id.), (v) Lehman will receive 50% of the New Equity and a distribution of cash under the Stalking Horse Bid (id., Exh. A, Exh. 1 Term Sheet at 2), and (vi) if Lehman is not the successful bidder for the Debtors, it will receive at least $200.3 million in cash to pay Lehmans claims against the Debtors (plus any applicable Overbid Allocation). (Id., Exh. A, Exh. 1 Term Sheet at 2-3.) Despite the central and active role it has chosen in the transactions underlying the Stalking Horse Motion, Midland now insists that no one not the Objectors, not the Debtors, not the Trustee, and not the Court should be able to examine [its] decisions and internal approval processes, or the communications and negotiations between and among Midland, Lehman and Five Mile, either during discovery or during the hearing that will commence on March 8, 2011 (the Hearing). (Midland Motion 2, 21.) Lehman, in its Objections, likewise has asserted that no one may ask it during discovery or the Hearing about any internal Lehman discussions or analysis. (See, e.g., Lehman ALI Inc.s Responses And Objections at 23, attached hereto as Exh. A.) The evidence being sought and denied by Midland and Lehman all communications between and among them and internal deliberations is critical evidence to show that the deal at issue was conceived, demanded, accepted, and implemented to serve many divergent and selfserving interests, but not the best interests of any of the Debtors estates. In seeking the Courts blessing in the Stalking Horse Motion, the Debtors repeatedly rely upon Midlands and Lehmans conduct, analyses, and decision-making processes as to the value of the transactions, the manner in which that value will be allocated across distinct asset classes, and the highly restrictive Bid Procedures that will lock in the Stalking Horse Bid and preordain a Plan that has yet to be filed. The Debtors support their decision to accept the Five Mile/Lehman Bid by observing, among other things, that Midland which represents

$825.4 million of debt held by the Fixed Rate Mortgage Pool is on board and supports the transactions and accompanying valuations, allocations, and exchanges of consideration. (Stalking Horse Motion at 5.) Likewise, the Debtors have stated that they agreed to an at least $200.3 million cash payment to pay Lehmans claims against the Debtors (plus any applicable Overbid Allocation) because, among other reasons, Five Mile/Lehman and Midland refused to go forward without inclusion of this provision. (Id. at 13.) The Debtors also have explained that Midlands agreement to release Apollo from the guaranty it provided in favor of the Fixed Rate Mortgage Pool enhances recoveries for holders of the Series C Preferred Shares. (Id. at 8.) Simply put, Midland, along with Lehman and Five Mile (together, the Stalking Horse Participants), are inextricably intertwined with the negotiation, consideration and justification for the Stalking Horse Motion, and there is no cause, let alone the good cause required for a protective order, to shield them from highly relevant discovery. Not surprisingly, Midland fails to cite any authority for the proposition that the Court need not and should not consider the negotiations and analysis that led to the transactions, agreements, and procedures at issue. There is none. Midlands stance here is also diametrically opposed to the position it took before this Court in connection with the PSA Motion. As the Court will recall from the PSA Motion, Midland actively sought, and obtained, the very kind of discovery (from Apollo and Lehman) that it now seeks to avoid. In a motion for expedited discovery, Midland asserted that the Debtors, Apollo and Lehman cannot claim surprise here in response to the request for expedited discovery. They worked together to put all of the issues to be litigated . . . squarely before the Court. . . . They should not be heard to complain about full discovery today. (Supplement to

Motion of Midland Loan Services, Inc., Special Servicer for the Fixed Rate Trustee, for an order Pursuant to Fed. R. Bankr. P. 7034 and 9006, Modifying Certain Discovery Response Deadlines for the Debtors and Establishing a Deposition Schedule for the Debtors, Lehman ALI, Inc. and Apollo Investment Corporation in Connection with the September 1, 2010 Hearings (Suppl. Midland Discovery Motion) [Docket No. 99] 9.) Nor should Midland and Lehman now. Finally, Midland suggests in a mere footnote that, if the documents at issue are relevant (and they are), then they may be protected by a common interest privilege. (Midland Motion at 4, n.5.) According to Midland, the negotiations and discussions it had with the other Stalking Horse Participants (Lehman and Five Mile) may not be discovered or considered by the Objectors or the Court because they are protected by a common interest. A common interest does not itself shield evidence from discovery; instead, if there is a true common interest with a third party, disclosure to that third party might not, under certain circumstances, constitute a waiver of an already privileged communication. Midland has made no such showing here and the Court should reject this further, unsupported effort to avoid discovery. Providing the discovery requested by the Objectors will not prejudice these cases, or Midland and Lehman, in any way. Midland has not demonstrated the good cause required for a protective order and therefore the Court should deny its motion. 3

In the event that the Court denies Midlands Motion for Protective Order, and the Objectors respectfully request that the Motion be denied promptly, Lehman should immediately withdraw its Objections without the need for a formal motion to compel. In its Responses and Objections, Five Mile has stated that its analysis of the proposed treatment of the claims are irrelevant to the issues raised by the Debtors Motion and are not likely to lead to the discovery of admissible evidence. (E.g., Five Mile Capital II Pooling REIT LLCs Responses And Objections, Response to Request No. 3, attached hereto as Exh. B.) However, Five Mile has stated that it will produce responsive documents, albeit without waiver of its relevancy and other objections. (Id.) Apollo has not refused to produce internal and negotiation documents. (Responses And Objections Of Apollo Investment Corporation, attached hereto as Exh. C.)

I.

FACTUAL BACKGROUND A. Discovery Sought and Taken By Midland on the PSA Motion

Despite its efforts to avoid discovery of its decisions and negotiations with respect to the Stalking Horse Motion, Midland aggressively sought to obtain the same discovery to support its objections to the PSA Motion. Among other things, Midland filed a Motion and a Supplemental Motion for orders requiring discovery of Apollo and Lehman, seeking deposition testimony regarding, inter alia, any valuation by the Debtors or Lehman of Midlands collateral with respect to the PSA, any plan of reorganization, or otherwise as well as any agreement, understanding or promise between Apollo, Lehman, and/or the Debtors, including all actions or inactions by Lehman or the Debtors with respect thereto. (Suppl. Midland Discovery Motion Exh. C 1-2.) In an about face to its current position, Midland, just a few months ago, told the Court that the Debtors, Apollo and Lehman cannot claim surprise here in response to the request for expedited discovery. They worked together to put all of the issues to be litigated . . . squarely before the Court. . . . They should not be heard to complain about full discovery today. (Id. 9.) Midland relied on evidence adduced from the discovery of Lehman and Apollo in its objection to the PSA Motion. Indeed, Midland found relevant and cited to the Court evidence relating to internal Lehman and Apollo discussions and analyses. (See Objection of Midland Loan Services, Inc. to Debtors Motion for an Order (A) Authorizing the Debtors to Assume the Plan Support Agreement and (B) Granting Related Relief (Midland PSA Objections) [Docket No. 255] at 2-4 (citing document produced by Apollo as well as Apollo deposition testimony reflecting that Lehman was only intending to sell the equity to Apollo); id. at 4 (citing email between Lehman and Apollo).) Critically, the Court relied upon evidence

concerning the negotiations in denying the PSA Motion. See, e.g., In re Innkeepers USA Trust, B.R. , 2010 WL 5300870, at *2 (Bankr. S.D.N.Y. Dec. 20, 2010). B. The Stalking Horse Motion

The Stalking Horse Motion seeks to establish a process that will require, and Five Mile/Lehmans commitments and Midlands support are conditioned upon, confirmation of a plan of reorganization that encompasses the provisions of the Five Mile/Lehman Bid, subject to the overbid procedures and the Overbid Allocation (the Required Plan). (Stalking Horse Motion 51.) Among other things, the restructuring contemplated in the Stalking Horse Motion is conditioned on the following restructuring terms being in the Required Plan that must be confirmed by this Court pursuant to 1129 of the Bankruptcy Code: Sale of all of the New Equity in an enterprise-level transaction valuing the Debtors portfolio of at least $1.14 billion. Write-down of the Fixed Rate Mortgage Loan from $825.4 million to $622.5 million (subject to the Overbid Allocation), with critical, adverse revisions to note terms. Payment in full of certain of the Debtors secured debt, write-down and/or the extension of maturity on certain other secured debt, and restructuring of certain mezzanine debt on terms to be determined by Five Mile, Lehman and the Debtors. $2.5 million in cash to be provided to classes of unsecured creditors, contingent upon their support of the Five Mile/Lehman Plan. Provision of 2% Co-Investment Right and $5.9 million in cash to the holders of Series C Preferred Shares, contingent upon their support of the Five Mile/Lehman Plan. Broad Debtor and non-Debtor releases of the Debtors directors and officers and Apollo, and a release by Midland of all of its claims against Apollo related to the Apollo Guaranty, in exchange for $3 million in cash to be paid by the reorganized debtor in connection with the Five Mile/Lehman Plan. Cash payment of $2.5 million to Midland in consideration for effecting the restructuring of the Fixed Rate Mortgage Loan.

The terms of the Required Plan, which will apply to any Successful Bidder if the Bidding Procedures Motion is approved, establish the mandatory framework for the Debtors reorganization. ARGUMENT I. THE LEGAL STANDARD Rule 26 broadly defines the permissible scope of discovery as to any nonprivileged matter that is relevant to any partys claim or defense. Fed. R. Civ. P. 26(b)(1); see also Estee Lauder, Inc. v. Fragrance Counter, Inc., 189 F.R.D. 269, 274 (S.D.N.Y. 1999) ([Rule 26(b) is] to be given a broad and liberal construction to effectuate [its] purpose of ensuring that civil trials are not conducted in the dark. . . . Moreover the concept of relevance for discovery purposes is not limited by considerations of evidentiary admissibility, but rather is broad enough to afford parties liberal access to evidence in advance of trial. . . . It is well-settled within this Circuit that any possibility that the sought-after information may be relevant to the subject-matter of the action will satisfy Rule 26(b)(1)s requirements.) (quoting Daval Steel Prods. v. M/V Fakredine, 951 F.2d 1357, 1367 (2d Cir. 1991) (internal citations omitted). Accordingly, under Rule 26(c), Midland bears the burden to demonstrate good cause for the protective order it seeks. Fed. R. Civ. 26(c); see also Crawford-Bey v. New York & Presbyterian Hosp., No. 08-CV-5454 (RJS)(KNF), 2010 WL 2143673, at *3 (S.D.N.Y. May 26, 2010) (The party moving for a protective order, under Fed. R. Civ. P. 26(c), bears the burden of demonstrating good cause, which it establishes through a particular and specific demonstration of fact, as distinguished from stereotyped and conclusory statements.) (internal citations omitted). As set forth below, Midland has abjectly failed to satisfy its burden.

II.

MIDLAND HAS FAILED TO ESTABLISH GOOD CAUSE, OR ANY CAUSE WHATSOEVER, FOR WITHHOLDING CRITICAL EVIDENCE The Stalking Horse Motion goes far beyond the typical, procedural motion

designed to start an auction process. It seeks authority for the Debtors to lock in a specific series of transactions that mandate the contours of the Debtors future plan terms that are binding even if Five Mile and Lehman ultimately are not the successful bidders. How the Debtors ultimately selected the Five Mile/Lehman Bid, and when and how Midland and Lehman became involved, are critical to understanding the inter-related transactions. As the Stalking Horse Motion makes perfectly clear, Midland, along with Five Mile and Lehman, all are central players in the transactions for which the Debtors seek this Courts approval. In addition to a related agreement between Midland and Five Mile, Midland is a party to the Commitment Letter with the Debtors, Five Mile and Lehman, and the New Party/Midland Commitment. Critically, one of the Debtors repeated rationales for pursuing the Stalking Horse Motion and related procedures is that both of its largest creditors Lehman and Midland support the Five Mile/Lehman Bid. All of the outlined transactions, and Lehmans and Midlands critical role therein, will be before the Court during the Hearing and all are the proper subject of discovery. There is no basis whatsoever, and Midland cites no supporting case law, to exempt Lehmans and Midlands internal consideration and discussions and communications and negotiations between and among Midland, Lehman and Five Mile from the scope of the discovery. (Midland Motion 2, 21.) Indeed, by its Motion, Midland also demands that no one including, presumably, the Court ask questions at the Hearing about why or on what basis Midland agreed to what even the Debtors describe as controversial terms, or ask questions about the negotiations among the actual participants in the transactions, or for which the Debtors are seeking this Courts approval. (See id. 20-21 & p. 13.) Midlands position lacks any merit.

