Carren B. Shulman, Esq. Alan M. Feld, Esq.

SHEPPARD, MULLIN, RICHTER & HAMPTON LLP 30 Rockefeller Plaza, 24th Floor New York, NY 10112 Telephone: 212-653-8700 Facsimile: 212-653-8701 Attorneys for Marriott International, Inc. 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

MARRIOTT INTERNATIONAL, INC.'S LIMITED OBJECTION TO AND RESERVATION OF RIGHTS REGARDING DEBTORS' MOTION FOR AN ORDER (A) AUTHORIZING THE DEBTORS TO ASSUME THE PLAN SUPPORT AGREEMENT AND (B) GRANTING RELATED RELIEF Marriott International, Inc. ("Marriott"), a creditor and party in interest in this case, by and through its undersigned counsel, submits this limited objection and reservation of rights in response to the Motion for an Order (A) Authorizing the Debtors to Assume the Plan Support Agreement and (B) Granting Related Relief, dated July 19, 2010 [Docket No. 15] (the "Motion") of Innkeepers USA Trust and its affiliated debtors and debtors in possession (the "Debtors"). In support of this limited objection and reservation of rights, Marriott states as follows: JURISDICTION AND VENUE 1. This Court has jurisdiction over this Objection pursuant to 28 U.S.C. 1334.

This is a core proceeding within the meaning of 28 U.S.C. 157(b)(2). 2. Venue is proper under 28 U.S.C. 1408 and 1409.

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BACKGROUND 3. On July 19, 2010 (the "Petition Date"), Debtors filed voluntary petitions for relief

under chapter 11 of the Bankruptcy Code. 4. Debtors continue to operate their businesses and manage their properties as

debtors-in-possession, pursuant to Sections 1107 and 1108 of the Bankruptcy Code. The Franchise Agreements 5. In June 2007, Marriott, as Franchisor, entered into various Franchise Agreements

with certain of the Debtors, all direct and indirect subsidiaries and affiliates of Innkeepers USA Trust (the "Company") for the operation of forty-four (44) hotels (the "Hotels") under brands owned by Marriott (the "Franchise Agreements"). 6. The Franchise Agreements provide, in relevant part:

[N]either Franchisee nor any immediate or remote successor to any part of Franchisee's interest in this franchise, or any individual, partnership, corporation, or other legal entity that directly or indirectly owns or controls any interest (other than interests of limited partners) in this franchise or in Franchisee, shall sell, assign (collaterally or otherwise) transfer, convey, mortgage, grant a security interest or otherwise encumber (each, a "Transfer") any direct or indirect interest in this franchise (including any ownership interest in Franchisee or any controlling (greater than 15%) interest in any entity that controls Franchisee, but excluding interests of limited partners, if any), and no Transfer of this Agreement, the Franchised Business, or a substantial portion of the assets (including building and real estate) of the Franchised Business shall occur without the prior written consent of Franchisor. Except as otherwise provided in this Section XV and Section XVI., any Transfer addressed in the immediately preceding sentence, by operation of law, sale of stock or otherwise, not having the prior written consent of Franchisor will be a material default under this Agreement giving Franchisor the right to terminate this Agreement pursuant to Paragraph XVII.B.4. and seek injunctive relief as well as monetary damages. See e.g., Franchise Agreement at XV(A), p.24, attached hereto as Exhibit A (emphasis added).1

Exhibit A contains Confidential Material, as defined in the Stipulated Protective Order [Docket No. 203], and will be filed under seal with the Court.

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7.

Under Section XV(C) of the Franchise Agreements, Marriott also has the right to

condition its approval of any Transfer, as defined therein, that, alone or together with other previous, simultaneous or proposed Transfers, would result in the transfer of a controlling interest, as determined by Marriott, in the franchised Hotels, Franchise Agreements, the Debtors, any entity that controls the Debtors or substantially all of the assets of the Franchised Business, as defined therein. See Franchise Agreement at XV(C), pp.25-26. 8. The Franchise Agreements further provide, in relevant part:

Publicly-traded securities in Franchisee or in any entity that directly or indirectly controls Franchisee or any direct or indirect interest in the Hotel previously registered under federal securities law may be Transferred without Franchisor's consent if (i) the Transfer is exempt from registration under federal and state securities law, and (ii) the Transfer will not result in a Transfer of control (as reasonably determined by Franchisor) in Franchisee or any entity that directly or indirectly controls Franchisee. Any Transfer of securities in Franchisee or in any entity that directly or indirectly controls Franchisee or any direct or indirect interest in the Hotel that will result in a Transfer of control requires Franchisor's prior written consent, which shall be conditioned upon satisfaction of the requirements of Paragraph XV.C. Franchise Agreement at XVI(A), p.31 (emphasis added). The June 2010 Side Letter 9. On June 25, 2010, at the Debtors' request, Marriott provided the Debtors with a

letter clarifying certain issues under the Franchise Agreements (the "Side Letter"). 10. The Side Letter provides, in relevant part:

Change of Control. Company acknowledges Franchisor's rights to consent or withhold its consent to any Transfer of any interest in the Franchise Agreements, Franchisee or any entity that controls Franchisee as set forth in Section XV.A of the Franchise Agreements and Section 4 of the Owner Agreements. Further, Company acknowledges Franchisor's rights to condition that consent if a change in control occurs in connection with any such Transfer, as set forth in Section XV.C of the Franchise Agreements, including as such applies to the Owner Agreements, pursuant to Section 4 thereof. In the event a successful reorganization of the Company takes place and the Company complies with the terms of Adequate Assurance of Completion of Certain PIPs and Assumption of Agreements, dated as of June 25, 2010, Franchisor will not unreasonably withhold
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its consent to a "change of control" as referenced in the Franchise Agreements, if upon the conclusion of the reorganization contemplated by this Agreement, Apollo Investment Corporation or its affiliates ("Apollo") or Lehman Brothers Holdings, Inc., LAMCO, LLC, Lehman ALI, Inc. or its or their affiliates ("Lehman") obtains, individually, or collectively, a controlling interest in the Company (Apollo and Lehman, individually or collectively own at least fifty percent (50%) of the Company). See Side Letter, p.2, attached hereto as Exhibit B.2 OBJECTION AND RESERVATION OF RIGHTS 11. Marriott objects to the relief sought in the Motion to the extent it seeks to limit

and subvert its rights under the Franchise Agreement. 12. Specifically, under the Franchise Agreements, Marriott has the right to consent or

withhold its consent to any transfer of any direct or indirect interest in the Franchise Agreements, including to any transfer of ownership interest in the Debtors or any controlling interest (defined as greater than 15%) in any entity that controls the Debtors. The Debtors expressly acknowledge this right in the Side Letter. 13. Through the Motion, the Debtors seek to assume that certain Plan Support

Agreement (the "PSA") between the Debtors and Lehman ALI Inc. ("Lehman"). The PSA, among other things, provides that Lehman will receive 100% of the new shares of common stock issued by the Debtors ("New Equity") pursuant to the Plan Term Sheet in full and final satisfaction of its approximately $238 million secured claim with respect to the debt owed by 20 of the Debtors under that certain Loan Agreement, dated as of June 29, 2007, as amended. See Motion at 8(b). The Plan Term Sheet annexed as Exhibit A to the PSA provides that Lehman

Exhibit B contains Confidential Material, as defined in the Stipulated Protective Order [Docket No. 203], and will be filed under seal with the Court.

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will execute definitive agreements with respect to the sale of 50% of the New Equity. See PSA at Ex. A. 14. According to documents filed by Lehman in the chapter 11 proceeding of Lehman

Brothers Holdings Inc. (Case No. 09-1335), Lehman and Apollo Investment Corporation ("AIC") entered into a letter agreement providing that Lehman and AIC will enter into a stock purchase agreement whereby Lehman will agree to sell to Apollo, and Apollo, subject to the terms therein, will agree to purchase from Lehman the right to receive 50% of the New Equity. See Motion of Lehman Commercial Paper Inc. Pursuant to Section 363 of the Bankruptcy Code for the Authority to (I) Consent to its Non-Debtor Affiliate Lehman ALI Inc. (A) Entry into Plan Support Agreement Related to the Restructuring of Innkeepers USA Trust; and (B) Consummation of the Transactions Set Forth in the Plan Term Sheet; and (II) Provide Funds to Solar Finance Inc., a Non-Debtor Affiliate, to Provide Debtor-In-Possession Financing [Case No. 08-13555, Docket No. 10465]. It is unclear at this time whether Lehman and/or AIC intend to further transfer the New Equity interests following the proposed reorganization of the Debtors. 15. Due to this uncertainty, Marriott expressly reserves, and objects to the Motion to

the extent it seeks to limit its rights under the Franchise Agreement, as amended by the Side Letter, to consent or withhold its consent to any transfer of any direct or indirect interest in the Franchise Agreements, including to any transfer of ownership interest in the Debtors or any controlling interest in any entity that controls the Debtors. Conclusion WHEREFORE, Marriott respectfully requests that the Court, in any order granting the Motion, (i) expressly recognize Marriott's rights under the Franchise Agreement to consent or withhold its consent to any transfer of interest in the Franchise Agreements, the Debtors or any

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entity that controls the Debtors; and (ii) grant such other and further relief as may be just and proper. Dated: August 20, 2010 New York, New York

Respectfully submitted, SHEPPARD MULLIN RICHTER & HAMPTON LLP /s/ Carren B. Shulman Carren B. Shulman, Esq. Alan M. Feld, Esq. 30 Rockefeller Plaza, 24th Floor New York, New York 10112 Telephone: 212-653-8700 Facsimile: 212-653-8701 Attorneys for Marriott International, Inc. .

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Exhibit A Franchise Agreement

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Exhibit Filed Under Seal

Exhibit B Side Letter

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Exhibit Filed Under Seal