Midland blithely claims that any examination of the negotiations between and among the Stalking Horse Participants, or Midland or Lehmans consideration and commitment to the transactions, is a diversion because only the Debtors business judgment is at issue. Even if the Debtors business judgment were the sole question for the Hearing, the negotiations between and among all participants are relevant to the determination of, inter alia, whether the Debtors were truly disinterested and whether the Debtors acted in good faith. Questions as to what concessions were made, by whom, with whose currency, and to what extent the Debtors were aware of such terms, are critical to understanding the basis of and specifically the Debtors exercise of their business judgment in pursuing the Stalking Horse Motion and related transactions. Indeed, in rejecting the Debtors PSA Motion, the Court, citing evidence from Apollo and Lehman, concluded that the negotiations surrounding the PSA preclude [a] finding that it was a disinterested business transaction. In re Innkeepers USA Trust, 2010 WL 5300870, at *2. Discovery of the internal discussions of the Stalking Horse Participants, and the negotiations among the Stalking Horse Participants, is particularly relevant here because the Debtors expressly rely on the Stalking Horse Participants valuations and assessments as support for the decision to accept the Stalking Horse Bid. (See, e.g., Stalking Horse Motion 66 (The Bidding Procedures are also the product of hard fought negotiations between the Debtors and Five Mile/Lehman and Midland.); id. 61 ([T]he Commitment Letter represents the culmination of hard fought negotiations between the Debtors and Five Mile/Lehman and Midland. The Debtors believe that, as a result of those negotiations, they have obtained the best deal possible for a stalking horse under the circumstances.).) The Objectors are entitled to understand how and why the Stalking Horse Participants arrived at the valuation levels, valuation

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allocations, and approvals relating to the Stalking Horse Motion, especially in the face of the Debtors citation to, and reliance upon, the Stalking Horse Participants conduct. 4 Debtors similarly rely on the fact that they have locked in the votes of their two largest creditors (id. 61) to support pursuit of the Stalking Horse Motion. All of these agreements are critical to the issues the Court ultimately must determine. 5 The Debtors point not just to the various Stalking Horse Participants determinations and ultimate acceptance of the valuations, and allocations of value across asset pools (id. 40), but also to their insistence of certain bidding protections. For example, the Debtors inform the Court that they would have preferred the exclusion of the provision that requires competing bidders to provide [$200.3 million in ] cash to Lehman (id. 42), but that Five Mile/Lehman and Midland refused to go forward without inclusion of this provision. (Id. 41.) As a result, discovery is also necessary to consider this assertion as well as to assess the dealings as among the parties that negotiated the bidding protections, including the break-up fees. As the Debtors explain, courts should consider whether (a) the relationship of the parties who negotiated the break-up fee is devoid of taint by self-dealing or manipulation, (b) the fee encourages, rather than hampers, bidding, and (c) the amount of the fee is reasonable relative to the proposed purchase price. (Id. 70 (quoting In re Integrated Resources, Inc., 147 B.R. 650, 657-58 (S.D.N.Y. 1992)).) Here, Midland apparently refuse[d] to remove the requirement that competing bidders provide cash to Lehman on account of its claims. (Stalking Horse Motion
4

Indeed, the valuations and allocations of value raise substantial questions. For example, Midlands duties run to all of the certificateholders in the Fixed Rate Mortgage Pool. Why then, did Midland insist on the $200.3 million cashout to Lehman to whom it owes no duties? (See Midland Motion at p. 3.) Among many other relevant questions, it will be important to understand whether Midlands agreement to various terms, which the Debtors acknowledge will be the subject of controversy, reflect the best deal possible or something else. 5 Of course, this voting construct assumes that the proposed plan construct, which effectively substantively consolidates all of the Debtors estates, is otherwise proper. It also assumes that no other basis exists to challenge the Debtors plan on the basis of classification, treatment, and voting under sections 1126 and 1129, among others. The Objectors expressly reserve all rights in such regard.

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 33.) The Objectors must be able to probe the delicate balance between ensuring that a stalking horse bidder be encouraged to participate and creating a level playing field such that other bidders can and will come to the table when approval of bidding procedures is sought. This inquiry is particularly relevant in this case, where both Five Mile and Lehman are embedded investors, who are far less likely not to participate in an auction even without the extensive protections sought in the Stalking Horse Motion. The Objectors are entitled to examine and, respectfully, the Court must consider the negotiation over the break-up fees and protections, including the relationship of the parties involved in the negotiation thereof. Midlands agreement to release Apollo from the Guaranty also merits discovery of Midland and its negotiations with the other Stalking Horse Participants. While the Debtors acknowledge that the Fixed Rate Mortgage Pool is the only beneficiary of the Apollo Guaranty (Stalking Horse Motion at 15), they also disclose that the Midland release of Apollo will enhance[] recoveries for holders of the Series C Preferred Shares. (Id. at 8 (Among the improvements obtained by the Debtors through negotiations with Five Mile/Lehman were . . . the Midland release in favor of Apollo which eliminates litigation with respect to the Apollo Guaranty and enhances recoveries for holders of the Series C Preferred Shares.).) There is no question that, as even the Debtors accept, the Apollo release and related $3 million payment to the Midland will be the subject of focus and controversy. (Id. 42.) The Objectors are entitled to discovery concerning the Apollo release, including discovery of the consideration and negotiation of the Apollo release and how it impacted the overall negotiation of the terms of the Stalking Horse Bid and related auction procedures. Midland also notes, somewhat defensively, that because the proposed bid procedures are not an asset sale under section 363 of the Bankruptcy Code, they are not subject

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to section 363(m), which provides a safe-harbor for good-faith purchasers. The suggestion that Midland, Five Mile, and Lehman are not subject to a good-faith standard is ominous to say the least, and any potential deviation by those parties from the good-faith standard must be ascertained now, in conjunction with the Stalking Horse Motion and before substantial time and money are spent in pursuit of an unconfirmable plan. For example, in the Second Circuit, the good-faith standard under section 1129(a)(3) requires that the plan be proposed with honesty and good intentions and with a basis for expecting that a reorganization can be effected. Kane v. Johns-Manville, 843 F.2d 636, 649 (2d Cir. 1988) (internal quotation marks and citations omitted). Similarly, section 1126(e) may provide a basis to designate the vote of any party that acted in bad faith. Thus, if there are indicia of bad faith among Midland, Five Mile and Lehman, parties that are essential plan proponents, it could jeopardize the Debtors ability to confirm the plan of reorganization contemplated in the Stalking Horse Motion. Moreover, any collusion that resulted in agreements that will control the sale price at the auction also would implicate section 363(n) of the Bankruptcy Code. While the Debtors and the Stalking Horse Participants are proceeding with a plan transaction, in evaluating the relevance of discovery to be taken regarding the Stalking Horse Motion, however, it would be useful to consider the strictures of section 363(n) of the Bankruptcy Code. Section 363(n) permits a sale to be avoided, and/or for damages to be assessed, when the price was controlled by an agreement among the bidders. See 3 Collier on Bankruptcy 363.12. In order to avoid a sale, it must be shown that the intent of the agreement among the bidders is to control the sale price and not merely an agreement that affects the price. See Lone Star Indus., Inc. v. Compania Naviera Perez Compac, 42 F.3d 747, 752 (2d Cir. 1994). Needless to say, in the event that there are agreements regarding the bidding procedures among Midland and Five Mile and Lehman, it

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would be absolutely critical for other parties in interest in these cases including the Debtors, to the extent that they are not aware of them to know and consider such agreements in the context of the Stalking Horse Motion. These issues need to be ferreted out now, before such a plan is locked in through the approval of the proposed bidding procedures. It bears mention that none of the cases cited by Midland allows a participant in transactions submitted for the Courts approval to withhold documents from discovery or to avoid answering questions at a hearing on those same transactions. In fact, the most relevant precedent is that created by Midland on the PSA Motion where it sought and obtained discovery of the internal consideration by Lehman and Apollo of the transactions then at issue, as well as all negotiation documents concerning those transactions. Nothing is different here except that Midland, for reasons its documents will no doubt disclose, is in on the deal. Finally, neither Midland nor Lehman will suffer any prejudice by providing relevant discovery which, after all, is the purpose of the discovery period ordered by the Court. Indeed, Midland already has produced more than 100,000 pages of documents. Midland appears not to be concerned about the volume of its production but, instead, its substance. III. THE COURT SHOULD REJECT MIDLANDS VAGUE SUGGESTION OF A COMMON INTEREST PRIVILEGE Midland also vaguely asserts, in a footnote, that the vast majority of its communications with Five Mile from at least July 26, 2010, and with Lehman from at least December 10, 2010, are subject to the common interest privilege. (Midland Motion at 4, n.5.) Contrary to Midlands suggestion, the common interest doctrine does not create an independent privilege. Instead, it can act as an exception to the general rule that disclosure of privileged information to a third party waives the protected information. Thus, the common interest doctrine applies only where there is a valid and established underlying attorney-client privilege

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or work-product protection. See Schanfield v. Sojitz Corp. of Am., 258 F.R.D. 211, 215 (S.D.N.Y. 2009) (The common interest doctrine does not provide an independent source of protection from disclosure; it is inapplicable to documents not otherwise protected by the attorney-client privilege or work product doctrine.). Midland fails to demonstrate that the documents it has withheld are protected by a valid underlying privilege. Additionally, the common interest doctrine only applies where the parties who shared the privileged information had an identical legal interest, as opposed to a commercial interest, and actively cooperated in developing a common legal strategy. See Bank Brussels Lambert v. Credit Lyonnais, 160 F.R.D. 437, 447 (S.D.N.Y. 1995). A common legal interest exists where the parties asserting the privilege were co-parties to litigation or reasonably believed that they could be made a party to litigation. In re Megan-Racine Assocs., Inc., 189 B.R. 562, 573 (Bankr. N.D.N.Y. 1995). And it is not sufficient that the parties theoretically shared similar interests, but rather they must demonstrate actual cooperation toward a common legal goal. See In re Rivastigmine Patent Litig., No. 05-MD-1661 (HB/JCF), 2005 WL 2319005, at *2 (S.D.N.Y. Sept. 22, 2005). The Objectors do not take the position that Midland or Lehman cannot properly withhold privileged documents, if any, actually protected from disclosure under the common interest doctrine. However, Midland has not even attempted to identify facts supporting a common legal interest with Five Mile or with Lehman, nor any facts supporting a coordinated legal strategy with those parties. Midlands vague claim of privilege should be rejected. 6

Some of the agreements between and among the Stalking Horse Participants also indicate that they are Subject to FRE 408. (Stalking Horse Motion Exh. G.) Midland does not explain, because it cannot explain, how parties seeking to resolve disputes as against one another also share a sufficient common interest so that they can share preexisting privileged communications without waiver.

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CONCLUSION For the foregoing reasons, the Objectors respectfully request that the Court deny the Motion for a Protective Order and grant the Objectors such other and further relief as is just and appropriate. Dated: New York, New York February 7, 2011

____/s/ Lawrence P. Gottesman_____ Lawrence P. Gottesman BRYAN CAVE LLP 1290 Avenue of the Americas New York, New York 10104 Telephone: (212) 541-2000 Facsimile: (212) 541-4630

____/s/ Todd C. Meyers,Esq.________ Todd C. Meyers, Esq. KILPATRICK STOCKTON LLP 1100 Peachtree Street, Suite 2800 Atlanta, Georgia 30309-4530 Telephone: (404) 815-6500 Facsimile: (404) 541-6555

Counsel for LNR Partners, LLC

Counsel for TriMont Real Estate Advisors, Inc. as Special Servicer

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__/s/ Lee Attanasio ___________ Lee Attanasio John G. Hutchinson Benjamin R. Nagin SIDLEY AUSTIN LLP 787 Seventh Avenue New York, New York 10019 Telephone: (212) 839-5300 Facsimile: (212) 839-5599

___/s/ Martin J. Bienenstock _____ Martin J. Bienenstock DEWEY & LEBOEUF LLP 1301 Avenue of the Americas New York, New York 10019 Telephone: (212) 259-8000 Facsimile: (212) 259-6333

Counsel for Appaloosa Investment L.P. I, Palomino Fund Ltd., Thoroughbred Fund L.P., and Thoroughbred Master Ltd.

Counsel for Ad Hoc Committee of Preferred Shareholders

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EXHIBIT A

DECHERT LLP 1095 Avenue of the Americas New York, New York 10036-6797 Telephone: (212) 698-3500 Facsimile: (212) 698-3599 Michael J. Sage Kevin J. OBrien Brian E. Greer Attorneys for Lehman ALI Inc. UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF NEW YORK ------------------------------------------------------------ X : In re: : Chapter 11 : 1 INNKEEPERS USA TRUST, et al. : Case No.: 10-13800 : Debtors. : Jointly Administered : ------------------------------------------------------------ X LEHMAN ALI INC.S RESPONSES AND OBJECTIONS TO THE FIRST SET OF REQUESTS FOR PRODUCTION OF DOCUMENTS AND NOTICE OF DEPOSITION SERVED BY APPALOOSA INVESTMENTS L.P. I, PALOMINO FUND LTD., THOROUGHBRED FUND L.P., AND THOROUGHBRED MASTER LTD. Lehman ALI Inc. (Lehman), submits the following Responses and Objections to the First Set of Requests for Production of Documents (the Requests) and Notice of Deposition (the Deposition Notice) served by Appaloosa Investment L.P. I and three other funds represented by the same fund manager, Palomino Fund Ltd., Thoroughbred Fund L.P., and Thoroughbred Master Ltd. (collectively, Appaloosa) and respectfully represents and states as follows:
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

General Objections Related to Deposition of Corporate Representatives 1. By responding to Appaloosas Deposition Notice, Lehman does not adopt any of

the characterizations made by Appaloosa in its Deposition Notice concerning information Appaloosa is seeking or facts that remain in dispute. 2. Lehman objects to the Deposition Notice on the grounds that the topics are

overbroad and, in many cases, wholly irrelevant to the narrow issue set for hearing on March 8, 2011 -- specifically, whether the Debtors have properly exercised their business judgment in (a) entering into the Commitment Letter and (b) approving the New Party/Midland Commitment,

(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 Floating 2, LLC (9972); Grand Prix Mezz Borrower Fixed, LLC (0252); Grand Prix Mezz Borrower Floating, LLC (5924); 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 Financing Partnership II LP (9546); Innkeepers Morristown LLC (7834); Innkeepers RI Altamonte LP (3243); Innkeepers RI General LP (3244); Innkeepers RI Northwest LP (7740); Innkeepers Schaumburg LP (9822); Innkeepers Summerfield Gen. II LP (5954); Innkeepers Summerfield Gen. LP (3856); Innkeepers Westchester LP (9618); Innkeepers USA Limited Partnership (3956); Innkeepers USA Trust (3554); KPA Ft. Walton, LLC (4502); KPA HI Ontario LLC (6939); KPA HS Anaheim, LLC (0302); KPA Leaseco II, Inc. (6868); 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 its affiliates is: c/o Innkeepers USA, 340 Royal Poinciana Way, Suite 306, Palm Beach, FL 33480.

Bidding Procedures, Bid Protections, the Bidder D Expense Reimbursement and other relief sought in the Bidding Procedures Motion. 2 3. Lehman objects to the topics to the extent they seek information that is not known

and reasonably available to Lehman. Lehman should not be required to produce any discovery unless and until Appaloosa can demonstrate that it could not obtain such information directly from the Debtors. 4. Lehman objects to the Deposition Notice to the extent it seeks information subject

to any privilege recognized by applicable law, including but not limited to the attorney-client privilege, the work-product privilege, the accountant-client privilege, the common-interest privilege, the joint-defense privilege, and any other applicable privilege. Lehman does not waive, intends to preserve and is preserving, the attorney-client privilege, the work-product privilege, the common-interest privilege, the joint-defense privilege and any other applicable privilege with respect to any and all information protected by such privilege. 5. Lehman objects to the Deposition Notice to the extent it seeks information that is

more appropriately the subject of an expert deposition. 6. Lehman objects to the Deposition Notice to the extent it seeks information not

relevant to the subject matter of the pending action or any claim or defense therein, and thus is not likely to lead to the discovery of admissible evidence.

The Bidding Procedures Motion shall mean the Debtors Motion for the Entry of an Order (I) Authorizing the Debtors to Enter into the Commitment Letter with Five Mile Capital II Pooling REIT LLC, Lehman 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 to Increase Expense Reserve filed by the Debtors in the Chapter 11 Cases on or about January 14, 2011, including any exhibits attached thereto. Capitalized terms not otherwise defined herein shall have the meanings ascribed to them in the Bidding Procedures Motion.

7.

Lehman objects to the Deposition Notice to the extent it is ambiguous, vague,

unduly burdensome, overbroad, and neither relevant nor reasonably calculated to lead to the discovery of admissible evidence. 8. Lehman objects to the Deposition Notice to the extent it purports to impose

obligations on Lehman beyond those required by the Federal Rules of Civil Procedures (the Federal Rules), the Federal Rules of Bankruptcy Procedure (the Bankruptcy Rules) and/or the local rules of practice of this Court (the Local Rules). 9. Lehman reserves the right at any time to assert additional objections to the

Deposition Notice as appropriate and/or to amend or supplement its responses. 10. Subject to and without waiving any of the foregoing objections, Lehman will

produce a corporate representative to testify regarding matters related to the Bidding Procedures Motion and the narrow question of whether the Debtors request for the entry of an order approving the relief sought in the Bidding Procedures Motion is a reasonable exercise of the Debtors business judgment. General Objections Related to the Production of Documents 11. Lehman incorporates each of the following General Objections Related to the

Production of Documents (collectively, the General Production Objections) into all of the responses below. By responding to the Requests, Lehman does not adopt any of the

characterizations made by Appaloosa in its Requests, including the Instructions and Definitions therein, concerning the information Appaloosa is seeking or facts that remain in dispute. The fact that Lehman has responded to Appaloosas Requests shall not be interpreted as implying that responsive information exists or that Lehman acknowledges the propriety of the specific request.

12.

As a threshold matter, Lehman submits that Appaloosa lacks standing to appear

and be heard in connection with the Bidding Procedures Motion for all the reasons set forth in the Reply and Objection of Midland Loan Services to the Motions of (A) LNR Investment L.P. I, Palomino Fund LTD., Thoroughbred Fund L.P., and Thoroughbred Master Ltd. and (B) LNR, Seeking (I) Judicial Determination of Party In Interest Status under Section 1109(b) of the Bankruptcy Code, or in the Alternative (II) Granting Intervention Pursuant to Federal Rule of Bankruptcy Procedure 2018. Because Appaloosa lacks standing to appear and be heard in connection with the Bidding Procedures Motion, Appaloosa likewise lacks the authority to serve document requests upon Lehman in connection with the Bidding Procedures Motion. Accordingly, Lehman objections to Appaloosas Requests in their entirety. 13. To the extent Appaloosa does have the requisite authority to serve the Requests

upon Lehman in connection with the Bidding Procedures Motion, Lehman objects to the Requests on the grounds that the Requests are overbroad, and in many cases, wholly irrelevant to the narrow issue set for hearing on March 8, 2011 -- specifically, whether the Debtors have properly exercised their business judgment in seeking the entry of an order approving the relief requested in the Bidding Procedures Motion. The Requests seek discovery regarding the

Debtors financial condition, including any valuation by the Debtors and any similar information internal to Lehman or to third parties who are non-debtors to the Chapter 11 Cases, in an effort to improperly expand the scope and nature of the issues to be addressed at the March 8, 2011 hearing to encompass virtually all issues that will eventually be the subject of a confirmation hearing months from now.

14.

Lehman objects to the Requests as cumulative and duplicative of other

information provided by the Debtors to Appaloosa. The Debtors will be responding to the document requests served upon them by Appaloosa and Lehman should not be required to produce any discovery unless and until Appaloosa can demonstrate that it could not obtain such information directly from the Debtors. 15. Lehman objects to the Requests, including the Definitions and Instructions therein,

to the extent that they purport to impose obligations on Lehman beyond those required by the Federal Rules, the Bankruptcy Rules and/or the Local Rules. 16. Lehman objects to the Requests, including the Definitions and Instructions therein,

to the extent they seek information that is subject to any privilege recognized by applicable law including, but not limited to, the attorney-client privilege, the work-product privilege, the accountant-client privilege, the common-interest privilege, the joint-defense privilege, and any other applicable privilege. Lehman does not waive, intends to preserve and is preserving, the attorney-client privilege, the work-product privilege, the common-interest privilege, the jointdefense privilege and any other applicable privilege with respect to any and all information protected by such privilege. 17. Lehman objects to the Requests, including the Definitions and Instructions therein, Evidence

to the extent they seek confidential information, including internal discussion.

concerning internal Lehman matters is wholly irrelevant as to whether the Debtors have properly exercised their business judgment. 18. Lehman objects to the Requests, including the Definitions and Instructions therein,

to the extent they are ambiguous, vague, unduly burdensome, overbroad, and neither relevant nor reasonably calculated to lead to the discovery of admissible evidence, and specifically will not

produce documents to the extent that the restoration and review of data or documents from either tapes or other media originally maintained for disaster recovery purposes, or files warehoused at off-site facilities and not identifiable on company logs, indexes or inventories would be required. 19. Lehman objects to each Request to the extent that it seeks all documents where

a subset of such documents would suffice. 20. Lehman objects to the Requests, including the Definitions and Instructions therein,

to the extent that they purport to require disclosure of information that is publicly available or equally available to Appaloosa, or information that is in possession of any person other than Lehman. Lehman objects to the Instructions to the extent that they seek to require Lehman to produce documents not in their possession, custody or control. 21. In providing these Responses and Objections, Lehman does not waive or intend to

waive, but rather intends to preserve and is preserving, all objections including: (a) All objections as to relevancy, competency, materiality, authenticity, and admissibility; All rights to object on any ground to the use of any of the responses herein or information in any subsequent proceedings, including the trial of this or any other action; and All rights to object on the ground to any further discovery requests.

(b)

(c) 22.

Lehman objects to the Instructions as unduly burdensome to the extent they seek

to require Lehman to recreate the packaging in which any responsive documents are kept. 23. Finally, to the extent Lehman determines to produce any documents in response

to the Requests, Lehman will only produce documents that have come into existence or have been examined or consulted from September 1, 2010 through the present.

Specific Objections Related to the Production of Documents Request No. 1. Regardless of date, all documents previously produced by or to You in connection with the Motion to Assume the Plan Support Agreement. Response to Request No. 1. Subject to and without waiving its General Production Objections, Lehman asserts the following specific objections and responses. Lehman specifically objects to this Request as overly broad and irrelevant to whether the Debtors reasonably exercised their business judgment with respect to the Bidding Procedures Motion. Lehman will not produce any documents unrelated to the Debtors exercise of the Debtors business judgment in connection with the relief sought in the Bidding Procedures Motion. Lehman further responds that none of the documents requested in this Request are likely to lead to the discovery of admissible evidence of issues in connection with the Bidding Procedures Motion. Lehman further objects to this Request as vague, overbroad and unduly burdensome to the extent it seeks the production of all documents previously produced by or to Lehman in connection with the Motion to Assume the Plan Support Agreement. Lehman submits that there are more efficient and less burdensome discovery methods for Appaloosa to obtain relevant documents than seeking all documents related to such topics. Lehman will not produce documents in response to this Request. Request No. 2. All documents concerning any Potential or Actual Innkeepers Deal and the negotiation of any Potential or Actual Innkeepers Deal.

Response to Request No. 2. Subject to and without waiving its General Production Objections, Lehman asserts the following specific objections and responses. Lehman specifically objects to this Request to the extent it seeks impermissible discovery of internal documents and any documents internal to Lehman do not bear in any way to the Debtors exercise of their business judgment with respect to the relief sought in the Bidding Procedures Motion. Furthermore, any evidence of internal Lehman matters is confidential and potentially privileged information regarding Lehmans internal decision-making process and is completely irrelevant to the Debtors exercise of their business judgment with respect to the relief sought in the Bidding Procedures Motion. Lehman further objects to this Request as vague, overbroad and unduly burdensome to the extent it seeks discovery of issues Appaloosa can obtain directly from the Debtors. Lehman should not be required to produce any discovery unless and until Appaloosa can demonstrate that it could not obtain such information directly from the Debtors. Finally, Lehman objects to this Request as vague, overbroad and unduly burdensome to the extent it seeks the production of all documents concerning any Potential or Actual Innkeepers Deal and the negotiation of any Potential or Actual Innkeepers Deal. Lehman submits there are more efficient and less burdensome discovery methods for Appaloosa to obtain relevant documents than seeking all documents related to such topics. Subject to and without waiving these objections, and to the General Production Objections above, Lehman will produce non-privileged documents and communications between Lehman and its representatives and the Debtors and their representatives concerning any Potential or Actual Innkeepers Deal and the negotiation of any Potential or Actual Innkeepers Deal that reflect upon the Debtors exercise of their business judgment.

Request No. 3. All documents concerning the proposed treatment under the transactions contemplated by the Motion of each category of claims referenced in the chart on pages 35 through 38 of the Motion, including, without limitation, any discussion, analysis, negotiation or consideration of any proposed treatment of any of the categories of claims referenced in the chart on pages 35 through 38 of the Motion. Response to Request No. 3. Subject to and without waiving its General Production Objections, Lehman asserts the following specific objections and responses. Lehman specifically objects to this Request as overly broad and irrelevant to whether the Debtors reasonably exercised their business judgment with respect to the Bidding Procedures Motion. Internal documents by Lehman and documents with third parties who are non-debtors to these Chapter 11 Cases do not bear in any way to the Debtors reasonable exercise of business judgment. Any additional documents are irrelevant to the contested matters involving the Bidding Procedures Motion. Lehman further objects to this Request as vague, overbroad and unduly burdensome to the extent it seeks discovery of issues Appaloosa can obtain directly from the Debtors. Lehman should not be required to produce any discovery unless and until Appaloosa can demonstrate that it could not obtain such information directly from the Debtors. Lehman further objects to this Request as vague, overbroad and unduly burdensome to the extent it seeks the production of all documents concerning the proposed treatment under the transactions contemplated by the Motion of each category of claims referenced in the chart on pages 35 through 38 of the Motion. Lehman submits that there are more efficient and less burdensome discovery methods for Appaloosa to obtain relevant documents than seeking all documents related to such topics. Lehman will not produce documents in response to this Request.

10

Request No. 4. All communications between You and any other person concerning any Potential or Actual Innkeepers Deal, including, without limitation, the Debtors, Midland, LNR, Five Mile, Apollo and any advisor to You or any other Person, including, without limitation, Moelis and FTI Consulting. Response to Request No. 4. Subject to and without waiving its General Production Objections, Lehman asserts the following specific objections and responses. Lehman specifically objects to this Request to the extent it seeks impermissible discovery of internal documents and any documents internal to Lehman do not bear in any way to the Debtors exercise of their business judgment with respect to the relief sought in the Bidding Procedures Motion. Furthermore, any evidence of internal Lehman matters is confidential and potentially privileged information regarding Lehmans internal decision-making process and is completely irrelevant to the Debtors exercise of their business judgment with respect to the relief sought in the Bidding Procedures Motion. Lehman further responds that documents between Lehman and third parties who are nondebtors to these Chapter 11 Cases are privileged and/or confidential and, in any event, do not bear in any way to the Debtors reasonable exercise of business judgment. Finally, Lehman objects to this Request as vague, overbroad and unduly burdensome to the extent it seeks the production of all documents concerning any Potential or Actual Innkeepers Deal. Lehman submits there are more efficient and less burdensome discovery methods for Appaloosa to obtain relevant documents than seeking all documents related to such topics. Subject to and without waiving these objections, and to the General Production Objections above, Lehman will produce non-privileged documents and communications between Lehman and its representatives and the Debtors and their representatives concerning any

11

Potential or Actual Innkeepers Deal that reflect upon the Debtors exercise of their business judgment. Request No. 5. All documents concerning any potential or actual marketing of any Potential or Actual Innkeepers Deal. Response to Request No. 5. Subject to and without waiving its General Production Objections, Lehman asserts the following specific objections and responses. Lehman specifically objects to this Request as vague, overbroad and unduly burdensome to the extent it seeks discovery of issues Appaloosa can obtain directly from the Debtors. Lehman should not be required to produce any discovery unless and until Appaloosa can demonstrate that it could not obtain such information directly from the Debtors. Lehman further objects to this Request as vague, overbroad and unduly burdensome to the extent it seeks the production of all documents concerning any potential or actual marketing of any Potential or Actual Innkeepers Deal. Lehman submits there are more efficient and less burdensome discovery methods for Appaloosa to obtain relevant documents than seeking all documents related to such topics. Finally, Lehman specifically objects to this Request to the extent it seeks impermissible discovery of internal documents and any documents internal to Lehman do not bear in any way to the Debtors exercise of their business judgment with respect to the relief sought in the Bidding Procedures Motion. Furthermore, any evidence of internal Lehman matters is

confidential and potentially privileged information regarding Lehmans internal decision-making process and is completely irrelevant to the Debtors exercise of their business judgment with respect to the relief sought in the Bidding Procedures Motion.

12

Lehman will not produce documents in response to this Request. Request No. 6. All documents concerning any discussion, consideration, analysis, or negotiation concerning whether and to what extent Debtors will consider and/or accept, or have considered and/or accepted, enterprise proposals for the Debtors and/or proposals based upon a particular asset or group of assets of the Debtors. Response to Request No. 6. Subject to and without waiving its General Production Objections, Lehman asserts the following specific objections and responses. Lehman specifically objects to this Request to the extent it seeks impermissible discovery of internal documents and any documents internal to Lehman do not bear in any way to the Debtors exercise of their business judgment with respect to the relief sought in the Bidding Procedures Motion. Furthermore, any evidence of internal Lehman matters is confidential and potentially privileged information regarding Lehmans internal decision-making process and is completely irrelevant to the Debtors exercise of their business judgment with respect to the relief sought in the Bidding Procedures Motion. Lehman further objects to this Request as vague, overbroad and unduly burdensome to the extent it seeks discovery of issues Appaloosa can obtain directly from the Debtors. Lehman should not be required to produce any discovery unless and until Appaloosa can demonstrate that it could not obtain such information directly from the Debtors. Finally, Lehman objects to this Request as vague, overbroad and unduly burdensome to the extent it seeks the production of all documents concerning any discussion, consideration, analysis, or negotiation concerning whether and to what extent Debtors will consider and/or accept, or have considered and/or accepted, enterprise proposals for the Debtors and/or proposals based upon a particular asset or group of assets of the Debtors. Lehman submits there are more

13

efficient and less burdensome discovery methods for Appaloosa to obtain relevant documents than seeking all documents related to such topics. Lehman will not produce documents in response to this Request. Request No. 7. All documents concerning any bidding procedures considered, analyzed, negotiated, or discussed concerning any Potential or Actual Innkeepers Deal. Response to Request No. 7. Subject to and without waiving its General Production Objections, Lehman asserts the following specific objections and responses. Lehman specifically objects to this Request to the extent it seeks impermissible discovery of internal documents and any documents internal to Lehman do not bear in any way to the Debtors exercise of their business judgment with respect to the relief sought in the Bidding Procedures Motion. Furthermore, any evidence of internal Lehman matters is confidential and potentially privileged information regarding Lehmans internal decision-making process and is completely irrelevant to the Debtors exercise of their business judgment with respect to the relief sought in the Bidding Procedures Motion. Lehman further objects to this Request as vague, overbroad and unduly burdensome to the extent it seeks discovery of issues Appaloosa can obtain directly from the Debtors. Lehman should not be required to produce any discovery unless and until Appaloosa can demonstrate that it could not obtain such information directly from the Debtors. Finally, Lehman objects to this Request as vague, overbroad and unduly burdensome to the extent it seeks the production of all documents concerning any bidding procedures considered, analyzed, negotiated, or discussed concerning any Potential or Actual Innkeepers Deal. Lehman submits there are more efficient and less burdensome discovery methods for Appaloosa to obtain relevant documents than seeking all documents related to such topics.

14

Lehman will not produce documents in response to this Request. Request No. 8. All documents concerning any payments or other consideration to be provided to or by any Person as part of any Potential or Actual Innkeepers Deal, including without limitation, the $2.5 million payment to Midland described in the Motion and any release that would be given to or by any person as part of any Potential or Actual Innkeepers Deal. Response to Request No. 8. Subject to and without waiving its General Production Objections, Lehman asserts the following specific objections and responses. Lehman specifically objects to this Request to the extent it seeks impermissible discovery of internal documents and any documents internal to Lehman do not bear in any way to the Debtors exercise of their business judgment with respect to the relief sought in the Bidding Procedures Motion. Furthermore, any evidence of internal Lehman matters is confidential and potentially privileged information regarding Lehmans internal decision-making process and is completely irrelevant to the Debtors exercise of their business judgment with respect to the relief sought in the Bidding Procedures Motion. Lehman further objects to this Request as vague, overbroad and unduly burdensome to the extent it seeks discovery of issues Appaloosa can obtain directly from the Debtors. Lehman should not be required to produce any discovery unless and until Appaloosa can demonstrate that it could not obtain such information directly from the Debtors. Finally, Lehman objects to this Request as vague, overbroad and unduly burdensome to the extent it seeks the production of all documents concerning any payments or other consideration to be provided to or by any Person as part of any Potential or Actual Innkeepers Deal, including without limitation, the $2.5 million payment to Midland described in the Motion and any release that would be given to or by any person as part of any Potential or Actual Innkeepers Deal. Lehman submits there are more efficient and less burdensome discovery

15

methods for Appaloosa to obtain relevant documents than seeking all documents related to such topics. Lehman will not produce documents in response to this Request. Request No. 9. All documents concerning any financial plans, valuations, appraisals, forecasts, projections, or financial analyses concerning all or any part of the Debtors or their assets or any Potential or Actual Innkeepers Deal. Response to Request No. 9. Subject to and without waiving its General Production Objections, Lehman asserts the following specific objections and responses. Lehman specifically objects to this Request as wholly irrelevant to the Bidding Procedures Motion. Any documents relating to any financial plans, valuations, appraisals, forecasts, projections, or financial analyses of or for Innkeepers, or any of their assets, are completely irrelevant to the Debtors exercise of business judgment with respect to the relief sought in the Bidding Procedures Motion. Furthermore, any internal Lehman documents are confidential and potentially privileged information regarding Lehmans internal decision-making process. Any documents internal to Lehman are completely irrelevant and do not bear in any way to the Debtors exercise of their business judgment with respect to the relief sought in the Bidding Procedures Motion. Lehman further responds that Lehman will not produce any documents unrelated to the Debtors exercise of the Debtors business judgment in connection with the relief sought in the Bidding Procedures Motion. Lehman further responds that none of the documents requested in this Request are likely to lead to the discovery of admissible evidence of issues in connection with the Bidding Procedures Motion.

16

Lehman further objects to this Request as vague, overbroad and unduly burdensome to the extent it seeks discovery of issues Appaloosa can obtain directly from the Debtors. Lehman should not be required to produce any discovery unless and until Appaloosa can demonstrate that it could not obtain such information directly from the Debtors. Finally, Lehman objects to this Request as vague, overbroad and unduly burdensome to the extent it seeks the production of all documents concerning any financial plans, valuations, appraisals, forecasts, projections, or financial analyses concerning all or any part of the Debtors or their assets or any Potential or Actual Innkeepers Deal. Lehman submits there are more efficient and less burdensome discovery methods for Appaloosa to obtain relevant documents than seeking all documents related to such topics. Lehman will not produce documents in response to this Request. Request No. 10. All documents concerning the proposed increase in the expense reserve from $4.5 million to $18.5 million, including, without limitation, all documents concerning the source of the proposed additional amount and all documents concerning the manner in which the proposed expense reserve may be or could be used. Response to Request No. 10. Subject to and without waiving its General Production Objections, Lehman asserts the following specific objections and responses. Lehman specifically objects to this Request to the extent it seeks impermissible discovery of internal documents and any documents internal to Lehman do not bear in any way to the Debtors exercise of their business judgment with respect to the relief sought in the Bidding Procedures Motion. Furthermore, any evidence of internal Lehman matters is confidential and potentially privileged information regarding Lehmans internal decision-making process and is completely irrelevant to the Debtors exercise of their business judgment with respect to the relief sought in the Bidding Procedures Motion.

17

Lehman further objects to this Request as vague, overbroad and unduly burdensome to the extent it seeks discovery of issues Appaloosa can obtain directly from the Debtors. Lehman should not be required to produce any discovery unless and until Appaloosa can demonstrate that it could not obtain such information directly from the Debtors. Finally, Lehman objects to this Request as vague, overbroad and unduly burdensome to the extent it seeks the production of all documents concerning the proposed increase in the expense reserve from $4.5 million to $18.5 million, including, without limitation, all documents concerning the source of the proposed additional amount and all documents concerning the manner in which the proposed expense reserve may be or could be used. Lehman submits there are more efficient and less burdensome discovery methods for Appaloosa to obtain relevant documents than seeking all documents related to such topics. Lehman will not produce documents in response to this Request. Request No. 11. All documents concerning any preliminary, draft or final valuation of the Fixed Rate Mortgage Portfolio. Response to Request No. 11. Subject to and without waiving its General Production Objections, Lehman asserts the following specific objections and responses. Lehman specifically objects to this Request as wholly irrelevant to the Bidding Procedures Motion. Any documents relating to any preliminary, draft or final valuation of the Fixed Rate Mortgage Portfolio, are completely irrelevant to the Debtors exercise of business judgment with respect to the relief sought in the Bidding Procedures Motion. Furthermore, any internal Lehman documents are confidential and

potentially privileged information regarding Lehmans internal decision-making process. Any documents internal to Lehman are completely irrelevant and do not bear in any way to the

18

Debtors exercise of their business judgment with respect to the relief sought in the Bidding Procedures Motion. Lehman further responds that Lehman will not produce any documents unrelated to the Debtors exercise of the Debtors business judgment in connection with the relief sought in the Bidding Procedures Motion. Lehman further responds that none of the documents requested in this Request are likely to lead to the discovery of admissible evidence of issues in connection with the Bidding Procedures Motion. Lehman further objects to this Request as vague, overbroad and unduly burdensome to the extent it seeks discovery of issues Appaloosa can obtain directly from the Debtors. Lehman should not be required to produce any discovery unless and until Appaloosa can demonstrate that it could not obtain such information directly from the Debtors. Finally, Lehman objects to this Request as vague, overbroad and unduly burdensome to the extent it seeks the production of all documents any preliminary, draft or final valuation of the Fixed Rate Mortgage Portfolio. Lehman submits there are more efficient and less

burdensome discovery methods for Appaloosa to obtain relevant documents than seeking all documents related to such topics. Lehman will not produce documents in response to this Request. Request No. 12. All documents concerning any preliminary, draft or final valuation of the Floating Rate Mortgage Portfolio. Response to Request No. 12. Subject to and without waiving its General Production Objections, Lehman asserts the following specific objections and responses. Lehman specifically objects to this Request as wholly irrelevant to the Bidding Procedures Motion. Any documents relating to any preliminary,

19

draft or final valuation of the Floating Rate Mortgage Portfolio, are completely irrelevant to the Debtors exercise of business judgment with respect to the relief sought in the Bidding Procedures Motion. Furthermore, any internal Lehman documents are confidential and

potentially privileged information regarding Lehmans internal decision-making process. Any documents internal to Lehman are completely irrelevant and do not bear in any way to the Debtors exercise of their business judgment with respect to the relief sought in the Bidding Procedures Motion. Lehman further responds that Lehman will not produce any documents unrelated to the Debtors exercise of the Debtors business judgment in connection with the relief sought in the Bidding Procedures Motion. Lehman further responds that none of the documents requested in this Request are likely to lead to the discovery of admissible evidence of issues in connection with the Bidding Procedures Motion. Lehman further objects to this Request as vague, overbroad and unduly burdensome to the extent it seeks discovery of issues Appaloosa can obtain directly from the Debtors. Lehman should not be required to produce any discovery unless and until Appaloosa can demonstrate that it could not obtain such information directly from the Debtors. Finally, Lehman objects to this Request as vague, overbroad and unduly burdensome to the extent it seeks the production of all documents any preliminary, draft or final valuation of the Floating Rate Mortgage Portfolio. Lehman submits there are more efficient and less

burdensome discovery methods for Appaloosa to obtain relevant documents than seeking all documents related to such topics. Lehman will not produce documents in response to this Request.

20

Request No. 13. All documents concerning the Apollo Guaranty, including, without limitation, any valuations, analyses or discussion of the Apollo Guaranty and all documents concerning any potential settlement of the Apollo Action, and the negotiation and thereof and the reasons therefor. This Request calls the production of all responsive documents from the June 29, 2007 date of the Apollo Guaranty to the date of production. Response to Request No. 13. Subject to and without waiving its General Production Objections, Lehman asserts the following specific objections and responses. Lehman specifically objects to this Request to the extent it seeks impermissible discovery of internal documents and any documents internal to Lehman do not bear in any way to the Debtors exercise of their business judgment with respect to the relief sought in the Bidding Procedures Motion. Furthermore, any evidence of internal Lehman matters is confidential and potentially privileged information regarding Lehmans internal decision-making process and is completely irrelevant to the Debtors exercise of their business judgment with respect to the relief sought in the Bidding Procedures Motion. Lehman further objects to this Request as vague, overbroad and unduly burdensome to the extent it seeks discovery of issues Appaloosa can obtain directly from the Debtors. Lehman should not be required to produce any discovery unless and until Appaloosa can demonstrate that it could not obtain such information directly from the Debtors. Finally, Lehman objects to this Request as vague, overbroad and unduly burdensome to the extent it seeks the production of all documents concerning the Apollo Guaranty. Lehman submits there are more efficient and less burdensome discovery methods for Appaloosa to obtain relevant documents than seeking all documents related to such topics. Lehman will not produce documents in response to this Request.

21

Request No. 14. All documents concerning whether under any Potential or Actual Innkeepers Deal, funds generated from the Fixed Rate Loan Portfolio could be used for any purpose other than for the direct benefit of the Fixed Rate Loan Portfolio. Response to Request No. 14. Subject to and without waiving its General Production Objections, Lehman asserts the following specific objections and responses. Lehman specifically objects to this Request to the extent it seeks impermissible discovery of internal documents and any documents internal to Lehman do not bear in any way to the Debtors exercise of their business judgment with respect to the relief sought in the Bidding Procedures Motion. Furthermore, any evidence of internal Lehman matters is confidential and potentially privileged information regarding Lehmans internal decision-making process and is completely irrelevant to the Debtors exercise of their business judgment with respect to the relief sought in the Bidding Procedures Motion. Lehman further objects to this Request as vague, overbroad and unduly burdensome to the extent it seeks discovery of issues Appaloosa can obtain directly from the Debtors. Lehman should not be required to produce any discovery unless and until Appaloosa can demonstrate that it could not obtain such information directly from the Debtors. Finally, Lehman objects to this Request as vague, overbroad and unduly burdensome to the extent it seeks the production of all documents concerning whether under any Potential or Actual Innkeepers Deal, funds generated from the Fixed Rate Loan Portfolio could be used for any purpose other than for the direct benefit of the Fixed Rate Loan Portfolio. Lehman submits there are more efficient and less burdensome discovery methods for Appaloosa to obtain relevant documents than seeking all documents related to such topics. Lehman will not produce documents in response to this Request.

22

Request No. 15. All documents concerning the Mandatory Lehman Payment, and the negotiation thereof. Response to Request No. 15. Subject to and without waiving its General Production Objections, Lehman asserts the following specific objections and responses. Lehman specifically objects to this Request to the extent it seeks impermissible discovery of internal documents and any documents internal to Lehman do not bear in any way to the Debtors exercise of their business judgment with respect to the relief sought in the Bidding Procedures Motion. Furthermore, any evidence of internal Lehman matters is confidential and potentially privileged information regarding Lehmans internal decision-making process and is completely irrelevant to the Debtors exercise of their business judgment with respect to the relief sought in the Bidding Procedures Motion. Lehman further objects to this Request as vague, overbroad and unduly burdensome to the extent it seeks discovery of issues Appaloosa can obtain directly from the Debtors. Lehman should not be required to produce any discovery unless and until Appaloosa can demonstrate that it could not obtain such information directly from the Debtors. Finally, Lehman objects to this Request as vague, overbroad and unduly burdensome to the extent it seeks the production of all documents concerning the Mandatory Lehman Payment, and the negotiation thereof. Lehman submits there are more efficient and less

burdensome discovery methods for Appaloosa to obtain relevant documents than seeking all documents related to such topics. Subject to and without waiving these objections, and to the General Production Objections above, Lehman will produce non-privileged documents and communications between Lehman and its representatives and the Debtors and their representatives concerning the

23

Mandatory Lehman Payment, and the negotiation thereof, that reflect upon the Debtors exercise of their business judgment. Request No. 16. All documents concerning any communications with any possible, potential or actual purchaser or bidder for all or any portion of the Debtors or their assets, and any person's evaluation, discussion, response or negotiation with respect to such potential or actual proposal or bid. Response to Request No. 16. Subject to and without waiving its General Production Objections, Lehman asserts the following specific objections and responses. Lehman specifically objects to this Request to the extent it seeks impermissible discovery of internal documents and any documents internal to Lehman do not bear in any way to the Debtors exercise of their business judgment with respect to the relief sought in the Bidding Procedures Motion. Furthermore, any evidence of internal Lehman matters is confidential and potentially privileged information regarding Lehmans internal decision-making process and is completely irrelevant to the Debtors exercise of their business judgment with respect to the relief sought in the Bidding Procedures Motion. Lehman further objects to this Request as vague, overbroad and unduly burdensome to the extent it seeks discovery of issues Appaloosa can obtain directly from the Debtors. Lehman should not be required to produce any discovery unless and until Appaloosa can demonstrate that it could not obtain such information directly from the Debtors. Finally, Lehman objects to this Request as vague, overbroad and unduly burdensome to the extent it seeks the production of all documents concerning any communications with any possible, potential or actual purchaser or bidder for all or any portion of the Debtors or their assets, and any person's evaluation, discussion, response or negotiation with respect to such potential or actual proposal or bid. Lehman submits there are more efficient and less

24

burdensome discovery methods for Appaloosa to obtain relevant documents than seeking all documents related to such topics. Subject to and without waiving these objections, and to the General Production Objections above, Lehman will produce non-privileged documents and communications between Lehman and its representatives and the Debtors and their representatives concerning any communications with any possible, potential or actual purchaser or bidder for all or any portion of the Debtors or their assets, and any person's evaluation, discussion, response or negotiation with respect to such potential or actual proposal or bid, that reflect upon the Debtors exercise of their business judgment. Request No. 17. All documents concerning the Midland Payments, including, without limitation, all documents concerning the analysis, discussion, consideration and negotiation of the Midland Payments. Response to Request No. 17. Subject to and without waiving its General Production Objections, Lehman asserts the following specific objections and responses. Lehman specifically objects to this Request to the extent it seeks impermissible discovery of internal documents and any documents internal to Lehman do not bear in any way to the Debtors exercise of their business judgment with respect to the relief sought in the Bidding Procedures Motion. Furthermore, any evidence of internal Lehman matters is confidential and potentially privileged information regarding Lehmans internal decision-making process and is completely irrelevant to the Debtors exercise of their business judgment with respect to the relief sought in the Bidding Procedures Motion. Lehman further objects to this Request as vague, overbroad and unduly burdensome to the extent it seeks discovery of issues Appaloosa can obtain directly from the Debtors. Lehman

25

should not be required to produce any discovery unless and until Appaloosa can demonstrate that it could not obtain such information directly from the Debtors. Finally, Lehman objects to this Request as vague, overbroad and unduly burdensome to the extent it seeks the production of all documents concerning the Midland Payments. Lehman submits there are more efficient and less burdensome discovery methods for Appaloosa to obtain relevant documents than seeking all documents related to such topics. Lehman will not produce documents in response to this Request. Request No. 18. All documents concerning any consideration, analysis, discussion, or negotiation of the transactions contemplated by the Motion. Response to Request No. 18. Subject to and without waiving its General Production Objections, Lehman asserts the following specific objections and responses. Lehman specifically objects to this Request to the extent it seeks impermissible discovery of internal documents and any documents internal to Lehman do not bear in any way to the Debtors exercise of their business judgment with respect to the relief sought in the Bidding Procedures Motion. Furthermore, any evidence of internal Lehman matters is confidential and potentially privileged information regarding Lehmans internal decision-making process and is completely irrelevant to the Debtors exercise of their business judgment with respect to the relief sought in the Bidding Procedures Motion. Lehman further objects to this Request as vague, overbroad and unduly burdensome to the extent it seeks discovery of issues Appaloosa can obtain directly from the Debtors. Lehman should not be required to produce any discovery unless and until Appaloosa can demonstrate that it could not obtain such information directly from the Debtors.

26

Finally, Lehman objects to this Request as vague, overbroad and unduly burdensome to the extent it seeks the production of all documents concerning any consideration, analysis, discussion, or negotiation of the transactions contemplated by the Bidding Procedures Motion. Lehman submits there are more efficient and less burdensome discovery methods for Appaloosa to obtain relevant documents than seeking all documents related to such topics. Subject to and without waiving these objections, and to the General Production Objections above, Lehman will produce non-privileged documents and communications between Lehman and its representatives and the Debtors and their representatives concerning any consideration, analysis, discussion, or negotiation of the transactions contemplated by the Bidding Procedures Motion that reflect upon the Debtors exercise of their business judgment. Request No. 19. Regardless of date, all documents concerning Your potential, possible or actual participation in, or support for, any Potential or Actual Innkeepers Deal or any sale or transfer of all or any portion of the Debtors or their assets. Response to Request No. 19. Subject to and without waiving its General Production Objections, Lehman asserts the following specific objections and responses. Lehman specifically objects to this Request to the extent it seeks impermissible discovery of internal documents and any documents internal to Lehman do not bear in any way to the Debtors exercise of their business judgment with respect to the relief sought in the Bidding Procedures Motion. Furthermore, any evidence of internal Lehman matters is confidential and potentially privileged information regarding Lehmans internal decision-making process and is completely irrelevant to the Debtors exercise of their business judgment with respect to the relief sought in the Bidding Procedures Motion.

27

Lehman further objects to this Request as vague, overbroad and unduly burdensome to the extent it seeks discovery of issues Appaloosa can obtain directly from the Debtors. Lehman should not be required to produce any discovery unless and until Appaloosa can demonstrate that it could not obtain such information directly from the Debtors. Finally, Lehman objects to this Request as vague, overbroad and unduly burdensome to the extent it seeks the production of all documents concerning Lehmans potential, possible or actual participation in, or support for, any Potential or Actual Innkeepers Deal or any sale or transfer of all or any portion of the Debtors or their assets. Lehman submits there are more efficient and less burdensome discovery methods for Appaloosa to obtain relevant documents than seeking all documents related to such topics. Lehman will not produce documents in response to this Request. Request No. 20. All documents concerning loans that You will be making and any aspect of financial participation or financial remuneration to be received by You as part of the transactions contemplated by the Motion. Response to Request No. 20. Subject to and without waiving its General Production Objections, Lehman asserts the following specific objections and responses. Lehman specifically objects to this Request to the extent it seeks impermissible discovery of internal documents and any documents internal to Lehman do not bear in any way to the Debtors exercise of their business judgment with respect to the relief sought in the Bidding Procedures Motion. Furthermore, any evidence of internal Lehman matters is confidential and potentially privileged information regarding Lehmans internal decision-making process and is completely irrelevant to the Debtors exercise of their business judgment with respect to the relief sought in the Bidding Procedures Motion. Lehman

28

further responds that Appaloosa already has the Bidding Procedures Motion in its possession, which is the only relevant document to this Request. Any additional documents are irrelevant to the contested matters involving the Bidding Procedures Motion. Lehman further objects to this Request as vague, overbroad and unduly burdensome to the extent it seeks discovery of issues Appaloosa can obtain directly from the Debtors. Lehman should not be required to produce any discovery unless and until Appaloosa can demonstrate that it could not obtain such information directly from the Debtors. Finally, Lehman objects to this Request as vague, overbroad and unduly burdensome to the extent it seeks the production of all documents concerning loans that Lehman will be making and any aspect of financial participation or financial remuneration to be received by Lehman as part of the transactions contemplated by the Bidding Procedures Motion. Lehman submits there are more efficient and less burdensome discovery methods for Appaloosa to obtain relevant documents than seeking all documents related to such topics. Lehman will not produce documents in response to this Request. Request No. 21. All documents relied upon by any expert you intend to call as a witness to testify at the hearing concerning the Motion. Response to Request No. 21. Subject to and without waiving its General Production Objections, Lehman asserts the following specific objections and responses. Lehman does not intend to call any expert as a witness to testify at the hearing concerning the Bidding Procedures Motion. Accordingly, Lehman has no documents responsive to this Request. Request No. 22. All documents provided in response to any other discovery demand in this action.

29

Response to Request No. 22. Subject to and without waiving its General Production Objections, Lehman asserts the following specific objections and responses. Lehman specifically objects to this Request as overly broad. Internal documents by Lehman and documents with third parties who are nondebtors to these Chapter 11 Cases do not bear in any way to the Debtors reasonable exercise of business judgment. Any additional documents are irrelevant to the contested matters involving the Bidding Procedures Motion. Lehman further objects to this Request as vague, overbroad and unduly burdensome to the extent it seeks the production of all documents provided in response to any other discovery demand in this action. Lehman submits that there are more efficient and less burdensome discovery methods for Appaloosa to obtain relevant documents than seeking all documents related to such topics. Subject to and without waiving these objections, and to the General Request Objections above, Lehman will produce non-privileged documents and communications between Lehman and its representatives and the Debtors and their representatives provided in response to any other discovery demand in this action.

30

Dated: New York, New York February 4, 2011

DECHERT LLP

By:/s/ Kevin J. OBrien Michael J. Sage Kevin J. OBrien Brian E. Greer 1095 Avenue of the Americas New York, New York 10036 Telephone: (212) 698-3500 Facsimile: (212) 698-3599
16226810

31

EXHIBIT B

David M. Friedman Howard W. Schub Adam L. Shiff KASOWITZ, BENSON, TORRES & FRIEDMAN LLP 1633 Broadway New York, New York 10019 Telephone: (212) 506-1700 Facsimile: (212) 506-1800 Counsel to Five Mile Capital II Pooling REIT LLC and Five Mile Capital Partners LLC UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF NEW YORK

In re: INNKEEPERS USA TRUST, et al., Debtors.

Chapter 11 Case No. 10-13800 (SCC) (Jointly Administered)

FIVE MILE CAPITAL II POOLING REIT LLCS AND FIVE MILE CAPITAL PARTNERS LLCS RESPONSES AND OBJECTIONS TO FIRST SET OF DOCUMENT REQUESTS SERVED BY APPALOOSA INVESTMENT LP I, PALOMINO FUND LTD., THOROUGHBRED FUND LP, AND THOROUGHBRED MASTER LTD. Five Mile Capital II Pooling REIT LLC and Five Mile Capital Partners LLC (collectively, Five Mile), by and through by their undersigned counsel, hereby respond to the first set of document requests (the Requests) to Five Mile served by Appaloosa Investment LP I, Palomino Fund Ltd., Thoroughbred Fund LP, and Thoroughbred Master Ltd. (collectively, Appaloosa). GENERAL OBJECTIONS 1. Five Mile objects to each and every Request to the extent that it (a) is improper,

overly broad as to time or content, vague, unduly burdensome or oppressive, unreasonably

cumulative and duplicative; or (b) seeks information that is not reasonably calculated to lead to the discovery of admissible evidence. 2. Five Mile objects to each and every Request to the extent that it contains

terminology that is vague, ambiguous, not reasonably particular or colloquial, insofar as such terminology does not permit Five Mile to ascertain the content of the Request, rendering such request unduly burdensome and not reasonably calculated to lead to the discovery of admissible evidence. Nonetheless, Five Mile will make a good faith effort to interpret and respond to the Requests subject to the limitations stated herein. 3. Five Mile objects to the Requests to the extent they seek information protected

from discovery by the attorney-client privilege, the work product doctrine, any common interest privilege, or otherwise would cause Five Mile to divulge trade secrets or other proprietary information. If Five Mile produces any privileged or protected materials or information, it is inadvertent and shall not constitute a waiver of any privilege or protection that applies to the materials or information, and any such document will be subject to return on demand. Five Mile demands that Appaloosa, its agents, or attorneys notify Five Mile of the production of any such documents promptly upon discovery of any such documents. 5. Five Mile objects to each and every Definition and Instruction in the Requests to

the extent that it would impose on Five Mile obligations beyond those imposed by applicable provisions of the Federal Rules of Civil Procedure, the Federal Rules of Bankruptcy Procedure, the Local Bankruptcy Rules, the Rules of this Court, or the case law interpreting them. 6. The General Objections set forth herein shall be considered as made, to the extent

applicable, in response to each and every enumerated Request as if the General Objections were fully set forth in each such response.

7.

Nothing contained in any response to any Request shall be deemed to be an

admission, concession or waiver by Five Mile with respect to the validity of any claim or defense asserted by Appaloosa. 8. Five Miles responses and objections to the Requests are not intended to be, and

shall not be construed as, an agreement or concurrence by Five Mile with Appaloosas characterization of any facts, circumstances, and/or legal rights, duties, or obligations. Five Mile also reserves the right to contest any such characterization as inaccurate. Five Mile also objects to the Requests to the extent that they contain express or implied assumptions of fact or law with respect to matters at issue in this case. 9. To the extent applicable, in its response to each Request, Five Mile incorporates

by reference each of its objections set forth in each of the other responses. 10. Five Mile does not concede that any of its responses to the Requests are or will be

admissible evidence at a trial of this action, and Five Mile does not waive any objection, on any ground, whether or not asserted herein, to the use of any such response at trial. 11. Five Mile reserves all rights as to the relevance or admissibility of any

information or documents produced in response to the Requests and of any information contained therein in any other litigation now or in the future. The supplying of any document or information contained herein does not constitute an admission by Five Mile that such document or information is relevant or admissible in any other litigation. Five Mile also reserves the right to object on any ground to the use of the information produced hereunder or the subject matter thereof at any trial or hearing or in any action or proceeding. 12. Five Mile objects to the Requests to the extent that they purport to require Five

Mile to produce information or documents outside its possession, custody or control, or in

Appaloosas possession, custody or control or information or documents that are publicly available. 13. Five Miles agreement to respond to a particular Request indicates that Five Mile

will produce information and documents in its possession, custody or control that are responsive to the particular Request, subject to Five Miles General Objections and the Specific Objections set forth below. Five Miles agreement to produce discovery responsive to a particular Request should not be construed to mean that it has any responsive documents or will produce all documents requested. SPECIFIC OBJECTIONS AND RESPONSES TO REQUESTS Subject to and without waiving the foregoing General Objections, which are incorporated herein by reference as if fully set forth in each response, Five Mile objects and responds to the Requests as follows: Request No. 1 Regardless of date, all documents previously produced by or to You in connection with the Motion to Assume the Plan Support Agreement. Response to Request No. 1 Five Mile objects to this Request on the grounds set forth in the General Objections. Five Mile further objects to this Request because documents concerning the Motion to Assume the Plan Support Agreement are irrelevant to the issues raised by 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 (the Debtors Motion) and are not likely to lead to the discovery of admissible evidence. Subject to and without waiving any of the foregoing objections, Five Mile will produce responsive, non-privileged documents that are responsive to this Request that are identified after a reasonably diligent search. Request No. 2 All documents concerning any Potential or Actual Innkeepers Deal and any negotiation of any Potential or Actual Innkeepers Deal. Response to Request No. 2 Five Mile objects to this Request on the grounds set forth in the General Objections. Five Mile further objects to this Request on the grounds that the term Potential or Actual Innkeepers Deal is vague and ambiguous. Five Mile further objects to this Request to the extent the Request concerns deals in which Five Mile did not participate or consider participating. Five Mile further objects to this Request because a request for documents concerning any Potential or Actual Innkeepers Deal and any negotiation of any Potential or Actual Innkeepers Deal is properly addressed to the Debtors. Five Mile further objects to this Request to the extent that this Request seeks confidential proprietary information and/or trade secrets. Subject to and without waiving any of the foregoing objections, Five Mile will produce responsive, non-privileged documents that are responsive to this Request that are identified after a reasonably diligent search. Request No. 3 All documents concerning the proposed treatment under the transactions contemplated by

the Motion of each category of claims referenced in the chart on pages 35 through 38 of the Motion, including, without limitation, any discussion, analysis, negotiation or consideration of any proposed treatment of any of the categories of claims referenced in the chart on pages 35 through 38 of the Motion. Response to Request No. 3 Five Mile objects to this Request on the grounds set forth in the General Objections. Five Mile further objects to this Request because documents concerning Five Miles analysis of the proposed treatment of the claims are irrelevant to the issues raised by the Debtors Motion and are not likely to lead to the discovery of admissible evidence. Five Mile further objects to this Request because a request concerning provisions of the Debtors Motion is properly addressed to the Debtors. Five Mile further objects to this Request to the extent that this Request seeks confidential proprietary information and/or trade secrets. Subject to and without waiving any of the foregoing objections, Five Mile will produce responsive, non-privileged documents that are responsive to this Request that are identified after a reasonably diligent search. Request No. 4 All communications between You and any other person concerning any Potential or Actual Innkeepers Deal, including, without limitation, the Debtors, Lehman, LNR, Midland, Apollo and any advisor to You or any other Person, including, without limitation, Moelis and FTI Consulting. Response to Request No. 4 Five Mile objects to this Request on the grounds that it is redundant. See Response to Request No. 2.

Request No. 5 All documents concerning any potential or actual marketing of any Potential or Actual Innkeepers Deal. Response to Request No. 5 Five Mile objects to this Request on the grounds that it is redundant. See Response to Request No. 2. Request No. 6 All documents concerning any discussion, consideration, analysis, or negotiation concerning whether and to what extent Debtors will consider and/or accept, or have considered and/or accepted, enterprise proposals for the Debtors and/or proposals based upon a particular asset or group of assets of the Debtors. Response to Request No. 6 Five Mile objects to this Request on the grounds set forth in the General Objections. Five Mile further objects to this Request because a request for documents concerning any discussion, consideration, analysis, or negotiation concerning whether and to what extent Debtors will consider and/or accept, or have considered and/or accepted, enterprise proposals for the Debtors and/or proposals based upon a particular asset or group of assets of the Debtors is properly addressed to the Debtors. Five Mile further objects to this Request to the extent that this Request seeks confidential proprietary information and/or trade secrets. Subject to and without waiving any of the foregoing objections, Five Mile will produce responsive, non-privileged documents that are responsive to this Request that are identified after a reasonably diligent search.

Request No. 7 All documents concerning any bidding procedures considered, analyzed, negotiated, or discussed concerning any Potential or Actual Innkeepers Deal. Response to Request No. 7 Five Mile objects to this Request on the grounds that it is redundant. See Response to Request No. 2. Request No. 8 All documents concerning any payments or other consideration to be provided to or by any Person as part of any Potential or Actual Innkeepers Deal, including without limitation, the $2.5 million payment to Midland described in the Motion and any release that would be given to or by any person as part of any Potential or Actual Innkeepers Deal. Response to Request No. 8 Five Mile objects to this Request on the grounds that it is redundant. See Response to Request No. 2. Request No. 9 All documents concerning any financial plans, valuations, appraisals, forecasts, projections, or financial analyses concerning all or any part of the Debtors or their assets or any Potential or Actual Innkeepers Deal. Response to Request No. 9 Five Mile objects to this Request on the grounds that it is redundant. See Response to Request No. 2. Request No. 10 All documents concerning the proposed increase in the expense reserve from $4.5 million

to $18.5 million, including, without limitation, all documents concerning the source of the proposed additional amount and all documents concerning the manner in which the proposed expense reserve may be or could be used. Response to Request No. 10 Five Mile objects to this Request on the grounds set forth in the General Objections. Subject to and without waiving any of the foregoing objections, Five Mile will produce responsive, non-privileged documents that are responsive to this Request that are identified after a reasonably diligent search. Request No. 11 All communications concerning any potential or actual agreement, understanding or arrangement with Midland or any certificate holder concerning any Potential or Actual Innkeepers Deal. Response to Request No. 11 Five Mile objects to this Request on the grounds that it is redundant. See Response to Request No. 2. Request No. 12 All documents concerning any preliminary, draft or final valuation of the Fixed Rate Mortgage Portfolio. Response to Request No. 12 Five Mile objects to this Request on the grounds set forth in the General Objections. Five Mile further objects to this Request because any documents concerning valuation by Five Mile of the Fixed Rate Mortgage Portfolio are irrelevant to the issues raised by the Debtors Motion and are not likely to lead to the discovery of admissible evidence. Five Mile further objects to this

Request to the extent that this Request seeks confidential proprietary information and/or trade secrets. Subject to and without waiving any of the foregoing objections, Five Mile will produce responsive, non-privileged documents that are responsive to this Request that are identified after a reasonably diligent search. Request No. 13 All documents concerning any preliminary, draft or final valuation of the Floating Rate Mortgage Portfolio. Response to Request No. 13 Five Mile objects to this Request on the grounds set forth in the General Objections. Five Mile further objects to this Request because documents concerning any valuation by Five Mile of the Floating Rate Mortgage Portfolio are irrelevant to the issues raised by the Debtors Motion and are not likely to lead to the discovery of admissible evidence. Five Mile further objects to this Request to the extent that this Request seeks confidential proprietary information and/or trade secrets. Subject to and without waiving any of the foregoing objections, Five Mile will produce responsive, non-privileged documents that are responsive to this Request that are identified after a reasonably diligent search. Request No. 14 All documents concerning the negotiation of any agreements between You and Midland. Response to Request No. 14 Five Mile objects to this Request on the grounds set forth in the General Objections. Five Mile further objects to this Request on the grounds that the term any agreements is vague and

10

ambiguous. Five Mile further objects to this Request to the extent the Request concerns deals in which Five Mile did not participate or consider participating. Five Mile further objects to this Request because documents concerning the negotiation of any agreements between Five Mile and Midland are irrelevant to the issues raised by the Debtors Motion and are not likely to lead to the discovery of admissible evidence. Subject to and without waiving any of the foregoing objections, Five Mile will produce responsive, non-privileged documents that are responsive to this Request that are identified after a reasonably diligent search. Request No. 15 All documents concerning the Apollo Guaranty, including, without limitation, any valuations, analyses or discussion of the Apollo Guaranty and all documents concerning any potential settlement of the Apollo Action, and the negotiation and thereof and the reasons therefor. This Request calls the production of all responsive documents from the June 29, 2007 date of the Apollo Guaranty to the date of production. Response to Request No. 15 Five Mile objects to this Request on the grounds set forth in the General Objections. Five Mile further objects to this Request because documents concerning valuations, analyses or discussions of the Apollo Guaranty are irrelevant to the issues raised by the Debtors Motion and are not likely to lead to the discovery of admissible evidence. Five Mile further objects to this Request to the extent that this Request seeks confidential proprietary information and/or trade secrets. Subject to and without waiving any of the foregoing objections, Five Mile will produce responsive, non-privileged documents that are responsive to this Request that are identified after

11

a reasonably diligent search. Request No. 16 All documents concerning whether under any Potential or Actual Innkeepers Deal, funds generated from the Fixed Rate Mortgage Portfolio could be used for any purpose other than for the direct benefit of the Fixed Rate Mortgage Portfolio. Response to Request No. 16 Five Mile objects to this Request on the grounds set forth in the General Objections. Five Mile further objects to this Request on the grounds that the term Potential or Actual Innkeepers Deal is vague and ambiguous. Five Mile further objects to this Request to the extent the Request concerns deals in which Five Mile did not participate or consider participating. Five Mile further objects to this Request because documents concerning whether under any Potential or Actual Innkeepers Deal, funds generated from the Fixed Rate Mortgage Portfolio could be used for any purpose other than for the direct benefit of the Fixed Rate Mortgage Portfolio are irrelevant to the issues raised by the Debtors Motion and are not likely to lead to the discovery of admissible evidence. Subject to and without waiving any of the foregoing objections, Five Mile will produce responsive, non-privileged documents that are responsive to this Request that are identified after a reasonably diligent search. Request No. 17 All documents concerning the Mandatory Lehman Payment, and the negotiation thereof. Response to Request No. 17 Five Mile objects to this Request on the grounds set forth in the General Objections. Five Mile further objects to this Request because the definition of Mandatory Lehman Payment

12

contained in these Requests is inaccurate and misleading. Subject to and without waiving any of the foregoing objections, Five Mile will produce responsive, non-privileged documents that are responsive to this Request that are identified after a reasonably diligent search. Request No. 18 All documents concerning any loans to be made by You and all payments to be received by You under any Potential or Actual Innkeepers Deal. Response to Request No. 18 Five Mile objects to this Request on the grounds set forth in the General Objections. Five Mile further objects to this Request on the grounds that the term Potential or Actual Innkeepers Deal is vague and ambiguous. Five Mile further objects to this Request to the extent the Request concerns deals in which Five Mile did not participate or consider participating. Five Mile further objects to this Request because documents concerning loans made or payments received by Five Mile under any Potential or Actual Innkeepers Deal, other than the bid set forth in the Debtors Motion, are irrelevant to the issues raised by the Debtors Motion and are not likely to lead to the discovery of admissible evidence. Subject to and without waiving any of the foregoing objections, Five Mile will produce responsive, non-privileged documents that are responsive to this Request that are identified after a reasonably diligent search. Request No. 19 All documents concerning any communications with any possible, potential or actual purchaser or bidder for all or any portion of the Debtors or their assets, and any persons evaluation, discussion, response or negotiation with respect to such potential or actual proposal

13

or bid. Response to Request No. 19 Five Mile objects to this Request on the grounds set forth in the General Objections. Five Mile further objects to this Request because documents concerning communications by Five Mile with any possible, potential or actual purchaser or bidder for all or any portion of the Debtors or their assets are irrelevant to the issues raised by the Debtors Motion and are not likely to lead to the discovery of admissible evidence. Five Mile further objects to this Request because a request for documents concerning communications with any possible, potential or actual purchaser or bidder for all or any portion of the Debtors or their assets is properly addressed to the Debtors. Five Mile further objects to this Request to the extent that this Request seeks confidential proprietary information and/or trade secrets. Subject to and without waiving any of the foregoing objections, Five Mile will produce responsive, non-privileged documents that are responsive to this Request that are identified after a reasonably diligent search. Request No. 20 All documents concerning the Midland Payments, including, without limitation, all documents concerning the analysis, discussion, consideration and negotiation of the Midland Payments. Response to Request No. 20 Five Mile objects to this Request on the grounds set forth in the General Objections. Five Mile further objects to this Request to the extent that this Request seeks confidential proprietary information and/or trade secrets. Subject to and without waiving any of the foregoing objections, Five Mile will produce

14

responsive, non-privileged documents that are responsive to this Request that are identified after a reasonably diligent search. Request No. 21 All documents concerning any consideration, analysis, discussion, or negotiation of the transactions contemplated by the Motion. Response to Request No. 21 Five Mile objects to this Request on the grounds set forth in the General Objections. Five Mile further objects to this Request to the extent that this Request seeks confidential proprietary information and/or trade secrets. Five Mile further objects to this Request because documents concerning Five Miles internal valuations are irrelevant to the issues raised by the Debtors Motion and are not likely to lead to the discovery of admissible evidence. Subject to and without waiving any of the foregoing objections, Five Mile will produce responsive, non-privileged documents that are responsive to this Request that are identified after a reasonably diligent search. Request No. 22 All documents concerning any threatened or potential termination by You of Midland as special servicer for the Fixed Rate Mortgage Portfolio. Response to Request No. 22 Five Mile objects to this Request on the grounds set forth in the General Objections. Five Mile further objects to this Request because documents concerning any threatened or potential termination by Five Mile of Midland as special servicer for the Fixed Rate Mortgage Portfolio are irrelevant to the issues raised by the Debtors Motion and are not likely to lead to the discovery of admissible evidence.

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Subject to and without waiving any of the foregoing objections, Five Mile will produce responsive, non-privileged documents that are responsive to this Request that are identified after a reasonably diligent search. Request No. 23 All documents concerning any potential or actual instruction from You to Midland concerning any Potential or Actual Innkeepers Deal. Response to Request No. 23 Five Mile objects to this Request on the grounds that it is redundant. See Response to Request No. 2. Request No. 24 Regardless of date, all documents concerning Your potential, possible or actual participation in or support for, any Potential or Actual Innkeepers Deal or any sale or transfer of all or any portion of the Debtors or their assets. Response to Request No. 24 Five Mile objects to this Request on the grounds that it is redundant. See Response to Request No. 2. Request No. 25 All documents concerning communications with FTI Consulting or any other financial advisor concerning any valuation of the Debtors or their assets and all documents concerning communications with FTI Consulting or any other financial advisor concerning any Potential or Actual Innkeepers Deal. Response to Request No. 25 Five Mile objects to this Request on the grounds set forth in the General Objections. Five

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Mile further objects to this Request on the grounds that the term Potential or Actual Innkeepers Deal is vague and ambiguous. Five Mile further objects to this Request to the extent the Request concerns deals in which Five Mile did not participate or consider participating. Five Mile further objects to this Request because documents concerning Five Miles communications with FTI Consulting or any other financial advisor concerning any valuation of the Debtors or their assets and all documents concerning Five Miles communications with FTI Consulting or any other financial advisor concerning any Potential or Actual Innkeepers Deal are irrelevant to the issues raised by the Debtors Motion and are not likely to lead to the discovery of admissible evidence. Five Mile further objects to this Request to the extent that this Request seeks confidential proprietary information and/or trade secrets. Subject to and without waiving any of the foregoing objections, Five Mile will produce responsive, non-privileged documents that are responsive to this Request that are identified after a reasonably diligent search. Request No. 26 All documents concerning loans that You will or may be making and any aspect of financial participation or financial remuneration to be received to You as part of the transactions contemplated by the Motion. Response to Request No. 26 Five Mile objects to this Request on the grounds set forth in the General Objections. Five Mile further objects to this Request to the extent that this Request seeks confidential proprietary information and/or trade secrets. Five Mile further objects to this Request because documents concerning Five Miles internal valuations are irrelevant to the issues raised by the Debtors Motion and are not likely to lead to the discovery of admissible evidence.

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Subject to and without waiving any of the foregoing objections, Five Mile will produce responsive, non-privileged documents that are responsive to this Request that are identified after a reasonably diligent search. Request No. 27 All documents relied upon by an expert you intend to call as a witness to testify at the hearing concerning the Motion. Response to Request No. 27 Five Mile objects to this Request on the grounds set forth in the General Objections. Subject to and without waiving any of the foregoing objections, Five Mile will produce responsive, non-privileged documents that are responsive to this Request that are identified after a reasonably diligent search. Request No. 28 All documents provided in response to any other discovery demand in this action. Response to Request No. 28 Five Mile objects to this Request on the grounds set forth in the General Objections. Subject to and without waiving any of the foregoing objections, Five Mile will produce responsive, non-privileged documents that are responsive to this Request that are identified after a reasonably diligent search.

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Dated: February 4, 2011 New York, New York KASOWITZ, BENSON, TORRES & FRIEDMAN LLP By: /s/ Howard W. Schub David M. Friedman Howard W. Schub Adam L. Shiff 1633 Broadway New York, New York 10019 Telephone: (212) 506-1700 Facsimile: (212) 506-1800

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EXHIBIT C

Alan W. Kornberg Andrew J. Ehrlich PAUL, WEISS, RIFKIND, WHARTON & GARRISON LLP 1285 Avenue of the Americas New York, NY 10019-6064 Tel. (212) 373-3000 Fax (212) 757-3990 akornberg@paulweiss.com aehrlich@paulweiss.com Attorneys for Apollo Investment Corporation UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF NEW YORK In re: INNKEEPERS USA TRUST, et al., Debtors. Chapter 11 Case No. 10-13800 (SCC) Jointly Administered

RESPONSES AND OBJECTIONS OF APOLLO INVESTMENT CORPORATION TO THE FIRST SET OF DOCUMENTS REQUESTS OF APPALOOSA INVESTMENT L.P., PALOMINO FUND, LTD., THOROUGHBRED FUND L.P., AND THOROUGHBRED MASTER LTD. Apollo Investment Corporation (AIC), by and through its counsel, hereby objects and responds to the First Set of Document Requests (the Requests) of Appaloosa Investment L.P., Palomino Fund Ltd., Thoroughbred Fund L.P., and Thoroughbred Master Ltd. (collectively, Appaloosa) in connection with the abovereferenced action. I. GENERAL OBJECTIONS AIC hereby incorporates into each of its Specific Objections and Responses each of the following General Objections: 1. AIC objects to the Requests to the extent that they are unduly

burdensome, overbroad, oppressive and to the extent that they are not relevant to 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 (the Bidding Procedures Motion or the Motion), or are not reasonably calculated to lead to the discovery of admissible evidence or to the discovery of information relating to the current stalking horse proposal or Bidding Procedures Motion. 2. AIC objects to the Requests to the extent that they call for

production of records or information before September 1, 2010 or after January 14, 2011. Until the previous Plan Support Agreement was rejected on September 1, 2010, Innkeepers USA Trust (Innkeepers or the Debtor) had no need of a stalking horse bid and, therefore, there is no reasonable possibility that documents relevant to the stalking horse bid or the Bidding Procedures Motion could exist before that date. Thus, except as otherwise indicated in specific responses and objections below, AIC will not produce such documents. 3. AIC objects to the Requests to the extent that they call for the

production of all or any documents pertaining to a subject, on the grounds that such language is overly broad and unduly burdensome. Compliance with such Requests

would be oppressive and such oppression grossly outweighs any possible probative value of the documents requested. To the extent that AIC agrees to conduct reasonable

searches for documents, it will search only those files in the possession, custody, or 2

control, of AIC employees or former employees known or reasonably believed to be personally involved in, or knowledgeable about, the subject matter of the Requests and where there is a reasonable likelihood non-privileged documents may be located. By agreeing to conduct such a search, AIC does not represent that any or all documents responsive to any particular Request will be produced. 4. AIC objects to the Requests to the extent they call for information

and materials more readily available to the Debtors or another party. 5. AIC objects to the Requests to the extent they impose obligations

on AIC greater than those imposed by the Federal Rules of Bankruptcy Procedure, the Federal Rules of Civil Procedure, or Judge Chapmans January 19, 2011 order allowing limited discovery into issues relating to the Bidding Procedures Motion in advance of the Courts March 8, 2011 hearing on the same. 6. AIC objects to the Requests to the extent that they seek disclosure

of confidential information, including any information subject to any confidentiality agreement, order, or obligation. AIC will produce responsive, non-privileged documents containing such confidential information only pursuant to the Stipulated Protective Order entered in this matter on August 16, 2010 and as it may be supplemented. 7. AIC objects to the Requests to the extent they call for the

disclosure of information revealing the identities of anonymous bidders or the terms of bids submitted to Innkeepers, without making any provision for making these highly sensitive documents available for exclusive review by attorneys. AIC will withhold documents containing this information until the Court resolves the pending issue of 3

whether the Stipulated Protective Order will be supplemented to include a provision for documents marked for attorney review only. 8. AIC objects to the Requests to the extent they call for the

disclosure of information protected by virtue of the attorney-client privilege, the work product doctrine, joint or common defense privileges, or any other applicable privileges or protections. By responding to these Requests, AIC does not waive, and intends to preserve, all applicable privileges and protections. AIC states that the inadvertent

disclosure of any information by AIC covered by any privilege or protection shall not be construed as a waiver by AIC of any such applicable privileges and protections. 9. AIC objects to the Requests to the extent they seek information or

materials not within AICs possession, custody, or control. 10. AIC reserves the right to amend, modify, supplement or correct the

objections and responses contained herein. 11. AIC reserves the right to object to the use of any responses herein

in any subsequent proceeding. To the extent that AIC responds to the Requests, AIC does not concede that information requested is relevant, material, or admissible. 12. AIC reserves all of its rights to contest Apaloosas standing to

serve these requests and participate in discovery in this matter. II. SPECIFIC OBJECTIONS AND RESPONSES

REQUEST NO. 1: Regardless of date, all documents previously produced by or to You in connection with the Motion to Assume the Plan Support Agreement. RESPONSE TO REQUEST NO. 1: Subject to and without waiver of the objections set forth above, AIC agrees to produce all documents previously produced by AIC in connection with the Motion to Assume the Plan Support Agreement.

REQUEST NO. 2: All documents concerning any Potential or Actual Innkeepers Deal and any negotiation of any Potential or Actual Innkeepers Deal. RESPONSE TO REQUEST NO. 2: Subject to and without waiver of the objections set forth above, AIC will produce all non-privileged documents in its possession, custody and control responsive to the request.

REQUEST NO. 3: All documents concerning the proposed treatment under the transactions contemplated by the Motion of each category of claims referenced in the chart on pages 35 through 38 of the Motion, including, without limitation, any discussion, analysis, negotiation or consideration of any proposed treatment of any of the categories of claims referenced in the chart on pages 35 through 38 of the Motion. RESPONSE TO REQUEST NO. 3: Subject to and without waiver of the objections set forth above, AIC will produce all non-privileged documents in its possession, custody and control responsive to the request.

REQUEST NO. 4: All communications between You and any other person concerning any Potential or Actual Innkeepers Deal, including, without limitation, the Debtors, Lehman, LNR, Midland, Five Mile, and any advisor to You or any other Person, including, without limitation, Moelis and FTI Consulting. RESPONSE TO REQUEST NO. 4: Subject to and without waiver of the objections set forth above, AIC will produce all non-privileged documents in its possession, custody and control responsive to the request.

REQUEST NO. 5: All documents concerning any potential or actual marketing of any Potential or Actual Innkeepers Deal. RESPONSE TO REQUEST NO. 5: Subject to and without waiver of the objections set forth above, AIC will produce all non-privileged documents in its possession, custody and control responsive to the request.

REQUEST NO. 6: All documents concerning any discussion, consideration, analysis, or negotiation concerning whether and to what extent Debtors will consider and/or accept, or have considered and/or accepted, enterprise proposals for the Debtors and/or proposals based upon a particular asset or group of assets of the Debtors. RESPONSE TO REQUEST NO. 6: Subject to and without waiver of the objections set forth above, AIC will produce all non-privileged documents in its possession, custody and control responsive to the request.

REQUEST NO. 7: All documents concerning any bidding procedures considered, analyzed, negotiated, or discussed concerning any Potential or Actual Innkeepers Deal. RESPONSE TO REQUEST NO. 7: Subject to and without waiver of the objections set forth above, AIC will produce all non-privileged documents in its possession, custody and control responsive to the request. REQUEST NO. 8: All documents concerning any payments or other consideration to be provided to or by any Person as part of any Potential or Actual Innkeepers Deal, including, without limitation, the $2.5 million payment to Midland described in the Motion and any release that would be given to or by any person as part of any Potential or Actual Innkeepers Deal. RESPONSE TO REQUEST NO. 8: Subject to and without waiver of the objections set forth above, AIC will produce all non-privileged documents in its possession, custody and control responsive to the request.

REQUEST NO. 9: All documents concerning any financial plans, valuations, appraisals, forecasts, projections, or financial analyses concerning all or any part of the Debtors or their assets or any Potential or Actual Innkeepers Deal. RESPONSE TO REQUEST NO. 9: Subject to and without waiver of the objections set forth above, AIC will produce all non-privileged documents in its possession, custody and control pertaining to the

development of the current stalking horse proposal and the Bidding Procedures Motion, and events leading up to the filing of the Bidding Procedures Motion.

REQUEST NO. 10: All documents concerning the proposed increase in the expense reserve from $4.5 million to $18.5 million, including, without limitation, all documents concerning the source of the proposed additional amount and all documents concerning the manner in which the proposed expense reserve may be or could be used. RESPONSE TO REQUEST NO. 10: Subject to and without waiver of the objections set forth above, AIC will produce all non-privileged documents in its possession, custody and control pertaining to the development of the current stalking horse proposal and the Bidding Procedures Motion, and events leading up to the filing of the Bidding Procedures Motion.

REQUEST NO. 11: All communications concerning any potential or actual agreement, understanding or arrangement with Midland or any certificate holder concerning any Potential or Actual Innkeepers Deal. RESPONSE TO REQUEST NO. 11: Subject to and without waiver of the objections set forth above, AIC will produce all non-privileged documents in its possession, custody and control responsive to the request.

REQUEST NO. 12: All documents concerning any preliminary, draft or final valuation of the Fixed Rate Mortgage Portfolio.

RESPONSE TO REQUEST NO. 12: Subject to and without waiver of the objections set forth above, AIC will produce all non-privileged documents in its possession, custody and control pertaining to the development of the current stalking horse proposal and the Bidding Procedures Motion, and events leading up to the filing of the Bidding Procedures Motion.

REQUEST NO. 13: All documents concerning any preliminary, draft or final valuation of the Floating Rate Mortgage Portfolio. RESPONSE TO REQUEST NO. 13: Subject to and without waiver of the objections set forth above, AIC will produce all non-privileged documents in its possession, custody and control pertaining to the development of the current stalking horse proposal and the Bidding Procedures Motion, and events leading up to the filing of the Bidding Procedures Motion.

REQUEST NO. 14: All documents concerning the Apollo Action and the Apollo Guaranty, including, without limitation, any valuations, analyses or discussion of the Apollo Guaranty and all documents concerning any potential settlement of the Apollo Action, and the negotiation thereof and the reasons therefore. This Request calls the production of all responsive documents from the June 29, 2007 date of the Apollo Guaranty to the date of production. RESPONSE TO REQUEST NO. 14: Subject to and without waiver of the objections set forth above, AIC will produce all non-privileged documents in its possession, custody and control pertaining to the development of the current stalking horse proposal and the Bidding Procedures Motion, and events leading up to the filing of the Bidding Procedures Motion.

REQUEST NO. 15: All documents concerning whether under any Potential or Actual Innkeepers Deal, funds generated from the Fixed Rate Mortgage Portfolio could be used for any purpose other than for the direct benefit of the Fixed Rate Mortgage Portfolio. RESPONSE TO REQUEST NO. 15: Subject to and without waiver of the objections set forth above, AIC will produce all non-privileged documents in its possession, custody and control pertaining to the development of the current stalking horse proposal and the Bidding Procedures Motion, and events leading up to the filing of the Bidding Procedures Motion.

REQUEST NO. 16: All documents concerning the Mandatory Lehman Payment, and the negotiation thereof. RESPONSE TO REQUEST NO. 16: Subject to and without waiver of the objections set forth above, AIC will produce all non-privileged documents in its possession, custody and control responsive to the request.

REQUEST NO. 17: All documents concerning any loans to be made by You and all payments to be received by You under any Potential or Actual Innkeepers Deal. RESPONSE TO REQUEST NO. 17: Subject to and without waiver of the objections set forth above, AIC will produce all non-privileged documents in its possession, custody and control responsive to the request. 10

REQUEST NO. 18: All documents concerning any communications with any possible, potential or actual purchaser or bidder for all or any portion of the Debtors or their assets, and any persons evaluation, discussion, response or negotiation with respect to such potential or actual proposal or bid. RESPONSE TO REQUEST NO. 18: Subject to and without waiver of the objections set forth above, AIC will produce all non-privileged documents in its possession, custody and control responsive to the request.

REQUEST NO. 19: All documents concerning the Midland Payments, including, without limitation, all documents concerning the analysis, discussion, consideration and negotiation of the Midland Payments. RESPONSE TO REQUEST NO. 19: Subject to and without waiver of the objections set forth above, AIC will produce all non-privileged documents in its possession, custody and control responsive to the request.

REQUEST NO. 20: All documents concerning any consideration, analysis, discussion, or negotiation of the transactions contemplated by the Motion. RESPONSE TO REQUEST NO. 20: Subject to and without waiver of the objections set forth above, AIC will produce all non-privileged documents in its possession, custody and control responsive to the request. 11

REQUEST NO. 21: All documents concerning any threatened or potential termination of Midland as special servicer for the Fixed Rate Mortgage Portfolio. RESPONSE TO REQUEST NO. 21: Subject to and without waiver of the objections set forth above, AIC will produce all non-privileged documents in its possession, custody and control pertaining to the development of the current stalking horse proposal and the Bidding Procedures Motion, and events leading up to the filing of the Bidding Procedures Motion.

REQUEST NO. 22: Regardless of date, all documents concerning Your potential, possible or actual participation in or support for, any Potential or Actual Innkeepers Deal or any sale or transfer of all or any portion of the Debtors or their assets. RESPONSE TO REQUEST NO. 22: Subject to and without waiver of the objections set forth above, AIC will produce all non-privileged documents in its possession, custody and control responsive to the request.

REQUEST NO. 23: All documents concerning communications with FTI Consulting or any other financial advisor concerning any valuation of the Debtors or their assets and all documents concerning communications with FTI Consulting or any other financial advisor concerning any Potential or Actual Innkeepers Deal.

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RESPONSE TO REQUEST NO. 23: Subject to and without waiver of the objections set forth above, AIC will produce all non-privileged documents in its possession, custody and control responsive to the request.

REQUEST NO. 24: All documents concerning any aspect of financial participation or financial remuneration to be received by You as part of the transactions contemplated by the Motion. RESPONSE TO REQUEST NO. 24: Subject to and without waiver of the objections set forth above, AIC will produce all non-privileged documents in its possession, custody and control responsive to the request.

REQUEST NO. 25: All documents relied upon by any expert You intend to call as a witness to testify at the hearing concerning the Motion. RESPONSE TO REQUEST NO. 25: Subject to and without waiver of the objections set forth above, AIC does not intend at this time to call an expert at the Bidding Procedures Motion hearing on March 8, 2011. As such, AIC will not produce documents responsive to this request.

REQUEST NO. 26: All documents provided in response to any other discovery demand in this action.

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RESPONSE TO REQUEST NO. 26: Subject to and without waiver of the objections set forth above, AIC will produce all non-privileged documents in its possession, custody and control responsive to the request.

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Dated: New York, New York February 4, 2011

PAUL, WEISS, RIFKIND, WHARTON & GARRISON LLP By: /s/ Andrew J. Ehrlich Alan W. Kornberg Andrew J. Ehrlich 1285 Avenue of the Americas New York, New York 10019-6064 (212) 373-3000

Attorneys for Apollo Investment Corporation

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